Loading...
HomeMy WebLinkAbout2012-12-11; City Council; 21073; Amendment Sublease Palomar Transfer Coast WasteCITY OF CARLSBAD - AGENDA BILL AB# 21.073 CONSENTING TO AN AMENDMENT OF THE SUBLEASE BETWEEN PALOMAR TRANSFER STATION, INC. AND COAST WASTE MANAGEMENT, INC. DEPT. DIRECTO^^^'t^^^ MTG. 12/11/12 CONSENTING TO AN AMENDMENT OF THE SUBLEASE BETWEEN PALOMAR TRANSFER STATION, INC. AND COAST WASTE MANAGEMENT, INC. CITY ATTORNEY DEPT. UTIL CONSENTING TO AN AMENDMENT OF THE SUBLEASE BETWEEN PALOMAR TRANSFER STATION, INC. AND COAST WASTE MANAGEMENT, INC. CITY MANAGER ^^g^ RECOMMENDED ACTION: Adopt Resolution No. 2012-275 consenting to an amendment of the sublease between Palomar Transfer Station, Inc. ("PTS") and Coast Waste Management, Inc. ("CWM") for a portion of the Palomar Facility ("Property"). ITEM EXPLANATION: On February 14, 2012, the City Council of the City of Carlsbad adopted Resolution No. 2012-035 consenting to an amendment of the sublease between PTS and CWM for a portion of the Property. Subsequently, the County of San Diego ("County") has requested some changes to the sublease and these changes were implemented and approved by CWM, PTS and the County. All of the changes were administrative in nature, and staff is recommending approval of the new sublease ("Exhibit 2"). The major changes are as follows: • Consistency of Terms Used - Terms used throughout the sublease agreement were changed slightly for consistency purposes (for example. Sublessee was replaced with CWM, etc.). • Exhibit C "Countv of San Diego Required Sublease Provisions" - Exhibit C was added to the sublease as a provision laid out in the Transfer Station Master Lease Agreement for the Property (dated October 31,1997, on file with the City Clerk's office). Background PTS entered into a long term lease with the County of San Diego for the Property in 1997. On May 31, 2000, PTS subleased a portion of the Property to CWM for use as a trucking terminal ("WMI Sublease"). On June 1, 2002, PTS assigned the long term lease to the City of Carisbad ("City") but retained its interest in the WMI Sublease. The City currently has an agreement titled "Agreement for Transfer Station and Disposal Services" ("Agreement", on file with the City Clerk's office) with PTS to dispose of the City's solid waste at the Property. Currently CWM operates its waste hauling operations for the City of Carisbad from the subleased portion of the Property. Section 2.02.E of the Agreement titled "Assignment of the PTS Lease" states that the WMI Sublease shall not be amended without the prior written consent of the City. In order to meet this requirement, staff is recommending that the City Council approve the attached resolution ("Exhibit 1") therefore consenting to an amendment to the sublease. DEPARTMENT CONTACT: Craig Schmollinger 760-602-7502 craig.schmollinger(g)xarisbadca.qov FOR CITY CLERKS USE ONLY M COUNCIL ACTION: APPROVED M CONTINUED TO DATE SPECIFIC • DENIED • CONTINUED TO DATE UNKNOWN • CONTINUED • RETURNED TO STAFF • WITHDRAWN • OTHER-SEE MINUTES • AMENDED • Page 2 ENVIRONMENTAL IMPACT: Pursuant to Public Resources Code Section 21065, this action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. FISCAL IMPACT: There is no fiscal impact. EXHIBITS: 1. Resolution No. 2012-275 2. Proposed WMI Sublease (Exhibits to the sublease and attachments are on file with the City Clerk's office) 3. Previously Approved WMI Sublease 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 2012-275 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, CONSENTING TO AN AMENDMENT OF THE SUBLEASE AGREEMENT BETWEEN PALOMAR TRANSFER STATION, INC. AND COAST WASTE MANAGEMENT, INC. FOR A PORTION OF THE PALOMAR TRANSFER STATION. WHEREAS, the City of Carisbad ("City") leases the Palomar Facility to Palomar Transfer Station, Inc. ("PTS"); and WHEREAS, PTS has a sublease with Coast Waste Management, Inc. (CWM) for a portion of the Palomar Facility for use as a trucking terminal ("WMI Sublease"); and WHEREAS, the City and PTS have an agreement to dispose of solid waste through the Palomar Facility; and WHEREAS, under Section 2.02.E of the agreement, the WMI Sublease shall not be amended without the prior written consent of the City; and WHEREAS, on February 14, 2012 the City Council of the City of Carlsbad consented to an amendment of the sublease between PTS and CWM for a portion of the Property; and WHEREAS, subsequent changes were made to the sublease approved on February 14, 2012 and changes were administrative in nature; and WHEREAS, the proposed WMI Sublease was approved by CWM, PTS and the County. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carisbad, California, as follows: 1. That the above recitations are true and correct. 2. That the City Council hereby provides this written approval for PTS to amend the WMI Sublease, retroactively effective June 1, 2012 as set forth in "Exhibit 2." /// /// /// /// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 11th day of Decennber 2012, by the following vote to wit: AYES: NOES: Council Members Hall, Kulchin, Blackburn, Douglas, Packard. None. ABSENT: None. MATT HALL, Mayor ATTEST: (SEAL) , I "7 SUB-SUBLEASE AND DISPOSAL AGREEMENT This Sub-Sublease and Disposal Agreement ("Agreement") is made and entered into as of April 20, 2012, among PALOMAR TRANSFER STATION, INC. ("Palomar") and ALLIED WASTE INDUSTRIES, INC. and its affiliates ("AiUed"), and COAST WASTE MANAGEMENT, INC., a Califomia corporation, a Waste Management Company, and its affiliates (collectively "CWM"). RECITALS A. The County of San Diego, a political subdivision of the State of Califomia (the "County"), as lessor, and Palomar, as lessee, entered into that certain Palomar Transfer Station Lease Agreement dated October 31, 1997 (the "Transfer Station Master Lease") for that certain real property located in the City of Carisbad, County of San Diego, Califomia identified as San Diego County Assessor's Parcel Number 97-0085-Al and known as the Palomar Facility (the "Property"), which consists, among other things, of a solid waste transfer station, office space, parking and maintenance facilities, all as more particularly described in the Transfer Station Master Lease, a copy of which Transfer Station Master Lease is attached hereto and incorporated herein as Exhibit A. B. Allied and CWM are parties to that certain Purchase Agreement dated November 5, 1999, as amended from time to time (the "Purchase Agreement"), which provides for the purchase by Allied of CWM's landfill and a landfill operating agreement in the Yuma, Arizona area. The execution of this Agreement is a condition to the consummation of the transactions contemplated by the Purchase Agreement. C. Palomar assigned all of its rights, title and interests as lessee in, under and to the Transfer Station Master Lease to the City of Carlsbad, a municipal corporation of the State of Califomia (the "City") pursuant to that certain Assignment of Lease dated June 1,2002. D. Palomar, pursuant to the terms of that certain Sublease Agreement for Palomar Transfer Station dated June 1, 2002 (the "Transfer Station Sublease") between Palomar, as sublessee, and the City, as sublessor, subleases the Property, a copy of which Transfer Station Sublease is attached hereto as Exhibit B. E. Commencing on the Effective Date hereof (as hereinafter defined), Palomar desires to sublease to CWM, and CWM desires to sublease fi-om Palomar, the portion of the Property consistmg generally of office space, parking and maintenance facilities for use as a tmcking temiinal for the collection of solid waste and recyclable materials (the "Sublease Premises"). F. During the Term (as defined in Section 1), CWM desires to deliver Acceptable Waste (as defined in Section 3.2) collected by it from and in the City of Carlsbad, Califomia to the transfer station located on the Property (the 'Transfer Station"), and Palomar desires to transport and dispose of such waste for CWM. G. Palomar, Allied and CWM entered into that certain Transport and Disposal Agreement, dated November, 2011. H. Palomar and Allied have entered into a renewal of that certain agreement entitled "Agreement for Transfer Station and Disposal Services between the City of Carlsbad and Palomar Transfer Station, Inc." ("Carlsbad Disposal Agreement") with the City, and CWM has entered into a renewal of that certain agreement entitled "Contract for the Provision of Solid Waste Services" ("Carlsbad Collection Agreement") with the City. AGREEMENTS NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the covenants and agreements contained in this Agreement, the parties agree as follows: 1. TERM Unless sooner terminated in accordance with the terms hereof, this Agreement shall become effective on the date first written above (the "Effective Date") and shall remain in effect until May 31, 2022 unless otherwise extended by written agreement of the parties hereto, or their successors or assigns; provided the Transfer Station Sublease and the Transfer Station Master Lease are still validly existing (the "Term"), at which time CWM shall vacate the Sublease Premises in accordance with the terms and conditions of this Agreement. If the Transfer Station Sublease and the Transfer Station Master Lease are not still validly existing, then CWM shall vacate the Sublease Premises in accordance with the terms and conditions of this Agreement on or before May 31,2022. Upon expiration of the Term or as otherwise explicitly provided in this Agreement, the obligations of Palomar to sublease the Sublease Premises to CWM, the obligations of CWM to sublease the Sublease Premises from Palomar and the obligations of CWM and Allied to deliver and accept Acceptable Waste shall terminate; provided, however, that all other obligations of the parties hereunder shall survive the termination of this Agreement and continue until the same are fully satisfied or waived. 2. SUBLEASE PROVISION 2.1 Sublease Premises. Palomar hereby subleases to CWM and CWM hereby subleases from Palomar the Sublease Premises upon the following terms and conditions. This Agreement is made subject to and is subordinate to all the terms and conditions of the Transfer Station Master Lease, including the provisions of Exhibit F to the Transfer Station Master Lease (McClellan-Palomar Airport: The County of San Diego Required Sublease Provisions) (the "Required Sublease Provisions"). The required provisions of the Required Sublease Provisions are attached hereto as Exhibit C and made a part of this Agreement by this reference. The effectiveness of the Transfer Station Master Lease shall be an express and continuing condition precedent to the effectiveness of this Agreement. The parties further acknowledge that this Agreement is subject to the County's prior written consent, which consent is attached hereto and made a part hereof as Exhibit D. Palomar will use its best efforts to obtain the Coimty's consent on or prior to June 1, 2012. Palomar covenants not to cause any default under the Transfer Station Sublease that results in the termination of the Transfer Station Sublease or the Transfer Station Master Lease and not to take any other intentional action to cause the termination of the Transfer Station Sublease. 2.2 Rent. CWM shall pay to Palomar as rent for the Sublease Premises the sum of Fifteen Thousand and 00/100 Dollars ($15,000.00) per month, in advance, on the first day of each month durmg the Term from the Effective Date to May 31, 2012. The base monthly rent, effective June 1,2012, and continuing for each and every month during the Term thereafter, shall be the sum of Sbcty Thousand and 00/100 Dollars ($60,000.00) (for an annual rent equal to Seven Hundred Twenty Thousand and 00/100 Dollars ($720,000.00)) due and payable in accordance with the terms hereof From and after June 1, 2013, the rent hereunder shall be subject to a percentage increase only based on the annual increases in collection rates applied by the City pursuant to the Carlsbad Collection Agreement. However, under no circumstances shall the rent hereunder be decreased if the rate applied by ttie City pursuant to the Carlsbad Collection Agreement decreases, rather in that case there shall be no adjustment for the year in which there was no increase. In the event CWM fails to make payment when due, any amount remaining unpaid shall bear interest at the lesser of the rate of 1% per month or the highest rate of interest allowed under Applicable Laws (as defined ui Section 3.3(b)), from such time to the actual date of payment. 2.3 Taxes and Utilities. Palomar shall maintain all necessary electric, gas and water and sewer service for the operation of the Property, and shall provide the same to CWM with respect to the Sublease Premises. CWM shall reimburse Palomar one-half (1/2) of Palomar's utility costs, payable upon receipt by CWM of a copy of the utility invoice and evidence o payment by Palomar. Palomar shall pay all property taxes relating to the Property. CWM shall reimburse Palomar one-half (1/2) of all property taxes paid, except for any new or increased property taxes assessed solely with respect to property or improvements other than the Sublease Premises, payable upon receipt of the tax bill and evidence of payment by Palomar. CWM shall be solely responsible for any personal property taxes imposed with respect to its trade fixtures, furnishings and equipment located on the Sublease Premises. 2.4 Assignment and Subletting. CWM shall not voluntarily or by operation of law assign, transfer, sublet, mortgage or otherwise transfer or encumber the Sublease Premises without Palomar's prior written consent, which shall not be withheld unreasonably; provided however, that CWM may assign this Agreement to an affiliate of CWM without the consent of Palomar or Allied. 2.5 Transfer Station Master Lease is Incoroorated. This Agreement is made subject to and is subordinate to the terms of the Transfer Station Master Lease, including Exhibit F thereto, which shall govern this Agreement. 2.6 Permitted Uses. CWM may utilize the Sublease Premises for parking of vehicles, maintenance, office facilities, and ancillary uses related to the operation of a solid waste and recyclable materials collection tmck terminal (collectively the "Permitted Uses"). 7 2.7 Covenant of Quiet Enjoyment. Provided that CWM is in compliance with the terms and conditions of this Agreement, Palomar covenants that it will take no action that will interfere with CWM's quiet and peaceable enjoyment of the Sublease Premises for the Permitted Uses. 2.8 Encumbrances. Palomar shall not pledge or encumber this Agreement, or any right or interest in the Sublease Premises or any of the improvements thereon, in any manner that would interfere with CWM's quiet and peaceable enjoyment thereof during the Term of this Agreement, and any pledge or encumbrance of any kuid or nature shall be made expressly subject to this Agreement and CWM's right of possession of the Sublease Premises during the Term of this Agreement. 2.9 Improvements. If and to the extent permitted by the terms and conditions and approval requirements of the Transfer Station Master Lease, which are in addition to the approval rights of Palomar, CWM shall have the right to make legally permitted improvements to the Sublease Premises upon the written consent of Palomar, which shall not be withheld unreasonably nor required in the event of improvements of less than $25,000 in cost. 2.10 Eminent Domain. If all or any portion of the Sublease Premises is taken in fee by a governmental entity and such taking interferes with the conduct of CWM's Permitted Uses, CWM shall have the right to terminate this Agreement without penalty upon sixty (60) days' written notice to Palomar. 3. CWM's OBLIGATIONS 3.1 Exclusivity. (a) During the Term hereof, CWM shall deliver to Palomar and Palomar shall accept at the Transfer Station all Acceptable Waste collected by CWM for disposal pursuant to the Carlsbad Collection Agreement (the "Carlsbad Acceptable Waste"). CWM estimates the amount of Carisbad Acceptable Waste to be delivered, based on a 5.5-day work week, to be approximately 350 tons per day. Notwithstanding the above, CWM's obligation to deliver the Carlsbad Acceptable Waste exclusively to the Transfer Station shall terminate (i) concurrently with the termination or expiration of the Carlsbad Collection Agreement, however brought about, or (ii) should the City refuse to approve of the disposal facility selected by Palomar, or exercise its "flow control" rights to direct the Carlsbad Acceptable Waste to a facility other than the Transfer Station or to a disposal facility other than a disposal facility selected by Palomar. For handling, transporting and disposing of such Acceptable Waste, CWM shall pay Palomar the fee set forth in Section 5.1, subject to adjustment as provided in Section 5. No action by the City or other governmental entity that prevents or limits the delivery of Carlsbad Acceptable Waste to the Transfer Station or a disposal facility selected by Palomar shall constitute a breach of this Agreement by either party, limit the Term, or affect any of the terms and conditions of the Sublease provided in Section 2. (b) CWM shall arrange, be responsible for, and bear the costs of delivering Acceptable Waste to Allied at the Transfer Station, CWM shall ensure that all waste it delivers to Allied is Acceptable Waste. CWM shall deliver the Acceptable Waste during the Transfer Station's normal hours of operation. (c) Allied shall at all times maintain permitted capacity and operate the Transfer Station in a manner so as to allow the prompt receipt of the Carlsbad Acceptable Waste when and as delivered by CWM. With respect to all Acceptable Waste delivered by CWM, Palomar shall operate the Transfer Station in a manner such that the tmck turnaround times shall be minimized, and in no event exceed fifteen (15) minutes, (d) CWM shall defend, indemnify and hold harmless Allied with respect to any notices of violation or other citations related to CWM's occupancy and operation of the Sublease Premises during the Term, and will take reasonable corrective action in response thereto prior to the transfer of occupancy to Allied. 3.2 Composition of Waste. As used in this Agreement, "Acceptable Waste" means all garbage, refiise, mbbish and other materials and substances discarded or rejected as being spent, useless, worthless, or in excess to the owners at the time of such discard or rejection and which are normally disposed of, or collected from residential (single family or multi-family), commercial, industrial, governmental and institutional establishments, and which are acceptable for disposal at Class 111 landfills in Califomia. 3.3 Definition of Unacceptable Waste. Waste shall be considered "Unacceptable Waste" if: (a) it fails to comply with the requirements of Section 3.2; (b) it can now or hereafter be defined by any applicable federal, state or local statute, law, ordinance, code, mle, regulation, order, judgment, permit or license relating to the operation, maintenance and constmction of the Transfer Station or the transportation, receipt, acceptance or disposal of waste materials ("Applicable Law") as a hazardous waste, a hazardous substance or hazardous material, or if it is determined by any governmental agency or unit having or claiming appropriate jurisdiction to be harmful, toxic or dangerous, or otherwise ineligible for disposal at Allied's disposal facility; provided, however, that Acceptable Waste may include de minimis amounts of hazardous substances commonly foimd in waste generated from residences and commercial premises that may be disposed of in Class III landfills in Califomia; (c) it is agricultural waste, explosive materials, corrosive materials, pathological waste, biological waste, offel (entrails, etc., of butchered animals), radioactive materials, ashes, foundry sand, mining waste, sewage sludge, cesspool and other human waste, human and animal remains, motor vehicles, major motor vehicle parts (including transmissions, rear ends, springs, fenders, batteries, battery cables, exhaust systems and gasoline tanks), agricultural and farm machinery and equipment and major parts thereof, marine vessels and major parts thereof, any other large type of machinery or equipment, including thick walled or solid metallic objects such as castings, forgings, gas cyluiders, 55 gallon dmms, asbestos insulation, closed metal containers, barrels, buckets, or large motors, solid blocks of mbber or plastic, large rolls of carpet or fencing over 12 inches in diameter, steel or nylon rope, chains, cables or slings, logs larger than usually accepted according to Allied's normal operating procedure at its disposal fecilities, tree stumps, more than an incidental amount of tires, white goods such as refrigerators, stoves and washing machines that have not been properly evacuated, liquid waste, including liquid chemical wastes, sewage and other highly diluted water-carried materials or substances and those in gaseous form, or special nuclear or by-product materials within the meaning of the Atomic Energy Act of 1954, as amended; (d) it is constmction materials and/or demolition debris which is not permitted under then Applicable Law to be disposed of at Class UI landfills in Califomia; or (e) it is any other material which may present a substantial endangerment to public healtii or safety, would cause applicable air quality or water effluent standards to be violated by the normal operation of Allied's disposal facilities or because of its size, durability or composition cannot be disposed of at Allied's disposal facilities or has a reasonable possibility of otherwise adversely affecting the operation or useful life of Allied's disposal facilities outside the normal usage expected for such facilities. 3.4 Rejection of Waste. This Agreement creates no obligation on Palomar or Allied to accept or dispose of any Unacceptable Waste. Palomar or Allied shall have the right in its reasonable discretion to reject delivery of any waste offered for acceptance by CWM that does not constitute Acceptable Waste. Palomar or Allied may reject, in whole or in part, any load containing Unacceptable Waste. CWM's delivery vehicle in question shall immediately remove any Unacceptable Waste rejected by Palomar or Allied and transport it to another lawful place of disposition. 3.5 Delivery Vehicles. Acceptable Waste shall be delivered by CWM, at its expense, to Allied at the Transfer Station in enclosed container vehicles or enclosed compactor vehicles which shall include, but not be limited to, properly covered roll-offs, complying with all Applicable Laws. Such vehicles shall be enclosed and self-unloading and shall comply with the identification procedures at the Transfer Station. 3.6 Weighing of Acceptable Waste. Allied shall operate and maintain, or cause to be operated and maintained, a scale facility at the Transfer Station. Upon arrival of a CWM delivery vehicle at a Transfer Station, Allied shall weigh each load of Acceptable Waste delivered to Allied for transportation and disposal. Allied shall keep daily records of the weight of each load of Acceptable Waste, and shall deliver a report of weights to CWM by electronic or other approved means prior to the close of business on the day the loads are delivered. CWM reserves the right to use its own or other scales to verify the weight of each load, and to dispute the weight of, and payment of fees on, any load whose weight is materially different from that indicated on Allied's report. 3.7 Access to Sublease Premises. Allied shall grant or cause to be granted to CWM, its agents and employees, during the Term of this Agreement, access to the Transfer Station for purposes of fulfilling its obligations under this Agreement. to 3.8 Permits and Licenses. CWM shall at all times maintain in full force and effect all existing permits, licenses and approvals necessary to deliver waste to Allied. CWM shall collect and deliver waste in compliance with all Applicable Law. 4. PALOMAR'S AND ALLIED'S OBLIGATIONS 4.1 Transfer Station Premises. Allied or its designee shall be responsible for the operation and maintenance of all improvements at the Transfer Station. Allied accepts the transfer of the right to occupy the Transfer Station. 4.2 Transportation. Allied shall provide suitable transportation equipment to transport Acceptable Waste tendered by CWM to Allied's disposal sites. Subject to Sections 3.1 and 3,4, Palomar agrees to accept all Acceptable Waste tendered to it by CWM under this Agreement and to transport such Acceptable Waste to a permitted landfill capable of accepting the Acceptable Waste. 4.3 Disposal. Subject to Sections 3.1 and 3.4, Allied agrees to dispose of all Acceptable Waste tendered by CWM at a permitted landfill capable of accepting the Acceptable Waste. Allied shall be solely responsible for determining the appropriate disposal sites, times, techniques and methods for disposal of the Acceptable Waste; except that Allied shall comply with any orders or directives from a local governmental entity regarding the disposal site utilized made pursuant to contract or through the exercise of that entity's "flow control" powers. 4.4 Permits and Licenses. Palomar and Allied shall at all times maintain in full force and effect all existing permits, licenses and approvals necessary to operate the Transfer Station and transport and dispose of Acceptable Waste delivered to Palomar at the Transfer Station. Palomar and Allied shall operate the Transfer Station and transport and dispose of Acceptable Waste in material compliance with all Applicable Law. 5. COMPENSATION FOR DISPOSAL SERVICES 5.1 Fees. For the acceptance, transportation and disposal by Palomar and Allied o Acceptable Waste generated in or collected in the City of Carlsbad and delivered to the Transfer Station pursuant to Section 3.1, CWM will pay Palomar the per ton fee established in the Carlsbad Disposal Agreement (the "Disposal Fee"), as such Disposal Fee is adjusted from time to time pursuant to the terms of the Carlsbad Disposal Agreement, as it may be amended from time to time. 5.2 Taxes. Subject to Section 5.3, CWM shall reimburse Allied for any new or increased taxes, tariffs, fees, surcharges or other charges imposed by legislation or regulations enacted or promulgated after the date of this Agreement (collectively, "Taxes") and levied upon the transportation and disposal of the Acceptable Waste upon 90 days written notice of such change in legislation and upon submission by Palomar or Allied of evidence that such Taxes have been levied or paid; provided, however, that CWM shall have no obligation to reimburse Allied with respect to any increase in host fees on Carlsbad Acceptable Waste. Any sales, use, or other taxes imposed by any federal, state or local law on any goods and/or services required to II be procured or furnished by a party under this Agreement shall be duly paid by such party. Each party shall pay, at its own expense, all payroll taxes or contributions, unemployment insurance or other similar taxes, assessments or charges, as now or hereinafter may be in effect which are to be paid relating to any employee or agent of the party. Notwithstanding the foregoing, the price adjustments provided for in this Section 5.2 shall not apply to the extent such Taxes are included in and paid through the Disposal Fee. 5.3 Exceptions to Adjustments, Notwithstanding the provisions of Section 5.2, m the event CWM is unable to pass through any rate adjustment on Carlsbad Acceptable Waste related to a change in Applicable Laws or new or increased taxes or fees to the City pursuant to the Carlsbad Collection Agreement, and provided that CWM has made a good faitii effort to obtain such pass through, the rate adjustment requested or imposed by Palomar or Allied shall be of no further force and effect and the rate for services shall be the same as if such adjustment had not been requested or imposed. 5.4 Payment. Palomar shall transmit an itemized invoice to CWM of all disposal charges hereunder on a monthly basis. CWM shall pay all invoices within thirty (30) days after receipt. In the event CWM fails to make payment when due, any amount remaining unpaid shall bear interest at a rate of the lesser of 1% per month or the highest rate of interest allowed under Applicable Laws from such time to the actual date of payment. 5.5 No Rights of Set-off, The obligations of CWM to make payments under this Agreement shall not be subject to any set-off abatement, counterclaim, existence of a dispute or any reason, known or unknown, foreseeable or unforeseeable, which might otherwise constitute a legal or equitable defense or discharge of the liabilities of CWM hereunder or limit recourse to CWM. 6. TITLE AND RISK OF LOSS 6.1 Acceptable Waste, In the case of Acceptable Waste delivered to Palomar at the Transfer Station, all title, risk of loss and all other incidents of ownership of Acceptable Waste shall transfer from CWM and vest in Palomar and Allied upon the Acceptable Waste being accepted by Palomar at the Transfer Station. 6.2 Unacceptable Waste. Titie, risk of loss and all other incidents of ownership of Unacceptable Waste and any rejected Acceptable Waste tendered by CWM for disposal at the Transfer Station shall at no time be transferred to Palomar or Allied, and shall at all times remain in CWM. 7. REPRESENTATIONS, WARRANTIES AND COVENANTS 7.1 Palomar's and Allied's Representations and Warranties. Palomar and Allied represent and warrant to CWM that: (a) it has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (b) the execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of Palomar and Allied; (c) it is, or will be prior to providing service under this Agreement, in material compliance with all Applicable Laws affecting the services to be provided by it, and it will perform such services using industry accepted practices; and (d) it will observe and comply, in all material respects, with all Applicable Laws. 7.2 CWM's Representations and Warranties. CWM represents and warrants to Palomar and Allied that: (a) it has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (b) the execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of CWM; (c) it is, or will be prior to performing its obligations under this Agreement, in material compliance with all Applicable Laws affecting the services to be provided by it, and it will perform such services using industry accepted practices; (d) it will observe and comply, in all material respects, with all Applicable Laws; (e) is under no restraint which prohibits the transfer of possession or titie to such Acceptable Waste to Palomar or Allied. 7.3 Additional Covenants of CWM. CWM shall promptly report to Palomar any information that the Acceptable Waste tendered to Palomar, or some constituents or components thereof, present or may present a threat to human health or the environment which was not disclosed prior to loading of the Acceptable Waste on Palomar trailers or containers for transportation and disposal. 8. INDEMNIFICATION 8.1 Indemnification by CWM. CWM agrees to indemnify and hold harmless Palomar and Allied and its subsidiaries and affiliates, and their respective directors, officers, agents and employees (the "Allied Indemnified Parties") from and against any and all liabilities, losses, damages, costs, expenses and disbursements, including reasonable legal fees and expenses, arising out of any claun or loss of or damage to property and injuries to or death of any persons, including any Allied Indenmified Parties, caused (i) by the breach of any term, covenant, agreement or undertaking herein of CWM (other than a breach caused by Palomar's or Allied's breach of its obligations hereunder) or (ii) by the negligence or willful misconduct of CWM. 8,2 Indenmification bv Palomar and Allied. Palomar and Allied agree to indemnify and hold harmless CWM and its subsidiaries and affiliates, and their respective directors, officers, agents and employees (the "CWM Indemnified Parties") from and against any and all liabilities, losses, damages, costs, expenses and disbursements, including reasonable legal fees and expenses, arising out of any claim or loss of or damage to property and injuries to or death of any persons, including any CWM Indenmified Parties, caused (i) by the breach of any term, covenant, agreement or undertaking herein of Palomar or Allied (other than a breach caused by CWM's breach of its obligations hereunder) or (ii) by the negligence or willful misconduct of Palomar or Allied. 9. TERMINATION AND REMEDIES 9.1 Default. (a) Events of Default of Palomar or Allied. Each of the following shall be an event of default by Palomar or Allied under this Agreement: (i) Palomar or Allied fail to observe and perform any material term, covenant or agreement contained in this Agreement on its part to be performed and continues such failure for a period of thirty (30) days after written notice to Palomar or Allied specifying the nature of such failure and requesting that it be remedied; or (ii) Palomar or Allied make a general assignment for the benefit of creditors, files a petition in bankmptcy, is adjudicated insolvent or bankmpt, petitions or applies to any tribunal for any custodian, receiver or tmstee for it or any substantial part of its property, commences any proceeding relating to it under bankmptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction whether now or hereinafter in effect, or if there shall have been filed any such proceeding, in which an order for relief is entered or which remains undismissed for a period of sixty (60) days or more or if by any act indicates its consent to, approval of or acquiescence in any such petition, application or proceeding or order for relief or the appointment of any custodian, receiver of or any tmstee for it or any substantial part of its property or suffers such custodianship, receivership or tmsteeship to continue undismissed for a period of sixfy (60) days or more. (b) Events of Default CWM. Each of the following shall be an event of default by CWM under this Agreement: (i) CWM fails to pay any amounts, including without limitation any rent or Disposal Fee, which become due hereunder, within thirty (30) days notice of delinquency from Palomar or Allied; (ii) CWM fails to observe and perform any other material term, covenant or agreement contained in this Agreement on its part to be performed and continues such failure for a period of thirty (30) days after written notice to CWM specifying the nature of such failure and requesting that it be remedied; or 10 (iii) CWM makes a general assignment for the benefit of creditors, files a petition in bankmptcy, is adjudicated insolvent or bankmpt, petitions or applies to any tribunal for any custodian, receiver or tmstee for it or any substantial part of its property, commences any proceedings relating to it under bankmptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction whether now or hereinafter in effect, or if there shall have been filed any such proceeding, in which an order for relief is entered or which remains undismissed for a period of sixty (60) days or more or if by any act indicates its consent to, approval of or acquiescence in any such petition, application or proceeding or order for relief or the appointment of any custodian, receiver of or any tmstee for it or any substantial part of its property or suffers such custodianship, receivership or tmsteeship to continue undismissed for a period of sixty (60) days or more. (c) Remedies on Default. Whenever any event of default shall have occurred and be continuing, the nondefaulting party shall have the following rights and remedies: (i) Upon thirty (30) days' written notice to Palomar or Allied if Palomar or Allied is then in default, CWM shall have the option to terminate this Agreement unless the event of default is cured prior to the expiration of such 30-day period or unless during such period Palomar or Allied has taken remedial steps the effect of which would be to enable Palomar or Allied to cure such event of default within a reasonable period of time; (ii) Upon thirty (30) days' written notice to CWM, if CWM is then in default, Palomar or Allied shall have the option to terminate this Agreement unless the event of default is cured prior to the expiration of such 30-day period or unless during such period CWM has taken remedial steps the effect of which would be to enable CWM to cure such event of default within a reasonable period to time; and (iii) In the event Palomar or Allied is in default of its obligation to handle, transport or dispose of Acceptable Waste delivered by CWM to the Transfer Station pursuant to Sections 3,1(c) and 4.3, except where arising as a result of an event of Force Majeure, and following notice and opportunity to cure of not more tiian one (1) business day, CWM, in addition to any other rights and remedies provided herein, shall have the right to deliver Acceptable Waste dkectly to a disposal facility selected by CWM and to have reimbursed from Palomar or Allied any and all additional handling, transportation, or disposal costs. 10. MISCELLANEOUS 10.1 Force Majeure. Except for CWM's obligation to pay for rent and services rendered, any party's obligations under this Agreement may be suspended by a party in the event of: (i) an occurrence beyond the reasonable control of tiiat party which adversely affects the ability of the party to perform its obligations hereunder or to comply with the requirements of any governmental order, permit or other approval; (ii) acts of God, landslides, lightning, earthquakes, hurricanes, tomadoes, severe weather, fires, explosions, floods, acts of public enemy, war, blockades, insurrections, riots or civil disturbances; or (iii) orders and/or judgments of any federal, state or local court, administrative agency or governmental body, or other entity, 11 if not the result of willful or negligent action of the party relying thereon or failure to act in accordance with tiiis Agreement (provided, however, that tiie contesting in good faith by such party of any such order and/or judgment shall not constitute or be constmed to constitute a willful or negligent action or inaction of such party), 10.2 No Opposition bv CWM. CWM shall not take any action, or omit to take any action, that would oppose Allied's efforts to re-negotiate the City of Carlsbad host fees, to repermit the Transfer Station or expand the conditional use permit relating thereto; provided, however, that CWM shall have all rights under Applicable Laws to comment on any application. Environmental Impact Report, or other related filing. 10.3 Assignment: Binding Effect. Neither party shall assign tiiis Agreement without the consent of the other, which shall not be withheld unreasonably nor required in the event of an assignment to an affiliate; provided, however, that no assignment by Palomar or Allied shall interfere with CWM's use of the subleased Sublease Premises during tiie Term of tiiis Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. 10.4 Entire Agreement, This Agreement (including tiie Transfer Station Master Lease) supersedes all prior agreements, written or oral, with respect to the subject matter of this Agreement, This Agreement may be changed only by a written instmment signed by both parties hereto. 10.5 Severability. In the event that any one or more of the provisions contained in this Agreement is, for any reason, held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and all other provisions shall remain in full force and effect, 10.6 Waiver. No delay or omission by a party in exercising any right under this Agreement will operate as a waiver of that or any other right. A waiver or consent given by a party on any occasion is effective only in that instance and will not be constmed as a bar to or waiver of any right on any other occasion. 10.7 Notice. Any notice, request, information or other document to be given hereunder to one of the parties by the otiier party shall be in writing and shall be given by hand delivery, facsimile, certified or registered U.S. mail or a private courier service which provides evidence of receipt as part of the service, as follows: If to Palomar/AUied: Palomar Transfer Station, Inc. Allied Waste Services San Diego 8364 Claremont Mesa Boulevard San Diego, CA 92111 Attn: James T. Ambroso, Vice President 12 Witii a copy to: Republic Services, Inc. 18500 North Allied Way Phoenix, AZ 85054 Attn: General Counsel If to CWM: Coast Waste Management, Inc. 5960 El Camino Real Carlsbad, CA 92108-0947 Attn: District Manager With a copy to: Waste Management - Westem Group 7025 N. Scottsdale Road Suite 200 Scottsdale, AZ 85253 Attention: Group Legal Counsel 10.8 Goveming Law. This Agreement shall be govemed by and constmed in accordance with the laws of the State of Califomia. 10.9 Insurance. (a) Both parties agree to fumish to the other, upon execution, certificates attesting to the existence of the following insurance and to maintain the following insurance during the term of this Agreement: Coverages Limits of Liability Workmen's Compensation Statutory Employer's Liability $1,000,000 Each Occurrence General Liability, Including $5,000,000 Combined Single Limit, Bodily Injury, Property Damage Each Occurrence And Contractual Liability Automobile Liability, Including $5,000,000 Combined Single Limit, Bodily Injury and Property Damage Each Occurrence (b) Each such certificate shall contain a statement of the insurer's obligation to notify the party to whom the certificate is addressed at least thirty (30) days prior to cancellation of any policy covered thereunder. The policy shall also contain a waiver of subrogation. 13 II IN WITNESS WHEREOF, tiie parties have executed fliis Agreement as of tiie day and year first above written. ALLIED: Allied Waste Industri^Inc. Its Vice President PALOMAR: Palomar Transfer Statior es T. Ambroso Its Vice President CWM: Coast Waste Management, Inc. 17I33IM rOOC 14 EXHIBIT A TRANSFER STATION MASTER LEASE [See attached] PALOMAJl TRANSFER STATIOH ZiSA5B AGR£0(ENT MCCLELLAN-PALOMAR AZKPORT CARLSBAD, CALIPORKIX EXHIBIT C LESSORS T8E CODMTT OF SAK DIBOO LESSEE t PALOMAR TRANSFER STATIOV, XNC. PARCELS: APH#. 97-0085-XI A///e J COUNTY CONTRACT NO. ^/^^ ^ J LA3.7W7I.V5 ^0 INDEX ARTICLE 1 - SUMMARY OF BASIC LEASE • PROVISIONS . i 1.1 Lessor * 1.2 Lessee ! J" 1.3 Premises and Property ....!.!!.'!,*''"* 2 1.4 The County's and Lessee's Lease Administrators' * ' 2 1.5 Term ' * * 1.6 Effective Date [ ' 5 1.7 Intentionally Omitted ? 1.8 Rent 2 1.9 General Description of Lessee's Use of Premises ' 5 1.10 Definitions , i 1.11 Exhibits To Lease t 1.12 Construction of Lease Provisions 3 ARTICLE 2 - LEASE OP PREMISES 4 2.1 Description . . • ? 2.2 Mineral Rights ....!!!!!.*.'' 4 2.3 Reservations to the County/Easement Reservations* ' 4 2.4 Lease Subordinate to Conditioxis and Restrictions Iii5>osed by Public Agencies on Airport Operations . 4 ARTICLE 3 - TERM OF LEASE AND FIRST RIOKS. TO .ACQUIRE THB^. PREMISES 5 3.1 Term; Definitions 5 3.2 Surrender of the Premises; Quitclaim of Lessee^sW Interest Upon Termination g 3.3 Early Termination by the County ' ' c 3.4 First Right to Acquire the Premises [ [ g ARTICLE 4 - RENT - 4.1 Prepaid Rent 7 4.2 Base Rent for Option Periods 7 4.3 Payments of Monthly Base Rent 7 4.4 Rent Adjustment at Commencement of Each Option Period 7 4.5 cost of Living Adjustment ("COLA") to the Base* Rent Payable Monthly During Option Periods . , a 4.6 Consiimer Price Index . * * 9 ARTICLE 5 - CONDITIONS PRECEDENT TO EFFECTIVENESS OF LEASE 5.1 Conditions Precedent to Effectiveness of Lease . , 9 ARTICLE 6 • POSSESSION AND USE 10 6.1 Permitted Uses .....!.*' 10 6.2 Duties and Prohibited Conduct , . . !nn 6.3 Conqpliance with Laws n 6.4 Substance Abuse 12 6.5 Control of Premises \2.2 U5-7W7I.VJ ARTICLE 7 - UTILITIES 12 ARTICLE 8 - MECHANICS' LIENS 13 8.1 Mechanics' Liens 13 8.2 Contest of Lien 13 8.3 Right to Cure 13 8.4 Notice of Lien 13 8.5 Notice of Nonresponsibility 13 ARTICLE 9 . - SECURITY 14 ARTICLE 10 - IMPROVEMENTS; PERSONAL PROPERTY; FIXTURES; MINOR ALTERATIONS 14 10.1 improvements 14 10.2 Construction Reguirements « 14 10.3 The County's Costs; Indemnity 15 10.4 Personal Property 15 10.5 Fixtures 15 10.6 Signs and Lighting . ig 10.7 Minor Alterations 16 ARTICLE 11 - TAXES, ASSESSMENTS AND FEES 16 11.1 Responsibility for Payment of Taxes and Assessments ..... 16 11.2 Definition of "Taxes" 16 11.3 Creation of Possessory Interest 17 ARTICLE 12 - REPAIRS; MAINTENANCE 17 12.1 Acceptance of Premises 17 12.2 Lessee's Repair and Maintenance Obligations . . . . 17 12.3 Lessee's Failure to Maintain 18 12.4 Right to Enter 18 12.5 County Not Obligated to Repair or Maintain; Lessee's Waiver of Califomia Civil Code Section 1942 18 ARTICLE 13 - INDEMNITY AND INSURANCE 19 13.1 Indemnity 19 13.2 Insurance 19 13.3 indemnity 19 ARTICLE 14 - CONTAMINANTS 20 14.1 Environmental Laws - Definition 20 14.2 Contaminants, Leachate and Landfill Gas - Definitions 20 14.3 Lessee's Representations and Warranties 20 14.4 Indemnifications Regarding Contaminants, Leachate and Landfill Gas 22 14.5 Remedies Cumulative; Survival 22 14.6 Inspection 22 ARTICLE IS - ASSIGNMENT, SUBLEASING AND ENCUMBRANCING .... 22 ii ARTICLE 16 DEFAULTS BY LESSEE; THE COUNTY'S REMEDIES .... 28 16.1 Events of Default 28 16.2 Notices [ 29 16.3 The County's Rights and Remedies 29 16.4 The County's Damages 30 16.5 Fixtures and Personal Property .* 31 16.6 The County's Security Interest 32 16.7 Lessee's Waiver . 32 16.8 Interest ! 32 ARTICLE 17 - DEFAULTS BY THE COUNTY; REMEDIES 32 ARTICLE 18 - ABANDONMENT 3.3 M' ARTICLE 19 - BANKRUPTCY : . , 33 19.1 Right of Termination ti- 33 19.2 Request for Information , '. ^ 34 ARTICLE 20 - DAMAGE OR DESTRUCTION 34 ARTICLE 21 - EMINENT DOMAIN 35 ARTICLE 22 - SALE OR MORTGAGE BY THE COUNTY 36 22.1 Sale or Mortgage 36 ARTICLE 23 - SUBORDINATION; ATTORNMlMr: 36 23.1 Subordination 36 23.2 Attornment 36 ARTICLE 24 - COUNTY'S RIGHT OF ACCESS 36 24.1 Access 36 24.2 Lessee Waivers Regarding County Access 37 ARTICLE 25 - QUIET ENJOYMENT 37 ARTICLE 26 - HOLDING OVER 37 ARTICLE 27 - NOTICES 38 27.1 Notices 39 27.2 Default Notices 38 ARTICLE 28 - NONDISCRIMINATION 38 ARTICLE 29 - AFFIRMATIVE ACTION PROGRAM 38 ARTICLE 30 - WAIVER OF RELOCATION ASSISTANCE BENEFITS .... 39 30.1 Relocation Assistance Benefits 39 30.2 Lessee's Waiver and Release of Relocation Benefits 39 ARTICLE 31 - RECORDS, ACCOUNTS AND AUDITS 40 iAi-msTi\.yn iii auitm ARTICLE 32 - GENERAL PROVISIONS 40 32.1 Authority 40 32.2 Brokers 40 32.3 Captions 40 32.4 The County Approval 40 32.5 Cumulative'Remedies 41 32.6 Entire Agreement 41 32.7 Estoppel Certificate 41 32.8 Exhibits 41 32.9 Force Majeure 41 32.10 Goveming Law 42 32.11 Interpretation 42 32.12 Joint and Several Liab.ility i* • • 32.13 Lessee's Lease Administration , . . 42 32.14 Liquidated Damages 42 32.15 Modification i. . .. 42 32.16 Partial Invalidity . .1 . '.| 42 32.17 Payments 43 32.18 Successors & Assigns 43 32.19 Time of Essence '. . 43 32.20 Waiver 43 EXHIBIT A: DESCRIPTION AND PLAT OF THE PREMISES EXHIBIT B: FAA REQUIREMENTS EXHIBIT C: MCCLELLAN-PALOMAR AIRPORT INDUSTRIAL AREAS DEVELOPMENT STANDARDS EXHIBIT D: MCCLELLAN-PALOMAR AIRPORT INDUSTRIAL AND AVIATION AREAS PERFORMANCE STANDARDS EXHIBIT E: INSURANCE REQUIREMENTS A: Liability Insurance A(l) : Coiqprehensive General Liability Insurance A(2}: Comnercial General Liability Insurance A(3): Required Liability Policy Coverage A(4) : Additional Insured Endorsement A(5) : Primary Insurance Endorsement A<6): Form of Liability Insurance Policies B: All Risk Fire Insurance B(l): Deductible B(2): Rental Income Insurance B(3): Loss Payee B(4}: Proceeds of Insurance C: Comprehensive Automobile/Aircraft /Watercraft Liability Insurance D: Statutory Workers' Compensation and Enqployer's Liability Insurance E: General Provisions E(l): Certificates of Insurance E(2): Claims Made Coverage l>J.7Vni.V2 iv E(3}: Failure to Obtain or Maintain Insurance; the County's Remedies E(4); No Limitations of Obligations B(S): Notice of Cancellation or Change of Coverage B(6): Qualifying Insurers E(7): Review of Coverage BCe): Self*Insurance £(9): Sublessee's Insurance E(IO): Waiver of Subrogation EXHIBIT F: THE COUNTY OF SAN DIEGO REQUIRED SUBLEASE PROVISIONS PALOMAR TRANSFER STATION LEASE AGRISEKENT THIS PALOMAR TRANSFER STATION LEASE AGREEMENT ("Lease") is made and entered ^ into. 9^j9tCtiv as of October 31, 199T; *y and between the Of- SAN DZEQO,' a political gn^H4 «jjMrjrfh'* State of California (the "County"), and the FAiXN^-TipHraT STATiOIIV" IMCaS^a Califomia corporation ("Lessee"). IN CONSIDERATION OF TBS RENTS AND COVENANTS set forth in this Lease, the County hereby leases to Lessee, and Lessee hereby leases from the County, the Premises described in Article 1 (SUMMARY OF BASIC LEASE PROVISIONS) below, upon the following terms and conditions: ARTICLE 1 ' SUMMARY OF BASIC LEASE PROVISIONS 1.1 lififiJUC: THE COUNTY OF SAN DIEGO, a political' subdivision of the State of Califomia Address for notice: Director Department of General Services Building 2 5555 Overland Avenue San Diego, Califomia 92123 with a copy to: Assistant Deputy Director - Aviation 1960 Joe Crosson Drive El Cajon, Califomia 92020 1.2 Xtfifljlfili: Palomar Transfer Station, Inc, Address for notice: 8364 Clairmont Mesa Boulevard San Diego. Califomia 92111 Attention: Mr. Jim Ambroso with a copy to: Allied Waste Industries, Inc. 15880 N. Greenway-Hayden Loop Suite 100 Scottsdale, Arizona 85260 Attention: Jo Lynn White, Esq 1-3 Premises and Prepnyty The Premises means that approximately 10.697 acres described on Exhibit A (DESCRIPTION AND PLAT OF PREMISES) attached hereto and by this reference incorporated in this Lease. The term "Property", as used herein, includes the Premises, all buildings and in^rovements to the Premises, the parking lots and any parking structures appurtenant to the buildings, and such other facilities, structures and iirprovements located thereon. 1.4 The County's and Lessee^s Lease Kdminimtr^i^c^^^. This Lease shall be administered on behalf of the County by the Director, Department of General Semrices, The County of San Diego, or by such person's duly-authorized designee referred to collectively in this Lease as "The County's Lease ' Administrator"), and on behalf of Lessee by Mr. Jim Ambroso, or by such other per$on as may be designated in writing by tiessee referred to in this Lease as "Lessee's Lease Administrator"). , iwai. - The term of this Lease shall be .^Mj^nnMLi i yeazflBlthie •Initial Term"), commencing on the Effective Date and ending on the twenty-fifth (2Sth) year anniversary of the ' Effective Date, as the same may be extended pursuant to Section 3.1, "Teza; Definitions". 1.6 EfftCtiYt P»tt: See Section 3.1, "Tezai Definitions". 1.7 iBtcntiweXlY Offittid. 1.8 Reat: The dnffiBBI^^ Three Million Eighty^Six Thousand Dollari^^K|^j9l&P0C^ (the "Prepaid Rent"), which amount will be prepaid Hy Lessee to the« County at Closing (as defined in the Purchase Agreement (as defined below)), pursuant to the terms thereof. If Lessee elects to extend the term pursuant to Section 3.1« "Terni Definitions", the Base Rent for each month during the applicable Option Period (as defined below) shall be determined pursuant to Section 4.4, "Rent Adjustment at Commencement of Each Option Period" and Section 4.5, "Cost of Living Adjustments ("COLA") t^o the Base Monthly Rent During Option Periods" shall be payable on the first calendar day of each month. 1.9 General Description of Laaace'a Use of Prmm±»m^. Lessee shall use the Premises solely for the uses specified in this Lease, generallv described as the office operatioxis of a ' solid :wa[iti^jgSi33|g^^ a recyclinafacilityr'anira fai^lFitiei^'f'^'^lpSaWiS^^ trash. ' " 1.10 Definitions! As used in this Lease, the following terms shall have the meanings attached to them in this Section unless otherwise apparent from their context: LA3.7»S77l.Va 2 ot/WTt a. "Airport* means McClellan-Palomar Airport, Carlsbad, Califomia. b. "Assistant Deputy Director - Aviation" means the Assistant Deputy Director - Aviation, of the Department of Public Works, the County of San Diego, or upon written notice to Lessee, such other person as shall be designated from time-to- time by the Board. c. "Board" means the Board of Supervisors of the County of San Diego. d. "FAA" means the Federal Aviation Administraytion. e. "Standards" means the McClellan-Palomar Airport Industrial Areas Development Standards and (the'. McClellan-Palomar Airport Industrial and Aviation Areas Performance Standards attached as Exhibit C and Exhibit-D hereto. f. "ALP" means the FAA-approved Airport Layout plan for McClellan-Palomar Airport. 1.11 ||!«hibits To Lease; The following drawings and special provisions are attached hereto as exhibits and made a part of this Lease: p^HjBTT A - Description and Plat of the Premises. EXFTB^T B - FAA Requirements. f:;XT^TBiT _C - McClellan-Palomar Airport Industrial Areas Development Standards. BYHTBTT n - McClellan-Palomar Airport Industrial and Aviation Areas Performance Standards. l?XH;rBiT E • Insurance Requirements. jB|y^jpiT P - The County of San Diego Required Sublease Provisions 1.12 c^'^atruetion ef Lease Provlsiong; The foregoing provisions of this Article summarize for convenience only certain kev terms of the Lease delineated more fully in the Articles and Sections referenced in this Article. In the event of a conflict between the provisions of this Article and the balance of the Lease, the latter shall control. LA3,WT7I.V1 ^ ARTICLE 2 LEASE OF PREMISES 2.1 Ptgffiriptioa. Subject to Article 5 (CONDITIONS PRECEDENT TO EFFECTIVENESS OF LEASE), the County hereby leases to Lessee and Lessee hereby leases from the County, for the rent and upon the covenants and conditions set forth in this Lease, the Premises described in Section 1.3, "Premises and Property" above, 2.2 MAPffTtt Riqbtg. Notwithstanding any provision of this Lease to the contrary, the County hereby expressly reserves all rights, title and interest in.and to any and all gas, oil, mineral and water deposits located upon or beneath the surface of the Premises. The County shall have the right to enter the Premises at any time during the Term for the purpose of ooeratina or maintaining such drilling or other installations as may be necessary or desirable for the development of any such qas oil mineral or water deposits. 3 # » 2.3 Restrvations to the Coimt^Y/?* Lessee accepts the Premises subject to any and all existing easements and encumbrances. The County reserves the right to establish, to grant or to use easements or rights-of-way over under, along and across the Premises for access, underground sewers, utilities, thoroughfares or such other facilities as it deems necessary for public health, convenience and welfare, whether or not such facilities directly or indirectly benefit the Premises, and to enter the Premises for any such purpose; provided, however, any such grant of rights by the County shall require that the Premises be restored to their preexisting condition; and, prgvjdftdi further, however, that such grant does not materially interfere with Lessee's continued operation of the Premises. 2.4 t^yse gy^rdinate to Conditions and aafitrict:^5>^g Imposed by gwlic AgeacAes on Airport operations- This Lease shall be subordinate and subject to the terms, conditions, restrictions and other provisions of any existing or future permit, lease and agreement between the County and any federal, state or local agency goveming the County's control, operation or maintenance of the Airport, or affecting the expenditure of federal funds for the Airport. Lessee shall be bound by all such terms and conditions, and shall, whenever the County may so demand, execute, ac)cnowledge or consent to any instrument evidencing such terms, conditions, restrictions or provisions. Without limiting the generality of the foregoing, this Lease and Lessee's occupancy of the Premises are expressly made subordinate and subject to the terms, conditions, restrictions and other provisions of those requirements of the Federal Aviation Administration specifically set forth in Exhibit a and Lessee shall be bound by all such requirements. LA3-7«»5T7I.Va 4 ARTICLE 3 TEK^ OF LEASE AND FIRST RIGHT TO ACQUIRE THE PREMISES 3.1 Tera? PeXiaitioag. a. Subject to Article 5 (CONDITIONS PRECEDENT TO EFFECTIVENESS OF LEASE), this Lease shall be effective as of the "Effective Date" as defined below and the term ("Teza") of this Lease shall commence on the "Effective Date" and shall continue thereafter for the period specified in Article 1 (SUMMARY OF BASIC LEASE PROVISIONS), unless sooner terminated as provided in this Lease. As used in this Lease, the "EffeetlTe I>ete" means thirty (30) business days (or upon such'e¥fi^F dier <rmay be mutually agreed upon) following the date on which the latejr ot the fbllowing occur^^'tcoll^ctively, thvl^CarXsbi^ Conditioas*^!':;. (tTrthe expiration or eariief'^ tezMnaiElcm of that certaia Indu8tri>l Lease Agreement (Airports) dated as of October 21, 1997, by and 'feetween the County and the; Cit^ 6f Ciurlsbadi. a^ (2) the surrender and vacatid;^, of the iPremises by"the City df Carlsbad lihd'Cbilit' Wiisee Ma^^ Inc/ within fifteen (15) business days following the Effective Date, the County and Lessee shall confirm the actual date of the Effective Date in writing. Except as otherwise specifically stated in this Lease or in any subsequent amendments hereof, the terms and conditions of this Lease shall remain in effect following any extension, renewal or holdover of the original Tem. b. have fourteen Subject to the terms of this Section, (14) successive options (each, an *Opti extend*thr'T€£«"by ifive (5) yiaft'per Op^ (each, an "Option Period") ; provided. hfiHfiEfiXi that in no event shall the Term exceed ninety-five (95) years in the aggregate. An Option shall be exercisable by Lessee only if Lessee (i) ^^M^WrUiiP'daWr'oni^ which Lessee exercises the Option and as of the cooinencement date of the Option Period related t<^_sMCh Option, jdMWie<WiJ!1ilff.'g>g^*^ materiagypiiyliagce^^^ Agrienm^and Lesisee agrees that, if Lessee has failed to make any payment required under this Lease, after any applicable notice and cure period provided in this Lease, it shall not be in "material compliance"); (ii) Jlim^ied? thvr^remisev^pri^^ solid^Aft^;i^&rjU|iil^lQ^ and (iii) is, as of'tne date on which"^ Lessee exercises an Option and as of the commencement date of the Option Period related to such i Option. C^MMQ^^ th«^-PreMses'-'prim^liy-'ae^^ \ tfansfei^sc^^mP In order to exercise an Option, Lessee must notify the County of its irrevocable election to exercise the Option no more^than on* yea^ and n<6 less thalS^ elk (S)-likm^ before the expiration of, with respect to the first Option, the Initial Term or, with respect to all other Options, the then applicable Option Period. Upon the proper and timely exercise of an Option by Lessee in accordance with this Section, the Term shall be extended for the applicable Option Period and the terms LA»-t«S77I.VS Qtnvn 30 and provisions of this Lease shall remain in full force and effect during such Option Period. 3.2 Surrender cf the Pr#miggg» Ouitelaim of Leeaee's Intereet TTpon Teminetioii. a. Lessee shall surrender possession of the Premises to the County upon expiration of the Term or earlier termination of this Lease. Upon termination of this Lease for any reason,. including but not limited to termination because of default by Lessee, Lessee shall execute, aclcnowledge and deliver to the County, within thirty (30) days following receipt of written demand therefor, a good and sufficient deed whereby Lessee quitclaims all right, title and interest in the Premises to the County. Should Lessee fail or refuse to deliver such quiddaim deed to the County, the County may prepare and record a hot ice reciting the failure of Lessee to do so, and such notice shall be conclusive evidence of the termination of this Lease and of all right of Lessee or those claiming under Lessee to the Premises. b. Should the manner or method enqployed by the County to re-enter or take possession of the-Premises following the termination of this Lease give Lessee a cause of action for' damages or in forcible entry and detainer, the total amount of damages to which Lessee shall be entitled in any such action shall be One Dollar ($1.00). This provision may be filed in any action brought by Lessee against the County, and when so filed shall constitute a stipulation by Lessee fixing the total damages to which Lessee is entitled in such an action. have 3.3 it.la,gQPneetIon with thxm LeaSe? tf nothigyc^tayned-herein shall limit the County/i^'|^9lftiO«i^eiMii^ . 3.4 rirst Right to ^ggvire the Frewigti. subject and siobordinate to the first right of refusal granted to the City of Carlsbad, its successors and assigns, pursuant to the Palomar Transfer Station Settlement Agreement (as defined in the Purchase Agreement), if, during the term of this Lease, the County proposes to sell the Premises, or any portion thereof, and provided Lessee is not in default under the terms of this Ijease at the time such proposal to sell is made by County and Lessee is not in default at any time during the following negotiation period. ^!^gBMf?Wbi^|^«?flive Lessee first right ("First Right") to negotfal!i^^P^^%!QQBC^ or that portion of the Premisee^'Countyiifoposes to sell. In no event shall the First Right survive the expiration or earlier termination of this Lease. a. Lessee must exercise its First Right within thirty (30) days after Lessee has received written notice frc»n County of County's intent to sell the Premises. U3-7<577|.V1 oi/iim b. If the County receives written notice from Lessee within thirty (30) days after Lessee has received written notice from County of County's intent to sell. County and Lessee shall enter negotiations for sale of the Premises, or that portion of the Premises County intends to sell. c. If the County and Lessee do not successfully negotiate an agreement on the sale of the Premises to Lessee within forty-five (45) days following the County's receipt from Lessee of Lessee's exercise of its First Right, Lessee's First Right shall terminate and the County may take any action it .deems necessary in the sale of the Prendses. During said period of negotiations, Lessee and Co\inty shall negotiate in good faith. d. The negotiation of a sale of the Premises fcrom the County to Lessee is subject to approval by the Federal Aviation Administration and without such approval, the terms of this ', Section 3.4 (FIRST RI6ET TO ACQUIRE TBB PREMISES) are null anid void. ARTICLE 4 RENT 4.1 Prepaid Rent. The total prepaid Base Rent for the J-IL WI'II Initial Term is the Prepaid Rent, which amount will be prepaid by xO"'*'* Lessee to the Coxmty at Closing (as defined in the Purchase Agrieement (as defined below)), pursuant to the te 4.2 pase Rent fey Option Periods, extend the term of this Lease pursuant Definitions", during the applicable Option Pe£l»r*t^Bee shalJs^' pay to the County each month in advance, wxtfiout setoff, deduction, prior notice or demand, the Base Rent, vrhich monthly payment must be made on or before the first calendar day of each calendar month during the applicable Option Period. J|ri^|Miie ^ Rent for each Opticm Period' shall bcT determined pursuasr^nr Section 4rfr"^%nt Adju8tog|t at ^ Period "--''iiitf'WSireifjl^ te the Base Monthly'R:eiit'boring Optictt^ 4.3 Payments of Monthly Base Rent. The Base Rent payable monthly during any Option Period shall be made payable to the County of San Diego and shall be considered paid when delivered to Controller Branch Office - Cashier, 5201 Ruffin Road, Suite H (MS 0654}, San Diego, Califomia 92123. The County may, at any time, by written notice to Lessee, designate a different address to which Lessee shall deliver the rent payments. 4.4 Rent Adjustment at Conmencement of Each Option Period. 4.4.1 Piret Option Period. Base Rent payable monthly for the first Option Period shall be adjusted to an amount equal to the fair market rent for the Premises, which "^c^— amount shall, stibject to the provisions of this Section 4.4.1, •First Option Period", be determined by an appraisal performed by a mutually acceptable appraiser pursuant to mutually acceptable instmctions. Such appraisal shall be performed no later than six (6) months prior to the expiration of the then-current Option Period. If the parties are not able to agree on the designation of the appraiser, the instructions to the appraiser or on the appraiser's conclusions, the matter shall be submitted to binding arbitration pursuant to the provisions bf the Califomia Code of Civil Procedure, or such successor codes or statutes. Notwithstanding the foregoing provisions of this Section 4.4.1, "First Option Period", in no event shall the Base Rent payable monthly for the first Option Period be less than an amount determined by using the formula described in Section A,S, "Cost of Living Adjustments ("COLA") to the Base Rent During Option Periods", where (i) "A" equals $23,000; (ii) "B" equals the monthly Consumer Price tndex, as hereinafter defined, fbr the month of March immediately preceding the commencement of .the first Option Period; and (iii) *C" equals the monthly Consumer Price Index, as hereinafter defined, for the month of March immediately preceding the commencement of the Initial Term. 4.4,2 Other Qptioa Ptriode. Except for the first (Dption Period, which shall be govemed by Section 4.4.1, "First Option Period", at the commencement of each Option Period, the Base Rent shall be adjusted to an amount equal to the fair market rent for the Premises; provided, t^pwever. that in no event shall the Base Rent for any Option Period be less than three percent . (3%) greater or more than seven percent (7%) percent greater than^ the Base Rent for the month immediately preceding the commencement of such Option Period (excluding any offset, free rent or credit rights of Lessee). Sxibject to the preceding sentence, fair market rent shall be determined by an appraisal performed by a mutually acceptable appraiser pursuant to mutually acceptable instructions. Such appraisal shall be performed no later than six (6) months prior to the expiration of the then- current option Period. If the parties are not able to agree on the designation of the appraiser, the instructions to the appraiser or on the appraiser's conclusions, the matter shall be submitted to binding arbitration pursuant to the provisions of the Califomia Code of Civil Procedure, or such successor codes or statutes. 4.5 coat of Living Adiuatment («COLA"> to the Beee Rent Payable Monthly Purina Potion Periods. The Base Rent payable monthly during each Option Period shall be adjusted as of the first (1st) anniversary of the commencement of each Option Period, and thereafter every year on such date for the remainder of the applicable Option Period (each such one-year period is referred to herein as a "COLA Period"), to reflect any increase in purchasing power by use of the following formula: R - A{B/C) uo-7«j77i.v3 8 ovtvn xn«re1nt ..^t^, CJI-!!''"!!^* monthly rent for the COLA Period being cAiculatedi Bxastidefli b&i£ji^< in •vent shall the aMW-tBiy rent for ttny one-year COLA Pmtxc^hm l^mm than thrte percent I3%f r«nt for tht previous one-year CDLA Period J ••A" equals the sass Rent aa of the cowmencement ef ths then-currtnt opclon verXod: ^ "J" «he tncmthly CoBauner P«lee laeex, «• herein«£i:«r defined, for the ff.onth ef NSTeb iantdlately preceding the ^ conmencement of the cotA Period for which the rent la being adjuitedt afvjl ' I • "C" equals the monthly Consumer Price index, as here Inefr.cir defined, sor the month sr iurcb iimdiately preceding the commencement of the Chen-current Option Period. 4*4 ConaiMfter Sriaa ^^j^- The conoumer price Index which ehali be used as the emiree for the Consumer Price Index numbers shall be that published by the unitee ataeco Department of Leber, entitled Usited Spates Separr.meat: of Labor, Bureau Of LabOt etatlftiei, eoaeam*r Price index tor the Loe angele«*AAahelm-- Rivereide Area (X9t3-I4 - loo). If such index le net publiehed for the LOS JUigelea-An«h«im-llivec*ide Area, thea another cotnparable index or source ot tueh Infenoation generally recognised as euthoritative ehell be eubati^uceo by agreement oC the partiei, tt the partite ahculd not agree, suen source of information ehall be determined by arbitration pursuant to the provisions of the California Cod*) oS Civil Procedure* AMTICLI. 1 coNuxTzoiia yucspKMT TO syrBGYXvaiBst OF LSASB 5.1 CnnAitieiiiM »nfi^fltB^ |f fBflfclYf"^"* Ml^Bt- The esroetlveness of this Lease and the octusyenee of the tefeetive Date is expreselv conditioned upon the eatisfaction of the following conditiens< a. Beeh OC the Cerisbad Lease Conditions shall hava occurred; b. The County shall have determlBed, in its sole ami AheoXuea diecretlon, that tbe Framiaae ere not ni^e«a««ry or deeirable for the sptrstioa of, or uses related to, the MeClellan-Palomar Airport (including, without limicacion. the :Sov«lopin«nt of induetra.«l. buaineea ot coovMerelal facilities thereon^ > which detevminatica ehall be made, by ths County en or before thirty buiiness (301 days tolXowiag tme oeourrenee of each of Che CacSabad Lease Conditicns; aUBCideii. Kpwevr> that in no Raeaivid Aor-ll-00 02:01M Fro«.760BBU7B9 To-PIUSBURY $0 ?tf QZ .^PR-ae-ee ea.ea PM HCRRP 7*ee*i^T*e p... •vent shall the County be entitled te Xaaee the Promisee to another entity tor uee aa a transfer atatieaf and c. AS of Che date on wnich the }ast of the Carlsbad lease Conditione occurs. Leaaee shall be in material compliance with the teme and prcvieioni ot tne Purchase Agreement -as dellned below) and the document a executed in connection cherawitK. I .a Failura. of a^onditiae. U one or more of the conditions precedent set forth ta saatioa "Condltioaa vreeedent to tfCectiveness ef tease" are not satisfied er'waived by the County lo writing, ti) this Mease shall be of no force and tff^enki (ii) neither the county nor Lessee shall be bound hereby; (ill) Lessee shall have no right or interest in and to rhb rramiaes, including, without: limitation, the uee or occupancy thereof; and (iv) the county shall be free to take any action wish respeoe ro th« Prenises it deems neoaeeary or deal tablet pri->vided. najcmr chat in Lessee shall be entitled to a refund of the prepaid rent es debannined pursuant te the Purenaee AgreenMMit. aSTZCOJE fl POSIBSSZQtf MD Oil s.i a^^ti^^^M ffm^f Lefsee shall use-^ the Premises eolely tor the usee permitted SAd-^eacribedf^i-tt'-MeMbM JCT^CM^^ PALOKJka aiasOAT l«DDftTlXAft«'A]lBAl pfVBLOfmrraiTniaABBeiibattached nereto and tor the purposes apecified in Seeeiom 1,1S« •eeaereX Oeseriptiea of Lessee's Vse of the frsaases". Wo oae other than Lessee, its agents and employees, or any subleseee ef Lessee approved by the County as provided in Article IS (ASf aosbSASSlie AMP SsteoicsuJicxvO) is psnnittea te use the Premises for Che purposes described hereini and Leasee shall be tuliy respenslblQ for cne aecivitiee of its agenda, esqileyees and subleeseei, if any, on the Premises. Leeeee aeknowiadgea that the county reserves the right te permit others at the Airport to . provide one cr more of the services to be provided by Leeaee on the Premiees. C.2 hyfeiee yy»ti<i>4»a<i raaSYiete. whors Lessee ie r«asonably in doubt as to the propriety oC any partieular use, Leeeee may request the written determination Gf ths County's Lease AdmlAistratar that such use is or is not permitted, and Lessee will not be in breaeh or default under this Ltase if Lessee aniaes by such determination. )re twit he tending the foregoing, however. Lesflse •hall not use nor pemic the use ot Che Premises in any nanner chat will tend to create waaae or a nuisance, Lessse shall'net use, or permit any person or persona CO use, the Premises for the sale or display of any goede or services which, in the eole discretion of the county, are ineonjiscant with the permitted uses of the Premises pursuant CO this Lease, Lessoo shall Vcesp the Premises, and every part » l)Mi)y«d Av-21-00 OKOlpa Pr0.-7688814713 To-PILL$BUHY $D PM. OS thereof, in a good, safe and sanitary condition, free from any objectionable noises or odors, except a.^ may be typically present for the permitted uses specified above. Lessee shall deposit all trash and rubbish of Lessee only within receptacles provided by Lessee and located in the areas designated by the County. Lessee shall not allow or permit installation of any billboards or advertising signs, or aerials or antennas, upon the Premises without first obtaining, in each instance, the written consent of the County, which consent the County may give or withhold in the County's sole discretion. Any such signs or antenna installed without such written consent shall be subject to removal without notice at any time, at Lessee's expense. Nothing in this Section shall be deemed to preclude Lessee from erecting and maintaining safety, waming or directional signs, of ireasonable dimensions, which are not used for advertisement of goods or services; provided, however, all such signs must conform to applicable statutes and ordinances. : . 6.3 Cgroliapgf >f4th X^ifg* a. Lessee, at Lessee's sole expense, shall procure, maintain and hold available for the County's inspection any governmental license or permit required for the proper and lawful conduct of Lessee's business. Lessee shall not use the Premises for any use or purpose in violation of the laws of the United States of America, or the laws, ordinances, regulations and requirements of the State of Califomia, the Co\mty of San Diego or the city where the Premises are situated, or of other lawful authorities. Lessee shall, at Lessee's expense, comply pronptly with all applicable statutes, laws, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the Term, regulating the use by Lessee of the Premises. The final judgment of any court of coR^etent jurisdiction, or the admission of Lessee or any sublessee or permittee in any action or proceeding against them or any of them, whether or not the County is a party to such action or proceeding, that Lessee, or any such sublessee or permittee, has violated any such ordinance, law, statute, regulation, covenant, restriction or requirement pertaining to the use of the Premises, shall be conclusive as to that fact as between the County and Lessee. b. Notwithstanding any other provision of this Lease to the contrary. Lessee shall be responsible for payment of all costs of complying with the requirements of the Americans with Disabilities Act of 1990 ("ADA") (42 USCS SS 12101-12213), Title 24 of the Califomia Code of Regulations ("Title 24") and Califomia Civil Code S 54.1 as they may apply to the Premises. Lessee's obligations under this Section shall include, without limitation, all costs of bringing the Premises into con^jliance, and thereafter maintaining such compliance, with the requirements of Title III of the ADA ("Title III") (42 USCS S§ 12181 - 12189) applicable during the Term to public accommodations and 11 (s/iim I commercial facilities, irrespective of whether or not the particular requirements of such conqpliance (i) are specifically required by Lessee's intended use of the Premises, or (ii) may also be required of the County under Title II of the ADA ("Title II") (42 users SS 12131 . 12165). c. Lessee shall, with regard to the Property, assume all obligations placed on the County pursuant to any existing or future industrial stormwater permit or existing or future construction permit including, but not limited to, preparation of any required Notices of Intent or Stormwater Pollution Prevention Plans for so long as this Lease is in effect. 6.4 sabstance Abuse- Lessee and its employees and agents shall not use or knowingly allow the use of the Premises, for the purpose Of unlawfully driving a motor vehicle or aircraft under the influence of an alcoholic beverage or any drug, or lot the purpose of unlawfully selling, serving, using, storing, transporting, keeping, manufacturing or giving away alcoholic beverages or any. "controlled substance," precursor or analog specified in Division 10 of the Califomia Health and Safety Code, and violation of this prohibition shall be grounds for immediate termination of this Lease. 6-5 Control of Preniaef. Failure of Lessee to exercise control of the use of Premises to conform to the provisions of this Article shall constitute a material breach of the»Leaee ^and such shall be grounds for termination. ARTICLE 7 UTILITIES for its use and occupancy of the Premiees during^ the Term, including but not limlted'tp gas, \*ater, electricity, trash, sewer/septic tank charges and telephone; the County shall have no responsibility to either provide or pay for such services. The County will not be liable for any reason for any loss or damage resulting from an interruption of any of these services. The County shall have the right, at no charge from Lessee, to connect to any water, sewer, electrical, gas and conmuni cat ions lines as are now or may hereafter be installed on the Premises, and shall have all necessary rights of access to construct and service such connections; provided* however: Lessee shall have no obligation to pay any additional service fees or charges assessed by any governmental agency, or public or private utility conqpany, for the County's use of such connections; and, providedr further, however, that such connection does not materially interfere with Lessee's continued operation of the Premises. ARTICLE 8 KECEAKICS' LIENS 8.1 Mechaniea* Liens. Lessee shall pay, or cause to be paid, all costs for work done by it, or caused to be done by it, on the Premises, and' for all materials furnished for or in connection with any such work. If any lien is filed against the Premises, Lessee shall cause the lien to be discharged of record within ten (10) days after it is filed. Lessee shall indemnify, defend and hold the Co\mty harmless from any and all liability, loss, damage, costs, attomeys' fees and all other expenses .on account of claims of lien of laborers or materialmen or others for work performed or materials or supplies fumished for Lessee or persons claiming under Lessee. I 8.2 Contest of Lien. If Lessee shall desire to contest any lien filed against the Premises, it shall fumish the County, within the ten-day period following filing of the lien, sdcufJfty reasonably satisfactory to the County of at least one hundred fifty percent (150%) of the amount of the lien, plus estimated costs and interest, or a bond of a responsible corporate surety in such amount, conditioned on the discharge of the lien. If a final judgment establishing the validity or existence of a lien for any amount is entered. Lessee shall immediately pay and satisfy the same. 8.3 Rioht to Cure. If Lessee shall be in default in paying any charge for which a mechanics' lien claim and suit to foreclose the lien have been filed, and shall not have given the County security to protect the property and the County f rem liability for such claim of lien, the County may (but shall not be required to) pay said claim and any costs, and the amount so paid, together with reasonable attomeys' fees incurred in connection therewith, shall be immediately due and owing from Lessee to the County, and Lessee shall pay the same to the County with interest at the rate spedified in Section 16.8, "interest" from the date(s} of the County's payments. 8.4 Notice of Lien. Should any claim of lien be filed against the Premises or any action against the Premises or any action affecting the title to such property be coimnenced, the party receiving notice of such lien or action shall immediately give the other party written notice thereof. 8.5 yotiee of Wonreaponsibilitv. The County or its representatives shall have the right to go upon and inspect the Premises at all reasonable times and shall have the right to post and keep posted thereon notices of nonresponsibility or such other notices which the County may deem to lae proper for the protection of The County's interest in the Premises. Lessee shall, before the commencement of any work which might result in any such lien, give to the County written notice of its intention to do so in sufficient time to enable posting of such notices. uJ-TWTi.va 13 oi/iim ARTICLE 9 SECURITY Lessee shall be responsible for and shall provide for the security of the Premises, and the County shall have no responsibility therefor. Lessee shall construct and maintain fences, gates, walls and/or barriers on the Premises in a manner designed, in the County's judgement, to prevent unauthorized access to the Premises. All plans for such fences, gates, walla and/or barriers must be submitted to and approved by the County prior to construction. In the event the northerly boundary of the Premises is adjusted for the construction of the easterly prolongation of Faraday Road, Lessee shall move, at Lessee's sole expense, said security fencing, gates, walls and/or barriers within thirty (30) days following the completion of Farac^y Road along the northerly boundary of the Premises. ARTICLE 10 IMPROVEMENTS! PERSONAL PROPBRTTf FIXTURES I MINOR ALTERATIONS iO.l SMBXSSimSASJL* Lessee may, at Lessee's own expense, from time to time make such nonstructural (whether permanent or temporary) alterations, replacements, additions, changes, or inqprovements (collectively referred to in this Lease as "Improvements") to the Premises as Lessee may find necessary or convenient for its purposes; prpvidedf hflwjBXiM; the value of the . ^^-^^^^.^^ further provided that. ^. ^-jjeinaanent noa-etructural^ , no such iB^rovements may be. made irithout obtaining^ the prior wrlttt^y. approvalUgf the Coimtyf consent shall not be unreasonably withheld, in no event shall Lessee make or cause to be made any penetration into or through the roof or floor of 2uay stmcture on the Premises or make any other structural changes in or on the Premises without obtaining the prior written approval therefor of the County, which approval shall not be unreasonably withheld. Lessee shall at all times conduct its constmction operations so that such operations do not interfere with the normal operation and use of the Airport by the County, the public and other persons and organirations entitled to use of the same. 10.2 Construction Requirements. All liqprovements to be made to the Premises shall be made under the supervision of a con^etent architect or licensed stmctural engineer and made in conformity with any present or future ALP and Aviation Area Development Standards which are or may be adopted by the Board and the FAA, and with plans and specifications approved in writing by the County before commencement of any work. In connection therewith, Lessee shall provide a minimum of three (3) sets of working drawings or plans showing the planned In^rovements, for the County's approval, prior to coimnencing work. All work with respect to any Improvements must be done in uo-TWJi.va 14 a good and workmanlike manner, coimnenced within ninety (90) days following receipt of approval therefor from the County, and diligently prosecuted to couplet ion to the end that the Premises shall at all times be a con^lete unit except during the period of work. Upon con5)letion of such work. Lessee shall have recorded in the office of the San Diego the County Recorder a Notice of Completion, as required or permitted by law, and Lessee shall deliver to the County, within ten (10) days after completion of said work, a copy of the Notice of Occupancy and the building permit with respect thereto. Within sixty (60) days following conpletion of an In^rovement, Lessee shall provide the County with two (2) cooqplete. sets of "as-built" plans of such Inprovement. Vpaa the expiration or earlier termination of this Lease, such Inprovements shall not be removed by Lessee but shall become a part of the Premises. Any such Improvements shall be performed and done strictly in accordance with' the laws and ordinances relating thereto. 10.3 The Countv*a Coat^^ IvHtmritY Lessee shall reindburse the Coiinty for all actual and documented reasonable out-of-pocket costs and expenses (including, without limitation, any architect or engineer fees) incurred hy the County in approving or disapproving Lessee's plans for Inprovements. Lessee shall be liable for and shall indemnify and defend the County from any claim, demand, lien, loss, damage or esqsense, including reasonabls attomeys' fees and costs, arising from Lessee's constmction or installation of any Is^rovements permitted under this Article. 10.4 Personal Property. Subject to the provisions of the following Section 10.5, "Fixtures", all of Lessee's trade fixtures, fumiture, fumishings' signs and other personal property not permanently affixed to the Premises (collectively referred to as "Personal Property" in this Lease) shall remain the property of Lessee. Lessee shall, at its expense, imnediately repair any damage occasioned to the Premises by reason of the removal of any such Personal Property. 10.5 Fixtures. All In^rovements constmcted by Lessee, or existing on the Premises on the Effective Date, together with all other fixtures, excepting Lessee's trade fixtures, permanently attached to the Premises (collectively referred to in this Lease as "Fixtures") shall become the property of the County upon expiration or earlier termination of this Lease. Notwithstanding the foregoing, the County may require Lessee to remove any Fixtures at Lessee's own expense upon termination of this Lease. Any damage to the Premises occasioned thereby shall be repaired by Lessee in a good and worJcmanlike manner and the Premises shall be left in as good order amd condition as when Lessee took possession thereof, reasonable wear and tear and damage by the elements excepted. In the event Lessee does not remove any Fixtures following direction by the County, the County may remove, sell or destroy the same, and Lessee shall pay to the U3-7^I.V3 IS oi/iim County the reasonable cost of such removal, sale or destmction, together with the reasonable cost of repair of damages to the County's property or in^rovements or to the Premises resulting therefrom. • 10.6 sions and Liohtino. Lessee shall not constmct nor pennit the erection of any signs on the Premises without the prior written approval of the County. Lessee shall submit sketches of proposed signs to the County for approval showing, size, materials, colors and location. Such signs must conform to the standards contained in Exhibit C (MCCLELLAN-PALOMAR AIRPORT INDUSTRIAL AREAS DEVELOPMENT STANDARDS) and to any laws or ordinances of governmental agencies having jurisdiction over the Premises. All. exterior lighting on the Premises must conform to the standards contained in Exhibit D (MCCLELLAN-PALOMAR 'AURFORT INDUSTRIAL AND AVIATION AREAS PERFORMANCE STANDARDS) and tO any laws or ordinances of governmental agencies having juri^d^ictrion over the premises. ' t 10.7 Minor Alterations. Notwithstanding the foregoing provisions of this Article, Lessee may make, without obtaining the prior approval of the Coiuity, minor alterations and improvements ("Minor Alteration") to the Premises that do not require a building pennit, or which involve only the repair, replacement, or reconfiguration of non-load bearing partition walls or Fixtures, and which do not penetrate into or through the roof or floor of sLxiy stmcture on the Premises, and which do not involve the constmction of any new stmctures on the PremdLeee^ The County shall be the sole judge of whether or not any alteration or improvement is a Minor Alteration. ARTICLE 11 TAXES, ASSESSMENTS AND FEES 11.1 ycsponaibilitv for Payment of Taxes aad Assessments. The County shall not be obligated to pay any taxes or assessments accming against Lessee on the Premises or any interest of Lessee therein before, during or after the Term, or any extension thereof; all such payments shall be the sole responsibility of Lessee. In addition. Lessee shall be solely responsible for payment of any taxes or assessments levied upon any Improvements, Fixtures or Personal Property located on the Premises, to the extent that such taxes or assessments result from the tmsiness or other activities of Lessee upon, or in connection with, the Premises. 11.2 pefinition of "Taxes". As used herein, the term "taxes* means all taxes, governmental bonds, special assessments, Mello-Roos assessments, charges, rent income or transfer taxes, license and transaction fees, including, but not limited to, (i) any state, local, federal, personal or corporate income tax, or any real or personal property tax, (ii) any estate inheritance taxes, (iii) any franchise, succession or transfer taxes. LA3-WS771.V3 16 ouivn (iv) interest on taxes or penalties resulting from Lessee's failure to pay taxes, or (v) any increases in taxes attributable to the sale of Lessee's leasehold interest in the Premises. 11.3 Creation of Pofinmmmory Interest. Pursuant to the provisions of Revenue and Taxation Code Section 107.6, Lessee is hereby advised that the terms of this Lease may result in the creation of a possessory interest. If such a possessory interest is vested in Lessee, l^essee may be subjected to the payment of real property taxes levied on such interest. Lessee shall solely responsible for the payment of any such real property taxes. Lessee shall pay all such taxes when due, and shall-not allow any such taxes, assessments or fees to become a lien against the Premises or any in^roveroent thereon; provided. however, nothing in. this Lease shall be deemed to prevent, or prohibit Lessee from contesting the validity of any such tax, assessment or fee in a manner authorized by law. j ARTICLE 12 ' ' REPAIRSi MAINTENANCE 12.1 acceptance of Preniaes. Lessee acknowledges that Lessee has made a thorough inspection of the Premises prior to the Effective Date of this Lease, and that it accepts the ' Premises as of the Effective Date in their condition at that time; provided, however, that the foregoing shall not hm constmed as the acceptance by Lessee of any liabilities for Pre- Closing Leased Facilities Environmental Conditions (as defined in the Purchase Agreement). Lessee further adcnowledges tlutt the County has made no oml or written representations or warranties to Lessee regarding the condition of the Premises, and that Lessee is relying solely on its inspection of the Premises with respect thereto. 12.2 Lessee*s Repair and Maintenance Oblioatione. Lessee shall at all times from and after the Effective Date, at its own cost and expense, repair, maintain in good and tenantable condition and replace, as necessary, the Premises and every part thereof, including, without limitation, the following as applicable: the roof; the heating, ventilation and air conditioning system; mechanical and electrical systems; all meters, pipes, conduits, equipment, components and facilities (whether or not within the Premises) that supply the Premises exclusively with utilities (except to the extent the appropriate utility company has assumed these duties); all Fixtures and other equipment installed in the Premises; all exterior and interior glass installed in the Premises; all signs, locking and closing devices; all interior window sashes, casements and frames; doors and door frames (except for the painting of the exterior surfaces thereof); floor coverings; and all such items of repair, maintenance, alteration, in^rovement or reconstmction as may be required at any time or from time to time by a governmental agency having jurisdiction thereof. Lessee's obligations under LAJ.MSTTI.Va 17 ovitm this Article shall apply regardless of whether the repairs, restorations and replacements are ordinary or extraordinary, fore8ee203le or unforeseeable, capital or noncapital, or the fault or not the fault of Lessee, its agents, employees, invitees, visitors, sublessees or contractors. All replacements made by Lessee in accordance with this Section shall be of like size, kind and quality to the items replaced and shall be subject to prior written approval by the County. Upon surrender of the Premises, Lessee shall deliver the Premises to the County in good order, condition and state of repair, but shall not be responsible for damages resulting from ordinary wear and tear. Lessee shall provide for trash removal, at its esqpense, and shall maintain all trash receptacles and trash areas in a clean, orderly and first-class condition. The County shall have no responsibility or liability for any of the obligations set forth in this Section. 12.3 Lessee's Failure to Maintain. If Lessee refuses or neglects to repair, replace, or maintain the Premises, or any part thereof, in a manner reasonably satisfactory to the County, the County shall have the right, upon giving Lessee reaaonable written notice of its election to do so, to make such repairs or perform such maintenance on behalf of and for the account of Lessee. If the Coiinty makes or causes any such repairs to be made or performed. Lessee shall pay the cost thereof to the County promptly upon receipt of an invoice therefor wit interest at the rate specified in Section 16.8, "Interest" froob the date(s) of the County's payments. 12.4 Right to Entiy. Lessee shall permit the County, or its authorized representatives, to enter the Premises at all times during usual business hours to inspect the same, and to perform any work thereon (a) that may be necessary to comply with any la%irs, ordinances, mles or regulations of any public authority, (b) that the County may deem necessary to prevent waste or deterioration in connection with the Premises if Lessee does not make, or cause to be made, such repairs or psrform, or cause to be performed, such work promptly after receipt of %n:itten demand from the County, and (c) that the County may deem necessary in connection with the expansion, reduction, remodeling, protection or renovation of any the County-constmcted or owned facilities on or off of the Premises, or at the Airport. Nothing contained in this Section shall iitply any duty on the part of the County to do any such work which, under any provision of this Lease, Lessee may be required to do, nor shall the County's performance of any repairs on behalf of Lessee constitute a inraiver of Lessee's default in failing to do the same. No exercise Jay the County of any rights reserved to it by this Section shall entitle Lessee to any condensation, damages or abatement of rent from the County for any injury or inconvenience occasioned thereby, 12.5 eountv Not obligated to Ret^air or Maintaim Leeeee'a Waiver of ralifomia Civil Code Section 1942. To the extent that LA)*79fni.v} 18 ouitm any remedies specified in this Lease conflict or are inconsistent with any provisions of Califomia Civil Code Section 1942, or any successor statute thereto ("CC S1942"), the provisions of this Lease shall control. Lessee specifically waives any right it may have pursuant to CC §1942 to effect maintenance or repairs to the Premises and to abate the costs thereof from rent due to the County under this Lease. ARTICLE 13 INDEMNITY AND INSURANCE 13.1 Indeamitv bv Leea^^. Except for indemnification related to Contaminants (as defined in the Purchase Agreement), Leachate (as defined in the Purchase Agreement)* and Landfill Gas (as defined in the Purchase Agreement), with respect to which the provisions of the Purchase Agreement shall govern, the County shall not be liable for, and Lessee (and if applicable, each of its general partners) and its successors, assigns and guarantors shall defend, indemnify, protect and hold harmless the County, its employees, representatives, agents, consultants, officers, supervisors, successors and assigns from and against any and all claims, demands, liability, judgments, awards, fines, mechanics' liens or other liens, losses, damages, expenses, charges or costs of any kind or character, including actual attorneys' fees and court costs (collectively referred to as "Claims"), arising from or in connection with, or caused by, directly or indirectly, (i) any breach or default by Lessee of its obligations \inder this Lease (excluding therefron any Retained Liability (as defined in the Purchase Agreement), (ii) any act, omission or negligence of Lessee or any subtenant of Lessee, or their respective contractors, licensees, invitees, agents, servants or employees, (iii) any use of the Premises, or any accident, injury, death or damage to any person or property occurring in, on or about the Premises, or any part thereof, or any service delivery facilities or any other portions of the Property used by Lessee, and (iv) any labor dispute involving Lessee, its employees, contractors or agents, including, without limitation, Claims caused by the concurrent negligent act or omission, whether active or passive, of the County or its agents; provided^ howevei^. Lessee shall have no obligation to defend or indemnify the County from Claims caused solely by the gross negligence or willful or criminal act of the County or its agents; 13*2 lasazaasfi. without limiting Lessee's indemnification obligations to the Coiinty, Lessee shall provide and maintain, during the Term and for such other period as may be required in this Lease, at its sole expense, insurance in the amounts aind form specified in Exhibit E (INSURANCE REQUIREMENTS) attached hereto. 13.3 r^1?rm)ltY by the County. Except for indemnification related to Contaminants (as defined in the Purchase Agreement), Leachate (as defined in the Purchase Agreement) and Landfill Gas LA3.7*sni,vi 19 oi/iim (as defined in the Purchase Agreement), with respect to which the provisions of the Purchase Agreement shall govern. Lessee shall not be liable for, and only to the extent permitted by applicable law, the County shall defend, indemnify, protect and hold harmless Lessee, its employees, representatives, agents, consultants, officers, supervisors, successors and permitted assigns from and against any and all Claims arising from or in connection with, or caused by, directly or indirectly, (i) any breach or default hy the County of its obligations under this Lease, excluding therefrom any Assumed Liabilities (as defined in the Purchase Agreement) and any items with respect to which Lessee or Allied (as defined below) is required under the Purchase Agreement to assume or indemnify the County; and (ii) any gross negligence or willful or criminal act of the County or its agents; provided, however, the County shall have no t i obligation to defend or indemnify Lessee from Claims caused solely by the gross negligence or willful or criminal act of the Lessee or its agents. 'I :'i ARTICLE 14 CONTAMINANTS, LEACBATB AND X«ANDFILL GAS 14.1 gayiroffffitatal hm. .i.Pefiaitioa- As used in this Section, the term "Environmental Laws" has the meaning set forth in the Purchase Agreement. 14.2 rontaminants. Leaehate and Landfill gee, » Definition^. As used in this Section, the terms "Contaminants^tt "Leachate" and "Landfill Gas" have the meauaings set forth in theiv^ucchas*^. Agreement. 14.3 y,es8ee'B Representations and Warranties. Lessee represents and warrants that, during the Term or any extension thereof, or for such longer period as may be specified in this Lease, Lessee^shall comply with_tlMi-Xolli3Mina. prnvlBipa^ of this* Section unle8S~>.t^«;iji^^ approved in %n:iting by the County's LeaserAdmihistrator: a. Lessee vSiSffiEfTlliel^^u peirM€^a^ Contaminanti, Leachate or Landfll'l^ <3ai^ to be brought f kept or used in or about the Premised by Lessee, its agents, en^loyees, sxxblessees, assigns, contractors or invitees, except as permitted hy Environmental Laws and except as required by Lessee's permitted use of the Premises, as described in Section 6.1 (PEPM2TTED USES) . b. Any handling, transportation, storage, treatment or usage by Lessee of Contaminauits, Leachate or Landfill Gas that is to occur on the Premises following the Effective Date shall be in compliance with all applicable Environmental Lawe/^ c. Any leaks, spills, release, discharge, emission or disposal of Contaminants, Leachate or Landfill Gas which may LAj'-nsni.Yi 20 ot/itm occur on the Premises following the Effective Date shall be promptly and thoroughly cleaned and removed from the Premises by Lessee at its sole expense, and any such discharge shall be promptly reported in writing to the County, and to any other appropriate governmental regulatory authorities; d. No friable asbestos shall be constmcted, placed on, deposited, stored, disposed of, or located by Lessee in the Premises or on the Property; e. No underground inprovements, including but not limited to treatment or storage tanlcs, or water, gas or oil wells shall be located by Lessee^ on the Premises or on the Property without the County's prior written consent, which consent shall not be unreasonably withheld; < 1 f. Lessee shall conduct and complete all : investigations, studies, sanqpling, and testing procedures! *nd all remedial, removal, and other actions necessary to clean up anb rexnove all Contaminants, Leachate and Landfill Gas on, from, or affecting the Premises in accordance with all applicable Environmental La«rs and to the satisfaction of the County, except with respect to Pre-Closing Leased Facilities Environmental Conditions; g. Lessee shall promptly supply the County with copies of all notices, reports, correspondence, and stibmissions made by Lessee to the United States Environmental Protection Agency, the United Occupational Safety and Health Administration, and any other local, state or federal authority which requires submission of any information conceming environmental matters or hazardous wastes or substances pursuant to applicable EnviroDmental Laws; h. Lessee shall promptly notify the County of any liens threatened or attached against the Premises pursuant to any Environmental Law. If such a lien is filed against the Premises, then, within the earlier of (i) twenty (20) days following such filing, or (ii) before any governmental authority commences proceedings to sell the Premises pursuant to the lien. Lessee shall either: (a) pay the claim and remove the lien from the Premises, or (b) fumish either (i) a bond or cash deposit reasonably satisfactory to the County in an amount not less than the claim from which the lien arises, or (ii) other security satisfactory to the County in an amoimt not less than that which is sufficient to discharge the claim from which the lien arises; and i. At the end of this Lease, Xiessee shall surrender the Premises to the County free of any and all Contaminants, Leachate and Landfill Gas and in cospliance with all Environmental Laws affecting the Premises, except with respect to Pre-Closing Leased Facilities Environmental Conditions. LA3-7«JT7I.VJ 21 auitm 14.4 Tndpumlficatioos Reoardino Contaminants. Leaehate and Landfill Sas. The indemnification responsibilities of Lessee and the County relating to Contaminants, Leachate and Landfill Gas shall be as set forth in the Purchase Agreement. 14.5 Remedies Cunnilativet Survival. The provisions of this Article shall be in addition to any and all obligations and liabilities Lessee may have to the County at common law, and any remedies and the environmental indemnities provided for in this Article shall survive the expiration or termination of this Lease, the transfer of all or any portion of the Premises or of any interest in this Lease, and shall be govemed by the laws of the State of C^alifomia. 14.6 inspection. The County and the County's agents, servants, and enqployees including, without limitation, legal counsel and environmental consultants and engineers retained by the County, may (but without the obligation or duty so to do), at any time and from time to time, on not less than ten (10) business days' notice to Lessee (except in the event of an emergency in which case no notice shall be required), inspect the Premises to determine whether Lessee is complying with Lessee's obligations set forth in this Article, and to perform environmental inspections and san^lings, during regular business hours (except in the event of an emergency) or during such other hours as the County and Lessee may agree. If Lessee is not in compliance, the County shall have the right, in addition to the County's other remedies available at law and in equity, to enter upon the Premises immediately and take such action as the County in its sole judgment deems appropriate to remediate any actual or threatened contamination caused by Lessee's failure to comply. The County will use reasonable efforts to minimize interference with Lessee's use of Premises but will not be liable for any interference caused by the Coimty's entry and remediation efforts. Upon completion of any sampling or testing the Cbunty will (at Lessee's expense if the Coimty's actions are a result of Lessee's default under this Section) restore the affected area of the Premises from any damage caused by the County's sampling and testing. ARTICLE 15 ASSIGNMENT, SUBLEASING AND ENCUMBRANCINO 15.1 The County's Consent to Transfer Required. Lessee shall not voluntarily or involuntarily assign, sublease, mortgage, encumber, or otherwise transfer (collectively, a "Transfer") all or any portion of the Premises or its interest in this Lease wijp^^PI? the^ Cbimt;^s iprior written consent, %ffaich consent shall not be' unreasonably*wr£KKeYd/(provided, however, that Lessee ac)cnowledges and agrees that the Coimty's denial of consent for a reason listed in Section 15.2.2, "Denial of Consent to Transfer" shall conclusively be deemed reasonable). The County may witlihold its consent until Lessee has complied with lAi-nrnuvi 22 witm HI the provisions of the following Sections of this Article. Any atten5>ted Transfer without the County's consent shall be void and shall constitute a material breach of this Lease. As used herein, the term "Transfer" shall include (i) an arrangement (including without limitation management agreements, concessions, and licenses) that allows the use and occupancy of all or part of the Premises by anyone other than Lessee, and (ii) the transfer of any stock or interest in Lessee as a corporation, partnership or joint powers authority which, in the aggregate, exceeds forty- nine percent (49%) of the total ownership interest in Lessee. 15.2 The Countv*s Election. Lessee's request for consent to any Transfer shall be accompanied by a written statement setting forth the details of the proposed Transfer, includ'ing (i) .the name, address, business, business history and financial Condition of the proposed assignee or sublessee (collectively, "Transferee") sufficient to enable the County to determine the finencial responsibility and character of the Transferee; (ii) a copy of the proposed assignment or sublease and the financial details of the proposed Transfer (including the duration, the rent and any security deposit payable under an assignment or sublease), (iii) the Transferee's proposed use of the Premiees, and (iv) any other related information which the County may reasonably require. The County shall have the right: (a) to withhold consent to the Transfer, if reasonable; (b) to grant consent; or (c) to terminate this Lease for the portion of the. Premises affected by any proposed sublease or assignment, in which event the Coimty may enter into a lease direeely with thm proposed sublessee or assignee. 15.2.1 Consent to Transfer. The County's consent to an assigzmient or sixblease will not be effective until (i) a fully executed copy of the instrument: accomplishing a Transfer ("Transfer Instrument") has been delivered to the County, including, without limitation, a copy of any trust deed encumbering Lessee's leasehold and the note secured thereby, (ii) in the case of a sublease, the County has received from Lessee an original of the executed sublease (which sublease must contain the provisions described in Exhibit F (MCCLELLAN-PALOMAR AIRPORT • TEE COOMTy OF SAN DIEGO REQUIRED SUBLEASE PROVISIONS)) and. (iii) in the case of an assignment, the County has received a written instrument in which the assignee has assumed and agreed to perform all of Lessee's obligations under this Lease. Any rights acquired by a Transferee pursuant to any Tramsfer Instrument shall be subject to each and every covenant, condition and restriction set forth in this Lease and to all of the rights and interest of the County in this Lease, except as may be otherwise herein specifically provided in this Article. In the event of any conflict between the provisions of this Lease and the provisions of any Transfer Instrument, the provisions of this Lease shall control. LAJ.7*J771.VJ 23 15.2.2 Denial of Consent to Tranafeg. If the County denies its consent to a proposed Tramsfer, and if Lessee shall so request in writing, the County shall provide to Lessee a statement of the basis on which the County denied its consent within a reasonable time after the receipt of Lessee's notice. Lessee shall have the burden of proving that the Coun^^ consent to the proposed Transfer was withheld unreasonably; clraB^^rden may bm satisfied if the County fails to provide a statement of a reasonable Idasis for withholding^'^ itr consent within a reasonable time after Lessee's request therefor. Notwithstanding any of the foregoing provisions of this Section to the contrary, the following shall be deemed to be reasonable grounds for the County to withhold consent to a Transfer for purposes of compliance with Califomia Civil Code Section 1951.4: » I (a) Lessee or any of its successors, assigns or sublessees are in default as to any term, covenant or condition of this Lease, whether or not notice of default has been given by the County. (b) The prospective assignee or sublessee has not agreed in writing to keep, perform and be bound hy all of the terms, covenants and conditions of this Xiease. (c) The County reasonably objects to the financial condition of the prospective assignee or sublessee. (d) All of the terms, covenants and conditions of the assignment or sublease, including any considemtion therefor, have not been disclosed in writing to the County. (e) Any constmction of inprovements cotranenced by Lessee has not been completed to the satisfaction of the County unless the assignee or sublessee assumes, to the reasonable satisfaction of the County, the obligation to complete such constmction. (f) Nonpayment of the Transfer Fee described below. If Lessee believes that the County has unreasonably withheld its consent to a Transfer, Lessee's sole remedy will be to seek a declaratory judgment that the County has unreasonably withheld its consent or an order of spiecific performance or mandatory injunction requiring the County's consent. Lessee will not have any right to recover damages or to terminate this Lease. 15,3 EF^^rrfrtripQ ^he Leasehold Estate with a Mortoaoe. Any Transfer which consists of the grant of a deed of tmst or similar encumbrance (such encumbrances are collectively referred to herein as a "Mortgage") by Lessee to secure the beneficial interest of a lender ("Beneficiary") in the Premises or Lessee's interests under this Lease, shall be subject to all of the LAi.rtim .V2 24 auitm provisions of this Article pertaining to the conclusion and approval of other Transfers, and shall also be subject to the additional terms and conditions set forth below: (a) No Mortgage granted by Lessee shall enciuiber the fee title to the Preinises at any time; (b) Immediately following the recordation of any Mortgage affecting the Premises or Lessee's interest in this Lease, Lessee, at Lessee's expense, shall cause to be recorded in the Office of the Recorder, San Diego the County, Califomia, a written request for delivery to the County of a copy of any notice of default and of any notice of sale under such Mortgage, as provided by the statutes of the State of Califomia pertaining thereto. 15.3.1 Curable and Noncurable Defaults thider Lease» the Countv'a Covenant of Forbearance. Where the County has consented to a Mortgage encumbering Lessee's leasehold as required pursuant to this Article, then the County, notwithstanding anything to the contrary in this Lease, shall not exercise its remedies under this Lease for Lessee's default during the periods specified in this Section so long as the Beneficiary of such Mortgage takes the following actions: a. If a curable breach of the Lease occurs, a^. Beneficiary shall have the right to begin foredosiure .proceedings and to obtain possession of Lessee's interest in'thiMwpceBdsee^BO long as Beneficiary complies with the conditions set forth below: (1) Cures Lessee's default within the same time period allotted to Lessee for cure of such default, plus an additional thirty (30) days (except that only ten (10) additional days shall be permitted in the case of a default in the payment of money from Lessee to the County) . (2) Notifies the County, within ten (10) days following receipt of the Coimty's notice of Lessee's default, of its intention to effect this remedy; (3) Institutes immediate steps or legal proceedings to foreclose on or recover possession of the leasehold, and thereafter prosecutes the remedy or legal proceedings to con^letion with due diligence and continuity; and (4) Keeps and performs, during the period until the leasehold shall be either (i) sold upon foreclosure pursuant to the Mortgage, or (ii) released or reconveyed pursuant to the Mortgage (such period being referred to hereinafter as the "Foreclosure Period"), all of the covenants and conditions of this Lease, including, without limitation, payment of all rent, taxes, assessments, utility charges and insuramce premiums S 0 required by this Lease to be paid hy Lessee and which become due during the Foreclosure Period. b. If a noncurable breach of the Lease occurs, a Beneficiary shall have the right to begin foreclosure proceedings and to obtain possession of Lessee's interest in the Premises, so long as Beneficiary con^lies with the conditions set forth below: (1) Notifies the County, within ten (10) days after receipt of the Coimty's notice of Lessee's default, of its intention to effect this remedy; (2) Institutes immediate steps or legal proceedings to foreclose on or recover possession of the leasehold, and thereafter prosecutes the remedy or legal proceedings to conpletion with due dili>gence and continuity; and (3) Keeps and performs, during the Foreclosure Period, all of the covenants and conditions of this Lease requiring the payment of money, including, without limitation, payment of all rent, taxes, assessments, utility charges and insurance premiums required hy this Lease to be paid by Lessee and which become due during the Foreclosure Period. c. If Lessee fails to cure any curable default within the time period allowed for such cure in this Lease, no cure by a Beneficiary of any such default in the manner allowed under this Section shall reinstate Lessee in good standing under this Iiease. If, following expiration of the cure period, if any, applicable to Lessee, the Beneficiary shall fail or refuse to conq^ly with any or all of the conditions of this Section applicable to Lessee's default, including failing to expeditiously obtain title to Lessees'if> leasehold, then the Coimty shall be released from its covenant cf forbearance hereunder, and may immediately terminate this Lease. 15.3.2 Tranafcr of Lcaachold Estatet the County's Option PVTghflfft Any Beneficiary who acquires title to the leasehold estate shall immediately provide the County with %n:itten notice of such transfer. Notwithstanding any provision of this Section to the contrary, following transfer of the leasehold estate to a Beneficiary in any manner, the County shall have the option to purchase all right, title and interest in and to the leasehold directly from the Beneficiary. The purchase price shall be equal to the unpaid principal balance due on the note or notes formerly secured by such Mortgage, plus tmstee's fees and costs of sale, if any, but excluding (i) any fees, penalties or late charges assessed by Beneficiary against Lessee, and (ii) any rent or other payments made by Beneficiary under the terms of the Lease. The County may exercise such option to purchase by delivering written notification thereof to a Beneficiary at any time within thirty (30) days following the U3-WT7I.V2 26 Qi/iim County's receipt of written notification of the Beneficiary's acquisition of title to the leasehold. a. Should the County elect to not exercise its option to purchase the leasehold within the period described above, then, subject' to the provisions of Sections 15.4, "Transfer fee," 15.5, "No Release of Lessee," and 15.6, "No Merger," below, and so long as the Beneficiary shall have observed all of the conditions of Section 15.3.1, above, the following breaches, if any, relating to the prior lessee shall be deemed cured: (i) attachment, execution of or other judicial levy upon the leasehold estate, (ii) assignment of creditors of Lessee, (iii) judicial appointment of a receiver or similar officer to take possession of the leasehold estate or the , Premises or (iv) filing any petition by, for or against Lessee under any chapter of the Federal Banlcmptcy Code. Any further transfer of the leasehold estate, however (whether lay a i i , Beneficiary or by a third-party bidder acquiring the estate at a foreclosure sale), shall be subject to the following conditions: (1) The provisions of Sections 15.1, "The County's Consent to Assignment Required," and 15.2, "The County's Election," above, shall apply to such further Transfer, and- the County's consent shall be required to such further Transfer; and (2) By its acceptance of the leasehold estate, the Transferee of such further Transfer assumes this Lease "AS to the entire leasehold estate and covenants with'the Coune3pr<o be bound hereby. 15.3.3 Article ControUiaff» m the event of any conflict between the provisions of this Article and any other provision of this Lease, this Article shall control. 15.3.4 Fii?,wrt to gjyg Notioi. Except as expressly set forth in this Article, the County shall have no obligation to amy Beneficiary or to give any notice to any Beneficiary, and the County's failure to provide any Beneficiary with any notice of any default hereunder shall not create any right or claim against the County on behalf of Lessee or amy Beneficiary. 15.4 Transfer Fee. If the County is requested to consent to a Transfer hereunder. Lessee shall pay all the County's attorneys' fees, plus a nonrefundable fee of $750 ("Transfer Fee") to reimburse the County or the County's agent for costs and expenses incurred in connection with such request. The Transfer Pee shall be delivered to the County concurrently with Lessee's request for consent. 15.5 No Release of Lessee. No permitted Transfer shall release or change Lessee's primary liability to perform all obligations of Lessee under this Lease, except to the extent the Lease is terminated as described above. The County's consent to LAS-TWTi.v: 27 oc/iim one Transfer shall not be deemed to imply the County's consent to any subsequent Transfer. If Lessee's Transferee defaults uader this Lease, the County may proceed directly against Lessee without pursuing remedies against the Transferee. The County may consent to subsequent assignments or modifications of this Lease by Lessee's Transferee, without notifying Lessee or obtaining its consent, and such action shall not relieve Lessee's liability under this Lease. 15.6 Ho Wffrqtg. No merger shall result from a Tramsfer pursuant to this Article, Lessee's surrender of this Lease, or a mutual cancellation of this Lease in any other manner. In any such event, the County may either terminate any or all subleases or succeed to the int«:rest of Lessee thereunder. 15.7 APPrpyil of Temporary er Limited Aetivitiee hy. SsimSSH' Notwithstanding any provision of this Article to the contrary, the Coimty, may, at his or her sole discretion,' andi without charging a Transfer Pee, give written authorization for the following activities on the Premises: (i) .activities of a temporary nature, not to exceed one hundred twenty (120) calendar days, and (ii) activities of a limited nature which do not exceed ten (10) hours per week. Lessee shall maintain, on am approved the County form, a listing of all such activities approved by the County, stating the nature, duration and other relevant matters regarding such activities, and shall make such form available to the County for inspection upon request. Nothing herein shaill relieve Lessee from its responsibilities under this Lease, and Lessee shall be responsible for insuring that any such activity approved by the County complies with all of the provisions of this Lease. Any such temporary or limited activity shall be subject to immediate termination upon delivery of written notification thereof from the County. ARTICLE 16 DEFAULTS BY LESSEE| THE COUNTY'S REMEDIES 16.1 Events of Defanl^. The occurrence of any of the following shall constitute a default by Lessee and a breach of this Lease: (a) Failing or refusing to pay any amount due to the County when due in accordance with the provisions of this Lease; (b) Failing or refusing to occupy and operate the Premises in accordance with the provisions of this Lease; (c) Failing or refusing to perform fully and promptly any covenant or condition of this Lease, other than those specified in subparagraphs (a) and (b) above, the breach of which Lessee is capable of curing after reasonable notice from the County; LAyivni.vi 28 <M/\Vf7 ^3 (d) Maintaining, committing or permitting on the Premises waste, a nuisance, or use of the Premises for an unlawful purpose, or assigning or subletting this Lease in a manner contrary to the provisions of this Lease; (e) The ofccurrence of any of the events set forth in Section 19.1, "Right of Termination," below. 16^.2 ypticei. Following the occurrence of any of the defaults specified in the preceding section, the County shall give Lessee a written notice specifying the nature of the default and the provisions of this Lease breached and demanding that Lessee either fully cure each such default within the time period specified in the sulsparagraphs below or quit the Premises and surrender the same to the Coimty: ~ (a) For nonpayment of any amount due to the County in accordance with the provisions of this Lease, five (5) wor)cing days; (b) For a curable default, a reasonable period not to exceed ten (10) working days, provldedi however, if such default cannot be cured within said time period. Lessee shall be deemed to have cured such default if Lessee so notifies the County in writing, commences cure of the default within said time period, and thereafter diligently and in good faith continues with and actually con^letes said cure; amd (c) For a noncurable default, the County shall givei^ Lessee a written notice specifying the nature of the default and the provisions of this Lease breached and the County shall have^r. the right to demand in said notice that Lessee, and any - subtenant, quit the Premises within five • (5) working days. To the extent permitted by applicable State law, the time periods provided in this Section for cure of Lessee's defaults under this Lease or for surrender of the Premises shall be in lieu of, and not in addition to, any similar time periods described hy Califomia law as a condition precedent to the comoiencement of legal action against Lessee for possession of the Premises. 16.3 The County'a Rights and Remediee. Should Lessee fail to cure any such defaults within the time periods specified in the immediately preceding Section, or fail to quit the Premises as required thereby, the County may exercise any of the following rights without further notice or demand of any )cind to Lessee or any other person, except as may otherwise be required by applicaLble Califomia law: (a) The right of the Cbunty to terminate this Lease and Lessee's right to possession of the Premises and to reenter the Premises, take possession thereof and remove all persons otuitm Si therefrom, following which Lessee shall have no further claim on the Premises under this Lease; (b) The right of the County without terminating this Lease and Lessee's right to possession of the Premises, to reenter the Premises and occupy the whole or amy part thereof for and on accoimt of Lessee and to collect any unpaid rents and other charges, which have become payable,, or which may thereafter become payable pursuant to Civil Code Section 1951.4; or (c) The right of the County, even though it may have reentered the Premises in accordance with the immediately preceding subparagraph (b) of this Section, to elect thereafter to terminate this Lease and Lessee's right to possession* of the Premises. ' Should the County have reentered the Premises under the . provisions of subparagraph (b) of this Section, the County shiall not be deemed to have terminated this Lease, the liability of Lessee to pay rent or other charges thereafter accming, or Lessee's liability for damages under any of the provisions hereof, by any such reentry or by any action, in unlawful detainer or otherwise, to obtain possession of the Premises, unless the County shall have notified Lessee in writing that it has so elected to terminate this Lease and Lessee's right to possession. Lessee further covenants that the service hy the County of any notice pursuant to the unlawful detainer statutes of the State of Califomia and the surrender of possession pursuant to such notice shall not (unless the County electe to the contrary at the time of, or at any time subsequent to, the serving of such notice and such election is evidenced by a written notice to Lessee) be deemed to be a termination of this Lease. In the event of any reentry or taUting possession of the Premises as aforesaid, the County shall have the right, but not the obligation, at Lessee's expense, to remove therefrom (i) all or any part- of the buildings or stmctures placed on the Premises by Lessee or its agents, and (ii) any or all merchandise. Fixtures or Personal Propearty located therein and to place the same in storage at a public warehouse at the expense and risk of Lessee. The rights and remedies given to the Coimty in this Section shall be additional and supplemental to all other rights or remedies which the County may have under laws in force when the default occurs. X6.4 The County'B PftBflTttg Should the County terminate this Lease and Lessee's right to possession of the Premises pursuant to the provisions of subparagraph (a) or (c) of the imonediately preceding Section, the County may recover from Lessee as damages any or all of the following: (a) The worth at the time of award of any unpaid rent that had been earned at the time of such termination; LA3.r«377l.Vl 30 Ot/lt/«T (b) The worth at the time of award of the amount by which the unpaid rent that would have been earned after termiziation until the time of award exceed! the amount of such rent loss Lessee proves could have been reaaonad>ly avoided; (c) The worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount pf such rent loss that Lessee proves could be reasonably avoided; (d) Any other amount necessary to condensate the. County for all actual damages suffered by the County as a result of Lessee'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 esqpense incurred by the County in (i) retadting possession of the Premises, including reasonable attomeys' fees therefor, (ii) maintaining or preserving the Premises after such default, (iii) preparing the Premises for reletting to a new tenant, including repairs or. alterations to the Premises for such reletting, (iv) leasing commissions, and (v) any other costs necessary or appropriate to relet the Premises; and (e) At the County's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by the laws of the State of Califomia. As used in subparagraphs (a) and (b) of tl^is Seetlbn, the "worth at the time of award" is counted by allowing interest at the maximum rate allowed by Califomia Law. As used in subphragmph c of this Section, the "worth at the time of award is computed by discounting such amoimt at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). All rent, other tham monthly Base Rent shall, for the purposes of calculating any amount due under the provisions of subparagraph c of this Section, be confuted on the basis of the average monthly amount thereof accming during the insnediately preceding sixty (60) month period, except that, if it Idecomes necessary to compute such rent before such a sixty (60) month period has occurred, then such rent shall be confuted on the basis of the average monthly amount hereof accming during such shorter period. 16.5 Fixtures and Personal Property. In the event of Lessee's default, all of Lessee's merchandise. Fixtures and Personal Property shall remain on the Premises and, continuing during the length of said default, the Coimty shall have the right to take the exclusive possession of same and to use the same free of rent or charge until all defaults have been cured or, at its option, to require Lessee to remove same forthwith. LA).7«s77i.v} 31 mtivn 1^-^ Thg^Comty*9 Seo;»rity,.Taterest. To secure Lessee's perfoimance of any and all of Lessee's obligations under this Lease, Lessee hereby grants the County an express first amd prior contractual lien and security interest in Lessee's Fixtures and Personal Property located on the Premises, and also upon all proceeds of any insurance that may accme to Lessee by reason of the destmction or damage such property. Lessee vraives the benefit of all exenption laws in favor of this lien and security interest. This lien and security interest is given in addition to the County's statutory lien and is cumulative with it. Upon the occurrence of an event of default, these liens may be foreclosed with or without court proceedings by public or private sale, so long as the County gives Lessee at least fifteen (15) days' notice of the time'and place of the sale. The County shall have the right to become the purchaser if it is the highest bidder at the sale. To perfect said security interest. Lessee shall execute and deliver to the County such financing statements required by the applicable Uniform Commercial Code as the County may request. 16.7 Lessee's Waiver. Notwithstanding anything to the contrary contained in this Article, Lessee waives (to the fullest extent permitted under law) any written notice (other than such notice as this Article specifically requires) which amy statute or law now or hereafter in force prescribes be given Lessee. Lessee further waives any and all rights of redemption under any existing or future law in the event its eviction from, or dispossession of, the Premises for any reason, or in the event the County reenters and takes possession of the Premises in a lawful manner. 16.8 Interest. Any amoimts due from Lessee under the provisions of this Lease which are not paid when due shaill bear interest at the rate of four percent (4%) per annum over the discount rate charged from time to time by the Federal Reserve Bank (San Framcisco office), but not to exceed the maximum rate which the Coimty is permitted by law to charge. ARTICLE 17 DEFAULTS BY TBB COUNTYi REMEDIES If the County shall neglect or fail to perform or observe any of the terms, covenants, or conditions contained in this Lease on its part to be performed or observed within thirty (30) days after *rritten notice of default or, when more than thirty (30) days shall be required because of the nature of the default, if the County shall fail to proceed diligently to cure such default after written notice thereof, then the County shall be liable to Lessee for any and all damages sustained by Lessee as a result of the County's breach; provided. hcS2fi2ax* <a) except with respect to the County's indemnification obligations and except if the County defaults under this Lease by granting any interest in the Premises to another party during the term hereof or by W3-7»S77I.V3 32 ^9 entering the Premises, in either case in a manner not permitted by this Lease (and in all of the foregoing situations described in this ^j^f^yise (a), the "Net Income" limit described herein shall not apply), any money judgment resulting from any default or other claim arising under this Lease shall be satisfied only out of Prepaid Rent, if during the Initial Term, and, thereafter, out of the Base Rent ("Net Income" for purposes of this Article only), (b) no other real, personal or mixed property of the County, wherever located, shall be subject to levy on any such judgment obtained against the County, (c) if such Net Income is insufficient to satisfy such judgment. Lessee will, not institute any further action, suit, claim or demand, in law or in equity, against the County for or on the accoimt of such deficiency, and (d) such neglect or failure shall not constitute consent by the County for Lessee to perform or observe such terms, covenants or conditions at the County's expense. Lessee hereby waives, to. the extent permitted under law, any right to satisfy said moaleJr '• t judgment against the County except from Net Income and agrees that on any action for damages. Lessee is limited to recovering its actuad damages and may not recover any consequential or punitive damages. ARTICLE 18 ABANDONMENT Lessee shall not vacate or aljandon the Premises at amy time during the term of this Lease. If Lessee slrnll..iibsndesn..vaee^e >i> or surrender the Premises, or be dispossessed by proceee^f 'laefi or otherwise, any Personal Property or Fixtures belonging .to Lessee and left on the Premises shall, at the option of the County, be deemed abandoned. In such case, the County may dispose of said Personal Property and Fixtures in any maimer provided by Califomia law and is hereby • relieved of all liability for doing so. These provisions shall not apply if the Premises should be closed and business temporarily discontinued therein on account of strikes, lockouts, or similar causes beyond the reasonable control of Lessee. ARTICLE 19 BANKRUPTCY IS.l pight of Termination. Should any of the following events occur, the County may terminate this Lease and any interest of Lessee therein, effective with the commencement of the event: a. Proceedings are instituted whereby all, or substantially all, of Lessee's assets are placed in the hands of a receiver, tmstee or assignee for the benefit of Lessee's creditors, and such proceedings continue for at least thirty (30) days; LA3.7^n7I.VJ -^J 5^ b. Any creditor of Lessee institutes judicial or administrative process to execute on, attach or otherwise seize any of Lessee's merchamdise, Fixtures or Personal Property, located on the Premises and Lessee fails to discharge, set aside, exonerate by posting a bond, or otherwise obtain a release of such property within thirty (30) days; or c. A petition is filed for an order of relief under the Federal Bankmptcy Code or for an order or decree of insolvency or reorganization or rearrangement under any state or federal law, amd is not dismissed within thirty (30) days. Any assignee pursuamt to the provisions of amy bankmptcy law shall be deemed without further act to have assumed all of the obligations of the Lessee under this Lease arising on or dfter the date of such assignment. Any such assignee shall upon demand execute amd deliver to the Coimty an instnunent confirming sUch assun^tioh. 'I 19*2 Be west fQir lafonastioa. within ten (lO) days after the County's request therefor. Lessee shall provide the County and any mortgagee or proposed mortgagee of the County, as the County shall specify, such financial, legad and business information conceming any of the events described in this Article as the County shall request. ARTICLE 20 DAMAGE OR DESTRUCTION 20.1 gfffyaltg» Should the Fixtures, Personal Property or inpi^bvements be damaged by fire, flood or any other peril, Lessee shall restore such Fixtures, Personal Property or io^rovements to substantially the same condition as they were in Immediately preceding such daxnage or destmction. In the event of a total destmction of the Premises so that the Premises are rendered unusable, either party shall have the right to terminate this Lease. 20.2 Constmction Proviaiena. In the event of any reconstmction of the Premises required of Lessee pursuant to this Article, Lessee shall, to the extent of available insurance proceeds, repair or rebuild such improvements to substamtially the same condition they were in immediately preceding such damage or destmction. 20.3 NO Abatement of Rent. Lessee shall not be entitled to any compensation or damages from the Coimty for loss of. use of the whole or any part of the Premises, Fixtures and Personal Property, or any inconvenience or annoyance occasioned by such damage, reconstmction or replacement. Lessee hereby waives amy - statutory rights of terTsiination which may arise l^y reason of any partial or total destmction of the Premises. LA3.7«Tr?.V» 34 ARTICLE 21 lailNENT DOMAIN 21.1 ^""'^rr^g^f ?r if all of the Premises is taken under eminent domain proceedings by a party other than the County, or, if less than all of the- Premises is taken under such proceeding and the part taken substamtially impairs the ability of Lessee to use the remainder of the Premises for the purposes permitted by this Lease, then either the County or Lessee may terminate this Lease as of the date that the condemning authority takes possession by delivery of written notice of such election within twenty (20) days after such party has been notified of the taUcing or, in the absence thereof, within twenty (20) days after the condemning authority shall have taken possession. 21.2 Continuation of Lease After CCTl?fagHtiTrjl If this Lease is not terminated by the County or Lessee, it shall remain in full force and effect as to any portion of the Premises remaining, and: (a) This Lease will end as of the date possession of the part is taken by the public entity as to the part of the Premises that is taJcen; (b) Lessee is not entitled to the retum of any prepaid rent; and (c) At its cost, Lessee shall restoremeo muchr^f^^he remaining portion of the Premises as is required to create a site substantially suitable for the purposes for which it was used immediately before the taking. 21.3 Lessee's Award. In cozmection with any taking. Lessee may prosecute its own claim by separate proceedings against the condemning authority for damages legally due to it (such as the loss of Fixtures that Lessee was entitled to remove and moving expenses) only so long as Lessee's award does not diminish or otherwise adversely affect the County's award. 21.4 Allocation of CondenmaMon Award for a Tgtal Taklner of the Preinises. All awards for the total taking of the Premises or proceeds from the sale made under the threat of the exercise of the power of eminent domain sliall be the property of the County, whether made as compensation for diminution of value of the leasehold estate, for the taking of the fee, or as severance damage; provided, however. Lessee shall be entitled to any award for (i) the value of Lessee-constmcted improvements minus depreciation by that percentage per year which is derived by dividing 100 years by the length of the initial Term, and (ii) loss of or damage to Lessee's traide fixtures, and removable personal property. Notwithstanding the foregoing, any amount of condemnation condensation due to Lessee pursuant hereto shall go first, to the County to satisfy (i) the County's attomeys' fees. LAS.7tS7Tl.V3 35 Ql/ltm 4 ^ appraisal fees, and other costs incurred in prosecuting the claim for the award, (ii) the value of the reversion as of the ending date, and (iii) any financial obligations of Lessee to the County pursuant to the provisions of this Lease, and second, to any creditors of Lessee to satisfy the remaining balance of any due to such creditor frcan any the County• approved loam encumberino the Premises. ^ ARTICLE 22 SALE OR MORTGAGE BY TBB COUNTY 22.1 gdle or wortqagg. From and after the Effective Date, the County may at any time, without the consent of Lessee, sell, purchase, exchange, transfer, assign, lease, encumber on convey the County's' interest in whole or in part, in the Lease, the Premises, the realty underlying the Premises or any portion of or interest in the realty or indrovements on the Property ' (collectively referred to in this Jlrticle as a "Sale"). ARTICLE 23 SUBORDINATION^ ATTORNMENT 23.1 Subordination- Without the necessity of any other document being executed and delivered by Lessee, this Lease is and shall be junior, subject and subordinate to any existing or future permits or approvals issued by the United States of America or any local. State or federal agency affecting the control or operation of the Premises; Lessee shall be bound by the terms and provisions of such permits or approvals. In addition, this Lease is and shadl also be subject, subordinate and junior to all ground leases, mortgages, deeds of tmst and other security instruments of any kind now covering the Premises, or any portion thereof. 23.2 AttQn*mgat« In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of tmst made by the County covering the Premises, Lessee shall attom to the purchaser upon any such foreclosure or sale and recognize such purchaser as landlord under this Lease. ARTIOiE 24 COUNTY'S RIGHT OF ACCESS 24.1 Accgss. The County, its agents, enployees, and contractors may enter the Premises at amy time in response to an emergency, and at reasonable hours to (a) inspect the Premises, (b) exhibit the Premises to prospective purchasers or Lessees, (c) determine whether Lessee is complying with its obligations in this Lease (including its obligations with respect to comliance with Environmental Laws), (d) supply cleaning service and any other service that this Lease requires the County to provide, (e) post notices of nonresponsibility or similar notices, LAJ.7«577I.VJ 36 ^1 (f) make repairs that this Lease requires the County to make, or make repairs to any adjoining space or utility services, or make repairs, alterations, or iziprovements to amy other portion of the Property, (g) access any property owned or operated lay the County that is adjacent to or near the Premises, (h) test, inspect, investigate, remediate or monitor the Premises, amd any real property adjacent to or near the Premises, for Contaminants, Leachate or Landfill Gas, and (i) repair, maintain, install, replace, investigate, inspect amd test amy equipment or machinery relating to Contaminants, Leachate or Lamdfill (3as remediation, testing or monitoring of the Premises or any real property adjacent to or near the Premises; provided, however, all work will be done as pron^tly as reasonably possible and so as to cause as little interference to Lessee as reasonably possible. 24.2 Lessee Waivera Regarding Countv Access. Lessee waives amy claim of injury or inconvenience to Lessee's business,| interference with Lessee's business, loss of occupancy or quielt enjoyment of the Premises, or any other loss occasioned by such entry. If necessary,. Lessee shall provide the County with keys-to unlock all of the doors in the Premises (excluding Lessee's vaults, safes, and similar areas designated in writing by Lessee in advance). The County will have the right to use any means that the County may deem proper to open doors in the Premises and to the Premises in an emergency. QUIST jyiJIiUMU If Lessee is not in breach under the covenants made in this Lease, the County covenants that Lessee shall have peaceful amd quiet enjoyment of the Premises without hindrance on the part of the County. The County will defend Lessee in the peaceful amd quiet enjoyment of the Premises against claims of all persons claiming through or under the County. ARTICLE 26 BOLDIKG OVER If Lessee remains in possession of the Premises, for any reason, after the expiration of the term of this Lease without executing a new Lease, or after the County has declared a forfeiture by reason of a default by Lessee, then such holding over shall be constmed as a tenancy from month to month, subject to all the conditions, provisions and obligations of this Lease insofar as they are applicable to a month-to-month tenamcy. The Base Rent payable during amy period of holding over shall be equal to Two Thousand Five Hundred Dollars ($2,500) (based upon 1997 dollars) per day, or any portion thereof, as such number is adjusted for inflation. u3-7*377i.v: 37 ouitm ARTICLE 27 NOTICES 27.1 Notices. Whenever in this Lease it shall be required or permitted that notice or demand be given or served by either party to this Lease to or on the other, such notice or demand shall be in writing, mailed or delivered to the other party at the addresses specified in Article 1 (SUMMARY OF BASIC LEASE PROVISIONS). Mailed notices shall be sent hy United States Postal Service, certified or registered mail, postage prepaid and shall be deemed to have been given, delivered and received three (3) business days after the date such notice or other communication is posted hy the United States Postal Service. All other such notices or other communications shall he deemed given, delivered and received upon actual receipt. Either party pay, by written notice delivered pursuant to this provision, at any time designate a different address to which notices shall be sent. 27:2 Default Notices. Notwithstanding anything to the contrary contained within this Article, any notices the County, is required or authorized to deliver to Lessee in order to advise Lessee of alleged violations of Lessee's covenants under this Lease must be in writing h\it shall be deemed to have h^en duly given or served upon Lessee by the County attempting to deliver at the Premises during normal business hours a copy of such notice to Lessee or its mamaging en^loyee or by the County mailing a copy of such notice to Lessee in the manner specified in the preceding Section. ARTICLE 28 NONDISCRIMINATION Lessee hereby covenants by amd.for itself, its successors, assigns and all persons claiming under or through it, that-this Lease is made amd accepted upon and subject to the condition that there shall be no discrimination against, or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises, nor shall. Lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the Premises. ARTICLE 29 AFFIRMATIVE ACTION PROGRAM Lessee, by maintaining a business location within San Diego the County and by being.able to use such business location by virtue, in whole or in part, of this Lease, shall coitply with the Affirmative Action Prograun for Vendors as set forth in LA3.7«am.vj 38 oi/iim a2™fni-?^^?*=^°S 2^ Section 84) of th. San Diego the f HJ!*"^ program is incorporated in thie p™f^«m^,^r v.«S5^*°f?; v.* Affinaative Action ARTICLE 30 WAIVER OF RELOCATION ASSISTANCE BENEFITS ^r,^«^-^ ^^'LSf^'^?^^'^*^" Afffflfftaace Pengf4ti. Lessee is hereby informed amd ac)cnowledges the following: ^ ^ entering into this Lease and becoming a tenant of the County, Lessee may become entitled to receipt of • relocation assistance benefits ("Relocation Benefits") pursuant to the Federal Uniform Relocation Assistance Act (42 U S C if 4601 et seq.) and the Califomia Relocation Assistance'Law* (Cal GOV. Code. SS 7260 et seq.), or either of them (collectively the "Relocation Statutes"), should: the County at some tiS makJ'use of the Premises in such a way as to "displace" Lessee from the Premises. Pursuant to the Relocation Statutes, the County may then become obligated to make such payments to Lessee even where such displacement of Lessee does not otherwise constitute a breach or default by the County of its obligations pursuant to this Lease * 5' « Under the Relocation Statutes in.effect asi90frthe-r date hereof. Relocation Benefits may include payment to sueh a "displaced person* of (i) the actual amd reasonable expense of moving himself or herself and a family, business, or farm operation, including personal property, (ii) the actual direct loss of reestablishing a business or farm operation, but not to exceed Ten Thousand Dollars ($10,000), or (iii) paiyment in lieu of moving eacpenses of not less than One Thousamd Dollars ($1,000) or more than Twenty Thousamd Dollars ($20,000). ^ , 3;-2 t'eSflee's Waiver and Releaae off R^lg^n^j^p BfPtfita. In consideration of the County's agreement to enter into this Lease, Lessee hereby waives any and all rights it may now have, or may hereafter obtain, to Relocation Benefits arising out of the County's assertion or exercise of its contractual rights to terminate this Lease pursuant to its terms, whether or not such rights are contested by Lessee or any other entity, and releases the Coimty from amy liability for payment of such Relocation Benefits; provided* however. Lessee does not waive its rights to Relocation Benefits to the extent that Lessee's entitlement thereto may arise out of amy condemnation or pre- condemnation actions taken hy the County or amy other public agency with respect to the Premises. Lessee shall in the future execute any further documentation of the release and waiver provided hereby as the County may reasonably require. UU-7W7I.V3 39 ARTICLE 31 RECORDS, ACCOUNTS AND AUDITS a. Lessee shall, at all times during the term of this Lease, keep or cause to be-kept, tme and conplete boolts, records and accounts of all f inamcial transactions in the operation of all business activities, of whatever nature, conducted pursuant to the rights granted in this Lease. Such records shall also include the source amd disposition of all trash collected amd disposed of by Lessee in the operation of its business. Said records must be supported l3y reasonable source documents. b. All Lessee's ]x)o)cs or accounts and records shall be kept and made available at one location within the liidits of the Coimty of San Diego. The County shall liave the right at any reasonable time to examine and perform audits of Lessee'ij records pertaining to its operations on the Premises. The cost of salid audits shall be home by the County; however. Lessee shall provide to the County at Lessee's expense, necessary data to enable the County to fully comply with each and every requirement of the State of Califomia or by the United States of America for information or reports relating to this. Lease amd to Lessee's use of the Premises. ARTICU 32 GENERAL PROVISIONS 32.1 Authority. Lessee represents and warrants that it has full power and authority to execute and fully perform its obligations under this Lease pursuant to its goveming instruments, without the need for any further action, and that the person(s) executing this Lease on behalf of Lessee are the duly designated agents of Lessee amd are authorized to do so. 32.2 Brokers. Lessee %rarrants that it has had no dealings with amy real estate broker or agent in connection with the- negotiation or execution of this Lease. In the event amy broker other tham the brokers aclcnowledged in-iinriting by the County maike claim for monies owed. Lessee shall Indemnify, defend and hold the Coimty harmless therefrom. 32.3 Captions. The captions, headings amd index appearing in this Lease are inserted for convenience only amd in no way define, limit, constme, or describe the scope or intent of the provisions of this lisase. 32.4 The Countv Approval. Except where stated in this Lease to the contrary, the phrases "the County's approval," and "the County's written approval* or such similar phrases shall mean approval of the County's Lease Administrator or said Administrator's representative as authorized by said administrator in writing. LA3.7«5T7l.Va 40 0WH/f7 32.5 Pwii^t^i ReatdAfi- in the event of a default under this Lease, each party's remedies shall be limited to-those remedies set forth in this Lease; any such remedies are cumulative and not exclusive of any other remedied under this Lease to which the non-defaulting party may he entitled. 32.6 Entire Aore«nfn^ This Lease, together with all addenda, exhibits and riders attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof, and all prior or contemporaneous agreements, understandings and representations, oral or written, are superseded. 32.7 Estoppel Certifieat:^. Lessee shell at anyitime during the term of this Lease, within five (5) business days of written notice from the County, execute and deliver to the County a statement in writing certifying that this Lease is unmodified and in full force and effect or, if modified, stating the nature of such modification. Lessee's statement shall include other details requested by the County., such as the date to which rent and other charges are paid, the current ovmership amd name of Lessee, Lessee's )cnowledge conceming any outstamding defaults with reapedt to the County's obligations under this Lease and the nature of such defaults if they are claims. Any such statement may be relied upon conclusively by any prospective purchaser or encumbrancer of the Premises. Lessee's failure to deliver such statements within such time shall he conclusive, upon Lessee that- this Lease is in full force and effect, except to the ^leene any modification has been represented hy the County, and that there ^ are no uncured defaults in the County's performance, and that not' more than one month's rent has been paid in advance. 32.8 Exhibitff. All exhibits referred to in this Lease are attached hereto and incorporated by reference. 32.9 forot Wftjfvri. in the event either party is prevented or delayed from performing any act or discharging any obligation under this Lease, except for the payment of rent by Lessee, because of amy and all causes beyond either party's reasonable control, including unusual delays in deliveries, abnormal, adverse weather conditions, unavoidable casualties, strikes, labor disputes, inability to obtain laibor, materials or equipment, acts of God, governmental restrictions, regulations or controls, any hostile govemment actions, civil commotion and fire or other casualty, legal actions attacking the validity of this Lease or the County's occupancy of the Premises, or any other casualties beyond the reasonable control of either party except casualties resulting from Lessee's negligent operation or maintenance of the Premises ("Force Majeure"), performance of such act shall be excused for the period of such delay, and the period for performance of such act shall be extended for a period equivalent to the period of such delay. Force Majeure shall not UU-7W7t.Vl 41 oc/iim include any bankmptcy, insolvency, or other financial inability on the part of either party hereto. 32.10 Goveming ^aw. This Lease shall be govemed, constmed and enforced in accordance with the laws of the State of Califomia. 32.11 Interpretation. The parties have each agreed to the use of the particular language of the provisions of this Lease, and any question of doubtful interpretation shall not be resolved by any mle of interpretation providing for interpretation against the parties who cause an uncertainty to exist or against the draftsperson. 32.12 Joiat »Pd Si^rml J^i^iliXY- if more t^han one person or entity executes this Lease as Lessee, each of them is jointly and severally liable for all of the obligations of Lessee under this Lease. I i 32.13 Lessee's ^ftffft ^^iniatration. Lessee confirms that Lessee's Lease Administrator has been given full operational responsibility for conpliance with the terms of this Lease. Lessee shall provide the County with a %n:itten schedule of its normal hours of business operation on the Premises, and Lessee's Lease Administrator or a representative designated thereby shall be (i) available to the County on a twenty-four (24) hour a day, seven (7) days a week, basis, and (ii) present on the Premises during Lessee's normal business hours, to resolve problems or answer question pertaining to this Lease amd Lessee's operations on the Premises. 32.14 Lioruidatefl gtl Any payments by Lessee to the County under this Lease described as liquidated damages represent the parties' reasonable estimate of the County's actual damages under the described circumstances, such actual damages being uncertain and difficult to ascertain in light of the impossibility of foreseeing the state of the leasing market at the time of the various deadlines set forth herein. The County may, at its election, take any of the liquidated damages assessed in amy portion of this Lease as direct monetary payments from Lessee and/or as an increase of rent due from Lessee under this Lease. 32.15 Modification. The provisions of this Lease may not be modified, except by a written instrument signed by both parties. 32.16 Partial Invalidity. If any provision of this Lease is determined hy a court of con^etent jurisdiction to be invalid or unenforceable, the remainder of this Lease shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent permitted by law. iA3.T*mi.v3 42 outvn 32.17 Egymeata. Except as may otherwise be expressly stated, each payment required to be made by Lessee shall be in addition to and not in substitution for other payments to be made by Lessee. 32.18 gttoctggorg » Aggiqai- This Lease shall be binding on an inure to the benefit of the parties and their successors and assigns, except as may otherwise be provided in this Lease. 32.19 Tiae Of gggeact. Time is of the essence of each amd every provision of this Lease. 32.20 HfilZlZ- No provision of this Lease or the breach thereof shall be deemed waived, except by written consent of the party against whom the waiver is claimed, ihe waiver by the Coimty of. any breach of any term, covenant or condition '• contained in this Lease shall not be deemed to be a waiver of such term, covenamt or condition of any subsequent breach thereof, or of any other term, covenant or condition contained in this Lease. The Coimty's subsequent acceptance of partial rent or performance by Lessee shall not be deemed to be an accord amd satisfaction or a waiver of any preceding breach by Lessee of any term, covenant or condition of this Lease or of any right of the County to a forfeiture of the Lease by reason of such breach, regardless of the County's knowledge of such preceding breach at the time of the County's acceptance. The failure on«;;the'!ipart of the County to require exact or full amd complete compliance wi<th amy of the covenamts, conditions of agreements of this Lease shall not be constmed as in amy manner changing or waiting the terms of tliis Lease or as estopping the County from enforcing in full the provisions hereof. No custom or practice which may arise or grow up between the parties hereto in the course of administering this Lease s3mll be constmed to waive, eiitop or in any way lessen the right of the County to insist upon the full performance of, or compliance with, any term, covenant or condition hereof by Lessee, or constmed to inhibit or prevent the rights of the County to exercise its rights with reitpect to any default, dereliction or breach of this Lease by Lessee. 32.21 Purchaae Aorgeaent. Nothing COntaixied in this Lease shall limit, modify or reduce the covenamts, agreements or obligations of Lessee or Allied, or the C(iunty's rights and remedies, under that certain Purchase and Saj Agreement dated as of August 12, 1997 (as amended from time, the "purchase Agreement"), by and between the seller, and Allied Waste Industries, Inc., a Delaware ("Allied"), as purchaser (which Purchase Agreement has assigned to, and assumed by. Lessee as it relates to, things, the Premises), including, without limitation, or Lessee indemnification obligations and any County of representations and warranties set forth therein. 14 the LA3-7ti771.V3 43 e tiime to as cdrporation l>een other Allied Courty axiiong aiy di£ claimers os/tim event of a conflict between the terms of this Lease amd the Purchase Agreement, the Purchase Agreement shall control. 32.22 q^un^erparts. This Lease may be executed in any number of counterparts, each of which is deemed an original and all of which, when taken together, constitute one and the same instrument. 32.23 Approvals. All CouTity approvals under this Lease must include the approval of the Assistant Deputy Director - Aviation. i LA3*7«5m.V2 44 (K/iim IN WITNESS WHEREOF, the County an Lease as of the day and year fir executed this THE COUNTY: THE COUNTY OF SAN a politieal sut)division of. the State of Califomia By: iwrence B. Prior Chief Administrative Officer APPROVED AS TO FORM. AND LEGALITY LESSEEI STATION, INC., corpor^A^on telA#» Authorized Repveeeneettse By: Don Swierenga, President I I 45 ooiim 90 EXBIBIT A DESCRIPTION AND PLAT OF TBB PREMISES Parcel No. 97-0085-Al That portion of McClellan-Palomar Airport, in the City of Carlsbad, Coimty of Sam Diego, State of Califomia. described in deed to the County of San Diego, recorded January 18, 1974 as File/Page No. 74-014190 in the Office of the County Recorder of said County, described as follows: BEGINNING at the most Southerly comer of land described' in deed to the City of Carlsbad recorded June 30, 1982 at File/Pa^e No. 82-201566 in said County Recorder's Office; thence alongj the Southerly boundary of said Carlsl^ad land. North 78*42'04"| West, 635.35 feet to a point on the Easterly line of a 48.00 foot road and utility easconent granted to said City of Carlsbad on said 1982 deed; thence along said Easterly line. South 11*17'56" West, 519.92 feet to the beginning of a tangent 326.00 foot radius curve, concave Easterly; thence Southerly, along the arc of said curve, through a central angle of 54*45'22", a distance of'311.55 feet; thence tangent to said curve South 43*27'26" East, 112.20 feet; thence leaving said Easterly line. North 51*31'08" East, 235.72 feet; thence North 61*24'19" East, 355.40 feet; thence North 57*22'14" Bast, 246.04 feet to the beginning of a tangent 50.00 foot radius curve concave Westerly; thence Northeasterly along the arc of said curve, through a central angle of 88*35'04*, a distance of 77.30 feet; thence tangent to said curve North 31*12'50" West, 51.72 feet; thence North 53*37'13" West, 169.04 feet; thence North 4"55'29" East, 93.29 feet to the POINT OF BEGINNING. LA3-WS77I.VJ A- 1 OUiam PLAT OF TBS* PREKISJSS tSEB ATTACKED] uo.'wnt.va A-2 oviim 1^ PALCTMAP.. I I • I "* 03 EXHIBIT B FEDERAL AVIATION ADMINISTRATION REQUIREMENTS In the event there is any conflict between the provisions in this Exhibit amd the' other provisions in this Lease, the provisions in this Exhibit shall take precedence. a. Lessee for itself, its heirs, personal representatives, successors in interest, amd assigns, as a part of the consideration hereof, does hereJsy covenant amd agree as a covenant mnning with the land that in the event facilities are constmcted,, maintained, or otherwise operated on the said property described in this Lease for a purpose for ^ich tai DOT program or activity is extended or for another purpose involving the provision of similar services or benefits. Lessee shall maintain and opemte such facilities and services in coQqpl'iance with all Other requirements incosed pursuant to Title 49, Code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination 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 he amended. b. Lessee for itself, its personal representatives, successors in interest, amd assigns, as a part of the consideration hereof, does hereby covenant amd agree as a I covenant running with the land that: (1) na person on«tbe».grounds \^ of race, color, or national origin- shall be exclude* f«oai«^ participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities, (2) that' in the constmction of any improvements on, over, or under such land and the fumishing of services thereon, no person on the grounds of race, color, or national origin shall he excluded from participation in, denied the benefits of, or otherwise be subject to discrimination, (3) that Lessee shall use the Premises in con^liamce 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, Nondiscrimination 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. c. That in the event of breach of any of the above nondiscrimination covenants, the County shall have the right to terminate this Lease and to re-enter and repossess said lamd and the facilities thereon, and hold the same as if said Lease had never been made or issued. This provision does not become effective until the procedures of 49 CFR Part 21 are followed and completed including expiration of appeal rights. d. Lessee shall fumish its accommodations and/or services on a fair, equal and not unjustly discriminatory hesi.a to all users thereof and it shall charge fair, reasonable amd not lAi'-nsni.vi B-l oi/iim unjustly discriminatory prices for each unit or service; PROVIDED, THAT Lr^ssee may be allowed to make reasonable amd nondiscriminatory discounts, rebates or other similar type of price reductions to volume purchasers. e. Non-cbmpliamce with Provision d above shall constitute a material breach thereof and in the event of such noncon^liance the County shall have the right to terminate this Lease and the estate hereby created vrithout liability therefore or at the election of the County or the United States either or both said Governments shall have the right tq judiciaaiy enforce said Provisions. f. Lessee agrees that it shall insert the abdve five (5) Provisions in amy sublease, contract or agreement by which said Lessee grants a right or privilege to any person, f^rm or corporation to render accommodations amd/or services to the ' public on the Premises herein leased. 9. Lessee assures that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to insure that no person shall on the grounds of race, creed, color, national origin, or sex be excluded from participating in any employment activities covered in 14 CFR Part 152, Subpart E. Lessee assures that no person shall he excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. Lessee assures that it will require that its covered suborganizations provide assurances to Lessee that they similarly will undertake affirmative action program* and that they will require assurances from their suborgamizations, as required by 14 CFR Part 152, Subpart B, to the same effect. h. The County reserves the right to further develop or improve the landing area of the Airport as it sees fit, regardless of the desires or view of Xjessee and without intierference or hindrance. i. The County reserves the right, but shall not he obligated to Lessee, to maintain and keep in repair the landing area of the Airport and all publicly-owned facilities of the Airport, together with the right to direct amd control all activities of Lessee in this regard. j. This Lease shall be subordinate to the provisions and requirements of any existing or future agreement between the County and the United States, relative to the development, operation or maintenance of the Airport. k. There is herelay reserved to the County, its successors and assigns, for the use amd benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Premises herein leased. This public right of LA3.7nTn.V3 B-2 ot/itm 0*^ flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used for navigation or flight through the said airspace or landing at, taking off fr<xn or operation on the Airport. 1. Lessee agrees to con^ly with the notification and review requirements covercMi in Part 77 of the Federal Aviation Regulations in the event future constmction of a building is planned for the leased Premises, or in the event of any plamned modification or alteration of any present or future building or stmcture situated on the leased Premises. m. Lessee, by accepting this, esqpressly agrees for itself , its successors and assigns that it will not erect juor permit the erection of any stmcture or object, nor permit the groitfth of any tree on the land leased hereunder that conflicts with Part 77 of the Federal Aviation Regulations. In thelevek^t the aforesaid covenamts are breached, the County reserves the right to enter upon the lamd leased hereunder amd to remove the offending stmcture or object and cut the offending tree, all of which shall be at the esqpense of Lessee. n. Lessee, by accepting this Lease, agrees for itself, its successors and assigns that it will not maike use of the leased Premises in any manner which might interfere with the landing and taking off of aircraft from said Airport or otherwise constitute a hazard. In the event the aforesaid covenant is^*^ breached, the County reserves the right to enter upon the*^ Premises hereby leased and cause the abatement of such interference at the expense of Lessee. o. It is understood and agreed that nothing hereis^i contained shall be constmed to grant or authorize the granting-- of an exclusive right within the meaming of Section 308a of the " Federal Aviation Act of 1958 (49 U.S.C. 1349a). p. This Lease amd all the provisions hereof shall be subject to whatever right the United States Govemment now has or in the future may have or acquire, affecting the control, operation, regulation and taking over of said Airport or the exclusive or non-exclusive use of the Airport by the United States during the time of war or national emergency. U3.7«JT»|.V3 B»3 otfitm 1^ EXBIBIT C MCCLELLAN-PALOMAR AIRPORT INDUSTRIAL AREAS DEVELOPMENT STANDARDS TABLE OF CONTENTS 1. LAND USES ; 3^ a. Accepted Uses , ' i b. Prohibited Uses ! ! l 2. CONDUCT OP USB . i . . . 1 3. BUILDING SETBACKS 1 4. BUILDING CONSTRUCTION I. .'l. 1 a. Coverage 3^ b. Exterior Walls ! . ! ! 1 5. HEIGHT LIMIT 2 6. MINIMUM DISTANCE BETWEEN BUILDINQS 2 7. MULTIPLE-OCCUPANCY BUILDINGS 2 8. REQUIRED SCREENING 2 a. Parking Areas 2 b. screening Types 2 c. Roof Tops .2 9. HEIGHT OF FENCES, WALLS, AND PLANT MATERIALS 3 a. Fences and Walls 3 b. Plant Materials 3 10. OFF-STREET PARKING AND LOADING 3 a. Parking 3 b. Loading Space 3 c. Dimensions 3 d. Location 3 e. Improvement of Parking Spaces and Parking Areas . . . ! 3 f. Marking of Parking Spaces 3 g. parking Restrictions 3 11. ON-SITE CIRCULATION 4 a. Ingress amd Egress 4 b. Drive%*ay Aprons 4 c. Pedes triam WaLkways 4 12. SIGNS 4 a. Identification Signs 5 b. Directional Signs 5 IA3.7<S77I.V3 C-1 V c. Safety Signs ' ' I d. Real Estate Signs ^ e. Sign Design 5 13. TRASH CX)LLECTION AREAS 5 14. LANDSCAPINQ 5 a. Required Lamdscaped Areas . . . * 5 b. Landscaping Design 6 c. Irrigation 6 15. OTHER RECSULATIONS ^ tAJ.7W7l.VJ ^ * MCCLELLAN-PALOMAR AIRPORT . INI>USTRIAL AREAS DEVELOPMENT STANDARDS 1. USBS a. Accented Ua^f. The following primary uses will be acceptable subject to approval of the County amd cosqpliamce with these development standards and the performamce stamdards specified for McClellan-Palomar Airport: (1) Research and development uses. (2) Industrial and manufactur^ing uses. (3) Warehousing, storage, and wholesaling. (4) Offices, services, sales activity, and other necessary buildings amd uses appurtenamt to permitted uses specified in 1, 2, and 3 above. (5) Signs pertaining only to the use conducted within buildings or signs pertaining to the sale or lease of the premises on which they are located in accordamce with standards contained herein. (6) Off-street parking amd loading, vehicular and pedestrian circulation, amd landscaping in accordance with standards specified herein. (7) On the same leasehold or building site with a permitted industrial park use, one dwelling unit occupied exclusively by a caretaiker or superintendent of such use amd his/her family may be permitted upon approval of the County. (8) Finance, insurance, real estate and business services, provided such services involve primary emphasis on processing or production, to the exclusion of services rendered to customers on the premises, to which end such offices shall be called process offices. b. Prohibited Uses. Uses not falling into the above categories are not permitted unless specifically set forth in the Lease. 2. ^qrmxscT OF USE. All manufacturing operations shall be conducted within am enclosed building. All storage shall be conducted within a totally enclosed building or enclosed by a six (6) foot high or higher, view obscuring fence or wall. This fence shall not encroach into any required exterior yard. No storage shall exceed the height of the*wall or fence. LA3.7«S77I.V1 C-3 ot/iim 3. fUITfP^^^ SETBACTg. No building, stmcture (except a wall or lamdscape feature--or fence) sliall at any time be erected or maintained on any site within twenty-five (25) feet from any' site boundary abutting any street. 4. fmir^-^a CQNSTRUCTTnM. a. ^qveraoe. All buildings, including accessory )3uildings ' amd stmctures, amd all paved areas shall not cover more than ninety percent (90%) of the net lot area. b. ^terior Walla. Any building erected within the industrial park shall conform to the following: • I (1) Exterior Walls shall he concrete or masonry except where specific approval is given by the County for , architecturally acceptable alternate materials and design.' ' I (2) Exterior walls shall be painted or treated in a mamner acceptable to the County. 5. fffj^HT LIMIT. No building or stmcture shall exceed two stories or 35 feet in height, whichever is the lesser; provided. however, buildings or stmctures located one hundred (100) feet or more from amy property line and exceeding 35 feet in height may be permitted upon approval by the County. 6. MTWIMOM DISTANCE BETWEEN BUILDINGS. These-Shaia-^MK^S minimum ten (10) feet between all buildings located on the sasie site. 7. Mm^TTPLE OCCUPANCY BUILDINGS. Multiple occupancy of buildings is permitted. In case of multiple occupancy, off-street parking, off-street loading, outdoor trash facilities, and on-site vehicular and pedestrian circulation systems must be shared in common; provided that separate such facilities may be perinitted hy the County where justified and when such prevision does not otherwise deviate from the specifics and intent of these development stamdards. 8. ^OUTRgP SCREBNINQ- a. |»arkina Areas. Where parking space areas are located so as to be visible from a street, there shall be a landscaped screen at least five (5) feet in width, planted with trees, shrubs, ground cover, or combination of landscaping and aggregate materials that will significantly soften the view of such areas. Such landscaping may be credited to the ten percent (10%) requirement of Paragraph 14. . b. gfireenino Types. Where screening is required herein it shall consist of one, or any combination of the following types, in an aesthetically designed configuration. LAJ.79377I.V2 C-4 QVlim go (1) Walls: A wall shall consist of concrete, stone, brick, tile, or similar type of solid masonry material a minimum of four inches thick. (2) Berms: A berm shall consist of landscaped mounded earth designed in such a way as to provide desired screening effect. (3) Fences, solid: A solid fence shall be constmcted of masonry. (4) Fences, open: An open weave or mesh type fence shall be combined with plant materials or view obscuring slats to form an opaque screen. (5) Planting: * Plant materials, when used as a screen' shall consist of compact evergreen plants. They shall be of a iJcind, or used in such a manner, so as to provide screening having av ' minimum thicJcness of two (2) feet within eighteen (18) months ' after initial installation. c. Roof TOPS. Roof top equipment such as HVAC units shall be screened from view from both street level amd above. To that end, all duct work and electrical conduits are to be rim undemeath the roof surface. In addition, the equipment should be clustered amd roof top color shall be considered during the design of the buildings. 9. HEIGHT or FENCES, WALLS. AND PLANTED MATERIXl.^. a. Fences and Walla. No decorative or screening fences or wall's shall exceed the following height limits above ground elevation: (1) Within required front or side yard setback abutting a street: Forty-two (42) inches except within five (5) feet of the intersection of a drive%ray and a street, a driveway and a walkway, a driveway and parking area circulation aisle, or two (2) driveways in which cases the height limit shall be thirty (30) inches. ' (2) All other areas: Eight (8) feet, unless otherwise approved by the County. b. Plaat Matcriftlg. Except where used as am opaque screen, plant materials may be permitted at any height not constituting a hazard to operation of aircraft based on the judgment of the County. 10. OFF-STREET PARRINC AMD LOADING SPACE. a. parking. All parking shall be designed to be provided at the ratio of one (1) off street parking space per three hundred (300) square feet of gross floor area If the proposed UJ.713771.V3 C-5 f^ty^ development of the Premises is recognized as a standard warehouse or manufacturing use, paved parking may be provided at the ratio of one space per six hundred (600) square feet. However, the remainder of the land area necessary to provide an ultimate parking ratio of one (l) space per three hundred (300) square feet of gross floor must be available for future parking expamsion. This area may be made a part of the lamdscaped area of the Premises until such time as the additional parking is needed, however it will not be considered as part of the required 10% landscaping coverage outlined in Clause 14. (LANDSCAPINQ) below. b. goading Space. All buildings With a gmss floor area greater than one 'thousand (1,000) square feet shall he served with a loading area* %d.th minimum dimension of twenty (20) feet by twenty (20) feet. One (1) additional loading area shall be provided for buildings with a gross floor area exceeding twelve thousand (12,000) square feet. Loading areas shall not be placed in any required yard areas or parlcing spaces. c. p^mensions. Each parking space shall be a minimum of nine (9) feet wide and twenty (20) feet deep. d. location. All parking amd loading spaces shall be on the same leasehold Premises with the building or stmctures they are to serve. e. improvement of Parking Spaces Uttd ff^gK (1) All parking spaces or areas, loading berths, approaches, and drivewys shall be adequate for anticipated wlweh^ loads, with a stmcturaa section designed by a.soils engineer^ and constmcted of Portland Cement (concrete over a base course of adequate stability. (2) All parking spaces abutting the perimeter of the property shall be provided with securely installed concrete wheel Ijarriers or concrete curbs not less than four (4) inches in height. t. parking of Parklno Spaces. The location of each parking space shall be identified and maintained by permanent surface markings. g. parking Restrictions. On street P^f^ing within the Industrial Park shall conform with the current City of Carlsbad Code. 11. '^H'glT? CIRCULATION. a. m^^^' *nd Egress. LA3-7«S77I.V3 " (1) On-site driveways shall be located so as to serve multiple purposes such as parking and loading areas wherever possible. (2) On-site driveways shall have an unobstmcted paved surface minimum width of not less than fifteen (15) feet per one-way drive, or twenty-four (24) feet for two-way drive. (3) Parking, loading areas, amd driveways shall he arramged to permit vehicular traffic to move into and out of par]cing and loading areas, driveways, and rampa without the backing of any vehicle onto a street. (4) Unobstmcted amd adequate maneuvering aisles or tum-around areas shall be provided as necessary to insure that all vehicles shall enter the street or highway in a forward mamner. (5) Parking areas, driveways, maneuvering aisles, ramps, and tum-around areas shall be kept free amd clear of obstmctions at all times. b. PriYgwfty.. Aproai. AII driveway aprons will be installed concurrently with individual site development and shall be commercial driveways of Portland cement concrete, six (6) inches thick from curb to right-of-vray line with minimum width of fifteen (15) feet at the curb line for one-way traffic and thirty (30) feet for two-way traffic according to Standard Drawing G-16. Where driveway aprons will serve semi-trailers, they shaai be no less than twenty-four (24) feet and thirty-six (36) feet respectively, and may be constmcted as ailley aprons with appropriate curb returns. e. pedestrian Walkwava. Easily accessible and adequate pedestrian wallcways consisting of concrete, decorative gravel, paving bloc)cs, or other aesthetically pleasing materials shaQl be provided. 12. 22SNS. a. i^dentifieation. Not more tham two (2) signs identifying the name and address of the occupant and the products, activities or facilities located on the Premises are permitted for each Premises except as hereinafter specified. (1) One (1) such sign may be a single-face sign mounted on and parallel to a wall of the main building. Such sign siiaill be proportional to the size of the building wall upon which it is mounted hut shall not exceed an area of forty-eight (48) square feet. Such a sign may not extend above the top of the parapet wall, the roof line at the wall, the eaves of the building, or portion of the building to which attached, whichever is applicable; nor shall the sign face protmde more tham eighteen ( LA3.7W7I.VJ C-7 ouitm e giqn Desi^. Identification signs must be designed so as to provide uniformity of layout, lettering, graphics; size, shape, color, method of installation and constmction. The lollVion and design of all identification signs shall ^e subject to the written approval of the County. No sign of any type shall be installed without the prior written approval of the County. 13. TTMn ^nT,T.BCTTQir AREAS. All trash collection "^^^^« located outside of areas requi to be devoted to landscaping aSd shall be enclosed by a Sail and heavy duty solid gates not iSss than six (6) feet in height. Portland cement concrete, floors knd aprons are required in.trash collection areas. 14. r-«>wp,^eAPlNG. ! ' required and submitted for approval of the County. ^11 isiterior va?d8 except for driveways shall be landscaped and maintained, h^^erTlnno event shall the total landscaped area be less than tSS^ercent (10%) of the gross lot area. All areas not in a dSvSS^y or sidewalk between street curb and the property line siXllhl landscaped and maintained by Lessee and may be included in the above mentioned ten percent on-site requirement. b. j.ypdgeapino Design. (1) coverage: At least seventy-five P^ff^J, <2!ii;SM«S?io« m,rface landscaped shall be planted with*m con?»tib»l-t:oBtoination of trees shmbi? vines, floSers or ornamental ground cover. The^v fenlinlli: ^Iclude teatures such as pedestrian ^l^^^yj'J^^l^ g^lings, sculptures, pools, fountains, outdoor seating areas, de?orativ4 paving, and gravel areas, interspersed with planting areas. (2) spacing: Plant material spacing shall conform $0 the following standards: A minimum of twenty-five (25) feet from the back of sidewalk at street intersections to the center of the first trSe or the center of the first large shrub ten feet in height or more at maturity, c wioation. Prior to commencing any use of the r>^ooertv reouired landscaped areas shall be planted and a Silent t^ sprinkler system or similar watering system or ISJTcS adeSate to^ovid^ water necessary to properly maintain the partt^Sr plant^materials used, shall be constmcted and thereafter maintained in good working order. 15. ^TTT? ^gPt^TIONS. In addition to the provisdons oj^these policiM promulgated by the Board of Supervisora which regulate l>3.7f57n.Vl ^ the administration, land use, constmction, and development of the County Airports. In the event there is any conflict between these Development Standards and the regulations, la%w, and/or ordinamces of the above mentioned agencies, the most restrictive shall apply. LA3.7W7I.VJ C-10 oi/iim EXBIBIT D MCCLELLaN>Pai.QMAR AIRPORT INDUSTRIAL Alfp AVIATION AREAS PERFPRMMTCB STAMPWS TAPLB or CQwrmg PAGE 1. NOISE 1 a. standards . 1 b. Method of Measurement 1 c. Sound Ijevel 1 d. Aircraft Engine Runups , . . . l a. Exemptions ,. 1 2. GLARE J . y . 1 a. Standards l b. Prohibitions ........ 1 3. ELECTRC^AGNETIC INTERFERENCE 2 a. Standards 2 b. Method of Measurement 2 4. VIBRATION 3 a. Standards 3 b. Method of Measurement - . . 3 5. TOXIC MATTER 3 a. Standards ....... 3 b. Method of Measurement • - 3 6. ODOR * 7. SMOKE, PARTICULATE MATTER, AND OTHER AIRv^CONTAMtNANTS . . 4 8. LIQUID WASTES . 4 a. standards 4 b. Prohibitions 4 9. FIRE AND EXPLOSIVE HAZARDS 4 10. OTHER REGULATIONS 4 LA3-7*S77I.V2 D-1 ovivn MCCLELLAN-P|ILQMAR AIRPORT INDUSTRIAL AND AVIATION AREAS PSRFORMANCB gTAWPWg 1. KQXfiS. a. Stgadsrdg* At no point on or beyond the boundairy of the leasehold Premises shall the maximum sound level resulting from any operation, activity or use exceed Leq(h) - 70 dB for continuous noise. If the measured ambient level exceeds the applicable limit noted above, the allowable one hour average sound level shall be the ambient noise level. The ambient noise level shall be measured when the alleged noise violation source is not operating. i b. Method of Meaaurenent; - Noise Shall be measured with a sound level meter having an A-weighted filter constmcted in ' accordamce with specifications of the American Nationail Standards Institute for type S-2A general purpose sound level meters. (1) In^ct noise shall l>e measured using the fast response of the sound level meter. Iiqpact noises are • intermittent sounds such as from a punch press or drop-forge haunmer. (2) Continuous noise shall be measured-using the slow response of the sound level meter. c. Sound Level (Noise Levell. Sound level shall mean the weighted soimd pressure level obtained by the use of a sound level meter amd frequency %reighting network as -specified in American National Standards Institute specifications for sound level meters (ANSI.4-1971, or the latest revision thereof). If the frequency weighting easployed is not indicated, the A*weighting is implied. d. Aircraft Engine ^^\ip^. Lessee shall restrict aircraft engine tests amd maintenance runups performed on the leasehold Premises to idle power settings. Lessee shall restrict aircmft tests amd maintenance runups at greater than power settings to locations on the Airport and during the time of day authorized in writing by the County. e. Exenptioi^n. The following sources of noise are exenpt from the specified maocimum sound level: Lessee; (1) Tramsportation vehicles not under the control of (2) Occasionally used safety signals, waming devices, and emergency pressure relief valves; and LA3.7«mi.v3 D-2 <tt/itm 920 - 30,000 Megacycles 2000 Microvolt/Meter irrespective of the above standards, any electromagnetic disturSSci that causes interference with radio transmissions, aimmfTinstruments, navigational aids, or other^electromagnetic receptors essential to aircraft operations shall be modified or abated upon request of the County. H ^^f^^i^A Maaaurement. The level of radiated electmmagSSticiSLrfSmSS shall be measured by using standard lield s??Ingth measuring techniques. The maximum ^J-^-.J^^^^^ tabulation shall be considered as having been exceeded if at any f mSutnc? in the section of the spectrum being measured, the meaSlmd field strength exceeds the maximum value tabulatefi for this spectrum section. 4. mMTlQW* ' ' a. SiBaflialR. At no point <'^„^«y??$^X%SSSi?7 fVi- 1 easehold Premises shall the maxiimam particle velocity reciting ?rom any operation, or activity or use exceed 0.10 inches plr second fo? steady-rate vibrations and 0,20 inches per second for impact vibrations. b. iflrtho^t of He^gvremeat; ^y^^StiSLSw^^^Trir'"^ with a seismograph or coDE5)lement o«,i;«truments ca^Die or p V. « 6.28 F X D . . p'v. . Particle velocity, inches per second F'- Vibration frequency, cycles P«^,s??^^fincKee D - Single aii«>litude displacement of the vibration, inches The maximum particle velocity shall be the maximum vector sum oTlhT^h^ Ltually perpendicular components recorded s imultaneously. l^\ qreadv-rate vibrations are vibrations which are continuous " vLStlons in discrete in^ml.e- occurring 100 or more times per minute. (2) impact vibrations are vibrations in discrete impulses occurring less than 100 times per minute. 5. 791^K MATTBB> ei-andards At no point on or beyond the boundary of K^fno^SSies shall the release of any airborne toxic ^^ifresSuiS^r^ a^y^^^^ activity or use exceed 3.0 ^rcent oftSe Thre^ol^^^ Value; prjaOdfid, Imfivfit, if a U3-7Vni.VJ D.4 ^'^•^ •it ' va^if l^f««S ""^J ^^""^ *° established Threshold Limit Value, Lessee shall satisfy the County Department of P»jblic Health that the proposed levels will be safe to the general population. ^ . b- Method of Mea^t|r^>|^^n^> The maximum concentration is ^vY®? a fractional amount of the ACGIH Threshold Limit Value which is the maximum concentration permitted an industrial worker for eight hours exposure per day, five days a week, as adopted by Conference of Governmental Industrial Hygieniits * l^^^^l: ^f""^^ matter shall be measured at ground li?el or habitable elevation using ACGIH or ASIM methods and shall be the average of any 24-hour san^jling period. * f • fiB2£. At no point on or beyond the boundary of the I leasehold Premises shall any odorous gases or other odorous matter resulting from any operation, activity or use be detectable. ' "'l operations, activities, and uses shall be conducted so as to comply with the mles and regulations of the San Diego the County Air Pollution Control District goveming smoke, particulate matter, and other air contaminants. 8. LIQUIP ^ASTgg. a. Staftdarflg. All operations, activities, and uses shall be conducted so as to conply with the mles and regulations of the State of Califomia Water Quality Control Board - San Diego Region amd the County San Diego. ^ b« Prohibitioag. The discharge of any toxic or waste material onto the ground, into any dminage channel, or the discharge ot any toxic material into any on-site leaching system shauLi be prohibited. ^- riRg AWP mLQgyvg BA7ABBa> All operations, activities, and uses shall be conducted so as to caaply with the mles and regulations of the applicable fire protection agency and the Uniform Fire Code goveming fire and explosive hazards. 10. 9TSER RggPLATIOKS. In addition to the provisions of these Perf ormamce Standards, all operations on the Premises shall conform to the standards specified by the applicable Federal Aviation Administration Regulations, laws of the State of Califomia and the applicable local ordinances which regulate land use and operations. In the event of a conflict between these Performance Standards and various applicable laws, ordinances and regulations, the most restrictive shall apply U3.7tm,.v, D-5 EXHIBIT E INSURANCE REQUIREMENTS Without limiting Lessee's indemnification obligations to the County. Lessee shall provide and maintain, during the Term-and for such other period as may be required by the provisions^ of this exhibit ("Insurance Exhibit") or the Lease, at its sole expense, insurance in the amounts and form specified in this Insursmce Exhibit. A T.4»vt4iity Insurance. Lessee shall procure either C^mprSheSiveGiSS^^ insurance or COBinercial General Liability insurance applying to its use and occupancy of the Premises, or any part thereof, or any areas adjacent thereto, and the business operated by Lessee or any other occupant on the Premises, in the amounts and form set forth below: ^ (1) r«"rehensive General LdffbiUtV ^gf^^^' A^f^jTy-"^^ Con^rehensive General Liability Insurance which provides limits of: (a) Coxnbined Single Limit per occurrence: 55,000,000 (b) Fire Damage Limit (Any One Fire): $ 500,000 (c) Medical Expense (Any One Person): $ 5,000 OR Commercial General Liability Insurance which provide»^l»lts ofr: (a) Per Occurrence: !I'222'2S2 (b) T,or?ir1on f^T?ftCiric Aggregate: !|'222'S2S (c) Products/Completed Operations: !!'2S2'222 (d) . Personal & Advertising Injury limit: f^,000,000 (e) Fire Damage Limit (Any One Fire) : $ 500,000 (f) Medical Ea^ense Limit (Any One Person): $ 5,000 (3) Reonired LiablHtV PoTiCY CQveraqf. J;J^^iJi^y policy provided by Lessee under this Insurance Exhibit shall contain the following coverage: (a) Premises and Operations (b) Products/Completed Operations (c) Contractual Liability eaqiressly including liability assumed under this Lease. (d) Personal Injury Liability (e) Independent Contractors' Liability (f) Pollution liability with no exclusion for operations at the Premises (q) Severability of Interest clause providing that the coverage applies separately to each insured, and that an act or omission by one of the named LA3-7tS77I.V3 E-1 ^0 insureds shall not reduce or avoid coveraqe to the other named insureds. r.oi Tflg^ygtf fin^^fg^qtntM Any general liability policy provided by Lessee under this Insurance Exhibit shall contain an endorsement which applies its coverage to the County the members of the Board of Supervisors of the County, aad the ?5'',?Sf«°ts, employees and volunteers of the County individually and collectively, as additional insureds. ^V1i^iHHff^!!Sfy jBg^rffBCC Endorff^^nt. The coverage afforded by the additional insured endorsement described above shall aoolv as primary insurance, and any other insurance maintained by the County, the members of the Board of Supervisors of the <?oSity or its officers, agents, en^loyees and volunteers, or any the County self-funded program, shall be excess only and iot contributing with such coverage. r^r.^<Jll Jitif Zl laffygftacfl Po^jglti. AII liability policies shall be written to apply to all bodily injury. i^Si^fi^Lfr^^A P'^^Perty damage, personal injury and bther covered loss, however occasioned, occurring during the policy l^ll »P«S^^i«lly insure the performance by Lessee of h« iJ-S^i??*^^*'^-*?''®*^^ contained in this Lease relating to liability for injury to or death of persons and damage to property. If the coverage contains one or more aggregate limits, a minimum of 50% of any such aggregate limit available at all times; if over 50% Sf aSy aggregate limit has been paid or reserved, the County may require additional coverage to be purchased by Lessee to restore the required limits. Lessee may combine primary, umbrella and as broad as possible excess liability coverage to achieve the total limits indicated above. Any umbrella or excess liability policy shall include the Additional Insured Endorsement described below. . Ali R^ffK F^jre TagaraaOf. A standard fire policy including perils, in-an amount of ninety percent 90% of the full replacement cost of the Building and Improvements, without deduction for depreciation, including coats of demolition and debris removal. Such policy or policies of insurance shall include coverage for (i) Lessee's merchandise, (ii) fixtures owned by Lessee, (iii) any items identified in this Lease as iB5>rovements to the Premises constmcted or owned either by the County or Lessee, and (iv) the personal property of Lessee, its agents and employees. *- «- J (1) Ped^Ctiblg. The deductible for the required fire insurance policy shall not exceed $10,000 per occurrence and shall be home by Lessee. Proceeds of ipgi^yfi^^g. in the event of damage or destmction to the Premises covered by the fire or physical LA3-7W7l.yj E.2 ^1 hazard insurance required of Lessee under this Insuramce Exhibit, the proceeds of .such insurance shall be allocated as follows: (a) Proceeds from any or all of said insurance policies shall be payable, first, to the holder of any mortgage or deed of tmst permitted under this Lease to the extent required by said mortgage or deed of trust; (b) Any balance, remaining after application of insurance proceeds in the manner indicated in subparagraph (a) , above, shall be credited to Lessee. If Lessee, or the County, is required to rebuild or restore the Premises pursuant to the provisions of this Lease, the amount of insurance proceeds credited to Lessee shall -be in^ounded with an independent depository acceptable to the County in accordemce with a rider to the insurance policy setting forth this procedure, to be disbursed to pay, to the extent such portion of proceeds ^y be sufficient. Lessee's obligations to repair and restore the Premises pursuant to the provisions of this Lease; (c) In the event that, after paying all of the costs and expenses of repair and restoration referenced in subparagraph (b), above, amy laalance of insurance proceeds remains, it shall be retained by Lessee. Should it be amticipated that the proceeds of insuramce to be received hy Lessee will be insufficient to repair or restore the Premises as required by this Lease, Lessee shall have the option to either (1) terminate,^ this Lease and tum over all insurance proceeds from thev.impound account to the County, or (ii) repair or restore the Premise* reouired under this Lease using the available insurance proceedsr with any shortfall in the amount necessary to repair or restore** the Premises being contributed, in cash, by Lessee. (See, Section 20.5 (UNINSURED CASUALTT) under Article 20 (DAMAGE OR DESTRUCTION) . (d) Notwithstanding any provision of the foregoing to the contrary, upon any termination of this Lease all proceeds from Lessee's insurance, but excluding such proceeds attributable to damages sustained by Lessee's merchandise or personal property, shall be disbursed and paid to the County. C. t^i^^r^henai-v^ Automobile/Aircraft/Wstercraft LigfrilitY Tnaiiranee. Lessee shall procure Comprehensive Automobile/Aircraft/Watercraft Liability Insurance, applying to its use and occupancy of the Premises and the business operated by Lessee or any other occupant on the Premises. Such policy shall be written for bodily injury, including death, and property damage, however occasioned, occurring during the policy term, in the amount of not less than One Million Dollars ($1,000,000), combined single limit per occurrence, applicable to all owned, non-owned and hired vehicles/aircraft/watercraft. Notwithstanding any provision of the foregoing to the contrary. 01/11/97 U3-7W71.V3 * •* however, such coverage may be waived in writing by the Countv if it determines there is no"^significant exposure to theSe riSkJ. ?• gtatVtOrV Workers' Compenaatton an«j ]f^lover'a Lltbllj^y JpgyrtPOe; Lessee shall provide the statutory amount 5fw^ compensation insurance, with a broad form all^states endorsement and with e«5>loyer's liability coverage of no lew tSaS 5^22^ ' Million Dollars ($3,000,000) per occurrence for all esDloyees engaged in services or operations under this Lease. Lassie shall also provide U.S. Longshoremens' and Harbor Workers' Act coverage, when applicable. E. General Provialo^^, (1) Certifioytes of lagargacg. Lessee shall, as soon as practicable following the placement of insurance required by this Insurance Exhibit, but in no event later than ten (lO) dSys tirior to the Effective Date, deliver to the County certified coaieSiof the actual insurance policies specified by this Insurance Exhibit, or certificates evidencing the same, together with appropriate separate endorsements thereto, evidencing that Lessee has obtained such coverage for the period of the Lease. Thereafter, copies of renewal policies, or certificates and> appropriate separate endorsements thereof, shall be delivered to the County within thirty (30) days prior to the e^imtiS^ lie term of any policy required by this Insurance Exhibit. Lessee shall permit the County at all reasonable times to inspect any policies of insurance of Lessee which Lessee has not dilivered to the' County. ^ , . <2) C^eiffi Made CoYgrtqt. If coverage is written on a "claims made" basis, the Certificate of Insurance shall clearly state so. In addition to the coverage requirements specified above, such policy shaai provide that: (a) The policy retroactive date coincides with or precedes Lessee's possession of the Premises (including subsequent policies purchased as rene%^ls or replacements). (b) Lessee will-make every effort to maintain similar insurance during the required extended period of coverage following esipiration of the Lease, including the requirement of adding all additional insureds. H«*t«nent or t. insurance is terminated for any reason, Lessee shall purchase an extended reporting provision of at least two years to report claims arising in connection with the Lease. . policy allows for reporting of circumstances or incidents that might give rise to future claims, ^ J3) nilMTt to Qbt^ip or Maintain Insuraneet th^ CffimtY^B Remeqifg. Lessee's failure to procure the insurance specified by LA3.Tt5T7I.V2 E-4 ^ this Insurance Exhibit, or failure to deliver certified copies or appropriate certificates of such insurance, or failure to make the premium payments required hy such insurance, shall constitute a material breach of the Lease, and the County may, at its option, terminate the Lease for any-such default by-Lessee. (4) Wo Uaitfttloa.of Qbliqitioaf> The foregoing requirements as to the types-and limits of insurance coverage to be maintained by Lessee, and any approval of said insurance by the County or its insurance consultant (s), are not intended to and shall not in amy manner limit or qualify the liabilities auid obligations otherwise assumed by Lessee pursuant to the Agreement, including, but not limited to, the provisions conceming indemnification. (5) iTotice of' Cancellation or Change of Coverage. All certificates of insurance provided by Lessee must evidence that the insurer providing the policy will give-the County thirty (30) days' written notice, at the address shown in the Section of this Ijease entitled "Notices" below, in advance of any cancellation, lapse, reduction or other adverse change respecting such insurance. (6) Qtialifving Insurers. All policies of insurance required hereby shall be issued by companies which have been approved to do business in the State of Califomia by the State Department of Insurance, and which hold a current policy holder's alphabetic and fixiancial size category rating ^f not less* than A, VII according to the current Best's Key IRMtin^tGXtide, o»« » company of equal financial stability that is approved in writing-^ by the County's Risk Manager. (7) gyview of Coverage. The Coimty shall retain the righic*' at any time to review the coverage, form and amount of insurance reouired by this Insurance Exhibit and may require Lessee to obtain insurance reasonably sufficient in coverage, form and amount to provide adequate protection against the kind and extent of risk which exists at the time a change in insurance is required. <a) Sslf-lBPUraaCf> Lessee may, with the prior written consent of the County's Risk Manager, fulfill some or all or the insurance requirements contained in this Lease under a plan of self-insurance. Lessee shall only be permitted to utilize such self-insurance, however, if, in the opinion of the County's Risk Manager, Lessee's (i) net worth, and (ii) reserves for payment of claims of liability against Lessee, are sufficient to adequately compensate for the lack of other insurance coverage required by thi^ Lease. Lessee's utilization of self-insurance shall not in any way limit liabilities assumed by Lessee under this Lease. (9) f^^leasees' Insurance. Lessee shall require any sublessee, and any sub-sublessee, of all or any portion of the _ E-5 owiim 1Y Premises to Pfovide the insurance coverage described in this Insurance Exhibit prior to occupancy of the Premises. <10} Waiver of Snhy^^y^^^p Lessee and the County waive all rights to recover against each other or against any other tenant or occupant of the building, or against the officers, directors shareholders, partners, employees, agents or invitees of each ' other or of any other occupant or tenant of the building, from any Claims (as defined in the Article 12 (INDEMNITY AMD INSURANCB)) , against either of them and from amy damages to the fixtures, personal property. Lessee's improvements, and alterations of either the County or Lessee in or on the Premises to the extent that the proceeds received from any insurance carried by either the County or Lessee, other than proceedtf from any program of self-insurance, covers any such Claim or damage Included in any policy or policies of insuramce provided by Lessee under this Insurance Exhibit shall be a standard %faiver of rights of subrogation against the County by the insurance Iconmany issuing said policy or policies. i^.7W7i.v: • E-6 oviim EXBIBIT F MCCLELLAN-PALOMAR AIRPORT THE COUNTy OF SAN DIEGO REQUIRED SUBLEASE PROVISIONS The following paragraphs must appear in each sublease of the Premises. Paragraphs marked with an asterisk (*) must be used exactly as written, 1. -Forties. This Sublease is entered into by and between hereinafter called "Sublessor", and , hereinafter-called "Sublessee", as a Sublease under the Palomar Transfer Station Lease Agreement datedi , 19 (the "Master Lease"), also Icnown as the County of San Diego Contract No. > Sublessor, under this Sublease, is Lessee and the County of San Diego is Lessor under said Master Lease. 2. ExmiMStA' Sublessor leases to Sublessee arid Sublessee hires the following described Premises together with the appurtenances, situated in the County of San Diego, State of Califomia: Said p.,.^*"-* are ahown on Exhibit A attaefaed hewseo;^ 3. Tfra. The term of this Sublease Agreement shall be for" , commencing « 15 » aad rArminatinq . > unless sooner terminated as provided herein. (Note: Termination date of Sublease cannot exceed expiration date of Master Lease.) 4. Rental. Sublessee shall pay to Sublessor as rent for the Premises in advance on the first day of each calendar month of the term of this Sublease without deduction, offset, prior notice or demand, in lawful money of the United States, the sum Qf Dollars and Cents (S ). If the commencement date is not the first day of the month, or if the Sublease termination date is not the last day of the month, a prorated month installment shall be paid at the then current rate for the fractional month during which the Sublease commences and/or terminates. Receipt of $ —^ is hereby acknowledged for rental for the first month, and the additional amount of $ as non-interest bearing security for performance under this Sublease. In the event Sublessee has performed all the terms and conditions of this Sublease throughout the term, upon Sublessee vacating the Premises, the amount paid as a security deposit shall be retumed to Sublessee after first deducting any sums owning to Sublessor. LAj-wni.vi p.X OI/tSMT 5. SflH. Sublessee shall use the Premises for uees specified in the Master Lease, generally described as the office operations of a solid waste collection business, a recycling facility, and a trash transfer station, including office, repair and storage facilities for equipment used in collecting and transferring trash, and for no other purposes without prior written consent of Sublessor. Sublessee's business shall be established and conducted throughout the term hereof in a first class manner. Sublessee shall not use the Premises for, or carry on, or permit to be carried on, amy offensive, noisy or dangerous trade, business, manufacture or occupation. lademiflgAfclsm. sublessee shall indeimify and save harmless the County of San Diego, it officers, agents, and ezrqployees from and against any and all' claims, demands, liabilities, or loss of any kind or nature which the County, its officers, agents, or employees may sustain or incur, or Which may be imposed upon them or amy of them for injury to, or death or, persons or damage to property, as a result of, arising out of, or in any manner connected with this Sublease or with occupancy amd use of the Subleased Premises by Sublessee, its officers, agents, employees, licensees, patrons or visitors except as attributable to am act or omission of the County. Sublessee further agrees to pay amy and all costs and expenses, including, but not limited to, court costs amd reasonaOsle attorneys' fees, incurred by the County on account of any such claims, demands, or liabilities. *7. Provisions Constituting Subleaae. This Sublease is subject to all of the terms amd conditions of the Master Lease. Sublessee shall assume amd perform the obligations of Sublessor and Lessee in said Master Lease, to the extent said terms and conditions are applicable to the Premises subleased pursuamt to this Sublease. Sublessee shall not coxnnit or permit to be committed on the Premises any act or omission which shall violate amy term or condition of the Master Lease. In the event of the termination of Sublessor's interest as Lessee under the Master Lease for any reason, thsn this Sublease shadl terminate coincidental'ly therewith without any liability of Sublessor and the County to Sublessee. Sublessee hereby ac)cnowledges and agrees that Sublessee %raives all rights to amy form of Relocation Assistance provided for by locaa. State, or Federal law that Sublessee--may be entitled to by reason of this Sublease. •8. Federal Aviation Administration Reouir«|^g^tg In the event there is any conflict between the provisions in this Clause and the other provisions in this Sublease, the provisions in this Clause shall take precedence. a. Sublessee, for itself, its heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant amd agree as a covenant mnning with the land that in the event facilities are constmcted, maintained, or otherwise operated on the said UA3-WS77I.V3 F-2 OI/lt/fT Cj9 property described in this Sublease for a purpose for which a DOT program or activity is extended or for another purpose involving the provision of similar services or benefits, Sublessee shall maintain and operate such facilities and services in compliance with all other requirements in^osed pursuant to Title 49, Code of Federal Regulations,- DOT, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-Assisted Programs of the Department of Transporta^tion-Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be aunended. b. Sublessee, for itself, its personal representatives, successors in interest, and assigns, as a pairt of the consideration hereof, does hereby covenant and agree as a covenamt running with the lamd that: (i) no person on the grounds of race, color, or national origin shall be excluded from' participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities. (2) that in the constmction of amy inprovements on, over, or under such land and the fumishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subject to discrimination, (3) that Sublessee sliall use the Premises in compliance with all other requirements inqposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Pairt 21, Nondiscrimination 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 beaamended. c. That in the event of breach of any of the above nondiscrimination covenants. Sublessor shall have the right to terminate this Sublease and to re-enter and repossess said lamd and the facilities thereon, amd hold the same as if said Sublease had never been made or issued. This provision does not become effective until the procedures of 49 CFR Part 21 are followed and coixpleted including expimtion of appeal rights. d. Sublessee .shall fumish its accommodations amd/or services on a fair, equal and not unjustly discriminatory basis to all users thereof and it shall cliarge fair, reasonable and not unjustly discriminatory prices for each unit or service; PROVIDED, THAT Sublessee may be allowed to make reasonadDle and nondiscriminatory discounts, rebates or other similar type of price reductions to volume purchasers. e. Non-compliance with Provision d above shall constitute a material breach thereof and in the event of such non-con^Jliance Sublessor shall have the right to terminate this Sublease and the estate hereby created without liability therefore, or at the election of Sublessor, the County or the United States, any or all said entities shall have the right to judicially enforce said Provisions. LAJ.W77I.V2 F-3 ouitm f. Sublessee agrees that it shall insert the above five (5) Provisions in any sub-sublease, contract or agreement by which said Sublessee grants a right or privilege to any person, firm or corporation to render accommodations amd/or services to the public on the Premises herein subleased. g. Sublessee assures that it will undertake an affirmative action program as required by 14 CFR Part 1S2, Subpart E, to insure that no person shall, on the grounds of race, creed, color, national origin, or sex be excluded from participating in amy employment activities covered in 14 CFR Part 152, Subpart E. Sublessee assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. Sublessee assures that it will require that its covered suborganizations provide assurances to Sublessee that they similarly will undertaUce affirmative action programs and that they will require assurance from their suborgamizations, ai i required by 14 CFR Part 152, Subpart B, to the same effort. h. the County reserves ths right to further develop or improve the landing area of the Airport as it sees fit, regardless of the desires or view of Sublessee, and without , interference or hindrance. i. the County reserves the right, but shall not be obligated to Sublessee, to maintain and keep in repair the landing area of the Airport amd all publicly-owned facilities of the Airport, together with the right to direct amd control all activities of Sublessee in this regard. j. This Subleass shall be subordinate to the provisions and requirements of amy existing or future agreement between the County and the United States, relative to the development, operation or maintenance of the Airport. k. There is hereby reserved to the County, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Premises herein subleased. This public right of flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used for navigation or flight through the said airspace or lamding at, taking off from or operation on the Airport. 1, Sublessee agrees to comply with the notification and review requirements covered in Part 77 of the Federal Aviation Regulations in the event future constmction of a building is planned for the subleased Premises, or in the event of any planned modification or alteration of amy present or future building or stmcture situated on the subleased Premises. LAJ.W77I.V1 F-4 m. Sublessee by accepting this expressly agrees for itself, its successors and assigns that it will not erect nor permit the erection of any stmcture or object nor peannit the growth of any tree on the land subleased hereunder that conflicts with Part 77 of the Federal Aviation Regulations. In the event the aforesaid covenants are breached, the County and/or Sublessor reserve the right to enter upon the land subleased hereunder amd to remove the offending stmcture or object and cut the offending tree, all of which shall be at the expense of Sublessee. n. Sublessee by accepting this Sublease agrees for itself, its successors and assigns that it will not make use of the subleased Premises in any manner which might interfere with the landing and taking off of aircraft from the Airport or otherwise constitute a hazasnl. In the event the aforesaid covenant is breached, the County and/or Sublessor reserve the right to enter upon the Premises hereby subleased and caifse t^he aibatement of such interference at the expense of Sublessee. o. It is understood and agreed that nothing herein contained shall be constmed to grant or authorize the granting of an exclusive right within the meaning of Section 308a of the Federal Aviation Act of 1958 (49 U.S.C. 1349a). p. This Sublease and all the provisions hereof shall be subject to whatever right the United States Govemment now has or in the future may have or acquire, affecting the control, operation, regulation and taking over of said Airp9»t^or...the exclusive or non-exclusive use of the Airport by the*^n±te*' States during the time of war or national emergency, *9. &iaaR. Sublessee shall not erect nor cause to be erected any sign on the Subleased Premises without the prior written approval of the County. A written request for sign approval must include the size, type, color and location of the proposed sign and said application must be concurred in by Sublessor before submittal to the County. *10. gt^stanee Abuse. Sublessee and its ea?)loyees and agents shall not use or knowingly allow the use of the subleased plemises for the purpose of unlawfully driving a motor vehicle or aircraft under the influence of an alcoholic bevemge or any dmg or for the purpose of unlawfully selling, serving, using, storing, transporting, keeping, manufacturing or giving avray alcoholic beverages or any controlled substance, precursor, or- analog specified in Division 10 of the Califomia Health and Safety Code, and violation of this prohibition shall be grounds for immediate termination of this Sublease. LA3-7*377I.V2 *^ ^ OO This Sublease entered into this SUBLESSEE: SUBLESSOR: day of October 19 . By. (Title) 'By. (Title) By. (Title) By. (Title) Address Address LA3.7«J77l.v: S-l 1 EXHIBIT B 2 SUBLEASE AND DISPOSAL AGREEMENT BETWEEN ALLIED WASTE 3 INDUSTRIES, INC. AND WASTE MANAGEMENT, INC. 70017373VI 10^ EXHIBIT B TRANSFER STATION SUBLEASE [See attached] (o3 EXHIBIT B SUBLEASE AGREEMENT FOR PALOMAR TRANSFER STATION 1. Parties. This Sublease Agreement ("Sublease" or "Agreement**) is entered into as of June 1,2002 by and between The City of Carlsbad, a municipal corporation of the State of Califomia ("Sublessor'*), and Palomar Transfer Station, Inc., a Califomia corporation ("Sublessee,**) as a sublease under a certain Palomar Transfer Station Lease Agreemeiit, APN # 97-0085-Al, with County of San Diego, dated October 31, 1997 (the "Master Lease**). Sublessor (as successor-in-interest by assignment of the Master Lease from Sublessee) is Lessee and the County of San Diego is Lessor under said Master Lease (hereinafter "Master Lessor" or the "County**). Capitalized terms not otherwise defined herein shall have the meanings given in the Transfer Station Agreement (defined below). 2. Premises. a. Lease of Premises. Sublessor leases to Sublessee and Sublessee hires the following described premises (the "Premises**) together with all qjpurtenances thereto, situated in the Coimty of San Diego, State of Califomia and more particularly described as follows: The real property commonly known as San Diego County Assessor's Parcel Number 97-0085A1 as more particularly described and depicted on the attached Exhibit A. comprising tiie entirety of the premises subject to the Master Lease. b. Condition of Premises. Sublessor shall assign to Sublessee all of Sublessor*s rights and remedies against and with respect to any prior tenant, subtenant or occupant (collectively, a "Prior Tenant**) of the Premises, to the extent such Prior Tenant is, or may be, liable or otherwise responsible for, by act or omission, (i) any failure of the Premises to comply with ^plicable law or regulation, mcluding. without limitation, any conditional use permit applicable to the use of the Premises as a reftise and waste transfer station, or (ii) any material defect, latent or patent, in the Premises, in each case as of the commencement of the term of this Sublease. Sublessor shall execute and deliver to Sublessee such additional instruments and documentation, including assignments of claims and rights, as may be reasonably required by Sublessee in order to eflfect the assignment of rights and remedies contemplated hereunder. 3. Term. The term of this Sublease shall conmiencc on June 1,2002 for a period of time equal to the PTS Operating Period, provided the CTS Operating Period has not commenced, as each such terai is detliied m, ancTsubjeCC to all the wimu and liiOViTions of, that certain Agreement for Transfer and Disposal Services, of even date herewith, by and between Sublessor and Sublessee (the 'Transfer Station Agreement**); provided, however, for avoidance of doubt, the term of this Sublease shall continue for such period of time as Sublessee is permitted to occupy the Premises as contemplated under the Transfer Station Agreement and shall be for a term of not less than ten (10) yean?; provided fitftfaer. that the term of this Sublease shall in no event exceed the expiration of the Master Lease. 700l7n3v2 4. Rental. Sublessee shdl pay to Sublessor as monthly rent for the Premises, in advance on the first day of each calendar month of the term of this Sublease without deduction, offset, prior notice or demand, in lawfiil money of the United States, the sum of One Dollar ($1.00). If the commencement date is not the first day of the month, or if the Sublease termination date is not the last day of the month, a prorated month instalbnent shall be paid at the then current rate for the firactional month during which the Sublease commences and/or terminates. Receipt of $ 1.00 is hereby acknowledged for rental for the first month. 5. U§g. Sublessee shall use the Premises for operation of a rcfiise and waste transfer station and any other uses peimitted under the Master Lease, and, if ^plicable, in compliance with the terms and conditions of ihe conditional use permit issued by Sublessor for the Premises, and for no other purposes without the prior written consent of Sublessor. Sublessee*s business shall be established and conducted throughout the term hereof in a first class manner. 6. Indemnifiratinn Sublessee shall indemnify and save harmless the County and Sublessor, as applicable, and their respective officers, agents, and employees from and against any and all claims, demands, liabilities, or loss of any kind or nature y/bich the County and Sublessor, as applicable, and their respective oflRcers, agents, or employees may sustain or incur, or which may be imposed upon them or any of them for injury to, or death or, persons or damage to property, as a result of, arising out of, or in any manner connected with this Sublease or with occupancy and use of the Premises by Sublessee, its officers, agents, employees, licensees, patrons or visitors except as attributable to an act or omission of the County or Sublessor, as applicable. Sublessee further agrees to pay any and all costs and expenses, including, but not limited to, court costs and reasonable attorneys' fees, incurred by the County or Sublessor, as applicable, on account of any such claims, demands, or liabilities. ., Provisions Constj^urinff ^y^lf This Sublease is subject to all of the terms and conditions of the Master Lease. Sublessee shall assume and perform the obligations of Sublessor and Lessee in said Master Lease, to the extent said terms and conditions are applicable to the Premises subleased pursuant to this Sublease. Sublessee shall not commit or permit to be committed on the Premises any act or omission which shall violate any term or condition of the Master Lease. In the event of the termination of Sublessor's mterest as Lessee under the Master Lease for any reason, then, except as otherwise consented to by the County, this Sublease shall terminate concurrently therewith without any liability of Sublessor (except to die extent such tennination is due to Sublessor's default under the Master Lease not arising from Sublessee's failure to perform under this Sublease) and the County to Sublessee. Sublessee hereby acknowledges and agrees that Sublessee waives all rights to any fonn of relocation assistance provided for by local. State, or Federal law that Sublessee may be entitled to by reason of this Sublease. ^* Fe4eral Aviation Administration Requirements In the event there is any conflict between the provisions in this clause and the other provisions in this Sublease, the provisions in this clause shall take precedence. a. Sublessee, for itself, its heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running with the land that m the event facilities are constructed, maintained, or 700l7n3v2 I otherwise operated on the said property described in this Sublease for a purpose for which a DOT (Department of Transportation) program or activity is extended or for another purpose involving the provision of similar services or benefits. Sublessee shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Titie 49, Code of Federal Regulations, DOT, Subtitie A, Office of the Secretary, Part 21, Nondiscrimination in Federally- Assisted Programs of the Department of Transportation- Effectuation of Titie VI of tiie Civil Rights Act of 1964, and as said Regulations may be amended. b. Sublessee, for itself; its personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running witii the land that: (I) no person on the grounds of race, color, or national origin shall be excluded fmm participation in, denied the benefits of, or be otherwise subjected to discrimination in tiie use of said facilities, (2) that in the construction of any improvements on, over, or under such land and the fumishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otiierwisc be subject to discrimination, (3) tiiat Sublessee shall use tiie Premises m compliance with all other requirements imposed by or pursuant to Titie 49, Code of Federal Regulations, Department of Transportation, Subtitie A, Office of tiie Secretary, Part 21, Nondiscrimination in Feder^dly-Assisted Programs of tiie Department of Transportation-Effectuation of Titie VI of tiie Civil Rights Act of 1964, and as said Regulations may be amended. c. That in the event of breach of any of the above nondiscrimination covenants. Sublessor shall have tiie right to terminate tiiis Sublease and to re-enter and repossess said land and tiie facilities tiiereon, and hold tiie same as if said Sublease had never been made or issued. This provision does not become effective until the procedures of 49 CFR Part 21 are followed and completed including expiration of appeal rights. d. Sublessee shall fumish its accommodations and/or services on a fair, equal and not unjustiy discriminatory basis to all users thereof and it shall charge fair, reasonable and not unjustiy discriminatory prices for each unit or service; PROVIDED, THAT Sublessee may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar type of price reductions to volume purehasers. e. Non-compliance with provision (d) above shall constitute a material breach thereof and m the event of such non-compliance Sublessor shall have the right to terminate this Sublease and the estate hereby created without liability tiierefore, or at the election of Sublessor, the County or the United States, any or all said entities shall have the right to judicially enforce said provisions. f. Sublessee agrees tiiat it shall insert the above five (5) provisions in any sub-sublease, contract or agreement by which said Sublessee grants a right or privilege to any person, firm or corporation to render accommodations and/or services to the public on the Premises herein subleased. g. Sublessee assures that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to insure tiiat no person shall, on tiie grounds of race. 700l7U3v2 creed, color, natior*al origin, or sex be excluded from participating in any employment activities covered in 14 CFR Part 152, Subpart E. Sublessee assures that no person shall be excluded on these grounds firom participating in or receiving the services or benefits of any program or activity covered by this subpart. Sublessee assures that it will require that its covered suborganizations provide assurances to Sublessee that tiiey similarly will undertake affirmative action programs and that they will require assurance from their suborganizations, as required by 14 CFR Part 152, Subpart E, to tiie same effort. h. The County reserves the right to fiirther develop or improve the landing area of the Airport (as defined in tiie Master Lease) as it sees fit, regardless of the desires or view of Sublessee, and without interference or hmdrance. i. The County reserves the right, but shall not be obligated to Sublessee, to maintain and keep in repair tiie landing area of the Airport and all publicly owned facilities of the Airport, together with the right to direct and control all activities of Sublessee m this regard. j. This Sublease shall be subordinate to the provisions and requirements of any existing or future agreement between the County and the United States, relative to the development, operation or maintenance of the Airport. k. There is hereby reserved to the County, its successors and assigns, for the use and benefit of the public, a right of flight for tiie passage of aircraft in tiie airspace above tiie surfiice of the Premises herein subleased. This public right of flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used for navigation or flight through the said airspace or landing at, taking ofif from or operation on the Airport. 1. Sublessee agrees to comply with tiie notification and review requirements covered in Part 77 of the Federal Aviation Regulations in the event future construction of a building is planned for the subleased Premises, or m the event of any planned modification or alteration of any present or future building or structure situated on tiie subleased Premises. m. Sublessee by accepting this expressly agrees for itself, its successors and assigns that it will not erect nor permit the erection of any structure or object nor pennit the growtii of any tree on the land subleased hereunder that conflicts with Part 77 of the Federal Aviation Regulations. In the event the aforesaid covenants are breached, the County and/or Sublessor reserve the right to enter upon the land subleased hereunder and to remove the offending stmcture or object and cut the offending tree, all of \^ch shall be at the expense of Sublessee. n. Sublessee by accepting tiiis Sublease agrees for itself, its successors and assigns that it will not make use of the subleased Premises in any manner which might interfere with the landmg and taking off of aircraft from the Airport or otherwise constitute a hazard. In the event the aforesaid covenant is breached, the County and/or Sublessor reserve the right to enter upon tiie Premises hereby subleased and cause tiie abatement of such interference at tiie expense of Sublessee. 70017U3v2 10^ o. It is understood and agreed tiiat nothing herein contained shall be construed to grant or autiiorize tiie granting of an exclusive right witiiin tiie meaning of Section 308a of tiie Federal Aviation Act of 1958 (49 U.S.C. 1349a). p. This Sublease and all tiie provisions hereof shall be subject to whatever right tiie United States Government now has or in tiie future may have or acquire, affecting tiie control, operation, regulation and taking over of said Airport or tiie exclusive or non-exclusive use of tiie Airport by tiie United States during tiie time of war or national emergency. 9. Signs. Sublessee shall not erect nor cause to be erected any sign on the Premises witiiout tiie prior written approval of tiie County. A written request for sign approval must include tiie size, type, color and location of tiie proposed sign and said application must be concurred in by Sublessor before submittal to the County. 10. Substance Abuse. Sublessee and its employees and agents shall not use or knowingly allow tiie use of tiie subleased Premises for tfie purpose of unlawfuUy driving a motor vehicle or aircraft under tiie influence of an alcoholic beverage or any drug or for tiie purpose of unlawfiilly selUng, serving, using, storing, transporting, keeping, manufacturing or giviiig away alcoholic beverages or any controlled substance, precursor, or analog specified in Division 10 of tiie Califomia Healtii and Safety Code, and violation of tiiis prohibition shall be grounds for inunediate tennination of this Sublease. 11. Prime Lease. Sublessor, as Lessee under tiie Master Lease represents and warrants to Sublessee tiiat, to Sublessor's knowledge as of tiie date of tiie commencement of tiie term of tiiis Sublease: (a) Sublessor has deUvered to Sublessee Ml and complete copies of tiie Master Lease and all otiier related agreements between Sublessor and Master Lessor; (b) tiie Master Lease is in fiill force and effect and (c) no event of default has occuned under tiie Master Lease on tiie part of Sublessor or Master Lessor and, to Sublessor's knowledge, no event has occuired and is continuing which would constitute an event of default but for tiie requirement of tiie giving of notice and/or tiie expiration of tiie period of time to cure under, or witii respect to, any of such agreements. 12 Q^ietEniovment. Sublessor has fiill power and autiiority to enter into tiiis Sublease subject to tiie consent of Master Lessor. So long as Sublessee is not in default m tiie perfomiance of its covenants and agreements in tiiis Sublease, Sublessee's quiet and peaceable wijoyment of tiie Premises shall not be disturbed or mtcrfered witii by Sublessor, or by any person claiming by, through, or under Sublessor. 13. Further Provisiom Regarding Sublease. Sublessee agrees tiiat it will provide and maintain tiie insurance coverage reqmred of Sublessor pursuant to tiie Master Lease witii respect to tiie Premises. Each party agrees tiiat it will not, by its act or omission to act, cause a default under tiie Master Lease. In fiirtfierance of tiie foregoing, tiie parties hereby confirm and agree, each to tiie otiier, tiiat it is not practical in tiiis Sublease to enumerate all of tiie rights and obligations of tiie various parties under tiie Master Lease and specificaUy to allocate tiiose nghts and obligations in tiiis Sublease. Accordingly, in order to afford to Sublessee tiie benefits of tins Sublease and of tiiosc provisions of tiie Master Lease which by tiiehr nature are mtended to benefit tiie party in possession of tiie Premises, and in order to protect Sublessor against a default [ 0^ 70017U3V2 by Sublessee which might cause a default or event of default by Sublessor under tiie Master Lease: a. Except as otiierwise expressly provided herein. Sublessor shall perform its covenants and obligations under tfie Master Lease which do not require for tiieir perfomiance possession of tiie Premises and which are (i) not reasonably anticipated to be performed by Sublessee or (ii) not otiierwise to be performed hereunder by Sublessee on behalf of Sublessor. b. Except as otiierwise expressly provided herein. Sublessee shall perform all affirmative covenants and shall refirain from performing any act is prohibited by tiie negative covenants of tiie Master Lease; where tiie obligation to perfonn or refrain from performmg is by its nature imposed upon tiie party in possession of tiie Premises. c. Sublessor shall not agree to an amendment to tiie Master Lease which might have an adverse effect on Sublessee's use or occupancy of tfie Premises, increase Sublessee's costs under this Sublease or have an adverse effect on tiie use of tiie Premises for tiieir intended purpose, unless Sublessor shall first obtain Sublessee's prior written approval tiicreof, y/bich approval by Sublessee shall not be unreasonably witiiheld or delayed. Reversion to Sublessee of Sublesso^'j^ Interest in Master If tiiis Sublease is ever terminated or expires otiier tiian as a result of default by Sublessee, all right, titie and interest in tiie Master Lease shall revert to Sublessee; provided, however, tiiat Sublessor shall cure any defaults and mdemnify Sublessee for any liabilities arising during tiie period prior to such reveraon, otiier tiian such defaults and liabilities caused by Sublessee's own breach or failure to perform. 15. Additional Provisions. a^ Governing t^w. This Sublease shall be governed by and constmed in accordance witfi tiie laws of tiie State of California. h. Wajvgrs. No waiver or breach of any covenant or provision shall be deemed a waiver of any otiier consent or provision, and no waiver shall be valid unless in writing and executed by the waiving party. c. Construction. Headings are used solely for tiie parties'convenience, are not a part of tiiis Sublease, and shall not be used to interpret tiiis Sublease. This Sublease shall not be constmed as ifit had been prepared by one of tiie parties, but rather as if botii parties have prepared it 70017J13V2 (0^ This Sublease Agreement is entered as of the date first set forth above. SUBLESSEE: SUBLESSOR: PALOMAR TRANSFER STATION, INC. CITY OF CARLSBAD, a municipal corporation Address: 8364 Claremont Mesa Blvd. San Diego, CA 92111 Attn: General Manager By:_ Titie: By:^ Titie: Address: 1200 Carlsbad Village Drive Carlsbad, CA 92008 Atta: City Manager 70017!13v2 110 EXHIBIT C COUNTY OF SAN DIEGO REQUIRED SUBLEASE PROVISIONS 1. Indemnity. County shall not be liable for, and CWM, as sublessee, shall defend and indemnify County and tiie employees and agents of County (collectively "County Parties"), against any and all claims, demands, liability, judgments, awards, fines, mechanics' liens or other liens, labor disputes, losses, damages, expenses, charges or costs of any kind or character, including attomeys' fees and court costs (hereinafter collectively referred to as "Claims"), related to this Agreement or CWM's use or occupancy of the Sublease Premises and arising either directly or indirectly from any act, error, omission or negligence of CWM or its sublessees, licensees, agents, servants or employees, including, without limitation. Claims caused by the concurrent negligent act, error or omission, whether active or passive, of County Parties. CWM shall have no obligation, however, to defend or indemnify County Parties from a Claim if it is determined by a court of competent jurisdiction that such Claim was caused by the sole negligence or willfiil misconduct of County Parties. 2. Provisions Constituting Sublease. This Agreement is subject to all of the terms and conditions of the Transfer Station Master Lease. CWM shall assume and perform the obligations of Palomar and Lessee in the Transfer Station Master Lease, to the extent such terms and conditions are applicable to the Sublease Premises subleased pursuant to this Agreement. CWM shall not commit or permit to be committed on the Sublease Premises any act or omission which shall violate any term or condition of the Transfer Station Master Lease. In the event of the termination of the City's interest as Lessee under the Transfer Station Master Lease or Palomar's interest as Sublessee under the Transfer Station Sublease for any reason, then this Agreement shall terminate coincidentally therewith without any liability of Palomar, County or City to CWM. 3. CWM's Waiver and Release of Relocation Benefits. In consideration of Ckjunty's consent to this Agreement, CWM hereby waives any and all rights it may now have, or may hereafter obtain, to relocation benefits ("Relocation Benefits") under the Federal Uniform Relocation Assistance Act (42 U.S.C. §§ 4601 et seq.) and/or the Califomia Relocation Assistance Law (Cal. Gov. Code, §§ 7260 et seq.), arising out of the County's assertion or exercise of its contractual rights to terminate the Lease or this Agreement pursuant to its terms, whether or not such rights are contested by CWM or any other entity, and releases County from any liability for payment of such Relocation Benefits. CWM shall in the fiiture execute any fiutiier documentation of the release and waiver provided hereby as County may reasonably require. 4. Federal Aviation Administration Requirements. In tiie event there is any conflict between the provisions in this Clause and the otiier provisions in this Agreement, the provisions in this Clause shall take precedence. a. CWM, for itself, its heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant mnning with the land that in the event fecilities are constmcted, maintained, or otherwise operated on the said property described in this Agreement for a purpose for which a DOT program or activity is extended or for another purpose involving the provision of similar services or benefits, CWM shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-Assisted Programs of the Department of Transportation-Effectuation of Titie VI of tiie Civil Rights Act of 1964, and as said Regulations may be amended. b. CWM, for itself, its personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant ranning with the land that: (1) no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities, (2) that in the constmction of any improvements on, over, or under such land and the fumishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subject to discrimination, (3) that CWM shall use the Sublease 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, Nondiscrimination in Federally-Assisted Programs of the Department of Transportation-Effecmation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. c. That in the event of breach of any of the above nondiscrimination covenants, Palomar shall have the right to terminate this Agreement and to re-enter and repossess said land and the facilities thereon, and hold the same as if said Agreement had never been made or issued. This provision does not become effective until the procedures of 49 CFR Part 21 are followed and completed including expiration of appeal rights. d. CWM shall fumish its accommodations and/or services on a fair, equal and not unjustly discriminatory basis to all users thereof and it shall charge fair, reasonable and not unjustiy discriminatory prices for each unit or service; provided, that CWM may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar type of price reductions to volume purchasers. e. Non-compliance with Provision d above shall constitute a material breach thereof and in the event of such non-compliance Palomar shall have the right to terminate this Agreement and the estate hereby created without liability therefore, or at the election of Palomar, County or the United States, any or all said entities shall have tiie right to judicially enforce said Provisions. £ CWM agrees that it shall insert the above five Provisions in any sub-sublease by which said CWM grants a right or privilege to any person, firm or corporation to render accommodations and/or services to the public on the Sublease Premises herein subleased. C-2 11^ g. CWM assures that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to insure that no person shall, on tiie grounds of race, creed, color, national origin, or sex be excluded from participating in any employment activities covered in 14 CFR Part 152, Subpart E. CWM assures tiiat no person shall be excluded on these grounds from participating in or receiving tiie services or benefits of any program or activity covered by this subpart. CWM assures tiiat it will require that its covered sub-organizations provide assurances to CWM that they similarly will undertake affirmative action programs and tiiat they will require assurance from their sub-organizations, as required by 14 CFR Part 152, Subpart E, to the same effort. h. County reserves the right to further develop or improve the landing area of the Airport as it sees fit, regardless of the desires or view of CWM, and without interference or hindrance. i. County reserves the right, but shall not be obligated to CWM, to maintain and keep in repair the landing area of the Airport and all publicly-owned facilities of the Airport, together with the right to direct and control all activities of CWM in this regard. j. This Agreement shall be subordinate to the provisions and requirements of any existing or fumre agreement between County and tiie United States, relative to the development, operation or maintenance of the Airport. k. There is hereby reserved to County, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Sublease Premises herein subleased. This public right of flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used for navigation or flight through the said airspace or landing at, taking off from or operation on the Airport. I. CWM agrees to comply with the notification and review requirements covered in Part 77 of the Federal Aviation Regulations in the event fumre constmction of a building is planned for the Sublease Premises, or in the event of any planned modification or alteration of any present or fiitare building or structure situated on the Sublease Premises. m. CWM by accepting this expressly agrees for itself, its successors and assigns that it will not erect nor pennit the erection of any stracmre or object nor permit the growth of any tree on the land subleased hereunder tiiat conflicts with Part 77 of the Federal Aviation Regulations. In the event the aforesaid covenants are breached, County and/or Palomar reserve the right to enter upon the land subleased hereunder and to remove the offending stmcture or object and cut the offending tree, all of which shall be at tiie expense of CWM. n. CWM by accepting this Agreement agrees for itself, its successors and assigns that it will not make use of the subleased Sublease Premises in any manner which might interfere with the landing and taking off of aircraft from the Airport or otherwise constitate a hazard. In the event the aforesaid covenant is breached. County and/or Palomar reserve the right to enter upon the Sublease Premises hereby subleased and cause the abatement of such interference at the expense of CWM. C-3 \ 13 o. It is understood and agreed that nothing herein contained shall be constmed to grant or authorize the granting of an exclusive right within the meaning of Section 308a of the Federal Aviation Act of 1958 (49 U.S.C. 1349a). p. This Agreement and all the provisions hereof shall be subject to whatever right the United States Govemment now has or in the future may have or acquire, affecting the control, operation, regulation and taking over of said Airport or the exclusive or non-exclusive use of the Airport by the United States during the time of war or national emergency. 5. Signs. CWM shall not erect nor cause to be erected any sign on the Sublease Premises without the prior written approval of the County Airports Director. A written request for sign approval must include the size, type, color and location of the proposed sign and said application must be concurred in by Palomar before submittal to County Airports Director. 6. Substance Abuse. CWM and its employees and agents shall not use or knowingly allow the use of the Sublease Premises for the purpose of unlawfully driving a motor vehicle or aircraft under the influence of an alcoholic beverage or any drag or for the purpose of unlawfully selling, serving, using, storing, transporting, keeping, manufacmring or giving away alcoholic beverages or any controlled substance, precursor, or analog specified in Division 10 of the Califomia Health and Safety Code, and violation of this prohibition shall be grounds for immediate termination of this Agreement. 7. County's Right of Access. a. County's Right to Enter the Premises. County, its agents, employees, and contractors may enter the Premises at any time in response to an emergency, and at reasonable hours to (a) inspect the Sublease Premises, (b) exhibit the Sublease Premises to prospective purchasers or lessees, (c) determine whether City is complymg with its obligations under tiie Transfer Station Master Lease (including its obligations with respect to compliance with Hazardous Materials Laws), (d) supply cleaning service and any other service that the Transfer Station Master Lease requires (Iloimty to provide, (e) post notices of nonresponsibility or similar notices, or (f) make repairs that the Transfer Station Master Lease requires County to make, or make repaks to any adjoining space or utility services, or make repairs, alterations, or improvements to any other portion of the Sublease Premises; provided, however, that all work will be done as promptly as reasonably possible and so as to cause as little interference to CWM as reasonably possible. b CWM's Waiver of Damages Claims. Sublessee waives any claim of injury or inconvenience to CWM's business, interference with CWM's business, loss of occupancy or quiet enjoyment of the Sublease Premises, or any other loss occasioned by such entry. If necessary, CWM shall provide County with keys to unlock all of tiie doors in the Sublease Premises (excluding CWM's vaults, safes, and similar areas designated in writing by CWM in advance). County will have tiie right to use any means that County may deem proper to open doors in the Sublease Premises and to the Sublease Premises in an emergency. No entry to the Sublease Premises by County by any means will be a forcible or unlawful entry into the Sublease C-4 Premises or a detainer of the Sublease Premises or an eviction, actual or constractive, of CWM from the Sublease Premises, or any part of the Sublease Premises, nor will the entry entitle CWM to damages or an abatement of rent or other charges that this Agreement requires CWM to pay. C-5 EXHIBIT D COUNTY OF SAN DIEGO CONSENT TO SUB-SUBLEASE WHEREAS, tiie COUNTY OF SAN DIEGO, hereinafter referred to as "County," has leased a portion of McClellan-Palomar Airport (the "Property") to PALOMAR TRANSFER STATION, INC., a Califomia corporation, by lease known as PALOMAR TRANSFER STATION LEASE AGREEMENT, APN # 97-0085-Al, entered into between County and Palomar Transfer Station, hic. on October 31,1997 and hereinafter referred to as "Master Lease"; and WHEREAS, said Master Lease was assigned on June 1,2002 to CITY OF CARLSBAD, a municipal corporation, hereinafter referred to as "Lessee"; and WHEREAS, Lessee has subleased tiie Property to PALOMAR TRANSFER STATION, INC., a Califomia corporation, hereinafter referred to as "Sublessee", by sublease known as SUBLEASE AGREEMENT FOR PALOMAR TRANSFER STATION, entered into between Lessee and Sublessee on June 1,2002 and consented to by County on May 31, 2002; and WHEREAS, Sublessee desires to enter into that certain Sub-sublease and Disposal Agreement, to which this County of San Diego Consent to Sub-Sublease is attached as Exhibit "D", hereinafter referred to as "Sub-Sublease", with COAST WASTE MANAGEMENT, INC. a Califomia corporation, hereinafter referred to as "Sub-Sublessee", for a portion of the Property as more particularly described in the Sub-Sublease; and WHEREAS, said Master Lease provides that subleases shall not be effective until consented to in writing by County; and WHEREAS, the San Diego County Code of Administrative Ordinances, per Section 455.1 (AIRPORT OPERATIONS), autiiorizes the Director of the Department of Public Works, on behalf of the County as Lessor, to consent to such subleases; and WHEREAS, the Director of the Department of Public Works has delegated this authority to the Director of Airports, Department of Public Works of the County of San Diego. NOW, THEREFORE, County, acting through the Director of Airports, does hereby consent to said sub-sublease on this 9^ day of July 2012, witii the stipulation that in the event there is any conflict betweai said Sub-sublease and said Master Lease, the terms and conditions of said Master Lease shall prevail. COUNTY OF SAN DIEGO PETER DRINK^^ER, Director of Airports Department of Public Works \\(o sU3 FIRST AMENDMENT TO SUBLEASE AND DISPOSAL AGREEMENT This First Amendment to Sublease and Disposal Agreement is entered into and effective as of November 1, 2011 (the "First Amendment"), by and between PALOMAR TRANSFER STATION, INC., a Califomia corporation C'Palomar") and ALLIED WASTE INDUSTRIES, INC. ("AWI") and COAST WASTE MANAGEMENT, INC., a Califomia corporation, a Waste Management company, and its affiliates (collectively, "WMI") for the purpose of amending that certain Sublease and Disposal Agreement, dated May 31, 2000, entered into between Palomar, AWI, Coast and Waste Management, Inc. (the "WMI Sublease"), a copy of which WMI Sublease is attached hereto as Exhibit A. RECITALS A. Palomar, pursuant to the terms of that certain Sublease Agreement dated June 1,2002 (the "Transfer Station Sublease") between Palomar and the City of Carlsbad (the "City"), subleases that certain real property located in the City of Carlsbad, County of San Diego, Califomia identified as San Diego County Assessor's Parcel Number 97-0085-Al and known as the Palomar Facility (the "Property"), which consists, among other things, of a solid waste transfer station, office space, parking and maintenance facilities, all as more particularly described in the Transfer Station Sublease, a copy of which Transfer Station Lease is attached hereto as Exhibit B. B. The Transfer Station Sublease is subject to the terms and conditions of that certain Palomar Transfer Station Lease Agreement, dated October 31, 1997 (the "Master Lease"), between the County of San Diego and the City (by Assignment of Lease dated June 1,2002 between Palomar and the City), a copy of which Master Lease is attached hereto as Exhibit C. C. Palomar and WMI have entered into that certain Transport and Disposal Agreement, dated of even date herewith. D. Palomar and AWI are in the process of negotiating a renewal of that certain agreement entitled "Agreement for Transfer Station and Disposal Services between the City of Carlsbad and Palomar Transfer Station, Inc." ("Carlsbad Disposal Agreement") with the City of Carlsbad, and Coast is in the process of negotiating a renewal of that certain agreement entitled "Contract for the Provision of Solid Waste Services" ("Carlsbad Collection Agreement") with the City of Carlsbad. Both Parties believe in good faith that both agreements will be approved and executed prior to June 1, 2012. E. Landlord and Tenant are desirous of entering into this First Amendment for the purpose of extending the Term, providing for an adjustment in the rental rate to be paid during the Extended Term (as defined herein), and to modify the addresses for purposes of notice. NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged. Landlord and Tenant agree as follows: wn AGREEM.ENT 1. CONDITION PRECEDENT: This First Amendment is expressly conditioned upon, and shall be of no force and effect, unless WMI and the City of Carlsbad enter into a renewal of the Carlsbad Collection Agreement that becomes effective on or before June 1,2012 WMI may waive this condition precedent, upon written notice to Palomar and A WL This First Amendment is tlirther expressly conditioned upon, and shall be of no force and effect, unless both of the following occur: (a) Palomar, AWI and the City of Carlsbad enter into a renewal of the Carlsbad Disposal Agreement; and (b) Palomar, AWI and WMI enter into a "Transportation and Disposal Agreemenf regarding the delivery by WMI of certain San Diego County waste streams to Palomar and AWI, as more particularly described in that agreement. Palomar and AWI may waive this condition precedent, upon written notice to WMI. 2. TERM: The Tenn of the WMI Sublease shall be extended for a ten (10) year period beginning on June I, 2012 and mnning through and including May 31, 2022 provided the Transfer Station Sublease and the Master Lease are still validly existing (the "Extended Tenn"), at which time Tenant shall vacate the Premises in accordance with the terms and conditions of the WMI Sublease, as amended by this First Amendment. The WM I Sublease shall expire on June 1,2022 unless otherwise extended by written agreement of the parties hereto, or their successors or assigns, and there shall be no requirement of any written notice of termination to be provided by Palomar, AWI, Coast or WMI to effect such termination upon the expiration of the Extended Tenn. 3. RENT: The base monthly rent, effective June 1, 2012, and continuing for each and every month during the Extended Term, shall be the sum of Sixty Thousand and 00/100 Dollars ($60,000.00) (for an annual rent equal to Seven Hundred Twenty Thousand and 00/100 ($720,000.00)) due and payable in accordance with the tenns of the WMI Sublease. The Rent hereunder shall be subject to a percentage increase only based on the annual increases in collection rates applied by the City of Carlsbad pursuant to the Carlsbad Collection Agreement. However, under no circumstances shall the Rent hereunder be decreased if the rate applied by the City of Carlsbad pursuant to the Carlsbad Collection Agreement decreases, rather in that case there shall be no adjustment for the year in which there was no increase. 4. WMFS OBLIGATIONS: Section 3.1(a), lines 12 and 13 of the WMI Sublease are amended to delete "WMI may also deli ver additional amounts of Acceptable Waste, other than the Carlsbad Acceptable Waste, from time to time, in amounts to be detemiined by WMf 3* .F*]^]^S^* Section 5.1 of the WMI Sublease is deleted in its entirety and replaced with the following: For the acceptance, transportation and disposal by Palomar and AWI of Acceptable Waste generated in or collected in the City of Carlsbad and delivered to the Palomar Transfer Station pursuant to section 3.1, WMI, Coast and their affiliates will pay PTS the per ton fee established in the Carlsbad Agreement, as such fee is adjusted from time to time pursuant to the tenns of the Carlsbad Disposal Agreement, as it may be amended from time to time. Sections 5.2 and 5.3 of the WMI Sublease are deleted in their entirety. Section 5.5, lines 1 and 2 of the WMI Sublease are amended to delete "Section 5.3 and 5.4" and substitute "Section 5.1." 6. NOTICES: Notwithstanding anything to the contrary in the WMI Sublease, specifically including but not limited to the provision of Section 10.7, the address for notices to Palomar and AWI shall be as follows: If to Palomar/A WI: Palomar Transfer Station, Inc. Aliict! W aste Sen ices San Dioiio S.>b4 ( huvinoiii Mesa Houle\urd San Diciso. t'A ^)2ni Attn: James T. Ambroso, Vice President With a copy to: Republic Services, Inc. l8500North Allied Way Phoenix, Arizona 85054 Attn: General Counsel If to WMI: Coast Waste Management, Inc. 5960 El Camino Real Carlsbad, CA 92108-0947 Attn: District Manager With a copy to: Waste Management - Western Group 7025 N. Scottsdale Road Suite 200 Scottsdale, AZ 85253 Attention: Group Legal Counsel 7. PRESERVATION OF TERMS: Except as modified herein, all tenns and conditions of the WM I Sublease shall remain in full force and effect. Capitalized tenns not defined herein shall have the meaning ascribed to them in the WMI Sublease. 3 Signed, sealed and delivered as of the date below each signature: PALOMAR: By Na Date IBS T. Ambroso, Vice President AWI: By: Allied Waste Industries, Inc., a Delaware corporation General Partner By: Nai I "/'^^^ Date: W^zt-U WMI: Rose, Market Area Vice President l«>nj%7 4 (XX'