HomeMy WebLinkAboutC-3404-1 - Harbor Island Drive, 829 - Lease (Tenant 1) "Balboa Yacht Basin"LEASE AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH AND
BASIN MARINE, INC.
This Lease Agreement ("Lease") is made and entered into as of January
28, 2025 ("Effective Date"), by and between the City of Newport Beach, a California
municipal corporation and charter city ("City") and Basin Marine, Inc., a California
corporation ("Tenant"). City and Tenant are each a "Party," and together the
"Parties," to this Lease.
RECITALS
A. By virtue of a 1978 California legislative grant found in Chapter 74 of the Statutes
of 1978, as amended, ("Tidelands Grant"), City acts on behalf of the State of
California as trustee of certain tidelands located within the City's limits, including
certain harbor frontage tidelands near the Balboa Island Channel ("Tidelands").
City is also the fee owner of certain abutting upland property containing parking
and other commercial uses, collectively more commonly known as "Balboa Yacht
Basin" located at 829 Harbor Island Drive, Newport Beach, California (APN 050-
210-02), as depicted in Exhibit "A" attached hereto and incorporated herein by
reference ("Property"). The City is in the project planning phase to redevelop a
portion of the Property during the Term of this Lease as provided in Section 3
below.
B. The Tidelands Grant provides that the Tidelands must be used to promote the
public's interest in water -dependent or water -oriented activities, and shall not, at
any time, be granted, conveyed, given, or alienated to any individual, firm or
corporation for any purpose whatsoever except pursuant to City's grant of either a
franchise or lease.
C. The Tidelands Grant authorizes City to enter into leases of the Tidelands for a
period not to exceed fifty (50) years, so long as such leases are consistent with
City's obligations to hold the Tidelands in trust for the uses and purposes contained
in the Tidelands Grant.
D. Since the 1970s, Tenant has operated a portion of the Property, excluding the
bulkhead and bulkhead cap, for a shipyard and boat repair facility with a marine
hardware store, as depicted in Exhibit "B" attached hereto and incorporated
herein, (leasehold APN 988-011-26), with the street address of 829 Harbor Island
Drive, Suite A, Newport Beach, California 92660 (the "Premises"), and most
recently under a lease agreement dated January 1, 2001, which will expire on
December 31, 2026 ("Existing Lease"), and as depicted in the Memorandum of
Lease Agreement attached as Exhibit "H" attached hereto and incorporated
herein..
E. Tenant desires to perform significant capital improvements and repairs to the
Premises and requests to extend its lease commensurate with the life of the
investment; therefore, Tenant and City desire to terminate the Existing Lease and
enter into a new Lease to allow Tenant to continue to operate a shipyard, retail
marina store, and boat repair facility on the Premises as a benefit to the harbor
and the City's on -site marina operations, for an extended term upon revised terms
and conditions as provided in this Lease.
F. Pursuant to City Council Policy F-7, City sought the assistance of an appraiser to
determine fair market value rent for the Premises and determined that an open bid
process is not required because converting the Premises to another use or
changing the Tenant would result in excessive vacancy, relocation or severance
costs, which would outweigh other financial benefits. Furthermore, the Premises
provides marine related services to the public and are utilized by the City, as further
detailed in Section 6 below.
G. The uses to be made of the property subject to this Lease are consistent with
provisions of the Tidelands Grant pursuant to which the City obtained title to the
Property.
AGREEMENT
NOW, THEREFORE, subject to the above Recitals, and in consideration of the
respective obligations of each Party and the mutual covenants herein contained, City and
Tenant hereby agree as follows:
1. LEASE OF PREMISES
1.1 City leases the Premises exclusively to Tenant and Tenant leases the
Premises from City for the Term and on the terms, conditions and provisions contained
in this Lease.
1.2 Tenant expressly acknowledges that the legislature of the State of California
has placed public trust restrictions on use of the Premises pursuant to the Tidelands Grant
as a portion of the Premises constitute filled tidelands. Tenant shall not take any action
that would cause the City to be in violation of any provisions of the Tidelands Grant. If
the State of California terminates or modifies the Tidelands Grant to prohibit the uses
contemplated under this Lease, this Lease shall terminate as a result and the parties shall
be released from all liabilities and obligations under this Lease and City shall owe no
compensation to Tenant. As of the Effective Date, City confirms the Premises conforms
to the Tideland Grant.
1.3 Tenant accepts the condition of the Premises as -is as of the date of this
Lease without any current City warranty, representation or repair obligation, except as
expressly set forth in this Lease below.
Basin Marine, Inc. Page 2
2. TERM
2.1 Initial Term of Lease. The Term of this Lease shall be twenty (20) years
from the Effective Date ("Initial Term") unless terminated sooner in accordance with the
provisions of this Lease.
2.2 Option to Extend. Provided Tenant is not then in default beyond applicable
notice and cure periods at the time of Tenant's notice of intention to exercise such Option
Term, and upon approval of the City, Tenant may extend the term of this Lease for four
(4) additional successive terms of five (5) years (each an "Option Term" or together the
"Option Terms") commencing on expiration of the Initial Term or an Option Term, as
applicable, on the same terms and conditions as contained in this Lease as it may be
amended. Tenant must give City written notice of Tenant's intention to extend the Term
at least six (6) months prior to the expiration of the then -current Term ("Option Notice").
2.3 Hold Over. Should Tenant, with City's consent, hold over and continue in
possession of the Premises after expiration of the Term, Tenant's continued occupancy
of the Premises shall be considered a month -to -month tenancy subject to: (a) termination
by either Party upon thirty (30) days advance written notice; and (b) all the terms and
conditions of this Lease, except the provisions of Sections 2.1 and 2.2 above.
2.4 Term and Option Terms. The combined duration of the Initial Term and any
exercised Option Terms shall not exceed forty (40) years and will collectively be referred
to as the "Term."
3. REDEVELOPMENT OF PROPERTY
3.1 During the Term, Tenant understands and acknowledges that the City's
redevelopment project at the Property, which currently does not contemplate any
modifications to the Premises, may significantly disrupt Tenant's ability to occupy the
Premises. Tenant shall fully cooperate with City, and City's tenants (other than Tenant),
contractors, representatives and assignees ("Agents") during the redevelopment as
follows:
3.1.1 General. Tenant shall allow City and/or its Agents to take any action,
including the right to enter the Premises to conduct tests, surveys and
studies with respect to the Premises in conjunction with the redevelopment,
of the adjoining portions of the Property provided the tests, surveys or
studies do not unreasonably interfere with Tenant's ability to conduct
business on the Premises.
3.1.2 Occupation of Premises. In addition to the general obligation of
Tenant to cooperate in redevelopment, City and/or its Agents shall have the
right to occupy any portion of the Premises for: (i) one (1) period of up to
twelve (12) consecutive months during the Term of this Lease, and (ii) a
total of twenty-four (24) months during the Term, each upon three (3)
months' advance notice to Tenant before any such City occupation,
disclosing what parts or all of the Premises City intends to occupy, and the
Basin Marine, Inc. Page 3
dates of such City occupation. Prior to the City's occupation, the right of City
and/or its Agents to occupy a portion of the Premises is contingent upon
City's execution of, and compliance with, an agreement with Tenant
("Occupancy Agreement"), that (i) compensates Tenant for the period of
occupation as provided in this Section and Section 15 herein; (ii)
indemnifies, protects, and holds Tenant harmless from any claim, loss,
damage or liability proximately caused from the sole negligence or willful
misconduct of the City's negligent occupation of the Premises. City or its
Agents shall, in the course of any occupation of the Premises, take all
reasonable action to mitigate the impact of any occupation on Tenant; and
(iii) incorporates the provisions of Section 3.1.3 below, as applicable. The
compensation for occupation shall be calculated on the basis of the average
Tenant revenue during the six (6) months prior to start of the City occupation
that was derived from for the use of that portion of the Premises being
occupied. For example, if the City occupation is four (4) months and the
average monthly revenue for the preceding six (6) months from that portion
of the Premises was one thousand dollars ($1,000.00), the compensation
would be four thousand dollars ($4,000.00). Total Tenant revenue used for
this calculation will be the total monthly Tenant revenue previously reported
by Tenant to the City for purposes of payment of Percentage Rent, below,
for such prior six (6) month reporting period which ended just prior to the
start of such City occupancy.
3.1.3 In the event of an occupation of a portion of the Premises, City may
authorize Tenant to temporarily conduct its operations from facilities located
on adjoining City controlled portions of the Property during the term of the
occupation. City's authorization of Tenant to temporarily relocate its
operations will take into consideration Tenant's equipment and necessary
operating permits, which may preclude Tenant from operating elsewhere.
4. RENT
4.1 Rent. From and after the Effective Date, on the first day of each month
Tenant shall pay to City Base Rent, as adjusted periodically pursuant to Section 4.3
below, and Percentage Rent. "Rent" defined herein shall include Base Rent, Percentage
Rent, publicity revenue, late payment penalties, interest, taxes, and other similar
monetary amounts and charges payable by Tenant under the provisions of this Lease,
and may be prorated, as applicable, for any partial month in accordance with the actual
number of days in that month.
4.2 Base Rent. "Base Rent" shall be Three Hundred Thousand Dollars and
00/100 ($300,000.00) per year starting on the Effective Date. Base Rent shall be paid, in
advance, in equal monthly installments of Twenty -Five Thousand Dollars and 00/100
($25,000.00) on the first day of each month. Base Rent for any partial month at the
beginning or end of the Term shall be prorated in accordance with the actual number of
days in that month and shall be due on the first day of that month that falls within the
Term.
Basin Marine, Inc. Page 4
4.3 Base Rent Adiustments. Base Rent shall be adjusted on the first (1st) day
after the end of each Third (3,d) Lease Year, each defined as a "3 Year Base Rent
Adjustment."
4.3.1 "Lease Year" is defined as each calendar year (January 1 to
December 31) of the Term.
4.3.2 "Adjustment Period" is defined as each just concluded period of three
(3) Lease Years.
4.3.3 "Index" is defined as the CPI for the Los Angeles —Long Beach -
Anaheim, CA, All Urban Consumers, All Items, Base Period 1982-84=100,
as published by the United States Department of Labor, Bureau of Labor
Statistics ("Bureau"). Should the Bureau discontinue the publication of the
Index, or publish same less frequently, or alter same in some other manner,
then the parties shall adopt a substitute index or substitute procedure which
reasonably reflects and monitors consumer prices.
4.3.4 Each 3-Year CPI is defined as the percentage change between the
Base Index and the Comparison Index. "Base Index" shall be the Index for
the calendar month which is four (4) months prior to the start of each
Adjustment Period and "Comparison Index" shall be the Index for the same
calendar month thirty-six (36) months later. The Comparison Index shall
become the Base Index for purposes of calculating the next 3-Year CPI.
Notwithstanding the actual CPI calculation for each Adjustment Period, the
Base Rent Adjustment for each Adjustment Period shall not be less than
three percent (3.0%) (1.0% per Lease Year times three Lease Years), nor
shall the change be greater than twenty-one percent (21 %) (7% per Lease
Year times three Lease Years).
4.3.5 As an illustration: as of the Effective Date, Base Rent Adjustment
would first occur on January 1, 2028 and then on each subsequent three
(3) year anniversary of such date; the first 3-Year CPI calculation would be
based on the Adjustment Period of January 1, 2025 to December 31, 20271
the first Base Index would be the Index for September 2024 and the first
Comparison Index would be the Index for September 2027.
4.4 Percentage Rent. In addition to the Base Rent, Tenant shall pay to City
Percentage Rent, which shall be equal to the amount of the Gross Sales Figure ("GSF")
for a given month less the Base Rent due for that month. The GSF shall be calculated
by multiplying the "Gross Sales" (as defined in Section 4.8) in each of the following sales
categories by the Gross Sales Percentage Rates:
Gross Sales Percentage Rates
Shipyard/boat repair (labor and 4% of Gross Sales. (For illustration,
services) exclusive of categories 2 & 3 Tenant charges a customer $4,000 for an
below annual boat haul out and yard set up fee,
Basin Marine, Inc. Page 5
2. Outside labor and materials done or
performed by 3rd parties, and not made
or provided by Tenant
3. Equipment and hardware sales at
Tenant's store on the Premises, to
either 3rd party customers or internal
sales for Tenant's boat repair
business under category 1, above.
another $3,800 for labor to clean that
boat and paint its bottom done by Tenant
employees, so the total customer bill is
$7,800, and the GSF for those internal
Tenant charges is $312, 4% of $7,800.
For further illustration, if $500 of bottom
paint is bought from Tenant's store at the
Premises and used on this customer's
boat, then that item is part of category 3
below.)
10% of gross markup, commission and
fees received by Tenant. Gross markup
does not contain costs paid to third party.
(For illustration, for Tenant's customer in
category 1, above, Tenant buys a $500
boat propeller from an outside vendor
and charges $700 to Tenant's customer
for that same propeller, then the gross
Tenant profit is $200, so the GSF due for
that item is $20, 10% of that $200 Tenant
profit. For further illustration, for Tenant's
customer in category 1, above, Tenant
marks up the third -party boat engine
mechanic's base labor charge of $1,200,
to $1,450, for a Tenant profit of $250, so
the GSF due for that labor profit is $25,
10% of that $250 Tenant profit.)
5% of Tenant store Gross Sales. (For
illustration, a boat mechanic buys $355 of
stainless -steel fittings and hose for use
on a boat repair off -Premises, then the
GSF for those items is $17.75, 5% of
$355. For further illustration, Tenant
uses $500 of boat bottom paint for the
customer's boat in category 1, above,
purchased from Tenant's store at the
Premises, then the GSF for that paint is
$25, 5% of $500.)
4.5 Time of Payment of Percentage Rent. No later than concurrently with
Tenant's submission to City of each Monthly Sales Statement as defined under Section
4.9 below, Tenant shall pay to City the amount of the Percentage Rent that is owing, if
any, for the preceding month as determined by the Monthly Sales Statement. If
Percentage Rent is not timely paid, the amount of Percentage Rent shall bear interest as
set forth below under Section 4.14.
Basin Marine, Inc. Page 6
4.6 Publicity Revenue. Tenant may allow the Premises to be used for
commercial film, television production, advertising production, or other commercial media
vehicle only upon written approval from the City, which approval shall not be
unreasonably withheld, conditioned or delayed, and in compliance with the Newport
Beach Municipal Code. Fifty percent (50%) of all monetary revenue received by Tenant
as compensation or other payment for the use of the Premises in a film, television
production, advertising production, or other commercial media vehicle shall be paid to
City, not later than thirty (30) days after Tenant receives this compensation or other
payment.
4.7 Payment Location. All payments of Rent shall be made in lawful money of
the United States of America and shall be paid to City in person or by United States' mail,
or overnight mail service, at the Cashier's Office located at 100 Civic Center Drive,
Newport Beach, California, 92660, or to such other address as City may from time to time
designate in writing to Tenant. If requested by City, Tenant shall make payments
electronically (at www.newportbeachca.gov) or by wire transfer (at Tenant's cost) which
shall be paid on the payment due date. Tenant assumes all risk of loss and responsibility
for late charges and delinquency rates if payments are not timely received by City
regardless of the method of transmittal.
4.8 Gross Sales.
4.8.1 The term "Gross Sales" is defined as:
4.8.1.1 All money, cash receipts, assets, property or other
things of value, including but not limited to gross charges, sales, rentals,
fees and commissions made or earned by Tenant and/or any subtenant or
subcontractor thereof, whether collected or accrued from any business, use
or occupation, or any combination thereof, originating, transacted or
performed, in whole or in part, on the Premises, including but not limited to
rentals, the rendering or supplying of services and the sale of goods, wares
or merchandise, whether wholesale or retail, whether for cash or credit, or
otherwise, and including the value of all consideration other than money
received for any of the foregoing, except as Excluded from Gross Sales in
Section 4.8.2, deduction for any overhead or cost or expense of operations,
such as, but without limitation, salaries, wages, costs of goods, interest,
debt amortization, credit, collection costs, discount from credit card
operations, insurance and taxes. In accordance with Section 4.8.2, Tenant
is not allowed to net under Gross Sales. Each installment or credit sale
shall be treated as a sale for the full price in the month during which such
sale is made, irrespective of when Tenant receives payment therefor or
whether payment is in full or partial. Gross Sales shall include any amount
allowed upon any "trade in," the full retail price of any merchandise delivered
or redeemed for trading stamps or coupons and all deposits not refunded
to purchasers. All sales originating at the Premises shall be considered as
made and completed therein, even though bookkeeping and collection of
the account may be transferred to another place, and even though actual
Basin Marine, Inc. Page 7
filling of the sale or service order and actual delivery of the merchandise
may be made from a place other than the Premises;
4.8.1.2 Orders taken in or from the Premises, even if the orders
are filled elsewhere; and
4.8.1.3 Gross receipts of all coin -operated devices that are
placed on the Premises by Tenant or pursuant to any rent concession,
percentage, license, sublicense or other arrangement, including a separate
specification of all amounts paid as deposits, fees, rents, common area
charges, monetary equivalents, pass through rents, or other considerations
with a monetary equivalent, and such other subcategories of revenues that
Tenant may elect to separately report. This includes revenue from any
vending machines (but excludes revenue from telephones that are collected
by a public and/or private utility).
4.8.2 Exclusions from Gross Sales. Gross Sales shall not include, or if
included shall be deducted (but only to the extent they have been included),
the following:
4.8.2.1 Sales and use taxes, so-called luxury taxes,
consumers' excise taxes, gross receipts taxes, and other similar taxes now
or in the future imposed on the sale of merchandise or services, but only if
such taxes are added to the selling price and collected from customers,
4.8.2.2 The amount of returns to shippers or manufacturers;
4.8.2.3 The amount of any cash or credit refund made upon any
sale where the merchandise sold or some portion is returned by the
purchaser.
4.8.2.4 Sales of trade fixtures or personal property to be replaced
by Tenant that are not considered stock in trade;
4.8.2.5 Sums and credits received in the settlement of claims for
loss of or damage to merchandise;
4.8.2.6 Cash refunds made to customers in the ordinary course of
business;
4.8.2.7 Value added taxes ("VAT") or other taxes added to the
selling price of products and other similar taxes now or hereafter imposed
upon the sale of merchandise or services, whether such taxes are added
to, or included in the selling price,
4.8.2.8 Uncollectible credit accounts and other bad debts, not to
exceed two percent (2%) of the monthly Gross Sales; and
Basin Marine, Inc. Page 8
4.8.2.9 Amounts paid to charge card or credit card issuers.
4.9 Monthly Sales Statements.
4.9.1 Within twenty-five (25) days after the end of each calendar month,
commencing with the twenty-fifth (25th) day of the month following the
Effective Date, and ending with the twenty-fifth (25th) day of the month next
succeeding the last month of the Term, as may be extended as provided
herein, Tenant shall furnish City a written statement on a form satisfactory
to City and certified by Tenant, showing the total Gross Sales made in,
upon, or from and/or otherwise attributable to the Premises during the
preceding calendar month (or fractional month at the beginning of the Term
if the Effective Date is other than the first day of a month) ("Monthly Sales
Statement"). The Monthly Sales Statement shall include the Gross Sales,
applicable Gross Sales Percentage Rate, and GSF for each sales category,
Base Rent payable for such prior month, amount of any Percentage Rent
due and resulting total Rent due for such month.
4.9.2 If Tenant fails to provide any Monthly Sales Statement at the time
and in the manner specified herein, this failure shall constitute a default
under this Lease and City shall have the right to terminate this Lease in
accordance with Section 18 below, in addition to any other rights or
remedies it may have under this Lease.
4.10 Annual Sales Statements.
4.10.1 Prior to April 30th of each Lease Year, Tenant shall furnish City a
written statement on a form satisfactory to City and certified by Tenant and
a Certified Public Accountant for Tenant to be correct, of Tenant's monthly
and annual Gross Sales made in, upon, or from and/or otherwise
attributable to the Premises during the previous Lease Year, or any partial
Lease Year (if applicable) ("Annual Sales Statement"). The Annual Sales
Statement shall include the GSF for each category of sales calculated using
the Gross Sales Percentage Rates, including any authorized deductions,
the Base Rent and Percentage Rent paid per category for each month and
for such entire Lease Year and Base Rent paid by Tenant during such same
Lease Year.
4.10.2 If the Annual Sales Statement shows that during the previous
Lease Year Tenant paid less Percentage Rent than obligated under the
terms of this Lease, Tenant shall pay to City the amount of the
underpayment within thirty (30) days of City's receipt of the statement.
4.10.3 If the Annual Sales Statement shows that during the previous
Lease Year Tenant paid more Percentage Rent than it was obligated to pay
under the terms of this Lease, the amount of this overpayment shall be
Basin Marine, Inc. Page 9
applied to the next monthly installment or installments of Base Rent due or,
if the overpayment was in the last year of the Term, City shall refund to
Tenant the full amount of this overpayment within thirty (30) days of City's
receipt of the statement.
4.10.4 If Tenant fails to provide to City any Annual Sales Statement at
the time and in the manner specified herein, this failure shall constitute a
default under this Lease and City shall have the right to terminate this Lease
in accordance with Section 18 below, in addition to any other rights or
remedies it may have under this Lease.
4.11 Sales and Charges. All sales and charges shall be recorded by point of
sale ("POS") systems that display the amount of the transaction certifying the amount
recorded. The POS system shall log daily sales totals and keep records of the transaction
numbers and sales details.
4.12 Production of Statement, Records and Audit.
4.12.1 Tenant Records and City Audit. Tenant shall keep at the Premises
(and shall require any permitted subtenant to keep at the Premises) full,
complete and proper books, records and accounts of its daily Gross Sales,
both for cash and on credit, at any time operated in the Premises. Tenant
agrees to make available for inspection by City or its authorized designee
at the Premises, a complete and accurate set of books and records of all
sales of goods, wares, and merchandise and revenue derived from the
conduct of business or activity in, at or from the Premises from which Gross
Sales can be determined. Tenant shall also make available, upon City's
written request, all supporting records. Tenant shall also furnish City copies
of its quarterly California sales and use tax returns filed with the State of
California. Tenant shall retain and preserve for at least three (3) years after
the end of each Lease Year all records, books, bankbooks or duplicate
deposit books and other evidence of Gross Sales for such Lease Year. City
shall have the right, not more than once each calendar year, upon
reasonable notice, during the Term and within one hundred eighty (180)
days after expiration or termination of this Lease to inspect and complete
an audit of Tenant's books and records and to make transcripts to verify the
Rent due to City. The audit may be conducted at any reasonable time
during Tenant's normal business hours. Tenant shall cooperate with City in
making the inspection and conducting the audit. The audit shall be limited
to the determination of Gross Sales and shall be conducted during Tenant's
usual business hours in a manner that minimizes any interference with the
conduct of Tenant's regular business operations. If the audit concludes that
there is a deficiency in the payment of any Rent, the deficiency shall
become due and payable within twenty (20) days and if there is an
overpayment, City shall refund the amount of the overpayment within twenty
(20) days. City shall bear its costs of the audit unless the audit shows that
Tenant understated Gross Sales by more than two percent (2%), in which
Basin Marine, Inc. Page 10
case Tenant shall pay all City's reasonable costs of the audit. City shall not
disclose financial information received in confidence and pursuant to this
Lease except to carry out the purposes of this Lease unless disclosure is
required by law or court order. However, City may disclose the results of
any audit in connection with any financing arrangements, pursuant to
applicable law, the sale or transfer of City's interest in the Premises,
pursuant to order of a court or administrative tribunal, or to collect any
outstanding Rent. A copy of any City audit shall be provided to Tenant along
with City calculations for any Rent payment due or refund as a result of such
City audit.
4.12.2 Tenant's Gross Sales Audit. In the event of any audit by City in
accordance with this Lease, Tenant may contest the results of City's audit
by performing a confirming audit, at Tenant's expense, within sixty (60) days
of receipt of City's audit results and supporting evidence, using an
independent Certified Public Accountant reasonably accepted by City in
writing.
4.12.3 Additional Audit. If Tenant's audit and City's audit vary by greater
than ten percent (10%), and the parties cannot agree on the results of City's
or Tenant's audit, then the parties shall identify, after good faith
negotiations, a nationally recognized accounting firm acceptable to both
parties, to complete a third audit, which audit shall be final. The parties shall
equally pay the costs of the third audit.
4.13 Acceptance. The acceptance by City of any money paid to City by Tenant
as Percentage Rent for the Premises, as shown by any statement furnished by Tenant,
shall not be construed as an admission of the accuracy of said statement, or of the
sufficiency of the amount of the Percentage Rent payment, except that City agrees to
accept as accurate all such Percentage Rent payments and related documentation
disclosed in an Annual Sales Statement after the earlier of either three (3) years after
Tenant's submission to the City of such Statement, or Tenant's acceptance of any City
audit of such Statement, pursuant to terms of Section 4.12.
4.14 Late Payment. Tenant hereby acknowledges that the late payment of Rent
or other sums due hereunder will cause City to incur costs not contemplated by this
Lease, the exact amount of which is extremely difficult to ascertain. Such costs include,
but are not limited to, processing and accounting charges. Accordingly, any payment of
any sum to be paid by Tenant not paid within five (5) days of its due date shall be subject
to a ten percent (10%) late charge. City and Tenant agree that this late charge represents
a reasonable estimate of such costs and expenses and is fair compensation to City for its
loss suffered by such late payment by Tenant.
4.15 Interest on Unpaid Sums. Unpaid sums due to either City or Tenant under
this Lease shall bear interest at the rate of ten percent (10%) per annum on the unpaid
balance, including but not limited to late payment penalties, from the date due until paid.
Basin Marine, Inc. Page 11
4.16 Additional Rent. Any provision in this Lease that requires Tenant to pay
additional amounts classified as "Additional Rent" shall be paid within ten (10) days of
City's written demand therefor (unless a different time for payment is expressly provided
in this Lease). Additional Rent does not reduce or offset Tenant's obligations to pay Rent.
5. BUSINESS PURPOSES AND USE OF PREMISES
5.1 Approved Use. The Premises are to be used by Tenant: (a) for the principal
operation of a shipyard and boat repair facility, and (b) at Tenant's option, to sell new or
used boats and/or marine equipment and hardware, so long as such sales are incidental
to the foregoing principal use in this Section 5.1 (a), such as the on and off-loading of
boats, merchandise and equipment used at the Premises related to such Tenant business
operations (collectively, "Approved Use"). City agrees to not lease any other part of the
Property for a business, operation, or use that is similar to and would compete with
Tenant's operation of the Premises for the Approved Use.
5.1.1 Subcontracting. Tenant may authorize and utilize contractors,
subcontractors and other agents of Tenant to perform and carry out the
Approved Uses as long as the following criteria are met:
5.1.1.1 The value of the service, work, labor, and/materials are
captured as part of Tenant's Percentage Rent and included as part
of Tenant's Gross Sales; and
5.1.1.2 Any contractors and subcontractors hired by Tenant
shall be fully licensed and bonded, and shall obtain insurance in an
amount and form pursuant to standard industry custom and practice
and as outlined in Section 13.3 of this Lease. City shall be named
as an additional insured on any contractors, subcontractors, or
agent's policies.
5.2 Operation of Premises. Tenant shall operate and manage the Premises in
a manner comparable to other high -quality businesses providing similar shipyard and
boat repair services in Newport Harbor. Deliveries shall be made and completed at the
Premises only between 7:00 a.m. and 6:00 p.m. on non -holiday weekdays.
5.3 Prohibited Uses.
5.3.1 Tenant shall not allow any activity in furtherance of the business
purposes in Section 5.1 to be performed by anyone other than Tenant, its
employees, contractors, or subcontractors.
5.3.2 Tenant shall not sell or permit to be kept, used, displayed or sold in
or about the Property or Premises: (a) pornographic or sexually explicit
books, magazines, literature, films or other printed material, sexual
paraphernalia, or other material which would be considered lewd, obscene
or licentious; (b) any article which may be prohibited by standard forms of
fire insurance policies; or (c) any alcoholic beverages, tobacco, vaping
Basin Marine, Inc. Page 12
products, CBD, and marijuana. Vending machines, gaming machines or
video or arcade games shall not be used or installed on the Premises, with
the exception that vending machines for food products for Tenant's workers
are permitted but shall not be located in any publicly accessible areas.
5.3.3 Tenant shall not use or permit the use of the Premises in any manner
that: (a) creates a nuisance; (b) violates any law, (c) is not in compliance
with all statutes, laws, permits, use restrictions and regulations of City
applicable to the Premises, Tenant and/or Tenant's use of the Premises.
Tenant assumes the risk of and shall cause all its workman, customers and
independent contractors to also comply with all laws regarding their
activities at the Premises; or for any other use except with prior written
consent of the City.
5.3.4 No auction, fire, bankruptcy, "going out of business" or other distress
sales of any nature may be conducted on the Premises without the prior
written consent of the City Manager or his/her designee, which will not be
unreasonably withheld, on the condition that such event occurs only once
during the Term.
5.4 Sales Restrictions. Tenant shall not display, sell or store merchandise outside
the defined exterior walls, permanent doorways, and shipyard area of said Premises, and
no sale by auction in, upon or from said Premises, whether said auction be voluntary,
involuntary, pursuant to any assignment for benefit of creditors or pursuant to any
bankruptcy or other solvency proceedings, shall be conducted except such auctions that
may be conducted by officers of a court with respect to any vessels in custody of Tenant.
5.5 Competitive Pricing. Given the exclusive nature of the services provided
under this Lease, City and Tenant have a mutual interest in providing competitive pricing
for the materials, goods and other items permitted to be sold under this Lease. Therefore,
Tenant shall from time -to -time survey the costs charged by other similar shipyard entities
engaged in similar businesses as the Approved Use in Newport Harbor and adjust its
prices accordingly to remain competitive. The City may audit Tenant's pricing.
5.6 Operation. Tenant shall keep the Premises in operation and open to the
public for business during normal business hours, at a minimum between Monday through
Friday, between the hours of 8:00 a.m. and 4:30 p.m. and in consideration of the locality
of the Premises, at its discretion, Tenant may keep the Premises in operation and open
to the public on weekend days at similar hours. Tenant may only close on federal and
state holidays, and during periods of remodeling, reconstruction, inventory and
emergencies (including substantially inclement weather), or to comply with laws. Tenant
closures shall not: (a) excuse Tenant's payment of Base Rent; or (b) be for a period of
more than four (4) months during any consecutive five (5) year period of the Term.
However, Tenant shall be excused from such operation obligation for those events as
described and defined in Section 17 herein.
Basin Marine, Inc. Page 13
5.6.1 Closure for Construction. Pursuant to Section 9, Tenant may close
the Premises during periods of remodeling, reconstruction, inventory and
emergencies (including substantially inclement weather), with advanced
written notice and approval from City, which approval shall not be
unreasonably withheld. Any proposed closure shall not foreseeably affect
or disturb surrounding tenants. During the period of an approved closure
for construction, Base Rent may, with City's prior written approval, be
abated on a prorated basis in compliance with Section 15 below.
5.7 Advertisinq Display. Tenant may, at its own expense, place signs in or upon
the Premises subject to the prior written consent of the City as to the location, size, type,
number, design and method of installation and in compliance with the City's sign code
regulations and the deed restrictions applicable to the Premises. All signage placed by
Tenant on, in or about the Premises shall remain the property of Tenant and shall be
removed by Tenant upon termination or expiration of this Lease at Tenant's expense; and
any damage caused by removal shall be repaired at Tenant's expense.
5.8 Independent Contractor. It is understood that Tenant is an independent
contractor and not an agent or employee of City, and City shall have no interest in the
business of Tenant, and no liability for the business operations or Gross Sales of Tenant,
whether or not caused by City's enforcement of City laws and regulations which apply to
the Premises and/or Tenant.
5.9 Parking. City grants to Tenant a non-exclusive right to the parking area on
the Property for Tenant's employees and customers. No repair or overnight storage or
parking of Tenant customer or employee vehicles is permitted on the Property. Tenant
shall comply with the procedures and regulations established by City to regulate the
parking area and any modifications or additions thereto which City may from time to time
prescribe at its sole and absolute discretion for the purpose of maintenance, operations,
safety, traffic flow, parking needs and general order of the parking area. Tenant shall
cause its agents, employees, invitees and guests to comply with this Section. Tenant is
also granted access across and use of such parking areas and related alleys and
driveways on the Property for delivery of supplies and boats to the Premises in connection
with Tenant's Approved Use of the Premises, subject to the terms and conditions of any
redevelopment of the Property as set forth in Section 3 herein.
5.10 Compliance with Balboa Yacht Basin Rules. Tenant, Tenant's employees,
customers, contractors and subcontractors shall comply with the Balboa Yacht Basin
Rules and Regulations as set forth in the attached Exhibit "C" and incorporated herein,
which may be amended from time to time at City's sole discretion. City will provide Tenant
a copy of any such amendments or revisions to the Balboa Yacht Basin Rules and
Regulations, which shall be deemed incorporated into this Lease without the need for
execution of a formal Lease amendment.
Basin Marine, Inc. Page 14
6. SERVICES FOR CITY
6.1 Tenant shall, in addition to the obligation to pay Rent and perform the other
Tenant terms and conditions of this Lease, at Tenant's sole expense, do the following:
6.1.1 Subject to advance written notice by City as provided in Section 6.2,
Haul out and re -launch, each Lease Year, up to twelve (12) of the vessels
owned and maintained by the City, of a size capable of being handled by
Tenant's equipment provided, however, all such twelve (12) City vessels
shall be hauled out so that at any time there are not more than two (2)
vessels at a time at the Premises; and the City shall deliver each such City
vessel to the haul out/crane area at the Premises;
6.1.2 Transport the City vessels to an area on the Premises suitable for
the purposes of repairs or maintenance in the yard area used in Tenant's
business for similar boat repair functions;
6.1.3 Allow each such City vessel to remain on the Premises for a period
of seven (7) days starting on the day after such vessel is hauled out and
placed on yard support stands;
6.1.4 Permit access to the City vessels by employees or representatives
of City for the purpose of repairs and maintenance, which shall be
performed by City at no cost or liability to Tenant; and
6.1.5 All extra labor, parts, and materials obtained from Tenant shall be
paid for by the City at the then prices and rates charged by Tenant to
customers for similar boat repairs. City reserves the right to employ other
contractors and workmen not related to Tenant to perform the work
contemplated under Section 6.1.4 and this Section 6.1.5 and City shall be
responsible for all such contractors and workmen.
6.2 City Notice. City shall give Tenant thirty (30) days advance written notice
prior to the date(s) on which City vessels are to be hauled -out; otherwise, Tenant shall
not be obligated to provide such haul -out or services on the City's requested date(s).
6.3 Limitation of Tenant's Liability. Tenant shall not be liable to City for any
cost, liability or expense arising from any City boat located at the Premises pursuant to
Section 6.1.4 nor shall Tenant be liable for City exceeding the twelve (12) City vessel limit
for haul out and re -launch for any given lease year.
7. TAXES, LICENSES AND OTHER OBLIGATIONS
Payment of Taxes. Tenant acknowledges that this Lease may create a possessory
interest subject to property taxation and that Tenant shall pay property taxes levied on
such interest. Tenant shall pay directly to the appropriate taxing authorities all taxes
applicable to this Lease, fixtures and Tenant's personal property on the Premises that are
levied or assessed against Tenant during the Term. Taxes shall be paid before
Basin Marine, Inc. Page 15
delinquency and before any fine, interest or penalty is due or imposed by operation of
law. Tenant shall, upon request, promptly furnish to the City satisfactory evidence of
payment. City hereby gives notice to Tenant, pursuant to Revenue and Tax Code
Section 107.6 that this Lease may create a possessory interest that is the subject of
property taxes levied on such interest, the payment of which taxes shall be the sole
obligation of Tenant. Tenant shall advise in writing any subtenant, licensee,
concessionaire or third party using the Premises of the requirements of Section 107.6.
Tenant shall pay, before delinquency all taxes, assessments, license fees and other
charges ("Taxes") that are levied or assessed against Tenant's interest in the Premises
or any personal property installed on the Premises. Taxes on Tenant's Business
Operations and Personal Property. Tenant will pay, before delinquency, all taxes,
assessments, license fees, and public charges levied, assessed, or imposed on its trade
fixtures, inventory, merchandise, and other personal property in or on the Premises. If
any of these items of property are levied or assessed against City or City's Property, or if
the assessed value of the building and improvements in which the Premises are located
is increased by the inclusion of a value attributable to Tenant's property, then Tenant,
within thirty (30) days of City's request, will reimburse City for the amount of the taxes
levied or assessed against City or City's Property.
7.1 Payment of Obligations. Tenant shall promptly pay, when due, any and all
bills, debts, liabilities and obligations incurred by Tenant in connection with Tenant's
occupation and use of the Premises.
7.2 Challenge to Taxes. Tenant shall have the right in good faith, at its sole
cost and expense, to contest the amount or legality of any Taxes on or attributable to this
Lease, the Premises, Tenant's personal property, or Tenant's occupation and use of the
Premises, including the right to apply for reduction. If Tenant seeks a reduction or
contests such taxes, Tenant's failure to pay the Taxes shall not constitute a default as
long as Tenant complies with the provisions of this Section. City shall not be required to
join in any proceeding or contest brought by Tenant unless the provisions of any law
require that the proceeding or contest be brought by or in the name of City. In that case,
City shall join in the proceeding or contest or permit it to be brought in City's name as long
as City is not required to bear any cost. If requested by Tenant, City shall execute any
instrument or document necessary or advisable in connection with the proceeding or
contest. Tenant, on final determination of the proceeding or contest, shall immediately
pay or discharge any decision or judgment rendered, together with all related costs,
charges, interest and penalties. Tenant shall indemnify, defend and hold harmless the
City, its council members, boards, commissions, committees, officers, employees,
authorized representatives, agents and volunteers ("Indemnified Parties") from and
against any liability, claim, demand, penalty, cost or expense arising out of or in
connection with any contest by Tenant pursuant to this Section.
7.3 No Rent Offset. Except as provided herein, any payments under this
Section 7 shall not reduce or offset Rent payments. City has no liability for such payments.
As of the Effective Date, the Premises are not assessed secured property taxes because
the Premises are owned by City. If that `no secured property tax' status changes for the
Property, such as due to a change in ownership of the Property by the City, Tenant shall
Basin Marine, Inc. Page 16
pay any resulting secured property taxes, and in such event Tenant increased tax
payments paid for the Premises shall be added to Base Rent for purposes of calculating
Percentage Rent.
7.4 License. Tenant shall maintain in good standing all required licenses and
permits required for operation of the business on the Premises, including but not limited
to a City Business License.
8. UTILITIES AND REFUSE COLLECTION
8.1 Utilities. Tenant shall be responsible for payment of all utilities furnished to
or used on the Premises, including, without limitation, gas, electricity, sewer, water,
telephone service, cable TV and janitorial service. Any repair to utility lines serving the
Premises located on the Premises is the sole responsibility of Tenant. Any repair to utility
lines located on the Property and serving solely City property are the responsibility of the
City. Upon Tenant's receipt of any necessary permits and approvals for such work, which
shall be obtained at the Tenant's sole cost and expense, City shall allow Tenant access
to the Property and other City owned streets for purposes of completing such Tenant
utility repairs. Tenant and City shall coordinate efforts for any utility repairs performed on
the Property. Tenant bears all risk of interruption, cancellation and/or disruption of utility
services, as well as the cost of all utilities Tenant requires for its use of the Premises. City
in its capacity as landlord, shall not disrupt any utility servicing the Premises, except for:
(1) in the event of any emergency as determined by the City; (2) maintenance and repairs
conducted pursuant to Section 11, below; or (3) temporary disruptions related to City's
Occupancy under Section 3, above. Tenant shall be responsible for the maintenance,
repair and/or replacement of utility lines within and exclusively serving the Premises, or
Tenant's pro rata share of utility lines serving Tenant on the Property.
8.2 Refuse Collection. Refuse collection shall occur between 7:00 a.m. and
6:00 p.m. on non -holiday weekdays. Tenant shall make arrangements for and pay for all
weekly refuse collection and also Hazardous Substances disposal at least monthly (or
more frequently if required by law). Tenant shall keep the Premises free and clean of
rubbish and litter and shall deposit accumulated rubbish and litter in containers
designated by City. Trash containers shall be kept in an approved enclosed area. Tenant
shall comply with the provisions of the Newport Beach Municipal Code and all other laws
regarding the use, storage and disposal of Hazardous Substances. In no event shall
Tenant allow Hazardous Substances related to the Premises to enter, be disposed of into,
seep or otherwise be released into any sewer line, storm drain and/or adjacent bay
waterway to the Premises.
9. IMPROVEMENTS AND ALTERATIONS
9.1 Tenant Improvements.
9.1.1. Subject to compliance with all applicable laws, Tenant shall make
certain improvements to the Premises as shown on Exhibit "D" ("Tenant
Improvements"), attached hereto and incorporated herein, which are
Basin Marine, Inc. Page 17
intended to maintain Tenant's business operations. The Tenant
Improvements may be revised by or modified by Tenant in order to obtain
entitlements and/or building permits from the applicable local and state
agencies. All Tenant Improvements shall be subject to the prior written
approval of the City Manager or his/her designee, which approval shall not
be unreasonably delayed or withheld. The City Manager's or his/her
designee's failure to provide written approval or disapproval of any such
submittal by Tenant within thirty (30) days shall be deemed disapproval
thereof. The City Manager's or his/her designee's failure to provide such
notice shall not relieve Tenant's responsibility to comply with all applicable
laws.
9.1.2. Tenant shall submit plans, diligently pursue their approval by City
in its regulatory capacity, and any other necessary permits or approvals
from federal, state, or local agencies having such oversight, and complete
construction of the Tenant Improvements within the first three (3) years of
the Initial Term.
9.2 Alterations.
9.2.1 Alterations Costing More than $25,000. With the exception of the
Tenant Improvements, Tenant shall not make any improvements, additions,
alterations, or modifications of the Premises (collectively "Alterations")
costing more than Twenty -Five Thousand Dollars and 00/100 ($25,000.00)
without the prior written consent of the City Manager which shall not be
unreasonably withheld or delayed if such Alterations are consistent with the
Approved Use. In granting or withholding consent to proposed Alterations,
the City Manager shall consider the impact of the proposed Alterations on
public views of adjacent property owners, compliance of City codes and the
impact of the proposed Alterations on space available for public use of the
Property. The City Manager may require, as a condition of approval, that
Tenant agree to amendments to this Lease, including amendments
increasing the amount of Rent payable under this Lease if the proposed
Alterations would materially increase the floor area or size of the building
structures on the Premises. The City Manager may also require Tenant to
provide, at Tenant's expense, appropriate engineering and feasibility
studies regarding the structural integrity of the Premises. Any damages or
destruction to the structural improvements or Tenant equipment at the
Premises shall not reduce or excuse Tenant's obligation to pay Rent in full
and on time.
9.2.2 Non -Structural Alterations; Trade Fixtures and Equipment. Tenant
may make Alterations of a non-structural nature (e.g., interior of Premises
and exterior yard area), and Tenant may install such trade fixtures and
Basin Marine, Inc. Page 18
equipment as it may deem advisable for the conduct of its business for the
Approved Use of the Premises.
9.3 Permits. As required by law, Tenant shall obtain, and be responsible for the
costs for all building permits and other required permits as may be required prior to the
commencement of any Tenant Improvements or Alterations. If applicable, Tenant shall
be responsible, at its sole cost and expense, for compliance with the California
Environmental Quality Act ("CEQA") and the California Coastal Act in connection with
Tenant's operation and use of the Premises.
9.4 Prevailing Wages.
9.4.1 Pursuant to the applicable provisions of the California Labor Code,
not less than the general prevailing rate of per diem wages including legal holidays and
overtime work for each craft or type of workman needed to execute the work contemplated
under this Section 9 shall be paid to all workmen employed on the work to be done
according to this Section 9 by the Tenant's contractors and any subcontractor. In
accordance with the California Labor Code (Sections 1770 et seq.), the Director of
Industrial Relations has ascertained the general prevailing rate of per diem wages in the
locality in which the work is to be performed for each craft, classification, or type of
workman or mechanic needed to execute the Tenant Improvements or any Alterations.
A copy of said determination is available by calling the prevailing wage hotline number
(415) 703-4774, and requesting one from the Department of Industrial Relations. Tenant's
contractors and subcontractors are required to obtain the wage determinations from the
Department of Industrial Relations and post at the job site the prevailing rate or per diem
wages. It shall be the obligation of Tenant's contractors or any subcontractor under
him/her to comply with all State of California labor laws, rules and regulations and the
parties agree that the City shall not be liable for any violation thereof.
9.4.2 If both the Davis -Bacon Act and State of California prevailing wage
laws apply and the federal and state prevailing rate of per diem wages differ, Contractor
and subcontractor, if any, shall pay the higher of the two rates. Said prevailing rate of per
diem wages are on file at the City, Office of the City Clerk, 100 Civic Center Drive,
Newport Beach, California 92660, and are available to any interested party on request.
9.5 Quality of Work Performed. All Tenant Improvements and Alterations shall
be performed in a good and workmanlike manner, shall comply with the plans and
specifications submitted to City, and shall comply with all applicable governmental permit
requirements and laws in force at the time permits are issued. Any Tenant Improvements
and Alterations shall be performed between 7:00 a.m. and 6:00 p.m. on non -holiday
weekdays.
9.6 Tenant's Architects and Contractors. All Tenant Improvements and
Alterations to the Premises shall be designed, selected or constructed, as applicable, by
qualified and licensed (where required) architectural, design, engineering and
construction firms selected by Tenant. Any contractors and subcontractors hired by
Tenant shall be fully licensed and bonded, and shall obtain insurance in an amount and
Basin Marine, Inc. Page 19
form pursuant to standard industry custom and practice and as outlined in Section 13.3
of this Lease, and approved by the City's Risk Manager covering the Tenant
Improvements or Alterations to be constructed. City shall be named as an additional
insured on the contractor's and any subcontractor's policies.
9.7 Payment of Costs. Tenant, shall bear all costs and expenses associated
with any Tenant Improvements and Alterations, including any fees assessed on the
Premises by any governmental, or quasi -governmental agency or authority in connection
with any regional transportation or other public improvements and school district taxes,
development fees and assessments.
9.8 Disposition of Tenant Improvements and Alterations at Expiration or Lease
Termination. Any Tenant Improvements or Alterations to the Premises shall remain on
and be surrendered at no cost to City on expiration or termination of this Lease, wear and
tear excepted excluding Tenant's fixtures, equipment, furniture, and movable decorations
(which Tenant can remove), subject to the right by the City to require Tenant to remove
Tenant Improvements and Alterations. Tenant, at its sole cost, shall remove any such
items from the Premises before the last day of the Term or within thirty (30) days after
notice is given, whichever is earlier. Tenant shall repair any damage to the Premises
caused by such removal, ensure that the structural future of the foundation and bulkhead
areas of the Premises are not thereby worsened by such removal, and leave the Premises
in broom clean and good condition. "Good Condition" shall mean the Premises and each
portion thereof is in clean and safe physical condition and suitable for Approved Use by
a subsequent tenant. Any Tenant items left at the Property after the removal deadline
shall be considered abandoned by Tenant and can be disposed by City in City's sole
discretion and without compensation to or other City obligation to Tenant, but also subject
to any rights of lien holders to such items under an existing non -disturbance agreement
between such lien holder and City.
9.9 Improvements by City. As a part of City's redevelopment of the Property
pursuant to Section 3 of this Lease, City agrees not to construct, or allow any third party
to construct any additional improvements at the Property that relate to any third -party
commercial enterprise which are reasonably foreseeable to financially conflict or compete
with Tenant's business operations on the Premises so long as Tenant operates the
Premises for the Approved Use.
10. BONDING
10.1 Bonds Required. City may, in its absolute and sole discretion, require
Tenant to obtain, provide, and maintain at their own expense during the term of
construction of any Alteration or Tenant Improvement of the Premises or work exceeding
a cost of Twenty Five Thousand Dollars and 00/100 ($25,000) both of the following: (a) a
Faithful Performance Bond in the amount of one hundred percent (100%) of the total
amount to be paid to contractor as set forth in their respective contract with Tenant in the
form attached as Exhibit "E" and incorporated herein by reference; and (b) a Labor and
Materials Payment Bond in the amount of one hundred percent (100%) of the total amount
to be paid to contractor as set forth in their respective contract with Tenant and in the
Basin Marine, Inc. Page 20
form attached as Exhibit "F" and incorporated herein by reference. The City will not
accept bonds on any other form. Bonds shall be on the forms included in this Lease; the
City will not accept bonds on any other form. Said bonds are necessary for City to
complete any incomplete Alterations or Tenant Improvements in order to restore the
Premises to Good Condition and/or obtain a Certificate of Occupancy and City shall be
included as an obligee.
10.2 Bond Issuance. The Faithful Performance Bond and Labor and Materials
Payment Bond shall be issued by an insurance organization or surety (a) currently
authorized by the Insurance Commissioner to transact business of insurance in the State
of California, (b) listed as an acceptable surety in the latest revision of the Federal
Register Circular 570, and (c) assigned a Policyholders' Rating A- (or higher) and
Financial Size Category Class VI (or larger) in accordance with the latest edition of Best's
Key Rating Guide: Property -Casualty.
10.3 Bond Delivery. Prior to commencement of any Alteration of Tenant
Improvement of the Premises, Tenant shall deliver to City the Faithful Performance Bond
and Labor and Materials Payment Bond, and a certified copy of the "Certificate of
Authority" of the Insurer or Surety issued by the Insurance Commissioner, which
authorizes the Insurer or Surety to transact surety insurance in the State of California.
11. MAINTENANCE AND REPAIR OF PREMISES
11.1 Maintenance and Repair by Tenant. Tenant agrees that it will keep the
Premises in Good Condition. At all times during the Term, Tenant shall, at its sole cost
and expense, maintain Tenant Improvements, Alterations, and all Tenant equipment at
the Premises and every portion thereof including, but not limited to, store fronts, entrances
and exits, plate glass, roofs, doors, exterior and interior painted areas, HVAC equipment,
electrical circuits and switchgear, and utility supply lines, plumbing and other fixtures,
equipment, interior walls, ceilings and floors, piers, concrete foundations, fencing, gates,
asphalt areas, landscaping on areas located within the Premises as shown on Exhibit B,
slips, floats and ramps, in good order, condition and repair, and Tenant shall comply with
all laws applicable thereto. As of the Effective Date, City confirms that the Premises
conform to such Good Condition standard.
11.2 Maintenance and Repairs by City.
11.2.1 City shall be responsible only for the maintenance, repair and
replacement, and all related costs, of the: (a) vertical bulkheads and
attached bulkhead caps serving the Premises, excluding damage or
deterioration caused to any bulkhead or bulkhead cap by Tenant or
Tenant's operations for which Tenant shall be responsible; (b) the parking
areas, and driveway(s) and drive aisles on the Property which serve the
Premises; and (c) landscaping on areas located on the Property adjacent
to the Premises as shown in Exhibit A.
Basin Marine, Inc. Page 21
11.2.2 City's Dock Repairs/Maintenance. The City shall be responsible for
performing repairs to the marina at the Balboa Yacht Basin, which may
include replacement of docks, exclusive of those within the Premises
("Repairs"). Tenant is fully responsible for any repair, maintenance, and
construction or replacement of docks within the Premises and is
encouraged to do so concurrently and cooperatively with City's Repairs as
a potential cost savings to Tenant.
11.2.3 Cooperation. In addition to the obligation to cooperate set forth in
Section 3, when City performs work as set forth in Sections 11.2.1 and
11.2.2 above (collectively "Work"), Tenant shall fully cooperate with City,
and City's tenants (other than Tenant), contractors, representatives and
assignees ("Agents"). Tenant shall allow City and/or its Agents to take any
action, including the right to enter to conduct tests, surveys and studies with
respect to the Premises in conjunction with the Work provided the tests,
surveys or studies do not unreasonably interfere with Tenant's ability to
conduct business on the Premises. Tenant shall allow City and/or its Agents
to enter onto the Premises subject only to the obligation of City and its
Agents to give Tenant seventy two (72) hours' prior written notice and the
obligation of the City to, at its sole cost, to commence repair of any damage
to the Premises caused by the City or its Agents, within twenty-four (24)
hours after causation.
11.2.4 City may perform maintenance or repairs that Tenant is required to
perform but Tenant has failed to complete in the event Tenant fails to
commence required maintenance or repairs within the time provided by City
in the written notice requesting such maintenance or repair (which shall not
be less than thirty (30) days unless in case of emergency or urgent situation
and Tenant shall reimburse City for the related City costs incurred as
Additional Rent.
11.2.5 Upon twenty-four (24) hours prior written notice to Tenant, City or its
authorized City representative(s) may enter upon and inspect the Premises
during normal business hours for any lawful purpose. In case of emergency,
City or its authorized City representative(s) may, without prior notice, enter
the Premises by whatever force reasonably necessary if Tenant is not
present to open and permit an entry. Any entry to the Premises by City
under this Lease shall not be construed as a forcible or unlawful entry into,
or a detainer of, the Premises, or an eviction of Tenant from the Premises
or any portion thereof. Any damage caused to the Premises pursuant to
this Section 11.2 by the City shall be repaired or replaced by the City at the
City's sole expense.
11.2.6 Except in the case of an emergency, City shall, at the earliest time
reasonably possible given the circumstances that may then exist, provide
Tenant with written notice prior to performing any maintenance, repair or
remodeling of the Property which may reasonably be expected to adversely
Basin Marine, Inc. Page 22
affect, by interference with access, visibility, availability of utilities or
otherwise, Tenant's business operations at the Premises or any portion
thereof.
11.3 Tenant Rent Abatement. Tenant's Rent shall be abated as set forth in
Section 15.5, to the extent any City required maintenance and repair work as described
under this Section 11 interferes with Tenant's use of the Premises for the Approved Use
for a period of longer than thirty (30) continuous days, and is not caused by or is otherwise
the obligation of Tenant.
12. LIENS
12.1 Liens Prohibited. Tenant shall not permit to be imposed, recorded, or
enforced against the Premises or the Property, any portion thereof or any structure or
improvement thereon, any mechanics', materialmen's, contractors' or other liens arising
from, or any claims for damages growing out of, any work or repair or Alteration (except
from the actions of City) on the Premises, and Tenant shall pay or cause to be paid said
liens and claims before any action is brought to enforce the same against Tenant or the
Premises, or shall adequately indemnify City and the Premises by payment bonds
acceptable to City and as provided for by law. Tenant agrees to hold harmless City and
the Premises free and harmless from all liability for any and all such liens and claims and
all costs and expenses in connection therewith. Tenant shall give City notice in writing
before commencing construction of any kind on the Premises exceeding Two Thousand
Five Hundred Dollars and 00/100 ($2,500.00) and provide any additional Tenant
insurance required by this Lease.
12.2 Release/Removal of Liens. In the event any lien or stop notice is imposed
or recorded during the Term on the Premises, the Property, an Alteration and/or
improvement permanently affixed to the Premises or the Property, Tenant shall pay or
cause to be paid all such liens, claims or demands before any action is brought to enforce
the same against the Premises or the Property or the Alteration or improvement.
Notwithstanding the foregoing, if Tenant legitimately contests the validity of such lien,
claim or demand, then Tenant shall, at its expense, defend against such lien, claim or
demand provided that it provide City the indemnity in this Lease and provided Tenant
shall pay and satisfy any adverse judgment that may be rendered before any enforcement
against City or the Premises or the Property.
13. INDEMNITY AND EXCULPATION; INSURANCE
13.1 Hold Harmless Clause. Tenant releases the City and agrees to indemnify,
defend and hold harmless the City, its City Council, Boards, Commissions, Committees,
officers, agents, volunteers, and employees, as well as the State of California, its officers,
employees and volunteers (collectively, the "Indemnified Parties") from and against any
and all claims (including, without limitation, claims for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorney's fees, disbursements and court costs) of every kind and nature whatsoever
Basin Marine, Inc. Page 23
(individually, a "Claim"; collectively, "Claims"), which may arise from or in any manner
relate (directly or indirectly) to Tenant's, Tenant's employees, contractor, subcontractor,
agents, guests, invitees, subtenant's possession, occupation or use of the Premises,
specifically including, without limitation, any claim, liability, loss, or damage arising by
reason of:
13.1.1 The death or injury of any person or damage to personal property
caused or allegedly caused by the condition of the Premises which Tenant,
alone, is obligated to maintain, or an act or omission of Tenant or any agent,
contractor, subcontractor, supplier, employee, servant, or sublessee of
Tenant;
13.1.2 Any work performed on the Premises or materials furnished to the
Premises at the request of Tenant or any agent or employee of Tenant, with
the exception of maintenance performed by City to the Premises and/or any
work done to any City vessel at the Premises by any City employee or
agent; or
13.1.3 Tenant's failure to perform any provision of this Lease or to comply
with any requirement of law or any requirement imposed on the Premises
by any duly authorized governmental agency or political subdivision.
13.1.4 Tenant's obligations in this Section 13 shall survive the expiration or
earlier termination of this Lease.
13.2 Tenant's obligations pursuant to this Section shall not extend to any Claim
proximately caused by the negligence, willful misconduct, or unlawful or fraudulent
conduct on the part of the Indemnified Parties, and/or the failure by the City to perform
City's obligations under this Lease, such as maintenance and repair of the bulkhead areas
as described above. This indemnity shall apply to all claims and liability regardless of
whether any insurance policies are applicable.
13.3 Exculpation of City. Except as otherwise expressly provided in this Lease,
City shall not be liable to Tenant for any damage to Tenant or Tenant's property from any
cause other than the sole negligence, intentional or willful or unlawful or fraudulent acts
of the Indemnified Parties. Except as otherwise expressly provided in this Lease, Tenant
waives all claims against the Indemnified Parties arising for any reason other than the
sole negligence, intentional or willful or unlawful or fraudulent acts of the Indemnified
Parties. City shall not be liable to Tenant for any damage to the Premises, Tenant's
property, Tenant's goodwill, or Tenant's business income, caused in whole or in part by
acts of nature, excluding damage to the Premises caused by City's failure to perform
City's maintenance and repair obligations under Section 11, above.
13.4 Insurance. Tenant shall continuously maintain insurance in the types and
amounts specified in Exhibit "G," attached hereto and incorporated herein by this
reference.
Basin Marine, Inc. Page 24
14. DAMAGE OR DESTRUCTION OF PROPERTY/PREMISES
14.1 Destruction of Premises. If the Premises are totally or partially destroyed,
rendering the Premises or any portion thereof totally or partially inaccessible or unusable,
then, except to the extent the damage or destruction falls within City's maintenance and
repair obligation under Section 11.2 or is excluded from Tenant's indemnity obligations
under Section 13, Tenant shall restore the Premises to substantially the same condition
as immediately prior to such destruction (including all trade fixtures, personal property,
Tenant Improvements and Alterations) at its expense. Alternatively, subject to City's
obligations to Tenant under this Lease, such as those under Sections 11.2, Tenant may
elect to terminate this Lease by giving written notice to City within sixty (60) days after the
date of the occurrence of any casualty and also providing to the reasonable satisfaction
of City the following: (a) the cost of the restoration exceeds the amount of any available
insurance proceeds by at least twice the Total Annual Rent for the most recent two (2)
completed Lease Years; (b) at the time of such casualty Tenant maintained all insurance
required by this Lease; and (c) no act attributable to Tenant voided insurance coverage
otherwise available concerning said loss. Upon such termination of the Lease, Tenant
shall: (x) assign to City all insurance proceeds applicable to reconstruction (excluding
Tenant's personal property therein); (y) pay any policy deductible to City; and (z) quitclaim
title to the Premises to City. Notwithstanding such Lease termination, Tenant shall hold
harmless the City from any expenses, liability or loss regarding damage or loss to boats
being repaired or stored by Tenant at the Premises and any other liability or loss incurred
by Tenant concerning such casualty and event, subject to City's obligation under Section
11.2 and the limitations of Tenant's indemnity obligations under Section 13. Upon such
termination, insurance proceeds applicable to reconstruction of the Premises (excluding
Tenant's personal property, fixtures, equipment, inventory, and machinery therein) shall
be paid to City and Tenant shall have no further liability or obligations under this Lease.
14.2 Replacement of Tenant's Personal Property. In the event of damage or
destruction of improvements located on the Premises not giving rise to Tenant's option to
terminate this Lease, or City's obligations to Tenant under Sections 11.2 above, Tenant
shall, at its own expense, replace and repair any such improvements necessary for
Tenant to continue its operations at the Premises for the Approved Use.
14.3 Destruction of Balboa Yacht Basin. In the event that all or a portion of the
Property or Premises or Tenant's critical access to the Property in areas to be maintained
by City is damaged, deteriorated or destroyed by fire or any other casualty not attributable
to Tenant nor covered by Tenant's insurance and as a result the Premises or a material
portion thereof becomes inaccessible or commercially unusable (meaning it causes
Tenant a loss of more than fifty percent (50%) of Tenant's pre -damage business revenue)
for the Approved Use, then:
14.3.1 City shall repair such damage as soon as reasonably possible at
City's expense, in which Rent shall be abated in accordance with the
procedures set forth in Section 15. If the damage or destruction cannot
reasonably be repaired within twelve (12) months after the date of the
casualty, or if City fails to commence repairs within one hundred eighty
Basin Marine, Inc. Page 25
(180) days after giving Tenant written notice of its intention to repair, Tenant
may terminate this Lease upon giving City written notice and the Lease shall
terminate as of the date of notice from Tenant to City.
14.3.2 If such damage, deterioration or destruction is not attributable to the
City's failure to perform its obligations under the Lease and Tenant has not
provided notice that it will perform repairs at its sole expense, then City shall
have the option to terminate this Lease by giving to Tenant written notice
within thirty (30) days following the date of the casualty, in which case this
Lease shall be terminated thirty (30) days following the date of the notice.
15. ABATEMENT OF RENT
15.1 Tenant Improvements; Approved Construction. Subject to City approval of
Tenant's work at the Premises, Tenant shall receive rent abatement during the actual
construction or installation time for such Tenant Improvements, of up to a maximum of
Twenty -Five Thousand Dollars and 00/100 ($25,000.00).
15.2 Tenant's ability to fully operate its business pursuant to the Approved Uses.
Tenant may continue to operate that portion of the Premises not under construction as it
may be safe, practicable and commercially reasonable to do so. Tenant shall provide
documentation of construction activity at least forty-five (45) days prior to the
commencement of the scheduled construction and the City's subsequent written
approval. In no way shall abatement of Rent pursuant to this subsection: (a) exceed
Twenty -Five Thousand Dollars and 00/100 ($25,000.00) in the aggregate during the Term
of this Agreement, and (b) exceed six (6) months, whether consecutively or collectively.
"Construction" shall mean the installation of Tenant Improvements in strict compliance
with the design plans approved in writing by City.
15.3 Damage or Destruction. In the event of damage or destruction of the
Premises or to the Property that impacts the Premises and this Lease is not terminated
under Section 14, Tenant shall continue to utilize the Premises for the operation of its
business to the extent it may be practicable and commercially reasonable. Rent shall
abate only in proportion to the area of the Premises that is rendered unusable. The
abatement of Rent shall commence on the date that use of the Premises is impacted and
continue until the completion of those repairs necessary to restore full use of the Premises
and Tenant's re -opening of the Premises. Tenant's obligation to pay Taxes pursuant to
this Lease shall not be abated or reduced. Rent shall not abate if the damage or
destruction to the Premises is the result of the negligence or willful conduct of Tenant or
its employees, officers or agents. Tenant's right to abatement of Rent is contingent on
payment of insurance proceeds, if any, equal to the amount of Rent pursuant to Loss of
Rent coverage under Tenant's insurance required by the Insurance Requirements.
15.4 No Abatement for Maintenance. Tenant shall not be entitled to any
abatement of Rent for any temporary closures for general maintenance of the Premises
to keep Tenant's business operating in a manner comparable to other similar businesses.
Basin Marine, Inc. Page 26
15.5 Excused Payment of Rent. Tenant shall be excused for payment of Rent for
the period in which any work by City under the Lease materially or fully interferes with
Tenant's operation of the Premises for the Approved Use in accordance with Section 14.
If such work by City materially interferes with Tenant's operation for more than one (1)
year, Tenant has the option to terminate the Lease by providing City with written notice,
in addition to Tenant's other recourse under the Lease.
16. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING AND
ENCUMBERING
16.1 Prohibition of Assignment. City and Tenant acknowledge that City is
entering into this Lease in reliance upon the experience and abilities of Tenant to operate
the Premises for the Approved Use. Consequently, Tenant shall not voluntarily assign or
encumber its interest in this Lease or in the Premises or assign substantially all or any
part of the Premises or allow any other person or entity to occupy or use all or any part of
the Premises without the prior written consent of City, which shall not be unreasonably
withheld. Any assignment or transfer made without the City's written consent is null and
void. City's consent to any assignment or other transfer is subject to Tenant providing
City with evidence reasonably satisfactory to City that: (a) the proposed transferee has
financial strength and shipyard/boat repair experience comparable to Tenant so that such
proposed assignee will not likely cause the Percentage Rent payable to be less than
Percentage Rent paid for the most recent completed Lease Year; (b) the use of the
Premises by the proposed transferee is consistent with the terms of this Lease and is for
the Approved Use; (c) proposed transferee agrees to assume all current and future
Tenant obligations and agrees that the City is not in default of the Lease; (d) provide
services comparable to Tenant to maintain the health of shipyard services and repairs in
the harbor; and (e) Tenant is not then in default of this Lease. Except as otherwise
expressly provided herein, any dissolution, merger, consolidation, reorganization of
Tenant, or the sale or other transfer resulting in a transfer of a controlling percentage of
the capital stock of Tenant, shall be deemed a voluntary assignment; provided, however,
that the sale or transfer of a controlling percentage of the capital stock of Tenant pursuant
to a public offering(s) of equity or debt instruments issued by Tenant, or other transfers
of publicly traded capital stock or debt instruments shall not constitute a voluntary
assignment and shall not require City's consent or approval. The phrase "controlling
percentage" means the ownership of, or the right to vote, stock possession of at least fifty
percent (50%) of the total combined voting power of all classes of Tenant's capital stock
issued, outstanding, and entitled to vote for the election of directors, except for ownership
of publicly traded shares, warrants or similar equity interests in Tenant traded on a
national exchange or over-the-counter markets.
16.2 Exceptions. Notwithstanding the foregoing paragraphs or anything to the
contrary contained herein, City's consent shall not be required for an assignment or
subletting to an Affiliate, Subsidiary, or Successor of Tenant. For purposes hereof, an
"Affiliate", a "Subsidiary", and a "Successor" of Tenant are defined as follows:
16.2.1 "Affiliate" is defined as any corporation or other entity which directly
or indirectly controls or is controlled or is under common control with Tenant
Basin Marine, Inc. Page 27
(for purposes of this Section, "control" shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such corporation or other entity, whether through the
ownership of voting securities or by contract or otherwise);
16.2.2 "Subsidiary" is defined as any corporation or other entity not less
than twenty-five percent (25%) of whose outstanding stock shall, at the time,
be owned directly or indirectly by Tenant and which is at least as
creditworthy as Tenant; and
16.2.3 "Successor" is defined as an assignee, transferee, personal
representative, heir, or other entity in which or with which Tenant is merged
or consolidated, in accordance with applicable statutory provisions for
merger or consolidation of corporations or a corporation, or other entity
acquiring a substantial portion of the property and assets of Tenant,
succeeding lawfully and pursuant to the provisions of this Lease, to the
rights or obligations of Tenant.
16.3 Tenant Financing. If Tenant is not then in default, and Tenant gives City not
less than forty-five (45) days advance written notice, then from time to time during the
Term, City shall sign a commercially reasonable non -disturbance and attornment
agreement or estoppel certificate from an institutional commercial lender or Tenant
equipment vendor of Tenant's choice, in a form reasonably acceptable to the City
Attorney. City's fee ownership of the Premises and leasehold interest shall be senior to
and not a security for such Tenant loan or Tenant equipment lien.
16.4 Continuing Effect. City's consent to any assignment or encumbrance shall
not relieve Tenant from its obligations or liabilities under this Lease nor act as a waiver of
the requirement that such consent be obtained to any subsequent assignment or
encumbrance.
17. FORCE MAJEURE; EXTENSIONS OF TIME OF PERFORMANCE
17.1. Force Majeure. Neither Party shall be liable for any failure or delay in
performing an obligation under this Lease that is due to any of the following causes: acts
of God, war, terrorist act, government -mandated quarantine restrictions, riot, natural
catastrophes, Federal or state governmental acts or omissions, national strikes, fire, or
explosion (hereinafter "Force Majeure"), provided that the Force Majeure is
unforeseeable, beyond the control of, and not due to the fault or negligence of the Party
claiming the Force Majeure. For the avoidance of doubt, Force Majeure shall not include
(a) any epidemic, pandemic or government mandated quarantine restriction; ; (b) financial
distress or the inability of either Party to make a profit or avoid a financial loss, (c) changes
in the market prices or conditions, (d) a Party's financial inability to perform its obligations
hereunder, (e) maintenance and repair of the Premises as required by Tenant under this
Lease; (f) disruption of utilities; (g) limited or no bay access for the Premises not caused
by Tenant; and (h) other causes beyond the control of Tenant that prevent Tenant from
operating the Approved Use at the Premises totally or "materially" (which is defined as
Basin Marine, Inc. Page 28
causing Tenant's business revenue to drop by more than thirty percent (30%) over a
twelve (12) month period, as compared to such Tenant revenue prior to such event).
17.2. Notice; Excuse or Delay in Performance. A Party claiming Force Majeure
shall promptly notify the other Party in writing, no later than fifteen (15) days after the
commencement of delay or inability to perform, and the Party shall continue with
commercially reasonable diligence in an effort to limit the period of nonperformance or
delay. A Party's excuse from failure or delay in performing an obligation under this Lease
due to Force Majeure shall only be to the extent caused by the Force Majeure and shall
not be any longer than the period commencing from when the requisite written notice is
given and ending when the Party is no longer delayed or prevented from performing on
account of that noticed Force Majeure event. Time of performance under this Lease may
also be extended in writing by City and Tenant.
18. DEFAULT
18.1 Default by Tenant. The occurrence of anyone (1) or more of the following
events shall constitute a default and material breach of this Lease by Tenant (each
defined as a "Tenant Default"):
18.1.1 The vacating or abandonment of the Premises by Tenant for a period
of thirty (30) successive days, without the prior written approval of City or
its authorized representative, excluding closures during periods of casualty,
condemnation or permitted closures set forth in this Lease;
18.1.2 The failure by Tenant to make any payment of Rent or any other
payment required by this Lease, as and when due, and such failure
continues for a period of ten (10) days after written notice of default from
City to Tenant;
18.1.3 Except as specified in Subsection 18.1.2, the failure of Tenant to
observe or perform any of the material covenants, conditions or provisions
of this Lease to be observed or performed by Tenant where such failure
continues for a period of thirty (30) days after written notice of default from
City to Tenant; provided, however, that if the nature of Tenant's default is
such that more than thirty (30) days are reasonably required for its cure,
then Tenant shall not be deemed to be in default if Tenant commences such
cure within said thirty (30) day period and thereafter diligently prosecutes
such cure to completion; however, the thirty (30) day cure period is not
allowed for any environmental event involving Hazardous Substances at the
Premises caused by Tenant or Tenant's agents or customers. Immediately
following any such environmental event Tenant shall use Tenant's best
efforts to fully remediate or prove to the reasonable satisfaction of City that
remediation is underway and will be completed in ninety (90) days without
any risk of further environmental damage to the Premises and/or
surrounding area;
Basin Marine, Inc. Page 29
18.1.4 The making by Tenant of any general arrangement or assignment
for the benefit of creditors;
18.1.5 Tenant becomes a "debtor" as defined in 11 U.S.C. Section 101 or
any successor statute thereto (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty (60) days);
18.1.6 The appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such appointment is not discharged within sixty
(60) days; and
18.1.7 The attachment, execution or the judicial seizure of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where such seizure is not discharged within sixty (60) days.
18.2 Remedies.
18.2.1 Cumulative Nature of Remedies. If any default by Tenant shall
continue without cure beyond the time permitted under this Lease, City shall
have the remedies described in this Section in addition to all other rights
and remedies provided by law or equity, to which City may resort
cumulatively or in the alternative.
18.2.2 Re-entry Without Termination. City may re-enter the Premises, and,
without terminating this Lease, re -let all or a portion of the Premises. City
may execute any agreements made under this provision in City's name and
shall be entitled to all rents from the use, operation, or occupancy of the
Premises. Tenant shall nevertheless pay to City on the dates specified in
this Lease the equivalent of all sums required of Tenant under this Lease,
plus City's expenses in conjunction with re -letting, less the proceeds of any
re -letting or attornment. No act by or on behalf of City under this provision
shall constitute a termination of this Lease unless City gives Tenant specific
written notice of termination.
18.2.3 Termination. City may terminate this Lease by giving Tenant written
notice of termination with a specified termination date. In the event City
terminates this Lease, City may recover possession of the Premises (which
Tenant shall surrender and vacate upon demand) and remove all persons
and property. City shall be entitled to recover the following as damages:
18.2.3.1 The value of any unpaid Rent or other charges that are
unpaid at the time of termination,
18.2.3.2 The value of the Rent and other charges that would
have accrued after termination less the amount of Rent and charges the
City received or could have received through the exercise of reasonable
diligence as of the date of the award, provided, however, that City shall use
Basin Marine, Inc. Page 30
its best efforts to re -lease the Premises and upon the City's re -leasing the
Premises Tenant shall be released from all further liability for Rent and other
charges that would have accrued after termination;
18.2.3.3 Any other amount necessary to reasonably
compensate City for the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease; and
18.2.3.4 At City's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time -to -time by applicable
California law. City shall be entitled to interest at the rate of ten percent
(10%) per annum on all Rent and other charges from the date due or the
date they would have accrued. City shall also be entitled to an award of the
costs and expenses incurred by City in maintaining or preserving the
Premises after default, preparing the Premises for re -letting, or repairing
any damage caused by an act or omission of Tenant.
18.2.4 Use of Tenant's Personal Property. In the event of Tenant Default
past applicable notice and cure periods, subject to the right of lien holders
and the owners of boats then on the Premises to each remove such lien
items and boats, as applicable, City may use Tenant's personal property
and trade fixtures in which Tenant has an ownership interest located on the
Premises and subject also to the rights of any Tenant lien holder with a non -
disturbance agreement with City regarding Tenant personal property, or any
of such property and fixtures without compensation or liability to Tenant for
use or damage. In the alternative, City may store the property and fixtures
at the cost of Tenant. City shall not operate, or allow any other person or
entity to operate under the same or similar trade name as the Tenant.
18.3 City's Right to Cure Tenant's Default. Upon continuance of any Tenant
Default beyond applicable notice and cure periods, City may, but is not obligated to, cure
such Tenant Default at Tenant's cost. If City pays any money or performs any act required
of, but not paid or performed by, Tenant after notice, the payment and/or the reasonable
cost of performance shall be due as Additional Rent not later than ten (10) days after
service of a written demand accompanied by supporting documentation upon Tenant. No
such payment or act shall constitute a City waiver of such Tenant Default or of any remedy
for such Tenant Default or render City liable for any loss or damage resulting from such
City performance.
18.4 Waiver of Rights. Tenant waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or under any
other present or future law, in the event Tenant is evicted or City takes possession of the
Premises by reason of any Tenant Default.
Basin Marine, Inc. Page 31
19. CONDEMNATION
19.1 Termination of the Lease. Tenant or the City shall have the right to terminate
this Lease as of the date a public agency with lawful authority (excluding City) to condemn
obtains possession of or title to any part of the land area at the Premises, or materially
impacts Tenant required street or Newport Bay access to the Premises, or the
condemnation materially (meaning causes a loss of fifty percent (50.00%) or more of
Tenant's then business revenue as compared to before such condemnation) affects the
conduct of Tenant's business in the Premises, or the Premises will no longer be suitable
for the conduct of Tenant's business for the Approved Use. In the event of Termination
pursuant to this Subsection, Base Rent shall be prorated to the date of Termination, any
unearned Rent shall be refunded to Tenant and Tenant shall have no further obligations
under this Lease. Tenant shall not grant a right of entry to any condemnor without the
written consent of City.
19.2 Partial Termination of Lease. If this Lease is not terminated under this
Section 19, then this Lease shall terminate as to the portion of the Premises taken upon
the date which possession of said portion is taken, but this Lease shall continue in force
and effect as to the remainder of the Premises. Tenant shall, in the event of a taking of
any portion of the Premises, be entitled to a reduction in the Base Rent in reasonable
proportion to the area of the Premises so taken verses its impact on Tenant's continued
operations for the Approved Use.
19.3 Allocation of Award. In the event that an award is made for an entire or
partial taking or for damage to the Premises or any interest therein in any action in direct
or inverse condemnation or in the event of a taking under the power of eminent domain,
the Parties hereto agree that their respective rights to the award or compensation paid
shall be as follows:
19.3.1 City shall be entitled to that portion of the award received for the
taking of the real property within the Premises, the value of this leasehold,
including all buildings and other improvements to which City is entitled on
expiration or termination of this Lease, and for severance damages.
19.3.2 Tenant shall be entitled to any award that may be made for the taking
of or injury to Tenant's business and profits, including any amount
attributable to Tenant's personal property, fixtures, installations, or
improvements in or on the Premises, Tenant's relocation expenses, but
excluding any "bonus value" attributable to this Lease.
19.3.3 Any interest payable on the total award shall be divided between City
and Tenant in the same ratio as are the awards allocated to them pursuant
to the other provisions of this Section.
Basin Marine, Inc. Page 32
20. SUBJECT TO TIDELANDS GRANT
The Premises are located on property that is the subject to the Tidelands Grant,
administered by the State of California. Tenant shall not take any action that would cause
the City to be in violation of any provisions of the Tidelands Grant. If the State terminates
the Tidelands Grant for any reason or prevents the Premises from being used for the
Approved Use, this Lease terminates as a result and the Parties shall be released from
all liabilities and obligations under this Lease.
21. WASTE OR NUISANCE
Tenant shall not commit or permit the commission of any waste on the Premises.
Tenant shall not maintain, commit, or permit any nuisance as defined in Section 3479 of
the California Civil Code on the Premises. Tenant shall not use or permit the use of the
Premises for any unlawful purpose, including, but not limited to, any use that violates the
City's charter or Municipal Code.
22. NO CONFLICTS OF USE, HAZARDOUS SUBSTANCES
22.1 No Conflicts of Use. From the Effective Date and throughout the Term,
Tenant shall not use, occupy or permit any portion of the Premises or the Property to be
used or occupied in violation of any law. City represents and warrants to Tenant that, to
the best of City's knowledge, (i) Tenant's use of the Premises does not conflict with
applicable laws, and City knows of no reason why Tenant would be unable to obtain all
required permits, licenses and approvals from the appropriate governmental authorities;
(ii) the Premises is not in violation of any applicable law, rules or regulations and Tenant's
contemplated uses will not cause any such violation, and (iii) the Premises is free of any
and all Hazardous Substances as of the date of this Lease. In the event that the presence
of any Hazardous Substances not caused by Tenant or its customers, guests, invitees,
contractors, agents, subcontractors is detected at the Premises at any time during the
Term of this Lease all remedial work shall be performed by City at City's expense.
Tenant's obligation to open (or re -open, as the case may be) shall be delayed until the
remedial work is completed if the remedial work is performed prior to Tenant opening for
business. Tenant's obligation to pay Rent shall be abated pursuant to Section 15 to the
extent Tenant is unable to conduct its business upon the Premises as a result of any
remedial work that is performed subsequent to Tenant opening for business. Tenant shall
have the right (but not the obligation) to terminate this Lease, upon thirty (30) days
advance written notice to City in the event that Hazardous Substances are detected at
the Premises and the presence or the remediation materially affects Tenant's ability to
conduct its business at the Premises.
22.2 "Hazardous Substances" means: (i) any substance, product, waste or other
material of any nature whatsoever which is or becomes listed, regulated, or addressed
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq. ("CERLCA"); the Hazardous Substances
Transportation Act, 49 U.S.C. Section 1801, et seq.; the Resource Conversation and
Recovery Act, 42 U.S.C. Section 6901 et seq. "RCRA"); the Toxic Substances Control
Basin Marine, Inc. Page 33
Act, 15 U.S.C. Section 2601 et seq.; the Clean Water Act, 33 U.S.C. Section 1251 etseq.;
the California Hazardous Waste Control Act, Health and Safety Code Section 25100
et seq.; the California Hazardous Substance Account Act, Health and Safety Code
Sections 25330 et seq.; the California Safe Drinking Water and Toxic Enforcement Act,
Health and Safety Code Sections 25249.5 et seq.; California Health and Safety Code
Sections 25280 et seq. (Underground Storage of Hazardous Substances); the California
Hazardous Waste of Concern and Public Safety Act, Health and Safety Code Sections
25169.5 et seq.; California Health and Safety Code Sections 25501 et seq. (Hazardous
Substances Response Plans and Inventory); or the Porter -Cologne Water Quality Control
Act, Water Code Sections 13000 et seq., all as they, from time -to -time may be amended
or re -codified (the above -cited statutes are here collectively referred to as the "Hazardous
Substances Laws"), or any other Federal, State or local statute, law, ordinance,
resolution, code, rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any hazardous, toxic or dangerous waste,
substance or material, as now or at any time hereafter in effect; (ii) any substance,
product, waste or other material of any nature whatsoever which may give rise to liability
under any of the above statutes or under any statutory or common law theory, including
but not limited to negligence, trespass, intentional tort, nuisance, waste or strict liability or
under any reported decisions of a state or federal court; (iii) petroleum or crude oil; and
(iv) asbestos.
22.3 Tenant shall not use, occupy, or permit any portion of the Premises to be
used or occupied in violation of any Hazardous Substance Laws. Notwithstanding any
other provision in this Section 22, Tenant is not responsible or liable for any Hazardous
Substances that are brought onto the Premises, through migration or other means, by
third parties not associated with Tenant.
22.4 Notwithstanding any contrary provision of this Lease, and in addition to the
indemnification duties of Tenant set forth elsewhere in this Lease, Tenant indemnifies,
defends with counsel reasonably acceptable to City, protects, and holds harmless City
and its elected and appointed officials, boards and commissions, officers, employees,
agents, and volunteers from and against any and all losses, fines, penalties, claims,
demands, obligations, actions, causes of action, suits, costs and expenses (including,
without limitation, attorneys' fees, disbursements and court costs), damages, judgments,
or liabilities, including, but not limited to, any repair, cleanup, detoxification, or preparation
and implementation of any remedial, response, closure or other plan of any kind or nature
which the City and its elected or appointed officials, boards and commissions, officers,
employees, agents or volunteers may sustain or incur, or which may be imposed upon
them, in connection with any breach of Tenant's obligations or representations in this
Lease or the use of the Premises under this Lease, arising from or attributable to the
Tenant Parties (defined below) storage or deposit of Hazardous Substances in violation
of applicable laws. This section is intended to operate as an agreement pursuant to
Section 107(e) of CERCLA, 42 USC Section 9607(e), California Health and Safety Code
Section 79860 or other applicable law, to insure, protect, hold harmless, and indemnify
City for any claim pursuant to the Hazardous Substance laws or the common law.
Basin Marine, Inc. Page 34
22.5 Tenant does not, and shall not, authorize any third party to use, generate,
manufacture, maintain, permit, store, or dispose of any Hazardous Substances in
violation of applicable laws on, under, about or within the Premises.
22.6 If at any time during the Term of this Lease, Tenant becomes aware of
(i) any actual or threatened release of any Hazardous Substances on, in, under, from, or
about the Premises in violation of Hazardous Substances Laws; or (ii) any inquiry,
investigation, proceeding, or claim by any government agency or other person regarding
the presence of any Hazardous Substances in violation of Hazardous Substance Laws
on, in, under, from or about the Premises, Tenant shall give City written notice of the
release or inquiry within five (5) days after Tenant becomes aware or first has reason to
believe there has been a release or inquiry and shall simultaneously furnish to City copies
of any claims, notices of violation, reports, warning or other writings received by Tenant
that concern the release or inquiry.
22.7 If the presence of any Hazardous Substances brought onto the Premises
by Tenant or Tenant's employees, agents, sublessees, licensees, concessionaires,
contractors, or invitees ("Tenant Parties"), or generated by same during the Term of this
Lease, results in contamination of the Premises or adjacent properties in violation of
Hazardous Substance Laws, Tenant shall promptly take all necessary actions, at
Tenant's sole expense, to remove or remediate such Hazardous Substances in full
compliance with applicable laws. Tenant shall provide notice to City prior to performing
any removal or remedial action. Tenant shall not propose nor agree to any covenant of
use restriction as part of any removal or remediation required as a result of this provision
without City's written consent. Tenant shall pay any costs City incurs in performing
Tenant's obligation to clean-up contamination resulting from Tenant's operations or use
of the Premises.
22.8 Should any clean-up of Hazardous Substances for which Tenant is
responsible not be completed prior to the expiration or sooner termination of the Lease,
including any extensions thereof, then Tenant shall transfer the amounts required to
complete clean-up into an escrow account, together with City -approved instructions for
the disbursement of such amount in payment of the costs of any remaining clean-up as it
is completed. If the nature of the contamination or clean-up required of Tenant is of such
a nature as to make the Premises untenable or unleasable, then Tenant shall be liable to
City as a holdover lessee until the clean-up has been sufficiently completed to make the
Premises suitable for lease to third parties. The estimated cost of the clean-up shall
require approval of the City.
22.9 If City determines, in its reasonable discretion, that Tenant does not have
insurance or other financial resources sufficient to enable Tenant to fulfill its obligations
under this provision, whether or not accrued, liquidated, conditional, or contingent, then
Tenant shall, at the request of City, procure and thereafter maintain in full force and effect
such environmental impairment liability and/or pollution liability insurance policies and
endorsements, or shall otherwise provide such collateral or security reasonably
acceptable to City as is appropriate to assure that Tenant will be able to perform its duties
and obligations hereunder.
Basin Marine, Inc. Page 35
22.10 Tenant's obligations in this Section 22 shall survive the expiration or earlier
termination of this Lease.
23. EVENT OF BANKRUPTCY
23.1 If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. Sections 101 et seq. or any similar or
successor statute ("Bankruptcy Code"), any and all monies or other consideration payable
or otherwise to be delivered in connection with such assignment shall be paid or delivered
to City, shall be and remain the exclusive property of City and shall not constitute property
of Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code. Any and
all monies or other consideration constituting City's property under this Section not paid
or delivered to City shall be held in trust for the benefit of City and be promptly paid or
delivered to City.
23.2 Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to have
assumed all of the obligations arising under this Lease and any Amendments on and after
the date of such assignment, including the obligation to operate the business which
Tenant is required to operate under this Lease.
24. NOTICES
Any notice, demand, request, consent, approval, waiver, exercise of a right of a
Party under this Lease, such as a Tenant Option Notice under Section 2, above, change
of notice information, or other communication (each defined as a "Notice") that either party
desires or is required to give under this Lease shall be in writing and shall be deemed
given three (3) days after deposit into the United States registered mail, postage prepaid,
by registered or certified mail, return receipt requested. Unless Notice of a different
address has previously been given in accordance with this Section, all Notices shall be
addressed as follows:
If to City, to: City of Newport Beach
Attn: Real Property Administrator
100 Civic Center Drive
Newport Beach, CA 92660
If to Tenant, to: BASIN MARINE, INC.
Attention: David L. New
829 Harbor Island Drive, Suite A
Newport Beach, CA, 92660
With a copy to: Basin Marine, Inc.
Attn: Derek J. New
1318 Dover Dr.
Newport Beach, CA 92660
Basin Marine, Inc. Page 36
Either Party may, by written notice to the other Party hereto, specify a different
address for notice purposes or add one (1) additional address for Notice purposes to that
Party.
25. SURRENDER OF PREMISES
At the expiration or earlier termination of this Lease, Tenant shall surrender, at no
cost, to City the possession of the Premises. Tenant shall leave the surrendered
Premises, including Tenant Improvements, Alterations, personal property, equipment and
fixtures as required by Section 9.8, in broom clean and good condition, reasonable wear
and tear excepted. All property that Tenant is not required to surrender, but that Tenant
does abandon shall, at City's election, become City's property at expiration or termination,
subject to the rights of any Tenant lien holder with a non -disturbance agreement with the
City. City shall owe no compensation to Tenant for any personal property, equipment or
fixtures left at the Premises by Tenant more than fifteen (15) days after the expiration or
termination of this Lease.
26. COMPLIANCE WITH ALL LAWS
Tenant shall at its own cost and expense comply with all statutes, ordinances,
resolutions, regulations, rules, administrative orders, and other requirements of all
governmental entities, including federal, state, county or municipal, or other government
agency or authority having jurisdiction over the parties hereto or the Premises, whether
now in force or hereinafter enacted. Further, it shall be the obligation of Tenant to comply
with State of California labor laws, rules and regulations. The parties agree that City shall
not be liable for any violation by Tenant (or Tenant's agent, sublessee or any party
affiliated with Tenant) thereof.
27. WAIVERS
The waiver by either party of any breach or violation of any term, covenant or
condition of this Lease, or of any ordinance, law or regulation, must be in writing and given
by Notice, shall not be deemed to be a waiver of any other term, covenant, condition,
ordinance, law or regulation, or of any subsequent breach or violation of the same or other
term, covenant, condition, ordinance, law or regulation. The subsequent acceptance by
either party of any fee, performance, or other consideration which may become due or
owing under this Lease, shall not be deemed to be a waiver of any preceding breach or
violation by the other party of any term, condition, covenant of this Lease or any applicable
law, ordinance or regulation.
28. SEVERABILITY
If any term or portion of this Lease is held to be invalid, illegal, or otherwise
unenforceable by a court of competent jurisdiction, the remaining provisions of this Lease
shall continue in full force and effect.
Basin Marine, Inc. Page 37
29. APPLICABLE LAW
This Lease shall be construed in accordance with the laws of the State of California
in effect at the time of the execution of this Lease. Any action brought relating to this
Lease shall be adjudicated in a court of competent jurisdiction in the County of Orange.
30. ENTIRE AGREEMENT; AMENDMENTS
30.1 The terms and conditions of this Lease, all exhibits attached, and all
documents expressly incorporated by reference, represent the entire agreement of the
parties with respect to the subject matter of this Lease.
30.2 This Lease shall supersede any and all prior agreements, oral or written,
regarding the subject matter between Tenant and City, including but not limited to the
Existing Lease.
30.3 No other agreement, promise or statement, written or oral, relating to the
subject matter of this Lease, shall be valid or binding, except by way of a written
amendment to this Lease.
30.4 The terms and conditions of this Lease shall not be altered or modified
except by a written amendment to this Lease signed by Tenant and City or City's
authorized representative.
30.5 In case of conflict between provisions of this Lease, the more specific
provision of this Lease shall then control; however if any conflicts arise between the terms
and conditions of this Lease, and the terms and conditions of the attached exhibits or the
documents expressly incorporated by reference, the terms and conditions of this Lease
shall control.
30.6 Any obligation of the parties relating to monies owed, as well as those
provisions relating to limitations on liability and actions, shall survive termination or
expiration of this Lease.
30.7 Each party has relied on its own inspection of the Premises and examination
of this Lease, the counsel of its own advisors, and the warranties, representations, and
covenants in this Lease. The failure or refusal of either party to inspect the Premises, to
read this Lease or other documents, or to obtain legal or other advice relevant to this
transaction constitutes a waiver of any objection, contention, or claim that might have
been based on such reading, inspection, or advice.
31. TIME IS OF THE ESSENCE
Time is of the essence for this Lease. The term "day" or "days" in this Lease each
mean calendar day or days, as applicable, unless otherwise defined, and subject to
extension to the next day if any deadline occurs on a weekend, Federal Holiday or on a
day when banks are not open in Orange County, California.
Basin Marine, Inc. Page 38
32. SUCCESSORS
Subject to the provisions of this Lease on assignment and subletting, each and all
of the covenants and conditions of this Lease shall be binding on and shall inure to the
benefit of the heirs, successors, executors, administrators, assigns, and personal
representatives of each respective Party.
33. INTERPRETATION
The terms of this Lease shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the
authorship of this Lease or any other rule of construction which might otherwise apply.
34. HEADINGS
The captions of the various sections of this Lease are for convenience and ease
of reference only and do not define, limit, augment, or describe the scope, content, or
intent of this Lease.
35. GENDER; NUMBER
The neuter gender includes the feminine and masculine, the masculine includes
the feminine and neuter, and the feminine includes the neuter, and each includes
corporation, partnership, or other legal entity whenever the context requires. The singular
number includes the plural whenever the context so requires.
36. EXHIBITS
All exhibits to which reference is made in this Lease are incorporated into and part
of this Lease by reference. Any reference to "this Lease" includes all such matters
incorporated by reference.
37. CITY BUSINESS LICENSE
Tenant shall obtain and maintain during the duration of this Lease, a City business
license as required by the Newport Beach Municipal Code.
38. NO ATTORNEYS' FEES
The prevailing party in any action brought to enforce the terms and conditions of
this Lease, or arising out of the performance of this Lease, shall not be entitled to recover
its attorneys' fees.
39. NONDISCRIMINATION
Tenant, for itself and its successors, agrees that in the performance under this
Lease, Tenant shall not discriminate against any person because of the marital status,
Basin Marine, Inc. Page 39
ancestry, gender, sexual orientation, etc. of that person or any characteristic listed or
defined in Section 11135 of the California Government Code.
40. NO THIRD -PARTY BENEFICIARIES
City (both as a lessor and as the City of Newport Beach) and Tenant do not intend,
by any provision of this Lease, to create in any third party, any benefit or right owed by
one party, under the terms and conditions of this Lease, to the other party.
41. NO DAMAGES
Tenant acknowledges that City would not enter into this Lease if it were to be liable
for damages (including, but not limited to, actual damages, economic damages,
consequential damages, lost profits, loss of rents or other revenues, loss of business
opportunity, loss of goodwill or loss of use) under, or relating to, this Lease or any of the
matters referred to in this Lease, including, without limitation, any and all plans, permits,
licenses or regulatory approvals, CEQA documents and City's obligations, if any,
pursuant to Sections 11, 14 and 22. Accordingly, Tenant covenants and agrees on behalf
of itself and its successors and assigns, not to sue City (either in its capacity as lessor in
this Lease or in its capacity as the City of Newport Beach) for damages (including, but not
limited to, actual damages, economic damages, consequential damages, lost profits, loss
of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use)
or monetary relief for any breach of this Lease by City or for any dispute, controversy, or
issue between City and Tenant arising out of or connected with this Lease or any of the
matters referred to in this Lease, including, without limitation, any and all plans, permits,
licenses or regulatory approvals, CEQA documents, City's obligations, if any, pursuant to
Sections 11, 14 and 22 or any future amendments or enactments thereto. The parties
agree that declaratory relief, injunctive relief, mandate and specific performance shall be
Tenant's sole and exclusive judicial remedies. This clause is only applicable while the
City is the landlord under this Lease and does not apply to any successor to all or any
part of the City interest in this Lease.
42. GOVERNMENT CLAIMS ACT
Tenant and City agree that in addition to any claims filing or notice requirements
in this Lease, Tenant shall file any claim that Tenant may have against City in strict
conformance with the Government Claims Act (California Government Code Section 900
et seq.), or any successor statute.
43. MEMORANDUM OF LEASE AGREEMENT
A Memorandum of Lease Agreement, in a form and content similar to that
contained in Exhibit "H" shall be executed by the parties as part of this Lease and then
recorded by the parties promptly upon execution of this Agreement. Upon execution by
both parties, the Memorandum of Lease Agreement shall be recorded by City against the
Premises in the office of the Orange County Clerk -Recorder, as required by Government
Code Section 37393, and a recorded copy provided to Tenant. At the end of the Term or
Basin Marine, Inc. Page 40
earlier termination of this Lease, Tenant shall execute the document required by City to
terminate such Memorandum as a lien on title to the Premises.
44. COUNTERPARTS
This Lease may be executed in two (2) or more counterparts, each of which shall
be deemed an original and all of which together shall constitute one (1) and the same
fully executed instrument.
45. TERMINATION OF EXISTING LEASE
Concurrently with execution of this Lease by the Parties, the Existing Lease is
hereby terminated on the Effective Date of this Lease.
[SIGNATURE PAGE FOLLOWS]
Basin Marine, Inc. Page 41
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:_ If �� I - - S
By:
Aaron ITairI5
City Attorney
ATTEST:
Date: a 7
By.
Leilani I. Brown
City Clerk
PoR�e
r
�P
CgLlFO9'
CITY OF NEWPORT BEACH,
a California municipal corporation
Date: 21 3 / 9-025
By:
Gra V
Cit anager
TENANT:
BASIN MARINE, INC., a California
corporation
Date:
Signed in Counterpart
Bv:
David L. New
President
Date:
Signed in Counterpart
By:
Derek J. New
Secretary
[END OF SIGNATURES]
Attachments: Exhibit "A" Property and Balboa Yacht Basin Marina Depiction
Exhibit "B" Premises Depiction
Exhibit "C" Balboa Yacht Basin Rules & Regulations
Exhibit "D" Tenant Improvements
Exhibit "E" Faithful Performance Bond
Exhibit "F" Labor and Materials Bond
Exhibit "G" Insurance
Exhibit "H" Memorandum of Lease Agreement
Basin Marine, Inc. Page 42
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
dates written below.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
CITY ATTORNEY'S OFFICE a California municipal corporation
Date: / n L 1 n S Date:
By: By:
Aaron . Harp Grace K. Leung
City Attorney City Manager
ATTEST:
Date:
Bv:
Leilani I. Brown
City Clerk
Attachments:
TENANT:
BASIN MARINE, INC., a California
corporation
Date:
By:
David 1. New
President
Date: ) l� JZ�
By:
Derek J. New
Secretary
[END OF SIGNATURES]
Exhibit "A"
Property and Balboa Yacht Basin Marina Depiction
Exhibit "B"
Premises Depiction
Exhibit "C"
Balboa Yacht Basin Rules & Regulations
Exhibit "D"
Tenant Improvements
Exhibit "E"
Faithful Performance Bond
Exhibit "F"
Labor and Materials Bond
Exhibit "G"
Insurance
Exhibit "H"
Memorandum of Lease Agreement
Basin Marine, Inc. Page 42
EXHIBIT "A"
Property and Balboa Yacht Basin Marina Depiction
Basin Marine, Inc. Page A-1
EXHIBIT "B"
Premises Depiction
Basin Marine, Inc. Page B-1
EXHIBIT "C"
Balboa Yacht Basin Rules & Regulations
Basin Marine Inc. Page C-1
�t /-FOR%
BALBOA YACHT BASIN
829 Harbor Island Drive
Newport Beach, CA 92660
(949) 673-0360
Rules and Regulations
When a boat enters the Balboa Yacht Basin ("BYB"), it immediately comes under the jurisdiction
of BYB and shall be berthed only where ordered and maneuvered as directed. Vessels may be
relocated within BYB at City's discretion. The City ordinances, rules and regulations, summarized
herein and as amended from time to time, and all other regulations established by regulatory
bodies having jurisdiction at BYB, shall form a part of all Slip Rental Agreements as though printed
thereon.
The Balboa Yacht Basin is owned by the City of Newport Beach ("City") and managed by Bellport
Group, Inc., located onsite at 829 Harbor Island Drive.
There is no warranty of any kind as to the condition of the floats, walks, gangways, ramps or
mooring gear, nor shall City be responsible therefore, or for injuries to persons or property
occurring thereon or for any other reason, whether herein specifically stated or not.
No Vessel may be moored at the BYB unless a current Slip Rental Agreement or Temporary
Slip Rental Agreement (collectively, the "Agreements") is in effect between Vessel Owner
and City. All defined terms herein shall have the same meaning as in the Agreements.
2. Only the Vessel described in the Agreements and registered to Vessel Owner may occupy
the assigned Slip. Only one boat is permitted to occupy a slip at any one time, unless
otherwise approved by the Marina Manager.
3. Use of boats moored at BYB for unauthorized commercial purposes is prohibited.
4. No major repairs or complete overhauls shall be made on boats in BYB. Extent of the
permitted repairs shall be at the discretion of the City. Disc sanding and spray painting are
strictly forbidden.
5. Supplies, materials, accessories or gear of all kinds shall not be stored within BYB except
in approved lockers. No additional locker boxes shall be placed on the docks by Vessel
Owner. Maximum weight in lockers shall not exceed 70 pounds.
6. City reserves the right to inspect all boats to determine if they are properly identified and
equipped for safe operation in accordance with Coast Guard and other applicable
regulations.
No Vessel Owner shall throw, discharge, pump or deposit from any boat or float any refuse,
oil, spirits, flammable liquid, or other polluting matter into BYB. All such matter shall be
deposited in appropriately marked containers within BYB.
8. Use of boat toilets not equipped with storage devices approved by the state or local health
departments is not permitted within BYB. City reserves the right to inspect all boats for
installation and proper operation of such devices and holding tanks.
9. Unnecessary operation of engines in berths is not permitted. No excessive noise is allowed.
Halyards should be tied away from masts.
10. Except for entering or leaving slips, marine engines, power generating equipment or other
noise making machinery shall not be operated between the hours of 5:00 P.M. and 9:00
A.M. Engines may not be operated in gear while boats are secured to dock.
11. Water or power lines shall not cross main walks.
12. All boats shall be moored by Vessel Owner in a safe manner, on cleats, with strong and
adequate lines.
13. The speed limit within BYB shall be dead slow, or wakeless speed, whichever is slower.
14. Fishing from the slips is not allowed. No cleaning of fish is permitted in BYB.
15. There shall be no laundering or drying of wearing apparel on the docks or on the dock or
rigging of a boat in BYB.
16. Restrooms will remain locked at all times. All keys must be returned to the Marina Manager
office upon termination of the Agreement. If not returned, the Key Deposit will be retained
by the City. Keys must not be duplicated.
17. Vessel Owner shall notify the Marina Manager when they expect Vessel to be away from
the Slip for any period in excess of thirty (30) calendar days. Vessel Owner shall not sublet
or otherwise grant others the use of the Slip. During any absence of the Vessel, City may
use the Slip for any purpose without credit or compensation to Vessel Owner.
18. For security reasons, no dinghy, sabot, float or other similar boat shall be permitted to cruise
up and down the fairways. All such boats must be kept on Vessel. The use of another slip
at any time, for ANY non -emergency reason is not permitted.
19. The maximum distance by which any boat (including all projections such as transom
platforms, booms, gait tanks, bowsprits, etc.) may extend beyond the end of the berth may
not be more than ten percent (10%) of the length of the Slip beyond the end of the Slip. No
part of the Vessel shall at any time extend over any portion of any dock at BYB. No part of
any boat shall extend over the main walkway.
20. All equipment and electrical connections made by Vessel Owner must be approved by the
Marina Manager.
21. No fueling or transferring of fuel from docks shall be permitted at any time.
22. Vessel Owner shall be responsible for any oil, paint, or other materials spilled, dripped or
otherwise applied to the concrete fingers or walks adjacent to the boat slip.
23. Boat boarding steps shall be a maximum of one-half (1/2) the width of the finger and shall
be of lightweight, open construction. No storage will be allowed under the boarding steps.
24. No dinghies, masts, bicycles, hibachis, etc. shall be stored on the docks. Items left or stored
on the docks will be confiscated.
25. Trash containers are provided. Vessel Owners shall not place their own trash containers
on the docks.
26. No cleats, dock wheels or other accessories shall be installed by Vessel Owner. The
dockmaster should be contacted if additional accessories are necessary.
27. Any paint, varnish, etc. spilled on the docks or lockers shall be cleaned up immediately. If
the spill cannot be removed by Vessel Owner, he should contact the Marina Manager for
assistance.
28. Vessel Owner is encouraged to inform the Marina Manager of any leaks or other
malfunctions with water or electricity, etc., so that they may be corrected as soon as
possible.
29. ANIMALS SHALL BE LEASHED AT ALL TIMES. Should the size or temperament of a pet
disturb others or should the pet commit any nuisance on the property of BYB, such animal
shall be removed from BYB by Vessel Owner.
30. Children under twelve (12) years of age are not permitted on docks without the immediate
presence of a parent or other responsible adult.
31. Disorderly or discourteous conduct by Vessel Owner or guests that might injure a person,
cause damage to property or harm the reputation of BYB shall be cause for termination of
the Vessel Owner's Agreement.
32. Vessel Owner shall park vehicles in areas designated for Basin parking. Parking areas shall
not be used for storage of trailers without City's consent.
33. Vessel Owners are advised that it will be unlawful for any unauthorized person to solicit
business or to offer goods, wares, merchandise or services for sale on the premises of BYB
without the consent of the City.
34. "For Sale" or other unauthorized advertising signs are prohibited in BYB.
35. City is not responsible for any losses or damage to boats at BYB. Each Vessel Owner is
responsible for damage which he and/or his boat may cause to other boats or improvements
in BYB.
36. No swimming is permitted in BYB waters.
37. The City will not provide space for the storage of dinghies or miscellaneous Vessel Owner
equipment on Basin property.
38. Hydro -lift hoists will not be allowed in BYB.
39. The Marina Manager may ascertain that strangers aboard yachts are authorized by Vessel
Owner to be aboard.
40. Riding of skateboards, bicycles or motorcycles on the docks is not permitted.
Slip Fees specified in the Agreement are determined by the size of the slip space or vessel size
and permitted overhang. Rent is due in advance, payable by the first of the month. Electricity is
charged for the previous month's use. Vessel is subject to impound if the account is delinquent.
Vessel Owner will be liable for any cost of impounding and collection of account.
These rules and regulations are subject to change upon five (5) calendar day's notice
Ralph Grippo
Balboa Yacht Basin Manager
Bellport Group, Inc.
949-723-7788
rqrippo(a-)beliwetherfinancialgroup.com
Kelly Rinderknecht
Balboa Yacht Basin Office Manager
Bellport Group, Inc.
949-569-0723
krinderknecht(cDthemarinaatdanapoint.com
Revised September21, 2021
EXHIBIT "D"
Tenant Improvements
Tenant shall install certain Improvements to the Premises, which shall include the
following:
1. Concrete repairs to the yard; 24,205 sq. ft.
2. Travel lift concrete pier repairs and/or mechanical travel lift replacement
3. Update store fixtures and lighting
Basin Marine, Inc. Page D-1
EXHIBIT "E"
CITY OF NEWPORT BEACH
BOND NO.
FAITHFUL PERFORMANCE BOND
KNOW ALL PERSONS BY THESE PRESENTS:
THAT WHEREAS, BASIN MARINE, (hereinafter referred to as "Tenant") is a tenant of the City of
Newport Beach, a California municipal corporation and charter city ("City"), regarding real property
located at the Balboa Yacht Basin, 829 Harbor Island Drive, Suite A, Newport Beach, California
92660, pursuant to a lease agreement dated ("Lease").
WHEREAS, Tenant has awarded to
the "Contractor") an agreement for the
"Project").
, (hereinafter referred to as
Project (hereinafter referred to as the
WHEREAS, the work to be performed by the Contractor is more particularly set forth in the
Contract Documents for the Project dated , (hereinafter referred to as
"Contract Documents"), the terms and conditions of which are expressly incorporated herein by
reference; and
WHEREAS, the Contractor is required by said Contract Documents and the Lease to furnish a
bond for the faithful performance of said Contract Documents for the benefit of City and Tenant.
NOW, THEREFORE, we, the undersigned Contractor and
as Surety, a corporation organized
and duly authorized to transact business under the laws of the State of California, are held and
firmly bound unto the City and the in the sum of DOLLARS,
($ ), said sum being not less than one hundred percent (100%) of the total amount
of the Contract, for which amount well and truly to be made, we bind ourselves, our heirs,
executors and administrators, successors and assigns, jointly and severally, firmly by these
presents.
THE CONDITION OF THIS OBLIGATION IS SUCH, that, if the Contractor, their or its heirs,
executors, administrators, successors or assigns, shall in all things stand to and abide by, and
well and truly keep and perform the covenants, conditions and agreements in the Contract
Documents and any alteration thereof made as therein provided, on its part, to be kept and
performed at the time and in the manner therein specified, and in all respects according to their
intent and meaning; and shall faithfully fulfill all obligations including the one (1) year guarantee
of all materials and workmanship; and shall indemnify and save harmless the City, the Tenant,
and their respective officials, officers, employees, and authorized volunteers, as stipulated in said
Contract Documents, then this obligation shall become null and void; otherwise it shall be and
remain in full force and effect.
As a part of the obligation secured hereby and in addition to the face amount specified therefore,
there shall be included costs and reasonable expenses and fees including reasonable attorney's
fees, incurred by City and the Tenant in enforcing such obligation.
Basin Marine Inc. Page E-1
As a condition precedent to the satisfactory completion of the Contract Documents, unless
otherwise provided for in the Contract Documents, the above obligation shall hold good for a
period of one (1) year after the acceptance of the work by City, during which time if Contractor
shall fail to make full, complete, and satisfactory repair and replacements and totally protect the
City and the Tenant from loss or damage resulting from or caused by defective materials or faulty
workmanship. The obligations of Surety hereunder shall continue so long as any obligation of
Contractor remains. Nothing herein shall limit the City's or Tenant's rights or the Contractor or
Surety's obligations under the Contract, law or equity, including, but not limited to, California Code
of Civil Procedure Section 337.15.
Whenever Contractor shall be, and is declared by the City or the Tenant to be, in default under
the Contract Documents, the Surety shall remedy the default pursuant to the Contract Documents,
or shall promptly, at the City's and Tenant's option:
Take over and complete the Project in accordance with all terms and conditions in
the Contract Documents; or
Obtain a bid or bids for completing the Project in accordance with all terms and
conditions in the Contract Documents and upon determination by Surety of the
lowest responsive and responsible bidder, arrange for a Contract between such
bidder, the Surety and the City, and make available as work progresses sufficient
funds to pay the cost of completion of the Project, less the balance of the contract
price, including other costs and damages for which Surety may be liable. The term
"balance of the contract price" as used in this paragraph shall mean the total
amount payable to Contractor by the City under the Contract and any modification
thereto, less any amount previously paid by the City to the Contractor and any
other set offs pursuant to the Contract Documents.
Permit the City to complete the Project in any manner consistent with California
law and make available as work progresses sufficient funds to pay the cost of
completion of the Project, less the balance of the contract price, including other
costs and damages for which Surety may be liable. The term "balance of the
contract price" as used in this paragraph shall mean the total amount payable to
Contractor by the City under the Contract and any modification thereto, less any
amount previously paid by the City to the Contractor and any other set offs
pursuant to the Contract Documents.
Surety expressly agrees that the City and the Tenant may reject any contractor or subcontractor
which may be proposed by Surety in fulfillment of its obligations in the event of default by the
Contractor.
Surety shall not utilize Contractor in completing the Project nor shall Surety accept a bid from
Contractor for completion of the Project if the City, when declaring the Contractor in default,
notifies Surety of the City's objection to Contractor's further participation in the completion of the
Project.
The Surety, for value received, hereby stipulates and agrees that no change, extension of time,
alteration or addition to the terms of the Contract Documents or to the Project to be performed
thereunder shall in any way affect its obligations on this bond, and it does hereby waive notice of
any such change, extension of time, alteration or addition to the terms of the Contract Documents
or to the Project.
[Signatures on the following page]
Basin Marine Inc. Page E-2
Name of Contractor (Principal)
Name of Surety
Address of Surety
Telephone
(Attach Attorney -in -Fact Certificate)
The rate of premium on this bond is
charges is $
(The above must be filled in by corporate attorney.)
Any claims under this bond may be addressed to:
(Name and Address of Surety or
Agent for Service in California)
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:
0
Aaron C. Harp
City Attorney
Authorized Signature/Title
Attorney -in -Fact
Print Name and Title
(Corporate Sea[)
per thousand. The total amount of premium
NOTARY ACKNOWLEDGMENTS OF
CONTRACTOR AND SURETY MUST BE ATTACHED
Basin Marine Inc. Page E-3
ACKNOWLEDGMENT
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.
State of California
County of I ss.
On 20 before me,
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature (seal)
ACKNOWLEDGMENT
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.
State of California
County of } SS.
On 20 before me,
Notary Public, personally appeared
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 signatures(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature (seal)
Basin Marine Inc. Page E-4
Exhibit "F"
CITY OF NEWPORT BEACH
BOND NO.
LABOR AND MATERIALS PAYMENT BOND
WHEREAS, BASIN MARINE INC. ("Tenant"), is a tenant of the City of Newport
Beach, State of California ("Lessor"), regarding property located at the Balboa Yacht
Basin, 829 Harbor Island Drive, Suite A, Newport Beach, California 92660 pursuant to
that lease dated ("Lease") and has awarded to
hereinafter designated as the "Principal," a contract ("Contract") for
work consisting of:
("Work")
WHEREAS, the Lease requires Tenant obtain from Principal a labor and materials
bond ("Bond") for the benefit of Tenant and Lessor providing that if Principal or any of
Principal's subcontractors, shall fail to pay for any materials, provisions, or other supplies
used in, upon, for, or about the performance of the Work agreed to be done, or for any
work or labor done thereon of any kind, the Surety on this Bond will pay the same to the
extent hereinafter set forth.
WHEREAS, in accordance with the Lease, Lessor is included as an additional
obligee under the Bond.
NOW, THEREFORE, we the undersigned Principal, and
duly authorized to
transact business under the laws of the State of California, as surety, (hereinafter
"Surety") are held and firmly bound unto Tenant and Lessor, in the sum of
Dollars and _/100 ($ ) lawful
money of the United States of America, said sum being equal to 100% of the estimated
amount of the Contract, payable by Tenant under the terms of the Contract; for which
payment well and truly to be made, we bind ourselves, our heirs, executors and
administrators, successors, or assigns, jointly and severally, firmly by these present.
THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal or the
Principal's subcontractors, fail to pay for any materials, provisions, or other supplies,
implements or machinery used in, upon, for, or about the performance of the Work
contracted to be done, or for any other work or labor thereon of any kind, or for amounts
due under the Unemployment Insurance Code with respect to such work or labor, or for
any amounts required to be deducted, withheld and paid over to the Employment
Development Department from the wages of employees of the Principal and
subcontractors pursuant to Section 13020 of the Unemployment Insurance Code with
respect to such work and labor, then the Surety will pay for the same, in an amount not
exceeding the sum specified in this Bond, and also, in case suit is brought to enforce the
Basin Marine, Inc. Page F-1
obligations of this Bond, a reasonable attorneys' fee, to be fixed by the Court as required
by the provisions of Section 9554 of the Civil Code of the State of California.
The Bond shall inure to the benefit of any and all persons, companies, and
corporations entitled to file claims under Section 9100 of the California Civil Code so as
to give a right of action to them or their assigns in any suit brought upon this Bond, as
required by and in accordance with the provisions of Sections 9500 et seq. of the Civil
Code of the State of California.
Surety, for value received, hereby stipulates and agrees that no change, extension
of time, alterations or additions to the terms of the Contract or to the Work to be performed
thereunder shall in any wise affect its obligations on this Bond, and it does hereby waive
notice of any such change, extension of time, alterations or additions to the terms of the
Contract or to the Work or to the specifications.
In the event that the Principal executed this Bond as an individual, it is agreed that
the death of any such Principal shall not exonerate the Surety from its obligations under
this Bond.
IN WITNESS WHEREOF, this instrument has been duly executed by the above
named Principal and Surety, on the day of , 20
Name of Contractor (Principal)
Name of Surety
Address of Surety
Telephone
(Attach Attorney -in -Fact Certificate)
Authorized Signature/Title
Attorney -in -Fact
Print Name and Title
(Corporate Seal)
NOTARY ACKNOWLEDGMENTS OF CONTRACTOR
AND SURETY MUST BE ATTACHED
Basin Marine, Inc. Page F-2
Exhibit "G"
Insurance
Without limiting Tenant's indemnification of City, Tenant will obtain, provide and
maintain at its own expense during the Term of this Lease, a policy or policies of insurance
of the type, amounts and form acceptable to City. The policy or policies shall provide, at
a minimum, those items described below.
(a) Coverage Requirements
(i) Workers' compensation insurance providing statutory benefits and
Employer's Liability Insurance in an amount not less than One Million
Dollars ($1,000,000) each accident, each employee and policy limit.
Coverage shall include USL&H and Maritime Coverages as appropriate. In
addition, Tenant shall require each subtenant or subcontractor to similarly
maintain workers compensation insurance and employer's liability
insurance, including USL&H and Maritime Coverages as appropriate, in
accordance with the laws of the State of California for all of the subtenant's
or subcontractor's employees. The insurer shall agree to waive all rights of
subrogation against City, its officers, agents, employees and volunteers for
losses arising from work performed by Tenant for City, by endorsement to
the policy.
(ii) Commercial general liability insurance in an amount not less than Two
Million Dollars ($2,000,000) per occurrence and Four Million Dollars
($4,000,000) General Aggregate for bodily injury, personal injury, and
property damage. Coverage shall be at least as broad as that provided by
Insurance Services Office form CG 00 01 and may be arranged through any
combination of primary and excess insurance as required to achieve the
limits specified provided that any excess liability policy does not restrict
coverage provided in the primary policy. Other policy forms may be
acceptable if more appropriate to the exposures, such as Marina Operator's
Liability insurance. None of the policies required herein shall be in
compliance with these requirements if they include any limiting
endorsement that has not been first submitted to City and approved in
writing.
(iii) Fire and Extended Coverage. Tenant shall maintain standard broad form
all-risk fire and extended coverage insurance, together with insurance
against vandalism, theft and malicious mischief, on the improvements and
fixtures, alterations, trade fixtures, signs, equipment, personal property and
inventory on or upon the Premises from loss or damage to the extent of their
full replacement value.
Basin Marine, Inc. Page G-1
Loss of Rent. Tenant shall maintain loss of rent insurance insuring that the
Rent will be paid to City for a period up to twelve (12) months if the Premises
are destroyed or rendered unusable or inaccessible for commercial
purposes by a risk insured under a special form property coverage policy
including vandalism and malicious mischief endorsements.
(iv) Automobile Liability Insurance. Tenant and Tenant's consultants,
contractors and/or subcontractors shall maintain automobile insurance at
least as broad as Insurance Services Office form CA 00 01 covering bodily
injury and property damage for all activities of Tenant or all activities of
Tenant's consultants, contractors and/or subcontractors arising out of or in
connection with work to be performed on the Premises, including coverage
for any owned, hired, non -owned or rented vehicles, in an amount not less
than two million dollars and 00/100 ($2,000,000) combined single limit each
accident.
(v) Builder's Risk Insurance. During construction, Tenant shall require that
Tenant's construction contractors and subcontractors maintain Builders
Risk insurance or an installation floater as directed by City, covering
damages to the work for "all risk" or special causes of loss form with limits
equal to one hundred percent (100%) of the completed value of the work,
with coverage to continue until final acceptance of the work by Tenant and
City. City shall be included as an insured on such policy, and Tenant shall
provide City with a copy of the policy.
(vi) Contractor's pollution liability insurance for contractors or subcontractors
performing construction work written on a form acceptable to City providing
coverage for liability arising out of sudden, accidental and gradual pollution.
The policy limit shall be no less than One Million Dollars ($1,000,000) per
claim and in the aggregate for contractors and between Two Million Dollars
($2,000,000) and Five Million Dollars ($5,000,000) for Tenant, as
determined by City depending on services offered by Tenant on the
Premises (e.g., fuel dock, boat repair, etc.). When this insurance is required,
all activities comprising the work shall be specifically scheduled on the
policy as "covered operations." The policy shall provide coverage for the
hauling of waste from the Premises to the final disposal location, including
non -owned disposal sites. Products/completed operations coverage shall
extend a minimum of three (3) years after completion of the work.
(vii) Pollution legal liability applicable to bodily injury; property damage, including
loss of use of damaged property or of property that has not been physically
injured or destroyed; cleanup costs, and defense, including costs and
expenses incurred in the investigation, defense, or settlement of claims; all
in connection with any loss arising from the insured facility. Coverage shall
be maintained in an amount of at least One Million Dollars ($1,000,000) per
loss, with an annual aggregate of at least One Million Dollars ($1,000,000).
Basin Marine, Inc. Page G-2
(b) Additional Requirements
(i) Primary and Non -Contributory. Policies shall be considered primary
insurance as respects to the City of Newport Beach, its City Council, boards
and commissions, officers, agents, volunteers, and employees as respects
to all claims, losses, or liability arising directly or indirectly from Tenant's
operations. Any insurance maintained by City, including any self -insured
retention City may have, shall be considered excess insurance only and not
contributory with the insurance provided hereunder.
(ii) Liability Insurance. Liability insurance shall act for each insured and
additional insured as though a separate policy had been written for each,
except with respect to the limits of liability of the insuring company.
(iii) Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Lease shall be endorsed to waive subrogation against the
City of Newport Beach, its City Council, boards and commissions, officers,
agents, volunteers, and employees, or shall specifically allow Tenant or
others providing insurance evidence in compliance with these requirements
to waive their right of recovery prior to a loss. Tenant hereby waives its own
right of recovery against City, and shall require similar written express
waivers from each of its consultants, contractors or subcontractors.
(iv) Reporting Provisions. Any failure to comply with reporting provisions of the
policies shall not affect coverage provided to the City of Newport Beach, its
City Council, boards and commissions, officers, agents, volunteers, and
employees.
(v) Notice of Cancellation. The insurance required by this Lease shall not be
suspended, voided, canceled, or reduced in coverage or in limits except
after thirty (30) days (ten (10) days written notice of non-payment of
premium) written notice has been received by City. It is Tenant's obligation
to ensure that provisions for such notice have been established.
(vi) Loss Payee. City shall be included a loss payee under the commercial
property insurance.
(vii) All insurance shall be written on an occurrence -made form, except the
Pollution Liability policy which is on a claims -made form of insurance
requiring the Tenant to provide proof of coverage (extending reporting) for
a minimum of three (3) years following termination of lease agreement; and
(viii) In the event City determines that (i) the Tenant's activities in the Premises
creates an increased or decreased risk of loss to the City, (ii) greater
insurance coverage is required due to the passage of time, or (iii) changes
Basin Marine, Inc. Page G-3
in the industry require different coverages be obtained, Tenant agrees that
the minimum limits of any insurance policy required to be obtained by
Tenant may be changed accordingly upon receipt of written notice from City,
provided that Tenant shall have the right to appeal a determination of
increased coverage to the City Council within fourteen (14) days of receipt
of notice from the Risk Manager in the manner provided in Municipal Code
Section 17.65.010 et seq. (or any amended or successor Code section or
ordinance) If Tenant fails to timely appeal a decision, it shall be deemed
final. With respect to changes in insurance requirements that are available
from Tenant's then -existing insurance carrier, Tenant shall deposit
certificates evidencing acceptable insurance policies with City incorporating
such changes within thirty (30) days of receipt of such notice. With respect
to changes in insurance requirements that are not available from Tenant's
then- existing insurance carrier, Tenant shall deposit certificates evidencing
acceptable insurance policies with City, incorporating such changes, within
ninety (90) days of receipt of such notice.
(ix) All insurance policies shall be issued by an insurance company currently
authorized by the California Insurance Commissioner to transact business
of insurance in the State of California, with an assigned policyholders'.
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless
otherwise approved by City.
(x) All licensees, sub -Tenants (not including slip renters) and concessionaires
shall be subject to the insurance requirements contained herein unless
written approval is granted by the City.
(xi) Tenant shall provide certificates of insurance, with original endorsements
as required above, to City as evidence of the insurance coverage required
herein. Insurance certificates must be approved by City prior to
commencement of performance or issuance of any permit. Current
certification of insurance shall be kept on file with City at all times during the
Term of this Lease.
(xii) All required insurance shall be in force on the Effective Date, and shall be
maintained continuously in force throughout the term of this Lease. In
addition, the cost of all required insurance shall be borne by Tenant.
(xiii) If Tenant fails or refuses to maintain insurance as required in this Lease, or
fails to provide proof of insurance, City has the right to declare this Lease in
default without further notice to Tenant, and City shall be entitled to exercise
all available remedies.
Basin Marine, Inc. Page G-4
Exhibit "H"
Memorandum of Lease Agreement
Basin Marine, Inc. Page H-1
RECORDING REQUESTED AND
WHEN RECORDED RETURN TO:
Office of the City Clerk
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
[Exempt from Recordation Fee - Govt. Code §§ 6103 & 27383]
MEMORANDUM OF LEASE AGREEMENT
This Memorandum of Lease Agreement ("Memorandum") is dated ,
202, and is made between City of Newport Beach, a California municipal corporation
and charter city ("City") and Basin Marine, Inc., a California corporation ("Tenant"),
concerning the Property described and the Premises depicted in Exhibit "A", attached
hereto and by this reference made a part hereof, with the abbreviated referenced street
address of 829 Harbor Island Drive, Suite A, Newport Beach, California 92660.
For good and adequate consideration, City leases the Premises to Tenant, and Tenant
leases the Premises from City, for the term and on the provisions contained in the lease
agreement dated , 202_, ("Agreement") including without limitation
provisions prohibiting assignment, subleasing, and encumbering said leasehold without
the express written consent of City in each instance, all as more specifically set forth in
said Agreement, which said Agreement is incorporated in this Memorandum by this
reference.
The Agreement's term is twenty (20) years, beginning . , 202_, and
ending subject to extension(s) by the parties as provided in the
Agreement.
This Memorandum is not a complete summary of the Agreement. Provisions in this
Memorandum shall not be used in interpreting the Agreement's provisions. In the event
of conflict between this Memorandum and other parts of the Agreement, the other parts
of the Agreement shall control. Execution hereof constitutes execution of the Agreement
itself.
[Signatures on the next page]
Basin Marine, Inc. Page H-2
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of
Lease as of the dates written below.
CITY:
City of Newport Beach,
a California Municipal Corporation
Date:
Grace K. Leung
City Manager
ATTEST:
Date:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
Date:
Aaron C. Harp
City Attorney
TENANT:
Basin Marine, Inc., a California
corporation
Date:
By:
David L. New
President
Date:
By:
Derek J. New
Secretary
[END OF SIGNATURES]
Attachment: Exhibit A — Legal Description of Property and Depiction of Premises
Basin Marine, Inc. Page H-3
ACKNOWLEDGMENT
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.
State of California
County of } ss.
On , 20 before me, , Notary Public,
personally appeared who proved to me on the basis
of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (seal)
ACKNOWLEDGMENT
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.
State of California
County of I ss.
On , 20 before me, , Notary Public,
personally appeared , who proved to me on the basis
of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (seal)
Basin Marine, Inc. Page H-4
EXHIBIT "A"
Legal Description of Property
A parcel of land situated in the Northwest quarter (NW 1/4) of Section Thirty Five (35),
Township Six (6) South, Range Ten (10) West, S.B.B.& M., Orange County, California,
more particularly described as follows, to -wit:
Beginning at a point in the U.S. Bulkhead line between Station No. 200 and Station No.
101 as shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California,"
approved May 2, 1936, by the Secretary of War, and on file in the office of the U.S. District
Engineer at Los Angeles, California, said point of beginning being East 754.25 feet of
said bulkhead Station No. 200, running thence North 424.71 feet to a point in the Northerly
line of that certain parcel of land conveyed to City of Newport Beach by the Irvine
Company, as described in a deed recorded September 25, 1929, in Book 306, Page 375,
of official records of Orange County, California; thence South 850 43' East 772.15 feet to
the Northeasterly corner of the last mentioned parcel of land; thence South along the
Easterly line of the last mentioned parcel of land 367.01 feet to a point in said U.S.
Bulkhead line between Station No. 200 and Station No. 101, thence West along said
bulkhead line 770 feet to the point of beginning, containing approximately seven (7) acres.
Basin Marine, Inc. Page H-5
Property and Balboa Yacht Basin Marina Depiction
Basin Marine, Inc. Page H-6
i— -0
max_
if ob,
616. 4
by i
Depiction of Premises
., ■� m�4 all ,=.�"lip
'W1
14
,J
j?j990.71jt2
I
,
_
1
'.•
; 9,071.4 tt2
DryA,ea Leased
Wet Area Leased
Disclaimer:
oe O 0 100 200 Eve reasonable effort has been made to assure the accuracy of the
= N BG S Feet data Every
a . haeever. The Cityofand all r Beach and Its
employees and agents obtained
arcs use all responsibihry from or
` M relating to any results obtanetl m As use
mn_,n_asi
Basin Marine, Inc. Page H-7
`` 2 265 P+ 75 ® C
QSearch
Insured Name
( Basin Marine, Inc. (FV00001080)
t
Regents of the University of California
Active Records Only
Advance Search
Insured Tasks Admin Tools
View
.t& Insured
Notes
History
Deficiencies
Coverages
Requirements
Add
Edit
Help
Video Tutorials
s:i Insured
Name:
Account Number:
Address:
Status:
Insured
Basin Marine, Inc. n
FV00001080
829 Harbor Island Drive, Suite A,
Newport Beach, CA, USA, 92660
Currently in Compliance.
Business Unit(s) Print Insured Info
Account Information
Account Number:
Risk Type:
Do Not Call:
Address Information
Mailing Address
Insured:
Address 1:
Address 2:
City:
State:
FV00001080
Professional
Services
Agreement
Address Updated:
Physical Address
Basin
Marine, Inc.
829 Harbor 829 Harbor Island Drive,
Island Drive,
Suite A
Newport Newport Beach
Beach
CA CA