EXHIBIT 10.9
WILMINGTON AIRPARK SUBLEASE
THIS SUBLEASE (this "Sublease") is made as of the day of ,
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2003, by and between AIRBORNE, INC., a corporation duly organized and presently
existing under the laws of Delaware ("Sublessor"), and ABX AIR, INC., a
corporation duly organized and presently existing under the laws of Delaware
("Sublessee").
RECITALS
A. Sublessor is currently the "tenant" under that certain AMENDED AND
RESTATED LEASE of even date herewith (as the same may be amended from time to
time, hereinafter, the "Master Lease"), by and between Sublessor's
predecessor-in-interest (ABX Air, Inc.), as tenant, and Wilmington Air Park,
Inc., an Ohio corporation, as landlord. Wilmington Air Park, Inc. has
subsequently merged into and become Wilmington Air Park, LLC, a Delaware limited
liability company (together with its successors and assigns, the "Master
Landlord"). A copy of the Master Lease is attached hereto as Exhibit A and by
this reference is made a part hereof. All initially capitalized terms used in
this Sublease without definition have the meanings given such terms in the
Master Lease.
B. Pursuant to the Master Lease, Sublessor leases from Master Landlord all
of that certain real property, improvements, personal property and other
property described as the "Leased Premises" in and under the Master Lease (all
such property referred to herein as the "Airport").
C. Sublessor desires to sublease to Sublessee, and Sublessee desires to
hereby sublease from Sublessor, the portion of the Airport more particularly
described and depicted in Exhibit B attached hereto (such portion hereinafter
referred to as the "Subleased Premises"), together with the right to use certain
Common Use Facilities (defined in this Sublease below), upon the terms and
conditions of this Sublease.
AGREEMENT
In consideration of the mutual covenants contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Sublease. Sublessor hereby subleases and demises to Sublessee, and
Sublessee hereby hires and takes from Sublessor, the Subleased Premises,
together with the right, in common with others, to use the "Common Use
Facilities" of the Airport described in Section 6 below, upon the terms and
subject to the conditions set forth in this Sublease. The Common Use Facilities
include, among other facilities, the ramp and other airfield areas providing
aircraft access to and from the Subleased Premises.
2. Term. The term of this Sublease shall commence on the date hereof and
shall end upon the expiration of the "transition period" provided pursuant to
that certain ACMI
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Service Agreement of even date herewith, by and between Sublessor and Sublessee
(the "ACMI Agreement").
3. Rent.
3.1 Rent Obligation. In consideration of the right to use and occupy
the Subleased Premises and other rights of Sublessee hereunder, Sublessee shall
pay to Sublessor gross annual rent ("Rent") in the amount of Four and 00/100
Dollars ($4.00) per square foot of rentable area contained within the buildings
constituting the Subleased Premises (i.e., as of the date of this Sublease, the
aggregate annual Rent will equal One Million Nine Hundred Seventy-Seven Thousand
Three Hundred Eight and 00/100 Dollars ($1,977,308.00) calculated as $4
multiplied by 494,327 square feet of rentable area contained within the
Subleased Premises), subject to annual adjustments pursuant to and in accordance
with this Section 3 below. Such Rent shall be paid to Sublessor in twelve (12)
equal monthly installments of $164,775.67, subject to annual adjustment pursuant
to and in accordance with this Section 3 below. Such monthly installments of
Rent shall be payable in advance on the first day of each calendar month during
the term of this Sublease. If the term of this Sublease commences on a day other
than the first day of a calendar month or terminates on a day other than the
last day of a calendar month, then the monthly installments of Rent accruing
under any provision of this Sublease for such month or months shall be prorated,
based on the actual number of days in such month. Sublessor and Sublessee hereby
acknowledge and agree that, for all purposes under this Sublease, the Subleased
Premises as of the date of this Sublease contains 494,327 square feet of
rentable area.
3.2 Annual Rent Adjustments. Rent shall be subject to adjustment on
January 1 of each calendar year during the term of this Sublease (each such
date, an "Adjustment Date"). On each Adjustment Date, Rent shall be adjusted as
follows. On January 1, 2004, the monthly Rent in effect during 2003 shall be
multiplied by a fraction, the numerator of which is the Index (as defined
hereinbelow) in effect as of January 1, 2004, and the denominator of which is
Index in effect as of the date of this Sublease. On each Adjustment Date
occurring after January 1, 2004, the monthly Rent in effect for the period
immediately prior to such Adjustment Date shall be multiplied by a fraction, the
numerator of which is the Index in effect as of such Adjustment Date, and the
denominator of which is the Index in effect as of the prior Adjustment Date. As
used in this Sublease, the term "Index" shall mean the most recent United States
Department of Labor, Bureau of Labor Statistics, Consumer Price Index for all
Urban Consumers - All Items - for the area where the Subleased Premises is
located (the "Index"). If the Index at any time during the term of this Sublease
has changed so that the base year of the Index differs from the base year
initially used by the parties, the Index shall be converted in accordance with
the conversion factor published by the United States Department of Labor, Bureau
of Labor Statistics. If the Index is discontinued or revised during the Sublease
term, such other government index or computation with which it is replaced shall
be used in order to obtain substantially the same result as would be obtained if
the Index has not been discontinued or revised. Notwithstanding the foregoing,
in no event shall the adjusted monthly Rent due during any year be less than the
monthly Rent due during the prior year.
3.3 Gross Lease. Notwithstanding anything to the contrary stated or
implied in the Master Lease, this Sublease is intended to be and constitute, and
is, a gross lease, and
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Sublessee shall have no obligation to pay any fees, costs, expenses or other
amounts in respect of the Subleased Premises, this Sublease or its rights
thereto or hereunder, except as otherwise expressly provided in this Sublease.
4. Payment of Real Property Tax. Notwithstanding anything to the contrary
stated in the Master Lease, Sublessee shall have no obligation or responsibility
for the payment of real property taxes assessed against, or imposed upon, the
Subleased Premises or any portion of the Airport.
5. Use of Subleased Premises.
5.1 Principal Use As Airport. Sublessee hereby acknowledges that the
principal use of the Airport consists of the operation of an airport and freight
sorting facility and that all other businesses and operations that are now or
hereafter permitted by Master Landlord or Sublessor to be conducted on or at the
Airport, including Sublessee's use of the Subleased Premises pursuant to this
Sublease, must at all times be compatible with such principal use, as Master
Landlord and Sublessor, in their sole and absolute discretion, shall determine.
5.2 Restrictions on Use of Subleased Premises. Sublessee covenants and
agrees that it shall use the Subleased Premises only for its Air Cargo
Operations and any legally permitted uses related thereto (including, without
limitation, the landing, taking off, flying over, taxing, pushing, towing,
fueling, loading, unloading, repairing, maintaining, conditioning, servicing,
and parking of aircraft or other equipment). As used herein, the term "Air Cargo
Operations" shall mean (1) the business of warehousing, sorting and transporting
goods, cargo, and mail which arrive or depart by air or ground, (2) the
maintenance, servicing, repair, and operation of aircraft and other equipment,
(3) the sale of aircraft parts and fuel, (4) the operation of a cafeteria and
concession machines for Sublessee's employees, agents, contractors and invitees,
and (5) all other operations that are incidental to the uses, purposes,
operations and activities described in clauses (1) through (4) above.
5.3 Reservation of Rights. There is hereby reserved to Master
Landlord, Sublessor, and their respective successors and assigns, for the use
and benefit of each such person and other present and future lessees, sublessees
and sub-sublessees, a right of flight for the passage of aircraft in the
airspace above the surface of the Subleased Premises and the other areas of the
Airport. This right of flight shall include the right to cause within said
airspace any noise inherent in the operation of any aircraft used for navigation
or flight through said airspace or landing at, taking off from or operating on
the Airport.
6. Common Use Facilities.
6.1 Common Use Facilities. As an appurtenance to Sublessee's
subleasehold estate in and use of the Subleased Premises, Sublessee is hereby
granted, for itself and for the benefit of its permitted subtenants, invitees
and assigns, the non-exclusive right, at any time and from time to time, to
enter upon or make customary and reasonable use of, including the right to
ingress to and egress from, (i) all runways, landing areas, taxiways, aprons,
roadways, runway lights, signals, and other operating aids of the Airport and
all navigation or flight easements now or hereafter granted or reserved for the
benefit of Master Landlord and Sublessor, (ii) all
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automobile parking facilities within the Airport (including the right of
Sublessee, its employees, agents, contractors and invitees to park at such
facilities), and (iii) such other areas of the Airport provided and developed by
Master Landlord and/or Sublessor for aviation use at the Airport (collectively,
the "Common Use Facilities"). Sublessee's rights hereunder shall be in common
with Master Landlord, Sublessor and with other persons authorized by Master
Landlord and/or Sublessor from time to time to use the Common Use Facilities,
including members of the general public if Master Landlord or Sublessor so elect
and shall be exercised by Sublessee and its permitted subtenants, invitees and
assigns subject to all applicable Laws, including, without limitation, all FAA
and all other applicable governmental regulations governing aviation and air
navigation and to the reasonable uniform rules and procedures adopted by Master
Landlord and/or Sublessor from time to time governing the use of the Airport and
the Common Use Facilities.
6.2 Reservation of Right to Make Changes. Sublessor (on behalf of
itself and Master Landlord) reserves the right, in its sole and absolute
discretion, to make changes, at any time and from time to time, in the size,
shape, location, number and extent of the Common Use Facilities and specifically
further reserves the right to designate portions of the Common Use Facilities
for the exclusive or non-exclusive use of certain subtenants and licensees so
long as such changes and/or designations do not unreasonably interfere with
Sublessee's aircraft access to and from the Subleased Premises or the operation
of Sublessee's business on or about the Subleased Premises.
7. Maintenance, Repairs, and Common Area Services. Sublessor shall keep the
entire Airport, including, without limitation, the Common Use Facilities, the
Subleased Premises, the improvements located thereon, and the interior and
exterior walls, electrical and plumbing systems, floors, roofs, HVAC and other
equipment , and all other portions of the improvements located on the Airport
(including the Subleased Premises), whether interior or exterior and whether
used exclusively for the Subleased Premises or in common with other premises, in
reasonably good and safe operating condition and repair throughout the entire
term of this Sublease. Without limiting the generality of the foregoing,
Sublessor's obligations hereunder shall include the obligation to, at
Sublessor's sole cost and expense, clean, repair, restore, replace, and maintain
all improvements and areas within the Airport (including, without limitation,
the Subleased Premises, Common Use Facilities and all improvements located
thereon) in good operating condition throughout the term of this Sublease,
provided such obligation shall in no way include any obligation of Sublessee
under Section 10 of this Sublease. Notwithstanding anything to the contrary
stated or implied herein, in no event will Sublessor be obligated to repair,
restore, replace, or maintain any trade fixtures, equipment or personal property
of Sublessee located on or about the Subleased Premises, it being acknowledged
and agreed that Sublessee will be solely responsible for the replacement,
repair, restoration, and/or maintenance of Sublessee's property brought onto the
Subleased Premises by Sublessee.
8. Utilities; Services.
8.1 Services Provided by Sublessor. Sublessor shall provide heating,
ventilation, air conditioning, electricity, and janitorial service as reasonably
required, water for reasonable
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and normal drinking and lavatory use, and replacement light bulbs and/or
fluorescent tubes and ballasts for standard overhead fixtures.
8.2 Services Exclusive to Sublessee. Sublessee shall pay for all
water, gas, heat, light, power, telephone and other utilities and services
supplied and/or metered to the Subleased Premises or to Sublessee, together with
any taxes thereon, directly to the applicable utility or service provider.
8.3 Hours of Service. All services to be provided by Sublessor
hereunder will be available twenty-four (24) hours per day seven (7) days a
week.
9. Insurance. Sublessor and Sublessee shall maintain the following
insurance during the term of this Sublease.
9.1 Fire and Extended Coverage Insurance. Sublessor hereby agrees
that, at all times throughout the term of this Sublease and at Sublessor's sole
costs and expense, it will obtain and keep in force a policy or policies of
insurance covering loss or damage to the Subleased Premises, Common Use
Facilities and all buildings, improvements, fixtures, and personal property
located thereon, in an amount that is not less than the full replacement value
thereof, as the same may exist from time to time, providing protection against
all perils included within the classification of fire, extended coverage,
vandalism, malicious mischief, flood (in the event same is required by a lender
having a lien on the Airport), special extended perils ("all risk," as such term
is used in the insurance industry), plate glass insurance and such other
insurance as Sublessor deems advisable from time to time or as may be required
by the Master Lease.
9.2 Sublessee's Insurance. During the term of this Sublease, Sublessee
shall, to the extent available on commercially reasonable terms, maintain the
following insurance in the form and with insurers reasonably satisfactory to
Sublessor and with terms and policy limits (except as otherwise provided below)
to be agreed upon by Sublessor and Sublessee:
A. All risk hull and war risk insurance, including ground coverage, on
the aircraft-valued form with sufficient limits for full recovery of the
book value of any aircraft of Sublessee (unless a U.S. government indemnity
is provided in lieu thereof). These policies shall cover the Subleased
Premises (in addition to all other geographical areas of operation for
Sublessee). Any deductibles shall be for the account of Sublessee, except
for damage caused solely by the gross negligence or willful misconduct of
Master Landlord or Sublessor or any constituent, employee, agent,
contractor, invitee, assignee, successor, tenant or sublessee of Master
Landlord or Sublessor;
B. Aircraft liability insurance, including bodily injury and death,
property damage and passenger legal liability in at least the amount of
$1,000,000,000 combined single limit;
C. Worker's compensation as required by law and employer's liability
insurance with a limit of not less than $1,000,000 per occurrence;
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D. Comprehensive General Liability Insurance (including contractual
liability) with a combined single limit of not less than $5,000,000;
E. Automobile liability insurance with a combined single limit of not
less than $5,000,000;
F. Airport premises liability insurance with a combined single limit
of not less than $500,000,000;
G. All risk cargo liability insurance in the minimum amount of
$10,000,000 per occurrence; and
H. Property insurance covering standard "all risk" perils for
Sublessee-owned equipment and facilities (such as Trade Fixtures and
Lessee's Personal Property).
The insurance in Subsections 9.2A, B, D, E & F shall include the following
provisions:
. An endorsement naming Master Landlord, Sublessor and their respective
agents, contractors, employees, and invitees as additional insureds;
. A standard clause as to cross liability or severability of interests
among parties appearing as insureds;
. An acceptance by the underwriters of the contractual obligations of
Sublessee to Sublessor under Section 18 of this Sublease below;
. A clause stating that the interests of Sublessor, Master Landlord and
their respective agents, contractors, employees, and invitees are insured
regardless of any breach or failure or violation by Sublessee of any warranties,
representations, declarations or conditions contained in such policies,
including the failure to pay premiums;
. Waivers of underwriters' rights of subrogation against any party hereto,
and its parent, its affiliated companies, and the officers, directors, agents
and employees of each of those companies; and
. The insurance will be for primary coverage, without right of contribution
from any insurance maintained by Sublessor.
10. Compliance With Laws.
Sublessee, at Sublessee's sole cost and expense, shall obtain and
maintain in effect at all times during the term of this Sublease all licenses,
permits, certificates, approvals and authorizations required by any Governmental
Authority having jurisdiction over Sublessee, Sublessee's business and
operations, or the Subleased Premises, including, without limitation, all
licenses, permits, certificates, approvals and other authorizations required by
the FAA, the TSA and/or any similar Governmental Authority with jurisdiction.
Sublessee shall materially comply with all applicable Laws governing or
regulating matters of health, safety or security or the use or occupancy of the
Subleased Premises or the Common Use Facilities, or the operation of the
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Airport, including all rules and regulations promulgated by the FAA, the TSA,
and/or any similar Governmental Authority with jurisdiction, all rules,
regulations, policies and guidelines of Sublessor promulgated pursuant to
Section 12 of this Sublease, and all orders of any Governmental Authority having
jurisdiction over Sublessee, Sublessee's business and operations, the Subleased
Premises, or the Common Use Facilities.
In addition to and without limiting the generality of the foregoing,
Sublessee, at Sublessee's expense, shall materially comply with all present and
hereinafter enacted Environmental Laws, and any amendments thereto, affecting
Sublessee's use, operation, occupation or alteration of the Subleased Premises
and the Common Use Facilities including any improvements thereon.
A. Compliance.
1. Sublessee shall not cause or permit any Hazardous Material to
be used, generated, manufactured, produced, stored, brought upon, or
Released, on, under or about the Subleased Premises or Common Use
Facilities, or transported to and from the Subleased Premises or
Common Use Facilities, by Sublessee or any of its agents, employees,
contractors, or invitees in material violation of any applicable
Environmental Law. Sublessee shall indemnify, defend and hold harmless
Sublessor, its successors and assigns, its employees, agents and
attorneys from and against any and all liability, loss, damage,
expense, penalties and legal and investigation fees or costs, arising
from or related to any claim or action for injury, liability, breach
of warranty or representation, or damage to persons or property, to
the extent alleging or arising in connection with the contamination
of, or adverse effects on, the environment or violation of any
applicable Environmental Law or other applicable Law of any
Governmental Authority which in any case are incurred or assessed as a
result of any negligence or willful misconduct, or activity or
operation, of Sublessee or its agents, contractors, employees, or
invitees on or about the Subleased Premises or Common Use Facilities
or elsewhere at the Airport during the term of this Sublease, except
in any case to the extent caused by the negligence or willful
misconduct of Master Landlord or Sublessor or any of their respective
agents, contractors, employees, or invitees (other than Sublessee or
anyone claiming by or through Sublessee). Sublessee's obligations and
liabilities under this paragraph shall continue so long as Sublessor
bears any liability or responsibility under any applicable
Environmental Laws or under the Master Lease for any activity or
operation, or negligence or willful misconduct, of Sublessee or any of
its agents, employees, contractors, or invitees that occurred on the
Subleased Premises or Common Use Facilities or elsewhere at the
Airport during the term of this Sublease, to the extent such activity
or operation gives rise to any indemnification obligation of Sublessee
pursuant to the foregoing sentence. This indemnification of Sublessor
by Sublessee includes, without limitation, costs incurred in
connection with any investigation of site conditions or any cleanup,
remedial, removal or restoration work required by any Governmental
Authority because of any matter covered by Sublessee's indemnification
hereinabove set forth. The parties agree that Sublessor's right to
enforce Sublessee's promise to indemnify is
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not an adequate remedy at law for Sublessee's violation of any
provision of this Section. Sublessor shall also have all other rights
and remedies provided by Law or otherwise provided in this Sublease.
2. Without limiting the foregoing, if any Hazardous Materials
condition covered by Sublessee's indemnification obligations set forth
above occurs during the term of this Sublease, Sublessee shall
promptly take all actions at its sole cost and expense as are
reasonably necessary to return the Subleased Premises and, if
applicable, the Common Use Facilities and other areas at the Airport,
and surrounding property in all material respects to the condition
existing prior to the introduction of any such Hazardous Material;
provided that, Sublessor's approval of such actions shall first be
obtained, which approval shall not be unreasonably withheld,
conditioned or delayed.
3. Sublessee, at Sublessee's own cost and expense, shall make all
submissions to, provide all information to, and comply with all
applicable requirements of the appropriate Governmental Authorities
(the "Government") as required under applicable Environmental Laws.
If, due to a release of a Hazardous Material by Sublessee or any
person for whom Sublessee is responsible pursuant to this Section 10,
or due to any other presence or Release of Hazardous Material for
which Sublessee is expressly responsible pursuant to this Section 10,
the Government determines that site characterization, site assessment
and/or a cleanup plan be prepared or that a cleanup should be
undertaken on the Subleased Premises, Common Use Facilities, elsewhere
at the Airport, or surrounding property, then Sublessee shall, at
Sublessee's own cost and expense, prepare and submit the required
plans and financial assurances, and carry out the approved plans. At
no cost or expense to Sublessor, Sublessee shall promptly provide all
information requested by Sublessor to (a) determine the applicability
of the Environmental Laws to the Subleased Premises, or Common Use
Facilities, or elsewhere at the Airport in connection with Sublessee's
business or operations, or (b) respond to any governmental
investigation or any claim of liability by third parties which is
related to environmental contamination in connection with the
Subleased Premises, or the Common Use Facilities, or elsewhere at the
Airport in connection with Sublessee's business or operations.
4. Sublessee shall promptly notify Sublessor of any of the
following: (a) any correspondence or communication from any
Governmental Authority regarding the application of Environmental Laws
to the Subleased Premises or Common Use Facilities or Sublessee's
operation on the Subleased Premises, Common Use Facilities, or
elsewhere at or affecting the Airport, and (b) any change in
Sublessee's operation on the Subleased Premises or Common Use
Facilities or elsewhere at the Airport that will change or could
reasonably be expected to change Sublessee's or Sublessor's
obligations or liabilities under applicable Environmental Laws.
Notwithstanding any other provision in this Sublease to the contrary,
Sublessor shall have the right of "self-help" or similar remedy in order to
minimize any damages, expenses,
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penalties and related fees or costs, arising from or related to a material
violation of any Law on, under or about the Subleased Premises or Common Use
Facilities by Sublessee, the cost of which shall be borne by Sublessee.
The failure of Sublessee or its agents, employees, contractors, or
invitees to comply with any of the requirements and obligations of this Section
shall constitute a material default of this Sublease and shall permit Sublessor
to pursue the remedies available to Sublessor for such a breach.
B. Reporting.
1. At any time that Sublessee submits any filing pertaining to
its property, operations, or presence on the Subleased Premises or the
Common Use Facilities to any Governmental Authority (other than the
Internal Revenue Service) by way of example but not in limitation, the
Federal Aviation Administration, the Environmental Protection Agency
or any similar State of Ohio agency or department, Sublessee shall,
upon request of Sublessor, provide duplicate copies of the filing(s)
made, along with any related documents, to Sublessor.
2. Upon expiration, termination or cessation of this Sublease for
any reason, Sublessee shall provide current environmental inspection
and inventory reports on the Subleased Premises, as Sublessor
reasonably requires, reasonably acceptable to Sublessor. Should the
Subleased Premises, Common Use Facilities or elsewhere at the Airport
require environmental remediation as a result of any matters covered
by Sublessee's indemnification obligations hereinabove set forth,
Sublessee shall perform same as required pursuant to such obligations.
11. Environmental Indemnity from Sublessor. Sublessor shall indemnify,
defend and hold harmless Sublessee, its successors and assigns, its employees,
agents and attorneys from and against any and all liability, loss, damage,
expense, penalties and legal and investigation fees or costs, arising from or
related to any claim or action for injury, liability, breach of warranty or
representation, or damage to persons or property and any and all claims or
actions brought by any person, entity or Governmental Authority, alleging or
arising in connection with the contamination of, or adverse effects on, the
environment or violation of any Environmental Law or other statute, ordinance,
rule, regulation, judgment or order of any government or judicial entity which
are incurred by or assessed against Sublessee as a result of or in connection
with conditions at the Airport, except to the extent any such liability, loss,
damage, expense, penalty, legal or investigation fees, or costs are covered by
Sublessee's indemnification obligations to Sublessor expressly set forth in
Section 10 above. Sublessor's obligations and liabilities under this paragraph
shall continue so long as Sublessee bears any liability or responsibility under
the Environmental Laws for any action covered by the indemnification set forth
in this Section 11 above. This indemnification of Sublessee by Sublessor
includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any Governmental Authority because of any matter
covered by Sublessor's indemnification obligations set forth in this Section 11.
The parties agree that Sublessee's right to enforce Sublessor's promise to
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indemnify is not an adequate remedy at law for Sublessor's violation of any
provision of this Section. Sublessee shall also have all other rights and
remedies provided by Law or otherwise provided in this Sublease.
12. Rules and Regulations. Sublessee shall, and shall cause its permitted
subtenants to, comply with all uniform reasonable rules and regulations adopted
by Master Landlord and/or Sublessor for use of the Subleased Premises and other
areas of the Airport, including the Common Use Facilities, as the same may be
reasonably amended from time to time by said Master Landlord and/or Sublessor
("Rules and Regulations"). Sublessor shall provide Sublessee with a copy of the
Rules and Regulations and any and all amendments thereto. None of Master
Landlord or Sublessor shall be responsible to Sublessee for the nonperformance
of any other tenant or subtenant of any of the Rules and Regulations.
13. Master Lease. As applied to this Sublease, the words "Lessor" and
"Lessee" as used in the Master Lease shall be deemed to refer to Sublessor and
Sublessee hereunder, respectively. The term "Leased Premises" as used in the
Master Lease shall be deemed to refer to the Subleased Premises defined in this
Sublease (which is a portion, and not all, of the Airport). Sublessee and this
Sublease shall be subject in all respects to the terms of, and the rights of the
Master Landlord under, the Master Lease. Except as otherwise expressly provided
in Section 15 hereof, the covenants, agreements, terms, provisions and
conditions of the Master Lease insofar as they relate to the Subleased Premises
and insofar as they are not inconsistent with the terms of this Sublease are
made a part of and incorporated into this Sublease as if recited herein in full,
and the rights and obligations of the "Lessor" and the "Lessee" under the Master
Lease shall be deemed the rights and obligations of Sublessor and Sublessee,
respectively, but only to the extent applicable to the Subleased Premises
hereunder. As between the parties hereto only, in the event of a conflict
between the terms of the Master Lease and the terms of this Sublease, the terms
of this Sublease shall control.
14. Performance Under Master Lease.
14.1 This Sublease shall remain in full force and effect
notwithstanding the Master Landlord's failure or refusal to comply with any
provisions of the Master Lease, and Sublessee shall pay the Rent provided for
herein without any abatement, deduction or setoff whatsoever, except to the
extent that Sublessor sets off or offsets such amounts against amounts payable
to Master Landlord under the Master Lease. Sublessee covenants and warrants that
it fully understands and agrees to be subject to and bound by all of the
covenants, agreements, terms, provisions and conditions of the Master Lease,
except as modified or excluded by Section 15 below. Furthermore, Sublessee and
Sublessor further covenant not to take any action or do or perform any act or
fail to perform any act which would result in the failure or breach of any of
the covenants, agreements, terms, provisions or conditions of the Master Lease
on the part of the "Lessee" thereunder.
14.2 Whenever the consent of Master Landlord shall be required by, or
Master Landlord shall fail to perform its obligation under, the Master Lease,
Sublessor agrees to use its commercially reasonable efforts to obtain such
consent and/or performance on behalf of Sublessee.
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14.3 Sublessor represents and warrants to Sublessee that the Master
Lease is in full force and effect, all obligations of Master Landlord thereunder
have been satisfied in all material respects, and Sublessor has not given nor
received a notice of default pursuant to the Master Lease.
14.4 Sublessor covenants as follows: (i) not to voluntarily terminate
the Master Lease without Sublessee's prior written consent (which consent may
not be unreasonably withheld), (ii) not to materially modify the Master Lease
without Sublessee's prior written consent (which consent may not be unreasonably
withheld), and (iii) to take all actions reasonably necessary to preserve the
Master Lease.
15. Variations from Master Lease. The following covenants, agreements,
terms, provisions and conditions of the Master Lease, as specified below, are
hereby modified or not incorporated herein.
15.1 Notwithstanding anything to the contrary stated or implied in
this Sublease, the following provisions of the Master Lease are not incorporated
into this Sublease and will not bind or define the relationship of Sublessor and
Sublessee hereunder: The terms and provisions of Section 1.01, the first
paragraph (i.e., the permitted use paragraph) in Section 1.03 (to the extent
such permitted use conflicts with the permitted use set forth in Section 5.2 of
this Sublease), and Sections 2.03, 3.01, 3.02, 3.05, 3.06, 3.07, 3.08, 4.01,
5.01, 5.03, 5.04, 5.06, 6.02, 7.02, 7.09, 8.01, 8.02, 8.03, 8.04, 8.05, 8.06,
8.07, 8.08, 11.02, and 11.11 of the Master Lease.
15.2 The parties hereto represent and warrant to each other that
neither party dealt with any broker or finder in connection with the
consummation of this Sublease, and each party agrees to indemnify, hold and save
the other party harmless from and against any and all claims for brokerage
commissions or finder's fees arising out of the indemnifying party's acts in
connection with this Sublease. The provisions of this Section 15.2 shall survive
the expiration or earlier termination of this Sublease.
15.3 Any notice which may or shall be given by either party hereunder
shall be either delivered personally or sent by certified mail, return receipt
requested, addressed to the party for whom it is intended at:
If to Sublessee: ABX Air, Inc.
000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Hete
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy (which shall
not constitute notice) to: O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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Attention: C. Xxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to Sublessor: Airborne, Inc.,
X.X. Xxx 000,
Xxxxxxx, XX 00000
or to such other address as may have been designated in a notice given in
accordance with the provision of this Section 15.3.
16. Condemnation; Taking. The following provisions shall apply to any
Taking (as defined hereinbelow).
16.1 Defined Terms. The following definitions apply in construing the
provisions of this Sublease relating to the taking of or damage to all or any
part of the Subleased Premises, the Common Use Facilities or other portions of
the Airport, or improvements thereon, or any interest in them by eminent domain
or condemnation:
"Taking" means the taking or damaging, including severance damage by
eminent domain or by condemnation for any public or quasi-public use
under any statute. The transfer of title may be either a transfer
resulting from the recording of a final order in condemnation or a
voluntary transfer or conveyance to the condemning agency or entity
under threat of condemnation and avoidance proceedings are pending.
"Total Taking" means the Taking of the fee title to all of the
Subleased Premises (or Improvements thereon) or all of the Common Use
Facilities (or Improvements thereon).
"Substantial Taking" means the Taking of so much of the Subleased
Premises (or Improvements located thereon) or so much of the Common
Use Facilities (or Improvements located thereon) that one or more of
the following conditions results:
1. The remaining portion of the Subleased Premises (or
Improvements thereon) or Common Use Facilities (or Improvements
thereon) after such Taking would not be economically and feasibly
useable by Sublessee for the business then conducted by Sublessee on
the Subleased Premises prior to such Taking (as determined by
Sublessee in its reasonable discretion);
2. The conduct of Sublessee's business on or from the Subleased
Premises would be substantially prevented or impaired (as determined
by Sublessee in its reasonable discretion); or
3. The portion of the Subleased Premises or Common Use Facilities
not so taken cannot be so repaired or reconstructed, taking into
consideration the
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amount of the award available for repair or reconstruction, so as to
permit Sublessee to economically and feasibly use the Subleased
Premises for the business conducted by Sublessee on the Subleased
Premises prior to the date of such Taking (as determined by Sublessee
in its reasonable discretion).
"Partial Taking" means the Taking of a fee title that is not either a
Total Taking or Substantial Taking.
"Improvements" includes, but is not limited to, all buildings,
structures, fixtures, fences, utility installations, parking
facilities and landscaping on the Subleased Premises and/or Common Use
Facilities.
"Notice of intended taking" means any notice or notification on which
a reasonably prudent person would rely and which such person would
interpret as expressing an existing intention of Taking as
distinguished by a mere preliminary inquiry or proposal. It includes,
but is not limited to, the service of a condemnation summons and
complaint on a party to this Sublease or to the Master Lease. The
notice is considered received when a party to this Sublease receives
from the condemning agency or entity (or another person) a notice of
intent to take in writing containing a description or map reasonably
defining the extent of the Taking.
"Award" means compensation paid for the Taking, whether pursuant to
judgment, or by agreement, or otherwise.
"Date of taking" means the date that Sublessee is required to vacate
the Subleased Premises or Common Use Facilities (or portions thereof)
pursuant to a final order of condemnation or agreement between the
parties hereto.
16.2 Notice of Condemnation. The party receiving any notice of the
kind specified below shall promptly give the other party notice of the receipt,
contents and date of the notice received:
(a) Notice of intended Taking;
(b) Service of any legal process relating to condemnation of the
Subleased Premises or Improvements and/or Common Use Facilities (or
any portions thereof); or
(c) Notice in connection with any proceedings or negotiations with
respect to such a Taking.
16.3 Rights of Parties During Condemnation Proceeding. Sublessor and
Sublessee shall each have the right to represent its respective interest in each
proceeding or negotiation with respect to a Taking or intended Taking and to
make full proof of its claims. No agreement, settlement, sale or transfer to or
with the condemning authorities shall be made without the consent of all
parties. Each party agrees to execute and deliver to any other party
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hereto any instrument that may be required to facilitate the provisions of this
Sublease relating to the Taking.
16.4 Taking of Leasehold. Upon a Total Taking, Sublessee's obligation
to pay Rent and any other charges hereunder together with Sublessee's interest
in the leasehold and all rights given hereunder shall terminate on the Date of
Taking. Upon a Substantial Taking, Sublessee may, by notice to Sublessor within
forty-five (45) days after Sublessee receives notice of the intended Taking,
elect to treat the Taking as a Total Taking. If Sublessee does not so notify
Sublessor, the Taking shall be deemed a Partial Taking. Upon a Partial Taking,
this Sublease shall remain in full force and effect covering the balance of the
Subleased Premises not so taken, except that the Rent payable hereunder shall be
proportionately reduced to account for the impact of the Taking on the business
and operations of the Sublessee at and from the Subleased Premises.
16.5 Total Taking. Upon the occurrence of a Total Taking, all of
Sublessee's obligations under the Sublease shall terminate as of the Date of
Taking. Upon a Total Taking (including a Substantial Taking that Sublessee
elects to treat as a Total Taking pursuant to the terms and provisions of
Section 16.4 above), all sums awarded for any of Sublessee's Trade Fixtures and
Lessee's Personal Property shall be disbursed to Sublessee. All sums awarded for
the Subleased Premises, except for sums awarded to Sublessee for Sublessee's
Trade Fixtures and Lessee's Personal Property, shall be disbursed to Sublessor
or such other person who may be entitled thereto (such as the Master Landlord).
16.6 Taking Following Notice of Termination of ACMI Agreement.
Notwithstanding anything to the contrary stated or implied in this Sublease, if
a Substantial Taking or Partial Taking occurs at any time after the delivery of
a notice terminating the ACMI Agreement but prior to the expiration or earlier
termination of this Sublease, then either Sublessor or Sublessee may elect to
terminate this Sublease as it pertains to the portion(s) of the Subleased
Premises and/or Common Use Facilities that is/are the subject of the Taking by
delivering written notice of such election to the other party within thirty (30)
days after the occurrence of the Taking. If either party delivers such
termination notice within said thirty (30) day period, then such Substantial
Taking or Partial Taking, as the case may be, shall be treated as a Total Taking
hereunder. If either Sublessor or Sublessee exercises its termination rights
pursuant to this Section 16.6 above, then Sublessor and Sublessee shall
co-operate in good faith to locate alternative premises/facilities within the
Airport adequate to replace the portions of the Subleased Premises and/or Common
Use Facilities that were taken, and if such substitute premises/facilities are
available, Sublessor shall lease to Sublessee (or provide Sublessee with the
right to use) such substitute premises/facilities on the terms and conditions of
this Sublease through the expiration or earlier termination of this Sublease. If
Sublessor and Sublessee are unable to locate alternative premises/facilities
within the Airport, then the Sublease will terminate with respect to the
portions of the Subleased Premises and/or Common Use Facilities that are the
subject of such Taking, and the Rent will be proportionately reduced to account
for the impact of the Taking on the business and operations of the Sublessee at
and from the Subleased Premises.
16.7 Partial Taking. Upon a Partial Taking, all awards shall be
disbursed as follows:
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(a) First to the cost of restoring the Improvements on the Subleased
Premises and then to the cost of restoring the Improvements on the
Common Use Facilities; and
(b) The balance, if any, to Sublessor and Sublessee as follows:
Sublessor (or such other person as may be entitled thereto such as the
Master Landlord) shall receive all sums awarded for the Subleased
Premises, except for sums to be awarded to Sublessee for Sublessee's
Trade Fixtures and Lessee's Personal Property. Sublessee shall receive
sums awarded for Sublessee's Trade Fixtures and Lessee's Personal
Property.
16.8 Obligations of Sublessor Under Partial Taking. Promptly after any
such Partial Taking, Sublessor, to the extent of the award proceeds received by
Sublessor, shall repair, alter, modify or reconstruct the Improvements on the
Subleased Premises and the Common Use Facilities so as to make them reasonably
suitable for Sublessee's continued occupancy and use for the uses and purposes
for which the Subleased Premises and Common Use Facilities are leased. The Rent
shall also be proportionately reduced to account for the impact of the Taking on
the business and operations of the Sublessee at and from the Subleased Premises.
16.9 Taking of Temporary Use of Premises and Improvements. Upon any
Taking of the temporary use of all or any part or parts of the Subleased
Premises or Improvements or Common Use Facilities or Improvements for a period
that expires before the expiration date of the term of this Sublease, neither
the term of this Sublease nor the Rent payable by Sublessee shall be abated, and
Sublessee shall be entitled to any and all awards for the use or estate taken.
If a result of the Taking is to necessitate expenditures for changes, repairs,
alterations, modifications or reconstruction of the Improvements to make them
reasonably suitable for Sublessee's continued occupancy for the uses and
purposes for which the Subleased Premises are leased, after the termination of
such Taking, Sublessee shall receive, hold and disburse the award in trust for
such work. At the completion of the work and the discharge of the Subleased
Premises and Improvements from all liens or claims arising therefrom, Sublessee
shall be entitled to any surplus and shall be liable for any deficiency.
If any such Taking is for a period extending beyond the expiration
date of the term of this Sublease, the Taking shall be treated under the
foregoing provisions for Total Takings.
17. Casualty. The following provisions shall apply to any damage or
destruction of the Subleased Premises and/or Common Use Facilities.
17.1 Defined Terms. The following definitions apply in construing the
provisions of this Sublease relating to the damage or destruction of all or any
part of the Subleased Premises or the Common Use Facilities or any improvements
thereon:
"Insured Loss" shall mean damage or destruction which was caused by an
event required to be covered by the insurance described in Section 9 of this
Sublease. The fact that an Insured Loss has a deductible amount will not make
the loss an Uninsured Loss.
"Uninsured Loss" shall mean any damage or destruction which was caused
by
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any event other than an event required to be covered by the insurance described
in Section 9.
17.2 Insured Loss. If at any time during the term of this Sublease
there is damage or destruction to the Subleased Premises or the Common Use
Facilities which is an Insured Loss, then the Sublessor shall, at the
Sublessor's sole cost and expense (but only to the extent of the insurance
proceeds recoverable in connection with the damage or destruction) repair such
damage to, or restore, the Subleased Premises and/or Common Use Facilities, but
not Sublessee's Trade Fixtures or Lessee's Personal Property (which Sublessee
will be required to insure and repair), as soon as reasonably possible. In any
such event, this Sublease shall continue in full force and effect; provided
that, during such repair and restoration, the Rent payable hereunder shall be
proportionately reduced to account for the impact of the damage or destruction
(and/or the repair or restoration activities) on the business and/or operations
of the Sublessee at or from the Subleased Premises.
17.3 Uninsured Loss. If at any time during the term of this Sublease
there is damage or destruction to the Subleased Premises or the Common Use
Facilities that is an Uninsured Loss which prevents Sublessee from using the
Subleased Premises or makes it uneconomical for Sublessee to use or operate from
the Subleased Premises or Common Use Facilities (as determined by Sublessee in
its reasonable discretion), then either Sublessor or Sublessee may at its option
give written to the other within thirty (30) days after the date of the
occurrence of such damage or destruction of the delivering party's intention to
cancel or terminate this Sublease as of the date of the occurrence of such
damage or destruction. If neither party terminates this Sublease within such
thirty (30) day period, then Sublessor shall repair such damage or destruction
as soon as reasonably possible at Sublessor's expense, in which event this
Sublease shall continue in full force and effect during such repair and
restoration (except that, the Rent payable hereunder shall be proportionately
reduced to account for the impact of the damage or destruction, and/or the
repair or restoration activities, on the business and/or operations of the
Sublessee at and from the Subleased Premises). In the event that, under the
circumstances described hereinabove, Sublessor elects to give such notice of
Sublessor's intention to cancel and terminate this Sublease, Sublessee shall
have the right within ten (10) days after the receipt of such notice to give
written notice to Sublessor of Sublessee's intention to repair such damage at
Sublessee's expense, without reimbursement from Sublessor, in which event this
Sublease shall continue in full force and effect (provided that, during such
repair and restoration, the Rent payable hereunder shall be proportionately
reduced to account for the impact of the damage or destruction, and/or the
repair or restoration activities, on the business and/or operations of the
Sublessee at and from the Subleased Premises), and Sublessee shall proceed to
make such repairs as soon as reasonably possible. If Sublessee does not give
such notice within such 10-day period this Sublease shall be cancelled and
terminated as of the date of the occurrence of such damage, and neither party
shall have any further rights or obligations under this Sublease from and after
such termination other than those rights and obligations that expressly survive
the expiration or termination of this Lease by their terms.
17.4 Sublessee Remedies. If Sublessor shall be obligated to repair or
restore, or has agreed or is deemed to have agreed to repair or restore, the
Subleased Premises and/or Common Use Facilities under the provisions of this
Section 17 and shall not commence such repair or restoration within ninety (90)
days after such obligation shall accrue, or Sublessor fails to diligently
prosecute such repair or restoration to completion after commencing same,
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Sublessee may, at Sublessee's option, cancel and terminate this Sublease by
giving Sublessor written notice of Sublessee's election to do so. In such event,
this Sublease shall terminate as of the date of such notice, and neither party
shall have any further rights or obligations under this Sublease from and after
the termination other than those rights and obligations that expressly survive
the expiration or termination of this Lease by their terms.
17.5 Damage or Destruction Following Notice of Termination of ACMI
Agreement. Notwithstanding anything to the contrary stated or implied in this
Sublease, if any damage or destruction occurs to the Subleased Premises and/or
Common Use Facilities at any time after the delivery of a notice terminating the
ACMI Agreement but prior to the expiration or earlier termination of this
Sublease, then either Sublessor or Sublessee may elect to terminate this
Sublease as it pertains to the portion(s) of the Subleased Premises and/or
Common Use Facilities that is/are damaged or destroyed by delivering written
notice of such election to the other party within thirty (30) days after the
occurrence of such damage or destruction. If either party delivers such
termination notice within said thirty (30) day period, then such damage or
destruction, as the case may be, shall be treated as an uninsured loss governed
by the terms and provisions of Section 17.3 above. If either Sublessor or
Sublessee exercises its termination rights pursuant to this Section 17.5 above,
then Sublessor and Sublessee shall co-operate in good faith to locate
alternative premises/facilities within the Airport adequate to replace the
portions of the Subleased Premises and/or Common Use Facilities that were
damaged or destroyed, and if such substitute premises/facilities are available,
Sublessor shall lease to Sublessee (or provide Sublessee with the right to use)
such substitute premises/facilities on the terms and conditions of this Sublease
through the expiration or earlier termination of this Sublease. If Sublessor and
Sublessee are unable to locate alternative premises/facilities within the
Airport, then the Sublease will terminate with respect to the portions of the
Subleased Premises and/or Common Use Facilities that are damaged or destroyed,
and the Rent will be proportionately reduced to account for the impact of such
damage or destruction on the business and operations of the Sublessee at and
from the Subleased Premises.
17.6 Termination due to Damage or Destruction. Upon termination of
this Sublease pursuant to the terms and provisions of this Section 17, an
equitable adjustment shall be made concerning advance Rent and any advance
payments made by Sublessee to Sublesssor.
18. Indemnity. Sublessee hereby agrees to indemnify and hold Sublessor
harmless from and against any and all claims, losses and damages, including,
without limitation, reasonable attorneys' fees and disbursements (collectively,
"Losses"), which may at any time be asserted against Sublessor by reason of (a)
any breach or default by Sublessee in the performance of Sublessee's obligations
under this Sublease, or (b) any losses, damages or injuries to persons or
property occurring in, on or about the Subleased Premises and/or the Common Use
Facilities and other portions of the Airport in connection with Sublessee's use
and/or occupancy of the Subleased Premises and/or the Common Use Facilities and
other portions of the Airport. Notwithstanding the foregoing, Sublessee's
indemnification obligations herein (i) shall not extend to any Losses to the
extent caused by the gross negligence or willful misconduct of Sublessor, Master
Landlord or any of their respective constituents, employees, agents or other
representatives, and (ii) are limited to the kinds and amounts of insurance
Sublessee agrees to provide herein, unless such insurance coverage is
unavailable through the fault of Sublessee, and except to the extent such
obligations arise from the gross negligence or willful misconduct of
17
Sublessee or its constituents, employees, agents or other representatives. The
provisions of this Section 18 shall survive the expiration or earlier
termination of the Master Lease and/or this Sublease. Nothing in this Section 18
shall alter or modify Sections 10 and 11 of this Sublease.
19. Cancellation of Master Lease. In the event of the cancellation or
termination of the Master Lease for any reason whatsoever or of the involuntary
surrender of the Master Lease by operation of law prior to the expiration date
of this Sublease, Sublessee agrees to make full and complete attornment to the
Master Landlord under the Master Lease for the balance of the term of this
Sublease and upon the then executory terms hereof at the option of the Master
Landlord at any time during Sublessee's occupancy of the Subleased Premises,
which attornment shall be evidenced by an agreement in form and substance
reasonably satisfactory to the Master Landlord. Sublessee agrees to execute and
deliver such an agreement at any time within ten (10) business days after
request of the Master Landlord, and Sublessee waives the provisions of any law
now or hereafter in effect which may give Sublessee any right of election to
terminate this Sublease or to surrender possession of the Subleased Premises in
the event any proceeding is brought by the Master Landlord under the Master
Lease to terminate the Master Lease.
20. Assignment or Subletting. Subject further to all of the rights of the
Master Landlord under the Master Lease, and subject to the restrictions
contained in the Master Lease, Sublessee shall not be entitled to assign,
transfer, mortgage, hypothecate, or otherwise encumber, either voluntarily or
involuntarily, any interest in this Sublease or to sublet, either voluntarily or
involuntarily, all or any portion of the Subleased Premises without the prior
written consent of Sublessor, which consent may be withheld by Sublessor in its
sole discretion.
21. Severability. If any term or provision of this Sublease or the
application thereof to any person or circumstances shall, to any extent, be
invalid and unenforceable, the remainder of this Sublease or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each term
or provision of this Sublease shall be valid and be enforced to the fullest
extent permitted by law.
22. Entire Agreement; Waiver. This Sublease contains the entire agreement
between the parties hereto and shall be binding upon and inure to the benefit of
their respective heirs, representatives, successors and permitted assigns. Any
agreement hereinafter made shall be ineffective to change, modify, waive,
release, discharge, terminate or effect an abandonment hereof, in whole or in
part, unless such agreement is in writing and signed by the parties hereto.
23. Captions and Definitions. Captions to the Sections in this Sublease are
included for convenience only and are not intended and shall not be deemed to
modify or explain any of the terms of this Sublease.
24. Further Assurances. The parties hereto agree that each of them, upon
the request of the other party, shall execute and deliver, in recordable form if
necessary, such further documents, instruments or agreements and shall take such
further action that may be necessary or appropriate to effectuate the purposes
of this Sublease.
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25. Governing Law. This Sublease shall be governed by and in all respects
construed in accordance with the internal laws of the State of Ohio.
26. Consent of Master Landlord. The validity of this Sublease shall be
subject to the prior written consent of the Master Landlord pursuant to the
terms of the Master Lease. If consent of Master Landlord shall not be obtained
and a copy thereof delivered to Sublessee within thirty (30) days of the date
hereof, Sublessee shall have the option to cancel this Sublease by notice to
Sublessor within forty (40) days from the date hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be
executed as of this day of , 2003.
---- --------------
SUBLESSOR:
AIRBORNE, INC.,
a Delaware corporation
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
SUBLESSEE:
ABX AIR, INC.,
a Delaware corporation
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
