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HomeMy WebLinkAboutA4159 - PARADIES SHOPS LEASE CONCESSIONS MO 6510LEASE AGREEMENT FOR CONCESSIONS AT PALM SPRINGS INTERNATIONAL AIRPORT AGREEMENT NO A4159 AMENDMENT NO. 5 TO AIRPORT CONCESSIONS FOR NEWS AND GIFTS LEASE THIS AMENDMENT NO.5 TO THE PALM SPRINGS INTERNATIONAL AIRPORT CONCESSION AGREEMENT ("Amendment"), is made and entered into as of the 12th day of October 2020, by and between the CITY OF PALM SPRINGS, a charter city and municipal corporation organized and existing under the laws of the State of California ("City") and The PARADIES SHOPS L.L.C., a corporation organized and existing under the laws of the State of Arizona ("Concessionaire"). RECITALS 1. Whereas City and Concessionaire are parties to that certain Airport Concession Agreement, dated November 1, 1999, as amended by Amendments 1 through 4 (collectively, the "Lease"), pursuant to which City granted to Concessionaire various rights related to the use of the Palm Springs International Airport for the operation of Airport concession business. 2. Whereas the term of the Lease expires on December 31, 2020. 3. Whereas, the Concessionaire and the City mutually desire to extend the term and amend certain other provisions of the Agreement. NOW, THEREFORE, in consideration of the mutual covenants and promises in this Amendment, the parties hereto covenant, agree and bind themselves as follows: 1. Section 6 Term of Lease. Section 6 of the Lease is hereby amended to read as follows: "Unless earlier terminated in accordance with Section 7 below, the term of this Lease shall commence as of January 1, 2021 and shall continue through and including April 30, 2023 for the locations identified below: Current Facilities Locations: Extension: New & Gifts PGA Shop & Gifts April 30, 2023 Desert Mart Desert News CNBC Store News & Gift (Pre -Screening) 55575,18160\33346641,1 Facilities Locations: Extension: April 30, 2023 Food & Beverage The Wine Bar at PSP (formerly Vintage Wine Bar) PSP Coffee House (formerly Starbucks - post screening) Santa Rosa Kitchen (formerly 12t' Fairway) Concept Underdevelopment (formerly Tap Room) Due to the impact of the COVID-19 virus, the dramatic reduction in passenger traffic, and the vacancy of the former food and beverage concessionaire, it is necessary to amend the Lease. Exhibit "A", attached hereto and incorporated by reference herein, identifies the locations that are subject to this Lease. Upon the expiration of the term of this Lease, the City Manager may extend the Lease term based upon a month -to -month tenancy, subject only to appropriation of necessary funding by the City Council. 2. Section 2.1 Minimum Annual Rent Guarantee. Section 2.1 of the Lease Minimum Annual Rent Guarantee is hereby deleted in its entirely. 3. Section 2.2 Percentage Rent. Section 2.2 of the Lease is amended as follows: "2.2 Percentage Rent. Due to the uncertain level of sales due to the COVID- 19 pandemic, Percentage Rent for the Lease Area shall be calculated using the following table of percentages of gross receipts from business operations conducted on or from the Lease Area: Food & Beverage Sales Tier Less than - $1,500,000 @ 4% $1,500,000 - <$3,000,000 at 6% of gross revenue $3,000,000 - <$5,000,000 at 8% of gross revenue $5,000,000 - <$7,000,000 at 10% of gross revenue $7,000,000 and greater at 12% of gross revenue Gift, News and Travel essential to remain at 12% of gross revenue." 4. Tenant's Investment and Schedule. Tenant shall cause to be designed, constructed, and installed within the Lease Area, at no cost to City, appropriate improvements to adequately accommodate those services and uses described in this Lease (as amended hereby) and described below, in the amount set forth below, and in accordance with the following timeframes: Improvement Package — Capital Investment by Tenant up to $512,300, with immediate investment for the following: 55575.1B160\33346641. 12 • Expanded food menu and table service • Post Screening Coffee (formally Starbucks) — target November 15, 2020 • Bono Restaurant (formally 12t' Fairway) — target November 15, 2020 • Wine Bar (formally Vintage) — target November 15, 2020 • Regional Concourse (formerly Tap Room) — target December 15, 2020 All improvements constructed by Tenant within the Lease Area shall be constructed in strict compliance with detailed plans and specifications approved by the Contract Officer. 5. Applicability. This Amendment is attached to and made a part of the Lease. In the event of any contradiction or inconsistency between the terms and provisions of this Amendment and the terms and provisions of the Lease to which it is attached, the terms and provisions of this Amendment shall control and be interpreted in such a manner as to override any provision of the Lease which would prevent the spirit and letter of the terms and provisions of this Amendment from being given full force and effect. All defined terms not specifically defined in this Amendment shall be given the same meaning as the defined terms in the Lease. All other terms and conditions contained in the Lease shall remain unchanged. 6. Joint Authorship. This Amendment has been entered into as an act of free will, without duress, and no presumption of authorship shall attach to same, and any ambiguity in the terms and conditions of this Amendment shall not be attributed to one party over the other. SIGNATURE PAGE FOLLOWS 55575.18160\33346641. 13 IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above. "CITY" City of Palm Springs B David H. Ready, Ph.D. City Manager APPROVED AS TO FORM: ATTEST By: By: ffriefg. Batl' nger Anthony City Attorney City Clerk IIPPROKDaYWycoWCL "CONCESSIONAIRE" -a 20 Paradies Shops, LLC Concessionaire: Check one: Individual_ Corporation _ Partnership_ U 04 U a I�f tjy Corporations require two notarized signatures: One from each of the following: cow 0a~y A. Chairman of Board, President, or any Vice President: AND B. cretary, Assistant Secretary, Treasurer, Assistant Treasurer, or Chief Financial Officer. By: By: �444 .,.. Y , Signature (notarized) Name: 9.311& a TkrQ� Fe3 Title: Ties I L ', 55575.18160\33346641. 14 Signature (notarized) Name: Y—Q ri n V . 5"44 4 Title: 5 ��. ychs✓ad cokxse-1 15- ram. crz isry CALII MUL Au41ltPOSE ACNIMYNLEDGNMWr CMIL CODE $1180 A n=y public or adwr dl= aoW1 N U Ns aertinam re 15 aniln dM idnplty of fhs irdvidttel We Wgrad the daweerst dowldoh dds owditM b sasdwd aid not dw mnddfa om sooueodt ar vd ty ddo dow=it Sbfs of Oddomia Cody of On befaa an. Dm& ply oppeared Herb knwt flburns and Tiffa of 9 w Offker WaeWINOfab-vm who pored to ram an the belie of sa6aiaclary eridsrtca lb be the psawn(s) whose nemeN ia/an subecr>bed to the within kahunerd end mclewsdedged to me ild hddnsAhey executed the ten• in tdeAnerMwcm�lhai�d ppecdy[p), end that by hlaAmrA wirsipmdLos(a) an the imbnamrdthe pnrson(s), or the achy upon beha f of which the I I ecmda wmAsd do inebt nw& I owbfy under FMALTY OF PERJURY under the leers of the Sbde of Cal farms that ft» tora0aeng pmepaph is true and oew. VATNESS nW Nand and ofboial seal. awnsbas 84wwk ne of hbloy Pubad Ptsoa !Votary Stesl Above cumomoLL Though M ascfdan fa aptiorwE Dom pbl6V M trsbmrnafbbn awn deter alwafba of the document or kn uddmd rebEnchm rd of hYs form fo in urAdw ebd dbcuwsnd! Dosargrhan of Atbm*md Doc ruse Tdb or Type of Document Number of Pqpne Sipwr(s) OHw Cepeody¢OO Ckdnwd by SW—(*) Signers Maniac ❑ tner Pm — ❑ 11rn-1 ❑ Oenerel O buvidusl O ARomey In Foot O Tna�s O Gmrdmr or Oonasvator ❑ ORter. Sigrier In W Docummd Dab: Then Na ned Above: is Nemec ❑ 0arpards Off— -- Tdl*)e ❑ Partner — O 11 1—d O Gen" ❑ bndridad ❑ Af imey in Fad ❑ Tnmtes ❑ Omrdmn or Cansmvatar ❑ Other BigrwN 02014 ffa6ond NWwyAaaonie m {tern gaw 55575,18160\33346641. 15 Exhibit "A" Concession Locations: Desert Mart Desert News k CNBC Store News & Gift (currently repurposed for Ticket -Wing project) Celebrity B Desert 55575.18160\33346641. 16 12"1 Fairway Wine Bar Coffee Shop Tap Room A`C v® CERTIFICATE OF LIABILITY INSURANCE �0si300/2020 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsements . PRODCONTACT UCER MCGRIFF, SEIBELS & WILLIAMS, INC 3400 Overton Park Drive SE NAME: Gladys I. Lucero, PHONE 404 497-7500 AM No : ADDRESS: 9IUCeroQMC9dff.cam Suite Atlanta, GA 30339 INSURERIS) AFFORDING COVERAGE NAIC tl INSURER A;Sentry lnaurance A Mutual Company 24988 INSURED Fulton Holding. LLC INSURER n :Travelers Property & Casualty Co. INSURER C : do The Paradise Shops. LLC 2849 Paces Ferry Road Overlook I, Suite 400 INSURER D : INSURER E : Atlanta, GA 30339 INSURER F : COVERAGES CERTIFICATE NUMBER:KTFDXXQE REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES_ LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS, INTR TYPE of INSURANCE POLICY NUMBER POLICY EFF MWDD POLICY EXP MWD LIMITS A X COMMERCIAL OENERAL LIABILITY CLAIMS MADE OCCUR 901614303 07/01/2020 0101/2021 EACH OCCURRENCE S 11000,000 DAMAGE TO RENTE15___ PREMISES Ea occurrence ± 1,000,D00 MED EXP (Arty oneperson) $ 10.000 X Liquor Liability Included_ X X PERSONAL a ADV INJURY f 1,000,0DO GENERAL AGGREGATE S 5,000,000 GEN1_ AGGREGATE LIMIT APPLIES PER: POLICY1:1 JECT 0 LOC PRODUCTS - COMPIOP AGG S 2,000,000 $ OTHER: A AUTOMOBILE LIABILITY 901614304 071 112020 C-7fC 112021 G MBINEO I LIMIT Ea acddentl 3 1,000,000 BODILY INJURY (Per person) 3 X ANY AUTO OWNED SCHEDULED AUTOS ONLY AUTOS X X BODILY INJURY (Per accident) S HIRED NON -OWNED AUTOS ONLY AUTOS ONLY PROPERTY DAMAGE Per accident $ Comprehensive & Collision $ 2,500 B X UMBRELLA LEAS X OCCUR 07101/2020 07/01/2021 EACH OCCURRENCE $ 10.090.000 AGGREGATE S 10,000,000 EXCESS L1AB CLAIMS -MADE FP-SIM35374-20-NF DED I X I RETENTIONRETENTION$ 10Ooo Products/Completed O s $ 10,0m,006 A WORKERS COMPENSATION AND EMPLOYERS' LIABILITY YIN ANY OFFICEOPRIET ER OM UpE�D7ECURVE �A (Mandatory In NH) N 1 A X 901614301 AOS) 901614302 I) 071OW020 071OW021 X PER OTH E.L. EACH ACCIDENT $ 1 •�•� E.L. DISEASE - EA EMPLOYEE S 1.000,000 H yes. describe under DESCRIPTION OF OPERATIONS belowE.L. DISEASE -POLICY LIMIT $ 1 000,000 3 S S S DESCRIPTION OF OPERATIONS 1 LOCATIONS /VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached It mom space is required) Re: EZ Go Golf Cart #1022290 Code F0497 The City of Palm Springs, it's officials, employees and agents are included as Additional Insured - Managers or Lessors of Premises as respects General Liability coverage referenced herein as required by written contract. Waiver of Subrogation is in favor of the Additional Insured for the General Liability policy referenced herein as required by written contract. Where Additional Insured status is given, the General Liability coverage provided said Additional Insured is primary and non-contributory over any other in force and Collectible coverage as required by written contract. In the event of cancellation by the Insurance companies the General Liability, Workers Compensation, Automobile Liability and Excess Liability policies have been endorsed to provide 30 days Notice of Cancellation (except for non-payment) to the certificate holder shown below. MULUkK Palm Springs Intemational Airport Department of Aviation Attn: Janet Buck 3400 Tahquitz Canyon Way Suite OFC Palm Springs, CA 92262 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE 14X�ze Page 1 of 4 0 1988-2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016103) The ACORD name and logo are registered marks of ACORD COMMERCIAL GENERAL LIABILITY NAMED INSURED ENDORSEMENT EFFECTIVE POLICY NUMBER HDS RETAIL NORTH AMERICA LLC 07-01-20 90-16143-0 3 ADDITIONAL INSURED - MANAGERS OR LESSORS OF PREMISES This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE 1. Designation of Premises (Part Leased to You): INSURED'S LOCATION REQUIRED BY CONTRACT OR AGREEMENT 2. Name of Person or Organization (Additional Insured): WHERE REQUIRED BY WRITTEN CONTRACT OR AGREEMENT SUCH WAS MADE PRIOR TO LOSS. LOSS. 3. Additional Premium: Included WHO IS INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Schedule and subject to the following additional exclusions: This insurance does not apply to: I. Any "occurrence" which takes place after you cease to be a tenant in that premises. 2. Structural alterations, new construction or demolition operations performed by or on behalf of the person or organization shown in the Schedule. CO 20 11 04 13 Copyright, Insurance Services Office, Inc. , 2012 HDS 90-16143-03 01 201 07-09-20 #03 OMOORc 00630 COMMERCIAL GENERAL LIABILITY CG 20 01 04 13 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. PRIMARY AND NONCONTRIBUTORY - OTHER INSURANCE CONDITION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART The following is added to the OTHER INSURANCE Condition and supersedes any provision to the contrary: PRIMARY AND NONCONTRIBUTORY INSURANCE This insurance is primary to and will not seek contribution from any other insurance available to an additional insured under your policy provided that: (1) The additional insured is a Named Insured under such other insurance; and (2) You have agreed in writing in a contract or agreement that this insurance would be primary and would not seek contribution from any other insurance available to the additional insured. CG 20 01 04 13 Copyright, Insurance Services Office, Inc., 2012 HDS 90-16143-03 01 201 07-09-20 PAGE 001 CITI S 00686 COMMERCIAL AUTO CA 80 07 0618 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - AUTOMATIC STATUS WHEN REQUIRED BY CONTRACT OR AGREEMENT WITH YOU This endorsement modifies insurance provided under the following: AUTO DEALERS COVERAGE FORM BUSINESS AUTO COVERAGE FORM MOTOR CARRIER COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by this endorsement. A. The Who Is An Insured provision of Covered Autos Liability Coverage is amended to include as an additional insured any person or organization for whom you are performing operations when you and such person or •organization have agreed in• writing in a contract or agreement that such person or organization be added as an additional insured on your policy. The status of an additional insured under this endorsement ends when your operations for that additional insured are completed. B. The most we will pay on behalf of the additional insured is the lesser of the amount payable under the Limit of Insurance for Covered Autos Liability Coverage or the amount of insurance required by the contract or agreement. C. Notwithstanding any requirement, term or condition of any contract or agreement with respect to which this endorsement may pertain, the insurance afforded to the additional insured is subject to all the terms, exclusions and conditions of the COMMERCIAL AUTO COVERAGE FORM to which this endorsement is attached. CA 80 07 0618 Includes copyrighted material of Insurance Services Office, Inc., Page 1 of 1 HDS 90-16143-04 00 tar with its permission. 07/09/2020 1 00001 0000000148 20193 0 N B7CDABDF•296D4942-B3EA-5E5F27521679 COMMERCIAL AUTO CA 7616 0618 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BLANKET WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US (WAIVER OF SUBROGATION) This endorsement modifies insurance provided under the following: AUTO DEALERS COVERAGE FORM BUSINESS AUTO COVERAGE FORM MOTOR CARRIER COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement. This endorsement changes the policy effective on the inception date of the policy unless another date is indicated below. 'Named Insured: Endorsement Effective Date: The Transfer Of Rights Of Recovery Against Others To Us condition does not apply to a person(s) or organization(s), but only to the extent that subrogation is waived prior to the "accident" or the "loss" under a written contract with that person or organization. CA 7616 0618 Includes copyrighted material of Insurance Services Office, inc., Page 1 of 1 HDS 90-16143-04 00 201 with its permission. 07/09/2020 1 00001 0pWMI43 20193 0 N 9D0339A7.9705.4AE5-0F1D.8CDDBAAE4020 SENTRY INSURANCE A MUTUAL COMPANY Carrier Code No. 15571 WORKERS' COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY POLICY NUMBER: 90-16143-02 00 201 WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT We have the right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right against the person or organization named in the Schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) This agreement shall not operate directly or indirectly to benef it any one not named in the Schedule. Schedule "ALL WRITTEN CONTRACTS PROVIDED SUCH CONTRACT WAS MADE PRIOR TO LOSS" WC 00 03 13 (Ed. 04-84) Copyright 1983 National Council on Compensation Insurance. HDS 90-16143-02 00 201 HDS RETAIL NORTH AMERICA LLC 07-09-20 PACE 001 OMB" 00586 A� �m n 1 ruE EVIDENCE OF COMMERCIAL PROPERTY INSURANCE DATE (MMIDDIYYYY) 06/30/2020 THIS EVIDENCE OF COMMERCIAL PROPERTY INSURANCE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW. THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS EVIDENCE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE ADDITIONAL INTEREST. CONTACT PERSON AND ADDRESS PHONE 404 497-7500 COMPANY NAME AND ADDRESS NAIL NO: 20443 MCGRIFF, SEIBELS & WILLIAMS, INC. Zurich North America 3400 Overton Park Drive SE Suite 300 1001 SUMMIT BOULEVARD Atlanta, GA 30339 Atlanta, GA 30319 Gladys 1. Lucero, IF MULTIPLE COMPANIES. COMPLETE SEPARATE FORM FOR EACH FAX ADDRESS:gluceroftmeaffoorn CODE: SUB CODE: POLICY TYPE AGENCY CUSTOMER Mj'�_ NAMED INSURED AND ADDRESS LOAN NUMBER POLICY NUMBER Fulton Holding, LLC PPR6394301-00 do The Paradtes Shops, LLC EFFECTIVE DATE EXPIRATION DATE 2949 Paces Ferry Road Overtook 1, Suite 400 07101I2020 07/01/2021 CONTINUED UNTIL TERMINATED IF CHECKED ADDmONAL NAMED INSURED($) THIS REPLACES PRIOR EVIDENCE DATED: INFORMATION ACORD 101 may be attached if mores ace Is required) ® BUILDING OR ® BUSINESS PERSONAL PROPERTY IP�ROPPEFIRLTY Re:+EF GoEGo1 IPCart #1022290 Code F0497 THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS EVIDENCE OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. COVERAGE INFORMATION DPW CIIUC111*9:n I I 0A411- I I 920nen I X I coMf'rni I I COMMERCIAL PROPERTY COVERAGE AMOUNT OF INSURANCE: $ 250,000,000 DEC: $ 50,000 YES NO NIA El BUSINESS INCOME ❑ RENTAL VALUE X If YES, LIMIT: $ 250.000,000 X I Actual Loss Sustained; fl of months:12 BLANKET COVERAGE X If YES, indicate valve(s) reported on property identified above: $see above TERRORISM COVERAGE X Attach Disclosure Notice I DEC IS THERE A TERRORISM -SPECIFIC EXCLUSION? X IS DOMESTIC TERRORISM EXCLUDED? X LIMITED FUNGUS COVERAGE X If YES, LIMIT: DED: FUNGUS EXCLUSION (If'YES', specify organization's form used) X REPLACEMENT COST X AGREED VALUE X COINSURANCE X If YES, % EQUIPMENT BREAKDOWN (ItApplicable) X If YES, LIMIT: included DED: ORDINANCE OR LAW -Coverage for loss to undamaged portion of bldg X If YES, LIMIT: included DED: $ 50,000 Demolition Costs X IfYES, LIMIT: $ 10,000,000 DED: S 50,000 - Ina. Cost of Construction X IfYES, LIMIT: see above DED: see above EARTH MOVEMENT (If Applicable) X IfYES, LIMIT: see below DED: see below FLOOD (If Applicable) XI I I 11 YES, LIMIT: see below DED: see below WIND I HAIL INCL EYES ❑ NO Subject to Different Provisions: X IfYES, LIMIT: see below DED: see below NAMED STORM INCL ® YES ❑ NO Subject to Different Provisions: X IfYES, LIMIT: see below DED: see below PERMISSION TO WAIVE SUBROGATION IN FAVOR OF MORTGAGE HOLDER PRIOR TO LOSS X CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS, CONTRACT OF SALE { I LENDER'S LOSS PAYABLE MORTGAGEE IF --II NAME AND ADDRESS Palm Springs International Airport Department of Aviation Attn: Janet Buck 3400 Tahquitz Canyon Way Suite OFC ACORD 28 (2016103) LOSS PAYEE I LENDER SERVICING AGENT NAME AND ADDRESS AUTHORIZED REPRESENTATIVE �� A ® 2003-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD Page 2 of 4 AGENCY CUSTOMER ID: LOC #: ADDITIONAL REMARKS SCHEDULE Page 3of4 M05F, SEIBELS & WILLIAMS, INC. I FulU Holding, LLC _ do The Parades Shops, LLC POLICY NUMBER CARRIER I NAIC CRDE ISSUE DATE: 0613012020 THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: FORM TITLE: REMARKS Earth movement: $50,000,000 Except; a). $10,000,000 for property located in Zone 1 b). $25,000,000 for property located in Zone 2 $5,000,000 combined in the Annual Aggregate for property located in California. $50,000,000 in the Annual Aggregate for property located in Canada. 4. Locations in Japan - Annual Aggregate: NOT COVERED 5. Locations in other Global Critical Countries - Annual Aggregate: NOT COVERED 6. All Locations in France - Annual Aggregate: NOT COVERED Flood Limits: Flood - Annual Aggregate at all Locations inclusive of Locations further limited below: $50,000,000 a). $5,000,000 as Special Flood Hazard Area (SPHA) b). $25,000,000 as Moderate Flood Hazard Area (MFHA) 3. Netherlands— Annual Aggregate: NOT COVERED 4. Germany - Annual Aggregate: NOT COVERED Named Storm Limits: $250,000,000 NAMED STORM per occurrence but not to exceed: a). $100,000,000 for property located in Zone 1 for Named Storm as described in Appendix C & D. But not to exceed: $7,500,000 for Named Storm in Jamaica and the US Virgin Islands b). $100,000,000 for property located in Zone 2 for Named Storm as described in Appendix C & D. HAIL AND WINDSTORM OTHER THAN NAMED STORM: $250,000,000 Deductibles: All Other Perils except as provided below: $50,000 Earth Movement: $50,000 combined Property Damage and Time Element As respects Locations in Zone 1: Property Damage - 5t of the value per the most current Statement of values Time Element - 5t of the full 12 months Gross Earnings deductibles are subject to a minimum deductible of $250,000 combined Property Damage and Time Element per Occurrence. As respects Locations in Zone 2: Property Damage- 2% of the value per the most current Statement of values Per Location Time Element- 2t of the full 12 months Gross Earnings The above Earthquake deductibles are subject to a minimum deductible of $100,000 combined Property Damage and Time Element per Occurrence. Flood: $50,000 combined Property Damage and Time Element per Occurrence except as follows: $1,100,000 , per Occurrence -As respects Locations within a Special Flood Hazard Area (SFHA): Property Damage and Time Element combined $100,000 , per Occurrence, As respects Locations within a Moderate Flood Hazard Area (MFHA): Named storm: $50,000 combined Property Damage (PD) and Time Element (TE) Property Damage (PD)- 5t of the value per the most current Statement of values Time Element (TE) - St of the full 12 months Gross Earnings subject to a minimum deductible of $250,000 As respects Locations in Zone 2: Property Damage (PD) - 2% of the value per the most current Statement of values 2t of the full 12 months Gross Earnings or Gross Profit values Named Storm deductibles are subject to a minimum deductible of $100,000 combined Property Damage (PD) and Time Element (TE) per Occurrence. ® 2008 ACORD CORPORATION. All rlahta reserved. The ACORD name and logo are registered marks of ACORD CERTIFICATE NUMBER: KTFDXXQE ACCI & AGENCY CUSTOMER ID: LOC #: ADDITIONAL REMARKS SCHEDULE Page4*14 MCGRIFF, SEIBELS & WILLIAMS. INC. Ful oRnHolding, LLC do The Paradies Shops, LLC POLICY NUMBER CARRIER NAIL CODE ISSUE DATE: 06/30/2020 ALJIJI I IVRML RCRIIAIrr%o THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: FORM TITLE: (continued from previous page) Breakdown of Equipment:$50,000 Water or Liquid Damage :$75,000 Hail and Windstorm Other than Named Storm Deductible $50,000 combined Property Damage (PD) and Time Element (TE) EXCESS ONLY: Arch for $SM. x/s $5M CA EQ total TIV $77,359,082 ESPI003353-00 Limits: 100.000011; being $5,000,000 Per Occurrence and Annual Aggregate part of $5,000,000 excess of $5,000,000 and excess of deductibles to cover the following locations: 708 S. Hindry AvenueInglewoodCA90301 3400 Tahquitz Canyon Way, Suite 13Palm SpringsCA92262 6900 Airport Blvdhj.SACRAMENTOCA95837 911 N Market B1vd.SACRAMENTOCA95834 4235 Donald Douglas DriveLong BeachCA90808-1798 3225 N Harbor DrSAN DIEGOCA92101 3312 Kurtz StreetSan DiegoCA 92110 Terminal 3, Courtyard 3SAN PRANCISCOCA94128 18601 Airport Way Suite 230-ASanta AnnaCA92707 3850 Airport Blvd SacramentoCA95837 1 WORLD WAYLOS ANGELESCA90045 1 McDonnell RdSan FrancisoCA94128 1 McDonnell RdSan FrancisoCA94128 1 McDonnell RdSan FrancieoCA94128 1 Airport Drive, Terminal 2, Space E-60aklandCA94621 Terminal 2, Space 17San FranciscoCA94128 Location 4Santa AnaCA92707 Terminal B, Suite BA-212, 6851 Lindbergh DriveSacramentoCA95837 6850 Airport Blvd #22, Terminal A.SacramentoCA95837 Tom Bradley Intl Terminal, No. T49, 1 World WayLos AngelesCA90045 1 Airport Drive, Terminal 1 Gate 170aklandCA94621 1161 Mission Street, San Francisco, CA 941030aklandCA94621 180 day(s) EXTENDED PERIOD OF LIABILITY Blanket Limits Apply - No Margin Clause Applicable In the event of cancellation by the insurance company, the policy shall provide 30 days Notice of Cancellation (except 10 days for non-payment) to the certificate holder shown per the terms and conditions of the policy. Additional terms, conditions, exclusions, sublimity and deductibles apply per the policy. This certificate does not amend, extend, or alter the coverage afforded by the policy. ACORD 101(2008101) ® 2008 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD CERTIFICATE NUMBER: KTFDXXQE LEASE AGREEMENT FOR CONCESSIONS AT PALM SPRINGS INTERNATIONAL AIRPORT AGREEMENT NO A4159 AMENDMENT NO. 4 TO AIRPORT CONCESSIONS FOR NEWS AND GIFTS LEASE THIS AMENDMENT NO. 4 TO THE PALM SPRINGS INTERNATIONAL AIRPORT CONCESSION AGREEMENT ("Amendment"), is made and entered into as of the 1st day of November 2019, by. and between the CITY OF PALM SPRINGS, a charter city and municipal corporation organized and existing under the laws of the State of California("City") and The PARADIES SHOPS L.L.C., a corporation organized and existing under the laws of the State of Georgia ("Concessionaire"). RECITALS 1. Whereas City and Concessionaire are parties to that certain Airport Concession Agreement, dated November 1, 1999, as amended (the "Agreement"), pursuant to which City granted to Concessionaire various rights related to the use of the Palm Springs International Airport for the operation of Airport concession business.. 2: Whereas the term of the Agreement expires on October 31, 2019. 3. Whereas, the Concessionaire and the City mutually desire to extend the term and amend certain other provisions of the,Agreement. NOW, THEREFORE, in consideration of the mutual covenants and promises in this Amendment, the parties hereto covenant, agree and bind themselves as follows: 1. Section 2.01 Term of Agreement The term of the Agreement shall be extended from and including November 1, 2019 for the locations identified below: Current Facilities Locations: Extension: New & Gifts PGA Shop & Gifts month-to-month effective 11/01/2019 Desert Mart to May 31, 2020 Desert News to May 31, 2020 CNBC Store to May 31, 2020 News & Gift (Pre-Screening) to Feb. 29, 2020 Due to the approved Ticket Wing Project, the News & Gift.pre-screening location will not be available after February 29, 2020. The attached Exhibit "A" identifies the temporary location that will be available for a gift kiosk on a month to month basis. The current land-side office space will also be impacted with the terminal project, the airport will provide comparable office space for the Paradies Manager and facilitate the relocation. The City Manager may continue the lease term based upon a month-to-month tenancy. The Lease is subject to termination by the City with a thirty (30) day advance written notice to terminate. 2. Section 31.3 Nondiscrimination and FAA Required Clauses Section 31.3 of the Agreement is hereby deleted in its entirety and replaced with the following: "Concessionaire, for itself, personal representatives, successors in interest, and assigns, as part of the consideration hereof, does hereby covenant and agree as a covenant running with the Premises that: (1) no person, because of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin (i.e., place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition (each a "prohibited basis") shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities; (2) Concessionaire shall ensure that applicants are employed, and that employees are treated during their employment,without regard to any prohibited basis; (3) as a condition precedent to City's lawful capacity to enter this Agreement, and in executing this Agreement, Concessionaire certifies that its actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any Concessionaire activity, including but not limited to the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for.training, including apprenticeship; and further, that.Concessionaire is in full compliance with the provisions of. Palm Springs Municipal Code Section 7.09.040, including without limitation the provision of benefits, relating to non- discrimination in city contracting; (4) in the construction of any improvements on, over, or under such Premises and the furnishing of services thereon, no person on the grounds.of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination; and (5) Concessionaire shall use the Premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-Assisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, as said Regulations may be amended." 3. Percentage Rent. Percentage Rent for the Lease Area shall be calculated using twelve (12) percent of all gross receipts from business operations conducted from the Lease Area. 4. Applicability. This Amendment is attached to and made a part of the Agreement. In the event of any contradiction or inconsistency between the terms and provisions of this Amendment and the terms and provisions of the Agreement to which it is attached, the terms and provisions of this Amendment shall control and be interpreted in such a manner as to override any provision of the Agreement which would prevent the spirit and letter of the terms and provisions of this Amendment from being given full force and effect. All defined terms not specifically defined in this Amendment shall be given the same meaning as the defined terms in the Agreement. All other terms and conditions contained in the Agreement shall remain unchanged. 5. Joint Authorship. This Amendment has been entered into as an act of free will,without duress, and no presumption of authorship shall attach to same, and any ambiguity in the 2 terms and conditions of this Amendment shall not be attributed to one party over the other. IN WITNESS WHEREOF,the Parties have executed this Amendment as of the date first written above. "CITY" City of Palm Springs B David H. Ready,Ph. City Manager APPROVED AS TO FORM: ATTEST By. 2By: J ey aping nthony is City Attorney City Clerk Concessionaire: Check one: Individual_ Corporation Partnership_ Corporations require two notarized signatures One from each of the following: A. Chairman of Board, President, or any Vice President:AND B. Secretary,Assistant Secretary, Treasurer,Assistant Treasurer, or Chief Financial Officer. Signature (notarized) Signature (notarized) Name: [-� S. a��, Name: V—C" . 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Pre-Screeningj %` 1 {`•'�„ / - Month to-month effettive March 1,2020 j iempntaryJocaUon_ chesibVOR Inches % / o Cf 5 FIRST AMENDMENT TO SUPPLEMENTAL FACILITIES USE AGREEMENT For The PARADIES SHOPS, LLC THIS FIRST AMENDMENT TO SUPPLEMENTAL FACILITIES SPACE USE AGREEMENT ("First Amendment') is made by and between Paradies Shops, L.L.C., an Arizona limited liability company and affiliate of The Paradies Shops, LLC, a Georgia limited liability company ("Tenant'), and City of Palm Springs, a California charter city and municipal corporation ("City" or "Landlord"), as of May 1, 2015 ("Effective Date of the First Amendment'), and it amends that certain Supplemental Facilities Space use Agreement dated as of November 1, 2012, by and between Tenant and Landlord ("Use Agreement'). RECITALS A. City is the owner of the Palm Springs International Airport, ("Airport"), and operates thereon the Palm Springs Airport Terminal building ("Terminal'). B. Tenant currently is party to Lease Agreement No. 4159 for Concessions at the Palm Springs International Airport and the Use Agreement. The Use Agreement expires on October 31, 2019. C. Pursuant to the Use Agreement, Tenant is provided office and storage space. D. Tenant desires to modify the terms of its Use Agreement by ratifying the terms of the current arrangement and modify the location and area of the storage space it currently uses. NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant mutually agree to amend the Use agreement as follows: AGREEMENT 1. Article I of the Use Agreement shall be replaced in its entirety and amended to read as follows: City hereby offers to Tenant and Tenant takes from City, for its exclusive use except as otherwise noted, certain demised premises located in the terminal building, consisting of: Landside Facility Space containing 574 square feet as designated on Exhibit "A", attached hereto and made a part of this Agreement. The demised premises may be used by Tenant as an office and supply storage that is not open to the public. p ASIREMEW �N 1 2. Article II of the Use Agreement shall be replaced in its entirety and amended to read as follows: The term of this Agreement shall be for a period commencing on November 1, 2012 and terminating on April 30, 2016. This agreement shall provide for three (1) year options available with the consent of both the Landlord and Tenant. 3. Article III of the Use Agreement shall be replaced in its entirety and amended to read as follows: Rent as of March 1. 2015: Office Space 140 sf $26.29 sf/y $306.72 month Storage No 4 304 sf $20.46 sf/y $518.32 month Storage No 5 93 sf $20.46 sf/y $158.57 month Rent as of May 1. 2015 Office Space 140 sf $27.07 sf/y $315.92 month Storage No 4 304 sf $21.07 sf/y $533.87 month Storage No 6 130 sf $15.00 sf/y $163.32 month Rent as of May 1, 2016 Office Space 140 sf $27.70 sf/y $325.27 month Storage No 4 304 sf $21.70 sf/y $549.74 month Storage No 6 130 sf $15.45 sf/y $168.22 month On May 1, 2017 and May 1, 2018, the monthly rent shall be automatically adjusted in an amount equal to the increase in the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics (1982-1984 = 100) [the "CPI'] for "All Items - All Urban Consumers", for the Los Angeles-Riverside-Orange County Metropolitan Statistical Area, during the preceding term. 4. Except as expressly amended herein, all terms and provisions of the Sublease and First Amendment shall remain in full force and effect as originally executed. In the event there is a conflict between the terms and provisions of this First Amendment and the terms and provisions of the Use Agreement, the terms and provisions of this First Amendment shall control. [SIGNATURE PAGE FOLLOWS] 2 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates stated below. "CITY" City of Palm Springs Date: n B '_ David H. Ready City Manager APPROVED BY CITY MANAGER t2 th132 I(Xvm\ wwv APPROVED AS O FORM: ATTEST kt115f. By: "" ""^ By: Dougl s . Holland, mes Thompson, City ttorney City Clerk APPROVED BY CITY COUNCIL: Date: Agreement No. Corporations require two notarized signatures. One signature must be from Chairman of Board,President,or any Vice President. The second signature must be from the Secretary,Assistant Secretary,Treasurer,Assistant Treasurer,or Chief Financiat Officer. COMPANY NAME:C//� Ike Y "AIOT 54&&e U G Check one_Individual_Partnership XCorporation (U t) ,gg4S Address W By (Notarized) p Sign tune(Notarized) we .Fc 3 CALIFOpNIf•ALL-111CIRPOSE ACKNOTAEDGIWRT CIVIL CODES 1189 A notary pubic ar odw allca m.owq 9ia artRrme vwFm any w idw"of w vKW dnel wtm dpmd w (Incunrsbwlid,M a ceaicama b amclmd ed rmlw Ntldulmm scuray'avaf6ty of widonenwnt- state of Owitsm 4ear5t s. ) County of b ) On -/3e12-OIS before M. Date Bero Immf Name and TWO of the Oaf" permrmily appeared Err i�l[-S Aryl -:rk-k� Nanm(s)of fat who proved to me on the h®im of satisfactory widame to be the pa mx*[ whose rmrm(s) sfare whscribed to the within im6tm"awl acknowledged to me that hanatalthey emPM&W the sane in halwA miwhariadoepsaly(W and thud byhielhanemisignmsa(s)on the roburnent the pmeacge), or the entity upon batm9 of which the person(s)acted axecutad to irstrnrrerrL I aafify under PENALTY OF PERJURY under the haws of the Stars of Ceifamia that the foregemg psmgaph is tore and correct- WITNESS MY hand and official as . 4p.hss ��g�y��o�t, DM nag Mur% Notary PublO Paulding County,Georgia My Commia9lon E1q)m 1/27119 Phece Motary SW Above mrfaNnc Though I m,section is cpSormat ocmpfetip ffm i-AxMahm non dater a4mabon oath the docurnad or frauddard rwMmm nowt of dw fern to m untelwmw document. Description of Attsded Downed We or Type of Doaemrt Documerd Date: Nunber of Pagm 9igna(s)Other Than Named Above: Cepmdy@*Cb&-d by Sgner(s) ftnefa Nana: Signer's Name-. ❑Corporate Officer—Tilkl*: ❑Capan ds officer—TD*Y ❑Partner— O tinidad ❑Owmrd ❑Partner— O Linitad ❑Oamral ❑IrxkwdLwl ❑Attorney in fad ❑Indvfd ai ❑Attorney in Fact ❑Tnates ❑Guardian or Oamawalor ❑Testes ❑Ouardlan or Camavator ❑O9w.. ❑Olhr. Signer is Representing Signer Is Rap—nb ng WD14 Named Nlbq As Item•wwwlidmeftbry-ag-l-Go-W NOTARY(1-899.8768827) IYm OMW 41Pagc i i Exhibit A - Patin Spy k*ma bord AtiW . Parades Storage Spwe No.4. Lower Bono Lower i � L I I 1 t - i I i TE Storage space f 10 x 13 = 130 S.f.�s . I Main Terminal ----._.._. _ ?_ . . i 'r nL�e`�e�`n '` I I SUPPLEMENTAL FACILITIES SPACE USE AGREEMENT THE PARADIES SHOPS, LLC THIS SUPPLEMENT FACILITIES SPACE USE AGREEMENT, made and entered into as of this I"day of November 2012,by and between the CITY OF PALM SPRINGS, a municipal corporation ("City") and PARADIES SHOPS, LLC, a Georgia limited liability company a subsidiary of the THE PARADIES SHOPS, a Georgia Corporation ("TENANT"). RECITALS A. City is the owner of the Palm Springs International Airport, ("Airport"), and operates thereon the Palm Springs Airport Terminal building ("Terminal"). B. Tenant currently is party to Lease Agreement No. 4159 for Concessions at the Palm Springs International Airport. C. Tenant requires facility support space landside in the Terminal during the next year of Agreement No. 4159. AGREEMENT NOW, THEREFORE, in consideration of the promises of the parties hereto and for good and valuable considerations, the receipt and sufficiency of which is hereby acknowledged, City and Tenant agree as follows: ARTICLE 1 PREMISES, RIGHTS AND PRIVILEGES City hereby offers to Tenant and Tenant takes from City, for its exclusive use except as otherwise noted, certain demised premises located in the terminal building, consisting of: Landside Facility Space containing 537 square feet as designated on Exhibit "A", attached hereto and made a part of this Agreement. The demised premises may be used by Tenant as an office and supply storage that is not open to the public. ARTICLE 11 TERM OF AGREEMENT The term of this Agreement shall be for a period commencing on November 1, 2012 rand terminating on October 31, 2013. ARTICLE 111 RENTALS, FEES AND OTHER CHARGES The rental rate for the Landside Facility Space shall be as follows: Paradies Facility Space Agreement ORtGiNP L 61D Palm Springs International Airport Current Effective November 1,2012 Office Space 140 s.f at$25.79 Office 140 s.f at$26.29=$306.72 monthly Storage No.4 304 s.f. at$20.06 Storage No. 4 at$20.46=$518.32 monthly Storage No. 5 93 s.f at$20.06 (seasonal space)Nov.1 through April 30,2013 $158.57 monthly ARTICLE 1V IMPROVEMENTS AND ALTERATIONS No improvements, alterations or additions; other than those heretofore installed or approved by City, shall be made upon the demised premises by Tenant with the written consent of City being first obtained. City will move the phone/data lines from the current Paradies Office site to the new Landside Office at no cost to the Tenant at the beginning of the term. ARTICLE V MAINTENANCE AND OPERATION Section 1.Utilities. City shall provide electricity to the storage space. Section 2. Repair and Maintenance. Tenant shall, at its sole cost and expense, maintain the demised premises, including all interior improvements, constructed or installed by City or Tenant therein and shall keep said premises in good condition and repair in a neat, clean and sanitary condition,and shall furnish janitorial service. Section 3. Trash. Garbage and Other Refuse. Tenant shall provide a complete and proper arrangement for the adequate, sanitary handling and disposal of all trash, garbage and other refuse caused as a result of the operation of its business. Tenant shall provide and use suitable, covered metal receptacles for all garbage, trash and other refuse on or in connection with the demised premises. Piling of boxes, cartons, barrels or other similar items in an unsightly or unsafe manner, on or about the demised premises,is forbidden. ARTICLE VI INSURANCE It is agreed by the parties that the broad insurance provisions provided under the Tenant's Lease agreement for Concessions No. 4159; a separate agreement, would also apply to the additional space provided for herein. ARTICLE Vll TERMINATION Termination for Convenience. City may terminate this Agreement for its convenience at any time, in whole or in part, by giving Tenant thirty (30) days written notice thereof City shall not be liable to Tenant for any costs or expenses Tenant may incur as a result of such termination. Tenant may terminate this Agreement at any time by giving City thirty(30)days written notice thereof. Paradies Facility Space Agreement 2 Palm Springs International Airport In the event Tenant fails to vacate the demised premises within thirty(30) days of written notice of termination of this Agreement given by either Tenant or City, Tenant agrees the City may remove and dispose of any property belonging to Tenant within the demised premises and shall reimburse City for the costs associated with said removal and disposal. Upon termination under the provisions of this Article, Tenant waives all claims it may have against City under this Agreement. ARTICLE Vill MISCELLANEOUS Section 1. This Agreement shall be construed and enforced in accordance with the laws of the State of California. Section 2. The mailing address of City shall be: Palm Springs International Airport Executive Director of Aviation 3400 E. Tahquitz Canyon Way, Suite OFC Palm Springs, CA 92262 Until written notice of change thereof has been given to Tenant. Section 3. The mailing address of Tenant shall be: The Paradies Shops, Inc 5950 Fulton Industrial Blvd. S.W. Atlanta, Georgia 30336 (Signature Page Follows) Paradies Facility Space Agreement 3 Palm Springs International Airport IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the date first written above. ATTEST: CITY OF PALM SPRINGS a municipal corpor B . ��Y7gi- City Clerkoi 5/ZD43 City Man APPROVED A TO F P0 ED ej''�aBY ���• AP CITY MANAGER APPROVED BY CITY COUNCIL By 5t)vn\Qm1 1 ho6�u. City Attorney tY10b�\l7 10•a0•�1�t (�1111�G�j T �j O(, ONTRACTOR: Check one: _ Individual _Partnership_Corporation Corporations require two notarized signatures: One from each of the following: A. Chairman of Board, President, or any Vice President: AND B. Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, or Chief Financial Officer. By: By: Signature(notarized) \r, Signature(notarized) Name: \ r�Q�\ Name: Title: w \ Title: State of State of County of County of On before me, On before me, personally appeared personally appeared who proved to me on the basis of satisfactory who proved to me on basis of satisfactory evidence to be the person(s)whose name(s) evidence to be the person(s)whose name(s) is/are subscribed to the within instrument is/are subscribed to the within instrument and acknowledged to me that he/she/they and acknowledged to me that he/she/they executed the same in his/her/their authorized executed the same in his/her/their authorized capacity(ies), and that by his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), signatures(s) on the instrument the person(s) or the entity upon behalf of which the or the entity upon behalf of which the person(s) acted, executed the instrument. person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY I certify under PENALTY OF PERJURY under the laws of the State of California that under the laws of the State of California that the foregoing paragraph is true and correct. the foregoing paragraph is true and correct. WITNESS my hand and official seal. WITNESS my hand and official seal. Notary Signature: Notary Signature: Notary Seal: Notary Seal: Paradies Facility Space Agreement 4 Palm Springs International Airport IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the date first written above. ATTEST: �� 1 � CITY OF PALM SPRINGS a municipal corporation By: By: City Clerk City Manager APPROVED AS TO FORM: APPROVED BY CITY COUNCIL APPROVED BY CITY MANAGER By: City Attorney CONTRACTOR: Check one: _Individual _Partnership X Corporation (Limited Liability Company) Corporations require two notarized signatures: One from each of the following: A. Chairman of Board, President, or any Vice President: AND B. Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, or Chief Financial Officer. By: By: Xea'�. i otarized) Signature(notarized) Name: Patrick Wallace Name: Karen Leach Title: Regional Vice President Title: Vice President&General Counsel State of Georgia State of Georgia County of Fulton County of Fulton On November 15, 2012 before me, Deborah Croker On November 15, 2012 before me, Deborah Croker personally appeared Patrick Wallace personally appeared Karen Leach who proved to me on the basis of satisfactory who proved to me on basis of satisfactory evidence to be the person(s)whose name(s) evidence to be the person(s)whose name(s) is/are subscribed to the within instrument is/are subscribed to the within instrument and acknowledged to me that he/she/they and acknowledged to me that he/she/they executed the same in his/her/their authorized executed the same in his/her/their authorized capacity(ies), and that by his/her/their capacity(ies), and that by his/her/their signature(s)on the instrument the person(s), signatures(s)on the instrument the person(s) or the entity upon behalf of which the or the entity upon behalf of which the person(s) acted, executed the instrument. person(s)acted, executed the instrument. I certify under PENALTY OF PERJURY I certify under PENALTY OF PERJURY under the laws of the State of California that under the laws of the State of California that the foregoing paragraph is true and correct. the foregoing paragraph is true and correct. WITNESS my hand official ial. 7 WITNESS my hand 774;i� j'12 ffi ial seal Notary Signature: V`P� Notary Signature: Notary Seal: Deborah w.Croker Notary Seal: Deborah W.Croker Notary Public Notary Public Coweta County,GA Coweta County GA My Commission Expires 8/8/2014 Y Commission Expires 8/8/2014 Paradies Facility Space Agreement 4 Palm Springs International Airport C � i r Z w •ti` N 'i �A G • Ar SUPPLEMENTAL STORAGE SPACE USE AGREEMENT THE PARADIES SHOPS, LLC THIS SUPPLEMENTAL SPACE USE AGREEMENT, made and entered into as of this First day of December 2010, by and between the CITY OF PALM SPRINGS, a municipal corporation ("City") and PARADIES SHOPS, LLC, a Georgia limited liability company and subsidiary of the THE PARADIES SHOPS, a Georgia Corporation ("TENANT"). RECITALS A. City is the owner of the Palm Springs International Airport, ("Airport"), and operates thereon the Palm Springs Airport Terminal building ("Terminal"). B. Tenant currently is party to Lease Agreement No. 4159 for Concessions at the Palm Springs International Airport. C. Tenant requires additional storage space on the lower level of the Terminal for the next seven months. AGREEMENT NOW, THEREFORE, in consideration of the promises of the parties hereto and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Tenant agree as follows: ARTICLE I PREMISES, RIGHTS AND PRIVILEGES City hereby offers to Tenant and Tenant accepts from City, for its exclusive use, except as otherwise noted, certain demised premises located in the terminal building, consisting of: Lower Level Storage Space (No. 5) containing 93 square feet as designated on Exhibit "A", attached hereto and made a part of this Agreement. Demised premises may be used by Tenant as a storage area for the storage of non-perishable supplies, fixtures and equipment required for the sale of merchandise. ARTICLE II TERM OF AGREEMENT The term of this Agreement shall be for a period commencing on December 1, 2010 and terminating on June 30, 2011. Paradies Storage Space No. 5 Agreement 1 Palm Springs International Airport ARTICLE III RENTALS, FEES AND OTHER CHARGES The rental rate for Storage Space No. 5 shall be computed at the rate of $20.06 per square foot per annum and shall be $155.47 per month, payable by Tenant to City, beginning on December 1, 2010 and the first day of each month thereafter. Rental Adjustments shall be based on current City of Palm Springs Comprehensive Fee Schedule for Lower Level Storage Space / Non Signatory. ARTICLE IV IMPROVEMENTS AND ALTERATIONS No improvements, alterations or additions; other than those heretofore installed or approved by City, shall be made upon the demised premises by Tenant without the written consent of City first being obtained. ARTICLE V MAINTENANCE AND OPERATION Section 1. Utilities. City shall provide electricity to the storage space. Section 2. Repair and Maintenance. Tenant shall, at its sole cost and expense, maintain the demised premises, including all interior improvements, constructed or installed by City or Tenant therein and shall keep said premises in good condition and repair in a neat, clean and sanitary condition, and shall furnish janitorial service. Section 3. Trash Garbage and Other Refuse. Tenant shall provide a complete and proper arrangement for the adequate, sanitary handling and disposal of all trash, garbage and other refuse caused as a result of the operation of its business. Tenant shall provide and use suitable, covered metal receptacles for all garbage, trash and other refuse on or in connection with the demised premises. Piling of boxes, cartons, barrels or other similar items in an unsightly or unsafe manner, on or about the demised premises, is forbidden. ARTICLE VI INSURANCE It is agreed by the parties that the broad insurance provisions provided under the Tenant's Lease agreement for Concessions No. 4159; a separate agreement, would also apply to the additional space provided for herein and Tenant agrees to comply fully with those provisions. Paradies Storage Space No. 5 Agreement 2 Palm Springs International Airport ARTICLE VII TERMINATION Termination for Convenience. City may terminate this Agreement for its convenience at any time, in whole or in part, by giving Tenant thirty (30) days written notice thereof. Upon said notice, City shall pay Tenant those allowable costs determined by the City, in its sole discretion, to be reasonably necessary to effect such termination. Thereafter, Tenant shall have no further claims against City under this Agreement. Tenant may terminate this Agreement at any time by giving City thirty (30) days written notice thereof. In the event Tenant fails to vacate the demised premises within thirty (30) days of written notice of termination of this Agreement given by either Tenant or City, Tenant agrees to allow City to remove and dispose of any property belonging to Tenant and shall reimburse City for the costs associated with said removal and disposal. Thereafter, Tenant shall have no further claims against City under this Agreement. ARTICLE VIII MISCELLANEOUS Section 1. This Agreement shall be construed and enforced in accordance with the laws of the State of California. Section 2. The mailing address of City shall be: Palm Springs International Airport Executive Director of Aviation 3400 E. Tahquitz Canyon Way, Suite OFC Palm Springs, CA 92262 Until written notice of change thereof has been given to Tenant. Section 3. The mailing address of Tenant shall be: The Paradies Shops, Inc. 5950 Fulton Industrial Blvd. S.W. Atlanta, Georgia 30336 Until written notice of change thereof has been given to City. Section 4. Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on Paradies Storage Space No. 5 Agreement 3 Palm Springs International Airport behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which this party is bound. (Signatures on next page) Paradies Storage Space No. 5 Agreement 4 Palm Springs International Airport IN WITNESS WHEREOF,the parties have executed and entered into this Agreement as of the date first written above. ATTEST: CITY OF PALM SPRING a municipal corporati City Clerk 2 �240> 7 ( City Manager APPROVED AS TO FORM: APPROVED BY CITY COUNCIL By: -+City Attorney CONTRACTOR: Check one: Individual Partnership Corporation Corporations require two notarized signatures: One from each of the following: A. Chairman of Board, President, or any Vice President:AND B. Secretary,Assistant Secretary,Treasurer,Assistant Treasurer,or Chief Financial Offic By: � By: G✓ ✓w � Signature no arized) / Signature(notarized) Name: I Name: Title: 12q 10 at Ct, C Ir.���l Title: QlAco A r State of Cioo State of County of l�IfAA County of On 1 I,D before me, (J1I A1ll 1Nuw' On 1� 6� before me, 1/r � �- personally appeared -� - personally appeared personally known to me(or proved to me on personally known to me (or proved to me on the basis of satisfactory evidence)to be the the basis of satisfactory evidence)to be the person(s)whose name(s) is/are subscribed person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to the within instrument and acknowledged to me that he/she/they executed the same to me that he/she/they executed the same in his/her/their authorized capacity(ies), and in his/her/their authorized capacity(ies), and that by his/her/their signatures(s)on the that by his/her/their signatures(s)on the instrument the person(s), or entity upon instrument the person(s), or entity upon behalf of which the person(s) acted, behalf of which the person(s) acted, executed the instrument. executed the instrument. WITNESS my hand and official seal- _ WITNESS my hand and official seal. Notary Signature: v "'� Notary Signature: h` vk Notary Seal: Notary Seal: Deborah w.Croker Deborah w.Croker Notary Public Y Notary Public Coweta County,GA Coweta County,GA My Commission Expires 8/8/2014 My Commission Explres 8/8/201,1 Paradies Storage Space No. 5 Agreement S Palm Springs International Airport Exhibit "A" (see attached) Paradies Storage Space No. 5 Agreement 6 Palm Springs International Airport rc iuuiu5 cx H Bono Lower Level - r.a ` '' Storage Space # FD cl- storage Space #5 MILO Tx13.3' = 93SF 7 r .0 13. C„ r: it i x riSl, M q W L. I�� THE PARADIES SHOPS LOU BOTTINO Smwr Vice Presodenr/ Chwf Operamtq Officer February 4,2010 Tom Nolan Executive Director City of Palm Springs Palm Springs Regional Airport 3400 E. Tahquitz Canyon, Suite OFC Palm Springs,CA 92262 Re: Lease Agreement for Concessions at the Palm Springs International Airport dated November 1, 1999 between the City of Palm Springs and Paradies Shops, L L.0 , an affiliate of The Paradies Shops, Inc., as amended (the "Agreement") Dear Mr.Nolan: I am excited to inform you that The Paradies Shops, Inc. and its affiliated companies will be teaming with a new Financial partner in the near future. On January 27,2010, each of the shareholders of The Paradies Shops, Inc. agreed to sell,effectively, a 70% interest in the Paradics companies to a private equity fund managed by Freeman Spogli&Co. Freeman Spogli is a well-established company,having over 26 years of experience in investing in retail,distribution and direct marketing companies. They have invested approximately$2.5 billion in 42 companies, including such companies as Advance AutoParts and ldtgregg. We believe that having a strong financial backer with a proven track record for success will benefit our company as we continue to grow our business. The transaction with Freeman Spogli involves two components. First,the Paradies shareholders have agreed to effectuate a restructuring so that all of their equity interests currently held directly in the various Paradies companies (including, without limitation,The Paradies Shops,hie.,Paradies Shops,L.L.C.,and others)will be contributed to, and held by, a newly formed holding company which will be a Delaware limited liability company. We refer to this transaction as the 'Restructuring". Second,the Paradies shareholders will sell a 70%interest in the newly formed holding company to an affiliate of Freeman Spogli(with certain Paradics shareholders retaining the remaining 30% interest). We refer to this transaction as the "Change of Control Transaction." The Change of Control Transaction will be financed through a combination of equity and debt financing. We expect our transaction with Freeman Spogli to proceed seamlessly and without interruption to our business relationship with you. Gregg Paradies will continue to head up our business as Chief Executive Officer and President, Lou Bottino will continue as Senior Vice President and Chief Operating Officer and Don Marek will continue as Senior Vice President and Chief Financial Officer. All of our other officers and management will continue in their current positions as well. We hope to complete our transaction no later than May 31,2010 Please consider this our request for consent to the Change of Control Transaction required by Section 10,1 (attached)of the Agreement noted above and any other provisions of the Agreement that may require your consent in connection therewith(and,to the extent required,for our Restructuring as well), as well as your waiver of any minimum advance notice periods required by the Agreement. The lenders of the debt portion of the financing for the Change of Control Transaction require that we provide security for the contemplated debt financing, and we therefore request your consent in advance to a guaranty by The Paradies Shops,Inc. and Paradies Shops, L.L.C. with respect to the debt financing, a pledge of,and a security interest in,the assets of The Paradies Shops,Inc. and 5950 FULTON INDUSTRIAL BOULEVARD,S.W./ATLANTA,GEORGIA 30336/(404)344,7905/PAX:(404)349.3226 February 4,2010 Tom Nolan Page 2 Paradies Shops,L.L.C., and a pledge of, and security interest in,the new holding company's equity interests ht The Paradies Shops,Inc. and Paradies Shops,L.L.C. We further request that you agree to allow Freeman Spogli and the lenders of the debt portion of the financing for the Change of Control Transaction to rely upon and be third party beneficiaries of your consents granted pursuant to this letter,and that you acknowledge rho rights of such lenders to exercise their applicable creditors' rights(including with respect to foreclosure)with respect to such debt financing. We are happy to provide you with any additional information regarding Freeman Spogli and our transaction that you believe is necessary to evaluate this request. Please feel free to contact me at(404)344-7905 if you would like to discuss,or countersign below and fax your countersigned copy of this letter to us at(404)439-3226 at your earliest convenience. We have also provided a return Federal Express envelope for your convenience in retuming the original. Sincerely, The Paaradiiccs Shops, Inc.In /io 1 'tom/ Lou Bottino Chief Operating Officer The foregoing requests are acknowledged, agreed and granted,effective as of this ��day of M ra-rz e Ff 2010 by City of Palm Springs ATTEST: Name: David H. Re r sq. , Ph.D. a�A es Thompson Title: City Manager GiL-y Clerk - APROVED BY Cry COUNCIL PP'I1 I ,a57zl) FO X RGVEBBYCIiYCOUNCIL C�- da.ob-opt a 1. .P,L�. �l ��'tataay APPROVED BY CrY MANAGER Lautc C\iG L 01l ktul Vuahhatkiow P���fe ihItob, � Nk ul AMENDMENT NO. 3 TO LEASE AGREEMENT NO. 4159 FOR CONCESSIONS AT PALM SPRINGS INTERNATIONAL AIRPORT THIS THIRD AMENDMENT, made and entered into as of the First day of January, 2010, by and between the CITY OF PALM SPRINGS, a municipal corporation ("City'), and PARADIES SHOPS, LLC, a Georgia limited liability company a subsidiary of THE PARADIES SHOPS, a Georgia Corporation ("Tenant"). RECITALS WHEREAS, City is the owner of the Palm Springs International Airport, ("Airport"), and operates thereon the Palm Springs Airport Terminal building ("Terminal"). WHEREAS, City and Tenant entered into a Lease Agreement for Concessions at the Airport, Agreement No. 4159, dated November 1, 1999 ("Lease") for concessions at Palm Springs International Airport WHEREAS, City and Tenant entered into a First Amendment to the Lease dated October 22, 2007 to modify the concession space; WHEREAS, City and Tenant entered into a Second Amendment dated August 21, 2008 to extend the Lease term through October 31, 2019; modify the Percentage Rent; and modify the concession space; to delete Store No. 19 (400 square feet) and replace it with Store No. 23 — CNBC concept (1,214 square feet). Design and construction of Store No. 23 CNBC concept required Tenant to invest or cause to be invested not less than $420,000 and Tenant agreed to commit to such investment; WHEREAS, City and Tenant desire to enter in this Third Amendment to exchange the included Storage Space No. 1 location and offset the difference in storage space square footage by increasing the CNBC Store No. 23 Space by 66 square feet. AGREEMENT NOW, THEREFORE., in consideration of the mutual promises of the parties hereto and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Tenant agree as follows: Paradies Amendment No. 3 to Agreement 4159 1 Palm Springs International Airport 1. Subsection 1.1.2 in the Lease Exhibit "A-V will be replaced with the attached Exhibit "A-1 Revised" that adds an additional 66 square feet to offset the decrease in storage space due to the storage space location exchange in Subsection 1.1.3 below. The additional 66 square feet will be occupied by moveable displays that will be removed whenever the store is closed. 2. Subsection 1.1.3 in the Lease shall be amended in its entirety to read as follows: 1.1.3 The area designated as Storage No. 1 in the attached Exhibit "A-2" may be used by Tenant as a storage area for the storage of supplies, fixtures and equipment required for the sale of merchandise. 3. Full Force and Effect. Except as expressly modified herein all other provisions of the Concession Lease Agreement shall remain unmodified and in full force and effect. 4. Corporate Authority. The persons executing this Amendment on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment on behalf of said part, (III) by so executing this Amendment, such party is formally bound to the provisions of this Amendment, and (iv) the entering into this Amendment does not violate any provision of any other agreement to which said party is bound. (EXECUTION PAGE FOLLOWS) Paradies Amendment No. 3 to Agreement 4159 2 Palm Springs International Airport IN WITNESS WHEREOF,the parties have executed and entered into this Agreement as of the date first written above. ATTEST: CITY OF PALM SPRING a municipal corporation City Clerk pp p-�L Z609 City Manager` APPROVED AS TO FORM: APPROVED BY CITY COUNCIL City AttoFney .' cl_' CONTRACTOR: Check one: Individual Partnership_Corporation Corporations require two notarized signatures: One from each of the following: A. Chairman of Board, President,or any Vice President:AND B. Secretary,Assistant Secretary,Treasurer,Assistant Treasurer, or Chief Financial fficer. gnatur ( otarized) Signature (notarized) Name: �^`I°�` Name- /'ar/ Title: Title: �f4 State of * 04 7"Y�,77 1 OL_WWyW W W *w *~ State of County of l in u P_�I—�— County of ae On �/ 09 before me, �/ 1�d7 � On!/ c[before me, r + personally oppeare f 6122 'eS personally appeared��Pn e&jrnZL who proved to me on the asis of satisfactory who proved to me on basis of satisfactory evidence to be the person(s)whose name(s) evidence to be the person(s)whose name(s) is/are subscribed to the within instrument is/are subscribed to the within instrument and acknowledged to me that he/she/they and acknowledged to me that he/shelthey executed the same in his/her/their authorized executed the same in his/her/their authorized capacity(ieS),and that by his/her/their capacity(ies),and that by his/her/their signature(s)on the instrument the person(s), signatures(s) on the instrument the person(s) or the entity upon behalf of which the or the entity upon behalf of which the person(s) acted, executed the instrument. person(s)acted, executed the instrument. I certify under PENALTY OF PERJURY I certify under PENALTY OF PERJURY under the laws of the State of California that under the laws of the State of California that the foregoing paragraph is true and correct. the foregoing paragraph is true and correct. WITNESS my hand d official seal. WITNESS my hand a d official seal Notary Signature Notary Signature ' . �. —b6 , Notary Seal: �ptZ' :� Notary Seal: q z� I �l -u 71F G 1, Paradies Amend o. 3 to Agreement 4159 ���• ��1` 3 Palm Springs International Airport EXHIBIT "A-1 Revised (see attached) Paradies Amendment No. 3 to Agreement 4159 4 Palm Springs International Airport f I - � I I Vrl) f ' fri f B A-6 -------- , i B A-6 s, .zz I OI EA L - EQ '• FA'` f — — — — — — — --j- -- ----- --- -- — — — — — 2 f � � ADD WSF Fok moVERBLE Dt! ,ft. S m j [7 1 EX6151 ' Reif) ski w -J-- C NEW CONCCxw Exhibit A-2 (see attached) Paradies Amendment No. 3 to Agreement 4159 5 Palm Springs International Airport W T 1.JIti i�4SC bPACE �+'4.iv1lA lox 1 > I1 , �O9�f SF � C ------------------- i � YY i AMENDMENT NO, 2 TO LEASE AGREEMENT NO. 4159 FOR CONCESSIONS AT PALM SPRINGS INTERNATIONAL AIRPORT THIS SECOND AMENDMENT, made and entered into as of the Zd.5,r day of AuGy-5 T , 2008, by and between the CITY OF PALM SPRINGS, a municipal corporation ("City"), and PARADIES SHOPS, LLC, a Georgia limited liability company a subsidiary of THE PARADIES SHOPS, a Georgia Corporation ("Tenant'). RECITALS WHEREAS, City is the owner of the Palm Springs International Airport, ("Airport'), and operates thereon the Palm Springs Airport Terminal building ("Terminal'). WHEREAS, City and Tenant entered into a Lease Agreement for Concessions at the Airport, Agreement No. 4159, dated November 1, 1999 ("Lease") for concessions at Palm Springs International Airport WHEREAS, City and Tenant entered into a First Amendment to the Lease dated October 22, 2007 to modify the concession space, WHEREAS, City and Tenant wish to enter into this Second Amendment to extend the Lease term through October 31, 2019, modify the Percentage Rent, and modify the concession space; WHEREAS, City and Tenant desire to delete Store No_ 19 (400 square feet) and replace it with Store No. 23 — CNBC concept (1,214 square feet). Design and construction of Store No. 23 CNBC concept will require Tenant to invest or cause to be invested not less than $420,000 and Tenant has agreed to commit to such investment; AGREEMENT NOW, THEREFORE, in consideration of the mutual promises of the parties hereto and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Tenant agree as follows: 1. Subsection 1.1.1 in the Lease shall be amended in its entirety to read as follows: °1.11 The areas designated as Stare Nos, 9, 14 and 23 shown on Exhibit A and Exhibit A-1 shall be utilized for the operation of News/Books Shops. Paradies Amendment No. 2 to Agreement 4159 1 Palm Springs International Airport 'fbA� �� nrN? Exhibit "A-1" and Exhibit "B, Page 1-13", Store No. 19, which are attached to Amendment No. 1 of this Lease, are hereby replaced with Exhibit "A-1" Store No. 23" which is attached hereto. 2. Subsection 1.1.2 in the Lease shall be amended in its entirety to read as follows: 1.1.2 The areas designated at Store Nos. 7, 8, 9, 14, and 23 shown on Exhibit A and Exhibit A-1 shall be utilized for the operation of Gift Shops. Exhibit "A-1" and Exhibit "S, Page 1-B°, Store No. 19, which is attached to Amendment No. 1 of this Lease, are hereby replaced with Exhibit "A-1" Store No. 23 which is attached hereto. 3. Subsection 2.2 Percentage Rent. in the Lease shall be amended as follows: "2.2 Percentage Rent. Upon the opening of Store No. 23 Percentage Rent for all the Leased Areas shall be calculated using the following percentages of gross receipts from business operations conducted on or from all the Leased Areas: News / Books/ Periodicals/ Convenience — 10.5% PGA— 10.5% Gifts — 12.5%" 4. Section 6 in the Lease shall be amended in its entirety to read as follows: "6. TERM. The term of this amended Lease shall commence upon execution of Amendment No. 2 by City. Unless earlier terminated in accordance with Section 7 below, the term of this amended Lease shall run through and until October 31, 2019, 5. Subsection 8.0.1 Expanded Facilities in the lease shall be amended in its entirety to read as follows: "8.0.1 Expanded Facilities. Tenant agrees to perform or have performed certain improvements or modifications to the Lease Area in accordance with all existing and applicable rules, ordinances, codes, and laws and further with the approval of the City in its sole discretion to construct and operate a CNBC concept in the New Concourse (Store No. 23. -1,214 square feet.) Tenant agrees to expend not less than the sum of$420,000 for the design and construction of the CNBC Store No. 23. Said design Paradies Amendment No. 2 to Agreement 4159 2 Palm Springs International Airport shall be submitted to the City for its approval which shall not be unreasonable withheld. Tenant further agrees that said improvements mentioned above shall be completed no later than 120 days from the turn over date of the concept shell space from City." 6. Subsection 8 5 Tenant's Assurance of Construction Completion in the Lease shall be amended in its entirety and replaced with the following: "8.5 Tenant's Failure to Timely Complete Construction. If Tenant fails to meet any or all of the commitments and/or requirements set forth in subsection 8.0.1 within the required time as provided therein, Tenant hereby acknowledges and agrees that it shall be deemed to be in default of this Lease pursuant to subsection 27.1.10 and that all rights and remedies of the City under this Lease and applicable law shall be available to City to address said default. 7. Full Force and Effect Except as expressly modified herein all other provisions of the Concession Lease Agreement shall remain unmodified and in full force and effect. S. Corporate Authority. The persons executing this Amendment on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment on behalf of said part, (iii) by so executing this Amendment, such party is formally bound to the provisions of this Amendment, and (iv) the entering into this Amendment does not violate any provision of any other agreement to which said party is bound. (EXECUTION PAGE FOLLOWS) Paradies Amendment No. 2 to Agreement 4159 3 Palm Springs International Airport IN WITNESS WHEREOF,the parties have executed and entered into this Agreement as of the date first written above. ATTEST. CITY OF PALM SPRING a municipal corporation City Clerk Og �Z�S Cry Manage APPROVED AS T rORM' APPROVED BY CITY COUNCIL ,/Cifv "ttom=v ` CONTRACTOR: Check one: `Individual Partnership�Gorporetion Corporations require two notarized signatures: One from each of the following: A. Chairman of Board, President,or any Vice President:AND B. Secretary,Assistant Secretary,Treasurer,Assistant Treasurer,or Chief Finan 'aI Officer. By: 6Y siignature(notarized) cognature(notarized) gn Name: Lon „�- Name Pw�� es True: JO Title, rn/�-S!CI State of StateT State of County of County of On tltapo before Me. �.,oL9 I .✓Liltin ,dc"VA✓"' On "L ba before m . pv� � e,� �L w L personally appeared �`-"L I � personally appeared L/-Y'egc) you—itc -6 who proved to me on the basis of satisfactory who proved to me on basis of satisfactory evidence to be the person(s)whose name(s) evidence to be the person(s)whose names) is/are subscribed to the within instrument islare subscribed to the within instrument and acknowledged to me that helshelthey and acknowledged to me that helshe/ihey executed the same In his/her/their authorized executed the same in his/her/their authorized capacrty(ies),and that by his/her/their capacity(es),and that by his/her/their signature(s)on the instrument the parson(s), signatures(s)on the instrument the person(s) or the entity upon behalf of which the or the entity upon behalf of which the peson(s) acted,executed the instrument. person(s)acted,executed the instrument I certify under PENALTY OF PERJURY I certify under PENALTY OF PERJURY under the laws of the State of California that under the laws of the State of California that the foregoing paragraph is true and correct. the foregoing paragraph is true and correct WITNESS my hand and Official seal, WITNESS my hand apq official seal. ! _ _- Notary Signature: Notary Signature: - -- Notary,Seal: Notary Seal — - - Ceborafj UV. Croker Ceb°rail pOV. NotaryCrone Public Notary Public Coweta County, GA C°wets C&iJniy, GA u14y COMMIssion ZP 8/6/2010 My'Com,ission �sus/2®1© Paradies Amendment No. 2 to Agreement 4159 4 Palm Springs International Airport T EXHIBIT "A and A-1" (See Attached) Paradies Amendment No. 2 to Agreement 4159 5 Palm Springs International Airport 'l ..1-u_.....�1.-•-•.n-m�.1. e NfRfdlliURll[�Fi950SFJ WOR OUR 909SO (lei ' ti 3 FII0.f#RVIEERES1d[RRdHfi3,191fF1 WF{EEfRRRR194SfJ ptEi rj;� •* '' .0 ENEi smut1Y[dRM SF} HE{fiilB901�ISVhSIR[Rf{1153SY y�q ! SPKIdiIYfdRiiGdff} RU�Ih`EfSL4I4f�R�4diSR1 (WIRD63E#"(Wf} I NRI FilaS900ff} ' iUS5 ! � — 04 ffSi:MiRYGfFl(830ff1 h'�11➢SE _ � .. . � ,� .. R�411[14EdR15GIFSf{app,65S1Sf} �7EZ�i►� 11ML 15119M WHO A�VII6R[5,90UfF1 id1EE2 ,.I wEEsrAaw ' s "� �, bSIF1A � SiiE1S4 I rt II 1 :. =C[�il�••::� __ __ ter:�'L. PAW 141 '! n" �•d� { ,All TG a' .�.e-r1%�•p�cr E'..-'\J..:�. .L��•� I�p•f ��. �t/ 'r "vtyC�r�F"•a:�J S:L�.,�ji$�V ice''. Ll �i:"`yr• ((��(`�? i I i AMENDMENT NO. 1 TO LEASE AGREEMENT NO. 4159 FOR CONCESSIONS AT PALM SPRINGS INTERNATIONAL AIRPORT . THIS FIRST AMENDMENT, made and entered into as of,the _day of cu\ftc.( _, 2007, by and between the CITY OF PALM SPRINGS, a municipal corporation ("City'), and PARADIES SHOPS, LLC, a Georgia limited liability company a subsidiary of THE PARADIES SHOPS, a Georgia Corporation ("Tenant"). RECITALS A. City is the owner of the Palm Springs International Airport, ("Airport"), and operates thereon the Palm Springs Airport Terminal building ("Terminal"), B. City is expanding the Terminal by adding a new concourse and demolishing the old Terminal Temporary Hold-rooms A & B. C. This modification to the Terminal will result in the loss of allocated but not utilized space to Tenant (Store No. 1 — 580 square feet and Store No. 18 — 400 square feet) and Tenant and the City are desirous of providing and utilizing replacement space (Store No. 19 — 420 square feet) be made available in the new concourse expected to open on or about September 3, 2007. II I AGREEMENT NOW, THEREFORE, in consideration of the promises of the parties hereto and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Tenant agree as follows: 1. Section 1.1.1 is hereby amended to read as follows: 1.1.1 The areas designated as Store Nos. 9, 14 and 19 shown on Exhibit A and Exhibit A-1 shall be utilized for the operation of News/Books Shops." Exhibit B, Page 1-B, Store No. 18 is hereby replaced with Exhibit B, Page 1-B, Store No. 19. 2. Section 1.1.2 is hereby amended to reads as follows: I "1,1.2 The areas designated as Store Nos. 7, 8, 9, 14, and 19 shown on Exhibit A and Exhibit A 1 shall be utilized for the operation of Gift Shops." Paradies Amendment No. 1 to Agreement 4159 1 Palm Springs International Airport Exhibit B, Page 1-13, Store No. 18 is hereby replaced with Exhibit B, Page 1-13, Store No. 19. 3. A new Section 8.0.1 is hereby added to read as follows: "8.0.1 Expanded Facilities. Tenant shall design and cause to be constructed a free standing kiosk (Store No. 19)to service the airline passengers in the new concourse. The design and casework shall be architecturally compatible with the new concourse and its casework as approved by the City. If the display cases face out Tenant must allow a three (3) foot buffer zone within allotted space along perimeter for customer traffic flow." Tenant agrees to provide a temporary kiosk (Store No. 19) at Tenant's sole cast and expense no later than September 1, 2007. Tenant agrees to provide a permanent kiosk (Store No. 19) at Tenant's sole cost and expense no later than August 1,, 2008. All improvements constructed by Tenant within the Lease Area shall be in strict compliance with detailed plans and specifications approved by the Contract Officer. 4. Full Force and Effect. Except as expressly modified herein all other provisions of the Concession Lease Agreement shall remain unmodified and in full force and effect. 5. Corporate Authoritu- The persons executing this Amendment on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Amendment on behalf of said part, (iii) by so executing this Amendment, such party is formally bound to the provisions of this Amendment, and (iv) the entering into this Amendment does not violate any provision of any other agreement to which said party is bound. (Signatures on following page) Paradies Amendment No. 1 to Agreement 4159 2 Palm Springs International Airport i i - IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the date first written above. ATTEST: CITY OF PALM SPRING 2 amunidpalooree - gy , Z2 By; �- City Clerk p /2xfZ�7 CiV nager , -- /A�F-PROVeD O FOR APPROVED SY CQN COUN�,CIIL ney CONTRACTOR: Check one: Individual Partnership_Corporation Corporations require two notarized signatures: One from each of the following: A. Chairman of Board, Preside any Vice President:AND 8. Secretary,Assistant Secretary,Treasurer,Assistant Treasurer,or Signaturd(notarized) Signature(notarized) i G Name: nice 1 eme'r Name. IC- �t le.�/���- Title: IIT DLG( h25� j�PJt J Q4 P Title: C1 State of l�J� a� �--- State of Yr / I County of (20(e)r`(?X - County of `/&2-2 On On nI101�7 befo a me ; b9 I , irC personallyappearedil personally appeared personally known to me(or proved to me on personally known to me(or proved to me on the basis of satisfactory evidence)to be the the basis of satisfactory evidence)to be the person(s)whose name(s)is/are subscribed person(s)whose names)is/are subscribed to the within instrument and acknowledged to the within instrument and acknowledged to me that he/she/they executed the same to me that helshe/they executed the same in hislherAheir authorized capacity(ies),and in his/her/their authorized capacity(ies),and that by his/her/their signatures(s)on the that by his/her/their signatures(s)on the instrument the persori(s),or entity upon instrument the person(s),or entity upon behalf of which the person(s)acted, behalf of which the persons)acted, executed the instrument executed the instrument. WITNESS m hand d official se I. WITNESS m hand nd officia seal. I Y //;y Notary Signatur its Y/L ;-4 Notary Signature: Lt . rr� l /� Notary Seal: Notary Seal: De7or2h tilt. Grok8. C9�Yanr Public OebomtiW�y�°•a �I '�owetG county, GF. G~(iataryP Publie-- - niE)P�,ot arrolsslt�� rxp 8/8/2010 aer0i, GAO � - 1�1l�ef a;o"momleslt�u� Fr.a Ey/�!2®old Paradies Amendment No. 1 to Agreement 4159 3 1 Palm Springs International Airport I I EXHIBIT"A" (See Attached) i i j I I I I j Paradies Amendment No. 1 to Agreement 4159 4 Palm Springs International Airport I I j �� 6alEB Qj Corr uru r 9� }I R€STUM111I BAR'(1,900 SF) QQ CURRIL LCUM(450 SF} Q Oulu ffAil110 400 5f1 sar P 03 fH€(SENIC€BESIMRAH}(3,137 SO 13 CORE URi(154 SF) :r r ,.Fs 661E d ® SR clwy[ART(66 51) 11 ) l%,w/BOOST!SU}]ORm 075 so6a1,7 �; QQ SFECmily UO'l(66 SF} 1® RAI'ESS Cf I R(461 SF) OUTSIDE SEA]Nk(IGO 5f1 s COFFEE Slim(400 SF) s salE a �7 SFECIALiY 61f1[850 SF1 Q AwLea QB WON WAR 160LF 50(1,0501f) �Efi fdGO Sfl 17ELE7 ® }EEZLQ90M!_SUHORIES(400Sf1 ® AS`Alum(400 SF) 6 G=1E 2 , GV{f 1Ei 518B Eai{16A MENB . 5 �0�9 .5ai8iPS 819B 64TE 12 6dfFS UA E 1IB 51H 6y{15B OEM s{nren(MM o o I ' I EXHIBIT"A-1" (see attached) I I i I f I , i i I I ' Paradies Amendment No, 1 to Agreement 4159 5 j Palm Springs International Airport i -- . --..� ' ' � '`;� s �• JOItJT USE/COPIMON AREA 63,461 SF f APRON AREA, 321,314 SF s•^. TOTAL PREFERENTIAL USE SPACE 365,192 SF • I _ 'ice._ r x s„I ?. rJ�,u C�NC4G�K5E � �P s�o�e No. I = oSF 7 ' Exhibit"8, Page 1-13, Store No 19 i (see attarhed) I i i i 1 I i I � ' I i I i Paradies Amendment No. 1 to Agreement 4159 Palm Springs International Airport i I DJ D4 Q5 TIE p PARF3Ol�j .---------------- ---------------- -------------------- --ataLT-B:L- ,5d X i4l sr - 4- 444iif 13, BlrlFFa-------------- QA-- ---- Q6 1 I 1 I 1 I 1 I IlV 1 I ! 1 I 1 oa � � I f 1 - __ TR I of S�11T:� � f ; I �I i ; • i 1 I I J� f I , I I I � � ' i• 1 1 � 1 mm I 1 I u1 I � 1 The Parodies Shops, Inc. • Suppl Space Use Agr AGREEMENT #4159 M06817, 3-21-01 SUPPLEMENTAL SPACE USE AGREEMENI THIS SUPPLEMENTAL SPACE AND USE AGREEMENT, made and entered into as of the �1 day of _ ✓z 2001, by and between the CITY OF PALM SPRINGS, a municipal corporation organized and existing under the laws of the State of California, hereinafter referred to as "CITY" and PARADIES SHOPS, LLC, a Georgia limited liability company a subsidiary of THE PARADIES SHOPS, a Georgia Corporation, hereinafter referred to as 'TENANT'. WITNESSETH: WHEREAS, CITY owns and operates an airport known as the Palm Springs International Airport, situated in the City of Palm Springs, County of Riverside, State of California, hereinafter referred to as `AIRPORT'; and WHEREAS, TENANT is operating at the Airport under separate agreement, "Lease Agreement for Concessions", and wishes to utilize terminal office space at the Airport; and NOW, THEREFORE, for and in consideration of the premises, and of the covenants and conditions hereinafter contained, to be kept and performed, the parties hereto do agree as follows: ARTICLE I PREMISES RIGHTS AND PRIVEGES CITY hereby offers to TENANT and TENANT takes from CITY, for its exclusive use except as otherwise noted, certain premises located in the terminal building, consisting more particularly of the following, to-wit: Baggage Claim wing office space (Suite A111.1) containing 114 square feet as designated on Exhibit "A", attached hereto and made a part of this Agreement. ARTICLE II TERM OF AGREEMENT The term of this Agreement shall be for a period commencing on March 1, 2001 and terminating on February 28 2003. TENANT is given the option(s) to extend the term of this agreement for Three (3) one-year options by giving notice of exercise of the option (`option notice") to CITY at least one hundred twenty (120) days but not more than six (6) months before the expiration of the initial term or 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. ARTICLE III RENTALS FEES AND OTHER CHARGES The rental rate for Suite A111.1 shall be computed at the rate of$25.21 per square foot per annum and shall be $239.50 per month, payable by TENANT to CITY, beginning on March 1, 2001 and the first day of each month thereafter. Rental adjustments shall be based on current Palm Springs Comprehensive Fee schedule for Baggage Claim Office/Counter Space. ARTICLE IV IMPROVEMENTS AND ALTERATIONS No improvements, alterations or additions; other than those heretofore installed or approved by CITY, shall be made into upon the demised premises by TENANT without the written consent of CITY being first obtained. ARTICLE V MAINTENANCE AND OPERATION Section 1. Utilities: CITY shall maintain heating and air conditioning systems in good condition and repair. Section 2. Repair and Maintenance: TENANT shall, at its sole cost and expense, maintain the demised premises, including all interior improvements, constructed or installed by CITY or TENANT therein, except heating and air conditioning ducts and systems and utility maintenance, and shall keep said premises in good condition and repair in a neat, clean and sanitary condition, and shall furnish janitorial service. Section 3. Trash, Garbage and Other Refuse: TENANT shall provide a complete and proper arrangement for the adequate, sanitary handling and disposal, away from the Airport of all trash, garbage and other refuse caused as a result of the operation of its business. TENANT shall provide and use suitable, covered metal receptacles for all garbage, trash and other refuse on or in connection with the demised premises. Piling of boxes, cartons, barrels or other similar items in a n unsightly or unsafe manner, on or about the demised premises, is forbidden. ARTICLE VI INSURANCE It is agreed by the parties that the broad insurance provisions provided under the TENANT's Lease Agreement For Concessions; a separate agreement would also apply to the additional space provided for herein. ARTICLE VII MISCELLANEOUS Section 1. This Agreement shall be construed and enforced in accordance with the laws of the State of California. Section 2. The mailing address of CITY shall be P.O. Box 2743, Palm Springs, California, 92263-2743, until written notice of change thereof has been given to Lessee. Section 3. The mailing address of TENANT shall be The Paradies Shops, Inc., 5950 Fulton Industrial Blvd. S.W., Atlanta, Georgia 30336. Section 4. Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized toe execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which said party is bound. IN WITN�SS WHEREOF, the parties hereto have caused these presents to be executed on this ?/-6 day of 2001. A CITY OF PALM SPRINGS, CALIFORNIA City Clerk City Manager APPROVED AS TO FORM: X. City At r , CONTRACTOR: l l qlaraaP�'t� ShoPS�� h�i' (Check one: _ individual partnership corporation) (NOTARIZED) => By: ' igpdture ?Ir�s rrY�" � ;� wcs�y, ls print name and title y is ionUpirss Joy 20,'za02 (NOTARIZED) By: Z 1-a" �� signature �an mare �� I�SSocr�.r ��fr�.�"i"J` mgr C c:e ,,,v s , a w.^,,,;,° print name and title Mailing Address: JrgS� f`u.� �'oh .� neC45f r'iaJ ��U� 3 033 (0 (Corporations require two signatures: one from each of the following: A. Chairman of Board, President, any Vice President; AND B. Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, or Chief Financial Officer.) End of Signatures /-,,i,%!��movu") CSC �GJCr C�wv C ONRN` C��L o � o o ® ` O NOTE: SHADED AREA REPRESENTS AVAILABLE LEASED SPACE DO OF 114 SQUARE FEET. X O r— --- 2 AREA OF BLOWUP SUITE A111.1 L -J Paradies Shops . Airport Lease Concessions AGREEMENT#4159 M06510, 10-20-99 LEASE AGREEMENT FOR CONCESSICnva AT THE PALM SPRINGS INTERNATIONAL AIRPORT THIS LEASE AGREEMENT FOR CONCESSIONS AT THE PALM SPRINGS INTERNATIONAL AIRPORT (herein "Lease") is made and entered into this 1st day of November, 1999 ("Effective Date"), by and between the City OF PALM SPRINGS, a municipal corporation ("City"), and PARADIES SHOPS, LLC, a Georgia limited liability company a subsidiary of THE PARADIES SHOPS, a Georgia Corporation ("Tenant"). RECITALS A. City is the owner of the Palm Springs International Airport (the "Airport"), and operates thereon the Palm Springs Airport Terminal building ("Terminal"). B. City and Tenant wish to enter into this Lease for the operation and maintenance of certain newsstands, gift shops and related facilities at those locations within those areas in the Terminal depicted at Exhibit "A" ("Lease Area"), and to more clearly set forth the respective obligations of each parry relating thereto. C. City and Tenant have executed that certain Option Agreement granting Tenant the option to lease the Lease Area upon the terms set forth in this Lease, and upon the City's approval of Tenant's preliminary construction plans, construction contract documents and proof of financing for Tenant's development of the Lease Area, as further set forth in the Option Agreement. A copy of the Option Agreement is attached hereto as Exhibit "C". D. By executing this Lease, the parties acknowledge that Tenant has satisfied those conditions in the Option Agreement required therein prior to the execution of this Lease. E. City's decision to enter into this Lease with Tenant is based upon Tenant's experience, Proposal and inspection of the Terminal and acceptance thereof. COVENANTS In consideration of the foregoing Recitals and the mutual covenants and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Services of Tenant and Use of Park. 1.1 Tenant Scope of Services. City's primary purpose for entering into this Lease is to promote the development of news, books, sundries and gift concessions to serve the public at the Terminal on a nonexclusive basis. In compliance with all terms and conditions of this Lease, Tenant shall provide certain services at the Lease Area to serve the public at the Airport, which services shall generally include the operation, management, and maintenance of (i) news and gift concessions, which shall provide for the sale of newspapers, books, magazines, 627/014084-0014/3231000.4 a10/29/99 -1- and other periodicals ("News/Books Shops"), and/or (ii) specialty merchandise, sundries, gifts, necessary consumer items, and a variety of high quality pre-packaged foods and beverages ("Gift Shops") (collectively, the "services" or "work"). City reserves the right to require Tenant to sell specific merchandise or items which in the judgment of City is necessary to serve the public at the Airport. Tenant shall provide for the sale of merchandise as follows: 1.1.1 The areas designated as Store Nos. 9, 14 and 18 in Exhibit "B" shall be utilized for the operation of News/Books Shops. 1.1.2 The areas designated as Store Nos. 1, 7, 8, 9, 14 and 18 in Exhibit "B" shall be utilized for the operation of Gift Shops. 1.1.3 The area designated as Storage No. 1 in Exhibit "A" may be used by Tenant as a storage area for the storage of non-perishable supplies, fixtures and equipment required for the sale of merchandise. 1.2 Operational Requirements. Tenant agrees to abide by the following conditions and requirements: 1.2.1 Quality and Service Standards. All services shall be provided to the general public by Tenant on behalf of City. Tenant represents and warrants that Tenant is experienced in performing the work and services contemplated herein and covenants that it shall follow the professional standards prevalent in the industry in which Tenant is engaged, such as those of Orange County's John Wayne Airport and Tucson International Airport, in performing the work and services required hereunder. Contractor further warrants that all materials provided by it will be of good quality, fit for the purpose intended. The Contract Officer shall have the right to make reasonable objections to the quality of merchandise sold, the character of the service rendered the public, and the appearance and condition of the Lease Area. Tenant agrees to promptly remedy any such objectionable practice. Failure to comply with the foregoing shall constitute a material breach of this Lease. 1.2.2 Familiarity with Work. By executing this Lease, Tenant warrants that Tenant (i) has thoroughly investigated and considered the scope of services to be performed, (ii) has carefully considered how the services should be performed, and (iii) fully understands the facilities, difficulties, and restrictions attending performance of the services under this Lease. 1.2.3 Employees. Tenant shall at all times retain active, qualified, courteous, competent and experienced personnel in sufficient number as necessary to conveniently and efficiently serve the public at all times including peak periods. Tenant shall not employ any person(s) in or about the Lease Area who shall use offensive language or act in loud, boisterous, or otherwise improper manner. Tenant shall at all times retain active, qualified, competent, and experienced personnel to supervise Tenant's operation and to represent and act for Tenant. Tenant shall maintain a close check over attendants and employees to ensure the maintenance of a high standard of service to the public. Tenant shall replace any employee whose conduct is detrimental to the best 627/014084-0014/3231000.4 a10/29/99 -2- r interests of the public. 1.2.4 Uniforms. Tenant shall require all of Tenant's employees working in view of the public, except management employees, to wear clean and neat uniforms of a design approved by Contract Officer, which approval shall not be unreasonably withheld, or where uniforms are not required by the Contract Officer, Tenant shall require its employees to be properly dressed, clean and neat in appearance at all times. 1.2.5 Pricing. Merchandise shall include a variety of necessary consumer items (i.e., toothpaste, aspirin, etc.). All prices charged for goods and/or services supplied to the public on or from the Lease Area shall be fair and reasonable, based upon the following considerations: (a) The degree of public service involved in the sale of the goods and/or services. (b) The market prices charged by other competing and/or comparable businesses. (c) The reasonableness of the profit margin as related industry- wide. Notwithstanding the above, prices of said items shall not exceed one hundred ten percent (110%) of the prices found in convenience stores offering similar consumer items in the Palm Springs Area. Pre-marked cover prices on newspapers, periodicals and magazines shall be sold at the cover price. 1.2.6 Deliveries. No supplies of any nature or kind will be delivered to the Lease Area at any entrances, routes or times other than those designated by the Contract Officer. 1.2.7 Credit Card Sales. If credit card sales are accepted, then Tenant shall provide "credit card swipe" or an up-to-date system acceptable to Contract Officer to expedite credit card approval. 1.2.8 Noninterference. Tenant shall cooperate with and not interfere with City's and other tenants' use of and operations at the Airport. Tenant shall not do anything or fail to do anything which would invalidate or conflict with any fire or other casualty insurance policies required of Tenant under this Lease. 1.3 Signs. Tenant agrees not to construct, maintain, or allow any sign upon the Lease Area except as approved by the Contract Officer. Unapproved signs, banners, flags, etc., may be removed by the Contract Officer without prior notice to Tenant. 1.4 Liens. Tenant agrees that it shall pay and discharge or cause to be paid and discharged all costs for work done by it or caused to be done by it on the Lease Area and Tenant shall keep the Lease Area free and clear of all mechanic's liens or other liens on account 627/014084-0014/3231000.4 a10/29/99 -3- I I of work done or alleged to have been done by or for Tenant or persons claiming under Tenant. Should a lien be filed against the Lease Area or any part thereof relating to work authorized or approved by Tenant with respect to the Lease Area, Tenant shall, at its expense, cause the same to be discharged, by payment, bonding, or otherwise as provided by law, except for liens that may have been incurred by City arising from City's actions, and if Tenant fails to do so, City, at its option, may terminate this Lease by serving five (5) days' notice, in writing, upon Tenant. Nothing herein contained shall in any way prejudice the rights of Tenant to contest the final judgment or decree of any such lien prior to payment thereof. Tenant, upon reasonable notice and request in writing from City, shall also defend for City, at Tenant's expense, any action, suit, or proceeding which may be brought on or for the enforcement of any such lien and shall pay damages and satisfy and discharge any judgment entered in such action, suit, or proceeding and save City harmless from any liability, claim, or damages resulting therefrom where such lien, judgment, suit or proceeding arises from the action of Tenant, its agents, employees, and independent contractors in renovating, constructing, or operating improvements upon the Lease Area. City and its representatives shall have the right to post any notices or take any other action upon or with respect to the Lease Area that is, or may be, permitted by law, as City may deem necessary for the protection of its interest in the Lease Area during the period that any work is being performed that night result in a lien being filed against the Lease Area. Neither failure of City to take any such action nor any termination of the Lease for failure to pay and discharge any such liens as above provided shall relieve Tenant from the obligation of indemnity set forth above in this Section 1.4. 1.5 General Prohibitions. Tenant shall not use or occupy the Lease Area, or permit the same to be used or occupied, for any purposes or business deemed by City to be extra- hazardous which will in any way increase the existing rate of or affect any fire or other insurance upon any improvement at the Lease Area without the consent of City, and the amount of such increase, if any, shall be paid by Tenant to City upon demand. Tenant shall not do or permit anything to be done in or about the Lease Area which will in any way obstruct or interfere with the rights of others involved in the operations, maintenance, or use of the Lease Area or injure or annoy them or use or allow the Lease Area to be used for any improper, immoral, unlawful, or objectionable purpose, nor shall Tenant cause, maintain, or permit any nuisance in, on, or about the Lease Area. Tenant shall not commit or allow to be committed any waste in or upon the Lease Area. 1.6 Charge for Unauthorized Services and Uses. In the event Tenant breaches this Lease by using or permitting the Lease Area to be used in any manner other than as expressly permitted under this Lease, Tenant shall pay City a sum equal to 100% of the "gross receipts", as defined in the Section in this Lease entitled "DEFINITION OF GROSS RECEIPTS" for any service or use that is not permitted by this Lease. Said payment is subject to the "due date" provided in the Section in this Lease entitled "RENT PAYMENT PROCEDURE" and the "charge for late payment" provided in the Section in this Lease entitled "CHARGE FOR LATE PAYMENT". The existence of the 100% charge in this Section, or the payment or receipt of money under this Section, does not constitute an authorization for-a particular service or use and does not constitute a waiver of City's right to require Tenant to terminate such service or use. The parties agree that City's actual damages, in the event of such a breach by Tenant would be 627/014084-0014/3231000.4 a10/29/99 -4- r , extremely difficult or impossible to determine, therefore, an amount equal to the amount of 100% of such gross receipts has been agreed upon, after negotiation, as the parties' best estimate of City's reasonable damages. 1.7 Exemption of City from Liability. City shall not be liable for injury to Tenant's business or any loss of income therefrom or for damage to the goods, wares, merchandise, or other property of Tenant, Tenant's employees, invitees, or customers, or any other person in or about the Lease Area, nor shall City be liable for injury to the person of Tenant, Tenant's employees, agents, or contractors as a result of the condition of any improvements now or hereafter located on the Lease Area, which improvements Tenant agrees to and does accept in the condition existing upon Tenant's inspection of the Lease Area and acceptance thereof. 2. RENT. Tenant agrees to pay the following rents payable monthly in arrears on or before the twentieth (20th) day of each month. Tenant shall pay to City for each accounting year either the Minimum Annual Rent Guarantee or the Percentage Rent, whichever is greater (collectively "Annual Rent"). 2.1 Minimum Annual Rent Guarantee. The minimum Annual Rent for the Lease Area shall be TWENTY FIVE AND 00/100 DOLLARS ($25.00) per square foot of Lease Area for the first year of the Initial Term ("Minimum Annual Rent Guarantee"). Thereafter, and beginning on the first anniversary following the Commencement Date, and each year thereafter, in accordance with Section 3 entitled "Revision of Rents", the minimum annual rent shall be adjusted pursuant to said Section 3. 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). Should this Lease be terminated during an accounting year, or should the first accounting year be other than a full calendar year, the applicable minimum annual rent shall be prorated on the basis of a three hundred sixty-five (365) day year. 2.2 Percentage Rent. Percentage Rent for the Lease Area shall be calculated using the following percentages of gross receipts from business operations conducted on or from the Lease Area: Business Percentage Percentage (0-800.00 Enplanements) (800,000 Enulanements and Above) News/Books/ Periodicals/Convenience 8% 10% PGA 8% 10% Gifts 10% 12% Notes: 1) If airport enplanements exceed 800,000 for its fiscal year, Tenant will pay City the difference in dte percentage rental. 2) Percentage rental will be 6% with no Minimum Annual Rent Guarantee requirement until the last new store opens for business, but no later than August 1, 2000, in which time the Minimum Annual Rent Guarantee will 627/014084-0014/3231000.4 a10/29/99 -5- I apply. 2.2.1 Definition of "Gross Receipts". The term "Gross Receipts" as used in this Lease means the total gross receipts of all goods, wares and merchandise sold including the actual charges for all services performed by Tenant and fees charged by Tenant and by anyone including any subtenant, licensee or concessionaire in, at, from, or arising out of the use of the Lease Area, whether for cash or credit, or otherwise, and including the value of all consideration other than money received for any of the foregoing, without reserve or deduction or inability or failure to collect, including but not limited to sales, leases and services: (a) Where the orders therefore originate in, at, from, or arising out of the use in whole or part of any portion of the Lease Area, whether delivery or performance is made from the Lease Area or from some other place and regardless of the place of bookkeeping for, payment of, or collection of any accounts; or (b) made or performed by mail, telephone, or telegraph orders received or filled in, at, or from the Lease Area; or (c) made or performed by means of mechanical or other vending machines in the Lease Area; or (d) which Tenant, or any subtenant, licensee or concessionaire, in the normal and customary course of its business, would credit or attribute to its operations at the Lease Area or any part thereof. Any deposit accepted and retained by Tenant shall be included in Gross Receipts. Each installment or credit sale shall be treated as a sale for the full price in the month during which such sale is made, irrespective of whether or when Tenant receives payment therefor. Gross Receipts shall include any amount allowed upon any "trade-in," the full retail price of any merchandise delivered or redeemed for trading stamps or coupons and all deposits not refunded to purchasers. Gross Receipts shall not include sales taxes, so-called luxury taxes, consumers excise taxes, gross receipts taxes and other similar taxes now or hereafter imposed upon the sale of merchandise or services, but only if collected separately from the selling price of merchandise or services and collected from customers. 2.2.2 Records of Gross Receipts. The Tenant shall keep at the Lease Area (and shall require any permitted subtenant to keep at the Lease Area) full, complete and proper books, records and accounts of its daily Gross Receipts, both for cash and on credit, of each separate department and concessionaire at any time operated in the Lease Area. The City and its agents and employees shall have the right at any and all times, during regular business hours, to examine and inspect all of the books and records of the Tenant pertaining to the business of the Tenant conducted in, upon, or from the Lease Area, for the purpose of investigating and verifying the accuracy of any statement of Gross Receipts and to cause an audit of the business of Tenant to be made by a certified public accountant of City's selection. In addition, upon request of City, Tenant agrees to furnish to City a copy of all of Tenant's (and of Tenant's subtenants, licensees and concessionaires) sales and use tax returns if required to be filed in the state or county or city where the Terminal is located and consents to City's right to obtain such returns directly from the taxing authorities. If the statement of Gross Receipts previously made to City shall be found to be inaccurate, then and in that event, there shall be an adjustment and one parry shall pay to the other on demand such sums as may be necessary to settle in full the accurate amount of said Percentage Rent that should have been paid to City for the period or periods covered by such inaccurate statement or statements. If said audit shall disclose an inaccuracy of greater than one percent (1%) error with respect to the 627/014084-0014/3231000.4 a10/29/99 -6- I , J � • amount of Gross Receipts reported by Tenant for the period of said report, then the Tenant shall immediately pay to City the cost of such audit; otherwise, the cost of such audit shall be paid by City. If such audit shall disclose an intentional and/or consistent under-reporting of Gross Receipts of more than three percent (3%) with respect to the amount of Gross Receipts reported by Tenant for the period covered by such report or a consistent or intentional under-reporting of Gross Receipts, such discrepancy or under-reporting shall be deemed conclusively a material breach of this Lease and shall entitle City to all of the remedies provided in this Lease, including, but not limited to, the right to terminate this Lease. 3. REVISION OF RENTS. On the first anniversary of the Commencement Date, and annually thereafter, the minimum annual rent shall be automatically adjusted to the greater of either (a) or (b) immediately below, which Tenant shall pay pursuant to Section 4 herein. (a) Eighty percent (80%) of the Annual Rent paid by Tenant to City for the preceding accounting year (b) The Minimum Annual Rent Guarantee of TWENTY FIVE AND 00/100 DOLLARS ($25.00) per square foot of Lease Area. 4. RENT PAYMENT PROCEDURE. 4.1 Statement of Annual Rent. On or before the twentieth (20th) day of each month, Tenant shall deliver to City a correct statement of all applicable gross receipts for that portion of the accounting year which ends with and includes the last day of the preceding calendar month. The statement shall be signed by Tenant or his responsible agent under penalty of perjury, and shall be in the form prescribed by City. Each statement shall indicate: (1) One twelfth of the Annual Minimum Rent Guarantee. (2) The total Gross Receipts for said portion of the accounting year, itemized as to each of the business categories for which a separate Percentage Rent is established. A breakdown of the Gross Receipts of each business conducted on the Lease Area must be attached to each statement where a reported business category is comprised of more than one business operation. (3) The related itemized amounts of Percentage Rent computed as herein provided and the total thereof; (4) The Annual Rent previously paid by Tenant for the accounting year within which the preceding month falls; and (5) The rent due for the preceding month. 4.2 Payment of Amaual Rent. Concurrently with the rendering of-each monthly statement, Tenant shall pay to (City the greater of the following two amounts: 627/014084-0014/3231000.4 a10/29/99 -7- (a) The total Percentage Rent computed for that portion of the accounting year ending with and including the last day of the preceding month [Item 4.1(3) above] less total rents previously paid for the accounting year [Item 4.1(4) above], or (b) One twelfth of the annual minimum rent, multiplied by the number of months from the beginning of the accounting year to and including the preceding month, less total rents previously paid for the accounting year [Item 4.1(4) above]. 4.3 Place of Past and Filing. Rental payments shall be delivered to, and statements required by Section 4.1 above shall be filed with the City of Palm Springs, Attn: Airport Accounts Payable, 3200 Tahquitz Canyon Way, Palm Springs, CA 92263. The designated place of payment and filing may be changed at any time by City upon ten days written notice to Tenant. Annual Rent payments may be made by check made payable to the City of Palm Springs. Tenant assumes all risk of loss if payments are made by mail. All sums due under this Lease shall be paid in lawful money of the United States of America, without offset or deduction or prior notice or demand. No payment by Tenant or receipt by City of a lesser amount than the payment due shall be deemed to be other than on account of the payment due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment be deemed an accord and satisfaction, and City shall accept such check or payment without prejudice to City's right to recover the balance of the amount due or pursue any other remedy in this Lease. 4.4 Additional Fees or Related Activities. In addition to the payment of Annual Rent required pursuant to this Section 4.4, Tenant shall be responsible for payment of all costs and overhead associated with the operation of the services described in Section 1 above, including, but not limited to, labor, product inventory, marketing, telephone charges, transportation, clerical and reproduction, overhead, payroll, profit, and all costs for subcontracts, materials, equipment, supplies and costs arising from this Lease or the termination of this Lease. 4.5 Additional Rental. For purposes of this Lease, all payments required to be made by Tenant to City for taxes, maintenance and repair, expenses in connection with parking, insurance, and all other monetary obligations of Tenant under this Lease, shall be deemed to be additional rental. 5. SECURITY DEPOSIT. Tenant shall provide City with a security deposit in the sum of THIRTY ONE THOUSAND FIVE HUNDRED AND 00/100 DOLLARS ($31,500.00). The security deposit may be drawn upon by City pursuant to Sections 5.1 and 27.2. The security deposit shall take one of the forms set out below and shall guarantee Tenant's full and faithful performance of all the terms, covenants, and conditions of this Lease and payment against any damage to the Lease Area after termination of the Lease. Nothing contained in this Section 5 shall in any way diminish or be construed as waiving any of the City's other remedies as provided in this Lease, or by law or in equity. City reserves the right to adjust the amount of the security deposit to reflect changes in operations or changes in rents and fees established by City. Within thirty (30) days after notification of any change in required security deposit amount from 627/014084-0014/3231000.4 a10/29/99 -8- L City, Tenant shall submit to City any additional security deposit as may be required. (a) Cash. City shall not be required to keep this security deposit separate from its Airport :funds, and Tenant shall not be entitled to any interest on such deposit. (b) The assignment to City of a savings deposit held in a financial institution acceptable to City. At the minimum, such assignment shall be evidenced by the delivery to City of the original passbook reflecting said savings deposit and a written assignment of said deposit to City, in a form approved by City. (b) A time certificate of deposit from a financial institution wherein the principal sum is made payable to City. Both the financial institution and the form of the certificate must be approved by City. (c) An instrument or instruments of credit from one or more financial institutions, subject to regulation by the state or federal government, pledging that funds necessary to secure performance of the lease terms, covenants, and conditions are on deposit and guaranteed for payment, and agreeing that said funds shall be trust funds securing Tenant's performance and that all or any part shall be paid to City. Both the financial institution(s) and the form of the instruments must be approved by City. (d) A faithful performance bond executed by a surety company, and issued in a form, reasonably approved by City. Under the bond, the surety company shall guarantee to City full and complete performance of all the terms, ' conditions and covenants herein to be performed on the part of the Tenant, including the payment of use fees, charges, rents, as well as any and all other payments. Said bond shall be maintained at the cost of the Tenant throughout the existence of this Lease. Said surety shall give City at least thirty (30) days prior written notice of cancellation or material change in said bond. Such cancellation or material change without City's prior written consent shall constitute a default under this Lease. 5.1 Use of Security Deposit. Regardless of the form in which Tenant elects to make said security deposit, all or a portion of the principal sum shall be available unconditionally to City for correcting any default or breach of this Lease by Tenant, his successors or assigns, or for payment of expenses incurred by City as a result of the failure of Tenant, his successors or assigns, to faithfully perform all terms, covenants, and conditions of this Lease, including, but not limited to, non-payment of Annual Rent. In the event City withdraws any or all of the security deposit as provided herein, Tenant shall, within ten (10) days of any withdrawal by City, replenish the security deposit to maintain it at amounts as herein required throughout the lease term. Failure to do so shall be deemed a default and shall be grounds for immediate termination of this Lease. 5.2 Release of Liability. Should Tenant elect to assign a savings deposit, 627/014084-0014/3231000.4 a10/29/99 -9- r , provide a tone certificate of deposit, an instrument of credit, or a faithful performance bond to fulfill, the security deposit requirements of this Lease, said assignment, certificate, bond, or instrument shall have the effect of releasing the depository or creditor therein from liability to Tenant on account of the payment of any or all of the principal sum to City, or order upon demand by City. The agreement entered into by Tenant with a financial institution to establish the deposit necessary to permit assignment or issuance of a certificate as provided above may allow the payment to Tenant or order of interest accruing on account of said deposit. 5.3 Return of Security Deposit. The security deposit shall be rebated, reassigned, released, or endorsed by City to Tenant or order, as applicable, at the end of the lease term, provided Tenant has fully and faithfully performed each and every term, covenant, and condition of this Lease. The authorized refund of any security deposit by City, after deduction of all amounts due City under this Lease, shall be made after one hundred twenty (120) days have elapsed following the effective date of said termination. 6. TERM. This Lease shall commence upon the execution of the Lease by City. Unless earlier terminated in accordance with Section 7 below, the term of this Lease shall be ten (10) years commencing on the Date of Beneficial Occupancy ("Initial Term"). This Lease may be extended for a one (1) subsequent five (5) year term ("Renewal Term") at the option of Tenant subject to the conditions in this Section 6. Should Tenant wish to exercise the option for the Renewal term, Tenant shall notify City of such intent by delivering a written notice to the Contract Officer at least eighteen (18) months prior to the end of the Initial Term (or by May 8, 2009) that Tenant wishes to exercise the right to the Renewal Term ("Initial Notice"). Upon receipt of Tenant's Initial Notice, the City shall be entitled to survey the market for comparable lease rates and increase the Minimum Annual Rent Guarantee to a level reflecting such market conditions, and inform Tenant in writing of its intent to increase the Minimum Annual Rent Guarantee as a result of such survey. Within twenty (20) days after City notifies Tenant of its intent to increase the Minimum Annual Rent Guarantee, Tenant shall notify City in writing whether it wishes exercise the option for the Renewal Term based upon such increased Minimum Annual Rent Guarantee. Should Tenant refuse to pay the increased Minimum Annual Rent Guarantee, its option to the Renewal Term shall lapse. The terms "Date of Beneficial Occupancy" as used herein shall mean: (1) that date upon which Tenant completes tenant improvements, as defined at Section 8 below, and opens for business in any section of the Lease Area; or (2) upon the opening of the Terminal projected to be November 9, 1999. 7. TERMINATION BY CITY FOR AIRPORT RELATED PURPOSE. In the event City should require over fifty percent (50%) of the Lease Area, or any portion thereof, for any Airport related purpose whatsoever, Tenant agrees that City may terminate this Lease by giving Tenant ninety (90) days written notice. Prior to providing Tenant with notice to terminate the Lease hereunder, City shall meet with Tenant in a good faith attempt to determine whether relocation of the disturbed portion of the Lease Area is feasible. If relocation is not feasible and this Lease is terminated under the provisions of this Section 7, City shall reimburse Tenant for Tenant's actual construction cost submitted in accordance with the Section in this Lease entitled "AS-BUILT PLANS AND CONSTRUCTION COSTS" for the portion of the Lease Area terminated, less depreciation, at the rate of 10% per year from date of substantial completion of 627/014084-0014/3231000.4 a10/29/99 -10- Tenant-constructed improvements on the Lease Area to the date of termination of this Lease. The "date of substantial completion" for the purposes of this Section shall mean the first to occur of: (a) The date Tenant's architect or engineer issues a certificate of substantial completion. (b) The date Tenant obtains a certificate of occupancy. (c) The date Tenant first occupies and/or uses said construction for the conduct of Tenant's business from the Lease Area, or (d) The date that Tenant or Tenant's contractor records a notice of completion. It shall be Tenant's responsibility to provide City with evidence of said dates and, if Tenant fails to do so, in a manner reasonably satisfactory to City, the date of substantial completion shall be the date determined by City, acting in good faith, as the most likely date on which the subject construction was suitable for occupancy and/or use for its intended purposes, notwithstanding that minor additional and/or corrections remained to be completed. The reimbursement provided above shall be Tenant's sole and exclusive remedy and form of compensation, costs or damages, including Relocation Assistance benefits (Sec. 7260 et sue. of the California Government Code), due to termination, re-entry or acquisition by City. 8. INITIAL CONSTRUCTION BY TENANT. Tenant shall cause to be designed, constructed, and installed within the Lease Area, at no cost to City, appropriate improvements with a minimum cost as designated at Section 8.2 below, to adequately accommodate those services and uses described at Section 1 herein, and as proposed by the concessionaire in the R.F.P. submittal. All improvements constructed by Tenant within the Lease Area shall be constructed in strict compliance with detailed plans and specifications approved by the Contract Officer. 8.1 Development Plan and Construction Standards. The schematic plans prepared by Tenant and approved by Contract Officer during the option period preceding execution of this Lease, as set forth in the Option Agreement, attached as Exhibit "C" hereto, shall be a master plan for development of the Lease Area. The working drawings prepared by Tenant and approved by Contract Officer during the same period shall be the plans, specifications, and time schedule for constructing improvements. Development of the Lease Area shall be conducted in a good and workmanlike manner. 8.2 Minimum Improvement Cost Expenditure. The minimum cost of Tenant's improvements to the Lease Area shall be FIFTY FIVE AND 00/100 DOLLARS ($55.00) per square foot of Lease Area. The term "cost of improvements" shall mean direct construction costs, including costs paid to contractors, architects, engineers, laborers and suppliers, but not indirect costs such as financing costs, administrative and overhead expenses, bond premiums, permit fees, and developer fees paid to Tenant or its affiliates. Tenant shall provide to City records showing the expected cost of improvements, as required under Section 8.6 below. 627/014084-0014/3231000.4 a10/29/99 -11- 8.3 Noninterference. Since City has other work under construction within the Terminal building containing the Lease Area, Tenant warrants that its contractor shall in no way delay or cause delay to or interfere with any other contractor working on such construction. Tenant agrees to hold City harmless from the cost of any time lost by City's contractor or subcontractors due to the actions or failure to act of Tenant's contractor. 8.4 Insurance/Indemnification Requirements. Tenant shall be required to carry comprehensive public liability insurance during construction. If the construction is done by an independent contractor,' insurance shall be procured by the contractor in Tenant's and City's name. All insurance shall be in the limits and coverages acceptable to City in its reasonable discretion. Tenant shall indemnify and hold City harmless for any and all claims, demands, damages, costs or expenses of any nature, including defense costs by reason of construction or alteration by Tenant. 8.5 Tenant's Assurance of Construction Completion. Prior to commencement of construction of approved facilities, or any phase thereof, within the Lease Area by Tenant, Tenant shall furnish to City evidence that assures City that sufficient monies will be available to complete the proposed construction. The amount of money available shall be at least the total estimated construction cost. Such evidence may take one of the following forms: (a) Completion Bond issued to City as obligee. (b) Irrevocable letter of credit issued to City from a financial institution to be in effect until City acknowledges satisfactory completion of construction. (c) Cash. (d) Any combination of the above. All bonds and letters of credit must be issued by a company qualified to do business in the State of California and acceptable to City. All bonds and letters of credit shall be in a form acceptable to City and shall insure faithful and full-observance and performance by Tenant of all terms, conditions, covenants, and agreements relating to the construction of improvements within the Lease Area. 8.6 "As-Built" Plans and Construction Costs. Within thirty (30) days' of City's request, Tenant shall furnish Contract Officer an itemized statement of the actual construction cost of Tenant's improvements to the Lease Area, including supporting invoices signed by subcontractors that performed or are scheduled to perform such improvements. The statement of cost shall be sworn to and signed by Tenant or his responsible agent under penalty of perjury. Tenant must obtain Contract Officer's approval of "As-Built" plans, and the form and content of the itemized statement. In addition, within sixty (60) days following completion of any substantial improvement within the Lease Area, Tenant shall furnish Contract Officer a complete set of reproducible, two sets of prints of "As-Built" plans and a magnetic, tape, disk or other storage device containing the "As-Built" plans in a form usable by City, to City's satisfaction, on City's computer aided mapping and design equipment. 627/014084-0014/3231000.4 a10/29/99 -12- 9. UTILITIES, JANITORIAL. MAINTENANCE AND REPAIR. 9.1 Services Provided By City. City shall provide the following services at the Terminal: 9.1.1 Within the common areas of the Terminal, City shall provide janitorial services to the extent that such services are typically provided to City facilities. 9.1.2 City, through its trash disposal contractor, shall provide trash pick up service including containers at a designated area outside the Terminal for disposal of trash in a form acceptable to the trash disposal contractor. The cost for any trash disposal services shall be the responsibility of Tenant. 9.1.3 City shall provide utilities to the Terminal which include water, sewer, gas, electricity and telephone. Utility lines have been extended to the Lease Area and the cost thereof shall be the responsibility of City. 9.2 Services Provided by Tenant. Tenant shall provide, pay for, and/or be liable for the following services: 9.2.1 Utilities. All utilities to the Lease Area shall be separately metered wherever practical. Tenant shall pay before delinquency all charges for water, gas, heat, electricity, power, sewer, telephone service, trash removal and all other services and utilities used in, upon, or about the Lease Area by Tenant or any of its subtenants, licensees, or concessionaires during the Lease Term. If any utility is not separately metered, Tenant agrees to reimburse City for the cost of said service as City shall reasonably determine to be Tenant's share thereof plus a supervision fee to City equal to fifteen percent (15%) of such cost. City shall not be liable for any failure or interruption of any utility service. City shall not be responsible to Tenant for temporary interruption of Tenant's business in the event of an interruption of utility service. City may, from time to time and at its discretion, impose restrictions on or special allocation provisions with respect to excess utility usage upon the Lease Area for exceptional equipment, ventilation or cooling requirements. 9.2.2 Maintenance and Repair Services. Tenant shall provide at its own cost and expense all repair, maintenance and janitorial services to the Lease Area. Janitorial service shall include collection of any concession-generated trash and cleanup of spills in the area immediately adjacent to the entry and exits of the Lease Area. Tenant shall, to the satisfaction of Contract Officer, keep and maintain the Lease Area and all improvements of any kind which may be erected, installed, or made thereon in good condition and in substantial repair. It shall be Tenant's responsibility to take all steps necessary or appropriate to maintain such a standard of condition and repair. Tenant expressly agrees to maintain the Lease Area in a safe, clean, wholesome, sanitary condition, to the complete satisfaction of Contract Officer and in compliance with all applicable laws. Tenant further agrees to provide approved containers for trash and garbage and to keep the Lease Area free and clear of rubbish and litter. Tenant agrees to 627/014084-0014/3231000.4 a10/29/99 -13- install, maintain any trash receptacles required by City's trash contractor and dispose of any trash in a manner acceptable to such trash contractor. Contract Officer shall have the right to enter upon and inspect the Lease Area at anytime for cleanliness and safety, and Tenant shall immediately correct any conditions that the Contract Officer may find unsatisfactory. Tenant shall designate in writing to Contract Officer an on-site representative who shall be responsible for the day- to-day operation and level of maintenance, cleanliness, and general order. If Tenant fails to maintain or make repairs or replacements as required herein, Contract Officer shall notify Tenant in writing of said failure. Should Tenant fail to correct the situation within three (3) days after receipt of written notice, Contract Officer may make the necessary correction or cause it to be made and the cost thereof, including but not limited to the cost of labor, materials, and equipment and an administrative fee equal to fifteen percent (15%) of the sum of such items, shall be paid by Tenant within ten (10) days of receipt of a statement of said cost from Contract Officer. Contract Officer may, at his option, choose other remedies available herein, or by law. 10. ASSIGNING. SUBLETTING. ENCUMBERING. 10.1 City Consent Required. Any mortgage, pledge, hypothecation, encumbrance, transfer, merger, sublease, or assignment (hereinafter in this Section referred to collectively as "Transfer") of Tenant's interest in the Lease Area, or any part or portion thereof, shall first be approved in writing by City, which approval shall not be unreasonably withheld based on considerations of the proposed transferee's financial capability to operate the concessions and experience and reputation in the concessions industry. Transfers among the immediate family members of Tenant's owners or shareholders shall not require written consent by the City, but shall nevertheless require Tenant to notify City in writing of such transfer. Any Transfer requiring consent by the City hereunder which has not been approved by City in writing shall be void. Occupancy of the Lease Area by a prospective transferee, subtenant or assignee before written approval of the transfer, sublease, merger, or assignment by City shall constitute a breach of this Lease. All subleases shall be between Tenant and sublessee; the entry into sub- subleases is prohibited and shall constitute a breach of this Lease. Transfers restricted hereunder shall include the transfer to any person or group of persons acting in concert of more than twenty five percent (25%) of the present ownership and/or control of Tenant, taking all transfers into account on a cumulative basis. In the event of any such unapproved Transfer, including any bankruptcy proceeding, this Lease shall be void. No approved transfer shall release Tenant or any surety of Tenant of any liability hereunder without the express consent of City. 10.2 No Waiver. Should City consent to any Transfer, such consent shall not constitute a waiver of any of the terms, covenants, or conditions of this Lease or be construed as City's consent to any further Transfer. Such terms, covenants, or conditions shall apply to each and every Transfer hereunder and shall be severally binding upon each and every encumbrancer, assignee, transferee, subtenant, or other successor in interest of Tenant. Any document to mortgage, pledge, hypothecate, encumber, transfer, sublet, merge, or assign the Lease Area or any part thereof shall not be inconsistent with the provisions of this Lease, and in the event of 627/014084-0014/3231000.4 a10/29/99 -14- any such inconsistency, the provisions of this Lease shall control. 10.3 Transfer Conditions. As a condition to City's consent to any Transfer, Tenant shall first notify City of the proposed Transfer and submit in writing to City all documentation to be used in connection with such encumbrance. In the case of an assignment, merger, or sublease, Tenant shall provide City with: 10.3.1 The name of the proposed subtenant or assignee, 10.3.2 The nature of the proposed subtenant's or assignee's business to be carried on in the Lease Area, 10.3.3 Such financial information as City may request concerning the proposed subtenant or assignee, and 10.3.4 Such additional information as City may request regarding the business experience of the proposed subtenant or assignee. 10.3.5 Payment by Tenant of a processing fee as follows: (i) Two Thousand and 00/100 Dollars ($2,000.00) to City for processing each consent to mortgage, pledge, hypothecate, or encumbrance submitted to City as required by this Lease. This processing fee shall be deemed earned by City when paid and shall not be refundable. (ii) Two Thousand Five Hundred and 00/100 Dollars ($2,500.00) to City for processing each consent to assignment, merger, transfer, or sublease submitted to City as required by this Lease. This processing fee shall be deemed earned by City when paid and shall not be refundable. 10.4 Withholding of Consent to Transfer. City agrees that it will not arbitrarily withhold consent to any encumbrance, but City may withhold consent at its sole discretion if any of the following conditions exist: 10.4.1 Tenant or any of Tenant's successors or assigns are in default of any term, covenant or condition of this Lease, whether notice of default has or has not been given by City. 10.4.2 The prospective transferee has not agreed in writing to keep, perform, and be bound by all the terms, covenants, and conditions of this Lease. 10.4.3 All the terms, covenants, and conditions of a Transfer, including the consideration therefore of any and every kind, have not been revealed in writing to City. 10.4.4 Tenant has not provided Real Estate Manager with a copy of all documents relating thereto including, but not limited to, appraisals, if any. 627/014084-0014/3231000.4 a10/29/99 15- 10.4.5 Any construction required of Tenant as a condition of this Lease has not been completed to the satisfaction of City. 10.4.6 Tenant attempts to hypothecate the Leasehold for an amount greater than the cost of improvements to be constructed on the Lease Area. Hypothecation of the Leasehold shall not be permitted for any reason other than to obtain loan proceeds necessary to construct improvements. 10.4.7 The processing fee required by City under Section 10.3.5 above has not been paid to City. 11. DISADVANTAGED BUSINESS ENTERPRISE (DBE) PARTICIPATION. Tenant understands and acknowledges that DBE participation in Tenant's operation as proposed by the Tenant is required for City to meet grant funding requirements of the U.S. Department of Transportation Federal Aviation Administration (FAA). DBE participation goals in the News/Books Shop and Gift Shops during the entire term of this Lease shall be no less than the amount established by the City pursuant to federal regulations, which as of the Effective Date, is THIRTEEN PERCENT (13%). City shall inform Tenant from time-to-time of any changes to this DBE participation rate. The structure of the DBE participation must be acceptable to the FAA. Should Tenant fail to meet such minimum DBE participation for any given year of the Term, Tenant shall provide City or the FAA with evidence of its good faith attempts to meet such DBE participation requirements, as further provided under federal regulations. 12. RULES AND REGULATIONS. Tenant agrees to comply with all rules and regulations adopted or amended by City. Tenant shall be fully responsible to City for the observance and obeyance of, and compliance with, any and all rules, regulations, laws, ordinances, statutes or orders of any governmental authority, whether federal, State, county, or local authority, including the City of Palm Springs, lawfully exercising authority over the Airport or the activities thereon, including compliance with FAA and Airport security rules, regulations and plans, including but not limited to those set forth at Exhibit "D" hereto. Tenant shall be fully liable to City for any and all claims, demands, damages, fines or penalties of any nature whatsoever which may be imposed upon City, including, but not limited to, the payment of any fines or penalties for any breach of security, arising from the unauthorized entry of any person or vehicle onto Airport or from any other violations caused directly or indirectly by the act, omission, negligence, abuse or carelessness on the part of Tenant, its employees, agents, customers, visitors, suppliers or invitees. City shall not be liable to Tenant for any diminution or deprivation of possession or of its rights hereunder, on account of the exercise of such right or authority as in this section provided, nor shall Tenant be entitled to terminate the whole or any portion of the leasehold estate herein created, by reason of the exercise of such right or authority, unless the exercise thereof shall so interfere with Tenant.'s use and occupancy of the leasehold estate herein created so as to constitute a termination in whole or in part of this Lease by operation of law in accordance with the laws of the State of California. 13. NATURE OF TENANT'S ESTATE. Tenant acknowledges and agrees: 627/014084-0014/3231000.4 a10/29/99 -16- 13.1 That City has granted to Tenant a leasehold interest in the Lease Area only. 13.2 That City retains a fee ownership for federal income tax purposes in and to the Lease Area, as well as all other ownership burdens and benefits connected with such fee ownership. 13.3 That Tenant has not been granted any direct or indirect right or option to purchase the Lease Area from City at any time during or after the termination of this lease, and 13.4 That the relationship of the parties to this Lease shall be solely that of landlord and tenant and nothing contained in this Lease shall be construed to create a seller- buyer, optionor-optionee, land sale contract vendor-vendee, or any other relationship of any kind. 14. OPERATING SCHEDULES. Tenant shall at all times maintain a written schedule delineating the operating procedures for each business operation on or from the Lease Area. A schedule of prices charged for all goods and/or services supplied to the public on or from the Lease Area shall also be maintained. Upon written request, Tenant shall furnish to Contract Officer a copy of said schedules and procedures. Should Contract Officer, upon review and conference with Tenant, decide any part of said schedules or procedures is not justified with regard to fairly satisfying the needs of the public, Tenant shall, upon written notice from Contract Officer, modify said schedules or procedures to the satisfaction of Contract Officer. If Tenant does not agree with the modifications required by Contract Officer, Tenant may appeal the matter to the City Council, whose decision shall be final and conclusive. Tenant's failure to comply with the provisions of this clause shall Constitute a serious breach of this Lease and City may immediately terminate this Lease. Primary consideration shall be given to the public's benefit in implementing this Section 14. 15. PARKING. Tenant and Tenant's employees shall have the right to park their automobiles in those areas, if any, within the Airport parking facility designated for employee parking and shall pay any parking permit fees that may be in effect. Upon City's request Tenant shall submit to City a list of Tenant's employees and the license number of vehicles driven by them (including the license number of Tenant's own vehicles). Tenant shall thereafter notify City of any changes to such list within five (5) days after such change occurs. If Tenant or its employees park their vehicles in other than a designated area, City may charge Tenant, without prior notice, Ten Dollars ($10.00) per day per vehicle parked in other than a designated area. All amounts shall be paid within ten (10) days after demand. Additionally, City is authorized to cause any such vehicle parked in other than a designated area to be towed away. Tenant shall hold City harmless from any liability relating thereto and within ten (10) days after demand for payment shall pay the cost of towing and storage if not paid by the employee. 16. ALTERATIONS AND FIXTURES. 16.1 City's Consent to Alterations. Tenant shall not make, or suffer to be made, any alterations (including but not limited to any installations, construction, signage or 627/014084-10014/3231000.4 a10/29/99 -17- • anything attached to or affixed, permanently or temporarily) to the Lease Area, or any part thereof, or the building containing the Lease Area or change the appearance of the building containing the Lease Area without the prior written consent of City. Tenant shall not in any event make any changes to the exterior or structural portions of the Lease Area. 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 City. 16.2 Installation of Fixtures. Tenant agrees to promptly fixturize and stock the Lease Area in a manner comparable to first class airport concessions such as those at Orange County's John Wayne Airport and Tucson International Airport, and as approved by the Contract Officer. Any and all fixtures and appurtenances installed by Tenant shall be new and 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 the termination or earlier termination of this Lease, Tenant shall, at City's sole discretion, either (i) leave any such fixtures (other than trade fixtures) improvements, additions, or modifications in place, free and clear of any monetary encumbrance or other restriction on title, or (ii) as directed by City in writing, and at no cost to City, remove and restore any such improvements, additions, or modifications and restore the Lease Area to its condition existing prior to such improvements, additions, or modifications, ordinary wear and tear excluded. 16.3 Donation of Fixtures. Equipment or Furniture. Any fixtures, equipment or furniture that Tenant purchased or received free of charge from the prior tenant at the Airport, CA One Services, may be used by Tenant if such fixture, equipment or furniture is clean and in good condition. Should Tenant be unable to use any such fixture, equipment or furniture in the Lease Area and be unable to sell it for its fair market value, Tenant agrees to donate such fixture, equipment or furniture to a charitable organization of Tenant's choice located in the City of Palm Springs. 17. RESERVATIONS TO CITY. The Lease Area is accepted by Tenant as is and subject to any and all existing easements and encumbrances. City reserves the right upon ten (10) days' notice to Tenant, to install, lay, construct, maintain, repair, and operate such sanitary sewers, drains, structures, pipelines, and connections; water, oil, and gas pipelines; telephone and telegraph power lines; and the appliances and appurtenances necessary or convenient in connection therewith, in, over, upon, through, across, under and along the Lease Area or any part thereof, and to enter the Lease Area for any and all such purposes. City also reserves the right to grant franchises, easements, rights of way and permits in, over, upon, through, across, under and along any and all portions of the Lease Area. No right reserved by City under this Section shall be so exercised as to interfere unreasonably with Tenant's operations hereunder or to impair the security of any secured creditor of Tenant. City agrees that rights granted to third parties by reason of this Section shall contain provisions that the surface of the land shall be restored as nearly as practicable to its original condition upon the completion of any construction. City further agrees that should the exercise of these rights temporarily interfere with the use of any or all of the Lease Area by Tenant, the Minimum Annual Rent Guarantee shall be reduced in proportion to the total square feet such repairs interfere with the business carried on by Tenant while such repairs are being made. 18. DAMAGE AND DESTRUCTION OF LEASE AREA. In the event of (a) partial 627/014084-0014/3231000.4 a10/29/99 -18- or total destruction of the Lease Area or Terminal during the Lease Term which requires repairs to either the Lease Area or said building, or (b) the Lease Area or Terminal 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 either the Lease Area or Terminal, City shall forthwith make said repairs provided Tenant gives to City 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 reduction of the Minimum Annual Rent Guarantee in proportion to the total square feet such repairs interfere with the business carried on by Tenant while such repairs are being made. If, however, during the last four (4) years of the Lease Term the Lease Area and/or said building are damaged as a result of fire or any other insured casualty to an extent in excess of twenty-five percent (25%) of the then replacement cost, (excluding foundations), City may within thirty (30) days following the date such damage occurs terminate this Lease by written notice to Tenant. If City, however, elects to make said repairs, and provided City uses due diligence in making said repairs, this Lease shall continue in full force and effect, and the Minimum Annual Rent Guarantee shall be proportionately reduced while such repairs are being made as hereinabove provided. The foregoing to the contrary notwithstanding, if the Lease Area or Terminal is damaged or destroyed at any time during the Lease Term to an extent of more than ten percent (10%) of the then replacement cost (excluding foundations) as a result of a casualty not insured against, City may within thirty (30) days following the date of such destruction terminate this Lease upon written notice to Tenant. If City does not elect to terminate because of said uninsured casualty, City shall promptly rebuild and repair the Lease Area and/or Terminal and the Minimum Annual Rent Guarantee shall be proportionately reduced while such repairs are being made as hereinabove provided. If City elects to terminate this Lease, all rentals shall be prorated between City 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 City is obligated to repair or may elect to repair under the terms of this Section 18, Tenant waives any statutory right it may have to cancel this Lease as a result of such destruction. 19. 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 City, terminate all or any existing subleases or subtenancies, or may, at the option of City, operate as an assignment to it of any or all of such subleases or subtenancies. 20. HOURS OF BUSINESS. Tenant shall open for business in the main terminal area of the Terminal no later than as of the Effective Date, and in the new Phase IIA expansion area of the Terminal as of the Date of Beneficial Occupancy. Tenant shall open for business forty-five (45) minutes prior to the first scheduled departure and remain open until the last scheduled departure, seven days a week, 365 days a year, with no closures for any holiday or weekend, subject to any required closures as a result of the occurrence of any condition described at Section 32.1. Tenant acknowledges and agrees that, in addition to other reasons City is requiring Tenant to agree to the provisions of this Section is (a) that Tenant being open for 627/014084-0014/3231000.4 a10/29/99 -19- business in turn helps increase the amount of business being done by other tenants in the Terminal, (b) that a closed store has a detrimental effect on the Terminal and the business of other tenants in the Terminal, (c) that a material consideration to City for entering into this Lease is the right and possibility of receiving Percentage Rent, and Tenant further acknowledges and agrees that the Minimum Annual Rent Guarantee would be set at a higher amount but for the possibility of City receiving Percentage Rent, and (d) a lease where a tenant is paying, or the possibility exists that a tenant will pay, percentage rent enhancing the value of the Terminal. 21. CONDEMNATION. In the event a condemnation or a transfer in lieu thereof results in a taking of any portion of the Lease Area, City may, or in the event a condemnation or a transfer in lieu thereof results in a taking of twenty percent (20%) or more of the Lease Area, 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 City), any amounts necessary to reimburse Tenant for the cost of removing stock and fixtures. If this Lease is not terminated as above provided, City shall use a portion of the condemnation award to restore the Lease Area. 22. HOLDING OVER. Any holding over after the expiration of the Lease Term, without the written consent of City 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 Minimum Annual Rent Guarantee and upon terms and conditions as existed during the last year of the Lease Term. 23. RESERVATION OF RIGHT TO MODIFY TERMINAL. In addition to the rights reserved to City in Section 17 above, City hereby reserves the right (but not the obligation) to renovate, modernize, rehabilitate, expand, reduce, reconfigure, enclose and/or otherwise alter or improve all or any portion of the Terminal, including the Lease Area (collectively "Modifications"), in such manner and at such time or times, throughout the Lease Term, as City may, in its sole and absolute discretion, deem to be in the best interests of the Airport. Such Modifications may include, without limitation, the right to construct new buildings in the Airport for additional retail, office, and/or other uses, to remove, renovate, repair, add to, modernize or otherwise alter the Terminal as other buildings, facilities, structures, malls, walkways, landscaping, parking and common areas or other areas within the Airport. In connection with any and all such Modifications, City may enter the Lease Area to the extent reasonably required by City to pursue and complete such Modifications. In addition, City may temporarily close portions of the parking and common areas and cause temporary obstructions in connection with any Modifications. Tenant recognizes that the Modifications that may be made by City in accordance with the rights reserved in this Section may be substantial and cause disruption or other harm to Tenant's business at the 'Terminal. Tenant agrees that under no circumstances shall the Modifications as to any portion of the Terminal or the construction activity that takes place in the course of making the Modifications, or any aspect thereof, including City's entry into the Lease Area, 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 Minimum Annual Rent Guarantee, additional rental or other charges or sums due under this Lease. 627/014084--0014/3231000.4 a10/29/99 -20- Notwithstanding the foregoing, City agrees that its right to modify the Terminal shall not permit City to materially impair the Lease Area or to permanently deprive Tenant of either of the following: (i) reasonable use and enjoyment of the Lease Area; and (ii) reasonable access to and from the common and parking areas. 24. HAZARDOUS WASTE AND MATERIALS. Tenant shall not engage in any activity on or about the Lease Area or the Terminal 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, rule, regulation, order, consent decree, judgment or common-law doctrine, interpretation thereof, and provisions and conditions of permits, licenses, plans, approvals and other operating authorizations whether currently in force or hereafter enacted relating to health, industrial hygiene or the environmental conditions on, under or about the Lease Area, 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 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) the Federal Water Pollution Control Act, 33 U.S.C. Sections 1317 et seq.; (vi) California Water Code Section 1300 et seq.; and (vii) 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 term "Hazardous Materials" and "Environmental Laws" in its 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 City of the existence of Hazardous Material on the Lease Area and all notices of violation of the Environmental Laws received by Tenant. Tenant's obligations pursuant to this Section V shall be referred to in this Lease as "Environmental Compliance". City represents that, upon execution of this Lease, to its knowledge, there are no Hazardous Materials within the Terminal and that City's Work shall be in compliance with all Environmental Laws upon delivery to Tenant. 25. COORDINATION OF WORK. 25.1 Representative of Tenant. The following principals of Tenant are hereby designated as being the principals and representatives of Tenant authorized to act either together or individually on behalf of Tenant with respect to the work specified herein and make all decisions in connection therewith: Dick Dickson, President Gregg Paradies, Sr. Vice President 627/014084-0014/3231000.4 a10/29/99 -21- It is expressly understood that the experience, knowledge, capability, and reputation of the foregoing principals were a substantial inducement for City to enter into this Lease. Therefore, the foregoing principals shall be responsible during the term of this Lease for directing all activities of Tenant and devoting sufficient time to personally supervise the services hereunder. For purposes of this Lease, the foregoing principals may not be replaced nor may their responsibilities be substantially reduced by Tenant without the express written approval of City. 25.2 Contract Officer. City's Director, Department of Transportation shall from time to time designate a Contract Officer to act as City's contact and liaison with Tenant. It shall be Tenant's responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the services. It is expressly understood that the Contract Officer does not have the authority to make any material decision as it relates to the services contemplated by this Lease. All material decisions must be made and duly authorized by City. 25.3 Independent Contractor. Neither City nor any of its employees shall have any control over the manner, mode, or means by which Tenant or its agents or employees, perform the services required herein, except as otherwise set forth herein. City shall have no voice in the selection, discharge, supervision, or control of Tenant's employees, representatives, or agents, or in fixing their number, compensation, or hours of service. Tenant shall perform all services required herein as an independent contractor of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role. Tenant shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. City shall not in any way or for any purpose become or be deemed to be a partner of Tenant in its business or otherwise or a joint venturer or a member of any joint enterprise with Tenant. 26. INSURANCE AND INDEMNIFICATION. 26.1 Insurance. Not less than five (5) days after the Effective Date of this Lease, Tenant shall submit to City, in a form and content satisfactory to City, certificates indicating compliance with the following policies of insurance, which policies shall be maintained by Tenant during the entire term of this Lease including any extension thereof: 26.1.1 Comprehensive General Liability Insurance. A policy of comprehensive general liability insurance written on a per occurrence basis in an amount not less than either (i) a combined single limit of $1,000,000.00 for bodily injury, death and property damage or (ii) bodily injury limits of $500,000.00 per person, $1,000,000.00 per occurrence and $1,000,000.00 products and completed operations and property damage limits of$500,000.00 per occurrence and $500,000.00 in the aggregate. 26.1.2 Tenant to Provide Personal Pro eeM Insurance. Tenant, at its expense, shall maintain fire and extended coverage insurance, together with insurance against sprinkler and floor damage, vandalism, theft and malicious mischief, on its leasehold improvements and fixtures, alterations, trade fixtures, signs, equipment, personal property and inventory on or upon the Lease Area from loss or damage to the 627/014084--0014/3231000.4 a10/29/99 -22- extent of their full replacement value and shall provide plate glass coverage. 26.1.3 Worker's Compensation Insurance. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both Tenant and City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Tenant in the course of carrying out the work or services contemplated in this Lease. 26.1.4 Automotive Insurance. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of $250,000.00 per person and $500,000.00 per occurrence and property damage liability limits of $100,000.00 per occurrence and $250,000.00 in the aggregate or (ii) combined single limit liability of $500,000.00. Said policy shall include coverage for owned, non-owned, leased and hired cars used in connection with the services performed hereunder. All of the above policies of insurance shall be primary insurance and shall name City and its officers, employees and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against City and 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 City. In the event any of said policies of insurance are cancelled, Tenant shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to City. No work or services under this Lease shall commence until Tenant has provided City with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders are approved by City. Tenant agrees that the provisions of this Section shall not be construed as limiting in any way the extent to which Tenant may be held responsible for the payment of damages to any persons or property resulting from Tenant's activities or the activities of any person or persons for which Tenant is otherwise responsible. In the event Tenant subcontracts any portion of the work required under this Lease, the contract between Tenant and such subcontractor shall require the subcontractor to maintain the same policies of insurance that Tenant is required to maintain pursuant to this Section. 26.2 Sufficiency of Insurer or Surety_. Insurance or bonds required by this Lease 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 City. 26.3 Indemnification. Tenant agrees to indemnify City and 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, including, without limitation, attorneys' fees and costs (herein "claims or liabilities"), that may be asserted or claimed by any person, firm, or entity arising out 627/014084-0014/3231000.4 a10/29/99 -23- of or in connection with the negligent performance of the work, operations, or activities of Tenant and its agents, employees, subcontractors, or invitees, provided for herein, or arising from the negligent acts, or omissions of Tenant hereunder, or arising from Tenant's negligent performance of, or failure to perform any term, provision covenant, or condition of this Lease, whether or not there is concurrent, passive, or active negligence on the part of City, or officers, agents, or employees but excluding such claims or liabilities arising from the sole negligence or willful misconduct of City or its officers, agents, or employees, who are directly responsible to City. 27. DEFAULT BY TENANT: CITY'S REMEDIES. 27.1 Events of Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Tenant: 27.1.1 The failure to make any Annual Rent payment required hereunder at the time or within the times herein specified for such payment, where such failure shall continue for a period of five (5) days after written notice thereof from City to Tenant; 27.1.2 Any willful misstatement by Tenant of Gross Receipts; 27.1.3 Assignment, subletting, or other transfer of this Lease or Tenant's interest herein without the prior written consent of City as set forth in Section 10 above; 27.1.4 The vacation or abandonment of the Lease Area or any portion thereof or the improvements thereon by Tenant, or failure to continuously operate as required by Section 20 herein for a period of five (5) days after written notice thereof from City to Tenant; 27.1.5 The general assignment of Tenant for the benefit of creditors; 27.1.6 The filing of a voluntary petition in bankruptcy or the adjudication of Tenant as a bankrupt or insolvent; 27.1.7 The appointment of a receiver to take possession of all or substantially all of the assets of Tenant located at the Lease Area; 27.1.8 The filing by any creditor of Tenant of an involuntary petition in bankruptcy which is not dismissed within sixty (60) days after filing; 27.1.9 The attachment, execution or any judicial seizure of all or substantially all of the assets of Tenant or the Lease Area when such an attachment, execution, or seizure is not discharged within thirty (30) days; 27.1.10 The failure to observe any covenant or perform any other agreement or obligation herein provided to be observed or performed by Tenant where such failure continues after the time to cure as provided in Section 30.4 has elapsed. 627/014084-0014/3231000.4 a10/29/99 -24- 27.1.11 The failure to operate in accord with operational standards under this Lease, after ten (10) days' notice of such failure from City to Tenant. 27.2 City's Rights Upon an Event of Default: Termination. Upon the occurrence of an Event of Default by Tenant, or at any time thereafter during the continuance of such default, in addition to (and not by way of limitation of) any other remedies City may have under the Lease and applicable law, it shall be City's right, at its option and without further notice or demand of any kind to Tenant or any other person: 27.2.1 To require strict performance of all the terms, covenants, agreements, and obligations hereof as the same shall accrue and have the right of action therefor; or 27.2.2 To declare the term hereof ended and to reenter the Lease Area and take possession thereof and remove all persons therefrom without resort to legal proceedings and without being deemed guilty of any trespass or becoming liable for any loss or damage which may be occasioned thereby, and Tenant shall have no further claim thereon or thereunder; or 27.2.3 To draw from the security deposit amounts sufficient to reimburse City's actual costs, including attorneys' fees, which City reasonably incurs as a result of Tenant's breach, or to reimburse City for Tenant's non-payment of Annual Rent. 27.2.4 Without declaring this Lease ended to reenter the Lease Area and occupy the whole or any part thereof for and on account of Tenant and to collect all payments due and any other charges that may thereafter become payable; or 27.2.5 Even though it may have reentered the Lease Area, to thereafter elect to terminate this Lease and all of the rights of Tenant in or to the Lease Area. Should City reenter the Lease Area under the provisions of subparagraph 27.2.4 above, City shall not be deemed to have terminated this Lease or become liable to Tenant for damages under any of the provisions hereof, by any such reentry, or otherwise to obtain possession of the Lease Area, unless City shall have notified Tenant in writing that it has so elected to terminate this Lease. 27.3 Damages. Should City elect to terminate this Lease under the provisions of Section 27.1 above, City may recover from Tenant as damages: 27.3.1 The worth at the time of award of any unpaid Annual Rent which had been earned at the time of such termination; plus 27.3.2 The worth at the time of award of the amount by which the unpaid Annual Rent which would have been earned after termination until the time of award exceeds the amount of such loss Tenant proves could have been reasonably avoided; plus 27.3.3 The wordy at the time of award of the amount by which the unpaid 627/014084-0014/3231000.4 a10/29/99 -25- Annual Rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; plus 27.3.4 Any other amount necessary to compensate City for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses incurred by City in maintaining or preserving the Lease Area after such default and preparing the Lease Area for a new Tenant, and 27.3.5 At City's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by the laws of the State of California. 28. CITY'S DEFAULT. City shall not be in default unless City fails to perform obligations required of City within a reasonable time, but in no event later than thirty (30) days after written notice by Tenant to City specifying wherein City has failed to perform such obligation; provided, however, that if the nature of City's obligation is such that more than thirty (30) days are required for performance then City shall not be deemed in default if City commences performance within a thirty (30) day period and thereafter diligently prosecutes the same to completion. 29. RECORDS AND REPORTS. 29.1 Records. Tenant shall keep, and require subcontractors to keep, such books and records as shall be necessary to perform the services required by this Lease and enable Contract Officer to evaluate the performance of such services. Contract Officer shall have full and free access to such books and records at all times during normal business hours of City, including the right to inspect, copy, audit and make records and transcripts from such records. 29.2 Ownership of Documents. All reports, records, documents and other materials prepared by Tenant, its employees, subcontractors and agents in the performance of this Lease shall be the property of City. Tenant shall deliver to City, on an ongoing basis throughout the term of this Lease, all reports, records and documents necessary to operate and maintain the Lease Area. Upon the termination or earlier termination of this Lease, Tenant shall immediately turn over to City all such documentation in its possession or to come into its possession in any way related to the operation of the Lease Area. All subcontractors shall provide for assignment to City of any documents or materials prepared by them, and in the event Tenant fails to secure such assignment, Tenant shall indemnify City for all damages resulting therefrom. 627/014084-0014/3231000.4 a10/29/99 -26- 30. ENFORCEMENT OF LEASE. 30.1 California Law. This Lease shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Lease shall be instituted in the Superior Court of the Counties of Orange or Riverside, State of California, or any other appropriate court in such counties, and Tenant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 30.2 Late Payments. Tenant hereby acknowledges that late payment by Tenant to City of rental or other sums due hereunder will cause City 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 and late charges which may be imposed upon City by the terms of any mortgage or deed of trust covering the Lease Area. Accordingly, any payment of any sum to be paid by Tenant not paid when within five (5) days of its due date shall be subject to a five percent (5%) late charge. City and Tenant agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to City for its loss suffered by such late payment by Tenant. 30.3 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 prime 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 rate permitted by law in which case interest shall be at the maximum rate allowed by law at the time the sum became due. 30.4 Disputes. In the event of any dispute arising under this Lease, the injured parry shall notify the injuring parry in writing of its contentions by submitting a claim therefor. The injured parry shall continue performing its obligations hereunder so long as the injuring parry commences to cure such default within ten (10) days of service of such notice and completes the cure of such default within forty-five (45) days after service of the notice, or such longer period as may be permitted by the injured parry; provided that if the default is an immediate danger to the health, safety and general welfare, such immediate action may be necessary. Compliance with the provisions of this Section shall be a condition precedent to termination of this Lease for cause and to any legal action, and such compliance shall not be a waiver of any parry's right to take legal action in the event that the dispute is not cured, provided that nothing herein shall limit City's right to terminate this Lease without cause pursuant to Section 7 above. 30.5 Waiver. No delay or omission in the exercise of any right or remedy by a nondefaulting party on any default 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 parry requiring the parry'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 parry 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. 30.6 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Lease, the rights and remedies of the parties 627/014084-0014/3231000.4 a10/29/99 -27- are cumulative and the exercise by either parry of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other parry. 30.7 Legal Action. In addition to any other rights or remedies, either parry may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Lease, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Lease. 30.8 Attorneys' Fees. If either parry to this Lease is required to initiate or defend or made a party to any action or proceeding in any way connected with this Lease, the prevailing parry in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney's fees. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. 31. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION. 31.1 Non-liabili of City Officers and Employees. No officer or employee of City shall be personally liable to Tenant, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Tenant or to its successor, or for breach of any obligation of the terms of this Lease. 31.2 Conflict of Interest. No officer or employee of City shall have any financial interest, direct or indirect, in this Lease nor shall any such officer or employee participate in any decision relating to the Lease which effects his financial interest or the financial interest of any corporation, partnership or association in which he is, directly or indirectly, interested, in violation of any State statute or regulation. Tenant warrants that it has not paid or given and will not pay or give any third parry any money or other consideration for obtaining this Lease. 31.3 Covenant Against Discrimination. Tenant covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the performance of this Lease. Tenant shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, marital status, national origin, or ancestry; provided however, in no event shall Tenant hire or employ any person to perform the work required under this Lease who is not a citizen of the United States or is properly documented and legally entitled to be employed within the United States. 32. MISCELLANEOUS PROVISIONS. 627/014084-0014/3231000.4 a10/29/99 -28- 32.1 Force Majeure. If by reason of labor disputes, strikes, lockouts, riot, war, inability to obtain labor or materials, earthquake, fire or other action of the elements, governmental restrictions, accidents, appropriations or other actions beyond Tenant's control, Tenant is unable to perform in whole or in part its obligations as set forth in this Lease, including, but not limited to, commencement of concession operations on the Lease Area, then such inability to perform shall not be deemed a breach and Tenant shall not be liable to City for any loss, injury, delay or damage suffered or incurred by City due to the above causes. 32.2 Survival. Notwithstanding the termination or early termination of this Lease, the representations, warranties and indemnifications made by Tenant for the benefit of City shall survive such termination and inure to the benefit of City, its agents, officers, successors, and assigns. 32.3 Notice. Any notice, demand, request, document, consent, approval, or communication either parry desires or is required to give to the other parry or any other person shall be in writing and either served personally or sent by prepaid, first-class mail. Notices shall be provided to each parry at the following addresses: City: City of Palm Springs Attn: City Manager P.O. Box 2743 Palm Springs, CA 92663 With copy to: Rutan& Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626-1998 Attn: David J. Aleshire, Esq. Tenant: The Paradies Shops 5950 Fulton Industrial Blvd. S.W. Atlanta, Georgia 30336 Attn: Dick Dickson, President Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated at the time personally delivered or in seventy-two (72) hours from the time of mailing if mailed as provided in this Section. 32.4 Marginal Captions. The various headings and numbers herein and the grouping of the provisions of this Lease into separate articles and paragraphs are for the purpose of convenience only and shall not be considered a part hereof. 32.5 Time. Time is of the essence of this Lease. 32.6 Consents, AWrovals, and Agreements of City. All consents and approvals to be given by City, unless specifically stated herein to the contrary, shall be at City's sole and absolute discretion and no covenants are to be implied in relation thereto, either in fact or in law. The agreements and obligations of City are specifically stated in this Lease, and no further 627/014084--0014/3231000.4 a10/29/99 -29- agreements, covenants, promises, or obligations are to be implied, and Tenant expressly waives any such implied agreements, covenants, promises or obligations. 32.7 Interpretation. The terms of this Lease shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Lease or any other rule of construction which might otherwise apply. 32.8 Intesration: Amendment. It is understood that there are no oral agreements between the parties hereto affecting this Lease and this Lease supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings, between the parties. This Lease may be amended at any time by the mutual consent of the parties by an instrument in writing. 32.9 Severability. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Lease shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Lease which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder unless the invalid provision is so material that its invalidity deprives either party of the basic benefit of their bargain or renders this Lease meaningless. 32.10 Corporate Authority. The persons executing this Lease on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Lease on behalf of said party, (iii) by so executing this Lease, such party is formally bound to the provisions of this Lease, and (iv) the entering into this Lease does not violate any provision of any other agreement to which said party is bound. 627/014084-0014/3231000.4 a10/29/99 -30- IN WITNESS WHEREOF, the parties have executed and entered into this Lease as of the Effective Date. "City" THE CITY OF PALM SPRINGS a municipal corporation ATTEST: City Clerk City Manager APPROVED AS TO FORM: APPROVED BY THE CUY COUNCK By W. No, (off/o /D d6—� City orney "Tenant" PARADIES SHOPS, LLC, a Georgia limited liability company a subsidiary of THE PARADIES SHOPS, a Georgia Corporation By: Print name a title a By: "�I Print name and title (Corporations require two signatures; one from each of the following: 1. Chairman of Board, President, any Vice President;AND 2. Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, or Chief Financial Officer.) [END OF SIGNATURES] 627/014084-0014/3231000.4 a10/29/99 -31- 9 GATE 14 GATE 10 10 GATE 8 ( SPECIALTY GIFT(580 SO lT RESTAURANT /BAR(1,900 SF) ( COCKTAIL LOUNGE(450 SO 12 OUTSIDE SEATING(700 SO GATE 9 . o e (3 FULL SERVICE RESTAURANT(3,137 SO 13 COFFEE CART(154 SO GATE 7 GATE 6 ® SPECIALTY CART(66 SO 14 NEWS /BOOKS/SUNDRIES (175 SF) �5 SPECIALTY CART(66 SF) 15 BUSINESS CENTER(461 SF) —oo oo © OUTSIDE SEATING(700 SF) 16 COFFEE STAND (400 SF) 00 oG GATE 5 0 GATE 4 01 SPECIALTY Elf 1(850 M l� AVAILABLE �8 RESORT WEAR/GOLF SHOP(1,050 SF) 18 SPECIALTY GIFT(400 SF) • �9 NEWS /BOOKS/SUNDRIES(400 SO 10 8 AVAILABLE (400 SO . �'� 11 7 12 6 — 18 16 GATE 3 ` f GATE 2 4 17 GATES 18A&18B 5 GATE 14 GATE 16A GATE 16B GATES 19A&19B GATE 12 GATE 1 GATES 17A 817E GATE 15B GATE 15A SECURITY CHECKPOINT13 • QD Ilk oO �/ O x 03 1 2 3 14 15 � D • EXHIBIT "A" CONTINUED O STORAGE ROOM 1 - THE PARAOIES SHOPS 02 STORAGE ROOM 2 -ANTON AIREOOD �3 STORAGE ROOM 3 - AVAILABLE �CO Q> -- - - - - - --- - --- -- ROOM 494 484 370FR SQ.FT. SQ.FT. SQ.FT. `\ STORAGE 1 STORAGE 2 AVAIL. TUG DRIVE , EXHIBIT "B" u � - o-=----- --- --- o. 0 0 IpIMW i �nI i i z v o° °o o °o o ❑ °o °o o ❑ o ❑ O O C AVAILABLE—400 SQ.FT EXHIBIT "B" PAGE 1-A STORE #2 J COCKTAIL LOUNGE - 450 SQ.FT. r � J u ECURITY C ECKPOINT NEWS &GIFfS �O o� EXHIBIT "B" PAGE 1-A STORE #14 NO ACCESS OPEN TO LOBBY RETURN AIR SECURITY CHECKPOINT NEWS &GIFTS 00 0 Oi0 G� • � o EXHIBIT "B" PAGE 1-B r RESTAURANTFULL SERVICE SECURITY i " CHECKPOINT NEWS GIFFS I' EXHIBIT "B" PAGE 1-B STORE #18 NEWS & GIFTS -400 SQ.FT c AVAILABLE SPACE -565 SQ.FT V c 0�0 PLAY STRUCTURE GATE 1 C 0 PUTTING GREEN EXHIBIT "B" PAGE 1-C .J\\ STORE #9 I -, CK I � Il O O O 3 I I I � 3 I rJ o o m o 0000 ❑ 0000 � I OI 0 e o DOM 0 0000 O r I I O ® I I ti I 9 e ! l 0 0 0 I I NEWS & GIFTS -400 SQ.FT EXHIBIT "B" PAGE 1-C STORE 11 I \J i0 m 41 0 0 0 I a e Y �I I rJ 0000 ❑ o000 � I e e m �0000 ❑ o00o O 4f s 91 e ! � 0 0 0 - o m I c� to RESTAURANT/ BAR- 1,900 SQ.FT 5� O ❑❑ o m m EXHIBIT "131% 1 s SPECIALTY :0 SQ.FT SECURITY CHECKPOINT EXHIBIT "B" PAGE 2-A L11 STORE #16 COFFEE STAND —400 SQ.FT. 0Qo PLAY STRUCTURE GATE1 R o 0 PUTTING GREEN 01 a � EXHIBIT "B" PAGE 2-B STORES 7 & 8 4 I i _Ja1 _____ ____I�o_� 5� 0 0 � ® ' 9 I I I C.L @ � e e a m m pppp p pppp Q IUI O i ° pppp ❑ pppp 1 � I m I � 0 0 0 I I c� o m m RETAIL SHOPS — 1,900 SQ.FT o II II EXHIBIT "B" PAGE 2-B STORE #13 0 o O 0 o a COFFEE CART- 154 SQ.FT 1 EXHIBIT "C" OPTION AGREEMENT This OPTION AGREEMENT ("Option") is made November 1, 1999, by and between the City of Palm Springs ("City"), and PARADIES SHOPS, LLC, a Georgia limited liability company a subsidiary of THE PARADIES SHOPS, a Georgia Corporation ("Optionee"). Optionee desires to obtain an option to lease certain real property described as the Lease Area in the agreement between the Optionee and City (hereinafter referred to as "Lease") attached hereto as Attachment I and made a part hereof, for the purposes and uses provided in the Lease; City is willing to enter into an option agreement to lease said real property for said purposes and uses; NOW, THEREFORE City and Optionee agree as follows: 1. DEFINITIONS. The following words in this Option Agreement have the significance attached to them in this clause unless otherwise apparent from context: "Airport" means Palm Springs International Airport. "Aviation Director" means the Aviation Director of the City of Palm Springs, or upon written notice to Optionee, Manager's designee. "Design Review Board" means the Airport Design Review Board to be created by the Aviation Director for the purpose of reviewing and approving the development plans proposed by Optionee. "Terminal" means the Palm Springs International Airport" commercial passenger terminal. 2. OPTION. City grants Optionee an option to lease said Lease Area for the term and in accordance with the covenants and conditions set forth in the Lease. 3. CONSIDERATION. As consideration for the Option granted herein, Optionee shall assign any and all ownership interests of Optionee in and to those plans, architectural and engineering drawings, specifications or models prepared during the option period to City. Additional copies of any surveys, environmental reports or research relating to the development of the Lease Area obtained by Optionee during the option period shall be delivered to City. 4. TERM. The term of this Option shall commence on the date first written above, and continue in effect until August 1, 2000. This Option may be extended under the following circumstances: A. If Optionee is delayed in fulfilling the requirements of this option through no fault of its own or through no fault of its agents or employees, this option may be extended without additional cost to Optionee for up to 90 days by the Aviation 627/014084-0014/3231000.4 a10/29/99 -1- Director. Any extension for more than 90 days must be approved by City. Neither Aviation Director nor City, however, shall have any obligation to permit and/or approve any such extension. OR B. Optionee may extend the term of this option for up to 60 days if Optionee is delayed in fulfilling the requirements of this option and each of the following acts are accomplished by Optionee prior to the granting of such an extension: 1. Optionee's "preliminary plans", as defined in the Section in this Option Agreement entitled "CONDITIONS" have been approved in writing by the Design Review Board. 2. At least fifteen clays prior to the expiration of the option period, Optionee has submitted a letter to the Aviation Director clearly stating that Optionee is requesting extension of the option period. 3. At least fifteen days prior to expiration of the option period, Optionee has submitted a cashier's check to the Aviation Director in the amount of Ten Thousand Dollars ($10,000) for each additional 30-day period for which the option is to be extended. This amount is in addition to the amount required in the Section in this Option Agreement entitled "CONSIDERATION". Whether or not Optionee exercises this option in accordance with the terms hereof, said payments for each such thirty day period, if any, shall be retained by City in consideration for the granting of each such extension. 6. CONDITIONS. This option may not be exercised until the following terms and conditions have been met: A. Preliminary Plans. Within forty-five (45) days after the date of execution of this Agreement, Optionee shall submit to the Design Review Board "preliminary plans" for development and use of said Lease Area in accordance with the requirements of the Lease. Preliminary plans shall be prepared by an architect licensed in the State of California and shall consist of: 1. A detailed site plan of the Lease Area showing all improvements planned for the site. This plan shall show any existing and proposed utility lines affecting the Lease Area, location of all new utilities, ingress and egress to and from the Lease Area. 2. Floor plans, elevations, and sections of all improvements; 3. Structural, mechanical and lighting systems; 4. Complete outline: specifications to cover all phases of the work; 627/014084-0014/3231000.4 a10/29/99 -2- 5. A detailed cost estimate of all improvements; 6. Color and interior decorating scheme; 7. A detailed estimate of the construction schedule; and The design Review Board will approve, rule, reject, or comment on the preliminary plans within twenty (20) days of the day the preliminary plans are submitted. B. Construction Contract Documents. Within sixty (60) days after the date of Design Review Board approval of preliminary plans, Optionee shall submit to the Design Review Board "construction contract documents" and architect's costs estimates for development of the Lease Area. "Construction contract documents" shall consist of the following: 1. Complete architectural and engineering working drawings; 2. Complete specifications; 3. Construction contract form; and 4. Construction schedule. The Design Review Board will approve, rule, reject or comment on the construction contract documents within fifteen (15) days of the day the construction contract documents were submitted. C. At the same time construction contract documents are submitted in accordance with "B" above, Optionee will submit construction contract documents to Palm Springs Building Division for plan check and pay such fees as required. D. Within fifteen (15) days after review of construction contract documents as called for in "B" and "C" above, Optionee shall have completed all corrections and adjustments in construction contract documents as required by the Design Review Board, Building Division, and other concerned agencies, and shall have obtained Design Review Board approval and appropriate permits for construction. E. Optionee has submitted the following to the Director of Aviation: 1. Satisfactory evidence of Optionee's ability to finance the cost of the development planned for said Lease Area in accordance with the requirements of the Lease. If Optionee Plans to hypothecate the leasehold as security for a loan, Optionee shall submit all documents proposed in the loan transaction along with a request and processing fees for City consent to the proposed hypothecation. Such hypothecation documents shall be submitted in accordance with the Section in the Lease entitled "ASSIGNMENT, SUBLETTING, AND ENCUMBERING". 2. The appropriate security deposit as required in the Section in the Lease 627/014084--0014/3231000.4 a10/29/99 -3- entitled "SECURITY DEPOSIT". 3. Assurance of construction completion in accordance with the Section in the Lease entitled "TENANT'S ASSURANCE OF CONSTRUCTION COMPLETION", or a Fetter of intent to bond that is sufficient to assure City that a bond is forthcoming. 4. Evidence of insurance coverage which fully complies with the Section in the Lease entitled "INSURANCE". 5. Evidence that adequate licenses, for operation from the Lease Area have been obtained. 7. REVIEW BY CITY. Optionee hereby acknowledges that one of the purposes of this option is to afford Optionee and City the opportunity to determine whether or not Optionee is able to meet the various conditions of the Option Agreement and obtain the required approvals as set forth in this Option Agreement. Several of those conditions involve obtaining review and approval from officers, employees or agents of City. Each of those reviews shall be conducted in an independent manner and nothing contained herein shall be deemed to limit the jurisdiction or authority otherwise possessed by said officers, employees or agents in the conduct of such review. Nothing contained in this Option Agreement shall be deemed to imply that said approval shall be forthcoming, and the failure to issue any such approval or permit by any officer, employee or agent of City shall not be deemed in any manner a breach of this option, nor shall any such denial give rise to any claim, liability, obligation, or cause of action with respect to this option or the attached Lease. City agrees to consent to any application by Optionee with respect to any permits or approvals related to activities or improvements approved by City in accordance with the Option Agreement which may be required to any governmental or other regulatory agencies aside from City. No permit approval or consent given by City or its officers, employees or agents, acting in its/their governmental capacity, shall affect or limit Optionee's obligations under this Option Agreement or the Lease nor shall any approvals or consents given under this Option Agreement by City, as a part to this Option Agreement, be deemed approval as to compliance or conformance with applicable governmental codes, laws, rules and/or regulations. 8. OPTIONEE'S RIGHT TO ENTER LEASE AREA. Subject to prior written approval and conditions as may be specified by the Aviation Director, Optionee and its authorized representatives shall have the right to enter upon, to pass and to repass over and along said Lease Area, and to do the surveying and testing necessary for Optionee to prepare the hereinabove- described preliminary plans, and construction contract documents. Optionee hereby agrees to indemnify City and hold City, its officers and, employees harmless from any and all loss, claims, liability or demands arising out of or incurred by reason of such investigation. Whether or not this Option terminates or expires, Optionee agrees to repair any and all damages caused to the Lease Area by reason of any such investigation or investigations. 627/014084-.0014/3231000.4 a10/29/99 -4- Optionee shall maintain the following described liability insurance acceptable to the Aviation Director in full force and effect commencing on or before the date Optionee first enters upon the Lease Area pursuant to this Option Agreement and thereafter throughout the term of the option granted hereby and any extensions thereof. Said policy of insurance maintained by Optionee shall provide the following limits and coverages: CASUALTY INSURANCE Coverage Minimum Limits Comprehensive General Liability $1,000,000 Each liability insurance policy required by this Option Agreement shall contain the following three clauses: A. "This insurance shall not be cancelled, limited in scope of coverage or non- renewed until after 30 days written notice has been given to the City of Palm Springs, 3200 Tahquitz Canyon Way, Palm Springs, CA 92263 or to such other address as may from time to time be specified by City to Optionee." Optionee agrees to deposit with Aviation Director on or before the date that Optionee first enters upon the Lease Area pursuant to this Option Agreement or otherwise, certificates of insurance necessary to satisfy Real Estate Manager that the insurance provisions of this Section have been complied with, and to keep such insurance in effect and the certificates therefore on deposit with Aviation Director during the entire term of the Option granted hereby and any extensions thereof. The procuring of such required policy or policies of insurance shall not be construed to limit Optionee's liability hereunder to fulfill the hold harmless provisions and requirements of this Option Agreement. 9. ASSIGNMENT. This Option Agreement shall not be sold, assigned, or otherwise transferred without the prior written consent of City, which consent may be withheld by City in City's sole and absolute discretion, it being understood and agreed that Optionee was selected by City because of Optionee's unique characteristics and abilities. Failure to obtain City's required written consent shall render said sale, assignment, or transfer void and shall constitute a material default by Optionee under this Option Agreement which shall entitle City to terminate this Option Agreement by giving written notice of such termination to Optionee. If Optionee hereunder is a corporation or an unincorporated association or partnership, the sale, transfer, or assignment of any stock or interest in said corporation, association, or partnership in the aggregate exceeding twenty-five percent (25%) shall be deemed an assignment within the meaning of this clause. 10. EXERCISE OF OPTION. At any time during the option term that Optionee shall have performed all conditions as set forth in the Section entitled "CONDITIONS" of this Option Agreement to the satisfaction of City, Optionee may exercise this option by giving City written 627/014084--0014/3231000.4 a10/29/99 -5- notice of election to do so, accompanied by properly executed copies of the Lease in triplicate. 11. EXECUTION OF LEASE. Upon proper exercise of the option to lease by Optionee, as defined in this Option Agreement, City shall execute the Lease within ten (10) days. 12. LEASE DATE. It is understood and agreed that the date of the Lease shall be the date of execution of the Lease by City. 13. TERMINATION. Failure of Optionee to meet the terms and conditions of this Option Agreement fully and satisfactorily within the time limits stated shall terminate Optionee's rights hereunder, subject to ten (10) days' notice from City to Optionee of such failure and Optionee's failure to cure within such time, notwithstanding the fact that City may choose to negotiate a lease with Optionee within a reasonable time after the expiration of this Option Agreement. Without limiting the preceding paragraph, in the event of any such termination, within five (5) days of City's request, Optionee shall execute, acknowledge and deliver to City for recording, a quitclaim deed or other document reasonably requested by City's counsel or a reputable title company, to remove any cloud on title created by this Option Agreement. 14. DISCLAIMER OF REPRESENTATIONS OR WARRANTIES A. Optionee agrees that City has made no representations, warranties or agreements as to any matters concerning the Lease Area, including, but without being limited to, the land, marketability of title, topography, climate, air, water, water rights, utilities, present or future zoning, soil, subsoil, ;hazardous substances, waste or materials, the purposes for which the property is suited, drainage, access to public roads, proposed routs of roads or extensions thereof or the availability of governmental permits or approvals of any kind. Optionee represents and warrants to City that it and its representatives and employees have made or will made their own independent inspection and investigation of such property. B. Optionee acknowledges that City has made no representations or warranties regarding the nature of its interest in the Lease Area. Regardless of the nature of such interest, Optionee agrees to accept, without warranty, only such right, title and interest, if any, as City may have in and to such real property. C. Optionee acknowledges that any documents, studies, reports, surveys, tests, preliminary title reports or other information provided to Optionee by City or City's agents or employees, with respect to the Lease Area have been provided for disclosure and information purposes only and that City does not represent or warrant the accuracy or completeness of any such item. 15. ATTORNEY'S FEES. In the event of any dispute between the parties hereto concerning this Option Agreement, the Lease Area or the Lease, the prevailing party in such dispute shall be permitted to recover from the losing party its reasonable attorney's fees and costs of suit. 16. GENERAL PROVISIONS 627/014084-0014/3231000.4 a10/29/99 -6- A. Integration. This instrument contains the entire agreement between the parties relating to the option granted by this Option Agreement and all negotiations and agreements between the parties hereto or their agents with respect to this transaction are merged herein. Any oral representations, modifications or waivers concerning this instrument shall be of no force and effect except in a subsequent instrument made in writing, and signed by both parties. B. Time. Time is of the essence in the performance of the parties' respective obligations herein contained. C. Heirs. Successors and Assigns. Subject to the restrictions against sale, assignment or other transfer above, this Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors and assigns. D. Public Records Act. Any and all written information submitted to and/or obtained by City from Optionee or any other person or entity having to do with or related to this Option Agreement or Lease Area, either pursuant to this Option Agreement or otherwise, at the option of City, may be treated as a public record open to inspection by the public pursuant to the California Records Act (Government Code ❑ 6250, etc.) as now in force or hereafter amended, or any Act in substitution thereof, or ottherwise made available to the public and Optionee hereby waives, for itself, its agents, employees, subtenants and any person claiming by, through or under Optionee, any right or claim that any such information is not a public record or that the same is a trade secret or confidential information and hereby agrees to indemnity and hold City harmless from any and all claims, dlemands, liabilities and/or obligations arising out of or resulting from a claim by Optionee or any third party that such information is a trade secret, or confidential, or not subject to inspection by the public, including without limitation reasonable attorney's fees and costs. 17. NOTICES. Any notice, tender, or delivery to be given in accordance with this Option Agreement by either party to the other shall be sent through the United States Mail in the State of California duly registered or certified, return receipt requested, with postage prepaid to the addresses set forth below. If any notice is sent by registered or certified mail, as aforesaid, the said same shall be deemed to have been served or delivered twenty-four (24) hours after mailing thereof as above provided. Notwithstanding the above, City may also provide notices to Optionee by personal delivery or regullar mail and any such notice so given shall be deemed to have been given upon receipt. To: City: City of Palm Springs Attn: City Manager P.O. Box 2743 Pahn Springs, CA 92663 With copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626-1998 Attn: David J. Aleshire, Esq. 627/014084-0014/3231000.4 a10/29/99 -7- • TO: Optionee The Paradies Shops 5950 Fulton Industrial Blvd. S.W. Atlanta, Georgia 30336 Attn: Dick Dickson, President Either parry hereto may from time to time, by written notice to the other, designate a different address which shall be substituted for the one above specified. 627/014084-0014/3231000.4 a10/29/99 -8- IN WITNESS WHEREOF, the parties have executed this Option the day and year first above written. "City" THE CITY OF PALM SPRINGS a municipal corporation ATTEST: c, Y Ctty Clerk �City Manager APPROVED AS TO FORM APPROVED BY THE CITY COUNCIL BYES. No. (0 5 M-a 0—� City-Attorney "Optionee" PARADIES SHOPS, LLC, a Georgia limited liability company a subsidiary of THE PARADIES SHOPS, a Georgia Corporation By: zo�� � Print name and titl A-1-L BY: ( j"�� Print name and title (Corporations require two signatures; one from each of the following: 1. Chairman of Board, President, any Vice President;AND 2. Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, or Chief Financial Officer.) 627/014084-0014/3231000.4 a10/29/99 -9- EXHIBIT "D" FAA GRANT AGREEMENT ASSURANCES 1. NONDISCRIMINATION A. Tenant, for itself, its personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree that: 1. No person on the grounds of race, color, or national origin shall be excluded from participation, denied the benefits of, or be otherwise subjected to discrimination in the use of the Lease Area, 2. In the construction of any improvements on, over, or under the Lease Area and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination, 3. Tenant shall use the Lease Area in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations ("CFR"), Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-assisted programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. 4. This agreement is subject to the requirements of the U.S. Department of Transportation's regulations, 49 CFR part 23, subpart F. Tenant agrees that it will not discriminate against any business owner because of the owner's race, color, national origin or sex in connection with the award or performance of any concession agreement covered by 49 CFR part 23, subpart F. 5. Tenant agrees to include the statements this Section LA in any subsequent concession agreements that it enters and cause those businesses to similarly include the statements in this Section LA in further agreements. B. In the event of breach of any of the above nondiscrimination covenants, City shall have the right to terminate the Lease and to re-enter and repossess said land and the facilities thereon, and hold the same as if said Lease had never been made or issued. This provision does not become effective until the procedures of 49 CFR Part 21 are followed and completed, including expiration of appeal rights. C. Tenant shall furnish its accommodations and/or services on a fair, equal and hot unjustly discriminatory basis to all users thereof and it shall charge fair, reasonable and not unjustly discriminatory prices for each unit or service. D. Noncompliance with Provision C above shall constitute a material breach thereof and in the event of such noncompliance City shall have the right to terminate this Lease and the 627/014084-0014/3231000.4 a10/29/99 -1- estate hereby created without liability therefore or at the election of City or the United States either or both said Governments shall have the right to judicially enforce Provisions A, B, and C. E. Tenant agrees that it shall insert the above four Provisions in any lease (agreement, contract, etc..) by which said Tenant grants a right or privilege to any person, firm or corporation to render accommodations and/or service to the public on the Leased Area. 2. DEVELOPMENT OF LANDING AREA. City reserves the right to further develop or improve the landing area of the Airport as it sees fit, regardless of the desires or view of Tenant, and without interference or hindrance. 3. MAINTENANCE OF LANDING AREA. City reserves the right, but shall not be obligated to Tenant, to maintain and keep in repair the landing area of the Airport and all publicly owned facilities of the Airport, together with the right to direct and control all activities of Tenant in this regard. 4. LEASE SUBORDINATE TO AGREEMENT WITH U.S.A. This Lease shall be subordinate to the provisions and requirements of any existing or future agreement between City and the United States or any lawful requirement of the United States relative to the development, operation, or maintenance of the Airport. 5. USE TO CONFORM WITH FEDERAL AVIATION REGULATIONS. Tenant agrees that Tenant's use of the Lease Area, including all construction thereon, shall conform to applicable Federal Aviation Regulations. Tenant agrees to comply with, the notification and review requirements covered in Part 77 of the Federal Aviation Regulations (as same may be amended from time to time or such other regulation replacing Part 77 as may be adopted by Federal authority) prior to the construction of the improvements described herein and prior to the construction of any future structure or building upon the Lease Area or in the event of any planned modification or alteration of any present or future building or structure situated on the Lease Area. 6. NONEXCLUSIVE RIGHT. It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308a of the Federal Aviation Act of 1958 (49 U.S.C. 1349). 7. RESERVATION OF AVIATION EASEMENT. City hereby reserves for itself, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the air space above the surface of the Lease Area, together with the right to cause in said air space such noise as may be inherent in the operation of aircraft now known or hereafter used for navigation of, or flight in the air, using said air space, or landing at, taking off from, or operating at the Airport. 8. HEIGHT LIMITATION OF STRUCTURES. Tenant by accepting this Lease expressly agrees for itself, its successors and assigns that it will not erect nor permit the erection of any structure or object nor permit the growth of any tree on the land leased hereunder which would penetrate the imaginary surfaces as defined in Part 77 of the Federal Aviation Regulations (as same may be amended from time to time or as such regulation replacing Part 77 may be adopted 627/014084-0014/3231000.4 a10/29/99 -2- 0 • by federal authority) or such other lesser altitude as may be required by City. In the event the aforesaid covenants are breached, City reserves the right to enter upon the land leased hereunder and to remove the offending structure or object and cut the offending tree, all of which shall be at the expense of Tenant. 9. NONINTERFERENCE WITH AIRCRAFT. Tenant by accepting this Lease agrees for itself, its successors and assigns that it will not make use of the Lease Area in any manner which might interfere with the landing and taking off of aircraft from the Airport or otherwise constitute a hazard. In the event the aforesaid covenant is breached, City reserves the right to enter upon the premises hereby leased and cause the abatement of such interference at the expense of Tenant. 10. WAR OR NATIONAL EMERGENCY. This Lease and all the provisions hereof shall be subject to whatever right the United States Government now has or in the future may have or acquire, affecting the control, opera*ion, regulation and taking over of Airport or the exclusive or nonexclusive use of Airport by the United States during the time of war or national emergency. 11. DISADVANTAGED BUSINESS ENTERPRISE POLICY AND OBLIGATION. It is the policy of the Department of Transportation that disadvantaged business enterprises (DBE) as defined in 49 CFR Part 23 shall have the maximum opportunity to participate in the performance of contracts financed in whole or in part with Federal funds under this Lease. Consequently the DBE requirements of 49 CFR Part 23 apply to this Lease. The recipient or its contractor agrees to ensure that disadvantaged business enterprises as defined in 49 CFR Part 23 have the maximum opportunity to participate in the performance of contracts and subcontracts financed in whole or in part with Federal funds provided under this Lease. In this regard all recipients or contractors shall take all necessary and reasonable steps in accordance with 49 CFR Part 23 to ensure that disadvantaged business enterprises have the maximum opportunity to compete for and perform contracts. Recipients and their contractors shall not discriminate on the basis of race, color, national origin, or sex in the award and performance of DOT-assisted contracts. 12. AFFIRMATIVE ACTION REQUIREMENTS. Tenant assures that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to insure that no person shall, on the grounds of race, creed, color, national origin, or sex, be excluded from participating in any employment activities covered in 14 CFR Part 152, Subpart E. Tenant assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. Tenant assures that it will require that its covered sub-organizations provide assurances to Tenant that they similarly will undertake affirmative action programs and that they will require assurances from their sub-organizations, as required by 14 CFR Part 152, Subpart E, to the same effect. 627/014084-0014/3231000.4 a10/29/99 -3-