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HomeMy WebLinkAbout1996-08-26 96-364 ORDERCOUNCIL ACTION Date: AUgUa 2fi. l99fi Item No. -'..96-364 Item/Subject: Authorizing the City Manager to Execute a Lease with Business Express, Inc. - Hanger #464, Bangor International Airport Responsible Department: Community & Economic Development Commentary: BanAir has negotiated a lease with Business Express, Inc. for the rental of Hanger #464 and tM1e land appunenan thereto at Bangor Iruemational Airport. The building has been unoccupied. The lease will not only provide rental income hot will reduce the outlay of money to heat and maintain the building. Iris has been approved by the Airport Committee. �i/ Manager's Comments: Associated Information: Budgd Approval: ' Fiwr¢e Direttor Legal Approval: A. uy Soacinny Introduced For o Passage _ First Reading Page_oL Referral ca BuBV 96-364 A dpedtoC cilo` Baldacci August 26, 1996 CITY OF BANGOR (TITLE.) (orber. A. uthowngthe 11 City Manager11 to Execute aLease with Bus uress Express, Inc. - Hanger X464, Bangor lntemational Airpun By tw atv CounaB oftk city efBmwor: ORDERED, - TUT the City Manger is hereby authorized to execute a lease with Business Express, Inc. for the lease of Hanger X464 and the land appurtenant thereto, located at Bangor International Anprn A Copy of the lease is attached to this Order and is incorporated by reference. m cm CQI m August 26, 1996 Ibxicn to Amaad by 96-366 Substitution Passed. O R D E R Passed As Amaiderl by Substitution (of Pages d2 6 #10 of. the Ruderdxwe of I.eaae) Tii1e,Authorizing the city Manager to Execute a Lease with Business Express, Inc., - Nange� B466t Beggor I^S95R4S�4na1 Airport ...................................... CI Q.FRK _ .......... gy((Am ro .... u n c i..... Councilman FFf�f 96-364 INDENTURE OF LEASE THIS INDENTURE OF LEASE, executed this day of August, 1996, by and between: CITY OF BANGOR, a municipal corporation organized and existing under and by virtue of the laws of the State of Maine, and having its principal offices at 73 Harlow Street, Bangor, Maine (hereinafter referred to as "Lessor"); AND BUSINESS EXPRESS INC., as a debtor in possession under Chapter 11 of the United States Bankruptcy Code in a proceeding pending before the United States Bankruptcy Court for the district of New Hampshire (Case #98-10130- JEY), and a corporation existing under Me lam of the State of New Hampshire, with its principal place of business at 14 Aviation Ave., Portsmouth, N.H. 03801 (hereinafter sometimes referred to as "Lessee") WITNESSETH: WHEREAS, the City of Bangor is the owner of an airport commonly known as "Bangor International Airport", formerly known as Dow Air Force Base, located in the City of Bangor, County of Penobscot, State of Maine (hereinafter sometimes referred to as the "Ahport"); and WHEREAS, Lessee desires to lease certain premises at the Airport for purposes of: A. Maintenance, repair, servicing, and storage of aircraft, air -oriented equipment, and parts used by the Lessee and its legally registered affiliates; B. Casual sale of aircraft, air -oriented equipment and parts owned and used by Lessee. NOW, THEREFORE, the parties do mutually agree as follows: ARTICLE I - PREMISES The Leasor, for and in consideration of the rents to be paid and the obligations to be performed by Lessee as hereinafter provided, does hereby demise and lease unto Lessee, and the Lessee does hereby take and hire, upon and subject to the terms and conditions hereinafter expressed the following described property, in its present physical condition: (:p. 9L -3L4 �s b. copy Swmness Express, Inc. Hangar #464 approximately 25,480 sq. fl. and the land appurtenant thereto, located at Bangor International Airport, Bangor, Maine, said property further described in Exhibit "A" to this Agreement, attached hereto. ARTICLE 11- TERM TO HAVE AND TO HOLD the demised premises unto the Lessee for a tern commencing October 1, 1996 and terminating on May 31, 2001. The Lessee, at its option, may terminate this Lease without penalty and with no further obligation: (i) by providing notice in writing to the Lessor at least six (6) months prior to the date of termination specified in such notice; or (it) upon conversion of its Chapter 11 bankruptcy proceeding to a Chapter 7 liquidation proceeding or upon the army of an order by the United States Bankruptcy Court authorizing the Lessee to sell substantially all of its assets. ARTICLE III - COMPUTATION OF ANNUAL RENTAL A. The rent to be paid by Lessee to Lessor during the term of this lease shall be as follows: October 1, 1996 to May 31, 1998 - FOUR THOUSAND TWO HUNDRED AND FORTY-SEVEN DOLLARS ($4,247.00) per month. June 1, 1998 to May 31, 1999 - FIFTY-THREE THOUSAND FIVE HUNDRED AND EIGHT DOLLARS ($53,508.00) annually, to be paid monthly in the amount of FOUR THOUSAND FOUR HUNDRED AND FIFTY-NINE DOLLARS ($4,459.00) June 1, 1999 to May 31, 2000 - FIFTY-SIX THOUSAND ONE HUNDRED AND EIGHTY-THREE DOLLARS ($56,183.00) annually, to be paid monthly in the amount of FOUR THOUSAND SIX HUNDRED AND EIGHTY-TWO DOLLARS ($4,682.00) June 1, 2000 to May 31, 2001 - FIFTY-EIGHT THOUSAND NINE HUNDRED AND NINETY-TWO DOLLARS ($58,992.00) annually, to be paid monthly in the amount of FOUR THOUSAND NINE HUNDRED AND SIXTEEN DOLLARS ($4,916.00) Augusl22,1996 Page 96-364 Busirress Express, Inc B. Rent shall be paid monthly in advance on the first day of each and every month. Lessee shall pay all rentals herein required, without prior demand therefor, in lawful money of the United States, at Me address of the Lessor as set forth herein or at such other reasonable places as the Lessor may designate. Rent not paid by the tenth day of each and every month is subject to a penalty of 1.5% per month on the outstanding balance. ARTICLE IV - USE, OCCUPANCY AND A. Lessee shall have the right to use, occupy and maintain the premises herein described in a businesslike, careful, clean, and reasonably safe manner for Me purposes of storage, repair, maintenance and servicing of aircraft, air -oriented equipment and parts used by Lessee or its legally registered affiliates. Lessee shall not use said premises for any other purposes without the express prior written consent of the Lessor, which consent will not be unreasonably withheld. No retail sale of products or services shall be conducted on the premises. B. Lessee shall not use, occupy or maintain said premises in any manner as to violate any municipal, state, or federal law or regulation, and, in particular, regulations of the Federal Aviation Administration relating to the operation of Bangor International Airport as a public airport. C. Lessee shall make a good faith effort to inform its employees and visitors of the rules and regulations of the Bangor International Airport and shall cooperate in every way with the Airport Manager to insure that such rules and regulations are obeyed. D. Lessor, through its agents, shall have at all reasonable times the night, upon reasonable notification to the Lessee, to go on and inspect the premises with an authorized representative of the Lessee, and the right of access to utility systems located on the demised premises for the purposes of maintenance, repair, correction, or inspection. For purposes of this paragraph, "reasonable notification" shall include any actual notification to the Lessee or its agent not less than one business day prior to the date of inspection. "Reasonable times' shall mean any time during Lessee's regular business hours, or during normal weekday business home N Lessee shall cease operations or shall maintain other than normal business hours. Lessor reserves the right to effect emergency repairs to any utility systems located on the demised premises at any time, wihout prior notice or with such notice as is reasonable given the nature of Me emergency concerned, and to have access for this purpose. E. Lessee shall have the right to make alterations and improvements to Augustn 1996 Pass 96-36ti R ine3S Express. lnc. the premises and the land appurtenant thereto as it may choose, subject to the prior written approval of the Airport Manager, which shall not be unreasonably withheld, and provided that such alterations, additions and improvements do not weaken the structural integrity of the demised premises, nor decrease its functional quality, appearance or value, and further provided that any such work shall be done entirely at the Lessee's own expense and will include returning disrupted surfaces to a serviceable and attractive condition. Notwithstanding the foregoing, Lessee shall not have the right to construct additions, expansions or freestanding buildings on the demised premises without the expressed written consent of the Lessor, such concent to depend on the following: 1. Renegotiation by the parties of Articles II and III, plus reconsideration of any other applicable section of this agreement; 2. Consideration by Lessor whether it first will choose to finance, own and lease the improvement to Lessee rather than Lessee financing and owning the improvement. Should Lessor determine that it will finance, own and lease the improvement, it will proceed to negotiate with Lessee the applicable sections of this agreement, and to construct the improvement to meet Lessee's general requirements in an expeditious manner. Should Lessor determine it will not finance, own and lease the improvement, it will not unreasonably withhold its consent for Lessee to provide for its own improvement. Such consent must be obtained by Lessee in writing. F. Lessee shall have Me right to (a) fence, secure, grade and surface the demised premises; (b) install such additional outdoor lighting, including Flood lighting, as Lessee deems necessary, provided that such outdoor lighting complies with applicable F.A.A. Regulations, (c) area signs on the leased premises, provided that such signs comply with the City's Sign Ordinance and applicable F.A.A. Regulations, and to (d) store material outside the building upon the leased premises provided that prior written approval of the Airport Manager for specific storage is obtained, and Mat Lessee area a suitable and attractive fence or screen to hide completely such material from the view at ground level. G. Lessee shall have the right, in common with others, to cross and utilize the romp area adjacent to the leased premises for ingress and egress purposes only. H. Lessee is prohibited from performing engine run -ups at all times in the maintenance hangar area. Engine run -ups are allowed in the blast fence area on the heavy duty ramp from 6:00 am to 10:30 pm precisely. The Lessor reserves the right to change these hours at a later tures. Permission to conduct engine run -ups at any other time must be obtained from the Airport Manager. Such permission to be granted only under hardship conditions as determined solely by the Airport Manager. Engine August 22, 19as Page4 96-364 -e Business Express Inc. run -ups performed under hardship conditions are to be done only in the hammerhead area of Runway 15, and a written report explaining the conditions which required the run-up to be performed outside of the normally allowed time period must be submitted to the Airport Manager by 10:00 am of the day after which the run-up occurred. Article V - Removal of Property A. Ownership of permanent improvements to the demised premises, which may from time to time be made by Lessee that are affixed to the property and are an integral part of the operating systems of the structures as opposed to removable personal property, shall automatically vest in the Lessor as a consideration of the lease and rental schedule. . B. Any additions, new buildings or movable personal property, except as provided for above, that may be financed, located, erected or installed on the demised premises by Lessee from time to time during the term of this Lease shall remain the property of the Lessee, and, upon termination or expiration of this Lease, Lessee shall have the right to remove the same from the demised premises within thirty (30) days of said termination. Any such property not so removed within thirty (30) days from the data of termination, shall become the property of the Lessor to be disposed of in such way as Me Lessor may deem N. In the event Lessee elects to remove said non- permanent improvements and other personal property, the demised premises shall be returned as near as possible to their original condition existing at the commencement of this Lease, damage by accidental fire and casualty and reasonable wear and tear excepted. C. In the event Lessee shall fail to remove any non -permanent improvements or other personal property within Mirty (30) days from the data of termination or final expiration of this Lease, Lessor shall be entitled to recover from the Lessee Lessor's reasonable costs incurred in removing or disposing of such non- permanent improvements or personal property. In such event, there shall be deducted from LessoPs costs the fair value to the Lessor actually realized from sale, use or other disposition of the particular improvements or personal property concerned. ARTICLE VI - LIABILITY AND PROPERTY DAMAGE INSURANCE The Lessee during the entire term of this Agreement, or any extension thereof, shall maintain, at its sole expense, insurance of the following types with companies authorized to do business in the State of Maine, and for the protection of the City of Bangor, who shall be named as an additional insured, but only as respects operations of the Lessee as its interests may appear, against all claims, losses, costs or expenses arising out of injuries to persons whether or not employed by Lessee or damage to property whether resulting from acts, omissions, negligence or otherwise of August 22, 1996 page 5 96-364 Business Express. Inc. the Lessee, its directors, officers, employees and agents and arising from Lessee's use of the premises or any pad or portion thereof. Comprehensive Public Liability Bodily Injury - $1,000,000 each occurrence Property Damage - $300,000.00 each occurrence Worker's Compensation Insurance A' mflfP blit L_lability Insumo $50,000,000 per accident Aircraft Property damage Insurance $10,000,000 per accident Lessor shall not be required to provide insurance coverage and shall have no responsibility for any property owned by the Lessee or third parties which may be located on the demised premises. Lessee shall cause to be furnished to the Lessor evidence in the form of certificates of insurance of the existence and continuance in force of the insurance required hereunder. Lessor shall be notified of any changes or discontinuances of coverage. The minimum insurance coverage required under this Article shall be deemed to be automatically adjusted whenever the Maine State Legislature shall increase fie Lessor's maximum liability for personal injury or property damage claims brought under the Maine Tort Claims Act. In the event of such an increase, the minimum insurance coverage required shall be no less than the Lessor's maximum liability for such claims under the Maine Tort Claims Act. ARTICLE VII - INDEMNITY A. General Indemnification - Lessee shall defend, indemnify, and hold Lessor, and its inhabitants, officers, employees and agents completely harmless from and against any and all liabilities, losses, suits, claims, judgments, fines or demands arising by reason of injury or death of any person or damage to any property, including all reasonable costs for investigation and defense thereof (including but not limited to attorneys' fees, court costs, and expert witness fees), of any nature whatsoever arising out of or incident to this agreement and/or the use, occupancy, conduct, or management of the leased premises or the acts or omissions of Lessee's officers, agents, employees, contractors, subcontractors, licensees, or invitees, unless such August 22, 1998 Page 96-364 Business Express, Inc. injury, death, or damage is caused by the negligence of the Lessor its inhabitants, officers, employees or agents. The Lessee shall give to Lessor reasonable notice of any such claims or actions. B. Lessee's Waiver of Workers' Compensation Immunity - The Lessee hereby expressly agrees that it will defend, indemnify and hold the City of Bangor, its inhabitants, officers, employees and agents completely harmless from any and all claims made or asserted by the Lessee's agents, servants or employees arising out of the Lessees activities under this Lease. For tha nu se the Lessee hereby Iv waives any and all mmunity it may have under the Maine W rkers Compensation Act in man! IQ filucib Qlaii made or asserted by the Lessee's auents servants or employees The indemnification provided under this paragraph shall extend to and include any and all costs Incurred by the City of Bangor to answer, investigate, defend and settle all such claims, including but not limited to the City of Bongoes costs for attorneys fees, expert and other witness fees, the cost of investigators, and payment in full of any and all judgments rendered in favor of the Lessees agents, servants or employees against the City of Bangor in regard to claims made or asserted by such agents, servants, or employees. ARTICLE VIII - DAMAGE BY FIRE OR OTHER CASUALTY Lessor is not required to insure the demised premises against loss by fire and the extended coverage usual in such insurance. In the event of destruction or damage of buildings owned by Lessor on the demised premises, or to any part thereof, and as often as the improvements shall be damaged by fire or other casually, Lessor shall have the right, but not the obligation to rebuild and repair the building for occupancy. If lessor elects not to rebuild and repair, it shall so notify Lessee within thirty (30) days or more expeditiously if possible of its decision. In the event the damages are of such extent as to reasonably prevent Lessee from operating within the demised premises, then Lessee shall have the right to terminate this Lease and shall notify Lessor within the aforementioned time period, and Lessee's obligation to pay rent as herein above provided shall terminale upon receipt of such notice by the Lessor and surrender of the premises by the Lessee. ARTICLE IX - RULES, REGULATIONS AND LAWS A. The premises herein leased are located upon the property of the Lessor and commonly known as Bangor International Airport. Therefore, the Lessee hereby agrees to obey and to cause all personnel employed by the Lessee to obey all municipal ordinances, and all State and Federal rules, regulations, or laws pertaining to the operation of said Airport and Lessee's use and occupancy of the demised premises. In addition, Lessee shall obey and observe all reasonable orders, rules and regulations of the Airport Manager not inconsistent with this Lease or with the aforesaid rues and regulations which are uniform, and which apply equally to all tenants, invitees and users Augustn 19% Page] 96-364 Business Express Inc. of the Airport and their employees. S. Further, it Is understood and agreed that Lessor retains a right for the passage of aircraft ("aiMMfrr being defined as any contrivance now known or hereafter invented, used or designed for navigation of or flight in the air) by whomsoever owned and operated, in the airspace above the property above 342.4' MSL to an infinite height together with the right to cause in all airspace above the property such noise, vibrations, fumes, dust, fuel particles and all other effects that may be caused by the operation of aircraft landing at, or taking -off tram, or operating at or on the Airport and Lessee does hereby fully waive, remise and release any right or cause of action which it may now have or which R may have in the future against Lessor due to such noise, vibrations, fumes, dust, fuel particles, and all other effects that may be caused by the operation of aircraft landing at or taking -off from or operating at or on the Airport. The Lessee specifically agrees to make no claims in any form for damages or reimbursements against the Lessor or against the United States Government for any reason or cause resulting from noise generated from Airport uses. C. Lessee will not use or permit or suffer the use of the leased property in such a manner as to create electrical interference with radio communication between any installation upon the Airport and aircraft, or as to make it difficult for fiyere to distinguish between Airport lights and others, or as to impair visibility in the vicinity of the Airport, or as otherwise to otherwise endanger the landing, taking off or maneuvering of aircraft. ARTICLE X - NOISE CLAIMS The Lessee specifically agrees to make no claims in any form for damages or reimbursements to the Lessor or to the United States Government for any reason or cause resulting from noise generated from airport uses. ARTICLE XI - NONDISCRIMINATION Lessee for itself, its personal representatives, successors in interest and assigns, and as part of the consideration hereof, does hereby covenant and agree that: (1) no person or group of persons on the grounds of race, color, age, sex, handicap, or national origin, or in any other manner prohibited by law, shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the Lessee's use or occupancy of said demised premises; (2) in the construction of all improvements, buildings, structures, on, over or under such land and the furnishing of services thereon, no person or group of persons on the grounds of race, color, age, sex, handicap, or national origin or in any other manner prohibited by law, shall be excluded from participation in, denied the benefits of, or be otherwise subjected to unlawful discrimination in the Lessee's use or occupancy of the demised premises; and (3) Lessee shall use the premises in compliance with all other requirements imposed by August 22,19% Pagea 96-366 Business Egwess, Inc. or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtkle A. Office of the Secretary, Pad 21, Nondiscrimination in Federally -Assisted Programs of the Department of Transportation - Effectuation of Title VI of the Civil Rights Act of 1964, and as said regulations may be amended. In the event of breach of any of the above nondiscrimination covenants, the Lessor shall have the right, after failure of Lessee to rectify such breach within thirty (30) days after receipt of notice from Lessor, to terminate this Lease. Provided, however, that Lessor shall not have the right to terminate the Lease under this Article with respect to any complaint of discrimination which is pending final resolution or adjudication before any agency or court of the State of Maine or the United States. ARTICLE XII - COVENANT OF QUIET ENJOYMENT The Lessee, subject to the terms and provisions of this lease on payment of the rent, and observing, keeping and performing all the terms and provisions of the lease on its part to be observed, kept and performed, shall lawfully, peaceably and quietly have, hold, occupy and enjoy the demised premises during the tens hereof without hindrance or rejection by the Lessor or any other persons. ARTICLE XIII - LIENS The Lessor and the Lessee agree that each will promptly discharge (either by payment or by filing of the necessary bond or otherwise any mechanics', materialmen's or other liens against the demised premises, or against any buildings, structures or improvements located thereon, which liens may arise out of any payment due for labor, services, materials, supplies or equipment which may have been furnished to or for the Lessor or the Lessee, respectively. ARTICLE XIV - MAINTENANCE AND REPAIRS (A) Lessee shall, at its sole expense and cost, throughout the tens hereof or any extension, keep and maintain the fixtures in the demised premises including electrical fixtures, mechanical systems located within and servicing exclusively the demised premises, and plumbing fixtures, doors, windows, floor and floor coverings, ceilings, walls, and interior paint surfaces, in good order and repair, and in tenantable condition, damage by accidental fire and casualty and reasonable wear and tear, as defined in this Article excepted. Lessee will also be responsible for cleaning of the demised premises, snowplowing and rubbish removal. (B) Lessor shall, at its sole expense and cost, throughout the term hereof or any extension, keep and maintain the following in the demised premises: the building's major structural components: roof, structural walls, foundation, operating August 22, 1996 Page Business Express, Inc. systems, including heating, plumbing, and electrical systems except fixtures as described in (A) above, exterior paint surfaces, in good order and repair, and in tenantable condition, damage by accidental fire and casualty and reasonable wear and tear, as defined in this Article excepted. Lessor will also be responsible for maintenance of packing areas and landscaping, (C) The phrase "reasonable wear and tear' as used in Paragraphs A and B of this Article as an exception to the obligations of the parties shall not be construed to relieve the parties of their responsibility for providing repairs of a routine and regular nature which may from time to time be necessary within their respective areas of responsibility, nor of the obligation to provide maintenance to the demised premises of a nature and degree ordinarily sufficient to prevent damage, breakdown, failures, malfunctions or disrepaire. ARTICLE XV - UTILITIES Lessee shall pay the cost of all utilities furnished and consumed on the demised premises, including electricity, gas, fuel oil, water and sewer user fees. Lessee accepts all utility futures as they now exist. ARTICLE XVI -SURRENDER OF POSSESSION Subject to the provisions contained in Article V, the Lessee shall, upon the termination of this Lease, surrender the quiet and peaceable Possession of the demised promises. ARTICLE XVII - UNITED STATES RIGHTS It is understood and agreed that title to the leased premises is in the City of Bangor, provided, however, that the leased premises are a part of Bangor International Airport and that this lease is specifically made subject to any rights the United States of America or any agency thereof may have under any regulation, law, deed or other existing Agreement in or to the leased premises. Should the United States of America or any agency thereof exemise any such rights in or m said premises, the exercise of such right or rights shall not be considered to be a breach by me City of any covenant or obligation hereunder. If the exercise of such right or rights by the United States of America or any agency thereof makes impractical in Lessee's sole opinion Lessee's intended use of said premises, then Lessee shall have the right, at its sole option, immediately to terminate this Agreement by notice to the Lessor and without further obligation to the Lessor except for such obligations as shall have been incurred and accrued prior to the exercise of said option. ARTICLE XVIII - TERMINATION Augux22, 19% Page 10 96-364 Business Express, Inc. It is covenanted and agreed that: (1) If the Lessee shall neglect or fail to pay the rent or other charges payable hereunder and such default shall continue for a period of ten (10) days after written notice thereof by Lessor; or (2) If Lessee shall neglect or fail to perform or observe any of the other covenants, terms, provisions, or conditions on its part to be performed, or observed, and such neglect or failure shall continue for a period of thirty (30) days after written notice thereof by Lessor, or if such covenants, terms, provisions or conditions cannot be performed or observed within said thirty (30) day period, If Lessee fails to diligently prosecute the curing of such neglect or failure; or (3) If the estate hereby created shall be taken on execution or by other process of law; THEN, IN ANY OF SAID CASES OUTLINED ABOVE (notwfthstanding any license of any former breach of covenant or waiver of the benefit hereof or consent in a former instance), the Lessee may be considered in default hereunder, and the Lessor lawfully may, subject to 11, U.S.C. §302, d applicable, immediately or at any time thereafter, and without demand or notice, enter into and upon the said premises or any part thereof in the name of the whole, and repossess the same as of the Lessors former estate, and expel the Lessee and those claiming through or under ft and remove its or their effects (forcibly'd necessary) without being deemed guilty of any manner of trespass, and without prejudice to any remedies which might otherwise be used for arrears of rent or preceding breach of covenant. Upon such entry, and, subject to 11, U.S.C. §302, if applicable, this Lease shall terminate, and the Lessee shall be liable to pay as rent, amounts equal to the several installments of rents and other charges reserved as would have become due under this Lease if this Lease had not been terminated or if the Lessor had not entered or reentered as aforesaid. Notwithstanding the foregoing, Lessee's liability shall not exceed the difference, if any, between the rental which would have been due had there been no such termination, and the amount being received by Lessor as rent from any new tenant or occupant of said premises. In order to mitigate Lessee's damage hereunder, Lessor agrees to make every reasonable effort to secure subsequent tenants, at a rental equal to the then prevailing local rate for the demised premises. ARTICLE XIX - ATTORNEY'S FEE The Lessee shall pay to the Lessor a reasonable attorney's fee in the event the Lessor employs an attorney to coiled any rents due hereunder and secures a judgment in connection with collection of said rent, or legal process is levied upon the interest of the Lessee in this Lease or in said premises, or in the event Lessee violates any of the terms, conditions or covenants on the part of the Lessee herein contained, August 22, 1996 Page 11 96-364 Business Express, Irm. provided also that Lessee shall have failed to promptly canect the violation of any tens, condition or covenant after receipt of notice that it is in violation thereof. In the event Lessor employs its City Solicitor or an assistant solicitor to collect rents or otherwise protect Lessors interests under this Lease, "reasonable attorneys fees" under this Article shall mean the reasonable cost of services provided by Lessors Solicitor or assistant solicitor, at the rate charged for similar services by private allomeys in the Bangor area. ARTICLE XX - ASSIGNMENT, SALE AND SUBLETTING The Lessee shall not at any time assign, sell, convey or transfer this Lease or any interest therein, or sublease or sublet or rem the premises, or any part thereof, without the imorwntlen consent of the Lessor. In the event of an approved sublease, all provisions of this Lease shall extend to, bind and inure to the benefit of not only the Lessor and Lessee but also their successors and assigns. Lessee shall have the right to assign this Lease to any corporation with which it may have become merged, consolidated, or otherwise associated, or to any corporation or holding company having the controlling interest in the Lessee, or to any corporation which may be a subsidiary of the Lessee or to any other entity which may purchase substantially all of Lessee's assets. In no event, however, shall the Lessee named herein be relieved from any obligations under this Lease by virtue of any such assignment or subletting. ARTICLE XXI - AUTHORITY TO ENTER INTO AGREEMENT The Lessor hereby represents and warrants that it has taken all procedural and legal steps as required by federal, state and local laws and regulations for the purpose of authorizing the execution of this agreement and that execution of this agreement by the City of Bangoes City Manager renders this agreement a valid and binding document on the part of the Lessor and that the same is fully enforceable in all of its terms and conditions by the Lessee. Lessee hereby represents and warrants that it has taken all procedural and legal steps as required under all state, local and federal laws and regulations, and all necessary corporate action to authorize the execution of this agreement by its undersigned corporate officers and that upon such execution this agreement is a valid and binding document on the part of the Lessee and is fully enforceable in all of its terms and conditions by the City of Bangor. Notwithstanding the above, the Lessee's execution and delivery of this lease is subject to approval by the United States Bankruptcy Court for the District of New Hampshire. August 22, 19% Page 12 96-364 Boslness Exprs Inc. ARTICLE %XII - WAIVER Failure on the part of the Lessor to complain of any action or nonaction on the part of the Lessee no matter how long the same may continue, shall never be deemed to be a waiver by the Lessor of any of Lessor's rights hereunder. Further, R is covenanted and agreed that no waiver at any time of any of the provisions hereof by Lessor, shall be construed as a waiver of any other provisions hereunder, and that a waiver at any time of any of the provisions hereof shall not be construed at any subsequent time as a waiver of the same provisions. The approval of Lessor of any action by the Lessee requiring the Lessors consent or approval shall not be deemed to waive or render unnecessary the Lessors consent or approval of any subsequent similar act by the Lessee. ARTICLE XXIII - NOTICES Notices ro the Lessor provided for in this Lease shall be sufficient if sent by registered or certified mail, return receipt requested, postage prepaid to: City Manager City of Bangor City Hall 73 Harlow Street Bangor, Maine 04401 with a copy to Airport Manager, Bangor International Airport, 289 Godfrey Boulevard, Bangor, Maine 04401 Notices to Lessee, are to be sent by registered or cedified mail, return receipt requested, postage prepaid, addressed to: Business Express, Inc. 14 Aviation Ave. Portsmouth, N.H. 03601 Attn: Gary Ellmer, President or to such other respective addresses as the parties may designate from time to time to each other in writing. ARTICLE XXIV - INVALIDITY OF PARTICULAR PROVISIONS R any term or provisions of this Lease or the application thereof to any person or circumstances is hereafter determined to be to any extent invalid or unenforceable, the remainder of this Lease or the application of such terms and August 22, 1996 Page 13 96-364 Business Express, Inc. provisions to persons or circumstances other than those to which it is held invalid or unenforceable shall not be affected thereby and such term and provision of this Lease shall be valid and be enforceable to the fullest extent permitted by law. ARTICLE XXV -CONSTRUCTION The headings appearing in the Lease are intended for convenience and reference only, and are not to be considered in construing this Lease. ARTICLE XXVI - NO PARTNERSHIP OR JOINT VENTURE CREATED Nothing contained herein shall be deemed or construed as creating the relationship of principal and agent or of partnership or of joint venture between the parties, it being understood and agreed that neither the method of computation of rent nor any other provision contained herein nor any acts of the parties shall be deemed to create any relationship between the parties other than the relationship of landlord and tenant. ARTICLE XXVII - GOVERNING LAW This Lease shall be governed exclusively by the provisions hereof and by the laws of the State of Maine, as the same may from time to time exist. ARTICLE XXVIII - AMENDMENT TO LEASE This lease contains all the terms and conditions between the parties hereto and no alteration, amendment or addition hereto shall be valid unless in writing and signed by bath partes hereto. August 22, 19% Page 14 96-364:,x„. savaess Express, Inc IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day and year written above. CITY OF BANGOR Date: Wines: BUSINESS EXPRESS, INC. Date: Witness: By: Edward A. Barrett Its City Manager (tile) August ¢ , IM Pegs 15 E hib't A EXISTING DOMESTIC AND INTERNATIONAL N G .rG TERMINAL BUILDING 1we m 96-364 Business Egxess, Ina Hangar #464 approximately 25,480 sq. ft. and the land appurtenant thereto, located at Bangor International Airport, Bangor, Maine, said property further described in Exhibit "A" to this Agreement, attached hereto. ARTICLE II - TERM TO HAVE AND TO HOLD the demised premises unto the Lessee for a term commencing August 19, 1996 and terminating on July 31, 2001. The Lessee, at its option, may terminate this Lease without penalty and with no further obligation: (i) by providing notice in writing to the Lessor at least six (6) months prior to the date of termination specified in such notice; or (ii) upon conversion of its Chapter 11 banlouptcy proceeding to a Chapter 7 liquidation proceeding or upon the entry of an order by the United States Bankruptcy Court authorizing the Lessee to sell substantially all of its assets. ARTICLE III -COMPUTATION OF ANNUAL RENTAL A. The rent to be paid by Lessee to Lessor during the term of this lease shall bei as follows: August 19, 1996 to August 31, 1996 - ONE THOUSAND SEVEN HUNDRED AND EIGHTY-ONE DOLLARS ($1,781.00). September 1, 1996 to July 31, 1998 - FOUR THOUSAND TWO HUNDRED AND FORTY-SEVEN DOLLARS ($4,247.00) per month. June 1, 1998 to May 31, 1999 - FIFTY-THREE THOUSAND FIVE HUNDRED AND EIGHT DOLLARS ($53,508.00) annually, to be paid monthly in the amount of FOUR THOUSAND FOUR HUNDRED AND FIFTY-NINE DOLLARS ($4,459.00) June 1, 1999 to May 31, 2000 - FIFTY-SIX THOUSAND ONE HUNDRED AND EIGHTY-THREE DOLLARS ($56,183.00) annually, to be paid monthly in the amount of FOUR THOUSAND SIX HUNDRED AND EIGHTY-TWO DOLLARS ($4,682.00) June 1, 2000 to May 31, 2001 - FIFTY-EIGHT THOUSAND NINE HUNDRED AND NINETY-TWO DOLLARS ($58,992.00) annually, to be paid monthly in the amount of FOUR THOUSAND NINE HUNDRED AND SIXTEEN DOLLARS ($4,916.00) August22, 19% Paget 96-366 Business Express, Inc. systems, including heating, plumbing, and electrical systems except fixtures as described in (A) above, exterior paint surfaces, in good order and repair, and in tenantable condition, damage by accidental fire and casualty and reasonable wear and tear, as defined in this Article excepted. Lessor will also be responsible for maintenance of parking areas and landscaping. (C) The phrase "reasonable wear and tear" as used in Paragraphs A and B of this Article as an exception to the obligations of the parties shall not be construed to relieve the parties of their responsibility for providing repairs of a routine and regular nature which may from time to time be necessary within their respective areas of responsibility, nor of the obligation to provide maintenance to the demised premises of a nature and degree ordinarily sufficient to prevent damage, breakdown, failures, malfunctions or disrepairs. ARTICLE XV - UTILITIES Lessor shall pay the cost of all utilities furnished and consumed on the demised premises, including electricity, gas, fuel oil, water and sewer user fees. Lessee accepts all utility fixtures as they now exist. ARTICLE XVI - SURRENDER OF POSSESSION Subject to the provisions contained in Article V, the Lessee shall, upon the termination of this Lease, surrender the quiet and peaceable possession of the demised Premises, ARTICLE XVII - UNITED STATES RIGHTS It is understood and agreed that Iltle to the leased premises is in the City of Bangor, provided, however, that the leased premises are a part of Bangor International Airport and that this lease is specifically made subject to any rights the United States of America or any agency thereof may have under any regulation, law, deed or other existing Agreement in orto the leased premises. Should the United States of America or any agency thereof exercise any such rights in or to said premises, the exercise of such right or rights shall not be considered to be a breach by the City of any covenant or obligation hereunder. If the exercise of such right or rights by the United States of America or any agency thereof makes impractical in Lessee's sole opinion Lessee's intended use of said premises, then lessee shall have the right, at its sole option, immediately to terminate this Agreement by notice to the Lessor and without further obligation to the Lessor except for such obligations as shall have been incurred and accrued prior to the exemise of said option. ARTICLE XVIII -TERMINATION August 22. 19N Page 10