Okaloosa County BOCC — January 30, 2013 — Sublease Agrmt Regal Air and VSC — reading text

SUBLEASE AGREEMENT This SUBLEASE AGREEMENT (hereinafter referred to as “Agreement”) is entered into this _ day of , 2013, by and between REGAL AIR, DESTIN (hereafter referred to as “Sub-Landlord”) and VSC AIRCRAFT MAINTENANCE, LLC (hereafter referred to as “Sub- Tenant”). WHEREAS, Sub-Landlord and the County of Okaloosa (a political subdivision of the State of Florida hereinafter referred to as the “County”) have entered into a Lease and Operating Agreement as amended from time to time (hereinafter collectively referred to as “Lease”) a copy of which is attached as Exhibit “A”, by which Sub-Landlord leases and maintains a full service fixed base operation on the County’s airport located in Destin, Florida; WHEREAS, Sub-Landlord desires to outsource its maintenance and flight school to“Sub- Tenant”; WHEREAS, Sub-Tenant acknowledges that Sub-Landlord has significant obligations and legitimate business interests which are in need of protecting, including but not limited to Sub- Landlord’s obligations to provide certain services and maintain certain facilities pursuant to the Lease and as such, Sub-Landlord shall be entitled to extra ordinary remedies under this Agreement and under any other agreement related hereto to protect such business interest and to honor said obligations; NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter made by each of the parties, which shall be deemed consideration for each other, the parties hereby agree as follow: 1. Sub-Lease. Sub-Landlord agrees to lease to Sub-Tenant and Sub-Tenant agrees to rent from Sub-Landlord, the premises described in Exhibit “B” (hereafter individually and collectively referred to as the “Property”). 2. Terms of Sub-lease. This Sub-Lease shall commence on date sublease is approved by the Okaloosa County Board of County Commissioners, and shall continue for twenty (20) years. a. Renewal Options: If Sub-Tenant is not in default of any provision of the Sub- Lease they shall have one (1), ten (10) year renewal option. Page 1 of 12 b. Sub-Tenant shall provide the Sub-Landlord their desire to renew this agreement, in writing, no earlier than one hundred and eighty (180) days prior to the end of the Sub-Lease term. 3. Approval of Sub-Lease. This Sub-Lease is subject to the approval of the Okaloosa County Board of County Commissioners. Sub-Tenant shall begin paying rent in advance the first day of the month after Sublease is approved by Okaloosa County Board of Commissioners. Should the Board of Commissioners fail to approve this Sub-Lease, then Sub- Landlord shall be entitled to terminate this Agreement with 10 days written notice. Any rental payments made while Sub-Tenant is in possession of the property, and prior to approval of this Sub-Lease by the Board of Commissioners shall be refundable. 4, Rent. Sub-Tenant agrees to pay rent at the rate of $3,200.00 for the building plus $373.00 per month, plus applicable sales tax, if any, to lease 74,600 square feet of ramp space which amount shall be paid to Regal Air, Destin at 9171 Ashbury Lane, Gulfport MS 39503, in advance on the first day of each month during the term of this Agreement. Said monthly amount shall be adjusted accordingly and proportionately if and when the County of Okaloosa adjusts the rent due from Sub-Landlord. Notification of any rent adjustment shall be made in writing to Sub-Tenant. Payments received on or after the 10th day of each month shall be subject to a 5% late fee. Sub-Tenant will be required to pay the County 5% of all maintenance and flight school gross sales. This 5% amount will be due and payable by the 20" of each month following the month the gross sales are generated in. 5. Sub-Landlord’s Obligations. The Sub-Landlord is not to be required to provide any services or do any act with respect to the Property for the benefit of the Sub-Tenant except as specifically provided herein. The Sub-Landlord shall remain bound by its Lease with Okaloosa County, and this Sublease shall not relieve Sub-Landlord of any of its responsibilities pursuant to the Lease. 6. Triple Net Lease. This is a triple net sublease. Therefore, throughout the term of this Agreement and any extension thereof, Sub-Tenant shall, at Sub-Tenant's expense: (a). maintain and repair the Property in a timely manner so as to not jeopardize the general public, the customers or personnel at the airport or to allow the buildings Page 2 of 12 located thereon to be in disrepair or to deteriorate; except that Sub-Tenant is not responsible for any maintenance or repairs that are specifically the responsibility of the County or the Sub- Landlord. (b). contract for and pay any and all utilities or other services required for use of the premises, pay any and all taxes and assessments associated with the Property: (c). | maintain adequate insurance coverage (in accordance with the terms of the Lease) on the building, their contents and the business operated therein (including general liability insurance), naming the Sub-Landlord as an additional named insured. Sub-Tenant, and any and all subsidiaries, contractors, or other entities operating on the Property with Sub- Tenant’s knowledge, permission or authority, shall provide written evidence of such insurance coverage within 5 days of signing this Agreement or the date of any renewal of insurance coverage. Sub-Tenant shall notify Sub-Landlord of any and all changes in insurance coverage, including but not limited to, any claims against Sub-Tenant’s insurance. 7. Use. The premises shall be used as an aviation maintenance facility, flight school, and other related aviation activities and limited to Sub-Landlord’s rights and obligations under the Lease. Hangar space for transient aircraft shall be based on space availability. Non-aviation uses shall not be allowed. 8. Lease Incorporation. Sub-Tenant hereby agrees to provide such other services and pay such other fees to the County or other appropriate agency as may be required by Sub- Landlord under the Lease, consistent with the nature of the businesses operated on or related to the Property, including but not limited to Sub-Landlord’s obligation to provide disabled airplane services at the airport. The terms of this Lease are incorporated into this Agreement and become a part hereof. 9. Compliance with Lease and FAA Requirements. Sub-Tenant shall take, at its expense, any and all steps necessary to maintain Sub-Landlord’s compliance with all Sub- Landlord’s obligations under the Lease as to the flight school, airplane maintenance and all other services related thereto, including but not limited to being in compliance with all Federal Aviation Administration (FAA) Regulations related to the flight school and airplane maintenance Page 3 of 12 operations. Sub-Tenant shall maintain at least one airframe and engine licensed mechanic on the Property during normal business hours, and shall provide Sub-Landlord with a copy of all licenses maintained by any and all mechanics employed by Sub-Tenant. 10. Sub-Tenant Improvements. Provided such conduct does not violate the terms and conditions of the Lease, the Sub-Tenant may from time to time, at its expense, paint and decorate the Property and make such alterations, additions and improvements as will, in the judgment of the Sub-Tenant, better adapt the same for the purpose of its business. Sub-Tenant shall not make any structural addition or alteration without Sub-Landlord's prior written approval, and Sub- Landlord shall not unreasonably withhold consent after receiving information reasonably necessary for explaining and identifying the proposed alterations and additions. Sub-Tenants shall, at or before the end of the term as described above, remove any nonstructural alterations or additions and restore the Property to the condition that would exist in the absence of the alteration or addition, ordinary wear and tear excepted; but need not to do so if Sub-Landlord has agreed in writing that removal and restoration is not required by Sub-Tenant. 11. Advertisements. Sub-Tenant shall not publish, post, or otherwise disseminate any advertisements, press releases, statements, brochures, or other documents which includes the name of or refers to Sub-Landlord without the prior written approval of Sub-Landlord. Sub- Landlord shall not unreasonably withhold such consent after reviewing the item, and shall provide consent or denial of consent within 10 days of receipt of Sub-Tenant’s request for consent. | 12. Indemnification. To the fullest extent permitted by law, Sub-Tenant shall indemnify and hold harmless COUNTY, its officers and employees from liabilities, damages, losses, and costs including, but not limited to, reasonable attorney fees, to the extent caused by the negligence, recklessness, or intentionally wrongful conduct of the Sub-Tenant and other persons employed or utilized by the Sub-Tenant in the performance of this Agreement. 13. Sub-Tenant's Default. Sub-Tenant shall be in default hereunder if: (a). Sub-Tenant fails to timely pay rent or any other payment under this Sub- Lease and if such defaults are continued for more than fourteen (14) days, including weekends, after notice in the manner prescribed below; (b). | Sub-Tenant fails to observe or perform any of the terms, covenants, and/or conditions of this Sub-Lease or causes Sub-Landlord to be in default of any of the terms and/or Page 4 of 12 conditions of the Lease and if such default shall continue for more than seven (7) days after notice in the manner prescribed below or after notice in any manner provided from any governmental agency or third party vendor (i.e., insurance carrier). Notwithstanding the preceding part of this sub-paragraph (b), if such default cannot be practically cured within said time period, the Sub-Tenant shall not be in default if it has made a good faith effort to cure the default within said time period. However, if such default could have been anticipated and avoided by taken reasonable steps, Sub-Tenant shall not be afforded any additional time to cure and Sub-Tenant shall be considered in default without a time period to cure; (c). | Sub-Tenant vacates or abandons the property prior to the termination of this Agreement, or without the express written consent of Sub-landlord; or (d). Sub-Tenant becomes insolvent, files bankruptcy or discontinues its business operations. 14. Sub-Landlord's Remedies Upon Default. In the event of any default by Sub- Tenant, then the Sub-Landlord may proceed as follows: (a). Terminate this Sub-Lease and ‘immediately resume possession of the property for its own account pursuant to Sub-Landlord’s lease agreement and recover immediately from Sub-Tenant's prospective damages limited and calculated under the following formula: Rent for two years; (b). Immediately resume possession pursuant to Sub-Landlord’s lease agreement and relet or rent the Property for remainder of the term for the account of the Sub- Tenant, at the end of the term or at the time each payment of rent comes due under this Sub- Lease as the Sub-Tenant may choose, the difference between the rent specified in the rent on the reletting or renting; or (c). such other remedies provided by law. 15. Special Remedies Upon Default. Sub-Tenant acknowledges that Sub-Landlord’s rights and entitlement to operate a full service fixed based operation under the Lease constitutes a special privilege, the value of which may not be subject to calculation or replaced in any other manner. As a result the Sub-Tenant agrees that Sub-Landlord should have and be entitled, in addition to all other rights and remedies otherwise provided in this Agreement or by law, including monetary damages, to extra-ordinary protection of Sub-Landlord’s rights and privileges under the Lease. Therefore, if Sub-Landlord has a reasonable belief that the conduct Page 5 of 12 or lack thereof by the Sub-Tenant, its