HomeMy WebLinkAbout2012-0412 Study Session - Palm Springs Art Museum - Palm Desert (The Galen) Th,,,,,,
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NOTICE OF STUDY SESSION
OF THE
PALM DESERT CITY COUNCIL
NOTICE IS HEREBY GIVEN that the Palm Desert City Council will convene
Thursday, April 12, 2012, at 2:00 p.m. in the Administrative Conference Room of the
Palm Desert Civic Center, 73-510 Fred Waring Drive, Palm Desert, California 92260, for
the purpose of conducting a Study Session. Said Study Session will be held in order to
discuss Palm Springs Art Museum-Palm Desert (The Galen).
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R LLE D. ' ASSE , CITY CLERK)
CITY OF PALM DESERT, CALIFORNIA
April 6, 2012
NO ACTIONS WILL BE TAKEN AT THE STUDY SESSION.
PURPOSE OF THE STUDY SESSION IS INFORMATION ONLY.
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CITY OF PALM DESERT
i1 CITY MANAGER'S OFFICE
t, INTEROFFICE MEMORANDUM
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To: John M. Wohlmuth, City Manager
From: Stephen Y. Aryan, Risk Manager
Date: March 27, 2012
Subject: Palm Springs Art Museum Lease Analysis
On July 1, 2010, the City entered into a lease agreement with the Palm Springs Art Museum
(the Museum) concerning the former Visitor Center located at 72-567 Highway 111. The
following is a breakdown of the fiscal impact associated with this lease.
The initial term of the Lease is for five (5) years, commencing November 1, 2010, and ending
five years thereafter. The Museum has the option to extend the lease term for five (5)
successive five (5) year periods, with the same terms and conditions.
There are numerous variables outlined below that would make it difficult to place an exact
fiscal impact associated with this lease agreement. Staff understands that there will be a
maximum of twenty sculptures in the non-exclusive use area at any particular time. Therefore,
an approximate estimate of the "Lease Year Two" (November 2011-November 2012)
maximum cost would be $176,000, plus the capital improvement project to install the sculpture
bases/lighting system and any sculpture, building, and landscape maintenance costs.
"Lease Year Three" (November 2012-November 2013) and "Lease Year Four" (November
2013-November 2014) maximum costs would be $78,000 and $83,000 respectively. From
"Lease Year Five" (November 2014-November 2015) until the contract conclusion (potentially
25 years) the reoccurring costs would be approximately $20,000 for the anticipated insurance
premium and potentially $100,000 per year to remove and install five sculptures.
The removal and installation of up to five sculptures per year is at the Museum's discretion.
They may elect not to do so; however, staff's estimate is based on such action occurring to
realize what the maximum potential cost may be under this lease agreement. Please note that
staff will require that the Museum provide receipts for the installation/removal before final
payment is made.
These reoccurring costs do not take into account any related maintenance costs. These costs
are also a maximum estimate and may not reflect actual expenditures. Again, it was difficult to
provide a more accurate number, as variables exist.
The Museum and City staff will be able to provide more information on this lease agreement
and answer any questions at the upcoming City Council Study Session on April 12, 2012.
Please contact me should you have any comments or questions.
ESTIMATED ANNUAL MAXIMUM LEASE COSTS (ACTUAL COSTS MAY BE LOWER)
"LEASE YEAR TWO" (November 2011-November 2012) COST
Installation of ten sculptures @ up to $10K $100,000
Honoraria for ten pieces $26,000
Insurance for ten pieces $10,000
Repayment for HVAC/Fire Suppression Upgrades $40,000
Ongoing Maintenance Costs TBD
Installation of Sculpture Bases and Lighting System TBD
TOTAL $176,000
"LEASE YEAR THREE" ( November 2012-November 2013) COST
Installation of five sculptures @ up to $10K $50,000
Honoraria for five pieces $13,000
Insurance for fifteen pieces $15,000
Ongoing Maintenance Costs TBD
TOTAL $78,000
"LEASE YEAR FOUR" ( November 2013-November 2014) COST
Installation of five sculptures @ up to $10K $50,000
Honoraria for five pieces $13,000
Insurance for twenty pieces $20,000
Ongoing Maintenance Costs TBD
TOTAL $83,000
"LEASE YEAR FIVE" ( Nov. 2014- Nov. 2015)-CONCLUSION COST
Installation/removal of five sculptures @ up to $10K for each task $100,000
Insurance for twenty pieces $20,000
Ongoing Maintenance Costs TBD
TOTAL $120,000
CITY RESPONSIBILITIES
Lease Item Cost (if applicable) Comments
Section
2.3 Sculptures Up to $10,000 per The City is responsible for the cost to transport,
(page 3) installation or removal. install, and remove sculptures, at an amount up
to $10,000 p/installation or removal, as some
pieces may cost less to install. At year one a
maximum of 10 or less sculptures installed and
subsequent years are 5 or less sculptures.
2.3 Sculptures TBD - Based on Regarding sculptures, City is responsible for
(page 3) specifications provided paying installation costs of sculpture
and is expected to be a bases/foundations, lighting, cleaning & ongoing
significant expenditure. maintenance.
2.3 Honorarium $2,575 per piece @ This one time honorarium increases by $50 on
(page 3) 20 pieces the anniversary of the Commencement Date
each year. So subsequent years will have
slightly higher costs. The lease calls for an initial
maximum of 20 honoraria.
CITY RESPONSIBILITIES (continued)
Lease Item Cost (if applicable) Comments
Section
2.3 Landscape n/a-Already incurred City is still responsible for all landscape
(page 3) Maintenance cost maintenance, landscaping, and other
maintenance, cleaning/trash removal,
irrigation and other related expenses to
maintain the Gardens and Carriage Lane
(current level of maintenance).
5.2 Lessor's Up to $40,000 plus The City is responsible for paying to retrofit the
(page 7) Obligation future maintenance fire protection system and HVAC to meet the
responsibilities. Museum's standards at a cost of up to
$20,000 each. The City is responsible
maintain and replace if needed, the roof, roof
drainage, solar, and the HVAC system, fire
protection systems, exterior painting, and
exterior roadways, parkways, pathways, and
sidewalks.
5.4 Ownership n/a Any utility installations (e.g. floor/window
(page 8) coverings, vacuum lines, power panels,
security/fire protection systems, etc) and
alterations will become the City's property
upon lease termination/expiration. The City
may opt to have the Museum remove such
items.
6.2 Property Current Premium for The City is responsible for covering the
(page 10) Insurance Non-exclusive Area premises and the nonexclusive use area not
Artwork is $10,000 for only for General Liability Coverage, but the full
ten sculptures. replacement cost of the premises and any
Additional sculptures statuary or other artwork in the non-exclusive
will increase this use area. The insurance premium is a
premium based on their reoccurring annual cost.
full replacement cost
and underwriter
analysis.
9 Utilities & Cannot be determined The City is required to compensate the
(page 14) Services Museum for any increased electricity cost to
the building arising from the reduced efficiency
of the solar panels.
MUSEUM RESPONSIBILITIES
Lease Item Cost (if applicable) Comments
Section
1.5 Base Rent $1.00 p/year Lease is for a five year term commencing
(page 1) 11/1/10, with the Museum having an option to
extend it for five successive 5 year periods (25
years). The Museum can terminate the lease
with 365 days notice. The City can terminate
for breach of Contract.
2.1 Letting n/a-supervision The Museum is responsible for managing and
(Page 2) supervising the Eric Johnson Memorial
Gardens (sculpture Garden, Plaza, Multi-
sensory Garden, & Carriage Lane on a non-
exclusive use basis.
5.1 Lessee's Maintenance Costs Museum is responsible for plumbing, electrical,
(page 6) Obligation lighting facilities, boilers, pressure vessels,
fixtures, walls (interior/exterior), ceilings, floors,
windows, doors, plate glass, and signs located
on the premises. They are also responsible for
any security system upgrades to the premises.
5.1 Service Service Contracts Museum shall maintain services contracts for
(page 6) Contracts the boiler/pressure vessels, clarifiers, basic
utility feed, and any other equipment that is
their responsibility.
9 Utilities & n/a The Museum is responsible to pay all water,
(page 14) Services gas, heat, light, power, telephone, trash
disposal, and other utilities and services
supplied to the premises.
Exhibit C Lease CAM Charges-$71 5.58 The Museum shall pay the current Community
(pg. C-1) Terms & Interior Maintenance Area Maintenance charge and is responsible
for interior janitorial maintenance.
Exhibit C Lease Real Property Taxes Both City and Museum are property tax
(pg. C-2) Terms exempt entities, but any real estate taxes or
assessment against the premises, will be the
Museum's responsibility to pay.
Exhibit C Lease Resident Benefit Residents will receive a special benefit
(pg. C-2) Terms Package package. No details were provided on what
this package entails.
Attachments: Lease Agreement & Museum Required Operating Days
cc: City Council
Justin McCarthy, Assistant City Manager
Paul S. Gibson, Director of Finance
Mark Greenwood, Public Works Director
Lauri Aylaian, Community Development Director
Deborah Schwartz, Public Art Coordinator
,
MgPALM SPRINGS
ART MUSEUM
IN PALM DESERT
OPERATING DAYS PER THE LEASE AGREEMENT
Days Open-Season Six (6) days a week from November 1st-May 31st/
Tuesday-Sunday (holidays excepted)
Days Open-Off Season Three (3) days a week from June 1st-October 31st/
Friday-Sunday (holidays excepted)
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*41i 73-510 FREI) WARING DRIVE
PALM DESERT, CALIFORNIA 92260-2578
t ; n 1, TEL: 760 346—o6lII
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July 6, 2010
Mr. Harold Meyerman
Chairman of the Board of Trustees
Palm Springs Art Museum
101 Museum Drive
Palm Springs, California 92262-5659
Dear Chairman Meyerman:
Subject: Contract No. C2l +g . Lease with Palm Springs Art Museum at
Entrada del Paseo
At its regular meeting of June 10, 2010, the Palm Desert City Council authorized the
City Manager and City Attorney to finalize and execute the subject Lease Agreement
between the City of Palm Desert and Palm Springs Art Museum for the building located at
Entrada del Paseo.
As they were fully executed today, enclosed are two original Lease Agreements for your
records. If you have any questions or need further information with regard to this matter,
please do not hesitate to let us know.
Sincerely,
RACHELLE D. KLASSEN, CMC
CITY CLERK
rdk
Enclosures (as noted)
cc w/enc: John M. Wohlmuth, City Manager/RDA Executive Director
Justin McCarthy, ACM for Redevelopment
Paul S. Gibson, Director of Finance/City Treasurer
cc w/o enc: Donna Gomez, Visitor Center Manager
LEASE
1. Basic Provisions ("Basic Provisions").
1.1 Parties. This Lease ("Lease"), dated July 1, 2010 for reference purposes only, is entered
into by and between the CITY OF PALM DESERT, a public body, corporate and politic
("Lessor") and the PALM SPRINGS ART MUSEUM, INC., a California non-profit corporation
("Lessee") (collectively the "Parties," or individually a"Party").
1.2 Premises. That certain land, including the building, and all improvements thereon
(collectively, the "Premises"), commonly known as 72-567 Highway 111, Palm Desert, CA
92260, and located in the County of Riverside, State of California [APN 640-370-004], and more
particularly described on Exhibit "A" and Exhibit"A-1" (site plan) attached hereto.
1.3 Non-Exclusive Use Areas. That certain land and all improvements thereon (collectively,
the "Non-Exclusive Use Areas"), adjacent to and/or near the Premises, comprising the
following parcels: a. APN 640-370-001 (Eric Johnson Gardens) ("Sculpture Garden"); b. APN
640-370-002 ("Plaza"); c. APN 640-370-008 ("Carriage Lane"); d. APN 640-370-018
("Multi-Sensory Gardens"); and e. Parking spaces located on APN 640-370-009 ("Lot 9"),
APN 640-370-010 ("Lot 10"), and APN 640-370-011 ("Lot 11") (collectively, the "Parking
Spaces"). Said Non-Exclusive Use Areas are more particularly described on Exhibit "A" and
Exhibits "A-1", "A-2", and "A-3" (site plan, parcel map, and aerial map) attached hereto. In the
event there is any conflict between Exhibits A-1, A-2, and A-3, Exhibit A-2 (parcel map) shall
govern.
1.4 Term. The initial term of this Lease shall be five (5) years ("Initial Term"), commencing
on November 1, 2010 ("Commencement Date") and ending five (5) years thereafter("Expiration
Date"). Lessee shall have the option to extend the Term (the "Renewal Options") for five (5)
successive five (5) year periods (the "Renewal Terms") on the same terms and conditions as set
forth herein. The Renewal Options may be exercised only by giving written notice of exercise of
the Renewal Option("Option Notice") to Landlord at least ninety (90) days before the expiration
of the Term then in effect. Notwithstanding the foregoing, Lessee shall have the right to
terminate this Lease by written notification to the Lessor within 365 days of execution of this
lease should it determine, in its sole and absolute discretion, that maintenance and operation of
the museum at this site is impractical or infeasible or for such other reason as Lessee in its sole
and absolute discretion deems necessary. Exercise of this right to terminate shall not relieve
Lessee of its obligations to Lessor prior to written notice of termination. Prior to commencement
of tenant improvements, Lessee shall provide written notice to Lessor of its decision to waive
this right of termination and commit itself to the remainder of the initial five (5) year term.
1.5 Base Rent. $1.00 per year ("Base Rent"), payable on the first business day of
each year commencing on November 1, 2010 and continuing thereafter on each anniversary date
during the term of this lease.
1.6 Agreed Use. The operation of an art museum and educational center on the Premises,
which may include a film theater, store, and other related ancillary uses (the "Museum") and will
include a sculpture garden (in the Nonexclusive Use Areas). The Museum shall be open to the
Palm Springs Art Museum, Palm Desert Lease 7/2/2010
public at least six (6) days a week, Tuesday through Sunday (holidays excepted) for the period
from November 1st through May 31 st. For the period from June 1st through October 31st, the
Museum shall be open to the public at least three (3) days per week, Friday through Sunday
(holidays excepted). The Museum shall maintain a collection of art comparable in size and
quality to other art museums of similar size (8500 square feet). During the initial or any
extended term(s) hereof, Lessor shall not operate or support, directly or indirectly, any other art
museum within the City of Palm Desert, California, except for the exhibitions or other displays
of art currently conducted by Lessor, such as the public art on El Paseo, or any exhibitions,
displays, galleries, or museums by, or on the premises of, educational institutions.
1.7 Lessee's Work. Prior to commencement of tenant improvements, Lessor and Lessee shall
agree in writing as to the extent of permissible tenant improvements, which shall be described
and attached hereto as Exhibit "B". Lessee shall, at Lessee's cost and expense, attempt to make
the tenant improvements and repairs described on Exhibit "B" on or before November 30, 2011,
but will in any event complete them on or before January 31, 2012 and in accordance with all
applicable laws and Lessor's approval of plans and specifications (the "Lessee's Work").
1.8 Fundraising. Upon execution of this Lease by the Parties, Lessee shall have full access to
the Building consistent with Lessor's continuing occupancy and shall have the right to use the
Building for fundraising events and Museum-related activities. During the initial and any
extended term(s) of this Lease, Lessor shall reasonably assist Lessee in Lessee's fundraising
efforts. . Lessor shall also use its best efforts during the initial and any extended term(s) of this
Lease to encourage City Council and staff members of the City of Palm Desert to attend Lessee's
fundraising events in connection with the Museum.
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth
in this Lease. Additionally, Lessor hereby grants to Lessee a nonexclusive license to use
Nonexclusive Use Areas in a manner complementary to Agreed Use of the Premises, and subject
to conditions and approvals required herein, as follows: (a) Sculpture Garden, Plaza, Multi-
Sensory Gardens and Carriage Lane. Lessee shall manage and supervise the Sculpture Garden,
Plaza, Multi-Sensory Gardens and Carriage Lane (collectively the "Nonexclusive Priority Use
Areas") on a "nonexclusive priority basis". Nonexclusive priority basis means that it shall be the
responsibility of Lessee to supervise, manage, and schedule the exclusive use of all of the
Nonexclusive Priority Use Areas. Lessee and its guests may use the Nonexclusive Priority Use
Areas on a nonexclusive basis with the public, subject to the terms and conditions set forth
herein, provided that if Lessee has scheduled a private event in all or a portion of the Sculpture
Garden, Plaza, Multi-Sensory Gardens and Carriage Lane, Lessee shall have the right to
exclusively use all or part of the Sculpture Garden, Plaza, Multi-Sensory Gardens and Carriage
Lane during such event. Lessee shall have the right to permit the exclusive or nonexclusive use
of the Sculpture Garden, Plaza, Multi-Sensory Gardens and Carriage Lane for special events,
pursuant to terms and conditions approved by Lessor. (b) Parking Spaces. The 14 parking
spaces in front of and to the west of the Museum, as identified on Exhibit A-1, may be signed for
use by Lessee and its guests at all times that the Museum is open or is holding a special event.
l'he remaining parking spaces in the Nonexclusive Use Area shall he for the nonexclusive use of
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Palm Shrines Art Museum.Palm Desert Lease 7/2/2010
Lessee and its guests, subject to any exclusive-use rights granted by Lessor to other persons or
entities. (c) Lessor agrees to restrict vehicular access at both ends of Carriage Lane, with access
available only to Lessor, the fire department, the police department and Lessee as approved by
the Fire Marshall and City Engineer. It is intended that Carriage Lane will be used, except in
limited circumstances, solely for pedestrians.
2.2 Condition; Compliance with Laws. Lessee shall lease the Premises in their "AS-IS"
condition, without representation or warranty, express or implied, and Lessee hereby
acknowledges that in no event shall Lessor be obligated to make any alterations, repairs or
improvements to the Premises, except as otherwise provided herein.
Lessee has made such investigation as it deems necessary with reference to such matters and
assumes all responsibility therefor. In addition, Lessee hereby expressly acknowledges that
Lessee has had full opportunity to inspect the Premises (including, without limitation the
presence/absence of hazardous materials, the condition of fixtures and equipment, and whether
the improvements comply with law). Lessor hereby agrees to make any changes to the Premises
required by existing laws or by amendments to existing laws or by new laws.
2.3 Sculpture Garden, Multi-Sensory Gardens, Plaza, Carriage Lane and Parking
Spaces. Lessee shall be responsible for transportation, installation, and removal of sculptures;
however, Lessor shall reimburse Lessee all reasonable costs in connection with the
transportation, installation, and removal of sculptures not to exceed $10,000 per installation or
removal, including transportation of each sculpture, unless approved by the Lessor. Lessor shall
be responsible for accomplishing all tasks and paying all costs associated with the sculptures
located within the Sculpture Garden and Multi-Sensory Gardens, including without limitation,
the installation of bases and/or foundations for the sculptures, lighting, cleaning and ongoing
maintenance as needed or reasonably requested by Lessee. Lessor shall pay to Lessee the sum of
$2,575.00 as a one-time honorarium for each piece of sculpture placed by Lessee at the Sculpture
Garden or Multi-Sensory Gardens, upon completion of the installation of the sculpture, which
amount shall be increased by $50.00 on the anniversary of the Commencement Date each year
during the term hereof or any extension. There shall be an initial maximum of twenty (20)
honoraria; additional honoraria payments shall be at the discretion of the Lessor. Lessor shall be
responsible for all landscaping, landscape and other maintenance, cleaning and trash removal,
irrigation and other related expenses to maintain the Sculpture Garden, Multi-Sensory Gardens,
Plaza, Carriage Lane and Parking Spaces at no less than their current level of maintenance
quality and to maintain the roads and parking areas surrounding the Premises. Lessor and Lessee
shall cooperate in the selection and approval of sculptures to be placed in the Sculpture Garden,
Plaza or Multi-Sensory Gardens, but the final determination of the selection of sculptures shall
be made by Lessee, provided that no sculpture shall be placed in the Non-Exclusive Use Areas
that is likely to cause substantial controversy in the community. (Lessee may display art and
sculptures selected in its sole discretion in the Museum.) Lessee shall install ten or less
sculptures in the first year of actual operation and five or less sculptures in any succeeding year.
Placement of the sculptures will be determined in cooperation between Lessee and Lessor.
Lessee shall have the right to nominate representatives for one seat on Lessor's City Marketing
Committee and one seat on Lessor's Art in Public Places Commission during the initial and any
extended term(s) hereof. Appointment of nominees to the commissions shall be at sole
discretion of Lessor's City Council. Inasmuch as copyright(s) for the sculptures to be placed in
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Palm Snrinoc Art Mncrnm Pnlm Delved Lease 7/2t2OIO
the Gardens belongs, in most cases, to the respective artists, use of any visual images of such
works by Lessor must be approved by the Lessee and copyright approval(s) must be obtained
from the respective artist(s). Lessor shall be responsible to insure all sculptures at the Sculpture
Garden and the remainder of the Nonexclusive Use Areas against loss, damage or theft in such
amounts as are reported by Lessee to Lessor, and determined to be reasonable and appropriate by
Lessor and Lessee, but in no event less than the aggregate fair market value of all sculptures nor
more than $20,000,000 or such greater amount as may be subsequently agreed upon by the
parties. Lessor shall make no material change in the Sculpture Garden, Plaza or Multi-Sensory
Gardens during the initial or any extended term(s) hereof without the prior written consent of
Lessee, which shall not unreasonably be withheld. During the initial and any extended term(s)
hereof, Lessee shall provide a sculpture expert to work with Lessor in connection with the
maintenance and appearance of the Sculpture Garden and Multi-Sensory Gardens, which
sculpture expert shall initially be Lessee's Executive Director, Dr. Steven Nash, PhD.
3. Possession. Lessor shall not be required to deliver possession of the Premises to Lessee
until Lessee complies with its obligation to provide evidence of insurance under Paragraph 6, but
such failure to provide evidence of insurance shall not extend or delay the Commencement Date.
4. Use.
4.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, and for no other
purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful,
creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to
neighboring premises or properties. Lessee acknowledges that Lessee's obligation to maintain
the Museum open to the public as set forth in paragraph 1.6 above, and maintain an art collection
of comparable size and quality to other art museums of similar size (8500 square feet) is a
material part of the consideration to Lessor, and Lessee's failure to do so will be a material
breach of this Lease.
4.2 Hazardous Substances.
(a) Definitions. The term "Hazardous Substance" as used in this Lease
shall mean any product, substance, or waste whose presence, use, manufacture, disposal,
transportation, or release, either by itself or in combination with other materials expected to be
on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii)regulated or monitored by any governmental authority, or(iii) a
basis for potential liability of Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substances shall include, but not be limited
to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions
thereof. "Reportable Use" shall mean (i) the installation or use of any above or below ground
storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires a permit from, or with respect to which a report, notice,
registration or business plan is required to be filed with, any governmental authority, and/or (iii)
the presence at the Premises of a Hazardous Substance with respect to which any Applicable
Requirements requires that a notice be given to persons entering or occupying the Premises or
neighboring properties.
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Palm Qnrinac Art Mncrum Palm IIPCPrt I PACP 7/7/711111
(b) Use Requires Consent. Lessee shall not engage in any activity in or on
the Premises, which constitutes a Reportable Use of Hazardous Substances without the express
prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable
Requirements. Notwithstanding the foregoing, Lessee may use any ordinary and customary
materials reasonably required to be used in the normal course of the Agreed Use, ordinary office
supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so
long as such use is in compliance with all Applicable Requirements, does not negate LEED
status is not a Reportable Use, and does not expose the Premises or neighboring property to any
meaningful risk of contamination or damage or expose Lessor to any liability therefor. In
addition, Lessor may condition its consent to any Reportable Use upon receiving such additional
assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or
the environment against damage, contamination, injury and/or liability, including, but not limited
to, the installation (and removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasements).
(c) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or about the Premises,
other than as previously consented to by Lessor, Lessee shall immediately give written notice of
such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other
documentation which it has concerning the presence of such Hazardous Substance.
(d) Lessee Remediation. Lessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under, or about the Premises (including through the
plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply with all
Applicable Requirements and take all investigatory and/or remedial action reasonably
recommended, whether or not formally ordered or required, for the cleanup of any contamination
of, and for the maintenance, security and/or monitoring of the Premises or neighboring
properties, that was caused or materially contributed to by Lessee, or pertaining to or involving
any Hazardous Substance brought onto the Premises during the term of this Lease, by or for
Lessee, or any third party.
(e) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor,
its agents, employees, lenders, if any, harmless from and against any and all loss of rents and/or
damages, liabilities,judgments, claims, expenses, penalties, and attorneys' and consultants' fees
arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee,
or any third party (provided, however, that Lessee shall have no liability under this Lease with
respect to underground migration of any Hazardous Substance under the Premises from adjacent
properties not caused or contributed to by Lessee). Lessee's obligations shall include, but not be
limited to, the effects of any contamination or injury to person, property or the environment
created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration
and/or abatement, and shall survive the expiration or termination of this Lease. No termination,
cancellation or release agreement entered into by Lessor and Lessee shall release Lessee
from its obligations under this Lease with respect to Hazardous Substances, unless
specifically so agreed by Lessor in writing at the time of such agreement.
(f) Investigations and Remediations. Lessee shall have the responsibility to
pay for any investigations or remediation measures required by governmental entities having
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Palm Cnrmec Art f,Aneenm Palm necert I Pace Wm
jurisdiction with respect to the existence of Hazardous Substances on the Premises as a result of
Lessee's use (including the Lessee's Work and the "Alterations", as defined in Paragraph 5.3(a)
below) of the Premises.
(g) Lessor Termination Option. If a Hazardous Substance Condition (see
Paragraph 7.1(e)) occurs during the term of this Lease, Lessee shall investigate and remediate it
as required by the Applicable Requirements and this Lease shall continue in full force and effect.
4.3 Inspection; Compliance. Lessor and Lessor's consultants shall have the right to enter into
Premises at any time, in the case of an emergency, and otherwise at reasonable times after
reasonable notice, for the purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor,
unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see
Paragraph 4.2) is found to exist or be imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of
such inspection, so long as such inspection is reasonably related to the violation or
contamination.
5. Maintenance; Repairs; Utility Installations; Trade Fixtures; and Alterations.
5.1 Lessee's Obligations.
(a) In General. Subject to the provisions of this Paragraph 5.1 (Lessee's
Obligations), 5.2 (Lessor's Obligations), 7 (Damage or Destruction), and 12 (Condemnation),
Lessee shall comply with the specific lease terms and conditions (Exhibit "C"), at Lessee's sole
expense, and keep the Premises, Utility Installations (intended for Lessee's exclusive use, no
matter where located), and Lessee's Work and Alterations in good order, condition and repair
(whether or not the portion of the Premises requiring repairs, or the means of repairing the same,
are reasonably or readily accessible to Lessee, and whether or not the need for such repairs
occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the
Premises), including, but not limited to, plumbing, electrical, lighting facilities, boilers, pressure
vessels, fixtures, walls (interior and exterior), ceilings, floors, windows, doors, plate glass and
signs located at the Premises. Lessee, in keeping the Premises in good order, condition and
repair, shall exercise and perform good maintenance practices, specifically including the
procurement and maintenance of the service contracts required by Paragraph 5.1(b) below.
Lessee's obligations shall include restorations, replacements or renewals when necessary to keep
the Premises and all improvements thereon or a part thereof in good order, condition and state of
repair. Lessee shall, during the term of this Lease, keep the exterior appearance of the Building
in a first-class condition (including, e.g. graffiti removal) consistent with the exterior appearance
of other similar facilities of comparable age and size in the vicinity. Notwithstanding the
foregoing, Lessor shall be responsible for and maintain and when necessary replace (or
reimburse Lessee for Lessee's maintenance and replacement as provided for in Paragraph 5.2), at
its cost and expense, the Building's roof, roof drainage, solar and HVAC systems (including the
humidification system), fire protection system (including the alarm and pipe-sprinkler system)
and the exterior roadways, parkways, pathways and sidewalks. Lessee reserves the right to make
customary museum-specific alterations to the existing HVAC system, as necessary, to comply
with the environmental standards of the American Association of Museums. Lessee reserves the
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right to use competent and trained employees for interior cosmetic alterations to the interior of
the building at the Premises, including the removal or installation of non-load bearing walls.
Any building, electrical, or plumbing alterations shall be performed by licensed contractors.
Lessee shall be responsible for any upgrades to premises' security system.
(b) Service Contracts. Lessee shall, at Lessee's sole expense, procure and
maintain contracts, with copies to Lessor, in customary form and substance for, and with
contractors specializing and experienced in the maintenance of the following equipment and
improvements, if any, if and when installed on the Premises: (i) boiler and pressure vessels, (ii)
clarifiers, (iii) basic utility feed to the perimeter of the Building, and (iv) any other equipment
which is the responsibility of Lessee, if reasonably required by Lessor.
(c) Failure to Perform. If Lessee fails to perform Lessee's obligations under
this Paragraph 5.1, Lessor may enter upon the Premises after 30 days' prior written notice to
Lessee (except in the case of an emergency, in which case no notice shall be required), perform
such obligations on Lessee's behalf, and put the Premises in good order, condition and repair,
and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof.
5.2 Lessor's Obligations. Subject to the provisions of Paragraphs 5.1 (Lessee's Obligations),
5.2 (Lessor's Obligations), 7 (Damage or Destruction) and 12 (Condemnation), and except as
otherwise provided herein, it is intended by the Parties hereto that Lessor have no obligation, in
any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of
which obligations are intended to be that of the Lessee. Lessor shall, however, have the
obligation to maintain and when necessary replace, at its cost and expense, the Building's roof,
roof drainage, solar (including the photovoltaic panels), any future solar-based energy system,
the HVAC systems (including the humidification system), fire protection system (including the
alarm and pipe-sprinkler system), the painting of the exterior of the building and the exterior
roadways, parkways, pathways, and sidewalks. Any replacement of the solar system shall be
comparable to or better than the existing solar system. The HVAC system shall be maintained in
a manner so that it will comply with the environmental standards of the American Association of
Museums. Notwithstanding the provisions of Paragraph 5.1, Lessor shall reimburse Lessee for
the cost of initial repairs to the HVAC, fire alarm system and dry-pipe sprinkler system to make
them fully operational for the operation of a museum under the standards set by the American
Association of Museums, in an amount not to exceed $20,000 per system. At Lessor's option,
Lessor may require Lessee, by written notice, to maintain and when necessary to replace all or
any portion of the Building's roof, roof drainage, the HVAC systems, and the fire protection
system, subject to Lessor's obligation to reimburse Lessee all reasonable expenses incurred
therein. It shall also be the obligation of Lessor to maintain on a regular basis as needed the
Nonexclusive Priority Use Areas. Lessee shall reasonably cooperate in that maintenance and
shall timely report to Lessor any circumstances requiring attention. It is the intention of the
Parties that the terms of this Lease govern the respective obligations of the Parties as to
maintenance and repair of the Premises, and they expressly waive the benefit of any statute now
or hereafter in effect to the extent it is inconsistent with the terms of this Lease.
5.3 Utility Installations; Trade Fixtures; Alterations.
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Palm Snrin¢c Art Mnsenm Palm Deceit Lease 7/2/2010
(a) Definitions. The term "Utility Installations" refers to all floor and
window coverings, air and/or vacuum lines, power panels, electrical distribution, security and
fire protection systems, communication cabling, lighting fixtures, HVAC equipment, and
plumbing in or on the Premises. The term "Trade Fixtures" shall mean Lessee's machinery and
equipment that can be removed without doing material damage to the Premises. The term
"Alterations" shall mean any modification of the improvements, other than Utility Installations
or Trade Fixtures, whether by addition or deletion, and includes placement of art, statuary or
other alterations in Nonexclusive Priority Use Areas. "Lessee Owned Alterations and/or
Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that
are not yet owned by Lessor pursuant to Paragraph 5.4(a).
(b) Consent. Except for the Lessee's Work (Exhibit B), and except as
provided in Paragraph 2.3 above, Lessee shall not make any Alterations or Utility Installations to
the Premises or Nonexclusive Use Areas without Lessor's prior written consent. Lessee may,
however, make non-structural Utility Installations to the interior of the Premises (excluding the
roof) without such consent but upon notice to Lessor, as long as they are not visible from the
outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not
affect the electrical, plumbing, HVAC, and/or life safety systems. Notwithstanding the
foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the
roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such
approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any
Alterations or Utility Installations that Lessee shall desire to make and which require the consent
of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be
deemed conditioned upon Lessee's: (i) acquiring all applicable governmental permits, (ii)
furnishing Lessor with copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with all conditions of said permits and other
Applicable Requirements in a prompt and expeditious manner. The Lessee's Work shall
commence and be completed only upon satisfaction of the conditions in (i), (ii) and (iii) above.
Any Alterations or Utility Installations shall be performed in a workmanlike manner with good
and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built
plans and specifications. Lessor may condition its consent upon Lessee providing a completion
bond in an amount equal to 150%of the estimated cost of such Alteration or Utility Installation.
5.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall
be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elect in
writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility
Installations. Unless otherwise instructed per Paragraph 5.4(b) hereof, all Lessee Owned
Alterations and Utility Installations shall, at the expiration or termination of this Lease, become
the property of Lessor and be surrendered by Lessee with the Premises. Notwithstanding the
foregoing, all art, statuary, and electronic equipment owned, leased, borrowed or controlled by
Lessee will remain the sole property of Lessee.
(b) Removal. By delivery to Lessee of written notice from Lessor not earlier
than ninety (90) and not later than thirty (30) days prior to the end of the term of this Lease,
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Palm Snrinoc Art MIICPIIm Palm Decert 1 eacr 7/7nn1n
Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed
by the expiration or termination of this Lease. Lessor may require the removal at any time of all
or any part of any Lessee Owned Alterations or Utility Installations made without the required
consent.
(c) Surrender; Restoration. Lessee shall surrender the Premises and
Nonexclusive Use Areas by the Expiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof broom clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear"
shall not include any damage or deterioration that would have been prevented by good
maintenance practice. Lessee shall repair any damage occasioned by the installation,
maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations,
furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee.
Lessee shall completely remove from the Premises any and all Hazardous Substances brought
onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were
deposited via underground migration from areas outside of the Premises) even if such removal
would require Lessee to perform or pay for work that exceeds statutory requirements. Trade
Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal
property of Lessee not removed on or before the Expiration Date or any earlier termination date
shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor
as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this
Paragraph 5.4(c) without the express written consent of Lessor shall constitute a holdover under
the provisions of Paragraph 23 below.
6. Insurance; Indemnity.
6.1 Liability Insurance.
(a) Premises - Carried by Lessee. Lessee shall obtain and keep in force a
Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional
insured against claims for bodily injury, personal injury and property damage based upon or
arising out of the ownership, use, occupancy or maintenance of the Premises. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not less than
$2,000,000 per occurrence with an annual aggregate of not less than $10,000,000, an "Additional
Insured-Managers or Lessors of Premises Endorsement" and contain the "Amendment of the
Pollution Exclusion Endorsement" for damage caused by heat, smoke or fumes from a hostile
fire. The policy shall not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease as an "insured
contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of
said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any
obligation hereunder. The policy must provide for the payment of defense costs in addition to
the coverage amounts stated therein. All insurance carried by Lessee shall be primary to and not
contributory with any similar insurance carried by Lessor, whose insurance shall be considered
excess insurance only. The certificate of insurance and additional insured endorsement is subject
to approval of Lessor, which approval shall not be unreasonably withheld.
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Palm Snrinoc Art MncPnm Palm flecerf I Pace 7nm010
(b) Premises Carried by Lessor. Lessor may maintain, at its sole cost and
expense, liability insurance as described in Paragraph 6.1(a), in addition to, and not in lieu of, the
insurance required to be maintained by Lessee. Lessee shall not be named as an additional
insured therein.
(c) Nonexclusive Use Areas - Carried by Lessor. Lessor shall obtain and
keep in force an insurance program equivalent to a Commercial General Liability policy of
insurance protecting Lessor and Lessee as an additional insured against claims for bodily injury,
personal injury and property damage based upon or arising out of the ownership, use, occupancy
or maintenance of the Nonexclusive Use Areas. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $2,000,000 per occurrence with an
annual aggregate of not less than $10,000,000, an "Additional Insured-Managers or Lessors of
Premises Endorsement". The policy shall not contain any intra-insured exclusions as between
insured persons or organizations, but shall include coverage for liability assumed under this
Lease as an "insured contract" for the performance of Lessor's obligations under this Lease. The
limits of said insurance shall not, however, limit the liability of Lessor nor relieve Lessor of any
obligation hereunder. The policy must provide for the payment of defense costs in addition to
the coverage amounts stated therein. All insurance carried by Lessor shall be primary to and not
contributory with any similar insurance carried by Lessee, whose insurance shall be considered
excess insurance only. The certificate of insurance and additional insured endorsement, or
equivalent, is subject to approval of Lessee, which approval shall not be unreasonably withheld.
(d) Nonexclusive Use Areas - Carried by Lessee. Lessee may maintain, at
its sole cost and expense, liability insurance as described in Paragraph 6.1(c), in addition to, and
not in lieu of, the insurance required to be maintained by Lessor. Lessor shall not be named as an
additional insured therein.
6.2 Property Insurance—Building and Improvements. Lessor shall obtain and keep in force
a policy or policies in the name of Lessor, with loss payable to Lessor, except to the extent
coverage is required to be provided by Lessee below, covering the Premises and the
Nonexclusive Use Areas. The amount of such insurance shall be equal to the full replacement
cost of the Premises and any statuary or other artwork in the Nonexclusive Use Areas, as the
same shall exist from time to time, but in no event more than the commercially reasonable and
available insurable value of the statuary to a maximum of$20,000,000, with a deductible of not
to exceed $5,000. Lessee Owned Alterations and Utility Installations, Trade Fixtures, Statuary
(except statuary located in the Nonexclusive Use Areas), Art, owned or on loan to Lessee, and
Lessee's personal property shall be insured by Lessee under Paragraph 6.3. If the coverage is
available and commercially appropriate, such policy or policies shall insure against all risks of
direct physical loss, theft, vandalism, or other damage including coverage for debris removal and
the enforcement of any Applicable Requirements requiring the upgrading, demolition,
reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said
policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance
clause, waiver of subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises
are located. If such insurance coverage has a deductible clause, Lessee shall be liable for such
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deductible amount in the event of an Insured Loss caused by Lessee or Lessee's employees,
agents, customers, or invitees.
6.3 Lessee's Property.
(a) Property Damage. Lessee shall obtain and maintain insurance coverage
on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations, Utility
Installations, Statuary (except statuary located in the Nonexclusive Use Areas), Art, etc. owned
or on loan to Lessee. Such insurance shall be full replacement cost coverage with a deductible of
not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by
Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations
and Utility Installations. Lessee shall provide Lessor with written evidence that such insurance is
in force.
(b) No Representation of Adequate Coverage. Lessor makes no
representation that the limits or forms of coverage of insurance specified herein are adequate to
cover Lessee's property, business operations or obligations under this Lease.
6.4 Insurance Policies. Insurance required of Lessee herein shall be by companies duly
licensed or admitted to transact business in the state where the Premises are located, and
maintaining during the policy term a "General Policyholders Rating" of at least B+, V, as set
forth in the most current issue of "Best's Insurance Guide", or such other rating as may be
required by a Lender. Lessee shall not do or permit to be done anything which invalidates the
required insurance policies. Lessee shall, prior to the Commencement Date, deliver to Lessor
certified copies of policies of such insurance or certificates evidencing the existence and amounts
of the required insurance. No such policy shall be cancelable or subject to modification except
after 30 days prior written notice to Lessor. Lessee shall, at least 30 days prior to the expiration
of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing
renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which
amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at
least one (1) year, or the length of the remaining term of this Lease, whichever is less. If either
Party shall fail to procure and maintain the insurance required to be carried by it, the other Party
may, but shall not be required to, procure and maintain the same. Insurance requirements shall
be reviewed every three years to ensure that all coverages are commercially reasonable.
6.5 Waiver of Subrogation. Without affecting any other rights or remedies, and unless
otherwise required herein, Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to recover damages against the other, for loss of or damage to its property
arising out of or incident to the perils required to be insured against herein. The effect of such
releases and waivers is not limited by the amount of insurance carried or required, or by any
deductibles applicable hereto. The Parties agree to have their respective property damage
insurance carriers waive any right to subrogation that such companies may have against Lessor
or Lessee, as the case may be.
6.6 Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall
indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's
master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents
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Palm Cnrinac Art Mncvnm Palm fl.c.rt I PaCP 7/7/7(l In
and/or damages, liens, judgments, penalties, attorneys' and consultants' fees, expenses and/or
liabilities arising out of, involving, or in connection with, the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the
foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel
reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor
need not have first paid any such claim in order to be defended or indemnified.
6.7 Exemption of Lessor from Liability. Lessor shall not be liable for injury or damage to the
person or goods, wares, merchandise or other property of Lessee, Lessee's employees,
contractors, invitees, customers, donors, or any other person at the Premises, whether such
damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or
damage results from conditions arising upon the Premises or upon other portions of the building
of which the Premises are a part, or from other sources or places, and whether caused by
Lessor's active negligence, passive negligence, or failure to perform its maintenance obligations.
Notwithstanding Lessor's negligence or breach of this Lease, Lessor shall under no
circumstances be liable for injury to Lessee's business or for any loss of income or profit
therefrom.
7. Damage or Destruction.
7.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility Installations,
which can reasonably be repaired in six (6) months or less from the date of the damage or
destruction. Lessor shall notify Lessee in writing within thirty (30) days from the date of the
damage or destruction as to whether or not the damage is Partial or Total.
(b) "Premises Total Destruction" shall mean damage or destruction to the
Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures,
which cannot reasonably be repaired in 6 months or less from the date of the damage or
destruction. Lessor shall notify Lessee in writing within thirty (30) days from the date of the
damage or destruction as to whether or not the damage is Partial or Total.
(c) "Insured Loss" shall mean damage or destruction to improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures,
which was caused by an event required to be covered by the insurance described in Paragraph
6.2, irrespective of any deductible amounts or coverage limits involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition existing
immediately prior thereto, including demolition, debris removal and upgrading required by the
operation of Applicable Requirements, and without deduction for depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a Hazardous
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Substance as defined in Paragraph 4.2(a), in, on, or under the Premises which requires repair,
remediation, or restoration.
7.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss
occurs, then Lessor shall, at Lessor's expense, repair such damage (but not Lessee's Trade
Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible
and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at
Lessor's election, make the repair of any damage or destruction the total cost to repair of which
is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds
available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the
required insurance was not in force or the insurance proceeds are not sufficient to effect such
repair, Lessor shall promptly contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs. In the event,
however, such shortage was due to the fact that, by reason of the unique nature of the
improvements, full replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to
fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within ten (10) days following receipt of written
notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance
thereof within said ten (10) day period, the party responsible for making the repairs shall
complete them as soon as reasonably possible and this Lease shall remain in full force and effect.
If such funds or assurance are not received, Lessor may nevertheless elect by written notice to
Lessee within ten (10) days thereafter to: (i) make such restoration and repair as is commercially
reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in
full force and effect, or (ii) have this Lease terminate thirty (30) days thereafter. Lessee shall not
be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph
7.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any
such insurance shall be made available for the repairs if made by either Party.
7.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured
Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall
make the repairs at Lessee's expense), Lessor may either: (i) repair such damage as soon as
reasonably possible at Lessor's expense, in which event this Lease shall continue in full force
and effect, or (ii) terminate this Lease by giving written notice to Lessee within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall
be effective sixty (60) days following the date of such notice. In the event Lessor elects to
terminate this Lease, Lessee shall have the right within ten (10) days after receipt of the
termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair
of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said
funds or satisfactory assurance thereof within thirty (30) days after making such commitment. In
such event this Lease shall continue in full force and effect, and Lessor shall proceed to make
such repairs as soon as reasonably possible after the required funds are available. If Lessee does
not make the required commitment, this Lease shall terminate as of the date specified in the
termination notice.
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7.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total
Destruction occurs, this Lease shall terminate sixty (60) days following such Destruction. If the
damage or destruction was caused by the negligence or willful misconduct of Lessee, Lessor
shall have the right to recover Lessor's damages from Lessee, except to the extent actually
covered by insurance.
7.5 Lessee's Remedies. If Lessor shall be obligated to repair or restore the Premises and does
not commence, in a substantial and meaningful way, such repair or restoration within ninety (90)
days after such obligation shall accrue, Lessee may, at any time prior to the commencement of
such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has
actual notice, of Lessee's election to terminate this Lease on a date not less than sixty (60) days
following the giving of such notice. If Lessee gives such notice and such repair or restoration is
not commenced within thirty (30) days thereafter, this Lease shall terminate as of the date
specified in said notice. If the repair or restoration is commenced within such thirty (30) days,
this Lease shall continue in full force and effect. "Commence" shall mean either the
unconditional authorization of the preparation of the required plans, or the beginning of the
actual work on the Premises, whichever first occurs.
8. Taxes. Unless Lessee is exempt from such taxes, Lessee shall pay, prior to delinquency,
all possessory interest taxes assessed on Lessee's interest under this Lease, taxes assessed against
and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings,
equipment and all personal property of Lessee. When possible, Lessee shall cause its Lessee
Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the
taxes attributable to Lessee's property within ten (10) days after receipt of a written statement
setting forth the taxes applicable to Lessee's property. Lessee is currently a tax-exempt entity.
9. Utilities and Services. Lessee shall pay for all domestic water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the Premises, together with
any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee
shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered or
billed. Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperation
with governmental request or directions. Notwithstanding the foregoing, Lessor shall
compensate Lessee for any increased cost of electricity to the Building arising from the reduced
efficiency of the solar panels at the Building. Lessor and Lessee shall cooperate in agreeing on
an appropriate formula for the calculation of such reduced efficiency and corresponding
increased cost of electricity. In addition, Lessor shall bear the cost of maintaining and replacing
when necessary, both the HVAC and solar systems at the Premises. Defective solar panels will
be replaced by Lessor when necessary with comparable or better panels.
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10. Assignment and Subletting.
10.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage or encumber (collectively, "assign or assignment") or sublet all or any part of
Lessee's interest in this Lease or in the Premises without Lessor's prior written consent, which
may be withheld in Lessor's sole and absolute discretion.
(b) An assignment or subletting without consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 11.1(c), or a noncurable Breach without the necessity
of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting
as a noncurable Breach, Lessor may terminate this Lease.
11. Default; Breach; Remedies.
11.1 Default; Breach. A "Default" is defined as a failure by the Lessee to comply with or
perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A
"Breach" is defined as the occurrence of one or more of the following Defaults, and the failure of
Lessee to cure such Default within any applicable grace period:
(a) The failure of Lessee to remain open to the public and to maintain an art
collection as required by the Agreed Use.
(b) The vacating of the Premises without providing a commercially
reasonable level of security, or where the coverage of the property insurance described in
Paragraph 6.2 is jeopardized as a result thereof
(c) The failure by Lessee to provide (i) reasonable written evidence of
compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an
unauthorized assignment or subletting, (iv) an Estoppel Certificate, (v) a requested
subordination, (vi) any material documentation or information which Lessor may reasonably
require of Lessee under the terms of this Lease, where any such failure continues for a period of
thirty (30) days following written notice to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or provisions of
this Lease, or other than those described in subparagraphs 11.1(a), or (b), above, where such
Default continues for a period of thirty (30) days after written notice; provided, however, that if
the nature of Lessee's Default is such that more than thirty (30) days are reasonably required for
its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said
thirty(30) day period and thereafter diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making of any
general arrangement or assignment for the benefit of creditors; (ii) becoming a "debtor" as
defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed
against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located at the Premises or of
Lessee's interest in this Lease, where possession is not restored to Lessee within thirty (30) days;
15
Palm Springs Art Museum.Palm Desert Lease 7/2/2010
or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged
within thirty (30) days; provided, however, in the event that any provision of this subparagraph
(d) is contrary to any applicable law, such provision shall be of no force or effect, and not affect
the validity of the remaining provisions.
11.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within
thirty (30) days after written notice (or in case of an emergency, without notice), Lessor may, at
its option, perform such duty or obligation on Lessee's behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or
approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses
incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a
Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the
exercise of any right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee's right to possession of the Premises by any lawful means, in
which case this Lease shall terminate and Lessee shall immediately surrender possession to
Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which
had been earned at the time of termination; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss that the Lessee proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental loss that the Lessee
proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by the Lessee'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 the cost of recovering possession of the Premises, expenses of
reletting, including necessary renovation and alteration of the Premises, reasonable attorneys'
fees, and that portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (iii) of the immediately preceding sentence shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of the District within
which the Premises are located at the time of award plus one percent. Efforts by Lessor to
mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to
recover damages. If termination of this Lease is obtained through the provisional remedy of
unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and
damages as are recoverable therein, or Lessor may reserve the right to recover all or any part
thereof in a separate suit. If a notice and grace period required under Paragraph 11.1 was not
previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the
unlawful detainer statute shall also constitute the notice required by Paragraph 11.1. In such case,
the applicable grace period required by Paragraph 11.1 and the unlawful detainer statute shall run
concurrently, and the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession and recover the Rent
as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable
16
Palm Snrinoc Art MOICP11111 Palm necert 1 race 7nnnln
limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect
the Lessor's interests, shall not constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the laws or
judicial decisions of the state wherein the Premises are located. The expiration or termination of
this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee's occupancy of the Premises.
11.3 Interest. Any monetary payment due Lessor hereunder, charges, not received by Lessor,
when due, shall bear interest from the date when due, as to scheduled payments, or the 31st day
after it was due as to non-scheduled payments. The interest ("Interest") charged shall be
computed at the rate of ten percent (10%) per annum but shall not exceed the maximum rate
allowed by law.
11.4 Breach by Lessor. Lessor shall not be deemed in breach of this Lease unless Lessor
fails within a reasonable time to perform an obligation required to be performed by Lessor. For
purposes of this Paragraph, a reasonable time shall in no event be less than thirty (30) days after
receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in
writing for such purpose, of written notice specifying wherein such obligation of Lessor has not
been performed; provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are reasonably required for its performance, then Lessor shall not be in
breach if performance is commenced within such thirty (30) day period and thereafter diligently
pursued to completion.
12. Condemnation. If the Premises or any portion thereof are taken under the power of
eminent domain or sold under the threat of the exercise of said power (collectively
"Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than 10% of the Building, or
more than 25% of that portion of the Premises not occupied by any building, is taken by
Condemnation, Lessee may, at Lessee's option, to be exercised in writing within ten (10) days
after Lessor shall have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such possession. If Lessee
does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full
force and effect as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in proportion to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether such award shall
be made as compensation for diminution in value of the leasehold, the value of the part taken, or
for severance damages; provided, however, that Lessee shall be entitled to any compensation for
Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to
whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All
Alterations and Utility Installations made to the Premises by Lessee, for purposes of
Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to
any and all compensation which is payable therefor. In the event that this Lease is not terminated
by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such
Condemnation.
17
Palm Springs Art Museum,Palm Desert Lease 7/2/2010
13. Representations and Indemnities of Broker Relationships. Lessee and Lessor each
represent and warrant to the other that it has had no dealings with any real estate broker,
salesperson or finder in connection with this Lease. Lessee and Lessor do each hereby agree to
indemnify, protect, defend and hold the other harmless from and against liability for
compensation or charges which may be claimed by any such broker, salesperson, finder or other
similar party by reason of any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.
14. Estoppel Certificates. If Lessor desires to finance, refinance, or sell the Premises, or
any part thereof, Lessee shall deliver to any potential lender or purchaser designated by Lessor
such estoppel statement and financial statements as may be reasonably required by such lender or
purchaser.
15. Definition of Lessor. The term "Lessor" as used herein shall mean the owner or owners
at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee's
interest in the prior lease. Subject to the foregoing, the obligations and/or covenants in this
Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined.
16. Severability. The invalidity of any provision of this Lease, as determined by a court of
competent jurisdiction, shall in no way affect the validity of any other provision hereof.
17. Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in
this Lease shall mean and refer to calendar days.
18. Limitation on Liability. The obligations of Lessor and Lessee under this Lease shall not
constitute personal obligations of Lessor or Lessee or its board members, directors, officers or
employees. Lessee shall look to the Premises, and to no other assets of Lessor, for the
satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse
against Lessor's board members, directors, officers or employees, or any of their personal assets
for such satisfaction.
19. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and no other prior
or contemporaneous agreement or understanding shall be effective.
20. Notices.
20.1 Notice Requirements. All notices required or permitted by this Lease or applicable law
shall be in writing and may be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or
by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified
in this Paragraph. The addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notices. Either Party may by written notice to the other
specify a different address for notice, except that upon Lessee's taking possession of the
Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to
Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may
from time to time hereafter designate in writing.
18
Palm cnrinoc Art AAncnnm Palm flncert I Pace 7/7/7f1111
20.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested,
shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is
shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 48 hours
after the same is addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantee next day delivery shall be
deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices
transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone
confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is
also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it
shall be deemed received on the next business day.
21. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or
condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition
hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term,
covenant or condition hereof. Lessor's consent to, or approval of, any act shall not be deemed to
render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or
similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or
provisions of this Lease requiring such consent. The acceptance of Rent by Lessor shall not be a
waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor
on account of moneys or damages due Lessor, notwithstanding any qualifying statements or
conditions made by Lessee in connection therewith, which such statements and/or conditions
shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or
before the time of deposit of such payment.
22. No Right To Holdover. Lessee has no right to retain possession of the Premises or any
part thereof beyond the expiration or termination of this Lease. Nothing contained herein shall be
construed as consent by Lessor to any holding over by Lessee.
23. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but
shall, wherever possible, be cumulative with all other remedies at law or in equity.
24. Covenants and Conditions; Construction of Agreement. All provisions of this Lease
to be observed or performed by Lessee are both covenants and conditions. In construing this
Lease, all headings and titles are for the convenience of the Parties only and shall not be
considered a part of this Lease. Whenever required by the context, the singular shall include the
plural and vice versa. This Lease shall not be construed as if prepared by one of the Parties, but
rather according to its fair meaning as a whole, as if both Parties had prepared it.
25. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their
personal representatives, successors and assigns and be governed by the laws of the State of
California. Any litigation between the Parties hereto concerning this Lease shall be initiated in
Riverside County.
26. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE
PROPERTY OR ARISING OUT OF THIS AGREEMENT.
19
Palm Springs Art Museum.Palm Desert Lease 7/2/2010
27. Attorneys' Fees. If any Party brings an action or proceeding involving the Premises
whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party
(as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate
suit, whether or not such action or proceeding is pursued to decision or judgment. The term,
"Prevailing Party" shall include, without limitation, a Party who substantially obtains or defeats
the relief sought, as the case may be, whether by compromise, settlement, judgment, or the
abandonment by the other Party of its claim or defense. The attorneys' fees award shall not be
computed in accordance with any court fee schedule, but shall be such as to fully reimburse all
attorneys' fees reasonably incurred. In addition, Lessor shall be entitled to attorneys' fees, costs
and expenses incurred in the preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such
services and consultation).
28. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have
the right to enter the Premises at any time, in the case of an emergency, and otherwise at
reasonable times after reasonable five days prior notice for the purpose of showing the same to
prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements
or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using
and maintaining of utilities, services, pipes and conduits through the Premises and/or other
premises as long as there is no material adverse effect to Lessee's use of the Premises. All such
activities shall be without abatement of rent or liability to Lessee.
29. Signs. All exterior and off-premises signage shall require prior approval by Lessor.
30. Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the
voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation
hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any
sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue
any one or all existing subtenancies. Lessor's failure within ten (10) days following any such
event to elect to the contrary by written notice to the holder of any such lesser interest, shall
constitute Lessor's election to have such event constitute the termination of such interest.
31. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a
Party is required to an act by or for the other Party, such consent shall not be unreasonably
withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited to
architects', attorneys', engineers' and other consultants' fees) incurred in the consideration of, or
response to, a request by Lessee for any Lessor consent to an assignment, a subletting or the
presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and
supporting documentation therefor. Lessor's consent to any act, assignment or subletting shall
not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor
shall such consent be deemed a waiver of any then existing Default or Breach, except as may be
otherwise specifically stated in writing by Lessor at the, time of such consent. The failure to
specify herein any particular condition to Lessor's consent shall not preclude the imposition by
Lessor at the time of consent of such further or other conditions as are then reasonable with
reference to the particular matter for which consent is being given. In the event that either Party
20
Palm Rnr,nac Art AAncenm Palm necert I race 700010
disagrees with any determination made by the other hereunder and reasonably requests the
reasons for such determination, the determining party shall furnish its reasons in writing and in
reasonable detail within ten(10) business days following such request.
32. Quiet Possession. Subject to performance by Lessee of all of the covenants, conditions
and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall
have quiet possession and quiet enjoyment of the Premises during the term hereof.
33. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor
hereunder does not include the cost of guard service or other security measures, and that Lessor
shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the
protection of the Premises, Lessee, its agents and invitees and their property from the acts of
third parties.
34. Reservations. Lessor reserves to itself the right, from time to time, to grant, without the
consent or joinder of Lessee, such easements, rights and dedications that Lessor deems
necessary, and to cause the recordation of parcel maps and restrictions, so long as such
easements, rights, dedications, maps and restrictions do not conflict with any of the provisions of
this lease or unreasonably interfere with Lessee's use of the Premises, Sculpture Garden, Multi-
Sensory Gardens, Plaza, exclusive parking spaces and Carriage Lane by Lessee. Lessee agrees to
sign any documents reasonably requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.
35. Performance Under Protest. If at any time a dispute shall arise as to any amount or
sum of money to be paid by one Party to the other under the provisions hereof, the Party against
whom the obligation to pay the money is asserted shall have the right to make payment "under
protest" and such payment shall not be regarded as a voluntary payment and there shall survive
the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or any part thereof,
said Party shall be entitled to recover such sum or so much thereof as it was not legally required
to pay.
36. Authority; Multiple Parties; Execution.
(a) Each individual executing this Lease on behalf of Lessee represents and
warrants that he or she is duly authorized to execute and deliver this Lease on its behalf, and
Lessee shall deliver to the Lessor satisfactory evidence of such authority.
(b) This Lease may be executed by the Parties in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and the same
instrument.
37. Amendments. This Lease may be modified only in writing, signed by the Parties in
interest at the time of the modification. As long as they do not materially change Lessee's
obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to
this Lease as may be reasonably required by a Lender in connection with the obtaining of normal
financing or refinancing of the Premises.
21
Palm Springs Art Museum,Palm Desert Lease 7/2/2010
38. Americans with Disabilities Act. Since compliance with the Americans with
Disabilities Act (ADA) is dependent upon Lessee's specific use of the Premises, Lessor makes
no warranty or representation as to whether or not the Premises comply with ADA or any similar
legislation. In the event that Lessee's use of the Premises requires modifications or additions to
the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary
modifications and/or additions at Lessee's expense.
39. Nondiscrimination. The Lessee herein covenants by and for himself or herself, his or
her heirs, executors, administrators, and assigns, and all persons claiming under or through him
or her, and this lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry,
in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises
herein leased nor shall the Lessee himself, or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants,
or vendees in the premises herein leased.
40. Memorandum of Lease. Upon written request by Lessor, Lessee shall execute,
acknowledge and return to Lessor for recording Memorandum of Lease evidencing this Lease.
ATTENTION: LESSEE SHOULD RETAIN APPROPRIATE CONSULTANTS TO
REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID
INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES,
THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND
OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR
LESSEE'S INTENDED USE.
22
Palm Springs Art Museum,Palm Desert Lease 7/2/2010
The parties hereto have executed this Lease at the place and on the dates specified above their
respective signatures.
LESSOR: LESSEE:
CITY OF PALM DESERT, a public body, PALM SPRINGS ART MUSEUM,
corporate and politic a non-profit agency
By:I z%G B
_ Y
John Wo uth Mr. Harold Meyerman
City M er Chairman of the Board of Trustees
Address: 73-510 Fred Waring Drive
Palm Desert, California 92660
Telephone: (760) 346-0611 By:
Facsimile: (760) 341-6372 Dr. Leven Nash
Executive-Director
ATTEST:
Auks_ � 'ty Clerk
APPROVED AS TO FORM:
BEST, BEST & KRIEGER,
a professional corporation
By: (76,--/ 6/
23
Exhibit "A"
LEGAL DESCRIPTION OF THE
LAND COMPRISING PART OF THE PREMISES
Parcel 4 of Parcel Map No. 30226, in the City of Palm Desert, County of Riverside, State of
California as per map filed in Book 203, Pages 16 to 19 inclusive of Parcel Maps in the
office of the County Recorder of said county. APN: 640-370-004
A-l
Palm Springs Art Museum,Palm Desert Lease 7/2/2010
. ,
Exhibit "A-1"
Site Plan
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A-2
Palm Springs Art Museum.Palm Desert Lease 7/2/2010
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Exhibit "A-3"
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A-4
Palm Springs Art Museum,Palm Desert Lease 7/2/2010
Exhibit "B"
LESSEE'S WORK
[This exhibit is provisional. A complete and definitive list of tenant improvements will be
submitted prior to the commencement of any improvements.]
1. Replace carpeting in gallery spaces with engineered hardwood floor
2. Relocation or demolition of selective interior, non-load-bearing walls
3. Alteration of art lighting systems and addition of fixtures
4. Installation of double glass door on back of building for art deliveries
5. Renovation of outside patio area to include a loading ramp
6. Installation of exterior signage and banners
7. Tinting of selective windows with light and heat reducing film
8. Installation of technical equipment (computers, server, phone system)
9. Installation of cabinets for display of shop materials
B-1
Palm Springs Art Museum,Palm Desert Lease 7/2/2010
Exhibit"C"
SPECIFIC LEASE TERMS AND CONDITIONS
CITY OF PALM DESERT, LESSOR
PALM SPRINGS ART MUSEUM, LESSEE
1. Operating Expenses/CAM Charges: Lessee's share of operating and maintenance
expenses shall be payable by Lessee on a monthly basis. For the initial fiscal year of
2011-2012, the Common Area Maintenance (CAM) charges will be $715.58 per
month. The monthly charges shall be estimated and adjusted (on the same pro rata
basis) on an annual basis beginning on July 1st of each year.
2. LEED Certification: Lessee shall make no improvements and use only equipment
and products that will not negate the LEED certification status of the building or its
contents.
3. Building/Garden/Site Modifications: Subject to the provisions of the Lease dealing
with Lessor's consent and Lessee's rights, any and all modifications to the building
(including the placement of signage) or Nonexclusive Priority Use Areas by Lessee
are subject to review and approval of Lessor prior to any modification taking place,
which approval will not be unreasonable withheld.
4. Interior Maintenance: It will be the Lessee's responsibility to maintain the interior
areas of the leased premises. Lessee will maintain or hire janitorial service, at Lessee
expense, sufficient to maintain the interior in a clean, well maintained condition,
necessary to eliminate odors, all visible dust, dirt, litter, trash, stains, etc. to the
greatest practical degree possible.
5. City of Palm Desert Smoke Free Ordinance: The City of Palm Desert Ordinance No.
1007 prohibits smoking within certain public areas in the City of Palm Desert;
indicated specifically by Section (B) Paragraph 3 (c) and Section (B) Paragraph 2.
The Ordinance prohibits smoking within the office areas, conference rooms, atrium
and forty (40) feet from the entrances and exits of the building. The Ordinance was
approved and adopted on October 25, 2001 by the City Council of the City of Palm
Desert.
6. Recycling: Per AB939, the City of Palm Desert is required to divert 50%of its waste
from the landfill and implement diversion programs. In order to meet this mandate,
the City, all City owned facilities, and contractors performing work for the City, are
required to participate in recycling programs that relate to the business activity as
well as recycling of other materials banned from landfills, (e.g. chemicals, batteries,
electronic waste, construction and demolition waste, bottles, cans, paper, plastic, etc.)
Therefore, the Lessee agrees to participate in the City of Palm Desert's recycling
programs, (office recycling, household hazardous waste, etc.). The City shall provide
recycling containers and education of staff/employees.
7. Business Related Expenses: It will be the Lessee's responsibility and expense to
obtain any and all required licenses, permits, etc., relating to the operation of their
business.
Initials
C-1
Palm Springs Art Museum,Palm Desert Lease 7/2/2010
8. Real Property Taxes: Both Lessor and Lessee are property tax exempt entities.
However, any real estate taxes or assessments which are assessed against the
Premises, if any, are the responsibility of Lessee for payment.
9. Lessor to maintain all exterior landscaping and related irrigations systems on
Premises and Nonexclusive Use Areas.
10. Lessee to reimburse Lessor for property insurance deductibles when damage to the
Premises was caused by Lessee clients, customers, donors, etc. Lessee to reimburse
Lessor fully for any damage caused by Lessee or its agents.
11. Museum to be known as "Palm Springs Art Museum
Palm Desert"
12. Residents of City of Palm Desert will receive a special benefit package.
Initials
C-2
Palm Springs Art Museum.Palm Desert Lease 7/22010
............
••..,
CITY OF PHil DESERT
73-510 FREI) WARING) DRIVE
•
{' • ' PALM DESERT, CALIFORNIA 92260-2S78
+ •
TEL: 760 346-0611
•
, . .• • FAX: 760 340-0574
a? ..
info€'palm-dcscrr.urg
May 20, 2011
Steven Nash, Ph. D.
Executive Director
Palm Springs Art Museum
101 Museum Drive
Palm Springs, California 92262
Dear Dr. Nash:
Subject: Contract No. C29860— LEASE WITH PALM SPRINGS ART
MUSEUM AT ENTRADA DEL PASEO — First Amendment
At its regular meeting of May 12, 2011, the Palm Desert City Council considered
and approved the subject First Amendment to Lease and authorized the
City Manager to execute same.
Enclosed for your records is a fully executed First Amendment. Please let us know
if we can answer any questions or provide further assistance.
Sincerely,
RACHELLE D. KLASSEN, CMC '---
CITY CLERK
rdk
Enclosure (as noted)
cc/enc: John M. Wohlmuth, City Manager/RDA Executive Director
Stephen Y. Aryan, Assistant to the City Manager
Finance Department
• •,amINMf,N NM.
FIRST AMENDMENT TO LEASE
CONTRACT NO. C29860
This First Amendment to Lease ("First Amendment"), dated May 6, 2011, is entered into
by and between the CITY OF PALM DESERT, a public body, corporate and politic ("Lessor")
and the PALM SPRINGS ART MUSEUM, INC., a California non-profit corporation ("Lessee")
(collectively the "Parties" or individually a "Party").
WHEREAS, the Parties entered into that certain lease agreement dated July 1, 2010
(the "Lease") for the Premises and nonexclusive area identified in paragraph 1.2 of the Lease;
and
WHEREAS, the Parties agreed use for the Premises was the operation of an art
museum and sculpture garden, among other things, as set forth in paragraph 1.6; and
WHEREAS, paragraph 1.8 of the Lease contemplates Lessee undertaking fundraising
activities in connection with its obligations under the Lease and further states that Lessor shall
reasonably assist Lessee in Lessee's fundraising efforts; and
WHEREAS, Lessee desires to provide naming opportunities on the Premises and in and
about the nonexclusive area to donors as part of its fundraising activities and further seeks the
consent of Lessor as set forth herein for this purpose; and
WHEREAS, all defined terms in the Lease shall have the same meaning in this First
Amendment unless the context otherwise requires.
NOW, THEREFORE, in furtherance of the above-stated recitals, and for consideration,
the adequacy and sufficiency whereof is hereby acknowledged, the Parties do hereby agree as
follows:
1. Lessee shall have the following signage rights and naming opportunities for use
in conjunction with its fundraising activities including the Premises, exterior and interior, and the
Nonexclusive Use Area (collectively "Signage Rights"):
a. The Premises.
72500.00001\5900023.1 1
Exterior. Lessee shall have the right to prominently post signage on the
exterior building in at least two (2) locations subject to the City approval process which reads:
Palm Springs Art Museum
at Palm Desert
(donor name, e.g., The GALEN)
Lessee shall have the right to replace the existing address located over the front
entrance of the building with the donor name (e.g., The GALEN) only if approved by the Fire
Department.
Interior. Lessee shall also have the right to prominently post signage on
the interior of the building at such locations as Lessee may select. For example:
Palm Springs Art Museum
at Palm Desert
(donor name, e.g., Anderson Wing)
b. The Nonexclusive Use Areas. Lessee shall have the right to prominently
post signage throughout the Nonexclusive Use Areas at locations selected by Lessee, subject
to the City design review process. For example:
Palm Springs Art Museum
at Palm Desert
(donor name, e.g., Jones Sculpture Garden)
2. Lessee's Signage Rights shall be managed and operate coexistent with the
Lease to Lessee and shall expire upon the termination of the Lease to Lessee. As used herein,
the Nonexclusive Use Areas include all Nonexclusive Priority Use Areas such as the Sculpture
Garden, Plaza, Multi-Sensory Gardens and Carriage Lane including its 14 parking spaces as
set forth in paragraph 2.1 of the Lease.
3. Lessee shall preserve and maintain the "Eric Johnson Memorial Garden" name
and monument as currently situated.
72500.00001\.5900023.1 2
4. Lessee shall comply with all terms of this Amendment and the Lease with Lessor
in performance hereof.
The Parties hereto have executed this First Amendment at the place and on the dates
specified above.
LESSOR: LESSEE:
City of Palm Desert, a public body, Palm Springs Art Museum, Inc.
Corpor. - .nd politic a non-profit corporation
PA/ // , m
By: .:ALA .._ram By:t• ' ohlmuth, City Manager Harold Meyerman, Chairman of the
Board of Trustees
Add -- : 73-510 Fred Waring Drive
Palm Desert, CA 92260 1
B .
Telephone: 760-346-0611 Dr. Steven Nash, Executive Director
Fax: 760-341-6372
ATTEST:
CITY CLERK
irbA
BY: _10° .
Rache e D. lassen, ,C
APPROVED AS TO FORM:
BEST BEST-KRIEGER LLP
By: (z,,,//'
�_
David rmin, City Attorney
72500.00001\5900023.l 3