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HomeMy WebLinkAbout1993-10-25 93-497 ORDERCOUNCIL ACTION 9}691 ITem No. Data 10-25-93 Item/Subjectz Authorizing the City Manager to Execute Certain Documents Concerning Telford Aviation, Inc. and Jet Source International, Inc. esponsible Department: Legal Commentary: As the Council is aware, Telford Aviation, Inc. Is conducting aircraft repair operations at RIA. They are replacing and subsuming the operations of Aerofusion. By Council Order 93-452 a First Amendment to the Telford lease was authorized which expanded the authorized activities of Telford under their lease with the City. The Airport Committee has met a number of times to discuss aircraft maintenance and repair issues Bud specifically the transfer of operations from Aerofusion to Telford and Jet Source International (JSI). SSI is a separate corporation from Telford, (cont'd on next page) Budget Approval: �" Finance Director Legal Approval: �SSIsfG� �ir•i far- (aa ShibtrS qnc( WII� umrkin5 04 !a1" /aS�ijiejMhb' um4ed fi Sswer ftR , ery A Ci%y CoJmr!city S 11 WW qNSIen3on Introduced For X Passage First Reading Referral Page I of 16 Department E Nana�garR's�C}o:mnent�s: � City Manager Associated Information: Assign Ment 6 Assumption of Lease, Escrow Agreement, First Amendment to Indenture of Lease (Telford - previously approved C.O. 93-452) Budget Approval: �" Finance Director Legal Approval: �SSIsfG� �ir•i far- (aa ShibtrS qnc( WII� umrkin5 04 !a1" /aS�ijiejMhb' um4ed fi Sswer ftR , ery A Ci%y CoJmr!city S 11 WW qNSIen3on Introduced For X Passage First Reading Referral Page I of 16 _2_ but they have the came corporate president, Telford Allen. JSI, in the process of acquiring Aercfueion, has requested assistance from the Small Business Administration (SBA) and Gardiner Savings Institution. As part of the $180,000 financing package, SSA has required certain conditions in exchange for its guarantee of the loan. JSI and Aerofusion closed in escrow on 10/15/93 and have 30 days to get certain City of Bangor approvals. The Airport Committee has been briefed on these new developments. They are in agreement that the City should execute the documents necessary to facilitate the operation of Telford and JSI at BIA so long as the City's interests are not adversely impacted. The continuation of a viable general aviation repair station, air charter/taxi and other Telford/JSI operations are beneficial to the City and BIA. The documents to be executed will accomplish the fallowing purposes, none of which adversely impact the City: 1) Acknowledge that a 2 -story prefabricated building located in Building 800 is the personal property of JSI. 2) Consent to Conditional Assignment of lease executed separately by Telford and JSI with the Gardiner Savings Institution. Said assignment shall only take place if Telford or JSI default on their obligations to Gardiner Savings Institution. 3) Consent to the Assignment of Aerofusion's lease (Laurence A. Maul) to JSI. 4) Amend the JSI lease (formerly Aerofusion lease) to grant a second renewal option from 4/30/96 through 10/31/2000, subject to appropriate rental to be negotiated at the time option is exercised (Maul had previously exercised Aerofusion's first renewal option); authorising the lender (Gardiner Savings Institution) to have 90 days after notice of default of lease to enter premises to take possession of personal property which lender has a lien or security interest in that is not c red by Bangor's first priority security interest in Telford personal property; and updating of indemnification (general, workers compensation, hazardous materials) language consistent with language contained in Council Order 93-452. 5) Amend the Telford lease to extend the option period, if requested by Telford under the lease, to October 31, 2000 (rental rate negotiable under current lease at time option exercised); and the same provision regarding Gardiner Savings -3 - institution's right ofentry. This will be the Second Amendment to the Telford lease and the First Amendment already covered the indemnification issues. 6) State the unmortgaged status of Hangar 115 and Building 600 to satisfaction of lender and SBA. SBA required a ] year interest in the property by the borrower (SSI, as well as Telford Allen persanally), hence the option period extension, as well as the right of entry by the lender and conditional assignment to the lender. Bangor is further protecting itself by adding more expansive indemnification language to the JSI lease through this amendment, especially with regard to hazardous materials, as well as reserving the right to negotiate a new lease payment at that time (thecurrent JSI lease hoe a fixed monthly rate during the entire time of the option period). Bangor has a firstpriority security interest in new inventory, spare used parts and repair tools which it has previously sold to Telford. That interest is not harmed by this current SBA guaranteed financing transaction. Time is of the essence for Telford and JSI. Your approval is recommended. C. ia5see's Indemnification with Respect to Hazardous Materials - Without limiting the Lessee's General Indemnification provided in paragraph A above, Lessee hereby represents and warrants that, as to Lessee Hazardous Materials, as defined in this paragraph, Lessee shall: 1. Mediately forward to Lessor copies of any and all notices, correspondence, warnings, guidelines, or other written materials hereafter received from, or given to, any governmental authority in connection with Lessee Hazardous Materials and their relationship to the demised premises; 2. Conduct and complete at its own expense., all investigations, studies, sampling and testing, and all remedial, removal, and other actions necessary to clean up and r all Lessee Hazardous Materials in, under, upon, from, or affecting the demised premises, to the extent required by and in accordance with all applicable federal, state, and local laws, regulations, rules, ordinances, and policies, and in accordance with orders and directives of any federal, state, or local gbverime,ntal authority; except that if a dispute exists in good faith concerning whether Lessee Hazardous Materials are involved, the Lessor shall perform these functions under subparagraph A(2) above, subject to a determination under paragraph E below. 3. Defend, indemnify, and hold harmless Lessor, its employees, agents, officers and directors, from and against any and all claims, demands, penalties, fines, liabili- ties, settlements, damages, Costs, o expenses (including without limitation, attorney, engineering, and consultant fees, investigation, testing and laboratory fees, court costs, and litigation expenses) of whatever kind or nature, known or unknown, contingent or otherwise, arising out of or in any way related to; a. the discovery, presence, disposal, release, or threatened release of Lessee Hazardous Materials within, under, upon, from or into the demised premises; _ -4- 93-497 b. any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to Lessee Hazardous Materials, which i concern the demised premises; c. any legal action brought or threatened before any court or agency, settlement reached, or government order relating to Lessee Hazardous - Materials which concern the demised premises; and/or d. any violation of laws, orders, regulations, requirements, or demands of government authorities now in effect or in effect at any time in the future, which are based upon or in any way related to Lessee Hazardous Materials which concern the demised premises. For this purpose, the term "Lesson Hazardous Materials" shall mean flammable explosives, radioactive materials, hazardous materials, hazardous waste, hazardous Or toxic substances or matter, oil or other petroleum products, asbestos, chemical pollutants or materials in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, a amended (42 U.S.C. Sec. 9601 at sem.), the Hazardous Materials Transpoxtation Act, as amended (49 U.S.C. Sec. 881 at sea.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sec. 691 gt sec.), applicable Maine statutes or any similar federal, state or local law, or in the regulations adopted and publications promulgated pursuant thereto, o any other substances or materials constituting a / hazard, peril or threat to the health of persona, animals, or plant life and used, placed, stored or disposed of upon the demised premises by Lessee, its contractors, customers, licensees, agents, servants or employees; but the term 'Lessee Hazardous Materials" shall not include any such materials used, placed, stored or disposed of upon the.demized premises by the Lessor, its agents, servants or employees, or by a third party other than contractors, customers or licensees of the Lessee. D. Joint Liability Retained. In the event Leasee shall operate its General Aviation aircraft repair facility through a subsidiary corporation as permitted in Article IV(A) above, -5- Lessee shall require such subsidiary corporation to execute a document agreeing to indemnify and hold and save the City of Bangor harmless in all respects required of the Lessee under this Article VII. In such event it is understood and agreed that Lessee shall remain jointly and severally liable with its subsidiary corporation to the Lessor under all circumstances as provided 1n this Article VII, and Lessor's consent in Article N(A) above or otherwise to Lessee's operation of its General Aviation aircraft repair facility through a subsidiary corporation shall in no manner be deemed to relieve Leasee of its liability to the Lessor under this Lease for the negligent or intentional acts of such subsidiary corporation, or of such corporation's, officers, agents or employees. In all other respects, the parties' Indenture of Lease and each and every portion thereof shall remain in full force and effect. IN WITNESS WHEREOF, the parties have executed this First Amendment to 'Indenture of Lease on the day and year first above written. CITY OF BANGOR (By) Witness (Title) City Manager Printed Name: Edward A. Barrett TELFORD AVIATION, INC. (By) Witness (Title) Printed Name: -6- Assigned to Councilor Shubert October 25, 1993 CITY OF BANGOR (TITLE.) (Orbtr,—.._.Authorizing- the -city -manager..to.-Execute..Certain.. _. Documents Concerning Telford Aviation, Inc. and Jet Source International, Inc. By the City Cim it of Owl My ofBassot: ORDERED, THAT Edward A. Barrett, City manager, is hereby authorized to execute the following documents related to Jet Source International, Inc.'s and Telford Aviation, Inc.'s operations in Hangar 115 and Building 600 at Bangor International Airport; provided, however, that all such documents be approved as to form and content by the City Solicitor and Airport Directors 1. An Agreement, pursuant to 33 MRSA S 455, - concerning the personal property status of a two-story prefabricated building located. in Building 600. 2.. Consent to separate Conditional Assignment of Leases and Bents to Gardiner Savings Institution, FSB from Telford Aviation, Inc. and Jet Source International, Inc. 3. Consent to Assigtmient and Assumption of Lease to Jet Source International-, Inc. from Laurence A. Maul f/d/b/a hercfusion. 4. First Amendment to Indenture of Lease between City of Bangor and Jet Source International, Inc. (as assigned from Laurence A. Maul f/d/b/a Aerofusion). 5. Second Amendment to Indenture of Lease between City of Bangor and Telford Aviation, Inc. 6. Letter stating that there are no private mortgagees on either Building 600 or Hangar 115 at Bangor International Airport. 93-49] ORDER IN CITY COIMCIL Title, October 35, 1993 P e Authorising the City Manager to Execute Certain Documents Concerning Telford ?vie ciont,?nc;,ewd.J/ems/t, so�yrce�xn['(/.R/jpgFional, Inc. xTY CLEC) dedgem to 6 .. E o=*' c ilman... n— Cowc i i 'r 6 E r... THIS AGREEMENT, made this _(L2 day of �2C7PBE)T, 1993, ,01, by and., between: 1 ", ';rye.' LRUMNCB A. MAUI. of Bangor, Penobscot County, State of Maine, formerly doing business ae •�, 'Rerofuaion' and having a place of business - Sn Bangor, Penobscot County, State of Heine (hereinafter referred to ae "A86l9ftOr') and JET SOURCE INTERNATIONAL, INC., a business corporation organised and existing under the laws of the State of Maine and having A place of business at Bangor. Penobscot County, State of Maine (hereinafter referred to as "Assignee") P1 T. P&&EIII P: WHEREAS, the City of Bangor, Maine, as Lessor, entered into e certain Indenture of Lease dated June 11, 1986, under term$ of which Laurence A. Maul leased certain promises located at the City's Bangor International Airports for a five-year term commencing May 1, 1986 and renewable through April 30, 1996, as more fully set out In said Indenture of Lease; and WRBREAS, the termpp�� said Indenture of Lease was duly extended through April 30(i'3988'9a provided therein, by a written �o Pz notice given by Laurance A. Maul to the City of Bangor dated June 26, 1991; and WHEREAS, Assignor currently occupies the promisee described in said Indenture of Lease as Lessee thereof, said Indenture of Lease being in full force and effect according to its termer Assignor having committed no breach or default thereunder) and WNEREASr Assignor desires to namlgn, and Assignee desires to assume, said Indenture ofLease including all of Assignor's right, title and interest in and t0 the promisee demised thereunder for the balance of the current unexpired term; in each case with affect from and after :C,-. Al 1993 (the "Effective Date')) NOM, THEREFORE, in consideration of the premises end of the respective undertakings hereinafter set forth, the parties hereby mutually agree as follows; DRAFT 7-30-93 93-49] 1. The Assignor hereby assignee transfers and convoys to the Assignee all of the Assignor#• right, title and interest in and to said Indenture of Lease and the promisee desired thereunder as of and from the Effective Data through the balance of the current unexpired term. 3. Assignee hereby accepts the assignment of Assignor's right, title and interest In and to the Lease, and (a) assumes k' paeformence of all of the obligations of the Lessee under the Lease, and (b) further agrees to comply with and abide by all of the termer conditions, provisions, and covenants on the part of the Lessee under the Lease,. including without limitations the payment of front and all other charges due under the Lease, with effect as of and from the Effective Date. #; 3. Assignor hereby agrees to indemnify and hold Assignee harmless of and from any and all claims, liabilities, obligations, costaand expenses of any nature whatsoever, includinge without zlimitation, reasonable attorneys, fees, &Tieing out of any default on the part of Assignor pursuant to the Lease up to the Effective Date. f. Assignee hereby agrees to indemnify and hold Assignor harmless of and from any and all claims, liabilities, obligations, costs and expenses of any nature whatsoevere including without limitation, reasonable attorneys' fees arising by reason of any default on the part of Assignee pursuant to the Lease and after the Effective Date. - 5. This Assignment and Aeeumptlon of Leese agreement is conditional upon the delivery by Lessor of any necessary consent hereto. IN WITNESS WHEREOF, the parties have executed this Assignment and Assumption of Lease agreement on the day and year first above rattan. �J W n 88 LAUAANC6 A.MAUL JET SOURCE. INTERNATIONALe INC. ey Its P6lG/ T Thereunto Duly Authorised 9}497 Pursuant to Article XVIII (R) of said Indenture of Laasa dated June Ile 1966, the CITY OF RARGOR, as Lessor, releasee the ASSIGNOR froi any of its obligations under &aid Indenture ot,tease ariaing�oriceruing"after the •Effacti" Oats" of a&eigrvnent an defined aboyel and hereby consents to the Assignment to and Assumption of said Indenture of Lease by the ASSIGNER, Nltneoet CITY OF BANGOR Its Thereunto Duly Authorized Date ESCROW AGREEMENT AGREEMENT made this 15th day Of October, 1993 by and among the following: GARDINER SAVINGS INSTI'f UTION BSB a federally chartered savings bank w a pr ne pe p ace o ua nese in Gardlne.r, County of Rennebec, Sta ca of Maine,. he refnafter called "Bank*; - JET SOURCE INTERNATIONAL INC. a corporation organized under the laws o Me ne w t a p ace o usiness in Bangor, penobseot County, M41ne, hereinafter called •BOa[owerxl/- TELFORD , ALLEN Of r /n , County of State o Ma neere naf t¢/prJ c8 e A en•1 and LAURENCE A. MAUL of VIfACA✓ . County of ereere after called au ; ISI � WITI HA $ETH: i WHEREAS, Maul wishes to sell t0 Borrower and Borrower wishes to buy from Maul certain assets of Maul utilised in his business which has been operating under the name of "Ae[ofusion"; WHEREAS, it is convenient for the parties hereto to sign all documentation regarding this transaction on this date; WHEREAS, because certain amendments to the lessee affecting the properties which are part of this transaction must be reviewed and approved by the Bangor City Council at its meeting of October 235, 1993; WHEREAS, the parties hereto all agree that the Said documents signed today shall be held by George W. Heselton as Escrow Agent pending action by the Bangor City Council; NOW, THEREFORE, for good and Valuable consideration the receipt of which is acknowledged by all parties hereto, each from the Other, the parties agree as follows: 1. That all documents regarding this transaction shall be signed today. 2. That no funds shell be disbursed until the action required by the Bangor City Council has boon formally taken by that Council and Written confirmation of that action hal been reviewed and approved by Bank. 3. That all documents signed this date shall be held by George W. Heselton, attorney for Bank, as Escrow Agent, under the terms of this Agreement. 4. That upon approval by Bank of the action Of the Bangor City Council the Escrow Agent shall deliver ell documents t0 the 11w pa%a-MMy w4xn6,p x4W.lA .ln M1q nn Yl. eq a0�n alFNy YWtYW ,fGm µOd- parties entitled to them according to the closing agenda and shall disburse all funds of this closing in accordance with the Settlement Statement. 5. That in the event that the Bangor City Council does not take the requestedgyq9jj ion, which action is set forth in Exhibit 'A" attached heret07lblth thirty (30) days of this date, then this transection snail, be terminated and ell documents held by the Escrow Aggant shell be marked `VOID• and returned to the a igner(el. IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year first above written. SIGNED, SEALED and DELIVERED in Presence of CARDS I NS IT TION. FSB Sy: R 414 it. an Assistant VL a President SUC (CZ'� aza T-I[.�SPC C�¢scn, Gy C w, Gl�, b3111 �Qa// �3FCR VrAk J avAauce iLllzu� Q/ do �.� wmn..a_..am.Ya.mm,w,.�...:...,..,..m..._..��.�...�r..� . No+ .. 93-497 EXHIBIT 'A• Action requested by the Bangor City Council: 1. Authorize the Extension of the term In the Option Of Renewal in the lease of the City Of Bangor to Telford Aviation, Inc. dated September 1, 1989 to October 31, 2000. 2. Authorise the extension of the term in the Option of Renewal in the lease of the City of Bangor to Laurence A. Maul dated June 11, 1986 to October 31, 2000. 4. Authorize the further Assignment of gold lease of September 1, 1986 (Bangor to Telford) from Jet Source International, Inc. to Gardiner Savings Institution, FSH. 5. Authorize the Assignment of said lease of June 11, 1986 (Bangor to Maul) to Jet Source International, Inc. 6. Authorize the Assignment of said lease of June 11, 1986 (Bangor to Maul) from Jet Source International, Inc. to Gardiner Savings Institution, ?Be. 7. Authorize the Amendment of both Said leases,to include the following provision: •Lender (Gardiner Savings Institution, FSB) shall have the right, for a period of ninety (90) days following receipt of written notice from Lessor to Lender of termination of the Lease, to enter the leased premises for the purpose of removing or selling thereat any or all of the Leaeee's personal property on which Lender has a lien or security Interest.' s� a7 YWpM1y-,YIIO. M.x,yNW IYW.OA.. W 1NrYHM- I.O Nr lm awmmamuxtwW 93-497 FIRST AMENDMENT TO INDENTURE OF LEASE This FIRST AMENDMENT TO INDENTURE OF LEASE, executed this day of , 1993, by and between: The CITY OF BANGOR, a municipal corporation duly organized and existing under the laws of the State of Maine and located at Bangor, Penobscot County, State of Maine (hereinafter 'LESSOR-) and TELFORD AVIATION, INC., a business corporation duly organized and existing under the laws of the State of Maine and having its principal office at Waterville, Somerset County, State of Maine (hereinafter "LESSEE') w 3 T 1i HBBE T H: WHEREAS, LESSOR and LESSEE are parties to a certain Indenture of Lease dated September 1, 1989 demising to the LESSEE certain premises at LESSOR's Bangor International Airport, as more fully set out in said Indenture of Lease; and WHEREAS, LESSEE desires to operate a general aviation repair station upon the premises demised in said Indenture of Lease, for the purpose of providing aircraft maintenance, repairs and related services; and WHEREAS, LESSOR is agreeable to LESSEE'S intended use of the premises demised under the parties' Indenture of Lease, NOW, THEREFORE, in consideration of the foregoing recitals, the parties hereby agree that Article IV(A) of the parties' Indenture of Lease dated September 1, 1989 is hereby amended to read as follows: ARTICLE IV USE OCCUPANCY AND IMPROVEMENTS OF PREMISES (A) Lessee shall use, occupy, and maintain the premises herein leased in a reasonably businesslike, careful and nonhazardous manner on account of fire for the purposes of operating a General Aviation service and aircraft repair facility based on specific uses herein listed, ARTICLE VIZ ElNiIFICATION AND COYENANT TO HOLD .HARMLESS A. General Indemnification - The Lessee agrees to indemnify and to s and hold Lessor harmless from and against any and all claims of whatever nature arising from any negligent act or omission of the Lessee or Lessee's contractora, licensees, agents, servants or employees arising out of any accident, injury, death or damage whatsoever caused to any person or to the property of any .person occurring during the term or any extension hereof in or about the Lassoe's demised premises where such accident, damage, death or injury is proximately caused by any negligent act or omission on the part of the Lessee or Lessee's contractors, licensees, agents, servants or employees, or from the use, placement, storage or disposal, including accidental disposal, of any fuel, solvent, lubricant, or any other volatile or hazardous material on the leased premises by the Lessee or by Lessee's contractors, customers, licensees, agents, servants or employees. B. Lessee's waiver of workers' Compensation Immunity - Lessee hereby expressly agrees that it will defend, indemnify and hold the City of Bangor harmless from any and all claims made or asserted by Lessee's agents, servants or employees arising out of or in connection with Lessee's activities under this Lease, including employment-related claims. For this purpose, Lessee hereby expressly waives .any and all immunities it may have under Maine's Workers' Compensation Act or other provisions of law i regard to such claims made or asserted against the Lessor by Lessee'sagents, servants or employees. The indemnification provided under this paragraph shall extend to and include any and all'costs incurred by the City of Bangor to answer, investigate, defend and settle all such claims, including but not limited to the City of Bangor's costa for attorneys fees, expert and other witness fees, the cast of investigators, and payment in full of any and all judgments rendered in favor of Lessee's agents, servants or employees against the City of Bangor in - regard to claims made or asserted by such agents, servantsor employees. Lessee shall indemnify the Lessor for all such coats notwithstanding any immunity from liability or suit for such claims Lessee may otherwise enjoy under Maine's Workers' Compensation Act or other provisions of law. -3- 93-69] and for no other use whatsoever without the prior expressed written consent of the Airport Director. The General Aviation service to be conducted by Lessee upon the demised premises shall consist of a charter aircraft service or so-called air taxi service, flying instruction, aircraft rental, and aircraft maintenance within the demised premisea, said maintenance to be restricted to maintenance of aircraft owned by Lessee, leased by Lessee from aircraft sales companies, aircraft for which maintenance is provided by Lessee under a leaseback arrangement with private owners that provide for management and use of said aircraft by Lessee over an extended period of time. In conducting and operating its General Aviation service, Lessee shall meet and conform with the Minimum Standards for General Aviation Service operators on Bangor International Airport, said standards prepared in written form and attached to this Lease as exhibit C. The General Aviation aircraft repair facility to be operated by the Lessee upon the demised premises may provide aircraft maintenance and repair services to owned and non -owned aircraft, including but not limited to those types of aircraft listed above. Services to he provided may include maintenance, repair, overhaul of propeller or jet aircraft raft and engines. Lessee shall not, however, provide such services to multi -engined aircraft engaged in scheduled or unscheduled commercial transportation of passengers o freight via SIA. Leasee may operate its General Aviation aircraft repair facility upon the demised premises through a subsidiary corporation organized within the State of Maine for that purpose, but such subsidiary corporation shall independently comply with fire and liability insurance and indemnification requirements imposed by the Lessor or made applicable to the Lessee under Articles v and VII of this Lease. In operating its General Aviation aircraft repair facility, Lessee or its subsidiary shall conform with all applicable Federal, State and local laws and regulations concerning such repairs and maintain PAA certification to operate such -a facility. Lessee may also engage in sales, service and repair of any and all types of marine or aviational electronic equipment. The parties further agree that Article VII of their Indenture of Lease, dated September 1, 1989, is hereby amended to read as follows: -2-