HomeMy WebLinkAboutContract 37054 CITY SECRETAF?y 117
CONTRACT NO. 15
CONSENT TO SUBLEASE
LEASE SITE 4S
This CONSENT TO SUBLEASE ("Agreement") is made and entered into by and
between the CTTY OF FORT WORTH("Lessor" or"City"),a home rule municipal corporation
organized under the laws of the State of Texas and situated in Tarrant,Denton,and Wise Counties,
Texas, acting by and through Tom Higgins, its duly authorized Assistant City Manager; TEXAV
(M QRS I6-124,INC.,("Sublessor"or"New Lessee"), a Delaware Corporation,acting by and
through Jason E. Fox its duly authorized Executive Director, and TEXAS AVIATION
SERVICES, INC. ("Sublessee") acting by and throughT W ocdarci its duly
authorized ?y t,s;d e n-F -,collectively referred to as the"Parties.
RECITALS
A. Lessor previously entered into unimproved ground lease agreements at Fort Worth
Meacham International Airport (the "Airport") styled as City Secretary Contract
("CSC") Nos. 25211 and 25212, as amended by CSC Nos. 26073, 27689, 33999, and
31807 for the lease of Lease Sites known as IS and 2S with Sandpiper Airport Inn, Inc.
Lessor subsequently consented to the Assignment of CSC Nos. 25211 and 25212, as
amended, to Woody Woodard Family Partnership Ltd., d/b/a Texas Aviation Services
and Woodard Aviation Holdings, Ltd. (collectively the "Previous Lessee"), via CSC
Nos. 35473 and 36111 (collectively the"Previous Lease").
B. Lessor previously entered into an agreement with the Previous Lessee, via CSC No.
31308 for the Right of First Refusal ("ROFR") for lease sites known as 6S and 7S at the
Airport.
C. Lessor and Previous Lessee mutually agreed to terminate the Previous Lease and the
ROFR, and the Previous Lessee (i) transfers certain personal property to New Lessee
pursuant to a Bill of Sale and (ii) forever waives and relinquishes all of its right, title and
interest as lessee under the Previous Lease and the R�R pursuant to an Agreement Re:
Termination of Right to Lease each dated as-.ofAt 2008.
D. Lessor and the New Lessee subsequently entered Into a new ground lease agreement
styled as CSC No. 32CD53 at the Airport which combined lease sites 1S and 2S
with 6S and 7S to form a new lease site,known as 4S (the"New Lease").
E. The New Lessee, as Sublessor, and Sublessee, now wish to enter into a sublease of the
Premises of the New Lease and have requested that the City as Lessor, consent to the
sublease.
NOW,THEREFORE,Lessor,Sublessor,and Sublessee hereeby agree as follows:
Consent to Sublease
TEXAV(TX)QRS 16-124,Inc./Texas Aviation Services
Lease Site 4S
2� , 1
05-09-08 P01 :57 IN
1. Lessor hereby consents to the sublease entered into by and between Sublessor and Sublessee
attached hereto as Exhibit"A."
2. Lessor does not adopt,ratify,or approve any of the particular provisions of the Sublease and
does not grant any right,privilege or use to the Sublessee which is different from or more extensive
than any right,privilege or use granted to Lessee or Sublessor. In the event of any conflict between
the New Lease and this Agreement,the New Lease shall control.
3. Lessor consents to this Sublease expressly upon the promise and covenant by Sublessee that
Sublessee will faithfully perform, as to the subleased premises, all of its duties and obligations as
required by the sublease. Sublessor understands and agrees that it will remain liable to Lessor for
performance by Sublessee of all duties and obligations of Sublessee under the New Lease.
[Signature Pages Follow]
Consent to Sublease
TEXAV(TX)QRS 16-124,Inc./Texas Aviation Services
Lease Site 4S -! 1: v
v�U"l c �L'a lS
LESSOR:
CITY OF FORT WORTH: ATTEST:
By. By.
T.M. Higgins Marty Hendri
Assistant City Manager City Secretary
Date: �,2008
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on
this day personally appeared T.M. Higgins, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that the same was the act of the
City of Fort Worth and that he executed the same as the act of the City of Fort Worth for the
purposes and consideration therein expressed and in the capacity therein stated. `�
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of 2008.
—04'te� OK -L�
Notary Public in and for the State of Texas
APPROVED AS TO FORM AND LEGALITY: ° .e.
` Y ANA L.BRISENO
+ Notary Public,State of Texas
a,M ti MY Commission EWres
$L�y March 07,2011
Maleshia B:\Farmer
Assistant City Attorney
Contract Authorization:
M&C: C-22726
Date Approved: 3/25/08
Consent to Sublease
TEXAV(TX)QRS 16-124,Inc,/Texas Aviation Services
Lease Site 4S _
SUBLESSOR:
TEXAV(TX)QRS 16-124,INC.:
a DeIaw Corporation
By: I-
Nam : Jasqfi E. Fox
Title: ve Director
Date: April_,2008
ATTEST:
By:
STATE OF -{,�,1 c./k §
COUNTY OF � §
BEF RE ME, the undersigned authority, a Notary Public in and for the State of
on this day personally appeared ;S LSAnfr r—_. �).
known to me to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that the same was the act of TEXAV(TX) QRS 16-124,INC.,and that he
executed the same as the act of TEXAV (TX) QRS 16-124, INC., for the purposes and
consideration therein expressed and in the capacity 2erein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE thiscy of April,2008.
r
Notary Public in and the State of
V CTCOnIA JOANN REED
NO-ARY PL��IC,STP,TE OF NEW YORK
No OIPE5095491
QUA(..IFIED;N NEW YORK COUNTY
JULY 14,20 i
M-y 04 VIM i�S'ON EXPAES
Consent to Sublease
TEXAV(TX)QRS 16-124,Inc./Texas Aviation Services
Lease Site 4S
SUBLESSEE:
TEXAS AVIATION SERVICES,INC.,
a Texas corporation
By:
Name:
Title:
Date: 2008
ATTEST:
By:
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas,
on this day personally appeared i cc av , known to me (or proved to me on the
oath of or through s Texas driver's license) to be the person whose
name is subscribed to the foregoing instrument, and acknowledged to me that the same was the
act of TEXAS AVIATION SERVICES, INC., and that he executed the same as the act of
TEXAS AVIATION SERVICES, INC. for the purposes and consideration therein expressed
and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of A2008.
''p LEAH N:ni
+' Notary Public,Ss
Commissi Notary P b 1C in and fST e a eTOxaS
SEPT. 2
Consent to Sublease
TEXAV(TX)QRS 16-124,Inc./Texas Aviation Services Vol,
-1
Lease Site 4S '1"�V 1,
v
' ��1� �i1 �u.`y
EXHIBIT A
SUBLEASE AGREEMENT
LEASE SITE 4S
Consent to Sublease
TEXAV(TX)QRS 16-124,Inc. Texas Aviation Services
OJ
Lease Site 4S
EXECUTION VERSION
LEASE AGREEMENT
by and between
TEXAV(TX) QRS 16— 124, INC.,
a Delaware corporation
as LANDLORD
and
TEXAS AVIATION SERVICES, INC.,
a Texas corporation,
as TENANT
Premises: Meacham Field,
Fort Worth, Texas
Dated as of. April , 2008
NYL I B-469448.10.JMMARGE R
TABLE OF CONTENTS
Page
1. Demise of Premises............................................................................................................ 1
2. Certain Definitions............................................................................................................. 1
3. Title and Condition............................................................................................................7
4. Use of Leased Premises; Quiet Enjoyment........................................................................8
5. Term...................................................................................................................................9
6. Basic Rent..........................................................................................................................9
7. Additional Rent................................................................................................................ 10
8. Net Lease; Non-Terminability......................................................................................... 11
9. Payment of Impositions................................................................................................... I I
10. Compliance with Laws and Easement Agreements, Environmental Matters.................. 13
11. Liens; Recording.............................................................................................................. 14
12. Maintenance and Repair.................................................................................................. 15
13. Alterations and Improvements......................................................................................... 15
14. Permitted Contests........................................................................................................... 16
15. Indemnification................................................................................................................ 17
16. Insurance.......................................................................................................................... 18
17. Casualty and Condemnation............................................................................................20
18. Termination Events..........................................................................................................22
19. Restoration.......................................................................................................................23
20. Procedures Upon Purchase ..............................................................................................24
21. Assignment and Subletting, Prohibition Against Leasehold Financing..........................25
22. Events of Default.............................................................................................................28
23. Remedies and Damages upon Default.............................................................................30
24. Notices. ............................................................................................................................33
25. Estoppel Certificate..........................................................................................................34
26. Surrender..........................................................................................................................34
27. No Merger of Title...........................................................................................................34
28. Books and Records ..........................................................................................................34
29. Determination of Value....................................................................................................35
30. Non-Recourse as to Landlord..........................................................................................36
31. Financing..........................................................................................................................37
32. Subordination,Non-Disturbance and Attornment...........................................................37
33. Tax Treatment; Reporting................................................................................................38
34. Miscellaneous ..................................................................................................................38
35. Post-Closing Obligations.................................................................................................40
EXHIBITS
Exhibit"A" - Premises
Exhibit`B" - Machinery and Equipment
Exhibit"C" - Schedule of Permitted Encumbrances
Exhibit"D" - Rent Schedule
-i-
NYL I8-469448.10.J MMARGE R
LEASE AGREEMENT, made as of April , 2008, between TEXAV (TX)
QRS 16 - 124, INC., a Delaware corporation ("Landlord"), with an address c/o W.P. Carey
& Co. LLC, 50 Rockefeller Plaza, 2nd Floor,New York,New York 10020, and TEXAS
AVIATION SERVICES, INC., a Texas corporation("Tenant"), with an address at 3901 North
Main Street, Fort Worth, Texas 76106.
In consideration of the rents and provisions herein stipulated to be paid and
performed, Landlord and Tenant hereby covenant and agree as follows:
1. Demise of Premises. Landlord is the owner and holder of a ground
leasehold estate in and to the Leased Premises pursuant to the terms of the Airport Ground Lease
(as defined herein). Landlord hereby demises and lets to Tenant, and Tenant hereby takes and
leases from Landlord, for the term and upon the provisions hereinafter specified, the following
described property(collectively,the "Leased Premises"): (a)the land described in Exhibit"A"
attached hereto together with the Appurtenances (collectively, the "Land"); (b)the buildings
containing approximately 116,957 square feet, structures and other improvements now or
hereafter constructed on the Land (collectively, the "Improvements"); and (c)the fixtures,
machinery, equipment and other property described in Exhibit"B"hereto (collectively,
the "Equipment").
2. Certain Definitions.
"Acquisition Cost" shall mean $5,555,249.00.
"Additional Rent" shall mean Additional Rent as defined in Paragraph 7.
"Affiliate" of any Person shall mean any Person which shall (i)control,
(ii)be under the control of, or(iii)be under common control with such Person (the term
"control" as used herein shall be deemed to mean ownership of more than 50%of the
outstanding voting stock of a corporation or other majority equity and control interest if such
Person is not a corporation) and the power to direct or cause the direction of the management or
policies of such Person.
"Airport Ground Lease" shall mean that certain Ground Lease, by and
between The City of Forth Worth, as lessor, and Landlord, as lessee, dated as of April 2008.
"Alterations" shall mean all changes, additions, improvements or repairs
to, all alterations, reconstructions, restorations, renewals, replacements or removals of and all
substitutions or replacements for any of the Improvements or Equipment, both interior and
exterior, structural and non-structural, and ordinary and extraordinary.
"Appurtenances" shall mean all tenements, hereditaments, easements,
rights-of-way, rights,privileges in and to the Land, including(a)easements over other lands
granted by any Easement Agreement and (b) any streets, sidewalks, driveways, curbs, vault
spaces ways, alleys, gores or strips of land adjoining the Land.
"Asset Transfer" shall mean Asset Transfer as defined in Paragraph 210).
"Assignment" shall mean any assignment of rents and leases from
Landlord to a Lender which(a) encumbers any of the Leased Premises and (b) secures
Landlord's obligation to repay a Loan, as the same may be amended, supplemented or modified
from time to time.
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N Y L I B-469448.10-J M M A R G E R
"Basic Rent" shall mean Basic Rent as defined in Paragraph 6.
"Basic Rent Payment Date" shall mean Basic Rent Payment Date as
defined in Paragraph 6.
"Casualty" shall mean any damage to or destruction of or which affects
the Leased Premises.
"Commencement Date" shall mean Commencement Date as defined in
Paragraph 5.
"Condemnation" shall mean a Taking and/or a Requisition.
"Costs" of a Person or associated with a specified transaction shall mean
all reasonable costs and expenses incurred by such Person or associated with such transaction,
including without limitation, attorneys' fees and expenses, court costs, brokerage fees, escrow
fees, title insurance premiums, mortgage commitment fees, mortgage points, recording fees and
transfer taxes, as the circumstances require.
"CPI" shall mean CPI as defined in Exhibit"D"hereto.
"Default Rate" shall mean the Default Rate as defined in
Paragraph 7(a)(iv).
"Default Termination Amount" shall mean the Default Termination
Amount as defined in Paragraph 23(a)(iii).
"Easement Agreement" shall mean any conditions, covenants, restrictions,
easements, declarations, licenses and other agreements listed as Permitted Encumbrances or as
may hereafter affect the Leased Premises.
"Environmental Law" shall mean (a)whenever enacted or promulgated,
any applicable federal, state and local law, statute, ordinance, rule, regulation, license,permit,
authorization, approval, consent, court order,judgment, decree, injunction, code, requirement or
agreement with any governmental entity, (i) relating to pollution(or the cleanup thereof), or the
protection of air, water vapor, surface water, groundwater, drinking water supply, land (including
land surface or subsurface), plant, aquatic and animal life from injury caused by a Hazardous
Substance or (ii) concerning exposure to, or the use, containment, storage, recycling,
reclamation, reuse, treatment, generation, discharge,transportation,processing, handling,
labeling, production, disposal or remediation of Hazardous Substances, Hazardous Conditions or
Hazardous Activities, in each case as amended and as now or hereafter in effect, and (b) any
common law or equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability)that may impose liability or
obligations for injuries or damages due to or threatened as a result of the presence of, exposure
to, or ingestion of, any Hazardous Substance. The term Environmental Law includes,without
limitation,the federal Comprehensive Environmental Response Compensation and Liability Act
of 1980,the Superfund Amendments and Reauthorization Act, the federal Water Pollution
Control Act, the federal Clean Air Act, the federal Clean Water Act, the federal Resources
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments
to RCRA),the federal Solid Waste Disposal Act, the federal Toxic Substance Control Act, the
federal Insecticide, Fungicide and Rodenticide Act, the federal Occupational Safety and Health
Act of 1970, the federal National Environmental Policy Act and the federal Hazardous Materials
Transportation Act, each as amended and as now or hereafter in effect and any similar state or
local Law. "Environmental Law" shall include, without limitation, the Texas Solid Waste
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N Y L I B-469448.10-J M M A R G E R
Disposal Act(V.T.C.A. Health and Safety Code, Sections 361.001 et. seq.), the Texas Water
Code (V.T.C.A. Water Code, Sections 20.001-26.407) and Risk Reduction Standards (30 Tex.
Adm. Code Section 335, Subchapter S).
"Environmental Violation" shall mean (a)any direct or indirect discharge,
disposal, spillage, emission, escape, pumping, pouring, injection, leaching, release, seepage,
filtration or transporting of any Hazardous Substance at, upon, under, onto or within the Leased
Premises, or from the Leased Premises to the environment, in violation of any Environmental
Law or in excess of any reportable quantity established under any Environmental Law or which
could result in any liability to Landlord, Tenant or Lender, any Federal, state or local government
or any other Person for the costs of any removal or remedial action or natural resources damage
or for bodily injury or property damage, (b) any deposit, storage, dumping,placement or use of
any Hazardous Substance at, upon, under or within the Leased Premises in violation of any
Environmental Law or in excess of any reportable quantity established under any Environmental
Law or which could result in any liability to any Federal, state or local government or to any
other Person for the costs of any removal or remedial action or natural resources damage or for
bodily injury or property damage, (c)the abandonment or discarding of any barrels, containers or
other receptacles containing any Hazardous Substances in violation of any Environmental Laws,
(d) any activity, occurrence or condition which could result in any liability, cost or expense to
Landlord or Lender or any other owner or occupier of the Leased Premises, or which could result
in a creation of a lien on the Leased Premises under any Environmental Law, or(e) any violation
of or noncompliance with any Environmental Law.
"Equipment" shall mean the Equipment as defined in Paragraph 1.
"Event of Default" shall mean an Event of Default as defined in
Paragraph 22(a).
"Fair Market Value" shall mean the higher of(a)the fair market value of
the Leased Premises as of the Relevant Date as if unaffected and unencumbered by this Lease
(but subject to the terms of the Airport Ground Lease) or (b) the fair market value of the Leased
Premises as of the Relevant Date as affected and encumbered by this Lease and assuming that
the Term has been extended for all extension periods provided for herein. For all purposes of
this Lease, Fair Market Value shall be determined in accordance with the procedure specified in
Paragraph 29.
"Fair Market Value Date" shall mean the date when the Fair Market Value
is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately available funds
which at the time of payment are legal tender for the payment of public and private debts in the
United States of America.
"Guarantor" shall mean Ranger Aerospace &Aeronautics, Inc., a
Delaware corporation.
"Guaranty" shall mean the Guaranty and Suretyship Agreement dated as
of the date hereof from Guarantor to Landlord.
"Hazardous Activity"means any activity,process, procedure or
undertaking which directly or indirectly (a)procures, generates or creates any Hazardous
Substance; (b) causes or results in(or threatens to cause or result in) the release, seepage, spill,
leak, flow, discharge or emission of any Hazardous Substance into the environment(including
the air, ground water,watercourses or water systems), (c) involves the containment or storage of
3
N Y L I B-069448.14 J M MAR G E R
any Hazardous Substance; or(d)would cause the Leased Premises or any portion thereof to
become a hazardous waste treatment, recycling, reclamation, processing, storage or disposal
facility within the meaning of any Environmental Law.
"Hazardous Condition"means any condition which would support any
claim or liability under any Environmental Law, including the presence of underground storage
tanks.
"Hazardous Substance" means (i) any substance, material,product,
petroleum,petroleum product, derivative, compound or mixture, mineral (including asbestos),
chemical, gas, medical waste, or other pollutant, in each case whether naturally occurring, man-
made or the by-product of any process,that is toxic, harmful or hazardous or acutely hazardous
to the environment or public health or safety or(ii) any substance supporting a claim under any
Environmental Law,whether or not defined as hazardous as such under any Environmental Law.
Hazardous Substances include, without limitation, any toxic or hazardous waste,pollutant,
contaminant, industrial waste,petroleum or petroleum-derived substances or waste, radon,
radioactive materials, asbestos, asbestos containing materials, microbial matter(including but not
limited to mold, mildew and other fungi or bacterial matter which reproduces through the release
of spores or the splitting of cells), urea formaldehyde foam insulation, lead and polychlorinated
biphenyls.
"Impositions" shall mean the Impositions as defined in Paragraph 9(a).
"Improvements" shall mean the Improvements as defined in Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph 15.
"Insurance Requirements" shall mean the requirements of all insurance
policies required to be maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of law, code, ordinance,
order,judgment, decree, injunction, rule, regulation,policy, requirement or administrative or
judicial determination, even if unforeseen or extraordinary, of every duly constituted
governmental authority, court or agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease Year,the period
commencing on the Commencement Date and ending at midnight on the last day of the
twelfth(12th) full consecutive calendar month following the month in which the Commencement
Date occurred, and each succeeding twelve (12) month period during the Term.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.
"Legal Requirements" shall mean the requirements of all present and
future Laws (including but not limited to Environmental Laws and Laws relating to accessibility
to, usability by, and discrimination against, disabled individuals) and all covenants, restrictions
and conditions now or hereafter of record which may be applicable to Tenant or to any of the
Leased Premises, or to the use, manner of use, occupancy, possession, operation, maintenance,
alteration, repair or restoration of any of the Leased Premises, even if compliance therewith
necessitates structural changes or improvements or results in interference with the use or
4
NYLIB-069448.1 aJMMARGER
enjoyment of any of the Leased Premises or requires Tenant to carry insurance other than as
required by this Lease.
"Lender" shall mean any Person(and its respective successors and
assigns) which may, on or after the date hereof, make a Loan to Landlord or be the holder of a
Note.
"Loan" shall mean any loan made by one or more Lenders to Landlord,
which loan is secured by a Mortgage and an Assignment and evidenced by a Note.
"Monetary Obligations" shall mean Rent and all other sums payable by
Tenant under this Lease to Landlord,to any third party on behalf of Landlord or to any
Indemnitee.
"Moody's" shall mean Moody's Investor Services, Inc.
"Mortgage" shall mean any mortgage or deed of trust from Landlord to a
Lender which (a) encumbers any of the Leased Premises and(b) secures Landlord's obligation to
repay a Loan, as the same may be amended, supplemented or modified.
"Net Award" shall mean (a)the entire award payable to Landlord or
Lender by reason of a Condemnation whether pursuant to a judgment or by agreement or
otherwise, or(b)the entire proceeds of any insurance required under clauses (i), (ii) (to the extent
payable to Landlord or Lender), (iv), (v) or(vi) of Paragraph 16(a), as the case may be, less any
expenses incurred by Landlord and Lender in collecting such award or proceeds.
"Note" shall mean any promissory note evidencing Landlord's obligation
to repay a Loan, as the same may be amended, supplemented or modified.
"Partial Casualty" shall mean any Casualty which does not constitute a
Termination Event.
"Partial Condemnation" shall mean any Condemnation which does not
constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants, restrictions,
reservations, liens, conditions and easements and other encumbrances, other than any Mortgage
or Assignment, listed on Exhibit"C" hereto (but such listing shall not be deemed to revive any
such encumbrances that have expired or terminated or are otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership, association, corporation or
other entity.
"Post Closing Obligations" shall mean those obligations of Tenant
specified in Paragraph 35(a) hereof.
"Prepayment Premium" shall mean any payment required to be made by
Landlord to a Lender under a Note or any other document evidencing or securing a Loan(other
than payments of principal and/or interest which Landlord is required to make under a Note or a
Mortgage) solely by reason of any prepayment or defeasance by Landlord of any principal due
under a Note or Mortgage, and which may without limitation take the form of(a) a"make
whole" or yield maintenance clause requiring a prepayment premium or(b) a defeasance
payment(such defeasance payment to be an amount equal to the positive difference between
(i) the total amount required to defease a Loan and (ii)the outstanding principal balance of the
5
NYLIBA69448.1 aJMMARGE R
Loan as of the date of such defeasance plus reasonable Costs of Landlord and Lender or(c)
"breakage costs"or(d) any combination of clauses (a), (b) and (c) above.
"Present Value" of any amount shall mean such amount discounted by a
rate per annum which is the lower of(a)the Prime Rate at the time such present value is
determined or(b) six percent(6%) per annum.
"Prime Rate" shall mean the annual interest rate as published, from time to
time, in The Wall Street Journal as the "Prime Rate" in its column entitled"Money Rate". The
Prime Rate may not be the lowest rate of interest charged by any"large U.S. money center
commercial banks" and Landlord makes no representations or warranties to that effect. In the
event The Wall Street Journal ceases publication or ceases to publish the "Prime Rate" as
described above, the Prime Rate shall be the average per annum discount rate (the"Discount
Rate") on ninety-one (91) day bills ("Treasury Bills") issued from time to time by the United
States Treasury at its most recent auction, plus three hundred (300) basis points. If no such 91-
day Treasury Bills are then being issued, the Discount Rate shall be the discount rate on Treasury
Bills then being issued for the period of time closest to ninety-one (91) days.
"Relevant Amount" shall mean the Termination Amount or the Default
Termination Amount, as the case may be.
"Relevant Date" shall mean(a)the date immediately prior to the date on
which a written notice of Condemnation is received, in the event of a Termination Notice under
Paragraph 18 which is occasioned by a Taking, (b) the date immediately prior to the date on
which the applicable Casualty occurs, in the event of a Termination Notice under Paragraph 18
which is occasioned by a Casualty, (c) the date when Fair Market Value is redetermined, in the
event of a redetermination of Fair Market Value pursuant to Paragraph 20(c), (d)the date
immediately prior to the Event of Default giving rise to the need to determine Fair Market Value
in the event Landlord provides Tenant with notice of its intention to require Tenant to make a
termination offer under Paragraph 23(a)(iii), as applicable.
"Renewal Term" shall mean Renewal Term as defined in Paragraph 5.
"Rent" shall mean, collectively, Basic Rent and Additional Rent.
"Requisition" shall mean any temporary requisition or confiscation of the
use or occupancy of any of the Leased Premises by any governmental authority, civil or military,
whether pursuant to an agreement with such governmental authority in settlement of or under
threat of any such requisition or confiscation, or otherwise.
"W" shall mean Standard and Poor's Corporation.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"State" shall mean the State of Texas.
"Subsidiary(ies)" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly owns or controls the
shares of stock or other equity interests having ordinary voting power to elect a majority of the
board of directors (or appoint other comparable managers) of such corporation,partnership,
limited liability company, or other entity.
6
N Y L I B-069448.10.J M M A R G E R
"Surviving Obligations" shall mean any obligations of Tenant under this
Lease, actual or contingent, which arise on or prior to the expiration or prior termination of this
Lease or which survive such expiration or termination by their own terms.
"Taking" shall mean(a) any taking or damaging of all or a portion of any
of the Leased Premises (i) in or by condemnation or other eminent domain proceedings pursuant
to any Law, general or special, or(ii)by reason of any agreement with any condemnor in
settlement of or under threat of any such condemnation or other eminent domain proceeding, or
(iii)by any other means, or(b) any de facto condemnation. The Taking shall be considered to
have taken place as of the later of the date actual physical possession is taken by the condemnor,
or the date on which the right to compensation and damages accrues under the law applicable to
the Leased Premises.
"Tenant Group" shall mean each Guarantor and their respective
Subsidiaries if and for so long as each such Person shall be part of the group for the purpose of
reporting financial positions and results on a consolidated basis.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean the greater of(a)the sum of the Fair
Market Value and the applicable Prepayment Premium which Landlord will be required to pay in
prepaying or defeasing, as applicable, any Loan with proceeds of the Termination Amount or
(b)the sum of the Acquisition Cost and the applicable Prepayment Premium which Landlord will
be required to pay in prepaying or defeasing in whole or in part, as applicable, any Loan with
proceeds of the Termination Amount.
"Termination Date" shall mean Termination Date as defined in
Paragraph 18.
"Termination Event" shall mean a Termination Event as defined in
Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined in
Paragraph 18(a).
"Warranties" shall mean Warranties as defined in Paragraph 3(d).
"Work" shall mean Work as defined in Paragraph 13(b).
3. Title and Condition.
(a) The Leased Premises are demised and let subject to (i)the terms of the
Airport Ground Lease, (ii)the rights of any Persons in possession of the Leased Premises, (iii)the
existing state of title of any of the Leased Premises, including any Permitted Encumbrances, (iv) any
state of facts which an accurate survey or physical inspection of the Leased Premises might show,
(v) all Legal Requirements, including any existing violation of any thereof, and (vi)the condition of
the Leased Premises as of the commencement of the Term, without representation or warranty by
Landlord.
(b) Tenant acknowledges that Tenant or an Affiliate thereof has been in
continuous physical possession and control of the Leased Premises prior to the date of this Lease and
that the Leased Premises are in a satisfactory state and condition of repair at the inception of this
Lease. LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL TAKE
THE LEASED PREMISES AS IS. TENANT ACKNOWLEDGES THAT LANDLORD
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N Y L I B-069448.14J MMAR G E R
(WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS
NOT MADE AND WILL NOT MAKE,NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE LEASED PREMISES, INCLUDING ANY WARRANTY OR
REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY
PARTICULAR USE OR PURPOSE, (ii)THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT,
(iv)LANDLORD'S TITLE THERETO, (v) VALUE, (vi)COMPLIANCE WITH
SPECIFICATIONS, (vii) LOCATION, (viii)USE, (ix) CONDITION, (x) MERCHANTABILITY,
(xi) QUALITY, (xii)DESCRIPTION, (xiii)DURABILITY, (xiv) OPERATION, (xv) THE
EXISTENCE OF ANY HAZARDOUS SUBSTANCE, HAZARDOUS CONDITION OR
HAZARDOUS ACTIVITY OR(xvi) COMPLIANCE OF THE LEASED PREMISES WITH ANY
LAW OR LEGAL REQUIREMENT; AND ALL RISKS INCIDENT THERETO ARE TO BE
BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES IS OF
ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAS
BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT. IN THE EVENT OF ANY
DEFECT OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE,
WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY
OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE
PROVISIONS OF THIS PARAGRAPH 3(b)HAVE BEEN NEGOTIATED, AND ARE
INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES
BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED
PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY
OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has examined the title to the
Leased Premises prior to the execution and delivery of this Lease and has found the same to be
satisfactory for the purposes contemplated hereby. Tenant acknowledges that(i) fee simple title
(both legal and equitable) is in the name of The City of Fort Worth, and that Tenant has only the
leasehold right of possession and use of the Leased Premises, as provided herein, (ii)to the best of
Tenant's knowledge, the Improvements conform to all material Legal Requirements and all
Insurance Requirements, (iii)all easements necessary for the use or operation of the Leased
Premises have been obtained, (iv) all contractors and subcontractors who have performed work on or
supplied materials to the Leased Premises have been fully paid, and all materials and supplies have
been fully paid for, (v)the Improvements have been fully completed in all material respects in a
workmanlike manner of first class quality, and (vi) all Equipment necessary or appropriate for the
use or operation of the Leased Premises has been installed and is presently fully operative in all
material respects.
(d) Landlord hereby assigns to Tenant, without recourse or warranty
whatsoever, all assignable warranties, guaranties, indemnities and similar rights (collectively,
"Warranties")which Landlord may have against any manufacturer, seller, engineer, contractor or
builder in respect of any of the Leased Premises. Such assignment shall remain in effect until the
expiration or earlier termination of this Lease, whereupon such assignment shall cease and all of the
Warranties shall automatically revert to Landlord. In confirmation of such reversion Tenant shall
execute and deliver promptly any certificate or other document reasonably required by Landlord.
Landlord shall also retain the right to enforce any Warranties upon the occurrence of an Event of
Default. Tenant shall enforce the Warranties in accordance with their respective terms.
4. Use of Leased Premises, Quiet Enjoyment.
(a) Tenant may occupy and use the Leased Premises for aircraft repair,
maintenance and storage and uses incidental and ancillary thereto to the extent permitted under the
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NYLI B-069448.14JMMARG E R
Airport Ground Lease and for no other purpose, without the prior written consent of Landlord, and
the lessor under the Airport Ground Lease(if and when required), in its sole discretion. Tenant shall
not use or occupy or permit any of the Leased Premises to be used or occupied, nor do or permit
anything to be done in or on any of the Leased Premises, in a manner which would or might
(i) violate any Law, Legal Requirement or Permitted Encumbrance, (ii) make void or voidable or
cause any insurer to cancel any insurance required by this Lease, or make it difficult or impossible to
obtain any such insurance at commercially reasonable rates, (iii) make void or voidable, cancel or
cause to be cancelled or release any of the Warranties, (iv) cause structural injury to any of the
Improvements, (v) constitute a public or private nuisance or waste or (vi) violate any term, covenant,
provision, restriction or limitation set forth in the Airport Ground Lease. In no event shall any of the
Leased Premises be used or occupied for any retail purposes.
(b) Subject to the provisions hereof, so long as no Event of Default has
occurred and is continuing, Tenant shall quietly hold, occupy and enjoy the Leased Premises
throughout the Term, without any hindrance, ejection or molestation by Landlord with respect to
matters that arise after the date hereof, provided that Landlord or its agents may enter upon and
examine any of the Leased Premises at such reasonable times as Landlord may select and upon
reasonable notice to Tenant (except in the case of an emergency, in which no notice shall be
required) for the purpose of inspecting the Leased Premises, verifying compliance or
non-compliance by Tenant with its obligations hereunder and the existence or non-existence of an
Event of Default or event which with the passage of time and/or notice would constitute an Event of
Default, showing the Leased Premises to prospective Lenders and purchasers, making any repairs
and taking such other action with respect to the Leased Premises as is permitted by any provision
hereof.
5. Term.
(a) Subject to the provisions hereof, Tenant shall have and hold the Leased
Premises for an initial term (such term, as extended or renewed in accordance with the provisions
hereof, being called the "Term") commencing on the date hereof(the "Commencement Date") and
ending at 11:59 p.m. at the Leased Premises on the last calendar day of April, 2028 (the "Expiration
Date").
(b) Provided that if, on or prior to the Expiration Date or any other Renewal
Date (as hereinafter defined) this Lease shall not have been terminated pursuant to any provision
hereof, then on the Expiration Date, and on the fifth (5th), tenth (1 Oth) and fifteenth(15th)
anniversaries of the Expiration Date (the Expiration Date and each such anniversary being a referred
to herein as a"Renewal Date"), the Term shall be deemed to have been automatically extended for
an additional period of five (5) years (each such extension, a"Renewal Term"), unless Tenant shall
notify Landlord in writing in recordable form at least twelve (12) months prior to the next Renewal
Date that Tenant is terminating this Lease as of the next Renewal Date. Any such extension of the
Term shall be subject to all of the provisions of this Lease, as the same may be amended,
supplemented or modified (except that Tenant shall not have the right to any additional Renewal
Terms). The exercise of any Renewal Term hereunder shall be subject, when applicable, to the
renewal or extension of the Airport Ground Lease.
(c) Landlord shall have the right during the last twelve (12)months of the
Term, (including if Tenant exercises its option not to extend or further extend the Term), to
(i) advertise the availability of the Leased Premises for sale or reletting and to erect upon the Leased
Premises signs indicating such availability and (ii) show the Leased Premises to prospective
purchasers or tenants or their agents at such reasonable times as Landlord may select.
6. Basic Rent. Tenant shall pay to Landlord, as annual rent for the Leased
Premises during the Term, the amounts determined in accordance with Exhibit "D"hereto
9
NYLI B-469448.10-JMMARGER
("Basic Rent"), payable in advance for the next calendar month, commencing on the twenty-fifth
(25 )— day of the first month following the date hereof and continuing on the same day of each
month thereafter during the Term which shall be payable as set forth in said Exhibit"D". The
date that each payment of Basic Rent is due is hereinafter referred to as a"Basic Rent Payment
Date". Each such payment of Basic Rent shall be made in Federal Funds on each Basic Rent
Payment Date to Landlord and/or to such one or more other Persons, pursuant to wire transfer
instructions delivered to Tenant from time to time at such addresses and in such proportions as
Landlord may direct by fifteen(15) days'prior written notice to Tenant(in which event Tenant
shall give Landlord notice of each such payment concurrent with the making thereof).
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent(collectively,
"Additional Rent"):
(i) except as otherwise specifically provided herein, all costs
and expenses of Tenant, Landlord and any other Persons specifically referenced herein which
are incurred in connection or associated with (A)the ownership, use, non-use, occupancy,
monitoring, possession, operation, condition, design, construction, maintenance, alteration,
repair or restoration of any of the Leased Premises, (B) the performance of any of Tenant's
obligations under this Lease, (C) any sale or other transfer of any of the Leased Premises to
Tenant under this Lease, (D) any Condemnation proceedings, (E)the adjustment, settlement
or compromise of any insurance claims involving or arising from any of the Leased
Premises, (F)the prosecution, defense or settlement of any litigation involving or arising
from any of the Leased Premises, this Lease, or the sale of the Leased Premises to Landlord,
(G) the exercise or enforcement by Landlord, its successors and assigns, of any of its rights
under this Lease, (H) any amendment to or modification or termination of this Lease made at
the request of Tenant, (I) reasonable Costs of Landlord's counsel and reasonable internal
Costs of Landlord incurred in connection with any act undertaken by Landlord (or its
counsel) at the request of Tenant, any act of Landlord performed on behalf of Tenant or the
review and monitoring of compliance by Tenant with the terms of this Lease, including any
Post-Closing Obligations and applicable Law, (J) the reasonable internal Costs of Landlord
incurred in connection with any act undertaken by Landlord at the request of Tenant or
Tenant's failure to act promptly in an emergency situation, (K) all costs and fees associated
with the wire transfers of Rent payments, (L) all ground rent and the payment, performance
and observance of all obligations of lessee under the Airport Ground Lease, and (M) any
other items specifically required to be paid by Tenant under this Lease;
(ii) after the date all or any portion of any installment of Basic
Rent is due and not paid by the applicable Basic Rent Payment Date, an amount (the "Late
Charge") equal to five percent (5%) of the amount of such unpaid installment or portion
thereof to reimburse Landlord for its cost and inconvenience incurred as a result of Tenant's
delinquency; provided, however,that with respect to the first two (2) late payments of all or
any portion of any installment of Basic Rent in any Lease Year, the Late Charge shall not be
due and payable unless the Basic Rent has not been paid within five (5) days following the
due date thereof. Tenant acknowledges that the damages to and costs incurred by Landlord
resulting from Tenant's late payment of Basic Rent would be difficult, if not impossible, to
ascertain with any accuracy, and that the five (5%) charge represents Landlord and Tenant's
efforts to approximate such potential damages and costs;
(iii)a sum equal to any additional sums (including any late
charge in excess of the amount payable under clause (ii) above for that portion of the Basic
Rent paid to the Lender as scheduled installments of principal and interest, default penalties,
interest in excess of amounts payable under clause (iv) below for that portion of the Basic
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N Y L I B-4694 48.10-J M MA R G E R
Rent paid to the Lender as scheduled installments of principal and interest, and fees of
Lender's counsel)which are payable by Landlord to any Lender under any Note by reason of
Tenant's late payment or non-payment of Basic Rent or by reason of an Event of Default; and
(iv)interest at the rate (the "Default Rate") of the lesser of(x)
five percent(5%)over the Prime Rate per annum or(y)the maximum legal rate permitted to
be charged under Laws applicable to the Leased Premises, on the following sums until paid
in full: (A)all overdue installments of Basic Rent from the respective due dates thereof,
(B) all overdue amounts of Additional Rent relating to obligations which Landlord shall have
paid on behalf of Tenant, from the date of payment thereof by Landlord, and (C) all other
overdue amounts of Additional Rent, from the date when any such amount becomes overdue;
and
(v) two thousand five hundred dollars ($2,500)per month for
each month that Tenant is late in the delivery of the annual and quarterly financial statements
that are required to be delivered pursuant to Paragraph 28(b).
(b) Tenant shall pay and discharge (i) any Additional Rent referred to in
Paragraph 7(a)(i)when the same shall become due,provided that amounts which are billed to
Landlord or any third party, but not to Tenant, shall be paid within five (5) days after Landlord's
demand for payment thereof, and (ii) any other Additional Rent, within five (5)days after Landlord's
demand for payment thereof.
(c) In no event shall amounts payable under Paragraph 7(a)(ii), (iii) and (iv)
or elsewhere in this Lease exceed the maximum amount permitted by applicable Law,
8. Net Lease;Non-Terminability.
(a) This is a net lease and all Monetary Obligations shall be paid without
notice or demand and without set-off, counterclaim, recoupment, abatement, suspension, deferment,
diminution, deduction, reduction or defense (collectively, a"Set-Off').
(b) Except as expressly provided herein to the contrary with respect to
Casualty or Condemnation, this Lease and the rights of Landlord and the obligations of Tenant
hereunder shall not be affected by any event or for any reason or cause whatsoever, whether foreseen
or unforeseen.
(c) The obligations of Tenant hereunder shall be separate and independent
covenants and agreements, all Monetary Obligations shall continue to be payable in all events (or, in
lieu thereof, Tenant shall pay amounts equal thereto), and the obligations of Tenant hereunder shall
continue unaffected unless the requirement to pay or perform the same shall have been terminated
pursuant to an express provision of this Lease. The obligation to pay Rent or amounts equal thereto
shall not be affected by any collection of rents by any governmental body pursuant to a tax lien or
otherwise, even though such obligation results in a double payment of Rent. All Rent payable by
Tenant hereunder shall constitute "rent" for all purposes (including Section 502(b)(6) of the Federal
Bankruptcy Code).
(d) Except as otherwise expressly provided herein, Tenant shall have no right
and hereby waives all rights which it may have under any Law(i)to quit, terminate or surrender this
Lease or any of the Leased Premises, or(ii)to any Set-Off of any Monetary Obligations.
9. Payment of Impositions.
11
NYL I8-469448.10-J MMARGE R
(a) Tenant shall, before interest or penalties are due thereon, pay and
discharge all taxes (including real property and rent taxes with respect to the Leased Premises, and
all personal property, franchise, margin, sales, use, and gross receipts taxes imposed on Tenant), all
charges for any easement or agreement maintained for the benefit of any of the Leased Premises, all
assessments and levies, all permit, inspection and license fees, all rents and charges for water, sewer,
utility and communication services relating to any of the Leased Premises, all ground rents and all
other public charges whether of a like or different nature, even if unforeseen or extraordinary,
imposed upon or assessed against (i) Tenant, (ii) Tenant's leasehold interest in the Leased Premises,
(iii) any of the Leased Premises, or (iv) Landlord as a result of or arising in respect of the
acquisition, ownership, occupancy, leasing, use, possession or sale of any of the Leased Premises,
any activity conducted on any of the Leased Premises, or the Rent, (collectively, the "Impositions");
provided, that nothing herein shall obligate Tenant to pay(A) income, margin, excess profits, or
other taxes of Landlord (or Lender)which are determined on the basis of Landlord's (or Lender's)
net income or net worth, or any franchise taxes(unless, in any such case, such taxes are in lieu of or
a substitute for any other tax, assessment or other charge upon or with respect to the Leased
Premises which, if it were in effect,would be payable by Tenant under the provisions hereof or by
the terms of such tax, assessment or other charge); provided, however, that any tax imposed upon
Landlord's gross receipts shall be included as Impositions hereunder and shall not be deemed to be a
tax on Landlord's net income or net worth, (B)any estate, inheritance, succession, gift or similar tax
imposed on Landlord, or(C) any capital gains tax imposed on Landlord in connection with the sale
of the Leased Premises to any Person. Landlord shall have the right to require Tenant to pay,
together with scheduled installments of Basic Rent, the amount of the gross receipts or rent tax, if
any, payable with respect to the amount of such installment of Basic Rent. If any Imposition may be
paid in installments without interest or penalty, Tenant shall have the option to pay such Imposition
in installments; in such event, Tenant shall be liable only for those installments which accrue or
become due and payable during the Term. Tenant shall be responsible to obtain all bills for the
payment of Impositions and shall prepare and file all tax reports required by governmental
authorities which relate to the Impositions. Tenant shall deliver to Landlord (1) copies of all
settlements and notices pertaining to the Impositions which may be issued by any governmental
authority within ten (10) days after Tenant's receipt thereof, (2) receipts for payment of all taxes
required to be paid by Tenant hereunder within thirty (30) days after the due date thereof and
(3) receipts for payment of all other Impositions within ten (10)days after Landlord's request
therefor.
(b) Following the occurrence of an Event of Default or if Landlord is required
by a Lender to pay into escrow funds necessary to pay Escrow Charges (as herein defined), Tenant
shall pay Escrow Charges to Landlord such amounts (each an"Escrow Payment")monthly or as
required by such Lender (but not more often than monthly) so that there shall be in an escrow
account an amount sufficient to pay the Escrow Charges (as hereinafter defined) as they become due.
As used herein, "Escrow Charges" shall mean real estate taxes and assessments on or with respect to
the Leased Premises or payments in lieu thereof and premiums on any insurance required by this
Lease. Landlord shall determine the amount of the Escrow Charges(it being agreed that if required
by a Lender, such amounts shall equal any corresponding escrow installments required to be paid by
Landlord) and the amount of each Escrow Payment. As long as the Escrow Payments are being held
by Landlord the Escrow Payments shall not be commingled with other funds of Landlord or other
Persons and interest thereon shall accrue for the benefit of Tenant from the date such monies are
received and invested until the date such monies are disbursed to pay Escrow Charges. Landlord
shall apply the Escrow Payments to the payment of the Escrow Charges in such order or priority as
Landlord shall determine or as required by law. If at any time the Escrow Payments theretofore paid
to Landlord shall be insufficient for the payment of the Escrow Charges, Tenant, within ten (10)
days after Landlord's demand therefor, shall pay the amount of the deficiency to Landlord.
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NYLIB-069448.I D-JMMARGER
10. Compliance with Laws and Easement Agreements, Environmental
Matters.
(a) Tenant shall, at its expense, comply with and conform to, and cause the
Leased Premises and any other Person occupying any part of the Leased Premises to comply with
and conform to all Insurance Requirements, all Legal Requirements(including all applicable
Environmental Laws) and all of the terms, covenants and conditions to be observed or performed by
Lessee (or any operator at the Leased Premises) under the Airport Ground Lease (including, but not
limited to, complying with and abiding by the "Sponsor's Airport Assurances"pursuant to the
Federal Airport Act as described therein and the provisions of Section 19 thereof). Tenant shall not
at any time (i)cause, permit or suffer to occur any Environmental Violation or(ii) permit any
sublessee, assignee or other Person occupying the Leased Premises under or through Tenant to
cause, permit or suffer to occur any Environmental Violation and, at the request of Landlord or
Lender, Tenant shall promptly remediate or undertake any other appropriate response action to
correct any existing Environmental Violation, and (iii) without the prior written consent of Landlord
and Lender, permit any drilling or exploration for or extraction, removal, or production of any
minerals from the surface or the subsurface of the Land, regardless of the depth thereof or the
method of mining or extraction thereof. Any and all reports prepared for or by Landlord with
respect to the Leased Premises shall be for the sole benefit of Landlord and Lender and no other
Person shall have the right to rely on any such reports. In addition to any parking obligations set
forth in the Post-Closing Obligations, if at any time any governmental authority shall require the
addition of any striped parking spaces, Tenant shall promptly undertake to add such additional
parking (in no event later than thirty (30) days, subject to force majeure)
(b) Tenant, at its sole cost and expense, will at all times promptly and
faithfully abide by, discharge and perform all of the covenants, conditions and agreements contained
in the Airport Ground Lease to be kept or performed on the part of the Lessee thereunder, and in any
Easement Agreement on the part of Landlord or the occupier to be kept and performed thereunder.
Tenant will not alter, modify, amend or terminate any Easement Agreement, give any consent or
approval thereunder, or enter into any new Easement Agreement without, in each case,the prior
written consent of Landlord.
(c) Upon prior written notice from Landlord, Tenant shall permit such persons
as Landlord may designate ("Site Reviewers") to visit the Leased Premises during normal business
hours and in a manner which does not unreasonably interfere with Tenant's operations and perform,
as agents of Tenant, and to conduct environmental site investigations and assessments ("Site
Assessments") on the Leased Premises in any of the following circumstances: (i) in connection with
any sale, financing or refinancing of the Leased Premises, (ii) within the six month period prior to
the expiration of the Term, (iii) if required by Lender or the terms of any credit facility to which
Landlord is bound, (iv) if an Event of Default exists, or(v) at any other time that, in the good faith
opinion of Landlord or Lender, a reasonable basis exists to believe that an Environmental Violation
or any condition that could reasonably be expected to result in any Environmental Violation exists.
Such Site Assessments may include both above and below the ground testing for Environmental
Violations and such other tests as may be necessary, in the opinion of the Site Reviewers,to conduct
the Site Assessments. Tenant shall supply to the Site Reviewers such historical and operational
information regarding the Leased Premises as may be reasonably requested by the Site Reviewers to
facilitate the Site Assessments, and shall make available for meetings with the Site Reviewers
appropriate personnel having knowledge of such matters. The cost of performing and reporting Site
Assessments shall be paid by Tenant under clause (i), if the sale is to Tenant or an Affiliate or
designee of Tenant; under clause (ii), but only one (1) time; under clause (iii), but only with respect
to the initial Loan; and under clauses (iv) and (v), but only if an Environmental Violation is actually
discovered; and, in all other instances, same shall be paid by Landlord.
13
NYL I B-069448.14JMMARG E R
(d) If an Environmental Violation occurs or is found to exist and, in
Landlord's good faith and reasonable judgment(based upon a cost estimate provided by a qualified
environmental consultant),the cost of remediation of, or other response action with respect to, the
same is likely to exceed $100,000.00, Tenant shall provide to Landlord, within ten(10) days after
Landlord's request therefor, adequate financial assurances that Tenant will effect such remediation in
accordance with applicable Environmental Laws. Such financial assurances may, at the request of
Landlord, include a bond or letter of credit reasonably satisfactory to Landlord in form and substance
and in an amount equal to or greater than Landlord's reasonable estimate, based upon a Site
Assessment performed pursuant to Paragraph 10(c), of the anticipated cost of such remedial action.
(e) Notwithstanding any other provision of this Lease, if an Environmental
Violation occurs or is found to exist and the Term would otherwise terminate or expire,then, at the
option of Landlord, the Term shall be automatically extended beyond the date of termination or
expiration and this Lease shall remain in full force and effect beyond such date until the earlier to
occur of(i)the completion of all remedial action in accordance with applicable Environmental
Laws or(ii) the date specified in a written notice from Landlord to Tenant terminating this Lease.
(f) If Tenant fails to correct any Environmental Violation which occurs or is
found to exist,Landlord shall have the right(but no obligation)to take any and all actions as
Landlord shall deem necessary or advisable in order to cure such Environmental Violation.
(g) Tenant shall notify Landlord immediately after becoming aware of any
Environmental Violation(or alleged Environmental Violation) or noncompliance with any of the
covenants contained in this Paragraph 10 and shall forward to Landlord immediately upon receipt
thereof copies of all orders, reports, notices,permits, applications or other communications relating
to any such violation or noncompliance.
(h) All future leases, subleases or concession agreements relating to the
Leased Premises entered into by Tenant shall contain covenants of the other party not to at any time
(i) cause any Environmental Violation to occur or(ii) permit any Person occupying the Leased
Premises through said subtenant or concessionaire to cause any Environmental Violation to occur
(i) Notwithstanding any other provision of this Lease to the contrary, the
mere presence of customary quantities of Hazardous Substances at the Leased Premises of the types
reasonably necessary in light of the nature of Tenant's business operations at the Leased Premises
shall not by itself constitute a breach of this Paragraph 10 or a default under this Lease so long as
same are used, stored, handled and disposed of in accordance with all applicable Environmental
Laws.
11. Liens; Recording.
(a) Tenant shall not, directly or indirectly, create or permit to be created or to
remain and shall promptly discharge or remove any lien, levy or encumbrance on any of the Leased
Premises or on any Rent or any other sums payable by Tenant under this Lease, other than any
Mortgage or Assignment, the Permitted Encumbrances and any mortgage, lien, encumbrance or
other charge created by or resulting solely from any act or omission of Landlord. NOTICE IS
HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR,
SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO
ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR
UNDER TENANT, AND THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH
LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF
LANDLORD IN AND TO ANY OF THE LEASED PREMISES. LANDLORD MAY AT ANY
TIME, AND AT LANDLORD'S REQUEST TENANT SHALL PROMPTLY, POST ANY
14
NYLI B-069448.14JMMARG E R
NOTICES ON THE LEASED PREMISES REGARDING SUCH NON-LIABILITY OF
LANDLORD.
(b) Tenant shall execute, deliver and record, file or register(collectively,
"record") all such instruments as may be required or permitted by any present or future Law in order
to evidence the respective interests of Landlord and Tenant in the Leased Premises, and shall cause a
memorandum of this Lease (or, if such a memorandum cannot be recorded, this Lease), and any
supplement hereto or thereto, to be recorded in such manner and in such places as may be required
or permitted by any present or future Law in order to protect the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain the Leased Premises in as good repair
and appearance as they are in on the date hereof and fit to be used for their intended use in
accordance with the better of(i) the practices generally recognized as then acceptable by other
companies in its industry or(ii) observed by Tenant with respect to the other real properties owned
or operated by it, and, in the case of the Equipment, in as good mechanical condition as it was on the
later of the date hereof or the date of its installation, except for ordinary wear and tear excepted.
Tenant shall take every other action necessary or appropriate for the preservation and safety of the
Leased Premises. Tenant shall promptly make all Alterations of every kind and nature,whether
foreseen or unforeseen, which may be required to comply with the foregoing requirements of this
Paragraph 12(a). Landlord shall not be required to make any Alteration, whether foreseen or
unforeseen, or to maintain any of the Leased Premises in any way, and Tenant hereby expressly
waives any right which may be provided for in any Law now or hereafter in effect to make
Alterations at the expense of Landlord or to require Landlord to make Alterations. Any Alteration
made by Tenant pursuant to this Paragraph 12 shall be made in conformity with the provisions of
Paragraph 13.
(b) If any Improvement, now or hereafter constructed, shall (i) encroach upon
any setback or any property, street or right-of-way adjoining the Leased Premises, (ii) violate the
provisions of any restrictive covenant affecting the Leased Premises, (iii) hinder or obstruct any
easement or right-of-way to which any of the Leased Premises is subject or (iv) impair the rights of
others in, to or under any of the foregoing, Tenant shall, promptly after receiving notice or otherwise
acquiring knowledge thereof, either(A) obtain from all necessary parties waivers or settlements of
all claims, liabilities and damages resulting from each such encroachment, violation, hindrance,
obstruction or impairment, whether the same shall affect Landlord, Tenant or both, or(B)take such
action as shall be necessary to remove all such encroachments, hindrances or obstructions and to end
all such violations or impairments, including, if necessary, making Alterations.
13. Alterations and Improvements.
(a) Tenant shall have the right, without having obtained the prior written
consent of Landlord and Lender and provided that no Event of Default then exists, (i) to make non-
structural Alterations or a series of related non-structural Alterations that, as to any such Alterations
or series of related Alterations, do not cost in excess of$100,000.00 and (ii) to install Equipment in
the Improvements or accessions to the Equipment that, as to such Equipment or accessions, do not
cost in excess of$100,000.00, so long as at the time of construction or installation of any such
Equipment or Alterations the value and utility of the Leased Premises is not diminished thereby. If
the cost of any non structural Alterations, series of related non-structural Alterations, Equipment or
accessions thereto is in excess of$100,000.00 the prior written approval of Landlord and Lender
shall be required or if Tenant desires to make structural Alterations to the Leased Premises ,which
approval shall not be unreasonably withheld or delayed. Tenant shall not construct upon the Land
any additional buildings without having first obtained the prior written consent of Landlord and
Lender in their sole discretion. Landlord shall have the right to require Tenant to remove any
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Alterations except for those Alterations required by Law or for which Landlord has agreed in writing
that removal will not be required.
(b) If Tenant makes any Alterations pursuant to this Paragraph 13 or as
required by Paragraph 12 or 17 (such Alterations and actions being hereinafter collectively referred
to as "Work")whether or not Landlord's consent is required, then (i)the market value of the Leased
Premises shall not be lessened by any such Work or its usefulness impaired, (ii) all such Work shall
be performed by Tenant in a good and workmanlike manner, (iii) all such Work shall be
expeditiously completed in compliance with all Legal Requirements, (iv) all such Work shall comply
with the Insurance Requirements, (v) if any such Work involves the replacement of Equipment or
parts thereto, all replacement Equipment or parts shall have a value and useful life equal to the
greater of(A)the value and useful life on the date hereof of the Equipment being replaced or(B)the
value and useful life of the Equipment being replaced immediately prior to the occurrence of the
event which required its replacement(assuming such replaced Equipment was then in the condition
required by this Lease), (vi)Tenant shall promptly discharge or remove all liens filed against any of
the Leased Premises arising out of such Work, (vii)Tenant shall procure and pay for all permits and
licenses required in connection with any such Work, (viii) all such Work shall be the property of
Landlord and shall be subject to this Lease, and Tenant shall execute and deliver to Landlord any
document reasonably requested by Landlord evidencing the assignment to Landlord of all estate,
right, title and interest (other than the leasehold estate created hereby) of Tenant or any other Person
thereto or therein, and (ix) Tenant shall comply, to the extent requested by Landlord or required by
this Lease, with the provisions of Paragraphs 12(a) and 19(a), whether or not such Work involves
restoration of the Leased Premises.
14. Permitted Contests. Notwithstanding any other provision of this Lease,
Tenant shall not be required to (a)pay any Imposition, (b) comply with any Legal Requirement,
(c)discharge or remove any lien referred to in Paragraph 11 or 13 or(d)take any action with respect
to any encroachment, violation, hindrance, obstruction or impairment referred to in Paragraph 12(b)
(such non-compliance with the terms hereof being hereinafter referred to collectively as "Permitted
Violations") and may dispute or contest the same, so long as at the time of such contest no Event of
Default exists and so long as Tenant shall contest, in good faith,the existence, amount or validity
thereof, the amount of the damages caused thereby, or the extent of its or Landlord's liability therefor
by appropriate proceedings which shall operate during the pendency thereof to prevent or stay (i)the
collection of, or other realization upon,the Permitted Violation so contested, (ii)the sale, forfeiture
or loss of any of the Leased Premises or any Rent to satisfy or to pay any damages caused by any
Permitted Violation, (iii)any interference with the use or occupancy of any of the Leased Premises,
(iv) any interference with the payment of any Rent, or(v)the cancellation or increase in the rate of
any insurance policy or a statement by the carrier that coverage will be denied or(vi)the
enforcement or execution of any injunction, order or Legal Requirement with respect to the
Permitted Violation. Tenant shall provide Landlord security which is satisfactory, in Landlord's
reasonable judgment, to assure that such Permitted Violation is corrected, including all Costs,
interest and penalties that may be incurred or become due in connection therewith. While any
proceedings which comply with the requirements of this Paragraph 14 are pending and the required
security is held by Landlord, Landlord shall not have the right to correct any Permitted Violation
thereby being contested unless Landlord is required by law to correct such Permitted Violation and
Tenant's contest does not prevent or stay such requirement as to Landlord. Each such contest shall
be promptly and diligently prosecuted by Tenant to a final conclusion, except that Tenant, so long as
the conditions of this Paragraph 14 are at all times complied with, has the right to attempt to settle or
compromise such contest through negotiations. Tenant shall pay any and all losses,judgments,
decrees and Costs in connection with any such contest and shall,promptly after the final
determination of such contest, fully pay and discharge the amounts which shall be levied, assessed,
charged or imposed or be determined to be payable therein or in connection therewith,together with
all penalties, fines, interest and Costs thereof or in connection therewith, and perform all acts the
performance of which shall be ordered or decreed as a result thereof. No such contest shall subject
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Landlord to the risk of any civil or criminal liability. All contest rights of Tenant hereunder are
subject to the terms of the Airport Ground Lease and any rights or obligations of the lessor
thereunder.
15. Indemnification.
(a) Tenant shall pay,protect, indemnify, defend, save and hold harmless
Landlord, Lender and all other Persons described in Paragraph 30 (each an "Indemnitee") from and
against any and all liabilities, losses, damages (including punitive damages), penalties, Costs
(including attorneys' fees and costs), causes of action, suits, claims, demands or judgments of any
nature whatsoever, howsoever caused, without regard to the form of action and whether based on
strict liability,negligence (including the negligence of an Indemnitee) or any other theory of
recovery at law or in equity (any of the foregoing, a"Claim") arising from (i) any matter pertaining
to the acquisition (or the negotiations leading thereto), ownership, use, non-use, occupancy,
operation, condition, design, construction, maintenance, repair or restoration of the Leased Premises,
(ii) any casualty in any manner arising from the Leased Premises, whether or not Indemnitee has or
should have knowledge or notice of any defect or condition causing or contributing to said casualty,
(iii) any violation by Tenant of any provision of this Lease or the Airport Ground Lease, any contract
or agreement to which Tenant is a party, any Legal Requirement or any Permitted Encumbrance or
any encumbrance Tenant consented to or the Mortgage or Assignment or (iv) any alleged, threatened
or actual Environmental Violation, including(A) liability for response costs and for costs of removal
and remedial action incurred by the United States Government, any state or local governmental unit
or any other Person, or damages from injury to or destruction or loss of natural resources, including
the reasonable costs of assessing such injury, destruction or loss, incurred pursuant to Section 107 of
CERCLA, or any successor section or act or provision of any similar state or local Law, (B) liability
for costs and expenses of abatement, correction or clean-up, fines, damages, response costs or
penalties which arise from the provisions of any of the other Environmental Laws and(C) liability
for personal injury or property damage arising under any statutory or common-law tort theory,
including damages assessed for the maintenance of a public or private nuisance or for carrying on of
a dangerous activity; provided that, the foregoing indemnities by Tenant shall not apply to any Claim
arising from the grossly negligent acts (but not omissions or alleged omissions) or willful
misconduct of Landlord or the applicable Indemnitee.
(b) In case any action or proceeding is brought against any Indemnitee by
reason of any Claim subject to indemnification as set forth above, (i) Tenant may, except in the
event of a conflict of interest or a dispute between Tenant and any such Indemnitee or during the
continuance of an Event of Default, retain its own counsel and defend such action(it being
understood that Landlord may employ counsel of its choice to monitor the defense of any such
action, the cost of which shall be paid by Tenant) and (ii) such Indemnitee shall notify Tenant to
resist or defend such action or proceeding by retaining counsel reasonably satisfactory to such
Indemnitee, and such Indemnitee will cooperate and assist in the defense of such action or
proceeding if reasonably requested so to do by Tenant. In the event of a conflict of interest or
dispute or during the continuance of an Event of Default, Landlord shall have the right to select
counsel, and the cost of such counsel shall by paid by Tenant.
(c) The obligations of Tenant under this Paragraph 15 shall survive any
termination, expiration or rejection in bankruptcy of this Lease.
THE INDEMNITY SET FORTH IN THIS SECTION 15 SHALL NOT BE IMPAIRED
OR AFFECTED BY NEGLIGENCE ON THE PART OF LANDLORD OR ANYONE
ACTING ON BEHALF OF LANDLORD. IT IS EXPRESSLY AGREED AND
UNDERSTOOD THAT THIS LEASE INCLUDES INDEMNIFICATION PROVISIONS
WHICH IN CERTAIN CIRCUMSTANCES COULD INCLUDE AN
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INDEMNIFICATION BY TENANT OF LANDLORD FROM CLAIMS OR LOSSES
ARISING AS A RESULT OF LANDLORD'S OWN NEGLIGENCE.
16. Insurance.
(a) Tenant shall obtain,pay for and maintain the following insurance on or in
connection with the Leased Premises:
(i) Insurance against all risk of physical loss or damage to the
Improvements and Equipment as provided under"Special Causes of Loss" form coverage,
and including customarily excluded perils of hail,windstorm, flood coverage (only if the
Leased Premises is located within a flood zone) and earthquake (only if the Leased Premises
is located in a high probability of damage Seismic Zone) in amounts no less than ninety
percent(90%) of the actual replacement cost of the Improvements and Equipment; provided
that, if Tenant's insurance company is unable or unwilling to include any of all of such
excluded perils, Tenant shall have the option of purchasing coverage against such perils from
another insurer on a"Difference in Conditions"form or through a stand-alone policy. Such
policies shall contain Replacement Cost and Agreed Amount Endorsements and"Law and
Ordinance"coverage (at full replacement cost). Such policies and endorsements shall
contain deductibles not more than $50,000 per occurrence.
(ii) Commercial General Liability Insurance and Business
Automobile Liability Insurance (including Non-Owned and Hired Automobile Liability)
against claims for personal and bodily injury, death or property damage occurring on, in or as
a result of the use of the Leased Premises, in an amount not less than $5,000,000 per
occurrence/annual aggregate, with no self-insured retention or deductible, on a claims
occurrence basis.
(iii)Workers' compensation insurance in the amount required
by applicable Law and employers' liability insurance covering all persons employed by
Tenant in connection with any work done on or about any of the Leased Premises.
(iv)Boiler and Machinery/Equipment Breakdown Insurance on
any of the Equipment, in an amount not less than $5,000,000 per accident for damage to
property(and which may be carried as part of the coverage required under clause (i) above or
pursuant to a separate policy or endorsement). Either such Boiler and Machinery policy or
the Special Causes of Loss policy required in clause (i) above shall include at least$250,000
per incidence for Off-Premises Service Interruption, Expediting Expenses, Ammonia
Contamination, and Hazardous Materials Clean-Up Expense and may contain a deductible
not to exceed $50,000.
(v) Business Income/Extra Expense Insurance at limits
sufficient to cover 100% of the period of indemnity not less than twelve(12) months from
time of loss, including extended period of indemnity which provides that after the physical
loss to the Improvements and Equipment has been repaired,the continued loss of income will
be insured until such income either returns to the same level it was at prior to the loss, or the
expiration of six (6) months from the date that the Leased Premises are repaired or replaced
and operations are resumed, whichever first occurs.
(vi)During any period in which substantial Alterations at the
Leased Premises are being undertaken, builder's risk insurance covering the total completed
value, including all hard and soft costs (which shall include business interruption coverage),
unless already covered under Paragraphs 16(a)(i),(iv) and (v) above, with respect to the
Improvements being constructed, altered or repaired (on a completed value, non-reporting
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NYLIB-469448.I O-JMMARGE R
basis),replacement cost of work performed and equipment, supplies and materials furnished
in connection with such construction, alteration or repair of Improvements or Equipment,
together with such other endorsements as Landlord may reasonably require including
maintaining the same types and levels of coverage required for the then existing
Improvements such as general liability, worker's compensation and automobile liability
insurance with respect to the Improvements being constructed, altered or repaired.
(vii) Such other insurance (or other or different terms
with respect to any insurance required pursuant to this Paragraph 16, including without
limitation amounts of coverage, deductibles, form of mortgagee clause, insurer rating) on or
in connection with any of the Leased Premises as is now or hereafter required under the
Airport Ground Lease, and/or Landlord or Lender may reasonably require (including,
without limitation mold and terrorism insurance); provided that such insurance is available to
Tenant on a commercially reasonable basis and is consistent, as to types of coverage and
amounts, with the requirements generally of institutional lenders or prudent owners or
operators of similar properties.
(b) The insurance required by Paragraph 16(a) shall be written by companies
having a Best's rating of A:X or above and a claims paying ability rating of AA or better by Standard
& Poor's Rating Services, a division of the McGraw Hill Companies, Inc., or an equivalent rating
and equivalent rating agency approved by Landlord and Lender in their reasonable discretion, and
are authorized to write insurance policies by, the State Insurance Department(or its equivalent) for
the State. The insurance policies (i) shall be for such terms as Landlord may reasonably approve and
(ii) shall be in amounts sufficient at all times to satisfy any coinsurance requirements thereof. If said
insurance or any part thereof shall expire, be withdrawn, become void, voidable, unreliable or unsafe
for any reason, including a breach of any condition thereof by Tenant or the failure or impairment of
the capital of any insurer, or if for any other reason whatsoever said insurance shall become
reasonably unsatisfactory to Landlord, Tenant shall immediately obtain new or additional insurance
reasonably satisfactory to Landlord. The insurance referred to in Paragraphs 16(a)(i), 16(a)(iv) and
16(a)(vi) shall name Landlord as owner and Lender as loss payee and Tenant as its interest may
appear. The insurance referred to in Paragraph 16(a)(ii) shall name Landlord and Lender as
additional insureds, and the insurance referred to in Paragraph 16(a)(v) shall name Landlord as
insured and Lender and Landlord as loss payee. All insurance referred to in this Paragraph 16 shall
name the Lessor under the Airport Ground Lease (and such other Persons as required thereunder) as
additional insureds as and when required to comply with the terms of the Airport Ground Lease.
(c) Each insurance policy referred to in clauses (i), (iv), (v) and (vi)of
Paragraph 16(a) shall contain standard non-contributory mortgagee clauses in favor of and
acceptable to Lender. Each policy required by any provision of Paragraph 16(a), except clause (iii)
thereof, shall provide that it may not be cancelled, substantially modified or allowed to lapse on any
renewal date except after at least thirty (30) days' prior written notice to Landlord and Lender, except
that only ten (10) days prior written notice shall be required with respect to a cancellation due to
non-payment of premium.
(d) Tenant shall pay as they become due all premiums for the insurance
required by Paragraph 16(a), shall renew or replace each policy and deliver to Landlord evidence of
the payment of the full premium therefor or installment then due at least ten (10) days prior to the
expiration date of such policy, and shall promptly deliver to Landlord all original certificates of
insurance evidencing such coverages or, if required by Lender, original or certified policies. All
certificates of insurance (including liability coverage)provided to Landlord and Lender shall be on
ACORD Form 28 or its equivalent.
(e) Anything in this Paragraph 16 to the contrary notwithstanding, any
insurance which Tenant is required to obtain pursuant to Paragraph 16(a) may be carried under a
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NYL I BA69448.10.J MMAR GE R
"blanket"policy or policies covering other properties of Tenant or under an "umbrella"policy or
policies covering other liabilities of Tenant, as applicable; provided that, such blanket or umbrella
policy or policies otherwise comply with the provisions of this Paragraph 16, and upon request,
Tenant shall provide to Landlord a Statement of Values which may be reviewed annually and shall
be amended to the extent determined necessary by Landlord based on revised Replacement Cost
Valuations. The original or a certified copy of each such blanket or umbrella policy shall promptly
be delivered to Landlord.
(f) Tenant shall not carry separate insurance concurrent in form or
contributing in the event of a Casualty with that required in this Paragraph 16 unless (i) Landlord
and Lender are included therein as named insureds, with loss payable as provided herein, and
(ii) such separate insurance complies with the other provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such separate insurance and shall deliver to Landlord the original
policies or certified copies thereof.
(g) Each policy shall contain an effective waiver by the carrier against all
claims for payment of insurance premiums against Landlord and shall contain a full waiver of
subrogation against the Landlord.
(h) The proceeds of any insurance required under Paragraph 16(a) shall be
payable as follows:
(i) proceeds payable under clauses (ii), (iii) and (iv) of
Paragraph 16(a) and proceeds attributable to the general liability coverage of Builder's Risk
insurance under clause (vi) of Paragraph 16(a) shall be payable to the Person entitled to
receive such proceeds; and
(ii) proceeds of insurance required under clause (i) of
Paragraph 16(a) and proceeds attributable to Builder's Risk insurance (other than its general
liability coverage provisions) under clause (vi) of Paragraph 16(a) shall be payable to
Landlord or Lender and applied as set forth in Paragraph 17 or, if applicable, Paragraph 18.
Tenant shall apply the Net Award to restoration of the Leased Premises in accordance with
the applicable provisions of this Lease unless a Termination Event shall have occurred and
Tenant has given a Termination Notice.
17. Casualty and Condemnation.
(a) If any Casualty to the Leased Premises occurs, Tenant shall give Landlord
and Lender immediate notice thereof. Landlord and Lender are hereby authorized to adjust, collect
and compromise, in their discretion and upon notice to Tenant (except that no notice to Tenant shall
be required if an Event of Default has occurred and is continuing), all claims under any of the
insurance policies required by Paragraph 16(a) (except public liability insurance claims payable to a
Person other than Tenant, Landlord or Lender and/or claims with respect to personal property of
Tenant not constituting a part of the Equipment or other wise payable to Tenant or other Person that
is unrelated to the Leased Premises) and to execute and deliver on behalf of Tenant all necessary
proofs of loss, receipts, vouchers and releases required by the insurers. Provided that no Event of
Default has occurred and is continuing, Tenant shall be entitled to participate with Landlord and
Lender in any adjustment, collection and compromise of the Net Award payable in connection with a
Casualty. Tenant agrees to sign, upon the request of Landlord and Lender, all such proofs of loss,
receipts, vouchers and releases. If Landlord or Lender so requests, Tenant shall adjust, collect and
compromise any and all such claims, and Landlord and Lender shall have the right to join with
Tenant therein. Any adjustment, settlement or compromise of any such claim shall be subject to the
prior written approval of Landlord and Lender, and Landlord and Lender shall have the right to
prosecute or contest, or to require Tenant to prosecute or contest, any such claim, adjustment,
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N Y L I B-469448.14 J M M A R G E R
settlement or compromise. Each insurer is hereby authorized and directed to make payment under
said policies, including return or unearned premiums, directly to Landlord or, if required by the
Mortgage, to Lender instead of to Landlord and Tenant jointly. The rights of Landlord under this
Paragraph 17(a) shall be extended to Lender if and to the extent that any Mortgage so provides.
(b) Tenant, immediately upon receiving a notice of(otherwise having
knowledge of the institution of(or threatened institution of) a Condemnation, shall notify Landlord
and Lender thereof. Landlord and Lender are authorized to collect, settle and compromise, in their
discretion (and, if no Event of Default exists, upon notice to Tenant),the amount of any Net Award.
Provided that no Event of Default has occurred and is continuing, Tenant shall be entitled to
participate with Landlord and Lender in any Condemnation proceeding or negotiations under threat
thereof and to contest the Condemnation or the amount of the Net Award therefor. No agreement
with any condemnor in settlement or under threat of any Condemnation shall be made by Tenant
without the written consent of Landlord and Lender. Subject to the provisions of this
Paragraph 17(b), Tenant hereby irrevocably assigns to Landlord any award or payment to which
Tenant is or may be entitled by reason of any Condemnation, whether the same shall be paid or
payable for Tenant's leasehold interest hereunder or otherwise; but nothing in this Lease shall impair
Tenant's right to any award or payment on account of Tenant's trade fixtures, equipment or other
tangible property which is not part of the Equipment, moving expenses or loss of business, if
available,to the extent that and so long as (i)Tenant shall have the right to make, and does make, a
separate claim therefor against the condemnor and(ii) such claim does not in any way reduce either
the amount of the award otherwise payable to Landlord for the Condemnation of Landlord's fee
interest in the Leased Premises or the amount of the award(if any) otherwise payable for the
Condemnation of Tenant's leasehold interest hereunder. The rights of Landlord under this
Paragraph 17(b) shall also be extended to Lender if and to the extent that any Mortgage so provides.
(c) If any Partial Casualty (whether or not insured against) or Partial
Condemnation shall occur,this Lease shall continue with respect to such Related Premises,
notwithstanding such event, and there shall be no abatement or reduction of any Monetary
Obligations. Promptly after such Partial Casualty or Partial Condemnation, Tenant, as required in
Paragraphs 12(a) and 13(b), shall commence and diligently continue to restore the Leased Premises
as nearly as possible to its value, condition and character immediately prior to such event(assuming
the Leased Premises to have been in the condition required by this Lease). So long as no Event of
Default exists, any Net Award up to and including $100,000.00 shall be paid by Landlord to Tenant
and Tenant shall restore the Leased Premises in accordance with the requirements of
Paragraphs 12(a) and 13(b) of this Lease, and any balance shall promptly be refunded to Landlord.
Any Net Award in excess of$100,000.00 shall (unless such Casualty or Condemnation resulting in
the Net Award is a Termination Event)be made available by Landlord (or Lender, if required by the
terms of any Mortgage)to Tenant for the restoration of any of the Leased Premises pursuant to and
in accordance with the provisions of Paragraph 19 hereof. If any Casualty or Condemnation which
is not a Partial Casualty or Partial Condemnation shall occur, Tenant shall comply with the terms
and conditions of Paragraph 18.
(d) In the event of a Requisition of any of the Leased Premises, if any Net
Award payable by reason of such Requisition is (i)retained by Landlord, each installment of Basic
Rent payable on or after the date on which the Net Award is paid to Landlord shall be reduced by an
amount resulting from the multiplication of such installment of the Basic Rent by a fraction, the
denominator of which shall be the total amount of all Basic Rent due from such date to and including
the last Basic Rent Payment Date for the then existing Term and the numerator of which shall be the
amount of such Net Award retained by Landlord, or(ii)paid to Lender, then each installment of
Basic Rent thereafter payable shall be reduced in the same amount and for the same period as
payments are reduced under the Note until such Net Award has been applied in full or until the Term
has expired, whichever occurs first. Upon the expiration of the Term, any portion of such Net
Award which shall not have been previously credited to Tenant shall be retained by Landlord.
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N Y L 18-069448.10-J M MA R G E R
18. Termination Events.
(a) If(i) the entire Leased Premises shall be taken by a Taking, or(ii) any
substantial portion of the Leased Premises shall be taken by a Taking such that Tenant determines in
good faith that the continued operation of Tenant's business thereat is economically impracticable
despite good faith efforts to plan a restoration or reconfigure the remaining Leased Premises, or(iii)
all or any substantial portion of the Leased Premises shall be damaged or destroyed by a Casualty
and, in such case, Tenant certifies and covenants to Landlord that it will forever abandon operations
at the Leased Premises (each of the events described in the above clauses (i), (ii) and (iii) shall
hereinafter be referred to as a"Termination Event"), then(x) in the case of(i) above, Tenant shall be
obligated, within thirty (30) days after Tenant receives a Condemnation Notice and (y) in the case
of(ii) or(iii) above, Tenant shall have the option, within thirty (30) days after Tenant receives a
Condemnation Notice or thirty (30) days after the Casualty, as the case may be, to give to Landlord
written notice in the form described in Paragraph 18(b) of the Tenant's election to terminate this
Lease (a"Termination Notice"). If Tenant elects under clause (y) above not to give Landlord a
Termination Notice, then Tenant shall rebuild or repair the Leased Premises in accordance with
Paragraphs 17 and 19.
(b) A Termination Notice shall contain (1) notice of Tenant's intention to
terminate this Lease on the first Basic Rent Payment Date which occurs at least sixty (60) days after
the Fair Market Value Date (the "Termination Date"), (2) a binding and irrevocable offer of Tenant
to pay to Landlord the Termination Amount and (3) if(A)the Termination Event is an event
described in Paragraph 18(a)(ii) a reasonable showing of Tenant's good faith efforts and the
impracticability of continuing Tenant's operations at the Leased Premises or (B) if the Termination
Event is an event described in Paragraph 18(a)(iii),the certification and covenants described therein
and a certified resolution of the Board of Directors of Tenant authorizing the same. Promptly upon
the delivery to Landlord of a Termination Notice, Landlord and Tenant shall commence to determine
the Fair Market Value.
(c) If Landlord shall reject such offer by Tenant to pay to Landlord the
Termination Amount pursuant to Paragraph 18(b) above by written notice to Tenant(a"Rejection"),
which Rejection shall contain the written consent of Lender to Landlord's rejection of Tenant's offer
to pay the Termination Amount, not later than thirty (30) days following the Fair Market Value Date,
then this Lease shall terminate on the Termination Date; provided that, if Tenant has not satisfied all
Monetary Obligations and all other obligations and liabilities under this Lease which have arisen on
or prior to the Termination Date (collectively, "Remaining_Obligations") on the Termination Date,
then Landlord may, at its option, extend the date on which this Lease may terminate to a date which
is no later than the first Basic Rent Payment Date after the Termination Date on which Tenant has
satisfied all Remaining Obligations. Upon such termination (i) all obligations of Tenant hereunder
shall terminate except for any Surviving Obligations, (ii) Tenant shall immediately vacate and shall
have no further right,title or interest in or to any of the Leased Premises and (iii) the Net Award
shall be retained by Landlord. Notwithstanding anything to the contrary hereinabove contained, if
Tenant shall have received a Rejection and, on the date when this Lease would otherwise terminate,
Landlord shall not have received the full amount of the Net Award payable by reason of the
applicable Termination Event,then the date on which this Lease is to terminate shall be
automatically extended to the first Basic Rent Payment Date after the receipt by Landlord of the full
amount of the Net Award provided that, if Tenant has not satisfied all Remaining Obligations on
such date, then Landlord may, at its option, extend the date on which this Lease may terminate to a
date which is no later than the first Basic Rent Payment Date after such date on which Tenant has
satisfied all such Remaining Obligations.
(d) Unless Tenant shall have received a Rejection not later than the
thirtieth (30th) day following the Fair Market Value Date, Landlord shall be conclusively presumed
to have accepted such offer from Tenant to pay the Termination Amount. If such offer from Tenant
22
NY L I B A69448.10-J M MA R G E R
to pay the Termination Amount is accepted by Landlord then, on the Termination Date, Tenant shall
pay to Landlord the Termination Amount and all Remaining Obligations and, if requested by Tenant,
Landlord shall (i)convey to Tenant the Leased Premises or the remaining portion thereof, if any, and
(ii)pay to or assign to Tenant Landlord's entire interest in and to the Net Award, all in accordance
with Paragraph 20. The acceptance of such offer by Landlord and the conveyance of Landlord's
interest as lessee under the Airport Ground Lease to Tenant shall be subject to the approval and
consent of the lessor under the Airport Ground Lease to such conveyance and Tenant as the
successor lessee under Airport Ground Lease.
19. Restoration.
(a) If any Net Award is in excess of$100,000.00, then Landlord (or Lender if
required by any Mortgage) shall hold the entire Net Award in a fund(the "Restoration Fund") and
disburse amounts from the Restoration Fund only in accordance with the following conditions:
(i) prior to commencement of restoration, (A)the architects,
contracts, contractors, plans and specifications and a budget for the restoration shall have
been approved by Landlord, (B) Landlord and Lender shall be provided with mechanics' lien
insurance (if requested in writing and available) and acceptable performance and payment
bonds which insure satisfactory completion of and payment for the restoration, are in an
amount and form and have a surety acceptable to Landlord, and name Landlord and Lender
as additional dual obligees, and (C)to the extent permitted by applicable Laws appropriate
waivers of mechanics' and materialmen's liens shall have been obtained or filed;
(ii) at the time of any disbursement, no Event of Default shall
exist and no mechanics' or materialmen's liens shall have been filed against any of the Leased
Premises and remain undischarged or otherwise removed of record (by bond or otherwise);
(iii)disbursements shall be made from time to time in an
amount not exceeding the cost of the Work completed since the last disbursement, upon
receipt of(A) satisfactory evidence, including architects' certificates, of the stage of
completion, the estimated total cost of completion and performance of the Work to date in a
good and workmanlike manner in accordance with the contracts, plans and specifications,
(B) waivers of liens, (C) contractors' and subcontractors' sworn statements as to completed
Work and the cost thereof for which payment is requested, (D) a satisfactory bringdown of
title insurance and(E) other evidence of cost and payment so that Landlord can verify that
the amounts disbursed from time to time are represented by Work that is completed, in place
and free and clear of mechanics' and materialmen's lien claims;
(iv)each request for disbursement shall be accompanied by a
certificate of Tenant, signed by the president or a vice president of Tenant, describing the
Work for which payment is requested, stating the cost incurred in connection therewith,
stating that Tenant has not previously received payment for such Work and, upon completion
of the Work, also stating that the Work has been fully completed and complies with the
applicable requirements of this Lease;
(v) Landlord may retain ten percent (10%)of the Restoration
Fund until the Work is fully completed ;
(vi)if the Restoration Fund is held by Landlord, the Restoration
Fund shall not be commingled with Landlord's other funds and shall bear interest at a rate
agreed to by Landlord and Tenant; and
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N Y L I B-469448.14 J M M A R G E R
(vii) such other reasonable conditions as Landlord or
Lender may impose or as are required under the terms of the Airport Ground Lease.
(b) Prior to commencement of restoration and at any time during restoration,
if the estimated cost of completing the restoration Work free and clear of all liens, as determined by
Landlord, exceeds the amount of the Net Award available for such restoration,the amount of such
excess shall, upon demand by Landlord, be deposited by Tenant with Landlord to be added to the
Restoration Fund(or Landlord, at its option, may allow Tenant expend it own funds an amount equal
to such deficiency towards such restoration without requiring such funds to be so deposited prior to
the advance of any amounts, or any further amounts, as the case may be, by Landlord from the
Restoration Fund) . Any sum so added by Tenant which remains in the Restoration Fund upon
completion of restoration shall be refunded to Tenant together with any interest earned thereon and
not used for restoration). For purposes of determining the source of funds with respect to the
disposition of funds remaining after the completion of restoration, the Net Award shall be deemed to
be disbursed prior to any amount added by Tenant.
(c) If any sum remains in the Restoration Fund after completion of the Work
and any refund to Tenant pursuant to Paragraph 19(b), such sum shall be retained by Landlord or, if
required by a Note or Mortgage,paid by Landlord to a Lender.
20. Procedures Upon Purchase.
a If the Leased Premises is purchased by Tenant pursuant to any provision
of this Lease, Landlord not convey any better title thereto than that which was conveyed to
Landlord, and Tenant shall accept such title, subject.,however to the Permitted Encumbrances and to
all other liens, exceptions and restrictions on, against or relating fo any-of the Leased Premises and
to all applicable Laws, but free of the lien of and security interest created by any Mortgage or
Assignment and liens, exceptions and restrictions on, against or relating to the Leased Premises
which have been created by or resulted solely from acts of Landlord after the date of this Lease,
unless the same are Permitted Encumbrances or customary utility easements benefiting the Leased
Premises or were created with the concurrence of Tenant or as a result of a default by Tenant under
this Lease.
(b) Upon the date fixed for any such purchase of the Leased Premises
pursuant to any provision of this Lease (any such date the"Purchase Date"), Tenant shall pay to
Landlord, or to any Person to whom Landlord directs payment, the Relevant Amount therefor
specified herein, in Federal Funds, less any credit of the Net Award received and retained by
Landlord or a Lender allowed against the Relevant Amount, and Landlord shall deliver to Tenant
(i) a special warranty deed which describes the premises being conveyed and conveys the title
thereto as provided in Paragraph 20(a), (ii) such other instruments as shall be necessary to transfer to
Tenant or its designee any other property (or rights to any Net Award not yet received by Landlord
or a Lender)then required to be sold by Landlord to Tenant pursuant to this Lease and(iii) any Net
Award received by Landlord, not credited to Tenant against the Relevant Amount and required to be
delivered by Landlord to Tenant pursuant to this Lease; provided, that if any Monetary Obligations
remain outstanding on such date,then Landlord may deduct from the Net Award the amount of such
Monetary Obligations; and further provided,that if any event has occurred which, in Landlord's
reasonable judgment, is likely to subject any Indemnitee to any liability which Tenant is required to
indemnify against pursuant to Paragraph 15, then an amount shall be deducted from the Net Award
which, in Landlord's reasonable judgment, is sufficient to satisfy such liability, which amount shall
be deposited in an escrow account with a financial institution reasonably satisfactory to Landlord
and Tenant pending resolution of such matter. If on the Purchase Date any Monetary Obligations
remain outstanding and no Net Award is payable to Tenant by Landlord or the amount of such Net
Award is less than the amount of the Monetary Obligations, then Tenant shall pay to Landlord on the
Purchase Date the amount of such Monetary Obligations. Upon the completion of such purchase,
24
N Y L I B-469448.104 M M A R G E R
this Lease and all obligations and liabilities of Tenant hereunder shall terminate, except any
Surviving Obligations.
(c) If the completion of such purchase shall be delayed after (i)the
Termination Date, in the event of a purchase pursuant to Paragraph 18 or, (ii)the date scheduled for
such purchase, in the event of a purchase under any other provision of this Lease then (x)Rent shall
continue to be due and payable until completion of such purchase and (y) at Landlord's sole option,
Fair Market Value shall be redetermined and the Relevant Amount payable by Tenant pursuant to
the applicable provision of this Lease shall be adjusted to reflect such redetermination.
(d) Any prepaid Monetary Obligations paid to Landlord shall be prorated as
of the Purchase Date, and the prorated unapplied balance shall be deducted from the Relevant
Amount due to Landlord; provided,that no apportionment of any Impositions shall be made upon
any such purchase.
21. Assignment and Subletting, Prohibition Against Leasehold Financing
(a) Except as otherwise expressly provided to the contrary in this Paragraph
21, Tenant may not assign this Lease, voluntarily or involuntarily, whether by operation of law or
otherwise (including through merger or consolidation)to any Person other than to a Person which is
and continues throughout the Term to be a wholly-owned subsidiary of Tenant or a Credit Entity
without the prior written consent of Landlord, which consent may be granted or withheld by
Landlord in accordance with the provisions of Paragraphs 21(b)below, as applicable, and subject, in
each case,to the provisions of Paragraphs 210) and 21(k)below. Any purported sublease or
assignment in violation of this Paragraph 21 (including any transaction in violation of the provisions
of Paragraphs 210) or 21(k)below) shall be null and void. In addition, notwithstanding anything to
the contrary contained in this Paragraph 21, Tenant shall not have the right to assign this Lease
(voluntarily or involuntarily, whether by operation of law or otherwise), or sublet any of the Leased
Premises to any Person at any time that an Event of Default exists or in any manner that violates the
terms of the Airport Ground Lease (including, but not limited to, abiding by the "Sponsor's Airport
Assurances"pursuant to the Federal Airport Act as described therein). As used herein, a"Credit
Entity" shall mean any Person that immediately following such assignment or subletting and having
given effect thereto will have a publicly traded unsecured senior debt rating of`Baal"or better from
Moody's or a rating of"BBB+" or better from S&P (or, if such Person does not then have rated debt,
a determination that by either of such rating agencies its unsecured senior debt would be so rated by
such agency and will not be on"Negative Credit Watch"), and in the event both such rating agencies
cease to furnish such ratings,then a comparable rating by any rating agency acceptable to Landlord
and Lender.
(b) If Tenant desires to assign this Lease, whether by operation of law or
otherwise, to a Person ("Non-Preapproved Assignee")that is not a wholly-owned subsidiary of
Tenant or a Credit Entity or(each a"Non-Preapproved Assignment")then Tenant shall, not less than
forty five (45) days prior to the date on which it desires to make a Non-Preapproved Assignment,
submit to Landlord and Lender information regarding the following with respect to the Non-
Preapproved Assignee (collectively,the "Review Criteria"): (A) credit, (B) capital structure,
(C)management, (D) operating history, (E)proposed use of the Leased Premises and (F)risk factors
associated with the proposed use of the Leased Premises by the Non-Preapproved Assignee, taking
into account factors such as environmental concerns,product liability and the like. Landlord and
Lender shall review such information and shall approve or disapprove the Non-Preapproved
Assignee no later than the thirtieth(30th)day following receipt of all such information, and
Landlord and Lender shall be deemed to have acted reasonably in granting or withholding consent if
such grant or disapproval is based on their review of the Review Criteria applying prudent business
judgment. If a response is not received by Tenant by the expiration of such thirty (30) day period,
such non-Preapproved Assignee shall be deemed disapproved.
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N Y L I B-069448.14J MMAR G E R
(c) Tenant shall have the right, upon thirty (30) days prior written notice to
Landlord and Lender, to enter into one or more subleases with (i) Subsidiaries and/or Affiliates of
Tenant and (ii) any third parties that demise, in the aggregate, up to,but not to exceed twenty five
percent (25%) of the gross leasable area of the Improvements at the Leased Premises, with no
consent or approval of Landlord being required or necessary (each, a"Preapproved Sublet"). Other
than pursuant to Preapproved Sublets, at no time during the Term shall subleases exist for more than
twenty five percent(25%) of the gross leasable area of the Improvements at the Leased Premises
without the prior written consent of Landlord, which consent shall be granted or withheld based on a
review of the Review Criteria as they relate to the proposed sublessee and the terms of the proposed
sublease. Landlord and Lender shall be deemed to have acted reasonably in granting or withholding
consent if such grant or disapproval is based on their review of the Review Criteria applying prudent
business judgment.
(d) If Tenant assigns all its rights and interest under this Lease,the assignee
under such assignment shall expressly assume all the obligations of Tenant hereunder, actual or
contingent, including obligations of Tenant which may have arisen on or prior to the date of such
assignment, by a written instrument delivered to Landlord at the time of such assignment. Each
sublease of any of the Leased Premises (A) shall be expressly subject and subordinate to this Lease
and any Mortgage encumbering the Leased Premises; (B) not extend beyond the then current Term
minus one day; (C)terminate upon any termination of this Lease, unless Landlord elects in writing,
to cause the sublessee to attorn to and recognize Landlord as the lessor under such sublease,
whereupon such sublease shall continue as a direct lease between the sublessee and Landlord upon
all the terms and conditions of such sublease; and (D) bind the sublessee to all covenants contained
in Paragraph 4(a), 10 and 12 with respect to subleased premises to the same extent as if the sublessee
were the Tenant. No assignment or sublease shall affect or reduce any of the obligations of Tenant
hereunder or of the Guarantor under the Guaranty, and all such obligations of Tenant and Guarantor
shall continue in full force and effect as obligations of a principal and not as obligations of a
guarantor, as if no assignment or sublease had been made, except that in the event of an assignment
to a Credit Entity, or a bona fide, arms-length,Asset Transfer or a change of Control to an
unaffiliated third party permitted or approved by Landlord under Paragraph 210) or(k)below,
Guarantor shall be released with respect to all obligations or liabilities first arising or accruing after
the date of such assignment or deemed assignment, which release shall be confirmed in writing by
Landlord promptly upon receipt by Landlord of a written request from Tenant or Guarantor and
confirmation by Landlord of compliance under Paragraph 21(f)below. No assignment or sublease
shall impose any additional obligations on Landlord under this Lease.
(e) Notwithstanding any provision in this Paragraph 21 or elsewhere in this
Lease to the contrary, including any right or option Tenant may have to assign this Lease or sublease
all or any portion of the Leased Premises without Landlord's consent, Tenant shall, upon the request
of Landlord,provide and cause such assignee or sublessee to provide, such information(including,
without limitation, any certification)as to any proposed assignee or sublessee and its principals as
may be required for Landlord and Tenant to comply with regulations administered by the Office of
Foreign Asset Control ("OFAC") of the Department of the Treasury, codified at 31 C.F.R. Part 500
(including those named on OFAC's Specially Designated and Blocked Persons list) or under any
statute, executive order(including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or
other governmental action regarding persons or entities with whom U.S. persons or entities are
restricted from doing business (including persons or entities who have violated the U.S. Foreign
Corrupt Practices Act 15 U.S.C. §§78dd-1, 78dd-2 and 78dd-3).
(f) Tenant shall, within ten(10) days after the execution and delivery of any
assignment or sublease, deliver a duplicate original copy thereof to Landlord which, in the event of
an assignment, shall be in recordable form. With respect to any assignment to a wholly-owned
subsidiary of Tenant or Credit Entity or any Preapproved Sublet, at least thirty(30) days prior to the
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NYL IB-069448.1 I}JMMARGE R
effective date of such assignment or sublease, Tenant shall provide to Landlord information
reasonably required by Landlord to establish that the Person involved in any such proposed
assignment or sublet satisfies the criteria set forth in this Lease for a Preapproved Assignment or
Preapproved Sublet.
(g) As security for performance of its obligations under this Lease, Tenant
hereby grants, conveys and assigns to Landlord all right,title and interest of Tenant in and to all
subleases now in existence or hereafter entered into for any or all of the Leased Premises, any and all
extensions, modifications and renewals thereof and all rents, issues and profits therefrom. Landlord
hereby grants to Tenant a license to collect and enjoy all rents and other sums of money payable
under any sublease of any of the Leased Premises; provided,however, that Landlord shall have the
absolute right at any time upon notice to Tenant and any subtenants to revoke said license and to
collect such rents and sums of money and to retain the same. Any amounts collected shall be
applied to Rent payments next due and owing. Tenant shall not consent to, cause or allow any
modification or alteration of any of the terms, conditions or covenants of any of the subleases or the
termination thereof, without the prior written approval of Landlord which consent shall not be
unreasonably withheld nor shall Tenant accept any rents more than thirty (30) days in advance of the
accrual thereof nor do nor permit anything to be done,the doing of which, nor omit or refrain from
doing anything, the omission of which, will or could be a breach of or default in the terms of any of
the subleases.
(h) Tenant shall not have the power to mortgage, pledge or otherwise
encumber its interest under this Lease or any sublease of the Leased Premises, and any such
mortgage, pledge or encumbrance made in violation of this Paragraph 21 shall be void and of no
force and effect.
(i) Landlord may sell or transfer the Leased Premises at any time without
Tenant's consent to any third party (each a"Third Party Purchaser"). In the event of any such
transfer, Tenant shall attorn to any Third Party Purchaser as Landlord so long as such Third Party
Purchaser and Landlord notify Tenant in writing of such transfer. At the request of Landlord, Tenant
will execute such documents confirming the agreement referred to above and such other agreements
as Landlord may reasonably request, provided that such agreements do not increase the liabilities
and obligations of Tenant hereunder nor reduce the rights and privileges of Tenant hereunder.
0) Tenant shall not, in a single transaction or series of transactions (including
any interim merger or consolidation), enter into an agreement to sell or convey,transfer or lease or
sell or convey,transfer or lease all or substantially all of its assets (an"Asset Transfer")to any
Person, and any such Asset Transfer shall be deemed an assignment in violation of this Lease;
except that Tenant shall have the right to conduct an Asset Transfer to a Person without Landlord's
consent if the following conditions are met: (i)the Asset Transfer is to a Person that
(A) immediately following such transaction or transactions, taken in the aggregate, is (or would be,
on a pro forma basis) a Credit Entity or(B) is approved in writing by Landlord under the Review
Criteria as a Non-Preapproved Assignee in accordance with the provisions of Paragraph 21(b) of this
Lease and, either case, (ii)this Lease is assigned to and assumed by such Person as a part of such
Asset Transfer. In the event of an Asset Transfer to a Subsidiary Tenant, any subsequent sale of the
assets of the original Tenant named herein by such Subsidiary Tenant shall be governed by the
requirements of this subparagraph (i) irrespective of whether or not such sale would be considered a
sale of all or substantially all of the assets of such Subsidiary.
(k) At no time during the Term shall any Person or"group" (within the
meaning of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended)
pursuant to a single transaction or series of related transactions (i) acquire, directly or indirectly,
more than 50%of the voting stock, partnership interests, membership interests or other equitable
and/or beneficial interests of Tenant("Control") or(ii) obtain, directly or indirectly, the power
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N Y L I B-069448.14 J M M A R G E R
(whether or not exercised)to elect a majority of the directors of Tenant or voting control of any
partnership or limited liability company or other entity acting as its general partner or managing
member(including through a merger or consolidation of Tenant with or into any other Person),
unless: (1) such change of Control is the result of a sale of all of Tenant's stock or equity interests
(excluding any stock owned or retained by officers or employees of Tenant, including pursuant to a
stock ownership or stock option plan or plans), or a merger, consolidation or other business
combination in which Tenant or the surviving entity(if other than Tenant) continue to retain or hold,
as the case may be, all or substantially all of the assets of Tenant existing immediately prior to such
merger, consolidation or other business combination, or(2)the purchaser of such Control or Person
who acquires such voting power shall: (A) after taking into account the transaction that resulted in
the acquisition of such Control or voting power, be a Credit Entity (or a subsidiary or Affiliate of a
Credit Entity and such Credit Entity shall enter into a guaranty reasonably satisfactory to Landlord
pursuant to which it guarantees the payment and performance of the obligations of Tenant under this
Lease), or(B)be approved in writing by Landlord under the Review Criteria as a Non-Preapproved
Assignee in accordance with the provisions of Paragraph 21(b) above. Except as permitted in this
Paragraph 21(k) above, any such change of Control or voting power(by operation of law,merger,
consolidation or otherwise) shall be deemed as an assignment of this Lease to a Non-Preapproved
Assignee and the approval of Landlord shall be required as set forth in Paragraph 21(b) above and
any consummation of such assignment absent such approval shall be in violation of this Lease;
provided, however, that a deemed assignment pursuant to the transfer of the outstanding capital
stock of Tenant shall not be deemed to include the sale of such stock by persons or parties through
the "over-the-counter market" or through any recognized stock exchange, other than by those
deemed to be a"control-person"within the meaning of the Securities Exchange Act of 1934.
(1) Tenant shall pay to Landlord with each monthly installment of Basic Rent,
as Additional Rent, one half of all Net Sublet Rent paid by any subtenant for the prior month under
any sublease for all or any portion of the Leased Premises, except in the event that such sublease is
to a wholly-owned Subsidiary or Affiliate of Tenant. The term"Net Sublet Rent" as used in this
Paragraph 21(b) shall mean the aggregate amount of all rent payable by all subtenants for any
portion of the Leased Premises less (i) any operating expenses certified by Tenant relating to that
portion of the Leased Premises sublet (ii)the cost of any improvements constructed and paid for by
Tenant specifically for such subtenant and (iii)the product of(A) Basic Rent then in effect
multiplied by (B) the percentage of the leaseable square feet of the Leased Premises sublet.
22. Events of Default.
(a) The occurrence of any one or more of the following (after expiration of
any applicable cure period as provided in Paragraph 22(b)) shall, at the sole option of Landlord,
constitute an "Event of Default"under this Lease:
(i) a failure by Tenant to make any payment of(i) any Basic
Rent on or prior to its due date, regardless of the reason for such failure and such failure
continues for three (3) business days after notice thereof from Landlord, or (ii) any other
Monetary Obligation hereunder and such failure continues for ten(10) business days after
notice thereof from Landlord; provided that Landlord shall not be obligated to give notice of,
or allow any cure period for, any default in the payment of Basic Rent of more than two (2)
times within any Lease Year;
(ii) a failure by Tenant duly to perform and observe, or a
violation or breach of, any other provision hereof not otherwise specifically mentioned in this
Paragraph 22(a) and such failure shall continue for twenty (20)business days from the date
on which notice is given; provided, if the default cannot be cured within such twenty (20)
business day period and delay in the exercise of a remedy would not(in Landlord's
reasonable judgment) cause any material adverse harm to Landlord or any of the Leased
2s
NYL I B-069448.10-JMMARGE R
Premises,the cure period shall be extended for the period required to cure the default(but
such cure period, including any extension, shall not in the aggregate exceed sixty (60) days),
provided that Tenant shall commence to cure the default within the said twenty-day period
and shall actively, diligently and in good faith proceed with and continue the curing of the
default until it shall be fully cured;
(iii)any representation or warranty made by Tenant herein or in
any certificate, demand or request made pursuant hereto proves to be incorrect, now or
hereafter, in any material respect that is not susceptible to cure or is not cured within
twenty(20)business days from the date on which notice thereof is given;
(iv)a default beyond any applicable cure period or at maturity
by Tenant or Guarantor in any payment of principal or interest on any obligations for
borrowed money having an original principal balance of$2,500,000 or more in the
aggregate, or in the performance of any other provision contained in any instrument under
which any such obligation is created or secured (including the breach of any covenant
thereunder), (x) if such payment is a payment at maturity or a final payment, or(y) if an
effect of such default is to cause the holder of such obligation to accelerate such obligation so
it becomes due prior to its stated maturity;
(v) a default by Tenant or Guarantor beyond any applicable
cure period in the payment of rent under, or in the performance of any other material
provision of, any other lease or leases that have, in the aggregate, rental obligations over the
terms thereof of$2,500,000 or more if the Landlord under any such lease or leases
commences to exercise its remedies thereunder;
(vi)a final, non-appealable judgment or judgments for the
payment of money in excess of$2,500,000 in the aggregate shall be rendered against Tenant
or Guarantor and the same shall remain undischarged for a period of sixty(60) consecutive
days;
(vii) voluntarily be adjudicated a bankrupt or insolvent,
(B) seek or consent to the appointment of a receiver or trustee for itself or for the Leased
Premises, (C) file a petition seeking relief under the bankruptcy or other similar laws of the
United States, any state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or(E) be unable to pay its debts as they mature;
(viii) a court shall enter an order,judgment or decree
appointing, without the consent of Tenant, a receiver or trustee for it or for any of the Leased
Premises or approving a petition filed against Tenant which seeks relief under the bankruptcy
or other similar laws of the United States, any state or any jurisdiction, and such order,
judgment or decree shall remain undischarged or unstayed sixty (60) days after it is entered;
(ix)the Leased Premises shall have been vacated or abandoned;
(x) Tenant shall be liquidated or dissolved or shall begin
proceedings towards its liquidation or dissolution;
(xi)the estate or interest of Tenant in any of the Leased
Premises shall be levied upon or attached in any proceeding and such estate or interest is
about to be sold or transferred or such process shall not be vacated or discharged within
sixty (60)days after it is made;
29
N Y L I B-069448.10-J M M A R G E R
(xii) a failure by Tenant to perform or observe or a
violation or breach of(beyond the expiration of any applicable notice and cure period), or a
misrepresentation by Tenant under any provision of, any Assignment or any other document
between Tenant and Lender or from Tenant to Lender, if such failure, violation, breach or
misrepresentation gives rise to a default beyond any applicable cure period with respect to
any Loan;
(xiii) a failure by Tenant to maintain in effect any license
or permit necessary for the use, occupancy or operation of the Leased Premises and such
failure continues for fifteen (15) business days after written notice from Landlord
(xiv) a failure by Tenant to (A) deliver the estoppel
described in Paragraph 25 within the time period specified therein and such failure continues
for ten(10) days after written notice from Landlord;
(xv) Tenant's failure timely comply with any of Tenant's
Post Closing Obligations and such failure continues for ten (10) days after written notice
from Landlord;
(xvi) A default or an Event of Default(as defined in the
Guaranty)beyond any applicable cure period shall occur under the Airport Ground Lease
(unless such default is solely the result of the acts or omissions of Landlord) or under the
Guaranty;
(b) No notice or cure period shall be required in any one or more of the
following events: (A) the occurrence of an Event of Default under clause, (iv), (v), (vi), (vii), (viii),
(ix), (x), (xi), (xii), or (xvi) of Paragraph 22(a); (B) the default consists of a failure to provide any
insurance required by Paragraph 16 or an assignment or sublease entered into in violation of
Paragraph 21; or(C)the default is such that any delay in the exercise of a remedy by Landlord could
reasonably be expected to cause irreparable harm to Landlord.
23. Remedies and Damages upon Default.
(a) If an Event of Default shall have occurred and be continuing beyond the
expiration of any applicable notice and/or cure period,then Landlord shall have the right, at its sole
option, then or at any time thereafter,to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23 without further demand upon or notice to Tenant, except as
otherwise expressly provided below in this Paragraph 23 and, subject in all events, to any conditions
and limitations(including any additional notice requirements) of applicable Law.
(i) Landlord may terminate this Lease by giving Tenant
written notice thereof; such termination to be effective as of the date specified in such notice
unless a longer notice period is prescribed by applicable Law(in which event, such longer
period shall deemed set forth in such notice and shall control). Upon such date, this Lease,
the estate hereby granted and all rights of Tenant hereunder shall expire and terminate and
Tenant shall immediately surrender and deliver possession of the Leased Premises to
Landlord in accordance with and in the condition required by Paragraph 26 hereof. If
Tenant does not so surrender and deliver possession of all of the Leased Premises, Landlord
may re-enter and repossess any of the Leased Premises not surrendered, with or without legal
process, by peaceably entering any of the Leased Premises and changing locks or by
summary proceedings, ejectment or any other lawful means or procedure.
(ii) Landlord may terminate Tenant's right of possession(but
not this Lease) and may repossess the Leased Premises by any available legal process
30
NYLIB-469"8.1 aJMMARGE R
without thereby releasing Tenant from any liability hereunder and without demand or notice
of any kind to Tenant and without terminating this Lease.
(iii)Upon or at any time after taking possession of any of the
Leased Premises pursuant to Paragraph 23(a)(i)or 23(a)(ii), Landlord may, by peaceable
means or legal process, remove any Persons or property therefrom. Landlord shall be under
no liability for or by reason of any such entry, repossession or removal. Notwithstanding
such entry or repossession, Landlord may collect the damages set forth in Paragraph 23(b)(i)
and 23(b)(ii).
(iv)After repossession of any of the Leased Premises pursuant
to clause (i) or(ii) above, Landlord shall have the right to relet any of the Leased Premises to
such tenant or tenants, for such term or terms, for such rent, on such conditions and for such
uses as Landlord in its sole discretion may determine, and collect and receive any rents
payable by reason of such reletting. Landlord may make such Alterations in connection with
such reletting as it may deem advisable in its sole discretion. Notwithstanding any such
reletting, Landlord may collect the damages set forth in Paragraph 23(b)(ii). Landlord shall
consider, in its good faith business judgment, any reputable tenants or subtenants proposed
by Tenant that have a financial condition commensurate with the financial obligations that
would be imposed by the proposed lease or sublease and are prepared to lease or sublet the
Leased Premises,but Landlord shall be under no obligation to accept such proposed tenants
or subtenants.
(v) Landlord may, upon notice to Tenant, require Tenant to
make an irrevocable offer to terminate this Lease in its entirety for an amount(the"Default
Termination Amount") specified in the next sentence. The "Default Termination Amount"
shall be the greatest of(A)the sum of the Fair Market Value of the Leased Premises and the
applicable Prepayment Premium which Landlord will be required to pay in prepaying any
Loan with proceeds of the Default Termination Amount or(B)the sum of the Acquisition
Cost and the applicable Prepayment Premium which Landlord will be required to pay in
prepaying any Loan with proceeds of the Default Termination Amount or(C) an amount
equal to the Present Value of the entire Basic Rent from the date of such purchase to the date
on which the then Term would expire. Upon such notice to Tenant, Tenant shall be deemed
to have made such offer and shall, if requested by Landlord, within ten(10) days following
such request, deposit with Landlord as payment against the Default Termination Amount the
amount described in (B) above, and Landlord and Tenant shall promptly commence to
determine Fair Market Value. Within thirty(30) days after the Fair Market Value Date,
Landlord shall accept or reject such offer. If Landlord accepts such offer then, on the
tenth (10`h) business day after such acceptance, Tenant shall pay to Landlord the Default
Termination Amount less any deposit paid to Landlord by Tenant as above provided and, at
the request of Tenant, Landlord will convey the Leased Premises to Tenant or its designee in
accordance with Paragraph 20. Any rejection by Landlord of such offer shall have no effect
on any other remedy Landlord may have under this Lease.
(vi)Landlord may declare by notice to Tenant the entire Basic
Rent(in the amount of Basic Rent then in effect plus increases of 3.5% on each Basic Rent
Adjustment Date)for the remainder of the then current Term to be immediately due and
payable. Tenant shall immediately pay to Landlord all such Basic Rent discounted to its
Present Value, all accrued Rent then due and unpaid, all other Monetary Obligations which
are then due and unpaid and all Monetary Obligations which arise or become due by reason
of such Event of Default(including any Costs of Landlord). Upon receipt by Landlord of all
such accelerated Basic Rent and Monetary Obligations, this Lease shall remain in full force
and effect and Tenant shall have the right to possession of the Leased Premises from the date
of such receipt by Landlord to the end of the Term, and subject to all the provisions of this
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N Y L I B-369448.104 M M A R G E R
Lease, including the obligation to pay all increases in Basic Rent and all Monetary
Obligations that subsequently become due, except that(A)no Basic Rent which has been
prepaid hereunder shall be due thereafter during the said Term, and (B)Tenant shall have no
option to extend or renew the Term.
(b) The following constitute damages to which Landlord shall be entitled if
Landlord exercises its remedies under Paragraph 23(a)(i), (ii), and(iii):
(i) If Landlord exercises its remedy under Paragraphs 23(a)(i)
or (ii)but not its remedy under Paragraph 23(a)(iv) (or attempts to exercise such remedy and
is unsuccessful in reletting the Leased Premises)then, upon written demand from Landlord,
Tenant shall pay to Landlord, as liquidated and agreed final damages for Tenant's default and
in lieu of all current damages beyond the date of such demand (it being agreed that it would
be impracticable or extremely difficult to fix the actual damages), an amount equal to the
Present Value of the excess, if any, of(A) all Basic Rent from the date of such demand to the
date on which the Term is scheduled to expire hereunder in the absence of any earlier
termination, re-entry or repossession over(B)the then fair market rental value of the Leased
Premises for the same period. Tenant shall also pay to Landlord all accrued Rent then due
and unpaid, all other Monetary Obligations which are then due and unpaid, all Monetary
Obligations which arise or become due by reason of such Event of Default, including any
Costs of Landlord in connection with the repossession of the Leased Premises and any
attempted reletting thereof, including all brokerage commissions, legal expenses, reasonable
attorneys' fees, employees' expenses, costs of Alterations and expenses and preparation for
reletting.
(ii) If Landlord exercises its remedy or remedies under
Paragraphs 23(a)(i), (ii), (iii)or(iv), then Tenant shall, until the end of what would have been
the Term in the absence of the termination of the Lease, and whether or not any of the Leased
Premises shall have been relet, be liable to Landlord for, and shall pay to Landlord, as
liquidated and agreed current damages all Monetary Obligations which would be payable
under this Lease by Tenant in the absence of such termination less the net proceeds, if any, of
any reletting pursuant to Paragraph 23(a)(iv), after deducting from such proceeds all of
Landlord's Costs (including the items listed in the last sentence of Paragraph 23(b)(i) hereof)
incurred in connection with such repossessing and reletting; provided,that if Landlord has
not relet the Leased Premises, such Costs of Landlord shall be considered to be Monetary
Obligations payable by Tenant. Tenant shall be and remain liable for all sums aforesaid, and
Landlord may recover such damages from Tenant and institute and maintain successive
actions or legal proceedings against Tenant for the recovery of such damages. Nothing
herein contained shall be deemed to require Landlord to wait to begin such action or other
legal proceedings until the date when the Term would have expired by its own terms had
there been no such Event of Default.
(iii)Tenant shall be and remain liable for all sums aforesaid,
and Landlord may recover such damages from Tenant and institute and maintain successive
actions or legal proceedings against Tenant for the recovery of such damages. Nothing
herein contained shall be deemed to require Landlord to wait to begin such action or other
legal proceedings until the date when the Term would have expired by its own terms had
there been no such Event of Default.
(c) Notwithstanding anything to the contrary herein contained, in lieu of or in
addition to any of the foregoing remedies and damages, Landlord may exercise any remedies and
collect any damages available to it at law or in equity. If Landlord is unable to obtain full
satisfaction pursuant to the exercise of any remedy, it may pursue any other remedy which it has
hereunder or at law or in equity.
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NYLIB-069446.1 aJMMARGER
(d) Landlord shall not be required to mitigate any of its damages hereunder
except and to the extent that the Laws of the State require a lessor to mitigate or to use reasonable
efforts to mitigate its damages at the time in question. If any Law shall validly limit the amount of
any damages provided for herein to an amount which is less than the amount agreed to herein,
Landlord shall be entitled to the maximum amount available under such Law.
(e) No termination of this Lease, repossession or reletting of the Leased
Premises, exercise of any remedy or collection of any damages pursuant to this Paragraph 23 shall
relieve Tenant of any Surviving Obligations.
(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF
LANDLORD OR TENANT HEREUNDER, LANDLORD AND TENANT HEREBY WAIVE
ANY RIGHT TO A TRIAL BY JURY.
(g) Upon the occurrence of any Event of Default, Landlord shall have the
right (but no obligation)to perform any act required of Tenant hereunder and, if performance of such
act requires that Landlord enter the Leased Premises, Landlord may enter the Leased Premises for
such purpose.
(h) No failure of Landlord (i)to insist at any time upon the strict performance
of any provision of this Lease or (ii)to exercise any option, right, power or remedy contained in this
Lease shall be construed as a waiver, modification or relinquishment thereof. A receipt by Landlord
of any sum in satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of any
provision hereof shall be deemed to have been made unless expressed in a writing signed by
Landlord.
(i) Tenant hereby waives and surrenders, for itself and all those claiming
under it, including creditors of all kinds, (i) any right and privilege which it or any of them may have
under any present or future Law to redeem any of the Leased Premises or to have a continuance of
this Lease after termination of this Lease or of Tenant's right of occupancy or possession pursuant to
any court order or any provision hereof, and (ii)the benefits of any present or future Law which
exempts property from liability for debt or for distress for rent.
0) Except as otherwise provided herein, all remedies are cumulative and
concurrent and no remedy is exclusive of any other remedy. Each remedy may be exercised at any
time an Event of Default has occurred and is continuing and may be exercised from time to time. No
remedy shall be exhausted by any exercise thereof
(k) Tenant is knowledgeable and experienced in commercial transactions and
does hereby acknowledge and agree that the provisions of this Lease for determining charges and
amounts payable by Tenant are commercially reasonable and valid and constitute satisfactory
methods for determining such charges and amounts as required by Section 93.012 of the Texas
Property Code. TENANT FURTHER VOLUNTARILY AND KNOWINGLY WAIVES (TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ALL RIGHTS AND
BENEFITS OF TENANT UNDER SUCH SECTION,AS IT NOW EXISTS OR AS IT MAY
BE HEREAFTER AMENDED OR SUCCEEDED.
24. Notices. All notices,demands, requests, consents, approvals, offers,
statements and other instruments or communications required or permitted to be given pursuant
to the provisions of this Lease shall be in writing and shall be deemed to have been given and
received for all purposes when delivered in person or by Federal Express or other reliable 24-
hour delivery service or five (5) business days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid, addressed to the other party
33
NYLIB-469448.1 0-MMARGER
at its address stated on page one of this Lease or when delivery is refused. Notices sent to
Landlord shall be to the attention of Director, Asset Management, and notices to Tenant shall be
to the attention of President. A copy of any notice given by Landlord to Tenant shall be
simultaneously given by Landlord to Ranger Aerospace (so long as it is the parent company of
Tenant), 8445 Freeport Parkway, Suite 500, Irving, Texas 75063: Attention: Steve Townes. A
copy of any notice given by Tenant to Landlord shall be addressed to the attention of Director,
Asset Management and shall be simultaneously given by Tenant to Reed Smith LLP, 599
Lexington Avenue, 29`h Floor,New York,New York, 10022, Attention: Chairman, Real Estate
Department. For the purposes of this Paragraph, any party may substitute another address stated
above (or substituted by a previous notice) for its address by giving fifteen (15) days' notice of
the new address to the other party, in the manner provided above.
25. Estoppel Certificate. At any time upon not less than ten(10) days'prior
written request by either Landlord or Tenant (the "Requesting Party")to the other party(the
"Responding Party"),the Responding Party shall deliver to the Requesting Party a statement in
writing, executed by an authorized officer of the Responding Party, certifying (a)that, except as
otherwise specified, this Lease is unmodified and in full force and effect, (b)the dates to which
Basic Rent, Additional Rent and all other Monetary Obligations have been paid, (c) that, to the
knowledge of the signer of such certificate and except as otherwise specified, no default by either
Landlord or Tenant exists hereunder, and (d) such other matters as the Requesting Party may
reasonably request related to this Lease. Any such statements by the Responding Party may be
relied upon by the Requesting Party, any Person whom the Requesting Party notifies the
Responding Party in its request for the Certificate is an intended recipient or beneficiary of the
Certificate, any Lender or their assignees and by any prospective purchaser or mortgagee of any
of the Leased Premises.
26. Surrender. Upon the expiration or earlier termination of this Lease,
Tenant shall peaceably leave and surrender the Leased Premises to Landlord in the same
condition in which the Leased Premises was at the commencement of this Lease, except as
repaired, rebuilt, restored, altered, replaced or added to as permitted or required by any provision
of this Lease, ordinary wear and tear excepted. Upon such surrender, Tenant shall (a) remove
from the Leased Premises all property which is owned by Tenant or third parties other than
Landlord and Alterations required to be removed pursuant to Paragraph 13 hereof and (b) repair
any damage caused by such removal. Property not so removed shall become the property of
Landlord, and Landlord may thereafter cause such property to be removed from the Leased
Premises. The cost of removing and disposing of such property and repairing any damage to any
of the Leased Premises caused by such removal shall be paid by Tenant to Landlord upon
demand. Landlord shall not in any manner or to any extent be obligated to reimburse Tenant for
any such property which becomes the property of Landlord pursuant to this Paragraph 26.
27. No Merger of Title. There shall be no merger of the leasehold estate
created by this Lease with the fee estate in any of the Leased Premises by reason of the fact that
the same Person may acquire or hold or own, directly or indirectly, (a)the leasehold estate
created hereby or any part thereof or interest therein and (b) the fee estate in any of the Leased
Premises or any part thereof or interest therein, unless and until all Persons having any interest in
the interests described in (a) and (b) above which are sought to be merged shall join in a written
instrument effecting such merger and shall duly record the same.
28. Books and Records.
(a) Tenant shall keep adequate records and books of account with respect to
use, operation, repair, maintenance, and security of the Leased Premises, in accordance with sound
real estate accounting principles, consistently applied, and shall permit Landlord and Lender by their
respective agents, accountants and attorneys, upon reasonable notice to Tenant, to visit and inspect
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NYLIB-069448.1 aJMMARGER
the Leased Premises and examine (and make copies of)the records and books of account and to
discuss the finances and business with the officers of Tenant, at such reasonable times as may be
requested by Landlord. Upon the request of Lender or Landlord (either telephonically or in writing),
Tenant shall provide the requesting party with copies of any information to which such party would
be entitled in the course of a personal visit.
(b) For so long as Tenant is a wholly-owned subsidiary of Guarantor, Tenant
shall deliver to Landlord and to Lender within one hundred five (105) days of the close of each fiscal
year of Guarantor, annual audited financial statements of the Tenant Group certified by a nationally
recognized firm of independent certified public accountants. If, at any time during the Term Tenant
is not a wholly-owned subsidiary of Guarantor, then Tenant shall deliver to Landlord and Lender
within one hundred five (105) days of the close of each fiscal year of Tenant annual audited financial
statements of Tenant certified by a nationally recognized firm of independent certified public
accountants. In any case, Tenant shall also cause to be furnished to Landlord within forty-five (45)
days after the end of each of the three remaining quarters unaudited financial statements and all other
quarterly reports of Tenant and the Tenant Group, certified by Tenant's and/or Guarantor's chief
financial officer (as the case may be), and all filings, if any, of Form 10-K, Form 10-Q and other
required filings with the Securities and Exchange Commission pursuant to the provisions of the
Securities Exchange Act of 1934, as amended, or any other Law. All financial statements shall be
prepared in accordance with generally accepted accounting principles ("GAAP") consistently
applied. All annual financial statements shall be accompanied (i) by an opinion of said accounting
firm stating that(A)there are no qualifications as to the scope of the audit and (B) the audit was
performed in accordance with GAAP and (ii) by the affidavit of the president or a vice president of
Tenant, dated within five (5) days of the delivery of such statement, stating that(C) the affiant
knows of no Event of Default, or event which,upon notice or the passage of time or both, would
become an Event of Default which has occurred and is continuing hereunder or, if any such event
has occurred and is continuing, specifying the nature and period of existence thereof and what action
Tenant has taken or proposes to take with respect thereto and (D) except as otherwise specified in
such affidavit,that Tenant has fulfilled all of its obligations under this Lease which are required to
be fulfilled on or prior to the date of such affidavit.
29. Determination of Value.
(a) Whenever a determination of Fair Market Value is required pursuant to
any provision of this Lease, such Fair Market Value shall be determined in accordance with the
following procedure:
(i) Landlord and Tenant shall endeavor to agree upon such
Fair Market Value within thirty (30) days after the date (the "Applicable Initial Date") on
which(A) Tenant provides Landlord with notice of its intention to terminate this Lease and
purchase the Leased Premises pursuant to Paragraph 18, (B) Landlord provides Tenant with
notice of its intention to redetermine Fair Market Value pursuant to Paragraph 20(c), or
(C) Landlord provides Tenant with notice of Landlord's intention to require Tenant to make
an offer to terminate this Lease pursuant to Paragraph 23(a)(iii). Upon reaching such
agreement, the parties shall execute an agreement setting forth the amount of such Fair
Market Value.
(ii) If the parties shall not have signed such agreement within
thirty(30) days after the Applicable Initial Date, Tenant shall within fifty (50) days after the
Applicable Initial Date select an appraiser and notify Landlord in writing of the name,
address and qualifications of such appraiser. Within twenty (20) days following Landlord's
receipt of Tenant's notice of the appraiser selected by Tenant, Landlord shall select an
appraiser and notify Tenant of the name, address and qualifications of such appraiser. Such
two appraisers shall endeavor to agree upon Fair Market Value based on a written appraisal
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NYL I B-469448.I O-JMMARGE R
made by each of them (and given to Landlord by Tenant) as of the Relevant Date. If such
two appraisers shall agree upon a Fair Market Value,the amount of such Fair Market Value
as so agreed shall be binding and conclusive upon Landlord and Tenant.
(iii)If such two appraisers shall be unable to agree upon a Fair
Market Value within thirty(30) days after the selection of an appraiser by Landlord,then
such appraisers shall advise Landlord and Tenant of their respective determination of Fair
Market Value and shall select a third appraiser to make the determination of Fair Market
Value. The selection of the third appraiser shall be binding and conclusive upon Landlord
and Tenant.
(iv)If such two appraisers shall be unable to agree upon the
designation of a third appraiser within ten(10) days after the expiration of the twenty (20)
day period referred to in clause (iii)above, or if such third appraiser does not make a
determination of Fair Market Value within thirty(30)days after his selection, then such third
appraiser or a substituted third appraiser, as applicable, shall, at the request of either party
hereto, be appointed by the President or Chairman of the American Arbitration Association
in New York,New York. The determination of Fair Market Value made by the third
appraiser appointed pursuant hereto shall be made within twenty(20) days after such
appointment.
(v) If a third appraiser is selected, Fair Market Value shall be
the average of the determination of Fair Market Value made by the third appraiser and the
determination of Fair Market Value made by the appraiser(selected pursuant to
Paragraph 29(a)(ii)hereof)whose determination of Fair Market Value is nearest to that of the
third appraiser. Such average shall be binding and conclusive upon Landlord and Tenant.
(vi)All appraisers selected or appointed pursuant to this
Paragraph 29(a) shall (A) be independent qualified MAI appraisers, (B)have no right,power
or authority to alter or modify the provisions of this Lease, (C)utilize the definition of
Market Rate set forth above, and (D)be registered in the State if such State provides for or
requires such registration.
(vii) The Cost of the procedure described in this
Paragraph 29(a) above shall be borne by Tenant.
(b) If, by virtue of any delay, Fair Market Value is not determined by the
expiration or termination of the then current Term, then the date on which the Term would otherwise
expire or terminate shall be extended to the date specified for termination in the particular provision
of this Lease pursuant to which the determination of Fair Market Value is being made.
(c) In determining Fair Market Value as defined in clause (b) of the definition
of Fair Market Value, the appraisers shall add (i)the present value of the Rent for the remaining
Term, assuming the Term has been extended for all extension periods provided herein(with assumed
increases in the CPI to be determined by the appraisers)using a discount rate (which may be
determined by an investment banker retained by each appraiser) based on the creditworthiness of
Tenant and Guarantor and(ii)the present value of the Leased Premises as of the end of such Term
(having assumed the Term has been extended for all extension periods provided herein). The
appraisers shall further assume that no default then exists under the Lease, that Tenant has complied
(and will comply) with all provisions of the Lease.
30. Non-Recourse as to Landlord. (a) Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of Landlord under this
Lease shall be limited to actual damages and shall be enforced only against the Leased Premises
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N Y L I B-069448.10-J M M A R G E R
and not against any other assets,properties or funds of(i) Landlord, (ii) any director, officer,
member, general partner, shareholder, limited partner,beneficiary, employee or agent of
Landlord or any members or general partners of Landlord(or any legal representative,heir,
estate, successor or assign of any thereof), (iii) any predecessor or successor partnership or
corporation(or other entity) of Landlord or any of its general partners, shareholders, officers,
directors, members, employees or agents, either directly or through Landlord or its general
partners, shareholders, officers, directors, employees or agents or any predecessor or successor
partnership or corporation (or other entity),or(iv) any Person affiliated with any of the
foregoing, or any director, officer, employee or agent of any thereof.
(b) Notwithstanding the foregoing, Tenant shall not be precluded from
instituting legal proceedings for the purpose of making a claim against Landlord on account of an
alleged violation of Landlord's obligations under this Lease, subject,however,to Paragraph 30(a)
above.
31. Financing.
(a) Tenant agrees to pay, not later than three (3) business days following
written request from Landlord (or upon the date of this Lease with respect to costs and expenses
incurred as of such date): (i) all costs and expenses incurred by Landlord in connection with the
initial purchase and leasing of the Leased Premises, including, without limitation, transfer taxes and
recording fees and charges, the cost of appraisals, environmental reports, property condition report
and zoning reports; UCC and related searches; owner's title insurance charges and premiums
(including endorsements),the cost of surveys; the costs of any updates to any of the foregoing or any
reliance letters required in connection therewith; and the fees and expenses of Landlord's counsel,
and(ii) all costs and expenses incurred by Landlord in connection with the financing of the initial
Loan, including without limitation, any "points", application charges, commitment fees, costs of
updates or additions to searches or any of the reports identified under clause (i)hereof or any
reliance letters required in connection therewith, Lender's title charges and premiums (including
endorsements), and the fees and expenses of Lender's counsel.
(b) Tenant agrees to pay, within three (3) business days of written demand
therefor, any cost, charge or expense (other than the principal of the Note and interest thereon at the
contract rate of interest specified therein) imposed upon Landlord by Lender pursuant to the Note,
the Mortgage or the Assignment to the extent same is caused by a breach or default by Tenant under
this Lease or any document executed by and between Tenant and Lender or by Tenant in favor of
Lender and which is not otherwise reimbursed by Tenant to Landlord pursuant to any other
provision of this Lease.
(c) If Landlord desires to obtain or refinance any Loan, Tenant shall negotiate
in good faith with Landlord concerning any request made by any Lender or proposed Lender for
changes or modifications in this Lease. In particular, Tenant shall agree, upon request of Landlord,
to supply any such Lender with such notices and information as Tenant is required to give to
Landlord hereunder and to extend the rights of Landlord hereunder to any such Lender and to
consent to such financing if such consent is requested by such Lender. Tenant shall provide any
such other consent or statement and shall execute a subordination, non-disturbance and attornment
agreement("SNDA"), so long as the same do not materially adversely affect any right, benefit or
privilege of Tenant under this Lease or materially increase Tenant's obligations under this Lease.
Such SNDA may require Tenant to confirm that (a) Lender and its assigns will not be liable for any
misrepresentation, act or omission of Landlord and (b) Lender and its assigns will not be subject to
any counterclaim, demand or offset which Tenant may have against Landlord.
32. Subordination,Non-Disturbance and Attornment.
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N Y L I B-069448.14J MMAR G E R
(a) This Lease and Tenant's interest hereunder shall be subordinate to any
Mortgage or other security instrument hereafter placed upon the Leased Premises by Landlord, and
to any and all advances made or to be made thereunder, to the interest thereon, and all renewals,
replacements and extensions thereof, provided that the holders of such Mortgage shall enter into an
SNDA with Tenant which shall provide for the recognition of this Lease and all Tenant's rights
hereunder unless and until an Event of Default exists beyond the expiration of any applicable notice
and cure period or Landlord shall otherwise have the right to terminate this Lease pursuant to any
applicable provision hereof. Further, this Lease and Tenant's interest hereunder shall be subject to
and subordinate to the terms of the Airport Ground Lease ( including all current or future agreements
by and between the lessor under the Airport Ground Lease and the United States Government and as
to which the rights of Landlord, as lessee under the Airport Ground Lease, is subordinate, including
without limitation the terms of Sections 10.3 and 10.4 of the Airport Ground Lease).
(b) Landlord agrees that, upon the request of any Person that shall be Tenant's
senior secured lender, subordinate senior lender,purchase money equipment lender or an equipment
lessor of Tenant, Landlord shall execute and deliver a commercially reasonable waiver of Landlord's
statutory lien rights, if any, and a consent and agreement with respect to the respective rights of
Landlord and such Person regarding the security interests in, and the timing and removal of, any
inventory, equipment or other collateral in which such Person has a secured interest(the
"Collateral"), in form and substance reasonably acceptable to Landlord, so long as such waiver and
agreement(i)provides for the indemnification of Landlord (and Lender) against any claims by
Tenant or any Person claiming through Tenant and against any physical damage caused to the
Leased Premises, in connection with the removal of any of the Collateral by such Person, (ii)
expressly excludes any claim by such Person to any right,title or interest in or to any of the
Equipment as defined in this Lease, (iii)provides for a reasonable, but limited,timeframe for the
removal of such Collateral by such Person after the expiration of which same shall be deemed
abandoned, and (iv)provides for the per diem payment of Basic Rent due hereunder by such Person
for each day following the date of the expiration or termination of this Lease thereafter that Landlord
permits such Person's Collateral to remain in the Leased Premises.
33. Tax Treatment; Reporting?. Landlord and Tenant each acknowledge that
each shall treat this transaction as a true lease for state law purposes and shall report this
transaction as a lease for Federal income tax purposes. For Federal income tax purposes each
shall report this Lease as a true lease with Landlord as the owner of the Leased Premises and
Equipment and Tenant as the lessee of such Leased Premises and Equipment including:
(1)treating Landlord as the owner of the property eligible to claim depreciation deductions under
Section 167 or 168 of the Internal Revenue Code of 1986 (the "Code") with respect to the
Leased Premises and Equipment, (2) Tenant reporting its Rent payments as rent expense under
Section 162 of the Code, and (3) Landlord reporting the Rent payments as rental income. For the
avoidance of doubt, nothing in this Lease shall be deemed to constitute a guaranty, warranty or
representation by either Landlord or Tenant as to the actual treatment of this transaction for state
law purposes and for federal income tax purposes.
34. Miscellaneous.
(a) The paragraph headings in this Lease are used only for convenience in
finding the subject matters and are not part of this Lease or to be used in determining the intent of
the parties or otherwise interpreting this Lease.
(b) As used in this Lease, the singular shall include the plural and any gender
shall include all genders as the context requires and the following words and phrases shall have the
following meanings: (i) "including" shall mean"including without limitation"; (ii) "provisions"
shall mean"provisions,terms, agreements, covenants and/or conditions"; (iii) "lien" shall mean
"lien, charge, encumbrance,title retention agreement, pledge, security interest, mortgage and/or deed
38
NYL I B-089448.10-J M MAR G E R
of trust"; (iv) "obligation" shall mean"obligation, duty, agreement, liability, covenant and/or
condition"; (v) "any of the Leased Premises" shall mean"the Leased Premises or any part thereof or
interest therein"; (vi) "any of the Land" shall mean"the Land or any part thereof or interest therein";
(vii) "any of the Improvements" shall mean"the Improvements or any part thereof or interest
therein"; and (viii) "any of the Equipment" shall mean"the Equipment or any part thereof or interest
therein".
(c) Any act which Landlord is permitted to perform under this Lease may be
performed at any time and from time to time by Landlord or any person or entity designated by
Landlord. Each appointment of Landlord as attorney-in-fact for Tenant hereunder is irrevocable and
coupled with an interest. Landlord shall not unreasonably withhold or delay its consent whenever
such consent is required under this Lease, except as otherwise specifically provided herein and
except that with respect to any assignment of this Lease or subletting of the Leased Premises not
expressly permitted by the terms of this Lease, Landlord may withhold its consent for any reason or
no reason. In any instance in which Landlord agrees not to act unreasonably, Tenant hereby waives
any claim for damages against or liability of Landlord which is based upon a claim that Landlord has
unreasonably withheld or unreasonably delayed any consent or approval requested by Tenant, and
Tenant agrees that its sole remedy shall be an action for declaratory judgment. If with respect to any
required consent or approval Landlord is required by the express provisions of this Lease not to
unreasonably withhold or delay its consent or approval, and if it is determined in any such
proceeding referred to in the preceding sentence that Landlord acted unreasonably, the requested
consent or approval shall be deemed to have been granted; however, Landlord shall have no liability
whatsoever to Tenant for its refusal or failure to give such consent or approval. Tenant's sole
remedy for Landlord's unreasonably withholding or delaying, consent or approval shall be as
provided in this Paragraph. Time is of the essence with respect to the performance by Tenant of its
obligations under this Lease.
(d) Landlord shall in no event be construed for any purpose to be a partner,
joint venturer or associate of Tenant or of any subtenant, operator, concessionaire or licensee of
Tenant with respect to any of the Leased Premises or otherwise in the conduct of their respective
businesses.
(e) This Lease and any documents which may be executed by Tenant on or
about the effective date hereof at Landlord's request constitute the entire agreement between the
parties and supersede all prior understandings and agreements, whether written or oral, between the
parties hereto relating to the Leased Premises and the transactions provided for herein. Landlord and
Tenant are business entities having substantial experience with the subject matter of this Lease and
have each fully participated in the negotiation and drafting of this Lease. Accordingly, this Lease
shall be construed without regard to the rule that ambiguities in a document are to be construed
against the drafter.
(f) This Lease may be modified, amended, discharged or waived only by an
agreement in writing signed by the party against whom enforcement of any such modification,
amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the land and bind Tenant, its
successors and assigns and all present and subsequent encumbrancers and subtenants of any of the
Leased Premises, and shall inure to the benefit of Landlord, its successors and assigns. If there is
more than one Tenant, the obligations of each shall be joint and several.
(h) If any one or more of the provisions contained in this Lease shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Lease, but this Lease shall be construed
as if such invalid, illegal or unenforceable provision had never been contained herein.
39
N Y L I B-069446.14 J M MAR G E R
(i) All exhibits attached hereto are incorporated herein as if fully set forth.
0) This Lease shall be governed by and construed and enforced in accordance
with the laws of the State.
(k) Tenant is not,nor will Tenant become (i)a Person with whom U.S.persons
or entities are restricted from doing business under regulations of the Office of Foreign Asset Control
("OFAC")of the Department of the Treasury (including those named on OFAC's Specially
Designated and Blocked Persons list)or under any statute,executive order(including the September
24,2001,Executive Order Blocking Property and Prohibiting Transactions with Persons Who
Commit,Threaten to Commit, or Support Terrorism), or other governmental action or(ii)a Person
who violates the U.S. Foreign Corrupt Practices Act 15 U.S.C. §§78dd-1, 78dd-2 and 78dd-3 and
Tenant not will engage in any dealings or transactions or be otherwise associated with such persons or
entities.
(1) This Lease may be executed in a number of counterparts and by different
parties hereto in separate counterparts each of which, when so executed, shall be deemed to be an
original and all of which taken together shall constitute but one and the same agreement.
35. Post-Closing Obligations.
(a) Pursuant to that certain Property Condition Assessment of the Leased
Premises performed by Property Solutions Incorporated and dated March 10, 2008 (the"PCR"),
Tenant shall complete, remediate or obtain or caused to be completed, remediated or obtained the
items set forth below(the "Post Closing Obligations"within the time periods specified:
(i) Within 150 days of the date of this Lease,perform curb and
pavement repair and pavement striping as identified in the PCR; estimated cost: $20,000;
(ii) Within 150 days of the date of this Lease, perform sidewalk repair
as identified in the PCR; estimated cost: $1,500;
(iii) Within 150 days of the date of this Lease, perform exterior
building repair and painting as identified in the PCR; estimated cost: $50,000;
(iv) Within 150 days of the date of this Lease, perform building
entrance ADA compliance modifications as identified in the PCR; estimated cost: $2,500;
(v) Within 90 days of the date of this Lease, install ADA compliant
sidewalk curb ramps as identified in the PCR; estimated cost: $5,000;
(vi) Within 90 days of the date of this Lease, add five (5)ADA
compliant striped and marked handicapped parking spaces as identified in the PCR; estimated
cost: $2,500, and
(vii) Within 90 days of the date of this Lease:
(1) Tenant shall have retained a certified asbestos consultant,
acceptable to Landlord, who shall have prepared an O&M plan that complies with the
requirements of 29 C.F.R. §1910.1001. The asbestos O&M plan shall be submitted to Landlord
for Landlord's approval prior to being finalized. The asbestos O&M plan must specifically
require that the Tenant, and not Landlord, shall be responsible for all obligations relating to the
identification of ACM, notification to employees and other requirements of 29 C.F.R.
§1910.1001;
40
NYLI8-469448.I O-JMMARGER
(2) Tenant shall provide appropriate secondary containment for
the 150 gallon waste fuel AST located on the exterior of Hangar 2S. Tenant shall submit
appropriate documentation of such to Landlord by above date. Documentation of the completion
of these actions shall include invoices for secondary containment materials purchased, and
before and after photographs of the waste storage areas; and
(3) Tenant shall provide Landlord with documentation of
appropriate measures taken to clean and inspect six gravity-based pits located between the floor
drains and the sanitary sewer lines in the hangar buildings. Tenant shall have such cleaning and
inspection performed by a certified consultant, acceptable to Landlord. Consultant shall prepare
a written report of inspection and Tenant shall implement(and provide Landlord with proof of
implementation) any recommended upgrades and/or maintenance suggested as a result of such
inspection by the above date.
(b) If Tenant shall fail to timely complete any of the Post Closing Obligations shall be
deemed to be a default under this Lease. In addition to any other remedy, Tenant shall deposit
with Landlord, upon demand, amount equal to 125%of the estimated cost(as listed above)to
complete each then uncompleted item (the "Post-Closing Escrow") which shall be allocated to
each such incomplete Post-Closing Obligations in the applicable amounts, shall secure the
obligation of Tenant to complete the Post-Closing Obligations, and shall be held and disbursed
as set forth in this Paragraph 35. Tenant shall provide Landlord with written confirmation,
satisfactory to Landlord, of completion of each Post Closing Obligation and the Post-Closing
Escrow shall be released to Tenant within thirty(30) days following the date on which Landlord
receives written and photographic evidence satisfactory to Landlord that all Post-Closing
Obligations have been completed (which shall include written and photographic evidence, copies
of all relevant reports, contracts, agreements and correspondence with relevant environmental
authorities where appropriate,photographic evidence documenting the completed obligations
and evidence of payment in full). Any contamination discovered by Tenant shall be reported to
the appropriate environmental authorities to the extent required by law. Tenant shall pay all
costs associated with the Post-Closing Obligations, including oversight costs, in accordance with
the provisions of the Lease.
(c) If, at any time prior to the release of the Post-Closing Escrow, an
Event of Default shall have occurred and be continuing, Landlord shall use the proceeds of the
Post-Closing Escrow to the extent required to satisfy the Post-Closing Obligations, and be
entitled, at its sole discretion, to apply any remaining balance in payment of any Rent or other
charges which have not been made pursuant to this Lease and any other sums due to Landlord in
connection with any default or the curing thereof, including, without limitation, any damages
incurred by Landlord by reason of such default. Tenant acknowledges and agrees that such
proceeds shall not constitute assets or funds of Tenant or its estate, or be deemed to be held in
trust for Tenant, but shall be, for all purposes, the property of Landlord (or Lender,to the extent
assigned). Tenant further acknowledges and agrees that Landlord's application of the proceeds
of the Post-Closing Escrow towards the payment of Basic Rent,Additional Rent or the reduction
of any damages due Landlord in accordance with Paragraph 23 of this Lease, constitute a fair
and reasonable use of such proceeds, and the application of such proceeds by Landlord towards
the payment of Basic Rent, Additional Rent or any other sums due under this Lease shall not
constitute a cure by Tenant of the applicable default, provided that an Event of Default shall not
exist if Tenant restores the Post-Closing Escrow to its full amount within three (3) days and in
accordance with the requirements of this Paragraph 35, so that the applicable amount of the Post-
Closing Escrow shall be again on deposit with Landlord.
(d) Landlord shall have the right to designate Lender or any other
holder of a Mortgage as the holder of the Post-Closing Escrow during the term of the applicable
Loan who shall have all of the rights of Landlord under this Paragraph 35. Tenant covenants and
agrees to execute such agreements, consents and acknowledgments as may be requested by
41
N Y L I B-069448.10-J M M A R G E R
Landlord from time to time to change the holder of the Post-Closing Escrow as hereinabove
provided
(e) Tenant shall provide all communications regarding the Post
Closing Obligations identified above under item (vii)above, including Tenant's proof of
satisfactory completion of these obligations to Landlord, addressed to:
Louis A. Naugle, Esquire
Reed Smith LLP
435 Sixth Avenue
Pittsburgh, PA 15219
Telephone: 412-288-8586
Fax: 412-288-3063
E-mail: lnaugle(a@reedsmith.com
AND
TEXAV (TX) QRS 16-124, Inc.
c/o W. P. Carey and Co., LLC
Attention: Donna Neiley
Asset Management Department
50 Rockefeller Plaza
New York,NY 10020
Tele: 212-492-1100
Fax: 212-492-3022
dneiley@,wpcarey.com
42
NYL IB-069448.10-J MMARGE R
IN WITNESS WHEREOF,Landlord and Tenant have caused this Lease to be
duly executed under sea] as of the day and year first above written.
LANDLORD:
TEXAV(M QRS 16- 124,INC.,
a Delaware-corporatian
By:
Title: prr"lu-ii�ir imY-ec--Vx
ATTEST: TENANT:
TEXAS AVIATION SERVICES,INC.,
a Texas corporation
By: rz;
SWO"n RE PAGE TO LEASE AGREE MEW FOR `' v
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IN WITNESS WHEREOF,Landlord and Tenant have caused this't,ease to be
duly executed under seal as of the day and year first above written.
LANDLORD: -
TEXAV(TX)QRS 16- 124,INC.,
a Delaware corporation
By:
Title:
ATTEST: TENANT:
TEXAS AVIATION SERVICES,
a Texas corporation
By: By:
Title: p Sc c.r-e�c:jg Title:
M
r SIGNATURE PAGE TO LEASE AGREEMENT FORnt
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EXHIBIT A
PREMISES
LEASE 4S
TRACT ONE
LEGAL DESCRIPTION
BEING 8.031 acres of land located in Block 2, MEACHAM AIRPORT, an addition to the City
of Fort Worth, Tarrant County, Texas, according to the plat recorded in Cabinet A, Slide 2445 of
the Plat Records of Tarrant County, Texas, and said 8.031 acres also incorporating all of the
existing Lease IS and 2S, and portions of formerly unleased areas. Said 8.031 acres of land
being more particularly described by metes and bounds as follows:
COMMENCING at the most Easterly Southeast corner of said Block 2, Meacham
Airport Addition, and said POINT OF COMMENCING, being the intersection of the
North right-of-way line of NW 38th Street, and the West right-of-way line of North
Main Street;
THENCE N 000 28' 40" E 311.27 feet, along the West right-of-way line of said
North Main Street, and the East boundary line of said Block 2, to a point;
THENCE N 890 58' 27" W 50.55 feet,to a 1/2" iron rod found at the Southeast corner
of the aforesaid existing Lease 2S, and said POINT OF BEGINNING, also having Texas
State Coordinate NAD 27 Values of N =417259.38, E= 2045641.00;
THENCE along the South boundary line of said existing Lease 2S, as follows:
1. N 890 58' 27" W 144.23 feet, to a 1/2" iron rod set;
2. S 000 01' 33" W 20.00 feet, to an "X" cut in concrete found;
3. N 890 58' 27" W 31.50 feet, to a 1/2" iron rod set;
4. N 000 01' 33" E 20.00 feet, to a 1/2" iron rod set;
5. N 890 58' 27" W 28.51 feet, to a 1/2" iron rod set;
THENCE S 000 26' 34" W 153.45 feet, to a 1/2" iron rod set at the Southeast corner
of the herein described lease area, also having Texas State Coordinate NAD 27 Values
of N = 417106.03, E =2045435.58;
THENCE N 890 3 F 21" W 160.01 feet, to a point;
THENCE N 000 26' 34" E 988.19 feet, to an "X" cut in concrete found at the most
Westerly Northwest corner of aforesaid Lease IS;
THENCE along the North boundary line of said existing Lease IS, as follows:
1. S 800 12' 21" E 147.09 feet, to a "PK" nail found;
2. N 000 43' 39" E 129.28 feet, to a "PK" nail found;
� mf
EXHIBIT ATO LEASE AGREEMENT FOR
N Y L I B-089448.10-J M M A R G E R
3. S 890 16' 21" E 194.50 feet, to a 1/2" iron rod found stamped "City of Fort
Worth";
4. S 00° 30'21" W 39.00 feet, to a "PK" nail found at the most Northerly
Northeast corner of said existing Lease 1 S;
5. S 89° 29' 39" E 25.00 feet, to a "PK" nail found at the most Easterly
Northeast corner of said existing Lease IS;
THENCE S 000 30' 21" W 898.74 feet, along the East boundary line of said
existing Lease 1 S and Lease 2S, to the POINT OF BEGINNING, containing 8.031
acres (349,817 square feet) of land.
NYL IB-169448.10-JMMARGE R
LEASE 4S
TRACT TWO
LEGAL DESCRIPTION
BEING 2.313 acres of land located in Block 2, MEACHAM AIRPORT, an addition to the City
of Fort Worth, Tarrant County, Texas, according to the plat recorded in Cabinet A, Slide 2445 of
the Plat Records of Tarrant County, Texas, and said 2.313 acres also incorporating all of former
Lease 7S and a portion of former Lease 6S, and a portion of unleased area. Said 2.313 acres of
land being more particularly described by metes and bounds as follows:
COMMENCING at the most Easterly Southeast corner of said Block 2, Meacham Airport
Addition, and said POINT OF COMMENCING, also being the intersection of the
North right-of-way line of NW 38th Street, and the West right-of-way line of North
Main Street;
THENCE N 890 49' 15" W 720.10 feet, along the South boundary line of said Block
2, Meacham Airport Addition, and the North right-of-way line of said NW 38th Street,
to a point;
THENCE N 000 28' 39" E 159.56 feet, to the to the POINT OF BEGINNING, said
POINT OF BEGINNING also lying in the West boundary line of aforesaid former
Lease Area 6S, and said POINT OF BEGINNING also having Texas State
Coordinate NAD 27 Values of N=417109.91 and E =2044970.18;
THENCE N 000 28' 39" E 330.06 feet, along the West boundary line of aforesaid
former Lease Area 6S and 7S, and the East right-of-way line of Gulfstream Road, to an
"X" cut in concrete found at the Northwest corner of said former Lease 7S;
THENCE S 890 31' 21" E running along the North boundary line of said former
Lease 7S, at 180.00 feet, passing the 1/2" iron rod found at the Northeast corner of
said former Lease 7S, and in all 305.20 feet, to a 1/2" iron rod set;
THENCE S 000 26' 34" W 330.06 feet, to a point;
THENCE N 890 31' 21" W 305.40 feet, to the POINT OF BEGINNING, containing
2.313 acres (100,766 square feet) of land.
N YL I B-469448.I O-J M MAR G E R
LEASE 4S
TRACT ONE-A
LEASE SITE NO. 1 S-D-S
LEGAL DESCRIPTION
BEING 0.088 acre of land known as Lease Site No. 1 S-D-S, and being a portion of Block 2,
MEACHAM AIRPORT, an addition to the City of Fort Worth, Texas, according to the plat
recorded in Cabinet A, Slide 2445 of the Plat Records of Tarrant County, Texas. Said 0.088 acre
of land being more particularly described by metes and bounds as follows:
COMMENCING at the most Easterly Southeast corner of said Block 2, Meacham Airport,
and said POINT OF COMMENCING, being the intersection of the North right-of-
way line of NW 38th Street, and the West right-of-way line of North Main Street;
THENCE N 000 28'40" E 783.61 feet,to a point;
THENCE N 890 3 F 20" W 11.14 feet, to a railroad spike in asphalt found for the
POINT OF BEGINNING, being the Southeast corner of said Lease Site No. 1 S-D-
S, and said POINT OF BEGINNING, also having Texas State Coordinate NAD 27
Values of N =417731.91 and E=2045684.35;
THENCE N 890 32' 04" W 15.00 feet, to a railroad spike in asphalt found at the
Southwest corner of said Lease 1 S-D-S;
THENCE along the West boundary line of said Lease IS-D-S, as follows:
1. N 000 27' 56" E 157.54 feet, to a railroad spike in asphalt found;
2. N 890 32' 04" W 4.60 feet, to a railroad spike in asphalt found;
3. N 000 27' 56" E 8.64 feet,to a railroad spike in asphalt found;
4. S 890 32' 04" E 4.60 feet,to a railroad spike in asphalt found;
5. N 000 27' 56" E 85.67 feet,to a railroad spike in asphalt found at the
Northwest corner of said Lease 1 S-D-S;
THENCE S 890 32' 04" E 15.00 feet, along the North boundary line of said Lease
1 S-D-S, to a railroad spike in asphalt found at the Northeast corner of said Lease 1 S-D-
S;
THENCE S 000 27' 56" W 251.85 feet, along the East boundary line of said Lease
1 S-D-S, to the POINT OF BEGINNING, containing 0.088 acre (3,817 square feet)
of land.
NYLIB-069448.I O-JMMAR GE R
EXHIBIT B
MACHINERY AND EQUIPMENT
All fixtures, machinery, apparatus, equipment, fittings and appliances of every kind and nature
whatsoever now or hereafter affixed or attached to or installed in any of the Leased Premises
(except as hereafter provided), including all electrical, anti-pollution, heating, lighting(including
hanging fluorescent lighting), incinerating,power, air cooling, air conditioning, humidification,
sprinkling,plumbing, lifting, cleaning, fire prevention, fire extinguishing and ventilating
systems, devices and machinery and all engines, pipes, pumps, tanks (including exchange tanks
and fuel storage tanks), motors, conduits, ducts, steam circulation coils, blowers, steam lines,
compressors, oil burners, boilers, doors, windows, loading platforms, lavatory facilities,
stairwells, fencing(including cyclone fencing),passenger and freight elevators, overhead cranes
and garage units, together with all additions thereto, substitutions therefor and replacements
thereof required or permitted by this Lease, but excluding all personal property and all trade
fixtures, machinery, office, manufacturing and warehouse equipment which are not necessary to
the operation of the buildings which constitute part of the Leased Premises for the uses permitted
under Paragraph 4(a)of this Lease.
EXHIBIT B TO LEASE AGREEMENT FOR
N Y L I B-069448.10-J M M A R G E R
EXHIBIT C
PERMITTED ENCUMBRANCES
1. Public open space restrictions as set forth on Cabinet A, Slide 2445, Plat Records, Tarrant
County, Texas.
2. Easements and building lines as shown on plat recorded in Cabinet A, Slide 2445, Plat
Records, Tarrant County, Texas.
3. Visible and apparent roadways and/or easements.
4. Easement from the City of Fort Worth to Community Natural Gas Co. by instrument
dated 10/31/30, filed 11/29/30, recorded in Volume 1126, Page 337, Real Property
Records, Tarrant County, Texas.
5. Easement and/or Right of Way from the City of Fort Worth to Illinois Pipe Line Co. by
instrument dated 5/18/32, filed 6/3/32, recorded in Volume 1166, Page 137, Real
Property Records, Tarrant County, Texas; conveyance to Premier Oil Refining Company
filed 7/3/63, recorded in Volume 3833, Page 569, Real Property Records, Tarrant
County, Texas.
EXHIBIT D TO LEASE AGREEMENT FOR 14\V'1 S r Q+j_44
NYLIB-469448.1 D-JMMARGER
EXHIBIT D
BASIC RENT PAYMENTS
1. Basic Rent. Subject to the adjustments provided for in Paragraphs 2, 3 and 4
below, Basic Rent payable in respect of the Term (including any Renewal Term) shall be
$504,000.00 per annum, payable monthly in advance on each Basic Rent Payment Date, in equal
installments of$42,000.00 each. Pro rata Basic Rent for the period from the date hereof through
the last day of April, 2008 shall be paid on the date hereof.
2. CPI Adjustments to Basic Rent. The Basic Rent shall be subject to adjustment, in
the manner hereinafter set forth, for increases in the index known as United States Department of
Labor, Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers, United States
City Average, All Items, (1982-84=100) ("CPI") or the successor index that most closely
approximates the CPI. If the CPI shall be discontinued with no successor or comparable
successor index, Landlord and Tenant shall attempt to agree upon a substitute index or formula,
but if they are unable to so agree, then the matter shall be determined by arbitration in
accordance with the rules of the American Arbitration Association then prevailing in New York
City. Any decision or award resulting from such arbitration shall be final and binding upon
Landlord and Tenant and judgment thereon may be entered in any court of competent
jurisdiction. In no event will the annual Basic Rent as adjusted by the CPI adjustment be less
than the annual Basic Rent in effect for the one (1) year period immediately preceding such
adjustment.
3. Effective Dates of CPI Adjustments. Basic Rent shall not be adjusted to reflect
changes in the CPI until the first(1st) anniversary of the Basic Rent Payment Date on which the
first full monthly installment of Basic Rent shall be due and payable (the "First Full Basic Rent
Payment Date"). As of the first (1 st) anniversary of the First Full Basic Rent Payment Date and
thereafter on each subsequent anniversary date, including, if the initial Term is extended, during
each Renewal Term, Basic Rent shall be adjusted to reflect increases in the CPI during the most
recent one (1) year period immediately preceding each of the foregoing dates (each such date
being hereinafter referred to as the "Basic Rent Adjustment Date").
4. Method of Adjustment for CPI Adjustment.
(a) As of each Basic Rent Adjustment Date when the average CPI determined
in clause (i)below exceeds the Beginning CPI (as defined in this Paragraph 4(a)), the Basic Rent
in effect immediately prior to the applicable Basic Rent Adjustment Date shall be multiplied by a
fraction, the numerator of which shall be the difference between (i) the average CPI for the three
(3) most recent calendar months (the "Prior Months") ending prior to such Basic Rent
Adjustment Date for which the CPI has been published on or before the forty-fifth (45th) day
preceding such Basic Rent Adjustment Date and (ii) the Beginning CPI, and the denominator of
which shall be the Beginning CPI. The product of such multiplication shall be added to the
Basic Rent in effect immediately prior to such Basic Rent Adjustment Date. As used herein,
"Beginning CPI" shall mean the average CPI for the three (3) calendar months corresponding to
the Prior Months, but occurring one (1) year earlier. If the average CPI determined in clause (i)
is the same or less than the Beginning CPI,the Basic Rent will remain the same for the ensuing
one (1) year period.
(b) Effective as of a given Basic Rent Adjustment Date, Basic Rent payable
under this Lease until the next succeeding Basic Rent Adjustment Date shall be the Basic Rent in
effect after the adjustment provided for as of such Basic Rent Adjustment Date.
ADDENDA TO SINGLE PROPERTY LEASE FORM-1
NYL I8-069448.14JMMARGER
(c) Notice of the new annual Basic Rent shall be delivered to Tenant on or
before the tenth(1 Oth)day preceding each Basic Rent Adjustment Date, but any failure to do so
by Landlord shall not be or be deemed to be a waiver by Landlord of Landlord's rights to collect
such sums. Tenant shall pay to Landlord, within ten (10)days after a notice of the new annual
Basic Rent is delivered to Tenant, all amounts due from Tenant, but unpaid, because the stated
amount as set forth above was not delivered to Tenant at least ten(10) days preceding the Basic
Rent Adjustment Date in question.
ADDENDA TO SINGLE PROPERTY LEASE FORM-2
NYLI B-469448.14JMMARGE R
Pagel of 2
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 3/25/2008
DATE: Tuesday, March 25, 2008
LOG NAME: 55TEXAV 4S REFERENCE NO.: **C-22726
SUBJECT:
Authorize Termination of City Secretary Contract Nos. 25211, 25212 and 31308 for Lease Sites 1S,
2S, 6S and 7S as Amended and Assigned at Fort Worth Meacham International Airport and Execute
a New Ground Lease Agreement for Lease Site 4S with TEXAV (TX) QRS 16-124, Inc., at Fort
Worth Meacham International Airport and Approve a Right of First Refusal for Lease Site 5S at Fort
Worth Meacham International Airport and Approve a Consent to Sublease Agreement to Texas
Aviation Services, Inc.
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to:
1. Terminate City Secretary Contract (CSC)-Nos:25211, 25212 and 31308, as amended and assigned,
for lease sites 1 S, 2S, 6S and 7S at Fort Worth Meacham International Airport;
2. Execute a new ground lease agreement for Lease Site 4S with TEXAV (TX) QRS 16-124, Inc., at
Fort Worth Meacham International Airport;
3. Approve the Right of First Refusal (ROFR) for Lease Site 5S with TEXAV (TX) QRS 16-124, Inc., at Fort
Worth Meacham International Airport; and
4. Approve a Consent to Sublease Agreement to Texas Aviation Services, Inc.
DISCUSSION:
The City Council previously approved the execution of unimproved ground lease agreements at Fort Worth
Meacham International Airport with CSC Nos. 25211 and 25212, as amended by CSC Nos. 26073, 27689,
33999, and 31807 for the lease of lease sites known as 1 S and 2S with Sandpiper Airport Inn, Inc. City
Council consented to the Assignment of CSC Nos. 25211 and 25212 as amended to Woody Woodard
Family Partnership Ltd., d/b/a Texas Aviation Services and Woodard Aviation Holdings, Ltd. City Council
also approved the execution of CSC No. 31308 with Woody Woodard Family Partnership, Ltd. for the
ROFR for Lease Sites known as 6S and 7S at Fort Worth Meacham International Airport.
Staff has received a request from Mr. Carl D. Woodard and Timothy D. Woodard to combine lease sites 1 S,
2S and the ROFR lease sites 6S and 7S into one lease under the name of TEXAV (TX) QRS 16-124, Inc.
(TEXAV), an entity managed and operated by W.P. Carey & Co. LLC and Carey Asset Management (WP
Carey). Woodard Aviation Holdings, Ltd. and Woody Woodard Family Partnership, Ltd has been bought by
WP Carey. In order to combine the lease sites and assign all to TEXAV, CSC Nos. 25211 and 25212 as
amended and assigned must be terminated and the City must enter into a new ground lease agreement.
Lease Sites 1 S and 2S will be brought up to the current established Schedule of Rates and Charges and 6S
and 7S will go to an unimproved ground rate. There will also be additional unimproved ground acquired by
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TEXAV that sits southwest of 2S and east of 6S and 7S. A new survey has been completed showing all the
lease areas combined, now known as Lease Site 4S, and will be attached as Exhibit 'A' to the lease
agreement.
TEXAV requests a ROFR on the land below the hill of their lease 4S. This will be known as Lease Site 5S.
Staff has no objection to a ROFR on 5S.
The total area of unimproved ground is 450,583 square feet at a rate of$.22 per square foot. Based on the
square footage of unimproved ground this lease will generate estimated revenue of$99,128.26 annually, or
$8,260.69 monthly. The total square footage for the ROFR lease site is approximately 7,600 square feet at
a rate of $.01 per square foot annually. Based on the square footage of ROFR this lease will generate
estimated revenue of approximately $76.00 annually. The total annual revenue generated from the lease
will be $99,204.26. Payment of rent for the lease sites will commence upon execution of the lease. Lease
site 5S is contingent upon completion of a ground survey.
TEXAV requests the approval of a Consent to Sublease Agreement with Texas Aviation Services, Inc.,
who currently occupies the facilities. Texas Aviation Services, Inc. has contributed significantly in the past to
the success of Fort Worth Meacham International Airport through the successful promotion and
management of their facilities. As a result of the contributions made, staff is in support of the site lease.
The initial term of the lease shall commence on the date of its execution and expire on May 31, 2038 with
two five-year options to renew. Rental rates shall be as described in the Schedule of Rates and Charges in
effect at that time. Rental rates shall be subject to an increase on October 1 st of any given year to reflect
the upward percentage change, if any, in the Consumer Price Index for the period since the last adjustment.
All agreement terms will be in accordance with established City and Aviation Department policies.
The property is located in COUNCIL DISTRICT 2.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that the Aviation Department will be responsible for the collection and deposit
of funds due to the City under this Agreement.
TO Fund/Account/Centers FROM Fund/Account/Centers
PE40 491352 0551101 $99,204.26
Submitted for City Manager's Office by: Tom Higgins (6266)
Originating Department Head: Kent Penney (5403)
Additional Information Contact: Leah Jipp (5409)
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