HomeMy WebLinkAbout11/28/2001 - STAFF REPORTS (5) DATE: November 28,2001
TO: City Council
FROM: Deputy Director of Aviation-Administration via Interim Director of Aviation
ABBEY PROPERTIES LLC ("Abbey")
RECOMMENDATION:
It is recommended that the City Council affirm Estoppel certificates and reaffirmations as
part of financing efforts undertaken by Abbey.
SUMMARY:
This item would allow"Abbey"to proceed with first trust deed financing.
BACKGROUND:
The"Abbey,"which leases the Airport Park Plaza, is seeking financing of approximately
$145 million. The financing will be through a blanket 1"trust deed,or a deed covering the
entire leasehold, and mezzanine debt structure, or a temporary additional loan. The net
proceeds of the financing will be used to facilitate the buyout of"Abbey's" 70% equity
partner Rodamco North America,while converting all floating rate debt instruments into a
ten(10)year fixed rate note.
"Abbey"has solicited two (2) separate banks to provide the first trust deed financing, JP
Morgan,and Union National Bank. At this time,"Abbey"has not selected which of the two
(2) banks will ultimately provide this financing. Nevertheless, each bank has requested
Estoppel Certificates for each of the three (3) leases at the Airport Park Plaza, and that is
why there are six(6)total Estoppel Certificates.
The Estoppel Certificates generally require that the City confirm that "Abbey" is not in
default of the leases that approved the liens on the leasehold interest, and consent to the
bank taking over the lease if"Abbey"defaults.
The City Attorney's office has revised the representation made by the City in the Estoppel
Certificates,which initially stated that the"Abbey"is not in default of the leases. Now,the
representation states that, "to the best of the City's knowledge,"there is no default. This
way,the City has a potential argument that it has not waived any undisclosed breaches by
"Abbey."
The lender for the mezzanine debt, Capri Select Income, LLC,has also requested that the
City affirm to it that the information in the Estoppel Certificates are being relied upon by
Capri as well. Rather than require a separate Estoppel Certificate, therefore, Capri has
provided the three(3)reaffirmations attached to this staff report for the City to execute.
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Abbey Properties LLC ("Abbey")
November 28, 2001
Page 2
The"Abbey" continues to be a good airport tenant and is current in its lease payments.
ag !/� G APPROVED.
RICHARD STRICKLAND 4i—A-FELEN F. SMOOT, A.E.
Deputy Director of Aviation-Administration Interim Director of Aviation
APPRO ED-E� �✓ /�es�
City Manager
Attachments: 1. Minute Order
2. Estoppel Certificates
3. Reaffirmations
.34
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c City of Palm Springs
Department of Aviation
Palm Springs International Airport
* `Oap°xaiE°a9 3400 E Tahquin Canyon Way,Swte-OFC • Palm Springs,California 92262-6966
q< FO ft��P TEL:(760)3 t8-3800 •FAX(760)318-38 t5 • TDD(760)864-9527
November 28, 2001
Capri Select Income, LLC
875 N. Michigan Avenue
Chicago, Illinois 60611
Attention: Daniel Goelz
RE: Lease Agreement#2528 as amended collectively referred to as the"Ground Lease"
Gentlemen:
The undersigned understands that Capri Select Income, LLC and its participants,
successors and assigns from time to time (collectively the "Lender") is considering making a loan
(the "Loan") to Abbey Properties LLC, the direct or indirect owner of the tenant under the Ground
Lease and that the Loan relates to the property and improvements leased under the Ground
Lease. We also understand that Lender will not make the Loan unless we execute and deliver this
undertaking and agreement to Lender, and that Lender will rely on this letter agreement.
To induce Lender to make the Loan, the undersigned hereby certifies, undertakes and
binds itself as follows to Lender and any person who may purchase the Loan in lieu of or
subsequent to a foreclosure of the Loan (collectively, the "Lender Parties"):
1. The undersigned has executed and delivered to and for the benefit of Morgan Guaranty
Trust Company of New York and its successors and assigns (collectively, "Morgan") that certain
estoppel agreement dated (the "Estoppel"), a copy of which is attached
hereto to;
2. The undersigned acknowledges that the Lender Parties are interested parties and may rely
upon the Estoppel and are entitled to the same rights on the same basis and to the same extent
(and subject to the same limitations as are set out in the Estoppel) as Morgan and as if the Lender
Parties were originally named as an addressee thereof.
3. The provisions of the Estoppel are reaffirmed and remade as of the date hereof to and for
the benefit of Lender Parties by the undersigned, and are true and correct as of the date hereof
and except as follows:
Executed as of the date first set forth above.
Attest: CITY OF PALM SPRINGS
A municipal corporation
By
City Clerk By:
Name:
Title:
Post Office Box 2743 0 Palm Springs, California 92263-2743 34 3
Q PALM S
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�c City of Palm Springs
Department of Aviation
Palm Springs International Airport
t 'CO4ORP EO R
3400 E.Tah ¢quz Canyon Way,Suite-OFC• Palm Springs,California 92262-6966
F�RNA TEL:(760)318-3800 • PAX(760)318-3815 •TDD(760)864-9527
November 28, 2001
Capri Select Income, LLC
875 N. Michigan Avenue
Chicago, Illinois 60611
Attention: Daniel Goelz
RE: Lease Agreement#2529 as amended, collectively referred to as the "Ground Lease"
Gentlemen:
The undersigned understands that Capri Select Income, LLC and its participants,
successors and assigns from time to time (collectively the "Lender") is considering making a loan
(the "Loan") to Abbey Properties LLC, the direct or indirect owner of the tenant under the Ground
Lease and that the Loan relates to the property and improvements leased under the Ground
Lease. We also understand that Lender will not make the Loan unless we execute and deliver this
undertaking and agreement to Lender, and that Lender will rely on this letter agreement.
To induce Lender to make the Loan, the undersigned hereby certifies, undertakes and
binds itself as follows to Lender and any person who may purchase the Loan in lieu of or
subsequent to a foreclosure of the Loan (collectively, the"Lender Parties"):
1. The undersigned has executed and delivered to and for the benefit of Morgan Guaranty
Trust Company of New York and its successors and assigns (collectively, "Morgan") that certain
estoppel agreement dated (the "Estoppel'), a copy of which is attached
hereto to;
2. The undersigned acknowledges that the Lender Parties are interested parties and may rely
upon the Estoppel and are entitled to the same rights on the same basis and to the same extent
(and subject to the same limitations as are set out in the Estoppel) as Morgan and as if the Lender
Parties were originally named as an addressee thereof.
3. The provisions of the Estoppel are reaffirmed and remade as of the date hereof to and for
the benefit of Lender Parties by the undersigned, and are true and correct as of the date hereof
and except as follows:
Executed as of the date first set forth above.
Attest: CITY OF PALM SPRINGS
A municipal corporation
By
City Clerk By:
Name:
Title:
Post Office Box 2743 0 Palm Springs, California 92263-2743 341
OF ALAI S
City of Palm Springs
} Department of Aviation
Palm Springs International Airport
C ' _ 3400 E.Tnhqu¢z Canyon Way,Suite-OFC• Palm Springs,California 92262-6966
FO R�A\P TEL:(760)318-3800 •FAX(760)318-3815 • TDD(760)864-9527
November 28, 2001
Capri Select Income, LLC
875 N. Michigan Avenue
Chicago, Illinois 60611
Attention: Daniel Goetz
RE: Lease Agreement#2636 as amended, collectively referred to as the"Ground Lease"
Gentlemen:
The undersigned understands that Capri Select Income, LLC and its participants,
successors and assigns from time to time (collectively the "Lender") is considering making a loan (
the "Loan") to Abbey Properties LLC, the direct or indirect owner of the tenant under the Ground
Lease and that the Loan relates to the property and improvements leased under the Ground
Lease. We also understand that Lender will not make the Loan unless we execute and deliver this
undertaking and agreement to Lender, and that Lender will rely on this letter agreement.
To induce Lender to make the Loan, the undersigned hereby certifies, undertakes and
binds itself as follows to Lender and any person who may purchase the Loan in lieu of or
subsequent to a foreclosure of the Loan (collectively, the"Lender Parties"):
1. The undersigned has executed and delivered to and for the benefit of Morgan Guaranty
Trust Company of New York and its successors and assigns (collectively, "Morgan") that certain
estoppel agreement dated (the "Estoppel'), a copy of which is attached
hereto to;
2. The undersigned acknowledges that the Lender Parties are interested parties and may rely
upon the Estoppel and are entitled to the same rights on the same basis and to the same extent
(and subject to the same limitations as are set out in the Estoppel) as Morgan and as if the Lender
Parties were originally named as an addressee thereof.
3. The provisions of the Estoppel are reaffirmed and remade as of the date hereof to and for
the benefit of Lender Parties by the undersigned, and are true and correct as of the date hereof
and except as follows:
Executed as of the date first set forth above.
CITY OF PALM SPRINGS
Attest: A municipal corporation
By By:
City Clerk
Name:
Title:
Post Office Box 2743 0 Palm Springs, California 92263-2743 34
Swidler Berlin Shereff Friedman,LLP
Draft dated October 15, 2001 Oss/mkf)
PREPARED BY AND AFTER
RECORDING RETURN TO: Loan No.
SvMler Berlin Shereff Friedman,LLP
3000 K Street,NW
Suite 300
Washington,DC 20007
Attention: Jeffrey S. Scharff, Esq.
AGREEMENT OF GROUND LESSOR
FOR LEASE NO. 2636
This Agreement of Ground Lessor ("Agreement") is executed as of 2001, by
and among The City of Palm Springs, a California municipal corporation ("Lessor"), whose
address is City Hall, Palm Springs, California 92262; MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, a New York banking corporation ("Lender"), whose address for
purposes hereof is 60 Wall Street, New York, New York 10260-0060, Attention: Nancy Alto; and
AP — PALM SPRINGS AIRPORT LLC, a Delaware limited liability company ('Lessee"), whose
address for purposes hereof is c/o The Abbey Company, 12383 Lewis Street, Suite 20, Garden
Grove, California, 92840,
WHEREAS, Lessor and Peacock-Radaker Corporation ("PR") entered into that certain
Indenture of Lease Agreement No. 2636 dated November 3, 1988 upon and subject to all of the
provisions therein contained as disclosed by that certain Lease Agreement, recorded July 31, 1989
as Instrument No. 253625, Official Records of Riverside County, California (`Original Lease")
pursuant to which Lessor granted PR a leasehold interest in and to certain real property and the
improvements thereon, together with all rights, easements and interests appurtenant thereto
(collectively, the "Property"), which real property is more particularly described on Exhibit A
attached to the Original Lease and incorporated herein by this reference.
WHEREAS, the Original Lease is amended by the Amendment No. 1 to Indenture of Lease
Agreement No. 2636, entered January 2, 1991 by and between Lessor and PR, the Second
Amendment to Lease Agreement #2636, entered October 21, 1993 by and between Lessor and
John Apostle and Helen Apostle, Trustees of the Apostle Family Trust dated July 6, 1984
(`AFT"), the Third Amendment to Lease Agreement 92636, entered December 15, 1993, by and
between Lessor and AFT; and the Fourth Amenchnent to Lease No. 2636, entered October 25,
2000 by and between Lessor and Lessee. The Original Lease as so amended is referred to herein
as the "Lease."
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to AFT by Assignment of Lease recorded December 27, 1993 as
Instrument No. 514485 Official Records of Riverside County, California.
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to Helen Apostle, as Trustee of the Survivor's Trust created under the
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Apostle Family Trust dated July 6, 1984 as amended ("Apostle") by Assignment of Lease
recorded October 16, 1998 as Instrurnent No. 449223 Official Records of Riverside County,
California.
WHEREAS, Apostle assigned to Lessee all right, title and interest in the Lease and Lessee
accepted such Assignment on the terms and conditions contained in that certain Assignment and
Assumption of Lease Agreement No. 2636 and Consent to Assignment dated October 25, 2000.
WHEREAS, a copy of the Lease (including all amendments and modifications thereto) is
attached hereto as Exhibit "A" and incorporated herein by this reference; and
WHEREAS, as an accommodation to Lessee, Lessor has agreed to execute this Agreement
for the benefit of Lender with the understanding that Lender is relying on the agreements set forth
herein as an inducement to Lender in making a loan (the "Loan") to Lessee to be secured, in part,
by a lien granted by Lessee upon Lessee's rights and interests in and under the Lease.
NOW, THEREFORE, for and in consideration of the premises, and for the sum of Ten and
NO/00 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of
which consideration is hereby acknowledged and confessed, the parties hereto hereby represent,
covenant and agree as follows:
1. Lessor consents to the execution and delivery by Lessee to Lender of a Deed of
Trust, Security Agreement, Assignment of Rents and Fixture Filing (the "Security Instrument")
covering Lessee's leasehold interest in and to the Property and the recording of same in the
applicable real property records. Lessor also consents to the execution and delivery by Lessee, and
the filing and/or recording in the appropriate public records, of such additional documents and
instruments as Lender may deem necessary or desirable to establish, perfect and maintain a lien
upon and against Lessee's said leasehold interests, including, but not limited to, Uniform
Commercial Code financing statements and such other documents, instruments and agreements as
Lender may hereafter deem necessary or desirable in connection with the creation, grant,
maintenance or enforcement of said lien, including, but not limited to, any such documents and
instruments executed in connection with any renewal, extension and/or modification of such lien.
2. Both Lessor and Lessee represent that, to the best of their knowledge, they are
aware of no default under the terns of the Lease by either parry thereto has occurred and is
continuing as of the date of this Agreement, nor, to the best of their knowledge, does there exist
any condition or event which with notice, the passage of time, or both would constitute a default
by either party thereunder.
3. In the event of an event of default by Lessee under the Lease (and after the
expiration of any cure periods related thereto),Lessor shall give written notice thereof to Lender at
the address indicated above (or such other address as Lender may indicate by notice hereafter to
Lessor in writing) and Lender shall have the right (but not the obligation) to cure such default or
failure within thirty (30) days following Lender's receipt of such notice; and Lessor shall not take
any action with respect to such failure under the Lease, including, without limitation, any action
intended to terminate, rescind or avoid the Lease or Lessee's tenancy or possession thereunder, for
such period of thirty (30) days after Lender's receipt of such written notice; provided, however,
that in the case of any nonmonetary default which cannot with diligence be cured within said 30-
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day period, if Lender shall proceed promptly to initiate measures to cure such failure and thereafter
prosecute the curing of such failure with diligence and continuity, the time within which such
failure may be cured shall be extended for such period as may be necessary to complete the curing
of such failure with diligence and continuity. Without limiting the foregoing, Lessor agrees that
no event of default and no termination of the Lease in connection therewith shall be effective
unless notice shall first have been given to Lender in accordance with the terms of this Agreement.
With respect to defaults by Lessee that are not capable of or subject to cure by Lender
pursuant to the preceding paragraph, so long as Lender pays or causes to be paid any rent or other
monetary obligations of Lessee due under the Lease as the same becomes due, and initiates steps
to acquire Lessee's interest in the Lease by foreclosure or other appropriate means and prosecutes
the same to completion with diligence and continuity (unless such action is stayed or enjoined),
Lessor shall not terminate the Lease and the Lender shall be entitled to a sufficient time period
(including any period during which the Lender's actions are stayed or enjoined) to complete its
steps to acquire Lessee's interest in the Lease prior to termination of the Lease by the Lessor.
Nothing in this Section 3, however, shall be construed to extend the Lease beyond its original tern
(as extended by any options to extend), nor require Lender to initiate or continue foreclosure
proceedings after any event of default has been cured. If an event of default has been cured, and
Lender has elected not to initiate or to discontinue any foreclosure proceedings, then the Lease
shall continue in full force and effect as if Lessee had not defaulted under the Lease.
Lessor further agrees that if the Lease is terminated for any reason, including without
limitation because an event of default under the Lease is not capable of or subject to cure, or
because of the bankruptcy or insolvency of Lessee, Lender shall have the option (upon written
notice to Lessor) to enter into a new ground lease with Lessor on substantially the same terns as
the Lease for the then remaining tern(plus any options to extend) of the Lease(which new grourad
lease shall be prior to any mortgages, liens, or encumbrances on Lessor's fee interest) following the
termination of the Lease by Lessor or the rejection of the Lease by a bankruptcy trustee trader
applicable laws.
4. Lessor consents to the exercise by Lender of any and all rights and remedies
permitted under the Security Instrument and such other documents as may be executed by Lessee
in connection with the Loan, and to the exercise of such additional legal and equitable rights and
remedies as may be available to Lender, in the event of a default or event of default under the
Loan. Furthermore, Lessor expressly agrees that neither the execution, delivery and/or recording
of the Security Instrument, nor the execution, delivery and/or recording or filing of any other
instrument or agreement by Lessee or Lender in connection with the Security Instrument, nor any
other matters to which Lessor has given its consent herein, shall be deemed to constitute a default
or event of default under the Lease.
5. In the event Lender shall ever become the owner of the rights and interests of
Lessee in and to the Property and Lease by reason of judicial foreclosure,nonjudicial trustee's sale
or other proceedings brought by lender to enforce its rights under the Security Instrument, or
through any other means or manner in connection with the Loan, Lender shall be deemed to be
Lessee's successor and assignee under the Lease (notwithstanding anything in the Lease
prohibiting or restricting assignment by the Lessee or establishing conditions under which an
assignment by the Lessee would be permitted) and shall be entitled to all rights, benefits and
privileges of the Lessee under the Lease; and Lessor shall be bound to Lender under all of the
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terms, covenants and conditions of the Lease for the balance of the term thereof remaining and any
renewal or extension period thereof duly exercised as required by the Lease, all without the need to
execute any further instruments on the part of Lessor, Lessee or Lender to make such succession
and assignment effective and binding upon Lessor. Provided, however, that Lender or its direct
successors or assigns shall not be (i) liable for any action or omission of Lessee, other than the
payment of rent due under the Lease if Lender exercises its rights under Section 3 hereof, or (ii)
bound by amendment or modification of the Lease made without Lender's advance written consent
(which consent shall not be unreasonably withheld).
6. Notwithstanding anything to the contrary set forth or contained in the Lease, Lessor
hereby waives any contractual and/or statutory liens and any rights of distress with respect to the
property of Lessee (or Lessee's sublessees, success or assigns, including Lender)from time to time
located within or upon the Property ("Lessee's Property"), during the term of the Lease or any
extension thereof. It is hereby covenanted and agreed by Lessor that the Lease does not and will
not, from and after this date, be construed or deemed to grant a contractual lien or any other
security interest to Lessor or in favor of Lessor with respect to Lessee's Property. Lessor agrees to
execute and deliver such other instruments as may be reasonably requested by Lessee or Lender
from time to time to evidence or confirm this waiver by Lessor.
7. The Lease shall not be amended, modified, cancelled or terminated (except as set
forth in Section 3 hereof) in any manner or respect without the prior written consent of Lender and
any purported amendment, modification, cancellation or termination made without such consent
shall be ineffective and void as to Lender. Lessor and Lessee warrant and represent that the copy
of the Lease and other written documents attached hereto as Exhibit "A" are true, correct and
complete copies of the Lease and that the Lease is in fall force and effect and has not been
amended or modified except as disclosed in Exhibit "A" attached hereto and incorporated herein
by this reference. Other than the Lease (and any amendments thereto as are described herein),
there are no other agreements, written or oral, between Lessor and Lessee regarding the Lease or
the Property. The Lessor has not assigned the Lease or otherwise transferred any interest in or
under the Lease.
8. For purposes of this Agreement, the term "Lender" shall include its successors and
assigns, including, but not limited to, any person who acquires Lessee's interest trader the Lease
pursuant to a foreclosure of the Security Instrument. Any leasehold mortgagee of any person(and
that person's successors and assigns) who acquires Lessee's interest under the Lease pursuant to a
foreclosure or pursuant to an assignment from Lender shall be entitled to all rights of Lender under
this Agreement. All references herein to Lessor and Lessee shall likewise include the respective
personal representatives, heirs, successors and assigns for each such party (including, without
limitation, any person, party or entity to whom either Lessor's and/or Lessee's respective rights
and interests in and under the Lease may be assigned). This Agreement shall accordingly be
binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. Without limiting the foregoing, Lessor agrees that
notwithstanding any provision in the Lease to the contrary, if Lender becomes the lessee under the
Lease, Lender shall have the right to assign its interest in and to the Lease without the consent of
Lessor, provided, however, Lender shall give Lessor prompt written notice of any such
assignment. Upon acceptance of such assignment by Lender's assignee, Lender shall be released
from any further liability under the Lease as of the date of such ass bamment.
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9. Lessor represents and warrants to Lender that, to the best of its knowledge, no
consent or joinder of any other party is required to Lessor's execution of this Agreement. Lessor
shall not, without the prior written consent of Lender, mortgage, encumber, or pledge the Property
or any part thereof, or permit the Property or any part thereof to be mortgaged, encumbered, or
pledged, until the Security Instrument has been fully released in writing by Lender.
10. This Agreement may not be withdrawn, amended or modified except by a written
agreement executed by both Lessor and Lender.
11. All notices, requests, consents, demands and other communications relating to this
Agreement shall be in writing and shall be deemed sufficiently given if (a) sent by certified or
registered mail with postage prepaid, return receipt requested, properly addressed to the applicable
party at the address set forth below; (b) delivered in person to the address set forth below for the
party to whom the notice is given; (c) deposited into the custody of a nationally recognized
overnight delivery service such as Federal Express, UPS, Emery or Airborne, addressed to such
party at the address specified below; or (d) sent by facsimile, telegram or telex provided that
receipt of such facsimile, telegram or telex is verified by the sender and followed by a notice sent
in accordance with one of the other provisions set forth above. Notices shall be effective on the
date of delivery or receipt, or, if delivery is not accepted, on the earlier of the date that delivery is
refused or five (5) days after the date the notice is mailed. For purposes of this section, the
addresses of the parties for all notices are as set forth below (unless changed by similar notice in
writing given by the particular person whose address is to be changed). From time to time, any
party may designate another address for all purposes by giving the other parties notice of such
change of address.
Notices to Lender shall be given to it at:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York,New York 10260-0060
Attention: Nancy Alto
Tel: (212) 648-4518
Fax: (212) 648-5274
With copy to:
Swidler Berlin Shereff Friedman,LLP
3000 K Street,NW
Suite 300
Washington,DC 20007
Attention: Jeffrey S. Scharff,Esq.
Tel: (202)424-7622
Fax: (202)424-7643
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All notices to Lessee shall be given to it at:
AP-Palm Springs Airport LLC
c/o The Abbey Company
12383 Lewis Street, Suite 200
Garden Grove, California 92840-4643
Attention: Donald G. Abbey
Tel:
Fax.
With copy to:
All notices to Lessor shall be given at:
City Clerk
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
With a copy to:
David Aleshire,Esq.
Burke,Williams & Sorensen,LLP
18301 Von Kannan Ave, 91050
Irvine, CA 92612
12. In the event of any conflict or inconsistency between the Lease and this Agreement,
the terms of this Agreement shall control unless stated otherwise herein, and the Lease shall be
deemed to be amended hereby.
13. Notwithstanding any provision of the Lease to the contrary, in the event of any
condemnation of the Property, the Lessor and Lessee shall be entitled to separate awards with
respect to the Property. The amount of such separate awards shall be determined by the court
conducting such condemnation proceedings based upon the Lessor's and Lessee's respective
interests in the Property. However, in no event shall the award to Lessor exceed the unimproved
value of the Property, without taking into account the improvements located thereon. Lessee's
separate award of condemnation proceeds shall be applied in the manner set forth in the Security
Instrument.
14. Notwithstanding any provision of the Lease to the contrary (i) any insurance
proceeds with respect to the Property shall be applied by the Lender in the manner set forth in the
Security Instrument, (ii) the Lease shall not be terminated or modified(other than an abatement of
rent) following and because of an event of casualty without the prior written consent of the Lender,
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and (iii) Lender shall be a named insured and loss payee under all hazard insurance policies
applicable to the Property.
15. Lessor will, within thirty (30) days after written demand from the Lender, deliver to
Lender a certificate stating that the Lease is in full force and effect, is unmodified,that no notice of
termination thereon has been served on the Lessee, stating the date to which the net rent has been
paid and stating whether or not there are any defaults thereunder and specifying the nature of such
defaults, if any.
16. Unless Lender shall otherwise expressly consent in writing, the fee title to the
Property and the Lessee's leasehold estate therein shall not merge, but shall always remain
separate and distinct, notwithstanding the union of such estates either in the Lessee or in a third
party by purchase or otherwise.
EXECUTED as of the date first set forth above.
ATTEST: LESSOR:
CITY OF PALM SPRINGS, a municipal corporation
By:
City Clerk Name:
Title: City Manager
APPROVED AS TO FORM: LESSEE:
AP — PALM SPRINGS AIRPORT LLC, a Delaware
City Attorney limited liability company
By: Abbey Properties LLC, a California
limited liability company, its Manager
By:
Name: Donald G. Abbey
Title: Governing Member
LENDER:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
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By:
Name:
Title:
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STATE OF )
COUNTY OF )
[INSERT SPECIFIC STATE FORM ACKNOWLEDGMENTS]
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EXIMIf "A"
COPY OF LEASE
#7098997 v I-Agreement of Ground Lessor for Lease No.2636
MnPC.AN CATAPANT V T)?TTCT('"AAPATIV
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PREPARED BY AND AFTER
RECORDING RETURN TO: Loan No.
1 First Union Center DC6
301 S. College Street
Charlotte, NC 28288
Attention: Craig Lieberman
Real Estate Capital Markets Contract Finance
AGREEMENT and ESTOPPEL OF GROUND LESSOR
FOR LEASE NO. 2529
This Agreement of Ground Lessor ("Agreement") is executed as of 2001, by
and among THE CITY OF PALM SPRINGS, a California municipal corporation ("Lessor"),
whose address is City Hall, Palm Springs, California 92262; FIRST UNION NATIONAL BANK,
a national banking association ('Lender"), whose address for purposes hereof is 1 First Union
Center DC6, 301 S. College Street, Charlotte, NC 28288, Attention: Craig Lieberman, Real Estate
Capital Markets Contract Finance; and AP — PALM SPRINGS AIRPORT LLC, a Delaware
limited liability company ('Lessee"), whose address for purposes hereof is c/o The Abbey
Company, 12383 Lewis Street, Suite 20, Garden Grove, California, 92840.
WHEREAS, Lessor and B.A. Properties I, Inc., a Delaware corporation (BA"), entered
into that certain Indenture of Lease Agreement No. 2529 dated May 1, 1988 upon and subject to
all of the provisions therein as disclosed by Lease Agreement, recorded May 17, 1988 as
Instrument No. 130753, Official Records of Riverside County, California (`Original Lease"),
pursuant to which Lessor granted BA a leasehold interest in and to certain real property and the
improvements thereon, together with all rights, easements and interests appurtenant thereto
(collectively, the "Property"), which real property is more particularly described on Exhibit A
attached to the Original Lease and incorporated herein by this reference.
WHEREAS, the Original Lease was amended by that certain First Amendment to Lease
Agreement No. 2529, entered April 28, 1993 by and between Lessor and Peacock-Radaker Income
& Opportunity Fund, Ltd. ("PR"), that certain Second Amendment to Lease Agreement No. 2529
entered into October 21, 1993 by and between Lessor and John Apostle and Helen Apostle,
Trustees of the Apostle Family Trust dated July 6, 1984 (`AFT"), that certain Third Amendment
to Lease Agreement No. 2529 entered into December 15, 1993, by and between Lessor and AFT
and that certain Fourth Amendment to Lease No. 2529, entered October 25, 2000 by and between
Lessor and Lessee. The Original Lease as so amended is referred to herein as the "Lease."
A IEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to PR by Assignment of Lease recorded December 30, 1988 as Instrument
No. 386547 Official Records of Riverside County, California.
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WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to AFT by Assignment of Lease recorded December 27, 1993 as
Instrument No. 514484 Official Records of Riverside County, California.
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to Helen Apostle, as Trustee of the Survivor's Trust created under the
Apostle Family Trust dated July 6, 1984 as amended ("Apostle") by Assignment of Lease
recorded October 16, 1998 as Instrument No. 449223 Official Records of Riverside County,
California.
WHEREAS, Apostle assigned to Lessee all right, title and interest in the Lease and Lessee
accepted such Assignment on the terms and conditions contained in that certain Assignment and
Assumption of Lease Agreement No. 2529 and Consent to Assignment dated October 25, 2000.
WHEREAS, a copy of the Lease (including all amendments and modifications thereto) is
attached hereto as Exhibit "A" and incorporated herein by this reference; and
WHEREAS, as an accommodation to Lessee, Lessor has agreed to execute this Agreement
for the benefit of Lender with the understanding that Lender is relying on the agreements set forth
herein as an inducement to Lender in making a loan (the "Loan") to Lessee to be secured, in part,
by a lien granted by Lessee upon Lessee's rights and interests in and under the Lease.
NOW, THEREFORE, for and in consideration of the premises, and for the sum of Ten and
NO/00 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of
which consideration is hereby acknowledged and confessed, the parties hereto hereby represent,
covenant and agree as follows:
1. Lessor consents to the execution and delivery by Lessee to Lender of a Deed of
Trust, Security Agreement, Assignment of Rents and Fixture Filing (the "Security Instrument")
covering Lessee's leasehold interest in and to the Property and the recording of same in the
applicable real property records. Lessor also consents to the execution and delivery by Lessee, and
the filing and/or recording in the appropriate public records, of such additional documents and
instruments as Lender may deem necessary or desirable to establish, perfect and maintain a lien
upon and against Lessee's said leasehold interests, including, but not limited to, Uniform
Commercial Code financing statements and such other documents, instruments and agreements as
Lender may hereafter deem necessary or desirable in connection with the creation, grant,
maintenance or enforcement of said lien, including, but not limited to, any such documents and
instruments executed in connection with any renewal, extension and/or modification of such lien.
2. Both Lessor and Lessee represent that, to the best of their knowledge, they are
aware of no default under the terms of the Lease by either party thereto has occurred and is
continuing as of the date of this Agreement, nor, to the best of their knowledge, does there exist
any condition or event which with notice, the passage of time, or both would constitute a default
by either party thereunder.
3. In the event of an event of default by Lessee under the Lease (and after the
expiration of any cure periods related thereto), Lessor shall give written notice thereof to Lender at
the address indicated above (or such other address as Lender may indicate by notice hereafter to
Lessor in writing) and Lender shall have the right (but not the obligation) to cure such default or
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failure within thirty (30) days following Lender's receipt of such notice; and Lessor shall not take
any action with respect to such failure under the Lease, including, without limitation, any action
intended to terminate, rescind or avoid the Lease or Lessee's tenancy or possession thereunder, for
such period of thirty (30) days after Lender's receipt of such written notice; provided, however,
that in the case of any nonmonetary default which cannot with diligence be cured within said 30-
day period, if Lender shall proceed promptly to initiate measures to cure such failure and thereafter
prosecute the curing of such failure with diligence and continuity, the time within which such
failure may be cured shall be extended for such period as may be necessary to complete the curing
of such failure with diligence and continuity. Without limiting the foregoing, Lessor agrees that
no event of default and no termination of the Lease in connection therewith shall be effective
unless notice shall first have been given to Lender in accordance with the terms of this Agreement.
With respect to defaults by Lessee that are not capable of or subject to cure by Lender
pursuant to the preceding paragraph, so long as Lender pays or causes to be paid any rent or other
monetary obligations of Lessee due under the Lease as the same becomes due, and initiates steps
to acquire Lessee's interest in the Lease by foreclosure or other appropriate means and prosecutes
the same to completion with diligence and continuity (unless such action is stayed or enjoined),
Lessor shall not terminate the Lease and the Lender shall be entitled to a sufficient time period
(including any period during which the Lender's actions are stayed or enjoined) to complete its
steps to acquire Lessee's interest in the Lease prior to termination of the Lease by the Lessor.
Nothing in this Section 3, however, shall be construed to extend the Lease beyond its original term
(as extended by any options to extend), nor require Lender to initiate or continue foreclosure
proceedings after any event of default has been cured. If an event of default has been cured, and
Lender has elected not to initiate or to discontinue any foreclosure proceedings, then the Lease
shall continue in full force and effect as if Lessee had not defaulted under the Lease.
Lessor further agrees that if the Lease is terminated for any reason, including without
limitation because an event of default under the Lease is not capable of or subject to cure, or
because of the bankruptcy or insolvency of Lessee, Lender shall have the option (upon written
notice to Lessor) to enter into a new ground lease with Lessor on substantially the same terms as
the Lease for the then remaining term (plus any options to extend) of the Lease(which new ground
lease shall be prior to any mortgages, liens, or encumbrances on Lessor's fee interest) following the
termination of the Lease by Lessor or the rejection of the Lease by a bankruptcy trustee under
applicable laws.
4. Lessor consents to the exercise by Lender of any and all rights and remedies
permitted under the Security Instrument and such other documents as may be executed by Lessee
in connection with the Loan, and to the exercise of such additional legal and equitable rights and
remedies as may be available to Lender, in the event of a default or event of default under the
Loan. Furthermore, Lessor expressly agrees that neither the execution, delivery and/or recording
of the Security Instrument, nor the execution, delivery and/or recording or fling of any other
instrument or agreement by Lessee or Lender in connection with the Security Instrument, nor any
other matters to which Lessor has given its consent herein, shall be deemed to constitute a default
or event of default under the Lease.
5. In the event Lender shall ever become the owner of the rights and interests of
Lessee in and to the Property and Lease by reason of judicial foreclosure, nonjudicial trustee's sale
or other proceedings brought by lender to enforce its rights under the Security Instrument, or
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through any other means or manner in connection with the Loan, Lender shall be deemed to be
Lessee's successor and assignee under the Lease (notwithstanding anything in the Lease
prohibiting or restricting assignment by the Lessee or establishing conditions under which an
assigmnent by the Lessee would be permitted) and shall be entitled to all rights, benefits and
privileges of the Lessee under the Lease; and Lessor shall be bound to Lender under all of the
terns, covenants and conditions of the Lease for the balance of the term thereof remaining and any
renewal or extension period thereof duly exercised as required by the Lease, all without the need to
execute any further instruments on the part of Lessor, Lessee or Lender to make such succession
and assignment effective and binding upon Lessor. Provided, however, that Lender or its direct
successors or assigns shall not be (i) liable for any action or omission of Lessee, other than the
payment of rent due under the Lease if Lender exercises its rights under Section 3 hereof, or (ii)
bound by amendment or modification of the Lease made without Lender's advance written consent
(which consent shall not be unreasonably withheld).
6. Notwithstanding anything to the contrary set forth or contained in the Lease, Lessor
hereby waives any contractual and/or statutory liens and any rights of distress with respect to the
property of Lessee (or Lessee's sublessees, success or assigns, including Lender) from time to time
located within or upon the Property ("Lessee's Property"), during the term of the Lease or any
extension thereof. It is hereby covenanted and agreed by Lessor that the Lease does not and will
not, from and after this date, be construed or deemed to grant a contractual lien or any other
security interest to Lessor or in favor of Lessor with respect to Lessee's Property. Lessor agrees to
execute and deliver such other instruments as may be reasonably requested by Lessee or Lender
from time to time to evidence or confirm this waiver by Lessor.
7. The Lease shall not be amended, modified, cancelled or terminated (except as set
forth in Section 3 hereof) in any manner or respect without the prior written consent of Lender and
any purported amendment, modification, cancellation or termination made without such consent
shall be ineffective and void as to Lender. Lessor and Lessee warrant and represent that the copy
of the Lease and other written documents attached hereto as Exhibit "A" are true, correct and
complete copies of the Lease and that the Lease is in full force and effect and has not been
amended or modified except as disclosed in Exhibit "A" attached hereto and incorporated herein
by this reference. Other than the Lease (and any amendments thereto as are described herein),
there are no other agreements, written or oral, between Lessor and Lessee regarding the Lease or
the Property. The Lessor has not assigned the Lease or otherwise transferred any interest in or
under the Lease.
8. For purposes of this Agreement, the tern "Lender" shall include its successors and
assigns, including, but not limited to, any person who acquires Lessee's interest under the Lease
pursuant to a foreclosure of the Security Instrument. Any leasehold mortgagee of any person(and
that person's successors and assigns) who acquires Lessee's interest under the Lease pursuant to a
foreclosure or pursuant to an assignment from Lender shall be entitled to all rights of Lender wider
this Agreement. All references herein to Lessor and Lessee shall likewise include the respective
personal representatives, heirs, successors and assigns for each such party (including, without
limitation, any person, party or entity to whom either Lessor's and/or Lessee's respective rights
and interests in and under the Lease may be assigned). This Agreement shall accordingly be
binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. Without limiting the foregoing, Lessor agrees that
notwithstanding any provision in the Lease to the contrary, if Lender becomes the lessee under the
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Lease, Lender shall have the right to assign its interest in and to the Lease without the consent of
Lessor, provided, however, Lender shall give Lessor prompt written notice of any such
assignment. Upon acceptance of such assignment by Lender's assignee, Lender shall be released
from any further liability under the Lease as of the date of such assignment.
9. Lessor represents and warrants to Lender that, to the best of its knowledge, no
consent or joinder of any other parry is required to Lessor's execution of this Agreement. Lessor
shall not, without the prior written consent of Lender, mortgage, encumber, or pledge the Property
or any part thereof, or permit the Properly or any part thereof to be mortgaged, encumbered, or
pledged, until the Security Instrument has been fully released in writing by Lender.
10. This Agreement may not be withdrawn, amended or modified except by a written
agreement executed by both Lessor and Lender.
11. All notices, requests, consents, demands and other communications relating to this
Agreement shall be in writing and shall be deemed sufficiently given if(a) sent by certified or
registered mail with postage prepaid, return receipt requested, properly addressed to the applicable
parry at the address set forth below; (b) delivered in person to the address set forth below for the
party to whom the notice is given; (c) deposited into the custody of a nationally recognized
overnight delivery service such as Federal Express, UPS, Emery or Airborne, addressed to such
party at the address specified below; or (d) sent by facsimile, telegram or telex provided that
receipt of such facsimile, telegram or telex is verified by the sender and followed by a notice sent
in accordance with one of the other provisions set forth above. Notices shall be effective on the
date of delivery or receipt, or, if delivery is not accepted, on the earlier of the date that delivery is
refused or five (5) days after the date the notice is mailed. For purposes of this section, the
addresses of the parties for all notices are as set forth below (unless changed by similar notice in
writing given by the particular person whose address is to be changed). From time to time, any
parry may designate another address for all purposes by giving the other parties notice of such
change of address.
Notices to Lender shall be given to it at:
FIRST UNION NATIONAL BANK,
1 First Union Center DC6
301 S. College Street, Charlotte,NC 28288
Attention: Craig Lieberman
Real Estate Capital Markets Contract Finance
All notices to Lessee shall be given to it at:
AP-Palm Springs Airport LLC
c/o The Abbey Company
12383 Lewis Street, Suite 200
Garden Grove, California 92840-4643
Attention: Donald G. Abbey
Tel: 714-740-8800
Fax. 714-740-8801
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With copy to:
All notices to Lessor shall be given at:
City Clerk
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
With a copy to:
12. In the event of any conflict or inconsistency between the Lease and this Agreement,
the terms of this Agreement shall control unless stated otherwise, and the Lease shall be deemed to
be amended hereby.
13. Notwithstanding any provision of the Lease to the contrary, in the event of any
condemnation of the Property, the Lessor and Lessee shall be entitled to separate awards with
respect to the Property. The amount of such separate awards shall be determined by the court
conducting such condemnation proceedings based upon the Lessor's and Lessee's respective
interests in the Property. However, in no event shall the award to Lessor exceed the unimproved
value of the Property, without taking into account the improvements located thereon. Lessee's
separate award of condemnation proceeds shall be applied in the manner set forth in the Security
Instrument.
14. Notwithstanding any provision of the Lease to the contrary (i) any insurance
proceeds with respect to the Property shall be applied by the Lender in the manner set forth in the
Security Instrument, (ii) the Lease shall not be terminated or modified(other than an abatement of
rent) following and because of an event of casualty without the prior written consent of the Lender,
and (iii) Lender shall be a named insured and loss payee under all hazard insurance policies
applicable to the Property.
15. Lessor will, within thirty(30) days after written demand from the Lender, deliver to
Lender a certificate stating that the Lease is in full force and effect, is unmodified,that no notice of
termination thereon has been served on the Lessee, stating the date to which the net rent has been
paid and stating whether or not there are any defaults thereunder and specifying the nature of such
defaults, if any.
16. Unless Lender shall otherwise expressly consent in writing, the fee title to the
Property and the Lessee's leasehold estate therein shall not merge, but shall always remain
separate and distinct, notwithstanding the union of such estates either in the Lessee or in a third
party by purchase or otherwise.
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EXECUTED as of the date first set forth above.
ATTEST: LESSOR:
CITY OF PALM SPRINGS, a municipal corporation
By:
City Clerk Name:
Title: City Manager
APPROVED AS TO FORM: LESSEE:
AP — PALM SPRINGS AIRPORT LLC, a Delaware
City Attorney limited liability company
By: Abbey Properties LLC, a California
limited liability company, its Manager
By:
Name: Donald G. Abbey
Title: Governing Member
LENDER:
FIRST UNION NATIONAL BANK
By:
Name:
Title:
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STATE OF )
COUNTY OF )
[INSERT SPECIFIC STATE FORM ACKNOWLEDGMENTS]
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EXHIBIT "A"
COPY OF LEASE
47100101 v 1-Agreement of Ground Lessor Lease No.2529
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PREPARED BY AND AFTER
RECORDING RETURN TO: Loan No.
1 First Union Center DC6
301 S. College Street
Charlotte,NC 28288
Attention: Craig Lieberman
Real Estate Capital Markets Contract Finance
AGREEMENT OF GROUND LESSOR
FOR LEASE NO. 2528
This Agreement of Ground Lessor ("Agreement") is executed as of 2001, by
and among THE CITY OF PALM SPRINGS, a California municipal corporation ("Lessor"),
whose address is City Hall, Palm Springs, California 92262; FIRST UNION NATIONAL BANK,
a national banking association ("Lender"), whose address for purposes hereof is 1 First Union
Center DC6, 301 S. College Street, Charlotte, NC 28288, Attention: Craig Lieberman, Real Estate
Capital Markets Contract Finance; and AP — PALM SPRINGS AIRPORT LLC, a Delaware
limited liability company ("Lessee"), whose address for purposes hereof is c/o The Abbey
Company, 12383 Lewis Street, Suite 20, Garden Grove, California, 92840.
WHEREAS, Lessor and B.A. Properties I, Inc., a Delaware corporation (`BA"), entered
into that certain Indenture of Lease Agreement No. 2528 dated May 1, 1988 upon and subject to
all of the provisions therein as disclosed by Lease Agreement, recorded May 17, 1988 as
Instrument No. 130754, Official Records of Riverside County, California ("Original Lease"),
pursuant to which Lessor granted BA a leasehold interest in and to certain real property and the
improvements thereon, together with all rights, easements and interests appurtenant thereto
(collectively, the "Property"), which real property is more particularly described on Exhibit A
attached to the Original Lease and incorporated herein by this reference.
WHEREAS, the Original Lease was amended by that certain First Amendment to Lease
Agreement No. 2528, entered April 28, 1993 by and between Lessor and Peacock-Radaker Income
& Opportunity Fund, Ltd. ("PR"), that certain Second Amendment to Lease Agreement No. 2528
entered into October 21, 1993 by and between Lessor and John Apostle and Helen Apostle,
Trustees of the Apostle Family Trust dated July 6, 1984 ("AFT"), that certain Third Amendment
to Lease Agreement No. 2529 entered into December 15, 1993, by and between Lessor and AFT
and that certain Fourth Amendment to Lease No. 2528, entered October 25, 2000 by and between
Lessor and Lessee. The Original Lease as so amended is referred to herein as the "Lease."
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to PR by Assignment of Lease recorded October 21, 1988 as Instrument
No. 307342 Official Records of Riverside County, California.
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WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to AFT by Assignment of Lease recorded December 27, 1993 as
Instrument No. 514486 Official Records of Riverside County, California.
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to Helen Apostle, as Trustee of the Survivor's Trust created under the
Apostle Family Trust dated July 6, 1984 as amended ("Apostle") by Assignment of Lease
recorded October 16, 1998 as Instrument No. 449221 Official Records of Riverside County,
California.
WHEREAS, Apostle assigned to Lessee all right, title and interest in the Lease and Lessee
accepted such Assignment on the terms and conditions contained in that certain Assignment and
Assumption of Lease Agreement No. 2528 and Consent to Assignment dated October 25, 2000.
WHEREAS, a copy of the Lease (including all amendments and modifications thereto) is
attached hereto as Exhibit"A" and incorporated herein by this reference; and
WHEREAS, as an accommodation to Lessee, Lessor has agreed to execute this Agreement
for the benefit of Lender with the understanding that Lender is relying on the agreements set forth
herein as an inducement to Lender in making a loan (the "Loan") to Lessee to be secured, in part,
by a lien granted by Lessee upon Lessee's rights and interests in and under the Lease.
NOW, THEREFORE, for and in consideration of the premises, and for the sum of Ten and
NO/00 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of
which consideration is hereby acknowledged and confessed, the parties hereto hereby represent,
covenant and agree as follows:
1. Lessor consents to the execution and delivery by Lessee to Lender of a Deed of
Trust, Security Agreement, Assignment of Rents and Fixture Filing (the "Security Instrument")
covering Lessee's leasehold interest in and to the Property and the recording of same in the
applicable real property records. Lessor also consents to the execution and delivery by Lessee, and
the filing and/or recording in the appropriate public records, of such additional documents and
instruments as Lender may deem necessary or desirable to establish, perfect and maintain a lien
upon and against Lessee's said leasehold interests, including, but not limited to, Uniform
Commercial Code financing statements and such other documents, instruments and agreements as
Lender may hereafter deem necessary or desirable in connection with the creation, grant,
maintenance or enforcement of said lien, including, but not limited to, any such documents and
instruments executed in connection with any renewal, extension and/or modification of such lien.
2. Both Lessor and Lessee represent that, to the best of their knowledge, they are
aware of no default under the terms of the Lease by either party thereto has occurred and is
continuing as of the date of this Agreement, nor, to the best of their knowledge, does there exist
any condition or event which with notice, the passage of time, or both would constitute a default
by either party thereunder.
3. In the event of an event of default by Lessee under the Lease (and after the
expiration of any cure periods related thereto), Lessor shall give written notice thereof to Lender at
the address indicated above (or such other address as Lender may indicate by notice hereafter to
Lessor in writing) and Lender shall have the right (but not the obligation) to cure such default or
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failure within thirty (30) days following Lender's receipt of such notice; and Lessor shall not take
any action with respect to such failure under the Lease, including, without limitation, any action
intended to terminate, rescind or avoid the Lease or Lessee's tenancy or possession thereunder, for
such period of thirty (30) days after Lender's receipt of such written notice; provided, however,
that in the case of any nonmonetary default which camiot with diligence be cured within said 30-
day period, if Lender shall proceed promptly to initiate measures to cure such failure and thereafter
prosecute the curing of such failure with diligence and continuity, the time within which such
failure may be cured shall be extended for such period as may be necessary to complete the curing
of such failure with diligence and continuity. Without limiting the foregoing, Lessor agrees that
no event of default and no termination of the Lease in connection therewith shall be effective
unless notice shall first have been given to Lender in accordance with the terms of this Agreement.
With respect to defaults by Lessee that are not capable of or subject to cure by Lender
pursuant to the preceding paragraph, so long as Lender pays or causes to be paid any rent or other
monetary obligations of Lessee due under the Lease as the same becomes due, and initiates steps
to acquire Lessee's interest in the Lease by foreclosure or other appropriate means and prosecutes
the same to completion with diligence and continuity (unless such action is stayed or enjoined),
Lessor shall not terminate the Lease and the Lender shall be entitled to a sufficient time period
(including any period during which the Lender's actions are stayed or enjoined) to complete its
steps to acquire Lessee's interest in the Lease prior to termination of the Lease by the Lessor.
Nothing in this Section 3, however, shall be construed to extend the Lease beyond its original term
(as extended by any options to extend), nor require Lender to initiate or continue foreclosure
proceedings after any event of default has been cured. If an event of default has been cured, and
Lender has elected not to initiate or to discontinue any foreclosure proceedings, then the Lease
shall continue in full force and effect as if Lessee had not defaulted under the Lease.
Lessor further agrees that if the Lease is terminated for any reason, including without
limitation because an event of default under the Lease is not capable of or subject to cure, or
because of the bankruptcy or insolvency of Lessee, Lender shall have the option (upon written
notice to Lessor) to enter into a new ground lease with Lessor on substantially the same terms as
the Lease for the then remaining term (plus any options to extend) of the Lease (which new ground
lease shall be prior to any mortgages, liens, or encumbrances on Lessor's fee interest) following the
termination of the Lease by Lessor or the rejection of the Lease by a bankruptcy trustee under
applicable laws.
4. Lessor consents to the exercise by Lender of any and all rights and remedies
permitted under the Security Instrument and such other documents as may be executed by Lessee
in connection with the Loan, and to the exercise of such additional legal and equitable rights and
remedies as may be available to Lender, in the event of a default or event of default under the
Loan. Furthermore, Lessor expressly agrees that neither the execution, delivery and/or recording
of the Security Instrument, nor the execution, delivery and/or recording or filing of any other
instrument or agreement by Lessee or Lender in connection with the Security Instrument, nor any
other matters to which Lessor has given its consent herein, shall be deemed to constitute a default
or event of default under the Lease.
5. In the event Lender shall ever become the owner of the rights and interests of
Lessee in and to the Property and Lease by reason of judicial foreclosure, nonjudicial trustee's sale
or other proceedings brought by lender to enforce its rights under the Security Instrument, or
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through any other means or manner in connection with the Loan, Lender shall be deemed to be
Lessee's successor and assignee under the Lease (notwithstanding anything in the Lease
prohibiting or restricting assignment by the Lessee or establishing conditions under which an
assignment by the Lessee would be permitted) and shall be entitled to all rights, benefits and
privileges of the Lessee under the Lease; and Lessor shall be bound to Lender under all of the
terms, covenants and conditions of the Lease for the balance of the term thereof remaining and any
renewal or extension period thereof duly exercised as required by the Lease, all without the need to
execute any further instruments on the part of Lessor, Lessee or Lender to make such succession
and assignment effective and binding upon Lessor. Provided, however, that Lender or its direct
successors or assigns shall not be (i) liable for any action or omission of Lessee, other than the
payment of rent due under the Lease if Lender exercises its rights under Section 3 hereof, or (ii)
bound by amendment or modification of the Lease made without Lender's advance written consent
(which consent shall not be unreasonably withheld).
6. Notwithstanding anything to the contrary set forth or contained in the Lease, Lessor
hereby waives any contractual and/or statutory liens and any rights of distress with respect to the
property of Lessee (or Lessee's sublessees, success or assigns, including Lender) from time to time
located within or upon the Property ("Lessee's Property"), during the term of the Lease or any
extension thereof. It is hereby covenanted and agreed by Lessor that the Lease does not and will
not, from and after this date, be construed or deemed to grant a contractual lien or any other
security interest to Lessor or in favor of Lessor with respect to Lessee's Property. Lessor agrees to
execute and deliver such other instruments as may be reasonably requested by Lessee or Lender
from time to time to evidence or confirm this waiver by Lessor.
7. The Lease shall not be amended, modified, cancelled or terminated (except as set
forth in Section 3 hereof) in any manner or respect without the prior written consent of Lender and
any purported amendment, modification, cancellation or termination made without such consent
shall be ineffective and void as to Lender. Lessor and Lessee warrant and represent that the copy
of the Lease and other written documents attached hereto as Exhibit "A" are true, correct and
complete copies of the Lease and that the Lease is in full force and effect and has not been
amended or modified except as disclosed in Exhibit "A" attached hereto and incorporated herein
by this reference. Other than the Lease (and any amendments thereto as are described herein),
there are no other agreements, written or oral, between Lessor and Lessee regarding the Lease or
the Property. The Lessor has not assigned the Lease or otherwise transferred any interest in or
under the Lease.
8. For purposes of this Agreement, the term "Lender" shall include its successors and
assigns, including, but not limited to, any person who acquires Lessee's interest under the Lease
pursuant to a foreclosure of the Security Instrument. Any leasehold mortgagee of any person (and
that person's successors and assigns) who acquires Lessee's interest under the Lease pursuant to a
foreclosure or pursuant to an assignment from Lender shall be entitled to all rights of Lender under
this Agreement. All references herein to Lessor and Lessee shall likewise include the respective
personal representatives, heirs, successors and assigns for each such party (including, without
limitation, any person, party or entity to whom either Lessor's and/or Lessee's respective rights
and interests in and under the Lease may be assigned). This Agreement shall accordingly be
binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. Without limiting the foregoing, Lessor agrees that
notwithstanding any provision in the Lease to the contrary, if Lender becomes the lessee under the
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Lease, Lender shall have the right to assign its interest in and to the Lease without the consent of
Lessor, provided, however, Lender shall give Lessor prompt written notice of any such
assignment. Upon acceptance of such assignment by Lender's assignee, Lender shall be released
from any further liability under the Lease as of the date of such assignment.
9. Lessor represents and warrants to Lender that, to the best of its knowledge, no
consent or joinder of any other party is required to Lessor's execution of this Agreement. Lessor
shall not, without the prior written consent of Lender, mortgage, encumber, or pledge the Property
or any part thereof, or permit the Property or any part thereof to be mortgaged, encumbered, or
pledged, until the Security Instrument has been fully released in writing by Lender.
10. This Agreement may not be withdrawn, amended or modified except by a written
agreement executed by both Lessor and Lender.
11. All notices, requests, consents, demands and other communications relating to this
Agreement shall be in writing and shall be deemed sufficiently given if (a) sent by certified or
registered mail with postage prepaid, return receipt requested, properly addressed to the applicable
party at the address set forth below; (b) delivered in person to the address set forth below for the
party to whom the notice is given; (c) deposited into the custody of a nationally recognized
overnight delivery service such as Federal Express, UPS, Emery or Airborne, addressed to such
party at the address specified below; or (d) sent by facsimile, telegram or telex provided that
receipt of such facsimile, telegram or telex is verified by the sender and followed by a notice sent
in accordance with one of the other provisions set forth above. Notices shall be effective on the
date of delivery or receipt, or, if delivery is not accepted, on the earlier of the date that delivery is
refused or five (5) days after the date the notice is mailed. For purposes of this section, the
addresses of the parties for all notices are as set forth below (unless changed by similar notice in
writing given by the particular person whose address is to be changed). From time to time, any
parry may designate another address for all purposes by giving the other parties notice of such
change of address.
Notices to Lender shall be given to it at:
FIRST UNION NATIONAL BANK,
1 First Union Center DC6
301 S. College Street, Charlotte, NC 28288
Attention: Craig Lieberman
Real Estate Capital Markets Contract Finance
All notices to Lessee shall be given to it at:
AP-Palm Springs Airport LLC
c/o The Abbey Company
12383 Lewis Street, Suite 200
Garden Grove, California 92840-4643
Attention: Donald G. Abbey
Tel: 714-740-8800
Fax. 714-740-8801
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With copy to:
All notices to Lessor shall be given at:
City Clerk
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
With a copy to:
David Aleshire, Esq.
Burke, Williams & Sorensen,LLP
18301 Von Karman Ave, 41050
Irvine, CA 92612
12. In the event of any conflict or inconsistency between the Lease and this Agreement,
the terms of this Agreement shall control unless stated otherwise herein, and the Lease shall be
deemed to be amended hereby.
13. Notwithstanding any provision of the Lease to the contrary, in the event of any
condemnation of the Property, the Lessor and Lessee shall be entitled to separate awards with
respect to the Property. The amount of such separate awards shall be determined by the court
conducting such condemnation proceedings based upon the Lessor's and Lessee's respective
interests in the Property. However, in no event shall the award to Lessor exceed the unimproved
value of the Property, without taking into account the improvements located thereon. Lessee's
separate award of condemnation proceeds shall be applied in the manner set forth in the Security
Instrument.
14. Notwithstanding any provision of the Lease to the contrary (i) any insurance
proceeds with respect to the Property shall be applied by the Lender in the manner set forth in the
Security Instrument, (ii) the Lease shall not be terminated or modified(other than an abatement of
rent)following and because of an event of casualty without the prior written consent of the Lender,
and (iii) Lender shall be a named insured and loss payee under all hazard insurance policies
applicable to the Property.
15. Lessor will, within thirty (30) days after written demand from the Lender, deliver to
Lender a certificate stating that the Lease is in full force and effect, is unmodified,that no notice of
termination thereon has been served on the Lessee, stating the date to which the net rent has been
paid and stating whether or not there are any defaults thereunder and specifying the nature of such
defaults, if any.
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16. Unless Lender shall otherwise expressly consent in writing, the fee title to the
Property and the Lessee's leasehold estate therein shall not merge, but shall always remain
separate and distinct, notwithstanding the union of such estates either in the Lessee or in a third
party by purchase or otherwise.
EXECUTED as of the date first set forth above.
ATTEST: LESSOR:
CITY OF PALM SPRINGS, a municipal corporation
By:
City Clerk Name:
Title: City Manager
APPROVED AS TO FORM: LESSEE:
AP — PALM SPRINGS AIRPORT LLC, a Delaware
City Attorney limited liability company
By: Abbey Properties LLC, a California
limited liability company, its Manager
By:
Name: Donald G. Abbey
Title: Governing Member
LENDER:
FIRST UNION NATIONAL BANK
By:
Name:
Title:
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STATE OF )
COUNTY OF )
[INSERT SPECIFIC STATE FORM ACKNOWLEDGMENTS]
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EXHIBIT "All
COPY OF LEASE
47100104 v 1-Agreement of Ground Lessor Lease No.2528
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PREPARED BY AND AFTER
RECORDING RETURN TO: Loan No.
1 First Union Center DC6
301 S. College Street
Charlotte, NC 28288
Attention: Craig Lieberman
Real Estate Capital Markets Contract Finance
AGREEMENT OF GROUND LESSOR
FOR LEASE NO. 2636
This Agreement of Ground Lessor ("Agreement") is executed as of 2001, by
and among THE CITY OF PALM SPRINGS, a California municipal corporation ("Lessor"),
whose address is City Hall, Palm Springs, California 92262; FIRST UNION NATIONAL BANK,
a national banking association ("Lender"), whose address for purposes hereof is 1 First Union
Center DC6, 301 S. College Street, Charlotte,NC 28288, Attention: Craig Lieberman, Real Estate
Capital Markets Contract Finance; and AP — PALM SPRINGS AIRPORT LLC, a Delaware
limited liability company ("Lessee"), whose address for purposes hereof is c/o The Abbey
Company, 12383 Lewis Street, Suite 20, Garden Grove, California, 92840.
WHEREAS, Lessor and Peacock-Radaker Corporation ("PR") entered into that certain
Indenture of Lease Agreement No. 2636 dated November 3, 1988 upon and subject to all of the
provisions therein contained as disclosed by that certain Lease Agreement, recorded July 31, 1989
as Instrument No. 253625, Official Records of Riverside County, California ("Original Lease")
pursuant to which Lessor granted PR a leasehold interest in and to certain real property and the
improvements thereon, together with all rights, easements and interests appurtenant thereto
(collectively, the "Property"), which real property is more particularly described on Exhibit A
attached to the Original Lease and incorporated herein by this reference.
WHEREAS, the Original Lease is amended by the Amendment No. 1 to Indenture of Lease
Agreement No. 2636, entered January 2, 1991 by and between Lessor and PR, the Second
Amendment to Lease Agreement #2636, entered October 21, 1993 by and between Lessor and
John Apostle and Helen Apostle, Trustees of the Apostle Family Trust dated July 6, 1984
("AFT"), the Third Amendment to Lease Agreement 42636, entered December 15, 1993, by and
between Lessor and AFT; and the Fourth Amendment to Lease No. 2636, entered October 25,
2000 by and between Lessor and Lessee. The Original Lease as so amended is referred to herein
as the "Lease."
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to AFT by Assignment of Lease recorded December 27, 1993 as
Instrument No. 514485 Official Records of Riverside County, California.
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WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to Helen Apostle, as Trustee of the Survivor's Trust created under the
Apostle Family Trust dated July 6, 1984 as amended ("Apostle") by Assignment of Lease
recorded October 16, 1998 as Instrument No. 449223 Official Records of Riverside County,
California.
WHEREAS, Apostle assigned to Lessee all right, title and interest in the Lease and Lessee
accepted such Assignment on the terms and conditions contained in that certain Assignment and
Assumption of Lease Agreement No. 2636 and Consent to Assignment dated October 25, 2000.
WHEREAS, a copy of the Lease (including all amendments and modifications thereto) is
attached hereto as Exhibit "A" and incorporated herein by this reference; and
WHEREAS, as an accommodation to Lessee, Lessor has agreed to execute this Agreement
for the benefit of Lender with the understanding that Lender is relying on the agreements set forth
herein as an inducement to Lender in making a loan (the "Loan") to Lessee to be secured, in part,
by a lien granted by Lessee upon Lessee's rights and interests in and under the Lease.
NOW, THEREFORE, for and in consideration of the premises, and for the sum of Ten and
NO/00 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of
which consideration is hereby acknowledged and confessed, the parties hereto hereby represent,
covenant and agree as follows:
1. Lessor consents to the execution and delivery by Lessee to Lender of a Deed of
Trust, Security Agreement, Assignment of Rents and Fixture Filing (the "Security Instrument")
covering Lessee's leasehold interest in and to the Property and the recording of same in the
applicable real property records. Lessor also consents to the execution and delivery by Lessee, and
the filing and/or recording in the appropriate public records, of such additional documents and
instruments as Lender may deem necessary or desirable to establish, perfect and maintain a lien
upon and against Lessee's said leasehold interests, including, but not limited to, Uniform
Commercial Code financing statements and such other documents, instruments and agreements as
Lender may hereafter deem necessary or desirable in connection with the creation, grant,
maintenance or enforcement of said lien, including, but not limited to, any such documents and
instruments executed in connection with any renewal, extension and/or modification of such lien.
2. Both Lessor and Lessee represent that, to the best of their knowledge, they are
aware of no default under the terms of the Lease by either party thereto has occurred and is
continuing as of the date of this Agreement, nor, to the best of their knowledge, does there exist
any condition or event which with notice, the passage of time, or both would constitute a default
by either party thereunder.
3. In the event of an event of default by Lessee under the Lease (and after the
expiration of any cure periods related thereto), Lessor shall give written notice thereof to Lender at
the address indicated above (or such other address as Lender may indicate by notice hereafter to
Lessor in writing) and Lender shall have the right (but not the obligation) to cure such default or
failure within thirty (30) days following Lender's receipt of such notice; and Lessor shall not take
any action with respect to such failure under the Lease, including, without limitation, any action
intended to terminate, rescind or avoid the Lease or Lessee's tenancy or possession thereunder, for
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such period of thirty (30) days after Lender's receipt of such written notice; provided, however,
that in the case of any nonmonetary default which cannot with diligence be cured within said 30-
day period, if Lender shall proceed promptly to initiate measures to cure such failure and thereafter
prosecute the curing of such failure with diligence and continuity, the time within which such
failure may be cured shall be extended for such period as may be necessary to complete the curing
of such failure with diligence and continuity. Without limiting the foregoing, Lessor agrees that
no event of default and no termination of the Lease in connection therewith shall be effective
unless notice shall first have been given to Lender in accordance with the terns of this Agreement.
With respect to defaults by Lessee that are not capable of or subject to cure by Lender
pursuant to the preceding paragraph, so long as Lender pays or causes to be paid any rent or other
monetary obligations of Lessee due under the Lease as the same becomes due, and initiates steps
to acquire Lessee's interest in the Lease by foreclosure or other appropriate means and prosecutes
the same to completion with diligence and continuity (unless such action is stayed or enjoined),
Lessor shall not terminate the Lease and the Lender shall be entitled to a sufficient time period
(including any period during which the Lender's actions are stayed or enjoined) to complete its
steps to acquire Lessee's interest in the Lease prior to termination of the Lease by the Lessor.
Nothing in this Section 3, however, shall be construed to extend the Lease beyond its original term
(as extended by any options to extend), nor require Lender to initiate or continue foreclosure
proceedings after any event of default has been cured. If an event of default has been cured, and
Lender has elected not to initiate or to discontinue any foreclosure proceedings, then the Lease
shall continue in full force and effect as if Lessee had not defaulted under the Lease.
Lessor further agrees that if the Lease is terminated for any reason, including without
limitation because an event of default under the Lease is not capable of or subject to cure, or
because of the bankruptcy or insolvency of Lessee, Lender shall have the option (upon written
notice to Lessor) to enter into a new ground lease with Lessor on substantially the same terms as
the Lease for the then remaining term (plus any options to extend) of the Lease (which new ground
lease shall be prior to any mortgages, liens, or encumbrances on Lessor's fee interest) following the
termination of the Lease by Lessor or the rejection of the Lease by a bankruptcy trustee under
applicable laws.
4. Lessor consents to the exercise by Lender of any and all rights and remedies
permitted under the Security Instrument and such other documents as may be executed by Lessee
in connection with the Loan, and to the exercise of such additional legal and equitable rights and
remedies as may be available to Lender, in the event of a default or event of default under the
Loan. Furthermore, Lessor expressly agrees that neither the execution, delivery and/or recording
of the Security Instrument, nor the execution, delivery and/or recording or filing of any other
instrument or agreement by Lessee or Lender in connection with the Security Instrument, nor any
other matters to which Lessor has given its consent herein, shall be deemed to constitute a default
or event of default under the Lease.
5. In the event Lender shall ever become the owner of the rights and interests of
Lessee in and to the Property and Lease by reason of judicial foreclosure, nonjudicial trustee's sale
or other proceedings brought by lender to enforce its rights under the Security Instrument, or
through any other means or manner in connection with the Loan, Lender shall be deemed to be
Lessee's successor and assignee under the Lease (notwithstanding anything in the Lease
prohibiting or restricting assignment by the Lessee or establishing conditions under which an
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assignment by the Lessee would be permitted) and shall be entitled to all rights, benefits and
privileges of the Lessee under the Lease; and Lessor shall be bound to Lender under all of the
terms, covenants and conditions of the Lease for the balance of the term thereof remaining and any
renewal or extension period thereof duly exercised as required by the Lease, all without the need to
execute any further instruments on the part of Lessor, Lessee or Lender to make such succession
and assignment effective and binding upon Lessor. Provided, however, that Lender or its direct
successors or assigns shall not be (i) liable for any action or omission of Lessee, other than the
payment of rent due under the Lease if Lender exercises its rights under Section 3 hereof, or (ii)
bound by amendment or modification of the Lease made without Lender's advance written consent
(which consent shall not be unreasonably withheld).
6. Notwithstanding anything to the contrary set forth or contained in the Lease, Lessor
hereby waives any contractual and/or statutory liens and any rights of distress with respect to the
property of Lessee (or Lessee's sublessees, success or assigns, including Lender) from time to time
located within or upon the Property ("Lessee's Property"), during the term of the Lease or any
extension thereof. It is hereby covenanted and agreed by Lessor that the Lease does not and will
not, from and after this date, be construed or deemed to grant a contractual lien or any other
security interest to Lessor or in favor of Lessor with respect to Lessee's Property. Lessor agrees to
execute and deliver such other instruments as may be reasonably requested by Lessee or Lender
from time to time to evidence or confirm this waiver by Lessor.
7. The Lease shall not be amended, modified, cancelled or terminated (except as set
forth in Section 3 hereof) in any manner or respect without the prior written consent of Lender and
any purported amendment, modification, cancellation or termination made without such consent
shall be ineffective and void as to Lender. Lessor and Lessee warrant and represent that the copy
of the Lease and other written documents attached hereto as Exhibit "A" are true, correct and
complete copies of the Lease and that the Lease is in full force and effect and has not been
amended or modified except as disclosed in Exhibit "A" attached hereto and incorporated herein
by this reference. Other than the Lease (and any amendments thereto as are described herein),
there are no other agreements, written or oral, between Lessor and Lessee regarding the Lease or
the Property. The Lessor has not assigned the Lease or otherwise transferred any interest in or
under the Lease.
8. For purposes of this Agreement, the term "Lender" shall include its successors and
assigns, including, but not limited to, any person who acquires Lessee's interest under the Lease
pursuant to a foreclosure of the Security Instrument. Any leasehold mortgagee of any person(and
that person's successors and assigns) who acquires Lessee's interest under the Lease pursuant to a
foreclosure or pursuant to an assignment from Lender shall be entitled to all rights of Lender under
this Agreement. All references herein to Lessor and Lessee shall likewise include the respective
personal representatives, heirs, successors and assigns for each such party (including, without
limitation, any person, party or entity to whom either Lessor's and/or Lessee's respective rights
and interests in and under the Lease may be assigned). This Agreement shall accordingly be
binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. Without limiting the foregoing, Lessor agrees that
notwithstanding any provision in the Lease to the contrary, if Lender becomes the lessee under the
Lease, Lender shall have the right to assign its interest in and to the Lease without the consent of
Lessor, provided, however, Lender shall give Lessor prompt written notice of any such
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assignment. Upon acceptance of such assignment by Lender's assignee, Lender shall be released
from any further liability under the Lease as of the date of such assignment.
9. Lessor represents and warrants to Lender that, to the best of its knowledge, no
consent or joinder of any other party is required to Lessor's execution of this Agreement. Lessor
shall not, without the prior written consent of Lender, mortgage, encumber, or pledge the Property
or any part thereof, or permit the Property or any part thereof to be mortgaged, encumbered, or
pledged, until the Security Instrument has been fully released in writing by Lender.
10. This Agreement may not be withdrawn, amended or modified except by a written
agreement executed by both Lessor and Lender.
11. All notices, requests, consents, demands and other communications relating to this
Agreement shall be in writing and shall be deemed sufficiently given if (a) sent by certified or
registered mail with postage prepaid, return receipt requested, properly addressed to the applicable
party at the address set forth below; (b) delivered in person to the address set forth below for the
party to whom the notice is given; (c) deposited into the custody of a nationally recognized
overnight delivery service such as Federal Express, UPS, Emery or Airborne, addressed to such
party at the address specified below; or (d) sent by facsimile, telegram or telex provided that
receipt of such facsimile, telegram or telex is verified by the sender and followed by a notice sent
in accordance with one of the other provisions set forth above. Notices shall be effective on the
date of delivery or receipt, or, if delivery is not accepted, on the earlier of the date that delivery is
refused or five (5) days after the date the notice is mailed. For purposes of this section, the
addresses of the parties for all notices are as set forth below (unless changed by similar notice in
writing given by the particular person whose address is to be changed). From time to time, any
party may designate another address for all purposes by giving the other parties notice of such
change of address.
Notices to Lender shall be given to it at:
FIRST UNION NATIONAL BANK,
1 First Union Center DC6
301 S. College Street, Charlotte, NC 28288
Attention: Craig Lieberman
Real Estate Capital Markets Contract Finance
All notices to Lessee shall be given to it at:
AP-Palm Springs Airport LLC
c/o The Abbey Company
12383 Lewis Street, Suite 200
Garden Grove, California 92840-4643
Attention: Donald G. Abbey
Tel: 714-740-8800
Fax. 714-740-8801
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With copy to:
All notices to Lessor shall be given at:
City Clerk
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
With a copy to:
David Aleshire, Esq.
Burke,Williams & Sorensen,LLP
18301 Von Karman Ave, #1050
Irvine, CA 92612
12. In the event of any conflict or inconsistency between the Lease and this Agreement,
the terms of this Agreement shall control unless stated otherwise herein, and the Lease shall be
deemed to be amended hereby.
13. Notwithstanding any provision of the Lease to the contrary, in the event of any
condemnation of the Property, the Lessor and Lessee shall be entitled to separate awards with
respect to the Property. The amount of such separate awards shall be determined by the court
conducting such condemnation proceedings based upon the Lessor's and Lessee's respective
interests in the Property. However, in no event shall the award to Lessor exceed the unimproved
value of the Property, without taking into account the improvements located thereon. Lessee's
separate award of condemnation proceeds shall be applied in the manner set forth in the Security
Instrument.
14. Notwithstanding any provision of the Lease to the contrary (i) any insurance
proceeds with respect to the Property shall be applied by the Lender in the manner set forth in the
Security Instrument, (ii) the Lease shall not be terminated or modified(other than an abatement of
rent) following and because of an event of casualty without the prior written consent of the Lender,
and (iii) Lender shall be a named insured and loss payee under all hazard insurance policies
applicable to the Property.
15. Lessor will, within thirty (30) days after written demand from the Lender, deliver to
Lender a certificate stating that the Lease is in full force and effect, is unmodified, that no notice of
termination thereon has been served on the Lessee, stating the date to which the net rent has been
paid and stating whether or not there are any defaults thereunder and specifying the nature of such
defaults, if any.
16. Unless Lender shall otherwise expressly consent in writing, the fee title to the
Property and the Lessee's leasehold estate therein shall not merge, but shall always remain
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separate and distinct, notwithstanding the union of such estates either in the Lessee or in a third
party by purchase or otherwise.
EXECUTED as of the date first set forth above.
ATTEST: LESSOR:
CITY OF PALM SPRINGS, a municipal corporation
By:
City Clerk Name:
Title: City Manager
APPROVED AS TO FORM: LESSEE:
AP — PALM SPRINGS AIRPORT LLC, a Delaware
City Attorney limited liability company
By: Abbey Properties LLC, a California
limited liability company, its Manager
By:
Name: Donald G. Abbey
Title: Governing Member
LENDER:
FIRST UNION NATIONAL BANK
By:
Name:
Title:
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STATE OF )
COUNTY OF )
[INSERT SPECIFIC STATE FORM ACKNOWLEDGMENTS]
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E)MIBIT "A"
COPY OF LEASE
#7098997 v I-Agreement of Ground Lessor for Lease No.2636
MnRnAN fine n eerry TaneT CnNAPANv
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PREPARED BY AND AFTER
RECORDING RETURN TO: Loan No.
Swidler Berlin Shereff Friedman,LLP
3000 K Street,NW
Suite 300
Washington,DC 20007
Attention: Jeffrey S. Scharff,Esq.
AGREEMENT and ESTOPPEL OF GROUND LESSOR
FOR LEASE NO.2529
This Agreement of Ground Lessor ("Agreement") is executed as of 2001, by
and among THE CITY OF PALM SPRINGS, a California municipal corporation ('Lessor"),
whose address is City Hall, Palm Springs, California 92262; MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, a New York banking corporation ("Lender"), whose address for
purposes hereof is 60 Wall Street, New York, New York 10260-0060, Attention: Nancy Alto; and
AP — PALM SPRINGS AIRPORT LLC, a Delaware limited liability company ('Lessee"), whose
address for purposes hereof is c/o The Abbey Company, 12383 Lewis Street, Suite 20, Garden
Grove, California, 92840.
WHEREAS, Lessor and B.A. Properties I, Inc., a Delaware corporation ("BA"), entered
into that certain Indenture of Lease Agreement No. 2529 dated May 1, 1988 upon and subject to
all of the provisions therein as disclosed by Lease Agreement, recorded May 17, 1988 as
Instrument No. 130753, Official Records of Riverside County, California (`Original Lease"),
pursuant to which Lessor granted BA a leasehold interest in and to certain real property and the
improvements thereon, together with all rights, easements and interests appurtenant thereto
(collectively, the "Property"), which real property is more particularly described on Exhibit A
attached to the Original Lease and incorporated herein by this reference.
WHEREAS, the Original Lease was amended by that certain First Amendment to Lease
Agreement No. 2529, entered April 28, 1993 by and between Lessor and Peacock-Radaker Income
& Opportunity Fund, Ltd. ("PR"), that certain Second Amendment to Lease Agreement No. 2529
entered into October 21, 1993 by and between Lessor and John Apostle and Helen Apostle,
Trustees of the Apostle Family Trust dated July 6, 1984 (`AFT"), that certain Third Amendment
to Lease Agreement No. 2529 entered into December 15, 1993, by and between Lessor and AFT
and that certain Fourth Amendment to Lease No. 2529, entered October 25, 2000 by and between
Lessor and Lessee. The Original Lease as so amended is referred to herein as the "Lease."
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to PR by Assignment of Lease recorded December 30, 1988 as Instrwnent
No. 386547 Official Records of Riverside County, California.
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WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to AFT by Assignment of Lease recorded December 27, 1993 as
Instrument No. 514484 Official Records of Riverside County, California.
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to Helen Apostle, as Trustee of the Survivor's Trust created under the
Apostle Family Trust dated July 6, 1984 as amended ("Apostle") by Assignment of Lease
recorded October 16, 1998 as Instrument No. 449223 Official Records of Riverside County,
California.
WHEREAS, Apostle assigned to Lessee all right, title and interest in the Lease and Lessee .
accepted such Assignment on the terms and conditions contained in that certain Assignment and
Assumption of Lease Agreement No. 2529 and Consent to Assignnent dated October 25, 2000.
WHEREAS, a copy of the Lease (including all amendments and modifications thereto) is
attached hereto as Exhibit "A" and incorporated herein by this reference; and
WHEREAS, as an accommodation to Lessee, Lessor has agreed to execute this Agreement
for the benefit of Lender with the understanding that Lender is relying on the agreements set forth
herein as an inducement to Lender in making a loan (the "Loan") to Lessee to be secured, in part,
by a lien granted by Lessee upon Lessee's rights and interests in and under the Lease.
NOW, THEREFORE, for and in consideration of the premises, and for the sun of Ten and
NO/00 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of
which consideration is hereby acknowledged and confessed, the parties hereto hereby represent,
covenant and agree as follows:
1. Lessor consents to the execution and delivery by Lessee to Lender of a Deed of
Trust, Security Agreement, Assignment of Rents and Fixture Filing (the "Security Instrument")
covering Lessee's leasehold interest in and to the Property and the recording of same in the
applicable real property records. Lessor also consents to the execution and delivery by Lessee, and
the filing and/or recording in the appropriate public records, of such additional documents and
instruments as Lender may deem necessary or desirable to establish, perfect and maintain a lien
upon and against Lessee's said leasehold interests, including, but not limited to, Uniform
Commercial Code financing statements and such other documents, instruments and agreements as
Lender may hereafter deem necessary or desirable in connection with the creation, grant,
maintenance or enforcement of said lien, including, but not limited to, any such documents and
instruments executed in connection with any renewal, extension and/or modification of such lien.
2. Both Lessor and Lessee represent that, to the best of their knowledge, they are
aware of no default under the terms of the Lease by either party thereto has occurred and is
continuing as of the date of this Agreement, nor, to the best of their knowledge, does there exist
any condition or event which with notice, the passage of time, or both would constitute a default
by either party thereunder.
3. In the event of an event of default by Lessee under the Lease (and after the
expiration of any cure periods related thereto), Lessor shall give written notice thereof to Lender at
the address indicated above (or such other address as Lender may indicate by notice hereafter to
Lessor in writing) and Lender shall have the right (but not the obligation) to cure such default or
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failure within thirty (30) days following Lender's receipt of such notice; and Lessor shall not take
any action with respect to such failure under the Lease, including, without limitation, any action
intended to terminate, rescind or avoid the Lease or Lessee's tenancy or possession thereunder, for
such period of thirty (30) days after Lender's receipt of such written notice; provided, however,
that in the case of any nomnonetary default which cannot with diligence be cured within said 30-
day period, if Lender shall proceed promptly to initiate measures to cure such failure and thereafter
prosecute the curing of such failure with diligence and continuity, the time within which such
failure may be cured shall be extended for such period as may be necessary to complete the curing
of such failure with diligence and continuity. Without limiting the foregoing, Lessor agrees that
no event of default and no termination of the Lease in connection therewith shall be effective
unless notice shall first have been given to Lender in accordance with the terns of this Agreement.
With respect to defaults by Lessee that are not capable of or subject to cure by Lender
pursuant to the preceding paragraph, so long as Lender pays or causes to be paid any rent or other
monetary obligations of Lessee due under the Lease as the same becomes due, and initiates steps
to acquire Lessee's interest in the Lease by foreclosure or other appropriate means and prosecutes
the same to completion with diligence and continuity (unless such action is stayed or enjoined),
Lessor shall not terminate the Lease and the Lender shall be entitled to a sufficient time period
(including any period during which the Lender's actions are stayed or enjoined) to complete its
steps to acquire Lessee's interest in the Lease prior to termination of the Lease by the Lessor.
Nothing in this Section 3, however, shall be construed to extend the Lease beyond its original tern
(as extended by any options to extend), nor require Lender to initiate or continue foreclosure
proceedings after any event of default has been cured. If an event of default has been cured, and
Lender has elected not to initiate or to discontinue any foreclosure proceedings, then the Lease
shall continue in full force and effect as if Lessee had not defaulted under the Lease.
Lessor further agrees that if the Lease is terminated for any reason, including without
limitation because an event of default under the Lease is not capable of or subject to cure, or
because of the bankruptcy or insolvency of Lessee, Lender shall have the option (upon written
notice to Lessor) to enter into a new ground lease with Lessor on substantially the same terns as
the Lease for the then remaining tern(plus any options to extend) of the Lease (which new ground
lease shall be prior to any mortgages, liens, or encumbrances on Lessor's fee interest)following the
tenmination of the Lease by Lessor or the rejection of the Lease by a bankruptcy trustee under
applicable laws.
4. Lessor consents to the exercise by Lender of any and all rights and remedies
permitted under the Security Instrument and such other documents as may be executed by Lessee
in connection with the Loan, and to the exercise of such additional legal and equitable rights and
remedies as may be available to Lender, in the event of a default or event of default under the
Loan. Furthermore, Lessor expressly agrees that neither the execution, delivery and/or recording
of the Security Instrument, nor the execution, delivery and/or recording or filing of any other
instrument or agreement by Lessee or Lender in connection with the Security Instrument, nor any
other matters to which Lessor has given its consent herein, shall be deemed to constitute a default
or event of default under the Lease.
5. In the event Lender shall ever become the owner of the rights and interests of
Lessee in and to the Property and Lease by reason of judicial foreclosure, nonjudicial trustee's sale
or other proceedings brought by lender to enforce its rights under the Security Instrurent, or
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through any other means or manner in connection with the Loan, Lender shall be deemed to be
Lessee's successor and assignee under the Lease (notwithstanding anything in the Lease
prohibiting or restricting assignment by the Lessee or establishing conditions under which an
assignment by the Lessee would be permitted) and shall be entitled to all rights, benefits and
privileges of the Lessee under the Lease; and Lessor shall be bound to Lender under all of the
terms, covenants and conditions of the Lease for the balance of the term thereof remaining and any
renewal or extension period thereof duly exercised as required by the Lease, all without the need to
execute any further instruments on the part of Lessor, Lessee or Lender to make such succession
and assignment effective and binding upon Lessor. Provided, however, that Lender or its direct
successors or assigns shall not be (i) liable for any action or omission of Lessee, other than the
payment of rent due under the Lease if Lender exercises its rights under Section 3 hereof, or (ii)
bound by amendment or modification of the Lease made without Lender's advance written consent
(which consent shall not be unreasonably withheld).
6. Notwithstanding anything to the contrary set forth or contained in the Lease, Lessor
hereby waives any contractual and/or statutory liens and any rights of distress with respect to the
property of Lessee (or Lessee's sublessees, success or assigns, including Lender) from time to time
located within or upon the Property ("Lessee's Property"), during the term of the Lease or any
extension thereof. It is hereby covenanted and agreed by Lessor that the Lease does not and will
not, from and after this date, be construed or deemed to grant a contractual lien or any other
security interest to Lessor or in favor of Lessor with respect to Lessee's Property. Lessor agrees to
execute and deliver such other instruments as may be reasonably requested by Lessee or Lender
from time to time to evidence or confirm this waiver by Lessor.
7. The Lease shall not be amended, modified, cancelled or terminated (except as set
forth in Section 3 hereof) in any manner or respect without the prior written consent of Lender and
any purported amendment, modification, cancellation or tennination made without such consent
shall be ineffective and void as to Lender. Lessor and Lessee warrant and represent that the copy
of the Lease and other written documents attached hereto as Exhibit "A" are true, correct and
complete copies of the Lease and that the Lease is in full force and effect and has not been
amended or modified except as disclosed in Exhibit "A" attached hereto and incorporated herein
by this reference. Other than the Lease (and any amendments thereto as are described herein),
there are no other agreements, written or oral, between Lessor and Lessee regarding the Lease or
the Property. The Lessor has not assigned the Lease or otherwise transferred any interest in or
under the Lease.
8. For purposes of this Agreement, the tern "Lender" shall include its successors and
assigns, including, but not limited to, any person who acquires Lessee's interest under the Lease
pursuant to a foreclosure of the Security Instrument. Any leasehold mortgagee of any person (and
that person's successors and assigns) who acquires Lessee's interest under the Lease pursuant to a
foreclosure or pursuant to an assignment from Lender shall be entitled to all rights of Lender under
this Agreement. All references herein to Lessor and Lessee shall likewise include the respective
personal representatives, heirs, successors and assigns for each such party (including, without
limitation, any person, party or entity to whom either Lessor's and/or Lessee's respective rights
and interests in and under the Lease may be assigned). This Agreement shall accordingly be
binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. Without limiting the foregoing, Lessor agrees that
notwithstanding any provision in the Lease to the contrary, if Lender becomes the lessee under the
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Lease, Lender shall have the right to assign its interest in and to the Lease without the consent of
Lessor, provided, however, Lender shall give Lessor prompt written notice of any such
assignment. Upon acceptance of such assignment by Lender's assignee, Lender shall be released
from any further liability under the Lease as of the date of such assignment.
9. Lessor represents and warrants to Lender that, to the best of its knowledge, no
consent or joinder of any other party is required to Lessor's execution of this Agreement. Lessor
shall not, without the prior written consent of Lender, mortgage, encumber, or pledge the Property
or any part thereof, or permit the Property or any part thereof to be mortgaged, encumbered, or
pledged, until the Security Instrument has been fully released in writing by Lender.
10. This Agreement may not be withdrawn, amended or modified except by a written
agreement executed by both Lessor and Lender.
11. All notices, requests, consents, demands and other communications relating to this
Agreement shall be in writing and shall be deemed sufficiently given if(a) sent by certified or
registered mail with postage prepaid, return receipt requested, properly addressed to the applicable
party at the address set forth below; (b) delivered in person to the address set forth below for the
party to whom the notice is given; (c) deposited into the custody of a nationally recognized
overnight delivery service such as Federal Express, UPS, Emery or Airborne, addressed to such
party at the address specified below; or (d) sent by facsimile, telegram or telex provided that
receipt of such facsimile, telegram or telex is verified by the sender and followed by a notice sent
in accordance with one of the other provisions set forth above. Notices shall be effective on the
date of delivery or receipt, or, if delivery is not accepted, on the earlier of the date that delivery is
refused or five (5) days after the date the notice is mailed. For purposes of this section, the
addresses of the parties for all notices are as set forth below (unless changed by similar notice in
writing given by the particular person whose address is to be changed). From time to time, any
party may designate another address for all purposes by giving the other parties notice of such
change of address.
Notices to Lender shall be given to it at:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York,New York 10260-0060
Attention: Nancy Alto
Tel: (212) 648-4518
Fax: (212) 648-5274
With copy to:
Swidler Berlin Shereff Friedman,LLP
3000 K Street,NW
Suite 300
Washington,DC 20007
Attention: Jeffrey S. Scharff,Esq.
Tel: (202)424-7622
Fax: (202)424-7643
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All notices to Lessee shall be given to it at:
AP-Palm Springs Airport LLC
c/o The Abbey Company
12383 Lewis Street, Suite 200
Garden Grove, California 92840-4643
Attention: Donald G. Abbey
Tel:
Fax.
With copy to:
All notices to Lessor shall be given at:
City Clerk
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
With a copy to:
David Aleshire,Esq.
Burke, Williams & Sorensen,LLP
18301 Von Kannan Ave,#1050
Irvine, CA 92612
12. In the event of any conflict or inconsistency between the Lease and this Agreement,
the terms of this Agreement shall control unless stated otherwise herein, and the Lease shall be
deemed to be amended hereby.
13. Notwithstanding any provision of the Lease to the contrary, in the event of any
condemnation of the Property, the Lessor and Lessee shall be entitled to separate awards with
respect to the Property. The amount of such separate awards shall be determined by the court
conducting such condemnation proceedings based upon the Lessor's and Lessee's respective
interests in the Property. However, in no event shall the award to Lessor exceed the unimproved
value of the Property, without taking into account the improvements located thereon. Lessee's
separate award of condemnation proceeds shall be applied in the manner set forth in the Security
Instrument.
14. Notwithstanding any provision of the Lease to the contrary (i) any insurance
proceeds with respect to the Property shall be applied by the Lender in the manner set forth in the
Security Instrument, (ii)the Lease shall not be terminated or modified(other than an abatement of
rent)following and because of an event of casualty without the prior written consent of the Lender,
and (iii) Lender shall be a named insured and loss payee under all hazard insurance policies
applicable to the Property.
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15. Lessor will, within thirty(30) days after written demand from the Lender, deliver to
Lender a certificate stating that the Lease is in full force and effect, is unmodified,that no notice of
termination thereon has been served on the Lessee, stating the date to which the net rent has been
paid and stating whether or not there are any defaults thereunder and specifying the nature of such
defaults, if any.
16. Unless Lender shall otherwise expressly consent in writing, the fee title to the
Property and the Lessee's leasehold estate therein shall not merge, but shall always remain
separate and distinct, notwithstanding the union of such estates either in the Lessee or in a third
party by purchase or otherwise.
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EXECUTED as of the date first set forth above.
ATTEST: LESSOR:
CITY OF PALM SPRINGS, a municipal corporation
By:
City Clerk Name:
Title: City Manager
APPROVED AS TO FORM: LESSEE:
AP — PALM SPRINGS AIRPORT LLC, a Delaware
City Attorney limited liability company
By: Abbey Properties LLC, a California
limited liability company, its Manager
By:
Name: Donald G. Abbey
Title: Governing Member
LENDER:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
Name:
Title:
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STATE OF )
COUNTY OF )
[INSERT SPECIFIC STATE FORM ACKNOWLEDGMENTS]
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EXHIBIT "A"
COPY OF LEASE
97100101 v 1-Agreement of Ground Lessor Lease No.2529
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PREPARED BY AND AFTER
RECORDING RETURN TO: Loan No.
Swidler Berlin Shereff Friedman,LLP
3000 K Street,NW
Suite 300
Washington,DC 20007
Attention: Jeffrey S. Scharff,Esq.
AGREEMENT OF GROUND LESSOR
FOR LEASE NO. 2528
This Agreement of Ground Lessor ('Agreement") is executed as of 2001, by
and among THE CITY OF PALM SPRINGS, a California municipal corporation ('Lessor"),
whose address is City Hall, Palm Springs, California 92262; MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, a New York banking corporation ('Lender"), whose address for
purposes hereof is 60 Wall Street, New York, New York 10260-0060, Attention: Nancy Alto; and
AP — PALM SPRINGS AIRPORT LLC, a Delaware limited liability company ('Lessee"), whose
address for purposes hereof is c/o The Abbey Company, 12383 Lewis Street, Suite 20, Garden
Grove, California, 92840.
WHEREAS, Lessor and B.A. Properties I, Inc., a Delaware corporation (BA"), entered
into that certain Indenture of Lease Agreement No. 2528 dated May 1, 1988 upon and subject to
all of the provisions therein as disclosed by Lease Agreement, recorded May 17, 1988 as
Instrument No. 130754, Official Records of Riverside County, California (`Original Lease"),
pursuant to which Lessor granted BA a leasehold interest in and to certain real property and the
improvements thereon, together with all rights, easements and interests appurtenant thereto
(collectively, the "Property"), which real property is more particularly described on Exhibit A
attached to the Original Lease and incorporated herein by this reference.
WHEREAS, the Original Lease was amended by that certain First Amendment to Lease
Agreement No. 2528, entered April 28, 1993 by and between Lessor and Peacock-Radaker Income
& Opportunity Fund, Ltd. ("PR"), that certain Second Amendment to Lease Agreement No. 2528
entered into October 21, 1993 by and between Lessor and John Apostle and Helen Apostle,
Trustees of the Apostle Family Trust dated July 6, 1984 (`AFT"), that certain Third Amendment
to Lease Agreement No. 2529 entered into December 15, 1993, by and between Lessor and AFT
and that certain Fourth Amendment to Lease No. 2528, entered October 25, 2000 by and between
Lessor and Lessee. The Original Lease as so amended is referred to herein as the"Lease."
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to PR by Assignment of Lease recorded October 21, 1988 as Instrument
No. 307342 Official Records of Riverside County, California.
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WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to AFT by Assignment of Lease recorded December 27, 1993 as
Instrument No. 514486 Official Records of Riverside County, California.
WHEREAS, an assignment of the tenant's interest under the Original Lease as then
amended was assigned to Helen Apostle, as Trustee of the Survivor's Trust created under the
Apostle Family Trust dated July 6, 1984 as amended ("Apostle") by Assignment of Lease
recorded October 16, 1998 as Instrument No. 449221 Official Records of Riverside County,
California.
WHEREAS, Apostle assigned to Lessee all right, title and interest in the Lease and Lessee
accepted such Assignment on the terms and conditions contained in that certain Assignment and
Assumption of Lease Agreement No. 2528 and Consent to Assignment dated October 25, 2000.
WHEREAS, a copy of the Lease (including all amendments and modifications thereto) is
attached hereto as Exhibit "A" and incorporated herein by this reference; and
WHEREAS, as an accommodation to Lessee, Lessor has agreed to execute this Agreement
for the benefit of Lender with the understanding that Lender is relying on the agreements set forth
herein as an inducement to Lender in making a loan (the "Loan") to Lessee to be secured, in part,
by a lien granted by Lessee upon Lessee's rights and interests in and under the Lease.
NOW, THEREFORE, for and in consideration of the premises, and for the sum of Ten and
NO/00 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of
which consideration is hereby acknowledged and confessed, the parties hereto hereby represent,
covenant and agree as follows:
I. Lessor consents to the execution and delivery by Lessee to Lender of a Deed of
Trust, Security Agreement, Assignment of Rents and Fixture Filing (the "Security Instrument")
covering Lessee's leasehold interest in and to the Property and the recording of same in the
applicable real property records. Lessor also consents to the execution and delivery by Lessee, and
the filing and/or recording in the appropriate public records, of such additional documents and
instruments as Lender may deem necessary or desirable to establish, perfect and maintain a lien
upon and against Lessee's said leasehold interests, including, but not limited to, Uniform
Commercial Code financing statements and such other documents, instruments and agreements as
Lender may hereafter deem necessary or desirable in connection with the creation, grant,
maintenance or enforcement of said lien, including, but not limited to, any such documents and
instruments executed in connection with any renewal, extension and/or modification of such lien.
2. Both Lessor and Lessee represent that, to the best of their knowledge, they are
aware of no default under the terms of the Lease by either party thereto has occurred and is
continuing as of the date of this Agreement, nor, to the best of their knowledge, does there exist
any condition or event which with notice, the passage of time, or both would constitute a default
by either party thereunder.
3. In the event of an event of default by Lessee under the Lease (and after the
expiration of any cure periods related thereto), Lessor shall give written notice thereof to Lender at
the address indicated above (or such other address as Lender may indicate by notice hereafter to
Lessor in writing) and Lender shall have the right (but not the obligation) to cure such default or
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failure within thirty (30) days following Lender's receipt of such notice; and Lessor shall not take
any action with respect to such failure under the Lease, including, without limitation, any action
intended to terminate, rescind or avoid the Lease or Lessee's tenancy or possession thereunder, for
such period of thirty (30) days after Lender's receipt of such written notice; provided, however,
that in the case of any nonmonetary default which cannot with diligence be cured within said 30-
day period, if Lender shall proceed promptly to initiate measures to cure such failure and thereafter
prosecute the curing of such failure with diligence and continuity, the time within which such
failure may be cured shall be extended for such period as may be necessary to complete the curing
of such failure with diligence and continuity. Without limiting the foregoing, Lessor agrees that
no event of default and no termination of the Lease in connection therewith shall be effective
unless notice shall first have been given to Lender in accordance with the terms of this Agreement.
With respect to defaults by Lessee that are not capable of or subject to cure by Lender
pursuant to the preceding paragraph, so long as Lender pays or causes to be paid any rent or other
monetary obligations of Lessee due under the Lease as the same becomes due, and initiates steps
to acquire Lessee's interest in the Lease by foreclosure or other appropriate means and prosecutes
the same to completion with diligence and continuity (unless such action is stayed or enjoined),
Lessor shall not terminate the Lease and the Lender shall be entitled to a sufficient time period
(including any period during which the Lender's actions are stayed or enjoined) to complete its
steps to acquire Lessee's interest in the Lease prior to termination of the Lease by the Lessor.
Nothing in this Section 3, however, shall be construed to extend the Lease beyond its original term
(as extended by any options to extend), nor require Lender to initiate or continue foreclosure
proceedings after any event of default has been cured. If an event of default has been cured, and
Lender has elected not to initiate or to discontinue any foreclosure proceedings, then the Lease
shall continue in full force and effect as if Lessee had not defaulted under the Lease.
Lessor further agrees that if the Lease is terminated for any reason, including without
limitation because an event of default under the Lease is not capable of or subject to cure, or
because of the bankruptcy or insolvency of Lessee, Lender shall have the option (upon written
notice to Lessor) to enter into a new ground lease with Lessor on substantially the same terns as
the Lease for the then remaining term(plus any options to extend)of the Lease (which new ground
lease shall be prior to any mortgages, liens, or encumbrances on Lessor's fee interest) following the
termination of the Lease by Lessor or the rejection of the Lease by a bankruptcy trustee under
applicable laws. -
4. Lessor consents to the exercise by Lender of any and all rights and remedies
permitted under the Security Instrument and such other documents as may be executed by Lessee
in connection with the Loan, and to the exercise of such additional legal and equitable rights and
remedies as may be available to Lender, in the event of a default or event of default under the
Loan. Furthermore, Lessor expressly agrees that neither the execution, delivery and/or recording
of the Security Instrument, nor the execution, delivery and/or recording or filing of any other
instrument or agreement by Lessee or Lender in connection with the Security Instrument, nor any
other matters to which Lessor has given its consent herein, shall be deemed to constitute a default
or event of default under the Lease.
5. In the event Lender shall ever become the owner of the rights and interests of
Lessee in and to the Property and Lease by reason of judicial foreclosure, nonjudicial trustee's sale
or other proceedings brought by lender to enforce its rights under the Security Instrument, or
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through any other means or manner in connection with the Loan, Lender shall be deemed to be
Lessee's successor and assignee under the Lease (notwithstanding anything in the Lease
prohibiting or restricting assignment by the Lessee or establishing conditions under which an
assignment by the Lessee would be permitted) and shall be entitled to all rights, benefits and
privileges of the Lessee under the Lease; and Lessor shall be bound to Lender under all of the
terms, covenants and conditions of the Lease for the balance of the term thereof remaining and any
renewal or extension period thereof duly exercised as required by the Lease, all without the need to
execute any further instruments on the part of Lessor, Lessee or Lender to make such succession
and assignment effective and binding upon Lessor. Provided, however, that Lender or its direct
successors or assigns shall not be (i) liable for any action or omission of Lessee, other than the
payment of rent due under the Lease if Lender exercises its rights under Section 3 hereof, or (ii)
bound by amendment or modification of the Lease made without Lender's advance written consent
(which consent shall not be unreasonably withheld).
6. Notwithstanding anything to the contrary set forth or contained in the Lease, Lessor
hereby waives any contractual and/or statutory liens and any rights of distress with respect to the
property of Lessee (or Lessee's sublessees, success or assigns, including Lender) from time to time
located within or upon the Property ("Lessee's Property"), during the term of the Lease or any
extension thereof. It is hereby covenanted and agreed by Lessor that the Lease does not and will
not, from and after this date, be construed or deemed to grant a contractual lien or any other
security interest to Lessor or in favor of Lessor with respect to Lessee's Property. Lessor agrees to
execute and deliver such other instruments as may be reasonably requested by Lessee or Lender
from time to time to evidence or confirm this waiver by Lessor.
7. The Lease shall not be amended, modified, cancelled or terminated (except as set
forth in Section 3 hereof) in any manner or respect without the prior written consent of Lender and
any purported amendment, modification, cancellation or termination made without such consent
shall be ineffective and void as to Lender. Lessor and Lessee warrant and represent that the copy
of the Lease and other written documents attached hereto as Exhibit "A" are true, correct and
complete copies of the Lease and that the Lease is in full force and effect and has not been
amended or modified except as disclosed in Exhibit "A" attached hereto and incorporated herein
by this reference. Other than the Lease (and any amendments thereto as are described herein),
there are no other agreements, written or oral, between Lessor and Lessee regarding the Lease or
the Property. The Lessor has not assigned the Lease or otherwise transferred any interest in or
under the Lease.
8. For purposes of this Agreement, the term "Lender" shall include its successors and
assigns, including, but not limited to, any person who acquires Lessee's interest under the Lease
pursuant to a foreclosure of the Security Instrument. Any leasehold mortgagee of any person (and
that person's successors and assigns) who acquires Lessee's interest under the Lease pursuant to a
foreclosure or pursuant to an assignment from Lender shall be entitled to all rights of Lender under
this Agreement. All references herein to Lessor and Lessee shall likewise include the respective
personal representatives, heirs, successors and assigns for each such party (including, without
limitation, any person, party or entity to whom either Lessor's and/or Lessee's respective rights
and interests in and under the Lease may be assigned). This Agreement shall accordingly be
binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. Without limiting the foregoing, Lessor agrees that
notwithstanding any provision in the Lease to the contrary, if Lender becomes the lessee under the
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Lease, Lender shall have the right to assign its interest in and to the Lease without the consent of
Lessor, provided, however, Lender shall give Lessor prompt written notice of any such
assignment. Upon acceptance of such assignment by Lender's assignee, Lender shall be released
from any further liability under the Lease as of the date of such assignment.
9. Lessor represents and warrants to Lender that, to the best of its knowledge, no
consent or joinder of any other party is required to Lessor's execution of this Agreement. Lessor
shall not, without the prior written consent of Lender, mortgage, encumber, or pledge the Property
or any part thereof, or permit the Property or any part thereof to be mortgaged, encumbered, or
pledged, until the Security Instrument has been fully released in writing by Lender.
10. This Agreement may not be withdrawn, amended or modified except by a written
agreement executed by both Lessor and Lender.
11. All notices, requests, consents, demands and other communications relating to this
Agreement shall be in writing and shall be deemed sufficiently given if (a) sent by certified or
registered mail with postage prepaid, return receipt requested, properly addressed to the applicable
party at the address set forth below; (b) delivered in person to the address set forth below for the
party to whom the notice is given; (c) deposited into the custody of a nationally recognized
overnight delivery service such as Federal Express, UPS, Emery or Airborne, addressed to such
party at the address specified below; or (d) sent by facsimile, telegram or telex provided that
receipt of such facsimile, telegram or telex is verified by the sender and followed by a notice sent
in accordance with one of the other provisions set forth above. Notices shall be effective on the
date of delivery or receipt, or, if delivery is not accepted, on the earlier of the date that delivery is
refused or five (5) days after the date the notice is mailed. For purposes of this section, the
addresses of the parties for all notices are as set forth below (unless changed by similar notice in
writing given by the particular person whose address is to be changed). From time to time, any
party may designate another address for all purposes by giving the other parties notice of such
change of address.
Notices to Lender shall be given to it at:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260-0060
Attention:Nancy Alto
Tel: (212) 648-4518
Fax: (212) 648-5274
With copy to:
Swidler Berlin Shereff Friedman, UP
3000 K Street, NW
Suite 300
Washington, DC 20007
Attention: Jeffrey S. Scharff, Esq.
Tel: (202)424-7622
Fax: (202)424-7643
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All notices to Lessee shall be given to it at:
AP-Palm Springs Airport LLC
c/o The Abbey Company
12383 Lewis Street, Suite 200
Garden Grove, California 92840-4643
Attention: Donald G. Abbey
Tel:
Fax.
With copy to:
All notices to Lessor shall be given at:
City Clerk
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
With a copy to:
David Aleshire,Esq.
Burke, Williams & Sorensen, LLP
18301 Von Karman Ave, #1050
Irvine, CA 92612
12. In the event of any conflict or inconsistency between the Lease and this Agreement,
the terms of this Agreement shall control unless stated otherwise herein, and the Lease shall be
deemed to be amended hereby.
13. Notwithstanding any provision of the Lease to the contrary, in the event of any
condemnation of the Property, the Lessor and Lessee shall be entitled to separate awards with
respect to the Property. The amount of such separate awards shall be determined by the court
conducting such condemnation proceedings based upon the Lessor's and Lessee's respective
interests in the Property. However, in no event shall the award to Lessor exceed the unimproved
value of the Property, without taking into account the improvements located thereon. Lessee's
separate award of condemnation proceeds shall be applied in the manner set forth in the Security
Instrument.
14. Notwithstanding any provision of the Lease to the contrary (i) any insurance
proceeds with respect to the Property shall be applied by the Lender in the manner set forth in the
Security Instrument, (ii) the Lease shall not be terminated or modified (other than an abatement of
rent) following and because of an event of casualty without the prior written consent of the Lender,
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and (iii) Lender shall be a named insured and loss payee under all hazard insurance policies
applicable to the Property.
15. Lessor will, within thirty (30) days after written demand from the Lender, deliver to
Lender a certificate stating that the Lease is in full force and effect, is unmodified, that no notice of
termination thereon has been served on the Lessee, stating the date to which the net rent has been
paid and stating whether or not there are any defaults thereunder and specifying the nature of such
defaults, if any.
16. Unless Lender shall otherwise expressly consent in writing, the fee title to the
Property and the Lessee's leasehold estate therein shall not merge, but shall always remain
separate and distinct, notwithstanding the union of such estates either in the Lessee or in a third
parry by purchase or otherwise.
EXECUTED as of the date first set forth above.
ATTEST: LESSOR:
CITY OF PALM SPRINGS, a municipal corporation
By:
City Clerk Name:
Title: City Manager
APPROVED AS TO FORM: LESSEE:
AP — PALM SPRINGS AIRPORT LLC, a Delaware
City Attorney limited liability company
By: Abbey Properties LLC, a California
limited liability company, its Manager
By:
Name: Donald G. Abbey
Title: Governing Member
LENDER:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
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By:
Name:
Title:
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STATE OF )
COUNTY OF )
[INSERT SPECIFIC STATE FORM ACKNOWLEDGMENTS]
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EXHIBIT "All
COPY OF LEASE
#7100104 v 1 -Agreement of Ground Lessor Lease No.2528
MnRnAN CIUARAwT TAIIC'r fnNAPANv
IA
MINUTE ORDER NO.
AFFIRMING ESTOPPEL CERTIFICATES
AND REAFFIRMATIONS AS PART OF
FINANCE EFFORTS UNDERTAKEN BY
ABBEY PROPERTIES LLC ("ABBEY")IN A
FORM ACCEPTABLE TO THE CITY
ATTORNEY.
I HEREBY CERTIFY that this Minute Order affirming estoppel certificates
and reaffirmations as part of finance efforts undertaken by Abbey Properties
LLC ("ABBEY") in a form acceptable to the City Attorney, was adopted by
the City Council of the City of Palm Springs, California in a meeting thereof
held on the 28" of November 2001.
PATRICIA A. SANDERS
City Clerk
506