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HomeMy WebLinkAbout02636 - AP PALM SPRINGS LLC PEACOCK RADAKER CORP AIRPORT LEASE TM 14573 ABBEY DOC# 2017-0420961 1 0/1 11201 7 08:00 AM Fees: $66.00 Page 1 of 13 Recorded in Official Records County of Riverside Peter Adana Assessor-County Clerk-Recorder AeCadlnO Requested ilr: Wet knerlom me Ieaumr0 tAwf" National Commemid!Sv*ss "This document was electronically submitted &Pic NM 4CAVI ,l to the County of Riverside for recording" IaAnpelm,G900i7 %) Qb Receipted by:KIYOMI#289 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Polsinelli PC Attention:Jason Kaplan 150 N.Riverside Plaza,Suite 3000 Chicago,IL 60606 Space above for Recorder's use GROUND LESSOR'S CONSENT,NON-DISTURBANCE AND ATTORNMENT,RECOGNITION AND ESTOPPEL AGREEMENT This GROUND LESSOR'S CONSENT, NON-DISTURBANCE AND ATI'ORNMBNT, RECOGNITION AND ESTOPPEL AGREEMENT(thus"AAmement")is dated as of October 5,2017,by and among CITY OF PALM SPRINGS, a municipal corporation ("Lessor"), CMK CIELO, LLC, a Delaware limited liability company ("Lessee's, and CAPITAL ONE, NATIONAL ASSOCIATION, a national banldng association ("Agent'D, as agent for itself and each of the lenders (each a"Lender" and collectively "Lenders') under the Loan Agreement by and between Agent, Lenders and Lessee as "Borrower"dated as of October 5, 2017 ("Loan Agreement"), with reference to the following facts and circumstances: A. Lessor and Lessee are parties to: (i) that certain Indenture of Lease Agreement No. 2528 dated as of May 1, 1988, as amended by that certain First Amendment to Lease Agreement#2528 dated as of April 28, 1993, that certain Second Amendment to Lease Agreement#2528 dated as October 21, 1993, that certain Third Amendment to Lease Agreement #2528 dated as of December 15, 1993, that certain Fourth Amendment to Lease Agreement No. 2528 dated as of October 25, 2000, that certain Agreement and Estoppel of Ground Lessor for Lease No. 2528 dated as of January 7, 2002,that certain Amendment and Ground Lessor's Consent,Non-Disturbance and Attornment, Recognition and Estoppel Agreement dated as of July 25,2014,and recorded July 29,2014,in the real property records of Riverside County, California, as Instrument No. 20140283309, and that certain Assignment and Assumption of Lease Agreement No. 2528 and Consent to Assignment dated as of July 25, 2014 (collectively, "Lease 2528"); (ii)that certain Indenture of Lease Agreement No. 2529 dated as of May 1, 1988, as amended by that certain First Amendment to Lease Agreement#2529 dated as of April 28, 1993,that certain Second Amendment to Lease Agreement #2529 dated as October 21, 1993, that certain Third Amendment to Lease Agreement #2529 dated as of December 15, 1993, that certain Fourth Amendment to Lease Agreement No. 2529 dated as of October 25, 2000, that certain Agreement and Estoppel of Ground Lessor for Lease No. 2529 dated as of January 7, 2002, that certain Amendment and Ground Lessor's Consent, Non-Disturbance and Attornmeat, Recognition and Estoppel Agreement dated as of July 25, 2014, and recorded July 29, 2014, in the real property records of Riverside County, California, as Instrument No. 20140283309, and that certain Assignment and Assumption of Lease Agreement No. 2529 and Consent to Assignment dated as of July 25, 2014 (collectively, "Lease 2529' ; and (iii) that RECOGNITION AGREEMENT-Page 1 Desert Oasis i 59349300A certain Indenture of Lease Agreement No. 2636 dated as of November 3, 1988, as amended by that certain Amendment No. 1 to Indenture of Lease Agreement No. 2528 dated as of January 2, 1991, that certain Second Amendment to Lease Agreement #2636 dated as October 21, 1993, that certain Third Amendment to Lease Agreement#2636 dated as of December 15, 1993,that certain Fourth Amendment to Lease Agreement No. 2636 dated as of October 25, 2000, and that certain Agreement and Estoppel of Ground Lessor for Lease No. 2636 dated as of January 7, 2002, that certain Amendment and Ground Lessor's Consent, Non-Disturbance and Attornment, Recognition and Estoppel Agreement dated as of July 25,2014,and recorded July 29,2014,in the real property records of Riverside County,California,as Instrument No. 20140283309, and that certain Assignment and Assumption of Lease Agreement No. 2636 and Consent to Assignment dated as of July 25, 2014 (collectively, "Lease 2636") (Lease 2528, Lease 2529 and. Lease 2636, each as amended and as may be hereafter amended from time to time, individually, each a"Current Ground Lease"and collectively, the"Current Ground Leases"),pursuant to which Lessor has leased to Lessee, and Lessee has leased from Lessor, certain real property in the City of Palm Springs, Riverside County, California, as more particularly described on Exhibit A attached hereto (the"Prop Lessor and Lessee desire to amend the Current Ground Leases as more particularly set forth herein. B. Pursuant to that certain Leasehold Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of October 5, 2017 (the "Deed of Trust"), made by Lessee, as trustor, to First American Title Insurance Company, as trustee, for the benefit of Agent in its capacity as Agent for the Lenders, as beneficiary, Lessee is granting a lien to Agent, for the benefit of Lenders, on all of Lessee's right, title and interest in the Property and the Current Ground Leases (the "Tenant's Estate"). It is the intent of Lessor and Lessee by way of this Agreement to provide certain rights to Agent (and any successor-in-interest to Agent, whether by designation, assignment, refinancing or otherwise) and Lenders with respect to the Current Ground Leases that they might not otherwise have as the holder of an encumbrance on the Property ("Encumbrance Holder"). Accordingly,this Agreement shall be interpreted as providing additional protections for the benefit of Agent, Lenders and their permitted assigns and the other parties hereto, Agent confirms and agrees that the Deed of Trust will not encumber or create a lien on the fee interest of Lessor in the Property or on any interest of Lessor as "Lessor"under the Current Ground Leases. C. In this Agreement, (1)the term"Tenant"shall mean and be deemed to refer to the holder of Tenant's Estate during any time that any obligation of Lessee to Agent and/or Lenders which is secured by the Deed of Trust remains unsatisfied, (ii)the term"Transfer of the Property" shall mean any transfer of Tenant's interest in the Property, including,but not limited to Tenant's right,title and interest under the Current Ground Leases, by foreclosure, trustee's sale or other action or proceeding for the enforcement of the Leasehold Mortgage(as hereinafter defined) or by deed or assignment in lieu thereof, and (iii) the term"Purchaser", shall mean any transferee, including Leasehold Mortgagee (as hereinafter defined), of the interest of Tenant as a result of any such Transfer of the Property and also includes any and all successors and assigns, including Agent or Lenders, of such transferee, (iv) the term "Leasehold Mortgagee" shall mean Agent and Lenders, collectively, and any successor-in-interest to Agent or Lenders, whether by designation, assignment, refinancing or otherwise, and (v) the term "Leasehold Mortgage"shall mean the Deed of Trust and any corresponding successor thereto. NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged,the parties hereto hereby agree as follows: I. Lessor's Consent to Leasehold Mortgage.Lessor hereby consents to the lien of the Deed of Trust upon Lessee's interest under the Current Ground Leases, Agent confirms and agrees that the Deed of Trust will not encumber or create a lien on the fee interest of Lessor in the Property or on any interest of Lessor as "Lessor" under the Current Ground Leases. Lessor hereby consents to the assignment of the RECOGNITION AGREEMENT-Page 2 Desert Oasis Lessees leasehold interest under the Current Ground Leases pursuant to the terms of the Deed of Trust. Lessor acknowledges and agrees that any limitations set forth in the Current Ground Leases regarding the Transfer of the Property or the sale or transfer of Lessee's interest thereunder shall be inapplicable to any sale of Lessee's interest under the Current Ground Leases which may be effected in connection with any judicial or non judicial foreclosure of the Deed of Trust_ The Current Ground Leases may be assigned without Lessor's further consent to Agent, any Lender or to any other person or entity, pursuant to a foreclosure of, or trustee's sale under the Deed of Trust, or pursuant to an assignment of Lessee's interest in Current Ground Leases in lieu of foreclosure. 2. Request for Notices. Agent shall be deemed to have requested notice under the Current Ground Leases for all notices that are either required to be given under the terms of the Current Ground Leases or which are specifically authorized to be given under Current Ground Leases in order for a party to pursue its rights. This includes,without limitation, any notice of default,notice to terminate and any other notice under the Current Ground Leases which is required to implement any term of the Current Ground Leases or to make any election provided in the Current Ground Leases. Lessor and Lessee shall deliver or mail in the United States mail, postage prepaid, to Agent a duplicate and concurrent copy of any such notice. Agent shall not be required to make any further request for notice. 3. Non-Disturbance. Lessor agrees that the enforcement of the Deed of Trust shall not terminate the Current Ground Leases or disturb any Purchaser, including Agent or any Lender if it should be the Purchaser, in obtaining the right of, and continuing as, lessee (as successor-in-interest to Lessee) in the possession and use of the Property,unless,after such foreclosure,such Purchaser fails to cure any default under the Current Ground Leases susceptible to cure by such Purchaser, in accordance with the terms of this Agreement.This non-disturbance applies to any option to extend or renew the Current Ground Leases term which is set forth in the Current Ground Leases as of the date of this Agreement, or which is later entered into between Lessor and Lessee with the consent of Agent.This non-disturbance shall be effective and self-operative without the execution of any further instruments upon Purchaser's succeeding to the interest of the lessee under the Current Ground Leases. Upon completion of any foreclosure or trustee's sale proceedings by Agent or Lenders under the Deed of Trust (or completion of an assignment of the Current Ground Leases in lieu of foreclosure), Lessor will recognize Agent, Lenders, or any successor thereby to Lessee's interest in the Current Ground Leases, as the lessee under the terms of the Current Ground Leases for all purposes thereunder and for the remaining term thereof. 4. Attomment. Subject to Section 3 above, if any Transfer of the Property should occur, any Purchaser,including Agent or Lenders,if either should be the Purchaser, shall,and hereby does, attom to Lessor, as the landlord under the Current Ground Leases, and Purchaser shall be bound to Lessor under all of the terms, covenants and conditions of the Current Ground Leases for the balance of the Current Ground Leases'respective terms and any extensions or renewals of it which may then or later be in effect under any validly exercised extension or renewal option contained in the Current Ground Leases, all with the same force and effect as if Purchaser had been the original lessee under the Current Ground Leases. S. Limitation on Agent's Performance; Agent's Rights Prior to Foreclosure. Nothing in this Agreement shall be deemed to construed to be an agreement by Agent or Lenders to perform any covenant of Lessee as lessee under the Current Ground Leases,unless and until Agent or Lenders become a Purchaser and succeeds to the rights and obligations of lessee under the Current Ground Leases Lessor agrees that, if Agent or Lenders become a Purchaser, then, upon subsequent transfer of the Property by Agent or Lenders to a new owner, Agent or Lenders shall have no further liability under the Current Ground Leases after said transfer.Agent or Lenders may,but shall not be required to,pay any of the rent due under the Current Ground Leases, procure and maintain any insurance, pay any taxes or other impositions,make any repairs or improvements,make any election(such as an election to extend the term or coverage of the Current Ground Leases, if that were provided in the Current Ground Leases), and do RECOGNITION AGREEMENT-Page 3 Desert Oasis any other act required of Lessee by the terms of the Current Ground Leases in order to cure a default of Lessee,prevent a forfeiture of the Current Ground Leases, or otherwise protect its interest in the Tenant's Estate.Any such payment or act by Agent or Lenders shall be as effective hereunder as if done by Lessee, and may be done by Agent or Lenders without assuming the obligations of Lessee under the Current Ground Leases and without causing a default under the Current Ground Leases, and Lessor shall accept such payment or act by or at the instance of Agent or Lenders as if the same had been made by Lessee. In this regard,Agent or Lenders,pursuant to the terms of the Deed of Trust and for purposes of protecting its interest in the Tenant's Estate,may seek a court-appointed receiver to enter into possession and contra' of the Property. 6. Limitation of Agents Obligations. Agent or Lenders, if they become the Purchaser or if they take possession under the Deed of Trust, or any other Purchaser, shall not (a) be liable for any damages or other relief attributable to any act or omission of any prior lessees under the Current Ground Leases, including Lessee (excepting the cure of existing defaults under the Current Ground Leases to the extent that such Purchaser has knowledge of such defaults and such defaults are susceptible to cure); or (b) be bound by any modification or amendment of or to the Current Ground Leases unless the amendment or modification shall have been approved in writing by Agent. 7. Mortgagee Protection Provisions. Agent or Lenders shall be deemed to be a third party beneficiary of the Current Ground Leases with respect to any and all provisions of the Current Ground Leases, if any, which benefit a lender ("Mortgagee Protection Provisions'). This section is intended to supplement and not to limit any Mortgagee Protection Provisions in the Current Ground Leases. Notwithstanding anything to the contrary in the Current Ground Leases, Lessor may terminate the Current Ground Leases because of a default thereunder (where termination is an available remedy under the Current Ground Leases) only after Lessor, in accordance with the Current Ground Leases and this Agreement, has delivered or mailed notice of such termination to Agent at the address set forth herein, specifying such default, and Agent and Lenders shall have the cure rights provided in the Mortgagee Protection Provisions of the Current Ground Leases. 8. No Amendments. (a) So long as the Deed of Trust is in effect, then except with respect to termination of the Current Ground Leases as a result of a default as permitted herein,the Current Ground Leases will not be voluntarily canceled, surrendered, terminated, amended, modified or in any manner altered, or any provisions thereof waived or deferred by Lessee, without the prior written consent of Agent, which consent shall not be unreasonably withheld,conditioned or delayed. (b) Lessor and Lessee covenant and agree to cooperate in executing such additional documents as may reasonably be requested by Agent as are reasonably necessary and are for the purpose of implementing the Current Ground Leases and this Agreement, including, without limitation, the Mortgagee Protection Provisions contained in the Current Ground Leases or herein and allowing Agent reasonable means to protect or preserve the lien of the Deed of Trust on the occurrence of a default by Lessee hereunder. 9. No Merger. So long as the Deed of Trust is in effect,Tenant's Estate will not merge with Lessor's fee estate in the Property by reason of the fact that (a) Tenant's Estate is acquired by Lessor, or (b) Lessor's fee estate is acquired by Lessee,and no merger shall otherwise operate to defeat any lien held by Agent or Lenders. While the Deed of Trust is in effect, Lessor shall not transfer its fee interest in the Property unless such transfer is made subject to the Current Ground Leases and this Agreement. RECOGNITION AGREEMENT-Page 4 Desert Oasis 10. Sublease. Lessor hereby consents to Lessee's grant to Agent and Lenders of a security interest in the personal property owned by Lessee and located at the Property and a collateral assignment of subleases by Lessee of all or any portion of the Property and the rents,issues and profits therefrom,if any. Lessor agrees that any interest Lessor may have in such personal property or subleases, as the case may be, whether granted pursuant to the Current Ground Leases or by statute, shall be subordinate to the interest of Agent and Lenders under the Deed of Trust. For so long as the Current Ground Leases or any new lease shall be in effect, Lessor shall not disturb the possession, interest or quiet enjoyment of any subtenant. 11. Insurance Proceeds; Condemnation Awards. Notwithstanding anything to the contrary in the Current Ground Leases, in the event of any damage to or destruction of the Property or any portion thereof or interest therein, upon the request of Agent, the proceeds of Lessee's insurance shall be deposited with Agent and shall be applied in accordance with the applicable provisions of the Deed of Trust, It is understood and acknowledged that the failure to apply the insurance proceeds to repair and reconstruction of the Property shall not limit, restrict or in any way waive Lessee's obligation to repair and reconstruct the Property following an event of damage and destruction as more specifically provided in the Current Ground Leases. Lessor acknowledges that Lessee's interest in its portion of any condemnation proceeds to which it is entitled under the Current Ground Leases shall be applied in accordance with the applicable provisions of the Deed of Trust and the Loan Documents (as defined in the Deed of Trust). Nothing herein shall be construed to effect, in any way, any separate insurance or condemnation proceeds payable to Lessor based upon Lessor's fee interest in the Property, or otherwise separate insurance or condemnation proceeds from those proceeds attributable to Lessee's leasehold estate in the Property and interest in the improvements located thereon. 12. Recourse Against Agent. Lessor's recourse against Agent or Lenders shall be expressly limited to Agent's or Lender's interest in the Current Ground Leases. 13. Ground Lessor's Estoppel Certificate. (a) True and Complete Lease. Lessor represents and warrants to Agent, Lenders and Lessee that Recital A above accurately identifies the Current Ground Leases and all amendments, supplements, side letters and other agreements and memoranda pertaining to the Current Ground Leases, the leasehold estate and/or the Property. (b) No Default. As of the date of this Agreement, Lessor represents and warrants that,to the best of Lessor's knowledge, there exist no events of default or events that, with notice or the passage of time or both,would be events of default under the Current Ground Leases on the part of Lessor or Lessee. Lessor represents and warrants that the Current Ground Leases are in full force and effect as of the date of this Agreement. (c) No Other Leases. To the best of Lessor's knowledge and belief, as of the date of this Agreement, there are no leases, options or other agreements regarding transfer of any interest in, or otherwise materially affecting the Property other than the Current Ground Leases. (d) Desert Oasis Leases. Lessor has approved (i) that certain lease agreement dated March 15, 2010 entered into by Desert Medical Group, Inc., a California corporation, as tenant, for certain premises located at 265 N. El Cielo Road,Palm Springs, California; and(ii)that certain lease agreement dated March 13, 1989(as amended)entered into by Desert Medical Group, Inc., a California corporation, as tenant,for certain premises located at 255 and 275 N.El Cielo Road,Palm Springs,California. RECOGNITION AGREEMENT-Page 5 Desert Oasis (e) No Advance Payments. No rent or other sums payable under the Current Ground Leases have been paid more than thirty(30)days in advance. (f) No Prior Assignments. Lessor has not received notice of any prior assignment, hypothecation or pledge of Lessee's interest in the Current Ground Leases. (g) No Pending Litigation/Violations. Lessor has not received notice of any litigation pending,proposed or threatened against or in connection with the Property or the Current Ground Leases. Lessor has not sent or,to the best of Lessor's knowledge and belief, received any written notice that the. Property,or any part thereof, is in violation of any laws, ordinances or regulations which could materially affect any of Lessee's rights or materially increase any of Lessee's obligations under the Current Ground Leases. (h) Hazardous Substances. Except for such legal and commercially reasonable use by Lessor, Lessee and any subtenant,Lessor has no actual knowledge that any Hazardous Substance is present or has been used, generated, released, discharged, stored or disposed of by any party on, under, in or about the Property. As used herein, "Hazardous Substance" means any substance, material or waste (including petroleum and petroleum products), which is designated, classified or regulated as being "toxic" or "hazardous" or a"pollutant" or which is similarly designated, classified or regulated under any federal, state or local law, regulation or ordinance. (i) Options to Extend. Except as specified in the Current Ground Leases,Lessee has no other option to extend or renew the term of the Current Ground Leases. 0) Rent.The current monthly base rents currently payable under the Current Ground Leases for 2017 are as follows: (i) Lease 2528 - $8,092.00; (ii) Lease 2529 - $8,092.00; and (iii) Lease 2636 - $8,092.00. There has been no percentage rent paid or payable under the Current Ground Leases for 2015 and 2016. As of the date of hereof, all other sums due and payable by Lessee under the Current Ground Leases have been paid. (k) Purchase Option. Lessor has no purchase options under the Current Ground Leases. (1) Expiration Date. The expiration dates for each Current Ground Lease is October 31, 2037, and each Current Ground Lease has four extension options, the first extension option being for ten (10)years, the second extension option being for eight (8) years,the third extension option being for ten (10)years and the fourth extension option being for ten(10)years. (m) Construction.The construction of the buildings and related improvements on the Property as required by the terms and provisions of the Current Ground Lease has been completed to the satisfaction of Lessor. 14. Conflicts; Successors and Assigns. In the event of any conflict or inconsistency between the provisions of the Current Ground Leases and the provisions of this Agreement,the provisions of this Agreement shall control. This Agreement (including but not limited to the estoppel provisions in Section 13 above) shall be binding upon and shall inure to the benefit of the parties hereto and their respective beneficiaries, successors and assigns. 15. Authorization. Lessor and Lessee represent that Lessor and Lessee each have the necessary power and authority to execute this Agreement and each have obtained all of the consents or approvals of all parties necessary to effectuate the terms of this Agreement. RECOGNITION AGREEMENT-Page 6 Desert Oasis 16. Termination of Agreement. This Agreement shall terminate when the obligations secured by the current Leasehold Mortgage have been paid in full; it being understood and agreed that this Agreement shall survive any transfer or assignment of Tenant's interest in the Current Ground Leases. 17. Address of Agent. Capital One,National Association 77 West Wacker Drive, 1 Oth Floor Chicago,Illinois 60601 Attention:Daniel Eppley, Senior Director Facsimile:(855)544-4044 Reference:MB CBRE-Desert Oasis With a copy to: Capital One,National Association 77 West Wacker Drive, 1 Oth Floor Chicago,Illinois 60601 Attention: Jeffrey M.Muchmore,Credit Executive Facsimile: (855)332-1699 Reference:MB CBRE-Desert Oasis With a copy to: Capital One,National Association 5804 Trailridge Drive Austin,Texas 78731 Attn: Diana Pennington, Senior Director,Associate General Counsel Facsimile: (855)438-1132 Reference: MB CBRE-Desert Oasis 18. Integ_ration. This Agreement integrates all of the terms and conditions of the parties' agreement regarding Lessor's consent to the Deed of Trust, attornment, nondisturbance, and the other matters contained herein. This Agreement supersedes and cancels all oral negotiations and prior and other writings with respect to such attornment, non-disturbance and other matters contained herein. This Agreement may not be modified or amended except by a written agreement signed by the parties or their respective successors-in interest. 19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original,but all of which together constitutes one and the same instrument. [Signatures appear on following page.] RECOGNITION AGREEMENT-Page 7 Desert Oasis IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date first set forth above. LESSOR: CITY OF PALM SPRINGS, APPROVED AS TO FORM ae)!Au�Corjporatiiop 43 Y. ✓� �7J+�- D 7. yd; ity Attorney Name: Date: Title: ( elm .j —� ATEBfi APPROVED BY CITY COUNCIL City ei&k ATTEST: L T=Vl� APPROVED BY CITY COUNCIL City Clerk AM 1g. R�w�19 Ra538,�AMM)Aa.� vwWL_- NOTARY ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document. State of California ) County of ) On before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Signature of Notary Public NOTARY SEAL RECOGNITION AGREEMENT-Signature Page Desert Oasis ACKNOWLEDGMENT OF INSTRUMENT (Cal. Civil Code Section 1181) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of Riverside ) ss. City of Palm Springs ) On September 28, 2017, before me, KATHLEEN D. HART, INTERIM CITY CLERK, CITY OF PALM SPRINGS, CALIFORNIA, personally appeared DAVID H. READY, who I personally know is the CITY MANAGER of the CITY OF PALM SPRINGS whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his official and authorized capacity on behalf of the City of Palm Springs, a California Charter City. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and the official seal of the City of Palm Springs, California, this 28th day of September, 2017. o t PALM SAA � c h � #A01A O M Signature: 1Vr_— — — _...�,.�ry2 cgtIFORN�P KATHLEEN D. HART, MMC Interim City Clerk Title or Type of Document Ground Lessor's Consent, Non-Disturbance and Attornment, Recognition and Estoppel Agreement TENANT: CMK CIELO,LLC,a Delaware limited liability company By: Name: Gregg Gr es Title:Duly Autho d Signatory STATE OF ILLINOIS ) )ss. COUNTY OF_�_) This instrument was acknowledged before me on SeptembeQ 2017,by Gregg Graines as Duly Authorized Signatory of CMK CIELO,LLC,a Delaware limited liability company. IN WITNESS WHEREOF,I have hereunto set my hand and affixed my official seal,the day and year last above written. Notary Public in and for Said County and State V, Calu UPCf-\Stm (Type,print or stamp the Notary's name below his or her signature) My Commission Expires: MICHELLE ROBERTSON t tG OFFICIAL SEAL Notary Public,state of Illinois My Commission Expires November 03,2019 RECOGNITION AGREEMENT—Signature Page Desert Oasis APPROVED BY AGENT: CAPITAL ONE,NATIONAL ASSOCIATION,a national banking association BYY I J1 X _Q p At u le: Carleen Malfettone Title: Duly Authorized Signatory STATE OF ILLINOIS ) ss. COUNTY OF COOK ) This instrument was acknowledged before me on Septembedl 2017, by Carleen Malfettone as Duly Authorized Signatory of Capital One,National Association,a national banking association. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal,the day and year last above written. M ,, \,�Public in and for,aid County and State ' e r�SA IMCAL(4�iol (Type,print or stamp the Notary's name below his or her signature) My Commission Expires: S d TERESA C MARTIN Official seal Notary Public•Stale of Illinois My ECommission Expxp May 11,Y020 RECOGNITION AGREEMENT—Signature Page Desert Oasis EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property in the City of Palm Springs,County of Riverside, State of California,described as follows: PARCEL ONE: LOT 1 OF TRACT NO. 14573,IN THE CITY OF PALM SPRINGS,COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 109,PAGES 97 AND 98 OF MAPS,RECORDS OF RIVERSIDE COUNTY,CALIFORNIA. EXCEPT THEREFROM ALL URANIUM,THORIUM AND ALL OTHER MATERIALS DETERMINED PURSUANT TO SECTION 5(B)(1)OF THE ATOMIC ENERGY ACT OF 1940(60 STAT. 761)TO BE PECULIARLY ESSENTIAL TO THE PRODUCTION OF FISSIONABLE MATERIAL,AS RESERVED BY THE UNITED STATES OF AMERICA IN DEED RECORDED NOVEMBER 28, 1949 IN BOOK 1127,PAGE 236 OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. POSSESSORY INTEREST NO.: 009-606-988-8; FEE APN: 502-150-010-2 PARCEL TWO: A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS,FOR VEHICULAR INGRESS AND EGRESS, AND FOR THE RIGHT TO USE DESIGNATED WALKWAYS, DRIVEWAYS AND PARKING AREAS, AS SUCH IMPROVEMENTS EXIST FROM TIME TO TIME,IN LOTS 2 AND 3 OF TRACT NO. 14573,AS SHOWN BY MAP ON FILE IN BOOK 109, PAGES 97 AND 98 OF TRACT MAPS,RECORDS OF RIVERSIDE COUNTY,CALIFORNIA, SUCH EASEMENT TO EXTEND TO LESSEE,ITS SUCCESSORS AND ASSIGNS,LESSEE'S SUBTENANTS,THEIR LICENSEES AND BUSINESS INVITEES. PARCEL THREE: LOT 2 OF TRACT NO. 14573,IN THE CITY OF PALM SPRINGS,COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,AS SHOWN BY MAP ON FILE IN BOOK 109,PAGES 97 AND 98 OF MAPS,RECORDS OF RIVERSIDE COUNTY,CALIFORNIA. EXCEPT THEREFROM ALL URANIUM,THORIUM AND ALL OTHER MATERIALS DETERMINED PURSUANT TO SECTION 5 (B)(1)OF THE ATOMIC ENERGY ACT OF 1940(60 STAT.761)TO BE PECULIARLY ESSENTIAL TO THE PRODUCTION OF FISSIONABLE MATERIAL,AS RESERVED BY THE UNITED STATES OF AMERICA IN DEED RECORDED NOVEMBER 28, 1949 IN BOOK 1127,PAGE 236 OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. POSSESSORY INTEREST NO.: 009-613-349-3,FEE APN: 502-100-011-3 PARCEL FOUR: A NONEXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS,FOR VEHICULAR INGRESS AND EGRESS,AND FOR THE RIGHT TO USE DESIGNATED WALKWAYS, DRIVEWAYS AND PARKING AREAS,AS SUCH IMPROVEMENTS EXIST FROM TIME TO RECOGNITION AGREEMENT—Exhibit A Desert Oasis TIME,IN LOTS 1 AND 3 OF TRACT NO. 14573,ACCORDING TO MAP RECORDED IN BOOK 109,PAGES 97 AND 98 OF TRACT MAPS IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY,CALIFORNIA, SUCH EASEMENT TO EXTEND TO PRC, ITS SUCCESSORS AND ASSIGNS,PRC'S SUBTENANTS, THEIR LICENSEES AND BUSINESS INVITEES. PARCEL FIVE: LOT 3 OF TRACT NO. 14573,IN THE CITY OF PALM SPRINGS,COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,AS SHOWN BY MAP ON FILE IN BOOK 109,PAGES 97 AND 98 OF MAPS,RECORDS OF RIVERSIDE COUNTY,CALIFORNIA. EXCEPT THEREFROM ALL URANIUM,THORIUM AND ALL OTHER MATERIALS DETERMINED PURSUANT TO SECTION 5(B)(1)OF THE ATOMIC ENERGY ACT OF 1940(60 STAT. 761)TO BE PECULIARLY ESSENTIAL TO THE PRODUCTION OF FISSIONABLE MATERIAL,AS RESERVED BY THE UNITED STATES OF AMERICA IN DEED RECORDED NOVEMBER 29, 1949 IN BOOK 1127,PAGE 236 OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. POSSESSORY INTEREST NO.: APN(S):009-606-990-9,FEE APN: 502-100-0174 PARCEL SIX: A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS,FOR VEHICULAR INGRESS AND EGRESS,AND FOR THE RIGHT TO USE DESIGNATED WALKWAYS, DRIVEWAYS AND PARKING AREAS,AS SUCH IMPROVEMENTS EXIST FROM TIME TO TIME,IN LOTS 1 AND 2 OF TRACT NO. 14573,AS SHOWN BY MAP ON FILE IN BOOK 109, PAGES 97 AND 98 OF TRACT MAPS,RECORDS OF RIVERSIDE COUNTY,CALIFORNIA,SUCH EASEMENT TO EXTEND TO LESSEE,ITS SUCCESSORS AND ASSIGNS,LESSEE'S SUBTENANTS,THEIR LICENSEES AND BUSINESS INVITEES. RECOGNITION AGREEMENT—Exhibit A Desert Oasis DOC # 2017-0420946 10/11/2017 08:00 AM Fees: $72.00 Rew ding Requested or Page 1 of 10 FIMIAmerl=111%InswM00epOq National Camara ftl sw&" Recorded in Official Records 777S.F1 doaStr K 2/ /nA, q ^�1 County of Riverside LM+���wo�.�a9oo1 Peter Aldana Assessor-County Clerk-Recorder RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: "This document was electronically submitted to the County of Riverside for recording" Receipted by: KIYOMI#289 MB Real Estate 181 W. Madison,Suite 4700 Chicago, IL 60602 Attn: Gregg Graines \ F--A _ O I + _ ai—, SPACE ABOVE THIS LINE FOR RECORDER'S USE Documentary Transfer Tax $ $y ✓ Computed on full value of property conveyed Or computed on full value less lien and encumbrances remaining at time of sale. ,oaS r AW&r e.A;Au r7Tccr LfsvicA cf Sign of aran r Agent determining tax/Firm Name ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT NO. 2636 AND CONSENT TO ASSIGNMENT THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT TO ASSIGNMENT ("Assignment") is dated this {l,day of acAebe-C , 2017 ("Effective Date"), by and between the CITY OF PALM SPRINGS ("City"or"Lessor"), Medical Properties II Palm Springs, LLC, a Delaware limited liability company ("Assignor"), and CMK Cielo, LLC, a Delaware limited liability company ("Assignee") with reference to the following facts and purposes: RECITALS A. Assignor and Assignee are parties to that certain Purchase and Sale Agreement, dated as of July 7, 2017 (the "Purchase Agreement"), pursuant to which Assignee agreed to purchase all of Assignor's rights, title and interest in and under the Ground Lease. Any capitalized term used but not defined in this Assignment shall have the meaning ascribed to such term in the Purchase Agreement,unless otherwise expressly provided herein. B. City entered into that certain Indenture of Lease Agreement No. 2636 dated November 3, 1988 entered into by City, as amended by Amendment No. 1 to Indenture of Lease Agreement No. 2636 entered January 2, 1991, the Second Amendment to Lease Agreement #2636 entered October 21, 1993, the Third Amendment to Lease Agreement #2636 entered December 15, 1993, the Fourth Amendment to Lease Agreement No. 2636 dated October 25, 2000, the Assignment and Assumption of Lease Agreement No. 2636 and Consent to Assignment dated October 25, 2000, and the Agreement and Estoppel of Ground Lessor for 1 LA 1331015960 LA 133131869v2 Lease No. 2636 (collectively the "Lease") covering a portion of those certain premises particularly described at Exhibit "A" attached hereto and incorporated hereby reference (the "Premises")- C. The Lease was duly assigned to Assignor, which assignment was recorded on July 291 2014 in the Official Records of Riverside County, California as Instrument No. 2014- 0283305. D. Pursuant to the Purchase Agreement, Assignor desires to assign the Lease, and Assignee wishes to accept such assignment pursuant to the terms of the Assignment. E. Assignor and Assignee desire to obtain the City's specific consent to the assignment of the Lease, and City wishes to consent to the assignment of the Lease pursuant to the terms of this Assignment. F. Concurrently herewith the City, Assignor and Assignee entered into that certain Assignment and Assumption of Lease Agreement No. 2529 and Consent to Assignment, whereby Assignor assigned to Assignee, and Assignee accepted such assignment, of all rights, title and interest in that certain Indenture of Lease Agreement No. 2529 dated May 1, 1988 entered into by City, as amended by the First Amendment to Lease Agreement #2529 entered April 28, 1993, the Second Amendment to Lease Agreement #2529 entered October 21, 1993, the Third Amendment to Lease Agreement #2529 entered December 15, 1993, the Fourth Amendment to Lease Agreement No. 2529 dated October 25, 2000, the Assignment and Assumption of Lease Agreement No. 2529 and Consent to Assignment dated October 25, 2000, the Agreement and Estoppel of Ground Lessor for Lease No. 2529, and the Assignment and Assumption of Lease Agreement No. 2529 and Consent to Assignment dated July 25, 2014 (collectively"Lease#2529"). G. Concurrently herewith the City, Assignor and Assignee entered into that certain Assignment and Assumption of Lease Agreement No. 2528 and Consent to Assignment, whereby Assignor assigned to Assignee, and Assignee accepted such assignment, of all rights, title and interest in that certain indenture of Lease Agreement No. 2528 dated May 1, 1988, as amended by the First Amendment to Lease Agreement #2528 entered April 28, 1993, Second Amendment to Lease Agreement #2528 entered October 21, 1993, Third Amendment to Lease Agreement #2528 entered December 15, 1993, Fourth Amendment to Lease Agreement No. 2528 dated October 25, 2000, the Assignment and Assumption of Lease Agreement No. 2528 and Consent to Assignment dated October 25, 2000, the Agreement and Estoppel of Ground Lessor for Lease No. 2528 executed on January 7, 2002, and the Assignment and Assumption of Lease Agreement No. 2528 and Consent to Assignment dated July 25, 2014 (collectively"Lease#2528"). H. The Assignment and Assumption of Lease and Consent to Assignment for each of Lease #2529 and Lease #2528 are collectively referred to herein as the "Assignment Agreements". I. The parties wish to assign the Lease pursuant to the terms of this Assignment. 2 LA 1331015960 LA 133131869v2 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, Assignor and Assignee agree as follows: 1. Assi uuent. Assignor does hereby assign to Assignee all of its right, title and interest as lessee in the Lease as of the Effective Date (including, without limitation, all of Assignor's right, title and interest in, to and under all Improvements related thereto), as defined above, subject to the terms and conditions herein contained. 2. Acceptance of Assignment. Assignee does hereby accept such assignment on the terms and conditions herein contained and agrees to timely keep,perform and discharge all of the obligations as the Lessee under the Lease that accrue from and after the Effective Date hereof. 3. Release of Liability. Upon the Effective Date, City agrees to release Assignor from all obligations and liability under the Lease accruing from and after the Effective Date. City reserves its rights to proceed against Assignor for all obligations under the Lease accruing prior to the Effective Date. City agrees that Assignee shall have no obligation or liability for any obligations of Assignor under the Lease accruing prior to the Effective Date. 4. City's Consent. City hereby consents to the assignment of the Lease by Assignor to Assignee subject to the terms and provisions of this Assignment. The parties hereto agree that City's consent to this assignment shall not constitute a waiver of the right of City to approve any further assignment, subletting or other transfer pursuant to the terms of the Lease. 5. Counterparts. This Assignment may be executed in one or more counterparts, all of which taken together shall constitute one instrument as though all signatures appear thereon. 6. Attorneys' Fees. If any party commences an action against any of the parties arising out of or in connection with this Assignment, the prevailing party or parties shall be entitled to recover from the losing party or parties reasonable attorneys' fees, expert witness fees and all other costs of suit. 7. Due Execution. The person(s) executing this Assignment on behalf of the parties hereto warrant that (i) such party has the legal right, power and authority to enter this Assignment and, if applicable, is duly organized and existing, (ii) they are duly authorized and have the legal right, power and actual authority to execute and delivery this. Assignment on behalf of said party, (iii) by so executing this Assignment, such party is formally bound to the provisions if this Assignment, (iv) the entering into this Assignment does not violate any provision of any other agreement to which said party is bound and (v) the consent of any trustee, trustor, judicial or administrative body, or governmental authority, or other party required for such person executing this Assignment or the party to be bound hereby has been obtained. 8. Integration; Amendments. This Assignment contains all of the agreements of the parties and cannot be modified, terminated or rescinded, in whole or in part, unless written and signed by authorized representatives of the parties hereto. No prior oral or written understanding shall be of any force with respect to those matters covered in this Assignment. 3 LA 1331015960 LA 13313186M 9. Governing Law. This Assignment and all matters pertaining thereto shall be construed according to the laws of the State of California. 10. Recording. This Assignment shall be recorded in the official Records of Riverside County, California. SIGNATURES ON FOLLOWING PAGE 4 LA 1331015960 LA 133131869v2 IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the day and year first above written. ATTEST: "City" CITY OF PALM SPRINGS, City Clerk o oration ' By: za AP S TO RM: Name: I Its: City Attorney APPROVED BY CITY COUNCIL "Assignor" Medical Properties II Palm Springs, LLC a Delaware limited liability company By: Name: 1 ¢4e G rk,ti l Its: /�� •r�2c a S an.1a�,/ "Assignee" CMK CIELO, LLC, a Delaware limited liability company By: ,---z Name: n f-e Gam+ N1 Its: T 4 LA 1331015960 ACKNOWLEDGMENT OF INSTRUMENT (Cal. Civil Code Section 1181) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of Riverside ) SS. City of Palm Springs ) On September 28, 2017, before me, KATHLEEN D. HART, INTERIM CITY CLERK, CITY OF PALM SPRINGS, CALIFORNIA, personally appeared DAVID H. READY, who I personally know is the CITY MANAGER of the CITY OF PALM SPRINGS whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his official and authorized capacity on behalf of the City of Palm Springs, a California Charter City. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and the official seal of the City of Palm Springs, California, this 28th day of September, 2017. ;OQVXLM S.. 0 u a MAT s Signature: tom- atrFORN` KATHLEEN D. HART, MMC Interim City Clerk Title or Type of Document Assignment and Assumption of Lease Agreement No. 2636 and Consent to Assignment Agreement State of California ) SS. County of ) On 2017, before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are-subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) State of ; ) n ) SS. County of l pok ) On 2017, before me, -Zx"ct-'b, V A� c a Notary Public, personally appeared Gra n2S who proved to me on the basis of satisfactory evidence to be the persons whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of S t\;nocs that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signatures�y (Seal) OFFICIAL SEAL BARBRA D VIDINICH 5 NOTARY PUBLIC-STATE OF ILLINOIS LA 1331015960 MY COMMISSION EXPIRES:11=/18 State of SS., County of C nA ) On 2egkmbP.c 2017, before me, �ro wid,���, a Notary Public, personally appeared 6 'c+es who proved to me on the basis of satisfactory evidence to be the persofi�sj whose name(s) is/are-subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of k%'nou5 that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature LUc�xJIUD.rlJ�u�Llnu.c.� (Seal) =-STATE AL NICH OF ILLINOISESA 1/08118 6 LA 1331015960 ti. A 7 LA 133101596A LA 13313186M EXHIBIT "A" LOT 2 OF TRACT NO. 14573, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS.SIJOWN BY MAP ON FILE IN BOOK 109, PAGES 97-AND 98 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. A NONEXCLUSIVE EASEMENT FOR PEDESTRIAN INGRESS AND EGRESS, FOR VEHICULAR INGRESS AND EGRESS, AND FOR THE RIGHT TO USE DESIGNATED WALKWAYS, DRIVEWAYS AND PARKING AREAS, AS SUCH IMPROVEMENTS EXIST FROM TIME TO TIME, IN LOTS I AND 3 OF TRACT NO. 14573, ACCORDING TO MAP RECORDED IN BOOK 109, PAGES 97 AND 98 OF TRACT MAPS IN THE OFFICE OF THE COUNTY RECORDER OF RIVERSIDE COUNTY, CALIFORNIA, SUCH EASEMENT TO EXTEND TO FRC, ITS SUCCESSORS AND ASSIGNS, PRC'S SUBTENANTS, THEIR LICENSEES AND BUSINESS INVITEES, 8 LA 133131869v2 DOC #t 2000-450790 10/31/2000 08:00R Fee:24.00 Page 1 of 7 Recorded in Official Records Recording Requested BY County of Riverside CHICAGO MLE COMP ANV Gary L. Orso RECORDING S AND Assessor, County Clerk & Recorder RECORDED MAIL TO: Donald G. Abbey AP-Palm Springs L.LC M S U PAGE SIZE DA PCOR NOCOR MF MISL 12383 Lewis Street Suite 200 Garden Grove, California 92840 L �/���/`,��[/ /,G'1/,• A R L WPY LONG REFUND, NCHG EXAM �o SC MEMORANDUM OF GROUND LEASE IN'S This Memorandum of Ground Lease is dated as of Octobers 2000 by and between THE CITY OF PALM SPRINGS,CALIFORNIA,a municipal corporation(herein referred to as"Landlord") and AP-PALM SPRINGSILLC, a Delaware limited liability company, having its principal office at 12383 Lewis Street, Suite 200, Garden Grove, California 92840 (herein referred to as "Tenant.'). *AIRPORT WITNESSETH: That in consideration of the rents, covenants and conditions more particularly set forth in a certain Indenture of Lease Agreement No.2636 dated November3, 1988, between Landlord and Peacock-Radaker Corporation, a California corporation, as amended and assigned to Tenant by Assignmentand Assumption of Lease No.2636 and Consentto Assignment entered by and among Helen Apostle, Trustee of the Survivor's Trust created under the Apostle Family Trust dated July 6, 1984, as amended, as Assignor, the: Tenant as Assignee and the Landlord dated concurrently herewith (the "Lease"), Landlord and Tenant do hereby covenant, promise and agree as follows: 1. Demised Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord for the Lease term described below that certain parcel of land containing approximately 2.38 acres (the "demised premises"), which demised premises are located in the City of Palm Springs, California and are more particularly described on Exhibit A attached hereto. 2. Use of Demised Premises. The demised premises may be used for any lawful permitted purpose as set forth in Article II I of the Lease. 3. Term and Options to Extend. (a) Initial Term. The Initial Term of the Lease commenced November 1, 1988 and shall terminate on October 31, 2037. (b) Option Periods. Tenant shall have two (2) successive options: the first for • an additional ten (10)year period and the second for an additional eight (8)year period so as to extend the term of the Lease for up to an additional period of eighteen (18)years each such extended term to begin respectively upon the expiration of the Initial Term of the Lease or the term of the Lease as extended and the same terms and conditions as set forth in the Lease shall apply to each such extended term. 4. Effectiveness of Memorandum. The sole purpose of this instrument is to give notice of the Lease and its terms, covenants and conditions to the same extent as if the Lease were fully set forth herein. This Memorandum shall not modify in any manner the terms, conditions or intent of the Lease and the parties agree that this Memorandum is not intended nor shall it be used to interpret the Lease or determine the intent of the parties under the Lease. SIGNATURES ON NEXT PAGE • • PALMSPRINGS\MEMOGROUNDLEASE2636-1 2 • IN WITNESS WHEREOF,the parties have executed this agreement as of the day and year first above written. ATTEST: "City" � CITY OF PALM SPRINGS, a municipal corporation City Clerk BY' — APPR ,YED AS TO FORM: -1 Aanager "Lessee" City A orney AP-PALM SPRINGS AIRPORT LLC, a Delaware limited liability company By: Abbey Properties LLC, a California limited liabil' pany Its: Mara fvjak° ��9�7d� 8ytj �, �����o By s Ase� s rt�^sC� ona d G. ey Its: Governing Imber PALMSPRINGS\MEMOGROUNDLEASE2636-1 3 • EXHIBIT "An PARCEL 1: Lot 2 of 'tract No. I4573 in the City of Palm Springs, County of Riverside, State of California, according to map recorded in Book 109, Pages 97 and 98 of Tract Mops in the office of the County Recorder of said county. (2.38 acres, more or less) . I PARCEL 2: A nonexclusive easement for pedestrian ingress and egress, for vehicular j ingress and egress, and for the right to use designated walkways , driveways and parking areas, as such improvements exist from time to time, in Lots 1 and 3 of Tract No. 14573, according to map recorded in Book 109, Pages 97 and 9B of Tract Maps in the office of the County Recorder of Riverside County, Califor- nia, such easement to extend to PRC, its successors and assigns, PRC's subten- ants, their licensees and business invitees. THE LEASEHOLD INTEREST BEING CONVEYED HEREIN IS SUBJECT TO: A nonexclusive easement for pedestrian ingress and egress, for vehicular ingress and egress, and for the right to use designated walkways, driveways and j parking areas, as such improvements exist from time to time, such easement running in favor of all persons with a real property and/or other leasehold interest in Lots 1 and 3 of Tract No. 14573, their licensees and business invitees. I I 2636 • State of California ) SS. County of _ ) On 2000 before me, a Notary Public in and for said State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) i State of California ) SS. County of On l/�iJ G ✓ c 5 , 2000 before me, , " p"", A1Qa S a Notary Public in and for said State, personally appeared PD racy/� h A fie- �1 personally known to me (or proved to me on the basis of satisfactory evidence) to be the persor> s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/#ley executed the same in his/Erer/their authorized capacity(ies), and that by his/her/their signatureks) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. nNORr7 RHoo6 7 / Commission# 1197615 Notary Public-California Signature �l/�'F?/✓ , �f v+� � (Seal) orange county W Camm.EPies pct30,2M2 i i DOC A2000-430784 10/31/2000 08:00A Fee:42.00 Page 1 of 9 Recorded in Official Records d I ;7P d B'1V County of Riverside cHiCA&F-) .�_ I LE coin iPAN'e4/ Gary L. Orso Assessor, County Clerk d Recorder RECORDINGRECORDED MAIL TO:ND WHEN I 11111 111111111111111111111111111111 II111111111 David J. Gullen, Esq. M S U PAGE SIZE DA PCOR NOCOR SMF MISC The Abbey Company 12383 Lewis Street, suite 200 Garden Grove, California 92840 G� A R L COPY LONG REFUND NGHG EW I©r-e-"IAl cv S d-erect' SPACE ABOVE THIS LINE FOR RECORDER'S USE ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT NO. 2636 AND CONSENT TO ASSIGNMENT I-5C m THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT TO v a ASSIGNMENT ("Assignment") is dated thi �ay of October, 2000 ("Effective Date"), a by and between the CITY OF PALM SPRINGS ("City" or "Lessor"), HELEN APOSTLE, o 10 TRUSTEE OF THE SURVIVOR'S TRUST CREATED UNDER THE APOSTLE FAMILY c w ga TRUST DATED JULY 6, 1984, A8'I AMENDED ("Assignor"), and AP-PALM SPRINGS AIRPORT, LLC, a Delaware limited liability company, a wholly-owned subsidiary of The ' c Abbey Company,a California corporation("Assignee") with reference to the following facts 191 ° '�N N and purposes: a En np 00 RECITALS 011, m A� cno A. City entered into that certain Indenture of Lease Agreement No. 2636, dated November 3, 1988, as amended by Amendment No. 1 to Indenture Lease Agreement #2636, dated January 2, 1991, Second Amendment to Lease Agreement #2636, dated October 21, 1993 and Third Amendment to Lease Agreement#2636,dated December 15, 1993 (collectively the "Lease") covering a portion of those certain premises particularly described at Exhibit "A" attached hereto and incorporated herein by reference (the "Premises"). B. The Lease was duly assigned to Assignor, which assignment was recorded on October 16, 19918 in the Official Records of Riverside County, California as Instrument No. 449223. C. Assignor wishes to assign the Lease, and Assignee wishes to accept such assignment pursuant to the terms of the Assignment. D. Assignor and Assignee desire to obtain the City's specific consent to the assignment of the Lease, and City wishes to consent to the assignment of the Lease pursuant to the terms of this Assignment. 1 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: David J. Gullen, Esq. The Abbey Company 12383 Lewis Street, suite 200 Garden Grove, California 92840 SPACE ABOVE THIS LINE FOR RECORDER'S USE ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT NO. 2636 AND CONSENT TO ASSIGNMENT THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT TO ASSIGNMENT ("Assignment") is dated thisday of October, 2000 ("Effective Date"), by and between the CITY OF PALM SPRINGS ("City" or "Lessor"), HELEN APOSTLE, TRUSTEE OF THE: SURVIVOR'S TRUST CREATED UNDER THE APOSTLE FAMILY TRUST DATED JULY 6, 1984, AS AMENDED ("Assignor"), and AP-PALM SPRINGS AIRPORT, LLC, a Delaware limited liability company, a wholly-owned subsidiary of The Abbey Company,a California corporation("Assignee") with reference to the following facts and purposes: RECITALS A. City entered into that certain Indenture of Lease Agreement No. 2636, dated November 3, 1988, as amended by Amendment No. 1 to Indenture Lease Agreement #2636, dated January 2, 1991, Second Amendment to Lease Agreement #2636, dated October 21, 1993 and Third Amendment to Lease Agreement#2636, dated December 15, 1993 (collectively the "Lease") covering a portion of those certain premises particularly described at Exhibit "A" attached hereto and incorporated herein by reference (the "Premises'). B. The Lease was duly assigned to Assignor, which assignment was recorded on October 16, 1998 in the Official Records of Riverside County, California as Instrument No. 449223. C. Assignor wishes to assign the Lease, and Assignee wishes to accept such assignment pursuant to the terms of the Assignment. D. Assignor and Assignee desire to obtain the City's specific consent to the assignment of the Lease, and City wishes to consent to the assignment of the Lease pursuant to the terms of this Assignment. 1 E. Concurrently herewith the City, Assignor and Assignee entered into that certain Assignment and Assumption of Lease Agreement No. 2528 and Consent to Assignment, whereby Assignor assigned to Assignee and Assignee accepted such assignment of all rights, title and interest in that certain Indenture of Lease Agreement dated May 1, 1988 entered into by the City, as amended by the First Amendment to Lease Agreement #2528 dated April 28, 1993, the Second Amendment to Lease Agreement #2528 entered into October 21, 1993, and Third Amendment to Lease Agreement#2528 entered 15th day of December 1993 (collectively "Lease #2528"). F. Concurrently herewith the City, Assignor and Assignee entered into that certain Assignment and Assumption of Lease Agreement No. 2529 and Consent to Assignment, whereby Assignor assigned to Assignee and Assignee accepted such assignment of all rights, title and interest in that certain Indenture of Lease Agreement dated May 1, 1988 entered into by the City, as amended by the First Amendment to Lease Agreement #2529 dated April 28, 1993, the Second Amendment to Lease Agreement #2529, entered into October 21, 1993, and Third Amendment to Lease Agreement#2529 entered 15th day of December 1993 (collectively "Lease #2529"). G. Concurrently herewith Lessor and Lessee are entering into a Fourth Amendment to the Lease, a Fourth Amendmentto Lease#2528 and a Fourth Amendment to Lease #2529 providing similar amendments to each of said leases (collectively the "Amendments"). H. The Assignment and Assumption of Lease and Consent to Assignment for each of Lease #2528 and Lease #2529 are collectively referred to herein as the "Assignment Agreements". I. In consideration for the City's execution of the Assignment Agreements and this Assignment, and the Amendments,Assignee wishes to pay and City wishes to accept a total of two hundred seventy-five thousand dollars ($275,000), the future value of which the City and Assignee hereby acknowledge represents a reasonable estimate of market value increases of the rental rate for the Lease, Lease #2528 and Lease #2529 collectively. J. The parties wish to assign the Lease pursuant to the terms of this Assignment. 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, Assignor and Assignee agree as follows: 1. Assignment. Assignor does hereby assign to Assignee all of its rights, title and interest in the Lease as of the Effective Date, as defined above, subject to the terms and conditions herein contained. 2 2. Acce ,tance of Assign rrient. Assignee does hereby accept such assignment on the terms and conditions herein contained and agrees to timely keep, perform and discharge all of the obligations as the Lessee under the Lease that accrue from and after the Effective Date hereof. 3. Paymentto City. Concurrently with the execution of this Assignment and the Assignment Agreements, Assignee shall pay to City the sum of Two Hundred Seventy- Five Thousand and 00/100 Dollars ($275,000.00) as consideration for City's acceptance of this Assignment, the Assignment Agreements, and the Amendments. Such payment shall be made either by wire transfer in a form acceptable to City's Finance Director, or certified check to the City on or prior to the Effective Date. 4. Release of Liability. Upon the Effective Date,City agrees to release Assignor from all obligations and liability under the Lease accruing from and after the Effective Date. City reserves its rights to proceed against Assignor for all obligations under the Lease accruing prior to the Effective Date. City agrees that Assignee shall have no obligation or liability for any obligations of Assignor underthe Lease accruing prior to the Effective Date. 5. City's Consent. City hereby consents to the assignment of the Assignor by Lessee to Assignee subject to the terms and provisions of this Assignment. The parties hereto agree that City's consent to this assignment shall not constitute a waiver of the right of City to approve any further assignment,subletting or othertransfer pursuant to the terms of the Lease. 6. Counterparts. This Assignment may be executed in one or more counterparts, all of which taken together shall constitute one instrument as though all signatures appear thereon. 7. Attorneys' Fees. If any party commences an action against any of the parties arising out of or in connection with this Assignment, the prevailing party or parties shall be entitled to recover from the losing party or parties reasonable attorneys' fees, expert witness fees and all other costs of:suit. 8. Due Execution. The person(s) executing this Assignment on behalf of the parties hereto warrant that (i) such party has the legal right, power and authority to enter this Assignment and, if applicable, is duly organized and existing, (ii) they are duly authorized and have the legal right, power and actual authority to execute and deliver this Assignment on behalf of said party, (iii) by so executing this Assignment, such party is formally bound to the provisions of this Assignment, (iv)the entering into this Assignment does not violate any provision of any other agreement to which said party is bound and (v) the consent of any trustee, trustor, judicial or administrative body, or governmental authority, or other party required for such person executing this Assignment or the party to be bound hereby has been obtained. 9. Integration; Amendments. This Assignment contains all of the agreements of the parties and cannot be modified, terminated or rescinded, in whole or in part, unless 3 written and signed by authorized representatives of the parties hereto. No prior oral or written understanding shall be of any force with respect to those matters covered in this Assignment. 10. Governing Law. This Assignment and all matters pertaining thereto shall be construed according to the laws of the State of California. 11. Brokerage Commissions. Each party agrees to indemnify and hold the other harmless from and against all liabilities, costs, damages, and expenses, including, without limitation, attorneys' fees, resulting from any claims or fees or commissions, based upon agreements by it, if any, to pay a broker's commission and/or finder's fee. 12. Full Force and Effect. The parties agree that their respective rights and obligations under this Assignment are conditioned upon the concurrent full execution and delivery of the Assignment Agreements and Amendments and that without such execution and delivery, this Assignment shall be null and void and of no force nor effect. The parties further agree that, except as specifically provided in this Assignment and the Amendments, the terms of the Lease shall remain unchanged and in full force and effect. 13. Recording. This Assignment shall be recorded in the Official Records of Riverside County, California. SIGNATURES ON FOLLOWING PAGE 4 IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the day and year first above written. ATTEST: "City" CITY OF PALM SPRINGS, a municipal corporation City Clerk By: APPROVED VED AS TQ FORM: Cit anager City Aitorney "Assignor" HELEN APOSTLE, TRUSTEE OF THE SURVIVOR'S TRUST CREATED UNDER THE APOSTLE FAMILY TRUST, DATED JULY 6, 1984, AS AMENDED. By: ��j �p�+ �lg ��p /� y p p�pp�pp Its: A�tP PI"'R0 V P1:D B 11 TN�pdL t�,��7i�jC��IJItl`VCK a'il III.-5 "Assignee" AP-PALM SPRINGS AIRPORT LLC, a Delaware limited liability company By: Abbey Properties LLC, a California limited liab" mpany Its: Ma By' o . Abbey It . overning Member palms p ri ngs\assig n ment2636 5 EXHIBIT "A" I PARCEL 1: Lot 2 of fract No. 14573 in the City of Palm Springs, County of Riverside, State of California, according to map recorded in Book log, Pages 97 and 98 of Tract Maps in the office of the County Recorder of said county. (2.38 acres, more or less). PARCEL 2: A nonexclusive easement for pedestrian ingress dnd egress, for vehicular ingress and egress, and for the right to use designated walkways, driveways and parkinq areas, as such improvements exist from time to time, in Lots 1 and 3 of Tract No. 14573, according to map recorded in Book 109, Pages 97 and 911 of Tract Maps in the office of the County Recorder of Riverside County, Califor- nia, such easement to extend to PRC, its successors and assigns, PRC's subten- ants, their licensees and business invitees. THE LEASEHOLD INTEREST BEING CONVEYED HEREIN IS SUBJECT TO: A nonexclusive easement for pedestrian ingress and egress, for vehicular- ingress and egress, and for the right to use designated walkways, driveways and parking areas, as such improvements exist from time to time, such easement running in favor of all persons with a real property and/or other leasehold interest in Lots 1 and 3 of Tract No. 14573, their licensees and business invitees. I � 2636 State of California ) ss: County of ) On 2000, before me, personally appeared personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. SIGNATURE State of California ) ss: County of ) On 2000, before me, personally appeared _personally known to me to be the person whose name an is subscribed to the within instrument d acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. SIGNATURE State of California ) ;'' ) ss: County of , On 2000, before me, personally appeared h,r( { r. / ��e r. _personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument, or the entity upon behalf of which the person acted, executed the instrument. WITNESS MY HAND AND OFFICIAL SEAL MIDREA RHODES Commission# 119761.5 SIGNATURE Notary Public-California Oronge County My Comrn.bcpies Oct3O,2M2 Fourth Amend to Lease Agr • AP—Palm Springs Airport LLC AGREEMENT #2636 G�,u��u^wUir21, M06693, 8-2-00 FOURTH AMENDMENT TO LEASE AGREEMENT I40-2636 fn�3c%iCt"1 THIS FOURTH AMENDMENTTO LEASE AGREEMENT NO.2636 ("Amendment") is dated thisQ5 ay of October, 2000 ("Effective Date"), by and among The City of Palm Springs California, a Municipal corporation ("Lessor") and AP-Palm Springs Airport LLC, a Delaware limited liability company ("Lessee"). RECITALS A. Lessor and Peacock-Radaker Corporation ("PR") entered into that certain Indenture of Lease Agreement No. 2636 dated November 3, 1988 upon and subject to all of the provisions therein contained as disclosed by Lease Agreement, recorded July 31, 1989 as Instrument No. 253625, Official Records of Riverside County, California ("Original Lease"). B. The Original Lease is amended by the Amendment No. 1 to Indenture of Lease Agreement No. 2636, entered January 2, 1991 by and between Lessor and PR, the Second Amendment to Lease Agreement #2636, entered October 21, 1993 by and between Lessor and John Apostle and Helen Apostle,Trustees of the Apostle Family Trust dated July 6, 1984("AFT"), and the Third Amendment to Lease Agreement#2636, entered December 15, 199'3, by and between Lessor and AFT. The Original Lease as so amended is sometimes referred to herein as the "Lease". C. An assignment of the tenant's interest under the Original Lease as then amended was assigned to AFT by Assignment of Lease recorded December 27, 1993 as Instrument No. 514485 Official Records of Riverside County, California. D. An assignment of the tenant's interest under the Original Lease as then amended was assigned to Helen Apostle, as Trustee of the Survivor's Trust created under the Apostle Family Trust dated July 6, 1984 as amended ("Apostle") by Assignment of Lease recorded October 16, 1998 as Instrument No. 449223 Official Records of Riverside County, California. E. Concurrently herewith the Lessor, Apostle and Lessee entered into that certain Assignment and Assumption of Lease Agreement No. 2636 and Consent to Assignment whereby Apostle assigned to Lessee all right, title and interest in the Lease and Lessee accepted such Assignment on the terms and conditions contained therein. F. Concurrently herewith the Lessor, Apostle and Lessee entered into that certain Assignment and Assumption of Lease Agreement No. 2528 and Consent to 1 Assignment,whereby Apostle assigned to Lessee and Lessee accepted such assignment of all rights, title and interest in that certain Indenture of Lease Agreement dated May 1, 1988 by and between the Lessor and B.A. Properties I, Inc.,a Delaware corporation ("BA"), as amended by the First Amendment to Lease Agreement #2528 dated April 28, 1993 between Lessorand PR,the Second Amendmentto Lease Agreement#2528 entered into October 21, 1993 by and between the Lessor and AFT and Third Amendment to Lease Agreement #2528 entered December 15, 1993 by and between Lessor and AFT (collectively "Lease #2528"). G. Concurrently herewith the Lessor, Apostle and Lessee entered into that certain Assignment and Assumption of Lease Agreement No. 2529 and Consent to Assignment,whereby Apostle assigned to Lessee and Lessee accepted such assignment of all rights, title and interest in that certain Indenture of Lease Agreement dated May 1, 1988 by and between the Lessor and BA, as amended by the First Amendment to Lease Agreement #2529 dated April 28, 1993 between Lessor and PR, the Second Amendment to Lease Agreement#2529 entered into October 21, 1993 by and between the Lessor and AFT and Third Amendment to Lease Agreement #2529 entered December 15, 1993 by and between Lessor and AFT (collectively "Lease #2529"). H. Concurrently herewith Lessor and Lessee are entering into a Fourth Amendment to Lease #2528 and a Fourth Amendment to Lease #2529 providing amendments to such Leases similar to those adopted herein. I. The Assignment and Assumption of Lease and Consent to Assignment for each of Lease#2528, Lease#2529 and the Lease are collectively referred to herein as the "Assignments" and for this Lease alone the"Assignment of Lease". J. The terms used herein shall have the meanings as defined in the Lease. NOW, THEREFORE, in consideration of the mutual promises of the parties hereto and for other valuable and good consideration, the receipt and sufficiency of which is hereby acknowledged, Lessor and Lessee agree that the Lease is amended as follows: 1. Article I is hereby amended by deleting it in its entirety and substituting the following: "ARTICLE I - TERM 'The initial term ("Initial Term") of this Agreement shall be for forty nine (49) years beginning on November 1, 1988 and ending on October 31, 2037 unless sooner terminated in accordance with the terms hereof. The Lessee may, at its option, extend the Lease for an additional ten (10) year period ("First Extended Period") by giving to Lessor a notice in writing 2 • i of its intention to exercise such option, such written notice to be given to Lessor no less than one hundred twenty(120)days but no more than six (6) months before the expiration of the Initial Term ("First Option"). Provided the Lessee has exercised the First Option,the Lessee may at its option extend this Lease for an additional eight (8) year period ("Second Option") commencing upon expiration of the First Extended Period by giving to Lessor a notice in writing of its intention to exercise such option such written notice to be given to Lessor no less than one hundred twenty (120)days prior but no more than six (6) months before the expiration of the First Extended Period. 2. Article II, subparagraph C.S. is hereby amended by inserting the words `or condemnation" immediately after the word "insurance" and before the word "proceeds" at the end of subparagraph 5. 3. Article III, paragraph A, is hereby amended by adding the following atthe end and as part of the first sentence in the second paragraph after the word 'complex": "or any use which is permitted under applicable zoning ordinances classifying the land as Zone A (Airport) or is permitted by conditional use permit or by commission determination." 4. Article III, paragraph B is hereby amended by deleting it in its entirety and substituting the following: "B. Improvements. Lessee presently intends to construct certain facilities and buildings on the demised premises. Lessee presently intends, without cost to Lessor, to commence construction of improvements within the scope of the permitted uses on or before November 1, 2013 and thereafter diligently prosecute the construction to completion. It is understood and agreed that Lessee shall install all utilities 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 of Palm Springs prior to the commencement of 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 Commission to determine the character and nature of the improvements to be 3 constructed on the premises. The Lessor agrees that in the eventthe Lessee determines in its sole and absolute discretion that the construction of such improvements on or before November 1, 2013 is not an economically prudent business decision for it, then Lessee's failure to construct such improvements shall not be a default under or breach of this Agreement by the Lessee." 5. Article III, paragraph E, is hereby amended by adding the following sentence at the end of paragraph E: "Additionally, Lessee may maintain rental information signage on the Leased Premises or the improvements located on the Leased Premises provided such signage complies with the Palm Springs sign ordinance." 6. Article III is hereby further amended by adding the following new paragraph F. immediately following paragraph E.: "F. Lessee agrrees that at no time shall the leased premises be modified or improved to provide vehicular access to orfrom the immediately adjacent public right-of-way at Civic Center Drive. " 7. Article IV, paragraph A. is hereby amended as follows: adding the word "materially" after the word "times" and before the word "comply" in the first sentence; adding the words "duly adopted" after the word "applicable" and before the word "ordinances" in the first sentence; and adding the parenthetical "(subject to the provisions of Article X paragraph A)" after the words "City of Palm Springs" in the first sentence. 8. Article IV, paragraph A. is further amended by inserting the phrase "Subject to Lessee's right to contest as permitted by law and Article X paragraph A " at the beginning of the second sentence. 9. Article IV is hereby amended by adding the following new paragraphs D and E immediately following paragraph C: "D. Lessee shall provide recycling receptacles which meet the requirements of the City or its waste disposal contractor, as such requirements may be revised from time-to- time, for required use by all subtenants of the Office Park for the disposal of those materials that may be designated as recyclable by the City's or its waste disposal contractor's recycling program. Lessee shall further be required to 4 distribute recycling information to, monitor and make its best efforts to assure compliance with the recycling program by,any subtenant of Lessee. 10. Article;VII, paragraph C. is hereby amended as follows: inserting the words "subject to the provisions of any applicable security instruments or loan documents of the mortgagee or beneficiary of a mortgage upon the Leased Premises" immediately after the word "however" and immediately before the words "that within" in the third sentence of paragraph C. 11. Article:VII, paragraph D. is hereby amended as follows: inserting the words "subjectto the provisions hereof'immediately afterthe word"PRC"and immediately before the word "agrees" in the fourth sentence of paragraph D; inserting the phrase "after adjustment of loss with insurer and/or mortgagee" after the words "thirty (30) days" and before the words "and the required repairs" in the first sentence of the second paragraph of paragraph D; and inserting the following as a new paragraph at the end of paragraph D: "Should any damage or destruction to the improvements constructed on the leased premises occur during the last four (4)years of the Initial Term or if the Initial Term is extended by Lessee's exercise of the First Option or the Second Option as provided in Article I, during the last four (4) years of such extended term, and the cost of restoration of such damage or destruction exceeds twenty-five percent (25%) of the replacement cost of such improvements on the date immediately preceding such damage or destruction, or should any such damage or destruction occur during the last one (1) year of the Initial Term or if the Initial Term is extended by Lessee's exercise of the First Option or the Second Option as provided in Article I, during the last one (1) year of such extended term, and the cost of restoration of such damage or destruction exceeds ten percent(10%)of the replacement cost of such improvements on the date immediately preceding such damage or destruction, Lessee may terminate this lease by giving notice to City within sixty (60) days after such damage or destruction, such termination to be effective as of the date specified in such notice. If Lessee terminates this lease, Lessee shall assign to City all property casualty insurance proceeds received by Tenant as a result of such casualty subject to the rights therein of any mortgagee." 12. Article VII is hereby Further amended by adding a new paragraph H. immediately following paragraph G. as follows: 5 "H. Alternative Insurance Coverage. Lessor agrees that Lessee may, at 'ots option, satisfy the requirements of Article VII paragraphs A and E by covering the leased premises under its own umbrella policy(ies), provided such policy(ies) provide equal or better protection and coverage limits that are equal to or greater than those set forth in paragraphs A and E." 13. Article; VII I, paragraph A is hereby amended by adding the following at the end thereof: ',City hereby consents to the encumbrances placed or to be placed on the Leased Premises and improvements pursuant to the acquisition financing provided by Bank of America , N.A. to AP--Palm Springs Airport LLC, as Lessee in its acquisition of this Lease pursuant to the Assignment of this Lease or pursuant to any refinancing thereof by Lessee. Lessor acknowledges that such encumbrances exceed or will exceed 85% of the value of the leasehold interest under this Lease together with the estimated value of the improvements placed or to be placed thereon." 14. Article VIII, paragraph C is hereby amended by deleting it in its entirety and substituting the following: "C. 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 or by law, provided that before any sale 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 shall comply with the provisions of Section 2924(c)of the Civil Code of the State of California." 15. Article VIII paragraph G. is hereby amended by deleting it in its entirety and substituting the following: "G. City agrees that it will not terminate this Agreement because of any default or breach hereunder on the part of Lessee if the encumbrancer under the trust deed, within the later of(i) ninety (90)days after service of written notice on the 6 • encumbrancer by City of its intention to terminate this lease for such default or breach, or (ii) forty five (45) days after the expiration of any cure period provided by Lessee, 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 Agreement; 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 cannot be cured by the payment or expenditure of money, but is otherwise curable, either (a) cure such default (and City shall treat such performance on the part of the encumbrancer as though the same had been performed by Lessee; and for such purpose City and Lessee hereby authorize the encumbrancer to enter upon the Property to exercise any of Lessee's rights and powers underthis Lease)or(b)proceed pursuantto paragraph 3, below; (c) If such default or breach is not curable by the payment or expenditure of money provided to be paid under the terms of this Agreement, or if the nature of such default is such that the encumbrancer must obtain possession of the Property to so cure, cause the trustee under the trust deed to commence and thereafter diligently to pursue to completion steps and proceedings forjudicial foreclosure, the exercise of the power of sale under and pursuant to the trust deed in the manner provided bylaw,oracceptfrom 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." 16. Article:Vil I is hereby further amended by adding new paragraphs H., I., J., K. and L. immediately following paragraph G. as follows: 7 i • "H. New Lease. (a) In the event of termination of this Agreement by reason of either a default by Lessee that is not (or cannot reasonably be) cured by encumbrancer or in the event Lessee's interest under this Agreement shall be sold, assigned or transferred pursuant to the exercise of any remedy of the encumbrancer, or pursuant to judicial proceedings or a deed or assignment in lieu of foreclosure, or in the event of the rejection of this Agreement by any trustee in bankruptcy under the provisions of Bankruptcy Code, 11 USC§365, and if within thirty days thereafter the encumbrancer shall have paid, or arranged to the reasonable satisfaction of City to cure any default on the part of Lessee under this Agreement which is reasonably susceptible; to cure by encumbrancer, then City, within thirty days after receiving a written request thereforfrom the encumbrancer, and upon payment to City of all expenses, including reasonable attorneys'fees, incident thereto(less any rent collected by City from the date of termination to the date of commencement of the term of the new lease for any period in which encumbrancer has also paid to City), shall execute and deliver to the encumbrancer or its nominee or to the purchaser, assignee or transferee, as the case may be, a new lease of the Property. (b) Such new lease shall be for a term equal to the remainder of the term of this Agreement as extended by any option to renew exercised by Lessee to extend this term hereof before giving effect to such termination, shall contain the same covenants, agreements, provisions, conditions and limitations as this Agreement, shall be superior to all rights, liens and interests intervening between the date of this Agreement and the date of such new lease, and shall be free of any and all rights of Lessee under this Agreement. (c) Upon the; execution and delivery of such new lease, the new Lessee, in its own name or in the name of City, maytake all appropriate steps as may be necessary to remove Lessee from the Property but City shall not be subjected to any liability for the payment of any fees (including attorneys'fees), costs or expenses in connection therewith. The new Lessee shall pay all such fees, including reasonable attorneys' fees, costs and expenses or, on demand, make reimbursement therefor to City. 8 r (d) The ownership of the improvements now or hereafter located on the Property shall be deemed to have been transferred directly to such transferee of Lessee interest in this Agreement and any provisions hereof causing such improvements to become the property of City in the event of a termination of this Agreement shall be ineffective as applied to any termination under subsection VIII.H. City shall execute such deed or other instrument of conveyance as may be necessary for title to the improvements to be insured in such transferee of Lessee interest. Nothing herein shall affect the terms of subsection III.D. below requiring transfer of the improvements to City upon expiration of the term or ultimate termination of this Agreement. (e) Subject to encumbrancer's obligations to reimburse the City pursuant to VIII.H.(a)above, any new lease made pursuant to this paragraph shall be prior to any mortgage or other lien, charge or encumbrance on the fee of the Property created by City. I. There shall be no mergerof the leasehold estate created under this Agreement with the fee estate in the Property by reason of the fact that the leasehold estate may be held directly or indirectly by or for the account of any person who shall also hold the fee estate, or any interest in such fee estate, nor shall there be any such merger by reason of the fact that all or any part of the leasehold estate may be conveyed or mortgaged to a lender who shall also hold the fee estate, or any part thereof, or any interest of City or Lessee under this Agreement. J. No surrender (except a surrender upon the expiration of the term or upon termination by the City pursuant and subject to the provisions of this Lease) by Lessee to City of this Agreement, or of the Property, or any part thereof, or of the improvements thereon, or of any interest therein, and no termination or rejection of this Agreement by Lessee shall be valid or effective, and neither this Agreement nor any of the terms hereof may be amended, modified, changed, rejected or cancelled without the prior written consent of the encumbrancer. K. Notwithstanding anything to the contrary herein, all compensation awarded upon a condemnation ortaking to which Lessee may be entitled under this Agreement shall be paid to the encumbrancer to be distributed in accordance with the terms of the deed of trust, mortgage or 9 0 other security instrument. Encumbrancer shall have the right to participate in the prosecution of any claim by Lessee for damages as permitted under this Agreement. L. No notice from City to Lessee hereunder shall be effective unless and until City gives to the encumbrancer a copy of its notice to Lessee." 17. Article IX is hereby amended by adding the following as new paragraph D immediately after paragraph C: "D. A termination of either Lease #2529 or Lease #2528 because of a default by Lessor or a "Condemnation" as provided in either Lease #2529 or Lease #2636". 18. Article X, paragraph B is amended as follows: inserting in the first sentence after the word "and" and before the word "if' the words "subject to any provision in this lease excusing, allowing a delay or extending the time for performance by Lessee"; and deleting in the first sentence the words "then and in such event Lessor shall have the right at once and without further notice to Lessee" and substituting therefor the words "then an 'Event of Default' shall be deemed to have occurred and during the continuance of an Event of Default Lessor shall have the right upon reasonable notice to Lessee,". 19. Article: X, paragraph C is amended by inserting the words "subject to any provisions of this Lease excusing, allowing a delay of or extending the time for performance by Lessee" after the words "if' and before the word "defaults" in the first sentence of said paragraph C. 20, Article: XIII, paragraph A is amended by deleting it in its entirety and substituting therefor the following: "Notices to Lessor provided for in this Agreement shall be sufficient if personally delivered or sent by registered mail, postage prepaid, addressed to the City Clerk, City of Palm Springs, Palm Springs, California 92262, notices to the Lessee shall be sufficient if personally delivered or sent by registered mail, postage prepaid, addressed to Donald G. Abbey, AP- Palm Springs Airport LLC, c/o The Abbey Company, 12383 Lewis Street,Suite 200,Garden Grove, California 92840-4643, and notices to Bank of America, N.A., shall be sufficient if personally delivered or sent by registered mail, postage prepaid, addressed to 5 Park Plaza, Suite 500, Irvine, California 92614, Attention: Loan Administration Manager or 10 other such respective addresses as the parties may designate to each other from time to time in writing. Such notices shall be defamed effective on the third business day afterthe date of mailing If served by mail or on the date of personal service if such notice is personally served. 21. Article XVI, paragraph D is hereby amended by inserting the words "subject to the provisions hereof' afterthe word "and" and before the word "do" in the first sentence of paragraph D. 22. Article XVIII is hereby amended by adding paragraphs C. and D as follows: "C. Lessor and Lessee agree that they shall, at any time at the request of the other promptly execute a memorandum or short form of this lease, in recordable form, setting forth a description of the leased premises, the term of this lease and any other provisions herein, or the substance thereof, as either party desires. The cost of recording shall be paid by the requesting party. D. Lessor covenants and agrees that Lessee, upon paying the rent and other charges herein provided and observing the covenants, conditions and terms of this Lease on Lessee's part to be kept or performed, shall lawfully and quietly hold, occupy, and enjoy the leased premises during the term of this lease without any hindrance or molestation by Lessor or any person claiming under Lessor and Lessee shall have the right to use in common with others the public facilities at the Palm Springs Municipal Airport and shall have the right of ingress to and egress from the leased premises and the public facilities for its employees, visitors and customers." 23. Article XXII is hereby amended by deleting it in its entirety and substituting the following: "Article XXII Lease Consolidation. In the event that Lessee holds leases on Parcels 1, 2, and 3 of Tract 14573, and the construction described under Article III.B. is completed, the City agrees to combine the three leases into one (1)new lease for the remainder of the Initial Term plus any extensions as provided in Article I." 24. The Lease is further amended by adding Article XXIII as follows: "Article XXIII - Condemnation. 11 A. Definitions. As used in this Agreement: 1. "Condemnation" means (a) the taking or damaging, including severance damage, by eminent domain or by inverse condemnation or for any public or quasi-public use under any statute, whether by legal proceedings or otherwise, by a condemnor (hereinafter defined), and (b) a voluntary sale or transfer to a condemnor, either under threat of condemnation or while condemnation legal proceedings are pending. 2. "Date of Taking" means the earlier of(a)the date actual physical possession is taken by the condemnor or (b) the date on which the right to compensation and damages accrues under the law applicable to the premises. 3. "Award" means all compensation, sums or anything of value awarded, paid or received for a total taking, a substantial taking or a partial taking (hereinafter defined), whether pursuant to judgment or by agreement or otherwise. 4. "Condemnor"means any public orquasi-public authority or private corporation or individual having the power of condemnation. 5. 'Total taking" means the taking by condemnation of the fee title to all the premises and all the improvements. 6. "Substantial taking" means the taking by condemnation of so much of the premises or improvements or both that one or more of the following conditions results: (a) The remainder of the premises would not be economically and feasibly usable by Lessee; and/or (b) A reasonable amount of reconstruction would not make the land and improvements a practical improvement and reasonably suited for the uses and purposes for which the premises are leased hereunder. 12 i Y 7. 'Partial taking" means any taking of the fee title that is not either a total taking or a substantial taking. 8. "Notice of intended condemnation"means any notice or notification on which a reasonably prudent man would rely and which he would interpret as expressing an existing intention of condemnation as distinguished from a mere preliminary inquiry or proposal. It includes, but is riot limited to, service of a condemnation summons and complaint on a party hereto. The notice is considered to have been received when a party receives from the condemnor a notice of intent to condemn, in writing, containing a description or map reasonably defining the extent of the condemnation. B. Notice and Representation. 1. The party receiving a notice of one or more of the kinds specified below shall promptly notify the other party of the receipt, contents and dates of such notice: (a) Notice of intended condemnation. (b) Service of any legal process relating to condemnation of the premises or improvements. (c) Notice in connection with any proceedings or negotiations with respect to such a condemnation. (d) Notice of intent or willingness to make or negotiate a private purchase, sale or transfer in lieu of condemnation. 2. Lessor and Lessee shall each have the right to represent its respective interest in each condemnation proceeding or negotiation and to make full proof of its claims. No agreement, settlement, sale ortransferto or with the condemnor shall be made without the consent of Lessor and Lessee. Lessor and Lessee shall each execute and deliver to the other any instruments that 13 maybe required to effectuate or facilitate the provisions of this Agreement relating to condemnation. C. Total or Substantial Taking. 1. On a total taking, this Agreement shall terminate on the date of taking. 2. If a taking is a less than a total taking, as defined in Section A above, Lessee may, by notice to Lessor given within sixty(60)days after Lessee receives notice of intended condemnation, elect to treat the taking as a substantial taking. If Lessee does not so notify Lessor, the taking shall be deemed a partial taking. If Lessee gives such notice and Lessor gives Lessee notice disputing Lessee's contention within sixty (60) days following receipt of lessee's notice,the dispute shall be promptly submitted to arbitration. If Lessor gives no such notice, the taking shall be deemed a substantial taking. A substantial taking shall be treated as a total taking if(a) Lessee delivers possession to Lessorwithin sixty (60) days after determination that the taking was a substantial taking and (b) there is not continuing an Event of Default solely because of the failure of Lessee to make a payment to Lessor at the time and in the amount required of Lessee under this Agreement. If these conditions are not met, the taking shall be treated as a partial taking. 3. Lessee may continue to occupy the premises and improvements until the condemnor takes physical possession. At any time following notice of intended total taking, or within the time limit specified for delivering possession in the provision on substantial taking, Lessee may elect to deliver possession of the premises to Lessor before the actual taking. The election shall be made by notice declaring the election and agreeing to pay all rents required under this Agreement to the date of taking. Lessee's right to apportionment of or compensation from the award shall then accrue as of the date that the Lessee goes out of possession. 4. On a total taking all sums, including damages and interest, awarded for the fee or leasehold or both shall be deposited promptly with an approved escrow agent 14 and shall be distributed and disbursed in the following order of priority: (a) AIR real and personal property taxes constituting a lien on the premises or improvements. (b) The balance due under any note and leasehold mortgage permitted hereunder and to which the fee is not subordinated. (c) The balance due under any note and mortgage encumbering the fee but not having priority over the lease, provided thatthe amount so paid shall be deducted from any amounts otherwise due to Lessor. (d) To Lessor a sum equal to the value of the premises taken, valued as unimproved land exclusive of improvements, as encumbered by this Lease. (e) To Lessor any expenses or disbursements reasonably paid or incurred by or on behalf of Lessor for or in connection with the condemnation proceedings. (f) To Lessor the value of the reversionary interest in the improvements. (g) To Lessee the balance of the award. D. Partial Taking. 1. On a partial taking this Agreement shall remain in full force and effect covering the remainder of the premises and improvements, except that the minimum annual rent, minimum monthly rent and rent adjustment payments shall be reduced in the same ratio as the percentage of the area of the premises taken bears to the total area of the premises. 2. Promptly after a partial taking, at Lessee's expense and 15 • • in the manner specified in provisions of this Agreement relating to maintenance, repairs and alterations, Lessee shall repair, alter, modify or reconstruct the improvements ("restoring") so as to make them reasonably suitable for Lessee's continued occupancy for the uses and purposes for which the premises are leased. If Lessee does not restore as above, the cost of such restoring shall be deducted from Lessee's share of the award and paid to any leasehold mortgagee demanding it and otherwise to Lessor. 3. On a partial taking all sums, including damages and interest, awarded for the fee or leasehold or both, shall be deposited promptly with an approved escrow agent and shall be distributed and disbursed in the following order of priority: (a) The cost of restoring the improvements, plus any amount assessed, awarded, paid or incurred to remove or relocate subtenants, plus any amount awarded for detriment to business. (b) To Lessor a sum equal to that percent of the value of the premises equal to the percentage the area of the premises taken bears to the total area of the premises; the value of the premises shall be as unimproved land exclusive of improvements, as encumbered by this Lease. (c) To Lessor any expenses or disbursements reasonably and necessarily incurred or paid by or on behalf of Lessor for or in connection with the condemnation proceedings. (d) To Lessee any expenses or disbursements reasonably and necessarily incurred or paid by or on behalf of Lessee for or in connection with the condemnation proceedings. 16 • (e) To Lessee the balance of the award. E. Limited Takings. 1. On the taking, other than a temporary taking, of less than the fee in the premises or improvements or both, the question whether the taking is total, substantial or partial and the effects on the term, rent and apportionment of awards shall in the event ofdispute be submitted to arbitration. Both parties waive their rights under Section 1265.130 of the California Code of Civil Procedure and agree that the right to terminate this Agreement in the event of a taking shall be governed by the provisions of this ARTICLE XXIII. 2. On any taking of the temporary use of all or any part or parts of the premises or improvements or both for a period, or of any estate less than a fee, ending on or before the normal expiration date of the term, neither the term northe rent shall be reduced or affected in any way and Lessee shall be entitled to any award for the use or estate taken. If a result of the taking is to necessitate expenditures for changes, repairs, alterations, modifications or reconstruction of the improvements to make them economically viable and a practical whole, Lessee shall receive, hold and disburse the award in trust for such work. At the completion of the work and the discharge of the premises and improvements from all liens and claims, Lessee shall be entitled to any surplus and shall be liable for any deficit. If any such taking is for a period extending beyond the expiration date of the term, the taking shall be treated under the:foregoing provisions for total, substantial and partial takings. Except as expressly amended by this Amendment, the Lease shall remain unmodified and in full force and effect in accordance with its terms. If there are any conflicts or inconsistencies between the terms of the Lease and this Amendment, this Amendment shall control. This Amendment may be executed in multiple counterparts each of which shall be deemed an original and all of which together shall constitute one and the same original. SIGNATURES ON FOLLOWING PAGE 17 I�A?� IN WITNESS WHEREOF, the parties hereto have executed this Asgigeaient as of the day and year first above written. ATTEST: "City" CITY OF PALM SPRINGS, a municipal corporation ity Clerk B APPROVED AS TO FORM: Ci anager I "Lessee" City /�'ttorney AP-PALM SPRINGS AIRPORT LLC, a Delaware limited liability company APPROVED BYTH,E Cl)r`r CO P�UI By: Abbey Properties LLC, a California limited liability company � 02L��3=erg-=Z��Q^—� Its: Manage By:f ,r Dortald;G. Abbey Its: Governing Member pa I mspri ngs\fourth amend ment2636.v2 18 r----- ------....---- -.. . EXHIBIT "A„ PARCEL 1: Lot 2 of fract No. 14573 in the City of Palm Springs, County of Riverside, State of California, according to map recorded in Book 109, Pages 97 and 98 of Tract Maps in the office of the County Recorder of said county. (2.38 acres, more or less) . PARCEL 2: A nonexclusive easement for pedestrian ingress and egress, for vehicular i ingress and egress, and for the right to use designated walkways, driveways and parking areas, as such improvements exist from time to time, in Lots I and 3 of Tract No. 14573, according to map recorded in Book 109, Pages 97 and 9b of Tract Maps in the office of the County Recorder of Riverside County, Califor- nia, such easement to extend to PRC, its successors and assigns, PRC's subten- ants, their licensees and business invitees. THE LEASEHOLD INTEREST BEING CONVEYED HEREIN IS SUBJECT TO: I A nonexclusive easement for pedestrian ingress and egress, for vehicular ingress and egress, and for the right to use designated walkways, driveways and parking areas, as :such improvements exist from time to time, such easement running in favor of all persons with a real property and/or other leasehold interest in Lots 1 and 3 of Tract No. 14573, their licensees and business invitees. i I I 2636 - - Memorandum To: Finance From: Office of the City Clerk Date: 12/5/2000 Re: Apostle Trust Agreements#2528,#2529,&#2636 Amendments, Assignment and Assumption of Leases,and Estoppel Certificate for Leases are attached for your records. Copies have been sent to the parties by the Airport,and we have kept the originals and recorded copies for our records. Barb VIA OVERNIGHT MAIL December 1, 2000 Mr. Barry Griffith / Assistant Director of Aviation City of Palm Springs Department of Aviation Administrative Office 3400 East Tahquitz Canyon Way Palm Springs, California 92262 Re: Airport Park Plaza 255, 265 and 275 North El Cielo Boulevard Palm Springs, California Dear Barry: Pursuant to our telephone conversation yesterday with respect to AP-Palm Springs Airport LLC's acquisition of the above-referenced property, enclosed please find the following documentation as promised: 1. Fully executed original Fourth Amendment to Lease Agreement No. 2528 2. Fully executed original Fourth Amendment to Lease Agreement No. 2529 3. Fully executed original Fourth Amendment to Lease Agreement No. 2636 4. Fully executed original of the Assignment and Assumption of Lease Agreement No. 2528 and Consent to Assignment along with a C,Dnformed copy of the Assignment. 5. Fully executed original of the Assignment and Assumption of Lease Agreement No. 2529 and Consent to Assignment along with a Conformed copy of the Assignment. 6. Fully executed original of the Assignment and Assumption of Lease Agreement No. 2636 and Consent to Assignment along with a Conformed copy of the Assignment. 7. Fully executed original Memorandum of Ground Lease to Lease Agreement No. 2528, along with a confirmed copy of the recorded memorandum 8. Fully executed original Memorandum of Ground Lease to Lease Agreement No. 2529, along with a confirmed copy of the recorded memorandum 9. Fully executed original Memorandum of Ground Lease to Lease Agreement No. 2636, along with a confirmed copy of the recorded memorandum 10. Fully executed Lessor's Estoppel Certificate for Lease Agreement No. 2528 11. Fully executed Lessor's Estoppel Certificate for Lease Agreement No. 2529 12. Fully executed Lessor's Estoppel Certificate for Lease Agreement No. 2636 I apologize for the delay in forwarding these documents to you and trust that this has not caused an inconvenience. Y si cerely, R bert eMoine Exec ' e Vice President Ac isitions Enclosures Cc: David Gullen, Esq.- The Abbey Company-w/o enc. Fred Galante, Esq.-Rutan & Tucker-w/enc. 12383 Lewis Street, #200 • Garden Grove, CA 92840-4643 9 TEL 714.740.8800 • FAX 714.740.8801 .OL Ij��' I!nIF LESSOR'S ESTOPPEL CERTIFICATE AP-Palm Springs Airport LLC c/o The Abbey Company 12383 Lewis Street, Suite 200 Garden Grove, California 92840-4643 Attention: Donald G. Abbey Re: Lease dated November 3, 1988 as amended by Amendment No. 1 to Indenture of Lease Agreement #2636, dated January 2, 1991, Second Amendment to Lease Agreement#2636, dated October 21, 1993 and Third Amendment to Lease Agreement #2636, dated December 15, 1993 (collectively the "Lease") by and between the City of Palm Springs, California,a municipal corporation("Landlord")and Helen Apostle as Trustee of the Survivor's Trust Created under the Apostle Family Trust dated July 6, 1984, as amended ("Tenant") as successor in interest to John Apostle and Helen Apostle, Trustees of the Apostle Family Trust dated July 6, 1984, as amended, as successor in interest to Peacock-Radaker Corporation, a California corporation Ladies and Gentlemen: The undersigned Landlord understands that AP-Palm Springs Airport LLC, a Delaware limited liability company, or its assignee ("Buyer"), intends to acquire from Tenant, all of Tenant's right, title and interest under the Lease, including, but not limited to, Tenant's leasehold estate in the real property leased under the Lease (the "Premises"). Landlord understands that Bank of America ("Lender") intends to make a loan to the Buyer in conjunction with Buyer's purchase of the Premises. The undersigned Landlord does hereby certify to Buyer and to Lender, as follows: 1. A true; and correct copy of the Lease is attached hereto as Exhibit "A". Tenant presently is the "Tenant" as defined in the Lease and presently leases the Premises. 2. During the term of the Lease, all buildings, structures and improvements (collectively, the "Improvements") now existing or hereafter constructed on the Premises shall remain vested in Tenant pursuant to the terms of the Lease. 3. The Lease is in full force and effect and has not been modified, supplemented, or amended, except by (i) Amendment No. 1 to Indenture of Lease Agreement #2636 dated January 2, 1991, (ii) the Second Amendment to Lease #2636 dated October 21, 1993, and (iii) Third Amendment to Lease Agreement #2636 dated December 15, 1993, true and correct copies of which are attached to this Estoppel Certificate as part of Exhibit"A". The Lease, as amended, constitutes the entire agreement between the Landlord and the Tenant relating to the Premises and there are no other promises, agreements, understandings, or commitments (oral or in writing) between Landlord and Tenant relating to the Premises. 4. There are no defaults under the Lease or events which, with notice or the passage of time, or both, would constitute a default in the performance of Tenant's obligations under the Lease. Landlord has not given Tenant written notice of any dispute between Landlord and Tenant or that Landlord considers Tenant in default under the Lease. The Landlord is not in default in the performance of its obligations under the Lease. 5. Tenant has not paid a security or other deposit with respect to the Lease. 6. The Effective Date of the Lease is November 1, 1988, and the term of the Lease and the payment of rent commenced as of the Effective Date. All conditions to the commencement of the term of the Lease as set forth in the Lease, have either been satisfied or waived and there are no other conditions precedent to the effectiveness of the Lease. 7. Tenant is obligated to pay rent to Landlord at the rate set forth in the Lease. Tenant is current with respect to, and is paying fully the rent and other charges stipulated in the Lease. The current monthly base rent under the Lease is $4,212.91. Tenant does not pay Landlord percentage rent in the amount of ten percent (10%) and the percentage rent breakpoint is when percentage rent exceeds base rent. Monthly rent is paid under the Lease in advance. Tenant has fully paid the monthly rent for the month of October, 2000 in the amount of$4,212.91, which payment was due on October 1, 2000. 8. There is no outstanding balance due or owing for delinquent rent or deferred rent, the obligation for which under the Lease has been fully paid by Tenant or otherwise fully satisfied. 9. The Lease is scheduled to expire on October 31, 2038. 10. Landlord owns good and marketable fee title to the Premises, and no other person or entity has any interest in the Premises and Landlord has not assigned all or a portion of its interest in the Lease to any person or entity. 11. Landlord has not permitted a mortgage or deed of trust to be recorded against Landlord's fee interest in the land demised by the Lease or its reversionary interest in the Improvements. -2- • • Landlord acknowledges that each of Buyer and Lender is relying upon the representations made in this Estoppel Certificate. This Estoppel Certificate shall be binding upon and inure to the benefit of the successors and assigns of Landlord, Tenant, Buyer, and Lender. T: Very truly yours, CITY OF PALM SPRINGS, y Clerk a municipal corporation [Print Name]: [Print Title]: City Manager Darted: 0 — aS 2000 The foregoing is hereby approved as to form this yg day f Cif i� , 2000. �By: ' Jf .d: ( y City Attorney. U:\PALMSPRINGS\LANDLORDESTOPPEL2636.v2 -3- PARCEL 1: Lot 2 of fract No. 14573 in the City of Palm Springs, County of Riverside, State of California, according to map recorded in Cook 109, Pages 97 and 9C of Tract Maps in the office of the County Recorder of said county. (2.36 acres, more or less) . i PARCEL 2: A nonexclusive easement for pedestrian ingress and egress, for vehicular ingress and egress, and for the right to use designated walkways, driveways and parking areas, as such improvements exist from time to time, in Lots 1 and 3 of Tract No. I4573, according to map recorded in Cook 109, Pages 97 and 9B of Tract Maps in the office of the County Recorder of Riverside County, Califor- nia, such easement to extend to PRC, its successors and assigns, PRC's subten- ants, their licensees and business invitees. THE LEASEHOLD INTEREST BEING CONVEYED HEREIN IS SUBJECT TO: A nonexclusive easement for pedestrian ingress and egress, for vehicular- ingress and egress, and for the right to use designated walkways, driveways and parking areas, as such improvements exist front time to time, such easement running in favor of all persons with a real property and/or other leasehold interest in Lots 1 and 3 of Tract No. 14573, their licensees and business invitees. 2636 John & Helen Apostle Peacock-Radaker Corp. 3rd Amend to Lease Agr. AGREEMENT #2636 THIRD AMENDMENTC TO LEASE AGREEMENT R18232, 11-17-93 THIS THIRD AMENDMENT TO LEASE AGREEMENT ("Amendment") is entered into this /5� day of December, 1993 by and between the CITY OF PALM SPRINGS, a municipal corporation ("Landlord") , and JOHN APOSTLE and HELEN APOSTLE, as trustees of The Apostle Family Trust, dated July 6, 1984 ("Tenant") . R E C I T A L S A. Landlord and The Peacock-Radaker Corporation, a California corporation ("Peacock") , entered into that certain Indenture of Lease Agreement No. 2636 dated November 3 , 1988 ("Original Lease") pursuant to which Landlord leased to Peacock certain real property more particularly described therein upon the terms and conditions set forth therein. B. Landlord and Peacock amended the Original Lease pursuant to that certain Amendment No. 1 to Indenture of Lease Agreement #2636 dated January 2 , 1991 ("First Amendment") pursuant to which Landlord agreed to defer and amortize certain rental increases upon terms and conditions more particularly set forth therein. C. Concurrently with the execution of this Amendment, Peacock has assigned its interest under the Original Lease as amended by the First Amendment to Tenant and Tenant has assumed Peacock's obligations thereunder. - D. Prior to the execution of this Amendment, Landlord and Tenant entered into that certain Second Amendment to Lease Agreement #2636 dated October al , 1993 ("Second Amendment") . E. Landlord and Tenant desire to amend the terms of the Original Lease as more particularly set forth herein. The Original Lease as amended by the First Amendment, the Second Amendment and this Amendment shall hereinafter be referred to as the "Lease". F. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Original Lease and/or the First Amendment. accordance with reasonable accounting procedures, consistently applied, which reflect the: financial condition of Tenant on the date of such financial statement, which financial statement(s) shall demonstrate that Tenant has the minimum net worth set forth above. 2 . Termination of Arendment. If Tenant assigns this Lease in compliance with all of the terms and conditions of this Lease, then the terms and conditions of this Amendment shall automatically terminate. 3 . Full Force and Effect. Except as set forth herein, the Original Lease, as modified by the First Amendment, shall remain unmodified and in full force and effect. IN WITNESS WHEREOF, this Second Amendment to Lease Agreement was executed as of the date first written above. ATTEST: CITY OF NGS, a mun cipal corpo on B By; C' Clerk CityT�6agfgt APPROVED AS TO FORM: RUTAN & TUCKER David Aleshir City Attorney JOH14 APOSTL , as trustee of The Apostle Family Trust, dated July 6, 84 r �,tiP- Peacock-Radaker - Amend #2 APOSTLE, John & Helen trustees fir, , " Apostle Family Trust ' r�P rF,�, �� AGREEMENT #2636 R18232, 11-17-93 SECOND AMENDMENT TO LEASE AGREEMENT #zo_,u rA.hs SPRING'S,C'A THIS SECOND AMEN MENT TO LEASE AGREEMENT ( "Amendment") is entered into this day of Nx?� 1993 by and between the CITY OF PALM SPRINGS, a municipalc'co oration ( "Landlord" ) , and JOHN APOSTLE AND HELEN APOSTLE, trustees of the Apostle Family Trust, dated July 6, 1984 ( "Tenant." ) . R E C I T A L S A. Landlord and The Peacock-Radaker Corporation, a California corporation ( "Peacock" ) , entered into that certain Indenture of Lease Agreement No. 2636 dated November 3 , 1988 ( "Original Lease") pursuant to which Landlord leased to Peacock certain real property more particularly described therein upon the terms and conditions set forth therein. B . Landlord and Peacock amended the Original Lease pursuant to that certain Amendment No . 1 to Indenture of Lease Agreement #2636 dated January 2 , 1992 ( "First Amendment" ) pursuant to which Landlord agreed to defer and amortize certain rental increases upon terms and conditions more particularly set forth therein. C. Concurrently with the execution of this Amendment, Peacock has assigned its interest under the Original Lease as amended by the First Amendment to Tenant and Tenant has assumed Peacock' s obligations thereunder pursuant to the terms of that certain ass t 6 dated n:eirRm by 2� , 1993 . D. Landlord and Tenant desire to amend the terms of the Original Lease as more particularly set forth herein. The Original Lease as amended by the First Amendment and this Amendment shall hereinafter be referred to as the "Lease" . E. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Original Lease and/or the First Amendment . NOW, THEREFORE, the parties hereto agree as follows : 1 . First Amendment Deferred Rent . Landlord and Tenant hereby acknowledge that the deferred rent specified in Section 1 of the First Amendment is hereby forgiven. 2 . Delinquent Rent . The following shall be added as Section D of Article II of the Lease : "D. Landlord and Tenant hereby acknowledge that Peacock failed to pay monthly rent and late charges owing under the Lease for the months of June through October, 1993 in the total amount of Eight Thousand Three Hundred Thirty-Two Dollars ($8, 332 . 00) ( "Delinquent Rent" ) . "B . Improvements . Tenant intends to construct certain facilities and buildings on the demised premises . Tenant shall, without cost to Landlord, commence construction of improvements within the scope of the permitted uses on or before November 1, 2003 and shall thereafter diligently prosecute the construction to completion. It is understood and agreed that Tenant shall install all utilities 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 of Palm Springs prior to the commencement of construction. It is further agreed that Tenant shall submit to the Palm Springs Airport Commission a complete site, use and construction plan including architectural renderings sufficient to allow the Commission to determine the character and nature of the improvements to be constructed on the premises . " 4 . Default . The following shall be added as subsection 5 of Section A of Article X of the Lease : 115 . Tenant shall have committed a default under the terms of that certain Lease Agreement #2828 dated May 1, 1988 between Landlord and BA Properties I , Inc. ( "BA" ) , as amended from time to time, or under that certain Lease Agreement #2829 dated May 1, 1988 between Landlord and BA, as amended from time to time . " S . Effectiveness . The effectiveness of this Amendment is expressly conditioned upon obtaining the consent of TOPA Thrift and Loan to the terms of this Amendment and the Assignment of the Lease to Tenant . 6 . Full Force and Effect . Except as set forth herein, the Original Lease, as modified by the First Amendment, shall remain unmodified and in full force and effect . IN WITNESS WHEREOF, this Second Amendment to Lease Agreement was executed as of the date first written above . ATTEST: CITY OF PALM SPRINGS, a municipal corporation By.-- By: ti�y Clerk /City Manager APPROVED AS TO FORM: (� RUTAN & TUCKER CONSENT OF LENDER The undersigned, the holder of a leasehold deed of trust encumbering the premises referred to in the amendment to which this consent is attached, hereby consents to the terms and conditions of said lease amendment. TOPA THRIFT AND LOAN By: Robert W. G aver Its: Senior Vice President INDENTURE �DF LEASE AGREEMENT NO. 2636 WHEREAS the City of Palm Springs, California, hereinafter called "CITY" or "LESSOR", and The Peacock-Radaker Corporation, hereinafter called "PRC", entered into Indenture of Lease Agreement No. 2636, on November 3, 1988; and WHEREAS CITY and PRC mutually agree to amend said Agreement No. 2636 to defer rental increases between May 1, 1990 and October 31, 1993, NOW THEREFORE, in consideration of the premises, mutual covenants herein contained, and other good and valuable consideration, the parties hereto do mutually covenant and agree, as follows: Section 1. "Article II -• Rental and Other Paymente, Section A. Leased Premises" is hereby modified by the addition of the following paragraph: "For the period May 1, 1990 through October 31, 1993, monthly rental in excess of $1,587 shall be deferred and accrue interest at ten percent (10%) , per annum. The deferred rental and accrued interest shall be paid to CITY in the form of a rental surcharge commencing on January 1, 1994. The combined total of deferred rental and accrued interest as of January 1, 1994 shall be paid to CITY amortized over a five-year (S-yr. ) period at ten percent (10%) interest. " Section 2. All other terms and conditions of Agreement #2636 are ratified and shall remain in full force and effect except as expressly amended herein. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be executed on the 2nd day of January , 1991. ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By �� City Clerk Acting City Manager REVIEWED & APPROVED THE PEACOCK-RADAKER CORPORATION A r CKCVEG BY THE CITY COUNCIL By �ab� BY %. NO.4/4,22 * State of ,. On this the 97 day of DDpr } Lrp 1}*�mb r 199�, before * * County of Ri_jivergGlr e me, Marsha J. Lathrop * the undersigned Notary Public, personally * * * appeared James G. Gotses * A- personally known to me * _ proved to me on the basis of satisfactory * evidence to be the person(s) who executed the * within instrument nn Vi m PrcciAcni- F ccc!,-Radaker Corporation f,. vort Lease Agreement TO* AGREEMENT #2636 .,G -fie 1,104274, 11-2-88 �i . fiK cr;y e: `r,;JM sF nrsss BTX 178E FAI M SPRINGS, CA 92262 G � n a t - 0 ` x 3 u� w = gam co INDENTURE of LEASE AGREEMENT between THE CITY OF PALM SPRINGS and THE PEACOCK-RADAKER CORPORATION 253625 INDENTURE OF LEASE AGREEMENT TABLE OF ARTICLES NUMBER SUBJECT PAGE I Term 1 II Rental and Other Payments 1 III Use of Premises 5 IV Obligation of Lessee 7 V Public Facilities , Ingress, Egress & Quiet Enjoyment 7 VI Lessor's Reserved Rights 7 VII Insurance 8 VIII Encumbrance 12 IX Termination by Lessee 14 X Termination by Lessor 14 XI Assignments - Options to Terminate 16 XII Indemnity 17 XIII Notices and Consents and Approvals 17 XIV Right of Inspection 18 Xv Holding Over 18 XVI Maintenance - Alterations 18 XVII Possessory Interest 19 XVIII General Provisions 20 XIX Non-Discrimination and FAA Required Clauses 20 XX Right of First Refusal 22 VVT T-,I ,A fl--.,:,.4....,. .... 253625 INDENTURE OF LEASE AGREEMENT This INDENTURE OF LEASE, made and entered into by and between the CITY OF PALM SPRINGS, CALIFORNIA (hereinafter called "CITY") , and THE PEACOCK-RADAKER CORPORATION, a corporation organized and existing under the laws of the State of California, having a place of business at 1313 West Civic Center Drive, Suite 4, Santa Ana, California 92703, (hereinafter called "PRC") : W I T N E S S E T H WHEREAS, CITY owns and operates an airport known as the Palm Springs Regional Airport, situated in the City of Palm Springs, County of Riverside, State of California (hereinafter called the "Airport") ; and WHEREAS, CITY is desirous of leasing certain premises hereinafter more fully described as Parcel 2, on Exhibit "A," attached hereto and made a part hereof for all purposes, forming a part of the Airport; and WHEREAS, PRC desires (except as prohibited in this Agreement) to engage in any or all legally permitted businesses and uses, 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, CITY does hereby demise, rent and let to PRC, and PRC does hire, take and lease from CITY, the parcel of land containing approximately 2.38 acres, as more particularly described and shown 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: AIRTICLE I - TERM 253625 Eighty Dollars ($38,080) , and that sum is the base rent for purposes of rental adjustment as hereinafter provided. To facilitate improvement of said land, and as part of the consideration and inducement for PRC 's entering into this lease, CITY agrees to accept and PRC agrees to pay to CITY rentals for the land, as described on attached Exhibit "A" and containing approximately 2.38 acres, as follows: all rentals shall be paid in monthly installments , in advance; for the six-month period commencing November 1, 1988 through April 30, , 1989, there shall be no rental payments; for the period commencing May 1, 1989, through April 30, 1990, the rental shall be One Thousand Five Hundred Eighty- Seven Dollars ($1,587) , per month; for the period commencing May 1, 1990 through April 30, 1991, the rental shall be Two Thousand Three Hundred Eight Dollars ($2,380) , per month; for the period commencing May 1, 1991 through October 30, 1993, the rental shall be Three Thousand One Hundred Seventy-Three Dollars ($3,173) , per month; for the remainder of this lease, an amount of money to be determined by revising the base rent as stated above in this paragraph to reflect the change, if any, in cost of living as shown in the Consumer Price Index (CPI ) . The rental shall be revised effective November 1, 1993, and every five (5) years thereafter, using the Consumer Price Index for the preceding July. The rent for each five-year period shall be the rent for the preceding five-year period plus; a percentage of that rent which is equal to the percentage increase in the CPI for the same preceding five-year period. During any five-year period, the adjustment shall not exceed 256. For the purpose of this computation it is agreed that the Consumer Price Index for the month of July, is the base or 100%. The Consumer Price Index (CPI) for July, 1988, was 122. 1. The CPI Index to be used is that reflected by the Consumer Price Index, All Items , All Urban Consumers, Los AngelesAnaheim-Riverside 253625 rentals , fees and other charges not timely received by CITY and within fifteen (15) days after receipt by PRC of a notice of delinquency will bear a late charge equal to five percent (5%) of the payment due and owing. If such rentals, fees and other charges are not received within thirty (30) days , interest shall accrue on the unpaid balance plus the unpaid late charge at the rate of twelve percent (12%) per annum or the highest rate which may be legally charged, whichever is lower, from the due date until paid in full . The rentals due, as set out hereinabove shall be payable on the first day of each and every month throughout the term of this Agreement. B. Percentage Rental . Beginning the sixth (6th) year (November 1 , 1993) , in addition to the minimum annual rental , PRC shall pay CITY, as additional rent for each "lease year", the amount by which 10% of the "gross income" for each such "lease year" exceeds the minimum annual rental , as adjusted. C. For the purpose of this Agreement, "gross income" for any lease year shall be an amount equal to the gross income determined in accordance with generally accepted accounting principles consistently applied, derived by PRC, acting as a sublessor, from the rental of the premises, including, but not limited to, receipts from the resale of gas, electric and cable television services in excess of PRC' s cost of providing such services, except that in the event PRC (i ) takes over the day-to-day operation of any of the business operations carried on within the premises , or (ii ) occupies any other portion of the premises (such portion riot being leased to a third party) the gross amount received by PRC by such operation or occupancy shall not be deemed a part of "gross income" as such term is defined herein, but, in this event, there shall be added to "gross income" an amount equal to the total fair rental value for the portion of the premises operated or occupied by PRC, as mutually 253625 annual rent per square foot is $12.00, of which $3.00 per square foot repre- sents the operating expenses, real estate taxes and insurance which would be paid, either directly, or reimbursed to PRC, as sublessor, by a sublessee under a "net" lease, the income would be $9.00 per square foot for the purpose of reporting gross income pursuant to this Article II , Paragraph C. The following items shall be excluded from "gross income" to the extent that they have been included therein: 1. Any income or receipts which under generally accepted accounting principles consistently applied are derived from any loan obtained by PRC as permitted by the provisions of these lease, and the sale or disposal of any capital assets; 2. Any income or receipts which under generally accepted accounting principles consistently applied are derived from any indebtedness; 3. Any income or receipts which under generally accepted accounting principles consistently applied are derived from the investment by PRC of any funds not invested in the premises or the operation of PRC' s business within the premises; 4. Increases of operating expenses over a base year paid by a sublessee to PRC, as sublessor; and 5. Any income or monies which under generally accepted accounting prin- ciples consistently applied are derived from the receipt of insurance proceeds. D. The minimum annual rental as provided for above shall be paid monthly, in advance, on the first day of each and every month during the term of this Agreement, in a sum equal to one-twelfth of the minimum annual rental . In addition to the minimum annual rental , PRC shall furnish to CITY by April 1st of each year a verified statement of its total gross income, as defined above, ��3szs E. PRC shall keep accurate records of the revenue from its operations. Such records shall be made available to authorized representatives of CITY On request at all reasonable times. All supporting records, documents, books and accounts shall be kept and retained by PRC for a period of not less than three (3) years. Within ninety (90) days after the close of each lease year during the term of this Agreement, PRC shall have caused a revenue audit to be made by a certified public accountant, licensed in the State of California, of its annual gross income from the operations herein authorized and of the rental payments which it has made to CITY in relation thereto. For purposes of this Agreement, the required revenue audit shall consist of a letter by a certified public accountant stating the amount of the rent which has been collected by PRC from the subject premises. PRC shall have submitted to CITY by said accountant a copy of such audit. Should such audit disclose a discrepancy between the amount paid to CITY and the amount due as indicated by such audit, adjustment shall be made promptly between the parties of the sum theretofore paid. If CITY does not contest or otherwise challenge said audit report within one (1) year of its receipt by CITY, said audit report will be conclusively declared accurate and CITY will be estopped to later object to said report. ARTICLE III- USE OF PREMISES - A. Lawful Purpose. On the leased premises, PRC shall have the right to and shall rent office spaces and/or other facilities of a similar nature and may provide other services incidental thereto. It is specifically understood by PRC that the rights and privileges granted herein are granted for purposes of operating an office complex. In order to maintain the character of the development as airport related, it is 253625 medical offices , airline offices, and other operations so associated. However, nothing contained herein shall prevent PRC from doing business or renting office space as allowed herein to those individuals, businesses , or corpora- tions which are not specifically airport-related. B. Improvements. PRC intends to construct certain facilities and build- ings on the demised premises. PRC shall , without cost to CITY, commence construction of improvements within the scope of the permitted uses within forty-eight (48) months of the signing this lease. For each month that PRC fails to complete full improvement, as required hereinabove, monthly rental payments shall be increased in an amount equal to one percent (1%) of the then current annual rental . This increase shall remain in full force and effect until the contemplated improvements are completed. Completion shall be at Certificate of Occupancy. It is understood and agreed that PRC shall install all utilities as required by the standards of the City of Palm Springs. Further, it is understood and agreed that all construction plans and specifica- tions must be approved by the appropriate agencies of the City prior to the commencement of any construction. It is further agreed that PRC shall submit to the Palm Springs Airport Commission a complete site, use and construction plan including architectural renderings sufficient to allow the Airport Com- mission to determine the character and nature of the improvements to be con- structed on the premises. C. Drawings. Within thirty (30) days following completion of any con- struction on demised premises, PRC shall give to CITY, for filing, a complete set of as-built drawings , including but not limited necessarily to all under- ground facilities. D. Title to Improvements. It is specifically agreed that, at the sole 253625 ARTICLE IV - OBLIGATION OF LESSEE A. General Obligations. PRC, its 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 Regional Airport as they now exist or as they may hereafter be lawfully enacted or amended„ Violations thereof by PRC, its agents, ser- vants or employees, or revocation of permits or licenses required in the performance of this Agreement, shall be cause for termination of this Agreement at the option of the CITY if not corrected after ninety (90) days' written notice is provided PRC. PRC shall procure and maintain, at its own expense, all licenses or permits necessary to legally conduct business in the City of Palm Springs. B. Repair and Maintenance of Premises. PRC 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. PRC 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. C. Utilities. PRC agrees to make its own arrangements for all utility _. services and to pay for such services on its leased premises. ARTICLE V PUBLIC FACILITIES, INGRESS, EGRESS AND QUIET ENJOYMENT CITY agrees that PRC, 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 PRC shall have the right +n ncn in nnmmnn r.ri+h n+hnvr +{.n nnhlin f>riliiinc >+ +hn ❑iv.nnv.+ >nrl i+ 253625 except those premises leased to PRC, and CITY reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent PRC from erecting, or permitting to be erected, any building or other structure on the Airport which, in the opinion of CITY, would limit the usefulness of the Airport or constitute a hazard to aircraft. B. Lease to United States: During the time of war or national emergency, CITY 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 PRC otherwise elects to terminate the lease, as provided in Paragraph "C" of Article IX. ARTICLE VII - INSURANCE A. Liability Insurance: During the entire term of this agreement, PRC 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 CITY or PRC,, or any person acting for the City, or PRC, 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 PRC, or any person 253625 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 PRC agrees that the minimum limits hereinabove designated shall be changed accordingly upon request by the City Manager; provided, however, that the PRC 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 . PRC agrees that provisions of this paragraph as to maintenance of insur- ance shall not be construed as limiting in any way the extent to which PRC may be held responsible for the payment of damages to persons or property resulting from PRC's activities , or the activities of any person or persons for which PRC is otherwise responsible. B. Worker's Compensation Insurance: PRC shall procure and maintain, at its sole expense, Workers ' 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 PRC and the City against any loss, claim, or damage arising from any injuries or occupational diseases happening to any worker employed by PRC in the course of carrying out the within agree- ment. C. Fire & Extended Coverage Insurance: PRC 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 PRC'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. PRC 253625 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: 1. 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 PRC and CITY to pay for reconstruction, 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 PRC. Provided further, however, nothing herein shall prevent PRC, 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. 2. In 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. Said mortgagee or beneficiary shall hold the balance of said proceeds for CITY and PRC as their interest may appear. PRC agrees to increase the limits of liability when, in the opinion of the City Manager, the value of the improve- ments covered is increased, subject to the availability of such insurance at the increased limits ; provided, however, that PRC may appeal to the City Council within ten days after any increase is requested, and such requirement 253625 rubbish in a manner satisfactory to 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, PRC 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 PRC 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 CITY and approved in writing in order to replace in kind and scope the operation which existed prior to such damage. PRC agrees that preliminary steps toward performing repairs , restoration, or replacement of the premises shall be commenced by PRC 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. E. Automotive Insurance. PRC 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 owned or non-owned automo- tive equipment, if any, with coverage limits of not less than One Million Dollars ($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. F. Evidence of Insurance. A certificate of insurance or an appropriate insurance binder evidencing the above insurance coverage with a company accept- able to the City's Risk Management Officer shall be submitted to CITY prior to execution of this Agreement on behalf of the City. 253625 is canceled, PRC shall , prior to the cancellation date, submit to the City Clerk new evidence of insurance in the amount heretofore established. ARTICLE VIII - ENCUMBRANCE A. 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, 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. B. Any encumbrance must be confined to the leasehold interest of PRC or the subleasehold interest of a sublessee and shall not jeopardize in any way CITY's interest in the land. PRC agrees to furnish, as requested, any finan- cial statements or analyses pertinent to the encumbrance that CITY may deem necessary to justify the amount, purpose and terms of said encumbrance. C. In the event of default by PRC of the terms of an approved encum- brance, 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 CITY notice of the same character and duration as is required to be given to PRC by such encumbrancer -- and/or the laws of the State of California. Any notice of default shall comply with the provisions of Section 2924(c) of the Civil Code of the State of California. D. 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 �....�...,+ -.-....:.1-A +1,..+ +L.. ,-4-.-- -L-1 l -...,. - 4- + ' , L L .1 L 19 253625 E. 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, CITY 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. F. "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 ex- penses , 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 CITY, which consent may not be un- reasonably 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 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. G. CITY agrees that it will not terminate this lease because of any default or breach hereunder on the part of PRC if the encumbrancer under the trust deed, within ninety (90) days after service of written notice on the encumbrancer by CITY of its intention to terminate this lease for such default or breach, shall : 1. 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; provid- 253625 accept from PRC an assignment in lieu of foreclosure, and keep and perform all of the covenants and conditions of this lease requiring the payment or expendi- ture of money by PRC 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 foreclo- sure. ARTICLE IX - TERMINATION BY LESSEE In addition to all other remedies available to PRC, this Agreement shall be subject to cancellation by PRC should any one or more of the following events occur: A. The issuance by any court of competent jurisdiction of a permanent injunction in any way preventing the use of the leased premises for any purpose hereinbefore enumerated. B. The breach by CITY of any of the terms , covenants or conditions of this Agreement to be kept, performed and observed by CITY, and the failure of CITY to remedy, or to commence action to remedy such breach for a period of thirty (30) days after written notice from PRC of the existence of such breach. C. The assumption by the United States Government, or any authorized agency of same, of the operation, control or use of the Airport and its facil- ities in such a manner as to substantially restrict PRC from conducting its operation if such restrictions be continued for a period of six (6) months or more. ARTICLE X .- TERMINATION BY LESSOR A. In addition to all other remedies available to CITY, this Agreement shall be subject to cancellation by CITY should any one or more of the follow- 253625 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 PRC and its assets pursuant to proceedings brought under provisions of any Federal Reorganization Act, or, if a receiver for PRC's assets is appointed by a court of competent jurisdiction, or, if PRC 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 CITY, as provided hereinabove. 2. If PRC shall default in or fail to make any payments at the times and in the amounts as required of it under this contract. 3. If PRC 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. 4. If PRC 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. Notwithstanding the above, PRC may, after written notice to CITY, by appropriate proceedings conducted promptly at PRC' s expense, in PRC' s name, and/or wherever necessary in CITY's name, contest in good faith the validity or enforcement of any such law, ordinance, rule or regulation insofar as it relates to default under this lease, and PRC may defer compliance with the same during such contest, provided that PRC diligently prosecutes such contest to a final determination by the authority having jurisdiction thereof. B. Upon the happening of any of the contingencies recited in Paragraph "A", in Article X above, CITY shall give written notice to PRC to correct or cure such default, failure to perform, or breach, and if within ninety (90) 253625 thereof, this contract shall be deemed to be breached by PRC and thereupon, without entry or other action by CITY, 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 PRC of its rights under this contract shall be denied, set aside, vacated or terminated in PRC'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 PRC 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. C. CITY shall give written notice of such termination to said PRC if defaults have not been cured within said ninety (90) days, and the lease shall terminate at the expiration of ten (10) days from the date of said notice. The acceptance of rentals and fees by CITY for any period after a default of any of the terms, covenants , and conditions herein contained to be performed, kept and observed by PRC shall not be deemed a waiver of any rights on the part of CITY to cancel this lease for failure by PRC to so perform, keep or observe any of the terms, covenants or conditions hereof to be performed, kept and observed. No waiver by CITY of any of the terms of this Agreement to be kept, performed and observed by PRC shall be construed to be or act as a waiver by CITY of any subsequent default on the part of PRC. 253625 violation hereof shall be void. CITY will not be unnecessarily arbitrary in granting said permission, but CITY shall be the sole judge as to the reliabil- ity, capability, character and desirability of the parties involved until construction of all improvements is completed. Thereafter, CITY agrees that it will not unreasonably withhold its consent. In the event that the FAA, the City of Palm Springs and its Boards or Commissions or any other governmental agency fail to permit or license PRC the proposed construction at this location, or that, in PRC' s sole judgment, the requirements of these forementioned agencies so burden PRC's ability to conduct business at this location, PRC may terminate this lease without liability upon sixty (60) days ' written notice. This condition-of-approval clause shall apply only until the Building Permit for the facility is issued. Should PRC exercise the option to terminate, no liability shall accrue to CITY. ARTICLE XII - INDEMNITY PRC agrees to indemnify, defend and save the City and its agents and employees harmless from any and all liability, claims , damages or injuries to any person, including injury to PRC 's employees and all claims which arise from or are connected with the performance of or failure to perform the work or other obligations of this Agreement, or are caused or claim to be caused by the acts of PRC, its agents or employees , and all expenses of investigating and defending against same; provided, however, that this indemnification and hold harmless shall not include any claim arising from the sole negligence or willful misconduct of the City, its agents or employees. ARTICLE XIII - NOTICES AND CONSENTS AND APPROVALS A. Notices: A bill or statement, or any notice or communication which 253625 herein provided. Any notice from PRC to CITY shall be validly given if sent by registered or certified mail addressed to the City of Palm Springs, California, City Hall , Palm Springs, California, or at such other address as CITY shall hereafter designate by notice to PRC. All payments should be made payable to the City of Palm Springs , California. B. 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 PRC for such consent or approval , CITY shall have given PRC 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 XIV - RIGHT OF INSPECTION The Director of Aviation and/or his duly authorized 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 things with reference thereto which CITY is obligated or authorized to do as set forth herein or which may be deemed necessary for the proper general conduct and operation of the Palm Springs Regional Airport or in the exercise of CITY's police power. ARTICLE XV - HOLDING OVER In the event PRC 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 on the same terms which are in effect at the expiration of this Agreement 1 253625 B. PRC 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 PRC, sublessees or by those of its officers, employees, guests, invitees or of other persons on or at the premises with or without consent of PRC. C. PRC 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 condition 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 struc- tures 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 skylights, screens, roofs , foundations, steel work, columns; the exterior and interior and operat- ing 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. D. PRC shall make frequent periodic inspections and, as the necessity arises regardless of the causes therefore, shall perform all necessary pre- ventative maintenance, including, but not limited to, painting; make all necessary repairs and replacements; and do all necessary rebuilding with respect to the premises and all parts thereof (including any total destruc- tion) . All such maintenance, repairs, and replacement shall be of quality equal to the original in materials and workmanship. All exterior paint colors zs3szs ARTICLE XVIII - GENERAL PROVISIONS A. PRC 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 instru- ment. B. The term "CITY" as used in this agreement means the "City of Palm Springs" and where agreement speaks of approval and consent by CITY, such approval is understood to be manifested by an official act of the City of Palm Springs , unless otherwise expressly stated in this Agreement. ARTICLE XIX - NON-DISCRIMINATION & FAA REQUIRED CLAUSES A. PRC, 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. B. PRC 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 PRC 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. C. Non-compliance with these provisions shall constitute a material breach of this agreement. In the event of such non-compliance, CITY shall have LL • LL i i • L LI_ L 1 • L 'l 'L 1 LL 1 1 L LL /"L LL 253625 any person, firm or corporation to render accommodations and/or services to the public on the subject premises. E. CITY also reserves the right, but shall not be obligated to PRC, to maintain and keep in repair the landing area of the Airport, as well as public- ly-awned facilities of the Airport, together with the right to direct and control the activities of PRC in this regard. F. PRC hereby agrees to comply with the notification and review require- ments 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 modi- fication or alteration of any present or future building or structure situated on the leased premises. G. 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, vibration, fumes , fuel particles or other physical effects as are or shall become inherent in the operation of aircraft operating on the Airport. H. PRC, by accepting this Agreement, 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 or other vegetation on the land leased hereunder above the mean sea level elevation of five hundred (500) feet. In such an event, CITY reserves the right to enter upon the land leased hereunder and require PRC to remove the offending structure or object at the expense of PRC. I . PRC, 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 of aircraft from on or on 0 253625 Airport or the exclusive or non--exclusive use of the Airport by the United States during the time of war or national emergency. ARTICLE XX - RIGHT OF FIRST REFUSAL In the event CITY elects to allow the continuation of any business opera- tions on the premises demised beyond the expiration date of this Agreement or any extension periods , PRC shall have the right of first refusal upon sixty days' written notice from CITY to meet any offer received by CITY for such operations on the demised premises . One year prior to expiration of this lease or any extension thereof, CITY shall notify PRC of CITY's intentions concerning the continuation of the type of business operation specified herein on the demised premises. ARTICLE XXI - INVALID PROVISIONS In the event any covenant, condition, or provision herein contained is held to be invalid by any court of competent jurisdiction, the invalidity of any such covenant, condition or provision herein contained is hereby declared to be severable and the remainder of this Agreement shall remain in full force and effect provided that the validity of any such covenant, condition or provision does not materially prejudice either CITY or PRC in its respective rights and abrogations contained in the valid covenants, conditions or pro- visions of this lease. ARTICLE XXII LEASE CONSOLIDATION In the event that PRC holds leases on Parcels 1, 2, and 3 of Tract 14573, and the construction required under Article III.B. is completed as called for in that Article, the City agrees to combining the three leases into one (1) new "„ r • 253625 IN WITNESS WHEREOF, the parties have caused these presents to be executed on the day of 198,f ATTEST: CITY OF PALM SPRINGS, CALIFORNIA BY-- ,— City Clerk (-,—.City Manager `1 REVIEWED & APPROVED THE PEA 0 K-RADAKER CO ORATION P-R CORP/AGR5 By (/ President * State of California On this the 1 day of Lvov 1988 , before * County of Orange me, Marsha J. Lathrop * the undersigned Notary Public, personally * appeared Steven R. Peacock , * xx personally known to me * proved to me on the basis of satisfactory * evidence to be the person(s) who executed the * ithin instrument as President * OFFICIAL SEAL r on behalf of the corporation therein named * M AR'SHAJLArHaOP rid acknowledged to me that the corporation * a NOTARY PUBLIC - CALIFORNIA )(eCUteCI it. *, ORANGE COUNTY My Comm, expires JUN 24, 1991 ITNESS my hand and official seal . * Notary's Si Tate APPIIROVED BY THE CITY CoUt4CIL /r`U 253625 STATE OF CALIFORNIA) )ss . ICOUNTY OF RIVERSIDE)On / / ' 1988 , before me, the undersigned Notary Public in and for the said State, personally appeared ***DALLAS J. FLICEK*** , known to me to be the Assistant City Manager and ****JUDITH SUMICH*** , known to me to be the City Clerk of the CITY OF PALM SPRINGS , the Corporation that executed the within instrument , known to me to be the person who executed that within Instrument , on behalf of the Corporation herein named, and acknowledged to me that such Corporation executed the within Instrument pursuant to its by-laws, or a resolution , or ordinance. WITNESS My hand4and official seal : OFFICIAL SEA]. ELAINE L.SGHWAIJITZ } ?— am--- ,- NOTARYPU3uc-CALIFORNIA Notary Pub11cr, n and nd 20 � t�'sd RIVERSIDE COUNT said State + My C.,,m E.P,,05 Du,,25 1990 f 25362$ EXHIBIT "A" PARCEL 1: Lot 2 of Tract No. 14573 in the City of Palm Springs, County of Riverside, State of California, according to map recorded in Book 109, Pages 97 and 98 of Tract Maps in the office of the County Recorder of said county. (2.38 acres, more or less) . PARCEL 2: A nonexclusive easement for pedestrian ingress and egress, for vehicular ingress and egress, and for the right to use designated walkways, driveways and parking areas, as such improvements exist from time to time, in Lots 1 and 3 of Tract No. 14573, according to map recorded in Book 109, Pages 97 and 98 of Tract Maps in the office of the County Recorder of Riverside County, Califor- nia , such easement to extend to PRC, its successors and assigns, PRC' s subten- ants, their licensees and business invitees. THE LEASEHOLD INTEREST BEING CONVEYED HEREIN IS SUBJECT TO: A nonexclusive easement for pedestrian ingress and egress , for vehicular ingress and egress, and for the right to use designated walkways, driveways and parking areas , as such improvements exist from time to time, such easement running in favor of all persons with a real property and/or other leasehold interest in Lots 1 and 3 of Tract No. 14573, their licensees and business invitees. c�f�4'�'�a,Y s- of �)DCUS3lulli ivv{,E'?COidod When recorded mail to: on ^�1 ` °°�° (°•��{ ', Ilo. .�.�.(•, � h_rs not be cn C001 ::,red VJH1 oilginal. VVIL.LIAN,l E. COi,4 i LY JOHN APOSTLE AND HELEN APOSTLE County Recorder 835 Rancho Drive RIVERSIDE COU11TY, CALIFORMA Long Beach, California 90815 Peacock-Radaker - Assign Lse APOSTLE, John & Helen trustees Apostle Family Trust ASSIGNMENT OF LEASE AGREEMENT #2636 R18232, 11-17-93 IN CONSIDERATION of the assumption of the Lease (described below) by JOHN APOSTLE AND HELEN APOSTLE, TRUSTEES OF THE APOSTLE F'1MILY TRUST, DATED JULY 6, 1984, as stated below, and for other good and valuable consideration received, and which is hereby acknowledged, PEACOCK FINANCIAL CORPORATION, formerly known as THE PEACOCK-RADAKER CORPORATION, a California corporation ( "Assignor" ) , hereby assigns to JOHN APOSTLE AND HELEN APOSTLE, TRUSTEES OF THE APOSTLE FAMILY TRUST, DATED JULY 6 , 1984 , with an address of 835 Rancho Drive, Long Beach, California 90815 ( "Assignee" ) , all of its right, title, and interest as lessee under that certain Indenture of Lease Agreement No . 2636 ( "Lease" ) , recorded July 31, 1989, as Instrument No . 253625 of the Official Records of Riverside County, by and between the CITY OF PALM SPRINGS as Lessor and THE PEACOCK-RADAKER CORPORATION, as lessee . The Lease pertains to the premises generally described as Lot 2 of Tract 14573 located in the City of Palm Springs, Riverside County, California. Effective Date: October 21, 1993 . LESSEE: PEACOCK FINANCIAL CORPORATION, formerly known as THE PEACOCK- RADAKER CORPORATION, a California corporation Steven R. Peacock President 1 0, AS13UMPTION OF LEASE JOHN APOSTLE AND HELEN APOSTLE, TRUSTEES OF THE APOSTLE FAMILY TRUST, DATED JULY 6, 1984 , hereby accept the foregoing assign- ment, assume said Lease, and agree to perform each and all of the terms, conditions, and covenants required of the Lessee therein. Notice under the Lease should be sent to the undersigned at: JOHN APOSTLE AND HELEN APOSTLE TRUSTEES OF THE APOSTLE FAMILY TRUST, DATED JULY 6, 1984 835 Rancho Drive:, Long Beach, California 90815 Gl ?love» Effective Date: j — 9eteb � , 1993 J N APOSTLE HELEN APO LE Trustees of the Apostle Family Trust, Dated July 6, 1984 2 STATE OF CALIFORNIA ) SS. COUNTY OFF ) On 1993, before me, personally appeared STEVEN R. PEACOCK, personaN known to nie r proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. I IGRID D.AKCRS COMM.*975154 x Notary Public—Californla :n Signature „My Comm zpE C OC1112. I996 - Notary Seal STATE OF CALIFORNIA ;I ])SS. COUNTY OF ) On nor 3 1 , 1993, before me, '0 r\ 6- 0 o personally appeared JOHN APOSTLE AND HELEN APOSTLE, personally known to me (or proved to me on the basis of satisfactory eviden )to be the persons whose names are subscribed to the within instrumn ac know a ged to me that they executed the same in their authorized capacities, and that by their signature: on the instrument the person or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. Sign re atu Cj' Notary Sea OFFICIAL SEAL MARYANN V. LEINTZ NOTARY �UBIIGCALIFORNIA PRINCIPAL OFFICE IN LOS ANGELES COYNTY MY CwWrAw Expires Mnj 13, 1!W EXHIBIT "A" (PALM SPRINGS PROPERTY) LOT 2 OF TRACT NO. 14573, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 109, PAGES 97 AND 98 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. ti- 0 449223 RECORDING REQUESTED BY AND AT 8:0 RECEIVED FOR RECORI"0AM UCLOCK When Recorded Mail To: OCT 16 1998 V 4� 41 (`0 Recorded in Official Records 0 of Riverside County,California -cc N Record .3 "0 00 Fees F $ cui41'0- co C11 IAUA TAFWYIL-Iz�1�**"��N ,n to 5 C:) (Space Above Provided for Recorder) o ~ M < CO > W " ASSIGNMENT OF LEASE r �Qmf ��D CZ C) < The undersigned HELEN APOSTLE, as Successor Trustee of the APOSTLE FAMILY—� TRUST dated July 6, 1984, as amended, established by JOHN APOSTLE and HELEN APOSTLE as Trustors ("Assignor"), hereby transfers and assigns to HELEN APOSTLE, as Trustee of the SURVIVOR'S TRUST created under the APOSTLE FAMILY TRUST dated July 6, 1984, as amended ("Assignee"), without recourse, all right, title and interest of Assignor as lessee under that certain Indenture of Lease Agreement No. 2636 ("Lease"), dated May 1, 1988, and recorded July 31, 1989, as Instrument No. 253625 of the Official Records of Riverside County, by and between the City of Palm Springs as lessor and BA Properties, 1, Inc., as lessee (the "Original Lessee"). The interest of the Original Lessee was assigned by the Original Lessee to Peacock Financial Corporation, formerly known as The Peacock-Radaker Corporation, a California corporation ("Peacock Financial") by written assignment dated October 19, 1988 and the interest of Peacock Financial was subsequently assigned to Assignor by Assignment of Lease dated October 21, 1993 and recorded on December 27, 1993 as Instrument No. 514485 in Official Records of Riverside County, California. Assignor hereby further assigns to Assignee all buildings and other improvements on said premises, if any. The Lease pertains to the premises legally described in Exhibit "A" attached hereto and incorporated herein by this reference. Dated: 1996 kELEN APOPUE, Successor Trustee ESTA:8644 110911 A5329.00002 449223 ACCEPTANCE The undersigned, as Trustee of the SURVIVOR'S TRUST created under the APOSTLE FAMILY TRUST dated July 6, 1984, as amended, and the Assignee named in the foregoing assignment, hereby accepts said assignment and agrees to keep, perform and be bound by all of the terms, covenants, and conditions contained in said lease on the part of the lessee therein to be kept and performed, to all intents and purposes as though the undersigned Assignee were the Original Lessee thereunder and hereby assumes and agrees to pay and perform all obligations described in said Assignment. Dated: 1996 ELEN APO ME, Trustee of the SURVIVOR'S TRUST created under the APOSTLE FAMILY TRUST STATE OF CALIFORNIA ) ss. COUNTY OF LOS ANGELES ) On '9110 1996, before me, Ae6212 Notary Public, personally appeared HELEN APOSTLE, [ ] personally kn wn to me -OR- [ proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacities, and that by her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. Witness my hand and official seal. „vn.- . 1V.4RJCRIE A.PENNY CONIM.#1012812 Ndary Public—Californla �7 tOS ANGELES COUNTY �� C My Comm,Expires JAN 2.102 !, (Signature of Notary) ' Capacity claimed by signers: Successor Trustee of the APOSTLE FAMILY TRUST and Trustee of the SURVIVOR'S TRUST created under the APOSTLE FAMILY TRUST 7 E5TA:8644_110911 A5329.00002 2 • 449221 EXHIBIT "A" LEGAL DESCRIPTION " d6 tl A leasehold interest as Lessee in the following described property: Parcel 1: Lot 2 of Tract 14573 in the City of Palm Springs, County of Riverside, State of California, as per map recorded in Book 109, Pages 97 and 98 of Tract Maps in the Office of the County Recorder of said county. Parcel 2: A nonexclusive easement for pedestrian ingress and egress, for vehicular ingress and egress, and for the right to use designated walkways, driveways and parking areas, as such improvements exist from time to time, in Lots 1 and 3 of Tract No. 14573, as per map recorded in Book 109, Pages 97 and 98 of Tract Maps in the Office of the County Recorder Riverside County, California, such easement to extend to Lessee, its successors and assigns, Lessee's subtenants, their licensees and business invitees. Subject to: A nonexclusive easement for pedestrian ingress and egress, for vehicular ingress and egress, and for the right to use designated walkways, driveways and parking areas, as such improvements exist from time to time, such easement running in favor of all persons with a real property and/or other leasehold interest in Lots 1 and 3 of said Tract 14573, their licensees and business invitees. esrA:8644_110911 A5329.00002 3 CONSENT The undersigned, CITY OF PALM SPRINGS, lessor named in the Lease referred to in the foregoing Assignment, hereby consents to the same without, however, waiving the restrictions of said Lease with respect to future Assignments thereunder, and hereby releases said APOSTLE FAMILY TRUST, the lessee named in the Assignment of said Lease, from any and all further obligations thereunder, and hereby accepts said Assignee, HELEN APOSTLE, Trustee of the SURVIVOR'S TRUST created under the APOSTLE FAMILY TRUST dated July 6, 1984, as amended, as lessee under said Lease to all intents and purposes as though said Assignee were the Original Lessee thereunder. Dated: A-, �� 1998 CIT OF PALM SPRINGS By. ( ity- Manage By: City Clerk STATE OF CALIFORNIA ) ss. COUNTY OF RIVERSIDE ) On �U 1998, before me,G 4,n� Z. t-6Z>N D Notary Public, personally appeared oP CeI. M� <� !L 1'1r cv� personally known to me 43R7 4- pr-oued-to-me-on-the-basis-a satisfy or3� to be the person wbosenam(zMis/<cEsubscribedto the within instrument and acknowledged to me that he/she ER)executed the same in his/he 6ir authorized capacityffip, and that by his/her Breir ignaturoM on the instrument the persons), or the entity upon behalf of which the persoix(ss cted, executed the instrument. Witness my hand and official seal. 0 ::,*. FLlIINE L.V�IEL,ERINC! 9 d (Signature of Notary) a ��__ CO�iiM.;;`IUG.7S57 ,�, Notary Puaio—Caliiomia ti I\ RIVERSIDE CbUf STY Epp Co mr D��iree fFB 3 7949 " John & Helen Apostle Peacock-Radaker Corp. 3rd Amend to Lease Agr. AGREEMENT #2636 THIRD AMENDMEIKT TO LEASE AGREEMENT R18232, 11-17-93 THIS THIRD AMENDMEN97 TO LEASE AGREEMENT ("Amendment") is entered into this /5 day of December, 1993 by and between the CITY OF PALM SPRINGS, a municipal corporation ("Landlord") , and JOHN APOSTLE and HELEN APOSTLE, as trustees of The Apostle Family Trust, dated July 6, 1984 ("Tenant") . R E C I T A L S A. Landlord and The Peacock-Radaker Corporation, a California corporation ("Peacock") , entered into that certain Indenture of Lease Agreement No. 2636 dated November 3 , 1988 ("Original Lease") pursuant to which Landlord leased to Peacock certain real property more particularly described therein upon the terms and conditions set forth therein. B. Landlord and Peacock amended the Original Lease pursuant to that certain Amendment No. 1 to Indenture of Lease Agreement #2636 dated January 2 , 1991 ("First Amendment") pursuant to which Landlord agreed to defer and amortize certain rental increases upon terms and conditions more particularly set forth therein. C. Concurrently with the execution of this Amendment, Peacock has assigned its interest under the Original Lease as amended by the First Amendment to Tenant and Tenant has assumed Peacock's obligations thereunder. D. Prior to the execution of this Amendment, Landlord and Tenant entered into that. certain Second Amendment to Lease Agreement #2636 dated October i9J , 1993 ("Second Amendment") . E. Landlord and Tenant desire to amend the terms of the Original Lease as more particularly set forth herein. The Original Lease as amended by the First Amendment, the Second Amendment and this Amendment shall hereinafter be referred to as the "Lease" . F. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Original Lease and/or the First Amendment. NOW, THEREFORE, the parties hereto agree as follows: 1. Minimum Capitalization. Tenant agrees to maintain a net worth (in 1993 dollars) of not less than ONE HUNDRED TWENTY THOUSAND DOLLARS ($120, 000. 00) during the term of this Lease. On or before each anniversary of the Commencement Date, Tenant shall deliver to Landlord current: financial statement(s) prepared by a certified public accountant certified to have been prepared in PS2083\014084-0014\2076671.1 12/15/93 accordance with reasonable accounting procedures, consistently applied, which reflect the; financial condition of Tenant on the date of such financial statement, which financial statement(s) shall demonstrate that Tenant has the minimum net worth set forth above. 2 . Termination of Amendment. If Tenant assigns this Lease in compliance with all of the terms and conditions of this Lease, then the terms and conditions of this Amendment shall automatically terminate. 3 . Full Force and Effect. Except as set forth herein, the Original Lease, as modified by the First Amendment, shall remain unmodified and in full force and effect. IN WITNESS WHEREOF, this Second Amendment to Lease Agreement was executed as of the date first written above. ATTEST: CITY OF NGS, a mun cipal corpo on By: City Clerk City ag APPROVED AS TO FORM: RUTAN & TUCKER David X.j''Aleshire- City Attorney sue---_ JOHN APOSTL , as trustee of The Apostle Family Trust, dated July 6, 984 / CA/ LEN APOS , as trustee of The Apostle Family Trust, dated July 6, 1984 APPROVED BY THE CITY COUNCIL BY PIES. EEO. PS2\383\014084-0014\2076671.1 12/15/93 -2- John & Helen Apostle Peacock-Radaker Corp. 2nd Amend to Lease Agr. AGREEMENT #2636 R18232, 11-17-93 SECOND AMENDMENT TO LEASE AGREEMENT #2636 - - THIS SECOND AMENDMENT�TO LEASE AGREEMENT ( "Amendment" ) is entered into this ;s,6/day of ,N��m�S� 1993 by and between the CITY OF PALM SPRINGS, a municipal corporation ( "Landlord" ) , and JOHN APOSTLE AND HELEN APOSTLE„ trustees of the Apostle Family Trust, dated July 6, 1984 ( "Tenant" ) . R. E C I T A L S A. Landlord and The Peacock-Radaker Corporation, a California corporation ( "Peacock" ) , entered into that certain Indenture of Lease Agreement No. 2636 dated November 3 , 1988 ( "Original Lease" ) pursuant to which Landlord leased to Peacock certain real property more particularly described therein upon the terms and conditions set forth therein. B . Landlord and Peacock amended the Original Lease pursuant to that certain Amendment No . 1 to Indenture of Lease Agreement #2636 dated January 2 , 1991 ( "First Amendment" ) pursuant to which Landlord agreed to defer and amortize certain rental increases upon terms and conditions more particularly set forth therein. C. Concurrently with the execution of this Amendment, Peacock has assigned its interest under the Original Lease as amended by the First Amendment to Tenant and Tenant has assumed Peacock' s obligations thereunder pursuant to the terms of that certain dated Noveubar 1993 . D. Landlord and Tenant desire to amend the terms of the Original Lease as more particularly set forth herein. The Original Lease as amended by the First Amendment and this Amendment shall hereinafter be referred to as the "Lease" . E . Any capitalized terms not defined herein shall have the meanings ascribed to them in the Original Lease and/or the First Amendment . NOW, THEREFORE, the parties hereto agree as follows : 1 . First Amendment Deferred Rent . Landlord and Tenant hereby acknowledge that the deferred rent specified in Section 1 of the First Amendment is hereby forgiven. 2 . Delinquent Rent . The following shall be added as Section D of Article II of the Lease : "D. Landlord and Tenant hereby acknowledge that Peacock failed to pay monthly rent and late charges owing under the Lease for the months of June through October, 1993 in the total amount of Eight Thousand Three Hundred Thirty-Two Dollars ($8 , 332 . 00) ( "Delinquent Rent" ) . Tenant agrees to pay to Landlord, in addition to the rent owing under the Original Lease and the deferred rent referred to in Section 1 above, the Delinquent Rent . The Delinquent Rent shall be :repaid over the period commencing November 1, 1993 and ending October 1, 2003 , with interest+ at the rate of six percent (6%) per annum "B . Improvements_. Tenant intends to construct certain facilities and buildings on the demised premises . Tenant shall, without cost to Landlord, commence construction of improvements within the scope of the permitted uses on or before November 1, 2003 and shall thereafter diligently prosecute the construction to completion. It is understood and agreed that Tenant shall install all utilities 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 of Palm Springs prior to the commencement of construction. It is further agreed that Tenant shall submit to the Palm Springs Airport Commission a complete site, use and construction plan including architectural renderings sufficient to allow the Commission to determine the character and nature of the improvements to be constructed on the premises . " 4 . Default . The following shall be added as subsection 5 of Section A of Article X of the Lease : 115 . Tenant shall have committed a default under the terms of that certain Lease Agreement #2828 dated May 1, 1988 between Landlord and BA Properties I , Inc . ( "BA" ) , as amended from time to time, or under that certain Lease Agreement #2829 dated May 1, 1988 between Landlord and BA, as amended from time to time. " 5 . Effectiveness . The effectiveness of this Amendment is expressly conditioned upon obtaining the consent of TOPA Thrift and Loan to the terms of this Amendment and the Assignment of the Lease to Tenant . 6 . Full Force and Effect . Except as set forth herein, the Original Lease, as modified by the First Amendment , shall remain unmodified and in full force and effect . IN WITNESS WHEREOF, this Second Amendment to Lease Agreement was executed as of the date first written above . ATTEST: CITY OF PALM SPRINGS, a municipal corporation Cv t'y Clerk City Manager APPROVED AS TO FORM: RUTAN & TUCKER David J. eshire City Attorney CONSENT OF LENDER The undersigned, the ]holder of a leasehold deed of trust encumbering the premises referred to in the amendment to which this consent is attached, hereby consents to the terms and conditions of said lease amendment. TOPA THRIFT AND LOAN By: Robert W. G ayes Its: senior Vice President Peacock-Radaker - Amend #2 APOSTLE, John & Helen trustees Apostle Family Trust AGREEMENT #2636 R18232, 11-17-93 SECOND AMENDMENT TO LEASE AGREEMENT THIS SECOND AMENDMENT TO LEASE AGREEMENT ( "Amendment" ) is entered into this = day of Uqv r, 1993 by and between the CITY OF PALM SPRINGS, a municipalr`co�oration ( "Landlord" ) , and JOHN APOSTLE AND HELEN APOSTLE, trustees of the Apostle Family Trust, dated July 6 , 1984 ( "Tenant" ) . R E C I T A L S A. Landlord and The Peacock-Radaker Corporation, a California corporation ( " Peacock" ) , entered into that certain Indenture of Lease Agreement No. 2636 dated November 3 , 1988 ( "Original Lease" ) pursuant to which Landlord leased to Peacock certain real property more particularly described therein upon the terms and conditions set forth therein. B. Landlord and Peacock amended the Original. Lease pursuant to that certain Amendment No. 1 to Indenture of Lease Agreement #2636 dated January 2, 1991 ( "First Amendment" ) pursuant to which Landlord agreed to defer and amortize certain rental increases upon terms and conditions more particularly set forth therein. C. Concurrently with the execution of this Amendment, Peacock has assigned its interest under the Original Lease as amended by the First Amendment to Tenant and Tenant has assumed Peacock' s obligations thereunder pursuant to the terms of that certain dated NoveRbe-• -?.1 , 1993 . CC,--1 Ll D. Landlord and Tenant desire to amend the terms of the Original Lease as more particularly set forth herein. The Original Lease as amended by the First Amendment and this Amendment shall hereinafter be referred to as the "Lease" . E. Any capitalized terms not defined herein shall have the meanings ascribed to them in the Original Lease and/or the First Amendment . NOW, THEREFORE, the parties hereto agree as follows : 1 . First Amendment Deferred Rent . Landlord and Tenant hereby acknowledge that the deferred rent specified in Section 1 of the First Amendment is hereby forgiven. 2 . Delinquent Rent . The following shall be added as Section D of Article II of the Lease: "D. Landlord and Tenant hereby acknowledge that Peacock failed to pay monthly rent and late charges owing under the Lease for the months of June through October, 1993 in the total amount of Eight Thousand Three Hundred Thirty-Two Dollars ($8 , 332 . 00) ( "Delinquent Rent" ) . Tenant agrees to pay to Landlord, in addition to the rent owing under the Original Lease and the deferred rent referred to in Section 1 above, the Delinquent Rent . The Delinquent Rent shall be repaid over the period commencing November 1, 1993 and ending October 1, 2003 , with interest at the :rate of six percent (60) per annum "B . Improvements . Tenant intends to construct certain facilities and buildings on the demised premises . Tenant shall, without cost to Landlord, commence construction of improvements within the scope of the permitted uses on or before November 1, 2003 and shall thereafter diligently prosecute the construction to completion. It is understood and agreed that Tenant shall install all utilities 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 of Palm Springs prior to the commencement of construction. It is further agreed that Tenant shall submit to the Palm Springs Airport Commission a complete site, use and construct-ion plan including architectural renderings sufficient to allow the Commission to determine the character and nature of the improvements to be constructed on the premises . " 4 . Default . The following shall be added as subsection 5 of Section A of Article X of the Lease : 115 . Tenant shall have committed a default under the terms of that certain Lease Agreement #2828 dated May 1, 1988 between Landlord and BA Properties I , Inc . ( "BA" ) , as amended from time to time, or under that certain Lease Agreement ##2829 dated May 1, 1988 between Landlord and BA, as amended from time to time. " 5 . Effectiveness . The effectiveness of this Amendment is expressly conditioned upon obtaining the consent of TOPA Thrift and Loan to the terms of this Amendment and the Assignment of the Lease to Tenant . G . Full Force and Effect . Except as set forth herein, the Original Lease, as modified by the First Amendment, shall remain unmodified and in full force and effect . IN WITNESS WHEREOF, this Second Amendment to Lease Agreement was executed as of the date first written above . ATTEST: CITY OF PALM SPRINGS, a municipal corporation By:' By: City Clerk City Manager APPROVED AS TO FORM: RUTAN & TUCKER 7 - David J leshire City Attorney CONSENT OF LENDER The undersigned, the holder of a leasehold deed of trust encumbering the premises referred to in the amendment to which this consent is attached, hereby consents to the terms and conditions of said lease amendment. TOPA THRIFT AND LOAN By: Robert W. Craves Its: Senior Vice President °eacock-Radaker Corporation Amend #1 to Indenture of Lease AGREEMENT #2636 AMENDMENT NO. 1 MO 4699, 1-2-91 to INDENTURE OF LEASE AGREEMENT NO. 2636 WHEREAS the City of Palm Springs, California, hereinafter called "CITY" or "LESSOR", and The Peacock-Radaker Corporation, hereinafter called "PRC", entered into Indenture of Lease Agreement No. 2636, on November 3, 1988; and WHEREAS CITY and PRC mutually agree to amend said Agreement No. 2636 to defer rental increases between May 1, 1990 and October 31, 1993, NOW THEREFORE, in consideration of the premises, mutual covenants herein contained, and other good and valuable consideration, the parties hereto do mutually covenant and agree, as follows: Section 1. "Article II -- Rental and Other Payments, Section A. Leased Premises" is hereby modified by the addition of the following paragraph: "For the period May 1, 1990 through October 31, 1993, monthly rental in excess of $1,587 shall be deferred and accrue interest at ten percent (108) , per �annum. The deferred rental and accrued interest shall be paid too CITY in the form of a rental surcharge commencing on January 1, 1994. The combined total of deferred rental and accrued interest as of January 1, 1994 shall be paid to CITY amortized over a five-year (5-yr. ) period at ten percent (10%) interest. " Section 2. All other terms and conditions of Agreement #2636 are ratified and shall remain in full force and effect except as expressly amended herein. IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be executed on the 2nd day of January 1991. ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By (__-/ City Clerk Acting City Manager REVIEWED & APPROVED THE PEACOCK-RADAKER CORPORATION d N(—VED BY THE CITY COUNCr'IL By � B Y 1zes. NO. ,:y 5' c * State of on this the 9_ day of ])P('.emb Y 199�. before * * * County of Riyerside me, Marsha J. Lathrop * the undersigned Notary Public, personally * * * appeared James G. Gotses * X personally known to me * _ proved to me on the basis of satisfactory * evidence to be the person(s) who executed the !cck,-Radaker Corporation port Lease Agreement AGREEMENT #2636 I'104274, 11-2-E8 i:�i 1 e LSJ POP, 0 �!. U � U a k� Ix �� V vz ru c y! INDENTURE of LEASE AGREEMENT between THE CITY OF PALM SPRINGS and THE PEACOCK-RADAKER CORPORATION INDENTURE OF LEASE AGREEMENT TABLE OF ARTICLES NUMBER SUBJECT PAGE I Term 1 II Rental and Other Payments 1 III Use of Premises 5 IV Obligation of Lessee 7 V Public Facilities , Ingress, Egress & Quiet Enjoyment 7 VI Lessor's Reserved Rights 7 VII Insurance 8 VIII Encumbrance 12 IX Termination by Lessee 14 X Termination by Lessor 14 XI Assignments - Options to Terminate 16 XII Indemnity 17 XIII Notices and Consents and Approvals 17 HIV Right of Inspection 18 XV Holding Over 18 XVI Maintenance - Alterations 18 XVII Possessory Interest 19 XVIII General Provisions 20 XIX Non-Discrimination and FAA Required Clauses 20 XX Right of First Refusal 22 XXI Invalid Provisions 22 XXII Lease Consolidation 22 253625 INDENTURE OF LEASE AGREEMENT This INDENTURE OF LEASE, made and entered into by and between the CITY OF PALM SPRINGS, CALIFORNIA (hereiinafter called "CITY") , and THE PEACOCK-RADAKER CORPORATION, a corporation organized and existing under the laws of the State of California, having a place of business at 1313 West Civic Center Drive, Suite 4, Santa Ana, California 92703, (hereinafter called "PRC") : W I T N E S S E T H WHEREAS, CITY owns and operates an airport known as the Palm Springs Regional Airport, situated in the City of Palm Springs, County of Riverside, State of California (hereinafter called the "Airport") ; and WHEREAS, CITY is desirous of leasing certain premises hereinafter more fully described as Parcel 2, on Exhibit "A," attached hereto and made a part hereof for all purposes, forming a part of the Airport; and WHEREAS, PRC desires (except as prohibited in this Agreement) to engage in any or all legally permitted businesses and uses , 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, CITY does hereby demise, rent and let to PRC, and PRC does hire, take and lease from CITY, the parcel of land containing approximately 2.38 acres, as more particularly described and shown 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 The term of this Agreement shall be for a period of fifty (50) years from November. 1, 1988 through October 30, 2038, unless sooner terminated as provided for in Article X, herein. 2536;Z5 Eighty Dollars ($38,080) , and than sum is the base rent for purposes of rental adjustment as hereinafter provided. To facilitate improvement of said land, and as part of the consideration and inducement for PRC's entering into this lease, CITY agrees to accept and PRC agrees to pay to CITY rentals for the land, as described on attached Exhibit "A" and containing approximately 2.38 acres, as follows: all rentals shall be paid in monthly installments, in advance; for the six-month period commencing November 1, 1988 through April 30, , 1989, there shall be no rental payments; for the period commencing May 1, 1989, through April 30, 1990, the rental shall be One Thousand Five Hundred Eighty- Seven Dollars ($1,587) , per month; for the period commencing May 1, 1990 through April 30, 1991, the rental shall be Two Thousand Three Hundred Eight Dollars ($2,380) , per month; for the period commencing May 1, 1991 through October 30, 1993, the rental shall be Three Thousand One Hundred Seventy-Three Dollars ($3,173) , per month; for the remainder of this lease, an amount of money to be determined by revising the base rent as stated above in this paragraph to reflect the change, if any, in cost of living as shown in the Consumer Price Index (CPI ) . The rental shall be revised effective November 1, 1993, and every five (5) years thereafter, using the Consumer Price Index for the preceding July. The rent for each five-year period shall be the rent for the preceding five-year period plus a percentage of that rent which is equal to the percentage increase in the CPI for the same preceding five-year period. During any five-year period, the adjustment shall not exceed 25%. For the purpose of this computation it is agreed that the Consumer Price Index for the month of July, is the base or 100%. The Consumer Price Index (CPI) for July, 1988, was 122.1. The CPI Index to be used is that reflected by the Consumer Price Index, All Items, All Urban Consumers , Los Angel esAnaheim-Riverside Metropolitan Area, 1982-84 = 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 i � 253625 r rentals, fees and other charges not timely received by CITY and within fifteen (15) days after receipt by PRC of a notice of delinquency will bear a late charge equal to five percent (5%) of the payment due and owing. If such rentals , fees and other charges are not received within thirty (30) days, interest shall accrue on the unpaid balance plus the unpaid late charge at the rate of twelve percent (12%) per, annum or the highest rate which may be legally charged, whichever is lower, from the due date until paid in full . The rentals due, as set out hereinabove shall be payable on the first day of each and every month throughout the term of this Agreement. B. Percentage P,ental . Beginning the sixth (6th) year (November 1, 1993) , in addition to the minimum annual rental , PRC shall pay CITY, as additional rent for each "lease year", the amount by which 10% of the "gross income" for each such "lease year" exceeds the minimum annual rental , as adjusted. C. For the purpose of this Agreement, "gross income" for any lease year shall be an amount equal to the gross income determined in accordance with generally accepted accounting principles consistently applied, derived by PRC, acting as a sublessor, from the rental of the premises, including, but not limited to, receipts from the resale of gas, electric and cable television services in excess of PRC' s cost: of providing such services, except that in the event PRC (i ) takes over the day-to-day operation of any of the business operations carried on within the premises, or (ii ) occupies any other portion of the premises (such portion not being leased to a third party) the gross amount received by PRC by such operation or occupancy shall not be deemed a part of "gross income" as such term is defined herein, but, in this event, there shall be added to "gross income" an amount equal to the total fair rental value for the portion of the premises operated or occupied by PRC, as mutually agreed upon by the parties or as determined by an appraiser, such appraisal to be obtained at PRC's cost, during the period during any lease year in which PRC conducts such operations or occupies any part of the premises. In the event �, • zs3szs annual rent per square foot is $12.00, of which $3.00 per square foot repre- sents the operating expenses, real estate taxes and insurance which would be paid, either directly, or reimbursed to PRC, as sublessor, by a sublessee under a "net" lease, the income would) be $9.00 per square foot for the purpose of reporting gross income pursuant to this Article II , Paragraph C. The following items shall be excluded from "gross income" to the extent that they have been included therein: 1. Any income or receipts which under generally accepted accounting principles consistently applied are derived from any loan obtained by PRC as permitted by the provisions of these lease, and the sale or disposal of any capital assets; 2. Any income or receipts which under generally accepted accounting principles consistently applied are derived from any indebtedness; 3. Any income or receipts which under generally accepted accounting principles consistently applied are derived from the investment by PRC of any funds not invested in the premises or the operation of PRC' s business within the premises; 4. Increases of operating expenses over a base year paid by a sublessee Lo PRC, as sublessor; and 5. Any income or monies which under generally accepted accounting prin- ciples consistently applied are derived from the receipt of insurance proceeds. D. The minimum annual rental as provided for above shall be paid monthly, in advance, on the first day of each and every month during the term of this Agreement, in a sum equal to one-twelfth of the minimum annual rental . In addition to the minimum annual rental , PRC shall furnish to CITY by April 1st of each year a verified statement of its total gross income, as defined above, for the preceding lease year. Such statement of its gross income from rentals during the preceding lease year shall be accompanied by a payment of percentage rent, if any, as provided in paragraph B, above, calculated on the basis of the E. PRC shall keep accurate records of the revenue from its operations. Such records shall be made available to authorized representatives of CITY On request at all reasonable times. All supporting records , documents, books and accounts shall be kept and retained by PRC for a period of not less than three (3) years. Within ninety (90) days after the close of each lease year during the tern) of this Agreement, PRC shall have caused a revenue audit to be made by a certified public accountant, licensed in the State of California, of its annual gross income from the operations herein authorized and of the rental payments which it has made to CITY in relation thereto. For purposes of this Agreement, the required revenue audit shall consist of a letter by a certified public accountant stating the amount of the rent which has been collected by PRC from the subject premises. PRC shall have submitted to CITY by said accountant a copy of such audit. Should such audit disclose a discrepancy between the amount paid to CITY and the amount due as indicated by such audit, adjustment shall be made promptly between the parties of the sum theretofore paid. If CITY does not contest or otherwise challenge said audit report within one (1) year of its receipt by CITY, said audit report will be conclusively declared accurate and CITY will be estopped to later object to said report. ARTICLE III- USE OF PREMISES A. Lawful Purpose. On the leased premises, PRC shall have the right to and shall rent office spaces and/or other facilities of a similar nature and may provide other services incidental thereto. It is specifically understood by PRC that the rights and privileges granted herein are granted for purposes of operating an office complex. In order to maintain the character of the development as airport related, it is specifically understood and agreed to by CITY that PRC shall , to the extent possible, rent office space to those businesses, individuals, or corporations whose activities are related to and carried out or otherwise associated with +6n nn nv,o+i..nr -- ---... 4,4-1 4--- ..0 +6 n l O n l , • L medical offices , airline offices., and other operations so associated. However, nothing contained herein shall prevent PRC from doing business or renting office space as allowed herein to those individuals, businesses, or corpora- tions which are not specifically airport-related. B. Improvements. PRC intends to construct certain facilities and build- ings on the demised premises. PRC shall , without cost to CITY, commence construction of improvements within the scope of the permitted uses within forty-eight (48) months of the signing this lease. For each month that PRC fails to complete full improvement, as required hereinabove, monthly rental payments shall be increased in an amount equal to one percent (1%) of the then current annual rental . This increase shall remain in full force and effect until the contemplated improvements are completed. Completion shall be at Certificate of Occupancy. It is understood and agreed that PRC shall install all utilities as required by the standards of the City of Palm Springs. Further, it is understood and agreed that all construction plans and specifica- tions must be approved by the appropriate agencies of the City prior to the commencement of any construction. It is further agreed that PRC shall submit to the Palm Springs Airport Commission a complete site, use and construction plan including architectural renderings sufficient to allow the Airport Com- mission to determine the character and nature of the improvements to be con- structed on the premises. C. Drawings. Within thirsty (30) days following completion of any con- struction on demised premises, PRC shall give to CITY, for filing, a complete set of as-built drawings , including but not limited necessarily to all under- ground facilities. D. Title to Improvements. It is specifically agreed that, at the sole option of CITY, the improvements constructed on the leasehold shall become the property of CITY, free and clear from any and all encumbrances at the expira- tion or termination of this Agreement or any extension thereof. r �► �J36zs ARTICLE IV -• OBLIGATION OF LESSEE A. General Obligations. PRC, its 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 Regional Airport as they now exist or as they may hereafter be lawfully enacted or amended. Violations thereof by PRC, its agents, ser- vants or employees , or revocation of permits or licenses required in the performance of this Agreement, :shall be cause for termination of this Agreement at the option of the CITY if not corrected after ninety (90) days ' written notice is provided PRC. PRC shall procure and maintain, at its own expense, all licenses or permits necessary to legally conduct business in the City of Palm Springs. B. Repair and Maintenance of Premises. PRC 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. PRC 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. C. Utilities. PRC agrees to make its own arrangements for all utility services and to pay for such services on its leased premises. ARTICLE V PUBLIC FACILITIES, INGRESS, EGRESS AND QUIET ENJOYMENT CITY agrees that PRC, 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 PRC shall have the right to use, in common with others, the public facilities at the Airport and it shall have the right of ingress to and egress from its leased premises and the public facilities for its employees , visitors and customers. 2534;;�5 except those premises leased to PRC, and CITY reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent PRC from erecting, or permitting to be erected, any building or other structure on the Airport which, in the opinion of CITY, would limit the usefulness of the Airport or constitute a hazard to aircraft. B. Lease to United States: During the time of war or national emergency, CITY 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 PRC otherwise elects to terminate the lease, as provided in Paragraph "C" of Article IX. ARTICLE UII - INSURANCE A. Liability Insurance: (During the entire term of this agreement, PRC 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 CITY or PRC, or any person acting for the City, or PRC, 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 PRC, or any person acting for the City or PRC, or under its control or direction. Such public liability and property damage insurance shall also provide for and protect CITY against incurring any legal cost in defending claims for alleged loss. Such ,� � zs3szs 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 PRC agrees that the minimum limits hereinabove designated shall be changed accordingly upon request by the City Manager; provided, however., that the PRC 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 . PRC agrees that provisions of this paragraph as to maintenance of insur- ance shall not be construed as limiting in any way the extent to which PRC may be held responsible for the payment of damages to persons or property resulting from PRC' s activities, or the activities of any person or persons for which PRC is otherwise responsible. B. Worker' s Compensation Insurance: PRC shall procure and maintain, at its sole expense, Workers' 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 PRC and the City against any loss , claim, or damage arising from any injuries or occupational diseases happening to any worker employed by PRC in the course of carrying out the within agree- ment. C. Fire & Extended Coverage Insurance: PRC 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 PRC'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. PRC agrees to pay the premium for such insurance, and shall require that any insurance proceeds resulting from a loss under said policy are payable jointly to CITY and PRC and said proceeds shall constitute a trust fund to be reinvest- �, i zs3szs 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: 1. 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 PRC and CITY to pay for reconstruction, 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 PRC. Provided further, however, nothing herein shall prevent PRC, 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. 2. In 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. Said mortgagee or beneficiary shall hold the balance of said proceeds for CITY and PRC as their interest may appear. PRC agrees to increase the limits of liability when, in the opinion of the City Manager, the value of the improve- ments covered is increased, subject to the availability of such insurance at the increased limits; provided, however, that PRC 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 the City Council . D. Waste, Damage, or Destruction. PRC agrees to give notice to CITY of any fire or other damage that may occur on the leased premises within ten days 253625 rubbish in a manner satisfactory to 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, PRC 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 PRC 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 CITY and approved in writing in order to replace in kind and scope the operation which existed prior to such damage. PRC agrees that preliminary steps toward performing repairs, restoration, or replacement of the premises shall be commenced by PRC 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. E. Automotive Insurance. PRC 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 owned or non-owned automo- tive equipment, if any, with coverage limits of not less than One Million Dollars ($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. F. Evidence of Insurance. A certificate of insurance or an appropriate insurance binder evidencing the above insurance coverage with a company accept- able to the City's Risk Management Officer shall be submitted to CITY prior to execution of this Agreement on behalf of the City. G. 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- is canceled, PRC shall , prior to the cancellation date, submit to the City Clerk new evidence of insurance in the amount heretofore established. ARTICLE VIII - ENCUMBRANCE A. 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, 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. B. Any encumbrance must be confined to the leasehold interest of PRC or the subleasehold interest of a sublessee and shall not jeopardize in any way CITY's interest in the land. PRC agrees to furnish, as requested, any finan- cial statements or analyses pertinent to the encumbrance that CITY may deem necessary to justify the amount, purpose and terms of said encumbrance. C. In the event of default by PRC of the terms of an approved encum- brance, 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 CITY notice of the same character and duration as is required to be given to PRC by such encumbrancer and/or the laws of the State of California. Any notice of default shall comply with the provisions of Section 2924(c) of the Civil Code of the State of California. D. 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 t[in rn4n Tf n Cola ...Ar , +6- -....... -A ....... ........... A i� i �53625 E. 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, CITY 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. F. "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 ex- penses , 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 CITY, which consent may not be un- reasonably 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 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. G. CITY agrees that it will not terminate this lease because of any default or breach hereunder on the part of PRC if the encumbrancer under the trust deed, within ninety (90) days after service of written notice on the encumbrancer by CITY of its intention to terminate this lease for such default or breach, shall : 1. 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; provid- ed, however, that for the purpose of tale foregoing, the encumbrancer shall not be required to pay money to cure the bankruptcy or insolvency of PRC; or 2. If such default or breach is not so curable, cause the trustee under 253625 accept from PRC an assignment in lieu of foreclosure, and keep and perform all of the covenants and conditions of this lease requiring the payment or expendi- ture of money by PRC 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 foreclo- sure. ARTICLE IX - TERMINATION BY LESSEE In addition to all other remedies available to PRC, this Agreement shall be subject to cancellation by PRC should any one or more of the following events occur: A. The issuance by any court of competent jurisdiction of a permanent injunction in any way preventing the use of the leased premises for any purpose hereinbefore enumerated. B. The breach by CITY of any of the terms , covenants or conditions of this Agreement to be kept, performed and observed by CITY, and the failure of CITY to remedy, or to commence action to remedy such breach for a period of thirty (30) days after written notice from PRC of the existence of such breach. C. The assumption by the United States Government, or any authorized agency of same, of the operation, control or use of the Airport and its facil- ities in such a manner as to substantially restrict PRC from conducting its operation if such restrictions be continued for a period of six (6) months or more. ARTICLE X - TERMINATION BY LESSOR A. In addition to all other remedies available to CITY, this Agreement shall be subject to cancellation by CITY should any one or more of the follow- ing events exist: 1. PRC expressly stipulates and agrees that PRC fully understands the provisions of HR 8200 [the new Title II of the U. S. Code "Bankruptcy", effec- 0 ti53625 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 PRC and its assets pursuant to proceedings brought under provisions of any Federal Reorganization Act, or, if a receiver for PRC's assets is appointed by a court of competent jurisdiction, or, if PRC 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 CITY, as provided hereinabove. 2. If PRC shall default in or fail to make any payments at the times and in the amounts as required of it under this contract. 3. If PRC 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. 4. If PRC 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. Notwithstanding the above, PRC may, after written notice to CITY, by appropriate proceedings conducted promptly at PRC' s expense, in PRC's name, and/or wherever necessary in CITY's name, contest in good faith the validity or enforcement of any such law, ordinance, rule or regulation insofar as it relates to default under this lease, and PRC may defer compliance with the same during such contest, provided that PRC diligently prosecutes such contest to a final determination by the authority having jurisdiction thereof. B. Upon the happening of any of the contingencies recited in Paragraph "A", in Article X above, CITY shall give written notice to PRC 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 CITY, then and in such event CITY shall have the right, at once and without ,� z�3szs thereof, this contract shall be deemed to be breached by PRC and thereupon, without entry or other action by CITY, 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 PRC of its rights under this contract shall be denied, set aside, vacated or terminated in PRC'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 PRC 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. C. CITY shall give written notice of such termination to said PRC if defaults have not been cured within said ninety (90) days, and the lease shall terminate at the expiration of ten (10) days from the date of said notice. The acceptance of rentals and fees by CITY for any period after a default of any of the terms, covenants, and conditions herein contained to be performed, kept and observed by PRC shall not be deemed a waiver of any rights on the part of CITY to cancel this lease for failure by PRC to so perform, keep or observe any of the terms, covenants or conditions hereof to be performed, kept and observed. No waiver by CITY of any of the terms of this Agreement to be kept, performed and observed by PRC shall be construed to be or act as a waiver by CITY of any subsequent default on the part of PRC. ARTICLE XI - ASSIGNMENT/OPTIONS TO TERMINATE The privileges contained herein are personal . PRC agrees that it will nn+ Accinn +ho c� —, ...,,.+: - iL r 253625 violation hereof shall be void. CITY will not be unnecessarily arbitrary in granting said permission, but CITY shall be the sole judge as to the reliabil- ity, capability, character and desirability of the parties involved until construction of all improvements is completed. Thereafter, CITY agrees that it will not unreasonably withhold its consent. In the event that the FAA, the City of Palm Springs and its Boards or Commissions or any other governmental agency fail to permit or license PRC the proposed construction at this location, or that, in PRC' s sole judgment, the requirements of these forementioned agencies so burden PRC's ability to conduct business at this location, PRC may terminate this lease without liability upon sixty (60) days ' written notice. This condition-of-approval clause shall apply only until the Building Permit for the facility is issued. Should PRC exercise the option to terminate, no liability shall accrue to CITY. ARTICLE XII - INDEMNITY PRC agrees to indemnify, defend and save the City and its agents and employees harmless from any and all liability, claims , damages or injuries to any person, including injury to PRC's employees and all claims which arise from or are connected with the performance of or failure to perform the work or other obligations of this Agreement, or are caused or claim to be caused by the acts of PRC, its agents or employees, and all expenses of investigating and defending against same; provided, however, that this indemnification and hold harmless shall not include any claim arising from the sole negligence or willful misconduct of the City, its agents or employees. ARTICLE XIII - NOTICES AND CONSENTS AND APPROVALS A. Notices: A bill or statement, or any notice or communication which CITY may desire to give PRC shall be deemed sufficiently rendered or given if the same be in writing and sent by registered or certified mail , addressed to PRC at the address specified on the first page hereof or at the address PRC may herein provided. Any notice from PRC to CITY shall be validly given if sent by registered or certified mail addressed to the City of Palm Springs, California, City Hall , Palm Springs, California, or at such other• address as CITY shall hereafter designate by notice to PRC. All payments should be made payable to the City of Palm Springs, California. B. 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 PRC for such consent or approval , CITY shall have given PRC 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 XIV - RIGHT OF INSPECTION The Director of Aviation and/or his duly authorized 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 things with reference thereto which CITY is obligated or authorized to do as set forth herein or which may be deemed necessary for the proper general conduct and operation of the Palm Springs Regional Airport or in the exercise of CITY's police power. ARTICLE XV - HOLDING OVER In the event PRC 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 on the same terms which are in effect at the expiration of this Agreement which may be terminated at any time by CITY. ARTICLE XVI - MAINTENANCE - ALTERATIONS A. PRC shall at all times keen the nremicec and all fixturnc anuinmPnt 253625 B. PRC 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 PRC, sublessees or by those of its officers, employees, guests, invitees or of other persons on or at the premises with or without consent of PRC. C. PRC 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 condition 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 struc- tures 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 skylights, screens, roofs , foundations, steel work, columns; the exterior and interior and operat- ing 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. D. PRC shall make frequent periodic inspections and, as the necessity arises regardless of the causes therefore, shall perform all necessary pre- ventative maintenance, including, but not limited to, painting; make all necessary repairs and replacements; and do all necessary rebuilding with respect to the premises and all parts thereof (including any total destruc- tion) . All such maintenance, repairs, and replacement shall be of quality equal to the original in materials and workmanship. All exterior paint colors shall be subject to the prior approval of CITY. ARTICLE XVII - POSSESSORY INTEREST vDr arLnroel o.in nn +hn+ +k,*, A-............+ .., +_ ---....___ . a. e r � zs�szs ARTICLE XVIII - GENERAL PROVISIONS A. PRC 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 instru- ment. B. The term "CITY" as used in this agreement means the "City of Palm Springs" and where agreement speaks of approval and consent by CITY, such approval is understood to be manifested by an official act of the City of Palm Springs, unless otherwise expressly stated in this Agreement. ARTICLE XIX - NON-DISCRIMINATION & FAA REQUIRED CLAUSES A. PRC, 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. B. PRC 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 PRC 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. C. Non-compliance with these provisions shall constitute a material breach of this agreement. In the event of such non-compliance, 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. n nn r I IL L L. � • J '- . • 1 .. .. .. ..... 1. ,. ....,1,,.. .. 253625 any person, firm or corporation to render accommodations and/or services to the public on the subject premises. E. CITY also reserves the right, but shall not be obligated to PRC, to maintain and keep in repair the landing area of the Airport, as well as public- ly-owned facilities of the Airport, together with the right to direct and control the activities of PRC in this regard. F. PRC hereby agrees to comply with the notification and review require- ments 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 modi- fication or alteration of any present or future building or structure situated on the leased premises. G. 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, vibration, fumes , fuel particles or other physical effects as are or shall become inherent in the operation of aircraft operating on the Airport.. H. PRC, by accepting this Agreement, 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 or other vegetation on the land leased hereunder above the mean sea level elevation of five hundred (500) feet. In such an event, CITY reserves the right to enter upon the land leased hereunder and require PRC to remove the offending structure or object at the expense of PRC. I . PRC, 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 of aircraft from on or on the Palm Springs Regional 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 PRC. . 253625 Airport or the exclusive or non-exclusive use of the Airport by the United States during. the time of war or national emergency. ARTICLE XX -- RIGHT OF FIRST REFUSAL In the event CITY elects to allow the continuation of any business opera- tions on the premises demised beyond the expiration date of this Agreement or any extension periods, PRC shall have the right of first refusal upon sixty days' written notice from CITY to meet any offer received by CITY for such operations on the demised premises. One year prior to expiration of this lease or any extension thereof, CITY shall notify PRC of CITY' s intentions concerning the continuation of the type of business operation specified herein on the demised premises. ARTICLE XXI - INVALID PROVISIONS In the event any covenant, condition, or provision herein contained is held to be invalid by any court of competent jurisdiction, the invalidity of any such covenant, condition or provision herein contained is hereby declared to be severable and the remainder of this Agreement shall remain in full force and effect provided that the validity of any such covenant, condition or provision does not materially prejudice either CITY or PRC in its respective rights and abrogations contained in the valid covenants, conditions or pro- visions of this lease. ARTICLE XXII LEASE CONSOLIDATION In the event that PRC holds leases on Parcels 1, 2, and 3 of Tract 14573, and the construction required under Article III.6. is completed as called for in that Article, the City agrees to combining the three leases into one (1) new fifty (50) year lease. Under no circumstances shall the merged lease term extend beyond October 30, 2043. All other terms and conditions of the three (3) leases shall be combined into the new lease without change. EXHIBIT "A" PARCEL 1: Lot 2 of Tract No. 14573 in the City of Palm Springs, County of Riverside, State of California, according to map recorded in Book 1.09, Pages 97 and 98 of Tract Maps in the office of the County Recorder of said county. (2.38 acres, more or less) . PARCEL 2: A nonexclusive easement for pedestrian ingress and egress, for vehicular ingress and egress, and for the right to use designated walkways, driveways and parking areas, as such improvements exist from time to time, in Lots 1 and 3 of Tract No. 14573, according to map recorded in Book 109, Pages 97 and 98 of Tract Maps in the office of the County Recorder of Riverside County, Califor- nia , such easement to extend to PRC, its successors and assigns, PRC's subten- ants, their licensees and business invitees. THE LEASEHOLD INTEREST BEING CONVEYED HEREIN IS SUBJECT TO: A nonexclusive easement for pedestrian ingress and egress , for vehicular ingress and egress, and for the right to use designated walkways, driveways and parking areas , as such improvements exist from time to time, such easement running in favor of all persons with a real property and/or other leasehold interest in Lots .1 and 3 of Tract No. 14573, their licensees and business invitees. CERTIFIC,.I,E OF INSURANCE IBBDEDATE (MM/DD/YY) 10 22 92 PRODUCER TIIIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. MILLWARD INSURANCE 23276 S POINTE #213 COMPANIES AFFORDING COVERAGE LAGUNA HILLS CA 92653 COMPANY LETTER A PRUDENTIAL COMPANY B INSURED LETTER COMPANY C PEACOCK-RADAKER CORP A 1655 E 6TH ST#A4A LETTER Y D COMPAN CORONA CA 91719 LEIT RNY E V COVERAGES. 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 CEP.:IC.:7T b::.Y BE IuSU,^.D CR;;nY '.:..^.T:u.: THE IirSUa^v:i:CE r`.rcO::CED BY -HE POLICIES DESCRIBED HEREitd IS SUBJECT TO ALi.THE TEAS, EXCLUSIONS AND CONDITIONS OF rSUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO TYPE OF INSURANCE POLICYEFFECTIVE POLICY EXPIRATION LTR POLICY NUMBER DATE(MMMD/YY) DATE(MM/DD/YY) LIMITS GENERAL LIABILITY CB7071440A 11/04/92 11/04/93 GENERAL AGGREGATE $11 OOO. / OOO X COMMERCW.GENERALLABILITY PRODUCTS-COMP/OP AGG. $11 OOO/ OOO CLAIMS MADE �{ OCCUR. PERSONAL&ADV.INJURY $1 10 0 0 I 000 OWNER'S&CONTRACTOR'S PROT. EACH OCCURRENCE $11 000, 000 FIRE DAMAGE(An'me Bm) $SOI OOO MEMEXPENSE(An, mPen.) $5 000 AVI'OMOBILE LIABILITY ANY AUTO COMBINED SINGLE $ LIMIT ALL OWNED AUTOS SCHEMULED AUTOS BODILY INJURY $ . ... (Per perc.) AIRED AUTOS NON-OWNED AUTOS BODILY INJURY S (Pcr ncridem) GARAGE LIABILITY PROPERTY DAMAGE $ .EXCESS LIABILITY EACH OCCURRENCE $ UMBRELLA FORM AGGREGATE $ OTHER THAN UMBRELLA FORM - WORKER'S COMPENSATION STATUTORY LIMITS AND -_-_ _ - -- - — -'GACH hCC'IUENI"-- - $ EMPLOYERS'LIABILITY DISEASE--POLICY LIMIT $ .DISEASE-EACH EMPLOYEE $ OTHER DESCRIPTION OF OPERATIONS/LOCATIONS/VEMCLES/SPECIAL ITEMS CERT HOLDER NAMED AS ADDITIONAL INSURED FOR PROPERTY AT: 255-275 N EL CIELO ROAD PALM SPRINGS CA BUILDINGS "S:PECIAL" $3200000 $1000 DED. LOSS OF RENTS 100% AT $958000 CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO THE CITY OF PALM SPRINGS CALIF MAIL 10 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE A MUNICIPAL CORP LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR P 0 BOX 1786 LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. PALM SPRINGS CA 92263 AUTHORIZED REPRESENTATIVE SHARON GRAML S ACORD 25-S(7190) ., C ACORD CORPORATION 1990 c7_06 CERTIFICA OF LIABILITY INSUR CFbPID LR DATE IMMrDD/YY) PACIF-8 10/15/99 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION Everest Insurance Services Inc ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE P. 0. Box 10788 HOLDER.THIS CERTIFICATE DOES NOT AMEND,EXTEND OR 1651 E Fourth St. , Suite 150 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. Santa Ana CA 92701 Phone: 714-569-0800 Fax:714-569-080 INSURERS AF NG-6 I INSURED 0 V2 INSURER A: Fire n'S Fund Insurance Pacific West As F- wsuRER B: C i£ornia Compensation Management Corporation U O'T 1999 fA INSURER C. P.O. BOX 19068 RECEIVE INSURER D' Irvine CA 92623 INSURER E' COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED OVE FOR THE POLICY PERIOD INDICATED.NOTWITHITANVING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH SPECT TO WHICH THIS CERTIFIC D OR MAY PERTAIN,THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT T THE TERMS"EXLY.tt ND CONDITIONS OF SUCH POLICIES,AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. •----- LTR TYPE OF INSURANCE POLICY NUMBER DATE MM/DD DATE MM/DDATION LIMITS GENERAL LIABILITY EACH OCCURRENCE $ 1000000 A X COMMERCIAL GENERAL LIABILITY DXX807458651 10/15/99 10/15/00 FIRE DAMAGE(Any one fire) S 50000 CLAIMS MADE OCCUR MED EXP(Any one person) $ 5000 PERSONAL R ADV INJURY $ 1000000 GENERAL AGGREGATE $ 2000000 GEN'L AGGREGATE LIMIT APPLIES PER PRODUCTS-COMP/OP AGO $ 1000000 POLICY PRO. LOC ECT AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT S SOOOOOO A ANY AUTO DXX807458651 10/15/99 10/15/00 (Ea accident) ALL OWNED AUTOS BODILY INJURY $ SCHEDULED AUTOS (Per person) X HIRED AUTOS BODILY INJURY S X NON-OWNED AUTOS (Per accident) PROPERTY DAMAGE S (Per accident) GARAGE LIABILITY AUTO ONLY-EA ACCIDENT S ANY AUTO EA ACC $ OTHER THAN AUTO ONLY: AGG 5 EXCESS LIABILITY EACH OCCURRENCE S 4000000 A OCCUR CLAIMSMADE XYZ96200449 10/15/99 10/15/00 AGGREGATE $ 4000000 5 DEDUCTIBLE $ RETENTION $ $ WORKERS COMPENSATION AND X TORY LIMITS ER B EMPLOYERS LIABILITYW991114471 01/O1/99 01/01/00 ELEACH ACCIDENT $ 1000000 EL DISEASE-EA EMPLOYE 5 1000000 EL DISEASE-POLICY LIMIT $ 1000000 OTHER A EMPLOYEE DISHONEST DXX807458651 10/15/99 10/15/00 EMP DISH $500,000 DED $10,000 DESCRIPTION OF OPERATIONOLOCATIONSNEHICLES/EXCLUSIONS ADDED BY EN,,DDiBRSEM@NTISPECIAL PROVISIONS -LOCATION: AS RESPECTS PROPERTY MANAGED A,3 265, 275 NORTH EL CIELO RD. , PALM SPRINGS, CA, ADDITIONAL INSURED-DESIGNATED AN,SZATION ENDORSEMENT ATTACHED.OWNER/INSURED: APOSTLE FAMILY TRUST SURVIVORS, 10 D_A_Y_ff0Tr=Z-Cl''P—_ CANCELLATION FOR NON PAYMENT'OF-PREMIUM. CERTIFICATE HOLDER Y I ADDITIONAL INSURED;INSURER LETTER A CANCELLATION PALMSSP SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF,THE ISSUING INSURER WILL ENDEAVOR TO MAIL CITY OF PALM SPRINGS 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE CITY CLERK — 3200 TAHQUITZ CANYON WAY LEFT,BUT FAILURE TO 00 SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF PALM SPRINGS CA 92262 ANY KIND UPON THE INSURER,ITS AGENTS OR REPRES TIVES. George Poulos Qkz .A_-- ACORD 25-S(7197) U I " ACORD CORPORATION 1988