LEASE
(Port Royal Marina)
By and Between
CITY OF REDONDO BEACH,
LESSOR
and
LGW INVESTMENTS, LLC,
LESSEE
1 LEASE
(Port Royal Marina)
This LEASE (the “Lease”) is made as of ______________ 1, 202_ (the “Commencement Date”), by and between the CITY OF REDONDO BEACH, a California charter city and municipal corporation (the “City” or “Lessor”), and LGW INVESTMENTS, LLC, a California limited liability company (the “Lessee”).
1. SUBJECT OF LEASE.
1.1 The State of California has granted to City certain real property within the boundaries of the City on the condition that City develop, improve and operate such lands as a harbor and appurtenant uses.
1.2 The Lessor is the owner of fee title to approximately 10.27 acres of land and water area located within Basin Two of King Harbor in Redondo Beach, California, known as the Port Royal Marina (the “Premises”). The Premises are shown on the “Map of Premises” attached hereto as Exhibit “A” and incorporated herein by this reference, and are legally described in the “Legal Description of Premises” attached hereto as Exhibit “B” and incorporated herein by this reference. The Premises consists of tidelands that were granted by the State in trust to the City, and adjacent uplands which are necessary for the use of the tidelands for its intended purpose as a recreational vessel marina open to public use, and for which disposal of the land is authorized or required subject to conditions established by statute.
1.3 The Lessee has been the long-time lessee of the Premises pursuant to a Lease Agreement between Lessor and Lessee dated April 17, 1961.
1.4 [INSERT HERE DESCRIPTION OF LAND USE APPROVALS OBTAINED PRIOR TO EXECUTION OF THE LEASE.]
1.5 Lessor and Lessee entered into an Option Agreement dated _____________, 2024, pursuant to which Lessor granted to Lessee the option and right to enter into a new long-term lease of the Premises, conditioned upon and subject to Lessee’s performance of established criteria relating to the plan of redevelopment for the Premises. Lessee has satisfied such criteria and has timely exercised its option to enter into the new long-term lease of the Premises pursuant to the Option Agreement.
The objectives of this Lease are to provide for the redevelopment and revitalization of the existing Port Royal Marina as a first class recreational vessel marina, including support facilities, and to provide for the use of the Premises and the improvements thereon by and for the benefit of the public, without discrimination. The redevelopment and revitalization project is not intended to change the use of the Port Royal Marina, and the development and demolition of the existing buildings contemplated by the redevelopment plan is limited to making improvements, renovations, or updates to the existing buildings, while preserving their structural integrity, or in the case of an existing restroom building that has reached the end of its structural life, replacing such restroom building with a new restroom building that will be used for the same purpose. The use and redevelopment of the Port Royal Marina is consistent with valid state and federal land use restrictions applicable to development in the tidelands and uplands within which the Port Royal 2 Marina is located, including the Lessor’s obligations under the California Coastal Act to preserve, protect and enhance public access to the coast, public recreational boating, and opportunities for public coastal recreation.
2. LEASE OF THE PREMISES.
Lessor, for and in consideration of the rents, covenants, and agreements hereinafter reserved and contained on the part of Lessee to be paid, kept, performed and observed by Lessee, hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, any improvements located on the Premises as of the date of this Lease, and any improvements constructed on the Premises after the Commencement Date (collectively, the “Improvements”).
Lessor reserves to itself the sole and exclusive right to all water rights, coal, oil, gas, and other hydrocarbons, geothermal resources, precious metals ores, base metals ores, industrialgrade silicates and carbonates, fissionable minerals of every kind and character, metallic or otherwise, whether or not presently known to science or industry, now known to exist or hereafter discovered on, within, or underlying the surface of the Premises, regardless of the depth below the surface at which any such substance may be found. Lessor or its successors and assigns, however, shall not have the right for any purpose to enter on, into, or through the surface or the first 500 feet of the subsurface of the Premises in connection with this reservation. Lessor shall indemnify, defend and hold Lessee harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, reasonable attorneys’ fees), resulting from, arising out of, or based upon Lessor’s activities under this paragraph. During the Term, Lessor shall provide to Lessee non-exclusive vehicular and pedestrian ingress and egress over the portion of the adjacent parking lot owned by Lessor as depicted on Exhibit “G” attached to this Lease as the “Ingress and Egress Right-of-Way.” The parties acknowledge that the Ingress and Egress Right-of-Way is intended to provide access (i) to and from the area of the Premises at the rear of the administration building to N. Harbor Drive and (ii) to and from Parcel B of the Premises (which is located on the corner of N. Harbor Drive and Portofino Way). Lessor reserves the right to reasonably modify the path of such Ingress and Egress Right-of-Way, so long as such access is not materially adversely affected.
2.1 Quiet Enjoyment. So long as the Lessee has not committed an uncured Event of Default under this Lease, and except for Lessor’s actions 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 Lessee, Lessee may lawfully and peaceably hold, occupy and enjoy the Premises without disturbance, interruption or hindrance by Lessor, or any person or entity claiming by or through Lessor. However, except as provided in this Lease, Lessor shall in no event be liable in damage or otherwise, nor shall Lessee 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 Lessee or its servants, agents, employees, licensees, business invitees, or any person claiming by or through Lessee or any third party except to the extent any of the foregoing are caused by the act, omission or neglect of Lessor or its servants, agents or employees, in violation of its obligations under this Lease.
3 2.2 Condition of Premises. As of the Commencement Date, Lessee shall be deemed to have accepted possession and control of the Premises “AS-IS” without any representation or warranty of Lessor except as provided in this Lease (including without limitation, Lessor’s covenants to maintain certain elements of the Premises as provided in Section 10.2 below, and free of any and all occupants, liens, encumbrances, and security interests except for non-delinquent real estate taxes, and any exceptions to the condition of title approved by Lessee). Lessee 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 Premises, and has, to the extent it deemed necessary, independently investigated the condition of the Premises, 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 Lessor of any kind or nature in connection with its decision to execute and deliver this Lease and its agreement to perform the obligations of Lessee except as provided in this Lease.
Except as provided in this Lease, Lessor makes no covenant, warranty or representation as to the suitability of the Premises for the uses permitted by this Lease, or respecting the condition of the waters, soil, subsoil or any other condition of the Premises, nor does Lessor make any covenant, representation or warranty regarding the suitability of the Premises for the proposed project, construction of the proposed project, or construction or use of the Improvements thereon.
2.3 Other Activities in Waterfront Area. Lessee acknowledges that from time to time during the term of this Lease, and at such times and intervals as may be determined by Lessor in its reasonable discretion, construction, rehabilitation, replacement, repair and restoration activities may be conducted by the authority of Lessor at other locations within the Redondo Beach waterfront area. Lessee acknowledges that said activities and related operations, including the staging, storage and docking activities on other parcels in and around the Redondo Beach waterfront area may be necessary and for the benefit of Lessee, its Sublessees, other lessees and the public, and that the conduct of such activities shall not be deemed to have disturbed or interfered with the possession and use of the Premises by Lessee or its Sublessees, or anyone claiming under Lessee or its Sublessees, or to have caused Lessee or its Sublessees to be evicted, either actually or constructively, from the Premises, and shall, under no circumstances, entitle Lessee, its Sublessees or others claiming under or through Lessee or any Sublessee, to claim or recover incidental or consequential damages from Lessor on account of such activities.
Notwithstanding the foregoing, such actions shall be undertaken by Lessor with reasonable prior notice to Lessee and shall be limited in duration and scope so as to reasonably minimize to the extent practicable any interference with the possession and use of the Premises by Lessee and its Sublessees. In addition, Lessor shall conduct such actions at Lessor’s sole cost and expense, and Lessor shall then be responsible for the maintenance, repair, and operation of any improvements associated with such activities at Lessor’s sole cost and expense.
3. LEASE TERM.
Lessee shall lease the Premises from Lessor and Lessor shall lease the Premises to Lessee for a term extending from the Commencement Date of this Lease (the date set forth in the first paragraph hereof) until April 16, 2082 (the “Term”), unless sooner terminated as provided for herein.
4 4. RENT.
4.1 Net Lease. It is the intent of the parties hereto that the Rent provided herein shall be absolutely net to Lessor and that Lessee shall pay all costs, taxes, charges, and expenses of every kind and nature against the Premises which may arise or become due during the Term, and which, except as otherwise provided in this Lease and any other agreement entered into in connection with this Lease, and except to the extent arising out of a breach of this Lease by Lessor or arising out of the negligence or willful misconduct by Lessor or its agents, employees, or contractors, and except for execution hereof, would or could have been payable by Lessor.
4.2 Rent for Premises. For and in consideration of Lessor entering into this Lease, Lessee covenants and agrees to pay to Lessor the amount of Minimum Rent and Percentage Rent (collectively, “Rent”) per Lease Year (as defined in Section 4.2(c) below) set forth below. (a) Minimum Rent. For the first five Lease Years after the Commencement Date, Lessee shall pay to Lessor Five Thousand Dollars ($5,000) per month (the “Minimum Rent”), which amount shall be due and payable in arrears on the first business day of each month during the term of this Lease.
(b) Adjustment of Minimum Rent. For each Lease Year during the Term after the fifth Lease Year, Lessee shall pay to Lessor Minimum Rent in the amount determined as follows. Upon the fifth (5th) anniversary of the Commencement Date and every fifth (5th) anniversary of the Commencement Date thereafter (each an “Adjustment Date”), the Minimum Rent shall be established at an amount equal to seventy-five percent (75%) of the average monthly total of Minimum Rent and Percentage Rent payable during the previous five (5) year period. For example, if the Minimum Rent payable during the first five Lease Years is $5,000 per month (for a total of $300,000), and the average Percentage Rent payable during the first five Lease Years is $3,000 per month (for a total of $180,000), then the new Minimum Rent for Lease Years 6 to 10 would be $6,000 per month, calculated as follows: $300,000 + $180,000 ($480,000 total Rent paid), divided by 5 ($96,000 average Rent paid per year), multiplied by .75 ($72,000 new annual Minimum Rent), divided by 12 ($6,000 new monthly Minimum Rent). (c) Lease Year Defined. The term “Lease Year” shall mean each consecutive period of twelve (12) full calendar months following the Commencement Date through the expiration of the Term.
(d) Percentage Rent. In addition to Minimum Rent, Lessee shall pay to Lessor percentage rent (“Percentage Rent”) calculated and payable in the manner described below in this Section 4.1(d).
i. Within the time and manner set forth below in this Section 4.1(d), Lessee shall pay to Lessor on a monthly basis during the Term a sum equal to the total of the following percentages of Gross Receipts for such previous month, less the amount of the installment of Minimum Rent paid for such previous month:
5 (1) Twenty-Seven Percent (27%) of Gross Receipts and/or other fees for the rental or use of boat slips, anchorage, mooring, dockside storage space, and other water-side facilities and services ancillary thereto as are generally provided in common to users thereof, including Gross Receipts obtained from persons who live on their boats;
(2) Ten Percent (10%) of Gross Receipts from the land-side use of lockers, dinghy racks, dry storage, or other similar facilities; (3) Ten Percent (10%) of Gross Receipts from boat launching and retrieving services;
(4) Five Percent (5%) of Gross Receipts from Minor Marine Services (as defined in the Use and Operating Plan referred to in Section 6.1 below); (5) Fifteen Percent (15%) of Gross Receipts from parking services or rental of parking spaces;
(6) Six Percent (6%) of Gross Receipts from rental of recreation equipment, including without limitation personal watercraft, bicycles, electric bicycles, skates, motor scooters, or similar type equipment;
(7) Ten Percent (10%) of Gross Receipts from rental of office space; (8) Ten Percent (10%) of Gross Receipts from rent and/or fees paid to Lessee by yacht/boat brokers for new and used yacht/boat sales;
(9) Ten Percent (10%) of Gross Receipts from rent and/or fees paid to Lessee by insurance brokers;
(10) Ten Percent (10%) of Gross Receipts from boat rentals and charters; (11) Seven and One-Half Percent (7.5%) of Gross Receipts from sailing and other lessons;
(12) Seven Percent (7%) of Gross Receipts from boat and breakfast operations, including management fees;
(13) Ten Percent (10%) of yacht club membership dues;
(14) One Percent (1%) of Gross Receipts from food and beverage sales (except for bar sales as provided in paragraph 15 below);
(15) Five Percent (5%) of Gross Receipts from bar sales; (16) Five Percent (5%) of Gross Receipts from general retail sales; 6 (17) Twenty Five Percent (25%) of Gross Receipts from any commission or other compensation paid to Lessee for the right to install or operate vending/laundry machines;
(18) Five Percent (5%) of Gross Receipts from vending machines owned, leased or rented by Lessee or sublessees of Lessee;
(19) Ten Percent (10%) of Gross Receipts from a special event venue; and (20) Ten Percent (10%) of Gross Receipts from any and all activities, operations, and enterprises undertaken under the terms of this Lease and not otherwise addressed within the foregoing provisions.
ii. All monthly payments of Percentage Rent shall be paid to Lessor on or before forty-five (45) days after the last day of the applicable month. All monthly payments of Percentage Rent shall be subject to year-end reconciliation as provided in Section 4.1(d)(v) below. iii. In the event Lessee is delinquent for a period of ten (10) days or more in paying Lessor any Percentage Rent, Lessee shall pay to Lessor (a) interest thereon at the rate of ten percent (10%) per annum on the delinquent amount per month from the date such sum was due and payable until paid, and (b) a late charge equal to five percent (5%) of the amount of the delinquent payment.
iv. Within forty-five (45) days after the close of each calendar month of the Term of this Lease, Lessee shall deliver to Lessor, in a form reasonably satisfactory to Lessor, an accounting of its Gross Receipts during the preceding month showing the breakdown of the Gross Receipts for each of the percentage categories set forth in subsection i. above and showing the calculation the Percentage Rent due for such month. v. Within one hundred twenty (120) days after the last day of the applicable Lease Year, Lessee shall calculate and report to City (i) the Percentage Rent payable for such Lease Year (i.e., calculated based on the applicable percentages of the total Gross Receipts for such Lease Year, less the total Minimum Rent paid by Lessee for such Lease Year) and (ii) the difference, if any, between the Percentage Rent previously paid by Lessee for such Lease Year calculated on a monthly basis. In the event that the Percentage Rent payable for such Lease Year as so calculated on an annual basis is less than the Percentage Rent previously paid by Lessee for such Lease Year as calculated on a monthly basis, then Lessee shall be entitled to credit such overpayment toward the Minimum Rent next due following final determination that such overpayment has occurred.
4.2 Gross Receipts Defined. The term “Gross Receipts” shall mean all fees, charges, sales and commissions collected by Lessee from any business, use or operation transacted on the Premises (or any part thereof), except as otherwise set forth below. Notwithstanding the foregoing, Gross Receipts shall not include the following: (i) any sales, uses, excise, occupancy or other taxes collected by or through Lessee in connection with the sale of goods or provision of services; (ii) amounts received by Lessee in reimbursement of utilities or other operating expenses from Sublessees and Slip Renters; (iii) amounts received as security deposits; (iv) bad debt which is 7 determined to be uncollectible and has been written off on income tax filings; (v) any refunds, rebates, discounts and credits of a similar nature that are given, paid or returned with respect amounts collected (it being understood that the same will be deducted from the Gross Receipts for the period in which such collections were made); (vi) proceeds from insurance for loss, damage or injury or other recovery for any claims for loss of or damage to Lessee’s property (including casualty and condemnation); and (vii) proceeds from the disposition of Lessee’s trade fixtures or capital assets.
4.3 Maintenance of Records.
(a) Lessee shall at all times keep accurate and proper books, records and accounts required to determine Percentage Rent ("Records"). (b) Lessee shall keep all of its Records related to this Lease at its office. Subject to the time limitations set forth in Section 4.5 below, Lessor may examine and audit the Records at any and all reasonable business times subject to reasonable prior notice using an auditor who is a qualified independent certified public accountant or real estate consultant, in either case, who is experienced in auditing recreational vessel marinas, and who is not compensated in whole or in part on a contingency fee basis. Lessor and its auditors may not disclose publicly any information, data and documents made available to Lessor in connection with the exercise of its right to examine and audit such Records, unless required under applicable law and after providing notice to Lessee as set forth below. In no event shall any information relating to the Sublessees or Slip Renters (as such terms are defined in Section 14.2 below) be publicly disclosed, except as required by applicable law and after providing notice to Lessee as set forth below. All Records, including any sales tax reports that Lessee and its Sublessees may be required to furnish to any governmental agency, shall be open to the inspection of and copying (at Lessor’s sole cost and expense) by Lessor, Lessor’s auditor, or other authorized representative or agent of Lessor, who is a qualified independent certified public accountant or real estate consultant, in either case, who is experienced in auditing major mixed use projects, and who is not compensated in whole or in part on a contingency fee basis, at all reasonable times during business hours subject to reasonable prior notice. Lessor shall use commercially reasonable efforts not to disrupt Lessee or the Sublessees and to minimize interference with the day-to-day operation of Lessor and/or the Premises in exercising its rights hereunder.
4.4 Annual Revenue Statements by Lessee, Verification of Records, Computation, Payment of Rent.
(a) Within one hundred twenty (120) calendar days after the end of each Lease Year during the Lease Term, Lessee shall submit to Lessor an “Annual Revenue Statement” which shall include a breakdown, in line item detail of Lessee's calculation of Rent payable for such Lease Year. Each Annual Revenue Statement shall be reviewed by an independent certified public accountant or by an authorized officer of Lessee, and shall contain an expressed written opinion of such certified public accountant or officer that such Annual Revenue Statements presents on the cash basis of accounting the revenues (including, without limitation, Gross Receipts) fairly and in accordance with generally accepted accounting principles for the recreational marina industry consistently followed. Lessee shall also certify to Lessor that each Annual Revenue Statement is accurate and consistent in all material respects with its Records. Lessor acknowledges and agrees 8 that the officer executing the certificate shall have no personal liability whatsoever arising from or related to the certificate, except for fraud or intentional misrepresentation. (b) Lessor may audit or perform an examination of any Annual Revenue Statement and supporting documentation utilized in the creation thereof at any time, and Lessee shall provide reasonable access to all of its books and records as provided herein, using an auditor who is a qualified independent certified public accountant or real estate consultant, in either case, who is experienced in auditing major mixed use projects, and who is not compensated in whole or in part on a contingency fee ("Qualified Auditor"), subject to reasonable prior notice. Records must be supported by reasonable source documents.
(c) If any audit or examination conducted by Lessor discloses that the payable Rent reported by Lessee for any Lease Year was understated by more than the greater of (i) $50,000, or (ii) three percent (3%), unless Lessee disagrees with the results of such audit, Lessee shall promptly pay to Lessor the actual reasonable costs incurred by Lessor for such audit or examination (the "Audit Charge") in addition to any amounts due as Rent; otherwise Lessor shall bear all costs of such audit or examination. If any audit or examination conducted by Lessor discloses that the payable Rent reported and paid by Lessee for any Lease Year was overstated, Lessee shall receive a credit in such amount toward the Rent next due under this Lease, or if this Lease has terminated Lessor shall promptly refund such amount to Lessee. (d) Lessor’s billings for the Audit Charge shall be sufficiently detailed with reasonable back up information such as supporting paid invoices, so that Lessee may determine the fees for the various participants in the audit or examination for whom Lessee is required to pay. Prior to Lessee’s obligation to pay any Audit Charge, Lessor shall have provided Lessee with the audit or examination report which is the basis for such Audit Charge, access to documents supporting such audit or examination, and a reasonable opportunity to review and discuss the audit or examination with Lessor and the auditor. If Lessee disagrees with the results of such audit, Lessee may propose two (2) alternative Qualified Auditors, Lessor shall choose one of such proposed Qualified Auditors to review the audit, and the decision of such alternative Qualified Auditor shall be binding and supersede the conclusion of the initial Qualified Auditor.
4.5 Acceptance Not Waiver; Retention of Records.
(a) Lessor’s acceptance of any money paid by Lessee under this Lease, whether shown by any Annual Revenue Statement furnished by Lessee or otherwise specified in this Lease, shall not constitute an admission of the accuracy or the sufficiency of the amount of such payment.
Lessor may, at any time within three (3) years (but not after such three (3) period has expired) after the receipt of any such payment, question the sufficiency of the amount thereof and/or the accuracy of any underlying Annual Financial Statement furnished by Lessee. (b) Lessee shall retain, for five (5) years after submission to Lessor of any such Annual Revenue Statement, all of Lessee’s Records relating to the information shown by any such Annual Revenue Statement, and shall make them available to Lessor for examination to the extent as provided above during that period. Lessee shall use commercially reasonable efforts to require that all its Sublessees keep, maintain and retain Records of their business activities conducted within the Premises for such five (5) year period, which Records shall be made available to Lessor, 9 Lessor’s auditor, or other authorized representative or agent of Lessor for inspection and copying (at Lessor’s expense) as provided above. Lessor’s request for access to Sublessees' records may not be made directly by Lessor to the Sublessee. Notwithstanding the foregoing, Lessee shall not be responsible for the records of any Sublessee. Lessor covenants to keep and to cause its auditor(s) to keep the results of such audit strictly confidential except to the extent disclosure is legally required or if discoverable in arbitration or litigation between the parties. If Lessor receives a request for such information it shall immediately notify Lessee of such request and deliver to Lessee copies of all correspondence received by Lessor relating to such request, and afford Lessee an opportunity to contest such request.
5. REDEVELOPMENT OF THE PREMISES.
5.1 Construction and Redevelopment of Marina Redevelopment Project. Lessee shall construct and redevelop the Improvements (the “Marina Redevelopment Project”) in accordance with the Scope of Development which is attached hereto as Exhibit “C” and incorporated herein, within the times set forth in the Schedule of Performance which is attached hereto as Exhibit “D” and incorporated herein, and in accordance with all building and other permits that may be issued in connection therewith. Lessee shall submit all construction plans, and commence and complete all phases of construction and redevelopment of the Marina Redevelopment Project, and shall satisfy all other obligations and conditions of this Lease, within the times established therefor in the Schedule of Performance and the text of this Lease, subject to Force Majeure Events. Once construction and redevelopment of each applicable phase of the Marina Redevelopment Project is commenced, it shall continuously and diligently be pursued to completion and shall not be abandoned for more than thirty (30) days. During the course of construction and prior to issuance of the final Certificate of Occupancy for the Marina Redevelopment Project, Lessee shall provide monthly reports to Lessor of the progress of construction. The Marina Redevelopment Project shall include all of the Improvements contained in the approved construction plans and drawings, including without limitation all walkways, landscaping and parking areas. The construction and redevelopment of the Marina Redevelopment Project shall include compliance with any mitigation monitoring plan adopted by the City in accordance with CEQA by the City for the project. The cost of planning, designing, developing, constructing and redeveloping the Marina Redevelopment Project shall be borne solely by Lessee.
5.2 Construction Management Plan. Prior to the commencement of construction of the Marina Redevelopment Project, Lessee shall submit to Lessor and receive Lessor’s approval, which approval shall not be unreasonably withheld, of a construction management plan (the “Construction Management Plan”), which addresses the phasing of construction, relocation of slip tenants and users, construction traffic and delivery of building materials, noise issues, and other related issues. The Construction Management Plan shall include a provision for personnel responsible for receiving and addressing noise and traffic inquiries and complaints from the community.
5.3 Lessor’s Cooperation in Construction of the Marina Redevelopment Project.
Lessor shall cooperate with and assist Lessee, to the extent reasonably requested by Lessee, in Lessee’s efforts to obtain the appropriate governmental approvals, consents, permits or variances which may be required in connection with the undertaking and performance of the construction and redevelopment of the Marina Redevelopment Project. Such cooperative efforts may include 10 Lessor’s joinder in any application for such approval, consent, permit or variance, where joinder therein by Lessor is required or helpful; provided, however, that Lessee shall reimburse Lessor for Lessor’s actual and reasonable third party out-of-pocket costs incurred in connection with such joinder or cooperative efforts within thirty (30) days after Lessor delivers an itemized statement of costs to Lessee. Notwithstanding the foregoing, Lessee and Lessor acknowledge that the approvals given by Lessor under this Lease in no way release Lessee from obtaining, at Lessee’s expense, all permits, licenses and other approvals required by law for the construction of the Marina Redevelopment Project on the Property and operation and other use of such Improvements on the Property; and that Lessor’s duty to cooperate and Lessor’s approvals under this Lease do not in any way modify or limit the exercise of Lessor’s governmental functions or decisions as distinct from its proprietary functions as the landlord pursuant to this Lease.
5.4 Construction Contract. Lessee shall enter into contracts with one or more general contractors for the demolition, grading, construction and redevelopment work for the Marina Redevelopment Project with a general contractor(s) reasonably acceptable to the City, which general contractor(s) shall be duly licensed in the State and shall have significant experience in organizing and contracting recreational vessel marina redevelopment projects of the type and scale similar to the Scope of Development.
5.5 Construction Requirements. No redevelopment or construction of the Marina Redevelopment Project on the Property shall be undertaken until Lessee shall have procured and paid for all required permits, licenses and authorizations. All changes and alterations shall be made in a good and workmanlike manner and in compliance with all applicable building and zoning codes and other legal requirements. Upon completion of construction and redevelopment of the Marina Redevelopment Project, Lessee shall furnish Lessor with a certificate of substantial completion executed by the architect, general contractor or construction manager for the Marina Redevelopment Project, and a complete set of “as built” plans for the Marina Redevelopment Project and Improvements. Lessee shall thereafter furnish Lessor with copies of the updated plans showing all material changes and modifications to the Improvements.
5.6 Compliance with Laws. Lessee shall carry out the design, construction, and redevelopment of the Marina Redevelopment Project and the operation of the Improvements in conformity with all applicable laws, all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the ADA, Government Code Section 4450, et seq., Government Code Section 11135, et seq., the Unruh Civil Rights Act, Civil Code Section 51, et seq., and the California Building Standards Code, Health and Safety Code Section 18900, et seq.
If the Scope of Development provides for the existing building located on Parcel B of the Property to remain in the Marina Redevelopment Project, Lessee shall ensure that such existing building will meet all of the foregoing standards, including current code requirements, notwithstanding that such existing building may not be required to comply with such standards pursuant to applicable law. The design, construction, and redevelopment of the Marina Redevelopment Project and the operation of the Improvements shall be in compliance with any mitigation measures adopted in accordance with CEQA for the project. This Lease does not provide Lessee any vested rights to construct or redevelop the Marina Redevelopment Project and the Improvements in accordance with the existing policies, rules and regulations of the City, or to construct or redevelop the Marina 11 Redevelopment Project subject only to the existing conditions of approval which may have been previously approved by the City, except as Lessee may already have obtained vested rights to construct and redevelop the Marina Redevelopment Project in accordance with either a Development Agreement between City and Lessee, a vesting tentative map, a valid building permit or other valid land use entitlements establishing vested rights.
5.7 Prevailing Wages. If and to the extent required by applicable federal and state laws, rules and regulations, Lessee and its contractors and subcontractors shall pay prevailing wages for all construction, alteration, demolition, installation, and repair work performed with respect to the construction and redevelopment of the Marina Redevelopment Project as required herein and described in the Scope of Development, in compliance with Labor Code Section 1720, et seq., any applicable federal labor laws and standards, and implementing regulations, and perform all other applicable obligations, including the employment of apprentices in compliance with Labor Code Section 1770, et seq., keeping of all records required pursuant to Labor Code Section 1776, complying with the maximum hours requirements of Labor Code Sections 1810 through 1815, and fulfilling all duties under the Civil Code or any other provision of law pertaining to providing, obtaining and maintaining all bonds to secure the payment of wages to workers required to be paid prevailing wages, and compliance with all regulations and statutory requirements pertaining thereto, all as may be amended from time to time (the “Prevailing Wage Law”). Lessee shall periodically, upon request of Lessor, certify to Lessor that, to its knowledge, it is in compliance with the requirements of this paragraph. In connection with the foregoing, the parties acknowledge that nothing contained in this Lease is intended to involve work that is “paid for in whole or in part out of public funds” within the meaning of California Labor Code Section 1720(b) that would result in the Marina Redevelopment Project to be constructed by Lessee on the Premises as contemplated by this Lease being classified as a “public work” under said Section.
The parties believe that the construction of such improvements are not considered to be a public work under California law to the extent that the Premises is being leased for a consideration not less than the fair market value, and because they are not aware of any other facts or circumstances which would cause the construction of such improvements to be considered a public work under California law. Notwithstanding the foregoing, however, Lessor makes no representations to Lessee regarding the applicability or non-applicability of the Prevailing Wage Law to the Marina Redevelopment Project. Lessee shall take whatever actions it determines to be necessary to form its own conclusion regarding the applicability or non-applicability of the Prevailing Wage Law to the Marina Redevelopment Project, which may include, for example, obtaining an appraisal of the fair rental rate of the Premises from a qualified appraiser. In the event that Lessee becomes aware of any facts or circumstances which Lessee believes or determines will give rise to, or may give rise to, the applicability of the Prevailing Wage Law to the work and construction of such improvements, Lessee shall promptly notify Lessor thereof, and upon Lessee’s request, Lessor agrees to meet and confer with Lessee to amend this Lease in any reasonable respect to effectuate the parties’ mutual intention as to the inapplicability of the Prevailing Wage Law to the work and construction of the Marina Redevelopment Project and to take such further appropriate action to as may be reasonable in light of the circumstances.
5.8 Indemnity. Lessee shall indemnify, defend (with counsel reasonably satisfactory to Lessor) and hold Lessor and its respective elected and appointed officers, employees, agents, consultants, and contractors (collectively. the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), 12 claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) which directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages or the requirement of competitive bidding in the construction and redevelopment of the Marina Redevelopment Project, the failure by Lessee to comply with applicable any state or federal labor laws, regulations or standards in connection with this Lease, including but not limited to the Prevailing Wage Laws, or any act or omission of Lessee related to this Lease with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to such Claims.
It is further agreed that Lessor does not and shall not waive any rights against Lessee which it may have by reason of this indemnity and hold harmless agreement because of the acceptance by Lessor, or Lessee’s deposit with Lessor of any of the insurance policies described in this Lease.
The provisions of this Section shall survive the expiration or earlier termination of this Lease and the issuance of a Certificate of Completion for the Marina Redevelopment Project. Lessee’s indemnification obligations under this Section shall not apply to any Claim which arises as a result of an Indemnitee’s gross negligence or willful misconduct.
5.9 Performance and Payment Bonds. Prior to commencement of any construction and redevelopment work on the Marina Redevelopment Project, Lessee shall cause its general contractor to deliver to the Lessor copies of payment bond(s) and performance bond(s) issued by a reputable insurance company licensed to do business in California, each in a penal sum of not less than one hundred percent (100%) of the scheduled cost of construction of the Marina Redevelopment Project. The bonds shall name the Lessor as obligee and shall be in a form acceptable to the City Attorney. In lieu of such performance and payment bonds, subject to City Attorney’s approval of the form and substance thereof, Lessee may submit evidence satisfactory to the Lessor of contractor’s ability to commence and complete construction of the Marina Redevelopment Project in the form of subguard insurance, an irrevocable letter of credit, pledge of cash deposit, certificate of deposit, or other marketable securities held by a broker or other financial institution, with signature authority of the Lessor required for any withdrawal, or a completion guaranty in a form and from a guarantor acceptable to Lessor. Such evidence must be submitted to Lessor in approvable form in sufficient time to allow for review and approval prior to the scheduled construction start date.
5.10 Force Majeure. Performance by either party hereunder shall not be deemed to be in default, and the time within which a party shall be required to perform any act under this Lease shall be extended by a period of time equal to the number of days during which performance of such act is delayed unavoidably and beyond the reasonable control of the Party seeking the delay by strikes, lock-outs and other labor difficulties, Acts of God, inclement weather, failure or inability to secure materials or labor by reason of priority or similar regulations or order of any governmental or regulatory body, delays of governmental agencies (except that delays of City shall not excuse delay of performance by Lessor), changes in local, state or federal laws or regulations, any development moratorium or any action of other public agencies that regulate land use, development or the provision of services that prevents, prohibits or delays construction of the Marina Redevelopment Project, enemy action, civil disturbances, wars, terrorist acts, pestilence or epidemics, fire, earthquakes, floods, storm surges, unavoidable casualties, litigation involving this Lease, or bankruptcy, insolvency or defaults of Marina Redevelopment Project lenders or equity 13 investors, or a governmentally declared emergency or disaster (“Force Majeure Events”). Any extension of time for Force Majeure Events shall be for a reasonable period, not to exceed nine (9) months, and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Notwithstanding any provision of this Lease to the contrary, unless caused by any of the Force Majeure Events described above, delays due to inability to obtain financing, other general economic conditions, adverse market conditions, adverse interest rates, and/or the lack of funds or financing to complete the Marina Redevelopment Project, shall not constitute Force Majeure Events; provided that Lessor may approve extensions of time for such reasons upon the request of Lessee, in Lessor’s sole discretion. Such extension(s) of time shall not constitute an Event of Default and shall occur at the request of any Party.
6. USE OF IMPROVEMENTS.
6.1 Use and Operating Plan. The Premises shall be used for the operation of a recreational vessel marina and related legal uses. So long as the Premises are being operated, Lessee shall use and operate the Improvements on the Premises in accordance with the Use and Operating Plan which is attached hereto as Exhibit "E" and incorporated herein. Notwithstanding anything to the contrary set forth in this Lease or the Use and Operating Plan, Lessee and Lessor acknowledge that the optimal uses of the King Harbor area may change over the lifetime of the project, and therefore the parties shall periodically review and make mutually acceptable changes and updates to the Use and Operating Plan as proposed by Lessee and approved by Lessor, such approval not to be unreasonably withheld, conditioned or delayed. Lessee covenants and agrees to use commercially reasonable efforts to cause its Sublessees to use the Improvements only for the purposes set forth in Section 6 hereof, and no other uses without the prior approval of the Lessor, which approval may be given or withheld as provided therein. The permitted uses for the Premises and the Improvements are non-exclusive to Lessee and Lessor reserves the right to conduct or to permit other lessees to conduct or permit the same or similar uses on property leased from Lessor in the Redondo Beach waterfront area, except for the prohibited uses set forth in the Use and Operating Plan.
6.2 Only Lawful Uses Permitted. Lessee and its Sublessees and other permitted users of the Premises and Improvements shall not use the Premises or the Improvements for any purpose that is in violation of any law, ordinance or regulation of any federal, state, county or local governmental agency, body or entity, including without limitation the City Municipal Code, the City Charter, and state and federal marine laws. Furthermore, Lessee and its Sublessees and other permitted users of the Premises and Improvements shall not maintain or commit any nuisance or unlawful conduct (as now or hereafter defined by any applicable statutory or decisional law) on the Premises or the Improvements, or any part thereof. Lessee shall use commercially reasonable efforts to cause the Sublessees and other permitted users of the Premises and Improvements to comply with the foregoing requirements. Notwithstanding any provision contained in this Lease to the contrary, no portion of the Premises and the Improvements shall be used for any purpose that will materially and adversely interfere with commerce, navigation or fishery, or be inconsistent in any material manner with any trusts under which the Premises or adjacent tidelands are now or may hereafter be held by Lessor.
14 6.3 Active Public Use; Operating Covenant. The objectives of this Lease are the continuous use of the Premises and the Improvements by and for the benefit of the public, along with the generation of revenue therefrom. Accordingly, Lessee agrees and covenants that it shall open the Improvements for business in accordance with the Schedule of Performance, and shall use good faith diligent efforts to operate the Premises and the Improvements continuously during the entire Term of this Lease in accordance with the requirements of this Section 6 (except to the extent that Lessee is prevented from doing so due to events of force majeure or due to temporary interruption for alterations, maintenance, repair, remodeling and/or renovation of the Premises, including in connection with an assignment or sublease, casualty, condemnation, lease vacancies, tenant defaults, or other circumstance beyond Lessee’s reasonable control). In light of these objectives, Lessee shall use commercially reasonable efforts to maximize the use of the Premises and the Improvements in compliance with the required hours of operation as set forth in the Use and Operating Plan, so that the Lessor may obtain maximum rental and tax revenue therefrom.
Notwithstanding the foregoing, nothing contained in this Lease shall be construed, interpreted, or otherwise read to prevent Lessee from closing its business on the Premises, subject to Lessee's requirement to maintain the Premises, whether its business is opened or closed, and Lessee makes no representation or warranty whatsoever with respect to the amount, if any, of Percentage Rent payable under this Lease.
7. UTILITIES AND TAXES.
7.1 Utilities. Lessee shall pay, or cause to be paid, all charges for water, gas, electricity, telephone, sewer, garbage collection, and other utilities furnished to the Premises and the Improvements and all hookup or similar charges or assessments for utilities levied against the Premises and the Improvements for any period included within the Term.
7.2 Real Estate Taxes.
(a) Pursuant to Revenue & Taxation Code Section 107.6, Lessor hereby advises Lessee that the leasehold interest in the Premises conveyed to Lessee by this Lease will be subject to property taxation, and that it is Lessee’s obligation under this Lease to pay or cause to be paid all of such property taxes levied on Lessee’s interests in the Premises. Lessee acknowledges that it understands that property taxes will be levied on the Premises despite the Lessor’s ownership of fee title to the Premises.
(b) Lessee covenants and agrees to pay or cause to be paid before delinquency all real estate taxes, assessments and liens of every kind and nature upon Lessee’s leasehold interest in the Premises and the Improvements. “Real estate taxes” shall mean all real estate taxes, assessments for improvements to the Premises, public agency water and sewer rates and charges, or any other assessments or taxes, which shall be levied against Lessee’s leasehold estate in the Premises or the Improvements, or any interest therein, and which become a lien thereon and accrue during the Term. Lessee shall pay any business license fees imposed upon Lessee in connection with the operation of the Improvements.
(c) Lessee shall have the right to contest the amount or validity of any real estate taxes and/or liens, in whole or in part, by appropriate administrative and legal proceedings, without any costs or expense to Lessor. Lessee may not apply for or receive any exemption from 15 the payment of property taxes or assessments on any interest in or to the Premises without the prior approval of the City, provided, however, Lessee shall have the right to apply for any reduction in the assessed value of the Premises without the prior approval of the City. The parties shall use reasonable efforts to see that all communications from governmental authorities respecting real estate taxes are sent directly by such authorities to Lessee. Nothing contained in this Lease requires Lessee to pay any franchise, estate, inheritance, succession, capital levy, or transfer tax levied or otherwise imposed upon Lessor, or any income, excess profits, or revenue tax, business license fees, gift taxes, or any tax or assessment levied or otherwise imposed against Lessor, or Lessor’s ownership or leasing of the Premises, or any other tax, assessment, charge, or levy imposed or levied against Lessor on the rent payable by Lessee under this Lease. If by law any real estate taxes are payable, or may at the option of the taxpayer be paid, in installments, Lessee may, whether or not interest shall accrue on the unpaid balance, pay the same, and any accrued interest on any unpaid balance, in installments as each installment becomes due and payable, but in any event before any fine, penalty, interest, or cost may be added for nonpayment of any installment or interest. With respect to any assessments for public improvements or any similar assessments, Lessee may request amortization of such assessments over the longest period permitted by governmental authority so long as such does not exceed the Term. Lessee shall be obligated to pay off any unpaid balance of any such installment payment plan upon the termination of this Lease.
7.3 Personal Property. Lessee covenants and agrees to pay or cause to be paid before delinquency all personal property taxes, assessments and liens of every kind and nature upon all personal property as may be from time to time situated within the Premises and the Improvements.
8. OWNERSHIP OF IMPROVEMENTS, FIXTURES AND FURNISHINGS.
All Improvements (including those improvements owned by Lessee or its predecessor-ininterest during the term of the prior lease of the Premises that exist as of the date of this Lease and those improvements constructed by Lessee during the term of this Lease) shall, during the Term, be and remain the property of Lessee, except that the seawalls (also known as quay walls), seawall railing, all sidewalks adjacent to seawalls, revetments and drainage and outfall facilities from off-Premises sources within the Premises shall remain the property of Lessor during the Term. In addition, the parties acknowledge that there are certain improvements owned by Lessor which may be located partially or wholly off-Premises that are integral to the operation of the Premises (including the sewer pump station serving the Premises, utility feeds to parking lot lighting and navigational access to the Premises) which shall remain the property of Lessor during the Term. Notwithstanding the foregoing, however, Lessee shall have no right to intentionally commit material waste of the Improvements, or to destroy, demolish or remove the Improvements except as otherwise permitted pursuant to this Lease; and provided further that Lessor’s rights and powers and Lessee’s rights and powers with respect to the Improvements are subject to the terms and limitations of this Lease.
9. LIENS.
Lessee shall not suffer or permit any liens to be enforced against the Lessor’s fee simple estate as to the Premises, to Lessor’s fee simple estate in reversion of the Improvements, nor against Lessee’s leasehold interest therein by reason of work, labor, services or materials 16 supplied or claimed to have been supplied to Lessee or anyone holding the Premises and the Improvements, or any part thereof, through or under Lessee. Lessee agrees to defend, indemnify, and hold Lessor and its officers, officials, employees, agents, and representatives, harmless against such liens. If any such lien shall at any time be filed against the Premises or the Improvements, Lessee shall, within sixty (60) days after notice to Lessee of the filing thereof, cause the same to be discharged of record; provided, however, that Lessee shall have the right to contest the amount or validity, in whole or in part, of any such lien by appropriate proceedings but in such event, Lessee shall notify Lessor and promptly bond such lien in the manner authorized by law with a responsible surety company qualified to do business in the State of California or provide other security reasonably acceptable to Lessor. Lessee shall prosecute such proceedings with due diligence. Nothing in this Lease shall be deemed to be, nor shall be construed in any way to constitute, the consent or request of Lessor, express or implied, by inference or otherwise, to any person or entity for the performance of any labor or the furnishing of any materials for any construction, rebuilding, alteration or repair of or to the Premises, the Improvements, or any part thereof. Prior to commencement of construction of the Marina Redevelopment Project or any other improvements on the Premises, Lessee shall give Lessor not less than thirty (30) days advance notice in writing of intention to begin said activity in order that nonresponsibility notices may be posted and recorded as provided by State and local laws.
Lessor shall have the right at all reasonable times and places after at least ten (10) days advance notice to post, and as appropriate to keep posted, any notices on the Premises which Lessor may deem reasonably necessary for the protection of Lessor's interest in the Premises from mechanic's liens or other claims. Lessee shall give Lessor at least ten (10) days prior written notice of the commencement of any work to be done upon the Premises under this Section, in order to enable Lessor to post such notices. Notwithstanding the foregoing, Lessee may postpone its obligation to discharge a lien arising out of work done by or for Lessee or by or for anyone holding the Premises and the Improvements, or any part thereof, through or under Lessee, if Lessee provides Lessor or any prospective purchaser of Lessor’s fee interest with title insurance that insures Lessor’s title and either: (i) omits the lien, or (ii) insures against collection of the debt underlying the lien, and Lessee shall not be in default of its obligations under this Section 9 during any such period of postponement, provided such title insurance is provided within the aforesaid sixty (60) day period, at no cost or expense to Lessor.
10. MAINTENANCE AND REPAIR.
10.1 Lessee Responsibilities. Lessee agrees to assume responsibility for the management, leasing, operation and maintenance of the Improvements and the Premises throughout the Term without expense to Lessor, except for those “Lessor Maintenance Items” (as defined in Section 10.2(a) of this Lease) that are Lessor’s responsibility to maintain under Section
10.2(a) of this Lease, and to perform all day-to-day maintenance, repairs and replacements reasonably necessary to maintain and preserve the Improvements and the Premises, including without limitation all docks, slips, piers, pilings, gangways, parking areas, landscaping, interiors and exteriors of all restrooms and other buildings, all exterior facades, all sidewalks, and all exterior areas, in good repair, in a neat, clean, safe, and orderly condition, in accordance with the standard of maintenance of prudent owners/landlords of high quality coastal recreational marinas within Southern California, in a safe and sanitary fashion and in compliance with all applicable laws, except for the Lessor Maintenance Items that are Lessor’s responsibility to maintain under Section 10.2(a) of this Lease. Lessee shall use commercially reasonable efforts to cause permittees 17 who keep vessels on the Premises to keep their vessel in a clean, well maintained and seaworthy condition at all times; if such vessel is equipped with an engine or motor, it must be operable and capable of producing a sufficient way to make the vessel maneuverable; if such vessel is a sailboat without an engine, it must be equipped with sails, and her standing rigging and running seaworthy.
Such vessels must be seaworthy, including: hull, keel, decking, cabin and mast structurally sound and generally free from dry-rot or other similar defect or deficiency; it shall also be weatherproof, such that adverse wind and weather does not pose an unreasonable risk of flooding or damage; it also shall be watertight, such that frequent or constant pumping is not required to keep the vessel afloat; it shall have an operable electrical system, when the vessel is so equipped, such that the electrical system does not present an unreasonable risk of injury or fire and such that any installed electric pumps can be employed to prevent flooding; and it must be able to be safely towed from its berth in an emergency without risk of sinking or damage or capsize. Lessee agrees to provide administrative services, supplies, contract services, maintenance, maintenance reserves, and management which are reasonably necessary for the maintenance of the Improvements. Lessee agrees that, except as otherwise provided in this Lease, Lessor shall not be required to perform any maintenance, repairs or services or to assume any expense in connection with the Improvements and the Premises, unless such maintenance, repairs or services are required as a result of the negligence or willful misconduct of Lessor, its agents, contractors, officers or employees. Lessee hereby waives all rights to make repairs or to cause any work to be performed at the expense of Lessor as may be provided for in Section 1941 and 1942 of the California Civil Code, if applicable.
Lessee shall maintain the Improvements on the Premises for which Lessee is obligated hereunder to maintain in conformity with the City Municipal Code.
10.2 Lessor's Repair of Improvements; Right of Entry.
(a) Lessor shall not be required to maintain or repair any Improvements on the Premises, except that Lessor agrees to assume full responsibility to perform, at Lessor’s cost and expense, all day-to-day repairs and replacements (including without limitation all structural repairs and replacements) reasonably necessary to maintain and preserve the Lessor Maintenance Items (as defined below), in good repair, in a neat, clean, safe and orderly condition, in accordance with the standard of maintenance for the balance of the Premises, and in compliance with all applicable law. Lessor may, after reasonable advance notice, enter upon the Premises, or any portion thereof, from time to time, solely for the purpose of inspecting an actual or reasonably and in good faith suspected breach of this Lease by Lessee that reasonably requires entry upon the Premises. In so doing, Lessor shall use reasonable efforts to minimize disruption to Lessee or its Sublessees.
Lessor shall not be liable to Lessee, or its Sublessees, or any person or entity claiming through Lessee or its Sublessees, or to the occupant of any portion of the Premises for any loss, damage or harm arising out of Lessor's exercise of the rights of entry reserved herein except to the extent the same is due to the willful misconduct or gross negligence of Lessor, its agents, contractors, officers, employees or others entering the Premises at Lessor’s invitation. Except for damages arising from the willful misconduct or gross negligence of Lessor, its agents, contractors, officers or employees, neither Lessee nor any Sublessee, or other person claiming under or through Lessee, shall be entitled to any consequential damages arising therefrom. The term “Lessor Maintenance Items” shall mean all seawalls (also known as quay walls), seawall railing, all sidewalks adjacent to seawalls, revetments, drainage and outfall facilities from off-Premises sources, maintenance dredging, the sewer pump station serving the Premises, utility feeds to parking lot lighting, and 18 navigational access to the Premises. The parties acknowledge that Lessor Maintenance Items includes any necessary alterations to such items due to sea level rise. (b) If Lessee fails to make repairs or replacements as required in this Lease and such failure has a material adverse impact in the operation of the Premises, after the expiration of any applicable notice and cure period, Lessor may once again notify Lessee of said failure in writing, which notice states in bold type as follows: "THIS NOTICE OF DEFAULT IS BEING SENT PURSUANT TO SECTION 10.2(B) OF THE LEASE, AND IF LESSEE FAILS TO CURE SUCH DEFAULT WITHIN TEN (10) BUSINESS DAYS OF ITS RECEIPT OF THIS NOTICE, OR IF LESSEE HAS NOT COMMENCED SUCH CURE WITHIN SUCH TEN (10)
BUSINESS DAY PERIOD AND DILIGENTLY PROSECUTED THE SAME TO
COMPLETION, THEN LESSOR MAY EXERCISE ITS SELF HELP RIGHTS UNDER SECTION 10.2(B) OF THE LEASE." If Lessee then fails to make the repairs or replacements or commence the repairs or replacements as provided above, within such ten (10) business day period, Lessor may make such repairs and replacements at Lessee’s expense. Lessee shall reimburse Lessor for the actual costs thereof within thirty (30) days after Lessor’s notice specifying such costs together with a written invoice therefor. Such costs may include, without limitation, the reasonably necessary cost of design, labor, material, equipment, the value of services provided by Lessor's employees in the actual performance of the repairs and replacements (but not administrative duties), and the cost of professional services such as attorneys, accountants, contractors and other consultants as may be reasonably incurred or paid by Lessor. If Lessor makes such repairs or replacements, Lessee shall indemnify and hold Lessor harmless from and against all claims, demands, loss or liability of any kind arising out of or connected in any way with such work, including, but not limited to claims by Lessee, its officers, employees, agents, Sublessees and the patrons or visitors of Lessee or its Sublessees except to the extent the same is due to the willful misconduct or gross negligence of Lessor, its agents, contractors and employees.
10.3 Limitations on Lessor's Obligation to Repair. Except as set forth in Section 10.2, Lessor shall have no duty, obligation or liability to care for or maintain the Premises. If, by any express provision of this Lease, Lessor agrees to care for or maintain the whole or any part of the Premises, such agreement on the part of Lessor shall constitute a covenant only, and no obligation or liability whatsoever shall exist on the part of Lessor to Lessee by reason thereof unless Lessor fails to commence performance of such obligation with reasonable diligence after receipt of a written notice from Lessee, specifying (a) the provisions of this Lease under which such duty is claimed to exist on the part of Lessor, and (b) the facts that require the performance of such duty.
In such event, Lessor's liability shall be limited to the costs and expenses of performing such obligation and neither Lessee nor its Sublessees, nor any person claiming under or through Lessee, shall be entitled to consequential damages arising therefrom except to the extent the same is due to the willful misconduct or gross negligence of Lessor, its agents, contractors and employees.
11. ENVIRONMENTAL MATTERS.
11.1 Definitions. For the purposes of this Lease, unless the context otherwise specifies or requires, the following terms shall have the meanings herein specified:
(a) The term “Hazardous Materials” shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the County of Los 19 Angeles, the State of California, regional governmental authority or the United States Government, including, but not limited to, any material or substance which is (i) defined as a “hazardous waste,” “extremely hazardous waste,” or “restricted hazardous waste” under Section 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)), (ii) defined as a “hazardous substance” under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (CarpenterPresley-Tanner Hazardous Substance Account Act), (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated biphenyl, (viii) listed under Article 9 or defined as “hazardous” or “extremely hazardous” pursuant to Article 11 of Title 22 of the California Code of Regulations, Division 4, Chapter 20, (ix) designated as “hazardous substances” pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317), (x) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903) or (xi) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601 et seq. “Hazardous Materials” shall not include such products in quantities as are customarily used in the construction, maintenance, rehabilitation or management of similar developments. (b) The term “Hazardous Materials Contamination” shall mean the contamination (whether presently existing or hereafter occurring) of the Improvements, facilities, soil, groundwater, air or other elements on, in or of the Premises by Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any other property as a result of Hazardous Materials at any time (whether before or after the Commencement Date of this Lease) emanating from the Premises. (c) The term “Governmental Requirements” shall mean all past, present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Premises is located, and any other state, county city, political subdivision, agency, instrumentality or other entity exercising jurisdiction over Lessor, Lessee or the Premises. (d) The term “RAP” means a Remedial Action Plan for the Remediation of the Premises, or any parcel or portion thereof, as provided in Section 11.5 hereof. (e) The term “Remediation” means the investigation, mitigation, removal, and/or remediation of Hazardous Materials on or under the Premises, or on any parcel or portion thereof, in accordance with an approved RAP.
11.2 Premises Evaluation. Lessee has had an opportunity, prior to the Commencement Date of this Lease, to engage its own environmental consultant to make such investigations of the Premises as Lessee has deemed necessary, and Lessee has approved the environmental condition of the Premises. Lessee therefore takes possession of the Premises, and its leasehold interest in the Premises and any Improvements now existing on the Premises, in their "as is" condition and with all faults, and Lessee hereby specifically waives any rights Lessee may have against Lessor 20 with regard to the condition of the Premises including, but not limited to soils, toxic or Hazardous Materials, fill material, compaction, geologic constraints and faults.
11.3 Indemnification. Upon and after the Commencement Date of this Lease, Lessee agrees to indemnify, defend and hold Lessor harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, reasonable attorneys’ fees), resulting from, arising out of, or based upon (i) the release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Premises occurring after the Commencement Date caused by Lessee or Lessee Parties or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Premises caused by Lessee or Lessee Parties arising after the Commencement Date, excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of Lessor, or its officers, employees, agents or representatives. The term “Lessee Parties” shall mean any of Lessee’s officers, employees, agents, contractors, sublessees, licensees, customers or invitees. This indemnity shall include, without limitation, any damage, liability, fine, penalty, cost or expense arising from or out of any claim, action, suit or proceeding, including injunctive, mandamus, equity or action at law, for personal injury (including sickness, disease or death), tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment caused by Lessee or Lessee Parties. Lessee’s obligations under this Section 11.3 shall survive the expiration of this Lease. For clarity and avoidance of doubt, Lessee shall have no liability or obligation under this Lease with respect to the presence of Hazardous Materials on the Premises that were not caused by Lessee or Lessee Parties, including, without limitation, the migration of Hazardous Materials on to the Premises from off-Premises sources (such as migration from tidal action, migration from adjacent oil extraction activities (e.g., Trident Oil), and migration from drainage outfalls located on the Premises from off-Premises sources).
Upon and after the Commencement Date of this Lease, Lessor agrees to indemnify, defend and hold Lessee harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, reasonable attorneys’ fees), resulting from, arising out of, or based upon (i) the release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Premises prior to the Commencement Date which was caused by Lessor or Lessor Parties, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Premises prior to the Commencement Date by Lessor or Lessor Parties, excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of Lessee, or its officers, employees, agents or representatives. The term “Lessor Parties” shall mean any of Lessor’s officers, employees, agents, contractors, lessees or licensees. This indemnity shall include, without limitation, any damage, liability, fine, penalty, cost or expense arising from or out of any claim, action, suit or proceeding, including injunctive, mandamus, equity or action at law, for personal injury (including sickness, disease or death), tangible or intangible property damage, 21 compensation for lost wages, business income, profits or other economic loss, damage to the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. Lessor’s obligations under this Section 11.3 shall survive the expiration of this Lease.
11.4 Duty to Prevent Hazardous Materials Contamination. Lessee shall take all commercially reasonable precautions to prevent the release of any Hazardous Materials into the environment in violation of Governmental Requirements by Lessee or Lessee Parties, but such precautions shall not prohibit the use of substances of kinds and in amounts ordinarily and customarily used or stored in similar recreational vessel marinas (including use and storage in customer vessels) and otherwise in compliance with all Governmental Requirements. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials by Lessee or Lessee Parties.
11.5 Right of Entry. Notwithstanding any other term or provision of this Lease, in the event Lessor in good faith has reason to believe that a violation of applicable Governmental Regulations as determined by a final non-appeal order, with respect to Hazardous Materials on the Premises Lessee shall, subject to the rights of Sublessees and Slip Renters, permit Lessor or its agents or employees to enter the Premises at any time during normal business hours (except in the event of an emergency), without prior notice in the event of an emergency, and with not less than forty-eight (48) hours advance notice if no emergency is involved, to inspect, monitor and/or take emergency remedial action with respect to Hazardous Materials and Hazardous Materials Contamination in violation of Governmental Requirements as determined by a final nonappealable order on or affecting the Premises, or to discharge Lessee’s obligations hereunder with respect to such Hazardous Materials Contamination caused by Lessee or Lessee Parties when Lessee has failed to do so after notice from Lessor and an opportunity to cure such deficiency, which notice states in bold type as follows: "THIS NOTICE OF DEFAULT IS BEING SENT PURSUANT TO SECTION 11.5 OF THE LEASE, AND IF LESSEE FAILS TO CURE SUCH DEFAULT WITHIN TEN (10) BUSINESS DAYS OF ITS RECEIPT OF THIS NOTICE, OR IF LESSEE HAS NOT COMMENCED SUCH CURE WITHIN SUCH TEN (10) BUSINESS DAY
PERIOD AND DILIGENTLY PROSECUTE THE SAME TO COMPLETION, THEN LESSOR MAY EXERCISE ITS SELF HELP RIGHTS UNDER SECTION 11.5 OF THE LEASE." All actual third party costs and expenses incurred by Lessor in connection with performing Lessee’s obligations hereunder shall be reimbursed by Lessee to Lessor within thirty (30) days of Lessee’s receipt of written request therefor. Lessor shall use commercially reasonable efforts not to disrupt Lessee or the Sublessees and to minimize interference with the day to day operation of the Premises in exercising its rights under this Section 11.5.
11.6 Storage or Handling of Hazardous Materials. Lessee, at its sole cost and expense, shall comply (and shall use commercially reasonable efforts to cause its Sublessees and Slip Renters to comply) with all applicable Governmental Requirements for the storage, use, transportation, handling and disposal of Hazardous Materials on or about the Premises, including without limitation wastes generated in connection with the uses conducted on the Premises. Such compliance efforts shall include a program to make users of the Premises aware of Governmental Requirements relative to Hazardous Materials, and monitoring, reporting and imposing fines with respect thereto. In the event Lessee and/or any of its Sublessees or Slip Renters will store, use, transport, handle or dispose of any Hazardous Materials in violation of Governmental 22 Requirements, Lessee shall promptly notify Lessor in writing following becoming aware of such violation. Lessee shall conduct all monitoring activities required or prescribed by applicable Governmental Requirements, and shall, at its sole cost and expense, comply with all posting requirements of Proposition 65 or any other similarly enacted Governmental Requirements. In addition, in the event of any complaint or governmental inquiry, or if otherwise deemed necessary by Lessor in its reasonable good faith judgment, Lessor may require Lessee, at Lessee’s sole cost and expense, to conduct specific monitoring or testing activities with respect to Hazardous Materials on the Premises in violation of Governmental Requirements. Such monitoring programs shall be in compliance with applicable Governmental Requirements, and any program related to the specific monitoring of or testing for Hazardous Materials on the Premises, shall be satisfactory to Lessor, in Lessor’s reasonable good faith discretion. Lessee’s obligations hereunder shall survive the termination of this Lease.
11.7 Environmental Inquiries. Lessee shall notify Lessor, and provide to Lessor a copy or copies, of the following environmental permits, disclosures, applications, entitlements or inquiries relating to the Premises: notices of violation, notices to comply, citations, inquiries, clean up or abatement orders, cease and desist orders, reports filed pursuant to self-reporting requirements, and reports filed or applications made pursuant to any Governmental Requirement relating to Hazardous Materials and underground tanks. In the event of a release of any Hazardous Materials into the environment in violation of Governmental Requirements, Lessee shall, as soon as reasonably possible after the release, furnish to Lessor a copy of any and all reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request of Lessor, Lessee shall furnish to Lessor a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the Premises including, but not limited to, all permit applications, permits and reports including, without limitation, those reports and other matters which may be characterized as confidential.
12. ALTERATION OF IMPROVEMENTS.
The requirements of this Section 12 shall apply with respect to improvements made to the Premises other than the construction and redevelopment of the Marina Redevelopment Project which is required pursuant to Section 5 hereof.
12.1 Planning, Design and Construction of Additional Improvements. (a) Before commencement of construction of any works of improvement upon the Premises, and at or prior to the times set forth herein, Lessee shall submit to the City any plans and drawings (collectively, the “Construction Plans”) which may be required by the City with respect to any permits and entitlements which are required to be obtained to develop the improvements. Lessee shall submit to the City such plans for the improvements as are required by the City in order for Lessee to obtain demolition, grading, building and other required permits for the improvements. If the City disapproves any portion of the Construction Plans, such disapproval shall be in writing and shall specify the basis for disapproval in reasonable detail, together with reasonable proposed modifications as shall render the Construction Plans acceptable to the City. If the City objects to any portion of the Construction Plans as provided above, Lessee will discuss the objections with the City and Lessee and the City will work together in good faith to achieve approval of the Construction Plans by City that are acceptable to Lessee. The City shall 23 have all rights to review and approve or disapprove all Construction Plans and other required submittals in accordance with the City Municipal Code, and shall retain the same discretion over such matters as it has with respect to any other development applications submitted to the City.
Nothing set forth in this Lease shall be construed as the City’s approval of any or all of the Construction Plans. This Lease does not require that City comply with the implied covenant of good faith and fair dealing in reviewing and approving or disapproving in its governmental regulatory capacity Construction Plans and other required submittals with respect to the Improvements. In no event shall City's disapproval or failure to approve the Construction Plans and/or other required submittals be deemed a breach or Default of this Lease. (b) If Lessee desires to make any change in the Construction Plans after their approval by the City, Lessee shall submit the proposed change to the City for its approval, which approval shall be granted so long as such changes are consistent with, or a logical evolution from, the Construction Plans previously approved by the City. Notwithstanding the foregoing, the City shall not have any approval rights with respect to changes in the Construction Plans other than in its governmental regulatory capacity.
(c) The City shall not be responsible either to Lessee or to third parties in any way for any defects in the Construction Plans, nor for any structural or other defects in any work done according to the approved Construction Plans, nor for any delays reasonably caused by the review and approval processes established by this Section 12.2. (d) Lessee shall, at its own expense, secure or cause to be secured any and all land use and other entitlements, permits, and approvals which may be required for the Improvements by the City, California Coastal Commission and any other governmental agency affected by or having jurisdiction over such construction or work. Lessee shall, without limitation, apply for and secure, and pay all costs, charges and fees associated therewith, all permits and fees required by the City, California Coastal Commission, and other governmental agencies with jurisdiction over the Improvements. City staff shall work cooperatively with Lessee to assist in coordinating the expeditious processing and consideration of all necessary permits, entitlements, and approvals. However, the execution of this Lease does not constitute the granting of or a commitment to obtain, approve, or grant any required land use permits, entitlements, or approvals required by City, and City shall retain the same discretion over such matters as it has with respect to any other applications for land use and other entitlements, permits, and approvals submitted to the City. This Lease does not require that City comply with the implied covenant of good faith and fair dealing in reviewing and approving or disapproving land use and other entitlements, permits, and approvals with respect to the Improvements. In no event shall City's disapproval or failure to approve any land use and/or other entitlements, permits, and approvals with respect to the Improvements, or City’s amendment of the general plan, zoning or other land use designations applicable to the Improvements or Premises be deemed a breach or Default of this Lease.
12.2 Structural Review and Mid-Term Renovations. Lessee shall contract with a licensed and insured structural engineer (to be approved by the City Engineer or the City Manager’s designee, which approval shall not be unreasonably withheld) to perform a complete structural review of the Improvements (other than Lessor Maintenance Items) prior to the twentyfifth (25th) anniversary of the Commencement Date. The structural review shall determine any work necessary to maintain the structural integrity of the Improvements (other than Lessor 24 Maintenance Items). All written reports of such engineer shall be submitted to Lessor’s Waterfront and Economic Development Director and City Engineer for Lessor’s review. Lessor and Lessee shall meet and confer regarding the structural review, and Lessor and Lessee shall reasonably cooperate with each other (at no out-of-pocket cost or expense to Lessee) to mutually agree upon a work plan to be undertaken by Lessee to address any matters set forth in such structural review.
Such work plan shall provide for a modernization, renovation and refurbishing program to bring all Improvements (other than Lessor Maintenance Items) on the Premises, including slips, docks, piers, pilings, gangways, parking areas, landscaping and all building interiors up to first class condition and competitive quality. The work set forth in the mutually agreed upon work plan shall be performed by Lessee and completed between the twenty-fifth (25th) and (30th) Lease Years.
12.3 As-Built Plans and Substantial Compliance. Within one hundred fifty (150) days following completion of the construction of any improvements to or on the Premises required or permitted hereunder, Lessee shall furnish to Lessor a complete set of “as-built” plans depicting the Improvements as constructed, which construction shall be in substantial compliance with approved working drawings.
13. DAMAGE OR DESTRUCTION.
13.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance. If the Improvements (other than Lessor Maintenance Items) shall be totally or partially destroyed or rendered wholly or partly uninhabitable by fire or other casualty required to be insured against by Lessee, Lessee shall promptly use good faith diligent efforts to obtain insurance proceeds and take all steps necessary to begin reconstruction and, promptly upon receipt of insurance proceeds, to promptly and diligently commence the repair or replacement of the Improvements to substantially the same condition as the Improvements are required to be maintained in pursuant to this Lease. Lessee shall use good faith diligent efforts to complete the same as soon as possible thereafter so that such Improvements can be occupied in accordance with this Lease. Lessor shall cooperate with Lessee, at no out-of-pocket expense to Lessor, in obtaining any governmental permits required for the repair, replacement, or restoration. If, however, the then-existing laws of any other governmental agencies with jurisdiction over the Premises do not permit the repair, replacement, or restoration, Lessee may elect not to repair, replace, or restore such Improvements by giving notice to Lessor (in which event Lessee will be entitled to retain all insurance proceeds, subject to Lessee’s obligations to lenders or other third parties, but Lessee shall be required to remove all debris from the Premises) or Lessee may in its sole and absolute discretion reconstruct such other Improvements on the Premises as are consistent with applicable land use regulations and approved by the Lessor, and all other governmental agencies with jurisdiction.
13.2 Continued Operations. During any period of repair, Lessee shall continue, or cause the continuation of, the operation of the Improvements on the Premises to the extent reasonably practicable from the standpoint of prudent business management.
13.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance. Notwithstanding anything to the contrary contained or implied in Section 13.1 above, if the Improvements (other than Lessor Maintenance Items) are "substantially damaged" (as defined below) by a casualty for which Lessee is not required to (and has not) insured against, then 25 Lessor shall deliver written notice to Lessee of its obligations under this Section 13.3 within thirty (30) days of such event of substantial damage or destruction, and Lessee shall not be required to repair, replace, or restore such Improvements and may in its sole and absolute discretion elect not to do so by providing Lessor with written notice of election not to repair, replace, or restore within ninety (90) days after receipt of Lessor’s notice. In such event, Lessee shall remove all debris from the applicable portion of the Premises. As used in this Section 13.3, “substantial damage” means damage caused by a casualty or casualties either (a) not required to be (and not) covered by insurance, or (b) if required to be covered by insurance (or if covered by non-required insurance), Lessee has obtained such insurance and the insurance proceeds are insufficient to cover Lessee’s costs of repair, replacement, or restoration, and such damage or destruction to such Improvements not covered by insurance is in excess of Seven Hundred Fifty Thousand Dollars ($750,000) (the "Threshold Amount"). The Threshold Amount shall be revised to One Million Two Hundred Thousand Dollars ($1,200,000) upon the twentieth (20th) anniversary of the Commencement Date, and shall be revised to One Million Eight Hundred Thousand Dollars ($1,800,000) upon the fortieth (40th) anniversary of the Commencement Date. In the event that the Lessor delivers such notice to Lessee but Lessee does not timely elect to repair, replace, or restore the Improvements as set forth in the first sentence of this Section 13.3, Lessee shall be conclusively deemed to have elected not to repair, replace, or restore the Improvements. In the event Lessee elects not to repair, replace, or restore, and gives Lessor notice of such election as provided herein, this Lease shall terminate as of sixty (60) days from the date of such notice and the insurance proceeds, if any, minus the cost of removing all debris from the applicable portion of the Premises shall be retained by Lessee.
13.4 Non-Substantial Damage. If the Improvements (other than Lessor Maintenance Items) shall be totally or partially destroyed or rendered wholly or partly uninhabitable by a casualty for which Lessee is not required to (and has not) insured against, and the amount of the damage is less than the Threshold Amount, Lessee shall promptly take all steps necessary to begin reconstruction and to promptly and diligently commence the repair or replacement of such Improvements to substantially the same condition as such Improvements are required to be maintained in pursuant to this Lease, and Lessee shall use good faith diligent efforts to complete the same as soon as possible thereafter so that such Improvements can be occupied in accordance with this Lease. Lessor shall cooperate with Lessee, at no expense to Lessor, in obtaining any governmental permits required for the repair, replacement, or restoration. If, however, the thenexisting laws of any other governmental agencies with jurisdiction over the Premises do not permit the repair, replacement, or restoration, Lessee may elect in its sole and absolute discretion not to repair, replace, or restore the Improvements by giving notice to Lessor (in which event Lessee will be entitled to all insurance proceeds, subject to Lessee’s obligations to lenders or other third parties, but Lessee shall be required to remove all debris from the Premises) or Lessee may reconstruct such other improvements on the Premises in its sole and absolute discretion as are consistent with applicable land use regulations and approved by the Lessor, and all other governmental agencies with jurisdiction. In the event Lessee elects not to repair, replace, or restore and Lessee gives Lessor notice of such election as provided herein, the Term of this Lease shall terminate as of sixty (60) days from the date of such notice.
13.5 Lessor Rights Upon Lessee Termination. In the event Lessee gives notice to Lessor of its termination of this Lease under Section 13.3 hereof as a result of excess costs of repair of damage, Lessor shall have the right, at its option, to pay the difference between the cost of 26 repair, replacement or restoration (less available insurance proceeds) and the sum of the Threshold Amount minus the aggregate amount previously expended by Lessee under this Lease, on account of uninsured casualties and underinsured casualties to the Improvements subject to this Lease (which amount Lessor shall be required to contribute for purposes of such repair, replacement or restoration (the “Difference”) by delivering written notice of such election, together with payment of such Difference to Lessee within sixty (60) days after delivery of Lessee’s notice of election to terminate this Lease. Upon receipt of such notice and confirmation of payment by Lessor of the Difference to Lessee, Lessee’s termination shall be deemed rescinded and Lessee shall proceed with the repair, replacement or restoration. If Lessee elects to terminate this Lease under Section
13.3 hereof and Lessor does not elect to pay the Difference, this Lease shall terminate as of the date set forth in Lessee’s notice of election to terminate this Lease and the insurance proceeds, if any, minus the cost of removing all debris from the applicable portion of the Premises shall be retained by Lessee.
14. SALE, ASSIGNMENT, LEASE OR OTHER TRANSFER
14.1 Restrictions on Assignment. The qualifications and identity of Lessee as an experienced and successful operator and developer of recreational vessel marinas are of particular concern to Lessor. It is because of those qualifications and identity that Lessor has entered into this Lease with Lessee. During the Term of this Lease, (a) no voluntary or involuntary successor in interest of Lessee shall acquire any rights or powers under this Lease, (b) Lessee shall not make any total or partial sale, transfer, conveyance, assignment, sublease, or subdivision of the whole or any part of the Premises or the Improvements thereon (excluding deeds of trusts and mortgages), and (c) there shall not be a change in the controlling interest of Lessee to persons other than the Principals and their lineal descendants as described in Section 14.2(f) below (collectively, a “Transfer”), without the prior written approval of Lessor, except as expressly permitted below.
For purposes hereof, a change in the controlling interest of Lessee shall mean a cumulative change of at least fifty percent (50%) of the direct ownership and voting interests in Lessee. Lessor may disapprove a request for a Transfer in its sole and absolute discretion except as expressly provided below. Lessee shall not Transfer the whole or any part of the Premises or the Improvements without prior written approval of Lessor, provided Lessee delivers written notice to Lessor requesting such approval. With respect to a proposed Transfer of the Premises, such notice shall be accompanied by sufficient evidence regarding the proposed transferee's experience as an operator and developer of recreational vessel marinas, and its ability to finance the Transfer and operate and manage a project of this size, in sufficient detail to enable Lessor to evaluate the proposed transferee pursuant to the criteria set forth in this Section 14.1 and as reasonably determined by Lessor. Lessor shall evaluate each proposed transferee on the basis of the respective qualifications set forth above, and may disapprove any proposed transferee, during the period beginning on the Commencement Date and ending on completion of the Improvements described in the Scope of Development (the “Construction Period”), which Lessor determines in its sole and absolute discretion does not possess these qualifications. After the completion of the Improvements described in the Scope of Development, Lessor shall not unreasonably withhold, condition or delay Lessor’s approval of a request by Lessor for a proposed Transfer. An assignment and assumption agreement in form reasonably satisfactory to Lessor shall also be required for all proposed Transfers. Within thirty (30) days after the receipt of Lessor’s written notice requesting approval of any Transfer pursuant to this Section 14.1, excluding Transfers that do not require Lessor approval, Lessor shall either (a) approve or disapprove such proposed 27 Transfer, or (b) shall respond in writing by stating what further information, if any, Lessor reasonably requires in order to determine the request and determine whether or not to grant the requested approval. Upon receipt of such a response, Lessee shall promptly furnish to Lessor such further information as may be reasonably requested. Any purported Transfer without the prior written consent of Lessor, except for Transfers permitted pursuant to Sections 14.2 and 14.3 hereof, shall render this Lease absolutely null and void and shall confer no rights whatsoever upon any purported assignee or transferee. Lessee shall only assign this Lease or transfer the Premises and the Improvements as a whole and is not permitted to subdivide the Premises and the Improvements for the duration of this Lease without the prior written approval of Lessor, such approval not to be unreasonably withheld, conditioned or delayed except as permitted pursuant to Sections 14.2 and 14.3 hereof. Notwithstanding any provision in this Section 14 to the contrary, in no event shall Lessee make any Transfer which would or could likely be effective beyond the Term (including extensions thereof) without the prior written consent of the Lessor. As a condition to Lessor's approval of any Transfer, Lessee shall provide to the Lessor an assignment and assumption agreement reasonably satisfactory to Lessor. Upon the Lessor’s approval of such assignment and assumption agreement, the assigning Lessee shall not be responsible for any obligations hereunder which arise from and after the effective date of the assignment and assumption agreement, provided that the assigning Lessee shall retain the indemnification obligations pursuant to Section 16 hereof, and shall remain responsible for any obligations hereunder which arose prior to the effective date of the assignment and assumption agreement.
14.2 Permitted Transfers. Notwithstanding any other provision of this Lease to the contrary, Lessor approval of a Transfer shall not be required in connection with any of the following (collectively, an “Excluded Transfer”), whether before or after the completion of the Improvements described in the Scope of Development:
(a) The conveyance or dedication of any portion of the Premises to the Lessor, provided that Lessee gives written notice thereof to Lessor at least thirty (30) days prior to such transfer.
(b) Any Transfer for financing purposes, including the grant of a leasehold deed of trust to secure the construction and permanent financing of the Improvements, provided that Lessee gives written notice thereof to Lessor at least thirty (30) days prior to such transfer. (c) The sublease of individual spaces in the Improvements to sublessees (“Sublessees”) in the ordinary course of business, for terms not to exceed the Term of this Lease, for such uses and pursuant to a sublease agreement that is in compliance with the requirements of the Use and Operating Plan (“Sublease Agreement”).
(d) The berthing of vessels in the marina pursuant to berthing agreements with slip customers (“Slip Renters”) for terms not to exceed the Term of this Lease. (e) Any sale, assignment or other transfer to any beneficiary or mortgagee (or its nominee) occurring as a result of any foreclosure (or acceptance of a deed or assignment in lieu thereof).
28 (f) Any Transfer to any other entity or trust (collectively herein, a “Related Entity”) that is controlled by or is under common control with Lessee or one or more of the current principals of Lessee or their lineal descendants (it being understood that the current principals of Lessee are composed of one or more of Gerald L. Thomas, his spouse and his children (collectively, the “Principals”)). For purposes of this paragraph, the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management, affairs and policies of anyone, whether through the ownership of voting securities, by contract or otherwise.
No transfer payment shall be due or payable under Section 14.4 in connection with a Transfer described above in this Section 14. 2.
14.3 Assignments Pursuant to the Bankruptcy Code. The restrictions on Transfers of this Lease and other terms and conditions set forth in Section 14.1, shall, to the extent allowed by law, apply to any Assignment, transfer, conveyance or sale of this Lease, or any interest of Lessee under this Lease, pursuant to the Bankruptcy Code, or by operation of law. In addition, the following restrictions shall be conditions precedent to the effectiveness of the Assignment or other transfer, conveyance or sale of this Lease:
Any person or entity to which this Lease, or any interest herein, is so assigned, transferred, conveyed or sold (excluding any assignment, transfer or conveyance as security for any Obligation), 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 by Lessor, execute and deliver to Lessor a written document confirming such assumption, in a form reasonably acceptable to Lessor and any such assignee.
14.4 Required Transfer Payments. Lessee shall pay to Lessor Three and One-Half Percent (3.5%) of the Gross Price (as defined below) paid by Lessee in connection with a Transfer to a transferee which is not a Related Party or Principal of Lessee or another Excluded Transfer.
For purposes hereof, “Gross Price” shall mean the purchase price or economic value of other consideration paid to Lessee for the transfer of Lessee’s interest in, to and under the Lease, less the sum of (a) any prorations, brokerage fees, closing costs, documentary transfer taxes or other customary deductions to the purchase price for which the transferor is responsible in connection with such Transfer and (b) the aggregate cost of the capital improvements (including, without limitation, the Marina Redevelopment Project) made by Lessee pursuant to this Lease determined based on their historical cost without reduction for depreciation or amortization.
14.5 Assignment and Sublease Documents. It shall be the sole responsibility of Lessee to ensure that all documents relating to any assignment or sublease of all or any portion of the Premises shall be consistent in all material respects with the terms and provisions of this Lease, and particularly this Article 14.
14.6 Consent Not a Waiver. Any consent by Lessor to one Transfer, conveyance, sale, sublease, occupation or use by any person shall not be deemed to be a consent to any subsequent Transfer, nor shall such consent constitute or operate as a waiver, release, modification or abandonment by Lessor of any rights or claims of Lessor under this Lease. 29 14.7 Nondisturbance Agreement. Lessor agrees for the benefit of each Sublessee that as long as the Sublease Agreement complies with the requirements of Section 14.2(c), then on the expiration or termination of this Lease, Lessor shall recognize the Sublessee under the Sublease Agreement as the direct tenant of Lessor under all terms and conditions contained in the Sublease Agreement, and for a term equal to the then unexpired term of the Sublease Agreement; provided, however, that Lessor shall not be (A) liable for any prior act or omission of Lessee under the Sublease Agreement; (B) liable for the return of any security deposit under the Sublease Agreement not actually received by Lessee; or (C) subject to any offsets or defenses that the Sublessee may have against Lessee. The provisions of this section shall survive the expiration or termination of this Lease.
15. FINANCING.
15.1 Lessee’s Right to Encumber To Finance Construction of Improvements (a) If Lessee desires from time to time to secure construction or permanent financing for the Premises or its interest in this Lease, Lessee shall, subject to the terms and provisions of this Article 15, have the right to subject Lessee’s leasehold estate in the Premises and its rights under this Lease, and any and all of Lessee’s Improvements on the Premises, to one or more mortgages or trust deeds or lease-sub-leaseback financing as security for a loan or loans from an Institutional Lender (as defined below), subject to Section 15.2 below, provided that:
i. The mortgage, all related documents and instruments and all rights acquired under the mortgage documents shall be subject and subordinate to the covenants, conditions and restrictions set forth in this Lease and to all rights and interests of Lessor, except as may be expressly provided in this Lease.
ii. The mortgage shall not be placed upon or encumber Lessor's fee simple title to the Premises, or any other interests of Lessor. iii. The mortgage shall encumber only Lessee’s interest in the Premises, and no other real property.
iv. The mortgage shall not be directly cross-defaulted with agreements relating to other property or transactions.
v. The mortgage shall not, by its terms or effect, be used to transfer ownership of this Lease or Lessee’s interest herein, or in the Improvements on the Premises(except a security interest therein) nor to change control of Lessee, except in connection with the exercise of Lender’s rights and remedies under any applicable security instrument. vi. The mortgage and related documents shall state that:
a) Should the Lender or any successor-in-interest to it, succeed to the interests of Lessee in the Premises or under this Lease by any means or proceedings whatsoever, and regardless of whether or not the Lender or any successor-in-interest to it actually enters into and takes possession of the Premises, then the Lender and any successor-in-interest to it shall be obligated to keep and perform all of the covenants and conditions of this Lease required 30 to be kept and performed by Lessee during its ownership of the Lessee’s interest in the Premises and Improvements from and after the date that such Lender succeeds to the interests of Lessee in the Premises.
b) Lender, if a request for notice shall have been recorded by Lessor, shall give Lessor written notice of any default under the mortgage and related documents, which notice shall be given within twenty (20) calendar days after the Lender commences a foreclosure proceeding under the applicable security instrument. Notwithstanding the requirements of this subsection, Lessor agrees to consider acceptance of alternate methods of compliance with this provision, provided the effect of such alternate methods achieve the same legal effect as it relates to Lessor’s rights and requirements under this Lease. vii. Whenever the words “mortgage”, “deed of trust” or “encumbrance” appear herein, the words “security instrument” may be substituted in their place. viii. For purposes hereof, "Institutional Lender" means any person, insurance company, savings and loan association, commercial bank, savings bank, pension fund, welfare fund, retirement fund, endowment fund, fraternal organization, college, university, commercial lender, investment bank, opportunity fund, mortgage conduit, real estate investment trust, commercial finance lender or other similar financial institution which ordinarily engages in the business of making, holding or servicing commercial real estate loans, including any affiliate thereof, or charitable organization or any combination thereof or entity controlled thereby, which has net assets of not less than One Hundred Million Dollars ($100,000,000).
15.2 Lessee Improvements Financing Plans. If Lessee elects to have initial construction financing for the Marina Redevelopment Project, Lessee shall submit to Lessor on a privileged and confidential basis (subject to applicable Public Records Act requirements), a financing plan, which shall be subject to Lessor’s approval, which shall not be unreasonably withheld (the “Financing Plan”). The initial construction financing obtained by Lessee shall be in conformance with the approved Financing Plan.
15.3 Lessee’s Right to Refinance. During the Lease Term, and provided (i) Lessee is not in default under this Lease beyond any applicable notice and cure period, and (ii) Lessee complies with Sections 15.1 and 15.2 above, Lessee may from time to time refinance (i.e., mortgage), in whole or in part, Lessee’s leasehold estate under this Lease, or any portion thereof (including interests of Lessee as sublessor under any sublease of a portion of the Premises), and/or Lessee’s interest in the Improvements on the Premises, or any portion thereof. Upon any such refinancing, Lessee shall pay to Lessor Fifteen Percent (15%) of the Excess Proceeds of such refinancing. For purposes hereof, “Excess Proceeds” shall mean the dollar amount of the proceeds of such refinancing received by Lessee, less the sum of (a) any closing costs, loan fees, brokerage fees or other customary costs for which the transferor is responsible in connection with such refinancing and (b) the amount required to repay and discharge, in full, the indebtedness which is being refinanced; provided, however, that no Excess Proceeds shall be deemed to have been received by Lessee until such time as Lessee has received an amount equal to the aggregate cost of the capital improvements (including, without limitation, the Marina Redevelopment Project) made by Lessee pursuant to this Lease determined based on their historical cost without reduction for depreciation or amortization, that was not otherwise funded by a prior financing or refinancing 31 (it being understood that the recovery of Lessee’s self-funded costs of capital improvements do not constitute Excess Proceeds). For purposes of illustrating the foregoing, assuming that Lessee constructs the Marina Redevelopment Project at a cost of $14,000,000 with mortgage financing of its leasehold interest in the amount of $5,000,000 (i.e., $9,000,000 of the cost of such improvements is not being financed by a mortgage), and thereafter, Lessee refinances by obtaining a mortgage in the amount of $15,000,000 with closing costs of $50,000 with the outstanding balance of original mortgage being $5,000,000, the Excess Proceeds of such refinancing would be $950,000.
15.4 Rights of the Lender
(a) Nothing contained in this Lease shall be deemed to prohibit the transfer of this Lease without the consent of Lessor as a result of a judicial foreclosure or a foreclosure through the exercise of a power of sale under any deed of trust or mortgage executed to obtain financing referred to in this Article 15, or by a deed in lieu thereof, or any subsequent transfer by the Lender or an affiliate of Lender subject to the requirements hereof, if:
i. the Lender (or an affiliate of Lender) is the purchaser at such foreclosure sale; or
ii. the Lender or its affiliate is an Institutional Lender at the time it (or its affiliate) succeeds to Lessee’s interests under this Lease (references to “Lender” hereafter postforeclosure or deed in lieu of foreclosure, shall include references to its affiliate). (b) If the Lender purchases Lessee’s interest in the Premises under this Lease at a foreclosure sale or acquires such interest by a deed in lieu thereof, the Lender shall thereafter comply with all of the terms and conditions of this Lease during the period the Lender, or a receiver appointed at its instance and request, is in possession, or entitled to possession, of the Premises, or retains the leasehold interest so acquired. If the Lender is an Institutional Lender at the time it acquires Lessee’s interest in the Premises under this Lease, or acquires its interest in the Premises through an affiliate, and certifies to Lessor in writing at the time it proposes to make a transfer of its interest in the Premises, that it is an Institutional Lender or the entity acquiring the interest is an affiliate of an Institutional Lender, as defined herein and, provided further, that this Lease is not then in default (other than defaults which are personal to Lessee or are otherwise not required to be cured by such Lender under any other term or provision of this Agreement), the Lender may transfer the leasehold interest so acquired to a third party and such transfer shall be an “Excluded Transfer” as defined in this Lease. However, as a condition of such transfer, the transferee shall assume and expressly agree in a writing in a form reasonably acceptable to Lessor to be bound by all of the terms, covenants, conditions and agreements of this Lease and, contemporaneously with said transfer, the transferee shall execute and deliver to Lessor an unconditional lease assumption agreement in a form reasonably acceptable to Lessor.
(c) If the purchaser at foreclosure or entity that acquires the interest in this Lease by means of a deed-in-lieu of foreclosure or similar type of assignment is not either (i) an Institutional Lender or (ii) an affiliate of an Institutional Lender, then no such subsequent transfer by the purchaser can be made without obtaining the prior written consent of Lessor pursuant to the terms and provisions of Article 14 hereof. In the event of any transfer, and in addition to the 32 requirements of subsection (b), above, the transferor shall promptly give written notice to Lessor of such transfer, including the name and address of the transferee and the effective date of such transfer.
16. INDEMNITY.
Lessee shall defend, indemnify, assume all responsibility for, and hold Lessor and its officers, employees, agents, and representatives harmless from, all claims, demands, damages, defense costs or liability of any kind or nature (including reasonable attorneys’ fees and costs) and for any damages to property or injuries to persons, including accidental death, which may be caused by or arise out of (i) the use, occupation, improvement, or maintenance of the Premises or Improvements or any work or activity in or about the Premises or Improvements by Lessee or its employees, officers, contractors, subcontractors, consultants, agents, representatives, assignees, Sublessees, licensees, or invitees; (ii) any activity, condition, or occurrence in or about the Premises or Improvements, including any investigations undertaken by Lessee (or its authorized representatives) for which Lessee is liable pursuant to Section 11 hereof; (iii) the filing or potential filing of any mechanic's or materialmen's liens against the Premises or Improvements in connection with any work done or caused to be done by Lessee or its employees, officers, contractors, subcontractors, consultants, agents, representatives, assignees, Sublessees, licensees, or invitees; (iv) any breach or failure to perform any obligation imposed on Lessee under this Lease; (v) any act or omission of Lessee or its employees, officers, contractors, subcontractors, consultants, agents, representatives, assignees, Sublessees, licensees, or invitees. Lessee shall not be liable for property damage or bodily injury occasioned by the negligence, willful misconduct, or breach of this Lease by Lessor or its officers, employees, agents or representatives.
Lessor shall defend, indemnify, assume all responsibility for, and hold Lessee and its officers, employees, agents, and representatives harmless from, all claims, demands, damages, defense costs or liability of any kind or nature (including reasonable attorneys’ fees and costs) and for any damages to property or injuries to persons, including accidental death, which may be caused by or arise out of (i) any breach or failure to perform any obligation imposed on Lessor under this Lease; or (ii) any act or omission of Lessor or its employees, officers, contractors, subcontractors, consultants, agents, representatives, assignees, licensees, or invitees. Lessor shall not be liable for property damage or bodily injury occasioned by the negligence, willful misconduct, or breach of this Lease by Lessee or its officers, employees, agents or representatives.
Except as provided in this Lease, Lessee accepts the Premises in its “as is” and “where is” condition, including without limitation, standard risks of subsidence and liquefaction. Lessee acknowledges that it is familiar with the condition of the Premises and is not relying on any representations or warranties of Lessor with respect to the Premises or condition thereof except as provided in this Lease. As a material part of the consideration for this Lease, except as provided in this Lease, Lessee hereby waives all claims against Lessor for damages to goods, wares, merchandise, buildings, installations or other Improvements in, upon, or about the Premises and for injuries to Lessee, its Sublessees or third persons in or about the Premises from any cause arising at any time, except claims for damages or injuries arising out of or to the extent of the willful misconduct or negligence of Lessor or its officers, employees, agents or representatives or the breach of this Lease by Lessor.
33 17. INSURANCE.
17.1 General Liability and Property Damage Insurance.
(a) In addition to and independently of all other provisions of this Lease, Lessee shall, at its own cost and expense, maintain insurance in full force and effect throughout the Term.
The policy or policies of insurance shall provide coverages which shall be commercially reasonable for the Premises and operations conducted on the Premises and shall name Lessor, and each of Lessor's elected officials, officers, employees, agents, attorneys, volunteers and members of all boards and commissions, as additional insureds. As a minimum, provided the same are available at commercially reasonable rates, the policy or policies of insurance shall provide the following forms of coverage in the amounts specified:
i. A Commercial General Liability policy in the amount not less than One Million Dollars ($1,000,000) per occurrence with a Two Million Dollars ($2,000,000) aggregate, for bodily injury and property damage, including blanket Contractual Liability, Products and Completed Operations, and an umbrella policy in the amount not less than Twelve Million Dollars ($12,000,000) that provides excess coverage for Employers Liability, Commercial General Liability and Owned Auto Liability (such excess policy to follow form of declared underlying policies).
ii. A Builder’s Risk (Course of Construction) insurance policy in an amount not less than the amount of the construction contract, until the issuance of the Certificate of Occupancy by the Lessor.
iii. Intentionally Omitted.
iv. "Special Form” property coverage, in an amount not less than 100% of the current valuation replacement cost basis of all Improvements now existing or hereafter constructed or installed on or within the Premises by Lessee, any predecessor-in-interest of Lessee, or any Sublessee or assignee of Lessee (but excluding Lessor Maintenance Items), subject only to the following exclusions: (i) infidelity or any dishonest act on the part of the insured or employees; (ii) war and similar acts of government authority; (iii) nuclear reaction, radiation or contamination; (iv) volcanic action, landslide or mudflow; (v) terrorism, and (vi) such other exclusions as are customarily included in “Special Form” property policies. If a loss occurs due to a risk which would have been covered under “Special Form” property coverage, and such insurance was commercially available and economically feasible at the time of the loss, the loss shall be treated as occurring as a result of an insurable peril
v. A Commercial Automobile Liability policy in the amount of One Million Dollars ($1,000,000), combined single limit for bodily injury and property damage.
Coverage shall include “Owned” automobiles, which shall protect Lessee and Lessor from claims for such damages. Coverage shall also include “Non-Owned and Hired” automobiles which shall protect Lessee from claims for such damages.
vi. Worker’s compensation insurance as required by law, and Employers’ Liability coverage with limits of not less than One Million Dollars ($1,000,000) for bodily injury and disease. Such workers’ compensation insurance to be provided by Lessee shall 34 be in the statutory amounts obtainable against liability under the Workers’ Compensation Insurance and Safety Act of the State of California as well as Employer’s Liability Insurance. To the extent that Lessee does not have employees, workers’ compensation insurance shall be provided by the employer of Lessee’s representatives.
vii. Boiler and machinery insurance if at any time such equipment is located on the Premises.
viii. Other insurance in amounts from time to time reasonably required by Lessor against other insurable risks if, at the time, (1) they are commonly insured against for premises similarly situated and containing comparable improvements unless Lessee has not started construction on any Improvements to the Premises and (2) such insurance is available at commercially reasonable rates.
(b) All insurance required to be provided under this Article shall be in force on or before the Commencement Date.
(c) Each policy of insurance shall contain a clause substantially similar to the following clause:
“It is agreed that this policy shall not be canceled nor the coverage reduced until thirty (30) calendar days after the Waterfront and Economic Development Director of the City of Redondo Beach has received written notice of such cancellation or reduction. The notice shall be sent by certified or registered mail and shall be deemed effective the date delivered to or rejected by said Waterfront and Economic Development Director, as evidenced by a properly validated return receipt.”
(d) Lessee agrees to deposit with Lessor, at or before the times at which they are required to be in effect, two copies each of the certificate or certificates of insurance, necessary to satisfy the insurance provisions of this Lease and to keep such insurance in effect and the policy or policies, or certificate or certificates therefore on deposit with Lessor during the entire Lease Term. All policies of insurance shall be issued by insurance companies authorized to do business in the State of California and rated not less than Best's A: VII, or such other rating service as Lessor shall select in its reasonable commercial discretion if Best's is no longer available or providing such rating service. Further, all policies of insurance shall contain language to the effect that:
(i) the insurer waives the right of subrogation against Lessor and Lessor's elected officials, officers, employees, agents, attorneys and members of all boards and commissions and all employees of Lessor performing services for or under this Lease; (ii) the policies are primary and noncontributing with any insurance that may be carried by Lessor; (iii) the insurance is to apply severally as if each named insured were the only named insured, and separately as to each insured against whom a claim is made or an action is brought; and (iv) the inclusion of any person or entity as an insured is not to affect any right such person or entity would have as a claimant against another insured.
35 (e) Lessor shall retain the right at any time to review the coverage, form and amount of the insurance required to be maintained by Lessee under this Lease. If, in the opinion of Lessor, applying commercially reasonable standards, the insurance provisions in this Lease do not provide adequate protection for Lessor and for members of the public using the Premises, Lessor may require Lessee at Lessee's sole expense to obtain insurance sufficient in coverage, form and amount to provide adequate protection. Lessor's requirements shall be commercially reasonable and designed to assure protection from and against the kind and extent of the risks which exist at the time a change in insurance is required. (f) Lessor shall notify Lessee in writing of changes in the insurance requirements, and, if Lessee does not deposit copies of acceptable certificates of insurance with Lessor incorporating such changes within ninety (90) calendar days of receipt of such notice, Lessee shall be in default of this Lease.
(g) The procuring of such required policy or policies of insurance shall not be construed to limit Lessee's liability hereunder, nor to fulfill the indemnification provisions and requirements of this Lease. Notwithstanding said policy or policies of insurance, Lessee shall be obligated for the full and total amount of any damage, injury, or loss, including all costs, expenses and attorneys' fees caused by negligence or neglect arising out of any act or omission of Lessee, its agents, employees and Sublessees connected with this Lease or with the use or occupancy of the Premises.
18. EMINENT DOMAIN.
In the event that the Premises and/or the Improvements or any part thereof shall be taken for public purposes by condemnation as a result of any action or proceeding in eminent domain, then, as between Lessor and Lessee, the interests of Lessor and Lessee in the award and the effect of the taking upon this Lease shall be as follows:
(a) In the event of such taking of only a part of the Premises, leaving the remainder of the Premises in such location and in such form, shape and size as to be used effectively and practicably for the conduct thereon of the uses permitted hereunder as reasonably determined by Lessee, this Lease shall terminate and end as to the portion of the Premises so taken as of the date title to such portion vests in the condemning authority, but shall continue in full force and effect as to the portion of the Premises not so taken, and from and after such date the Minimum Rent required by this Lease to be paid by Lessee to Lessor shall be equitably reduced in the proportion that the part taken affects the use and utility of the Premises. (b) In the event of taking of only a part of the Premises, leaving the remainder of the Premises in such location, or in such form, shape or reduced size as to render the same not effectively and practicably usable and economically feasible for the conduct thereon of the uses permitted hereunder, as reasonably determined by the Lessee by written notice to Lessor, this Lease and all right, title and interest thereunder shall cease on the date title to the Premises or the portion thereof so taken vests in the condemning authority. 36 (c) In the event the entire Premises is taken, this Lease and all of the right, title and interest thereunder, shall cease on the date title to the Premises so taken vests in the condemning authority.
(d) In the event of taking of only Lessee’s leasehold interest in the Premises, this Lease shall terminate.
(e) Promptly after a partial taking, at Lessee’s expense and in the manner specified in provisions of this Lease related to maintenance, repairs, alterations, Lessee shall restore the Improvements, to the extent reasonably possible and as permitted by law, and to the extent of condemnation proceeds received by Lessee, so as to place them in a condition suitable for the uses and purposes for which the Premises was leased. (f) In the event of any taking under subparagraphs (a), (b), (c) or (d) hereinabove, that portion of any award of compensation attributable to the fair market value of the Premises and any of the Improvements owned by Lessor, or portion thereof taken, during the term of this Lease, valued as subject to this Lease, and the residual value of fee ownership of the Improvements after the expiration of the term of this Lease, shall belong to Lessor. That portion of any award attributable to the fair market value of Lessee’s leasehold interest in the Premises and Improvements owned by Lessee pursuant to this Lease (except for the residual value of fee ownership of the Improvements after the expiration of the term of this Lease), and any separate award made to Lessee for loss of business or for the taking of Lessee’s personal property, fixtures and Improvements, shall belong to Lessee. This Section 18 shall be Lessee’s sole and exclusive remedy in the event of any taking. Lessee and Lessor hereby waive the benefits of California Code of Civil Procedure §1265.130.
(g) In the event of a partial taking, where the Lease remains in effect and Lessee is obligated to restore or repair the Improvements, then Lessee shall be entitled to any portion of the award attributable to severance damages to the remaining Improvements to the extent necessary to restore or repair the Improvements and any remaining severance damages shall be payable to Lessee. Said award shall be used for the restoration, repair or rebuilding of the Improvements in accordance with plans and specifications reasonably approved in writing by Lessor to the extent necessary to restore or repair the Improvements and any remaining severance damages shall be payable to Lessee. The value of each interest for the purpose of apportionment under this Section shall be the fair market value of such interests at the time of the taking. (h) In the event of any dispute between Lessee and Lessor regarding any issue of fact arising out of a taking mentioned in this Section 18, such dispute shall be resolved by the same court in which the condemnation action is brought, in such proceedings as may be appropriate for adjudicating the dispute.
19. SURRENDER OF PREMISES.
19.1 Lessee’s Obligation to Surrender upon Expiration of Lease Term or upon Termination. Lessee hereby covenants that upon the expiration of the Lease Term, or any sooner termination of this Lease, Lessee shall surrender the Premises to Lessor along with the Improvements, subject to the provisions of this Section 19. 37 19.2 Reversion of Improvements.
(a) Lessor’s Receipt of Improvements. Except as otherwise provided in this Lease (e.g., in the event of casualty or condemnation), upon the expiration of the Term or sooner termination of this Lease, whether by cancellation, forfeiture or otherwise, all of the Improvements, including all structures, buildings, and all alterations, additions, and betterments thereto, and all other Improvements made to or upon the Premises, shall remain upon and be surrendered with the Premises as part thereof and title thereto shall vest in Lessor without compensation therefor to Lessee. During the last year of the Term Lessor and Lessee shall meet and confer regarding the evaluation of the Improvements, and Lessor and Lessee shall reasonably cooperate with each other (at no out-of-pocket cost or expense to Lessee) with respect to Lessor's preparation of an inventory of such Improvements, which shall include an evaluation of the condition of each of the Improvements and recommendations for the removal, renovation and/or preservation thereof. Nothing contained herein shall be construed to deny or abrogate the right of Lessee, prior to the expiration of the Term or termination of this Lease, to receive any and all proceeds which are attributable to damage or destruction of the Improvements or the condemnation of the Improvements, including all structures, buildings and dock systems belonging to Lessee immediately prior to the occurrence of the casualty or the taking of possession by the condemnor, as said rights are set forth in Section 18 of this Lease, or to remove any furniture or equipment not permanently affixed to the Premises, or any personal property, upon the expiration of the Term or earlier termination of this Lease or at any time during the Term, subject to Lessee’s obligations under this Lease to use the Premises for the uses permitted hereunder. (b) Duty to Remove Equipment, Etc. No later than the expiration of the Term or sooner termination of this Lease, Lessee shall in any event remove at its cost and expense such furniture, equipment and personal property as are not firmly affixed to said structures, buildings and Improvements. Should Lessee fail to so remove said furniture, equipment and personal property within said period, and said failure continues for thirty (30) days after written notice from Lessor to Lessee, Lessee shall lose all right, title and interest in and thereto, and Lessor may elect to keep the same upon the Premises or to sell, remove, or demolish the same. (c) Coastal Permits. Upon surrender, expiration or termination of this Lease, Lessee shall assign to Lessor all of Lessee’s right and interest in and to any coastal permits issued in connection with the Premises and Improvements without any representation or warranty and shall execute any and all documents reasonably required by Lessor or any other governmental entity to complete said assignment. Lessor shall assume (and Lessee shall be released from) all of Lessee’s right and interest in and to any coastal permits issued in connection with the Premises and Improvements from and after the date of such assignment.
19.3 Submission of Leasehold Property Documents.
Prior to the expiration of the Term or sooner termination of this Lease, Lessee shall submit to Lessor the following documents in Lessee’s possession or control for Lessor’s information only and without any representation or warranty as to the truth, accuracy or completeness of any such documents:
1. Current set of as-built plans.
38 2. An inventory of buildings, improvements, personal property and trade fixtures that will not remain subsequent to the expiration of this Lease.
3. An inventory of buildings, improvements, personal property and trade fixtures that will remain subsequent to the expiration of this Lease.
4. Any engineering, structural, or other inspection reports covering the property, buildings, and improvements.
5. Details of any current or pending litigation known to Lessee (if none, then affidavit).
6. Current rent roll including term, deposit, and payment history.
7. Covenants, conditions & restrictions covering the Premises or portions thereof.
8. Information known to Lessee on any easements.
9. Inventory of any Hazardous Materials on the Premises.
10. One year of utility bills (water, gas, electricity, etc.).
11. All existing leases and/or subleases, including addendums and riders.
12. Information known to Lessee on any tenant encroachments or tenant parking covenants.
13. Any service or advertising contracts (trash, extermination, maintenance, management, union, vending, billboard, telephone, etc.) to which Lessee is a party.
14. Copies of all other agreements known to Lessee that would likely affect the use and operation of the Premises after expiration of this Lease.
15. Current insurance policies including all riders, risk assessments, and disclosure affidavit.
16. Fire system inspection reports for the previous 5 years.
17. Prior recorded liens and encumbrances which affect the interest in the Premises.
18. Existing note balances or liens.
19. If applicable, the Beneficiary Statements concerning existing note(s).
39 20. OBLIGATION TO REFRAIN FROM DISCRIMINATION.
Lessee covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry, physical or mental disability, or sexual orientation, or on the basis of any other category or status not permitted by law in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the Premises, nor shall Lessee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of residents, lessees, or vendees of the Premises or any portion thereof. The foregoing covenants shall run with the land.
Lessee, for itself and its successors and assigns, agrees that during the operation of the Improvements provided for in this Lease, and during any work of repair or replacement, Lessee shall not discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, marital status, national origin or ancestry, physical or mental disability, or sexual orientation, or on the basis of any other category or status not permitted by law.
21. COMPLIANCE WITH LAW.
Lessee agrees, at its sole cost and expense, to itself comply, and to use its commercially reasonable efforts to secure compliance by all of its contractors and all Sublessees of the Premises and Improvements (other than Lessor Maintenance Items), with all the requirements now in force, or which may hereafter be in force, of all municipal, county, state and federal authorities pertaining to the Premises and the Improvements (other than Lessor Maintenance Items), as well as operations conducted thereon, and to faithfully observe and use its commercially reasonable efforts to secure compliance by all of its contractors and all Sublessees of the Premises and Improvements (other than Lessor Maintenance Items) with, in the use of the Premises and the Improvements (other than Lessor Maintenance Items), all applicable county and municipal ordinances and state and federal statutes now in force or which may hereafter be in force. Lessee shall use good faith efforts to prevent all Sublessees from maintaining any nuisance or other unlawful conduct on or about the Premises, and shall take such actions as are reasonably required to abate any such violations by Sublessees of the Premises and Improvements (other than Lessor Maintenance Items). The judgment of any court of competent jurisdiction, or the admission of Lessee or any Sublessee or permittee in any action or proceeding against them, or any of them, whether Lessor be a party thereto or not, that Lessee, Sublessee or permittee has violated any such ordinance or statute in the use of the Premises or the Improvements (other than Lessor Maintenance Items), shall be conclusive of that fact as between Lessor and Lessee, or such Sublessee or permittee.
22. ENTRY AND INSPECTION.
Lessor reserves and shall have the right during reasonable business hours (except in cases of emergency), upon forty-eight (48) hours prior written notice (except in cases of emergency) to Lessee by Lessor, to enter the Premises and the Improvements, subject to the rights of Sublessees, for the purpose of viewing and ascertaining the condition of the same, or to inspect the operations conducted thereon. Lessor shall use commercially reasonable efforts not to 40 disrupt Lessee or the Sublessees and to minimize interference with the day to day operation of Lessor and/or the Premises in exercising its rights hereunder
23. RIGHT TO MAINTAIN.
In the event that the entry or inspection by Lessor pursuant to Section 22 hereof discloses that the Premises or the Improvements are not in accordance with the maintenance requirements set forth in Section 10.1 hereof and such failure has a material adverse impact on the operations of the Premises, Lessor shall have the right, after thirty (30) days written notice to Lessee (except in case of emergency, in which event no notice shall be necessary), which notice states in bold type as follows: "THIS NOTICE OF DEFAULT IS BEING SENT PURSUANT TO SECTION 23 OF THE LEASE, AND IF LESSEE FAILS TO CURE SUCH DEFAULT WITHIN THIRTY (30) DAYS OF ITS RECEIPT OF THIS NOTICE, OR IF LESSEE HAS NOT COMMENCED SUCH CURE WITHIN SUCH THIRTY (30) DAY PERIOD AND DILIGENTLY
PROSECUTE THE SAME TO COMPLETION, THEN LESSOR MAY EXERCISE ITS SELF HELP RIGHTS UNDER SECTION 10.2(B) OF THIS LEASE." If Lessee shall fail to take such corrective action, Lessor shall have the right to have any necessary maintenance work done for and at the expense of Lessee, and Lessee hereby agrees to pay within thirty (30) days of notice, including any reasonable back up information and invoices therefor any and all actual costs incurred by Lessor in having such necessary maintenance work done in order to keep the Premises and the Improvements in accordance with such standards, provided that the Lessor delivers such notice which is required hereunder. Such costs may include, without limitation, the reasonably necessary cost of labor, material, equipment, the value of services provided by Lessor's employees in the actual performance of the repairs and replacements (but not administrative duties), and the cost of contractors and professional services as may be reasonably incurred or paid by Lessor. The rights reserved in this Section 23 shall not create any obligations on Lessor or increase obligations elsewhere in this Lease imposed on Lessor.
24. EVENTS OF DEFAULT AND REMEDIES.
24.1 Events of Default by Lessee. The occurrence of any one or more of the following shall constitute an event of default hereunder:
(a) Lessee shall fail to construct and redevelop the Marina Redevelopment Project in accordance with this Lease and within the times set forth in this Lease, subject to force majeure delays as set forth in this Lease, within one hundred eighty (180) days of notice from the Lessor, that such construction has not been completed within the required time, specifying the failure complained of, or if it is not reasonably practicable to cure or remedy such failure within such one hundred eighty (180) day period, then Lessee shall not be deemed to be in default if Lessee shall commence such cure within such one hundred eighty (180) day period and thereafter diligently prosecutes such cure to completion; or
(b) Lessee shall abandon or surrender the Premises or the Improvements; or (c) Lessee shall fail or refuse to pay, within ten (10) days of notice from Lessor that the same is due, any installment of Rent or any other sum required by this Lease to be paid by Lessee; or
41 (d) Lessee shall fail to materially perform any material covenant or condition of this Lease, other than as set forth in subparagraphs (a), (b) or (c) above, and any such failure is not cured within thirty (30) days following the service on Lessee of a written notice from Lessor specifying the failure complained of, or if it is not reasonably practicable to cure or remedy such failure within such thirty (30) day period, then Lessee shall not be deemed to be in default if Lessee shall commence such cure within such thirty (30) day period and thereafter diligently prosecutes such cure to completion; or
(e) Subject to any restrictions or limitations placed on Lessor by applicable laws governing bankruptcy, Lessee’s (i) application for, consent to or suffering of the appointment of a receiver, trustee or liquidator for all or for a substantial portion of its assets; (ii) making a general assignment for the benefit of creditors; (iii) admitting in writing its inability to pay its debts or its willingness to be adjudged a bankrupt; (iv) being adjudged a bankrupt or adjudged to be insolvent; (v) filing a voluntary petition or suffering an involuntary petition under any bankruptcy, arrangement, reorganization or insolvency law (unless in the case of an involuntary petition, the same is dismissed within ninety (90) days of such filing); (vi) convening a meeting of its creditors or any class thereof for purposes of effecting a moratorium, extension or composition of its debts; or (vii) suffering or permitting to continue unstayed and in effect for ninety (90) consecutive days any attachment, levy, execution or seizure of all or a substantial portion of Lessee’s assets or of Lessee’s interest in this Lease.
24.2 Remedies of Lessor.
In the event of any such default as described in Section 24.1, Lessor may, at its option:
(a) Exercise its right to maintain any and all actions at law or suits in equity to compel Lessee to correct or cause to be corrected said default. (b) Have a receiver appointed to take possession of Lessee’s interest in the Premises and the Improvements, with power in said receiver to administer Lessee’s interest in the Premises and the Improvements, to collect all funds available to Lessee in connection with its operation and maintenance of the Premises and the Improvements; and to perform all other acts consistent with Lessee’s obligation under this Lease as the court deems proper. (c) Terminate this Lease and immediately regain possession of the Premises and the Improvements. Prior to termination of this Lease as a result of an Event of Default and expiration of the applicable cure period, Lessor shall provide Lessee with a final notice of default and Lessee shall have an additional fifteen (15) business days from its receipt of such notice to cure the outstanding Event of Default. No act by Lessor other than giving written notice to Lessee of Lessor’s election to terminate Lessee’s right to possession shall terminate this Lease. (d) Exercise any other remedies permitted by law.
24.3 Damages. Damages which Lessor recovers in the event of default under this Lease shall be those which are then available under applicable California case and statutory law to lessors for leases in the State of California including, but not limited to, any accrued but unpaid rent and the worth at the time of award of the amount by which the unpaid rent for the balance of the term of this Lease after the date of award exceeds the amount of such rental loss for the same period 42 that Lessee proves could be reasonably avoided, provided that in no event shall Lessor be entitled to accelerate any amount of unpaid rent due under this Lease following a default by Lessee.
Rather, such amounts shall remain payable annually as they would have come due under this Lease. To avoid a multiplicity of actions, Lessor may obtain a decree of specific performance requiring Lessee to pay the damages stated in this Section 24.3 as they accrue. If any legal or equitable action or proceeding results in a final determination unfavorable to Lessee, except for an action or proceeding that results in a determination that Lessee failed to timely pay rent or any other payment due under this Lease, Lessee may request that any final judgment provides Lessee with up to ninety days to cure whatever Event of Default that Lessee was determined to have committed. If the final judgment allows for such additional time to cure the default then it must also provide that Lessee shall surrender the premises on the ninety-first (91st) day following entry of the final judgment if the Event of Default has not been cured.
24.4 Rights and Remedies are Cumulative. The remedies provided by this Section 24 are not exclusive and shall be cumulative to all other rights and remedies possessed by Lessor.
The exercise by Lessor of one or more such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by Lessee.
24.5 Rights of Lenders.
(a) General Provisions. If Lessee encumbers its leasehold estate by way of a mortgage as permitted under Section 15 hereof, and if Lessor is advised in writing of the name and address of the holder of the mortgage (the "Mortgagee"), then this Lease shall not be terminated or canceled on account of any Event of Default by Lessee in the performance of the terms, covenants or conditions hereof until Lessor shall have complied with the provisions of this Lease as to the Mortgagee's rights to cure and to obtain a new lease. (b) Consent of Mortgagee Required. No cancellation, surrender, termination, or modification of this Lease shall be effective without the written consent of the holder of each Mortgage.
(c) Rights and Obligations of Leasehold Mortgagees. If Lessee or Lessee's successors or assigns shall mortgage the leasehold interest herein demised, then, as long as any such Mortgage shall remain unsatisfied of record, the following provisions shall apply:
i. No Cancellation. Lessor will not cancel, accept a surrender of, terminate or modify this Lease without the prior consent in writing of the Mortgagee. ii. Notice of Defaults. Lessor agrees to give Mortgagee immediate notice of all defaults by Lessee under this Lease, and to simultaneously give to Mortgagee a written copy of all notices and demands that Lessor gives to Lessee. No notice or demand under this Lease shall be effective until after notice is received by Mortgagee. Any notices of default given by Lessor under this Lease shall describe the default(s) with reasonable detail. Mortgagee shall have the right, but not the obligation to cure any breach or default within the time periods given below. (d) Mortgagee's Cure Rights.
43 i. Notice and Cure. After receipt by Lessee of a notice of default under this Lease and the expiration of any applicable period of cure given to Lessee under this Lease, Lessor shall deliver an additional notice ("Mortgagee's Notice") to Mortgagee specifying the default and stating that Lessee's period of cure has expired. Mortgagee shall thereupon have the additional periods of time to cure any uncured default, as set forth below, without payment of default charges, fees, late charges or interest that might otherwise be payable by Lessee. Lessor shall not terminate this Lease or exercise its other remedies under this Lease if either:
a) Within ninety (90) days after the receipt of Mortgagee’s Notice, Mortgagee (i) cures the default, or (ii) if the default reasonably requires more than ninety (90) days to cure, commences to cure said default and diligently prosecutes the same to completion; or
b) Where the default cannot be cured by Mortgagee by
payment to City or without possession of the Premises or otherwise, Mortgagee initiates foreclosure or other appropriate proceedings within such ninety (90) cure period, cures all other defaults reasonably capable of cure, by Mortgagee, and continues to pay all rent, real property taxes and assessments, and insurance premiums to be paid by Lessee under this Lease (subject to Mortgagee’s notice and cure rights provided herein). Mortgagee shall then have sixty (60) days following the later to occur of (i) the date of execution and delivery of a New Lease (as defined below), or (ii) the date on which Mortgagee or its nominee is able to occupy the Premises following its foreclosure (or acceptance of a deed in lieu of foreclosure) and the eviction of or vacating by Lessee under this Lease, to cure such default; provided, however, that if any such default, by its nature, is such that it cannot practicably be cured within sixty (60) days, then Mortgagee shall have such additional time as shall be reasonably necessary to cure the default provided that Mortgagee commences such cure within such sixty (60) day period and thereafter diligently prosecutes the cure to completion. Notwithstanding the foregoing, Lessor will not terminate this Lease, or Lessee’s right of possession hereunder (but may exercise any other right or remedy hereunder) by reason of any nonmonetary event of default hereunder, (a) as long as the Mortgagee, in good faith, shall have commenced to cure such default as set forth above, and (b) if possession of the Premises is required by the Mortgagee in order to cure such default, as long as the Mortgagee, in good faith, institutes foreclosure proceedings under the Mortgage or other proceedings to acquire this Lease or the ownership interests in Lessee and, thereafter, as long as such proceedings shall have been instituted and shall be prosecuted with due diligence. ii. Lessor agrees to accept performance by Mortgagee of all cures, conditions and covenants as though performed by Lessee, and agrees to permit Mortgagee access to the Premises to take all such actions as may be reasonably necessary or useful to perform any condition or covenants of this Lease or to cure any default of Lessee. Mortgagee shall not be required to perform any act which is not susceptible to performance by Mortgagee. iii. If Mortgagee elects any of the above-mentioned options, then upon Mortgagee's acquisition of this Lease by foreclosure, whether by power of sale or otherwise or by deed or assignment in lieu of foreclosure, or if a receiver be appointed, this Lease shall continue in full force and effect, provided that, if Mortgagee elects any option provided in clause (b)(ii) above, then upon Mortgagee's acquisition of this Lease, Mortgagee shall, subject to subparagraph (h) below, cure all prior defaults of Lessee under this Lease that are reasonably capable of being 44 cured by Mortgagee within the time set forth in said Section, and Lessor shall treat Mortgagee as Lessee under this Lease. If Mortgagee commences an action as set forth above, and thereafter Lessee cures such defaults (which cure Lessor shall be obligated to accept) and Mortgagee then terminates all proceedings under the option in said Section, then this Lease shall remain in full force and effect between Lessor and Lessee.
(e) New Lease. In the event this Lease is terminated for any reason prior to the end of the Lease Term, City shall give Mortgagee prompt written notice of such fact, and Lessor shall enter into a new lease ("New Lease") with Mortgagee or Mortgagee's nominee covering the Premises, provided that Mortgagee (a) requests such New Lease by written notice to Lessor within thirty (30) days after Mortgagee’s receipt of written notice by Lessor of termination of this Lease, and (b) cures all prior defaults of Lessee that are reasonably capable of being cured by Mortgagee by the payment of money to Lessor. The New Lease shall be for the remainder of the Lease Term, effective at the date of such termination, and shall only include all the rents and all the covenants, agreements, conditions, provisions, restrictions and limitations contained in this Lease, except as otherwise provided in this Lease. In connection with a New Lease, Lessor shall assign to Mortgagee or its nominee all of Lessor's interest in all existing subleases of all or any part of the Premises and all attornment given by the Sublessees. Lessor shall not terminate or agree to terminate any sublease or enter into any New Lease or sublease for all or any portion of the Premises without Mortgagee's prior written consent, unless Mortgagee fails to deliver its request for a New Lease under this Section. In connection with any such New Lease, Lessor shall, by grant deed, convey to Mortgagee or its nominee title to the Improvements, if any, which become vested in Lessor as a result of termination of this Lease. Lessor shall allow the Lessee under the New Lease a credit equal to the net income derived by Lessor from the Premises during the period from the date of termination of this Lease until the date of execution of the New Lease under this Section, against rent due during such period.
(f) Security Deposits. Mortgagee or any other purchaser at a foreclosure sale of the Mortgage (or Mortgagee or its nominee if one of them enters into a New Lease with Lessor) shall succeed to all the interest of Lessee in any security or other deposits or other impound payments paid by Lessee to Lessor.
(g) Permitted Delays. So long as Mortgagee is prevented by any process or injunction issued by any court or by any statutory stay, or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding, from commencing or prosecuting foreclosure or other appropriate proceedings in the nature thereof, Mortgagee shall not be deemed for that reason to have failed to commence such proceedings or to have failed to diligently prosecute such proceedings.
(h) Defaults Deemed Cured. On transfer of this Lease at any foreclosure sale under the Mortgage or by deed or assignment in lieu of foreclosure, or upon creation of a New Lease, all of the following defaults relating to the prior owner of this Lease shall be deemed cured:
i. Attachment, execution or other judicial levy upon this Lease or the leasehold estate hereby created;
45 ii. Assignment of this Lease or the leasehold estate hereby created for the direct or indirect benefit of creditors of any prior Lessee; iii. Judicial appointment of a receiver or similar officer to take possession of the Premises, this Lease or any property of any prior Lessee not located on the Premises;
iv. Filing any petition by, for or against any prior Lessee (or any affiliate) under any chapter of the federal Bankruptcy Act or any federal or state debtor relief statute, as amended;
v. Any failure by any prior Lessee to make a disclosure of a hazardous substance release as required by the California Health and Safety Code, this Lease or otherwise; vi. Any default under any provision restricting transfers of Lessee’s interest in this Lease;
vii. Any breach of any representation or warranty given by any prior Lessee;
viii. Any other defaults personal to Lessee and/or not otherwise reasonably curable by each Mortgagee.
Anything herein contained to the contrary notwithstanding, and except as expressly provided herein, the provisions of this Section shall inure only to the benefit of the holders of Mortgages (and their successors and assigns). If the holders of more than one such Mortgage shall make written requests upon Lessor in accordance with this Lease for a new lease, the new lease (as provided for above) shall be entered into pursuant to the request of the holder whose Mortgage shall be prior in lien (taking into account all applicable subordination agreements) to all Mortgagees timely submitting a request for a New Lease, and thereupon the written requests for a New Lease of each holder of a Mortgage junior in lien shall be and be deemed to be void and of no force or effect.
(i) Mortgagee's Forbearance and Right to Cure Defaults on Leasehold Mortgages.
i. Notice. Lessor will give to Mortgagee a copy of each notice or other communication with respect to any claim that a default exists or is about to exist from Lessor to Lessee hereunder at the time of giving such notice or communication to Lessee, and Lessor will give to Mortgagee a copy of each notice of any rejection of this Lease in bankruptcy of Lessee.
Lessor will not exercise any right, power or remedy with respect to any Event of Default hereunder, and no notice to Lessee of any such Event of Default and no termination of this Lease in connection therewith shall be effective, unless (a) Lessor has given to Mortgagee written notice or a copy of its notice to Lessee of such Event of Default or any such termination, as the case may be and (ii) no Mortgagee has timely exercised its right to prevent the termination of this Lease or acquire a new lease in accordance herewith.
46 ii. Mortgagee's Transferees, Etc. Notwithstanding anything to the contrary set forth elsewhere herein, in the event the leasehold estate hereunder shall be acquired by foreclosure, trustee's sale or deed or assignment in lieu of foreclosure of a Mortgage, the purchaser at such sale or the transferee by such assignment and its successors as holders of the leasehold estate hereunder shall not be liable for any rent, if any, or other obligations accruing prior to or after its or their subsequent sale or transfer of such leasehold estate and such purchaser or transferee and its successors shall be entitled to transfer such estate or interest without consent or approval of Lessor; provided that, the purchaser or transferee or successor as holder of the leasehold estate hereunder shall be liable for the payment of all rent, if any, becoming due with respect to the period during which such purchaser, transferee or other successor is the holder of the leasehold estate hereunder. This Section shall also apply to the rights of a Mortgagee in connection with the entry into a new lease and to the appointment of a receiver on behalf of a Mortgagee.
iii. Insurance and Condemnation. All insurance and condemnation proceeds, notwithstanding anything to the contrary contained herein, shall be paid to the Mortgagee who, at the time of casualty or condemnation, holds the senior-most Mortgage in terms of lien priority (as determined taking into account all applicable subordination agreements), and applied in accordance with the terms and provisions of its Mortgage and related loan documents. iv. In addition, each Investor and Investor Member shall have all of the rights and remedies granted to a Mortgagee hereunder.
(j) No Liability of Mortgagee for Prior Indemnified Acts. A Mortgagee shall not be obligated to assume the liability of Lessee for any indemnities arising for a period prior to Mortgagee's acquiring the right to possession of the Premises under this Lease. (k) Lessor Cooperation. Lessor covenants and agrees that it will act and fully cooperate with Lessee in connection with Lessee's right to grant leasehold mortgages as hereinabove provided. At the request of Lessee or any proposed or existing Mortgagee, Lessor shall promptly execute and deliver (i) any documents or instruments reasonably requested to evidence, acknowledge and/or perfect the rights of Mortgagees as herein provided, including, without limitation, any deed(s) of trust encumbering Lessor’s fee title in the Premises as security for loans obtained by Lessee in connection with the Premises; and (ii) an estoppel certificate certifying the status of this Lease and Lessee's interest herein and such matters as are reasonably requested by Lessee or such Mortgagees. Such estoppel certificate shall include, but not be limited to, certification by Lessor that (a) this Lease is unmodified and in full force and effect (or, if modified, state the nature of such modification and certify that this Lease, as so modified, is in full force and effect), (b) all rents currently due under this Lease have been paid, (c) there are not, to Lessor's knowledge, any uncured Events of Default on the part of Lessee under this Lease or facts, acts or omissions which with the giving of notice or passing of time, or both, would constitute an Event of Default. Any such estoppel certificate may be conclusively relied upon by any proposed or existing leasehold Mortgagee or assignee of Lessee's interest in this Lease. (l) Claims. Lessor and Lessee shall deliver to Mortgagee notice of any litigation or arbitration proceedings between the parties or involving the Premises or this Lease.
Mortgagee shall have the right, at its option, to intervene and become a party to any such 47 proceedings. If Mortgagee elects not to intervene or become a party, Lessor shall deliver to Mortgagee prompt notice of and a copy of any award, decision or settlement agreement made in connection with any such proceeding.
(m) Further Amendments. Lessor and Lessee shall reasonably consider including in this Lease by suitable amendment from time to time any provision which may be reasonably requested by any proposed Mortgagee for the purpose of implementing the mortgagee protection provisions contained in this Lease and allowing that Mortgagee reasonable means to protect or preserve the lien of its Mortgage upon the occurrence of a default under the terms of this Lease. Lessor and Lessee each agree to execute and deliver (and to acknowledge for recording purposes, if necessary) any agreement required to effect any such amendment which they have approved.
25. MISCELLANEOUS.
25.1 Governing Law. The laws of the State of California shall govern the interpretation and enforcement of this Lease.
25.2 Legal Actions. In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Lease. Such legal actions must be instituted in the Superior Court of Los Angeles County, State of California.
25.3 Acceptance of Service of Process. In the event that any legal action is commenced by Lessee against Lessor, service of process on Lessor shall be made by personal service upon the City Clerk of Lessor, or in such other manner as may be provided by law. In the event that any legal action is commenced by Lessor against Lessee, service of process on Lessee shall be made by personal service upon Lessee or in such other manner as may be provided by law, and shall be effective whether made within or without the State of California.
25.4 Attorneys’ Fees and Court Costs. In the event that either Lessor or Lessee shall bring or commence an action to enforce the terms and conditions of this Lease or to obtain damages against the other party arising from any default under or violation of this Lease, then the prevailing party shall be entitled to and shall be paid reasonable attorneys’ fees and court costs therefor in addition to whatever other relief such prevailing party may be entitled.
25.5 Notices. All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder by either party to the other shall be in writing and shall be given either by (i) personal service, (ii) delivery by reputable document delivery service such as Federal Express that provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail, certified or registered mail, return receipt requested, postage prepaid, and addressed as follows:
To City: City of Redondo Beach
415 Diamond Street
Redondo Beach, CA 90277
Attn: City Manager
48 With copies to: City of Redondo Beach
415 Diamond Street
Redondo Beach, CA 90277
Attn: Waterfront and Economic Development
Director
City of Redondo Beach
415 Diamond Street
Redondo Beach, CA 90277
Attn: City Attorney
To Lessee: LGW Investments, LLC
2500 Via Cabrillo Marina, Suite 306
San Pedro, CA 90731
Attention: R. Kevin Ketchum
Demetriou, Del Guercio, Springer & Francis, LLP
915 Wilshire Boulevard, Suite 2000
Los Angeles, California 90017
Attention: Stephen A. Del Guercio
or to such other address as either party shall later designate for such purposes by written notice to the other party. Lessor shall also give copies of such notices to any party in interest under a Permitted Encumbrance which has requested such notice. Notices shall be deemed effective upon personal delivery; provided, however that refusal to accept delivery after reasonable attempts thereto shall constitute receipt. Any notices attempted to be delivered to an address from which the receiving party has moved without notice to the delivering party shall be effective on the third day after the attempted delivery or deposit in the United States mail.
25.6 Time is of the Essence. Time is of the essence in the performance of the terms and conditions of this Lease.
25.7 Non Merger of Fee and Leasehold Estates. If both Lessor’s and Lessee’s estates in the Premises or the Improvements or both become vested in the same owner, this Lease shall nevertheless not be destroyed by application of the doctrine of merger unless all persons at the time having an interest in the fee estate in the Premises and the Improvements and all persons having an interest in this Lease, or in the leasehold estate created by this Lease, shall join in a written instrument effecting such merger and shall duly record the same. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, shall not work as a merger and shall, subject to the rights of any Mortgagee under Section 24, at the option of Lessor, terminate all or any existing tenant leases or subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all such existing tenant leases or subtenancies. 49 25.8 Holding Over. The occupancy of the Premises after the expiration of the Term of this Lease shall be construed to be a tenancy from month to month, and all other terms and conditions of this Lease shall continue in full force and effect.
25.9 Conflict of Interest. No member, official or employee of Lessor shall have any personal interest, direct or indirect, in this Lease nor shall any such member, official or employee participate in any decision relating to this Lease which affects his personal interests or the interests of any limited partnership, partnership or association in which he is directly or indirectly interested.
Lessee warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Lease.
25.10 Non Liability of Lessor Officials and Employees. No member, official, officer, employee, agent, or representative of Lessor shall be personally liable to Lessee, or any successor in interest, in the event of any default or breach by Lessor or for any amount which may become due to Lessee or successor or on any obligations under the terms of this Lease.
25.11 Relationship. The relationship between the parties hereto shall at all times be deemed to be that of landlord and tenant. The parties do not intend nor shall this Lease be deemed to create a partnership or joint venture. Lessee acknowledges and agrees that, except as expressly provided elsewhere in this Lease, neither this Lease nor any other agreement with Lessor in its proprietary capacity as Lessee shall bind the City in its regulatory capacity and that nothing contained herein is an agreement of the City as a governmental body having regulatory jurisdiction of the Premises to issue or grant to Lessee any permit, including building, grading or other land use permits. Lessee shall be required to apply for and obtain all permits including building, grading and other land use permits needed from the City in its governmental regulatory capacity, and to comply with all laws, ordinances, rules and regulations of City.
25.12 Waivers and Amendments. All waivers of the provisions of this Lease must be in writing and signed by the appropriate authorities of Lessor or Lessee. The waiver by Lessor or Lessee of any breach of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition, or any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by Lessor shall not be deemed to be a waiver of any preceding breach of Lessee of any term, covenant or condition of this Lease, regardless of Lessor’s knowledge of such preceding breach at the time of acceptance of such rent. Failure on the part of Lessor or Lessee to require or exact full and complete compliance with any of the covenants or conditions of this Lease shall not be construed as in any manner changing the terms hereof and shall not prevent Lessor or Lessee, as the case may be, from enforcing any provision hereof. All amendments hereto must be in writing and signed by the appropriate authorities of Lessor and Lessee. The Lessee’s mortgagee permitted by this Lease shall not be bound by any waiver or amendment to this Lease without each of Lessee’s mortgagees giving their prior written consent.
25.13 Merger with Prior Agreements. This Lease contains the entire understanding between the parties hereto relating to the transaction contemplated by this Lease. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Lease and shall be of no further force or effect. Each party is entering this Lease 50 based solely upon the representations set forth herein and upon each party’s own independent investigation of any and all facts such party deems material.
25.14 Entire Agreement; Duplicate Originals; Counterparts. This Lease sets forth the entire understanding of the parties with respect to Lessee’s ground lease of the Premises. This Lease is executed in three (3) duplicate originals and counterparts, each of which is deemed to be an original. This Lease includes six exhibits, Exhibits A, B, C, D, E and F.
25.15 Severability. If any provision of this Lease or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Lease and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforceable to the greatest extent permitted by law.
25.16 Terminology. All personal pronouns used in this Lease, whether used in the masculine, feminine, or neuter gender, shall include all other genders; the singular shall include the plural, and vice versa. Titles of sections are for convenience only, and neither limit nor amplify the provisions of this Lease itself.
25.17 Recordation. A short form memorandum of this Lease, in the form attached hereto as Exhibit “F”, shall be recorded at or within five (5) working days after the time this Lease is executed.
25.18 Binding Effect. This Lease, and the terms, provisions, promises, covenants and conditions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.
25.19 Estoppel Certificate. Each of the parties shall at any time and from time to time upon not less than twenty (20) days’ prior notice by the other, execute, acknowledge and deliver to such other party a statement in writing certifying that this Lease is unmodified and is in full force and effect (or if there shall have been modifications that this Lease is in full force and effect as modified and stating the modifications), and the dates to which the rent has been paid, and stating whether or not to the best knowledge of the signer of such certificate such other party is in default in performing or observing any provision of this Lease, and, if in default, specifying each such default of which the signer may have knowledge, and such other matters as such other party may reasonably request, it being intended that any such statement delivered by Lessee may be relied upon by Lessor or any successor in interest to Lessor or any prospective mortgagee or encumbrancer thereof, and it being further intended that any such statement delivered by Lessor may be relied upon by any prospective assignee of Lessee’s interest in this Lease or any prospective mortgagee or encumbrancer thereof. Reliance on any such certificate may not extend to any default as to which the signer of the certificate shall have had no actual knowledge.
25.20 Force Majeure. In addition to specific provisions of this Lease, performance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Lease shall be extended, where delays or Defaults are due to causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform, which may include the following: war; acts of terrorism; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine 51 restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; delays due to litigation, initiative or referendum; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier (other than a contractor, subcontractor or supplier in which Developer has a twenty-five percent (25%) or more ownership interest, or which is controlled by Developer, or which is an affiliated entity of Developer); acts or omissions of the other Party; or acts or failures to act of any other public or governmental agency or entity (other than the acts or failures to act of Lessor which shall not excuse performance by Lessor). Notwithstanding anything to the contrary in this Lease, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the date that such party has actual knowledge of the commencement of the cause. Times of performance under this Lease may also be extended in writing by the mutual agreement of Lessor and Lessee.
25.21 Further Actions and Instruments; City Manager Authority. Each of the parties shall reasonably cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Lease and the satisfaction of the conditions of this Lease. Upon the request of either party at any time, the other party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Lease to carry out the intent and to fulfill the provisions of this Lease or to evidence or consummate the transactions contemplated by this Lease. Lessor hereby authorizes the City Manager to make approvals, issue interpretations, waive provisions, make and execute further agreements and/or enter into amendments of this Lease on behalf of the Lessor so long as such actions do not materially or substantially change the uses or construction permitted on the Premises, or materially or substantially add to the costs incurred or to be incurred by the Lessor as specified herein, or reduce the revenue earned or to be earned by Lessor, as may be necessary or proper to satisfy the purpose and intent of this Lease. Notwithstanding the foregoing, the City Manager shall maintain the right to submit to the City Council for consideration and action any action or additional agreement under the City Manager’s authority if the City Manager desires to do so. The City Manager may delegate some or all of his or her powers and duties under this Lease to one or more management level employees of the City.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their lawfully authorized officers.
LESSOR:
CITY OF REDONDO BEACH,
a chartered city and municipal corporation
By: __________________________________
52 ATTEST:
________________________
Eleanor Manzano, City Clerk
APPROVED AS TO FORM:
___________________________
___________________, City Attorney
LESSEE:
LGW INVESTMENTS, LLC ,
a California limited liability company
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT A
PREMISES MAP
[Attached]
Exhibit “A” - Map of Premises
EXHIBIT B
LEGAL DESCRIPTION OF PREMISES
[Attached]
Exhibit "B" - Legal Description of Premises Page 1 of 4 Exhibit "B" - Legal Description of Premises Page 2 of 4 Exhibit "B" - Legal Description of Premises Page 3 of 4 Exhibit "B" - Legal Description of Premises Page 4 of 4
EXHIBIT C
SCOPE OF DEVELOPMENT
[To Be Inserted]
EXHIBIT D
SCHEDULE OF PERFORMANCE
[Attach construction schedule for the phased construction of the Marina Redevelopment Project submitted by Lessee and approved by Lessor pursuant to Section 4.1 of the Option Agreement]
EXHIBIT E
USE AND OPERATING PLAN
I. Specific Permitted Uses. The following specific uses are acknowledged to be within the permitted use of the Premises as set forth in Section 6.1 of the Lease:
a) Rental of boat slips to the public for berthing of boats and uses incidental thereto. When boat slips rented on a month-to-month basis or longer terms are vacated and not immediately re-rented to a replacement tenant on a month-to-month basis or longer term, such boat slips shall be made available for short term hourly or daily rentals until such boat slip is needed for a new tenant on a month-to-month basis or longer term; b) Live-aboard for berthing customers; provided that the number of boat slips rented to liveaboard customers shall not at any time be less than two percent (or such lower percentage with the approval of the City Manager, which approval shall not be unreasonably withheld), or more than ten percent (or such higher percentage with the approval of the City Manager, which approval shall not be unreasonably withheld), of the total number of boat slips in the Premises;
c) Rental of lockers, dinghy racks, and dry storage area spaces to berthing customers; d) Boat launching and retrieving services for berthing customers; e) “Minor Marine Services,” defined herein as sale and installation of small boat parts and components, and minor services and labor, inclusive of minor boat repairs, maintenance, cleaning, and similar minor services, to berthing customers; f) Parking;
g) Office(s) for marina management;
h) Rental of recreation equipment, including personal watercraft, bicycles, electric bicycles, skates, and motor scooters;
i) Office space rental;
j) Sale of new and used boats;
k) Insurance;
l) Boat rentals and charters;
m) Sailing school;
n) Boat and breakfast operations;
o) Yacht club;
p) Boat club;
q) General retail;
r) Food sales;
s) Bar sales;
t) Retail sales;
u) Vending/laundry machines; and
v) Special event venue.
Other Specific Permitted Uses: The parties acknowledge that the foregoing list of specific permitted uses is not intended to be a comprehensive list of activities permitted by the permitted use specified in Section 6.1 of the Lease, nor is Lessee required to engage in all of the foregoing described activities. In the event that Lessee proposes to engage in an activity that is not described in the foregoing list of specific permitted uses, then Lessee shall propose to Lessor an update to the foregoing list of specific permitted uses in accordance with the Use and Operation Plan update procedure described in Section 6.1 of the Lease. In the event that the foregoing list is updated to include an activity that is not specifically assigned a percentage rent rate in Section 4.1(d)(i) of the Lease, then the percentage rent rate for such activity shall be as set forth in subclause (20) of said Section, unless otherwise specified in the updated Use and Operations Plan.
II. Operation Plan.
a) Continuous Operation: During the Term, Lessee (or its applicable Sublessees) will be open for business with the general public and continuously during business hours (except for reasonable temporary periods necessary for maintenance, repairs, and installation of equipment and tenant improvements) and uninterruptedly conduct within the Premises the business which it is permitted to conduct under this Lease, except to the extent the Premises are untenantable by reason of fire or other casualty or other event of force majeure. Lessee will keep and maintain within and upon the Premises an adequate staff of workers, merchandise, equipment, materials and fixtures to present itself during business hours as open and available for business and to service the usual and ordinary demands of its customers.
b) Prices: Lessee shall maintain a schedule available on the Premises of the prices charged for slip rentals and related services and make the schedule available to Lessor’s Harbor Director from time to time. All prices, rates and charges shall be established by Lessee in consideration of investment and a profit and economic return to Lessee and in consideration of the generation of revenues to Lessor from Percentage Rent based on prices, rates and charges that reflect market demand. In no event shall the additional rent charged for a live-aboard rental exceed fifty percent (50%) of the rent charged for the associated slip rental.
c) Experience and Skill: Lessee shall through competent and attentive management give attention to efficient supervision of operations on the Premises, using its best skill in a business-like manner, and shall keep employed at all times a competent supervisor for the operation of the Premises and any necessary competent assistants. d) Commercial Operations By Tenants. In the event that Lessee becomes aware, Lessee shall promptly provide written notice to Lessor of any tenant of a boat slip who is operating a commercial business (such as charter vessels or boat rentals) from a boat slip or other portion of the Premises.
EXHIBIT F
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
)
City of Redondo Beach )
415 Diamond Street )
Redondo Beach, California 90277 )
Attention: City Clerk )
)
Exempt From Recording Fee Pursuant to Government Code
Sections 6103 and 27383
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE (“Memorandum”) is hereby entered into as of ________________, 202_ by and between the CITY OF REDONDO BEACH, a charter city and municipal corporation (the “Lessor”), and a LGW INVESTMENTS, LLC, a California limited liability company (the “Lessee”).
RECITALS
A. Lessor and Lessee have entered into a “Lease” dated concurrently herewith for those certain parcels of real property which are legally described in Exhibit A attached hereto and incorporated herein by reference (the “Premises”). A copy of the Lease is available for public inspection at Lessor’s office at 415 Diamond Street, Redondo Beach, California. The term of the Ground Lease ends on April 16, 2082.
B. The Lease provides that a short form memorandum of the Lease shall be executed and recorded in the Official Records of Los Angeles County, California.
NOW, THEREFORE, the parties hereto certify as follows:
Lessor, pursuant to the Lease, hereby leases the Premises to the Lessee upon the terms and conditions provided for therein. This Memorandum of Lease is not a complete summary of the Lease, and shall not be used to interpret the provisions of the Lease.
LESSOR:
CITY OF REDONDO BEACH, a
California charter city and municipal
corporation
By:
ATTEST:
_________________________
Eleanor Manzano, City Clerk
APPROVED AS TO FORM:
____________________________
_____________________, City Attorney
LESSEE:
LGW INVESTMENTS, LLC, a California
limited liability company
By:
By:
Exhibit A to Memorandum of Lease
EXHIBIT A TO MEMORANDUM OF LEASE
LEGAL DESCRIPTION
That real property located in the City of Redondo Beach, County of Los Angeles, State of California, described as follows:
Exhibit A to Memorandum of Lease
STATE OF CALIFORNIA
COUNTY OF
___________________________
On ____________________, before me, ____________________________, a 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/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their 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.
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
Exhibit A to Memorandum of Lease
STATE OF CALIFORNIA
)
COUNTY OF
___________________________
)
On ____________________, before me, ____________________________, a 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/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their 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.
Notary Public
5499410.3
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
EXHIBIT G
INGRESS AND EGRESS RIGHT-OF-WAY
[To be prepared by the parties and attached pursuant to Section 6 of the Option Agreement.]