2-Sample Hangar Lease.pdf

LEASE AGREEMENT

BETWEEN

SUSQUEHANNA AREA REGIONAL AIRPORT AUTHORITY

AND

AGREEMENT NO: ___________________________

Sam ple i

TABLE OF CONTENTS

Page

Article I – TERM AND RENEWAL TERM

1.01 Initial Term

1.02 Renewal Term

1.03 Holding Over

Article II – LEASED PREMISES AND PURPOSE

2.01 Description of Leased Premises

2.02 Use of Leased Premises

2.03 Requirement to Remain in Confines of Leased Premises

Article III – RENT

3.01 Base Rent

3.02 Escalation of Rent

3.03 Payment of Rent

3.04 Delinquent Rent

3.05 Bad Checks

Article IV – NET LEASE

4.01 Net Lease

4.02 Abatements, Refunds, and Off-Sets

Article V – OBLIGATIONS OF LESSEE

5.01 Utilities

5.02 Maintenance of the Leased Premises

5.03 Trash Removal

5.04 Snow Removal

5.05 Modification/Capital Maintenance and Improvement

5.06 Taxes

Article VI – OTHER COVENANTS OF LESSEE

6.01 Nondiscrimination

6.02 Civil Rights

6.03 Affirmative Action

6.04 Observance of Statues

6.05 Copies of Inspections and Reports

ii

Article VII – OBLIGATIONS OF LESSOR

7.01 Operation as a Public Airport

7.02 Ingress and Egress

7.03 Security Agreement

Article VIII – INSURANCE

8.01 Required Coverage

8.02 Indemnification

Article IX – CASUALTY TO LEASED PREMISES

9.01 Casualty Damages

9.02 Theft and Vandalism

Article X – RIGHTS & PRIVILEGES OF LESSEE………………………………

10.01 Access Roads and Landing Areas

10.02 Quite Enjoyment

10.03 Signs

Article XI – RIGHTS & PRIVILEGES OF LESSOR

11.01 Assignment

11.02 War, National Emergency, Riot or Natural Disaster

11.03 Access to Leased Premises

11.04 Airport Development

Article XII – CONDEMNATION

Article XIII- DEFAULTS & REMEDIES

13.01 Events of Default

13.02 LESSOR’s Remedies

13.03 LESSOR’s Default

Article XIV – SURRENDER OF LEASED PREMISES

14.01 Condition upon Surrender

14.02 Lessee’s Personalty

Article XV – SUBLEASE OR ASSIGNMENT iii

15.01 Successors and Assignors

Article XVI – ENVIRONMENTAL LAWS

16.01 Lessee’s Compliance

16.02 Handling and Storing Hazardous Substances, Materials or Wastes

16.03 Lessee’s Remediation

16.04 Environmental Law Definition

16.05 Indemnification of Lessor

16.06 Indemnification of Lessee

Article XVII – AIRPORT OPERATION & RULES

17.01 Non-Interference with Operation of Airport

17.02 Airport Rules & Regulations

Article XVIII – GENERAL PROVISIONS

18.01 No Waiver

18.02 Subordination and Attornment

18.03 Estoppel Certificates

18.04 Compliance with Legal Requirements

18.05 Choice of Law; Consent to Jurisdiction

18.06 Severability

18.07 Complete Agreement

18.08 Paragraph Headings

18.09 Brokers

18.10 Mutual Waiver of Certain Damages

18.11 Business Days

Article XIX – NOTICES

Article XX – EXISTING LEASE AND AGREEMENTS

Exhibit A – LEASED PREMISES

THIS LEASE is effective the 1st day of XXXX, 2024 (the “Commencement Date”), by and between the SUSQUEHANNA AREA REGIONAL AIRPORT AUTHORITY, a joint municipal authority duly created under the Pennsylvania Municipality Authorities Act of 1945, having an address at One Terminal Drive, Suite 300, Harrisburg International Airport, Middletown, PA 17057 (the "LESSOR”) and XXXXX, having its principal address at XXXXXX (the “LESSEE”)

WITNESSETH:

WHEREAS, LESSOR owns and operates the Franklin County Regional Airport which is located in Greene Township, Franklin County, Pennsylvania (the “Airport”); and

WHEREAS, LESSEE wishes to lease an aircraft hangar, Hangar 400 at the Airport more particularly described in attached Exhibit A;

NOW THEREFORE, in consideration of the mutual covenants and considerations herein contained, LESSOR and LESSEE agree to the following:

ARTICLE I

TERM AND RENEWAL TERM

1.01 Initial Term. The Initial Term of this Lease (the “Initial Term”) shall be for xxx years commencing on XXX (the “Commencement Date”) and terminating at 11:59 pm EST, on XXX (the “Expiration Date”). The term “Lease Year” as used hereinafter shall mean each successive full twelve (12) month period following the Commencement Date.

1.02 Renewal Terms. Provided that the LESSEE is not in default under the terms and conditions of this Lease, LESSEE may extend the Initial Term of this Lease for XXX immediately following the Initial Term (the “Renewal Term”) upon the same terms and conditions as provided in this Lease, including, without limitation, the rental provided in Section 3.01 and the rental increases provided in Section 3.02, by providing written notice of LESSEE’s election to extend the term to LESSOR no later than one hundred eighty (180) days prior to the expiration of the Initial Term or the First Renewal Term, as may be applicable. The Initial Term, and the Renewal Term, as may be elected by LESSEE in accordance with this Section 1.02, are hereinafter sometimes individually, or in combination, referred to as the “Term”.

1.03 Holding Over. In the event LESSEE shall continue to occupy the Leased Premises beyond the expiration of this Lease, without LESSOR’s written approval, such holding over shall not constitute a renewal or extension of this Lease, but shall create a tenancy from month to month, subject to all of the conditions, provisions and obligations of this Lease and with Rent (as defined in Article III, Section 3.01) computed at the rate equal to One Hundred Fifty Percent (150%) of the Rent in effect during the last month of this Lease. The month to month tenancy may be terminated at any time by LESSOR, upon thirty (30) days written notice to the LESSEE.

ARTICLE II

LEASED PREMISES AND PURPOSE

2.01 Description of Leased Premises. LESSOR hereby leases to LESSEE Hangar 501 located at and within the Airport, as shown on Exhibit “A” attached to this Lease and incorporated herein, The Leased Premises are leased by LESSOR to LESSEE together with all rights of ingress, egress and access and other appurtenant rights provided in this Lease.

LESSEE agrees to accept the Leased Premises, including but not limited to the Land, the hangar, and all other improvements in their "as is" condition existing on the Commencement Date. LESSEE acknowledges and agrees that there have been no representations or warranties made by or on behalf of the LESSOR with respect to the condition of the Leased Premises, except as are expressly set forth in this Lease.

2.02 Use of Leased Premises. LESSEE shall use the Leased Premises for the following purposes only and for no other purposes whatsoever without the written authorization of LESSOR:

TBD

Nothing contained in this Lease shall give or shall be construed to give LESSEE the right to sell aviation fuel of any kind at the Airport, or provide to any other lessees of the Airport any of the services authorized herein.

2.03 Requirement to Remain in Confines of Leased Premises. LESSEE, at all times, shall occupy and use only that space within the confines of the Leased Premises and, except for the right to use, in common with other tenants, the access roads and landing areas as provided in Section 10.01, LESSEE shall have no right to use any other areas of the Airport.

LESSOR shall notify LESSEE in writing of any violation by LESSEE of this Section 2.03. On the second and each subsequent violation of this Section 2.03, LESSEE shall pay LESSOR double the monthly Rent for every month or fraction thereof that LESSEE is occupying or using space outside of the Leased Premises. LESSEE shall pay any additional rent to LESSOR within ten (10) Business Days (as defined in Section 18.11) of receipt of notice from LESSOR that such additional rent is due pursuant to this Section 2.03. Failure of LESSEE to remain within the confines of the Leased Premises, excluding activities and operations permitted under Section

10.01 or any other provision of this Lease, and/or pay the additional rent imposed by LESSOR under this Section 2.03 shall be a material breach of this Lease.

ARTICLE III

RENT/FEES

3.01 Base Rent. From the Commencement Date, for the use of the Leased Premises and the rights granted to LESSEE in this Lease, and for and during the Initial Lease Year, LESSEE agrees to pay to LESSOR the annual base rent (“Rent”) in the amount of XXXX. The Rent shall be paid in monthly installments, as provided in Section 3.04. The monthly installment of Rent during the Initial Lease Year shall be XXX.

3.02 Escalation of Rent. Effective XXX for the Second Lease Year and for each consecutive Lease Year thereafter, including during the First Renewal Term and the Second Renewal Term, the annual Rent and the monthly installment thereof shall be increased by three (3.00%) percent of the Rent payable in the previous Lease Year.

3.03 Payment of Rent. The Rent shall be paid to LESSOR in equal monthly installments on or before the first Business Day (as hereinafter in Section 18.11 defined) of each calendar month of the Term, without notice, set-off, deduction or demand, addressed to Susquehanna Area Regional Airport Authority, One Terminal Drive, Suite 300, Middletown, PA 17057, or at such other single address as LESSOR may from time to time designate. The Fuel Flowage Fee shall be paid to LESSOR, without notice, set-off, deduction, or demand, on or before the fifteenth (15th) day of the month for the previous month, each and every month until the expiration of this Lease and any Renewal Terms. LESSEE shall furnish with each payment copies of all aviation fuel delivery invoices for the applicable month, which together state the total aviation fuel delivered upon which the Fuel Flowage Fee is based.

LESSOR reserves the right to examine, inspect, and audit the fuel delivery records of LESSEE upon reasonable notice to LESSEE.

3.04 Delinquent Rent. Any Rent and/or additional rent payment or any other sum received by LESSOR on or after the tenth (10th) day from the due date under this Article, shall be subject to a late payment fee of five percent (5%) of the amount of the payment that is due and shall accrue interest at the rate equal to the “Prime Rate” as published in the Wall Street Journal, from time to time, plus five percent (5%) (the “Default Rate”) from the due date until paid in full. If the Wall Street Journal ceases to publish the “Prime Rate”, then the comparable rate as published in a comparable financial journal shall be used. LESSEE shall be deemed to be in default under this Lease, without further notice required, unless any late fee and any interest that is due are remitted with the next payment of Rent, Additional Rent or other payment, as applicable, due to the LESSOR.

3.05 Bad Checks. Any checks returned due to insufficient funds or for any other reason caused by LESSEE will incur a charge for handling, to be paid by LESSEE upon proper invoice. This charge will be equal to LESSEE’s identified, out-of-pocket expenses relating directly to the returned check, with a minimum charge of $50.00 for each check. Sam

ARTICLE IV

NET LEASE

4.01 Net Lease. LESSEE hereby acknowledges and agrees that this Lease is intended to be a complete net lease to LESSOR, except as otherwise expressly provided in this Lease, and that LESSOR is not responsible for any costs, charges, expenses and outlays of any nature whatsoever arising during the Term from or relating to the Leased Premises, or the use and occupancy thereof by LESSEE, or the contents thereof or the business carried on therein by LESSEE. LESSEE shall pay all charges, impositions, costs and expenses of every nature and kind relating to the Leased Premises during the Term, except as otherwise provided in this Lease. LESSEE's obligation for costs arising during the Term shall survive the termination of the Lease.

4.02 Abatements, Refunds, and Off-Sets. Except as otherwise specifically provided in this Lease, no abatement, refund, off-set, diminution, or reduction of Rent or other compensation shall be claimed by or allowed to LESSEE, or any person claiming under LESSEE.

ARTICLE V

OBLIGATIONS OF LESSEE

5.01 Utilities. All costs, including but not limited to charges for connection, capacity, replacement and repair, associated with utilities servicing the Leased Premises shall be the responsibility of LESSEE and are not covered in the Rent described in Article III. LESSEE shall be responsible for the installation/upkeep of an electrical meter for the electrical service to the Leased Premises. LESSOR shall not be liable for any disruption of any utilities to the Leased Premises unless the result of the gross negligence or willful misconduct of LESSOR; provided however, that nothing in this Lease shall be construed as a waiver by LESSOR of any rights, defenses or immunities LESSOR may have and provided further that this Lease shall not create any contractual rights in LESSEE or liability of LESSOR in connection with LESSOR providing sanitary sewer and water service to LESSEE through the sewer and water facilities owned by LESSOR and serving the Airport.

5.02 Maintenance of the Leased Premises.

a. LESSEE shall, at all times and at LESSEE’s cost, maintain the interior and exterior of the Leased Premises, including but not limited to all hangars and other structures and parking areas, access drives and grounds and landscaping within the Leased Premises, in good condition and repair and in a safe, neat and attractive condition. “Repairs” shall include the replacement of any portion of the Leased Premises which is not repairable. LESSEE shall promptly and diligently perform all maintenance and repair of the Leased Premises. LESSOR shall have no obligation or responsibility for the maintenance (including replacement and repair) of any portion of the Leased Premises. LESSEE’s maintenance and repairs shall include the apron areas within the Leased Premises serving the hangar, and LESSEE shall remove all foreign objects from any such apron areas.

b. Without limiting the generality of the foregoing, LESSEE shall be responsible for and shall perform all maintenance and repairs to the Leased Premises which are reasonably required to satisfy the standard of condition and appearance provided in Section 5.02 a. of this Lease, including, but not limited to, the following:

1. Janitorial services, supplies, window washing, rubbish and trash removal.

2. Supply and replacement of light bulbs, obstruction lights and replacements of all glass, including plate glass.

3. Cleaning of stoppages and plumbing fixtures and sewer lines up to the tie-in to the public system.

4. Replacement of floor coverings.

5. Maintenance of all hangar and overhead doors (including, without limitation, the hangar doors) and door operating systems including weather stripping and glass replacement.

6. Interior and exterior maintenance of the hangars, including painting and repairing of exterior walls and repair and maintenance of roofs.

7. Repair of equipment and utilities forming part of the Leased Premises, including electrical, mechanical, HVAC, and plumbing equipment and systems. All repairs are to be made by licensed personnel. Other repairs are to be made by craftsmen skilled in such work and who perform such work regularly as a trade.

8. Keeping the apron area within the Leased Premises clean and free of oil and other accumulated deposits and maintaining the appropriate markings.

9. Maintenance of electric loads within the designated capacity of the system.

LESSEE shall obtain written consent of LESSOR prior to any change desired by LESSEE in the electrical loading which could exceed such capacity.

10. Maintaining and relamping all interior and exterior light fixtures.

11. Providing and maintaining handheld fire extinguishers for the interior of all hangars, shop parking and storage areas in accordance with applicable safety codes.

12. Maintaining and repairing the HVAC systems servicing the hangars and all other structures.

13. Other maintenance and repairs, as reasonably necessary.

5.03 Trash Removal. LESSEE shall pay and provide for the sanitary handling and disposal, away from the Airport, of all trash, garbage, and other refuse originating from the Leased Premises. LESSEE shall provide and use suitable covered metal receptacles for all such garbage, trash and other refuse. All such garbage receptacles shall be fenced or screened. Piling of boxes, cartons, barrels, pallets, debris, or similar items in an unattractive or unsafe manner, on or about the Leased Premises, shall not be permitted.

5.04 Snow Removal. LESSEE shall, at own expense, provide its own snow removal for the Leased Premises except the apron and taxilane serving the hangar, and will coordinate such snow removal with LESSOR. LESSOR will otherwise remove all snow and ice from the Airport at LESSOR's sole discretion. LESSEE will place snow in a pre-established area designated by LESSOR. LESSEE shall not use sodium chloride or any other products that are corrosive to aircraft in any areas where it could be tracked, by foot or by vehicle, onto the aprons, taxiways, or runways.

5.05 Modification/Capital Maintenance and Improvement. LESSEE shall not make any modifications to the Leased Premises without obtaining prior written permission from the LESSOR which shall not be unreasonably withheld, conditioned, or delayed by LESSOR.. The LESSEE shall follow the Work Permit process or other process designated by the LESSOR for obtaining approval of any desired modifications. Costs for any modifications desired by the LESSEE shall be the responsibility of the LESSEE.

If LESSEE desires to make any capital improvements to the Leased Premises, LESSEE shall request written approval from LESSOR for such improvements, which approval shall not be unreasonably withheld, delayed or conditioned by LESSOR. LESSEE shall provide sufficient detail for LESSOR to make an informed decision regarding the request. Any improvement which alters the structure, including the hangar door, must be appropriately engineered, the cost for which shall be the responsibility of LESSEE. LESSEE shall also be responsible for obtaining all necessary permits for such improvements as required by federal, state and local regulations.

All modifications and capital improvements made by LESSEE, except for any items specifically related to the Fuel Farm, shall become part of the Leased Premises and become the property of LESSOR. Any improvements which increase the footprint of the hangar shall require a renegotiation of the Rent by LESSEE and LESSOR.

5.06 Taxes. LESSEE hereby agrees and acknowledges that it shall pay, when due, all taxes (including real property taxes), assessments and/or fees, which are assessed or levied on the Leased Premises, or LESSEE’s tenancy, by any governmental authority at any time during the Term, as a result of LESSEE’s use or occupancy of all or any part of the Leased Premises.

LESSEE shall provide LESSOR with receipts for tax payments or other reasonable evidence of payment on or before the date when such taxes would become delinquent. If LESSEE fails to pay any such taxes, assessments and/ or fees when due, such failure of payment shall be considered a default under this Lease. LESSEE may, at LESSEE’s sole cost, contest any real estate tax assessment or other assessment imposed upon the Leased Premises.

ARTICLE VI

OTHER COVENANTS OF LESSEE

6.01 Nondiscrimination. LESSEE covenants and agrees (i) that no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of the Leased Premises; (ii) that in the construction of any improvements and the furnishing of services on the Leased Premises no person on the grounds of race, color or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination; (iii) that LESSEE shall use the Leased Premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-Assisted Programs of the Department of Transportation, Effectuation of Title VI of the Civil Rights Act of 1964, and as may be amended from time to time, to the extent that the requirements are applicable to LESSEE.

6.02 Civil Rights. LESSEE agrees that it will comply with all federal, state, and local laws, ordinances, rules, regulations, and orders, now or hereafter in effect or promulgated, to assure that no person shall, on the grounds of race, creed, color, national origin, sex, age, or handicap be excluded from participating in any activity conducted on the Leased Premises.

6.03 Affirmative Action. With respect to the Leased Premises, LESSEE covenants and agrees that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to ensure that no person shall, on the grounds of race, creed, color, national origin or sex be excluded from participating in any employment activities covered in 14 CFR Part 152, Subpart E;

that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by that Subpart; and that it will require that its covered suborganizations provide assurance to LESSEE that they similarly will undertake, with respect to the Leased Premises, affirmative action programs, and that they will require assurances from their suborganizations, as required by 14 CFR Part 152, Subpart E, to the same effect and to the extent that said requirements are applicable, as a matter of law, to LESSEE.

6.04 Observance of Statutes. The granting of this Lease and its acceptance by LESSEE is conditioned upon LESSEE observing and complying, with respect to the Leased Premises, with

(i) all federal, state or local statutes, ordinances, regulations, and health and safety standards applicable to the Leased Premises or to LESSEE in respect to LESSEE’s use of the Leased Premises, specifically, including, without limitation, FAA Federal Aviation Regulations (“FAR”) Parts 139 or TSR 1540 & 1542, CFR Part 158, and the Public Facilities Concession Regulation Act, Act No. 315 of 1978, (ii) with all rules and regulations, promulgated from time to time by the LESSOR for the administration of the Airport, and/or (iii) with any governmental authority having jurisdiction over the Airport, specifically including, without limitation, LESSOR’s Master Security Plan and/or Federal Aviation Administration's security regulations.

6.05 Copies of Inspections and Reports. LESSEE covenants and agrees that, no later than fifteen (15) Business Days from LESSEE’s receipt of a written request of LESSOR, LESSEE shall provide LESSOR with copies of any inspections or reports which are conducted by or for any federal, state or local authority in connection with the Leased Premises or

LESSEE’s use of the Leased Premises which are in LESSEE’s possession. Additionally, LESSEE covenants and agrees to provide to LESSOR, promptly following receipt within two (2) business days, copies of any correspondence, notice, pleading, citation, indictment, complaint, order, decree or other official document received and possessed by LESSEE from any source in connection with the Leased Premises which may have an adverse effect on the Airport, the Leased Premises, or LESSEE’s operations at the Leased Premises.

ARTICLE VII

OBLIGATIONS OF LESSOR

7.01 Operation as a Public Airport. LESSOR covenants and agrees that at all times it will operate and maintain the Airport, except as limited by applicable laws, ordinances, regulations, rulings and other governmental requirements, as a public airport consistent with and pursuant to the Sponsor’s Assurances given by LESSOR to the United States Government under the Federal Airport Act.

7.02 Ingress and Egress. LESSEE shall have the right of ingress to and egress from the Leased Premises for LESSEE, its sublessees and its and their officers, employees, agents, customers, vendors, and invitees over the entrances, exits, roadways and driveways provided by LESSOR serving the Airport. LESSOR’s roadways shall be used jointly with other tenants on the Airport. LESSEE and its sublessees shall not interfere with the rights and privileges of other persons or firms using the roadways and shall be subject to such rules and regulations as may be established, from time to time, by LESSOR and/or other governmental authorities having jurisdiction over the Airport.

7.03 Security Agreement. LESSOR shall not be responsible to provide, or cause to be provided, any security protection for the Leased Premises during the Term. Upon written permission of LESSOR, which permission shall not be unreasonably withheld, delayed or conditioned by LESSOR, LESSEE shall have the right, but shall not be obligated, to provide such security protection as LESSEE may desire at LESSEE’s cost. Such right, whether or not exercised by LESSEE, shall not in any way be construed to limit or reduce the obligations of LESSEE hereunder.

ARTICLE VIII

INSURANCE

8.01 Required Coverage. Prior to occupying the Leased Premises, the LESSEE shall, at its own expense, obtain and maintain the following insurance on its own behalf with insurance companies lawfully authorized to do business on an admitted basis in the jurisdiction in which the Leased Premises is located and furnish to LESSOR Certificates of Insurance evidencing same.

LESSEE’s Insurance Requirements:

a. Property Insurance: insurance against loss or damage to the Leased Premises by fire and all other casualties as may be included in forms of all risk insurance from time to time commonly available in Pennsylvania, in an amount equal to the full insurable replacement value (without depreciation) of all buildings and insurable improvements on the Leased Premises, such coverage to include a so-called “Agreed Amount Endorsement”. The replacement values shall be determined from time to time, whenever requested by LESSOR, but not more frequently than every year, by an appraiser selected by LESSOR and paid for by LESSEE. LESSOR shall be named as the “loss payee” on the casualty insurance coverages for the Leased Hangars.

LESSEE shall bring or keep property upon the Leased Premises solely at its own risk and LESSEE, at its sole cost and expense, will keep all Personal Property, Stock, and Leasehold Improvements now and hereafter located on the Leased Premises insured against “All Risk” of Loss with an Insurer in an amount at least equal to the replacement value.

b. Workers’ Compensation and Employers Liability: in the State in which the Leased Premises is located and elsewhere as may be required and shall include, where applicable, U.S. Longshoremen’s and Harbor Workers’ Coverage.

1. Workers’ Compensation Coverage: Statutory Requirements

2. Employers Liability Limits not less than:

Bodily Injury by Accident: $100,000 Each Accident Bodily Injury by Disease: $100,000 Each Employee Bodily Injury by Disease: $500,000 Policy Limit

3. Including Waiver of Right to Recover from Others Endorsement (WC 00 0313) where permitted by state law, naming LESSOR and amended to apply to contracts under which the LESSEE is not performing work.

c. Commercial General Liability: (including Leased Premises - Operations, Independent Contractors, Products/Completed Operations, Personal Injury and Broad Form Property Damage).

1. Occurrence Form with the following limits:

i. General Aggregate: $2,000,000

ii. Products/Completed Operations Aggregate: $1,000,000

iii. Each Occurrence: $1,000,000

iv. Personal and Advertising Injury: $1,000,000

v. Damage to Leased Premises Rented: $1,000,000

(Fire Legal Liability)

2. Contractual Liability (including Liability for Employee Injury assumed under a Contract) provided by the Standard ISO Policy Form CG 00 01. Policy does

NOT include the restrictive Endorsement CG 24 26 (Amendment of Insured Contract Definition) or any other provision excluding coverage for LESSOR’s Sole Negligence which has been assumed by Contract.

3. The General Aggregate Limit must apply on a Per Location basis.

d. Aircraft Liability Coverage (if applicable, indicated by an “x” ):

1. Per Occurrence Limit: $1,000,000

e. Coverage to be provided for losses that arise from the operations of any Owned, Hired and Non-Owned Aircraft under the scope of services (to include, but not limited to aircraft liability, airport liability, passenger liability, baggage, cargo liability and hangar keeper’s liability) of this Agreement.

f. Automobile Liability:

1. Coverage to include:

i. All Owned, Hired and Non-Owned Vehicles (Any Auto)

ii. Contractual Liability Coverage (including Liability for Employee Injury assumed under a Contract),

2. Per Accident Combined Single Limit $2,000,000

g. Commercial Umbrella Liability:

1. Occurrence Limit: $5,000,000

2. Aggregate Limit (where applicable): $5,000,000

3. Policy to apply excess of the Commercial General Liability (following form

Per Location Aggregate Limit), Commercial Automobile Liability and Employers Liability Coverages.

h. Pollution Legal Liability Coverage (if applicable, indicated by an “x” ): LESSEE shall maintain insurance covering losses caused by Pollution arising out of LESSEE’s use or occupancy of the Leased Premises.

1. Per Claim/Aggregate Limit: $1,000,000/$1,000,000

2. If coverage is written on a Claims-made basis, the LESSEE warrants that any retroactive date applicable to coverage under the policy precedes the effective date of this Lease and that continuous coverage will be maintained or an Extended Discovery Period will be purchased for a period of [two (2)] years beginning when LESSEE’s occupancy of the Leased Premises ceases.

i. Rent Interruption Insurance: Rent interruption insurance insuring LESSOR against loss of all or any portion of the Rent due and payable for up to six (6) months.

LESSOR shall be named loss payee on this policy.

j. Financial Rating and Admitted Status of Insurance Companies:

1. A.M. Best Rating: A- (Excellent) or Higher

2. A.M. Best Financial Size Category: Class VII or Higher

3. Insurance companies lawfully authorized to do business on an admitted basis in the jurisdiction in which the Leased Premises is located

k. LESSOR (including agents, employees, representatives, officers, and directors) shall be added as ADDITIONAL INSUREDS on all liability policies. The coverage offered to the ADDITIONAL INSUREDS on LESSEE’s liability policies shall be primary coverage to any other coverage maintained by the ADDITIONAL INSUREDS and shall not permit or require such other coverage to contribute to the payment of any loss.

l. Any type of insurance or any increase in limits of liability not described above which the LESSEE requires for its own protection or on account of statute shall be its own responsibility and at its own expense.

m. The amount of insurance provided in the aforementioned insurance coverages, shall not be construed to be a limitation of the liability on the part of the LESSEE. The carrying of insurance described shall in no way be interpreted as relieving the LESSEE of any responsibility or liability under the Lease.

n. Prior to the commencement of this Lease, LESSEE shall deliver to LESSOR a certificate of insurance covering the insurance to be obtained and maintained by LESSEE under this Lease. Furthermore, LESSEE shall provide an updated certificate of insurance for LESSOR upon request. Such certificate of insurance shall be delivered to Property Manager, Susquehanna Area Regional Airport Authority, One Terminal Drive, Suite 300, Harrisburg International Airport (MDT), Middletown, PA 17057, regardless of when LESSEE’s occupancy will begin. The Leased Premises address must be shown on the certificate of insurance. LESSEE’s obligation to provide the insurance set forth herein shall not be waived by any failure to provide a certificate of insurance, LESSOR’s acceptance of a certificate of insurance showing coverage varying from these requirements or by LESSOR’s permission to commence occupying the Leased Premises.

o. LESSEE agrees that prior to commencing any construction or renovation work on or to the Leased Premises, LESSEE shall require all contractors and subcontractors doing said work to maintain all of the insurance coverages provided in this Section

8.01 which are relevant to the activities of such contractors and subcontractors at the Leased Premises and to indemnify the Indemnified Parties (as hereinafter defined) in the same manner required of LESSEE as provided herein. In addition, LESSEE shall require such contractors and subcontractors to file certificates of such insurance with LESSOR which shall be subject to LESSOR’s approval of compliance with these requirements.

o. The obligations of the LESSEE to maintain Insurance on Insurance policies written on a claims-made basis will be a two year extended reporting period. All policies written on an occurrence basis will provide coverage for claims that occurred within the period of the Lease.

p. Waiver of Recovery/Subrogation: The LESSEE waives all rights of recovery and shall cause its Insurers to waive their rights of subrogation against LESSOR and any of its agents and employees for loss or damage covered by any of the insurance maintained by the LESSEE pursuant to this Lease.

q. The failure of LESSEE to furnish and maintain the insurance required under this Lease and to furnish satisfactory evidence thereof, LESSOR shall have the right (but not the obligation) to take out and maintain such insurance as specified above as will protect LESSOR. LESSEE agrees to furnish all necessary information therefore and to pay the cost thereof to LESSOR immediately upon presentation of an invoice.

8.02 Indemnification.

a. By LESSEE. LESSEE agrees to indemnify, hold harmless and defend LESSOR and its agents, employees, representatives, officers, and directors (the “Lessor Indemnified Parties”) from and against any and all liability for loss, damage or expense for which the Lessor Indemnified Parties may be held liable by reason of injury (including death) to any person (including LESSEE’s employees) or damage to any property of whatsoever kind or nature arising out of or in any manner connected with the Leased Premises during the Term (including, but not limited to, LESSEE’s use or occupancy of the Leased Premises, ingress or egress to the Leased Premises, access or use of parking lots, walkways or common areas and any alterations or work done in or about the Leased Premises by LESSEE or on LESSEE’s behalf) unless due to the negligence or willful misconduct of LESSOR. It is expressly understood and agreed that the indemnity contained in this paragraph covers claims by LESSEE’s employees and that LESSEE expressly waives any defense to this indemnification obligation which may arise under the Workers’ Compensation Act of any State. This covenant of indemnification and defense shall survive expiration or termination of this Lease.

b. By LESSOR. LESSOR agrees to indemnify, hold harmless and defend LESSEE and its agents, employees, representatives, officers, and directors (the “Lessee Indemnified Parties”) from and against any and all liability for loss, damage or expense for which the Lessee Indemnified Parties may be held liable by reason of injury (including death) to any person (including LESSOR’s employees) or damage to any property of whatsoever kind or nature arising out of or in any manner connected with the Airport (including, but not limited to LESSOR’s use or occupancy of the Airport, ingress or egress to the Airport, access or use of parking lots, walkways or common areas and any alterations or work done in or about the Airport by LESSOR or on LESSOR’s behalf), unless due to the negligence or willful misconduct of LESSEE. It is expressly understood and agreed that the indemnity contained in this paragraph covers claims by LESSOR’s employees and that LESSOR expressly waives any defense to this indemnification obligation which may arise under the Workers’ Compensation Act of any State. This covenant of indemnification and defense shall survive expiration or termination of this Lease.

ARTICLE IX

CASUALTY TO LEASED PREMISES

9.01 Casualty Damages. If all or any portion of the Leased Premises is damaged by fire or other casualty during the term of this Lease, the damages shall be promptly repaired by LESSEE, and the Rent, until such repairs are made, shall be fairly and equitably apportioned from the date of such fire or other casualty according to the portion of the Leased Premises which is unusable by LESSEE for the conduct of its business. LESSEE shall commence repairs within ninety (90) days after the occurrence of such damage and thereafter diligently pursue the repairs through completion. LESSOR shall promptly make available to LESSEE, the insurance proceeds from the casualty insurance pursuant to Section 8.01a to pay for the repairs.

9.02 Theft and Vandalism. LESSEE agrees to assume all risks of liability resulting from any theft and/or vandalism, occurring on the Leased Premises during the Term of this Lease.

ARTICLE X

RIGHTS AND PRIVILEGES OF LESSEE

10.01 Access Roads and Landing Areas. Access roads shall be used by LESSEE in common with others authorized to do so. LESSEE shall also have the right in common with others to use the public landing areas (including related appurtenances such as lights, navigation aids, etc.) for its aircraft in accordance with such rules as may be prescribed by LESSOR for the conduct of its operation.

10.02 Quiet Enjoyment. If and so long as LESSEE pays the Rent and other payments due from LESSEE hereunder and observes and performs all of the covenants, conditions and provisions on LESSEE’s part to be observed and performed hereunder and all applicable grace and notice periods shall not have expired, LESSEE shall and may peaceably and quietly have, hold and enjoy the Leased Premises for the entire Term, subject to all of the provisions of this Lease.

10.03 Signs. Upon written permission from LESSOR, LESSEE shall have the right to place and maintain signage on the exterior of the hangars and on the Leased Premises, provided such signage is in compliance with all applicable governmental rules, regulations or ordinances and LESSEE shall maintain such signs in good order and repair.

ARTICLE XI

RIGHTS AND PRIVILEGES OF LESSOR

11.01 Assignment. LESSOR may assign or otherwise convey its interest, rights, duties and/or obligations hereunder to any airport authority or other successor in interest. LESSOR or other successor in interest may assign, pledge or take any other action with respect to this Lease and their rights and interests hereunder for any purpose relating to the issuance of bonds or other revenue generating devices.

11.02 War, National Emergency, Riot, or Natural Disaster. During time of war, national emergency, riot or natural disaster, LESSOR shall have the right to lease the entire Airport or any part thereof to the United States or Commonwealth of Pennsylvania for military or National Guard use and, in such event, the provisions of this Lease, insofar as they are inconsistent with the provisions of any lease to any such unit of government, shall be suspended for the term of such government lease.

11.03 Access to Leased Premises. LESSOR or its designee shall at any and all times have the right to inspect the Leased Premises, including all buildings, structures, and improvements erected thereon, subject to advance notice of 24 hours to LESSEE. In the event of an emergency, LESSOR may, at any time, enter the Leased Premises by any means, including force, without notice and without liability to LESSEE, and without such entry constituting an eviction of LESSEE, termination of this Lease, or a breach of LESSOR’s warranty of quiet enjoyment.

11.04 Airport Development. LESSOR, in its sole discretion, reserves the right to further develop or improve the aircraft operating area and other portions of the Airport, including the right to remove or relocate any structure on the Airport, as it sees fit, and to take any action it considers necessary to protect the aerial approaches of the Airport against obstructions. Such development may include, but not be limited to, periodic temporary closures of airport facilities, equipment, pavement, or roadways without violation of any of the terms and conditions of this Lease. In the event LESSOR requires the use of all or any portion of the Leased Premises for expansion, improvement, or development of the Airport, or protection of the aerial approaches to the Airport, LESSOR reserves the right, on six (6) months’ notice, at LESSOR’s sole expense, to replace the Leased Premises with equivalent land, buildings and improvements, including, without limitation, the Fuel Farm, at another location on the Airport that is substantially equivalent to the existing location of the Leased Premises; to move and install buildings to that new location or at LESSOR’s option to reconstruct at that new location buildings and improvements, including, without limitation, the Fuel Farm, that are substantially equivalent to the buildings and improvements being leased herein; to conduct that relocation, installation and reconstruction in a time and manner that minimizes to the extent practicable the disruption to the operations of LESSEE; and to reimburse LESSEE for all reasonable out-of-pocket costs incurred as a result of the disruption to its operation from that relocation, installation and reconstruction. The Rent shall be entirely abated during any period of time LESSEE is unable to conduct normal aviation operations.

ARTICLE XII

CONDEMNATION

If the whole of the Leased Premises shall be condemned or taken either permanently or temporarily for any public or quasi-public use or purpose, under any stature or by right of eminent domain, or by private purchase in lieu thereof, then in that event, the term of this Lease shall cease and terminate from the date of title vesting in such proceeding or purchase and LESSEE shall have no claim against LESSOR for the value of any unexpired term of the Lease, and shall release unto LESSOR any such claim it may have against the condemnor. In the event a portion only of the Leased Premises shall be so taken, LESSEE may elect to (i) terminate this Lease from the date of title vesting in such proceeding or purchase; or (ii) in the event LESSOR elects to repair and restore, at its own expense, the portion not taken, rent such remaining portion, subject to a rent reduction proportionate to the portion of the Leased Premises taken. In the event of a whole or partial condemnation or taking, LESSEE shall have the right to file a separate claim against the condemnor for reimbursement of the value of LESSEE’s improvements, including the Fuel Farm and related facilities and equipment, that are affected due to condemnation.

ARTICLE XIII

DEFAULTS AND REMEDIES

13.01 Events of Default. The occurrence of any one or more of the following events shall constitute an Event of Default under this Lease.

a. The failure by LESSEE to make any payment to LESSOR required under this Lease on the date when due and such failure continues for ten (10) Business Days following LESSEE’s receipt of written notice from LESSOR that the same is due and unpaid;

provided, however, that LESSOR shall not be obligated to give LESSEE notice of late payment more than two (2) times in any Lease Year, and on the third (3rd) time within such Lease Year a payment is late, the non-payment shall be an immediate Event of Default, without notice or grace period.

b. The failure by LESSEE to perform any of the covenants, conditions or obligations imposed on LESSEE by this Lease (other than a default in the payment of money provided in subsection (a) above) and such failure continues for thirty (30) days after LESSEE receives written notice from LESSOR specifying the default; provided, however, that LESSOR shall not be obligated to give LESSEE notice of the same default more than two (2) times in any Lease Year, and if the same default occurs a third (3rd) time within the same Lease Year, it shall be an immediate Event of Default without LESSOR giving any notice. In the event any default covered by this subsection (b) is not reasonably capable of cure within such thirty (30) day period, LESSEE shall not have committed an Event of Default so long as LESSEE commences cure of such default within such thirty (30) day period and thereafter pursues cure of the default to completion.

c. The commencement of a case under any chapter of the Federal Bankruptcy Code by or against LESSEE or any guarantor of LESSEE's obligations hereunder, or the filing of a voluntary or involuntary petition proposing the adjudication of LESSEE or any such guarantor as bankrupt or insolvent, or the reorganization of LESSEE or any such guarantor, or an arrangement by LESSEE or any such guarantor with its creditors, unless the petition is filed or case commenced by a party other than LESSEE or any such guarantor and is withdrawn or dismissed within sixty (60) days after the date of its filing.

d. The sale of LESSEE's interest in the Leased Premises under attachment, execution or similar legal process, or if LESSEE is adjudicated as bankrupt or insolvent under any state bankruptcy or insolvency law or an order for relief is entered against LESSEE under the Federal Bankruptcy Code and such adjudication or order is not vacated within sixty (60) days, except; however for an assignment of this Lease to another party, with prior approval by LESSOR, or by the holder of a mortgage on LESSEE’s leasehold under this Lease, upon action by the lien holder to foreclose.

e. The admission in writing by LESSEE or any guarantor of LESSEE's obligations of its inability to pay its debts when due.

f. The appointment of a receiver or trustee for the business or property of LESSEE or any such guarantor, unless such appointment shall be vacated within sixty (60) days of its entry.

g. The abandonment of the Leased Premises by LESSEE at any time following delivery of possession of the Leased Premises to LESSEE. Abandonment shall mean any consecutive thirty (30) day period during which the Leased Premises are not occupied, except for remodeling or for repairs or rebuilding following a casualty. Notwithstanding anything herein to the contrary, and even if LESSEE has vacated the Leased Premises, LESSEE shall not have committed an Event of Default so long as LESSEE continues to perform LESSEE’s monetary obligations and all of LESSEE’s other non-monetary obligations under this Lease including site and building maintenance and continues the use of the Leased Premises as defined in the Lease.

h. The filing of any lien against the Airport or the Leased Premises or any other property of

LESSOR as the result of any act or omission of LESSEE, if the lien is not discharged or contested in good faith by LESSEE (as determined by LESSOR) within thirty (30) days of LESSEE’s receipt of notice of the lien, unless LESSEE posts a bond within this time period equal to the amount of the lien.

13.02 LESSOR’s Remedies. Upon the occurrence of an Event of Default, LESSOR shall have the right (in addition to all other rights and remedies at law and in equity) to do any one or more of the following:

a. Termination of Lease. LESSOR may terminate this Lease, by written notice to LESSEE, without any right by LESSEE to reinstate its rights by payment of Rent due or other performance of the terms and conditions hereof. Upon such termination, LESSEE shall immediately surrender possession of the Leased Premises to LESSOR, and LESSOR shall immediately become entitled to receive from LESSEE an amount equal to the aggregate of all Rent which then remains due to LESSOR but unpaid by LESSEE.

b. Reletting. With or without terminating this Lease, as LESSOR may elect, LESSOR may re-enter and repossess the Leased Premises, or any part thereof, and relet the Leased Premises to any other person upon such terms as LESSOR shall deem reasonable, for a term within or beyond the Term; provided, that any such reletting prior to termination shall be for the account of LESSEE, and LESSEE shall remain liable for

(i) all Rent and other sums which would be payable under this Lease by LESSEE in the absence of such expiration, termination or repossession, less (ii) the net proceeds, if any, of any reletting effected for the account of LESSEE after deducting from such proceeds all of LESSOR’s reasonable expenses, including but not limited to commissions, reasonable attorneys’ fees and expenses, employees’ expenses, alteration costs, expenses of preparation for such reletting and all reasonable costs and expenses, direct or indirect, incurred as a result of LESSEE’s breach of this Lease. If the Leased Premises are, at the time of default, sublet or leased by LESSEE to others, LESSOR may, as LESSEE’s agent, collect rents due from any subtenant or other LESSEE and apply such rents to the Rent and other amounts due hereunder without in any way affecting LESSEE’s obligation to LESSOR hereunder. Such agency, being given for security, is hereby declared to be irrevocable. If LESSOR shall re-enter and repossess the Leased Premises, LESSOR agrees that LESSOR shall make commercially reasonable efforts to relet the Leased Premises.

c. Removal of Contents by LESSOR. With respect to any portion of the Leased Premises, whether vacant or physically occupied by LESSEE after the date of the Event of Default, LESSOR may remove all persons and property therefrom, and store such property in a public warehouse or elsewhere at the cost of and for the account of LESSEE, without service of notice or resort to legal process (all of which LESSEE expressly waives) and without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby.

d. CONFESSION OF JUDGMENT FOR POSSESSION. SET FORTH BELOW ARE

WARRANTS OF LESSOR FOR AN ATTORNEY TO CONFESS JUDGMENT

AGAINST LESSEE. IN GRANTING THESE WARRANTS OF LESSOR TO

CONFESS JUDGMENT AGAINST LESSEE, LESSEE HEREBY KNOWINGLY,

INTENTIONALLY, AND VOLUNTARILY AND UNCONDITIONALLY WAIVES

ANY AND ALL RIGHTS LESSEE MAY HAVE TO PRIOR NOTICE AND AN

OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS

AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF

PENNSYLVANIA BEFORE A JUDGMENT IS ENTERED OR EXECUTED

THEREON.

UPON THE EXPIRATION OF THE THEN CURRENT TERM OR THE EARLIER

TERMINAT…