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HomeMy WebLinkAboutC-6506 - Harbor Island Drive, 36 - Lease Agreement 1993LEASE TABLE 4F CONTENTS Clause Number and Name Pam 1. DEFINITIONS ...................................... 1 2. PREMISES ........................................ 1 3. LIMITATION OF THE LEASEHOLD ....................... 1 4. USE ............................................. 2 5. TERM ........................................... 3 6. RENT ............................................ 3 7. REVISION OF RENT ................................. 3 8. REAPPRAISAL OF RENT .............................. 4 9. RENT PAYMENT PROCEDURE .......................... 6 10. CHARGE FOR LATE PAYMENT ......................... 7 11. CONSTRUCTION AND/OR ALTERATION BY TENANT .......... 7 12. MAINTENANCE OBLIGATIONS OF TENANT ................. 8 13. INSURANCE ....................................... 8 14. ASSIGNING, SUBLETTING AND ENCUMBERING ............. 10 15. STATE LANDS COMMISSION LEASING POLICY .............. 11 16. NOTICES ......................................... 11 17. MEMORANDUM OF LEASE ............................ 12 18. ATTACHMENTS TO LEASE ............................ 12 03-01-93 21882-04002 F:VM\152\93020021.3RD , LEASE THIS LEASE is made by and between THE CITY OF NEWPORT BEACH, a Municipal Corporation, hereinafter referred to as "LESSOR" and Phillip N. Lyons and Mary A. Lyons, Trustees of the LYONS COMMUNITY PROPERTY TRUST dated June 15, 1979, as amended, hereinafter referred to as "TENANT', without regard to number and gender. 1. DEFINITIONS The following words in this Lease have the significance attached to them in this clause unless otherwise apparent from context: "City Manager" means the City Manager of the City of Newport Beach or his or her designee. "Planning Department" means the Planning or other department of the City of Newport Beach responsible for the processing or approval of development. "Real Estate Director" means the City Manager of the City of Newport Beach or his designated representative. 2. PREMISES LESSOR leases to TENANT that certain property hereinafter referred to as "Premises", shown on "Exhibit A", attached hereto and by reference made a part hereof, and described as those filled tidelands lying between the extension of the sidelines of Lot #17 of Tract 802 from the adjudicated mean high tide line to the United States bulkhead line, excepting therefrom those lands lying below the existing mean high tide line. Use of submerged "water covered" tidelands areas is not provided for herein. 3. LIMITATION OF THE LEASEHOLD This Lease and the rights and privileges granted TENANT in and to the Premises are subject to all covenants, conditions, restrictions, and exceptions of record or apparent, including those which are set out in the Tidelands Grant by the State of California to the City of Newport Beach. Nothing contained in this Lease or in any document related hereto shall be construed to imply the conveyance to TENANT of rights in the Premises which exceed those owned by LESSOR, or any representation or warranty, either expressed or implied, relating to the nature or condition of the Premises or LESSOR's interest therein. 03-41-93 21882-00002 F ADOW52\93020021.3RD • 0 TENANT acknowledges that TENANT has conducted a complete and adequate -:$" N investigation of the Premises and that TENANT has accepted the Premises in its "as is" condition. 4. USE A. TENANT shall have the exclusive, private enjoyment of the Premises for residential yard, landscaping and non -permanent recreational purposes as an adjunct to the residence of those single family residences that adjoin the Premises and can exclude public access during the term of the Lease, consistent with the Statutes of the State of California and City Charter of the City of Newport Beach. As used in this Lease, landscaping and non -permanent recreational improvements include the following: 1) Patios and decks; 2) Walks and steps, including dock access walks; 3) Planters and garden walls not exceeding 36 inches in height above natural grade; 4) Benches; 5) Statues; 6) Landscaping; 7) Sprinkler systems; 8) Yard lighting; 9) Bulkheads and seawalls; and 10) Any and all improvements existing as of March 22, 1993. TENANT agrees not to use the Premises for any other purpose nor to engage in or permit any other activity within or from the Premises. B. TENANT shall obtain prior written consent of LESSOR before the placement of any improvements not listed above. Consent of LESSOR shall be obtained through its Planning Department. 03-01-93 218a2-DD002 F: WM%152\93020021.30 2 c; 5. TERM The term of this Lease shall be forty-nine (49) years, commencing on March 22, 1993. TENANT understands and agrees that this Lease is subject to automatic termination as provided in Clause 13 (INSURANCE). 6. RENT Commencing March 22, 1993 and continuing until adjusted pursuant to Clause 7 or 8 of this Lease, TENANT agrees to pay as rent for the Premises the sum of $10,161.82 per year, payable on or before March 22, 1993 and on or before each anniversary of the effective date of this Lease thereafter, so long as tenancy continues. In the event the obligation to pay rent terminates on some date other than the anniversary of the effective date of this Lease, the rent shall be prorated to reflect the actual period of tenancy. 7. REVISION OF RENT Every three years the rent specified in Clause 6 (RENT) shall be subject to automatic adjustments in proportion to change in the Consumer Price Index for Los Angeles -- Anaheim --Riverside, CA (Ail Urban Consumers --All Items 1982-84 =100) promulgated by the Bureau of Labor Statistics of the U.S. Department of Labor (INDEX). The first automatic adjustment shall be effective on March 22, 1994 and subsequent adjustments shall be effective on the March 22 anniversary date every third year thereafter (1997, 2000, etc.). Adjusted rent shall be calculated by means of the following formula: A=,$" x B C A= Adjusted Rent B = INDEX for the fourth month prior to the month in which each rental rate adjustment is to become effective. For calculating 1994 and 1997 adjustments, C = Monthly Index for March 1988 = 120.6 For calculating subsequent adjustments, C shall equal the Monthly Index for the most recent effective date of reappraised rent as set forth in Clause 8 (REAPPRAISAL OF RENT) (March 1998, March 2008, March 2018,, March 2028 and March 2038). 0-01-93 21BU-00002 3 F:\DM\152\93020021.300 For calculating 1994 and 1997 adjustments, * shall equal base rent established for March 1988, which is Eight Thousand Eight Hundred Twenty -Three and 32/100 Dollars ($8,823.32). For calculating subsequent adjustments, * shall equal the rent established for the most recent effective date of reappraised rent as set forth in Clause 8 (REAPPRAISAL OF RENT) (March 22, 1998, March 22, 2008, March 22, 2018, March 22, 2028 and March 22, 2038. Notwithstanding the foregoing, in no event shall the annual rent be reduced by reason of such adjustment. In the event that the INDEX is not issued or published for the period for which such annual rent is to be adjusted and computed hereunder, or that the Bureau of Labor Statistics of the United States Department of Labor should cease to publish said index figures, then any similar index published by any other branch or department of the United States Government shall be used and if none is so published, then another index generally recognized and authoritative shall be substituted by LESSOR. 8. REAPPRAISAL OF RENT LESSOR and TENANT agree that rent payable pursuant to Clause 6 (RENT) and as adjusted by Clause 7 (REVISION OF RENT) of this Lease, shall be subject to periodic adjustment by reappraisal in five (5) years and every ten (10) years thereafter to be effective on the following dates: March 22, 1998, March 22, 2008, March 22, 2018, March 22, 2028 March 22, 2038 It is the intent of LESSOR and TENANT that rent payable pursuant to Clause 6 (RENT) of this Lease, shall be calculated by the following formula: Rent = reappraised value of the Premises x.375 (thirty-seven and one-half percent) x .09 (nine percent) Note: (.375 is based upon 62.5% discount for land utilization i.e., 1.0 - .625 = .375; .09 is based upon rate of return.) LESSOR and TENANT shall begin the appraisal process to determine rent adjustment six months prior to the effective date of said rent adjustment and shall use the following procedure: 03-01-93 21882-00002 4 F:\000\152\930Z0021.3R0 .axs. A. LESSOR and TENANT shall, no less than 180 days prior to the next scheduled rent adjustment, each employ a qualified real estate appraiser. LESSOR shall use its reasonable efforts to provide TENANT written notice of its obligation to employ an appraiser thirty (30) days prior to the date by which the appraiser must be employed. LESSOR's failure to provide such notice shall not relieve TENANT of obligation to employ an appraiser as set forth in this Lease. The term "qualified real estate appraiser", as used herein shall mean and refer to a real estate appraiser designated as a "senior" member or equivalent by a nationally recognized appraisal organization, hereinafter referred to as "appraiser", and who has at least five years experience appraising this type of property. 1) In the event TENANT fails to employ an appraiser prior to this 180 - day period and provide written notice to LESSOR of said employment, then the appraiser employed by the LESSOR shall be the sole appraiser responsible for determining the value of the Premises and his opinion shall be binding upon LESSOR and TENANT. 2) LESSOR and TENANT shall be individually responsible for the fee of the appraiser which it employs. B. After selection of the appraiser(s), the Real Estate Director shall immediately .fix a time and place for a pre -appraisal meeting with the Real Estate Director, TENANT, and the appraiser(s). 1) At or before the pre -appraisal meeting, the Real Estate Director shall provide the appraiser(s) with a "Scope of Work". 2) The appraiser(s) shall, within 120 days after the pre -appraisal meeting, prepare and deliver to LESSOR and TENANT two copies of a fully documented written report, prepared in accordance with the Scope of Work, containing the appraiser's independent opinion of the value of the Premises. C. The rent adjustment shall be determined as follows: 1) If only one appraisal is submitted within the 120 -day period, then the rent adjustment shall be based on the estimated value of the Premises as set forth in that appraisal. The rent shall then be determined using the formula set forth above in this Clause 8 (REAPPRAISAL RENT). 2) If two appraisals are submitted within the 120 -day period, then the rent adjustment shall be on the mathematical average of the estimated value of the Premises of the two appraisals, provided the lower of the two appraisal values is equal to or greater than ninety percent (90%) of the 03-01-93 21882-000Q FADMX152\93020021-3RD r -,Nigher of the two appraisal values. The rent shall then be determined using the formula set forth above in this Clause 8 (REAPPRAISAL OF REND. D. In the event two appraisals are submitted but the value of the lower is less than ninety percent (90%) of the higher of the two values, the Real Estate Director shall independently select a third appraiser. 1) The third appraiser shall then have sixty (60) days after its appointment to prepare and deliver to LESSOR and TENANT two (2) copies of a fully documented written report prepared in accordance with the Scope of Work containing that appraiser's independent opinion of the value of the Premises. LESSOR and TENANT shall each pay one half of the fee of the third appraiser. 2) In the event the third appraisal is required, the reappraised value for determining the rent adjustment shall be based on the mathematical average of the two appraisals with the closest estimated values and the Rent shall then be determined by using the formula set forth above in this Clause 8 (REAPPRAISAL OF RENT). E. LESSOR and TENANT agree to be bound to the herein described rent adjustment without further dispute. In no event shall adjusted rent be less than rent payable immediately prior to the subject rent reappraisal date. Should the adjusted annual rent be determined subsequent to the effective date thereof, said adjusted annual rent shall be retroactive to that date. TENANT shall pay all retroactive rent, without penalty, within 30 days after receipt of notice from LESSOR of the amount of retroactive rent due. F. Appraisals or discount factors used for the purposes of rent calculation or adjustment, as provided in this Lease, shall be used only to set consideration for this Lease subject to terms and conditions hereof. G. Alternately, LESSOR and TENANT may mutually elect to utilize the reappraisal of rent as determined by a like procedure conducted by the County of Orange and its tidelands tenants on Harbor Island. 9. RENT PAYMENT PROCEDURE LESSOR shall use its reasonable efforts to provide TENANT with a written statement of the rent due on or before thirty (30) days prior to the date each rent payment is due. 03-01-53 21882-00002 F:\DM\152\9W2W2i.3W 6 LESSOR's failure to provide such written notice shall in no way relieve TENANT of its E` ; y obligation to pay all rent required by this Lease as and when due. Rent payments shall be delivered or sent by U.S. Mail to Finance Director, City of Newport Beach, 3300 Newport Blvd., Newport Beach, CA 92663. The designated place of payment may be changed at any time by LESSOR upon ten (10) days written notice to TENANT. Rent payments shall be made payable to the City of Newport Beach. TENANT assumes all risk of loss if payments are made by mail. All rental shall be paid in lawful money to the United States of America, without offset or deduction or prior notice or demand. No payment by TENANT or receipt by LESSOR of a lesser amount than the rent due shall be deemed to be other than on account of the rent due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and LESSOR shall accept such payment without prejudice to LESSOR's right to recover the balance of said rent or pursue any other remedy in this Lease. 10. CHARGE FOR LATE PAYMENT TENANT hereby acknowledges that the late payment of rent or any other sums due hereunder will cause LESSOR to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include but are not limited to costs such as administrative processing of delinquent notices, increased accounting costs, etc. Accordingly, if any payment of rent as specified in Clause 6 (RENT) or of any other sum due LESSOR is not received by LESSOR by the due date, a late charge of one and one- half percent (1.5%) of the payment due and unpaid plus $100 shall be added to the payment, and the total sum shall become immediately due and payable to LESSOR. An additional charge of one and one-half percent (1.5%) of said payment, excluding late charges, shall be added for each additional month that said payment remains unpaid. TENANT and LESSOR hereby agree that such late charges represent a fair and reasonable estimate of the costs that LESSOR will incur by reason of TENANT's late payment. Acceptance of such late charges (and/or any portion of the overdue payment) by LESSOR shall in no event constitute a waiver of TENANT's default with respect to such overdue payment, or prevent LESSOR from exercising any of the other rights and remedies granted hereunder. 11. CONSTRUCTION AND/OR ALTERA'T'ION BY TENANT No structures, improvements, or facilities other than those listed in Clause 4 (USE) of this Lease shall be constructed, erected, altered, or made within the Premises without prior written consent of LESSOR. Any conditions relating to the manner, method, design and 03-01-93 21882-00002 7 F:\DM\152\93020021.300 construction of said structures, improvements, or facilities fixed by the LESSOR shall be conditions hereof as though originally stated herein. All improvements constructed by TENANT within the Premises shall be constructed in strict compliance with detailed plans and specifications approved by LESSOR. 12. MAINTENANCE OBLIGATIONS OF TENANT TENANT shall keep and maintain the Premises and all improvements of any kind which may be erected, installed or made thereon in good condition and in substantial repair. It shall be TENANT's responsibility to take all steps necessary or appropriate to maintain such a standard of condition and repair. TENANT expressly agrees to maintain the Premises in a safe and clean condition, to the reasonable satisfaction of LESSOR and in compliance with all applicable laws. If TENANT fails to maintain or make repairs or replacements as required, LESSOR shall notify TENANT in writing of said failure. Should TENANT fail to correct the situation within three days after receipt of written notice, LESSOR may make the necessary correction or cause it to be made and the cost thereof, including but not limited to the cost of labor, materials, and equipment and administration, shall be paid by TENANT within ten (10) days of receipt of a statement of said cost from LESSOR. LESSOR may at its option, choose other remedies available herein, or by law. 13. INSURANCE TENANT fully understands that it is extremely important that TENANT shall maintain insurance acceptable to LESSOR in full force and effect throughout the term of this Lease. The policy or policies of insurance maintained by TENANT shall provide the following limits and coverages: Coverage Minimum Limit General Comprehensive Liability $500,000 Insurance shall be in force the first day of the term of this Lease. Each liability insurance policy required by this Lease shall contain the following three clauses: A. "This insurance shall not be cancelled, limited in scope of coverage or non - renewed until after 30 days written notice has been given to the City of 03-01-93 21882-00002 F ADW\152\0020021.30 8 Newport Beach, City Manager, 3300 Newport Blvd., Newport Beach, California, 92663." B. "City of Newport Beach and the State of California are added as additional named insureds as respects activities of the named insured at or from Premises leased from the City of Newport Beach". C. "It is agreed that any insurance maintained by the City of Newport Beach and the State of California will apply in excess of, and contribute with, insurance provided by this policy". TENANT agrees to maintain insurance necessary to satisfy City Manager, that all provisions of this Lease have been complied with, and to keep such insurance in effect and to deposit certificates of insurance upon demand with the City Manager during the entire term of this Lease. THIS LEASE SHALL AUTOMATICALLY TERMINATE AT THE SAME TIME TENANT'S INSURANCE COVERAGE is TERMINATED. IF, WITHIN TEN (10) DAYS AFTER TERMINATION UNDER THIS CLAUSE, TENANT OBTAINS AND PROVIDES EVIDENCE OF THE REQUIRED INSURANCE COVERAGE ACCEPTABLE TO CITY MANAGER, THIS LEASE MAY BE REINSTATED AT THE SOLE DISCRETION OF CITY MANAGER. IF REINSTATED, TENANT SHALL PAY FIVE HUNDRED' DOLLARS ($500) TO COVER THE PROCESSING COSTS INCURRED BY CITY MANAGER. City Manager shall retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of City Manager, insurance provisions in this Lease do not provide adequate protection for LESSOR, City Manager may require TENANT to obtain insurance sufficient in coverage, form, and amount to provide adequate protection. City Manager's requirements shall be reasonable but shall be designed to assure protection from and against the kind and extent of the risks, with respect to the Premises and allowable uses thereof, which exist at the time a change in insurance is required. City Manager shall notify TENANT in writing of changes in the insurance requirements; and if TENANT does not deliver copies of acceptable insurance policies with City Manager incorporating such changes within thirty days of receipt of such notice, this Lease shall be in default without further notice to TENANT, and LESSOR shall have the sole right to terminate this Lease in addition to other remedies available. The procuring of such required policy or policies of insurance shall not be construed to limit TENANT's liability hereunder nor to fulfill the indemnification provisions and requirements of this Lease. 03-01-93 21882-00002 F VWX152\93020021.30 9 14. ASSIGNING, SUBLETTING AND ENCUMBERING A. Assi ment TENANT shall not transfer interest in this Lease without the prior written approval of the City Manager except as provided in paragraph C below of this Clause. As a condition of the City Manager's approval, TENANT shall notify the City Manager of the identity of the proposed TENANT and provide a copy of documentation of the transfer of interest. Approval shall not be withheld or delayed provided said transfer of interest occurs concurrently with the transfer of ownership of the adjacent and contiguous residential property and the proposed transfer of interest is to the Grantee of such residential property. In the event TENANT has provided City Manager proper notice, as set forth in Clause 16 (NOTICES), of transfer of its interest in this Lease, and City Manager has not responded to TENANT within sixty (60) days of receipt of such notice, City Manager's approval of said transfer shall be deemed granted provided copies of documentation of said transfer have been received by the City Manager as set forth in this Clause. Upon written approval of transfer of its interest, TENANT is released of any obligations of this Lease, provided no default of the terms of this Lease exists including payment of all rent due to LESSOR as set forth in Clause 6 (RENT) and Clause 10 (CHARGE FOR LATE PAYMENT). Failure to obtain City Manager's approval or deemed approval of transfer of interest shall render such transfer void. Occupancy of the Premises by a prospective transferee or assignee without approval of the transfer or assignment by the City Manager shall constitute a breach of this Lease. Any document used for the purpose of transfer or assignment of the Premises or any part thereof, shall not be inconsistent with the provisions of this Lease and in the event of any such inconsistency,, the provisions of this Lease shall control. B. ublettin Prior approval of the City Manager shall be required for TENANT to enter into subleases with those residents whose properties adjoin the Premises. All subleases shall be between TENANT and sublessee; the entry into sub - subleases is prohibited and shall constitute a breach of this Lease. 03-01-93 21882-00002 1a F\DOC\152\93020021.30 C. Encumbrances TENANT shall not pledge, hypothecate, .mortgage or encumber its interest in this Lease except to convey a security interest to a lender whose loan is also secured by the residential property which is adjacent and contiguous with the premises. The prior written consent of the LESSOR shall not be required for transfer of LESSEE's interest in the Lease to or from any such lender subject to the following covenants and conditions: 1) Said loan and all rights acquired thereunder shall be subject to each and all of the covenants, conditions and restrictions set forth in this Lease and to all rights and interest of LESSOR hereinunder. 2) In the event of any conflict between the provisions of this Lease and the provisions of any loan document, the provisions of this Lease shall control. 3) In the event any such lender subsequently acquires TENANT's interest in this Lease as a result of a foreclosure of its security interest, or an assignment in lieu thereof, such lender shall remain liable for the payment of rent and performance of all other terms, covenants and conditions hereunder only until lender assigns its interest in this Lease. 15. STATE LANDS COMMISSION LEASING POLICY LESSOR and TENANT acknowledge that the consideration for this Lease and any other terms and conditions provided in this Lease do not necessarily reflect the leasing policy of the State Lands Commission. The method for determining rent provided in this Lease shall not be used for the purpose of establishing rent in any future agreements involving filled or unfilled tide or submerged land. 16. NOTICES All notices pursuant to this Lease shall be addressed as set forth below or as either party may hereafter designate by written notice and shall be sent through the United States mail in the State of California, duly registered or certified, return receipt requested, with postage prepaid. If any notice is sent by registered or certified mail, as aforesaid, the same shall be deemed to have been served or delivered twenty-four (24) hours after mailing thereof as above provided. Notwithstanding the above, LESSOR may also provide notices to TENANT by personal delivery or by regular mail and any such notice so given shall be deemed to have been given upon receipt. 03-01-93 21882-00002 11 F:%=X152\93020021.3RD LESSOR TENANT City Manager Phillip N. Lyons and Mary A. Lyons City of Newport Beach Trustees of the Lyons Community 3300 Newport Blvd. Property Trust Newport Beach, CA 92663 36 Harbor Island Newport Beach, CA 92660 LESSOR shall provide access to and/or a copy of the Lease to TENANT and successors upon request to the following office: City Manager City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92563 17. MEMORANDUM OF LEASE In order to impart constructive notice of TENANTS obligations under the terms of this Lease, TENANT shall cause any prospective transferee or assignee to sign the "Memorandum of Lease", in a form as shown on "Exhibit B", attached hereto and made a part hereof, and have the signature notarized. The signed and notarized Memorandum of Lease shall be submitted to the City Manager as part of the documentation of the transfer of interest as set forth in Clause 14 (ASSIGNING, SUBLETTING AND ENCUMBERING). 18. ATTACHMENTS TO LEASE This Lease includes the following, which are attached hereto and made a part hereof: GENERAL CONDITIONS -- (21 Clauses) EXHIBIT A (Location Map) EXHIBIT B (Memorandum of Lease) 03-01-93 21882-00002 12 F:WOC\1s2\93020021.30 IN WITNESS WHEREOF, the parties have executed this Lease the day and year first indicated. LESSOR CITY OF NEWPORT BEACH rlremEi��� Mayor V D. , APPRO D AS TO FORM: CITY ORNEY By: ffi&====�— A ST CITY CLERK 03-01-93 21882-00002 F:\D0C\152\9302D02l-3W TENANT THE LYONS TRUST date PROPERTY as amended By: - 2L /i< hilli N.? , ons, Trustee By: Mary yons, Tru t 13 L, + - neral nditi n (5 pages) Clause Number and Name 1. Time 2. Lease organization 3. Permits and Licenses 4. Amendments 5. Unlawful Use 6. Inspection 7. Hold Harmless g. Taxes and Assessments 9, successors in Interest 10. Circumstances Which Excuse Performance 11. partial invalidity 12. Utilities 13. Waiver of Rights 14. Default in Terms of Lease by Tenant 15. Reservations to Lessor 16. Holding Over 17, Condition of Demised Premises Upon Ternunation 18. Disposition of Abandoned Property i9. Quitclaim of Tenant's Interest Upon} Vermination 20. Lessor's Right to Re -Enter 21. Removal of Improvements 1 1. GENERAL CONDITIONS TIME Time is of the essence of this Lease. 2. LEASE ORGANIZATION The various headings and numbers herein, the grouping of provisions of this Lease into separate clauses and paragraphs, and the organization hereof, are for the purpose of convenience only and shall not be considered otherwise. 3. PERMITS AND LICENSES TENANT shall be required to obtain any and all approvals, permits, and/or licenses which may be required in connection with the operation of the Demised Premises as set forth herein. No permit, approval, or consent given by 'LESSOR, in its governmental capacity, shall affect or limit TENANTS obligations hereunder, nor shall any approvals or consents given by LESSOR as a party to this Lease, be deemed approval as to compliance or conformance with applicable governmental codes, laws, rales, or regulations. 4. AMENDMENTS This Lease sets forth all of the agreements and understandings of the parties with regard to its subject matter and any modification must be written and properly executed by both parties. iA 5. UNLAWFUL USE TENANT agrees no improvements shall be erected, placed upon, operated, nor maintained within the Premises, nor any business conducted or carried on therein or therefrom, in violation of the terms of this Lease; or of any regulation, order of law, statute, bylaw, or ordinance of a governmental agency having jurisdiction. 6. INSPECTION LESSOR or its authorized representative shall have the right at all reasonable times to inspect the Premises to determine if the provisions of this Lease are being complied with, 7. HOLD HARMLESS TENANT hereby waives all claims and recourse against I,ESSOit and the State of California including the right of contribution for loss or d mage of persons or property arising from growing out of or in any way connected with or related to this agreement except claims arising from the concurrent active or sole: r:egligence: of the State of California or LESSOR, or their officers, agents, and employees. 0 TENANT hereby, agrees to indemnify, hold harmless and defend the State of California and LESSOR and their officers, agents, and employees, against any and all claims, loss, demands, damages, cost, expenses or liability costs arising out of the operation or maintenance of the property described herein except for liability arising out of the concurrent active or sole negligence of the State of California and.'or LESSOR, their officers, agents, or employees. In the event the State of California and/or LESSOR is named as co-defendant, TENANT shall notify LESSOR of such facts and shall represent the State of California and/or LESSOR in such legal action unless the State of California and/or LESSOR undertakes to represent itself as co-defendant in such legal action, in which event TENANT shall pay to the State of California and/or LESSOR its litigation costs, expenses, and attorney's fees. In the event judgment is entered against the State of California and/or LESSOR and TENANT because of the concurrent active negligence of the State of California and/or IISSOR and TENANT, their officers, agents, or employees, an apportionment of liability to pay such judgment shall be made by a court of competent jurisdiction. Neither party shall request a jury apportionment. LESSOR agrees to indemnify and hold harmless TENANT, its officers, agents and employees against any and all claims, loss, demands, damages, costs, expenses or liability arising out of the concurrent active or sole negligence of the LESSOR or its officers, agents or employees. 8. TAXES AND ASSESSMENTS This Lease -may create a possessory interest which is subject to the payment of taxes levied on such interest. It is understood and agreed that all taxes and assessments (including but not limited to said possessory interest tax) which become due and payable upon the Premises shall be the full responsibility of TENANT, and TENANT shall cause said taxes and assessments to be paid promptly. 9. SUCCESSORS IN INTEREST Unless otherwise provided in this Lease, the terms, covenants, and conditions contained herein shall apply to and bind the heirs, successors, executors, administrators, and assigns of all the parties hereto, all of whom shall be jointly and severally liable hereunder. 10. CIRCUMSTANCES WHICH EXCUSE PERFORMANCE if either party hereto shall be delayed or prevented from the performance of any act required hereunder by reason of acts of God, restrictive governmental laws or regulations, or other cause without fault and beyond the control of the party obligated (financial inability excepted), performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. However, nothing in this clause shall excuse TENIAN'I' from the prompt payment of any rental or other charge required of TENANT except as may be expressly provided elsewhere in this Lease 31. PARTIAL. [NIVAUDIT'Y F] r If any term, covenant, condition, or provision competent jurisdiction to be invalid, void, or, provisions hereof shall remain in full force and impaired, or invalidated thereby. 12. UTILITIES �J of this Lease unenforceable, effect and shall is held by a court of the remainder of the in no way be affected, TENANT shall be responsible for and pay_, prior to the delinquent date, all charges for utilities supplied to the premises. 13. WAIVER OF RIGHTS The failure of LESSOR or TENANT to insist upon strict performance of any of the terms, covenants, or conditions of this Lease shall not be deemed a waiver of any right or remedy that LESSOR or TENANT may have, and shall not be deemed a waiver of the right to require strict performance of all the terms, covenants, and conditions of the Lease. 14, DEFAULT IN TERMS OF THE LEASE BY TENANT Should TENANT default in the performance of any covenant, condition, or agreement contained in this Lease and such default is not corrected within a reasonable time Cas determined 'by LESSOR) after TENANT receives written notice of default from LESSOR, LESSOR may terminate this Lease. All rights of TENANT and those who claim under TENANT, stemming from this Lease, shall end at the time of such termination, 15. RESERVATIONS TO LESSOR l The Premises are accapted as is and where is by TENANT subject to any and all existing easements and encumbrances. LESSOR reserves the right to install, lay, construct, maintain, repair, and operate such sanitary sewers, drains, storm water sewers, pipelines, manholes, and connections; water, oil, and.gas pipelines; telephone and telegraph power lines; and the appliances and appurtenances necessary or convenient in connection therewith, in, over, upon, through, across, and along the Premises or any part thereof as may be necessary to serve the Premises, and to enter the Premises for any and all such purposes. LESSOR also reserves the igac � grantand alonges, easements, any and all portions ts of way, of the and permits in, over, upon, Premises as may be necessary to serve the Premises. LESSOR agrees that rights granted lland third P� be �, b o ed as nearly aason of this s practicause ble to its in provisions that the surface o original condition upon the completion of any construction. LESSOR 'further agrees that should the exercise of these rights temporarily interfere with the use of any or all of the Premises by TENANT, the rental shall be reduced in • h use of the Premises. proportion to the interference w t 3 16. [-BOLDING OVER f in the event TENANT shall continue til possession of the Premises after the term of this Lease, such possession shall not be considered a renewal of this Lease but a tenancy from month to month and shall be governed -by the conditions and covenants contained in this Lease. 17. CONDITION OF DEMISED PREMISES UPON TERMINATION Except as otherwise agreed to herein, upon termination of this Lease, TENANT shall redeliver possession of said Premises to LESSOR in substantially the same condition that existed immediately prior to TENIANT's entry thereon, reasonable wear and tear, flood, earthquakes, war, and any act of war, excepted. 18. DISPOSITION OF ABANDONED PERSONAL PROPEIt'I'Y If TENANT abandons the Premises or is dispossessed thereof by process of law or otherwise, title to any personal property belonging to 'TENANT and left on the Premises 15 days after such abandonment or dispossession shall be deemed to have been transferred to LESSOR. LESSOR shall have the right to remove and to dispose of such property without liability therefor to TENANT or to any person claiming under TENANT, and shall have no need to account therefor. 19. QUITCLAIM OF TENTANT'S INTEREST UPON TERMINATION 'Upon termination of this Lease for any reason, including but not limited to termination because of default by TENANT, TENANT shall execute, acknowledge, and deliver to LESSOR within 30 days after receipt of written demand therefor, a good and sufficient deed whereby all right, title, and interest of TENANT in the Premises is quitclaimed to LESSOR. Should TENANT fail or refuse to deliver the required deed to LESSOR, LESSOR may prepare and record a notice reciting the failure of TENANT to execute, acknowledge and deliver such deed and said notice shall be conclusive evidence of the termination of this Lease and of all right of TENANT or those claiming under TENANT in and to the Premises. 20. LESSOR'S RIGHT TO RE-ENTER TENANT agrees to yield and peaceably deliver possession of the Premises to LESSOR on the date of termination of this Lease, whatsoever the reason for such termination. Upon giving written notice of termination to TENANT, LESSOR shall have the right to re- enter and take possession of the Premises on the date such termination becomes effective without further notice of any kind and without institution of summary or regular legal proceedings. Termination -of the Lease and re-entry of the Premises by LESSOR shall in no way alter or diminish any obligation of Ti:NANT under the lease terms and shall not constitute an acceptance or surrender. t TENANT waives any and all right of redenipti n under any existing or future law or statute in the event of eviction from or d�s �k`S s oos ,° C3n the fPthe Premises ises for in a lawful ny lawful reason or in the event LESSOR re-enters p manner. 21, REMOVAL OF EMPROVEML"•N'E'S All improvements constructed or placed within the Premises by TENANT must, upon completion, be free and clear of all liens, claims, or liability for labor or material. ENANT's cst, to remove al TEN LESSOR retains the right to require TENANT, at expiration T at on or termination of hill LeaseA\T improvements located on the Premises at ex P twprovewents y1 +� `'• not as shown 1. i�1 �► '•yam.,•` County Tidelands City Tidelands �( � ♦` /�! .� � i1 .. • ' `` ``\,may' ss t -f 'Ifj ,/�•, a _� /rte` _ is \ 31 P ib 1 ' " _! •/ '� �� : '\.•. s Ido �a o•�w .� \ C �f : •�OF ; . • } �• 1 - ; ro HA55D-26 Lower Newport Bay Harbor Island x id r r ■ ■ ■ MEMORANDUM OF LEASE 03-01-93 21W2-00002 F: WOW52\93020021.3RD 0 LEASE TABLE OF CONTENTS Clause Number and Name Page 1. DEFINITIONS ...................................... 1 2. PREMISES ........................................ 1 3. LIMITATION OF THE LEASEHOLD ....................... 1 4. USE 2 ............................................. 5. TERM ........................................... 2 6. RENT ........................................... 7. REVISION OF RENT ................................. 3 8. REAPPRAISAL OF RENT .............................. 4 9. RENT PAYMENT PROCEDURE .......................... 6 10. CHARGE FOR LATE PAYMENT ........................ 11. CONSTRUCTION AND/OR ALTERATION BY TENANT .......... 7 12. MAINTENANCE OBLIGATIONS OF TENANT ................. 7 13. INSURANCE ...................................... 14. ASSIGNING, SUBLETTING AND ENCUMBERING ............ 15. STATE LANDS COMMISSION LEASING POLICY ............ 16. NOTICES ....................................... 17. MEMORANDUM OF LEASE .........................., 18. ATTACHMENTS TO LEASE .......................... l ,, 02-10-93 21882-00002 F:V=kl52\93020021.RED r 0 0 LEASE THIS LEASE is made by and between THE CITY OF NEWPORT BEACH, a Municipal Comoration. hereinafter referred to as "LESSOR" and PHILLIP N. LYONS jiM„ to number and gender. 1. DEFINITIONS The following words in this Lease have the significance attached to them in this clause unless otherwise apparent from context: "City Manager" means the City Manager of the City of Newport Beach or his or her designee. rt rr Planning Department means the Planning or other department of the City of Newport Beach responsible for the processing or approval of development. 2. PREMISES LESSOR leases to TENANT that certain property hereinafter referred to as "Premises", shown on "Exhibit A", attached hereto and by reference made a part hereof, and described as those filled tidelands lying between the extension of the sidelines of Lot #17 of Tract 802 from the adjudicated mean high tide line to the United States bulkhead line, excepting therefrom those lands lying below the existing mean high tide line. Use of submerged 'Water covered" tidelands areas is not provided for herein. 3. LIMITATION OF THE LEASEHOLD This Lease and the rights and privileges granted TENANT in and to the Premises are subject to all covenants, conditions, restrictions, and exceptions of record or apparent, including those which are set out in the Tidelands Grant by the State of California to the City of Newport Beach. Nothing contained in this Lease or in any document related hereto shall be construed to imply the conveyance to TENANT of rights in the Premises which exceed those owned by LESSOR, or any representation or warranty, either expressed or implied, relating to the nature or condition of the Premises or LESSOR's interest therein. 02-10-93 21882-00002 F:V=X152\93020021.8E0 TENANT acknowledges that TENANT has conducted a complete and adequate investigation of the Premises and that TENANT has accepted the Premises in its "as is" condition. 4. USE A. TENANT shall have the exclusive, private enjoyment of the Premises for residential yard, landscaping and non -permanent recreational purposes as an adjunct to the residence of those single fancily residences that adjoin the Premises and can exclude public access during the term of the Lease, consistent with the Statutes of the State of California an As used in this Lease, landscaping and non -permanent recreational improvements include the following; 1) Patios and decks; 2) Walks and steps, including dock access walks; 3) Planters and garden walls not exceeding 36 inches in height above natural grade; 4) Benches; 5) Statues; 6) Landscaping; 7) Sprinkler systems; 8) Yard lighting; g) and 10) Any and all improvements existing as of --�9" MArmV TENANT agrees not to use the Premises for any other purpose nor to engage in or permit any other activity within or from the Premises. B. � shall obtain prior written consent of fox, before the placement of any improvements not listed above. J Consent of MSQ shall be obtained through its Planning Department. 02-10-93 21882-00002 2 F:VM%952%93020021.RED 5. TERM The term of this Lease shall b117 *469-kt e years, commencing on March 22, TENANT understands and agrees that this Lease is subject to automatic termination as provided in Clause 13 (INSURANCE). 6. RENT Commencing March 22,and continuing until adjusted pursuant to Clause 8 or 9 of this Lease, TENANT agrees to pay as rent for the Premises the sum of $10,161.82 per year, payable on or before March 22,,1994' M and on or before each anniversary of the effective date of this Lease thereafter, so long as tenancy continues. In the event the obligation to pay rent terminates on some date other than the anniversary of the effective date of this Lease, the rent shall be prorated to reflect the actual period of tenancy. 7. REVISION OF RENT Every three years the rent specified in Clause 6 (RENT) shall be subject to automatic adjustments in proportion to change in the Consumer Price .Index for Los Angeles--Anaheim--Riverside, CA (All Urban Consumers --All Items 1982-84 =100) promulgated by the Bureau of Labor Statistics of the U.S. Department of Labor (INDEX). The first automatic adjustment shall be effective on March 22, 1994 and subsequent adjustments shall be effective on the March 22 anniversary date every third year thereafter (1997, 2000, etc.). Adjusted rent shall be calculated by mans of the following formula: A—$* x B C A= Adjusted Rent B = INDEX for the fourth month prior to the month in which each rental rate adjustment is to become effective. For calculating 1994 and 1997 adjustments, C = Monthly Index for March 1988 = 120.6 For calculating subsequent adjustments, C shall equal the Monthly index for the most recent effective date of reappraised rent as set forth in Clause 9 (REAPPRAISAL OF RENT) (March 1998, March 2008, March 2018 and March 2028). For calculating 1994 and 1997 adjustments, * = Base rent established for March 1988`.... 02-10-93 21882-00002 F:\Dm\152\93020021.RE0 0 9 For calculating subsequent adjustment, * shall equal the rent established for the most recent effective date of reappraised rent as set forth in Clause 8 (REAPPRAISAL OF RENT) (March 22, 1998, March 22, 2008, March 22, 2018,; Maw,_ 2 and March 22, .$. Notwithstanding the foregoing, in no event shall the annual rent be reduced by reason of such adjustment. In the event that the INDEX is not issued or published for the period for which such annual rent is to be adjusted and computed hereunder, or that the Bureau of Labor Statistics of the United States Department of Labor should cease to publish said index figures, then any similar index published by any other branch or department of the United States Government shall be used and if none is so published, then another index generally recognized and authoritative shall be substituted by LESSOR. 8. REAPPRAISAL OF RENT LESSOR and TENANT agree that rent payable pursuant to Clause 6 (RENT) and as adjusted by Clause 7 (REVISION OF RENT) of this Lease, shall be subject to periodic adjustment by reappraisal"?�s"`�"" to be effective on the following dates: March 22, 1998, March 22, 2008, March 22, 2018, March 22, 2028 h arch 22.,E maoxgb.21.100 It is the intent of LESSOR and TENANT that rent payable pursuant to Clause 6 (RENT) of this Lease, shall be calculated by the following formula: Rent = reappraised value of the Premises x.375 (thirty-seven and one-half percent) x .09 (nine percent) Note: (.375 is based upon 62.5% discount for land utilization i.e., 1.0 - .625 = .375; .09 is based upon rate of return.) LESSOR and TENANT shall begin the appraisal process to determine rent adjustment six months prior to the effective date of said rent adjustment and shall use the following procedure: A. LESSOR and TENANT shall, no less than 180 days prior to the next scheduled rent adjustment, each employ a qualified real estate appraiser. 02-10-93 21882-00002 4 k \DWX152\93020021. RED LESSOR shall use its reasonable efforts to provide TENANT written notice of its obligation to employ an appraiser thirty (30) days prior to the date by which the appraiser must be employed. LESSOR's failure to provide such notice shall not relieve TENANT of obligation to employ an appraiser as set forth in this Lease. The term "qualified real estate appraiser", as used herein shall mean and refer to a real estate appraiser designated as a "senior" member or equivalent by a nationally recognized appraisal organization, hereinafter referred to as "appraiser", and who has at least five years experience appraising this type of property. 1) In the event TENANT fails to employ an appraiser prior to this 180 -day period and provide written notice to LESSOR of said employment, then the appraiser employed by the LESSOR shall be the sole appraiser responsible for determining the value of the Premises and his opinion shall be binding upon LESSOR and TENANT. 2) LESSOR and TENANT shall be individually responsible for the fee of the appraiser which it employs. B. After selection of the appraiser(s), the Real Estate Director shall immediately fix a time and place for a pre -appraisal meeting with the Real Estate Director, TENANT, and the appraiser(s). 1) At or before the pre -appraisal meeting, the Real Estate Director shall provide the appraiser(s) with a "Scope of Work". 2) The appraiser(s) shall, within 120 days after the pre -appraisal meeting, prepare and deliver to LESSOR and TENANT two copies of a fully documented written report, prepared in accordance with the Scope of Work, containing the appraiser's independent opinion of the value of the Premises. C. The rent adjustment shall be determined as follows: 1) If only one appraisal is submitted within the 120 -day period, then the rent adjustment shall be based on the estimated value of the Premises as set forth in that appraisal. The rent shall then be determined using the formula set forth above in this Clause 8 (REAPPRAISAL RENT). 2) If two appraisals are submitted within the 120 -day period, then the rent adjustment shall be on the mathematical average of the estimated value of the Premises of the two appraisals, provided the lower of the two appraisal values is equal to or greater than ninety percent (90%) of the higher of the two appraisal values. The rent shall then be determined using the formula set forth above in this Clause 8 (REAPPRAISAL OF RENT). 02-10-93 21882-00002 F:\WOC\152\93020021.RED 5 D. In the event two appraisals are submitted but the value of the lower is less than ninety percent (909o') of the higher of the two values, the Real Estate Director shall independently select a third appraiser. 1) The third appraiser shall then have sixty (60) days after its appointment to prepare and deliver to LESSOR and TENANT two (2) copies of a fully documented written report prepared in accordance with the Scope of Work containing that appraiser's independent opinion of the value of the Premises. LESSOR and TENANT shall each pay one half of the fee of the third appraiser. 2) In the event the third appraisal is required, the reappraised value for determining the rent adjustment shall be based on the mathematical average of the two appraisals with the closest estimated values and the Rent shall then be determined by using the formula set forth above in this Clause 8 (REAPPRAISAL OF RENT). E. LESSOR and TENANT agree to be bound to the herein described rent adjustment without further dispute. In no event shall adjusted rent be less than rent payable immediately prior to the subject rent reappraisal date. Should the adjusted annual rent be determined subsequent to the effective date thereof, said adjusted annual rent shall be retroactive to that date. TENANT shall pay all retroactive rent, without penalty, within 30 days after receipt of notice from LESSOR of the amount of retroactive rent due. F. Appraisals or discount factors used for the purposes of rent calculation or adjustment, as provided in this Lease, shall be used only to set consideration for this Lease subject to terms and conditions hereof. G. Alternately, LESSOR and TENANT may mutually elect to utilize the reappraisal of rent as determined by a like procedure conducted by the County of Orange and its tidelands tenants on Harbor Island. 9. RENT PAYMENT PROCEDURE LESSOR shall use its reasonable efforts to provide TENANT with a written statement of the rent due on or before thirty (30) days prior to the date each rent payment is due. LESSOR's failure to provide such written notice shall in no way relieve TENANT of its obligation to pay all rent required by this Lease as and when due. Rent payments shall be delivered or sent by U.S. Mail to Finance Director, City of Newport Beach, 3300 Newport Blvd., Newport Beach, CA 92663. The designated place of payment may be changed at any time by LESSOR upon ten (10) days written notice to TENANT. 02-10-93 21882-00002 6 F:V=X152%93020021.RED 0 0 Rent payments shall be made payable to the City of Newport Beach. TENANT assumes all risk of loss if payments are made by mail. All rental shall be paid in lawful money to the United States of America, without offset or deduction or prior notice or demand. No payment by TENANT or receipt by LESSOR of a lesser amount than the rent due shall be deemed to be other than on account of the rent due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and LESSOR shall accept such payment without prejudice to LESSOR's right to recover the balance of said rent or pursue any other remedy in this Lease. 10. CHARGE FOR LATE PAYMENT TENANT hereby acknowledges that the late payment of rent or any other sums due hereunder will cause LESSOR to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include but are not limited to costs such as administrative processing of delinquent notices, increased accounting costs, etc. Accordingly, if any payment of rent as specified in Clause 6 (RENT) or of any other sum due LESSOR is not received by LESSOR by the due date, a late charge of one and one-half percent (1.5%) of the payment due and unpaid plus $100 shall be added to the payment, and the total sum shall become immediately due and payable to LESSOR. An additional charge of one and one-half percent (1.501o) of said payment, excluding late charges, shall be added for each additional month that said payment remains unpaid. TENANT and LESSOR hereby agree that such late charges represent a fair and reasonable estimate of the costs that LESSOR will incur by reason of TENANT's late payment. Acceptance of such late charges (and/or any portion of the overdue payment) by LESSOR shall in no event constitute a waiver of TENANT's default with respect to such overdue payment, or prevent LESSOR from exercising any of the other rights and remedies granted hereunder. 11. CONSTRUCTION AND/OR ALTERATION BY TENANT No structures, improvements, or facilities other than those listed in Clause 4 (USE) of this Lease shall be constructed, erected, altered, or made within the Premises without prior written consent of �. Any conditions relating to the manner, method, design and construction of said structures, improvements, or facilities fixed by the shall be conditions hereof as though originally stated herein. All improvements constructed by TENANT within the Premises shall be constructed in strict compliance with detailed plans and specifications approved by � 19$M 02-10-93 21882-00002 7 F: WOG\152\93020021.RED 12. MAINTENANCE OBLIGATIONS OF TENANT TENANT shall keep and maintain the Premises and all improvements of any kind which may be erected, installed or made thereon in good condition and in substantial repair. It shall be TENANT's responsibility to take all steps necessary or appropriate to maintain such a standard of condition and repair. TENANT expressly agrees to maintain the Premises in a safe and clean condition, to the reasonable satisfaction of T`,E .. _ R and in compliance with all applicable laws. If TENANT fails to maintain or make repairs or replacements as required, )s shall notify TENANT in writing of said failure. Should TENANT fail to correct the situation within three days after receipt of written notice, , LES may make the necessary correction or cause it to be made and the cost thereof, including but not limited to the cost of labor, materials, and equipment and administration, shall be paid by TENANT within ten (10) days of receipt of a statement of said cost from may at its option, choose other remedies available herein, or by law. 13. INSURANCE TENANT fully understands that it is extremely important that TENANT shall maintain insurance acceptable to �* LM""' in full force and effect throughout the term of this Lease. The policy or policies of insurance maintained by TENANT shall provide the following limits and coverages: avera a Minimum Limit General Comprehensive Liability $500,000 Insurance shall be in force the first day of the term of this Lease. Each liability insurance policy required by this Lease shall contain the ,following three clauses: A. "This insurance shall not be cancelled, limited in scope of coverage or non -renewed until after 30 days written notice has been given to the City of Newport Beach, City �r ��3300 Newport Blvd., Newport Beach, California, 92663." B. "City of Newport Beach and the State of California are added as additional named insureds as respects activities of the named insured at or from Premises leased from the City of Newport Beach". 02-10-93 21882-00002 8 F:\DW\152\93020021.RED 0 0 C. "It is agreed that any insurance maintained by the City of Newport Beach and the State of California will apply in excess of, and contribute with, insurance provided by this policy". TENANT agrees to maintain insurance necessary to satisfy City a Mir, that all provisions of this Lease have been complied with, and to keep such insurance in effect and to deposit certificates of insurance upon demand with the City Manager during the entire term of this Lease. THIS LEASE SHALL AUTOMATICALLY TERMINATE AT THE SAME TIME TENANT'S INSURANCE COVERAGE IS TERMINATED. IF, WITHIN TEN (10) DAYS AFTER TERMINATION UNDER THIS CLAUSE, TENANT OBTAINS AND PROVIDES EVIDENCE OF THE REQUIRED INSURANCE COVERAGE ACCEPTABLE TO CITY MANAGER, THIS LEASE MAY BE REINSTATED AT THE SOLE DISCRETION OF CITY MANAGER. IF REINSTATED, TENANT SHALL PAY FIVE HUNDRED DOLLARS ($500) TO COVER THE PROCESSING COSTS INCURRED BY CITY MANAGER. City Manager shall retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of City Manager, insurance provisions in this Lease do not provide adequate protection for LESSOR, City Manager may require TENANT to obtain insurance sufficient in coverage, form, and amount to provide adequate protection. City Manager's requirements shall be reasonable but shall be designed to assure protection from and against the kind and extent of the risks, with respect to the Premises and allowable uses thereof, which exist at the time a change in insurance is required. City Manager shall notify TENANT in writing of changes in the insurance requirements; and if TENANT does not deliver copies of acceptable insurance policies with City Manager incorporating such changes within thirty days of receipt of such notice, this Lease shall be in default without further notice to TENANT, and LESSOR shall have the sole right to terminate this Lease in addition to other remedies available. The procuring of such required policy or policies of insurance shall not be construed to limit TENANT's liability hereunder nor to fulfill the indemnification provisions and requirements of this Lease. 14. ASSIGNING, SUBLETTING AND ENCUMBERING A. Assignment TENANT shall not transfer interest in this Lease without the prior written approval of the City Manager except as provided in paragraph C below of this Clause. As a condition of the City Manager's approval, TENANT shall notify the City Manager of the identity of the proposed TENANT and provide a copy of documentation of the transfer of interest. 02-10-93 21882-00002 � FADMX152\93020021 JED Approval shall not be withheld or delayed provided said transfer of interest occurs concurrently with the transfer of ownership of the adjacent and contiguous residential property and the proposed transfer of interest is to the Grantee of such residential property. In the event TENANT has provided City Manager proper notice, as set forth in Clause 16 (NOTICES), of transfer of its interest in this Lease, and City Manager has not responded to TENANT within sixty (60) days of receipt of such notice, City Manager's approval of said transfer shall be deemed granted provided copies of documentation of said transfer have been received by the City Manager as set forth in this Clause. Upon written approval of transfer of its interest, TENANT is released of any obligations of this Lease, provided no default of the terms of this Lease exists including payment of all rent due to LESSOR as set forth in Clause 6 (RENT) and Clause 10 (CHARGE FOR LATE PAYMENT). Failure to obtain City Manager's approval or deemed approval of transfer of interest shall render such transfer void. Occupancy of the Premises by a prospective transferee or assignee without approval of the transfer or assignment by the City Manager shall constitute a breach of this Lease. Any document used for the purpose of transfer or assignment of the Premises or any part thereof, shall not be inconsistent with the provisions of this Lease and in the event of any such inconsistency, the provisions of this Lease shall control. B. Subl9ling Prior approval of the City Manager shall be required for TENANT to enter into subleases with those residents whose properties adjoin the Premises. All subleases shall be between TENANT and sublessee; the entry into sub -subleases is prohibited and shall constitute a breach of this Lease. C. Encumbrances TENANT shall not pledge, hypothecate, mortgage or encumber its interest in this Lease except to convey a security interest to a lender whose loan is also secured by the residential property which is adjacent and contiguous with the premises. The prior written consent of the LESSOR shall not be required for transfer of LESSEE's interest in the Lease to or from any such lender subject to the following covenants and conditions: 02-10-93 21BB2-00002 F:\DOC\152\93020021.RED 10 1) Said loan and all rights acquired thereunder shall be subject to each and all of the covenants, conditions and restrictions set forth in this Lease and to all rights and interest of LESSOR hereinunder. 2) In the event of any conflict between the provisions of this Lease and the provisions of any loan document, the provisions of this Lease shall control. 3) In the event any such lender subsequently acquires TENANT's interest in this Lease as a result of a foreclosure of its security interest, or an assignment in lieu thereof, such lender shall remain liable for the payment of rent and performance of all other terms, covenants and conditions hereunder only until lender assigns its interest in this Lease. 15. STATE LANDS COMMISSION LEASING POLICY LESSOR and TENANT acknowledge that the consideration for this Lease and any other terms and conditions provided in this Lease do not necessarily reflect the leasing policy of the State Lands Commission. The method for determining rent provided in this Lease shall not be used for the purpose of establishing rent in any future agreements involving filled or unfilled tide or submerged land. 16. NOTICES All notices pursuant to this Lease shall be addressed as set forth below or as either party may hereafter designate by written notice and shall be sent through the United States mail in the State of California, duly registered or certified, return receipt requested, with postage prepaid. If any notice is sent by registered or certified mail, as aforesaid, the same shall be deemed to have been served or delivered twenty-four (24) hours after mailing thereof as above provided. Notwithstanding the above, LESSOR may also provide notices to TENANT by personal delivery or by regular mail and any such notice so given shall be deemed to have been given upon receipt. LESSOR TENANT City Manager Phillip N: br d „x Lyons City df Newport Beach ;r ` 94 C., 3300 Newport Blvd. ,� �© T Newport Beach, CA 92663 Ha Is—lavd LESSOR shall provide access to and/or a copy of the Lease to TENANT and successors upon request to the following office: 02-10-93 21882-00002 F. -M M152\93020021.RED City Manager City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 17. MEMORANDUM OF LEASE In order to impart constructive notice of TENANT"s obligations under the terms of this Lease, TENANT shall cause any prospective transferee or assignee to sign the "Memorandum of Lease", in a form as shown on "Exhibit B", attached hereto and made a part hereof, and have the signature notarized. The signed and notarized Memorandum of Lease shall be submitted to the City Manager as part of the documentation of the transfer of interest as set forth in Clause 14 (ASSIGNING, SUBLETTING AND ENCUMBERING). 18. ATTACHMENTS TO LEASE This Lease includes the following, which are attached hereto and made a part hereof: GENERAL CONDITIONS -- (21 Clauses) EXHIBIT A (Location Map) EXHIBIT B (Memorandum of Lease) IN WITNESS WHEREOF, the parties have executed this Lease the day and year first indicated. LESSOR WCOM PP PP Date: APPROVED AS TO FORM:: CITY ATTORNEY By: ATTEST 02-10-93 21882-00002 12 FAMM152193020021AED TENANT : F Phillip N. Lyons 'Tli eg CITY CLERK 02 F: • is low W A WIF - RECEIVED NAR 2 71995 DrFurr c�rY , LEASE ANAGER 0 ClrY px hFwPp r 8F4C!! THIS LEASE is made by and between THE CITY OF NEWPORT BEACH, a Municipal Corporation, hereinafter referred to as "LESSOR" and Phillip N. Lyons and Mary A. Lyons, Trustees of the LYONS COMMUNITY PROPERTY TRUST dated June 15, 1979, as amended, hereinafter referred to as "TENANT', without regard to number and gender. 1. DEFINITIONS The following words in this Lease have the significance attached to them in this clause unless otherwise apparent from context: "City Manager" means the City Manager of the City of Newport Beach or his or her designee. "Planning Department" means the Planning or other department of the City of Newport Beach responsible for the processing or approval of development. "Real Estate Director" means the City Manager of the City of Newport Beach or his designated representative. 2. PREMISES LESSOR leases to TENANT that certain property hereinafter referred to as "Premises", shown on "Exhibit A", attached hereto and by reference made a part hereof, and described as those filled tidelands lying between the extension of the sidelines of Let- of Tract ca 7- 802 802 from the adjudicated mean high tide line to the United States bulkhead line, excepting therefrom those lands lying below the existing mean high tide line. Use of submerged a "water covered" tidelands areas is not provided for herein, n c� 3. LIMITATION OF THE LEASEHOLD This Lease and the rights and privileges granted TENANT in and to the Premises are subject to all covenants, conditions, restrictions, and exceptions of record or apparent, including those which are set out in the Tidelands Grant by the State of California to the City of Newport Beach. Nothing contained in this Lease or in any document related hereto shall be construed to imply the conveyance to TENANT of rights in the Premises which exceed those owned by LESSOR, or any representation or warranty, either expressed or implied, relating to the nature or condition of the Premises or LESSOR's interest therein. 03-01-93 21882-00002 F: \DOC\152'%93020021.3RD C7 0 IN WITNESS WHEREOF, the parties have executed this Lease the day and year indicated. LESSOR CITY OF NEWPORT BEACH NA � ,�� Mayor lk. , APPRO D AS TO FORM: CIAORNEIYBy A ST CITY CLERK TENANT THE LYONS TRUST date? PROPERTY as amended By; •*"/// hilli N. ons, Trustee By: Ma yons, Tru t v nate: 4� 03-01-93 21882-00002 F.,\DM\152\93020021.3W 13 LEASE TABLE OF CONTENTS Clause Number and Name Page 1. DEFINITIONS...........................r.......... 1 2. PREMISES .............................:.......... 1 3. LIMITATION OF THE LEASEHOLD ..........; ............. 1 4. USE ............................................. 2 5. TERM ............................................. 3 6. RENT ............................................ 3 7. REVISION OF RENT ................................. 3 8. REAPPRAISAL OF RENT .............................. 4 9. RENT PAYMENT PROCEDURE 6 .......................... 10. CHARGE FOR LATE PAYMENT ......................... 7 11. CONSTRUCTION AND/OR ALTERATION BY TENANT .......... 7 12. MAINTENANCE OBLIGATIONS OF TENANT ................. 8 13. INSURANCE ............................ .......... i 8 14. ASSIGNING, SUBLETTING AND ENCUMBERING ............. 10 15. STATE LANDS COMMISSION LEASING POLICY: .............. 11 16. NOTICES .............................. ' ..... 11 17. MEMORANDUM OF LEASE 12 ............................ 18. ATTACHMENTS TO LEASE ............................ 12 03-01-93 21882-00002 F:\D0C\152\93020021.3RD LEASE THIS LEASE is made by and between THE CITY OF NEW, BEACH, a Municipal Corporation, hereinafter referred to as "LESSOR" and Phillip N. Lyons and Mary A. Lyons, Trustees of the LYONS COMMUNITY PROPERTY TRUST dated June 15, 1979, as amended, hereinafter referred to as "TENANT', without regard to number and gender. 1. DEFINITIONS The following words in this Lease have the significance attached to them in this clause unless otherwise apparent from context: "City Manager" means the City Manager of the City of Newport Beach or his or her designee. Planning Department means the Planning or other department of the City of Newport Beach responsible for the processing or 'approval of development. "Real Estate Director" means the City Manager of the City of Newport Beach or his designated representative. 2. PREMISES LESSOR leases to TENANT that certain property hereinafter referred to as "Premises", shown on "Exhibit A", attached hereto and by reference made ;apart hereof, and described as those filled tidelands lying between the extension of the sidelines of Lot #17 of Tract 802 from the adjudicated mean high tide line to the United States bulkhead line, excepting therefrom those lands lying below the existing mean high tide line. Use of submerged "water covered" tidelands areas is not provided for herein. 3. LIMITATION OF THE LEASEHOLD This Lease and the rights and privileges granted TENANT !in and -to the Premises are subject to all covenants, conditions, restrictions, and exceptions of record or apparent, including those which are set out in the Tidelands Grant by the State of California to the City of Newport Beach. Nothing contained in this Lease or in any document related hereto shall be construed to imply the conveyance to TENANT of rights in the Premises which exceed those owned by LESSOR, or any representation or warranty, either expressed or implied, relating to the nature or condition of the Premises or L• ESSOR's interest therein. 03-01-93 21882-00002 F:\D0C\152\93020021.3RD TENANT acknowledges that TENANT has conducted a complete and adequate investigation of the Premises and that TENANT has accepte,l the Premises in its "as is" condition. E 4. USE A. TENANT shall have the exclusive, private enjoyment of the Premises for residential yard, landscaping and non -permanent recreational purposes as an adjunct to the residence of those single family residences that adjoin the Premises and can exclude public access during the term of the Lease, consistent with the Statutes of the State of California and City Charter of the City of Newport Beach. As used in this Lease, landscaping and non -permanent recreational improvements include the following: 1) Patios and decks; 2) Walks and steps, including dock access walks; 3) Planters and` garden walls not exceeding 36 inches in height above natural grade; ! 4) Benches; 5) Statues; d) Landscaping; 7) Sprinkler systems; 8) Yard lighting; 9) Bulkheads and seawalls; and 10) Any and all improvements existing as of;` March 22, 1993. TENANT agrees not to use the Premises for any other purpose nor to engage in or permit any other activity within or from the Premises. B. TENANT shall obtain prior written consent o£ LESSOR before the placement of any improvements not listed above. Consent of LESSOR shall be obtained through its Planning Department. 03-01-93 21882-00002 2 F:\DOC\1'52\93020021.3RD 0 5. TERM The term of this Lease shall be forty-nine TENANT understands and agrees that this provided in Clause 13 (INSURANCE). 6. RENT • (49) years, commencing on March 22, 1993. Lease is subject fo automatic termination as Commencing March 22, 1993 and continuing until adjusted pursuant to Clause 7 or 8 of this Lease, TENANT agrees to pay as rent for the Premises the ;sum of $10,161.82 per year, payable on or before March 22, 1993 and on or before each ianniversary of the effective date of this Lease thereafter, so long as tenancy continues. Irl the event the obligation to pay rent terminates on some date other than the anniversary �of the effective date of this Lease, the rent shall be prorated to reflect the actual period of tenancy. 7. REVISION OF RENT Every three years the rent specified in 'Clause 6 (RENT) shall be subject to automatic adjustments in proportion to change in the Consumer Price Index for Los Angeles -- Anaheim --Riverside, CA (All Urban Consumers --All Items 1982-84 =100) promulgated by the Bureau of Labor Statistics of the U.S. Department of Labor (INDEX). The first automatic adjustment shall be effective on March 22, 1994 and subsequent adjustments shall be effective on the March 22 anniversary date every third year thereafter (1997, 2000, etc.). Adjusted rent shall be calculated by means of the following formula: A=$* x B C A = Adjusted Rent B = INDEX for the fourth month prior to the month in which each rental rate adjustment is to become effective. For calculating 1994 and 1997 adjustments, C = Monthly Index for March 1988 = 120.6 For calculating subsequent adjustments, C shall equal the Monthly Index for the most recent effective date of reappraised rent as set forth i CIause 8 (REAPPRAISAL OF RENT) (March 1998, March 2008, March 2018, Mhrch 2028 and March 2038). 03-01-93 21ss2-00002 3 F:\DX\152\93020021.3RD For calculating 1994 .and 1997 adjustments, * shall eq> al base rent established for March 1988, which is Eight Thousand Eight Hundred Twenty -Three and 32/100 Dollars ($8,823.32). I For calculating subsequent adjustments, * shall equal the rent established for the most recent effective date of reappraised rent as set forth in Clause 8 (REAPPRAISAL OF RENT) (March 22, 1998, March 22, 2008, March 22, 2018, March 22, 2028 and March 22, 2038. Notwithstanding the foregoing, in no event shall the annual rent be reduced by reason of such adjustment. ' In the event that the INDEX is not issued or published for the period for which such annual rent is to be adjusted and computed hereunder, or� that the Bureau of Labor Statistics of the United States Department of Labor should ;cease to publish said index figures, then any similar index published by any other branch or department of the United States Government shall be used and if none is so published, then another index generally recognized and authoritative shall be substituted by LESSOR! 8. REAPPRAISAL OF RENT LESSOR and TENANT agree that rent payable pursuant to Clause 6 (RENT) and as adjusted by Clause 7 (REVISION OF RENT) of this Lease, shall be subject to periodic adjustment by reappraisal in five (5) years and every ten (10) years thereafter to be effective on the following dates: March 22, 1998, March 22, 2008, March 22, 2018, March 22, 2028 March 22, 2038 It is the intent of LESSOR and TENANT that rent payable pursuant to Clause 6 (RENT) of this Lease, shall be calculated by the following formula: Rent = reappraised value of the Premises x .375 (thirty! seven and one-half percent) x .09 (nine percent) Note: (.375 is based upon 62.5% discount for land utilization i.e., 1.0 - .625 = .375; .09 is based upon rate of return.) LESSOR and TENANT shall begin the appraisal process to determine rent adjustment six months prior to the effective date of said rent adjustment and shall use the following procedure: 03-01-93 21882-00002 F:\DoC\152\93020021.3RD 4 'f - A. LESSOR and TENANT shall, no less than 180 days prior to the next scheduled rent adjustment, each employ a qualified real estate appraiser. LESSOR shall use its reasonable efforts to provide TENANT written notice of its obligation to employ.an appraiser thirty (30) days prior to the date by which the appraiser must be employed. LESSOR's failure to provide such notice shall not relieve TENANT of obligation to employ an appraiser as set forth in this Lease. The term "qualified real estate appraiser", as used herein shall mean and refer to a real estate appraiser designated as a "senior" member or equivalent by a nationally recognized appraisal organization, hereinafter referred to as "appraiser", and u�ho has at least five years experience appraising this type of property. 1) In the event TENANT fails to employ an appraiser prior to this 180 - day period and provide written notice to i1ESSOR of said employment, then the appraiser employed by the LESSOR shall be the sole appraiser responsible for determining the value of the Premises and his opinion shall be binding upon LESSOR and TENANT. 2) LESSOR and TENANT shall be individually responsible for the fee of the appraiser which it employs. B. After selection of the appraiser(s), the Real Estate'Director shall immediately fix a time and place for a pre -appraisal meeting with the Real Estate Director, TENANT, and the appraiser(s). 1) At or before the pre -appraisal meeting, the Real Estate Director shall provide the appraiser(s) with a "Scope of Work". 2) The appraiser(s) shall, within 120 days after the pre -appraisal meeting, prepare and deliver to LESSOR and TENANT two copies of a fully documented written report, prepared in accordance with the Scope of Work, containing the appraiser's independent opinion of the value of the Premises. C. The rent adjustment shall be determined as follows: 1) If only one appraisal is submitted within ;the 120 -day period, then the rent adjustment shall be based on the estimated value of the Premises as set forth in that appraisal. The rent shall then be determined using the formula set forth above in this Clause t8 (REAPPRAISAL RENT). i 2) If two appraisals are submitted within the 1120-day,period, then the rent adjustment shall be on the mathematical average of the estimated value of the Premises of the two appraisals, provided the lower of the two appraisal values is equal to or greater than ninety percent (909o') of the 03-01-93 21882-00002 5 F:\DOC\152\93020021.3RD higher of the two appraisal values. The rent shall then be determined using the formula set forth above in this; Clause 8 (REAPPRAISAL OF RENT). D. In the event two appraisals are submitted but the value of the lower is less than ninety percent (90%) of the higher of the two values, the Real Estate Director shall independently select a third appraiser. 1) The third appraiser shall then have sixty (6;0) days after its appointment to prepare and deliver to LESSOR and TENANT two (2) copies of a fully documented written report prepared in accordance with the Scope of Work containing that appraisers independent opinion of the value of the Premises. LESSOR and TENANT shall each pay one half of the fee of the third appraiser. t { 2) In the event the third appraisal is required, the reappraised value for determining the rent adjustment shall be, based on the mathematical average of the two appraisals with the closest estimated values and the Rent shall then be determined by using the formula set forth above in this Clause 8 (REAPPRAISAL OF RENT). E. LESSOR and TENANT agree to be bound to the herein described rent adjustment without further dispute. In no event shall adjusted rent be less than rent payable immediately prior to the subject rent reappraisal date. Should the adjusted annual rent be determined subsequent to the effective date thereof, said adjusted annual rent shall be retroactive to that date. TENANT shall pay all retroactive rent, without penalty, within 30 days after receipt of notice from LESSOR of the amount pf retroactive rent due. F. Appraisals or discount factors used for the purposes of rent calculation or adjustment, as provided in this Lease, shall be uled only to set consideration for this Lease subject to terms and conditions hereof. G. Alternately, LESSOR and TENANT may in�tually elect to utilize the reappraisal of rent as determined by a like p1rocedure conducted by the County of Orange and its tidelands tenants on arbor Island. 9. RENT PAYMENT PROCEDURE a LESSOR shall use its reasonable efforts to provide TENANT with a written statement of the rent due on or before thirty (30) days prior to the date each rent payment is due. 03-01-93 21W2-00002 F:WOC\152X93020021.3Ro 6 LESSOR's failure to provide such written notice shall in no way relieve TENANT of its 1 ` obligation to pay all rent required by this Lease as and when; due. Rent payments shall be delivered or sent by U.S. Mail to Finance Director, City of Newport Beach, 3300 Newport Blvd., Newport Beach, CA 92663. The designated place of payment may be changed at any time by LESSOR upon ten (10) days written notice to TENANT. Rent payments shall be made payable to the City of Newporti Beach. TENANT assumes all risk of loss if payments are made by mail. All rental shall be paid in lawful money to the United States of America, without offset or deduction or prior notice or demand. No payment by TENANT or receipt by LESSOR of a lesser amount than the rent due shall be deemed to be other than on account of the rent due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and LESSOR shall accept such payment without prejudice to LESSOR's right to recover the balance of said rent or pursue any other remedy in this Lease. 10. CHARGE FOR LATE PAYMENT TENANT hereby acknowledges that the late payment of rent or any other sums due hereunder will cause LESSOR to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include but are not limited to costs such as administrative processing of delinquent notices, increased accounting costs, etc. Accordingly, if any payment of rent as specified in Clause 6 (RENT) or of any other sum due LESSOR is not received by LESSOR by the due date, a plate charge of one and one- half percent (1.5%) of the payment due and unpaid plus $100 shall be added to the payment, and the total sum shall become immediately due and payable to LESSOR. An additional charge of one and, one-half percent (1.5%) of said payment, excluding late charges, shall be added for each additional month that said payment remains unpaid. TENANT and LESSOR hereby agree that such late charges represent a fair and reasonable estimate of the costs that LESSOR will incur by reason of TENANT's late payment. Acceptance of such late charges (and/or any portion of the overdue payment) by LESSOR shall in no event constitute a waiver of TENANT's default kith respect to such overdue payment, or prevent LESSOR from exercising any of the othezi rights and remedies granted hereunder. 11. CONSTRUCTION AND/OR ALTERATION BY TENANT No structures, improvements, or facilities other than those listed in Clause 4 (USE) of this Lease shall be constructed, erected, altered, or made within; the Premises without prior written consent of LESSOR. Any conditions relating to the manner, method, design and 03-01-93 21882-00002 F:\DM\152\93020021.30 7 construction of said structures, improvements, or facilities fixed by the LESSOR shall be conditions hereof as though originally stated herein. All improvements constructed by TENANT within the Prenmises shall be constructed in strict compliance with detailed plans and specifications approved by LESSOR. 12. MAINTENANCE OBLIGATIONS OF TENANT TENANT shall keep and maintain the Premises and all improvements of any kind which may be erected, installed or made thereon in good condition -and in substantial repair. It shall be TENANTs responsibility to take all steps necessary or appropriate to maintain such a standard of condition and repair. TENANT expressly agrees to maintain the Premises in a safe and clean condition, to the reasonable satisfaction of LESSOR and in compliance with 911 applicable laws. If TENANT fails to maintain or make repairs or replacement's as required, LESSOR shall notify TENANT in writing of said failure. Should TENAN'P fail to correct the situation within three days after receipt of written notice, LESSOR may make the necessary correction or cause it to be made and the cost thereof, including but not limited to the cost of labor, materials, and equipment and administration, shall be paid by TENANT within ten (10) days of receipt of a statement of said cost from LESSOR. LESSOR may at its option, choose other remedies available herein, or by law. 13. INSURANCE TENANT fully understands that it is extremely important that TENANT shall maintain insurance acceptable to LESSOR in full force and effect throughout the term of this Lease. The policy or policies of insurance maintained by TENANT shall provide the following limits and coverages: Coverage Minimum Limit General Comprehensive Liability $500,0100 Insurance shall be in force the first day of the term of this Lease. Each liability insurance policy required by this Lease shall 1contain the following three clauses: A. "This insurance shall not be cancelled, limited In scope of coverage or non - renewed until after 30 days written notice has been given to the City of 03-01-93 21882-00002 F:V=\152\93020021.380 8 Newport Beach, City Manager, 3300 Newport Blvd., Newport Beach, California, 92663." 1 B. "City of Newport Beach and the State of California are added as additional named insureds as respects activities of the named insured at or from Premises leased from the City of Newport Beach". C. It is agreed that any insurance maintained by the City of Newport Beach and the State of California will apply in excess of, a- �d contribute with, insurance provided by this policy". TENANT agrees to maintain insurance necessary to satisfy Citi Manager, that all provisions of this Lease have been complied with, and to keep such insurance in effect and to deposit certificates of insurance upon demand with the City Manager wring the entire term of this Lease. THIS LEASE SHALL AUTOMATICALLY TERMINATE AT THE SAME TIME TENANT'S INSURANCE COVERAGE IS TERMINATED. IF, WITHIN TEN (10) DAYS AFTER TERMINATION UNDER THIS CLAUSE, !TENANT OBTAINS AND PROVIDES EVIDENCE OF THE REQUIRED INSURANCE COVERAGE ACCEPTABLE TO CITY MANAGER, THIS LEASE MAY BE REINSTATED AT THE SOLE DISCRETION OF CITY MANAGER. IF REINSTATED, TENANT SHALL PAY FIVE HUNDRED DOLLARS ($500) TO COVER THE PROCESSING COSTS INCURRED BY CITY MANAGER. City Manager shall retain the right at any time to review the 'coverage, form, and amount of the insurance required hereby. If, in the opinion of City i4anager, insurance provisions in this Lease do not provide adequate protection for LESSOR, City Manager may require TENANT to obtain insurance sufficient in coverage, form, and, amount to provide adequate protection. City Manager's requirements shall be reasonable but shall be designed to assure protection from and against the kind and extent of the risks, with respect to the Premises and allowable uses thereof, which exist at the time a change in insurance is required. City Manager shall notify TENANT in writing of changes in ithe insurance requirements; and if TENANT does not deliver copies of acceptable insurance policies with City Manager incorporating such changes within thirty days of receipt of such notice, this Lease shall be in default without further notice to TENANT, and LESSOR shall have the sole right to terminate this Lease in addition to other remedies available. The procuring of such required policy or policies of insurance shall not be construed to unlit TENANT's liability hereunder nor to fulfill the indemnification provisions and requirements of this Lease. 03-09-93 21882-00002 F ADOW 52\93020021.3Ro 9 0 14. ASSIGNING, SUBLETTING AND ENCUMBERING A. Assignment TENANT shall not transfer interest in this Lease without the prior written approval of the City Manager except as provided in paragraph C below of this Clause. As a condition of the City Manager's approval, TENANT shall notify the City Manager of the identity of the proposed TENANT and provide a copy of documentation of the transfer of interest. Approval shall not be withheld or delayed provided said transfer of interest occurs concurrently with the transfer of ownership of the adjacent and contiguous residential property and the proposed transfer of interest is to the Grantee of such residential property. ; In the event TENANT has provided City Manager proper notice, as set forth in Clause 16 (NOTICES), of transfer of its interest in this Lease, and City Manager has not responded to TENANT within sixty (60) days of receipt of such notice, City Manager's approval of said transfer shall be deemed granted provided copies of documentation of said transfer have been received by the City Manager as set forth in this Clause. Upon written approval of transfer of its interest,i TENANT is released of any obligations of this Lease, provided no default of xhe terms of -this Lease exists including payment of all rent due to LESSOR as set forth in Clause 6 (RENT) and Clause 10 (CHARGE FOR LATE PAYMENT). Failure to obtain City Manager's approval or deemed approval of transfer of interest shall render such transfer void. Occupancy of the Premises by a prospective transferee or assignee without approval of the transfer or assignment by the City Manager shall constitute a breach of this Lease. Any document used for the purpose of transfer or assignment of the Premises or any part thereof, shall not be inconsistent with the provisions of this Lease and in the event of any such inconsistency, the provisions of this Lease shall control. i B. Subletting i Prior approval of the City Manager shall be required for TENANT to enter into subleases with those residents whose propezjties adjoin the Premises. All subleases shall be between TENANT and sublessee; the entry into sub - subleases is prohibited and shall constitute a bleach of this Lease. 03-01-93 211-00002 F:\DW\15Z\93020021.3RD 10 C. Encumbrances TENANT shall not pledge, hypothecate, mortgdge or encumber its interest in this Lease except to convey a security interest to a lender whose loan is also secured by the residential property which is adjacent and contiguous with the premises. The prior written consent of the LESSOR shall not be required for transfer of LESSEE'S interest in the Lease Ito or from any such lender subject to the following covenants and conditions: 1) Said loan and all rights acquired thereunder shall be subject to each and all of the covenants, conditions and Irestrictions set forth in this Lease and to all rights and interest of LESSOR hereinunder. 2) In the event of any conflict between the provisions of this Lease and the provisions of any loan document, the provisions of this Lease shall control. 3) In the event any such lender subsequently acquires TENANT's interest in this Lease as a result of a foreclosure of its security interest, or an assignment in lieu thereof, such lender `shall remain liable for the payment of rent and performance of all other terms, covenants and conditions hereunder only until lender assigns its interest in this Lease. 15. STATE LANDS COMMISSION LEASING POLICY LESSOR and TENANT acknowledge that the consideration for this Lease and any other terms and conditions provided in this Lease do not necessarily, reflect the leasing policy of the State Lands Commission. The method for determining rent provided in this Lease shall not be used for the purpose of establishing rent in any future agreements involving filled or unfilled tide or submerged land. 16. NOTICES All notices pursuant to this Lease shall be addressed as set fdrth below or as either party may hereafter designate by written notice and shall be sent through the United States mail in the State of California, duly registered or certified, return receipt requested, with postage prepaid. If any notice is sent by registered or certified mail, ,as aforesaid, the same shall be deemed to have been served or delivered twenty-four (24); hours after mailing thereof as above provided. Notwithstanding the above, LESSOR �ay also provide notices to TENANT by personal delivery or by regular mail and any such notice so given shall be deemed to have been given upon receipt. 03-01-93 21882-00002 F:\DOC\152\93020021.30 1 LESSOR 'TENANT City Manager Phillip N. Lyons and Mary A. Lyons City of Newport Beach Trustees of the Lyons Community 3300 Newport Blvd. Property Trust Newport Beach, CA 92663 36 Harbor Island Newport Beach, CA 92660 LESSOR shall provide access to and/or a copy of the Lease to TENANT and successors upon request to the following office: City Manager City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 17. MEMORANDUM OF LEASE In order to impart constructive notice of TENANT's obligations under the terms of this Lease, TENANT shall cause any prospective transferee; or assignee to sign the "Memorandum of Lease", in a form as shown on "Exhibit B", attached hereto and made a part hereof, and have the signature notarized. The signed and notarized Memorandum of Lease shall be submitted to the City Manager as part of the documentation of the transfer of interest as set forth in Clause 14 (ASSIGNING, SUBLETTING AND ENCUMBERING). 18. ATTACHMENTS TO LEASE This Lease includes the following, which are attached hereto land made a part hereof.- GENERAL ereof: GENERAL CONDITIONS -- (21 Clauses) EXHIBIT A (Location Map) EXHIBIT B (Memorandum of Lease) 03-D1-93 F:\DOC\152\9' IN WITNESS WHEREOF, the parties have executed this Lease the day and year first indicated. LESSOR CITY OF NEWPORT BEACH Mayor -7-t, D. APPRO D AS TO FORM: CITY ORNEY By: A ST CITY CLERK / TENANT THE LYONS; TRUST dates By. Philli6 N. PROPERTY , as amended Trustee ✓ y Date:2Z 03-01-93 21882-00002 F: WoC\152\93020021.3817 13 E neral ondi on (5 pages} Clause Nurn er and Narxae 1. Time 2. Lease Organization 3. Permits and Licenses 4. Amendments 5. Unlawful Use 6. Inspection 7. Hold Harmless 8. Taxes and Assessments 9. Successors in Interest 10. Circumstances Which Excuse Performance 11. Partial Invalidity 12. Utilities 13. Waiver of Rights 14. Default in Terms of Lease by Tenant 15. Reservations to Lessor 16. Holding Over 17. Condition of Demised Premises Upon Termination i 18. Nsposition of Abandoned Property 19. Quitclaim of Tenant's Interest Upon Termination 20. Lessor's Right to Re -linter 21. Removal of Improvcrnents It • I. GENERAL CONDITIONS 1. TIME 'Time is of the essence of this Lease. 2. LEASE ORGANIZATION The various headings and numbers herein, the grouping separate clauses and paragraphs, and the organization convenience only and shall not be considered otherwise. I PERMITS AND LICENSES df provisions of this Lease into hereof, are for the purpose of TENANT shall be required to obtain any and all approvals, permits, and/or licenses which may be required in connection with the operation of the Demised Premises as set forth herein. No permit, approval, or consent given bya LESSOR, in its governmental capacity, shall affect or limit TENANTS obligations hereunder, nor shall any approvals or consents given by LESSOR as a party to this Lease, be deemed approval as to compliance or conformance with applicable governmental codes, laws,', rules, or regulations. 4. AMENDMENTS This Lease sets forth all of the agreements and understandings of °the parties with regard to its subject matter and any modification must be written and properly executed by both parties. 5. UNLAWFUL USE TENANT agrees no improvements shall be erected, placed upon, operated, nor maintained within the Premises, nor any business conducted or carried on therein or therefrom, in violation of the terms of this Lease.. or of any regulation, order of law, statute, bylaw. or ordinance of a governmental agency having jurisdiction. G. INSPECTION LESSOR or its authorized representative shall have the right at all reasonable times to inspect the Premises to determine if the provisions of this Lease are being complied with. 7. HOLD HARMLESS TENANT hereby waives all claims and recourse against LI:SSOIt and the State of California including the right of contribution for loss or d niagc cif persons or property arising from growing out of or in any way connected wifln or rebated to this agreement except claims arising from the concurrent acuve or sole r.egligC Iti C of the State of California or LESSOR, or their officers, agents, and employees. TENANT hereby, agrees to indemnify, hold harmless and defend the State of California and LESSOR and their officers, agents, and employees, aiainst any and all claims, loss, demands, damages, cost, expenses or Iiability costs arising out of the operation or maintenance of the property described herein except f: r liability arising out of the concurrent active or sole negligence of the State of California and.'or LESSOR, their officers, agents, or employees. In the event the State ol� California and/or LESSOR is named as co-defendant, TENANT shall notify LESSOR of such facts and shall represent the State of California and/or LESSOR in such legal action; unless the State of California and/or LESSOR undertakes to represent itself as co-defendant in such legal action, in which event TENANT shall pay to the State of California and/or LESSOR its litigation costs, expenses, and attorney's fees. In the event judgment is entered against the State of California and/or LESSOR and TENANT because of the concurrent active negligence of the State of California and/or CLSSOR and 'TENANT, their officers, agents, or employees, an apportionment of liability to pay such judgment shall be made by a court of competent jurisdiction. Neither party shall request a jury apportionment. LESSOR agrees to indemnify and hold harmless TENANT, its officers, agents and employees against any and all claims, loss, demands, damages, costs, expenses or.liability arising out of the concurrent active or sole negligence of the LESSOR or its officers, agents or employees. 8. TAXES AND ASSESSMENTS This Lease may create a possessory interest which is subject to the payment of taxes levied on such interest. It is understood and agreed that all taxes and assessments (including but not limited to said possessory interest tax) Which become due and payable upon the Premises shall be the full responsibility of TENXNTT, and TENANT shall cause said taxes and assessments to be paid promptly. 9. SUCCESSORS IN INTEREST Unless otherwise provided in this Lease, the terms, covenants, and conditions contained herein shall apply to and bind the heirs, successors, executors, administrators, and assigns of all the parties hereto, all of whom shall be jointly and severally liable hereunder. 10. CIRCUMSTANCES WHICH EXCUSE PI RFORMANQE i if either party hereto shall be delayed or prevented from the performance of any act required hereunder by reason of acts of God, restriIctive governmental laws or regulations, or other cause without fault and beyond the icontrol of the party obligated (financial inability excepted), performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay, I-ioweve�r. nothing in this clause shall excuse TENANT from the prompt payment of an%, rental or other charge required of TENANT except as may be expressly provided elsewhere in this Lease. 2 i 1. PARTIAL INVAI.II)I'TY If any term, covenant, condition, or provision competent jurisdiction to be invalid, void, or provisions hereof shall remain in full force and impaired, or invalidated thereby. 12. UTILITIES of this Lease unenforcicable, effect and; shall is held by a court of the remainder of the in no way be affected, TENANT shall be responsible for and pay, prior to the delinquent date, all charges for utilities supplied to the premises. 13, WAIVER OF RIGHTS The failure of LESSOR or TENANT to insist upon strict performance of any of the terms, covenants, or conditions of this Lease shall not be deemed a waiver of any right or remedy that LESSOR or TENANT may have, and shall not be deemed a waiver of the right to require strict performance of all the terms, covenants, acid conditions of the Lease. 14. DEFAULT IN TERMS OF THE LEASE BY TENANT Should TENANT default in the performance of any covenant, condition, or agreement contained in this Lease and such default is not corrected within a reasonable time Cas determined by LESSOR) after TENANT receives written notice of default from LESSOR, LESSOR may terminate this Lease. half rights a of TENANT me of such terminathose t ion. o,� !aim under TENANT, stemming from this Lease, s { 15. RESERVATIONS TO LESSOR ' lE The Premises are accepted as is and where is by TENANT subject to any and all existing easements and encumbrances. LESSOR reserves the right -to install, ldy, construct, maintain, repair, and operate such sanitary sewers, drains,:storm water sewers, pipelines, manholes, and connections; water, oil, and gas pipelines; telephone and telegraph power lines; and the appliances and appurtenances necessary or convenient in connection therewith, in, over, upon, through, across, and along the Premises or any part thereof as may be necessary to serve the Premises, and to enter the; Premises for any and all such purposes. LESSOR also reserves the right to grant franchises, easements, rights of way, and permits in, over, upon, through, across, and along any and all portions of the Premises as may be necessary to serve the Premises. LESSOR agrees that rights granted to third parties by reason of this clause shall contain provisions that the surface of -the land shall be restored! as nearly as practicable to its original condition upon the completion of any construction. th LESSOR further, es agrees that should meby exercise of these gehts rentals orarihalllbe y interfere reduced in the use of any or all of the P Y proportion to the interference with TE'NANT'S use: of diel Premises. 3 Ll 0 16. HOLDING OVER In the event TENANT shall continue in possession pf the Premises after the term of this Lease, such possession shall not be considered a� renewal of this Lease but a tenancy from month to month and shall be governed by ,the conditions and covenants contained in this Lease. 17. CONDITION OF DEIMISED PREMISES UPON TERMINATION Except as otherwise agreed to herein, upon termination, of this Lease, TENANT shall redeliver possession of said Premises- to LESSOR in substantially the same condition that existed immediately prior to TENANT's entry thereon, reasonable wear and tear, flood, earthquakes, war, and any act of war, excepted. 18. DISPOSITION OF ABANDONED PERSONAL PROPEWI-Y I If TENANT abandons the Premises or is dispossessed ohereof by process of law or otherwise, title to any personal property belonging to TE ANT and left on the Premises 15 days after such abandonment or dispossession shall be deemed to have been transferred to LESSOR. LESSOR shall have the right to remove and to dispose of such property without liability therefor to TENANT or to ;any person claiming under TENANT, and shall have no need to account therefor. 19. QUITCLAIM OF TENANTS INTEREST UPON TERMINATION Upon termination of this Lease for any reason, including but not limited to termination because of default by TENANT, TENANT shall execute, acknowledge, and deliver to LESSOR within 30 days after receipt of written demand therefor, a good and sufficient deed whereby all right, title, and interest of TENANT in the Premises is quitclaimed to LESSOR. Should TENANT fail or refuse to deliver the required deed to LESSOR, LESSOR may prepare and record a notice reciting the failure of TENANT to execute, acknowledge and deliver such deed and said notice shall be conclusive l'evidence of the termination of this Lease and of all right of TENANT or those claiming under TENANT in and to the Premises. 20. LESSOR'S RIGHT TO RE-ENTER TENANT agrees to yield and peaceably deliver possessioN of the Premises to LESSOR on the date of termination of this Lease, whatsoever the reason for such termination. Upon giving written notice of termination to -rENANT, IASOR shall have the right to re- enter and take possession of the Premises on the date such termination becomes effective without further notice of any kind and without institution of summary or regular legal proceedings. Terminadon-of the Lease and re-entry of the Premises by LESSOR shall in no way alter or diminish any obligation of 'rf?NANT under the lease terms and shall not constitute an acceptance or surrender. 4 TENANT waives any and all right of redenmptibn under any existing eorf uturey la wfor statute in the event of eviction from or dispossession of the Pre reason or in the event LESSOR re-enters and takes possession of the Premises in a lawful manner. 21. REMOVAL OF I.MPROVEM1:r\rrS All improvements constructed or placed within the Premises by TENANT must, upon completion, be free and clear of all lens, alt TCNANT`s or cost toility oremo�e all TENr or ANT LESSOR retains the right to require TENANT, l improvements located on the Premises at the expiration or termination of this Lease. Improvement lb S1' not Al shown 01. • n ! 1 � ��� •irk � •`` , t .' '• ; '•� '+�.,•t County Tidsl.ndn ik 41 1 ?1 V .. 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