HomeMy WebLinkAbout01764 - PALM SPRINGS FBO TWO LLC MILLION AIR NORTH AMERICA CAPITAL HOLDING COMPANY ESTOPPEL AND CONSENT A1764 FILE 2 i
AMENDMENT NO. 2 TO INDENTURE OF LEASE NO. 1764
i ATLANTIC AVIATION FBO, INC.
AT PALM SPRINGS INTERNATIONAL AIRPORT
THIS AMENDMENT NO. 2 TO LEASE NO. 1764("Amendment") is made and entered
into this fifteenth day of December 2011, by and between the CITY OF PALM SPRINGS, a
charter city and California municipal corporation ("Lessor"), and ATLANTIC AVIATION FBO,
INC., a corporation organized and existing under the laws of the State of Delaware,
("Lessee").
RECITALS
WHEREAS, Lessor and Lessee entered into Lease Agreement No. 1764
("Agreement"), effective December 15, 1981; and
WHEREAS, the patties wish to amend the Agreement as provided in this Amendment
to reduce the total square footage of property to be leased as follows;
WHEREAS, Lessor owns_ and operates an airport known as the Palm Springs
i International Airport, located in the City of Palm Springs, County of Riverside, State of
California("Airport"); and
WHEREAS, Lessee currently leases Parcel 4, as more specifically described. and
depicted on Exhibit"A", which is attached hereto and incorporated herein; and
WHEREAS, Lessee is agreeable to amending and reducing the portion of the real
property that it currently leases from the Lessor. Lessee specifically agrees to terminate its
lease and all associated rights for that portion of the real property described in the
Agreement consisting of the northern 200 feet of Parcel 4, a section of property which is
550.90 feet wide and covers 110,180 square feet. The section of the property for which
Lessor relinquishes all rights is labeled as Parcel 4A on the attached Exhibit "A" and is
hereafter referred to as "Parcel 4A;" and
WHEREAS, it is agreed that Lessee will continue to lease the remaining souther
most portion of Parcel 4, more specifically described and depicted as Parcel 4B on Exhibit
"A";and
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for
other good and valuable considerations, Lessor and Lessee do hereby agree as follows:
Atlantic Aviation FBO, Inc.
Amendment No.2 to A1764
Page 9 of 4
ORIGINAL BID
ANDIOR AGREEMENT
i
AGREEMENT
Section 1 The ending date of the term of this Amendment No. 2 shall be the same as that
I described in Article I of Agreement No. 1764 for the remaining southern most
portion of Parcel 4, and referenced in Exhibit"A"as Parcel 46.
Section 2 Lessee agrees to relinquish any and all rights under the Agreement to Parcel 4A.
Section 3 The rental value of Parcel 4A, as determined by Lessor at the inception of this
Amendment is $3,525.76 per month. As such, the lease payment due to Lessor
from Lessee shall be reduced by $3,525.76 per month for the remaining term of
_.. --- -- —the-Agreement.—
Section 4 Rental adjustments for lease payments for Parcel 4B shall be as per Article II of
Lease Agreement No. 1764, the first rental adjustment to take effect as of
December 15, 2011. For partial December credit of$1,762.88
Section 5 In consideration of Lessee's agreement to terminate its lease and all associated
rights for Parcel 4A, during the term of the Agreement Lessor grants Lessee a
right of first refusal to separately lease Parcel 4A, Parcel 5, Parcel 5A or 5B,
commonly known as the Skywest Airlines Maintenance Facility, all as depicted
on Exhibit "A." Prior to leasing Parcel 4A, Parcel 5, Parcel 5A or 5B to any third
party, separately or in combination, during the term of the Agreement Lessor
shall first give Lessee notice and the opportunity to lease these properties on the
same terms and conditions offered to such third party and shall not lease these
properties to any third party unless and until Lessee declines to lease these
properties on the same terms and conditions.
i
Section 6 All other conditions of Lease Agreement No. 1764 not in conflict with this
Supplemental Agreement shall remain in full force and effect and shall apply to
i Parcel 4A.
I
(SIGNATURE PAGE FOLLOWS)
I
i
Atlantic Aviation F130,Inc.
Amendment No.2 to A1764
Page 2 of 4
IN WITNESS WHEREOF,the parties have executed and entered into this Agreement as of the date first written
above.
ATTEST: CITY OF PALM SPRING
a municipal corporation
City Clerk City Manager
APPROVED AS TO FORM:
APPROVED BY CITY COUNCIL
By.
Cfly ey
CONTRACTOR: Check one: _Individual _Partnership_Corporation
Corporations require two notarized signatures: One from each of the following: A. Chairman of Board,
President, or any Vice President AND B. Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, or
Chief Financial Officer.
Signature(notarized) yS�ignatu notarized)
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who proved to me on the basis of satis ry who proved to me on basis of satisfactory
evidence to be the person(s)whose name(s) evidence to be the person(s)whose name(s)
islare subscribed to the within instrument is/are subscribed to the within instrument
and acknowledged to me that he/shelthey and acknowledged to me that he/shelthey
executed the same in his/herAheir authorized executed fhe same In his/her/their authorized
cepacity(les), and that by his/her/their capacity(es),and that by his/heritheir
signature(s)on the instrument the person(s), signatures(s)on the instrument the person(s)
or the entity upon behalf of which the or the entity upon behalf of which the
person($)acted,executed the instrument. person(s)acted,executed the instrument.
I
I certify under PENALTY OF PERJURY 1 certify under PENALTY OF PERJURY
under the laws of the State of California that under the laws of the State of California that
the foregoing paragraph is true and correct the foregoing paragraph is true and correct.
WITNESS my hand and official seal WITNESS my hand ano official seal.
Notary Signature:44 Notary Signature:
Notary Seal:
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Atlantic Aviation FBO, Inc.
Amendment No.2 to A1764
Page 4 of 4
i
i
ESTOPPEL AND CONSENT TO TRANSFER
OF OWNERSHIP INTERESTS OF LESSEE
REGARDING LEASE AND OPTION TO LEASE NO. 1764
This Estoppel and Consent Regarding Lease and Option to Lease No. 1764 (this
"Estoppel and Consent") is made and entered into as of the 1"day of December, 2004, among
the City of Palm Springs ("City"), Palm Springs]FBO Two LLC, a Delaware limited liability
company, d.b.a. Million Air Pahn Springs ("Lessee"), and North America Capital Holding
Company("Purchaser"), with reference to the following facts and purposes.
RECITALS
A. City and Lessee are parties to that certain Indenture of Lease and Aeronautical
Concession Agreement, effective as of December. 15, 1981, a memorandum of which was
recorded on July 11, 1989, as Instrument No. 229437, Official Records of Riverside County,
California, as duly amended, supplemented, assigned and extended(collectively,the"Lease")
covering those certain parcels of real property within the Palm Springs International Airport
("Airport"),which parcels are more particularly described in Exhibit A attached hereto and
incorporated herein by this reference("Premises").
B. City and Lessee are also parties to that certain Option to Lease dated as of
September 19, 2001 (the"Option") covering that certain parcel of real property within the
Airport, which parcel is more particularly described in Exhibits A and B attached to the Option.
C. General Aviation Holdings,LLC ("General Aviation"), the parent company of
Lessee,has advised the City of a certain Membership Interest Purchase Agreement by and
between Purchaser and the members of General Aviation("Seller"), dated as of August 18, 2004
(the"Purchase Agreement"),pursuant to which Purchaser has agreed, subject to certain
conditions, to acquire all of the issued and outstanding membership interests of General Aviation
and, as result of such transaction, General Aviation would become a wholly-owned subsidiary of
Purchaser. Promptly following this transaction,Purchaser would be acquired by Macquarie
Infrastructure Company("MIC"). A description of MIC is attached as Exhibit B hereto. As a
result of the Purchase Agreement, Lessee will remain the lessee under the Lease,but the
ownership of Lessee's parent company(and, consequently, control of Lessee)will be transferred
from Seller to Purchaser. After the closing under the Purchase Agreement, the ownership of
Purchaser will subsequently be transferred to MIC (all of such transactions described in this
paragraph are referred to collectively as the"Acquisition").
D. Lessee and Purchaser desire to obtain the City's consent to the transfer of
ownership of Lessee's parent company(and, consequently, control of Lessee)to Purchaser and
the ownership of Purchaser to MIC, as contemplated by the Acquisition.
E. Lessee, Seller and Purchaser have represented to the City that, after Purchaser
takes ownership of General Aviation(and, consequently, of Lessee), Lessee will continue to be
,adequately capitalized and will,to the extent commercially practical,be managed by the same
MC#1293301 vl
IAI:1059095.5
management team that has been operating Lessee's business operation under the Lease and the
Option(other than Eric Affeldt,the current President of Lessee,who will resign from such
position effective as of the closing date under the Purchase Agreement), and thus the expertise
and financial capabilities of Lessee, as owned by Purchaser,to provide the services under the
Lease and the Option are the same as, or better than,those of Lessee as owned by Seller.
F. Based upon such representations, City wishes to consent to such assignment of
ownership of General Aviation, and consequently, of Lessee, subject to the terms of this
Estoppel and Consent.
NOW,THEREFORE, in consideration of the mutual promises of the parties hereto and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
City,Lessee and Purchaser agree as follows:
1. Representations. Lessee represents and certifies as of the date hereof the following:
A. To the best of Lessee's knowledge,no default presently exists under the Lease or
the Option and no state of facts exist which would constitute a default under the Lease or
the Option;provided, that Lessee will take those actions set forth in Section 1(C).
B. All the above recitals are true and correct.
C. Lessee will take the following actions:
(i) No later than December 20,2004,Lessee will replace a garage door that
had previously been installed some time prior to 1995 in a storage shed
adjacent to a T-hangar on the Premises. Lessee will replace such garage
door with sheet metal, such that the storage shed will be consistent in
appearance with the other storage sheds and adjacent T-hangars on the
Premises.
(ii) Lessee will continue diligently to pursue currently pending litigation to
evict Domenic Tallarita, Sr. from T-Hangars Nos. 14, 15 and 16 (the"T-
Hangars") (Riverside Superior Court, Case No. INC 046946). The parties
are simultaneously negotiating a possible settlement of the litigation
which, if agreed upon,may result in execution of a Stipulation for Entry of
Judgment between Lessee and Mr. Tallarita governing Mr. Tallarita's
scheduled vacation of the T-Hangars. As proposed, the Stipulation would
require Mr. Tallarita to vacate two of the three enumerated T-Hangars
promptly, and no later than approximately 30 days after execution of the
Stipulation. Mr. Tallarita would then vacate the third and final T-Hangar
(which T-Hangar is being used by Mr. Tallarita to store an airplane, in
compliance with the use provisions of the Lease)by an agreed upon date
certain;provided,however,that Lessee would retain the right to terminate
Mr. Tallarita's occupancy of that third T-Hangar if Mr. Tallarita violates
the use provisions of his sublease by using the T-Hangar in violation of
any Lease terms or City laws,rules or regulations.
LA1:1059095.5
(ill) On or before December 31,2005,Lessee will cause the aircraft ramp area
at the Premises to be cleaned and recoated, consistent with the bid, dated
April 30,2004,provided by Wheeler Paving, Inc. to Lessee, a copy of
which bid has previously been provided to Airport officials.
2. Consent and Related Agreements.
A. Lessee and Purchaser acknowledge that they have,received a copy of the Lease
and the Option and are fully familiar with their terms.
B. Effective as of the Closing Date referenced in the Purchase Agreement(the
"Closing Date'), City, as lessor under the Lease and optionor under the Option,hereby
certifies and represents to Purchaser and its affiliates as follows:
(i) Attached hereto as Exhibit C is a true, correct and complete copy of the
Lease and the Option, and.,together,represent the entire agreement
between the City and the Lessee;
(ii) To the knowledge of the City,neither the City nor the Lessee is in breach
of or default under the Lease or the Option and, to the knowledge of the
City,no event has occurred which,with notice or the passage of time, or
both,would constitute a breach of or default under, or permit termination
or modification of,the Lease or the Option; provided, that Lessee will take
those actions described in Section 1(C);
(iii) The City has not repudiated any provision of the Lease or the Option;
(iv) To the knowledge of the City, the Lease and the Option are in full force
and effect and there are no disputes regarding any provision of the Lease
or the Option;
(v) The City hereby consents to the change of control of General Aviation and
Lessee as a result of the Acquisition, including the transfer of Purchaser to
MC, and confirms that such Acquisition shall not constitute or result in a
breach of or default under the Lease or the Option;
(vi) The City further acknowledges that the Acquisition may be funded, in
part,with debt from one or more lenders that may, as a condition to
making such funds available,require security interests in, or otherwise
encumber, the membership interests of General Aviation and Lessee,
and/or require a pledge of the Lease as additional security for such loans;
provided, that, all encumbrances of the leasehold interest shall comply
with the requirements of Article XI of the Lease.
(vii) The City's current notice address is:
Palm Springs International Airport
Attn: Director of Aviation
1 AH059095.5
3400 E Tahquitz Canyon Way, Suite OFC
Palm Springs, California 92262
With a copy to:
Aleshire&Wynder, LLP
Attention: David Aleshire,Esq.
18881 Von Karman Avenue
Tower 17, Suite 400
Irvine, California 92612
C. Upon the Closing Date, Lessee shall remain fully liable under the Lease and the
Option, and shall continue to perform all duties and obligations required to be performed
under the Lease and the Option,respectively.
D. Purchaser acknowledges and agrees that the Lease and the Option shall continue
to control the obligations of Lessee and City.
3. Payment of City Costs. In consideration for City's review and consideration of the
Purchase Agreement and Acquisition, as proposed by Lessee, Seller and Purchaser, Seller hag
previously paid to City the sum of Five Thousand Dollars ($5,000) ("Review Fee"), which
Review Fee reflects, and Lessee and Seller acknowledge and agree reflects, the City's actual cost
and attorneys' fees of reviewing all documents in connection with the Acquisition contemplated
hereunder.
4. Miscellaneous. The person(s) executing this Estoppel and Consent on behalf of the
parties hereto warrant that they are duly authorized to execute and deliver this Estoppel and
Consent on behalf of said party. In this Estoppel and Consent,where there is a representation
based on the City's knowledge,that representation is made solely upon the actual knowledge or
awareness of the City following such consultation with current airport staff as the undersigned
has deemed appropriate. The parties hereto agree that, except for the additional obligations set
forth in Section 1(C) above,the terms of the Lease and the Option shall remain unchanged and in
full force and effect, and such terms and conditions of the Lease and the Option shall control
over any inconsistent provision herein or in any other agreement between Lessee and Purchaser
or Lessee and the City.
[Signatures on Next Page]
LAH059095.5
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Estoppel and
Consent as of the date written above.
"City"
ATTEST: CITY OF PALM SPRINGS, a California
muuw pal corporation,,,_- --;,)
�\)\\tity Clerk City Manager
f
7ityy
D A T 0 ;V I13(' G6 u 7 Ir`r%JF (_ jo .
orney —
,gi16y
"Purchaser" "Lessee"
North America Capital Holding Company, a PALM SPRINGS FBO TWO LLC, a Delaware
Delaware corporation limited liability company
By By:
Its: d�pci'e a✓ _i !f Its:
By:
Its: �r� ����k �f � Its:
Corporations require two notarized signatures: One from each of the following: A. Chairman of Board,President,or any
Vice President:AND B.Secretary,Assistant Secretary,Treasurer,Assistant,,Treasurer, or Chief Financial Officer).
Stateof CA',1rae-J7 14 �� �l/k } Stateof I0/16- }
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personally known to me(or proved to me on the basis of personally known to me(or proved to me on the basis of
satisfactory evidence)to be the person(s)whose satisfactory evidence) to be the person(s) whose
names)is/are subscribed to the within instrument and name(s) Is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the acknowledged to me that he/she/They executed the
same in his/her/Their authorized capacity(ies),and that same in his/her/their authorized capacity(ies), and that
by his/her/theirsignature(s)on the instrument the ' by his/her/their signatures) on the instrument the
person(s),or the entity upon behalf of which the person(s), or the entity upon b If of which the
person(s)acted,executed the in rument. person(s)acted,executed the' strumeL
WITNESS my hand and a al. WITNESS my hand and o
Notary Signature: (///G - _Notary Signature:
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Notary Seal: Notary Seal:
NATASHA PLAIN-LINEHAN
t AAA A __ „ Notary Public,State of New York
STAGY C.GAR No.01PL6U93848
CONM.014B966S Qualified In Bronx County
Certificate filed in New York County
Q NOTARY PUBt1GCALIFORNN� Commission Expires June 00,2U0
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personally known to me(or proved to me on the basis of personally known to me(or proved to me on the basis of
satisfactory evidence) to be the persons)whose satisfactory evidence) to be the person(s) whose
names)Is/are subscribed to the within instrument and name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies),and that same in his/her/their authorized capacity(tes), and that
by his/her/their signature(s) on the instrument the by his/her/their signature(s) on the instrument the
person(s),or the entity upon behalf of which the person(s), or the entity upon behalf of which the
person(s)acted,executed the i nt. person(s)acted,executed the instrument.
WITNESS my hand and of ici seal. WITNESS my hand and---oTfi''licwl seal.
Notary Signature: - Notary Signature:
Notary Seal: Notary Seal:
NATASHA PLAIN-LI14EHAN
Notary Public,State of New York --
No.01PL6093946 �%MY
LOR ROBINSON
Qualified In Bronx county Comm.#1491946
Cortiflcate filed In New York County NOTARY PUBLIC-CALIFORNIA N
Commission Expires June 09.2007
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EXHIBIT A
Description of Premises
(See attached.)
EXHIBIT A
THE LAND REFERRED TO IN H'HIS REPORT IS SITUATED IN THE STATE OP
CALIFORNIA, COUNTY I OF RIVERSIDE, CITY OF PALM SPRINGS AND IS
DESCRIBED AS FOLLOWS:
PARCEL 1:
THAT PORTION OF THE EAST 112 OF SECTION 18, TOWNSHIP 4 SOUTH, RANGE
5 EAST, SAN BERNARDINO BASE AND MERIDIAN, IN THE CITY OF PALM
SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS
FOLLOW.94
BEGINNING AT THE SOUTHEAST CORNER OF SAID SECTION 18, SAID POINT
BEING THE POINT OF INTERSECTYON OF THE CRNTER.LINE OF RAMON ROAD AM
BOGIE ROAD;
THENCE NORTH 0 DEGREES 17' 49" WEST, ALONG THE CENTERLINE OF BOGIE
ROAD, BEING THE EAST LINE OF SAID SECTION 18, A DISTANCE OF 63 . 03
PERT TO THE BEGINNING OF TANGENT CURVE CONCAVE SOUTHWESTERLY,
HAVING A RADIUS OF 4850.00 FEET;
THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL
ANGLE OF 26 DEGREES 31' 24", A DISTANCE OF 2245 .16 FEET, TO A POINT
ON THE ARC OF SAID QURVB, A RADIAL LINE PASSING THROUGH SAID POINT
HEARS NORTH 63 DEGREES 104 47" EAST;
THENCE SOUTH 63 DEGREES 10' 47" WEST, ALONG SAID RADIAL LINE A
DISTANCE OF 50 .00 FEET TO THE TRUE POINT OF BEGINNING; SAID POINT
BEING HEREINAFTER KNOWN AND DESIGNATUD AS POINT "A";
THENCE CONTxNUING SOUTH 63. DEGREES 10' 47" WEST, ALONG SAID RADIAL
LINE, A DISTANCE OF 409.05 PERT;
THENCE NORTH 36 DEGREES 32' 13" WEST, A DISTANCE OF 1561.47 FEET;
THENCE NORTH 53 DEGREES 27' 47" EAST, A DISTANCE OF 550. 88 FEET TO
A POINT ON THE SOUTHWESTERLY RIGHT-OF-WAY LINE OF BOGIE ROAD;
THENCE SOUTH 36 DEGREES 32, 0801 EAST, ALONG THE SOUTHERLY RIGHT-OF-
WAY LINE OF SAID BOGIE ROAD, A DISTANCE OF 053.99 FEET TO THE
BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY. HAVING A RADIUS
OF 4800 FEET;
THENCE, SOUTHEASTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL
ANGLE OF 09 DEGREES 42' S511, A DISTANCE OF 613 .90 FEET TO THE TRUE
POINT OF BEGINNING.
PARCEL 2.
THAT PORTION OF THE SOUTHEAST 1/4 OF SECTION 18, 4 SOUTH, .RANGE 5
EAST, SAN BERNARDINO BABE AND MERIDIAN, IN THE CITY OF PALM
SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS
FOLLOWS:
BEGINNING AT TUB POINT DESCRIBED ABOVE IN PARCEL 1 AS POINT "A";
THENCE SOUTHEAST 63 DEGREES 10' 47" WEST. A DISTANCE OF 499.05
PENT;
THENCE SOUTH 36 DEGREES 32' 13" EAST A DISTANCE OF 957 .42 FRET;
THENCE NORTH 75 DEGREES 124 39" EAST, A DISTANCE OF 225 ,36 FEET TO
A POINT ON THE ARC OF A CURVE CONCAVE SOUTHWESTERLY, HAVING A
RADIUS OF 4000 FEETr A RADIAL LINE FA60ING THROUGH SAID POINT BEARS
NORTH 75 DEGREES 12' 39" EAST;
THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVXr THROUGH A CENTRAL,
ANGLE OF 12 DEGREES 01' 52", A DISTANCE OF 1007 .90 PERT TO THE
POINT OF DEGINNING.
PARCEL 3 :
THAT PORTION OF THE NORTHEAST 1/4 OF SECTION 18, TOWNSHIP 4 SOUTH,
RANOE 5 EAST, SAN BERNARDINO BASE AND MERIDIANr IN THE, CITY OF PALM
SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS
FOLLOWS:
COMMENCING AT THE SOUTHEAST CORNER OF SAID SECTION 18, SAID POINT
BEING THE POINT OF INTERSECTION OF THE CENTERLINE OF RAMON ROAD AND
GENE' AUTRY TRAILi
THENCE NORTH 0 DEGREES 17' 49" WEST, ALONG THE CENTERLINE OF GENE
AUTAY TRAIL, .BEING THE EAST LINE OF SAID SECTION 18, A DISTANCE OF
62 .03 FEAT TO THE BEGINNING OF A TANGENT CURVE, CONCAVE
SOUTHWESTERLY, HAVING A RADIUS OF 4650.00 FEETI
THENCE NORTHWESTERLY, ALONG THE ARC OF SAID CURVE, THROUGH A
CENTRAL ANGLE OF 11 DEGREES 14' 02", A DISTANCE OF 3067 .14 FEET;
THENCE NORTH 36 DEGREES 31' 5191 WEST, 'TANGENT TO LAST MENTIONED
CURVE, ALONG THE CENTERLINE OF SAID GENE AUTRY TRAIL, A DISTANCE OF
853 .99 FRET.r
THENCE SOUTH 53 DEGREES 27' 47" WEST, A DISTANCE OF 50 .00 FEET TO
THE SOUTHWESTERLY RIGHT OF WAY OF GENE AUTRY TRAIL. SAID POINT 16
THE TRUE POINT OF BEGINNING;
THENCE CONTINUING SOUTH 53 DEGREES 27' 47" WEST, A DISTANCE OF
550.66 FEET;
THENCE NORTH 36 DEGREES 31' 51" WESTr PARALLEL TO THE CENTER LINE
OF GENE AUTRY TRAIL, A DISTANCE OF 395.37 FEET!
THENCE NORTH 53 DEGREES 27' 4 7 a EAST, A DISTANCE .OF 550, 89 FEET TO
A POINT ON THE SOUTHWESTERLY RIGHT OF WAY OF GENE AUTRY TRAIL,
BEING $0 .00 FERT FROM CENTERLINE, AS MEASURED AT RIGHT ANGLES;
THENCE SOUTH 36 DEGREES 31' Sill EAST, ALONG SAID SOUTHWESTERLY
RIGHT OF WAY LINE, A DISTANCE OF 395,37 FEET TO THE TRUE POINT OF
BEGINNING.
PARCp''L 41
THAT CERTAIN 5 ACRES LOCATED NORTH OF PARCEL 1, 2, AND 3 KNOWN AS
PARCEL 4 OPTIONED BY AIR SOURCES, INC. , PURSUANT TO THAT CERTAIN
OPTION AOREBMENT NO. 1764-B ADOPTED BY THE CITY COUNCIL OF PALM
SPRINGS, ON THE 17TH DAY OF SEPTEMBER 1986 AS EVIDENCED BY THE
MINUTE ORDER NO. 3801.
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RECORD CURVE DATA 11
L= 3614'02"
R - 4,850'
L - 3.067.14' 1
T, 1,586.81' 1
400 0 400 800
SCALE IN FEET
62.90'
N 00'17'49" W
e
EXHIBIT B
Description of Macquarie Infrastructure Company("MIC')
MIC is participating in an initial public offering(lPO). MIC has been formed to own, operate
and invest in a diversified group of infrastructure businesses.
The proceeds from the TO will be used to acquire MIC's initial businesses and investments.
WC's initial businesses will consist of an airport services business, an airport parking business,
a district,energy business and a 50% interest in atoll road.
North America Capital Holding Company will be a subsidiary of MIC. Peter Stokes is the Chief
Executive Officer of MIC.
U.B. 1 .� 0
r:- , a :
EXHIBIT
INDENTURE OF LEASE
AND AERONAUTICAL CONCESSION AGREEMENT
TABLE OF ARTICLES
NUMBER SUBJECT PAGE
I Term 1
II Renial ,and Other Payments 2 _
III Rights of Lessee 5
IV Construction of Improvements by Lessee 8
V Parking, T-Hangar Facilities and Landing Fees 9
VI Obligations of Lessee 10
VII Public, Facilities 12
VIII Lessor's Reserved Rights 12
IX Insurance 13
X Bonds 17
XI Encumbrance 18
XII Termination by Lessee 20
XIII Termination by Lessor 21
XIV Assignments - Options to Terminate 23
XV Indemnity 23
XVI Other Fixed Base Operators 23
XVII Books and Records 24
XVIII Assignment of Agreement 24
XIX Notices and Consents and Approvals 24
XX Right of Inspection 25
XXI Holding Over 25
XXII Maintenance, Alterations and Repairs - 25
XXIII General Provisions 26
XXIv Non-Discrimination and FAA Required Clauses 27
XXV Right of First Refusal. 29
XXVI Invalid Provisions Z9
Exiiiw- .
6 L
f ifenMPK� 17L
Res. 'L140$$ 11-11-11
INDENTURE OF LEASE
AND AERONAUTICAL CONCESSION AGREEMENT
This INDENTURE OF LEASE, made and entered into by and between the CITY OF
PALM SPRINGS,-CALIFORNIA (hereinafter called "Lessor"), and JIMSAIR AVIATION
SERVICES, INC., A California Corporation, having its usual place of business at
the Palm Springs Municipal Airport, Palm Springs, California, and whose
permanent mailing address is Lindbergh Field International Airport, San Diego, .
California, (hereinafter called "Lessee"):
WITNESSETH.-
WHEREAS, Lessor awns and operates an airport known as the Palm Springs
Municipal Airport, situated in the City of Palm Springs, County of Riverside,
State of California (hereinafter called the "Airport"); and
WHEREAS, Lessor is desirous of leasing certain premises hereinafter more
fully described in Exhibit "A," attached hereto and made a part hereof for all
purposes, forming a part of the Airport; and
WHEREAS, Lessee desires to engage in the business of aeronautics, aircraft
and engine parts and accessories, sales of aviation fuels and lubricants, sales
of automotive fuels for on-airport uses, and air taxi operations, and the
operation of,general aviation and airport facilities, and desires to lease
certain property and obtain certain rights at the Airport;
NOW, THEREFORE, for and in consideration of the rents, fees, covenants and
agreements contained herein and other valuable considerations, Lessor does
hereby demise, rent and let to Lessee, and Lessee does hire, take and lease
from Lessor, the parcel of land containing approximately 20.16 acres, as more
particularly described and shown as Parcel 1 on Exhibit "A" attached hereto and
made a part hereof for all purposes, together with those rights and privileges
stated elsewhere in this agreement upon the following terms and conditions:
ARTICLE I - TERM
1. The term of this agreement shall be for a period of 40 years,
beginning December 75. 1981, and ending December 14, 2021, unless sooner
terminated as provided for in Article XIII, herein.
ARTICLE II - RENTAL AND OTHER PAYMENTS
1. Leased Premises:
. ,. 4
Lessee agrees to pay to Lessor as rental for the land, as shown and
described as Parcel 1 on attached Exhibit "A" and containing approximately
20.16 acres, for the first five (5) years of this lease, Three Hundred
Sixty-two Thousand Eight Hundred Eighty ($362,880) Dollars, payable monthly in
advance the amount of Six Thousand Forty-eight ($6,048) Dollars per month, or
such other amounts as are set forth in the construction schedule, Exhibit "B"
attached hereto and made a part hereof for all purposes. For the remainder of
this lease, in equal monthly installments, in advance, an amount of money to be
determined by revising. the first five years' rent as set forth in this
paragraph as the base rent, and not as may be modified by the construction
schedule referred to herein, as follows:
The rental shall be revised, effective. the beginning of the Sixth (6th),
Eleventh (filth), Sixteenth (16th), and every five (5) years thereafter based on
the change in cost of living index. For the purpose of this computation, it is
agreed that the Consumer Price Index for the month of September 1981 is the
base or 100%. The Cost of Living Index to be used is that reflected by the
Consumer Price Index, all items, Los Angeles-Long Beach—Anaheim, (1967 equal
100) published by the Bureau of Labor Statistics of the U. S. Department of
Labor. If, for any reason whatsoever, there is any change in the method of
calculation or formulation of said price index, or if that index shall be no
longer published, than another index generally recognized as authoritative
shall be substituted by agreement. In any event, the base used by the new
index shall be reconciled to the 7967 index.
The rentals set out hereinabove shall be payable on the first day of each
and every month throughout the term of this agreement. ,
2. Aviation Retail Fuel and Oil Sales: Lessee agrees to pay Lessor, on
or before the twentieth (20th) day of each month, an amount equal to Six and
one quarter cents ($0.0625) per gallon for all aviation fuel purchased by or
delivered to the Lessee at the Airport, annually. Lessee further agrees to pay
2
Lessor Ten cents ($0.100) per gallon on all aviation oil purchased by or
delivered to Lessee at the Airport.
In this regard, it is agreed that all aviation fuel received by Lessee .and
actually delivered by Lessee to regularly-scheduled airlines operating under
contract with-Lessor shall not be subject to such payment. It' is agreed that
the total gallonage delivered to or purchased by Lessee each month, other than
fuel delivered to regularly-scheduled airlines operating under contract with
Lessor, as described in Article III, Paragraph 2 hereof, shall be reduced by
two percent (2%) before computing charges as a maximum loss allowance from any
and all causes.
Lessee agrees that it will instruct all of his fuel suppliers to promptly
furnish a duplicate copy of all invoices and/or delivery receipts to the City,
Lessee agrees to fully comply with all standards related to fuel sales as
adopted by the City, as regards safety and standards of service. Lessee further
agrees that it will adopt and maintain retail sales prices for aviation fuels
which are competitive with other trunk line air carrier airports within a
sixty-five mile radius of the Palm Springs Airport.
3. Into-plane Fuel, and Oil Sales: The Lessee will pay the Lessor, each
calendar quarter, One and seven eighths mils ($0.001875) for each gallon of
aviation fuel,delivered into airlines or other contract purchasers as described
in Article III, Paragraph 2.
4. Automotive Retail Fuel and Oil Sales: Lessee agrees ;to pay Lessor, on
or before the twentieth (20th) day of each month, an amount equal to six and
one quarter cents ($0.0625) per gallon on all automotive fuel purchased by or
delivered to Lessee at the Airport, and ten cents ($0.10) per gallon on all
automotive oil purchased by or delivered to Lessee at the Airport during the
immediately preceding month, provided, however, that said fuel flowage fee for
the period from the effective date of this lease and until October 31, 1983,
shall be three (30) per gallon and thereafter shall be adjusted pursuant to
Article II, Paragraph 5.
3
5. Renegotiation: It is specifically agreed that the fuel gallonage fees
set out in Paragraphs 2, 3 and 4 above shall be renegotiated effective the
first day of November, 1982, and thereafter every five years on said
renegotiation anniversary date. Such renegotiated fees shall be limited in
each renegotiation period, to a maximum increase of not more than twenty-five
percent (25%).
6. Restriction on Fuel Sales: It is specifically agreed that no fuel
sales of aviation or other fuels will be made in containers.
7. Sales of New and Used Aircraft: Lessee agrees to pay Lessor within
sixty (60) days following the end of each year of this agreement a fee based
upon the gross sales price, excluding sales tax, of each new or used aircraft
sold, as follows:
1/2 of 1% of.the gross sales price, as reported by Lessee
in Sales Tax Reports made to the,State of California Board
of Equalization.
8. Charter/Air Taxi Operation:
1% of gross revenue derived from charter/air taxi operations
shall be paid to Lessor by the 20th of each succeeding month.
9. Sales of food and beverages, alcoholic beverages and general
merchandise:
Lessee agrees to pay Lessor, on or before the twentieth (20th) day of
each month the following sums:
a. Food & Beverage
(1) Three (3% percent of total gross, exclusive of taxes, to a total
yearly gross of $250,000.
(2) Four (4%) percent of total gross, exclusive of taxes., for total
yearly gross from $250,001 to $500,000.
(3) Six (6%) percent of total gross, exclusive of taxes, for total
yearly gross in excess of $500,001.
(4) Provided, however, for the period from the effective date of this
agreement,and expiring October 31, 1983, the percentage shall be three (3%) of
all gross derived from this activity during said period.
b. Alcoholic Beverages
4
gg
(1) Seven (7%) percent of total yearly gross, exclusive of taxes, to
a total yearly gross of $125,000.
(2) Eight (8%) percent of total yearly gross, exclusive of taxes, .for
total yearly gross from $125,001 to $250,000.
(3) Hine (9%) percent of total yearly gross, exclusive of taxes, in
excess of $250,001,
(4) Provided, however, for the period from the effective date of this
agreement and expiring October 31, 1983, the percentage shall be five (5%) of
all gross derived from this activity during said period.
c. General Merchandise
(1) Five (5%) percent of total yearly gross sales, exclusive of
taxes,
ARTICLE III- RIGHTS OF LESSEE
1. Fueling of Itinerant Aircraft: it is agreed that Lessee shall have
the non-exclusive right to sell and deliver, and to provide into plane services
of aviation fuel and lubricants to all owners and operators of itinerant
aircraft based at or using the Airport. "Itinerant aircraft" are defined as
all aircraft based at or using the Airport, except those aircraft owned and
operated by interstate carriers now or hereafter certificated by the Civil
Aeronautics Board or intrastate carriers licensed by the Civil Aeronautics
Board to service the Airport on a published schedule basis.
2. Into-plane Services: It is agreed that Lessee, to the extent
consistent with leases in effect between Lessor and the scheduled airlines
operating at the Airport, shall have the non-exclusive right to act as agent
for fuel suppliers to.handle into-plane deliveries of aviation fuel and
lubricants sold by the suppliers directly to the consumer 'under a contract fuel
and lubricants sales agreement. A "contract fuel and lubricants sales'
agreement" is defined as an agreement for the sale of aviation fuel and
lubricants between a ,fuel supplier and a scheduled air carrier regularly
serving Palm Springs and certificated by the Federal Aviation Administration,
or the Civil Aeronautics Board. It is agreed that Lesspr may grant to such '
carriers the right to fuel and service their own aircraft, by their own
5
V
employees, and the right to maintain fuel and oil facilities and equipment for
this purpose. It is further agreed that Lessor shall prohibit any of such
certificated carriers from utilizing any aviation or automotive fuel and oil,
facilities or equipment for the purpose of supplying, selling, delivering or
performing into'-plane service of aviation fuel and lubricants to other
carriers, whether such other carriers are certificated, itinerant, foreign or
domestic.
3. Sale of Automotive Fuels and Lubricants; Lessee shall have the
non-exclusive privilege of selling automotive fuels and lubricants on the
Airport for motor vehicles, aircraft-servicing vehicles and ground-handling
equipment; provided, however, that Lessor and scheduled air carriers may
service their own ground equipment from their own.Airport automotive gasoline
installations maintained for such purpose.
4. Rights in Common With Others: Lessee shall have the right, in common
with others (all such others, except carriers certificated by the Civil
Aeronautics Board or rederal Aviation Administration to service the Airport on
a published-scheduled basis, being subject to the provisions of Article VIII)
to engage in, either directly or through agents or sub-tenants, provided,
however, such agents or sub-tenants shall be subject to prior approval of the
Airport commission, which approval shall not be unreasonably withheld, the
following activities at the Airport:
a. Repair, maintain, condition, inspect, service and make modifications
and alterations to aircraft, aircraft engines, propellers, and appliances,
including the removal of engines for major overhaul and including the actual
overhaul of engines and aircraft;
b. Sale of new and used aircraft at both retail and wholesale;
c. Lease of aircraft;
d. Sale of parts and accessories for aircraft, aircraft engines,
propellers and appliances;
e. Sale of airmen supplies., gifts, tobacco, and general merchandise;
f. Hangaring and storing of aircraft;
6
g. Repair, maintenance, sale and Installation of aircraft electronic
equipment;
h. Operation of a charter or air taxi flight service;
I. Operation of a car rental service upon payment to Lesspr of additional
rentals or fees based upon rates comparable to those paid by other car rental
agencies operating at the Airport (provided, however, the existing car rental
agencies currently servicing, the airport shall have a right of first refusal to
establish an on-situ aprrcy =1: f:S•: 'rality.);
j. Operation of a flight and ground school
k. Operation of a Restaurant open to the general public as well as an
aircraft food catering.servica and r=.It`.rd nerroices subject to such rights as
may be possessed by Air Terminal Services;
1. The rental of office or commercial space to aviation-related
businesses and tenants, such rentals shall be subject to the provisions of the
Airport Rules and Regulations, the City's Business License Cade and require the
prior approval of the Airport Commission prior to.any such tenant engaging in a
commercial aviation activity at the Airport.
m. Sell and 'deliver and provide into-plane services of aviation fuel and
lubricants, ground-handling, food catering, parking and related services to all
scheduled, non-scheduled and commuter aircraft based at or using the Airport,
subject to such rights as may be possessed by Air Terminal Services;
n. Such other activities as are incident to the operation of a general
commercial aviation business
o. It is agreed that Lessee may provide the required charter air taxi or
flight school services herein required as Lessee's operation or through a
sublessee of his choice provided said sublessee fully meets all Federal
Aviation Administration requirements for such operations, and provided further
that Lessee shall be fully responsible to assure that Federal Aviation
Administration requirements are fully met, and that the fees required under
Article II, Paragraph 8, shall be paid to Lessor as therein set out.
7
ARTICLE IV
CONSTRUCT J077—fIPROVEMENTS
BY LESSEE
1. General Specifications - Lessee intends to construct certain
facilities and buildings on the demised premises. Lessee shall, without cost
to Lessor and within the time periods set forth in Exhibit "B", attached hereto
and made a part hereof, commence and complete construction of an Airport fixed
base general aviation facility, such construction to include, but not be
limited to, parking ramps, tiedown facilities, T-Hangars,.maintenance
facilities, office facilities, and one full-width lighted taxiway from said
facilities to existing Runway 12/30, said taxiway to be constructed in full
compliance with Federal Aviation Administration specifications. It is
understood and agreed that Lessee shall install all utilities and shall provide
adequate automobile parking spaces as required by the standards of the City.of
Palm Springs. Further, it is understood and agreed that all construction plans
and specifications must be approved by the appropriate agencies of the City
prior to the commencement of any construction. It is further agreed that
Lessee shall submit to the Palm Springs Airport Commission a complete site, use
and construction plan including architectural renderings sufficient to allow
the Airport Commission to determine the character and nature of the
improvements to be constructed on the demised premises.
2. Within thirty (30) days following completion of any construction on
demised premises, Lessee shall give to Lessor, for filing, a complete set of
As-built drawings, including but not 1-i,mited necessarily'to. all underground
facilities.
3. It is specifically agreed that, at the sole option of the City, the
improvements constructed on the leasehold shall become the property of the
City, free and clear from any and all encumbrances at the expiration or
termination of this agreement or any extension thereof. '
4. Lessee agrees, without limiting the generality thereof, in constructing
all improvements 'on:'the leasehold, Lessee will hold Lessor harmless from and
against claims, liens or attachments of any kind or type whatsoever. Lessee"
B
4, M.
IT
a
further agrees that Lessor shall have the right to post notices of
non-responsibility as provided by Section 1183 of the Code of Civil Procedure
of the State of California. Lessee further agrees to hold Lessor harmless from
and against any claims of causes of action which might result from Lessee's use
of the property, whether caused by the negligence of the Lessee, falling
aircraft or any other cause, save and except damages caused by the negligence
of the Lessor.
5. Lessee shall not erect, maintain of display any signs or other
advertisements at or on the exterior of the leased premises without first
obtaining the written approval of the Lessor, which approval shall not be
unreasonably withheld,-
ARTICLE V
AIRCRA RK G AREA
T-HANGAR FACILITIES'
AND LANDING FEES
1. Aircraft Parking Area: Lessee agrees to provide at all times during
the term of this agreement a public aircraft parking ramp located upon the
demised premises. Lessee agrees to install and maintain aircraft tiedown
facilities for the securing of aircraft in this designated public aircraft
parking ramp, and Lessee shall maintain the ramp in a clean and orderly, safe
and sanitary condition at all times.
2. T-Hangar Facilities: Lessee agrees to provide upon the demised
premises T-Hangar facilities of a type and kind approved by the Airport
Commission and to maintain such facilities in a clean, orderly, safe and
sanitary condition at all times.-
3. Collection of Landing Fees, Aircraft Parking Fees, and T-Hangar Rental
Fees•
a. In General: Lessor may apply landing fees to certain aircraft except
exempt government and military aircraft. Lessee shall have and assume the
responsibility for the collection of all such landing fees with respect to its
guests, business visitors, customers and invitees at the Airport.
b. Landing Fees: It is agreed that the Lessee shall retain fifty percent
(50%) of all landing fees referred to in the subparagraph above, and that
9
Lessee will pay to Lessor the remaining fifty percent (50%) of said landing
fees collected by it.on or before the 20th day of the month following the month
of collection. It is .agreed that Lessor retains the right to adjust the.
landing fees upon sixty (60)' days' written notice to Lessee.
c. Parking Fees: It is agreed that Lessee shall collect'and retain all
aircraft and automobile parking fees on the leased premises. Lessee shall
provide Lessor with thirty '(30) days' written notice of any fee changes.
d. T-Hangar rental fees: It is agreed that Lessee shall collect and
retain all T-Hangar rental fees on the leased premises. Lessee shall provide
Lessor with thirty (30) days' written notice of any fee changes.
.ARTICLE VI- 0&LIGATION OF LESSEE
1. General Obligations: Lessee, his employees, agents or servants, shall
at all times comply with the laws and regulations of the United States of
America, the State of California and all applicable ordinances, codes and rules
and regulations of the City of Palm Springs and regulations covering the
operation of the Palm Springs Municipal Airport, as they now exist or as they
may Hereafter be lawfully enacted or amended. Violations thereof by Lessee,
his agents, servants or employees, or revocation of permits or licenses
required in the performance of this agreement, shall be cause for termination
of this lease agreement at the option of the Lessor if not corrected after
ninety (90) days' written notice is provided Lessee.. Lessee shall procure and
maintain, at his own expense, all licenses or permits necessary to legally
conduct the business of a fixed base operation and associated businesses in the
City of Palm Springs.
2. Service Obligations: In addition to the obligations referred to else-
where in this agreement, Lessee agrees, without limiting the generality
thereof, to furnish at its own expense the following services and equipment:
a. The parking, storage and tie-down of aircraft utilizing the facilities
provided and installed by Lessee.
b. Vehicular lead-in and .lead-out services for all aircraft, excepting
those operated by air carriers and other Airport Lessees, and transportation
within the Airport premises for passengers and crews of all such aircraft
10
desiring such service, including baggage. For these purposes, the Lessee will
provide at least one late model station wagon, equipped with a fire
extinguisher, and carrying such marking and lighting as may be required by
Lessor.
c. Aircraft parking guidance, positioning of wheel chocks, tie-downs,
etc., baggage_handlIng, fire guard for engine starts and any other services
reasonably required.
d. Ground service equipment suitable for all types of aircraft, including
aircraft jacks, auxiliary power units, aircraft tugs with' al.l proper types of
tow bars, sanitary servicing equipment and all other necessary and desirable
equipment required for complete ground service.
e. An executive terminal facility consisting of an attractively appointed
and furnished lounge and waiting room, an operations room containing adequate
facilities for the preparation of flight plans, a bulletin board for current
NOTAMS and modern and sanitary restroom facilities.
f. Radio monitoring of ground control and approach control frequencies to
coordinate and anticipate services to be rendered when appropriate.
g. As agent for Lessor, as provided in Article VI, the collection of all
applicable landing and parking fees. In this respect, Lessee will maintain, in
its business office on its leased premises, clerical facilities and services
necessary for the collection of fees and the recording of all operations in a
manner and form prescribed by the Lessor.
h. Lessee shall be open for business from 6:00 a.m. to 11:00 p.m., seven
days a week. Lessee shall operate the demised premises and facilities in a
progressive and efficient manner so as to produce the maximum revenues which
may be derived therefrom.
I. Lessee shall observe and obey and shall compel its officers,
employees, invitees and those doing business with it to observe and obey all
rules and regulations of the Lessor now in effect, and such further rules and
regulations as may from time to time be promulgated by Lessor; provided,
however, that such further rules and regulations shall not unreasonably
conflict with the provisions of this lease.
11
rr'
�y.
3. Repair and Maintenance of Premises: Lessee has examined the leased
premises and facilities and agrees to accept said premises and facilities for
the purposes of this agreement in their present condition. Lessee agrees to
make ordinary repairs as may be necessary from time to time as required to
maintain the leased premises in good repair, order and condition.
4. Janitorial-and Cleaning Services: Lessee will provide its own
janitorial and cleaning serives and will maintain its leased premises in a
clean and sanitary condition at all times.
5. Operations for Benefit of Public: Lessee agrees to operate the leased
premises for the use and benefit of the public, to make available all Lessee's
i
Airport facilities to the public, without discrimination on the grounds of sex,
race, color or national origin, and to refrain, from imposing or levying
excessive, discriminatory or otherwise unreasonable charges or fees for any use
of its facilities or services. Nothing herein contained shall be construed to
grant or authorize the granting of an exclusive right within the meaning of
Section 308 of the, Federal Aviation Act. of 1958, as amended.
'6, Utilitiese Lessee agrees to make its own arrangements for all utility
services and to pay for such services on its leased premises.
ARTIC{E VII
PUBLIC FACILITIES, INGRESS,
EGRESS AND QUIET ENJOYMENT
Lessor agrees that Lessee, upon payment of the rental hereunder and
performing the covenants of the agreement, may quietly have, hold and enjoy the
leased premises during the term of this agreement, and that Lessee shall have
the right to use, in common with others, the public facilities at the Airport
and it shall also have the right of ingress to and egress from its leased
premises and the public facilities for its employees, visitors and customers.
ARTICLE VIII - LESSOR'S RESERVED RIGHTS
1. Airport Development and Safety: Lessor reserves the right to further
develop or improve the aircraft operating area of the Airport as it sees fit,
except those premises leased to,Lessee, and Lessor reserves the right to take
any action it considers necessary to protect the aerial approaches of the
12
Airport against obstruction, together with the right to prevent Lessee from
erecting, or permitting to be erected, any building or other structure on the
Airport which, in the opinion of Lessor, would limit the usefulness of the Air-
part or constitute a hazard to aircraft.
2. The parties hereto agree that, at the sole option and 'election of the
City, the leasehold granted herein may be amended to include Parcel 2, as shown
on Exhibit "A" attached hereto, thereby increasing the leasehold by 8,35 acres.
In the event the City so elects, the rental for this parcel shall be at the
same rate, per acre, as Parcel 1, and subject to the save five-year adjustments
as provided in Article I1, Page 2. In the event the City elects to exercise
this option, it shall do so no sooner than August 15, 1986, and no later than
October 15, 1986, with the effective date for the addition of Parcel 2 to be
December 15, 1986, with rentals to accrue to the City from and after said date.
3. Lease to United States: During the time of war or national emergency,
Lessor shall have the right to lease the landing area or.any part thereof to
the United States Government for military or naval use, and -- if such lease is
executed -- the provisions of this instrument insofar as they are inconsistent
with the provisions of the lease to the Government shall be suspended and, in
that event, a just and proportionate part of the rent hereunder shall be
abated, and the period of such closure shall be added to the term of this lease
so as to extend and postpone the expiration thereof unless the Lessee otherwise
elects to terminate the lease, as provided in subparagraph 3 of Article XII.
ARTICLE IX - INSURANCE
1. Liability Insurance: During the entire term of this agreement, Lessee
agrees to procure and maintain public liability insurance at its sole expense
to protect against loss from liability imposed by law for damages on account of
bodily injury, including death therefrom, suffered or alleged to be suffered by
any person or persons whomsoever, resulting directly or indirectly from any act
or activities of the Lessor or Lessee, or any person acting for the City, or
Lessee, or under its control or direction, and also to protect against loss
from liability imposed by law for damages to any property of any person caused
directly or indirectly by or from acts or activities of the City, of Lessee, or
13
. f
any person acting for the City or Lessee, or under its control or direction.
Such public liability and property damage insurance shall also provide for and
protect the City against incurring any legal cost in defending claims for,
alleged loss. Such public liability and property damage insurance shall be
maintained in full force and effect throughout the term of the agreement and
any extension- thereof, with coverage limits of not less than $2,000,000
combined single limit. In, addition, Lessee shall procure and maintain
throughout the term of this agreement a minimum' passenger liability insurance
of not less than $50,000 per seat for passengers and crew for each aircraft
owned or used in his business or any authorized business conducted by a
sublessee in addition to the single limit insurance specified above. All of
such insurance shall be primary insurance and shall 'name the City of Palm
Springs as an additional insured.
If the operation under this agreement results in an increased or decreased
risk in the opinion of the City Manager, then Lessee agrees that the minimum
limits hereinabove designated shall be changed accordingly upon request by the
City Manager; provided, however, that the Lessee may appeal to the City Council
within ten (10) days after any increase is requested, and such requirement for
increased coverage shall be subject to determination by the City Council.
Lessee agrees that provisions of this paragraph as to maintenance of
insurance shall not be construed as limiting in any way the extent to which the
Lessee may be held responsible for the payment of damages to persons or
property resulting from Lessee's activities, or the activities of any person or
persons for which Lessee is otherwise responsible.
2, Worker's Compensation Insurance: The Lessee shall procure and
maintain, at its sole expense, Worker's Compensation Insurance in such amounts
as will fully comply with the laws of the State of California, and which shall
indemnify, insure and provide legal defense for both the Lessee and the City
against any loss, claim, or damage arising from any injuries or occupational
diseases happening to any worker employed by the Lessee in the course of
carrying out the within agreement.
I
14
i
3. Fire & Extended Coverage Insurance: Lessee also agrees to procure and
maintain, at its sole expense, during the term of this agreement and any
extension thereof, a policy of fire, extended coverage and vandalism insurance
on all permanent property of Lessee's of an insurable nature located upon the
leased premises. Said policy shall be in an amount sufficient to cover at
least eighty percent (80%) of the replacement costs of said property. Lessee
agrees to ,pay the premium far such insurance, and shall require that any
insurance proceeds resulting from a loss under said policy are payable jointly
to City aiid Lessee and said proceeds shall constitute a trust fund to be
reinvested in rebuilding or repairing the damaged property or said proceeds may
be disposed of as .specjfied in the paragraph following entitled "Waste, Damage
or Destruction" hereof; provided, however, that within the period during which
there is in existence a mortgage upon the leasehold, then and for that period
all policies of fire insurance, extended coverage and vandalism shall be made
payable jointly to the mortgagee or beneficiary, the named insured, and City,
and shall be disposed of, jointly, by the parties for the following purposes:
a. As a trust fund to be retained by said mortgagee or beneficiary and
applied in reduction of the debt secured by such mortgage with .the excess
remaining after full payment of said debt to be paid over to Lessee and City to
pay for recoAstructioh, repair or replacement of the damaged or destroyed
improvements in progress payments as the work is performed. The balance of
said proceeds 'shall be paid to Lessee. Provided further, however, nothing
herein shall prevent Lessee, at its option and with the approval of said
mortgagee or beneficiary, from filing a faithful performance bond in favor of
said mortgagee or beneficiary and City in an amount equivalent to said
insurance proceeds in lieu of surrendering said insurance proceeds to said
mortgagee or beneficiary and City.
b. Im the event that this lease is terminated by mutual agreement and
said improvements are not reconstructed, repaired, or replaced, the insurance
proceeds shall be jointly retained by City and said mortgagee or beneficiary to
the extent necessary to first discharge the debt secured by said mortgage or
deed of trust, and then to restore the premises to a neat and clean condition.
15
��.%�NP
Said mortgagee or beneficiary shall hold the balance of said proceeds for City
and Lessee as their interest may appear. Lessee agrees to increase the limits
of liability when, in the opinion of the City Manager, the value of the
improvements covered is increased, subject to the availability of such
insurance at the increased limits; provided, however, that the Lessee may
appeal to the City Council within ten days after any increase is requested, and
such requirement for. increased coverage shall be subject to determination by
I the City Council.
4. Waste, Damage, or Destruction: Lessee agrees to give notice to the
City of any fire or other damage that may occur on the leased premises within
ten days of such fire or damage. Lessee agrees not to commit or suffer to be
committed any waste or injury or any public or private nuisance, to keep the
premises clean and clear of refuse and obstructions, and to dispose of all
garbage, trash and rubbish in a manner satisfactory to the City. If the leased
premises shall be damaged by any cause which puts the premises into a condition
which is not decent, safe, healthy, and. sanitary, Lessee agrees to make or
cause to be made full repair of said damage and to restore the premises to the
condition which existed prior to said damage, or Lessee agrees to clear and
remove from the leased premises all debris resulting from said damage and
rebuild the premises in accordance with plans and specifications previously
submitted to the City and approved in writing in order to replace in kind and
scope the operation which existed prior to such damage.
Lessee agrees that preliminary , steps toward performing repairs,
restoration, or replacement of the premises shall be commenced by Lessee within
thirty (30) days, and the required repairs, restoration, or replacement shall
be completed within a reasonable time thereafter. City may determine an
equitable deduction in the minimum annual rent requirement for such period that
said premises are untenable by reason of such damage.
5. Automotive Insurance: The Lessee shall procure and maintain, at its
sole expense, throughout the term of this agreement and any extension thereof
public liability and property damage insurance coverage for automotive
equipment, if any, with coverage limits of not less than One Million Dollars
16
($1,000,000) combined single limit. All such insurance shall be primary
insurance, and shall name the City of Palm Springs as an additional insured.
Lessee's certification that it has no automobile equipment shall satisfy this
clause.
6. Evidence of Insurance: A certificate of insurance or'an appropriate
insurance binder evidencing the above insurance coverage with a company
acceptable to the City's Risk Management Officer shall be submitted to the City
prior to execution of this agreement on behalf of the City.
7. Notice to City, Insurance Coverage Change: The terms of the insurance
policy or policies issued to provide the above insurance coverage shall provide
that said insurance may not be amended or canceled by the carrier for
non-payment of premiums, or otherwise, without thirty (30) days' prior written
I
notice of amendment or cancellation to the .City. In the event the said
insurance is canceled, the Lessee shall, prior to the cancellation date, submit
to the City Clerk new evidence of insurance in the amount heretofore
established.
ARTICLE X - BONDS
1. Prior to the execution of this contract, the Lessee shall provide the
City and maintain through the life of this agreement a performance bond in the
amount of Twenty-five Thousand Dollars ($25,000). Payment of such performance
bond shall be due and payable to reimburse the City for any loss sustained in
the event of default or failure of the Lessee to perform as herein set forth.
Alternatively, the Lessee may, at his option, post a certificate of deposit,
payable to the City of Palm Springs, in the amount of $25,000 in a bank or
savings and loan association approved by the City of Palm Springs. In the
event the Lessee elects to exercise this option, any interest accruing to the
certificate of deposit shall remain the property of the Lessee.
2. The Lessee shall, prior to the commencement of construction for each
phase set forth in Exhibit "B", provide the City with a construction payments
bond in an amount equal to the estimated cost of construction as approved by
Lessor, which shall be posted prior to the commencement of the construction of
each phase. Payment of such construction payments bond shall be due and
17
payable to reimburse the City for any loss sustained in the event of default or
failure of the Lessee to perform as hereinabove set forth. Alternatively, the
Lessee may at his option post a certificate of deposit payable to the City.of
Palm Springs in the amount equal to the estimated cost of construction in a
bank or a savings and loan association approved by.the City of Palm Springs,
In the event .the Lessee elects to exercise this option, any interest accruing
to the certificate of deposit shall remain-the property of the Lessee.
3, As an alternative to furnishing the bonds in accordance with
paragraphs 1 and 2, above, Lessee may enter into a buildi,hg loan agreement with
an institutional lender, which building loan agreement shall be subject to the
approval of the City., Prior to such approval, Lessee shall deposit with the
lending institution the difference between the amount of the loan and the
projected cost of the improvement.
ARTICLE XI - ENCUMBRANCE
1. This lease, or any right to or interest in, or any of the improvements
on the leased premises, may be encumbered with the written approval of the
City. No such encumbrance or any addition thereto or extension thereof shall
be valid without said approval; provided, however, the City shall consent in
writing to any encumbrance that does not exceed eighty-five percent (85%) of
the value of.the leasehold interest and improvements placed thereon.
2. Any encumbrance must be confined to the leasehold interest of Lessee
or the subleasehold interest of a sublessee and shall not ,jeopardize in any way
the Lessor's interest in the land. Lessee agrees to furnish, as requested, any
financial statements or analyses pertinent to the encumbrance that the City may
deem necessary to justify the amount, purpose and terms of said encumbrance.
3. In the event of default by the Lessee of the terms of an approved
encumbrance, the encumbrancer may exercise any rights provided in such approved
encumbrance, provided that before any sales of the leasehold, whether by power
of sale or foreclosure, the encumbrancer shall give to the City notice of the
same character and, duration as is required to be given to Lessee by such
encumbrancer and/or the laws of the State of California. Any notice of default
I
�I
18
f,
shall comply with the provisions of Section 2924(c) of the Civil Code of the
State of California.
4. If any sale under the approved encumbrance occurs, whether by power. of
sale or foreclosure, and the purchaser at such sale is the encumbrancer, the
encumbrancer may sell and assign the leasehold interest without any further
consent provided that the assignee shall agree in writing to be bound by all
the terms and conditions of this lease. If the encumbrancer is the purchaser,
it shall be required to perform this lease only so long as it retains, title
thereto. ' If a sale under the approved encumbrance occurs, and the purchaser is
a party other than the encumbrancer, said purchaser, as successor in interest
to the Lessee, shall be bound by all the terms and conditions of this lease.
S. If notice of such sale shall be given and the defaults or any of them
upon which such notice of sale is based shall then continue, Lessor shall have
the right to correct such defaults at any time prior to the date of sale or
foreclosure, and to terminate such leasehold upon paying, to the encumbrancer
the balance of the encumbrance, as hereinafter defined.
6. 'Balance of encumbrance" shall mean the amount of principal, remaining
unpaid on a note secured by a trust deed or mortgage of an interest in this
lease; provided that to such principal shall be added accrued interest, thereon
past due and,expenses incurred by the lender in connection with foreclosure,
including, but not limited to, fire insurance premiums, title insurance
expenses, recording fees, appraisal fees, attorneys' fees, credit reports and
any tax reporting services and additional expenditures paid by the lender on
additions, betterments and rehabilitations of improvements on the property
encumbered pursuant to plans approved by the City, which consent may not be
unreasonably withheld, and other expenses necessary to place the improvements
in marketable condition, such adjusted'principal to be paid in cash or at the
option of the City amortized over the term and in accordance with the schedule
set forth in said note, the interest rate on the unpaid balance thereto to be
as set forth in said note.
7. Lessor agrees that it will not terminate this lease because of any
default or breach hereunder on the 'part of Lessee if the encumbrancer under the
19
trust deed, within ninety (90) days after service of written notice on the
encumbrancer by Lessor of its intention to terminate this lease for such
default or breach, shall:
a. Cure such default or breach if the same can be cured by the payment or
expenditure of money provided to be paid under the terms of' this lease;
provided, however, that for the purpose of the foregoing, the encumbrancer
shall not be required to pay money to cure the bankruptcy or insolvency of
Lessee; or _.
b. If such default or breach is not so curable, cause the trustee under
the trust deed to commence and thereafter diligently to pursue to completion
steps and proceedings for judicial foreclosure, the exercise of the power of
sale under the pursuant to the trust deed in the manner provided by law, or
accept from Lessee an assignment in lieu of foreclosure, and keep and -perform
all of the covenants and conditions of this lease requiring the payment or
expenditure of money by lessee until such time as said leasehold shall be sold
upon foreclosure pursuant to the trust deed, be released or reconveyed
thereunder, be sold upon judicial foreclosure or be transferred by deed in lieu
of foreclosure.
ARTICLE %II - TERMINATION BY LESSEE
In addition to all other remedies available to the Lessee, this agreement
shall be subject to cancellation by,the Lessee should any one or more of the
following events occur:
1. The issuance by any court of competent jurisdiction of a permanent
injunction in any way preventing the use of the leased premises for the purpose
hereinbefore enumerated.
2. the breach by the Lessor of any of the terms, covenants or conditions
of this agreement to be kept, performed and observed by the Lessor, and the
failure of the Lessor, to remedy, or to commence action to remedy such breach
fora period of thirty
y (30) days after written notice from the Lessee of the
existence of such breach.
3. The assumption by the United States Government, or any authorized
agency of same, of the operation, control or use of the Airport and its
20
' r:�^.i�
facilities in such a manner as to substantially restrict the Lessee from
conducting its operation if such restrictions be continued for a period of six
(6) months or more.
ARTICLE XIII - TERMINATION BY LESSOR
1. In addition to all other remedies available to the Lessor, this
agreement shall be subject to cancellation by the Lessor should any one or more
of the following exist:-
a. Lessee expressly stipulates and agrees that Lessee fully understands
the provisions of HR $200 (the new Title 11 of the U, S. Code "Bankruptcy,"
effective October 1, 1979, particularly Section 265(e)(2), and notwithstanding
the relief available to Lessee under the provisions referred to, Lessee agrees,
elects, as a matter of contract, in consideration for the rights and privileges
granted under this Lease Agreement, that if said Lessee shall file a voluntary
petition of bankruptcy, or if proceedings in bankruptcy shall be instituted
against it, and it is thereafter adjudicated a bankrupt pursuant to such
proceedings, or, if a court shall take jurisdiction of Lessee and its assets
pursuant to proceedings brought under provisions of any Federal Reorganization
Act, or, if a receiver for Lessee's assets is appointed by a court of competent
jurisdiction, or, if Lessee be divested of its rights, powers and privileges
under this contract by other operations of law, then this agreement shall be
subject to cancellation by the Lessor, .as provided hereinabove.
b. If the Lessee shall abandon and discontinue the contract and operation
of said fixed-base operation for a period of 'six (6) months or more.
c. If Lessee shall default in or fail to make any payments at the times
and in the amounts as required of it under this contract.
d. If the Lessee shall fail to perform, keep and observe all of the
covenants and conditions contained In this contract to be performed, kept and
observed by it.
e. If the Lessee shall fail to abide by all applicable laws, ordinances
and rules and regulations of the United States, State of California or the City
of Palm Springs, as they now exist or as they may hereafter be lawfully enacted
or amended.
21
2. Upon the happening of any of the contingencies recited in subparagraph
1, in Article XIII above, Lessor shall give written notice to Lessee to correct
or cure such default, failure to perform, or breach, and if within ninety (90)
days from date of such notice, the default, failure to perform or breach
complained of shall not have been corrected in a manner satisfactory to the
Lessor, then and in such event Lessor shall have the right, at once and without
further notice to Lessee, to declare this contract terminated and to enter upon
and take full possession of the leased premises, and provided further, that,
upon the happening of any one of the contingencies enumerated in subsection la
thereof, this contract shall be deemed to be breached by Lessee and thereupon,
without entry or other action by Lessor, the contract shall terminate subject
to being reinstated only if such involuntary bankruptcy or insolvency
proceedings, petitions for reorganization, trusteeship, 'receivership, or other
legal act divesting Lessee of its rights under this contract shall be denied,
set aside, vacated or terminated in the Lessee's favor within forty-five (45)
days from the happening of the contingency. Upon the happening of said latter
events, this contract shall be reinstated as if there had been no. breach
occasioned by the happening of said contingencies, provided that Lessee shall
within ten (10) days after the final denial, vacating or setting aside of such
petition on the vacating, terminating or setting aside of such appointment, pay
or discharge any and all sums of money which may have become due under this
contract in the interim and shall then remain unpaid, and shall likewise fully
perform and discharge all other obligations which may have accrued and become
payable in the interim.
3. Lessor shall give written notice of such termination to said Lessee if
defaults have not been cured within said ninety (90) days, and the lease shall
terminate within ten (10) days from the date of said notice. The acceptance of
rentals and fees by Lessor for any period after a default of any of the terms,
covenants, and conditions herein contained to be performed, kept and observed
j by Lessee shall not be deemed a waiver of any rights on the part of the Lessor
to cancel this lease for failure by Lessee to so perform, keep or observe any
of the terms, covenahts or conditions hereof to be performed, kept and
22
",-,
z,.;.
observed. No waiver by the Lessor of any of the terms of this agreement to be
kept, performed and observed by the Lessee shall be construed to be or act as a
waiver by the Lessor of any subsequent default on the part of the Lessee.
ARTICLE XIV - ASSIGNMENUOPTIONS TO TERMINATE
The privileges contained herein are personal. The Lessee agrees that it
will not assign the same or any portion thereof or any .improvements thereon
including, but not. limited to, building or facilities constructed on the
premises without the express consent of the Lessor, in writing. Any purported
assignment or violation hereof shall be void. Lessor will not be unnecessarily
arbitrary in granting said permission, but the Lessor shall be the sole judge
as to the reliability, capability, character and desirability of the parties
involved until construction of all improvements is completed. Thereafter,
Lessor agrees that it will not unreasonably withhold its consent.
ARTICLE XV - INDEMNITY
Lessee shall indemnify and hold harmless Lessor from any and all demands,
losses, liabilities or judgments, together with costs and expenses incident
thereto which may accrue against, be charged to, or be recoverable from Lessor
as a result of the acts or omissions of Lessee, its employees or agents, in
connection with Lessee's use and occupancy of the demised premises, excluding,
however, such,as may be occasioned in Whole or in part by the, acts or omissions
of Lessor, its employees or agents. Lessor shall give to Lessee prompt and
timely notice of any claim made or suit instituted which in any way, directly
or indirectly, contingently, or otherwise, affects or might affect Lessee, and
Lessee shall have the right to compromise or participate in the defense of the
same to the extent of its own interests.
ARTICLE XVI - OTHER FIXED BASE OPERATORS
It is understood between the parties that Lessor retains the.privilege of
entering into other agreements which authorize the commercial use of the
Airport facilities, but only upon terms similar to those extended to Lessee.
It is specifically understood and 'agreed between the parties hereto that
Lessor shall not grant the right to engage in an aircraft fuel, sales or
servicing concession to another operator except under terms and conditions
23
I
1
which obligate any new concessionaire to engage in all activities set forth in
Article III, Paragraph 4, (excluding food, beverage and general merchandise)
and further obligate such future concessionaire to construct like facilities. to
those,constructed by Lessee herein.
However, Lessor covenants not to enter into any similar agreement with
respect to the Airport which contains more favorable terms than its agreement
with Lessee,--or to grant to potential competitors of Lessee privileges not
herein authorized unless the same are concurrently extended to Lessee,
excluding the negotiated value of land.
ARTICLE XVII - BOOKS AND RECORDS
Lessee agrees to submit to Lessor by the 20th day of each month a detailed
statement of all business done at the Airport during the previous month for
which fees or payments to the City are due. Lessor shall have• the further
right to inspect the accounting records of Lessee at reasonable times.
Lessee shall submit to Lessor each year a copy of its annual certified
audited report reflecting all operations at the Airport as soon as reasonable
following the close of each fiscal year.
ARTICLE XVIII - ASSIGNMENT OF AGREEMENT
I
Except as provided in Article XIV, Lessee shall not assign this agreement
without first,obtaining 'the prior written consent of Lessor thereto; provided,
however, that Lessee may assign this 'agreement to any entity controlling,
controlled by, or under common control with Lessee without obtaining the
written consent of Lessor„ In such latter event, Lessee shall give, prompt
notice of assignment to Lessor.
ARTICLE XIX - NOTICES AND CONSENTS AND APPROVALS
1. Notices. A,bill or statement, or any notice or communication which
Lessor may desire to give Lessee shall be deemed sufficiently rendered or given
if the same be in writing and sent by registered or certified mail, addressed
to Lessee at the address specified on the first page hereof or at the address
Lessee may substitute therefor by notice to Lessor, or left at such address or
delivered to Lessee's representative, and the time of such rendition of such
bill or statement shall be deemed to be the time when the same is mailed, left
24
Ie�y¢�1• ..
or delivered as herein provided. Any notice from Lessee to Lessor shall be
validly given if sent by registered or certified malt addressed to the City of
Palm Springs, California, City Hall, Palm Springs, California, or at such other
address as Lessor shall hereafter designate by notice to Lessee, All payments
should be made-payable to the City of Palm Springs, California.-
2. Consents and Approvals: Consents and approvals as required under this
agreement shall be in writing and shall not be unreasonably withheld and shall
be deemed to have been given unless, within thirty (30) days after the .receipt
of written request from Lessee for such consent or approval, Lessor shall have
given Lessee a written reply refusing or withholding action on such consent or
approval and stating its reasons for such refusal or such withholding of
action.
ARTICLE XX - RIGHT OF INSPECTION
The Transportation Director and/or fits duly authorised representatives
shall have at any and all times the full and unrestricted right to enter the
premises for the purpose of inspecting such premises and of doing any and all
it
things with reference thereto which the Lessor is obligated or authorised to do
as set forth herein or which may be deemed necessary for the proper general
conduct and operation of the Palm Springs Municipal Airport or in. the exercise
of the Lessor,'s police power.
ARTICLE XXI - HOLDING OVER
In the event Lessee shall hold over and remain in possession of the
premises herein leased after expiration of this agreement without any written
renewal thereof, such. holding over shall not be deemed to operate as a renewal
or extension of this agreement, but shall only create a tenancy from month 'to
month which may be terminated at any time by the Lessor.
ARTICLE XXII - MAINTENANCE - ALTERATIONS
1. Lessee shall at all times keep the premises and all fixtures,
equipment and personal property in a clean and orderly condition and
appearance.
2. Lessee shall repair, replace. rebuild and paint all or any part of .the
premises which may be damaged or destroyed by the acts or omissions of Lessee,
25'
a .
sublessees or by those of its officers, employees, guests, invitees or of other
persons on or at the premises with consent of Lessee.
3. Lessee. shall take such care of the premises and all parts thereof so
that at all times during the term of this agreement, and at the expiration or
termination hereof, the premises shall be in as good copdition as at the time
of completed construction or installation, except for reasonable wear which
does not adversely affect the structural integrity or condition of the
I
structures or adversely affect the appearance and efficient and proper
utilization of any part of the premises. The premises and all parts thereof
shall include, but .not be limited to, such of the following as are or may be
located or installed in or on the premises during the term of this agreement:
Fencing the exterior and interior of the building walls; the exterior and
interior and operating mechanism of and attachments to windows and sky Tights,
screens, roofs, foundations, steel work, columns; the exterior and interior and
operating mechanism of and attachments to doors, partitions, floors, ceilings;
inside and outside paving and unpaved areas„ landscaping, glass of every kind,
and the utility, mechanical, electrical and other systems.
4. Lessee shall make frequent periodic inspections and, as the necessity
�I
arises regardless of the causes therefore, shall perform all necessary
preventative maintenance, including, but not limited to, painting; make all
i
necessary repairs and replacements; and do all necessary rebuilding with
respect to the premises and all parts thereof (including any total
destruction). All such maintenance, repairs, and replacement shall be of
quality equal to the original in materials and workmanship. All exterior paint
colors shall he subject to the prior approval of Lessor,
ARTICLE MII - GENERAL PROVISIONS
1. Lessee represents that it has carefully reviewed the terms and
conditions of this agreement, and is familiar with such terms and conditions
and agrees faithfully to comply with the same to the extent to which.said terms
and conditions apply to its activities as authorized and required by this
instrument.
i
26
2. The term "Lessor" as used in this agreement means the "City of Palm
Springs" and where agreement speaks of approval and consent by the Lessor, such
approval is understood to be manifested by an official act of the City of Palm
Springs, unless otherwise expressly stated in this agreement.
3. Whenever under this instrument a time is stated within which or by
which original construction, repairs or reconstruction of said improvements
shall be completed, .and if during such period a general or sympathetic strike
or lockout, war or rebellion or some other event occurs beyond Lessee's power
to control, the period of delay so caused shall be added to the period allowed
herein for the completion of such work.
ARTICLE XXIh - NON-DISCRIMINATION & FAA REQUIRED CLAUSES
1, Lessee, in the operations to be conducted pursuant to the provisions
of this agreement and otherwise in the use of the Airport, shall not
discriminate against any person or class of persons by reason of race, color,
sex, creed or national origin as in any manner prohibited by Part 15 of the
Federal Aviation regulations or any amendments thereto.
2. Lessee shall furnish its accommodations and/or services on. a fair,
equal and not unjustly discriminatory basis to all users thereof. It shall
charge fair, equal and not unjustly discriminatory prices for each unit or
service; provided, however, that the.Lessee may be allowed to make reasonable
and non-discriminatory discounts, rebates or other similar type of price
reductions to volume purchaser, and in accordance with the other provisions of
this license with regard to discounts and rebates.
3. Non-compliance with these provisions shall constitute a material
breach of this agreement. In the event of such non-compliance, the City shall
have the right to terminate without liability; or at the election of the City
! or the United States, both shall have the right to judicially enforce the above
provisions.
k. The Lessee agrees to insert the anti-discrimination provisions
hereinabove enumerated in any agreement by Which said Lessee grants a right or
privilege to any person, firm or corporation to render accommodations and/or
services to the public on the subject premises.
27
P:itr'Sy". d
5. City also reserves the right, but shall not be obligated to Lessee, to
maintain and keep in repair the landing area of the Airport, as well as
publicly-owned .faciiities of the Airport, together with the right to direct and
control the activities of the Lessee in this regard.
6. Lessee hereby agrees to comply with the notification and review
requirements covered in Part 77 of the Federal Aviation regulations in the
event any future structure or building is-planned or in the event of any
planned modification or alteration of any present or future building or
structure situated on the leased premises,
7. City hereby reserves a right of flight for the passage of aircraft in
the airspace above the-surface of the subject premises together with the right
to create in said airspace such noise as is or shall become inherent in the
operation of aircraft operating on the Airport,
8. Lessee, by accepting this lease, expressly agrees for itself, its
successors and assigns that it shall not erect nor permit the erection of any
structure or object nor permit the growth of any tree on the land leased
hereunder above the mean sea level elevation of five hundred (500) feet. In
such an event, Cityreserves the right to enter'u on the land leased hereunder
9 P
and require Lessee to remove the offending structure or object at the expense
of Lessee. ,
9. Lessee, by accepting this agreement, expressly agrees for itself, its
successors and.assigns that it shall not,use the leased premises in, any manner
which might interfere with the landing and taking off ofaircraft from on or on
the Palm Springs Municipal Airport or otherwise create a hazard. In such an
event, City reserves the right to enter upon subject premises and cause the
abatement of the interference or hazard at the expense of the Lessee.
107 This agreement, and all the provisions hereof, shall be subject to
whatever right the United States Government how has or in the future may have
or acquire affecting the control, operation, regulation or commandeering of the
Airport or the exclusive or non-exclusive use of the Airport by the United
States during the time of war or national emergency.
28
4
ARTICLE XXV - RIGHT OF FIRST REFUSAL,
In the event Lessor elects to allow the continuation of a fixe base
operation beyond the expiration date of this agreement, Lessee shall ave the
right of first refusal upon sixty days' written notice from Lessor to eet any
offer received by the Lessor for such continuation of fixed base opera ions on
the demised premises.
ARTICLE XXVI - INVAL-ID PROVISIONS
I
In the event any covenant, condition, or provision herein contai ed is
held to be invalid by any court of competent ,jurisdiction,, the invali ity of
any such covenant, condition or provision herein contained is hereby d clared
to be severable and the remainder of this agreement shall remain in full force
and effect provided that the validity of any such covenant, conditio or
provision does not materially prejudice either the Lessor.or Lessee in its
respective rights and abrogations contained in the valid covenants, con itions
or provisions of this lease.
IN WITNESS WHEREOF, the parties have caused this agreement, contai ing 33
pages including Exhibits "A" and "B", each of which is a part hereof as though
fully set out herein, to be executed and their respective seals to be hereunto
affixed the day and year first above written.
ATTEST: CITY DOFF PALM SPRINGS, CAL FORNIA
BY '
Cityy Clerk � City Manager
REVIEWED & APPROVED'
ICES, NC.
STATE OF CALIFORNIA
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EXHIBIT A
JIMSAIR LEASE
PARCEL I
That portion of the Southeast 1/4 of Section 18; Township 4 South., Range 5
East, San Bernardino Base and Meridian, in the City of Palm Springs, County of
Riverside, State of California, described as follows:
Commencing at-the Southeast corner.of said Section 18, said point being the
point of intersection of the centerline of Ramon Road and Bogie Road; thence
North 0"17'49" West-, along the centerline of Bogie Road, being the East line of
said Section 18,.a distance of 63.03 feet to the beginning of a tangent curve
concave Southwesterly, having a radius of 4850.00 feet; thence Northwesterly
along the arc of said-curve, through a central angle of 26031'24", a distance
of 2245,16 feet to a point on the arc of said curve, a radial line passing
through said point bears North 63010'47" East; thence South 63°10'47" West,
along said radial line a distance of 50.00 feet to the True Point of Beginning;
said paint being hereinafter known,and designated as Point "A"; thence
continuing South 63910'47" West, along said radial line, a distance of 489.05
feet; thence North 36032'13" West, a distance of 1581.47 feet; thence North
53027'47" East, a distance of 550.88 feet to a point on the Southwesterly
right-of-way line of Bogie Road; thence South 36032'08" East, along the
Southerly right-of-way line of said Bogie Road, a distance of 853.99 feet to
the beginning of a tangent curve concave Southwesterly, having a radius of 4800
feet; thence Southeasterly along the arc of said curve, through a central angle
of 9"42'55", a distance of 813.90 feet to the True Point of Beginning,
containing 20.16 acres, more or less.
PARCEL 2
That portion of the Southeast 1/4 of Section 18, Township 4 South, Range 5
East, San Bernardino Base and Meridian, in the City of Palm Springs, County of
Riverside, State of California, described as follows:
Beginning at the point described above in Parcel 1 as Point "A"; thence South
63'10'47" West, a distance of 489.05 'feet; thence South 36032'13" East a
distance of 967.42 feet; thence North 75012139" East, a distance of 225.36 feet
to a point on the,arc of a curve concave Southwesterly; having a radius of 4800
feet, a radial li.pe-passing through said point bears North 75"12'39" East;
thence Northwesterly along the arc of said curve, through a central angle of
12"01'52", a distance of 1007.90 feet to the Point of Beginning, containing
j8.35 acres, more or less.
30
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N75'1239E I ..
S. E. 1/4
SECTION 18
T. 4,S., R. E. n'
S. 8. B. & M.
RAMON RD._ _ I'�/1N 0017'4°
CITY OF PALM SPRING S
DEPARTMENT OF COMMUNITY. DEVELOPMENT ENGINEERING DIVISIOi
LEASE PLAT
A LEASE OFA PORTION OF AIRPORT PROPERTY DESIGN BY: SCALE: FILE Nee
ADJACENT TO BOGIE ROAD,SECTION IS , ,F.O.M. MOD, R/ W
T. 41 S., R. 5 E•, S.,B- B. 13 M. CHECKED BY: DWG, NR: SHEET W*
31 I of I
y:ry.J.
RESOLUTION NO. 14055
OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS,
CALIFORNIA, APPROVING A FORTY-YEAR LEASE AGREEMENT
BETWEEN THE CITY OF PALM SPRINGS AND JIMSAIR
AVIATION SERVICES, INC. , FOR 20.16 ACRES OF LAND,
EFFECTIVE DECEMBER 15, 1981.
- - - - - - - - - -
WHEREAS the Airport Commission and Staff have recommended that a lease
be granted for 20.16 acres of land at the Palm Springs Municipal Airpor
for-the purpose of constructing and thereafter operating a full-service
fixed base operation, and
WHEREAS the Airport Commission and Staff have recommended that such
activity is in the public interest in that such activity will provide a
needed and essential service to the flying public,
NOW THEREFORE.BE IT RESOLVED by the City Council of the City of Palm
Springs that the lease for 20.16 acres of Airport land to Jimsair
Aviation Services, Inc., be and it is hereby approved.
ADOPTED this 18th day of Novemltep , 1981.
I
AYES: Councilmembers Beirieh, Field, Ortner, Rqse aad Mayor Doyle
NOES; None
ABSENT: None
ATTEST: -! CITY OOFFLM SPRINGS, CALIFORNIA
By
City Clerk 'City Mager
REVIEWED & APPROVED
i
20 b
I
y
CY
EXHIBIT "B"
1. Description of Phase Development with, Estimated Cost and Completion
Dates•
PHASE EST. COMPLETION
a. Main Terminal/Offices,
Restaurant, Catering Kitchen,
Self-serve Gas Station,
Parking 'Lots, Underground
Fuel Storage, ,Aircraft
Parking Ramp, Taxiway October, 1982
b. Maintenance Hangar, Cor-
porate Aircraft Storage
Hangar, Vehicle Maintenance
Building February, 1984
c. General Aviation T-Hangars December, 1984
d. Parking Ramp September, 1985
2. Expenditure Commitment: Jimsair must have spent $1,000,000 in
development prior to October 1, 1983.
3. Termination by Lessor: In the event that the investment commitment by
Jimsair, set out in Paragraph 2 hereof, has not been accomplished, unless
prevented by strike, war, riot, insurrection, act of God, or other cause
totally beyond the control of Lessee, Lessor reserves the right to terminate
this agreement upon thirty days' written notice to Lessee.
i
4. Rental Abatement During Development: During the development phases,
as described in Paragraph "1" above, the rental payments provided in Article
II, Section 1, of the lease shall be fifty percent (50%) of the amount
provided for by said lease. Upon completion of each phase of development, as
provided by this exhibit and as evidenced by the filing of a Notice of
Completion with respect to the particular phase, the rental for that portion of.
the leased premises occupied by the particular phase shall resume at the rate
provided for in the lease. For purposes of this provision, rental, as provided
by the lease, shall be computed at the rate of Three Hundred Dollars ($300.00)
per acre, per month. (By way of example: The rent payment due, on the
initiation of this lease, will be $6,048 divided by two, or $3,024 per month.
Upon completion of Phase 1 and assuming that Phase I occupies five ,(5) acres of
32
I � '
land, the rental payment would be $3,024 plus an additional $750 per month, for
a total of $3,774 per month).
S. Reimbursement of Taxiway Cost: Upon completion of the taxiway, as.
provided by Article IV, Section 1, of the lease, the Lessor shall reimburse the
Lessee the entire out-of-pocket cost of the taxiway to the Lessee, not to
exceed Four Hundred Forty-eight Thousand Five Hundred Dollars ($448,500),
whichever is the lesser amount, provided, however, that said reimbursement
shall be paid over 240 equal monthly installments, which installments shall not.
exceed $1,868.75 per month as a rental credit regardless of, the Lessee's actual
cost. ADAP funds used in construction shall not be utilized to compute
'reimbursement.
6. Reimbursemnt by Another FBO: In the event another FBO is authorized
at the Airport prior to Lessee's receipt of total reimbursement for the
taxiway, said FBO shall forthwith pay to Lessee one-half of the unreimbursed
cost o d taxiway.s of .y
I
I
I
it
I
33
Recorded
Instrument
#229437
When recorded return to: M0 #4385
William L. Hoese 7-5-89
Luce, Forward, Hamilton & Scripps
4250. Executive Square, ' Suite 700
La Jolla, CA 92037
(619 ) 535-2611
MEMORANDUM OF LEASE
This Memorandum of Lease is made and entered into by and
between The City of Palm Springs, herein called "Lessor" and
Jimsair Aviation Services, Inc. , a California corporation, herein
called "Lessee" , to witness that:
Lessor has leased to Lessee for a term of fifty years
commencing on December 15, 1981 and ending on December 14, 2031,
on the terms and conditions set forth in that certain (1) Lease
by and between the parties hereto and signed by the Lessee on
October 23, 1981 and approved by the Lessor on November 18 , 1981 ,
and (2) Settlement Agreement between Lessor and Lessee dated
September it, 1986 , all the terms and, conditions of which Lease
and Settlement Agreement are made a part hereof as though fully -
set forth herein. The Lease and Settlement Agreement pertain to
those certain premises in the County of Riverside, State of
California, described on Exhibit A (4 pages ) attached hereto.
Executed on J UL-Y to 1989 at Palm Springs, California.
Lessor:
THE CITY OF PALM SPRINGS by:
i
12C7�City Manager
Lessee:
JIMSAIR AVIATION SERVICES, INC.
Y,(-f
J n F. Bracamonte, President
By
STATE OF CALIFORNIA) ;
) ss .
COUNTY nOF RIVERSIDE)
On, 1.989 ; before me, the undersigned, a ofary Public
in and 'fo�d state, personally appeared.(! (i2�Cd�( 3f�F,� cf
known to .me to be ( �:[ �rT l!Z i ��gct off-THE C3TY. OF PALM
SPRINGS and known to. me o be tie. person who executed the within
instrument on behalf of the CITY OF PALM SPRINGS, and
EXHIBIT A��
acknowledged to me that the CITY OF PALM SPRINGS executed the
same.
WITNESS my hand and official seal.
lGli�Ci
#Eo�:E7,rQ: Notary Public'`C,
5 1990
STATE OF CALIFORNIA)
) ss.
COUNTY OF SAN DIEGO)
On this (a`, day of�JLj 1989, before me, the undersigned
Notary Public, in and for Said county and state, personally
appeared Juan F. Bracamonte, proved to me on the basis of
satisfactory evidence to be the President of the Corporation that ,
executed the within instrument on behalf of the Corporation
therein named, and acknowledged to me that such Corporation
executed the within instrument pursuant to its Bylaws or a
resolution of its Board of Directors.
w =PUBLIC-
SEAL
ERNANDEZ , ry Pllb11C
a CALIFORMA
OUM MAY 25, 1943
1
MI121WLH
EXHIBIT A
JiMSAIR LEASE
PARCEL 1
That portion of the Southeast 1/4 of Section 18, Township 4 South, Range 5
East, San Bernardino Base and Meridian, in the City of Palm Springs, County of
Riverside, State of California, described as follows:
Commencing at the Southeast corner of said.Section 18, said point being the
point of intersection of the centerline of Ramon Road and Bogie Road; thence '
North 0'17'4'9" West, along the centerline of Bogie Road, being the East line of
said Section 18, a distance of 63.03 feet to the beginning of a tangent curve
concave Southwesterly, having a radius of 4850.00 feet; thence Northwesterly
along the arc of said curve, through a central angle of 26.31'24", a distance
of 2245.16 feet to a point on the arc of said curve, a radial line passing
through said point bears North 63010147" East; thence.South 63010'47" West,
along said radial line a distance of $0.00 feet to the True Point of Beginning;
said point being hereinafter known and designated as Point "A"; thence
continuing South 63'10'47" West, along said radial line, a distance of 489.05
feet; thence North 36432'13" West, a distance of 1581.47 feet; thence North
53.27147" East, a distance of 550.88 feet to a point on the Southwesterly
right-of-way line of Bogie Road; thence South 36.32108' East, along the
Southerly right-of-way line of said Bogie Road, a distance of 853.99 feet to
the beginning of a tangent curve concave Southwesterly, having a radius of 4800
feet; thence Southeasterly along the arc of said curve, through a central angle
of 9'42'55", a distance of 813.90 feet to the True Point of Beginning,
containing 20.16 acres, more or less.
PARCEL 2
That portion of the Southeast 1/4 of Section 18, Township 4 South, Range 5
East, San Bernardino Base and Meridian, in the City of Palm Springs, County of
Riverside, State of California, described as follows:
Beginning at the point described above in Parcel 1 as Point "A"; thence South
63.10'47" West, a distance of 489.05 feet; thence South 36.32'13" East a
distance of 967.42 feet; thence North 75'12'39" East, a distance of 225.36 feet
to a point on the arc of a curve concave Southwesterly, having a radius of 4800
feet, a radial line passing through said point bears North 75.12'39" East;
thence Northwesterly along the arc of said curve, through a central angle of
12001152", a distance of 1007.90 feet to the Point of Beginning, containing
8.35 acres, more or less.
EXHIBIT A
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. I
N75'1239"E "
S. E. 1/4
SECTION IS
T. 4S•, R.5E.
S. B.B.& M. s
63.03'
RAMON RD. i��1 N 0'17 49 W
CITY OF PALM SPRINGS
DEPARTMENT OF COMMUNITY DEVELOPMENT ENGINEERING DIVISION
LEASE PLAT
'A LEASE Of A PORTION Of AIRPORT PROPERTY OtsroH n: scatc rlLt ME:
ADJACENT TO EOGIE ROAD,SECTION 16, F.O.M. I"*400' R/ W
T. 4 S., R. 5 E., S. e•B. s M. CHECnED er: OWG. H.: smttt He
I or 1
f
PARCEL ,3
THAT PORTION OF THE NORTHEAST 3. OF SECTION 18, T4S, RSE,
S.H.H. , IN THE CITY 07 PAL!! SPRINGS, COUNTY OF RIVERSIDE, STATE
OF CALIFORNIA, Dr-ZCRIBED AS FOLLOWS:
COI?IENCISG AT THE SOUTHZAST CORNER OF SAID SECTION 1S. SAID
POINT BEING TiM POINT OF INTERSECTION OF THE CENTERLINE OF
ROAD AND GENE AUTRY TRAIL.
THENCE NORTH 0417' 49" WEST, ALONG THE CENTERLINE OF GENE
AMY TRAIL, BEING THE EAST.`.INE OF SAID SECTION 18, A DISTANa:
OF 63.03 FEET TO THE BEGII.::ING OF A TANGENT CURVE, CONCAVE- SOL'IH-
W'_STEALY, HAVING A RAD:_, OF 4850.00 FEET.
THENCE I4ORTFWES7ERLY, ALONG THE ARC OF SAID CURVE, TF:RU A
CPNTRAL ANG_ OF ::'14'02", A DIS='C5 OF 3067. 14 FEET.
'_I:CE NORTH 36.31'51" WEST, TAVGENT TO LAST IIENTIO:.T_D CU7.7Z,
AL0:7C THE CESTZRLI::E OF SAID GENE AMY TMIL, A LIST.L'HC3 ,CF
653.99 FEET.
TKE::CE SC.r7:: 53027'47" HEST, A DISTANCE OF 50.00 FEET TO
SOLTrFVcSTERLY RIGHT OF WAY OF CEh2 AUTRY TRAIL. SAID POINT IS
TRITE POINT OF BEGINNING. THENCE CONTINUING SOUTH 53'27'47"
1--ZS7, A DISTANCE OF 55a.08 FEET,
THENCE NORTH 36'31'51" LEST, PARALLEL TO THE, CEI::E?...:::E OF '
GE::'c ALTRY TRAIL, A DISTA.YC= OF 395.J7,.FEET.
THENCE NORTH 530:7'47" EAST, A DISTAI:C: OF 550.6S F 70
A FO::: O:I TX: SOL: .:.rSTERLY RIGHT OF WAY OF GENE ALITRY TRAIL,
SE 50.00 FE'c7 FRO% CENTERLINE, AS MEASURED AT RIGHT A:7GL_S.
T'r.=NCE SOVIH 36.31'51" E:.ST, ALONG SAID SOUTir(WESTE?.LY R2 C"::
CT l:A'i LINE, A DISTANCE OF 395.37 FEET TO THE TRUE POINT OF
SiG:.:::II:G.
SAND EESCfi:?T:O:: CON:TAIN'S 5.00 ACRES.
CITY OF PALM SPRINGS
ta' w; ,fT CF CIVUVRITY OEVELOPuENT ___ ENGINEENING 61V191^)t.,
EXHIBIT A
z -
�RCEL, 3
SGt�AC,�y
Y \
4 JIMSAIR
�AV Ir TION SERVIC Al
INC.
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CITY OF PAL.`! SPRINGS
OF COWWUNITY CC% 'LOPW(':T [ '. :•i'.g ; .. elpl,
OPTIONAGREEMENT 1;
OPTION AGREEMENT
THIS OPTION AGREEMENT is made this IF�.,J day of
�dIOR), 1986, by and between THE CITY OF' PALM SPRINGS,
CALIFORNIA ("Optionor"), and JIMSAIR AVIATIdN SERVICES, INC. , a
California corporation, having its usual place of business at the
Palm Springs Municipal Airport, Palm Springs, California, and
whose permanent mailing address, is Lindbergh 'Field International
Airport, San Diego, California ("Optionee") .
R E C I T A L 'S
A. Optionor is the owner and operator of an airport known
as Palm Springs Municipal Airport, situated in .the City of Palm
Springs, county of Riverside, State of California, and in
particular, certain property ,(the "Property") consisting of
approximately five (5) acres more specifically described as
Parcel A on Exhibit E-1 attached hereto and incorporated herein
by this reference.
B. Optionee desires to. acquire through successive option
periods, the exclusive right to lease, without being obligated to
lease, the Property, under the specified terms and conditions as
set forth herein.
NOW, THEREFORE, the Parties hereto agree as follows:
1. APPRAISAL AND CALCULATION OF, RENT.
Prior to January 1, 1987, Optionor shall have obtained and
provided to Optionee an appraisal of the. Property and shall have
calculated the rental to be charged on the Property to be based
on such appraisal and current capitalization rates being used by
Optionor and offered to other similarly situated tenants.
2. GRANT OF OPTION.
Optionor hereby grants to Optionee the exclusive right *to
lease the Property at a price and under the terms and conditions
EXNRBlT
of the Indent of Lease and Use Agxeeme.._ (the "Use Agreement'
in Exhibit "F" attached hereto, with rental„payments to be deter
mined as set out in Section 1. above.
3. OPTION PERIODS AND CONSIDERATION.
Option Period Option Payment
January 1, 1987 - December 3.1, P87 $ 6,000.00
January 1, 1988 - December 31, 1988 6,000.00
January 1, 1989 - December 31, 1989 One-half (1/2) of the
annual rental pay-
m6fits as determined
pursuant to paragraph
1 above.
January 1, 1990 - December 31, 1990 One-half (1/2) of the
annual rental pay-
ments as determined
pursuant to paragraph
1 above.
With respect to the first two option periods, the option pay-
ment for each year shall be due in a lump sum on the First day of
such option period. With respect to the second two option
periods, payment shall be made in advance on a quarterly basis
throughout the option periods.
4. EXERCISE OF SUCCESSIVE OPTION PERIODS.
Each of the option periods granted herein must be exercised
by notice to the Optionor on or before the first day of such
period, provided, however, that the exercise of each option is
conditioned on:
A. the timely payment of the applicable option considera-
tion (but Optionee shall not be considered delinquent in•
such payment or notice until fifteen (15) days after the
applicable due date);
B. the exercise of the preceding option;
C. Optionee's performance without breach of all terms and
conditions of this Agreement.
-2-
MEE/071702-EIN
5. RETENTION AN. kPPLICATION OF CONSIDERATI
In the event that any or all of the successive option periods
granted herein are not exercised, all sums paid and services
rendered Optionor by Optionee shall be retained by Optionor in
consideration of the granting of these successive options. In
the event, however, that Optionee shall exercise its option -to
enter into the Use Agreement during the term of an option period,
Optionor shall be given credit, pro rate, for a portion of the
option payment towards rental payments due under the lease agree-
ment. (By way of illustration: should Optionee, after having
paid in advance $6,000.00 for the first Option Period, exercise
its right to enter into the lease agreement on July 1, 1957,
Optionee would be given credit in the amount of $3,000.00 towards
rental payments due under the Lease Agreement.)
6. DEFAULT,.AND TERMINATION.
Each of the following events shall constitute an event of
default hereunder:
A. Optionee shall fail to meet any deadline, relating to the
- option consideration or exercise of an option period
(except that Optionee shall in all cases be given a
fifteen-day '(15-day) grace period) or meet the terms for
• lease of the Property.
B. Optionee shall fail to perform any other acts to be per-
formed pursuant to the provisions of this Agreement.
C. Optionee shall be dissolved in accordance with the pro-
visions of the California Corporations Code.
In an .event of default, this Agreement and the rights of
Optionee shall automatically and immediately terminate without
notice,
-3-
MEEJ071702-EIN
7. RECORDING. -
Upon written request by Optionee to Optionor, this Agreement
or a memorandum of this Agreement, shall be executed and acknow-
ledged by the Parties for the purpose of recording,
B. EXERCISE OF OPTION.
If Optionee is not in breach of this Agreement, it may exer-
cise this Option by execution and tender to Optionor of the Use
Agreement in the form of Exhibit "F". Optionor shall then imme-
diately' execute and deliver to Optionee an executed copy of the
Use Agreement. The term of the Use Agreement shall run from the
date of the exercise of the option to December 1.4, 2031.
i
9. RENTAL ABATEMENT ,DURING, DEVELOPMENT.
After the proper exercise of this option to lease, and during
the actual construction of improvements on the Property, the
rental payments provided in the Use Agreement shall be reduced by
fifty percent (50%) . Upon completion of each portion of the
improvements on the Property as evidenced by the filing of a
notice of completion with respect to the particular improvements,
the rental for that portion of the Property occupied by such
improvements shall resume at the rate provided for in the Use
Agreement. Notwithstanding the foregoing, in no event shall this
rent abatement provision be operative after December 31, 1990.
10. ASSIGNMENT.
This Agreement and the rights hereunder may not be assigned
or delegated by either Party without the prior written consent of
the other, which consent shall not be unreasonably withheld.
11. OTHER DOCUMENTS.
The parties hereto agree that each shall, concurrently here-
with, or at any time hereafter, on the demand of the other, exe-
cute any other documents or instruments and do or cause to be
-4-
MEE/071702-EIN
n
done any other acts and things as may be necessary or, convenient
to carry out the intents and ,purposes of this Agreement.
12, COUNTERPARTS.
This Agreement may be signed in counterpart or duplicate
copies, and any signed counterpart or duplicate copy shall be
equivalent to a signed original for all purposes.
13. NOTICES.
Any written notice to any of the parties required 'or permit-
ted under this Agreement shall be deemed to have been duly given
on the date of service if served personally on the party to whom
notice is to be given, or on the fifth (5th) day after mailing if
mailed to the party to whom .notice is to be given, by first class
certified, postage prepaid, and addressed to the addressee at the
address stated opposite his name below, or at the most recent
address, specified by written notice pursuant to this
paragraph/section.
14. ADDITIONAL DOCUMENTS.
Each party hereto agrees to execute, with acknowledgment or
affidavit, if required, any and all documents in writing which
may be necessary or expedient for the purposes of this Agreement.
15. ENTIRE AGREEMENT.
This instrument contains the entire agreement of- the parties
relating to the 'rights granted and obligations assumed in this
instrument and supersedes any and all other agreements, contracts
or understandings between the parties. Any 'oral representations
or modifications concerning this instrument shall be of no force:,
or effect unless contained in a subsequent written modification
signed by the party to be charged.
MEE/071702-e" _5
T
IN WITNESS WHEREOF, the parties hereto have�l caused these
presents to be executed on the _ar day of
1986. J
ATTEST: OPTIONOR:
CITY OF PALM SPRINGS,.CALIFORNIA
By:(
Chi Clerk By. city Aa g�� !
REVIEWED & APPROVED: iv
OPTIONEE:
JIMSAIR AVIATION SERVICES, INC.
A R VED BY THE CITY COUNCIL A California Corporation
BY NO, a3So/ 9_i->._8,b
U �
STATE OF (n
COUNTY OF L-�PJ(A.tOU ) ss.
/7
On this /(p'"7 day of LW
, 19 '8(0 , before me, tt
undersigned authority, persona ly red �I'1i.0, Ci(Y^IDI1#E,.
personally'known to me, or proved to me on the basis of satisiactor
evidence, to be the person who executed the within instrument ' a
or on behalf of the Corporation therein named, an
acknowledged to me that the Corporation executed it.
Notary Public
OFFIMLWAL
• ��DIOMMY
�
MEE/0717n9_vru
-6-
Exhibit - I
10. .k
C. "Y OV i'rlLl+{
�. _ .-..---.-. •-----•—_•-•-- L—,^2 G.CI M1viNS Fi�nl 19�,_LAI,�::-- ._,
� !1 /\CJ'tt!. [JN ♦\i21-f ri]- I�R.f;.Clif�r"J /CL:IG't G'i� T_1LC� f:iJ: La
.3;
rlcmrounp Hequ,, any, ^c:`,,.1v dimsAir Aviation Sery Inc
Consent to Encumber & Am¢
RETURN To: JUL 1 7 198q Lease
rr ((�'� ��qq�� AGREEMENT N1764
City Clerk CONSENT TG1'E77yy T&6;%CE, MO 4385, 7-5-89
Box 1786 LESSOR'S CERTIFICATE AND
Palm Springs, CA 92263 AMENDMENT TO LEASE
CJ
.= This Consent to Encumbrance, Lessor's Certificate and
Amendment to Lease ("Amendment") is made and entered into as of
the P day of .��,, 1989, by and between CITY OF PALM
SPRINGS, whose principal place of business is 3200 East
Tahquitz-McCallum Way, Palm Springs, California 92262 ("Lessor"j
and JIMSAIR AVIATION SERVICES, INC., a California corporation,
whose principal place of business is 2904 Pacific Highway,
Lindbergh Field, San Diego, California 92101 ("Lessee") with
reference to the following facts and purposes:
R E C I T A L S:
A. Lessor and Lessee are parties to that certain Indenture
of Lease and Aeronautical Concession Agreement effective December
15, 1981, a Memorandum of which was recorded on November 8, 1982,
as Instrument No. 193763, Official Records of Riverside County,
California, as amended by that certain Amendment No. 1 to
Indenture of Lease and Aeronautical Concession Agreement No.
1764, dated September 18, 19$6, and that certain Option Agreement
dated September 18, 1986, and that certain Settlement Agreement
dated September 18, 1986 (including any extensions, renewals or
permitted modifications thereof, collectively, the "Lease")
covering a portion of those certain premises known as Palm
Springs Regional Airport as more particularly described in
Exhibit "A" attached hereto and incorporated herein by reference
(the "Premises") . .
B. TEXTRON FINANCIAL CORPORATION, a Delaware corporation
("Lender") has agreed to lend the sum of up to $2,500,000.00 to
Lessee which loan will be evidenced by a promissory note and
secured, among other things, by a deed of trust (the "Leasehold
Deed of Trust") upon Lessee's leasehold estate under the-Lease.',
C. Lessee desires to obtain Lessor's specific consent to
the encumbering of the Lessee's interest in the Lease by the
Leasehold Deed of Trust pursuant to Article XI of the Lease and
for other matters relating thereto.
D. Lender intends to rely on this instrument in connection
with the extension of credit to Lessee.
NOW, THEREFORE, in consideration of the premises, the mutual
promises of the parties hereto and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged and as an inducement to Lender to make the above
loan to Lessee, Lessor and Lessee agree as follows;
zz���se
1. Representations and warranties. Lessor and Lessee do
hereby represent, warrant and certify to Lender as follows:
(a) That the documents referred to in Recital A above
are the only documents which constitute the Lease, and that the
Lease is in full force and effect and has not been modified,
changed, altered or amended in any respect.
(b) That the Lease is the only agreement between the
Lessor and Lessee affecting the Premises.
(c) That Lessee is current in the payment of any and
all rent and any other charges required to be paid by Lessee
under the Lease, including the fixed ground rent through and
including payment for the month of June, 1989, and all other
monthly rental payments and other charges through and including
payment for the month of May, 1989, and no default presently
exists under the Lease and no state of facts exists which would
constitute a default under the Lease.
(d) That the current term of the Lease expires on
December 14, 20,31,
2. Lender's Riqhts to Notice and to Cure Defaults. Lessor
and Lessee agree that so long as the Leasehold Deed of Trust
shall remain of record:
(a) The Lease shall not be amended, terminated or
modified in any way without the prior written consent of Lender.
(b) Any and all notices or other communication
required or desired to be given to either Lessor or Lessee under
the Lease shall in addition be given to Lender by certified mail
return receipt requested at Textron Financial Corporation, 10
Dorrance Street, P. 0. Box 6687, Providence, Rhode Island
02940-6687, Attention: General Counsel, with a copy to Textron
Financial Corporation, 490 Nowlin Center, Airport Freeway, Fort
Worth, Texas 67180, Attention: Vice President-Division Manager;
(c) Any notice or other communication which Lender
shall desire or is required to give to or serve upon Lessor or
Lessee shall be deemed to have been duly given or served if sent
by certified mail, return receipt requested, addressed to Lessor
and/or Lessee as follows:
Lessor: Director of Transportation
City of Palm Springs
Post Office Box 1786
Palm Springs, CA 92262
Lessee: Jimsair Aviation Services, Inc.
2904 Pacific Highway
Lindbergh Field
San Diego, CA 92101
Attn: President
-2-
(d) Lender shall have the right, but not the
obligation to cure any default by the Lessee under the Lease and
Lessor agrees to accept any performance tendered by Lender as if
Lessee had tendered such performance, provided, however, that
unless Lender otherwise agrees in writing, any performance or
partial performance by Lender under the Lease shall not
constitute an assumption of the Lessee's obligations under the
Lease.
(a) In the event that Lessee shall fail to cure a
default within the time period prescribed by the Lease, Lessor
shall give written notice to Lender of such failure to cure.
Lessor shall not terminate the Lease by reason of such default of
Lessee if Lender shall:
(1) Cure such default within ninety (90) days after
service on Lender of written notice from Lessor of (i)
Lessee's failure to cure the default within the time
period prescribed by the Lease and (ii) Lessor's
intention to terminate the Lease; or
(2) Undertake, in writing, on or before the
expiration of said ninety (90) days to perform all of
the covenants of the Lease capable of performance by
Lender. In the event of such undertaking, such default
shall be deemed cured. In the event such default is
not susceptible of being cured by Lender, such default
shall be deemed cured if Lender shall proceed in good
faith in a diligent manner to accomplish the
foreclosure of Lessee's leasehold estate under the
Leasehold Deed of Trust.
(f) Unless otherwise provided herein the exercise and
non-exercise of remedies under the Leasehold Deed of Trust are
solely at the election of Lender. If Lender agrees to exercise
any of such remedies by reason of Lessee's default under the
Lease or Leasehold Deed of Trust, Lender is not obligated to
pursue such remedies if Lessee's defaults have been corrected or
cured;
(g) Lessor and Lessee hereby waive as against Lender
and agree that Lender shall have no obligation to cure any
defaults under the Lease which by their nature are incapable of a
cure (including by way of example and not limitation, defaults by
Lessee under the Lease consisting of the bankruptcy of Lessee, an
unpermitted assignment, transfer or sublease of the Lease, an
unpermitted pledge, hypothecation, surrender or encumbrance of
the Lease or Lessee's interest therein, a misrepresentation by
Lessee, and performance under the Lease which is discriminatory) ;
and
-3-
1 ^FV
(h) Lessee and Lessor hereby agree that Lessee's right
to cancel the Lease, pursuant to Article XII thereof, shall be
subject to Lender's consent, and any exercise or attempt to
exercise the cancellation right provided in Article XII of the
Lease without the prior written consent of Lender shall be void.
3. Lender's Right to New Lease Upon Master Lease
Termination. Subject to the provisions of Sections 4 and 5
hereof, upon any termination of the Lease for reasons other than
expiration of the lease term, Lessor shall serve upon Lender
written notice that the Lease has been terminated together with a
statement of any and all sums which would at that time be due
under the Lease but for such termination, and of all other
defaults, if any, under the Lease then known to Lessor. Lender
shall thereupon have the option, in its sole discretion, to
obtain a new lease in accordance with and upon the following
terms and conditions:
" Upon the written request of Lender, within thirty (30) days
after service of such notice that the Lease has been terminated,
Lessor shall enter into anew lease of the leased premises with
Lender, or its designee, as follows:
Such new lease shall be entered into at the reasonable cost
of the lessee thereunder, shall be effective as at the date of
termination of the Lease, and shall be for the remainder of the
term of the Lease and upon all the agreements, terms, covenants
and conditions of the Lease as amended herein, including any
applicable rights of renewal, except that the rent payable
thereunder shall be determined based upon the then current going
rate for such rent as determined from time to time by Lessor for
fixed based operators of other comparable airport properties.
Such new lease 'shall require the lessee to perform any
unfulfilled obligation of Lessee under the Lease which is
reasonably susceptible of being performed by such lessee. Upon
the execution of such new lease, the lessee named therein shall
pay any and all sums which would at the time of the execution be
due, and shall pay all expenses, including reasonable counsel
fees, court costs and disbursements incurred by Lessor in
connection with such defaults and termination, the ,recovery of
possession of said premises, and the preparation, execution and
delivery of such new lease. Upon the execution of such new
lease, Lessor shall allow to the lessee named therein, and such
lessee shall be entitled to, an adjustment in an amount equal to
the net income derived by Lessor from the leased premises during
the period from the date of termination of the Lease to the date
of execution of such new lease.
4. Enforcement of Leasehold Trust Deed, Assiqnabilitv of
Master Lease. Upon the exercise of any of the remedies contained
in the Leasehold Deed of Trust, such that the interest of Lessee
is foreclosed upon, sold, transferred, acquired by or otherwise
terminated by Lender (collectively, the "Default Remedies") ,
Lessor agrees:
_4
(a) , That any such foreclosure, termination, sale,
assignment or transfer of Lessee's interest in the Lease shall
not terminate the Lease, but the Lease shall be fully assignable
without the further consent or approval of Lessor to any one or
more of the following: (1) the purchaser or transferee of
Lessee's leasehold estate under or pursuant to the Default
Remedies provided by the Leasehold Deed of Trust; (2) any
purchaser or transferee from Lender; or (3) Lender;
(b) To execute such reasonable amendments to the Lease
or instruments as may be necessary to evidence or effectuate the
transfer described in Paragraph 4(a) above; and
(c) Upon the request of the purchaser or transferee
described in Paragraph 4(a) above or Lender, to execute a new
lease with such transferee or Lender upon the same terms and
conditions as the Lease, as amended hereby.
S. Rejection: No Termination Upon Lender Assumption and
Cure of Defaults. If the Lessee shall reject the Lease pursuant
to Section 365(a) of the Bankruptcy Code, 11 U.S-C. § 365(a) , the
Lessor shall serve on the Lender written notice of such
rejection, together with a statement of all sums at the time due
under the Lease (without giving effect to any acceleration) , and
of all other defaults under the Lease then known to the Lessor.
Lender shall have the right,' but not the obligation, to serve on
the Lessor within ten (10) days after service of the notice
provided for in the preceding sentence, a notice that the Lender
elects to (a) assume the Lease, and (b) cure all defaults.
outstanding thereunder either '(x) concurrently with such
assumption as to defaults in the payment of money, or (y) within
ninety days after the date of such assumption as to other
defaults except defaults of the type specified in Section
365(b) (2) of the Bankruptcy Code, 11 U.S.C. § 365(b) (2) . If
Lender serves the notice provided for in the preceding sentence,
then, as between the Lessor and Lender (1) the rejection of the
Lease by the Lessee shall not constitute a termination of the
Lease, (2) Lender may assume the obligations of the Lessee under
the Lease without any instrument of assignment or transfer from
the Lessee, (3) Lender's rights under the Lease shall be free and
clear of all rights, claims and encumbrances of or in respect of
the Lessee, and (4) Lender shall consummate the assumption of the
Lease and the payment of the amounts payable by it to the Lessor
pursuant to this section at a closing to be held at the business
offices at the leased premises on the tenth (loth) business day
after Lender shall have served the notice hereinabove provided
for.
6. Lj.mitation of Lender's Liability Under Lease. Except
as may otherwise be agreed in writing by Lender with Lessor and
except for such period of time as Lender is actually the owner of
the lessee's interest in the Lease, in no event shall Lender be
-5-
liable for any of the lessee obligations under the Lease. In the
event that Lender shall at any time hold the lessee's interest
under the Lease or any new lease entered into in replacement
thereof, then, upon any sale, transfer or assignment thereof by
Lender (which shall be in accordance with the terms hereof) ,
Lessor agrees that such transfer shall automatically release
Lender from any liability under the Lease or any successor lease
occurring after the date of such sale, transfer or assignment.
7. Successors. This Amendment is binding upon and inures
to the benefit of the parties hereto, their successors and
assigns,, and including specifically Lender and its successors and
assigns.
S. Airport Rules. Notwithstanding anything to the
contrary contained herein, any person acquiring the leasehold
interest of Lessee from Lender shall, as a condition precedent to
the enjoyment of the leasehold estate, acknowledge and agree to
be bound by all rules and regulations of the Palm springs
Regional Airport.
9. Extensions of Time periods. Notwithstanding anything
to the contrary contained herein, any time periods within which
Lender is required to act shall be extended by a period equal to
the time Lender is restrained from exercising its remedies under
the Leasehold Deed of Trust ,pursuant to the automatic or any
other stay provision or order or injunction issued or in force
pursuant to the Federal Bankruptcy code as now or hereafter in
effect.
10. Assignment of Subleases. Effective upon the
commencement of the term of any new lease entered into pursuant
to Sections 3 or 5 above, all subleases shall be assigned and
transferred without recourse by Lessor to the lessee under such
new lease, and all moneys on deposit with Lessor or any trustee
holding insurance proceeds for use in repair or replacement of
leasehold improvements, which Lessee would have been entitled to
use but for the termination or expiration of the Lease may be
used by the lessee under such new lease for the purposes of and
in accordance with the provisions of such new lease.
ll. No Merger. So long as the Deed of Trust is in
existence, and unless otherwise expressly consented to in
writing, the fee title to the Premises and the leasehold estate
of Lessee created by the Lease shall not merge, but shall remain
separate and distinct, notwithstanding the acquisition of the fee
title and the leasehold estate by Lessor or Lessee or by a third
party, by purchase or otherwise.
12. Inconsistent Terms. This Amendment shall constitute a
Part of the Lease. Lessor and Lessee acknowledge and agree that
the Lease remains in full force and effect unmodified, except as
-6-
herein provided, and that the terms and provisions of this
Amendment shall prevail over any term, covenant, agreement or
provision in the Lease contrary or inconsistent with the terms of
this Amendment.
13. Captions. Captions are for reference only.
14. No Fee Mortgage. The foregoing provisions do not
give any person the right to mortgage, hypothecate or otherwise
encumber or cause any lien, to be placed upon the fee .estate of
Lessor, nor shall the foregoing provisions in any event be
construed as resulting in a subordination in whole or in part of
the fee estate of Lessor to any indebtedness of Lessee.
15. Public Works Assessment. Lessee agrees to pay
public works assessments for improvements to the Gene Autry Trail
frontage of Parcels 2 and 3 of Jimsair's Leasehold, and further
agrees to pay similar assessments for Parcel 9 if Lessee
exercises the option to lease said parcel.
IN WITNESS WHEREOF, the parties hereto have hereby set
their hands the day and year first above written.
"Lessor"
CITY OF PALM SPRINGS,
ATTEST: CALIFORNIA
By:
City Clerk �,;r,j,,,City Manager
c
REVIEn •,e..APPROVED:
''� �' `1 a• 'r iu
It "Lessee"
JIMSAIR AVIATION SERVICES, INC.
a California corporation
A i'1Yt•:J'i t�J dY 7r;•€�'.''h'Y ;i `�i ^ ^
BY RES, No. '`ir')�,.� tl,t `.n,���� By
Title: P, Presidents_`
STATE OF -Ci-II�C4 CL ) SILVIA PROVEN�ZANO
pp� ss: :. Notary Pubtle-cm4fam4
COUNTY OF 4ari�� J ) SAN DIEGO COUNTY
On �LL� `7 pYCamm.Ems.Nw.12.7971
` � , 1989 per GiSa77.p'3pp�'dY'ard'�Y'La2 e, a
notary pubp c, -S.F '3ro.co ma�-!e , who acknowledged that
he executed the above instrument.
�, L_ L i P
(signature)
STATE OF CALIFORNIA)
ss.
COUNTY OF RIVRRSIDE)
That portion of the Southeast 1/4 of Section 18, Township 4;South, Range 5
East, San Bernardino Base and Meridian, in the City of Palm Springs, County of
Riverside, State of California, described as follows:
Commencing at the Southeast corner of said Section 18, said point being the
point of intersection of the centerline of Ramon Road and Bogie Road; thence
North 0017'49" West, along the centerline of Bogie Road, being the East line of
said Section 18, a distance of 63.03 feet to the beginning of a tangent curve
concave Southwesterly, having a radius of 4850.00 feet; thence Northwesterly .
along the arc of said curve, through a central angle of 26031'24", a distance
of 2245.16 feet to a point on the arc of, said curve, a radial sine passing
through said point bears North 63°10'47" East; thence South 63"10'47" West,
along said radial line a distance of 50.00 feet to the True Point of Beginning;
said point being hereinafter known and designated as Point "A"; thence
continuing South 63"10'.47" West, along said radial line, a distance of 489.05
feet; thence North 36032'13" West, a distance of 1581.47 feet; thence North
53°27'47" East, a distance of 550.88 feet to a point on the Southwesterly
right-of-way line of Bogie.Road; thence South 36032'08" East, along the
Southerly right-of-way line of said Bogie Road, a distance of 853.99 feet to
the beginning of a tangent curve concave Southwesterly, having a radius of 4800
feet; thence Southeasterly along the arc of said curve, through a central angle
of 9"42'55", a distance of 813.90 feet to the True Point of Beginning,
containing 20.16 acres, more or less.
PARCEL 2
That portion of the Southeast 1/4 of Section 18, Township 4 South, Range 5
East, San Bernardino Base and Meridian, in the City of Palm Springs, County of
Riverside, State of California, described as follows:
Beginning at the point described above in Parcel 1 as Point "A"; thence South
63"10'47" West, a distance of,489.05 feet; thence South 36032'13" East a
distance of 967.42 feet; thence North 75°12'39" East, a distance of 225.36'feet
to a point on the arc of a curve concave Southwesterly, having a radius of 4800
feet, a radial line passing through said point bears North 75012'39" East;
thence Northwesterly along the arc of said curve, through a central angle of
12"01'52", a distance of 1007.90 feet to the Point of Beginning, containing
8.35 acres, more or less.
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S. E. 1/4
SECTION 18
T. 4.S .R. 5 E.
S. B. B. 81 M. 4 '
p
RAMON RD. _ N 0'17 49'W
CITY OF PALM SPRINGS
EPARTMENT OF COMMUNITY DEVELOPMENT ENGINEERING 6IV.,IS ION
LEASE PLAT
A LEASE OFA PORTION OF AIRPORT PROPERTY DESIGN BY: SCALE: FILE Nz:
ADJACENT TO BOGIE ROAD,SECTION 18, F.O.M. 1=400' R/ W
T. 4 S., R. 5 E„ S.•B. B. B M. CHECKED BY: DWG. NQ: SHEET No
31 1 DF I
PARCEL 3
THAT PORTION OF THE NORTHEAST $ OF SECTION 18, T45, R5E,
S.B.M. , IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE.
OF CALIFORNIA, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHEAST CORNER OF SAID SECTION 18, SAID
POINT BEING THE POINT OF INTERSECTION OF THE CENTERLINE OF R. MON
ROAD AND GENE AUTRY TRAIL.
THENCE NORTH 0017'49" WEST, ALONG THE CENTERLINE OF GENE
AUTRY TRAIL, BEING THE EAST LINE OF SAID SECTION 18, A DISTPNC=
OF 63.03 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE SOUTH-
WESTERLY, HAVING A RADIU5 OF 4850.00 FEET.
THENCE NORTHWESTERLY, ALONG THE ARC OF SAID CURVE, THRU A
CENTRAL ANGLE OF 36014'02", A DISTANCE OF 3067.14 FEET.
THENCE NORTH 36'31'51" WEST, TANGENT TO LAST MENTIONED CLRVE,
ALONG THE CENTERLINE OF SAID GENE AUTRY TRAIL, A DISTANCE O'-
853. 99 FEET.
THENCE SOUTH 53027'.47" WEST, A DISTANCE OF 50.00 FEET TO THE
SOLTnWESTERLY RIGHT OF WAY-OF GENE AUTRY TRAIL. SAID POINT IS
THE TRUE POINT OF BEGINNING. THENCE CONTINUING SOUTH 53027'47"
LEST, A DISTANCE OF 550.88 FEET.
THENCE NORTH 36031'51" WEST, PARALLEL TO THE CEITERLINE OF
GENE AUTRY TRAIL, A DISTANCE OF 395.37 FEET.
THENCE NORTH 53027147" EAST, A DISTANCE OF 550.83 FEET TO
A POINT ON THE SOUTHWESTERLY RIGHT OF WAY OF GENE AUTRY TRAIL,
BEING 50.00 FEET FROM CENTERLINE, AS MEASURED AT RIGHT ANGLES_
THENCE SOUTH 36031'51" EAST, ALONG SAID SOUTHWESTERLY RIGHT
OF WAY LINE, A DISTANCE OF 395.37 FEET TO THE TRUE POINT O:
BEGINNING.
SAID DESCRIPTION CONTAINS 5.00 ACRES.
CITY OF PALS! SPRINGS
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JIMSMIR
AVIATION SERVIC N
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CITY OF PALPf SPRINGS
COUHUNITY OEC",LOPME%T
I
AMENDMENT NO.. l
to
- INDENTURE OF LEASE
AND AERONAUTICAL CONCESSION AGREEMENT"No. 17614
WHEREAS, The City of Palm Springs, California, hereinafter
called "CITY" or' ."LESSOR", and JIMSAIR AVIATION SERVICES, INC. ,
hereinafter called "LESSEE" or "JIMSAIR", entered into Lease
Agreement No. 1764, effective December 15, 1981; and
WHEREAS, Lessor and Lessee mutually desire to lease an addi-
tional five (5) acres;
NOW, THEREFORE, the parties hereto mutually agree as follows:
Paragraph "1" of ARTICLE I - TERM, is hereby amended to read
as follows:
"l. The term of this Agreement shall be for a period of
fifty years, beginning December 15, 1981, and ending
December 14, 2031, unless sooner terminated, as provided
for in Article XIII herein."
Paragraphs "1" through "5" of ARTICLE II - RENTAL AND OTHER
PAYMENTS', are hereby amended to read as follows:
"1. Leased.Premises:
"Parcel 1: . Lessee agrees to pay to Lessor as
rental for the land, as shown and described as 'Parcel
1' on attached Exhibit "A", and containing approximately
20-,16 acres, for the first five (5) years of this Lease,
Three Hundred Sixty-two Thousand Eight Hundred Eighty
Dollars ($362,880) , payable monthly in advance in the
amount of Six Thousand Forty-eight Dollars ($6,048) per
month, or such other amounts as are set forth in the
construction schedule, Exhibit "H" attached hereto and
made a part hereof for all purposes. '
EXHIBIT�-
a 0
"Parcel 3: Lessee agrees to pay to Lessor, as
rental for the land, shown and described as 'Parcel 3'
on attached Exhibit "C", and containing approximately
5,00 acres, for the first five: (5) years of this Lease,
monthly in advance, the amount of One Thousand ,Five
Hundred Dollars ($1,500) per nonth except that rental
will be reduced by fifty perry,^1t (50%) until improve-
ments are completed on this parcel or expiration of the
first five (5) years of the lease.
"For the remainder of th1:. r,ease, in equal monthly
installments, in advance, an amount of money to be
determined by revising the first five (5) years' rent,
as set forth in the above paragraphs, as follows:
"The rentals shall be revised, effctive the begin-
ning of the Sixth (6th) , Eleventh ( 'lth), Sixteenth
(16th), and every five (5) years thereat""-er based on the
change in Cost of Living Index. For the purposes of
this computation, it is agreed that the Consumer Price
Index for the month ofSeptember 1981 is the base or one
hundred percent (100}). The Cost of Living Index to be
used is that reflected by the Consumer Price Index, all
items, Los Angeles-Long Beach-Anaheim, (1967 equal 100)
published by the Bureau of Labor Statistics of the U.S.
Department of Labor. If, for any reason whatsoever,
there is any change in the method of calculation or
formulation of said price index, or if that index shad
be no longer published, then another index generally
recognized as authoritative shall be substituted by
agreement. In any event, the base used by the new index _
shall be reconciled to the 1967 index.
"The rentals set out hereinabove shall be payable
on the first day of each and every month throughout the
term of this Agreement.
-2-
ME8/071702XXD
"Lessee ackAdWledges that the Westerly sixty (60)
feet of Parcel 3, as shown on Exhibit "C", are desig-
nated in the Master Plan as a taxiway; and, as such,
shall revert to the City for taxiway use, without cost,
upon one hundred eighty (180) days' notice, provided
that Jimsair shall retain a non-exclusive easement over
such property.
112. Aviation, Retail Fuel and Oil Sales: Lessee
agrees to 'pay Lessor, on or before the (twentieth (20th)
day of each month, an amount as c-a,culated , by a
mutually-agreed-upon rate schedule (the "Rate
Schedule") , a per-gallon fee for all avi._,tion fuel pur-
chased by, or delivered to, the Lessee -,' the Airport,
annually. The Rate Schedule, and ,;ray amendments
thereto, pursuant to Article II, Paragraph 5, shall be
deemed a part of this Agreement. Lessee further agrees
to pay Lessor, according to the Rate Schedule, a per-
gallon fee on all aviation oil purchased by, or deliv-
ered to, Lessee at the Airport.
"In this regard, it is agreed that all aviation
fuel received by Lessee, and actually delivered by .
Lessee to regularly-scheduled airlines operating under
contract with Lessor, shall not be subject to such pay-
ment. It is agreed that the total gallonage-delivered
to, or purchased by, Lessee each month, other than fuel
delivered to regularly-scheduled airlines operating
under contract with Lessor, as described in Article IIi,
Paragraph 2 hereof, shall be reduced by two percent (2%)
before computing charges, as a maximum loss allowance
from any, and all causes. ,
"Lessee agrees that it will instruct all of his
fuel suppliers to promptly furnish a duplicate copy of
all invoices and/or delivery receipts to the City.
Lessee agrees to fully comply with all standards related
to fuel sales, as adopted by the City, as regards safety
-3_
MEE/071702XXD
and standards of service: Lessee further agrees that it
will adopt and maintain retail sales prices for aviation
fuels which are competitive with other trunk line air
carrier airports within a sixty-five (65) mile radius of
the Palm Springs Airport.
113. . In,to-plane. Fuel , and Oil Sales: The Lessee
will pay the Lessor, each calendar quarter, according to
the Rate Schedule, a fee for each jallon of aviation
fuel delivered into airlines or other contract pur-
chasers, as described in Article 1I1, Paragraph 2.
114. Automotive Retail Fuel and Oil ales: Lessee
agrees to pay Lessor, on or before the twentieth (20th)
day of each month, according to the Rate Schedule, a
per-gallon fee on all automotive fuel purchased by, or
delivered to, Lessee at the Airport, and on all auto-
motive oil purchased by, or delivered to, Lessee at the
Airport during the immediately-preceding month, pro-
vided, however, that said fuel flowage fee for the
period from the effective date of this. Lease and until
October 31, 1983, shall be three cents (S,03) per
gallon, and thereafter shall be adjusted pursuant to
Article II, Paragraph 5.
"5. Renegotiation. It is specifically agreed that
the fuel gallonage fees, as set out in Paragraphs 2, 3
and 4 above, shall be renegotiated effective the first
day of September, 1986, and thereafter every five (5)
years on said renegotiation anniversary date. Such
renegotiated fees shall be limited in each renegotiation
period, to a maximum increase of not more than twenty-
five percent (25%) ."
Except as expressly herein modified, the terms, covenants and
conditions of Agreement No. 1764 are hereby ratified, and shall
continue in full force and effect.
-4-
.MEEy071702x%D 7
IN WITNESS WHEREOF, the parties hereto have caused these
presents to be executed on the day of ,
1986.
ATTEST. CITY OF PALM SPRINGS, CALIFORNIA
By.
City Clerk , City Manager
REVIEWED AND APPROVED „
JIMSAIR AVIATION SERVICES, INC.
By<^� ^`
STATE OF e/JQ,O.t,{�AZ,L>L_L )
COUNTY OF /S uu�UPAAIONf jj ) ss
On this Apa day of �QQ,Q�21k.�30/1 1986 before me, the Under-
signed authority, personalhy appeared -I {`Pt 'Bdl(o-fODr
personally,known to me, or proved to me on the basis of satisfactory
evidence, to be the person who. executed the within instrument as
or on behalf of the Corporation therein named,
and acknowle8ged to me that the Corporation executed it.
OFFIOUI.SE/J. �„¢/�
BANDpA f.SIM WOWS
Ndt�ry PUNW-calSo ". No ary Public
RIVERSIDEOOUN{Y
MYCDm .Era.Apr,29.IWO
MEE/071702XXD
5.�AC.
40
JIMSAIR
F AVIATION SERVIC N
INC.
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CITY OF PALM SPRINGS
'ARIWENT OF CO6tHUN1TY DEVELOPMENT E: N I4E_ r :51Ot:
F�19iT �
Tire investment to date of the facilities constructed ar= :
Terminal Building . . . . . . . . . . $1,249,6_3
Hangars . . . . . . . . . 1,357,415
Fuel storage facility . . . . . . . . . 243,4£2
Ramp and parking lot . . . . . . . . . . 042,736
Underground utilities . . . . . . 125,44'r
Landscaping security fe::cing,
lighting . . . . 99, .. �
Gas Station/beli/Car Wash (under
ccnstructicn . . . . . _ 53_1 -.-
TOTAL $4 , 54'),, 327
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PARCEL 3
THAT PORTION OF THE NORTHEAST i OF SECTION 18, T4S, R5E,
S.B.M. , IN THE CITY OF PALM. SPRINGS, COUNTY OF RIVERSIDE, STATE
OF CALIFORNIA, DESCRIBED AS FOLLOWS.,
COMMENCING AT THE SOUTHEAST CORNER OF SAID SECTION 18, SAID
POINT BEING THE POINT OF INTERSECTION OF THE CENTERLINE OF RAY-ON
ROAD AND GENE AUTRY TRAIL.
THENCE NORTH.O'17'49" WEST, ALONG THE CENTERLINE OF GENE
AMY TRAIL, ,BEING THE EAST LINE OF SAID SECTION 18, A DISTANCE
OF 63.03 FEET TO THE BEGINNING OF' A TANGENT CURVE, CONCAVE SOUTH-
WESTERLY, HAVING A RADI-. OF 4850.00 FEET,
THENCE NORTh' 7E STERLY, ALONG THE ARC OF SAID CURVE, THRU A
CENTRAL AN= OF 36014'02", A DIST^Y'CE OF 3067.14 FEET.
T:ONCE NORTH 36031'51" WEST, TANGENT TO LAST MENTIONED CURVE,
ALONG THE CENTERLINE OF SAID GENE AUTRY TRAIL, A LISTANCE OF
853.99 .FEET.
THE'U SOUTH 53027'A7" WEST,, A DISTANCE OF 50.00 FEET TO THE
SQLiHWESTERLY RIGHT OF WAY'OF GEIc AUTRY TRAIL. SAID POINT IS
T:W TRUE POINT OF BEGINNING. THENCE CONTINUING SOUTH 53°27'47"
WEST, A DISTANCE OF 550,68 FEET.
THENCE NORTH 36031'51" WEST, PARALLEL TO THE GE:dTE3LL'.iE OF
GENE AUTRY' TRAIL, A DISTANCE OF 395.37 FEET.
THENCE NORTH 53027'47" EAST, A DISTANCE OF 550.88 FEET TO
A POINT ON THE SOUTn1ESTERLY RIGHT OF WAY OF GENE AUTRY TRAIL,
BEING 50.00 FEET FROM CENTERLINE, AS MEASURED AT RIGHT ANGLES.
THENCE SOUTH 36631'51" E.'.ST, ALONG SAID SOUTHWESTERLY RIGHT
-07 4:AY LINE, A DISTANCE OF 395.37 FEET TO THE TRUE POINT OF
BEGINNING.
SAID DESCRIPTION CONTAINS 5.00 ACRES.
CITY OF PALM SPRINGS
,h"; NT OF COWNUNITY DEVELOPMENT ENGINEERING ORl141r!PIJ -
OPTION AGREEMENT 176�
OPTION AGREEMENT
THIS OPTION AGREEMENT is ma-"e this /Lkil day of
r�p,crr:c re,IL.u[J, 1986, by and between "'FIE CITY OF PALM SPRINGS,
CALIFORNIA ("Optionor"), and JIMSAIR `VIATION SERVICES, INC., a
California corporation, having its usu. I place" of business at the
Palm Springs Municipal Airport, Palm. Springs, California, and
whose permanent mailing address is Lirlbergh Field International
Airport, San Diego, California ("Optics =") .
R E C I T A L
A. Optionor is the owner and operator c' an airport known
as Palm Springs Municipal Airport, situated i the City of Palm
Springs, County of Riverside, State of Ca ifornia, and in
particular, certain property (the "Property") consisting of
approximately five (5) acres more specifica) ',7 described as
Parcel 4 on Exhibit E-1 attached hereto and incorporated herein
by this, reference.
B. Optionee desires to acquire through successive option
periods, the exclusive right to lease, without being obligated to
lease, the Property, under the specified terms and conditions as
set forth herein.
• NOW, THEREFORE, the Parties hereto agree as follows;
1. APPRAISAL AND CALCULATION OF RENT.
Prior to January 1, 1987, Optionor shall have obtained and
provided to Optionee an appraisal of the Property .and shall have
calculated the rental to be charged on the Property to be based
on such appraisal and current capitalization rates being used by
Optionor and offered to other similarly situated tenants:
2. GRANT OF OPTION.
Optionor hereby grants to Optionee the exclusive right *to
lease the Property at a price and under the terms and conditions
EXHIBI
'S�n.hl 1cnY vlla f
of the indent of Lease and Use Agreeme.., (the "Use Agreement")
In Exhibit "F" attached hereto, with rental payments to be deter-
mined as set out in Section 1. abovr,.
3. OPTION PERIODS AND CONSIDERATION.
Option Period Option„Payment
January 1, 1987 - December 3.1, .)1' 87 $ 6,000.00
January 1, 1988 - December 31, 1' tS 6,000.00
January 1, 1989 - December 31, 1919 One-half (1/2) of the
annual rental pay-
ments as determined
pursuant to paragraph
1 above.
January 1, 1990 - December 31, 1990 One-half (1/2) of the
annual rental pay-
ments as determined
pursuant to paragraph
1 above.
With respect to the first two option pet ds, the option pay-
ment for each year shall be due in a lump sum n the first day of
such option period. With respect to the second two option
periods, payment shall be made in advance on a quarterly basis
throughout the option periods.
9, EXERCISE ,OF SUCCESSIVE OPTION PERIODS.
Each of the option periods granted herein must be exercised
by notice to the Optionor on or before the first day of Such
period, provided, however, that the exercise of each option is
conditioned on:
A. the timely payment of the applicable option considera-
tion (but Optionee shall not be considered delinquent in
such payment or notice until fifteen (15) days after the
applicable due date);
S. the exercise of the preceding option;
C. Optionee`s performance without breach of all terms and
conditions of this Agreement.
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MEE/071702-EIN '
S. RETENTION AN. kPPLICATION.OF CON5IDERAT1
In the event that any or all of the successive option periods
granted herein are not exercised, all sums paid and services
rendered Optionor by Optionee shall be retained by Optionor in
consideration of the granting of these successive options. In
the event, however, that Optionee shall exercise its option -to
enter into the Use Agreement during the term of an option period,
Optionor shall be given credit, pro rata, for .a portion of the -
option payment towards rental payments due under the lease agree-
ment. (By way 'of illustration: should Optionee, after having
paid in advance $6,000.00 for the first Option Period, exercise
its right to enter into the lease agreement on July 1, 1987,
Optionee would be given credit in the amount of $3,000.00 towards
rental payments due under the Lease Agreement.)
6. DEFAULT AND TERMINATION.
Each of the following events shall constitute an event of
default hereunder:
A. Optionee shall fail .to meet any deadline relating to the
option consideration or exercise of an option period
(except that Optionee shall in all cases be given a
fifteen-day •(15-day) grace period) or meet the terms for
* lease of the Property.
B. Optionee shall fail to perform any other acts to be per-
formed pursuant to the provisions of this Agreement.
C. Optionee shall be dissolved in accordance with the pro-
visions of the California Corporations Code.
In an event of default, this Agreement and the rights of
Optionee shall automatically and immediately terminate without
notice.
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Mv /071702-EIN . "
I
I
7. RECORDING. -
upon written request by Optionee to Optionor, this Agreement
or a memorandum of this Agreement, shall be executed and acknow-
ledged by the Parties for the purpose of recording.
B. EXERCISE OF OPTION.
If Optionee is not in breach of this Agreement,. it may exer-
cise this Option by execution and tender to Optionor of the Use
Agreement in the form of Exhibit "F", Optionor shall then imme-
diately execute and deliver to Optionee an executed copy of the
Use Agreement. The term of the Use Agreement shall run from the
date of the exercise of the option to December 14, 2031.
9. RENTAL ABATEMENT DURING DEVELOPMENT.
After the proper, exercise of this option to lease, and during
the actual construction of improvements on the Property, the
rental payments provided in the Use Agreement shall be reduced by
fifty percent (50%) . Upon completion of each portion of the
improvements on the Property as evidenced by the filing of a
notice of completion with respect to the particular improvements,
the rental for that portion of the Property occupied by such
improvements shall resume at the rate provided for in the Use
Agreement. Notwithstanding the foregoing, in no event shall this
rent abatement provision be operative after December 31, 1990.
10. ASSIGNMENT.
This Agreement and the rights hereunder may not be assigned
or delegated by either Party without the prior written consent of
the other, which consent shall not be unreasonably withheld.
11. OTHER DOCUMENTS.
The parties hereto agree that each shall, concurrently here-
with, or at any time hereafter, on the demand of the other,, exe-
cute any other documents or instruments and d6 or cause to be
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MEE/071702-EIN
done any other acts and things as may be necessary or. convenient
to carry out the intents and purposes of this Agreement.
12. COUNTERPARTS.
This Agreement may be signed in counterpart or duplicate
copies, and any signed counterpart or duplicate copy shall be
equivalent to a signed original for all purposes.
13. NOTICES.
Any written notice to any of the parties required or permit-
ted under this Agreement shall be deemed to have been duly given
on the date of service if served personally on the party to whom
notice is to be given, or on the fifth (5th) day after mailing if
mailed to the party to whom notice is to be given, by first class
certified, postage prepaid, and addressed to the addressee at the
address stated opposite his name below, or at the most recent
address, specified by written notice pursuant to this
paragraph/section.
14. ADDITIONAL DOCUMENTS.
Each party hereto agrees to execute, with acknowledgment or
affidavit, if required, any and all documents in writing which
may be necessary or expedient for the purposes of this Agreement.
15. ENTIRE AGREEMENT.
This instrument contains the entire agreement of the parties
relating to the 'rights granted and obligations assumed in this
instrument -and supersedes any and all other agreements, contracts
or understandings between the parties. Any oral representations
or modifications concerning this instrument shall be of no force''
or effect unless contained in a subsequent written modification
signed by the party to be charged.
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M£E/071702-PTni
IN WITNESS WHEREOF, the parties hereto. have caused these
presents to be executed on the -/—/— day of
1986.
ATTEST; OPTIONOR:
CITY OF PALM SPRINGS, CALIFORNIA
Byt(
Chi Cl.e rk By. ! J/
City Tt ahager
REVIEWED & APPROVED: _
OPTIONEE:
JIMSAIR AVIATION SERVICES, INC.
A ,P�QVEDBY THE CITY COUNCIL A California Corporation
BYE NO. 0 90
STATE OF 1,,,(I.,c. 0 01 )
l/ u _� ) ss.
COUNTY OF ) U.'P/l�Cl1O(Z ) o
On this �(P� day of -4 , 19 Sl0 , before me, the
undersigned authority, personally a peared I�I'Ii0- c1f'r7D/yle, ,
personally known to me, or proved to me on the, basis .of satisfactory
evidence, to be the person who executed the within instrument as
or on behalf of the Corporation therein named, and
acknowledged to me that the Corporation executed it.
Notary Pttbiicc
:'-Ilul LRAM.
' � �, :' fuVE0lN13E CC01n'Y
r My CaMufiP.I.p.T�,1VP)�
MEE/071702-EIN
Exhibit IT- I _
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Minute Order 107
September 17, 19
SETTLEMENT AEREEI
#1764A
SETTLEMENT AGREEMENT
This Settlement Agreement is entered into this /, day of
lel, by and between THE CITY OF PALM SPRINGS, CALIFORNIA
(the "City") and JIMSAIR AVIATION SERVICES, INC, a California
corporation (."Jimsair") .
RECITALS
A. On or about November 18, 1981, the City Council for the
City approved and entered into that certain Indenture of Lease
and Aeronautical Concession Agreement (the "Lease Agreement") for
approximately twenty acres of land having an c`fective date of
December 15, 1981. A true and correct copy of the Lease
Agreement is attached hereto as Exhibit "A" and incorporated
herein by this reference.
B. Subsequent to entering into the Lease Agreement, certain
disputes have arisen with respect to the rights and liabilities
of the parties. In particular, Jimsair has paid to the City the
sum of approximately Ninety-Four Thousand Dollars ($94,000.00) as
• flood control fees, and made an additional expenditure of
approximately One Hundred Eighty Thousand Dollars ($180,000:00)
in off-site flood improvements for which Jimsair believes it is
entitled to reimbursement pursuant to City ordinance. The City
asserts that no such reimbursement is due.
In addition, costs in the amount of approximately Sixty-Seven
Thousand Dollars ($67;000.00) have been incurred by the City in
connection with construction of two taxiways at the Airport which
the City asserts are wholly recoverable from Jimsair under the
terms of certain letter agreements. It is Jimsair's position
that it is liable for the cost of only one taxiway (i.e. , one-
half of the total cost) according to the terms of the Lease
Agreement and understanding of the parties.
Xii iiBiTA�'
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C
Finally, Jimsair asserts that unreasonable delays and changes
in plan approvals by the City should be,cause,.Eor rent abatement
and a recovery of additional costs for regrading and engineering.
The City believes that no such relief is warranted.
In summary, the parties contend as follows:
CITY`S POSITION AMOUNT
1. Lease starts 12/l/81. Rental
payments are $3,024 per month.
Rent for 12/1/81 through 8/31/83 $ 63,504.00
2. Rent increases on 9/1/83 to $5,443
per month. Rent for 9/l/83 through
1/31/84 27,215.00
3. No relief -for architectural fees or
regrading .00
4. Jimsair owes for two taxiways 66,842.87
Total $157,561.87
Less rental payments credited
through January, 1984 ('such amount
is deposited by Jimsair and sub-
ject to verification) -(30,240.00)
City claims Jimsair owes it $1,27,321.87
JIMSAIR'S POSITION AMOUNT
1. Lease starts 6/1/82 due to
unreasonable delays by City $ 27,216.00
2. Flood control reimbursement 180,000.00
Engineering Fees 27,000.00
Regrading . 2,000.00
Street Improvement Bond held
by City 5,000.00
3. Jimsair owes for 1 taxiway
reimbursed to Jimsair over 20 years (,33,421.00)
Jimsair claims City owes it $207,795.00
C. The parties hereto desire to settle their differences
and resolve all matters and disputes between them.
NOW, THEREFORE, the parties hereto agree as follows:
1. Upon approval of this Agreement by the Airport
Commission and the City Council, Jimsair shall pay to the City in
settlement and satisfaction of the disputes between the parties
the sum of $30,000.00 which shall be:
14EE/071702-2 -2
• �1
(i) reduced by the amount of actual land rental
payments made by Jimsair to the City under the Lease Agreement in
excess of the $30,240.00 credited for rent accruing through
January 1984; or
(ii) increased by any shortfall between the $30,240.00
credited any shortfall and actual land rental payments made.
In no event shall the City be liable for payment -to
Jimsair under this paragraph.
2. Upon approval of this Agreement by the Airport
Commission and the City, the City shall return to Jimsair the sum
of $5,000.00 without interest held by the City as a Street
Improvement Bond.
3. Article II, paragraphs 2-4 of the Lease Agreement shall
be amended to delete any reference to specific amounts payable by
Lessee to Lessor with respect to aviation, fuel ,and oil sales.
Such amounts shall be determined by a fee schedule prepared by
the City and as mutually negotiated between the parties pursuant
to the terms of Article II, paragraph 5. Rates and amounts set
out in such fee schedules shall become part of the Lease
Agreement and subsequent changes in the rate schedule as provided
in such Article II, paragraph 5 shall become part of the Lease
Agreement without formal amendment to the Lease Agreement.
4. Jimsair agrees to give up a favorable fuel gallonage
rate fee which would remain in effect for approximately one more
year and in conformity therewith, Article ii,, paragraph '5 of the
Lease Agreement shall be deleted in its entirety and the
following shall be substituted in its stead:
"Renegotiation. It is specifically agreed
that the fuel gallonage fees set out in para-
graphs 2, 3,' and 4 above shall be renegotiated
effective the fi;st day of September, 1986,
and thereafter every five years on said rene-
gotiation anniversary date. Such renegotiated
fees shall be limited in each renegotiation
period, to a maximum increase of not more than
twenty-five percent (25%)."
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MEE/071702-B
5. Inconsideration of the extensive leasehold improvements
made by Jimsair as more specifically set out in Exhibit "B" of
this Agreement, the Lease Agreement .shall be, extended for an
additional ten-year term. In conformity therewith, Article I,
paragraph 1 of the Lease Agreement shall be deleted in its
entirety and the following shall be substituted in its stead:
111. The term of this Agreement shall be
for a ,period of fifty (50) years, beginning
December 15, 1981, and ending December 14,
2031, unless sooner terminated as provided for
in Article XIII herein."
Such amendment shall be subject to any government code limita-
tions respecting the length of lease terms.
6. The parties agree that Jimsair shall obtain automobile
fuel price parity with other fixed base operators subject to
pending renegotiations regarding the fees to be paid by such
operators.
7. It is, and has been, Jimsair's position that the City
granted to Jimsair an option on five acres of land, adjacent to
and north of the leased premises under the Lease Agreement.
Jimsair asserts that it properly exercised its option and has
made ,all required payments to obtain a lease of the additional
property. By this Agreement, the City acknowledges the existence
of Jimsair's leasehold interest effective from December 15, 1981
under the same terms and conditions of the Lease Agreement.
The "Leased Premises" as set out in various Articles of
the Lease Agreement shall include an additional 5.00 acres of
land as shown and described as Parcel 3 on Exhibit "C" of this
Agreement (the "New Leased Premises") . As additional rental for
the New Leased Premises, Jimsair shall pay the , sum of One
Thousand Five Hundred ($1,500.00) per month, or such other
amounts as set forth in Exhibit "B", paragraph 4 of the Lease
Agreement. In particular, Jimsair has paid, and will continue to
pay Seven Hundred Fifty Dollars ($750.00) per month until
improvements on the New Leased Premises are completed or
expiration of the first five years of the lease. By execution of
MEE/071702-B
,T`
.this Agreement, the City acknowledges receipt of all amounts due
as rental for the New Leased Premises up to and including the
date of execution.
8. The . foregoing changes to the 'Lease Agreement shall be
reflected in Amendment No. 1 to the Lease Agreement attached
hereto as Exhibit, "D" and incorporated herein by this reference.
Except as provided to the contrary herein, all terms and 'condi-
tions of the Lease Agreement shall remain in full force 8 effect.
9. The City shall offer to Jimsair an option (the "Option")
to lease an additional five (5) acres adjacent to the New Leased
Premises pursuant to the terms of an option agreement in the form
attached hereto as Exhibit "E" and incorporated herein by this
reference. The Option shall consist of four (4) option periods
of one (1) year each beginning January 1, 1987, Upon proper
exercise of the Option by Jimsair, the City shall be the Lessor
and Jimsair shall be the Lessee under the terms of a lease in the
form attached hereto as Exhibit "F" and incorporated herein by
this reference, with rental terms based on current appraisal of
the property and current capitalization rates being offered by
the City to other tenants.
10. In consideration of the agreement between the parties,
as provided in paragraphs 1 through 4, inclusive above, each of
the above-named parties on behalf of themselves, their descen-
dants, ancestors, dependents, heirs, executors, attorneys, admin-
istrators, assigns, agents, servants, stockholders, employees,
firms, insurance companies, officers, directors, representatives,
predecessors, successors-in-interest, co-partners and any other
person, firm, partnership, entity or corporation with whom any of
them have been affiliated, hereby, fully acquit, release and dis-
charge the other party and his or her descendants, ancestors,
dependents, heirs, attorneys, executors, administrators, assigns,
agents, servants, stockholders, employees, insurance companies,
officers, directors, representatives, predecessors, successors-
in-interest, co-partners and any other person, firm partnership,
entity or corporation with whom any of them have been affiliated
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MEE/07170Z-H
of ,and,. from .all: rights, claims, ,Pees, demands, costs, damages,
obligations, expenditures, remedies, liens, rights of arbitra-
t ion, rights of action and/or causes of action, whether compensa-
tory or punitive, of any nature whatsoever, whether known or
unknown, foreseeable or unforeseeable, and any consequences
thereof.
11. It is understood and agreed that this is a full and
final release and is intended to cover, and does cover, any and
all future damages not now known to any party claiming hereto or
which may later develop or be discovered, except that this Agree-
ment does not cover any damages or claims which may arise solely
as a result of a breach by either party of the specific provi-
sions of this Agreement.
12, It is further understood and agreed that the parties
expressly waive and assume the risk of any and ,all past, present
and future claims of which the parties do not know or suspect to
exist in their favor, whether through negligence, ignorance,
oversight, error, or for any other reason whatsoever and which,
if known, would materially affect their decision to enter into
this Agreement. Each party expressly waives all rights under
Section 1542 of the Civil Code of California and any similar laws
of the United States and of any state or territory of the United
States are expressly waived. Said Section provides as follows:
"A general release does not extend to claims
which "the creditor does not know, or suspect
to exist in his favor at the time of executing
a release, which if known by him must have
materially affected his settlement . with the
debtor."
13. In further consideration of this Agreement, each party
represents and warrants that no portion of any claim, right,
demand, cause. and/or right of action, that each party has or
might have as herein referenced, as been assigned or transferred
to any. other person, firm, partnership, entity or corporation,
whether by operation of law or ,otherwise.
MEE/07.1702-B
14. , ' it .is further understood and agreed that if any portion
of this Agreement be held null, void or unenforceable, for any
reason whatsoever, that both parties hereto may; at the sole and
express option of each of them, enforce the remaining portions of
this Agreement.
15. This Agreement contains the entire agreement of the
parties with, regard to the matters herein set forth, and shall
not be modified, except in writing, and shall be binding upon and
inure to the benefit of the executors, administrators, heirs,
successors and assigns of the parties hereto.
16. The term6. of this Agreement are contractual and are not
A mere recital. This Agreement is executed without reliance upon
any representations of any nature whatsoever of the parties, and
their attorneys, agents, servants and/or employees.
17. This Agreement has been entered into in the State
of California, County of Riverside, and shall be construed and
interpreted in accordance with the laws of California and shall
be deemed to have been made and/or performed in said State and
County.
18. Neither the execution or acceptance of this Agreement is
in ariy way ,whatsoever an admission of liability by either party
but is a compromise and/or settlement of known, unknown, prospec-
tive and/or pending claims, demands, causes of action, rights of
action and/or remedies that have been, may have been, .could have
been, or should have been or yet could be asserted to in this or
any other forum or jurisdiction.
19. Each party represents and warrants to the other that
they have carefully read this Agreement and had the contents and
legal effect hereof fully explained by legal counsel of their
choosing; that each party has the sole and exclusive power and
authority to execute this Agreement and does so of his own free
act.
20. This Agreement may be signed in counterpart or duplicate
copies, and any signed counterpart or duplicate copy shall be
equivalent to a signed original for all purposes.
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MEE/071702-B
w
21, The parties hereto agree that each shall, concurrently
herewith, or at any time hereafter, on the demand of the other,
execute any other documents or instruments and do or cause to be
done any other acts and things as may be necessary or convenient
to carry out the intents and purposes of this Agreement.
22. In the event litigation is commenced arising from or
pertaining to this Agreement or any term or provision hereto, the
prevailing party in such litigation shall be entitled to recover
its costs of suit, including reasonable attorneys' fees.
IN 'WITNESS WHEREOF, the parties hereto have caused these
presents to be executed on the /.�' day of
1986.
ATTEST::�� CITY OF PPPAAIA ,SSPPRINGS, CALIFORNIA
City "Clerk y^('/ City Manager/
REVIEWED & APPROVED
JIMSAIR AVIATION SERVICES, INC.
A ROVED BY�THE CITY COUNCIL
t 0V E c oE� .
BY . NO. 3�99 .9-✓�- �5
STATE OF �OlgOt.JUa- )
J U ) ss.
COUNTY OF /'i LUt�J1,Q. u ) �'"� o
On this / day of Q 19�-,u+y�„ , 19 o(p, before me, the
undersigned authority, personally appeared 'Phd .L"�i OR-MDtl . ,
personally known to me, or proved to me on the basis of satisfactory
evidence, to be the person who executed the within instrument as
or on behalf of the Corporation therein named,
and acknowledged to me that the Corporation execatteed it.
OFFICIALEA. L/.7 �-fCi ,�✓ J •. v� �'���
SANDRA L SIMMONS8 'N tart' Public
Nehty PiUb-CtlNomis
RIVERSIDECDUNTY
My COMM.ap.Apr 23.1990
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MEE/071702-B
CONSENT TO ENCUMBRANCE
OF GROUND LEASE INTEREST AND ESTOPPEL
This CONSENT TO ENCUNJ,I3RANCE OF GROUND LEASE INTEREST(this"Consent")
is made and entered into as of the date of September, 1999,by and among the CITY OF PALM
SPRINGS, whose principal place of business is 3200 East Tahquitz-Canyon Way, Pahn Springs,
California 92262("Lessor")and PALM SPRINGS FBO,LLC, as assignee("Assignee")having an
address of 1670 Broadway, Suite 3350, Deliver, Colorado 80202 with reference to the following
facts and purposes:
RECITALS:
A. Lessor and Signature Flight Support-California, Inc. ("Lessee") are parties to that
certain Indenture of Lease and Aeronautical Concession Agreement effective December 15, 1981,
a memorandum of which was recorded on July 11, 1989, as Instrument No. 229437. Official
Records of Riverside County,California,as amended by that certain Amendment No. 1 to Indenture
of Lease and Aeronautical Concession Agreement No. 1764, dated September 18, 1986, and that
certain Option Agreement dated September 18,4986, and that certain Settlement Agreement dated
September 18, 1986, including any extensions, renewals or permitted modifications thereof
(collectively, the "Lease") covering a portion of those certain premises known as Palm Springs
International Airport as is more particularly described in Exhibit A attached hereto and incorporated
herein by reference (the"Premises").
B. Pursuant to the Lease,Lessee owns the airport facility improvements that are a part
of the Premises during the term of the Lease (the "Improvements").
C. The Improvements and the tenant's interest in the Lease are to be conveyed to
Assignee.
D. U.S.BANK NATIONAL ASSOCIATION("Lender")has agreed to lend the sum of
up to $2,200,000.00 to Assignee in connection with the purchase by Assignee of (i) the
Improvements, and (ii) Lessee's leasehold interest under the Lease, (collectively, the"Property"),
which loan will be evidenced by a promissory note and will be secured by, among other things, a
deed of trust(the "Leasehold Deed of Trust")upon Assignee's leasehold estate under the Lease.
E. Lender desires to obtain Lessor's specific consent to (i) the purchase of the
Improvements by Assignee and assignment of Lessee's leasehold interest under the Lease to
Assignee, and (ii) the encumbering of Assignee's interest in the Lease by the Leasehold Deed of
Trust,and(iii)for other matters relating thereto,all as is required pursuant to Article XI of the Lease.
F. Lender intends to rely on this instrument in connection with the extension of credit
to Assignee.
Consent to Encumbrance or Ground Lease Interest)03.wpd
NOW, THEREFORE, in consideration of the premises, the mutual promises of the parties
hereto and for other good and valuable consideration,the receipt and sufficiency of which are hereby
acknowledged and as an inducement to Lender to make the above loan to Assignee, Lessor and
Assignee represent and agree as follows:
1. Representations and Warrants. Lessor and Assignee hereby represent,warrant and
certify to Lender as follows:
(a) (i)That the documents referred to in Recital A above are the only documents
which constitute the Lease, and (ii) that the Lease is in full force and effect and has not been
modified, changed, altered or amended in any respect.
(b) The Lease is the only agreement between the Lessor and Lessee, and/or
between Lessor and Assignee, relating to the Premises.
(c) That to Lessor's knowledge,Lessee and Assignee are current in the payment
.of any and all rent and any other charges required to be paid by Lessee and/or Assignee under the
Lease,including the fixed ground rent,which fixed ground rent has been paid,through and including
payment for the month of September, 1999, and to Lessor's knowledge,no default presently exists
under the Lease and no state of facts exists which would constitute a default under the Lease.
(d) That the current term of the Lease expires on December 14, 2031.
2. Lender's Rights to Notice and to Cure Defaults. Lessor and Assignee agree that so
long as the Leasehold Deed of Trust shall remain of record:
(a) The Lease shall not be amended,terminated(except for a default of the tenant
under the Lease) or modified in any way without the prior written consent of Lender.
(b) Any and all notices or other communication required or desired to be given
to either Lessor or Assignee under the Lease shall,in addition,be given to Lender by certified mail
returnreceipt requested at U.S.BankNational Association,918 17t'Street,Denver,Colorado 80202,
Attention: Hassan Salem or such other address as Lender may designate in writing.
(c) Any notice of other communication which Lender shall desire or is required
to give to or serve upon Lessor or Assignee shall be deemed to have been duly given or served if
delivered in accordance with Article XIX of the Lease.
(d) Lender shall have the right, but not the obligation to cure any default by the
Assignee under the Lease and Lessor agrees to accept any performance tendered by Lender as if
Assignee had tendered such performance,provided, however,that unless Lender otherwise agrees
in writing, any performance or partial performance by Lender under the Lease shall not constitute
an assumption of the Assignee's obligation wider the Lease.
Consent to Encunabiance of Ground Lease Interest.D03.wpd 2
(e) Inthe event that Assignee shall commit a default under the Lease,Lessor shall
give written notice to Lender of such default concurrently with the delivery of a notice of default to
Assignee or subsequently thereafter. Lessor shall not terminate the Lease by reason of such default
of Assignee if Lender cures such default within the times set forth in Article XI of the Lease.
(f) Unless otherwise provided herein,the exercise and non-exercise of remedies
under the Leasehold Deed of Trust are solely at the election of Lender. If Lender agrees to exercise
any of such remedies by reason of Assignee's default under the Lease or Leasehold Deed of Trust,
Lender is not obligated to pursue such remedies if Assignee's defaults have not been corrected or
cured.
(g) Assignee hereby agrees that Assignee's right to cancel the Lease,pursuant to
Article XII thereof, shall be subject to Lender's consent,and any exercise or attempt to exercise the
cancellation right provided in Article XII of the Lease without the prior written consent of Lender
shall be void.
1 Limitation of Lender's Liability Under Lease. Except as may otherwise be agreed
in writing by Lender with Lessor and except for such period of time as Lender is actually the owner
of the Lessee's interest in the Lease, in no event shall Lender be liable for any of the Lessee's
obligations under the Lease. In the event that Lender shall at any time hold Lessee's interest under
the Lease or any new lease entered into in replacement thereof, then, upon any sale, transfer of
assignment thereof by Lender(which shall be in accordance with the terms hereof), Lessor agrees
that such transfer shall automatically release Lender from any liability under the Lease or any
successor lease occurring after the date of such sale,transfer or assignment.
4. Successors. This Amendment is binding upon acid inures to the benefit of the parties
hereto,their successors and assigns,and including specifically Lender and its successors and assigns.
5. Lease and Airport Rules. Notwithstanding anything to the contrary contained herein,
any person acquiring the leasehold interest of Assignee from Lender shall,as a condition precedent
to the enjoyment of the leasehold estate, acknowledge and agree to be bound by the terms of the
Lease and all rules and regulations of the Palm Springs International Airport.
4. Extensions of Time Periods. Notwithstanding anything to the contrary contained
herein, any time periods within which Lender is required to act shall be extended by a period equal
to the time Lender is restrained from exercising its remedies under the Leasehold Deed of Trust
pursuant to the automatic or any other stay provision or order or injunction issued or in force
pursuant to the Federal Bankruptcy Code as now or hereafter in effect.
5. No Merger. So long as the Deed of Trust is in existence, and unless otherwise
expressly consented to in writing, the fee title to the Premises and the leasehold estate of Assignee
created by the Lease shall not merge, but shall remain separate and distinct, notwithstanding the
Consent to Encumbrance of Ground Lease lnterest.D03.wpd 3
acquisition of the fee title and the leasehold estate by Lessor or Assignee or by a third party, by
purchase or otherwise.
6. Inconsistent Terms. This Consent shall constitute a part of the Lease. Lessor and
Assignee acknowledge and agree that the Lease remains in full force and effect unmodified, except
as herein provided, and that the terms and provisions of the Lease shall prevail over any term,
covenants, agreement or provision in this Consent contrary or inconsistent with the terms of the
Lease.
7. Captions; Counterparts. Captions are for reference only. This Consent may be
executed in any number of identical counterparts, and each such counterpart shall be deemed a
duplicate original hereof.
8. No Fee Mortgage. The foregoing provisions do not give any person the right to
mortgage, hypothecate or otherwise encumber or cause any lien to be placed upon the fee estate of
Lessor,nor shall the foregoing provisions in any event be construed as resulting in a subordination
in whole or in part of the fee estate of Lessor to any indebtedness of Assignee.
LESSOR:
CIT I OF PALM SPRINGS, C ORNIA
By.— r
Name:
Title:
APPROVED BY THE CITY COUNCIL
ATTEST: BYRL21� NO.
City Clerk
REVIEWED &APPROVED
Rutan& Tucker
DAVID J. ALESIBRE, ESQ.
City Attorney
Consent to Encumbrance of Ground Lease Interest.D03.wpd 4
ASSIGNEE:
PALM SPRINGS FBO, LLC, a Delaware limited
liability company
By:
l�►�`
Name: Jeffrey W. Ross
Title: Manager
LENDER:
U.S. BANK NATIONAL ASSOCIATION
By:_
Name:
Title:
of Ground Lease lnterest.D03.wpd 5
ASSIGNEE:
PALM SPRINGS FBO, LLC, a Delaware limited
liability company
By:
Name:
Title:
LENDER:
U.S. BANK NATIONAL ASSOCIATION
Name: IIA--641,1 A - Sst��r
Title: Acs,(AmA Jae, F&SFJeark
of Ground Lease IaterestD03.wpd 5
6F IL
CONSENT.TO ENCUMBRANCE
OF
GROUND LEASE INTEREST AND ESTOPPEL
This CONSENT TO ENCUMBRANCE OF GROUND LEASE INTEREST ,(this
"Consent") is made and entered into as of thecday of June, 2002, by and among the CITY
OF PALM SPRINGS, whose principal place of business is 3200 East Tahquitz-Canyon Way,
Palrn Springs, California 92262 ("Lessor") and PALM SPRINGS FBO TWO, LLC,'as assignee
("Assignee") with reference to the following facts:and purposes:
RECITALS
A. Lessor and Palm .Springs FBO, LLC ("Lessee") are parties to that certain
Indenture of Lease and'Aeronautical Concession Agreement effective December 15, 1981, a
memorandum of which was recorded on July 11, 1989, as Instrument No. 229437. Official
Records of Riverside County, California, as amended by that certain Amendment_No. 1 to
Indenture of Lease and Aeronautica, Concession Agreement No. 1764, dated September 18,
1986, and that certain Option.Agreement dated September 18, 1986, and that certain Settlement
Agreement dated September 18, 1986, including any extensions,' renewals or permitted
modifications thereof (collectively, the "Lease") covering a portion of those certain premises
known as Palm Springs International Airport as is more particularly described in Exhibit A
attached hereto and incorporated herein by reference (the"Premises").
B. Pursuant to the Lease, Lessee owns the airport facility improvements that are a
part of the Premises during the term of the Lease (the"Improvements").
C. The Improvements and Lessee's interest in the Lease are to be conveyed to
•Assignee.
D. U.S. BANK NATIONAL ASSOCIATION ("Lender") has agreed to lend the sum
of up to $5,050,000.00 to Assignee in connection with the purchase by Assignee of (i) the
improvements, and (ii)' Lessee's leasehold interest under the Lease, (collectively, the
"Property"), which loan will be evidenced by a promissory note and will be secured by, among
other things, a deed of trust (the "Leasehold Deed of Trust") upon Assignee's leasehold estate
under the Lease.
E. Lender desires to obtain Lessor's specific- consent to (i) the purchase of the
Improvements by Assignee and assignment of Lessee's leasehold interest under the Lease to
Assignee, and (ii) the encumbering of Assignee's interest in the Lease by the Leasehold Deed of
Trust, and (iii) for other matters relating thereto, all as is required pursuant to Article M of.the
Lease.
F. Lender intends to rely on this instrument in connection with the extension of
credit to Assignee,
utva22e47 vt _1_
NOW, THEREFORE, in consideration of the premises, the mutual promises of the
parties thereto and for other good and valuable consideration,. the receipt and sufficiency of
which are hereby acknowledged and as an inducement to Lender to make the above'loan to
Assignee,Lessor and Assignee represent and agree as follows:
1. Representations. and Warrants. Lessor and Assignee hereby represent, warrant and
certify to Lender as follows:
(a) (i) That the documents referred to in Recital A above are the only documents
which constitute the Lease, and (ii) that the Lease is in full force and effect and .
has not been modified, changed, altered or amended in any respect.
(b) The Lease is the only agreement between Lessor and Lessee, and/or between
Lessor and Assignee,relating to the Premises.
(c) That to Lessor's knowledge, Lessee and Assignee are current in the payment of
any and all rent and-any other charges required to be paid by Lessee and/or
Assignee under the Lease, including the fixed ground rent, and to Lessor's
knowledge, no default presently exists under the Lease and no state of facts exists
which would constitute a default under the Lease.
(d) That the current term of the Lease.expires on December 14, 2031,
(e) Lessor hereby consents to (i) the financing of the Improvements by Lessee, and
(ii) the encumbering of Lessee's interest in the Lease by the Leasehold Deed of
Trust and Lender's obtaining its security interest in Lessee's rights under the
Lease and the leasehold interest in the Premises.
2. Lender's .Rights to Notice and to Cure Defaults. Lessor and Assignee agree that so
long as the Leasehold Deed of Trust shall remain of record:
(a) The Lease shall not be amended,.terminated (except for a default of the tenant
under the Lease) or modified in any way without the prior written consent of
Lender.
(b) Any and all notices or other communication required or desired to be given to
either Lessor or Assignee under the Lease shall,in addition,be given to Lender by
certified mail return receipt requested at U.S. Bank National Association, 918
17th Street, Denver, Colorado 80202, Attention: Hassan Salem or such other
address as Lender may designate in writing.
(c) Any notice or other communication which Lender shall desire or is required to
give to or serve upon Lessor or Assignee shall be deemed to have been duly given
or served if delivered in accordance with Article XIX of the Lease,
(d) Lender shall have the right, but not the obligation to cure any default by the
Assignee under the Lease and Lessor agrees to accept any performance tendered
IRV#22647 vl -2-
ti • -
by Lender as if Assignee had tendered such performance,provided, however,that
unless Lender otherwise agrees in writing, any performance or partial
performance by Lender under the Lease shall not constitute an assumption of the
Assignee's obligation under the Lease.
(e) In the event that Assignee shall commit a default under the Lease, Lessor shall.
give writtenn notice to Lender of such default concurrently with the delivery, of a
notice of default -to Assignee or subsequently thereafter. Lessor shall not
terminate the Lease by reason of such default by Assignee if Lender cures such
default within the times set forth in Article XI of the Lease.
(f) Unless otherwise provided herein, the exercise and non-exercise'of remedies
under the Leasehold Deed of Trust are solely at the election of Lender. If Lender
agrees to exercise any of such remedies by reason of Assignee's default under the
Lease or Leasehold Deed.of Trust, Lender is not obligated to pursue such
remedies if Assignee's defaults have not been corrected or cured.
(g) Assignee hereby agrees that Assignee's right to cancel the Lease, pursuant to
Article X1I thereof, shall be subject to Lender's consent, and any exercise or .
attempt to exercise the. cancellation right provided.in Article XII of the Lease
without the prior written consent of Lender shall be void.
3. Limitation of.Lender's Liability Under Lease. Except as may otherwise be agreed in .
writing by Lender with Lessor and except for such period of time as Lender is
actually the owner of the Lessee's interest in the Lease, in no event shall Lender be
liable for any of the Lessee's-obligations under the Lease. In the event that Lender.
shall at any time hold Lessee's interest under the Lease or any new lease entered into
in replacement thereof, then, upon any sale, transfer of assignment thereof by Lender
(which shall be in accordance with the terms hereof), Lessor agrees that such transfer
shall automatically release Lender from any liability under the Lease or any successor
lease occurring after the date of such sale,transfer or assignment.
4. Successors. This Amendment is binding upon and inures to the benefit of the parties
hereto, their successors 'and assigns, and including specifically Lender and its
successors and assigns.
5: Lease and Airport Rules. Notwithstanding anything to the contrary contained herein;
any person acquiring the leasehold interest of Assignee from Lender shall, as a
condition precedent to the enjoyment of the leasehold estate, acknowledge and agree
to be bound by the terms of the Lease and all rules and regulations of the Palm
Springs International Airport.
6. Extensions of Time Periods. Notwithstanding anything to the contrary contained
herein, any time periods within which Lender is required to act shall be extended by a
period equal to the time Lender is prevented from exercising its remedies under the
Leasehold Deed of Trust pursuant to the automatic or any.other stay provision or
IRV#22647v1 .3-
order or injunction issued or in force pursuant to the Federal Bankruptcy Code as now
or hereafter in effect. .
7. No Merger. So long as the Deed of Trust is in existence, and unless otherwise
expressly consented to in writing,the fee.title to the Premises and the leasehold estate
of Assignee created by the Lease shall not merge, but shall remain separate and
distinct, notwithstanding the acquisition of the fee title to the leasehold estate by
Lessor or Assignee or by a third party,by purchase or otherwise.
8. -Captions; Counterparts. Captions are for reference only. This Consent may be
executed in any number of identical counterparts, and each such counterpart shall be
deemed a duplicate original hereof
9. No Fee Mortgage. The foregoing provisions do not give any person the right to
mortgage,hypothecate or otherwise encumber or cause any lien to be placed upon the
fee estate of Lessor, nor shall the foregoing provisions in any event be construed as
resulting in a subordination in whole or in part of the fee estate of Lessor to any
indebtedness of Assignee.
LESSOR
CITY OF PALM SPRINGS, CALIFOPMA
ByL;
City Manager
ATTEST
City Clerk
REVIEWED AND APPROVED
City A#4noy
"Assignee"
APPROVED BY THE CITY COUNCIL PALM ' SPRINGS FBO TWO, LLC, a
jrY NQ.4uZ!( •., �. �.�" Delaware limited liability company, d.ha.
n 1U �} /7 � Million Air, Palm Springs
By
Its room 4<
MV#22647 vl -4-
4
STATE OF COLORADO )
) " SS.
CITY AND COUNTY OF DENVER)
Subscribed to before me this 290.'day of August,2002, by Jeffrey W. Ross, as
President of Palm.Springs FBO TWO,LLC, a Delaware limited liability company,d.b.a
Mil ' Springs
cP o lic Pub
9j�.Z!BLkG--Q00
M xpires: April 6, 2006
Y
OPTION TO LEASE
This Option to Lease("Agreement")is made and entered into this day of
September, 2001, by and between THE CITY OF PALM SPRINGS, a California municipal
corporation("Optionor")and PALM SPRINGS,FBO,LLC dba MILLION AIR-PALM
SPRINGS,a California Limited Liability Company("Optionee").
Recitals
WHEREAS, Optionor is the owner of certain real property situated in the City of Palm
Springs,Riverside County,known as the Palm Springs International Airport("Airport");
WHEREAS, Optionor and Optionee are parties to that certain Indenture of Lease and
Aeronautical Concession Agreement No. 1764 ("Lease")dated December 15, 1981, as duly
amended by Amendment No. I ("Amendment No.1")dated September 18, 1986,and that certain
Settlement Agreement dated September 19, 1986, including any extensions, assignments,
subleases, or permitted modifications thereof,under which Optionee leases a certain portion of
real property within the Airport("Leased Parcel'); and
WHEREAS, Optionee desires to acquire the exclusive right to lease, without becoming
obligated to lease,five(5)additional acres of real property, located immediately to the north-
west of the Leased Parcel, as more particularly described in Exhibit"A"attached hereto and
incorporated herein and depicted on Exhibit`W'as Parcel 4 (herein referred to as "Parcel 4"), at
an agreed rental rate and under certain specified terms and conditions as provided in this
Agreement.
Agreement
NOW THEREFORE, in consideration of the covenants and agreements contained herein,
the above recitals,and other good and valuable consideration,the receipt and sufficiency of
which are hereby acknowledged,the parties hereto agree as follows:
1. OPTION:
(a) Grant of Option. Optionor hereby grants to Optionee the exclusive right to lease
Parcel 4 at the rental rate and under the terms and conditions set forth herein(the
"Option")for the construction and operation of a City approved facility for
"aeronautical activities",as that term is defined under FAA AC 15015190-5
Appendix 1.
(b) Option Period. This Option shall commence on the date this Agreement is fully
executed and shall remain in effect until 5:00 p.m., September 8 2006(the
"Option Period").
IRV014083v2 _1_
(c) Option Price. This Option is granted in consideration of Optionee's payment to
Optionor of the sum of FIVE THOUSAND AND 001100 DOLLARS ($5,000.00)
per year payable in advance to the order of Optionor each year,beginning
concurrently with the execution of this Agreement, receipt of which is hereby
acknowledged,and each year thereafter on or.before September I`hfor each
year of the Option Period. In the event this Option is not exercised,all sums paid
and services rendered to Optionor by Optionee shall be retained by Optionor in
consideration of the granting of this Option.
(d) Lease Rate and Terms. Should Optionee exercise the Option within the Option'
Period,Optionee shall be entitled to lease Parcel 4 from City for the rental rate
payable by Optionee to Optionor under Article II of the Lease,as such Lease shall
be amended under the terms described immediately below. Before the
commencement of Optionee's lease of Parcel 4,the parties shall enter into and
execute an amendment to the Lease to incorporate Optionee's lease of Parcel 4
under the terms of the Lease. Unless mutually agreed by the parties to the
contrary in writing,the lease of Parcel 4 shall be subject to the terms of the .
Lease, as amended as of the date of Optionee's exercise of the Option, at Article
IT,Paragraph 1 to read as follows:
"Parcel* Lessee shall pay Lessor as rental for Parcel 4
described at Exhibit"A"herein and containing approximately 5.0
acres,the sum of Seventy-Seven Thousand Three Hundred
Nineteen and 00/100 Dollars($77;319.00)per year commencing
upon the date when Optionee exercises the Option to such Parcel 4
("Option Exercise Date"),payable monthly in advance in the
amount of Six Thousand Four Hundred Forty-Three and 25/100
Dollars($6,443.25).
Consumer Price Index. The rent payable beginning the fourth
(4th)year following the Option Exercise Date through the
remainder of this Lease shall be revised,effective the beginning of
the fourth(4th), ninth(9th), fourteenth(14th),and every five(5)
years thereafter after the Option Exercise Date based on the change
in Cost of Living Index. For the purposes of this computation, it is
agreed that the Consumer Price Index for the month of March_
[insert year of Option Exercise Date] is the base or one hundred
percent(100%). The Cost of Living Index to be used is that
reflected by the Consumer Price Index, all items,Los Angeles-
Riverside-Orange County,(1967 equal 100)published by the
Bureau of Labor Statistics of the U.S. Department of Labor. If, for
any reason whatsoever,there is any change in the method of
calculation or formulation of said price index, or if that index shall
be no longer published,then another index generally recognized as
a2V 414083 W -2-
41
authoritative shall be substituted by agreement. In any event,the
base used by the new index shall be reconciled to the 1967 index.
The rentals set out:hereinabove shall be payable on the first day of
each and every month throughout the term of this Agreement."
(e) Method of Exercise of Option. If Optionee is not in breach of this Agreement,it
may exercise this Option during the Option Period by delivery of notice thereof in
accordance with Section 3(b).
2. TERMINATION OF OPTION.
(a) Automatic Termination. If Optionee fails to exercise this Option in accordance
with its terms and within the Option Period or any extension thereof,then this
Option and the rights of Optionce shall automatically and immediately terminate
without notice. Thereafter, if requested by Optionor, Optionee shall properly
execute,acknowledge, and deliver to Optionor within fifteen(15)days of the
request therefor,any document required by Optionor or a title insurance company
to verify the termination of this Agreement.
(b) Termination due to Breach If either party fails to perform in a timely manner any
payment obligation,duty,or.other obligation under this Agreement,the aggrieved
party shall be entitled to the remedies for breach of contract that are available
under applicable law,including the remedy of specific performance, and this
Agreement and the rights of the breaching party shall automatically and
immediately terminate on twenty(20)days' notice to the breaching party.
However,the breaching party shall have the right to cure the default and reinstate
such party's position under this Agreement if it, within the twenty(20)day period
cures the default
3. MISCELLANEOUS PROVISIONS.
(a) Assignment of Agreement. Optionee shall not assign this Agreement In the
event an attempted assignment is made,in violation of this provision,then
Optionee's rights under this Agreement shall automatically terminate without
notice.
(b) Notice. Unless otherwise provided herein, any notice,tender, or delivery to be
given hereunder by either party to*the other may be effected by personal delivery
in writing or by registered or certified mail, postage prepaid, return receipt
requested, and shall be deemed communicated three days from mailing. Mailed
notices shall be addressed as set forth below,but each party may chapge his
address by written notice in accordance with this paragraph.
IRV#14083 v2 -3-
To Optionor: Palm Springs International Airport
3400 E. Tahquitz Canyon Way
Palm Springs,CA 02262 .
Attn: Aviation Director
With a copy to: Burke,Williams& Sorensed,LLP
18301 Von Karman Avenue, Suite 1050
Irvine, CA 92612
Attn: David J. Aleshire,Esq.
To Optionee: Million Air—Pahn Springs
(c) Integration. This instrument and the attached Exhibits constitute the entire
agreement between the parties relating to the Option. Any prior agreements,
promises,negotiations, or representations not expressly set forth in this
Agreement are of no force and effect unless in writing and signed by the Optionor
and Optionee.
(d) Attoruevs' Fees. If any legal action or proceeding arising out of or relating to this
Agreement is brought by either party to this Agreement,the prevailing party shall
be entitled to receive from the other party,in addition to any other relief that may
be granted,the reasonable attorney's fees,costs,and expenses incurred in the
action or proceeding by the prevailing party.
(e) Successors and Assigns. This Agreement shall be binding on and inure to the
benefit of the parties to this Agreement and their heirs,personal representatives,
successors,and assigns,except as otherwise provided in this Agreement.
[Signatures on Next Page]
IRV H14083 v2 4_
IN WITNESS WHEREOF,the parties have executed and entered into this Agreement as of the
date first written above.
"Optionor"
CITY OF PALM SPRINGS, a California municipal
corporation
City Clerk ity Manager
APPROVED AS TO FORM:
Kity Attomeeyy
PALM SPRINGS, FBO, LLC dba MILLION AIR -
PALM SPRINGS, a California Limited Liability
Company
,(NOTARIZED) By.
----r,r-- -M- Signature
ERNE I.SUSSAt W
H0TAAVPUSWC-OAWFORNIA
COMMISSION#13M78
Mr�1�Ma .2= E[ Print Name and Title
By. ��Vl�
Signature
W 444i"rr V-e,61;,
Print Nm an Title ()JV/he f-b Y/w*
Q�/
O COS rporations require two signatures; one from each of the following:A. Chainnau of Bdard,President,any
Via President; AND B. Secretary, assistant Secretary, treasurer, assistant Treasurer, or Chief Financial
Officer),
End of Signatures
mva14083v2 _g_ APPROVED By THE. CITY COUNCIL
v9/�ll0�
• JORAT WITH AFFIANT T5ATEMENT
State of CAL(Fd R N i FT
ss.
County of R 1\) E(;XS lb E
❑ See Attached Document (Notary to cross out lines 1 —11 below)
❑ See Statement Below(Lines 1 —11 to be completed only by document signer(s), not the Notary)
- -----
2--- ----------- --- .... --
---------------
4 ---------------- -------------' --------- '---- ----__ ....___
5 _-------------._..-------- ------- -
------------
--------------------------------- ---------------------..- _._. __.__..---------
7---------------------' ---- --------------------------------
8---------------- -------------------
9--- -
1t1 - -- - — — ... --- ---------------------------
Slgneture a t Sign r No.1 Sig"Mure of Document Signer No.2(1 any)
r
Subscribed
��and sworn to (or affirmed) before me
j .._..........._..^••��•-•.-...., this. 11A_dayof SRt�1 . ig3co�tby
i OFFIr+�SF�- Date Month Yex
wortSUSSMAN
GW NfA (1) CcDLEtAftnt Ak 4{tvdw! �S
r' Name of Signer
...
IlyOarMri�lbnFt�MW�ta>t00s ' (2)
..w...\_...._.....+....1..e�� Name of signer
. S nature a Nolaty
OPTIONAL
Though the Information below is not required bylaw,it may prove valuable to persons relying on the document and could prevent
fraudulent removal and reattachment of this form to another document.
Further Deserlptlon of Any Attached Document Tap of thumb here Top of thumb here
opYlbt..3 cY e—cmnsC FAcol-t
Title or Type of Document: `f K tS C it y tD 1= ra L.R S Pfl I Mas
4 SerS a M 9 'MACS
Document Date: 00-T,--xRi '3am j Number of Pages: a Oc
Signer(s) Other Than Named Above:
MHISIT 'W'
PALM SPRINGS INTERNATIONAL AIRPORT
PALM SPRINGS, CALIFORNIA
MILLIONAIRE AIR
PARCEL 4
That portion of the Northeast 1/4 of Section 18, Township 4 South,Range 5 East, San
Bernardino Base and Meridian,in the City of Palm Springs, County of Riverside, State of
California, being more particularly described as follows:
Commencing at Southeast Corner of said Section 18, said point being the point of
intersection of the centerline of Ramon Road and Gene Autry frail;
Thence North 00 Degrees 17'49"West a distance of 62.90 feet,along the centerline of
Gene Autry Trail and being the Fast line of said Section 18,to the beginning of a curve.
concave Southwesterly,having a radius of 4,850.00 feet;
Thence Northwesterly along the arc of said curve,through a central angle of 36 Degrees
14'02"a distance of 3,067.14 feet;
Thence North 36 Degrees 32'08"West a distance of 1,249.36 feet;
Thence leaving said centerline South 53 Degrees 27'47" West a distance of 50.00 feet to
a point on the Southwesterly right-of-way line of said Gene Autry Trail also being the
TRUE POINT OF BEGINNING;
Thence continuing South 53 Degrees 27'47" West a distance of 550.89 feet;
Thence North 36 Degrees 32'13"West a distance of 39537 feet;
Thence North 53 Degrees 2747"East a distance of 550.90 feet to a point on the
Southwesterly right-of way line of Gene Autry Trail;
Thence South 36 Degrees 32108"East a distance of 395.37 feet along said Southwesterly
right-of-way line to the TRUE POINT OF BEGINNING.
Said Parcel 4 containing 217,807.36 square feet(5.00 acres), more or less.
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SCALE IN FEET
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^- _.— _____.__.__--RAMON
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JEFF'RE,Y W. ROSS
S18 17TH STREET,SEVENTEENTH FLOOR
DENVER,COL ORADO$0202
TELEPHONE: (303)869-4700
FACSIMILE: (303)869-4602
FAX TRANSMITTAL
TO: Barry Griffith
FROM: Jeff Ross
DATE: 06-26- 02
FAX NUMBER: 760-316.3815
NUMBER OF PAGES: 33
(including this cover sheet)
COMMENTS
CONFIDENTIALITY NOTICE-
The information in this facsimile message is intended only for the personal and
confidential use of the designated recipient(s) named above., If you are not the intended recipient
to this facsimile or an agent responsible for delivering to the recipient note that any disclosure,
copying, distribution or action taken on this information is not permitted. If you,recefved this
transmission in error, please notify the sender Immediately, Thank youl
t 4p �gy6' o WED 13:30 FAX 303 860 4602 BLACK CREFR CAP. r
tj
ASSET PURCH4SE AGREEMENT
THIS ASSET.PURCHASE AGREEMENT (together with the exhibits and schedules
hereto, this "Agreement") is entered into as of June 24, 2002 (the "Effeetive Date") by and.
between PALM SPRINGS FBO, LLC, a Delaware limited liability company doing business as
Million Air Palm Springs ("S.ellee), and FBOCO Holdings LLC, a Delaware limited liability
company("Buyer").
A. Jeffrey W, Ross ("Manager") operates for Seller a fixed base operation for
corporate and private aircraft at Palm Springs International Airport located, in Palm Springs,
California (the "Facility"). The business operation relating to the Facility is hereinafter referred
to as the"Business'; and
B. Buyer desires to acquire from Seller, and, Seller desires to sell to Buyer, all or
substantially all of the assets and properties of the Business, wherever located, as more
particularly described'in this Agreement, and all or substantially all of the assets and properties
of La Quinta; FBO, Inc. ("La Quinta") (which operates a fixed based operation for corporate
and private aircraft at Desert Resorts Airport in Thermal, Califomia) for a total combined gross
purchase price of Twelve Million dollars ($12,000,000) (Nine Million One Hundred Seventy-
Eight Thousand Five Hundred Seventeen Dollars ($9,17$,517.00) for the assets of Seller, and
Two Million Eight Hundred Twenty-One Thousand Four Hundred Eighty-Three Dollars
($2,821,493) for the assets of La Quinta), subject to satisfaction of certain liabilities described
below, on the terms and conditions set forth herein and in that certain Asset Purchase Agreement
between La Quinta and Buyer dated June _, 2002 ("La Quinta Asset Purchase Agreement");
and
C. Manager is a member and manager of Seller, and Manager and Buyer desire that
Manager become the manager of the Business after the Closing, the terms of which are to be set
forth in a Management Agreement between Manager and Buyer (the "Management
Agreement"),
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Purchased Assets. Subject to the terms and conditions of this Agreement, Buyer
shall purchase, and Seller shall sell, convey, assign, transfer and deliver to Buyer, the Purchased
Assets on the Closing Date, The.term "Purchased Assets" means all properties, assets, rights
and interests of every kind and nature, whether real or personal, tangible or intangible, of Seller
as of the Closing Date that are used, owned or leased by Seller in connection with the Business',
including, without limitation, the following assets:
(a) inventories,parts and related supplies(including fuel supplies);
(b) the. existing leasehold estate of Seller for the Facility (the "Ground Lease"),
all rights appurtenant thereto, and all interests of Seller in buildings, fixtures and
improvements described on Schedule 1.10), as well as Seller's right to lease five.(5)
additional acres of real property from the City of Palm Springs as further set forthh in that
W l-ASSET PURCHME AGREM&W
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certain Option to Lease between the City of Palm Springs and Seller, dated September
19, 2001;
(c) all interests in furniture, fixtures, equipment, vehicles and other tangible
personal property, whether owned or ]eased, including but not limited to those listed in
the attached Tangible Property Schedule, Schedule 1.1(c);
(d) all rights existing under contracts, equipment leases, subleases (in which
Seller is the Sublessor), licenses and permits to which Seller is a party, and other
agreements by or to which the Business or any of the Purchased Assets are bound or
subject(collectively,the"Contraets');
(e) ail prepaid items and deposits paid by Seller in connection with the operation
of the Business,including but not limited to those listed in Schedule 1.1(e);
(f) all lists (including, but not limited to, customer and vendor lists), files,
documents, papers, agreements, books and records,plans and specifications pertaining to
the Purchased Assets, the Facility, .the Assumed Liabilities and the Business in the
possession of Seller, but excluding any documents pertaining solely to Excluded
Liabilities(as defined in Section 1.3);
(g) all goodwill as a going concern;
(h) all trademarks and:trade names, trademark and trade name registrations,
service marks and service mark registrations, copyrights and copyright registrations, the
applications therefore and the licenses with respect thereto listed in Schedule 1.1(h),
trade secrets, proprietary know-how, together with the goodwill and the business
appurtenant thereto and any rights, claims or choses inaction relating to or deriving from
any of the foregoing and attributable to the Business, including, but not limited to, any
unregistered intellectual property used by the Business (collectively, the "Intellectual
Property");,
(i) all interest in and to telephone numbers and all listings pertaining to Seller in
all telephone books and other directories, including but not limited to those listed in
Schedule 1.1(i);
0) all catalogues, brochures, sales literature, promotional material and other
selling material relating to the products and/or services of the Business;
(k) all government business licenses, permits, registrations and equivalent
documents relating to the conduct of the Business including but not limited to those set
forth on the Permits Schedule, Schedule 1.1(k), but only to the extent such permits and
Other documents are transferable (which non-transferable permits, if any, shall be so
disclosed in Schedule 1.1(k));
(1) other than in connection with the loans disclosed in Schedule 3.19, Seller's
rights in connection with any advances made by Seller to employees of the Business, to
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the extent reflected on the Balance Sheet (as defined in Section 3.6), as increased or
decreased in the ordinary course oi'business through the Closing Date;
(m)all cash on hand and cash equivalents remaining after any cash distribution,
made pursuant to Section 2.2.below-,
(n) all trade and accounts receivable and notes receivable of Seller arising out of
sales by the Business up to and including the Closing Date;
(o) all insurance policies and rights thereunder, to the extent transferable (which
non-transferable policies or rights, if any, shall be so disclosed in Schedule M(o)),
including but not limited to rights.to any cancellation value as of the Closing Date;and
(p) all other assets not referred to above which are either reflected in the Balance
Sheet(as defined in Section 3.6)or acquired by Seller in the ordinary course of business.
1.2 Assumption of Liabilities. On the Closing Date, Buyer shall assume and agree to
pay,defend, discharge and perform as and when due (a) all liabilities reflected or reserved for on
the Closing Balance Sheet (as defined in Section 2.2(a)) (not including any Excluded Liabilities
(as defined in Section 1.3)), increased or decreased in the ordinary course of business through the
Closing Date, (b)all liabilities, obligations and commitments under the Contracts arising out of
or relating to events or occurrences after the Closing Date, and (c)all other liabilities and
obligations of the.Business that arise or relate to events that occur solely after the Closing Date
(the"Assumed Liabilities').
1.3 Excluded Liabilities. Buyer shall not be liable for any liabilities or obligations of
Seller that are not Assumed Liabilities, including without limitation, (a) all liabilities relating to
Taxes (as'defined in Section 3.9) accrued with respect to the Purchased Assets (except pursuant
to Section 2.5 below)for all taxable periods prior to the Closing Date, (b) all liabilities (including
without limitation liabilities for excise taxes, interest and penalties) resulting from or under any
employee benefit plan, (c)all liabilities with respect to litigation, actions, proceedings,
investigations or arbitrations pending on the Closing Date or which arise after the Closing Date
as .a result of events occurring prior to the Closing Date, (A) all liabilities for workers',
compensation claims brought by Seller's employees of the Business and which relate to or arise
from events which occurred prior to Closing,.(e) all liabilities (including liabilities for excise
taxes and other penalties) arising out of claims by current or former employees pending on the
Closing Date (or which arise after the Closing Date but are based on facts occurring prior to the .
Closing Date), (f) any liabilities or obligations relating to Seller's Operating Agreement and
(g)any other liabilities, obligations or commitments of Seller, whether contingent or non-
contingent, liquidated or unliquidated, asserted or unasserted, that arise or relate to events that,
occur prior to the Closing Date ((a)-(g), collectively, the "Excluded Liabilities"), all of which
Excluded Liabilities shall remain the liabilities,obligations and commitments of Seller.
1.4 Bill of Sale. The sale and delivery will be effected by delivery by Seller to Buyer
of a Bill of Sale, Assignment and Assumption Agreement, a copy of which is attached hereto as
Exhibit."A".
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ARTICLE 2
PURCHASE PRICE; OTHER CONSIDERATION
2.1 Purchase Price;How Payable.
(a) The purchase price shall be membership interests'm Buyer valued at Nine
Million One Hundred. Seventy-Eight Thousand Five Hundred Seventeen Dollars
($9,178,517.00) (the"PurchaseTrice").
(b) The Purchase Price shall be payable as follows:
(i) Buyer shall wire a deposit in the amount of Two Hundred
Thousand Dollars($200,000)to Seller immediately upon execution of this
Agreement(if the transactions contemplated by this Agreement and the La
Quinta Asset Purchase Agreement are consummated,at the Closing One
Hundred Thousand Dollars ($100,000) of such deposit will be refunded to
Buyer,and the remaining One Hundred Thousand Dollars($100,000)will
be deducted from the purchase price set forth in the La Quints,Asset
Purchase Agreement; if the transactions contemplated by this Agreement
and the La Quinta Asset Purchase Agreement are not consummated,the .
'deposit shall be non-refundable to Buyer and shall be retained in equal
parts by the Seller and La Quinta(unless such non-consummation results
from the failure or refusal of the City of Palm Springs to approve the
transfer pursuant to Section 3.13 below, in which case the deposit will be
refunded to Buyer)); and
(ii) At Closing,Buyer shaU.tender the full Purchase Price.
Z2 Closing Settlement Adiustment.
(a) Seller agrees the Business will be free and clear of all previously incurred
indebtedness as of the Closing Date. At.the Closing, Seller shall deliver to Buyer
evidence reasonably satisfactory to .Buyer that the Business has no liabilities or
obligations of"any kind except for the current liabilities reflected on a Closing Balance
Sheet to be prepared by Seller and presented to Buyer. At least three business.days prior
to the Closing Date, Seller shall deliver to Buyer an estimated unaudited balance sheet of
the Business as of the Closing Date prepared in good faith on a basis consistent with prior
periods (the "Closing Balance Sheet"), including a certificate setting forth Seller's best
estimate of Working Capital (the"Estimated Working Capital") as of 0:01 a,m. on the
Closing Date calculated in accordance with generally accepted accounting principles,
including a copy of the calculation of the Estimated Working Capital (the "Estimated.
Working Capital Statement'). "Working Capital" shall equal the sum of the.£ollowing
(excluding Taxes): (i) the book value of accounts receivable due from unrelated parties
that are less than ninety (96) days old after the allowance for doubtful accounts,plus.(ii)
the book value of all inventory (including fuel and oil), plus (iii) the book value of all
pre-paid expenses, including all utility deposits, rental deposits and equipment deposits,
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0
plus (iv) cash, cash equivalents and marketable securities; less the sutra of the following:
(a) the book value of all accounts payable, plus (b) the book value of accrued payroll
(including salaries, commissions,bonuses and vacation pay) deductions,plus(0)the book
value of advance billings, plus (d)the book value of accrued expenses (other than current
portions of indebtedness included in accounts payable). If the Estimated Working
Capital is more than zero dollars ($0) (the"Working Capital Objective"), Seller shall be
entitled to a cash distribution from the Business immediately prior to the Closing in such
value as the Estimated Working Capital exceeds the Working Capital Objective;
provided however, that any such cash,up to a total of$125,000.00, shall be paid into the .
holdback Escrow (as defined in Section 2,6). If Estimated Working Capital is less than
the Working Capital Objective, Seller shall contribute to, the Business, at Closing, an
amount of cash required to make Estimated Working Capital equal the Working Capital
Objective.
(b) Buyer shall have seventy-five (75) calendar days after the Closing Date (the
'Settlement Date') to review the collection of accounts receivable and the Estimated
Working Capital reflected on the Closing Balance Sheet, and to prepare in good faith an
updated balance sheet of the Business as of 12:01 a.m. on the Closing Date (the"Final
Balance Sheet"). The Final Balance Sheet shall update the values of the items listed on
the Closing Balance Sheet,
(e) In the event that any of the accounts receivable reflected on the Closing
Balance Sheet have not been fully collected on or before the Settlement Date, Buyer will
provide written notice to Seller, and shall identify the uncollected accounts receivable
("Uncollected Accounts Receivable"), specifying the amounts thereof. By means of an
adjustment to the Final Balance Sheet (Io., eliminating such Uncollected Accounts
Receivable as an asset of the Business) pursuant to Section 2.2(b) above, Seller shall be
deemed to have purchased such Uncollected Accounts Receivable from Buyer and Buyer .
Shall be deemed to have assigned such Uncollected Accounts Receivable to Seller. In the
event Buyer fails to notify Seller of any Uncollected Accounts Receivable within ten(10)
business days after the.Settlement Date,no such adjustments shall be deemed necessary.
(d) Within fifteen (15) calendar days after the Settlement Date, (i) the amount of
any increase in the Estimated Working Capital reflected on the Final Balance Sheet
compared to the Closing Balance Sheet shall be paid to Seller by bank drag and (ii)the
amount of any decrease in the Estimated Working Capital reflected on the Final Balance
Sheet compared to the Closing_Balance Sheet shall be paid to Buyer out of the Holdback
Escrow(as defined in Section 2.6) (and by bank draft, to the extent that the amount in the
Holdback Escrow is not sufficienty.
(e) The obligations of Seller and Buyer under this Section 2.2 shall not be subject
to the threshold described in Section 9.4.
2.3 Prorations. The operation of the Business and related income and expenses up to
the Closing will be for the' account of Seller and thereafter for the account of Buyer.
Responsibility for expenses, including without limitation the following items, shall be prorated
as of 11:59 p.m. of the day preceding the Closing: (a)real estate and personal property taxes and
vt 1-ASSET PURCHASE AGREEMENT 5
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assessments, and other state, county and municipal Taxes; (b)rents and other payments under
any of the Assumed Liabilities; and (c)'charges for water, electricity, gas, all other utilities and
other. operating expenses. If said. information is not available at the Closing the parties will
calculate said amounts within thirty (30) calendar days after the Closing. All prepaid items,
including rent under the Ground Lease,will be paid by Buyer to Seller at the Closing.
2.4 1 Fuel Inventory. Seller shall measure the quantity of fuel and oil included in the
Purchased Assets which are on hand as of 12:01 am, on the Closing Date. Such inventory shall
be valued based upon the current book value of the applicable fuel type as established by the
latest invoice actually received by Seller.
2.5 Transaction Taxes. Buyer grid Seller shall equally.bear the cost for all sales taxes
payable in connection with the transfer of the Purchased Assets. Buyer shall pay the cost of all
use,transfer,registration, stamp, documentary,recording and similar taxes.
2.6 Holdback Escrow. Any cash, up to a total of $125,000, designated to be
distributed from the Business pursuant to Section 2.2(a), shall be paid by Seller into an interest
bearing escrow account with a mutually acceptable escrow agent (the "Holdback Escrow"),
which funds shall be governed by the terms of an Escrow Agreement to be entered into between
Buyer and Seller in the form attached hereto as Exhibit I'D" (the "Escrow Agreement") to
reserve.against any working capital adjustment pursuant to Section.2.2. To the extent that there
is no such cash to be distributed from the Business pursuant to Section 2.2(a),or such cash is less
than$125,000, then an amount of money to bring the total in the Holdback Escrow to $125,000
shall be paid by Buyer into the Holdback Escrow as a holdback from the purchase price to be
paid by Buyer, pursuant to a Redemption Agreement, to redeem certain membership interests in
Buyer that Seller will have distributed to Seller's members. All remaining escrow funds not
utilized pursuant to the terms on this Agreement shall be disbursed ninety (90) days after the
Closing Date,as follows:
(a) any and all amounts remaining in the Holdback Escrow that were paid into the
Holdback Escrow by Seller shall be disbursed pro rata to the members of Seller in
accordance with the Escrow Agreement; and
(b) any and all amounts remaining in the Holdback Escrow that were paid into the
Holdback Escrow by Buyer shall be disbursed pro rata among the "cash-out' investors
(as such term is used in Section 3.5)in accordance with the Escrow Agreement.
ARTICLE 3
SELLER'S REPRESENTATIONS AND WARRANTIES
For the purposes of this Agreement,the phrase "to the best of Seller's knowledge"shall
mean the actual knowledge of Jeffrey W. Ross$ Russ Knowles, Mary Bieger and Penny Nelson,
and shall be deemed to exist with respect to a particular matter if a prudent individual would be
expected to discover or otherwise become aware of it after reasonable inquiry. Subject to the
foregoing and as an inducement to Buyer to enter into this Agreement, Seller represents and
warrants to Buyer that:
ID
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l_7)
3.1 Organization, Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of Delaware.
3.2 Power and Authority, Seller has full power and authority to own and operate its
properties (including the Purchased Assets),to carry on its businesses(including the Business) as
now conducted, to execute and 'deliver this Agreement and the Transaction Documents (as
defined in Section 8.3)and to perform its obligations thereunder,
3.3 Authorization; No Breach, The execution, delivery and performance of this
Agreement has been, and the execution, delivery and performance of the other,Transaction
Documents as of the Closing will have been, duly and validly authorized by Seller, and this
Agreement constitutes, and each of the other Transaction-Documents as of the Closing will
constitute, a'valid and binding obligation of Seller,enforceable against Seller in accordance with
its terms (except as may be limited by bankruptcy, insolvency, reorganization and other similar
laws and equitable principles relating to or limiting creditors' rights generally).. The execution,
delivery and performance of this Agreement and the Transaction Documents, and the
consummation of the transactions thereunder, will not '(a) violate Seller's Articles of
Organization or Operating Agreement, violate any law, statute,rule, regulation,judgment, order
or decree to which Seller is subject or any judgment, award, decree, or any material agreement
(including the Contracts) or violate any other material instrument to which Seller is a party or by
which Seller or the Purchased Assets are bound, (b)conflict with or result in a breach or .
Constitute a default under any agreement (including the Contracts) to which Seller is a party or
by which Seller or,the Purchased Assets are bound, (c)result in the creation of any lien, security
interest, charge or encumbrance of any nature upon any of the Purchased Assets under any
agreement, (d)result in the triggering of any rights of fast refusal or other rights under any
agreement to which Seller is a party, or (e)require any authorization, consent or approval of, or
action or filing with, any court or other governmental body(except the Ground Lease).
3.4 Absence of.Undisclosed Liabilities. As of the Closing Date, Seller will not have
any liabilities or obligations, whether accrued, absolute, contingent or.otherwise, and whether.
due or to become due, except (a)liabilities and obligations under Contracts described on the
Leases Schedule (as defined in Section 3.8) and the Contracts Schedule, (b)liabilities and
obligations reflected on the Balance Sheet, (c)liabilities and obligations of the Business which
have arisen after the date of such Balance Sheet in the ordinary course of business, consistent
with past practices, and in the aggregate do not. exceed $25,000, and (d) liabilities and
obligations otherwise expressly disclosed in this Agreement on the Liabilities Schedule attached
hereto as Schedule 3.4.
3.5 Vquity Holders. Schedule 3.5 sets forth the names and addresses of all of the
"rolling" equity holders (i.e., such equity holder will initially retain the distribution of equity in
Buyer) in Seller and the amount of equity that each such"rolling"equity holder holds. Schedule
3.5 also sets forth the total amount of total amount of equity in Seller held by all investors
(including both "rolling" and "non-rolling" equity holders). All equity holders in Seller
(including both "rolling" and "non-rolling" equity holders) will receive their complete, pro rata
share of the Purchase Price and any other distributions made in connection with this Agreement.
No person(individual or entity)is entitled to any distribution or other consideration from the sale
vl I•ASSET PURCHMB AQRBEMW 7
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t
of the Purchased Assets other than the equity holders that will receive distributions in accordance
with the previous sentence,
16 Financial Statements: Seller has delivered to Buyer, or will deliver to Buyer prior
to Closing, audited financial statements with respect to the Business prepared by Deloitte &
Touche for the fiscal, year ended September 30, 2001, a unaudited balance sheets for the
Business dated April 30 and May 31, 2002 (the`Balance Sheets"), and unaudited statements of
income and cash flow for the periods ending April 30 and May 31, 2002 (collectively, the ,
"IYnancial Statements"). Seller is "not aware of any. material inaccuracies in the Financial
Statements. The Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved and fairly present the '
financial condition and results of operation of the Business as of such balance sheet date or the
period then ending, as the case may be. Copies,of the Financial. Statements are attached as
Schedule 3.6. Reserves are reflected on the Balance Sheets against.assets in amounts that have
been established on a basis consistent with the past practice and in accordance with generally.
accepted accounting principles as applied by Seller on a consistent basis. All receivables of
Seller reflected on the Balance Sheets or created after the respective dates of the Balance Sheets
arose from valid transactions in the ordinary course of business and consistent with past
practices. At the date of each of the Financial Statements, the Business did not have any material
liabilities (actual, contingent or otherwise) that, in accordance with generally accepted
accounting principles applied on a consistent basis, should have been shown or reflected therein
but were not.
3.7 No Material Adverse Changes. Since May 31, 2002, except as set forth in
Schedule 3.7 or as contemplated hereunder,there has not been, occurred or arisen:
(a) any change in or event affecting Seller, the Business, the Purchased Assets or
the Assumed Liabilities that has had or may reasonably be expected to have a material
adverse effect on Seller, the Business or the Purchased Assets or the Assumed Liabilities, .
or
(b) any agreement, condition, action or omission which would be pro-scribed by
(or require consent under) Section 5.2 had it existed, occurred or arisen after the date of
this Agreement, or
(c) any strike or other employment or labor dispute, any significant increase in
workforce turnover or other indication of workforce unrest or dissatisfaction, or
(d) any casualty, loss, damage or destruction (whether or not covered by
insurance) of any of the Purchased Assets that is material or that has involved or may
involve aggregate losses to the Business or Seller of more than$25,000.
3.8 Purchased Assets.
(a) The Leases Schedule, Schedule 3.8(a), lists the sOleasehold and leasehold
interests allowing Seller to occupy the Facility, and all subleases' allowing any other
parties to occupy the Facility(each a "Lease" and collectively, the"Leases"), along with
the term of each Lease. The Leases are in full force and effect and are enforceable
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against Seller and, to the best of Seller's knowledge, all other parties thereto. Seller has:
delivered to Buyer complete and accurate copies of each of the Leases (including all
amendments and supplements thereto). Except as set forth on Schedule 18(a), (i) Seller
has received no notice that it is in default under any Lease, that it may be subject to any
special assessments or that there may be any material changes in property tax or land use
law affecting any such Leases; (ii) Seller has not delivered any notice to another party
alleging any default under any Lease, (iii) Seller and, to the best of Seller's knowledge,
all other parties to the Leases, have duly performed all of their respective obligations
under the Leases, (iv)no breach or default, or event which would (with the passage of
time or notice) constitute a breach or default under any Lease by Seller (or,to the best of
Seller's knowledge, any other party or obligor with respect thereto), has occurred or as a
result of this Agreement or Seller's performance will occur, and (v) alI Leases are
transferable(and will be transferred)to Buyer at Closing without any requirement to give
or receive prior notice or consent, except as set forth in Section 3.13 or Schedule 18(a).
Consummation of the transactions contemplated by this Agreement will not(and will not
give any person a right to) terminate or modify any rights of, or accelerate or augment
any obligation of, Seller under any of the Leases.
(b) Attached hereto as Schedule 1.1(c) is a complete and accurate list of all
furniture, equipment, leasehold improvements, motor vehicles and all other tangible
personal property in which Seller has an interest and the nature of such interest.
(c) Seller has good and marketable title to each of the Purchased Assets, which,
as of the'Closing Date, will be free and clear of any mortgages,-liens, charges, security
interests or other encumbrances. Seller has all rights,power and authority to sell, convey,
assign; transfer and deliver the Purchased Assets to Buyer in accordance with'the terms
of this Agreement. At the Closing, Seller shall deliver the Purchased Assets to Buyer,
free and clear of any mortgages, liens, charges, security interests or other encumbrances.
The Purchased Assets are in a good state of maintenance and repair, have been regularly
and appropriately maintained, repaired and replaced, are not materially defective except
for ordinary wear and tear and are adequate for use in the Business. Seller makes no
"other representation or warranty as to the physical condition of the tangible personal
property included in the Purchased Assets, and they are otherwise sold "as is and where
is" and "with all physical faults". The Purchased Assets constitute all the property and
assets, tangible and intangible, fixed or contingent, used or intended for use primarily in
the operation of the Business or otherwise material to the Business. The Purchased
Assets include all permits, licenses, consents and any other third party authorizations
necessary to operate the Business consistent with the Seller's current practices, to the
extent they are transferable, and subject to any requirements or procedures for
transferring such permits, licenses, consents and third party authorizations (which
requirements and procedures Buyer acknowledges may need to be completed after
Closing). Schedule 3.8(c) sets forth a list of any and all Purchased Assets that are not
transferable or for which, as of the Closing, requirements or procedures for transferring
such Purchased Assets have not been completed.
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3.9 Tax Matters.
(a) Seller has filed, or will file, all federal, state, local and foreign Tax Returns
relating to the Business for all periods before the Closing Date. Seller has duly paid or
will pay when due all of Seller's federal, state, local and foreign Taxes relating to the
Business for all periods before the Closing Date or which could affect Seller's ability to
consummate the transaction contemplated hereby other than Taxes identified on
Schedule 39 which are being contested in good faith.
(b) Seller has withheld and paid, when due (or made adequate reserves for) all
Taxes for employees as required by law.
(c) To the best of Seller's knowledge, there is no proceeding or audit pending by
any taxing authority.
(d) For purposes of this Agreement: (i)"Tax" means any foreign, federal, state,
county or local income, sales and use, excise, franchise, real and personal property,
transfer, gross receipt, capital stock, production, business and occupation, disability,
employment, payroll, severance or withholding tax or charge imposed by any
Governmental Entity,any interest and penalties (civil or criminal)related thereto or to the
nonpayment thereof, and any Loss in connection with the determination, settlement or
litigation of any Tax liability; and (ii)"Tax Return" means a report, return or other
information required to be supplied to a Governmental Entity with respect to Taxes
including, where permitted or required,combrned or consolidated returns for any group
of entities that includes any Subsidiary.
3.10 Contracts and Commitments.
(a) Except as set forth in the Contracts Schedule, Schedule 3.10, Seller is not a
party to any Contract,written or oral:
(i) for a bonus, pension, profit sharing, retirement, deferred
compensation, medical or life insurance plan, membership purchase or option or
any other plans or arrangements providing for benefits of any type to employees
(either current or former)of Seller;
(ii) for collective bargaining or with any labor union;
(iii) for the borrowing of money or _mortgaging, pledging or
encumbering any of the Purchased Assets;
(iv) for the lending or investing of funds to or in other persons or
entities;
(v) granting any power of attorney. (irrevocable or otherwise) to any
person for any purpose relating to the Business, Purchased Assets or Assumed
Liabilities, other than powers of attorney given to regulatory authorities in
connection with routine qualifications to do business; or
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(vi) with an Affiliate of Seller.
(b) The Contracts Schedule lists each of the Material Contracts. For purposes of
this Agreement,"Material Contracts"includes the following:
(i) any and all contracts for the sale of goods or services by Seller
with'a value in excess of$10,000 or which is not terminable without penalty by
Seller on less than 90 days' notice;
(ii) any and all contracts, agreements, licenses, leases (other than the
Ground Lease), sales and purchase orders and other legally binding commitments,
whether written or oral, that obligate Seller to pay an amount of$10,000 or more
or that cannot be terminated without penalty by Seller on less than 90 days'
notice;
(III) any and all broker, distributor, dealer, representative or agency
agreements;
(iv) any and all insurance policies insuring the Business, the Facility or
any of the Purchased Assets;
(v) ., that certain Million Air Palm Springs Franchise Agreement
between Seller and Million Air Interlink, Inc., dated November 1, 1999, as
amended pursuant to a letter dated January 15,2002;
(vi) any and all employment, severance, non-competition or consulting -
agreement with any current or former member or employee of Seller;and
(vii) any and all agreements requiring a loan or advance by Seller.
(e) Seller has made available to Buyer true and complete copies of all written
Material Contracts, together with all amendments thereto,and accurate descriptions of all
oral Material Contracts. Except as set forth on.the Contracts Schedule, (i) Seller has not
been notified of any claim that any Material Contract is not valid and enforceable in
accordance with its terms for the periods stated therein, or that there is under any such
Material Contract any existing material default (including, but not limited to, any
payment default) or event of material default or event that,with notice or lapse of time or
both, would constitute such a material default, (ii)all Contracts are in full force and effect
to the best of Seller's knowledge, (III) all Material Contracts are enforceable against
Seller and, to the best of Seller's knowledge, all other parties thereto, and (iv)neither
Seller nor, to the best of Seller's knowledge, any other party thereto is iii default.under
any Material Contract. Except as set forth on'the Contracts Schedule, to the best of
Seller's knowledge, there are no disputes with customers or vendors of the Business with
respect to performance by Seller or the Business under any Material Contract requiring,
or which could require, payment by Seller or the Business or performance of services or
delivery of assets or properties of the Business in excess of$5,000. Except as set forth
on the Contracts Schedule, each Contract is transferable (and will be transferred) to
Buyer at Closing without any requirement to give or receive prior notice or consent, and
vir-ASSETPMCUME AOREEMONT 11,
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consummation of the transactions contemplated by this Agreement will not(and will not
give any person a right to) terminate or modify any rights of, or accelerate or augment
any obligation of, Seller under any of the Contracts.
3.11 Litigation: Proceedings. Except as set forth in the Litigation Schedule, Schedule
3.11, there is no action, suit, proceeding,judgment or order pending or; to the best of Seller's
knowledge, threatened relating to the Business. There is no action, suit, proceeding,judgment
or order pending or, to the best of Seller's knowledge, threatened against or affecting Seller
before any federal, state, municipal or other governmental court or agency which would have a
material adverse effect on Seller's performance under this Agreement or the consummation of
the transactions contemplated hereby.
3.12 Brokerage. Except as set forth on Schedule 3.12, no agent, broker, finder, or
investment or commercial banker.engaged by or on behalf of Seller is or will be.entitled to any
brokerage cominission, finders' fees or similar compensation as a result of this Agreement or any
of the transactions contemplation herein. Seller shall be responsible.for paying any and all such
fees identified on Schedule 3.12.
3.13 Governmental Consent. Transfer of the Ground Lease is subject to the approval
of the City of Palm Springs. Except as provided in this paragraph and as provided in the
Consents Schedule, Schedule 3.13, no consent or authorization of any governmental or
regulatory authority is required to transfer all of Seller's right, title and interest in and to the.
Facility, the Business and the Purchased Assets and thereby consummate the transaction
contemplated in this Agreement.
3.14 Employees. Seller has complied in all material respects,with all applicable laws.
relating to the employment of labor. Schedule 3.14 lists each employee of Seller working for
the Business as of the date set forth therein, together with such employee's original hire date and
current salary or hourly wage, as the case may be. Seller is not a party to any written or oral
agreements(other than oral agreements for at-will employment)with any of its employees. .
3.15 Employee Benefit Plans. Seller does not maintain, not has it maintained, any
"Employee Welfare Benefit Plan," as defined in Section 3(1) of ERISA, any"Employee Pension .
Benefit Plan', as defined in Section 3(2) of ERISA, any other "employee benefit plan", as
defined in Section 3(3) of ERISA, or is or has been a contributing employer to any multi-
employer plans, as defined in Section 3(37) or Section 4001(a)(3) of 13RISA, other than.those
plans identified on Schedule 3.15 and medical and dental benefit plans identified on Schedule
3.15. Seller is and has been in compliance with all applicable federal and state laws governing
any plans identified on Schedule 3.15,
3,16 Compliance with Laws. Seller has complied, and the use and operation of the
Purchased Assets are in compliance, in all material respects, with. all applicable laws, rules,
regulations, orders, ordinances, judgments and decrees of all governmental authorities which
affect the Business, except where such noncompliance would not have a material adverse effect.
Seller holds all permits, licenses, certificates and other authorizations of federal, state and local
agencies required for the conduct of the Business as operated to the date hereof(collectively,
vl1-ASSET MCHAS13AORERMENT 12
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a'
"Permits"). All Permits are set forth on Schedule 1.1(k), and will remain in full force and effect
following the Closing, except asset forth on Schedule 1.1(k).
3.17 Environmental Matters.
(a) As used in this Section 3.17, the following terms shall have the following
meanings:
(i) "Environmental Law(s)" means all applicable federal, state or
local laws, regulations, ordinances, codes,judgments or orders pertaining to the
environment, Hazardous Materials, pollution or occupational safety and health,
and includes without limitation the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et. seq., Solid "
Waste Disposal Act,as amended by the Resource Conservation and Recovery Act
of 1986 and Hazardous and Solid Waste Amendments of 1984,42 U.S.C. §§ 6961
et seq., the Oil Pollution Act of 1990, 33 U.S.C..§§ 2701 et seq, and similar or
implementing state laws,.rules, orders, directives and regulations promulgated
thereunder, as well as those laws, regulations, ordinances, codes,judgments and
orders relating to (i)emissions, discharges, releases or threatened releases of
Hazardous Materials into the environment (including, but not limited to, ambient
air, surface water, groundwater, land surface or subsurface strata), (ii)the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials as such, and
(iii) underground storage tanks containing Hazardous Materials, and related
piping, and emissions, discharges,releases or threatened releases therefrom.
(ii) "Hazardous Material(s)" means any substance, pollutant,
contaminant, radiation or chemical which is hazardous to human health or safety
or the environment including,without lintation,all of those substances which.am
listed or ' defined as "pollutants," "contaminants," "hazardous materials,"
"hazardous wastes," "hazardous substances," "toxic substances;" "radioactive
materials," "solid wastes," or other similar designations pursuant to
Environmental Laws, including (without limitation) petroleum (including crude
oil or any fraction thereof), any petroleum product, asbestos and asbestos
containing materials,and polychlorinated biphenyls.
(ii!) "Release" shall mean any non-de-minimus (in the aggregate)
discharge, disposal, deposit, spill, leak, emission, release or abandonment of
Hazardous Material into the indoor or outdoor environment,
(iv) "Environmental Permits" shall mean all material permits,
approvals, certificates and licenses required under any Environmental Law.
(b)Except as set forth in the Environmental Matters Schedule, Schedule 3.17,
Seller represents and warrants that,with respect to the Facility and the Purchased Assets:
Y11�ASSBTPURCHASEAOREEMENT 13
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(i) The Purchased Assets materially comply, and at all tunes during
Seller's ownership of the Purchased Assets have been in compliance, with
applicable Environmental Laws;
`(ii) Seller has obtained all required material Environmental Permits
relating to the Business, enabling the Business to operate and continue'to operate
after the Closing Date in the ordinary course of business and consistent with past
practices, and all such Environmental Pennits are transferable (and will be
transferred, except as set forth in Schedule 3.17)to Buyer at Closing;
(iii) , Seller has not caused any non-de-minimus (in the aggregate)
Release or disposal of any Hazardous Material at the Facility, and there has not
otherwise been,any Release, migration or contamination of or by a Hazardous
Material at, on, about or under the Facility;
(iv) Seller has not received notice and, to the best of Seller's
knowledge, there is no violation, claim, demand, litigation, proceeding or
governmental investigation (whether pending or threatened) arising from
applicable Environmental Laws relating to the Business or Hazardous Materials
which are present at the Facility;
(v) Except for claims that would not have a material adverse effect on
Seller or the Business, there are no past or present circumstances which could
reasonably be expected to form the basis of any environmental claim of violation
of any Environmental Laws against Seller or the Business;
(vi) Seller has not placed, stored or caused the Release of any
Hazardous Materials on or beneath the Facility, except for such Hazardous
Materials managed in the ordinary course of business and consistent with past
practices of Seller in accordance with applicable Environmental Laws;
(vii) . Seller has delivered true, complete and correct .copies of any,
reports, or other documents possessed by or in the control of Seller pertaining to
the environmental condition of the Facility, Hazardous Materials on the Facility
and regarding Seller's compliance with applicable Environmental Laws;
(vili) Except as set forth in Schedule 3.17,the Facility does not contain
any underground storage tanks.
(c) To the best of Seller's knowledge, the Report of Phase I Enviroumental Site
Assessment Update prepared by Earth Systems Southwest with respect to the Business,
dated April 15, 2002 and updated on June___, 2002.(the"Phase I Report"), is accurate
and,except,as set forth on Schedule 3.17, includes an investigation-and assessment of all
parts of the Facility.
3,18 Airport and Other Regulatory Matters. All certificates of public convenience and
'necessity, permits, licenses and operating rights issued to Seller with respect to the Business by
any local, state or foreign ,regulatory body (collectively, "Operating Rights' are set forth on
vit•ASSET PURCHASE AORB13M W 14
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Schedule 1.1(k). Except as otherwise set forth on Schedule 1.1(k), there are no governmental
permits of any type required to conduct the Business as conducted to the date hereof, and all of
the Operating Rights will remain in full force and effect following the Closing.
3.19 Affiliate Transaction§. Schedule 3.19 lists all agreements between Seller and any
current or former member or other Affiliate (as defined in Section 11.9) of Seller or any entity in
which any such person has a direct or indirect material interest. Schedule 3.19 lists all payments
since January 1, 2000 from Seller to or for the benefit of any current or former member or other
Affiliate of Seller or any of such person's Affiliates, or any entity in which any such person has a
direct or indirect material interest, except to the members of Seller pursuant to Seller's Operating
Agreement. Except as fully described in Schedule 3.19, no Affiliate of Seller nor any member,
manager, officer,director or equity holder of any thereof, has any material interest in any of the
Purchased Assets, the Assumed Liabilities or any property used in or pertaining to the Business;
no such entity or person is indebted or otherwise obligated to Seller; and Seller is not indebted or
otherwise obligated to any such entity or person, except to Seller's members pursuant to Seller's
Operating Agreement or for amounts due under normal arrangements applicable to all employees
generally as to salary or reimbursement of ordinary,business expenses not unusual in amount or
significance. Except as fully described in Schedule 3.19 or pursuant to Seller's Operating
Agreement, the consummation of the transactions contemplated by this Agreement will not
(either alone, or upon the occurrence of any act or event, or with the lapse of time, or both)result
in any benefit or payment. (severance or other) arising or becoming due from Seller or the
successor or assign of any thereof to any entity or person.
3.20 Customers and Suppliers. Schedule 3.20 sets forth the top ten customers and the
top ten suppliers of the Business (based on dollar volume of sales or purchases, as applicable).
Except as set forth in Schedule 3.20 or Schedule 3.10, Seller is not a party to any written
agreements or, to the best of Seller's knowledge, any oral Material Contracts, with any of its
customers or suppliers.
3.21 Seller's Investment Representation. Seller is acquiring membership interests in
Buyer for Seller's own account for investment purposes only and not with a view to or for sale in
connection with a distribution thereof except for a permitted transfer to an Affiliate of Seller. At
the Closing, Seller and any intended Affiliate transferee shall deliver to Buyer an investment
letter in form and substance substantially as set forth in Exhibit"C" (the "Investment Letter").
Seller acknowledges that the membership interests in Buyer will not be registered under and
therefore will be"restricted securities"under the Securities Act of 19.33 as amended.
3.22 No Capital Investments. Seller is not required under the Ground Lease or any
Contract, and the transactions contemplated, under this Agreement will not trigger any
requirement for Seller or Buyer, to complete any material upgrades, repairs or make any other
capital investments in the Facility, the Business or any of the Purchased Assets.
3.23 Airport Plan. To the best of Seller's knowledge, the Palm Springs Regional
Airport Master Plan dated August 1994 has not been,and is not in the process of being, amended
or supplemented.
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3.24 Due Diligence Materials. Seller, to the best of Seller's knowledge, has provided
to Buyer true, complete and accurate responses to all due diligence inquiries made by Buyer, or
by Buyer's counsel or consultants, in connection with the transactions contemplated by this
Agreement. All documents delivered to Buyer or Buyer's counsel by (or on behalf of) Seller in
connection with due diligence inquiries made by (or on behalf of) Buyer are, to the best of
Seller's knowledge, true, accurate and complete and fairly present the current condition of the
Business, the Facilities and the Purchased Assets, as relevant.
ARTICLE 4
BUYER'S REPRESENTATIONS AND WARRANTIES
As an inducement to Seller to enter into this Agreement,Buyer represents and warrants to
Seller that:
4.1. Organization. Buyer is a limited liability company duly organized, validly
existing and in good standing under the laws of Delaware.
4.2 Power and Authority. Buyer has full power and authority to execute and deliver
this Agreement and the Transaction Documents and to perform its obligations thereunder.
4.3 Authorization; No Breach. The execution, delivery and performance of this
Agreement has been, and the execution, delivery and performance of the other Transaction
Documents as of the Closing will have been, duly.and validly authorized by Buyer, and this
Agreement constitutes, and each of the other Transaction Documents as of the.Closing will
constitute, a valid and binding obligation of Buyer, enforceable against Buyer in accordance with
its terms (except as may be limited by bankruptcy, insolvency, reorganization and other similar
laws and equitable principles relating to or limiting creditors'rights generally).
4.4 Brokerage. Other than a transaction fee of$50,417.00 that will be paid by Buyer
to Manager at Closing ($16,805.00 of which fee Manager will pay to Tony.Miller), no agent,
broker, finder, or investment or commercial banker engaged by or on behalf of Buyer is or will
be entitled to any brokerage commission, finders' fees or similar compensation as a result of this
Agreement or any of the transactions contemplated herein.
4.5 Litigation. There is no action, suit, proceeding;judgment or order pending or, to
the best of Buyer's knowledge, threatened against or affecting Buyer before any federal, state,
municipal or other governmental court or agency which would have a material adverse effect on
Buyer's performance under this Agreement or the consummation of the transactions
contemplated hereby.
ARTICLE 5
COVENANTS
5.1 Affirmative Covenants. Prior to the Closing, Seller shall use good faith efforts to:
Y11-ASSBrPURCHASE AORBEMMT 16
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(a) obtain all consents and approvals that. may .he necessary or reasonably
requested by Buyer to consummate.the transactions contemplated by this Agreement;
(b) conduct the Business only in the usual and ordinary course of business and
consistent with past practices;.
(e) keep,in full force and effect its corporate existence and all rights, franchises,
Permits and Intellectual Property rights relating to or pertaining to the Business;
(d) retain its employees and preserve its present business relationships;
(e) maintain the.Purchased Assets in customary repair, order and condition and in
the event of any casualty, loss or damage to any of the Purchased Assets prior to•Closing,
either repair or replace such assets with assets of comparable quality or, if Buyer agrees,
transfer to Buyer at Closing the proceeds of any insurance recovery with respect thereto;
(f) maintain its books, accounts and records in accordance with past custom and
practice as applied by Seller on a consistent basis;
(g) maintain all Permits and insurance coverage existing as of the date hereof
against loss or damage to the Purchased Assets; and
(h) not be in default under any Material Contract (other than to the extent that the
execution of this Agreement and the consummation of the Transactions may or may be
alleged to constitute a default under any Material Contract) or to cure any such default.
5.2 Notification of Certain Changes. Seller shall promptly inform Buyer of any
material adverse changes to the Business or the Purchased Assets occurring after the Effective
Date which would make false or misleading, or necessitate a change to any of the Schedules to
this Agreement. To the extent Seller proposes to enter into a new contract for an expenditure in
excess of$10,000 Buyer shall have five business days afterreceipt of notice of such proposed
Contract to elect whether or not it desires to purchase and assume-such Contract. In the event
Buyer elects to purchase such Contract, then such Contract shall be deemed added to the
Contracts Schedule.
5.3 Access. Prior to ,Closing, Seller will (a)during ordinary business hours permit
Buyer and its authorized representatives to have access to the Facility, books records and key
personnel, (b)famish, as soon as reasonably practicable; to Buyer or its authorized
representatives such other information in Seller's possession with respect to the Business as
Buyer may from time to time reasonably request, and (c) otherwise reasonably cooperate in the
examination of the Business by Buyer.
5.4 Neizafive Covenants. From the Effective Date to the Closing Date, Seller shall
not; without the prior written consent of Buyer, which consent shall not be unreasonably
withheld or delayed:
(a) waive, release, grant or transfer any rights'of material value;
J
vi 1-ASSET PURCHASE AORWIdWT 17
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(b) assume, guarantee, endorse or otherwise become liable or responsible for any
indebtedness of any other person, except in the-ordinary course of business consistent
with past practice;
(c) incur or agree to incur any obligation or liability (absolute,or contingent), or
make any capital expenditures or commitments with respect thereto, except in the
ordinary course of business consistent with past practices;
(d) make any loans, or investments in, any other person or entity, except in the
ordinary course of business consistent with past practices;
(e) transfer any of the Purchased Assets except for any transfer or encumbrance in
the ordinary course of business consistent with past practices;
(f) pledge or otherwise mortgage any of the Purchased Assets or allow any Lien
thereupon; "
(g) terminate, amend or fail to renew any Permits;
(h) terminate, amend or fail to renew any insurance coverage existing as of the
date hereof against loss or damage to the Business,the Facility or the Purchased Assets;
(i) materially amend or terminate outside the ordinary course of business
consistent with past,practices any Material Contract;
(j) materially increase the compensation, benefits or other remuneration of any of
the Business' current officers or key employees, except for entering into "stay" bonuses
or special severance agreements(all of which shall be.for Seller's account);
(k) declare, issue, make or pay any dividend or other distribution to its equity
holders;
(1) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation,restructuring,recapitalization or other reorganization of Seller; or
(m)alter through merger, liquidation, reorganization, restructuring or any other
fashion the ownership of the Purchased Assets by Seller.
ARTICLE 6
CLOSING CONDITIONS-BUYER
6.1 Conditions to Closing. The obligation of Buyer to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of the following conditions on or
before the Closing Date:
vu.ASSET PUFtCEA9B eoRBBMONT 18
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(it),the representations and warranties set forth in Article 3 shall be materially
true and correct as of the Closing Date as though made on the Closing Date, and Seller
shall have delivered to Buyer a certificate to that effect;
(b) Seller shall have performed or complied with all of the covenants and
agreements required under this Agreement, and Seller shall have delivered to Buyer_a
certificate to that effect;
(c) Seller shall have provided Buyer with such documentation as may be
reasonably necessary to show that the transactions contemplated by this Agreement are
properly authorized;
(d) Seller has received no notice of legal action or proceeding which shall have
been instituted or overtly threatened by any governmental agency seeking to 'restrain,
prohibit, invalidate or otherwise affect the consummation of the transactions
contemplated by this Agreement;
(e) all governmental permits and approvals and all material consents by third
parties that are required for the transfer of the Purchased Assets shall have been obtained
including consent of the City of Palm Springs to the transfer of the Ground Lease;
(f) Seller shall have: executed and delivered to Buyer .original or facsimile
counterparts of each Transaction Document to which it is a party(in accordance with the
provision in Section 8.1 permitting the use of facsimile copies) in connection with the
transactions contemplated hereby and by the La Quinta Asset Purchase Agreement, in
form and substance satisfactory to both Buyer and Seller;
(g) Seller shall have obtained representations from the City of Palm Springs
substantially consistent with the concepts set forth in Exhibit"D" attached hereto;
(h) Buyer shall have received adequate evidence of termination and release of any
and all deeds of trust,, assignments of rents, security agreements and fixture filings
affecting the Facility,the Business or any of the Purchased Assets;
(i) Seller shall have delivered to Buyer an irrevocable commitment by a title
insurance company reasonably acceptable to Buyer to provide title insurance;
(j) Seller shall have satisfied, or shall satisfy at Closing,to the extent necessary to
have deeds of trust, security agreements, or other liens removed in accordance with
Section 6.1(h), all obligations under that certain Reducing Revolving Credit Agreement
between Seller and U.S. Bank National Association, dated September 30, 1999, that
certain First Amendment to Loan Documents between Seller and US. Bank National
Association, dated August 15, 2001, and any other agreement with respect to the
Excluded Liabilities, as each such.agreement may have been amended or supplemented,
and Seller shall have taken (or shall take at Closing) any and all other actions necessary
to deliver the Purchased Assets, the Facility and the Business to Buyer free and clear of
mortgages, liens, charges, security interests or other encumbrances or Indebtedness(other
than liabilities included in the Assumed Liabilities);and
v11•ASSET PURCHASE AGREEMENT 19
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(k).Manager shall not have died or otherwise become severely incapacitated.
Any conditions specified in this Section 6.1 may be waived by Buyer in writing.
ARTICLE 7
CLOSING CONDITIONS-SELLER
7.1 Conditions to Closing, The obligation of Seller to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of the following conditions on or
before the Closing Date:
(a) Buyer shall have delivered the Purchase Price to Seller;
(b) the representations and warranties set forth in Article 4 shall be materially
true and correct as of the Closing Date as though made on the Closing Date, and Buyer
shall have delivered to Seller a certificate to that effect;
(c) Buyer shall have performed or complied with all of the covenants and
agreements required under this Agreement, and Buyer shall have delivered to Seller a
certificate to that effect;
(d) Buyer and La Quinta shall have consummated the transactions contemplated
under the La Quinta Asset Purchase Agreement prior to, or concurrently with, the
Closing of the transactions contemplated under this Agreement.
Any condition specified in this Article 7 may be waived by Seller in writing.
ARTICLE 8
CLOSING MATTERS
8.1 The Closing. The closing of the transactions contemplated in this Agreement(the
"Closing') will take place at 10:00 a.m, at the offices of Seller, or at such other place as Buyer
and Seller may mutually agree, on June 30, 2002 (the "Closing Date'), unless the parties
mutually agree to close on a date earlier than June 30, 2002. The parties agree that signature
pages of documents required to be delivered at the Closing may be delivered by facsimile.
8.2 Action to Be Taken at the Closing. The sale and dellvcry of the Purchased
Assets, and the payment of the Purchase Price shall take place at the Closing.
8.3 Closing Documents.
(a) Seller. shall deliver to Buyer at the Closing the following documents
(collectively, the "Transaction Documents"), duly executed by Seller where necessary
to make them effective:
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v11,AS813r PURCHABB AORBBMWT 20
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0
(i) Bill of Sale, Assignment and Assumption Agreement in the foram ,
of Exhibit"A"attached hereto;
(ii) Escrow Agreement relating to the holdback Escrow;
(iii) Investment Letter relating to Seller's acquisition of membership
interests in Buyer;
(iv) a certificate dated the Closing Date, signed on its behalf by an
authorized 'officer, to the effect that the conditions set forth in Article 6,
subsections (a),'(b)and(c)have been satisfied;
(v) such instruments of assumption and other documents or
instruments as . Buyer reasonably may request to effect the transaction
contemplated hereby; and
(vi) good funds in the amount of One hundred Thousand Dollars,
representing one-half of Buyer's deposit made under Section 2.1(a).
(b) Buyer shall deliver to Seller at the Closing the following documents, duly
executed by Buyer where necessary to make them effective:
(i) the Purchase Price;
(ii) Bill of Sale, Assignment and Assumption Agreement in the form
of Exhibit"A"attached hereto;
(iii) Escrow Agreement relating to the Holdback Escrow;
(iv) a certificate dated the Closing Date, signed on its behalf by an
authorized officer, to the effect that the conditions set forth in_Article 7,
subsections (b)and(c)have been satisfied; and
(v) such instruments of .assumption and other documents , or
instruments as Seller reasonably may request to effect the transaction
contemplated hereby;
(c) Buyer shall deliver to Manager at the Closing good funds in an amount
sufficient to cover all amounts paid or incurred by Manager for all of Buyer's. and
Manager's out-of-pocket transaction expenses, including without limitation reasonably
fees and expenses of,Manager's and Buyer's attorneys, inspectors, accountants and
auditors,and the reasonable expenses of due diligence and due diligence trips.
8A Nonassignable Contracts. To the extent.that the assignment hereunder by Seller
to Buyer of any Contract or Permit is not permitted without the consent of another party and
Buyer is willing to proceed with the Closing, this Agreement shall not be deemed an assignment
of such Contract or Permit if such consent is not.given, and Buyer shall assume no obligations or
liabilities thereunder, Seller shall advise Buyer promptly in writing with respect to any Contract
v1I-ASSET PURCHASE AGRUBM6NT 21
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listed on the Contracts Schedule, or Permit listed on the Permit Schedule,that Seller learns shall
not receive any required consent. Seller shall cooperate with Buyer (at no material cost or
expense to Seller) so that Buyer may assume, obtain or otherwise receive the benefit under any
such Contract or Permit, as applicable. .
8.5 Possession. Simultaneously with the CIosing, Seller shall cooperate with Buyer
and take such steps as are reasonably necessary to put Buyer in actual possession and operating
control of the Purchased Assets and Business.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification by Manager:Environmental Insurance.
(a) Manager agrees to. indemnify Buyer and, its members, manager, officers,
directors, -employees, Affiliates, agents and equity holders (collectively, the "Buyer
Indemnified Parties') and hold them harmless against any Losses which any of the
Buyer Indemnified Parties may suffer, sustain or become subject to as a result of, or
based upon or arising from:
(i) any material inaccuracy in any of the representations or breach of
any of the warranties of Seller contained in this Agreement or in any exhibits,
schedules, certificates or other documents delivered or to be delivered pursuant to .
the terns of this Agreement or otherwise incorporated in this Agreement; .
(ii) any breach of, or failure to perform, any agreement or covenant of
Seller contained in this Agreement;
(iii) any "Claims" (as defined in Section 9.3(a) hereofl against any of
Buyer Indemnified Parties arising out of the actions or inactions of Seller prior to
the Closing with respect to the Purchased Assets or the operation of the Business
prior to the Closing or any other business prior to or after the Closing;and
(iv) any Excluded Liability.
(b) Notwithstanding the provisions of Section 9.1(a). Manager.shall indemnify
obligations arising from or in connection with Section 3.17(b) only after(a) Buyer shall
have unsuccessfully sought insurance coverage, reimbursement from governmental
entities, or reimbursement from third parties not affiliated with Manager for losses in
connection with Section 3.17(b) (or such insurance coverage or reimbursement is not
adequate to cover all such losses), and (b) Buyer's Losses (as defined in Section 9.3) in
connection with Section 3.17(b) ("Eavironmental Losses") total $100,000, and only
until Buyer's Environmental Losses reach $500,000, after which Manager shall have no
further liability with respect to such Environmental Losses; and provided that
Manager's indemnification obligation in connection with Section 3.17(b) shall survive
only for one (1) year after the Closing 1Date (except to the extent that any claim for any
J
vtI ASSET PURCHASEAC6MMMENT 22
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Environmental Losses arose within the first year after the Closing Date but is pending or
unresolved at the end of such period).
(e) The parties intend to obtain environmental insurance for the Business. Seller
agrees to pay that portion of the premium for such environmental insurance policy that
represents the first year of coverage for conditions that are existing (whether known or
unknown) before the Closing, and Buyer agrees to pay the remainder of the premium for
such environmental insurance policy.
9,2 Indemnification by Buyer. Buyer agrees to indemufy Seller and its members,
manager, officers, directors, employees, agents, and equity holders (collectively, the "Seller
Indemnified Parties"), and hold them harmless against any Losses which' any of Seller
Indemnified Parties may suffer, sustain or become subject to as a result of, or based upon or
arising from (a)any material inaccuracy in any of the representations or breaches of any of the
warranties of Buyer contained in this Agreement, (b)any breach of, or failure to perform, any
agreement or covenant of Buyer contained in this Agreement, including assuming the Assumed
Liabilities, (e)any Claims against any of Seller Indemnified Parties arising out of actions or
inactions of Buyer subsequent to Closing with respect to the Purchased Assets or the operation of
the Business subsequent to Closing, and(d)any Assumed Liability.
9.3 Method of Assertina Claims. As used herein, an "Indemnified Party" shall refer
to a `Buyer Indemnified Party" 'or "Seller Indemnified Party," as applicable, and the
"Indemnifying Party" shall refer to the party(ies)hereto obligated to indemnify such Indemnified
Parties. For purposes of this Agreement: "Loss(es)" shall mean any and all costs and expenses
(including, but not limited to, reasonable,professionals' fees), damages and. losses actually
incurred by the Indemnified Party, net of(i)any tax adjustments, benefits, savings or reductions,
and(ii)any insurance proceeds,in either case to which the Indemnified Party is entitled by virtue,
of such costs,,expenses, damages and losses; and"Indemnifiable Losses" shall mean any Loss
for or against which any patty is entitled to indemnification under this Agreement.
(a) In the event that any of the Indemnified Parties is made a defendant in or party
to any action or proceeding instituted by any third party, the liabilities for which are
Indemnifiable Losses (any such third party action or.proceeding being referred to as a
"Claim"), the Indemnified Party shall give the Indemnifying Party written notice thereof
within 30 days of its knowledge of the same. The failure to give such notice shall not
affect any Indemnified Party's ability to seek reimbursement unless (and then only to the
extent that) such failure has materially and adversely affected the Indemnifying Party's
ability to defend successfully a Claim. The Indemnifying Party shall be entitled to
contest and defend such Claim provided it diligently contests and defends such Claim.
Notice of the intention so to contest and defend shall be given by the Indemnifying Party
to the Indemnified Party within 30 business days after the Indemnified Party's notice of
such Claim (but, in all events, at least five business days prior to the date that an answer
to such Claim is due to be filed taking into account any extensions to file it responsive
pleading obtained by either party). Such contest and defense shall be conducted by
reputable attorneys employed by the Indemnifying Party at its sole cost and expense. The
Indemnified Party shall be entitled at any time, at its own cost and expense (which
expense shall not constitute a Loss), to participate in'such contest and defense and to be
J
vtl.ASsarruRCtiAss AaREEMMT 23
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represented by attorneys of its or their own choosing, provided, however, that if it does
not or ceases to conduct.the defense of such Claim actively and diligently, (i) the
Indemnified Party may defend against, and, with the prior written consent of the
Indemnifying Party (which consent will not be unreasonably withheld), consent to the
entry of any judgment or enter into any settlement with respect to, such claim, (ii)the
Indemnifying Party will reimburse the Indemnified Party promptly and periodically for
the costs of defending against such claims including attorneys' fees and expenses and(iii)
the Indemnifying Party will remain responsible for any Losses the Indemnified Party may
suffer as a result of such claim to the full extent provided in this Section. If the
Indemnified Party elects to participate in such defense, the Indemnified.Party shall .
reasonably cooperate with the Indemnifying Party in the" conduct of such defense:
Neither the Indemnified Party nor the Indemnifying Party may concede, settle or
compromise any Claim without the consent of the other party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, in the event the
Indemnifying Party fails or is not entitled to contest and defend a claim,the Indemnified
Party shall be entitled to contest, defend and settle such Claim in such riianner and on .
such terms as the Indemnified Party may deem appropriate.
(b) In the event any Indemnified Party should have a claim against any
Indemnifying Party that does not involve a Claim, the Indemnified Party shall deliver a
notice of such claim within 90 days of its knowledge of such claim to the Indemnifying
Party. "Included in such written notice will be a statement of the amount of the Loss,'a
brief explanation of the Loss, and instructions for payment by certified or bank cashier's
cheek or by wire transfer of immediately available funds. If the Indemnifying Party
-notifies the Indemnified Party that it does not dispute the claim described in such notice,
the Loss in the amount specified in the Indemnified Parry's notice shall be deemed a
liability of the Indemnifying Party and the Indemnifying Party shall pay the amount of
such Loss to the Indemnified party on demand.
9.4 Limits on Indemnification. With respect to any claims arising under Section 9.1
or Section 9.2, the Indemnified Party shall not be entitled to indemnification until the aggregate
Losses, suffered by such party exceeds $100,000*(the"Threshold"), and the Indemnifying Party
shall be liable for indemnification only until Indemnified Parry's Losses reach $500,000, after
which the Indemnifying Party shall have no further liability with respect to such Losses. Neither
party shall be entitled to assert a claim for recovery to the extent such claim is paid in whole by
insurance. The foregoing indemnity shall be the sole and only remedy of Seller or Buyer under
this Agreement,except as otherwise specifically provided herein.
9.5 Survival. This Article 9 shall survive the Closing and any termination of this
Agreement, except "as it may impose duties or obligations on Seller. The representations,
warranties, covenants, conditions and other provisions in this Agreement or in any writing
delivered to Buyer or Seller in connection with this Agreement shall survive the Closing Date for
a period of one (1)year. Any matter that is time4imited, but for which an Indemnified Party has
asserted a claim that is pending or unresolved at the end of any applicable limitation period will
continue to'be covered by this Article 9 notwithstanding any applicable statute of limitations
(which the parties hereto hereby waive) until the parties or a court-of competent jurisdiction
filially resolve such matter and any amounts payable hereunder are finally determined and paid. "
vii•ASSETPURCIIASEAGREEMNT 24
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Notwithstanding anything to the contrary in this Agreement,no provision of this Agreement that
imposes any duty or obligation upon Seller shall survive the Closing or any termination of this
Agreement.
9.6 Exclusive Remedy. This exclusive remedy for Buyer under this Agreement shall
be the indemnification obligation of Manager as set forth in this Article 9, and this Article 9 shall
be deemed to preclude or otherwise limit the exercise of any other rights or pursuit of other
remedies (in law or equity) by Buyer against Seller for the breach of this Agreement or with
respect to any misrepresentation by Seller.
9.7 Offset. If any matter as to which Buyer or Manager may be able to assert a claim
hereunder is pending or unresolved at the time any payment is due from one party to the other
(including under the Escrow Agreement relating to the Holdback Escrow); Buyer and Manager,
respectively, shall have the right, in addition to other rights and remedies (whether under this
Agreement or applicable law),to withhold or cause to be withheld from such payment an amount
or value equal to the amount of the claim (provided it has been or is then asserted iu writing
against Manager or Buyer, respectively, in accordance with the provisions of this Article.9) until
such matters are resolved. if it is finally determined that such claims are covered by this Article,
the amount of such claims may be offset against the retained payments and the remainder; if any,
shall be delivered to Buyer or Manager, as applicable.
ARTICLE 10
TERMINATION
10.1 Termination. This Agreement may be terminated at any time prior to the Closing:
(a) by mutual written consent of Buyer and Seller,or
(b) by Buyer if the conditions precedent to Closing set forth in Section 6.1 have
not been satisfied on or before the prescribed Closing Date, or by Seller if the conditions
precedent to.Closing set forth in Section 7.1 have not been satisfied on or before the
prescribed Closing Date.
10.2 . Effect of Termination. In the event of termination of this Agreement as provided
above, this Agreement shall forthwith become void, and there shall be no liability on the part of
Seller or Buyer except as otherwise expressly stated herein; provided, however, that this Section
' 10.2 shall not release (a) any party from any such liability,for a breach by such party of this
Agreement or (b) any party from its obligations under Article 9 and Sections 11.1, 11.2, 11.8,
12.2, 12.3, 12.6 and 12.10,except as otherwise provided therein.
ARTICLE 11
ADDITIONAL AGREEMENTS
11.1 Press Release and Announcements. No press release related to this Agreement or
the transaction contemplated hereby, or other announcements to the employees, customers or
suppliers of Seller, shall be issued without the joint approval of Buyer and Seller.
vt l-Assur PURCHmB AeRzemwT 25
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11.2 Confidentiality. if the transaction contemplated by this Agreement is not
consummated, Buyer shall maintain the confidentiality of all information and materials received
by it reasonably designated by Seller as confidential, and Buyer shall destroy or return to Seller
any materials (and Copies thereof) obtained from Seller in connection with the transaction
contemplated hereby. Whether or not the transaction contemplated hereby is consummated, .
Seller shall maintain the confidentiality of all information and materials regarding Buyer and its
Affiliates.- if the transaction contemplated by this Agreement is consummated, Seller shall
maintain .the confidentiality of all proprietary and other non-public information regarding the
Business and the Purchased Assets and shall turn over to Buyer all such materials in Seller's
possession. In addition;neither Seller nor any of its representatives shall make use of, divulge or
otherwise disclose, directly or indirectly, any confidential information concerning the Business
that may have been learned in their capacity as Seller or Seller's representatives, or members of
or investors in Seller, to persons other than Buyer, without Buyer's prior written consent.
Notwithstanding anything to the contrary in this Section, no party hereto is required to be keep
information confidential to the extent such information (a) was known by the recipient when
received, (b) is or hereafter becomes lawfully obtainable from other sources, or (e) is necessary
or appropriate to disclose to a governmental entity having jurisdiction over the parties.
11.3 Remittances. All remittances, mail and other communications relating to the
Purchased Assets received by Seller at any time after the Closing Date shall be immediately
turned over to Buyer. Seller shall cooperate with Buyer and take such actions as Buyer
reasonably requests to assure that customers of the Business send their remittances directly to
Buyer, and to assure that remittances from customers of the Business which are improperly sent
to Seller are not commingled with Seller's assets and are turned over to Buyer.
11*4 Waiver of Compliance with Bulk Sales Laws. Buyer hereby waives compliance
by Seller with the requirements of the bulk sales laws in connection with the sale of the
Purchased Assets to Buyer.
11.5 Tax Cooperation. After the Closing, Seller shall, and shall cause its Affiliates to,
cooperate fully with Buyer in the preparation of all Tax Returns and shall provide, or cause to be
provided at Seller's sole cost and expense, to Buyer any records and other information requested
by such parties iri connection therewith as well as access to, and the cooperation of, Seller's
accountant. After the Closing, Seller shall, and shall cause its Affiliates to, cooperate fully with
Buyer in connection with any Tax investigation, audit or other proceeding relating .to the
Business. Any information obtained pursuant to this Section 11.5 or pursuant to any other
Section hereof providing£or the sharing of information or the review of any Tax Return or other
schedule relating to Taxes shall be subject to Section 11.2.
11.6 Employment Matters.
(a) Employee Hiring. Buyer is under no legal obligation to employ any personnel
presently employed by Seller. Prior to the Closing Date, Seller will make available to
Buyer the employees of Seller at reasonable times and upon reasonable notice so that
Buyer may interview such employees. Buyer may offer employment to such persons
currently employed by Seller with respect to the Business as Buyer in its sole discretion
shall determine on such terms and conditions as may be mutually agreed upon by Buyer
26
vl1•ASSET PURCHASB AME M-T
WED 13;45 FAX 303 860 4602 BLACK CREFE CAP. 13J
0
and such employees. Seller shall use its best efforts.to assist Buyer in hiring any such
employees with respeotto whom Buyer elects to offer employment:.
(b) Employee Benefits. All obligations for compensation, wages, bonuses,
severance pay, vacation time, pay in lieu of vacation, sickness and accident benefits,
leaves of absence, and similar employee benefits provided by Seller shall be settled and
paid by Seller through the Closing Date.
(c) Worker Adjustment and Retraining Notification (WARN). Seller represents
and warrants that it has complied with any and all requirements under WARN. In
making this representation, Seller rhay assume that Buyer will initially hire or offer
employment to the persons associated with the Business listed on Schedule 3.14.
(d) No Third Party Beneficiaries. Notwithstanding any possible inferences to the
contrary, neither Seller nor Buyer intend for this Section to create any rights or
obligations except as between Seller and Buyer, and no past, present or future employees
of Seller or Buyer shall be treated as third-party beneficiaries of this Section.
11.7 Further Assurances of Seller. At any time and from time to time after the
Closing, at Buyer's request and without further consideration, Seller shall cooperate and execute
and deliver such other instruments or sale, conveyance, transfer, assignment and confirmation
and take such further action as Buyer may reasonably deem necessary or required in order to
effectively convey„transfer and assign to Buyer, and to confirm Buyer's title to, all of the
Purchased Assets of Seller,to put Buyer it actual possession and operating control thereof and to
assist Buyer in exercising all rights with respect thereto,provided the same is at no cost to Seller.
11.8• Arbitration. Any controversy, dispute or claim between the parties arising out of,
related to or in connection with this Agreement or the performance or breach hereof shall be
submitted to non-binding arbitration conducted by the American Arbitration Association in Los
Angeles, California, in accordance with its commercial arbitration rules as then in effect;
provided that the arbitration shall be conducted by a panel of three arbitrators. One arbitrator
shall be selected by Buyer, one by Seller, and a third selected by the agreement of the first two
arbitrators. The non-binding determination of the arbitrators shall be accompanied by a written
opinion of the arbitrators. Fees and expenses of the American Arbitration Association and of the
arbitrators shall be borne as shall be determined by the arbitrators.
11.9 Distribution of Assets. Seller must distribute the Purchase Price to its member
promptly,but no later than 48 hours,,after the Closing Date.
11.10 Affiliate. For purposes of this Agreement, "Affiliate" shall mean an individual or
entity that directly or indirectly,through one or more intermediaries, controls,or is controlled by,
or is under common control with,a specified individual or entity. For purposes of this definition,
"control" shall include, without limitation,, the exertion of significant influence over an
individual or entity and shall be conclusively presumed as to any 30%or greater equity interest.
11.11 Survival. This Article 11 shall survive the Closing or any termination of this
Agreement.
vi]•ASSET PURCHASE AGREEMENT 27,
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ARTICLE 12
MISCELLANEOUS
12.1 Amendment and.Waiver. This Agreement may be amended, and any provision of
this Agreement may be waived;provided that any such amendment or waiver shall be binding on
the party against whom the amendment is being asserted only if such amendment or waiver is set
forth in a.writing executed by such party against whom the amendment is being asserted and then
only to the specific purpose, extent and instance so provided. The parties hereto contemplate
that one or more amendments to this Agreement will be required after the Effective Date to
effect certain tax matters related to the Purchase Price.
12.2 Notices. All notices,demands and other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to
have been given when,personally delivered, when mailed by certified mail, return receipt
requested, when sent by telecopy with confirmation-of receipt received, or when delivered by
overnight courier with executed receipt. Notices, demands and communications to Seller or
Buyer shall, unless another address is specified in writing in accordance herewith, be sent to the
address indicated below:
Notices to Seller: Before and after the Closing:
Palm Springs FBO,LLC Palm Springs FBO, LLC
c/o Michael Shannon c/o William Janetschek
KSL Recreation Corp. KKR Real Estate Investors LLC
50905 Avenita Bermudas- 9 West 57' Street, Suite 4200
La Quinta, California 92253 New York,New York 16019
with a copy to:
Nola Dyal,Esq.
KSL Recreation Corp.
50905 Avenita Bermudas
La Quinta,'Califorma 92253
p� ,�10t WED 13:46 FAX 303 8694602 BLACK CREFR CAP. � Imo
Notices to Buyer:
FBOCO Holdings LLC FBOCO Holdings LLC
do Merced Partners Limited Partnership c/o Dave Ericson
601 Carlson Parkway, Suite 200 EBF&Assoc.
Minetonkn,Minnesota 55305 19 Benedict Place
Attn: Coleen McMahon Greenwich,CT 06830
Tel: (952)476-7221
Fax: (952)4764202
with a,copy to:
O'Melveny&Myers LLP
400 South Hope Street
Los Angeles, California 90071
Attn: Eric Richards
Tel: (213)430-6552
Fax: (213)430-6407
Notices to Manager:
Jeffrey W.Ross with a copy to:
518 17th Street, 17th Floor
Denver, Colorado 80202 Moye, Giles, O'Keefe,Vermeire&Gorrell
Tel: (303) 869-4700 LLP
Fax: (303) 869-4602 1225 17th Street, Suite 2900
Denver,Colorado 80202
Attn: Edward D. White III,Esq.
Tel: (303)292-2900
Fax: (303)292-4510
12.3 Assignment, This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns,but
neither this Agreement nor any of the rights, interests or obligations hereunder shall be
assignable by either party without the prior written consent of the other patty (except that Buyer
may assign its rights and obligations hereunder to a wholly-owned subsidiary).
12.4 Ca bons. . The captions used in this Agreement are for convenience of reference
only and do not constitute a part of this Agreement and shall not be deemed to limit, characterize
or in any way affect any provision of this Agreement, and all provisions of this Agreement shall,
be enforced and construed as if no caption had been used in this Agreement.
12.5 Complete Agreement, Schedules and Exhibits. Each schedule and exhibit
delivered pursuant to the terms of thi§Agreement shall be in writing and shall constitute a part of
this Agreement, although schedules need not be attached to each copy of this Agreement, 'Phis'
Agreement, together with such schedules and exhibits, and the documents referred to herein
contain the complete agreement between the parties and supersede any prior understandings,
vl l-ASSSP PURCHASE AQREEMM 29
067;40f WED 13:47 FAX 303 869 4602 BLACK CREFK CAP. �r
agreements or representations by or between the parties, written or oral, which may have related
to the subject matter hereof in any way.
12.6 Goveming Law. The laws of the State of California, without regard to conflict of
law doctrines, govern all questions concerning the construction, validity and interpretation of this
Agreement and the performance of the obligations unposed by this Agreement.
12.7 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an,original,but all of which together shall constitute one and the
same instrument.
12.8 Third Party Beneficiaries. Nothing in this Agreement is intended or will be
construed to entitle any person or entity, other than Buyer and Seller or their respective
transferees and assigns, to any claim, cause of action, remedy or right of any bind, except for
Manager in the case of Section 8.3(c).
12.9. Severabllity. The validity, legality or enforceability of the remainder of this
Agreement will not be affected even if one or more of the provisions of this Agreement will be
held to be invalid,illegal or unenforceable in any respect.
12.10 Costs and Attorneys' Fees. A prevailing party shall be awarded attorneys' fees
and costs in any proceeding brought after the Effective Date of this Agreement to enforce or to
interpret this Agreement.
[Signatures on Next Page]
J
vII•ASSET PURCHASE AUREEMENT 30
r_0.�4, 0}' WED 13;47 FAX 303 869 4602
DLACB-CMFK. CAP.
iN WIrms wmREOF, each of the patties hereto have caused this Agreement m be
duly cxecmd by duly authodzcd individuals as of the F.tfeeive Doe.
14pC}�Lvlfp
PALM SPRifi GS FBO,LLC,
a Delawam 16ted liaWty company
B)r ' Real FAUft Investors LLC
By:
e:William7„TanetSehek
T e: Member
0
.n�OR%�' !F0� 396D 13.47 FAZ 303 889 4602 BLACK CRBFK CAP; M �
. --a , ✓•arr rr moo.i., rib o'i,c4l TtoGo�'y �t�'j .. 9U2/0
• �i�j
IN WITNESS WHEREOF, the undersigned has signed this Agreement as of'the day and
year first above'writtaL
MERCED PARTNERS LIMITED,
'PARTNERSHIP
By: Global Capital Management, Inc.,
its General Partner
By: .s,�
Name:
Its:
tow
MAift"SON
4A1:974953A
DRAFT S?- 1
0 110
--1
,L�Riy CERTIFICATE OF LIABILITY INSURANCE
DATE(MHNDD/YVYY)
1zrN2Os2
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If
SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this
certificate does not confer rights to the certificate holder In lieu of such endorsement(s).
PRODUCER
Aon Risk Services Northeast, Inc.
Boston MA Office
CONTACT
AME:
NPHONE
FAX
(II.W.Ert): (865) 283-7122 (A/C (800) 3fi3-010fi
EMAIL
ADDRESS:
53 State Street
Suite 2201
INSUREfl(S) AFFORDING COVERAGE
NAIC N
Boston MA 02109 USA
INSURED
INSURER A: Starr Indemnity & Liability Company
38318
signature Flight Support LLC
13485 veterans way
suite 600
INSURER B:
INSURER C:
Orlando FL 32827 USA
INSURER D:
_
INSURER E:
INSURER F:
CUVFHAGFS CERTIFICAI In NIIMHEH[ !,/UU9b4hhUUH HEVISIUN NUMtlEH:
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. Limits shown are as requested
LTR
TYPE OF INSURANCE
SO
WVD
POLICY NUMBER
MWDDNYYY
DOn'Y
LAMS
COMMERCIAL GENERAL LIABILITY
EACH OCCURRENCE
CLAIMS -MADE ❑ OCCUR
PREMISES Ea aauaence
MED EXP (Any one person)
PERSONAL A AOV INJURY
GENL AGGREGATE LIMIT APPLIES PER:
GENERALAGGREGATE
POLICY [:]JEOCT F�LOC
PRODUCTS -COMI AGO
OTHER:
A
AUTOMOBILE LIABILITY
1000600306221
All other states
12/31/2022
12/31/2023
COMBINED SINGLE LIMIT
(E. aIcciftnn
$2,000,000
BODILY INJURY(Pwpemon)
A
ANYAUTO
1000600307221
12/31/2022
12/31/2023
BODILY INJURY(Pet acciden)
OWNED SCHEDULED
AUTI
AUTOS ONLY NHG
HIREDAUTOB Nor NEO
ONLY AUTOS ONLY
I
MA
PROPERTY DAMAGE
Per=Ident
Phys Damepe Dad
UMBRELLA LIAR
OCCUR
EACH OCCURRENCE
EXCESS LIAR
CLAIMS -MADE
AGGREGATE
DEO I RETENTION
A
A
WORKERS COMPENSATION AND
EMPLOYERS' LIABILITY
ANY PROPRIETOR I PARTNER, EXECUTIVE YIN
OFFICE"EMBER EXCLUDED? El
(Mandatory in NH)
NIA
1000002963
ADS
100GO02961
FL MA
12131170n
12/31/2022
1213112OZ3
12/31/2023
X
PER STATUTE
OTH.
E.LEACHACCIDENT
$2,000,000
E.L. DISEASE -EA EMPLOYEE
$2,000,000
It yea de ixi unrla,
DESCRIPTION OF OPERATIONS belor
E.L DISEASE -POLICY LIMIT
S2,000,000
DESCRIPTION OF OPERATIONS I LOCATIONS VEHICLES (ACORD 101, Addrdonal Remar" Schedub, may 6e attached it mono apace N raqukad)
Re: indenture of Lease and Aeronautical Concession Agreement #1764, Contract Term - 12/15/81-12/14/2021. The City of Palm
springsis added as Additional Insured excluding workers' compensation and Employers' Liability as required by written contract
but limited to the operations of the Insured under said contract, and always subject to the policy terms, conditions and
exclusions. Automobile Liability only applies to vehicles that are licensed for use on public roads and only for auto accidents
that occur while on a public road.
CERTIFICATE HOLDER RFCEIVED CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE
JAN 0 3 2023
POLICY PROVISIONS.
City of Palm Springs AUTHORIZED REPRESENTATIVE
Attn: Patricia sanders City Hall
office of the city Clerk Reception Desk �,J �p //•�
3200 SprinTanqugs Can on way 4j�. e.7 c/i-
Palm Springs U 92262 USA /EaTAleleN #MEl
v
N
I
01988-2015 ACORD CORPORATION. All rights reserved.
ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD
AGENCY CUSTOMER ID: 570000035015
LOC #:
4C �® ADDITIONAL REMARKS SCHEDULE
Page _ of _
AGENCY
Aon Risk services Northeast, Inc.
NAMEDINSURED
Signature Flight Support LLC
POLICY NUMBER
see certificate Number: 570096955008
CARRIER
see certificate Number: 570096955008
NAIC CODE
EFFECTIVE DATE'
1
ADDITIONAL REMARKS
FORM NUMBER: ACORD 25 FORM TITLE: Certificate of Liability Insurance
INSURER(S) AFFORDING COVERAGE
NAIC #
INSURER
INSURER
INSURER
INSURER
II ADDITIONAL POLICIES If a policy below does not include limit information, refer to the corresponding policy on the ACORD
certificate form for policy limits.
ISSR
I.TR
TYPE OF INSURANCE
,YUOL
INSD
SC RR
WVD
WFL.ICY NUMBER
POLICY
EFFECTIVE
UA'1'E
I\IMND/VYYVI
POLICY
EXPIRATION
DATE
UtNINU/YY\'YI
LIAI ITS
WORKERS COMPENSATION
A
N/A
1000002960
WI
12/31/2022
12/31/2023
4CORD 101
All rwhta
The ACORD name and logo are registered marks of ACORD
�1
A✓ �`` CERTIFICATE OF LIABILITY INSURANCE
DATE(MWDDIYYYY)
12122/2022
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If
SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this
certificate does not confer rights to the certificate holder in lieu of such endorsement(s).
PRODUCER
Aon Risk Services Northeast, Inc.
Boston MA Office
CONTACT
AME.
NPHONE
IAC. No. Eat): (866) 283-7122 as Ne : (800) 363-0105
E-MAIL
ADDRESS:
S3 State Street
suite 2201
INSURER(S) AFFORDING COVERAGE
NAIC;F
Boston MA 02109 USA
NAMED
INSURER A: Starr Indemnity & Liability Company
38318
Signature Flight Support LLC
13485 veterans way
suite 600
INSURER B:
INSURER C:
Orlando FL 32827 USA
INSURER D:
INSURER E:
INSURER F:
COVERAGES CERTIFICATE NUMBER: 570096955008 REVISION NUMBER:
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. Limits shown are as requested
MR
LT
TYPE OF INSURANCE
INSD
WVD
POLICY NUMBER
9NUM YY
MMDO'YYY1'I
LIMITS
DOM,IERCIAL GENERAL LIABILITY
EACH OCCURRENCE
CLMMS-MADE ❑ OCCUR
PREMISES Ea=unmxe
MED EXP (Arty mM person)
PERSONAL & ADV INJURY
GENLAGGREGATE LIMIT APPLIES PER:
GENERALAGGREGATE
PR
POLICY JCaT LOG
PRODUCTS - COMPIOPAGG
OTHER:
•
AUTOMOBILE LIABILITY
1000600306221
All other states
12/31/2022
12/31/202 3
COMBINED SINGLE LIMIT
Ea iixidene
$2,000,000
BODILY INJURY( Per person)
•
AUTO
1000600307221
12/31/2022
12/31/2023
IANY
OWNED SCHEDULED
AUTOS ONLY AUTOS
HIREDAUTOS NOWOWNED
ONLY AUTOS ONLY
MA
BODILY INJURY(PW MidenD
PROPERTY DAMAGE
Pm amklent
m,r.D.m Dwl
UMBRELLA LIAR
OCCUR
EACH OCCURRENCE
AGGREGATE
EXCESS LIAR
CIAIMS-MDE
IDED1 RETENTION
•
A
WORKERS COMPENSATION MD
EMPLOYERS'LIABILRY YIN
ANY PROPRIETOR I PARTNER I EXECUTIVE
OFFICER MEMBER EXCLUDED? El
(ManMtory In NH)
NIA
1000002963
ADS
1000002961
FL MA
1
12/31/2022
12/31/2023
X
PER STATUTE
TH.
E.L EACH ACCIDENT
$2,000,000
E.L OLEASE-EA EMPLOYEE
S2,000,000
II yes, describe urder
DESCRIPTION OF OPERATIONS below
E.L DISEASE-P000Y LIMIT
S210001000
DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACGRD 101, Addmonal Remarks Schedule, may M attached 9 mere apex, M repulrsd)
Re: Indenture of Lease and Aeronautical Concession Agreement M1764, contract Term - 12/15 81-12/14/2021. The City of Palm
springs is added as Additional Insured excluding workers' compensation and Employers' Liability as required by written contract
but limited to the operations of the Insured under said contract, and always subject to the policy terms, conditions and
exclusions. Automobile Liability only applies to vehicles that are licensed for use on public roads and only for auto accidents
that occur while on a public road.
CERTIFICATE HOLDER CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE
POLICY PROVISIONS.
'Yk city of Palm springs AUTHORIZED REPRESENTATIVE
,•? Attn: Patricia Sanders
office of the city Clerk ^�
3200 Springs can on way
Palm springs CA 92262 USA i/J.�.M1�E iN.NLiek4c/1 sMp
d
J7988-2015 ACORD CORPORATION. All rights reserved.
ACORD 25 (2016103) The ACORD name and logo are registered marks of ACORD
AGENCY CUSTOMER IO: 570000035015
LOC #:
ADDITIONAL REMARKS SCHEDULE
Page _ of _
ACORD 101 (2008'01) � 2008 ACORD CORPORATION. All rights reserved.
The ACORD name and logo are registered marks of AC ORD