EFTA01108914.pdf

LDB 2011 LLC ART LEASE AGRFPMENT WHEREAS, on August 19, 2011, LDB 2011 LLC (the "LLC") became the owner of the items of art listed on the attached Schedule A (the "Art") when the trusts that owned the Art, the BEB 2011 TRUST, the Th159 2011 TRUST, the ASB 2011 TRUST and the VRB 2011 TRUST transferred their interests in the Art to the LLC as a contribution to the capital of the LLC; and WHEREAS, LEON BLACK (the "Lessee") wishes to lease the An from the LLC; and WHEREAS, the LLC has determined it advisable to lease the Art to the Lessee; and WHEREAS, the Lessee and the LLC (separately referred to as a "Party" and collectively referred to as the "Parties") would like to formalize the terms under which the LLC leases the Art to the Lessee; and WHEREAS, the Lessee acknowledges that all of the Art is currently in his possession and is in good condition. NOW THEREFORE, the Parties agree as follows: 1. PERIOD OF LEASE. The period of the lease shall begin on August 19, 2011 and shall end upon the earliest to occur of (i) the date of Lessee's death and (ii) the termination date described in paragraph 5. 2. INSURANCE. a. The Lessee agrees to reimburse the LLC for all risk wall-to-wall fine arts insurance coverage for the safekeeping and preservation of the Art, such Art to be insured for the value stated on Schedule A attached hereto (the "Insurance Value"). The LLC agrees that the insurance coverage it has obtained for the Insurance Value of the Art is the stated value for each item of the Art and all claims, whether for full or partial damage, will be based on the Insurance Value. If the Lessee so requires, the LLC agrees to provide the Lessee with a Certificate of Insurance evidencing such insurance coverage. Any other statement by the Lessee to the contrary notwithstanding, the Lessee hereby specifically agrees to accept absolute responsibility for the Art wall-to-wall at the Insurance Value and to accept responsibility and liability for any deficiencies or exclusions in insurance coverage. The Lessee agrees to use reasonable efforts as required to enable the LLC to submit and pursue a claim for insurance OMUS 312343234.014835.0011 EFTA01108914  item of the Art, the coverage. In the case of partial loss or damage to any cost of repair to such LLC and the Lessee shall agree upon the reasonable t value and fair Art and the amount of any reduction in the fair marke , or in the absence market rental value of such item of the Art after repair appraiser selected of agreement, these amounts will be determined by an Lesse e shall pay all by the Parties as provided in paragraph 4.a. The costs in connection with the appraiser's evaluation. review the insurance b. From time to time, the Parties shall increase such coverage of the Art and determine whether to insurance coverage. 3. CARE AND PRESERVATION. arable property a. The Lessee will give the Art the same care he gives comp from fire, theft, of his own. Precautions will be taken to protect the Art es of light, temperature, mishandling, dirt, and insects, and from extrem by the Parties and humidity while in Lessee's custody. It is understood nt deterioration for that all tangible objects are subject to gradual inhere which neither Party is responsible. in the Lessee's b. Evidence of damage at the time of receipt or while custody will be reported immediately to the LLC. rization for any c. The LLC will be requested to provide written autho purposes, may alteration, restoration, or repair. The Lessee, for his own examine objects by all modem scientific methods. the Lessee shall pay the 4. PAYMENT OF RENT. During the term of the lease, of each year. The LLC the fair market rental value of the Art on December 31 market rental value rental payment for any partial year shall be prorated. The fair of the Art shall be determined as follows: lly on or about a. The fair market value of the Art shall be determined annua ed by the Parties November 30 of such year by a qualified appraiser select al Revenue in accordance with the principles of section 2512 of the Intern valua tion princi ples set Code of 1986, as amended (the "Code"), and the lgated under the forth in section 25.2512 of the treasury regulations promu ined as determ Code (the "Regulations"). The fair market value of the Art shall be referred to as by such qualified appraiser in any particular year the "Annual Appraisal Value." 2 DM US 31234328.3.018835.00 I EFTA01108915  b. All expenses incurred in connection with the foregoing appraisals shall be paid by the Lessee. c. The fair market rental value of the Art in any particular year shall be equal to the Annual Appraisal Value multiplied by the published Federal interest rate applicable to demand notes for the month during which such payment is being made. d. The Lessee's obligation to pay to the LLC the fair market rental value of the Art shall commence on August 19, 2011 and in each subsequent calendar year shall commence on the first date of such calendar year. Interest shall accrue on any unpaid rent owed by Lessee to the LLC at the applicable federal rate prescribed under section 1274(d) of the Code for the month in which Lessee's obligation to pay to the LLC the fair market rental value of the Art commences. 5. TERMINATION AND RETURN OF ART. This Agreement shall terminate five (5) business days after written notice of one Party of his or its desire to terminate has been delivered to the other Party. After such termination neither Party shall have any further obligation to the other, except as specifically provided in this paragraph. The Lessee shall return all of the Art to the LLC within ten (10) business days at his expense to such address as the LLC shall direct in a written notice delivered to the Lessee. The provisions of paragraphs 2 and 3, relating to insurance and liability for damage to the Art, and the provisions of paragraph 4 relating to the payment of rent for any prorated year, shall survive the termination of the Agreement. 6. NOTICES. Any notice required herein shall be deemed to have been delivered to a Party at such time as it is actually received by such Party. Notices shall be delivered to a Party at the address set forth below, unless such Party provides another address to the other Party for purposes of delivering notices. To the Lessee: Leon D. Black 760 Park Avenue New York, New York To the LLC: John J. Hannan do Apollo Management LP 9 West 57th Street, 43rd Floor New York, New York I0009 7. ENTIRE AGREEMENT/CHOICE OF LAW: This Agreement contains the entire understanding between the Parties with respect to the Art and may only be modified by a written document signed by both Parties. This Agreement shall be interpreted in accordance with the laws of the State of New York. 3 DikUS 31234328-3.088835.0011 EFTA01108916  LESSEE: Date: V7-4 , 2012 THE LLC: BEB 2011 TRUST, Member ]MB 2011 TRUST, Member ASB 2011 TRUST, Member VRB 2011 TRUST, Member Date: / /k<2012 Date: t/j y , 2012 Date: --)7A , Z- 3 , 2012 4 DM US 31234328.3.088833.CO11 EFTA01108917  SchedUle A Artist Name of Item Date of Purchase William Blake Tne Parable of the Wise 6/8/2000 Georges Seurat Le Chien Nov 8/10/2000 Pablo Picasso Deux Femmes. Hiver 8/15/2000 Paul Gaugin Femme Tahitienne 2/2/2001 Alexander Calder Portrait de Ferdinand Leger 3/21/2001 Pablo Picasso Jeune Homme et Cheval 6/11/2001 Egon Schiele River Landscape With Two Trees 5/8/2006 Georges Seurat Au Divan Japonais 12/12/2008 Antoine Watteau Study of a Seated Woman 7/18/2000 Mondrian Church at Bomberg 4/25/2002 5 DM_US 31234 328-3.088835.001 1 EFTA01108918  Leon Black Art Lease Agreement Instrument Transmitting Payment of Rent ment (the "Art Lease WHEREAS, as of December 31, 2011, an agree LLC (the "LLC") and Leon D. Agreement") was entered into by and between LAB 2011 Black, in his individual capacity (the "Lessee"); and on the attached Schedule A WHEREAS, the LLC received the items of art listed since that time; and (the "Art") on August 19, 2011, and has owned the Art all of the Art to the WHEREAS, since August 19, 2011, the LLC has leased Lessee and the Lessee has accepted such lease; and Lease Agreement to WHEREAS, the LLC and the Lessee entered into the Art Art to the Lessee; and formalize the terms under which the LLC has leased the that the Lessee shall WHEREAS, section 4 of the Art Lease Agreement provides exchange for the Lease of the Art. be required to make an annual payment to the LLC in ar year; and Such payment shall be made on December 31g of each calend to the product of WHEREAS, the amount of such annual payment shall be equal the year with respect to which (1) the fair market value of the Art as of November 30th of al interest rate applicable to the payment is being made and (2) the published Feder made; and demand notes for the month during which such payment is being by Lessee for the entire WHEREAS, the parties have calculated that the rent owed n 4 of the Art Lease calendar year• 2011 based on the formula set forth in sectio Agreement is $93,500; and such rent for the period WHEREAS, because the parties to whom the Lessee owes r in existence and have of time in calendar year 2011 prior to August 19th, are no longe e that it is appropriate for the transferred all of their assets to the LLC, the parties believ ar year 2011 even though the Lessee to pay the LLC the full $93,500 in rent for calend LLC did not hold the Art until August 19th, 2011; and the LLC the sum of NOW, THEREFORE, (1) the Lessee hereby transfers to under sectio n 4 of the Art Lease $93,500 in full satisfaction of his payment obligation ent of such sum in full Agreement for 2011 and (2) the LLC acknowledges paym satisfaction of such obligation for 2011. DM US 30781132-2.088835.001I EFTA01108919  LESSEE: f/ij AU Date: )/ , 2012 Leon D. Black THE LLC: BEB 2011 TRUST, Member JMB 2011 TRUST, Member ASB 2011 TRUST, Member VRB 2011 TRUST, Member Date: Ovg V2012 Date: //)..41, , 2012 ebra R. Black Trustee Date: itA . 2-3 .2012 /Barry J. Trustee 2 DM US 30783832-2.08U35.001I EFTA01108920  LESSEE: Date: , 2012 Leon D. Black THE LLC: BEB 2011 TRUST, Member JMB 2011 TRUST, Member ASB 2011 TRUST, Member VRB 2011 TRUST, Member Date: //1//t 2;12 Date: 1/ 1 /11,-V , 2012 Date: ) 7-o . 2-3 , 2012 (Barry J. Trustee 2 DM US 30783 83:-.2 OU835.001 I EFTA01108921