HomeMy WebLinkAboutC-3090 - Harbor Island, 829 - Lease - "Balboa Yacht Basin Office"C -�JJav
FIRST AMENDMENT TO
LEASE AGREEMENT
This First Amendment to the Lease Agreement is entered into this 1 st of August, 2005,
by and between Anthony B. Duni and Ann M. Duni (collectively, "Tenant") and the City
of Newport Beach ( "City").
RECITALS
1. On August 1, 2001, City entered into a Lease Agreement ( "Lease') with Heritage
Yacht Sales, Inc., a California corporation ( "Heritage ") which is attached hereto
as Exhibit "A ").
2. Heritage and Tenant entered into an Agreement for the Purchase and Sale of
Stock of Heritage Yachts Sales, Inc. ( "Heritage "), dated August 1, 2005
( "Purchase and Sale Agreement', in which Tenant purchased all the shares of
stock in Heritage.
Concurrent with the execution of the Purchase and Sale Agreement, the City
consented to the Assignment of the Lease from Heritage to Tenant, and Tenant
agreed to be bound by the terms and conditions of the Lease.
4. City and Tenant now desire to amend the Lease to reflect the new terms and
conditions as provided below.
Now therefore, City and Tenant hereby agree as follows:
Term.
Article 3 is hereby deleted in its entirety and replaced with the following:
TERM.
3.1 Base Term. The "Base Term" of this Lease shall be five (5) years
from the Effective Date and shall expire on July 31, 2006, unless
extended as provided in Sections 3.2 and 3.3 below or terminated
in accordance with the other provisions of this Lease.
3.2 First Option Term. Provided Tenant is not in default of any
provision of the Lease during the Base Term, Tenant may extend
the term of this Lease for an additional term of five (5) years
( "First Option Term ") which shall commence on the Expiration of
the Base Term. Tenant may exercise the First Option Term
extension by giving City written notice of its intention to do so on
or before February 1, 2006. If exercised, the First Option Term
shall expire on July 31, 2011.
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3.3 Second Option Term. Provided Tenant is not in default of any
provision of the Lease during the Base Term and/or First Option
Term, Tenant may extend the term of this Lease for an additional
term of five (5) years ( "Second Option Term ") which shall
commence on the Expiration of the First Option Term. Tenant
may exercise the Second Option Term extension by giving City
written notice of its intention to do so on or before February 1,
2011. If exercised, the Second Option Term shall expire on July
31, 2016.
3.4 First and Second Option Term. If Tenant is in default of any term,
condition, or provision of the Lease during the Base Term and/or
the First Option Term , City may, in its sole discretion, revoke the
First Option Term or Second Option Term by written notification
to Tenant, even if Tenant should cure its default prior to City's
revocation. If City revokes the First Option Term or Second
Option Term, the Lease shall terminate on July 31, 2006, or if
Tenant has exercised its First Option Term extension, shall
terminate on July 31, 2011.
3.5 Terms of Lease. The "Term" is defined as the Base Term and, if
exercised, the First Option Term and the Second Option Term.
3.6 Hold Over. Should Tenant hold over and continue in possession of
the Premises after the Expiration of the Base Term, First Option
Term or Second Option Term, Tenant's continued occupancy of
the Premises shall be considered a month -to -month tenancy subject
to termination by either Party upon thirty (30) days advance notice
and also to all the terms and conditions of this Lease, except the
provisions of Sections 3.1, 3.2 and 3.3.
2. Rent.
Section 4.3 of the Lease is hereby deleted in its entirety and replaced with the
following:
Rent shall be increased, effective August 1, 2003, August 1, 2005 during the Base
Term; August 1, 2007 and August 1, 2009 during the First Option Term, if
exercised; and August 1, 2011, August 1, 2013 and August 1, 2015 during the
Second Option Term, if exercised, based on the percentage change in the cost of
doing business as measured by the [CPI] for all urban consumers for the Los
Angeles, Long Beach, Anaheim areas, all items (1967 =100) for the preceding 24
months.
2. Default and Remedies.
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Article 15 of the Lease is hereby deleted in its entirety and replaced with the
following:
15. DEFAULT
15.1 The occurrence of any one or more of the following shall
constitute a default by Tenant:
(a) Failure of Tenant to pay rent due hereunder within thirty
(30) days after written notice from Lessor; or
(b) Any failure by Tenant to perform any of the other terms,
conditions or covenants of this Lease to be observed or
performed by Lessee after thirty (30) days written notice
from Lessor; or
(c) Tenant becoming insolvent or filing any debtor
proceedings, or should any adjudications in bankruptcy be
rendered against Tenant, or should Tenant take or have
taken against it, in any court pursuant to any statute either
of the United States or of any State, a petition in
bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all or a portion of
Tenant's property, and should the same not be discharged
within one hundred twenty (120) days thereafter; or
(d) Tenant permitting the Premises to become vacant or
unoccupied for fifteen (15) consecutive days after written
notice to Tenant (except for vacancies caused by any force
majeure or by remodeling, reconstruction, alteration or
repairs permitted under this Lease); or
(e) The appointment of a trustee or receiver to take possession
of substantially all of the assets of Tenant located at the
Premises or Tenant's interest in this Lease or the Premises,
where possession is not restored within thirty (30) days.
15.2 Except for the payment of rent, if the nature of Tenant's default or
breach under this paragraph is such that more than thirty (30) days
are reasonably required for its cure, then Tenant shall not be
deemed to be in default or breach if Tenant commences such cure
within such thirty (30) day period and diligently proceeds with
such cure to completion.
15.3 Remedies. In the event of a default or breach by Tenant and
Tenant's failure to cure such default or breach, City may at any
time and with or without notice do any one or more of the
following:
(a) Re -enter the Premises, remove all persons and property,
and repossess and enjoy such Premises.
(b) Terminate this Lease and Tenant's right of possession of
the Premises. Such termination shall be effective upon
City's giving written notice and upon receipt of such
notice, Tenant shall immediately surrender possession of
the Premises to City.
(c) Maintain this Lease in full force and effect and recover any
rental, royalty, or other consideration as it becomes due,
without terminating Tenant's right of possession, regardless
of whether Tenant shall have abandoned the Premises.
(d) Exercise any other right or remedy which City may have at
law or equity.
Lease.
Except as expressly modified herein, all other provisions, terms, covenants and
conditions of the Lease shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first written above.
TENANT:
Anthon B uni
Ann M. Duni
CITY OF NEWPORT BEACH
a municipal corporation
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Its:
ATTEST: CA F
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City Clerk
APP OVED AS TO FORM:
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Assistant City Attorney
CA
EXHIBIT "A"
LEASE AGREEMENT
HERITAGE YACHT SALES, INC.
THIS LEASE is made and Effective as of the 1st day of August, 2001 ( "Effective
Date "), by and between the CITY OF NEWPORT BEACH, a Municipal Corporation
( "City ") and HERITAGE YACHT SALES, INC., a California Corporation ( "Tenant').
RECITALS
A. City is owner of certain harbor frontage and tidelands, together with
certain abutting upland property known as 'Balboa Yacht Basin" located on Harbor
Island Drive in the City of Newport Beach, County of Orange in the State of California.
A portion of a commercial building in the Balboa Yacht Basin is currently being used by
Tenant for a yacht sales office, ( "Premises "). Tenant is occupying approximately 780
square feet of space pursuant to a Lease dated July 9, 1996.
B. Tenant and City desire to enter into a new Lease to allow Tenant to
continue to operate a yacht sales business in new premises in an adjacent building at
the Balboa ' Yacht Basin upon revised terms and conditions as provided in this
Agreement.
C. Rent has been determined based upon a comparison and analysis of
similar bay front office space within the City of Newport Beach.
D. The uses to be made of the property 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.
E. The uses to be made of the property subject to this Lease are consistent
with provisions of the Tideland Grant pursuant to which the City obtained title to the
property.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, City and Tenant agree as follows:
1. DEFINITIONS
1.1 General Definitions. As used in this Lease, the following words and
phrases shall have the following meanings:
(a) Alteration — any addition or change to or modification of, the
Premises made by Tenant including, without limitation, fixtures.
(b) Authorized Representative — any officer, agent, employee, or
independent contractor retained or employed by either Party, acting
within authority given by that Party.
(c) City — the CITY OF NEWPORT BEACH.
(d) Damage — an injury to or death of any Person, or the damage
destruction, or loss of property caused by another Person's acts or
omissions.
(e) Damages — monetary compensation or indemnity that can be
recovered in the courts by any Person who has suffered Damage.
(f) Days — means calendar days, subject to extension for any
weekend or day when banks are not open in California if a deadline
occurs on any such Day.
(g) Expiration — the lapse of the time specified as the Term of this
Lease, including any extension of the Term resulting from the
exercise of an option to extend.
(h) Good Condition — the clean, safe, physical condition of the
Premises and each portion of the Premises in compliance with all
applicable governmental laws and regulations.
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(i) Hazardous Materials — shall mean any substance whose nature
and/or quantity of existence, storage, use, manufacture, disposal or
effect, renders such substance and /or the user thereof and /or the
owner of real (property affected thereby, subject to or controlled by
federal, state or local law, or regulation because such substance is
actually or potentially injurious or a threat to public health or welfare
or to the environment; or because such substance under federal,
state or local law requires remediation, removal, cleanup or other
action to bring such substance any areas impacted into
conformance with applicable law.
Q) Hold Harmless — to protect, defend, indemnify and hold harmless
the other party (including the employees, agents and other
potentially liable parties) from all liability, losses, -penalties,
Damage, costs, attorney fees, expenses, causes of action, claims,
or judgments arising out of or related to any Damage to any Person
or property.
(k) Law — any judicial decision, statute, constitution, ordinance,
resolution,
regulation, rule,
administrative
order, or
other
requirement
of any municipal,
county, state,
federal, or
other
government agency or authority having jurisdiction over the Parties
and /or the Premises.
(1) Lease Year —means each calendar year of the term. (For
illustration, Lease Year one (1) is from January 1, 2001 to
December 31, 2001.)
(m) Maintenance or Maintain — repairs replacement, maintenance,
repainting, and cleaning.
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(n) Material Default — means the failure of Tenant to cure a default
under Section 16, below, by the applicable Tenant cure deadline
which cure reasonably exceeds Five Thousand Dollars
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($5,000.00). It
(o) Person — one or more natural persons, or legal entities, including,
without limitation, partnerships, corporations, trusts, estates,
associations, or a combination of natural persons and legal entities.
(p) Premises — those portions of the Balboa Yacht Basin designated
on Exhibit "A" encompassing the yacht sales office to be located
at 829 Harbor Island Drive, including all structures and
improvements located within the Premises, comprised as of the
date of this Lease as approximately 580 square feet of office area.
(q) Provision — any term, covenant, condition, or clause in this Lease
that defines, establishes, or limits the performance required or
permitted by either Party.
(r) Rent —Rent, late payment penalties, interest, taxes, and other
similar monetary amounts and charges payable by Tenant under
the Provisions of this Lease.
(s) Rent Commencement Date — the Rent Commencement Date (and
the Effective Date) shall be August 1, 2001.
(t) Successor— assignee, transferee, personal representative, heir, or
other Person succeeding lawfully, and pursuant to the provisions of
this Lease, to the rights or obligations of either Party.
(u) Tenant — HERITAGE YACHTS SALES, INC., a California
corporation, and any approved Successor.
(V) Termination — the termination of this Lease, for any reason, prior to
Expiration.
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2. LEASE OF PREMISES
City leases the Premises to Tenant and Tenant leases the Premises from City for
the Term and on the conditions contained in this Lease.
3. TERM '+
3.1 Base Term. The "Base Term' of this Lease shall be Five (5) years from
the Effective Date and shall expired on July 31, 2006 unless extended as provided in
3.2 below or terminated in accordance with the other provisions of this Lease.
3.2 Option to Extend. Provided Tenant is not then in Material Default, both at
the time of Tenant notice of exercise and also at the start of such Option Term, Tenant
may extend the term of this Lease for one additional term of Five (5) years (the "Option
Term ") commencing on Expiration of the Base Term. Tenant may exercise the
extension option by giving City written notice of its intention to do so on or before
February 1, 2006. If exercised, the Option Term shall expire on July 31, 2011.
3.3 Terms of Lease. The "Term" is defined as the Base Term and, if
exercised, the Option Term.
3.4 Hold Over. Should Tenant hold over and continue in possession of the
Premises after Expiration of the Base Term or the Option Term, Tenant's continued
occupancy of the Premises shall be considered a month -to -month tenancy subject to
termination by either Party upon Thirty (30) days advance notice and also to all the
terms and conditions of this Lease, except the provisions of Sections 3.1 and 3.2.
4. RENT
4.1 LESSEE agrees to pay LESSOR for the use and occupancy of the
premises the sum of $12,876.00 per year payable in monthly installments of $1,073.00
in advance on or before the first day of the each month.
4.2 Any payment due from LESSEE to LESSOR under the provisions of this
Lease which is not paid within seven (7) days of the date due shall be subject to a late
charge of $50.00 plus interest on the amount due at the rate of ten percent (10 %) per
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annum from the date due and payable by the terms of this Lease until the same shall
be paid. All late charges and interest payments hereunder, shall, as incurred, become
rent due under this Lease. All payments shall be paid in lawful money of the United
States.
4.3 Periodic Rental adjustment: Rent shall be increased, effective August 1,
2003, August 1, 2005 during the Base Term and August 2, 2007 and August 1, 2009
during the Option Term, if exercised, based on the percentage change in the cost of
doing business as measured by the U.S. Department of Labor, Bureau of Labor
Statistics, Consumer Price Index, for all urban consumers for the Los Angeles, Long
Beach, Anaheim areas, all items (1967 =100) for the preceding twenty -four (24) months.
5. BUSINESS PURPOSES AND USE OF PREMISES
5.1 "Approved Use'. The Premises are to be used by Tenant:
(a) For the principal operation of a yacht sales brokerage office; and
(b) Tenant may not use the Premises for any other use except with
prior written consent of the City.
5.� Operation of Premises. Tenant shall operate and manage the Premises
in a manner comparable to other high quality businesses providing similar yacht sales
brokerage. Tenant shall not use or permit the use of the Premises in any manner that:
(a) creates a nuisance; (b) violates any Law; or (c) is not in compliance with all statute,
laws, permits, use restrictions and regulations of City applicable to the Premises,
Tenant and /or Tenant's use of the Premises. Tenant assumes the risk of and shall
cause all its workman, customers and independent contractors to also comply with all
laws regarding their activities at the Premises.
5.3 Sales Restrictions. Tenant 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
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bankruptcy or other solvency proceedings, shall be conducted except such auctions
that may be conducted by officers of a court with respect to any vessels in custody of
Tenant.
5.4 Advertising Display.', Tenant may, at its own expense, place signs in or
upon the Premises subject to the prior written consent of the City Manager as to the
size, type, design and method of installation. All signage placed by Tenant on, in or
about the Premises shall remain the property of Tenant and shall be removed by
Tenant upon Termination or Expiration of this Lease at Tenant's expense; and any
damage caused by removal shall be repaired at Tenant's expense. The permanent
signage in place as of the Execution Date of this Lease shall be deemed approved by
the City and the City Manager as to graphic design and sign placement.
5.5 Independent Contractor. City shall have no interest in the business of
Tenant, and no liability for the business operations or Gross Sales of Tenant, whether
or not caused by City's enforcement of City laws and regulations which apply to the
Premises and /or Tenant.
5.6 No Distress Sales. No auction, fire, bankruptcy, "going out of business" or
other distress sales of any nature may be conducted on the Premises without the prior
written consent of the City Manager, which will not be unreasonably withheld,
conditioned on the condition that such event occurs once during the Term.
5.7 Parking. Tenant shall have non - exclusive right, in common with other
Lessees and Tenants of Lessor, to the use of parking area(s) in the Balboa Yacht Basin
which Lessor may from time to time designate for patron and employee parking.
6. TAXES, LICENSES AND OTHER OBLIGATIONS
6.1 Payment of Taxes. Tenant acknowledges that this Lease may create a
possessory interest subject to property taxation and that Tenant shall pay property
taxes levied on such interest. Tenant shall pay, before delinquency, all taxes,
assessments, license fees and other charges (Taxes) that are levied or assessed
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against Tenant's leasehold interest in the Premises any Tenant fixture, improvement,
equipment and other personal and other Tenant property (including any such property
of any customer of Tenant) installed or located on the Premises from time to time.
Tenant shall pay directly to the app opriate taxing authorities all such taxes at least Ten
00) days before delinquency and before any fine, interest or penalty is due or imposed
by operation of law and furnish to the City with Tenant's next Rent installment a copy of
Tenant's payment check and the Tax bill thereby paid. Tenant shall not be required to
pay any real property taxes or assessments based upon City's ownership interest in the.
Premises.
6.2 Payment of Obligations. Tenant shall promptly pay, when due, any and
all bills, debts, liabilities and obligations incurred by or charged to Tenant in connection
with Tenant's occupation and use of the Premises.
6.3 Challenge to Taxes. Tenant shall have the right in good faith,•at its sole
cost and expense, to contest the amount or legality of any Taxes including the right to
apply for reduction. If Tenant seeks a reduction or contests such Taxes, Tenant's
failure to6pay the Taxes shall not constitute a default as long as Tenant complies with
the provisions of this Section. City shall not be required to join in any proceeding or
contest brought by Tenant unless the provisions of any Law require that the proceeding
or contest be brought by or in the name of City or any owner of the Premises. In that
case, City shall join in the proceeding or contest or permit it to be brought in City's
name and City shall execute any instrument or document necessary or advisable in
connection with the proceeding or contest as long as City is not required to bear any
cost nor be liable for payment of such Taxes. If requested Tenant, on final
determination of the proceeding or contest, shall immediately pay such disputed tax
and also discharge any decision or judgment rendered, together with all related costs,
charges, interest and penalties and provide City with a copy of Tenant's payment and
the underlying bill for such Taxes being paid with Tenant's next Rent payment. Tenant
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shall indemnify and Hold Harmless the City and its officers and employees from and
against any liability, claim, demand, penalty, cost or expense arising out of or in
connection with any contest by Tenant pursuant to this Section. Any such contest of
Taxes be Tenant shall be concluded (meaning that such Taxes shall be fully paid or
cancelled by the Tax Authority) by Tenant within Eighteen (18) months of starting such
action, or end of the Term, if earlier.
6.4 License. Tenant shall maintain in good standing all required licenses and
permits required for operation of the business on the Premises, including but not limited
to a City Business License.
7. UTILITIES AND REFUSE COLLECTION
7.1 Basic Utilities. Tenant shall make all arrangements for and pay for all
utilities furnished to or used on the Premises, including, without limitation,
electricity, telephone service, cable TV and janitorial service.. Tenant
bears all risk of interruption, cancellation and /or disruption of utility
services, as well as the cost of all utilities Tenant requires for its use of the
Premises.
8. ALTERATIONS TO THE PREMISES
(a) Alterations Requiring Building Permits. Any alteration that requires a
building permit from City shall require the written consent of the City
Manager which shall not be unreasonably withheld so long as Tenant's
Approved Use is not thereby being changed.
(b) Non - Structural Alterations. Tenant shall have the right to make, at its sole
expense, such non - structural changes, alterations, improvements and
additions in and to the interior of the buildings, and Tenant may install
therein such trade fixtures and equipment as it may deem advisable for
the conduct of its business for the Approved Use of the Premises.
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(c) Alterations Costing More than $50.00 , Tenant shall not make any
Alterations (other than non - structural Alterations costing less than Fifty
Thousand Dollars [$50,000.00)) to the Premises without the prior written
consent of the City Manager which shall not be unreasonably withheld if
the Approved Use is not thereby changed. In granting or withholding
consent to proposed Alterations by Tenant, the City Manager shall
consider the impact of the proposed Alterations on public views adjacent
property owners, compliance of City codes and the impact of the
proposed Alterations on space available for public use of the Balboa
Yacht Basin. The City Manager may require, as a condition of approval,
that Tenant agree to amendments to this Lease, including amendments
increasing the amount of Rent payable under this Lease if the proposed
Alterations would materially increase the floor area or size of the building
structures on the Premises. The City Manager may also require Tenant to
provide, at Tenant's expense, appropriate engineering and feasibility
studies regarding the structural integrity of the Premises. Any damages or
destruction to the structural improvements or Tenant equipment at the
Premises shall not reduce or excuse Tenant's obligation to pay Rent in full
and on time.
(d) Quality of Work Performed. All work shall be performed in a good and
workmanlike manner, shall substantially comply with the plans and
specifications submitted to City and shall comply with all applicable
governmental permits and Laws in force at the time permits are issued.
(e) Payment of Costs. Tenant shall pay all costs related to the construction of
any Alterations by Tenant or its agents. Tenant shall keep the Premises
free and clear of all mechanics' liens resulting from construction
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performed at the direction of Tenant. All construction improvements shall,
upon completion, become part of the Premises, owned by City.
(f) Indemnification. Tenant shall Hold Harmless City and its officers and
employees with respect to any Damage or Damages related to any work
performed on the Premises by Tenant. City shall promptly provide Tenant
with a copy of any claim filed by any third party with respect to work
performed by Tenant. City has no obligation to or liability to Tenant
incident to City's approval of Tenant's plans or issuance of permits for any
improvements to the Premises.
(g) Disposition of Alterations at Expiration or Lease Termination. Any
Alterations made to the Premises shall remain on, and be surrendered
with, the Premises on Expiration or Termination of this Lease (Excluding
Tenant's fixtures, equipment, furniture, movable decorations and the like).
However, City may elect not less than Thirty (30) days prior to Expiration
or Termination of this Lease, to require Tenant to remove, at Tenant's
r cost, any Alterations that Tenant has made to the Premises, except those
Alterations existing as of the date of this Lease or approved by City. If City
requires removal of Alterations, Tenant shall, at its cost, remove the
Alterations and restore the Premises to its condition prior to installation of
such Alterations, ordinary wear and tear excepted, before the last day of
the Term, or within Thirty (30) days after notice is given, whichever is
later. Prior to Expiration or within Fifteen (15) days after Termination of
this Lease, Tenant may remove any movable partitions, machinery,
equipment, furniture, and trade fixtures previously installed by and solely
paid for by Tenant, provided that Tenant repairs any damage to the
Premises caused by removal and the structural future of the foundation
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and bulkhead areas of the Premises are not thereby worsened by such
Tenant removal.
9. REPAIRS AND MAINTENANCE OF PREMISES
9.1 Maintenance and Rebair by Tenant. Tenant agrees that it will maintain
the Premises in Good Condition.
City may perform Maintenance or repairs in the event Tenant fails to commence
required Maintenance or repairs within Fifteen (15) days after receipt of notice to do so.
The cost of any Maintenance or repairs by the City pursuant to this Subsection shall be
payable as additional Rent upon billing by City with the Tenant's next monthly Rent
payment.
(a) Entry by City. City and its Authorized Representatives may enter
upon and inspect the Premises at any reasonable time for
Maintenance or other purposes. In case of emergency, • City or its
Authorized Representatives may enter the Premises by the master
key if Tenant is not present to open and permit an entry. During
entry City and its Authorized Representatives shall exercise
reasonable care relative to the Premises and to Tenant's property.
Any entry to the Premises by City shall not be construed as a
forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction of Tenant from the Premises or any portion thereof.
(b) Additional Covenants of City Regarding Maintenance Obligations.
In addition to other provisions of this Lease:
(1) Written Notice Interference with Business Operations, and
Additional Improvements. City shall, at the earliest time
reasonably possible given the circumstances that may then
exist, provide Tenant with prior written notice of its intent to:
(i) perform any Maintenance, repair or remodeling of the
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Balboa Yacht Basin which may reasonably be expected to
adversely affect, by interference with access, visibility,
availability of utilities or otherwise, Tenant's business
operations at the Premises or any portion; or (ii) except in
the case of an emergency, enter upon the Premises for any
of the purposes set forth in this Lease. City agrees not to
construct any additional improvements at the Balboa Yacht
Basin that relate to any commercial enterprise which might
conflict or compete with Tenant's business operations on the
Premises so long as Tenant operates the Premises for the
Approved Use.
(2) Due Diligence by City Regarding Repairs. Whenever City
elects or is obligated to repair or restore the Premises or any
portion of the Balboa Yacht Basin, City shall proceed, at
City's cost and with due diligence to repair or rebuild the
same, including any additions or improvements made by
City or by Tenant with City s consent, in accordance with the
same plan and design as existed immediately before such
City repairs and in accordance with all applicable Laws
subject to force majeure and inability to use same materials
by the City. The materials used in said repair or
reconstruction shall be as nearly like the original materials
as may then be reasonably procured.
9.2 Tenant is the long -time operator of the Premises, fully aware of the
condition of the Premises. Therefore, Tenant accepts the condition of the Premises as
of the date of this Lease without any current City warranty, representation or repair
obligation.
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10. LIENS
Tenant shall not permit to be enforced against said Premises, or any part
thereof, any mechanics', materialman's, contractors' or other liens arising from, or any
claims for damages growing out off, any work or repair or alteration (except from the
actions of City), and Tenant shall pay or cause to be paid said liens and claims before
any action is brought to enforce the same against Tenant or the Premises, or shall
adequately indemnify City and the Premises by payment bonds acceptable to City and
as provided for by Law. Tenant agrees to Hold Harmless City and the Premises free
and harmless from all liability for any and all such liens and claims and all costs and
expenses in connection therewith. Tenant shall give City notice in writing before
commencing construction of any kind on the Premises and provide any additional
Tenant insurance required by this Lease.
11. INDEMNITY AND EXCULPATION, INSURANCE
11.1 Exculpation of City. Except as otherwise expressly provided in this Lease,
City shall not be liable to Tenant for any damage to Tenant or Tenant's property
goodwill, increased Tenant operating costs, or loss of business or.income by Tenant
from any cause other than the gross negligent, intentional or willful acts of City or its
Authorized Representatives. Except as otherwise expressly provided in this Lease,
Tenant releases and also waives all claims against City for Damages arising for any
reason other than the gross negligent, intentional or willful acts of City or its Authorized
Representatives. City shall not be liable to Tenant for any Damage to the Premises,
Tenant's property, Tenant's goodwill, or Tenant's business income, caused in whole or
in part by acts of nature including, without limitation, waves, wind and tidal flows.
11.2 Tenant Release and Hold- Harmless. Tenant releases the City and also
agrees to Hold Harmless the City, its elected officials, officers and employees from any
and all claims, liability, loss, Damage, or expenses resulting from Tenant's occupation
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and use of the Premises, specifically including, without limitation, any claim, liability,
loss, or Damage arising by and Tenant assumes all corresponding risk because of.
(a) The death or injury of any Person caused or allegedly caused by
the condition of the Premises or an act or omission of Tenant or an
agent, contractor, employee, servant, sublessee or concessionaire
of Tenant; and
(b) Any work performed on the Premises or materials furnished to the
Premises at the request of Tenant or any agent or employee of
Tenant, with the exception of Maintenance performed by City; and
(c) Tenant's failure to perform any provision of this Lease or to comply
with any requirement of Law or any requirement imposed on the
Premises by any duly authorized governmental agency or political
subdivision.
Tenant's obligations pursuant to this Subsection shall not extend to any claim,
loss, liability, Damages, costs or fees that are proximately caused by the sole gross
negligence, willful misconduct, or unlawful or fraudulent conduct on the part of the City
or its officers or employees.
11.3 Insurance Limits.
(a) Liability Insurance. Tenant shall, at its own cost and expense,
secure and maintain during the entire Term a broad form
commercial general liability insurance issued by an insurance
company reasonably acceptable to City covering the acts and
omissions of Tenant, any Tenant employee, agent customer,
independent contractor or visitor to the Premises. The policy shall
name City, and its officers, employees and agents as additional
insureds and protect, against loss or liability caused by or
connected with Tenant's occupation and use of the Premises under
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this Lease in amounts not less than: combined single limit bodily
injury and property damage, including products /completed
operations liability and blanket contractual liability, of One Million
Dollars ($1,OOQ,000.00) per occurrence, subject to increased limits
in accordance with Section 12.3(b) below.
(b) City's Ability to Increase Amount of Public Liability and Property
Damage Insurance. Not more frequently than once during the
Option Term, Tenant shall increase the insurance coverage as
reasonably required by City so that at all times, the amount of
public liability and property damage insurance coverage maintained
by Tenant reasonably and fully protects the City.
(c) Deductibles. Any deductible amount under each insurance policy
shall not exceed Seven Thousand Five Hundred Dollars
($7,500.00), and Tenant is responsible for payment of such amount
in the event of loss.
11:4 Fire Insurance on Building and Other Improvements. Tenant at its cost
shall maintain a policy of standard broad form all -risk fire and extended coverage
insurance, with vandalism and malicious mischief endorsements, to the extent of at
least full replacement value, for contents of the Premises with coverage for demolition
and compliance in a form acceptable to the City's Risk Manager.
11.5 Loss of Rent Insurance. Tenant at its cost shall maintain loss of rent
insurance (or business interruption insurance) insuring that the Rent will be paid to City
for a period up to Twelve (12) months if the Premises are destroyed or rendered
unusable or inaccessible for commercial purposes by a risk insured under a special
form property coverage policy including vanfalism and malicious mischief
endorsements.
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11.6 Workers' Compensation. Tenant shall comply with all of the provisions of
the Workers' Compensation Insurance and Safety Acts of the State of California, the
applicable provisions of Divisions 4 and 5 of the California Labor Code.
11.7 Waiver of Subrogation. The parties release each other, and their
respective Authorized Representatives, from any claims for Damage to any Person or
to the Premises and to the fixtures, personal property, and Alterations of either in or on
the Premises that are caused by or result from risks insured against under any
insurance policies carried by the parties and in force at the time of any Damage or
required to be carried under this Lease. Tenant shall cause each insurance policy
obtained by it to provide that the insurance company waives all rights of recovery by
way of subrogation against the City in connection with any Damage covered by any
policy of property insurance. If any insurance policy cannot be obtained with a waiver
of subrogation, or is obtainable only by the payment of an additional premium charge
above that charged by the insurance company issuing policies without a waiver of
subrogation, the Party undertaking to obtain the insurance shall notify the other Party of
'
this fact.:Ttie other Parry shall have a period of Twenty (20) days after receiving the
notice either to place the insurance with a company that is reasonably satisfactory to
the other Party and that will carry the insurance with a waiver of subrogation, or to
agree to pay the additional premium. The Party is relieved of the obligation to obtain a
waiver of subrogation rights with respect to the particular insurance involved if the
insurance cannot be obtained with a waiver of subrogation or the other Party refuses to
pay the additional premium.
shall:
11.8 Other Insurance Matters. All the insurance required under this Lease
(a) Be issued by insurance companies authorized to do business in the
State of California, with a minimum Best Insurance Guide or
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financial rating of A -VII unless otherwise approved in advance by
City Risk Manager;
(b) Be issued as a primary policy;
(c) Be noncontributing with any insurance that may be carried by City;
(d) Contain an endorsement requiring Thirty (30) days written notice
from the insurance company to both Parties before cancellation or
material change in the coverage, scope or amount of the policy;
and
Each policy, or a certificate of the policy, together with evidence of payment of
premiums, shall be deposited with City and on renewal of the policy not less than Thirty
(30) days before expiration of the term of the policy. Either Party may maintain for its
own account any insurance not required under this Lease, but any such policy shall be
separate from and non - contributory in the event of loss covered by insurance carried by
the Party responsible for said loss.
12. DAMAGE OR DESTRUCTION OF PREMISES
17A Destruction of Premises. If the Premises are totally or partially destroyed,
rendering the Premises or any portion thereof totally or partially inaccessible or
unusable, Tenant shall restore the Premises, at Tenant's sole cost and effort, to
substantially the same condition as immediately prior to such destruction (including all
trade fixtures, personal property, improvements and Alterations as are installed by
Tenant, which shall be replaced by Tenant at its expense), unless Tenant elects to
terminate this Lease under the conditions of this Section 13.1. Tenant can elect to
terminate this Lease, without any liability from the City, by giving notice of such election
to City within Sixty (60) days after the date of the occurrence of any casualty and also
proving to the reasonable satisfaction of City that each of these conditions are satisfied:
(a) the cost of the restoration exceeds the amount of any available insurance proceeds
by at least twice the annual Rent for the most recent Two (2) completed Lease Years;
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(b) at the time of such casualty Tenant maintained all insurance required by this Lease;
and (c) no act attributable to Tenant voided insurance coverage otherwise available
concerning said loss. If the Lease is so terminated: (x) all insurance proceeds
applicable to reconstruction (ex6luding Tenant's personal property therein) shall
assigned by Tenant; (y) Tenant shall pay any policy deductible to City; and (z) quitclaim
title to the Premises to City, as conditions of such termination. Notwithstanding such
Lease termination, Tenant shall Hold Harmless the City from any expenses, liability or
loss regarding damage or loss to boats being repaired or stored by Tenant at the
Premises and any other liability or loss incurred by Tenant concerning such casualty
and event.
12.2 Replacement of Tenant's Property. In the event of the damage or
destruction of improvements located on the Premises not giving rise to Tenant's option
to terminate this Lease under Section 13.1, above, Tenant shall, at its own, expense,
replace and repair all Tenant's trade fixtures, equipment, machinery, furnishings,
furniture and inventory as soon as reasonably possible to permit the prompt
continuation of Tenant's business at the Premises for the Approved Use.
12.3 Destruction of Balboa Yacht Basin. In the event that all or a portion of the
Balboa Yacht Basin or access to the Balboa Yacht Basin in areas to be maintained by
the City either under this Lease or because City owns such other areas, is damaged,
deteriorates or destroyed by fire or any other casualty not attributable to Tenant nor
covered by Tenant insurance and as a result the Premises or a material portion of the
Premises becomes inaccessible or commercially unusable for the Approved Use, and
the Damage or destruction cannot reasonably be repaired within Twelve (12) months
after the date of the casualty, City shall have the right, by notice to Tenant within Sixty
(60) days of such casualty, to either: ,
(a) Terminate this Lease by giving to Tenant written notice (which
notice shall be given, if at all, within Thirty (30) days following the
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date of the casualty), in which case this Lease shall be terminated
Thirty (30) days following such City notice;
(b) Confirm City's intention to repair such damage as soon as
reasonably possible at City's expense, in which event .this Lease
shall continue in full force and effect; however, Rent shall be
abated in accordance with the procedures set forth in Section 14,
below. Tenant may terminate this Lease by giving City written
notice at any time prior to the commencement of repairs if City
agrees to repair the Balboa Yacht Basin pursuant to this Section
13.3(b) and City fails to commence repairs within One Hundred
Twenty (120) days after giving Tenant written notice of its intention
to repair. In such event, this Lease shall terminate as of the date of
notice from Tenant to City, and City shall have no further. liability to
Tenant under this Lease; or
(c) City has no liability to Tenant concerning such casualty or City
election to repair or not repair except solely arising under Section
12.1, above.
13. ABATEMENT OF RENT
In the event of Damage or destruction of the Premises or Damage to the Balboa
Yacht Basin that impacts the Premises and this Lease is not terminated, Tenant shall
continue to utilize the Premises for the operation of its business for the Approved Use
to the extent it may be practicable and commercially reasonable. Base Rent shall
abate in proportion to the area of the Premises that is rendered unusable for the
Approved Use. The abatement of Rent shall commence on the date that use of the
Premises is impacted and continue until the completion of those repairs necessary to
restore full use of the Premises and Tenant's re- opening of the Premises. Tenant's
obligation to pay Taxes and other monetary obligations pursuant to this Lease shall not
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be abated or reduced. Rent shall not abate if the Damage or destruction to the
Premises is the result of the negligence or willful conduct of Tenant or its employees,
officers or agents. Tenant's right to abatement of Base Rent is contingent on payment
of insurance proceeds, if any, equal to the amount of Base Rent pursuant to coverage
required by Section 12.6, above.
14. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING AND
ENCUMBERING
14.1 Prohibition of Assignment. The Parties acknowledge that City is entering
into this Lease in reliance upon the business experience and abilities of Tenant and its
principals to operate the Premises for the Approved Use. Consequently, Tenant shall
not voluntarily delegate, assign or encumber its interest in this Lease or in the
Premises, or sublease substantially all or any part of the Premises, or allow any other
person or entity (except Tenant's Authorized Representatives) to occupy or-use all or
any part of the Premises without the prior written consent of City, which may be
withheld at the sole discretion of the City unless Tenant provides City with evidence
reasonably satisfactory to City that the: (a) proposed transferee has financial strength
and experience comparable to Tenant; (b) the use of the Premises by the proposed
transferee is consistent with the terms of this Lease and is for the Approved Use; (c)
proposed transferee agrees to assume all current and future Tenant obligations and
agrees that the City is not in default of the Lease; and (d) Tenant is not then in Material
Default of this Lease. Except as otherwise expressly provided herein, any dissolution,
merger, consolidation, reorganization of Tenant, or the sale or other transfer resulting in
a transfer of a controlling percentage of the capital stock of Tenant, shall be deemed a
voluntary assignment requiring City's consent above. However, the sale or transfer of a
controlling percentage of the capital stock of Tenant pursuant to a public offering(s) of
equity or debt instruments issued by Tenant, or other transfers of publicly traded capital
stock or debt instruments shall not constitute a voluntary assignment and shall not
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require City's consent or approval if there is no change in the management of Tenant's
business and if such successor otherwise maintains the Approved Use and satisfies the
prior experience and business expertise tests above and is at least as creditworthy as
Tenant at the time this Lease is signed. The phrase "controlling percentage" means the
ownership of, or the right to vote, stock possession of at least Fifty Percent (50 %) of the
total combined voting power of all classes of Tenant's capital stock issued, outstanding,
and entitled to vote for the election of directors, except for ownership of publicly traded
shares, warrants or similar equity interests in Tenant traded on a national exchange or
over - the - counter markets.
14.2 Exceptions. Notwithstanding the foregoing paragraphs or anything to the
contrary contained herein, City's consent shall not be required for a transfer or
assignment of any stock or interest by a share holder or member if the Approved Use of
the Premises is maintained, Tenant and transferee provide City the Lease amendment
described in Section 15.2(b), above, if such transfer is to a spouse, children or
grandchildren or an assignment or subletting to an Affiliate, Subsidiary, or Successor of
Tenant defined as follows:
(a) An "Affiliate" is any corporation or other entity which directly or
indirectly controls or is controlled or is under common control with
Tenant (for this purpose, "control" shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of such corporation or other entity,
whether through the ownership of voting securities or by contract or
otherwise);
(b) A "Subsidiary" shall mean any corporation or other entity not less
than Twenty Five Percent (25 %,) of whose outstanding stock shall,
at the time, be owned directly or indirectly by Tenant and which is
at least as creditworthy as Tenant; and
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(c) A "Successor° shall mean a corporation or other entity in which or
with which Tenant is merged or consolidated, in accordance with
applicable statutory provisions for merger or consolidation of
corporations or a corporation or other entity acquiring a substantial
portion of the property and assets of Tenant.
14.4 Continuing Effect. City's consent to any assignment, encumbrance, or
sublease shall not relieve Tenant from its obligations or liabilities under this Lease nor
act as a waiver of the requirement that such consent be obtained to any subsequent
assignment, encumbrance or sublease.
15. DEFAULT
15.1 Default by Tenant. The occurrence of any one or more of the following
events shall constitute a "Material Default" of this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant,
(b) The failure by Tenant to make any payment of Rent or any other
payment required by this Lease, as and when due, when such
failure shall continue for a period of Ten (10) days after written
notice of default from City to Tenant.
(c) The failure of Tenant to observe or perform any of the "material"
(meaning costing Five Thousand Dollars ($5,000.00) or more to
fully remedy covenants, conditions or provisions of this Lease to be
observed or performed by Tenant where such failure shall continue
for a period of Thirty (30) days after written notice thereof from City
to Tenant; provided, however, that if the nature of Tenant's default
is such that more than Thirty (30) days are reasonably required for
its cure, then Tenant shall not be deemed to be in default if Tenant
commences such cure within said Thirty (30) day period and
thereafter diligently prosecutes such cure to completion. However,
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no Thirty (30) day cure period is allowed for any Tenant caused
environmental event involving Hazardous Substances at the
Premises or otherwise caused by Tenant or Tenant's agents or
customers ,which likely costs Fifteen Thousand Dollars
($15,000.00), or more, to fully remediate. Immediately following
any such environmental event Tenant shall use Tenant's best
efforts to fully remediate or prove to City reasonable satisfaction
that remediation is underway and will be completed in Ninety (90)
days without any risk of further environmental damage to the
Premises and /or surrounding area.
(d) The making by Tenant of any general arrangement or assignment
for the benefit of creditors.
(e) Tenant becomes a "debtor" as defined in 11 U.S.C. Section 101 or
any successor statute thereto (unless, in the case of a petition filed
against Tenant, the same is dismissed within Sixty (60) days).
(f) The appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where such appointment is not
discharged within Sixty (60) days.
(g) The attachment, execution or the judicial seizure of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in
this Lease, where such seizure is not discharged within Sixty (60)
days.
15.2 Remedies.
(a) Cumulative Nature of Remedies, If any Material Default by Tenant
shall continue to not be cured after notice and the cure period
provided under this Lease, City shall have the remedies described
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E
in this Subsection, in addition to all other rights and remedies
provided by law or equity, to which City may resort cumulatively or
in the alternative.
(1) Reentrv, without Termination. City may reenter the
Premises, and, without terminating this Lease, re -let all or a
portion of the Premises. City may execute any leases made
under this provision in City's name and shall be entitled to all
rents from the use, operation, or occupancy of the Premises.
Tenant shall nevertheless pay to City on the dates specified
in this Lease the equivalent of all sums required of Tenant
under this Lease, plus City's expenses in conjunction with
re- letting, less the proceeds of any re- letting or attornment.
No act by or on behalf of City under this provision shall
constitute a Termination of this Lease unless City gives
Tenant specific notice of Termination.
••• (2) Termination. City may terminate this Lease by giving Tenant
notice of Termination. In the event City terminates this
Lease, City may recover possession of the Premises (which
Tenant shall surrender and vacate upon demand) and
remove all Persons and property. City shall be entitled to
recover the following as damages:
(i) The value of any unpaid Rent or other charges that
are unpaid at the time of Termination;
(ii) The value of the Rent and other charges that would
have accrued after Termination less the amount of
Rent and charges the City received or could have
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received through the exercise of reasonable diligence
as of the date of the award;
(iii) Any other amount necessary to reasonably
compensate City for the detriment proximately caused
by Tenant's failure to perform its obligations under
this Lease; and
(iv) At City's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from
time -to -time by applicable California law.
City shall be entitled to interest at the rate of Ten Percent
(10 %) per annum on all Rent and other charges from the
date due or the date they would have accrued. City shall
also be entitled to an award of the costs and •expenses
incurred by City in maintaining or preserving the Premises
after default, preparing the Premises for re- letting; or
• repairing any damage caused by the act or omission of
Tenant.
(3) Use of Tenant's Personal Property. City may use Tenant's
personal property and trade fixtures located on the Premises
or any of such property and fixtures without compensation or
liability to tenant for use or damage. In the alternative City
may store the property and fixtures at the cost of Tenant.
City shall not operate the Premises in any manner tending to
indicate that the Premises is affiliated with, part of or
operated in conjunction with Tenant's business.
(b) City's Right to Cure Tenant's Default. Upon continuance of any
material default beyond applicable notice and cure periods, City
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may, but is not obligated to, cure the default at Tenant's cost. If
City pays any money or performs any act required of, but not paid
or performed by, Tenant after notice, the payment and/or the
reasonable cost of performance shall be due as additional Rent not
later than Five (5) days after service of a written demand
accompanied by supporting documentation. No such payment or
act shall constitute a waiver of default or of any remedy for default
or render City liable for any loss or damage resulting from
performance.
(c) Waiver of Rights. Tenant waives any right of redemption or relief
from forfeiture under California Code of Civil Procedure Sections
1174 or 1179, or under any other present or future law, in the event
Tenant is evicted or City takes possession of the Premises by
reason of any default by Tenant.
16. CONDEMNATION
16.E Termination of the Lease. Tenant or the City shall have the right to
terminate this Lease as of the date a public agency with lawful authority to condemn
obtains possession or title to Ten Percent (10 %), or more of the land area at the
Premises, or the condemnation materially affects the conduct of Tenant's business in
the Premises, or the Premises will no longer be suitable for the conduct of Tenant's
business for the Approved Use. In the event of Termination pursuant to this
Subsection, Base Rent shall be prorated to the date of Termination, any unearned Rent
shall be refunded to Tenant and Tenant shall have no further obligations under this
Lease. Tenant shall not grant a right of entry to any condemnor without the written
consent of City.
0
16.2 No Termination of Lease. If this Lease is not terminated under Section
16.1, above, then this Lease shall terminate as to the portion of the Premises taken
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upon the date which possession of said portion is taken, but this Lease shall continue in
force and effect as to the remainder of the Premises. Tenant shall, in the event of a
taking of any portion of the Premises, be entitled to a reduction in the Base Rent in
reasonable proportion to the area of the Premises so taken verses its impact on
Tenant's continued operations for the Approved Use.
16.3 Allocation of Award. In the event that an award is made for an entire or
partial taking or for damage to the Premises or any interest therein in any action in
direct or inverse condemnation or in the event of a taking under the power of eminent
domain, the Parties hereto agree that their respective rights to the award or
compensation paid shall be as follows:
(a) City shall be entitled to that Portion of the award received for the
taking of the real property within the Premises, the value of this
leasehold, including all buildings and other improvements to which
City is entitled on Expiration or Termination of this Lease, and for
severance damages.
(b) Tenant shall be entitled to any award that may be made for the
taking of or injury to Tenant's business and profits, including any
amount attributable to Tenant's personal property, fixtures,
installations, or improvements in or on the Premises, Tenant's
relocation expenses, but excluding any "bonus value" attributable
to this Lease.
(c) Any interest payable on the total award shall be divided between
City and Tenant in the same ratio as are the awards granted to
them pursuant to the other provisions of this Section.
17. SUBJECT TO STATE LANDS COMMISSION +GRANT
The Premises are located on property that is the subject of a grant from the
State of California to the City that is administered by the State Lands Commission.
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Tenant shall not take any action that would cause the City to be in violation of any
provisions of that grant. If the State Lands Commission terminates this grant for any
reason or prevents the Premises from being used for the Approved Use, this Lease
terminates as a result and the I+Parties shall be released from all liabilities and
obligations under this Lease.
18. WASTE OR NUISANCE
Tenant shall not commit or permit the commission of any waste on the Premises.
Tenant shall not maintain, commit, or permit any nuisance as defined in Section 3479 of
the California Civil Code on the Premises. Tenant shall not use or permit the use of the
Premises for any unlawful purpose.
19. NO CONFLICTS OF USE, HAZARDOUS MATERIALS
The Parties acknowledge that Tenant has been in possession of the Premises
pursuant to the provisions of a Lease since September 20, 1973. Tenant represents
and warrants that, to the best of Tenant's knowledge: (i) Tenant's continued use of the
Premises does not conflict with applicable Laws; (ii) the Premises is not and has not
been opeFated in violation of any environmental laws, rules or regulations and Tenant's
contemplated uses will not cause any such violation; and (iii) the Premises are free of
any and all Hazardous Materials as of the date of this Lease. In the event that the
presence of any Hazardous Material caused by Tenant is detected within the Premises
or adjacent to this Premises at any time during the Term of this Lease and any Option
Term all remedial or clean up work shall be immediately performed by Tenant at
Tenant's expense to fully remediate such environmental condition so that the Premises
and such affected area(s) are promptly brought into full compliance with all Laws. This
clause and this lease does not restrict or limit Tenant's right to lawfully use Hazardous
Materials on the Premises, if in strict conformance with all Laws.
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20. CITY'S DEFAULTSITENANT'S REMEDIES
City shall be in Material Default if it fails to perform, or commence performance if
Tenant gives notice of nonperformance specifying the nature of and City does not cure
within Thirty (30) days or City commences performance within said Thirty (30) days
diligently completes said performance. In the event of City's Material Default, Tenant
may:
(a) Upon Fifteen (15) days notice to City cure any such default by City and
City shall reimburse Tenant the amount of all costs and expenses incurred
by Tenant in curing the default, together with interest and expenses at the
maximum rate then allowed by law;
(b) Terminate this Lease if City's default materially interferes with Tenant's
use of the Premises for their intended purpose and City fails to cure such
default within Fifteen (15) days after a second demand by Tenant in which
case Tenant shall have no further or continuing obligations and City shall
have no liability to Tenant; or
(c): Commence an action for specific performance and recover costs and
expense, including reasonable attorney fees if Tenant is the prevailing
party.
21. NOTICES
Any notice, demand, request, consent, approval or communication that either
Party desires or is required to give shall be in writing and shall be deemed given Three
(3) days after deposit into the United States registered mail, postage prepaid, by
registered or certified mail, return receipt requested or upon delivery if personally
served or upon transmission if sent by facsimile. Unless notice of a different address
has been given in accordance with this Section, gall notices shall be addressed as
follows:
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If to City: CITY OF NEWPORT BEACH
Attention: City Manager
3300 Newport Boulevard
Newport Beach, CA, 92658
Facsimile: 949 - 644 -3020
If to Tenant:
22. SURRENDER OF PREMISES
HERITAGE YACHT SALES, INC.
829 Harbor Island Drive
Newport Beach, CA, 92660
At the Expiration or earlier Termination of this Lease, Tenant shall surrender to
City the possession of the Premises. Tenant shall leave the surrendered Premises,
required personal property and fixtures in good and broom -clean condition, reasonable
wear and tear excepted. All property that Tenant is not required to surrender, but that
Tenant does abandon shall, at City's election, become City's property at Expiration or
Termination.
23. WAIVER
The waiver by City or Tenant of any breach of this Lease by the other shall not
be deerrmd.to be a waiver of any term, covenant, or condition or any subsequent
breach. The acceptance of Rent by City shall not be deemed a waiver of any breach by
Tenant other than the failure to pay the particular rent accepted.
24. PARTIAL INVALIDITY
If any term or Provision of this Lease is declared invalid or unenforceable, the
remainder of this Lease shall not be affected.
25. GOVERNING LAW
This Lease shall be governed by the laws of the State of California. Neither
City's execution of this Lease nor any consent or approval given by City in its capacity
as landlord shall affect City's powers and duties as a governmental body. Any consent
,
or approval Tenant is required to obtain from City pursuant to this Lease is in addition to
any permits or approvals Tenant is required to obtain pursuant to law or ordinance.
However, City shall attempt to coordinate its procedures for giving contractual and
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governmental approvals so that Tenants requests and applications are not
unreasonably denied or delayed.
26. ENTIRE AGREEMENT; MODIFICATION
This Lease contains the entire agreement between the Parties. No verbal
agreement or implied covenant shall be held to vary the provisions of this Lease. Each
Party has relied on its own inspection of the Premises and examination of this Lease,
the counsel of its own attorney or other advisors, and is complete understanding of the
overall warranties, representations, and covenants in this Lease. The failure or refusal
of either Party to inspect the Premises, to read this Lease or other documents, or to
obtain legal or other advice relevant to this transaction shall not be the basis for later
claim that all or part of this Lease is not enforceable or was not understood by a Party
when this Lease was signed. No provision of this Lease may be amended or varied
except by an agreement in writing signed by the Parties or their respective Subcessors.
27. TIME OF ESSENCE
.Time is of the essence with respect to the performance of every Provision of this
Lease in Which time of performance is a factor. All time deadlines are meant to be
strictly construed. A "day" means a calendar day, with extension if a deadline occurs on
a weekend or day when banks are not open in California.
28. SUCCESSORS
Subject to the Provisions of this Lease on assignment and subletting, each and
all of the covenants and conditions of this Lease shall be binding on and shall inure to
the benefit of the heirs, successors, executors, administrators, assigns, and personal
representatives of the respective parties.
29. NO BROKERS
Each party warrants to and for the benefit'of the other than it has had no
dealings with any real estate broker or other agent (attorneys excepted) in connection
-32-
with the negotiation or making of this Lease, and that no commission, fee or other
compensation is owed regarding this Lease by such other Party.
30. GENDER; NUMBER
The neuter gender includes the feminine and masculine, the masculine includes
the feminine and neuter, and the feminine includes the neuter, and each includes
corporation, partnership, or other legal entity whenever the context requires. The
singular number includes the plural whenever the context so requires.
31. EXHIBITS
All exhibits to which reference is made in this Lease are incorporated by
reference. Any reference to "this Lease" includes matters incorporated by reference.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first written above.
City Clerk
AP VE AS TO FORM:
Robin . Clauson
Assistant City Attorney
F:\users\cat\shared\da\Ag\HeritageYacht\080601 Final.doc
19191
CITY OF NEWPORT BEACH ("City"),
a Municipal Corporation
By: dowm.."LOIL i%=*— nit" -10— - ohm
Garold B. Adams, May
HERITAGE YACHT SALES, INC.
A California Corporation ("Tennant")
By:
Its:"e_s
Y�
_lo
AMENDMENT TO LEASE
July 15, 1997
This is an amendment to an existing Lease between Donald S. Ross and Jillaine P.
Ross, doing business as Heritage Yacht Brokers, lessee, and the City of Newport
Beach, lessor, dated 9th day of July 1996. The subject of the lease is certain office
space delineated in red on the attached Exhibit "A".
1. Lessee has elected to extend the term of the above referenced lease for one
additional period of one year as provided in Section 2 of the lease and has
notified lessor in writing as required.
2. Rental. Lessor has determined that the current fair market rental of the
property is $16,200 per year in monthly installments of $1,350 in advance,
on or before the first day of each month.
3. Lease Terms. All terms of the original lease referenced above, except
those listed in this amendment are the same and will remain binding on
the lessee.
IN WITNESS HEREOF, each of the parties hereto has caused this Lease to be
executed on the day and year first above written.
LESSOR
CITY OF NEWPORT BEACH
a municipal corporations
BY: *.'�
;AROVED AS TO FORM:
�—__..
ATTORNEY
LESSEE:
-Z)6441�� // 41. A'1�1�
A,TTTEST:
41
CITY CLERK .u.
,. „ ! 0
0-
LEASE BETWEEN THE CITY OF NEWPORT BEACH
AND DONALD S. ROSS AND SILLAINE P. ROSS
DOING BUSINESS AS HERITAGE YACHT BROKERAGE
c
Ci
1. LEASED PREMISES
2. TERM
3. RENTAL
4. TAXES
5. USE OF PREMISES
6. ALTERATIONS
7. REPAIRS
B. UTILITIES
9. LIABILITY INSURANCE
lO.RECONSTRUCTION
ll.RIGHT OF ENTRY
12.SIGNS
13-SALES RESTRICTIONS
14-ASSIGNMENTS AND SUBLETTING
15-HOLD HARMLESS
16.LIENS
17-LESSOR PAYING CLAIMS
18.DEFAULTS
19-ATTORNEYS, FEES
20-REMOVAL
21-PAYMENTS AND NOTICES
22.EMINENT DOMAIN
23.HOLDING OVER
24-ACCEPTANCE OF PREMISES BY LESSEE
25.SCOPE OF THE LEASE
26-AMENDMENT OF LEASE
27.CONSTRUCTION AND EFFECT
1
INDEX
45
Page Number
2
2
3
3
4
5
7
8
8
10
11
12
13
13
15
16
17
18
18
19
19
20
22
23
23
23
23
r •
THIS Lease, executed this 9dday of July, 1996, by and between the CITY
OF NEWPORT BEACH, a municipal corporation, hereinafter referred to as
"LESSOR ", and Donald S. Ross and Jillaine P. Ross, doing business as
Heritage Yacht Brokerage hereinafter referred to as "LESSEE."
1. LEASED PREMISES: In consideration of the rent herein
specified to be paid and the covenants and conditions to be observed
and performed by LESSEE, LESSOR does hereby Lease to LESSEE that
office space (hereinafter referred to as the "Premises ") delineated in
red on the attached Exhibit "A ", within a commercial building located
at 829 Bayside Drive, in the City of Newport Beach, County of Orange,
State of California, said building being a part of the development
known as "Balboa Yacht Basin," together with the non- exclusive right,
in common with other lessees and tenants of LESSOR, to the use of any
parking area(s) in the Balboa Yacht Basin which LESSOR may from time
to time designate for patron and employee parking.
2. TERM: The initial term of this Lease shall be for a period
of one (1) year, commencing on the 15th day of July, 1996,
( "Commencement Date ") and ending on the 15th day of July, 1997,
subject, however to earlier termination as hereinafter provided.
LESSEE may, at his option, extend the term of this Lease to
five (5) additional periods of one (1) year each provided that for any
extension LESSEE notifies the LESSOR in writing of his election to
extend at least sixty (60) days prior to expiration of the term of
2
this Lease ( "Extended Term ") and executes a Modification of this Lease
to increase the rent during the Extended Term to the current fair
market rent. LESSOR, at its sole discretion, will determine the
current fair market rent. Notwithstanding anything to the contrary,
if LESSEE is in default of his obligation under this Lease on the date
the Notice to Extend is given or the date the Extended Term is to
commence, the Extended Term shall not commence and this Lease shall
expire at the end of the last term in effect.
(a) LESSEE agrees to pay to LESSOR as rental for the use
and occupancy of the Premises the sum of sixteen thousand two hundred
dollars ($16,200) per year payable in monthly installments of thirteen
hundred fifty dollars ($1,350) in advance on or before the first day
of each month.
(b) Any payment due from LESSEE to LESSOR under the
provisions of this Lease which is not paid within seven (7) days of
the date due shall be subject to a late charge of $25.00 plus interest
on the amount due at the rate of ten percent (10) per annum from the
date due and payable by the terms of this Lease until the same shall
be paid. All payments hereunder shall be paid in lawful money of the
United States.
GMT'
(a) LESSOR shall pay and discharge all taxes, general and
special assessments which during the term of this Lease may be levied
3
upon or assessed against the Premises and all interest and all
improvements and other property thereon.
(b) During the term hereof LESSEE shall pay prior to
delinquency all taxes assessed against and levied upon fixtures,
furnishings, equipment and all other personal property of LESSEE
contained in the Premises, and when possible LESSEE shall cause said
fixtures, furnishings, equipment and other personal property to be
assessed and billed separately from the real property of LESSOR. In
the event any or all of the LESSEE'S fixtures, furnishings, equipment
and other personal property shall be assessed and taxed with the
LESSOR's real property, the 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 such taxes
applicable to LESSEE'S property.
• u
(a) During the term hereof LESSEE shall use and occupy the
Premises for the conduct of the business of yacht sales, and brokerage
and for no other use or purpose, except by and with the prior written
consent of LESSOR.
(b) No use shall be made or permitted of the Premises or
any part thereof, nor any acts done which shall constitute a nuisance
or unreasonable annoyance to other lessees in the Balboa Yacht Basin
or which shall violate, make inoperative or increase the existing rate
of any insurance policy held by or for the benefit of LESSOR. LESSEE
4
shall not sell, or suffer or permit to be kept, used or sold in, upon
or about the Premises, any gasoline, distillate or other petroleum or
nuclear product, or any substance or material of an explosive,
inflammable or radiological nature which may be prohibited by any
insurance policy held by or for the benefit of LESSOR, or which may
endanger any part of the Balboa Yacht Basin or its occupants, business
patrons or invitees, without the written consent of LESSOR and all
insurance companies carrying public liability, rental income, fire,
extended coverage, plate glass or other casualty insurance pursuant to
any provision hereof.
(c) LESSEE shall not commit or suffer to be committed any
waste upon the Premises, or any nuisance or act or thing which may
disturb the quiet enjoyment of any other LESSEE, concessionaire,
licensee or occupant in the Balboa Yacht Basin.
(d) LESSEE shall at all times comply with all governmental
rules, regulations, ordinances, statutes and laws now in force or
which may hereafter be in force pertaining to the Premises and to
LESSEE'S use of the Premises.
(e) Occupancy of the Premises after the date of
commencement of the term hereof shall constitute the acceptance by
LESSEE of the safety and good order and condition thereof.
•k.
A. Lessor's Approval. No repairs, alterations, changes
or additions shall be made to the Premises without LESSOR'S prior
5
0 0
written consent and LESSOR'S approval of prepared plans and
specifications showing such repairs or alterations. All such work
which may be done within the Premises by LESSEE shall be done pursuant
to LESSOR'S directions, and in compliance with local ordinances.
B. Repairs by Lessee. LESSEE shall keep all of the
Premises in such good repair, order and condition as found upon
commencement of the Lease Term or may be established by subsequent
changes, alterations, additions and repairs during the Lease Term,
excepting conditions resulting from reasonable use and wear. LESSEE
shall make such repairs as are required to preserve the Premises in
good repair, order and condition; provided, however, that LESSOR may
elect to make any such repairs at the expense of LESSEE, which expense
shall be due and payable upon demand therefor by LESSOR and thereupon
become a charge under this Lease. Notwithstanding the foregoing,
LESSOR shall make, at its expense, all repairs to the Premises
occasioned by the act or neglect of LESSOR, its agents or employees.
All repairs shall be of the quality and class equal to the original
work. LESSEE expressly waives all right to make repairs at LESSOR'S
expense under provision of Sections 1941 and 1942 of the Civil Code of
the State of California. Any alterations, improvements, changes or
repairs to the Premises shall become the property of LESSOR and shall
remain upon and be surrendered with the Premises subject to any rights
of removal contained in this Lease. LESSEE shall, at the expiration
of earlier termination of this Lease, surrender the Premises to LESSOR
in as good condition and repair as reasonable and proper use thereof
will permit.
C. No Eviction. Except as otherwise provided in
Paragraph 10, there shall be no allowance to LESSEE for diminution of
rental value and no claim by LESSEE for eviction from the Premises by
reasons of inconvenience, annoyance or injury to LESSEE arising from
any repairs, alterations, replacements or improvements made to the
Premises. LESSOR shall not be liable to LESSEE for failure to make
repairs to the Premises occasioned by the act or neglect of LESSOR or
its employees unless LESSOR has received from LESSEE written notice of
the need for such repairs and has failed to commence and diligently
complete such repairs within a reasonable time thereafter.
7. REPAIRS; LESSOR agrees, at its sole cost and expense to
keep and maintain in good order, condition and repair the foundations,
roof, exterior walls and structural portions of the building in which
the Premises are locations. LESSOR reserves the right at any time and
from time to time without the same 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 building and the Premises if required so to
do by any law or regulation. LESSOR may make minimal interior
maintenance and repairs which includes painting, plumbing and
electrical repairs but excludes custodial service. LESSOR may, after
7
reasonable notice, change the name, number and designation by which
the building is commonly known, as LESSOR may deem necessary or
desirable, and to change the arrangement or location of entrances or
passageways, doors and doorways and corridors, provided, however, that
there be no unreasonable obstruction of the right of access to, or
unreasonable interference with the use and enjoyment of, the Premises
by LESSEE. 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 care, supervision or repair of the
building or any part thereof other than as otherwise provided in this
Lease.
8. UTILITIES: LESSOR shall pay for all water, gas, heat, light,
power and trash removal services.
9. LIABILITY INSURANCE: Prior to the Commencement Date of this
Lease, LESSEE shall furnish the LESSOR with certificates showing the
type, amount, class of operations covered, effective dates and dates
of expiration of insurance policies. Such certificates, which do not
limit LESSEES' indemnification, shall also contain substantially the
following statement:
"The Insurance covered by this certificate will not be
canceled or materially altered, except after thirty (30)
days' written notice has been received by the LESSOR."
0
0
It is agreed that LESSEE shall maintain in force at all time
during the performance of this Lease all appropriate policies of
insurance, and that said policies shall be secured from a A.M. Best
Rated Company of A+ VII, acceptable to LESSOR, doing insurance
business in the State of California.
LESSEES shall maintain the following insurance coverage:
(a) Liability Insurance. The general liability coverage shall
provide the following minimum limits:
Bodily Injury $1,000,000 each occurrence
$1,000,000 aggregate
Property Damage $1,000,000 each occurrence
$1,000,000 aggregate
A combined single limit policy with aggregate limits in the
amount of one million dollars ($1,000,000) will be considered
equivalent to the required minimum limits. All said coverage to
include liability for occurrences on the Premises.
(b) Worker's Compensation. All employees of the LESSEE must
be included under such policy in an amount and with coverage to meet
all requirements of the Labor Code of the State of California.
(c) Subrogation Waiver. LESSEE hereby waives any and all
rights of recovery against LESSOR, or against the employees, agents
and representatives of LESSOR, for loss of or damage to LESSEE or its
property or the property of others under its control, where such loss
or damage is insured against under any insurance policy, whether or
9
not required by this Lease, in force at the time of such loss or
damage.
(d) Additional Insured. LESSOR, its City Council, boards and
commissions, officers, agents, servants, and employees shall be named
as an additional insured under the policies of insurance required by
this Lease. The naming of an additional insured shall not affect any
recovery to which such additional insured would be entitled under this
policy if not named as such additional insured; and an additional
insured named herein shall not be held liable for any premium or
expense of any nature on this policy or any extension thereof.
10.
(a) In the event the building in which the Premises are
located is damaged by fire, or perils covered by extended coverage
insurance, the LESSOR shall:
(1) In the event of total destruction, within a
period of ninety (90) days thereafter, commence repair, reconstruction
and restoration of said building and prosecute the same diligently to
completion in which event this Lease shall continue in full force and
effect; or within said ninety (90) day period elect not to so repair,
reconstruct or restore said building, in which event this Lease shall
cease and terminate. In either event, LESSOR shall give the LESSEE
written notice of its intention within said ninety (90) day period.
(2) In the event of a partial destruction of the
building to an extent not exceeding twenty -five percent (251.1-) of the
10
0 0
full insurable value thereof and if the damage thereto is such that
the building may be repaired, reconstructed or restored within a
period of ninety (90) days from the date of the happening of such
casualty, the LESSOR shall commence and proceed diligently with the
work of repair, reconstruction and restoration and the Lease shall
continue in full force and effect; or if such work of repair,
reconstruction and restoration is such as to require a period longer
than ninety (90) days or exceed twenty -five percent (25 %) of the full
insurable value thereof, the LESSOR may either elect to so repair,
reconstruct and restore and the Lease shall continue in full force and
effect or said LESSOR may elect not to repair, reconstruct or restore
and the Lease shall in such event terminate. Under any of the
conditions of the subparagraph provided, the LESSOR shall give written
notice to the LESSEE of its intention within the period of ninety (90)
days.
(3) In the event that a partial or total destruction
(as described in (1) and (2) above) of the building takes place during
the last six (6) months of the Lease term hereof, either the LESSOR or
LESSEE, at its option, may elect to terminate this Lease upon written
notice within thirty (30) days after such destruction.
(b) In the event of repair, reconstruction and restoration
as herein provided, the rental provided to be paid under Paragraph 3
hereof shall be abated proportionately in the ratio which the LESSEE'S
use of the Premises is impaired during the period of such repair,
11
0 0
reconstruction or restoration. The LESSEE shall continue the
operation of its business on the Premises during any such period to
the extent reasonably practicable from the standpoint of prudent
business management. The LESSEE shall not be entitled to any
compensation or damages for loss in the use of the whole or any part
of the Premises and /or any inconvenience or annoyance occasioned by
any such damage, repair, reconstruction or restoration.
11. RIGHT OF ENTRY: LESSEE shall permit LESSOR and its agents
to enter upon the 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. During the
last ninety (90) days
of
any
term of this lease and at any time
after
notice of termination
of
this
Lease has been given as provided in
this
Lease, LESSOR may place and maintain on the Premises customary "For
Sale" and /or "For Lease" signs and may, at all reasonable times, enter
the Premises for the purpose of displaying the Premises to prospective
lessees.
LESSOR or its agents may, during the progress of any work on the
Premises, keep and store upon the Premises all necessary materials,
tools and equipment
and LESSOR
shall not
in any
such event
be
liable
for inconvenience,
annoyance,
disturbance,
loss
of business
or
other
damage to LESSEE and the obligations of LESSEE under this Lease shall
not be affected.
12
0 0
12. SIGNS: LESSEE shall not erect or maintain or permit to be
erected or maintained any sign, marquee or awning on the Premises
without the prior written consent of LESSOR. LESSOR shall have the
right to approve the type and size, location and color of all signs
which LESSEE desires to use or place in or upon the Premises. The
LESSEE shall affix and maintain upon the glass panes and supports of
the show windows and within twelve (12) inches 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 the written approval of the LESSOR as to
size, type, color, location, copy, nature and display qualities.
13. SALES RESTRICTIONS: Excepting normal sales of moored boats,
LESSEE shall not display, sell or store merchandise outside the
defined exterior walls and permanent doorways of the Premises, and no
sale by auction in, upon or from the Premises, whether the auction be
voluntary, involuntary, pursuant to any assignment for benefit of
creditors or pursuant to any bankruptcy or other insolvency
proceedings, shall be conducted.
14. ASSIGNMENTS AND SUBLETTING:
(a) LESSEE may transfer or assign this Lease, or any right
or interest hereunder, or sublet the Leased Premises or any part
thereof, after first obtaining the prior written consent and approval
of LESSOR. Such consent will not be unreasonably withheld. LESSOR
hereby reserves the right to condition any such approval upon LESSOR'S
13
0 0
determination that the assignee or sublessee is (i) as financially
responsible as LESSEE and (ii) has demonstrated an ability and
willingness to pay or to operate a similar business generating a sales
volume sufficient to pay the yearly rent and make the monthly payments
as defined in Paragraph 3. No transfer or assignment, whether
voluntary or involuntary, by operation of law, under legal process or
proceedings, by receivership, in bankruptcy, or otherwise, and no
subletting, shall be valid or effective without such prior written
consent and approval. Should LESSEE attempt to make or suffer to be
made any such transfer, assignment 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 events 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 Paragraph and
the same shall apply to each successive transfer, assignment or
subletting hereunder, if any.
(b) If the LESSEE hereunder is a corporation, an
unincorporated association, or a partnership, the transfer, assignment
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
14
0 0
provisions of this Paragraph; provided, however, a transfer or
assignment or any such stock or interest by a shareholder or member to
his spouse, children or grandchildren is excepted from the foregoing
provision.
(c) If the 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); 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.
15. HOLD HARMLESS: LESSEE shall indemnify and hold harmless
LESSOR, its City Council, boards and commissions, officers, agents,
servants and employees from and against any and all actions, causes of
action, obligations, costs, damages, losses, claims, liabilities and
demands of any nature whatsoever, including reasonable attorneys' fees,
regardless of the merit or outcome of any such claim or suit, arising
from or in any manner connected to the use or possession of the
Premises by LESSEE conducted pursuant to this Lease.
LESSEE shall indemnify and hold harmless LESSOR, its City Council,
boards and commissions, officers, agents, servants and employees from
and against any and all actions, causes of action, obligations, costs,
damages, losses, claims, liabilities and demands of any nature
whatsoever, including reasonable attorneys' fees, accruing or resulting
to any and all persons, firms or corporations furnishing or supplying
15
• •
work, services, materials, equipment or supplies in connection with
services or work conducted or performed pursuant to this Lease by
LESSEE and arising out of such activities or work, and from any and all
claims and losses whatsoever, including reasonable attorneys' fees,
accruing or resulting to any person, firm or corporation for damage,
injury or death arising out of LESSEE'S use and possession of the
Premises.
Without limiting the generality of the foregoing, LESSEE hereby
agrees that the LESSOR, its City Council, boards and commissions,
officers, agents, servants and employees, shall not be liable for
injury to LESSEE'S business or any loss of income therefrom or for
damage to the goods, wares, merchandise, improvements or other
property of LESSEE, LESSEE'S employees, invitees, customers, or any
other person in or about the Premises, nor shall LESSOR, its City
Council, boards and commissions, officers, agents, servants and
employees be liable for injury to the person of LESSEE, LESSEE'S
employees, agents or contractors, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or
rain, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures, crime, or from any other cause, whether the said
damage or injury results of the building of which the Premises are a
part, or from other sources or places and regardless of whether the
cause of such damage or injury or the means of repairing the same is
16
i •
inaccessible to LESSEE. LESSOR, its City Council, boards and
commissions, officers, agents, servants and employees shall not be
liable for any damages arising from any act or neglect of any other
LESSEE, if any, of the building in which the Premises are located.
16. LIENS: LESSEE shall not permit to be enforced against the
Premises, or any part thereof, any mechanics', materialmen's,
contractors' or other liens arising from, or any claims for damages
growing out of, any work of repair or alteration as herein authorized
or otherwise arising (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 same against LESSOR or the Premises;
and LESSEE agrees to indemnify and hold LESSOR and the Premises free
and harmless from all liability for any and all such liens and claims
and all costs and expenses in connection therewith. LESSEE shall give
LESSOR no less than twenty (20) days' prior notice in writing before
commencing construction of any kind on the Premises so that the LESSOR
may post notices of non - responsibility.
17. 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 any 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 Premises, as
provided in this Lease, after ten (10) days' written notice from
17
i &
LESSOR, then LESSOR may, at its option, and without waiving or
releasing LESSEE from any of LESSEES 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 additional rent
hereunder and shall be paid by LESSEE with and at the same time as the
next installment of rent hereunder, and any default therein shall
constitute a breach of the covenants and conditions of this Lease.
18. DEFAULTS: The occurrence of any one (1) or more of the
following events shall constitute a material default and breach of
this Lease by LESSEE.
(a) The vacating or abandonment of the Premises by LESSEE.
(b) The failure by LESSEE to make any payment of rent
required to be made by LESSEE hereunder, as and when due, where such
failure shall continue for a period of three (3) business days after
written notice thereof from LESSOR to LESSEE.
(c) Except as specified In Subsection B, the failure by
LESSEE to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by LESSEE where
such failure shall continue for a period of ten (10) days after
written notice hereon from LESSOR to LESSEE; provided, however, that
HE
•
0
if the nature of LESSEE'S default is such that more than ten (10) days
are reasonable required for its cure, then LESSEE shall not be deemed
to be in default if LESSEE commenced such cure within said ten (10)
day period and thereafter diligently prosecutes such cure to
completion.
19. ATTORNEYS' FEES: LESSEE shall pay to LESSOR such amounts for
reasonable attorneys' fees incurred by LESSOR in connection with
LESSEE'S breach or default under this Lease. In addition, 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
attorneys' fees to be fixed by the court therein.
20. REMOVAL,: Upon the expiration of the term of this Lease, or
upon any earlier termination of this Lease, LESSEE shall quit and
surrender possession of the Premises to LESSOR in the same condition as
upon delivery of possession to LESSEE hereunder, reasonable wear and
tear and damages by fire, acts of God, the elements and unavoidable
casualty excepted. Before surrendering possession of the Premises as
aforesaid, LESSEE shall without expense to LESSOR, remove or cause to
be removed from the Premises all signs, furnishings, equipment, trade
fixtures, merchandise and other personal property installed or placed
therein, and all debris and rubbish, and LESSEE shall repair all damage
19
to the Premises resulting from such removal. If LESSEE fails to remove
any of its signs, furnishings, equipment, trade fixtures, merchandise
or other personal property within ten (10) days after the expiration or
termination of this Lease, then LESSEE may, at its sole option (a)
treat LESSEE as a holdover in which event the provisions of Paragraph
24 shall apply; or (b) deem any or all of such items abandoned and the
sole property of LESSOR; or (c) 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 deposition or storage shall be borne by LESSEE and
shall be immediately due and payable.
21. PAYMENTS AND NOTICES: All rents and other sums payable by
LESSEE to LESSOR hereunder shall be paid to LESSOR at its business
office at CITY OF NEWPORT BEACH, ADMINISTRATIVE SERVICES, 3300 NEWPORT
BOULEVARD, P.O. BOX 1768, NEWPORT BEACH, CALIFORNIA, 92658 -6915, or at
such other place as LESSOR may hereafter designate in writing.
Any notice to be given or other document to be delivered by either
party to the other hereunder may be delivered in person to an officer
of LESSOR or to LESSEE or any officer of LESSEE, if a corporation, or
may be deposited in the United States mail in Orange County, State of
California, duly registered or certified, postage prepaid, and
addressed to LESSOR at its said business office and to LESSEE at the
addresses designated below. Either party hereto may from time to time,
by written notice to the other, served in the manner herein provided,
designate a different address. If any notice or other document is sent
20
• •
by mail, as aforesaid, the same shall be deemed served or delivered
twenty -four (24) hours after the mailing thereof. If more than one (1)
lessee is named under this Lease, service of any notice upon any one of
said lessees shall be deemed as service upon all of said LESSEES.
Address of LESSEE:
22. EMINENT DOMAIN:
(a) Definition of Terms: The term "total taking" as used in
this Paragraph means the taking of the entire Premises under the power
of eminent domain or a taking of so much of the Premises as to prevent
or substantially impair the conduct of LESSEES business therein. The
term "partial taking" means the taking of a portion only of the
Premises which does not constitute a total taking as above defined.
(b) Total Taking: If during the term hereof there shall be a
total taking by public authority under the power of eminent domain,
then the Leasehold estate of LESSEE in and to the Premises shall cease
and terminate as of the date actual physical possession thereof shall
be so taken.
(c) Partial Taking: If during said term there shall be a
partial taking of the Premises, this Lease shall terminate as to the
portion of the Premises taken upon the date upon which actual
possession of said portion of the Premises is taken pursuant to said
eminent domain proceedings, but said Lease shall continue in force and
effect as to the remainder of the Premises. The yearly rent and
monthly payment by LESSEE for the balance of said term shall be abated
21
in the ratio that the square footage of floor area of the Premises
taken bears to the total floor area of the Premises at the time of
such taking.
(d) Allocation of Award: All compensation and damages
awarded for the taking of Premises or any portion or portions thereof,
shall, except as otherwise herein provided, belong to and be the sole
property of LESSOR, and LESSEE shall not have any claim or be entitled
to any award for diminution in value of its Leasehold hereunder or for
the value of any unexpired term of this Lease; provided, however,
LESSEE shall be entitled to any award that may be made for the taking
of or injury to on account of any cost or loss LESSEE may sustain in
the removal of LESSEE'S fixtures, equipment and furnishings.
(e) Effect of Termination: If this Lease is terminated, in
whole or in part, pursuant to any of the provisions of this Paragraph,
all rentals and other charges payable by LESSEE to LESSOR hereunder and
attributable to the Premises taken, shall be paid up to the date upon
which actual physical possession shall be taken by the condemnor, and
the parties shall thereupon be released from all further liability in
relation thereto.
(f) Voluntary Sales: A voluntary sale by LESSOR to any
public body or agency having the power of eminent domain, either under
threat of condemnation or while condemnation proceedings are pending,
shall be deemed to be a taking under the power of eminent domain for
the purposes of this Paragraph.
22
23. HOLDING OVER: This Lease shall terminate and become null and
void without further notice upon the expiration of the term herein
specified, and any holding over by LESSEE after such expiration shall
not constitute a renewal hereof or give LESSEE any rights under this
Lease, except as otherwise herein provided, LESSOR and LESSEE
understand and agree that this Lease cannot be renewed, extended or in
any manner modified except in writing signed by both parties hereto;
provided, however, that nothing in this Paragraph shall be construed to
alter or impair the provisions of Paragraph 21 hereof. If LESSEE shall
hold over for any period after the expiration of any term, LESSOR may,
at its option, exercised by written notice to LESSEE, treat LESSEE as a
tenant from month -to -month commencing on the first day following the
expiration of this Lease and subject to the terms and conditions herein
contained except that the monthly payments, which shall be payable in
advance, shall be one hundred fifty percent (150%5) of said monthly
payments applicable at the date of expiration. If LESSEE fails to
surrender the Premises upon the expiration of this Lease despite demand
to do so by LESSOR, LESSEE shall indemnify and hold LESSOR harmless
from all loss or liability, including without limitation, any claims
made by any succeeding LESSEE founded on or resulting from such failure
to surrender.
24. ACCEPTANCE OF PREMISES BY LESSEE: By taking possession of
the Premises, LESSEE accepts the improvements in the condition in which
they may then be, and waives any right or claim against LESSOR arising
23
, • •
out of the condition of the Premises, including the improvements
thereon, the appurtenances thereto, and the equipment thereof.
25. SCOPE OF THE LEASE: This Lease is and shall be considered to
be the only agreement between the parties hereto. All negotiations and
oral agreements acceptable to both parties are included herein.
26. AMENDMENT OF LEASE: No amendment or other ratification of
this Lease shall be effective unless in a writing signed by all parties
to this Lease.
27. CONSTRUCTION AND EFFECT: Time is of the essence of this
Lease. The Paragraph headings herein are used only for the purpose of
convenience and shall not be deemed to contain or limit the subject
matter of the Paragraphs hereof, nor to be considered in the
construction thereof. Each and all of the obligations, covenants,
conditions and restrictions of this Lease shall inure to the benefit of
and be binding upon and enforceable against, as the case may require,
the successors and assigns of LESSOR, and subject to the restrictions
of Paragraph 14 hereof, any authorized assignee, transferee, subleasee
and other successor in interest of LESSEE.
In this Lease the neuter gender includes the feminine and
masculine and the singular number includes the plural wherever the
context so requires. If more than one LESSEE is named above, the
obligation of each of such LESSEES hereunder shall be and is joint and
several.
24
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
to be executed on the day and year first above written.
APPROVE AS TO FORM:
CITY ATTORNEY
q/fC1�
ATTEST:
CITY CLERK
25
LESSOR
CITY OF NEWPORT BEACH
a municipal corporation
BY:
_It 'j
MAYOR
LESSEE:
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