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J. The California State Lands Commission reviewed the form of this Lease <br />and the range of consideration to be received by the City and determined that the Lease <br />is in conformance with the provisions in the Beacon Bay Bill. <br />1. AGREEMENT TO LEASE <br />1.1 Lease. For good and valuable consideration, the receipt and sufficiency of <br />which are hereby acknowledged, Lessor hereby leases to Lessee the real property <br />commonly known as Beacon Bay Lot 60, ("Property") which is more particularly <br />described in Exhibit "B", and generally depicted on Exhibit "A", each attached hereto <br />and incorporated by reference herein. If Lessee is a Limited Liability Corporation <br />("LLC") Lessee shall provide Lessor with the name of its majority share holder at the <br />time of execution of this Lease. The LLC may not change its majority shareholder <br />without the prior written consent of the City's City Manager or his/her designee. If <br />approved, a change of the majority shareholder triggers a re -appraisal of the Property <br />and an adjustment of Base Rent pursuant to the re -appraisal process in Section 3.6(b). <br />1.2 Reservation of Mineral Rights. Lessor expressly reserves all oil, oil rights, <br />gas, minerals, mineral rights, natural gas rights and other hydrocarbon substances in <br />and under the Property and the right to grant and transfer the same, together with all <br />necessary and convenient rights to explore for, develop, produce and extract and take <br />the same, subject to the express limitation that any and all operations shall be carried <br />on at levels below the depth of five hundred feet (500') from the surface of the land by <br />means of wells, derricks and other equipment from surface locations on adjoining or <br />neighboring land, and subject further to all restrictions and regulations concerning the <br />drilling for, and production of, oil, gas, minerals, petroleum and other hydrocarbon <br />substances specified in the City's Charter and Municipal Code. <br />1.3 Net Lease. This Lease is a net lease, pursuant to which Lessor has no <br />obligation with respect to the payment of taxes, insurance, the cost of maintenance, <br />utilities and repairs or other costs or obligations associated with the Property, except as <br />expressly stated herein. <br />1.4 Termination of Prior Lease(s). Lessee affirmatively represents that: (a) <br />the persons executing this Lease have a hundred percent (100%) of all interests in any <br />prior lease(s) covering the Property; and (b) have authority to execute this Lease and be <br />bound by the terms herein. Upon the execution of this Lease, any lease(s) between the <br />City and the Lessee or any other party covering the Property shall automatically <br />terminate and be of no further effect. Lessee shall execute and record any document(s) <br />that may be required by City to evidence the termination of any prior lease(s) covering <br />the Property. City shall owe no compensation to Lessee or any other party for the <br />termination of a lease under this section. Lessee shall indemnify and hold the City <br />harmless from any and all liability, loss, expense, damage, or claims which may arise <br />directly or indirectly from or in connection with any allegation that the representations <br />made is this section are false. <br />K <br />