HomeMy WebLinkAboutA5410 - CLEAN ENERGY INC LEASE/EASEMENT OF CNG FUELING STATION4ALM
City oPalm f Springs
Department of Aviation
4A7to,4rt Palm Springs International Airport
RN�P 3400 E. Tahquitx Canyon War, Suite 1 • Palm Springs, California 262
TEL: s 6Qj 318 3800 • F.�1: , (60j 31�i 3815 • TDD: r-60864 :� CEIVED
NOV 19 2021
November 8, 2021 BY: DEPT OF AVIATION
Mr. Chad Lindholm
Vice President
Clean Energy
4675 MacArthur Court, Suite 800
Newport Beach, CA 92660
RE: PSP Lease Option No. 2 - Agreement A5410 - Clean Energy
Dear Mr. Hogan:
The City of Palm Springs received your email dated July 27, 2021 requesting
to exercise the second and final five (5) year Option to extend the term of the
agreement, per Section 1. 2 of the Non -Exclusive Use Lease and Easement
for operating the CNG vehicle fueling station at Palm Springs International
Airport. This option will be effective from January 1, 2022 through December
31, 2026. The same conditions of the current lease will remain in effect, with
the next CPI adjustment due on July 1, 2022.
Moreover, the City Council is committed to providing clean energy options and
the partnership that your firm offers has been a mutual benefit. If you consent to
this extension, please sign below on both copies of this letter, return one original
to this office and keep one for your files.
Best Regards,
Justin Clifton
City Manager
Cc: Ulises Aguirre, Director of Aviation
Anthony Mejia, City Clerk
Jeff Ballinger, City Attorney
On behalf of Clean Energy, Inc.
I consent to this five (5) year extension
as provided in this letter.
Chad Lindholm
Vice President
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4 -� City of Palm Springs
U N Department ofA%iation
Palm Springs International Airport
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October 6, 2016
Mr. Jack Hogan
Regional Manager
Clean Energy, Inc.
3020 Old Ranch Parkway, Suite 200
Seal Beach, CA 90470
RE: PSP Lease Option No. 1—Agreement A5410
Approved —July 1, 2007
Dear Mr. Hogan:
The City of Palm Springs would like to extend to you a 60 day notice to exercise
lease extension Option 1, per Section 1.2 of the non-exclusive Use Agreement
for operating the CNG vehicle fueling station at Palm Springs International
Airport. This option will be effective from January 1, 2017 through December 31,
2021. The same conditions of the current lease will remain in effect, with the
next CPI adjustment due on July 1, 2017.
Moreover, the City Council is committed to providing clean energy options and
the partnership that your firm offers has been a mutual benefit. If you consent to
this extension, please sign below on both copies of this letter,-return one original
to this office and keep one for your files.
Best Regards, On behalf of Clean Energy, Inc.
I consent to this one year extension
' as provided in this letter.
David H. Read ^_
City Manager
�py,
Cc:/O Thomas Nolan, Director of Aviation Sv PO -sa /e 5
James Thompson, City Clerk
Douglas C. Holland, City Attor ,
Post Office Box 2743 • Palm Springs, California 92263-2743
Rr-; 0
LEASE
AND EASEMENT
CITY OF PALM SPRINGS,
a California charter city,
Doing Business As
PALM SPRINGS INTERNATIONAL AIRPORT
"Landlord"
and
CLEAN ENERGY Inc-
a California corporation
"Tenant"
(Supersedes Lease and Easement executed by City
on July 6, 2007 with effective date of July 1, 2007)
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inlllid.lJv it I.�n,�ri�n n—cp-.
LEASE
THIS NON-EXCLUSIVE LEASE ("Lease and Easement") AND EASEMENT
("Easement") is made and entered into this 1st day of July, 2007, by and between the
City of Palm Springs ("City"), a California charter city, dba Palm Springs International
Airport (PSP"), ("Landlord"), and Clean Energy, Inc., a California corporation ('Tenant').
RECITALS
A. The operation of a CNG vehicle fueling station in the City and at PSP will
promote and encourage the general public interest in the use of clean burning
alternative fuels and is consistent with national efforts to enhance public awareness and
support for air quality programs.
B. The nature of the CNG vehicle fueling station use is such that it will serve to
provide clean burning alternative fuels for agencies involved in the aviation industry, the
City of Palm Springs, and local and regional businesses and government agencies with
broader resources and a desire to utilize environmentally safe fuel alternatives. The
availability of CNG fuels will attract such business operations to PSP and PSP lands,
and thereby assist in the making of the Airport as self-sustaining as possible.
AGREEMENT
NOW THEREFORE, the parties hereto agree as follows:
1. SUMMARY OF LEASE AND EASEMENT. Certain lease and easement
provisions are presented and summarized in this Section 1 of the Lease and Easement
and generally represent the terms of the agreement of the parties, subject to further
definition and elaboration in subsequent provisions of this Lease and Easement. In the
event of any conflict between the provisions of this Section and any subsequent
provisions of this Lease and Easement, the subsequent provisions shall control.
1.1 Demised Premises. The "Demised Premises" shall refer to certain
portions of a larger parcel of real property located in the County of Riverside, State of
California, as depicted on the approved Plot Plan, dated November 17, 2006 attached
as Exhibit "A" hereof. The entire parcel of real property is referred to in this Lease and
Easement as the "Site." The portion of the Site that is not included in the Demised
Premises is referred to as the Easement Area.
1.2 Lease and Easement Commencement Date. The term of this Lease
and Easement shall commence on June 1, 2007 and shall remain in effect until
December 31, 2016 and then shall be eligible for renewal on the terms contained in this
Lease and Easement for two subsequent five (5) year terms ("Options"), unless the
Lease and Easement is terminated as otherwise provided in this Lease and Easement.
1.3 Use of Demised Premises. The Tenant is granted a non-exclusive
use of the Demised Premises, including any improvements installed by Tenant, solely
for a CNG Vehicle Fueling Station as described on Exhibit `B" to this Lease and
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Easement. Tenant is also granted a non-exclusive easement over the Easement Area
as described on Exhibit "A" to this Lease and Easement.
1.4 Rental/Compensation. The Tenant shall pay to Landlord the
monthly and percentage rentals as provided in Sections Exhibit "C" to this Lease and
Easement.
1.5 Landlord reserves the right, under this non-exclusive lease of
airport property, to encourage the development of a multi-fuel, renewable, energy
service station by entering into additional non-exclusive leases of the Demised
Premises to one or more providers of fuel supplies. Landlord may exercise this right so
long as (1) the Landlord does not lease the Demised Premises to another provider of
CNG fuels; (2) Tenant continues to operate its fuel station on the Demised Premises in
full compliance with the provisions of this Lease and Easement; and (3) the Landlord
conditions any subsequent tenant to reimburse the Tenant for its pro-rata share of site
improvements on the Easement Area paid solely by Tenant, not including any
improvement dedicated solely to Tenant's fuel supply and distribution system.
1.6 Tenant's Address for Notices.
Clean Energy, Inc.
3020 Old Ranch Parkway, Suite 200
Seal Beach, California 90470
2. TERM.
2.1 Initial Term. The initial term of this Lease and Easement shall
commence on the date specified in Section 1 .2 ("Commencement Date") and shall
continue for the period specified therein unless earlier terminated as provided in this
Lease and Easement.
2.2 Option Term. Tenant and Landlord may mutually agree to
extend the term of this Lease and Easement on all of the provisions contained in this
Lease and Easement for the period(s) specified in Section 1.3 ("extended term")
following the expiration of the initial term or any other extended term properly exercised
hereunder. Tenant shall give Landlord notice of Tenant's desire to extend the Lease
and Easement ("option notice") at least one hundred twenty (120) days but not more
than six (6) months before the expiration of the initial term or any other extended term
properly exercised hereunder. Landlord shall at least sixty (60) days before the
expiration of the initial or extended term, provide notice of Landlord's concurrence with
the Tenant's request to extend the Lease and Easement ("Concurrence Notice"). In the
event the Landlord does not provide the Concurrence Notice or the Landlord provides
the Tenant with written notice that the Landlord does not concur with the request for an
extension, the extended term shall not commence and this Lease and Easement shall
expire at the end of the initial term or properly exercised extended term. Tenant agrees
that it has no right to claim just compensation or relocation benefits under the United
States Constitution, California Constitution or federal or state law. Tenant fully and
irrevocably releases Landlord and the City of Palm Springs from all such claims,
liabilities, and causes of action, including attorneys' fees and cost. In the event of
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renewal or extension of this Lease and Easement, the Landlord may impose new
conditions to protect the public health, safety, and general welfare.
2.3 Time. Time is of the essence of this Lease and Easement.
2.4 Force Majeure. If either party hereto shall be delayed or prevented
from the performance of any act required hereunder by reason of acts of God, strikes,
lockouts, labor troubles, inability to procure materials, 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 be extended for a period equivalent to the period of such delay,
provided such party provides the other party written notice of such event within ten (10)
days of the commencement of the delay; provided, however, nothing in this Section
shall excuse Tenant from the prompt payment of any rental or other charge required of
Tenant hereunder except as may be expressly provided elsewhere in this Lease and
Easement.
2.5 Holding Over. Any holding over after the expiration of the term of
this Lease and Easement, 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 at a rental equal to one hundred fifty percent (150%) of the last applicable
Quarterly Rental and upon terms and conditions as existed during the last year of the
term hereof.
3. RENTAL.
3.1 Quarterly Rental. Tenant shall pay to Landlord, during the term of
this Lease and Easement from and after the Commencement Date as quarterly rental
("Quarterly Rental") for the demised premises the sum specified in Exhibit "C" to this
Lease and Easement, which sum shall be paid in advance on the first day of January,
April, July, and October. In the event the Commencement Date does not occur on the
first day of a calendar month, the Tenant shall pay the rental for the fractional month on
the Commencement Date on a per diem basis (calculated on the basis of a ninety (90)
day quarter). 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 13.10 hereof.
3.2 Percentage Rental.
(a) Tenant shall and will pay to Landlord at the time and in the
manner herein specified as additional rental or fuel royalty (sometimes referred to
herein as "Percentage Rental") the sums provided in Exhibit "C° to this Lease and
Easement.
(b) Within fifteen (15) days after the end of each quarter of the
term hereof, commencing on or before the fifteenth (15th) day after the first quarter after
the Commencement Date, and ending with the fifteenth (15th) day of the month next
succeeding the last quarter of the Lease and Easement term, Tenant shall furnish to
Landlord a statement in writing, certified by Tenant to be correct, showing the
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calculation of Percentage Rental from the Demised Premises during the preceding three
calendar months relating to such CNG fuel sales (or fractional month at the beginning of
the term if the Commencement Date is other than the first day of a month), and shall
accompany each such statement with a payment to Landlord equal to the Percentage
Rental amount.
(c) The Tenant shall keep at the Demised Premises (and shall
require any permitted subtenant to keep at the Demised Premises) full, complete, and
proper books, records, and accounts of its daily gross sales, both for cash and on credit,
at any time operated in the Demised Premises. The Landlord and its agents and
employees shall have the right at any and all times, during regular business hours, to
examine and inspect all of the books and records of the Tenant, including any sales tax
reports pertaining to the business of the Tenant conducted in, upon, or from the
Demised Premises, for the purpose of investigating and verifying the accuracy of any
statement of gross sales and to cause an audit of the business of Tenant to be made by
a certified public accountant of Landlord's selection. If the statement of gross sales
previously made to Landlord shall be found to be inaccurate, then and in that event,
there shall be an adjustment and one party shall pay to the other on demand such sums
as may be necessary to settle in full the accurate amount of said percentage rental that
should have been paid to Landlord for the period or periods covered by such inaccurate
statement or statements. If said audit shall disclose an inaccuracy of greater than three
percent (3%) error with respect to the amount of gross sales reported by Tenant for the
period of said report, then the Tenant shall immediately pay to Landlord the cost of such
audit; otherwise, the cost of such audit shall be paid by Landlord.
3.3 Cost of Living Adjustment. Upon each fifth year anniversary date of
the Commencement Date or if the Commencement Date is not on the first day of a
month, then on the first day of the next calendar month, the Quarterly Rental and
Percentage Rental as described in Sections 1 and 2 of Exhibit "C" shall be adjusted in
proportion to changes in the Consumer Price Index over the five year period of the
applicable term. Such adjustment shall be made by multiplying the original or current
Quarterly Rental and Percentage Rental by a fraction, the numerator of which is the
value of the Consumer Price Index for the calendar month three (3) months preceding
the calendar month for which such adjustment is to be made and the denominator of
which is the value of the Consumer Price Index for the same calendar month
immediately prior to Commencement Date or the month five years previous to the
calendar month three months preceding the calendar month for which the adjustment is
to be made. For example, if the adjustment is to occur effective June 1, 2011, the index
to be used for the numerator is the index for the month of March 2011 and the index to
be used for the denominator is the index for the month of March preceding the
Commencement Date. However, in no event shall the rent be reduced below the
Quarterly Rental or Percentage Rental in effect immediately preceding such adjustment.
The "Consumer Price Index" to be used in such calculation is the Consumer Price
Index, All Urban Consumers (All Items), for the Los Angeles-Anaheim-Riverside
Metropolitan Area, published by the United States Department of Labor, Bureau of
Labor Statistics (1982-84 = 100). If both an official index and one or more unofficial
indices are published, the official index shall be used. If said Consumer Price Index is
no longer published at the adjustment date, it shall be constructed by conversion tables
included in such new index.
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3.4 Additional Rental. For purposes of this Lease and Easement, all
monetary obligations of Tenant under this Lease and Easement, including, but not
limited to, insurance premiums, property taxes, maintenance expenses, late charges,
and utility costs shall be deemed to be additional rental.
3.5 Real Property Taxes. In addition to all rentals herein reserved,
Tenant shall pay, at the election of Landlord, either directly to the taxing authority or to
Landlord, annual real estate taxes and assessments levied upon the Demised Premises
(including any possessory interest taxes), 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. Such amount shall be paid on the date that is twenty (20) days prior to the
delinquent date or, if Landlord receives the tax bill, ten (10) days after receipt of a copy
of the tax bill from Landlord, whichever is later. Even though the term of this Lease and
Easement has expired and Tenant has vacated the Demised Premises, when the final
determination is made of Tenant's share of such taxes and assessments, Tenant shall
immediately pay to Landlord the amount of any additional sum owed.
3.6 Personal Property Taxes. During the term hereof Tenant shall pay
prior to delinquency all taxes assessed against and levied upon fixtures, furnishings,
equipment and all other personal property of Tenant contained in the Demised
Premises, and when possible Tenant shall cause said fixtures, furnishings, equipment
and other personal property to be assessed and billed separately from the real property
of Landlord.
3.7 Utilities_ Tenant shall pay before delinquency all charges for water,
gas, heat, electricity, power, sewer, telephone service, trash removal, and all other
services and utilities used in, upon, or about the Site by Tenant or any of its subtenants,
licensees, or concessionaires during the term of this Lease and Easement.
3.8 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 and Easement, 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 when within five (5) days of its due date shall be 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.
3.9 Interest. Any sum to be paid pursuant to the terms of this Lease
and Easement not paid when due shall bear interest from and after the due date until
paid at a rate equal to three percent (3%) over the reference rate being charged by
Bank of America, N.A. from time to time during such period so long as the rate does not
exceed the maximum non-usurious rate permitted by law in which case interest shall be
at the maximum non-usurious rate allowed by law at the time the sum became due.
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4. GRANT OF LEASE AND EASEMENT,
4.1 Grant of Lease. The Landlord hereby leases to Tenant and Tenant
hires from Landlord, on a non-exclusive basis, the Demised Premises with
appurtenances as defined herein, for the purpose of conducting thereon only the use
specified in Section 1.3 of this Lease and Easement and for no other use.
4.2 Grant of Easement. The Landlord hereby grants to Tenant and
Tenant hires from Landlord, on a non-exclusive basis, an Easement over the Easement
Area solely for vehicle access to and from the Demised Premises and for the purpose of
maintaining the Easement Area as provided in this Lease and Easement.
4.3 Prohibited Uses. Tenant shall not sell or permit to be kept, used,
displayed or sold in or about the Site (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 which
may be prohibited by standard forms of fire insurance policies, or any alcoholic
beverages unless expressly permitted by Section 1.3 hereof. Tenant shall not use, or
permit to be used, the Demised Premises or any part of the Site for the installation or
on-premises use of any vending machine, gaming machine, or video or arcade game
unless expressly permitted by this Lease and Easement. Tenant shall not store or sell
any fuel or petroleum products except as expressly permitted by this Lease and
Easement. Tenant shall not allow any overnight itinerant aircraft or vehicle parking or
storage of dismantled aircraft or vehicles on the Site.
4.3 Compliance with Laws. Tenant shall, at its sole cost and expense,
comply with all of the requirements of all municipal, state, and federal authorities now in
force or which may hereafter be in force pertaining to the use of the Demised Premises,
and shall faithfully observe in said use all municipal ordinances, including, but not
limited to, the General Plan and zoning ordinances, state and federal statutes, or other
governmental regulations now in force or which shall hereinafter be in force. Tenant's
violation of law shall constitute an incurable default under this Lease and Easement.
The judgment of any court of competent jurisdiction, or the admission of Tenant in any
action or proceeding against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any such order or statute in said use, shall be conclusive of that
fact as between the Landlord and Tenant. Tenant shall obtain a City Building Permit and
such other entitlements as may be required under the City's Zoning Code or Municipal
Code for upgrade and expansion of the existing CNG station and shall post a "Permit to
Operate" notice at the Site after approval and signoff by the City. The Landlord will be
responsible for any permit fees for the project.
Tenant shall not engage in any activity on or about the Site that violates
any Environmental Law, and shall promptly, at Tenant's sole cost and expense, take all
investigatory and/or remedial action required or ordered by any governmental agency or
Environmental Law for clean-up and removal of any contamination involving any
Hazardous Material created or caused directly or indirectly by Tenant. The term
"Environmental Law" shall mean any federal, state or local law, statute, ordinance or
regulation pertaining to health, industrial hygiene or the environmental conditions on,
under or about the Demised Premises, including, without limitation, (1) the
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Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), 42 U.S.C. Sections 9601 et seq.; (ii) the Resource Conservation and
Recovery Act of 1976 ("RCRA"), 42 U.S.C. Sections 6901 et seq.; (iii) California Health
and Safety Code Sections 25100 et seq.; (iv) the Safe Drinking Water and Toxic
Enforcement Act of 1986, California Health and Safety Code Section 25249.5 et seq.;
(v) California Health and Safety Code Section 25359.7; (vi) California Health and Safety
Code Section 25915; (vii) the Federal Water Pollution Control Act, 33 U.S.C. Sections
1317 et seq.; (viii) California Water Code Section 1300 et seq.; and (ix) California Civil
Code Section 3479 et seq., as such laws are amended and the regulations and
administrative codes applicable thereto. The term "Hazardous Material' includes,
without limitation, any material or substance which is (1) defined or listed as a
"hazardous waste", "extremely hazardous waste", "restrictive hazardous waste" or
"hazardous substance" or considered a waste, condition of pollution or nuisance under
the Environmental Laws; (ii) petroleum or a petroleum product or fraction thereof; (iii)
asbestos; and/or (iv) substances known by the State of California to cause cancer
and/or reproductive toxicity. It is the intent of the parties hereto to construe the terms
"Hazardous Materials" and "Environmental Laws" in their broadest sense. Tenant shall
provide all notices required pursuant to the Safe Drinking Water and Toxic Enforcement
Act of 1986, California Health and Safety Code Section 25249.5 et seq. Tenant shall
provide prompt written notice to Landlord of the existence of Hazardous Substances on
the premises and all notices of violation of the Environmental Laws received by Tenant.
Tenant shall be strictly liable for and shall indemnify and hold the Landlord harmless for
any violation of the provisions of this Section 4.3 of the Lease and Easement.
4.4 Non-Discrimination & FAA Required Clauses.
(a) Tenant for itself, its heirs, personal representatives,
successors in interest, and assigns, as a part of the consideration hereof, does hereby
covenant and agree "as a covenant running with the land" that in the event facilities are
constructed, maintained, or otherwise operated on the Site described in the Lease and
Easement for a purpose for which a DOT program or activity is extended or for another
purpose involving the provision of similar services or benefits, the Tenant shall maintain
and operate such facilities and services in compliance with all other requirements
impose pursuant to Title 49, Code of Federal Regulations DOT, Subtitle A, Office of the
Secretary, Part 26, Nondiscrimination in Federally-Assisted Programs of the
Department of Transportation-effectuation of Title VI of the Civil Rights Act of 1964, and
as said Regulations may be amended.
(b) The Tenant for itself, its heirs, personal representatives,
successors in interest, and assigns, as a part of the consideration hereof, does hereby
covenant and agree "as a covenant running with the land" that: (1) no person on the
grounds of race, color, or national origin shall be excluded from participation in, denied
the benefits, of or be otherwise subjected to discrimination in the use of said facilities,
(2) that in the construction of any improvements on, over, or under such land and the
furnishing of services thereon, no person on the grounds of race, color, or national
origin shall be excluded from participation in, denied the benefits of, or otherwise be
subject to discrimination, (3) that the Tenant shall use the premises in compliance with
all other requirements imposed by or pursuant to Title 49, code of Federal Regulations,
Department of Transportation, Subtitle A, Office of the Secretary, Part 26,
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nondiscrimination in Federally-Assisted Programs of the Department of Transportation-
Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be
amended.
c) In the event of breach of any of the above nondiscrimination
covenants, landlord shall have the right to terminate the lease, and to reenter and
repossess said land and the facilities thereon, and hold the same as if said lease had
never been made or issued. This provision does not become effective until the
procedures of 49 CFR Part 26 are followed and completed including expiration of
appeal rights.
(d) Tenant shall furnish its accommodations and/or services on
a fair, equal and not unjustly discriminatory basis to all users thereof and it shall charge
fair, reasonable and not unjustly discriminatory prices for each unit or services; provided
that the Tenant may be allowed to make reasonable and nondiscriminatory discounts,
rebates or other similar type of price reductions to volume purchasers.
(e) Non-compliance with paragraphs (a) - (d) of this Section 4.4
shall constitute a material breach thereof and in the event of such non-compliance the
Landlord shall have the right to terminate this lease and the estate hereby created
without liability therefore or at the election of the Landlord or the United States either or
both said Governments shall have the right to judicially enforce provisions.
(f) Tenant agrees that is shall insert the above five provisions in
any sublease or contract by which said Tenant grants a right or privilege to any person,
form or corporation to render accommodations and/or services to the public on the
premises herein leased-
(g) The Tenant assures that it will undertake an affirmative
action program as required by 14 CFR Part 152, Subpart E, to insure that no person
shall on the grounds of race, creed color, national origin, or sex be excluded from
participating in any employment activities covered in 14 CFR Part 152, subpart E. The
Tenant assures that no person shall be excluded on these grounds from participating in
or receiving the services or benefits of any program or activity covered by this subpart.
The Tenant assures that it will require that its covered sub-organizations provide
assurances to the Tenant that they similarly will undertake affirmative action programs
and that they will require assurances from their sub-organizations, as required by 14
CRF Part 152, Subpart E, to the same effort.
(h) The Landlord reserves the right to further develop or improve
the landing area of the Airport as it sees fit, regardless of the desires or view of the
Tenant, and without interference or hindrance from the Tenant or its agents or
employees.
(1) The Landlord reserves the right, but shall not be obligated to
the Tenant to maintain and keep in repair the landing area of the airport and all publicly-
owned facilities of the airport, together with the right to direct and control all activities of
the Tenant in this regard.
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(j) The Lease and Easement shall be subordinate to the
provisions and requirements of any existing or future agreement between the Landlord
and the United States, relative to the development, operation, or maintenance of the
airport. Failure of the Tenant or any lawful occupant to comply with the requirements of
any existing or future agreement between the Landlord and the United States and which
continues after reasonable notice to make appropriate corrections shall be cause for
immediate termination of Tenant's rights under this Lease and Easement.
(k) There is hereby reserved to the Landlord, its successors and
assigns, for the use and benefit of the public, a right of flight for the passage of aircraft
in the airspace above the surface of the premises herein (leased, licensed, permitted).
This public right of flight shall include the right to cause in said airspace any noise
inherent in the operation of any aircraft used for navigation or flight through the said
airspace or landing at, taking off from or operation on the Palm Springs Regional
Airport.
(1) Tenant agrees to comply with the notification and review
requirements covered in Part 77 of the Federal Aviation Regulation in the event future
construction of a building is planned for the leased premises, or in the event of any
planned modification or alteration of any present or future building or structure situated
on the leased premises.
(m) The Tenant, by accepting this, expressly agrees for itself, its
successors and assigns that it will not erect nor permit the erection of any structure or
object, nor permit the growth of any tree on the land leased hereunder above the mean
sea level elevation of 530 feet. Landlord reserves the right to enter upon the land
leased, hereunder and to remove the offending structure or object and cut the offending
tree, all of which shall be at the expense of the Tenant.
(n) The Tenant, by accepting this Lease and Easement, agrees
for itself, its successors and assigns that it will not make use of the lease premises in
any manner which might interfere with the landing and taking off of aircraft from Palm
Springs International Airport or otherwise constitute a hazard. In the event the aforesaid
covenant is breached, the owner reserves the right to enter upon the premises here
leased, and cause the abatement of such interference at the expense of the Tenant.
(o) It is understood and agreed that nothing herein contained
shall be construed to grant or authorize the granting of an exclusive right within the
meaning of Section 308a of the Federal Aviation Act of 1958 (49 U.S.0 1349a).
(p) The lease, and all the provisions hereof shall be subject to
whatever right the United States Government now has or in the future may have or
acquire, affecting the control, operation, regulation and taking over of said airport or the
exclusive or non-exclusive use of the airport by the United States during the time of war
or national emergency.
4.5 Remediation Obligations. If any inspection of the Site determines
that a release of hazardous materials or substances has occurred or if the presence or
threatened presence of any Hazardous Material is hereafter detected on or about the
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Site, and the Hazardous Material is one which may have been introduced to the
Demised premises by Tenant or its agents, contractors, employees, or licensees during
the term of this Agreement or any previous agreement between City and Tenant, then
until such time as it is finally determined by a court of competent jurisdiction that such
Hazardous Material (hereinafter "Covered Hazardous Material") was released or
discharged on or about the Site by a person other than Tenant or its agents,
contractors, employees, or licensees, Tenant shall, at its sole expense, immediately
commence the remedial clean-up measures to assess, remove or remediate the
Covered Hazardous Material from the Demised Premises, monitor, mitigate and/or
dispose of the effects of such hazardous Material, as such may be required, and shall
diligently pursue such assessment, removal, remedial, clean-up, monitoring, disposal
and mitigation measures to completion and closure from the appropriate regulatory
agencies, all in compliance with applicable Environmental Laws. Such activities shall
be conducted in a diligent, expeditious, and safe manner so as to not allow any
dangerous or hazardous conditions to occur on the Site during or after such activities.
In addition, Tenant shall promptly repair all damage to the Demised Premises and the
improvements thereof caused by any such remedial removal, remedial clean-up,
monitoring, disposal or mitigation measures undertaken by or at the direction of Tenant
and return the Site to the condition it existed immediately prior to such remediation
activities.
4.6 Signs.
(a) 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 Demised 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
Landlord.
4.7 Public Facilities, Ingress, Egress, and Quiet Enjoyment. Landlord
agrees that Tenant, upon payment of the rental hereunder and performing the
covenants of the Lease and Easement, may quietly have, hold, and enjoy the Demised
Premises during the term of the Lease and Easement, and that Tenant shall have the
non-exclusive right to use, in common with others, the public facilities at the Airport and
Tenant shall have a reasonable right of ingress to and egress from the Demised
Premises and the public facilities for its employees, visitors, and customers.
4.8 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, including without limitation the Landlord's municipal code. 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 Demised Premises on a uniform basis.
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5. IMPROVEMENTS, MAINTENANCE, AND REPAIRS
5.1 Improvements, Alterations, and Fixtures. Tenant shall not make
any improvements to the Demised Premises or the Easement Area without the prior
written consent of Landlord, and any improvements to the Demised Premises or
Easement area, except movable tanks and trade fixtures, shall become at once a part of
the realty and shall at the expiration or earlier termination of this Lease and Easement
belong to Landlord free and clear of any liens or encumbrances. Any such
improvements shall be in conformance with the requirement of all municipal, state,
federal, and other governmental authorities, including requirements pertaining to the
health, welfare or safety of employees of the public and in conformance with reasonable
rules and regulations of Landlord. Landlord may require that any such improvements
be removed prior to the expiration of the term hereof. Any removal of improvements or
furniture and trade fixture 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 Demised Premises and Easement Area can be
surrendered in a good, clean, and sanitary condition as required by Section 5.2 hereof.
Any and all fixtures, improvements, 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.
5.2 Operation, Maintenance, and Repair. Tenant shall, subject to
Landlord's obligations hereinafter provided, at all times during the term hereof, and at
Tenant's sole cost and expense, keep, maintain, and repair the Site as well as any
improvements upon the Demised Premises, in good and sanitary order, condition, and
repair (except as hereinafter provided) including without limitation, the maintenance and
repair of any store front, doors, window casements, glazing, heating and air conditioning
system, plumbing, pipes, electrical wiring, and conduits. Tenant shall also at its sole
cost and expense be responsible for any alterations or improvements to the Demised
Premises necessitated as a result of the requirement of any municipal, state or federal
authority. Tenant agrees on the last day of said term or sooner termination of this
Lease and Easement to surrender the Demised Premises, any interest in the Easement
Area, and any appurtenances thereto 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. Tenant shall periodically sweep and
clean the Easement Area and any sidewalks adjacent to the Site, as needed. Tenant
shall provide and maintain all public utilities to the Site, including all costs related to gas,
water, and electricity.
5.3 Free From Liens. Tenant shall keep the Site 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.
5.4 Construction Obligations. Tenant agrees to construct the
improvements to the extent shown on the attached Exhibit "D" at its sole cost and
expense. It is specifically agreed that, at the sole option of the Landlord, the
improvements constructed on the Site shall become to property of the Landlord, free
and clear from any and all encumbrances at the expiration or termination of the
11
agreement or any extension thereof, or if said Compressed Natural Gas vehicle fueling
station fails to operate for 12 consecutive months, at its sole cost and expense, Tenant
will remove any movable tanks and trade fixtures upon receipt of a thirty (30) day written
notice from the Landlord.
5.5 Landlord's Reserved Rights.
(a) Airport Development and Safety. Landlord reserves the right
to further develop or improve the aircraft operating area of the Airport as it sees fit, and
Landlord reserves the right to take any action it considers necessary to protect the
aerial approaches of the Airport against obstruction, together with the right to prevent
Tenant from erecting or permitting to be erected any building or other structure of the
Demised premises which, in the opinion of Landlord, would limit the usefulness of the
Airport or constitute a hazard to aircraft.
(b) Lease and Easement to United States. During the time of
war or national emergency, Landlord shall have the right to lease the landing area or
any part thereof to the United States Government for military or naval use, and, if such
lease is executed, the provisions of the Lease and Easement insofar as they are
inconsistent with the provisions of the Lease and Easement to the Government shall be
suspended and, in that event, a just and proportionate part of the rent hereunder shall
be abated, and the period of such closure shall be added to the term of this Lease and
Easement so as to extend and postpone the expiration thereof unless the Tenant
otherwise elects to terminate the Lease and Easement.
6. INSURANCE AND INDEMNIFICATION.
6.1 Insurance Provided by Tenant.
(a) Tenant to Provide Personal Property Insurance. Tenant, at
its sole cost and 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 Demised Premises from loss or damage to the extent of their full
replacement value and shall provide plate glass coverage.
(b) Tenant to Provide Liability Insurance. During the entire term
of this Lease and Easement, the Tenant shall, at the Tenant's 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 Site and on any sidewalks directly adjacent to the Site
written on a per occurrence basis in an amount not less than ONE MILLION DOLLARS
($1,000,000.00).
(c) Tenant to Provide Worker's Compensation Insurance.
Tenant shall, at the Tenant's 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
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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 Demised 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 6.1
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 canceled 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 Demised 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 insurance companies acceptable to Landlord, licensed to do business in the
state where the Demised Premises are located and rated B++:VII or better by Best's
Insurance Guide. In the event the City Manager of Landlord ("City Manager")
determines that (1) the Tenant's activities in the Demised 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
City Manager; provided that Tenant shall have the right to appeal a determination of
increased coverage by the City Manager to the City Council of Landlord within ten (10)
days of receipt of notice from the City 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 Demised Premises, its contents, or Tenant's 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.
6.2 Tenant to Provide Fire and Extended Coverage Insurance. Tenant, at
its sole expense, shall maintain fire and extended coverage insurance throughout the
term of this Lease and Easement written on a per occurrence basis on the Demised
Premises, its trade fixtures, equipment, personal property, and inventory within the
Demised Premises from loss or damage to the extent of the full replacement value.
6.3 Indemnification. Tenant, as a material part of the consideration to
be rendered to Landlord under this Lease and Easement, 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 Demised Premises and for injuries to persons in or about the Site, from any cause
arising at any time except to the extent such claims arise solely from the gross
negligence or willful misconduct of the Landlord or an employee, officer, or agent of the
Landlord. Tenant agrees to indemnify the Landlord, its officers, agents, and employees
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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 (i)
the negligent performance of the work, operations, or activities of Tenant, its agents,
employees, subcontractors, or invitees, provided for herein, or (ii) arising from the use of
the Site by Tenant or its employees and customers, or arising from the failure of Tenant
to keep the Site in good condition and repair, as herein provided, or (iii) arising from the
negligent acts or omissions of Tenant hereunder, or (iv) arising from Tenant's negligent
performance of or failure to perform any term, provision covenant or condition of this
Lease and Easement, whether or not there is concurrent passive or active negligence
on the part of the Landlord, its officers, agents or employees but excluding such claims
or liabilities arising from the sole negligence or willful misconduct of the Landlord, its
officers, agents 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;
(b) Tenant will promptly pay any judgment rendered against the
Landlord, its officers, agents 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, and employees harmless from such claims or liabilities;
c) In the event the Landlord, its officers, agents 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 or employees, any and all costs and
expenses incurred by the Landlord, its officers, agents or employees in such action or
proceeding, including but not limited to, legal costs and attorneys' fees.
7. ABANDONMENT AND SURRENDER.
7.1 Abandonment. Tenant shall not vacate or abandon the Demised
Premises at any time during the term of this Lease and Easement; and if Tenant shall
abandon, vacate, or surrender the Demised Premises or be dispossessed by process of
law, or otherwise, any personal property belonging to Tenant and left on the Demised
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 and Easement. The voluntary or other
surrender of this Lease and Easement 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 subtenancies, or may, at the option of Landlord, operate as an assignment
to it of any or all of such subleases or subtenancies.
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8. DAMAGE AND DESTRUCTION OF PREMISES.
In the event of (a) partial or total destruction of the Demised Premises during the term of
this Lease and Easement which requires repairs to the Demised Premises, or (b) the
Demised Premises being declared unsafe or unfit for occupancy by any authorized
public authority for any reason, which declaration requires repairs to the Demised
Premises, Tenant shall forthwith make said repairs. No such damage or destruction
(including any destruction necessary in order to make repairs required by any
declaration made by any public authority) shall in any way annul or void this Lease and
Easement. Tenant shall promptly clean and remove all debris resulting from said
damage or destruction. Tenant shall take preliminary steps toward restoring the
improvements with thirty (30) days of the casualty and such improvements shall be
restored within a reasonable time thereafter. The Demised Premises shall be restored
to the condition they existed immediately before said casualty.
9. ASSIGNMENT AND SUBLETTING.
Tenant shall not assign this Lease and Easement or sublet the Demised Premises, or
any interest therein or in the Easement Area, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. For purposes of this
Lease and Easement, 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. Any such assignment or subletting shall be subject to all of the terms
and conditions of this lease and Easement and proposed assignee shall assume the
obligations of Tenant under this Lease and Easement in writing in form satisfactory to
Landlord. The proposed assignee shall simultaneously provide to Landlord an estoppel
certificate in the form described in Section 132 hereafter. Consent by Landlord to one
assignment, subletting, occupation or use by another person shall not be deemed to be
a 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 Easement, and shall, at the
option of Landlord, terminate this Lease and Easement. Neither this Lease and
Easement 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 the proposed assignee, a history of the proposed assignee's business
experience and such other information as required by Landlord the criteria for
assignment as set forth herein are met. In addition, if Landlord determines that the
Monthly Rent payable to Landlord under this Lease and Easement is less than the fair
market rental value, as determined by Landlord, Landlord shall have the right to
condition its approval to an assignment or subletting on the increase of Monthly Rent to
the fair market rental value.
10. ENCUMBRANCE
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(a) This Lease and Easement, or any right to or interest in, or any of
the improvements on the Demised Premises, may be encumbered with the written
approval of Landlord. No such encumbrance or addition thereto or extension thereof
shall be valid without said approval. Any such approved encumbrance shall be subject
to the covenants, conditions and restrictions set forth herein and to all rights of
Landlord.
(b) Any encumbrance must be confined to the leasehold interest of
Tenant or the subleasehold interest of a subtenant as may be approved by the
Landlord, and shall not affect in any way the Landlord's interest in the Site. The
encumbrance shall provide that the proceeds from fire or extended coverage insurance
shall be used for the repair or rebuilding of the leasehold improvements and not to
repay and part of the outstanding mortgage. Tenant agrees to furnish, as requested,
any financial statements or analyses pertinent to the encumbrance that Landlord may
deem necessary to justify the amount, purpose and terms of said encumbrance.
c) In the event of default by the Tenant of the terms of an approved
encumbrance, the encumbrancer may exercise any rights provided in such approved
encumbrance provided that, before any sale of the leasehold estate, whether by power
of sale or foreclosure, the encumbrancer shall give to Landlord notice of the same
character as is required to be given to Tenant by such encumbrancer pursuant to the
loan documents and/or the laws of the State of California and Landlord shall be given
an additional thirty (30) days in which to cure the default after the time for tenant to cure
has expired.
(d) If any sale under the approved encumbrance occurs, whether by
power of sale or foreclosure, and the purchaser at such sale is the encumbrancer, the
encumbrancer may sell and assign the Lease and Easement without any further
consent of Landlord provided that the assignee shall agree in such assumption by the
assignee, the encumbrancer shall be released from all future obligations of the Tenant
under the Lease and Easement. If a sale under the approved encumbrance occurs,
and the purchaser is a party other than the encumbrancer, said purchaser, as
successor in interest to the Tenant, shall be bound by all the terms and conditions of the
Lease and Easement and the purchaser shall assume in writing the obligations of
Tenant hereunder.
(e) If notice of such sale shall be given and the defaults or any of them
upon which such notice of sale is based shall then continue, Landlord shall have the
right to correct such defaults at any time prior to the date of sale or foreclosure, and to
terminate such leasehold upon paying to the encumbrancer the balance of the
encumbrance as hereinafter defined.
(f) "Balance of encumbrance" shall mean the amount of principal
remaining unpaid on a note secured by a trust deed or mortgage of an interest plus
accrued and past due interest thereon and expenses incurred by the lender in
connection with foreclosure including by not limited to, fire insurance premiums, title
insurance expenses, recording fees, appraisal fees, credit reports and any tax reporting
services and additional expenditures paid by the lender on additions, betterments and
rehabilitations of improvements on the property encumbered pursuant to plans
]6
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approved by landlord, which consent may not be unreasonably withheld, and other
expenses necessary to place the improvements in marketable condition, such adjusted
principal to be paid in case or, at the option of Landlord, amortized over the term and in
accordance with the schedule set forth in said note, the interest rate on the unpaid
balance thereto to be as set forth in said note.
(g) Landlord agrees to provide encumbrancer written notice of any
default by Tenant under this lease and an opportunity to cure at the time notice of such
default is provided to Tenant and give encumbrancer thirty (30) days to cure a monetary
default or forty-five (45) days to cure a non-monetary default cannot be cured within
such period of forty-five days, encumbrancer shall have a reasonable time to cure such
default provided that encumbrancer commences to cure within said forty-five days and
diligently prosecutes the cure to completion. Such period of time shall include the time
to complete a foreclosure action if encumbrancer needs to gain possession of the
Demise Promises to cure said default by Tenant.
11. DEFAULT AND REMEDIES.
11.1 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 and Easement by Tenant: (a) the failure to
pay any rental 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 failure to perform any of Tenant's agreements or obligations
hereunder (exclusive of a default in the payment of money) where such default shall
continue for a period of thirty (30) days after written notice thereof from Landlord to
Tenant which notice shall be deemed to be the statutory notice so long as such notice
complies with statutory requirements (provided, however, that if the Landlord
reasonably determines that the nature of Tenant's obligation is such that more than
thirty (30) days are required, than Landlord may provide additional time for the Tenant
to commence and complete performance); (c) the vacation or abandonment of the
Demised Premises by Tenant; (d) the making by Tenant of a general assignment for the
benefit of creditors; (e) the filing by Tenant of a voluntary petition in bankruptcy or the
adjudication of Tenant as a bankrupt; (f) the appointment of a receiver to take
possession of all or substantially all the assets of Tenant located at the Demised
Premises or of Tenant's leasehold interest in the Demised Premises; (g) the filing by
any creditor of Tenant of an involuntary petition in bankruptcy which is not dismissed
within sixty (60) days after filing; or (h) the attachment, execution or other judicial
seizure of all or substantially all of the assets of Tenant or Tenant's leasehold where
such an attachment, execution or seizure is not discharged within sixty (60) days. Any
repetitive failure by Tenant to perform its agreements and obligations hereunder, though
intermittently cured, shall be deemed an incurable default. Two (2) breaches of the
same covenant within a sixty (60) day period, a notice having been given pursuant to (a)
or (b) above for the first breach, or three (3) of the same or different breaches at any
time during the term of this Lease and Easement for which notices pursuant to (a) or (b)
above were given for the first two (2) breaches shall conclusively be deemed to be an
incurable repetitive failure by Tenant to perform its obligations hereunder.
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In the event of any such default or breach by Tenant, Landlord may at any
time thereafter, without further notice or demand, rectify or cure such default, and any
sums expended by Landlord for such purposes shall be paid by Tenant to Landlord
upon demand and as additional rental hereunder. In the event of any such default or
breach by Tenant, Landlord shall have the right (1) to continue the lease in full force and
effect and enforce all of its rights and remedies under this Lease and Easement,
including the right to recover the rental as it becomes due under this Lease and
Easement, or (ii) Landlord shall have the right at any time thereafter to elect to terminate
the Lease and Easement and Tenant's right to possession thereunder. Upon such
termination, Landlord shall have the right to recover from Tenant:
(a) The worth at the time of award of the unpaid rental which
had been earned at the time of termination;
(b) The worth at the time of award of the amount by which the
unpaid rental which would have been earned after termination until the time of award
exceeds the amount of such rental loss that the Tenant proves could have been
reasonably avoided;
c) The worth at the time of award of the amount by which the
unpaid rental for the balance of the term after the time of award exceeds the amount of
such rental loss that the Tenant proves could be reasonably avoided; and
(d) Any other amount necessary to compensate the Landlord for
all the detriment proximately caused by Tenant's failure to perform its obligations under
the lease or which in the ordinary course of things would be likely to result therefrom.
The "worth at the time of award" of the amounts referred to in
subparagraphs (1) and (ii) above shall be computed by allowing interest at three percent
(3%) over the prime rate then being charged by Bank of America, N.A. but in no event
greater than the maximum rate permitted by law. The worth at the time of award of the
amount referred to in subparagraph (iii) above shall be 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%), but in no event greater than ten percent (10%).
As used herein "rental" shall include the Quarterly Rental, percentage
rental equal to the average percentage rental paid or payable by Tenant for the last
twelve (12) months or such lesser period as Tenant has been open for business, other
sums payable hereunder which are designated "rental" or "additional rental" and any
other sums payable hereunder on a regular basis such as reimbursement for real estate
taxes.
Such efforts as Landlord may make to mitigate the damages caused by
Tenant's breach of this Lease and Easement shall not constitute a waiver of Landlord's
right to recover damages against Tenant hereunder, nor shall anything herein contained
affect Landlord's right to indemnification against Tenant for any liability arising prior to
the termination of this Lease and Easement for personal injuries or property damage,
and Tenant hereby agrees to indemnify and hold Landlord harmless from any such
injuries and damages, including all attorney's fees and costs incurred by Landlord in
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defending any action brought against Landlord for any recovery thereof, and in
enforcing the terms and provisions of this indemnification against Tenant,
Notwithstanding any of the foregoing, the breach of this Lease and
Easement by Tenant, or an abandonment of the Demised Premises by Tenant, shall not
constitute a termination of this Lease and Easement, or of Tenant's right of possession
hereunder, unless and until Landlord elects to do so, and until such time Landlord shall
have the right to enforce all of its rights and remedies under this Lease and Easement,
including the right to recover rent, and all other payments to be made by Tenant
hereunder, as they become due. Failure of Landlord to terminate this Lease and
Easement shall not prevent Landlord from later terminating this Lease and Easement or
constitute a waiver of Landlord's right to do so.
11.2 No Waiver. Acceptance of rental hereunder shall not be deemed a
waiver of any default or a waiver of any of Landlord's remedies.
11.3 Landlord's Default. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but in no
event later than thirty (30) days after written notice by Tenant to Landlord and to the
holder of any first mortgage or deed of trust covering the Premises whose name and
address shall have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
performance then Landlord shall not be deemed in default if Landlord commences
performance within a (30) day period and thereafter diligently prosecutes the same to
completion. In no event shall Tenant have the right to terminate this Lease and
Easement as a result of Landlord's default and Tenant's remedies shall be limited to
damages and/or an injunction.
11.4 Termination. This Lease and Easement may be terminated in whole
or in part in writing by Landlord in the event of substantial failure by the Tenant to fulfill
its obligations under this Lease and Easement, or it may be terminated by Landlord for
necessity or convenience provided that Landlord provide Tenant with thirty (30) days
written notice. If this Lease and Easement is terminated under the provisions of this
Section 11.4 for necessity or convenience, City shall reimburse Tenant for Tenant's
actual construction cost of any new improvements installed subsequent to the execution
of this Lease and Easement and approved by Landlord pursuant to the provisions of
Section 5.1 of this Lease and Easement, less depreciation at the rate of 33.33% per
year from date of this Lease and Easement, regardless of when such improvements are
installed. The reimbursement provided herein shall be Tenant's sole and exclusive
remedy and form of compensation, costs or damages, including Relocation Assistance
benefits (Sec. 7260 et seg• of the California Government Code), due to termination, re-
entry, or acquisition by City.
12. CONDEMNATION.
In the event a condemnation or a transfer in lieu thereof results in a taking of any portion
of the Demised Premises, Landlord may, or in the event a condemnation or a transfer in
lieu thereof results in a taking of twenty-five percent (25%) or more of the Demised
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0 0
Premises, Tenant may, upon written notice given within thirty (30) days after such taking
or transfer in lieu thereof, terminate this Lease and Easement. Tenant shall not be
entitled to share in any portion of the award and Tenant hereby expressly waives any
right or claim to any part thereof. Tenant shall, however, have the right to claim and
recover, only from the condemning authority (but not from Landlord), any amounts
necessary to reimburse Tenant for the cost of removing stock and fixtures. If this Lease
and Easement is not terminated as above provided, Landlord shall use a portion of the
condemnation award to restore the Demised Premises.
13. MISCELLANEOUS.
13.1 Entry and Inspection. Tenant shall permit Landlord and his agents
to enter into and upon the Demised Premises at all reasonable times for the purpose of
inspecting the same or for the purpose of maintaining the Demised Premises as
required by the terms of this Lease and Easement 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 Demised Premises are located any usual or ordinary "For Sale"
signs or any signs for public safety as determined by Landlord. Landlord shall be
permitted to do any of the above without any rebate of rent and without any liability to
Tenant for any loss of occupation or quiet enjoyment of the Demised Premises thereby
occasioned. Tenant shall permit Landlord, at any time within six (6) months prior to the
expiration of this Lease and Easement, to place upon the Demised Premises any usual
or ordinary "For Lease and Easement" signs, and during such six (6) month period
Landlord or his agents may, during normal business hours, enter upon said Demised
Premises and exhibit same to prospective tenants.
13.2 Estoppel Certificate. If, as a result of a proposed sale, assignment,
or hypothecation of the Demised 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 "E" 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.
13.3 Jurisdiction and Venue. The parties hereto agree that the State of
California is the proper jurisdiction for litigation of any matters relating to this Lease and
Easement, 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.
13.4 Partial Invalidity. If any term, covenant, condition or provision of
this Lease and Easement 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.
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13.5 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.
13.6 No Oral Agreements. This Lease and Easement (i) covers in full
each and every agreement of every kind or nature whatsoever between the parties
hereto concerning this Lease and Easement, (ii) supersedes any and all previous
obligations, agreements, and understandings, between the parties, oral or written,
including without limitation the previous non-exclusive lease and easement dated July 1,
2007 and executed by the City on July 6, 2007, and (iii) merges all preliminary
negotiations and agreements of whatsoever kind or nature herein. Tenant acknowl-
edges 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.
13.7 Authority. In the event that Tenant is a corporation or a partnership,
each individual executing this Lease and Easement 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 and Easement 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 and Easement is binding upon said corporation or
partnership in accordance with its terms. Tenant represents and warrants to Landlord
that the entering into this Lease and Easement does not violate any provisions of any
other agreement to which Tenant is bound.
13.8 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 venturer with Tenant, and that the provisions
of this Lease and Easement and the agreements relating to rent payable hereunder are
included solely for the purpose of providing a method whereby rental payments are to
be measured and ascertained.
13.9 Nondiscrimination. Tenant herein covenants by and for itself, its
heirs, executors, administrators and assigns and all persons claiming under or through
it, and this Lease and Easement is made and accepted upon and subject to the
following conditions: That there shall be no discrimination against or segregation of any
person or group of persons on account of race, sex, marital status, color, creed, national
origin or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or
enjoyment of the Demised Premises herein leased, nor shall the Tenant itself, or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, sublessees, subtenants or vendees in the Demised
Premises.
13.10 Notices. Wherever in this Lease and Easement it shall be required
or permitted that notice and demand be given or served by either party to this Lease
and Easement to or on the other, such notice or demand shall be given or served in
21
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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, to City of Palm Springs, P.O. Box 2743, Palm Springs, California, 92263, Attn:
City Manager, and if to Tenant, 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.
13.11 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 party'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 and Easement.
13.12 FAA Review. Tenant shall be solely responsible for any charges,
assessments, fines, penalties, or costs of any kind or nature as a result of the FAA's
review of this Lease and Easement and any modifications, revisions, or changes
directed or otherwise required by the FAA to the Lease and Easement or the Tenant's
use or occupancy of the Demised Premises and Tenant shall defend and hold the City
and its officers, employees, and agents harmless from any damage or cost Tenant may
incur as a result thereof. Tenant understands and acknowledges that Tenant is
assuming full responsibility for any deficiency in the Lease and Easement or Tenant's
use of the Demised Premises on or before the effective date of this Lease and
Easement identified by the FAA and any cure that the FAA may require regarding the
Lease and Easement or the Tenant's use of the Demised Premises on or before the
effective date of this Lease and Easement.
13.12 Exhibits and Addenda. The Exhibits and Addenda attached to this
Lease and Easement are made a part hereof as if fully set forth herein. In the event of
a conflict between the terms and provisions of an Addenda and the terms and
provisions of this Lease and Easement, the terms and provisions of the Addenda shall
prevail.
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544426.1
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the dates provided below and shall be effective as of the date first written
above.
"Landlord"
CITY OF PALM SPRINGS
A California Charter City
Dated: C) 2R Za® -7
City Manager
APPROVED AS TO FORM ATTEST: - -
By: G" By:
Title: �� r .l Tit'
"Tenant"
CLEAN ENERGY, Inc.
A Calif rnia corporatio
Dated: By:
Titile: is es
ByL 4, l
Title: syr' Csrtio. See.
APPROVED By CITY COUNCIL (Attach corporate acknowledgments)
23
EXHIBIT "A"
PLOT PLAN OF SITE AND DEMISED PREMISES
Plot Plan: the entire "Site," the "Demised Premises," and the "Easement Area"
(See Section 1.1 of the Lease)
(Include dimensions and area calculation:
(1) Total Area of the Site and (2) Total Area of the "Demised Premises")
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EXHIBIT "B"
Use of Premises
This Exhibit expresses the terms and conditions pursuant to which Landlord authorizes
Tenant to design, construct, operate, and maintain, at Tenant's sole cost and expense,
an upgraded and expanded Compressed Natural Gas ("CNG") motor vehicle fueling
station (the "Station" or the "Demised Premises") on Palm Springs International Airport
("PSP") property in the City of Palm Springs. The Station is generally located at 3400
E, Tahquitz-Canyon Way, Palm Springs, CA 92262 and is owned or controlled by the
Landlord for the use of PSP and other authorized users.
The CNG Station shall include 2 (two) compressors and controls and equipment, thirty
thousand (30,000) standard cubic feet of storage capacity for fast filling 3600 psig
vehicles, at least two (2) two-hose 3600 psi temperature compensated dispensers
capable of fueling two (2) vehicles simultaneously at a minimum rate of three (3) gallons
per minute per vehicle, and magnetic card readers located conveniently for fueling
access which are capable of communicating with Tenant's billing system, and a
universal card system capable of reading all major credit cards. The CNG dispensers
shall be designed for 24 hour per day unlimited public access for all CNG vehicles
including heavy-duty vehicles at the "Public Dispensers".
CNG Station Operation and Maintenance: Tenant shall provide scheduled, routine and
emergency maintenance service for the term of Station ownership and shall repair or, at
its option or upon request of the "City", replace, any defective equipment at its expense.
Tenant shall perform other necessary maintenance or repair or replace parts or
equipment damaged by negligence, abuse, or neglect of others. In the event such
damage was caused solely by the negligence or willful conduct of PSP personnel, PSP
shall reimburse Tenant for its actual out of pocket expenses.
The additional operations and maintenance conditions shall apply to Tenant:
1. Provide all maintenance records for the facility to the Landlord on a semi-annual
basis. This shall include, but not limited to, routine and scheduled maintenance,
emergency maintenance and action taken to resolve major operational problems. Any
safety near misses or accidents shall be reported to the Landlord within 12 hours.
2. The natural gas for the CNG station during the agreement period must meet the
California Air Resources Board (GARB) specification and the water content shall not
exceed 7#/million standard cubic foot (MMSCF).
3. Tenant to have each of the CNG dispensers calibrated once every 2 years to
California Weights and Measures standards, and submit copies to the Landlord.
4. Jointly conduct with the Landlord a mutual annual operation, safety and code
inspection of the CNG station.
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5. If a safety incident or accident occurs, Tenant is to immediately shutdown the CNG
station and report the incident to the Landlord. Tenant shall not restart the CNG station
without approval of the Landlord and such approval shall be made within twenty-four
hours of Tenant's request for approval unless the Landlord expressly finds that the
shutdown should be maintained for public health or safety reasons.
CNG Service Calls: In the event of an emergency involving substantial risk of injury or
material property damage at the Station, Tenant shall respond within forty-eight (48)
hours following notification by PSP or other entities. In the event of other serious
operational difficulties, Tenant shall respond within four (4) hours following notification
and repairs shall be undertaken and completed with reasonable diligence.
CNG Training: Tenant shall offer reasonable training programs to educate PSP's or
other Landlord personnel as to procedures for the safe and efficient use of the Station,
including, without limitation, procedures relating to safe vehicle fueling, troubleshooting
and appropriate emergency procedures.
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EXHIBIT "C"
RENTAUCOMPENSATION
Rental obligations of the Tenant shall include, but not be limited to the following:
1) TENANT shall pay the Landlord $0.10 per square foot of the demised premises
monthly land rental.
2) TENANT shall pay the Landlord on a quarterly basis beginning at the end of the
first calendar quarter after the Station begins operation a percentage rental in the
amount of $0.025 per gasoline gallon equivalent (125,000 BTU/gallon) (a "Gasoline
Gallon") sold at the Station to anyone other than to the City based on the posted Tenant
retail price. The percentage rental shall not apply to sales of CNG to the City for use in
CNG Vehicles owned or leased by City.
3) TENANT shall provide the City of Palm Springs with CNG at a price per gasoline
gallon equivalent (125,000 BTU/gallon) (a "Gasoline Gallon") equal to the posted retail
price by TENANT less $0.25 per gallon during the immediately proceeding calendar
month.
4) Landlord shall, at mutually agreeable times, permit and cooperate with TENANT
in hosting demonstrations and seminars for interested members of the public, press and
other fleet operators for the promotion of clean air programs within the City of Palm
Springs and the Desert Resort Communities.
5) City and PSP operate a vast array of alternative fuel vehicles, utilizing CNG as
the primary fuel source for internal combustive engines. City CNG vehicles are utilized
on a twenty-four (24) hour basis. By having the CNG fueling station located on Airport
property, City employees are able to respond to emergency situations in a timely
manner and/or re-fill vehicles efficiently without causing unnecessary delays in
emergency response times.
6) Landlord acknowledges and will authorize inclusion of a PSP logo in advertising
materials produced by TENANT for the purposes of promoting clean air programs on a
statewide, nationwide, and international level. Should commercial filming occur on the
Demised Premises, TENANT shall guarantee all filming fees due the Landlord, as
provided in the City of Palm Springs' Comprehensive Fee Schedule, shall be paid.
7) TENANT shall utilize its professional expertise in applying for federal grant
programs, including but not limited to those sponsored by the Federal Aviation
Administration (FAA) and the South Coast Air Quality Management District (SCAQMD)
for vehicle and equipment acquisition, CNG fueling station upgrades, or other
associated incentive programs that promote air quality standards.
8) TENANT will maintain the Demised Premises, the Easement Area, and the
roadway entrances along the entire width of the Site in a good and attractive condition
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and shall be responsible for the provision of water and electricity to the Site. Said
maintenance shall meet the same quality standard as the Airport Entrance Road areas.
9) The monthly Tenant payment for rental/compensation listed above shall include
sufficient information as may be requested by Landlord to accurately document
Tenant's compliance with the provisions of this Exhibit.
10) The payment obligations of this Exhibit are based on the assumption that Tenant
will sell approximately 150,000 GEG per year at the upgraded and expanded CNG
station.
?g
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EXHIBIT "D"
CONSTRUCTION OBLIGATIONS
All such improvements shall be constructed pursuant to construction plan and
specifications, prepared by a professional engineer or architect and retained by Tenant
and licensed to practice in the State of California, that are in sufficient detail to enable
potential contractors and subcontractors to make reasonably accurate bid estimates
and to enable Landlord to make an informed judgment about the design and quality of
construction. Following approval by the Landlord, said plans and specifications shall be
subject to the prior written approval of Landlord.
Tenant shall provide Landlord with ten (10) days advance written notice of Tenant's
intent to commence construction of the improvements so that Landlord may post
appropriate notices of non-responsibility. Tenant shall not commence construction until
Tenant has procured all necessary permits and approvals required by all federal, state
and local governmental authorities with jurisdiction. All improvements shall be
constructed within the boundaries of the Demised Premises, shall be constructed in a
good and workmanlike manner, shall substantially comply with the approved plans and
specifications for the improvements and shall comply with all applicable governmental
permits, laws, ordinances and regulations. Tenant is responsible for all construction
material and equipment required for the work and shall keep such material and
equipment stored on the Demised Premises during construction. Tenant shall diligently
prosecute the construction of the improvements to completion. The improvements shall
be completed not later than six (6) months from the Commencement Date. Upon
substantial completion of the improvements, Tenant shall file or cause to be filed
appropriate notices of completion in the Riverside County Recorder's Office.
Tenant shall pay or cause to be paid the total cost and expense of all works of
improvement constructed upon the Demised Premises by Tenant. Tenant shall not
suffer or permit to be enforced against the Demised Premises or any part of it any
mechanic's, material man's, contractor's, subcontractor's or design it may arise.
However, Tenant may in good faith and at Tenant's expense contest the validity of any
such asserted lien, claim or demand provided Tenant has furnished a bond required
pursuant to the California Civil Code to free the Demised Premises from the effect of
such lien. If Tenant fails to discharge such lien, Landlord shall have the right, but not
the obligation, to pay or otherwise discharge such lien. Tenant shall reimburse Landlord
for all sums expended by Landlord therefore, plus interest at the rate of ten percent
(10%) per annum from the date expended by Landlord until fully repaid. Any such
amounts expended by landlord plus interest shall be deemed to be additional rental.
Tenant hereby agrees to indemnify, protect, defend and hold Landlord harmless from
any loss, expense (including reasonable attorneys' fees) or liability arising out of the
work of improvement.
Improvements shall include:
CNG Station: Such station shall include 2 (two) compressors and controls and
equipment, thirty thousand (30,000) standard cubic feet of storage capacity for fast
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filling 3600 psig vehicles, at least two (2) two-hose 3600 psi temperature compensated
dispensers capable of fueling two (2) vehicles simultaneously at a minimum rate of
three (3) gallons per minute per vehicle, and magnetic card readers located
conveniently for fueling access which are capable of communicating with Tenant's
billing system, and a universal card system capable of reading all major credit cards.
The CNG dispensers shall be designed for 24 hour per day unlimited public access for
all CNG vehicles including heavy-duty vehicles at the "Public Dispensers".
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EXHIBIT "E"
ESTOPPEL CERTIFICATE
Tenant:
Landlord: CITY OF PALM SPRINGS, a California Charter City, dba PALM SPRINGS
INTERNATIONAL AIRPORT
Date of Lease and Easement:
Demised Premises:
To:
The undersigned hereby certifies as follows:
1. The undersigned is the tenant ("Tenant") under the above-referenced
lease ("Lease and Easement") covering the above-referenced premises ("Demised
Premises")-
2- The Lease and Easement constitutes the entire agreement between
landlord under the Lease and Easement ("Landlord") and Tenant with respect to the
Demised Premises and the Lease and Easement has not been modified, changed,
altered or amended in any respect except as set forth above.
3. The term of the Lease and Easement commenced on
, 20_, and, including any presently exercised option or renewal
term, will expire on , 20 . Tenant has accepted possession
of the Demised 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 Demised 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 Monthly Rent in installments of
per month, and such monthly installments have been paid not more
than one month in advance. In addition, the Lease and Easement requires Tenant to
pay percentage rent each month in the amount of percent (_%) and percentage
rent has been paid through 20 . 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 Easement and is asserting no offsets or credits against
either the rent or Landlord. Tenant has no claim against Landlord for any security or
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other deposits except $ which was paid pursuant to the Lease and
Easement.
6. Tenant has no option or preferential right to lease or occupy additional
space within the Property of which the Demised Premises are a part. Tenant has no
option or preferential right to purchase all of any part of the Demised Premises nor any
right or interest with respect to the Demised Premises other than as Tenant under the
Lease and Easement. Tenant has no right to renew or extend the term of the Lease
and Easement except as set forth in the Lease and Easement.
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 and Easement.
8. There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, any assignment for the benefit of creditors, 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 and
Easement 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:
32
5J4i26.1
LEASE
AND EASEMENT
CITY OF PALM SPRINGS,
a California charter city,
Doing Business As
PALM SPRINGS INTERNATIONAL AIRPORT
"Landlord"
and
CLEAN ENERGY Inc.
a California corporation
"Tenant"
1
,vnin-t i
LEASE
THIS NON-EXCLUSIVE LEASE ("Lease and Easement") AND EASEMENT
("Easement") is made and entered into this 1st day of July, 2007, by and between the
City of Palm Springs ("City"), a California charter city, dba Palm Springs International
Airport (PSP"), ("Landlord"), and Clean Energy, Inc., a California corporation ('Tenant").
RECITALS
A. The operation of a CNG vehicle fueling station in the City and at PSP will
promote and encourage the general public interest in the use of clean burning
alternative fuels and is consistent with national efforts to enhance public awareness and
support for air quality programs.
B. The nature of the CNG vehicle fueling station use is such that it will serve to
provide clean burning alternative fuels for agencies involved in the aviation industry, the
City of Palm Springs, and local and regional businesses and government agencies with
broader resources and a desire to utilize environmentally safe fuel alternatives. The
availability of CNG fuels will attract such business operations to PSP and PSP lands,
and thereby assist in the making of the Airport as self-sustaining as possible.
AGREEMENT
NOW THEREFORE, the parties hereto agree as follows:
1. SUMMARY OF LEASE AND EASEMENT. Certain lease and easement
provisions are presented and summarized in this Section 1 of the Lease and Easement
and generally represent the terms of the agreement of the parties, subject to further
definition and elaboration in subsequent provisions of this Lease and Easement. In the
event of any conflict between the provisions of this Section and any subsequent
provisions of this Lease and Easement, the subsequent provisions shall control.
1.1 Demised Premises. The "Demised Premises" shall refer to certain
portions of a larger parcel of real property located in the County of Riverside, State of
California, as depicted on the approved Plot Plan, dated November 17, 2006 attached
as Exhibit "A" hereof. The entire parcel of real property is referred to in this Lease and
Easement as the "Site." The portion of the Site that is not included in the Demised
Premises is referred to as the Easement Area.
1.2 Lease and Easement Commencement Date. The term of this Lease
and Easement shall commence on July 1, 2007 and shall remain in effect until
December 31, 2016 and then shall be eligible for renewal on the terms contained in this
Lease and Easement for two subsequent five (5) year terms ("Options"), unless the
Lease and Easement is terminated as otherwise provided in this Lease and Easement.
1.3 Use of Demised Premises. The Tenant is granted a non-exclusive
use of the Demised Premises, including any improvements installed by Tenant, solely
for a CNG Vehicle Fueling Station as described on Exhibit "B" to this Lease and
2
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Easement. Tenant is also granted a non-exclusive easement over the Easement Area
as described on Exhibit "A" to this Lease and Easement.
1 .4 Rental/Compensation. The Tenant shall pay to Landlord the
monthly and percentage rentals as provided in Sections Exhibit "C" to this Lease and
Easement.
1 .5 Landlord reserves the right, under this non-exclusive lease of
airport property, to encourage the development of a multi-fuel, renewable, energy
service station by entering into additional non-exclusive leases of the Demised
Premises to one or more providers of fuel supplies. Landlord may exercise this right so
long as (1) the Landlord does not lease the Demised Premises to another provider of
CNG fuels; (2) Tenant continues to operate its fuel station on the Demised Premises in
full compliance with the provisions of this Lease and Easement; and (3) the Landlord
conditions any subsequent tenant to reimburse the Tenant for its pro-rata share of site
improvements on the Easement Area paid solely by Tenant, not including any
improvement dedicated solely to Tenant's fuel supply and distribution system.
1 .6 Tenant's Address for Notices.
Clean Energy, Inc.
3020 Old Ranch Parkway, Suite 200
Seal Beach, California 90470
2. TERM.
21 Initial Term. The initial term of this Lease and Easement shall
commence on the date specified in Section 1 .2 ("Commencement Date") and shall
continue for the period specified therein unless earlier terminated as provided in this
Lease and Easement.
2.2 Option Term. Tenant and Landlord may mutually agree to
extend the term of this Lease and Easement on all of the provisions contained in this
Lease and Easement for the period(s) specified in Section 1 .3 ("extended term")
following the expiration of the initial term or any other extended term properly exercised
hereunder. Tenant shall give Landlord notice of Tenant's desire to extend the Lease
and Easement ("option notice") at least one hundred twenty (120) days but not more
than six (6) months before the expiration of the initial term or any other extended term
properly exercised hereunder. Landlord shall at least sixty (60) days before the
expiration of the initial or extended term, provide notice of Landlord's concurrence with
the Tenant's request to extend the Lease and Easement ("Concurrence Notice"). In the
event the Landlord does not provide the Concurrence Notice or the Landlord provides
the Tenant with written notice that the Landlord does not concur with the request for an
extension, the extended term shall not commence and this Lease and Easement shall
expire at the end of the initial term or properly exercised extended term. Tenant agrees
that it has no right to claim just compensation or relocation benefits under the United
States Constitution, California Constitution or federal or state law. Tenant fully and
irrevocably releases Landlord and the City of Palm Springs from all such claims,
liabilities, and causes of action, including attorneys' fees and cost. In the event of
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renewal or extension of this Lease and Easement, the Landlord may impose new
conditions to protect the public health, safety, and general welfare.
2.3 Time. Time is of the essence of this Lease and Easement.
2.4 Force Majeure. If either party hereto shall be delayed or prevented
from the performance of any act required hereunder by reason of acts of God, strikes,
lockouts, labor troubles, inability to procure materials, 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 be extended for a period equivalent to the period of such delay,
provided such party provides the other party written notice of such event within ten (10)
days of the commencement of the delay; provided, however, nothing in this Section
shall excuse Tenant from the prompt payment of any rental or other charge required of
Tenant hereunder except as may be expressly provided elsewhere in this Lease and
Easement.
2.5 Holding Over. Any holding over after the expiration of the term of
this Lease and Easement, 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 at a rental equal to one hundred fifty percent (150%) of the last applicable
Quarterly Rental and upon terms and conditions as existed during the last year of the
term hereof.
3. RENTAL.
3.1 Quarterly Rental. Tenant shall pay to Landlord, during the term of
this Lease and Easement from and after the Commencement Date as quarterly rental
("Quarterly Rental") for the demised premises the sum specified in Exhibit °C" to this
Lease and Easement, which sum shall be paid in advance on the first day of January,
April, July, and October. In the event the Commencement Date does not occur on the
first day of a calendar month, the Tenant shall pay the rental for the fractional month on
the Commencement Date on a per diem basis (calculated on the basis of a ninety (90)
day quarter). 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 13.10 hereof.
3.2 Percentage Rental.
(a) Tenant shall and will pay to Landlord at the time and in the
manner herein specified as additional rental or fuel royalty (sometimes referred to
herein as "Percentage Rental") the sums provided in Exhibit "C to this Lease and
Easement.
(b) Within fifteen (15) days after the end of each quarter of the
term hereof, commencing on or before the fifteenth (15th) day after the first quarter after
the Commencement Date, and ending with the fifteenth (15th) day of the month next
succeeding the last quarter of the Lease and Easement term, Tenant shall furnish to
Landlord a statement in writing, certified by Tenant to be correct, showing the total
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gross sales made in, upon, or from the Demised Premises during the preceding three
calendar months relating to such CNG fuel sales (or fractional month at the beginning of
the term if the Commencement Date is other than the first day of a month), and shall
accompany each such statement with a payment to Landlord equal to said percentage
of such total monthly gross sales made in, upon, or from the Demised Premises during
each calendar month.
(c) The term "gross sales" as used herein means the total gross
receipts, including the actual charges for all services performed by Tenant and fees
charged by Tenant and by anyone including any subtenant, licensee or concessionaire
in, at, from, or arising out of the use of the Demised Premises, whether wholesale or
retail, whether for cash or credit, or otherwise, and including the value of all
consideration other than money received for any of the foregoing, without reserve or
deduction for inability or failure to collect, including but not limited to sales, related to
said gift shop and any food and beverage sales related hereto. For the CNG fueling
station "gross sales" is further defined as the volume of CNG fuel sold at each dispenser
in gasoline equivalent gallons (GEG) multiplied by the CNG retail sales price for the
period. Each installment or credit sale shall be treated as a sale for the full price in the
month during which such sale is made, irrespective of whether or when Tenant receives
payment therefore. Gross Sales shall not include sales taxes, so-called luxury taxes,
consumers excise taxes, gross receipts taxes and other similar taxes now or hereafter
imposed upon the sale of merchandise or services, but only if collected separately from
the selling price of merchandise or services and collected from customers.
(d) The Tenant shall keep at the Demised Premises (and shall
require any permitted subtenant to keep at the Demised Premises) full, complete, and
proper books, records, and accounts of its daily gross sales, both for cash and on credit,
at any time operated in the Demised Premises. The Landlord and its agents and
employees shall have the right at any and all times, during regular business hours, to
examine and inspect all of the books and records of the Tenant, including any sales tax
reports pertaining to the business of the Tenant conducted in, upon, or from the
Demised Premises, for the purpose of investigating and verifying the accuracy of any
statement of gross sales and to cause an audit of the business of Tenant to be made by
a certified public accountant of Landlord's selection. If the statement of gross sales
previously made to Landlord shall be found to be inaccurate, then and in that event,
there shall be an adjustment and one party shall pay to the other on demand such sums
as may be necessary to settle in full the accurate amount of said percentage rental that
should have been paid to Landlord for the period or periods covered by such inaccurate
statement or statements. If said audit shall disclose an inaccuracy of greater than three
percent (3%) error with respect to the amount of gross sales reported by Tenant for the
period of said report, then the Tenant shall immediately pay to Landlord the cost of such
audit; otherwise, the cost of such audit shall be paid by Landlord.
3.3 Cost of Living Adjustment. Upon each fifth year anniversary date of
the Commencement Date or if the Commencement Date is not on the first day of a
month, then on the first day of the next calendar month, the Quarterly Rental and
Percentage Rental as described in Sections 1 and 2 of Exhibit "C" shall be adjusted in
proportion to changes in the Consumer Price Index over the five year period of the
applicable term. Such adjustment shall be made by multiplying the original or current
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Quarterly Rental and Percentage Rental by a fraction, the numerator of which is the
value of the Consumer Price Index for the calendar month three (3) months preceding
the calendar month for which such adjustment is to be made and the denominator of
which is the value of the Consumer Price Index for the same calendar month
immediately prior to Commencement Date or the month five years previous to the
calendar month three months preceding the calendar month for which the adjustment is
to be made. For example, if the adjustment is to occur effective July 1 , 2011, the index
to be used for the numerator is the index for the month of March 2011 and the index to
be used for the denominator is the index for the month of March preceding the
Commencement Date. However, in no event shall the rent be reduced below the
Quarterly Rental or Percentage Rental in effect immediately preceding such adjustment.
The "Consumer Price Index" to be used in such calculation is the Consumer Price
Index, All Urban Consumers (All Items), for the Los Angeles-Anaheim-Riverside
Metropolitan Area, published by the United States Department of Labor, Bureau of
Labor Statistics (1982-84 = 100). If both an official index and one or more unofficial
indices are published, the official index shall be used. If said Consumer Price Index is
no longer published at the adjustment date, it shall be constructed by conversion tables
included in such new index.
3.4 Additional Rental. For purposes of this Lease and Easement, all
monetary obligations of Tenant under this Lease and Easement, including, but not
limited to, insurance premiums, property taxes, maintenance expenses, late charges,
and utility costs shall be deemed to be additional rental.
3.5 Real Property Taxes. In addition to all rentals herein reserved,
Tenant shall pay, at the election of Landlord, either directly to the taxing authority or to
Landlord, annual real estate taxes and assessments levied upon the Demised Premises
(including any possessory interest taxes), 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. Such amount shall be paid on the date that is twenty (20) days prior to the
delinquent date or, if Landlord receives the tax bill, ten (10) days after receipt of a copy
of the tax bill from Landlord, whichever is later. Even though the term of this Lease and
Easement has expired and Tenant has vacated the Demised Premises, when the final
determination is made of Tenant's share of such taxes and assessments, Tenant shall
immediately pay to Landlord the amount of any additional sum owed.
3.6 Personal Property Taxes. During the term hereof Tenant shall pay
prior to delinquency all taxes assessed against and levied upon fixtures, furnishings,
equipment and all other personal property of Tenant contained in the Demised
Premises, and when possible Tenant shall cause said fixtures, furnishings, equipment
and other personal property to be assessed and billed separately from the real property
of Landlord.
3.7 Utilities. Tenant shall pay before delinquency all charges for water,
gas, heat, electricity, power, sewer, telephone service, trash removal, and all other
services and utilities used in, upon, or about the Site by Tenant or any of its subtenants,
licensees, or concessionaires during the term of this Lease and Easement.
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3.8 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 and Easement, 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 when within five (5) days of its due date shall be 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.
3.9 Interest. Any sum to be paid pursuant to the terms of this Lease
and Easement not paid when due shall bear interest from and after the due date until
paid at a rate equal to three percent (3%) over the reference rate being charged by
Bank of America, N.A. from time to time during such period so long as the rate does not
exceed the maximum non-usurious rate permitted by law in which case interest shall be
at the maximum non-usurious rate allowed by law at the time the sum became due.
4. GRANT OF LEASE AND EASEMENT.
4.1 Grant of Lease. The Landlord hereby leases to Tenant and Tenant
hires from Landlord, on a non-exclusive basis, the Demised Premises with
appurtenances as defined herein, for the purpose of conducting thereon only the use
specified in Section 1.3 of this Lease and Easement and for no other use.
4.2 Grant of Easement. The Landlord hereby grants to Tenant and
Tenant hires from Landlord, on a non-exclusive basis, an Easement over the Easement
Area solely for vehicle access to and from the Demised Premises and for the purpose of
maintaining the Easement Area as provided in this Lease and Easement.
4,3 Prohibited Uses. Tenant shall not sell or permit to be kept, used,
displayed or sold in or about the Site (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 which
may be prohibited by standard forms of fire insurance policies, or any alcoholic
beverages unless expressly permitted by Section 1.3 hereof. Tenant shall not use, or
permit to be used, the Demised Premises or any part of the Site for the installation or
on-premises use of any vending machine, gaming machine, or video or arcade game
unless expressly permitted by this Lease and Easement. Tenant shall not store or sell
any fuel or petroleum products except as expressly permitted by this Lease and
Easement. Tenant shall not allow any overnight itinerant aircraft or vehicle parking or
storage of dismantled aircraft or vehicles on the Site.
4.3 Compliance with Laws. Tenant shall, at its sole cost and expense,
comply with all of the requirements of all municipal, state, and federal authorities now in
force or which may hereafter be in force pertaining to the use of the Demised Premises,
and shall faithfully observe in said use all municipal ordinances, including, but not
limited to, the General Plan and zoning ordinances, state and federal statutes, or other
governmental regulations now in force or which shall hereinafter be in force. Tenant's
violation of law shall constitute an incurable default under this Lease and Easement.
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The judgment of any court of competent jurisdiction, or the admission of Tenant in any
action or proceeding against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any such order or statute in said use, shall be conclusive of that
fact as between the Landlord and Tenant. Tenant shall obtain a City Building Permit and
such other entitlements as may be required under the City's Zoning Code or Municipal
Code for upgrade and expansion of the existing CNG station and shall post a "Permit to
Operate" notice at the Site after approval and signoff by the City. The Landlord will be
responsible for any permit fees for the project.
Tenant shall not engage in any activity on or about the Site that violates
any Environmental Law, and shall promptly, at Tenant's sole cost and expense, take all
investigatory and/or remedial action required or ordered by any governmental agency or
Environmental Law for clean-up and removal of any contamination involving any
Hazardous Material created or caused directly or indirectly by Tenant. The term
"Environmental Law" shall mean any federal, state or local law, statute, ordinance or
regulation pertaining to health, industrial hygiene or the environmental conditions on,
under or about the Demised Premises, including, without limitation, (1) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), 42 U.S.C. Sections 9601 et seq.; (ii) the Resource Conservation and
Recovery Act of 1976 ("RCRA"), 42 U.S.C. Sections 6901 et seq.; (iii) California Health
and Safety Code Sections 25100 et seq.; (iv) the Safe Drinking Water and Toxic
Enforcement Act of 1986, California Health and Safety Code Section 25249.6 et seq.;
(v) California Health and Safety Code Section 25359.7; (vi) California Health and Safety
Code Section 25915; (vii) the Federal Water Pollution Control Act, 33 U.S.C. Sections
1317 et seq.; (viii) California Water Code Section 1300 et seq.; and (ix) California Civil
Code Section 3479 et seq., as such laws are amended and the regulations and
administrative codes applicable thereto. The term "Hazardous Material" includes,
without limitation, any material or substance which is (1) defined or listed as a
"hazardous waste", "extremely hazardous waste", "restrictive hazardous waste" or
"hazardous substance" or considered a waste, condition of pollution or nuisance under
the Environmental Laws; (ii) petroleum or a petroleum product or fraction thereof; (iii)
asbestos; and/or (iv) substances known by the State of California to cause cancer
and/or reproductive toxicity. It is the intent of the parties hereto to construe the terms
"Hazardous Materials" and "Environmental Laws" in their broadest sense. Tenant shall
provide all notices required pursuant to the Safe Drinking Water and Toxic Enforcement
Act of 1986, California Health and Safety Code Section 25249.5 et seq. Tenant shall
provide prompt written notice to Landlord of the existence of Hazardous Substances on
the premises and all notices of violation of the Environmental Laws received by Tenant.
Tenant shall be strictly liable for and shall indemnify and hold the Landlord harmless for
any violation of the provisions of this Section 4.3 of the Lease and Easement.
4.4 Non-Discrimination & FAA Required Clauses.
(a) Tenant for itself, its heirs, personal representatives,
successors in interest, and assigns, as a part of the consideration hereof, does hereby
covenant and agree "as a covenant running with the land" that in the event facilities are
constructed, maintained, or otherwise operated on the Site described in the Lease and
Easement for a purpose for which a DOT program or activity is extended or for another
purpose involving the provision of similar services or benefits, the Tenant shall maintain
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530194 1
and operate such facilities and services in compliance with all other requirements
impose pursuant to Title 49, Code of Federal Regulations DOT, Subtitle A, Office of the
Secretary, Part 26, Nondiscrimination in Federally-Assisted Programs of the
Department of Transportation-effectuation of Title VI of the Civil Rights Act of 1964, and
as said Regulations may be amended.
(b) The Tenant for itself, its heirs, personal representatives,
successors in interest, and assigns, as a part of the consideration hereof, does hereby
covenant and agree "as a covenant running with the land" that: (1) no person on the
grounds of race, color, or national origin shall be excluded from participation in, denied
the benefits, of or be otherwise subjected to discrimination in the use of said facilities,
(2) that in the construction of any improvements on, over, or under such land and the
furnishing of services thereon, no person on the grounds of race, color, or national
origin shall be excluded from participation in, denied the benefits of, or otherwise be
subject to discrimination, (3) that the Tenant shall use the premises in compliance with
all other requirements imposed by or pursuant to Title 49, code of Federal Regulations,
Department of Transportation, Subtitle A, Office of the Secretary, Part 26,
nondiscrimination in Federally-Assisted Programs of the Department of Transportation-
Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be
amended.
c) In the event of breach of any of the above nondiscrimination
covenants, landlord shall have the right to terminate the lease, and to reenter and
repossess said land and the facilities thereon, and hold the same as if said lease had
never been made or issued. This provision does not become effective until the
procedures of 49 CFR Part 26 are followed and completed including expiration of
appeal rights.
(d) Tenant shall furnish its accommodations and/or services on
a fair, equal and not unjustly discriminatory basis to all users thereof and it shall charge
fair, reasonable and not unjustly discriminatory prices for each unit or services; provided
that the Tenant may be allowed to make reasonable and nondiscriminatory discounts,
rebates or other similar type of price reductions to volume purchasers.
(e) Non-compliance with Provision 4 above shall constitute a
material breach thereof and in the event of such non-compliance the Landlord shall
have the right to terminate this lease and the estate hereby created without liability
therefore or at the election of the Landlord or the United States either or both said
Governments shall have the right to judicially enforce provisions.
(f) Tenant agrees that is shall insert the above five provisions in
any sublease or contract by which said Tenant grants a right or privilege to any person,
form or corporation to render accommodations and/or services to the public on the
premises herein leased.
(g) The Tenant assures that it will undertake an affirmative
action program as required by 14 CFR Part 152, Subpart E, to insure that no person
shall on the grounds of race, creed color, national origin, or sex be excluded from
participating in any employment activities covered in 14 CFR Part 152, subpart E. The
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Tenant assures that no person shall be excluded on these grounds from participating in
or receiving the services or benefits of any program or activity covered by this subpart.
The Tenant assures that it will require that its covered sub-organizations provide
assurances to the Tenant that they similarly will undertake affirmative action programs
and that they will require assurances from their sub-organizations, as required by 14
CRF Part 152, Subpart E, to the same effort-
(h) The Landlord reserves the right to further develop or improve
the landing area of the Airport as it sees fit, regardless of the desires or view of the
Tenant, and without interference or hindrance from the Tenant or its agents or
employees.
(1) The Landlord reserves the right, but shall not be obligated to
the Tenant to maintain and keep in repair the landing area of the airport and all publicly-
owned facilities of the airport, together with the right to direct and control all activities of
the Tenant in this regard.
(j) The Lease and Easement shall be subordinate to the
provisions and requirements of any existing or future agreement between the Landlord
and the United States, relative to the development, operation, or maintenance of the
airport. Failure of the Tenant or any lawful occupant to comply with the requirements of
any existing or future agreement between the Landlord and the United States and which
continues after reasonable notice to make appropriate corrections shall be cause for
immediate termination of Tenant's rights under this Lease and Easement.
(k) There is hereby reserved to the Landlord, its successors and
assigns, for the use and benefit of the public, a right of flight for the passage of aircraft
in the airspace above the surface of the premises herein (leased, licensed, permitted).
This public right of flight shall include the right to cause in said airspace any noise
inherent in the operation of any aircraft used for navigation or flight through the said
airspace or landing at, taking off from or operation on the Palm Springs Regional
Airport.
(1) Tenant agrees to comply with the notification and review
requirements covered in Part 77 of the Federal Aviation Regulation in the event future
construction of a building is planned for the leased premises, or in the event of any
planned modification or alteration of any present or future building or structure situated
on the leased premises.
(m) The Tenant, by accepting this, expressly agrees for itself, its
successors and assigns that it will not erect nor permit the erection of any structure or
object, nor permit the growth of any tree on the land leased hereunder above the mean
sea level elevation of 530 feet. Landlord reserves the right to enter upon the land
leased, hereunder and to remove the offending structure or object and cut the offending
tree, all of which shall be at the expense of the Tenant.
(n) The Tenant, by accepting this Lease and Easement, agrees
for itself, its successors and assigns that it will not make use of the lease premises in
any manner which might interfere with the landing and taking off of aircraft from Palm
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Springs International Airport or otherwise constitute a hazard. In the event the aforesaid
covenant is breached, the owner reserves the right to enter upon the premises here
leased, and cause the abatement of such interference at the expense of the Tenant.
(o) It is understood and agreed that nothing herein contained
shall be construed to grant or authorize the granting of an exclusive right within the
meaning of Section 308a of the Federal Aviation Act of 1958 (49 U.S.0 1349a).
(p) The lease, and all the provisions hereof shall be subject to
whatever right the United States Government now has or in the future may have or
acquire, affecting the control, operation, regulation and taking over of said airport or the
exclusive or non-exclusive use of the airport by the United States during the time of war
or national emergency.
4.5 Remediation Obligations. If any inspection of the Site determines
that a release of hazardous materials or substances has occurred or if the presence or
threatened presence of any Hazardous Material is hereafter detected on or about the
Site, and the Hazardous Material is one which may have been introduced to the
Demised premises by Tenant or its agents, contractors, employees, or licensees during
the term of this Agreement or any previous agreement between City and Tenant, then
until such time as it is finally determined by a court of competent jurisdiction that such
Hazardous Material (hereinafter "Covered Hazardous Material') was released or
discharged on or about the Site by a person other than Tenant or its agents,
contractors, employees, or licensees, Tenant shall, at its sole expense, immediately
commence the remedial clean-up measures to assess, remove or remediate the
Covered Hazardous Material from the Demised Premises, monitor, mitigate and/or
dispose of the effects of such hazardous Material, as such may be required, and shall
diligently pursue such assessment, removal, remedial, clean-up, monitoring, disposal
and mitigation measures to completion and closure from the appropriate regulatory
agencies, all in compliance with applicable Environmental Laws. Such activities shall
be conducted in a diligent, expeditious, and safe manner so as to not allow any
dangerous or hazardous conditions to occur on the Site during or after such activities.
In addition, Tenant shall promptly repair all damage to the Demised Premises and the
improvements thereof caused by any such remedial removal, remedial clean-up,
monitoring, disposal or mitigation measures undertaken by or at the direction of Tenant
and return the Site to the condition it existed immediately prior to such remediation
activities.
4.6 Signs.
(a) Tenant for itself, its heirs, personal representatives,
successors in interest, and assigns, as a part of the consideration hereof, does hereby
covenant and agree "as a covenant running with the land" that in the event facilities are
constructed, maintained or otherwise operated on the Site for a purpose for which a
DOT program or activity is extended or for another purpose involving the provision of
similar services or benefits, the Tenant shall maintain and open;. 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 Demised Premises. Any sign not
constructed in accordance therewith shall be immediately removed by Tenant and, if
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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 Landlord.
4.7 Public Facilities, Ingress, Egress, and Quiet Enjoyment. Landlord
agrees that Tenant, upon payment of the rental hereunder and performing the
covenants of the Lease and Easement, may quietly have, hold, and enjoy the Demised
Premises during the term of the Lease and Easement, and that Tenant shall have the
non-exclusive right to use, in common with others, the public facilities at the Airport and
Tenant shall have a reasonable right of ingress to and egress from the Demised
Premises and the public facilities for its employees, visitors, and customers.
4.8 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, including without limitation the Landlord's municipal code. 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 Demised Premises on a uniform basis.
5. IMPROVEMENTS, MAINTENANCE, AND REPAIRS
5.1 Improvements, Alterations, and Fixtures. Tenant shall not make
any improvements to the Demised Premises or the Easement Area without the prior
written consent of Landlord, and any improvements to the Demised Premises or
Easement area, except movable tanks and trade fixtures, shall become at once a part of
the realty and shall at the expiration or earlier termination of this Lease and Easement
belong to Landlord free and clear of any liens or encumbrances. Any such
improvements shall be in conformance with the requirement of all municipal, state,
federal, and other governmental authorities, including requirements pertaining to the
health, welfare or safety of employees of the public and in conformance with reasonable
rules and regulations of Landlord. Landlord may require that any such improvements
be removed prior to the expiration of the term hereof. Any removal of improvements or
furniture and trade fixture 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 Demised Premises and Easement Area can be
surrendered in a good, clean, and sanitary condition as required by Section 5.2 hereof.
Any and all fixtures, improvements, 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.
5.2 Operation, Maintenance, and Repair. Tenant shall, subject to
Landlord's obligations hereinafter provided, at all times during the term hereof, and at
Tenant's sole cost and expense, keep, maintain, and repair the Site as well as any
improvements upon the Demised Premises, in good and sanitary order, condition, and
repair (except as hereinafter provided) including without limitation, the maintenance and
repair of any store front, doors, window casements, glazing, heating and air conditioning
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system, plumbing, pipes, electrical wiring, and conduits. Tenant shall also at its sole
cost and expense be responsible for any alterations or improvements to the Demised
Premises necessitated as a result of the requirement of any municipal, state or federal
authority. Tenant agrees on the last day of said term or sooner termination of this
Lease and Easement to surrender the Demised Premises, any interest in the Easement
Area, and any appurtenances thereto 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. Tenant shall periodically sweep and
clean the Easement Area and any sidewalks adjacent to the Site, as needed. Tenant
shall provide and maintain all public utilities to the Site, including all costs related to gas,
water, and electricity.
5.3 Free From Liens. Tenant shall keep the Site 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.
5.4 Construction Obligations. Tenant agrees to construct the
improvements to the extent shown on the attached Exhibit "D" at its sole cost and
expense. It is specifically agreed that, at the sole option of the Landlord, the
improvements constructed on the Site shall become to property of the Landlord, free
and clear from any and all encumbrances at the expiration or termination of the
agreement or any extension thereof, or if said Compressed Natural Gas vehicle fueling
station fails to operate for 12 consecutive months, at its sole cost and expense, Tenant
will remove any movable tanks and trade fixtures upon receipt of a thirty (30) day written
notice from the Landlord.
5.5 Landlord's Reserved Rights.
(a) Airport Development and Safety. Landlord reserves the right
to further develop or improve the aircraft operating area of the Airport as it sees fit, and
Landlord reserves the right to take any action it considers necessary to protect the
aerial approaches of the Airport against obstruction, together with the right to prevent
Tenant from erecting or permitting to be erected any building or other structure of the
Demised premises which, in the opinion of Landlord, would limit the usefulness of the
Airport or constitute a hazard to aircraft.
(b) Lease and Easement to United States. During the time of
war or national emergency, Landlord shall have the right to lease the landing area or
any part thereof to the United States Government for military or naval use, and, if such
lease is executed, the provisions of the Lease and Easement insofar as they are
inconsistent with the provisions of the Lease and Easement to the Government shall be
suspended and, in that event, a just and proportionate part of the rent hereunder shall
be abated, and the period of such closure shall be added to the term of this Lease and
Easement so as to extend and postpone the expiration thereof unless the Tenant
otherwise elects to terminate the Lease and Easement.
6, INSURANCE AND INDEMNIFICATION.
6.1 Insurance Provided by Tenant.
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(a) Tenant to Provide Personal Property Insurance. Tenant, at
its sole cost and 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 Demised Premises from loss or damage to the extent of their full
replacement value and shall provide plate glass coverage.
(b) Tenant to Provide Liability Insurance. During the entire term
of this Lease and Easement, the Tenant shall, at the Tenant's 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 Site and on any sidewalks directly adjacent to the Site
written on a per occurrence basis in an amount not less than ONE MILLION DOLLARS
($1,000,000.00).
(c) Tenant to Provide Worker's Compensation Insurance.
Tenant shall, at the Tenant's 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 Demised 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 6.1
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 canceled 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 Demised 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 insurance companies acceptable to Landlord, licensed to do business in the
state where the Demised Premises are located and rated B++:VII or better by Best's
Insurance Guide. In the event the City Manager of Landlord ("City Manager")
determines that (1) the Tenant's activities in the Demised 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
City Manager; provided that Tenant shall have the right to appeal a determination of
increased coverage by the City Manager to the City Council of Landlord within ten (10)
days of receipt of notice from the City 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 Demised Premises, its contents, or Tenant's 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,
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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.
6.2 Tenant to Provide Fire and Extended Coverage Insurance. Tenant, at
its sole expense, shall maintain fire and extended coverage insurance throughout the
term of this Lease and Easement written on a per occurrence basis on the Demised
Premises, its trade fixtures, equipment, personal property, and inventory within the
Demised Premises from loss or damage to the extent of the full replacement value.
6.3 Indemnification. Tenant, as a material part of the consideration to
be rendered to Landlord under this Lease and Easement, 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 Demised Premises and for injuries to persons in or about the Site, from any cause
arising at any time. Tenant agrees to indemnify the Landlord, its officers, agents, 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 (i)
the negligent performance of the work, operations, or activities of Tenant, its agents,
employees, subcontractors, or invitees, provided for herein, or (ii) arising from the use of
the Site by Tenant or its employees and customers, or arising from the failure of Tenant
to keep the Site in good condition and repair, as herein provided, or (iii) arising from the
negligent acts or omissions of Tenant hereunder, or (iv) arising from Tenant's negligent
performance of or failure to perform any term, provision covenant or condition of this
Lease and Easement, whether or not there is concurrent passive or active negligence
on the part of the Landlord, its officers, agents or employees but excluding such claims
or liabilities arising from the sole negligence or willful misconduct of the Landlord, its
officers, agents 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;
(b) Tenant will promptly pay any judgment rendered against the
Landlord, its officers, agents 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, and employees harmless from such claims or liabilities;
c) In the event the Landlord, its officers, agents 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 or employees, any and all costs and
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expenses incurred by the Landlord, its officers, agents or employees in such action or
proceeding, including but not limited to, legal costs and attorneys' fees.
7. ABANDONMENT AND SURRENDER.
7.1 Abandonment. Tenant shall not vacate or abandon the Demised
Premises at any time during the term of this Lease and Easement; and if Tenant shall
abandon, vacate, or surrender the Demised Premises or be dispossessed by process of
law, or otherwise, any personal property belonging to Tenant and left on the Demised
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 and Easement. The voluntary or other
surrender of this Lease and Easement 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 subtenancies, or may, at the option of Landlord, operate as an assignment
to it of any or all of such subleases or subtenancies.
8. DAMAGE AND DESTRUCTION OF PREMISES.
In the event of (a) partial or total destruction of the Demised Premises during the term of
this Lease and Easement which requires repairs to the Demised Premises, or (b) the
Demised Premises being declared unsafe or unfit for occupancy by any authorized
public authority for any reason, which declaration requires repairs to the Demised
Premises, Tenant shall forthwith make said repairs. No such damage or destruction
(including any destruction necessary in order to make repairs required by any
declaration made by any public authority) shall in any way annul or void this Lease and
Easement. Tenant shall promptly clean and remove all debris resulting from said
damage or destruction. Tenant shall take preliminary steps toward restoring the
improvements with thirty (30) days of the casualty and such improvements shall be
restored within a reasonable time thereafter. The Demised Premises shall be restored
to the condition they existed immediately before said casualty.
9. ASSIGNMENT AND SUBLETTING.
Tenant shall not assign this Lease and Easement or sublet the Demised Premises, or
any interest therein or in the Easement Area, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. For purposes of this
Lease and Easement, 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. Any such assignment or subletting shall be subject to all of the terms
and conditions of this Lease and Easement and proposed assignee shall assume the
obligations of Tenant under this Lease and Easement in writing in form satisfactory to
Landlord. The proposed assignee shall simultaneously provide to Landlord an estoppel
certificate in the form described in Section 13.2 hereafter. Consent by Landlord to one
assignment, subletting, occupation or use by another person shall not be deemed to be
a consent to any subsequent assignment, subletting, occupation or use by another
person. Any assignment or subletting without the prior written consent of Landlord shall
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be void, shall constitute a material breach of this Lease and Easement, and shall, at the
option of Landlord, terminate this Lease and Easement. Neither this Lease and
Easement 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 the proposed assignee, a history of the proposed assignee's business
experience and such other information as required by Landlord the criteria for
assignment as set forth herein are met. In addition, if Landlord determines that the
Monthly Rent payable to Landlord under this Lease and Easement is less than the fair
market rental value, as determined by Landlord, Landlord shall have the right to
condition its approval to an assignment or subletting on the increase of Monthly Rent to
the fair market rental value.
10. ENCUMBRANCE
(a) This Lease and Easement, or any right to or interest in, or any of
the improvements on the Demised Premises, may be encumbered with the written
approval of Landlord. No such encumbrance or addition thereto or extension thereof
shall be valid without said approval. Any such approved encumbrance shall be subject
to the covenants, conditions and restrictions set forth herein and to all rights of
Landlord.
(b) Any encumbrance must be confined to the leasehold interest of
Tenant or the subleasehold interest of a subtenant as may be approved by the
Landlord, and shall not affect in any way the Landlord's interest in the Site. The
encumbrance shall provide that the proceeds from fire or extended coverage insurance
shall be used for the repair or rebuilding of the leasehold improvements and not to
repay and part of the outstanding mortgage. Tenant agrees to furnish, as requested,
any financial statements or analyses pertinent to the encumbrance that Landlord may
deem necessary to justify the amount, purpose and terms of said encumbrance.
c) In the event of default by the Tenant of the terms of an approved
encumbrance, the encumbrancer may exercise any rights provided in such approved
encumbrance provided that, before any sale of the leasehold estate, whether by power
of sale or foreclosure, the encumbrancer shall give to Landlord notice of the same
character as is required to be given to Tenant by such encumbrancer pursuant to the
loan documents and/or the laws of the State of California and Landlord shall be given
an additional thirty (30) days in which to cure the default after the time for tenant to cure
has expired.
(d) If any sale under the approved encumbrance occurs, whether by
power of sale or foreclosure, and the purchaser at such sale is the encumbrancer, the
encumbrancer may sell and assign the Lease and Easement without any further
consent of Landlord provided that the assignee shall agree in such assumption by the
assignee, the encumbrancer shall be released from all future obligations of the Tenant
under the Lease and Easement. If a sale under the approved encumbrance occurs,
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and the purchaser is a party other than the encumbrancer, said purchaser, as
successor in interest to the Tenant, shall be bound by all the terms and conditions of the
Lease and Easement and the purchaser shall assume in writing the obligations of
Tenant hereunder.
(e) If notice of such sale shall be given and the defaults or any of them
upon which such notice of sale is based shall then continue, Landlord shall have the
right to correct such defaults at any time prior to the date of sale or foreclosure, and to
terminate such leasehold upon paying to the encumbrancer the balance of the
encumbrance as hereinafter defined.
(f) "Balance of encumbrance" shall mean the amount of principal
remaining unpaid on a note secured by a trust deed or mortgage of an interest plus
accrued and past due interest thereon and expenses incurred by the lender in
connection with foreclosure including by not limited to, fire insurance premiums, title
insurance expenses, recording fees, appraisal fees, credit reports and any tax reporting
services and additional expenditures paid by the lender on additions, betterments and
rehabilitations of improvements on the property encumbered pursuant to plans
approved by landlord, which consent may not be unreasonably withheld, and other
expenses necessary to place the improvements in marketable condition, such adjusted
principal to be paid in case or, at the option of Landlord, amortized over the term and in
accordance with the schedule set forth in said note, the interest rate on the unpaid
balance thereto to be as set forth in said note.
(g) Landlord agrees to provide encumbrancer written notice of any
default by Tenant under this lease and an opportunity to cure at the time notice of such
default is provided to Tenant and give encumbrancer thirty (30) days to cure a monetary
default or forty-five (45) days to cure a non-monetary default cannot be cured within
such period of forty-five days, encumbrancer shall have a reasonable time to cure such
default provided that encumbrancer commences to cure within said forty-five days and
diligently prosecutes the cure to completion. Such period of time shall include the time
to complete a foreclosure action if encumbrancer needs to gain possession of the
Demise Premises to cure said default by Tenant.
11. DEFAULT AND REMEDIES.
11.1 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 and Easement by Tenant: (a) the failure to
pay any rental 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 failure to perform any of Tenant's agreements or obligations
hereunder (exclusive of a default in the payment of money) where such default shall
continue for a period of thirty (30) days after written notice thereof from Landlord to
Tenant which notice shall be deemed to be the statutory notice so long as such notice
complies with statutory requirements; (c) the vacation or abandonment of the Demised
Premises by Tenant; (d) the making by Tenant of a general assignment for the benefit
of creditors; (e) the filing by Tenant of a voluntary petition in bankruptcy or the
adjudication of Tenant as a bankrupt; (f) the appointment of a receiver to take
is
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possession of all or substantially all the assets of Tenant located at the Demised
Premises or of Tenant's leasehold interest in the Demised Premises; (g) the filing by
any creditor of Tenant of an involuntary petition in bankruptcy which is not dismissed
within sixty (60) days after filing; or (h) the attachment, execution or other judicial
seizure of all or substantially all of the assets of Tenant or Tenant's leasehold where
such an attachment, execution or seizure is not discharged within sixty (60) days. Any
repetitive failure by Tenant to perform its agreements and obligations hereunder, though
intermittently cured, shall be deemed an incurable default. Two (2) breaches of the
same covenant within a sixty (60) day period, a notice having been given pursuant to (a)
or (b) above for the first breach, or three (3) of the same or different breaches at any
time during the term of this Lease and Easement for which notices pursuant to (a) or (b)
above were given for the first two (2) breaches shall conclusively be deemed to be an
incurable repetitive failure by Tenant to perform its obligations hereunder.
In the event of any such default or breach by Tenant, Landlord may at any
time thereafter, without further notice or demand, rectify or cure such default, and any
sums expended by Landlord for such purposes shall be paid by Tenant to Landlord
upon demand and as additional rental hereunder. In the event of any such default or
breach by Tenant, Landlord shall have the right (1) to continue the lease in full force and
effect and enforce all of its rights and remedies under this Lease and Easement,
including the right to recover the rental as it becomes due under this Lease and
Easement, or (ii) Landlord shall have the right at any time thereafter to elect to terminate
the Lease and Easement and Tenant's right to possession thereunder. Upon such
termination, Landlord shall have the right to recover from Tenant:
(a) The worth at the time of award of the unpaid rental which
had been earned at the time of termination;
(b) The worth at the time of award of the amount by which the
unpaid rental which would have been earned after termination until the time of award
exceeds the amount of such rental loss that the Tenant proves could have been
reasonably avoided;
c) The worth at the time of award of the amount by which the
unpaid rental For the balance of the term after the time of award exceeds the amount of
such rental loss that the Tenant proves could be reasonably avoided; and
(d) Any other amount necessary to compensate the Landlord for
all the detriment proximately caused by Tenant's failure to perform its obligations under
the lease or which in the ordinary course of things would be likely to result therefrom.
The "worth at the time of award" of the amounts referred to in
subparagraphs (1) and (ii) above shall be computed by allowing interest at three percent
(3%) over the prime rate then being charged by Bank of America, N.A. but in no event
greater than the maximum rate permitted by law. The worth at the time of award of the
amount referred to in subparagraph (iii) above shall be 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%), but in no event greater than ten percent (10%).
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As used herein "rental" shall include the Quarterly Rental, percentage
rental equal to the average percentage rental paid or payable by Tenant for the last
twelve (12) months or such lesser period as Tenant has been open for business, other
sums payable hereunder which are designated "rental" or "additional rental" and any
other sums payable hereunder on a regular basis such as reimbursement for real estate
taxes.
Such efforts as Landlord may make to mitigate the damages caused by
Tenant's breach of this Lease and Easement shall not constitute a waiver of Landlord's
right to recover damages against Tenant hereunder, nor shall anything herein contained
affect Landlord's right to indemnification against Tenant for any liability arising prior to
the termination of this Lease and Easement for personal injuries or property damage,
and Tenant hereby agrees to indemnify and hold Landlord harmless from any such
injuries and damages, including all attorney's fees and costs incurred by Landlord in
defending any action brought against Landlord for any recovery thereof, and in
enforcing the terms and provisions of this indemnification against Tenant.
Notwithstanding any of the foregoing, the breach of this Lease and
Easement by Tenant, or an abandonment of the Demised Premises by Tenant, shall not
constitute a termination of this Lease and Easement, or of Tenant's right of possession
hereunder, unless and until Landlord elects to do so, and until such time Landlord shall
have the right to enforce all of its rights and remedies under this Lease and Easement,
including the right to recover rent, and all other payments to be made by Tenant
hereunder, as they become due. Failure of Landlord to terminate this Lease and
Easement shall not prevent landlord from later terminating this Lease and Easement or
constitute a waiver of Landlord's right to do so.
11.2 No Waiver. Acceptance of rental hereunder shall not be deemed a
waiver of any default or a waiver of any of Landlord's remedies.
11.3 landlord's Default. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but in no
event later than thirty (30) days after written notice by Tenant to Landlord and to the
holder of any first mortgage or deed of trust covering the Premises whose name and
address shall have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
performance then Landlord shall not be deemed in default if Landlord commences
performance within a (30) day period and thereafter diligently prosecutes the same to
completion. In no event shall Tenant have the right to terminate this Lease and
Easement as a result of Landlord's default and Tenant's remedies shall be limited to
damages and/or an injunction.
11.4 Termination. This Lease and Easement may be terminated in whole
or in part in writing by Landlord in the event of substantial failure by the Tenant to fulfill
its obligations under this Lease and Easement, or it may be terminated by Landlord for
necessity or convenience provided that Landlord provide Tenant with thirty (30) days
written notice. If this Lease and Easement is terminated under the provisions of this
Section 11.4 for necessity or convenience, City shall reimburse Tenant for Tenant's
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actual construction cost of any new improvements installed subsequent to the execution
of this Lease and Easement and approved by Landlord pursuant to the provisions of
Section 5.1 of this Lease and Easement, less depreciation at the rate of 33.33% per
year from date of this Lease and Easement, regardless of when such improvements are
installed. The reimbursement provided herein shall be Tenant's sole and exclusive
remedy and form of compensation, costs or damages, including Relocation Assistance
benefits (Sec. 7260 et sea, of the California Government Code), due to termination, re-
entry, or acquisition by City.
12. CONDEMNATION.
In the event a condemnation or a transfer in lieu thereof results in a taking of any portion
of the Demised Premises, Landlord may, or in the event a condemnation or a transfer in
lieu thereof results in a taking of twenty-five percent (25%) or more of the Demised
Premises, Tenant may, upon written notice given within thirty (30) days after such taking
or transfer in lieu thereof, terminate this Lease and Easement. Tenant shall not be
entitled to share in any portion of the award and Tenant hereby expressly waives any
right or claim to any part thereof. Tenant shall, however, have the right to claim and
recover, only from the condemning authority (but not from Landlord), any amounts
necessary to reimburse Tenant for the cost of removing stock and fixtures. If this Lease
and Easement is not terminated as above provided, Landlord shall use a portion of the
condemnation award to restore the Demised Premises.
13. MISCELLANEOUS.
13.1 Entry and Inspection.
Tenant shall permit Landlord and his agents to enter into and upon the Demised
Premises at all reasonable times for the purpose of inspecting the same or for the
purpose of maintaining the Demised Premises as required by the terms of this Lease
and Easement 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
Demised Premises are located any usual or ordinary "For Sale" signs or any signs for
public safety as determined by Landlord. Landlord shall be permitted to do any of the
above without any rebate of rent and without any liability to Tenant for any loss of
occupation or quiet enjoyment of the Demised Premises thereby occasioned. Tenant
shall permit Landlord, at any time within six (6) months prior to the expiration of this
Lease and Easement, to place upon the Demised Premises any usual or ordinary "For
Lease and Easement" signs, and during such six (6) month period Landlord or his
agents may, during normal business hours, enter upon said Demised Premises and
exhibit same to prospective tenants.
13.2 Estoppel Certificate.
If, as a result of a proposed sale, assignment, or hypothecation of the Demised
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 "E" addressed
to any existing or proposed mortgagee or proposed purchaser, and to the Landlord.
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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.
13.3 Jurisdiction and Venue. The parties hereto agree that the State of
California is the proper jurisdiction for litigation of any matters relating to this Lease and
Easement, 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.
13.4 Partial Invalidity. If any term, covenant, condition or provision of
this Lease and Easement 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.
13.5 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.
13.6 No Oral Agreements. This (1) Lease and Easement covers in full
each and every agreement of every kind or nature whatsoever between the parties
hereto concerning this Lease and Easement, (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.
13.7 Authority. In the event that Tenant is a corporation or a partnership,
each individual executing this Lease and Easement 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 and Easement 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 and Easement is binding upon said corporation or
partnership in accordance with its terms. Tenant represents and warrants to Landlord
that the entering into this Lease and Easement does not violate any provisions of any
other agreement to which Tenant is bound.
13.8 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 venturer with Tenant, and that the provisions
of this Lease and Easement and the agreements relating to rent payable hereunder are
included solely for the purpose of providing a method whereby rental payments are to
be measured and ascertained.
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13.9 Nondiscrimination. Tenant herein covenants by and for itself, its
heirs, executors, administrators and assigns and all persons claiming under or through
it, and this Lease and Easement is made and accepted upon and subject to the
following conditions: That there shall be no discrimination against or segregation of any
person or group of persons on account of race, sex, marital status, color, creed, national
origin or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or
enjoyment of the Demised Premises herein leased, nor shall the Tenant itself, or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, sublessees, subtenants or vendees in the Demised
Premises.
13.10 Notices. Wherever in this Lease and Easement it shall be required
or permitted that notice and demand be given or served by either party to this Lease
and Easement 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, to City of Palm Springs, P.Q. Box 2743, Palm Springs, California, 92263, Attn:
City Manager, and if to Tenant, 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.
13.11 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 party'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 and Easement.
13.12 FAA Review. Tenant shall be solely responsible for any charges,
assessments, fines, penalties, or costs of any kind or nature as a result of the FAA's
review of this Lease and Easement and any modifications, revisions, or changes
directed or otherwise required by the FAA to the Lease and Easement or the Tenant's
use or occupancy of the Demised Premises and Tenant shall defend and hold the City
and its officers, employees, and agents harmless from any damage or cost Tenant may
incur as a result thereof. Tenant understands and acknowledges that Tenant is
assuming full responsibility for any deficiency in the Lease and Easement or Tenant's
use of the Demised Premises on or before the effective date of this Lease and
Easement identified by the FAA and any cure that the FAA may require regarding the
Lease and Easement or the Tenant's use of the Demised Premises on or before the
effective date of this Lease and Easement.
13.12 Exhibits and Addenda. The Exhibits and Addenda attached to this
Lease and Easement are made a part hereof as if fully set forth herein. In the event of
a conflict between the terms and provisions of an Addenda and the terms and
provisions of this Lease and Easement, the terms and provisions of the Addenda shall
prevail.
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IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement as of the date first written above.
APPROVED BY CITY COUNCIL "Landlord"
Molg83 121Z61200(a CITY OF PALM SPRINGS
ASq to A California Charter City
Dated: o� �t°cpZbob gY .
City Manager ,�
APPROVED AS TO
FORM ATTEST:
By: / PLG+ gam.
Title: `, / Title. C°1-r`(
"Tenant"
CLEAN ENERGY, Inc.
A California corporation
Dated: By.
Titile: �a l tr4
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By:
Title: C- ,—
(Attach corporate acknowledgments)
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EXHIBIT "A"
PLOT PLAN OF SITE AND DEMISED PREMISES
Plot Plan: the entire "Site," the "Demised Premises," and the "Easement Area"
(See Section 1 .1 of the Lease)
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EXHIBIT "A"
(See Plot Plan)
Demised Premises
Dimensions
• Fuel Island 1,125 square feet x 2 Islands=2,250 SF
• Compressor Compound 2,500 square feet =2,500 SF
TOTAL 4,750 SF
Rental
• 4,750 SF x $0.10 SF/Month =$475.00 x 12 =$5,700 Annual Rent
Demised Premises are shown in bold on the Plot Plan
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EXHIBIT "B"
Use of Premises
This Exhibit expresses the terms and conditions pursuant to which Landlord authorizes
Tenant to design, construct, operate, and maintain, at Tenant's sole cost and expense,
an upgraded and expanded Compressed Natural Gas ("CNG") motor vehicle fueling
station (the "Station" or the "Demised Premises") on Palm Springs International Airport
("PSP") property in the City of Palm Springs. The Station is generally located at 3400
E. Tahquitz-Canyon Way, Palm Springs, CA 92262 and is owned or controlled by the
Landlord for the use of PSP and other authorized users.
The CNG Station shall include 2 (two) compressors and controls and equipment, thirty
thousand (30,000) standard cubic feet of storage capacity for fast filling 3600 psig
vehicles, at least two (2) two-hose 3600 psi temperature compensated dispensers
capable of fueling two (2) vehicles simultaneously at a minimum rate of three (3) gallons
per minute per vehicle, and magnetic card readers located conveniently for fueling
access which are capable of communicating with Tenant's billing system, and a
universal card system capable of reading all major credit cards. The CNG dispensers
shall be designed for 24 hour per day unlimited public access for all CNG vehicles
including heavy-duty vehicles at the "Public Dispensers".
CNG Station Operation and Maintenance: Tenant shall provide scheduled, routine and
emergency maintenance service for the term of Station ownership and shall repair or, at
its option or upon request of the "City", replace, any defective equipment at its expense.
Tenant shall perform other necessary maintenance or repair or replace parts or
equipment damaged by negligence, abuse, or neglect of others. In the event such
damage was caused solely by the negligence or willful conduct of PSP personnel, PSP
shall reimburse Tenant for its actual out of pocket expenses.
The additional operations and maintenance conditions shall apply to Tenant:
1. Provide all maintenance records for the facility to the Landlord on an annual basis.
This shall include, but not limited to, routine and scheduled maintenance, emergency
maintenance and action taken to resolve major operational problems. Any safety near
misses or accidents shall be reported to the Landlord within 12 hours.
2. The natural gas for the CNG station during the agreement period must meet the
California Air Resources Board (CARE) specification and the water content shall not
exceed 7#/million standard cubic foot (MMSCF).
3. Tenant to have each of the CNG dispensers calibrated once every 2 years to
California Weights and Measures standards, and submit copies to the Landlord.
4. Jointly conduct with the Landlord a mutual annual operation, safety and code
inspection of the CNG station.
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5. If a safety incident or accident occurs, Tenant is to immediately shutdown the CNG
station and report the incident to the Landlord. Tenant shall not restart the CNG station
without approval of the Landlord and such approval shall be made within twenty-four
hours of Tenant's request for approval unless the Landlord expressly finds that the
shutdown should be maintained for public health or safety reasons.
CNG Service Calls: In the event of an emergency involving substantial risk of injury or
material property damage at the Station, Tenant shall respond within forty-eight (48)
hours following notification by PSP or other entities. In the event of other serious
operational difficulties, Tenant shall respond within four (4) hours following notification
and repairs shall be undertaken and completed with reasonable diligence.
CNG Training: Tenant shall offer reasonable training programs to educate PSP's or
other Landlord personnel as to procedures for the safe and efficient use of the Station,
including, without limitation, procedures relating to safe vehicle fueling, troubleshooting
and appropriate emergency procedures.
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53911341
EXHIBIT "C"
RENTAL/COMPENSATION
Rental obligations of the Tenant shall include, but not be limited to the following:
1) TENANT shall pay the Landlord $0.10 per square foot of the demised premises
monthly land rental.
2) TENANT shall pay the Landlord on a quarterly basis beginning at the end of the
first calendar quarter after the Station begins operation a percentage rental in the
amount of $0.025 per gasoline gallon equivalent (125,000 BTU/gallon) (a "Gasoline
Gallon") sold at the Station to anyone other than to the City based on the posted Tenant
retail price. The percentage rental shall not apply to sales of CNG to the City for use in
CNG Vehicles owned or leased by City.
3) TENANT shall provide the City of Palm Springs with CNG at a price per gasoline
gallon equivalent (126,000 BTU/gallon) (a "Gasoline Gallon") equal to the posted retail
price by TENANT less $0.25 per gallon during the immediately proceeding calendar
month.
4) Landlord shall, at mutually agreeable times, permit and cooperate with TENANT
in hosting demonstrations and seminars for interested members of the public, press and
other fleet operators for the promotion of clean air programs within the City of Palm
Springs and the Desert Resort Communities.
5) City and PSP operate a vast array of alternative Fuel vehicles, utilizing CNG as
the primary fuel source for internal combustive engines. City CNG vehicles are utilized
on a twenty-four (24) hour basis. By having the CNG fueling station located on Airport
property, City employees are able to respond to emergency situations in a timely
manner and/or re-fill vehicles efficiently without causing unnecessary delays in
emergency response times.
6) Landlord acknowledges and will authorize inclusion of a PSP logo in advertising
materials produced by TENANT for the purposes of promoting clean air programs on a
statewide, nationwide, and international level. Should commercial filming occur on the
Demised Premises, TENANT shall guarantee all filming fees due the Landlord, as
provided in the City of Palm Springs' Comprehensive Fee Schedule, shall be paid.
7) TENANT shall utilize its professional expertise in applying for federal grant
programs, including but not limited to those sponsored by the Federal Aviation
Administration (FAA) and the South Coast Air Quality Management District (SCAQMD)
for vehicle and equipment acquisition, CNG fueling station upgrades, or other
associated incentive programs that promote air quality standards.
8) TENANT will maintain the Demised Premises, the Easement Area, and the
roadway entrances along the entire width of the Site in a good and attractive condition
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and shall be responsible for the provision of water and electricity to the Site. Said
maintenance shall meet the same quality standard as the Airport Entrance Road areas.
9) The monthly Tenant payment for rental/compensation listed above shall include
sufficient information as may be requested by Landlord to accurately document
Tenant's compliance with the provisions of this Exhibit.
10) The payment obligations of this Exhibit are based on the assumption that Tenant
will sell approximately 150,000 GEG per year at the upgraded and expanded CNG
station.
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EXHIBIT V'
CONSTRUCTION OBLIGATIONS
All such improvements shall be constructed pursuant to construction plan and
specifications, prepared by a professional engineer or architect and retained by Tenant
and licensed to practice in the State of California, that are in sufficient detail to enable
potential contractors and subcontractors to make reasonably accurate bid estimates
and to enable Landlord to make an informed judgment about the design and quality of
construction. Following approval by the Landlord, said plans and specifications shall be
subject to the prior written approval of Landlord.
Tenant shall provide Landlord with ten (10) days advance written notice of Tenant's
intent to commence construction of the improvements so that Landlord may post
appropriate notices of non-responsibility. Tenant shall not commence construction until
Tenant has procured all necessary permits and approvals required by all federal, state
and local governmental authorities with jurisdiction. All improvements shall be
constructed within the boundaries of the Demised Premises, shall be constructed in a
good and workmanlike manner, shall substantially comply with the approved plans and
specifications for the improvements and shall comply with all applicable governmental
permits, laws, ordinances and regulations. Tenant is responsible for all construction
material and equipment required for the work and shall keep such material and
equipment stored on the Demised Premises during construction. Tenant shall diligently
prosecute the construction of the improvements to completion. The improvements shall
be completed not later than six (6) months from the Commencement Date. Upon
substantial completion of the improvements, Tenant shall file or cause to be filed
appropriate notices of completion in the Riverside County Recorder's Office.
Tenant shall pay or cause to be paid the total cost and expense of all works of
improvement constructed upon the Demised Premises by Tenant. Tenant shall not
suffer or permit to be enforced against the Demised Premises or any part of it any
mechanic's, material man's, contractor's, subcontractor's or design it may arise.
However, Tenant may in good faith and at Tenant's expense contest the validity of any
such asserted lien, claim or demand provided Tenant has furnished a bond required
pursuant to the California Civil Code to free the Demised Premises from the effect of
such lien. If Tenant fails to discharge such lien, Landlord shall have the right, but not
the obligation, to pay or otherwise discharge such lien. Tenant shall reimburse Landlord
for all sums expended by Landlord therefore, plus interest at the rate of ten percent
(10%) per annum from the date expended by Landlord until fully repaid. Any such
amounts expended by landlord plus interest shall be deemed to be additional rental.
Tenant hereby agrees to indemnify, protect, defend and hold Landlord harmless from
any loss, expense (including reasonable attorneys' fees) or liability arising out of the
work of improvement.
Improvements shall include:
CNG Station: Such station shall include 2 (two) compressors and controls and
equipment, thirty thousand (30,000) standard cubic feet of storage capacity for fast
filling 3600 psig vehicles, at least Iwo (2) two-hose 3600 psi temperature compensated
dispensers capable of fueling two (2) vehicles simultaneously at a minimum rate of
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three (3) gallons per minute per vehicle, and magnetic card readers located
conveniently for fueling access which are capable of communicating with Tenant's
billing system, and a universal card system capable of reading all major credit cards.
The CNG dispensers shall be designed for 24 hour per day unlimited public access for
all CNG vehicles including heavy-duty vehicles at the "Public Dispensers".
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5391941
EXHIBIT "E"
ESTOPPEL CERTIFICATE
Tenant:
Landlord: CITY OF PALM SPRINGS, a California Charter City, dba PALM SPRINGS
INTERNATIONAL AIRPORT
Date of Lease and Easement:
Demised Premises:
To:
The undersigned hereby certifies as follows:
1. The undersigned is the tenant ("Tenant") under the above-referenced
lease ("Lease and Easement") covering the above-referenced premises ("Demised
Premises").
2. The Lease and Easement constitutes the entire agreement between
landlord under the Lease and Easement ("Landlord") and Tenant with respect to the
Demised Premises and the Lease and Easement has not been modified, changed,
altered or amended in any respect except as set forth above.
3. The term of the Lease and Easement commenced on
, 20_, and, including any presently exercised option or renewal
term, will expire on , 20 . Tenant has accepted possession
of the Demised 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 Demised 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 Monthly Rent in installments of
$ per month, and such monthly installments have been paid not more
than one month in advance. In addition, the Lease and Easement requires Tenant to
pay percentage rent each month in the amount of percent ( %) and percentage
rent has been paid through 20 . 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 Easement and is asserting no offsets or credits against
either the rent or Landlord. Tenant has no claim against Landlord for any security or
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other deposits except $ which was paid pursuant to the Lease and
Easement.
6. Tenant has no option or preferential right to lease or occupy additional
space within the Property of which the Demised Premises are a part. Tenant has no
option or preferential right to purchase all of any part of the Demised Premises nor any
right or interest with respect to the Demised Premises other than as Tenant under the
Lease and Easement. Tenant has no right to renew or extend the term of the Lease
and Easement except as set forth in the Lease and Easement.
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 and Easement.
8. There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, any assignment for the benefit of creditors, 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 and
Easement 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:
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