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Home My WebLink AboutC-3248 - East Balboa Blvd, 707 - Lease 1998 (Balboa Theater)RECORDING REQUE1V80I WHEN RECORDED RETURN TO: City Clerk FEB 26 A8:46 City of Newport ach P.O. Bos 1768 �C iYE S`CT,H,� Ci;y, GERK Newport Beach, C� 9�6 &�01MACfi TITLE OF DOCUMENT: 0 Recorded in Official Records, County of Orange Gary Granville, Clark-Reeorder 1M1110111131111111110NO FEE 201MB725912:35pm OW16101 114 27 A17 6 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 THIS SPACE FOR RECORDER'S USE Exempt Recording Request per Government Code 6103 Third Amendment to Lease By and Between the City of Newport Beach and the Balboa Performing Arts Theatre Foundation Recording Reference: Lease: 19990066742, 1/29/99 . First Amendment: 20000181651, 4/10/00 Second Amendment: 20000181652, 4/10/00 0 I] 5b THIRD AMENDMENT TO LEASE BY AND BETWEEN THE CITY OF NEWPORT BEACH AND THE BALBOA PERFORMING ARTS THEATRE FOUNDATION This Third Amendment to Lease, entered into as of December ta'k 2000, (Effective Date) by and between the City of Newport . Beach, a Charter City and municipal corporation ("Lessor") and Balboa Performing Arts Theatre Foundation ("Lessee"), is made with reference to the following: RECITALS A. Lessor and Lessee entered into a ground lease (Original Lease) on November 23, 1998. B. Lessor and Lessee approved the First Amendment to the Original Lease on September 27, 1999, modifying the insurance obligations of Lessee. C. Lessor and Lessee approved the Second Amendment to the Original Lease on December 13, 1999, deleting the requirement for interior improvements to be consistent with the Guidelines for the Rehabilitation of Historic Structures ("Guidelines") published by the Secretary of the Interior. D. Lessor and Lessee agree that further amendments to the Original Lease are necessary to modify provisions that require certain exterior improvements to be consistent with the Guidelines. E. Lessor and Lessee agree that the modifications to provisions related to exterior improvements: are. necessary. to. achieve the primary goal off the lease. -which is the reconstruction and use of the building as a venue for live theatre performances and other events that require dressing rooms and related facilities. NOW, THEREFORE, Lessor and Lessee hereby agree as follows: ARTICLE 1 AMENDMENT TO ARTICLE 9, REQUIRED IMPROVEMENTS Paragraph 9.3 of the Lease is amended to read as follows: Lessee shall prepare, and submit to Lessor for approval, a proposed conceptual plan for the design, construction, furnishing and equipping of the Property for use as a theatre (Conceptual Design Plan). The Conceptual Design Plan shall be prepared by a licensed architect. The Conceptual Design Plan shall generally describe those elements typically included in preliminary Conceptual Design Plans for the renovation and rehabilitation of a theatre constructed in the 1920:s. The Conceptual Design Plan shall include, without limitation, (1) seating layout 0 1'.a: and design; (2) stage and dressing room layout and design; (3) lobby and concession area design; (4) structural modifications necessary to comply with uniform codes; (5) interior design elements and treatment; (6) exterior design and treatment; (7) sound and projection systems; (8) lighting systems and design; (9) public area layout, design and treatment; and (10) stage, orchestra pit and roll - down backdrop design and treatment. Lessor's right to approve the Conceptual Design Plan shall be limited to ensuring that the improvements contemplated are consistent with a first class community theatre and that the exterior design and treatment of the front fagade return it as close as possible to its original appearance. The Conceptual Design Plan shall be deemed approved N Lessor fails to serve written notice of disapproval within thirty (30) days following submittal. Lessor's approval shall not be unreasonably withheld and any disapproval by Lessor shall specify with particularity the components of the Conceptual Design Plan disapproved, the reasons for disapproval and alternatives that Lessor would approve. The Parties shall agree, on a Conceptual Design Plan within sixty (60) days of submittal. ARTICLE 2 AMENDMENT TO ARTICLE 12, ALTERATIONS Paragraph 12.1 is amended to read as follows: Except as otherwise provided in this Article, Lessee shall obtain the written consent of Lessor prior to making any structural or nonstructural alterations to the Property. All structural and nonstructural alterations to the exterior of the Property, especially the front fagade, shall conform to the Theatre's designation as a local landmark and shall be consistent with the original design and architecture of the Theatre. Lessee shall be solely responsible for all costs and expenses incurred in making any alteration. All alterations shall be surrendered with the Property when this Lease expires or terminates. ARTICLE 3 NO AMENDMENTS TO REMAINDER OF LEASE All other provisions of the Lease shall remain in force and effect in their original form or as amended by agreement of the Parties. . - FOR LESSOR CITY OF NEWPORT BEACH -a Dated t"7— — 'A — 0' o Mayor 2 FOR LESSEE BALBOA PERFORMING ARTS THEATRE FOUNDATION President�r4ZX, AIL "TO F CITY JO NEWPORT BEACH ACity Attorney ATTEST: CITY OF NEWPORT BEACH �61h,A,A� LaVonne Harkless City Clerk 0 i 0 Ci ms!jorl a uA0199 uly Oran, ounry .31 MM :3 M 0 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of On ; U"� before me.\ aL � � �',{ -,,A J personally appeared ------------- Ple Nmery Seal AE e &] personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(K whose namew Pis subscribed to the wi instrumen and acknowledged to mha h shetthey executed the same in hi her/their thorized capacity(. ), and that by ih91 their signature on the instrument the personj, or the entity upon behalf of which the person acted, executed the instrument. I SS m� hand and offs ial se I. 519 rt rloleryP ft OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of AttachedDgycumer�t / Title or Type of Document h : I d1 �iryl4x.�N�1 �ii 1. Z �t`�% t Document Date: ` d ) ci Number of Pages: v Signer(s) Other Than Named Above: k Capacity(les) Claimed.by Signer Y 0, } 0,r } etrj Signer's Name: 1! �� 1 J n Now ❑ Individual Top of 9prmb Here ❑ Corporate Officer — Title(s): ❑ Partner —❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ .Guardian or Conservator ❑ Other. Signer Is Representing: 01997 NvtkM1 Nmery Aemebtlen • 9359 De SHAW. P.O. amr 2112 • CMb-v9r, CA 91313-M Pmd. No. 5W Reareer cm lafm 11800E7"W 9 !I CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT' State of CaliforniaalI ss. J (o-w� cwt— County of IJ Onefore me, ✓1 C'•� �u! f (�� 7'+M +?�0� r L, ONe a ; mi TAH a QAker (e.y.'lwp Doe. Nota W personally appeared ------------- !AA ------- personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(f whose name(ois/ re subscribed to the within trument and acknowledged to me th sh hey executed the same in his their auth rized capacity( ), and that by his ie their: signatureon the instrument the person(W, or the entity upon behalf of which the person acted, executed the instrument. ESS y hand and Il seal. Place Notary Seel Above of No PUNIC OPTIONAL Though the information below is not required by law, IT may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached ment1 0 , ,,� Title or Type of Document: t fJt Document Date: r `� 0 Number of Pages: Signer(s) Other Than Named Above: Caner's (les) Claimed.by Signer Signers Name: ❑ Individual ❑ Corporate Officer —Trde(s): ❑ Partner — ❑Limited ❑General ❑ Attorney in Fact 0 Trustee ❑ Guardian or Conservator ❑ Other: _ Signer Is Representing: RIGHT THUM13PRI%Y OF SIGNER O 1987 Ne0"I NOHry Assocbtian • 9350 De Sob Ave.. P.O. Box 2102 • ChalswoAl%CA 9131}2{02 Prod. No. 5807 Remota: Call TWWM D( kl RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Clerk City of Newport Beach P. O. Bos 1768 Newport Beach, CA 92658-8915 TITLE OF DOCUMENT: RECEIV =0 '00 RPR 14 119 :()3 Recorded in Official Records, County of Orange Gary Grenville, Clerk k WIR11 J0 I No Fee 20000181652 09:54am 041101W 116 16 AIT S 0.00 0.00 0.00 12.00 0.00 0.00 0.00 THIS SPACE FOR USE ONLY. Exempt Recording Request per Government Code 6103 Second Amendment to Lease by and between the City of Newport Beach and the Balboa Performing Arts Theatre Foundation M LEASE BY AND BETWEEN THE CITY OF NEWPORT BEACH AND THE BALBOA PERFORMING ARTS THEATRE FOUNDATION This Amendment, entered into as of December /3 , 1999, (Effective Date) by between the City of Newport Beach, a Charter City and municipal corporation ("Lessor") and Balboa Performing Arts Theatre Foundation ("Lessee"), is made with reference to the following: RECITALS A. Lessor and Lessee entered into the subject lease as of November 23, 1998. (Recorded in the County of Orange, California; 19990066742; 01/79/99) B. Lessor and Lessee approved the First Amendment to the subject lease on September 27, 1999, which amendment altered the insurance requirements of Lessee. C. The parties agree that the existing lease requirement for required improvements and other alterations to be consistent with the Guidelines for the Rehabilitation. of Historic Structures published by the Secretary of the Interior goes beyond the goals of the parties. NOW, THEREFORE, Lessor and Lessee hereby agree as follows: ARTICLE 1 AMENDMENT TO ARTICLE 9, REQUIRED IMPROVEMENTS Paragraph 9.3 of the Lease is amended to read as follows: Lessee shall prepare, and submit to Lessor for approval, a proposed conceptual plan for the design, construction, furnishing and equipping of the Property for use as a theatre (Conceptual Design Plan). The Conceptual Design Plan shall be . prepared by a licensed architect. The Conceptual Design Plan shall generally describe those elements typically included in preliminary Conceptual Design Plans for the renovation and rehabilitation of a theatre constructed in the 1920's. The Conceptual Design Plan shall include, without limitation, (1) seating layout and design; (2) stage and dressing room layout and design; (3) lobby and concession area design; (4) structural modifications necessary to comply with uniform codes; (5) interior design elements and treatment; (6) exterior design and treatment; (7) sound and projection systems; (8) lighting systems and design; (9) public area layout, design and treatment; and (10) stage, orchestra) pit and roll -down backdrop design and treatment. Lessor's right to approve the Conceptual Design Plan shall be limited to ensuring that the improvements contemplated are consistent with a first class community theatre and that the exterior design and treatment are reasonably consistent with the Guidelines for the Rehabilitation of Historic Structures published by the Secretary of the Interior. The Conceptual Design Plan shall be deemed approved if Lessor fails to serve written notice of disapproval within thirty (30) days following submittal. Lessor's approval shall not be unreasonably withheld and any disapproval by Lessor shall specify with particularity the components of the Conceptual Design Plan disapproved, the reasons for disapproval and alternatives that Lessor would approve. The Parties shall agree on a Conceptual Design Plan within sixty (60) days of submittal. ARTICLE 2 AMENDMENT TO ARTICLE 12, ALTERATIONS Paragraph 12.1 is amended to read as follows: Except as otherwise provided in this Article, Lessee shall obtain the written consent of Lessor prior to making any structural or nonstructural alterations to the Property. All structural and nonstructural alterations to the exterior of the Property shall conform to the Theatre's designation as a local landmark and shall be consistent with the original design and architecture of the Theatre as well as the Guidelines for the Rehabilitation of. Historic Structures published by the Secretary of the Interior. Lessee shall be solely responsible for all costs and expenses incurred in making any alteration. All alterations shall be surrendered with the Property when this Lease expires or terminates. ARTICLE 3 NO AMENDMENTS TO REMAINDER OF LEASE All other provisions of the Lease shall remain in force and effect in their original form or as amended by agreement of the Parties. FOR LESSOR Dated 3 (l qI C o 53 FOR LESSEE BALBOA PERFORMING ARTS THEATRE FOUNDATION Dipa Pefttit President ,OVED AS TO FORM OF NEWPORT BEACH Robert H. Burnham City Attorney ATTEST: CITY OF NEWPORT BEACH "qC�, )'J. LaVonne Harkless City Clerk Dated 3 —IF _'eiv Dated ? 1 iL( Od Dated 9 3 Sa.. 0 0 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Q: before me, personally appeared personally known to me proved to me on the basis of satisfactory evidence to be the perso (s whose nam (s isl� subscribed to th within In ext and acknowledged to me that he/ the executed the sa in his/he hei author' capacity ' and that by his/he ei signature�on the instrument the perso s or the entity upon behalf of which the perso s) acted, executed the instrument. ESS my hand and offs ial seal Place Notary Seel Above 509ru ream tarymum OPTIONAL Though the Information below is riot required by taw, it may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached D cp ument� Title or Type of Document: Y� Document Date: , rc> 3 —9 Number of Pages: Signer(s) Other Than Named Above: Capacity(les) Claimed by Signer Signer's Name: ❑ Individual i Corpors'aO"cer—Title(s): _ Partner—❑ Limited 11 General Attorney in Fact Trustee ❑ Guardian or Conservator ❑ Other. Signer Is Representing: RIGHT THUMBPRINT OF SIGNER O 1997 National NderyAnodalbn •9550 DB SotoAm., P.O. Boz 2402 • Chd*woM, CA 913134402 prod No. 5907 Reorder. Can TaOPrea 1-80"76-61127 • 0 0 • RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City Clerk City of Newport Beach P. O. Bog 1768 Newport Beach, CA 92658-8915 TITLE OF DOCUMENT: i R E C E 1 V EC TftecMeA 4n Mci"ecords, County of Orange Gary Granville, Clerk -Recorder OFFIG_INIIMIIUflNNiIgIfl81(�II�I No Fee c`z c� 09.54am 04110100 116 16 A17 4 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 THIS SPACE FOR RECORDER'S USE ONLY. Exempt Recording Request per Government Code 6103 First Amendment to Lease by and between the City of Newport Beach and the Balboa Performing Arts Theatre Foundation LO • • P FIRST AMENDMENT TO • LEASE BY AND BETWEEN THE CITY OF NEWPORT BEACH AND THE BALBOA PERFORMING ARTS THEATRE FOUNDATION This Amendment, entered into as of September a7 , 1999, (Effective Date) by between the City of Newport Beach, a Charter City and municipal corporation ("Lessor") and Balboa Performing Arts Theatre Foundation ("Lessee"), is made with reference to the following: RECITALS A. Lessor and Lessee entered into the subject lease as of November 23, 1998. (Recorded in the County of Orange, California; 19990066742; 01/29/99) B. The parties agree that the insurance requirements in the original Lease are greater than needed for protection of the public interest, and desire to amend those requirements so as to increase the Foundation's economic viability and ability to meet the other requirements of the Lease. • NOW, THEREFORE, Lessor and Lessee hereby agree as follows: ARTICLE 1 AMENDMENT TO ARTICLE 16, INSURANCE Paragraph 16.1.1 of the Lease is amended to read as follows: 16.1.1 Comprehensive General Liability in an amount not less than two million dollars ($2,000,000) combined single limit per occurrence. Lessor and its officials, employees and representatives shall be covered as additional insureds with respect to liability arising out of activities by or on behalf of Lessee or in connection with the use or occupancy of the Property. Coverage shall be in a form acceptable to Lessor and shall be primary and non-contributing with any insurance or self-insurance maintained by Lessor or Lessee. Any third party permitted to use the Property pursuant to Paragraph 8.1 of this Lease shall provide the same insurance, unless this requirement is waived or modified, in writing, by Lessor's City Manager. • 0 • • • 0 0 ARTICLE 2 NO AMENDMENTS TO REMAINDER OF LEASE All other provisions of the Lease shall remain in force and effect in their original form. FOR LESSOR CITY OF NEWPORT BEACH XS� r l% Dennis O'Neil Mayor FOR LESSEE BALBOA PERFORMING ARTS THEATRE FOUNDATION Dayna Pettit President APPROVED AS TO FORM CITY OF NEWPORT BEACH ATTEST: CITY OF NEWPORT BEACH LaVonne Harkless City Clerk Dated Dated Dated I ' t I Dated XCllq A 2 kf 9 0 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of ss. t�(3i~,f'� C1�-� Onr,M CL NtL&16'efore me, personally appeared MIZO CATHY FISHER %Commission# 1174324 Notary Public - Caltfanlo Orange County My Comm. Eip1ea Feb21, 2= S\-� personally known to me ❑ proved to me on the basis of satisfactory evidence to be the erso s whose nacos is/ re p (} subscribed to th within Inst ent a acknowledged to me that he/ hey xecuted the sa in his/he hei uthorl capacity and that by his/he air signatur s n the instrument the perso (s the entity upon behalf of which the perso (s acted, executed the instrument. I U=A;L=C_ Place Nalary Scal Above Sig Zeas o ola ic Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons retying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Title or Type of Document: _ Document Date: 21— a 1) - 1 - \ Number of Pages: a Signer(s) Other Than Named Above: Capacity(les) Claimed by Signer Signer's Name: ❑ Individual Top of thumb here ❑ Corporate Officer —Tdle(s): ❑ Partner—Ci Limited ❑ General ❑ Attorney in Fad ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer is Representing: -N 'N 'y y p* N N N 'N H d N N Y 'd 'G' 'u* 'd -N • - .flit • • is r� U Y L i%i--3., RE C.". y RECORDING REQUESTED AND WHEN R OE�@EQ R[rIQRN TO: City Clerk's Office City of vys4i# B aeir� 4 �l� 3300 N�wdort BtlureV8,rga% P.O. Box 1768 Newport Beach, CA 92658-8915 L7 Recorma in the county of orange, cailfornsa Ga L. Granville, /Reaallo Fee 19996066742 1:10pm 01/29/99 005 11011852 11 19 L02 43 6.00 126.00 0.00 0.00 0.00 129.00 Space above this line for Recorder's use only. Exempt Recording Request per Government Code 6103 Contract No. 3248 L EAS E BY AND BETWEEN THE CITY OF NEWPORT BEACH ►0 THE BALBOA PERFORMING ARTS THEATRE FOUNDATION !) Table of Contents • Page ARTICLE 1 SUBJECT OF LEASE............................................................................. 2 1.1 Purpose of the Lease............................................................................... 2 1.2 The Property............................................................................................. 2 1.3 Lessor...................................................................................................... 2 1.4 Lessor...................................................................................................... 2 ARTICLE 2 LEASE OF PROPERTY.......................................................................... 2 2.1 Lease of Proyertv..................................................................................... 3 2.2 Condition of Title...................................................................................... 3 ARTICLE 3 POSSESSION OF PROPERTY............................................................... 3 3.1 Quiet Employment.................................................................................... 3 3.2 Condition of Property............................................................................... 3 3.3 Ownership of Improvements.................................................................... 3 3.4 Surrender of Property............................................................................... 4 3.4.1......................................................................................................... 4 3.4.2......................................................................................................... 4 3.4.3......................................................................................................... 4 ARTICLE 4 TERMIOPTION TO PURCHASE............................................................. 4 4.1 Duration and Commencement 4 4.2 ................................................................. Option to Extend...................................................................................... 4 4.3 Option to Purchase.................................................................................. 4 4.3.1......................................................................................................... 5 4.3.2....................................................................................7*................- 5 4.3.3................................................................:........................................ 5 4.3.4.......:................................................................................................. 5 4.3.5 ................. .................................................... .................................... 5 4.4 Option - Purchase Price............................................................... :........... 5 4.5 Right of First Refusal................................................................................ 5 ARTICLE 5 RENTICONSIDERATION........................................................................ 5 5.1 No Money Payable by Lessee................................................................. 5 5.2 Other Consideration................................................................................. 6 5.2.1........................................................:................................................ 6 5.2.2......................................................................................................... 6 5.2.3......................................................................................................... 6 5.2.4......................................................................................................... 6 5.2.5......................................................................................................... 6 ARTICLE 6 CONTRIBUTIONS FUND........................................................................ 6 Page ARTICLE 7 ANNUAL BUDGET/OPERATION AND MARKETING PLAN . ............... 6 7.1 Budget/Timing .......................................................................................... 6 7.1.1 Initial Budget.................................................................................. 6 7.1.2 Proposed Revision........................................................................ 7 7.1:3 Year End Financial Statement....................................................... 7 7.1.3 Proposed Revision........................................................................ 7 7.1.4 Year End Financial Statement....................................................... 7 7.2 Contents of Budget.................................................................................. 7 7.3 Operations and Marketing Plan................................................................. 7 7.4 Records..................................................................................................:. 8 7.5 Audit.........................................:............................................................... 8 ARTICLE 8 USE OF PROPERTY................................................................................ 8 8.1 Permitted Use........................................................................................... 8 8.2 Performances/Frequency...........................................................................8. 8.2.1....................................................................................................... 9 8.2.2....................................................................................................... 9 8.2.3 ........................................ ...................................................... :........ 9 8.3 Program Standards................................................................................... 9 8.3.1....................................................................................................... 9 8.3.2....:.................................................................................................. 9 8.3.3....................................................................................................... 9 8.3.4....................................................................................................... 9 8.4 Cooperation.............................................................................................. 9 8.5 Change of Use........................................................................................ 10 8.6 Compliance with Laws............................................................................ 10 8.7. Zoning and Planning............................................................................... 10 8.8 Nondiscrimination.................................................................................... 10 8.8.1..................................................................................................... 10 8.8.2 ................................... 10 .................................................................. 8.8.3..................................................................................................... 11 ARTICLE 9 REQUIRED IMPROVEMENTS............................................................... 11 9.1 Lessee's Obligations............................................................................... 11 9.2 Seismic Retrofit/Remediation................................................ .................. 11 9.3 Conceptual Design Plans.: .................................................................... - 12 9.4 Design Development Plan....................................................................... 12 9.5 Final Plans and Specifications................................................................ 13 9.6 Building Permits...................................................................................... 13 9.7 Construction of Required Improvements .................:............................... 13 9.8 General Requirements............................................................................ 14 9.8.1 .................. ................................................................................. ..... 14 9.8.2........................................................................................................ 14 9.9 Extensions.......................................................................................:...... 14 • Page ARTICLE 10 REPAIRS AND MAINTENANCE ................................................. 14 ARTICLE 11 STATUS AND MANAGEMENT OF LESSEE..: ........................... 15 11.1 Nonprofit Status...................................................................................... 15 11.2 Executive Committee and Advisory Committee ...................................... 15 11.3 Employment of Staff................................................................................ 15 ARTICLE 12 ALTERATIONS............................................................................ 16 12.1 Written Consent...................................................................................... 16 12.2 Notice of Non-responsibility.................................................................... 16 ARTICLE 13 PAYMENT OF UTILITIES, TAXES, CHARGES AND FEES ....... 16 13.1 Public and Private Utility Services........................................................... 16 13.2 Taxes, Assessments. Fees and Charges ............................................... 16 13.3 Proof of Payment.................................................................................... 17 13.4 Payment by Lessor................................................................................. 17 13.5 Property Taxes not Valid.....................................................I.................... 17 13.6 Notice of Possessory Interest: Payment of Taxes and Assessments on Value of Entire Lease Premises......................................................... 17 ARTICLE 14 LIENS........................................................................................... 17 14.1 Indemnification...................................................... :................................. 17 14.2 Satisfaction of Liens................................................................................ 18 14.3 14.4 Notice to Lessor...................................................................................... Notice of Non-Responsibilitv................................................................... 18 18 ARTICLE 15 INDEMNIFICATION..................................................................... 18 15.1 Indemni................................................................................................18 15.2 CERCLA Liability..................................................................................... 19 15.3 Expense of Proceedings......................................................................... 19 15.4 Release...................................................................................................19 15.5 Waiver of California Civil Code Section 1542 .......................................... 19 15:6 Definition of Hazardous Materials........................................................... 20 ARTICLE 16 INSURANCE................................................................................ 20 16.1 Insurance to be Maintained..................................................................... 20 16.1.1...................................................................................................... 20 16.1.2 ....................................................... :.................................... .......... 20 16.1.3...................................................................................................... 20 16.1.4...................................................................................................... 21 16.2 Acceptable Terms of Coverage............................................................... 21 16.3 Index....................................................................................................... 21 16.4 Waiver of Subrogation............................................................................. 21 0 • Page ARTICLE 17 DAMAGE BY FIRE OR CASUALTY ............................................ 22 17.1 Lessee to give Notice. ............................................................................. 22 17.2 Restoration...............................................................:..............................22 17.3 Casualty Late in Term............................................................................. 22 17.4 Acceptable of Insurance Proceeds......................................................... 23 17.4.1...................................................................................................... 23 17.4.2...................................................................................................... 23 17.4.3 .................................................. :........................................ :........... 23 ARTICLE 18 . EMINENT DOMAIN..................................:................I.................: 23 18.1 Lease Governs........................................................................................ 23 18.2 Termination of Lease.............................................................................. 23 18.3 Partial Taking - Restoration..................................................................... 24 18.4 Distribution of Award............................................................................... 24 18:5 Allocation of Award - Partial Taking........................................................ 24 18.5.1...................................................................................................... 24 18.5.2...................................................................................................... 24 18.5.3...................................................................................................... 24 18.6 Allocation of Award - Temporary Taking ................................................. 24 18.7 Allocation of Award - Total Taking.......................................................... 24 18.7.1...................................................................................................... 25 18.7.2...................................................................................................... 25 18.8 Conduct of Proceedings.......................................................................... 25 18.9 Notices..........................:.........................................................................25 ARTICLE 19 ASSIGNMENT AND SUBLETTING ............................................. 25 ARTICLE 20 LEASEHOLD MORTGAGES ............................ :.......................... 25 ARTICLE 21 PERFORMANCE OF LESSEE'S COVENANTS .......................... 25 21.1 Right of Performance.............................................................................. 25 21.1.1...................................................................................................... 26 21.1.2...................................................................................................... 26 21.1.3...................................................................................................... 26 21.2 Reimbursement and Damages............................................................... 26 ARTICLE 22 REPRESENTATIONS...........................................................:...... 26 22.1 Lessor's Representations........................................................................ 26 22.1.1 ....................... .......................................................................... :.... 26 22.1.2 ....................................................... :....................... :...................... 26 22.2 Lessee's Representations....................................................................... 26 22.2.1...................................................................................................... 26 22.2.2...................................................................................................... 26 22.2.3 .................... -- ---------------- ---------------------------------------------------------- 27 22.2.4...................................................................................................... 27 1* -iv- 0 0 Page ARTICLE 23 DEFAULTS, REMEDIES AND TERMINATION ..........................: 27 23.1 Legal Actions ............... ............. .............................................................. 27 23.1.1 Institution of Legal Actions ................................................ 27 23.1.2 Applicable Law.................................................................. 27 23.2 Rights and Remedies are Cumulative.................................................... 27 23.3 Occurrence of Default .................................... :......... :.............................. 27 23.3.1........................................................................................... 27 23.3.2.......................................................................................... 28 23.3.3...........................................................................................28 23.3.4........................................................................................... 28 23.3.5..........................................................................................: 28 23.4 Remedies............................................................................................:..28 23.4.1........................................................................................... 28 23.4.2........................................................................................... 28 23.4.3........................................................................:..............:... 28 ARTICLE 24 PERMITTED CONTESTS............................................................ 29 ARTICLE 25 ENTRY BY LESSOR.................................................................... 29 ARTICLE 26 FORCE MAJEURE...................................................................... 29 ARTICLE 27 MISCELLANEOUS...................................................................... 29 27.1 Notices....................................................................................................:29 27.2 No Claims Against Lessor....................................................................... 30 27.3 Integration ................................................................................ :.............. : 30 27.4 No Waiver By Lessor.............................................................................. 30 27.5 Severability .............................................................................................31 27.6 Holding Over........................................................................7.................1 31 27.7 No Partnership........................................................................................ 31 27.8 Federal Funds Provisions....................................................................... 31 27.9 Time of the Essence................................................................................ 32 -v- • LEASE BY AND BETWEEN THE CITY OF NEWPORT BEACH AND THE BALBOA PERFORMING ARTS THEATRE FOUNDATION This Lease ("Lease"), entered into as of November 23, 1998 (Effective Date) by and between the City of Newport Beach, a Charter City and municipal corporation ("Lessor") and the Balboa Performing Arts Theatre Foundation ("Lessee"), is made with reference to the following: RECITALS A. Lessor is the owner of the property, structures and improvements, commonly known as the Balboa Theatre located at 707 E. Balboa Blvd in the City of Newport Beach ("Property"). B. Lessee purchased the Property with Community Development Block Grant (CDBG) funds ("Federal Funds") from the United States Department of Housing and Urban Development. The Federal Funds were granted pursuant to Title 1 of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et. seq.) as amended (Act) and the Regulations of 24 C.F.R. Section 570 e.-seq. (Regulations). C. The Federal Funds were granted to Lessor, in part, to benefit low income residents and households in the vicinity of the Property and to revitalize the economy in the primary commercial area that serves these residents. D. Lessee is a non-profit corporation organized pursuant to and in compliance with the provisions of California law and is presently in good standing. Lessee was organized by, and its members include, individuals who reside in an around the Property and the area to be benefited by.the use of the Federal Funds. E. The City Council of the City of Newport Beach (City Council) has determined that this Lease and the use of the Property as a Theatre is consistent with the City Charter, the Newport Beach General Plan and Zoning Ordinance and all other applicable Federal, State and local laws. F. The City Council has also determined that this Lease will benefit, and serve the interests of, the low income residents and business owners in the area for which the Federal Funds were granted. NOW, THEREFORE, in consideration of the terms, covenants and conditions in this Lease, Lessor and Lessee hereby agree as follows: 1 L 0) !) ARTICLE 1 SUBJECT OF LEASE 1.1 Purpose of the Lease The purpose of this Lease is to require Lessee to renovate and rehabilitate the Property consistent with its original design and architecture and, subsequent to renovation, require Lessee to operate a first class community Theatre. The renovation and operation of the Theatre is intended to serve the needs land interests of the residents and business owners in the area to be benefited- through enefitedthrough the use of the Federal Funds. 1.2 The Property The term "Property" includes the land described in Exhibit A and depicted in Exhibit B as well as the structure(s), any improvements and personal property. The term "Theatre" generally refers to the use of the structure(s), improvements and fixtures located on the Property as a non-profit cultural and performing arts center. 1.3 Lessor Lessor is the City of Newport Beach, a Charter City and municipal corporation. The .principal office of Lessor is located at City Hall, 3300 Newport Bouleviard, Newport Beach, California 92658-8915. For the purposes of this Lease, the term "Lessor" shall include all officers, employees, agents or representatives of Lessor.. 1.4 Lessee Lessee is the Balboa Performing Arts Theatre Foundation. Lessee is a California non-profit public benefit corporation organized for the purpose of renovating, operating and maintaining the Theatre and engaging in activities that will, among other things, serve the interests of, and benefit, the area commonly known as Central Balboa or Balboa Village. For the purposes of this Lease, the term "Lessee" shall include all officers, employees, agents or representatives of Lessee. ARTICLE 2 LEASE OF PROPERTY 2.1 Lease of Property Lessor leases the Property to Lessee, and Lessee leases the Property from Lessor for the Term and pursuant to the terms, provisions, covenants and conditions of this Lease. Lessor reserves all rights to substances below the 2 ■ surface of the Property and the right to produce or take any of those substances so long as the activities do not impair or interfere with the operation or aesthetics of the Theatre. 2.2 Condition of Title The Property is leased subject to the Permitted Exceptions (Exhibit C) and other matters affecting title which do not inhibit, prevent or impair the operation, maintenance or use of the Theatre. ARTICLE 3 POSSESSION OF PROPERTY 3.1 Quiet Enjoyment Lessee shall be entitled to peaceably and quietly use and enjoy the Property for the Term, without hindrance or interruption by Lessor except for the exercise of Lessor's rights pursuant to this Lease. Lessor shall not be liable in damages or otherwise, because of the interruption or termination of any service provided by Lessor (such as, water or sewer service), or a termination, interruption or disturbance of any service attributable to any act or omission of Lessee. 3.2 Condition of Property Lessee has investigated and researched all physical conditions of the Property that could affect Lessee's use, enjoyment and improvement of the Property including soil conditions, the condition of structures, and the condition of utilities. By execution of this Lease, Lessee shall be deemed to have accepted the Property in an "AS IS" condition. Lessor has provided. Lessee with a report that confirms the presence of lead-based paint on the Property and Lessee acknowledges that substantial improvements, including seismic retrofit and remediation of the lead-based paint, will be necessary before the Property can be operated as a first-class community Theatre as required by this Lease. 3.3 Ownership of Improvements During the Term of this Lease, Lessee shall hold title to the improvements and personal property necessary or convenient to the operation or maintenance of the Theatre, such as fixtures, machinery, rigging, lighting, staging, merchandise, trade fixtures (collectively, Equipment) that have been constructed or placed on the Property 3 0) U1 9 3.4 Surrender of Prope 3.4.1 On expiration of the Term or termination of this Lease, Lessee shall peaceably and quietly leave and surrender the Property and Equipment to Lessor, in good order, condition and repair, reasonable wear and tear and obsolescence excepted. Lessee shall deliver to Lessor all contracts, agreements, books, .records, and other documents related to the operation, maintenance or'use of the Property. 3.4.2 Upon the expiration of the Term or termination of this Lease and within ten (10) days of a written request by Lessor, Lessee shall immediately deliver to Lessor the following: (i) Documents reasonably necessary for Lessor's ownership of the Property and Equipment to be clearly reflected of record. (ii) Title insurance, surety bond, or other security reasonably acceptable to Lessor insuring Lessor against all claims and liens against the Property other than those incurred by Lessor or accepted by Lessor in writing. (iii) All plans, surveys, permits and other documents relating to: the Property as may be in the possession of Lessee at the time. 3.4.3 All documents and instruments to be delivered pursuant to this Subsection shall be in a form satisfactory to Lessor. ARTICLE 4 TERMIOPTION TO PURCHASE 4.1 Duration and Commencement The Term of this Lease shall commence on the Effective Date and shall expire on the twenty-fifth (251') anniversary subject to early termination or Lessee's exercise of the option to purchase as provided in Section 4.3. 4.2 Option to Extend Any extension of this Lease, and the terms and conditions of the extension, shall be at Lessor's option, in its sole and absolute discretion. 4.3 Option to Purchase Lessee shall have the option to purchase the Property subject to satisfaction of the following: 0 4 lvs:. 4.3.1 Lessee shall have completed the Required Improvements; and 4.3.2 Lessee shall have operated the Theatre in full compliance with the provisions of Article 8 for a period of five (5) years; and 4.3.3 Lessee has given Lessor thirty (30) days written notice of its intention (notice of intent) to exercise the option to purchase; and 4.3.4 Lessee is not in default when the notice of intent is served or at close of escrow; and 4.3.5 Lessee, within fifteen (15) days after service of the notice of intent, opens an escrow for the purchase of the Property and deposits ten percent (10%) of the purchase price into escrow. 4.4 Option - Purchase Price The purchase price of the Property shall be the sum of (1) the price paid by Lessor ($480,000) and (2) an amount equal to $480,000 multiplied by the cumulative percentage increase in the Consumer Price Index (All Urban Consumers — Los Angeles, Anaheim Riverside — All Items) from the Effective date to the date of the Notice of Intent. For example, if Lessee exercises the option nine (9) years after the Effective date and the increase in the CPI during that period is thirty percent (30%), the purchase price would be $624,000. ($480,000 plus $144,000) 4.5 Right of First Refusal Lessee shall have the right of first refusal to purchase the Property prior to the sale to any third party. Lessor shall give Lessee sixty (60) days written notice of its intent to sell the Property and Lessee's right to purchase during that period. Lessee shall exercise the option by serving Lessor with written Notice of Intent to purchase within sixty (60) days after receipt of the notice of intent to sell and complying with Subsection 4.3.5. The purchase price for the Property shall be as specified in Section 4.4. ARTICLE 5 RENTICONSIDERATION 5.1 No Money Payable by Lessee Lessee shall not pay money as rent to Lessor. 5� 5.2 Other Consideration In consideration for. this Lease, Lessee covenants that, during the Term, it will: 5.2.1 Operate and maintain a Theatre on the Property in full compliance with the terms and conditions of this Lease and at no cost to Lessor. 5.2.2 Maintain its non-profit status. 5.2.3 Construct the Required Improvements in accordance with the provisions of Article 9 and maintain the Property in accordance with this Lease at no cost to Lessor. 5.2.4 Defend, indemnify and hold Lessor harmless with respect to the renovation, use, maintenance and operation of the Property. 5.2.5 Use any excess revenue or funds for purposes related to the operation of the Theatre or the revitalization of Central Balboa/Balboa Village. The term "excess revenue or funds" means any revenue or funds (other than the principal and interest of the Contributions Fund) in excess of the amount projected in Lessee's then current Budget and which, in Lessee's reasonable determination, are not needed for Lessee's reserve account(s). ARTICLE 6 , CONTRIBUTIONS FUND Lessee shall establish and maintain, at a financial institution in an account insured by FDIC, FSLIC or similar insurance, a separate fund (Contributions Fund) for the purpose of accepting contributions from any source. Lessee shall use the Contributions Fund to pay for the improvements required by this Lease and/or to support the operation and maintenance of the Theatre. Lessee shall establish and maintain an on-going fund raising program as part of its Operations and Marketing Operations Plan Article 7 and use its best efforts to ensure the success of the program. ARTICLE 7 ANNUAL BUDGETIOPERATION AND MARKETING PLAN 7.1 Budget/Timing 7.1.1 Initial Budget Lessee shall prepare, and submit to the Lessor, an annual budget for the renovation, maintenance and operation of the Theatre (Budget). The first Budget shall be adopted, and submitted to 6 7.2 7.3 Lessor, within sixty (60) days after the Effective Date. Subsequent annual Budgets shall be submitted to Lessor no later than fifteen (15) days after adoption by Lessee. 7.1.2 Proposed Revision Lessee shall provide Lessor with material modifications or revisions to the Budget within fifteen (15) days after adoption by Lessee. 7.1.3 Year End Financial Statement Within ninety (90) days after the last day of Lessee's fiscal year, Lessee shall submit to Lessor a cash flow statement itemizing all of its revenues and expend itu res.for that fiscal year. Contents of Budget The Budget shall specify in reasonable detail (as appropriate given the status of renovation), (t) the proposed rates and charges for the use of the Theatre, (ii) the balance in all funds and accounts maintained by Lessee, (iii) all projected revenues and sources of funds for the fiscal year, (iv) the expenditures proposed to be made by Lessee in fulfilling its obligations pursuant to this Lease, (v) marketing program and costs, (vi) all other proposed expenditures of Lessee, (vii) the principal balance of the Contributions Fund, (viii) income from the Contributions Fund, and (ix) cash reserves, if any. Operations and Marketing Plan Lessee shall prepare and adopt an Operations and Marketing Plan (Operations Plan) during the Term. The initial Operations Plan shall be adopted one hundred and eighty (180) days prior to anticipated completion of the Required Improvements. The Operations Plan shall be revised from time to time to reflect new performances/events, new fund-raising strategies and new or revised marketing programs. The Operations Plan shall comply with, and provide information relevant to, the provisions of Article 8 and specify in reasonable detail (as appropriate given the status of renovation), (r) performances, meetings, concerts and other events at the Theatre that have been, or are proposed to be, scheduled (ii) performers and events which Lessee is actively seeking to schedule at the Theatre, (iii) a marketing Plan for the Theatre including programs for attracting attendees and efforts to integrate the operation of the Theatre into efforts to revitalize the local economy, and (iv) fund raising efforts including a report on fund raising efforts for the prior year. The Operations Plan shall be submitted to Lessor within fifteen days after adoption or any material modification. 7 0 7.4 Records Lessee shall keep and maintain complete, accurate and customary records and books of account on all sales, whether for cash or on credit, all business transactions made with respect to the Property during each fiscal year, and the principal and income of the Contributions Fund. These records shall be retained. intact for a period of not less than three (3) years after the end of each fiscal year to which the records and books of account.pertain. Lessor and representatives of the United States Government shall be entitled, upon reasonable notice and during business hours, to inspect and make copies of any and all of the records_ and books of account. 7.5 Audit Lessor and/or the United States Government shall, once per fiscal year, be entitled to conduct an audit of all records and books of account that Lessee is required to maintain. ARTICLE 8 USE OF PROPERTY 8.9 Permitted Use The Property shall be used primarily for the operation of a first class cultural and performing arts center (Theatre) open to the general public. Lessee shall operate the Theatre in accordance with the standards specified in this Lease and the relevant Operations Plan. Lessee may, in conjunction with performances, events and fund-raising activities, conduct incidental operations such as limited food service or catering, on premises sale of alcoholic beverages (provided Lessee obtains all required governmental permits and approvals), concessions, and retail sales directly related to performances or fund raising events. (Permitted Uses). Lessee may conduct benefits, fund-raising events, previews, receptions and similar activities where admission is restricted subject only to compliance with this Lease. Lessee may allow nonprofit civic, charitable, educational and community organizations to periodically use the Theatre for fund raising, education or community events in accordance with this Lease and, the Operations Plan. Lessee may conduct fund-raising and similar events on the Property after completion of the improvements contemplated by Section 9.2 (Seismic Retrofit) and before completion of Required Improvements subject to issuance of a Special Events Permit by Lessor. 8.2 Performances/Frequency Lessee shall operate the Theatre in .a prudent and . businesslike manner reasonably calculated to assist in the efforts of Lessor and others to revitalize the 8 M W, local economy and in full compliance with the Operations Plan. 8.2.1 Lessee shall schedule and present performances or cultural events on at least one hundred (100) days of the twelve (12) month period commencing sixty (60) days after completion of Required Improvements. 8.2.2 Lessee shall, for each subsequent twelve (12) month period, schedule and present performances or cultural events on at least one hundred and fifty (150) days. 8.2.3 Operation of the Theatre is the fundamental consideration for this Lease and Lessee shall ensure and promote the maximum reasonable use of the Theatre by performers, artists, and entertainers likely to attract patrons. The Theatre shall be operated consistent with the standards, practices and procedures utilized by first class community Theatres in other jurisdictions. Program Standards Lessee shall operate the Theatre in a manner reasonably calculated to achieve the following objectives: 0 8.3.1 Provide frequent and high quality performances and cultural events to attract patrons to the Theatre and Central Balboa/Balboa Village. 8.3.2 To serve as a catalyst to the revitalization of the economy of the area to be benefited by use of the Federal Funds. 8.3.3 To make the Theatre accessible to, and enjoyable by, as wide a potential audience as possible including the low income residents of the area to be benefited by the use of Federal Funds; 8.3.4 To utilize the skill, ability and energy of members of the community in combination with a capable and experienced professional staff to. fund and complete the renovation as well as operate and maintain a first class community Theatre. Cooperation Lessor and Lessee shall, at least ninety (90) days prior to completion of the Required Improvements, commence discussion of a parking validation program that would allow patrons of the Theatre to use public parking at reduced rates. Lessor and Lessee shall also discuss ways to integrate operation of the Theatre 9 into programs for the economic revitalization of Central Balboa/Balboa Village. 8.5 Change of. Use Lessee shall not use, or conduct any activities on, the Property except the Permitted Uses without the prior written consent of Lessor, which consent may be withheld at Lessor's sole discretion. 8.6 Compliance with Laws. Lessee shall not use the Property in a manner liable to create a public or private nuisance or liable to cause structural injury to the Theatre. Lessee shall not conduct any operation that would invalidate any insurance coverage required of Lessee. Lessee shall not violate any local, state or federal law in the renovation, maintenance, or operation of the Property or Theatre. Lessee shall obtain any required permit(s) from the City and approval from the Department of Alcohol Beverage Control prior to any sale of alcoholic beverages on or from the Property. 8.7 Zoning and Planning Lessor acknowledges that the use of the Property as a Theatre is a legal non- conforming use as that term is defined in Title 20 of the Newport Beach Municipal Code (Zoning Code). Lessee shall be entitled to repair, after, and modify the structures and improvements on the Property in accordance with the provisions of the Zoning Code provided Lessee complies with the provisions of this Lease. Lessee shall also use the Property in conformance with the provisions of the Central Balboa Specific Plan. 8.8 Nondiscrimination 8.8.1 Lessee shall not discriminate against any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the renovation, operation, enjoyment or occupancy of the Property. 8.8.2 Lessee shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, age or handicap. Lessee shall take positive steps to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, national origin, age or handicap. Lessee shall. post in conspicuous places, available to employees and applicants for employment, notices specifying the non-discrimination provisions of this Lease. 10 0 4 Lessee shall, in all solicitations or advertisements for employees placed by or on behalf of Lessee, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, age or handicap. Lessee shall not discriminate on the basis of age in violation of any provision of the Age Discrimination Act of 1975. Lessee shall not discriminate against, or with respect to, any otherwise qualified handicapped individual as provided in Section 504 of the Rehabilitation Act of 1973. 8.8.3 Lessee agrees not to discriminate on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person with respect to any agreement, license, contract related to the renovation, operation, use or occupancy of the Property. All such contracts, licenses, agreements shall contain non- discrimination provisions substantially similar to this Lease. ARTICLE 9 REQUIRED IMPROVEMENTS 9.1 Lessee's Obligations The Property requires substantial renovation and rehabilitation to be used as, or considered, a first class community Theatre. Lessee shall design, obtain building permits for, and then construct the improvements specified in this Article (Required Improvements) at Lessee's sole cost and expense 9.2 Seismic Retrofit/Remediation. The primary structure on the Property is an unreinforced masonry building constructed prior to 1935 and is subject to the provisions of Chapter 15.07 of the Newport Beach Municipal Code (Earthquake Hazard in Existing Buildings). In addition, a preliminary investigation of the Property has revealed some lead- based paint. Lessee shall submit to Lessor, plans and specifications for improvements to the Property necessary to comply with the provisions of Chapter 15.07 (Seismic Retrofit) and a plan to remediate the lead based paint (Remediation). Lessee shall retain a licensed contractor to construct the Seismic Retrofit and complete the Remediation. Lessee shall complete the Seismic Retrofit and the Remediation no later than the date on which the Required Improvements are required to be completed. Lessee shall be solely responsible for all costs and expenses associated with the Seismic Retrofit and the Remediation. 9.3 Conceptual Design Plans Lessee shall prepare, and submit to Lessor for approval, a proposed conceptual Plan for the design, construction, furnishing and equipping of the Property for use as a theatre (Conceptual Design Plan). The Conceptual Design Plan shall be prepared by a licensed architect. The Conceptual Design Plan shall generally describe those elements typically included in preliminary Conceptual Design Plans for the renovation and rehabilitation of a theatre constructed in the 1920's. The Conceptual Design Plans shall include, without limitation, (1) seating layout and design; (2) stage and dressing room layout and design (3) lobby and concession area design; (4) structural modifications necessay to comply, with uniform codes, (5) interior design elements and treatment, (6) exterior design and treatment; (7) sound and projection systems; (8) lighting systems and design; (9) public area layout, design and treatment; and (10) stage, orchestra pit and roll -down backdrop design and treatment. Lessor's right to approve:the Conceptual Design Plan shall be limited to ensuring that the improvements contemplated by the Conceptual Design Plan are consistent with a first class community theatre and reasonably consistent with the Guidelines for the Rehabilitation of Historic Structures published by the Secretary of Interior. The Conceptual Design Plan shall be deemed approved if Lessor fails to serve written notice of disapproval within thirty (30) days following submittal. Lessor's approval shall not be unreasonably withheld and any disapproval by Lessor shall specify with particularity the components of the Conceptual Design Plan disapproved, the reasons for disapproval and alternatives that Lessor would approve. The Parties shall agree on a Conceptual Design Plan within sixty (60) days of submittal. 9.4 Design Development Plan Subsequent to approval of the Conceptual Design Plan, Lessee shall submit Design Development Plans to Lessor for approval. The Design Development Plans shall be based on, consistent with and amplify on the information provided in the Conceptual Design Plan. The Design Development Plans shall include, (1) specific interior and exterior lighting. Plans and design; (2) specific information regarding the color, material, treatment and design of all interior and exterior elements; and (3) schedules showing the principal stages, phases and timing of construction. Lessors right of approval, which shall not be unreasonably withheld, shall be limited to a determination that the Design Development Plans are based on and consistent with the approved Conceptual Design Plans. The Design Development Plans shall be deemed approved if Lessor failsto give written notice of disapproval within thirty (30) days after submittal. Lessor shall specify with particularity those components of the Design Development Plans disapproved, the reasons for disapproval and the alternative(s) Lessor would approve. The Parties shall agree on design Development Plans within sixty (60) 12 9.5 W. days after submittal. Final Plans and Specifications Subsequent to approval of Design Development Plans, Lessee shall submit Final Plans and Specifications. The Final Plans and Specifications shall be based on, and consistent with, the Design Development Plans. The Final Plans and Specifications shall be in sufficient detail to provide the information necessary to obtain building permits from Lessor. Lessor's right of approval pursuant to this Lease, (distinct from Lessor's rights and obligations as a Charter City and entity responsible for administration and enforcement of Uniform Building Codes), which shall not unreasonably be withheld, shall be limited to a determination that the Final Plans and Specifications are based on and consistent with the approved Design Development Plans. The Final Plans and Specifications shall be deemed approved (as to consistency with Design Development Plans) unless Lessor serves written notice of disapproval within thirty (30) days after submittal. Lessor shall specify, in detail, each element of the Final Plans and Specifications disapproved, the reason for disapproval, and alternative(s) that Lessor would approve. The Parties shall reach agreementon the Final Plans and Specifications within 60 days of submittal. Building Permits Lessee shall apply for all necessary building permits from Lessor within one (1) year after the Effective Date. Lessee shall diligently process any corrections and changes to the submittals that are necessary to comply with State and local law and to ensure consistency with approved Final Plans and Specifications. Lessee shall have the option of submitting Final Plans and Specifications as the documents necessary to obtain building permits assuming suitability for that purpose. Lessee shall also obtain all permits or approvals required of any other governmental entity having jurisdiction over the Property or any modification to the Property. In the event that another governmental agency with jurisdiction over the Property requires modification of the Final Plans and Specifications, the modifications shall be submitted to Lessor for review and approval. Lessor shall not unreasonably withhold or delay the issuance of building permits. Lessor shall pay all building permit fees, planning fees and other fees and charges normally imposed on similar projects. 9.7 Construction of Required Improvements Lessee shall begin construction of Required Improvements within sixty (60) days after approval of all required building permits by Lessor and approval of any permit(s) required by other governmental agencies with jurisdiction over the Property. Lessee shall diligently pursue construction of the .Required 13 Oi Improvements to completion. Lessee shall complete construction of Required Improvements within one year and sixty (60) days after issuance of all necessary permits and approvals. The Required Improvements shall be constructed by a licensed contractor. 9.8 General Requirements 9.8.1 The Required Improvements shall be constructed in compliance with the provisions of this Lease that regulate, or relate to, the construction, alteration or maintenance of improvements on the Property. Lessee acknowledges that the reviews and approvals required by this Section, with the exception of the issuance of building permits, are proprietary activities related to Lessors ownership of the Property and separate and distinct from any review or approval conducted by Lessor in its municipal capacity. Lessee also acknowledges that any approval given pursuant to this Section,. except the issuance of building permits, does not bind Lessor when acting in its governmental capacity. 9.8.2 Lessor has designated the Committee to Promote Revitalization of the Peninsula (PROP), or its successor, to review, and approve or disapprove, the. Conceptual Design Plan, the Design Development Plans and the Final Plans and Specifications. Lessee shall provide PROP with bimonthly reports on the status of the renovation of. the Property. Lessee may request City Council review of any decision by PROP disapproving submittals by serving a request for review within fifteen days after receipt of the notice of disapproval. 9.9 Extensions Lessee may request, and the City Manager of the City of Newport Beach may grant, an extension of up to sixty (60) days with respect to any of the deadlines specified in this Article. The City Council of the City of Newport Beach may, upon a showing of good cause, grant extensions in excess of sixty (60) days. The extensions authorized by this Section are in addition to any extension resulting from force majeure. ARTICLE 10 REPAIRS AND MAINTENANCE Lessee recognizes that the Theatre is a designated local historical landmark and is to be maintained as such. Lessee shall, at Lessee's expense, perform all routine and recurring maintenance necessary to keep the Theatre in first class condition and in accordance with the standards in this Lease. Lessee shall, at a minimum perform the following: (i) the maintenance of the exterior surfaces of the Theatre (including patching 14 and resurfacing the roof membrane and painting or other protective treatment of the exterior wall of the Theatre); (ii) maintenance of the public rest rooms (including repairs or replacements of tile or rest room fixtures); (iii) the maintenance of electrical systems serving the Property and Theatre and the repair and replacement of components; (iv) maintenance of all pipes and plumbing systems serving the Theatre and Property, and the repair and replacement of components; and (v) the maintenance of all building service equipment (including HVAC equipment, conveyancing systems, and fire, life safety, and emergency equipment) and the repair and replacement of components. As soon as reasonably practicable following the completion of Required Improvements, Lessee shall prepare and submit to Lessor a schedule for the periodic inspection and maintenance by Lessee of the Theatre. Lessee shall revise the schedule for maintenance from time to time during the Term as necessary to maintain the Theatre to the standards required by this Lease. Lessee shall have the benefit of all warranties available to Lessor with respect to the Theatre or any component thereof. Lessee shall not be responsible for the cost of and repair or maintenance required because of the acts or omissions of Lessor. Lessee may terminate this Lease If the cost of repairing or replacing any of the structural, roof, main electrical, plumbing, building service or fire/life safety components of the Theatre would make continued operation of the Theatre economically infeasible. ARTICLE 11 STATUS AND MANAGEMENT OF LESSEE 11.1 Nonorofit Status 0) During the Term, Lessee shall maintain its status as a California public benefit nonprofit corporation in full compliance with the California Nonprofit Corporation Law (California Corporation Code Section 5000 et seq.). Lessee shall also maintain its qualification as a tax-exempt organization under 501(c)(3) of the Internal Revenue Code (or any successor statute). 11.2 Executive Committee and Advisory Committee During the Term, Lessee shall appoint an Executive Committee consisting of no more than five (5) members. The Executive Committee shall be authorized by Lessee to interact with Lessor and promptly respond to problems or concerns expressed by Lessor or members of the general public relative to the operation of the Theatre. Lessee shall also appoint an Advisory Board or Advisory Committee that is responsible for f ind-raising. Lessee may appoint or establish other Boards or Committees to perform specific functions . relative to the renovation, maintenance or operation of the Property and Theatre. 11.3 Employment of Staff During the Term, Lessee shall use its best efforts to employ a professional 15� r Executive Director to manage the day to day renovation and/or operation of the Theatre and perform such other duties as Lessee may assign. The Executive Director shall be appointed at least ninety (90) days prior to anticipated completion of Required Improvements. ARTICLE 12 ALTERATIONS 12.1 Written Consent Except as otherwise provided in this Article, Lessee shall obtain the written consent of Lessor prior to making any structural or nonstructural alterations to the Property. All structural and nonstructural alterations to the Property shall conform to the Theatre's designation as a local landmark and shall be consistent with the original design and architecture of the Theatre as well as the Guidelines for the Rehabilitation of Historic Structures published by the Secretary of the Interior. Lessee shall be solely responsible for all costs and expenses incurred in making any alteration. All alterations shall be surrendered with the Property when this Lease expires or terminates.. 12.2 Notice of Non -responsibility Structural and nonstructural alterations shall not be commenced until ten (10) days after Lessor has received written notice from Lessee stating the date work is to commence so that Lessor can post and record an appropriate Notice of Non -Responsibility. Structural alterations shall be made by a licensed contractor. ARTICLE 13 PAYMENT OF UTILITIES, TAXES, CHARGES AND FEES 13.1 Public and Private Utility Services Lessee will pay all charges for all public or private utility services and all sprinkler systems and interior protective services provided to or for the Property. Lessee will comply with the terms and conditions of contracts relating to such services. Lessor shall not be liable for any failure or defect in the supply of any utility. 13.2 Taxes, Assessments. Fees and Charges Lessee covenants to pay when due all applicable taxes, assessments, fees, charges, and levies of every type and character, including all .interest and penalties, that are imposed, assessed or levied on the Property, any occupancy or use of the Property, or any income derived from the Property. 13.3 Proof of Payment Lessee agrees to furnish to Lessor, upon request, proof of the timely payment of any tax, assessment, levy, fee or charge or other. Lessee may pay any assessment or tax in installments if legally permissible to do so. In the event Lessee elects to pay assessments or taxes in installments, Lessee shall be liable only for those installments which become due and payable during the Term of this Lease. 13.4 Payment by Lessor Lessor shall have the right to pay any assessment, tax, fee or charge before the due date if Lessor has an objectively reasonable belief that Lessee is unwilling or unable to make the payment. In such event, Lessee shall fully reimburse Lessor within ten (10) days of written notice of payment by Lessor. 13.5 Property Taxes not Valid The obligation of Lessee to pay taxes shall not be construed as evidence that Lessor or Lessee believe that any tax is legal. This Lease is intended only to obligate Lessee to pay taxes if legally imposed. 13.6 Notice of Possessory Interest; Payment of Taxes and Assessments on Value of Entire Lease Premises In accordance with California Revenue and Taxation Code Section 107.6(a) and Health and Safety Code Section 33673, Lessor states that by entering into this Lease, a possessory interest subject to property taxes may be created, and if so, that Lessee shall pay taxes upon the assessed value of the entire property and not merely the assessed value of its leasehold interest. Lessee or other party in whom the possessory interest is vested may be subject to the payment of property taxes levied on such interest. ARTICLE 14 LIENS 14.1 Indemnification Lessee shall indemnify, defend and hold Lessor and the Property free, clear and harmless from any claims, liens, demands, charges, encumbrances or litigation arising directly or indirectly out of (1) Lessee's use, occupancy or operation of the Property or (2) any work performed on, material furnished to the Property. Lessee shall pay, prior to.delinquency, for all work performed on, and material furnished to, the Property which may result in a lien on the Property and shall use its best efforts to keep the Property and Theatre free and clear of all 17 mechanic's liens and similar liens. 14.2 Satisfaction of Liens Lessee shall fully pay and discharge a judgment or lien affecting the Property upon entry of final judgment in any action contesting any claim of lien (if final judgment establishes the validity of all or a portion of the lien). Lessee shall also pay any lien within fifteen (15) days after notice of the filing of any lien that Lessee does not contest. Lessee shall reimburse Lessor upon demand for any and all loss, damage and expense, including reasonable attorneys' fees, incurred by Lessor with respect to any judgment or lien resulting from the acts or omissions of Lessee related to the Property. Lessor shall have the right to satisfy, any judgment or lien if Lessee fails or refuses to do so and Lessee shall fully reimburse Lessor in such event. 14.3 Notice to Lessor Lessee shall give Lessor written notice of any claim or lien filed against the Property and any action or proceeding instituted affecting the title to the Property. 14.4 Notice of Non -Responsibility Lessor shall have the right to post and maintain on the Property any Notice of Non -Responsibility authorized by law. ARTICLE 15 INDEMNIFICATION 15.1 Indemnity Lessee shall defend, indemnify and hold harmless Lessor from and against any and all legal or administrative proceedings, claims, reasonable attorneys' fees and costs, expenses, penalties, actual damages, punitive damages and losses, including indemnity claims, in any way related to (1) the improvement, use, maintenance, or operation of the Property (ii) this lease (iii) the use, release, generation, storage or disposal of Hazardous Materials (as defined in Section 15.7 on the Property or Theatre, ('iv) compliance or non-compliance with any federal, state or local environmental law, ordinance, rule or regulation, (v) any accident or injury to, or death of, persons or damage to property occurring on or about the Property (vi) the removal, clean-up, encapsulation, detoxication or any other action taken by Lessee or any other party, directly or indirectly arising out of the presence of Hazardous Materials in, on or around the Property. 18 15.2 CERCLA Liability. Lessee agrees that this Lease is intended to operate as an indemnification under Section 9607(e)(1) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), as amended, and the California Hazardous Substances Act (CHSA), as amended. 15.3 Expense of Proceedings The defense of any suit, action, legal or administrative proceeding that may be threatened, brought or instituted against Lessor that is the subject to the indemnity provided in this Lease shall be conducted at Lessee's sole expense by legal counsel selected and approved by Lessor. 15.4 Release Lessee waives, releases and forever discharges Lessor from any and all suits, causes of action, legal or administrative proceedings, claims, demands, liabilities, losses, costs, interest, attorneys' fees, expenses, penalties, actual damages, punitive damages and losses, known or unknown, which Lessee ever had, now has, or may have in the future that are in any way related to (i) the condition, status, quality, nature, contamination or environmental state of the Property including Lessee's claims under the CERCLA, the Carpenter -Presley - Tanner Hazardous Substance Account Act and any other federal, state or local law, ordinance or regulation, or common law theory of recovery, pertaining to the presence, release, clean-up or containment of Hazardous Materials on the Property. 15.5 Waiver of California Civil Code Section 1542 Section 1542 of the California Civil Code states: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which, if known by him, must have materially affected his settlement with the debtor. Lessee knowingly and voluntarily waives its rights pursuant to California Civil Code Section 1542. Lessee fully understands the consequences of this waiver and has been advised of the consequences by legal counsel. The Parties intend this Lease will be effective as a bar to Lessee's Claims. 19 0 0 11 9 15.6 Definition of Hazardous Materials The term "Hazardous Materials" means, without limitation, gasoline, petroleum products, explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, polychlorinated biphenyls or related or similar materials, asbestos or any other substance or material that may be defined as a hazardous, toxic or dangerous substance, material, waste, pollutant or contaminant under any federal, state or local environmental law, ordinance, rule or regulation as now or at anytime hereafter in effect, including, without limitation, (a) CERCLA, (b) the Federal Water Pollution Control Act, (c) the Clean Air Act (d) the Resource Conservation and Recovery Act, (e) the Toxic Substances Control Act, M the Hazardous Materials Transportation Act, (g) the Carpenter -Presley -Tanner Hazardous Substance Account Act, (h) Hazardous Waste Control Law, and the (i) the Porter -Cologne Water Quality Control: Act (California Water Code Section 13000 et seq). ARTICLE 16 INSURANCE 16.1 Insurance to be Maintained Lessee Effective shall take out and maintain, no later than thirty (30) days after, the Date and for the Term of this Lease. at Lessee's sole cost and expense, the following insurance. 16.1.1 Comprehensive General Liability in an amount not less than five million dollars ($5,000,000) combined single limit per occurrence. Lessor and its officials, employees and representatives shall be covered as additional insureds with respect to liability arising out of activities by or on behalf of Lessee or in connection with the use or occupancy of the Property. Coverage shall be in a form acceptable to Lessor and shall be primary and non-contributing with any insurance or self-insurance maintained by Lessor or Lessee. 16.1.2 Workers' Compensation Insurance as required by the Labor Code of the State of California. 16.1.3 "All Risk" Property Insurance (Operations) including coverage against the perils of earthquake, fire, explosion of machinery or equipment, and vandalism covering the full replacement cost of all improvements and fixtures on the Property. Lessor shall be added as insured under the standard loss payable endorsement. Lessee waives all rights of subrogation against Lessor for any damage to the improvements or fixtures covered by collectable commercial insurance. Lessee's obligations to provide insurance. under' this 20 0 0 paragraph shall apply to all improvements and fixtures on the Property without regard to the date of construction or installation. Lessee's obligation to provide this coverage is contingent on the availability of coverage at commercially reasonable rates. 16.1.4 Property Insurance -Construction. During construction of any improvements on the Property, Lessee shall maintain Builder's Risk Insurance against "all risk" of physical loss, including the perils of fire, collapse and transit, with commercially reasonable deductibles, covering the total cost of work performed, equipment, supplies and materials furnished on a replacement cost basis. Lessee's obligation to provide this coverage is contingent on the availability of coverage at commercially reasonable rates. 16.2. Acceptable Terms of Coverage Acceptable insurance coverage shall be placed with carriers admitted to write insurance in California, or carriers with a rating of or equivalent to AVIII by A. M. Best & Company. Any deviation from this standard shall require the specific written approval by Lessor. Any deductibles or self-insured retentions must be declared to and approved by Lessor. At the option of Lessor, Lessee may be required to reduce or eliminate such deductibles or self-insured retentions or to procure a bond guaranteeing payment of losses and related expenses and costs. Coverage under each policy shall not be suspended, avoided or canceled by either party except after thirty (30) days prior written notice to Lessor. Lessee shall furnish City and Lessor with certificates of insurance and with original endorsements effecting coverage required by this Lease. The certificates and endorsements for each insurance policy shall be signed by a person authorized by the insurer to bind coverage on its behalf. 16.3 Index The limits of insurance coverage required by this Article shall be adjusted on each seven (7) year anniversary of the Effective Date. The adjustment shall reflect the percentage increase for the preceding seven (7) years in the Consumer Price Index for All Urban Consumers, Los Angeles -Anaheim - Riverside. All Items (1982-84 Base), published by the Bureau of Labor Statistics, Department of Labor. Consumer Price Index. 16.4 Waiver of Subrogation Each policy of insurance procured pursuant to this Article shall contain, if feasible, either (i) a waiver by the insurer of the right of subrogation against either party for negligence of such party, or (ii) a statement that the insurance 21 6 shall not be invalidated should any insured waive, in writing prior to a loss, any or all right of recovery against any party for loss accruing to the property described in the insurance policy. Lessor and Lessee waive any and all rights of recovery against the other for any loss or damage to that Party arising from any cause insured against under the insurance policies required by this Article. ARTICLE 17 DAMAGE BY FIRE OR CASUALTY 17.1 Lessee to give Notice In case of any material damage to or destruction of the Property, Lessee will promptly give written notice to Lessor generally describing the nature and extent of the damage or destruction. 17.2 Restoration Except as provided in Section 18.3, in the event of damage to or destruction of the Property, Lessee shall repair and restore the Property to its original condition (subject to changes necessary to comply with then existing laws and any changes in design approved by Lessor), at Lessee's sole cost and expense. To the extent the insurance proceeds are insufficient to cover the cost of such repair and restoration, Lesseeshall make up the deficiency out of Lessee's own funds. The repair and restoration shall be commenced within a reasonable period of time following the casualty and shall be completed with due diligence. Lessee shall have the option to terminate this Lease and surrender possession of the Property to Lessor if the event the cost of such repair and restoration exceeds the sum of (i) the amount of insurance proceeds available to Lessee plus (ii) the amount of the deductible by an amount which Lessee reasonably determines renders reconstruction of the Property economically infeasible. In the event of such a termination, Lessee shall pay to Lessor the amount of the deductible and assign to Lessor any and all rights Lessee may have to the insurance proceeds. 17.3 Casualty Late in Term Lessee or Lessor shall have the right to terminate this Lease on ninety (90) days written notice If (i) the Property is damaged or destroyed subsequent to the fifteenth (15th) year of the Term, (ii) the costs of restoration and repair are estimated to exceed fifty percent (50%) of the then full replacement cost of the Property (excluding land costs/value), and (iii) Lessee elects not to repair or restore the Property. In such event, Lessor shall have the right to receive :and retain all insurance proceeds paid or payable to Lessee on account of .any damage or destruction to the Property. 22 17.4 Application of Insurance Proceeds In the event that Lessee is required to restore the Property pursuant to Section 17.2, proceeds from policies of insurance required by Article 16 and which are received on account of any damage to or destruction of the Property (less the costs, fees and expenses incurred in the collection), shall be applied as follows: 17.4.1 Lessee shall furnish to Lessor satisfactory evidence to Lessor of the total cost of Restoration pursuant to Section 17.2. Lessee shall then furnish to Lessor satisfactory evidence that it has available the total amount of money which, when added to the insurance proceeds received, shall be sufficient to pay the cost of such Restoration. 17.4.2 Assuming satisfaction of the conditions of subsection [17.4.1] net insurance proceeds shall be paid to Lessee, unless Lessee is in Default, to fund restoration. Payments. from the proceeds of insurance for restoration shall be made only upon written request of Lessee accompanied by a certificate of an architect to the effect that the amount requested has been paid or is then due, is properly a cost of restoration, and there are no mechanic's or similar liens for labor or material supplied in connection with the restoration to date. 17.4.3 Upon completion of restoration and assuming Lessee is not in default, excess insurance proceeds shall first be paid to Lessor to the extent of its actual expenses incurred in the restoration, then to Lessee as working capital ARTICLE 18 EMINENT DOMAIN 18.1 Lease Governs The rights and obligations of the Parties with respect to any Award shall be as provided in this Article if there is any Taking during the Term of this Lease. 18.2 Termination of Lease This Lease shall terminate effective on the date of surrender of possession of the Property to the condemning authority in the event of a Total Taking. Lessee shall, continue to observe and perform all of the terms, covenants and conditions of this Lease until the date of termination. 23... 10) 18.3 Partial Taking — Restoration If there is a Partial Taking, Lessee may, at its sole cost and expense, whether or not the condemnation award is sufficient for the purpose, promptly commence and diligently proceed to effect restoration of the Property as nearly as possible to the condition and character immediately prior to such Taking. 18.4 Distribution of Award All awards and damages received on account of any Taking, whether partial or total, including interest received (Award), shall be paid promptly by the person(s) receiving the same to an escrow agent mutually acceptable to Lessor and Lessee to be distributed upon appropriate instruction from the Parties. 18.5 Allocation of Award — Partial Taking Any Award in a Partial Taking shall be distributed by escrow in the following order of priority: 18.5.1 First, to Lessor and Lessee to reimburse all costs and expense incurred in the collection of the Award, including fees and expenses incurred in the condemnation proceeding; 18.5.2 Second, to Lessor, as reimbursement for the costs and expenses of restoration of the Property and as those costs and expenses are incurred by Lessee; 18.5.3 Third, if Lessor and Lessee are unable to agree upon the allocation of the balance of the Award, if any, it shall be deposited by escrow into a court of competent jurisdiction to be equitably allocated by the court. 18.6 Allocation of Award —Temporary Taking In the event of a Taking for temporary use or occupancy, this Lease shall continue in full force and effect and Lessee shall be entitled to claim, recover and retain any Award made on account of such temporary Taking.. However, if the period of temporary Taking extends beyond the Term,. the Award shall be apportioned between Lessor and Lessee as of the date of expiration. 18.7 Allocation of Award — Total Taking Any Award .in a Total Taking shall be distributed by escrow in the following. priority: 24 18.7.1 First, to Lessor and Lessee to reimburse for all costs and expenses incurred by each in the collection of the Award; IW 18.7.2 Second, if Lessor and Lessee are unable to agree upon the allocation, the balance of the Award shall be deposited by escrow into a court of competent jurisdiction to be equitably allocated by the court. The determination of the value of Lessee's and Lessor's respective interests in the Property shall be made as if the Lease were to continue in full force and effect until the Expiration Date. . 18.8 Conduct of Proceedings Lessee and Lessor shall jointly participate in and prosecute/defend any action or proceeding involving a Taking of the Property by condemnation or under the power of eminent domain and shall jointly make any compromise or settlement. 18.9 Notices Any Party receiving notice of or becoming aware of any condemnation proceedings shall promptly give written notice to the other party. ARTICLE 19 ASSIGNMENT AND SUBLETTING Lessee may not assign or sublet this Lease or any portion of the Property, without Lessor's prior written consent which consent may be withheld in Lessor's sole discretion. However, Lessee may grant such licenses, permits and concessions as are reasonable, appropriate and customary to promote a Permitted Use and are in accordance with the Operations Plan. Lessor may, at any time during the Term and in its sole discretion, assign this Lease or its interest in the Property to a non-profit entity. ARTICLE 20 LEASEHOLD MORTGAGES Lessee shall have no right to encumber its interest in this Lease, the Property or the Theatre without Lessor's prior written consent, which consent may be withheld in Lessor's sole discretion. ARTICLE 21 PERFORMANCE OF LESSEE'S COVENANTS 21.1 - Right of Performance If Lessee fails to pay any tax, fee or other charge in accordance with Article -13 within the time period required or shall fail to pay for or maintain any of the insurance policies provided for in Article 17 within the time required, or to make any other payment or perform any other act within the time required by this 25� Lease, then Lessor may, after 30 days' written notice to Lessee (or without notice in case of an emergency) and without waiving or releasing Lessee: 21.1.1 Pay the tax, assessment, fee or charge payable by Lessee pursuant to this Lease; or 21.1.2 Pay for and maintain any insurance policies required by this Lease; or 21.1.3 Make any other payment or perform any other act. that Lessee is required to pay or perform pursuant to this Lease. 21.2 Reimbursement and Damages Lessee shall reimburse Lessor for all costs and expenses incurred by Lessor in the exercise of its rights pursuant to Section 21.1. ARTICLE 22 REPRESENTATIONS 22.1 Lessor's Representations Lessor represents to Lessee that: 22.1.1 Lessor owns the Property in fee simple subject only to the Permitted Exceptions and other matters affecting title that do not inhibit, prevent or impair the operation, maintenance or use of the Theatre. 22.1.2 Lessor has the power and authority. to enter into this Lease and perform all the obligations of Lessor hereunder. 22.2 Lessee's Representations Lessee represents to Lessor that: 22.2.1 Lessee has examined the Property and finds it will be fit for use as a cultural and performing arts center in accordance with this Lease and the Operations Plan upon completion of Required Improvements. 22.2.2 Lessor has not made any representations or warranties regarding the condition of the Property, or its suitability for the construction of Required Improvements or the operation and maintenance of a Theatre consistent with this Lease and the Operations Plan. 26 22.2.3 Lessee has the right, power and authority to enter into this Lease and to perform all the obligations of Lessee. 22.2.4 Lessee is a California public benefit nonprofit corporation in full compliance ,with the provision of the California Nonprofit Corporation Law (California Corporation Code Section 5000 at seq.), and is a tax exempt organization under 501(c)(3) of the Internal Revenue Code. ARTICLE 23 DEFAULTS, REMEDIES AND TERMINATION 23.1 Legal Actions 23.1.1 Institution of Legal Actions In addition to any other rights or remedies, either Party may institute legal action to cure, correct, or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Lease. Any legal action shall be filed in the County of Orange, State of California. 23.1.2 Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Lease. 23.2 Rights and Remedies are Cumulative Except with respect to rights and remedies expressly declared to be exclusive in this Lease, the rights and remedies of the Parties are cumulative. 23.3 Occurrence of Default The following acts or omissions shall be considered material breaches of this Lease if Lessee fails to cure the default within thirty (30) days after written notice of default from Lessor or, if cure is not feasible within thirty (30) days, Lessee has failed to commence cure within thirty (30) days or fails to diligently complete the cure: 23.3.1. The failure of Lessee to comply with the provisions of Article 9 related to the design and construction of Required Improvements. 27� 23.3.2 The failure of Lessee to operate the Theatre in compliance with the provisions of Article 8 related to frequency and quality: of performances and events. 23.3.3 The failure of Lessee to maintain the Property as specified in Article 10. 23.3.4 The failure of Lessee to restore or repair the Property in the event of damage or destruction 23.3.5 The failure of Lessee to pay any fee, tax, charge, or assessment when due or the failure to reimburse Lessor in the event Lessor pays the fee, tax, charge or assessment. 23.4 Remedies If Lessee has materially breached this Lease then a Default shall be deemed to have occurred, Lessor may give written termination notice to Lessee, and onthe date specified in the notice this Lease shall terminate. In addition to the right of termination, Lessor shall have the following additional rights and remedies: 23.4.1 Lessor shall have the immediate right to reenter the Property and/or the Theatre, take possession of the Property and/or Theatre, any and all Equipment, books and records, contracts and any other property. 23.4.2 Lessor may, at its option, enforce all of its rights and remedies under this Lease, including the right to recover the consideration and all other sums payable as they become due. Lessor shall also be entitled to recover from Lessee all costs of maintenance and preservation of the Property and/or the Theatre, and all casts, including attorneys' and receiver's fees, incurred in connection with the appointment of and performance by a receiver to protect, the Property. 23.4.3 Lessor shall be entitled to recover all money payable ,to Lessee related to the operation and use of the Theatre, all bank accounts, accounts receivable, working capital and cash reserves (if any after payment of Lessee's debts), and the balance in the Contributions Fund. • 28 ARTICLE 24 PERMITTED CONTESTS Lessee, at no cost or expense to Lessor, may contest (after prior written notice to Lessor), by appropriate legal proceedings conducted with due diligence, the amount or validity or application, of any Imposition or lien, provided that the proceedings suspend collection from Lessor and any action against the Property. If Lessee fails to contest the matter, or fails to protect Lessor and Lessor's interest in the Property, Lessor may contest or settle the matter in its sole discretion and obtain reimbursement from Lessee. ARTICLE 25 ENTRY BY LESSOR Lessor may enter the Property at reasonable times for the purpose of inspecting, servicing or posting notices, protecting the Property and/or the Theatre, or for any other lawful purposes, including showing the Property to prospective purchasers or lessees. ARTICLE 26 FORCE MAJEURE Any prevention, delay, non-performance or stoppage due to any of the following causes shall be excused: any regulation, order, act, restriction or requirement or limitation imposed by any Federal, State or municipal government; acts of God; acts or omissions of Lessor, fire, explosion or floods; strikes, walkouts or inability to obtain materials; war, riots, sabotage or civil insurrection; or any other causes beyond the reasonable control of Lessee. ARTICLE 27 MISCELLANEOUS 27.1 Notices. All notices and other communications shall be in writing, shall be sent by first class registered or certified United States mail, postage prepaid, and shall be deemed to have been given two (2) days after the day of mailing, addressed: To Lessor; City Manager City of Newport Beach 3300 Newport Blvd. Newport Beach, CA, 92658-8915 With a copy to: City Attorney's Office City of Newport Beach 3300 Newport Blvd. 29 31t r 0 Newport Bach, CA, 92658-8915 or at such other addresses as Lessor shall have furnished to Lessee; and To Lessee; Balboa Performing Arts Theatre Foundation P.O. Box 752 Balboa, CA 92661 With a copy to: Steve Bromberg Bromberg & Yeager 620 Newport Center Drive 11"' Floor Newport Beach, CA, 92660 or at such other addresses as Lessee shall have furnished Lessor in writing. 27.2 No Claims Against Lessor Nothing in this Lease constitutes any consent or request by Lessor for the performance of any labor or services or the furnishing of any materials to the Property 27.3 Integration This Lease, and the exhibits, are the entire Agreement between the Parties, and there are no agreements or representations between the Parties except those specified in this Lease. This Lease supersedes any prior negotiations, representations, discussions or agreements between the Parties with respect to the Property and/or the Theatre. Except as otherwise provided, no subsequent change or addition to this Lease shall be binding unless in writing and signed by the Parties. 27.4 No Waiver By Lessor To the extent permitted by law, no failure by Lessor to insist upon the strict performance of any term of this Lease, or to exercise any right, power or remedy upon a Default under this Lease, shall constitute a waiver. 30 • � "8'2'1'. 27.5 Severability If any term of this Lease or any application thereof shall be declared invalid or unenforceable by a court of competent jurisdiction, the remainder of this Lease shall not be affected. Unless otherwise expressly provided, any approval or consent of Lessor required shall not be unreasonably withheld or delayed. This Lease shall be binding upon and inure to the benefit of and be enforceable by the respective successors of the parties. 27.6 Holdina Over A tenancy for month to month shall result if Lessee remains in possession of the Property or the Theatre with the consent of Lessor after the expiration of the Term. The month to month tenancy shall be on the same terms and conditions as contained in this Lease. 27.7 No Partnership This Lease does not cause Lessor to be a partner of Lessee, a joint venturer with Lessee, or a member of a joint enterprise of Lessee relative to the operation of the Theatre or otherwise. 27.8 Federal Funds Provisions No Federal appropriated funds shall be paid, by or on behalf of Lessee to any person for the purpose of influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or `cooperative agreement. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, and officer or employee of Congress or an employee of a Member of Congress in connection with this Federal contract, grant, loan or cooperative agreement, Lessee shall complete and submit Standard Form -LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. Lessee shall require that the language of this certification be included in the award documents for all contracts, subcontracts, and.agreements. r] Z7.9 Time of the Essence Time is of the essence relative to all of the terms, provisions, covenants and conditions of this Lease. FOR LESSOR CITY0 EWPORT BEACH Dennis O'Neil Mayor for City of Newport Beach FOR LESSEE BALBOA PERFORMING ARTS /THEATRE FOUNDATION . IL - 0% 72,� Dayna Pettit President of Balboa Performing Arts Theatre Foundation APPROVED AS TO FORM CIT,Y�OF NEWPORT BEACH: Robert H. Burnham City Attorney for City of Newport Beach ATTEST: CITY OF NEWPORT BEACH Dated i2 Dated�o2— r / Dated !�z J c� LaVonne Harkless City Clerk for City of Newport Beach Dated ' 0 F:\caNshared\da\Projects\BalboaTheatre\LeaseTina]LeaseI20398.doc 32 • s� CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT ( State of California > f ss. County of On 0 ` t before me, 9 Date Name 8a of officer (e.g.. -Jane Dae. Notary Public) �— r g personally appeared t^� i Motels) of SWAM) Y s % personally known to me proved to me on the basis of satisfactory s evidence w.o Cni�y=isuEe to be the person&f whose nameW isare 1 Commis'ont)�° subscribed to the wit ' instrument and h < Natary PUDIk:-Carifomia <. orange County acknowledged to me a h) he/they executed My Comm b;a emFeb21,2W2 the same inhis erltheir uthorized capacity(, and that by is erltheir signature(¢ on the instrument the person, or ythe entity upon behalf of which the personk 5 acted, executed the instrument. NESS my hand and fficial seal. 5 c n Place Notary Above Seel Abalu of Not Public a i 9 OPTIONAL r Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. •. r y Description of AttachedA)ocument h Title or Type of Document: t'lc i r� �� 5 'r `,. s Document Date: Number of Pages: 3 rs Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer r Signer's Name: t ty _ Individual Top of thumb here Corporate Officer — Title(s): r N. ElPartner — _ Limited ---General a h ❑ Attorney in Fact I T `1 = Trustee ' u Guardian or Conservator r±j E Other: N Signer Is Representing: C `�•�'CS.•C'c'�'C'��.tSCi.w`�`C�,•Cs<%:-�-�"�•w�.r•�•�i'�L9-:'Zi:��c. �:>�., _ .. •E: ®1997 National Notary Association - 9350 De Sola Ave.. P.O. Box 2402 • Chats"MIn. CA 91313-2402 Prod. No. 5107 Reorder: Call Tol-erre 1-800-876.6827 0 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of V c�-�- On 1 - , c i , before me, Dale personally appeared ^a ..ArnY °ISHER 1 Commission s 1174329 Z d NO1ory Public - California Orange County My Comm. BgDkm Feb21, 2002 Da I ss. a.9..\' aM�Doe. N�alary Publie') Names) M Signehs) personally known to me proved to me on the basis of satisfactory evidence to be the person) whose name(\4C- /are subscribed to the within strument and acknowledged to me that a he hey executed the same in his er heir authorized capacity(i and thaT by hisEifteir signature( on the instrument the person or the entity upon behalf of which the person) acted, executed the instrument. W ESS my hand and o cial seal. Place Notary Seal Abwe Sgn re of otary Mile OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attache Title or Type of Document: Document Date: ` - 3 —' - t �O Number of Pages: �✓� 1 . \ Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: Individual Corporate Officer —Title(s): Partner —C Limited El General Attorney in Fact Trustee Guardian or Conservator Other: Signer Is Representing: 0 1997 National Notary Assacialion • 9350 De Solo Ave., P.O. Bos 2402 • Cyalswodh, CA 81313-2402 Prod. No. 5907 Reorder Call Toll.Free 1.880-87&8827 0 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT :+rrrcr.€r,�rzF,erec>eceM,crcrc c�.crc�r.ear.-�.rrmr�-.N.r�e.�*c�.M z��rc�em��rn 41 State of California ss. County of �ri(l t t�• d1 it I t S On ( lt'Y�^1�9Z?�l }4'jWefore me, �i UxV• ( s� Date I Name am Title of Officer (e.g.. 'Jam Doe. N ry Public-) personally appeared LEILANI V. INES _ Commission 0 1170960 Norory Puolic - Coffomio Orange County my Comm. Expires ion 25, 2002 Nama(a) of Signals) 1 personally known to me Y proved to me on the basis of satisfactory Yj evidence to be the person(s) whose names) is/ere subscribed to the within instrument and acknowledged to me that ke/she/tliey executed the same in his/her/their authorized ca acit p y(+es}, and that by hislher/their r signature(e) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS myhand �nd official seal. Place Notary Seal Above Signaawwre of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: C Individual C Corporate Officer—Title(s): _ Partner — r Limited = General Attorney in Fact n Trustee �1 Guardian or Conservator Other: Signer Is Representing: Number of Pages: • ®f99] National Notary Asseciaban - 9750 De Som Ave;. P O. box 2402 • Chatsronn. CA 9i313 "<602 Prdl. No. 5907 Reorder: Can T(91.Fre-10-M-6627e -10-M-66277 10 0 EXHLBIT A LEGAL DESCRIPTION All that real property situated in the City of Newport Beach, County of Oranee, State of California and more particularly described as follows: Lots 4 and 5, Block 10, Balboa Tract, in the City of Newport Beach, as shown on a map recorded in Book 4, Page(s) 11, of Miscellaneous Maps, in the office of the County Recorder of said County. 0 9 b 32 r� r vaw i' b ee " x ln'?+li NY37U ; f 1 I 1 O ytlO 1 h O O tit �I1. �4O (9), 4i OYI y dIS I+` 14 IS � Q O IN 101 4 f 1 I 1 O n h O O R 1 1 1 1 I f 1 I 1 n 1 1 101 i O O to S 1 1 1 1 I 0 dIS I+` 14 IS � Q x ' �o Y N 4 A 77V 4 S If A377Y N, 4 W 1 i 1 p I i � Q O IN 101 4 1 1 1 1 I 1 ! 1 1 1 t 1 1 ! 1 1 7 •1 1 W 1 i 1 p I i � I 1 1 7 •1 1 I I I I 1 W A. General and special taxes and assessments collected with taxes for the fiscal year 1998-1999. Total: $4,018.90. First Installment: 2,009.45 Open Second Installment: 2,009.45 Open Homeowners' Exemption: s0 Code: 07-001 Parcel: 048-135-02 B. The lien of supplemental taxes, if any, assessed pursuant to the provisions of Section 75, et seq. of the Revenue and Taxation Code of the State of California. 1. Covenants, conditions and restrictions (deleting any restrictions indicating any preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status or national origin) as set forth in the document Recorded: in book 153 page 225 of Deeds 2. Covenants, conditions and restrictions (deleting any restrictions indicating any preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status or national origin) as set forth in the document Recorded: in book 3377 pa?e 501, Official Records Said covenants, conditions and restrictions provide that a violation thereof shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value. 3. Rater rights, claims or title to water, whether or not shown by the public records. 4. Matters which may be disclosed by an ihspection or by a survey of said land that is satisfactory to this Company, or by inquiry of the parties in possession thereof. An inspection of said land has been ordered; upon its completion we will advise you of our findings. CLTA Preliminary Report Form (Rr.v rrrros% Paoe I of 2 2807239 5. Rights of the parties in possession of said land, under unrecorded leases. Please submit copies of said leases for our examination. 6. Before issuing its policy of title insurance, this Company will require evidence, satisfactory to the Company, that the vestee corporation named herein: (a) was duly incorporated on the date of acquisition of title hereinafter set forth and (b) is now of good standing in the state where it was formed: Date of Acquisition: October 17, 1995 7. This Company will require a corporate resolution of the board of directors from the corporation(s) vested herein, authorizing this transaction and the execution of the documents necessary to complete it in accordance with instructions given to the Company. Note No. 1: The only conveyances affecting said land recorded within six (6) months of the date of this report are as follows: None. Note No. 2: The premium for a policy of title insurance, if issued, will be based on 8096. JpIlmk cc: Land America Attn: Linda Hamilton 11 Page 2 of 2 �4 CLTA Prefiminazy Report Form (Rev. t1tM)