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C-2490 - Harbor Island Drive - Balboa Yacht Basin - Lease Agreement 1985
(J 1 v AMENDMENT TO LEASE BASIN MARINE, INC. This Amendment is made to an existing Lease between Basin Marine, Inc., a California corporation ("Lessee"), and the City of Newport Beach ("Lessor"), dated March 5, 1985. The subject of the Lease is that certain property known in the Lease as "Leased Premises" and legally described in Exhibit "A" attached hereto. RECITALS A. Paragraph 3(a) of the Lease provides that Lessee will pay a minimum guaranteed rental for the Lease Premises and that the minimum guaranteed rental may be increased if in the opinion of a qualified appraiser it is necessary to accurately reflect the fair market rental value of the premises. B. A qualified appraiser has determined that the fair market rental value of the Leased Premises is $51,200.00 per year. as follows: NOW, THEREFORE, the parties agree that the Lease shall be amended (1) Paragraph 3(a) shall be amended to provide that the minimum guaranteed rental shall be $51,200.00 per year, payable at $4,266.66 per month effective December 1, 1997; (2) Except as specifically amended in paragraph (1) above, all other terms and conditions of the Lease will remain in full force and effect, unchanged and binding upon the Lessee. Amendment to Lease Re: Basin Marine, Inc. January 26, 1998 page 2 IN WITNESS WHEREOF, the parties have executed this Amendment to the Lease on the day and year first written above. Dated: January , 1998 Lessor.- CITY essor:CITY OF NEWPORT � By. THOMA6 C. EDWARDS, Mayor Dated: J ary , 1998 APPROVED AS TO FORM AND CONTENT Dated: January , 1998 f:\cat\kelli\misc\robin\BM Iamend mt. doc In Lessee BASIN AA�INE, INC. pre &Idris r� By: //�--- ROBIN L CLAUSON Assistant City Attorney for CITY OF NEWPORT BEACH j SB4�4633 E ���- Y � BGL3o4 yGC/•,/T 865/if_/ N �' � �� � 0 j • o � 2G. GG' - . � ,� ' � ( 534.35 24 E ^�--- TO !1. 00 I' �'it/89�0 /.9¢.63 [l.S. UL!l.�G-�DTiiP.r = -4 O !29.63' _ L1.5. E L/NE !26.63 t� a i U. S. L /NE L/.8. !jl1G•�/�EDO G/N. ,C iTY OF NEWPORT BEACH PUBLIC WORKS DEPARTMENT BOUT DRAWN APPROVED DATE 5 - PUBLIC WORKS DIRECTOR R.E. NO. DRAWING BALBOA YACHT BASIN BOAT YARD LEASE PARCEL 1 A parcel of land situated in the Northwest quarter of Section 35, Township 6 South, Range 10 West, S.B.B. & M., Orange County, California, more particularly described as follows: Beginning at a point in the U. S. Bulkhead line between Station No.� -200 and Station No. 10.1, -as shown 'upon 'a map entitled "Harbor Lines, Newport -Bay Harbor, California," approved May -2nd, 1936, by the -Secretary 'of" War, and on- fi 16 i n the offi ce- of the U. S. District Engineer at Los Angeles, California, said point of begin- nning- being -S X89°""05-' 58 E.:-784'.25 - feet 'fr*om said Bulkhead- Station No. 200; running thence'N0° 54'"'02" E 425.10 feet to a point in `the Northerl-y li-ne of that' -certain parcel of -land conveyed to the City of Newport Beach -by the"Irvine Company, as described in deed recorded Septembe-r"25th, 1929, in Book 306; Page 375 of Official Records of Orange County, California; thence S 84° 46' 33" East; 772-.15. feet -to -the Northeasterly corner of the last mentioned E parcel of land, -said Northeasterly corner being the True Point of Beginning; thence S 0° 54' 02" W 350.07 feet thence S 34° 35' 24" E 20.66 feet to a point in said U. S. Bulkhead line between Station No. 200 and Station No. 101, said point hereinafter referred to as point "A"; thence'N 89° 05' 58" W 134.63 feet along said bulkhead line; thence N 0° 54' 02" E 160.00 feet; thence S 89° 05' 58" E 60.50 feet; thence N 00 54' 02" E 211.58 feet to said Northerly line of that certain parcel of land as described in the deed recorded in Book 306, Page 375 of Official Records; thence S 84° 46' 33" E 62.33 feet along said Northerly line to the True Point of Beginning. 2/27/85 BALBOA YACHT BASIN BOAT YARD LEASE PARCEL 2 A parcel of land situated in the Northwest quarter of Section 35, Township 6 South, Range 10 West, S.B.B. & M, Orange County, California, more particularly described as follows: Beginning at point "A" as described in Parcel 1 above; thence S 00 54' 02" W 70.00 feet. to a line parallel with and 70.00 feet measured at right angles from said U.S. Bulkhead line as described in Parcel 1 above; thence N 89' 05' 58" W 129.53 feet along said parallel line; thence N 00 54' 02" E 70.00 feet to said Bulkhead line; thence S 89° 05' 58" E 129:.63 feet along said Bulkhead line to the Point of Beginning. I 2/27/85 Recording Requested by and when Recorded Mail To: Bank of America NT & SA 41220 26991 Crown Valley Parkway Mission Viejo, Ca. 92691 Space above this line for Recorder's use CONSENT TO ENCUMBRANCE OF LEASE AND AMENDMENT TO LEASE Basin Marine, Inc , is Lessee ( the "Lessee") of an Agreement of Lease dated March 5, 1985 , the ("Lease"), recorded of a Memorandum of which was recorded on , in book , page , of Official Records of County, pertaining to the property described as Exhibit " hereto (the "Lease Property") from City of Newport Beach , as Lessor (the "Lessor"). 1. The Lessor (a) consents to the Lessee's encumbrance of his Leasehold interest by deed of trust (the "Deed of Trust") in favor of Bank of America NT & SA ( the "Encumbrancer") to secure a note in the principal sum of $403,338.00 , and other obl igations set forth in the Deed of Trust which is recorded concurrently herewith in the Official Records of orange County and (b) agrees that the terms hereof shall govern over any provision inconsistent herewith in the Lease. 2. Lessor affirms that as of the date of this Consent, the Lease is in full force and effect and no default or ground for termination thereof exists. 3. An assignment of the Lease of one of the below listed types, made in connection with the Deed of Trust, may be made without the consent of Lessor: (a) Assignment by judicial or non -judicial foreclosure under the Deed of Trust, or assignment in lieu of foreclosure; and (b) Assignment by the Encumbrancer, after having obtained an assignment described in (a) above, anyLease transferred under the provisions of this paragraph shall be liable to perform the obligaion of the Lessee under the Lease only so long as'the transferee holds title to the Leasehold. Any subsequent transfer of the Leasehold may be made only with such written consent of the Lessor and subject to the conditions relating thereto as are set forth in the Lease. 4. Upon and immediately after the recording of the Deed of Trust, Lessee, at Lessee's expense, shall cause to be recorded in the Office of the Recorder of said County, a duly executed and acknowledged written request for a copy to the Lessor of any notice of default and of any notice of sale under the Deed of Trust as provided by the Statutes of the State of California relating thereto. 5. The Lessor may not terminate the Lease becuase of any default or breach thereunder on the part of the Lessee if the Encumbrancer, or the trustee under the Deed of Trust, within 90 days after service of written notice on the Encumbrancer by the Lessor of Lessor's intension so to terminate: (1) Cures the default or breach if it can be cured by the payment or expenditure of money provided to be paid under the terms of the Lease, or if the default or breach is not so curable, commences, or causes the trustee under the Deed of Trust to Commence, and thereafter to pursue to completion, steps and proceedings to foreclose on the Leasehold covered by the Deed of Trust; and (2) Keeps and performs all of the convenants and conditions of the Lease requiring the payment or expenditure of money by the Lessee until such time as the leasehold is sold upon foreclosure pursuant to the Deed of Trust, or is released or conveyed thereunder, or is transferred upon judicial foreclosure. 6. Any notice to the Encumbrancer provided for in the preceeding paragraph may be given concurrently with or after the notice of default to Lessee, as provided in the Lease. 7. The terms hereof shall inure to the benefit of and be binding upon the parties, their successors and assigns. 8. Lessor is aware of, and consents to, the terms and purposes of the note secured by the Deed of Trust, and of any extensions or renewals thereof. In the foregoing Consent the masculine gender includes the feminine and neuter, and the singular number includes the plural, whenever the context so requires. Dated: / ® �`j LESSOR: Z;W7 M:M: City Attorney Date: ; r , Dated: ��f LESSEE: Basin Marine, Inc. n E. ftw, f-jairman of the Board Davies New, President ASSIGNUENT OF LEASE For value received, the uT rsigned Lessee hereby assigns Rank of AmaricA NT&SA#1220 Saddl ha k Valley M.O. MiS�ionV ,i2ogether with right of reassigt" :nt, all of the Lessee's right, title, and interest in and to that certain Lease dated March 5, 1985 , between the City of Newport RPach , as Lessor, and the undersigned, as Lessee, with regard to premises located at 829 Harbor Island Drive Newport Beach, Calif. 92660 This Assignment is made solely for the purpose of secur- ing the repayment of a loan from the Bank of America NT&SA Dated this 8th day of May , 19 e Inc DAV-fFU L. New, President STATE OF CALIFORNIA ) )ss COUNTY OF Orange ) On May 8, , 19 85 , before me, the undersigned, a Notary Public in and for said State, personally appeared* David L. New known to me to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged that he executed the same. WITNESS my hand and official seal. OFFICIAL SEAL a JANET GUTIERREZ Notary Public 6 E% NOTARY PUBLIC • CALIFORNIA ORANGE COUNTY ° LESSOR' S CONSENT TO ASSIGNMENT OF LEASE My comm. expires JUN , 1985 e essor, in that _�cggrtain Lease dated between e_V/TY e�,c 4rVJ; P/W7' L located at Yay o `4 R, hereby consents to the Ass and to said Lease to the _ as partial security for a , as essor, as Lessee, concerning certain 199,-3— , ..by and and %3,¢�ju business premises t by said Lessde of all its right, title, and interest in loan made to said Lessee, and to any reassignment by c540e _, in the event of default under the subject Lease or under the Note or other instruments of hypothecation evidencing said loan by said Lessee; provided, however, that so long as the has not entered into possession of the premises covered by said Lease for the purpose of operating a business, it shall not be liable for rent or any other obligations of said Lessee, and said Lessee shall remain liable for the rent and all such other obligations, and in the event of any default under subject Lease, said Lessor hereby agrees not to ter- minate the Lease or take any action to enforce any clai ith respect thereto without giving ,�C p,C f}yy� j ,g /, 7'-W54 at least s a ys prior written notice thereof, and the right to cure such default within said period. Lessor hereby waives his right of distrains against goods and property pledged as secur Dated this 2_ --day of 1� AS TO, FORM: GO Attorne Date: r Z STA1L ue CALIFORNIA ) ss COUNTY OF ) On , 19 before me, the undersigned, a Notary Public in and for said State, personally appeared known to me to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged that executed the same. WITNESS my hand and official seal. Notary Public RUDO 44 (6/80) BALBOA YACHT BASIN BOAT YARD LEASE PARCEL 1 A parcel of land situated in the Northwest quarter of Section 35, Township 6 South, Range 10 West, S.B.B. & M., Orange County, California, more particularly described as follows: Beginning at a point in the U. S. Bulkhead line between Station No. 200 and Station No. 101,'as shown'upon'a map entitled "Harbor Lines; Newport -Bay Harbor, California," approved May 2nd, 1936, 'by the Secretary of War, and on file in the office'of the U. S. District Engineer at Los Angeles, California, said point of begin- `ning being 'S 890 05' 58" E`784:25 feet 'from said Bulkhead Sta}iorE No. 200; running thence N 00 54*" 02" E 425.10 feet to a point in 'the Northerly line of that certain parcel of land conveyed to the City of Newport Beach by the Irvine Company, as described in deed recorded September -25th, 1929, in Book 306, Page 375 of Official Records of Orange County, California; thence S 84° 46' 33" East; 772.15 feet to the Northeasterly corner of the last mentioned parcel of land, said Northeasterly corner being the True Point of Beginning; thence S 00 54' 02" W 350.07 feet thence S 34° 35' 24" E 20.66 feet to a point in said U. S. Bulkhead line between Station No. 200 and Station No. 101, said point hereinafter referred to as point "A"; thence N 89° 05' 58" W 134.63 feet along said bulkhead line; thence N 0° 54' 02" E 160.00 feet; thence'S 89° 05' 58" E 60.50 feet; thence N 0' 54' 02" E 211.58 feet to said Northerly line of that certain parcel of land as described in the deed recorded in Book 306, Page 375 of Official Records; thence S 84° 46' 33" E 62.33 feet along said Northerly line to the True Point of Beginning. 2/27/85 BALtOA YACHT BASIN BOAT YARD LEASE PARCEL 2 A parcel of land situated in the Northwest quarter of Section 35, Township 6 South, Range 10 West, S.B.B. & M, Orange County, California, more particularly described as follows: Beginning at point "A" as described in Parcel 1 above; thence S 00 54' 02" W 70.00 feet to a line parallel with and 70.00 feet measured at right angles from said U.S. Bulkhead line as described in Parcel 1 above; thence N 890 05' 58" W 129.63 feet along said parallel line; thence N 0° 54' 02" E 70.00 feet to said Bulkhead line; thence .S 890 05' 58"�E 129.63 feet along said Bulkhead line to the Point of Beginning., 2/27/85 Submitted for Recordation By and Return to (Bank of America National Trust and Savings Association Branch Saddleback Valley Main Office#1220 Address 26991 Crown Valley Parkway City State Mission Viejo, California `ip L 92691 -� SPACE ABOVE THIS LINE FOR RECORDER'S USE CONSENT TO REMOVAL OF PERSONAL PROPERTY AFFIXED TO REAL PROPERTY WHEREAS, the undersigned has an interest either as owner, lessor, mortgage holder, trust deed holder or seller under a conditional contract of sale in the real property situated at 829 Harbor Island Drives,N, T ort Reach,_Ca— q,9660 -_ , County of Orange , State of California, legally described as: Refer to attached legal description whtch real property is hereinafter called "the Real Property"; WHEREAS, Basin Marine Tnr. hereinafter called "Debtor, in order to induce Bank of America NT&4A#1 920 , hereinafter called "Secured Party," to extend credit or financial accommodations to it, has or will execute a Security Agreement granting to Secured Party a security interest in and to the following described collateral: 7�f) furniture, equipment, inventory and accounts receivable. which collateral is hereinafter called "the Personal Property"; and WHEREAS, the Secured Party as a condition to extending credit or financial accommodations to Debtor requires the undersigned's consent to the removal of the Personal Property. NOW, THEREFORE, for a good and sufficient consideration, receipt of which is hereby acknowledged, and to induce Secured Party to extend credit or financial accommodations to Debtor, the undersigned agrees with the Secured Party as follows: 1. The Personal Property shall be deemed to be personal property and shall not be considered a part of the Real Property, regardless of whether or by what means it is or may become attached or affixed to the Real Property. 2. The undersigned has not and will not claim any interest in the Personal Property which is superior to that of Secured Party, and the undersigned hereby subordinates its interest in the Personal Property to the security interests which Secured Party now has or may hereafter acquire therein. 3. The undersigned consents to the Secured Party, its agents, employees and invitees entering upon the Real Property for the purpose of exercising any right Secured Party may have under the terms of any security agreement with Debtor or otherwise, and to remove the Personal Property. 4. In the event of a default by Debtor under its present or future agreements with Secured Party, and provided Secured Party is authorized to do so under its agreements with Debtor or has obtained Debtor's consent, the undersigned consents to Secured Party's entering upon the Real Property to do any or all of the following with respect to the Personal Property: assemble, have appraised, display, operate, maintain, remove, repair, prepare for public or private sale, exhibit, and sell. 5. In the event that Debtor fails to make any payment of rent to the undersigned, the undersigned shall notify Secured Party, and Secured Party shall have the right and license, at its discretion, to occupy the Real Property for the purposes described in Para- graph 4 above, for a period of up to ninety (90) days. Secured Party shall, in that event, pay the undersigned, periodically, a daily license fee equivalent to one -thirtieth (1130th) of the minimum monthly rental provided for in the lease agreement between the undersigned and Debtor, until Secured Party vacates the Real Property. Secured Party shall have seven (7) days from the time it receives notice from the undersigned to decide to exercise its right and license to occupy the Real Property. 6. Should the undersigned for any reason terminate or refuse the right of the Debtor to locate the Personal Property on the Real Property, the undersigned shall give to Secured Party not less than sixty (60) days advance written notice of the termination or refusal to renew. This agreement shall be interpreted under the laws of the State of California, an all inure to the ben of and be bindi�g upon the successors, heirs and assigns of the undersigned and Secured Party. -' IN WITNESS WHEREOF, the undersigned has executed this agreemen on the /orA day of 4tA19" , 19J State of California County of . On this ____ day of. -- a Notary Public in and for the INDIVIDUAL ACKNOWLEDGMENT -- - -- --- in the year------------_ before me, --- - - County, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name is subscribed to this instrument, and acknowledged that he (she or they) executed it. (SEAL) WITNESS my hand and official seal, Notary Public in and for the unty and State. TPL-331 8-83 My commission expires__------- ' --,19-.- C - z,�fo LEASE THIS LEASE, made this f day of �� , 19851 by and between the CITY OF NEWPORT BEACH, a Municipal Corporation and Charter City, (hereinafter "Lessor") and BASIN MARINE, INC., a California Corporation, (hereinafter "Lessee") is made with reference to the following: RECITALS A. WHEREAS, Lessor is the owner of certain harbor frontage and tidelands, together with certain abutting upland property conmonly known as the "Balboa Yacht Basin" located on Harbor Island Drive in the City of Newport Beach, County of Orange and State of California; and B. WHEREAS, on January 9, 1950, Lessor leased the Balboa Yacht Basin to J.A. Beek, et al. (Master Lease), which lease expires on December 31, 1987; and C. WHEREAS, on February 28, 1950, Beek sublet their interest in the Balboa Yacht Basin to Hugh W. Haley and Margaret E. Meisinger (Master Sublease), for a term consistent with the Master Lease; and D. WHEREAS, the Master Sublease of the Balboa Yacht Basin was assigned by Haley/Meisinger to the Irvine Company on August 9, 1971; and E. WHEREAS, on September 20, 1973, the Irvine Company leased to Basin Marine, Inc., a California Corporation, a portion of the Balboa Yacht Basin that included a marine hardware store and boat repair yard (Basin Marine Sublease); and F. WHEREAS, on July I, 1981, the Irvine Company assigned its interest in the Master Sublease to the City, and the Basin Marine Sublease, reserving a sublease interest in the premises subleased to the operators of the Galley Cafe, and the premises subleased to Finley G. Scott, the operator of the yacht brokerage business; and G. WHEREAS, Lessor is presently undertaking a major redevelopment of the Balboa Yacht Basin and Lessee wishes to incorporate in this project certain improvements that would allow Lessee to refurbish the shipyard and boat repair facilities that it currently operates; and H. WHEREAS, the Parties desire to enter into a new long-term lease that reflects the Parties' roles in redevelopment of the Balboa Yacht Basin, allow Lessee an opportunity to recover funds that it is required to contribute to the redevlopment of the site and permit Lessor to recover the fair rental value of the property subject to lease; and I. WHEREAS, Lessor, in 1982, and again in 1984, caused the property that is subject to this Lease to be appraised and the rents provided in this Lease reflect the appraisers opinion of the fair rental value of the property, given the current condition of the property, the restrictions on the use of the property, the improvements to be made to the property and the com-nitments of Lessor and Lessee with respect to those improve- ments; and J. WHEREAS, the uses to be made of the property that are subject to this Lease are consistent with provisions of the Local Coastal Plan and General Plan of the City of Newport Beach, and the terms and conditions in this Lease are consistent with the provisions of the City Charter and the ordinances of the City of Newport Beach; and K. WHEREAS, the terms and conditions of this Lease are consistent with provisions of the Master Lease and the Assignment made to the City by the Irvine Company; and L. WHEREAS, the uses to be made of the property sub- ject to this Lease are consistent with provisions of the Tideland Grant pursuant to which the City obtained title to the property. 2 NOW THEREFORE, THE PARTIES AGREE: I. LEASED PREMISES. In consideration of the rent to be paid and the covenants and conditions to be observed and performed by Lessee, Lessor does hereby lease to Lessee that certain property ("Leased Premises" or "Premises"), including all buildings and other improvements located on Premises, legally described in Exhibit "All 2. TERM. The term of this Lease shall be for a period of twenty five (25) years, commencing July I, 1985, or on the date of the City's completion of "Improvements to Leased Premises" as defined in Section 4 of this Lease, which ever occurs first, and ending on or before June 30, 2010, depending on commencement date, subject, however, to earlier termination as hereinafter provided in Section 21. 3. RENTAL. (a) Minimum guaranteed rental. Lessee agrees to pay Lessor a guaranteed minimum rental for the use and occupancy of the Leased Premises. The minimum, guaranteed rental shall increase during the first four years of this Lease, and shall be periodically adjusted as provided in subsection b. The minimum guaranteed rent for the first four years shall be as follows: i. First Year $33,000/year payable @ 2,750/month ii. Second Year 36,000/year payable @3,000/month iii. Third Year 40,000/year payable @3,333/month iv. Fourth Year 45,000/year payable @3,750/month The guaranteed, minimum rental shall be paid monthly and shall be due on or before the 10th day of each month. (b) Adjustments to Minimum Guarenteed Rental. i. The guaranteed, minimum rental shall be 3 adjusted on the eighth anniversary of this Lease and every four years thereafter. (Adjustment Dates) On each adjustment date the then current minimum guaranteed rent will be increased or decreased to reflect the total percentage increase or decrease in the U.S. Department of Labor Consumer Price Index, all items, Los Angeles - Long Beach area, using the index figure as of 1985 as the basis for calculating increases or decreases. In the event that the Department of Labor no longer publishes the Consumer Price Index, then a similar index shall be agreed upon. ii. In addition to the rights to adjust the minimum guaranteed rental as set forth in Subparagraph (b)i, Lessor reserves the right to increase the minimum guaranteed rental and/or the percentage rental in the event that such increases are, in the opinion of a qualified appraiser, necessary to ensure that the rents due under this Lease accurately reflect the fair market value of the Leased Premises. However, any appraisal shall evaluate the fair market value of the Leased Premises assuming that the primary use of the property is restricted to that of a boat repair facility for the sale of new and used boats, marine equipment and marine hardware permitted incidental to the primary use provided in this Lease. Lessor also reserves the right to conduct such appraisal at anytime provided, however, rent shall be adjusted pursuant to the appraisal, no more than every 10 years from the date of this Lease. In the event the guaranteed minimum rental is increased, pursuant to provisions of this subparagraph, the adjustments to guaranteed minimum rental provided for in Subsection (b)i shall occur every four years after such increase, and the basis for calculating increases pursuant to Subsection (b)i shall be the index figure as of the date of the increase pursuant to the appraisal. (c) Percentage Rental In addition to the minimum guaranteed rental 4 hereinabove provided, Lessee shall pay to Lessor at the time and in the manner herein specified, a percentage rental in a sum equal to the total of the following percentages of gross sales (as further defined in Paragraph 3(d)) made during each calendar year of the term of this Lease, less the amount of the minimum guaranteed rental previously paid by Lessee during said calendar year: i. Four percent (4%) of Lessee's gross receipts from labor, service and materials in the operation of the shipyard and boat repair facility; ii. Ten percent (10%) of Lessee's net income from outside labor; iii. Five percent (5%) of Lessee's gross on boat equipment and/or hardware sales, exclusive of internal sales to Lessee's shipyard and boat repair business. Within 20 days after the end of each calendar month of the term hereof, commencing with the first installment of minimum guaranteed rental payable under subparagraph (a) above, Lessee shall furnish to Lessor a statement, in writing, certified by Lessee to be correct, showing the total gross sales made in, upon or from the Leased Premises during the preceding calendar month and on the first day of that calendar month next succeeding, Lessee shall pay to Lessor the percentage rent due. Within 30 days after the end of each calendar year of the term hereof, Lessee shall furnish to Lessor a statement, in writing, certified by Lessee to be correct, showing the total gross sales by months made in, upon or from the Leased Premises during the preceding calendar year. At that time, any adjustment necessary shall be made between Lessor and Lessee so the percentage rental, although payable monthly, shall be computed on an annual basis. Any overpayment by Lessee upon such adjustment 5 shall be credited by Lessor to the monthly installments of the minimum guaranteed rental falling due thereafter, and any under- payment by Lessee shall be paid to Lessor with the installment of minimum guaranteed rental due immediately after notice of such underpayment to Lessee. (d) Gross Sales Defined The term gross sales of Lessee, as used in this Lease, is defined to be the gross selling price of all merchandise or services sold in or from the Leased Premises by Lessee, its subtenants, licensees and concessionaires, whether for cash or on credit, as set forth in Paragraphs 3(c)i, 3(c)ii, as well as the net income from outside labor as set forth in Paragraph 3(c)iii, excluding therefrom the following: i. The selling price of all merchandise returned by customers and accepted for full credit, or the amount of discounts and allowances made thereon; ii. Goods returned to sources or transferred to another store or warehouse owed by or affiliated with Lessee; iii. Sums and credits received in settlement of claims for loss of, or damage to, merchandise; iv. The price allowed on all merchandise traded in by customers for credit, or the amount of credit for discounts and allowances made in lieu of acceptance thereof; V. Cash refunds made, or other credits given, for labor or materials previously sold to customers in the ordinary course of business but, this exclusion shall not include any amount paid, or payable, for 0 trading stamps; vi. Sales taxes, luxury taxes, consumer's excise taxes, gross receipts' taxes and other similar taxes now or hereafter imposed upon the sale of merchandise or services but, only if collected separately from the selling price of merchandise or services and collected from customers; vii. The proceeds of sale of Lessee's trade fixtures or business equipment. All sales originating at the Leased Premises shall be considered as made and completed therein, even though bookkeeping and collection of the account may be transferred to another place, and even though actual filling of the sale or ser- vice order and actual delivery of the merchandise may be made from a place other than the Leased Premises. (e) Records Lessee shall keep, maintain and cause each of its sublessees and concessionaires, if any, to keep and maintain, on the Leased Premises, full, complete and accurate books, records and accounts of all daily gross sales, both for cash and on credit. Lessor and its agents and employees shall have the right, at any and all times during regular business hours, to examine and inspect all of said books, records and accounts, inluding all sales tax reports and Federal and State Income Tax returns pertaining to that business conducted in, upon or from the Leased Premises for the purpose of investigating and verifying the accuracy of any statement of gross sales provided for in subparagraph (c). If the inspection discloses that Lessee has understated gross sales or rent payable because of gross sales, by two percent (2%) or more, then Lessee shall promptly pay to Lessor the cost of such inspection and the amount of any II deficiency in rent. Any information gained by Lessor from such statements or inspections shall be confidential and shall not be disclosed, except to carry out the purposes of this Agreement; provided, however, Lessor shall be permitted to divulge such information in connection with the sale, exchange, transfer or financing of the Leased Premises by Lessor. (f) Late Payment Without waiving any right or remedy that Lessor may have because of a default by Lessee in the payment of rent required by this Lease, if Lessee shall fail to make any payment to Lessor required by this Lease, the sum due shall bear interest at the rate of ten percent (10%) per annum from the date due and, in addition: i. For each such late payment Lessee shall pay to Lessor a service charge in the amount of Fifty dollars ($50.00); and ii. Following each second, consecutive late payment of rent, Lessor shall have the option of requiring payment in advance, of three (3) months' rent. (g) Form of Payment All payments hereunder shall be paid in lawful currency of the United States. 4. IMPROVEMENTS TO LEASED PREMISES (a) Lessor and Lessee acknowledge that Lessor is in the process of constructing major improvements to the Balboa Yacht Basin. These improvements include, but are not necessarily limited to, construction or repair of bulkheads, installation of new piers, docks and floats, and construction of walls and related facilities. The existing shipyard is in need of certain repairs and improvements some of which can be constructed as part of the renovation of the Balboa Yacht Basin. The repairs and improvements to the Balboa Yacht Basin shipyard can be completed faster and more economically if incorporated into City's contemplated redevelopment project. In consideration of City's comritment to lease the premises for the stated rent and term, Lessee agrees to pay Lessor actual costs incurred to construct all waterside improvements, the concrete sheetpile bulkhead and related work necessary to enclose the existing ways, upland of the waterside improvements and Fifty Percent (50%) of the cost of the blockwall fence along the westerly property line, together with a contract administration fee of Five Percent (5%) of the actual costs. Lessee shall pay no more than One Hundred Sixty Five Thousand dollars ($165,000) (plus Five Percent (5%) administration fee) for watersite improvements and no more than Twenty Nine Thousand, One Hundred Eighty Nine dollars, seventy cents ($29,189.70) (plus Five Percent (5%) administration fee) for other improvements. Lessee shall pay Fifty Percent (50%) of costs and fees concurrently upon execution of this Lease, the remainder due within 30 days after receipt of notice that improvements have been completed. (b) Improvements to the Leased Premises shall be in accordance with the plans and specifications attached as Exhibit "C". Lessee shall provide 14 onsite parking spaces to satisfy Newport Beach Muncipal Code requirements. To ensure that Lessee's employees and customers park on the Leased Premises and not in Lessor's area west of the property, Lessee agrees to the following: i. Ensure that the onsite parking area is visible to customers of Lessee, the fence to be built along the westerly property line of the Leased Premises and adjacent to the public parking area shall be of an open design which will preserve visibility of the parking area. ii. Onsite parking spaces shall be provided as depicted on Exhibit 11E" and shall remain available for parking at all times; iii. No boats, material or equipment shall be stored in the area designated for onsite parking or access to such parking; iv. Lessee shall erect and maintain signs which advise customers and patrons that parking is available within the Leased Premises. The number, size, text and location of the signs shall be determined and approved by the Marine Director; V. Delivery of material or merchandise to the Leased Premises shall be made in a manner which does not block access to, or otherwise interfere with, the area designated for onsite parking; vi. Access to the hardware store shall be provided by means of a door adjacent to the parking area, and this doorway shall be designated as access in a manner to be determined by the Marine Director; vii. Lessee shall advise all employees, in writing, that they are to park their vehicles on the Leased Premises, and that failure to do so could result in disciplinary action. Lessee shall provide proof of such notification to the Marine Director; viii.Lessee agrees to make modifications to the parking plan if, in the opinion of the Marine Director, the modifications or changes will encourage customers to park E onsite and will not impair the security of the boatyard, shop or hardware store. 5. SERVICES FOR LESSOR Lessee, in addition to the obligation to pay rent, shall perform the other terms and conditions of this Lease and shall, at Lessee's sole expense, do the following: (a) Haul out, annually, up to four of the vessels owned and maintained by the Newport Beach Marine Department, of a size capable of being handled by Lessee's equipment provided, however, the vessels shall be hauled out no more than twice a year; (b) Transport the vessels to an area on the Leased Premises suitable for the purposes of repairs or maintenance; (c) Allow the vessels to remain on the Leased Premises for a period of two weeks im-nediately after haul -out; (d) Permit access to the vessels by employees or representatives of Lessor for the purpose of repairs and maintenance. Lessor shall give Lessee 30 days' written notice prior to the date on which the vessels are to be hauled -out. 6. ALTERATIONS: (a) Non -Structural Alterations Lessee shall have the right to make, at its sole expense, such non-structural changes, alterations, improve- ments and additions in and to the interior of the buildings, or to the piers, slips, floats and ramps on Leased Premises, and Lessee may install therein such trade fixtures and equipment as it may deem advisable for the conduct of its business. (b) Structural Alterations Lessee shall not make any structural changes, alterations or additons in or to the Leased Premises or the exterior walls or roof of the buildings, or to the piers, slips, floats and ramps on the Leased Premises without first submitting written plans and specificatons of such changes, alterations or additions to Lessor, and obtaining Lessor's written approval thereof. Lessee shall make, at its expense, such changes, alterations or additions in and to the Leased Premises that may be required by any public laws or ordinances from time to time applicable to Lessee's use and occupancy of the Leased Premises. (c) Conformance with Law All changes, alterations or additions made in or to said Premises shall conform to applicable regulations, statutes and ordinances. 7. REPAIRS: Except for the bulkheads serving the Leased Premises, Lessee shall also, at its sole cost and expense, at all times during the term hereof, keep and maintain the Leased Premises and every portion thereof including, but not limited to, store fronts, entrances and exits, plate glass, glazing and skylights, plumbing and other fixtures, equipment, interior walls, ceilings and floors, piers, slips, floats and ramps, in good order, condition and repair, and Lessee shall comply with all laws, ordinances and regulations applicable thereto. All glass, both exterior and interior, is at the sole risk of Lessee and any glass broken or damaged shall be promply replaced at Lessee's sole cost and expense with glass of the some kind, size and quality. Lessee agrees that Lessor may enter upon the Leased Premises and make any necessary repairs to the Leased Premises and perform any work therein which, (1) may be necessary to comply with any laws, ordinances, rules or regulations of any public entity; (2) Lessee is obligated to make under the terms of this Lease; or (3) Lessor may deem necessary to prevent waste or deterioraton of the Leased Premises if Lessee does not make, or cause such work to be performed promptly after receipt of written A demand therefor from the Lessor. Nothing herein contained shall imply any duty on the part of Lessor to do any work which Lessee may be required to do, nor shall it constitute a waiver of Lessee's default in failing to do the some. No exercise by Lessor of any rights herein reserved shall entitle Lessee to any damage for any injury or inconvenience occasioned thereby, nor to any abatement of rent; however, such repairs, once com-nenced , shall be completed in a timely manner. In the event that Lessor makes, or causes to be made, any repairs which, under the terms of this Lease, it is Lessee's obligation to make, Lessee shall, upon demand, pay to Lessor the costs of such repairs, which amount shall be due and payable upon such demand and shall bear interest from the date of such demand until fully paid at the rate of Ten Percent (10%) per annum. Lessor reserves the right at any time, and from time to time, without the some constituting an actual or constructive eviction and without incurring any liability to Lessee therefor or otherwise affecting Lessee's obligations under this Lease, to make such changes, alterations, additions, improvements, repairs or replacements in or to the Leased Premises, or the street entrances. Nothing contained in this paragraph shall be deemed to relieve Lessee of any duty, obligation or liability of Lessee with respect to making any repair, replacement or improvement or complying with any law, order or requirement of any government or other authority and nothing contained in this paragraph shall be deemed or construed to impose upon Lessor any obligation, responsibility or liability whatsoever, for the cost of, supervision or repair of the Leased Premises or any part thereof other than as otherwise provided in this Lease. 8. TAXES. (a) Lessor shall pay and discharge any real property taxes and general or special assessments which, during the term of this Lease may be levied upon or assessed against the 13 (b) During the term hereof Lessee shall pay, prior to deliquency, any and all taxes assessed against Lessee's possessory interests under this Lease, all taxes assessed against and levied upon fixtures, furnishings, equipment or improvements, such as piers, floats and structures, and all other personal property of Lessee located on the Leased Premises. In the event any or all of Lessee's fixtures, furnishings, equipment and other personal property shall be assessed and taxed with the taxes or assessments payable by Lessor, Lessee shall pay to Lessor its share of such taxes within ten (10) days after delivery to Lessee by Lessor of a statement, in writing, setting forth the amount of tax applicable to Lessee's property. 9. USE OF THE PREMISES (a) During the term hereof, Lessee shall use and occupy the Leased Premises principally for the operation of a shipyard/boat repair facility and, at Lessee's option, the sale of new or used boats, marine equipment and hardware, all incidental to the primary use and for no other use or purpose, except with the prior written consent of Lessor. (b) Lessee shall, during the term of this Lease, unless prevented by conditions beyond Lessee's control, conduct business in a manner calculated to attract the maximum volume of trader patronage. Lessee shall, at a minimum, keep Premises open for the conduct of business during normal business hours, Monday through Friday, 8:00 a.m. to 4:30 p.m. (c) Lessee shall not com-nit, or permit the commission of, any acts on Leased Premises that would cause the cancellation of any fire, liability or other insurance policy insuring either the Premises or improvements on the Premises. Lessee shall, at its own cost and expense, comply with any and all requirements imposed by the insurance companies that carry the polices described above. ILA (d) Lessee shall not deposit, or permit the deposit by others, of any waste on the Premises; Lessee shall not maintain any nuisance, as defined in Section 3479 of the California Civil Code, on the Leased Premises; Lessee shall not unreasonably interfere with the rights of other tenants in the development, or nearby residents, and to that end shall attempt to have all merchandise delivered to the Premises at a reasonable hour and maintain reasonable hours of business; and, Lessee shall not use or permit the use of the Premises for any unlawful purpose. (e) Lessee, at its sole cost and expense shall, at all times, comply with all governmental rules, regulations, ordinances, statutes and laws now in force, or which may here- after be enforced pertaining to the Leased Premises. (f) Occupancy of the Leased Premises after the date of conTnencement of the term hereof shall constitute the acceptance by Lessee of the safety and good order and condition thereof. 10. UTILITIES Lessee shall pay for all water, power and sewer services; provided, however, that Lessor shall make water, electrical, gas and sewer service available to the property line of the Leased Premises. 11. LIABILITY INSURANCE (a) Lessee shall, at its cost and expense, at all times during the term of this Lease, maintain in force, for the joint benefit of Lessor and Lessee, a broad form of comprehen- sive coverage policy of public liability insurance by the terms of which Lessor and Lessee are named as insured and are indemni- fied against liablility for damage or injury to the property or person (including death) of any Lessee, or invitee of Lessee, or any other person entering upon or using the Leased Premises, or any structure thereon, or any part thereof, and arising from the 15 use and occupancy thereof. Such insurance policy or policies shall be maintained on the minimum basis of Five Hundred Thousand dollars ($500,000) for damage of property, and One Million dollars ($1,000,000) for bodily injury to or death of one person and One Million dollars ($1,000,000) for bodily injury or death in any one accident. Such insurance policy or policies shall be stated to be primary and non-contributing with any insurance which may be carried by Lessor. Lessee shall deliver to Lessor the certificate of each insurance carrier as to each such insurance policy within ten (10) days after corrmencement of the term hereof, and the policy shall provide Lessor receive written notice prior to the expiration or cancellation of each such policy. (b) Lessee shall, at its sole cost and expense, at all times during the term of this Lease, keep the property and improvements thereon insured against loss or damage by fire, wind, rain and similar risks in an amount not less than One Hundred Percent (100%) of the full replacement cost. Lessor shall be named beneficiary under such policies. Lessee shall deliver to Lessor the certificate of each insurance carrier as to each such insurance policy within ten (10) days after the corrmencement of the term hereof and the policy shall provide the Lessor receive written notice prior to the expiration or cancellation of each such policy. 12. RECONSTRUCTION (a) In the event the buildings on the Leased Premises are damaged by fire, or perils covered by extended coverage insurance, Lessee shall, in the event of either total or partial destruction, within a period of thirty (30) days thereafter, com-nence repair, reconstruction and restoration of said buildings and pursue the some diligently to completion. Lessee shall not be entitled to any abatement in rent, nor shall Lessee be entitled to any compensation of any kind for loss of In use of the Leased Premises, or any part thereof, or by reason of any inconvenience caused by repair or reconstruction. In the event of damage or destruction of the bulkheads required for the support of the surface of the Leased Premises, Lessee shall be entitled to an abatement of rent proportionate to the loss of beneficial use of the Leased Premises during the period of reconstruction and restoration of such bulkheads. 13. R 1 GI-iT OF ENTRY (a) Lessee shall permit Lessor and its agents to enter upon the Leased Premises at all reasonable times for the purpose of inspecting the same and for the purpose of posting any notice deemed necessary by Lessor for the protection of its interest, and for making any repairs or alterations provided for in this Lease. (b) Lessor or its agents may, during the progress of any work on the Leased Premises as provided for in this Lease, keep and store upon the Leased Premises all necessary materials, tools and equipment and Lessor shall not, in any such event, be liable for inconvenience, annoyance, disturbance, loss of busi- ness or other damage to Lessee and the obligations of Lessee under this Lease shall not be affected except as provided other- wise in this Lease, however, Lessor and its agents shall make such use of the Leased Premises in such a manner as to minimize such inconvenience, disturbance, loss of business or other damage to Lessee. 14. SIGNS Lessee shall have the right to erect and maintain suitable identification signs upon the premises and other signs customary to the nature of the business conducted by the Lessee upon the Leased Premises; however, Lessee shall not erect or maintain, or permit to be erected or maintained, any sign, marquee or awning on said Premises without prior, written consent of Lessor. Lessor shall have the right to approve the type and 17 size, location and color of all signs which Lessee desires to use or place in or upon said Premises. Lessee shall affix and maintain upon the glass panes and supports of the show windows within twelve inches (1211) of any windows, or upon the exterior walls of the building, only such signs, advertising placards, names, insignia, trademarks and descriptive material as shall have first received written approval of Lessor as to size, type, color, location, copy, nature and display qualities. Lessor shall not unreasonably withhold such consent. Lessor's failure to object to any such particular sign or display within five (5) business days of submission of same by Lessee to Lessor shall be deemed approval thereof. 15. SALES RESTRICTIONS Lessee shall not display, sell or store merchandise outside the defined exterior walls and permanent doorways of said Premises, and no sale by auction in, upon or from said Premises, whether said auction be voluntary, involuntary, pursuant to any assignment for benefit of creditors or pursuant to any bankruptcy or other solvency proceedings, shall be conducted except such auctions that may be conducted by officers of a court with respect to any vessels in custody of Lessee. 16. ASSIGNMENTS AND SUBLETTING (a) Lessee may not transfer or assign this Lease, or any right or interest hereunder, or sublet said Premises, or any part thereof, until first obtaining prior written consent and approval of Lessor; provided, Lessor shall not unreasonably withhold such consent. Lessor hereby reserves the right to condition any such approval upon Lessor's determination that the assignee or sublessee is (i) as financially and morally responsible as Lessee; and (ii) has demonstrated an ability to operate a similar business generating a sales volume sufficient to produce percentage rentals (as defined in Section 3) in an amount not less than the average of such rentals generated by Lessee during the two calendar years immediately preceding the Lessee's request for approval. No transfer on assignment, whether voluntary or involuntary, by operation of law under legal process or proceedings, by receivership, in bankruptcy or other- wise, and no subletting, shall be valid or effective without Lessor's prior written consent and approval. Should Lessee attempt to make, or suffer to be made, any such transfer, assign- ment or subletting, except as aforesaid, or should any of Lessee's rights under this Lease be sold or otherwise transferred by or under court order or legal process or otherwise, or should Lessee be adjudged insolvent or bankrupt then, and in any of the foregoing, even as Lessor may, at its option, terminate this Lease, forthwith, by written notice thereof to Lessee. Should Lessor consent to any such transfer, assignment or subletting, such consent shall not constitute a waiver of any of the restrictions of this Article and the same shall apply to each successive transfer, assignment or subletting hereunder, if any. (b) If Lessee hereunder is a corporation, any unincorporated association or partnership, the transfer, assign- ment or hypothecation of any stock or interest in such corporation, association or partnership, in the aggregate in excess of Twenty -Five Percent (25%) shall be deemed an assignment within the meaning and provisions of this Article; provided, how- ever, a transfer or assignment of any such stock or interest by a shareholder or member to a spouse, children or grandchildren is excepted from the foregoing provision. (c) If Lessor consents to an assignment or transfer by Lessee of all or a portion of Lessee's interest under this Lease, Lessee shall pay, or cause to be paid, a transfer fee of One Hundred dollars ($100.00); provided, however, that such transfer fee shall not be payable upon Lessor's consent to a transfer or assignment of Lessee's interest hereunder as security for a loan. WA (d) It is contemplated by the Parties that Lessee will be required to borrow substantial monies for the purpose of reimbursing Lessor for improvements to the Leased Premises and obtaining equipment necessary to operate a shipyard/boat repair facility. Lessor shall consent to Lessee's encumbrance of the leasehold by deed of trust in favor of a lender to be designated by Lessee to secure a note on a principal sum necessary for such purposes. A typical consent to such encumbrance is attached as Exhibit "D" to this Lease. 17. LESSOR'S NONLIABILITY Lessor shall not be liable for any loss or damage to the goods, wares, merchandise and other property of Lessee in, upon or about the Leased Premises, or for any injury to the person (including death) of Lessee or its employees, agents, sublessees or invitees or other persons caused by any use thereof, or arising from any accident or fire or other casualty thereon or from any other cause whatsoever, nor shall Lessor be liable for any such loss, damage or injury occurring anywhere in the area known as the Balboa Yacht Basin and caused by the act or neglect of Lessee, its agents or employees. Lessee hereby waives, on its behalf, all claims against Lessor for any such loss or injury and hereby agrees to indemnify, defend and save Lessor harmless from all liability for any such loss, damage or injury and in the event action is brought against Lessor on account of such loss, damage or liability, and Lessor elects not to accept Lessee's proffered defense of such action, Lessee shall nevertheless pay the cost of Lessor's reasonable attorneys' fees incurred in connection therewith. The provisions of this paragraph shall not apply with respect to any loss, damage or injury occasioned by the willful or negligent acts, conduct or omissions of the Lessor, its agents, employees and servants. 18. LIENS Lessee shall not permit to be enforced against said 20 Premises, or any part thereof, any mechanics', materialman's, contractors' or other liens arising from, or any claims for damages growing out of, any work or repair or alteration (except from the actions of Lessor), and Lessee shall pay or cause to be Paid all of said liens and claims before any action is brought to enforce the some against Lessor or the Leased Premises, or shall adequately indemnify Lessor and the Leased Premises by payment bonds as provided for in the laws of the State of California. Lessee agrees to indemnify and hold Lessor and the Leased Premises free and harmless from all liability for any and all such liens and claims and all costs and expenses in connection therewith. Lessee shall give Lessor notice in writing before correncing construction of any kind on the Premises so that Lessor may post notices of non -responsibility. 19. LESSOR PAYING CLAIMS Should Lessee fail to pay and discharge, when due and payable, any tax or assessment, or any premium or other charge in connection with insurance policy or policies which Lessee is obligated to pay, or any lien or claim for labor or material employed or used in, or any claim for damages arising out of the repair, alterations, maintenance and use of the Leased Premises, as provided in this Lease, after ten (10) days' written notice from Lessor, then Lessor may, at its option and without waiving or releasing Lessee from any of Lessee's obligations hereunder, pay any such tax, assessment, lien, claim insurance premium or charge, or settle or discharge any action therefor or satisfy any judgment thereon. All costs, expenses and other sums incurred or paid by Lessor in connection therewith, together with interest, at the rate of Ten Percent (10%) per annum, on such costs, expenses and sums from the date incurred or paid by Lessor, shall be deemed to be rent and shall be paid by Lessee with and at the some time as the next installment of rent is due. 20. ATTORNEY'S FEES 21 In the event that any action shall be instituted by either of the Parties hereto for the enforcement of any of its rights or remedies in and under this Lease, the Party in whose favor judgment shall be rendered therein shall be entitled to recover from the other Party all costs incurred by said prevailing party in said action, including reasonable attorney's fees to be fixed by the court therein. 21. DEFAULT/BREACH The occurrence of any of the following shall constitute a material default and breach of this Lease by Lessee: (a) Any failure by Lessee to pay rent, or make any other payment required by this Lease, where such failures continue for thirty days after written notice thereof; Lessee; (b) The abandonment or vacation of the Premises by (c) The failure by Lessee to perform any other provision of this Lease, where such failure continues for 30 days, after written notice; provided, however, if the nature of the default is such that it cannot reasonably be cured within the 30 day period, Lessee shall not be in default if Lessee, within the thirty day period, begins to cure the default and deligently pursues correction until complete; (d) The attachment, execution or other judicial seizures of substantially all of Lessee's assets located on the Premises; if Lessee does not diligently pursue satisfaction or discharge and accomplish same within a reasonable time, the making by Lessee of any general assignment for benefit of creditors; the filing by or against Lessee of a petition to have Lessee adjudged a bankrupt or petition for reorganization or arrangement of any law relating to bankruptcy; or the appointment of a trustee or receiver to take possession of substantially all of Lessee's assests. 22. REMEDIES In the event of any default by Lessee as described in Paragraph 21 and in addition to any other remedies available 22 to Lessor, Lessor shall have the immediate option to: (a) Terminate this Lease by giving written notice of its intention to terminate and, may, thereafter, recover all amounts necessary to compensate Lessor for detriment caused by Lessee's failure to perform its obligations under this Lease; or (b) Continue this Lease in effect, by not terminating Lessee's rights of possession, in which event Lessor shall be entitled to enforce all of its rights and remedies under this Lease, including the right to recover the rent specified in this Lease as soon as it becomes due; (c) In the event that Lessor shall exercise its option to terminate this Lease, Lessor shall also have the right to re-enter and regain possession of the Premises in the manner provided by the Laws of Unlawful Detainer in the State of California then in effect. 23. REMOVAL Upon expiration of the term of this Lease, or upon any earlier termination of this Lease, Lessee shall quit and surrender possession of the Leased Premises to Lessor in the same condition as upon delivery of possession to Lessee, reasonable wear and tear excepted. Before surrendering possession of the Leased Premises Lessee shall, without expense to Lessor remove, or cause to be removed from the Leased Premises all signs, furninshings, equipment, trade fixtures, merchandise and other personal property installed or placed therein, and all debris and rubbish, and Lessee shall repair all damage to the Leased Premises resulting from such removal. If Lessee fails to remove any of its signs, furnishings, equipment, trade fixtures, merchandise or other personal property with thirty (30) days after the expiration or termination of this Lease then, Lessor may, at its sole option, (1) deem any or all of such items abandoned and the sole property of Lessor; or (2) remove any or all of such items and dispose of same in any manner, or store same for Lessee, in which event the expense of such dispositon or storage shall be borne by Lessee and shall be immediately due and 23 Payable. 24. SUBORDINATION This Lease shall, without further act on the part of Lessee, at the option of Lessor, be subject and subordinate any loan, lien, mortto gage.9 deed of trust or other encumbrance which may now exist upon or which may hereafter be Lessor u on Placed by P , the Leased Premises. Lessee covenants and agrees that it will execute additional subordination agreement effect at any time hereafter u s to such Don the request of Lessor without compensation being made therefor; provided, that an encumbrancer relying on such additional agreementsY lienor or with Lessee that this Lease shall remain in fu w►II covenant ►n t effect, and Lessee shall not be disturbed II force and foreclosure so long as Lessee is not in d he event of sale or However, if Lessor so elects, this Le default hereunder. Lease shall be deemed, prior in lien to any mortgages deed of trust or other encumbrCe or including the Leased Premises, regardless of date ofarupon and Lessee will execute a statement in ecording writing to such effect at Lessor's request. 25. MASTER LEASE PAYMENTS Lessor shall pay all sums due under the Master Lease; provided, however, failure of Lessor to make such shall, in no va ch Payments y, relieve Lessee of its obligations and duties pursuant to the provisions of this Lease. 26. 01,9_ Y AGREEMENT This instrument constitutes the sole and only agreement between Lessor and Lessee regarding the Leased Pre and directl m►ses y sets forth the obligations of Lessor and Lessee to each other as of its date. By this Lease the Parties here terminate Basin {Marine Sublease by as well as any amendments to that Sublease. 27. Np_ S Except as otherwise expressly provided by law, any and all notices and other corrmunications required or Permitted by this Lease to be served on or given to either Party by the other 24 shall be in writing, and shall be deemed duly served and given when personally delivered to the Party to whom they are directed, or, in lieu of such personal service, when deposited in the United States Mail, first-class postage, prepaid and addressed as follows: Lessee: Basin Marine, Inc. 829 Harbor Island Drive Newport Beach, California 28. TIME OF THE ESSENCE this Lease. Lessor: City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Time is expressly declared to be of the essence in 29. ACCEPTANCE OF PREMISES BY LESSEE By taking possession of the Leased Premises, Lessee accepts the improvements in the condition on which they may then be, and waives any right or claim against Lessor arising out of the condition of the Leased Premises, including the improvements thereon, the appurtenances thereto and the equipment thereof. 30. ANENDNIENT OF LEASE No amendment or other ratification of this Lease shall be effective unless in writing signed by the President and/or Vice President and the Secretary or an Assistant Secretary of Lessor and by Lessee. 25 IN WITNESS WHEREOF, each of the Parties hereto has caused this Lease to be executed, Lessor by two of its officers thereunto duly authorized and its corporate seal to be affixed, the day and year first above written. Dated: Approved As to Form i City Attorney Attest City Clerk Dated. �5' l S LESSOR: CITY OF NEWPORT BEACH By. Mayor LESSEE BASIN MARINE, INC. By: �jd5 'tj ' BALBOA YACHT BASIN BOAT YARD LEASE PARCEL 1 A parcel of land situated in the Northwest quarter of Section 35, Township 6 South, Range 10 West, S.B.B. & M., Orange County, California, more particularly described as follows: Beginning at a point in the U. S. Bulkhead line between Station No. 200 and Station No. 101, as shown upon'a map entitled "Harbor Lines, Newport Bay Harbor, California," approved May 2nd, 1936, 'by the Secretary of -War, and on file in the office of the U. S. District Engineer at Los Angeles, California, said point of begin- �ii`ng beingS 890:"05' 58 E 784.25 feet 'from said -Bulkhead Station -No. 200; running- thence'N 0° 54`02" E 425.10 feet to a point in 'the Northerly line of that certain parcel of land conveyed to the City of Newport Beach" by the Irvine Company, as described in deed recorded September -25th, 1929, in Book 306, Page 375 of Official Records of Orange County, California; thence S 84° 46' 33" East. 772.15 feet -to the Northeasterly corner of the last mentioned 11 parcel of land, said Northeasterly corner being the True Point of Beginning; thence S 0° 54' 02" W 350.07 feet thence S 34° 35' 24" E 20.66 feet to a point in said U. S. Bulkhead line between Station No. 200 and Station No. 101, said point hereinafter referred to as point "A"; thence N 89° 05' 58" W 134.63 feet along said bulkhead line; thence N 0° 54' 02" E 160.00 feet; thence S 89° 05' 58" E 60.50 feet; thence N 0° 54' 02" E 211.58 feet to said Northerly line of that certain parcel of land as described in the deed recorded in Book 306, Page 375 of Official Records; thence S 84° 46' 33" E 62.33 feet along said Northerly line to the True Point of Beginning. 2/27/85 BALBOA YACHT BASIN BOAT YARD LEASE PARCEL 2 A parcel of land situated in the Northwest quarter of Section 35, Township 6 South, Range 10 West, S.B.B. & M, Orange County, California, more particularly described as follows: Beginning at point "A" as described in Parcel 1 above; thence S 00 54' 02" W 70.00 feet to a line parallel with and 70.00 feet measured at right angles from said U.S. Bulkhead line as described in Parcel 1 above; thence N 89° 05' 58" W 129.63 feet along said parallel line; thence N 0° 54' 02" E 70.00 feet to said Bulkhead line; thence S 89° 05' 58"E 129.63 feet along said Bulkhead line to the Point of Beginning.; 2/27/85 T I— OP;7 I AS 33 E P B. 44 --1 S qo 3' t �G 33E J ? L�rIJ ' ?O.404, -w89 �0 0 _ AvC. -- 4Se490D /51.010VL7 CsoGNNEG n a M ZZ 9. �iE?.�•�E40 L /NE IU S. G3l/G��E�JO L/Ne CITY OF NEWPORT BEACH PUBLIC WORKS DEPARTMENT 40-1 L 49014 Yd C h' T ©d S eoZr YQ ,eo ' Z ?E!//SEZ7 27=_`�95_ DATE 5 - APPROVED PUBLIC WORKS DIRECTOR R.E. NO. DRAWING NO.,Q/AY e4,91 G