Lease and development agreement

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Section 2.1 Letting.

  1. Premises. Subject to and in accordance with the terms and conditions of this Agreement, the Port Authority hereby lets to the Lessee and the Lessee hereby hires and takes from the Port Authority at the Airport the premises, substantially as shown on Exhibit A hereto, together with all buildings, structures, fixtures, improvements and other property of the Port Authority located therein, thereon or thereunder, and all structures, improvements, additions, buildings, installations and facilities located, constructed or installed, or which may be located, constructed or installed therein, thereon or thereunder, and the equipment permanently affixed or permanently located therein, such as electrical, plumbing, sprinkler, fire protection and fire alarm, heating, steam, sewage, drainage, refrigerating, communications, gas and other systems, and their pipes, wires, mains, lines, tubes, conduits, equipment and fixtures, and all paving, drains, culverts, ditches and catch-basins constructed therein, thereon or thereunder as of the Lease Commencement Date (all of the foregoing, collectively, the “Premises”). The parties acknowledge that the Premises constitute non-residential real property.

  2. No Rights in Air Space. Except as and to the extent expressly approved by the Port Authority pursuant to the provisions of Article 5, entitled “Construction”, nothing contained in this Agreement shall grant to the Lessee any rights whatsoever in the air space above the Premises. In no event shall the Lessee place any structure or other obstruction above the line-of-sight height limitations shown in Exhibit D.

Section 2.2 Limitations of Rights and Privileges.

The Premises are let to the Lessee and the Lessee takes the same subject to all easements, restrictions, reservations, covenants and agreements to which the Premises may be subject as of the Lease Commencement Date, consisting of the following: (i) the Basic Lease; (ii) the MOA and the stipulations contained therein that are applicable to the Project; (iii) rights of the public in and to any public street; (iv) rights, if any, of any enterprise, public or private, which is engaged in furnishing lighting, power, telegraph, telephone, steam or other utility services, and of the City, and of the State of New York; and (v) permits, licenses, regulations and restrictions, if any, of the United States, the City, the State of New York or of any other Governmental Authority.

Section 2.3 Condition of Premises.

The Lessee acknowledges that the Lessee is fully familiar with the Premises, the physical condition thereof, and the Basic Lease. The Lessee acknowledges and agrees that except as otherwise expressly set forth in this Agreement, no representations, statements, or warranties, express or implied, have been made by or on behalf of the Port Authority in respect of the Premises, the status of title thereof, the physical condition thereof, the zoning or other laws, regulations, rules and orders applicable thereto, Taxes, or the use that may be made of the Premises, that the Lessee has relied on no such representations, statements or warranties, and that the Port Authority shall not in any event whatsoever be liable for any latent or patent defects in the Premises. Except as otherwise expressly set forth herein, the Lessee hereby agrees to take the Premises in the condition they are in as of the Lease Commencement Date, to assume all responsibility for any and all risks, costs and expenses of any kind whatsoever caused by, arising out of or in connection with the condition of the Premises, whether any aspect of such condition existed prior to, on or after the Lease Commencement Date, including without limitation all Environmental Requirements and Environmental Damages, and to indemnify and hold harmless the Indemnified Parties for all such risks, responsibilities, costs and expenses. The Lessee’s foregoing obligations with respect to the responsibilities, risks, costs and expenses assumed by the Lessee shall survive the expiration or termination of this Agreement.

Section 2.4 Delivery of Possession.

Except as otherwise expressly provided herein, the Port Authority shall deliver possession of the Premises on the Lease Commencement Date vacant and free of occupants and tenancies.


Section 3.1 Term.

The term of the letting under this Agreement shall commence on , 201 (the “Lease Commencement Date”) and shall expire, unless sooner terminated in accordance with any other provisions of this Agreement, at 11:59 P.M. local time on the Expiration Date.

Section 3.2 Permitted Use.

  1. Permitted Use. The Premises may be used solely for the development and operation of a full-service hotel incorporating the TWA Flight Center, with a minimum Upper Scale Hotel market class designation, with retail, meeting and event facilities; spa and fitness center; restaurants and lounges; an interpretive display relating to the TWA Flight Center and the Airport; and outdoor recreation areas. The Lessee shall not use or allow the use of the Premises for any other purpose or purposes whatsoever.

(b) Management and Franchise Agreements.

(1) Each Hotel Management Agreement and Franchise Agreement (including the Franchise Agreement, if any, entered into with respect to the Premises for the operation of the Hotel, and all amendments and/or modifications thereto) shall be subject to the approval of the Port Authority and shall provide that in the event of the Port Authority’s reentry and repossession of the Premises following a termination of this Agreement due to an Event of Default, such Hotel Management Agreement or Franchise Agreement shall be terminable by the Port Authority on not more than thirty (30) days’ written notice at no cost or other obligation on the part of the Port Authority. Although the Port Authority shall be afforded an opportunity to review and approve each Hotel Management Agreement or Franchise Agreement, such review shall in no event be deemed to be a consent by the Port Authority to any of the terms set forth in such Hotel Management Agreement or Franchise Agreement a waiver of any of the terms of this Agreement, and the provisions of this Agreement shall control in all events.

Section 3.3 Single Purpose Entity.

  1. Lessee to be Single Purpose Entity. The Lessee shall at all times hereunder be a Single Purpose Entity.

(b) Definition.

Single Purpose Entity” shall mean a Person, other than an individual, that:

  1. is formed or organized solely for the purpose of holding, in the case of the Lessee, directly, or, in the case of a general partner, managing member or sole member of the Lessee, indirectly, an ownership interest in the leasehold estate created by this Agreement,

does not engage in any business unrelated to its ownership of the leasehold estate created by this Agreement and its operation, improvement, financing, leasing and management of the Premises,

has not and will not have (A) any assets other than those related to its business as described in the foregoing clause (ii) and (B) any indebtedness other than (p) indebtedness which is not prohibited to be incurred by the terms of this Agreement, (q) trade payables incurred in the ordinary course of business, (r) partner or member loans (pursuant to which the lender thereunder has no enforcement rights against the Premises whatsoever other than the right to convert into direct or indirect equity ownership in the Lessee and no rights to initiate any litigation or bankruptcy proceeding against the Lessee other than litigation to enforce any such conversion right), (s) obligations assumed hereunder on the Lease Commencement Date, (t) obligations incurred and related to its ownership, operation, improvement, financing, leasing and management of its interest in the Premises, and (u) obligations otherwise incurred in accordance with the terms of this Agreement,

maintains its own separate books and records and its own accounts, which in each case are separate and apart from the books and records and accounts of any other Person,

holds itself out as being a Person, separate and apart from any other Person,

does not and will not commingle its funds or assets with those of any other Person,

conducts its own business in its own name,

maintains separate financial statements,

pays its own liabilities out of its own funds,

observes all partnership, corporate or limited liability company formalities applicable to it,

maintains an arm’s-length relationship with its Affiliates,

pays the salaries of its own employees, if any, and maintains a sufficient number of employees in light of its contemplated business operations,

does not guarantee or otherwise obligate itself with respect to the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person, other than “take-over” or similar obligations,

does not acquire obligations or securities of its partners, members or shareholders,

allocates fairly and reasonably shared expenses, including without limitation any overhead for shared office space, if any,

uses separate stationery, invoices, and checks,

does not and will not pledge its assets for the benefit of any other Person or make any loans or advances to any other Person, in each case other than as permitted pursuant to the terms of this Agreement or any agreement applicable to the ownership, operation, management, improvement or financing of its interest in the Premises,

takes all reasonable steps and actions to correct any known misunderstanding regarding its separate identity, and

maintains, or has reasonable access to, reasonably adequate capital in light of its contemplated business operations.

(c) Additional Requirements. In addition to the requirements set forth above, the following requirements shall be applicable to the Lessee and its general partner(s), managing member(s) or non-member manager(s) (or if the Lessee is wholly-owned by a single member limited liability company, to Lessee’s managing member or non-member manager):

  1. if such Person is a partnership, all general partners of such Person shall be Single Purpose Entities;

if such Person is a partnership and has more than one general partner, then the organizational documents of such Person shall provide that it shall continue (and not dissolve) for so long as a solvent general partner exists;

if such Person is a corporation, then, at all times, such Person shall have at least one (1) Independent Director/Manager, and the board of directors of such Person may not take any action requiring the unanimous affirmative vote of 100% of the members of the board of directors unless all of the directors, including all Independent Directors/Managers, shall have participated in such vote;

except as set forth above, if such Person is a limited liability company, each managing member or non-member manager shall be a Single Purpose Entity;

if such Person is a limited liability company, the articles of organization, certificate of formation and/or operating agreement, as applicable, of such Person shall provide that it shall not dissolve upon the bankruptcy of its managing member or sole member unless a new managing member or new sole member shall not be appointed upon any such bankruptcy (or, if such Person is a Delaware limited liability company, as otherwise provided under Section 18-802 of the Delaware Limited Liability Company Act), and if such Person has more than one managing member, then the organizational documents shall provide that such Person shall continue (and not dissolve) for so long as a solvent managing member exists;

such Person without the unanimous consent of all of the partners, directors or members, as applicable, including the unanimous consent of all Independent Directors/Managers, has not and will not with respect to itself or to any other Person in which it has a direct or indirect legal or beneficial interest (A) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or other similar official for such Person or all or any portion of such Person’s properties, or (B) take any action that would cause such Person to become insolvent; and

the Lessee and each Person required to be a Single Purpose Entity hereunder shall obtain the consent of all its members or partners, as applicable, including, without limitation, each Independent Director/Manager, to (A) file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings or to authorize it to do so, or (B) consent to or acquiesce in the filing of an involuntary bankruptcy or insolvency proceeding, and the organizational documents of each of them shall expressly prohibit the taking of any action to (x) dissolve or liquidate, or (y) amend its organizational documents with respect to any Single Purpose Entity requirements as set forth in this definition.

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