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HomeMy WebLinkAboutA8423 - DESERT ART CENTER OF THE COACHELLA VALLEY, INC LEASE By and Between THE CITY OF PALM SPRINGS and DESERT ART CENTER OF THE COACHELLA VALLEY, INC. 55575.00001\32077669.3 LEASE By and Behveen THE CITY OF PALM SPRINGS and DESERT ART.CENTER,INC. THIS ("Lease") is made and entered into this day of Wk , 2019 by and between the CITY OF PALM SPRINGS, a municipal corporation (referred to variously as "Landlord" or "City"), and DESERT ART CENTER, Inc., a non-profit corporation ("Tenant" or "Desert Art Center")who agree as follows: 1.0 LEASE SUMMARY. Certain fundamental lease provisions are presented in this Section and represent the agreement of the parties hereto, subject to further definition and elaboration in the respective referenced Sections and elsewhere in this Lease. In the event of any conflict between any fundamental lease provision and the balance of this Lease, the latter shall control. References to specific Sections are for convenience only and designate some of the Sections where references to the particular fundamental lease provisions may appear. 1.1 Premises. The "Premises shall refer to that certain real property located in the City of Palm Springs, County of Riverside, State of California, located at 550 N. Palm Canyon Drive, Palm Springs CA 92262, and shown on Exhibit "A" hereof together with the improvements located thereon as depicted on the Plot Plan attached as Exhibit`B"hereof. 1.2 Approximate Floor Area of Premises. 5,000 square feet of exclusive use floor area. 1.3 Lease Commencement Date/Term. On October 1, 1995, City and Tenant entered into that certain Lease Agreement ("Prior Lease") for the Premises. By execution of this Lease, the parties agree that the Prior Lease is terminated and has no further force and effect except for any obligations which specifically survive. Tenant is in occu]�nnc as of the Commencement Date under the Prior Lease terms. The Lease shall commence Ue Y)ZQ. 23 2019. Lease Term: Five (5) years; Lease Termination Date: Omb Q_ Ts, 2024 1.4 Rent. One Dollar($1.00) per year(see Section 3.1). 1.5 Security Deposit. $500.00; previously received with execution of original lease. (See Section 3.9) 1.6 Use of Premises. Premises shall be used for artists studio space, art workshops, gallery display, including but not limited to sales by artists, art fairs and art festivals. Tenant shall make good faith efforts to coordinate usage of the Premises with the City. The Tenant may allow other non-profit groups to use the facility provided the use is consistent with this section 1 Desert Art Center lease 550 North Palm Canyon Drive 55575.00001\32077669.3 and Section 9 of the Lease, "Assignment and Subletting". The Tenant is entitled to recover its cost incurred when another user leases the facility. The Tenant's use and possession of the Premises shall not be exclusive, but shall be deemed subject to the Landlord's right to permit use of the Premises by other nonprofit entities. The City reserves the right to use the Art Gallery facility for up to 35 days for programs including exhibits, lectures, and other public programs, to be scheduled annually in coordination with Tenant. Tenant has been in possession of the Premises under the Prior Lease and by execution of this Lease, Tenant agrees that the Premises and the Building were at such time in satisfactory condition and that Tenant has accepted the condition of the Premises and the Building in their "as-is" condition. 1.7 Address for Notices Tenant: Desert Art Center of Coachella Valley, Inc. Ian K. Cooke, President P.O. Box 2813 Palm Springs, CA 92263 Telephone: 760-323-7973 Landlord: City of Palm Springs David H. Ready, Esq., Ph.D., City Manager 3200 East Tahquitz Canyon Way Palm Springs, CA 92262 2.0 TERM. 2.1 Term. The term of this Lease shall commence on the date specified in Section 1.3 ("Commencement Date") and shall continue for a period of five years unless earlier terminated as provided herein. The Landlord shall have the authority, exercisable in the Landlord's sole discretion, to extend the term of this Lease for an additional five (5) years, upon such terms and conditions as the Landlord may choose. 2.2 Termination By Landlord. Landlord shall have the right to terminate this Lease effective at any time after the first anniversary of the Commencement Date, for its convenience and without cause, upon giving Tenant one (1) year written notice. Tenant hereby waives any right to receive any other compensation from Landlord, including, but not limited to, the value of Tenant's leasehold interest, loss of goodwill and relocation benefits, inverse condemnation or the taking of property and Landlord shall have no obligation to pay Tenant therefore. Landlord shall not be obligated to pay Tenant any portion, including any unamortized portion, of any costs of improvements except as the Parties may agree in writing by future amendment to this Lease. Landlord shall have the right to terminate this Lease upon thirty (30) 2 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 days' advance written notice to Tenant for non-performance of this agreement including delinquent rental payments, failure to provide annual reports as outlined in Exhibit "E', or any other breach of agreement terms (see Section 3.10). 2.3 Holding Over. Any holding over after the expiration of the term of this Lease, with the consent of Landlord, express or implied, shall be construed to be a tenancy from month to month, cancelable upon thirty (30) days' written notice, and continued at the rent in effect at the expiration of the term and upon terms and conditions as existed during the last year of the term hereof. 3.0 RENT. 3.1 Rent. Tenant shall pay to Landlord, during the term of this Lease from and after the Commencement Date as annual rental ("Annual Rental") for the Premises the sum specified in Section 1.4 hereof, unless Section 4.6 requires fair market value, in which case the Tenant shall pay the sum specified in Section 4.6, which sum shall be paid in equal monthly installments in advance on the first day of each calendar month. All rental to be paid by Tenant to Landlord shall be in lawful money of the United States of America and shall be paid without deduction or offset, prior notice or demand at the address designated in Section 1.7 hereof. 3.2 Intentionally Left Blank. 3.3 Annual Repair and Improvement List. City and Tenant shall meet with each other on each anniversary of the Commencement Date in order to develop a list of repairs and improvements of the Premises that the City intends to undertake for the following year. City and Tenant shall work in good faith in developing such list; provided however, that the City, as the owner of the Premises, retains the ultimate discretion with regard to what repairs and improvements are listed and ultimately undertaken. 3.4 Intentionally Left Blank. 3.5 Real Property Taxes. In addition to all rentals herein reserved, if required, Tenant shall pay either directly to the taxing authority or to Landlord, annual real estate taxes and assessments levied upon the Premises (including any possessory interest taxes levied under Revenue and Tax Code 107.6), as well as taxes of every kind and nature levied and assessed in lieu of, in substitution for, or in addition to, existing real property taxes. 3.6 Intentionally Left Blank. 3.7 Intentionally Left Blank. 3.8 Utilities. (a) Water. City shall pay for water utility services, since the buildings are not 3 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 separately metered from the City's Frances Stevens Park. (b) Solid Waste. Palm Springs Disposal Service picks up trash from Frances Stevens Park as part of its franchise agreement with the City. Tenant may use trash receptacles provided for Frances Stevens Park and located at the south entrance to the parking lot off of Indian Canyon Drive for normal trash disposal; however, upon request of City, Tenant shall pay for any excessive trash disposal beyond the capacity of said trash receptacles. (c) All other Utilities. Tenant shall pay before delinquency all charges for gas, heat, electricity, power, sewer, telephone service, and all other utility services (other than water and trash, as described above) used in, upon, or about the Premises by Tenant or any of its subtenants, licensees, or concessionaires during the term of this Lease. 3.9 Security Deposit. Tenant has previously paid $500.00 deposit as part of the original Lease dated October 1, 1995. Said sum shall be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the term hereof. If Tenant defaults with respect to any provisions of this Lease, including but not limited to the provisions relating to the payment of rent, Landlord may (but shall not be required to) use, apply or retain all or any part of this Security Deposit for the payment of any rent or any other sum in default, or for the payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant's default or to compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant's default. If any portion of said deposit is so used or applied, Tenant shall, within ten (10) days after demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount and Tenant's failure to do so shall be a material breach of this Lease. Landlord shall not be required to keep this Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on such Security Deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall be returned to Tenant (or, at Landlord's option, to the last assignee of Tenant's interests hereunder) at the expiration of the Lease term, provided that Landlord may retain the Security Deposit until such time as any amount due from Tenant in accordance with Paragraph 5 hereof has been determined and paid in full. Should Landlord sell its interest in the Premises during the term hereof and if Landlord deposits with the purchaser thereof the then unappropriated funds deposited by Tenant as aforesaid, thereupon Landlord shall be discharged from any further liability with respect to such Security Deposit. Nothing contained in this Section shall in any way diminish or be construed as waiving any of the Landlord's other remedies as provided in Section 10.0 hereof, or by law or in equity. 3.10 Late Payment. Tenant hereby acknowledges that late payment by Tenant to Landlord of rental or other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which is extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges. Accordingly, any payment of any sum to be paid by Tenant not paid within five (5) days of its due date shall be 4 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 subject to a five percent (5%) late charge. Landlord and Tenant agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to Landlord for its loss suffered by such late payment by Tenant. Sixty (60) days before the anniversary date each year the City shall notify the Tenant of any outstanding delinquency, which must be cured prior to the anniversary date or the City may exercise its right of termination under Section 2.2 and terminate the lease. 4.0 USE OF THE PREMISES 4.1 Permitted Use. The Landlord hereby leases to Tenant and Tenant hires from Landlord the exclusive use of the Premises, with improvements as defined herein, for the purpose of conducting thereon only the use specified in Section 1.6 of this Lease. 4.2 Prohibited Uses. Tenant shall not sell or permit to be kept, used, displayed or sold in or about the exclusive Premises: (a) pornographic or sexually explicit books, magazines, literature, films or other printed material, sexual paraphernalia, or other material which would be considered lewd, obscene or licentious, (b) any article that may be prohibited "by standard forms• of fire insurance policies; nor shall Tenant shall use, or permit to be used upon the Premises any of the foregoing, as part of any vending machine, gaming machine or video or arcade game. 4.3 Compliance with Laws. (a) Tenant shall comply with all laws, ordinances, orders, regulations, rules, resolutions and other governmental requirements relating to the use, condition or occupancy of the Premises which may now or hereafter be in force, including, without limitation, the Americans with Disabilities Act of 1990, and applicable Environmental Laws as defined herein (collectively, the "Laws"). The cost of compliance with any of the Laws (except any capital expenditures, which are the Landlord's responsibility, as provided in Section 5.3 hereof) shall be borne by Tenant. Tenant shall not use or occupy the Premises in violation of any Law or of the certificate of occupancy issued for the Building of which the Premises are a part, and shall, upon five (5) days' written notice from Landlord, discontinue any use of the Premises which is declared by any governmental authority having jurisdiction to be a violation of Law or of the certificate of occupancy. Tenant shall not use or occupy the Premises in any manner which is: (i)potentially injurious to the public health, safety or welfare, the environment or the Premises; or (ii) in a manner which creates a basis for liability of Landlord to any governmental agency or third party under any applicable statute or common law theory including, but not limited to, Environmental Laws. Tenant shall comply with any direction of any governmental authority having jurisdiction which shall, by reason of the nature of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or Landlord with respect to the Premises or with respect to the use or occupation thereof. Tenant shall not do or permit to be done anything which will invalidate or increase the cost of any fire, extended coverage or any other insurance policy covering the Building and/or property located therein and shall comply with all rules, orders,regulations and requirements of the Pacific Fire Rating Bureau or any other organization performing a similar function. Tenant shall promptly upon demand reimburse Landlord as additional rent for any additional premium charged 5 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 for such policy by reason of Tenant's failure to comply with the provisions of this Paragraph. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Building, or injure or annoy them, or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or suffer to be committed any waste in or upon the Premises and shall keep the Premises in first class condition and appearance. (b) Tenant shall comply with all federal, state and local laws, ordinances, rules and regulations relating to environmental protection or the use, analysis, generation, treatment, handling, storage, disposal, release, threatened release or transportation of any Hazardous Materials (as hereinafter defined) including, but not limited to Environmental Laws. Tenant shall not cause or permit any Hazardous Materials to be brought upon, kept, used, generated, treated, handled, released, stored or disposed in, on, under or about the Building or Premises by Tenant, its agents, employees, contractors, licensees or invitees, without the prior written consent of Landlord. The term "Hazardous Materials" as used in this Lease includes any hazardous, toxic, contaminated or polluting substance, material or waste which is regulated by any local governmental authority or special district, the State of California or the United States Government, including any material, contaminant, pollutant, or substance which is: (i) designated as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste" or "restricted hazardous waste"; (ii) flammables or explosives; (iii)petroleum or petroleum products; (iv) asbestos; (v)polychlorinated biphenyls ("PCB"), or PCB-containing materials; (vi) radioactive materials; or (vii) materials or chemicals stated to be known to cause cancer or reproductive toxicity. In addition, the term "Hazardous Materials" shall also include those materials and substances which are deemed to be hazardous under applicable case law and/or common law theories including, without limitation, theories of nuisance and tort liability. Notwithstanding the foregoing, Tenant may, without Landlord's prior consent, use any ordinary and customary materials reasonably required to be used by Tenant in the normal course of Tenant's office operation on the Premises, so long as such use is in compliance with this Lease, all applicable Laws, and does not expose the Building, Property, Premises or any neighboring properties to any material risk of contamination or damage or expose Landlord to any liability therefor. Landlord makes no representation or warranty as to the presence of Hazardous Materials in, on, under, or emanating from or to the Building or Premises. Landlord has received no written notice of any Building or Premises violation of any applicable Laws regarding Hazardous Materials. "Environmental Laws" shall mean all federal, state and local laws, statutes, ordinances, codes, rules, regulations, standards, orders and requirements pertaining to Hazardous Materials, including the handling and exposure to Hazardous Materials, and/or environmental conditions in, on,under or about the Premises, the Property, or the Building, including soil and groundwater conditions, whether now in effect or which may hereafter come into effect, including but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") (42 U.S.C. § 9601 et seq.); the Resource Conservation and Recovery Act ("RCRA") (42 U.S.C. § 6901 et seq.); the California Hazardous Waste Control Act ("HWCA") (Cal. Health & Safety Code § 25100 et seq.); and the California Hazardous Substance Account Act ("HSAA") (Cal. Health & Safety Code § 25300 et seq.). 6 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 (c) Pursuant to Section 5.3, Landlord shall be responsible for any structural alterations required to maintain compliance with any Laws, and Tenant shall be responsible for informing Landlord of the need for such alterations. id) Inspection by Certified Access Specialist. Landlord discloses that the Premises have not undergone inspection by a Certified Access Specialist as referenced in California Civil Code Section 1938 subsection(e) of which provides: "A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises." Pursuant to the foregoing Section 1938(e), Tenant acknowledges and agrees that, if Tenant wishes to have the Premises inspected by a CASp: (i) Tenant must notify Landlord on or before the date when Tenant executes this Lease pursuant to the election below; (ii) the inspection will be at Tenant's sole cost and expense; (iii) the inspection must be scheduled through Landlord and in coordination with the Building's property manager; (iv) any repairs or modifications necessary to correct any violation of construction-related accessibility standards that is noted in the CASp report shall be Tenant's responsibility; and (v) Tenant must provide a copy of the CASp report to Landlord on completion. By initialing below, Tenant represents that: Tenant wishes to have a CASp inspection of the Premises Initials: Tenant hereby waives its right to have a CASp inspection of the Premises Initials: 4.4 Siens. Tenant shall not place or permit to be placed any sign that is not in compliance with the sign ordinance of the Landlord upon the exterior or in the windows of the Premises. Any sign not constructed in accordance therewith shall be immediately removed by Tenant and, if said sign is not removed by Tenant within ten (10) days of written notice from Landlord to Tenant, then Landlord may remove and destroy said sign without Tenant's approval and without any liability to Tenant. 4.5 Parking and Common Areas. During the term of this Lease and any extension thereof, Landlord gives to Tenant for the use and benefit of Tenant, its agents, employees, customers, licensees and subtenants a non-exclusive license in common with Landlord and other present and future owners and tenants of the Property and their agents, employees, customers, licensees and subtenants, and others authorized by Landlord to use the automobile parking areas, roadways, walkways, landscaped areas, service areas, of the Property for ingress, egress and automobile parking, provided that the condemnation or other taking by any public authority, or sale in lieu of condemnation, of any or all of such parking and common areas shall not constitute a violation of this covenant. Nothing herein contained shall be deemed to prevent Landlord from using or authorizing others to use said parking and common areas. 7 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 4.6 Charitable Leases. The provisions of this Section are required by Resolution No. 14527 of the City Council. Tenant hereby represents and warrants to Landlord that Tenant is exempt from federal income taxation pursuant to Internal Revenue Code Section 501(c)(3) and that Tenant's use of the Premises as specified in Section 1.7 is a tax exempt function. Tenant hereby acknowledges that the Rent is below fair market rental rates and that the fair market rental value of the property is $138,000 per year. Prior to the execution of this Lease, Tenant has provided Landlord with a proposed schedule of programs and events for which the Tenant intends to use the Premises. Upon the Commencement Date, and on each anniversary of the Commencement Date, or such anniversary date as agreed upon by Landlord and Tenant, Tenant shall report for the upcoming year as outlined in Exhibit "E". If Landlord is not satisfied with the Tenant's performance, Landlord may terminate this Lease upon thirty (30) days' advance written notice to Tenant or increase the Monthly Rent to the fair market rental for the Premises as set forth in this paragraph. If Landlord elects to terminate this Lease as provided in this Section, Tenant hereby waives any right to receive any other compensation from Landlord, including, but not limited to, the value of Tenant's leasehold interest, loss of goodwill, relocation benefits, inverse condemnation, or the taking of property and Landlord shall have no obligation to pay Tenant therefor. In the event that Tenant ceases to be a tax-exempt organization or the use is no longer a tax-exempt function, Rent shall be due at the fair market value from the date Tenant is no longer a tax-exempt or from the date the use is no longer a tax-exempt function,whichever occurs first. 4.7 Rules and Regulations. Tenant shall faithfully observe and comply with the rules and regulations that Landlord shall from time to time promulgate and/or modify. The rules and regulations, if any, are attached hereto as Exhibit "D" ("Rules and Regulations"). Any amendment or modification of the Rules and Regulations shall be binding upon the Tenant upon delivery of a copy of such amendment or modification to Tenant. Landlord shall not be responsible to Tenant for the nonperformance of any said rules and regulations by any other tenants or occupants. The Rules and Regulations shall apply and be enforced as to all tenants in the Premises on a uniform basis. Notwithstanding the preceding paragraph, if Landlord undertakes the rental of the Premises to a third party group outside the scope of this Lease, Tenant shall not bear responsibility for the compliance with the Landlord's rules and regulations by the group. 5.0 ALTERATIONS AND REPAIRS. 5.1 Alterations and Fixtures. Tenant shall not make, or suffer to be made, any alterations to the Premises, or any part thereof, without the prior written consent of Landlord, and any alterations to the Premises, except movable furniture and trade fixtures, shall become at once a part of the realty and shall at the expiration or earlier termination of this Lease belong to Landlord. Tenant shall not in any event make any changes to the exterior of the Premises. Any such alterations shall be in.conformance with the requirements of all municipal, state, federal, and other governmental authorities, including requirements pertaining to the health, welfare or safety of employees or the public and in conformance with reasonable rules and regulations of Landlord. Any removal of alterations or furniture and trade fixtures shall be at Tenant's expense and accomplished in a good and workmanlike manner. Any damage occasioned by such removal shall be repaired at Tenant's expense so that the Premises can be surrendered in a good, clean and 8 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 sanitary condition as required by Section 5.3 hereof. Any and all fixtures and appurtenances installed by Tenant shall conform with the requirements of all municipal, state, federal, and governmental authorities, including requirements pertaining to the health, welfare, or safety of employees or the public. Upon completion of construction of the alterations, Tenant shall submit to Landlord evidence satisfactory to Landlord of the cost of said alterations ("Improvement Costs"). 5.2 Maintenance. Tenant shall be responsible for the minor cosmetic maintenance of the Premises, such as vacuuming, window cleaning, mopping, painting, light bulb changes, regular deep cleaning of the Premises, and small drywall repairs. In addition, Tenant shall periodically sweep and clean the sidewalks adjacent to the Premises, in order to keep the sidewalks in a clean, safe and neat condition. 5.3 Repair. Landlord shall be responsible for any and all repairs to the Premises, including, without limitation, structural repairs, exterior painting, broken windows, plumbing repairs, repairs to the HVAC system, the roof and any exterior improvements. Tenant hereby waives all right to make repairs at the expense of Landlord, and Tenant hereby waives all rights provided for by the Civil Code of the State of California to make said repairs. By entering into the Premises, Tenant shall be deemed to have accepted the Premises as being in tenantable condition and repair, and Tenant agrees on the last day of said term or sooner termination of this Lease to surrender the Premises with appurtenances, in the same condition as when received and in a good, clean and sanitary condition, reasonable use and wear thereof and damage by fire, act of God or by the elements excepted. Upon Tenant's possession of the Premises, Tenant shall be deemed to have accepted the Premises as being in tenantable condition and repair. Tenant agrees that it will not, nor will it authorize any person to, go onto the roof of the building of which the Premises are a part without the prior written consent of Landlord. Landlord shall respond, within a reasonable time period, to Tenant's non-emergency requests for repairs. Landlord shall respond 24 hours a day, 7 days a week for emergency repairs to the Premises. For purposes of this section, "emergency" shall mean a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, or property. 5.4 Free from Liens. Tenant shall keep the Premises free from any liens arising out of any work performed, material furnished, or obligation incurred by Tenant or alleged to have been incurred by Tenant. 5.5 Additional Consideration for Lease. As additional consideration for renting the Premises, Tenant agrees to perform the Property management obligations in accordance with Exhibit "E" attached hereto. 6.0 INSURANCE AND INDEMNIFICATION. 6.1 Insurance Provided by Landlord. Landlord shall maintain fire and extended coverage insurance throughout the term of this Lease in an amount equal to at least ninety percent (90%) of the replacement value of the Tenant's building on the Premises, together with such other insurance, coverages and endorsements as may be required by Landlord's lender, or as Landlord 9 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 may determine in its sole discretion. Tenant hereby waives any right of recovery from Landlord, its officers and employees, and Landlord hereby waives any right of loss or damage (including consequential loss) resulting from any of the perils insured against as a result of said insurance. Tenant agrees to pay to Landlord its pro rata share of the cost of said insurance to be determined by the relationship that the gross floor area of the Premises bears to the total gross leasable floor area of the building or buildings for which such policy relates. 6.2 Insurance Provided by Tenant. (a) Tenant to Provide Personal Property Insurance. Tenant, at its expense, shall maintain fire and extended coverage insurance written on a per occurrence basis on its trade fixtures, equipment, personal property and inventory within the Premises from loss or damage to the extent of their full replacement value. (b) Tenant to Provide Liability Insurance. During the entire term of this Lease, the Tenant shall, at the Tenants sole cost and expense, but for the mutual benefit of Landlord and. Tenant, maintain comprehensive general liability insurance insuring against claims for bodily injury, death or property damage occurring in, upon or about the Premises and on any sidewalks directly adjacent to the Premises written on a per occurrence basis in a combined single limit of ONE MILLION DOLLARS ($1,000,000.00) for bodily injury, death, and property damage and TWO MILLION DOLLARS in the aggregate, however, if Landlord so elects Landlord may provide such insurance and, in such event, Tenant agrees to pay its pro rata share of the cost of said insurance on the same basis as provided in Section 6.1 above. (c) Tenant to Provide Worker's Compensation Insurance. If applicable, Tenant shall, at the Tenants sole cost and expense, maintain a policy of worker's compensation insurance in an amount as.will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both the Tenant and the Landlord against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the Tenant in the course of conducting Tenant's business in the Premises. (d) General Provisions Applicable to Tenant's Insurance. All of the policies of insurance required to be procured by Tenant pursuant to this Section 6.2 shall be primary insurance and shall name the Landlord, its officers, employees and agents as additional insureds. The insurers shall waive all rights of contribution they may have against the Landlord, its officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing 30 days prior written notice by registered mail to the Landlord. Prior to the Commencement Date or such earlier date as Tenant takes possession of the Premises for any purpose; and at least 30 days prior to the expiration of any insurance policy, Tenant shall provide Landlord with certificates of insurance or appropriate insurance binders evidencing the above insurance coverages written by 10 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 insurance companies acceptable to Landlord, licensed to do business in the state where the Premises are located and rated A: VII or better by Bests Insurance Guide. In the event the Risk Manager of Landlord ("Risk Manager") determines that (i) the Tenant's activities in the Premises creates an increased or decreased risk of loss to the Landlord, (ii) greater insurance coverage is required due to the passage of time, or (iii) changes in the industry require different coverages be obtained, Tenant agrees that the minimum limits of any insurance policy required to be obtained by Tenant may be changed accordingly upon receipt of written notice from the Risk Manager, provided that Tenant shall have the right to appeal a determination of increased coverage by the Risk Manager to the City Council of Landlord within ten (10) days of receipt of notice from the Risk Manager. Landlord and Tenant hereby waive any rights each may have against the other on account of any loss or damage occasioned by property damage to the Premises, its contents, or Tenants trade fixtures, equipment personal property or inventory arising from any risk generally covered by insurance against the perils of fire, extended coverage, vandalism, malicious mischief, theft, sprinkler damage, and earthquake sprinkler leakage. Each of the parties, on behalf of their respective insurance companies insuring such property of either Landlord or Tenant against such loss, waives any right of subrogation that it may have against the other. The foregoing waivers of subrogation shall be operative only so long as available in California and provided further that no policy is invalidated thereby. 6.3 Indemnification of Landlord. Tenant, as a material part of the consideration to be rendered to Landlord under this Lease, hereby waives all claims against Landlord for damage to equipment or other personal property, trade fixtures, leasehold improvements, goods, wares, inventory and merchandise, in, upon or about the Premises and for injuries to persons in or about the Premises, from any cause arising at any time. Tenant agrees to indemnify the Landlord, its officers, agents, public officials, volunteers, and employees against, and will hold and save them and each of them harmless from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities, (herein "claims or liabilities") that may be asserted or claimed by any person, firm or entity arising out of or in connection with the performance of the work, operations or activities of Tenant, its agents, employees, subcontractors, or invitees, provided for herein, or arising from the use of the Premises or the parking and Common Area by Tenant or its employees and customers, or arising from the failure of Tenant to keep the Premises in good condition and repair, as herein provided, or arising from the negligent acts or omissions of Tenant hereunder, or arising from Tenant's negligent performance of or failure to perform any term, provision covenant or condition of this Lease, whether or not there is concurrent passive or active negligence on the part of the Landlord, its officers, agents, public officials, volunteers, or employees but excluding such claims or liabilities arising from the sole negligence or willful misconduct of the Landlord, its officers, agents, public officials, volunteers, or employees,who are directly responsible to the Landlord, and in connection therewith: (a) Tenant will defend any action or actions filed in connection with any of said claims or liabilities and will pay all costs and expenses, including legal costs and attorneys' fees incurred in connection therewith; 11 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 (b) Tenant will promptly pay any judgment rendered against the Landlord, its officers, agents, public officials, volunteers, or employees for any such claims or liabilities arising out of or in connection with the negligent performance of or failure to perform such work, operations or activities of Tenant hereunder, and Tenant agrees to save and hold the Landlord, its officers, agents, public officials, volunteers, and employees harmless therefrom; (c) In the event the Landlord, its officers, agents. public officials, volunteers, or employees is made a party to any action or proceeding filed or prosecuted against Tenant for such damages or other claims arising out of or in connection with the negligent performance of or failure to perform the work, operation or activities of Tenant hereunder, Tenant agrees to pay to the Landlord, its officers, agents, public officials, volunteers, or employees, any and all costs and expenses incurred by the Landlord, its officers, agents. public officials, volunteers, or employees in such action or proceeding, including but not limited to, legal costs and attorneys' fees. 7.0 ABANDONMENT AND SURRENDER. 7.1 Abandonment. Tenant shall not vacate or abandon the Premises at any time during the term of this Lease; and if Tenant shall abandon, vacate or surrender the Premises or be dispossessed by process of law, or otherwise, any personal property belonging to Tenant and left on the Premises shall be deemed to be abandoned, at the option of Landlord, except such property as may be mortgaged to Landlord. 7.2 Surrender of Lease. The voluntary or other surrender of this Lease by Tenant or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Landlord, terminate all or any existing subleases or sub-tenancies, or may, at the option of Landlord, operate as an assignment to it of any or all of such subleases or sub-tenancies. 8.0 DAMAGE AND DESTRUCTION OF PREMISES. In the event of(a) partial or total destruction of the Premises during the term of this Lease, which requires repairs to the Premises, or(b) the Premises being declared unsafe or unfit for occupancy by any authorized public authority for any reason other than Tenant's act, use or occupation, which declaration requires repairs to the Premises, Landlord shall, at its option, make such repairs. Any partial or total destruction of the Premises (including any destruction necessary in order to make repairs required by any declaration made by any public authority) may, at Tenant's election, annul or void this Lease. 9.0 ASSIGNMENT AND SUBLETTING. Tenant shall not assign this Lease or sublet the Premises or any interest therein, without the prior written consent of Landlord, which consent shall not be unreasonably withheld. For purposes of this Lease, an assignment shall be deemed to include the transfer to any person or group of persons acting in concert of more than twenty five percent (25%) of the present ownership and/or control of Tenant, taking all transfers into account on a cumulative basis. Landlord may withhold its consent to an assignment or 12 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 sublease to a proposed assignee or sub-lessee, and Tenant agrees that Landlord shall not be unreasonable for doing so, unless all the following criteria are met: (a) The proposed assignee's or sub-lessee's general financial condition, including liquidity and net worth, verified by audited financial statements prepared by a Certified Public Accountant in conformity with Generally Accepted Accounting Principles is equal to or greater than that of Tenant; (b)the proposed assignee or sub-lessee has a demonstrated merchandising capability equal to or greater than that of Tenant as to the use for which the Premises are leased; (c) the proposed assignee or sub-lessee is morally and financially responsible; (d) the failure of tenant's use of the Premises to fit the business plan of Landlord to promote tourism to the City of Palm Springs; and (e) the proposed assignee or subtenant is exempt from federal income taxation pursuant to Internal Revenue Code Sections 501(c) (1) and/or 501(c) (3) and the proposed assignee's or subtenant's proposed use of the Premises is a tax exempt function. Any such assignment shall be subject to all of the terms and conditions of this Lease and the proposed assignee shall assume the obligations of Tenant under this Lease in writing in form satisfactory to Landlord. The proposed assignee shall simultaneously provide to Landlord an estoppel certificate in the form described in Exhibit 'F" hereafter. Consent by Landlord to one assignment, subletting, occupation or use by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by another person. Any assignment or subletting without the prior written consent of Landlord shall be void, shall constitute a material breach of this Lease, and shall, at the option of Landlord, terminate this Lease. Neither this Lease nor any interest therein shall be assignable as to the interest of Tenant by operation of law. Landlord shall be under no obligation to consider a request for Landlord's consent to an assignment until Tenant shall have submitted in writing to Landlord a request for Landlord's consent to such assignment together with audited financial statements of Tenant and the proposed assignee, a history of the proposed assignee's business experience and such other information as required by Landlord to verify that the criteria for assignment, as set forth herein are met. If Landlord approves such assignment, Tenant shall pay to Landlord one-half (1/2) of any consideration received by Tenant for such assignment. 10.0 CURE AND REMEDIES. 10.1 Default by Tenant. In addition to the defaults described in Section 9.0 hereinabove, the occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant: (a) the failure to pay any rent or other payment required hereunder to or on behalf of Landlord more than three (3) days after written notice from Landlord to Tenant that Tenant has failed to pay rent when due; (b) the vacation or abandonment of the Premises by Tenant. Landlord may, at its discretion, allow Tenant to cure any defaults within sixty (60) days or any other agreed upon terms (in writing) without waiving any future right to terminate the lease for any other breach of the lease. Notwithstanding any of the foregoing, the breach of this Lease by Tenant, or an abandonment of the Premises by Tenant, shall constitute a termination of this Lease, and Tenant shall not be entitled to any reimbursement of the Security Deposit. 13 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 10.2 No Waiver. Acceptance of rental payment shall not be deemed a waiver of any default or a waiver of any of Landlord's remedies. 10.3 In the event of any such default by Tenant, in addition to any other remedies available to Landlord at law or in equity, Landlord shall have the immediate option to terminate this Lease and all rights of Tenant hereunder. In the event that Landlord shall elect to so terminate this Lease then Landlord may recover from Tenant: (a) the worth at the time of award of any unpaid rent which had been earned at the time of such termination; plus (b) the worth at the time of award of the amount by which the unpaid rent which would have been reasonably earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided;plus (c) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; plus (d) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom. As used in Subparagraphs 10.3 (a) and (b) above, the "worth at the time of award" is computed by allowing interest at the maximum rate permitted by law per annum. As used in Subparagraph 10.3(c) above, the "worth at the time of award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent(1%). 10.4 In the event of any such default by Tenant, Landlord shall also have the right, with or without terminating this Lease, to re-enter the Premises and remove all persons and property from the Premises; such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant. No re- entry or taking possession of the Premises by Landlord pursuant to this Subparagraph 10.4 shall be construed as an election to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. 10.5. Landlord shall also have the remedy described in California Civil Code Section 1951.4 (i.e., the right to continue the Lease in effect and recover rent as it becomes due). In such event, Landlord may continue this Lease in full force and effect, and this Lease will continue in effect as long as Landlord does not terminate Tenant's right to possession, and Landlord shall have the right to collect rent when 14 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 due. During the period Tenant is in default, Landlord can enter the Premises and relet them, or any part of them, to third parties for Tenant's account. Tenant shall be liable immediately to Landlord for all costs Landlord incurs in reletting the Premises, including, without limitation, brokers' commissions, expenses. of remodeling the Premises required by the reletting, and like costs. Reletting can be for a period shorter or longer than the remaining term of this Lease. Tenant shall pay to Landlord the rent due under this Lease on the dates the rent is due, less the rent Landlord receives from any reletting. No act by Landlord allowed by this Subparagraph 10.5 shall terminate this Lease unless Landlord notifies Tenant that Landlord elects to terminate this Lease. If Landlord elects to relet the Premises as provided in this Subparagraph 10.4, rent that Landlord receives from reletting shall be applied to the payment of: (a) First, any indebtedness from Tenant to Landlord other than rent due from Tenant; (b) Second, all costs, including for maintenance, incurred by Landlord in reletting; (c) Third, rent due and unpaid under this Lease. After deducting the payments referred to in this Paragraph, any sum remaining from the rent Landlord receives from reletting shall be held by Landlord and applied in payment of future rent as rent becomes due under this Lease. In no event shall Tenant be entitled to any excess rent received by Landlord. If, on the date rent is due under this Lease, the rent received from the reletting is less than the rent due on that date, Tenant shall pay to Landlord, in addition to the remaining rent due, all costs, including for maintenance, Landlord incurred in reletting that remain after applying the.rent received from the reletting as provided in this Subparagraph 25(d). 10.5 All rights, options and remedies of Landlord contained in this Lease shall be construed and held to be cumulative, and no one of them shall be exclusive of the other, and Landlord shall have the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by law or in equity, whether or not stated in this Lease. No waiver of any default of Tenant hereunder shall be implied from any acceptance by Landlord of any rent or other payments due hereunder or any omission by Landlord to take any action on account of such default if such default persists or is repeated. Any waiver must be in writing and such express waiver shall not affect defaults other than as specified in the waiver. The consent or approval of Landlord to or of any act by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's consent or approval to or of any subsequent similar acts by Tenant. 11.0 MISCELLANEOUS. 15 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 11.1 Reservation of Right to Modify Property. Landlord hereby reserves the right (but not the obligation) to renovate, modernize, rehabilitate, expand, reduce, reconfigure, enclose and/or otherwise alter all or any portion of the Premises (collectively "Modifications"), in such manner and at such time or times, throughout the term of this Lease, as Landlord may, in its sole and absolute discretion, deem to be in the best interests of the Property. In connection with any and all such Modifications, Landlord may enter the Premises to the extent reasonably required by Landlord to pursue and complete such Modifications. In addition, Landlord may temporarily close portions of the parking and common areas and cause temporary obstructions in connection with any Modifications. Tenant agrees that under no circumstances shall the Modifications as to any portion of the Property or the construction activity that takes place in the course of making the Modifications, or any aspect thereof, including Landlord's entry into the Premises, constitute an eviction or partial eviction of Tenant or a breach of Tenant's right to quiet enjoyment or of any other provision of this Lease. 11.2 Entry and Inspection. Tenant shall permit Landlord and its agents to enter into and upon the Premises at all reasonable times for the purpose of inspecting the same for the purpose of maintaining or repairing the Premises as required by the terms of this Lease or for the purpose of posting notices of non-liability for alterations, additions or repairs, or for the purpose of placing upon the property in which the Premises are located any usual or ordinary "For Sale" signs or any signs for public safety as determined by Landlord. 11.3 Estoppel Certificate. If, as a result of a proposed sale, assignment, or hypothecation of the Premises or the land thereunder by Landlord, or at any other time, an estoppel certificate shall be requested of Tenant, Tenant agrees, within ten (10) days thereafter, to deliver such estoppel certificate in the form attached hereto as Exhibit "F" addressed to any existing or proposed mortgagee or proposed purchaser, and to the Landlord. Tenant shall be liable for any loss or liability resulting from any incorrect information certified, and such mortgagee and purchaser shall have the right to rely on such estoppel certificate and financial statement. 11.4 Jurisdiction,Venue and Mediation. The parties hereto agree that the State of California is the proper jurisdiction for litigation of any matters relating to this Lease, and service mailed to the address of tenants set forth herein shall be adequate service for such litigation. The parties further agree that Riverside County, California is the proper place for venue as to any such litigation and Tenant agrees to submit to the personal jurisdiction of such court in the event of such litigation. Prior to any claim or litigation for breach of this agreement, Landlord and Tenant agree to non-binding mediation and agree to split the cost for such mediation. 11.5 Force Majeure. If either party hereto shall be delayed or prevented from the performance of any act ,including, but not limited to reason of acts of God, strikes, lockouts, labor troubles, inability to procure materials, usually severe weather, fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargos, wars, and/or acts of any government agency, restrictive governmental laws or regulations or other cause without fault and beyond the control of the party obligated (financial inability excepted), performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall 16 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 be extended for a period equivalent to the period of such delay as determined by the Landlord, provided such party provides the other party written notice of such event within ten(10) days of the commencement of the prompt payment of any rental or other charge required of Tenant hereunder except as may be expressly provided elsewhere in this Lease. Upon receipt of written notice of delay from the Tenant, Landlord shall ascertain the facts and the extent of delay, and extend the time for performing the acts required for the period of the enforced delay when and if in the judgment of the Landlord such delay is justified. The Landlord's determination shall be final and conclusive upon the Parties to this Lease. 11.6 Partial Invalidity. If any term, covenant, condition or provision of this Lease is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereof. 11.7 Successors in Interest. The covenants herein contained shall, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of all the parties hereto; and all of the parties hereto shall be jointly and severally liable hereunder. 11.8 No Oral Agreements. This (i) Lease covers in full each and every agreement of every kind or nature whatsoever between the parties hereto concerning this Lease, (ii) supersedes any and all previous obligations, agreements and understandings, if any, between the parties, oral or written, and (iii) merges all preliminary negotiations and agreements of whatsoever kind or nature herein. Tenant acknowledges that no representations or warranties of any kind or nature not specifically set forth herein have been made by Landlord or its agents or representatives. 11.9 Authority. In the event that Tenant is a corporation or a partnership, each individual executing this Lease on behalf of said corporation or said partnership, as the case may be, represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of said corporation or partnership, in accordance with a duly adopted resolution of the Board of Directors, if a corporation, or in accordance with the Partnership Agreement if a partnership, and that this Lease is binding upon said corporation or partnership in accordance with its terms. Tenant represents and warrants to Landlord that the entering into this Lease does not violate any provisions of any other agreement to which Tenant is bound. 11.10 Relationship of Parties. The relationship of the parties hereto is that of Landlord and Tenant, and it is expressly understood and agreed that Landlord does not in any way or for any purpose become a partner of Tenant in the conduct of Tenant's business or otherwise, or a joint venture with Tenant. 11.11 Covenant Against Discrimination. In connection with its performance under this Agreement, Contractor shall not discriminate against any employee or applicant for employment because of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin (i.e., place of origin, immigration status, cultural or linguistic characteristics, or 17 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 ethnicity), sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition (each a"prohibited basis"). Contractor shall ensure that applicants are employed, and that employees are treated during their employment, without regard to any prohibited basis. As a condition precedent to City's lawful capacity to enter this Agreement, and in executing this Agreement, Contractor certifies that its actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any Contractor activity, including but not limited to the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship; and further, that Contractor is in full compliance with the provisions of Palm Springs Municipal Code Section 7.09.040, including without limitation the provision of benefits, relating to non-discrimination in city contracting. 11.12 Notices. Wherever in this Lease it shall be required or permitted that notice and demand be given or served by either party to this Lease to or on the other, such notice or demand shall be given or served in writing and shall not be deemed to have been duly given or served unless in writing, and personally served or forwarded by certified mail, postage prepaid, addressed, if to Landlord, as specified in Section 1.7. Either party may change the address set forth herein by written notice by certified mail to the other. Any notice or demand given by certified mail shall be effective one (1) day subsequent to mailing. 11.13 Waiver. No delay or omission in the exercise of any right or remedy by a non-defaulting party shall impair such right or remedy or be construed as a waiver. A parry's consent to or approval of any act by the other party requiring the party's consent or approval shall not be deemed to waive or render unnecessary the other party's consent to or approval of any subsequent act. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Lease. 11.14 Exhibits and Addenda. The Exhibits and any other attachments to this Lease are made a part hereof as if fully set forth herein. 11.15 Conflict of Interest. Tenant acknowledges that no officer or employee of the Landlord has or shall have any direct or indirect financial interest in this Lease nor shall Tenant enter into any agreement of any kind with any such officer or employee during the term of this Lease and for one year thereafter. Tenant warrants that Tenant has not paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining this Lease. 11.16 California Labor Code Requirements. Tenant is aware of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., which require the payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects. If Tenant performs any "maintenance" with regard to the Premises, and if the total compensation is more than $15,000 or more, Tenant agrees to fully comply with such Prevailing Wage Laws, if applicable. Tenant shall defend, indemnify and hold the Landlord, its elected officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties, or interest arising out of any failure or alleged failure to comply with the Prevailing Wage 18 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 Laws. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Tenant shall therefore comply with such Labor Code sections to fullest extent required by law. It shall be mandatory upon the Tenant and all of Tenant's contractors to comply with all California Labor Code provisions, which include but are not limited to prevailing wages, employment of apprentices, hours of labor and debarment of contractors and subcontractors. 11.17 Attorneys' Fees. In the event that any action or proceeding is commenced to regarding this Lease, the prevailing party in such action or proceeding, in addition to all other relief to which it may be entitled, shall be entitled to recover from the other party the prevailing party's costs of suit and reasonable attorneys' fees. The prevailing party shall be as determined by the court in accordance with Code of Civil Procedure Section 1032. The attorney's costs and expert fees recoverable pursuant to this Section include, without limitation, attorney's costs and expert fees incurred on appeal and those incurred in enforcing any judgment rendered. Attorney's costs and fees may be recovered as an element of costs in the underlying action or proceeding or in a separate recovery action. [SIGNATURES ON NEXT PAGE] 19 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 IN WITNESS WHEREOF, the parties have duly executed this Lease together with the herein referred to Exhibits which are attached hereto, on the day and year first above written in Palm Springs, California. "City" ATTEST: CITY OF PALM SPRINGS, a municipal co r oration By. _ By. \ Cit erk � � Its: APPROVED AS TO FORM: City A mey APPROVED BY C17Y COUNCIL "Tenant' MoT 10 /,c-2a_lp DESERT ART CENTER, INC., a California non-p fit 501(c)(3) corporation Its: pkxs t iJ 6-ti l By: Its: 20 Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 EXHIBIT"A" LEGAL DESCRIPTION OF THE PREMISES That certain property in the City of Palm Springs, County of Riverside, State of California, being generally the property known as Frances Stevens'Park, described as follows: That portion of the Southeast quarter of the Southeast quarter of Section 10, Township 4 South, Range 4 East, San Bernardino Base and meridian, described as follows: Beginning at a point on the south line of said Section 10, Township 4 South, Range 4 East, San Bernardino Base and Meridian, 30 feet West of the Southeast corner thereof; thence South 89' 42' West on said South line, 297.40 feet; thence North on the East line of a public highway 550.4 feet; thence North 89' 42' East 296.75 feet to a point distance 30 feet, measured at a right angle, from the East line of said Section 10; thence South 0° 2' 30" East and parallel with said East line, 550.4 feet to the point of beginrring. Said property is also situated in the City of Palm Springs, and known as Buildings A and B of the former Senior Center, 550 North Palm Canyon Drive. Desert Art Center Lease 550 North Palm Canyon Drive A-1 55575.00001\32077669.3 EXHIBIT "B" PLOT PLAN OF DEMISED PREMISES SITE MPROVE gLQgTH WIN(, DFSFRT- ART CENTER) -N • Lai ..... .... I 1 1 7 .1- 1_,. 1 1 L Building B 7T B-I Desert Art Center Lease 550 North Palm Canyon Drive 55575.00001\32077669.3 EXHIBIT"C" INTENTIONALLY LEFT BLANK D-I Desert Art Center Lease 550 North Palm Canyon Drive EXHIBIT M RULES AND REGULATIONS 1. All loading and unloading of goods shall be done only at the times, in the areas and through the entrances reasonably designated for such purposes by Landlord. 2. The delivery or shipping of merchandise, supplies and fixtures to and from the Premises shall be subject to such rules and regulations as in the reasonable judgment of Landlord are necessary for the proper operation of the Premises or of the Property generally. 3. All of Tenant's refuse and rubbish shall be removed to central trash bins located in the Property, at Tenant's sole cost and expense. 4. No radio or television or other similar device audible outside the Premises shall be installed without obtaining in each instance the written consent of Landlord. No aerial shall be erected on the roof or exterior walls of the Premises or on the grounds of the Property without first obtaining in each instance the written consent of Landlord which consent shall not be unreasonably withheld or delayed. Any aerial so installed without such written consent shall be subject to removal without notice at any time. 5. No loudspeakers, televisions, phonographs, radios or other devices shall be used in a manner so as to be heard or seen outside of the Premises without first obtaining in each instance written consent of Landlord. 6. The outside sidewalks and loading areas immediately adjoining the Premises shall be kept clean and free from dirt and rubbish by Tenant to the reasonable satisfaction of Landlord, and Tenant shall not place or permit any obstructions or merchandise in such areas, except to the extent specifically permitted by the provisions of Tenant's Lease. 7. Tenant shall not burn any trash or garbage of any kind in or about the Premises or the Property generally. 8. Tenant will not allow animals, except service animals in, about or upon the Premises. 9. Tenant shall not use, and shall not allow anyone else to use, the Premises as a habitation. Such prohibition shall include, without limitation, sleeping, eating or bathing except for cots provided in the Actors Equity dressing rooms solely for use by performers and required under the Equity contract. 10. Tenant shall not place any rubbish or other matter outside any building within the D-2 Desert Art Center Lease 550 North Palm Canyon Drive Property, except in such containers as are authorized from time to time by Landlord. 11. Tenant shall provide for professional janitorial cleaning of the men's and women's restrooms prior to performances in the auditorium, and at other times as may be necessary by heavy use. D-3 Desert Art Center Lease 550 North Palm Canyon Drive EXHIBIT"E" TENANT'S PROPERTY MANAGEMENT OBLIGATIONS As additional consideration for this Lease, Tenant agrees to allow the City use of the Art Gallery facility for up to 35 days for programs by the City's Public Arts Commission or other City Departments including exhibits, lectures, and other public programs, to be scheduled annually in coordination with Tenant. Tenant will reinvest all "net annual income" generated from its business and productions on the Premises into facility improvements and/or program enhancements directly related to the Premises. "Net Annual Income" shall mean the excess of(i) all money received during a specific calendar year as a result of the operation of the art gallery and classrooms and business on the Premises and the sale of goods and services at the Premises determined in accordance with generally accepted accounting principles consistently applied minus (ii) all operating expense directly related to the Premises determined under generally accepted accounting principles consistently applied. In no event shall Tenant be required to reinvest earnings in the project in violation of its nonprofit status. The City may review and audit the Tenant's books and records upon reasonable notice to assure compliance with this paragraph. Tenant also agrees to work with the City and other non-profit arts groups in order to develop a well-coordinated annual calendar of productions and special events at the Frances Stevens Festival Park in order to avoid an overly intensive use of the facilities and the creation of vehicular parking and traffic congestion problems. Tenant will submit an annual report detailing its programming and number of participants, and accounting of funds spent on maintenance. Annual Report shall provide the following information- Intended Programming and Schedule of Upcoming Year Documentation of 5010 non-profit status Breakdown of Prior Year Revenue • Art Sales • Class and Workshop Revenues • Grants • Donation • Totallncome/Revenue Cash Reserve Balance Accounting of funds spent on building maintenance E-1 Desert Art Center Lease EXHIBIT "F" ESTOPPEL CERTIFICATE Tenant: DESERT ART CENTER, INC. Landlord: CITY OF PALM SPRINGS, a municipal corporation Date of Lease: Premises: 550 North Palm Canyon Drive, Buildings "A" and `B" To: Desert Art Center of the Coachella Valley. Inc. Ian K. Cooke, President P. O. Box 2813 Palm Springs. CA 92263 The undersigned hereby certifies as follows: 1. The undersigned is the tenant ("Tenant") under the above-referenced lease ("Lease") covering the above-referenced premises ("Premises"). 2. The Lease constitutes the entire agreement between landlord and Tenant with respect to the Premises and the Lease has not been modified, changed, altered or amended in any respect except as set forth.above. 3. The term of the Lease commenced on , 20_ and, including any presently exercised option or renewal term, will expire on 20 . Tenant has accepted possession of the Premises and is the actual occupant in possession thereof and has not sublet, assigned or hypothecated its leasehold interest. All improvements to be constructed on the Premises by Landlord have been completed and accepted by Tenant and any tenant construction allowances have been paid in full. 4. As of this date, to the best of Tenant's knowledge, there exists no breach or default, nor state of facts which, with notice, the passage of time, or both, would result in a breach or default on the part of either Tenant or Landlord. To the best of Tenant's knowledge, no claim, controversy, dispute, quarrel or disagreement exists between Tenant and Landlord. 5. Tenant is currently obligated to pay Rent in installments of $ per month and such monthly installments have been paid not more than one month in advance. To the best of Tenant's knowledge, no other rent has been paid in advance and Tenant has no claim or defense against Landlord under the Lease and is asserting no offsets or credits against either the rent or Landlord. Tenant has no claim against Landlord for any security F-1 Desert Art Center Lease 550 North Palm Canyon Drive or other deposits except$500 which was paid pursuant to the Lease. 6. Tenant has no option or preferential right to lease or occupy additional space within the Property of which the Premises are a part. Tenant has no option or preferential right to purchase all of any part of the Premises nor any right or interest with respect to the Premises other than as Tenant under the Lease. Tenant has no right to renew or extend the term of the Lease except as set forth in the Lease. 7. Tenant has made no agreements with Landlord or its agent or employees concerning free rent, partial rent, rebate of rental payments or any other type of rent or other concession except as expressly set forth in the Lease. 8. There has not been filed by or against Tenant a petition in bankruptcy, voluntary or otherwise, any assignment for the benefit of creditors, or any petition seeking reorganization or arrangement under the bankruptcy laws of the United States, or any state thereof, or any other action brought under said bankruptcy laws with respect to Tenant. 9. All insurance which Tenant is required to maintain under the Lease has been obtained by Tenant and is in full force and effect and all premiums with respect thereto have been paid. Dated this day of 20 By: Its: F-2 Desert Art Center Lease 550 North Palm Canyon Drive