HomeMy WebLinkAbout1/5/2005 - STAFF REPORTS (18) DATE: January 5, 2005
TO: City Council
FROM: Director of Aviation
HARMONY AIRWAYS AIRLINE EXCLUSIVE USE SPACE LEASE AGREEMENT
RECOMMENDATION:
That the City Council approve a Lease Agreement between Harmony Airways and the City of Palm
Springs for the rental of airline exclusive use space in the ticketing wing of the Airport Terminal Building,
subject to City Attorney review as to form.
SUMMARY:
The requested action would allow Harmony Airways to occupy airline exclusive use space at Palm
Springs International Airport beginning January 6, 2005 at a monthly rental of$1,692.66.
BACKGROUND:
Airport Staff, along with local tourism representatives, met with Harmony Airways in Vancouver, BC on
October 22 to discuss the proposed seasonal service into PSP. Harmony contacted staff the week of
October 25 to confirm its intent to operate twice-weekly nonstop service from Vancouver beginning
January 2005. In early November ATS (Airport Terminal Services, Inc.)was contacted and selected to
provide below-the-wing(baggage service)ground service for Harmony's PSP flights. Approximately one
month ago,the airline began making contact with Signatory Airlines serving PSP about providing above-
the-wing passenger service. After contacting each of the airlines and having ongoing discussion, it was
learned that the existing carriers were not able to accommodate Harmony Airways, though some were
interested.
Delta Air Lines was one such carrier. It appeared Delta would be able to provide the above-the-wing
service. However, on December 17,the airline informed Harmony that due to internal concerns from its
legal department over liability of transporting Delta employees from Ontario to PSP to provide the service,
this would not be possible.
During the week of December 20,Harmony and Airport Staff were in constant contact attempting to come
up with a solution in advance of the January 6 start of service. Ultimately, as a last resort, Harmony was
offered ticketing, office and baggage makeup space in the terminal, which it has agreed to lease on a
month-to-month basis. Hilltop Aviation, currently providing above-the-wing services to Harmony in LAX,
has been selected by the airline to provide that service in PSP. Hilltop employees will staff the ticket
counter and gate during Harmony's Thursday and Sunday service.
Harmony Airways is interested in leasing airline exclusive use space at the airport to support flight
operations which begin on January 6, 2005.The term of the lease is for three months with no extension
options.The monthly rental is based on approximately 562.5 square f eet a t$25.79/sf/annum a nd
approximately 450 square feet at $12.90/sf/annum as established by the City's Comprehensive Fee
Schedule.
The lease agreement is attached and has recently been reviewed as to form by the CityAttorney's office
and determineed, to be acceptable,
Richard S. a s
Director of Aviation
APPROVE ' �'° ✓
City Manager
Attachment:
1. Lease Agreement
2. Minute Order
LEASE
CITY OF PALM SPRINGS,
a municipal corporation
"Landlord"
and
HARMONY AIRWAYS
"Tenant"
LEASE
THIS LEASE ("Lease") is made and entered into this day of
2005, by and between the CITY OF PALM SPRINGS, a municipal corporation ("Landlord"), and
Harmony Airways (HMY Airways, Inc.) ("Tenant").
1. 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 a ny 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 Demised Premises. The "Demised Premises" shall refer to office space in
the Airport terminal building which City has granted Tenant the right to use exclusively from the
Effective Date of the Agreement as shown on Exhibit "A" hereof.
1.2 Lease Commencement Date. The term of this Lease shall commence, at
Lessee's sole option, on January 6, 2005 and shall terminate on April 5, 2005.
1.3 Extension Options. None.
1.4 Monthly Rental.Base Rental-562.5 Sq.Ft. Conditioned Exclusive Use Space
at$25.79/SF/Annum and 450 Sq.Ft. Non-Conditioned Exclusive Use Space at$12.90/SF/Annum
_ $20,311.88 per annum or$1,692.66 per month (See Section 3.1).
1.5 Security Deposit. Cash deposit equal to one (1) month Base Rental.
1.6 Use of Demised Premises. Demised Premises may be utilized for the
operation of Tenant's corporate business and such other lawful uses permitted under the Zoning
Ordinances of the City applicable to the Demised Premises and the Airport Rules and Regulations.
1.7 Not Applicable Sections. Sections 3.2, 3.3 and 6.4 shall not be applicable to
this Lease.
1.8 Tenant's Address for Notices.
Lloyd Whittall
Harmony Airways
5`h Floor, 1202 West Pender Street
Vancouver, BC, Canada V6E 2V2
604.270.3303
2. TERM.
2.1 Initial Term. The initial term of this Lease 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 herein.
2.2 Option Term. Tenant is given the option(s) to extend the term on all of the
provisions contained in this Lease forthe period specified in Section 1.3("extended term")following
the expiration of the initial term or any other extended term properly exercised hereunder, by giving
notice of exercise of the option ("option notice")to Landlord at least one hundred twenty(120)days
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but not more than six(6)months before the expiration of the initial term or any other extended term
properly exercised hereunder; provided that, if Tenant is in default on the date of giving the option
notice, the option notice shall be totally ineffective or, if Tenant is in default on the date the
extended term is to commence,the extended term shall not commence and this Lease shall expire
at the end of the initial term or properly exercised extended term.
2.3 Time. Time is of the essence of this Lease.
2.4 Force Maleure. 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 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.
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 rental equal to one hundred fifty
percent (150%) of the last applicable Monthly Rental and upon terms and conditions as existed
during the last year of the term hereof.
3. 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 Demised
Premises the sum specified in Section 1.4 hereof, 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 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 13.10
hereof.
3.2 Percentage Rental.
(a) In addition to the Monthly Rental hereinabove agreed to be paid by
Tenant, Tenant shall and will pay to Landlord at the time and in the manner herein specified as
additional rental(sometimes referred to herein as"percentage rental")a sum equal to the following:
(1) The product of the rate set forth in the Landlord's fee schedule
payable by Fixed Base Operators times the gross sales made in, upon, or from the Demised
Premises with respect to any commercial activity each month during the term hereof.
(b) Within fifteen (15)days after the end of each calendar month of the term
hereof,commencing with the fifteenth(15th)day of the month following the Commencement Date,
and ending with the fifteenth (15th) day of the month next succeeding the last month of the Lease
term, Tenant shall furnish to Landlord a statement in writing, certified by Tenant to be correct,
showing the total gross sales made in, upon, or from the Demised Premises during the preceding
calendar month relating to such commercial activity (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
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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, licenseeor concessionaire in,at,from,or arising out of the use
of the Demised Premises,whether wholesale orretail,whetherforcash orcredit,orotherwise, and
including the value of all consideration other than moneyreceived forany of theforegoing,without
reserve or deduction for inability or failure to collect, including but not limited to sales, leases and
services related to said commercial activity for which there is a Fixed Base Operator fee. 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 orwhen Tenant receives payment therefor. GrossSalesshall
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 anyand
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 tothe 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 Adjustmenk 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 Monthly Rental shall be adjusted in proportion to changes
in the Consumer Price Index except that no five (5) year adjustment shall exceed 25%. 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 Indexfor the same calendar month immediately prior to
Commencement Date. For example, if the adjustment is to occur effective June 1,1989, the index
to be used for the numerator is the index for the month of March 1989 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 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.
3.4 Additional Rental. For 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.
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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. (Tenant specifically acknowledges
that the interest granted under this Lease may be subject to possessory interest 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 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 propertyto be assessed and
billed separately from the real property of Landlord.
3.7 Utilities. All costs for water, gas, heat or electricity used in connection with
the heating or air conditioning furnished to the Demised Premises shall be paid by City. Tenant
shall pay before delinquency all charges fortelephone service,trash removal and all other services
and utilities used in, upon, or about the Demised Premises by Tenant or any of its subtenants,
licensees, or concessionaires during the term of this Lease.
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, the exact amount of which is extremely difficult to ascertain. Such
costs include,but are not limited to,processing and accounting charges. Accordingly,anypayment
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 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. USE OF THE PREMISES.
4.1 Permitted Use. The Landlord hereby leases to Tenant and Tenant hires from
Landlord the Demised Premises with appurtenances as defined herein, for the purpose of
conducting thereon only the use specified in Section 1.6 of this Lease and for no other use.
4.2 Prohibited Uses. Tenant shall not sell or permit to be kept, used, displayed
or sold in or about the Demised Premises(a) pornographic or sexually explicit books, magazines,
literature, films or other printed material, sexual paraphernalia, or other material which would be
considered lewd, obscene or licentious, (b)any article which may be prohibited by standard forms
of fire insurance policies,or(c)any alcoholic beverages unless expressly permitted by Section 1.6
hereof. Tenant shall not use, or permit to be used, the Demised 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. Tenant shall have no right to self-fuel or sell fuel
to others. Tenant shall have no right to provide hangaring or parking for aircraft except for those
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having maintenance performed on them or for Tenant's own aircraft.
4.3 Compliance with Laws. Tenant shall, at his 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. Thejudgment of any court of competent jurisdiction, orthe 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 not engage in any activity on or about the Demised Premises 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 sec.; (ii) the Resource Conservation and
RecoveryAct 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 sue.; (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 sue.; (viii) California Water Code Section 1300
et sec.; and (ix) California Civil Code Section 3479 et sec., 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 pollutionor nuisance underthe Environmental Laws;(ii)petroleum
or a petroleum product or fraction thereof; (iii)asbestos; and/or(iv)substances known bythe 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 Non-Discrimination & FAA Required Clauses.
(a) Tenant,in the operations to be conducted pursuant to the provisions
of this Lease and otherwise in the use or the Airport, shall not discriminate against any person or
class of persons by reason of race,color, sex, creed or national origin as in anymanner prohibited
by Part 15 of the Federal Aviation regulations or any amendments thereto.
(b) Tenant shall furnish its accommodations and/or services on a fair,
equal and not unjustly discriminatory basis to all users thereof. It shall charge fair, equal and not
unjustly discriminatory prices for each unit or service; provided, however, that the tenant may be
allowed to make reasonable and non-discriminatory discounts, rebates or other similar types of
price reductions to volume purchasers in accordance with the other provisions of this Lease with
regard to discounts and rebates.
(c) The Tenant agrees to insert the anti-discrimination provisions
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hereinabove enumerated in any agreement by which said Tenant grants a right or privilege to any
person,firm orcorporation to render accommodations and/or services to the public on the Demised
Premises.
(d) Landlord also reserves the right,but shall not be obligated to Tenant,
to maintain and keep in repair the landing area of the Airport, as well as publicly-owned facilities
of the Airport,together with the right to direct and control the activities of the Tenant in this regard.
(e) Tenant hereby agrees to comply with the notification and review
requirements covered in Part 77 of the Federal Aviation regulations in the event any future
structure or building is planned or in the event of any planned modification or alteration of any
present or future building or structure situated on the Demised Premises.
(f) Landlord hereby reserves a right of flight for the passage of aircraft
in the airspace above the surface of the Demised Premises together with the rightto create in said
airspace such noise as is or shall become inherent in the operation of aircraft operating on the
Airport.
(g) Tenant, by accepting the Lease, expressly agrees for itself, its
successors and assigns that it shall 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
five hundred (500)feet. In such an event, Landlord reserves the right to enter upon the Demised
Premises and cause the abatement of the interference or hazard at the expense of the Tenant.
(h) Tenant, by accepting this Lease, expressly agrees for itself, its
successors and assigns that it shall not use the Demised Premises in any manner which might
interfere with the landing and taking off of aircraft from on or off the Airport or otherwise create a
hazard. In such an event, Landlord reserves the right to enter upon the Demised Premises and
cause the abatement of the interference or hazard at the expense of the Tenant.
(1) This agreement 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 or commandeering of the Airport orthe exclusive ornon-
exclusive use of the Airport by the United States during the time of war or national emergency.
Q) Operations for Benefit of Public. Tenant agrees to operate the
Demised premises for the use and benefit of the public, to make available all Tenant's airport
facilities to the public, without discrimination on the grounds of sex, race, color or national origin
and to refrain from imposing or levying excessive, discriminatory or otherwise unreasonable
charges or fees for any use of its facilities or otherwise unreasonable charges or fees for any use
of its facilities for services. Nothing herein contained shall be construed to grant or authorize the
granting of an exclusive rightwithin the meaning of Section 308 of the Federal Aviation Act of 1958,
as amended. Other Tenants or aircraft shall have the right to crossover taxiway/ramp areas of the
Leasehold.
4.5 Signs. 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 Wthout Tenant's
approval and without any liability to Tenant.
4.6 Public Facilities, Ingress,Egress and QuietEnioyment Landlord agrees that
Tenant, upon payment of the rental hereunder and performing the covenants of the Lease, may
quietly have, hold and enjoy the Demised Premises during the term of the Lease,and that Tenant
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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. City shall provide parking at no cost
for two Tenant employee vehicles in the Airport Employee Parking Lot.
4.7 Rules and Regulations. Tenant shall faithfully observe and comply with the
rules and regulations that Landlord shall from time to time promulgate and/or modify. Any
amendment or modification of the Rules and Regulations shall be binding upon the Tenant upon
deliveryof a copy of such amendment ormodification 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. Tenant shall further comply with the additional rules and
regulates described at Exhibit"C" hereto.
5. ALTERATIONS AND REPAIRS
5.1 Improvements,Alterations and Fixtures. Tenant shall not make or suffer to
be made, any alterations or improvements to the Demised Premises, orany part thereof, without
the prior written consent of Landlord, and any alterations or improvements to the Demised
Premises, except movable furniture, and trade fixtures, shall become at once a part of the realty
and shall at the expiration or earlier termination of this Lease belong to Landlord free and clear of
any liens or encumbrances. Tenant shall not in any event make any changes to the exterior of the
Demised Premises, if any. Anysuch alterations or 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 alterations or improvements be removed prior to the expiration of the term hereof. Any
removal of alterations or 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 can surrendered in a good,
clean and sanitary condition as required by Section 5.2 hereof. Anyand 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 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 Demised premises and other improvements within 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 hereby waives all right to make repairs at the expense
of the State of California to make said repairs. By entering into the Demised Premises, Tenant
shall be deemed to have accepted the Demised 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 Demised Premises with appurtenances, in the same condition as when
received and in a good, clean and sanitary condition, reasonable use and wear thereof and
damage by fire,act of God or bythe elements excepted. Tenant shall periodically sweep and clean
the sidewalks adjacent to the Demised premises, as needed.
5.3 Free From Liens. Tenant shall keep the Demised 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.
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5.4 Construction Obligations. None.
5.5 Landlord's Reserved Rights.
(a) Airport Development and Safety. Landlord reserves the right to
further develop or improvethe aircraft operating area of the Airport as it sees fit,except that portion
of the Airport comprising of the Demised Premises, and Landlord reserves the right to take any
action it considers necessaryto develop the terminal areas as it sees fit, regardless of the desires
or view of Tenant, and without interference or hindrance from Tenant or protect the aerial
approaches of the Airport against obstruction, together with the right to prevent Tenant from
erecting or permitting to be erected anybuilding or other structure of the Demised premises which,
in the opinion of Landlord,would limit the usefulness oftheAirport or constitute ahazard to aircraft.
(b) Lease 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 insofar as they are inconsistent with the provisions of the Lease 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 so as to extend and
postpone the expiration thereof unless the Tenant otherwise elects to terminate the Lease.
6. INSURANCE, INDEMNIFICATION AND BONDS.
6.1 Insurance Provided bvTenant.
(a) Food Preparation. Tenant, if involved in food preparation and sales
as a cafe, restaurant, or similar use, and/or food takeout service, shall install at Tenant's expense
any fire protective systems in grill, deep fry, and cooking areas which are required by city, county,
and statefire ordinances,and such system when installed shall qualifyfor full fire protective credits
allowed by the fire insurance rating and regulatory body in whose jurisdiction the Demised
Premises are located.
(b) Tenant to Provide Personal Property Insurance. Tenant, at its
expense, shall maintain fire and extended coverage insurance written on a per occurrence basis
on its trade fixtures,equipment,personal property and inventory within the Demised Premises from
loss or damage to the extent of their full replacement value and shall provide plate glass coverage.
(c) 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 bodilyinjury, death or property damage occurring in, upon or about the Demised Premises and
on any sidewalks directly adjacent to the Demised Premises written on a per occurrence basis in
an amount not less than either (1) a combined single limit of ONE MILLION DOLLARS
($1,000,000.00) for bodily injury, death, and property damage or (ii) bodily injury limits of
$$250,000.00 per person, $500,000.00 per occurrence and $500,000.00 products and completed
operations and property damage limits of $100,000.00 per occurrence and $250,000.00 in the
aggregate; provided, however, if Landlord so elects Landlord may provide such insurance and, in
such event,Tenant agrees to pay its pro rata share of the cost of said insurance on the same basis
as provided in Section 6.1 above.
(d) Tenant to Provide Worker's Compensation Insurance. Tenantshall,
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 Californiaand which shall indemnify, insure
and provide legal defense for both the Tenant and the Landlord against anyloss, claim or damage
arising from any injuries or occupational diseases occurring to any worker employed by or any
Page 9 1�
persons retained by the Tenant in the course of conducting Tenant's business in the Demised
Premises.
(a) 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 A:VII or better by Best's Insurance Guide. In the event
the Risk Manager of Landlord ("Risk 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 Risk Manager; provided that Tenant shall havethe 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
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,waive 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
expense, shall maintain fire and extended coverage insurance throughout the term of this Lease
written on a per occurrence basis onthe Demised Premises, itstrade 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 of Landlord. Tenant,as a material part of the consideration
to be renderedto Landlord underthis Lease, herebywaives all claims against Landlord fordamage
to equipment orother 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 Demised Premises,from any cause arisingat anytime. 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 (1) 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 Demised Premises
or the parking and common areas by Tenant or its employees and customers, (III) or arising from
the failure of Tenant to keep the Demised Premises in good condition and repair, as herein
provided, or (iv) arising from the negligent acts or omissions of Tenant hereunder, or (v) arising
from Tenant's negligent performance of or failure to perform any term, provision covenant or
condition of this Lease,whether ornot 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
Page 10
V
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 anyaction oractions 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 therefrom;
(c) In the event the Landlord, its officers, agentsor employees is madea 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 bythe Landlord, its officers,agents
or employees in such action or proceeding, including but not limited to, legal costs and attorneys'
fees.
6.4 Performance Bond. Concurrently with the execution of this Agreement,
Tenant shall deliver to City a performance bond in the sum of$500,000 in the form provided by the
City Clerk, which secures the faithful mitigation of potential leakage/spillage of fuel from Tenant's
fuel storage facility,fuel transfer equipment or aircraft.The bond shall contain the original notarized
signature of an authorized officer of the surety and affixed thereto shall be a certified and current
copy of his power of attorney.The bond shall be unconditional and remain in force during the entire
term of the Agreement. The bond shall be satisfactory only if issued by companies qualified to do
business in California, rated"A" or better in the most recent edition of Best Rating Guide, The Key
Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or
better, unless such requirements are waived by the Risk Manager of the City due to unique
circumstances.
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 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. 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 anyexisting subleases or subtenancies,ormay,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 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. Tenant shall promptly clean and remove all debris resulting from said damage or
Page 11n
� /
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 or sublet the Demised Premises,or any interest
therein,without the priorwritten consent of Landlord; provided that,Tenant may sublet sections of
the Demised Premises not exceeding twenty percent (20%) of the Demised Premises to a Fixed
Based Operator permitted to operate at the Airport or to Palm Springs Mustang for the restoration
of vehicles and aircraft detailing without the consent of the landlord. For purposes of this Lease,
an assignment shall be deemed to include the transfer to any person or group of persons acting
in concert of more than twenty five percent (25%) of the present ownership and/or control of
Tenant,taking all transfers into accounton a cumulative basis.Any such assignment orsubletting
shall be subject to all of the terms and conditions of this Lease and proposed assignee shall
assume the obligations of Tenant underthis 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 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 priorwritten consent of Landlord shall be void, shall constitute a material breach of this Lease,
and shall, at the option of Landlord, terminate this Lease. Neither this Lease nor any interest
therein shall be assignable as to the interest of Tenant by operation of law.
Landlord shall be under no obligation to consider a request for Landlord's consent
to an assignment until Tenant shall have submitted in writing to Landlord a request for Landlord's
consent to such assignment together with audited financial statements of 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 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, 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 sub-leasehold interest of a subtenant, and shall not affect in any way the landlord's interest in
the land. 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
any part of the outstanding mortgage. Tenant agrees to furnish, as requested, any financial
statements or analysis 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
OIL
Page 12 \1
California and Landlord shall beg Ivan 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 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. 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 the purchaser shall
assume in writing the obligations of Tenant hereunder.
(a) 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 oonsent may not be unreasonably withheld, and other
expenses necessary to place the improvements in marketable condition, such adjusted principal
to be paid incase 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-f ive(45)days
to cure a non-monetarydefault cannot be cured within such period of forty-five days,encumbrancer
shall have a reasonable time to cure such default provided that encumbrancer commences tocure
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 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 paymentof 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 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 bankruptcywhich is not dismissed within sixty
(60)days after filing; or(h)the attachment, execution or otherjudicial seizure of all or substantially
Page 13
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 ordemand, rectify or cure such default, and any sums expended
by Landlord for such purposes shall be paid by Tenantto 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 infull force and effect and enforce all of its rights and remedies under
this Lease, including the right to recover the rental as it becomes due under 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:
(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 orwhich
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 Monthly 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 hereunderon 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 attorney's fees and costs incurred by Landlord in
defending any action brought against Landlord for any recovery thereof, and in enforcing the terms
Page 14 V k
and provisions of this indemnification against Tenant.
Notwithstanding any of the foregoing, the breach of this Lease by Tenant, or an
abandonmentof the Demised Premises by Tenant,shall not constitute atermination 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,
includingthe rightto recover rent,andall 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 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 as a result of Landlord's default and
Tenant's remedies shall be limited to damages and/or an injunction.
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. Tenant shall not be entitled to share in any portion of the award and
Tenant hereby expresslywaives 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 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 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,
to place upon the Demised Premises any usual or ordinary"For Lease"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,
Page 15 ®�
C�
to deliver such estoppel certificate in the form attached hereto as Exhibit "B" 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 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 placefor venue as to any such litigation
and Tenant agrees to submit to the persona Ijurisdiction of such court in the event of such litigation.
13.4 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 waybe affected, impaired
or invalidated thereof.
13.5 Successors in Interest. The covenants herein contained shall, subject to the
provisions as to assignment,apply toand 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 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.
13.7 Authority. In the event that Tenant is a corporation or a partnership, each
individual executing this Lease on behalf of said corporation or said partnership, as the case may
be, represents and warrants that he or she is duly authorized to execute and deliver this Lease on
behalf of said corporation or partnership,in accordance with a duly adopted resolution of the Board
of Directors,if corporation,orin accordancewith the PartnershipAgreement,if 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.
13.5 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 anyway
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 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
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 enjoymentof 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.
Page 16
t
13.10 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,to Cityof 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 partys
consent to or approval of any act by the other party requiring the partys 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.
13.12 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
provisions of an Addenda and the terms and provisions of this Lease, the terms and provisions of
the Addenda shall prevail.
13.13 At Expiration or Termination of Lease. Upon the expiration or sooner
termination of this Lease, Tenant shall promptly deliver to Landlord a quit claim deed conveying
its interest in the Demised premises to Landlord.
Page 17 - ��
12/28/2004 17:27 FAX 849 223 1180 ALESHIRE & WYNOER, LLP Z 003/005
IN WITNESS WHEREOF, the parties have executed and enterad into this Agreement as of the
date first written above.
CITY OF PALM SPRINGS
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VV I N ASS my hand and nffiglol cpoI, WI"I'NE35 my hunt and official seal.
Notch
8 Y NnIF!ry
819m)lure: ............�,.,..__ .,. ... signature:
Notary Seel. Notary Scat
I'rrlh`• t
EXHIBIT "A"
o EXCLUSIVE USE SPACE
SPACE#4 -562.5 SQ.FT.
9
°----------------- ------------------- SPACE SQ.FT.
4 Exclusive 562.5
0 EDS 450.0
----------------- - —-------- Outbound 450.0
1
2
3
C
7 4
5
6
C
EXHIBIT "B"
ESTOPPEL CERTIFICATE
Tenant:
Landlord: CITY OF PALM SPRINGS, a municipal corporation
Date of Lease:
Demised 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 ("Demised Premises").
2. The Lease constitutes the entire agreement between landlord under the Lease
("Landlord") and Tenant with respect to the Demised Premises and the Lease has not been
modified, changed, altered or amended in any respect except as set forth above.
3. The term of the Lease commenced on , 20_, and, including
any presently exercised option or renewal term, will expire on , 20
Tenant has accepted possession of the 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 completedand
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 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 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
$ 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 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. Tenant has no right to renew or extend
the term of the Lease except asset forth in the Lease.
EXHIBIT
TO LEASE gAyc3
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 "B" �
TO LEASE
EXHIBIT "C"
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 Demised
Premises shall be subject to such rules and regulations as in the reasonable judgment of Landlord
are necessary for the proper operation of the Demised 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 Demised 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 Demised 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 Demised Premises without first obtaining in each
instance written consent of Landlord.
6. The outside sidewalks and loading areas immediately adjoining the Demised Premises
shall be kept clean and free from dirt and rubbish by Tenant to the reasonable satisfaction of
Landlord, and Tenant shall not place or permit any obstructions or merchandise in such areas,
except to the extent specifically permitted by the provisions of Tenant's Lease.
7. Tenant shall not burn any trash or garbage of any kind in or about the Demised
Premises or the Property generally.
8. Tenant will not allow animals, except seeing-eye dogs, in, about or upon the Demised
Premises.
9. Tenant shall not use, and shall not allow anyone else to use, the Demised Premises as
a habitation. Such prohibition shall include, without limitation, sleeping, eating or bathing.
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.
MINUTE ORDER NO. 60 1'
APPROVING A LEASE AGREEMENT FOR AIRLINE
EXCLUSIVE USE SPACE BETWEEN THE CITY OF
PALM SPRINGS AND HARMONY AIRWAYS.
I HEREBY CERTIFY that this Minute Order, approving a Lease Agreement for
airline exclusive use space between the City of Palm Springs and Harmony
Airways, was adopted by the City Council of the City of Palm Springs,
California, in a meeting thereof held on January 5, 2005.
Kathie Hart
City Clerk