Lease and development agreement



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ARTICLE 1. DEFINITIONS


Accounting Principles” shall mean generally accepted accounting principles (GAAP) consistently applied.

Affiliate” shall mean any Person (as defined below) which, directly or indirectly, controls, is controlled by or is under common control with any other Person. “Control” shall be deemed to exist where any Person has possession of the power, directly or indirectly, to cause the direction of management and policies of a corporation, partnership, trust or other business entity, whether through voting securities, by contract, by common directors, officers or trustees or otherwise, provided, however, that notwithstanding the foregoing “Control” shall, in any event, be deemed to exist where any Person has ownership of fifty percent (50%) or more of all of the voting stock of a corporation or more than fifty percent (50%) of all of the legal or equitable interests in any other business entity. Affiliate shall also mean any individual who is a member of the immediate family (whether by birth or marriage) of a Person who is an individual, which includes for purposes of this definition a spouse, a brother or a sister of the whole or half blood of such Person, the spouse of any such brother or sister, a lineal descendant or ancestor (including an individual related by or through legal adoption) of such Person or any of the foregoing or a trust for the benefit of such Person or any of the foregoing.

Airport” shall mean John F. Kennedy International Airport in the County of Queens, City and State of New York.

Basic Lease” shall mean the Amended and Restated Agreement of Lease between The City of New York, as landlord, and the Port Authority, as tenant, dated as of November 24, 2004, as the same from time to time may be supplemented or amended and/or restated. Said agreement dated as of November 24, 2004, has been recorded in the Office of the Register of The City of New York, County of Queens, on December 3, 2004 with a City Register File Number of 2004000748687.

Basic Rental” shall mean the rental provided for in Section 4.1 hereof.

Building” shall have the meaning provided in Section 5.1 hereof.

Business Day” shall mean any day which is not a Saturday, Sunday or a day observed as a holiday by the State of New York, the State of New York or the Federal government.

Central Terminal Area” shall mean the area within the Airport so designated by the Port Authority, as shown on the drawing attached as Exhibit C, as such drawing may hereafter be amended.

Certificate of Completion” and “Certificate of Partial Completion” shall have the meanings provided in Section 5.21 hereof.

City” shall mean The City of New York, a municipal corporation of the State of New York.

Conceptual Plan” shall have the meaning provided in Section 5.2 hereof.

Construction Application” shall have the meaning provided in Section 5.3 hereof.

Construction Completion Date” shall have the meaning provided in Section 5.21 hereof.

Construction Completion Deadline” shall have the meaning provided in Section 5.3 hereof.

Construction Loan” shall have the meaning provided in Section 14A.l hereof.

Construction Mortgage” shall have the meaning provided in Section 14A.1 hereof.

Construction Mortgage Loan Amount” shall have the meaning provided in Section 14A.1 hereof.

Construction Permit” shall have the meaning provided in Section 5.3 hereof.

Construction Plans” shall have the meaning provided in Section 5.3 hereof.

Construction Work” shall mean any and all construction work performed by the Lessee, its contractors, subcontractors, agents or employees relating to or in connection with the Project pursuant to the terms of this Agreement, including but not limited to any “Partial Approval Work” (as defined below) and work performed subsequent to the Construction Completion Date.

Control” shall have the meaning provided in the definition of “Affiliate” above in this Article 1.

Development Costs” shall have the meaning provided in Section 15.1 hereof.

EDC” shall mean the New York City Economic Development Corporation, a local development corporation formed pursuant to Section 1411 of the Not-for-Profit Corporation Law of the State of New York, or such successor entity as may be designated by the City under the Basic Lease.

Environmental Damages” shall mean any one or more of the following: (i) the presence on, about or under the Premises of any Hazardous Substance and/or (ii) the disposal, release or threatened release of any Hazardous Substance from the Premises, and/or (iii) any personal injury (including wrongful death), property damage, deed/use restriction or natural resources damages arising out of or related to Hazardous Substances on, about or under the Premises or disposed of or released from the Premises, and/or (iv) the violation of any Environmental Requirements pertaining to Hazardous Substances.

Environmental Management Plan” shall have the meaning provided in Section 5.16(c) hereof.

Environmental Requirement(s)” shall mean all applicable present and future laws, statutes, enactments, resolutions, regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises, requirements and similar items, of all governmental agencies, departments, commissions, boards, bureaus, or instrumentalities of the United States, states and political subdivisions thereof and all applicable judicial, administrative, and regulatory decrees, judgments, and orders relating to the protection of human health or the environment, and in the event that there shall be more than one compliance standard, the standard for any of the foregoing to be that which requires the lowest level of a Hazardous Substance, the foregoing to include without limitation:


All requirements pertaining to reporting, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of Hazardous Substances into the air, surface water, groundwater, or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Substances, including without limitation the JFK SPEDES Permit; and

All requirements pertaining to the protection of the health, and safety of employees, the public or the environment.


Existing Condition” shall have the meaning provided in Section 20B(a) hereof.

Expiration Date” shall mean the day preceding the seventy-fifth anniversary of the earlier of (x) the Construction Completion Date and (y) the Construction Completion Deadline.

FAA” shall mean the Federal Aviation Administration of the United States of America.

Flight Center IP Rights” shall have the meaning provided in Section 25.1 hereof.

Force Majeure” shall have the meaning provided in Section 26.5 hereof.

Franchise Agreement” shall mean any franchise agreement entered into between the Lessee and the owner of a hotel brand or chain with respect to the development and/or operation of the Hotel, and (subject to the consent rights of the Port Authority pursuant to this Agreement) any successor to or replacement of such agreement.

Governmental Authority(ies)” shall mean the United States of America, the State of New York, the City of New York, and any agency, department, corporation, commission, board, bureau, instrumentality or political subdivision of any of the foregoing (excluding the Port Authority acting in its proprietary capacity) now existing or hereafter created, having or exercising jurisdiction over the Premises or any portion thereof including, without limitation, jurisdiction over the administration or enforcement of any Environmental Requirements.

Gross Revenues” shall have the meaning provided in Section 4.3.

Hazardous Substance(s)” shall mean and include without limitation any pollutant, contaminant, toxic or hazardous waste, dangerous substance, potentially dangerous substance, noxious substance, toxic substance, flammable, explosive or radioactive material, urea formaldehyde foam insulation, asbestos, polychlorinated biphenyls (PCBs), chemicals known to cause cancer or reproductive toxicity, petroleum and petroleum products and other substances which have been or in the future shall be declared to be hazardous or toxic, or the removal of which have been or in the future shall be required, or the manufacture, preparation, production, generation, use, maintenance, treatment, storage, transfer, handling or ownership of which have been or in the future shall be restricted, prohibited, regulated or penalized by any Environmental Requirement.

Hotel” shall mean the hotel developed and operated on the Premises pursuant to this Agreement.

Hotel Management Agreement” shall mean the hotel management agreement entered into between the Lessee [ ] with respect to the management and operation of the Hotel, a copy of which is attached as Exhibit E, and (subject to the consent rights of the Port Authority pursuant to this Agreement) any successor to or replacement of such agreement.

Indemnified Party(ies)” shall mean the City, EDC and the Port Authority, the Mayor of the City, each Commissioner of the Port Authority and each officer, director, agent, elected official, attorney for, employee and representative of the City, EDC and the Port Authority.

Index” shall mean the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the United States Department of Labor, New York, New York — Northeastern New York Area, All Items (1982-1984 = 100) or its successor.

Institutional Investor” shall have the meaning provided in Section 14A.1 hereof.

JFK SPEDES Permit” shall have the meaning provided in Section 5.16(a) hereof.

Land” shall have the meaning provided in Section 2.1 hereof.

Lease Commencement Date” shall have the meaning provided in Section 3.1 hereof.

Lease Year” shall mean (x) the period from the Lease Commencement Date through the last day of the calendar month in which the day preceding the anniversary of the Lease Commencement Date occurs, (y) each succeeding twelve-calendar-month period thereafter and (z) the succeeding period, if any, of less than twelve (12) full calendar months ending on the Expiration Date.

Lessee” shall mean [LESSEE], whose owners are ; or if the Lessee assigns or transfers its interest hereunder in accordance with the terms of this Agreement, the term “Lessee” shall also mean such assignee or transferee.

Lessee’s Architect/Engineer” shall have the meaning provided in Section 5.3 hereof.

Lessee’s Certificate” shall have the meaning provided in Section 5.16 hereof.

Matter” shall have the meaning provided in Section 5.15 hereof.

Meaningful Participation” shall have the meaning provided in Section 23.3 hereof.

MOA” shall have the meaning provided in the Recitals.

MOA Maintenance Guidelines” shall have the meaning provided in Section 7.2 hereof.

Mortgage” shall have the meaning provided in Section 14.1 hereof.

Mortgage Amount” shall have the meaning provided in Section 14A.l hereof.

New Lease” shall have the meaning provided in Section 14A.11 hereof.

Notice(s)” shall have the meaning provided in Section 24.1 hereof.

Partial Approval Plans” shall have the meaning provided in Section 5.4 hereof.

Partial Approval Work” shall have the meaning provided in Section 5.4 hereof.

Partial Construction Permit” shall have the meaning provided in Section 5.4 hereof.

Partial Occupancy Request” shall have the meaning provided in Section 5.21 hereof.

Payment Period” shall have the meaning provided in Section 4.3 hereof.

Permanent Loan” shall have the meaning provided in Section 14A.1 hereof.

Permanent Mortgage” shall have the meaning provided in Section 14A.l hereof.

Permanent Mortgage Loan Amount” shall have the meaning provided in Section 14A.l hereof.

Person” shall mean and include an individual, company (including a limited liability company), corporation, partnership, joint venture, estate, trust, unincorporated association, any Federal, state, county or municipal government, bureau, department or agency thereof, and any other entity.

Premises” shall have the meaning provided in Section 2.1 hereof.

Present Value” shall mean the value as of the date in question of a sum or sums to be paid or collected in the future, to be calculated using a discount rate equal to the weekly Bond Buyer Revenue Bond Index, as published in The Bond Buyer as of the date in question, plus one hundred (100) basis points; provided, however, that if the Bond Buyer Revenue Bond Index is no longer available, a successor index shall be used, or, in the absence thereof, the rate to be used for calculating Present Value shall be a discount rate certified by the Port Authority’s Chief Financial Officer, as of the date in question, as appropriate for such calculation.

Proceeds Payment” shall have the meaning provided in Section 15.2 hereof.

Proceeds Percentage” shall have the meaning provided in Section 15.1 hereof.

Prohibited Party” shall mean any Person, or any Person that is controlled by a Person, or any Person who is an Affiliate of, or holds five percent (5%) or more of the equity interest in, a Person:

(1) that has been or is currently under indictment for or convicted of a crime in any jurisdiction, or the subject of a criminal investigation by any federal, state or local prosecuting or investigative agency and/or a civil anti-trust investigation by any federal, state or local prosecuting or investigative agency;

(2) that has had a development agreement with the Port Authority terminated for willful default or breach, has had a contract terminated by a governmental agency in the States of New York or New Jersey for willful breach or default or has had a contract terminated for any cause relating to an indictment or conviction of such Person or its principals;

(3) that is in material default beyond any applicable grace period, under any agreement with the Port Authority or has been, within the preceding five (5) years, in material default, beyond any applicable grace period, under any agreement with the Port Authority;

(4) that has been suspended, debarred, found not responsible or otherwise disqualified from entering into any contract with any governmental agency or been denied a government contract for failure to meet standards related to integrity;

(5) that has had any sanction imposed as a result of a judicial or administrative proceeding related to fraud, extortion, bribery, bid rigging, embezzlement, misrepresentation or anti-trust regardless of the dollar amount of the sanctions or the date of their imposition;

(6) that is organized in or controlled from a country which is subject to any of the following: (i) the Trading with the Enemy Act of 1917, 50 U.S.C. App. §1, et seq., as amended; (ii) the International Emergency Economic Powers Act of 1976, 50 U.S.C. § 1701, et seq., as amended; and (iii) the Anti-Terrorism and Arms Export Amendments Act of 1989, codified at Section 6(j) of the Export Administration Act of 1979, 50 U.S.C. App. § 2405, as amended;

(7) that engages in any dealings or transactions or is blocked or subject to blocking pursuant to Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”), or is otherwise associated with any such Person in any manner violative of the Executive Order or any State or City of New York or the State of New Jersey statutes, codes, regulations, orders or other governmental action relating to activities referenced in this clause (7);

(8) that is on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order (“OFAC”) and/or with whom the Port Authority is restricted from doing business with under OFAC or under any statute, executive order, or other governmental action or any State or City of New York or the State of New Jersey statutes, codes, regulations, orders or other governmental action relating to activities referenced in this clause (8);

(9) that has (w) filed a petition under any insolvency statute, (x) made a general assignment for the benefit of its creditors, (y) commenced a proceeding for the appointment of a receiver, trustee, liquidator or conservator of itself or of the whole or any substantial part of its property or shall otherwise be dissolved or liquidated, or (z) filed a petition seeking reorganization or liquidation or similar relief under any applicable law or statute, or has been subject to any of foregoing in the preceding five (5) years;

(10) that is involved or has been involved in a material litigation or similar proceeding adverse to the Port Authority or any subsidiary thereof;

(11) whose involvement or presence in the Project or the Premises, in the Port Authority’s sole discretion, could create a potential security threat, and/or is repugnant to the public policy of the United States or other Governmental Authorities (it being understood that if any Person’s involvement in the Project and/or the Premises is subject to the express approval of a federal or state governmental actor, and all such approvals are granted, then such Person shall be deemed excluded from this clause (11));

(12) whose involvement or presence in the Project or the Premises would create any conflict of interest as defined under the Public Officers Law of the State of New York between any Commissioner of the Port Authority and itself or its chief executive officer, chief operating officer, chief financial officer, president, chairman of the board, other similar senior executive, or any Person or entity which controls, is controlled by, or is under common control with it; and

(13) that shall not subject or submit itself to the jurisdiction of the courts of the State of New York in any actions relating to the Project and/or this Agreement.

Project” shall mean the redevelopment of the Building and all other improvements to be located in and on the Premises, including the planning, design and construction work therefor.

Proportionate Share” shall have the meaning provided in Section 15.1 hereof.

Recognized Mortgagee” shall have the meaning provided in Section 14A.1 hereof.

Refinancing Loan” shall have the meaning provided in Section 14A.1 hereof.

Refinancing Mortgage” shall have the meaning provided in Section 14A.l hereof.

Refinancing Mortgage Loan Amount” shall have the meaning provided in Section 14A.l hereof.

Remediate” and “Remediation” shall have the meaning provided in Section 20B hereof.

Rent Commencement Date” shall mean the earliest to occur of the following: (x) the date that is 24 calendar months following the Lease Commencement Date (e.g. if the Lease Commencement Date were December 2, 2014, then the Rent Commencement Date would be December 2, 2016), (y) the date of issuance of the Certificate of Completion and (z) the date of issuance of the first Certificate of Partial Completion for any portion of the Building.

Rental” or “rental” shall mean all payments to be made by the Lessee pursuant to any provision of this Agreement, including without limitation all payments to be made by the Lessee pursuant to Article 5 hereof and late charges.

Requirements” shall mean all present and future laws, rules, orders, enactments, ordinances, resolutions, regulations, statutes, requirements, codes, directions and executive orders of any Governmental Authority, and shall also mean all present and future conditions imposed in connection with the issuance of any permit applicable to the Premises by any Governmental Authority.

Resident Engineer” shall mean the person designated as the Resident Engineer at the Airport by the Chief Engineer of the Port Authority.

RFP” shall have the meaning provided in the Recitals.

Rules and Regulations” shall mean the Rules and Regulations of the Airport from time to time in effect.

Sale” shall have the meaning provided in Section 15.1 hereof.

SHPO” shall have the meaning provided in the Recitals.

Single Purpose Entity” shall have the meaning provided in Section 3.3 hereof.

Sublease” shall have the meaning provided in Section 14.1 hereof.

Subtenant” shall have the meaning provided in Section 14.1 hereof.

Subtenant Impositions” shall have the meaning provided in Section 4.4 hereof.

Taxes” shall mean ad valorem real estate taxes now or hereafter levied or assessed by the State of New York and/or the City of New York.

Termination Notice” shall have the meaning provided in Section 14A.5 hereof.

Total Project Cost” shall mean all Development Costs incurred through the Construction Completion Date to the extent such costs are included in the project budget approved by the prospective Recognized Mortgagee under the Construction Loan.

Transfer” shall have the meaning provided in Section 14.1 hereof.

Upper Scale Hotel” shall mean a (x) hotel that is ranked as “upper upscale” or better in the chain scale segment by Smith Travel Research (STR) or that is ranked in the “upscale” segment or better by J.D. Power and Associates North America Guest Satisfaction Index Study and that is within the market price segments defined by STR as representing the top 30% of average room rates in the New York, New York metro STR market or (y) a hotel that is a boutique hotel with no chain affiliation that meets the quality level standards set forth in the preceding clause (x). If the hotel rankings published by both Smith Travel Research and J.D. Power and Associates North American Guest Satisfaction Index Study are discontinued, the parties shall mutually agree upon another substantially similar publication which ranks hotel chains based upon substantially similar criteria such as performance and services.



WBE” shall have the meaning provided in Section 21.3 hereof.
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