EXHIBIT 10.3
SUBLEASE
THIS SUBLEASE is made this ________ of _____________________, 2000, between
WYOMING ASSOCIATES, INC., a South Carolina corporation, ("Tenant"), and ESA
SERVICES, INC. ("Subtenant").
RECITALS
1. Tenant is the Tenant of the property commonly known as Kensington
Drive, Spartanburg, South Carolina (the "Building" or the "Premises"). Tenant
is the assignee of the interest of Xxxxxxx Development Associates, Inc., as
tenant under an Agreement from The City of Spartanburg ("Landlord") ("Underlying
Lease"), a copy of which is attached hereto as "Exhibit A".
2. Subtenant desires a sublease for the use of sufficient space (the
"Sublease Premises") to park one Challenger (N333GJ) aircraft (the "Aircraft")
within the Premises at a location reasonably designated by Tenant from time to
time (the "Sublease Premises") pursuant to the terms and conditions contained in
this Sublease ("Sublease"). In addition, Subtenant shall be entitled to
nonexclusive reasonable use of the restroom facilities, crew accommodations,
office space, kitchen and conference room by its employees, pilots and mechanic
as provided herein and provided such use does not unreasonably interfere with
Tenant's use thereof. Other subtenants shall share space in and on the Premises
with Subtenant. Its interests shall not be exclusive.
3. Tenant for itself and/or its other subtenants shall use the balance of
the Premises.
In consideration of the mutual covenants, conditions and agreements
contained herein, the parties agree as follows:
SECTION ONE
DESCRIPTION OF SUBLEASE PREMISES
Tenant shall demise to Subtenant the Sublease Premises, as described in
Paragraph 2 above. Subtenant agrees to lease the Sublease Premises in an "as is"
condition, except as otherwise expressly set forth herein, provided that Tenant,
and not Subtenant, shall have complete responsibility for the condition of, and
any repair cost related to, the Sublease Premises and the Premises, except for
damage caused by Subtenant, its agents, servants, visitors, invitees, guests or
licensees and in the event of any and all violations of any local, state and/or
federal environmental hazardous waste laws, rules and regulations that exist as
of the date of this Sublease and/or are not introduced to the Premises by the
Subtenant, its agents, servants, visitors, invitees, guests or licensees.
SECTION TWO
PURPOSE OF SUBLEASE
The Sublease Premises demised under this Sublease shall be used by
Subtenant for aircraft hanger purposes for the storage of the Aircraft, for
conducting maintenance on the Aircraft and uses related thereto and for no other
purposes. Subject to Section 25, Subtenant
may hire outside vendors for aircraft and hanger maintenance services other than
those required to be provided by Tenant hereunder and shall not be obligated to
use Tenant or vendors provided by Tenant for such maintenance services.
SECTION THREE
TERM OF SUBLEASE; RENEWAL TERM
The term of this Sublease shall be ten (10) years commencing upon
completion of the Premises Improvements and terminating on December 31, 2009.
Subject to the provisions below, Subtenant shall have the option of extending
this Sublease for two (2) successive five year periods (each an "Extension
Term") upon written notice delivered to Tenant not less than 180 days prior to
the end of the current term or Extension Term unless terminated sooner as
provided herein or under the Underlying Lease. Termination or expiration of the
term of the Underlying Lease shall also extinguish this Sublease, provided that
in the event of a monetary breach of the Underlying Lease by Tenant or its
assignor, Subtenant shall have the right to cure such breach within thirty (30)
days of notice thereof, and further provided that the amounts paid to Landlord
to cure any such breach may be deducted from the rent payable hereunder. If the
Term of the Underlying Lease expires, any applicable Extension Term shall
terminate concurrently.
SECTION FOUR
RENT
During the initial term and any Extension Term of this Sublease, Subtenant
shall pay to Tenant Two Thousand Nine Hundred and no/100 ($2,900.00) Dollars per
month (subject to adjustments as provided below) payable on the first day of the
term of the Sublease and on the first day of each subsequent month as complete
and full rent for the Sublease Premises. Any other sums due as additional rental
under the provisions of this Sublease if any shall constitute rent and be due on
the basic rental payment due date first occurring after notice and invoice from
Tenant. All such payments shall be paid to Landlord without set off except as
provided in Section 3.
The monthly rental payments shall increase on the same dates as the rent
increases go into effect under their underlying Agreement with the City of
Spartanburg. The increase paid by each Subtenant shall be in proportion to the
percentage increase of the underlying Agreement. Each Subtenant shall pay its
proportionate share of the cost of operating the Premises (as defined in Section
5 below) as "Additional Rent".
SECTION FIVE
ADDITIONAL RENT
Tenant shall pay and maintain records of payment of public liability and
property damage insurance, and the costs of common area maintenance on the
Premises and shall on an annual basis present statements of account on the same
expenses and collect from Subtenant, as Additional Rent, as then existing.
Subtenant's share of common area maintenance expenses shall be proportional
based on the number of pilots and personnel associated with the aircraft fleet
of Subtenant. The proportion may change based on changes in the type, size and
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requirements of the aircraft fleet and the number of personnel associated with
the aircraft fleet. TENANT SHALL CONTRIBUTE $950.00 PER MONTH AS ADDITIONAL
RENT. Additional Rent shall be made with each monthly Rent payment. Adjustment
in the monthly Additional Rent payment shall be made by March 1, based on the
actual expenditures of the preceding twelve month period. If the amount
collected does not equal the actual expenditures, adjustment shall be made
annually as required within thirty (30) days of Tenant's rendering of account.
For purposes of this paragraph, "Common Area Maintenance Expense" shall
include all costs and expenditures incurred by Tenant in maintaining and
operating refuse collection facilities and removal; parking lot and tarmac
sweeping and snow removal; parking lot and tarmac repairs and maintenance
including patching, resurfacing and repainting; common area lighting
maintenance, security; sidewalk cleaning; landscaping maintenance and repair,
including replacing and renovation of plant material; irritation associated
expenses; personnel expenses associated with the above functions. Tenant may
enter into reasonable contracts for the execution of these common area
maintenance functions.
The Premises are owned by the City of Spartanburg. As they are publicly
owned, they should be exempt from ad valorem taxation. However, should the
Premises become subject to ad valorem taxation, the amount of such taxes shall,
for purposes of this Section, be included as a common area expense and shall be
collected proportionately from Subtenant as Additional Rent.
SECTION SIX
CASUALTY DAMAGE OR INJURY INSURANCE
AND WAIVER OF SUBROGATION
1. If the Sublease Premises shall be destroyed or damaged by any acts of
war, the elements, including earthquake, fire damage or other casualty, to such
extent as to render the Sublease Premises untenantable in whole or in
substantial part, either the Tenant or the Subtenant shall have the right to
declare this Sublease terminated upon written notice to the other. Subtenant
shall not have the option of terminating this Sublease if Subtenant's storage of
the Aircraft with the Building is not interrupted for more than forth-five (45)
days. In the event any such destruction or damage occurs and this Sublease is
not terminated as permitted herein, Subtenant's rental obligations in this
Sublease shall be abated pro rata during the time that such destruction or
damage occurs and thereafter until the repair thereof is substantially
completed.
2. At all times during the term of this Sublease, Subtenant shall maintain
in full force and effect, at its sole cost, one or more policies of insurance,
including but not limited to, the following coverages:
(a) all Risk Aircraft Hull and Spare Parts coverage including "All
Risk-Ground and Flight", "All Risk-Not in Motion" and "All Risk-
Not in Flight", in an amount not less than the full insurable
value of the Aircraft(s) located at the Sublease Premises,
including a waiver of subrogation in favor of the Tenant and
Tenant's insurer; with deductible being the sole responsibility
of Subtenant.
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(b) Comprehensive Aviation Liability Insurance including (i) Airport
Premises and Operations, and (ii) Contractual and Fire Legal
Liability, including coverage for bodily injury, death and
property damage, in amounts not less than $5,000,000 combined
single limit per occurrence (except $50,000 limit of coverage
with respect to Fire Legal Liability) and endorsed to be primary
insurance with respect to Subtenant's negligence.
(c) Aircraft Liability Insurance affording coverage for Subtenant's
owned and non-owned aircraft; in an amount not less than
$5,000,000 combined single limit per occurrence; including
coverage for bodily injury, death and property damage.
(d) Personal Property Insurance covering "All Risk" of direct
physical loss or damage to Subtenant's own property and contents
including improvements and betterments to the Sublease Premises.
The coverage is to include a waiver of subrogation in favor of
the Tenant.
(e) Auto Liability Insurance affording coverage or owned, non-owned,
and hired autos, including physical damage coverage; in an amount
not less than $1,000,000.
(f) Worker's Compensation Insurance including Employers' Liability
Insurance, covering all of the Subtenant's employees, providing
statutory workers' compensation benefits and employers' liability
limits of not less than $1,000,000 per accident/disease.
All insurance maintained by the Subtenant in Section 6(2)(a) or (b) shall
name Tenant, its Manager, officers, directors, members, employees, and agents as
additional insured; including appropriate clauses acceptable to Tenant insuring
a severability of interest, insuring contractual liability; and providing the
interest of the additional insured shall not be invalidated by any action or
inaction or breach of warranty on the part of the insured.
Subtenant shall furnish a certificate of insurance evidencing the above
insurance as outlined in this Section 6(2). Such certificates shall also
evidence sixty (60) days notice of cancellation or non-renewal to the Tenant.
Subtenant shall provide certificates of replacement insurance not less than
sixty (60) days prior to the expiration of any required insurance.
3. Except with respect to claims governed by Section 6(4) below and to the
extent such indemnity is waived under their respective liability insurance,
Subtenant and Tenant agree to exonerate, save harmless, protect and indemnify
the other and their employees, officers, directors, manager, members and agents,
successors and assigns from and against any and all losses, damages, claims,
suits or actions, judgments, and costs, including reasonable attorneys' fees,
for any injury to or death of persons or damage to property proximately caused
by the negligence or wrongful act or omission of Subtenant or Tenant, as the
case may be, their agents, servants, employees, invitees or visitors in or on
the Premises.
4. Tenant and Subtenant each hereby waive any and every claim for recovery
from the other for any and all loss or damage to the Aircraft, the building, the
Premises or the Sublease
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Premises or to the contents thereof which loss or damage is covered by valid and
collectable fire and extended coverage insurance policies or other property
damage policies to the extent that such loss or damage is recovered under such
policies.
SECTION SEVEN
COMPLIANCE WITH UNDERLYING LEASE
Subtenant shall not cause or allow any undue waste or other deterioration
on the Sublease Premises or Premises and shall comply with all applicable laws
and ordinances respecting the use and occupancy of the Sublease Premises or
Premises relating to matters not covered elsewhere in this Sublease.
This Sublease and Subtenant's rights under this Sublease shall at all times
be subject and subordinate to the Underlying Lease, and Subtenant shall
otherwise abide by all of the terms of the Underlying Lease, with respect to the
Sublease Premises and its use of the Premises. The Subtenant covenants and
agrees to use the Sublease Premises in accordance with the terms and conditions
of the Underlying Lease and further covenants not to do any act which will
result in violation of the terms of the Underlying Lease.
In furtherance of the foregoing, the parties hereby confirm each to the
other, that it is not practical in this Sublease agreement to enumerate all of
the rights and obligations of the various parties under the Underlying Lease and
specifically to allocate those rights and obligations in this Sublease.
Accordingly, in order to afford to Subtenant the benefits of this Sublease and
of those provisions of the Underlying Lease which, by their nature are intended
to benefit the party in possession of the Premises, and in order to protect
Tenant against a default by Subtenant which might cause a default or event of
default by Sublandlord under the Underlying Lease, the following privileges
shall apply. Notwithstanding the above, any terms in this Sublease that are
inconsistent with the Underlying Lease shall govern and control the rights and
obligations of and between Tenant and Subtenant.
Provided Subtenant shall timely pay all rent when and as due under this
Sublease, Tenant shall pay when and as due all base rent, additional rent and
other charges payable by Tenant to Landlord under the Underlying Lease, Tenant
shall perform its covenants and obligations under the Underlying Lease which do
not require for their performance possession of the Sublease Premises and which
are not otherwise to be performed hereunder by Subtenant on behalf of Tenant.
For example, but not in limitation, Tenant shall at all times keep in full force
and effect all insurance required of Tenant as tenant under the Underlying
Lease. Tenant hereby grants to Subtenant the right to receive all of the
services and benefits with respect to the Sublease Premises which are provided
by Landlord under the Underlying Lease. Tenant shall have no duty to perform
any obligations of Landlord which are, by their nature, the obligation of an
owner or manager of real property. Tenant shall have no responsibility for or
be liable to Subtenant for any default, failure or delay on the part of Landlord
in the performance or observance by Landlord of any of its obligations under the
Underlying Lease, nor shall such default by Landlord affect his Sublease or
waive or defer the performance of any of Subtenant's obligations hereunder
except to the extent that such default by Landlord excuses performance by
Tenant, under the Underlying Lease. Subtenant's sole recourse for a violation
of the Underlying Lease by Tenant, except for payment permitted under Section 3,
is termination of this Sublease
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in the event the Underlying Lease is terminated or the use of the Sublease
Premises is interrupted by the Landlord as a result thereof.
As they apply to the Sublease Premises or Subtenant's use, Subtenant shall
perform all affirmative covenants and shall refrain from performing any act
which is prohibited by the negative covenants of the Underlying Lease, where the
obligation to perform or refrain from performing is by its nature imposed upon
the party in possession of the Sublease Premises. If practicable, Subtenant
shall perform affirmative covenants which are also covenants of Tenant under the
Underlying Lease at least three (3) days prior to the date when Tenant's
performance is required under the Underlying Lease. Notwithstanding anything to
the contrary contained in this Sublease, but without limitation of Subtenant's
obligation to pay rent hereunder, Subtenant shall have no obligation to pay
Total Rent due from Tenant under the Underlying Lease. Tenant shall have the
right to enter the Sublease Premises to cure any default by Subtenant under this
Section.
Without limitation of the foregoing, Subtenant shall not violate the
Underlying Lease, nor shall Subtenant knowingly permit any act or omission to
occur upon the Sublease Premises which violates the Prime Lease.
Notwithstanding anything to the contrary contained herein, Subtenant and Tenant
agree to indemnify the other for and to hold the other harmless from all costs
and expenses of any nature whatsoever (including without limitation reasonable
attorneys' fees) related to any violation of this Section 7, unless the same
arises due to the acts or omissions of the other.
Subtenant acknowledges that any termination of the Underlying Lease shall
extinguish this Sublease. Landlord's consent to this Sublease (i) shall not
make Landlord a party to this Sublease, (ii) shall not create any privity of
contract between Landlord and Subtenant or other contractual liability or duty
on the part of the Landlord to the Subtenant, (iii) shall not constitute
Landlord's consent or waiver of consent to any subsequent sublease or sub-
sublease, and (iv) shall not in any manner increase, decrease or otherwise
affect the rights and obligations of Landlord and Tenant under the Underlying
Lease, in respect to the Sublease Premises. Any term of this Sublease that in
any way conflict with or alters the provisions of the Underlying Lease shall be
of no effect as to Landlord, and Landlord shall not assume any obligations as
landlord under the Sublease, and Subtenant shall not acquire any rights under
the Sublease directly assertable against Landlord under the Underlying Lease.
Subtenant hereby expressly agrees to be bound by the following provisions
of the Agreement:
(a) Paragraph 4(c) -- That, in the interest of public health, the use
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of lighted tobacco products will not be permitted in buildings
upon the leased premises.
(b) Paragraph 4(g) -- Xxxxxxx assures that it will undertake an
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Affirmative Action program as required by CFR Part 152, Sub-part
E, to insure that no person shall on the grounds of race, creed,
color, national origin, handicap or sex be excluded from
participating in any employment activities on the leased premises
covered in 14 CFR, Part 152, Sub-part X. Xxxxxxx assures that no
person shall be excluded on these grounds from participating in,
or
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receiving the services or benefits of, any program or activity on
the leased premises covered by this sub-part. Xxxxxxx assures
that it will require that its covered sub-organizations provide
assurance that they similarly will undertake Affirmative Action
programs, and that they will require assurance from their sub-
organizations, as required by 14 CFR, part 152, Sub-part E, to
the same effect for their respective operations on the leased
premises.
SECTION EIGHT
REPAIRS
Subject to the obligations of Landlord, if any, in the Underlying Lease,
Tenant, unless herein specified to the contrary, shall maintain the Sublease
Premises in good repair and tenantable condition to the extent required by the
Underlying Lease during the continuance of this Sublease, except in case of
damage arising from wilful or negligent acts or omissions of Subtenant or the
agents, servants, employees, invitees or visitors of Subtenant which shall be
repaired by Subtenant.
SECTION NINE
ALTERATIONS, ADDITIONS OR IMPROVEMENTS
Subtenant shall not make any alterations, additions, or improvements on or
to the Premises or Sublease Premises without first obtaining the written consent
of Tenant and Landlord. At the request of Tenant or Landlord, which request
must be received by Subtenant at least ten (10) days prior to the expiration or
five (5) days prior to any earlier termination of this Sublease, Subtenant shall
remove at the end of the term, all personal property, all alterations, additions
or improvements made by Subtenant. To the extent not so requested, all
alterations, additions, and improvements shall remain on and be surrendered with
the Premises as a part thereof at the termination of this Sublease without
disturbance, molestation or injury.
SECTION TEN
LIENS
Subtenant shall keep the Sublease Premises free and clear of all liens
arising out of any work performed, materials furnished, or obligations incurred
by Subtenant.
SECTION ELEVEN
SALES, ASSIGNMENTS AND SUBLEASES
Subtenant shall not assign this Sublease, or sublet or otherwise encumber
the Sublease Premises, or any part thereof or interest therein.
SECTION TWELVE
QUIET ENJOYMENT
If Subtenant performs the terms of this Sublease, Tenant will warrant and
defend Subtenant in the enjoyment and peaceful possession of, and shall not
disturb Subtenant's tenancy
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in the Sublease Premises during the term hereof without any interruption by
Tenant or any person rightfully claiming under Tenant.
SECTION THIRTEEN
CONDEMNATION
If the Sublease Premises or any parts thereof are appropriated or taken for
any public use by virtue of eminent domain or condemnation proceedings, or if by
reason of law, ordinance, or by court decree, whether by consent or otherwise,
the use of the Sublease Premises by Subtenant for any of the specific purposes
referred to herein shall be prohibited, Tenant or Subtenant shall have the right
to terminate this Sublease as of the date of surrender of possession of the
Premises or a portion thereof to the condemning authority on at least ten (10)
days written notice to the other party, and rental shall be paid only to the
time when Subtenant surrenders possession of the Sublease Premises. This
Sublease shall terminate if the Underlying Lease is terminated. Any rental paid
in advance beyond the time that the Property has been taken from Subtenant and
this Sublease terminates shall be returned promptly by Tenant to Subtenant on
demand. Subtenant waives any right to recover from the condemning authority for
any damage that may be suffered by Subtenant by reason of any condemnation.
SECTION FOURTEEN
TENANT'S REPRESENTATIONS AND WARRANTIES
Tenant hereby represents and warrants to Subtenant that:
(1) There are not defaults in any manner in the performance of any of the
terms, covenants or provisions of the Underlying Lease.
(2) The Underlying Lease has not been altered, amended or modified except
as contained in Exhibit "A".
For any breach of the above covenants, Subtenant's sole resource shall be
termination of the Sublease within thirty (30) days after Subtenant's discovery
thereof.
SECTION FIFTEEN
SUPPORT USES
Tenant will have nonexclusive use of the Sublease Premises during
Subtenant's aircraft flights and use of the conference room and restrooms,
subject to Tenant's standard safety and security procedures and provided such
use does not unreasonably interfere with Tenant's or any other subtenant's use
thereof.
SECTION SIXTEEN
DEFAULT
If either party fails or neglects to perform the Sublease or the provisions
of the Underlying Lease, then the other party may terminate this Sublease upon
written notice to the other. The Tenant and Subtenant agree to provide Landlord
copies of all default notices issued by either party to the other party under
this Sublease.
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SECTION SEVENTEEN
WAIVER OF BREACH
The waiving of any of the provisions of this Sublease by any party shall be
limited to the particular instance involved and shall not be deemed to waive any
other rights in the same or any other terms of this Sublease.
SECTION EIGHTEEN
TERMINATION AND SURRENDER
Subtenant shall surrender the Premises on the last day of the term of the
Sublease. Subtenant shall at the expiration of this Sublease surrender the keys
to the Sublease Premises to Tenant.
SECTION NINETEEN
REMOVAL OF PERSONAL PROPERTY
Subtenant shall have the right to remove all Subtenant's personal property
whether attached to the Premises or not, provided that these items can be
removed without serious damage to the Premises. All holes or damages to the
Premises caused by removal of any items shall be restored or repaired by
Subtenant promptly, reasonable wear and tear excepted. Subtenant shall be
entitled to remove any electrical service connections installed by Subtenant
that were designed specifically for Subtenant. At the request of Tenant or
Landlord, at the termination of the Sublease, Subtenant shall remove all or any
portion of such property requested and upon the expiration or termination of
this Sublease, Subtenant shall surrender the Premises.
SECTION TWENTY
HOLDING OVER
Any holding over at the expiration of this Sublease with the consent of
Tenant shall be on a month-to-month basis, which tenancy may thereafter be
terminated by either party upon giving thirty (30) days prior written notice to
the other party. During the holdover tenancy, Subtenant shall pay One Twenty-
Five Percent (125%) of the rate of rental on a monthly basis as in effect at the
time of the termination of this Sublease, plus any additional amounts payable
under the Underlying Lease occasioned by such hold over and shall be bound by
all the terms and conditions of this Sublease.
SECTION TWENTY-ONE
INTEREST OF SUCCESSOR
The covenants and agreements of this Sublease shall be binding upon the
successors and assigns of Tenant and on the successors and assigns of Subtenant,
but this Section shall not be deemed consent to any Assignment or Sublease.
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SECTION TWENTY-TWO
NOTICES
Except where otherwise required by statute, all notices given pursuant to
the provisions hereof may be sent by first class or certified U.S. mail, postage
prepaid, for Tenant to Wyoming Associates, Inc. c/o Johnson Development
Associates, Inc., X.X. Xxx 0000, Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000, and for
Subtenant to 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xx. Xxxxxxxxxx, Xxxxxxx
00000, or such other mailing address of the party for whom the notice is
intended as designated by such party by written notice to the other party.
SECTION TWENTY-THREE
COSTS OF LITIGATION
If any legal action is instituted to enforce this Sublease or any part
hereof, the prevailing party shall be entitled to recover reasonable attorneys'
fees and court costs from the other party.
SECTION TWENTY-FOUR
FEES AND EXPENSES
Each party shall pay its own costs, charges and expenses, incurred in
connection with this Sublease.
SECTION TWENTY-FIVE
SERVICES OR SUPPLIES PROVIDED BY TENANT
If Tenant elects to make available to the sub-tenants in the Building any
services or supplies or arranges a Master Contract therefore related to the
Building only and not to Subtenant's Aircraft, Subtenant agrees to obtain its
requirements therefore, if any, from Landlord or under any such Contract,
provided the rates therefore are reasonable. Subtenant shall pay for all such
charges when billed and hold Tenant harmless from any loss or damage that may
result from failure to pay therefore in a timely manner.
SECTION TWENTY-SIX
PARKING
Through the term of this Sublease, and any renewals and extensions thereto,
Tenant shall make available to Subtenant unreserved parking spaces at locations
designated by Tenant from time to time from Subtenant's vehicles, at no cost to
Subtenant. For purposes of this Section 26, the term "vehicles" shall mean
passenger automobiles (including small trucks, small vans and the like) and all
other motor vehicles which customarily are parked at airport hangers.
SECTION TWENTY-SEVEN
24-HOUR ACCESS BY SUBTENANT
Subtenant shall be entitled to, and shall have uninterrupted access to, the
Sublease Premises on a twenty-four (24) hour per day, seven days per week basis.
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SECTION TWENTY-EIGHT
TENANT'S COMPLIANCE WITH LAWS AND REGULATIONS
As between Subtenant and Tenant, it shall be the Tenant's responsibility at
its sole cost, and not the responsibility of the Subtenant, that the Premises
and the Sublease Premises, when delivered to Subtenant, and thereafter, are in
compliance with all applicable federal, state and local laws, rules, codes and
regulations for its intended use, including without limitation, those laws,
rules, codes and regulations relating to the American with Disabilities Act,
except to the extent the use of Subtenant, its agents, servants, visitors,
invitees, guests or licensees increases the compliance requirements over those
required by Tenant's use thereof, in which case the cost thereof shall be paid
by Subtenant. Subtenant shall in no event use the Premises or any portion
thereof in any manner to cause it to be a public accommodation.
IN WITNESS WHEREOF, the parties have executed this Sublease at the day and
year first above written.
TENANT: SUBTENANT:
WYOMING ASSOCIATES, INC. ESA SERVICES, INC.
By: /s/ Xxx X. Xxxxxxx, Xx. (SEAL) By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
--------------------------- --------------------------
Name: Xxx X. Xxxxxxx, Xx. Name: Xxxxxxx X. Xxxxxx
--------------------------- --------------------------
Title: Vice President Title: Chief Financial Officer
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STATE OF SOUTH CAROLINA )
) AGREEMENT
COUNTY OF SPARTANBURG )
KNOW ALL BY THESE PRESENTS, that we, the CITY OF SPARTANBURG, a municipal
corporation existing under the laws of South Carolina, hereinafter referred to
as "CITY" and XXXXXXX DEVELOPMENT ASSOCIATES, INC., a South Carolina
corporation, hereinafter referred to as "XXXXXXX", in consideration of their
mutual covenants and agreements herein set forth, do hereby covenant and agree
with each other as follows:
1. The Leased Property. CITY demises and leases to XXXXXXX the real
-------------------
property with improvements to be constructed, located at Spartanburg Downtown
Memorial Airport, hereinafter described in Exhibit A, which is attached hereto
---------
and, by reference, made a part of this Agreement together with such privileges
and appurtenances as are set forth in this Agreement. XXXXXXX intends to
construct a hangar of approximately Eighteen Thousand (18,000) square feet at an
estimated cost of Nine Hundred Thousand and No/100 Dollars ($900,000.00) for use
by XXXXXXX.
2. The Term. The Lease and Agreement shall continue for a term of
--------
twenty (20) years with four (4) five-year (5-yr.) options. The lease term shall
commence on _____________________, 1999.
3. Lease Rate. XXXXXXX will pay to City as consideration for this
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Agreement Lease payments of $0.20 per square foot of leased property which is
initially Twenty One Thousand One Hundred Eighty Seven and 58/100 ($21,187.58)
per year during years one through ten (1-10). The lease rate will increase to
$0.25 per square foot per lease year for years eleven through fifteen (11-15).
The lease rate for years sixteen through twenty (16-20) will be $0.30 per square
foot per lease year. The lease rate for years twenty-one through twenty-five
(21-25) will be at $0.35 per square foot per lease year. The lease rate for
years twenty-six through thirty (26-30) will be at $0.40 per square foot per
lease year. The lease rate for years thirty-one through thirty-five (31-35)
will be at $0.45 per square foot per lease year. The lease rate for years
thirty-six through forty (36-40) will be at $0.50 per square foot per lease
year.
4. Airport Rules and Regulations. XXXXXXX agrees:
-----------------------------
(A) To conduct its operation in accordance with the Airport Rules and
Regulations and Minimum Standards for Fixed Base Operators at Spartanburg
Downtown Memorial Airport and the Standards For Corporate Aircraft Hangars on
the Spartanburg Downtown Memorial Airport which are attached as Exhibit B, and
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by reference, made a part of this Agreement. This Agreement shall be
subordinate to the Airport Rules and Regulations and Minimum Standards for Fixed
Base Operators. In the event of any conflict between the provisions of this
lease and the Standards For Corporate Hangars on the Spartanburg Downtown
Memorial Airport, Standards for Corporate Aircraft Hangars shall control.
(B) That the leased space shall be used for the purpose of providing
for aircraft storage and other non-commercial activities of the XXXXXXX flight
department and for no other purpose.
(C) That, in the interest of the public health, the use of lighted
tobacco products will not be permitted in buildings upon the leased premises.
(D) That nothing herein contained shall be construed to grant or
authorize the granting of exclusive rights within the meaning of Section 308(a)
of the Federal Aviation Act of 1958, as amended; and CITY shall have the right
to enter into agreements with other businesses and fixed base operators as well
as the United States Army, United States Air Force, United States Navy or other
federal agency relating to the governmental use of said airport.
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(E) That, in the operation and use of any facilities hereby leased,
XXXXXXX will not, on the grounds of race, sex, color, national origin, or
handicap discriminate or permit discrimination against any person or group of
persons in a manner prohibited by 49 CFT Part 21. CITY is hereby granted the
right to take action as the federal government may direct to enforce such
covenant of non-discrimination.
(F) That in the event the United States Government or any other duly
authorized governmental agency acquires possession of the premises leased hereby
by virtue of any legal process and the result thereof is to substantially deny
XXXXXXX the use of the leased premises for the purpose herein intended, then
this Agreement may be terminated or suspended for the period of time XXXXXXX is
deprived of the leased premises; and, in the event this Lease is suspended,
XXXXXXX may resume its tenancy at the end of such suspension and this Lease
shall continue for the full term thereof plus the length of time this Lease was
suspended. Rent shall be refunded for any period during which XXXXXXX is denied
the benefits of this Lease.
(G) XXXXXXX assures that it will undertake an Affirmative Action
program as required by CFR Part 152, Sub-part E, to insure that no person shall
on the grounds of race, creed, color, national origin, handicap or sex be
excluded from participating in any employment activities on the leased premises
covered in 14 CFR, Part 152, Sub-part X. XXXXXXX assures that no person shall
be excluded on these grounds from participating in, or receiving the services or
benefits of any program or activity on the leased premises covered by this sub-
part. XXXXXXX assumes that it will require that its covered sub-organizations
provide assurance that they similarly will undertake Affirmative Action programs
and that they will require assurance from their sub-organizations, as required
by 14 CFR, part 152, Sub-part E, to the same effect for their respective
operations on the leased premises.
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5. Maintenance, Good Condition and Repair. During the continuance of
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this lease and agreement, XXXXXXX will, at its own expense, maintain and keep
the premises in good condition and make all repairs, both interior and exterior,
necessary to keep and maintain the leased property in good condition. CITY
agrees to maintain all runways and taxiways serving the leased premises in good
condition throughout the term of this Lease so as to allow XXXXXXX use of the
airport in accordance with this Lease, airport rules and regulations and federal
law.
6. Insurance. XXXXXXX agrees and obligates itself to carry public
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liability insurance in an amount of not less than One Million and No/100 Dollars
($1,000,000.00) primary liability coverage and a Ten Million and No/100 Dollars
($10,000,000.00) umbrella naming CITY OF SPARTANBURG as loss payee providing
protection for invitees and other persons on the property. XXXXXXX shall also
maintain workers' compensation insurance for protection of its employees.
XXXXXXX agrees to protect, indemnify and hold harmless the CITY against any and
all injuries or damages to XXXXXXX'x agents, employees, customers or other
persons entering, leaving or on the premises excepting injuries or damages
caused by the negligence of CITY. XXXXXXX shall also provide and keep in full
force at its own expense during the term of this lease and agreement, property
damage insurance coverage in the amount of the replacement value of the hangar
building not less than One Million and No/100 Dollars ($1,000,000.00) with
respect to the leased property, including also those portions of said premises
used for driveways, walkways and parking area. Any policy or policies of
insurance required by this lease and agreement shall be issued by one or more
insurance companies authorized to do business in Spartanburg, South Carolina.
CITY shall be named as an insured under this policy or policies and, at least
ten (10) days prior to the expiration term of any such
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policy or policies, XXXXXXX shall supply CITY with a substitute policy with
evidence of the payment of the premiums thereon.
In the event the building and/or other improvements erected on the premises
are destroyed or damaged by fire or other casualty during the term of the lease,
XXXXXXX agrees that it will cause said building and/or other improvements to be
replaced or said damage to be repaired as rapidly as practical and CITY shall
have no claim against any insurance proceeds paid to XXXXXXX on account of such
damage and/or destruction. CITY shall not have any responsibility or obligation
to make any expenditure toward the repair and/or replacement or the building and
other improvements on the leased premises. XXXXXXX shall be solely responsible
for the total costs of repair and/or replacement of the improvements so damaged
and, if the insurance proceeds payable on account of such loss are insufficient,
XXXXXXX will be solely responsible for the difference between insurance proceeds
and the cost of repair and/or replacement.
7. Surrender of Leased Premises. XXXXXXX agrees to make all payments
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required herein promptly as they fall due and, at the expiration of the term
hereby created, or, by forfeiture or otherwise, to surrender unto CITY the
peaceable and quiet possession of the leased premises in good condition,
ordinary wear and tear excepted.
8. Improvements and Termination. All permanent improvements made to
----------------------------
the leased premises by XXXXXXX will become the property of CITY upon completion
of said improvements and XXXXXXX will have such obligations relating thereto and
such rights therein as are set forth in this Agreement. All improvements shall
be constructed in good and workmanlike manner, using new materials, and shall
comply with all applicable fire, building and zoning ordinances. All site
grading including compliance to CITY's requirements for storm
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water retention is the responsibility of XXXXXXX. All costs associated with the
construction and development of the corporate storage hangar, including
clearing, grading and pavement in compliance to with storm water discharge
management, shall be at the expense of XXXXXXX. All furniture, fixtures and
equipment (besides HVAC) may be removed by XXXXXXX and shall remain its sole
property. Title to the improvements will be transferred to CITY on completion
subject to this Agreement. At conclusion of the lease term, the improvements
shall be returned to CITY free and clear of any liens or encumbrances. CITY may
direct the necessary instruments of transfer or deeds.
9. Taxation. The parties envision that the property will be exempt
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from ad valorem property tax. In the event that the property is subject to ad
valorem property tax, the portion of ad valorem taxes paid to CITY will be
reimbursed back to XXXXXXX.
XXXXXXX agrees to site at the airport aircraft equal in personal property
tax value to its two present aircraft as established by the 1998 property tax
reassessment. At a minimum, the value of sited aircraft must equal the current
assessed value of One Hundred Sixty-eight Thousand, Five Hundred Eighty and
No/100 Dollars ($168,580.00). The assessed value will be adjusted annually by
the Consumer Price Index ("CPI").
10. Exclusivity. XXXXXXX agrees that the hangar facilities are to be
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used exclusively to support the corporate aircraft fleet (owned or leased) of
companies that are controlled by Xxxxxx Xxxx Xxxxxxx or Xxxxxxx X. Xxxxxxx or
companies in which they hold a significant and meaningful management or
ownership position. Under this agreement, no chartered, third party or any
other commercial aircraft is to be stored from the facility. XXXXXXX may on
rare occasions and under exceptional circumstances hangar third party planes on
a temporary basis but only if no compensation is received and CITY cannot
accommodate the
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third-party plane. Moreover, the third party must have some business
relationship with XXXXXXX. XXXXXXX is to provide an updated list of all eligible
aircraft to the Airport Director. This list is to be updated by XXXXXXX and
submitted to the Airport Director as changes to the corporate aircraft fleet
occur.
11. Fueling Facility. XXXXXXX will be permitted to install and
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operate a fueling facility on the leased property. All fuel storage and
dispensing equipment shall be of fixed design and must contain a total tank farm
of at least Twelve Thousand (12,000) gallons. No mobile equipment will be
permitted. Fuel storage tanks and associated systems shall be owned by XXXXXXX
and installed and maintained to meet or exceed federal, state and local
requirements for such equipment including, but not limited to, NFPA 407, NFPA 30
and 30A, FAA Advisory Circular 150/5230 and EPA40CFR Part 112. All fuel storage
tanks should meet UL-142 requirements. Fuel storage and dispensing equipment
shall be covered under an approved spill prevention counter measures and control
plan (SPCC Plan). XXXXXXX will provide third party indemnification in a form
and amount acceptable to CITY for any site contamination caused by the
activities of XXXXXXX at the property. XXXXXXX to provide CITY with notice
within twenty-four (24) hours of any leaks or spills of aviation fuel from the
fueling facility. XXXXXXX agrees to a minimum annual pumping fee of Twenty
Thousand and No/100 Dollars ($20,000.00), such minimal fee to be paid on or
before January 10 of each year. Additional pumping fees of $0.10 per gallon
will be paid by XXXXXXX to CITY for fuel pumping in excess of Two Hundred
Thousand (200,000) gallons annually. Both the minimum annual fee and per gallon
fee will be adjusted by the CPI every five years of the lease. XXXXXXX shall
provide to the Airport Manager a list of all eligible aircraft for fueling. To
be
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on the eligible list, the aircraft must be owned or under a written lease
agreement with XXXXXXX.
All fuel dispensed by XXXXXXX shall be done by employees of XXXXXXX who
shall have initial and annual recurrent training in fuel management, fuel spill
recovery, and other related activities. Specific safety requirements and
procedures will be jointly developed by CITY and XXXXXXX with assistance from
the State Fire Xxxxxxxx'x office.
12. Option. XXXXXXX is granted an option on an adjacent 1.2 acre
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tract for additional corporate hangar development. The property is described in
Exhibit C. The option shall extend for a period of five (5) years from date to
acquire the property. There will be no charge for the first option. The second
option for an additional five years for the property described in Exhibit C
shall be at a cost of $0.10 per square foot for the option property for each
year. After the second option expires, XXXXXXX shall have no further option.
In the event that the options expire and CITY desires to dispose of the
property, it shall solicit proposals for bids in accordance with the CITY's
policy. In the event that the property is leased to XXXXXXX during a lease term
or extension thereof, the lease payments shall be based upon the same
calculations as lease payments for the property described in Exhibit A and as
provided for in Paragraph 3.
13. Notice to Parties. Any notice, demand or other communication
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between CITY and XXXXXXX shall be sufficiently given or delivered if mailed,
postage paid, or delivered personally to:
CITY OF SPARTANBURG
Attention: Xxx Xxxx, City Manager
Xxxx Xxxxxx Xxxxxx 0000
Xxxxxxxxxxx, XX 00000
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XXXXXXX DEVELOPMENT ASSOCIATES, INC.
Attention: Xxxxxx Xxxxxxx, President
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxxx, XX 00000
14. Favored Tenant Status. Should CITY enter into any transaction or
---------------------
agreement with a third party after the date of execution of this Agreement or
should CITY pass any regulation or ordinance that does not apply retroactively
to this Agreement and XXXXXXX in its discretion determines that it will be
favorable affected by application of the term(s) of the third party agreement or
the ordinance/regulation, the XXXXXXX may elect to amend this Agreement to
include such favorable term(s) and CITY will be bound by and shall execute such
documents as required to evidence such new terms.
15. Consumer Price Index. Any references to "CPI" herein shall mean
--------------------
the Consumer Price Index but shall have a capitalization rate not to exceed
twelve and one-half percent (12.5%) over any five-year (5-yr.) period or two and
one-half percent (2.5%) on any annual adjustment.
16. Waiver of Strict Performance. The failure of either party to
----------------------------
insist upon strict performance of any of the terms, conditions or covenants
herein set forth shall not be deemed a waiver of any rights or remedies that
such party may have and shall not be deemed a waiver of any subsequent breach or
default in the terms, conditions and covenants herein contained.
17. No Subletting or Assignment. This Agreement may not be assigned
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nor may the premises be sublet by XXXXXXX without the prior written approval and
consent of CITY. Transfers to affiliates shall not require consent, and consent
for all other transfers shall not be unreasonably withheld or delayed.
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18. Default. In the event XXXXXXX or CITY violates any material term
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or provision of this Agreement and fails to remedy the same after thirty (30)
days written notice delivered by certified or registered mail, the party not in
default may terminate the Agreement by the giving of written notice to the
defaulting party by registered mail or certified mail. In the event XXXXXXX is
in default for the same material reason on more than one occasion or in the
event XXXXXXX files a petition in bankruptcy or receivership or makes a transfer
or assignment for the benefit of creditors; then CITY may terminate this
Agreement at is option; provided, however, that in the event of default for
material reason on more than one occasion, XXXXXXX shall be given a written
notice to cure and an opportunity to cure the default within ten (10) days after
written notice.
In the event of the termination of this Agreement, XXXXXXX will vacate the
premises promptly but in no event will such period of time exceed thirty (30)
days after written notice of termination. During such period, XXXXXXX will not
be relieved of any obligations to pay rent or any other fees required by this
Agreement. After XXXXXXX vacates the premises, any property or other trade
fixtures not a part of the real estate left on the premises shall be deemed
abandoned to CITY.
19. South Carolina Law Controls. XXXXXXX agrees that it will conform
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to and comply with all applicable laws ore regulations of the United States or
the State of South Carolina and rules, regulations and directives promulgated by
CITY for the regulation of the airport in general.
20. FAA Approval. This Agreement is contingent upon approval by the
------------
Federal Aviation Administration.
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IN WITNESS WHEREOF, the parties to this Agreement have hereunto set
their hands and seals and executed this Agreement the day and year first-above
written.
IN THE PRESENCE OF:
CITY OF SPARTANBURG
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Xxx Xxxx, City Manager
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Attest:
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Xxxxx Xxxxxx, City Clerk
XXXXXXX DEVELOPMENT
ASSOCIATES, INC.
By:
-----------------------------------
------------------------------------
Its:
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