HomeMy WebLinkAboutLease LAG-15-004
OPERATING PERMIT AND AGREEMENT
AUG 1 0 2015
between the City of Renton and Aviation Training C
THIS IS A PERMIT TO OPERATE AN AVIATION RELATED ACTIVITY U)ON THE RENTON
MUNICIPAL AIRPORT AND AN AGREEMENT(hereinafter"Operating Permit�'j between THE CITY
OF RENTON, a Washington municipal corporation (hereinafter"Permittor"), and Aviation
Training Center., 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 003-86, executed on August 1, 1986,the City of
Renton (Landlord)granted a lease of the subject premises to John,Julie &Terrence Lien, as
Lessee,for the purpose of operating a Fixed Based Operation,which includes/included aircraft
rebuilding and maintenance, aircraft modification, light manufacturing,engineering and sales,
storage of aircraft parts,employee and customer parking and tiedown and storage of aircraft.
On March 8, 2001,the entire ground lease (LAG 003-86) was assigned from John,Julie &Terrence
Lien to Bosair LLC(hereinafter"Lessee").
1.2. Thereafter, Lessee sublet a portion of the subject premises to Aviation Training
Center(Permittee) by sublease agreement, executed on May 19, 2015,for the purpose/purposes
of operating a flight school,ground school, and simulator training business located at 289 East
Perimeter Road.
2. GRANT OF OPERATING PERMIT:
2.1. Description of Premises: The Premises subleased by Aviation Training Center,the
Permittee, is described in the sublease as office space located at 289 East Perimeter Road.The
layout of this office space is identified in the sublease as Exhibit A and that exhibit is 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. Access to Taxiways and Runway: Notwithstanding anything in this Operating
Permit to the contrary, Permittor acknowledges that direct access to the taxiways and runway
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City of Renton to Aviation Training Center
ORtGtNAL
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 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 Tenant 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
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City of Renton to Aviation Training Center
1...11.
(chapter 165, laws of 1947), and any subsequent amendments thereof or subsequent legislation
of said state and all rules and regulations lawfully promulgated under any act or legislation
adopted by the State of Washington or by the United States or the Federal Aviation
Administration. 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 Aviation Training Center is stated in the
Sublease Agreement section 1.2 attached hereto.
4.2. Permit Term:The term of this Operating Permit is month-to-month and may be
extended to include any Extended Term as may be in effect between Bosair LLC (Lessee) and
Aviation Training Center(Sublessee/Permittee).This Operating Permit may be extended on a
month-to-month basis by operation of any extension of the sublease,with all other terms and
conditions of this Operating Permit remaining in full force and effect. In no event will the term
of the Operating Permit and Agreement be extended beyond January 31,2026.
5. RENTAL:
5.1. Rent on Lease: As rental for the premises described in LAG 003-86 and addenda
thereto, Lessee has agreed to pay Permittor a ground lease rate of$0.62/sq ft/year on 51,259
square feet or thirty one thousand seven hundred eighty dollars and fifty eight cents
($31,780.58) per year or a monthly rental in the sum of two thousand six hundred forty eight
dollars and thirty eight cents ($2,648.38) throughout the twelve (12) month period commencing
on June 1, 2010 which does not include leasehold excise tax. Lessee has agreed to pay
Permittor a building lease amount of three thousand seven hundred dollars ($3,700) per year or
a monthly rental in the sum of three hundred eight dollars and thirty three cents ($308.33)
throughout the twelve (12) month period commencing on June 1, 2010, which does not include
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City of Renton to Aviation Training Center
.app-
leasehold excise tax. The Rental amount set out herein is subject to Periodic Rental
Adjustments as set out in Addendum 02-98 to lease LAG 003-86.
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 four
thousand forty one dollars and seventy five cents ($4,041.75)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 003-86 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' 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 003-86 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 003-86 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 003-86 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
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temporary interruption or failure of such services incident to the making of repairs, alterations
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 purpose of
operating a flight school,ground school, and simulator training business in accordance with the
Airport Regulations and Minimum Standards pursuant to Section 8.5 below.
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. Signs: 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, 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
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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 Tenant
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 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 government 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
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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 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, "Indemnittees") from any claims
(including without limitation third party claims for personal injury or real or personal property
damage), actions, administrative proceedings,judgements, 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
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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. If such third
arbitrator has not been selected or if such third arbitrator has not accepted such appointment
within such thirty(30) day period, either Permittor or Permittee may apply to the head of the
Seattle office of the American Arbitration Association to appoint said third arbitrator.
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.
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
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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
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 therefore 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
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 ten (10) 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
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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.
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 Tenant's obligations
under this Operating Permit accruing after the date of such assignment,to the same extent as if
it were the original Tenant, and (b) in the case of a stock transfer,Transferee shall deliver a
written acknowledgment that it shall continue to be bound by all the provisions of this
Operating Permit after the transfer. Except in the case of an assignment of the full leasehold
interest, any assignment permitted herein will not relieve Tenant of its duty to perform all the
obligations set out in this 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 Tenant and concomitant transfer of ownership of said entity cause an extension of
the Term of this Operating Permit.
12.2. 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
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(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) in
the case of any assignment, acknowledge that Permittor may enforce the provisions of this
Operating Permit directly against such assignee.
12.3. 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 Tenant's obligations under
this Operating Permit arising on or after the date of the assignment.
12.4 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 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.
12.5. 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 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
OPERATING PERMIT 11
City of Renton to Aviation Training Center
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.
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
OPERATING PERMIT 12
City of Renton to Aviation Training Center
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
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
OPERATING PERMIT 13
City of Renton to Aviation Training Center
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 lease without
hindrance, molestation, or injury. Permittee shall repair at its sole expense any 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 insured
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 Lease a policy of comprehensive public liability and property damage insurance written by a
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/$2,000,000 in
the aggregate for injury to or death of one person in any one accident or occurrence and in an
amount of not less than $1,000,000.00 for injury to or death of more than one person in any one
accident or occurrence, and of not less than $1,000,000.00 for property damage. The limits of
said insurance shall not, however, limit the liability of Permittee hereunder. The insurance
policy shall have a Landlord's Protective Liability endorsement attached thereto, and the City of
Renton will be named as Additional Insured(s) on Permittee's policy, with the General Liability
coverage being primary and non-contributory with any other policy(ies) available to the City.
18.3. Insurance Policies: Insurance required hereunder shall be written in companies
acceptable to Permittor and rated A-10 or better in "Best's Insurance Guides." 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. Coverage shall be
submitted on forms prescribed by Permittor. 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.
OPERATING PERMIT 14
City of Renton to Aviation Training Center
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.
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 approved 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 003-86 and Permittor may evict the
OPERATING PERMIT 15
City of Renton to Aviation Training Center
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.
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: Aviation Training Center
289 East Perimeter Road
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
OPERATING PERMIT 16
City of Renton to Aviation Training Center
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 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.
OPERATING PERMIT 17
City of Renton to Aviation Training Center
"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.
"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
OPERATING PERMIT 18
City of Renton to Aviation Training Center
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, 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.
OPERATING PERMIT 19
City of Renton to Aviation Training Center
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.
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.
PERMITTEE: PERMITTOR:
Aviation Training Center THE CITY OF RENTON
a Washington corporation a Washington municipal
corporation
OPERATING PERMIT 20
City of Renton to Aviation Training Center
e
i)(6_1,-. eca-u._.-p-A.L_ ' ti-C44AA.D illAit/
BY MG.A-- r-e, e , Caeytat.C( Denis Law
its:Owner/President Mayor G;
Date: o ,1070 /.4 0 I Date: ` 2i3
/
ATTEST.
By LII • i /I
Jason .eth, Cty C erk
Date: °r 23//5
App d as to legal form:
4.464,4•414.4.4e714,4-0-"Ak__
Larry Warren, City Attorney
ohUhHuisaft„
yOfRET�/
1
4* SAL )*J
t .V., I
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A1444._ ,,„,,,, (,
„ TED, ..d.
i,„„l,,III!„,RI„.
STATE OF WASHINGTON )
ss.
COUNTY OF )
OPERATING PERMIT 21
City of Renton to Aviation Training Center
I certify that I know or have satisfactory evidence that Mur �� r"- \ 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 AO y 61-111 201 C .
daror
[Signature et Notary]
Notary Public A4koA) �tt[
State of Washington
ANTHONY J NORRELL [Print Name of Notary]
My Appointment Expires Mar 24,2017
Notary Public in and for the State of
Washington, residing at 5ectfF t l✓.
My commission expires: [1 rrrcl; ";1+-1/AD/7 .
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 , 201_
[Signature of Notary]
[Print Name of Notary]
Notary Public in and for the State of
Washington, residing at
My commission expires:
STATE OF WASHINGTON
:ss.
COUNTY OF
OPERATING PERMIT 22
City of Renton to Aviation Training Center
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 201
[Signature of Notary]
[Print Name of Notary]
Notary Public in and for the State of
Washington, residing at
My commission expires:
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 201
[Signature of Notary]
[Print Name of Notary]
Notary Public in and for the State of
Washington, residing at
My commission expires:
EXHIBIT A
Sublease Map and Legal Description
OPERATING PERMIT 23
City of Renton to Aviation Training Center
OPERATING PERMIT 24
City of Renton to Aviation Training Center
EXHIBIT A
SUBSUBLEASE AGREEMENT
This Sublease Agreement ("Sublease"), dated as of May 18, 2015, is made and entered
into by and between Ace Aviation, Inc., a Washington corporation ("Landlord") and Aviation
Training Center, Inc., a Washington corporation ("Tenant").
Landlord and Tenant agree as follows:
Section 1. Identification.
1.1 Premises. The premises which are the subject of this Sublease (the "Premises") are a
portion of the third (3rd) floor of the building located at 289 East Perimeter Road, Renton, WA,
98057, which portion thereof subject to this Sublease is identified by heavy black outlining on
the attached Exhibit A (except for the shared lobby, which is identified by heavy red outlining on
the attached Exhibit A ("Lobby")), together with all improvements located thereon. The
Premises consist of 2,694.5 usable square feet not including the Lobby. The entire parcel of real
property on which the Premises are located is referred to herein as the "Property," and the
building in which the Premises are located is referred to herein as the "Building."
In addition to the office space, said Tenant will have access to 1 uncovered aircraft tie-down
space large enough to accommodate a Cessna 172 or similar sized aircraft. (See Aircraft Storage
Agreement).
12 Term. The Term of this Sublease (the "Term") shall commence on the later of(i) the
date Landlord completes the repairs specified in paragraph 1.10 below or (ii) the date of this
Sublease and, subject to earlier termination or extension as provided for elsewhere in this
Sublease, shall automatically expire on the last day of the sixtieth (60th) full calendar month after
the date on which the Term commences.
1.3 Options to Extend Term. So long as this Lease has not been terminated for any
reason, the Tenant, shall have the right to extend the term of this Lease for an additional term of
(60) months beyond its original term. Written notice that Tenant would like to exercise this
option will need to be submitted to Landlord no later than (90) days prior to the expiration of
original term. Rent, is subject to adjustment to current market rate at the time the extended term
begins and through the duration of the extended term. If Tenant has different ownership at or
before the option is exercised, the extension approval will be subject to Landlord approval of
new owners.
1.4 Monthly Rent and Other Charges.
(a) Monthly Rent. The monthly rent payable by Tenant pursuant to paragraph 4.1
and Section 4 shall be $4,041.75, which consists of$18.00 per usable square foot of the Premises
per year; provided that the monthly rent for the first full calendar month of the Term shall be zero
($0).
•
LEASE-ACE-ATC-PAGE I
A single tie-down space will be provided to Tenant at no additional cost. In the even tenant
would like additional spots, the rate will be $110 per month, per spot. Rate is assuming a Cessna
172 or similarly sized aircraft.
(b) Security Deposit. The security deposit payable by Tenant pursuant to
paragraph 4.6 shall be $5,838.09.
(c) Triple Net Expenses. The initial monthly payment by Tenant for its Proration
Amount of Triple Net Expenses pursuant to paragraph 4.9 shall be $1,796.34, which consists of
$8.00 per usable square foot of the Premises per year.
1.5 Proration Amount. Tenant's percentage of Triple Net Expenses, as described
elsewhere in this Sublease, (the "Proration Amount") shall be eight and 3 tenths percent (8.3%).
Said percentage is equal to the ratio of the usable area of the Premises to the total usable area of
the Building. The Proration Amount shall be adjusted at any time the ratio of the rentable area of
the Premises to the total rentable area of the Building changes.
1.6 Tenant Improvement Allowance. The tenant improvement allowance payable by
Landlord pursuant to paragraph 4.5 shall be $26,945.00.
1.7 Landlord's Address. Landlord's address for all purposes under this Sublease shall be:
Mr. Kurt Boswell
Ace Aviation, Inc. •
289 E. Perimeter Road
Renton, WA 98057
1.8 Tenant's Address. Tenant's address for all purposes under this Sublease shall be:
Ms. Marie Campbell
Aviation Training Center, Inc.
289 E. Perimeter Road, Third Floor
Renton, WA 98057
1.9 Permitted Use. Tenant shall be permitted to use the Premises for the following
purpose(s): pilot training and other related services permitted by law and approved under the
airport's purposes of use.
1.10. Landlord Repairs. Prior to commencement of the Term Landlord shall make the
alterations and repairs to the Premises set forth on the attached Exhibit B. Except as set forth on
the attached Exhibit B, Landlord shall not be obligated to alter or repair the Premises or install,
repair or replace any fixtures or improvements in or about the Premises.
1.11. Signage. Tenant shall have the right to install its identification signage on the
interior walls of the premises mentioned in Paragraph 1.1 and on the interior entry doors to the
LEASE-ACE-ATC-PAGE 2
Premises, provided that (i) such signage and installation shall be at Tenant's sole cost and
expense, (ii) such signage shall comply with all applicable codes, rules and regulations, (ii)
Landlord shall have given its prior written consent to such signage, which consent shall not be
unreasonable withheld, and (iv) upon termination of the Term, Tenant shall remove all such
signage from the Building and repair any damage to the Building from said signage at its sole
cost and expense. Tenant shall not be permitted to install any other signage on or about the
Premises without direct written approval from the Landlord.
Section 2. Sublease.
2.1 Subleasehold. Subject to the provisions of this Sublease, Landlord hereby subleases
to Tenant and Tenant hereby subleases from Landlord the Premises for the Term.
2.2 Common Areas and Facilities. Subject to the provisions of this Sublease, Landlord
hereby grants to Tenant and Tenant's employees, customers and invitees a nonexclusive license
to use, during the Term, in common with Landlord, other tenants of Landlord, customers of other
tenants of Landlord and other persons designated by Landlord or otherwise so entitled, the
common areas and facilities furnished by Landlord ("Common Areas") for use by the persons
described above in this paragraph 2.2 (including, but not limited to, parking and traffic areas,
sidewalks, landscaping, lighting facilities, signs adjacent to or near the Premises) for the
purposes for which such common areas and facilities are furnished by Landlord. In addition,
Landlord hereby permits Tenant to use portions of the Lobby as a reception area for Tenant,
provided that (i) Tenant shall not obstruct others from accessing or using the Lobby, (ii) Landlord
and its invitees shall be free to use and access the Lobby at all times, and (iii) Tenant shall be
solely responsible for security of Tenant's furniture, equipment and other items located in the
Lobby. Any portion of the Lobby so used by Tenant shall constitute a portion of the Premises for
all purposes under this Sublease.
Section 3. Term.
3.1 Term. The Term shall be for the period described in paragraph 1.2.
•
3.2 End of the Term. Upon the expiration or termination of the Term, Tenant shall:
(a) remove all personal property from the Premises;
(b) subject to the requirements of Section 8 hereinafter, if and as directed by
Landlord, remove any or all of the fixtures, additions, alterations, modifications or other
improvements installed in or made to the Premises after the commencement of the Term by,
through, at the request of, or on behalf of Tenant and restore the Premises as they existed
immediately prior to the making of the improvements so removed; and
(c) surrender the Premises to Landlord in at least as good condition and state of
repair as Tenant is required to keep and maintain them pursuant to this Sublease, reasonable wear
and tear and damage by insured casualty excepted.
LEASE-ACE-ATC-PAGE 3
If Tenant fails to remove any improvements or restore the Premises as directed by Landlord
pursuant to (b) of this paragraph 3.2, Landlord may, at Tenant's sole risk and expense, perform
such removal or restoration (by contract or otherwise) by the most expeditious means available to
Landlord. Tenant shall reimburse Landlord for all costs and expenses incurred by Landlord to
accomplish such removal and restoration. Further, if Tenant fails to remove all personal property
from the Premises upon the expiration or termination of the Term, the same shall be deemed
abandoned and Landlord shall be free to use or dispose of the same at its discretion, provided that
Tenant shall reimburse landlord for any and all costs of such disposition.
3.3 Holding Over. If Tenant remains in possession of all or any part of the Premises after
the expiration or termination of the Term, Landlord may at its option either (a) pursue any or all
of the rights and remedies available to Landlord under this Sublease or otherwise by law for
default under or breach of this Sublease, or (b) permit Tenant to remain in possession of the
Premises as a tenant under the provisions of this Sublease; provided that such tenancy shall be
from month to month only and shall not be a renewal or extension of the Term; and provided
further that the Rent for each month of such holdover period shall be the greater of (i) one
hundred fifty percent (150%) of the Rent payable under this Sublease for the last full calendar
month of the Term or (ii) such amount as Landlord designates in a written notice to Tenant at
least forty five (45) days prior to the commencement of such month.
Section 4. Rent, Security Deposit, Taxes and Common Area Maintenance Charges.
4.1 Monthly Rent. Tenant shall pay to Landlord the applicable amount of rent specified
in paragraph 1.4(a) on or before the first day of each calendar month of the Term, except that the
monthly rent for the second full calendar month of the Term shall be paid upon execution of this
Sublease; provided that such amount shall be prorated for any partial month of the Term based
on a thirty (30) day month. Tenant shall make such payment to the order of Landlord in lawful
money of the United States at the address set forth in paragraph 1.7 (or at such other place or
payee as Landlord may designate in writing) without deduction, offset or prior notice or demand.
4.2 No Accord and Satisfaction. If Tenant pays, or Landlord otherwise receives, a lesser
amount than the full rent provided for under this Sublease, such payment or receipt shall not
constitute or be construed other than as on account of the earliest rent due. Landlord may accept
any check or payment in any amount without prejudice to Landlord's right to recover the balance
of the rent or pursue any other right or remedy. No endorsement or statement on any check or
payment or elsewhere shall constitute or be construed as an accord or satisfaction. Landlord, in
its sole discretion, may apply any amount received from Tenant under this Sublease to any
amount payable by Tenant under this Sublease or otherwise.
4.3 Late Charges. Tenant hereby acknowledges that late payment by Tenant to Landlord
of rent or other sums due hereunder will cause Landlord to incur costs not contemplated by this
Sublease, the exact amount of which will be extremely difficult to ascertain. Such costs include,
but are not limited to, processing and accounting charges and late charges which may be imposed
upon Landlord by terms of any mortgage or trust deed covering the Premises. Accordingly, if any
LEASE-ACE-ATC-PAGE 4
installment of rent or of a sum due from Tenant shall not be received by Landlord within five (5)
days after the date due, Tenant shall pay to Landlord a late charge at the rate of five percent (5%)
per month of such overdue amount for each month or portion thereof that the payment remains
overdue. The parties hereby agree that such late charge represents a fair and reasonable estimate
of the cost that Landlord will incur by reason of the late payment by Tenant. Acceptance of such
late charges by Landlord shall in no event constitute a waiver of Tenant's default with respect to
such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies
granted hereunder.
4.4 Additional Rent. All other amounts payable by Tenant to Landlord pursuant to this
Sublease shall constitute additional rent.
4.5 Tenant Improvement Allowance. Landlord shall reimburse Tenant for its costs
incurred in installing improvements in the Premises in the amount set forth in paragraph 1.6 (the
"TI Allowance"). Landlord shall pay the TI Allowance to Tenant within thirty (30) days after the
later of(i) the date Tenant opens for business in the Premises, or (ii) the date Tenant removes all
liens and potential liens arising from improvements installed in the Premises by or through
Tenant and furnishes Landlord with satisfactory evidence of such removal (including but not
limited to evidence that all vendors, material suppliers and contractors who have furnished
Landlord pre-lien notices have been paid in full). If Landlord fails to pay the TI Allowance to
Tenant in accordance with this paragraph 8.5, Tenant shall have the right to offset the amount of
the TI Allowance against the monthly rent next coming due until fully offset.
4.6. Security Deposit. On or before commencement of the Term, Tenant shall deposit
with Landlord the security deposit specified in paragraph 1.4(b) as security for the faithful
performance by Tenant of all the terms, covenants, and conditions of this Sublease to be kept and
performed by Tenant during the Term. If Tenant defaults with respect to any provision of this
Sublease, including, but not limited to the provisions relating to the payment of rent, Landlord
may (but shall not be required to) use, apply or retain all or any part of this security deposit for
the payment of any rent or any other sum in default, or for the payment of any amount which
Landlord may spend or become obligated to spend by reason of Tenant's default, or to
compensate Landlord for any other loss or damage which Landlord may suffer by reason of
Tenant's default. If any portion of said deposit is so used or applied, Tenant shall, within five (5)
days after written demand therefor, deposit cash with Landlord in an amount sufficient to restore
the security deposit to its original amount, and Tenant's failure to do so shall be a material breach
of this Sublease. Landlord shall not be required to keep this security deposit separate from its
general funds, and Tenant shall not be entitled to interest on such deposit; Landlord's obligations
with respect to the security deposit are those of a debtor and not of a trustee. If Tenant shall fully
and faithfully perform every provision of this Sublease to be performed by it, the security deposit
or any balance thereof shall be returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interest hereunder) within thirty (30) days after expiration of the Term. In the event
of termination of Landlord's interest in this Sublease, Landlord shall transfer said deposit to
Landlord's successor in interest.
LEASE-ACE-ATC-PAGE 5
4.7 Taxes and Assessments. Tenant shall pay before delinquency all taxes, assessments,
license fees and other charges or taxes that are levied or assessed against Tenant's leasehold
improvements, equipment, furniture, fixtures and personal property installed or located in or on
the Premises, or in respect to Tenant's occupancy, use or possession of the Premises. In addition,
Tenant shall reimburse Landlord for Tenant's Proration Amount of all ad valorem real property
taxes and assessments that are levied against the Property, for any period included within the
Term (and excluding any such taxes or assessments levied for any period outside the Term)
("Taxes and Assessments"), as part of reimbursement for Triple Net Expenses pursuant to
paragraph 4.9. Taxes and Assessments shall include any leasehold taxes, business and
occupation taxes and taxes or license fees upon or measured by the leasing of the Property or the
rents or other income collected therefrom. Nothing contained in this Sublease shall require
Tenant to pay, nor shall Taxes and Assessments include, any estate, inheritance, succession,
capital levy, corporate franchise, transfer, capital gains or income tax of Landlord, penalties
incurred due to Landlord's negligence or unwillingness to pay taxes when due.
4.8 Insurance Premiums. Tenant shall reimburse to Landlord Tenant's Proration Amount
of Landlord's cost of providing the insurance described in paragraph 11.2 during the Term
("Insurance Premiums"), as part of reimbursement for Triple Net Expenses pursuant to paragraph
4.9.
4.9 Triple Net Expenses.
4.9.1 Definition. As used herein, the term "Triple Net Expenses" shall mean: (i)
Taxes and Assessments, as defined in paragraph 4.7; (ii) Insurance Premiums, as defined in
paragraph 4.8; (iii) utility charges for the Common Areas and charges for utilities and services
which are not separately metered to the Premises or other tenants' premises, as described in
paragraph 6.2; and (iv) all other expenses, costs and amounts of every kind and nature which
Landlord shall pay during any calendar year any portion of which occurs during the Term in
connection with the management, repair, maintenance, replacement, insurance and operation of
the Building or the Property, including, without limitation, any amounts paid for: (a) permits,
licenses and certificates necessary to operate and manage the Building or the Property, and costs
of complying with other legal requirements, including, without limitation, the "ADA" (as defined
in Paragraph 7.8), (b) supplies, materials, tools, equipment, floor care and cleaning, and other
services for the Building and the Property, including rental, installment purchase and financing
agreements therefor and interest thereunder, (c) accounting, legal, inspection, consulting and
other services, (d) wages, salaries, bonuses, and other compensation and benefits for any
manager, personnel and other parties engaged in the operation, maintenance or security of the
Building or the Property, and employer's Social Security taxes, unemployment taxes or
insurance, and any other taxes which may be levied on such wages, salaries, compensation and
benefits, data or payroll processing expenses relating thereto (if the manager or other personnel
are located off-site and handle other properties, the foregoing expenses shall be allocated
appropriately between the Property and such other properties), (e) alarm monitoring and security
service, trash removal, removal of ice and snow (and salting and sanding in connection
therewith), (0 appropriate reserves for operation of the Building and the Property and for
covering uninsured portions, including deductible amounts, of casualty damage and general
LEASE-ACE-ATC-PAGE 6
liability claims relating to the Building or the Property, and (g) operation, maintenance, repair,
installation, replacement, inspection, testing, painting, decorating and cleaning of the Common
Areas, the Property's systems and equipment, and the Building's gutters and downspouts, roof
flashings and roof. The foregoing provision is for definitional purposes only and shall not be
construed to impose any obligation upon Landlord to incur such expenses. Notwithstanding the
foregoing, Triple Net Expenses shall not include: (1) interest and amortization on mortgages and
other debt costs or ground Sublease payments, if any, except as provided herein; (2) depreciation
of buildings and other improvements; (3) improvements, repairs or alterations to spaces
subleased to other tenants; (4) the cost of providing any service directly to and paid directly by,
any subtenant; (5) costs of any items to the extent Landlord receives reimbursement from
insurance proceeds or from a third party (such proceeds to be deducted from Triple Net Expenses
in the year in which received); (6) management fees for the Property in excess of five percent
(5%) of the amounts described in this paragraph 4.9.1(iv); and (7) capital expenditures, except
those made primarily to reduce Triple Net Expenses, or to comply with any laws or other
governmental requirements, or for repairs or replacements (as opposed to additions or new
improvements).
4.9.2 Determination and Payment. Tenant shall pay Landlord, as additional rent,
the Proration Amount of the Triple Net Expenses paid or incurred by Landlord during the Term.
For the period commencing with the commencement of the Term through and including the first
December of the Term, Tenant shall make said payment by paying Landlord the amount set forth
in paragraph 1.4(c) concurrently with Tenant's regular monthly rental payment. Thereafter said
payment shall be determined and paid in accordance with the following procedure. Landlord
shall exercise diligent efforts to give to Tenant on or before the thirty first (31st) day of March of
each calendar year of the Term a statement of the Triple Net Expenses incurred during the
previous calendar year, but failure by Landlord to give such statement by said date shall not
constitute a waiver by Landlord of its right to collect such amount from Tenant. The Proration
Amount of Triple Net Expenses set forth in said statement shall be divided into twelve (12)equal
monthly installments, and Tenant shall pay to Landlord an amount equal to one (1) such monthly
installment concurrently with the regular monthly rental payments for the balance of that
calendar year and thereafter until the next year's statement is rendered. If any such statement
shows an increase in Triple Net Expenses over the Triple Net Expenses for the prior year (for
such purpose the Triple Net Expenses for the first year (or partial year) of the Term shall be the
amount which, when multiplied by Tenant's Proration Amount and divided by twelve (12),
yields the amount set forth in paragraph 1.4(c)), so that Tenant has underpaid Triple Net
Expenses for that portion of the calendar year preceding Landlord's statement, then upon receipt
of such statement from Landlord, Tenant shall pay a lump sum equal to the total amount so
underpaid. If in any year Tenant's Proration Amount of Triple Net Expenses is less than the
preceding year, and Tenant has overpaid Triple Net Expenses for that portion of the calendar year
preceding Landlord's statement, then upon receipt of Landlord's statement, the total amount of
such overpayment shall be credited towards the next monthly rent falling due. When the final
determination is made of Tenant's Proration Amount of Triple Net Expenses for the year in
which the Term terminates, Tenant shall immediately pay any increase due over Triple Net
Expense charges paid and conversely any overpayment made in the event said expenses decrease
LEASE-ACE-ATC-PAGE 7
shall be immediately reimbursed by Landlord to Tenant through the date of such termination,
regardless of the fact that Tenant may already have vacated the Premises prior to that time.
4.9.3. Audit Rights. During reasonable business hours and upon at least thirty (00)
days prior written notice, Tenant, or Tenant's authorized agent, shall have the right, not more
frequently than once in any calendar year, to examine and photocopy all of Landlord's (or
Landlord's agent's) books and records pertaining to Triple Net Expenses. Any over-billing
discovered by such audit shall be promptly refunded to Tenant, and any under-billing discovered
by such audit shall be promptly paid by Tenant. In the event an overstatement of charges exceeds
five percent (5%) of the sum previously billed to Tenant by Landlord, Landlord shall reimburse
Tenant for all reasonable expenses of such audit. Landlord shall retain its books and records
regarding Triple Net Expenses for a period of at least two (2) years following the final billing for
the calendar year in question. Except in the case of fraud or as provided in the next-following
sentence, Tenant shall have no right to examine or audit Landlord's books and records after the
expiration of the two (2) year period described in the preceding sentence during which Landlord
is obligated to retain such books and records. Notwithstanding the foregoing, if during the
course of a permitted examination, a material, systematic error is discovered, then Tenant shall
be entitled to any over-billed amounts resulting from such error regardless of when such error
occurred.
Section 5. Use and Acceptance of Premises.
5.1 Permitted Business and Activities. Tenant shall use or permit the use of the Premises
only for the purpose identified in paragraph 1.9. Tenant shall not use or permit the use of the
Premises for any other purpose without the prior written consent of Landlord, which consent may
be withheld or denied in Landlord's sole discretion. Landlord makes no (and Tenant
acknowledges that Landlord has not made any) representation or warranty as to the suitability of
the Premises for the conduct of Tenant's business or activities. Tenant hereby waives any right
to terminate this Sublease on the ground that the Premises cannot now or hereafter be used for
such business or activities.
5.2 Prohibited Uses. Tenant shall not use or permit any use of the Premises that will in
any way (i) conflict with any applicable law, statute, regulation, ordinance, rule, order or other
requirement, now or hereafter in effect, of any governmental authority, (ii) cause or constitute
any nuisance, noxious odors, unsafe condition or waste in or about the Property, (iii) cause or
constitute any sound, vibration or electrical disturbance outside the Premises, or (iv) cause a
cancellation, increase the premiums for or deductibles under (unless such premiums or
deductibles are payable in full by Tenant pursuant to this Sublease), or otherwise adversely affect
in a material way any fire, casualty, property, liability or other insurance covering the Property,
the contents of the Premises, any business or activities conducted upon or from the Property or
any accident, act, error, omission, fault, negligence or strict liability occurring on or about the
Property.
5.3 Acceptance of Premises. Tenant's taking possession of the Premises shall
conclusively establish (i) that Tenant has visually examined the Premises, (ii) that the Premises
LEASE-ACE-ATC-PAGE 8
are at such time in good and satisfactory condition and state of repair, without visible defect, and
in compliance with this Sublease except to the extent specified in a written notice delivered by
Tenant to Landlord within five (5) business days after Tenant takes possession of the Premises,
(iii) Tenant's acceptance of the Premises as is except to the extent set forth in paragraph 1.10,
and (iv) that Landlord has fully satisfied any obligations of Landlord to install any fixture or
make any addition, alteration, modification or other improvement to the Premises except to the
extent set forth in paragraph 1.10.
5.4 Compliance with Laws. Tenant shall not use the Premises or permit anything to be
done in or about the Premises which will in any way conflict with any law, statute, regulation, •
ordinance or other requirement of any governmental authority now in force or which may
hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense, promptly comply
with all laws, statutes, regulations, orders, rules, ordinances and other requirements of any
governmental authority now in force or which may hereafter be in force, and with the
requirements of any board of fire insurance underwriters or similar bodies now or hereafter
constituted relating to, or affecting the condition, use or occupancy of, the Premises, excluding
structural changes not related to or affected by Tenant's improvements or acts. The judgment of
any court of competent jurisdiction or the admission of Tenant in any action involving Tenant,
whether Landlord be a party thereto or not, that Tenant has violated any law, statute, regulation,
order, rule, ordinance or the requirement of any governmental authority shall be conclusive of
that fact as between Landlord and Tenant. Tenant warrants that it is, and that at all times during
the Term it shall be, properly authorized, licensed, experienced, equipped, organized and
financed to perform this Sublease and conduct its business and activities upon the Premises.
5.5 Auctions. Tenant shall not conduct or permit to be conducted in, on or from the
Premises any auction or any fire, "going out of business," "close out," bankruptcy or similar sale,
whether said auction or sale be voluntary, involuntary, pursuant to an assignment for the benefit
of creditors or pursuant to any bankruptcy or other insolvency proceeding, without Landlord's
prior written consent, which consent Landlord may grant or withhold in its sole discretion.
Section 6. Utilities and Services.
6.1 If Separately Metered or Capable of Being Segregated. Tenant shall furnish, and pay
before delinquency all charges for, all water, gas, electric, communications, sanitation, sewage,
waste disposal, garbage collection and other utilities and services for the Premises which are
separately metered for the Premises or the charges for which are otherwise capable of being
segregated and billed to the occupant of the Premises. To the extent such separate meters are
submeters installed by Landlord or Tenant, Tenant shall pay for the subject utilities at the same
rates as Landlord pays therefor, and shall pay the applicable amounts to Landlord. Tenant shall
be permitted to install and activate separate submeters for the Premises at Tenant's sole expense.
In the event that the premises are not the sole property being metered, the appropriate pro-rata
share (2,694.5 sq ft) of that metered area will be allocated to the Tenant for payment.
6.2 If Not Separately Metered. Tenant shall reimburse Landlord, as part of paying Triple
Net Expenses in accordance with paragraph 4.9, for the Proration Amount of all costs incurred
LEASE-ACE-ATC-PAGE 9
(a) in furnishing utilities or services to the Building which are not separately metered to the
Premises or other subtenant premises, or (b) in furnishing utilities to the Common Areas.
Landlord shall not be liable under any circumstances for a loss of or injury to persons or property,
however occurring, through or in connection with or incidental to failure to furnish any utility.
6.3 Capacity. Tenant shall not install any equipment or otherwise use the Premises in
any manner that exceeds or overloads the capacity of the facilities furnishing utilities or services
for the Premises.
Section 7. Maintenance and Repair.
7.1 Maintenance and Repairs By Landlord. Throughout the Term Landlord shall
maintain (i) the roof of the Premises in a watertight condition, (ii) the exterior walls and
foundation of the Premises in good condition and state of repair, (iii) the Common Areas,
including the parking lot, parking lot lighting and landscaping for the Property in good condition,
and (iv) the heating, ventilating and air conditioning system of the Premises in good operating
condition. Tenant shall reimburse Landlord for such maintenance in accordance with paragraph
4.9 of this Sublease; provided that Tenant shall reimburse Landlord, within thirty (30) days of the
date Landlord's invoice therefor, for the full cost of any such maintenance with respect to
damages caused by negligent or willful acts or omissions of Tenant or its invitees or agents.
7.2 Maintenance by Tenant. Other than with respect to maintenance items to be
performed by Landlord, as set forth in paragraph 7.1, Tenant shall maintain the Premises and all
fixtures and improvements in or about the Premises (i) in a neat, clean, sanitary, safe and good
condition and state of repair, (ii) in at least as good condition and state of repair as they are now
in (or may hereafter be put), reasonable wear and tear and damage by insured casualty excepted,
and (iii) in accordance with the standards of comparable commercial facilities in the Renton,
Washington area. Tenant shall promptly replace all doors and windows of the Premises that may
become cracked or broken.
7.3 Repairs by Tenant. Except as provided for in paragraph 7.1, in the event of any
damage to or destruction of all or any part of the Premises or any fixtures or improvements in or
about the Premises, Tenant shall repair, replace or otherwise restore the same to at least as good
condition and state of repair as existed immediately prior to the occurrence of such damage or
destruction. Without limiting the generality of the foregoing, Tenant shall promptly repair any
damage to the Premises or any fixtures or improvements in or about the Premises resulting from
the installation, modification, use or removal of any personal property, fixtures or improvements
in or about the Premises.
7.4 Repairs by Landlord. Promptly upon execution of this Sublease, Landlord shall
perform such alterations, repairs or replacements to the Premises, if any, as are described in
paragraph 1.10.
7.5 Certain Insured Casualties. In the event the Premises are damaged or destroyed by
any casualty which is covered under fire and allied perils insurance furnished by Landlord
LEASE-ACE-ATC-PAGE 10
pursuant to this Sublease, then Landlord shall restore the Premises, provided insurance proceeds
are available to pay one hundred percent (100%) of the cost of restoration or Tenant agrees in
writing to pay all costs of restoration in excess of available insurance proceeds and furnishes
evidence reasonably acceptable to Landlord of Tenant's ability to pay such costs. In such event,
this Sublease shall continue in full force and effect, except that Tenant shall be entitled to a
proportionate reduction of the monthly Rent while such restoration takes place; such
proportionate reduction shall be based upon the extent (if any) to which the damage or
destruction and restoration efforts interfere with Tenant's business or activities upon the
Premises.
7.6 Certain Other Casualties. In the event the Premises are damaged or destroyed by a
casualty not covered by insurance, or if the available insurance proceeds are less than one
hundred percent (100%) of the cost of restoration and Tenant has not agreed in writing to pay all
costs of restoration in excess of available insurance proceeds and furnished evidence reasonably
acceptable to Landlord of its ability to pay such costs, then Landlord shall have the option to
either:
(a) restore the Premises, in which event this Sublease shall continue in full force
and effect, but the Rent shall be proportionately reduced in the manner set forth in paragraph 7.5;
or
(b) give notice to Tenant, at any time within sixty (60) days after the occurrence
of such damage or destruction, terminating this Sublease as of a date specified in such notice,
which date shall be not less than thirty (30) days nor more than sixty (60) days after giving such
notice.
If Landlord elects to restore the Premises and the Premises are not fully restored within six (6)
months after the occurrence of the damage or destruction, Tenant may give notice to Landlord, at
any time after the expiration of such six (6) month period, terminating this Sublease thirty (30)
days after Landlord's receipt of such notice if the Premises are not fully restored at the end of
such thirty (30) day period. If Landlord elects to terminate this Sublease in accordance with this
paragraph 7.6, this Sublease shall terminate and the monthly Rent, proportionately reduced based
upon the extent (if any) to which the damage or destruction interferes with Tenant's business or
activities upon the Premises, shall be paid to the date of such termination.
7.7 Casualty Near End of the Term. Notwithstanding any other provision of this Section
7 to the contrary, Landlord shall not have any obligation whatsoever to repair .or restore the
Premises when the damage or destruction results from any casualty occurring during the last six
(6) months of the Term (including any extension thereof). In such event, Tenant may at its
option terminate this Sublease as to any portion of the Premises rendered untenantable by such
casualty by giving Landlord at least thirty (30) days' advance written notice thereof. In the event
of such termination, the monthly Rent shall be proportionately reduced based upon the extent (if
any) to which the damage or destruction interferes with Tenant's business or activities upon the
Premises.
LEASE-ACE-ATC-PAGE I 1
7.8 Americans With Disabilities Act. The parties acknowledge that the Americans With
Disabilities Act of 1990 (42 U.S.C. §12101 et seq.) and regulations and guidelines promulgated
thereunder, as all of the same may be amended and supplemented from time to time (collectively
referred to herein as the "ADA") establish requirements for business operations, accessibility and
barrier removal, and that such requirements may or may not apply to the Premises and Building
depending on, among other things: (i) whether Tenant's business is deemed a "public
accommodation" or "commercial facility", (ii) whether such requirements are "readily
achievable", and (iii) whether a given alteration affects a "primary function area" or triggers
"path of travel" requirements. The parties hereby agree that: (i) Landlord shall be responsible for
ADA Title III compliance in the Common Areas, except as provided below, (ii) Tenant shall be
responsible for ADA Title III compliance in the Premises, including any leasehold improvements
or other work to be performed in the Premises under or in connection with this Sublease, and (iii)
Landlord may perform, or require that Tenant perform, and Tenant shall be responsible for the
cost of, ADA Title III "path of travel" requirements triggered by alterations in the Premises.
Tenant shall be solely responsible for requirements under Title I of the ADA relating to Tenant's
employees.
7.9 Landlord's Obligations. Except as otherwise specifically provided for in this Section
7, Landlord shall not be obligated to alter, maintain, repair, replace or otherwise restore the
Premises or any fixtures or improvements in or about the Premises.
Section 8. Fixtures, Additions, Alterations, Modifications and Other Improvements.
8.1 By Landlord. Promptly upon execution of this Sublease, Landlord shall install, repair
or replace such fixtures or improvements in or about the Premises, if any, as are described in
paragraph 1.10. Except as otherwise specifically provided for in paragraph 1.10, Landlord shall
not be obligated to install any fixture or make any addition, alteration, modification or other
improvement to the Premises.
8.2 By Tenant. Landlord hereby approves of Tenant installing the tenant improvements
described on the attached Exhibit C. Tenant shall not make any structural or exterior addition, or
any other alteration, modification or other improvement to the Premises (collectively referred to
as "improvements") without Landlord's prior written consent, which shall not be unreasonably
withheld. If Landlord consents to any such improvement, such consent may be conditioned upon
requirements relating to the quality, appearance and other characteristics of the improvement, the
manner in which the improvement is to be performed, the person or entity that is to perform the
improvement, the schedule and times for performance of the improvement, Tenant's obtaining all
applicable permits at Tenant's sole cost, the removal or surrender of the improvement at the
expiration or termination of the Term and any other matters reasonably deemed pertinent by
Landlord.
8.3 Signage. Landlord hereby consents to Tenant's installing on the Building the signage
that is described in paragraph 1.11. Tenant shall not install any other signage on the Building or
the Property without Landlord's prior written consent.
•
LEASE-ACE-ATC-PAGE 12
8.4 Ownership. All fixtures, additions, alterations, modifications or other improvements
installed in or made to the Premises during the Term, or by, through, at the request of or on
behalf of Tenant, shall automatically become the property of Landlord when so installed or made,
provided, however, that any personal property or trade fixtures so installed or made shall be and
remain the property of Tenant unless and until surrendered to Landlord upon the expiration or
termination of the Term. Tenant shall promptly take such action (including, but not limited to,
the execution, acknowledgment and delivery of bills of sale, releases and other documents) as
may be requested by Landlord to effectuate and evidence the ownership of such property by
Landlord.
Section 9. Liens and Encumbrances.
9.1 Arising Out of Tenant's Obligations. Tenant shall keep the Premises free from liens
and encumbrances arising out of or in connection with labor, materials, goods, services or other
items furnished, work performed or obligations incurred by, through, at the request of or on
behalf of Tenant. If a lien shall at any time be filed, Tenant shall either cause the same to be
discharged of record within twenty (20) days, or if Tenant, in Tenant's discretion and in good
faith, determines that such lien shall be contested, Tenant shall furnish such security as may be
reasonably necessary, in Landlord's discretion, to (i) prevent any foreclosure proceedings against
the Premises during the pendency of such contest, or (ii) cause the title insurance company of
Landlord's choosing to remove such lien as a matter affecting title to the Premises. If any such
lien or encumbrance is not released of record within twenty (20) days after the recordation
thereof or, alternatively, if Tenant shall fail to furnish security as provided in this paragraph 9.1,
Landlord may, at Tenant's expense, secure such release by payment., posting of a bond or any
other means available to Landlord. Tenant shall reimburse Landlord for all costs and expenses
(including, but not limited to, attorneys' fees) incurred by Landlord to secure such release, and
shall otherwise indemnify Landlord from any damages arising from such lien.
9.2 Notices. Tenant shall give Landlord at least two (2) days' advance written notice of
the furnishing of any labor, materials, goods, services or other items, the performance of any
work or the incurrence of any obligations by, through, at the request of or on behalf of Tenant
that may give rise to any mechanics', materialmen's or other lien or encumbrance affecting the
Premises. Landlord may at any time post and keep posted on the Premises any notices for the
protection of the Premises, Landlord and any other person or entity having any interest in such
property from any such liens or encumbrances.
Section 10. Entry by Landlord.
Landlord reserves and shall have the right to enter the Premises at all reasonable times during
normal business hours to inspect the Premises upon 24 hr written notice to tenant, to show them
to any purchaser or holder of any mortgage, deed of trust or other security instrument (a
"Mortgagee") or any prospective purchaser or Mortgagee, and to exercise any rights or remedies
afforded to Landlord under this Sublease or by law or for any other lawful purpose not
inconsistent with the provisions of this Sublease. Landlord may retain and, upon Landlord's
request, Tenant shall provide Landlord with keys that unlock all of the doors in or about the
LEASE-ACE-ATC-PAGE 13
Premises (excluding Tenant's vaults and safes). Tenant shall not change any locks on any such
doors without Landlord's prior written consent. If Tenant is not present to open and permit entry
into the Premises when such entry is necessary due to an emergency, Landlord may enter without
prior notice by a master key or any other means available to Landlord and any such entry by
Landlord shall not in any event constitute or be construed as a forcible or unlawful entry into, or
detainer of, the Premises or an eviction of Tenant.
Section 11. Insurance and Indemnity.
11.1 Tenant's Insurance. Tenant shall maintain in full force and effect throughout the
Term the following insurance coverages:
(a) Property Insurance. Fire and allied perils insurance insuring all personal
property(including fixtures, improvements, and inventory) of Tenant on or about the Premises in
an amount equal to the full replacement value thereof, plus such additional amount as may be
necessary to comply with building codes in effect at time of loss. Such insurance shall include
(but shall not be limited to) the perils of fire, extended coverage, vandalism and malicious
mischief, and such broadened perils as are conventionally available from the insurance industry
as a part of what is sometimes termed "package policy." Such insurance shall name Tenant as
the sole loss payee on such policy and require not less that thirty (30) days' notice to Landlord of
material modification, alteration, cancellation, or nonrenewal.
(b) Liability Insurance. General liability insurance covering all claims arising
out of accidents, injury (including death) to any person or damage to any property Occurring in or
about the Premises or in connection with the possession, use or occupancy of the Premises, with
limits of not less than Two Million Dollars ($2,000,000)per occurrence and Five Million Dollars
($5,000,000) aggregate combined bodily injury (including death) and damage to property. Such
general liability insurance shall be endorsed as additional insureds "Ace Aviation, Inc., its
officers, directors and related entities, and persons or entities for which they are responsible."
(c) Workers' compensation insurance as required by law.
The requirements of this Sublease as to insurance to be maintained by Tenant shall not in any
way limit or qualify any of the liabilities or obligations assumed by or imposed upon Tenant
under or by reason of this Sublease. If Tenant fails to procure and maintain such insurance,
Landlord may do so at Tenant's expense.
11.2 Tenant's Insurance Policies. All insurance required by paragraph 11.1 shall be
placed with such insurers and under such forms of policies as may be reasonably acceptable to
Landlord. All policies for such insurance shall:
(a) name insureds and include the endorsements described in paragraph 11.1; and
(b) be placed in property/casualty insurance companies which have a most recent
rating given by Best's Key Rating Guide of at least A (Excellent) or VII or above or in such other
LEASE-ACE-ATC-PAGE 14
companies as Landlord may approve, which approval shall not be unreasonably withheld or
delayed.
Tenant shall ensure that any policies of insurance it carries as insurance covering property shall
include permission from the insurance company to permit Tenant and Landlord to waive and
release their"rights against each other as respects insured property." Tenant shall also ensure that
policies of insurance it carries as insurance covering liability claims shall include a "cross
liability" endorsement or provision which affords coverage in the event one insured should
initiate a liability action against another insured, both as insureds under the insurance of the
Tenant.
11.3 Evidence of Insurance. Tenant shall promptly deliver to Landlord certificates of
insurance and such other evidence and assurance of the insurance and policies described in
paragraphs 11.1 and 11.2 (such as copies of the policies) as Landlord may request.
11.4 Landlord as Trustee of Proceeds. Landlord shall be the trustee of insurance proceeds
paid with respect to property of Landlord insured by Tenant pursuant to this Sublease. Subject to
exercise of other rights under this Sublease by Landlord, such proceeds shall be used for repair of
the Premises for damage resulting from a casualty insured against pursuant to this Section 11,
provided that (i) Tenant is not then in default under this Sublease, and (ii) Tenant promptly
commences the repairs, replacements and restorations, if any, required of Tenant pursuant to this
Sublease as a result of the loss giving rise to such proceeds in the manner reasonably specified in
advance by Landlord. If Tenant fails to satisfactorily complete such repairs, replacements and
restorations, Landlord may apply such proceeds against any amounts payable on account of
Landlord's performance thereof pursuant to this Sublease.
11.5 Landlord's Insurance. During the Term, Landlord shall maintain such fire, casualty
and other insurance for the Building and the Property as Landlord, in its sole discretion, sees fit.
Tenant shall reimburse Landlord for the Proration Amount of Landlord's cost for maintaining
such insurance pursuant to paragraph 4.9.
11.6 Indemnity. Tenant releases and shall defend, indemnify and hold harmless Landlord
and its affiliates, Landlord's and its affiliates' successors and assigns and the respective officers,
directors, employees, agents and representatives of Landlord, its affiliates and Landlord's and its
affiliates' successors and assigns (the "Indemnitees") from and against any and all claims, losses,
harm, costs, liabilities, damages and expenses (including, but not limited to attorneys' fees)
arising, whether before or after the expiration or termination of the Term, out of or in connection
with:
(a) any accident or injury (including death) to any person or damage to any
property (including the Premises) or environment occurring in or about the Premises or in
connection with the possession, use or occupancy of the Premises during the Term or pursuant to
this Sublease;
LEASE-ACE-ATC-PAGE 15
(b) any act, error, omission, fault, negligence, strict liability or product liability of
Tenant, any of Tenant's suppliers or contractors of any tier, the respective successors or assigns
of Tenant or any of Tenant's suppliers or contractors of any tier, the directors, officers, members,
managers, partners, owners, employees, agents, representatives, customers, licensees or invitees
of any of the foregoing or anyone acting on Tenant's behalf in connection with this Sublease or
Tenant's business;
(c)the conduct or interruption of any business or activity in or about the Premises;
or
(d) any breach or violation by Tenant of this Sublease.
Without limiting the generality of the foregoing, in connection with any action to enforce the
provisions of this paragraph 11.6 (e.g., as distinguished from any action against Tenant by its
employees), Tenant hereby waives any immunity, defense or protection that may be afforded by
workers' compensation, industrial insurance or similar laws (including, but not limited to, the
Washington Industrial Insurance Act, Title 51 of the Revised Code of Washington).
Notwithstanding the foregoing, Tenant shall not be required to so defend, indemnify or hold
harmless any of the Indemnitees from any claim, loss, harm, cost, liability or expense arising out
of any injury (including death) to any person or damage to any property to the extent and in the
percentage the same is caused by or results from the negligence of such Indemnitee.
11.7 Assumption and Release. Tenant, as a material part of the consideration to
Landlord, hereby assumes all risk of damage to property or injury (including death) to persons in,
upon or about the Premises, from any cause other than Landlord's gross negligence, and Tenant
hereby waives and releases all claims in respect thereof against the Indemnitees. The
Indemnitees shall not be liable for and are hereby released from any damage to property entrusted
to their employees or agents, nor for loss or damage to any property by theft or otherwise, nor for
any injury (including death) or damage to persons or property resulting from fire, explosion,
falling items, steam, gas, electricity, water or rain which may leak from any part of the Premises
or the Property, or from the pipes, appliances or plumbing works therein or from the roof, street
or subsurface or from any other place, unless and to the extent proximately caused by the gross
negligence of Landlord, its agents, servants or employees. The Indemnitees shall not be liable
for interference with any intangible right of or the business of Tenant, nor shall they be liable for
any latent defect in the Premises, the Building or the Property. Tenant shall give prompt notice
to Landlord in case of damage or accident in or defects to the Premises, the Building or the
Property.
Section 12. Condemnation.
12.1 Right to Terminate. If all or any part of the Premises shall be taken or appropriated
for public or quasi-public use by right of eminent domain (with or without litigation) or transfer
in lieu thereof, Landlord and Tenant shall each have the right, exercisable within thirty (30) days
after receipt of notice of such taking or appropriation, to terminate this Sublease as of the date
possession is taken or appropriated by the condemning authority; provided, however, that Tenant
LEASE-ACE-ATC-PAGE 16
may so terminate this Sublease only if such taking or appropriation shall be of such an extent and
nature so as to substantially interfere with Tenant's business and activities upon the Premises.
12.2 Award. No award for any partial or entire taking or appropriation of the Premises
shall be apportioned between Landlord and Tenant. Tenant shall cooperate with respectto any
such taking or appropriation so that Landlord may receive the maximum award to which it is
entitled. The full proceeds accruing or awarded as a result of any taking or appropriation
affecting the Premises shall inure to the exclusive benefit of and belong entirely to Landlord.
Tenant assigns to Landlord any and all rights that Tenant may have in any such proceeds and
award; provided, however, that nothing contained herein shall be deemed to give Landlord any
interest in or to require Tenant to assign to Landlord any award made to Tenant for the taking or
appropriation of personal property or trade fixtures belonging to Tenant, for the interruption of or
damage to Tenant's business or activities or for Tenant's unamortized cost of leasehold
improvements.
12.3 Abatement of the Rent. If any taking or appropriation of the Premises does not
result in a termination of this Sublease, Tenant shall be entitled to a proportionate reduction in
the monthly rent based upon the extent (if any) to which such taking or appropriation interferes
with Tenant's business or activities upon the Premises.
12.4 Temporary Taking. No temporary taking or appropriation of the Premises, or of
Tenant's rights therein or under this Sublease, shall give any right to terminate this Sublease or
give Tenant any right to any abatement of the rent. Any award made to Tenant by reason of any
such temporary taking or appropriation for a period within the Term shall inure to the exclusive
benefit of and belong entirely to Tenant.
Section 13. Assignment and Subletting by Tenant.
13.1 Landlord's Consent Required. Tenant shall not transfer, mortgage, pledge,
hypothecate, encumber or otherwise assign this Sublease or any interest therein, and shall not
sublet or share all or any part of the Premises (voluntarily, involuntarily or by operation of law)
without the prior written consent of Landlord, and any attempt to do so without such consent
shall be void and shall constitute default under and .breach of this Sublease. Transfer of the
controlling interest in Tenant shall constitute a transfer within the meaning of the preceding
sentence. Landlord may condition its consent on any reasonable factor which it considers
appropriate, including, but not limited to, (i) Landlord's obtaining the right to receive a portion of
the rent paid pursuant to a sublease and (ii) the effect which such a sublease or assignment would
have on the Building or the business plans of Landlord. In addition, Landlord shall have the right
to recapture the portion of the Premises that Tenant is proposing to assign, sublet or otherwise
transfer. If Landlord exercises its right to recapture, this Sublease shall automatically be
amended (or terminated if the entire Premises is being assigned or sublet) to delete the applicable
portion of the Premises effective on the proposed effective date of the Transfer, although
Landlord may require Tenant to execute a reasonable amendment or other document reflecting
such reduction or termination.
LEASE:-ACE-ATC-PAGE 17
13.2 No Release of Tenant. No assignment or subletting, and no consent of Landlord to
any assignment or subletting, by Tenant or Tenant's tenants or assignees of any tier shall relieve
Tenant of any obligation to be performed by Tenant under this Sublease, whether before or after
such consent, assignment or subletting. The consent of Landlord to any assignment or subletting
shall not relieve the obligation to obtain Landlord's express written consent to any other
assignment or subletting. The acceptance of the rent by Landlord from any person or entity other
than Tenant shall not be deemed to be a waiver by Landlord of any provision of this Sublease or
to be consent to any assignment or subletting. Any assignment or subletting by Tenant or
Tenant's tenants or assignees of any tier without the prior written consent of Landlord shall, at
Landlord's option, be void.
13.3 Attorneys' Fees. If Landlord shall consent to a sublease or assignment under this
Section 13, Tenant shall reimburse the reasonable expenses (including, but not limited to,
attorneys' fees) incurred by Landlord to enforce the terms set forth.
Section 14. Subordination and Estoppel Certificates.
14.1 Subordination. This Sublease, at Landlord's option, shall be subject and subordinate
to any and all mortgages, deeds of trust or other security instruments (hereinafter "Mortgages")
and ground Subleases now or hereafter affecting the Premises or Landlord's interest or estate in
the Premises; provided that the Mortgagee under such Mortgage or the lessor under such ground
Sublease, as the case may be, shall agree to recognize Tenant's subleasehold interest so long as
Tenant is not in default under or in breach of this Sublease. Tenant further agrees that any such
Mortgagee or ground lessor shall have the right to cure any default under or breach of this
Sublease by Landlord within thirty (30) days after such Mortgagee's or ground lessor's receipt of
written notice thereof or, if the nature of such breach or default is such that the same cannot
reasonably be cured within such thirty (30) day period, such longer period as may reasonably be
required to commence and diligently prosecute the same to completion. If any Mortgagee or
ground lessor shall elect to have this Sublease prior to its Mortgage or ground Sublease, and shall
give written notice thereof to Tenant, this Sublease shall be deemed prior to such Mortgage or
ground Sublease, whether this Sublease is dated prior or subsequent to the date of said Mortgage
or ground Sublease or the date of the recording thereof
14.2 Transfer of Landlord's Interest and Release. In the event of any sale or other transfer
of the Property or the Building (other than a Mortgage), Landlord shall be relieved from and after
the date of such transfer of all obligations and liabilities of Landlord under this Sublease. Upon
such assumption, Tenant shall attorn to and recognize such transferee as Landlord under this
Sublease. Tenant hereby consents to any such assignment or transfer. The liability of Landlord to
Tenant for any default by Landlord under this Sublease or arising in connection herewith or with
Landlord's operation, management, leasing, repair, renovation, alteration, or any other matter
relating to the Building or the Premises, shall be limited to the interest of Landlord in the
Building (and rental proceeds). Tenant agrees to look solely to Landlord's interest in the
Building (and rental proceeds) for the recovery of any judgment against Landlord, and Landlord
shall not be personally liable for any such judgment or deficiency after execution thereon. Under
LEASE-ACE-ATC-PAGE 18
no circumstances shall any present or future officer, director or affiliate of Landlord have any
liability for the performance of Landlord's obligations under this Sublease.
14.3 Estoppel Certificate. Tenant shall from time to time upon not less than ten (10) days'
prior written notice from Landlord, execute, acknowledge and deliver to Landlord or its designee
a statement in writing acknowledging, among other things: (i) the date this Sublease was
executed and the date it expires; (ii) the date Tenant entered into occupancy of the Premises; (iii)
that Tenant is paying rent, the amount of such rent and the date to which such rent has been paid;
and certifying: (iv) that this Sublease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way (or specifying the date of agreement so affecting
this Sublease); (v) that this Sublease represents the entire agreement between the parties as to this
leasing (or specifying any amendment or addition hereto); (vi) that all conditions under this
Sublease to be performed by Landlord have been satisfied (or specifying such conditions as have
not been satisfied); (vii) that on the date thereof there are no existing defenses or offsets which
Tenant has against the enforcement of this Sublease by Landlord (or specifying such defenses or
offsets); (viii) that there are not, to Tenant's knowledge, any uncured defaults under or breaches
of this Sublease by Landlord (or specifying such defaults and breaches if any are claimed); (ix)
and that no rent has been paid more than one month in advance (or specifying such rent as has
been paid more than one month in advance). If Tenant fails to deliver such statement within such
ten (10) day period, Tenant shall (i) be deemed to have given such statement and shall be deemed
to have admitted the accuracy of any related statement made by Landlord, and (ii) shall pay
Landlord a penalty of five hundred dollars $500.00 for each day commencing on the eleventh
(11th1) day and continuing until Tenant delivers such statement to Landlord. It is intended that
any such statement may be relied upon by a prospective purchaser of Landlord's interest or a
mortgagee of Landlord's interest or assignee of any mortgage upon Landlord's interest in the
Premises.
Section 15. Default; Remedies.
15.1 Material Default or Breach by Tenant. The occurrence of any of the following shall
constitute a material default and breach of this Sublease by Tenant:
(a) any failure by Tenant to pay the rent or any other amounts required to be paid
under this Sublease, where such failure continues for five (5) business days after written notice
thereof by Landlord to Tenant;
(b) any failure by Tenant to perform any other obligation of Tenant under this
Sublease, where such failure continues for thirty (30) days after written notice thereof by
Landlord to Tenant; provided that if the nature of the default or breach is such that the same
cannot reasonably be cured within such thirty (30) day period, then Tenant shall not be in
material default or breach if Tenant shall within such period commence such cure and thereafter
diligently prosecute the same to completion;
(c) the making by Tenant of any general assignment or general arrangement for
the benefit of creditors; the filing by or against Tenant of a petition to have Tenant adjudged a
LEASE-ACE-ATC-PAGE 19
bankrupt or of a petition for reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60)
days); the appointment of a trustee or receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Sublease, where possession is not
restored to Tenant within thirty (30) days; or the attachment, execution or other judicial seizure
of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this
Sublease, where such seizure is not discharged within thirty (30) days;
(d) the Premises remain unoccupied or unattended for more than fifteen (15)
consecutive days (other than a temporary vacancy of a portion of the Premises when the Rent is
current) or Tenant otherwise abandons the Premises; or
(e) the occurrence of(i) two (2) or more defaults in the payment of rent or other
charges which would allow Landlord to issue a notice of default in any twelve (12) month period,
or (ii) three (3) or more nonmonetary defaults under this Sublease which would allow Landlord
to issue a notice of default in any twelve (12) month period.
15.2 Remedies for Material Default or Breach by Tenant. In the event of any such
material default or breach by Tenant, Landlord may:
(a) re-enter and take possession of the Premises (and all property of Tenant on the
Premises) using all lawful force and means of self-help to do so;
(b) terminate this Sublease by giving Tenant written notice thereof, in which event
Tenant shall immediately pay to Landlord a sum equal to the amount of Landlord's costs,
expenses, losses and damages occasioned thereby, such as expenses of reletting and collection
(including, but not limited to, attorneys' fees, real estate commissions and costs of renovation
and alteration of the Premises) and the amount by which the rent and other amounts due or to
become due under this Sublease for the balance of the Term exceed the amount of rent Landlord
collects from reletting of the Premises, if any, for the same period; or
(c) from time to time, without terminating this Sublease, relet all or any part of the
Premises as the agent and for the account of Tenant at such rent, for such term and upon such
terms and conditions as Landlord may in its sole and absolute discretion deem advisable, in
which event the rents received on such reletting shall be applied first to the expenses of reletting
and collection (including, but not limited to, attorneys' fees, real estate commissions and costs of
renovation and alteration of the Premises) and thereafter to payment of all rent and other amounts
due or to become due under this Sublease, and if a sufficient sum shall not be thus realized to pay
such amounts, Tenant shall pay Landlord any deficiency monthly, and Landlord may bring an
action therefor as such monthly deficiency shall arise, or, at Landlord's option, bring one or more
actions for cumulative deficiencies.
15.3 Performance of Tenant's Obligations by Landlord. If Tenant fails to timely perform
any obligations of Tenant under or otherwise comply with this Sublease, Landlord may by
written notice to Tenant demand such compliance. If Tenant fails to commence such compliance
LEASE-ACE-ATC-PAGE 20
within ten (10) days after Tenant's receipt of such demand or if Tenant thereafter fails to
diligently and assiduously prosecute and achieve such compliance, Landlord may, at Tenant's
sole risk and expense, perform the compliance by the most expeditious means available to
Landlord. Tenant shall reimburse Landlord for all costs and expenses incurred by Landlord to
achieve such compliance immediately upon receipt of Landlord's invoice therefor.
15.4 Remedies Cumulative. The rights and remedies of Landlord under paragraphs 15.2
and 15.3 and any other provisions of this Sublease are cumulative and in addition to all other
rights and remedies afforded to Landlord by law.
15.5 Default by Landlord. Landlord shall not be in default under or breach of this
Sublease unless Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice thereof by Tenant to Landlord
and to the holder of any Mortgage or ground lease affecting the Premises, whose name and
address shall have theretofore been furnished to Tenant in writing; provided, however, that if the
nature of the default or breach is such that the same cannot reasonably be cured within such thirty
(30) day period then Landlord shall not be in default or breach if Landlord shall commence
implementing the cure within such thirty (30) day period and thereafter diligently prosecute the
same to completion.
Section 16. Environmental Matters.
16.1 Definitions. Whenever used in this Section 16, the following terms shall have the
following specified meanings: (i) "Law or Regulation" shall mean any environmentally related
local, state or federal law, regulation, ordinance or order (including without limitation any final
order of any court of competent jurisdiction), now or hereafter in effect; and (ii) "Hazardous
Material" shall mean any chemical, substance, material or waste or component thereof which is
now or hereafter listed, defined or regulated as a hazardous or toxic chemical, substance, material
or waste or component thereof by any federal, state or local governing or regulatory body having
jurisdiction, or which would trigger any employee or community "right-to-know" requirements
adopted by any such body, or for which any such body has adopted any requirements for the
preparation or distribution of material safety data sheet("MSDS").
16.2 Hazardous Material. Tenant shall not transport, use, store, maintain, generate,
manufacture, handle, dispose, release or discharge any Hazardous Material upon or about the
Premises, the Building or the Property, or permit Tenant's employees, agents, contractors,
invitees and other occupants of the Premises to engage in such activities upon or about the
Premises, the Building or the Property. However, the foregoing provisions shall not prohibit the
transportation to and from, and use, storage, maintenance and handling within, the Premises of
substances customarily used in the business or activity expressly permitted to be undertaken in
the Premises pursuant to Paragraph 1.9, provided (i) such substances shall be used and
maintained only in such quantities as are reasonably necessary for such permitted use of the
Premises and the ordinary course of Tenant's business therein, strictly in accordance with all
applicable Laws or Regulations, the highest prevailing standards, and the manufacturers'
instructions therefor, (ii) such substances shall not be disposed of, released or discharged in the
LEASE-ACE-ATC-PAGE 21
•
Premises, the Building or the Property, and shall be transported to and from the Premises in
compliance with all applicable Laws or Regulations, and as Landlord shall reasonably require,
(iii) if any Law or Regulation or Landlord's trash removal contractor requires that any such
substances be disposed of separately from ordinary trash, Tenant shall make arrangements at
Tenant's expense for such disposal directly with a qualified and licensed disposal company at a
lawful disposal site (subject to scheduling and approval by Landlord), (iv) any remaining such
substances shall be completely, properly and lawfully removed from the Property upon expiration
or earlier termination of the Term, and (v) for purposes of removal and disposal of any such
substances, Tenant shall be named as the owner and generator, obtain a waste generator
identification number, and execute all permit applications, manifests, waste characterization
documents and any other required forms.
16.3 Notification. Tenant shall promptly notify Landlord of(i) any enforcement, cleanup
or other regulatory action taken or threatened by any governmental or regulatory authority with
respect to the presence of any Hazardous Material on the Premises, the Building or the Property
or the migration thereof from or to other property, (ii) any demands or claims made or threatened
by any party relating to any loss or injury resulting from any Hazardous Material on the Premises,
the Building or the Property, (iii) any release, discharge or non-routine, improper or unlawful
disposal or transportation of any Hazardous Material on or from the Premises or in violation of
this Section 16, and (iv) any matters where Tenant is required by Law or Regulation to give a
notice to any governmental or regulatory authority respecting any Hazardous Material on the
Premises, the Building or the Property. Landlord shall have the right (but not the obligation) to
join and participate, as a party, in any legal proceedings or actions affecting the Premises, the
Building or the Property initiated in connection with any Law or Regulation. At such times as
Landlord may reasonably request, Tenant shall provide Landlord with a written list, certified to
be true and complete, identifying any Hazardous Material then used, stored, or maintained upon
the Premises, the use and approximate quantity of each such material, a copy of any MSDS
issued by the manufacturer therefor, and such other information as Landlord may reasonably
require or as may be required by Law or Regulation.
16.4 Clean Up Requirements. If any Hazardous Material is released, discharged or
disposed of by Tenant or any other occupant of the Premises, or their employees, agents or
contractors, on or about the Building or the Property in violation of the foregoing provisions,
Tenant shall immediately, properly and in compliance with all applicable Laws and Regulations
clean up and remove the Hazardous Material from the Building, the Property and any other
affected property and clean or replace any affected real or personal property or aquatic lands
(whether or not owned by Landlord), at Tenant's expense (without limiting Landlord's other
remedies therefor). Such clean up and removal work shall be subject to Landlord's prior written
approval (except in emergencies), and shall include, without limitation, any testing, investigation,
and the preparation and implementation of any remedial action plan required by any court or
governmental body having jurisdiction or reasonably required by Landlord. If Landlord or any
Mortgagee(s) or governmental body arranges for any tests or studies showing that this Section 16
has been violated, Tenant shall pay for the costs of such tests. If any Hazardous Material is
released, discharged or disposed of on or about the Premises, the Building or the Property and
such release, discharge or disposal is not caused by Tenant or other occupants of the Premises, or
LEASE-ACE-ATC-PAGE 22
their employees, agents or contractors, such release, discharge or disposal shall be deemed
casualty damage pursuant to Paragraphs 7.5 through 7.7 to the extent that the Premises are
affected thereby; in such case, Landlord and Tenant shall have the obligations and rights
respecting such casualty damage provided under such paragraphs.
Section 17. Miscellaneous.
17.1 Memorandum of Sublease. Neither party shall record this Sublease or otherwise
cause this Sublease to be recorded. However, upon the request of either party, the parties shall
execute, acknowledge, deliver and record a memorandum of this Sublease in form and content
satisfactory to both parties.
17.2 Notices. Any notice, request, designation, direction, statement or other
communication under this Sublease shall be in writing and shall be delivered in person or mailed,
properly addressed and stamped with the required postage, to the intended recipient at its address
set forth in paragraph 1.7 or 1.8, as applicable; provided that either party may change its address
specified in paragraph 1.7 or 1.8, as applicable, by giving the other party notice of such change in
accordance with this paragraph 17.2. All notices shall be deemed given when actually delivered
to the addressee as set forth herein.
17.3 No Brokers. Each party represents and warrants to the other party that it has not
employed, authorized or received in connection with this Sublease or the Premises the services of
any real estate broker or agent for which any commission or fee is or would be payable. Each
party shall defend and indemnify the other against any cost or expense (including, but not limited
to, attorney's fees) arising out of a claim for such commission or fee or the payment thereof
based on the words or action of such party.
17.4 Attorneys' Fees. In the event of any action to enforce this Sublease, for
interpretation or construction of this Sublease or on account of any default under or breach of this
Sublease, the prevailing party in such action shall be entitled to recover, in addition to all other
relief, from the other party all attorneys' fees incurred by the prevailing party in connection with
such action (including, but not limited to, any appeal thereof).
17.5 No Partnership. This Sublease shall not be interpreted or construed to create an
association, joint venture or partnership between the parties or to impose any partnership
obligations or liability upon either party. Further, except as otherwise specifically provided in
this Sublease, neither party shall have any right, power or authority to enter into any agreement or
undertaking for or on behalf of, to act as or be an agent or representative of, or to otherwise bind
the other party.
17.6 Nonwaiver. The failure of either party to insist upon or enforce strict performance
by the other party of any of the provisions of this Sublease or to exercise any rights or remedies
under this Sublease shall not be construed as a waiver or relinquishment to any extent of such
party's right to assert or rely upon any such provisions or rights in that instance if compliance is
LEASE-ACE-ATC-PAGE 23
still possible and reasonable or in any other instance; rather, the same shall be and remain in full
force and effect.
17.7 Survival. The obligations imposed upon Tenant under paragraphs 3.3, 3.4, 4.2, 4.3,
4.6, 4.7, 4.8, 4.9, 5.5, 8.4, 13.2 and 14.2, Sections 9, 11, 12, 15 and 16, and all other provisions
of this Sublease which may reasonably be interpreted or construed as surviving the expiration or
termination of this Sublease, shall survive the expiration or termination of this Sublease.
17.8 Entire Agreement. This Sublease sets forth the entire agreement of the parties, and
supersedes any and all prior agreements, with respect to the Premises. This Sublease shall be
construed as a whole. All provisions of this Sublease are intended to be correlative and
complementary.
17.9 Amendment. No amendment, change or modification of any provision of this
Sublease shall be valid unless set forth in a written amendment to this Sublease signed by
Landlord and Tenant.
17.10 Successors and Assigns. Subject to the restrictions on assignments and subletting
by Tenant set forth in Section 13, this Sublease shall be fully binding upon, inure to the benefit of
and be enforceable by the successors, assigns and legal representatives of the respective parties.
If Tenant is comprised of more than one person or entity, each such person or entity shall be
jointly and severally liable under this Sublease.
17.11 Implementation. Each party shall take such action (including, but not limited to,
the execution, acknowledgment and delivery of documents) as may reasonably be requested by
the other party for the implementation or continuing performance of this Sublease.
17.12 Invalid Provisions. The invalidity or unenforceability of any provision of this
Sublease shall not affect the other provision hereof, and this Sublease shall be construed in all
respects as if such invalid or unenforceable provisions were replaced by a valid and enforceable
provision as similar as possible to the provision replaced.
17.13 Patriot Act Compliance. Tenant hereby represents and warrants that neither Tenant,
nor any persons or entities holding any legal or beneficial interest whatsoever in Tenant, are (i)
the target of any sanctions program that is established by Executive Order of the President or
published by the Office of Foreign Assets Control, US. Department of the Treasury ("OFAC");
(ii) designated by the President or OFAC pursuant to the Trading With the Enemy Act, 50 U.S.C.
App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot
Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of
the President issued pursuant to such statutes; or (iii) named on the following list that is
published by OFAC: "List of Specially Designated Nationals and Blocked Persons." If the
foregoing representation is untrue at any time during the Term, an Event of Default will be
deemed to have occurred, without the necessity of notice to Tenant.
LEASE-ACE-ATC-PAGE 24
17.14 Governing Law. This Sublease shall be interpreted, construed and enforced in all
respects in accordance with the laws of the State of Washington.
17.15 Counterparts. This Sublease may be executed in two or more counterparts, all of
which shall constitute one and the same agreement.
17.16 Quiet Enjoyment. Landlord warrants that it has the right to make this Sublease,
and that Tenant, if not in default, shall have quiet and peaceful possession and enjoyment of the
Premises for the entire Term, including any extension thereof, in accordance with the provisions
of this Sublease.
Landlord: Tenant:
Ace Aviation, Inc. Aviation Training Center, Inc.
By: :AA By: 7 -•,:_. q .r.
Kurt Boswell, President Marie Campbell, Presi nt
Date Signed: Mr�y i , )015 Date Signed: 5.--/ 9— /5
•
LEASE-ACE-ATC-PAGE 25
STATE OF WASHINGTON )
) ss.
COUNTY OF KING
On this jcith day of PI � , 2015, before me, the undersigned, a
Notary Public in and for the StateCtkashington, duly commissioned and sworn, personally
appeared Kurt Boswell, to me known to be the President of Ace Aviation, Inc., the corporation
that executed the within and foregoing Sublease as Landlord, and acknowledged the said
Sublease to be the free and voluntary act and deed of said corporation for the uses and purposes
therein mentioned, and on oath stated that he was duly qualified and acting as said officer of the
corporation and that he was authorized to so execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.
BRITANY RENZ tr.
Notary Public Notary Pu• '' n and for tOate of
State of Washington Washin` U'• residing at: //
My Commission Expires My Commission expires: if
April 01 , 2019
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this tql-h day of lam( , 2015, before me, the undersigned, a
Notary Public in and for the State o Washington, duly commissioned and sworn, personally
appeared Marie Campbell, to me known to be the President of Aviation Training Center, Inc., the
corporation that executed the within and foregoing Sublease as Tenant, and acknowledged the
said Sublease to be the free and voluntary act and deed of said corporation for the uses and
purposes therein mentioned, and on oath stated that she was duly qualified and acting as said
officer of the corporation and that she was authorized to so execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.
BR(TANY RENZ /
Notary Public
• State of `Nashingtan Notary Pub ' and fort e of
My Commission Expire Washingti iding at: pi/, /Y!7
April 01 , 2019 My Commission expires: flfirji
LEASE-ACE-ATC-PAGE 26
Exhibit A to Sublease Agreement
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LEASE-ACE-ATC-PAGE 27
Exhibit B to Sublease Agreement
Landlord shall perform the following work with respect to the Premises at Landlord's sole cost
and expense:
1 WALLS: all the perimeter walls (building and exterior walls) of the Premises shall be
framed and insulated, drywall with fire tape finish on the Premises side.
2 FLOORS: concrete or gyp-crete throughout the Premises, level smooth finished and ready
to accept carpet or vinyl floor coverings to be applied by the tenant (not a finished product).
3 FIRE SPRINKLERS: fire sprinkler system shall be provided throughout the unimproved
Premises. Tenant shall be responsible for modifications and additional fire sprinkler heads
required to provide complete distribution and trim in all finished tenant improvement areas.
4 PLUMBING: Provisions have been stubbed to Premises only. Any hardware, fixtures or
piping to the zones interior or the perimeter shall be Tenant's responsibility.
5 HVAC: heating, ventilation and air conditioning system complete with curbs, electrical,
gas, and controls, capable of providing up to 500 square feet in one zone. HVAC system shall be
stubbed out to Premises.
6 HVAC system shall be capable of providing the following ambient design conditions:
Summer 83 degrees dB / 66 degrees WB at 0.5%
Winter 25 degrees dB /at 6% and 21 degrees dB at 1%
Inside design conditions 70 degrees heating/ 75 degrees cooling
Tenant shall be responsible for ductwork distribution and exhaust fans within the Premises.
7 ELECTRICAL: Landlord shall furnish and install 120/208 electrical services and panels
sized adequately to support a fully occupied office suite. Wiring to the Premises perimeter or
common area electrical room / closet, terminated at a panel box. Tenant shall be responsible for
rough in and trim, light fixtures, outlets, telephone system, data systems within the Premises
from the landlord provided panels.
8 LOW VOLTAGE: Landlord shall provide fire alarm panel and extend fire alarm cabling
and services to the Premises.
LEASE-ACE-AR'-PAGE 28
Exhibit C to Sublease Agreement
Tenant shall install the following leasehold improvements in the Premises at Tenant's sole cost
and expense, subject to reimbursement of some or all of the cost thereof through theTenant
Improvement Allowance:
1 Any permits required by applicable governmental authoritiesrelated to completion of the
leasehold improvements.
2 Framing, drywall, finishing of leasehold improvements walls.
3 Interior doors
4 Cabinets, casework, countertops, millwork, and hardware within the Premises.
5 All painting, staining, wall and floor coverings within the Premises.
6 Suite entry doors and relights in perimeter, corridor, interior and demising walls.
7 All plumbing rough in, trim, fixtures, toilet accessories, water heaters required to
complete extension of the Landlord-provided plumbing.
8 All electrical rough in from point of connection to landlord-provided panels, trim,
switching, lighting, wiring and equipment wiring.
9 Any skylights or special ceiling treatments.
10 Acoustical ceiling grid, tile and sound insulation.
1 1 Interior relights and glazing.
12 Special structural requirements made necessary by Tenant usage.
13 Security systems.
14 Phone, music, intercom and communications systems.
15 Specialties; including pneumatic tube systems, compressed air or vacuum systems.
16 Fire protection extension, rough in, trim, heads as required to meet local jurisdiction
having permit authority.
17 HVAC distribution from the landlord/shell-provided system, exhaust fans, duct and grills
to serve areas within the Premises.
18 Roof patches required due to tenant improvement work (see 9 above); PROVIDED
THAT TENANT SHALL NOT MAKE ANY EXTERIOR OR ROOF PENETRATIONS
WITHOUT PRIOR WRITTEN APPROVAL FROM LANDLORD.
LEASE-ACE-ATC-PAGE 29