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HomeMy WebLinkAboutPermit 'tirM° `wrr PAG —13-002 OPERATING PERMIT AND AGREEMENT between the City of Renton and Pro-Flight Aviation, Inc. THIS IS A PERMIT TO OPERATE AN AVIATION RELATED ACTIVITY UPON THE RENTON MUNICIPAL AIRPORT AND AN AGREEMENT (hereinafter "Operating Permit") between THE CITY OF RENTON, a Washington municipal corporation (hereinafter "Permittor"), and Pro-Flight Aviation, Inc., a Washington corporation (hereinafter "Permittee"). IN CONSIDERATION of the covenants and agreements hereinafter set forth, the parties agree as follows: 1. ACKNOWLEDGEMENT OF SUB-LEASE: 1.1. Pursuant to lease agreement LAG 09-006, executed on October 7, 2009, the City of Renton granted a lease of the subject premises to Renton Gateway Center LLC, as Lessee, for the purpose of operating a Fixed Based Operation, which includes/included aircraft maintenance, aircraft storage, flight training, aircraft rental, sightseeing, aerial photography, sale of aviation fuel, sale of aircraft parts, aircraft servicing, aircraft grooming, and aircraft sales. 1.2. Thereafter, Renton Gateway Center LLC (Lessee) sublet a portion of the subject premises to Pro-Flight Aviation, Inc., (Permittee) by sublease agreement, executed on July 7, 2011, for the purpose/purposes of operating a Fixed Based Operation located at 750 West Perimeter Road, Renton, Washington 98057. 2. GRANT OF OPERATING PERMIT: 2.1. Description of Premises: The Premises subleased by Pro-Flight Aviation, Inc., the Permittee, is described as 9,400 square feet of hangar and office space, as shown in Exhibit A and B of the sublease, attached hereto, and incorporated by this reference. 2.2. Common Areas: Permittee, and its authorized representatives, subtenants, assignees, agents, invitees, and licensees, shall have the right to use, in common with others, on a non-exclusive basis and subject to the Airport Regulations and Minimum Standards (as they may be amended from time to time) pursuant to Section 8.5 below and subject to the terms of its sublease, the public portion of the Renton Municipal Airport (aka Clayton Scott Field, hereinafter referred to as "Airport"), including the runway and other public facilities provided thereon. 2.2.1. Notwithstanding anything in this Operating Permit to the contrary, Permittor acknowledges that direct access to the taxiways and runway from the Premises is essential to the conduct of Permittee's business on the Premises and, except during construction activities occurring on the taxiways, runway or weather-related events, Permittor shall not do anything that would interfere with direct access to the taxiways and runway by the Permittee and its OPERATING PERMIT ORIGINAL 1 City of Renton to Pro-Flight Aviation,Inc. w ..e representatives, subtenants, assignees, agents, invitees, and licensees during the Term of this Operating Permit, PROVIDED that if Permittor plans any construction activity on the taxiways or runway, Permittor will schedule such activity so as not to interfere with Permittee's use of the Premises, the taxiways, or the runway, will notify Permittee of any plans for such activity not less than six months in advance of the commencement of such activity, and will consult and coordinate with Permittee to ensure that such activity does not interfere with Permittee's use of the Premises, the taxiways, or runway, except that in the case of an emergency Permittor may proceed with such activity without notice to the Permittee and will use its best reasonable efforts not to interfere with Permittee's use of the Premises, taxiway, or runway in addressing such emergency. For purposes of this provision, an "emergency' is a condition that presents an imminent threat of bodily injury to or death of any person or loss of or significant damage to any property. 3. CONDITIONS: 3.1. Specific Conditions: This Operating Permit, and Permittee's rights and permitted uses under this Operating Permit, are subject to the following: 3.1.1. Easements, restrictions and reservations of record; 3.1.2. The Airport Regulations and Minimum Standards pursuant to Section 8.5 below, including Permittor's standards concerning operation of aviation activities from the Airport; and 3.1.3. All such non-discriminatory charges and fees for use of the Airport as may be established from time to time by Permittor as set out in Section 5.3. of this Operating Permit. 3.2. No Conveyance of Airport: This Operating Permit shall in no way be deemed to be a conveyance of the Airport, and shall not be construed as providing any special privilege for any public portion of the Airport except as described herein. The Permittor reserves the absolute right to lease or permit the use of any portion of the Airport for any purpose deemed suitable for the Airport, except that portion that is permitted hereby. 3.3. Nature of Permittor's Interest: It is expressly understood and agreed that Permittor holds and operates the Airport, and the Premises under and subject to a grant and conveyance thereof to Permittor from the United States of America, acting through its Reconstruction Finance Corporation, and subject to all the reservations, restrictions, rights, conditions, and exceptions of the United States therein and thereunder, which grant and conveyance has been filed for record in the office of the Recorder of King County, Washington, and recorded in Volume 2668 of Deeds, Page 386; and further that Permittor holds and operates said Airport and Premises under and subject to the State Aeronautics Acts of the State of Washington (chapter 165, laws of 1947), and any subsequent amendments thereof or subsequent legislation of said state and all rules and regulations lawfully promulgated under any act or legislation adopted by the State of Washington or by the United States or the OPERATING PERMIT 2 City of Renton to Pro-Flight Aviation,Inc. Nl.r° `we Federal Aviation Administration. It is expressly agreed that the Permittee also accepts and will hold and use this Operating Permit and the Premises subject thereto and to all contingencies, risks, and eventualities of or arising out of the foregoing, and if this Operating Permit, its Term, or any conditions or provisions of this Operating Permit are or become in conflict with or impaired or defeated by any such legislation, rules, regulations, contingencies or risks, the latter shall control and, if necessary, modify or supersede any provision of this Operating Permit affected thereby, all without any liability on the part of, or recourse against, Permittor in favor of Permittee, provided that Permittor does not exceed its authority under the foregoing legislation, rules and regulations. 3.4. Future Development/Funding: Subject always to Permittee's rights under Section 2.2.1 of this Operating Permit, nothing contained in this Operating Permit shall operate or be construed to prevent or hinder the future development, improvements, or operation of Airport by Permittor, its agents, successors or assigns, or any department or agency of the State of Washington or of the United States, or the consummation of any loan or grant of federal or state funds in aid of the development, improvement, or operation of the Renton Municipal Airport. But Permittor's exercise of such rights shall not unreasonably interfere with Permittee's rights under this Operating Permit. 4. TERM OF LEASE SUBLEASE AND OPERATING PERMIT 4.1. Initial Term: The term of the sublease to Pro-Flight Aviation, Inc. is for a period of forty eight (48) months and twenty four (24) days commencing on July 7, 2011 and terminating on July 31, 2015. 4.2. Permit Term: The term of this Operating Permit is forty eight (48) months and twenty four (24) days and may be extended to include any Extended Term as may be in effect between Renton Gateway Center LLC (Lessee) and Pro-Flight Aviation, Inc. (Sublessee/Permittee). Any extension of the Initial Term of this Operating Permit is only renewable upon written notice received by the Permittor ninety (90) calendar days in advance of the termination date of the Initial Term of this Operating Permit and Agreement. In no event will the term of the Operating Permit and Agreement be extended beyond August 31, 2046. 5. RENTAL: 5.1. Rent on Lease (for informational purposes only): As rental for the premises described in LAG 09-006 and addenda thereto, Lessee has agreed to pay Permittor$0.57/sq ft/year on 136,846 square feet or seventy eight thousand two dollars and twenty two cents ($78,002.22) per year or a monthly rental in the sum of six thousand five hundred dollars and nineteen cents ($6,500.19) throughout the twelve (12) month period commencing on August 21, 2011, which does not include leasehold excise tax. The Rental amount set out herein is subject to Periodic Rental Adjustments as set out in Section 4.b. in lease LAG 09-006. OPERATING PERMIT 3 City of Renton to Pro-Flight Aviation,Inc. 5.2. Rent on Sublease: As rental for the premises described in Section 2, above, during the term of this permit, Permittee has agreed to pay Lessee a monthly rental in the sum of thirty three thousand dollars ($33,000.00) per year or a monthly rental in the sum of two thousand seven hundred fifty dollars ($2,750.00)throughout the forty eight (48) month and twenty four (24) day period commencing on July 7, 2011, which does not include leasehold excise tax. In the event Lessee fails to pay the rent identified in Section 5.1. and any future rental rate increases, then Permittee may, whether Permittee subleases all or part of Lessee's Airport leasehold interest as described in LAG 09-006 and addenda thereto, pay said rent, when due. In the event neither Lessee nor Permittee pay said rent, then the Permittor may terminate this permit with ten (10) days' written notice. 5.3. Other Charges: Permittee further agrees to pay, in addition to the rental specified and other charges hereinabove defined, all fees and charges now in effect or hereafter levied or established by Permittor, or its successors, or by any other governmental agency or authority, being or becoming levied or charged against the premises, structures, business operations, or activities conducted by or use made by Permittee of, on, and from the leased premises which shall include, but not be limited to, all charges for light, heat, gas, power, garbage, water and other utilities, Aircraft Rescue and Fire Fighting services or services rendered to said premises. In the event Lessee fails to pay the other charges identified in this Section 5.3, then Permittee may, whether Permittee subleases all or part of Lessee's Airport leasehold interest as described in lease LAG 09-006 and addenda thereto, pay said other charges, when due. In the event neither the Lessee nor the Permittee pay said other charges, then the Permittor may terminate this permit with ten (10) days' notice. 5.4. Leasehold Excise Tax: In the event that the State of Washington or any other governmental authority having jurisdiction thereover shall hereafter levy or impose any similar tax or charge on the leasehold estate described herein, and Lessee fails to pay said tax or charge, then Permittee may, whether Permittee subleases all or part of Lessee's Airport leasehold interest as described in LAG 09-006 and addenda thereto, pay said tax or charge, when due. Such tax or charge shall be in addition to the regular monthly rentals. In the event neither Lessee nor Permittee pay said tax or charge, then the Permittor may terminate this permit with ten (10) days' notice. 6. PAYMENT OF UTILITIES AND RELATED SERVICES: 6.1. Whether Permittee subleases all or part of Lessee's Airport leasehold interest as described in LAG 09-006 and addenda thereto, if Lessee fails to pay such utilities and service charges, then Permittee may pay all light, heat, gas, power, garbage, water, sewer and janitorial service used in or on the Premises when due. In the event neither Lessee nor the Permittee pay said utility or service charges, then the Permittor may terminate this permit with ten (10) days' notice. 6.2. Permittor shall not be liable for any loss or damage caused by or resulting from any variation, interruption, or failure of said utility services due to any cause whatsoever; and no temporary interruption or failure of such services incident to the making of repairs, alterations OPERATING PERMIT 4 City of Renton to Pro-Flight Aviation,Inc. 14000 ..r' or improvements, or due to accident, strike, act of God, or conditions or events not under Permittor's control, shall be deemed a breach of the Permit or as an eviction of Permittee, or relieve Permittee from any of its obligations hereunder. 7. PERMITTEE'S ACCEPTANCE OF PREMISES: 7.1. Acceptance of Premises: By occupying the Premises, Permittee formally accepts the same in AS IS condition, and acknowledges that the Permittor has complied with all the requirements imposed upon it under the terms of this Permit with respect to the condition of the Premises at the commencement of this term. Permittee hereby accepts the Premises subject to all applicable zoning, municipal, county and state laws, ordinances and regulations governing and regulating the use of the Premises, and accepts this Permit subject thereto and to all matters disclosed thereby and by any exhibits attached hereto. Permittee acknowledges that neither Permittor nor Permittor's agent has made any representation or warranty as to the suitability of the Premises for the conduct of Permittee's business or use. Except as otherwise provided herein, Permittor warrants Permittee's right to peaceably and quietly enjoy the premises without any disturbance from Permittor, or others claiming by or through Permittor. 8. PURPOSE AND USE: 8.1. Use of Premises: The Premises are leased to the Permittee for the following described purpose: 8.1.1. Operation of aircraft maintenance in accordance with the Airport Regulations and Minimum Standards pursuant to Section 8.5 below. 8.1.2. Operation of flight instruction in accordance with the Airport Regulations and Minimum Standards pursuant to Section 8.5 below. 8.1.3 Operation of aircraft rentals in accordance with the Airport Regulations and Minimum Standards pursuant to Section 8.5 below. 8.1.4 Operation of a flight store in accordance with the Airport Regulations and Minimum Standards pursuant to Section 8.5 below. 8.1.5 Operation of aviation fuel sales in accordance with the Airport Regulations and Minimum Standards pursuant to Section 8.5 below. 8.1.6 Operation of aircraft storage in accordance with the Airport Regulations and Minimum Standards pursuant to Section 8.5 below. 8.1.7 Operation of pilot concierge services which include aircraft management or management of flight departments in accordance with the Airport Regulations and Minimum Standards pursuant to Section 8.5 below. OPERATING PERMIT 5 City of Renton to Pro-Flight Aviation,Inc. 144*01, 8.2. Continuous Use: Permittee covenants that the Premises shall be continuously used for those purposes during the term of this Operating Permit, shall not be allowed to stand vacant or idle, and shall not be used for any other purpose without Permittor's written consent first having been obtained. Consent of Permittor to other types of activities will not be unreasonably withheld. 8.3. Non-Aviation Uses Prohibited: Permittee agrees that, except as expressly provided above, the Premises may not be used for uses or activities that are not related, directly or indirectly, to aviation. 8.4. Sins: No advertising matter or signs shall be at any time displayed on the subleased premises or structures without the written approval of Permittor, which will not be unreasonably withheld. One sign, or signs, of the type and dimensions specified by the Airport Manager, shall be permitted to be displayed on the Rainier and Airport Way entrance fences through the termination date of this Operating Permit. 8.5. Conformity with Rules: Permittee further covenants to keep and operate the Premises and all structures, improvements, and activities in conformity with all rules, regulations and laws now existing or hereafter adopted by Permittor, including the Airport Regulations and Minimum Standards which are incorporated herein by this reference, the Federal Aviation Administration, the State Aeronautics Commission, or other duly constituted governmental authority, all at Permittee's cost and expense. 8.6. Waste, Nuisance, Illegal Activities: Permittee shall not permit any waste, damage, or injury to the Premises or improvements thereon, nor allow the maintenance of any nuisance thereon, nor the use thereof for any illegal purposes or activities. 8.7. Increased Insurance Risk: Permittee shall not do or permit to be done in or about the Premises anything which will be dangerous to life or limb, or which will increase any insurance rates upon the Premises or other buildings and improvements at the Airport. 8.8. Aircraft Registration Compliance: The Permittee is hereby notified of the Washington State law concerning aircraft registration and the requirement that the Permittee comply therewith. See Title 47.68.250 RCW: Public Highways and Transportation. 9. HAZARDOUS SUBSTANCE USE: 9.1. Permittee's Representation and Warranty: Permittee shall not dispose of or otherwise allow the release of any Hazardous Substances in, on or under the Premises, or the Property, or in any Permittee improvements or alterations placed on the Premises by Permittee. Permittee represents and warrants to the Permittor that Permittee's intended use of the Premises does not and will not involve the use, production, disposal or bringing on to the Premises of any hazardous substance, hazardous material, waste, pollutant, or contaminant, as those terms are defined in any federal, state, county, or city law or regulation (collectively, "Hazardous Substances") other than fuels, lubricants and other products which OPERATING PERMIT 6 City of Renton to Pro-Flight Aviation,Inc. *0901 N4001F are customary and necessary for use in Permittee's ordinary course of business, provided that such products are used, stored and disposed of in accordance with applicable laws and manufacturer's and supplier's guidelines. Permittee shall promptly comply with all laws and with all orders, decrees or judgments of governmental authorities or courts having jurisdiction, relating to the use, collection, treatment, disposal, storage, control, removal or cleanup by Permittee of Hazardous Substances, in, on or under the Premises, or incorporated in any improvements or alterations made by Permittee to the Premises, at Permittee's sole cost and expense. 9.2. Standard of Care: Permittee agrees to use a high degree of care to be certain that no Hazardous Substances are improperly used, released or disposed in, on or under the Premises during the Term by Permittee, or its authorized representatives or assigns, or are improperly used, released or disposed on the Premises by the act of any third party. 9.3. Compliance Notification: In the event of non-compliance by Permittee, after notice to Permittee and a reasonable opportunity for Permittee to effect such compliance, Permittor may, but is not obligated to, enter upon the Premises and take such actions and incur such costs and expenses to effect such compliance with laws as it deems advisable to protect its interest in the Premises, provided, however that the Permittor shall not be obligated to give Permittee notice and an opportunity to effect such compliance if (i) such delay might result in material adverse harm to the Premises or the Airport, or (ii) an emergency exists. Permittee shall reimburse Permittor for the full amount of all costs and expenses incurred by Permittor in connection with such compliance activities and such obligation shall continue even after expiration or termination of the Term. Permittee shall notify Permittor immediately of any release of any Hazardous Substances in, on or under the Premises. 9.4. Indemnity: 9.4.1. Permittor shall have no responsibility to the Permittee, or any other third party, for remedial action under R.C.W. Chapter 70.105D, or other federal, state, county or municipal laws, in the event of a release of or disposition of any Hazardous Substances in, on or under the Premises during the Term that were caused by Permittee. Permittee shall defend, indemnify and hold harmless Permittor, its officials, employees, agents, and contractors (hereinafter "City Indemnitees") from any claims (including without limitation third party claims for personal injury or real or personal property damage), actions, administrative proceedings,judgments, penalties, fines, liability, loss, damage, obligation or expense, including, but not limited to, fees incurred by the Permittor or City Indemnitees for attorneys, consultants, engineers, damages, environmental resource damages, and remedial action under RCW Chapter 70.105D or other remediation, arising by reason of the release or disposition of any Hazardous Substances in, on or under the Premises during the Term that are caused by Permittee. 9.4.2. Permittee shall have no responsibility to the Permittor, or any other third party, for remedial action under RCW Chapter 70.105D, or other federal, state, county or municipal laws, nor shall Permittee have any other liability or responsibility of any kind, in the event of OPERATING PERMIT 7 City of Renton to Pro-Flight Aviation,Inc. the presence, release, or disposition of any Hazardous Substance on, in or under the Premises unless such presence, release, or disposition of any Hazardous Substance was caused by Permittee. Permittor shall defend, indemnify and hold harmless Permittee, and their directors, officers, agents, employees, and contractors (collectively, "Indemnitees") from any claims (including without limitation third party claims for personal injury or real or personal property damage), actions, administrative proceedings,judgments, penalties, fines, liability, loss, damage, obligation or expense, including, but not limited to, fees incurred by Permittee or any Indemnitee for attorneys, consultants, engineers, damages, environmental resource damages, and remedial action under RCW Chapter 70.105D or other Remediation, arising from or in connection with the presence, suspected presence, release or suspected release of any Hazardous Substances in, on or under the Premises that is not caused, in whole or in part, by Permittee or the Indemnitees. 9.4.3. The provisions of this Subsection 9.4 shall survive the expiration or sooner termination of the Term. No subsequent modification or termination of this Operating Permit by agreement of the parties or otherwise shall be construed to waive or to modify any provisions of this Section unless the termination or modification agreement or other document expressly so states in writing. 9.5. Dispute Resolution: In the event of any dispute between the parties concerning whether any Hazardous Substances were brought onto the Premises by Permittee, or whether any release of or disposition of any Hazardous Substance was caused by Permittee, the parties agree to submit the dispute for resolution by arbitration upon demand by either party. Each party shall select one (1) arbitrator. The two (2) selected arbitrators, if unable to agree within a period of thirty (30) days after such appointment, as that term is defined in Section 9.5.1 of this Operating Permit, shall select a third arbitrator. The arbitrators shall be environmental consultants with experience in the identification and remediation of Hazardous Substances. The arbitrators shall make their decision in writing within sixty (60) days after their appointment, unless the time is extended by the agreement of the parties. The decision of a majority of the arbitrators shall be final and binding upon the parties. Each party shall bear the cost of the arbitrator named by it. The expenses of the third arbitrator shall be borne by the parties equally. 9.5.1. Appointed Arbitrators: The two appointed arbitrators shall meet, and shall make their decision in writing within thirty (30) days after the date of their appointment. If the appointment date for either arbitrator is later than the other, the latter date shall be the appointment date for purposes of the thirty (30) day deadline. If the two arbitrators are unable to agree within a period of thirty (30) days after such appointment, they shall, within a period of thirty (30) days after the first thirty (30) day period, select a third arbitrator. Is such third arbitrator has not been selected or if such third arbitrator has not accepted such appointment within such thirty (30) day period, either Permittor or Permittee may apply to the head of the Seattle office of the American Arbitration Association to appoint said third arbitrator. OPERATING PERMIT 8 City of Renton to Pro-Flight Aviation,Inc. *Awe The three arbitrators shall have thirty (30) days from the date of selection of the third arbitrator to reach a majority decision unless the time is extended by agreement of both parties. The decision of the majority of such arbitrators shall be final and binding upon the parties hereto. 10. MAINTENANCE: 10.1. Maintenance of Premises: The Premises and all of the improvements or structures thereon and authorized by the Permittor for use by the Permittee, shall be used and maintained by Permittee in an operable, neat, orderly, and sanitary manner. Permittor shall not be called upon to make any improvements, alteration, or repair of any kind upon the Premises. Permittee is responsible for the clean-up and proper disposal at reasonable and regular intervals of rubbish, trash, waste and leaves around the Premises, including that blown against fences bordering the Premises, whether as a result of the Permittee's activities or having been deposited upon the Premises from other areas. Permittee shall maintain in good condition and repair the Premises, subject to ordinary wear and tear, including without limitation, the interior and exterior walls, floors, roof, and ceilings, and any structural portions of the Premises the exterior and interior portions of all doors, windows, glass, utility facilities, plumbing and sewage facilities within the building or under the floor slab including free flow up to the main sewer line, parking areas, landscaping, fixtures, heating, ventilating and air conditioning, including exterior mechanical equipment, exterior utility facilities, and exterior electrical equipment serving the Premises. Permittee shall make all repairs, replacements and renewals, whether ordinary or extraordinary, anticipated or unforeseen, that are necessary to maintain the Premises in the condition required by this Section. 10.2. Removal of Snow/Floodwater/Mud: Permittee shall be responsible for removal of snow and/or floodwaters or mud deposited there from the Premises and those areas of the sublease utilized by the Permittee, with the disposition thereof to be accomplished in such a manner so as to not interfere with or increase the maintenance activities of Permittor upon the public areas of the Airport. 10.3. Permittor May Perform Maintenance: If Permittee fails to perform Permittee's obligations under this section, Permittor may at its option (but shall not be required to) enter the Premises, after thirty (30) days' prior written notice to Permittee, and put the same in good order, condition and repair, and the cost thereof together with interest thereon at the rate of twelve (12%) percent per annum shall become due within thirty (30) days of the date of the Permittor's invoice to the Permittee. 11. ALTERATIONS: 11.1. Protection from Liens: Before commencing any work relating to alterations, additions and improvements affecting the Premises ("Work"), Permittee shall notify Permittor in writing of the expected date of commencement of the Work. Permittee shall pay, or cause to be paid, all costs of labor, services and/or materials supplied in connection with any Work. Permittee shall keep the Premises free and clear of all mechanics' and materialmen's liens and OPERATING PERMIT 9 City of Renton to Pro-Flight Aviation,Inc. �.✓ other liens resulting from any Work. Permittee shall have the right to contest the correctness or validity of any such lien if, immediately on demand by Permittor, it procures and records a lien release bond issued by a responsible corporate surety in an amount sufficient to satisfy statutory requirements therefor in the State of Washington. Permittee shall promptly pay or cause to be paid all sums awarded to the claimant on its suit, and, in any event, before any execution is issued with respect to any judgment obtained by the claimant in its suit or before such judgment becomes a lien on the Premises, whichever is earlier. If Permittee shall be in default under this Section, by failing to provide security for or satisfaction of any mechanic's or other liens, then Permittor may, at its option, in addition to any other rights or remedies it may have, discharge said lien by (i) paying the claimant an amount sufficient to settle and discharge the claim, (ii) procuring and recording a lien release bond, or (iii) taking such other action as Permittor shall deem necessary or advisable, and, in any such event, Permittee shall pay, on Permittor's demand, all reasonable costs (including reasonable attorney fees) incurred by Permittor in settling and discharging such lien together with interest thereon at the rate of twelve (12%) percent per year from the date of Permittor's payment of said costs. Permittor's payment of such costs shall not waive any default of Permittee under this Section. 11.2. Bond: At any time Permittee either desires to or is required to make any repairs, alterations, additions, improvements or utility installation thereon, or otherwise, Permittor may at its sole option require Permittee, at Permittee's sole cost and expense, to obtain and provide to Permittor a lien and completion bond in an amount equal to one and one-half(1- 1/2) times the estimated cost of such improvements, to insure Permittor against liability for mechanics and materialmen's liens and to insure completion of the work. 11.3. Permittor May Make Improvements: Permittee agrees that Permittor may, at its option and at its expense, make repairs, alterations or improvements which Permittor may deem necessary or advisable for the preservation, safety, or improvement of utilities or Airport infrastructure on the Premises, if any. Permittor shall provide thirty (30) days' advance notice of any such work and use reasonable efforts to not interfere with Permittee's use of the Premises during any such work. 11.4 Improvements: As further consideration for this Operating Permit, it is agreed that upon the expiration or sooner termination of the Term, all structures and any and all improvements of any character whatsoever installed on the Premises by Permittee, shall be and become the property of the Permittor, and title thereto shall automatically pass to Permittor at such time, and none of such improvements now or hereafter placed on the Premises shall be removed therefrom at any time without Permittor's prior written consent. During the Term, Permittee shall hold title to all improvements placed by Permittee on the Premises. Permittee covenants and agrees that Permittee will pay and satisfy in full all outstanding liens, or other debts, affecting or encumbering such improvements'before transfer of ownership of such improvements to Permittor. Permittor may, at its option, require Permittee, upon the expiration or sooner termination of the Term, if any, to remove any and all improvements and structures installed by Permittee from the Premises and repair any damage caused thereby, at Permittee's expense. OPERATING PERMIT 10 City of Renton to Pro-Flight Aviation,Inc. 12. ASSIGNMENT: 12.1. Assignment/Subletting: Any assignment, encumbrance or sublease, whether by operation of law or otherwise, without Permittor's consent shall be void and shall constitute a default by Permittee under this Operating Permit. No consent to any assignment or sublease shall constitute a waiver of the provisions of this Section and no other or subsequent assignment or sublease shall be made without Permittor's prior written consent. Before an assignment or sub-lease will be approved, the proposed assignee or sub-Permittee must comply with provisions of the then current Airport Leasing Policies, including, but not limited to the "Analysis of Tenant's Financial Capacity," independent of Permittee's compliance or Financial Capacity. Consent shall not be unreasonably withheld, conditioned, or delayed. In the case of an assignment of the full leasehold interest and/or complete sale of the stock or other interests in the entity constituting Permittee and concomitant transfer of ownership of said entity, (a) in the case of an assignment, the proposed assignee shall deliver to Permittor a written instrument duly executed by the proposed assignee stating that it has examined this Operating Permit and agrees to assume, be bound by and perform all of Permittee's obligations under this Operating Permit accruing after the date of such assignment, to the same extent as if it were the original Permittee, and (b) in the case of a stock transfer, Transferee shall deliver a written acknowledgment that it shall continue to be bound by all the provisions of this Operating Permit after the transfer. Except in the case of an assignment of the full leasehold interest, any assignment permitted herein will not relieve Permittee of its duty to perform all the obligations set out in this Operating Permit or addenda hereto. In no event will the assignment of the full leasehold interest or the complete sale of the stock or other interests in the entity constituting Permittee and concomitant transfer of ownership of said entity cause an extension of the Term of this Operating Permit. 12.2. Permitted Subletting: Permittee may sublet portions of the Premises for the purpose of aircraft hangar storage without Permittor's prior written consent, on a month-to- month or longer basis (but not longer than the Term), provided that Permittor is informed on at least an annual basis, in writing, of the name of the subtenant(s), the purpose of the sublease, the amount of the rental charged, and the type of aircraft stored (make, model and registration number). Additionally, such information shall be disclosed upon request by Permittor.) 12.3. Conditions to Assignment or Sublease: Permittee agrees that any instrument by which Permittee assigns or sublets all or any portion of the Premises shall (i) incorporate this Operating Permit by reference, (ii) expressly provide that the assignee or subtenant may not further assign or sublet the assigned or sublet space without Permittor's prior written consent (which consent shall not be unreasonably withheld, conditioned, or delayed), (iii) acknowledge that the assignee or subtenant will not violate the provisions of this Operating Permit, and (iv) OPERATING PERMIT 11 City of Renton to Pro-Flight Aviation,Inc. •+� lose in the case of any assignment, acknowledge that Permittor may enforce the provisions of this Operating Permit directly against such assignee. 12.4. Documentation: No permitted subletting by Permittee shall be effective until there has been delivered to Permittor a copy of the sublease and an executed Operating Permit and Agreement in which the subtenant agrees not to violate and to act in conformity with the terms and provisions of this Operating Permit; provided that no Operating Permit shall be required for the subletting of hangar or tie-down space for aircraft storage purposes. No permitted assignment shall be effective unless and until there has been delivered to Permittor a counterpart of the assignment in which the assignee assumes all of Permittee's obligations under this Operating Permit arising on or after the date of the assignment. 12.5 No Release of Permittee's Liability: Neither an assignment nor subletting shall be deemed a waiver of any of the provisions of this Section or release Permittee from its obligation to comply with the terms and provisions of this Operating Permit and Permittee shall remain fully and primarily liable for all of Permittee's obligations under this Operating Permit, unless Permittor otherwise agrees in writing. Notwithstanding the foregoing, in the event that Permittor's consent to assignment is obtained for a complete assignment and Assignee agrees in writing to assume all of the obligations and liabilities of this Operating Permit accruing after such assignment, Permittee shall be relieved of all liability arising from this Operating Permit and arising out of any act, occurrence or omission occurring after Permittor's consent is obtained. To the extent that any claim for which indemnification of the Permittor (including with respect to any Hazardous Substance) arises after Permitte's complete assignment for conduct predating said assignment, the Permittee shall not be relieved of obligations or liability arising from this Operating Permit. 12.6. No Merger: Without limiting any of the provisions of this Section, if Permittee has entered into any subleases of any portion of the Premises, the voluntary or other surrender of this Operating Permit, or a mutual cancellation by Permittor and Permittee, shall not work a merger and shall terminate all or any existing subleases or subtenancies. 13. DEFAULT: 13.1. Default: The occurrence of any of the following shall constitute a default by Permittee under this Operating Permit: 13.1.1. Failure to Comply with Airport Regulations and Minimum Standards: Failure to comply with the Airport Regulations and Minimum Standards, if the failure continues for a period of twenty-four (24) hours after written notice of such default is given by Permittor to Permittee. If the failure to comply cannot reasonably be cured within twenty-four (24) hours, then Permittee shall not be in default under this Operating Permit if Permittee commences to cure the failure to comply within twenty-four (24) hours and diligently and in good faith continues to cure the failure to comply. However, said inability to cure within twenty-four (24) hours, diligence and good faith notwithstanding, cannot be based on financial incapacity. OPERATING PERMIT 12 City of Renton to Pro-Flight Aviation,Inc. Win✓ 13.1.2. Failure To Perform or Cure: Failure to perform any other provision of this Operating Permit, if the failure to perform is not cured within thirty (30) days after notice of such default has been given by Permittor to Permittee. If the default cannot reasonably be cured within thirty (30) days, then Permittee shall not be in default under this Operating Permit if Permittee commences to cure the default within thirty (30) days of the Permittor's notice and diligently and in good faith continues to cure the default. 13.1.3. Appointment of Trustee or Receiver: The appointment of a trustee or receiver to take possession of substantially all of the Permittee's assets located at the Premises or of Permittee's interest in this Operating Permit, where possession is not restored to Permittee within sixty (60) days; or the attachment, execution or other judicial seizure of substantially all of Permittee's assets located at the Premises or of Permittee's interest in this Operating Permit, where such seizure is not discharged within sixty (60) days. 13.1.4. Failure to Comply With Laws: It shall be a default of this Permit if the Permittee fails to comply with any of the statutes, ordinances, rules, orders, regulations, and requirements of the federal, state, and/or city governments, any terms of this Permit and/or the underlying lease. 13.2 Additional Security: If Permittee is in default under this Operating Permit, and such default remains uncured for more than three (3) business days after Permittor gives Permittee notice of such default, then Permittor, at Permittor's option, may in addition to other remedies, require Permittee to provide adequate assurance of future performance of all of Permittee's obligations under this Operating Permit in the form of a deposit in escrow, a guarantee by a third party acceptable to Permittor, a surety bond, a letter of credit or other security acceptable to, and approved by, Permittor. If Permittee fails to provide such adequate assurance within twenty (20) days of receipt of a request by Permittor for such adequate assurance, such failure shall constitute a material breach of this Operating Permit and Permittor may, at its option, terminate this Operating Permit. 13.3. Remedies: If Permittee commits a default, then following the expiration of the notice and cure periods set forth in Section 13.1 above, Permittor shall have the following alternative remedies, which are in addition to any remedies now or later allowed by law, and Permittor shall use reasonable efforts to mitigate its damages: 13.3.1. Maintain Operating Permit in Force: To maintain this Operating Permit in full force and effect and recover any monetary charges as they become due, without terminating Permittee's right to possession, irrespective of whether Permittee shall have abandoned the Premises. If Permittor elects to not terminate the Operating Permit, Permittor shall have the right to perform all acts necessary to maintain or preserve the Premises as Permittor deems reasonable and necessary, without being deemed to have elected to terminate the Operating Permit, including removal of all persons and property from the Premises; such property may be removed and stored in a public warehouse or elsewhere at the cost of and on the account of Permittee. Notwithstanding that Permittor fails to elect to terminate the Operating Permit OPERATING PERMIT 13 City of Renton to Pro-Flight Aviation,Inc. VAW initially, Permittor at any time during the Term may elect to terminate this Operating Permit by virtue of such previous default of Permittee so long as Permittee remains in default under this Operating Permit. 13.3.2. Terminate Operating Permit: To terminate Permittee's right to possession by any lawful means, in which case this Operating Permit shall terminate and Permittee shall immediately surrender possession of the Premises to Permittor. In such event Permittor shall be entitled to recover from Permittee all damages incurred by Permittor by reason of Permittee's default including without limitation thereto, the following: (i) any amount necessary to compensate Permittor for all the detriment proximately caused by Permittee's failure to perform its obligations under this Operating Permit or which in the ordinary course of business would be likely to result therefrom, including without limitation, (A) any costs or expenses incurred by Permittor including reasonable attorney fees, and (B) such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable state law. The amounts referenced in this Section shall accrue interest at 12% per annum. 14. BINDING AGREEMENT: Subject to the restriction upon assignment or subletting as set forth herein, all of the terms, conditions, and provisions of this Permit shall be binding upon the parties, their successors and assigns, and in the case of a Permittee who is a natural person, his or her personal representative and heirs. 15. CONDEMNATION: If the whole or any substantial part of the Premises shall be condemned or taken by Permittor or any county, state, or federal authority for any purpose, then the Term shall cease as to the part so taken from the day the possession of that part shall be required for any purpose. From that day the Permittee shall have the right to either cancel this Operating Permit and declare the same null and void, or to continue in the possession of the remainder of the same under the terms herein provided. All damages awarded for such taking for any public purpose shall belong to and be the property of the Permittor, whether such damage shall be awarded as compensation for the diminution in value to the leasehold, or to the fee of the Premises herein leased. Damages awarded for the taking of Permittee's improvements located on the Premises shall belong to and be awarded to Permittee. 16. RIGHT OF INSPECTION: Permittee will allow Permittor, or Permittor's agent, free access to the Premises at all reasonable times for the purpose of inspection, or for making repairs, additions or alterations to the Premises, or any property owned by or under the control of Permittor. 17. SURRENDER OF PREMISES: Permittee shall quit and surrender the premises at the end of the term in a condition as good as the reasonable use thereof would permit, normal wear and tear excepted. Alterations, additions or improvements which may be made by either of the parties hereto on the Premises, except movable office furniture or trade fixtures put in at the expense of Permittee, shall be and remain the property of the Permittor and shall remain on and be surrendered with the Premises as a part thereof at the termination of this permit without hindrance, molestation, or injury. Permittee shall repair at its sole expense any OPERATING PERMIT 14 City of Renton to Pro-Flight Aviation,Inc. *40s r*Mw damage to the Premises occasioned by its use thereof, or by the removal of Permittee's trade fixtures, furnishings and equipment which repair shall include the patching and filling of holes and repair of structural damage. 18. INSURANCE: 18.1. Personal Property: It is agreed that Permittor shall not be held liable in any manner for, or on account of, any loss or damage to personal property of the Permittee, Permittee's invitees or other persons, which may be sustained by fire or water or other peril, or for the loss of any articles by burglary, theft or any other cause from or upon the Premises. It is acknowledged that Permittor does not cover any of the personal property of Permittee, Permittee's invitees or other persons upon the Premises through its insurance. Permittee, its invitees and other persons upon the Premises are solely responsible to obtain suitable personal property insurance. 18.2. Liability Insurance. The Permittee agrees to maintain in force during the term of this Permit commercial general liability insurance written by an admitted company authorized to do business in the State of Washington against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. The limits of liability shall be in an amount of not less than $1,000,000.00 per occurrence, $2,000,000 aggregate. The limits of said insurance shall not, however, limit the liability of Permittee hereunder. The insurance policy shall include a Landlord's Protective Liability endorsement attached thereto. 18.3. Insurance Policies: Insurance required hereunder shall be written in companies acceptable to Permittor. Permittor reserves the right to establish and, from time-to-time, to increase minimum insurance coverage amounts. Notice of increased insurance requirements shall be sent to the Permittee at least forty (45) days prior to the annual renewal date of the Permittee's insurance. Prior to possession, the Permittee shall deliver to Permittor copies of policies of such insurance acquired by Permittee, or certificates evidencing the existence and amounts of such insurance, with loss payable clauses satisfactory to Permittor. Permittor shall be named as an additional insured with that coverage being primary and non-contributory to any other insurance coverage available to the City. The Permittee shall provide the City with written notice of any policy cancellation, within two business days of their receipt of such notice. 18.4. Insurance Maintained Throughout Term: Permittee shall not do or permit to be done anything which shall invalidate the insurance policies referred to above. Permittee shall forthwith, upon Permittor's demand, reimburse Permittor for any additional premiums attributable to any act or omission or operation of Permittee causing such increase in the cost of insurance. If the Permittee shall fail to procure and maintain said insurance the Permittor may, but shall not be required to, procure and maintain the same, but at the expense of Permittee. OPERATING PERMIT 15 City of Renton to Pro-Flight Aviation,Inc. 18.5. Waiver of Subrogation: Permittee and Permittor each waives any and all rights of recovery against the other, or against the officers, employees, agents and representatives of the other, for loss of or damage to such waiving party or its property or the property of others under its control, where such loss or damage is insured against under any insurance policy in force at the time of such loss or damage. Permittee shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carriers that the foregoing mutual waiver of subrogation is contained in this Operating Permit. 19. LIMITATION UPON PERMITTOR'S LIABILITY. Permittor shall not be liable for any damage to property or persons caused by, or arising out of (a) any defect in or the maintenance or use of the Premises, or the improvements, fixtures and appurtenances of which the premises constitute a part; or (b) water coming from the roof, water pipes, flooding of the Cedar River or other body of water, or from any other source whatsoever, whether within or without the Premises; or (c) any act or omission of any Permittee or other occupants of the building, or their agents, servants, employees or invitees thereof. 20. INDEMNITY: Permittee covenants to defend, indemnify and save harmless Permittor against any and all claims arising from (a) the conduct and management of or from any work or thing whatsoever done in or about the Premises or the improvements or equipment thereon during the Operating Permit term, or (b) arising from any act or negligence of the Permittee or any of its agents, contractors, patrons, customers, or employees, or invitees, or (c) arising from any accident, injury, or damage whatsoever, however caused, to any person or persons, or to the property of any person, persons, corporation or other entity occurring during the Operating Permit term on, in, or about the Premises, and from and against all costs, attorney's fees, expenses, and liabilities incurred in or from any such claims or any action or proceeding brought against the Permittor by reason of any such claim, except such claims arising directly or indirectly out of Permittor's sole act or omission. Permittee, on notice from Permittor, shall resist or defend such action or proceeding forthwith with counsel reasonably satisfactory to, and approval by Permittor. 21. HOLDING OVER: Permittee understands that upon expiration of the term of this permit, Permittee must execute a new permit with the Permittor as a condition to remaining on the premises. Permittee further understands that if, without execution of any extension or renewal of this permit, Permittee should remain in possession of the premises after expiration or termination of the term of this permit, notwithstanding any extension of its sublease with Lessee, then the Lessee shall be in default of its lease, LAG 09-006 and Permittor may evict the Lessee and the Permittee. All the conditions, terms and provisions of this permit shall be applicable during such holding over. 22. NO WAIVER: It is further covenanted and agreed between the parties hereto that no waiver by Permittor of a breach by Permittee of any covenant, agreement, stipulation, or condition of this Operating Permit shall be construed to be a waiver of any succeeding breach of the same covenant, agreement, stipulation, or condition, or a breach of any other covenant agreement, stipulation, or condition. OPERATING PERMIT 16 City of Renton to Pro-Flight Aviation,Inc. 23. NOTICES: All notices or requests required or permitted under this Operating Permit shall be in writing; shall be personally delivered, delivered by a reputable express delivery service such as Federal Express or DHL, or sent by certified mail, return receipt requested, postage prepaid, and shall be deemed delivered on receipt or refusal. All notices or requests to Permittor shall be sent to Permittor at Permittor's address set forth below and all notices or requests to Permittee shall be sent to Permittee at Permittee's address set forth below. Permittor's Address: Airport Manager 616 West Perimeter Road, Unit A Renton, Washington 98057 Permittee's Address: Pro-Flight Aviation, Inc. 750 West Perimeter Road, Unit 1 Renton, WA 98057 24. DISCRIMINATION PROHIBITED: 24.1. Discrimination Prohibited: Permittee covenants and agrees not to discriminate against any person or class of persons by reason of race, color, creed, sex, national origin, or any other class of person protected by Federal or State law or the Renton City Code, in the use of any of its facilities provided for the public in the Airport. Permittee further agrees to furnish services on a fair, equal and not unjustly discriminatory basis to all users thereof, and to charge on a fair, reasonable and not unjustly discriminatory basis for each unit of service; provided that Permittee may make reasonable and non-discriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. 24.2. Minority Business Enterprise Policy: It is the policy of the Department of Transportation that minority business enterprises as defined in 49 C.F.R. Part 23 shall have the maximum opportunity to participate in the performance of leases as defined in 49 C.F.R. 23.5. Consequently, this Operating Permit is subject to 49 C.F.R. Part 23, as applicable. No person shall be excluded from participation in, denied the benefits of or otherwise discriminated against in connection with the award and performance of any contract, including Operating Permits covered by 49 C.F.R. Part 23, on the grounds of race, color, national origin or sex. 24.3. Application to Sub-leases: Subject to the provisions of Section 12 of this Permit, Permittee agrees that it will include the above clause in all assignments of this Operating Permit or sub-leases, and cause its assignee(s) and sub-lessee(s)to similarly include the above clause in further assignments or sub-leases. 25. FORCE MAJEURE: In the event that either party hereto shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, inability to procure materials, failure of power, restrictive governmental laws or regulations, riots, insurrections, war, or other reason of like nature not the fault of the party delayed in performing work or doing acts required under the terms of this Operating Permit, then performance of such act shall be extended for a period equivalent to OPERATING PERMIT 17 City of Renton to Pro-Flight Aviation,Inc. *✓ *MW the period of such delay. The provisions of this Section shall not, however, operate to excuse Permittee from the prompt payment of any payment required by the terms of this Operating Permit, to be made by Permittee. 26. TRANSFER OF PREMISES BY PERMITTOR: In the event of any sale, conveyance, transfer or assignment by Permittor of its interest in the Premises, Permittor shall be relieved of all liability arising from this Operating Permit and arising out of any act, occurrence or omission occurring after the consummation of such sale, conveyance, transfer or assignment. The Permittor's transferee shall be deemed to have assumed and agreed to carry out all of the obligations of the Permittor under this Operating Permit. 27. ATTORNEYS' FEES AND COSTS: COLLECTION COSTS: If either party brings any action for relief against the other party, declaratory or otherwise, arising out of this Operating Permit, including any action by Permittor for the recovery of Rent or possession of the Premises, the prevailing party shall be entitled to reasonable attorneys' fees and costs of litigation as established by the court. If the matter is not litigated or resolved through a lawsuit, then any attorneys' fees for collection of past-due rent or enforcement of any right of Permittor or duty of Permittee hereunder shall entitle Permittor to recover, in addition to any late payment charge, any costs of collection or enforcement, including reasonable attorney's fees. For the purposes of this Section 27, attorney's fees shall include a reasonable rate for attorney's employed by the City. 28. EMERGENCY RESPONSE: Permittee must provide to the Airport Manager reasonable access and response in times of emergency or urgency. The Permittee is wholly responsible to keep an up-to-date listing of aircraft types, identification, and owners on file and at the Airport Manager's office. 29. DEFINITIONS: As used in this Operating Permit, the following words and phrases, whether or not capitalized, shall have the following meanings: "Additional Rent" means any charges or monetary sums to be paid by Permittee to Permittor under the provisions of this Operating Permit other than Minimum Monthly Rent. "Authorized representatives" means any officer, agent, employee, independent contractor or invitee of either party. "Environmental Laws and Requirements" means any and all federal, state, local laws, statutes, ordinances, rules, regulations and/or common law relating to environmental protection, contamination, the release, generation, production, transport, treatment, processing, use, disposal, or storage of Hazardous Substances, worker health or safety or industrial hygiene, and the regulations promulgated by regulatory agencies pursuant to these laws, and any applicable federal, state, and/or local regulatory agency-initiated orders, requirements, obligations, directives, notices, approvals, licenses, or permits. OPERATING PERMIT 18 City of Renton to Pro-Flight Aviation,Inc. `r✓' **Am*, "Expiration" means the coming to an end of the time specified in the Operating Permit as its duration, including any extension of the Term. "Hazardous Substances" means any and all material, waste, chemical, compound, substance, mixture or byproduct that is identified, defined, designated, listed, restricted or otherwise regulated under any Environmental Laws and Requirements as a "hazardous constituent," "hazardous substance," "hazardous material," "extremely hazardous material," "hazardous waste," "acutely hazardous waste," "hazardous waste constituent," "infectious waste," "medical waste," "biohazardous waste," "extremely hazardous waste," "pollutant," "toxic pollutant" or "contaminant." The term "Hazardous Substances" includes, without limitation, any material or substance which is (i) hexavalent chromium; (ii) pentachlorophenol; (iii) volatile organic compounds; (iv) petroleum; (v) asbestos; (vi) designated as a "hazardous substance" pursuant to Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321); (vii) defined as a "hazardous waste" pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903); (viii) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601); or (ix) designated as a "hazardous substance" pursuant to the Washington Model Toxics Control Act, RCW 70.105D.010 et seq. "Parties" means Permittor and Permittee. "Person" means one or more human beings, or legal entities or other artificial persons, including without limitation, partnerships, corporations, trusts, estates, associations and any combination of human beings and legal entities. "Rent" means Minimum Monthly Rent, as adjusted from time to time under a Lease, and Additional Rent. 30. GENERAL PROVISIONS: 30.1. Entire Agreement: This Operating Permit sets forth the entire agreement of the parties as to the subject matter hereof and supersedes all prior discussions and understandings between them. This Operating Permit may not be amended or rescinded in any manner except by an instrument in writing signed by a duly authorized officer or representative of each party hereto. In the event of a conflict between the terms of this Permit and the sublease agreement between Permittee and Lessee, the terms of this Permit supersede. 30.2. EXEMPTION OF PERMITTOR FROM LIABILITY: Permittor or Permittor's agents shall not be liable for injury to persons or to Permittee's business or loss of income therefrom or for damage which may be sustained by the person, goods, wares, merchandise or property of Permittee, its authorized representatives, or any other person in or about the Premises, caused by or resulting from (a) fire, electricity, gas, water or rain which may leak or flow from or into any part of the Premises, (b) any defect in or the maintenance or use of the Premises, OPERATING PERMIT 19 City of Renton to Pro-Flight Aviation,Inc. or any improvements, fixtures and appurtenances thereon, (c) the Premises or any improvements, fixtures and appurtenances thereon becoming out of repair, (d)the breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires, appliances, plumbing, heating, ventilating or air conditioning or lighting fixtures of the Premises, (e) flooding of the Cedar River or other body of water, or from any other source whatsoever, whether within or without the Premises; or (f) any act or omission of any other tenant or occupant of the building in which the Premises are located, or their agents, servants, employees, or invitees, provided, that the foregoing exemption shall not apply to losses to the extent caused by Permittor's or its agents', contractors', or employees' negligence or willful misconduct. 30.3. Governing Law: This Operating Permit shall be governed by, and construed and enforced in accordance with, the laws of the State of Washington. 30.4. Severability: Should any of the provisions of this Operating Permit be found to be invalid, illegal or unenforceable by any court of competent jurisdiction, such provision shall be stricken and the remainder of this Operating Permit shall nonetheless remain in full force and effect unless striking such provision shall materially alter the intention of the parties. 30.5. Jurisdiction and Venue: In the event any action is brought to enforce any of the provisions of this Operating Permit, the parties agree to be subject to exclusive in personam jurisdiction in the Superior Court of the State of Washington in and for the County of King or in the United States District Court for the Western District of Washington. 30.6. Waiver: No waiver of any right under this Operating Permit shall be effective unless contained in a writing signed by a duly authorized officer or representative of the party sought to be charged with the waiver and no waiver of any right arising from any breach or failure to perform shall be deemed to be a waiver of any future right or of any other right arising under this Operating Permit. 30.7. Captions: Section captions contained in this Operating Permit are included for convenience only and form no part of the agreement between the parties. 30.8. Assignee as Permittee: The term "Permittee" shall be deemed to include the assignee where there is a full assignment of the Operating Permit. 30.9. Effectiveness: This Operating Permit shall not be binding or effective until properly executed and delivered by Permittor and Permittee. 30.10. Gender and Number: As used in this Operating Permit, the masculine shall include the feminine and neuter, the feminine shall include the masculine and neuter, the neuter shall include the masculine and feminine, the singular shall include the plural and the plural shall include the singular, as the context may require. OPERATING PERMIT 20 City of Renton to Pro-Flight Aviation,Inc. NOW 30.11. Time of the Essence: Time is of the essence in the performance of all covenants and conditions in this Operating Permit for which time is a factor. 30.12. Joint and Several Liability: If Permittee is composed of more than one person or entity, then the obligations of all such persons and entities under this Operating Permit shall be joint and several. 30.13. No Recordation Without Consent of Permittor: Permittee shall not record this Operating Permit or any memorandum of this Operating Permit without Permittor's prior written consent. 30.14. Cumulative Remedies: No remedy or election hereunder shall be deemed exclusive, but shall, wherever possible, be cumulative with all other remedies at law or in equity. 30.15. Corporate Authority: If Permittee is a corporation or limited liability company, each individual executing this Operating Permit on behalf of said corporation or limited liability company represents and warrants that he is duly authorized to execute and deliver this Operating Permit on behalf of said corporation or limited liability company pursuant to duly enacted resolutions or other action of such corporation or limited liability company and that this Operating Permit is binding upon said corporation or limited liability company in accordance with its terms. 30.16. Addenda: The provisions of this Operating Permit shall be subject to those of any Addenda and Exhibits attached hereto. OPERATING PERMIT 21 City of Renton to Pro-Flight Aviation,Inc. 1400, VMW PERMITTEE: PERMITTOR: Pro-Flight Aviation, Inc. THE CITY OF RENTON a Washington corporation a Washington municipal cor ration aia- 0, P" - BY M2ZAA),r-, ,4 Denis Law its: Owner/Presid7;01 Mayor 3 Date: ZDate: ATTEST:9C7O By 7tWZZG l.UGZ ism Bonnie Wal on, ity Clerk Date: d0! 4AAoved as to legal form: Larry Warren, City Attorney OPERATING PERMIT 22 City of Renton to Pro-Flight Aviation,Inc. `ago STATE OF WASHINGTON ) ss. COUNTY OF kl,,,14 ) I certify that I know or have satisfactory evidence that 0,1.4,vr is the person who appeared before me, and s/he acknowledged that s/he signed this instrument, on oath stated that s/he was authorized to execute the instrument and acknowledged it as the of X4 a -, �Ie/jQ , to be the free and voluntary act of such Co I loX.*776,,J for the uses and purposes mentioned in the instrument. N� Dated this 2 a ' day of 4 ea 2013. SANDRA M. ORPHAN [Si Lure of Notary] STATE OF WASHINGTON NOTARY PUBLIC [Print Name of Notary] MY COMMISSION EXPIRES 09-22-13 Notary Public in and for the State of " Washington, residing at 517,4779­-'� My commission expires: �9,/aa,/ice OPERATING PERMIT 23 City of Renton to Pro-Flight Aviation,Inc. "ire vri► STATE OF WASHINGTON ) ss. COUNTY OF ) I certify that I know or have satisfactory evidence that is the person who appeared before me, and s/he acknowledged that s/he signed this instrument, on oath stated that s/he was authorized to execute the instrument and acknowledged it as the of a ,to be the free and voluntary act of such for the uses and purposes mentioned in the instrument. Dated this day of 1201 . [Signature of Notary] [Print Name of Notary] Notary Public in and for the State of Washington, residing at My commission expires: OPERATING PERMIT 24 City of Renton to Pro-Flight Aviation,Inc. EXHIBIT A Sublease Map OPERATING PERMIT 25 City of Renton to Pro-Flight Aviation,Inc. Renton Gateway Center 750 W. Perimeter Rd Renton, WA 98057 Street Side nh j4 jr '41 Runway Side LEASE AGREEMENT Triple Net (NNN) lease PARTIES 1. This agreement is entered into by each of the following parties: Lessor: Renton Gateway Center, LLC. 750 W. Perimeter Rd Unit#1 Renton, WA 98057 Lessee: Pro Flight, Inc. C/O Diane and Bernie Paholke 750 W. Perimeter Rd Unit#1 Renton, Wa 98057 The singular terms 'Lessor' and 'Lessee' as used below shall include each person or other legal entity identified as such in this paragraph. Each Lessor and Lessee agrees to be bound by the following terms and conditions. PREMISES 2.0 Lessor hereby leases to Lessee those premises described in Exhibit'A' hereto, commonly known as: 750 W. Perimeter Rd, Renton,WA 98057 Approximate size: 9,400 Sq Ft plus or minus Total building size: 31,000 Sq Ft Lessee's pro-rata share: 30.32 % CONDITIONS 3.0 The obligations of this lease are conditioned upon: (1) obtainment of approval of intended use by each applicable governmental entity without conditions deemed unacceptable to Lessor in its sole discretion. This approval shall be obtained no later than: Julyl st, 2011. This lease is also subject to the terms, conditions and rule of operation of the lease that was executed by and between Renton Gateway Center, LLC and City of Renton for the Land on which the hangars have been erected. The Lessee's of this lease agree to comply with all of the terms and conditions of this land lease agreement. TERM 3.1 The term of this lease is 48 months, commencing on July 7, 2011 and ending July 31, 2015, unless sooner terminated pursuant to any provision set forth below. 3.2 If for any reason Lessor cannot deliver possession of the premises to Lessee on the commencement date, such failure shall not be deemed to be a breach of duty, in contract or in tort, of the Lessor, shall not render Lessor liable for damages of any nature whatsoever, and shall not affect the validity of this lease or release Lessee from any obligation contained herein. In such case, the commencement and termination dates set forth in this paragraph shall be extended for a period equal to the period of delay, which shall end when Lessor tenders possession of the premises to Lessee. Lessee shall not be obligated to pay rent to Lessor during that period of delay, and if the delay continues for longer than ninety (90) days from the original commencement date, Lessee shall have the option to declare this lease canceled. Such option shall be exercised by giving written notice of cancellation to Lessor within ten (10) days after the ninety day period has run. If it is not so exercised within that time, Lessor shall have an additional ninety days to deliver possession under the conditions set forth in this paragraph. 3.3 Force Majeure: Neither party shall be held liable for any delay or failure in performance of any part of this Lease arising out of or resulting from any cause beyond its control and without its fault or negligence including, without limitation, acts of God, acts or omissions of civil or military authority, government regulations, embargoes, epidemics, war, terrorists acts, riots, civil commotion or civil uprisings, insurrections, earthquakes, floods, power blackouts and other caused beyond a party's control, whether or not similar to the foregoing conditions. 3.4 If Lessee occupies the premises prior to the original Commencement Date, such occupancy will be subject to the provisions of this lease and shall not advance the termination date, nor alter the anniversary date. Lessee shall pay rent for such occupancy pro rata at the rate set forth below: 3.5 Options to Renew. Pro-Flight Aviation, Inc. may renew this lease on a month to month basis. Any renewals that are not month to month will be for period determined by Lessee, and will be in accordance with initial lease policies. Lessee will notify Lessor within 90 days prior to lease termination date. Lessor will have this option for the duration of Lessor owning the building/structure. 3.6 Lessee may decrease size of leased premises during lease term. Lessee will notify Lessor with a minimum of a 30 day written notice. Annual Base Rent will be decreased accordingly to square footage decrease. Lessee may cancel lease with a 30 day notice. RENT 4.0 Annual Base Rent for FBO amount: $33,000.00 (Thirty-three-thousand dollars.) Annual Base Rent for Hanger A and B amount: $0.00 (zero dollars.) 4.1 Base Rent and CPI Adjustment: Lessee shall pay to Lessor at the address set forth above, or to such other parties or place as Lessor may otherwise designate in writing, the sum of$2,750.00 (Two-thousand-seven-hundred-fifty dollars) in United States dollars per month, payable in advance on the first day of each month during the first year of the term hereof(the 'base rent'). On each anniversary of the commencement date, the base rent shall be increased by an amount equal to the previous year's rent multiplied by the percentage increase in the Consumer Price Index, and this sum shall become the base rent for subsequent adjustments. The basis for computing any such increase shall be United States Department of Labor Statistics Consumer Price Index for'All West' which is published for the period nearest each anniversary. If that Index for that period shows an increase, the rent shall be increased in an amount equal to the index increase. If there is no increase in the Index,the rent shall remain the same as in the previous year. If the specified Index is discontinued or revised, such other governmental index or computation which replaces the specified index shall be used so as to obtain substantially the same result as if the specified index had not been discontinued or revised. 4.2 Proration. If the commencement date is on any other than the first day of a month, the first month's rent shall be the base rent divided by the number of days in that month that Lessee occupies the premises. Such prorated amount shall be payable on the first day of occupancy. 4.3 Waiver of Right to Setoff. Each payment obligation of Lessee under this lease is independent of any duty created by contract or arising by operation of law that is owed to Lessee by Lessor, other than those duties of Lessor specified in this agreement. Lessee hereby waives any right of equitable setoff it may have or claim to have against Lessor now or in the future, and agrees that each payment obligation will be timely met notwithstanding the existence of any independent claim Lessee may have against Lessor. COMMON AREAS 5.0 Common areas include parking areas, entrances, and exits thereto, are the responsibility of the Lessor, and Lessor shall, during the term of this lease, maintain all of the areas designated as 'common areas' in such a manner and at such a cost as the Lessor in their sole judgment may reasonably determine. Lessor reserves the right, from time to time, to reasonably alter said common area and to exercise control and management of the common areas and to establish, modify, change and enforce such reasonable rules and regulations as Lessor in its discretion may deem desirable. 5.1 Lessee agrees to abide by and conform to such rules and regulations and shall be responsible for the compliance with same by its employees, agents, customers and invitees. The failure of Lessor to enforce any such rules and regulations against Lessee or any other tenant shall not be deemed to be a waiver of same, and shall not prevent enforcement of the same or other rules or regulations by Lessor against this Lessee or others. 5.2 Lessor shall have the right to close all or any portion of the common areas at such times and for such periods as may, in the opinion of Lessor, be necessary to prevent a dedication thereof, or to preserve the status thereof as private property, or to prevent the accrual of any rights in any person; and Lessor may also close said common areas for purposes of maintenance and repair as may be required from time to time. Such closure shall not be deemed an eviction, and Lessor shall not be liable to Lessee for any loss resulting therefrom. MAINTENANCE AND REPAIRS 6.0 The premises, including all fixtures and appurtenances, shall at the inception of the lease term be in the configuration and condition as specified in the plans and specifications for tenant improvements. Lessor shall have the obligation to maintain and keep the roof and building exterior in good repair, and responsible for building structural, electrical, and mechanical. Lessee shall be responsible for interior maintenance, lighting, and hangar door. Lessee shall permit no waste, damage or injury to the premises, and shall be solely responsible for repairs to any part of the premises damaged as result of actions of the Lessee and/or its invitees. Should Lessee be responsible for damages, those damages shall be repaired by Lessor and Lessee shall promptly reimburse Lessor. 6.1 Premises shall at all times be kept and used in accordance with all laws, ordinances, directions, rules and regulations of the health officers, Fire Marshall, building inspectors, and other proper officials all at the sole cost and expense of Lessee. UTILITIES AND SERVICES 7.0 Lessee shall pay its own separately metered electric service. Gas, water, sewer, and garbage removal services will be determined based on triple net charges that are pro-rated to the building. (See Section 7.4 of this lease). 7.1 Lessee is to pay for all other public utilities not specifically stated herein which shall be used in, or charged against, the leased premises as a result of Lessee's occupancy during the term of this lease. Lessor shall not be liable for any injury or damages suffered as a result of the interruption of any utility services by fire or other casualty, strike, riot, vandalism, the making of necessary repairs or improvements, or any other cause beyond Lessor's control. 7.2 All license or permit fees, business and occupation taxes, and any other taxes and fees applicable to property of Lessee or business conducted on the premises presently in affect, or subsequently levied by Federal, State or Local governments, or any political subdivision thereof shall be the responsibility of the Lessee. When possible, Lessee shall cause its trade fixtures, furnishings, equipment and all of its other personal property to be assessed and billed separately from the real property. Lessee shall pay Lessor the taxes attributable to such Lessee's property within ten (10) days after the receipt of a written statement setting forth the taxes applicable to Lessee's property. 7.3 Should there presently be in effect, or should there be enacted during the term of this lease any law, statute, or ordinance levying any tax other than Federal, State or City income taxes directly or indirectly in whole or in part upon rents or the income from real estate or rental property, or increasing any such tax, Lessee shall reimburse Lessor monthly as additional rent at the same time as minimum rental payments are due hereunder for the actual amount of such taxes paid. 7.4 This is a triple net lease. Lessor shall pay building and common area expenses, and charge Lessee its pro-rata share of same. This will include,but not limited to, building insurance, outside maintenance and landscaping, management fees, and garbage. These common area charges shall be approximately $1.53 (one-dollar-fifty-three cents)per square foot of rentable area for the first year, and shall be adjusted annually thereafter as per actual costs. This obligation is over and above the base rent amount due, and shall be payable to Lessor at the same time that monthly rent payments are due. Lessee also covenants and agrees to pay for its own telephone, utilities,janitorial and interior maintenance,including ceiling, floors, electrical and plumbing systems. INSPECTION OF PREMISES 8.0 Lessee agrees that full opportunity has been given for inspection of the premises for purposes of ascertaining suitability for Lessee's intended use and the physical condition of them, and that acceptance of possession is on an 'as is' basis, unless otherwise agreed in writing, except for any improvements listed in Additional Provisions,below. USE OF PREMISES 9.0 Lessee shall use the premises only for Aircraft Maintenance, Flight School, Fixed Base Operation, Aircraft Rental, Flight Store, Fuel Services, Aviation Services, Car Rental, Concierge Services, Aircraft Storage, Flight Department Services, and any other use as Lessor may approve in writing. This use shall be a permitted use under all applicable laws, ordinances, and governmental or municipal regulations, and shall not make or permit any use of the premises which may be dangerous to life, limb, or property or which increases the premium cost or invalidates any policy or insurance covering or carried on the premises, the building or its contents. Lessee shall not obstruct the common areas or use them for business or display purposes. Lessee shall not make any noise or permit any odor to emit from the premises which is objectionable to the public, to the other tenants, or to Lessor. 9.1 Lessee shall permit no lien or other encumbrance to attach to the premises. In the event that any lien or other encumbrance should attach to the premises because of Lessee's actions or inaction, or that of its agent, employees or invitees, Lessee shall immediately satisfy the same, and shall defend, indemnify and hold Lessor harmless for the same and for any damages, costs and attorney's fees Lessor may realize therefrom. Liens or encumbrances due to Pro-Flight Aviation, Inc.'s ownership interest in Renton Gateway Center, LLC is exempt from paragraph 9.1 of this lease. ALTERATIONS 10.0 Lessee will not make alterations, or additions to, the leased premises without prior approval of the Lessor. All alterations shall comply with city and/or state building codes. Lessor approval shall not be unreasonably withheld. INDEMNIFICATION 11.0 The Lessor and its employees, and agents shall not be liable for any injury to any persons or for damage to any property, regardless of how such injury or damage may be caused, as a result of the condition of, or in any way related to the Premises, the use of the Premises or the operations of Lessee in, on or about the Premises by Lessee or others. Lessee shall indemnify, defend and hold harmless Lessor and its agents, and employees, from and against all claim, liabilities, losses, damages and expenses (including attorney fees and cost) for injury to or death of any person or loss of or damage to property in our upon said Premises or arising out of or relating to Lessee's operations thereon, and including the person and property of Lessee, its employees, agents, invitees, licensees or others, however caused, it being understood and agreed that all property kept, stored or maintained in or upon the Premises shall be at the risk of Lessee. 11.1 The foregoing immunity is specifically intended to constitute a waiver of Lessee's immunity under the Washington Industrial Insurance Act, RCW Title 51, to the extent necessary to provide Lessor with a full and complete indemnity from claims made by Lessee and its employees. The foregoing shall be in addition to Lessee's obligation to supply the insurance as required herein and not in discharge of or substitution for same. 11.2 Lessor and Lessee agree that Lessee's recourse against Lessor for any obligations of Lessor under this Lease shall be limited to Lessee's execution against Lessor right, title and interest from time to time in the Premises. Neither Lessor nor any of its partners, shareholders, officers, directors or other principals shall have any personal liability to Lessee as the result of any breach or default by Lessor under this Lease. INSURANCE 12.0 Liability Insurance. Lessee shall, at its own expense, procure and maintain in full force and effect, comprehensive general liability insurance with products and completed operation coverage and contractual coverage to insure any obligation under this Lease, in responsible companies licensed to do business in the State of Washington, which shall insure Lessee and its agents and employees against all claims for injuries or death to persons occurring in or about the leased premises in a combined single limit amount of not less than $1,000,000.00. Lessee agrees to furnish Lessor with policies or certificates of such insurance naming Lessor as an additional insured prior to the commencement of the term hereof. Each policy shall be non- cancelable without at least thirty (30) days written notice to Lessor. If Lessee fails to provide such certificates within the time required, Lessor, may at it option, obtain such insurance and Lessee shall reimburse Lessor for all premiums and costs therefore within thirty one (3 1) days of Lessor's written demand. Any revisions to the policy shall be promptly forwarded to Lessor. 12.1 Property Insurance. Lessor agrees to provide fire insurance in reasonable amounts on the building only, not contents. Lessee covenants and agrees that it will not do or permit anything to be done on the leased premises during the term hereof, which will increase the rate of Lessor's insurance on the building which the leased premises form a part, above the minimum rate which would be applicable in such premises for the Lessee's type of business; and Lessee agrees that in the event it shall cause such an increase in the rate of insurance, it will, upon request of Lessor, promptly pay to the Lessor, as additional rent, any increase in premiums resulting there from. 12.2 Lessee shall be responsible to maintain appropriate insurance for its property and contents in the premises. 12.3 Waiver of Subrogation. Lessor and Lessee each release and relieve the other and waive their entire right of recovery against the other for loss or damage arising out of or incident to the perils covered by the special form property insurance policy with replacement cost endorsement and business income and extra expense endorsements (including loss of rents) approved for use in the State of Washington which occur in, on or about the premises, whether caused by the negligence of either party, their agents, employees, or otherwise. Each party shall obtain from its insurers provisions permitting waiver of any claim against the other party for loss or damage within the scope of the above insurance. TAXES 13.0 Real Property Taxes: /King County Assessor improvement Taxes: The Lessor shall pay the real property taxes assessed against the land and buildings of which the leased premises is a part and the Lessee shall reimburse the Lessor for the cost of their pro rata portion of said taxes. 13.1 Personal Property Taxes: Lessee shall be responsible for any tax on his personal property located on the leased premises. 13.2 Business Taxes: Lessee shall pay all special taxes and assessments or license fees levied, assessed or imposed by law or ordinance, by reason of the use of the premises for the specific purposes set forth in this agreement. DAMAGE OR DESTRUCTION 14.0 Subject to the provisions of this Paragraph 14, if the premises are damaged and such damage was caused by a fire or other casualty included within the classification of casualty as defined in a Standard fire and extended coverage real property insurance policy, Lessor shall, at Lessor's expense, repair such damage, but not Lessee's fixtures or equipment, and this lease shall continue in full force and effect. Provided however, in the event the premises are damaged to such an extent to render the same untenantable in whole or in a substantial part thereof, or destroyed, it shall be optional with the Lessor to repair or rebuild the same, and after the happening of any such event, the Lessee shall give Lessor immediate written notice thereof. Lessor shall have not more than thirty (30) days after notification to notify the Lessee in writing of Lessor's intention to repair or rebuild said leased premises, or the part so damaged as aforesaid, but not Lessee's fixtures or equipment, and if Lessor elects to repair or rebuild said premises, Lessor shall prosecute the work of such repairing or rebuilding without unnecessary delay, and during such period the rent of said premises shall be abated in the same ratio that that portion of the premises rendered for the time being unfit for occupancy shall bear to the whole of the leased premises. If the Lessor shall fail to give the notice aforesaid, Lessee shall have the right to declare this lease terminated by written notice served upon the Lessor. In the event the building in which premises hereby leased are located shall be damaged (even though the premises thereby leased shall not be damaged thereby) to such an extent that in the opinion of Lessor it shall not be practicable to repair or rebuild, or is destroyed, then it shall be optional with Lessor to terminate this lease by written notice served on Lessee within ninety (90) days after such damage or destruction. 14.1 If Lessor gives notice of intent to repair or reconstruct the damaged premises as set forth above, Lessor shall be relieved of such obligation and Lessor may terminate the Lease if Lessor is unable to obtain the necessary financing, labor or materials, or if Lessor is unable to perform such obligation due to any cause beyond its control, including, but not limited to strikes, lockouts and labor disturbances, acts of civil or military authorities, restrictions by municipal authorities, restrictions by municipal ordinances or federal or state statutes and military activity. 14.2 If Lessor gives notice of intent to repair or restore the premises under the provisions of Paragraph 14, and shall not commence such repair or restoration within ninety (90) days after such notice, Lessee may elect to terminate this lease by written notice to Lessor. Upon termination of this lease pursuant to this Paragraph 14, an equitable adjustment shall be made concerning advance rent and any advance payments made by Lessee or Lessor. 14.3 Notwithstanding the above, if the cost to repair damage to the Building that occurs during the last 20 months of the Lease Term exceeds 30% of the insurable replacement cost of the Building, Lessor shall have the option to terminate this Lease by giving written notice to the Tenant within sixty (60) days after the date of damage and either party may terminate this Lease by delivering written notice to the other within thirty (30) days after the date Lessee receives Lessor's notice. In addition, if the cost to repair any damage to the Premises or the Building exceeds the insurance proceeds available to Lessor, and Lessor elects not to repair such damage, then Lessor shall have the right to terminate this Lease by written notice to Lessee given within sixty (60) days after such damage occurred. EMINENT DOMAIN 15.0 If the whole of the premises shall be taken by any public authority under the power of Eminent Domain, or purchased by the condemner in lieu thereof, then the term of this lease shall cease as of the date possession is taken by such public authority. If only a part of the premises shall be so taken, the lease shall terminate only as to the portion taken and shall continue in full force and effect as to the remainder of said premises, and the minimum rent shall be reduced proportionately; provided, however if the remainder of said premises cannot be made tenantable for the purposes for which Lessee has been using the premises, or if more than twenty-five percent(25%) of the rentable square footage of the premises shall be so taken, then either party, by written notice to the other, given at least thirty (30) days prior to the date that possession must be surrendered to the public authority, may terminate this lease effective as of such surrender of possession. If any part of the property described in Exhibit 'A' other than the premises shall be so taken as to render, in Lessor's sole opinion, the termination of this lease beneficial to the remaining portion of the property described in Exhibit'A', Lessor shall have the right to terminate this lease within sixty(60) days of said taking. Whether whole or partial, Lessor shall be entitled to any and all awards, settlements, or compensation which may be given for the land and buildings. Lessee shall have no claim against Lessor for the value of any unexpired term of this lease. TRASH, GARBAGE, HAZARDOUS/TOXIC SUBSTANCES 16.0 Lessee shall place all trash, garbage, and recyclables in Lessor supplied receptacles. Lessee shall not burn any trash and garbage in or about the buildings. 16.1 Lessee shall not, without obtaining Lessor's prior written approval, generate, release, spill, store, deposit, transport, or dispose of any hazardous substances, toxic substances. In the event Lessor approves such release of hazardous substances on the Demised Premises, Lessee agrees that such release shall occur safely and in compliance with all applicable federal, state and local laws and regulations. Lessee shall indemnify, hold harmless and defend Lessor from any and all claims, liabilities, losses, damages, cleanup costs, and expenses, including attorney's fees, arising out of or in any way related to the release by Lessee or any of its agents, representatives or employees, or the presence of such hazardous substances in, on or about the Demised Premises occurring at any time during the lease term and any extension thereof. Lessee agrees to contract with qualified and certified service to remove all hazardous or contaminated materials from demised premises. EXTERIOR SIGNS 17.0 Lessee shall be approved for four outside signs on the building. ASSIGNMENT AND SUBLETTING 18.0 Lessee shall not voluntarily or by operations of law assign, transfer, mortgage, sublet or otherwise transfer or encumber all or any part of Lessee's interest in this lease or in the premises. Any attempted assignment, transfer, mortgage, encumbrance or subletting, and shall constitute a breach of this lease. Lessee has the option to sublet a portion of the fbo office space building for purposes of aviation services. Lessee will notify Lessor, in writing, 30 days prior to any such sublet. LESSOR'S RESERVATIONS 19.0 Lessor reserves the right, without liability to Lessee, to enter the premises at reasonable hours to make inspections,repairs, alterations, or additions to the premises or to the buildings, to exhibit the premises to prospective tenants, purchasers or others, to display during the last ninety (90) days of the term 'FOR RENT' and similar signs on windows or elsewhere in or on the premises, to change the name of the building or street address and to perform any acts related to the safety, protection, preservation, re-letting, sale or improvement of the premises or of the buildings. Lessor and Lessor's Contract Manager, workmen and engineers may retain and use a pass-key to the leased premises to enable them to examine the demised premises from time to time with reference to any emergencies or other general maintenance of the leased premises. DEFAULT AND REMEDIES 20.0 Lessor shall not be in default unless Lessor fails to perform its obligation under this lease within thirty (30) days after notice by Lessee specifying wherein Lessor has failed to perform. If the nature of Lessor's obligation is such that more than thirty(30) days is required to cure such default, and Lessor thereafter cures such default within a reasonable time, Lessor shall not be deemed in default. 20.1 Events of Default: Each of the following events shall constitute a material default or breach of this lease by Lessee: (a) If Lessee, or any successor or assignee of Lessee while in possession, shall file a petition in bankruptcy or insolvency or for reorganization under any bankruptcy act, or shall voluntarily take advantage of any such act by answer or otherwise, or shall make an assignment for the benefit of creditors; (b) If involuntary proceedings under any bankruptcy law or insolvency act shall be instituted against Lessee, or if a receiver or trustee shall be appointed of all or substantially all of the property of Lessee, and such proceedings shall not be dismissed or the receivership or trusteeship vacated within thirty (30) days after the institution or appointment; (c) If Lessee shall fail to pay Lessor any rent or additional rent when the rent shall become due and in any event no later than ten (10) days after the first day of each month. (d) If Lessee shall fail to perform or comply with any of the other conditions of this Lease not involving payment of rent and if the nonperformance shall continue for a period of ten(10) days after notice thereof by Lessor to Lessee or, if the performance cannot be reasonably completed within the ten day period, Lessee shall not in good faith have commenced performance within the ten day period and shall not diligently proceed to completion of performance; (e) If Lessee shall vacate or abandon the demised premises or ceases to operate the business described in the recitals above,prior to expiration of the term of this Lease; (f) Except as expressly permitted under this lease agreement, any attempted conveyance, assignment, mortgage, or unwarranted subletting of this lease agreement. 20.2 Remedies: On the occurrence of any of the defaults or elements of default described in this section, Lessor shall have the right to: (a) Accelerate the full balance due for the remaining lease term and commence legal action to collect money damages for same from Lessee or any guarantor of this lease; (b) Commence eviction proceedings under Chapter 59.12 of the Revised Code of Washington (unlawful detainer statute); (c) Commence proceedings in Washington State Superior Court and seek an order of specific performance of all the terms and conditions of the lease agreement and Lessor shall have the right to an injunction to restrain Lessee and the further right to invoke any remedy allowed by law or inequity. 20.3 The rights and remedies given to Lessor in this Lease are distinct, separate and cumulative, and no one of them, whether or not exercised by Lessor, shall be deemed to be in exclusion of any of the others herein, by law, or by equity provided. 20.4 No receipt of money by Lessor from Lessee after default or cancellation of this Lease in any lawful manner shall (1) reinstate, continue or extend the term or affect any notice given to Lessee, (2) operate as a waiver of the right of Lessor to enforce the payment of rent and additional rent then due or falling due, or(3) operate as a waiver of the right of Lessor to recover possession of the demised premises by proper suit, action,proceeding or other remedy. After any event of default by Lessee, Lessor may demand, receive and collect any monies due, without in any manner relieving Lessee of the legal consequences of default. Any and all such monies so collected shall be deemed to be payment on account of the use and occupation of the demised premises or at the election of Lessor, on account of the liability of Lessee hereunder. LIABILITY FOR COSTS AND ATTORNEY'S FEES 21.0 The prevailing party in any dispute resolution proceeding, whether judicial or nonjudicial, shall be entitled to recover from the other all reasonable attorney's fees and costs incurred in connection with such proceeding. 2 1.1 Any controversy or claim arising out of or relating to this Lease, or the breach thereof, other than an action by Lessor against Lessee for nonpayment of Rent, or for unlawful detainer or ejectment, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. QUIET ENJOYMENT 22.0 Lessor warrants that it has full right to execute and to perform the lease and to grant the estate demised herein, and that upon payment by the Lessee of the rents herein provided, and upon the observance and performance of all the covenants, terms and conditions on Lessee's part to be observed and performed, Lessee shall peaceably and quietly hold and enjoy the leased premises for the term hereby demised without hindrance or interruption by Lessor or any other persons lawfully or equitably claiming by, through or under the Lessor, subject, nevertheless, to the terms and conditions of this lease. SURRENDER OF POSSESSION 23.0 Lessee shall, upon the termination of this lease or of Lessee's right to possession, remove from the premises all of Lessee's trade fixtures, or furniture, and other unattached personal property, and such alterations, additions or improvements required by Lessor to be removed pursuant to Paragraph 10 above, and shall repair or pay for all damage to the premises caused by such removal. Lessor shall inform Lessee within fifteen (15) days after Lessee's vacation of the Premises what alterations or improvements or fixtures it will require to be removed. All such property remaining and every interest of Lessee in the same shall be conclusively presumed to have been conveyed by Lessee to Lessor under this lease as a bill of sale, without compensation, allowance, or credit to Lessee. Lessee shall, upon termination of this lease or of Lessee's right of possession, deliver all keys to Lessor and peacefully quit and surrender the premises and all equipment and fixtures comprising a part thereof without notice, neat and clean, and in as good condition as when Lessee took possession, except for reasonable wear and tear. Lessee, at its own expense, shall have carpets professionally cleaned, have the walls painted, nail holes removed, and shall have the windows cleaned. The heating and cooling systems shall be in good working order, as shall be all building systems that Lessee was responsible for. Lessee is obligated to repair these should they be damaged by its tenancy. It is also responsible for removal of any and all electrical, co-ax, voice and data lines, low voltage wiring and cabling, and to dispose of this material at its own expense. I HOLDING OVER 24.0 If Lessee, with the implied or express consent of Lessor, shall hold over the expiration of the term of this lease, Lessee shall remain bound by all of the covenants and agreements herein, except that: (i) the tenancy shall be from month to month, and (ii) the minimum rent to be paid by Lessee shall be 150% of the last rent amount. If Lessee and Lessor agree to terms for new lease, the additional 50%that was paid during negotiations will be applied to future rents. ESTOPPEL AFFIDAVIT 25.0 Lessee shall, at any time upon not less than ten(10) days'prior written notice from Lessor, execute, acknowledge and deliver to Lessor, a statement in writing (a) certifying that this lease is unmodified and in full force and effect(or, if modified, stating the nature of such modification and certifying that this lease, as so modified is in full force and effect), and the date to which the rental and other charges are paid in advance, if any; (b) acknowledging that there are not, to Lessee's knowledge, any uncured defaults on the part of the Lessor hereunder, or specifying such defaults if any are claimed; and(c) any other matters as the Landlord or its Lender may reasonably request. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion, of the real property of which the premises are a part. SALE OF PREMISES BY LESSOR 26.0 The Lessor shall have the right to any sale of the property described in Exhibit 'A', Lessor shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this lease arising out of any act, occurrence or omission occurring after the consummation of such sale; and the purchaser, at such sale or any subsequent sale of the premises, shall be deemed, without any further agreement between the parties or their successors in interest or between the parties and any such purchaser, to have assumed and agreed to carry out all of the covenants and obligations of the Lessor under this lease. NOTICE 27.0 Any notice required to be given by either party to the other pursuant to the provisions of this lease or any law,present or future, shall be in writing and shall be deemed to have been duly given or sent if either delivered personally or deposited in the United States mail,postage prepaid, registered or certified, return receipt requested, addressed to the Lessor at the address set forth on page 1 of this lease, except that, upon Lessee's taking possession of the leased premises, the premises shall constitute Lessee's address for notice purposes, or to such other address as either party may designate to the other in writing from time to time. ENTIRE AGREEMENT 28.0 It is expressly understood and agreed by Lessor and Lessee that there are no promises, agreements, conditions, understandings, inducements, warranties or representations oral or written, expressed or implied, between them other than as herein set forth, and this lease shall not be modified in any manner except by an instrument in writing and executed by the parties. r V NOW, BINDING ON HEIRS, SUCCESSORS AND ASSIGNS 29.0 The covenants and agreements of this lease shall be binding upon the heirs, executors, administrators, successors and assigns of both parties hereto, except as herein above provided. It is further acknowledged that the signor for the Lessee is authorized by the secretary of the corporation to have full authority to execute this agreement. NON-WAIVER OF BREACH 30.0 The failure of either party to insist on strict performance of any covenant or condition hereof, or to exercise any option herein contained, shall not be construed as a waiver of such covenant, condition, or option in any other instance. Consent by Lessor in any one instance shall not dispense with the necessity of consent by Lessor in any other instance. SUBORDINATION 31.0 This lease and the interest of Lessee hereunder shall be at all times subject to any and all now effective or hereafter executed mortgages and/or deeds of trust which may now or hereafter affect Lessor's estate in the real property of which the premises form a part and to all renewals, modifications, replacements, or extensions thereof. Lessee shall promptly execute any instruments which may be required to evidence such subordination. The following exhibits are made a part of this lease by this reference: EXHIBIT 'A': Legal Description EXHIBIT 'B': Floor Plan In witness whereof, the parties hereto have hereunto set their hands the date set forth below. LESSEE: Y � date. its. LESSOR: b},:�'6� Q • Adate: �cD�� its: . y� *fto f STATE OF WASHINGTON COUNTY OF ,-jos I certify that I know or have satisfactory evidence that c' signed this instrument and acknowledged it to be �_ _free and voluntary act for the uses and purposes mentioned in the instrument. dated: SANDRA M. ORPHAN C-NOTARY'PUBLIC, State of Washington STATE OF WASHINGTON My appointment expires: /��//�. NOTARY PUBLIC MY COMMISSION EXPIRES 09-22-13 STATE OF WASHINGTON COUNTY OF ��' I certify that I know or have satisfactory evidence th signed this instrument and acknowledged it to be �.�- free and voluntary act for the uses and purposes mentioned in the instrument. dated: { SANDRA M. ORPHAN N Y PUBLIC, State ofWashington STATE OF WASHINGTON My appointment expires: �' ;2 /3 NOTARY PUBLIC MY COMMISSION EXPIRES 09-22-13 CONSULT YOUR ATTORNEY THIS DOCUMENT HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR HIS/HER REVIEW AND APPROVAI, PRIOR TO YOUR EXECUTION OF SAME. NO REPRESENTATION OR RECOMMENDATION IS MADE BY PRIME LOCATIONS, INC. OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS DOCUMENT, OR THE DOCUMENTS REFERRED TO HEREIN, OR THE TRANSACTION RELATING THERETO. THESE ARE QUESTIONS FOR YOUR ATTORNEY WITH WHOM YOU SHOULD CONSULT BEFORE SIGNING THIS DOCUMENT. EXHIBIT "A" LEGAL DESCRIPTION SCALE LL N 1/2 OF SEG. 7, AIN Trip. 23N., Me 05E., W.M. � 100 0 50 700 200 V 73 12 { FEET) —��- 18 7 1 INCH = 10OF7- I � i o , ji - E . �I� % t ___... ��`� '.rf;'�....�.,", .wr..a...,-,,,a .... .rye ¢35. ..aq'- /��j /.ai._.. ,' •,' .1 tit>'- �-r _� �.�.m a865'_. ✓-, _9.'S?` „J 'SY':�_ -- �. `$-Ws---•== -v;`.0 .. _ -- ttOr"453f W i,R X773 L:25"'6 '� , 1 F z n �•- �.. E _ -,F,m,�„�. _ - X39 •,, �7 7`3� � 4 W 532020'' .: w 18 7 ._. ..:e} 1 1 kh.41 �tiAF r::: �1- ik .s e�� ..i j. _•,,.__. r... i 1161 3105 W 136,846 s.ft. t Ra 7w r „ Y PAR6El 17Q� - #k _ r n u X6348=sgTt. aG d d 4. 0 56,923 sq,ff .• 994 bere< - ~ a 3.141 acres a acres o a< _ x� 1 30" m E b ( a I� w , ;P w' LL r j , ... SO4'46'53 f 204 i y._ N0448'53"W r .rn A/ �r�CRIPTION: BASISOFBEARINGS 15 N04'48'53"W ORIENTED IN THE WASHINGION COORDINA IL SY.""TEM NAD 83(1991)NORTH ZONE. ALONG THE CENTER:INE OF THE RENTON AIRPORT RUNWAY, AS ESTABLISHED BY THF PIIBI.IC WORKS DFPARTMFNT RENTON THAT POR17ON OF THE N 1/2 OF SECTION 7, TOWNSHIP 23 NORTH, RANGE 05 EAST, MUNICIPAL AIRPORT. W.M. IN KING COUNTY WASHINGTON, DESCRIBED AS FOLLOWS, FIELD MEASUREMENTS FOR THIS MAP WERE PERFORMED WITH A LEICA 1201 TOTAL STATION INSTRUMENT, AND MEET OR COMMENCING AT THE SOUTH QUARTER CORNER OF SAID SECTION 7, WHICH BEARS EXCEED A LINEAR CLOSURE OF 1:15,000 II 588'31'74"E,,327.35 FEET TO THE CENTERLINE OF TAXIWAY"A"; THENCE N04'48'S3"W 2483.39 FEET FROM THE SOUTHWEST QUARTER OF SAID SECTION 7; THENCE k85'f1'07`EALL PRIMARY MEASUREMENT EOU!PM.ENT UTILIZED HAS BEEN COMPARED AND ADJUSTED TO A NAT?ONAL GEODETIC SURVEY ` I ALONG SAID TAXIWAY'A, 1834.03 FEET; THENCE S85'11'07"W, 89.00 FEET TO TILE CALIBRATED BASELINE, 'WITHIN THE LAST YEAR. POINT OF BEGINNING LEGEND THENCE 585102'37"W, 245.40 FEET THENCE N10-08'22`W. 9.37 FEET,, THENCE N84 U6'24'E, 19.79 FEED, THENCE NOS'32'08`W. 28.82 FEET,; THENCE S8523'03"W, 2'.41 - - BOUNDARY LINE FEET: THENCE N07'30'79'W, 493.14 FEET THENCE N85'I0'50"£. 277.40 FEET; THENCE - CENTER, LINE RUNWAY SO4-48'53"E,530.60 FEET TO THE POINT OF BEGINNING. - SECTION LINE 333111 CONTAINING APPROXIMATELY 136,846 SQUARE FEET OR 3.141 ACRES. LEASE CINE ■'O�1 FOUND QUARTER SECTION CORNER 4 f 1 rang SAS FOUND SECTION CORNER i M"•4t T,1 24,2en�-1 � 6 n\ Renton Gateway Center 750 W. Perimeter Rd Renton, WA 98057 Street Side M x s W H GF E D C B A Runway Side