FRST AMENDMENT TO LEASE NO. LAA-8637 BETWEEN THE CTY OF LOS ANGELES DEPARTMENT OF ARPORTS AND VRGN ATLANTC ARWAYS LMTED FOR PREMSES LOCATED AT 5758 CENTURY BLVD. AT LOS ANGELES NTERNATONAL ARPORT THS FRST AMENDMENT TO LEASE NO. LAA-8637 s entered nto ths day of, 207, at Los Angeles, Calforna, by and between the CTY OF LOS ANGELES, a muncpal corporaton, (heren after referred to as Cty ), actng by order of and through the Board of Arport Commssoners (herenafter referred to as Board ) of the Department of Arports, also known as Los Angeles World Arports (herenafter referred to as Department or LAWA ), and VRGN ATLANTC ARWAYS LMTED, (herenafter referred to as Lessee ). RECTALS WHEREAS, Cty and Lessee prevously entered nto Lease No. LAA-8637, commencng August 3,202 and exprng August 30, 207; and WHEREAS, Cty and Lessee desre to further extend the term of the lease; and NOW, THEREFORE, for and n consderaton of the covenants and condtons herenafter contaned to be kept and performed by the respectve partes hereto, T S MUTUALLY AGREED as follows: AMENDMENTS Secton. Descrpton of Demsed Premses. Artcle, Secton Descrpton of sad Lease s hereby deleted n ts entrety, and a new Artcle, Secton. Descrpton s hereby substtuted n leu thereof wth the followng:. Descrpton. The subject property s located at 5758 West Century Blvd, at Los Angeles nternatonal Arport, (herenafter referred to as LAX ) and ncludes () approxmately 45,387 square feet of land; () approxmately 8,674 square feet of pavng, () approxmately 72,544 square feet of buldng space, whch ncludes 9,78 square feet of offce space, 2,4 square feet of lobby space, 60,45 square feet of warehouse space, (v) and 33 parkng stalls ( Demsed Premses ) The Demsed Premses are generally delneated or depcted n the drawng and photographs on Arport Engneers Drawng MLE No. 89069-80 Revson No., attached hereto as Exhbt A (Premses) and also dentfed on Exhbt B (Payments), both of whch are attached hereto and ncorporated by reference heren. Secton 2. Term of the Contract. Artcle, Secton 2. Term of Lease of sad Lease s hereby deleted n ts entrety, and a new Artcle, Secton 2. Term of Lease s hereby substtuted n leu thereof wth the followng: 2.. Term of Lease. Ths Lease shall commence on August 3, 202 ("Commencement Date"), and shall termnate ten (0) years thereafter, unless earler termnated pursuant to the terms provded n ths Lease, provded that ether party may termnate the lease upon a One Hundred-eghty (80) day advance wrtten notce. Vrgn Atlantc Arways Ltd Frst Amendment- Lease 7-25-7/k-drve/NAK/Leases Page S'. cn f d \
Secton 3. Artcle, Secton 4.2 Rental Adjustments of sad Lease s hereby deleted n ts entrety, and n leu thereof, the followng shall be nserted: 4.2. Rental Adjustments. t s agreed that rent shall be adjusted each year n accordance wth the procedures provded herenafter. 4.2.. Annual Adjustments. Except when adjusted as provded n Artcle, Subsecton 4.2.2. Perodc Adjustment to Far Market Rental, below, the Monthly Rent shall be subject to automatc, annual rental adjustments on July of each year, or such other date that the Board adopts by resoluton (herenafter referred to as Annual Adjustment Date ). Begnnng on July, 202, the Monthly Rent shall be adjusted annually accordng to the percentage ncrease over the pror year, f any, n the Consumer Prce ndex, All Urban Consumers for the Los Angeles-Rversde-Orange County, Calforna area, 982-84=00 (herenafter referred to as the CP-U ), as publshed by the U.S. Department of Labor, Bureau of Labor Statstcs ("B.L.S."), or ts successor as follows: 4.2... Monthly Rent shall be multpled by the CP-U for the month of March mmedately precedng the Annual Adjustment Date (herenafter referred to as the Adjustment ndex ), dvded by the sad CP-U as t stood on March of the pror year (herenafter referred to as the Base ndex ) and the result shall be the Adjusted Monthly Rent to be appled effectve July through June 30, provded that the Adjusted Monthly Rent shall not be less than two percent (2%) n any year, n accordance wth the calculaton below. 4.2..2. The formula for calculaton of Adjusted Monthly Rent commencng each July durng the term of ths Lease shall be as follows: Adjusted Monthly Rent = Monthly Rent x Adjustment ndex Base ndex 4.2..3. f the B.L.S. should dscontnue the preparaton or publcaton of the CP-U, and f no transposton table s avalable, then Cty shall adopt a bass for adjustng and revsng the Monthly Rent on July annually to vary sad Monthly Rent accordng to any ncrease n commodty consumer prces over the pror year. 4.2.2. Perodc Adjustment to Far Market Rental. Provded that nothng heren shall be construed to grant Lessee any extenson rghts unless expressly stated n ths Lease, t s agreed that: () the Land rental rate shall be adjusted to the far market rental rate effectve as of July, 2020 and not less frequently than every fve (5) years thereafter to a far market rental rate; () the Buldng rental rates shall be adjusted to the far market rental rate fve (5) years after the Effectve Date and not. less frequently than every fve (5.) years thereafter to a far market rental rate () and the Pavng rates payable hereunder shall be adjusted by the Board of Arport Commssoners effectve as of the date specfed by the Board, retroactvely or otherwse, and not less frequently than every fve years thereafter to a far market rental rate payable hereunder. However, nothng heren shall be construed to grant Lessee a rght or opton to extend the Lease. Vrgn Atlantc Arways Ltd Frst Amendment- Lease 7-25-7/k-drve/NAK/Leases Page 2 5 & * / & $ /
4.2.2.. Partes May Negotate n Good Fath. At least one () year pror to the scheduled Perodc Adjustment Date and n accordance wth Artcle, Secton 4.2.2 above, the partes may (but are not requred to), n good fath, negotate the rental rate(s) applcable to the subject adjustment perod(s) as referenced above. Such good fath negotatons, ntated by ether party, may nclude the nvolvement of a thrd party revewer to revew and make nonbndng recommendatons regardng each party s rate adjustment proposal, dscussons regardng external and nternal factors that may be unque to the land and/or mprovements so that the revewer(s) can take them nto consderaton when makng the recommendatons, n substantally the same manner as corroborated by the partes and applcable to the Demsed Premses. The partes shall have contnung opportuntes to negotate n good fath n an attempt to reach agreement bn rental adjustment(s) notwthstandng each party s oblgaton to perform ts dutes as descrbed under Artcle, Secton 4.2.2.2 below. f the partes are able to reach an agreement on the adjustment to the rental rate(s), then sad rate(s) shall be presented as a recommendaton to the Board. However, f the partes are unable to reach fnal agreement durng sad negotaton perod, the partes may contnue to negotate n good fath to attempt to reach agreement untl arbtraton commences pursuant to Artcle, Secton 4.2.2.6 below. 4.2.2.2. Apprasal Process. f the partes cannot reach agreement on the rental rate(s) or the Board does not approve the agreed upon rental rate(s) as descrbed n Artcle, Secton 4.2.2. at least nne (9) months pror to the scheduled Perodc Adjustment Date, then the partes shall determne the Monthly Rent by the procedures descrbed n Artcle, Sectons 4.2.2.S through 4.2.2.5 below. Cty may elect to have such procedures apply separately to the rent applcable to mprovements and may adjust the land rental rates on the bass of arport-wde land rental rates then n effect, provded that such rates were adopted n complance wth applcable laws. Should Cty choose to adopt ths adjustment opton, Cty wll provde wrtten notce to Lessee no later than ten (0) months pror to the Perodc Adjustment Date of the ntenton to adjust land and mprovements separately. Separate apprasals wll be procured for the land and the mprovements (f any). Under ths opton, both the land and mprovement adjustments wll be completed separately under Artcle, Sectons 4.2.2.2 through 4.2.2.6. Cty or Lessee may elect to use the same appraser for both apprasal reports. Every effort wll be made by Cty and Lessee to consoldate any requred meetngs as requred n the apprasal process descrbed below. 4.2.2.3. Step : ndependent Apprasals. Cty and Lessee shall each select an appraser, who s a member of the Apprasal nsttute or ts successor organzaton and meets the Mnmum Qualfcatons as defned wthn ths Lease (a Qualfed Appraser ). Ether Lessee or Cty shall, when notfed n wrtng by the other to do so, delver to the other party the name and address of such appraser (each, selected Qualfed Appraser, a Man Appraser ), The Executve Drector shall mmedately fx the tme and place for a conference between the two partes and the Man Apprasers no later than ffteen (5) days from the date of the exchange of names and addresses of the Man Apprasers. At such meetng, both Lessee and Cty may have dscussons wth the Man Apprasers as to any externaltes that may affect the dervaton of rental value conclusons. The Apprasal nstructons to be gven to the Man Apprasers are as defned wthn ths Lease. Cty and Lessee Vrgn Atlantc Arways Ltd Frst Amendment- Lease 7-25-7/k-drve/NAK/Leases Page 3 & 5* > Ml J4S > r.
shall each pay the fees and expenses of ther respectve Man Apprasers. The narratve apprasals must be completed accordng to the Unform Standards of Professonal Apprasal Practce (USPAP) for the year n whch the apprasal s completed. No later than one hundred (00) calendar days after the date of the appraser meetng, a copy of the completed, fnal USPAP-complant apprasal report procured by both Cty and Lessee wll be made avalable for revew by the other party on the same day. f ether Cty or Lessee fals to delver ts apprasal report by the apprasal report delvery deadlne, the late party wll nform the other party n wrtng of the reason for the delay and the expected date on whch apprasal reports wll be exchanged. f ether party s apprasal report cannot be delvered wthn four (4) months of the appraser meetng, the complyng party shall have ts apprasal report presented to the Board for approval. Upon exchange of the two apprasal reports, n the event that the determnaton of the rental value n the two apprasal reports dffers by ffteen percent (5%) or less, the rate that s the average of the determnatons n the two apprasal reports shall be presented as a recommendaton to the Board. f the rate determnatons n the two apprasal reports dffer by more than ffteen percent (5%), the partes shall proceed to Artcle, Secton 4.2.2.5 below. 4.2.2.4. Step 2: Arbtraton Appraser Selecton. The Man Apprasers selected by each party shall be nstructed to agree upon and select an Arbtraton Appraser (as defned below) no later than sx (6) weeks after the appraser meetng descrbed above. The Arbtraton Appraser shall be a Qualfed Appraser that s not under contract wth the Cty for apprasal servces. f the Arbtraton Appraser selected s not avalable to perform the task pursuant to the nstructons set forth n Artcle, Secton 4.2.2.6 below or s unwllng to execute a Cty contract for the performance of apprasal servces, then Cty and Lessee shall nform the Man Apprasers and requre them to repeat the selecton process agan untl an avalable Arbtraton Appraser s selected. f the Man Apprasers cannot come to agreement on the selecton of an Arbtraton Appraser wthn (6) sx weeks from the date of the appraser meetng, the Executve Drector shall select an Arbtraton Appraser. 4.2.2.5. Apprasal Revew Perod. The partes shall have one () month to revew each other s apprasal reports from the date of the apprasal exchange as descrbed n Artcle, 4.2.2.3 above. The partes may contnue to negotate the adjusted rental rates durng ths perod. Wthn ffteen (5) calendar days of the apprasal report exchange n Artcle, Secton 4.2.2.3 above, the Executve Drector shall fx a tme and place for a negotaton meetng between the partes to be held no later than sx (6) weeks from the date of the apprasal report exchange. At such meetng, the partes shall attempt to reach a fnal agreement on the adjusted rental rates. Ether party may nclude ts Man Appraser n the meetng, f desred. f Lessee and Cty reach agreement on the rental rate adjustments, the Executve Drector shall present the results as a recommendaton to the Board. f Lessee and Cty are unable to reach agreement on the adjusted rental rate(s) by the date that s fourteen (4) calendar days from the date of the negotaton meetng, then the partes shall proceed to Step 3 below. 4.2.2.6. Step 3: Appraser Arbtraton. Cty and Lessee shall each pay one-half of the fees and expenses of the Arbtraton Appraser. The Arbtraton Appraser Vrgn Atlantc Arways Ltd Frst Amendment- Lease 7-25-7/k-drve/NAK/Leases Page 4 o 'f 2 5 SsS Z's tn a
selected by the two Man Apprasers or the Executve Drector, as the case may be, n Step 2, shall receve copes of both Lessee and Cty s fnal apprasal reports that were procured n Step and a lst of the rental rate adjustments that have not been agreed to by the partes. The Arbtraton Appraser shall be allowed three (3) weeks to revew both apprasal reports. After revew of the two apprasal reports, the Arbtraton Appraser wll determne whch of the rental rate(s) from the two apprasal reports are the most reasonable, consderng comparable data selecton, market nformaton and applcable valuaton methodology. The Arbtraton Appraser wll communcate ts decson n wrtng to both Lessee and Cty three (3) weeks after engagement. The Executve Drector shall present the agreed-upon rental rate(s) and the Arbtraton Appraser s determnatons as a recommendaton to the Board. Cty shall make every effort to present the rate(s) for approval to the Board pror to the Perodc Adjustment Date. 4.2.3. Apprasal Crtera. The followng apprasal crtera shall apply to Artcle, Sectons 4.2.2.3 through 4.2.2.6. 4.2.3.. Appraser Mnmum Qualfcatons. The Man Appraser must possess, at a mnmum, an MA or SRPA desgnaton and must be lcensed n the State of Calforna. The Man Appraser must perform all of the calculatons and techncal portons of the apprasal report as well as derve the fnal value conclusons wthn the apprasal report. The Man Appraser must have geographc market knowledge of the Los Angeles County area. Knowledge of the entre Southern Calforna real estate market s preferred. The Man Appraser must have a mnmum seven (7) years of experence of apprasng property n Southern Calforna. f the Man Appraser s valung property wthn the permeter fence of an arport ( onarport ), he or she must have performed a mnmum of fve (5) apprasals of onarport property wthn the past fve (5) years. 4.2.3.2. Man Apprasers must be n good standng wth the Calforna Bureau of Real Estate Apprasers (CBREA) or ts successor organzaton and have no more than one complant fled aganst hm or her for any reason and no complants that have resulted n any dscplnary actons. The Man Apprasers must certfy n the apprasal report that he or she has never receved any dscplnary actons from the CBREA. The Man Apprasers must be able to provde documentaton of the sources of comparable rental rate and sales data to the reasonable satsfacton of Cty and Lessee. 4.2.3.3. Apprasal nstructons. The Man Appraser shall consder the followng n completng the apprasal report: 4.2.3.3.. Los Angeles Admnstratve requrements that are n force upon Lessee wthn ts Lease at the date of value. 4.2.3.3.2. FAA regulatons that may affect value such as the Buldng Restrcton Lne, Object Free Area, Runway Protecton Zone, buldng heght lmtatons as related to the Transtonal Zone and any other regulatons that may affect value. Vrgn Atlantc Arways Ltd Frst Amendment- Lease 7-25-7/k-drve/NAK/Leases Page 5 0? % m T*, 5 <ra f
4.2.3.3.3. Cty zonng that apples to the property. f the Ctyapproved use does not conform to the current zonng at the date of value, and the current use s also determned to be the hghest and best use, then the Man Appraser wll value the property as f t had the zonng that would allow ts current use (varance granted). 4.2.3.3.4. Any publc or prvate easements, such as utltes or rghtsof-way, ncludng navgaton rghts. 4.2.3.3.5. The apprasal of land shall be determned as f vacant under ts hghest and best use at the date of value, takng nto consderaton the government mposed restrctons lsted above (both by law and restrctons as mposed under the Lease). The leasehold estate or lessee s nterest (as defned wthn the most recent edton of The Apprasal of Real Estate as publshed by the Apprasal nsttute) shall not to be consdered. 4.2.3.3.6. Cty and Lessee shall have the rght to modfy any condtons of the apprasal process upon mutual wrtten agreement of the partes. 4.2.4. Wth respect to addtons, mprovements, or alteratons to leasehold structures authorzed by Cty and made by Lessee durng the term of ths Lease, Lessee shall not be charged rent for the rental value thereof unless and untl ttle to sad addtons, mprovements, or alteratons revert to Cty pursuant to the terms of ths Lease or by operaton of law. 4.2.5. Nothng heren shall prejudce the rght of Lessee to contest, n a court of competent jursdcton, such adjusted rental n the event sad Board may have acted arbtrarly or unreasonably. However, pendng the outcome of any such ltgaton, Lessee shall be oblgated frst to ether pay the new rental and all retroactve amounts drectly to Cty as they come due, or depost such ncreased amounts of such rental and the retroactve amounts nto a jont escrow account. Provson shall be made for the payment to the Cty of the escrowed funds, ncludng accrued nterest, (to the extent such funds are owed by Lessee to Cty) upon a fnal determnaton of the approprate rental adjustment, f any. 4.2.6. Notwthstandng Artcle 2, Secton 70 below and subject to Artcle, Secton 4.2.7 below, f ether Party alleges that the other Party has faled to comply wth the procedure specfed n Artcle, Secton 4.2.2.2 above, the Party allegng noncomplance must notfy the other Party n wrtng wthn thrty (30) days, descrbng such noncomplance n detal and provdng the other Party a reasonable tme for cure (n any case, not less than ten (0) days), otherwse such noncomplance shall be deemed waved; provded that falure by the partes to tmely comply wth the rental readjustment procedures heren shall not be construed to consttute a waver of the rght of Cty to a rental readjustment. n the event adjustment of rental s not completed pror to the adjustment date, Lessee shall contnue to pay the rent set for the precedng perod, at the ntervals and n the manner fxed for such precedng perod, and f such rent s thereafter fxed n a dfferent amount, such new rental shall take effect retroactvely back to the begnnng date of the readjustment perod. Subject to Lessee s rght of contest and rght to escrow funds, unless the Board otherwse agrees to a payment plan wth nterest, Lessee shall promptly pay to Cty that sum, f any, whch has Vrgn Atlantc Arways Ltd Frst Amendment- Lease J7-Z5-7 /k-drve/nak/leases X Page 6! h~ z: & n W:
accrued as a result' of such retroactve applcaton. f a rental reducton occurs, Cty shall provde a rent credt to Lessee s account equal to the sum whch has accrued as a result of such retroactve applcaton. 4.2.7. f Cty has compled wth the apprasal procedure and related tme frames as set forth above, Cty shall be enttled to receve, n addton to all retroactve rents that become due as a result of Board-adjusted rental rate(s), the tme value of sad rental ncrease(s) calculated from the effectve date of the ncrease(s) to the tme perod that the rental ncrease(s) are assessed to the Lessee at an nterest rate representng what the Cty may have otherwse been enttled to f the funds assocated wth the ncrease(s) were avalable for Cty s use; however, n no event shall the nterest rate be less than fve percent.(5%). 4.2.8. Assessments. Fees, and Charges. n addton to the rental oblgaton, Lessee hereby agrees to pay such assessments, fees, and charges as shall be set by the Board and that shall be generally applcable to smlarly stuated lessees at Arport. Secton 4. Exhbt B. Exhbt B to the lease s hereby deleted n ts entrety and replaced by Exhbt B to ths Frst Amendment. Secton 5. Effect of ths Frst Amendment. Except as amended or modfed by ths Frst Amendment, the Lease s hereby ratfed and confrmed and all other terms of the Lease shall reman n full force and effect, unaltered and unchanged by ths Frst Amendment. f there s any conflct between the provsons of ths Frst Amendment and the provsons of the Lease, the provsons of ths Frst Amendment shall preval. Whether or not specfcally amended by ths Frst Amendment, all terms and provsons of the Lease are amended to the extent necessary to gve effect to the purpose and ntent of ths Frst Amendment. Secton 6. No Thrd Party Benefcares. No provsons of the Lease or the Frst Amendment may be amended or added to except by a wrtten agreement sgned by the Partes or ther respectve successors-nnterest. Ths Frst Amendment s not ntended to confer upon any person other than the Partes any rghts or remedes hereunder. Secton 7. Governng Law; nterpretaton. Ths Frst Amendment shall be governed by, and construed n accordance wth, the laws of the State of Calforna. The Lease and ths Frst Amendment s subject to the provsons of the Los Angeles Admnstratve Code. Each Party represents and warrants that ths Frst Amendment has been negotated and drafted at arms-length by equally sophstcated partes, and any ambguty cannot be attrbuted to ether Party hereto. f any provson of ths Frst Amendment, or the applcaton thereof to any persons or crcumstances, shall be nvald or unenforceable, the remander of ths Frst Amendment shall not be affected thereby, and each provson of ths Frst Amendment shall be vald and shall be enforceable to the fullest extent permtted by law. Secton 8. Counterparts. Ths Frst Amendment may be executed n any number of counterparts, each of whch shall be deemed an orgnal, but all of whch when taken together shall consttute one and the same nstrument. The sgnature page of any counterpart may be detached there from wthout mparng the legal effect of the sgnature(s) thereon provded such sgnature page s attached to any other counterpart dentcal thereto except havng addtonal sgnature pages executed by other partes to ths Frst Amendment attached thereto. N WTNESS WHEREOF, Cty has caused ths Frst Amendment to be executed on ts behalf by the Chef Executve Offcer and Lessee has caused the same to be executed by t duly authorzed offcers, all as of the day and year frst heren above wrtten. Vrgn Atlantc Arways Ltd Frst Amendment- Lease 7-25-7/k-drve/NAK/Leases Page 7 > PLA/VJ5S <'<s % Waj-rtt mm oo / «#** **
APPROVED AS TO FORM: Mchael N. Feuer, Cty Attorney CTY OF LOS ANGELES Date: -By: d leputy/assst; m [fyattorne; By. Chef Executve Offcer Department of Arports ATTEST: VRGN ATLANTC ARWAYS LMTED By. Sgnature By Sgnature Prnt Name ToK Prnt Name [SEAL] l C Po Prnt Ttle < g Z U2. 35 Vrgn Atlantc Arways Ltd Frst Amendment- Lease 7-25-7/k-drve/NAK/Leases "S.. Page 8
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PAYMENTS Lessee: Address: Lease No: Vrgn Atlantc Arways, nc. 5758 W. Century Boulevard, LAX LAA-8637 Frst Amendment - Extenson of lease term Changed expraton from August 30, 207 to August 30, 2022 Effectve August 3, 207 Component/ tem: Area: Unt: Rate:* Unt: Annual Rent: Monthly Rent: Cargo Land 45,387 SF Auto Pavng 8,674 SF $3.3800 PSFPY $ 49,408.06 $0.40000 PSFPY $ 32,669.60 $40,950.67 $2,722.47 Buldng 72,544 SF $22.00 PSFPY $,595,968.00 $32,997.33 Totals $ 2,20,045.66 $76,670.47 Annual/Monthly Rent s subject to perodc and annual rental adjustment(s) pursuant to lease. Abbrevatons: Square Feet = SF, PSFPY = Per square foot per year The amount requred for the Fathful Performance Guarantee s: $530,0.42 fs'-' V EXHBT B