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HomeMy WebLinkAbout7/11/2012 - STAFF REPORTS - 2.I. A. pALM Sp4 iy c V N ! R k CU4i011t0,OS / Cg41FORN�P CITY COUNCIL STAFF REPORT DATE: JULY 11, 2012 CONSENT CALENDAR SUBJECT: APPROVING A SECOND AMENDED AND RESTATED LEASE AGREEMENT WITH PALM CANYON THEATRE, INC. FOR CITY- OWNED PROPERTY LOCATED AT 538 NORTH PALM CANYON DRIVE, AT FRANCES STEVENS PARK, FOR A TERM OF THREE YEARS AT THE CURRENT RENTAL RATE PLUS' ANY APPLICABLE CONSUMER PRICE INDEX ADJUSTMENTS, SUBJECT TO A SHARED USE AGREEMENT WITH THE PALM SPRINGS INTERNATIONAL FILM FESTIVAL FROM: David H. Ready, City Manager BY: Community and Economic Development Department SUMMARY At the request of City Council, staff issued a Request for Proposals (RFP) for the lease of the Frances Stevens Park Cultural Center, currently leased and operated by the Palm Canyon Theatre Group and the Desert Art Center at 538 and 550 North Palm Canyon Drive, respectively. Following the RFP process and upon evaluations of all proposals submitted by resident performing arts and visual arts operators, Staffs recommendation is to enter into new lease agreements with each of the current tenants, the Palm Canyon Theatre, Inc. for a period of three years at the current rental rates, plus any consumer price index adjustments that are applicable. Desert Art Center lease will return at a future meeting. RECOMMENDATION: 1. Approve Agreement No. THE SECOND AMENDED AND RESTATED LEASE AGREEMENT WITH PALM CANYON THEATRE, INC. FOR CITY-OWNED PROPERTY LOCATED AT 538 NORTH PALM CANYON DRIVE, AT FRANCES STEVENS PARK, FOR A TERM OF THREE YEARS, SUBJECT TO A SHARED USE AGREEMENT WITH THE PALM SPRINGS INTERNATIONAL FILM FESTIVAL 2. AUTHORIZE THE CITY MANAGER AND/OR HIS DESIGNEE TO EXECUTE ALL NECESSARY DOCUMENTS. ITEM NO.= City Council Staff Report (July 11, 2012)--Page 2 (Palm Canyon Theatre Lease) STAFF ANALYSIS: City Council directed staff to issue a Request for Proposals for the operation of the Frances Stevens Cultural Arts Center at 538 and 550 North Palm'Canyon Drive. The requirement for an RFP process was not due to dissatisfaction with the existing operators but rather a philosophy that since both tenants have been in the facility for at least 15 years, the City should entertain proposals from other potential operators. The RFP was finalized in early February and posted on the City's website on February 13, 2012. Staff contacted a number of local theater and visual arts organizations in addition to ArtsOasis, an initiative of the Coachella Valley Economic Partnership, established to enrich the arts and cultural life of the California Desert through promotion, networking, education and advocacy on behalf of the creative community. ArtsOasis included the RFP opportunity in their monthly newsletter that is distributed to over 300 subscribers and over 1,000 other interested people in the creative arts. A mandatory proposal workshop and tour was held at both the Palm Canyon Theater and Desert Art Center facilities on Tuesday, February 21, 2012. There were representatives from five (5) different organizations in attendance, including the existing tenants. The proposals were due by March 8, 2012 and the City received three (3) proposals, two proposals from the existing tenants and a second proposal for the Palm Canyon Theatre space submitted by the Desert Ensemble Theater Group. Proposals were evaluated based on the following criteria: mission statement (10%), business plan outline (30%), proposed outreach activities (15%), readiness (10%), financial capacity (20%), performance history/references (5%), inviting innovation (5%) and, service and maintenance (5%). The proposals were evaluated by four individuals, two city staff and two members of the Public Arts Commission. The Desert Art Center was the sole proposer for their current space so their evaluation was essentially to identify any potential improvements that could be made to better meet the City's criteria for an operator of the facility. Their lease will return to Council at a future date. In the case of the Palm Canyon Theatre space, there were two proposals received, one from the current operator and the other from the Desert Ensemble Theater Group. The Palm Canyon Theatre Group's proposal was scored significantly higher by each of the four evaluators than the Desert Ensemble Theater Group's proposal. Based on the results of the evaluation scoring, the recommendation is to continue to lease the facilities to the existing tenants. Based on direction from Council, Staff has prepared a Second Amended and Restated Lease with Palm Canyon Theatre, Inc. Most of the terms are similar to the current lease, though it is for three years instead of the previous five years Other changes to 02 City Council Staff Report (July 11, 2012)--Page 3 (Palm Canyon Theatre Lease) the Lease clarify certain provisions regarding the shared use of the facility and increase the operational standards of the facility. Palm Canyon Theatre Palm Canyon Theatre, Inc. currently leases the theater located at 538 North Palm Canyon Drive, and has run a successful theater there since 1997. The facility, which was a former elementary school gymnasium/auditorium, was built out in 1997 by the Palm Canyon Theatre organization to accommodate live theater. The Lease was originally entered into in July 1997 with a term of five years. On June 5, 2002, the City and Tenant entered into the Third Amendment to the Lease extending the term of the Lease through April 30, 2007. Since the original Lease, there have been five Amendments to the Lease. The lease was most recently amended and restated in 2007 and expired on April 30, 2012. One significant change made to the Palm Canyon Theatre lease in 2007, upon the extension of the lease with Palm Canyon Theatre, was to provide for a separate Palm Canyon Theatre Use Agreement with the Palm Springs International Film Festival (PSIFF) to allow use of the facility when not in use by the Tenant, approximately 15 days in January and (originally) up to 10 days in late Augustlearly September; PSIFS also desired to use the Theater for evening Screenings. The PSIFF began to use the Theater for their festival in January, 2007 and for various Palm Springs Film Society events, and the Agreement allowed for and coordinated the use of the Theater between PSIFF and Palm Canyon Theatre. A number of the dates have changed over the past several years, notably the Short Fest moving from August to June, so there are some modifications to the Use Agreement between the parties that will be inecessary, too. The Amended Lease also clarifies some of the provisions of the "Non-Exclusive Use' of the facility, both by the PSIFF and by other Tenants that the City, acting under its own authority under the Lease as Landlord, would Lease the Premises. In the event of a breach of the Rules and Regulations in the Lease by another Tenant over which the Tenant would have limited control, the liability for such breach by the Tenant would then be limited. Since those major improvements undertaken by the City, Redevelopment Agency and PSIFF in 2006-2007, resulting in new seating and a number of technical improvements, the City/Agency have undertaken additional improvements in the building, notably the Agency undertook the installation of fire sprinklers in the building, a necessary measure for any public assembly building. The Tenant has recently received a grant to improve the sound system as well, part of their ongoing effort to improve the quality of the experience for their theatre patrons. Part of the justification for proposing the current lease rate, plus CPI, rather than a stepped up rent is that the Tenant has recently been required to pay sewer charges in the amount of $300.00 per month, which resulted from a Veolia audit of sewer 03 City Council Staff Report (July 11, 2012)--Page 4 (Palm Canyon Theatre Lease) collections. This charge began in the current year and was not considered in the previous lease. Finally, while Article 11 was not amended in this Lease, it does contain obligations of the City to maintain the park and courtyard premises as well as the roof. The recent wind storm on January 21, 2012 blew over the two very mature ficus trees in the eastern courtyard, opening the east face of the property to unfiltered sun most of the day (and increasing the cooling bills). It also did some damage to the roof tiles, which are just now being repaired. No plans have been developed by the City yet for re- landscaping the court yard, as such plans would be required to go to the Historic Site Preservation Board and the Architectural Advisory Commission. These tasks remain the responsibility of the City. FISCAL IMPACT: There is no fiscal impact to the City from the status quo. Tenant shall pay rent at current rates plus scheduled CPI. L J hn S Ra ond, Diana Shay ire r of Community and Redevelopment Coordinator nomic Development David H. Ready Thomas J. son City Manager Assistant City Manager Attachments: 1. Second Amended and Restated Lease 04 SECOND AMENDED AND RESTATED LEASE By and Between THE CITY OF PALM SPRINGS and THE PALM CANYON THEATRE, INC. 05 538963A RECITALS A. On July 9, 1997, City and Tenant entered into that certain Lease Agreement ("Lease") for a portion of real property described in Exhibit "A" attached and incorporated into the Lease ("Legal Description of the Premises") B. On October 1, 1997, City and Tenant entered into that certain First Amendment to Lease, increasing Tenant's exclusive use of floor area at the Premises, increasing the monthly rental and prepaid rent amount, and allowing certain Tenant electrical improvements and repairs on the Premises. C. On June 17, 1998, City and Tenant entered into that certain Second Amendment and Addendum to adjust the rent and reflect the cost of public improvements made by Tenant, to clarify the responsibility for certain public improvements, and to change the accounting requirements of the Lease. D. On June 5, 2002, City and Tenant entered into that certain Third Amendment to Lease extending the term of the Lease through April 30, 2007, adjusting the Monthly Rental, amending provisions relating to the use of the Premises and late payment. E. On February 16, 2007, City and Tenant entered into that certain Fourth Amendment to Lease for the purpose of incorporating and coordinating Tenant improvements with the Palm Springs International Film Festival, making a $200,000 Tenant improvement allowance to Tenant for the Premises. F. On May 1, 2007, City and Tenant entered into that certain Amended and Restated Lease extending the term of the Lease through April 30, 2012. G. On February 1, 2012, the City issued a Request for Proposals (RFP) for a Resident Performing Arts and/or Visual Arts Company for the Frances Stevens Park Cultural Arts Center in Palm Springs, and Tenant submitted a proposal to the City. H. The City and Tenant desire to extend the Lease term and modify certain other provisions of the Lease set forth below. NOW, THEREFORE, in consideration of the mutual covenants and obligations in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Section 4.9 of the Lease is amended to clarify the Tenant's obligations when the Landlord leases the Premises outside the scope of the Lease. 2. Section 2.4 of the Lease is amended to provide for additional right of termination by Landlord after the first anniversary date of the Lease. . 3. The Rules and Regulations of the Lease has been iamended to add a provision requiring the Tenant to provide professional janitorial service for the restrooms as needed. 4. The Lease is amended and restated to incorporate all previous Lease Amendments and current agreement, commencing on May 1, 2012 and expiring on April 30, 2015. 06 98963.1 SECOND AMENDED AND RESTATED LEASE By and Between THE CITY OF PALM SPRINGS and THE PALM CANYON THEATRE, INC. THIS LEASE ("Lease") is made and entered into this day of 2012, by and between the CITY OF PALM SPRINGS, a municipal corporation ("Landlord"), and THE PALM CANYON THEATRE, INC., a non profit corporation ("Tenant"). 1.0 LEASE SUMMARY. Certain fundamental lease provisions are presented in this Section and represent the agreement of the parties hereto, subject to further definition and elaboration in the respective referenced Sections and elsewhere in this Lease. In the event of any conflict between any fundamental lease provision and the balance of this Lease, the latter shall control. References to specific Sections are for convenience only and designate some of the Sections where references to the particular fundamental lease provisions may appear. 1.1 Premises. The "Premises shall refer to that certain real property located in the County of Riverside, State of California, as more particularly described in Exhibit "A" hereof together with the improvements located thereon as depicted on the Plot Plan attached as Exhibit "B" hereof. 1.2 Approximate Floor Area of Premises. 10,755 square feet of exclusive use and 2,850 square feet of non-exclusive use floor area (said measurements being to the outside of exterior walls). 1.3 Lease Commencement Date/Term. May 1, 2012. Term: 3 years. Lease Termination Date: April 30, 2015. (See Section 2.1) 1.4 Monthly Rental. $1,669.36 (See Section 3.1) 1.5 Security Deposit. $2,500.00. (See Section 3.9) 1.6 Prepaid Rent. $1,290.00. (Deposited with the (Landlord previously with the execution of the First Amendment to the Lease dated October 1, 1997). 1.7 Use of Premises. Non-profit professional actors' equity and/or non- equity live indoor theatre; including an approximately 210-seat theatre, dressing rooms and showers, back stage and prop room, costume shop and scene shop. The premises may also be used for community outreach and educational programs. (See Section 4.1) The Tenant may allow other non-profit groups to use the facility provided the use is consistent with this section and Section 9 of the Lease, "Assignment and Subletting". The Tenant is entitled to recover its cost incurred when another user leases the facility, provided that such cost shall be recoverable, if at all, solely from the other user. The i AMENDED AND RESTATED LEASE 07 538963.1 Tenant's use and possession of the Premises shall not be exclusive, but shall be deemed subject to the Landlord's right to permit use of the Premises by other nonprofit entities outside of scheduled dates of use by Tenant. Without limitation of the foregoing and in recognition of the substantial contributions and improvements to the Premises by the Palm Springs International Film Festival, a California nonprofit corporation ("PSIFF"), Tenant specifically acknowledges and agrees to the exclusive use of the Premises for the Palm Springs International Film Festival ("Film Festival") for approximately fifteen (15) days each January, and the Palm Springs International Short Film Festival ("Short Film Festival") for approximately eight (8) days in late August/early September each year, and in addition, for film screenings ("Screenings") by the Palm Springs International Film Society, a California nonprofit corporation ("PSIFS") not less than three (3) evenings per month, scheduled a minimum of 30 days in advance, on Mondays, Tuesdays, or Wednesdays, or other such time as Tenant is not using the theater for live performances or rehearsal. Tenant shall coordinate a minimum of 30 days in advance with PSIFF regarding scheduling of Film Festival and Short Film F0tivaf. Tenant may conduct rehearsals in classroom spaces on the wings of the property during film screenings and Film Festival events provided that such use will not interfere with the exclusive use of the theatre (including auditorium and stage) by PSIFF and its patrons during such events. In addition, Tenant operates a summer Kid's Camp in the premises during June and July of each year. 1.8 Address for Notices. Tenant: The Palm Canyon Theatre 538 North Palm Canyon Drive Palm Springs, CA 92262 Attn: Dr. William J. Layne or Mr. J. W. Layne Landlord: City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, CA 92262 Attn: City Manager 1.9 Charitable Lease. If Section 4.8 of this Lease relating to charitable leases is applicable, please initial here . If not initialed, the Rent shall be the fair market rental value, increased pursuant to Section 3.2. If Section 4.8 is applicable, the fair market rental value of the Premises is $9,000 per month. 2.0 TERM 2.1 Term. The term of this Lease shall commence on the date specified in Section 1.3 ("Commencement Date') and shall continue for the period specified therein unless earlier terminated as provided herein. 2.2 Time. Time is of the essence of this Lease. - 2 i AMENDED AND RESTATED LEASE 08 138963.1 2.3 Force Maieure. 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, restrictive governmental laws or regulations or other cause without fault and beyond the control of the parry 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 prompt payment of any rental or other charge required of Tenant hereunder except as may be expressly provided elsewhere in this Lease. 2_4 Termination by Landlord. Landlord shall have the right to terminate this Lease at any time after the first anniversary of the Commencement Date, for its convenience and without cause, upon giving Tenant ninety (90) days written notice. In addition, the Tenant may terminate this Lease at any time, with or without cause, upon ninety (90) days written notice to the Landlord, and shall have no further obligation to the Landlord. Landlord shall also have the right to terminate this Lease with or without cause on the first anniversary of the Commencement Date by providing Tenant with at least thirty (30) days' advance written notice. If Landlord or Tenant terminates this Lease as provided in this Section, Tenant hereby waives any right to receive any other compensation from Landlord, including, but not limited to, the value of Tenant's leasehold interest, loss of goodwill and relocation benefits, inverse condemnation or the taking of property and Landlord shall have no obligation to pay Tenant therefor. This section 2.4 supercedes all agreements in the Lease and amendments concerning termination by landlord. Landlord shall not be obligated to pay Tenant any portion, including any unamortized portion, of any costs of improvements except as the Parties may agree in writing by future amendment to this Lease. 2_5 Holding Over. Any holding over after the expiration of the term of this Lease, with the consent of Landlord, express or implied, shall be construed to be a tenancy from month to month, cancelable upon thirty (30) days' written notice, and at a monthly rental equal to one hundred and fifty percent (150%) of the monthly rental in effect at the expiration of the term and upon terms and conditions as existed during the last year of the term hereof. 3.0 RENTAL 3.1 Monthly Rental. Tenant shall pay to Landlord, during the term of this Lease from and after the Commencement Date as monthly rental ("Monthly Rental") for the Premises the sum specified in Section 1.4 hereof, unless Section 4.8 requires fair market value in which case the Tenant shall pay the sum specified in Section 1.9, which sum shall be paid in advance on the first day of each calendar month. 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 3 AMENDED AND RESTATED LEASE 09 5389631 per diem basis (calculated on a thirty-day month). All rental to be paid by Tenant to Landlord shall be in lawful money of the United States of America and shall be paid without deduction or offset, prior notice or demand at the address designated in Section 1.8 hereof. 3.2 Cost of Living Adjustment. Upon each annual 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 Monthly Rental shall be adjusted in proportion to changes in the Consumer Price Index. Such adjustment shall be made by multiplying the original Monthly 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. For example, if the adjustment is to occur effective June 1, 2012, 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 Monthly 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. 3.3 Additional Rental. For the purposes of this Lease, all monetary obligations of Tenant under this Lease, including but not limited to, insurance premiums, property taxes, maintenance expenses, late charges and utility costs shall be deemed to be additional rental. 3.4 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 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 has expired and Tenant has vacated the 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. 3.5 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 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. AMENDED AND RESTATED LEASE L 638963.1 3.6 Utilities. Tenant shall pay before delinquency all charges for water, gas, heat, electricity, sewer, telephone service, and all other services used in, upon, or about the Premises by Tenant or any of its subtenants, licensees, or concessionaires during the term of this Lease. 3.7 Late Payment. Tenant hereby acknowledges that late payment by Tenant to Landlord of rental or other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which is extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges. Accordingly, any payment of any sum to be paid by Tenant not paid within five (5) days of its due date shall be subject to a five percent (5%) late charge. Landlord and Tenant agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to Landlord for its loss suffered by such late payment by Tenant. Sixty (60) days before the anniversary date each year the City shall notify the Tenant of any outstanding delinquency, which must be cured prior to the anniversary date or the City may exercise its right of termination under Section 2.4 and terminate the lease. 3.8 Interest. Any sum to be paid pursuant to the terms of this Lease 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. 3.9 Security Deposit. Tenant has previously with the execution of the original Lease dated July 9, 1997, deposited with the Landlord the sum specified in Section 1.5 hereof, receipt of which is hereby acknowledged by Landlord, said deposit being given to secure the faithful performance by the Tenant of all terms, covenants, and conditions of this Lease by the Tenant to be kept and performed during the term hereof. Tenant agrees that if the Tenant shall fail to pay the rent herein reserved or any other sum required hereby promptly when due, said deposit may, at the option of the Landlord (but Landlord shall not be required to) be applied to any rent or other sum due and unpaid, and if the Tenant violates any of the other terms, covenants, and conditions of this Lease, said deposit may, at Landlord's option, be applied to any damages suffered by Landlord as a result of Tenant's default to the extent of the amount of the damages suffered. Nothing contained in this Section shall in any way diminish or be construed as waiving any of the Landlord's other remedies as provided in Section 10.0 hereof, or by law or in equity. Should the entire security deposit, or any portion thereof, be appropriated and applied by Landlord for the payment of overdue rent or other sums due and payable to Landlord by Tenant hereunder, then Tenant shall, on the written demand of Landlord, forthwith remit to Landlord a sufficient amount in cash to restore said security deposit to its original amount, and Tenant's failure to do so within five (5) days after receipt of such demand shall constitute a breach of this Lease. Should Tenant comply with all of the terms, covenants, and conditions of this Lease and promptly pay all of the rental herein provided for as it falls due, and all other sums payable by Tenant to Landlord hereunder, said security deposit shall be returned in full 5 AMENDED AND RESTATED LEASE 1 5389631 to Tenant at the end of the term of this Lease, or upon the earlier termination of this Lease as specified herein except in the event the Premises are sold as a result of the exercise of any power of sale under any mortgage or deed of trust, in which event this Lease shall be automatically amended to delete any reference to this Section and Tenant shall be entitled to immediate reimbursement of its security deposit from the party then holding said deposit. 4.0 USE OF THE PREMISES 4.1 Permitted Use. The Landlord hereby leases to Tenant and Tenant hires from Landlord the Premises with appurtenances as defined herein, for the purpose of conducting thereon only the use specified in Section 1.7 of this Lease and for no other use. Tenant may sell refreshments, beer, and other concessions during performances as long as Tenant obtains all necessary licenses. 4.2 Prohibited Uses. Tenant shall not sell or permit to be kept, used, displayed or sold in or about the Premises (a) pornographic or sexually explicit books, magazines, literature, films or other printed material, sexual paraphernalia, or other material which would be considered lewd, obscene or licentious, or(b) any article which may be prohibited by standard forms of fire insurance policies. Tenant shall not use, or permit to be used the Premises or any part thereof for the installation or on-premises use of any vending machine, gaming machine or video or arcade game unless expressly permitted by this Lease. 4.3 Compliance with Laws. Tenant shall, at his own 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 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 use regulations now in force or which shall hereinafter be in force. Tenant's violation of law shall constitute an incurable default under this Lease. The judgment of any court of competent jurisdiction, or the admission of Tenant in any action or proceeding against Tenant, whether Landlord is 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 not engage in any activity on or about the Premises that violates any Environmental Law, and shall promptly, at Tenants 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, (i) 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 6 AMENDED AND RESTATED LEASE �. 5389631 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 (i) 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. 4.4 Sins. Tenant shall not place or permit to be placed any sign that is not in compliance with the sign ordinance of the Landlord upon the exterior or in the windows of the Premises. Any sign not constructed in accordance therewith shall be immediately removed by Tenant and, if said sign is not removed by Tenant within ten (10) days of written notice from Landlord to Tenant,then Landlord may remove and destroy said sign without Tenants approval and without any liability to Tenant. 4.5 Parking and Common Areas. During the term of this Lease and any extension thereof, Landlord gives to Tenant for the use and benefit of Tenant, its agents, employees, customers, licensees and subtenants a nonexclusive license in common with Landlord and other present and future owners and tenants of the Property and their agents, employees,customers, licensees and subtenants, and others authorized by Landlord to use the automobile parking areas, roadways, walkways, landscaped areas, service areas, of the Property for ingress, egress and automobile parking, provided that the condemnation or other taking by any public authority,or sale in lieu of condemnation,of any or all of such parking and common areas shall not constitute a violation of this covenant. Nothing herein contained shall be deemed to prevent Landlord from using or authorizing others to use said parking and common areas. 4.6 Maintenance of Common Areas. During the entire term hereof, Landlord shall keep or cause to be kept the parking and common areas as same are established and completed by Landlord in a good, neat, clean and orderly condition, properly lighted and landscaped, and shall repair any damage to the facilities thereof as well as the exterior walls and roof of the Premises as provided in Article 11. 4.7 Hours of Business. Subject to the provisions of Section 8.0 hereof,Tenant shall oontinuousy during the entire term hereof conduct and carry on Tenant's business in the Premises and shall keep the Premises open for business and cause Tenants business to be AMENDED AND RESTATED LEASE 13 5389611 conducted therein during the usual business hours of each and every business day as is customary for theaters of like character to be open for business in Riverside County. This provision shall not apply if the Premises should be dosed and the business of Tenant temporarily discontinued therein on account of strikes, lockouts,or similar causes beyond the reasonable control of Tenant. It is the intention of Landlord that the Premises are open during evening hours to promote business in the City of Palm Springs and, therefore, Tenant shall participate in any program established by Landlord to provide evening shopping and entertainment, which program may be administered by such entity that may be designated by the Landlord. 4.8 Charitable Leases. The provisions of this Section are required by Resolution No. 14527 of the City Council and shall only apply as indicated in Section 1.10. Tenant hereby represents and warrants to Landlord that Tenant is exempt from federal income taxation pursuant to Internal Revenue Code Sections 501(c)(1)and/or 501(c)(3)and that Tenant's use of the Premises as specified in Section 1.7 is a tax exempt furicbm.Tenant hereby acknowledges that the Iv nthy Rent is below fair market rental rates and that the fair market rental value of the property is as specified in Section 1.9. Prior to the execution of this Lease, Tenant has provided Landlord with a proposed program for which the Tenant intends to use the Premises ("Program"). On each anniversary of the Commencement Date,Tenant shall submit to Landlord a report in a form and content satisfactory to Landlord,setting forth Tenant's progress in meeting the provisions of the program during that year. If Landlord is not satisfied with the Tenants performance, Landlord may terminate this Lease upon thirty(30)days'advance written notice to Tenant or increase the Nlonthy Rent to the fair market rental for the Premises as specified in Section 1.9 (increased pursuant to Section 3.2, if applicable). If Landlord elects to terminate this Lease as provided in this Seddon, Tenant hereby waives any right to receive any other compensation from Landlord, including, but not limited to, the value of Tenant's leasehold interest, loss of goodwill, relocation benefits, inverse condemnation, or the taking of property and Landlord shall have no obligation to pay Tenant therefor. In the event that Tenant ceases to be a tax-exempt organization or the use is no longer a tax- exempt function, Rent shall be due at the fair market value from the date Tenant is no longer a tax-exempt or from the date the use is no longer a tax-exempt function, whichever occurs first. 4.9 Rules and Regulations. Tenant shall faithfully observe and comply with the rules and regulations that Landlord shall from time to time promulgate and/or modify.The rules and regulations, if any,are attached hereto as Exhibit"D"("Rules and Regulations").Any amendment or modification of the Rules and Regulations shall be binding upon the Tenant upon delivery of a copy of such amendment or modification to Tenant Landlord shall not be responsible to Tenant for the nonperformance of any said rules and regulations by any other tenants or occupants.The Rules and Regulations shall apply and be enforced as to all tenants in the Premises on a uniform basis. Notwithstanding the preceding paragraph, if Landlord undertakes the rental of the Premises to a third party group outside the scope of this Lease, Tenant shall not bear responsibility for the compliance with the Landlord's rules and regulations by the group. 5.0 ALTERATIONS AND REPAIRS. 5.1 Alterations and Fixtures. Tenant shall riot make, or sU fer to be made, any alterations to the Premises, or any part thereof, without the prior written consent of Landlord, and any a AMENDED AND RESTATED LEASE 14 538963_I alterations to the Premises, except movable furniture and trade fixtures, shall become at once a part of the really and shall at the expiration or earlier termination of this Lease belong to Landlord.Tenant shall not in any event make any changes to the exterior of the Premises.Any such alterations shall be in conformance with the requirements of all municipal, state, federal, and other governmental authorities, including requirements pertaining to the health, welfare or safety of employees or the public and in conformance with reasonable rules and regulations of Landlord. Tenant may leave all equipment and fixtures relating to the operation of the theatre on the Premises with the exception of lighting instruments and control boards, sound boards, microphones, recording and playback equipment.Any removal of alterations or furniture and trade fixtures shall be at Tenant's expense and accomplished in a good and workmanlike manner.Any damage occasioned by such removal shall be repaired at Tenants expense so that the Premises can be surrendered in a good, dean and sanitary condition as required by Section 5.2 hereof.Any and all fixtures and appurtenances installed by Tenant shall conform with the requirements of all municipal, state, federal, and governmental authorities, including requirements pertaining to the health, welfare, or safety of employees or the public. Upon completion of construction of the alterations, Tenant shall submit to Landlord evidence satisfactory to Landlord of the cost of said alterations("Improvement Costs"). 5.2 Maintenance and Repair. Tenant shall, subject to Landlord's obligations hereinafter provided, at all times during the term hereof, and at Tenants sole cost and expense, keep, maintain and repair the Premises, and other improvements within the Premises in good and sanitary order, condition, and repair (except as hereinafter provided), including, without limitation,the maintenance and repair of any doors, window,casements, walls, 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 Premises necessitated as a result of the requirement of any municipal, state or federal authority. Tenant hereby waives all right to make repairs at the expense of Landlord, and Tenant hereby waives all rights provided for by the Civil Code of the State of California to make said repairs. By entering into the Premises, Tenant shall be deemed to have accepted the Premises as being in good and sanitary order, condition and repair, and Tenant agrees on the last day of said term or sooner termination of this Lease to surrender the Premises with appurtenances, in the same condition as when received and in a good, dean 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 dean the sidewalks adjacent to the Premises, as needed. Upon Tenants possession of the Premises,Tenant shall be deemed to have accepted the Premises as being in good condition and repair. Tenant agrees that it will not, nor will it authorize any person to,go onto the roof of the building of which the Premises are a part without the prior written consent of Landlord. Said consent will be given only upon Landlord's satisfaction that any repairs necessitated as a result of Tenants action will be made by Tenant at Tenant's expense and will be made in such a manner so as not to invalidate any guarantee relating to said roof. 5.3 Free from Liens. Tenant shall keep the Premises free from any liens arising out of any work performed, material furnished, or obligation incurred by Tenant or alleged to have been incurred by Tenant. 5.4 Additional Consideration for Lease. As additional consideration for 9 AMENDED AND RESTATED LEASE 15 538963.1 renting the Premises, Tenant agrees to perform the Property management obligations in accordance with Exhibit "E" attached hereto. 6.0 INSURANCE AND INDEMNIFICATION. 6.1 Insurance Provided by Landlord. Landlord shall maintain fire and extended coverage insurance throughout the term of this Lease in an amount equal to at least ninety percent (90%) of the replacement value of the building containing the Premises, together with such other insurance, coverages and endorsements as may be required by Landlord's lender, or as Landlord may determine in its sole discretion. Tenant hereby waives any right of recovery from Landlord, its officers and employees,and Landlord hereby waives any right of loss or damage (including consequential loss) resulting from any of the perils insured against as a result of said insurance. Tenant agrees to pay to Landlord its pro rata share of the cost of said insurance to be determined by the relationship that the gross floor area of the Premises bears to the total gross leasable floor area of the building or buildings for which such policy relates. 6.2 Insurance Provided by Tenant. (a) Tenant to Provide Personal Property Insurance. Tenant, at its expense, shall maintain fire and extended coverage insurance written on a per occurrence basis on its trade fixtures, equipment, personal properly and inventory within the 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, 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 Premises and on any sidewalks directly adjacent to the Premises written on a per occurrence basis in a combined single limit of ONE MILLION DOLLARS ($1,000,000.00) for bodily injury, death, and properly damage or provided, however, 9 Landlord so elects Landlord may provide such insurance and, in such event, Tenant agrees to pay its pro rata share of the cost of said insurance on the same basis as provided in Section 6.1 above. (c) Tenant to Provide Workers' Compensation Insurance. Tenant shall, at the Tenant's sole cost and expense, maintain a policy of workers' compensation insurance in an amount as will fully oomply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both the Tenant and the Landlord against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the Tenant in the course of conducting Tenant's business in the Premises. (d) General Provisions Applicable to Tenants Insurance. All of the policies of insurance required to be procured by Tenant pursuant to this Section 6.2 shall be primary insurance and shall name the Landlord, its officers, employees and agents as additional insureds. The insurers shall waive all rights of subrogation and con6ibution io AMENDED AND RESTATED LEASE i 6 538963A they may have against the Landlord, its officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice by registered mail to the Landlord. Prior to the Commencement Date or such eadier date as Tenant takes possession of the Premises for any purpose; and at least thirty(30)days prior to the expiration of any insurance policy, Tenant shall provide Landlord with endorsements evidencing the above insurance coverages written by insurance companies acceptable to Landlord, licensed to do business in the state where the Premises are located and rated A:VII or better by Bests Insurance Guide. In the event the Risk Manager of Landlord ("Risk Manager") determines that (i) the Tenant's activities in the Premises creates an increased or decreased risk of loss to the Landlord, (ii) greater insurance coverage is required due to the passage of time, or (iii) changes in the industry require different coverages be obtained, Tenant agrees that the minimum limits of any insurance policy required to be obtained by Tenant may be changed accordingly upon receipt of written notice from the Risk Manager; provided that Tenant shall have the right to appeal a determination of increased coverage by the Risk Manager to the City Council of Landlord within ten (10) days of receipt of notice from the Risk Manager. Landlord and Tenant hereby waive any rights each may have against the other on account of any loss or damage occasioned by property damage to the Premises, its contents, or 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 or leakage, and earthquake. 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 bwful in California and provided further that no policy is invalidated thereby. 6.3 Indemnification of Landlord. Tenant, as a material part of the consideration to be rendered to Landlord underthis Lease,hereby waives all claims against Landlord for damage to equipment or other personal property, trade fixtures, leasehold improvements, goods, wares, inventory and merchandise, in, upon or about the Premises and for injuries to persons in or about the Premises, from any cause arising at any time. Tenant agrees to indemnify the Landlord, its officers, agents 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 properly, losses,costs,penalties,obligations,errors,omissions or liabilities,(herein"claims or liabilities")that may be asserted or claimed by any person, firm or entity arising out of or in connection with the negligent performance of the work, operations or activities of Tenant, its agents, employees, subcontractors,or invitees,provided for herein,or arising from the use of the Premises or the parking and common areas by Tenant or its employees and customers,or arising from the failure of Tenant to keep the Premises in good condition and repair, as herein provided, or arising from the negligent acts or omissions of Tenant hereunder,or arising from Tenant's negligent performance of or failure to perform any term, provision, covenant or condition of this Lease,whether or riot there is concurrent passive or active negligence on the part of the Landlord, its officers, agents or employees but excluding such daims 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: 11 AMENDED AND RESTATED LEASE 17 98963.1 (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 attomeys'fees incurred in connection therewith; (b) Tenant will promptly pay anyjudgment 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 therefrom; (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, inducting, but not limited to, legal costs and attorneys' fees. 7.0 ABANDONMENT AND SURRENDER. 7.1 Abandonment. Tenant shall riot vacate or abandon the Premises at any time during the term of this Lease; and if Tenant shall abandon,vacate or surrender the Premises or be dispossessed by process of law,or otherwise,any personal property belonging to Tenant and left on the Premises shall be deemed to be abandoned, at the option of Landlord, except such property as may be mortgaged to Landlord. 7.2 Surrender of Lease. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Landlord, terminate all or any existing subleases or sub-tenancies, or may, at the option of Landlord,operate as an assignment to it of any or all of such subleases or sub-tenancies. 8.0 DAMAGE AND DESTRUCTION OF PREMISES. In the event of (a) partial or total destruction of the Premises during the term of this Lease which requires repairs to the Premises,or(b)the Premises being declared unsafe or unfit for occupancy by any authorized public authority for any reason other than Tenant's act, use or occupation, which declaration requires repairs to the Premises, Landlord shall forthwith make said repairs provided Tenant gives to Landlord thirty (30) days' written notice of the necessity therefor. No such partial 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 except that Tenant shall be entitled to a proportionate reduction of Monthly Rental while such repairs are being made,such proportionate reduction to be bused upon the extent to which the making of such repairs shall interfere with the business carried on by Tenant in the Premises. However, if during the last two(2) years of the tern of this Lease the Premises are damaged as a result of fire or any other insured casualty to an extent in excess of twenty-five percent (250/6) of the then replacement cost (excluding foundations), Landlord may within thirty (30) days following the date such damage occurs terminate this Lease by written notice to Tenant. if Landlord, however, elects to make said repairs, and provided Landlord uses due diligence in making said repairs, this Lease shall 12 AMENDED AND RESTATED LEASE H 5399631 continue in full force and effect, and the Monthly Rental shall be proportionately reduced while such repairs are being made as hereinabove provided. Nothing in the foregoing to the contrary withstanding, if the Premises or said building is damaged or destroyed at any time during the term hereof to an extent of more than twenty-five percent (25%) of the then replacement cost (exduding foundations)as a result of a casualty not insured against, Landlord may within thirty (30) days following the date of such destruction terminate this Lease upon written notice to Tenant If Landlord does not elect to terminate because of said uninsured casualty, Landlord shall promptly rebuild and repair the Premises and/or the building and the Monthly Rental shall be proportionately reduced while such repairs are being made as hereinabove provided. If Landlord elects to terminate this Lease, all rentals shall be prorated between Landlord and Tenant as of the date of such destruction. In respect to any partial or total destruction (including any destruction necessary in order to make repairs required by any such declaration of any authorized public authority)which Landlord is obligated to repair or may elect to repair under the terms of this Section, Tenant waives any statutory right it may have to cancel this Lease as a result of such destruction. 9.0 ASSIGNMENT AND SUBLETTING.Tenant shall not assign this Lease or sublet all or a portion of the Premises without the prior written consent of Landlord,which consent shall not be unreasonably withheld. For purposes of this Lease, an assignment shall be deemed to indude the transfer to any person or group of persons acting in concert of more than twenty free percent(25%) of the present ownership and/or control of Tenant, taking all transfers into account on a cumulative basis. Landlord may withhold its consent to an assignment or sublease to a proposed assignee or sub-lessee, and Tenant agrees that Landlord shall not be unreasonable for doing so, unless all the following criteria are met: (a) The proposed assignee's or sub-lessee's general financial condition, including liquidity and net worth, verified by audited financial statements prepared by a Certified Public Accountant in conformity with Generally Accepted Accounting Principles is equal to or greater than that of Tenant; (b) the proposed assignee or sub-lessee has a demonstrated merchandising capability equal to or greater than that of Tenant as to the use for which the Premises are leased; (c) the proposed assignee or sub-lessee is morally and financially responsible; and(d)the failure of tenant's use of the Premises to fit the business plan of Landlord to promote tourism to the City of Palm Springs; and (e) the proposed assignee or subtenant is exempt from federal income taxation pursuant to Internal Revenue Code Sections 501(c)(1)and/or 501(c)(3)and the proposed assignee's or subtenant's proposed use of the Premises is a tax exempt function. Any such assignment shall be subject to all of the terms and conditions of this Lease and the proposed assignee shall assume the obligations of Tenant under this Lease in writing in form satisfactory to Landlord. The proposed assignee shall simultaneously provide to Landlord an estoppel certificate in the form described in Section 12.3 hereafter. Consent by Landlord to one assignment, subletting, occupation or use by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by another person. Any assignment or subletting without the prior written consent of Landlord shall be void, shall constitute a material breach of this Lease,and shall,at the option of Landlord,terminate this Lease. Neither this Lease nor any interest therein shall be assignable as to the interest of Tenant by operation of law. Landlord shall be under no obligation to consider a request for Landlord's consent to an assignment until Tenant shall have submitted in writing to Landlord a request for Landlord's consent to such assignment together with audited finandal statements of Tenant and the proposed assignee, a history of the proposed assignee's business experience and such other 13 AMENDED AND RESTATED LEASE 19 538963.1 information as required by Landlord to verify that the criteria for assignment as set forth herein are met. If Landlord approves such assignment, Tenant shall pay to Landlord one-half (1/2) of any consideration received by Tenant for such assignment. In addition, if Landlord determines that the Monthly Rent payable to Landlord under this Lease 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. 10.0 DEFAULT AND REMEDIES. 10.1 Default by Tenant. In addition to the defaults described in Section 9.0 hereinabove, the occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant (a) the failure to pay any 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 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 Premises or of Tenant's leasehold interest in the 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 otherjudicial secure 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 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 defauft, 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(I)to continue the lease in full force and effect and enforce all of its rights and remedies under this Lease, including the right to recover the rental as it beoomes due udder this Lease, or(ii) Landlord shall have the right at any time thereafter to elect to terminate the Lease and Tenant's right to possession thereunder. Upon such termination, Landlord shall have the right to recover from Tenant: (i) The worth at the time of award of the unpaid rental which had been earned at the time of termination; (ii) The worth at the time of award of the amount by which the unpaid 14 AMENDED AND RESTATED LEASE 20 538963.1 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; (iii) 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 (iv) Any other amount necessary to compensate the Landlord for all the detriment proximately caused by Tenants failure to perform its obligations under the lease or which in the ordinary course ofthings would be likely to result therefrom. The "worth at the time of award" of the amounts referred to in subparagraphs(i) and (ii) above shall be computed by allowing interest at three percent (30/6)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 Monthly Rental, other sums payable hereunder which are designated "rental' or "additional rentar' 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 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 for personal injuries or property damage, and Tenant hereby agrees to indemnify and hold Landlord harmless from any such injuries and damages, including all attorneys' 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 by Tenant, or an abandonment of the Premises by Tenant, shall not constitute a termination of this Lease, 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, 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 shall not prevent Landlord from later terminating this Lease orcons&Ae a waiverof Landlord's right to do so. 10.2 No Waiver. Acceptance of rental hereunder shall not be deemed a waiver of any default or a waiver of any of Landlord's remedies. 10.3 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 15 AMENDED AND RESTATED LEASE 21 538963.1 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 as a result of Landlord's default and Tenant's remedies shall be limited to damages and/or an injunction. 11.0 CONDEMNATION. In the event a condemnation or a transfer in lieu thereof results in a taking of any portion of the Premises, Landlord may, or in the event a condemnation or a transfer in lieu thereof results in a taking of twenty-five percent (25W) or more of the Premises, Tenant may, upon written notice given within thirty (30) days after such taking or transfer in lieu thereof, terminate this Lease. 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 is not terminated as above provided, Landlord shall use a portion of the condemnation award to restore the Premises. 12.0 MISCELLANEOUS. 12.1 Reservation of Right to Modify Property. Landlord hereby reserves the right (but not the obligation) to renovate, modernize, rehabilitate, expand, reduce, reconfigure, enclose and/or otherwise alter all or any portion of the Premises (collectively "Modifications"), in such manner and at such time or times, throughout the term of this Lease, as Landlord may, in its sole and absolute discretion, deem to be in the best interests of the Property. Such Modifications may include, without limitation, the right to construct new buildings on the Property for additional uses, to remove, renovate, repair, add to, modernize or otherwise alter the building in which the Premises are situated as well as other buildings, facilities, structures, malls, walkways, landscaping, parking and common areas or other areas within the Property. In connection with any and all such Modifications, Landlord may enter the Premises to the extent reasonably required by Landlord to pursue and complete such Modifications. In addition, Landlord may temporarily close portions of the parking and common areas and cause temporary obstructions in connection with any Modifications. Tenant agrees that under no circumstances shall the Modifications as to any portion of the Property or the construction activity that takes place in the course of making the Modifications, or any aspect thereof, including Landlord's entry into the Premises, constitute an eviction or partial eviction of Tenant or a breach of Tenant's right to quiet enjoyment or of any other provision of this Lease, nor entitle Tenant to damages, injunctive relief or other equitable relief, nor entitle Tenant to any abatement or reduction in the Monthly Rental, additional rental or other charges or sums due under this Lease; provided Landlord uses reasonable efforts to mitigate any adverse effects on Tenant caused by the Modifications. 12.2 Entry and Inspection. Tenant shall permit Landlord and his agents to enter into and upon the Premises at all reasonable times for the purpose of 16 AMENDED AND RESTATED LEASE 22 536963A inspecting the same or for the purpose of maintaining the Premises as required by the terms of this Lease or for the purpose of posting notices of non-liability for alterations, additions or repairs, or for the purpose of placing upon the property in which the Premises are located any usual or ordinary "For Sale" signs or any signs for public safety as determined by Landlord. 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 Premises thereby occasioned. Tenant shall permit Landlord, at any time within six (6) months prior to the expiration of this Lease, to place upon the Premises any usual or ordinary "For Lease" signs, and during such (6) month period Landlord or his agents may, during normal business hours, enter upon said Premises and exhibit same to prospective tenants. 12.3 Estoppel Certificate. If, as a result of a proposed sale, assignment, or hypothecation of the Premises or the land thereunder by Landlord, or at any other time, an estoppel certificate shall be requested of Tenant, Tenant agrees, within ten (10) days thereafter, to deliver such estoppel certificate in the form attached hereto as Exhibit "C" 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. 12.4 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 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. 12.5 Partial Invalidity. If any term, covenant, condition or provision of this Lease is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereof. 12.6 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. 12.7 No Oral Agreements. This (i) Lease covers in full each and every agreement of every kind or nature whatsoever between the parties hereto concerning this Lease, (ii) supersedes any and all previous obligations, agreements and understandings, if any, between the parties, oral or written, and (iii) merges all preliminary negotiations and agreements of whatsoever kind or nature herein. Tenant acknowledges that no representations or warranties of any kind or nature not specifically set forth herein have been made by Landlord or its agents or representatives. 12.8 Authority. In the event that Tenant is a corporation or a partnership, 17 AMENDED AND RESTATED LEASE 23 538963.1 each individual executing this Lease on behalf of said corporation or said partnership, as the case may be, represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of said corporation or partnership, in accordance with a duly adopted resolution of the Board of Directors, if a corporation, or in accordance with the Partnership Agreement, if a partnership, and that this Lease is binding upon said corporation or partnership in accordance with its terms. Tenant represents and warrants to Landlord that the entering into this Lease does not violate any provisions of any other agreement to which Tenant is bound. 12.9 Relationship of Parties. The relationship of the parties hereto is that of Landlord and Tenant, and it is expressly understood and agreed that Landlord does not in any way or for any purpose become a partner of Tenant in the conduct of Tenant's business or otherwise, or a joint-venture with Tenant, and that the provisions of this Lease 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. 12.10 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 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 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, sub-lessees, subtenants or vendees in the Premises. 12.11 Notices. Wherever in this Lease it shall be required or permitted that notice and demand be given or served by either party to this Lease to or on the other, such notice or demand shall be given or served in writing and shall not be deemed to have been duly given or served unless in writing, and personally served or forwarded by certified mail, postage prepaid, addressed, if to Landlord, as specified in Section 1.8. 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 eff✓;ctive one (1) day subsequent to mailing. 12.12 Waiver. No delay or omission in the exercise of any right or remedy by a non-defaulting party shall impair such right or remedy or be construed as a waiver. A parry's consent to or approval of any act by the other party requiring the party's consent or approval shall not be deemed to waive or render unnecessary the other parry'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. 12.13 Exhibits and Addenda.The Exhibits and Addenda attached to this Lease are made a part hereof as if fully set forth herein. In the event of a conflict between the terms and 18 AMENDED AND RESTATED LEASE 24 538963.1 provisions of Addenda and the terms and provisions of this Lease,the terms and provisions of the Addenda shall prevail. IN WITNESS WHEREOF,the parties have duly executed this Lease together with the herein referred to Exhibits which are attached hereto, on the day and year first above written in Palm Springs, California. "City, ATTEST: CITY OF PALM SPRINGS, a municipal Corporation By: By: James Thompson, City Clerk Its: APPROVED AS TO FORM: Douglas Holland, City Attorney 'Tenant' PALM CANYON THEATRE, INC., a non- profit corporation By: Its: By: Its: 19 AMENDED AND RESTATED LEASE 25 538963A EXHIBIT "A" LEGAL DESCRIPTION OF THE PREMISES That certain property in the City of Palm Springs, County of Riverside, State of California, being generally the southern most half of the property known as Frances Stevens Park, described as follows: That portion of the Southeast quarter of the Southeast quarter of Section 10, Township 4 South, Range 4 East,San Bernardino Base and meridian, described as follows: Beginning at a point on the south line of said Section 10, Township 4 South, Range 4 East, San Bernardino Base and Meridian, 30 feet West of the Southeast comer thereof,thence South 89°42'West on said South line, 297.40 feet; thence North on the East line of a public highway 550.4 feet; thence North 890 42' East 296.75 feet to a point distance 30 feet, measured at a right angle, from the East line of said Section 10; thence South 00 2' 30" East and parallel with said East line, 550.4 feet to the point of beginning. EXHIBIT"A" AMENDED AND RESTATED LEASE c v 538963.1 EXHIBIT "B" PLOT PLAN OF DEMISED PREMISES EXHIBIT "C" ESTOPPEL CERTIFICATE Tenant: PALM CANYON THEATRE Landlord: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a municipal corporation Date of Lease: Premises: To: The undersigned hereby certifies as follows: 1, The undersigned is the tenant('Tenant') under the above-referenced lease("Lease") covering the above-referenced premises("Premises"). 2. The Lease constitutes the entire agreement between landlord and Tenant with respect to the Premises and the Lease has not been modified, charxfed, altered or amended in any respect except as set forth above. 3. The term of the Lease commenced on 20_ and, including any presently exercised option or renewal term, will expire on 20 . Tenant has accepted possession of the Premises and is the actual occupant in possession thereof and has riot sublet, assigned or hypothecated its leasehold interest.All improvements to be constructed on the Premises by Landlord have been completed and accepted by Tenant and any tenant consfiidion allowances have been paid in full. 4. As of this date, to the best of Tenants 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 Tenants knowledge, no claim, controversy,dispute,quarrel or disagreement exists between Tenant and Landlord. 5. Tenant is currently obligated to pay Annual Rent in installments of $1,669.36 per month, and such monthly installments have been paid not more than one month in advance. To the best of Tenants knowledge, no other rent has been paid in advance EXHIBIT"C" AMENDED AND RESTATED LEASE 27 538963.1 and Tenant has no claim or defense against Landlord under the Lease and is asserting no offsets or credits against either the rent or Landlord. Tenant has no claim against Landlord for any security or other deposits except$2,500.00 which was paid pursuant to the Lease. 6. Tenant has no option or preferential right to lease or occupy additional space within the Property of which the Premises are a part. Tenant has no option or preferential right to purchase all of any part of the Premises nor any right or interest with respect to the Premises other than as Tenant under the Lease.Tenant has no right to renew or extend the term of the Lease except as set forth in the Lease. 7. Tenant has made no agreements with Landlord or its agent or employees concerning free rent, partial rent, rebate of rental payments or any other type of rent or other concession except as expressly set forth in the Lease. 8. There has not been filed by or against Tenant a petition in bankruptcy, voluntary or otherwise, any assignment for the benefit of creditors,any petition seeking reorganization or arrangement under the bankruptcy laws of the United States, or any state thereof, or any other action brought under said bankruptcy laws with respect to Tenant 9. All insurance which Tenant is required to maintain under the Lease has been obtained by Tenant and is in full force and effect and all premiums with respect thereto have been paid. Dated this day of 20_ By: Its: EXHIBIT"C AMENDED AND RESTATED LEASE 28 538963A EXHIBIT "D" RULES AND REGULATIONS 1. All loading and unloading of goods shall be done only at the times, in the areas and through the entrances reasonably designated for such purposes by Landlord. 2. The delivery or shipping of merchandise, supplies and fixtures to and from the Premises shall be subject to such rules and regulations as in the reasonable judgment of Landlord are necessary for the proper operation of the Premises or of the Property generally. 3. All of Tenant's refuse and rubbish shall be removed to central trash bins located in the Property, at Tenant's sole cost and expense. 4. No radio or television or other similar device audible outside the Premises shall be installed without obtaining in each instance the written consent of Landlord. No aerial shall be erected on the roof or exterior walls of the Premises or on the grounds of the Property without first obtaining in each instance the written consent of Landlord which consent shall not be unreasonably withheld or delayed. Any aerial so installed without such written consent shall be subject to removal without notice at any time. 5. No loudspeakers, televisions, phonographs, radios or other devices shall be used in a manner so as to be heard or seen outside of the Premises without first obtaining in each instance written consent of Landlord. 6. The outside sidewalks and loading areas immediately adjoining the Premises shall be kept clean and free from dirt and rubbish by Tenant to the reasonable satisfaction of Landlord, and Tenant shall not place or permit any obstructions due to storage of stage sets or construction material in such areas, except to the extent specifically permitted by the provisions of Tenant's Lease. 7. Tenant shall not burn any trash or garbage of any kind in or about the Premises or the Property generally. 8. Tenant will not allow animals, except seeing-eye dogs and/or those animals used in theatre productions, in, about or upon the Premises. 9. Tenant shall not use, and shall not allow anyone else to use, the Premises as a habitation. Such prohibition shall include, without limitation, sleeping, eating or bathing except for showers and cots provide in the Actors Equity dressing rooms solely for use by Equity performers and required under the Equity contract. EXHIBIT"D" AMENDED AND RESTATED LEASE 29 538963A 10. Tenant shall not place any rubbish or other matter outside any building within the Property, except in such containers as are authorized from time to time by Landlord. 11. 11. Tenant shall provide for professional janitorial cleaning of the men's and women's restrooms prior to performances in the auditorium, and at other times as may be necessary by heavy use. EXHIBIT"D" AMENDED AND RESTATED LEASE 30 538963A EXHIBIT "E" TENANT'S PROPERTY MANAGEMENT OBLIGATIONS As additional consideration for this Lease, Tenant agrees to provide a "non-profit professional equity and/or non-equity theatre" operation each year during the Lease term consisting of a minimum of six (6) professional quality indoor theatre productions on the Premises per season during the months of October through May, except during the Palm Springs International Film Festival. Tenant agrees to the exclusive use of the Premises for the Palm Springs International Film Festival ("Film Festival") for approximately fifteen (15) days each January, and in addition, for film screenings ("Screenings") by the Palm Springs International Film Society, a California nonprofit corporation ("PSIFS") not less than three (3) evenings per month, scheduled a minimum of thirty (30) days in advance, on Mondays, Tuesdays, or Wednesdays, or other such time as Tenant is not using the theater for live performances or rehearsal. Tenant shall coordinate a minimum of 30 days in advance with PSIFF regarding scheduling of Film Festival. Tenant may conduct rehearsals in classroom spaces on the wings of the property during film screenings and Film Festival events provided that such use will not interfere with the exclusive use of the theatre (including auditorium, and stage) by PSIFF and its patrons during such events. Tenant shall provide the theatre to the PSIFF/PSIFS clean and free of debris (inside lobby, projection booth, stage, bathrooms, auditorium and outside walkways), and ready for use for festivals and screenings. Tenant shall allow PSIFF/PSIFS use of the marquee(s) during Film Festivals and monthly film screenings. In consideration of the substantial contributions and improvements to the Theatre previously made by the PSIFF and hereby acknowledged by the City, no rental fee is to be charged by the Tenant to the PSIFF or PSIFS for use of the Premises except for the reimbursement of the pro rata share of the Tenant's utility and building maintenance direct costs actually incurred during the Film Festival time frame. Tenant will reinvest all "net annual income" generated from its business and productions on the Premises into facility improvements and/or program enhancements directly related to the Premises. "Net Annual Income" shall mean the excess of (i) all money received during a specific calendar year as a result of the operation of the theater and business on the Premises and the sale of goods and services at the Premises determined in accordance with generally accepted accounting principles consistently applied minus (ii) all operating expense directly related to the Premises determined under generally accepted accounting principles consistently applied. In no event shall Tenant be required to reinvest earnings in the project in violation of its nonprofit status. The City may review and audit the Tenant's books and records upon reasonable notice to assure compliance with this paragraph. Tenant will give priority to Palm Springs residents where possible in retaining actors, designers, technical staff and skilled/non-skilled labor where qualifications and experience are equivalent to those of other non-Palm Springs residents. The Tenant will also initiate and continue to operate several theatre-related educational outreach EXHIBIT"E" AMENDED AND RESTATED LEASE 31 5389611 programs during the Lease term including, but not limited to, an Equity intern program; Kid's Camp, children's theatre and workshops. The Tenant will strive to involve local art groups as Palm Canyon Theatre resource groups for the creation of stage sets and related artwork for theatre productions, as well to provide pre- and post- performance artist exhibits for the enjoyment of theatre patrons. Tenant also agrees to work with the City and other non-profit arts groups in order to develop a well coordinated annual calendar of productions and special events at the Frances Stevens Festival Park in order to avoid an overly intensive use of the facilities and the creation of vehicular parking and traffic congestion problems. EXHIBIT"E" AMENDED AND RESTATED LEASE 32 sssyssA