MEMORANDUM SUBJECT: CONSIDERATION OF APPROVAL OF WATER TANK LEASE AGREEMENT AND MEMORANDUM OF LEASE WITH VERIZON WIRELESS

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1 MEMORANDUM TO: FROM: CITY COUNCIL HEATHER K. WHITHAM, CITY ATTORNEY SUBJECT: CONSIDERATION OF APPROVAL OF WATER TANK LEASE AGREEMENT AND MEMORANDUM OF LEASE WITH VERIZON WIRELESS DATE: APRIL 25, 2017 RECOMMENDATION: It is recommended that the City Council approve and authorize the Mayor to execute a Water Tank Lease Agreement and Memorandum of Lease between the City and AirTouch Cellular, dba Verizon Wireless ( Verizon ) for use of approximately 680 square feet of property located at 805 Stagecoach Road and space on the City s water tank for use as a wireless communication facility. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: Verizon will pay the City rent of $2,500 per month, which will be increased each year by an amount equal to 3% of the rent for the previous year. Verizon will also pay a onetime total of $5,000 as a contribution towards the already completed painting of the water tank, and a one-time administrative review and processing fee of $2,000. BACKGROUND: The City owns land located at 805 Stagecoach Road, which is under the jurisdiction of San Luis Obispo County, and maintains two water tanks at that location. Verizon expressed an interest in leasing a portion of the Stagecoach property for a wireless communications facility ( Lease Site ). After lengthy negotiations, the parties drafted the attached Water Tank Lease Agreement ( Lease ) for an approximate 680 square foot portion of land and space on one of the City s water tanks at the Lease Site. The term of the Lease is for five years with four additional five-year extensions. ANALYSIS OF ISSUES: The City currently has eight cell site leases with various telecommunication providers. The monthly rent averages approximately $2,140. In conducting an informal survey of cell site rates in the County, the $2,500 per month negotiated with Verizon appears to be comfortably within current market rates. Verizon s application for a Conditional Use Permit to operate the proposed facility was approved by the County of San Luis Obispo on November 13, Prior to the construction of any improvements on the proposed Lease Site, Verizon will be required Item 9.e. - Page 1

2 CITY COUNCIL CONSIDERATION OF APPROVAL OF WATER TANK LEASE AGREEMENT WITH VERIZON WIRELESS APRIL 25, 2017 PAGE 2 to obtain all necessary building permits and comply with all applicable conditions for its proposed facility. ALTERNATIVES: The following alternatives are provided for City Council consideration: 1. Approve the recommendation; 2. Do not approve the recommendation; or 3. Provide alternative direction. ADVANTAGES: Approval of the Lease will result in annual General Fund revenue of $30,000, which amount shall increase annually by 3%. In addition, the City will receive a $5,000 net contribution for the painting of the tank and a $2,000 reimbursement for administrative and processing costs. The additional telecommunication facility should also provide enhanced cell phone service within the area. DISADVANTAGES: No disadvantages have been identified. ENVIRONMENTAL REVIEW: No environmental review is required for the approval of the Water Tank Lease Agreement. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted at City Hall and on the City s website in accordance with Government Code Section Item 9.e. - Page 2

3 SITE NAME: CORBETT CANYON SITE NUMBER: ATTY/DATE: LAB/ WATER TANK LEASE AGREEMENT This Water Tank Lease Agreement (the Agreement or Lease ) is made as of the date of full execution below, between the City of Arroyo Grande, a municipal corporation of the State of California, with its mailing address located at 300 East Branch Street, Arroyo Grande, California 93420, Tax ID # , hereinafter designated LESSOR, and AirTouch Cellular Inc., a California corporation, d/b/a Verizon Wireless, with its principal office located at One Verizon Way, MailStop 4AW100, Basking Ridge, New Jersey 07920, hereinafter designated LESSEE. LESSOR and LESSEE are at times collectively referred to hereinafter as the "Parties" or individually as the "Party." 1. PREMISES. LESSOR is the owner of that certain parcel of property (the entirety of LESSOR's property is referred to hereinafter as the "Property"), with an address of 805 Stagecoach Road, Arroyo Grande, California, which property is more particularly described in Exhibit "A" attached hereto and made a part hereof, also known as assessor's parcel number ( APN ) recorded in the Office of the County Recorder of the County of San Luis Obispo. LESSOR is the owner of a water tank (the Tank ) located on the Property. LESSOR hereby leases to LESSEE: (i) a parcel of ground space measuring approximately thirty-four feet (34 ) by twenty feet (20 ) for LESSEE s equipment shelter, generator, and base station equipment (the Land Space ); and (ii) space on the Tank sufficient for LESSEE s antennas and appurtenant equipment (the Tank Space ); together with the non-exclusive right for ingress and egress, seven (7) days a week twenty-four (24) hours a day, on foot or motor vehicle, including trucks, over a twelve foot (12 ) wide right-of-way (the Access Right-of-Way ) extending from the nearest public right-of-way, Stagecoach Road, across the Property to the Land Space and Tank Space; and for the installation and maintenance of utility wires, cables, and conduits, under, over, or along a five foot (5 ) wide utility right-of-way (the Utility Right-of-Way ) for the installation and maintenance of utility wires, cables, and conduits, from the nearest public right-of-way to the Land Space and from the Land Space to the Tank Space. The Land Space, Tank Space, Access Right-of-Way and Utility Right-of-Way are hereinafter collectively referred to as the Premises. The Premises are more particularly described in Exhibit B attached hereto and made a part hereof. In the event any public utility is unable to use the aforementioned right-of-way, LESSOR hereby agrees to grant an additional right-of-way to either LESSEE or to the public utility at no cost to LESSEE. 2. SURVEY. LESSOR also hereby grants to LESSEE the right to survey the Property and the Premises, and said survey shall then become Exhibit "C" which shall be attached hereto and made a part hereof, and shall control in the event of boundary and access discrepancies between it and Exhibit "B." Cost for such work shall be borne by LESSEE. 3. TERM. This Agreement shall be effective as of the date of execution by both Parties, provided, however, the initial term shall be for five (5) years and shall commence on the Commencement Date (as hereinafter defined). The Commencement Date is defined as the first (1st) day of the month following the date this Agreement is executed by the Parties or the first (1st) day of the month following the date LESSEE is granted a building permit by the governmental agency charged with issuing such permits, whichever event occurs last. This Agreement shall automatically be extended for four (4) additional five (5) year terms unless LESSEE terminates it at the end of the then current term by giving LESSOR written notice of the intent to terminate at least six (6) months prior to the end of-the then current term. Corbett Canyon 1 Item 9.e. - Page 3

4 4. ADDITIONAL EXTENSIONS. If at the end of the fourth (4th) five (5) year extension term this Agreement has not been terminated by either Party by giving to the other written notice of an intention to terminate at least six (6) months prior to the end of such term, this Agreement shall continue in force upon the same covenants, terms and conditions for a further term of five (5) years and for five (5) year terms thereafter until terminated by either Party by giving to the other written notice of its intention to so terminate at least six (6) months prior to the end of such term. 5. RENT. (a) Within forty-five (45) days of the Commencement Date, LESSEE shall pay to LESSOR a one-time Premises preparation fee of Five Thousand Dollars ($5,000.00) as a contribution towards the painting of the Tank located on the Premises. (b) Beginning upon the Commencement Date, LESSEE shall pay to LESSOR Two Thousand Five Hundred Dollars ($2,500.00) per month ( Rent ). The initial Rent payment shall be payable within forty-five (45) days after the Commencement Date, and each subsequent Rent payment shall be payable on the first (1 st ) day of each month. Rent for any fractional month at the end of the term or renewal terms shall be prorated. Rent shall be payable to LESSOR at City of Arroyo Grande, 300 East Branch Street, Arroyo Grande, CA 93420; Attention: Administrative Services Director. (c) Rent shall be increased on each anniversary of the Commencement Date by an amount equal to three percent (3%) of the Rent for the previous year during the initial term and all extension terms. (d) Rent payments made after the fifteenth (15th) day of any month will be considered delinquent, and shall accrue interest at the rate of six percent (6%) per annum on that delinquent amount until LESSEE'S account is paid to current. If the fifteenth (15th) day of the month is on a Saturday, Sunday or holiday, then LESSEE has until the next business day for the payment to be received by LESSOR. (e) Within forty-five (45) days of the full execution of this Agreement, LESSEE shall pay to LESSOR as additional consideration a one-time administrative fee of Two Thousand Dollars ($2,000.00) for LESSOR's transactional costs associated with preparation and processing of this Agreement. (f) LESSOR hereby agrees to provide to LESSEE certain documentation (the Rental Documentation ) evidencing LESSOR s interest in, and right to receive payments under, this Agreement, including without limitation: (i) documentation, acceptable to LESSEE in LESSEE s reasonable discretion, evidencing LESSOR s good and sufficient title to and/or interest in the Property and right to receive rental payments and other benefits hereunder; (ii) a complete and fully executed Internal Revenue Service Form W-9, or equivalent, in a form acceptable to LESSEE, for any party to whom rental payments are to be made pursuant to this Agreement; and (iii) other documentation requested by LESSEE in LESSEE s reasonable discretion. From time to time during the Term of this Agreement and within thirty (30) days of a written request from LESSEE, LESSOR agrees to provide updated Rental Documentation in a form reasonably Corbett Canyon 2 Item 9.e. - Page 4

5 acceptable to LESSEE. The Rental Documentation shall be provided to LESSEE in accordance with the provisions of and at the address given in Paragraph 17. Delivery of Rental Documentation to LESSEE shall be a prerequisite for the payment of any rent by LESSEE and notwithstanding anything to the contrary herein, LESSEE shall have no obligation to make any rental payments until Rental Documentation has been supplied to LESSEE as provided herein. Within fifteen (15) days of obtaining an interest in the Property or this Agreement, any assignee(s) or transferee(s) of LESSOR shall provide to LESSEE Rental Documentation in the manner set forth in the preceding paragraph. From time to time during the Term of this Agreement and within thirty (30) days of a written request from LESSEE, any assignee(s) or transferee(s) of LESSOR agrees to provide updated Rental Documentation in a form reasonably acceptable to LESSEE. Delivery of Rental Documentation to LESSEE by any assignee(s) or transferee(s) of LESSOR shall be a prerequisite for the payment of any rent by LESSEE to such party and notwithstanding anything to the contrary herein, LESSEE shall have no obligation to make any rental payments to any assignee(s) or transferee(s) of LESSOR until Rental Documentation has been supplied to LESSEE as provided herein. 6. USE: GOVERNMENTAL APPROVALS. LESSEE shall use the Premises solely for the purpose of constructing, maintaining and operating a wireless communications site and all necessary appurtenances and shall abide by, and keep itself fully informed of all applicable Federal, State and local rules and regulations. LESSEE shall, at its sole cost and expense, install a daisy chain locking mechanism on LESSOR s gate at the entrance of the Property. Once installed by LESSEE in a good and workmanlike manner, the locking mechanism shall become the personal property of LESSOR. A security fence consisting of chain link construction or similar but comparable construction may be placed around the perimeter of the Premises at the discretion of LESSEE, subject to obtaining all necessary permits and approvals. All improvements shall be at LESSEE'S expense and the installation of all improvements shall be at the discretion and option of LESSEE subject to site design approval by LESSOR. LESSOR has reviewed the plans attached hereto as Exhibit B, and LESSOR approves the site design of LESSEE's initial installation at the Premises as described and depicted therein. LESSEE shall have the right to replace, repair, add or otherwise modify its equipment or any portion thereof, whether the equipment is specified or not on any exhibit attached hereto, during the term of this Agreement. LESSEE will maintain the Premises in a good condition, reasonable wear and tear and casualty damage excepted. LESSOR will maintain the Property, but excluding the Premises, in good condition, reasonable wear and tear excepted. To the extent any portion of the Property is damaged due to any of LESSEE s and/or its employees, agents, or contractors activities on the Property outside the ordinary use of the Premises, LESSEE shall, at its own cost and expense, repair such damage and restore the Property to as good a condition as before such cause of damage occurred, reasonable wear and tear and casualty damage excepted. It is understood and agreed that LESSEE'S ability to use the Premises is contingent upon its obtaining after the execution date of this Agreement all of the certificates, permits and other approvals (collectively the "Governmental Approvals") that may be required by any Federal, State or Local authorities, including all land use permits required by the County of San Luis Obispo which will permit LESSEE use of the Premises as set forth above. LESSOR shall cooperate with LESSEE in its effort to obtain such approvals. In the event that any Governmental Approvals should be finally rejected or any Governmental Approval issued to LESSEE is canceled, revoked, Corbett Canyon 3 Item 9.e. - Page 5

6 expires, lapses, or is otherwise withdrawn or terminated by any governmental authority, or soil boring tests are found to be unsatisfactory so that LESSEE in its reasonable discretion will be unable to use the Premises for its intended purposes, or LESSEE, in its sole discretion, determines that the use of the Premises is obsolete or unnecessary, LESSEE shall have the right to terminate this Agreement, provided that at least three (3) months prior written notice is given to LESSOR. Notice of LESSEE's exercise of its right to terminate shall be given to LESSOR in writing by certified mail, return receipt requested, and shall be effective upon the mailing of such notice by LESSEE. All rentals paid to said termination date shall be retained by LESSOR. Upon such termination, this Agreement shall be of no further force or effect except to the extent of the representations, warranties and indemnities made by each Party to the other hereunder. Otherwise, all the Parties shall have no further obligations including the payment of money, to each other. 7. TAXES. LESSEE shall pay any personal property taxes assessed on, or any portion of such taxes, which LESSOR demonstrates are attributable to LESSEE's communications facility or LESSEE's use and occupancy of the Property. LESSOR shall pay when due all real property taxes and all other fees and assessments attributable to the Premises. LESSEE shall pay, as additional rent, any increase in real property taxes levied against the Property which LESSOR demonstrates is attributable to LESSEE's use of the Property upon production of documentary proof of such increase to LESSEE. Either Party to this Agreement may timely file a protest with the appropriate taxing authority, and LESSOR consents to LESSEE's intervention and timely protest with the appropriate taxing authority. The Parties will reasonably cooperate with each other with information regarding the relative valuation of their property and allow each other to participate in any proceeding related to the tax protest. LESSEE shall indemnify, defend and hold LESSOR harmless from and against any damage or loss to the extent arising out of or attributable to LESSEE s tax protest with the respective taxing authority. In the event one Party fails to comply with the requirement to pay taxes or any other legal requirement and that noncompliance interferes with the other Party's rights under this Agreement, the compliant Party will have the right after thirty (30) days written notice to the noncompliant Party to takes steps necessary to effect compliance. All costs and expenses incurred by the compliant Party in effecting compliance will be either charged to LESSEE, in the event LESSEE is the noncompliant Party, or offset against Rent in the event LESSOR is the noncompliant Party. 8. INDEMNITY; INSURANCE. (a) Indemnity. This Agreement is made upon the express condition that LESSEE shall indemnify, defend, keep and save harmless LESSOR, and its directors, officials, officers, agents and employees (collectively, the "LESSOR Parties") against any and all suits, claims or actions, and any losses, costs or damages, including reasonable attorneys' fees, arising out of any injury or injuries to, or death or deaths of, persons or damage to property that may occur, or that may be alleged to have occurred, from any cause or causes whatsoever (collectively, "Claims"), to the extent resulting from LESSEE's negligence or willful misconduct during the term of this Agreement, including any extension term or during any holdover tenancy thereof, except to the extent caused by the proven active negligence or willful misconduct of any of the LESSOR Parties. Notwithstanding any other provision of this Agreement, neither Party shall be liable to the other for consequential damages, damages for lost income and profits, exemplary or punitive damages or other special damages, whether in tort, contract or equity. Corbett Canyon 4 Item 9.e. - Page 6

7 (b) Insurance. LESSEE shall maintain prior to the beginning of and for the duration of this Agreement insurance coverage as specified in Exhibit D attached hereto and incorporated herein as though set forth in full. 9. ANNUAL TERMINATION. Notwithstanding anything to the contrary contained herein, and provided LESSEE is not in default hereunder beyond applicable notice and cure periods and shall have paid all rents and sums due and payable to LESSOR by LESSEE, LESSEE shall have the right to terminate this Agreement upon the annual anniversary of this Agreement, provided that six (6) months prior written notice is given LESSOR. 10. INTERFERENCE. (a) LESSOR agrees that LESSOR and/or any other tenants of the Property who currently have or in the future take possession of the Property will be permitted to install only such radio equipment that is of the type and frequency, which will not cause measurable interference to the existing equipment of LESSEE. (b) LESSEE shall construct, maintain and operate the Premises and improvements thereon in such a manner that will not cause interference to LESSOR including, but not limited to, LESSOR's re-broadcaster for its fire, police and other public safety departments, and other lessees or licensees of the Property. All operations by LESSEE shall be in compliance with all Federal Communications Commission ("FCC") requirements and all applicable laws. (c) Subsequent to LESSEE's construction, installation and operation of improvements in the Premises, LESSOR shall not permit itself, its lessees, or its licensees to install new equipment on the Property contiguous thereto owned or controlled by LESSOR, if such equipment will cause interference with LESSEE's operations. In the event interference occurs, LESSOR agrees to take all reasonable steps necessary to eliminate such interference, in a reasonable time period. Notwithstanding anything herein to the contrary, in the event LESSOR fails to comply with this Section 10, LESSEE's sole remedy is to terminate this Agreement. 11. REMOVAL UPON TERMINATION/HOLDOVER. (a) Removal Upon Termination: LESSEE, upon termination of this Agreement, shall, within ninety (90) days, remove its building(s), antenna installation(s) (including footings), fixtures and all personal property and otherwise restore the Premises to its original condition, reasonable wear and tear and casualty damage excepted. LESSOR agrees and acknowledges that all of the equipment, fixtures and personal property of LESSEE shall remain the personal property of LESSEE and LESSEE shall have the right to remove the same, whether or not said items are considered fixtures and attachments to real property under applicable law. If such time for removal causes LESSEE to remain on the Premises after termination of this Agreement, LESSEE shall pay Rent at the then existing monthly rate or on the existing monthly pro-rata basis if based upon a longer payment term, until such time as the removal of the building, antenna structure, fixtures and all personal property are completed. (b) Holdover: LESSEE has no right to retain possession of the Premises or any part thereof beyond the expiration of that removal period set forth in Subparagraph 11(a) above, unless the Parties are negotiating a new lease or lease extension in good faith. In the event that the Corbett Canyon 5 Item 9.e. - Page 7

8 Parties are not in the process of negotiating a new lease or lease extension in good faith, LESSEE holds over in violation of Subparagraph 11(a) and this Subparagraph 11(b), then the rent then in effect payable from and after the time of the expiration or earlier removal period set forth in Subparagraph 11(a) shall be equal to the rent applicable during the month immediately preceding such expiration or earlier termination. 12. RIGHT OF FIRST REFUSAL/RIGHTS UPON SALE. (a) Right of First Refusal: If LESSOR elects, during the Term to grant to a third party by easement or other legal instrument an interest in and to that portion of the Tank and/or Property occupied by LESSEE for the purpose of operating and maintaining communications facilities or the management thereof, with or without an assignment of this Agreement to such third party, LESSEE shall have the right of first refusal to meet any bona fide offer of transfer on the same terms and conditions of such offer. If LESSEE fails to meet such bona fide offer within thirty (30) days after written notice thereof from LESSOR, LESSOR may grant the easement or interest in the Property or portion thereof to such third person in accordance with the terms and conditions of such third party offer. (b) Rights Upon Sale: Should LESSOR, at anytime during the term of this Agreement, decide to sell all or any part of the Property or Tank to a purchaser other than LESSEE, such sale shall be under and subject to this Agreement and LESSEE's rights hereunder, and any sale by LESSOR of the portion of this Property underlying the right-of-way herein granted shall be under and subject to the right of LESSEE in and to such right-of-way. 13. QUIET ENJOYMENT. LESSOR covenants that LESSEE, on paying the Rent and performing the covenants shall peaceably and quietly have, hold and enjoy the Premises. 14. TITLE. LESSOR covenants that LESSOR is seized of good and sufficient title and interest to the Property and Tank and has full authority to enter into and execute this Agreement. LESSOR further covenants that there are no other liens, judgments or impediments of title on the Property or Tank or affecting LESSOR'S title to the same and that there are no covenants, easements or restrictions which prevent the use of the Premises by LESSEE as set forth above. 15. INTEGRATION. It is agreed and understood that this Agreement contains all agreements, promises and understandings between LESSOR and LESSEE and that no verbal or oral agreements, promises or understandings shall be binding upon either LESSOR or LESSEE in any dispute, controversy or proceeding at law, and any addition, variation or modification to this Agreement shall be void and ineffective unless made in writing and signed by the Parties. In the event any provision of this Agreement is found to be invalid or unenforceable, such finding shall not affect the validity and enforceability of the remaining provisions of this Agreement. The failure of either Party to insist upon strict performance of any of the terms or conditions of this Agreement or to exercise any of its rights under this Agreement shall not waive such rights and such Party shall have the right to enforce such rights at any time and take such action as may be lawful and authorized under this Agreement, either in law or in equity. 16. ASSIGNMENT. This Agreement may be assigned by LESSEE without any approval or consent of LESSOR to LESSEE's principal, affiliates, subsidiaries of its principal; to any entity which acquires all or substantially all of LESSEE's assets in the market defined by the Corbett Canyon 6 Item 9.e. - Page 8

9 FCC in which the Property is located by reason of a merger, acquisition or other business reorganization; or to any entity which acquires or receives an interest in the majority of communication towers of LESSEE in the market defined by the FCC in which the Property is located. As to other parties, this Agreement may not be sold, assigned or transferred without the written consent of LESSOR, which consent shall not be unreasonably withheld, conditioned or delayed. 17. NOTICES. All notices hereunder must be in writing and shall be deemed validly given if sent by certified mail, return receipt requested or by commercial courier, provided the courier's regular business is delivery service and provided further that it guarantees delivery to the addressee by the end of the next business day following the courier's receipt from the sender, addressed as follows (or any other address that the Party to be notified may have designated to the sender by like notice). LESSOR: LESSEE: City Manager, City of Arroyo Grande 300 East Branch Street Arroyo Grande, California AirTouch Cellular Inc. dba Verizon Wireless 180 Washington Valley Bedminster, New Jersey Attention: Network Real Estate (Site: Corbett Canyon) Notice shall be effective upon actual receipt or refusal as shown on the receipt obtained pursuant to the foregoing. 18. SUCCESSORS. This Agreement shall extend to and bind the heirs, personal representatives, successors and permitted assigns of the Parties hereto. 19. SUBORDINATION AND NON-DISTURBANCE. At LESSOR'S option, this Agreement shall be subordinate to any mortgage or other security interest by LESSOR which from time to time may encumber all or part of the Property or right-of-way, provided, however, every such mortgage or other security interest shall recognize the validity of this Agreement in the event of a foreclosure of LESSOR'S interest and also LESSEE'S right to remain in occupancy of and have access to the Premises as long as LESSEE is not in default of this Agreement beyond applicable notice and cure periods. LESSEE shall execute whatever instruments may reasonably be required to evidence this subordination clause. In the event the Property is encumbered by a mortgage or other security interest, LESSOR will obtain and furnish to LESSEE, a non-disturbance agreement for each such mortgage or other security interest in recordable form. In the event LESSOR defaults in the payment and/or other performance of any mortgage or other security interest encumbering the Property or Tank, LESSEE, may, at its sole option and without obligation, cure or correct LESSOR's default and upon doing so, LESSEE shall be subrogated to any and all rights, titles, liens and equities of the holders of such mortgage or security interest and LESSEE shall be entitled to deduct and setoff against all rents that may otherwise become due under this Agreement the sums paid by LESSEE to cure or correct such defaults. Corbett Canyon 7 Item 9.e. - Page 9

10 20. RECORDING. LESSOR agrees to execute a Memorandum of this Tank Lease Agreement which LESSEE may record with the appropriate Recording Officer. The date set forth in the Memorandum is for recording purposes only and bears no reference to commencement of either term or rent payments. 21. DEFAULT; REMEDIES. (a) Default. In the event there is a breach by LESSEE with respect to any of the provisions of this Agreement or its obligations under it, including the payment of rent, LESSOR shall give LESSEE written notice of such breach. After receipt of such written notice, LESSEE shall have fifteen (15) days in which to cure any monetary breach and thirty (30) days in which to cure any non-monetary breach, provided LESSEE shall have such extended period as may be required beyond the thirty (30) days if the nature of the cure is such that it reasonably requires more than thirty (30) days and LESSEE commences the cure within the thirty (30) day period and thereafter continuously and diligently pursues the cure to completion. LESSOR may not maintain any action or effect any remedies for default against LESSEE unless and until LESSEE has failed to cure the breach within the time periods provided in this Paragraph. In the event there is a breach by LESSOR with respect to any of the provisions of this Agreement or its obligations under it, LESSEE shall give LESSOR written notice of such breach. After receipt of such written notice, LESSOR shall have thirty (30) days in which to cure any such breach, provided LESSOR shall have such extended period as may be required beyond the thirty (30) days if the nature of the cure is such that it reasonably requires more than thirty (30) days and LESSOR commences the cure within the thirty (30) day period and thereafter continuously and diligently pursues the cure to completion. LESSEE may not maintain any action or effect any remedies for default against LESSOR unless and until LESSOR has failed to cure the breach within the time periods provided in this Paragraph. (b) Remedies. Upon a default, the non-defaulting Party may at its option (but without obligation to do so), perform the defaulting Party s duty or obligation on the defaulting Party s behalf, including but not limited to the obtaining of reasonably required insurance policies. The costs and expenses of any such performance by the non-defaulting Party shall be due and payable by the defaulting Party upon invoice therefor. In the event of a default by either Party with respect to a material provision of this Agreement, without limiting the non-defaulting Party in the exercise of any right or remedy which the non-defaulting Party may have by reason of such default, the non-defaulting Party may terminate the Agreement and/or pursue any remedy now or hereafter available to the non-defaulting Party under the Laws or judicial decisions of the state in which the Premises are located; provided, however, the non-defaulting Party shall use reasonable efforts to mitigate its damages in connection with a default by the defaulting Party. If the non-defaulting Party so performs any of the defaulting Party s obligations hereunder, the full amount of the reasonable and actual cost and expense incurred by non-defaulting Party shall immediately be owing by the defaulting Party to the non-defaulting Party, and the defaulting Party shall pay to the non-defaulting Party upon demand the full undisputed amount thereof with interest thereon from the date of payment at the greater of (i) ten percent (10%) per annum, or (ii) the highest rate permitted by applicable Laws. Notwithstanding the foregoing, if LESSOR is the defaulting Party and LESSOR does not pay the full undisputed amount within thirty (30) days of its receipt of an invoice Corbett Canyon 8 Item 9.e. - Page 10

11 setting forth the amount due from LESSOR, LESSEE may offset the full undisputed amount, including all accrued interest, due against all fees due and owing to LESSOR until the full undisputed amount, including all accrued interest, is fully reimbursed to LESSEE. 22. ENVIRONMENTAL. LESSOR represents that, to the best of LESSOR's knowledge, the Premises have not been used for the generation, storage, treatment or disposal of hazardous materials, hazardous substances or hazardous wastes. In addition, LESSOR represents that, to the best of LESSOR's knowledge, no hazardous materials, hazardous substances, hazardous wastes, or underground storage tanks are located on or near the Premises. LESSEE will not bring onto or store on the Premises hazardous materials, hazardous substances or hazardous wastes. Notwithstanding the immediately preceding sentence, LESSOR and LESSEE acknowledge that LESSEE may be utilizing and maintaining on the Premises sealed batteries, propane/diesel/gasoline, HVAC system, and a halon/fm200 fire suppression system and that the use and maintenance of such items shall not constitute a violation or breach of this paragraph. LESSEE shall be responsible for and shall indemnify and hold harmless LESSOR from any and all liabilities and damages, including but not limited to removal costs, to the extent arising out of any environmental damage caused by LESSEE. 23. CASUALTY. In the event of damage by fire or other casualty to the Premises that cannot reasonably be expected to be repaired within forty-five (45) days following same or, if the Property is damaged by fire or other casualty so that such damage may reasonably be expected to disrupt LESSEE's operations at the Premises for more than forty-five (45) days, then LESSEE may at any time following such fire or other casualty, provided LESSOR has not completed the restoration required to permit LESSEE to resume its operation at the Premises, terminate this Lease upon fifteen (15) days written notice to LESSOR. Any such notice of termination shall cause this Lease to expire with the same force and effect as though the date set forth in such notice were the date originally set as the expiration date of this Lease and the Parties shall make an appropriate adjustment, as of such termination date, with respect to payments due to the other under this Lease. Notwithstanding the foregoing, all rents shall abate during the period of repair following such fire or other casualty. 24. CONDEMNATION. In the event of any condemnation of the Property, LESSEE may terminate this Lease upon fifteen (15) days written notice to LESSOR if such condemnation may reasonably be expected to disrupt LESSEE's operations at the Premises for more than fortyfive (45) days. LESSEE may on its own behalf make a claim in any condemnation proceeding involving the Premises for losses related to the antennas, equipment, its relocation costs and its damages and losses (but not for the loss of its leasehold interest). Any such notice of termination shall cause this Lease to expire with the same force and effect as though the date set forth in such notice were the date originally set as the expiration date of this Lease and the Parties shall make an appropriate adjustment as of such termination date with respect to payments due to the other under this Lease. 25. SUBMISSION OF LEASE. The submission of this Lease for examination does not constitute an offer to lease the Premises and this Lease becomes effective only upon the full execution of this Lease by the Parties. If any provision herein is invalid, it shall be considered deleted from this Lease and shall not invalidate the remaining provisions of this Lease. Each of the Parties hereto warrants to the other that the person or persons executing this Lease on behalf of such Corbett Canyon 9 Item 9.e. - Page 11

12 Party has the full right, power and authority to enter into and execute this Lease on such Party's behalf and that no consent from any other person or entity is necessary as a condition precedent to the legal effect of this Lease. 26. APPLICABLE LAWS. LESSEE shall use the Premises as may be required or as permitted by applicable laws, rules and regulations. LESSOR agrees to keep the Property in conformance with all applicable laws, rules and regulations and agrees to reasonably cooperate with LESSEE regarding any compliance required by LESSEE in respect to its use of the Premises. 27. SURVIVAL. The provisions of this Agreement relating to indemnification from one Party to the other Party shall survive any termination or expiration of this Agreement. Additionally, any provisions of this Agreement which require performance subsequent to the termination or expiration of this Agreement shall also survive such termination or expiration. 28. CAPTIONS. The captions contained in this Agreement are inserted for convenience only and are not intended to be part of this Agreement. They shall not affect or be utilized in the construction or interpretation of this Agreement. 29. WAIVERS. No provision of this Lease Agreement shall be deemed to have been waived by a Party unless the waiver is in writing and signed by the Party against whom enforcement of the waiver is attempted. No custom or practice which may develop between the Parties in the implementation or administration of the terms of this Lease Agreement shall be construed to waive or lessen any right to insist upon strict performance of the terms of this Lease Agreement. 30. GOVERNING LAW, COURTS. This Lease shall be governed by and construed in accordance with the laws of the State of California. Sole venue for any legal claim arising hereunder shall be in the Superior Court of the State of California in San Luis Obispo County. 31. ATTORNEY FEES AND COSTS. The prevailing Party in any legal claim arising hereunder shall be entitled to its reasonable attorneys fees and costs and court costs as may be awarded by the court in a final, non-appealable action. 32. NO PRESUMPTIONS REGARDING PREPARATION OF LEASE AGREEMENT. The Parties acknowledge and agree that each of the Parties has been represented by counsel or has had full opportunity to consult with counsel and that each of the Parties has participated in the negotiation and drafting of this Lease Agreement. Accordingly it is the intention and agreement of the Parties that the language, terms and conditions of this Lease Agreement are not to be construed in any way against or in favor of any Party hereto by reason of the roles and responsibilities of the Parties or their counsel in connection with the preparation of this Lease Agreement. 33. INTERPRETATON. (a) Unless the context of this Lease Agreement clearly requires otherwise: (i) the plural and singular numbers shall be deemed to include the other; (ii) the masculine, feminine and neuter genders shall be deemed to include the others; (iii) "or" is not exclusive; and (iv) "includes" and "including" are not limiting. Corbett Canyon 10 Item 9.e. - Page 12

13 (b) The headings in this Lease Agreement are for reference only and are not incorporated in any term herein for any purpose. 34. NO PERSONAL LIABILITY OF OFFICIALS AND EMPLOYEES OF EITHER. No elected official, officer, employee, agent, or volunteer of either Party shall be personally liable for any default or liability whatsoever under this Lease Agreement, except in instances of criminal negligence. 35. PUBLIC DOCUMENT. LESSOR is a municipal corporation under the laws of the State of California. LESSOR and LESSEE acknowledge that this Lease Agreement is subject to public disclosure as specified by California Government Code 6250 et seq. and is a public record within the meaning of California Government Code 6252(e). 36. NO ASSURANCES. Execution of this Lease is completely unrelated to any and all County of San Luis Obispo planning process(es) and all other required municipal licenses, permits, authorizations, and approvals whatsoever. Grant of this Lease does not assure LESSEE that it will be successful in whole or in part in securing any or all required County of San Luis Obispo permits, or any other required permits or authorizations. LESSEE is solely responsible, at its sole expense, for securing any and all required governmental authorizations to construct and to operate the communications facility which shall be reviewed pursuant to prevailing requirements at that time. 37. TANK COMPLIANCE. LESSOR covenants that it will keep the Tank in good repair as required by all applicable laws. No materials may be used in the installation of the antennas or transmission lines that will cause corrosion or rust or deterioration of the Tank structure or its appurtenances. LESSEE agrees that it shall not commence any work requiring Tank penetrations without LESSOR s prior written consent. All antenna(s) on the Tank must be identified by a marking on the Tank and all transmission lines are to be tagged at the conduit opening where it enters any user's equipment space. [SIGNATURES APPEAR ON THE FOLLOWING PAGE] Corbett Canyon 11 Item 9.e. - Page 13

14 IN WITNESS WHEREOF, the Parties have caused this Agreement to be effective as of the last date written below. "LESSOR" CITY OF ARROYO GRANDE JIM HILL, Mayor Date: ATTEST: "LESSEE" AirTouch Cellular Inc., a California corporation, d/b/a Verizon Wireless By: Print Name: Its: Date: KELLY WETMORE, City Clerk APPROVED AS TO FORM: HEATHER K. WHITHAM, City Attorney Corbett Canyon 12 Item 9.e. - Page 14

15 EXHIBIT A DESCRIPTION OF PROPERTY to this Agreement dated, 201, by and between City of Arroyo Grande, a municipal corporation, as LESSOR, and AirTouch Cellular Inc., a California corporation, d/b/a Verizon Wireless as LESSEE The Property: Real property in the unincorporated area of the County of SAN LUIS OBISPO, State of California, described as follows: A PORTION OF PARCEL D OF PARCEL MAP CO-76-48, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED JUNE 14, 1977 IN BOOK 23, PAGE 19 OF PARCEL MAPS; ALSO BEING A PORTION OF LOT 2 OF THE RESUBDIVISION OF A PART OF THE RANCHOS CORRAL DE PIEDRA, PISMO AND BOLSA DE CHEMISAL FILED NOVEMBER 24, 1886 IN BOOK A AT PAGE 63 OF MAPS IN THE RECORDER S OFFICE OF SAID COUNTY; SAID POINT ALSO BEING ON THE NORTHWESTERLY LINE OF STAGE COACH ROAD AS SHOWN ON SAID PARCEL MAP; DESCRIBED AS FOLLOWS: BEGINNING AT POINT S-13 ON THE SOUTHEASTERLY LINE OF SAID LOT 2 AND AN ANGLE POINT IN THE SOUTHEASTERLY LINE OF SAID PARCEL D; THENCE ALONG SAID SOUTHEASTERLY LINE SOUTH " WEST (RECORD SOUTH WEST) FEET; THENCE PERPENDICULAR TO SAID LINE NORTH " WEST FEET; THENCE PARALLEL WITH THE SOUTHEASTERLY LINE OF SAID PARCEL D AND THE FIRST COURSE HEREIN, NORTH " EAST FEET; THENCE PERPENDICULAR TO THE PORTION OF THE SOUTHEASTERLY LINE OF SAID PARCEL D SET FORTH AS NORTH EAST ON SAID PARCEL MAP SOUTH EAST FEET TO A POINT ON THE SOUTHEASTERLY LINE OF SAID PARCEL D WHICH BEARS NORTH EAST FEET FROM THE POINT OF BEGINNING; THENCE ALONG SAID LINE SOUTH WEST FEET TO THE POINT OF BEGINNING. APN: Corbett Canyon Exhibit A Item 9.e. - Page 15

16 EXHIBIT B DESCRIPTION OF PREMISES to this Agreement dated, 201, by and between City of Arroyo Grande, a municipal corporation, as LESSOR, and AirTouch Cellular Inc., a California corporation, d/b/a Verizon Wireless, as LESSEE. [SEE ATTACHED] Notes: 1. Lessee may replace this Exhibit with a survey of the Premises once Lessee receives it. 2. The Premises shall be setback from the Property s boundaries as required by the applicable governmental authorities. 3. The access road s width will be the width required by the applicable governmental authorities, including police and fire departments. 4. The type, number, mounting positions and locations of antennas and transmission lines are illustrative only. The actual types, numbers, mounting positions and locations may vary from what is shown above. 5. The locations of any utility easements are illustrative only. The actual locations will be determined by the servicing utility company in compliance with all local laws and regulations. Corbett Canyon Exhibit B Item 9.e. - Page 16

17 Item 9.e. - Page 17

18 EXHIBIT C SURVEY [SEE ATTACHED] Corbett Canyon Exhibit C Item 9.e. - Page 18

19 Item 9.e. - Page 19

20 Item 9.e. - Page 20

21 EXHIBIT D INSURANCE Prior to the beginning of and throughout the duration of this Agreement, LESSEE will maintain insurance in conformance with the requirements set forth below. LESSEE acknowledges that the insurance coverage and policy limits set forth in this section constitute the amount of coverage required. LESSEE shall provide the following types and amounts of insurance: Commercial General Liability Insurance in the amount of $2,000,000 per occurrence for bodily injury and property damage and $2,000,000 general aggregate including cross liability for claims or suits by one insured against another. Commercial Automobile Liability covering all owned, non-owned and hired vehicles with a combined single limit of $2,000,000 each accident for bodily injury and property damage. Fire and Extended Coverage Insurance. LESSEE shall maintain a policy of standard fire and extended coverage insurance on its improvements to the Premises. Workers Compensation in compliance with the statutory requirements of the state of operation with employer s liability limits of $1,000,000 each accident; $1,000,000 disease each employee; $1,000,000 disease policy limit. Insurance procured pursuant to these requirements shall be written by insurers that are admitted or licensed carriers in the state of California and with an A.M. Bests rating of A- or better and a minimum financial size VII. General conditions pertaining to provision of insurance coverage by LESSEE. LESSEE and LESSOR agree to the following with respect to insurance provided by LESSEE: 1. LESSEE agrees to include LESSOR, its officials and employees as an additional insured as their interest may appear under this Agreement on the general and automobile liability coverage required by this Agreement. 2. The Parties hereby waive and release any and all rights of action for negligence against the other which may hereafter arise on account of damage to the Premises or to the Property, resulting from any fire, or other casualty of the kind covered by standard fire insurance policies with extended coverage, regardless of whether or not, or in what amounts, such insurance is now or hereafter carried by the Parties, or either of them. These waivers and releases shall apply between the Parties and they shall also apply to any claims under or through either Party as a result of any asserted right of subrogation. All such policies of insurance obtained by either Party concerning the Premises or the Property shall waive the insurer's right of subrogation against the other Party. 3. All coverage types and limits required are subject to approval, and upon notice to and acceptance by LESSEE, reasonable modification and additional reasonable requirements by LESSOR, as the need arises. Corbett Canyon Exhibit D Item 9.e. - Page 21

22 4. Proof of compliance with these insurance requirements, consisting of certificates of insurance evidencing all of the coverages required and a blanket additional insured endorsement to LESSEE s general liability policy, shall be delivered to LESSOR at the execution of this Agreement. 5. It is acknowledged by the Parties of this Agreement that all insurance coverage required to be provided by LESSEE is intended to apply on a primary, noncontributing basis in relation to any other insurance or self insurance available to LESSOR as relates to LESSEE operations. 6. LESSOR, in LESSOR's reasonable discretion and upon notice to and acceptance by LESSEE, reserves the right during the term of the Agreement to change the amounts and types of insurance required by giving LESSEE ninety (90) days advance written notice of such change. If such change results in substantial additional cost to LESSEE, LESSOR will negotiate additional compensation proportional to the increase benefit to LESSOR. 7. LESSEE will renew the required coverage accordingly, as long as LESSOR faces an exposure from operations of any type pursuant to this Agreement. 8. LESSEE shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Proof via a certificate of insurance that such coverage has been ordered shall be submitted within ten (10) business days of expiration without lapse in coverage. A certificate of insurance and blanket additional insured endorsement as required in these specifications applicable to the renewing or new coverage must be provided to LESSOR within ten (10) business days of the expiration of the coverages. 9. The provisions of any workers compensation or similar act will not limit the obligations of LESSEE under this agreement. LESSEE expressly agrees not to use any statutory immunity defenses under such laws with respect to LESSOR, its employees, or officials. 10. Requirements of specific coverage features or limits contained in this section are not intended as limitations on coverage, limits or other requirements nor as a waiver of any coverage normally provided by any given policy. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue, and is not intended by any party or insured to be limiting or all-inclusive. 11. These insurance requirements are intended to be separate and distinct from any other provision in this agreement and are intended by the Parties here to be interpreted as such. 12. The requirements in this Section supersede all other sections and provisions of this Agreement to the extent that any other section or provision conflicts with or impairs the provisions of this Section. 13. LESSEE agrees to provide, as soon as practicable, notice to LESSOR of any claim or loss against LESSEE arising out of the work performed under this agreement. LESSOR assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve LESSOR. Corbett Canyon Exhibit D Item 9.e. - Page 22