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Adminlstratlve Re ort
To: MAYOR AND CITY COUNCIL
Council Action Date: May 6, 2008
From: DAVID BIGGS, ASSISTANT CITY MANAGER
GWENDOLYN PARKER, HARBOR, BUSINESS & TRANSIT DIRECTOR
Subject: APPROVAL OF A NEW LEASE BETWEEN THE CITY OF REDONDO
BEACH AND ROBERT DALE RESNICK, AS TRUSTEE OF THE RDR
LIVING TRUST OF 1996
RECOMMENDATION
Approve the new lease between the City of
as Trustee of the RDR Living Trust of 1996
to execute the appropriate documents.
EXECUTIVE SUMMARY
Redondo Beach and Robert Dale Resnick,
RDR", " Lessee"), and authorize the Mayor
RDR is the current Lessee for the leasehold commonly referred to as "the Pier Approach", a retail development on the south end of the Redondo Beach Pier. The leasehold consists of over 30,000 square feet of retail, restaurant and entertainment space and sits at the Harbor'ssouthern boundary. RDR has approached the City for a new lease term in exchange fora $1 million investment into the leasehold property.
The new lease, if approved, will offer a new initial term of 55 years (22 more than the possible 33 years remaining under the existing lease). Additionally, RDR will be allowed two options totaling 11 years. RDR's renovation will total no less than $1 million in hard costs, and will include building facades, exterior common areas and hardscape. The new lease will require "first-class" maintenance, and reinvestment into an aging property in the Harbor.
The lease was negotiated in accordance with the City's adopted lease extension policy and features updated language in many key sections.
BACKGROUND
Located at the southern end of the City's
Harbor Enterprise, the RDR leasehold consists
of over 30,000 feet of retail shops, restaurants and a nightclub. While the leasehold L1
Administrative Report
RDR -New Lease
May 6, 2008
suffered from a significant amount of vacancy in the past, all spaces are now occupied and generating much needed income to the City's Harbor Fund. The leasehold generated approximately $228,000 of Uplands and Tidelands revenue in calendar year 2007. The City's Tidelands boundary runs through the leasehold, and thus, about half the leasehold is subject to regulation by the Tidelands Trust agreement.
The leasehold dates back to 1970, and Robert Resnick/RDR took over in 1987. Since then, has been rather stagnant and few value-added improvements have been made.
Tenancies have included retail, food service and entertainment/nightclub uses from the beginning.
Lease Extension Policy
The City's Lease Extension Policy ("Policy") is aimed at encouraging renewal of leaseholds over time, requiring reinvestment, updating lease language and preserving the fiscal integrity of leaseholds, both in the near term and in the decades that follow approval.
The basic idea is simple: an extension of the use of the public's land has value.
Therefore, the private sector should be willing to compensate the City for this enhanced value. However, this issue must be balanced against the private sector's need to gain a reasonable return on investment over time and the scale of reinvestment needed.
Therefore any proposal is a balancing act that must consider these mutual financial and operational concerns.
In 1993 the City Council, in response to the previous practice of granting long extensions with limited benefit to the public and without extension fees, adopted the existing Policy to achieve these broader goals on behalf of the public at large.
The guidelines are based on similar practices instituted at Marina del Rey and other harbors and are aimed at gaining a demonstrable benefit to the public for lease extensions.
Institution of the Policy was part of a long-term strategy, which has begun to give solid results at Marina del Rey in recent years with strong reinvestment and the renewal of antiquated leaseholds there. Similarly, in the lease document before the Council, there is a blending of public and private benefit.
One other factor that must be considered is the age of Harbor leaseholds. To protect existing uses, where it is infeasible or uneconomic to completely rebuild, any new lease must require far more stringent maintenance and reinvestment provisions so that the City and private sector investment is protected over time. Given the current age of the leasehold improvements, for example, this may become a concern. Stringent maintenance standards have to be placed in leases to ensure enforcement capability and to make sure replacement occurs.
Administrative Report May 6, 2008
RDR -New Lease Page 3
In no event is deferred maintenance counted as reinvestment.
The Lease Proposal
The document before Council is an entirely new lease, not based on the existing lease.
Many of the existing lease provisions are antiquated and in need of update.
The basic transaction points of the new lease are as follows:
1. Development Program. Lessee shall spend no less than $1 million in hard costs on a development program that will include building facades, exterior common areas, and hardscape. All renovations are to be completed within three (3) years of Lease execution (may be extended by "Force Majeure" events). Lessee'sdevelopment program is undefined at this time. Lessee will have twelve (12) months to define the development program.
The City will be required to make improvements as well. City investment will include a new Pier streetscape (paving, lighting, benches, signage, trash can, landscaping, etc.), and the City's "best efforts" to construct a new temporary pavilion area to the south of the leasehold.
If Lessee is unable to obtain all necessary approval for the development program or complete the work within the timelines specified, the term, of the new lease shall be Sept. 27, 2036 (the expiration date of the current lease).
If the City does not approve the entitlements for the project, the lease shall be modified to expire on Sept. 27, 2043 (plus a five (5) year extension), and the City shall reimburse Lessee up to $250,000 for expenses and the execution fee.
2. Capital Improvement Fund. Upon completion of the development program, a Capital Improvement Fund in the amount of $30,000 shall be maintained by Lessee. Lessee may make permitted capital improvements to the leasehold with monies from this Fund.
3. Renovation Fund. Upon the first anniversary of the development program'scompletion, Lessee shall maintain a Renovation Fund during the first half of the lease term. The Renovation Fund shall be funded annually by Lessee in an amount equal to 1 % of Lessee'sfirst $1 million of gross income plus 0.5% of annual gross income over $1 million. The Renovation Fund must be fully expended to physically reposition the property to then current market requirements no later than the thirtieth (30th) year and no sooner than twenty-fifth (25th) year of the lease term.
4. Lease Term. The new lease contains a total term of fifty-five (55) years (22 more than the current lease's remaining term with possible extension). In addition, Lessee will be allowed two extensions .totaling eleven (11) years.
Administrative Report
RDR -New Lease
May 6, 2008
5. Execution Fee. The amount of the lease execution fee shall be $60,000 paid in a lump sum or in six (6) equal annual installments. The remaining unpaid balance will accrue interest at the rate of the 5%.
6. Rents. Total rent shall be the greater of Minimum Rent or Percentage Rent, payable monthly as prescribed in the Lease.
a) Minimum Rents - Minimum rent will continue at the current rate 7, 9177. monthly) and will increase every five (5) years thereafter equal to 75% of the average total rent paid during the prior five (5) year period.
b) Percentage Rents -percentage of defined gross sales from operation and will be renegotiated every ten (10) years.
7. Appreciation Rents.
a) Sale Participation: Lessee shall pay to City 10% of Net Sale Proceeds, as defined in the lease, upon assignment or other direct or indirect transfer of leasehold (first assignment within ten (10) years is exempt). b) Refinance Participation: Lessee shall pay to City 10% of Net Financing Proceeds, as defined in the lease, (first refinancing within ten (10) years is exempt).
8. Loan to Value. The total outstanding loan amount cannot exceed 80% of leasehold value.
9. Right of First Offer. If, at any time during the term of the Lease, the Lessee proposes to assign all or a part of its interest in this Lease to another party, the Lessor (City) shall have a reasonable period of time to submit an offer to purchase Lessee'sinterest.
10. Maintenance. The Lessee must maintain the leasehold in first class order, condition and repair. Every seven (7) years, Lessee shall also hire a structural engineer to perform a complete structural review. Should the review contain tasks necessary to maintain the structural integrity of the improvements, Lessee will complete said tasks.
In line with a recent commitment to the State Lands Commission ("SLC") giving them a 30-day comment period for any new Lease in the Tidelands, the proposed Lease was sent to SLC staff in July of 2007. The. SLC did not respond with any questions or comments.
COORDINATION
The City Manager'sOffice, Harbor, Business & Transit Department, and City Attorney's Office worked with the Lessee to develop the attached lease agreement.
Administrative Report
RDR -New Lease
FISCAL IMPACT
May 6, 2008
Initially, the new lease will have no fiscal impact. Eventually, as the City and Lessee complete their improvements, it is expected that an unknown.. increase in total rental from the Pier will occur. The City's expenditures related to its required improvements are unknown at this time, but are expected to approach $250,000 for the temporary pavilion. Funds for all City improvements will be budgeted from the Harbor Uplands and Tidelands Funds, as are other Pier and Boardwalk projects already earmarked.
Submitted by:
David Biggs
Assistant City Manager
fallen
Attachment -Proposed Lease
A
VYG11\.IVIY11 1 Gi11~G1
Harbor, Business &
S:\ WORDIAGENDASICITY HARBOR\COUNCILI
RDRNEWLEASE050608
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
BROWN, WINFIELD & CANZONERI, INC.
300 South Grand Avenue, Suite 1500
Los Angeles, California 90071
Attention: Dennis S. Roy, Esq.
MEMORANDUM OF LEASE
This Memorandum of Lease, dated for identification purposes only as of July 1, 2008, is entered into by CITY OF REDONDO BEACH, a chartered municipal corporation ("Landlord") and ROBERT DALE RESNICK, as Trustee of the RDR Living Trust of 1996 ("Tenant").
1. Grant of Lease; Term. For good and valuable consideration received, Landlord leases to Tenant, and Tenant leases from Landlord, that certain real property the "Property") located in the City of Redondo Beach, County of Los Angeles, State of California, described in Exhibit "A" attached hereto and incorporated herein by this reference, together with all. buildings, structures, improvements and fixtures now or hereafter erected thereon during the initial term of the Lease, commencing on the Lease Commencement Date (as defined in the Lease) and expiring, without notice or other action by either party, at 11:50 p.m. Pacific Time, on the day prior to the fifty-fifth (55th) anniversary of the Lease Commencement Date, subject to the terms, conditions, provisions and covenants of that certain Lease Agreement (the "Lease") between the Parties hereto, dated for identification purposes only as of the 1St day of July, 2008.
Pursuant to the terms and conditions of the .Lease, Tenant has the right to extend the term of the Lease for two (2) separate additional option periods. The first option period shall be a six (6) year period commencing when the initial Term expires. The second option period shall be a five (5) year period commencing when the first option period expires.
All of the terms, provisions and covenants of the Lease are incorporated in this Memorandum of Lease by reference as though written out at length herein, and the Lease and this Memorandum of Lease shall be deemed to constitute a single instrument or document.
2. Purpose of Memorandum of Lease. This Memorandum of Lease is prepared for recordation purposes only, and it in no way modifies the terms; conditions, provisions and covenants of the ,Lease. In the event of any inconsistency between the terms, conditions, provisions and covenants ofthis Memorandum of Lease and the Lease, the terms, conditions, provisions, and covenants of the Lease shall prevail..
C08-56
3. Counterparts. This Memorandum of Lease may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
The Parties hereto have executed .this Memorandum of Lease at the place and on the dates specified immediately adjacent to their respective signatures.
TENANT:
RDR LIVING TRUST OF 1996
By:
Robert Dale Resnick, Trustee
LANDLORD:
CITY OF REDONDO BEACH,
a chartered municipal corporation
B ~' f Y
Michael A. Gin, Mayor
C08-56
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On ~/~~ / 3 6 , before me,~ nKS~L• ~JQ.UW-'7 ,Notary Public, personally appeared l1'Iichael ~-~'• C~. rl ,who proved to me on the basis of satisfactory evidence to be the person(' whose name(- a>,~ is/ subscribed to the within instrument and acknowledged to me that he/the executed the same in his/ th~iT~ sr authorized capacity(~~ ndthat byhis/ tllt~ ignature~}-A~~~ s-onthe instrument the person( aors~. the entity upon behalf of which the person(~acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
susrw ~. eaowN
Commission ~ 1636461
Notory Public - CcNforNp
Si nature: a~~G! ~ ( Seal)
tos Ar,yeies County
tNy Cetlun. Expires Feb 3. X11
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On , before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within.. instrument and acknowledged to me that he/ theyshe/ executed the same in his/ their her/authorized capacity(ies), and that by his/ their her/signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature: Seal)
C08-56
EXHIBIT "A"
PROPERTY
Those certain tidelands and submerged lands in the City of Redondo Beach, County of Los Angeles, State of California; more particularly described as follows:
Beginning at a point on the southerly line of Coral Way formerly known as Pier Avenue) produced westerly, which bears south 74°- 35" 42'-west, a distance of 66.12 feet from the northwest corner of Lot B, Tract 5322, as recorded in Map Book 56, pages 91 and 92, records of said County in said State,
to the westerly line of Harbor Drive; thence south 74°-42'- 35"
west a distance of 192.15 feet, thence north 15°- 25" 17'- west a distance of9.00 feet, thence south 74°- 35" 42'- west a distance of 24.85 feet, thence south 15°- 25" 17'- east a distance of 22.00 feet, thence south 74°- 35" 42'- west a distance of 23.79 feet, thence south 15°- 25" 17'- east a distance of 67.79 feet, thence north '74°- 35" 42'- east a distance of0.79 feet, thence north 15°- 25" 17'- west a distance of0.79 feet, thence north 74°- 35" 42'- east a distance of 240.28 feet, thence north 15°- 25" 29'- west along the westerly line of said Harbor Drive a distance of 80.00 feet to the Point ofBeginning
Containing therein approximately 11,604 square feet.
C08-56
i
LEASE AGREEMENT
by and between
City of Redondo Beach,
a chartered.. municipal corporation
and
Robert Dale Resnick,
as Trustee of the
RDR Living Trust of 1996
Dated July 1, 2008
416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM (,'
U8-rJ6
SUMMARY OF LEASE TERMS
The information provided below is a summary of detailed provisions set forth in this Lease agreement by and between Landlord and Tenant identified below.. „This .summary is intended to provide an overview only and is not intended to alter, limit or expand the provisions set forth at length in the Lease. In the event of any conflict between the information in this summary and the other provision of the Lease, the latter shall control.
LANDLORD:... City of Redondo Beach, a chartered municipal corporation TENANT: Robert Dale Resnick, as Trustee of the RDR Living Trust of 1996 PERMITTED USES: See Article 4
DATE OF LEASE:. July 1, 2008
LEASE
COMMENCEMENT
DATE:. July 1, 2008
TERM: Fifty-Five (SS) years
OPTION TO EXTEND: Yes
Length: First. option of six (6) years
Second option of five (5) years
BASE RENT: . Seven Thousand One Hundred and Seventy-Seven Dollars and 91/00 7, 91)77.per month, subject to adjustment
A} CPI Adjustment: Yes No , Other X_
B) Adjustment. Dates: Every five (5) years, commencing on the fifth (5th) anniversary of the Lease Commencement Date and continuing every five (5) years thereafter.
ADDITIONAL RENT:. Yes X_ No
1 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM (' U8-rJ6 ADDRESS FOR NOTICES:
To Landlord: City ofRedondo Beach
415 Diamond Street
Redondo Beach, California .90277
Attn: Assistant City Manager
Facsimile: (310) 379-9268
To Tenant: Robert Dale Resnick, as Trustee ofthe RDR Living Trust of 1996 c/o RDR Properties
1545 Sawtelle Blvd., Suite 21
Los Angeles, California 90025
Attn: Robert D. Resnick
Facsimile: (310) 459-4497
With a copy to: Brown, Winfield & Canzoneri, Inc.
300 South Grand Avenue, Suite 1500
Los Angeles, California 90071
Attn: Dennis S. Roy, Esq.
Facsimile: (213) 687-2149
2 416475.14 oolao~. ooo~ 4/ 2008 - 15/ 10:39 AM C08-56
TABLE OF CONTENTS
Page
ARTICLE
1. 1.
1 2
1 DEFINITIONS,
Definitions ...............................................................................................................
Grant of Lease ............................ ..... ..... ......... .. 1 GRANT AND TERM ...................................................................... 1 5 1.3 Term .................................................................................................................. 5
1.4 Options to Extend Term ..................................................................................• 6
1.5 Quiet Enjoyment ................................................................................................... 7
1.6 Condition of Leased Land ...................:................................................,.................. 7
1.7 Ownership and Removal of Improvements ...............,............................................ 7
1.8 Surrender ofPremises ........................................................................................:• 8 ARTICLE 2 CONSTRUCTION AND INSTALLATION OF IMPROVEMENTS AND 9 FIXTURES .................:........................ .... ... .. ........... _ ,,
2.1 . Development Program ............................................................................................ 9
2.2 Landlord Improvements......,. :.................................................................. 10 2.3 Capital Improvement Fund ................................................................................... 10
2.4 Renovation Fund ......................................:............................................................ 10
2.5 Right to Inspect, Audit and Dispute Resolution ................................................... 11
2.6 Compliance with Laws ......................................................:.................................. 11
2.7 Copies ofDevelopment Documents ......................:.............................................. 12
2.8 Tenant'sObligation to Construct Improvements .............................:................:... 12
2.9 Landlord'sCooperation ........................................................................................ 12
2.10 Development Plan Deadline /Modification of Lease Term ...... ....................... 12
ARTICLE
3.1 3 RENT ........................................................................................................................
Base
14 Rent ....................:.................................:....:................................................ 14 1 C08-56
TABLE OF CONTENTS
continued)
Page
3.2 Adjustments to Base Rent ......... . .............:............................ ....................... 15
3.3 Additional Rent .....................................................................................................15
3.4 Triple Net Lease; Reimbursement of Costs; No Rent Abatement or Reduction ....................................................................................................... 15 ARTICLE 4 USE AND COMPLIANCE WITH LAWS ..........................................................16
4.1 Use of Premises ...............................................:................................................. 16
4.2 Changes in Use ..................................................................................................... 16
4.3 Waste; Nuisance .................................................................................................... 17
4.4 Environmental Requirements ................................................................................ 17
4.5 Environmental Remediation and Indemnification ................................................17
4.6 Evidence of .Compliance .................................................................................... •1 ~
4.7 Right to Contest ............................................................... ...:............................. 18 ARTICLE 5 MAINTENANCE AND OPERATION ..:................................. ........................ 18
5.1 Maintenance ............................:...................:......................................................... 18
5.2 Requirements of Governmental.Agencies ............................................................ I9 ARTICLE 6 TAXES AND ASSESSMENTS ................:...........:..................,...................,...:......19
6.1 Taxes ........................................................................:.........:............................,..... 19
6.2 Indemnification ......................................................,:............................................. 19
6.3 Tenant'sRight to Contest ..................................................................................... 20
6.4 Landlord'sCooperation in Tenant's Contest ........................................................ 20
6.5 Prorations ........................................................................... 1. 20 ARTICLE 7 UTILITIES ...................:..............:...... ,........ ................................................... 20
7.1 Construction of Utilities; Costs ................................:........................................... 20 ii
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TABLE OF CONTENTS
continued)
Page
7.2 Contracts with Public Utility ...............................................,................................ 20
7.3 Utility Easements ............................... .................... 21 ARTICLE 8 ALTERATION, DAMAGE OR DESTRUCTION ...., ...................:......................... 21
8.1 Alteration of Improvements ........................................ 21
8.2 Repairs and Rebuilding .............................................. 22
8.3 Indemnity ................................................................... 23 ARTICLE 9 INSURANCE, EXONERATION AND INDEMNITY 23
9.1 Liability Insurance ..................................................... 23
9.2 Fire and Extended Coverage Insurance .............:....... 24
9.3 Insurance Policies ...................................................... 25
9.4 Waiver of Subrogation ............................................... 25
9.5 Exoneration and Indemnity ........................................ 26 ARTICLE 1 0 ASSIGNMENT AND SUBLETTING ........................27
10.1 Restriction on Assignment ......................................... 27
10.2 Assignment Pursuant to the Bankruptcy Code ................................................... 31
10.3 Subleases and Subletting ............................................ 32 ARTICLE 1 1 EMINENT DOMAIN ............. ..............................33
11.1 Rights Governed by this Lease ........: ........................ 33
11.2 Definitions .................................................................33
11.3 Intended Taking; Negotiation ................................... 34
11.4 Partial Taking; Continuation of Lease; Award ......... 34
11.5 Total Taking .............................................................. 35
11.6 Tenant'sElections ................................................................................................. 36 iii
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continued)...
Page
11.7 Taking for Temporary Use ................................ ............. 37
11.8 Waiver of Code of Civil Procedure Section 1265.130 ......................................... 37 ARTICLE 12 TENANT' S BREACH; LANDLORD' S REMEDIES ........::............:.: ...............:.. 37
12.1 Tenant's. Breach .................................................................................................... 37
12.2 Landlord'sRemedies ..... ................................................................................. 38
12.3 Right ofRe-Entry ............................................................................ ....... .... 39
12.4 Lease Not Terminated ......................................................................,.................... 39
12.5 Right to Cure Tenant'sDefault ..... .................................................................... 39
12.6 Late Charges; Interest ......................................................................:.................... 39
12.7 Remedies Not Exclusive .....: ................................ .................. .....:................._ 40 ARTICLE 13 LANDLORD'S .DEFAULT; TENANT'SREMEDIES ......................................... 40
13.1 Landlord'sDefault ...................................................... ........ ......................... 40
13.2 Tenant'sRemedies ................................................................................................ 40
13.3 Delays in Performance ................................................................... ............... 40
ARTICLE
ARTICLE
14 15
LIENS
HYPOTHECATION ..............................................................................................
AND ENCUMBRANCES ...................................................................... 41 41
15.1 Lease as Security ................................................................................................... 41
15.2 Loan Obligations .......:......................:...................................................:................ 42
15.3 Rights of Mortgagees: .....:..................................................................................... 42
15.4 Personal Liability of Mortgagee .....................:..................................................... 45
15.5 Names and Addresses of Mortgagees ............................:...................................... 45
15.6 Sublease and Rents .....................:..........................................::............................. 45
15.7 Arbitration and Legal Proceeding ..................................................:...................... 46 iv
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TABLE OF CONTENTS
continued)
Page
ARTICLE
ourrrrTF
15. 17.
8 1
1ti
17 fRFCFRVF.
GENERAL
Amendment ...........................................................................................................
Estoppel
III .................................
Certificates ...........................,......................:..........................................
PROVISIONS ................................................................................ 46 46
47 47
17.2 Landlord'sRight ofEntry ........................,....................................,..... ...,.......... 47
17.3 Waiver ...............................:......,.................. ...........:....................................... 47
17.4 Arbitration ....................:..................................................................... ........:...... 48
17.5 [ Reserved] ...................................:......:.................................................................. 49
17.6 Notices ......................................................................... .................. .............. 49
17.7 Partial Invalidity; Construction ............................................................................. 50
17.8. Captions ......................................................................................... ................ 50
17.9 Short Form Lease .................................................................................................. 50
17.10 Brokers' Commissions ...............................:...................................................:. 50
17.11 Attorneys' Fees ..................................................................................................... 51
17.12 Counterparts .................. .,........,,...,....................................., ......................... 51
17.13 Sole Agreement ................................................................................................ 51
17.14 Successors and. Assigns ..:............:...........:............................................................. 51
17.15 Time is of the Essence ...................: .................................... ..,.................... 51
17.16 Survival of Covenants ..................:........... ............:..... ........ ........................ 51
17.17 Landlord'sRight to Encumber ........................:..................................................... 51
17.18 Amendments in Writing ........................................................................................ 51
17.19 Reasonableness Standard.....: .............................................::.................... 52 v
416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM CU8-rJ6
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is dated for identification purposes and is made and entered into as ofthe 1
sc day of July, 2008 ("Lease Commencement Date"), by and between the City of Redondo. Beach, a chartered municipal corporation ("Landlord") and Robert Dale Resnick, as Trustee of the RDR Living Trust of 1996.
RECITALS
A. The State of California has granted to Landlord certain tide and submerged lands on condition the Landlord .develop, improve and operate said lands for the promotion and accommodation of commerce .and navigation, all as more particularly stated in the "Tidelands Grant" which grants to Landlord said lands, a copy of which Tidelands Crrant is attached hereto as Exhibit "A" and by this reference incorporated herein.
B. The real property which is the subject of this Lease is located in the City of Redondo Beach, California, and more particularly described on Exhibit "B" attached hereto Leased Land"). The Leased Land either. is subject or is adjacent to property which is subject to the terms and conditions ofthe Tidelands Grant as set forth in Exhibit "A".
C. Landlord is willing to lease to Tenant, and Tenant is willing to hire from Landlord, the Leased Land, for the term and upon the conditions set forth in this Lease. The Leased Land is currently leased to Tenant pursuant to that .certain First Restatement and Amendment of Lease, Redondo Pier Approach, dated January 18, 1988, as amended (the Existing Lease"). The Existing Lease shall remain in effect until the Lease Commencement Date. Upon the Lease Commencement Date, the Existing Lease shall be deemed superseded and replaced by this Lease.
NOW, THEREFORE, Landlord and Tenant agree as follows:
ARTICLE 1
DEFINITIONS, GRANT AND TERM
1.1 Definitions. For the purposes ofthis Lease, the following definitions shall apply:
Additional Rent" shall mean all. sums.. which are to be ,paid by Tenant to Landlord pursuant to the terms hereof, specifically excluding Base Rent.
Assessments" shall mean any and all special assessments, levies and charges on the Premises made.. by any governmental entity, political subdivision, community facilities district, maintenance district, and any like entity.
Award" shall have the meaning ascribed to it in Section 11. d). 2( Base Rent" shall have the meaning ascribed to it in Section 3.1. 416475.14 001207.0007 4/ 2008 - 15/ 10139 AM CU8-rJ6
Capital Improvement Fund" shall have the meaning ascribed to it in Section 2.3.
Claims" shall mean any and all claims, demands, obligations, liabilities, costs, charges and expenses (including reasonable attorneys' fees), interest, fines and penalties.
Default" shall mean, and a Default shall be deemed to have. occurred, when a party breaches any of its obligations, agreements, or duties under this Lease and the other party provides written notice to the breaching party of such breach.
Development Documents" shall mean_all plans, drawings, specifications and documents evidencing governmental approvals or partial approvals; permits; environmental documents (including undertakings to complete appropriate environmental mitigations); soil, engineering and planning studies; working drawings and the like; architects' agreements and construction agreements, pertaining to the Development Plan..
Development Plan" shall mean the plan described in Exhibit "C".
Fixtures" shall mean the fixtures, furnishings and equipment, installed in the Improvements.
Gross Income" shall mean any and all gross rentals, receipts, fees, proceeds and amounts of any kind actually received by Tenant from any portion of the Premises, including without limitation, amounts received from or in respect of any Subleases, concessionaires' income, other agreements for use or occupancy, including but not limited to fixed. rentals, minimum rentals, rental. computed on the basis of sales or other criteria, temporary rentals, proceeds of business interruption and rental loss insurance applicable to or in replacement of such lost rental income, casualty and disaster award proceeds to the extent, but only to the extent, if any, not used towards restoration of the Premises or payment for debt financing secured by the Premises, parking income, advertisement income .and signage rights income. Notwithstanding the foregoing, "Gross Income" shall not include (i) any amounts received by Tenant from any Subtenants, licensees or concessionaires as tenant advances or reimbursements of taxes, insurance or utilities (ii) any refundable security or other like deposits; (iii) proceeds of sale, financing or refinancing of the Premises, or Improvements thereon; (iv) proceeds from a Taking of the Premises or a portion thereof; (v) proceeds from any policies of insurance (other than proceeds of rental interruption insurance as provided above or excess casualty of disaster award proceeds not applied to either loan repayment or restoration of the Premises); (vi) the value of free rent or rental abatements granted to Subtenants; and (vii) taxes, licenses and other like fees or charges collected by Tenant and paid over to taxing or other governmental authorities, late charges and interest payable by Subtenants, interest accruing on investment funds of Tenant, and any damage recoveries of Tenant from any Subtenant or other third parties (except for damage recovery reflecting recovery of rent, net of the out- pocket of-costs of collecting such amount, including reasonable attorneys' fees incurred).
Hazardous Substance" shall mean any product, waste, material or substance, or any by-product or derivative thereof which.. is (a} defined as a "hazardous waste," "extremely 2 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM C08~5c
hazardous waste," or "restricted hazardous waste" under sections 25115, 25117 or 25122.7, or listed pursuant to section 25140 of the California Health and Safety Code, division 20, chapter
6.5 (Hazardous Waste Control Law); ( b) defined as a "hazardous substance" under. section 26316 of the California Health and Safety Code, division 20, chapter 6.8 (Carpenter- Tanner PresleyHazardous Substance Account Act); (c) 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 Substance" under section 25281 of the California Health and Safety Code, division 20, chapter 6.7 (Underground Storage of Hazardous Substance); (d) gasoline, oil or petroleum; (e) asbestos; (f) a hydrocarbon or polychlorinated biphenyl; (g) defined as "hazardous" or "extremely hazardous" pursuant to article 11 of Title 22 of the California Administrative Code, division 4, chapter 4, chapter 20; (h) designated as a "hazardous substance" pursuant to section 311 of the Clean Water Act, 33 United States Code section 1251 et seq. (33 U. C. § S 1321) or listed pursuant to section 307 of the Clean. Water Act (33 U. C.S 6903); (i) defined as a "hazardous substance" pursuant to section 101. of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 United States Code section 9601 et seq. (42 U. C. § S 9602); (j) defined as a "hazardous waste" pursuant to the Resource Conservation and Recovery Act, 42 United States Code section 6901 et seq. (42 U. C. § S 6901); k) found to be a pollutant, contaminant, hazardous waste or hazardous substance in any reported decision of a federal or ,California state court; or (1} whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises is either (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, or (ii) a basis for potential liability to any governmental agency or third party under any Laws or common law theory.
Improvements" shall mean all improvements located on the Premises as of the Lease Commencement Date or otherwise constructed on the Premises during the Term, including, without limitation, the improvements described in the .Development Plan, the improvements described. on Exhibit "C" attached hereto, and any replacements, reconstructions or restorations during the Term.
Insured Loss" shall mean ..damage or destruction of the Premises which was caused by an event required to be covered by the insurance described in Article 9, irrespective of any deductible amounts of coverage limits involved.
Landlord" shall mean the City of Redondo Beach.
Landlord Indemnified Parties" shall mean Landlord, its officers, employees, elected and appointed officials, volunteers, agents, successors and assigns.
Landlord'sInterest" shall mean Landlord's interest in the Premises and Landlord'srights pursuant to this Lease.
Law" and "Laws" shall mean the applicable statutes, ordinances, rules, codes, requirements, regulations, and the like, of any governmental authority, whether federal, state, or local, or court.
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Lease Commencement Date".shall mean July 1, 2008.
Leasehold Estate" shall have. the. meaning ascribed to it in Section 10. d). 1( Leased Land" shall have the meanings ascribed to it in Recital B.
Mortgage" shall mean any mortgage or deed of trust executed by Tenant in favor of a Mortgagee, which mortgage or deed of trust constitutes a lien. upon any portion of Tenant'sInterest.
Mortgagee" shall mean any lender who has made a loan to Tenant and. who holds a lien upon any portion of Tenant'sInterest as security for such loan.
Partial Taking" shall have the meaning ascribed to it in Section 11. c). 2( Participation Rent" sha11_mean all sums which are paid by Tenant to Landlord as set forth on Exhibit "E", which shall be included as Additional Rent..
Premises" shall mean the Leased Land, the Improvements, and the Fixtures.
Purchase Agreement" shall have the meaning ascribed to it in Section 10. d). 1( Qualified Appraiser" shall have the meaning ascribed to it in Section 11.4.
Renovation Fund" shall .have. the meaning ascribed to it in Section 2.4.
Rent" shall mean Base Rent and Additional Rent.
ROFO" shall have the meaning ascribed to it in Section 10. d). 1( ROFO Notice" shall have the meaning ascribed to it in Section 10. d). 1( Security Device" shall mean any mortgage, deed of trust, or other hypothecation of security device.
Senior Debt Service" shall ..mean, at any time, all principal, interest, late charges, default interest, prepayment premiums and all other sums then due in respect of the Senior Loan, including, without limitation, any loan fees and closing costs associated with the origination of the Senior Loan.
Senior Loan" shall mean any and all loans or other financing obtained by Tenant (and approved. by Landlord pursuant to Section 15.1) which are secured by Tenant's Interest in the Premises, in whole or in part,
Senior Mortgage" shall mean the deed(s) of trust securing the obligations ofthe Senior Loan.
4 416475.14 ooizo~. ooo~ ansizoos - io:3v ~
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Senior Mortgagee" shall mean the holder(s) of the Senior Mortgage and the obligations secured thereby.
Taking" shall have the meaning ascribed to it in Section 11. a). 2( Taxes" shall mean real. and personal property taxes, fees, assessments and charges, water and sewer .rates and charges, and other similar governmental charges and impositions, whether general or special, ordinary or extraordinary, which may be levied, assessed, charged or imposed, or may become a lien or charge upon the Premises or any part or parts thereof, or upon Tenant's Interest or Landlord's Interest including, without limitation, possessory interest taxes. Landlord is a public entity, and as such, Landlord'sunderlying fee and reversionary interest in the subject property is, or may be, exempt from property tax assessments.
In accordance with California Revenue and Taxation Code Section 107. a) 6(Landlord states that by entering into this Lease a possessory interest in Tenant subject to property taxes may be created. Tenant shall be responsible for the payment of property taxes levied on such interest.
Tenant" shall mean Robert Dale Resnick, as Trustee of the RDR Living Trust of 1996.
Tenant Indemnified Parties" .shall mean Tenant, its officers, members, employees, agents, successors and assigns.
Tenant's Interest" shall mean Tenant's
Leasehold Estate in the Premises,
including- all of Tenant'srights pursuant to this Lease.
Term" shall mean the term ofthis Lease as set forth in Section 1.3.
Total Taking" shall have the meaning ascribed to it in Section 11. b). 2( Transfer Notice" shall have the meaning ascribed to it in Section 10. a)(1( i).
Uncured Default" shall mean a Default under this Lease which has not been cured by the defaulting party within the cure period applicable thereto.
Work" shall mean the construction and installation. of any Improvements and Fixtures including, without limiting the generality ofthe foregoing, site preparation, landscaping, installation of utilities, street construction or improvement and grading or filling in or on the Leased Land.
1.2 Grant of Lease. In consideration of the covenants and agreements to be observed and performed by Tenant, and subject to .all matters recorded in the .Official Records of Los Angeles County, California, Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord, the Leased Land (including any Improvements and the Fixtures .now or hereafter located thereon).
1.3 Term. The term of this Lease ("Term") shall commence on the Lease Commencement Date and .expire, without notice or other action by either party, at 11:59 p.m. 5 416475.14 001207.0007 4/ 2008 -. 15/10:39 AM ^
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Pacific Time, on the day prior to the fifty-fifth (55th) anniversary of the Lease Commencement Date, unless sooner terminated pursuant to the terms of this Lease or extended pursuant to Section 1.4 of this Lease or by other agreement of the parties. Notwithstanding the foregoing, the Term of this Lease shall be subject to adjustment pursuant to the provisions set forth in Section 2.10 below.
1.4 Options to Extend Term.
a) Grant of Options. Landlord hereby grants to Tenant the option to extend the Term of this Lease for two (2) additional option periods. The first option period shall be a six (6) year period commencing when the initial Term expires. The second option period shall be a five (5) year period commencing when the first option period expires. If Tenant elects to exercise either, such option, Tenant shall deliver written notice of its election to exercise each such option period to Landlord at least twelve (12) months but not more than forty-eight (48) months prior to the date that such option period would commence. If proper notification of the exercise of an option is not given during such period, such option shall automatically expire.
Within forty-five (45) calendar days after receipt of a notice of election to .exercise either such option period, Landlord shall notify Tenant of any deficiency in or objection by Landlord to the exercise of such option and shall specify in reasonable detail the reasons Landlord believes such deficiency or objection exists and the actions by Tenant, if any, necessary to render such option exercise effective... If Landlord. fails to respond within that forty-five (45) calendar day period Tenant may provide a second written notice of its election to exercise .such option and if Landlord fails to respond within fifteen (15) calendar days after delivery of such second notice, the option shall be conclusively deemed to have been effectively exercised and Landlord may not thereafter contest the adequacy or effectiveness of Tenant's election to exercise that option.
Options may only be exercised consecutively so that the Term of this Lease shall be without interruption and a later option cannot be exercised unless the prior option has been validly exercised.
b) Effect of Default on Options. Tenant shall have no right to exercise an option granted pursuant to Section 1. a) 4(above during any ofthe following periods:
i) .during any period in which all or a portion of Rent due remains unpaid (provided, that, for purposes of this provision and as provided in Section 12. b), 1(Rent which is paid under protest or with a reservation ofrights shall be deemed to have been paid); or ii) during any period following Tenant's commission of a Default with respect to payment to Landlord of .any other monetary obligations under the Lease provided that, for purposes of this.. provision and as provided in Section 12. b) 1(below, Tenant shall not be deemed to be in Default of any such monetary obligation which has been paid by Tenant under protest or with a reservation ofrights) and continuing until said monetary Default is cured; or
iii) during any period following Tenant's commission. of an Uncured Default with respect to anon-monetary obligation under the Lease not subject to (i) or (ii) above and continuing until said non-monetary Default is cured 6 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM G' 76U8-.'" In addition, in the event Tenant has .committed three (3} or more separate and distinct material Defaults (monetary or non-monetary) during the twelve (12) month period immediately preceding the exercise of the option (not including (i) any alleged monetary Default with respect to which Tenant has .paid the alleged monetary obligation under protest or with a reservation of rights or (ii) any alleged non-Monetary Default which is the subject of a pending contest pursuant to Section 12. b) 1(or which was determined not to be a Default in_conjunction with any such prior contest), whether or not the Defaults are. cured, then Tenant shall not have the right to exercise such option.
1.5 Quiet Enioyment. So long as the Tenant has not committed an Uncured Default under this Lease, and except for Landlord'sactions in the case of an emergency for the purposes of protecting public health or safety which actions shall be strictly limited in duration and scope so as to minimize to the extent possible any interference with the possession and use of the Premises by Tenant, Tenant may lawfully and peaceably hold, occupy and enjoy the Leased Land withouf disturbance, interruption or fiindrance by Landlord, or any person or entity claiming by or through Landlord. However, Landlord shall in no event be liable in damage or otherwise, nor shall Tenant be released from any obligation hereunder, because of the unavailability, delay, quality, quantity or .interruption of any service or amenity, or any termination, interruption or disturbance of services or .amenities, or any cause due to any omission, act or neglect of Tenant or its servants, agents, employees, licensees, business invitees, or any person claiming by or through Tenant or any third party except to the extent any of the foregoing are caused by the act, omission or neglect of Landlord in violation of its obligations under this Lease.
1.6 Condition of Leased Land. On the Lease Commencement Date, Tenant shall be deemed to have accepted the Leased Land "AS-IS" without any representation or warranty of Landlord. Tenant acknowledges that it has had the advice of such independent professional consultants and experts as it deems necessary in connection with its investigation and study of the Leased Land, and has, to the extent it deemed necessary, independently investigated the condition of .the Leased Land, including the soils, hydrology, seismology, and archaeology thereof, and the Laws relating to the construction, maintenance, use and operation of the Improvements, including environmental, zoning and other land use entitlement requirements and procedures, height restrictions, floor area coverage limitations and similar matters, and has not relied upon any statement, representation or warranty of Landlord of any kind or nature in connection with its decision to execute and., deliver this Lease .and its agreement to perform the obligations of Tenant., .Landlord makes no covenant, warranty or representation as to the suitability of the Leased Land. for the. uses permitted by this Lease, or respecting the condition of the soil, subsoil or any other condition of the Leased .Land, nor does Landlord make any covenant, representation or warranty regarding the suitability of the Leased. land for the proposed development, construction of the proposed development, or construction or use of the Improvements.
1.7 Ownership and Removal of Improvements.
a) Ownership of Improvements and Fixtures. Upon any expiration or termination of this Lease, Landlord shall become the owner. of all Improvements"arid Fixtures.
During the Term, Tenant shall be the owner of all Improvements and Fixtures as the same may 7 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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be altered, replaced, expanded or improved from time to time. Except as otherwise specifically provided in this Lease, Tenant shall not remove or destroy any Improvements from_the Leased.
Land, and, except to replace or repair, Tenant shall not remove or destroy any of the Fixtures; provided, however, that Tenant shall have the right to remove or destroy any Fixtures which, in the reasonable opinion of Tenant, is no longer necessary for the use and operation of the Premises. Upon or at any time within thirty (30) calendar days after the expiration or earlier termination of this Lease, as requested by Landlord, Tenant shall, without charge to Landlord, promptly execute, acknowledge and deliver to Landlord all documents reasonably necessary to i) confirm Landlord's ownership of the Premises; (ii) assign to Landlord, to the extent assignable, all contracts or warranties.. designated by Landlord, relating to the construction, operation, management or maintenance of the Premises; and (iii) convey or assign to Landlord, as the .case may be, to the extent assignable, all Development Documents .and other plans, records, registers, permits, and all other papers and documents, then in Tenant's possession or control, which may be necessary or reasonably appropriate for the proper operation and management of thePremises, and shall deliver all ofthe foregoing to Landlord. b) Removal of Improvements Unon Termination. Ten (10) years prior to the expiration of this .Lease, Landlord shall notify Tenant if Landlord elects to have any Improvements removed upon termination. In such case, Tenant shall provide Landlord with a report estimating the costs for removal of any such Improvements .upon termination of this Lease. At Landlord'soption, Tenant shall establish a funding method approved by Landlord to pay for any such removal of Improvements, and, if a funding method is required by Landlord, (i) any funds then on deposit in the Capital Improvement Fund shall be transferred to such "removal fund" and the Capital Improvement Fund shall be closed, (ii) any unfunded balance of the removal cost shall be .funded in ten equal annual installments and once the removal fund. is adequate to cover the anticipated expenses of removal no further contributions shall be required to the "removal fund", and (iii) no further capital expenditures (not including any non-capital and ordinary course repair or maintenance expenditures otherwise required under the Lease) shall be required of Tenant during the remaining Term of the Lease. c) Tenant's Right to Remove Personal Prouerty. At the expiration or earlier termination of this Lease, Tenant may remove any or all of Tenant's personal property from the Leased Land, so long as (i) such personal property can be removed without material damage to the Improvements (or any such damage resulting from such removal is repaired concurrent therewith), (ii) such personal property is removed within thirty (30) calendar days following such expiration or earlier. termination of this Lease, and (iii) all resultant injuries to the Leased Land and the Improvements are promptly and completely remedied and Tenant takes reasonable steps necessary to preserve the appearance ofthe Leased Land and the Improvements.
Any personal property of Tenant remaining on the Leased Land after said thirty (30) calendar day period shall automatically vest and .become the sole property of Landlord without. any payment by Landlord and without any further action or agreement required including the necessity of a deed,, bill of sale, conveyance or other act or agreement of Tenant.
1.8 Surrender of Premises.
a) Surrender of Lien-Free Title. Upon the expiration or earlier termination of this Lease, Tenant shall deliver the Premises, and every part thereof, to Landlord, in first-class 8 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM CO$- rJF) and broom-clean- condition considering the age of the. improvements, ordinary wear and tear excepted (provided, however, that such exception for ordinary wear and tear shall not diminish Tenant's obligations hereunder, including, without limitation, the provisions of Article 5 to repair, restore and maintain. the Premises in first-class order, condition and repair, considering the age of the improvements), and shall grant and convey all of Tenant'sright, title and interest in the Premises to Landlord, in full compliance with all Laws, free and clear of all liens and encumbrances other than (i) those created by Landlord, and (ii} those liens and encumbrances approved in writing by Landlord with the express agreement of Landlord that the same may survive the expiration or earlier termination ofthis Lease. b) Failure to Surrender. If Tenant fails to surrender possession of the Premises upon the expiration or earlier termination of the Lease, or any part thereof, as required hereunder, at the expiration or earlier termination of this Lease, Tenant shall indemnify, defend and hold the Landlord Indemnified Parties harmless from and against any and all Claims resulting from or relating to the delay or failure to so surrender, including, without limitation, Claims made by .any prospective tenant, founded on or resulting from Tenant's failure to so surrender, and any direct or indirect or consequential damages which the Landlord Indemnified Parties or any of them may incur. Tenant has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this.. Lease. In the event that Tenant holds over without the consent of Landlord, then the Base Rent shall be increased to one-hundred fifty percent (150%) of the Base. Rent applicable immediately preceding the expiration or termination.
Nothing contained herein shall be construed as consent by Landlord to any holding over by Tenant. Notwithstanding anything herein to the contrary, so long as Tenant is exercising commercially reasonable efforts to cause all Subtenants, licensees and concessionaires to vacate the Property, Tenant'sliability to Landlord because such Subtenant, licensee or concessionaire refuses to vacate the Property upon the expiration or earlier termination of this Lease shall be limited to the Base Rent applicable to the space where such holdover Subtenant, licensee or concessionaire is located. (and, for purposes of such provision, the Base Rent payable hereunder shall be allocated evenly over the Premises based upon the rentable square footage of the Premises). Tenant shall have no obligation to remove any Subtenant, licensee or concessionaire with respect to which Landlord has entered into. anon-disturbance agreement providing such Subtenant, licensee or concessionaire a
right to possession following the expiration or earlier termination of this Lease.
ARTICLE 2
CONSTRUCTION AND INSTALLATION OF IMPROVEMENTS AND FIXTURES
2.1 Development Program. Tenant shall invest no less than One Million Dollars 1, 000) ( 00,the "Threshold Expenditure Requirement") in hard/ of-out- pocket costs for improvements to the Premises (such improvements to include building facades, exterior common areas and hardscape) in accordance with the development plan attached .hereto as Exhibit "C" the "Development Plan"). For purposes of determining satisfaction of the foregoing Threshold Expenditure Requirement, such improvements shall not include any deferred maintenance items or current structural deficiencies unrelated to the Development Plan. Tenant shall use commercially reasonable efforts to obtain all planning, zoning, entitlement, and Coastal Commission entitlement approvals (excluding building and other like permits) within three (3) years following the Lease Commencement Date; provided that such period shall be extended (up 9 416475. ]4 001207.0007 4/ 2008 -, 15/10:39 AM
CQ$- rJF)
to a maximum of two (2) additional years) due to delays caused by any "Force Majeure" events as defined in Section 1. 33.below) beyond the reasonable control of Tenant.. If Tenant fails to obtain all necessary approvals within such. three,. (3) year period (as extended by Force Majeure events (up to a maximum of two. (2) additional years)), then Tenant shall have an additional ninety (90) calendar days to obtain, and if not possible then to notify Landlord when Tenant reasonably believes it will .obtain, such approvals. Within twelve (12) months following Tenant's receipt of all required approvals referenced herein, Tenant shall prepare detailed drawings suitable for construction and submit .such drawings for building permits. Tenant shall commence the .Development Plan within one hundred twenty (120) calendar days following Tenant'sreceipt of all necessary building permits.
2.2 Landlord Improvements. Landlord shall .build, or cause to be built, the improvements listed' oi~° Exhibit "D" attached .hereto (the "Landlord Improvements"). The Landlord Improvements shall include, but not be limited to, updated pier streetscape (e.g., paving, lighting, benches, signage, trash cans, landscaping, etc.) and Landlord's best efforts to construct a temporary pavilion area to the south of the Premises (subject to Coastal Commission and any other required third party approvals). Landlord shall complete such Improvements prior to Tenant's completion of the Development Plan improvements to be constructed by Tenant pursuant to Section 2.1 above.
2.3 Capital Improvement Fund. Upon Tenant's completion of the DevelopmentPlan improvements, Tenant shall deposit Thirty Thousand Dohars ($30,000) into a capital improvement fund (the "Capital Improvement Fund"). The Capital Improvement Fund and all accumulated interest shall be maintained in an impound account by Tenant. Tenant shall furnish to Landlord an annual accounting statement of the Capital Improvement Fund on or before March l
st of each calendar year. Tenant shall be permitted to use the Capital Improvement Fund for capital expenditures upon prior approval of Landlord'sCity Manager and/or designee, such approval not to be unreasonably withheld or delayed. Further, in the event Landlord provides Tenant with notice of any capital improvements which are required with respect to an improvement which (i) Tenant has the right and obligation to maintain under this Lease, (ii) has exceeded its useful life, and (iii) relates to an exterior element or structural component of the Premises, and if Tenant fails to complete such improvement within forty-five (45) calendar days following receipt of such notice, then Landlord shall have the right to draw upon the Capital Improvement Fund for the purpose of completing any such necessary capital. improvements; provided that Landlord shall. not. draw upon the Capital Improvement Fund more than once in any twelve (12) month period, and any work on the Premises by or at the direction of Landlord shall be subject to the rights of all Subtenants under their Subleases .and shall be performed in a manner that avoids any unreasonable disruption of or interference with any Subtenants. All funds expended from the Capital Improvement Fund shall be fully replenished by Tenant within thirty (30) calendar days following any such withdrawal. The Capital Improvement Fund shall be closed and. terminated as provided in Section 1.7 upon Landlord'selection to require removal of improvements upon the expiration ofthis Lease.
2.4 Renovation Fund. Commencing upon the first anniversary of the Tenant's completion of the Development Plan improvements and continuing upon each anniversary thereafter, Tenant shall deposit an amount equal to one percent (1%) of Tenant'sfirst $1, 00000, in Gross Income for the prior year plus one-half of one percent (.5%) of all other Gross Income 10 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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in excess of $1, 00000,for the prior year into a renovation fund (the "Renovation Fund"). The Renovation Fund and all accumulated interest shall be maintained in an impound account by Tenant. Tenant shall furnish to Landlord an annual accounting statement of the Renovation Fund on or before March 1St of each calendar year. The Renovation Fund shall. be used to provide funds for renovation, enhancement, and construction that is .necessary or desirable in the reasonable judgment of Tenant, subject to Landlord's prior approval, which shall not be unreasonably withheld. The purpose of the Renovation Fund is to renovate and upgrade the condition and appearance of the Improvements to a quality that is reasonably comparable to newer projects or renovated projects in the competitive marketplace containing similar types of uses for the Premises, in this case, retail and restaurant facilities. Renovation utilizing the Renovation Fund shall occur between the twenty-fifth (25th) and thirtieth (30th) year of the Lease Term. in accordance with a "mid-term" renovation plan and budget to be agreed upon between Landlord's City Manager and/or designee and Tenant. The Renovation Fund shall terminate following completion of the "mid-term" renovation plan contemplated by this Section 2.4 and no further contributions to the Renovation Fund shall thereafter be required.
2.5 Right to Inspect, Audit and Dispute Resolution. Landlord shall, within five (5) years after receipt of the statements required to be delivered by Tenant pursuant to Sections 2.3 and 2.4 above, be entitled to inspect and audit, on reasonable written notice and at the place where such records are maintained within the County of Los Angeles, at Landlord'ssole cost and expense and not more than once in any calendar year, and to make and retain. copies of, all of Tenant'sbooks, records and accounts relevant. to the Capital Improvement Fund and Renovation Fund (collectively the "Funds"). Such audit shall be conducted. either by Landlord or by an auditor designated by Landlord. If Landlord determines as a result of such audit that there has been deficiency and/or overpayment in the funding of either Fund then Landlord shall provide written notice to Tenant detailing the deficiency and/or overpayment. Tenant shall have thirty 30) calendar days to object to the calculation of any such deficiency by delivering a reasonably detailed written response to Landlord describing its objection(s). If the parties are unable to obtain a final resolution within thirty (30) . calendar days of receipt of Tenant's objections, a mutually agreeable accounting firm having no prior material relationship with either party (the Accounting Firm") shall be retained to resolve any remaining objections. The determination of the Accounting Firm shall be -set forth in writing and will be conclusive and binding among the parties. In the event the parties submit any unresolved objections to such Accounting Firm as provided herein, the non-prevailing party, as determined by the Accounting Firm will be responsible for any fees and expenses of the Accounting Firm. Any deficiency in the Funds shall become immediately due and payable and bear interest at the lesser of eight percent (8%) per annum or the maximum applicable rate per annum allowed by law from the date such underpayment should have been made until. the. date. such payment is made; provided, that, in any event, such interest shall not begin accruing more than one (1) year prior to the date of the audit identifying such underpayment (i.e., the period of retroactive interest shall not exceed, one (1) year). Any overpayment identified by such audit shall be promptly returned to Tenant without interest thereon.
2.6 Compliance with Laws. Tenant shall cause the Improvements and Fixtures constructed and installed by Tenant to be constructed. and .installed in accordance. with applicable Laws. Upon the written request of Landlord, Tenant shall furnish Landlord with copies of all certificates and approvals relating to any Work performed by or on behalf of Tenant that may be 11 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM ^ U8-56 required by applicable Law or by underwriters and insurers or by any Mortgagee in connection with the construction and .installation of the Improvements and Fixtures, which copies Tenant shall certify as true, correct and complete to Tenant'sactual .knowledge.
2.7 Copies of Development Documents. Within two (2) months after substantial completion of any discrete Improvement project ( including, without limitation, the improvements described on Exhibit "C" attached), Tenant shall furnish Landlord with a complete set of Development Documents in Tenant's possession, including (a) permanent, transparent reproductions of the final working drawings, including revisions (ifthen available) made during construction, and (b) a complete set of specifications, including revisions made during construction, for all Work done on or to the Premises in connection with such Improvement project.
2.8 Tenant's Obligation to Construct Improvements. Tenant shall bear all costs and expenses associated with. the design, construction and installation. of all Improvements and Fixtures constructed or installed by Tenant, which costs and expenses include, without limitation: (i) utility hook-up and connection fees and all distribution facilities, conduits, pipelines and cables required to distribute utilities and amenities to or within the Premises; (ii) all design, engineering, financing and construction costs; (iii) all costs, fees and expenses incurred in processing and obtaining permits and entitlements; (iv) all environmental approvals, all subdivision approvals, use permits or variances, and all grading, building and like permits required to construct and occupy the Improvements; and (v) all Taxes and Assessments...
2.9 Landlord's Cooperation. Provided that Landlord shall not incur .any direct or indirect liability or obligation, Landlord will cooperate with Tenant (and Landlord shall execute applications, certificates .and .like ,.documents) as shall reasonably be required in Landlord's capacity as owner of the. Leased Land to enable and facilitate Tenant'sfiling for and receipt of all building permits, licenses, variances, permissions and consents necessary to construct, install and operate the Improvements and Fixtures. Nothing in this Section 2.9 shall require Landlord, in its capacity as a governing body, to approve, consent to or otherwise grant any permit or entitlement which may be necessary or useful in conjunction with the Development Plan so long as Landlord is acting in good faith and so .long as such refusal and/or denial constitutes a discretionary decision in the ordinary course of Landlord'sgoverning obligations.
2.10 Development Plan Deadline /Modification of Lease Term.. a) Failure to Obtain Approvals or Complete Construction. In the event Tenant (i) fails to obtain all necessary planning, zoning, entitlement, and Coastal Commission approvals along with evidence of adequate financing for the Development Plan within the timeframe set forth in Section 2.1 above, or (ii) fails to execute and complete all work in substantial compliance with the Development Plan (as it may be modified by mutual agreement of Tenant, Landlord and any other applicable governmental agencies granting such approvals) within five (5) years following the Lease Commencement Date, as `such date may be extended for Force Majeure events (provided such Force Majeure extension shall not .exceed two (2) years), the Term of this Lease, at Landlord's or Tenant's option and sole discretion exercised within six (6) months after the occurrence of such event, shall, except as otherwise provided in Section 2.b) 10(below, be modified. to expire on September 27, 2036. Subject to the procedures 12 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM C08-J6
for exercising an option set forth in Section 1.4 above, in the event the Term of this Lease is modified pursuant to this Section 2.a), 10(Tenant shall also have the. option to extend the Term of this Lease for one (1) additional five (5) year option period. Tenant shall deliver written notice of such election to Landlord at least twelve (12) . months but not more than forty-eight (48) months prior to the date that the option period would commence. If proper notification of the exercise of an option is not given pursuant to Section 1.4, such option shall automatically expire; provided, that, in connection with any exercise of the option Landlord shall notify Tenant of any objection to or deficiency in the Tenant's exercise of such option as provided in Section 1.4 above, and the provisions of such Section shall likewise apply to any exercise of the option set forth in this Section 2.10. Except as expressly provided in Section 2.b) 10(below, in the event the Term of this Lease is modified pursuant to this Section 2.10 due to the .denial of any necessary consent, permit or approval required to proceed with the Development Plan, Landlord shall be required to reimburse Tenant for the Execution Fee, less the amount of Ten Thousand Dollars ($10,000), which $10,000 amount shall be retained by Landlord for reimbursement of costs.. _
b) Failure to Obtain City Approval. Notwithstanding anything in Section
2.a) 10(above to the contrary, in the event that the entitlements required for Tenant to proceed with the Development Plan are not approved by the Landlord (either initially or after a modified Coastal Commission approval which requires the City's concurrence or approval); then, at Landlord's or Tenant's option and sole discretion exercised within six (6) months after the occurrence of such event, (i) Landlord shall be required to reimburse Tenant for the Execution Fee in full, (ii) Landlord shall also be required to reimburse Tenant for the Tenant'sdocumented out- pocket of-expenses for legal, accounting, architectural, engineering, consulting, investigative, and construction services relating to the Development Plan as well as its out of pocket expenses relating to application and permit fees, investigative fees and entitlement fees relating to the Development Plan; provided such reimbursement under (i) and (ii) above shall not exceed Two Hundred and Fifty Thousand Dollars ($250,000) (comprised. of a combination of the Execution Fee and reimbursement of the Tenant costs and expenses described above), and (iii) the Term of this Lease shall be modified to expire on September 27, 2043; provided, that, subject to the procedures_for exercising an option set forth in Section 1.4 above, in the event the Term of this Lease is modified pursuant to this Section 2.b), 10(Tenant shall also have the option to extend the Term of this Lease for one (1) additional five (5) year option period, subject to the same general provisions concerning manner of exercise and notice set .forth in Section 2.a)10( above. For purposes of applying this Section 2.b), 10(it shall be conclusively determined that the City has not approved the entitlements required by Tenant if Tenant proposes a project in substantial conformance with the requirements set forth in Exhibit "C" attached hereto and the City disapproves those entitlements. For purposes of this Section 2.b), 10(in the event the City conditionally approves the Tenant's proposed project, such conditional approval shall not be deemed a failure of Landlord to approve Tenant'sentitlements under this Section. c) Manner of Reimbursement• Modification of Other Lease Terms. Any reimbursement or payment to Tenant provided for in the preceding Sections 2.a) 10(or (b) shall be in the form of rent credits under this Lease. Such rent credits shall be taken by application of such credits to the next Rents due from Tenant to Landlord under the terms of this Lease following occurrence of the events resulting in such reimbursement or payment obligation. In 13 416475.14 001207.0007 4/ 2008.- 15/10:39 AM `` 08~5Ej addition, if the Term of this Lease is modified pursuant to Section 2.10 (a) or (b), then (i) Sections 1. b) [ 7(Removal of Improvements Upon Termination], 2.1 [ Tenant Development Program], 2.3 [Capital Improvement Fund], 2.4 [Renovation Fund], 2.7 [Copies of Development Documents] (except that such Section. shall .remain operative with respect to the Development Plan improvements, if any, in fact completed), 3. c) [ 1(Lease Execution Fee], 5. c) [ 1(Structural Review], Exhibit "C" [Tenant .Development Plan], and Section C of Exhibit "E" [Appreciation Rent] of this Lease shall, be cancelled .and. of no further force .and effect, and (ii) the Security Deposit required pursuant to Section 3. b) 1(shall be reduced to Seven Thousand Five Hundred Dollars ($7,500).
ARTICLE 3
RENT
3.1 Base Rent.
a) Monthly Payment of Base Rent. Subject to the provisions of Section 3.2 below, base rent ("Base Rent") during the Term shall be a monthly amount equal to Seven Thousand One Hundred and Seventy-Seven and 91/00 Dollars ($7, 91).77. Base Rent shall be due and payable, in advance, on the first (1St) day of each month of the Term of this Lease, provided, however, if the Lease Commencement Date is not the first day of the month, the first payment of Base Rent shall be due on the first, date of the Term and shall be prorated for that partial month.
b) Security Deposit. On or prior to the Lease Commencement Date, Tenant shall deposit with Landlord a .security deposit in the amount of Twenty-One Thousand Five Hundred and Thirty Four Dollars ($ 21, 00) ( 534.the "Security Deposit"), which is equal to three (3) months' Base Rent, as security for Tenant's faithful performance of its obligations under this Lease. If Tenant fails to pay Rent, or otherwise defaults under this Lease, Landlord may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due Landlord and/or to reimburse or compensate Landlord for any liability, expense, loss or damage which Landlord may suffer or incur by reason thereof. If Landlord uses or applies all or any portion of the Security Deposit, Tenant shall within thirty (30) calendar days after written request deposit monies with Landlord sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the Term of this Lease, Tenant shall, upon written request from Landlord, deposit additional monies with Landlord so that the total amount ofthe Security Deposit shall be equal to the Base Rent. Within ninety (90) calendar days after the expiration or termination of this Lease, Landlord shall return that portion of the Security Deposit not used or applied by Landlord. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Tenant under this Lease.
c) Lease Execution Fee. Concurrently with the execution of this Lease, Tenant shall deliver to ,Landlord aone-time fee ("Execution Fee") in the amount of Sixty Thousand Dollars ($60,000). Alternatively, Tenant may opt to make six (6) annual installment payments of $10,000 each on the Execution .Fee beginning on the Lease Commencement Date and continuing through the fifth (5th} anniversary thereof. If Tenant chooses to make installment 14 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM CQ8~56
payments, all deferred payments shall bear interest at a rate of five percent (5%) per annum from and after the Lease Commencement Date until the date paid. d) No Abatement. Tenant shall cause payment of Base Rent and all other Rent or charges, as the same may be adjusted from time to time, to be received by Landlord in lawful money of the United States, and, except as expressly provided in this Lease, without abatement, offset or deduction, on or before the date. on which it is due under the terms of this Lease. Base Rent and all other Rent and charges for any period during the Term which is less than one (1) calendar month shall be prorated based upon the actual number of days of the calendar month involved. Payment of Base Rent and other .Rent. and. charges shall be made to Landlord at its address stated herein or to such other persons or at such other address as Landlord may from time to time designate in writing to Tenant.
3.2 Adjustments to Base Rent. The Base Rent shall be increased (but not decreased) on the first day of the month following the fifth anniversary of the Lease Commencement Date and on the date that is every five years thereafter (i.e., on the first day of the month following the tenth anniversary, the fifteenth anniversary, the twentieth anniversary, and so forth through the fiftieth anniversary of the Lease Commencement Date and continuing every five years for any option period set forth in Section 1.4) (each such first day of a month being referred to as an Adjustment Date") as follows: The new monthly Base Rent for each month during the fiveyear period commencing with the relevant Adjustment Date shall be seventy-five percent (75%) of the average total monthly Rent (inclusive of all Base Rent and Percentage Rent but exclusive of any Appreciation Rent) payable by Tenant during the preceding 5-year period. For example only, if the total Rent (inclusive of all Base .Rent and .Percentage Rent but exclusive of any Appreciation Rent) payable by Tenant during the preceding 5-year period is $6, 000, 00then the new Base Rent as ofthe. Adjustment Date would be $75,000: .75 x [$6, 000 / 00.,60] = $75,000.
3.3 Additional Rent. In addition to Base Rent, Tenant shall pay or cause to be paid when due, as Additional Rent, throughout the Term all other additional sums described on Exhibit "E" as Participation Rent which Tenant is obligated to pay pursuant to the provisions of this Lease. Additional, Rent .shall .constitute rent payable hereunder with the same effect as if such rent were part of the Base Rent and, in the event of the nonpayment by Tenant of any such Additional Rent, Landlord shall have the same rights and remedies in respect thereof as Landlord may have in respect of Base Rent.
3.4 Triple Net Lease; Reimbursement of costs; No xent abatement or Reduction. The Rent has been established on the assumption that Landlord will not have to pay any costs or incur any liabilities or obligations of any kind relating to or arising out of the Tenant'simprovement of or operation on the Premises during the Term (except for the provision of ordinary and customary municipal services arising from Landlord'srole as a governing body and except as expressly set forth in this Lease). Accordingly, except as otherwise specifically set forth herein, Tenant shall promptly pay during the Term all reasonable out- pocket of-third party legal and appraisal expenses incurred by Landlord due to assignment, encumbrance, estoppel and appraisal resulting from Tenant'srequest for consent or approval. Reimbursement shall be up to a maximum amount to be reasonably determined by the parties before Landlord incurs expenses for the particular event. Landlord shall ,utilize.. its best efforts to minimize such expenses, including, if Tenant shall so request, utilization of in-house legal and other services rather than 15 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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outside advisors or consultants to the extent such in-house resources are available. Tenant shall not be required to reimburse Landlord'scosts related to the negotiation and preparation of this Lease, including all legal, consulting and appraisal costs related thereto, or any other costs incurred by Landlord prior to the Lease Commencement Date. Finally, except as expressly provided in this Lease, Tenant shall not be entitled to any abatement or reduction of Rent.
ARTICLE 4
USE AND COMPLIANCE WITH LAWS
4.1 Use of Premises.
a) Compliance with Applicable Laws. The Premises may be used solely for those uses not expressly prohibited by applicable Laws, including any zoning and planning ordinances.
b) Limitations on Uses. Tenant agrees that with respect to any subleases or other occupancy or operating agreements ("Subleases") entered into covering any portion of the Premises from and after the Lease Commencement Date, Tenant shall at all times exercise best efforts, and at no cost or expense to Landlord, to cause such subtenants, licensees or concessionaires ("Subtenants") to use such portions of the Premises in accordance with the limitations set forth on Exhibit "F" (" Limitation of Uses"). c) Use of Tidelands. If at any time during the Term, or any extension thereof, the terms of this Lease are or become inconsistent with the continuation of .the trust under which the Leased Land or any portion thereof are held by Landlord pursuant to the Tidelands Grant, Landlord and Tenant shall use their best efforts to modify the Lease and/or the tenancy contemplated hereunder to correct, resolve, or eliminate such inconsistencies, and ifthey cannot, then Landlord shall have the right to terminate this Lease upon giving six (6) months written notice to Tenant. Upon such termination, Tenant shall be entitled to the fair market value of the Leasehold Estate, assuming for the purpose of such value that the improvements are capable of being used on the Premises. The value of such Leasehold Estate shall be determined in accordance with the procedures set forth in Section 11. c) 4(and shall be based on Tenant'sloss of use over the portion of the Term which would have remained but for termination pursuant to this Section 4. c). 1(
4.2 Changes in Use. If Tenant or any person claiming under Tenant shall change the use of the Leased Land or the Premises in a manner that violates Section 4.1, at any time during the Term, without the prior written consent of Landlord, such change in use shall constitute a material breach of this .Lease and, subject to Article 12 regarding notice and opportunity to cure such breach, Landlord may terminate this Lease as provided in Article 12. Upon any such termination, all right, title and interest to the Premises, including the Improvements and Fixtures, shall vest solely in Landlord, without further cost or expense to Landlord, subject only to the rights of any Senior Mortgagee and other Mortgagees. Tenant agrees to execute all documents, including deeds, reasonably necessary to effect the rights of Landlord hereunder, including the right to have all right, title and interest to the .Premises vest. solely in Landlord. 16 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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4.3 Waste; Nuisance. Tenant shall not use, or permit to be used, the Premises, or any part thereof, in any manner which constitutes a waste, nuisance or unreasonable annoyance or which violates any Laws.
4.4 Environmental Requirements. Tenant shall, not use or permit to be used any Hazardous Substance" in the. construction, operation, maintenance or use of the Premises in violation of any applicable Law, rule, regulation, code or ordinance, including, without limitation, any storage, handling, release, emission, discharge, generation, abatement, disposition or transportation of any Hazardous Substance to, from, on or otherwise relating to the Premises.
Tenant shall, at its sole cost and expense, comply, and shall expend commercially reasonable efforts to cause each. of its employees, agents, contractors, subtenants, invitees and customers to comply, with all applicable Laws, rules, regulations, codes and ordinances relating to any Hazardous Substance, including, without limitation, obtaining and filing all applicable notices, permits, licenses and similar authorizations. Tenant shall not use or store_or permit to be used or stored on or in the Premises any Hazardous Substance in violation of any applicable Law.
4.5 Environmental Remediation and Indemnification.
a) Hazardous Substance. If Tenant discovers. any Hazardous Substance on the Premises, the presence of which violates any applicable Laws, Tenant shall immediately undertake, at Tenant's sole cost and expense, to remediate the presence of such Hazardous Substance in compliance with applicable Laws to the extent necessary to permit the construction, operation, maintenance. and use ofthe Premises. Notwithstanding the foregoing, Tenant shall not be obligated to remediate the presence of any Hazardous Substance placed on the Premises by Landlord or any agent, employee, contractor or representative of Landlord (which Hazardous Substance shall be remediated by Landlord at its sole expense as required by applicable Laws), or any Hazardous Substance which has .migrated onto the Premises from an adjacent property and which is the legal responsibility of such adjacent owner to remediate. b) Indemnification. Tenant shall indemnify, defend and hold the Landlord Indemnified Parties harmless from ..and against any and all third-party Claims against Landlord arising directly or indirectly from any breach of this Article 4 by Tenant. The foregoing indemnity includes, without limitation, remediation and disposal of any Hazardous Substance as and to the extent required by the foregoing provisions, and any Landlord Indemnified .Party's reasonable consultants' fees and charges, reasonable attorneys' fees and charges, reasonable investigation costs .and.. expenses and other similar costs and expenses incurred by any Landlord indemnified Party. The obligations of Tenant under this Section 4.5 .accruing prior to the expiration or earlier termination of this. Lease shall.. survive the expiration or earlier termination ofthis Lease.
4.6 - Evidence of Compliance. Tenant shall deliver to Landlord, upon Landlord's reasonable request, and at Tenant'ssole cost and expense, copies of documents and such other evidence as are normally and customarily issued by governmental authorities with jurisdiction over the Premises to demonstrate proof of compliance with all Laws pertaining to permits and authorizations relating to the Premises generally and to the Improvements specifically. 17 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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4.7 Right to Contest. At Tenant's sole _ cost _and expense, Tenant, by appropriate legal proceedings brought in good faith and diligently prosecuted in its name, may contest the validity or applicability to the Premises of any Laws, provided, however, that any such contest shall be maintained without cost to Landlord, and Tenant shall indemnify, defend and hold the Landlord Indemnified Parties .and. the Premises harmless. from and_ against any and all Claims arising or resulting from Tenant'sfailure to observe or comply with the contested Laws during the contest. If required in order for Tenant to bring or maintain any such contest, Landlord shall join in any such action or proceeding as the owner of the Premises subject to the indemnification and cost provisions set forth above.
ARTICLE 5
MAINTENANCE AND OPERATION
5.1 Maintenance.
a) Tenant'sResponsibility. Subject to the provisions ofArticle. 8 and 11, at all times during the Term, Tenant shall, at its sole cost and expense, keep and maintain all parts of the Premises in first-class order, condition and repair, reasonable wear and tear excepted.
Such obligation shall include, without limitation, the obligation to maintain all facilities on or in the Premises in a clean, sanitary, neat, tidy, orderly and attractive condition. It is the intention of the parties hereto that, except as expressly set forth in Section 5.d) 1(below, Landlord have no obligation during the Term, in any manner whatsoever, to maintain the Premises, the Improvements located thereon, or the Fixtures therein, whether structural or non-structural, all of which obligations are intended to be that of Tenant.
b) Tenant'sRights to Alter Premises. Nothing in this Section 5.1 defining the duty of maintenance shall be construed as limiting any right given elsewhere in this Lease for Tenant to alter, modify, demolish, remove, repair or replace any portion of the Premises. c) Structural Review. On or before the seventh (71h) anniversary of the Lease Commencement Date and every seven (7) years thereafter during the Term of the Lease, Tenant shall contract with a reputable licensed and insured structural engineer to perform a complete structural review of the Premises and to determine the viability of the Improvements to perform throughout the remaining Lease Term. Should. the review contain .tasks necessary to maintain the structural ,integrity of the Improvements, Tenant shall forthwith begin said improvements (which shall qualify for use of the Capital Improvement Fund as an approved capital expenditure).
d) Landlord'sResponsibility. Landlord covenants and agrees to keep in proper maintenance and repair and, if necessary, to replace ah pilings, bracngs stringers, decking,. and other public improvements on said pier, and to make all necessary and appropriate structural repairs to and, if necessary, to replace the exterior walls, ceiling, and floor of the concrete basement in the Premises. In the .event of any damage to or destruction of such improvements to be maintained by Landlord, or in the event Landlord'sfailure to properly maintain such improvements renders them unusable or inadequate, Tenant's obligation under Article 8 to repair or restore any Tenant improvements shall be suspended until Landlord has completed the required work ofrepair, replacement or improvement, but only to the extent such 18 416475.14 001207.0007 4/ 2008 - 15/10:39 AM
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damage, destruction or failure interferes with Tenant's performance of its obligations under Article 8. If Landlord fails to perform such work after written notice from Tenant, then Tenant may bring an arbitration proceeding pursuant to Section 17.4 below, and if it is determined that Landlord is in breach of .. its obligations hereunder (i) Tenant shall be entitled to recover its past damages resulting therefrom as determined by the arbitrator, including, without limitation, the right to offset any such damages incurred against any Rent otherwise payable by Tenant under the Lease, and (ii) to the extent such ongoing damages are established or provided for by such arbitration, Tenant shall thereafter be entitled. to offset such on-going damages against any further Rent payments under this Lease (without reduction or credit to Tenant's damages under i) above).
5.2 Requirements of Governmental Agencies.
a) _ Tenant's Responsibility. At all times during the Term, Tenant, at Terrant'~oletcso and expense, shall:
i) Make all alterations, additions or repairs to the Premises and every part thereof, required by all Laws now or hereafter in effect; and ii) Indemnify, defend and hold the Landlord Indemnified Parties and the Premises harmless .from and against any and all Claims arising from or relating to Tenant's failure to comply with and perform the requirements ofthis Section 5.2. b) Tenant's Right to Contest. Notwithstanding the provisions of subparagraph (a) above, Tenant may contest any and all such requirements provided that Tenant shall first post with Landlord a bond or other security, in form and amount reasonably acceptable to Landlord, to secure compliance with all such requirements and the obligations of Tenant under subparagraph (a) above if such requirements are determined to be applicable and enforceable.
ARTICLE 6
TAXES AND ASSESSMENTS
6.1 Taxes. Tenant shall pay all Taxes and Assessments during the Term of this Lease at least ten (10) calendar. days prior to delinquency. If the right is given to pay any of the Taxes or Assessments which Tenant is herein obligated to pay either in one sum or in installments, Tenant may elect either mode of payment.
6.2 Indemnification. Tenant shall indemnify, defend and hold the Landlord Indemnified Parties harmless from and against any and all Claims resulting from Tenant'sfailure to pay all such Taxes and Assessments. Subject to the provisions of Section 6.3 below, Tenant shall prevent any such Tax or Assessment from becoming a delinquency lien upon the Premises.
Landlord shall in no way be obligated to pay such delinquent Taxes or Assessments, but Tenant authorizes Landlord to make such payment, and, if Landlord makes such payment, it will become immediately due and payable to Landlord by Tenant and shall bear interest at the rate of ten percent (10%) per annum, or the maximum rate permitted by law, whichever rate is lower, from the date ofpayment by Landlord to the date ofrepayment by Tenant. 19 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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6.3 Tenant's Right to Contest. Tenant shall have the right, at its sole cost and expense, to contest the amount or validity of any Tax or Assessment by appropriate proceedings diligently conducted in good faith. As a condition precedent to Tenant'scontesting any Tax or Assessment, Tenant shall (i) comply with all laws, orders, rules and regulations respecting such contest, (ii) give Landlord prior written notice of Tenant's intent to so contest said. amount or validity; and (iii) in order to protect Landlord from any sale or foreclosure against the Premises or any part thereof, provide a good and sufficient surety bond or other security deemed reasonably acceptable by Landlord in the amount of such .Tax or .Assessment plus estimated penalties and interest which may be imposed. Tenant shall bear any and all costs, liabilities or damages, including reasonable attorneys' fees and costs, arising out of such contest. Nothing in this Section relieves, modifies, or extends Tenant'scovenant to pay any such Tax or Assessment at the time and in the manner provided in this Article 6 in the event such Tax or Assessment is determined to be due following such contest.
6.4 Landlord's Cooueration in Tenant's Contest. Provided Landlord suffers no unreimbursed out- pocket of-cost or liability in participating in such proceeding, Landlord shall reasonably cooperate (and Landlord shall execute applications, certificates and like documents) with Tenant in any proceedings brought by Tenant to contest the validity or the amount of any Taxes or Assessments or to recover any Taxes or Assessments paid by Tenant. If the provisions of any Law at the time in effect shall require that such proceedings be brought by or in the name of Landlord, then, provided Landlord incurs no cost or liability in doing so, Landlord shall join in any such proceedings or permit the same to be brought in its name. If any such proceedings shall be brought by Tenant, Tenant shall defend, indemnify and hold the Landlord Indemnified Parties harmless from.. and against any and all Claims arising from the conduct of such proceedings. Landlord shall not object to Tenant'sright to contest any Taxes and Assessments solely because the governmental revenues received by Landlord from such Taxes and Assessments may be adversely affected.
6.5 Prorations. Taxes and Assessments shall be prorated at the beginning and end of the Term to reflect periods during tax fiscal years at the commencement and expiration of this Lease for which said taxes are paid during which this Lease is not in effect. All such Taxesand Assessments shall be prorated and allocated between Landlord and Tenant to reflect the dates of commencement and termination.
ARTICLE 7
UTILITIES
7.1 Construction of Utilities; Costs. Tenant shall cause to be constructed all utilities necessary to serve the Premises. All costs associated with bringing utilities to the Premises, including, without limitation, related professional, engineering and consultant fees, service charges, meters, and the. costs of connections, including, without limitation, any hook-up fees assessed by any utility company, water district and/or government agency, shall be treated as a cost of construction of the Improvements and Fixtures, and shall be paid by Tenant.
7.2 Contracts with Public Utility. Tenant shall not enter into any contract or agreement binding on Landlord or Landlord's. Interest with any government agency, special district or public utility with reference to sewer, water, gas, electricity, telephone, storm drain 20 416475.14 001207.0007 4/ 2008 - , 15/ 10:39 AM
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and other utility lines, street improvements (including landscaping), street lighting, utility facilities, improvements. and/or connections, lines, pipes, distribution systems or easements and the like, without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Copies of such executed contracts or agreements shall be provided to Landlord promptly upon execution. Notwithstanding the foregoing, neither Tenant nor any subtenant shall be prohibited from purchasing electricity from an on-site power station (ifapplicable).
7.3 Utility Easements. Tenant shall have the right to grant to others in the future nonexclusive utility easements under or through the Leased Land for the purpose of facilitating the development of the Project. All such easements shall be underground, with the right, however, to reasonable surface access for. maintenance .and repair. Any interference arising as a result of construction of such utility systems and facilities shall be temporary, and all work on the Premises shall proceed expeditiously. In the event the installation. or maintenance of such future utility lines in such easements causes any damage to the Premises, or any portion thereof, including but not limited to pavement, curbs, landscaping and sidewalks, Tenant .shall repair the same, or cause the same to be repaired, at no cost or expense to Landlord.
Tenant shall not enter into any reciprocal easement agreements, covenants, conditions and restrictions, operating covenants or other similar types of agreements relating to the Premises which would survive the expiration or earlier termination of this Lease, without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Landlord shall respond in writing to Tenant'srequest for consent as quickly as practicable and in no event later than within forty-five (45) calendar days after Landlord'sreceipt thereof. The failure of Landlord to respond in writing to Tenant'srequest within said forty-five (45) day period shall be deemed to constitute Landlord's approval of the same; provided, however, that in the event Landlord reasonably requests additional information and/or documentation from Tenant regarding Tenant'srequest, said forty-five (45) day period shall be extended by the amount of time it takes Tenant to provide such information and/or documentation to Landlord. In the event Landlord disapproves Tenant's request, such disapproval shall be accompanied by a detailed explanation of the reasons_ underlying such disapproval: Any dispute between Landlord and Tenant as to whether.. Landlord unreasonably withheld its consent shall be subject to the arbitration provisions set forth in Section 17.4 ofthis Lease.
ARTICLE 8
ALTERATION, DAMAGE OR DESTRUCTION
8.1 Alteration of Improvements. Except as may be required by applicable Law, Tenant may not alter or .modify the structural components of the Premises in a manner that is visible from the exterior of the Premises without Landlord'sprior written consent, which consent shall not be unreasonably withheld or delayed. Within twenty (20) calendar days of such submittal by Tenant, Landlord shall provide its consent or a detailed written explanation of why its consent has been denied or withheld. If Landlord fails to provide such consent (or detailed explanation for its denial) within said period then Tenant may provide a second written notice of such requested approval and if Landlord. fails to either approve or disapprove (with explanation) such proposed alteration within ten (10) additional calendar days after delivery of such second notice, then such proposed alteration shall be .deemed approved; provided that, if Landlord 21 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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deems it necessary to meet with the City Council with respect to any proposed alteration or modification and if the thirty (30) calendar day period described above (20 calendar day initial notice, and 10 calendar. day additional notice) did not allow the opportunity to Landlord to do so because ofthe absence of any Council meeting within that period, then Landlord shall have up to fifteen (15) additional calendar days to schedule such matter for review by the City Council.
Any such structural alteration or modification that Tenant desires to make and which requires the prior consent of Landlord shall be presented to Landlord in written form with the proposed detailed plans. Any dispute between Landlord and Tenant as to whether Landlord unreasonably withheld its consent shall be subject to the arbitration provisions set forth in Section 17.4 of this Lease. All consents given by Landlord shall be conditioned upon (i) Tenant acquiring all applicable permits required by governmental authorities, (ii) the furnishing of copies of such permits prior to the commencement of any work, together with a copy of the .plans and
specifications for the alteration, to Landlord (except to the extent that, with respect to any permits, Tenant is not aware of such requirement prior to commencement of the work), and (iii) the compliance by Tenant with all conditions of .said permits in a prompt and expeditious manner. Any alteration by Tenant during the Term shall be done in a good and workmanlike manner, with good and .sufficient materials, and in compliance with all Laws. Tenant shall promptly upon completion thereof furnish Landlord. with as-built plans and specifications therefor.
8.2 Repairs and Rebuilding.
a) If the Premises are damaged or destroyed during the Term, and such damage or destruction is an Insured Loss, then, except as provided in subsection (c) below, Tenant shall, at its sole.cost and expense, restore the Premises to substantially the same condition they were in (subject to then applicable Laws) immediately prior to such damage or destruction.
In the event of such an Insured Loss, Tenant shall be entitled to a proportionate reduction in Base Rent from the date of said destruction and .continuing until the completion of such repair, construction, reconstruction or restoration. Such proportionate reduction shall be based upon the extent to which the making of such repair, construction, reconstruction or restoration shall interfere with the business conducted by Tenant on the Premises. b) If the Premises are damaged or destroyed during the Term, .and such damage or destruction is not an Insured Loss, and the cost of restoration is One Million Dollars 1, 000) 00,or less, then Tenant shall, at its sole cost and expense, restore the Premises to substantially the same. condition they were in (subject to then applicable Laws) immediately prior to such damage or destruction.
c) If the Premises are damaged or destroyed during the Term, and (i) such damage or destruction: is not an Insured .Loss, and the cost of restoration is more than One Million Dollars ($1, 000) 00, or (ii) such damage or destruction is an Insured Loss but the proceeds available for reconstruction (which are not applied by a Mortgagee to repayment of its loan) are insufficient to fund the costs of reconstructing the improvements and such shortfall is greater than One Million Dollars ($1, 000) 00,or (iii) such damage or destruction, regardless of whether or not it is an Insured_Loss, occurs during the last ten years of the then. existing Term of this Lease, then Tenant may, on written notice to Landlord within ninety (90) calendar days following the date of such damage or destruction, elect to (i) at its sole cost and expense, restore 22 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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the Premises to substantially the same condition they were in immediately prior to such damage or destruction (subject to then applicable Laws), or (ii) terminate this Lease and, as and to the extent directed by Landlord, demolish and remove. all Improvements, Fixtures and personal property from the Leased Land.. Tenant'sobligations to so restore the Leased Land. shall survive any termination of this Lease.
The completed work of repair, restoration or replacement shall be at least equal in value and quality to the condition of the Improvements or Premises, as the case may be, before the event giving rise to the work. Landlord shall not be required to furnish any services or facilities or to make any repairs of any kind to the Improvements or Premises. The election by Landlord to perform any obligation of Tenant under this Section 8.2 on Tenant's .failure or refusal to do so shall not constitute a waiver of any right or remedy for Tenant's breach, and Tenant shall promptly reimburse Landlord for all costs and expenses incurred by Landlord in connection therewith, together with. interest thereon at the .rate of ten percent (10%) per annum, or the maximum rate permitted by law, whichever rate is lower, from the date of incurrence by Landlord to the date of repayment by Tenant.
8.3 Indemnity. Tenant shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Tenant at or for use on the. Premises, which claims are or may be secured by any mechanics' or materialmen'slien against the Premises or any interest therein. Tenant. shall give Landlord not less than ten (10) calendar days' notice prior to the commencement of any work in excess of One Hundred Thousand Dollars ($100,000) in, on or about the Premises, and Landlord shall have the right to post notices ofnon-responsibility in or on the Premises. as provided by law. If Tenant shall, in good faith, contest the validity of any such lien, claim or demand, then Tenant shall, at its sole cost and expense, indemnify, defend and hold Landlord and the Premises harmless from .and against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against Landlord or the Premises.
ARTICLE 9
INSURANCE, EXONERATION AND INDEMNITY
9.1 Liability Insurance.. At all times during the Term, and during any period of continued occupancy of the Premises by Tenant after the Term, Tenant shall, at its sole cost and expense, provide and keep in force (i) workers' compensation insurance policies as required by Law and (ii) commercial general liability insurance policies, in standard form, protecting Landlord, Tenant, Senior Mortgagee and any Mortgagee (and naming Landlord and, ifrequested by Landlord, Senior Mortgagee and any Mortgagee, as additional insureds) against liability for injury to or death of any person or persons arising out of the ownership, use, occupancy or maintenance of the Premises by Tenant, any subtenant, and their respective employees, agents, contractors, invitees and. customers.. Such liability insurance shall: be in the amount of not less than Two Million Dollars ($2, 000) 00,for injury or death of one person in any accident or occurrence and in the amount of not less than Five Million Dollars ($5, 000) 00,for injury to or death of more .than one person in any one accident or occurrence; not allow or provide for a deductible" in excess, of Twenty-Five Thousand Dollars ($25,000), or such greater amount as 23 416475.14 001207.0007 4/ 2008 - 15/10:39 AM
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Landlord shall approve, such approval not to be unreasonably withheld; and be endorsed to extend coverage to:
a) Completed Operations and Products Hazard;
b) Explosion, collapse and Underground Property Coverages; c) Blanket Contractual Liability Coverage;
d) Broad Form Property Damage;
e) Fire Legal Liability Coverage;
f) Premises Medical Payments Coverage (in an amount not less than $10,000 per accident);
g) Extended Bodily Injury Coverage (liability from the use of reasonable force for the purpose ofprotecting persons or property); and h) Personal Injury and Advertising Injury Liability Coverage.
9.2 Fire and Extended Coverage Insurance. At all times during the Term, Tenant shall, at its sole cost and expense, provide and keep in force insurance policies, against loss or damage to the Premises, including any alterations and additions made thereto, together with all fixtures, equipment and personal property of Tenant therein, in an amount reasonably estimated to be equal to the full replacement value thereof (without deduction or depreciation and, in any event, in an amount sufficient to prevent Tenant from becoming a coinsurer of any partial loss thereunder, except that a deductible not. to exceed Twenty-Five Thousand Dollars ($25,000), or such greater amount as Landlord shall approve, such approval not to be unreasonably withheld, may be provided), and providing protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, and special extended perils (all risk) insurance. The full replacement value of such improvements, alterations, additions, fixtures, equipment and personal property shall be determined and evidenced by the certificate of the insurance company or companies issuing such insurance at the time the policy or policies are initially obtained .and shall be redetermined once every three (3) years thereafter by the respective issuers of the insurance policies in effect from time to time.
Subject to the rights of the Senior Mortgagee and any Mortgagee, all proceeds of Tenant's fire and extended coverage insurance in excess of $250,000 shall be held by the insurance carriers or, at Tenant's option exercised by written notice to such insurance carriers and to Landlord, by a trust company, escrow or other institutional intermediary or lender selected by Tenant, and reasonably approved by Landlord, and shall be disbursed by such insurance carriers or trust company or lender in progress payments in reimbursement or payment of the costs incurred in repairing or restoring the Premises. Any excess proceeds shall be disbursed to Tenant. Notwithstanding the foregoing, Landlord and Tenant acknowledge and agree that the provisions regarding disbursement of proceeds set forth in this Section 9.2 shall be subject and 24 416475.14 001207.0007 4/ 2008 -. 15/10:39 AM
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subordinate to the provisions regarding disbursement of proceeds set forth in the Senior Mortgage and any Mortgage.
9.3 Insurance Policies. All policies of insurance provided for herein shall be issued by financially responsible insurance companies qualified to do business in California (unless approved by Landlord's City Manager, which approval shall not be unreasonably withheld or delayed), with a general policy holder'srating of not less than A, and financial ratings of not less than Class VIII, as rated in the most current available "Best's" Insurance Reports, and shall name Landlord as an additional insured under Section 9.1. Such policies shall further provide that they may not be cancelled by the insurer until at least thirty (30) calendar days after delivery by mail of notice of the proposed cancellation or modification upon all parties named in such policies as insured, unless such cancellation is due to the non-payment of premiums, in which event only ten 10) calendar days' notice shall be required. All public liability, property damage and other casualty policies shall be written as primary policies, not contributing with any other coverage which Landlord or Tenant may carry. Tenant may provide all or any portion of the coverage required herein by blanket or umbrella policy so long as such policy (together with any underlying policy) provides at least the minimum coverages required herein. Tenant shall deliver to Landlord copies of the policies for all the insurance required to be carried by Tenant, or certificates evidencing the existence and the amounts of such insurance, or renewals thereof or binders thereto, if applicable, (a) at least ten (10) calendar days prior to the date Tenant is first required to obtain such insurance, (b) at least ten (10) calendar days prior to the expiration of any such policies, and (c) as soon as reasonably possible following any change in the policy limits or coverage of any such policies (but in no event longer than 60 days after Tenant's receipt of written notification of such change and the terms thereof). Tenant shall permit Landlord to inspect the policies of insurance required by this Lease at all reasonable times, and, upon request, Tenant shall provide Landlord with satisfactory evidence that such policies are in full force. All insurance policy limits shall be adjusted every ten (10) years upon Landlord'srequest on at least one hundred twenty (120) calendar days' prior written notice to Tenant. Any such adjustment shall be commercially reasonable, lawful, consistent with the insurance coverages readily available on commercially reasonable terms and then being customarily obtained on properties of similar size and nature, and shall take effect at the next policy renewal period.
9.4 Waiver of Subrogation. To the extent permitted by law and without affecting the coverage provided by insurance required to be maintained hereunder, Landlord and Tenant each waives any right to recover against one of the others for (a) damages for injury to or death of .persons, (b) damages to property, (c) damage to the Premises or any part thereof, and (d) claims arising by reason of any of the foregoing, but only to the extent that any of the foregoing damages and/or claims are covered (and then only to extent of such coverage) by insurance actually carried by Landlord or Tenant. This provision is intended to waive fully and for the benefit of each party, any rights and/or claims which might give rise to aright of subrogation in any insurer. Each party shall cause each insurance policy obtained by it to permit such waiver of subrogation or to prove that the insurer waives all.. right of recovery by way of subrogation against either party in connection with any damage covered by such policy. If any insurance policy cannot be obtained permitting or providing for a waiver of subrogation,. or is obtainable only by the payment of an additional premium charge above that charged by insurers issuing policies not permitting or providing for a waiver of subrogation, the party undertaking to obtain such insurance shall notify the other party of this fact. The other party shall have a period of 25 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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thirty (30) calendar days after receiving the notice either to place the insurance with an insurer that is reasonably satisfactory to the other party and that will carry the insurance permitting or providing for a waiver of subrogation, or to agree to pay the additional premium if such a policy is obtainable at additional cost. If such insurance cannot be obtained or the party in whose favor a waiver of subrogation is desired refuses to pay the additional premium charged, the other party shall be relieved of the obligation to obtain a waiver of subrogation rights with respect to the particular insurance involved during the policy period of such insurance (and both parties shall then be relieved from any waiver of rights to recover from each other), but such obligation shall revive (subject to the provisions ofthis Section) upon the expiration of such policy period.
9.5 Exoneration and .Indemnity. Tenant agrees, as a material part of the consideration to Landlord under this Lease, that Tenant shall be responsible for events occurring in, upon or~ about the Premises from the Lease- Commencement Date through the expiration or earlier termination of the Term. Except to the extent of Landlord's or its representatives', agents', employees' or officials' negligence or willful misconduct or as otherwise expressly provided in this Lease, Tenant shall indemnify, defend and hold the Landlord Indemnified Parties harmless from and against any and all third-party Claims arising out of, or related to (or allegedly arising out of or related to): ( i) the use or occupancy of the Premises by Tenant or any subtenants; (ii) any activity or event occurring in, upon or about the Premises during the Term; iii) any failure by Tenant to perform any obligation to be performed by Tenant under the terms of this Lease; or (iv) any act, omission, negligence or misconduct of Tenant or any subtenant or any of their employees, agents, contractors, invitees or customers. If any action or proceeding is brought against Landlord by reason of any such Claim, Tenant, upon request of Landlord, shall defend the same by counsel reasonably satisfactory to Landlord at Tenant's sole cost and expense. Except to the extent of Tenant's or any Subtenant's, or any of their respective employees' representatives', agents', contractors', invitees', or customers' negligence or willful misconduct or as otherwise expressly provided in this Lease, Landlord shall indemnify, defend and hold the Tenant Indemnified .Parties harmless from and against any and all third-party Claims arising out of, or related to (or allegedly arising out of or related to) any negligent acts or omission or willful misconduct of Landlord or any of its employees, agents, contractors, or representatives. If any action or proceeding is brought against Tenant by reason of any such Claim, Landlord, upon request of Tenant, shall defend the same by counsel reasonably satisfactory to Tenant at Landlord'ssole cost. and expense.
Tenant, as a material part of the consideration to Landlord under this Lease, hereby assumes all risk of damage or destruction to property or injury to or the death of persons in, upon or about the Premises from any act, omission or negligence ofany~other tenant or occupant ofthe Premises, or any invitee of or visitor to the Premises, or any such person's employees, agents, contractors, invitees or customers. The preceding sentence is not and should not be construed as a waiver by Tenant of any of Tenant'srights of termination under Articles 8 and 11. 26 416475.14 001207.0007 4/ 2008- 3915/0;AM
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ARTICLE 10
ASSIGNMENT AND SUBLETTING
10.1 Restriction on Assignment.
a) Except as otherwise permitted pursuant to this Article 10 and Article 15 of this Lease, Tenant shall not assign, transfer, convey or otherwise sell this Lease, or Tenant's Leasehold Estate, without the prior written consent of Landlord. Landlord shall act reasonably in reviewing and granting or denying its approval of any such assignment. Any such assignment without Landlord'sprior written consent shall be void and, at the option of Landlord and upon delivery of written notice to Tenant, shall constitute a Default under this Lease. Upon receipt of such notice from Landlord and subject to Tenant's right to bring an arbitration under Section
12. b) 1(to determine whether any Default has in fact occurred, Tenant shall either cancel, reverse or rescind such assignment or satisfy the requirements of any conditional approval Landlord may elect to grant in its sole and absolute discretion within ninety (90) calendar days following such written notice of Default. Subject to Tenant'srights under Section 12. b), 1(Tenant'sfailure to cure any Default under this Section 10. a) 1(within such ninety ( 90) day period shall automatically be deemed an Uncured Default under this Lease. In order to obtain approval of an assignment:
i) Tenant shall give Landlord reasonable advance written notice of the proposed assignment (the "Transfer Notice"), providing appropriate documentation to Landlord, as Landlord may reasonably require, evidencing that the proposed assignee has, among other reasonable qualifications, the experience, business background and financial capacity to reasonably ensure the continued and prompt performance ofthe obligations of Tenant under this Lease and the maintenance of the Premises after .said .assignment becomes effective; provided, however, the assignee need not be required to have such qualifications with respect to the operations of the Premises so long as such assignee engages and retains a third party to operate the Premises who has such qualifications. In the event such assignee engages a third party (and thereafter retains such. third party or a successor with similar qualifications at all times) to operate the Premises, Landlord reserves the right to approve such third party which approval shall not be unreasonably withheld or delayed. The Transfer Notice shall give: (a) the proposed effective date of the assignment; (b) the identity of the proposed assignee; (c) all other material terms of the proposed assignment; (d) in detail the type of business operation the proposed assignee intends to conduct on .the Premises; and (e) Tenant's warranty and representation that Tenant is not in breach or violation of any of its obligations or duties under this Lease beyond any applicable grace period under this Lease (or, if there is such a breach or violation, a statement identifying such breach or violation). The Transfer Notice shall be accompanied by a copy of the proposed agreement documenting the proposed assignment, or if none, a copy of any offers, draft agreements, letters of commitment or intent and other documents sufficient to describe the terms pertaining to the proposed assignment and provide the Landlord with the information relevant to exercise of its approval right relating to such proposed assignment. If only preliminary, draft or summary documents are available to Landlord. in connection with its review of a proposed assignment, Tenant shall deliver to Landlord complete copies of the final form of the assignment documents as soon as they are available. Landlord shall approve or disapprove such assignment within sixty (60) calendar days after Tenant has furnished Landlord with all required. and reasonably requested information and, in connection 27 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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with any disapproval, shall specify the reasons therefor. Within thirty (30) days after receipt of a request from Tenant for approval of such an assignment, Landlord shall notify Tenant in writing of any additional information or materials, if any, required by Landlord to act upon Tenant's request for approval. If Landlord fails to approve or disapprove the proposed assignment within the 60-day period provided above, then Tenant may give Landlord a second written notice identifying the consent being requested from Landlord, and if Landlord still fails to approve or disapprove (with explanation) such request for consent within thirty (30) calendar days after delivery of such second notice, then such request for consent to the assignment shall be deemed to have been given and the proposed assignment shall be deemed approved. In the event Tenant terminates any operator of the Premises, Tenant shall give Landlord prompt written notice thereof and shall, subject to the foregoing, designate a new operator of the Premises within ninety (90) calendar days thereafter. The required experience to operate the Premises shall be deemed satisfied if the assignee or its parent (or a professional manager retained by such assignee) has at least five (5) years experience in operating similar Premises. Landlord may withhold consent to a proposed assignment only if, in Landlord'sreasonable good faith business judgment, Landlord determines that any of the following is the case: (i) the proposed assignment will result in material deterioration. in the quality of operation conducted in the Premises, as compared to the operation conducted by Tenant prior to the date of the Transfer Notice; (ii) the proposed assignee has failed to demonstrate to Landlord that the proposed assignee has sufficient relevant business experience; (iii) the proposed assignee fails to demonstrate to Landlord that it is creditworthy and has access to sufficient liquid resources with which to ensure prompt payment when due of all. rent and other charges hereunder and the on-going performance of the operation of the Premises; (iv) the proposed assignee's proposed use of the Premises conflicts with use provisions and restrictions in Article 4 of this. Lease; (v) the proposed assignee's use
would breach any covenant of this Lease respecting the use of the Premises; or (vi) Tenant has committed a monetary Default or anon-monetary Uncured Default under this .Lease which remains uncured and such breach or violation will not be cured. or remedied concurrently with or as a result of such assignment.
ii) The proposed assignee shall expressly assume, in writing, all obligations, covenants and conditions of this Lease which accrue from. and after the date of such assignment.
iii) If Tenant disputes Landlord's disapproval of any proposed assignment, then the issue, at Tenant'selection, made promptly after Tenant receives Landlord's notice ofobjection, shall be submitted to Arbitration as provided in Section 17.4. b) If Tenant is a limited liability company, corporation, or an unincorporated association or partnership of any kind, the sale of any stock or interest in said. corporation, association or partnership pursuant to any transaction (or series of transactions cumulatively occurring since the date of the last previous assignment which required Landlord'sapproval) which in the aggregate equals or exceeds fifty percent (50%) of the overall stock or interest shall be deemed an assignment within the meaning ofthis Article 10. Notwithstanding anything to the contrary in this Article 10, the following shall not constitute an assignment or transfer subject to this Article 10:
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i) a transfer to a spouse in connection with a property settlement agreement or decree of dissolution of marriage or legal separation; ii) a transfer for estate planning purposes of ownership interests in Tenant or in constituent entities or members of Tenant to a member of the family of the transferor, or to a trust or other entity for the .benefit of a member ofthe family of the transferor, whether such transfer is the result of gift, devise, intestate succession or operation of law; iii) a transfer of a beneficial interest resulting from public trading in the stock or securities of an entity, where such entity is a corporation whose stock is traded publicly on a national stock exchange or is traded in the over- counter the-market; iv) a mere change in the form, method or status of ownership (e.g. trust interest to limited liability company);
v) any transfer resulting from a Condemnation by Landlord. vi) any granting of a security interest in connection with a financing upon the Premises or any transfer resulting from the foreclosure thereof. c) It is further agreed that any consent given by Landlord to Tenant to assign this Lease shall not be construed as a consent to or as a waiver of Landlord'sright to object to any other assignment to which its consent in writing has not. been obtained and for which its consent is necessary.
d) Notwithstanding anything to the contrary contained or implied in this Article 10, in the event Tenant desires to .sell or .assign its entire leasehold .interest (the Leasehold Estate") during the term of this Lease it shall notify Landlord of such election (the ROFO Notice") and Landlord shall have the first right to offer to purchase the Leasehold Estate upon the terms set forth below. .Following Tenant's delivery of the ROFO Notice to Landlord, Landlord shall have the first right to offer to purchase such Leasehold Estate ROFO") by notifying Tenant within twenty-one (21) calendar days of its receipt of the ROFO Notice that Landlord is .interested in acquiring such Leasehold Estate either upon the terms Tenant has "established.. for the. sale or marketing of the Leasehold Estate or upon such alternate terms as Landlord shall. specify to Tenant in writing within that twenty-one day period. If Landlord fails to notify Tenant in writing within such period that Landlord desires to purchase the Leasehold Estate .upon the terms Tenant has .established or upon such alternate terms as Landlord shall propose, or, if, notwithstanding such notification from Landlord, Landlord or Tenant fails to enter into the Purchase Agreement (as hereinafter defined) as provided below, then in either such case, Landlord shall be deemed to have waived its. ROFO, and Landlord shall have no further rights with respect to acquiring the Leasehold Estate and Tenant shall have the 29 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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absolute right to assign or transfer the Leasehold Estate. in its .sole and absolute discretion, subject to the provisions of this Article 10; provided, that (i) if, but only if, Landlord did propose alternate terms of purchase within said twenty-one (21) day period which were unacceptable to Tenant (Tenant having the right to accept or reject such proposed alternate terms in Tenant'ssole and absolute discretion), then Tenant shall not, within the following two (2) year period, enter. into a purchase agreement for sale of the Leasehold Estate .for an amount .which is less ,than eighty percent (80%) of the rejected amount offered by the Landlord without first notifying Landlord of the revised _ terms _of sale. and .offering Landlord a new opportunity to exercise the ROFO with .respect to such revised terms in accordance with the ROFO notice, response and exercise provisions. set forth above; (ii) regardless of whether Landlord .has timely proposed alternateterms for purchase of the Leasehold Estate following receipt of the ROFO Notice, if Tenant has not entered into an agreement for sale of the Leasehold Estate within two (2) years after expiration of the ROFO Negotiation Period (as defined below) then Tenant shall not enter into a new agreement for sale of the Leasehold Estate following the expiration of such two (2) year period without first providing the Landlord a new ROFO Notice and complying again with the right of first offer provisions provided above; (iii) regardless of whether Landlord has timely proposed alternate terms for purchase of the Leasehold Estate following receipt of the ROFO Notice, if Tenant has entered into an agreement for sale of the Leasehold Estate within two (2) years after expiration of the ROFO Negotiation Period but such purchase agreement has not closed during that two (2) year period, Tenant shall not consent to assignment of the direct or indirect interest of the buyer under such agreement to a person or entity that is not affiliated (as defined below) with that proposed buyer following the expiration of such two (2) year period without first providing the Landlord a new ROFO notice and complying again with the right of first offer provisions provided above; and (iv) Tenant shall notify Landlord promptly upon opening of escrow by Tenant for sale of its interest in the Leasehold Estate, and upon Tenant's receipt of notification of an assignment by a buyer to a third party purchaser who is unaffiliated with the assigning buyer of the buyer's rights under an existing agreement to purchase. the Leasehold Interest. For purposes of this subsection, a person or entity shall be deemed affiliated" with another person or entity so long as the ultimate beneficial ownership interests of such person or entity (disregarding all higher tier intermediary corporations, partnerships, limited liability companies, trusts or other like entities) constitute at least fifty percent (50%) of the of the ultimate beneficial ownership interests of the related entity (disregarding all higher tier intermediary corporations, partnerships, limited liability companies, trusts or other like entities).
If Landlord exercises the ROFO as set forth above, Landlord and Tenant shall promptly meet to negotiate in good faith the terms of a proposed purchase and sale agreement and shall use their commercially reasonable efforts to enter into a definitive purchase and sale agreement the "Purchase Agreement") within thirty (30) calendar days of the receipt by Tenant of Landlord's notice of Landlord's interest in .acquiring the Leasehold Estate ( the "ROFO Negotiation Period"); provided, that as set forth above, Tenant shall not have any obligation to accept any proposed offer by Landlord to purchase the Leasehold Estate for an amount which is less than that which is acceptable to Tenant, in its sole and absolute. discretion. The Purchase Agreement shall be executed by both parties, if at all, within said thirty (30) calendar day period.
If the parties negotiate in good faith but are unable to agree upon and execute such a definitive Purchase Agreement within said thirty (30) calendar day period, the parties shall have no further obligation to negotiate or execute such a Purchase Agreement and, except as expressly provided 30 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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in the proviso at the end of the preceding paragraph, Tenant may proceed with assignment ofthis Lease and Tenant'sInterest free of such ROFO, and Tenant shall have no liability to Landlord based upon the failure of Tenant and Landlord to execute a mutually agreeable purchase and sale agreement. The parties acknowledge and agree that there shall be no right to interfere with a sale of the Leasehold Estate by bringing a specific performance action with respect to the ROFO in the event a Purchase Agreement is not timely executed and the parties expressly waive any right to seek specific performance of such ROFO provision or to enjoin, restrain or otherwise interfere with a sale of the Leasehold Interest by Tenant. The parties agree that, in the event of a claim for breach of the ROFO procedure or the obligation to negotiate in good faith for a period of thirty 30) calendar days as set forth above, the sole remedy shall be to recover any damages suffered or incurred as a result of such breach.
e) Landlord may accept Rent or performance of Tenant's obligations from any person other than Tenant pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of Landlord'sright to exercise its remedies with respect to any Default by Tenant.
f) Regardless of Landlord'sconsent, no assignment shall: (i) be effective without the express written assumption by such assignee of the obligations of Tenant under this Lease arising from and after the effective date of such assignment; (ii) release Tenant of any obligations hereunder which arose prior to the effective date of such assignment; or (iii) alter the primary liability of Tenant for the payment of Rent or for the .performance of any other obligations to be performed by Tenant prior to the date of such assignment. Following the effective date of an assignment of this Lease with the Landlord'sconsent or authorization, the assignor shall be released from any further liability with respect to any obligations accruing under this Lease from and after the effective date of such assignment.
10.2 Assignment Pursuant to the Bankruptcy Code. The restrictions on assignment of this Lease and other .terms and conditions set forth. in this Article 10 shall, to the extent allowed by law, apply to any assignment, transfer, conveyance or sale of this Lease, or any interest of Tenant under this Lease, pursuant to the Bankruptcy Code, or by operation of law. In addition, the following additional restrictions shall apply to any assignment made pursuant to the Bankruptcy Code.
a) , _Any person or entity to which the Lease, or any interest herein, is so assigned, transferred, conveyed or sold, shall be deemed without further act or deed to have assumed all of the obligations arising under this Lease on and after the date of such assignment.
Any such assignee shall, upon demand of Landlord, execute and deliver to Landlord a written document confirming such assumption.
b) Such assignee shall provide Landlord with a cash deposit, appropriate bond or bonds, or other form of security acceptable to Landlord, to ensure the future performance of the obligation of Tenant remaining to be performed under this Lease, provided such cash, bond or security is reasonable in amount.
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c) To the extent of any delinquency in the Rent payable to Landlord under this Lease, any and all monies, cash equivalents, or other considerations payable or otherwise to be delivered in connection with each assignment shall be paid or delivered to Landlord, shall be and remain the exclusive property of Landlord and. shall not constitute property of Tenant or of the estate of Tenant. within the meaning of the Bankruptcy Code. Any and all monies or other consideration constituting Landlord's
property under the preceding sentence not paid or
delivered to Landlord shall be held in trust for the benefit of Landlord and be promptly paid or delivered to Landlord.
10.3 Subleases and Subletting. Landlord and Tenant contemplate that .Tenant. will enter into Subleases for portions of the. Premises to be occupied by Subtenants who will operate their businesses in the Premises. Such subletting is expressly permitted only with the written consent of Landlord, which will not be unreasonably withheld or delayed, as hereinafter provided, but such consent will not relieve Tenant of its .obligations under this Lease. Landlord shall act reasonably in reviewing and granting or denying its approval of any such Sublease. If requested by Tenant, Landlord shall execute nondisturbance agreements in form and substance mutually and reasonably acceptable to Landlord, Tenant and such Subtenant. Landlord need not grant approval of a proposed Sublease or enter into a nondisturbance agreement with respect to any Sublease unless the following criteria are satisfied prior to Landlord granting its approval to such Sublease or agreeing to enter into a nondisturbance agreement:
a) Tenant shall give Landlord reasonable advance written notice of the proposed Sublease, providing appropriate documentation to Landlord as Landlord may reasonably require evidencing that the proposed Subtenant has the experience, business background and financial capacity to perform its obligations under the proposed Sublease. b) No Sublease term shall exceed or extend beyond the Term of this Lease without Landlord'sconsent.
c) The Subtenant must. agree to waive all claims against Landlord for damages to goods, wares, merchandise, buildings, installations or other improvements in, upon, or about the subject portion of the Premises unless.. caused by the negligence or willful misconduct of Landlord, its officers, agents or its contractors. The Subtenant must also confirm in writing that this Lease has been made available to it for its review and that .its Sublease is subject and subordinate to this Lease.
d) Subtenant must agree not to discriminate against any person or class of persons by reason of sex, race, color, creed, ancestry, national origin, age, physical handicap or medical condition, and shall make its accommodations and services available to all persons on a nondiscriminatory basis.
e) Subtenant shall .indemnify Landlord with respect to third-party claims arising from the Subtenant's use or occupancy of the Premises or otherwise arising from its negligent acts or omissions or its willful misconduct.
f) The execution of or operation under the proposed Sublease shall not result in the violation of any Laws.
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In the event of a nondisturbance agreement, termination of this Lease prior to expiration of any Sublease term shall not serve to cancel any Sublease, but shall operate as an assignment to Landlord of such Sublease and all rights of Tenant thereunder shall terminate and shall pass to Landlord. In such case Landlord agrees to be bound by the terms of any such Sublease so long as such subtenant is not in default in the performance of any obligations under the applicable Sublease beyond any applicable grace period. Landlord may, at its option, transfer its interest in any such Sublease to a new .Tenant or otherwise, as Landlord deems fit. Any request by Tenant for Landlord approval of a Sublease and Subtenant shall be in writing and accompanied by a copy of the proposed Sublease and such other information concerning the proposed Subtenant as Landlord may reasonably request. Landlord shall respond to Tenant'srequest within thirty (30) calendar days after receipt and, in the event of any disapproval, shall set forth in reasonable detail the reasons therefor. If Landlord fails to approve or disapprove such Sublease or Subtenant within such thirty (30) calendar day period, then Tenant may deliver a second notice to Landlord requesting such approval and if Landlord fails to approve or disapprove (with explanation) such Sublease and Subtenant within fifteen (15) calendar days thereafter, then such Sublease and Subtenant shall be deemed approved.
ARTICLE 11
EMINENT DOMAIN
11.1 Rights .Governed by this Lease. In the event of any "Taking" (as hereinafter defined) of the Premises, the rights of Landlord and Tenant shall be as specified in this Article 1 L
11.2 Definitions. As used .herein, the following terms shall have the following meanings:
a) "Taking" shall mean any taking or damage to the Premises or any portion thereof or interest therein, including severance damage,- under the power of eminent domain, or by inverse condemnation. or for any public or quasi-public use. A "Taking" shall include any voluntary conveyance or transfer in lieu of the exercise of the power of eminent domain or while eminent domain proceedings are pending. A Taking shall be deemed to occur as of the date the condemning authority takes title or physical possession, whichever shall first occur. b) "Total Taking" shall mean the Taking of "all of the Premises or if Tenant makes the election specified in either Section 11. a) 6(or (b) below. c) "Partial Taking" shall mean Taking which is not a Total Taking. d) "Award" shall mean all compensation paid or payable by reason of a Taking, whether pursuant to a judgment, agreement or otherwise. 33 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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11.3 Intended Taking; Negotiation.
a) Each of Landlord and Tenant shall promptly give written notice to the other upon learning that any person, entity or authority has commenced condemnation proceedings with respect to the Premises or any portion thereof or any interest therein, or has threatened or indicated an intention to commence such proceedings. b) Landlord, Tenant, Senior Mortgagee and each Mortgagee shall each have the right to represent its respective interests in each proceeding and negotiation with respect to any Taking or threatened. or intended Taking and to make proof of their claims. No agreements or settlements with, or transfers to, any condemning authority shall be made without the prior written consent of Tenant, Landlord, Senior Mortgagee and all Mortgagees. Each party shall bear its own attorneys' fees and expenses in connection with such proceedings and negotiations.
11.4 Partial Taking; Continuation of Lease; Award.
a) In the event of Partial Taking, this Lease shall remain in effect as to the portion of the Premises_ not taken, except that the Base Rent otherwise payable hereunder shall be reduced in the same ratio, as the .value of the portion of the premises taken bears to the value of the total Premises immediately prior to such Partial Taking. Promptly after any Partial Taking and regardless of the amount of the Award, Tenant shall, at its sole cost and expense and in the manner specified in the provisions of this Lease, restore and repair (and, if necessary, reconfigure) any remaining affected Improvements so that the Premises may continue to be operated as a usable whole for the purposes for which they were leased. b) In the event of a Partial Taking, subject to the rights of Senior Mortgagee and any Mortgagee, any Award payable to Landlord and/or Tenant shall be payable as follows:
i) First, to the payment of any Taxes, Assessments and other impositions constituting a lien on the portion ofthe Premises taken; ii) Second, to pay the costs ofrepairing, restoring or reconfiguring the Premises after the Partial Taking in order to restore it to an operable whole; and iii) The balance of the Award shall be divided between Landlord and Tenant based on the following:
A) Tenant shall receive an amount .equal to the fair market value ofthe portion of Tenant'sInterest which has been taken; and B) Landlord shall receive an amount .equal to the balance of the Award.
c) If the Landlord and Tenant are. unable. to .agree upon the fair market value of Tenant'sInterest, fair market value of Tenant'sInterest shall be determined by appraisal in accordance with the following procedures:
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If, at any time after the commencement of good faith negotiations to agree upon the fair market value of Tenant'sInterest, either Landlord or Tenant concludes that such negotiations will not be successful, such party shall give written notice (an "Appraisal Notice") to the other party of its election to determine such fair market value by appraisal. Landlord and Tenant shall then attempt to agree upon a single independent appraiser to make such determination. Such appraiser shall be a member of the American Institute of Real Estate Appraisers, or of another recognized professional association of real estate .appraisers which has adopted rules and regulations requiring independent appraisals of its members without bias to any party or any results, and shall have no less than ten (10) years of experience appraising commercial properties located in Southern California (a "Qualified Appraiser"). If Landlord and Tenant are unable to agree upon a Qualified Appraiser within thirty (30) calendar days after receipt of the Appraisal Notice, Landlord and Tenant shall .each .select a Qualified Appraiser within ten (10) calendar days after expiration of such thirty (30) day period and both such Qualified Appraisers shall select a third neutral Qualified Appraiser within ten (10) calendar days after the date on which the second Qualified Appraiser is appointed. If the two Qualified Appraisers selected by the parties cannot agree upon a third Qualified Appraiser within such ten (10) calendar day period, either party shall have the right to apply to the Presiding Judge of the Superior Court for Los Angeles County, California, to select the third Qualified Appraiser. Each of the three (3) Qualified Appraisers shall appraise the fair market value of Tenant's Interest within forty-five 45) calendar days after the selection of the third Qualified Appraiser. The fair market value of Tenant'sInterest shall be conclusively determined for all purposes by taking the average of the two appraisals which are closest in amount and by disregarding the third appraisal, unless the highest and the lowest appraisals are equidistant from the middle appraisal, in which case the middle appraisal shall be deemed to be the_fair market. value of Tenant'sInterest.. Each party shall pay the fees and expenses of the appraiser selected by such party, and the parties shall share equally the fees and expenses of third appraiser. In connection with valuation of the Tenant's Interest which has been taken, the Qualified Appraiser(s) shall consider and account for all of the following: (aa) any excess of the present value at the Taking Date of the fair rental value of the Leased Premises, exclusive of Tenant's Improvements or alterations for which. Tenant is_ compensated under clause (bb) below, for the remainder of the. Term (i.e., the so-called "bonus value"), over the present value at the Taking Date of the rent payable for the remainder of the Term; and (bb) the value at the Taking Date of its interest for the balance of the Term in all Improvements or alterations made to the Leased Premises by Tenant; and (cc) the portion of the Award, if any, allocated to relocation and removal costs, of Tenant, if any; and (dd) the portion of the Award, if any, attributable to loss of goodwill or lost profits or damages because of detriment to Tenant'sbusiness, if any. If no portion of the Award is attributable to the items .contained in clauses (cc) and (dd) above, Tenant shall have the absolute right (i) to pursue Tenant's own claim for such damages as permitted by law and (ii) to receive and keep all such proceeds free from any claim of Landlord.
11.5 Total Taking.
a) In the event of a Total Taking, this Lease shall terminate. as of the date of the Taking or, if later, the date of Tenant'selection pursuant to Section 11. b) 6(below; provided, however, that such termination shall -not prevent Tenant from making all claims against the condemning authority as though this Lease had not terminated, and Tenant shall have the same 35 416475.14 001207.0007 4/ 2008 - 15/ 10139 AM
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rights against such condemning authority as though this Lease had not been terminated. All Rents and other amounts payable hereunder shall be prorated to the date of termination. b) In the event of a Total Taking, any Award shall be payable as follows:
i) First, to the payment of any Taxes and Assessments constituting a lien on the Premises;
ii) Second, to the repayment ofthe Senior Loan; and
iii) The balance of the Award shall be divided between Landlord and Tenant based on the following:
A) Tenant shall receive an amount equal to the fair market value of Tenant'sInterest, as determined according to the procedures set forth in Section 11. c)4( above; and
B) Landlord shall receive an amount equal to the balance of the Award.
11.6 Tenant'sElections.
a) If a Partial Taking occurs and the cost to repair, restore and/or reconfigure the Improvements would, in Tenant's reasonable judgment, exceed One Million Dollars 1, 000), 00,Tenant may, by written notice to Landlord within ninety (90) calendar days after such Taking, elect to treat such Taking as a Total Taking. b) In the event that less than the entire Premises is taken, but the remainder is, in the Tenant's reasonable judgment, commercially unsuitable for Tenant's continued use, Tenant may, by written notice to landlord within ninety (90) calendar days after such Taking, elect to treat such Taking as a Total Taking.
c) If Tenant elects to treat any Taking as a Total Taking pursuant to this Section 11.6, then, Tenant shall, at its sole cost and expense, if and as directed by Landlord, demolish and remove all Improvements, Fixtures and Tenant's personal property (or portion thereof as directed by Landlord) from the leased land.
11.7 Award Pending Disbursement; Arbitration.
a) Until final determination of .the parties' respective entitlements to any Award hereunder, such Award shall be held in trust by a California or federally chartered bank or trust company in California designated by Landlord, subject to approval by Senior Mortgagee and all Mortgagees and Tenant, having a combined capital and surplus of not less than One Hundred Million Dollars ($100, 00) 00,as of the date of its most recent financial statement..
When the final determination of the respective entitlements. of all parties claiming an interest in such Award has been determined, such amounts, together with all .interest earned .thereon from 36 416475.14 001207.0007 4/ 2008 -. 15/10:39 AM
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the date of deposit with such trustee, and less any costs and charges, shall be paid by such trustee to the person or persons entitled thereto.
b) Any disputes arising under this Article 11 shall be resolved by arbitration under Section 17.4.
11.7 Taking for Temnorary Use. If there is a Taking of the Premises for temporary use for a period equal to or less 'than one (1) year, this Lease shall continue in full force and effect, Tenant shall continue to comply with Tenant's obligations under this Lease, neither the Term nor the Rent shall be reduced or affected in any way, but shall continue at the level of the last annual rental (regardless of whether computed on a fixed or percentage basis) paid prior to the Taking (including any subsequent increases in such annual rental provided for under this Lease), and Tenant shall be entitled to any Award for the use or estate taken. If any such Taking is for a period extending beyond such one (1) year period, the Taking shall be treated under the foregoing provisions for Total and Partial Takings, as appropriate.
11.8 Waiver of Code of Civil Procedure Section 1265.130. Each party waives the provision of Code of Civil Procedure Section _1265.130 allowing either party to petition the Superior Court to terminate the Lease in the event of a Partial .Taking of the Premises. The rights of the parties in the event of a Partial Taking shall be governed by the terms of this Lease set forth above.
ARTICLE 12
TENANT'SBREACH; LANDLORD'SREMEDIES
12.1 Tenant'sBreach.
a) The occurrence of any of the following events shall be considered an Uncured Default hereunder and a breach. of this Lease by Tenant. i) The failure of Tenant to pay Rent or any other charges or payments due hereunder, which failure continues for ten (10) calendar days after written notice thereof by Landlord to Tenant;
ii) The failure of Tenant to observe or perform any of its other covenants or obligations hereunder which can be cured, which failure continues for thirty (30) calendar days after written notice thereof by Landlord to Tenant; provided, however, that if the nature of such covenants or obligations is such that more than thirty (30) calendar days are required to effect a cure, then Tenant shall not be deemed to be in breach of this Lease if it shall commence such cure within such thirty (30} day period and shall thereafter diligently pursue such cure to completion as quickly as reasonably possible; iii) The occurrence of any of the following events: (i) the making by Tenant of any general arrangement or assignment for the benefit of creditors; (ii) Tenant's becoming a "debtor" as defined in l l U. C. § S101 or any successor statute thereto (unless, in the case of a petition filed against Tenant, the same is dismissed within ninety (90) calendar days); 37 416475.]4 001207.0007 4/ 2008 - 15/10:39 AM
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iii) the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) calendar days; or (iv) the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's, Interest in this Lease, where such seizure is not discharged within thirty (30) calendar days; provided, however, in the event that any provision of this subparagraph (a)(iii) is contrary to any applicable law, such provision shall be of no force or effect, and shall not affect the validity of the remaining provisions; and
b) Notwithstanding anything in this Lease to the contrary, if, within thirty 30) calendar days of Tenant's receipt of a notice of Default with respect to anon-monetary breach by Tenant, Tenant notifies Landlord in writing that it disputes the existence of such nonmonetary Default and that it requests a determination of the. existence or non-existence of such non-monetary Default by an arbitration conducted in accordance with Section 17.4, then Landlord may not exercise. its right to terminate this Lease pursuant to the terms hereof on account of such non-monetary Default of Tenant until the expiration of the applicable cure period (with no cure having been effected) measured as if such cure period commenced upon the date of the determination by such arbitrator that such non-monetary Default in fact exists. In addition, in the event Tenant contests any claimed monetary Default under this Lease, Tenant shall have the right to pay such amount under protest and to reserve its right to contest and seek recovery of such amount and Tenant shall not be in Default ..under this .Lease because such payment has been made "under protest", or with a reservation ofrights. If any amount paid under protest is thereafter required to be returned to Tenant, Landlord shall also pay to Tenant interest on such amount at the rate of ten percent (10%) per annum from the date such amount was paid by Tenant to Landlord until the date .returned. If Landlord fails to promptly pay to Tenant all amounts determined to be payable to Tenant pursuant to such arbitration proceeding, Tenant shall have the right to offset such amounts against the next Rents payable hereunder.
12.2 Landlord's Remedies. In the event of any Uncured Default of this Lease by Tenant, Landlord, in addition to any other rights or remedies it may have at law, in equity or otherwise, shall have the following rights:
a) Intentionally omitted.
b) Landlord shall have the right to terminate this Lease by giving written notice of termination to Tenant. Upon the giving of such notice, this Lease and Tenant'sInterest shall terminate, and Tenant shall surrender the Premises. to Landlord. .Landlord'stermination. of this Lease for Tenant'sUncured Default shall not relieve.. Tenant from the obligation to pay any sum then due Landlord. or from any claim for damages previously accrued or then accruing. c) Notwithstanding anything in this Lease to the contrary, Landlord and Tenant hereby agree that, in the event of any damage claim against Tenant. arising hereunder, Landlord shall offset against such claim, and Tenant shall have the right to require the offset against such claim, of the value. of Tenant'sinterest in .the Leasehold Estate reverting to Landlord as a result of the ,early termination of this Lease, and Landlord shall not recover any such damages from Tenant except to the extent they exceed the value of said Leasehold Estate. 38 416475.14 001207.0007 4/ 2008 -. 15/10:39 AM CU8-'J6
12.3 Right of Re-Entry. Except as otherwise provided in any nondisturbance agreement executed by Landlord in favor of a subtenant, in the event of any Uncured Default by Tenant, Landlord shall also have the right in accordance with applicable Law at the time, and, with or without termination of this Lease, to re-enter the Premises and remove all property and persons therefrom, and any such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant.
12.4 Lease Not Terminated. Subject to the limitations of Section 12. c) 2(above, if Landlord shall elect to re-enter as above .provided, or shall take possession of the Premises pursuant to legal proceedings or pursuant to any notice or other remedy provided by law or in equity, whether or not the .Lease is terminated, Landlord may either recover all rental as it becomes due or relet the Premises or any part or parts thereof for such term or terms .and .upon such provisions as Landlord, in its sole judgment, may deem advisable, and Landlord shall have the right to make repairs to and alterations to the Premises. No re-entry or taking possession of the Premises by Landlord under this Section shall be construed as an election to terminate this Lease unless a written notice of such termination be given to Tenant or unless the termination thereof be adjudged by a court of competent jurisdiction.
12.5 Right to Cure Tenant's Default. Landlord, at any time after Tenant fails to perform an obligation or covenant required to be performed by it under this Lease, and to cure such failure within any allocable cure period, may, at its sole option, and upon written notice to Tenant (except in the event of an emergency in which case no prior notice shall be required, but notice shall be provided as soon as practicable), cure such failure. If, in effecting such cure, Landlord incurs any cost or expense or pays any sum, or does any act that requires the payment of any sum, then, subject to the limitations of Section 12. c), 2(all sums, expenses and costs so paid or incurred by Landlord shall be due from Tenant to Landlord. immediately upon demand therefor by Landlord, and if paid by Tenant at a later. date, shall bear interest at the rate of ten percent (10%) per annum, or the maximum rate then permitted by law, whichever rate is lower, from the date of any payment by Landlord to the date ofrepayment by Tenant.
12.6 Late Charges; Interest. Tenant hereby acknowledges that late payment by Tenant to Landlord of Rent will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult. to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Landlord by the terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of Rent due from .Tenant shall not be received by Landlord or Landlord'sdesignee within ten (10) calendar days after such amount shall be due, then without any requirement for notice to Tenant, Tenant shall pay to Landlord a late charge equal to four percent (4%) of such overdue amount; provided, that, with respect to the first late payment of Rent during any calendar year, a late charge shall not be payable so long as Tenant pays the Rent due within three 3) business days after written notice from Landlord. to Tenant of the. amount due. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant. Acceptance of such late. charge by Landlord shall in no event constitute a waiver of Tenant'sbreach with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder. Unless otherwise stated in this Lease, in addition to any late charges provided above, any amounts payable by one party to another hereunder which. remain overdue beyond a period of ten (10) 39 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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calendar days shall bear interest at the rate of ten percent (10%) per annum, or the maximum rate then permitted by law, whichever rate is lower, from the expiration of such ten (10) day period until the date such payment is made.
12.7 Remedies Not Exclusive. Subject to the limitations of Section 12. c) 2(above, the several rights and remedies granted to Landlord herein shall be cumulative and in addition to any other remedies to which Landlord may be entitled at law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of any other rights or remedies Landlord may have, and shall not be deemed a waiver of any of Landlord'srights or remedies, or an election of remedies, or to be a release of Tenant from any of Tenant'sobligations, unless such waiver, election or release is expressed in writing and signed by Landlord.
ARTICLE 13
LANDLORD'SDEFAULT; TENANT'SREMEDIES
13.1 Landlord'sDefault. Landlord shall be in breach of this Lease if it has failed to perform any obligation or covenant to be performed by it hereunder within thirty (30) calendar days after written notice by Tenant to Landlord specifying the nature of Landlord'sfailure; provided, however, that if the nature of the obligation is such that more than thirty (30) calendar days are required for its performance, then Landlord shall not be .deemed. to .have committed an Uncured Default if it shall commence such performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion within sixty (90) calendar days.
13.2 Tenant's Remedies. Tenant shall be entitled, upon any .Default by Landlord, hereunder to any and all rights and remedies available to it at law and in equity; provided, however, that Tenant may not terminate this ,Lease for Landlord's breach. without the written consent of each and every lender who has been granted a security interest in either Landlord's Interest or Tenant'sInterest or both. All rights and remedies of Tenant shall be cumulative.
13.3 Delays in Performance. The time within which the Parties hereto. shall be required to perform any act under this Lease which cannot be discharged solely by the payment of money shall be extended by a period of time equal to the number of days during which performance of such act is delayed due to an act of God, fire, earthquake, flood, explosion, war, terrorism, invasion, insurrection, riot, mob violence, acts of the public enemy, epidemics, quarantine restrictions, or other events which are beyond a party's reasonable control '(the foregoing events are referred to herein as "Force Majeure" events). The additional grace period or extension of time provided above shall be equal to the period of delay caused by the abovedescribed event, which period shall commence to run from the time of the commencement of the cause for delay and shall terminate upon termination of that cause; provided that, as set forth in Sections 2.1 and 2.10. above, the extensions due to Force Majeure events under those provisions shall not exceed two (2) years.
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ARTICLE 14
LIENS AND ENCUMBRANCES
Tenant shall not, and shall have no right to, encumber Landlord'sInterest, and Tenant covenants to keep Landlord's Interest at all times free and clear of any and all liens and encumbrances of any kind whatsoever arising out of Tenant'sperformance of this Lease. Except as otherwise specifically provided in this Lease, should Tenant fail to discharge or cause to be discharged any claim of lien affecting, or purporting to affect, Landlord'sInterest, within thirty 30) calendar days after service on Tenant, then, on written notice from Landlord, Landlord may pay, adjust, compromise and discharge any such lien or claim of lien on such terms and. manner as Landlord may reasonably deem appropriate. In such. event, Tenant shall immediately reimburse Landlord for. the full amount paid by Landlord in connection with such lien or claim of lien, including any attorneys' fees or costs, or other. costs expended by Landlord, together with interest at the rate of ten percent (10%) per annum, or the maximum rate permitted by law, whichever rate is lower, from the date of payment by Landlord to date of repayment by Tenant.
Notwithstanding the preceding sentences, Tenant may contest any and all such liens and encumbrances, provided that Tenant shall first deposit with Landlord a bond or other security, in form and amount reasonably acceptable to Landlord, to secure the payment and removal of any such lien or encumbrance (plus any fees, interests and penalties).
ARTICLE 15
HYPOTHECATION
15.1 Lease as Security. Tenant shall have the right, subject to the prior written consent of Landlord, which consent shall not be unreasonably withheld or conditioned, to subject all or any part of Tenant'sInterest to any deed of trust or mortgage. In the event of any dispute between Landlord and Tenant concerning whether such consent has been unreasonably withheld or conditioned, such dispute shall be resolved by an arbitration proceeding in accordance with Section 17.4 below. Landlord shall have ten (10) business days to respond to Tenant'srequest for approval of any financing. Any disapproval shall be accompanied by a reasonable detailed description of the reasons therefor. If Landlord fails to approve or disapprove (with explanation) the proposed financing within such ten (10) business .day period, Tenant may deliver a second written notice requesting such approval, and if Landlord fails to approve or disapprove (with explanation) such financing within five (5) business days thereafter, such financing shall be deemed approved; provided that, if Landlord deems it necessary to meet with the City Council with respect to approval of any proposed financing and if the fifteen (15) business day period described above (10 days initial notice, 5 day additional notice) did not allow the opportunity to Landlord to do so because of the absence of any Council meeting within that period, then Landlord shall have up to fifteen (15) additional calendar days to schedule such matter for review by the City Council. Notwithstanding anything herein to the contrary, Landlord shall approve and consent to a proposed leasehold .mortgage meeting all of the following requirements: (i) such leasehold mortgage encumbers only the Tenant'sInterest in the Premises and is not a lien upon the Landlord'sfee interest in the Property; (ii) the leasehold mortgage is being made by a state or federal bank, savings and loan, pension fund, life insurance company or other like institutional lender; (iii) the loan to value ratio of such leasehold. mortgage does not exceed eighty percent (80%) of the value of the Premises; and (iv) the leasehold mortgage does 41 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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not permit or authorize the lender to devote the Leasehold. Estate to any uses, or to construct any improvements thereon, other than those uses and improvements permitted by this Lease.
15.2 Loan Obligations. Nothing contained in this Lease shall relieve Tenant of its obligations and responsibilities to any Mortgagee to .operate the Premises as set forth in this Lease.
15.3 Rights of Mortgagees.
a) In the event of any Default under this Lease by Tenant, written notice to that effect shall be sent by Landlord to each Mortgagee, and no termination of this Lease, or of Tenant'sright to possession of the Premises or any reletting of the Premises by Landlord shall be effective unless Landlord gives to each Mortgagee written notice, or a copy of its notice to Tenant, of such Default and further notice of termination at the time of service of each of such notices upon Tenant. Any notice of termination between Landlord and such Mortgagee shall be mailed by certified or registered mail, postage prepaid, return receipt requested. b) In the event of any Default by Tenant under any of the provisions of this Lease, such Mortgagee will have the same grace period as is given Tenant for remedying such Default or causing it to be remedied, if any, plus, (i} in the case of a monetary Default, an additional period of thirty (30) calendar days after the expiration thereof, and (ii) in the case of a nonmonetary Default, an additional period as described in Section 15. d) 3(below, but not, in any event, less than sixty (60) calendar days after the expiration thereof. c) In the event Tenant breaches any of the provisions of this Lease, irrespective of whether the same consists of a failure to pay Rent or a failure to do any other thing which Tenant is required to do hereunder, such Mortgagee without prejudice to any of its rights against Tenant, shall have the right to cure such Default hereunder within the applicable grace period provided for in the preceding subparagraph (b), and Landlord shall accept such performance on the part of such Mortgagee as though the. same had been performed by Tenant; and for such purpose Landlord and Tenant hereby authorize such Mortgagee to enter upon the Premises and to exercise any of Tenant'srights and powers under this Lease that are reasonably required to cure such Default.
d) The term "Incurable Default" as used herein means a Default which cannot reasonably be cured by a Mortgagee by the payment of money or within the time period allowed for the cure of such Default. The term "Curable Default" means. any Default under this Lease which is not an Incurable Default. In the event of any Curable Default by Tenant under any of the provisions of this Lease and if prior to the expiration of the applicable grace period applicable to such Mortgagee under Section 15. b) 3(above, such Mortgagee shall give Landlord written notice that it intends to undertake the ,curing of such Default, or to cause the same to be cured, or to exercise its right to acquire the Tenant's Interest by foreclosure or otherwise, and such Mortgagee shall thereafter promptly commence and then proceed with all due diligence to do so, whether by performance on behalf of Tenant of its obligations under this. Lease or by entry on the Premises by foreclosure or otherwise, then Landlord will not terminate or take any action to effect. a termination of .this Lease or reenter, take possession of or relet the Premises. or otherwise enforce performance of this Lease so long as such Mortgagee is with all due diligence and in good faith engaged in effecting such foreclosure or in curing such Curable Default. So long as any Curable Defaults are cured by such Mortgagee and Tenant or the Mortgagee 42 416475.14 001207.0007 4/ 2008 -, 15/10;39 AM
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continues to fulfill any obligations of Tenant thereafter arising hereunder within the time periods provided to Tenant hereunder, provided that such Mortgagee shall not be required to cure or commence to cure any lien, charge or encumbrance against Tenant'sInterest which is junior in priority to lien of the Mortgage, then such Mortgagee shall not be required to continue such possession or continue such foreclosure proceedings after such Default is cured and this Lease shall thereupon continue in full force and effect as though Tenant had not Defaulted. In the event the nature of any Curable Default is such that such Mortgagee must take possession of the Premises in order to cure such Default, the running of all applicable grace periods shall be tolled so long as such Mortgagee is diligently attempting to obtain such possession. Nothing herein shall preclude Landlord from terminating this Lease with respect to any additional Default which may occur during the aforesaid period of forbearance and is not remedied within the period of grace, if any, applicable to any such additional Default, except that such Mortgagee shall have the same rights specified in this paragraph .with respect to any such additional Defaults.
Notwithstanding anything herein to the contrary, (i) a Mortgagee shall not be obligated to pursue the cure of any Curable Default which is non-monetary in nature until it has obtained possession of the Premises, and (ii) nothing herein shall require a Mortgagee who has acquired Tenant's Leasehold Estate and has taken possession of the Premises to cure any Incurable Default, and such Incurable Default shall be deemed to be waived following Mortgagee's acquisition of Tenant'sLeasehold Estate and such Mortgagee'scure of all Curable Defaults. e) In the event of termination of this Lease by reason of either an Incurable Default or a Curable Default or in the event Tenant's Interest shall be sold, assigned or transferred pursuant to the exercise of any remedy of a Mortgagee, or pursuant to judicial proceedings, or in the event of the rejection of this Lease by Tenant or any trustee under Section 365 ofthe Bankruptcy Code or any similar section and in the event that within thirty (30) calendar days after Landlord'snotification to Mortgagee of the occurrence of such event such Mortgagee shall have cured, or arranged to the reasonable .satisfaction of Landlord to cure any Curable Default. of Tenant under this Lease which is monetary in nature, then Landlord, within thirty (30) calendar days after receiving a written request therefore from such Mortgagee, which shall be given by Mortgagee within the thirty (30) day cure period set forth above applicable to cure of monetary Defaults by Mortgagee, and upon payment to Landlord of all expenses, including reasonable attorneys' fees, incident to such new lease (less the net income collected by Landlord from the date of termination to the date of commencement. of the term of the new lease), will execute and deliver to such Mortgagee or its nominee or to the purchaser, assignee or transferee, as the case may be, a new lease of the Premises. Such new lease shall be for a term equal to the remainder of the term of this Lease .before giving effect to such termination, shall contain the same covenants, agreements, provisions, conditions and limitations as this Lease, shall be superior to all rights, liens and interest intervening between the date ofthis Lease and the date of such new lease, and shall be free of any and all rights of Tenant under this Lease. Upon the execution and delivery of such new lease, the new tenant, in its own name or in the name of Landlord, may take all appropriate steps as may be necessary to remove Tenant from the Premises, but Landlord shall not be subject to any liability for the payment of any fees (including attorneys' fees), costs or expenses in connection therewith. The new tenant shall pay all such fees, including reasonable attorneys' fees, costs and expenses or, on demand, make reimbursement therefore to Landlord. It is the, intention of the parties hereto that such new lease shall have the same priority relative to other rights or interests to or in the Premises as this Lease, and Landlord covenants to discharge or cause to be subordinated to such new lease any lien or 43 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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encumbrance which was. subject to this Lease at the time of such termination. If more than one Mortgagee shall make written request upon Landlord for a new lease in accordance with the provisions of this Section 15. e), 3(then such new lease shall be entered into pursuant to the request of the Mortgagee whose Mortgage shall be junior in lien provided: (a) all Mortgagees senior in lien shall have been paid all installments of interest and amortization of principal then due and owing to such Mortgagees plus all expenses, including reasonable attorneys' fees, incurred by such senior Mortgagees in connection with the termination ofthis Lease and with the execution and delivery of such new lease; (b) the new lessee will assume, in writing, all of the covenants, agreements and obligations on the part of the mortgagor under such senior Mortgages to be kept, observed and performed on the part of such mortgagor; (c) such new lease shall contain all of the same provisions and rights in favor of and for the benefit of Mortgagees holding leasehold mortgages thereon as are contained in this Lease, including but not limited to the right to obtain a new lease in the event of the termination of said lease, and the right to receive notices of Default, and to cure the same, in the same manner as provided in this Lease; and (d) the senior Mortgagees shall have received from the respective title insurance companies insuring the respective senior Mortgages assurances satisfactory to such senior Mortgagees that said senior Mortgages and any assignment of rents and other security instruments executed in connection therewith will continue, with respect to such new lease, in the same manner and order of priority of lien as was in existence with respect to this Lease; and thereupon the leasehold estate of the new lessee created by such new lease shall be subject to the lien of the senior Mortgages in the same manner and order of priority of lien as was in existence with respect to this Lease. In the event not all of the foregoing provisos shall have been satisfied by or with respect to any such junior Mortgagee, the Mortgagee immediately senior in lien to such junior Mortgage shall have paramount rights to the benefits set forth in Section 15. e) 3(above, subject nevertheless to the .provisions hereof respecting the senior Mortgagees, if any. In the event of any dispute as to the respective senior and junior priorities of any .such Mortgages, the certification of such priorities by a title company doing business in California, satisfactory to Landlord, shall be conclusively binding on all parties concerned. Should there be a dispute among Mortgagees as to compliance with the foregoing provisions, Landlord may rely on the affidavit of the most senior Mortgagee as to compliance by any junior Mortgagee. Landlord's obligation to enter into a new lease with .any junior Mortgagee shall be subject to the receipt by Landlord of evidence reasonably satisfactory to it that the conditions of (a), ( b) and (d) above have been satisfied with respect to each senior Mortgagee. The right of a senior Mortgagee under this Section 15. e) 3(to request a new lease may, notwithstanding any limitation of time set forth in this Lease, be exercised by the senior Mortgagee within twenty (20) calendar days following the failure of the junior Mortgagee to have exercised such right within the time provided by this Section, and, if a
junior Mortgagee shall fail or refuse to exercise the rights set forth in this Section, said senior Mortgagees, in the inverse order of the seniority of their respective liens, shall have the right to exercise such rights subject to the provisions of this Lease.
f) In the event a breach under the.. Mortgage executed by Tenant for the benefit of such Mortgagee shall have occurred, such Mortgagee may exercise with respect to the Premises any right, power or remedy under said Mortgage which is not in conflict with any of the provisions of this Lease.
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g) There shall be no merger of the Leasehold Estate created under this Lease with the fee estate in the Premises by reason of the fact that the Leasehold Estate may be held directly or indirectly by or for the account of any person who shall also hold the fee estate, or any interest in such fee estate.. nor shall there be_any such merger by reason of the fact that all or any part of the Leasehold Estate may be conveyed or mortgaged to a Mortgagee who shall also hold the fee estate, or any part thereof, or any interest of Landlord or Tenant under this Lease, unless such merger results from a Default by Tenant, where such Mortgagee has been given an opportunity to cure as provided by this Lease above and has failed to do so. h) No acceptance by Landlord of a voluntary surrender of this Lease or any amendment or modification of the terms of this Lease -shall be effective or binding unless the written consent of any Mortgagee is first obtained. The exercise by Landlord of any right of termination pursuant and subject to the terms of this Lease, however, shall not be deemed a voluntary surrender," nor shall anything herein require the Landlord obtain the consent of any Mortgagee before commencing any action or proceeding based upon a Default hereunder by Tenant provided that Landlord shall. have .given all notices required to be given by Landlord hereunder to Tenant and to such Mortgagee and has provided such Mortgagee with the cure rights herein provided.
i) This Lease may be assigned by an assignment in lieu of foreclosure of the Mortgage executed by Tenant for the benefit of .such .Mortgagee or pursuant to a foreclosure sale or sale pursuant to power of sale under said Mortgage and may be further assigned by the assignee or purchaser without the prior written consent of Landlord provided the assignee assumes Tenant'sobligations under this Lease and an executed counterpart of such assumption is delivered to Landlord. Notwithstanding any other provision of this Lease, any bonafide sale of this Lease and of the Leasehold .Estate hereby created in any proceedings for the foreclosure of any Mortgage or a bonafide assignment or transfer of this Lease .and of the .Leasehold Estate hereby created in lieu of foreclosure of a Mortgage shall be deemed to be a permitted sale, transfer or assignment ofthis Lease and of the Leasehold Estate hereby created.
15.4 Personal Liability of Mort~ ee. a~No Mortgagee shall become personally liable for the performance or observance of any covenants or conditions to be performed or observed by Tenant unless and until such .Mortgagee becomes the owner of Tenant's Interest.. upon the exercise of any remedy provided for in the subject Mortgage or until such Mortgagee enters into a new lease with Landlord pursuant to Section 15. e) 3(above. Thereafter, such Mortgagee shall be liable for the performance and observance of such covenants and conditions: only so long as such Mortgagee owns such .interest or is lessee under such new lease.
15.5 Names and Addresses of Mortgagees. Anything in this Article 15 to the contrary notwithstanding, Landlord shall not be obligated to send or deliver any notices or grant any cure rights to any Mortgagee unless the name and address of such Mortgagee has been delivered to Landlord by Tenant or such Mortgagee together with a certificate of an officer of Tenant or such Mortgagee certifying that such Mortgagee is the Mortgagee under a Mortgage on or against the Premises.
15.6 Sublease and Rents.. After termination of this Lease and during the period thereafter during which any Mortgagee is entitled to enter into a new lease. of the Premises, Landlord will not voluntary terminate any Sublease or the rights of the Subtenant, thereunder 45 416475.]4 001207.0007 4/ 2008 - 15/ 10:39 AM
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unless such Subtenant is in default under such Sublease and has failed to cure same within the cure period provided under such Sublease. During such periods Landlord shall be entitled to receive all rent and other payments due from Subtenants, including Subtenants whose attornment it shall have agreed to accept, as agent of such Mortgagee and shall deposit such rents and payments in a separate and segregated account, but may withdraw and pay to Landlord such sums as are accrued or were required to be paid to Landlord under this Lease, at the time and in the amounts due hereunder, and may withdraw and expend such additional amounts as are necessary for the maintenance, operation, and management of the Premises in accordance with the requirements of this Lease ( including reimbursement of Landlord's reasonable costs associated with collection of rents from Subtenants); and, upon the execution and delivery of such new lease, Landlord shall account to the lessee under the said. new lease for the balance, if any (after application as aforesaid), of the rent and other payments made under .said Subleases.
The collection of rent by Landlord acting as an agent pursuant to this Section shall` not be deemed an acceptance by Landlord for its own account ofthe attornment ofany Subtenant unless Landlord shall have agreed in writing with such Subtenant that its tenancy shall be continued following the expiration of any period during which a Mortgagee may be granted a new lease, in which case such attornment shall take place upon such expiration but not before.. If the Mortgagee fails to exercise its right to enter into a new lease or fails to timely execute such new lease, all rents collected by Landlord on behalf of such Mortgagee shall inure to the benefit ofthe Landlord and such Mortgagee shall have no further rights with respect thereto.
15.7 Arbitration and Legal Proceeding. Landlord shall give each Mortgagee who has given written notice of its interest in the Leasehold Estate to Landlord prompt notice of any arbitration (pursuant to Section 17.4) or other legal proceedings between Landlord and Tenant involving obligations under this Lease. Such notice shall be sent to the, address provided by such Mortgagee in conjunction with any prior notice of interest delivered to Landlord .under .this Section 15.7. Each said Mortgagee shall have the right to intervene in any such proceeding to protect its interest and be made a party thereto, and the parties hereto do hereby consent to such intervention. In the event that any such Mortgagee shall not elect to intervene or become a party to any such proceedings, Landlord shall give such Mortgagee notice of, and a copy of, any award or decision .made in any such proceedings, which shall be binding on all Mortgagees not intervening after receipt of notice of the arbitration or other legal proceeding.
15.8 Amendment. If, in connection with securing by Tenant of any Mortgage, the affected Mortgagee requests an amendment or modification of the. terms of .this. Lease or the...
Mortgagee'slender protection rights set forth herein, Landlord agrees to reasonably consider its consent to any such proposed amendment or modifcation..
ARTICLE 16
RESERVED]
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ARTICLE 17
GENERAL PROVISIONS
17.1 Estoaael Certificates. Each party shall, without charge, at any time and from time to time, upon written request of the other party, deliver a written instrument, duly executed and acknowledged, ifrequested), certifying to the requesting party, or any other person, firm or corporation reasonably specified by the requesting party:
a) That this Lease is unmodified and in full force and effect, or if there has been any modification, that this Lease is in full force and effect as so modified, and identifying any such modification;
b) Whether or not to the knowledge of the certifying party there are then existing any offsets or defenses in favor. of the certifying party against the enforcement of any of the terms, covenants and conditions of this ..Lease .and, if so, specifying the same, and also whether or not to the knowledge of the certifying party, the requesting party has observed and performed all of the terms, covenants and conditions on its part to be observed and performed, and, if not, specifying the same;
c) The dates to which .Base Rent, Additional Rent, and all other payments and charges hereunder have been paid; and
d) Any other matter, reasonably related to this Lease and the contractual relationship between Landlord and Tenant, that is reasonably requested by the requesting party.
17.2 Landlord'sRight of Entry. Subject to the rights of Subtenants, Landlord and its agents shall have the right at reasonable times and upon not less than one (l) business day's notice:
a) During .the .last twelve (12) months of the Term, to display the Premises.
If Tenant vacates the Premises prior to the expiration of the Term, Landlord may from and after Tenant'svacation decorate, remodel, repair, alter and improve or otherwise prepare the Premises for reoccupancy.
b) To inspect the Premises in order to determine .whether to ,approve proposed construction or demolition.
c) To enter the Premises to determine. whether Tenant has complied or is complying with its obligations hereunder if a physical inspection is reasonably necessary to determine such compliance.
17.3 Waiver. No waiver by either party hereto of any breach by the other party of any covenant or condition. herein contained shall be effective„unless. such waiver is in writing, signed by the non-breaching party and delivered to the breaching party. The waiver by the nonbreaching party of any such breach or breaches, or the failure by the non-breaching party to exercise any right or remedy in respect of any such breach or breaches, shall not constitute a waiver or relinquishment for the .future. of .any such covenant or condition or of any subsequent breach of any such covenant or condition nor bar any right or remedy of the non-breaching party in respect of any such subsequent breach.
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17.4 Arbitration. All. disputes arising under or related to this Lease, including, but not limited to, all alleged breaches or Defaults, other than those disputes relating directly or indirectly to the payment of Rent hereunder, shall be submitted to arbitration as follows:
a) Either party to a dispute may elect to submit the matter to arbitration by delivering written notice of such election to the other party. Such arbitration shall be conducted in accordance with the arbitration rules of the Judicial Arbitration and Mediation Service JAMS").
b) Within ten (10) calendar days after receipt of the notice provided for above, the parties shall attempt to agree upon an arbitrator who shall decide the matter. If, for any reason, the parties are unable to agree upon the arbitrator within said ten (10) day period, then either may request JAMS to appoint such arbitrator. Unless the parties otherwise agree, the arbitrator shall be a retired judge of the courts of California or any federal court located within the State.
c) The arbitrator so appointed shall promptly fix a convenient time and place in the County of Los Angeles for hearing the matter to be arbitrated and shall give written notice thereof to Landlord and ,.Tenant at least five (5) calendar days prior to the date so fixed. Said arbitrator shall with reasonable diligence determine the matter to be arbitrated in accordance with the provisions hereof and of the statutes and judicial decisions of the State of California at the time applicable thereto, and shall execute and acknowledge its determination thereon in writing and cause a copy thereof to be delivered to Landlord and .Tenant, d) The determination of said arbitrator shall determine the matter to be arbitrated, which determination shall be final and .binding on both parties in the same manner as an award rendered under the .California Code of Civil Procedure, § 1280 et seq. Ifthe arbitrator shall fail to reach a decision in the determination of ,the matter. arbitrated, the same shall be decided by a new arbitrator, who shall be appointed and shall proceed in the same manner as hereinabove set forth, and said process shall be repeated until a decision is finally reached by the arbitrator selected.
e) If any party fails to appear or present any documents or arguments, that party shall be deemed to have waived any right to be heard or to present any documents or arguments and shall be deemed to .have consented to , be bound. by any determination rendered.
The fees and costs ofthe arbitrator shall be divided equally between the parties. fj A copy of any notice of election delivered by either. party pursuant to Section 17. a) 4(above shall also be delivered to each Mortgagee. In addition, each Mortgagee shall be entitled to participate in any arbitration proceeding conducted pursuant to this Section 17.4. Such participation shall be at such Mortgagee'ssole cost and expense and shall be preceded by the delivery to Landlord and Tenant of a written. notice from such Mortgagee regarding its intent to participate.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE
AGREEING TO HAVE ANY DISPUTE ARISING.. OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION.. AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS. TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE 48 416475.14 001207.0007 4/] 5/2008 - 10:39 AM
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s+
BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY. AND
APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER .AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE. AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THI5 ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE
TO SUBMIT DISPUTES ARISING OUT OF THE .MATTERS INCLUDED IN THE ARBITRATION OF DIS ES" PROVISION TO NEUTRAL ARBITRATION.
Lan ' nitials Tenant'sInitials
17.5 ( Reserved]
17.6 Notices. Wherever in this Lease one party to this Lease is required or permitted to give or serve a notice, request or demand to or on the other, such notice, request or demand shall be given or served upon the party to whom it is directed in writing and shall be delivered personally or forwarded by registered or certified mail, postage prepaid, return receipt requested, or delivered by Federal Express, Express Mail, or another overnight delivery service, or sent by facsimile or electronic mail, provided that any notice sent by facsimile or electronic mail shall also be sent by one of the other modes of permissible delivery initiated not more than one (1) business day after such transmission by facsimile or electronic mail, addressed as follows:
If to Landlord: City of Redondo Beach
415 Diamond Street
Redondo Beach California 90277
Attn: Assistant City Manager
Facsimile: (310) 379-9268
If to Tenant: Robert Dale Resnick, as Trustee for the RDR Living Trust of 1996 c/o RDR Properties
1545 Sawtelle Blvd., Suite 21
Los Angeles, California 90025
Facsimile: (310) 459-4497
With a
copy to: Brown Winfield Canzoneri Abram Inc.
300 South Grand Avenue, Suite 1400
Los Angeles, California 90071-3124
Attn: Dennis S. Roy, Esq.
Facsimile: (213) 687-2149
Either party may change its address for notice by written notice given to the other in the manner hereinabove provided. Any such notice, request or demand shall be deemed to have been duly 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
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given or received on (i) the date of service if served personally on the Party to whom notice is to be given, (ii) the date of actual or .attempted delivery provided such attempted delivery is made on a business day, if sent by Federal Express, Express Mail or another like overnight delivery service, (iii) the date of delivery, if sent by fax or electronic mail; provided that, if such fax. or electronic transmission. is sent on a weekend or after 5:00 p.m. on a business day, then it shall be deemed sent on the next business day, and provided that any notice sent by fax or electronic mail shall also be sent by one of the other modes of permissible delivery, which alternate method of delivery shall be initiated not more than one (1) business day after such transmission by fax or electronic mail, or (iv) the date of actual delivery (or refusal) as shown by the addressee's registry or certification of receipt, if mailed to the person to whom notice is to be given, by first class U.S. mail, registered or certified, postage prepaid, return receipt requested and properly addressed as shown above. (or to such other address as either Party may from time to time direct by written notice given in the manner herein prescribed).
17.7 Partial Invalidity; Construction.. If any term or provision of this Lease or the application thereof to any person or circumstance shall to any extent be held fo be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it_has been held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law. This Lease shall be governed by and construed under the laws of the State of California. When required by the context of this Lease, the singular shall include the plural, and the neuter shall include the masculine and feminine. Except as otherwise expressly provided herein, whenever the consent or approval of a party is required by the terms of this Lease to any proposed action or event, such consent or approval shall not be unreasonably withheld, conditioned or delayed. Except as otherwise expressly provided herein, all references to days shall mean calendar days. Where this Lease refers to business days, it shall mean all days except Saturday, Sunday and state and national holidays.
17.8 Cautions. The captions and headings in this Lease are inserted only as matter of convenience .and for reference, and they in no way define, limit or describe the scope of this Lease or the intent of any provision hereof.
17.9 Short Form Lease.. Concurrently with the execution and delivery of this Lease, Landlord and Tenant shall join in the execution and delivery of a short form memorandum of this Lease in the form attached as Exhibit "G", and shall record such memorandum in .the Official Records of Los Angeles County, California forthwith. The parties further agree, however, that the terms, covenants and conditions of .this Lease shall.. govern and control over any such memorandum.
17.10 Brokers' Commissions. Each party represents to the other that it is not obligated to any broker, finder or other real estate or financing agent in connection with the. subject matter of this Lease or any of the transactions contemplated hereby. Each party hereto agrees to defend, indemnify and hold harmless the other party hereto from any claim, suit, liability or demand made upon the other party by any person, firm or corporation for brokerage or finder's fees or commissions or other similar compensation with respect to such transactions, or with respect to any lease or sublease for space in or on the Premises, resulting from (or allegedly resulting from) the actions of the indemnifying party.
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17.11 Attorneys' .Fees. In the event of any litigation or arbitration regarding this Lease, the losing party shall pay to the prevailing party its costs of litigation or arbitration including, without limitation, reasonable attorneys' fees.
17.12 Counterparts. This Lease may be executed in two or more counterparts, each of which may be deemed an original, but all of which together shall constitute one and the same instrument.
17.13 Sole Agreement. This Lease contains all. of the agreements of the parties hereto with respect to Tenant'stenancy of the Premises, and all matters relating to such tenancy, and no prior agreements, oral or written, or understandings or representations of any nature whatsoever pertaining to any such matters shall be effective for any purpose.
17.14 Successors .and Assigns. This Lease and all of its provisions and attached Exhibits shall inure to the benefit of, and shall be binding upon, Landlord, Tenant and their respective permitted successors and permitted assigns. This Lease supersedes the Existing Lease and is the sole agreement of the parties with respect to the subject matter hereof from and after the Lease Commencement Date; provided, that any dispute arising as to events, circumstances, obligations, or rights occurring or existing prior to the Lease Commencement Date shall continue to be governed by the Existing Lease in effect at the time of such events or circumstances.
17.15 Time is of the Essence.. Time is of the essence with respect to the performance and observance of each of the obligations, covenants and agreements of the parties under this Lease.
17.16 Survival of Covenants: Except with respect to those conditions, covenants and agreements of this Lease which by their express terms are applicable only to, or-which by their nature could only be applicable after, a certain date or time during the Term hereof, all of the conditions, covenants and agreements of this Lease shall be deemed. to be ,effective.. as of the ,date of this Lease. Any obligation arising during the Term under any provision hereof, which by its nature would require Landlord and/or Tenant to take. certain action .after the expiration of the Term or other termination of this Lease, including any termination resulting from the breach of this Lease by Tenant, shall be deemed to survive, the expiration of the Term or other termination of this Lease and, after the expiration of the Term or other termination hereof, the parties shall be required to perform any actions which are necessary to fully perform the obligations that arose prior to such expiration or termination.
17.17 Landlord'sRight to Encumber. Landlord shall have the right, subject to the prior written consent of Tenant, which consent shall not be unreasonably withheld or delayed, to subject all or any part of Landlord'sInterest to any deed of trust or mortgage.
17.18 Amendments in Writing. This Lease cannot be orally amended or modified.
Any modification or amendment hereof must be in writing and signed by the party to be charged. 51 416475.14 001207.0007 4/ 2008 - 15/ 10`.39 AM
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17.19 Reasonableness Standard. Except as otherwise expressly provided herein, whenever this Lease grants Landlord or Tenant the right to take action, exercise discretion, establish rules and regulations or make allocations. or other. determinations, Landlord and Tenant shall act reasonably of the Lease but which have not yet been discharged.
SIGNATURES FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written.
LANDLORD"
CITY OF REDONDO BEACH
1 By:
Michael A. Gin
Mayor
TENANT"
RDR LIVING TRUST OF 1996
ATTEST:
By:
CITY CLERK
APPROVED AS TO FORM:
By: O
a
City Attorney `_S CU~~~ c~
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EXHIBITS
Exhibit "A" Tidelands Grant
Exhibit "B" Description of Leased Land
Exhibit "C" Tenant Development Plan
Exhibit "D" Landlord Improvements
Exhibit "E" Participation Rent
Exhibit "F" Limitation of Uses
Exhibit "G" Memorandum of Lease
54 416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM ^ Op~Sc EXHIBIT "A"
TIDELANDS GRANT
AN ACT GRANTING CERTAIN TIDELANDS AND SUBMERGED LANDS
OF THE STATE OF CALIFORNIA TO THE CITY OF REDONDO BEACH
UPON CERTAIN TRUSTS AND CONDITIONS
The people ofthe State of California do enact as follows:
SECTION 1. There is hereby granted to the City of Redondo Beach, a municipal corporation of the State of California, and to its successors, all the right, title and interest of the State of California, held by said state by virtue of its sovereignty, and to all the tidelands and... submerged lands, within the present boundaries of said City, and situated below the line of mean high tide of the Pacific Ocean, to be forever held by said City, and by its successors, in trust for the uses and purposes, and upon the express conditions following, to wit:
a) Said lands shall be used by said City and by its successors, solely for the establishment, improvement and conduct of a harbor and for the establishment and construction of bulkheads or breakwaters for .the protection of lands within its .boundaries, or for the protection of its harbor, and for the construction, maintenance and operation thereon of wharves, docks, piers, slips, quays and other utilities, structures and appliances necessary or convenient for the promotion or accommodation of commerce and navigation and the protection of the lands within said City, and said .City, or its successors, shall not, at any time, grant, convey, give or alien said lands, or any part thereof, to any individual, firm or corporation for any purpose whatsoever; provided, that said City, or its successors, may grant franchises thereon, for limited periods, for wharves and other public uses and purposes, and may lease said lands or any part thereof for limited periods, for purposes consistent with the trusts upon which said lands are held by the State of California .and with the requirements of commerce or navigation at said harbor; 1 416475.14 001207.0007 4/ 2008 -; 15/10:39 AM VUS-JG
b) Said harbor shall be improved by said City without expense to the State, and shall always remain a public harbor for all purposes of commerce and navigation, and the State of California shall have, at all times, the right to use, without charge, all wharves, docks, piers, slips, quays and other improvements constructed on said lands, or any part thereof, for any vessel or other water craft, or railroad owned or operated by the State of California; c) In the management, conduct or operation of said harbor, or of any of the utilities, structures or appliances mentioned in paragraph (a), no discrimination in rates, tolls or charges, or to facilities, for any use or service in connection therewith shall ever be made, authorized or permitted by said City or by its successors. The absolute right to fish in the waters of said harbor, with the. right of convenient access to said waters over said lands for said purpose, is hereby reserved to the people ofthe State of California.
Approved April 12, 1915
Stats 1915, p.62.
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C~ ~: FLi'.tEI: ~' S 4r^ RECEIVED
c A~~
RtlSir .T ~ . 13is~lEFL"
omblyuran, 4Gth •Distriot
aPR 2~1972
P80PIRt1' llAii~6i1E1i1
Scnata Bi!! Ho, i4t1t ,
cn~~ Eli ], r~: sus
An oel to z»Itttt~Serlintt 1 n/• qud to a!Iti ,~rctions 2 3 f 5 Chal:
9, 10, 11, l3, 13, 14, 1,, 16, 1i, !8, 19, ontl 20 In, trr v7 n( tits Strtlrrfcs of 191 rclatiit to titlotattds and sub+~tcrpctl lanrls. , i
tAprfreerd
Stcretary
byC: NereMbor orernor' lt, t57r. Fltcd telth • of 8tsto No~ trerriu.ri. r9il.) tcF.copla o/ thc,Stala of CatiJornea do tzutrct as /o!lotus: ~' ' SF.C7 tt)~ 1. Tha Legislature makes the Follq~ring tintiin s i attd g drtrrrttinntia~rs:
a) ]. y Chrtpler, vt t-hri'.Sl:~tutes of ]915, the 1,egislaturo ronte~cd cettnin, tltlc acrd of Itcdondo ] suhtnt!rged latuis iu•trttst to the City 3raoh for the purytaxes the i i or ihr1~
rn n gated, printnrilp rnmotion acrd at: omntodntjon t:of conttnerce pari ation i
and g fislurics. '
b) A lwrkiwt of such tide and illoti snlrFttcrArtl lttutls has Bern arx! rrt:lnirned in acoor~lanct: ~ritha rnaxtrr ptatt of m•
roeru,ent of Enid grttntet! titlr.aurl stthyrpraod lauds inoiut utg !hc d~relopmcm of a har~nr facility. r c) The Cit,• of Rctland.~ IIcarh. throus.•h dr~ ntcleptne' of ' its' 00 hari,
bo:-
nr,
t
hug cnttscct to br taadc arailabic n~rroximately
slips, bcatt Inri docks, bent a~irts ,• r~•nrtls. bent hoists, 1=trar rental fxtcilitirs, nrrtl.frco llahin~ from . e: tiger ttill'cr• et ] ticrx, has canstru+• Ird h±o brraktraterx, is lit thr of prori~itt u lie r ltr~, ecet:
for
g ]t h pu kl~tg fariliiit•ss anti «i!I
proritlc pzrkinu ' in rxc,•~c of 1 tNlt1 rare,itad tiril! . pro~• ith• uttmcrous rn•ren• tiunrt! mnrniii+•s intaudin~•. but not lhnite't! ta nautical mu• strums, rrstaurnuts, mntelx, and otlrrr tonri>, ts fatrilitirs. ,. d3 The City of lirdnttdo 1]h • rrt:ltas nutdr rt.aitnbit-. br the dotelopntrttt of nttr+~ !' turiiitirs and. otltsr r~eatit-re• ual antrni- firs, an nthtitinnn! three ;nibs of xhart!iine prnrldhtq• rexsa~to tiro oaea:rfor ret:reutinual caurincrci ai aftd rtmitatianpl pur- pt~rs, i
a
c) The (:itp of itbt]mttla Re:tcb i4 t:nrrrntly tattierKnintf n i lur^c Krttlr
ti~
rctitirclnpntt•nt prajret ~rhich ltnx rtti:Irtliarti• tho tttrrfrrtul ttresfs Frnntiitt,• t!u t!itr• 1 i
f) In nt• ordnnt::a tti•ith ii~P mttstrr. pion of tht~ City of lirtinndo lantie
li~• arh For the eartcloltntrnt aF thq tide ,'tnti xubna•rtrrd t;
firantrt! to ii in trust pursunttt to Cbiaricr a7 of Ilte latntrs of lQla-", ]' art. h: K•1 thtym~tlt ~l. itteGtxi-r as dasr:ribcd in ' ficctign ~ nF xttid art. bcin~- a rrltttitrl~• xrnuil pnrtinn of such grnritcd tide anti sabntcrocd landx trcra !lllrtl, rcciainted, and i
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C08-56
2 optiourd far' lrasn. r-r 1rnard, and arr prarlu~ tuts incamn to support the ataltltary trngtx ueulrr ~rltieh Snrh ti,t~• nnA snhrurr~cri sands nt.• hrtrl hr lair! eit~ aud, rxcrht fur thr. prodnclir-uaE inco»tc to stlppart s+ticl trusts arr, undrr snrb mastrc plan, as lort~rr re+tuirccl ar »erdrd far thr pronution of tutid trusts.
C8) Said 1'arrels t
tltcatt6h a. inclusirc, nrr na in»ftrr nr•etird
or rnquirrd for purpoRrs of nnritratiu», comutrrGn, nnel fiRhrrirs and shouh) lsr Erred n[ the pnhhc truss! fur narigatia», cam• nlerae, and d.~thcrics but xhould ranlittna t» Le held in trust by the trig c+f itrduncta 1lcaclt astltjrrt~ to thr trrnt~ and pro- visions of Chapter f;7 of the fitatutrs a[ Iota, ns amrudrd and aulritlo: teei nc»b,• this act. and to otl-er •la~rs npplicabla to tho tide and +cubntrr~rd Inncls i»cluclyd i» sttrh t;tm: to the Cit of Rrdondo I3rarb, but subject to nn co»ditien of use other than the uses srt Forth in life cxigtia;toptions to Irase and lenses of said 1'arcelss I thcaugh •!. iuelilcirr, anti stub}ref to tlrr condition that thr rcrrnurs drrircd from the lcasi»~ or' adminiatratinn of said I'nrccls 1 through •t. inr{usirc. shall ba ascd in furthcrn»ce of the iiurpascs of the trust untlrr ~ehirh other tidy n»d submccArd lands arc held by thn City a[ Rc- ' donrIo Iit•7ch as exprrxerct in Cltnptrr 57 of the .Statutes of lill~, ns a»dcdtM~Anil tupplcmcntrd b,- thia act.
C. ' ~ h) The rclensc of said E'arcels I
t!ltlront; 4, inclu4irc, from the publie trust for unrite:ttio», commerce, find fishrrirts to the eaten! esprc~sPCl in stthciirisio» (~) of this Rrrtib» is In the best intrrcRts ~! for pcaplc of the Stale at California . SEC. 2 . Scattan 1 of Chaptt!r tiT of the Stntutes of .1!)15
isanu•udrd to read:
Section 1. There to h~rchy t;rnnted and cnnrerccl in trust to the City of ltecloncYa Beach, hrrcinaftcr referred t~ as the "cite," all of the right, titic, and setters! of the fitatr of Calitarnin, held bg tii~ aisle 1-} rirtuc at its twrcrei~ntr in and o all o[ the title and submrr^rr! {ands. u•ithi» titt• present boundaries af.Ntc tiff atld szituatctl brlo~rthe utrcut LiMh tirtR line of the I'acitie Clccnn, .~ltieh lands, rxc~rpt fur the lnenc~ cleseribed in Srrtiolt C• of thiq act. ace to br. forecrr lnlc! is; the cit~• and its s11t; 4rtn~ C.iu trust far the ntirg and ptu•posrs IInti upnn th+• cxt~rcxtt c~rattitiaus falla~sies;, to ~+• it:
a) For tltc csfahlitrlunret, imttrorrtttrnt, astd conduct of harbors, and for the rrntstructial4 rrrmistcur•tind, rclsaic, mai». tenmter, autl oprrntinn of ~rharrrs, darks. pirit~s, xlipx, yunys, and ati other ~+• orkx, baililin;.m. faeilitirt, utititirr,. gtrurturcA, and applinnccn iuridrntal. ncccr.-~ary, or ranre»irnt, for the prurttotiou and arcomnuNlntion of contutrrre nud uariratiau. bl har all nt»rirntrtl rine•cnnunrrcial aura intlctstri:ei ct.5cs n»d purpo~•c, and the ro». Irurlirrn. rcran>; uctian, lr•ret~stir• and . i
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nanttr•uanre ut »tnrinr• r+tcdt+r»Conuurrri+tl and intiu.•+trint t buildings, plnus, nud fetrililirs. i
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c) T`or the cr-nsirnotian, rcranstruction, rs•Imir, nn+l manta j. lrnanrc of hi~ ea~h+t, r;trortx. rnad.+:~~~, hritlurs, parktnt: faoilitirs, pmtor, ttlrplunre. trt~ rnpt: r.r rAblc linos or 1Andings, water and gsrx pipctinrs. An nlt other tru»xpartAtion And ulilitv facilities oc hctl~ tsrntor+ntcidrntal, ucccsksAC}•, ar cod~cttient fur the pra~ liontr~And Aecorrnurnlaliun of Any of the :tees set forth in this scrtion.
d) 1~' ar tlrw rt+ttxtruction, roconsttrurtion, repair, t»airtte• uanre, And r+poratinu of p~licrt-parks, put+lic piayt;roundg, public balhbnu~+• s, noel lntblic bAtbinr facilities. public recrcatiao and pnblie fi.~: ingl-piers, inr•lurlnrg. but not tim'tted to alt fucilitirr:, utilitirK, struotures, Aod a +plianres 3midantnl, i u~eexsAry, ar rr»reottirnt for the prnutot~an Anl nccarnmodn• s tion of nny,:- uuh atarinN++rirntod u+ts in the statrtrido itttrresl. r) A'or rho e~chtuput, slabii.•inrprotomrnt, anrt conduct of suta117N+At hnrbnrs. ntnritttts, Artuatin p1A,•grounds And simiiAr recrcational:facililirs, nttd far tho cattAtrut~tion, rcconstrttctioa, s ~ repair. mainlr•ntnee, nnI On~rAtlQti o[ Alt works. buildin~x, fnciiiticst, utilitirs; strurtnrrs, and Altl+liance4 incidrntai, neet r cssaArr, ar cutr~tnitmt far the promotion Anti AcrunurtodAtio: t of Any of such usu~R. ittclnr3ing, bnt not ]itnitrd to, snACkbars, i cafes:, roektait Iaun~rs, rextnurnnlrt, moto>R, hotr>s<, and other forms of lrartgirnt }itin~ Accontnto+lAtions open to the public, w~ launching rAntps mul hunts, rttorAfic xhccls, bnitt, rrpAir 1'ACilitics With cranes Anct nraritrc ~rA}x, public reslrooms, bAit and tackle y shopx, chnndtrrics:, bm+t sAlcs cstablishmculs, rser~• ico stations And lurl darks, yacht chtb buildingsc, ~mrking Asens. rOAd~~ 15, F. prdoslriau t~ara And inn+]. aoAprrl al' A5, i'And other compatible commerciAl anI rrcreAtionAl aMi~• itics and usrs.
f) lror thr protr~tiou of ~rlldlifa habilAtss, the improvement l+rolectinn. noel onnsrr.ntlau of thr ~rildlifn and fish resourres and tLr rcotn}s;• of thr Arca, the l+roriding ofo~szl1acc ru•ArcAs attd areas far rrerratinnat use t~ilh npctt Arccss to the public, , iho otthnmrmrnt of rhe,trsthetic AppcarAnae of the s3reA, cvniroi of dredt,~intt or oiling of the Area, or both, And prercntion ' i. ~ •'.' .. • of pollution of Ihr arrA. - fiec, 3. firrtion 2 i$ added to Chapter 57`of the $CAtutes of j J35, to rrod:
8ec. 2. The city. or its sttcco>;~ nrs, R}tAlt not at atir time t grant, conror, t;irc. orA}icnato sAid IAndsc, or arty part thereof, to any iudieiduAl. Rrni, or corporAlimt for Atn purp~e trltAt- s t; xrsrrrr: prt+ idrd: t•tlu+t thr city, r+r ils succcssearc, may grant frAttchis:os ih+• rron far liutitrtl prriuds far those uses n++d purpnsrst cot forth in Sceainn I of IHis Act attd ntA: loASC said i
lams+, br Ant t+Art thorrof, for limitorl poriods for parposnst i tt th t hi h id ( d r h ld'b
i
cnus sttont ~r e rtnix upon ~r c sa an s A e c y
the fitAtc of GAliforniA And t-ith the requircmeuts of commereo Ort3AligAtiOn. I
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fiFC. d. Section 3 is nddccl to f'haptcr v7 of Ntc Slatutcs of Illla, to rrad:
Sre. 3. Thr harbor cRtn{tlixltcd h~trstlant to subdivision (n? of Scetiott 1 of thin act Rltnll be iutproroti b;• the cite ~rUhnnt cxpdnRO to tha Rlale, and altaq alntt;•x remain a nlth{tr. ltnrbar for atl pur{.oxrR a[ c~tnntorce aucl nnvit; tic+a. n and thn state f. . shall ha~• c. nt all !latex, the right to u~r. ~tithmlt rharti•. atl tirharvcR, dm•Icx, pieta, xlipx, qutt~•a, and nlb~r ilnpravcmc•ntR cottsirnelcd on said lmttla, or nn~• part thereof, for any .cKCa•t or nllter Seater craft, or railroad otcned or operated by the BtAte.
riF.C. 5. Section 4 is ndtlcd to Chttptcr S7 of tltc Statutes of 191~i, to rend:
t
Sec. 4. In the ntnnngemrnt, rontinct. or operntintt of said harbor, or of any of tl-e utililieR, atruchlres, or npptinuecs tarnboned in suhctivision {a) of Section Y of .thin act, no riisrrimi• i
nation jn rnteR, tone, ehnrucs, ar in fncilitics for any tticr ttr scrrico in conncetion titcrenith shall ever be made. finthorizcd, or emitted br the eity or b its succ~rR. The abROlute ri4ht to t~It in Ute irators of said! arbor. tritlt -the ri;,• ht at ennrritieat access to such tcaterA Derr said IandR for Rucltpurpose, is hereby reservpct ta'tlte peapic of tlt~ : State of California. ' 1.
St:c. 6.. Section 5' is added to Cbnpfar..3T' o[ the' Statutes of 715, to read:
Sec. ~. ' Che foUotring four drRCriLed pnrcelR of land ce»- Keyed in trust to the city ancjer the provisions of Scctirnt 1 of this act me teced of the pnblie tntRt tar navigation. counnvrrc•. atul R.dtrries. but shall ennlinnt' to he held in trust by..the city . subject to the tc-rnts anli? rorisianR of• thiR act nttcl tq atller 1 totes apptieablc to lido and Itttbincrt:rd 1mtdR inclutled ilt snrh grant to the city, subject to nn conclitioit of ttti~ outer tltnll .tlte r` axes set furl!! ht Utc exictiup oplionx to lca>; c and ( eases of each parcels, and Rtlbj~• et t0 t{I~ 1!tinllitjait that the rerr.IttirR derived from thr 1raRing or nchniilixtration of xuclr pnrcrls shitll be turd in furtbrrance of the pt~rpaces of Ihe.trttRl ttncter hhiclt other tide and subntergecl lands are held- by the city iu t
nccordanca Frith this acti
e~~' I'atcel I
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That Area of Tidelands •and Cnbnteruecl i:ind $•ing ~rithiu the City of lZrclaatlo Beach. Cauaty o[ Los Angclex, State ut Californit, tlescribcti aR folfanx;
lie;:itmitl;: sti n xurrs•v
tnnitnutr•itt ttt• natrtl xi~aR ' ll•l' nn
1fap of lit• ar~e• l of Sarvcy tiled iu honk itt, l'ra,~1QIt e~f Rcvnrcl of ~nr. sr~• of sate! Cnnnl± : ( itcttt:c :i $fi° pl~ 1:>" ~ V
54.31 ft. to Ihr'[' rat• 1'itint of lir;titutin;,•; Ibrotrr fi 73° •lI' i~:~' r
1 1Y 1t,'$ U.ft.; tltcnac V 5T° l3'tl~" IY $;1.?u it•; Lhcnee N. 33° i
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1' Sa" l: 1fi0. rl:ft.: tltrnCC S 67° la' Ov" E 53.75 [t, to the True i'uint of ltr~ itr;,•, iu» Coutnining tl.: 3rl'Aerrs.
I'urcol 2
ThAt Arm Af Tirlnfnrr, a'it' nrl SnbtttrC;:,• r1• land h•ittt,- trithin tl-n Cil}• of firtlAndo tirru•h. C'unnty of Los . CAiif,- htt;elcs, Stttte of rttitt. drrrribtYl its firp,; x;u' ltcginninx At A sttr~ry titnnnntrnt d~• xiunntrtI as 'I1•IR' on
ln» Af Rc°•onl of Sarvor lilrrt itt l3a-k 7s. i'Age IAO of Itreorrl of Surre~•s Af c,rid CAttnt~•, thence nlau~ A limn rs. trralin;; frAtu rAticl nwnuntr•trt to xnrsr~• ntmututc» ']1•i7' Af, slrottn au ruricl at:, -, ~ t;i' ttG' tha ~ tt3N ~V• • Ir•Att lifi;ar Tirlr t5.i~,ft: la A ' taint in tlto Cilr of RecGuulo ItonrltgZslu~ltr Sl:tlrt lmndetl(•';, ttttnissimt And rcC~+rtlrtf tts C-, 1f. ' Jt3•.• 1~ a!pnu,, ! l Cauttt}• ltrrord~rr,f rutirl (:aunt~• tut1~'• l s! t
1!
n, turd frith the ttf;.tltotter ninnt; ~;r;'
lino A' .oll° 'i~' 43" 11 T5, 3:q. 3 fl, to fftr Trutt I'uiut of I3a. innin~; thrttro cantitiuim' 1• 8.x. 1 nlAn;t >' nri~l lion i\' ?ti° »•!' d:r' lt' ft. to A Itnint itt thr• turMhrrl,• Cit}• IrrtnnttAet. liar of s,~iil of Rrdatula Iirr;rle • thrnrr rtintt~ ~stirl liar $ t;go •t3' .d 1., t1' 3t1. ii9..It.• tht• r• tnti _~1° 1R' ql•~ ~ ° Cii.$! ft•; f hcttce A' 68 ii%~ ~'~ '~:~$.' Jt2 l't. !n the True 1 oi»t of r c: inittd '?• oni:<Oi6 arrr.-s. 13eginni»g• •: °
PArc~f 3
That ATFA of Tidrlantt:: stud Crthmrr~,., iloud 1~• inz trifhln thr Citr of IirdnndA lirtn•tt, (ittutt~• of l,ng CnlifnrniA, drw:ribrtl Ax full„tte; jltt$hlrs, Mate o£ Brtaanin;; at n xurtt•,~ ntruttuttrul ti,~ rnoted ci;Ax ' II•lu' on afap of
7trcArci of
Iiit• orrt
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ttf ~ur)•rr lilnti in R+~nk T8. i'st~• r - of tcrti,l
t'AUnt~. fltrnrP tcnrlirt;; Irmo said tuanumrul fA nlnlt~ At. tr~li~txf ~ r:t+itrt•InnnuFnr' ILLI' ttt.'ns shot-n Ati :•utid pulp. $ i3° '?1' 'Wy'-1t tG° :i:;' 3•~' ~ l' Fsitlli ft. In thr Trtir la> 20.s•ft.; tbrnrr'N .+ mint Af 13.•~. inninu• 23.tt1f1 ttfi ::3° ?I• ni:••~ S ~;31 ~7 ft.: ibs•urr S Iti° • ; ~•~ t -
thtttrt• S i7 ~l`~.. ~~
t. 3~ i• , I, .- of A tnn••rnt rurrr rnncrrrru,uthruxlcrtr hay it~tA rmiiuxtnf ti0.?i fl.; thr•nrc rWettharrrlrrl~• nlun~t !br rrrc uP r"tid rttrsn 210.,iG lt.; thrttrn
s•181.-ft. tr+
tsgt~«ttt to Berrie! t•urre..'`,. thr ltn?inrtin~ of rt t:rntttt;;rurtr•31° ~i' ri:l" ); t`rlr itrrt•it:;; st rnriiq~ of :~a,.ni ft•; Ihrnr+e•
raurrevr nerrth•
erl. rdan~ the nre• nt +~ri,lrr:rvr Iln.ti•_> M'ulirrrh• turd rrxlA rrtdisr) lion i+•• strx S :,.i° :, t' _'!~'• . • tt. In a point la ~+4tirh litre ,~ 7:1°~;• ._~». .. 1•.. lhrttrr s,1,. 3!1d. i!t
ft.: tirrtt,•r ~' i. a '; t
1-ft~; ~ It,• rrr,•i\ ttti" ri•!~•] ri1'f:. J8 3~'"' ll laG.tRi ft, lu NrrlTrur I'aiit of 72rj; rritrn~~~ V iG° Lu;thtiniug •L'~• In tlrrrx.'
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Thnt arra dt Tidelnndc nral Subntrr~cd 1nnr1 lying iritliin thr C:ilr of 1lcttnnAa Itnnrh.. outttyC'of Loo At~ fitategelcs,.of C:afifarnily tlc~;• gribctl'»faUa«x:
Jtegiattint- nt a atlric; ntnnnrncul tlr' nntecl Ri;;He' 76' ll-nn Aiap of Kccorti of Siirror ! floc! in Book i8, 1' en~100 of Itcconl of $ur~crx of raid Count;. lhonco plans a litre o.c• tonding front rn3d tnonuutcnt to aur~+•~• tnmtut» 11.ont' 17 as shorn ~n Rni~l
null, S G7' ttu' q3" 11 ]ita.G9 Et. to a mint in t)tc
Alvan lli~h Tidy t,ino nR xho~+n in ntnp:of rho Ctrnnt to tht! City of Ilcclotulo Itrnc~h h~ thr 4tatc l.nnils Cununixxion. and rerordcct ns Ual..~. 2n•i!!, 1'nor llI and tiled Frith the Cnuntr lic~ortlcr of raid !.'Hunt}• nr F•181G; thottce nlon;; tettid Gne N 20° 2-l' 4:1" 1t' 23. 38'ft. an lhc• True I'oinl of li~• nittg; Ai»thence continuiu~ : heat;; wtid line N 2tt' 2~i' •13" 11' ~Jlt.tl!! ft.; Ihottce S ti7° VG' U~" t1 ;18t3. 3tT:ft.;. tltrnrt: S 2~° i3' vT" l; tt0.00 fi.; lltr•nCO N (~~° 013' 03" L 38?. 02 it. to the 'True Point .ot 13e.' ltinttill;t.
Coulaiuin~ 0.7ry3 aores.
Swc. ?. Scctiu» 6 i4 ndcled to Chapter f7 0[ the Statutes of 1918, to rend : •
Sec. &. Tho cite t:hnll maintsiin rcrorrltZ itlontit; ink ttll re.cnui•front nll Inutl~c sr,nttetl pursuant to this.nrt anti >a~atl tlto are:tunb ropa'rls of snrb rerotutes uith the Slale Cantle C:otutn3s~liau.
Svc. 8. S!•ctiatt 7 itt nddod to Gltapter 57 of the Statutes of f}l~, to rcncl ; '
Svc. 7. ror lntt•posctt of this nrt, ilte rotirement pf lt~~uls isssuod br Iltc Cit} for tha oanstrnrlinn of said harlwr tncilitics canstituttx iht! use of rc~etiucs iu accordance tt•ith the terms of raid Irutix.
Skc:.0. Sortion 8 is addrel to Chstnter 57 of. the Slatulra of 101a..to rend: •
Svc. tl. Thr city- .rttall ortnhlish a sc~tnrat~ truRt futui or funds mt nr Uetore 1) tber rec»31, 1912, fur doposit of all of the iotio~ritl~: a
a) All tuanottt ar prnrtMrls tler3.ott front the grantoct tide and snlnnor^cd Inndx in rho rit... inoluding all not income nnd' rorcnttos dt•rircd from thr prarturtinn ar tallo o! oil, gut, oe• other hriU• narnrbr- aubsttlnrrs derived from the srnntcJ lido and sttbnu• Rrdt•l:utclr.
b) Alir~~~tctut,•drrirrct !ruin th+~• crrurin'~InnAx• af' tltc citv,.• r~t•Ilcrcuftrr.• st'~ rrd • to ns••" uplnnds,'• duel' drxi:ribed -ns lollo~-x:•
9' rtninhax~:•~• tipln»rlx it/ l11o C•ii~ at Rodnntlct. h, Tiont:C-Aunty of l.:ts An~rlvx,• ~lulc aC Ctllifot•niti, tuort• pnrtiruhtriy de. scribod ar toll~ns<: '
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3 i3rl:n;; int-at 1 pninl. sttirl i+~+ int hrin;; - at -hr ntrnn Uit.•h titlr. line of Ucte.brr 1t17.i tta c•xtatdisbnl b}• th,• dent,. of f`rniaalihf and sl- t1tn.Dn map rsf thr ~rnnl to thr Citti ,-f Rcdnn,la iles<rh rrt:ordrd an .lone li• )GG6 and Bled itS I:trutnettt :\ t~o. 2R8G, i3aak F'IRIn in tb~ nlli~e of the I.as A1t~•~ Irtc Cnunt;• RM• nlrr, e+ said I-nittt bnin~ Alxrl lltr +rrCirrl. trrrttnu. of a iinr aho~rn nn tlto ntcp of rrs•arci of ~urrr~• ftlee~ in ll,-„ k ssi• 1'r : n~iti thrattwlt 3G iache. ri.i1t thr f)tller of lhr I,e~ Arts;rlrc Cnunky Itre•nrdrr, said lira baring a lararietg of \~rllt GG°. 2R tuinutra. 26 sra onds I•~:- st and a Mnglh of 1:!} rLfort. xnid line bcintt a courac , itt thr txrxicrl~• boundary of said rrrard of xttrrr}•, tlirnee ra~rt• ~ ~~ erly alnn~ raid linr t-nd nnrthrrh aloa~ at-id trrsierl;• bcnttlth-r~• r of rrrnrd of xnrr,~ nn itc riiria-ts cnur.rc to •its'ittlrrsrMiait f tritlt'th~ trrslcrl~ liar of llarbnr Arire. thrum ttorthe`rl;• nintst; ! stliid reralrrtp li-ir c-f Ilarb»r hrire nn its rarlaus raurr.„ to its itttrr: n-certi~ Lith thr ttc-rthPrl~ b~tntdary of thr C.' afitv.
Rrdando Bench, thrt~cr trt••: trrl-• an spiel rit}• bnnndar~• to its interscctian tiritii 811111 ntr:-n hi;;h tidetiitr. th~nr~ Aatttherly along acid ntrnu high. tidrlinc an itA rariatts coiirst:a to the j point of brgiutiittfr. ~ ~
Cc- ingnunettt:onSr~ttrntber $i). 74.'1~at~tatrmcnr of Bnanci»l condition anei operattan s;hr-hall• suhtAiltctl b: tl:riftr-io-Ihe-, - Audilor Crncrni Annnnllt on nr beidre•• rcacfiaz Reptrtnbf! 30vf~ rar ti,r the ttrrredinlr Bs,•a) grnr.+
SF.C. IQ. firrtiott i) it; adcicd to Chopter u7 of tltc Stniietrs of l!tly. to rrnd;
Sri, :1. i\-- nding•ttrilltat» nn~• other prnrizinn of Iatr• ihr cltr. acting eitltrr.nlnnr nr ~.+- utlg Leith 1-nnther Kral nr,:tith a:;cnr;•, tear ucr rcrt~ntrrn are•ruiug frtnn nr oat t-f thr u~r of . the ~rnmrtl tideland,: and snbmcrt:rtl tnn,lt: for unr nr alt of lhr foll- rin;; (- t~t[na~ x; rt: e+l-~rnri. d that Ibrt Cangd~• ~rieh the trrnts t-f the trucl and art ntnttcrs of statruidr, Sts distittguixh,•tt trout torn! err l-urrlr prirnlr, intrrrl.tt-ntl hr- Btr• u) Fnr the. tatablialunrnt, intttrc-rcmrnl, a»tl ,:rnuluct .of hnrhora- anti For tlirc+ittxtrurtiun. rrt; tntrtion. ml~t'rpnir, tnaintcna~ r• u~s+ttcl nprrtttiun of nharrrc, ctnrkt;. pima. slil-z, ryun~•s. and all nthcr trarks• buildint.•a. Inrilitics, utilitirc, t.trurturtx, and itppliant:~ ineiti,•ntnl. n~ertJnr;•. or cattcruirnt. fnr tltc ' pet»nntinn turd arre- ntminlirn- u,of ran-mrrrr and n: atintt. ttil:
V1 I'nr nll rvutnterrial and iudn-lari:nw• cuttl s'parpaara' nod the rolt~ ttbin. tru,rrc• Innt, auelrnc•repair, stud u-:- inlrnnnrr of ctnnu-rrrinl surd iutlt:.trint bnilrliugR, plattts• :uu{ inrilitirs, • r) !: car the eNdabliaum•m, intttrnrrtnrnt, snot r,aattitt, of nirpnrt anti heliport ur „ei:diau fac:ilitlrx, ittrludius:, bnt not limUcd to, c,pprnartt. tah,• 1'.: tic-! ur•Irnr xcun•x in te- limt nan• gilh nirprn•trn,- x.,trn~• uul f,-r ihr eN„: u, xlrttriir,rrrc-uxirnetintt. repair. utaintrnunrr. nn<lr-prrnlintl of Irrntiital bnildiu,•a. rntitea}•s, rundtrn;•s, nitrous• tutcinnys, harking nrraa, ttnd all other J.• ~ .•~..
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t~ •• orks, uildin;l+ex, 1'nrilitirs, utilitirs, xfrnrsnrrx, and ;rpl-5 ' linn~ i
incirlratxl, acrr•acnr~, nr +•nnrrnirnl 1'br for pramalian and • aecamuuHiutiun of nir rrannrern•+• and nir n:+tinn, ri~• d) 1•'~r tha rr+nvtractinn, rr,•auctrurliinr, rrt+air, and tnain• ,'• . ",.-.' - '••` tt'naaco ~f hit; ra,•h+t:, stroctr, roa,htnrs, hridt;+x, lrrltlina rail- : ` 4 roads, ~tarkiitt; fnc•iliticg• puucr, ti•Irplmno, tclot;rnph ac cable .
Iittrs nr htndint,•s:, tratrr and ttnx 1»polinCV, turd ult arbor tr:mx• • purtntiun crud utility fsrrililirx nr hetlcrnroutsc inridcnlnl. neccs:• snr~•, or onnrrnirnt (ur rho prmm~tian tool aacomniadntion of ', 1 : •' t
nm' of thr use's set Earth iu thix act, •
1 c? l~nr rho ranxtrurtinn. rrrnnxtrurtiau, rolmir. t»aintc• r
v
nnttco, s,ml oporatinn of public buildinl;x• public nr,• u-c+• b1y and l si blir k bli l r
t,nr ntrrtin~ rr.x, ranrrn r,n rrntrrx, pn c, pu c p a
1>
grotntdx, public h,x .• tthhrma•rnd publio lmtlrin;tfnrilititK, pub. ~• - • . :'~, •` t tic recreation null ti,.hin~ pior•s, public rrcrratian frtciliticx ` • . t-; inctnslinu, bnl nnl iinrilyd ta, pttblir, dolt raurr::,. and for all ' trorkx, bnildiu;.-s, Eaailiticx, t:tilitirs, slru~• tnrrx, aatl stppliancrst ineidct~tnl, nor+•~' n. a:+ar ranronicnt fttr the grotnotian and accoutntodaliatr af~an~ curb nsrs. ; y; • E1 b"nr thr otaabli~ trnt. h~imhrorontcnt, and canthtrt of ; small boat h:- rx. rbr+marin:rs, aqn»tic p1a~ ~ rntutdx, and cbuilar ! tneilitirt<, and tar tiro ennstru,tliou; raCanxtructiort, i • rccxcntionnl sepnir, tnnintt•nnnr~ and npcrutian of all works, buildiu~s, • Ia 1'actlrtrca, utilities:. xlrucUtrcx, and applian~: cs; incidontnl. neC• • C'xsttrr. or Cottrenicnt rr,r the prntnolian and accornntarhttion of ; • I
an. of Rue1i •uxrx inrlnt3int;, bttt nat lintitcrl tr+, xnackbnt• caErs, s• rocktnii lotntuox, r~tnnrmtt.~. motel., hotols. art<I ather iornts o[ trans;icttt tiring ncrnnuu++rlntious oprn to thr public, launchjug ratttpx anti ltatctsa, fitarafir >;b~• tlx, brrat re~ nirp,faeililicx trilit cranes mtrl marina trays. nritniuixtralic+nbuihlinpx. pnblir; rest.. roams, btiit ntul tackle sltnlts, chnnr{ tcx, lrr'twat rstlos cslnblislt. tncnt:e, s<crriec sttrtii~nx Wild furl clnrkx, ~• nrht club buiTditr~x, ; pnrkiug nrrnx. rontitrn;•t:, prricsrtrtan trnrx and laruttcnpod nre:t#, and gtbcr Compatible Conttitereial sand. rrCrcationul aatiritics atilt uses. t;) ]•+ ar !br prntr~tittn of ~rilrllil'r hnbitaia, rho iurl+ re• - rr~ mrnt. 1+tion, rair•curt ccu+ rratian sc•of the t~• ildtilc and fixlt rc~ourrex attd thr•rcalo;;~• of Iho nrra, the prnridin~ c+f opon• • nrl urrnc far rrv•rrntional uxr tritli open :ircosx
apart sore:rx a
to the public. thr rrthunrrauout Ot the 711•fithptlr nppcnrnnrc t~f the nrrn, +•~ nlral uf• cirrd;,• in~ ar, tiu}; Aof the rtrcn, ur both, nod prrrruti„nn! p~dlutian of tbo arch. •
L) 1•+ar ihr prou+ntiau, b} a~rrtixiust l.and tcurh athrr t+rcan~ . pubtit: as utnr br rcasnnahlo un:l nppwy+ tr,i:-ur ntnxinrutn t::'~;
1. ttxc of xur:h ~rrutlrri tidrtnndx null snbnrrr~od Iruutx ar to onrnura:;cprivnl+• imM.tnuml in d++~ laprr+t•rrtt al' sorb y; ntrdstitlrlau~lx ars<nrr~u1» rd Innda far tlaes highrrt• and Lext uxc itt , the 1tuLtiv itsltt•rxl. !
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i) her anv ~ttUrr nsns nr purp~+crx uC :•t=ridr.:- rlt': sdislin• fictiahrd Crum latrrl~• I~hlw~nr pri-•alr, inlvr,wM anti br• Ctl m•uhirh nrr in futlitln:rnt of Chute (rttxt uxrsc anal purtw,;es ctoxcribrd in this nat.
j) F'ar ihr ac~ ntuixiti~aC pro ~crly suck thr rrnclitian of scrt• ci~• x rrawnably ttn: utrycs~~Iv t~tr rarr3in~ aut aC thr usts atui purpuxrx drsa•ribc•itt lhiY martian, inrlutlin~ thr mm~rlizatiun br tlrhl sr•rcirc c+l' any teapitul imprmrn:rat Cnntkint,- pra~raut t+hirh ix rattaistc•nt ~rilis the lrrnts and ttanclitiats seL forth in thix ncl.
SFC. 11. Scrtian IO is ndtlcd to Chapter ~T of tho Statuics of 1'J13, to resat: '
Scc: ltl. Stsclt rr+Rcuu~tnny Itc dr~iltd in unr ar ntarc rracr~c Inusjac fur t~sc in nCCOtYlanre tritit the terms and coudi• lions act forth in thix ctrl.
Src. 12. ~ortian 11 is added to L' ptcrh»fi7 of the Slrlutts of l~Ia, to grad: ~ •
cc. 12, • AR tn.the acrtintutatian and rxpcntliturt• of rrt•euurs for atty•sinrlr capital imprssrrtu~ett on lhr ~TStnlyd tidelandx and t:nbttsrrarsl ltn+rls iarulrin~ an amn-utl in rxrrtGS of hro hnmlrrd fifty thntts:anel elnllursa i~t).2: ilUtl) in tits: nstsrt•• pate, Iho eitr tshnll tilr frith: the :3taic latmis t'Pmmixxiou ~ detaikrsl dtarriptian of :rurh rapital impto~• imrnt nat Is•:x than all.tlays prior to tltr tiutc of attiv Jitbntssntrnt tbcrrfar ar in connrttian. therntis•ith, r:ptingcc~ttrclhttinary pl:tnninss. The Slate latns~• Catnntkwcictn ma}, ~rithin 9Q drys after thr time of stir•h filing. drtrrtnistr uttd »nlift the rill t1tM sstrh rapilal impru-rmcnt is nai in tb~ statr~ridt• inlrresst ante brnctit ~r _ bt not nttthetrixrd. yl,iLe rrari~tiAns oI ScMions 1 and !1 of this ari. TLr Stntr lasude•Cnnunircipn mny rt~ucst thr opinion of thtt•Atlornc,• Grurrisl at~• th~ mntlc~. Hari ii it darx act, n cnpy oC zuch al+inian shall br tlrlirerrd to thr cil~ kith ihr n~tire of itts. utiun. dctrrnti»Ina thr event the Stab lnnda Utuuniaxion natifirtt thr.citr lhnl xuch capital imprmrtncnt is npt nnihor• izeri, tktr city schail not disbttrxr any re~etut~ ior, Drain ronnrs;• iiciu Frith, xitrh capital improrcutont, unkr+cs and nittil it .is dckcrminrd •b br asttharizs•tlb~• a final ords•r ar jud;.• mrnt of a court of rantps•trut jari.~dirtimt, Tl:r city is nutharizcd to brim; soil against the slutr Inr the purpnRS• of tcrcttrinc.Riuh an~ardrr ar adjtttiirnlimt, ~rhich shit xhail httvt• priarity b~cr stli other rigit mattrrs, ytet•rire shah br mnslc• u[tott lhr l;xrru• liar OfRrer of thr Stnlt• l+andq l'mitrciuu nu~ans{ the AIIe-rltey r • • ~~ ~••~~.
I
i : •- • • Cettrral. nnsl the Attarury (Ornrra) >iltall tlrfc•ns1 thr atatr jn s• : ' such fiait. 3.nrL part; tthaU hrnr ills sun rmstx of suii atul na
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such caxts slutll bc• rrru~• crrst Irsmt ihr s-ther party. t. •. Ss:c. l:i. Srsdiun 1° ix added to Cltaptcr G7 of tltc Stetutrs nC 3~1a, to read:
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1 Sec. ]?, At the reel. of rstch fisrAl }•rttr. b~;, inttin~ .~`. rttteln• bee 3p, i!rG, 1'that 1lrlrtirn af trttxt rrvrt m~i l c n rxcrse ~f two hundred Rft;• tlutttannd tlydlarx ii•' ht><234, t1. rrmuinin~ nftrr current, rclAtctl to
anll Acrrurci aperali»#; rast4 and rxt•rntliturts dyt•rctl}• • the opcrittieia or the ut:,ittirnAn f b h t •
And other
cc o cAC cs, hstrhors, lidrlAnds tr»st Artirityea hnte been r»id shall be dccntrtl rxri•1:•rcveuu~; pr`oridrd, drat ally fnncln tlrpr»titeel in i a rrsrsre fund fnr Cuiurr. caytitol rxprttllihtres, t1C Ally' fnndR requircd'to ~nicr ar retire xrnrrnl nbii;,rntymt rlr rrvennr band i~tues, ar Krrs:ial funcilt rrgnirrd .!~ br tuaintAinrti f»r qtc pAy. 1 tnent of contrtsctuat obligtttyottA oninh• to the state on Arroant of harbar impra~ ntscn~~rtettitnrizcll b the provisionx of r• y licit 3 icomtttenehttr with Sccti»n ip) of Chapter 2 of Ui.iaion 2 of Ihe~ Arbors l{AntlA' atianAVi~Cadt-, the nutneys from •shich harQ bee», or will llc.. dttsc•for pury~osex attthorired by I A ty lthatl nat 4e ~Icrntcd cxer>;s rrrcnuc. ~lntartizati~r payments mAdc subsequent t++ the rtfre;tire rlnlc of the enaclmrut of this aectiou At the ]!171 Rrat:lAr Scssirtn of the iey:islnturr ~ for cApitat itttpra~atnrnts of the granter] tidelAnds and IAnds for sabmcr~cd
purp~scs nettharizeti bt the terms o[ the ~rnni ntn;• br considered aA expenditures tar tbo purp~eof determining i nPt rerrnttcls. The exec. r~~enur, as dMcrmittcd Itursututt to this section, shall he diridetl As fallons: 8:i percent M the
t•
Crttccnl Fund in the Statc.TrcAlntry, ant] ]a rrrocnt to the i'= •- city to br clrpocitcci ytt ltsc city's trust fur:cl Attll ttAMl for any purpose auihariard by .Scctinns ] and p of dtis art.
t:t:. l9. Seeiion !~ is added to Cltapt~rti7 of the Statu tes of ]~t5. to rend't Sec. 13. The State I.nuds ~Cwnmi~you, ai the rrqurxi of the city, fibs]] firant s;n rxtrtt-Sion of bate for filing any rnpart E
or statrnxnt rertuireri by this net which trAS nat; filed else t» f mistake or inltchcrtrnce not to exceed 30 rttlendAr data After arr~ict! , uylan the. _cit}• by the State Lands Lontntissiait of written notirn of violntiott.
fife.. t3. Srt:ti0t1 2# l8 Adcled t0 ChapleC S7 OI flte Statutes f of tg]ii, to rnad:
S.c. J,4. ] n tho •rccnt #hltt tha cit;• fni>R ar rrfttscs to Str~ tritir tl-e• .State LAnds C»mtnytzSion »rwith the .luditar (irm•rnl nnr
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1111; rxtruQiott period s;rantrcl purstaaat to thys slat, n•ithin JQ rlt~~• s ttftrr written entice to the rit~•. or'failt or rrhttca to rstrry out the trrmr of thK ^raut ~rilhin :iA dA~• s ACt~• r .rrittrtt n~ltiee to 1hr rite, the Sta1~ 17uds t:amtnixainn nr the. 11a~litur ttrn• real R1tAl1 trithin Gn t]sa,•nntf~• the Chywf Clerk of the Asorut• bit and. the Srrrctary ofthe Rrltatr.
I'hr Atlarnr; t]rttrrnl ~haIl, ttM-n request of the filah• iandx Cununis~ ttftrr cinu,•the city bAl1 brrlt t;irrn %Lait• )tOtiCe nud j •
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after <r;.• h failarr rtr r+• tacpl br Il-r ~i+~ t•rht; snrlt j»tlicipl rir+,^ in;;P,••~ Rfnr rnrrrrlinn nnrl rnfnrrrt+•=.! :.: : IR' nt• r+•;- t•rlpt•, purl shall net. to l+ralcrt anc• 1:• ultrrtiafi•rt n as:cet>; sihtpteel un fire ~runtcd tid~land~ t-r clcrierrl thrr~ ut. ' fl,
Star, 76, .~t+ctiutt 15 is nddrd. to Cltnltlrr 1T of tlac :+Intutcfi o€ i:tt5, to rcntl:
Src Ia. '1•h>; Ctnle T,pnds Conunissid;ttup~• Pram ti•ttr In tints :,t thr rr, 6 :+ ta•,.t thr I,isltitun:, r;:u- tihttr• :- t:t'plarttingnir; t0 drtrrtniu~ Ihpt; lhr tcrnts trod r-nsqulttu- of Ihr. brp[tl +ntl nntcurharnts sort xnpphntcidx Ittrtrtn h-tce b~tm contp[ l.~ir• eitl:, pnd thnt pll ~Ihcr npplirplan prncistnn:: of Intr crntc~: rntnt; thct~ s, crilie ~+rpntrtl li-u:trl[ slat .pnd sot»uertied lands pr!• btsin•~ snot}+tirtl +riili in l;nnd faith.
SFC. 17. Sccliort IG is acldCtl~to Chpplt:r 57 0€ ll~,: StpUttes OZ IflS, IO rcprl: '
Sec. lf.. The Audi ~r tlcnrrnl thall• t+n or bcfnr~ ~tnrrlt 30 of ra:h yctr, cbtutncnein•, oft Alarch ati 1~i5, rrp,•rt to rite l;hicf (J~+rk o€ the rls~ccntbl;•, l0 1he Sccrotnrv n€ tits S~• tfntc, and lu ilto. fitatc 1.,rtntlfi Cmm~tissiott. the tall detnitx n€ an~• trattszaion ar conditin[- rrportrtl to hits lntrcuant to this pCl tclti~h he dcrtttS in pmhablr' mtlict e•tritlt the rcRuirc[nrttta of this prt. ar t,-ith nu;: otlur al+>> lirable prachinn ~t7n•, r•nncern• ink these itjterCilir: brstnlyd tidrlands sad xubn-~ rlr;.•lands, r, lS. Secliau 17 is added, to Chppter a7 of the Statutes of I~15. to rcaJ t ~ '
Scs. I.. The rlttnrnc~ i~~urrnl shell btin~ ptt :•«tiuti in tlic. rrior Snl,Cnurl of ll-r C++unt; of le•a .1n~ sr1:•to rtrtlarn thnl for ;,.rant nn-lrr tcltith ibr. sit} ht-lris fiuclt' lidrlnnds and ' fit) rdbtucr_•lnnrls is rrcokcti~ For graxs and u'sllfnl ciulntion a€ the t••rurs of the ~rttnt r+r otltt:inpplirphic procisinns of lmr concrrt:inp ihrar ap^. cilic l;tiedrp:tirlt: st: lpn- and s+thtnrrued ipnda<,
of the ;.+:.
ur
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to cotnlsrl
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cotnl+ tucei':t+' ith the t~rpta an~ rrritrlitianS l.
I+isionc• surlt +- ro•rf.tltrr nlti--• ( liral-a+t•,
ul+ nt+t•••;• tcxt be rr+ttrrrnt t[r~•~ httiatt r-of saber Jtouw~ of iht:
l.ixt:+c;: iure ar ul+ nc+torrent rcryucs: al' the ~-tata l.pndc (•nnt• ntixxi+,u. ~urlt rcrtnrs.t
fihatl L+• tirade nnl~ ttEirr tt fiud'e»;*. thrl
the cit~• hp:; :,• rmaclt• nntl trillfttllr rinlat~•:! H-e tcrmx r,f rho grnal t+r :-ihrr nl+ lirttblc l+rrarixin»R o[ ln:c c~nrartutt~ tltcsc fiprriti-• ;: ranted lid- rlaInl-attd Knbturr;,Mr! laudtt.
Surh feuding thrill Uc t:nrkdupl+by fiubt:lmtlinl cci~trnrc and t:hnll br [-tarlc r-ntr ttt thr r+- nclUxittst of n tu+tirrd p}thlir bras. itt~ . tit tdti+at thr cite bps boon tacrn n:+ nl,pnrtinut. In l-atrrM• ritletu•c tr- fnllr drtu•ribr raud;tiana pttd rxtrnaalin~ rirruut- . sGtu+: cx nt,d R+ ln• ratr,,fnMtt to dixt- sC•r,- thtt stllr~ t•~irttt. • r+inJ:- it:u. 1!t. Sc-•tiuti tti is addrel to (:hpptcr ~iT t-F Ute Statutes St,~. ! 5. In the crrttt rite grant r.f tidrlnu+ls pod a=rluinurr~~ Inntix it: trit,tt to the city ix rccolcrd pursuant to Scctiatt 17 s
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of tlsis aCt• such rcrncaliau xhall not iuspnir or alrPrt thn :re• curilt a[ lca~ or the rights or oblit; mcati~of third lmrliex• includi--~ les~rrK, lrmlcrs far talus, or others who me 1-articx to Cor-trncts ~rl-icls, ~xet•!- Ior such ro~• ocatio--, ~rould bo la~rfui and hindiu~ t•enlract~.
S-:c. 20. Scclioti lJ is added to Cbaptcr 57 of tl-c Statutes of 7913, to red.
ScC. 1'J. The rro~ isinns a[ Sections ti lhrau~h jZ'of this net rtlatin~ to tl-e dcp~stit, ar•eotnitin;:, and uRe o[ rerCnttes~ clrrir~K1 froiu the uplantlg dcs~sribect in Rnbdi~ iau ( i~b~ at Section !3 of this act shall no lrn-t:~LC of auy torte anrl' cffeet ns. io aueh upta-sds npoa the pa~• sucnt n[ the hooded del- incurred br the city i-s connection ~~ith tht! dc~• rntclorit-of the lledonda Reach Kind llarbor•or the pa~ cntn-of anp rctint~nrintt lhorco[, ulz, to A masimtust Rum of ici- millian dallurs ($lpllllQ,liQO), ~rhiclse~er occurA last. t'•pan the hnh~enin~ of the latMr a[ x--cle~eotx, all retennes deriecJ from the uplands maybe utilized by t1-e city far as-y InnFu1 municipal !-nrpo.~e. ~ .
Ssc. 21. firctini- 20 is added to Chapter fi7 of the.Staiutcs of 1913, to reed
Sec. 20. ~Qllllltie:~ taiilPd s-in tlll$ ar•t ~ItAll lit at-y wa} impair or al[cct the riot-!s ar ohliKatien4 of thirrl parties. inCl-sdin~, bnt not limited to, al-lianocs, lcssness. itmlerrt [ae rahsc. and holders o[ contracts cmiforriiig llte ri{sht to the -:.~ and occu• patim- of, or t~- n right to croscluet al-cratiaisu - ipaes, lnnd,a de• scribed in thin art anc~infi Fmm olstio»s, leases, cautrncin. or other inctnunrnl~ ~utt•rrd into by the City in gand faith prior to the cltcclirr dills-~~[ this section cnactccl at ilio 1x71 ltcgulnr Session of t1-e l,islature. c~
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EXHIBIT "B"
DESCRIPTION OF LEASED LAND
REDONDO PIER APPROACH
Those certain tidelands and submerged lands in the City of Redondo Beach, County of Los Angeles, State of California, more particularly described as follows:
Beginning at a point on the southerly line of Coral Way formerly known as Pier Avenue) produced westerly, which bears south 74°- 35" 42'-west, a distance of 66.12 feet from the northwest corner of Lot B, Tract 5322, as recorded in Map Book 56, pages- 91 and 92, records of said County in said State, to the westerly line ofHarbor Drive; thence south 74°- 35" 42'- west a distance of 192.15 feet, thence north 15°- 25" 17'- west a distance of9.00 feet, thence south 74°- 35" 42'- west a distance of 24.85. feet, thence south 15°- 25" 17'- east a distance of 22.00 feet, thence south 74°- 35" 42'- west a distance of 23.79 feet, thence south 15°- 25" 17'- east a distance of 67.79 feet, thence north 74°- 35" 42'- east a distance of 0.79 feet, thence north 15°-17' 25"
west a distance of 0.79 feet, thence north 74°- 35" 42'- east a distance of 240.28 feet, thence north 15°- 25" 29'- west along the westerly line of said Harbor Drive a distance of
80.00 feet to the Point ofBeginning
Containing therein approximately 11,604 square feet.
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EXHIBIT "C"
TENANT DEVELOPMENT. PLAN.
A. Upper Roofs. Makeover of upper roof facade at 100"H". The appearance of the pagoda roof structure over the landing on the stairway up to El Torito'swill be redesigned.
B. Redesigned Pier Level Storefronts. Redesign, demolition, and redevelopment of all Pier level storefronts. Possible expansion of some. or all of the Pier facing storefronts on the northern side of the leasehold by extending them to the northern edge of the existing ceiling soffit;
C. New Ocean Facing Beachside Plaza. Removal of .south. stairway from Pier level to upper level, relocation and reconstruction of new stairway from basement level to Pier level, construction of new architectural decking, and redevelopment of "back of the building" facades into south facing retail storefronts. This element is subject to receipt of all approvals, including Redondo Beach Fire Department.
D. - North -South Pedestrian Walkway. Construction of a north-south pedestrian walkway through the building, giving Pier visitors direct access from the Pier, to the beach. New storefronts inside the walkway will allow visitors to view stores and shop in the stores on either .side of the walkway. The walkway itself will be made into an attraction, possibly with murals of Redondo Beach to entertain and educate visitors; E. Outdoor Patio Dining. The upper level patio to the west of 100"H" will be extended southward over the sand and. wrapped around the building eastward to the southeast corner of the building. A dining patio also will be created in front of Oceanside Seafood on the Pier level.. This element. is subject to receipt of all approvals, including City of Redondo Beach and L.A. County Beaches Dept.
F. Renovation of Retail Interiors. Upgrades to Pier level retail. stores.
G. . Pier Level Decking. New Pier level exterior decking.
H. Railings; Awnings. All of the wooden railings will be removed and replaced with a new railing system. Awnings may be placed over selected storefronts.
I. Banner Program. A banner program will be added to the building.
J. Exterior Lighting Program. Anew exterior building lighting system will be installed around the building.
K. New Architectural Signage Program. Pier level exterior retail signage will be removed and replaced with new, themed and architecturally consistent signage.
L. Landscaping. Planters will be strategically located around the building. 1 416475.14 001207.0007 4/ 2008- 15/10:39 AM
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EXHIBIT "D"
LANDLORD IMPROVEMENTS
A. Decking. Replacement ofthe pavers on the Pier deck.
B. Architectural Lighting. New lampposts, sconces, or other architectural lighting.
C. Landscaping. New planter boxes with enhanced landscaping.
D. Outdoor Furniture; Accessories. New benches, and trash receptacles, following a seaside architectural theme.
E. Signage. New architectural public signage.
F. Beachside Decking. Temporary extension of the City's Pier level decking to the south
of the Premises (subject to Landlord'sreceipt of all applicable approvals and Landlord's best efforts to obtain same).
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EXHIBIT "E"
PARTICIPATION RENT
A. Definitions. Capitalized Terms not defined in this Exhibit "E" shall have meanings defined in the Lease. The following capitalized terms shall have the following meanings:
Applicable Percentage" means the percentage applicable to each use specified below in Section B(2), and subject to adjustment pursuant to Section B(3).
Appreciation ,Rent" shall .mean the Additional. Rent payable pursuant to Section C below.
Base Value" means the value. established upon Tenant's completion of the Development Plan as provided below, as increased from time to time pursuant to the provisions below. Upon Tenant's completion of the Development Plan described in Section 2.1 of the Lease, Base Value shall be set pursuant to a fair market value appraisal of Tenant'sInterest to be conducted in accordance with the provisions set forth in Section 11. c) 4(of the Lease. Such appraisal and resulting Base Value will serve to account for .all capital investment in the Premises up to and through completion of the Development Plan. Base Value shall thereafter be adjusted upward as follows: (i) to the principal amount of any refinancing resulting in Net Financing Proceeds at the time of a
financing event, (ii) to the amount (gross purchase price) of any sale or other Transfer resulting in Net Sale Proceeds at the time of a Transfer, (iii) by the amount of all .expenditures by Tenant, constituting capital expenditures with respect to the Premises during the Term, including, without limitation, funds utilized. from the .Capital Improvement Fund or Renovation Fund, from Tenant's own funds, or from the proceeds of any policy of insurance; provided that, such capital expenditure must be approved by Landlord, such approval not to be unreasonably withheld, in order. to qualify as an increase to Base Value; and provided, further, that insurance proceeds applied following an event of damage or destruction for purposes of restoring the Premises to the status quo ante shall not constitute capital expenditures resulting in an increase to Base Value; and (iv) after the foregoing adjustments of the Base Value. for .items (i) through (iii) above, by an additional increase of (A) ten percent 10%) per annum, compounded annually, during the first ten years of the Term, and (B) twelve percent (12%) per annum, compounded annually, every year thereafter during the Term, prorated for any partial years. With respect to application of (iv) above, all capital expenditures made during the January 1 to June 30 period of a year shall bear interest for: that entire year, and all capital expenditures made during the July 1 to December 31 period of a year shall not begin bearing interest until the next year.
Gross Sales" shall mean any and all gross receipts, proceeds and amounts of any kind derived from the sale of goods and services in connection with .business operations at the Premises, including, without limitation, amounts from the sale of merchandise and services made. in, upon, or from the Premises (whether received by Tenant, a Subtenant or any agent, subtenant, licensee or concessionaire of Tenant or Subtenant). Gross Sales shall include the proceeds of business interruption insurance which are received, in lieu of revenues that would otherwise constitute Gross Sales, but shall .not include any. occupancy charges for the Premises, including, without limitation, rent or tenant advances, reimbursements, security deposits or funded reserves received by Tenant from Subtenants, rental loss insurance or casualty and disaster award Exhibit "E" - Page 1
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proceeds. Gross .Sales shall also not .include (i) taxes collected from. customers and paid by Tenant or Subtenant to .the applicable taxing authority, such as sales taxes, (ii) bad debt losses or reserves provided such reserves shall be limited to actual. cash reserves. established and funded for that purpose and shall not exceed two percent (2%) of Gross Sales, (iii) goods returned to suppliers or which are delivered without consideration to another location for sale to .the public from that location, (iv) an amount equal to cash refunds. or credits..for. returned merchandise which was originally included in Gross .Sales, (v) sales of fixtures, equipment or property which are not stock. in trade, (vi) interest earned on funds arising from the Premises, and (vii) reserve accounts required by the Lease.
Net Financing Proceeds" means. the principal amount of any loan or financing proceeds (net of any direct transaction or closing costs charged by the applicable lender or financing source or otherwise directly attributable to such financing, including loan fees, escrow fees, title insurance premiums, attorneys' fees and costs, transfer taxes, survey fees, recording fees, commissions, prepayment penalties, and other customary and usual fees of a refinancing collectively "Refinancing Expenses") and net of any Refinancing Expenses or Transfer Expenses applicable to any previous financing or Transfer which did not result in Net Financing Proceeds or Net Sale Proceeds, respectively, payable to Landlord) less the greatest of the following: (i) the then current Base Value; (ii) the principal amount ofany existing fnancing that is paid off entirely by the current loan orfinancing proceeds; or (iii) the principal amount of any previous financing or Transfer pursuant to which Landlord was paid Appreciation Rent pursuant to Section C below.
Net Sale Proceeds" means the .cash value of all .consideration paid or payable in conjunction with any Transfer (net of any direct transaction and closing costs charged by a third party in connection with such Transfer or otherwise directly attributable to such Transfer, including escrow fees, title insurance premiums, reasonable attorneys' fees and costs, transfer taxes, survey fees, recording fees, commissions, prepayment penalties, defeasance fees and. other customary and usual fees of a Transfer (collectively, "Transfer Expenses")) less the greatest of the following: (i) the then current Base Value; (ii) the purchase price paid by the then current Tenant in conjunction with the most recently completed Transfer, plus the amount of all funds, from any source, constituting capital expenditures by the then current. Tenant with respect to the Premises; or (iii) the principal amount of any previous financing or Transfer with respect to which Landlord was paid Appreciation Rent pursuant to Section C below.
Operation Year" means a twelve ( 12) month period starting on the Lease Commencement Date, and each subsequent twelve (12) month period.
Percentage Rent" shall have the meaning set forth in Section B(1) below.
Transfer" means any sale, assignment, transfer or other conveyance of the Lease, or any sale or assignment of an undivided five percent (5%) or greater direct ownership interest in Tenant's Interest in the Lease (provided, that for purposes of determining whether such (5%) threshold has been met, any series of Transfers.. that is_ substantially contemporaneous or otherwise interrelated in:_ such a manner as to constitute a single integrated transaction, shall be aggregated for purposes of measuring the percentage of Tenant'sInterest being transferred). If Tenant is a limited liability company, corporation, unincorporated association, trust or partnership of any kind, a transaction constituting a sale, assignment, transfer, redemption, or conversion which results in the. loss of a controlling interest in the membership interest, stock, Exhibit "E" - Page 2
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partnership interest or beneficial . interest in said limited liability company, corporation, association, trust or partnership shall also be deemed a Transfer. Notwithstanding anything to the contrary herein, the following shall not constitute a "Transfer" for purposes ofthis Lease:
i) a transfer to a spouse in connection with a property settlement agreement or decree of dissolution of marriage or legal separation;
ii) a transfer for estate planning. purposes of ownership interests in Tenant or in constituent entities or members, of Tenant to a member of the family of the transferor, or to a trust or other entity for the benefit of a member of the family of the transferor, whether such transfer is the result of gift, devise, intestate succession or operation of law; iii) a transfer of a beneficial interest resulting from public trading in the stock or securities of an entity, where such entity is a corporation whose stock is traded publicly on a national stock exchange or is traded. in the over- counter the-market; iv} a mere change in the form, method or status of ownership (e.g. trust interest to limited liability company);
v) any transfer resulting from a Condemnation by Landlord. vi) any granting of a security interest in connection with a financing upon the Premises or any transfer resulting from the foreclosure thereof.
B. Percentage Rent.= -
1. Payment of Percentage Rent. Tenant shall pay to Landlord within sixty (60) calendar days following the end of each Operation Year percentage rent ("Percentage Rent") to the extent that the aggregate amount of such Percentage Rent calculated under this Section B exceeds the Base Rent paid by Tenant during such applicable Operation Year. The Percentage Rent shall be calculated by multiplying the Gross Sales (or Gross Income of Tenant with respect to Office rents received from Subtenants) derived from.. the Premises by the Applicable Percentage for the use generating such Gross Sales (or Gross Income, if applicable). For example only, if a retail store Subtenant generates Gross Sales of $300,000 in an Operation Year and the Applicable Percentage with respect to those Gross Sales is 5%, then the Percentage Rent for the portion ofthe Premises occupied by that Subtenant is $15,000.
2. Applicable Percentages. The initial Applicable Percentage for each category of use for the Premises by Tenant and its Subtenants is as follows:..
Restaurant & Bar 3.5%
Alcoholic Beverages (without food).. 7%
Fish Market 4%
Snack Bar /Take Out 6%
Coffee Shop 3%
Ice Cream Parlor 5%
Vending Machines
Tenant's
commissions on non-owned machines) 10%
Gross Sales from machines owned by Tenant) 10%
Exhibit "E" - Page 3
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Bakery 3%
Disco in Basement 3%
Cocktail Lounge in Basement 3%
Electronic Game Room 7%
Office [greater of the following two amounts]
subtenants' Gross Sales) 2%
Tenant's
Gross Income received. with. respect
to the subleased premises) 12%
Retail 5%
3. Renegotiation of Percentage. Rent. Effective as of the tenth (10th) anniversary of the Lease Commencement Date, and every ten (10) years thereafter (except any such anniversary falling within the last two (2) years of the Term)(each a "Renegotiation Date"), Landlord and Tenant agree to renegotiate an adjustment in the_Applicable Percentages provided for in this Section B for purposes of maintaining a "Fair Percentage Rent" with respect to the Premises. " Fair Percentage Rent" shall mean the fair market percentage rents, expressed.. as respective percentages of Gross Sales, which the Premises would bring if offered for lease in the open market under conditions. existing as of the date of valuation, with a reasonable time allowed in which to find a Tenant renting with a knowledge of all of the permitted uses of the Premises and the covenants, conditions and restrictions of the .Lease, the Landlord being willing to lease but under no particular or urgent necessity for doing so and the Tenant being ready, willing and able to lease but under no particular or urgent necessity for doing so. In the event that the parties do not reach an agreement with respect to the appropriate adjustments to the Applicable Percentages on or before any required adjustment date, such adjustments for the succeeding ten 10) year period shall be determined pursuant to the appraisal provisions set forth in Section 11: c) 4(of the Lease. Notwithstanding the foregoing, all Applicable .Percentages relating to Gross Sales at Harvelle's shall remain unchanged throughout the tenancy of the current Subtenant and shall not be renegotiated until the first required Renegotiation Date following the termination of such. tenancy; provided, that, if the percentage rent under the Harvelle'slease is increased in connection with,. any modification, amendment or extension thereof, this protection shall cease and the Applicable Percentage for Gross Sales at the Harvelle'stenancy shall become subject to adjustment at the next Renegotiation Date thereafter.
C. Appreciation Rent.
1. Payment Upon Financing. In _the event Tenant .borrows .money whose repayment is secured, directly or indirectly, by Tenant'sInterest in'the Lease, Tenant shall pay Landlord an amount equal to ten percent (10%) of the Net Financing Proceeds, if any, resulting from such borrowing, as Appreciation Rent. Such Appreciation Rent shall. be due and payable immediately upon the funding of the loan, and shall be payable in addition to any other sums payable by Tenant under. this Lease. The .foregoing provisions of this Section C(1) shall not apply to the first refinancing during the Lease Term, provided it closes within the first ten (10) years following the Lease Commencement Date, and no Appreciation Rent shall be payable with respect to such refinancing.
Exhibit "E" - Page 4
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EXAMPLE 1
Assume: Concurrent with the Lease Commencement Date, an initial leasehold mortgage in the principal amount of $8 Million is recorded against the Leased Land. During the fifth lease year, there is a refinancing and a new leasehold mortgage is recorded against the Leased Land securing a loan in the principal amount of $10 Million. The transaction costs. (e.g. loan fees, escrow, title, attorneys' fees, etc.) in connection with that refinancing are $50,000. During the eleventh (1It") lease year following the Lease Commencement Date, another refinancing occurs in the principal amount of $14 Million and a new leasehold .mortgage is recorded against the Leased Land.. The transaction costs of such second refinancing are again $50,000. At the time of such refinancing the Base Value is $12 Million.
Result: Concurrent with recordation of the.. refinancing in the eleventh (11th) lease year, Tenant shall pay to Landlord the amount of One Hundred .and Ninety Thousand Dollars ($190,000) as Appreciation Rent.
Explanation: There is no Appreciation Rent with respect to the first refinancing, as it is prior to the tenth (lOt") anniversary of the Lease Commencement Date. In order to calculate the Appreciation Rent payment, if any, due upon the second refinancing, you first deduct from the principal amount of that refinancing ($14 Million), the transaction costs of that refinancing 50,000) and the Refinancing Expenses or Transfer Expense of any previous financing or Transfer which did not. result in Net Financing Proceeds. or Net Sole Proceeds payable to Landlord (in this case, another $50,000 attributable. to the first, exempt refinancing). From the remaining amount ($13.9 Million), you then deduct the greatest of (i) the current Base Value (in this case, $12 Million), or (ii) the principal amount of any existing financing that is paid off entirely by the current loan or financing proceeds (in this case, $10 Million); or (iii) the principal amount of any previous financing or Transfer pursuant to which Landlord was paid Appreciation Rent (in this case, not applicable). Accordingly, the Net Refinancing Proceeds would be 1, 000 ($ 90,13.2M), 9M-and the payment due to the Landlord would be ten percent (10%) of that amount, $190,000.
2. Payment Upon Transfer. In the event Tenant Transfers (as defined above) its Interest in this Lease, Tenant shall pay Landlord an amount equal to ten percent (10%) of the Net Sale Proceeds, if any, resulting from such Transfer as Appreciation Rent. Such Appreciation Rent shall be due and payable immediately upon the closing of the Transfer, and shall be payable in addition to any other sums payable by Tenant under this Lease. The foregoing provisions of this Section C(2) shall not apply to the first Transfer during the Lease Term, provided a request
for approval of such Transfer is submitted to Landlord by Tenant within the first ten (10) years following the Lease Commencement Date, and no Appreciation Rent shall be payable with respect to such Transfer. Where a Transfer has occurred by reason of a change in control of the ownership interest in Tenant, the Net Sale Proceeds shall be due and payable only with respect to those portions of such. beneficial interest which ,were the subject of the Transfer and, in no event, shall any Net Sale Proceeds be due with respect to any portion of the beneficial ownership interest which was unaffected by such Transfer.
EXAMPLE 2
Assume: In addition to the facts set forth above in Example 1, assume that in the twelfth year of the Lease, the Tenant sells the. Leasehold Estate. to a third party purchaser for Eighteen Million Dollars ($18 Million)., and the transaction costs of such... sale ( including escrow fees, title Exhibit "E" - Page 5
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premiums, attorneys' fees, transfer taxes, and prepayment fees) are $300,000. At the time of such sale, the Base Value is $15.5 Million.
Result: Concurrent with the close of escrow for sale ofthe Leasehold. Estate, Tenant shall pay to Landlord the additional. amount of One Hundred and Eighty Thousand Dollars ($180,000).
Explanation: In order to calculate the Appreciation Rent payment, if any, due upon the sale, you first deduct. from the gross proceeds of that sale ($18 Million), the transaction costs of that sale ($300,000). You then subtract from the remaining amount ($17.3 Million) the greatest of (i) the Base Value, (ii) the most recent purchase price for the Leasehold Estate, plus subsequent capital expenditures, and (iii) the principal amount of a previous financing or Transfer. with respect to which Appreciation Rent was paid (see Definition ofNet Sale Proceeds). In this case, item (ii) is inapplicable, item (iii) is the $14 Million refinancing in the eleventh lease year, and item (i) is the Base Value of $15.5 Million. Accordingly, the deduction is $15.5 Million and the resulting Net Sale Proceeds are $1.8 Million ($17.3 Million - $15.5 Million). The amount owed to Landlord is 10% of that .amount, or $180,000. Note that, in determining Base Value, given that the $14 Million .refinancing in the eleventh lease year exceeded the then effective Base Value of $12 Million, the Base Value would .have been increased to $14 Million at that time.
The above example then assumes that there .were no additional capital expenditures increasing that Base Value, and that the per annum interest increases to Base Value (pursuant to subsection iv) of the "Base Value" definition set forth in Section A above) thereafter raised the Base Value from $14 Million to $15.5 Million. Note also that this sale triggered an Appreciation Rent payment because it occurred. after the 10~' anniversary of the Lease Commencement Date, but would not have .resulted, in an .Appreciation Rent payment if the request for approval of such transaction had been initiated before that. l Oth anniversary.
D. Procedures.
1. Record Keeping. Tenant shall keep full and accurate books and accounts and records and other pertinent data showing the financial operation of the Premises .and directly related to the calculation of Participation Rent. Such records shall be kept on the basis of sound accounting principles applied on a consistent basis. Any information gained by Landlord from such records shall be confidential, and Landlord shall make reasonable ,best .efforts not to disclose such information other than to_carry out the purposes of this Section D(1), with the exception of the following: Landlord shall be permitted to divulge the contents of any such records in connection with any administrative or judicial proceedings in which Landlord is involved where Landlord may be required by law to divulge such information, or when Landlord as a public agency) is required by law to divulge such information, or when Tenant waives any right of confidentiality which Tenant may claim to have for such information.
2. Statements and Reports. Tenant shall furnish to Landlord: (i) interim monthly statements of Gross. Sales (and gross rentals due with respect to any office tenants) on a tenant by tenant basis as promptly as they are available but no later than thirty (30) calendar days following the end of such month (the "Monthly Statement"); and (ii) an annual written statement of Gross. Sales (and gross rentals with ,respect to any office tenants) on a tenant by tenant basis within. one hundred twenty (120) calendar days after the close of each calendar year the "Annual Statement"). The Annual Statement shall be signed and certified by a licensed CPA. The receipt by Landlord of any Annual Statement, Monthly Statement, or any payment of Participation Rent for any period shall not bind it as to the correctness of such Statement or ,the Exhibit "E" - Page 6
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correctness of any payment. Any information gained by Landlord from such Statements, or the results of any audit or inspection, shall be maintained as confidential. information.. to the. extent... permitted by law, and shall be kept by Landlord in accordance with Section D(1) above.
3. Right to Inspect, Audit and Dispute Resolution. Landlord shall, within five (5) years after receipt of the Annual Statement fore an Operntion Year, be entitled to inspect and audit, on reasonable written notice, at Landlord'ssole cost and expense, all of Tenant'sbooks, records and accounts .necessary for the determination of Participation Rent for such Operation Year. Such audit shall be conducted either by Landlord or by an auditor designated by Landlord during normal business hours at Tenant'sprincipal place of business and provided to Tenant in full upon completion. If Landlord alleges as a result of .such audit that there has been. a_ deficiency or overpayment in the payment of any Participation Rent then Landlord shall provide written notice to Tenant .detailing the deficiency or overpayment. Tenant shall have sixty (60) calendar days to object to such calculation of Participation Rent by delivering a detailed written response to Landlord describing its objection(s). If the parties are unable to obtain a final resolution within thirty (30) calendar days of Landlord'sreceipt of Tenant's objections, the Accounting Firm described in Section 2.5 of the Lease, or another mutually agreed upon accounting firm, shall be retained to resolve any remaining objections. The determination of the selected accounting firm shall be set forth in writing and will be conclusive and binding among the parties in the event the parties submit any unresolved objections to such accounting firm as provided herein. The non-prevailing party, as determined by the accounting firm, will be responsible for any fees and expenses of the accounting firm. Any deficiency in the payment of Participation Rent shall become immediately due and payable and bear interest at the lesser of eight percent (8%) per annum or the maximum applicable rate per annum allowed by law from the date such Participation Rent should have been paid until the .date paid; provided, that such retroactive interest period shall not exceed one (1) year and there shall be no interest accrual with respect to any earlier period of time. Any overpayment of Participation Rent shall be immediately repaid to Tenant without interest. on such amount with, ,. respect to the period of overpayment prior to the. discovery thereof.
Exhibit "E" - Page 7
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EXHIBIT "F"
LIMITATION OF USES
PERMITTED USES
1. Restaurant and bar
2. Fish Markets
3. Fruits and Vegetables
4. Walk-away Snack Bar
5. Coffee Shop, eating facilities on premises without alcoholic beverages
6. Sportswear and sporting Goods Shops
7. Novelty and Gift Shops
8. Bait and Tackle Stands
9. Ice Cream Parlor and Specialty Candy Shop
10. Storage
11. Pay Restrooms
12. Vending Machines
13. Motel
14. Delicatessen
15. Bakery
16. Bar, without the sale of food
17. Live Bait
18. Discotheque
19. Electronic Game Room in the western portion of the basement structure designated as 104J Fisherman'sWharf r subject to the conditions hereinafter set forth:
a) Lessee (Robert D. Resnick or his successors in interest or the managing or controlling partner of any successors in interest) shall be the principal or general partner (or managing or controlling partner) in any Electronic Game Room operation.
b) The hours of operation of the Game Room will be,as follows:
i) Summer: Memorial Day to Labor Day
10:00 a.m. to 10:00 p.m. Monday through Thursday
10:00 a.m. to 12:00 a.m. (midnight) Friday, Saturday and Sunday night ii) Winter: Holidays -Thanksgiving/ Easter, Christmas/etc. same as summer hours
iii) Winter: Balance of year
2:00 p.m. to 10:00 p.m. Monday through Thursday
2:00 p.m. to 12:00 a.m. (midnight) Friday
10:00 a.m. to 12:00 a.m. (midnight) Saturday and Sunday Exhibit "F" - Page 1
ai6a~s.~oo~oo~ ao.ansi2oos - ios9 ~ C08-56
c) There shall be no loud noise generated outside the premises in conjunction with the operation of premises.
d) Security will be provided at a level to be determined by need in consultation with the Police Department.
e) A central station burglar alarm system will be installed to contact the City of Redondo Beach Police station.
f) The operation of the premises shall not affect the quiet enjoyment of other tenants of the pier Area.
g) No special sound effects or lighting effects will be installed in the premises except as they may relate to a particular "attraction" which might be installed in the premises.
h) The operation shall, whenever open, be supervised by on premises adult personnel (over 21 years of age).
i) Adequate lighting will be provided within the premises. j) Alcoholic beverages may not be consumed on the premises whenever the premises are open to the public.
k) Food, snacks and soft drinks may be served within the premises. 1) No gambling machines, machines that in any way suggest or depict sexual organs or acts, or machines that display vulgar or lewd language will be permitted.
In the event of the failure of Lessee or .,his sublessee to comply with any of the foregoing conditions, the permission to make such use. shall be cancelled and annulled and said use shall be _ terminated and discontinued unless Lessee, within twenty calendar days immediately following the receipt of written notice of default from Lessor to Lessee, cures said default and reasonably and substantially complies with. all of said, conditions and takes all reasonable .steps necessary to prevent further or subsequent default, violation or noncompliance.
20. Offices in the easterly 4,000 square feet of the second level of the existing building.
Exhibit "F" - Page 2
416475.14 001207.0007 4! 2008 - 15/ 10:39 AM
C08-56
EXHIBIT "G"
MEMORANDUM OF LEASE
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
BROWN, WINFIELD & CANZONERI, INC.
300 South Grand Avenue, Suite 1500
Los Angeles, California 90071
Attention: Dennis S. Roy, Esq.
MEMORANDUM OF LEASE
This Memorandum of .Lease, dated for identification purposes only as of 2008, is entered into by CITY OF REDONDO BEACH, a chartered municipal corporation ("Landlord") and ROBERT DALE RESNICK, as Trustee of the RDR Living Trust of 1996 ("Tenant").
1. Grant of Lease; Term. For good and valuable consideration received, Landlord leases to Tenant, and Tenant leases from Landlord, that certain real property (the "Property") located in the City of Redondo Beach, County of Los Angeles, State of California, described in Exhibit "A" attached hereto _and incorporated herein by this reference, together with all buildings, structures, improvements and fixtures now or hereafter erected thereon during the initial term of the. Lease, commencing on the Lease Commencement Date (as defined in the Lease) and .expire, without notice or other action by either party, at 11:50 p.m. Pacific Time, on the day prior to the fifty-fifth (55~') anniversary of the Lease Commencement Date, subject to the terms, conditions, ~ provisions and covenants.. of that .certain, Lease ..Agreement (the "Lease") between the Parties hereto, dated for identification purposes only as of the _ day of 2008. Pursuant to the terms and conditions of the Lease, Tenant has the right to extend the term of the Lease for two (2) separate additional option periods. The first option period shall be a six (6) year period commencing when the initial Term expires. The second option period shall be a five (5) year period commencing when the first option period expires.
All of the terms, provisions and covenants of the .Lease are incorporated in this Memorandum of Lease by reference as~though written out at length herein, and the Leaseand this Memorandum of Lease shall be deemed to constitute a single instrument or document.
2. Purpose of Memorandum of Lease. This Memorandum of Lease is prepared for recordation purposes only, and it in no way modifies the terms, conditions, provisions and covenants of the Lease.. In_ the.. event. of .any inconsistency between the terms, conditions, provisions and covenants of this Memorandum of Lease and the Lease, the terms, conditions, provisions, and covenants of the Lease shall prevail.
Exhibit "G" -Page 1
416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
C08-56
3. Counterparts. This Memorandum of Lease. may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same.. instrument.
The Parties hereto have ,executed .this Memorandum of Lease at the .place and on the dates specified immediately adjacent to their respective signatures.
TENANT:
RDR LIVING TRUST OF 1.996
By:
416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM
By:
Robert Dale Resnick, Trustee
LANDLORD:
CITY OF REDONDO BEACH,
a chartered municipal corporation
Michael A. Gin, Mayor
Exhibit "G" - Page 2
C08-56
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )
On before me, Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/ theyshe/executed the same in his/ their., her/authorized capacity(ies), and that by his/ their her/ signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the. laws of the .State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )
Seal)
On before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be_the person(s) whose name(s) is/are subscribed to the within .instrument and acknowledged to me that he/ theyshe/executed the same in his/ their, her/authorized capacity(ies), and that by his/ their her/ signature(s) on the. instrument. the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State. of .California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature: Seal)
Exhibit "G" -Page 3
416475.14 001207.0007 4/ 2008 - 15/ 10:39 AM ^ 08~5c
a
r F
ROBEDAL -01 KBEESON INIPc)F71::" CERTIFICATE OF LIABILITY INSURANCE
DATE (MM /DD YYYY)
5/ 201430/
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).
PRODUCER License # 0814758 CONTACT NAME:
Hoffman Brown Company PHONE 818) 986 -8200 FAx
5000 Van Nuys Blvd. 6th Floor ac No_Exn: A/c, No): (818) 986 -8510 Sherman Oaks, CA 91403 ADDRESS: A - MAIL
INSURER(S) AFFORDING COVERAGE NAIC #
INSURER A: Golden Eagle Ins. Corp. 10836
INSURED INSURER B : American Fire and Casualty 24066
Robert Dale Resnick dba: RDR Properties INSURER C :
c/o Jeff Bremer & Assoc.
1960 E. Grand Ave. #410
INSURER D :
El Segundo, CA 90245 / IO `
INSURER E
l J as INSURER F :
COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
INSR ADDETSUBR POLICY EFF POLICY EXP
LTR TYPE OF INSURANCE INSD WVD POLICY NUMBER MM /DD/YYYY) (MM /DD/YYYY) LIMITS A X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE 1, 00000, CLAIMS -MADE X OCCUR X CBP8855336 06/ 201401/06/ 201501/ DAMAGETO PREMISES (Ea RENTED
occurrence) 500,000
MED EXP (Any one person) 10,000
PERSONAL & ADV INJURY 1, 00000,
GE ' L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE 2, 00000, POLICY JECT X LOC PRODUCTS - COMP /OP AGG $ 2, 00000,
OTHER:
AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT
Ea accident)
ANY AUTO BODILY INJURY (Per person)
ALL OWNED SCHEDULED
BODILY INJURY (Per accident) $ AUTOS AUTOS NON -OWNED PROPERTY DAMAGE HIRED AUTOS AUTOS Per accident)
X UMBRELLA LIAB X OCCUR EACH OCCURRENCE 15, 00000,
B EXCESS LIAB CLAIMS -MADE UUA1554773950 06/ 201401/06/ 201501/ AGGREGATE DED X RETENTION $ 0 Aggregate 15, 00000,
WORKERS COMPENSATION PER OTHAND EMPLOYERS' LIABILITY Y / N
STATUTE ER
ANY PROPRIETOR /PARTNER /EXECUTIVE E.L. EACH ACCIDENT
OFFICER /MEMBER EXCLUDED? J N / A Mandatory in NH) E.L. DISEASE - EA EMPLOYEE $ If yes, describe under
DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT $ DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES ( ACORD 101, Additional Remarks Schedule, may be attached If more space is required) Re: 100 Fisherman'sWharf AKA 101 -131 W. Torrance Blvd., Redondo Beach, CA. 90277 Certificate holder is named as Additional Insured per attached endorsement CG2024.
CERTIFICATE HOLDER CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.
City of Redondo Beach AUTHORIZED REPRESENTATIVE
Harbor Dept.
415 Diamond St.St. 22
Redondo Beach, CA 90277
1988 ACORD CORPORATION. All rights reserved.
ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD ISO 1 Commercial General Liability Forms 1 11/ 8501/
POLICY NUMBER: COMMERCIAL
CBP- 8855336 GENERAL LIABILITY
CG 20 24 11 85
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED - OWNERS OR OTHER INTERESTS
FROM WHOM LAND HAS BEEN LEASED
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Designation of Premises (Part Leased to You):
100 Fisherman'sWharf, aka 101 -131 W. Torrance Blvd., Redondo Beach, CA 90277 Name of Person or Organization:
The City of Redondo Beach, its officers, elected and appointed officials, employees, and volunteers
Harbor Dept.
415 Diamond Street
Redondo Beach, CA 90277
If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.)
WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule but only with respect to liability arising out of the ownership, maintenance or use of that part of the land leased to you and shown in the Schedule and subject to the following additional exclusions:
This insurance does not apply to:
1. Any "occurrence" which takes place after you cease to lease that land;
2. Structural alterations, new construction or demolition operations performed by or on behalf of the person or organization shown in the Schedule.
CG 20 24 11 85
Insurance Services Office, Inc., 1984