Document:

Exhibit 10.59

 

 

	
Banc of America Leasing & Capital, LLC
    	
Equipment Security Note   Number: 001
    

 

This Equipment Security Note No. 001, dated as of December 6, 2013, (this “Equipment Note”), is entered into pursuant to and incorporates by this reference all of the terms and provisions of that certain Master Loan and Security Agreement No. 26577-70000 dated as of December 6, 2013 (the “Master Agreement”), by and between Banc of America Leasing & Capital, LLC (“Lender”) and Stellaris LLC (“Co-Borrower”), Arb, Inc. (“Co-Borrower”), James Construction Group, L.L.C. (“Co-Borrower”)and Rockford Corporation (“Co-Borrower”), (each a Co-Borrower herein, together referred to as “Borrower”).  All capitalized terms used herein and not defined herein shall have the respective meanings assigned to such terms in the Master Agreement. If any provision of this Equipment Note conflicts with any provision of the Master Agreement, the provisions contained in this Equipment Note shall prevail. Borrower hereby authorizes Lender to insert the serial numbers and other identification data of the Equipment, dates, and other omitted factual matters or descriptions in this Equipment Note.

 

The occurrence of an “Event of Default,” as defined in the Master Agreement, shall entitle Lender to accelerate the maturity of this Equipment Note and to declare the Prepayment Amount to be immediately due and payable, and to proceed at once to exercise each and every one of the remedies provided in the Master Agreement or otherwise available at law or in equity.  All of Borrower’s Obligations under this Equipment Note are absolute and unconditional, and shall not be subject to any offset or deduction whatsoever.  Borrower waives any right to assert, by way of counterclaim or affirmative defense in any action to enforce Borrower’s Obligations hereunder, any claim whatsoever against Lender.

 

1.         Equipment Financed; Equipment Location; Grant of Security Interest.  Subject to the terms and provisions of the Master Agreement and as provided herein, Lender is providing financing in the principal amount described in Section 2 below to Borrower in connection with the acquisition or financing of the following described Equipment:

 

	
Quantity
    	
 
    	
Description
    	
 
    	
Serial Number
    	
 
    	
Cost
    	
 
    
	
 
    	
 
    
	
See Exhibit “A”   attached hereto and made a part hereof.
    	
 
    

 

Location of Equipment. The Equipment will be located or (in the case of over-the-road vehicles) based at the following locations:

 

	
Location
    	
 
    	
Address
    	
 
    	
City
    	
 
    	
County
    	
 
    	
State
    	
 
    	
ZIP
    	
 
    
	
 
    	
 
    
	
See Exhibit “A” attached hereto and made a part hereof.
    	
 
    

 

Borrower has agreed and does hereby grant a security interest in and to the Equipment and the Collateral related thereto, whether now owned or hereafter acquired and wherever located, in order to secure the payment and performance of all Obligations owing to Lender, including but not limited to this Equipment Note, all as more particularly provided in the Master Agreement.  Lender’s agreement to provide the financing contemplated herein shall be subject to the satisfaction of all conditions established by Lender and Lender’s prior receipt of all required documentation in form and substance satisfactory to Lender in its sole discretion.

 

2.         Payments.  For value received, Borrower promises to pay to the order of Lender, the principal amount of $10,573,141.34, together with interest thereon as provided herein.  This Equipment Note shall be payable by Borrower to Lender in 84 (eighty four) consecutive monthly, installments of principal and interest (the “Payments”) commencing on January 13, 2014 (the “Initial Payment”) and continuing thereafter through and including December 13, 2020 (the “Maturity Date”) (collectively, the “Equipment Note Term”).  Each Payment shall be in the amount provided below, and due and payable on the same day of the month as the Initial Payment set forth above in each succeeding payment period (each, a “Payment Date”) during Equipment Note Term.  All interest hereunder shall be calculated on the basis of a year of 360 days comprised of 12 months of 30 days each.  The final Payment due and payable on the Maturity Date shall in any event be equal to the entire outstanding and unpaid principal amount of this Equipment Note, together with all accrued and unpaid interest, charges and other amounts owing hereunder and under the Master Agreement.

 

(a)  Interest Rate.  Interest shall accrue on the entire principal amount of this Equipment Note outstanding from time to time at a fixed rate of two and 21/100 percent (2.21%) per annum or, if less, the highest rate of interest permitted by applicable law (the “Interest Rate”), from the date hereof until the principal amount of this Equipment Note is paid in full, and shall be due and payable on each Payment Date.

 

(b)  Payment Amount.  The principal and interest amount of each Payment shall be $135,973.40.

 

1

 

3.             Prepayment.  Borrower may prepay all (but not less than all) of the outstanding principal balance of this Equipment Note on a scheduled Payment Date upon 30 days prior written notice from Borrower to Lender, provided that any such prepayment shall be made together with (a) all accrued interest and other charges and amounts owing hereunder through the date of prepayment, and (b) a prepayment charge calculated as follows: two percent (2.0%) of the amount prepaid during months one (1) through twelve (12), one percent (1.0%) of the amount prepaid during months thirteen (13) through thirty-six (36), and no prepayment penalty thereafter; provided, however, that, if any prepayment of this Equipment Note is made following an Event of Default, by reason of acceleration or otherwise, the prepayment charge shall be calculated based upon the full original Equipment Note Term.

 

4.         Borrower Acknowledgements.  Upon delivery and acceptance of the Equipment, Borrower shall execute this Equipment Note evidencing the amounts financed by Lender in respect of such Equipment and the Payments of principal and interest hereunder.  By its execution and delivery of this Equipment Note, Borrower:

 

(a)                   reaffirms of all of Borrower’s representations, warranties and covenants as set forth in the Master Agreement and represents and warrants that no Default or Event of Default under the Master Agreement exists as of the date hereof;

 

(b)                   represents, warrants and agrees that: (i) the Equipment has been delivered and is in an operating condition and performing the operation for which it is intended to the satisfaction of Borrower; (ii) each item of Equipment has been unconditionally accepted by Borrower for all purposes under the Master Agreement and this Equipment Note; and (iii) there has been no material adverse change in the operations, business, properties or condition, financial or otherwise, of Borrower or any Guarantor since December 31, 2012;

 

(c)                    authorizes and directs Lender to advance the principal amount of this Equipment Note to reimburse Borrower or pay Vendors all or a portion of the purchase price of Equipment in accordance with Vendors’ invoices therefor, receipt and approval of which are hereby reaffirmed by Borrower; and

 

(d)                   agrees that Borrower is absolutely and unconditionally obligated to pay Lender all Payments at the times and in the manner set forth herein.

 

5.         Registration.

 

(a)  All items of Equipment that are motor vehicles shall at all times be registered and titled as follows:

 

	
(A)
    	
Registered   Owner.
    	
James   Construction Group, L.L.C.
    
	
 
    	
 
    	
11441   Industriplex Blvd Ste 140
    
	
 
    	
 
    	
Baton   Rouge, LA 70809
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Arb   Inc
    
	
 
    	
 
    	
26000   Commercentre Drive
    
	
 
    	
 
    	
Lake   Forest, CA 92630
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Stellaris   LLC
    
	
 
    	
 
    	
26000   Commercentre Drive
    
	
 
    	
 
    	
Lake   Forest, CA 92630
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Rockford   Corporation
    
	
 
    	
 
    	
22845   NW Bennett St Ste 150
    
	
 
    	
 
    	
Hillsboro,   OR 97124
    
	
 
    	
 
    	
 
    
	
(B)
    	
Lienholder.
    	
Banc of America Leasing & Capital, LLC
    
	
 
    	
 
    	
2059   Northlake Parkway, 3rd Floor
    
	
 
    	
 
    	
Tucker,   GA 30084
    

 

(b)  Borrower shall be responsible for the correct titling of all such items of Equipment.  Borrower shall cause the original certificates of title to be delivered to Lender for retention in Lender’s files throughout the term of the Equipment Note.  All costs of such registration and licensing are for the account of Borrower.

 

2

 

	
BANC OF AMERICA LEASING & CAPITAL, LLC
    	
 
    	
Co-Borrower: STELLARIS LLC
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/Patricia Smith-Disu
    	
 
    	
 
    	
By:
    	
Primoris Services Corporation (fka Primoris
    
	
 
    	
 
    	
 
    	
 
    	
Corporation), its Sole Member
    
	
Printed Name: Patricia Smith-Disu
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/Pete Moerbeek
    
	
Title: Vice President
    	
 
    	
 
    	
Printed Name:
    	
Pete Moerbeek
    
	
 
    	
 
    	
 
    	
Title:
    	
CFO
    
	
Advance Date: 12-13-13
    	
 
    	
 
    
	
 
    	
 
    	
Co-Borrower: Arb, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Alfons Theeuwes
    
	
 
    	
 
    	
Printed Name:
    	
Alfons Theeuwes
    
	
 
    	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Co-Borrower: JAMES CONSTRUCTION GROUP, L.L.C.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/Pete Moerbeek
    
	
 
    	
 
    	
Printed Name:
    	
Pete Moerbeek
    
	
 
    	
 
    	
Title:
    	
Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Co-Borrower: Rockford   Corporation.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/Pete   Moerbeek
    
	
 
    	
 
    	
 
    	
Print   Name:
    	
Pete   Moerbeek
    
	
 
    	
 
    	
 
    	
Title:
    	
CFO
    
									

 

3

	

    	
 
    
	
 
    	
Exhibit A EQUIPMENT
    
	
 
    	
 
    
	
The   following documents are attached to and made a part hereof:
    	
Equipment Security Note Number
    
	
 
    	
to Master Loan and Security Agreement
    
	
 
    	
Number 26577-70000-001
    
	
with:
    	
 
    

 

Equipment is currently located at:

26000 COMMERCENTER DR

LAKE FOREST, CA  92630

 

	
Year
    	
 
    	
Make
    	
 
    	
Model
    	
 
    	
Description
    	
 
    	
Serial No.
    	
 
    	
Cost
    
	
2013
    	
 
    	
International
    	
 
    	
7300
    	
 
    	
13 INTL 7300 DIGGER DERRICK
    	
 
    	
1HTWBAAN0DJ234906
    	
 
    	
181,000.00
    
	
2013
    	
 
    	
International
    	
 
    	
7300
    	
 
    	
13 INTL 7300 DIGGER DERRICK
    	
 
    	
1HTWBAAN3DJ234902
    	
 
    	
181,000.00
    
	
2013
    	
 
    	
International
    	
 
    	
7300
    	
 
    	
13 INTL 7300 DIGGER DERRICK
    	
 
    	
1HTWBAAN6DJ234912
    	
 
    	
181,000.00
    
	
2013
    	
 
    	
International
    	
 
    	
7300
    	
 
    	
13 INTL 7300 DIGGER DERRICK
    	
 
    	
1HTWBAAN2DJ170609
    	
 
    	
181,000.00
    
	
2009
    	
 
    	
International
    	
 
    	
7300
    	
 
    	
09 INTL 7300 DIGGER DERRICK
    	
 
    	
1HTWBAAN49J086587
    	
 
    	
124,500.00
    
	
2013
    	
 
    	
International
    	
 
    	
7300
    	
 
    	
13 INTL 7300 BUCKET TRUCK
    	
 
    	
1HTWBAAN2DJ235068
    	
 
    	
176,000.00
    
	
2013
    	
 
    	
International
    	
 
    	
7300
    	
 
    	
13 INTL 7300 BUCKET TRUCK
    	
 
    	
1HTWBAAN0DJ235067
    	
 
    	
176,000.00
    
	
2013
    	
 
    	
Freightliner
    	
 
    	
M2   106
    	
 
    	
13 FREIGHTLNR M2106 BUCKET TRK
    	
 
    	
1FVDCXDT2DHBW2720
    	
 
    	
176,000.00
    
	
2013
    	
 
    	
Freightliner
    	
 
    	
M2   106
    	
 
    	
13 FREIGHTLNR M2106 BUCKET TRK
    	
 
    	
1FVDCXDT4DHBW2721
    	
 
    	
176,000.00
    
	
2012
    	
 
    	
International
    	
 
    	
4300
    	
 
    	
12 INTL 4300 BUCKET TRUCK
    	
 
    	
3HAMMAAN7CL451533
    	
 
    	
146,000.00
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
D6T   XL
    	
 
    	
12 CAT D6T XL DOZER
    	
 
    	
DTD01123
    	
 
    	
277,228.04
    
	
2012
    	
 
    	
Volvo
    	
 
    	
PL3005D
    	
 
    	
12 VOLVO PL3005D PIPELAYER EXC
    	
 
    	
210011
    	
 
    	
306,720.00
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
336EL
    	
 
    	
12 CAT 336EL EXCAVATOR
    	
 
    	
BZY02012
    	
 
    	
260,164.31
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
308E
    	
 
    	
12 CAT 308E MINI EXCAVATOR
    	
 
    	
GBJ01042
    	
 
    	
81,115.24
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
950K
    	
 
    	
12 CAT 950K WHEEL LOADER
    	
 
    	
R4A00647
    	
 
    	
217,722.61
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
246C
    	
 
    	
12 CAT 246C SKID STEER LOADER
    	
 
    	
JAY06902
    	
 
    	
31,498.33
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
246C
    	
 
    	
12 CAT 246C SKID STEER LOADER
    	
 
    	
JAY06932
    	
 
    	
27,884.18
    
	
2013
    	
 
    	
McElroy
    	
 
    	
Tracstar   900
    	
 
    	
13 ME TRACSTAR 900 FUSION MACH
    	
 
    	
C59382
    	
 
    	
259,735.68
    
	
2010
    	
 
    	
McElroy
    	
 
    	
618
    	
 
    	
10 ME 618 PORT FUSION MACHINE
    	
 
    	
C40337
    	
 
    	
41,072.78
    
	
2014
    	
 
    	
Ford
    	
 
    	
Explorer
    	
 
    	
14 FORD EXPLORER XLT
    	
 
    	
1FM5K7D8XEGA08514
    	
 
    	
35,875.11
    
	
2013
    	
 
    	
Ford
    	
 
    	
F550
    	
 
    	
13 FORD F550 FLATBED 4X4
    	
 
    	
1FDUF5HT6DEB42935
    	
 
    	
49,596.34
    
	
2013
    	
 
    	
Ford
    	
 
    	
F550
    	
 
    	
13 FORD F550 FLATBED
    	
 
    	
1FDUF5GT4DEB48220
    	
 
    	
46,586.74
    
	
2013
    	
 
    	
Ford
    	
 
    	
F550
    	
 
    	
13 FORD F550 FLATBED
    	
 
    	
1FDUF5GT6DEB48218
    	
 
    	
46,586.74
    
	
2013
    	
 
    	
Ford
    	
 
    	
F550
    	
 
    	
13 FORD F550 FLATBED
    	
 
    	
1FDUF5GT8DEB48222
    	
 
    	
46,586.74
    
	
2013
    	
 
    	
Ford
    	
 
    	
F550
    	
 
    	
13 FORD F550 FLATBED
    	
 
    	
1FDUF5GT1DEB54217
    	
 
    	
46,586.74
    
	
2013
    	
 
    	
Ford
    	
 
    	
F550
    	
 
    	
13 FORD F550 FLATBED
    	
 
    	
1FDUF5GT6DEB48221
    	
 
    	
46,586.74
    
	
2013
    	
 
    	
Ford
    	
 
    	
F550
    	
 
    	
13 FORD F550 FLATBED
    	
 
    	
1FDUF5GTXDEB54216
    	
 
    	
46,586.74
    
	
2013
    	
 
    	
Ford
    	
 
    	
F650
    	
 
    	
13 FORD F650 FLATBED DUMP
    	
 
    	
3FRWF6FL6DV784407
    	
 
    	
78,755.14
    
	
2013
    	
 
    	
Ford
    	
 
    	
F650
    	
 
    	
13 FORD F650 FLATBED DUMP
    	
 
    	
3FRWF6FL4DV784406
    	
 
    	
78,755.14
    
	
2013
    	
 
    	
Ford
    	
 
    	
F650
    	
 
    	
13 FORD F650 FLATBED DUMP
    	
 
    	
3FRWF6FL8DV784408
    	
 
    	
78,755.14
    
	
2013
    	
 
    	
Ford
    	
 
    	
F650
    	
 
    	
13 FORD F650 FLATBED DUMP
    	
 
    	
3FRWF6FL6DV784410
    	
 
    	
78,755.14
    
	
2013
    	
 
    	
Ford
    	
 
    	
F650
    	
 
    	
13 FORD F650 FLATBED DUMP
    	
 
    	
3FRWF6FL8DV784411
    	
 
    	
78,755.14
    
	
2013
    	
 
    	
Ford
    	
 
    	
F650
    	
 
    	
13 FORD F650 FLATBED DUMP
    	
 
    	
3FRWF6FLXDV784409
    	
 
    	
78,755.14
    
	
2013
    	
 
    	
Caterpillar
    	
 
    	
D6T
    	
 
    	
13 CAT D6T PIPELAYER
    	
 
    	
ZJB01282
    	
 
    	
437,448.68
    
	
2013
    	
 
    	
Caterpillar
    	
 
    	
D6T
    	
 
    	
13 CAT D6T PIPELAYER
    	
 
    	
ZJB01284
    	
 
    	
437,448.68
    
	
2013
    	
 
    	
Caterpillar
    	
 
    	
D6T
    	
 
    	
13 CAT D6T PIPELAYER
    	
 
    	
ZJB01285
    	
 
    	
437,448.68
    
	
2013
    	
 
    	
Caterpillar
    	
 
    	
D6T
    	
 
    	
13 CAT D6T PIPELAYER
    	
 
    	
ZJB01290
    	
 
    	
437,448.68
    
	
2013
    	
 
    	
Caterpillar
    	
 
    	
D6T
    	
 
    	
13 CAT D6T PIPELAYER
    	
 
    	
ZJB01292
    	
 
    	
480,448.68
    
	
2013
    	
 
    	
Caterpillar
    	
 
    	
D6T
    	
 
    	
13 CAT D6T PIPELAYER
    	
 
    	
ZJB01294
    	
 
    	
480,448.68
    
	
2013
    	
 
    	
Caterpillar
    	
 
    	
D6T
    	
 
    	
13 CAT D6T PIPELAYER
    	
 
    	
ZJB01295
    	
 
    	
480,448.68
    
	
2013
    	
 
    	
Caterpillar
    	
 
    	
D6T
    	
 
    	
13 CAT D6T PIPELAYER
    	
 
    	
ZJB01300
    	
 
    	
480,448.68
    
	
2013
    	
 
    	
Ford
    	
 
    	
F750
    	
 
    	
13 FORD F750 4DR FLATBED DUMP
    	
 
    	
3FRXW7FL9DV763206
    	
 
    	
83,779.29
    
	
2014
    	
 
    	
Peterbilt
    	
 
    	
365
    	
 
    	
14 PETERBILT 365 LUBETRUCK 6X6
    	
 
    	
1NPSM70X8ED235399
    	
 
    	
183,558.23
    
	
2014
    	
 
    	
Peterbilt
    	
 
    	
365
    	
 
    	
14 PETERBILT 365 LUBETRUCK 6X6
    	
 
    	
1NPSM70X0ED235400
    	
 
    	
182,189.09
    
	
2014
    	
 
    	
Peterbilt
    	
 
    	
365
    	
 
    	
14 PETERBILT 365 FUELTRUCK 6X6
    	
 
    	
1NPSM70X2ED235401
    	
 
    	
183,558.25
    
	
2014
    	
 
    	
Peterbilt
    	
 
    	
365
    	
 
    	
14 PETERBILT 365 FUELTRUCK 6X6
    	
 
    	
1NPSM70X4ED235402
    	
 
    	
182,189.09
    
	
N/A
    	
 
    	
Finn
    	
 
    	
B70S
    	
 
    	
FINN B70S STRAW BLOWER
    	
 
    	
13C55535
    	
 
    	
28,723.88
    
	
2013
    	
 
    	
Kenworth
    	
 
    	
N/A
    	
 
    	
2013 KENWORTH FUEL LUBE TRUCK
    	
 
    	
2NKHHN7X1DM359005
    	
 
    	
151,900.00
    
	
2013
    	
 
    	
Kenworth
    	
 
    	
N/A
    	
 
    	
2013 KENWORTH FUEL LUBE TRUCK
    	
 
    	
2NKHHN7X2CM326402
    	
 
    	
85,006.00
    
	
2013
    	
 
    	
Trail   King
    	
 
    	
Lowboy
    	
 
    	
2013 TRAIL KING LOWBOY TRAILER
    	
 
    	
5DDKE2639D1006530
    	
 
    	
92,334.08
    
	
2014
    	
 
    	
KASI
    	
 
    	
N/A
    	
 
    	
2014 FLIP AXEL
    	
 
    	
5DDKB0613E1007010
    	
 
    	
—
    
	
2013
    	
 
    	
Grove
    	
 
    	
RT530E-2
    	
 
    	
2013 RT530E-2 GROVE ROUGH TERRAIN PICKER
    	
 
    	
233509
    	
 
    	
356,880.02
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
938H
    	
 
    	
2012 CAT 938H INTEGRATED TOOL CARRIER
    	
 
    	
MJC01836
    	
 
    	
153,570.35
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
930K
    	
 
    	
2012 CAT 930K INTEGRATED TOOL CARRIER
    	
 
    	
RHN00517
    	
 
    	
146,816.69
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
320EL
    	
 
    	
2012 CAT EXACAVATOR 320EL RR
    	
 
    	
TFX00209
    	
 
    	
161,401.74
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
320EL
    	
 
    	
2012 CAT EXACAVATOR 320EL RR
    	
 
    	
TFX00186
    	
 
    	
149,181.23
    
	
2012
    	
 
    	
Caterpillar
    	
 
    	
AP1000E
    	
 
    	
2012 CAT AP1000E ASPHALT PAVER
    	
 
    	
T1F00106
    	
 
    	
395,128.70
    
	
2013
    	
 
    	
Caterpillar
    	
 
    	
140M   2
    	
 
    	
2013 CAT MOTOR GRADER 140M2
    	
 
    	
M9D01521
    	
 
    	
326,171.36
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
10,573,141.34Exhibit 10.09

AIRCRAFT TIME SHARING AGREEMENT

THIS AIRCRAFT TIME SHARING AGREEMENT (the "Agreement") is made and entered into as of this 17th day of January, 2014 by and between Citiflight, Inc., a corporation existing under the laws of the State of Delaware (“Operator”), and Michael L. Corbat, an individual (“Lessee”), who together are sometimes also referred to herein individually as a “Party” or collectively as the “Parties.”

WITNESSETH:

WHEREAS, Operator has possession and ownership of the aircraft described in Section 20 of this agreement (individually and collectively, the “Aircraft”);

WHEREAS, Operator desires to lease from time-to-time the Aircraft to Lessee for Lessee's use on a time sharing basis in accordance with 91.501 of the FAA’s federal aviation regulations, 14 C.F.R. Parts 1-199 as amended (the “FARs”);

WHEREAS, Operator employs fully qualified flight crews to operate the Aircraft on such basis; and

WHEREAS, subject to the terms and conditions herein, Lessee desires to lease Operator’s Aircraft with flight crew supplied by Operator on a time sharing basis;

NOW THEREFORE, in consideration of the mutual covenants herein set forth, the Parties agree as follows:

Section 1    Provision of Program Aircraft.  Operator agrees to lease the Aircraft to Lessee on a time sharing basis in accordance with the provisions of Sections 91.501(b)(6), 91.501(c)(1) and 91.501(d) of the FARs and solely at Operator's discretion, including, without limitation, Operator's determination of Aircraft availability according to Section 5 hereof, for the period commencing on the date of execution hereof and terminating on the earlier of (1) the first anniversary hereof; (2) the date the Parties elect to terminate this Agreement as hereinafter provided; or (3) a final determination that there has been a total loss of all of the Aircraft (the “Term”); provided, however, that this Agreement shall be extended automatically on a year to year basis following the first (1st) anniversary hereof. Either Party shall have the right and option to cancel this Agreement at any time upon thirty (30) days’ prior written notice to the other Party for any reason or for no reason and this Agreement shall automatically terminate on the date that Lessee ceases to be employed by Citigroup Inc. or any of its affiliated companies, whether as a result of resignation, retirement, death or other termination, provided, however, that the Term 

1

shall be extended to permit the Lessee or Lessee’s invitees to complete any previously scheduled return flight for which the initial flight was begun during the Term.

Section 2    Reimbursement of Expenses.  For each flight conducted under this Agreement, Lessee shall pay Operator an amount (as determined by Operator) equal to the sum of the expenses of operating such flight that is permitted by FAR 91.501(d), i.e. an amount not to exceed the sum of the expenses set forth in subparagraphs (a)-(j) below for each such flight:

		
	(a)
	Fuel, oil, lubricants, and other additives;

		
	(b)
	Travel expenses of the crew, including food, lodging, and ground transportation;

		
	(c)
	Hangar and tie-down costs away from the Program Aircraft’s base of operation;

		
	(d)
	Insurance obtained for the specific flight;

		
	(e)
	Landing fees, airport taxes, and similar assessments;

		
	(f)
	Customs, foreign permit, and similar fees directly related to the flight;

		
	(g)
	In-flight food and beverages;

		
	(h)
	Passenger ground transportation;

		
	(i)
	Flight planning and weather contract services; and 

		
	(j)
	An additional charge equal to one hundred percent (100%) of the expenses listed in subparagraph (a) above.

Section 3    Invoicing and Payment.  All payments to be made to Operator by Lessee hereunder (regardless of the manner in which such payments are calculated pursuant to Section 2 above) shall be limited to the categories of costs identified in Items (a) through (j) of Section 2 above.  Operator will pay all expenses related to the operations of the Aircraft hereunder (including all those listed in clauses (a) through (i) of Section 2 above) in the ordinary course of operator’s business.  Operator shall provide to Lessee an invoice for the appropriate amount to be charged as specified in Section 2 above for each flight Lessee and his guests have taken under this Agreement (plus domestic or international air transportation excise taxes, as applicable, imposed on Lessee and his guests by the Internal Revenue Code for collection by Operator) (the “Time Sharing Invoice”).  Operator shall issue the Time Sharing Invoice within fifteen (15) days after the completion of said flight or flights.  Lessee shall pay Operator the full amount of such Time Sharing Invoice within thirty (30) days of the date of that invoice.

Section 4    Flight Requests.  Lessee will provide Operator with flight requests and proposed flight schedules as far in advance as possible, and in any case at least twenty-four (24) hours in advance of Lessee's desired departure, and Operator shall in turn coordinate said flight requests.  Flight requests shall be in a form, whether oral or written, mutually convenient to and agreed upon by the Parties.  In addition to proposed schedules and departure times, Lessee shall provide at least the following information for each proposed flight reasonably in advance of the desired departure time as required by Operator or its flight crew:

		
	(a)
	departure point;

		
	(b)
	destination;

		
	(c)
	date and time of flight;

		
	(d)
	number and identity of anticipated passengers;

		
	(e)
	nature and extent of luggage and/or cargo to be carried;

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	(f)
	date and time of return flight, if any; and

		
	(g)
	any other information concerning the proposed flight that may be pertinent to or required by Operator or its flight crew.

Section 5    Aircraft Scheduling.  As between Operator and Lessee, Operator shall have final authority and discretion over all scheduling of the Aircraft, and Operator shall, at no time, be under any obligation to provide the Aircraft to Lessee for a particular flight or series of flights.

Section 6    Aircraft Maintenance.  As between Operator and Lessee, Operator shall be solely responsible for securing scheduled and unscheduled maintenance, preventive maintenance, and required or otherwise necessary inspections of the Aircraft, and shall take such requirements into account in scheduling the Aircraft.  Performance of maintenance, preventive maintenance or inspection shall not be delayed or postponed for the purpose of scheduling the Aircraft unless, in the sole discretion of Operator and the pilot-in-command, such maintenance or inspection can safely be conducted at a later time in compliance with applicable laws, regulations and requirements.

Section 7    Flight Crew.  Operator shall employ, pay for and provide a qualified flight crew for all flight operations under this Agreement.

Section 8    Operational Authority and Control.  Operator shall be responsible for the physical and technical operation of the Aircraft and the safe performance of all flights, and shall retain full authority and control, including exclusive operational control, and possession of the Aircraft at all times at which the Aircraft is being operated on behalf of Lessee pursuant to this Agreement.  In accordance with applicable FARs, the qualified flight crew provided by Operator will exercise all required and/or appropriate duties and responsibilities in regard to the safety of each flight conducted hereunder.  The pilot-in-command shall have absolute discretion in all matters concerning the preparation of the Aircraft for flight and the flight itself, the load carried and its distribution, the decision whether or not a flight shall be undertaken, the route to be flown, the place where landings shall be made, and all other matters relating to operation of the Aircraft.  Lessee specifically agrees that the flight crew shall have final and complete authority to delay or cancel any flight for any reason or condition which in the sole judgment of the pilot-in-command could compromise the safety of the flight, and to take any other action which in the sole judgment of the pilot-in-command is necessitated by considerations of safety.  No such action of the pilot-in-command shall create or support any liability to Lessee or any other person for loss, injury, damage or delay.  The Parties further agree that Operator shall not be liable for delay or failure to furnish the Aircraft and crew pursuant to this Agreement for any reason or no reason including, without limitation, circumstances when such failure is caused by government regulation or authority, mechanical difficulty or breakdown, war, civil commotion, strikes or labor disputes, weather conditions, acts of God, or other circumstances within or beyond Operator’s reasonable control.

    
Section 9    Tax Indemnity; FET.  Lessee agrees to pay when due and assume liability for, and indemnify and hold harmless Operator concerning all claims of any kind whatsoever asserted by any person in the nature of, taxes which are incurred by Lessee (or his guests) through his (or their) use of the Aircraft under this Agreement.  Operator agrees to collect and remit for the benefit of Lessee any “federal excise tax” or “FET” imposed under IRC §4261 resulting from Lessee’s (or his guests’) use of the Aircraft under this Agreement; provided, however, that such agreement shall 

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in no way relieve Lessee of his duty to indemnify Operator for any and all taxes as described in the sentence immediately above.

Section 10    Warranties.  Lessee warrants that:

Section 10.1    No Commercial Use.     Lessee will use the Aircraft under this Agreement for, and only for, his own account, including the carriage of his guests, and will not use the Aircraft for purposes of providing transportation of passengers or cargo in air commerce for compensation or hire as a commercial operator or air carrier.

Section 10.2    No Liens.  Lessee will not permit any lien, security interest or other charge or encumbrance to attach against the Aircraft as a result of his action or inaction, and shall not convey, mortgage, assign, lease or in any way alienate the Aircraft or Operator's rights hereunder.  

Section 10.3    Laws.  During the term of this Agreement, Lessee will abide by and conform to all laws, orders, rules, and regulations as shall from time to time be in effect relating in any way to the operation or use of the Aircraft under this  time sharing arrangement or otherwise.

Section 11    Notices and Communications.  All notices and other communications under this Agreement shall be in writing (except as permitted in Section 4) and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by personal delivery, by Email (address below) telefax (with a simultaneous confirmation copy sent by first class mail properly addressed), or by a reputable overnight courier service, addressed as follows:

If to Operator:  

Citiflight, Inc.
Hangar E-2 79 Tower Road, West Harrison,
New York, 10604
Attn:  Alan H. Goldstein 
Telephone: 
Facsimile:  
        

If to Lessee: 

Michael L. Corbat 
C/O Citigroup Inc.
399 Park Avenue
New York, NY 10022
Telephone: 
Facsimile:  
        
or to such other person or address as either Party may from time to time designate in writing to the other Party.

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Section 12    Further Acts.  Operator and Lessee shall from time to time perform such other and further acts and execute such other and further instruments as may be required by law or may be reasonably necessary (i) to carry out the intent and purpose of this Agreement, and (ii) to establish, maintain and protect the respective rights and remedies of the Parties.

Section 13    Successors and Assigns.  Neither this Agreement nor any Party's interest herein shall be assignable to any other party.  This Agreement shall inure to the benefit of and be binding upon the Parties, their heirs, representatives and successors.

Section 14    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of New York.

Section 15    Severability.  If any provision of this Agreement is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions shall not be affected or impaired.

Section 16    Counterparts.  This Agreement may be executed in any number of counterparts and via facsimile, and each counterpart shall for all purposes be deemed to be an original.

Section 17    Amendment or Modification.  This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and is not intended to confer upon any person or entity any rights or remedies hereunder which are not expressly granted herein.  This Agreement may be amended or modified only in writing duly executed by the Parties hereto.

Section 18    TRUTH IN LEASING STATEMENT PURSUANT TO SECTION 91.23 OF THE FEDERAL AVIATION REGULATIONS:

(a)    OPERATOR CERTIFIES THAT THE AIRCRAFT HAS BEEN INSPECTED AND MAINTAINED WITHIN THE 12-MONTH PERIOD PRECEDING THE DATE OF THIS AGREEMENT IN ACCORDANCE WITH THE PROVISIONS OF PART 91 OF THE FEDERAL AVIATION REGULATIONS, EXCEPT TO THE EXTENT THE AIRCRAFT IS LESS THAN 12 MONTHS OLD, AND THAT ALL APPLICABLE REQUIREMENTS FOR THE AIRCRAFT'S MAINTENANCE AND INSPECTION THEREUNDER HAVE BEEN MET AND ARE VALID FOR THE OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.

(b)    OPERATOR AGREES, CERTIFIES AND ACKNOWLEDGES THAT WHENEVER THE AIRCRAFT IS OPERATED UNDER THIS AGREEMENT, OPERATOR SHALL BE KNOWN AS, CONSIDERED, AND SHALL IN FACT BE THE OPERATOR OF THE AIRCRAFT, AND THAT OPERATOR UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH THE APPLICABLE FEDERAL AVIATION REGULATIONS.

(c)    THE PARTIES UNDERSTAND THAT AN EXPLANATION OF FACTORS AND PERTINENT FEDERAL AVIATION REGULATIONS BEARING ON OPERATIONAL CONTROL CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE. OPERATOR FURTHER CERTIFIES THAT IT WILL 

5

SEND, OR CAUSE TO BE SENT, A TRUE COPY OF THIS AGREEMENT TO: FEDERAL AVIATION ADMINISTRATION, AIRCRAFT REGISTRATION BRANCH, ATTN. TECHNICAL SECTION (AVN-450), P.O. BOX 25724, OKLAHOMA CITY, OKLAHOMA 73125, WITHIN 24 HOURS AFTER ITS EXECUTION, AS REQUIRED BY SECTION 91.23(c)(1) OF THE FEDERAL AVIATION REGULATIONS.

Section 19    Description of Aircraft

Type of Aircraft             Manufacturer’s Serial Number
Bombardier Global Express            
Bombardier Global 6000            
Bombardier Global 6000            
Sikorsky S-76C+                

This Time Share Agreement supersedes and replaces any and all previous Time Share Agreements agreed to by Citiflight, Inc. and Michael L. Corbat.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed on the day and year first above written.  The persons signing below warrant their authority to sign.

OPERATOR                         LESSEE

By:  /s/ Alan H. Goldstein                /s/ Michael L. Corbat
Name: Alan H. Goldstein                Name: Michael L. Corbat
Title:    President

By:  /s/ William L. Buttenwieser            
Name:    William L. Buttenwieser
Title:    Vice President    

    

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