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SR-08-14-1979-10BTO: Mayor and City Council FROM: City Staff Santa Monica, California, July 12, 1979 � r AUG 1 4 19 7 SUBJECT: Council Approval of Bi -Phase Energy Systems Proposed Sub -lease of a Portion of Basement at 2800 Airport Avenue (Former Army Reserve Facility) to Bryn Mawr Co. Introduction Bi -Phase Energy Systems(Lessee, former Army Reserve Facility, Lease Contract #3159(C.C.S) is proposing to sub -lease approx- imately 2000 square feet of the basement area to the Bryn Mawr Company to conduct wholesale computer equipment operation. Background The Airport Commission at its regular meeting Wednesday, July 11, 1979 formally considered and recommended City approval of the proposed sub - lease. (Note:Said sub -lease term is scheduled to terminate on December 31, 1981, the same termination date of the above Master Lease.) (Additional Note: Pursuant to Paragraph 5 of Bi -Phase Lease Contract #3159(C.C.S.), lessee is committed to pay 1/2 of any monthly sub rental in excess of the basic Bi -Phase rental of $6600.00 per month. Bryn Mawr is paying $550.00 per month, thearef ore no excess payment is required until sub - rentals exceed the $6600.00.) C AUG 1 4 1979 Mayor and City Council -2- July 12, 1979 Alternative Solution None recommended. Recommendation Approve proposed sub - lease. Prepared by: C.V, Fitzgerald, Airport Director Blvd., Sanle Munn.a, WA 8U4Ub 210 -3,4 91 { Research- Cottrell BES -RS -79 -252 June 20, 1979 Mr. Clyde Fitzgerald Airport Director Santa Monica Airport 3200 Airport Avenue Santa Monica, California 90405 Dear Mr. Fitzgerald: Proposed Sublease to Bryn Mawr As I discussed with you, Biphase Energy Systems is proposing to rent a portion of the basement at 2800 Airport Avenue to the Bryn Mawr Company. Per your request, ten copies of the proposed sublease and Application for Commercial Operations permit are enclosed. The originals are in my possession. Please let us know when this item will appear on the Commis- sion's agenda so that we may request City approval of the sublease. Sin rely, r ob'er es e al Counse RS:br Enclosures - noted " .wnY G�:u'i155IUS idk:d�\ AGENDA. APPLICATION FOR COMMERCIAL OPERATIONS PERMIT AT SANTA MONICA MUNICIPAL AIRPORT 1. NAME: 'S�YN <cAlP4Al Y Company or Corporation 2. PRESENT ADDRESS: 3. PROPOSED ACTIVITY: I^/HULESAGf Iii(.' i /14T /onJ DiC �ow:R�71 =,P FE/1 /�i/:rIAL �r>�tiP"2 =w7; (State fully the proposed type of operation) 4. BASE OF OPERATION: 4jXA —[1— Ave �0 rot �/�9f_= �•iti�T �'FLIE� . (Applicant must indicate exact location of proposed operation, giving lessee's name, street address, parcel number, etc.) 5. Is there a similar activity already in operation at this location! Yes_ No x (If yes, application is automatically denied.) 6. EXPERIENCE: List fully years of experience - background in activity applied for - ratings, etc. ` /�Ait oO °nA /io J 3At/cyAw n i e tG�tllla icsj . MAait <fiNy /i4uFirs�Si�S. AHGJ SALES, (attach sheet if added space is needed) 7, rin� ICIA, amnTRNRNT: Attach two copies of a bona fide financial statement of company or individual engaging in activity. i' B.;+ REFERENCES: Moral and ethical business background: Attach two letters {� from responsible citizens attesting to applicants integrity and ability. 1- Application for Commercial Operations Permit: (Continued) 9. BANK REFERENCE: W�S7r -��✓ �A"�'�' ✓��t7 i���0� 2C< Savings Checking 10. Signature of Applicant. toF/ Title: C Date: To be recorded by Airport Department.. Approved by Airport Commissions Denied by Airport Commission Date: Permit issued by City Manager: .q. N J 2600 Airport Blvd., Santa Monica, CA 90406 213.391 -0691 Biphase Energy Systems .. Donald W. Douglas, Jr. jChairman of the Board \ 1 - Research- Cottrell June 20, 1979 TO WHOM IT MAY CONCERN: ,a Bryn Mawr Company is run by two bright young men, Robert j Bruce Arnold and Daryl Canfield. I am most happy.to write this letter of recommendation for them as Robert Arnold is ' my sister's son. tI have known Robert from Day One, so to speak. His father is the son of H. H. Arnold, the Five - Star General of World War II fame, whom I also knew well. Before starting this corporation, Robert was employed by the Rand Corporation here in Santa Monica, and I can vouch for his loyalty, integrity and high standards. I have the opportunity to know Daryl for a few months only, but he seems to be cut from the same cloth as his partner. Donald W. Dougl s r. DWDJR:br SUBLEASE THIS SUBLEASE is entered into as of the lst day of April, 1979, between BIPHASE ENERGY SYSTEMS, INC.; a Delaware corporation (BIPHASE) and BRYN MAWR COMPANY, a partnership (BRYN MAWR). BIPHASE, in consideration of the covenants and conditions herein contained, does hereby lease to BRYN MAWR that certain portion of premises leased by BIPHASE from the City of Santa Monica (CITY) under Contract No. 3159 (CCS) and located at 2800 Airport Avenue, Santa Monica, CA 90405;,said certain por- tion being described as approximately 2,000 square feet of the lower level of the building, being the northeasterly portion thereof (SUBLEASED PORTION), together with normal ingress and egress thereto and therefrom, including use of the main entrance for delivery purposes. No warranty as to the actual number of square feet contained is hereby given. This sublease is made by BIPHASE and BRYN MAWR on the following terms, 'conditions and covenants: 1. PRIORITY: This is a sublease under a lease between BIPHASE and CITY and is subject to all terms, conditions, and covenants in said lease. 2. TERM: The term of this sublease shall be for thirty- three (33) months beginning 1 April 1979 and ending on 31 December 1981. 3. OPTION: Provided that all terms of this sublease have been fully complied with and BRYN MAWR is not in default on the date of notice, BRYN MAWR shall have the right to exercise any or all of three (3) options to extend the term of this sublease for an additional two (2) years each, provided that BIPHASE exercises its option to extend its lease with CITY. BIPHASE has made no representations to BRYN MAWR about its intention to exercise its option and BRYN MAWR understand that - 1 - its rights to extend can only be exercised if BIPHASE exercises its options. In the event BRYN MAWR elects, and is able, to exercise its option, it shall provide written notice to BIPHASE At least seventy (70) days prior to expiration of the term of this sublease. 4. RENTAL: BRYN MAWR shall pay to BIPHASE as rental for the SUBLEASED PORTION the sum of Sixteen Thousand Five Hundred Dollars ($16,500.00) payable in monthly installments of Five Hundred Dollars ($500.00), payable in advance on 1 April 1979 and the first day of each succeeding month, except that the advance rent for the month of December 1951 shall be paid on 1 April 1979. In addition, BRYN MAWR shall pay to BIPHASE the sum of Sixteen Hundred and Fifty Dollars ($1,650.00) payable in monthly installments of Fifty Dollars ($50.00) payable in advance on 1 April 1979 and the first day of each succeeding month, except that advance payment for the month of December 1951 shall be paid 1 April 1979 for four (4) parking spaces plus the use of visitors' spaces as required. 5. IMPROVEMENTS: BIPHASE shall improve the SUBLEASED PORTION in behalf of BRYN MAWR at the start of occupancy. In consideration of said improvements, BRYN MAWR will pay to BIPHASE the sum of Three Hundred and-Fifty Dollars ($350.00) for each and every month of the term of the lease. BRYN MAWR agrees to accept the SUBLEASED PORTION as it exists after said improvements are made, and agrees, at its own expense, to keep the SUBLEASED PORTION in as good condition and repair as it was at such time as improvements are completed, ordinary wear and tear excepted. Upon termination of this sublease, all improvements become the property of _B.IPHASE. 6. OPTION RENTAL: At the commencement of the initial option term, the rental shall be adjusted by multiplying the monthly base rent and parking rent, to wit, Five Hundred and Fifty Dollars ($550.00) by the same factor by which BIPHASE's rent payment under its lease with CITY will be increased. - 2 - The rental for the first option term shall be twenty -four times said increased amount, payable in twenty -four equal install- ments, payable in advance on the first day of each month. A similar adjustment shall be made for each succeeding option term. 7. ASSIGNMENT AND SUBRENTAL: BRYN MAWR shall neither assign this sublease nor sublet the SUBLEASED PORTION without first obtaining the written consent of BIPHASE to do so, which consent shall not be unreasonably withheld. BRYN MAWR under- m v s'r (ft�6l stands that BIPHASE may have to obtain consent from CITY prior to consenting and that consent to one assignment or subletting shall not be deemed a consent to any subsequent assignment or subletting. Any assignment or subletting without prior written consent of BIPHASE shall be void and may, at the option of BIPHASE, terminate this sublease. BIPHASE: shall be entitled to one -half (1/2) of rental collected by BRYN MAWR in excess of the basic rental paid to BIPHASE by BRYN MAWR, including one -half (1/2) of any advance rental. BRYN MAWR shall keep and maintain accurate records and BIPHASE shall have the right to audit same periodically for purposes of verification. 8. MAINTENANCE: BRYN MAWR shall pay for all maintenance in the SUBLEASED PORTION except roof and exterior building maintenance costs. 9. TAXES PROPERTY, INSURANCE UTILITIES: BRYN MAWR shall pay to BIPHASE a pro rata share, based on occupied square foot- age, and usage of all taxes, property insurance, and utilities (electricity, gas, water). Based on this formula, BRYN MAWR agrees that eight and six tenths percent (8.6 %) represents the approximation of their usage under this sublease. 10. LIABILITY at its own expense of Combined Single insurance insuring arising out of the INSURANCE: BRYN MAWR will maintain in effect, /j during the term of this sublease a policy �tyt Limit, Bodily Injury and Property Damage Mj BRYN MAWR and BIPHASE against any liability use, occupancy, or maintenance of the SUBLEASED 3 - PORTION. Such insurance shall be a combined single limit policy in an amount not less that $300,000. The policy shall contain cross liability endorsements and shall insure performance by BRYN MAWR of the indemnity provisions of this Paragraph 10. The limits of said insurance shall not, however, .limit the liability of BRYN MAWR hereunder. Said insurance shall have a Lessor's Protective Liability endorsement attached thereto. If BRYN MAWR shall fail to procure and maintain said insurance, BIPHASE may, but shall not be required to, procure and maintain the same, but at the expense of BRYN MAWR. 11. TERMINATION: BIPHASE shall have the right, on ninety (90) days' written notice to BRYN MAWR, to require that BRYN MAWR vacate the SUBLEASED PORTION so that BIPHASE can use said SUBLEASED PORTION for its :own, and no other, use. Such vacat- ing of the SUBLEASED PREMISES shall terminate this sublease. Notwithstanding anything contained in this Paragraph 11, BIPHASE may not exercise its right prior to 1 January 1980 to make BRYN MAWR vacate by 1 April 1980, at the earliest. 12. LEGAL USE: BRYN MAWR shall maintain SUBLEASED PORTION in a good, sanitary and clean.condition and shall not commit, suffer or permit any waste of the SUBLEASED PORTION or any acts to be done thereon in violation of any law and ordinance and not use or permit the use of said SUBLEASED PORTION for any illegal purpose. 13. ALTERATIONS: BRYN MAWR shall not make material alter- ations or additons upon or to the SUBLEASED PORTION without the prior written consent of BIPHASE and CITY. 14. LAWS and REGULATIONS: BRYN MAWR shall abide by all current and future laws and regulations (noise or otherwise) and hereby waives any and all rights it may have against BIPHASE and CITY arising from damage which may accrue from "said laws and regulations. 15. INDEMNITY: BRYN MAWR shall hold BIPHASE and CITY harmless from any loss or damage arising out of.the use or .- 4 - occupancy of SUBLEASED PORTION.by BRYN MAWR, its servants, guests, or sub - tenants. 16. NOTICES: All notices that may be required to be given under .this. Lease may be served by certified mail, postage pre- paid, addressed.to the parties as follows: CITY OF SANTA MONICA Attention: Mr. Clyde Fitzgerald, Airport Director 1685 Main Street Santa Monica, California 90401 BIPHASE ENERGY SYSTEMS Attention: Chairman of the Board 2800 Airport Avenue Santa Monica, California.. 90405 BRYN MAWR COMPANY Attention: Robert Arnold 2800.Airport Avenue Santa Monica, California 90405 17'. GOVERNMENT RIGHT: This SUBLEASE and all the provisions hereof shall he subject to the paramount rights which the United States Government now has or in the .future may have or acquire, affecting the control, operation, regulation and taking over the Airport for the exclusive or non - exclusive use of the Airport by the United States during time of war or national emergency. 18. CONDEMNATION: If any portion of the SUBLEASED PORTION is taken by condemnation, this SUBLEASE shall remain in effect, except that BRYN MAWR may elect to terminate this SUBLEASE if the remaining portion of the SUBLEASED PORTION is rendered un- suitable for BRYN MAWR's continued use of the SUBLEASED PORTION or if because of circumstances arising out of the same condem- nation BIPHASE decides to exercise its right to terminate its lease. In the event of such election by BRYN MAWR, notice thereof shall.be given to BIPHASE no more than fifteen (15) days after the nature and extent of the taking is finally determined. If any portion of the SUBLEASED PORTION is taken by a condemnation and this sublease remains in full.force and ,O 5 - effect, the minimum rent shall be adjusted to reflect the impairment of.use. Said adjustment shall be negotiated with BIPHASE. 19. ARBITRATION: Any controversy which shall arise between BRYN MAWR and BIPHASE regarding the rights, duties, or liabilities hereunder of either party shall be settled by arbitration. Such arbitration shall be before one disinter- ested arbitrator if one can be agreed upon, otherwise before three disinterested arbitrators, one named by BRYN MAWR, and one by BIPHASE and one by the two thus chosen. The arbitrator or arbitrators shall determine the controversy in accordance with the laws of California as applied to the facts found by him or them. The cost of the arbitration proceeding shall be borne equally by the parties. Executed at Santa Monica, California, on S I d, 1979 CITY OF SANTA MONICA by: Charles K. McClain City Manager A O .1 AS TO FORM b�:SSJtar4c RICHARD L. KNICKERBOCKER BIPHASE ENERGY SYSTEMS, INC. by: ilGt2cz t S Lance Hays, resident BRYN MAWR Robert �irnold, artnner by' >D / Robert Daryl Canf Partner