Exhibit No. 10(A)
SUBLEASE AGREEMENT
     This Sublease Agreement (this “Sublease”) is entered into as of August 21,
2006, by and between Progressive Casualty Insurance Company ("Sublandlord"), and
Acme Operating Corporation (“Subtenant”).
     In consideration of the mutual covenants contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Sublandlord and Subtenant hereby agree as follows:
1. Definitions. For purposes of this Sublease, the following terms shall have
the meanings respectively indicated:
     “Aircraft” shall mean the aircraft described in Exhibit “A”, attached
hereto and made a part hereof, as the same may be amended from time to time.
     “Airport” shall mean the Cuyahoga County Airport, Richmond Heights, Ohio.
     “County” shall mean the Board of County Commissioners of Cuyahoga County,
Ohio.
     “Hangar” shall mean the entire real property, airplane hangar and other
improvements located at 26260 Curtis-Wright Parkway, Richmond Heights, Ohio and
being leased by Sublandlord from the County, as more fully described in the
Master Lease.
     “Master Lease” shall mean the Lease, dated September 14, 2006, between the
County and Sublandlord, a copy of which is attached hereto as Exhibit “B” and
made a part hereof.
     “Prorata Share” shall mean fifty percent (50%).
     “Subleased Premises” shall mean the following portions of the Hangar:
(a) the office area, consisting of approximately 1,000 square feet, as shown on
the floor plan attached hereto as Exhibit “C” and made a part hereof (the
“Office Area”); and (b) the hangar and shop areas, consisting of approximately
13,750 square feet, as shown on Exhibit “C” (collectively the “Hangar Area”).
2. Sublease. Sublandlord hereby subleases to Subtenant the Subleased Premises.
Subtenant shall have the exclusive use of the Office Area, but shall be
obligated to share the Hangar Area with Sublandlord. The Office Area shall have
a separate private exterior entrance.
3. Master Lease.
     a. All of the terms, provisions, rights, conditions and obligations
contained in the Master Lease are hereby incorporated into this Sublease as an
agreement between Sublandlord and Subtenant as though Sublandlord were the
landlord under the Master Lease and Subtenant were the tenant under the Master
Lease. Notwithstanding the foregoing, Subtenant recognizes that Sublandlord’s
performance of certain obligations required hereunder are conditioned upon due
performance by the County of its obligations under the Master Lease. In the
event that the County fails or refuses to perform any such obligation under the
Master Lease, Sublandlord’s obligation under this Sublease shall be limited to
using commercially reasonable efforts (which shall not require Sublandlord to
pursue any litigation against the County) to obtain the required performance
from the County, and in no event shall Sublandlord be in breach of this Sublease
for any failure or refusal of the County to so perform its obligations under the
Master Lease.
     b. Sublandlord represents and warrants to Subtenant that the Master Lease
is in full force and effect, that neither Sublandlord nor, to the best of
Sublandlord’s knowledge, the County

-1-

--------------------------------------------------------------------------------

 

is in default of their respective obligations under the Master Lease, and
Sublandlord has neither given nor received a notice of default pursuant to the
Master Lease.
     c. Except as otherwise specifically set forth herein, this Sublease is
subject and subordinate to the Master Lease, and shall terminate upon the
expiration or earlier termination of the Master Lease. Notwithstanding the
foregoing, Sublandlord covenants: (i) not to voluntarily terminate the Master
Lease (provided that this provision shall not limit Sublandlord’s rights under
applicable law in the event of a material breach by the County under the Master
Lease); (ii) not to modify the Master Lease so as to adversely affect
Subtenant’s rights hereunder without Subtenant’s prior written consent; and
(iii) not to permit the termination of the Master Lease as a result of any
breach or default by Sublandlord thereunder (provided that Sublandlord shall not
be deemed to be in violation of this clause if such breach or default results
from any act or omission of Subtenant).
     d. Whenever the consent of the County is required under the Master Lease
for any matter requested by Subtenant hereunder, Sublandlord agrees to use
commercially reasonable efforts to obtain, at Subtenant’s sole cost and expense,
such consent on behalf of Subtenant.
4. Term. The term (“Term”) of this Sublease shall be five (5) years, beginning
on October 1, 2006 (the “Sublease Commencement Date”) and ending on
September 30, 2011. The options to renew set forth in Article II of the Master
Lease are not included in this Sublease and shall not inure to the benefit of
Subtenant. Rather, Subtenant’s renewal rights are governed by paragraph 21
below.
5. Rent. Beginning on the Sublease Commencement Date, Subtenant shall pay the
following charges (collectively “Rent”) to Sublandlord, without deduction or
setoff of any kind, at the address specified in paragraph 22 below (or such
other address as Sublandlord shall designate in writing):
     a. Base Rent. Subtenant shall pay base rent (“Base Rent”) on or before the
first day of each calendar month according to the following schedule:

          Year   Annual Rent   Monthly Rent
1
  $43,234.00   $3,602.83
2
  $43,234.00   $3,602.83
3
  $43,234.00   $3,602.83
4
  $43,234.00   $3,602.83
5
  $43,234.00   $3,602.83

If the Term does not commence on the first day of a calendar month or expire or
terminate on the last day of a calendar month, the Rent for such partial month
shall be prorated accordingly.
     b. Additional Rent — Operating Expenses. Beginning on the Sublease
Commencement Date, Subtenant shall pay to Sublandlord on a monthly basis, as
additional rent, an amount equal to one-twelfth (1/12) of Subtenant’s Prorata
Share of Sublandlord’s good faith estimate of the cost of operating,
maintaining, repairing and replacing the Hangar, including the Subleased
Premises, the fuel farm and the surrounding parking areas (“Operating
Expenses”), for each calendar year. For purposes of this Sublease, Operating
Expenses shall also include Real Estate Taxes (defined below) and Insurance
Costs (defined below). Sublandlord shall have the right, to be exercised no more
than once per calendar year, to adjust in good faith Sublandlord’s estimate of
Operating Expenses for such calendar year as of the first day of that calendar
year and, in such event, Sublandlord shall provide Subtenant with written notice
of such revised good faith estimate in reasonable detail. If Sublandlord does
not provide Subtenant with written notice of such estimate prior to the
beginning of a calendar year, Subtenant, upon receipt of Sublandlord’s revised
good faith estimate, will remit an appropriate payment (or receive an
appropriate credit) which is applicable to any prior months.

-2-

--------------------------------------------------------------------------------

 

Within one hundred twenty (120) days after the end of each calendar year,
Sublandlord shall provide Subtenant with a written statement of Subtenant’s
Prorata Share of the actual Operating Expenses for the prior calendar year
(“Operating Expense Statement”). Any difference between Subtenant’s Prorata
Share of the actual Operating Expenses and the monthly estimated payments made
by Subtenant under this provision shall be adjusted between Sublandlord and
Subtenant by an appropriate payment or credit being made within sixty (60) days
after the receipt of Sublandlord’s Operating Expense Statement. The adjustment
requirements of this provision shall survive the expiration or other termination
of this Sublease. The amount of any adjustment which may be necessary subsequent
to the expiration or other termination of this Sublease shall be paid by the
appropriate party within sixty (60) days after delivery of Sublandlord’s
Operating Expense Statement.
Sublandlord shall maintain and make available to Subtenant records in reasonable
detail setting forth the actual Operating Expenses incurred by Sublandlord and
shall permit Subtenant to examine and audit such records during Sublandlord’s
regular business hours. Subtenant agrees that it shall keep any and all
information gained from such audit confidential and Subtenant may use such
information only in dealing directly with Sublandlord. Should Subtenant have a
good faith dispute as to the determination of actual Operating Expenses for any
calendar year, and should such dispute not be resolved between Sublandlord and
Subtenant within sixty (60) days after Sublandlord receives written notice
thereof, then either party may submit the dispute for arbitration to a mutually
agreeable certified public accountant. The decision of such accountant shall be
conclusive and binding on the parties. The costs and expenses incurred with
respect to such arbitration shall be borne by the party against whom a decision
is rendered, unless the arbitrator shall otherwise decide.
Sublandlord shall timely pay all real estate taxes and/or assessments for which
Sublandlord is responsible under the Master Lease (“Real Estate Taxes”).
Subtenant shall reimburse Sublandlord for Subtenant’s Prorata Share of Real
Estate Taxes on a monthly basis as a part of Operating Expenses.
Subtenant shall also reimburse Sublandlord, on a monthly basis, for Subtenant’s
Prorata Share of the cost of the casualty insurance (“Insurance Costs”) that
Sublandlord maintains on the Hangar.
6. Tenant Improvements. On or before the Sublease Commencement Date, Sublandlord
shall complete the alterations and improvements to the Hangar and fuel farm
described in the plans, specifications and other documents collectively attached
hereto as Exhibit “D” and made a part hereof (“Sublandlord’s Work”). Sublandlord
agrees that: (a) Sublandlord shall prepare or cause to be prepared all
construction drawings, plans and/or specifications necessary to complete
Sublandlord’s Work; (ii) Sublandlord shall obtain all necessary permits,
certificates or other governmental approvals for Sublandlord’s Work; (iii) all
work, materials and equipment incorporated into Sublandlord’s Work will be of
good quality, new and free of defects; (iv) Sublandlord’s Work shall be
performed and completed in compliance with all applicable laws, codes, rules and
regulations. Upon substantial completion of Sublandlord’s Work, Sublandlord and
Subtenant shall mutually inspect Sublandlord’s Work and agree on a punch list of
cosmetic, finish or similar minor items or mechanical adjustments that require
completion. Sublandlord shall complete such punch list items as promptly as
practicable after such inspection. Subtenant shall reimburse Sublandlord for
Subtenant’s Prorata Share of all costs incurred by Sublandlord in completing
Sublandlord’s Work, including architectural, engineering and construction costs,
within thirty (30) days after receipt of Sublandlord’s invoice, which shall be
accompanied by reasonable supporting documentation.
7. Utilities and Services. Sublandlord shall provide the following utilities and
services:
     a. Electricity, gas, water and sewer service to the Subleased Premises;
     b. Snow and ice removal from parking areas, sidewalks, and driveways in or
about the Hangar;

-3-

--------------------------------------------------------------------------------

 

     c. Janitorial service to the Subleased Premises sufficient to maintain the
same in a clean and sanitary condition;
     d. Garbage removal a minimum of once per week;
     e. Heating, ventilation and air conditioning in the Subleased Premises
adequate to provide a comfortable working environment.
     The costs associated with the utilities and services to be provided by
Sublandlord hereunder are included as a part of Operating Expenses.
8. Insurance.
     a. Sublandlord shall maintain the insurance policies and coverages required
by Article XII, Section II of the Master Lease.
     b. Subtenant, at its sole expense, shall maintain commercial general
liability insurance with coverage limits of at least $1,000,000.00 for liability
resulting from injury and/or death, and at least $500,000.00 for liability
resulting from damage to property, occurring in or on the Subleased Premises.
Such policy of insurance shall name Sublandlord as an additional insured as to
claims and liabilities arising out of Subtenant’s acts or omissions. Evidence of
such insurance shall be delivered to Sublandlord upon request. Subtenant shall
also maintain workers compensation coverage sufficient to satisfy the statutory
requirements of the State of Ohio. All personal property of Subtenant (including
the Aircraft) kept at the Subleased Premises shall be at Subtenant’s sole risk,
and Subtenant shall maintain such insurance coverage on its personal property as
Subtenant deems advisable.
     c. Notwithstanding anything to the contrary herein, Sublandlord and
Subtenant hereby waive any claim, right, and/or cause of action that either may
have or acquire against the other, its officers, directors, employees and
agents, for damage to or destruction of its or others’ property, whether real,
personal, or mixed, of any kind or nature, including without limitation, each
party’s aircraft, arising from fire and/or other casualty, and shall secure such
waivers of subrogation or other endorsements as shall be necessary to ensure
that any insurer of such property is bound by such waiver.
9. Indemnification. Each party shall indemnify, defend and hold harmless the
other party (its affiliates, officers, directors, employees and agents) from and
against any and all claims, actions, losses, damages, liabilities, costs,
expenses, and reasonable attorney fees in connection with (i) loss of life,
personal injury and/or damage to property (except as provided in paragraph 8(c)
above) or other third party claims arising from or out of the negligent or
intentional acts or omissions or breach of contract of the indemnifying party,
or (ii) the failure of Sublandlord to comply with or perform any of its
obligations under the Master Lease.
10. Alterations. Subtenant shall not make any alterations or improvements to the
Subleased Premises without first obtaining Sublandlord’s prior written consent
and, if required, the County’s prior written consent. Subtenant shall complete
all approved alterations and improvements in a workmanlike manner and in full
compliance with all applicable laws, codes, rules and regulations. All such
alterations and improvements shall immediately become the property of the County
and, upon the expiration or termination of this Sublease, shall remain at the
Subleased Premises, unless otherwise agreed to in writing by the County.
Subtenant shall not cause or permit any mechanic’s liens or other liens to be
filed against the Hangar in connection with any approved alterations and
improvements and shall indemnify, defend, and hold Sublandlord harmless against
any loss therefrom. If any liens are filed against the Hangar, Subtenant shall
cause such lien to be released within thirty (30) days after Subtenant receives
notice of the filing thereof. If Subtenant fails to cause any such lien to be so
released, Sublandlord shall have the right to cause the same to be released (by
payment or otherwise). In that event, Subtenant shall

-4-

--------------------------------------------------------------------------------

 

reimburse Sublandlord for all costs incurred in obtaining the release of the
lien, together with interest thereon at the rate of ten percent (10%) per annum.
11. Use of Subleased Premises. Subtenant shall be the sole user of the Subleased
Premises and shall not use the Subleased Premises for any purpose other than to
hangar the Aircraft and perform activities related to the operation and
maintenance of the Aircraft. Subtenant shall use the Subleased Premises in
compliance with the Master Lease and any laws, codes, rules and regulations
promulgated by the County, the Federal Aviation Authority and any other
governmental authority having jurisdiction over the Subleased Premises.
12. Maintenance and Repair. Sublandlord shall maintain and promptly make all
necessary repairs and replacements to the Hangar and Subleased Premises, any
repairs necessitated by Subtenant’s negligence or intentional misconduct
excepted. The cost of all such maintenance, repairs and replacements shall be
included as part of Operating Expenses.
13. Taxes. Subtenant shall be responsible for all personal property taxes
assessed against the Aircraft or any other personal property of Subtenant or
others located in or about the Subleased Premises.
14. Fuel Farm. Subtenant may use the fuel farm at the Hangar for purposes of
fueling the Aircraft. Subtenant shall be entitled to purchase fuel for the
Aircraft from Sublandlord at cost. Subtenant shall also reimburse Sublandlord
for all fuel flow fees paid by Sublandlord to the County under Article 3,
Section II of the Master Lease in connection with the fuel purchased by
Subtenant. If Sublandlord and Subtenant do not collectively consume enough fuel
in any year to cause the fuel flow fees paid to the County to exceed the minimum
annual guaranteed flow fee specified in Article III, Section II of the Master
Lease, the parties agree that they each shall be responsible for paying fifty
percent (50%) of the fuel flow fee deficiency. Subtenant shall pay its share of
such deficiency within thirty (30) days after receipt of an invoice therefor
from Sublandlord. Subtenant shall maintain accurate records of all fuel consumed
by Subtenant and shall permit Sublandlord to inspect such records upon request.
Subtenant shall reimburse Sublandlord by the 10th day of each month for all fuel
consumed during the previous month and all fuel flow fees due in connection
therewith.
15. Casualty. In the event the Hangar and/or Subleased Premises are damaged or
destroyed by fire or other casualty, Sublandlord shall repair such damage in
accordance with Article XII, Section III of the Master Lease.
16. Eminent Domain. If any part of the Subleased Premises shall be taken by
eminent domain, or transferred by agreement in settlement of eminent domain
proceedings, this Sublease shall terminate as to the portion of the Subleased
Premises taken or transferred, as of the date title vests in the condemnor or
transferee. If any portion of the Subleased Premises is taken or transferred
which adversely affects Subtenant’s reasonable use of the Subleased Premises,
Subtenant shall have the right to terminate this Sublease, effective as of the
date title vests in the condemnor or transferee. In the event of any taking,
Subtenant shall have no claim against Sublandlord, but this provision shall not
preclude Subtenant from recovering damages against the condemning authority or
transferee to the extent permitted by applicable law.
17. Force Majeure. In the event that either party hereto shall be delayed from
the performance of any act required by it hereunder by reason of strikes,
lockouts, inability to procure labor or materials, riots, insurrections, wars or
other reason of a similar nature beyond the reasonable control of such party,
then performance of such act shall be extended for a period equivalent to the
period of such delay. Delays due to lack of funds shall not be deemed delays
beyond the reasonable control of such party.

-5-

--------------------------------------------------------------------------------

 

18. Default; Remedies.
     a. The occurrence of any of the following shall constitute an event of
default hereunder (a “Default”):
     i. Subtenant fails to pay any Rent within ten (10) days after receipt of
written notice of nonpayment from Sublandlord, provided, however, that
Sublandlord shall not be obligated to furnish more than two (2) such notices of
nonpayment in any twelve (12) month period;
     ii. The voluntary or involuntary filing of a petition under any bankruptcy
or insolvency laws by or against Subtenant;
     iii. Subtenant fails to perform any of its other obligations under this
Sublease and said failure shall continue for a period of thirty (30) days after
receipt of written notice of default from Sublandlord; or
     iv. Any action by Subtenant which would result in a default by Sublandlord
under the Master Lease.
     b. Upon the occurrence of any Default, Sublandlord shall be entitled to
pursue any contractual, legal or equitable remedy available to Sublandlord. All
rights and remedies of Sublandlord shall be cumulative and not exclusive. No
waiver by Sublandlord of any term or condition contained in this Sublease, or
the breach thereof, shall constitute a waiver of such term or condition or the
breach thereof in the future.
19. Parking. Subtenant and its agents, employees, invitees and guests shall be
entitled to the nonexclusive use of all parking spaces at the Hangar.
20. Signage. Subtenant, at its sole expense, shall be entitled to install
signage at the entrance of the Hangar and/or Office area, subject to
Sublandlord’s prior written approval, which will not be unreasonably withheld.
All signage shall comply with applicable laws, codes, rules and regulations.
21. Renewal Options. Sublandlord hereby grants to Subtenant the right and option
to extend the Term of this Sublease for three (3) additional terms of five
(5) years each (each a “Renewal Term”). In the event Subtenant desires to
exercise this option to renew, it shall so notify Sublandlord at least one
hundred eighty (180) days prior to the beginning of the Renewal Term, and upon
the giving of such notice, this Sublease shall automatically be extended for
that Renewal Term. The terms and conditions of this Sublease, as are then in
effect, shall govern during each Renewal Term, except for Subtenant’s Base Rent,
which shall be as follows:

              First Renewal Term:   Year   Annual Rent   Monthly Rent
 
  1   $47,452.00   $3,954.33
 
  2   $47,452.00   $3,954.33
 
  3   $47,452.00   $3,954.33
 
  4   $47,452.00   $3,954.33
 
  5   $47,452.00   $3,954.33

During the second and third Renewal Terms, Subtenant’s Base Rent shall be an
amount equal to the amounts specified in the following schedules, plus fifty
percent (50%) of the ground rent that Sublandlord pays to the County under
Article III, Section I.A. of the Master Lease:

              Second Renewal Term:   Year   Annual Rent   Monthly Rent
 
  1   $47,190.00   $3,932.50
 
  2   $47,190.00   $3,932.50
 
  3   $47,190.00   $3,932.50
 
  4   $47,190.00   $3,932.50
 
  5   $47,190.00   $3,932.50

-6-

--------------------------------------------------------------------------------

 

              Third Renewal Term:   Year   Annual Rent   Monthly Rent
 
  1   $51,909.00   $4,325.75
 
  2   $51,909.00   $4,325.75
 
  3   $51,909.00   $4,325.75
 
  4   $51,909.00   $4,325.75
 
  5   $51,909.00   $4,325.75

Subtenant’s renewal options are contingent upon Sublandlord exercising its
option(s) to renew the term of the Master Lease. If Sublandlord fails to
exercise one or both of its options to renew the Master Lease, Subtenant’s
corresponding renewal option(s) hereunder shall be null and void.
22. Right of First Refusal. If Sublandlord fails to exercise its option(s) to
renew the Master Lease, or otherwise desires to terminate the Master Lease with
the County, Subtenant shall be given the right of first refusal, subject to
consent of the County, to assume Sublandlord’s rights and obligations under the
Master Lease on a going-forward basis.
23. Commission. Sublandlord and Subtenant each represent and warrant that there
were no real estate brokers or agents involved in this transaction. Sublandlord
and Subtenant each agree to indemnify, defend and hold the other harmless from
and against any and all claims by any broker purporting to represent the
indemnifying party.
24. Assignment and Subletting. Subtenant shall not assign, sublet or transfer,
directly or indirectly, this Sublease or any interest in the Subleased Premises
without the prior written consent of Sublandlord, which consent may be withheld
in Sublandlord’s sole discretion.
25. Notices. Any notice required or permitted hereunder shall be in writing and
shall be personally delivered or sent by certified mail or overnight courier.
Notices shall be effective when received, refused or returned unclaimed. Notices
shall be addressed to the parties as follows:

     
If to Sublandlord at:
  Progressive Casualty Insurance Company
5920 Landerbrook Drive, Building 3, OH-L23
Mayfield Heights, Ohio 44124
Attention: Director of Real Estate

If to Subtenant:
  Acme Operating Company
4649 Ponce de Leon Blvd.
Suite 304
Coral Gables, Florida 33146-2118
Attn: Ms. Maria Millares

26. Successors and Assigns. All the terms and conditions of this Sublease shall
be binding upon and inure to the benefit of the parties and their respective
legal representatives, successors, and assigns.
27. Surrender. Upon the expiration or termination of this Sublease, Subtenant
shall surrender the Subleased Premises in substantially the same condition as
existed at the Sublease Commencement Date, ordinary wear and tear excepted.
28. Counterparts. This Sublease may be executed in two (2) or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
29. Modification. This Sublease shall not be modified in any respect except by a
writing signed by both parties.
30. Entire Agreement. This Sublease constitutes the entire understanding between
the parties. Any promise, term or condition not contained herein is not binding
on the parties.

-7-

--------------------------------------------------------------------------------

 

NOW, THEREFORE, Sublandlord and Subtenant have executed this Sublease to be
effective as of the day and year first written above.

              SUBLANDLORD:
Progressive Casualty Insurance Company

 
  By:   /s/ Ron Marotto

 
Ron Marotto

 
  Its:
Date:   Director of Real Estate
August 21, 2006

    SUBTENANT:
Acme Operating Corporation

 
  By:   /s/ Jonathan D. Lewis

 
Jonathan D. Lewis

 
  Its:
Date:   Vice President
August 17, 2006

-8-

--------------------------------------------------------------------------------

 

             
STATE OF OHIO
    )     SS:
COUNTY OF CUYAHOGA
    )      

Before me, a notary public in and for said County and State, personally appeared
the above-named Progressive Casualty Insurance Company, by Ron Marotto, its
Director of Real Estate.
Sworn to before me and subscribed in my presence at Cleveland, Ohio this 21st
day of August, 2006.

     
/s/ Linda L. Markusic

 
Notary Public

   
 
  SEAL

             
STATE OF FLORIDA
    )     SS:
COUNTY OF DADE
    )      

Before me, a notary public in and for said County and State, personally appeared
the above-named Acme Operating Company, by Jonathan D. Lewis, its Vice
President.
Sworn to before me and subscribed in my presence at
                                         this 17th day of August, 2006.

     
/s/ Dania de la Vega

 
Notary Public

   
 
  SEAL

-9-

--------------------------------------------------------------------------------

 

CONSENT
     The Board of County Commissioners of Cuyahoga County, Ohio hereby consent
to the foregoing Sublease Agreement.

     
 
  /s/ Jimmy Dimora

 
Jimmy Dimora

 
  /s/ Timothy F. Hagan

 
Timothy F. Hagan

 
  /s/ Peter Lawson Jones

 
Peter Lawson Jones

-10-

--------------------------------------------------------------------------------

 

EXHIBIT “A”
Aircraft
 
(Exhibit intentionally omitted)
 

-11-

--------------------------------------------------------------------------------

 

EXHIBIT “B”
Master Lease
 
(Exhibit intentionally omitted)
 

-12-

--------------------------------------------------------------------------------

 

EXHIBIT “C”
Floor Plan
 
(Exhibit intentionally omitted)
 

-13-

--------------------------------------------------------------------------------

 

EXHIBIT “D”
Plans and Specifications for Sublandlord’s Work
 
(Exhibit intentionally omitted)
 

-14-