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Council Action Date: September 16, 2008
To: MAYOR AND CITY COUNCIL
From: GWENDOLYN PARKER, HARBOR, BUSINESS & TRANSIT
DIRECTOR
Subject: CONSENT TO ASSIGNMENT OF SUBLEASE BETWEEN INTERNATIONAL
BOARDWALK, LLC AND SO YEON GWON, TO KWI YUNG RHIM AND DONG
HWAN KIM
RECOMMENDATION
Approve the request from International Boardwalk, LLC (Master Lessee) and So Yeon Gwon Assignor) for Consent to Assignment of Sublease at 124 North International Boardwalk to Kwi Yung Rhim and Dong Hwan Kim ( Assignee), doing business as Boardwalk Candy; and authorize the Mayor to execute the Consent to Assignment of Sublease on behalf of the City.
EXECUTIVE SUMMARY
International Boardwalk, LLC, Master Lessee for the property located at 100 South International Boardwalk and 102 through 160 North International Boardwalk (NIB) (leasehold), has requested the City's execution of the Consent to Assignment of Sublease for a portion of the leasehold which includes 124 North International Boardwalk.
The proposed assignment of the sublease assigns all rights, title, and interest in, to and under the existing sublease which includes the following:
Term:
Effective Date of the Sublease:
Expiration Date:
Minimum Monthly Rent:
Annual Rent Adjustment:
Percentage.Rent:
Security deposit:
Five years with one five year option to extend
December 1, 2007
November 30, 2012
652.00
December 1St of each year based on the CPI
Twelve percent (12%) of the sublessee'sgross
income less minimum rent
1, 00500.
The assignment agreement and existing sublease documents were received by the Harbor staff on July 22, 2008. Following receipt of the documents, the consent document was prepared by the City and forwarded to International Boardwalk, LLC's property management personnel for signatures.
E14
Administrative Report September 16, 2008
Consent to Assignment of Sublease between
International Boardwalk, LLC and So Yeon, to
Kwi Yung Rhim and Dong Hwan Kim
BACKGROUND
International Boardwalk, LLC, has submitted for the City's consideration, a request for consent to assign the sublease between themselves and So Yeon Gwon to Kwi Yung Rhim and Dong Hwan Kim. The premises are located at 124 North International Boardwalk. The sublessee will operate this location as a candy store.
International Boardwalk, LLC conducted a background and reference check on the proposed sublessee which revealed no reason for objection to the assignment of the sublease.
Harbor staff has reviewed the proposed Consent to Assignment of Sublease and found it to be consistent with the terms of the Master Lease between the City and International Boardwalk, LLC. The City Attorney has reviewed the consent document and approved it as to form.
Master Lessee International Boardwalk, LLC is current on rental payments to the City; and, is in compliance with the insurance requirements of the Master Lease with a Certificate of Insurance on file in the City Clerk's office.
COORDINATION
The Consent to Assignment of Sublease has been reviewed by all appropriate parties.
FISCAL IMPACT
The cost for preparing
adopted FY 2008-2009
annual work plan.
this report and Consent to Assignment of Sublease is included in the annual budget for the Harbor Fund and is part of the Department's Submitted by:
Gwendolyn Parker
Harbor, Business E Director
mac
Attachments:
Consent to Assignment of Sublease
Consent to Assignment Agreement
Sublease Agreement
CONSENT TO ASSIGNMENT OF SUBLEASE
THIS CONSENT TO ASSIGNMENT OF SUBLEASE (this "Consent") is made by the CITY OF REDONDO BEACH, a chartered municipal corporation ("Lessor") and the parties below.
WHEREAS, Lessor and INTERNATIONAL BOARDWALK, LLC, a California limited liability company, are currently parties to that certain Master Lease dated as of June 17, 1974 the "Master Lease").
WHEREAS, under the Master Lease, Lessor reserves the right to approve and consent to any assignment or sublease by Lessee or its successors.
WHEREAS, Lessee has previously subleased its interests in 124 North International Boardwalk to Yeon Gwon ("Assignor").
WHEREAS, Assignor wishes to assign its rights under the applicable sublease to Kwi Yung Rhim and Dong Hwan Kim (collectively "Assignee")
NOW, THEREFORE, pursuant to the Master Lease, Lessor hereby issues its approval and consent to said assignment of the sublease, which is given subject to the following conditions:
1. Lessee and Assignee acknowledge that the Master Lease continues in full force and effect, and that there are no prior amendments thereto as of the date of this Consent, except as in writing(s) signed by both the Lessor and the Lessee. This Consent shall not release Lessee of its obligations or alter the primary liability of Lessee to pay the rent and to perform and comply with all of the obligations of Lessee to be performed under the Master Lease.
2. Any sublease or other agreement between Lessee and Assignee is and shall be at all times subject and subordinate to the Master Lease, as such Master Lease may be amended, revised or terminated by lessor and/or Lessee in accordance with its terms.
3. Assignee shall comply with all terms, covenants, obligations and conditions in the Master Lease. The acceptance of rent by Lessor from Assignee shall not be deemed a waiver by Lessor of any provisions of the Master Lease. This Consent shall not constitute a consent by Lessor to any subsequent subletting or assignment. In the event of any default of Lessee under the Master Lease, Lessor may proceed directly against Lessee or anyone else liable under the Master Lease without prior notice to Assignee.
4. This Consent shall not be valid without the signature of Lessee and Assignee.
5. Assignee and Lessee acknowledge that a "cleaning fee" assessment will be charged to Assignee and Lessee by Lessor per the Fisherman'sWharf Sanitation District and City of Redondo Bedch Resolutions 6213 and 7818 and that all amounts will be paid in full prior to delinquency.
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6. Should any provision of this Consent be found invalid or unenforceable, the decision shall affect only the provision interpreted, and all remaining provisions shall remain enforceable to the fullest extent permitted by law.
7. This Consent may be modified or amended only by a subsequent writing executed by all of the parties.
8. This Consent shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law.
9. In the event of any dispute arising hereunder, venue for any action shall reside exclusively in the Superior Court of the County of Los Angeles, Southwest Judicial District.
10. In the event of any dispute arising out of this Consent, the prevailing party shall be entitled to its reasonable attorney'sfees and costs, including expert witness fees.
IN WITNESS WHEREOF, this Consent is dated this /b ' of ~~ ~~ I _, 2008.
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Y.
APPROVED AS TO FORM:
Ci orn ' s f' e
ASSIGNEE:
THE CITY OF REDONDO BEACH, a
chartere unicipal corporation
By:
Ma or
By:
City Clerk
LESSEE:
Kwi Yung Rhim
Dong Hwan Kim
INTERNATIONAL BOARDWALK, LLC
By: ~ ~-----. J
Name:
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a'^
Consent to Assignment Agreement
This Consent to Assignment Agreement (Consent') is made as of July 1, 200$ by and among, International Boardwalk, LLC, a California limited liability corporation, ("Lessee"), So Yeon Gwon, an individual ("Assignor"), and Kwi Yung Rhim, an individual and Dong Hwan Kim, an individual (collectively "Assignee").
Recitals
This Consent is made with regard to the following facts:
A. Lessee and Assignor, as tenant, have entered into a Lease (the "Lease") dated November 5, 2007 under which Lessee leased to Assignor the premises known as Suite 124 (the Premises"), which comprise a portion ofthe building located at 100 - 160 North International Boardwalk, Redondo Beach, CA 90277, and are more particularly described in the Lease.
B. Assignor desires to assign to Assignee all of its right, title, and interest in, to and under the Lease and the Premises under the provisions of the Assignment and Assumption of Lease dated j~~" ~'~(~ between Assignor and Assignee (the "Assignment'), a copy of which is attached to this Consent as Exhibit A.
C. Assignor and Assignee desire to obtain Lessee'sconsent to the Assignment and Lessee is willing to consent to the Assignment on the following terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Consent, and for valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, the parties agree as follows.
1. Assumption and No Release. Assignee expressly assumes and agrees for the benefit of Lessee to be mound by, and to perform and comply with, every obligation ofAssignor under the Lease. Notwithstanding the Assignment ox Lessee'sconsent to the Assignment Assignor will remain jointly and severally liable for the payment ofrents and for the performance of all other obligations ofAssignor under the Lease fxom and after the effective date of this Consent.
2. Subsequent Assignments; Recapture. This Consent does not constitute a consent to any subsequent subletting or assignment and does not relieve Assignee or any person claiming under or through Assignee of the obligation to obtain the consent of Lessee under the Lease to any future assignment or sublease. Notwithstanding the foregoing, Lessee may consent to subsequent sublettings and assignments of the Lease, or amend the Lease without notifying Assignor or anyone else liable under the Lease, including any guarantor of the Lease, and without obtaining their consent, and that action by Lessee will not relieve those persons of liability.
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This Consent will not be construed to limit Lessee'sright, in the event of a future proposal to sublease all or a portion of the Premises or to assign the Lease, to recapture any portion of the Premises affected by the proposed sublease or assignment, as stated in section of the Lease.
3. Default Under the Lease. In the event of any default of Assignee under the Lease, Lessee may proceed directly against Assignee, any guarantors, or anyone else liable under the Lease without first exhausting Landlord'sremedies against any other person or entity liable under the Lease to Lessee. Notwithstanding the foregoing, any act or omission ofAssignee or anyone claiming under or through Assignee that violates any of the provisions of the Lease will be deemed a default under the Lease by Assignor.
4. Security D~osit. Assignor acknowledges the transfer and assignment of ali right, title, and interest in, to, one thousand five hundred dollars ($1, 00) 500.deposited with Lessee as a security deposit under the Lease. Assignor waives all claims against .Lessee as to the security deposit. Assignee will protect, defend, indemnify and hold Lessee harmless from and against any claims Assignor may raise against Lessee as to the security deposit.
General Provisions
5.1. Consideration for Assi>nment. Assignor and Assignee represent and warrant that there are no additional payments of rent or any other consideration of any type which has been paid or is payable by Assignee to Assignor in connection with the Assignment or the Premises, other than as is disclosed in the Assignment.
5.2. Brokerage Commission. Assignor and Assignee agree that Lessee will not be liable for any brokerage commission or finder'sfee in connection with the consummation of the Assignment or this Consent. Assignor and Assignee will protect, defend, indemnify and hold Lessee harmless from any brokerage cormission or finder'sfee in connection with the consummation of the Assignment or this Consent, and from any cost or expense (including attorney fees) incurred by Lessee in resisting any claim for any such brokerage commission or tinder'sfee. The provisions of this Section 5.2 shall survive the expiration or earlier termination of both the Assignment and this Consent.
5.3. Controlling Law. The terms and provisions of this Consent will be construed in accordance with and will be governed by the Laws of the State of California.
5.4. Captions. Captions to the sections in this Consent are included for convenience only and do not modify any ofthe terms ofthis Consent.
5.5. EntireAf?reement; Waiver. This Consent constitutes the final, complete and exclusive statement between the parties to this Consent pertaining to the terms of Lessee's consent to the Assignment, supersedes all prior and contemporaneous understandings or agreements of the parties, and is binding on and inures to the benefit of their respective heirs, representatives, successors and assigns. No party has been induced to enter into this Consent by, 2-
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nor is any party relying on, any representation or warranty outside those expressly set forth in this Consent. Any agreement made after the date of this Consent is ineffective to modify, waive, or terminate this Consent, in whole or in part, unless that agreement is in writing, is signed by the parties to this Consent, and specifically states that agreement modifies this Consent.
5.6. Waiver of Jury Trial; Attorney. If any party commences litigation against any other party for the specific performance of this Consent, for damages for the breach hereof or otherwise for enforcement of any remedy hereunder, the parties waive any right to a trial by jury and, in the event of any commencement of litigation, the prevailing party shall be entitled to recover from the applicable party such costs and reasonable attorney tees as may have been incurred.
5.7. Waiver. Except as explicitly stated in this Consent, nothing contained in this Consent will be deemed or construed to modify, waive, impair, or affect any of the covenants, agreements, terms, provisions, or conditions contained in the Lease. In addition, the acceptance of rents by Lessee from Assignee or anyone else liable under the Lease will not be deemed a waiver by Lessee of any provisions of the Lease.
5.8. Notice. Any notice that may or must be given by any party under this Consent will be delivered (i) personally, (ii) by certified mail, return receipt requested, or (iii) by a nationally recognized overnight courier, addressed to the party to whom it is intended. Any notice given to Lessee, Assignor or Assignee shall be sent to the respective address set forth on the signature page below, or to such other address as that party may designate for service of notice by a notice given in accordance with the provisions of this Section 5.8. A notice sent pursuant to the terms of this Section S.8 shall be deemed delivered (A) when delivery is attempted, if delivered personally, (B) three (3) business days after deposit into the United States mail, or (C) the day following deposit with a nationally recognized overnight courier.
5.9. Capitalized Terms. All terms spelled with initial capital letter in this Consent that are not expressly defined in this Consent will have the respective meanings given such terms in the Lease.
Lessee, Assignor and Assignee have executed this Consent as ofthe above date.
Signatures on the Following Page]
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Assignee: -~~''"~ Z----
By: ~~~.e- C ~ ~
Its:
Assignor:
By: i
d~~U~ C~ ~.:,
Its:
rBy• ~~ ' Gf ~ ~ ~~
Its:
Lessee: International Boardvvallc LLC,
limited liability company
By: JAMISON SERVICES INC.,
a California corporation,
Its Authorized Agent
By. ~ .~
Paul T. Kim, CPM
President
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EXHIBIT A
Append the assignment agreement]
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SUBLEASE AGREEMENT
This SUBLEASE AGREEMENT (the "Sublease"), dated November 5, 2007, for the purposes ofreference only, is made by and between International Boardwallc, LLC, a California limited liability company ("Sublessor"), and So Yeon Gwon Sublessee") doing business as Boardwallc Candy.
WHEREAS, Sublessor is the lessee of a certain reinforced concrete structure commonly described as "Harbor Parcel No. 11, Basin III, Shop Structure," Located within King Harbor at Redondo Beach, California, and more particularly described in Exhibit C to that certain Lease Agreement (Original Lease) dated June 17, 1974, by and between the City of Redondo ;Beach, a chartered municipality (the "City"), as Ground lessor, and Bay Area Development Co. (Ground Lessee), as lessee; and WHEREAS, Original Lease was amended by that certain Amendment No. 8 dated October 27, 1998, where Ground Lessee assigned all of Ground Lessee'sright, title, and interest to Redondo Boardwallc, LLC (Second Ground Lessee), as amended by that certain Amendment No. I0 dated April 17, 2007, whereby Second Groiuzd Lessee assigned Second Ground Lessee'sright, title and interest to International Boardwalk LLC, (Third Ground Lessee). Third Ground Lessee is the successor- interest in-to the First Sublessor and Second Sublessor (which Original Lease, as amended, in hereinafter referred to as the "Master Lease"); and
C08-127
4 WHEREAS, Third Ground Lessee desires to sublease a portion of the structure described above to Sublessee, and Sublessee desires to sublease such portion from Sublessor upon the terms and conditions set forth below; NOW, THEREFORE, in consideration of the mutual covenants and obligations contained in this Sublease, it is hereby agreed:
ARTICLE I
PREMISES
1.1 The Subleased Premises. Sublessor does hereby sublease to Sublessee, and Sublessee does hereby sublease from Sublessor, a portion of the reinforced concrete structure described above, commonly designated as Store No. 124 consisting of approximately 400 square feet, as outlined in red on the plot plan attached to this Sublease as Exhibit "A" (the "Premises").
ARTICLE II
TERM
2.1 Term. Subject to the terms and conditions set forth below, the Premises are subleased for a term of five years commencing on December 1, 2007. Lessee shall have the option to extend the lease another five years provided written notice is given to Lessee a minimum of six months prior to the end of the initial term and sublessee is not in default in any of the terms of this sublease agreement. 2 C08-127
ARTICLE III
RENT
3.1 Guaranteed Minimum Rent. The minimum rent for use of the Premises (the Guaranteed Minimum Rent") is Six Hundred Fifty Two Dollars ($652.00) per month payable in advance on the first day of the month. Any sums owed under the terms of the existing sublease prior to the commencement ofthis sublease shall be subject to all remedies for non-payment of rent under the terms of this sublease.
3.2 Adjustment of Guaranteed Minimum Rent. On December 1St of each year, the Guaranteed Minimum Rent shall be adjusted to reflect the incxease, if any, in the Consumer Price Index of the Bureau of Labor Statistics of the U.S. Department of Labor for All Urban Consumers for the Los Angeles- Rivrside Anaheim-Urban Area (1982 - 1984 = 100) (hereinafter the "CPI"), from December of 2007 to the December of the applicable Adjustment Date.
The new Guaranteed Minimum Rent payable on and after each Adjustment Date shall be calculated as follows: the Guaranteed Minimum Rent set forth in Section 3.1 of this Sublease shall be multiplied by a fraction, the numerator of which shall be the CPI for the August of the Applicable Adjustment Date, ad the denominator of which shall be the CPI for December of 2007. The amount so calculated shall constitute the new Guaranteed Minimum Rent under this Sublease, but in no event shall such new 3 C08-127
Guaranteed Minimum Rent be less than the Guaranteed Minimum Rent payable for the month immediately preceding the applicable Adjustment Date.
In the event that the compilation and/or publication of the CPI shall be discontinued, the available index which is most nearly the same as the CPI shall be used to make the above calculation.
Sublessor shall inform Sublessee of the amount of the new Guaranteed Minimum Rent as soon as the necessary data becomes available to make the above calculation.
Sublessee shall not be relieved ofthe obligation to pay the new Guaranteed Minimum Rent, nor shall such obligation be deemed waived, if Sublessor fails to promptly notify Sublessee of the new amount. Sublessee shall continue to pay the previous Guaranteed Minimum Rent until such time as Sublessee is informed of the new amount, at which time Sublessee shall pay Sublessor the difference between the previous and the new Guaranteed Minimum Rent for the months transpiring since the applicable Adjustment Date.
3.3 Percentage Rent. In addition to the Guaranteed Minimum Rent described above, Sublessee shall pay to Sublessor, for each month during the term of this Sublease, a sum equal to twelve percent (12%) of the Sublessee'sGross Income for such month, less the Guaranteed Minimum Rent due for such month (hereinafter referred to as Percentage Rent"). Said percentage rent shall be reported on a statement called GROSS RECEIPTS REPORT provided by Sublessee. Said percentage rent shaii be reported on a 4 C08-127
statement called GROSS RECEIPTS REPORT provided by Sublessee. Should said report not be received by Sublessor by the 15t~' of the month or mailed to Sublessor by the 10'h of the month, Sublessor shall charge an administrative fee of $25.00 for each late report.
For the purpose of this Sublease, "Gross Income" shall be defined as it is defined in Section 4.3 of the Master Lease, which definition is incorporated into this Sublease by this reference.
3.4 Monthly Statement and Payment of Percentage Rent. By the tenth (1Ot'') day of each calendar month, Sublessee shall furnish to Sublessor a written statement of Sublessee'sGross Income for the month just concluded, and shall pay to Sublessor by that date any Percentage Rent due for such month.
3.5 Audit Rights. Sublessor shall have the right to audit Sublessee'sbusiness in accordance with the provisions of the Master Lease.
3.6 Renegotiated Rent. Sublessee acknowledges that Section 4.8 of the Master Lease required periodic renegotiation of the rents paid by Sublessor to the City under the Master Lease. Sublessee agrees that, in the event any such renegotiation results in an increase in the rents payable by Sublessor to the City for the Premises, the rents due to Sublessor under this Sublease shall be increased in Iike amounts. 5 C08-127
3.7 Late Charges and Interest. If Sublessee fails to make any payment of money due to Sublessor under this Sublease within ten (10) days of the applicable due date, Sublessee shall pay a late charge of six percent (6%) of such payment to Sublessor to reimburse Sublessor for the additional administrative and other costs incurred by Sublessor as a result of Sublessee'sfailure to make timely payment. In addition, Sublessee agrees to pay interest at ten percent (10%) per year, or at the highest legal rate of interest, whichever is less, on all sums that have not been paid within thirty (30) days of the applicable due date. Said interest and all other remedies for non-payment of rent and fees shall be applicable to any balance remaining from the prior month-onth to-for the premises that predates this agreement.
3.8 Place ofPayment. All amounts payable under this Sublease shall be paid to Sublessor at Sublessor'saddress stated below, or at such other place as Sublessor may from time to time designate in writing.
3.9 Security Deposit. Sublessee shall deposit the sum of Fifteen Hundred Dollars 1, 00) 500.with Sublessor to be retained by Sublessor as security for the faithful performance by Sublessee of all of its covenants and obligations under this Sublease. In the event Sublessee`breaches any covenant or rent, Sublessor, at Sublessor'soption, may apply all or any part of such security deposit to cure such breach, or in satisfaction of any damages sustained by reason of such breach, without waiving any other right or remedy Sublessor may have. Thereafter, Sublessee shall, upon demand, restore the security deposit to its original amount. Should this sublease agreement be assigned as provided in 6 C08-127
Fes,
i r'
Article VIII, the Security Deposit shall be increased three times the monthly minimum rent at the time of assignment.
ARTICLE IV
REIMBURSEMENT OF EXPENSES
4.1 Reimbursement ofExpenses Generally. Sublessee shall reimburse Sublessor for Sublessee'sshare of expenses as provided in the Article IV. The failure of Sublessee to pay any amount due under this Article IV when due shall constitute a default under Article XV of this Sublease, and shall entitle Sublessor to pursue the remedies set forth in that article.
4.2 Taxes and other Assessments. Sublessee shall pay to Sublessor, within thirty 30) days after demand, Sublessee's
prorata share of all real property taxes charges, and
other assessments of any nature levied by any federal, state, county, city, municipal or local authority upon the Master Lease Premises during the term of this Sublease. If is agreed that Sublessee'sprorata share, based upon the ratio that the square footage of the Master Lease Premises, is two point three percent (2.3%). Any tax, charge, or assessment relating to a fiscal period of a taxing authority, a part of which period is included within the term ofthis Sublease and a part of which period is included in the period of time before commencement or after termination of this Sublease, shall be prorated between Sublessor and Sublessee as of the commencement or termination (as the case may be) of the term of this Sublease, so that Sublessor shall bear that portion of such CO8-127
tax, charge, or assessment which bears the same proportion to the entire amount as that part of such fiscal period included in the period of time prior to the commencement of or after the termination of this Sublease bears to such fiscal period, and Sublessee shall pay the remainder. Any installment of any such tax, charge, or assessment which becomes due and payable in the year of commencement or termination ofthe term of this Sublease shall be prorated as between Sublessor and Sublessee in the same manner as other taxes, charges, and assessments.
4.3 Personal Property Taxes. Sublessee shall pay to Sublessor, upon demand, all taxes or other charges assessed against Sublessor during the term ofthis Sublease which are based upon any furniture, trade fixtures, equipment, or other personal property installed by or in possession of Sublessee in, upon, or about the Premises, whether such assessment be made separately or a part of an assessment of the entire Master Lease Premises. If is mutually agreed that the figures supplied by the County Assessor as to the amount so assessed shall be corZClusive. It is agreed that Sublessee'sprorate share of any such tax or charge assessed as to the Master Lease Premises as a whole shall be two point three percent (2.3%). Sublessee further promises to pay, prior to delinquency, any such tax or charge assess directly against Sublessee.
4.4 Fire and Liability Insurance. Sublessee shall pay to Sublessor, upon demand, its prorate share of the premiums required to maintain a fire insurance policy with a standard extended coverage endorsement covering the Master Lease Premises in an amount not less than its full insurable replacement value, and its prorata share of liability 8 C08-i27
insurance premiums for the Master Lease Premises. It is agreed that Sublessee's prorata
share of such premiums is two point three percent (2.3%).
4.5 Loss of Rents Insurance. Sublessee shall pay to Sublessor, upon demand, its prorata share of the premiums required to maintain a policy of loss of rents insurance for the Master Lease Premises. It is agreed that Sublessee's prorata share of such premiums
is two point three percent (2.3%).
4.6 Utilities. Sublessee shall pay to Sublessor, upon demand, all charges for gas, water, electricity, fencing, trash collection, sewer service, or other utility services attributable to the Premises, and a prorata share of all such charges attributable to the Master Lease Premises as a whole. It is agreed that Sublessee's prorata share of such
charges attributable to the Master Lease Premises is two point three percent (2.3%).
Sublessee shall pay, prior to delinquency, any such charges which are billed directly to Sublessee. The electricity service for the Subleased Premises may be shared with other tenants with one meter serving all spaces. In such event, Sublessee agrees to pay the percentage of each electricity bill calculated by dividing the Subleased Premises square footage by the total square footage of all shared spaces and to bill the balance due to the other tenants.
4.7 Licenses and Permits. Sublessee shall pay, prior to delinquency, any and all fees imposed by law for licenses and permits for any business or activity of Sublessee upon the Premises.
9 CU8-127
4.8 Flood Insurance. Sublessee acknowledges that the Premises are adjacent to the ocean and are subject to flooding or wave wash, which are perils that may be insured against by Sublessor and/or Sublessee. Should Sublessor obtain flood and/or wave wash insurance for the Master Lease Premises, Sublessee shall pay its prorata share of the premiums for such insurance. It is agreed that Sublessee's prorata share of such
premiums is two point three percent (2.3%).
4.9 Advertisin~~and Promotion. As additional rent, and to reimburse Sublessor for advertising and promotion costs for the Master Lease Premises, Sublessee shall pay to Sublessor, on the first day of each month, an amount equivalent to Eight Hundred Thirty Three One Hundred Thousandths of one percent (.00833%) of it's prior calendar year's Gross Income plus the sum of Seventy -Five Dollars ($75.00). Such amount shall be adjusted on July 1 of each year to reflect Gross Income for the prior calendar year. The expenditure of said funds shall be at Sublessor'ssole discretion.
4.10 Trash Removal and Maintenance. Sublessee shall pay, upon demand, all trash removal charges and common area maintenance costs assessed by the City against Sublessee for the Premises, as well as the sixty percent (60%) surcharge on such amounts assessed by the City against Sublessor under the Master Lease. As of June 1, 2007 said surcharge is estimated at $40.91 per month. Sublessee shall pay, upon demand, its prorata share of all other common area maintenance costs including, but not limited to, fire alarm system cots, telephone monitoring, electricity service to the meter rooms and 10 C08-127
water for landscaping. As of January 1, 2007, said other common area maintenance costs are estimated at $120.00 per month.
4.11 Payment ofReimbursed Expenses. Sublessee shall pay the sum of $1. 846. per month on the first of each month to reimburse Sublessor for Sublessee'sshare of expenses as provided in this Article IV. Said $146:84 monthly payment represents Sublessor'sbest estimate ofthe true monthly cost. On or before February 1St of each year, Sublessor shall calculate the total sum due fox reimbursement of expenses for the prior calendar year and immediately refund any excess paid by Sublessee. Should Sublessee have underpaid the actual amount due, Sublessee shall have 30 days after billing to pay of the deficiency to Sublessor.
ARTICLE V
USE
5.1 Permitted Use. Sublessee shall use the Premises as a retail store selling bulls candy, prepackaged candy, Hello Kitty products, Morning Glory products, snacks and related items.
5.2 Prohibited Use. Sublessee shall not use the Premises, nor permit the Premises to be used, for any purpose other than the purpose identified in Section 5.1. 11 C08-127
Sublessee is specifically prohibited from selling jewelry, tobacco products, and ice cream.
S.3 OperatingLHours. Sublessee'sbusiness on the Premises shall be open for business no less than six (6) days per week, from 10:00 a.m. to 6:00 p.m., from October through May, and no less than seven (7) days per week, from 10:00 a.m. to 7:00 p.m., from June through September. Sublessee'sbusiness on the Premises shall be pen for business for a minimum of eight (8) hours per day on weekends and holidays, with the exception of Christmas Day. Sublessee shall post a professional sign, visible to the public at all times, stating the hours its business on the Premises is open for business, and agrees that such business shall be open for business during the hours posted.
ARTICLE VI
IMPROVEMENTS
6.1 Sublessee'sObligation to Construct Improvements. Sublessor is leasing only the shell of the building to be occupied by Sublessee, and Sublessee shall be responsible for all construction, improvement, and repair work at the Premises, which work shall be performed at Sublessee'ssole expense. Such work shall include, but shall not be Limited to, construction, improvement, and repairs of all interior walls, floor and ceiling, all electrical improvements, all plumbing and gas lines, the fire alarm system, water and sewer drains, water troughs, ventilation system, air ducts, the interior and exterior of the 12 C08-i27
facade, and the exterior metal roof and chaseway. Sublessor shall not be required to make any improvements, alterations, additions, or repairs to the Premises.
6.2 Design Controls. Sublessee acknowledges that the City prescribes laws, rules, and regulations which govern all improvements, fixtures, and signs (heinafter collectively) referred to as "Improvements") constructed or maintained on the Premises, and that all Improvements are subject to approval by the City. Sublessee further acknowledges that Sublessor has adopted, with the City's approval, an overall general plan which governs the design and architectural theme of all Improvements located on the premises which are subject to the Master Lease ("the Master Lease Premises"). All Improvements constructed by Sublessee, and any alterations, remodeling, or relocation of such Improvements, must comply with the City's laws, rules, and regulations, and Sublessor'sgeneral plan.
6.3 Approval of Improvements. Before Sublessee commences the construction, alteration, remodeling, or relocation of any Improvement on the Premises, Sublessee shah submit to Sublessor three complete sets of building plans for the proposed work, together with three sets of specifications and three diagrams showing the location of the Improvement. No Improvement shall be constructed,.altered, remodeled, or relocated unless the plans, specifications, and diagrams have received the written approval of Sublessor and the City.
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6.4 Bonds. No work shall be commenced by Sublessee until Sublessee shall have provided to Sublessor acceptable corporate security bonds in favor of Sublessor and the City, guaranteeing the faithful performance of the proposed work in strict accordance with the plans and specification previously approved and within the required time frame, guaranteeing the payment of all costs of labor and materials.
6.5 Mechanic Liens. Sublessee agrees to keep the Premises free and clear of mechanic'sliens and other liens of any nature, and Sublessee agrees that it will at all times fully protect and indemnify Sublessor against any and all mechanic'sliens and related claims.
6.6 Condition of Premises. Sublessor and Sublessee acknowledge that the Premises have been improved by previous sublessees of the Premises, that Sublessee has inspected those improvements, and that Sublessee is taking possession of the premises in as is" condition. Sublessee agrees that, promptly following the execution of this Sublease, it will paint both the interior and exterior of the Premises, using paint of standard and color acceptable to Sublessor and the City. Sublessee agrees that the exterior will be painted by a professional paint, and shall not have a mural. Sublessee further agrees that it will obtain and install a sign on the Premises of a quality and design acceptable to Sublessor and the City.
6.7 Restoration. In the event that any of Sublessee'simprovements shall, during the term of this Sublease, be completely or partially destroyed or injured by fire, flood, 14 C08-i27
the elements, or any other casualty, Sublessee shall, at its own cost and expense, and without cost, liability, or expense to Sublessor, rebuild, repair, and xestore such improvements; provided, however, that in the event Sublessor has obtained insurance covering such Improvements, and Sublessee has reimbursed Sublessor for the cost of such insurance pursuant to Article III above, Sublessor shall deliver the proceeds of such insurance to Sublessee, who shall use such proceeds for the rebuilding, repair, and restoration of the Improvements. .Sublessee shall commence suck work within thirty (30) days after the injury occurs, and shall complete such work with reasonable diligence, but no later than one hundred (100} days after commencement. The plans and specifications for such work shall be submitted to Sublessor and the City for approval in the manner set forth above.
6.8 Ownership of Improvements. It is agreed that any and all Improvements (not including trading fixtures) now located on the Premises, and any and all Improvements constructed by Sublessee on the Premises in the future, are and shall be the property of Sublessor. Notwithstanding the foregoing, upon the termination of this Sublease, Sublessee shall, at its sole cost and expense, remove any Improvement located upon the Premises which Sublessor may designate, and shall restore the portion of the Premises occupied by such Improvement to its condition prior to the installation of such Improvement.
6.9 Trade Fixture. Upon the termination ofthis Sublease, if Sublessee be not in default under this Sublease, Sublessee shall have the right to remove at its own expense 15 C08-127
i
all trade fixtures installed by it upon the Premises, provided that such removal shall be completed by the date that Sublessee is obligated to surrender possession of the Premises to Sublessor, and provided further that in the course of such removal Sublessee shall not cause any damage to the Premises. If any such damage does occur, Sublessee shall repair it at its own expense. If such trade fixtures are not removed on or before the date that Sublessee is obligated to surrender possession of the Premises to Sublessor, Sublessor shall have the right to remove, sell, and/or destroy the same at Sublessee'sexpense, and Sublessee agrees to pay Sublessor the reasonable cost of any such removal, sale, or destruction. Alternatively, at the option of the Sublessor, such fixture shall become the property of Sublessor.
6.10 Removal of Improvements Upon Order. Sublessee shall, at its sole cost and expense, move or remove any Improvements installed by it, upon the order of any governmental entity having jurisdiction to require such movement or removal; provided, however, that Sublessee shall have the right to contest, by appropriate legal proceedings, without cost or expense to Sublessor, the validity of any such order, if compliance with such order may be held legally in abeyance without subjecting Sublessee or Sublessor to any liability for failure to comply. In such event, compliance may be postponed until the final determination of any such proceeding, provided that such proceeding by Sublessee with due diligence and dispatch. Any such order shall not in any way affect the validity of this Sublease, or Sublessee'sobligations hereunder.
16 C08-127
ARTICLE VII
MAINTENANCE
F'~
i
7.1 Maintenance Obligations GenerallX. The Foundation, concrete roof structure as distinguished from the ceiling), rear concrete wall, and columns on the Premises are owned and maintained by the City. Should the City fail in its obligation to maintain and repair such structures, Sublessor shall not be held liable to Sublessee. Sublessee acknowledges that, notwithstanding the obligation of the City just described, Sublessee is responsible for maintaining the structure in a watertight condition. Sublessee acknowledges that the roof of the structure is a public walkway with expansion joints that cannot be sealed to prevent leaking, and agrees to install and maintain suck leak control systems as may be necessary to prevent water damage to the Premises and the Improvements on the Premises.
Except as provided above, Sublessee shall keep and maintain the Premises and all Improvement upon the Premises in good condition and repair. Sublessee shall maintain the Premises as required by Article 9 of the Master Lease, as amended by Amendment No. 7 and any subsequent amendment.
Any unsatisfactory conditions relative to the maintenance of the Premise and Improvements upon the Premises shall be corrected by the Sublessee at its own expense, and such corrections shall be commenced within fifteen (15) days after receipt of written notice from Sublessor.
17 C08-127
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7.2 Common Area. The City maintains the public walkway adjacent to the Premises and other common areas located through the pier and harbor area. The City charges Sublessor for the cost of maintaining these common areas. Sublessee shall pay.
Sublessee'sprorate share of all costs charged to Sublessor for maintenance, as provided in Article IV, above.
Any chairs, tables, umbrellas, and similar items placed by Sublessee along the public walkway west of the Premises and between the north and south boundaries of the Premises shall be kept clean and litter free by Sublessee. Sublessee acknowledges that the public walkway is City property and is also used as a fire lane, and that any use by Sublessee and its customers may be canceled at ant time by the City.
7.3 Rubbish. Sublessee shall provide proper containers for trash and garbage, and shall keep the Premises free and clear of all rubbish, debris, and litter at all times.
The containers shall, be located so as not to be visible to members of the public.
Sublessee shall arrange for regular removal of the contents of the containers at Sublessee's
expense, and shall not permit the creation of a health or fire hazard. Ifthe City provides trash removal service, Sublessee shall pay for cost of such service as provided in Article III, above.
7.4 Sublessor'sRights to Inspect and Repair. Sublessee shall permit Sublessor, the City, and the authorized representatives of each the enter the Premises at all 18 C08-127
reasonable times for the purpose of inspecting the Premises, and for the purpose of malting any necessary repairs to the Premises and performing any other work that may be necessary to comply with any laws, ordinances, rules, regulations or requirements of any public authority. Nothing in this section shall imply any duty upon the part of Sublessor or the City to do any work which, under any provision of this Sublease, Sublessee is required to perform, and the performance of any such work by Sublessor shall not constitute a waiver of Sublessee'sdefault in failing to perform such work. Sublessor and the City may, during the progress of any such work on the Premises, store upon the Premises all necessary materials, tools, and equipment. Neither Sublessor nor the City shall in any event be liable for any inconvenience, annoyance, disturbance, loss of business, or other damage to Sublessee by reason of malting repairs or performing any work on the Premises, nor on account ofbringing materials, tools, or equipment into or through the Premises during the course of such wont, and the obligations of Sublessee under this Sublease shall not thereby be affected in any manner whatsoever. Sublessor shall, however, in connection with the doing of its wont, cause as little inconvenience, annoyance, disturbance, loss of business, or other damage to Sublessee as may reasonably be possible under the circumstances.
7.5 Compliance With Laws. Sublessee agrees to maintain the Premises in a clean and sanitary condition at all times in accordance with all municipal, county, state, and federal laws, and to the satisfaction of the City. Any deficiency communicated to Sublessor by the City and subsequently communicated to Sublessee shall be immediately con•ected as provided in Section 7.1 above.
19 C08-127
ur
ARTICLE VIII
ASSIGNMENT
8.1 Assignment ofRights or Interest. Neither this Sublease nor any interest in this Sublease, whether legal or equitable, shall be assigned or sublet in whole or in part, transferred, pledged, mortgaged or hypothecated, voluntarily or by operation of law, nor shall concessions or licenses be granted, without the prior written consent of Sublessor and the City (which consent may not be unreasonably withheld by Sublessor), nor shall this Sublease be subject to attachment or sale under execution in any suit or proceeding which may be brought against or by Sublessee. A transfer of fifty percent (50%) or more of the outstanding voting capital stock of Sublessee shall be deemed to be an assignment within the meaning of this section.
8.2 Termination Upon Unpermitted Assig_runent. If Sublessee, without securing prior written approval, of Sublessor and the City, attempts to effect such an assignment, sublease, transfer, pledge, mortgage or hypothecation, or to grant any concessions or licenses; or a transfer occurs by operation of law; or this Sublease or any interest in this Sublease becomes subject to attachment or sale under execution in any suit or proceeding brought against or by Sublessee, and the same is not released within ffteen (15) days; or voluntary or involuntary petition in bankruptcy is filed by or against Sublessee if 20 C08-127
r ~~
Sublessee is a sole proprietor or corporation, or against ant member Sublessee if Sublessee is a partnership or joint venture; or if Sublessee is adjudged insolvent by any court; or a receiver is appointed for the business or the assets of Sublessee; or Sublessee makes an assignment for the benefit of creditors; then Sublessor may, at its option, terminate this Sublease upon written notice to Sublessee, and thereupon Sublessee shall have no further rights under this Sublease.
8.3 Liability of Sublessee Upon Permitted Assi nment. Any assignment, subleasing, hypothecation, or occupation permitted with the consent of Sublessor shall not relieve Sublessee of any liability under this Sublease, and Sublessee shall be jointly and severally liable with any and all assignees for the full performance of all of Sublessee'sagreements and obligations.
8.4 Payment of Costs Upon Assi nment. Sublessee agrees to reimburse Sublessor for any charge made by the City or any other government agency resulting from an assignment. In addition, Sublessee agrees to pay Sublessor, a sum equivalent to two dollar x$00) 2.per square foot of the Premises as reimbursement for Subiessor's administrative costs in granting an assignment.
ARTICLE IX
INSURANCE AND INDEMNIFICATION
21 C08-127
9.1 Insurance. Sublessee shall maintain liability and property damage insurance of such type and in such amounts as may be requested by Sublessor, provided, however, that such insurance coverage shall not exceed the coverage demanded of Sublessor and the City as additional insureds on such insurance policies.
9.2 Waiver of Subroag- t~ ion. Sublessor and Sublessee agree that in the event of a loss die to any of the perils for which insurance has been obtained pursuant to the terms of this Sublease, each party shall look solely to the insurance for recovery of the loss.
Sublessor and Sublessee hereby grant to each other, on behalf of any insurer providing insurance to wither of them with respect to the Premises, a waiver of any right of subrogation that nay such insurer of one party may acquire against the other party by virtue of payment of any loss under that insurance.
9.3 Sublessee'sIndemnification of Sublessor. Except in a case of Subiessor's gross negligence, willful misconduct, or breach of express warranties, Sublessee shall indemnify, defend, and hold Sublessor, the City, and their respective agents harmless from and against any and all claims or liabilities arising out of or related to Subiessee's occupation of the Premises, the conduct of Sublessee'sbusiness, or the acts, omissions, or neglect of Sublessee or any of its agents or invites, including, but not limited to, any claim or liability related to the storage, use, transportation, or disposition of hazardous substances or materials. In the event that any action or proceeding is brought against any indemnified party by reason of any of the foregoing matters, Sublessee shall defend such 22 C08-127
action or proceeding at its expense by counsel reasonably satisfactory to the indemnified party and the indemnifed party shall cooperate in such defense.
9.4 Sublessor'sExemption from Liability. Except in a case of Sublessor'sgross negligence, willfull misconduct, or breach of express warranties, Sublessor shall not be liable for injury or damage to the person or property of Sublessee, any of its agents or invitees, or any other person in or about the Premises, regardless or cause. Under no circumstance shall Sublessor be liable or profits from such business.
ARTICLE X
EMINENT DOMAIN
10.1 Eminent Domain. Ifthe whole or a substantial part of the Premises shall be taken by any public authority under the power of eminent domain, then this Sublease shall terminate as to the part so taken.
ARTICLE XI
DESTRUCTION OF PREMISES
11.1 Destruction of Premises. Ifthe premises are totally or partially destroyed, and the part destroyed is not rebuilt by the City or Sublessor as provided in the Master Lease, then this Sublease shall terminate as to the part destroyed. 23 C08-127
11.2 Destruction of Improvements. In the event of the total or partial destruction of any Improvements located upon the Premises, Sublessee shall rebuild, repair, and restore such Improvements as provided in Article VI, above.
11.3 Operation of Business. Sublessee agrees to continue the operation of its business in the Premises to the extent reasonably practicable from the standpoint of good business during any period ofreconstruction or repair.
11.4 Percentage Rent. Nothing in this Article shall be construed to abate or diminish Sublessee'sobligation to pay Percentage Rent.
ARTICLE XIi
RECORD AND ACCOUNTS
12.1 Records and Accounts. Sublessee agrees that it will at ail times during the term of this Sublease keep records and accounts in accordance with Sections 4.5 and 4.7 of the Master Lease as amended by Amendment No. 6 or any subsequent amendment. A copy of Amendment No.6 is attached to this Sublease as Exhibit "B." Sublessor shall have the right to inspect and audit the records fSublessee at all reasonable times. If any audit reveals that Sublessee has underreported Gross Income by five percent (%5) or more, or records are insufficient to determine Gross Income, Sublessee agrees to pay for 24 C08-127
18.9 Seyerability. In the event that any provision of this Sublease, is or is hereafter adjudged to be for any reason, unenforceable or invalid, it is the specific intent of the parties that the remainder of this Sublease shall subsist and be remained in full force and effect.
IN WITNESS WHEREOF, each of the parties has executed this Sublease on the date stated below.
Dated: INTERNATIONAL BOARDWALK, LLC,
a California limited liability company
Dated: /~'~ + So Yeon Gwon
an individual
By: _____ `~ Z_---
39 C08-127
City of Redondo Beach
August 6, 2002
TO:
FROM:
Mayor and City Council
Sublease for 124 North International Boardwalk
Barry Kielsmeier, Harbor Properties Director
SUBJECT: REQUEST FOR CONSENT TO SUBLEASE BETWEEN
REDONDO BOARDWALK, LLC AND SO YEON GWON
FOR THE PREMISES AT 124 NORTH
INTERNATIONAL BOARDWALK
RECOMMENDATION:
Staff recommends that the Mayor and City Council approve the request for consent to sublease between Redondo Boardwalk, LLC and So Yeon Gwon for the premises at 124 North International Boardwalk and authorize the Mayor and City Clerk to execute the documents.
EXECUTIVE SUMMARY:
Redondo Boardwalk, LLC leases the Boardwalk from the City and has requested the City's consent to a sublease for a portion of the lease. The sublease has been reviewed by all appropriate parties and is consistent with the terms of the master lease.
BACKGROUND:
Redondo Boardwalk, LLC has submitted for the City's consideration, a request for consent to the sublease between themselves and So Yeon Gwon for the premises at 124 North International Boardwalk. Gordon McRae, owner of Redondo Boardwalk, LLC has indicated that the proposed sublessee plans to operate as a retail store selling candy. The proposed sublessee will occupy the 400 square feet space currently occupied by a candy store. The proposed new owner will continue to operate the store as a candy shop; however, the new owner plans to add the popular Hello Kitty" and "Morning Glory" products to his offerings.
The term of the proposed sublease is five years with one five year renewal option. The proposed new owner has experience in the operation of a retail business. Currently, there is no other candy shop on either the Boardwalk or the Pier.
The Harbor Department has reviewed the proposed sublease and found it to be consistent with the terms of the Master Lease between the City and Redondo Boardwalk, LLC. 21 4.~pONDO p ~ ~~,
h~` ~' f`:i ; w' ' Y
W n
a~
To:
From:
Subject
Administrative Report
Council Action Date: September 16, 2008
MAYOR AND CITY COUNCIL
GWENDOLYN PARKER, HARBOR, BUSINESS & TRANSIT
DIRECTOR
CONSENT TO SUBLEASE BETWEEN INTERNATIONAL BOARDWALK, LLC
AND SO YEON GWON
RECOMMENDATION
Approve the request from International Boardwalk, LLC Consent to Sublease 124 North International Boardwalk to So Yeon Gwon, doing business as Boardwalk Candy; and authorize the Mayor to execute on behalf of the City.
EXECUTIVE SUMMARY
International Boardwalk, LLC, Master Lessee for the property located at 100 South International Boardwalk arid 102 through 160 North International Boardwalk (NIB) (leasehold), has requested the City's execution of the Consent to Sublease for a portion of the leasehold which includes 124 North International Boardwalk.
The terms for the proposed new sublease are as follows:
Term:
Effective Date of the Sublease:
Expiration Date:
Minimum Monthly Rent:
Annual Rent Adjustment:
Percentage Rent:
Security deposit:
Five years with one five year option to extend
December 1, 2007
November 30, 2012
652.00
December 1St of each year based on the CPI
Twelve percent (12%) of the sublessee'sgross
income less minimum rent
1, 00500.
The sublease document was received by the Harbor staff on July 22, 2008. Following receipt of the sublease, the consent documents were prepared by the City and forwarded to International Boardwalk, LLC's property management personnel for signatures.
BACKGROUND
International Boardwalk, LLC, has submitted for the City's consideration, a request for Consent to Sublease between themselves and So Yeon Gwon. The premises are located at 124 North International Boardwalk. The sublessee will operate this location as a candy store.
E13
Administrative Report
Consent to Sublease between International
Boardwalk, LLC and So Yeon Gwon
September 16, 2008
International Boardwalk, LLC conducted a background and reference check on the proposed sublessee which revealed no reason for objection to the sublease.
Harbor staff has reviewed the proposed Consent to Sublease and found it to be consistent with the terms of the Master Lease between the City and International Boardwalk, LLC. The City Attorney has reviewed the consent document and approved it as to form.
Master Lessee International Boardwalk, LLC is current on rental payments to the City; and, is in compliance with the insurance requirements of the Master Lease with a Certificate of Insurance on file in the City Clerk's office.
COORDINATION
The Consent to Sublease has been reviewed by all appropriate parties.
FISCAL IMPACT
The cost for preparing this report and Consent to Sublease is included in the adopted FY2008- 2009 annual budget for the Harbor Fund and is part of the Department'sannual work plan.
Submitted by:
Gwendolyn Parke
Harbor, Business ransit Director
mac
Office of the
rdin
Manager
Attachments:
Consent to Sublease
Sublease Agreement
CONSENT TO SUBLEASE
THIS CONSENT TO SUBLEASE (this "Consent") is made by the CITY OF REDONDO BEACH, a chartered municipal corporation ("Lessor") and the parties below.
WHEREAS, Lessor and INTERNATIONAL BOARDWALK, LLC, a California limited liability company, are currently parties to that certain Master Lease dated as of June 17, 1974 the "Master Lease").
WHEREAS, under the Master Lease, Lessor reserves the right to approve and consent to any assignment or sublease by Lessee or its successors.
WHEREAS, Lessee wishes to sublease its interests in 124 .North International Boardwalk to So Yeon Gwon ("Sublessee").
NOW, THEREFORE, pursuant to the Master Lease, Lessor hereby issues its approval and consent to said sublease, which is given subject to the following conditions:
1. Lessee and Sublessee acknowledge that the Master Lease continues in full force and effect, and that there are no prior amendments thereto as of the date of this Consent, except as in writing(s) signed by both the Lessor and the Lessee. This Consent shall not release Lessee of its obligations or alter the primary liability of Lessee to pay the rent and to perform and comply with all of the obligations of Lessee to be performed under the Master Lease.
2. Any sublease or other agreement between Lessee and Sublessee is and shall be at all times subject and subordinate to the Master Lease, as such Master Lease may be amended, revised or terminated by Lessor and/or Lessee in accordance with its terms.
3. Sublessee shall comply with all terms, covenants, obligations and conditions in the MasterOLease. The acceptance of rent by Lessor from Sublessee shall not be deemed a waiver by Lessor of any provisions of the Master Lease. This Consent shall not. constitute a consent by Lessor to any subsequent subletting or assignment. In the event of any default of Lessee under the Master Lease, Lessor may proceed directly against Lessee or anyone else liable under the Master Lease. without prior notice to Sublessee,
4. This Consent shall not be valid without the signature of Lessee and Sublessee.
5. Sublessee and Lessee acknowledge that a "cleaning fee" assessment will be charged to Sublessee and Lessee by Lessor per the Fisherman'sWharf Sanitation District and City of Redondo Beach Resolutions 6213 and 7818 and that all amounts will be paid in full prior to delinquency.
6. Should any provision of this Consent be found invalid or unenforceable, the decision shall affect only the provision interpreted, and all remaining provisions shall remain enforceable to the fullest extent permitted by law.
C08-126
Sublessee is specifically prohibited from selling jewelry, tobacco products, and ice cream.
5.3 Operating_Hours. Sublessee'sbusiness on the Premises shall. be open for business no less than six (6) days per week, from 10:00 a.m. to 6:00 p.m., from October through May, and no less than seven (7) days per week, from 10:00 a.m. to 7:00 p.m., from June through September. Sublessee'sbusiness on the Premises shall be pen for business for a minimum of eight (8) hours per day on weekends and holidays, with the exception of Christmas Day. Sublessee shall post a professional sign, visible to the public at all times, stating the hours its business on the Premises is open for business, and agrees that such business shall be open for business during the hours posted.
ARTICLE VI
IMPROVEMENTS
6.1 Sublessee'sOblation to Construct Improvements. Sublessor is leasing only the shell of the building to be occupied by Sublessee, and Sublessee shall be responsible for all construction, improvement, and repair work at the Premises, which work shall be performed at Sublessee'ssole expense. Such work shall include, but shall not be limited to, construction, improvement, and repairs of all interior walls, floor and ceiling, all electrical improvements, all plumbing and gas lines, the fire alarm system, water and sewer drains, water troughs, ventilation system, air ducts, the interior and exterior ofthe C08-126
12 reasonable times for the purpose of inspecting the Premises, and for the purpose of making any necessary repairs to the Premises and performing any other work that may be necessary to comply with any laws, ordinances, rules, regulations or requirements of any public authority. Nothing in this section shall imply any duty upon the part of Sublessor or the City to do any work which,. under any provision of this Sublease, Sublessee is required to perform, and the performance of any such work by Sublessor shall not constitute a waiver of Sublessee'sdefault in failing to perform such work. Sublessor and the City may, during the progress of any such work on the Premises, store upon the Premises all necessary materials, tools, and equipment. Neither Sublessor nor the City shall in any event be liable for any inconvenience, annoyance, disturbance, loss of business, or other damage to Sublessee by reason of making repairs or performing any work on the Premises, nor on account of bringing materials, tools, or equipment into or through the Premises during the course of such work, and the obligations of Sublessee under this Sublease shall not thereby be affected in any manner whatsoever. Sublessor shall, however, in connection with the doing of its work, cause as little inconvenience, annoyance, disturbance, loss ofbusiness, or other damage to Sublessee as may reasonably be possible under the circumstances.
7.5 Compliance With Laws. Sublessee agrees to maintain the Premises in a clean and sanitary condition at all times in accordance with all municipal, county, state, and federal laws, and to the satisfaction of the City. Any deficiency communicated to Sublessor by the City and subsequently communicated to Sublessee shall be immediately corrected as provided in Section 7.1 above.
C08-126
19 9.1 Insurance. Sublessee shall maintain liability and property damage insurance of such type and in such amounts as may be requested by Sublessor, provided, however, that such insurance coverage shall not exceed the coverage demanded of Sublessor and the City as additional insureds on such insurance policies.
9.2 Waiver of Subroagtion. Sublessor and Sublessee agree that in the event of a loss die to any of the perils for which insurance has been obtained pursuant to the terms of this Sublease, each party shall look solely to the insurance for recovery of the loss.
Sublessor and Sublessee hereby grant to each other, on behalf of any insurer providing insurance to wither of them with respect to the Premises, a waiver of any right of subrogation that nay such insurer of one party may acquire against the other party by virtue of payment of any loss under that insurance.
9.3 Sublessee'sIndemnification of Sublessor. Except in a case of Sublessor's gross negligence, willful misconduct, or breach of express warranties, Sublessee shall indemnify, defend, and hold Sublessor, the City, and their respective agents harmless from and against any and all claims or liabilities arising out of or related to Sublessee's occupation of the Premises, the conduct of Sublessee'sbusiness, or the acts, omissions, or neglect of Sublessee or any of its agents or invites, including, but not limited to, any claim or liability related to the storage, use, transportation, or disposition of hazardous substances or materials.. In the event that any action or proceeding is brought against any indemnified party by reason of any of the foregoing matters, Sublessee shall defend such C08-126
22 action or proceeding at its expense by counsel reasonably satisfactory to the indemnified party and the indemnified party shall cooperate in such defense.
9.4 Sublessor'sExemption from Liability. Except in a case of Sublessor'sgross negligence, willfull misconduct, or breach of express warranties, Sublessor shall not be liable for injury or damage to the person or property of Sublessee, any of its agents or invitees, or any other person in or about the Premises, regardless or cause. Under no circumstance shall Sublessor be liable or profits from such business.
ARTICLE X
EMINENT DOMAIN
10.1 Eminent Domain. Ifthe whole or a substantial part of the Premises shall be taken by any public authority under the power of eminent domain, then this Sublease shall terminate as to the part so taken.
ARTICLE XI
DESTRUCTION OF PREMISES
11.1 Destruction ofPremises. If the premises are totally or partially destroyed, and the part destroyed is not rebuilt by the City or Sublessor as provided in the Master Lease, then this Sublease shall terminate as to the part destroyed.
C08-126
23 Sublessee shall pay, upon demand, its prorata share of all other common area maintenance costs including, but not limited to, fire alarm system costs, telephone monitoring, electricity service to the meter rooms and water for landscaping. As of January 1, 2001, said other common area maintenance costs are estimated at 100.00 per year.
ARTICLE V
USE
5.1 Permitted Use. Sublessee shall use the Premises as a retail store selling bulk candy, prepackaged candy, Hello Kitty products, Morning Glory products and related items.
5.2 Prohibited Uses. Sublessee shall not use the
Premises, nor permit the Premises to be used, for any purpose other than the purpose identified in Section 5.1. Sublessee is specifically prohibited from selling jewelry, tobacco products and ice cream.
5.3 Operating Hours. Sublessee's business on the Premises shall be open for business no less than six (6) days per week, from 10:00 a.m. to 6:00 p.m., from October through May, and no less than seven ( 7) days per week, from 10:00 a.m. to 7:00 p.m., 12 C02-138
7.3 Rubbish. Sublessee shall provide proper containers for trash and garbage, and shall keep the Premises free and clear of rubbish, debris, and litter at all times. The containers shall be located so as not to be visible to members of the public.
Sublessee shall arrange for regular removal of the contents of the containers at Sublessee's
expense, and shall not permit the
creation of a health or fire hazard. If the City provides trash removal service, Sublessee shall pay for the cost of such service as provided in Article III, above.
7.4 Sublessor's Riaht to Inspect and Repair. Sublessee
shall permit Sublessor, the City, and the authorized
representatives of each to enter the Premises at all reasonable times for the purpose of inspecting the Premises, and for the purpose of making any necessary repairs to the Premises and performing any other work that may be necessary to comply with any laws, ordinances, rules, regulations or requirements of any public authority. Nothing in this section shall imply any duty upon the part of Sublessor or the City to do any work which, under any provision of this Sublease, Sublessee is required to perform, and the performance of any such work by Sublessor shall not constitute a waiver of Sublessee's default in failing to perform such work. Sublessor and the City may, during the progress of any work in the Premises, store upon the Premises all necessary materials, tools, and equipment. Neither Sublessor nor Zo
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Sublessee; or Sublessee makes an assignment for the benefit of creditors; then Sublessor may, at its option, terminate this Sublease upon written notice to Sublessee, and thereupon Sublessee shall have no further rights under this Sublease.
8.3 Liability of Sublessee Upon Permitted Assignment. Any assignment, subleasing, hypothecation, or occupation permitted with the consent of Sublessor shall not relieve Sublessee of any liability under this Sublease, and Sublessee shall be jointly and severally liable with any and all assignees for the full performance of all of Sublessee's
agreements and obligations.
8.4 Payment of Costs Upon Assignment. Sublessee
agrees to reimburse Sublessor for any charge made by the City or any other government agency resulting from an
assignment. In addition, Sublessee agrees to pay to Sublessor, a sum equivalent to two dollars ($2.00) per square foot of the Premises as reimbursement for Sublessor's administrative costs in granting an assignment.
8.5 No Waiver. The acceptance of rent from any person
other than Sublessee shall not be deemed to be a waiver of any of the provisions of this Sublease or a consent to an assignment or subletting of the Premises.
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ARTICLE IX
INSURANCE AND INDEMNIFICATION
9.1 Insurance. Sublessee shall maintain liability and
property damage insurance of such type and in such amounts as may be requested by Sublessor, provided, however, that such insurance coverage shall not exceed the coverage demanded of Sublessor by the Master Lease. Sublessee shall name Sublessor and the City as additional insureds on such insurance policies.
9.2 Waiver of Subrogation. Sublessor and Sublessee agree that in the event of a loss due to any of the perils for which insurance has been obtained pursuant to the terms of this Sublease, each party shall look solely to the insurance for recovery of the loss. Sublessor and Sublessee hereby grant to each other, on behalf of any insurer providing insurance to either of them with respect to the Premises, a waiver of any right of subrogation that any such insurer of one party may acquire against the other party by virtue of payment of any loss under that insurance.
9.3 Sublessee'sIndemnification of Sublessor. Except in a case of Sublessor's
gross negligence, willful misconduct, or
breach of express warranties, Sublessee shall indemnify, defend, and hold Sublessor, the City, and their respective agents 24 C02-138
ARTICLE X
EMINENT DOMAIN
10.1 Eminent Domain. If the whole or a substantial part of the Premises shall be taken by any public authority under the power of eminent domain, then this Sublease shall terminate as to the part so taken.
ARTICLE XI
DESTRUCTION OF PREMISES
11.1 Destruction of Premises. If the Premises are totally or partially destroyed, and the part destroyed is not rebuilt by the City or Sublessor as provided in the Master Lease, then this Sublease shall terminate as to the part destroyed.
11.2 Destruction of Improvements. In the event of the
total or partial destruction of any Improvements located upon the Premises, Sublessee shall rebuild, repair, and restore such Improvements as provided in Article VI, above.
11.3 Operation of Business. Sublessee agrees to continue the operation of its business in the Premises to the extent reasonably practicable from the standpoint of good business during any period of reconstruction or repair.
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the gross sales of each separate business of Lessee, its agents, sublessees, concessionaires or licensees operating on the Premises and the gross rentals received by Lessee for the rental of office space on the Premises for such I2- month period. In the event such statement discloses that the percentage rental on the annual grass income for the preceding calendar year exceeds the amounts of monthly percentage rental paid to Lessor by Lessee during said period, Lessee shall immediately pay the amount of such deficiency to Lessor.
In the event said statement discloses that the percentage rental on the annual gross income for the preceding calendar year is less than the amounts of monthly percentage rental paid to Lessor by Lessee during said period, Lessor shall pay to Lesso r by Lessee during said period, Lessor shall pay to Lessee the amount of such overpayments.
c) Concurrently. with the foregoing submittal of financial documents covering each calendar year, Lessee shall submit to Lessor a statement certified as to its accuracy wherein the total Gross Income from the Premises for the calendar year is classified according to the categories of business established for percentage rental purposes and listed in Exhibit "!_" to this Lease, and far any other business conducted on, from, or connected with the Premises during said calendar year. Further, within each business category, Lessee shall separately identify each source of Grass Income by business name ( including Lessee and its Subtenants conducting any business activities whatsoever on the Premises), or other appropriate identification, specifying the exact amount of Gross Income derived from that source during said calendar year.
d) In the event such annual statement discloses that the percentage rental on the annual Gross Income from the Premises for the preceding calendar year exceeds the total amount of minimum monthly and percentage rentals paid to Lessor by Lessee during said period, Lessee shall pay the amount of such deficiency in additional percentage rental to Lessor concurrently with the submission of said statement to Lessor. e ) I f upon and i t by Lessor i t i s disclosed that the Grosse Income reported by Lessee for any calendar month or as set forth in the certified annual statement was understated or underpaid by two percent (2%} or more, Lessee shall pay, in addition to making payment of the additional percentage rental due to Lessor for that month, or in the case of an audit of the annual statement, for that calendar year, the cost of said audit on demand, otherwise Lessor shall bear the cost. Audit costs when payable by essee would include, but not be limited to all outside accounting, auditing, bookkeeping and computer fees and expenses, administrative, financial and economic consultant fees, related legal fees, and the reasonable value of the services provided by Lessor's employees, elected officials, lease administrators, and/or auditors and in- seho~,counsel.
RETENTION OF RE%ORDS
Article 4.7 is hereby amended to read as follows:
4.1 Acceptance Not Waiver and Retention of Records.
a) The acceptance by Lessor of any monies paid to Lessor by Lessee as additional rental for the Premises, whether shown by any statement furnished by lessee or otherwise specified in this Lease, shall not constitute an admission of the accuracy ar the sufficiency of the amount of said additional rental payment, but Lessor shall be entitled at any time within five (5) years after the receipt of any additional such rental payment to question the sufficiency of the amount thereof and/or the accuracy of any statement or statements furnished by Lessee to justify the same.
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