RENTAL AGREEMENT
By and Between
CITY OF LANCASTER,
a California municipal corporation and charter city
and
CLEAN WATER VENTURES, INC.,
a Nevada corporation
i
TABLE OF CONTENTS
1. SUBJECT OF RENTAL AGREEMENT; DEFINITIONS......................................................1
1.1 Definitions ...................................................................................................................1
2. RENTAL AGREEMENT ........................................................................................................3
3. RENTAL AGREEMENT TERM ............................................................................................3
4. USE OF PARCEL ...................................................................................................................3
4.1 Use of Parcel................................................................................................................3
4.2 Management. ...............................................................................................................3
4.3 Compliance with Law..................................................................................................4
4.4 Affordable Housing Covenant.....................................................................................4
5. RENT.......................................................................................................................................4
5.1 Net Lease.....................................................................................................................4
5.2 Rent. ............................................................................................................................4
5.3 Payment of Rent. .........................................................................................................5
6. UTILITIES AND TAXES .......................................................................................................5
6.1 Utilities. .......................................................................................................................5
6.2 Real Estate Taxes ........................................................................................................5
6.3 Personal Property.........................................................................................................5
6.4 Possessory Interest.......................................................................................................5
7. OWNERSHIP OF IMPROVEMENTS, FIXTURES AND FURNISHINGS ..........................6
7.1 Ownership During Term..............................................................................................6
7.2 Ownership at Termination. ..........................................................................................6
8. MECHANICS LIENS; FAITHFUL PERFORMANCE ..........................................................6
9. MAINTENANCE AND REPAIR............................................................................................6
9.1 Maintenance and Repair Responsibility. .....................................................................6
9.2 Maintenance Standards................................................................................................7
10. ENVIRONMENTAL MATTERS ...........................................................................................7
10.1 Assumption of Responsibility and Liabilities..............................................................7
10.2 Indemnification; Tenant’s Indemnity. .........................................................................8
10.3 Duty to Prevent Hazardous Material Contamination...................................................8
10.4 Obligation of Tenant to Remediate Premises. .............................................................8
10.5 Storage or Handling of Hazardous Materials. .............................................................8
10.6 Environmental Inquiries. .............................................................................................9
10.7 Release of Hazardous Materials. .................................................................................9
11. ALTERATION OF PARCEL IMPROVEMENTS..................................................................9
12. DAMAGE OR DESTRUCTION...........................................................................................10 ii
12.1 Obligation to Repair and Restore Damage Due to
Casualty Covered by Insurance. ................................................................................10
12.2 Continued Operations. ...............................................................................................10
12.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. ..........................................................................................10
13. SALE, ASSIGNMENT, SUBLEASE OR OTHER TRANSFER..........................................11
14. INDEMNITY.........................................................................................................................11
15. INSURANCE.........................................................................................................................12
15.1 Insurance to be Provided by Tenant. .........................................................................12
15.2 Definition of “Full Insurable Value”. ........................................................................12
15.3 General Insurance Provisions. ...................................................................................13
15.4 Tenant’s Insurance Primary.......................................................................................13
15.5 Failure to Maintain Insurance....................................................................................13
15.6 Insurance Proceeds Resulting from Loss or Damage to Improvements. ...................13
16. EMINENT DOMAIN ............................................................................................................14
17. NONDISCRIMINATION......................................................................................................15
18. NONDISCRIMINATION IN EMPLOYMENT ....................................................................15
19. NO RELOCATION BENEFITS; NO PAYMENT FOR LOSS OF GOODWILL ................15
20. COMPLIANCE WITH LAW; PREVAILING WAGES .......................................................15
21. ENTRY AND INSPECTION ................................................................................................16
22. RIGHT TO MAINTAIN........................................................................................................17
23. DEFAULT AND REMEDIES...............................................................................................17
23.1 Events of Default by Tenant......................................................................................17
23.2 Remedies of City. ......................................................................................................18
23.3 Right of City in the Event of Termination of Rental Agreement...............................18
23.4 Rights and Remedies are Cumulative........................................................................19
24. MISCELLANEOUS ..............................................................................................................19
24.1 Governing Law; Interpretation. .................................................................................19
24.2 Legal Actions.............................................................................................................19
24.3 Acceptance of Service of Process..............................................................................19
24.4 Intentionally Omitted.................................................................................................19
24.5 Interest. ......................................................................................................................19
24.6 Notices.......................................................................................................................19
24.7 Time is of the Essence. ..............................................................................................20
24.8 Non-Merger of Fee and Leasehold Estates................................................................20
24.9 Holding Over. ............................................................................................................20
24.10 Conflict of Interest.....................................................................................................20
24.11 Non-Liability of City Officials and Employees.........................................................21
24.12 Relationship...............................................................................................................21 iii
24.13 Waivers and Amendments.........................................................................................21
24.14 Entire Agreement; Duplicate Originals; Counterparts...............................................21
24.15 Severability................................................................................................................21
24.16 Terminology. .............................................................................................................21
24.17 Binding Effect. ..........................................................................................................22
24.18 Force Majeure............................................................................................................22
24.19 Quiet Enjoyment........................................................................................................22
24.20 City Approvals and Actions. .....................................................................................22
24.21 No Third Parties Benefited. .......................................................................................22 EXHIBIT A – PARCEL MAP
EXHIBIT B – PARCEL LEGAL DESCRIPTION
1 RENTAL AGREEMENT
THIS RENTAL AGREEMENT (this “Rental Agreement”) is made as of ___________ ____, 2023 (the “Date of Agreement”), by and between the CITY OF LANCASTER, a California municipal corporation and charter city (the “City” or “Landlord”), and CLEAN WATER VENTURES, INC., a Nevada corporation (the “Tenant”).
1. SUBJECT OF RENTAL AGREEMENT; DEFINITIONS
City presently holds record title (but not beneficial title) as to that certain property described in Exhibit “B” hereto (the “Parcel”). City is endeavoring to acquire beneficial title as to the Parcel.
For a limited, interim period, City desires to rent the Parcel to Tenant on the terms and conditions set forth in this Rental Agreement. The rental of the Parcel for a limited period of time pursuant to this Rental Agreement will benefit “Taxing Agencies” (as defined below) by generating a rental income with respect to the Parcel, by providing for the maintenance of the Parcel by a private party without cost to the City and any attendant burden upon tax revenues that would otherwise be available for the benefit of such Taxing Agencies. The availability of the Parcel to the Tenant hereunder is also beneficial to the Tenant.
1.1 Definitions:
“City” means the City of Lancaster, a California charter city and municipal corporation. “City Manager” means the City Manager of the City or his or her designee. “Commencement Date” means March 1, 2024.
“Conforming Business Activities” means a project to install, operate, and maintain a Clean Water Ventures, Inc. Clean Water-Green Energy system.
“County” shall mean the County of Los Angeles, California. “Default” means the failure of a party to perform any action or covenant required by this Rental Agreement within the time periods provided herein following any applicable notice and opportunity to cure period, as may be set forth herein. “Governmental Requirements” means all laws, ordinances, statutes, codes, rules, regulations, orders, and decrees of the United States, the state, the County, the City, or any other political subdivision in which the Parcel is located, and of any other political subdivision, agency, or instrumentality exercising jurisdiction over the Tenant or the Parcel. “Hazardous Material” or “Hazardous Materials” means and include any substance, material, or waste which is or becomes regulated by any local governmental authority, including the County, the Regional Water Quality Control Board, the State of California, or the United States Government, including, but not limited to, any material or substance which is: (i) defined as a “hazardous waste,” “acutely hazardous waste,” “restricted hazardous waste,” or “extremely hazardous waste” under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the California Health and 2 Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (ii) defined as a “hazardous substance” under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter Presley Tanner Hazardous Substance Account Act); (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory); (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum; (vi) asbestos and/or asbestos containing materials; (vii) lead based paint or any lead based or lead products; (viii) polychlorinated biphenyls, (ix) designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317); (x) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq. (42 U.S.C. Section 6903); (xi) Methyl tertiary Butyl Ether; (xii) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601, et seq. (42 U.S.C. Section 9601); (xiii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any Governmental Requirements either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as “hazardous” or harmful to the environment; and/or (xiv) lead based paint pursuant to and defined in the Lead Based Paint Poisoning Prevention Act, Title X of the 1992 Housing and Community Development Act, 42 U.S.C. § 4800, et seq., specifically §§ 4821-4846, and the implementing regulations thereto. Notwithstanding the foregoing, “Hazardous Materials” shall not include such products in quantities below attainment levels identified in one or more of the enactments identified above as Governmental Requirements, including those products and amounts as are customarily used in the construction, maintenance, rehabilitation, management, operation and residence of residential developments or associated buildings and grounds, or typically used in residential activities in a manner typical of other comparable residential developments, or substances commonly ingested by a significant population living within the Development, including without limitation alcohol, aspirin, tobacco and saccharine. “Hazardous Materials Contamination” means the contamination (whether presently existing or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements on, in, or under the Site by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the Date of Agreement) emanating from the Parcel. “Improvements” means Parcel Improvements.
“Notice” means a notice in the form prescribed by Section 24.6. “Parcel” means that certain real property that is visually depicted on the Parcel Map and legally described in the Parcel Legal Description.
“Parcel Improvements” means any and all improvements currently situated or hereinafter constructed on the Parcel.
“Parcel Legal Description” means the legal description of the Parcel which is attached hereto as Exhibit “B” and incorporated herein.
3 “Parcel Map” means the map of the Parcel which is attached hereto as Exhibit “A” and incorporated herein.
“Rental Agreement” means this Rental Agreement.
“Taxing Agencies” means governmental agencies which receive property tax revenues from that area which includes the Parcel.
“Term” or “Term of the Rental Agreement” means the period commencing as of the Commencement Date of this Rental Agreement and ending June 18, 2043, or upon earlier termination by either Party as provided herein.
2. RENTAL AGREEMENT
City, for and in consideration of the rents, covenants, and agreements hereinafter reserved and contained on the part of Tenant to be paid, kept, performed, and observed by Tenant, hereby rents to Tenant, and Tenant hereby rents from City, the Parcel. Except as expressly provided to the contrary in this Rental Agreement, reference to the Parcel is to the described land, exclusive of any Improvements now or hereafter located on the land, notwithstanding that any such Improvements may or shall be construed as affixed to and as constituting part of the Parcel.
3. RENTAL AGREEMENT TERM
Tenant rents the Parcel from City and City rents the Parcel to Tenant for the Term.
4. USE OF PARCEL
4.1 Use of Parcel. Tenant covenants and agrees for itself, its successors and assigns, that during the Term, Tenant shall operate and use the Parcel solely for the operation of Clean Water Ventures, Inc. Clean Water – Green Energy Systems and the production of clean water and green hydrogen and other clean coproducts. Tenant’s use of the Parcel shall conform to and comply with all applicable laws. In the event Tenant proposes to construct any improvement(s) upon the Parcel, Tenant shall apply for and obtain all necessary permits and shall pay all fees associated therewith and shall thereafter complete such improvement(s). Prior and as a condition to constructing any improvement(s) upon the Parcel, Tenant shall seek and obtain Landlord’s written consent, which consent may be granted, conditionally granted, or refused at the sole discretion of the City Manager.
4.2 Management. Tenant shall manage or cause the Parcel and Improvements to be managed in a prudent and business-like manner, consistent with other Clean Water Ventures, Inc. or similar facilities in Southern California. For purposes of this Rental Agreement, the term “Mismanagement” shall mean management of the Improvements in a manner which violates any provision of this Rental Agreement and includes, but is not limited to, the following:
•Failing to timely maintain the Improvements in accordance with this Rental Agreement;
4 •Failing to cooperate with the Los Angeles County Sheriff’s Department to the extent necessary in order to maintain a crime-free environment on the Parcel.
Tenant shall use its best efforts to correct any Mismanagement at the earliest feasible time.
The provisions of this Section 4.2 are in addition to, and do not limit, the City’s other rights and remedies provided in this Rental Agreement.
4.3 Compliance with Law. Tenant shall not use the Parcel or the Improvements for any purpose that is in violation of any law, ordinance, or regulation of any federal, state, county or local governmental agency, body, or entity or for any use other than Conforming Business Activities. Tenant shall not maintain or commit any nuisance or unlawful conduct on the Parcel or the Improvements.
4.4 Affordable Housing Covenant. If ten (10) or more residential units are developed on the Parcel, not less than fifteen percent (15%) of the total number of residential units developed on the Parcel shall be sold or rented at affordable housing cost, as defined in Section 50052.5 of the California Health and Safety Code, or affordable rent, as defined in Section 50053 of the California Health and Safety Code, to lower income households, as defined in Section 50079.5 of the California Health and Safety Code. Rental units shall remain affordable to and occupied by lower income households for a period of fifty-five (55) years for rental housing and forty-five (45) years for ownership housing. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with the provisions of paragraph (2) of subdivision (c) of 65915 of the California Government Code. These requirements shall be covenants or restrictions running with the land and shall be enforceable against any owner and/or lessee who violates a covenant or restriction and each successor-in-interest who continues the violation by any of the entities described in subdivisions (a) to (f), inclusive, of Section 54222.5 of the California Government Code.
5. RENT
5.1 Net Lease. It is the intent of the parties hereto that the rent provided herein shall be absolutely net to City and that Tenant shall pay all costs, taxes, real estate taxes, charges, and expenses of every kind and nature against the Parcel and the Improvements which may arise or become due during the Term, and which, except for execution hereof, would or could have been payable by City.
5.2 Rent. As of the first day of each month during the Term, Tenant agrees to and shall pay monthly base rent as set forth in this Section 5.2 (the “Base Rent”), which shall be payable on the first day of each month that this Rental Agreement remains in effect. During the first year of the Term, the Base Rent amount shall be $2,841.66. The Base Rent shall be increased by three percent (3%) beginning on the first anniversary of the Commencement Date, and on each anniversary thereafter for the duration of the Term. The annual Base Rent increase provided in this Section 5.2 is compounded and cumulative.
5 5.3 Payment of Rent. All Base Rent that becomes due and payable pursuant to this Rental Agreement shall be paid to City at the address of City listed in Section 24.6 or such other place as City may from time to time designate by written notice to the Tenant without notice or demand, and without setoff, counterclaim, abatement, deferment, suspension, or deduction.
6. UTILITIES AND TAXES
6.1 Utilities. Tenant shall pay or cause to be paid all common area charges for gas, electricity, water, sewer, garbage collection, cable television, and other utilities furnished to the Parcel and the Parcel Improvements and all sewer use charges, hookup or similar charges or assessments for utilities levied against the Parcel and the Parcel Improvements for any period included within the Term. Utilities shall be gang metered and Tenant shall pay City’s utility user taxes.
6.2 Real Estate Taxes
6.2.1 As used herein, the term “real estate taxes” shall mean all real estate taxes, municipal or county water and sewer rates and charges, or any other assessments or taxes, which shall be levied against the Parcel or the Parcel Improvements, or any interest therein, and which become a lien thereon and accrue during the Term.
6.2.2 Any real estate taxes which are payable by Tenant hereunder shall be prorated between City and Tenant as of the Commencement Date and then again at the expiration or earlier termination of the Term.
6.2.3 Tenant shall have the right to contest the amount or validity of any real estate taxes, in whole or in part, by appropriate administrative and legal proceedings, without any costs or expense to City, and Tenant may postpone payment of any such contested real estate taxes pending the prosecution of such proceedings and any appeals so long as such proceedings shall not operate to prevent the collection of such real estate taxes and the sale of the Parcel and any Parcel Improvements to satisfy any lien arising out of the nonpayment of the same.
6.2.4 Tenant shall have the right to apply for and may obtain any exemption(s) as may be applicable as to real estate taxes.
6.3 Personal Property. Tenant covenants and agrees to pay before delinquency all personal property taxes, assessments and liens of every kind and nature upon all personality as may be owned by Tenant and from time to time situated within the Parcel and any Parcel Improvements.
6.4 Possessory Interest. The parties acknowledge that the Los Angeles County Assessor may determine that real estate taxes may be assessed as a result of this Rental Agreement.
If any such assessment of real estate taxes is made as to the leasehold interest of Tenant or otherwise as a result of this Rental Agreement, any resulting fees, real estate taxes, and/or other assessments shall be paid by Tenant promptly and prior to delinquency. 6 7. OWNERSHIP OF IMPROVEMENTS, FIXTURES AND FURNISHINGS
7.1 Ownership During Term. All improvements constructed on the Parcel by Tenant as permitted by this Rental Agreement shall, during the Term, shall, as a between Tenant and Landlord, be and remain the property of Landlord. Tenant shall have no right to waste the Parcel Improvements, or to destroy, demolish or remove the Parcel Improvements; further, Tenant’s rights and powers with respect to the Parcel Improvements are subject to the terms and limitations of this Rental Agreement. City and Tenant covenant for themselves and all persons claiming under or through them that the Parcel Improvements are real property.
7.2 Ownership at Termination. Upon termination of this Rental Agreement, whether by expiration of the Term or otherwise, all Parcel Improvements, fixtures and furnishings shall, without compensation to Tenant, as a matter between Landlord and Tenant, remain City’s property, free and clear of all liens, encumbrances, and claims to or against them by Tenant or any third person, firm or entity, including but not limited to any mortgagee or lender, unless otherwise approved by City in writing at its discretion. At the option of the City, the City may require the Tenant to demolish and remove any Parcel Improvements constructed without the City’s consent or approval.
8. MECHANICS LIENS; FAITHFUL PERFORMANCE
Tenant shall not suffer or permit any mechanics’ or materialmen’s liens to be enforced against the fee simple estate as to the Parcel and Parcel Improvements, nor against Tenant’s leasehold interest therein by reason of work, labor, services or materials supplied or claimed to have been supplied to Tenant or anyone holding the Parcel and the Improvements, or any part thereof, through or under Tenant, and Tenant agrees to defend, indemnify, and hold each of City, officials, employees, agents, and representatives, harmless against such liens. If any such lien shall at any time be filed against the Parcel or any Parcel Improvements, Tenant shall, within thirty (30) days after notice to Tenant of the filing thereof, cause the same to be discharged of record; provided, however, that Tenant shall have the right to contest the amount or validity, in whole or in part, of any such lien by appropriate proceedings but in such event, Tenant shall notify City and promptly bond such lien in the manner authorized by law with a responsible surety company qualified to do business in the State of California or provide other security acceptable to City. Tenant shall prosecute such proceedings with due diligence. Nothing in this Rental Agreement shall be deemed to be, nor shall be construed in any way to constitute, the consent or request of City, express or implied, by inference or otherwise, to any person, firm or limited partnership for the performance of any labor or the furnishing of any materials for any construction, rebuilding, alteration or repair of or to the Parcel, the Parcel Improvements, or any part thereof. Prior to commencement of construction of the Improvements on the Parcel, or any repair or alteration thereto having a cost in excess of Five Thousand Dollars ($5,000.00), Tenant shall give City not less than thirty (30) days advance notice in writing of intention to begin said activity in order that nonresponsibility notices may be posted and recorded as provided by State and local laws.
9. MAINTENANCE AND REPAIR.
9.1 Maintenance and Repair Responsibility. Tenant agrees to assume full responsibility for the management, operation and maintenance of the Parcel Improvements and the Parcel throughout the Term without expense to City, and to perform all repairs and replacements 7 necessary to maintain and preserve the Parcel Improvements and the Parcel in good repair, in a neat, clean, safe and orderly condition reasonably satisfactory to City and in compliance with all applicable laws. Tenant agrees that the City shall not be required to perform any maintenance, repairs or services or to assume any expense in connection with the Parcel Improvements and the Parcel. Tenant hereby waives all rights to make repairs or to cause any work to be performed at the expense of City as provided in Sections 1941 and 1942 of the California Civil Code.
9.2 Maintenance Standards. The following standards shall be satisfied by Tenant and its maintenance staff, contractors, and/or subcontractors:
9.2.1 Tenant shall maintain the Parcel Improvements, in a safe fashion suitable for a process manufacturing facility. The Tenant agrees to provide utility services, administrative services, supplies, contract services, maintenance, and management.
9.2.2 Landscape maintenance (to the extent there is landscaping) shall include, but not be limited to: watering/irrigation; fertilization; mowing, edging, and trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road conditions and visibility, and optimum irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees.
9.2.3 Clean-up maintenance shall include, but not be limited to:
maintenance of all private paths, parking areas, driveways and other paved areas in clean and weed- free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers.
9.2.4 The Parcel Improvements shall be maintained according to the approved construction and architectural plans and design scheme, as the same may be amended from time; provided, however, that the City has approved such amendment.
9.2.5 All maintenance work shall conform to all applicable federal and state Occupation Safety and Health Act standards and regulations for the performance of maintenance.
9.2.6 Any and all chemicals, unhealthy substances, and pesticides used in and during maintenance shall be applied only by persons in strict accordance with all governing regulations.
9.2.7 Parking lots, lighting fixtures, trash enclosures, and all areas shall be kept free from any accumulation of debris or waste materials by regularly scheduled maintenance.
10. ENVIRONMENTAL MATTERS
10.1 Assumption of Responsibility and Liabilities. Tenant assumes any and all responsibility and Liabilities (as defined in Section 10.2 of this Rental Agreement) for all Hazardous 8 Materials Contamination of the Parcel which occurs during the Term of this Rental Agreement or extension thereof.
10.2 Indemnification; Tenant’s Indemnity. Tenant shall save, protect, defend, indemnify and hold harmless the City and their respective officers, officials, employees, members, and agents from and against any and all liabilities, suits, actions, claims, demands, penalties, damages (including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses (including, without limitation, consultants’ fees, investigation and laboratory fees, reasonable attorneys’ fees and remedial and response costs) (the foregoing are hereinafter collectively referred to as “Liabilities”) which may now or in the future be incurred or suffered by the City and its respective officers, officials, employees, members, or agents by reason of, resulting from, in connection with, or arising in any manner whatsoever as a direct or indirect result of the presence on or under, or escape, seepage, leakage, spillage, discharge, emission or release from the Parcel of any Hazardous Materials or Hazardous Materials Contamination first arising or occurring after the Commencement Date, including any Liabilities incurred under any Governmental Requirements relating to such Hazardous Materials or Hazardous Materials Contamination. Tenant’s obligations under this Section 10.2 shall survive the expiration of this Rental Agreement and shall not merge with any grant deed, special warranty deed or quitclaim deed.
10.3 Duty to Prevent Hazardous Material Contamination. Tenant shall take all necessary precautions to prevent the release of any Hazardous Materials into the environment. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. In addition, Tenant shall install and utilize such equipment and implement and adhere to such procedures as are consistent with the standards generally applied by apartment complexes in Los Angeles County, California as respects the disclosure, storage, use, removal, and disposal of Hazardous Materials.
10.4 Obligation of Tenant to Remediate Premises. Notwithstanding the obligation of Tenant to indemnify the City pursuant to Section 10.2 of this Rental Agreement, Tenant shall, at its sole cost and expense, promptly take (i) all actions required by any federal, state, regional, or local governmental agency or political subdivision or any Governmental Requirements and (ii) all actions necessary to make full economic use of the Parcel for the purposes described in this Rental Agreement, which requirements or necessity arise from the presence upon, about or beneath the Parcel of any Hazardous Materials or Hazardous Materials Contamination first arising or occurring after the Commencement Date. Such actions shall include, but not be limited to, the investigation of the environmental condition of the Parcel, the preparation of any feasibility studies or reports and the performance of any cleanup, remedial, removal or restoration work. Tenant shall take all actions necessary to promptly restore the Parcel to an environmentally sound condition necessitated as a result of the presence upon, about or beneath the Parcel first arising after the Commencement Date for the uses contemplated by this Rental Agreement notwithstanding any lesser standard of remediation allowable under applicable Governmental Requirements.
10.5 Storage or Handling of Hazardous Materials. Tenant, at its sole cost and expense, shall comply with all Governmental Requirements for the storage, use, transportation, handling and disposal of Hazardous Materials on or about the Parcel. In the event Tenant does store, use, transport, handle or dispose of any Hazardous Materials, Tenant shall notify City in writing at 9 least ten (10) days prior to their first appearance on the Parcel and Tenant’s failure to do so shall constitute a material default under this Rental Agreement. Tenant shall conduct all monitoring activities required or prescribed by applicable Governmental Requirements, and shall, at its sole cost and expense, comply with all posting requirements of Proposition 65 or any other similarly enacted Governmental Requirements. In addition, in the event of any complaint or governmental inquiry, or if otherwise deemed necessary by City in its reasonable judgment, City may require Tenant, at Tenant’s sole cost and expense, to conduct specific monitoring or testing activities with respect to Hazardous Materials on the Parcel. Tenant’s monitoring programs shall be in compliance with applicable Governmental Requirements, and any program related to the specific monitoring of or testing for Hazardous Materials on the Parcel, shall be satisfactory to City, in City’s reasonable discretion. Tenant shall further be solely responsible and shall reimburse City for all costs and expenses incurred by City arising out of or connected with the removal, clean-up and/or restoration work and materials necessary to return the Parcel and any property adjacent to the Parcel affected by Hazardous Materials emanating from the Parcel to their condition existing at the time of the commencement of the Term. Tenant’s obligations hereunder shall survive the termination of this Rental Agreement and shall not merge with any grant deed.
10.6 Environmental Inquiries. Tenant shall notify City, and provide to City·a copy or copies, of the following environmental permits, disclosures, applications, entitlements or inquiries relating to the Parcel: notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self-reporting requirements, and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks, and Tenant shall report to City, as soon as possible after each incident, any unusual, potentially important incidents.
10.7 Release of Hazardous Materials. In the event of a release of any Hazardous Materials into the environment, Tenant shall, as soon as possible after the release, furnish to City a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of City, Tenant shall furnish to City a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Parcel including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential.
11. ALTERATION OF PARCEL IMPROVEMENTS
Tenant shall not make or permit to be made any material structural alteration of, structural addition to or change to any Parcel Improvements within the public right of way, or change to any of the Improvements (which shall be deemed to be material if the cost or value of such structural alteration(s) or structural addition(s) without the prior written approval of the City Manager, nor demolish all or any material part of the Improvements without the prior written consent of the City Manager; provided, however, that the foregoing shall not prohibit or restrict the repair and/or replacement of the Parcel Improvements by Tenant in accordance with Section 10 hereof. In requesting such consent Tenant shall submit to City detailed plans and specifications of the proposed work and an explanation of the need and reasons therefor. This provision shall not limit or set aside any obligation of Tenant under this Rental Agreement to maintain the Parcel Improvements and the Parcel in a clean and safe condition, including structural repair and restoration of damaged 10 Improvements. City shall not be obligated by this Rental Agreement to make any improvements to the Parcel or to assume any expense therefor. Tenant shall not commit or suffer to be committed any waste or impairment of the Parcel or the Parcel Improvements, or any part thereof, except as otherwise permitted pursuant to this Rental Agreement. Tenant agrees to keep the Parcel and the Parcel Improvements clean and clear of refuse and obstructions, and to dispose of all garbage, trash and rubbish in a manner satisfactory to City.
12. DAMAGE OR DESTRUCTION
12.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance. Subject to Section 13.3 below, if the Parcel Improvements shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Tenant, Tenant shall promptly proceed to obtain insurance proceeds and take all steps necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Improvements to substantially the same condition as the Improvements are required to be maintained in pursuant to this Rental Agreement, whether or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or restoration, and Tenant shall complete the same as soon as possible thereafter so that the Improvements can continue to be operated and occupied in accordance with the Rental Agreement.
Subject to Section 24.19, in no event shall the repair, replacement, or restoration period exceed the lesser of (i) ninety (90) days from the date Tenant obtains insurance proceeds or (ii) the remainder of the Term unless the City Manager, in his or her sole and absolute discretion, approves a longer period of time. City shall cooperate with Tenant, at no expense to City, in obtaining any governmental permits required for the repair, replacement, or restoration. If, however, the then-existing laws of any other governmental agencies with jurisdiction over the Parcel do not permit the repair, replacement, or restoration, Tenant may elect not to repair, replace, or restore the Improvements by giving notice to City (in which event Tenant will be entitled to all insurance proceeds but Tenant shall be required to remove all debris from the Parcel) or Tenant may reconstruct such other improvements on the Parcel as are consistent with applicable land use regulations and approved by the City, the City, and the other governmental agency or agencies with jurisdiction. In the event Tenant elects not to repair, replace, or restore and give City notice of such election as provided herein, this Rental Agreement shall terminate.
12.2 Continued Operations. During any period of repair, Tenant may continue, or cause the continuation of, the operation of the Parcel Improvements to the extent reasonably practicable from the standpoint of prudent business management.
12.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. If the Parcel Improvements are completely destroyed or substantially damaged by a casualty for which Tenant is not required to (and has not) insured against, then Tenant shall not be required to repair, replace, or restore such improvements and may elect not to do so by providing City with written notice of election not to repair, replace, or restore within ninety (90) days after such substantial damage or destruction. In such event, Tenant shall remove all debris from the Parcel. As used in this Section 12.3, “substantial damage” caused by a casualty not required to be (and not) covered by insurance shall mean damage or destruction which is twenty-five percent (25%) or more of the replacement cost of the improvements comprising the Parcel Improvements. In the event Tenant 11 does not timely elect not to repair, replace, or restore the Parcel Improvements as set forth in the first sentence of this Section 12.3, Tenant shall be conclusively deemed to have waived its right not to repair, replace, or restore the Parcel Improvements and thereafter Tenant shall promptly commence and complete the repair, replacement, or restoration of the damaged or destroyed Improvements in accordance with Section 12.1 above and continue operation of the Parcel Improvements during the period of repair (if practicable) in accordance with Section 12.2 above. In the event Tenant elects not to repair, replace, or restore, and gives City notice of such election as provided herein, this Rental Agreement shall terminate.
13. SALE, ASSIGNMENT, SUBLEASE OR OTHER TRANSFER
Except for the grant of an easement or license to the City, Tenant shall not sell, assign, sublease, or otherwise transfer this Rental Agreement or any right therein, nor make any total or partial sale, assignment, sublease, or transfer in any other mode or form of the whole or any part of the Parcel or the Parcel Improvements (each of which events is referred to in this Rental Agreement as an “Assignment”), without prior written approval of City to be given, withheld or denied at the sole and absolute discretion of City. The term “Assignment” shall be deemed to include (without limitation) all refinancing thereof and any other loans approved by City. Any purported assignment without the prior written consent of City shall be made null and void and shall confer no rights whatsoever upon any purported assignee or transferee. Notwithstanding any provision in this Section 13 to the contrary, in no event shall Tenant make any assignment which would or could be effective beyond the Term without the prior consent of the City Manager, which approval may be granted, conditionally granted, or refused at the sole and absolute discretion of the City Manager.
14. INDEMNITY
During the Term, Tenant agrees that the City and its respective their agents, officers, representatives, members and employees, shall not be liable for any claims, liabilities, penalties, fines or for any damage to the goods, properties or effects of Tenant, its sublessees or representatives, agents, employees, guests, licensees, invitees, patrons or clientele or of any other person whomsoever, nor for personal injuries to, or deaths of any persons, whether caused by or resulting from any act or omission of Tenant or its sublessees or any other person on or about the Parcel caused or contributed to by Tenant or as a result of the Improvements, or in connection with the operation thereof, or from any defect in the Parcel or the Improvements, or from any displacement of tenants or liability for relocation assistance pursuant to Government Code Section 7260, et seq., due to the acts of Tenant hereunder. Tenant agrees to indemnify and save free and harmless each of City and its respective authorized agents, ·officers, representatives, members and employees against any and all claims, actions, damages, liability (including reasonable expenses and attorneys’ fees) concerning loss of life, personal injury and/or damage to property arising from or out of any occurrence in, upon or at the Parcel and/or the Improvements or the occupancy or use by Tenant of the Parcel and/or the Improvements or any part thereof, or arising from or out of Tenant’s failure to comply with any provision of this Rental Agreement or otherwise occasioned wholly or in part by any act or omission of Tenant, its agents, representatives, contractors, employees, servants, customers or licensees. Tenant shall not be responsible for (and such indemnity shall not apply to) any acts, errors or omissions of City or its agents, officers, representatives, members, or employees. 12 15. INSURANCE
15.1 Insurance to be Provided by Tenant. During the Term, Tenant, at its sole cost and expense, shall:
15.1.1 Maintain or cause to be maintained a policy or policies of insurance against loss or damage to the Improvements of all property of an insurable nature located upon the Parcel, resulting from fire, lightning, vandalism, malicious mischief, and such other perils ordinarily included in extended coverage fire insurance and casualty loss policies.
15.1.2 Maintain or cause to be maintained, comprehensive general liability insurance with respect to the Parcel and the Improvements and the operations of the Tenant in, on or about the Parcel and the Improvements, including, but not limited to, owned and hired motor vehicle liability, cross liability and severability of interests, personal injury, XC&U, blanket contractual, owners protective broad form property damage, and product/completed operations liability coverage in an amount not less than Two Million Dollars ($2,000,000), combined single limit, public liability insurance to protect against loss from liability for damages on account of personal injury, including death therefrom, suffered or alleged to be suffered by any person or persons whomsoever on or about the Parcel and the Improvements, or in connection with the operation thereof, resulting directly or indirectly from any acts or activities of Tenant or its sublessees, or any person acting for Tenant, or under their respective control or direction, and also to protect against loss from liability imposed by law for damages to any property of any person occurring on or about the Parcel and the Improvements, or in connection with the operation thereof, caused directly or indirectly by or from acts or activities of Tenant of its sublessees, or any person acting for Tenant, or under their respective control or direction. Such property damage and personal injury insurance shall also provide for and protect against incurring any legal cost in defending claims for alleged loss. Tenant agrees that provisions of this paragraph as to maintenance of insurance shall not be construed as limiting in any way the extent to which Tenant may be held responsible for the payment of damages to persons or property resulting from Tenant’s activities, activities of its sublessees or the activities of any other person or persons for which Tenant is otherwise responsible.
15.1.3 Maintain or cause to be maintained worker’s compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the workers’ compensation laws now in force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu thereof. Such workers’ compensation insurance shall cover all persons employed by Tenant in connection with the Parcel and the Improvements and shall cover full liability for compensation under any such act aforesaid, based upon death or bodily injury claims made by, for on behalf of any person incurring or suffering injury or death in connection with the Parcel or the Improvements or the operation thereof by Tenant.
15.2 Definition of “Full Insurable Value”. The term “Full Insurable Value” as used in this Section 15 shall mean the actual replacement cost (excluding the cost of excavation, foundation and footings below the lowest floor and without deduction for depreciation) of the Improvements, including the cost of construction of the Improvements, architectural and engineering fees, and inspection and supervision. To ascertain the amount of coverage required, Tenant shall cause the Full Insurable Value to be determined (i) by mutual agreement of Tenant and Landlord or, if no 13 such agreement is reached, then (ii) from time to time by appraisal by the insurer or, if no such appraisal is available, by an appraiser mutually acceptable to City and Tenant.
15.3 General Insurance Provisions. All policies of insurance provided for in this Section 15, except for the workers’ compensation insurance, shall name Tenant as the insured and loss payee and City and the City and their respective officers, employees, agents, and representatives, as additional insureds, as their respective interests may appear. Tenant agrees to timely pay all premiums for such insurance and, at its sole cost and expense, to comply and secure compliance with all insurance requirements necessary for the maintenance of such insurance. Tenant agrees to submit policies of all insurance required by this Section 15 of this Rental Agreement, or certificates evidencing the existence thereof, to City on or before the effective date of this Rental Agreement, indicating full coverage of the contractual liability imposed by this Rental Agreement. At least thirty (30) days prior to expiration of any such policy, copies of renewal policies, or certificates evidencing the existence thereof, shall be submitted to City. All policies of insurance required of Tenant herein shall be issued by insurance companies with a general policy holder’s rating of not less than A and a financial rating of not less that Class X, as rated in the most current available “Best’s Key Rating Guide”, and which are qualified to do business in the State of California. All policies or certificates of insurance shall also: (i) provide that such policies shall not be canceled or limited in any manner without at least thirty (30) days prior written notice to City; and (ii) provide that such coverage is primary and not contributing with any insurance as may be obtained by City and shall contain a waiver of subrogation for the benefit of City.
15.4 Tenant’s Insurance Primary. Coverage provided hereunder by Tenant shall be primary insurance and not be contributing with any insurance maintained by City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of City. None of the above-described policies shall require Tenant to meet a deductible or self-insured retention amount of more than Ten Thousand Dollars ($10,000.00) unless first approved in writing by the City Manager. All policies shall be written by good and solvent insurers qualified to do business in California and shall have a policyholder’s rating of A or better in the most recent edition of “Best’s Key Rating Guide -- Property and Casualty.” The required certificate shall be furnished by Tenant at the time set forth herein.
15.5 Failure to Maintain Insurance. If Tenant fails or refuses to procure or maintain insurance as required by this Rental Agreement, City shall have the right, at City’s election, and upon ten (10) days prior notice to Tenant, to procure and maintain such insurance. The premiums paid by City shall be treated as added rent due from Tenant, to be paid on the first day of the month following the date on which the premiums were paid. City shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s).
15.6 Insurance Proceeds Resulting from Loss or Damage to Improvements. All proceeds of insurance with respect to loss or damage to the Parcel Improvements during the term of this Rental Agreement shall be payable, under the provisions of the policy of insurance, to Tenant, and said proceeds shall constitute a trust fund to be used for the restoration, repair and rebuilding of the Parcel Improvements in accordance with plans and specifications approved in writing by City. To the extent that such proceeds exceed the cost of such restoration, repair or rebuilding, then such proceeds shall be retained by the party that purchased the insurance. In the event this Rental 14 Agreement is terminated by mutual agreement of City and Tenant and said Parcel Improvements are not restored, repaired or rebuilt, the insurance proceeds shall be retained by the City.
16. EMINENT DOMAIN
In the event that the Parcel and/or the Parcel Improvements or any part thereof shall be taken for public purposes by any public agency other than the City by condemnation as a result of any action or proceeding in eminent domain, then, as between City and Tenant (or mortgagee, if a mortgage is then in effect), the interests of City and Tenant (or mortgagee) in the award and the effect of the taking upon this Rental Agreement shall be as follows:
•In the event of such taking of only a part of the Parcel, leaving the remainder of the Parcel in such location and in such form, shape and size as to be used effectively and practicably for the conduct thereon of the uses permitted hereunder, this Rental Agreement shall terminate and end as to the portion of the Parcel so taken as of the date title to such portion vests in the condemning authority, but shall continue in full force and effect as to the portion of the Parcel not so taken and from and after such date the rental required by this Rental Agreement to be paid by Tenant to City shall be reduced in the proportion which the number of square feet so taken bears to the total number of square feet in the Parcel.
•In the event of taking of only a part of the Parcel, leaving the remainder of the Parcel in such location, or in such form, shape or reduced size as to render the same not effectively and practicably usable, for the conduct thereon of. the uses permitted hereunder, this Rental Agreement and all right, title and interest thereunder shall cease on the date title to the Parcel or the portion thereof so taken vests in the condemning authority.
•In the event the entire Parcel is taken, this Rental Agreement and all of the right, title and interest thereunder, shall cease on the date title to the Parcel so taken vests in the condemning authority.
•In the event of any taking under subparagraphs (a), (b) or (c) hereinabove, any award, in its entirety, shall belong to City and Tenant shall have no interest therein. •Notwithstanding the foregoing provisions of this Section 16, City may, in its discretion and without affecting the validity and existence of this Rental Agreement, transfer City’s interests in the Parcel in lieu of condemnation to any authority entitled to exercise the power of eminent domain. • All valuations to be made pursuant to this Section 16, to the extent necessary or convenient, shall be made by the City Manager.
15 •The City agrees that during the Term, provided that this Rental Agreement shall remain in effect, the City shall not exercise eminent domain powers as to the Parcel or the Parcel Improvements.
17. NONDISCRIMINATION
There shall be no discrimination against or segregation of any person or group of persons, on account of sex, marital status, race, color, creed, religion, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Parcel and the Improvements, and Tenant itself or any person claiming under or through it shall not 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, subtenants, sublessees, or vendees thereof or any portion thereof, or in the providing of goods, services, facilities, privileges, advantages and accommodation.
18. NONDISCRIMINATION IN EMPLOYMENT
Tenant, for itself and its successors and assigns, agrees that during the operation of the Parcel Improvements provided for in this Rental Agreement, and during any work of repair or replacement, Tenant shall not discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, marital status, physical or mental disability, sexual orientation, ancestry or national origin, or on the basis of any other category or status not permitted by law.
19. NO RELOCATION BENEFITS; NO PAYMENT FOR LOSS OF GOODWILL Tenant agrees and acknowledges that, without regard to the time or circumstances associated with the cessation of the Term or the use of the Parcel by Tenant, Tenant shall have no right to relocation assistance or benefits arising from the dispossession of the Tenant or such person or persons regardless of the circumstances thereof (including without limitation with respect to any improvements made to the Parcel). Tenant waives any rights to relocation benefits and/or relocation advisory assistance in connection with the use of the Parcel or the cessation of use of the Parcel. The provisions of this paragraph shall be in addition to and shall not limit the rights and remedies of Landlord as otherwise set forth in this Rental Agreement. The provisions of this Section 19 are a material part of this Lease and, but for such provisions, Landlord would not have entered into this Rental Agreement. Tenant further agrees that, without regard to whether the possession of the Tenant under this Rental Agreement is terminated at any time under Section 23.3, Tenant shall not be entitled to receive any compensation for loss of goodwill; Tenant waives any rights to such remuneration.
20. COMPLIANCE WITH LAW; PREVAILING WAGES
Tenant agrees, at its sole cost and expense, to comply and secure compliance by all contractors and tenants of the Parcel and in connection with the Parcel Improvements, with all the requirements now in force, or which may hereafter be in force, of all municipal, county, state and federal authorities, pertaining to the Parcel and the Parcel Improvements, as well as operations conducted thereon, and to faithfully observe and secure compliance by all contractors and tenants of the Parcel and the Parcel Improvements, with, in the use of the Parcel and the Parcel Improvements all applicable county and 16 municipal ordinances and state and federal statutes now in force or which may hereafter be in force, and to pay before delinquency all taxes, assessments, and fees, if any, assessor levied upon Tenant or the Parcel or the Parcel Improvements, including the land and any buildings, structures, machines, appliances or other improvements of any nature whatsoever, erected, installed or maintained by Tenant or by reason of the business or other activities of Tenant upon or in connection with the Parcel and the Parcel Improvements. Tenant shall use good faith efforts to prevent tenants from maintaining any nuisance or other unlawful conduct on or about the Parcel and shall take such actions as are reasonably required to abate any such violations by tenants of the Parcel and the Parcel Improvements.
The judgment of any court of competent jurisdiction, or the admission of Tenant or any sublessee or permittee in any action or proceeding against them, or any of them, whether City be a party thereto or not, that Tenant, sublessee or permittee has violated any such ordinance or statute in the use of the Parcel or the Parcel Improvements shall be conclusive of that fact as between City and Tenant, or such sublessee or permittee. Tenant shall comply with all applicable laws, regulations, and any applicable labor standards, all of which laws and regulations shall be deemed to be incorporated herein by reference. If Tenant makes improvements to the Parcel, Tenant shall carry out the design, construction and operation of the Improvements in conformity with all applicable laws, including all applicable state labor standards and federal prevailing wage laws (including without limitation provisions for payment of prevailing wages in connection with all construction of the Improvements to the extent applicable), City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Code, the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the California Building Standards Code, Health and Safety Code Section 18900, et seq. Tenant, including but not limited to its contractors and subcontractors, shall comply with Labor Code Section 1720, et seq., and its implementing regulations, regarding the payment of prevailing wages (the “State Prevailing Wage Law”) if applicable and, if applicable, federal prevailing wage law (“Federal Prevailing Wage Law” and, together with State Prevailing Wage Law, “Prevailing Wage Laws”) with regard to the construction of improvements (if any) undertaken by Tenant on the Parcel, but only if and to the extent such sections are applicable to the construction of such improvements.
Tenant shall be solely responsible for determining and effectuating compliance with any applicable Prevailing Wage Laws, and neither the City makes any representation as to the applicability or non- applicability of the Prevailing Wage Laws to improvements (if any) made to the Parcel or any part thereof. To the extent Tenant makes public improvements in the public right of way, Tenant shall effect payment with the Prevailing Wage Laws. Tenant hereby releases from liability, and agrees to indemnify, defend, assume all responsibility for and hold the City, and its respective officers, employees, agents, members and representatives, harmless from any and all claims, demands, actions, suits, proceedings, fines, penalties, damages, expenses resulting from, arising out of, or based upon Tenant’s acts or omissions pertaining to the compliance with the Prevailing Wage Laws as to any improvements to the Parcel.
21. ENTRY AND INSPECTION
In addition to and without limitation to such rights as the City may have as a matter of law, the City reserves and shall have the right between the hours of 8:00 a.m. and 8:00 p.m., upon twenty- four (24) hours prior notice (except in cases of emergency in which case entry may be made at any time and without notice) to Tenant by the City Manager, to enter the Parcel and the Parcel 17 Improvements for the purpose of viewing and ascertaining the condition of the same, or to protect its interests in the Parcel and the Parcel Improvements or to inspect the operations conducted thereon.
This Section 21 shall be within limitation as to the rights of City acting under its police power.
22. RIGHT TO MAINTAIN
In the event that the entry or inspection by City pursuant to Section 21 hereof discloses that the Parcel or the Parcel Improvements are not in a decent, safe, and sanitary condition, City shall have the right, after thirty (30) days written notice to Tenant (except in case of emergency, in which event no notice shall be necessary), to have any necessary maintenance work done for and at the expense of Tenant and Tenant hereby agrees to pay promptly any and all costs incurred by City in having such necessary maintenance work done in order to keep the Parcel and the Parcel Improvements in a decent, safe and sanitary condition. The rights reserved in this Section 22 shall not create any obligations on City or increase obligations elsewhere in this Rental Agreement imposed on City.
23. DEFAULT AND REMEDIES
23.1 Events of Default by Tenant.The occurrence of any one (1) or more of the following shall constitute an event of default hereunder:
23.1.1 Tenant shall fail to continuously operate Conforming Business Activities on the Parcel; or
23.1.2 Tenant shall abandon or surrender the Parcel, or the Parcel Improvements; or
23.1.3 Tenant shall fail or refuse to pay, within ten (10) days of notice from City that the same is due, any installment of rent or any other sum required by this Rental Agreement to be paid by Tenant; or
23.1.4 Tenant shall fail to perform any covenant or condition of this Rental Agreement other than as set forth in subparagraphs (a) or (b) above or paragraphs (e), (h) or (i) below, and any such failure shall not be cured within thirty (30) days following the service on Tenant of a written notice from City specifying the failure complained of, or if it is not practicable to cure or remedy such failure within such thirty (30) day period, then Tenant shall not be deemed to be in default if Tenant shall commence such cure within such thirty (30) day period and thereafter diligently prosecute such cure to completion; or
23.1.5 Subject to any restrictions or limitations placed on City by applicable laws governing bankruptcy, Tenant’s (i) application for, consent to or suffering of the appointment of a receiver, trustee or liquidator for all or for a substantial portion of its assets; (ii) making a general assignment for the benefit of creditors; (iii) admitting in writing its inability to pay its debts or its willingness to be adjudged a bankrupt; (iv) becoming unable to or failing to pay its debts as they mature; (v) being adjudged a bankrupt; (vi) filing a voluntary petition or suffering an involuntary petition under any bankruptcy, arrangement, reorganization or insolvency law (unless in the case of an involuntary petition, the same is dismissed within ninety (90) days of such filing); (vii) convening 18 a meeting of its creditors or any class thereof for purposes of effecting a moratorium, extension or composition of its debts; or (viii) suffering or permitting to continue unstayed and in effect for sixty (60) consecutive days any attachment, levy, execution or seizure of all or a portion of Tenant’s assets or of Tenant’s interest in this Rental Agreement; or
23.1.6 Tenant shall conduct uses on the Parcel which are not Conforming Business Activities; in the event one or more of the foregoing shall occur, then, upon notice having been given by City and the failure to cure within thirty (30) days of such notice, such event shall constitute an event of default under this Rental Agreement.
23.2 Remedies of City.
In the event of any such default as described in Section 23.1, which default has not been timely cured, City may, at its option:
23.2.1 Correct or cause to be corrected said default and charge the costs thereof (including costs incurred by City in enforcing this provision) to the account of Tenant, which charge shall be due and payable within thirty (30) days after presentation by City of a statement of all or part of said costs;
23.2.2 Correct or cause to be corrected said default and pay the costs thereof (including costs incurred by City in enforcing this provision) from the proceeds of any insurance;
23.2.3 Exercise its right to maintain any and all actions at law or suits in equity to compel Tenant to correct or cause to be corrected said default;
23.2.4 Have a receiver appointed to take possession of Tenant’s interest in the Parcel and the Parcel Improvements, with power in said receiver to administer Tenant’s interest in the Parcel and the Parcel Improvements, to collect all funds available to Tenant in connection with its operation and maintenance of the Parcel and the Parcel Improvements; and to perform all other acts consistent with Tenant’s obligation under this Rental Agreement as the court deems proper;
23.2.5 Maintain and operate the Parcel and the Parcel Improvements, without terminating this Rental Agreement; or
23.2.6 Terminate this Rental Agreement by written notice to Tenant of its intention to do so.
23.3 Right of City in the Event of Termination of Rental Agreement. Upon termination of this Rental Agreement pursuant to Section 23.2, it shall be lawful for City to re-enter and repossess the Parcel and the Parcel Improvements and Tenant, in such event, does hereby waive any demand for possession thereof, and agrees to surrender and deliver the Parcel and the Parcel Improvements peaceably to City immediately upon such termination in good order, condition and repair, except for reasonable wear and tear. Tenant agrees that upon such termination, title to all the Parcel Improvements on the Parcel shall vest in City (or remain with City) pursuant to Section 7.2.
Even though Tenant has breached the Rental Agreement and abandoned the Parcel, this Rental Agreement shall continue in effect for so long as City does not terminate Tenant’s right to possession, 19 and City may enforce all of its right and remedies under this Rental Agreement, including, but not limited to, the right to recover the rent as it becomes due under this Rental Agreement. No ejectment, re-entry or other act by or on behalf of City shall constitute a termination unless City gives Tenant notice of termination in writing. Termination of this Rental Agreement shall not relieve or release Tenant from any obligation incurred pursuant to this Rental Agreement prior to the date of such termination. Termination of this Rental Agreement shall not relieve Tenant from the obligation to pay any sum due to City or from any claim for damages against Tenant.
23.4 Rights and Remedies are Cumulative. The remedies provided by this Section 23 are not exclusive and shall be cumulative to all other rights and remedies possessed by City. The exercise by City of one or more such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by Tenant.
24. MISCELLANEOUS
24.1 Governing Law; Interpretation. The laws of the State of California shall govern the interpretation and enforcement of this Rental Agreement. This Rental Agreement shall be reasonably interpreted in light of its purpose to provide for the operation of Conforming Business Activities on the Parcel, all as provided for herein. This Rental Agreement shall be interpreted as if jointly prepared by both parties.
24.2 Legal Actions. In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Rental Agreement.
24.3 Acceptance of Service of Process. In the event that any legal action is commenced by Tenant against City, service of process on City shall be made by personal service upon the City Manager, or in such other manner as may be provided by law. In the event that any legal action is commenced by City against Tenant, service of process on Tenant shall be made by personal service upon Tenant or in such other manner as may be provided by law, and shall be effective whether made within or without the State of California.
24.4 Intentionally Omitted.
24.5 Interest. Any amount due City that is not paid when due shall bear interest from the date such amount becomes due until it is paid. Interest shall be at a rate equal to the lesser of (i) seven percent (7%) per annum, compounded annually, on the first day of the month such amount becomes due, and (ii) the maximum rate permitted by applicable law.
24.6 Notices. All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder by either party to the other shall be in writing and shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified or registered mail, return receipt requested, postage prepaid, and addressed as follows:
20 To City: City of Lancaster
44933 Fern Avenue
Lancaster, California 93534
Attention: City Manager
Copy to: Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Allison E. Burns
To Tenant: Clean Water Ventures, Inc.
81 Ocean State Drive
North Kingstown, Rhode Island 02852
Attention: Roy DiBenerdini
or to such other address as either party shall later designate for such purposes by written notice to the other party. Notices shall be deemed effective upon receipt provided that the party to whom notice is being given has notified the other party of its current address, and otherwise upon the earlier of personal receipt or within seven (7) days after delivery thereof to the address(es) as provided above; provided, how.ever that refusal to accept delivery after reasonable attempts thereto shall constitute receipt. Notice to either Mike Sullivan or Tenant shall be deemed to constitute notice to each of Mike Sullivan and the Tenant. Any notices attempted to be delivered to an address from which the receiving party has moved without notice to the delivering party shall be effective on the third day after the attempted delivery or deposit in the United States mail.
24.7 Time is of the Essence. Time is of the essence in the performance of the terms and conditions of this Rental Agreement.
24.8 Non-Merger of Fee and Leasehold Estates. If both City’s and Tenant’s estates in the Parcel or·the Parcel Improvements or both become vested in the same owner, this Rental Agreement shall nevertheless not be destroyed by application of the doctrine of merger except at the express election of City. The voluntary or other surrender of this Rental Agreement by Tenant, or a mutual cancellation thereof, shall not work as a merger and shall, at the option of City, terminate all or any existing sublease or subtenancies or may, at the option of City, operate as an assignment to City of any or all such existing subleases or subtenancies.
24.9 Holding Over. The occupancy of the Parcel after the expiration of the Term of this Rental Agreement shall be construed to be a tenancy from month to month at a fair market rent to be established by the City Manager at his discretion upon consultation with the Tenant (and which shall be not less than $300 per day), and all other terms and conditions of this Rental Agreement shall continue in full force and effect.
24.10 Conflict of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in this Rental Agreement nor shall any such member, official or 21 employee participate in any decision relating to the Rental Agreement which affects his personal interests or the interests of any limited partnership, partnership or association in which he is directly or indirectly interested. Tenant warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Rental Agreement.
24.11 Non-Liability of City Officials and Employees. No member, official, officer, employee, agent, member, or representative of City shall be personally liable to Tenant, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Tenant or successor or on any obligations under the terms of this Rental Agreement.
24.12 Relationship. The relationship between the parties hereto shall at all times be deemed to be that of landlord and tenant. The parties do not intend, nor shall this Rental Agreement be deemed, to create a partnership or joint venture.
24.13 Waivers and Amendments. All waivers of the provisions of this Rental Agreement must be in writing and signed by the appropriate authorities of City or Tenant. The waiver by City of any breach of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition, or any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by City shall not be deemed to be a waiver of any preceding breach of Tenant of any term, covenant or condition of this Rental Agreement, regardless of City’s knowledge of such preceding breach at the time of acceptance of such rent. Failure on the part of City to require or exact full and complete compliance with any of the covenants or conditions of this Rental Agreement shall not be construed as in any manner changing the terms hereof and shall not prevent City from enforcing any provision hereof.
All amendments or modifications hereto must be in writing and signed by the appropriate authorities of City and Tenant.
24.14 Entire Agreement; Duplicate Originals; Counterparts. This Rental Agreement sets forth the entire understanding of the parties with respect to Tenant’s ground lease of the Parcel. This Rental Agreement is executed in three (3) duplicate originals and counterparts, each of which is deemed to be an original. Exhibits to this Rental Agreement are incorporated by reference herein. Neither this Rental Agreement nor any memorandum with respect thereto shall be recorded among the official records of the County Recorder of the County.
24.15 Severability. If any provision of this Rental Agreement or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Rental Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforceable to the greatest extent permitted by law.
24.16 Terminology. All personal pronouns used in this Rental Agreement, whether used in the masculine, feminine, or neuter gender, shall include all other genders; the singular shall include the plural, and vice versa. Titles of sections are for convenience only and neither limit nor amplify the provisions of the Rental Agreement.
22 24.17 Binding Effect. This Rental Agreement, and the terms, provisions, promises, covenants and conditions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.
24.18 Force Majeure. The time within which City or Tenant is obligated herein to perform any obligation hereunder, other than an obligation that may be performed by the payment of money, shall be extended and the performance excused when the delay is caused by fire, earthquake or other acts of God, strike, lockout, acts of public enemy, acts of terrorism, riot, insurrection or other cause beyond the control of the applicable party; provided that in no event shall the receipt of Official Disapproval, or any activity associated therewith or arising therefrom, constitute grounds to excuse delay under this Section 24.19. This Section 24.19 shall not, under any circumstances, extend the Term.
24.19 Quiet Enjoyment. City does hereby covenant, promise and agree to and with Tenant that Tenant, for so long as Tenant is not in default hereof, shall and may at all times peaceably and quietly have, hold, use, occupy and possess the Parcel throughout the Term.
24.20 City Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by City, the City Manager or his or her designee is authorized to act on behalf of City unless specifically provided otherwise or the law otherwise requires.
24.21 No Third Parties Benefited. This Rental Agreement is made for the purpose of setting forth rights and obligations of Tenant and City; no other person shall have any rights hereunder or by reason hereof.
[Signatures begin on next page.]
23 IN WITNESS WHEREOF, the parties hereto have caused this Rental Agreement to be executed by their lawfully authorized officers.
CITY:
CITY OF LANCASTER,
a California municipal corporation and charter city
By: _____________________________
Name: _____________________________
Its: _____________________________
ATTEST:
______________________________
City Clerk
APPROVED AS TO FORM:
______________________________
City Attorney
TENANT:
CLEAN WATER VENTURES, INC.,
a Nevada corporation
By: _____________________________
Name: _____________________________
Its: _____________________________
EXHIBIT A
SITE MAP
Assessor’s Parcel Numbers: 3137-015-900, -901, and -902 totaling 5.15 ± acres in size.
EXHIBIT B
PARCEL LEGAL DESCRIPTION
Parcel 1: 3137-015-900
The following described real property in the County of Los Angeles, State of California:
The northeast quarter of the southeast quarter of the southeast quarter of the southeast quarter, Section 10, Township 7 North, Range 12 West, San Bernardino Meridian, according to the plat of the survey of said land on file in the office of the Bureau of Land Management, filed June 19, 1856.
Except the southerly 100 feet.
Parcel 2: 3173-015-902
The following described real property in the County of Los Angeles, State of California:
The south 65 feet the southeast quarter of the northeast quarter of the southeast quarter of the southeast quarter of Section 10, Township 7 North, Range 12 West, San Bernardino Meridian, in the City of Lancaster, County of Los Angeles, State of California, according to the official plat of the survey of said land on file in the Bureau of Land Management.
Except the east 20 feet of said land.
Parcel 3: 3137-015-901
The following described real property in the County of Los Angeles, State of California:
The southwest quarter of the northeast quarter of the southeast quarter of the southeast quarter of Section 10, Township 7 North, Range 12 West, San Bernardino Meridian, in the City of Lancaster, County of Los Angeles, State of California, according to the official plat of said land.
Also including the North 50 feet of the South 115 feet of the southeast quarter of the northeast quarter of the southeast quarter of the southeast quarter of Section 10, Township 7 North, Range 12 West, San Bernardino Meridian, in the City of Lancaster, County of Los Angeles, State of California, according to the official plat of said land.
Except the east 20 feet thereof.
Also including the northerly 50 feet of the southerly 165 feet of the southeast quarter of the northeast quarter of the southeast quarter of the southeast quarter of Section 10, Township 7 North, Range 12 West, San Bernardino Meridian, in the City of Lancaster, County of Los Angeles, State of California, according to the official plat of said land.