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Anatomy of a Lease 27 if a hurricane or unusual rainfall delays construction and places the sponsor in the position of being unable to meet the obligations of the lease/development agreement due to circumstances beyond its control. 2.2.26 Holdover Holdover provisions of an airport lease simply allow the airport sponsor to extend the terms of an existing airport lease, in the event both the airport sponsor and the tenant desire to con- tinue the relationship as it exists, without execution of a new lease. Holdover provisions are use- ful in bridging gaps and meeting short-term needs of the parties involved, but should be used sparingly. Renegotiation of a lease or transition of lessees are typical uses of holdover provisions, where it is mutually beneficial for all parties to preserve the terms of the existing agreement with- out rushing negotiation for the sake of meeting a deadline, or for bridging the operational gaps that might occur between tenants. At the end of a long-term lease, the revenue associated with a lease may be below market value, so holdover provisions of that lease may result in a reduced revenue stream to the airport sponsor. Holdover provisions should be used sparingly. Holdover provisions should not be confused with extension options, as extension options in- volve an additional period of time, as well as adjustment in rental rates for that extended period. Holdover language may include an adjustment in rents as well, but this provision is meant to provide short-term extension of the protections and terms described within the lease document and not the protection of the tenant that is reluctant to negotiate a new agreement. For this rea- son, the airport sponsor may choose to negotiate a premium into the lease for the exercise of holdover provisions, as well as the ability to waive increased rents or premiums, if the applica- tion of holdover provisions is for benefit of the airport sponsor. 2.3 Optional Lease Elements Optional lease elements are typically added to address financial and business concerns of com- mercial lessees and are designed to protect the investments made in on-airport facilities. These lease elements are not a requirement. They are negotiated into the agreement by the lessee in order to protect the lessee's interests. However, their addition to the lease agreement is at the discretion of the airport sponsor. The airport sponsor must be certain that the addition of any language grant- ing or limiting commercial activity does not provide a single tenant with a potential commercial advantage over its competition, limit on-airport competition, or hinder the highest-and-best use of airport land or facilities. Any lease element that does so may put the airport in violation of FAA grant assurances. These grant assurances are addressed in greater detail in Chapter 3, Sec- tion 3.2 (Grant Assurances and Federal Compliance) of this Guidebook. 2.3.1 Noncompete Clause A noncompete clause is intended to protect the business and financial position of an airport commercial lessee by limiting on-airport competition in the field of commerce in which the les- see is engaged. The clause states that the airport will not lease a property to a commercial entity that will provide the same services and be in direct competition with the lessee. A noncompete clause is most common among FBOs and maintenance, repair, and overhaul (MRO) facilities and business providing essential fueling and maintenance services to airport users. A noncom- pete clause will typically provide the lessee with a means to terminate the lease agreement with- out penalty should the terms be violated.