HomeMy WebLinkAboutReso RPD 2-1985 RESOLUTION NO. RPD-2-85
SOUTH SAN FRANCISCO RECREATION AND PARK DISTRICT, CITY OF SOUTH SAN FRANCISCO,
STATE OF CALIFORNIA
A RESOLUTION APPROVING OYSTER POINT MARINA LEASES
WHEREAS, the City of South San Fracisco and the San Mateo County Harbor
District have entered into a Joint Powers Agreement for the operation and
maintenance of the Oyster Point Point Marina; and
WHEREAS, in order to carry out the goals and objectives of the Oyster
Point Marina Specific Plan it is necessary that certain parcels within the
Oyster Point Marina be leased to private entities for periods that will
exceed the term of the Joint Powers Agreement between the City and the Harbor
District; and
WHEREAS, the South San Francisco Recreation and Park District owns
portions of the Oyster Point Marina Specific Plan Area;
NOW, THEREFORE, BE IT RESOLVED by the Governing Board of the South San
San Francisco Recreation and Park District that:
1. The'leases of Parcels B and D located within the Oyster Point Marina,
which leases are attached hereto as Exhibits "1" and "2" and are incorporated
herein as though set forth verbatim, are hereby approved.
2. The aforementioned leases will be continued in effect by the South San
San Francisco Recreation and Park District to the year 2035 subject to all of
the same terms, conditions and convenants contained therein.
I hereby certify that the foregoing Resolution was regularly introduced and
adopted by the South San Francisco Recreation and Park District of the City of
South San Francisco at a special meeting held on the 9th day of
January
AYES:
NOES:
ABSENT:
, 1985 , by the following vote:
Board members Mark. N. Adddlego. Emanuele N. DamontP, Rirh,rd A* Naffey,
Gus Nicolopulos; and Roberta Cerri Teglia
None
None
Secretary to the District
2
ADJUSTMENT
AMENDMENTS
ANT!-Di. SCRIMINATION
coNDiTIONS
PARCELS' B AND D
ALPHABETICAL
INDEX
OF RENT (ARTICLE V) ' 6
(ARTICLE XXXIII) ' m ' 3~
(ARTICLE XXXVI;) ............................... 36
ASSIGNMENT, SUBLETTING~ & HYPOTHECATION (ARTICLE XVi) ............ ZO
CAPTIONS (ARTICLE XXVII)' ' 35
CLAIMS AND PROTEST (ARTICLE XIX) .................................
COMPLIANCE WITH LAWS AND REGULATIONS (,ARTICLE XIII)., ............ ~6
CONDEKNAT~ON (ARTICLE XXVI) ' ' 34
CONSTRUCTION (ARTICLE IV) -3
DECLARATION OF KNOWLEDGE BY LESSEE (ARTIC4E II) ................... 3
' I~REACH (ARTICLE XVIII) ......
DEFAULT OR .................................
-.-FINITIONS (ARTICLE XXX¥II
DESTRUCTION (ARTICLE XXIV) ' 3Z
DISTRICT'S RIGHT TO RE-ENTER (ARTICLE XXXII) ..................... 36
FEE FOR FAILURE TO PAY NHEN DUE (ARTICLE Vi) ......................
FINANCIAL REPORTS AND RECORDS (ARTICLE XV) ................. - ...... 17
FORCE MAJEURE (ARTICLE XXX) - 36
HOLD UARMLESS (ARTICLE XIV) '17
HOLDinG OVER -(ARTICLE XXXI) ....................................... 35
INSUR ..... E (ARTICLE VIII)
LIMITATION OF LEASEHOLD (ARTICLE XXIX).. ............... - - ----. .
LIQUIDATED DAItAGES (ARTICLE XI) 15
MAINTENANCE AND REPAIR (ARTICLE XXII) ........................... 30
--
0PE~ATION~ (ART'ICLE
OWnErShIP OF LEASES
SSESSORY INTEREST
(ARTICLE
X) ' 14
(ARTICLE XVII) ............................... Z4
TA'XES, TAXES, ASSESSMENTS AND FEES ~
IX) .......................................... 13
PROTECTION OF. LEASED PREMISES (ARTICLE XII) ................... · .... 1.~
QUIET ENJOYMENT (ARTICL III) ....... . ................. '~ ...... - ..... 3
REENTRY BY DISTRICT WITHOUT TERMINATION (ARTICLE IX) ...... ; ...... Z8
REMOVAL OF IMPROVEMENTS AND OWNERSHIP UPON TERMINATION
(ARTICLE XXV) .........................................
RIGHT OF ENTRY BY PUBLIC ENTITIES (ARTICLE -XXIII) ................
SAVINGS CLAUSE (ARTICLE XXVIII) - ' 35
SECURITY DEPOSIT (ARTICLE VII) ....................................
TIME (ARTICLE XXXIV) ' ' 36'
WAIVER AND NON"WAIVER (ARTICLE
~RRANTY .OF TITLE (ARTICLE I).
XXI) 30
F
LEASE
GENERAL CONDITIONS
PARCELS E: AND
ARTICLE I - WARRANTY OF TITLE
A. DISTRICT WARRANTS THAT IT HAS AUTHORITY TO LEASE'THE LANDS IN
QUESTION AND THAT THERE ARE NO RESTRICTIONS, LIENS OR ENCUMBRANCES
WHICH WOULD PREVENT LESSEE FROM DEVELOPING AND OPERATING THE BUSINESS
ENTERPRISES PROVIDED FOR IN THIS LEASE EXCEPT AS MAy BE SPECIFICALLY
SET FORTH IN'THE LEASE DOCUMENTS.
B. DISTRICT FURTHER WARRANTS THAT DEVELOPMENT ON LANDS OWNED OR
CONTROLLED BY THE DISTRICT SHALL BE OF COMPATIBLE USES. DISTRICT .AND
LESSEE AGREE THAT THIS LEASE SHALL IN NO NAY LIMIT DISTRICT'S RIGHT TO
DEVELOP LIKE BUSINESS ENTERPRISES AND'OTHER COMPATIBLE USES AT ANY
TIME ON LANDS OWNED OR CONTROLLED BY THE DISTRICT.
ARTICLE I~ - DECLARATION OF KNOWLEDGE BY LESSEE
LESSEE WARRANTS THAT LESSEE HAS CAREFULLY EXAMINED THIS LEASE AND BY
INVESTIGATION OF THE SITE AND OF ALL MATTERS RELATING TO THE LEASE
ARRANGEMENTS HAS FULLY INFORMED ITSELF AS.TO ALL EXISTING CONDITONS
AND LIMITATIONS AFFECTING THE CONSTRUCTION OF THE LEASE IMPROVEMENTS
AND BUSINESS PRACTICES REQUIRED IN THE OPERATION AND MANAGEMENT OF THE
ES CONTEMPLATED HEREUNDER.
~TICLE III - ~UIET ENJOYMENT "' -
LESSEE, PAYING THE RENT HEREIN RESERVED, AND PERFORMING AND OBSERVING
THESE VERBAL COVENANTS AND CONDITIONS BY IT TO BE KEPT AND PERFORMED
MAY PEACEABLY HOLD AND ENJOY .THE LEASED PREMISES'SUBJECT TO T~E TERMS,
COVENANTS~ .AND CONDITIONS OF THIS LEASE DURING THE TERM THEREOF.
ARTICLE IV - CONSTRUCTION
A. LESSEE SHALL BE RESPONSIBLE FOR THE CONSTRUCTION OF
LESSEE-OWNED IMPROVEMENTS AT ITS SOLE COST AND EXPENSE.
~. LESSEE SHALL SUBMIT AND OBTAIN APPROVA~L OF'~LANS AND'
SPECIFICATIONS FOR ALL IMPROVEMENTS IN ACCORDANCE WITH THE
REQUIREMENTS OF "DESIGN CRITERIA FOR CONSTRUCTION BY LESSEE .... ETC."
AS DESIGNATED AND/OR'REQUiRED BY THE HARBOR DISTRICT, AND
ALL APF'LICABLE CODES AND ORDINANCES, INCLUDING BUT NOT LIMITED TO
DIST2ICT,' CITY, COUNTY~ STATE AND FEI~ERAL. AFTER APPROVAL OF
SCHEMATIC PHASE, LESSOR SHALL NOT UNREASONABLY WITHHOLD APPROVALS OF
SUCCEEDING PHASES PROVIDED THEY FOLLOW THE SCHEME AND SCHEDULE
ESTAE~LISHED IN THE SCHEMATIC PHASE AS .PREVIOLISLY APPROVED B'Y THE
DISTRICT. ~
C. ~RFORMANCE AND PAYMENT BOND. NO CONSTRUCTION SHALL BE
CO~MENC~-~ ~ ~EE~ TO HAVE COMMENCED AT THE LEASED PREMISES UNTIL
LESSEE HAS PROVIDED DISTRICT A PERFORMANCE AND PAYMENT BOND IN THE
AMO~NT OF THE TOTAL ESTIMATED CONSTRUCTION COSTS OF THE IMPROVEMENTS
73 ~E CONSTRUCTED'BY LESSEE.
SAID BOND SHALL BE IN A FORM ACCEPTABLE TO DISTRICT AND SHALL
.~%ATE THE FOLLOWING: :
S. THAT IT IS CONDITIONED TO SECURE THE COMPLETION OF THE
PROPOSED CONSTRUCTION, FREE FROM ALL LIENS AND CLAIMS OF CONTRACTORS~
SUBCONTRACTORS, MECHANICS, LABORERS, AND MATERIAL AND/OR EQUIPMENT
SUPPLIERS, ETC. ~
Z. THAT THE CONSTRUCTION WORK SHALL BE FULLY AND FAITHFULLY
PERFORMED BY LESSEE, THE GENERAL CONTRACTORS, OR, ON THEIR DEFAULT~
THE SURETY. ~
3. THAT IN DEFAULT OF SUCH COMPLETION AN~ PAYMENT, SUCH PART
OF THE AMOUNT OF THE BOND AS SHALL BE REQUIRED TO COMPLETE THE WORK
SHALL BE PAID TO DISTRICT AS LIQUIDATED AND AGREED DAMAGES FOR THE
NONPERFORMANCE OF THE LESSEE'S AGREEMENT.; IT BEING AGREED THAT THE
AMOUNT OF .THE DISTRICT'S DAMAGES' IS EXTREMELY DIFFICULT TO ASCERTAIN
AND DETERMINE.
4. THAT THE SURETY WILL DEFEND AND INDEMNIFY DISTRICT AND/OR
!TS SUCCESSORS AND EACH OF THEIR ELECTIVE AND APPOINTIVE BOARDS,
COMMISSIONS, .AGENTS, CONSULTANTS, INDEPENDENT CONTRACTORS AND
EMPLOYEES AGAINST ALL LOSSES, COSTS, DAMAGES, EXPENSES~ CLAIMS, AND
) A~ILITIES OF ANY KIND, ARISING OUT OF OR CONNECTED WITH THE
NoTRUCTION.
IN' LIEU OF A PERFORMANCE AND PAYMENT BOND, LESSEE NAY PROVIDE-
CCNaTRU~TION SURETY BONDS SUPPLIED BY LESSEE'S GENERAL CONTRACTOR OR
CONTRACTORS, PROVIDED SUCH BONDS CONTAIN THE SAME CONDITIONS,. ARE
ISSUED JOINTLY 'TO LESSEE AND DISTRICT, AND ARE IN AN AMOUNT E~UAL TO
THE TOTAL ESTIMATED CONSTRUCTION COST OF THE IMPROVEMENTS.
SHOULD LEssEE ACT AS OWNER/BUILDER, THEN ALL SUBCONTRACTORS SHALL
PROVIDE CONSTRUCTION SURETY BONDS ON THE SAME CONDITIONS AS ABOVE
STATED FOR CONSTRUCTION SURETY BONDS TO BE PROVIDED BY LESSEE'S
GENERAL CONTRACTOR.
ALL CONSTRUCTION PERFORMANCE AND PAYMENT BONDS SHALL BE ISSUED BY
A RESPONSIBLE SURETY COMPANY QUALIFIED TO DO BUSINESS IN THE STATE OF
CALIFORNIA ACCEPTABLE TO DISTRICT, AND SHALL REMAIN IF EFFECT UNTIL
THE ENTIRE COST OF THE WORK SHALL HAVE BEEN PAID IN FULL AND THE NEW
~PROVEMENTS SHALL HAVE BEEN INSURED AS PROVIDED BY THIS LEASE.
D. CERTIFICATE OF COMPLETION. UPON COMPLETION OF SAID
I~DROVEMENTS AND ANY APPROVED MODIFICATION THERETO~ SAN MATEO COUNTY
HAR[:OR DISTRICT WILL EXECUTE AND DELIVER TO LESSEE A CERTIFICATE OF
CO.;~FLETION WHICH WILL RECITE THAT DISTRICT HAS INSPECTED AND APPROVED
"'"~L i~PROVEMENTS AND THAT THERE EXISTS NO DEFAULT IN T~IS LEASE HITH
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RESPECT TO SAID IMpROvEMENTs AS OF THE DATE'OF 'THE CERTIFICATE, IF
SUCH' IS~T~E FACT.
~ E. STATEMENT OF C~RUC~!~_COSTS AND "AS=BUILT" PLANS.
.J~jTHIN SIXTY (60)'DAYS FOLLOWING COMPLETION OF ANY SUBSTANTIAL
1PROVEMENT ~ITHIN THE LEASED PREMISESf LESSEE SHALL FURNISH DISTRICT
COMPLETE REPRODUCIBLE SET OF "AS-BUILT" PLANS AND AN ITEMIZED
~£ATEMENT OF THE ACTUAL.CONSTRUCTION COST OF SUCH IMPROVEMENT. THE
STATEMENT OF COST SHALL BE SWORN TO AND SIGNED BY LESSEE OR HIS-
RESPONSIBLE'AGENT UNDER PENALTY Of PERJURY. ' .
F'. APPROVAL OF CHANGES AFTER COMPLETIO~ OF THE' ORIGINAL
CONSTRUCTION,I STRUCTURAL MODIFICATIONS, ALTERATIONS, OR MAJOR OR'MINOR
REPAIR SHALL coMpLY WITH THE PROVISIONS OF THE CURRENT."DESIGN
CRITERIA FOR CONSTRUCTION BY LESSEE" (EXHIBIT B), AND SHALL NOT. BE .
COMMENCED WITHOUT DISTRICT'S PRIOR WRITTEN APPROVAL OF THE PLANS,
SPECIFICATIoNs AND SCHEDULE' FOR SUCH CONSTRUCTION, STRUCTURAL
MODIFICATION, OR ALTERATION. REPAIRS OR CHANGES IN RESPONSE TO
EMERGENCY.CONDITIONS .MAY BE MADE WITHOUT PRIOR APPROVAL, PROVIDED .THAT
SAID REPAIRS OR CHANGES CONFORM TO ALLOWED USES, DO NOT CONSTITUTE
STRUCTURAL MODIFICATIONS AND DO NOT MATERIALLY CHANGE THE APPEARANCE
OF THE PR~MISES AS PREVIOUSLY APPROVED. LESSOR SHALL NOT UNREASONABLY
WITHHOLD APPROVAL OF CHANGES CONFORMING TO THE THEN CURRENT "DESIGN
CRITERIA" (EXHIBIT B) AND OVERALL CONCEPT OF THE PROJECT INCLUDING
UPGRADES AND CHANGES REQUIRED TO ALLOU THE PROJECT TO MODERNIZE AND
REMAIN COMPETITIVE AS TIME GOES ON.
G. NOTICE OF NON-RESPONSIBILITY. DISTRICT HAs FULL AND
F~IMPLETE ACCESS· TO THE LEASED PREMISES TO POST AS MANY "NOTI£ES OF
N-RESPONSIBILITY" AS THE DISTRICT DEEMS APPROPRIATE.
''- H. MECHANICS LIEN~. LESSEE SHALL AT ALL TIMES INDEMNIFY AND
SAVE 'DISTRICT HARMLESS FROM ANY AND ALL CLAIMS FOR LABOR AND MATERIALS
IN CONNECTION WITH CONSTRUCTION, REPAIR, ALTERATIONS, OR INSTALLATION
OF STRUCTURES, IMPROVEMENTS, EQUIPMENT, OR FACILITIES AT THE LEASED
PREMISES, AND FROM THE COST.OF DEFENDING AGAINST SUCH CLAIMS,
I'NCLUDING ATTORNEYS' FEES. IN COMPLYING WITH THIS PROVISION LESSEE
MAY PROVIDE LEGAL COUNSEL, ACCEPTABLE TO THE DISTRICT, TO DIRECTLY
REPRESENT AND DEFEND THE DISTRICT. SAIS' COUNSEL 'MUST BE FREE FROM ALL
CONFLICTS OF INTEREST IN SAID REPRESENTATION.
IN THE EVENT A LIEN IS IMPOSED UPON THE LEASED PREMISES AS.A
RESULT OF SUCH CONSTRUCTION, REPAIR, ALTERATION. OR INSTALLATION,
LESSEE SHALL PROCURE AND RECORD A BOND IN ACCORDANCE WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3143, WHICH FREES THE
L'EASED PREMISES FROM THE CLAIM OF THE LIEN AND FROM ANY 'ACTION BROUGHT
TO FORECLOSE THE LIEN.
ABSENT A WRITTEN WAIVER BY THE DISTRICT, SHOULD LESSEE FAIL TO
PROCURE AND RECORD SAID BOND WITHIN TEN (10) DAYS AFTER THE FILING OF
ANY SUCH LIEN~ THIS LEASE SHALL BE IN DEFAULT AND SHALL BE SUBJECT TO
IMMEDIATE TERMINATION BY DISTRICT, ANYTHING IN 'THIS LEASE TO THE
...~JNTRARY NOTWITHSTANDING. ~
--5- -
ARTICLE"¥' - 6~USTMENT OF RENT
A. ADJUSTMENT OF MINIMUM ANNUAL RENT. AT THE BEGINNING OF THE
'""XTH (GTH) YEAR AND OF EACH FIVE-YEAR PERIOD THEREAFTER, THE MINIMUM
~UAL RENT SHALL BE.ADJUSTED FOR THE NEXT ENSUING FIVE-Y~AR PERIOD TO
"~W AMOUNT EQUAL TO SEVENTY-FIVE (75) PERCENT OF THE AVERAGE OF-THE
TOTAL YEARLY RENT PAID DURING THE PREVIOUS FIVE-YEAR PERIOD; PROVIDED,
HOWEVER, IN NO EVENT SHALL SUCH ADJUSTED MINIMUM ANNUAL RENT BE LESS
THAN THE MINIMUM ANNUAL RENT FOR THE PREVIOUS'YEAR OF THE LEASE'TERM.
ON THE FIRST DAY OF EACH O~ THE FIRST THREE MONTHS.OF EACH"
SUCH ENSUING FIVE-YEAR PERIOD, LESSEE SHALL PAY ONE-Tt~ELFTH OF THE
MINIMUM ANNUAL RENT AT THE RATE PAID DURING THE LAST PRECEDING YEAR~
NO LATER THAN THE END OF SUCH THREE-MONTH PERIOD~ LESSEE SHALL PAY THE
ADDITIONAL AMOUNT, IF ANY, BETWEEN THE AMOUNT P~ID AS MINIMUM ANNUAL
RENT AND 'THE AMOUNT DUE. AS ADJUSTED MINIMUM ANNUAL RENT. ANY
OVERPAYMENT MADE DURING SUCH THREE-MONTH PERIOD SHALL BE CREDI[ED
AGAINST FUTURE MINIMUM ANNUAL RENT.
B. ~D'JUSTMENT OF PERCENTAGE RENT
1. AT ANY TIME NO EARLIER THAN TWO HUNDRED SEVENTY (270)
DAYS NOR LATER THAN ONE HUNDRED EIGHTY (180) DAYS PRIOR TO THE TENTH
(lOTH) ANNIVERSARY OF THE LEASE TERM, AND WITHIN SAID TIME LIMITS
PRIOR TO EACH TEN-YEAR PERIOD DURING THE TERM OF THIS LEASE
THEREAFTER, EITHER LESSEE OR D~STRICT MAY, BY WRITTEN NOTICE TO THE
OTHER, REQUEST MODIFICATION OF THE PERCENTAGES OF GROSS RECEIPTS
F'"'~YA~LE AS RENT.
-- AFTER RECEIPT OF SUCH'NOTICE, LESSEE AND DISTRICT MAY
NEGOTIATE MODIFICATION OF THE PERCENTAGES OF THE GROSS RECEIPTS AS
RENT HEREUNDER. IF NO WRITTEN REQUEST IS GIVEN AS HEREIN PROVIDED~
THE PERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT SHALL CONTINUE AS
THE BASIS FOR DETERMINATION OF PERCENTAGE RENT UNTIL THE NEXT
PERCENTAGE REN~ MODIFICATION REQUEST PERIOD AND COMPLIANCE N'ITH THE
P~OViSIONS OF'THIS SUB-ARTICLE OCCUR.
Z. IF, A~TER A WRITTEN REQUEST FOR MODIFICATION, LESSEE AND
DISTRICT AGREE THAT MODIFICATIONS ARE APPROPRIATE BUT ARE UNABLE TO
AGREE ON THE.MODiFICATION OF THE PERCENTAGES OF GROSS RECEIPTS PAYABLE.
AS RENT BY THIRTY (30) DAYS PRIOR TO THE TENTH (IOTH~ ANNIVERSARY OF
THE LEASE TERM OR THIRTY (30) DAYS PRIOR TO TH~ COMMENCEMENT DATE OF
EACH TEN-YEAR PERIOD THEREAFTER, AS APPLICABLE~ THEN
THE PERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT SHALL.
CCNTINUE AS THE BASIS FOR DETERMINATION OF' PERCENTAGE RENT UNTIL
~ODIF1ED AS HEREINAFTER PROVIDED.
(b) AT ANY TIME NO EARLIER THAN THIRTY (30) DAYS NOR LATER
THAN SEVEN (7) DAYS PRIOR TO THE TENTH (lOTH) ANNIVERSARY OF THE LEASE
TERM, 0,~ WITHIN SAID TIME LIMITS PRIOR. TO THE COMmENCEmENT OF EACH
~'-:'N-YEAR PERI.OD THEREAFTER, AS APPLICABLE, LESSEE OR DISTRICT MAY~ BY
:~iTTC",-k NOTICE TO THE OTHER, ELECT' TO SUBMZT DETERMINATION OF
~;.ERCENTAGE RENTS FOR ARBITRATION. WITHIN TEN (10) DAYS AFTER SUCH
~;C'TICE, LESSEE AND DISTRICT SHALL EACH APPOINT AN ARBITRATOR AND
·
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INFORM THE OTHER IN WRITING OF THE NAME. AND ADDRESS OE ITS APPOINTED
ARBITRATOR. BEFORE SELECTING AN ARBITRATOR(S), THE LESSEE AND
DISTRICT MUST AGREE ON THE QUALIFICATIONS REQUIRED FOR BOTH
ARBITRATORS, IN' WRITING. ARBITRA¥ORS MAY BE REJECTED BY THE OPPOSING
SIDE I,F THE ARBITRATION DOES NOT MEET THE AGREED UPON QUALIFICATIONS.
(c) IF WITHIN SIXTY (60) DAYS AFTER APPOINTMENT OF THE
BiTRATORS,'THE ARBITRATOR HAVE NOT AGREED ON THE MODIFICATION-OF THE
~,.RCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT, THE'ARBITRATORS SHALL
IMMEDIATELY APPOINT A THIRD ARBI.TRATOR, SUBJECT TO THE SAME ....
QUALIFICATIONS, AND THE DECISION OF ANY TWO ARBITRATORS SHALL. BE
BINDING ON THE'PARTIES'TO THIS LEASE.' THE THREE ARBiTRATORS.SHALL
'SUBMIT THEIR DECISIONS WITHIN NiNE~Y (90) DAYS AFTER THE APPOINTMENT
OF THE'THIRD ARBITRATOR. IF NO DECISION IS MADE WITHIN SAID NINETY
(90) DAYS,'THE PERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT SHALL
CONTINUE AS THE BASIS FOR DETERMINATION OF PERCENTAGE RENT UNTIL THE
'NEXT MODIFICATION REQUEST PERIOD AND COMPLIANCE ~ITH THE' PROVISIONS OF
THIS SUB-ARTICLE OCCUR, '.
'~'d) THE DECISION OF THE' ARBITRATORS SHALL BE IN WRITING,
DATED AND SIGNED BY THE ARBITRATORS IN DUPLICATE. ONE COPY OF.THE
DECISION SHALL BE DELIVERED TO LESSEE AND THE OTHER TO DISTRICT, THE
PERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT, AS FIXED BY THE
ARBITRATOR~, SHALL BECOME EFFECTIVE ON THE DATE OF THE DECISION OF THE
ARBITRATORS, ...
(e') IF THE PARTIES AGREE THAT MODIFICATIONS ARE'APPROPRIATE
BUT ARBITRATION IS NOT CONDUCTED VOLUNTARILY AS PROVIDED HEREIN,
EITHER PARTY MAY PETITION TO THE SUPERIOR.COURT, IN ACCORDANCE WITH .
THE PROVISIONS O~ SECTIONS lZBO, ET SEQ., OF THE CODE OF CIVIL
FOCEDURE OF THE STATE OF CALIFORNIA. . : '
{~) IN N'O EVENT SHALL THE PERCENTAGE OF GROSS RECEIpTs
PAYABLE AS PERCENTAGE RENTS BE RAISED OR LOWERED MORE THAN TWENTY-FIVE
PERCENT (ZSZ) ,OF THE PERCENTAGE IN EFFECT AT THE COMMENCEMENT OF THE
THEN CURENT ARBITRATION, AND FURTHER, THE.ADJUSTED PERCENTAGE FOR ANY
USE OR SERVICE 'SHALL NOT BE LESS THAN THE MINIMUM PERCENTAGE'FOR SUCH
USE'OR SERVICE AS LISTED IN THE PROPOSAL FOR AN OPTION TO LEASE. ANY
ADJUSTMENT OF THE PERCENTAGE RENTS SHALL BE BASED UPON USES AND
SERVICES PERMITTED UNDER THIS LEASE. ' :
EACH PARTY HERETO SHALL PAY THE CHARGES OF THE
ARBITRATOR APPOINTED BY IT AND THE EXPENSES' INCURRED BY SUCH
ARBITRATOR. THE CHARGES FOR SERVICES OF THE THIRD ARBITRATOR AND THE
OTHER EXPENSES OF ARBITRATION SHALL BE BORNE BY, LESSEE AND DISTRICT IN
EQUAL SHARES.
A~TICLE VI - FEE FOR FAILURE TO PAY WHEN DUE
ALL MONIES, INCLUDING, WITHOUT LIMITATION, RENT SECURITY DEPOSIT,
FEES FOR FAILURE TO PAY WHEN DUE, AS HEREINAFTER PROVIDED, LIQUIDATED
DAMAGES, AND ANY OTHER PAYMENTS THAT LESSEE IS OBLIGATED TO MAKE~
~HICH ARE PAYABLE TO DISTRICT BY LESSEE, ARE A~REED TO BE PAYABLE
WITHOUT ABATEMENT, DEDUCTION, OR OFFSET OF ANY KIND OR CHARACTER
WHATSOEVER.
IF~MDNEY 'PAYABLE TO DISTRICT. AS A CONDIT'ION OF THiS LEASE IS NOT
PAID WITHIN TEN (10) DAYS WHEN DUE, A LATE CHARGE OF 5% OF THE AMOUNT
DUE~SHALL BE ASSESSED AND THE PRINCIPAL SHALL ACCRUE INTEREST AT THE
.T.L~EN CURRENT PRIME'RATE, AS SET BY BANK OF AMERICA ON SAID DATE, FROM
ID AFTER THE'DUE DATE OF ANY PAYMENT OF FIXED MINIMUM RENT,
~RCENTAGE RENT, RENT SECURITY DEPOSIT, LIQUIDATED DAMAGE~ OR ANY
-u~HER PAYMENTS.
ARTICLE VII - SECURITY DEPOSIT
i
LESSEE SHALL PROVIDE DISTRICT-'W'ITH, AND AT AEL TIMES THEREAFTER
MAINTAIN, A SECURITY DEPOSIT IN THE AMOUNT OF $34,500. AFTER THE
FIFTH YEAR OF THE LEASE, SUCH AMOUNT SHALL BE ADJUSTED PERIODICALLY~
'AND CONCURRENTLY WITH THE'ADJUSTMENT OF MINIMUM ANNUAL RENT, TO
ONE-HALF OF THE AMOUNT OF THE THEN CURRENT MINIMUM ANNUAL RENT;
PROVIDED,. HOWEVER, AT ALL TIMES THE SECURITY DEPOSIT. SHALL BE NOT LESS
THAN $34,500. $10,350 OF SAID SECURITY DEPOSIT IS ALLOCATED TO LEASE
PARCEL B AND $Z4.,150 IS. ALLOCATED TO LEASE PARCEL
THE SECURITY DEPOSIT SHALL TAKE ONE OF THE FORMS SET OUT BELOW
AND SHALL GUARANTEE LESSEE'S FULL AND FAITHFUL PERFORMANCE OF ALL THE
TERMS, CO~ENANTS~ AND CONDITIONS OF THiS LEASE:
A. CASH
B. THE ASSIGNMENT TO DISTRICT OF A SAVINGS DEPOSIT HELD IN A
FINANCIAL INSTITUTION IN SAN MATEO COUNTY ACCEPTABLE TO DISTRICT.
,;H ASSIGNMENT SHALL CONSIST OF DELIVERY TO DISTRICT OF THE 'ORIGINAL
oSBOOK FOR SUCH SAVINGS DEPOSIT AND EXECUTION AND DELIVERY OF A
ITTEN ASSIGNMENT. OF SAID' DEPOSIT'TO DISTRICT ON A FORM.APPROVED BY
'~iSTRICT.
C. A RENEWABLE TIME CERTIFICATE OF DEPOSIT FROM A FINANCIAL
INSTITUTION IN SAN MATEO COUNTY WHEREIN THE PRINCIPAL SUM IS MADE
PAYABLE TO DISTRICT ON-ORDER. BOTH THE FINANCIAL INSTITUTION AND THE
FORM OF THE CERTIFICATE MUST BE APPROVED BY DISTR~CT.
D. ANY INCREASE IN THE SECURITY DEPOSIT MAY BE IN. ANY OTHER FORH
APPROVED IN WRITING BY THE DISTRICT~ WITH THE FIRST $34~500 REQUI~ED
TO BE IN ONE OF THE THREE (3) ABOVE*DESCRIBED FORMS.
E. A RENEWABLE INSTRUMENT'OR INSTRUMENTS OF CREDIT-FROM ONE OR
MORE FINANCIAL INSTITUTIONS, SUBJECT TO REGULATION BY THE STATE OR
FEDERAL GOVERNMENT, PLEDGING THAT FUNDS NECESSARY TO SECURE
PERFORMANCE OF THE LEASE TERMS, COVENANTS~ AND CONDITIONS ARE
GUARANTEED FOR PAYMENTs. AND AGREEING THAT SAID FUNDS SHALL SECURE
LE$SEE'S PERFORMANCE~ 'AND .THAT.ALL OR ANY PART SHALL BE.PAID TO
DISTRICT UPON DEMAND. ~OTH THE FINANCIAL INSTITUTION(S) AND THE FORM
£~F THE INSTRUMENT(S) MUST ~E APPROVED BY DISTRICT.
LESSEE MAY CHANGE THE FORM OF SECURITY DEPOSIT (A. THROUGH D.,
I_.i~CL"-JSIVE ABO.VE). ONLY WITHIN THIRTY (30) DAYS AFTER AN~ ANNIVERSARY OF.
LEASE TERM. REGARDLESS OF THE FORM IN [qHICH LESSEE ELECTS TO MAKE
~ID SECURITY DEPOSIT~ ALL OR ANY PORTION OF THE PRINCIPAL SUM SHALL
AVAIl. ABLE UNCONDITIONALLY TO DISTRICT FOR CORRECTING ANY DEFAULT OR
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BREACH OF THIS LEASE BY LESSEE, HIS SUCCESSORS OR ASSIGNS, OR FOR
PAYMENT OF EXPENSES INCURRED BY. DISTRICT AS A.RESULT OF THE FAILURE OF
LESSEE,,,HIS SUCCESSORS OR ASSIGNS., TO FAITHFULLY PERFORM ALL THE
TERMS, COVENANTS, AND CONDITIONS OF THI~ LEASE.
SHOULD LESSEE ELECT TO ASSIGN A SAVINGS DEPOSIT TO DISTRICT,
F~OVIDE A TIME CERTIFICATE OF DEPOSIT, OR PROVIDE AN INSTRUMENT OF
! ~EDIT TO FULFILL THE SECURITY DEPOSIT REQUIREMENTS OF THIS LEASE, THE
~EPOSITORY OR ISSUER THEREIN SHALL .INCUR NO LIABILITY BECAUSE OF THE
PAYMENT OF ANY OR ALL OF THE PRINCIPAL SUM TO DISTRICT UPON'DEMAND.
THE AGREEMENT ENTERED INTO BY LESSEE WITH A FINANCIAL .INSTITUTION TO
ESTABLISH THE DEPOSIT NECESSARY TO, PERMIT ASSIGNMENT OR ISSUANCE OF A
CERTIFICATE, AS PROVIDED ABOVE, MNY ALLOW THE PAYMENT TO LESSEE OF
INTEREST ACCRUING ON ACCOUNT OF SAID DEPOSIT.
IF AT ANY TIME DURING THE TERM OF THIS LEASE, ANY RENT OR ANY
OTHER SUM PAYBLE TO DISTRICT SHALL BE OVERDUE AND UNPAID, DISTRICT
NAY', AT DISTRICT'S OPTION, APPLY ANY PORTION OF THIS SECURITY DEPOSIT
TO THE PAYMENT OF ANY OVERDUE RENT OR ANY OTHER SUNS DUE AND PAYABLE
TO DISTRICT UNDER THIS LEASE.
SHOULD THE ENTIRE SECURITY DEPOSIT OR ANY PORTION THEREOF BE
APPROPRIAT.ED AND APPLIED BY DISTRICT FOR THE PAYMENT OF OVERDUE RENT
OR' ANY SUCH OTHER SUM DUE AND PAYABLE TO DISTRICT BY LESSEE, THEN
LESSEE SHALL WITHIN THIRTY DAYS (30) AFTER WRITTEN DEMAND BY DISTRICT,
RESTORE SAID SECURITY DEPOSIT TO THE REQUIRED AMOUNT.
LESSEE SHALL MAINTAIN THE-REQUIRED SECURITY DEPOSIT THROUGHOUT
THE LEASE TERM. FAILURE TO DO SO SHALL BE DEEMED A DEFAULT AND SHALL
BE GROUND FOR IMMEDIATE TERMINATION OF THIS LEASE.
THE SECUR Y DE oSII SHAL BE REBATED, REASSIGNED, RELEASED OR
DOWSED TO LEooEE ON ORDER, Ao APPLICABLE, AT THE END OF THE LEASE
TERM, PROVIDED LESSEE IS NOT THEN IN DEFAULT AND HAS PERFORMED ITS
OBLIGATIONS REQUIRED TO BE PERFORMED UPON TERMINATION OF THIS LEASE,
ARTICLE VIII - INSURANCE
A. INSURANCE DURING CONSTRUCTION LESSEE SHALL MAINTAIN, KEEP
IN FORCE AND PAY ALL PREMIUMS.REQUIRED TO MAINTAIN AND KEEP IN FORCE
ALL CLASSES OF THE FOLLOWING INSURANCE AT ALL TIMES DURING WHICH THERE
IS ANY CONSTRUCTION, INCLUDING "MAJOR REPAIR" (AS LATER DEFINED IN
THIS LEASE). '
1. BUILDERS RISK INSURANCE' "ALL RISKS" BUILDERS RISK
INSURANCE INCLUDING VANDALISM AND MALICIOUS MISCHIEF, COVERING ALL
MATERIAL AND EQUIPMENT AT THE JOB SITE FURNISHED UNDER CONTRACT, BUT
EXCLUDING CONTRACTOR'S~ SUB-CONTRACTOR'S, AND CONSTRUCTION MANAGER'S
TOOLS AND EQUIPMENT AND PROPERTY OWNED BY CONTRACTOR'S OR
SUB-CONTRACTOR'S EMPLOYEES, WITH LIMITS OF NOT LESS THAN ONE HUNDRED
PERCENT (1OOZ) OF THE TOTAL ESTIMATED COST OF CONSTRUCTION.
Z. BOILER~_UN~SUAL HAZAR~_~ND OTHER INSURANCE
BOILER AND MACHINERY INSURANCE IN SUCH.AMOUNTS OF COVERAGE AS
REASONABLY SATISFACTORY TO DISTRICT IF AT ANY. TIME OR FROM TIME TO
TIME SUCH'EQUIPMENT IS LOCATED ON THE LEASED PREMISES. IF LESSEE
COMME~CES, PERMITS, OR CAUSES THE CONDUCT OF ANY ACTIVITY OR THE
BRINGING OR OPERATION OF ANY EQUIPMENT ON OR ABOUT THE LEASED PREMISES
r-'~EATING UNUSUAL HAZARDS, LESSEE SHALL, PROMPTLY ON NOTICE OF DEMAND
: DISTRICT, PROCURE-AND MAINTAIN IN FORCE DURING SUCH ACTIVITY OR
.~ERATION, INSURANCE SUFFICIENT TO COVER THE RISKS REPRESENTED
THEREBY. DISTRICT'S DEMAND FOR UNUSUAL HAZARD INSURANCE SHALL NOT
CONSTITUTE A WAIVER OF DISTRICT'S RIGHT, IF DISTRICT WOULD OTHERWISE
HAVE THAT .RIGHT, TO DEMAND THE-REMOVAL, CESSAT!ON,-OR ABATEMENT OF
SUCH ACT.IVITY OR OPERATION. OTHER INSURANCE, IN AMOUNTS FROM TIME TO
TIME REASONABLY REQUIRED BY DISTR~CT, AGAINST OTHER INSURABLE RiSKS-~
IF AT THE TIME SUCH INSURANCE IS PROCURABLE AND THE TOTAL ~REKIUM COST
FOR' SUCH INSURANCE DOES NOT EXCEED AN AMOUNT EQUAL TO THE TOTAL
PREMIUM COST FOR INSURANCE REQUIRED UNDER THIS LEASE. TO BE KEPT IN
FORCE AND MAINTAINED DURING THE PERIOD SUCH CONSTRUCTION IS IN
PROGRESS..
~ERS' COMPENSATION INSURANCE WORKERS' COMPENSATION
INSURANCE COVERING ALL PERSONS EMPLOYED IN CONNECTION HITH THE WORK
AND WITH RESPECT TO DEATH OR BODILY INJURY CLAIMS WHICH COULD BE
ASSESSED A.GAINST DISTRICT OR THE' LEASED PREMISES.
B. DURING THE TERM OF THIS LEASE, LESSEE SHALL MAINTAIN~ KEEP IN
FORCE, AND PAY ALL PREMIUMS REQUIRED TO MAINTAIN AND KEEP IN FORCE THE
FOLLOWING INSURANCE:
1. PUBLIC' LIABILITY AND PROPERTY DAMA~[ A COMBINED
'~'INGLE LIMIT, COMPREHENSIVE GENERAL LIABILITY POLICY IN THE AMOUNT OF
gE MILLION DOLLARS ($1,000,000), IN ADDITION~ A'FIVE MILLION -
3LLARS($5,000,O00) EXCESS LIABILITY POLICY SHALL BE PROVIDED. THE
PROPERTY DAMAGE INSURANCE SHALL C~VER DAMAGE OR DESTRUCTION OF ANY
PROPERTY, OTHER THAN THAT WHICH IS OWNED', LEASED OR'IN THE CARE,
CUSTODY, OR coNTROL OF LESSEE WITH THE. LIMIT APPLYING TO ANY ONE
ACCIDENT, DISASTER, OR CLAIM.
Z. FIRE AND EXTENDED C~ERAGE ALL IMPROVEMENTS LOCATED
ON OR APPURTENT TO AND INCLUDING THE LEASED PREMISES SHALL BE KEPT
INSURED AGAINST LOSS OR DAMAGE BY' FIRE AND SUCH OTHER RISKS AS ARE NOH
OR HEREAFTER INCLUDED IN EXTENDED COVERAGE ENDORSEMENTS IN COMMON USE
FOR COMMERCIAL STRUCTURES~ INCLUDING VALDALISM AND MALICIOUS'MISCHIEF.
THE AMOUNT OF SUCH INSURANCE SHALL BE SUFFICIENT TO PREVENT EITHER
DISTRICT OR LESSEE FROM BECOMING A CO-INSURER UNDER THE PROVISIONS OF
THE POLICIES, BUT IN NO EVENT SHALL THE AMOUNT BE LESS THAN NINETY'
PERCENT (90%) OF THE THEN ACTUAL REPLACEMENT COST EXCLUDING COSTS OF
REPLACING EXCAVATIONS AND FOUNDATIONS, BUT WITHOUT DEDUCTION OR
DEPRECIATION (HEREIN CALLED "FULL INSURABLE VALUE"). IF THE PARTIES
DO NOT AGREE THAT THE AMOUNT OF INSURANCE COMPLIES WITH THE ABOVE AND
CANMOT RESOLVE SAID DISPUTE, DISTRICT MAY, NOT MORE OFTEN THAN'ONCE
~mn. TWELVE MONTHS, REQUEST THE CARRIER OF THE INSURANCE THEN IN
FORCE TO DETERMINE THE FULL INSURABLE VALUE AS DEFINED IN THIS
OV3SION, AND THE RESULTING DETERMINATION SHALL BE COMCLUSIVE BETWEEN
E PARTIES F'OR THE PURPOSE OF THIS LEASE. DISTRICT SHALL, AT
ESSEE'S SOLE COST AND EXPENSE, COOPERATE FULLY WITH LESSEE TO ~BTAIN
'~hE LARGEST POSSIBLE RECOVERY, AND ALL POLICIES OF FIRE AND EXTENDED
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COVERAGE INSURANCE. REQUIRED BY THIS ARTICLE SHALL PROVIDE THAT'THE
PROCEEDS OF WHICH SHALL BE DEEMED TO BE HELD IN TRUST BY THE RECIPIENT
FOR THE USES AND PURPOSES PRESCRIBED BY THIS LEASE.
A. ' INSURANCE TRUSTEE PRIOR TO THE COMMENCEMENT OF THE
"'ERMS OF THIS LEASE, LESSEE SHALL DESIGNATE THE INSURANCE TRUSTEE,
HiCH DESIGNATION SHALL BE SUBJECT TO APPROVAL BY DISTRICT. THE
..~NSURANCE TRUSTEE MAY BE ANY CALI'FORNIA OR FEDERALLY CHARTERED SAVINGS
AND LOAN ASSOCIATION, A FEDERALLY CHARTERED BANK, OR TRUST COMPANY,
PREFERABLY WITH AN OFFICE OR BRANCH LOCATED WITHIN TWENTY (ZO) MILES
OF THE LEASED PREMISES. OR THE LENDER'HOLDING THE MORTGAGE ON THE-.
i~PROVEMENTS.. IN THE ABSENCE OF A DESIGNATION BY LESSEE OR APPROVAL
BY DISTRICT,"THE TREASURER.OF THE'SAN MATEO COUNTY HARBOR PISTRICT'
SHALL SERVE AS INSURANCE TRUSTEE.
B. POWERS-AND DUTIES OF INSURANCE TRUSTEE· ALL PROCEEDS
PAYABLE PURSUANT TO THE PROVISION OF ANY POLICY~OR POLICIES OF FIRE
INSURANCE OR EXTENDED COVERAGE SHALL BE EXPRESSLY MADE PAYABLE IN CASE
OF LOSS OR DAMAGE *TO~ AND SHALL BE ASSIGNED AND DELIVERED TO, THE
INSURANCE TRUSTEE FOR DISTRICT AND LESSEE FOR THE FOLLOWING PURPOSES
WITH THE FOLLOWING POWERS AND DUTIES, EXCEPT IF THE PROCEEDS DO NOT
EXCEED THE AMOUNT DEFINED IN THIS LEASE AS THE MEASURE OF "MINOR
REPAIRS", SUCH PROCEEDS SHALL BE ADJUSTED.BY AND PAID TO LESSEE AND
SHALL BE ~PPLIED'BY LESSEE FOR REPAIR, RESTORATION~ OR RECONSTRUCTION
OF ANY IMPROVEMENT DAMAGED OR DESTROYED BY THE CASUALTY GI. VING RISE TO
T~E INSURANCE CLAIM:
(1') ALL PROCEEDS RECEIVED'BY THE INSURANCE TRUSTEE
FROM ANY INSURANCE POLICY OR FIRE INSURANCE POLICY OR EXTENDED
,"~OVERAGE POLICY SHALL FIRST BE USED, SUBJECT TO ANY OTHER CONDITIONS
ONTAINED IN THIS LEASE, BY SUCH INSURANCE TRUSTEE AS A FUND FOR THE
.,~STORATION AND REPAIR OF ANY AND ALL BUILDINGS, IMPROVEMENTS~ AND
EQUIFMENT LOCATED ON THE LEASED ~REMISES WHICH HAVE BECOME DESTROYED
OR DAMAGED. SUCH PROCEEDS IN SUCH EVENT SHALL BE USED AND APPLIED'BY
THE INSURANCE TRUSTEE IN SATISFACTION AND DISCHARGE OF THE COST OF THE
RESTORATION OF THE DAMAGED OR DESTROYED BUILDING~ IMPROVEMENTS~' AND
EQUIPMENT. . .
(Z) SUCH PROCEEDS SHALL BE PAID OUT BY THE' INSURANCE
TRUSTEE FROM TIME TO TIME TO PERSONS FURNISHING LABOR OR MATERIALS, OR
BOTH, INCLUDING ARCHITECT'S FEES AND CONTRACTOR'S COMPENSATION IN THE
CONSTRUCTION WORK ON VOUCHERS APPROVED BY A LICENSED ARCHITEC~ OR
ENGINEER EMPLOYED BY LESSEE TO SUPERINTEND THE NORK~ PROVIDED,
HOWEVER, THAT IF SUCH INSURANCE TRUSTEE SHALL, ~N ITS REASONABLE
DiSCR£'~ION, DETERMINE OR CONCLUDE THAT SUCH VOUCHERS ARE BEING
I~PRCPERLY APPROVED BY SUCH ARCHITECT OR ENGINEER, OR IF NO SUCH
ARC~iTECT OR ENGINEER IS APPOINTED, THEN SUCH INSURANCE TRUSTEE SHALL
H~VE THE RIGHT TO APPOINT AN ARCHITECT OR ENGINEER CHOSEN BY THE
INSi~RANCE TRUSTEE TO SUPERVISE THE CONSTRUCTION WORK AND TO MAKE
F'A~KENTS ON VOUCHERS APPROVED BY SUCH LAST-MENTIONED ARCHITECT OR
ENGinEER. THE REASONABLE EXPENSES OR CHARGES OF SUCH ARCHITECT-OR
Efl~I~EER SHALL BE PAID BY SUCH INSURANCE TRUSTEE OUT OF THE TRUST
FUND. . .
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(3) ANY PROCEEDS NOT DISBURSED BY THE.~NSURANCE
TRUSTEE, AS PROVID'ED ABOVE~ AND REMAINING IN'THE HANDS OF THE
INSURANCE, TRUSTEE AFTER THE COMPLETION OF THE. RESTORATION OR THE
REPAIR WORK AND THE PAYMENT AND DISCHARGE OF THE COST THEREOF~ SHALL,
~iTHIN THIRTY (30) DAYS AFTER WRITTEN DEMAND MADE BY LESSEE AND
.~CbMPANIED BY REASONABLE PROOF OF SUCH COMPLETION AND PAYMENT~ BE
iLIVERED BY THE iNSURANCE'TRUSTEE TO LESSEE OR LENDER, WHICHEVER HAS
RST CLAIM TO THE FUNDS.
(4)- IF THE AMOUNT OF THE INSURANCE PROCEEDS IS
INSUFFICIENT TO PAY THE ACTUAL COST OF RECONSTRUCTION, REPAIR, OR
REHABILITATION, SUCH DEFICIENCY WILL BE BORNE AND PROVIDED FOR BY
LESSEE BY DEPOSITING SAME WITH TH~ INSURANCE TRUSTEE WITHIN ONE
HUNDRED TWENTY (-1ZO) DAYS FOLLOWING THE REQUEST BY THE INSURANCE.
TRUSTEE TO LESSEE REQUESTING A SUM EQUAL TO THE AMOUNT OF SUCH
DEFICIENCY.
\ .
(5) LESSEE SHALL, AT ALL TIMES PRIOR TO A LOSS THEREO~
BE ENTITLED TO CAUSE THE SURRENDER OF ANY POLICY OR POLICIES OF FIRE
INSURANCE OR EXTENDED COVERAGE INSURANCE AND TO'RECEIVE THE ALLOWABLE'
REBATE OF UNEARNED PREMIUMS THEREON UPON THE CONDITION HOWEVER, THAT
LESSEE FIRST SHALL SUBSTITUTE A POLICY OR POLICIES IN AN EQUAL OR
GREATER AMOUNT.
(6) ALL ACTUAL COSTS AND CHARGES OF THE INSURANCE
TRUSTEE SHALL BE BORNE AND PAID BY LESSEE.
(l) IF THE INSURANCE TRUSTEE SHALL RESIGN OR FOR ANY
REASON BE UNWILLING TO ACT OR CONTINUE TO ACT, THE LESSEE SHALL
~,t~SIGNATE A SUBSTITUTE INSURANCE TRUSTEE IN THE SAME MANNER AND
IBJECT TO THE SAME CONDITIONS AS PROVIDED FOR DESIGNATION OF THE
:IGINAL INSURANCE TRUSTEE.
3. BUSINESS INTERRUPTION INSURANCE IF AND WHEN
PROCURABLE, BUSINESS INTERRUPTION INSURANCE COVERING LOSS OF INCOME TO
THE EXTENT OF ONE HUNDRED.PERCENT (100%) OF GROSS INCOME FOR A SIX
MONTH PERIOD.
4. pRoDUCTS LIABILITY COVER~ ALL SUBLESSEES, WHERE
APPLICABLE AND APPROPRIATE, SHALL BE. REQUIRED TO PROVIDE PRODUCTS
LIABILITY INSURANCE IN TERMS AND IN AMOUNTS ACCEPTABLE TO THE
DISTRICT.
C. LESSEE MAY PROCURE AND MAINTAIN ANY INSURANCE NOT REQUIRED BY
THIS LEASE, BUT ALL SUCH.INSURANCE SHALL BE SUBJECT TO ALL OTHER
PROVISIONS OF THIS LEASE PERTAINING TO INSURANCE AND SHALL BE FOR THE
MUTUAL BENEFIT OF DISTRICT AND LESSEE.
D. ALL INSURANCE REQUIRED BY EXPRESS PROVISIONS OF THiS LEASE
SHALL BE CARRIED ONLY WITH RESPONSIBLE INSURANCE COMPANIES LICENSED TO
DO BUSINESS IN THE STATE OF cALIFORNiA, ALL SUCH POLICIES SHALL BE
MGM-ASSESSABLE AND SHALL CONTAIN LANGUAGE, TO THE EXTENT O~TAINABLEt
~3 ~HE EFFECT ~HA~:
..ANY LOSS SHALL BE PAYABLE NOTWITHSTANDIN~ ANY ACT OR
NEGLIGENCE OF DISTRICT, ITS OFFICERS, A'GENTS~ AND EMPLOYEES THAT MAY
OTHERWISE, RESULT IN A FORFEITURE'OF THE INSURANCE.
' ' 2. .THE INSURER WAIVES THE RIGHT OF SUBROGATION AGAINST
.a.~STRiCT, ITS OFFICERS., AGENTS AND EMPLOYEES.
3. THE POLICIES ARE PRIMARY AND NON-CONTRIBUTING KITH ANY
'i'~SURANCE THAT'MAY BE CARRIED BY DISTRICT; AND -
4. THE POLICIES CANNOT BE CANCELLED OR MATERIALLY CHANGED
EXCEPT AFTERTHIRTY DAYS(30) PRIOR WRITTEN NbTICE BY. THE INSURERTO
DISTRICT. .
E. PROMPTLY uPON RECEIPT OF THEM, LESSEE SHALL FURNISH DISTRICT
WITH COPIES OF ALL INSURANCE POLICIES. LESSEE SHALL FURNISH DISTRICT
WITH BINDERS REPRESENTING ALL INSURANCE REQUIRED BY THIS LEASE PRIOR
TO THE COMMENCEMENT OF THE..LEASE TERM. ~..
F. IF LESSEE FAILS OR REFUSES TO PROCURE OR TO MAINTAIN
INSURANCE. REQUIRED BY THIS LEASE OR FAILS OR REFUSES TG FURNISH
DISTRICT'WITH REQUIRED PROOF THAT THE INSURANCE HAS BEEN PROCURED AND
IS IN FULL FORCE AND'EFFECT AND PAID FOR, DISTRICT SHALL HAVE THE
RIGHT, BU[.NOT THE OBLIGATION, UPON FIVE (5) DAYS' WRITTEN NOTICE TO
LESSEE, TO PROCURE AND MAINTAIN SUCH INSURANCE. THE PREMIUMS PAID BY
DISTrICT-SHALL BEAR INTEREST AT THE LEGAL RATE THEN IN EFFECT IN THE
STATE OF CALIFORNIA FROM THE DATE WHEN THE PREMIUM IS PAID BY
DISTRICT. DISTRICT MAY REIMBURSE ITSELF FOR THE COST OF SAID
INSURANCE FROM LESSEE'S SECURITY DEPOSIT.
AR,''
G. DISTRICT MAY,.AT ANY TIME, BUT NOT MORE OFTEN THAN ONCE A
REQUIRE LESSEE TO INCREASE THE MINIMUM DOLLAR AMOUNTS FOR
SURANCE REQUIRED BY THIS LEASE,.BUT EVERY SUCH INCREASE SHALL BE
REASONABLE UNDER THE CIRCUMSTANCES.
ARTICLE IX - POSSESSORY INTERE~!_!6~x_!~[~;~SSESSMENTS AND FE~
A. PURSUANT TO CALIFORNIA REVENUE AND TAXATION CODE SECTION
107.6, LESSEE IS HEREBY ADVISED THAT THIS LEASE C~EATES A POSSESSORY
INTEREST' SUBJECT TO PROPERTY TAXATION AND~ AS THE PARTY IN WHOM THE'
POSSESSORY INTEREST IS VESTED, LESSEE WILL BE SUBJECT TO PAYMENT OF
THE TAXES LEVIED ON SAID INTEREST.
B. LESSEE SHALL PAY PROMPTLY ALL TAXES AND ASSESSMENTS OF ANY
KIND I~HATSOEVER ASSESSED OR LEVIED FOR OR UPON THE LEASED PREMISES,
INCLUDING TAXES AND ASSESSMENTS ASSESSED OR LEVIED UPON ANY MACHINES,
APPLIANCES, PROPERTY, INTEREST, POSSESSORY INTEREST, OR IMPROVEMENT OF
ANY KIND ERECTED, INSTALLED, MAINTAINED UPON, OR USED IN CONNECTION
WITH THE LEASED PREMISES,' LESSEE SHALL ALSO PAY PRONPTLY ANY TAXES
LE¢IE~ UPON THE BUSINESS OR OTHER ACTIVITIES OF LESSEE OR ITS
SUBTENANTS, UPON OR IN CONNECTION WITH THE LEASE PREMISES.
FURTHERMORE~ LESSEE SHALL PAY ANY FEES IMPOSED BY LA~ FOR'ANY LICENSES
OR PERMITS FOR ANY BUSINESS OR ACTIVITY OF LESSEE OR SUBTENANTS UPON
_J. HE LEASED PREMISES. [
C. THEiPAYME~T OF ANY SUCH TAXES,. FEES, OR-CHARGES SHALL NOT
CONSTITUTE CAUSE FOR MODIFICATION OF RENT PAYABLE BY LESSEE.
~. IF THE IMPOSITION OF ANY TAX, FEE, CHARGE, DUTY, OR
ASSESSMENT SHALL BE DEEMED BY LESSEE TO BE IMPROPER~ ILLEGAL, OR
'"'CESSIVE, LESSEE-MAY, AT ITS SOLE COST AND EXPENSE, 'DISPUTE AND
NTEST THE SAME IN ANY MANNER PROVIDED DY LAW, PROVIDED, HOWEVER, ANY
..... CH TAXES, FEES, CHARGES, DUTIES, OR ASSESSMENTS SHALL HA~E FIRST
BEEN PAID..
ARTICLE X - OPERATIONS
A;- RENTS AND SERVICES. LESSEE SHALL BUILD AND OFFER FOR
RENTAL TO SUBTENANTS, THE LEASED PREMISES, LESSEE SHALL BO.ILD. AND
MANAGE THE PREMISES, AND PROVIDE FOR EXTERIOR MAINTENANCE AND UPKEEP~
TO ALLOW SUBTENANTS TO PROVIDE SERVICES AND AMENITIES OF COMPARABLE
QUALITY TO THOSE PREVAILING IN OTHER MARINA FACILITIES IN NORTHERN
CALIFORNIA, AND SHALL ARRANGE TO PROVIDE ADEQUATE SECURITY MEASURES TO
REASONABLY PROTECT PERSONS AND PROPERTY ON THE LEASED PREMISES.
LESSEE IS NOT REQUIRED TO DIRECTLY PROVIDE THE SERVICES AND AMENITIES~
BUT SHALL DO SO THROUGH SUBTENANTS.
THE ULTIM~TE PURPOSE OF THIS LEASE FOR THE BENEFIT OF THE PUBLIC IS
THE COMPLETE AND CONTINUOUS USE OF THE LEASE FACILITIES. ALL
FACILITIES AND SERVICES SHALL BE MADE AVAILABLE TO THE PUBLIC WITHOUT'
DISCRIMINATION AS TO RACE, RELIGION, COLOR, CREED, NATIONAL ORIGIN,
ANCESTRY, SEX OR SEXUAL PREFERENCE.
THE IMMEDIATE PURPOSE OF THIS LEASE IS THE DEVELOPMENT OF THE PREMISES
'"~D THE REALIZATION OF THE GREATEST POSSIBLE REVENUE THEREFROM BY
iSSEE AND DISTRICT.
IT IS AGREED :THAT THE ULTIMA~E AND IMMEDIATE PURPOSES ARE
CONSISTENT AND COMPATIBLE. ACCORDINGLY, LESSEE COVENANTS AND AGREES
TO OPERATE SAID PREMISES FULLY AND CONTINUOUSLY TO ACCOMPLISH SAID
PURPOSES.
COOPERATION AMONG LESSEES
1. LESSEE SHALL COOPERATE WITH ALL OTHER LESSEES'OF THE
DISTRICt WHO WILL'BE OPERATING ENTERPRISES IN THE VICINITY OF THE
LEASED PREMISES, AND SHALL CONDUCT ITS OPERATIONS SO AS TO AVOID
INTERFERENCE WITH THE OPERATIONS OF OTHER LESSEES.. ANY DIFFERENCE OR
CONFLICT WHICH MAY ARISE BETWEEN LESSEE AND OTHER.LESSEES WILL BE
ADJUSTED BY DISTRICT. IF THE OPERATIONS OF LESSEE ARE IMPAIRED
BECAUSE OF ANY ACTS OR OMISSIONS OF SUCH OTHER LESSEES, LESSEE SHALL
HAVE NO CLAIM AGAINST DISTRICT ON THAT ACCOUNT.
ENVIRONMENT PROTECTIOn.
LESSEE SHALL TAKE ALL REASONABLE MEASURES TO:
1. AVOID ANY POLLUTION OF THE ATMOSPHERE, LAND OR
WATER OR LI]'TERING'ioF LAND OR WATER CAUSED BY OR ORIGINATIN~ IN,. ON OR
ABOUT LESSEE'~ FACILITIES. .. "
Z. KEEP THE NOISE LEVEL ON THE LEASED PREMISES TO A
MIN~MOM SO THAT PERSONS IN THE GENERAL NEIGHBORHOOD ·NILE BE ABLE TO
"'":~FORTABLY ENJOY OTHER FACILITIES LEASED BY LESSOR IN THE VICINITY OF
{E LEASED PREMISES.
3. KEEP THE LIGHTS ON THE LEASED ~REMiSES 'FROM
ADVERSELY AFFECTING THE OPERATION OF BOATS 'IN THE AREA.
4- PREVENT ALL PObLUTANTS, INCLUDING PETROLEUM
PRODUC~S OF ANY NATURE~ FROM BEIN~ DISCHARGED INTO THE HARBOR WATERS.
D. SUPERVISION BY LESSEE
LESSEE'S MANAGEMENT SHALL BE PERSONALLY EXPERIENCED AND SKILLED
IN THE MANAGEMENT OF COMNERCIAL REAL ESTATE PROPERTIES.
.LESSEE SHALL REQUIRE THAT SUBTENANTS PRESENT EVIDENCE OF THEIR
EXPERIENCE AND SKILL IN MANAGING THE OPERATIONS CONTEMPLATED BY THEIR
SUBLEASES. ANY SUBTENANT SHALL KEEP EMPLOYED AT ALL TIMES, THE
APPROPRIATE SUPERVISOR AND ANY NECESSARY ASSISTANTS, AND SHALL PROVIDE
THAT THEIR'SUPERVISOR REPRESENT THE SUBTENANT IN ITS ABSENCE FOR THE
OPERATION .OF THEIR BUSINESS, AND ALL DIRECTIONS GIVEN THE 'SUPERVISOR
SHALL BE AS BINDING AS IF GIVEN TO THE SUBTENANT.
IN GENERAL, THE DISTRICT SHALL GIVE ALL DIRECTIONS TO THE LESSEE'
IN REGARD TO SUBTENANTS, EXCEPT IN CASE OF EMERGENCY WHEN DIRECTIONS
.r-~tALL BE GIVEN DIRECTLY TO THE APPROPRIATE PARTY.
E. VIOLATION OF THIS ARTICLE
A VIOLATION OF THIS. ARTICLE SHALL CONSTITUTE A BREACH OF THIS
LEASE AND DISTRICT SHALL HAVE ALL RIGHTS AND REMEDIES PROVIDED BY LAW
EXCEPT THAT SUCH A BREACH SHALL NOT BE GROUNDS FOB TERMINATION OR
CANCELLATION OF THIS .LEASE.
ARTICLE XI - ~gUIDATED DAMAGES
A. VIOLATION AND AMOUNT. NOTWITHSTANDING ANY OTHER LEASE
TERM, AND IN ADDITION TO ALL OTHER REMEDIES AVAILABLE TO DISTRICT FOR
VIOLATIONS OR BREACHES OF THIS LEASE, DISTRICT SHALL HAVE THE RIGHT TO
DEMAND AND LESSEE AGREES TO PAY LIQUIDATED DAMAGES IN THE SUM OF
ONE-ONE HUNDREDTH (1/100) OF THE SECURITY DEPOSIT REQUIRED BY THIS
LEASE FROM THE DAY A WRITTEN DEMAND IS DELIVERED TO LESSEE AND FOR
EACH DAY A VIOLATION EXISTS OF ANY OF THE FOLLONING PROVISIONS:
LEASE PROVISIONS
ARTICLE IV
ARTICLE V
ARTICLE VI
USES AND SERVICES
OPERATING SCHEDULE AND CONTROLLED PRICES
IMPROVEMENTS AND INVESTMENTS '
-i5-
GENERAL CONDITIONS
ARTICLE IV
ARTICLE X
ARTICLE'XV
CONSTRUCTION
OPERATIONS
FINANCIAL REPORTS AND RECORDS
'~'dCH DAMAGES ARE AND MILL CONTINUE TO BE IMPRACTIBLE AND EXTREMELY
DIFFICULT TO DETERMINE. EXECUTION OF THIS LEASE SHALL CONSTITUTE
AGREEMENT BY 'LESSEE AND DISTRICT THAT ACTUAL DAMAGES FOR BREACH'OF ANY
OF SAID P.ROVISIONS'ARE AND MILL CON~!'NUE TO BE. IMPRACTIBLE AND
'EXTREMELY DIFFICULT TO DETERMINE A~D THAT ONE-ONE HUNDREDTHS (I/lOO)
OF'THE"SECURITY DEPOSIT REQUIRED ~Y THIS LEASE PER DAY IS THE MINIMUM
VALUE OF THE COST AND ACTUAL DAMAGE CAUSED BY ANY VIOLATIONS NAMED IN
THIS ARTICLE.
LIQUIDATED DAMAGES SHALL NOT BE ASSESSED I.F THE LESSEE STARTS AND
DILIGENTLY PURSUES A REMEDY WITHIN A'REASONABLE TIME FROM ACTUAL
RECEIPT OF SUCH WRITTEN NOTICE, AND IN THAT CASE WILL NOT THEN BE-
CONSIDERED TO BE IN DEFAULT PROVIDED THAT THE VIOLATION DOES NO~
CONSTITUTE A MATERIAL AND SIGNIFICANT BREACH OF THE LEASE SUCH THAT
COSTS ARE .BEING INCURRED BY DISTRICT AND/OR THE PUBLIC HEALTH AND
SAFETY ARE INVOLVED. THIS LIMITATION ON LIQUIDATED DAMAGES SHALL
EXTEND FoR A MAXIMUM OF THIRTY (30) DAYS FROM DELIVERY OF-THE NOTICE
OF VIOLATION. SUCH DAMAGEs SHALL NOT. BE PAYABLE'FOR ANY PERIOD PRIOR
TO WRITTEN NOTICE TO LESSEE FROM GENERAL MANAGER THAT A VIOLATION
EXISTS, AND FURTHER, SUCH DAMAGES SHALL B~ WAIVED UNLESS THE BOARD OF
HARBOR COMMISSIONERS DETERMINES THAT A VIOLATION EXISTS
B. DECL'ARATORY RELIEF. LESSEE SHALL HAVE THE RIGHT TO HAVE
ANY COURT OF COMPETENT JURISDICTION DETERHINE WHETHER THERE HAS BEEN
VIOLATION OF THIS ARTICLE; PROVIDED, HOWEVER, THAT ONCE A VIOLATION
HAS BEEN DETERMINED TO HAVE OCCURRED, THE AGREED LIQUIDATED DAMAGES
SHALL BE ONE-ONE'HUNDREDTH (1/100) OF THE SECURITY DEPOSIT REQUIRED BY
THIS LEASE FOR'EACH DAY THE VIOLATION EXISTED AFTER WRITTEN NOTICE TO
LESSEE FROM GENERAL MANAGER THAT A VIOLATION EXIS¥S.
ARTICLE XII ~ PROTECTION OF LEASED PREMI~
LESSEE SHALL M~INTAIN 'AN ADEQUATE LIGHTING AND TAKE OTHER SECURITY
HEASURES AS REQUIRED BY THE DISTRICT OR THE CITY OF SOUTH SAN
FRANCISCO, ABOUT THE .LEASED PREMISES IN SUCH A MANNER AS TO MAXIMIZE
THE PROTECTION OF THE DISTRICT'S PROPERTy AND TO PROTECT ALL
INDIVIDUALS, FROM DAMAGE, INJURY, LOSS OR LIABILITY ARISING FRoM USE
OF THE PREMISES BY THE LESSEE, ITS PATRONS OR CLIENTS, OR.ANY'OTHER
iNDIVIDUAL..
ARTICLE X'II! - COMPLIANCE WITH LAWS AND REGULATIONS
A. LESSEE SHALL AT ALL TIMES OBSERVE AND COMPLY WITH, AND SHALL
.USE ALL ITS EMPLOYEES TO OBSERVE 'AND COMPLY WITH ALL APPLICABLE
~S, ORDINANCES, REGULATIONS, ORDERS,~ AND DECREES OF ~LL PUBLIC
-16-
AUTHORITIES HAVING JURISDICTION OVER OPERATIONS UNDER THIS LEASE,
WHETHER NOT IN FORCE OR WHICH MA)' HEREAFTER BE IN FORGE.
B.~. ~IF THE' IMPOSITION OF ANY'LAN, ORDER, ORDINANCE, REGULATION OR
DIRECTION SHALL BE DEEMED BY LESSEE TO BE IMPROPER, ILLEGAL,
EXCESSIVE, OR UNREASONABLE, IT MAY AT ITS SOLE COST AND'EXPENSE,
:SPUTE AND CONTEST THE SAME IN ANY MANNER PROVIDED'BY LAW.
-,,.(TICLE XIV - _HOLD HARMLESS
A. LESSEE· SHALL DEFEND ALL SUITS BROUGHT AGAINS.T' DISTRICT, 'ITS
OFFICERS, AGENTS, OR EMPLOYEES, OR NAMING DISTRICT, ITS OFFICERS,
AGENTS-, 'OR EMPLOYEES AS A DEFENDANT WHEREIN IT IS ALLEGED THAT
OPERATIONS BY LESSEE OR CONDITIONS ON THE LEASED PREMISES CREATE A
LIABILITY OF DISTRICT, ITS OFFICERS, AGENTS, OR EMPLOYEES, 'AND LESSEE
SHALL PAY ANY AND ALL JUDGMENTS AGAINST AND SAVE AND HOLD DISTRICT,
ITS OFFICERS~ AGENTS, AN~ EMPLOYEES HARMLESS FROM ANY LIABILITY', COST,
EXPENSE, OR LOSS ON ACCOUNT THEREOF, EXCEPT THAT JUDGMENTS SOLELY
BASED ON 'ACTS OR OMISSIONS OF DISTRICT, ITS OFFICERS, AGENTS, OR
EMPLOYEES NEED NOT BE PAID BY LESSEE AND.FURTHER EXCEPT THAT LESSEE
NEED NOT HOLD DISTRICT, ITS OFFICERS, AGENTS, OR EMPLOYEES HARMLESS
THEREFROM.
B. ~ISTRICT. SHALL GIVE WRITTEN NOTICE TO LESSEE WITHIN TEN (10)
DAYS AFTER ANy SUIT SHALL HAVE BEEN SERVED ON DISTRICT WHEREIN IT IS
ALLEGED THAT OPERATIONS BY THE LESSEE OR CONDITIONS ON THE LEASED
PREMISES CREATE A LIABILITY OF THE DISTRICT~ DISTRICT SHALL GIVE
~RITTEN NOTICE TO LESSEE WITHIN THIRTY 'C$0) DAYS AFTER THE FILING OF
ANY WRITTEN CLAIM AGAINST DISTRICT WHEREIN IT IS ALLEGED THAT
OPERATIONS BY THE LESSEE OR CONDITIONS ON THE LEASED PREMISES CREATE A
~'""iABILITY OF THE DISTRICT. IF SUCH NOTICE SHALL NOT BE GIVEN WITHIN
lID PERIODS, DISTRICT SHALL INDEMNIFY LESSEE AND HOLD IT HARMLESS
-...~OM ANY DAMAGES OR LOSS LESSEE MAY SUFFER AS A RESULT OF DISTRICT'S
FAILURE TO GIVE SUCH NOTICE. such NOTICE, .HOWEVER, SHALL NOT BE
REQUIRED IN THOSE INSTANCES ~HERE LESSEE SHALL ALSO HAVE OTHERWISE
RECEIVED NOTICE OF SUCH CLAIM OR SUIT.
C. THE TERM "DISTRICT" INCLUDES THE CITY OF'.SO. SAN FRANCISCO.
ARTICLE XV - FINANCIAL REPORTS AND RECOR~ .
TO INSURE COMPLETE AND TIMELY RECEIPT OF.RENTS (MINIMUM AND
PERCENTAGE, UNADJUSTED AND ADJUSTED) BY DISTRICT FROM LESSEE DURING
THE TERM OF THIS LEASE, LESSEE SHALL INSTALL AN~ MAINTAIN A SEPARATGE
SYSTEM OF ACCOUNTS AND RECORDS FOR THE BUSINESS CONDUCTED AT, ON AND
FROM THE LEASED PREMISES, AND SHALL KEEP TRUE, ACCURATE AND COMPLETE
ACCOUNTS AND RECORDS, AND SHALL REQUIRE ITS SUBLESSEES,
CONCESSIONAIRES, AND LICENSEES, IF ANY, TO DO 'THE SAME.
A. ~USINESS'RECORDS. LESSEE SHALL INSTALL AND MAINTAIN A
SYSTE~ OF ACCOUNTS AND RECORDS WHICH, IN THE OPINION OF THE DISTRICT,
CONFORMS TO GOOD ACCOUNTING PRACTICE. THE SYSTEM OF ACCOUNTS AND
RECORDS SHALL ~E SUbmITTED TO DISTRICT FOR REVIEW AND APPROVAL PRIOR
TO COMPLETION OF ANY PHASE OF CONSTRUCTION. NO CHANGE~SHALL BE MADE
r'-,~ THE SYSTEC'OF ACCOUNTS AND RECORDS THEREAFTER BY LESSEE UNLESS SUCH
~ANGE HAS BEEN FIRST APPROVED IN WRITING BY DISTRICT; SUCH APPROVALS
~ DISTRICT SHALL NOT BE UNREASONABLY WITHHELD. ANY DISPUTE SHALL BE
-17-
PROCESSED IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN ARTICLE XIX
CLAIMS AND PRO.TEST,
1. SOURCE DOCUME~. THE BUSINESS'RECORDS MUST BE
SUPPORTED BY SOURCE DOCUMENTS SUCH AS SALES SLIPS, UNBILLED ACCOUNTING
DOCUMENTS, LEDGERS, BANK DEPOSIT RECEIPTS, SALES TAX RETURNS, CASH
'
~GISTER IAPES, SALES BOOKS, BANK BOOKS., PURCHASE INVOICES, AND OTHER
~CORDS AND DOCUMENTS REASONABLY NECESSARY TO VERIFY THE GROSS
~,~ZCEIPTS REPORTED BY LESSEE. ALL RETAIL SALES AND CHARGES. SHALL BE
PROPERLY DOCUMENTED AND RECORDED PROMPTLY BY MEANS OF CASH REGISTERS
OR'OTHER COHPARABLE DEVICES WHICH .DISPLAY TO ~HE CUSTOMER THE AMOUNT
OF THE'TRANSACTION AND AUTOMATICALLY ISSUE A RECEIPT. THE REGISTERS
SHALL BE E~UIPPED WITH DEVICES WHI°CH LOCK IN SALES TOTALS AND OTHER
TRANSACTION RECORDS, OR WITH COUNTERS WHICH ARE NOT RE-GETTABLE AND
· °~HICH RECORD TRANSACTION NUMBERS AND SALES DETAILS. FOR TRANSACTIONS
NOT RECORDED BY MEANS OF CASH REGISTERS OR OTHER COMPARABLE DEVICES~-
LESSEE SHALL. ISSUE SERIALLY NUMBERED TICKETS OR, INVOICES FOR EACH SUCH
.TRANSACTI.ON AND SHALL KEEP ADEQUATE RECORDS OF SUCH TICKETS OR
INVOICES BOTH ISSUED AND UNISSUED.
~. LOCATION OF RECORDS. ALL RECORDS REqUiRED BY THIS
LEASE SHALL BE KEPT AND MAINTAINED. WITHIN SEVENTY-FIVE (?~) MILES OF
SAN MATEO,. SAN MATEO COUNTY, CALIFORNIA, AND ALL SUCH RECORDS'SHALL BE
SO KEPT AND MAINTAINED FOR NOT LESS THAN FIVE (5) YEARS AFTER DELIVERY
OF'THE REqUiRED ANNUAL REPORTS FOR SUCH YEAR UNLESS THE WRITTEN
APPROVAL OF THE DISTRICT BE FIRST OBTAINED; PROVIDED~ HOWEVER~ THAT'
LESSEE MAY AT REASONABLE TIMES REMOVE ANY OR ALL RECORDS OR PERMIT OR
CAUSE THEM TO BE REMOVED FOR LEGAL OR ACCOUNTING PURPOSES OR FOR OTHER
PURPOSES PROMOTIVE OF AND CONSISTENT WITH THESE PROVISIONS ~ THIS
LEASE.
3. DISTRICT'S ACCESS TO RECORDS. DISTRICT SHALL HAVE THE
-~.~GHT, AT ANY REASONABLE. TIME, AND FROM TIME TO TIME,' AFTER GIVING
REASONABLE NOTICE, TO DO ANY OR ALL. OF THE FOLLOWING:
TO AUDIT SAID RECORDS;
b.
TO CAUSE AN AUDIT OF SAID RECORDS TO BE MADEI
C. TO MAKE ABSTRACTS FROM SAID RECORDS;
d. 'TO MAKE COPIES OF ANY. OR ALL OF SAID RECORDS;
e. TO EXAMINE ANY OR ALL SUBLEASES~ LICENSES, 'AND
CONCESSION AGREEMENTS;
t. TO MAKE COPIES OF ANY OR ALL SUBLEASES, LICENSES,
CCNCESSION AGREEMENTS, AND OTHER APPROPRIATE DOCUMENTS;
I~CCRPORATION, BYLAWS, PARTNERSHIP AGREEMENT, LIST OF SHAREHOLDERS~
AND ANY OTHER DOCUMENT PERTINENT TO DETERMINING THE FORM OF AND
O~NERSHIP IN LESSEE AND ANY AMENDMENTS TO ANY OF SUCH DOCUMENTS~
TO EXAMINE AND MAKE COPIES OF LESSEE'S ARTICLES OF
-18-
'h. ·TO'EXAMINE AND MAKE .coPIES OF SALES TAX REPORTS,
AND ANY'PORTION OR.ALL OF ANY INCOME TAX RETURNS APPLICABLE TO
LESSEE'~ ~USINESS/ES UNDER THIS LEASE..LESSEE KNOWINGLY AND
SPECIFICALLY W~IVES ANY AND ALL RIGHTS OR PRIVILEGES REGARDING SAID
INC~H~ TAX RETURNS THAT MIGHT. OTHERWISE PREVENT THiER PRODUCTION AND
INSPECTION (OR COYPING) BY DISTRICT.
iSSEE SHALL MAKE ALL RECORDS SPECIFI. ED IN THE NOIICE AVAILABLE AT THE
.... ME SPECIFIED, IF REASONAB'LE, AND AT THE PLACE WHERE THE RECORDS ARE
TO BE KEPT; PROVIDED, HOWEVER, THAT DISTRICT NAY HAVE SAID RECORDS
COPIED BY AN INDEPENDANT COPY SERVICE AT DISTRICT'S EXPENSE, TO REVIEW
IN ANOTHER .LOCATION. ..
· i. THESE PROVISIONS, AS TO DISTRICT AC~SS TO RECORDS
SHALL BE REPEATED IN EACH AND EVERY.SUBLEASE OF THESE PREMISES.TO
PROVIDE DISTRICT THESE SAME POWERS AND RIGHTS WITH RESPECT TO EACH
SUBTENANT..
B. STATEMENTS. WITHIN THIRTY (30) DAYS AFTER THE C~OSE OF '
EACH CALENDAR QUARTER (MARCH 31, JUNE 30, SEPTEMBER 30, AND DECEMBER
31), LESSEE SHALL SUBMIT:TO DISTRICT A QUARTERLY REPORT WHICH SHALL
INCLUDE A STATEMENT OF EARNINGS AND GROSS RECEIPTS DURING THAT
QUARTER. EACH QUARTERLY STATEMENT SHALL BE ON A FORM SUPPLIED BY THE
DISTRICT AND SHALL BE VERIFIED AND SIGNED BY A RESPOINSIBLE OFFICER OF
LESSEE, ON BEHALF OF LESSEE. WITHIN NINETY ('90) DAYS AFTER THE
COMMENCEMENT OF THIS LEASE, LESSEE SHALL BY WRITTEN NOTICE ADVISE
DISTRICT OF THE CLOSING'DATE OF LESSEE'S F3SCAL YEAR AND SHALL BY
WRITTEN NOTICE ADVISE DISTRICT OF ANY CHANGE IN SUCH CLOSING DATE...
WITHIN NINETY (90) DAYS AFTER THE'CLOSE OF THE FISCAL YEAR,-LESSEE
F'~,ALL FURNISH DISTRICT AN ANNUAL FINANCIAL STATEMENT OF THE LESSEE,
{EPARED IN A MANNER APPROVED BY THE DISTRICT, VERIFIED AND SIGNED BY
L..RESPONSIBLE OFFICER OF LESSEE, ON BEHALF OF LESSEE. IN ALL
FINANCIAL STATEMENTS,'THE TOTAL GROSS RECEIPTS FOR THE ACCOUNTING YEAR
SHALL BE CLASSIFIED ACCORDING TO THE CATEGORIES OF BUSINESS
ESTABLISHED FOR PERCENTAGE RENTS AS SET FORTH IN THIS LEASE AND SHALL
BE PREPARED IN'ACCORDANCE WITH Good ACCOUNTING PRACTICES AND
PRINCIPALS. ·
C. UNDERSTATEMENT OF GROSS RECEIPTS. IF THE EXAMINATION AND
AUDIT OF. THE RECORDS OF LESSEE BY DISTRICT DISCLOSES THAT THE GROSS
RECEIPTS WERE UNDERSTATED BY MORE THAN FIVE PERCENT (SZ) FOR THE.
PERIOD COVERED BY SUCH AUDIT, THE FULL COST OF THE AUDIT, AS
DETERMINED BY THE DISTRICT AUDITOR, SHALL BE PA~D BY LESSEE WITHIN
3HiRTY (30) DAYS AFTER .WRITTEN DEMAND AND LESSEE SHALL IMMEDIATELY PAY
THE ADDITIONAL PERCENTAGE RENT DUE, IF ANY~ PLUS INTEREST AT THE THEN
LEGAL RATE IN THE STATE OF CALIFORNIA FROM THE DATE WHEN SUCH "
PERCENTAGE RENT WAS DUE. OTHERWISE, DISTRICT SHAL BEAR THE COST OF
SUCH AUDIT. SUCH PAYMENTS BY LESSEE SHALL BE WITHOUT PREJUDICE TO THE
RIGHT OF LESSEE TO RECOVER BACK THE AMOUNTS OF SUCH PAYMENTS TO THE
EXTENT THAT THE SAME ARE UNWARRANTED AND WERE NOT DUE FROM LESSEE TO
DISTRICT; PROVIDED, HOWEVER~ THAT ANY ACTION OR PROCEEDING THEREFORE
SHALL BE COMMENCED .BY LESSEE ~ITHIN SIXTY (60) DAYS AFTER SUCH PAYMENT
UNLESS ANY DISPUTE HAS BEEN PROCESSED IN ACCORDANCE WI?H THE
-19-
PROCEDURES SET FORTH IN ARTICLE XIX - CLAIMS. AND PROTEST, AND IN SUCH
EVENT, SUCH SI~TY i60) DAY PERIOD SHALL COMMENCE AFTER THE DECISION OF
THE BOARD. OF HARBOR COMMISSIONERS IS F~NAL.
., D. CONFIDENTIAL INFORMATION. ALL INFORMATION OBTAINED BY
'tm.i STRICT, ITS OFFICERS, AGENTS, AND EMPLOYEES, REQUIRED TO BE PROVIDED
~ LESSEE BY THIS ARTICLE, SHALL BE TREATED AS CONFIDENTIAL EXCEPT IN
~Y LITIGATION OR ARBITRATION PROCEEDINGS BETWEEN DISTRICT., LESSEE
"SOBTENTANT, OR ENCUMBRANCE HOLDER AND EXCEPT ALSO THAT DISTRICT MAY
DIVULGE SUCH INFORMATION TO A GOVERNMENTAL AGENCY, OR TO ENCUMBRANCE
HOLDER OR ITS REPRESENTATIVE, ON DEMAND.
ARTICLE XVI - ASSIGNMENI~_S_U_~L_EI.TI:'NG AND HYPOTHECAT_ION_
A. LESSEE SHALL NOT SUFFER ANY PERSON TO OCCUPY OR USE THE
LEASED PREMISES OR ANY PORTION THEREOF EXCEPT.IN THE NORMAL COURSE OF
BUSINESS FOR THE USES EXPRESSLY PERMITTED HEREUNDER WITHOUT THE PRIOR
WRITTEN APPROVAL OF DISTRICT. LESSEE SHALL NOT ASSIGN OR HYPOTHECATE
THIS LEASE OR ANY INTEREST THEREIN OR SUBLET THE LEASED PREMISES OR
ANY PART THEREOF OR ANY RIGHT OR PRIVILEGE'APPURTENANT THERETO WITHOUT
THE PRIOR WRITTEN APPROVAL OF DISTRICT, WHICH SHALL NOT BE
UNREASONABLY ~ITHHELD.
'l. CONDITIONS FOR SUBLEASING. EACH SUBLEASE SHALL
PROVIDE THAT, IF LESSEE DEFAULTS OR BREACHES THIS LEASE, AND IF THE
SUBLESSEE IS NOTIFIED OF LESSEE'S DEFAULT OR BREACH AND IF SO
INSTRUCTED BY DISTRICT, SUBLESSEE SHALL MAKE RENTAL PAYMENTS TO
DISTRICT OR ENCUMBRANCE HOLDER. LESSEE'SHALL NOT ACCEPT, DIRECTLY OR
INDIRECTLY, MORE THAN TWELVE (1Z) MONTHS PREPAID RENT FROM ANY
~-iJBLESSEE. SUBRENTS SHALL BE FIXED AT THE FAIR RENTAL VALUE'fLOR THE
· BE MADE EXPRESSLY SUBJECT TO THIS LEASE AND
t {EMISES SUBLEASES SHALL
L.~ALL PERMIT THE SUBLESSEE TO PERFORM ANY ACT REQUIRED OF LESSEE UNDER
THIS LEASE. SUBLEASES SHALL EXPRESSLY REQUIRE THE SUBLESSEE TO COMPLY
~ITH THE TERMS, COVENANTS, AND CONDITIONS OF THIS LEASE ON THE
SUBLEASED PREMISES, EXCEPT THAT ALL PERCENTAGE RENTS AND SUBRENTS
SHALL BE PAID TO LESSEE, AND EACH SUBLEASE SHALL ALSO INCLUDE SUCH
OTHER TERMS, COVENANTS AND CONDITIONS GENERALLY'CONSISTENT WITH
PROVISIONS OF OTHER LEASES OF. THE DI. STRICT FOR SIMILAR USES. LESSEE
SHALL, PROMPTLY AFTER EXECUTION OF EACH SUBLEASE, NOTIFY DISTRICT OF
THE NAME AND MAILING ADDRESS OF THE SUBLESSEE AND SHALL, PROMPTLY
AFTER DEMAND, AT DISTRICT'S ELECTION, EITHER PROVIDE DISTRICT WITH A
COPY OF THE SUBLEASE OR PERMIT DISTRICT TO EXAMINE'AND COPY THE
SUBLEASE.
Z. THE VOLUNTARY OR OTHER SURRENDER ~F'THIS LEASE BY
LESSEE, OR MUTUAL CANCELLATION THEREOF, SHALL NOT WORK A MERGER, AND
SH~LL, AT THE OPTION OF DISTRICT, TERMINATE ALL OR ANY EXISTING
SU2LEASES OR MAY, AT THE OPTION OF DISTRICT, OPERATE AS AN ASSIGNMENT
]0 DISTRICT OF ANY OR ALL SUCH SUBLEASES.
3. FOR ASSIGNMENT.OF LEASEHOLd. ANY
ASSIGNMENT 0R SUBLEASE TO AN INTERMEDIARY FCR THE PURPOSE OF FURTHER
SUBLETTING TO SUBTENANT OPERATORS, OR' TAKING OVER LES~EE'S FUNCTIONS
,-~E.'; I~ANAGER OF ALL OR SUBSTANTIALLY ALL OF THE LEASED PMEMISES SHALL BE
EE~ED AN ASSIGNMENT OF THE LEASEHOLD. LESSEE SHALL FILE A REQUEST TO
SHALL BE ATTACHED A COMPLETED PROPOSER'S
~EiGN
LEASEHOLD
TO
WHICH
QUESTIONNAIRE PREPARED ~Y THE PROSPECTIVE ASSIGNEE. CONCURRENTLY WITH
-ZO-
FILING THE REQUES% TO ASSIGN LEASEHOLD,' LESSgE SHALL ~AY IN CASH OR
CERTIFIED cASHIER'S CHECK THE SUM OF FIVE HUNDRED DOLLARS ($500.00) TO
ENABLE.DISTRICT 70 ADEQUATELY INVESTIGATE THE' PROPOSED ASSIGNEE'S
QUALIFICATIONS AS A PERMITTED ASSIGNEE. IF THE PROPOSED ASSIGNEE~S
NET..WOR~H ON THE DATE OF ASSIGNMENT IS NOT EQUAL. TO OR GREATER THAN
Ior-~SEE'S NET NORTH'AT'THE COMMENCEMENT OF THIS LEASE, DISTRICT MAY
R UiRE LESSEE TO GUARANTEE SUCH ASSIGNEE'S OBLIGATIONS HEREUNDER FOR
S H PERIOD AS DISTRICT DEEMS ADVISABLE. NET WORTH SHALL MEAN THE
A~UNT BY WHICH THE TOTAL OF ALL ASSETS SHALL EXCEED THE ~OTAL OF ALL
LIABILITIES AS DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES-AS APPROVED BY THE DISTRICT AUDITOR. DISTRICT
SHALL APPROVE OR DISAPPROVE ANY REqUESTS'TO ASSIGN LEASEHOLD WITHIN
THIRTY. (30) DAYS-OF RECEIPT OF SUCH REQUEST. IF DISTRICT DOES NOT ''
APPROVE OR DISAPPROVE THE REQUEST WITHIN SAID THIRTY (30) DAYS~ AND
LESSEE HAS NOTIFIED DISTRICT.BY REGISTERED MAIL THAT THE REQUEST TO
ASSIGN LEASEHOLD HAS BEEN DULY MADE AND THE SUM FOR INVESTIGATION OF
THE PROSPECTIVE ASSIGNEE HRS..BEEN DULY PAID, AND THAT. THIRTY (30) DAYS
HAVE BEEN ELAPSED WITHOUT APPROVAL OR DISAPPROVAL BY DISTRICT~ .THEN IF
DISTRICT 'DOES NOT APPROVE OR DISAPPROVE THE REQUEST TO ASSIGN "
LEASEHOLD WITHIN 'TEN (10) DAYS OF SUCH NOTIFICATION, DISTRICT SHALL BE
DEEMED TO HAVE APPROVED THE REQUEST TO ASSIGN LEASEHOLD. .IN THE EVENT
DISTRICT DISAPPROVES THE REQUEST TO ASSIGN LEASEHOLD~ DISTRICT AGREES
TO SUBMIT THE' MATTER TO BINDING ARBITRATION, UTILIZING THE SERVICES OF
k RETIRED 'SAN MATEO COUNTY JUDGE AS ARBITRATOR, IF AVAILABLE, OR
CHOOSING A SAN MATEO COUNTY JUDICIAL ARBITRATOR BY THE SAME MEANS'USED
FOR SAN MATED COUNTY SUPERIOR COURT ACTIONS.
'THE CONSIDERATION PASSING TO LESSEE FROM SUCH ASSIBNEE UPON
TRANSFER OF LESSEE'S INTEREST .IN THIS LEASE TO A DISTRICT-APPROVED'
~.~RSON OR ENTITY SHALL-NOT BE- INCLUDED AS GROSS RECEIPTS FOR THE
:TERMINATION OF' RENT. UPON ASSIGNMENT OF LESSEE'S INTEREST IN THIS
i .ASR TO A DISTRICT-APPROVED ASSIGNEE WHO HAS UNCONDITIONALLY ASSUMED
THE OBLIGATIONS IMPOSED BY THIS LEASE, LESSEE AND ITS P.REDECESSORS IN
INTEREST SHALL BE RELIEVED OF ALL OBLIGATIONS HEREUNDER ARISING AFTER
THE DATE OF SUCH TRANSFER.
B. ~YPOT~ECATION' LESSEE NAY, WITH THE PRIOR WRITTEN AppROVAL
OF DISTRICT, GRANT A SECURITY INTEREST TO THIS LEASE.FOR THE PURPOSE
OF FINANCING CONSTRUCTION,-INCLUDING "MAJOR REPAIRS" AND "MINOR
REPAIRS" SUBJECT TO COMPLIANCE WITH 'EACH AND EVERY CONDITION THAT
FOLLOWS. FINANCING INCLUDES BOTH THE CONSTRUCTION (OR INTERIM LOAN).
AND THE TAKE-OUT (OR PERMANENT OR LONG-TERM)'LOAN. DISTRICT SHALL NOT
UNREASONABLY WITHHOLD APPROVAL.
1. NO SECURITY INTEREST IN THIS LEASE (WHICH TERM SHALL BE
DEEMED TO INCLUDE THE LEASEHOLD MORTGAGE OR'DEED OF TRUST, THE NOTE
E~IDEHCING ANY INDEBTEDNESS SECURED BY SUCH LEASEHOLD MORTGAGE OR DEED
OF TRUST AND ALL DOCUMENTS EVIDENCING THE COMMITMENT OF FINANCING)
SHALL EXTEND TO OR AFFECT THE FEE,'THE REVERSIONARY INTEREST~ OR THE'
ESTATE OF DISTRICT IN AND TO ANY LAND OR DISTICT-ONNED IMPROVEMENTS
~0~ O~ HEREAFTER ERECTED ON THE LEASE PRMISES.
Z. ANY SECURITY INTEREST IN THIS LEASE SDHALL BE GRANTED
,-,.,,mOR ONLY THE .FOLLOWING PURPOSES: (1) TO FINANCE CONStRUCtION OF
~ERMANENT IMPROVEMENTS AND STRUCTURES UPON THE DEMISED PREMISES~
[0 >ROVIDE "TAKE-OUT'? FINANCING OF ANY CONSTRUCTION LOAN NOT TO EXCEED
"~HE ~EATER OF NINETY PERCENT (90%) OF THE APFRAISED VAt:UR OF THE
I~PROVEMENTS'.ON THE DEMISED PREMISES, '(3) ~0 REFINANCE THE
CONSTRUCT30N NbT TO EXCEED EIGHTY-FIVE PERCENT (85%) OF THE APPRIASED
VALUE O~ TIlE IMPROVEMENTS ON-THE DEMISED PREMISES AND (4) TO FINANCE
LES~E~'S CAPITAL ADDITIONS AND EQUIPMENT, TENANT IMPROVEMENTS,
r~UISITIONS AND/OR REPLACEMENTS REASONABLY REQUIRED IN PURSUIT OF ITS
I'SIN~SSi ACTIVITIES ON THE PREMISES.
NO SECURITY INTEREST IN THIS LEASE OR ASSIGNMENT THEREOF
SHALL BE'BINDING UPON DISTRICT IN THE ENFORCEMENT OF ITS RIGHTS. UNDER
· THIS LEASE, NOR SHALL DISTRICT.BE DEEMED TO.HAVE ANY NOTICE THEREOF,
UNLESS SUCH SECURITY.INTEREST COMPLIES WITH EACH AND EVERY PROVISION
OF THIS ARTICLE 'PERTAINING TO SUC~ SECURITY INTEREST.
· 3. NO SECURITY INTEREST IN THIS LEASE SHALL BE CREATED WITH
NOR ASSIGNED TO ANY PERSON OR ENTITY, NATURAL OR ARTIFICIAL EXCEPT AN
INSTITUTIONAL.LENDER (HEREIN CALLED '*ENCUMBRANCE HOLDER") WHICH SHALL
MEAN ANY BONAFIDE.INSTITUTION AUTHORIZED UNDER THE LAWS OF THE STATE
OF CALIFORNIA TO LEND MONEY ON THE SECURITY OF'AN INTEREST OR
INTERESTS IN REAL PROPERTY, INCLUDING BUT NOT LIM!TED. TO~ AN INSURANCE
COMPANY OR TRUST COMPANY OR REAL'ESTATE INVESTMENT TRUST MORTGAGE
TRUST OR MUTUAL FUND OR PENSION AND WELFARE PROFIT SHARING FUND OR
ENDOW.NMENT FUND WITH AN INVESTMENT PORTFOLIO OF NOT LESS THAN TEN
MILLION DOLLARS ($10,OOO,OOO), A CHARITABLE OR NON-PROFIT CORPORATION
OR ASSOCIATION WITH AN INVESTMENT PORTFOLIO OF NOT LESS THAN FIVE
~ILLiON DOLLARS ($5,000,000), ANY'CALIFORNIA OR FEDERALLY ~HA~TERED
CORPORATIONS (IF LEGALLY EMPOWERED TO MAKE LOANS CONTEMPLATED BY THIS
LEASE), UNLESS.SPECIFICALLY ALLO~ED AND APPROVED BY THE DISTRICT IN
WRITING.·
K 4. NO SECURITY INTEREST IN THIS LEASE OR ASSIGNMENT THEREOF
iALL BE VALID UNLESS ALL OF THE FOLLOWING CONDITIONS ARE MET:
· . AT THE TIME OF MAKING SUCH SECURITY INTEREST THiS
LEASE IS IN FULL FORCE AND EFFECT{ AND
"-b.' SUCH SECURITY INTEREST SHALL HAVE BEEN EXPRESSLY
MADE. SUBJECT TO THE TERMS, COVENANTS, AND CONDITIONS OF THIS LEASE~
AND
C. SUCH SECURITY INTEREST SHALL EXPRESSLY PROVIDE THAT
ENCUMBRANCE HOLDER SHALL PROVIDE EVIDENCE TO'DISTRICT THAT ENCUMBRANCE
HOLDER HAS ACCEPTED OR APPROVED THE COMPLETED IMPROVEMENTS AND THAT
THE IMPROVEMENTS HAVE BEEN ACCEPTED BY THE LENDER TO THE EXTENT THAT
THE TAKE-OUT FINANCING CAN BE PUT IN EFFECT.
" d, SUCH SECURITY INTEREST SHALL EXPRESSLY PROVIDE THAT
ANY PF~OCEEDs FROM INSURANCE, INCLUDING FIRE OR EXTENDED COVERAGE,
SHALL BE USED FOR REPAIR OR REBUILDING OF THE LEASEHOLD IMPROVEMENTS
AND SUCH OTHER EXPENSES AS ARE EXPRESSLY REQUIRED TO BE PAID FROM SUCH
PROCEEDS BY THIS LEASE. SUCH SECURITY INTEREST MAY PROVIDE THAT AFTER
SUCH PROCEEDS HAVE BEEN SO APPLIED, ANY'REMAINING BALANCE, WHICH WOULD
THEN ~.E PAYABLE TO LESSEE, COULD ~E USED TO REPAY ALL OR PART OF THE
rI~TSTANDING LOAN SECURED BY SUCH SECURITY INTEREST. ,
· .
· .e. SUCH SECURITY'INTEREST SH~LL EXPRESSLY PROVIDE THAT
ALL NOSIC~S OF DEFAULT UNDER THE NOTE AND DEED OF TRUST OR LEASEHOLD
MORTGAGE MUST BE SENT TO DISTRI'CT AND LESSEE, AND THAT DISTRICT SHALL
HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO CURE THE DEFAULT OR CAUSE
FI~E DEFAULT TO BE'CURED IF LESSEE FAILS. TO DO SO. DISTRICT SHALL HAVE
ENTY (ZO) DAYS IN NHICH TO CURE ANY DEFAULT OR TO CAUSE ANY DEFAULT
~'.,J BE CURED AFTER THE TIME FOR LESSEE TO CURE IT HAS EXPIRED. ANY
SUBLESSEE OR SUBTENANT OF SUCH SUBLEASE OF THE LEASED PREMISES, SHALL
HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO CURE ANY DEFAULT WITHIN THE
PERIOD PERMITTED FOR DISTRICT TO CURE'SUCH DEFAULT. iF ANy SUCH
SUBLESSEE OR SUBTENANT OF A SUBLEASE CURES'ALL LESSEE'S DEFAULTS THEN
EXISTING,' SUCH SUBLESSEE OR SUBTE~ANT'S POSSESSION AND USE.SHALL NOT
BE DISTURBED BY ENCUMBRANCE HOLDER AS LONG AS THE SUBLESSEE OR
SUBTENANT PERFORMS ITS SUBLEASE PROVISIONS AN9 CONTINUES TO PERFORM
THE OBLIGATIONS OF THE LESSEE,. INCLUDING PAYMENT OF RENT TO THE
DISTRICT AND SUMS DUE THE ENCUMBRANCE HOLDER ACCORDING TO THIER
RESPECTIVE INTERESTS.
f. DISTRICT SHALL HAVE RECEIVED'WRITTEN NOTICE OF THE
MAKING OF SUCH SECUIRTY INTEREST WITHIN FIVE (5) DAYS AFTER THE
EXECUTION AND DELIVERY OF SUCH SECURITY INTEREST AND SUCH SECURITY
INTEREST OR ABSTRACT THEREOF SHALL HAVE BEEN RECORDED WITHIN TEN ¢10)
DAYS AFTER THE EXECUTION AND DELIVERY THEREOF.
5. IF ENCUMBRANCE HOLDER ACQUIRED LESSEE'S INTEREST IN THE
LEASE AS A RESULT OF A SALE UNDER THE SECURITY INTEREST PURSUANT TO A
JUDGMENT OF FORECLOSURE OR THROUGH ANY TRANSFER IN LIEU OF
FORECLOSURE,..INCLUDING, WITHOUT LIMITATION, PURCHASE AT TRUST DEED
~""tLE, SUCH ENCUMBRANCE.HOLDER SHALL HAVE THE PRIVILEGE OF TRANSFERRING
'S ;NTEREST IN SUCH LEASE TO A WHOLLY OWNED SUBSIDIARY CORPORATION
~...;THOUT THE PRIOR CONSENT OF DISTRICT,. AND IN SUCH EVENT, SUCH
ENCUMIRANCE HOLDER SHALL BE RELIEVED OF ANY FURTHER LIABILITY. UNDER
THIS LEASE ARISING FROM AND AFTER SUCH TRANSFER,
6. ENCUMBRANCE HOLDER sHALL HAVE THE RIGHT, AT ANY TIME
DURING THE TERM OF THE OUTSTANDING SECURITY INTEREST AND ~HILE THIS-
LEASE'IS IN FULL FORCE AND EFFECT, TO DO ANY'ACT OR THING REQUIRED BY
THIS LEASE TO BE PERFORMED BY LESSEE IN ORDER TO PREVENT A FORFEITURE
OF LESSEE'S RIGHTS HEREUNDER,.AND ALL.SUCH ACTS OR' THINGS SO DONE
SHALL PREVENT A FORFEITURE OF LESSEE'S RIGHTS HEREUNDER AS IF DONE ~Y
LESSEE.
'' 7. WRITTEN CONSENT OF ENCUMBRANCE HOLDER SHALL ~E O~TAINED
PRIOR TO ANY AMENDMENT TO THIS'LEASE.
8. EACH AND ALL OF THE PROVISIONS, AGREEMENTS, TERMS,
COVENANTS, AND CONDITIONS OF THIS LEASE TO BE PERFORHED~ KEPT AND
OBSERVED ~Y DISTRICT AND L~ssEE SHALL BE BINDING UPON'THE HEIRS,
EXECUTORS, ADMINISTRATORS, SUCCESSORS, AND ASSIGNS OF DISTRICT AND
LESSEE~ AND ALL RIGHTS, PRIVILEGES ANO BENEFITS ARISING UNDER THIS
LEASE IN FAVOR OF DISTRICT, LESSEE AND ENCOMBRANCE HOLDER SHALL BE
A...~VAILABI_E IN FAVOR OF THE HEIRS, EXECUTORS, AD~iN/STRA~ORS, -'
JCCESSORS~ AND ASSIGNS-THEREOF RESPECTIVELY, PROVIDED~ HOWEVER~ THAT
ANY ASSIGNMENT, H~POTHECATION, OR SUBLETTING BY OR THROUGH LESS'RE OR
ENCOMBRA~CE HOLDER IN VIOLATION OF THE PROVISIONS OF THIS LEASE SHALL
· BE vOID-, AND NO RIGHTS WHATSOEVER SHALL BE CONFERRED THEREBY.
C. HYPOTHECATION OR ASSIGNMENT FOR ~ENEFIT OF CREDITD~D
A GENERAL ASSIGNMENT BY LESSEE FOR THE BENEFIT OF CREDITORS,
-~HALL CONSTITUTE A BREACH OF THIS LEASE BY LESSEE AND BE ~AUSE FOR
IMMEDIATE TERMINATION OF THIS LEASE BY DISTRICT, ANYTHING IN THIS
LEASE TO THE CONTRARY NOTWITHSTANDING..' IN THE EVENT !HE LEASE IS
TERMINATED BY THE DISTRICT FOR THE ABOVE CAUSk,.THE ENCUMBRANCE HOLDER
SHALL HAVE THE RIGHT TO'ASSUME THE LEASE, AS AN ASSIGNEMENT, WITHOUT
PRIOR APPROVAL OF THE DISTRICT ANd SAID ASSIGNMENT SHALL ~D~
CONSTITUTE A BREACH OF THIS'LEASE. ENCUMBRANCE HOLDER SHALL
THEREAFTER BE REQUIRED'TO FOLLOW ARTICLE XVI A.3, IN REQUESTING
ASSIGNMENT OF THE LEASE TO A'NEN MANAGING ENTITY.
ARTICLE XVII - OWNERSHIP OF LESSEE
A. ANY vOLUNTARY CHANGE' IN LEGAL STATUS OF LESSEE, [NCLUDING,
WITHOUT LINITATION, A CHANGE TO A SOLE PROPRIETORSHIP~ PARTNERSHIP,
CORPORATION, JOINT VENTURE, OR ANY OTHER ENTITY,'NATURAL OR
ARTIFICIAl, OR ANY VOLUNTARY TRANSFER OF OR ALTERATION IN THE RATIO OF .
THE EVIDENCES OF OWNERSHIP INTERESTS IN LESSEE (INCLUDING, WITHOUT
LIMITATION, SHARES OF STOCK), SHALL BE DEEMED AN ASSIGNMENT PROHIBITED
BY ARTICLE XVT - ASSIGNMENT, SUBLETTING AND HYPOTHECATION~ UNLESS THE
PRIOR WRITTEN CONSENT OF THE DISTRICT BE OBTAINED. ANY DISPUTE SHALL
~E PROCESSED IN ACCORDANCE WITH THE PROCEDURE SET FORTH IN ARTICLE
XI%-CLAIMS AND PROTEST. THE SALE. OF LIMITED PARTNERSHIP.SHARES TO.
'--"~VESTORS~ OR THE TRANSFER OF A PORTION OF THE LIMITED PARTNERSHIP
4ARES FROM TIME TO TIME' SHALL NOT BE DEEMED A CHANGE IN THE LEGAL
-~ATUS OF LESSEE, AND'SHALL NOT BE DEEMED A PROHIBZTED ASSIGNMENT.
B. ANY fRANSFER OF THIS L~ASE OR ANY INTEREST THEREIN FROM
LESSEE BY CORPORATE REORGANIZATION, MERGER, CONSOLIDATION, OR
LIQUIDATION, SHALL BE DEEMED AN ASSIGNMENT PROHIBITED BY ARTICLE XVI -
ASSIGNMENT,.SUBLETTING AND HYPOTHECATION, UNLESS ~HE PRIOR WRITTEN
CONSENT OF DISTRICT BE OBTAINED. SUCH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD BY DISTRICT. ANY DISPUTE SHALL BE PROCESSED IN
ACCORDANCE WITH THE PROCEDURE SET FORTH IN ARTICLE XIX- - CLAIMS AND
PROTEST. .. ·
C. ANY APPOINTMENT OF A RECEIVER TO TAKE POSSESSION OF THE
LEASED PREMISES. OR THE IMPROVEMENTS, OR OF LESSEE'S INTEREST IN THE
LEASEHOLD OR LESSEE'S OPERATIONS ON THE LEASED PREMISES' FOR ANY
REASON, OR THE'SUBJECTION OF ANY RIGHT OR INTEREST OF LESSEE DIRECTLY
RELATED TO THE'BUSINESS CONDUCTED ON, AT OR .FROM THE LEASED PREMISES
TO ATTACHMENT, EXECUTION, OR OTHER LEVY, OR TO SEIZURE UN'ER LEGAL
PROCESS, .IN ANY SUCH EVENT, UNLESS THE APPOINTMENT OF THE RECEIVER OR
ATTACHMENT, EXECUTION, OR OTHER LEVY, OR .SEIZURE UNDER LEGAL PROCESS
IS PURSUANT TO BANKRUPTCY, OR IS RELEASED, AND ALL CONSEQUENT ORDERS,
ADJUDICATIONS, CUSTODIES, AND SUPERVISORS ARE DISMISSED, VACATED, OR
OTHERWISE PERNANENTLY STAYED OR TERMINATED WITHIN NINETY {~0) DAYS
;TER THE APPOINTMENT, FILING, OR OTHER INITIAL EVENT, SUCH EVENT
~ALL BE DEEMED AN ASSIGNMENT PROHIBITED BY ARTICLE.XVI - ASSIGNMENT,
-~dSLETTING AND HYPOTHECATION. ANY EXTENSION OF TI~E MAY ONLY BE
~RANTED UPON THE CONDITION THAT A ~RITTE~ REQUEST FOR EXTENSION OF
-Z4-
TIME IS FILED WITH. THE DISTRICT PRIOR TO THE EXPIRATION OF SAID NINETY
(~O) DAY PERIOD, AND UPON SUCH FURTHER ~ONDItIONS AS THE DISTRICT, IN
ITS SOLE DISCRETION, SHALL SEE Fi.T TO IMPOSE.
~. ANYTHING IN THIS LEASE TO THE CONTRARY NOTWITHSTANDING, ANY
DEFAULT OR BREACH OF THIS ARTICLE SHALL BE CURED, 1F ENCUMBRANCE
LDER ELECTS TO PURSUE ITS RIGHT TO FORECLOSE ON ITS SECURITY
TEREST AND NOTIFIES DISTRICT IN WRITING OF ITS INTENTION TO DO SO.
THIN TWENTY (ZO) DAYS AFTER RECEIVING NOTICE OF INTENTION TO
TERMINATE BY DISTRICT, AS PROVIDED IN ARTICLE XCIII, DEFAULT OR
BREACH, AND EACH AND.~EVERY CONDITION OF I. TS RIGHT TO FORECLOSE OF ITS
SECURITY INTEREST OCCURS. ~
I
~RTI~LE XVIII - 'DEFAULT OF BREACH
A. LESSEE SHALL NOT BE CONSIDERED IN DEFAULT OR BREACH AS TO ANY
PROVISION OF THIS LEASE WHEN SUCH DEFAULT OR BREACH IS THE RESULT OF
COMPLIANCE WITH, OR PURSUANT TO, ANY PROCESS, ORDER OR DECREE OF ANY' "
COURT OR REGULATORY BODY OF' COMPETENT JURISDICTION.
B. EACH TERM AND EACH PROVISION IN THIS LEASE TO BE KEPT~
OBSERVED, OR PERFORMED BY LESSEE SHALL BE CONSTRUED TO BE BOTH A
COVENANT AND A CONDITION. -
C. 1F LESSEE SHALL DEFAULT OR BREACH ANY COVENANT OR CONDITIONS
TO BE KEPT, OBSERVED, OR PERFORMED BY LESSEE, DISTRICT SHALL GIVE
WRITTEN NOTICE OF DEFAULT OR BREACH 90 LESSEE AND ENCUMBRANCE HOLDER.
LESSEE SHALL HAVE THIRTY (30) DAYS AFTER SERVICE OF SAID NOTICE IN
WHICH TO CURE, REMEDY, AND CORRECT SAID DEFAULT OR BREACH, OR IN WHICH
TO COHMENCE AND'DILIGENTLY PURSUE THE PERFORMANCE OF THE THING OR WORK
""".QUIRED TO BE DONE TO CURE, REMEDY, AND CORRECT SAID DEFAULT OR
i :EACH. SHOULD LESSEE FAIL TO SO CURE~ REMEDY, AND CORRECT SAID
~FAULT OR BREACH, OR TO COMMENCE AND DILIGENTLY PURSUE SUCH.
CORRECTIVE REMEDIAL ACTION'WITHIN AND DURING SAID THIRTY (30) DAY
PERIOD, OR SHOULD THEREAFTER FAIL TO DILIGENTLY PURSUE SUCH CORRECTIVE
ACTION, DISTRICT SHALL HAVE THE RIGHT~ BUT NOT THE OBLIGATION~ TO
TERMINATE THE LEASE, SUBJECT TO THE RIGHTS OF ENCUM~:RANCE HOLDER AS-
SET FORTH IN THIS ARTICLE AND IN ARTICLE XVI - ASSIGNMENT, SUBLETTING
AND HYPOTHECATION. DISTRICT SHALL HAIL TO.LESSEE AND ENCUMBRANCE
HOLDER NOTICE OF INTENTION TO TERMINATE OR NOTICE OF INTENTION TO -'
REENTER.
D. IF A DEFAULT OR BREACH HAS OCCURRED AND HAS NO~ BEEN CURED BY
LESSEE OR ENCUMBRANCE HOLDER IN ACCORDANCE WITH THIS ARTICLE AND
ARTICLE XVI - ASSIGNMENT, SUBLETTING AND HYPOTHECATION, OF THIS -.
ARTICLE, A NOTICE OF TERMINATION MAY BE SENT BY DISTRICT'TO LESSEE'AND
ENCUmbrANCE HOLDER AND TEN (10) DAYS AFTER RECEIPT OF SUCH NOTICE,
U~LESS SAID DEFAULT OR BREACH HAS BEEN CURED~ THIS LEASE SHALL BE
TERMINATED. UPON SUCH TERMINATION, LESSEE'S RIGHT TO POSSESSION OF
THE PREMISES SHALL TERMINATE AND LESSEE SHALL SURRENDER POSSESSION
THEREOF IMMEDIATELY. IN NO EVENT SHALL DISTRICT TERMINATE THIS LEASE
UNTIL AT LEAST NINETY ¢90) DAYS FOLLOWING THE ~ECEIPT OF THE NOTICE OF
DEFAULT OR BREACH BY ENCUMBRANCE HOLDER.
-ZS-
E. DISTRICT SHALL NOT EXERCISE ANY REMEDY AVAILABLE TO IT FOR
BREACH OR DEFAULT ~Y LESSEE AND SHALL NOT TERMINATE THIS LEASE DUE TO
ANY DEFAULT OR BREACH BY LESSEE. UNLESS DISTRI.CT SHALL HASE SENT
WRiTTE~ N~]TICE'OF DEFAULT OR BREACH TO ENCUMBRANCE HOLDER. UPON
RECEIPT OF SUCH NOTICE, ENCUMBRANCE HOLDER SHALL HAVE THE RIGHT TO
CURE ANY DEFAULT OR BREACH IN THE FOLLOWING MANNER, AND IF ALL
'~.FAULTS OR BREACHES ARE SO CURED, THiS LEASE SHALL REMAIN IN FULL
)RCE AND EFFECT; '-
1. IF THE DEFAULT OR BREACH IS IN THE PAYMENT OF RENT~.
TAXES, INSURANCE PREMIUMS, UTILITY CHARGES,. LIQUIDATED DAMAGES, OR ANY
OTHER SUM OF MONEY· WHATSOEVER, SUCH SUM OR SUMS SHALL BE.PAI.D .TO.
DISTRICT, 'OR OTHER PROPER PAYEE, I~ITHIN TWENTY I20) DAYS AFTER. SENDiIN$
THE NOTICE OF INTENTION TO TERMINATE OR NOTICE IF INTENTION TO REENTER'
TO ENCUMBRANCE HOLDER. .
:~. IF THE BREACH OR DEFAULT IS OTHER THAN .AS SPECIFIED
SuBARTICLE I ABOVE, 'SUCH DEFAULT OR BREACH SHALE BE CURED IF:
z. WITHIN TWENTY '(ZO). DAYS AFTER SENDING THE NOTICE OF
'INTENTION TO TERMINATE OR NOTICE OF ,INTENTION TO REENTER TO
ENCUMBRANCE HOLDER B.Y DISTRICT SAID ENCUMBRANCE HOLDER CURES,
REMEDIES, AND CORRECTS SAID DEFAULT OR BREACH~ OR COMMENCES AND
DILIGENTLY. PURSUES THE PERFORMANCE OF THE THING OR. WORK REQUIRED TO
DONE TO CURE, CORRECT AND REMEDY SAID DAFAULT OR BREACH. ANY PERIOD
HEREIN STATED SHALL BE EXTENDED BY THE TIME IN WHICH ENCUMBRANCE
HOLDER IS PREVENTED FROM SECURING POSSESSION OF THE LEASED PREMISES BY
ANY ORDER, JUDGMENT, OR DECREE OF ANY COURT 'OR REGULATORY ]~ODY OF
COMPETENT JURISDICTION IF POSSESSION OF' THE LEASED F'REMISES
NECESSARY TO CURE THE DEFAULT OR BREACH; OR
b. I~ITHIN TWENTY. (ZO) DAys AFTER.SENDING THE NOTICE OF
½TENTiON TO TERMINATE OR NOTICE OF INTENTION TO. REENTER TO
ENCUMBRANCE HOLDER, DISTRICT RECEIVES FROM ENCUMBRANCE HOLDER 14RITTEN
NOTICE OF INTENTION TO FORECLOSE SECURITY INTEREST, AND ALL OF THE
FOLLOI~ING EVENTS OCCUR:
(I) WITHIN SAID PERIOD, ENCUMBRANCE HOLDER
COMMENCES FORECLOSURE OF ITS SECURITY INTEREST BY JUDICIAL ACTION OR'.
TRUST DEED SALE AND DILIGENTLY PROSECUTES SAID ACTION OR TRUST DEED
SALE: AND
ENCUMBRANCE HOLDER PAYS RENT AND SUCH OTHER
MONIES TO BE PAID TO DISTRICT BY LESSEE UNDER THIS LEASE UNTIL SUCH
FORECLOSURE SALE BECOMES FINAL OR SUCH TRUST DEED SALE IS CONCLUDED;
AND'
(3) WITHIN THIRTY-FIVE (35) DAYS AFTER SUCH
FORECLOSURE SALE BECOMES FINAL OR 'LSUCH TRUST DEED SALE IS CONCLUDED~
THE TRANSFEREE OR PURCHASER CURES, REMEDIES, AND CORRECTS SAID DEFAULT
OR BREACH, OR COMMENCES AND DILIGENTLY PURSUES THE 'PERFORMANCE OF THE
THING OR WORK REQUIRED TO BE DONE TO CURE, CORRECT, AND REMEDY SAID
~EFAULT OR BREACH. ANY PERIOD HEREIN STATED SHALL 9E EXTENDED BY THE
TIME IN WHICH SUCH TRANSFERREE OR PURCHASER IS PREVENTED BY ANY ORDER,
r"'JDG~.~ENT OR DECREE'OF ANY COURT OR REGULATORY BODY OF ~OMPETENT
JRISDICTION FROM COMMENCING FORECLOSURE ~Y JUDICIAL ACTION OR 'tRUST
EEO SA. LE, OR FROM SECURING POSSESSION OF THE LEASED PREMISES IF
PCSSESSICN OF THE.~EASED PREMISES IS NECESSARY TO cuRE THE DEFAULT OR
~RE~ . ·
' c. .ANY DEFAULT OR BREACH WHICH ARISES BY OPERATION OF
ARTICLE XVI - ASSIGNMENT, SUBLETTING AND HYPOTHECATION, .SUBARTICLE
~ (1) OR (2), SHALL BE DEEMED TO HAVE BEEN CURED IF, WITHIN TWENTY
:0) DAYS AFTER SENDING A NOTICE OF INTENTION TO TERMINATE OR NOTICE
.... ~ INTENTION TO REENTER TO ENCUMBRANCE HOLDER, DISTRICT RECEIVED FROM
ENCUMBRANCE HOLDER WRITTEN NOTICE OF.INTENTION TO FORECLOSE SECURITY
INTEREST, AND-BOTH OF THE FOLLOWING EVENTS OCCUR:
(1)' ~ITHIN SAID PE.RIOD ENCUMBRANCE HOLDER COMMENCES
FORECLOSURE OF ITS SECURITY INTEREST BY'JUDICIAL ACTION OR.TRUST..DEED
SALE AND DILIGENTLY PROSECUTES SAID ACTION OR TRUST DEED SALE~ AND
. (Z) ENCUMBRANCE HOLDER PAYS RENT'AND suCH OTHER MONIES
TO BE PAID TO DISTRICT BY LESSEE UNDER THIS LEASE UNTIL SUCH'
FORECLOSURE SALE BECOMES.FINAL OR SUCH TRUST DEED SALE IS CONCLUDED.
ANY PERIOD: HEREIN.STATED SHALL BE-EXTENDED'BY THE TIME IN WHICH
SUCH TRANSFEREE.OR PURCHASER IS PEVENTED BY ANY ORDER, JUDGMENT, OR
DECREE OF ANY COURT OR REGULATORY BODY OF COMPETENT JURISDICTION FROM
COMMENCING FORECLOSURE BY JUDICIAL ACTION OR TRUST DEED SALE, OR FROM
SECURING POSSESSION OF THE LEASED 'PREMISES.IF POSSESSION OF. ~HE LEASED
PREMI~S IS NECESSARY TO CURE T~E DEFAULT OR BREACH.
ARTICLE XIX ~ CLAIMS AND PROTEST '"
'DURING REASONABLE HOURS, DISTRICT, .ITS AGENTS OR EMPL'OYEES~ SHALL
VE THE RIGHT, BUT NOT THE OBLIGATION, TO ENTER UPON AND INSPECT THE
ASED PREMISES AND OPERATIONS, AND TO MADE WRITTEN. DEMAND UPON LESSEE
PERFORM ITS OBLIGATIONS UNDER THIS LEASE. SUCH DEMAND SHALL
SPECIFY THE OBLIGATIONS TO'BE PERFORNED.
IF LESSEE DISPUTES'SUCH DEMAND, WITHIN' THIRTY (30) DAYS AFTER ANY
SUCH DEMAND IS GIVEN~ LESSEE SHALL FILE A WRITTEN PROTEST OF DEMAND
WITH DISTRICT, STATING CLEARLY AND IN DETAIL ITS OBJECTIONS AND.
REASONS. IF LESSEE DOES NOT FILE SUCH PROTEST WI?HIN THIRTY (30)
DAYS, LESSEE SHALL BE DEEMED TO HAVE WAIVED ALL CLAIMS FOR DAMAGES AND
ADJUSTMENTS AGAINST DISTRICT ARISING OUT OF THE DEMAND.
UPON RECEIPT OF ANY SUCH PROTEST FRoM LESSEE, DISTRICT, ITS
AGENTS OR EMPLOYEES, SHALL REVIEW THE DEMAND'O~JECTED TO AND LESSEE'S
PROTEST, AND SHALL WITHIN THIRTY (30) DAYS NOTIFY LESSEE IN WRITING OF
!TS DECISION, WHICH SHALL BE BINDING ON ALL PARTIES, UNLESS WITHIN
THIRTY (30) DAYS THEREAFTER LESSEE SHALL FILE WITH THE DISTRICT A
REQUEST FOR RECONSIDERATION. WITHIN THIRTY (30) DAYS OF RECEIPT OF
SUCH REQUEST FOR RECONSIDERATION, DISTRICT SHALL RENDER ITS DECISION.
FAILURE BY DISTRICT TO RENDER ITS DECISION WITHIN THIRTY (30) DAYS
SPALL BE hELMED A REJECTION OF THE PROTEST AND RATIFICATION OF
DISTR~CTS INITIAL DECISION. -
-Z7-
ARTICL~ ~X' - REENTRY BY_~ISTRICT WITHOUT TERMINATION
A. REENTRY.' IF'LESSEE IS IN DEFAULT OR BREACH OF ANY OF THE
ERMS, COVENANTS, OR CONDITIONS OF THIS LEASE OR IF LESSEE ABANDONS
HE LEASED PREMISES~ THEN DISTRICT', IN ADDITION TO ANY OTHER RIGHTS OR
"~EMEDIES-TO WHICH IT MAY 'BE ENTITLED, INSTEAD OF SENDING A NOTICE OF
INTENTION TO TERMINATE AS PROVIDED IN ARTICLE XVIII - DEFAULT OR
BREACH, MAY SEND A NOTICE OF INTENTION TO REENTER. TWENTY (20)DAYS
AFTER SENDING SUCH NOTICE OF INTENTION TO REENTER~ IF LESSEE'IS STILL
IN DEFAULT OR BREACH, DISTRICT MAY SEND A NOTICE OF REENTRY· THE
EXERCISE OF SUCH RIGHT TO SEND NO~ICE OF REENTRY SHALL PREyAIL OVER,
SUPERSEDE~ AND SUSPEND THE RIGHTS OF ENCUMBRANCE HOLDER IS SUCH NOTICE
OF. REENTRY'IS SENT TO ENCUMBRANCE HOLDER PRIOR TO RECEIPT OF DISTRICT
OF ENCUMBRANCE HOLDER'S NOTICE 'OF INTENTION TO FORECLOSE SECURITY
INTEREST AND IF DISTRICT APPLIES THE SUBRENTALS~RECEIVED AND COLLECTED
BY DISTRICT AS BELOW PROVIDED. SUCH RIGHTS OF ENCUMBRANCE HOLDER
SHALL REMAIN SUSPENDED UNTIL DISTRICT SENDS TO ENCUMBRANCE HOLDER'ITS
NOTICE OF INTENTION TO TERMINATE. DISTRICT SHALL HAVE THE IMMEDIATE
RIGHT OF REENTRY UPON SENDING NOTICE OF REENTRY TO LESSEE. A COPY OF
SUCH NOTICE OF REENTRY SHALL BE SENT BY DISTRICT TO ENCUMBRANCE
HOLDER.
B. RELETTING. SHOULD DISTRICT .ELECT TO REENTER, AS-HEREIN
PROVIDED, OR SHOULD IT TAKE POSSESSION PURSUANT TO LEGAL PROCEEDINGS
OR PURSUANT TO ANY NOTICE PROVIDED BY LAW~ OR SHOULD IT TAKE
POSSESSION UPON ABANDONMENT OF.THE LEASED PREMISES BY LESSEE, DISTRICT
MAY EITHER TERMINATE THIS LEASE AS IN'THIS LEASE PROVIDED, OR DISTRICT
F"'~.Y,' WITHOUT TERMINATING THIS FROM TIME TO RELET THE
LEASE,
TIME,
EASED PREMISES OR ANY PART THEREOF FOR SUCH TERMS (WHICH MAY EXTEND
~uEYOND THE TERM' OF THIS LEASE) AND AT SUCH RENTAL OR RENTALS AND ON
SUCH OTHER TERMS AND CONDITIONS AS DISTRICT IN ITS SOLE DISCRETION MAY
DEEM ADVISABLE WITH THE RIGHT TO MADE .ALTERATIONS AND REPAIRS TO THE
IMPROVEMENTS WITHOUT LIABILITY TO LESSEE OR ENCUMBRANCE HOLDER
THEREFORE~ PROVIDED HOWEVER, ANY ALTERATIONS OR REPAIRS IN ADDITION TO
THOSE REQUIRED'BY THIS LEASE TO BE PERFORMED BY LESSEE SHALL BE
SUBJECT TO PRIOR WRITTEN CONSENT OF ENCUMBRANCE HOLDER.
C. RENTALS. -SHOULD DISTRICT UPON LESSEE'S DEFAULT OR BREACH
OR ABANDONMENT ELECT TO' RELET THE LEASED PREMISES WITHOUT TERMINATING
THIS LEASE, LESSEE SHALL BE DEEMED TO HAVE ASSIGNED, AND DOES HEREBY
ASSIGN, TO DISTRICT, ALL SUBRENTS AND OTHER SUMS FALLING DUE FROM .'
LESSEE'S SUBTENANTS, LICENSEES,.AND CONCESSIONAIRS (HEREIN CALLED
"SUBTENANTS") DURING ANY PERIOD'IN WHICH DISTRICT HAS THE RIGHT UNDER
THIS LEASE, IF EXERCISED FROM AND AFTER SENDING NOTICE OF REENTRY, TO
REENTER THE LEASED PREMISES FOR LESSEE'S DEFAULT OR E:REACH OR UPON
LESSEE'S AI~ANDONMENT, AND LESSEE SHALL NOT HAVE ANY RIGHT TO SUCH SUMS
DURI,~G THAT PERIOD. DISTRICT MAY COLLECT THE SUNS AND MAY ALSO BRING
ACTIOH FOR THE RECOVERY OF SUMS DIRECTLY FROM SUCH OBLIGORS. DISTRICT
. SU:,o (SUBRENTS AND OTHER SUMS FALLING
SHALL RECEIVE AND COLLECT SUCH
DUE FROM SUBTENANTS), APPLYING THEM EXCEPT AS 0THERNISE ORDERED BY A
~.~3URT rjr OTHER REGULATING BODY HAVING JURISDICTION OVER THE SUBJECT
~TTER:
1. FIR~T~ TO THE PAYMENT OF ANY INDEBTEDNESS OTHER THAN
RENT DUE ~EREUNDER FROM LESSEE TO DISTRICT.
Z. SECOND, TO THE PAYMENT OF ANY COSTS AND EXPENSES OF SUCH
~ETT NG AND ANY ALTERATIONS OR REPAIRS REQUIRED THEREFOR
3. THIRD, TO THE PAYMENT OF RENT DUE'AND UNPAID BY LESSEE
L'~EREUNDER. '. ~
· . 4. FOURTH, TO ANY DELINQUENT PAYMENTS DUE UNDER THE LOAN
AND UNPAID 'BY LESSEE TO ENCUMBRANQE HOLDER.
" 5. FIFTH, SUCH AMOUNT EQUAL TO THE LAST PRECEDING ADJUSTED
MINIMAL ANNUAL RENT SHALL. BE HELD BY DISTRICT AND APPLIED IN PAYMENT
OF FUTURE RENT AS THE SAME MAY BECOME DUE AND PAYABLE HEREUNDER.
6', SIXTH, THE RESIDUE, IF ANY, SHALL BE HELD BY DISTRICT
AND APPL]'ED IN PAYMENT OF'FUTURE PAYMENTS DUE UNDER THE LOAN TO
ENCUMBRANCE HOLDER AS THE SAME MAY BECOME DUE AND PAYABLE THEREUNDER.
7. SEVENTH, THE RESIDUE, ]F ANY, SHALL BE HELD BY DISTRICT
AND APPLIED IN 'PAYMENT OF FUTURE· RENT AND OTHER OBLIGATIONS OF. LESSEE
TO DISTRICT AS THE SAME MAY BECOME DUE AND PAYABLE HEREUNDER.
LESSEE SHALL NEVERTHELESS PAY DISTRICT ON THE DUE DATE SPECIFIED
IN THIS LEASE THE EQUIVALENT OF ALL SUMS REQUIRED TO BE PAID TO
DISTRICT BY LESSEE UNDER THIS LEASE, PLUS.DISTRICT'S EXPENSES~ LESS
THE SUMS ASSIGNED AND ACTUALLY COLLECTED UNDER THIS ARTICLE,' DISTRICT
Y PROCEED TO COLLECT'EITHER THE. ASSIGNED SUMS OF LESSEE'S ~ALANCES
~ BOTH, OR ANY INSTALLMENT OR INSTALLMENTS OF THEM, EITHER BEFORE OR
:TLR EXPIRATION OF THE TERM OF THIS LEASE, BUT THE PERIOD OF
~LIMITATIPNS SHALL NOT BEGIN 'TO' RUN ON LESSEE'S PAYMENTS UNTI.~ THE DUE
DATE..OF THE FINAL INSTALLMENT TO WHICH DISTRICT IS ENTITLED, NOR SHALL
SUCH PERIOD'BEGIN TO RUN ON THE PAYMENTS OF THE ASSIGNED SUMS UNTIL
THE DUE DATE OF. THE FINAL INSTALLMENT DUE FROM THE RESPECTIVE
OBLIGORS. SHOdLD SUCH SUBRENTS AND OTHER SUMS FALLING DUE FROM
SUBTENANTS AS COLLECTED AND.RECEIVED BY DISTRICT, PLUS DISTRICT'S
EXPENSES, BE LESS THAN THAT DUE TO BE PAID ON THE DATE SPECIFIED IN
THIS· LEASE, THEN LESSEE SHALL PAY SUCH DEFICIENCY TO DISTRICT. LESSEE
SHALL ALSO PAY TO DISTRICT, AS SOON AS ASCERTAINED AND WITHIN ~HIRTY
(30) DAYS AFTER WRITTEN DEMAND THEREFOR, THE COST AND EXPENSES,
INCLUDING ATTORNEYS' FEES, IF ANY, INCURRED BY DISTRICT IN SUCH
RELETTING.
D. CONTINUING ELECTION TO TERMINATE. NO SUCH REENTRY OR
TAKING POSSESSION OF THE LEASED PREMISES BY DISTRICT SHALL BE
CCNSTRUED AS AN ELECTION'ON ITS PART TO TERMINATE THIS LEASE UNLESS A
NOTICE· OF INTENTION TO TERMINATE IS SENT TO LESSEE AND TO ENCUMBRANCE
HOLDER OR' UNLESS THE TERMINATION THEREOF BE DECREED BY A COURT OF
COMPETENT JURISDICTION. NOTWITHSTANDING ANY SUCH REENTRY WITHOUT
TERMINATION, DISTRICT MAY, AT ANY TIME THEREAFTER, ELECT TO TERMINATE
THIS LEASE FOR ANY SUCH PREVIOUS DEFAULT, BREACH, O~ A~ANDONMENT BY
~!FSSEE BY SENDING ITS NOTICE OF INTENT.ION TO TERMiNATE~TO LESSEE AND
3 ENCUMBRANCE HOLDER. ANY TERMINATION OF THIS LEASE AS HEREIN-
~OVI~ED SHALL NOT RELIEVE LESSEE FROM THE PAYMENT OF ANY SUM SUMS
OR
~HAT SHALL THEN BE DUE 'AND PAYABLE TO DISTRICT HEREUNDER, OR ANY CLAIM
ANY SUCH TERMINATION SHALL NOT PREVENT DISTRICT FROM ENFORCING PAYMENT
OF ANY SUCH SUM OR.SUMS OR CLAIM.FOR DAMAGES.BY ANY REMEDY PROVIDED
FOR BY LA~, OR .FROM RECOVERING DAMAGES FROM LESSEE FOR ANY DEFAULT OR
BREAO~ ~THEREUNDER. ·
E. CUMULATIVE RIGHTS. ALL RIGHTS, OPTIONS AND. REMEDIES OF
--[STRICT CONTAINED IN THIS LEASE SHALL BE'CONSTRUED AND HELD TO BE
)MULATIVE, AND NO .ONE OF THEM SHALL BE EXCLUSIVE OF THE OTHER, EXCEPT
'~'~ THIS ARTICLE OTHERt~ISE PROVIDED, AND DISTRICT SHALL HAVE THE RIGHT
TO PURSUE ANY ONE OR ALL OF SUCH REMEDIES OR ANY OTHER REMEDY OR .
RELIEF WHICH NOW IS OR MAY HEREAFTER BE'PROVIbED BY LAW,.WHETHER OR
NOT STATED IN THIS LEASE. ~ .'
.ARTICLE XXI~- ~AIVER AND NON-WAIVER ' ~
A. THE FAILURE OF DISTRICT TO EITHER GIvE NOTICE OF DEFAULT' OR
BREACH OF THE' LEASE, OR TO TERMINATE THE LEASE BECAUSE OF A DEFAULT OR
BREACH T~EREOF, OR TO EXERCISE ANY OTHER .RIGHT CONFERRED ON IT
PURSUANT TO THE LEASE, SHALL. NOT BE A WAIVER OF ANY'RIGHT OR RIGHTS
CONFERRED BY THE LEASE, NOR SHALL DISTRICT BE E~TOPPED TO ASSERT SUCH
RIGHT OR RIGHTS AS ANY REASONABLE TIME.AFTER DISTRICT HAS. KNOWLEDGE OF
A BREACH OR DEFAULT.
B. ~0 WAIVER OF ANY DEFAULT OR BREACH SHALL 'CONSTITUTE A 'wAIVER
OF ANY OTHER DEFAULT OR BREACH, WHETHER OF THE SAME OR ANY' OTHER TERN,
COVENANT,' OR CONDITION. NO WAIVER; BENEFIT, PRIVILEGE OR SERVICE
VOLUNTARILY GIVEN OR PERFORMED BY DISTRICT OR LESSEE SHALL GIVE THE
OTHER ANY CONTRACTURAL RIGHT BY CUSTOM, ESTOPPEL OR OTHERWISE. THE
SUBSEQUENT 'ACCEPTANCE OF RENT PURSUANT TO THIS LEASE SHALL NOT
CONSTITUTE A WAIVER OF ANY PRECEDING DEFAULT BY LESSEE OTHER THAN.A
[FAULT IN THE PAYMENT OF THE PARTICULAR RENTAL PAYMENT SO ACCEPTED,
[GARDLESS OF DISTRICT'S KNOWLEDGE OF THE PRECEDING BREACH AT THE TIME
-.~P ACCEPTING THE RENT, NOR SHALL ACCEPTANCE OF RENT OR ANY OTHER '
PAYMENT AFTER. TERMINATION OF THiS LEASE CONSTITUTE k REINSTATEMENT',
EXTENSION OR RENEWAL OF THIS LEASE .OR REVOCATION OF ANY NOTICE OR
OTHER ACT BY D~STRICT. '
ARTICL~ XXII - MAINTENANCE AND REPAIR
A, THROUGHOUT THE TERM OF THIS LEASE, LESSEE SHALL, AT LESSEE'S
SOLE COST AND EXPENSE, MAINTAIN THE LEASED PREMISES AND ALL
IMPROVEMENTS, .INSTALLATIONS, AND'FACILITIES ON THE LEASED PREMISES,
INCLUDING LANDSCAPE IMPROVEMENTS, PARKING LO~S AND PAINTING OF
E~)UIPMENT AND STRUCTURES, IN FIRST CLASS CONDITION AND REPAIR,-
ORDINARY WEAR AND TEAR EXPECTED, AND .IN ACCORDANCE WITH ALL APPLICABLE
PERMITS FROM GOVERNMENTAL AGENCIES, LAWS, RULES, ORDINANCES, ORDERS
AND REGULATIONS OF:
1. FEDERAL, STATE, DISTRICT, MUNICIPAL AND OTHER
GOVERNMENTAL AGENCIES AND BODIES HAVING OR CLAIMING JURISDICTION~
Z. ALL THEIR RESPECTIVE DEPARTMENTS, BUREAUS AND OFFICIALS;
3...THE INSURANCE UNDERWRITING BOARD OR INSURANCE INSPECTION
BUREAU HAVING OR C~AIMING JURISDICTION)·
~ 4. ~LL INSURANCE COMPANIES INSURING ALL OR ANY PART OF THE
LEASEHOLD PREMISES OR IMPROVEMENTS, INSTALLATIONS, OR FACILITIES.
LESSEE SHALL, HOWEVER, HAVE THE RIGHT TO CONTEST THE ABOVE ORDERS IN
,?'~.~E MANNER AND TIME PRESCRIBED BY THE ENTITY ISSUING THE ORDER.
L.~SSEE SHALL PROMPTLY AND DILIGENTLY REPAIR, RESTORE, AND .REPLACE AS
RE~URIED TO MAINTAIN OR COMPLY AS ABOVE, OR TO REMEDY ALL 'DAMAGE TO OR
DESTRUCTION OF ALL OR ANY PART OF THE IMPROVMENTS, INSTALLATIONS, OR
FACILITIES (HEREIN CALLED "IMPROVEMENTS") RESULTING WHOLLY OR IN PART
FROM CAUSES REQUIRED BY THIS LEASE TO BE COVERED BY FIRE OR EXTENDED
COVERAGE INSURANCE. IF THE REPAIRS, RESTORATION OR REPLACEMENT ARE FO
BE FUNDED BY INSURANCE PROCEEDS AS THE RESULT OF AN ACCEPTED CLAIM,
LESSEE'SHALL SUBMIT A SCHEDULE TO DISTRICT SHOWING THE DATE FUNDS ARE
ANTICIPATED AND THE DATE WORK WILL BE COMPLETED. THE COMPLETED WORK
OF MAINTENANCE, COMPLIANCE, REPAIR, RESTORATiON~ OR REPLACEMENT'SHALL
BE EQUAL .IN VALUE,'QUALITY AND USE TO THE'CONDITION OF THE
IMPROVEMENTS BEFORE .THE EVENT.GIVING RISE TO THE WORK, EXCEPT AS
EXPRESSLY PROVIDED TO THE CONTRARY IN THIS LEASE.
B. "MAJOR" AND "MINOR" REPAIRS. FOR THE PuRpOsE OF THIS
LEASE, WHEREEVER USED,.THE FOLLOWING WORKS SHALL HAVE THE MEANINGS
.STATED:
1. "'CONSTRUCTION COST" MEANS THE TOTAL ESTIMATED COST OF
THE WORK TO BE PERFORMED TO COMPLY WITH, THIS ARTICLE INCLUDING WITHOUT
LIMITATION THE COST.OF LABOR,'MATERIALS, ~ND REASONABLE PROFIT TO THE
GENERAL CONTRACTOR AND SUBCONTRACTORS, ALL UNDER THE MECHANICS LIEN
?"~NS IN EFFECT AT THE TIME THE WORK IS COMMENCED OR ANY DEMOLITION OR
~Y REMOVAL OF EXISTING IMPROVEMENTS OR PARTS OF IMPROVEMENTS AS WELL
,~ FOR PREPARATION, CONSTRUCTION, AND COMPLETION OF ALL NEW
IMPROVEMENTS OR PARTS OF IMPROVEMENTS. "
Z. "VALUE OF IMPROVEMENTS" IS THE LATEST AVAILABLE
APPRAISAL OF "FULL INSURABLE VALUE" OF THE IMPROVEMENTS AS DEFINED AND'
DETERMINED IN ARTICLE VIII - INSURANCE.
3.' "MINOR REPAIR" MEANS ANY REPAIRS, ALTERATIONS,
INSTALLATIONS OR ADDITIONS TO THE IMPROVEMENTS FOR WHICH THE
CONSTRUCTION cosT DOES NOT EXCEED TWENTY-FIVE (Z5%) PERCENT OF THE
.VALUE OF THE THEN CURRENT IMPROVEMENTS.
4. "MAJOR REPAIR" MEANS ANY REPAIRS,~ ALTERATIONS,
INSTALLATIONS OR ADDITIONS WHICH ARE. NOT DEFINED AS "MINOR REPAIR"..
C. APPROVALS BY DISTRICT. FOR ALL REPAIRS, LESSEE SHALL
CO~PLY WITH EACH AND EVERY CONDITION FOR CONSTRUCTION PROVIDED FOR IN
THIS LEA~E~ HOWEVER, FOR ANY REPAIRS TO THE INTERIOR OF STRUCTURES,
AND FOR M'INOR REPAIRS FOR WHICH THE CONSTRUCTION COST DOES NOT EXCEED
T~ENTY THOUSAND DOLLARS ($ZO,O00.O0), IN 19~5, INCREASED YEARLY BY THE
CONSUMER PRICE IN~EX FOR THE METROF'OLI~AN SAN FRANCISCO BAY AREA.
DISTRICT MAY RELEASE FROM ANY SUCH CONDITION ONLY UPON PRIOR WRITTEN
,'-'EQUEST FOR ~ELEASE FROM CONSTRUCTION CONDITIONS .SETTING FORTH EACH
ANV EVERY CONDITION FROM WHICH LESSEE SEEKS RELEASE.
D. ~AILURE BY LESSEE. IF, 'AT ANY TIME DURING THE TERM OF 'THIS
LEASB, LESSEE FAILS TO MAKE NECESSARY REPAIRS OR TO MAINTAIN THE
LEASED PREMISES, AFTER'RECEIVING A WRITTEN DEMAND UNDER THE PROVISIONS
[ ~F ARTICLE XIX ,~CLAIMS AND PROTEST, THE BOARD OF HARBOR COMMISSIONERS
~Y AUTHORIZE'DIsTRICT TO MADE OR CAUSE' TO BE NADE SUCH REPAIRS OR
~INTAINANCE AND THE COST THEREOF SHALL BE DEEMED TO BE A.PAYNENT DUE
'DISTRICT FROM LESSEE, PLUS INTEREST AT THE THEN CURRENT PRIME RATE AS
SET BY THE BANK OF AMERICA ON SAID DATE, AND THE TOTAL OF SUCH AMOUNT
SHALL BE PAID WITH'IN THIRTY (30) DAYS FROM DEMAND. "
.ARTICL·E'XXIII' - ~T OF ENTRY BY/PUBLIC ENTITIES
A. DISTRICT RESERVES THE RIGHT TO ENTER THE LEASED PREMISES TO
MAINTAIN AND REPAIR, REMOVE OR REPLACE, ADD TO OR GENERALLY IMPROVE
DISTRICTTOWNED IMPROVEMENTS; PROVIDED~ HOWEVER,,THAT SUCH ENTRY SHALL
NOT UNREASONABLY INTERFERE WITH LESSEE'S USE OF THE LEASED PREMISES.
WHERE PRACTICABLE, DISTRI,CT MUST GIVE LESSEE FIVE (5) DAYS WRITTEN
NOTICE IF SAID ACTIONS WILL IN ANY WAY DISRUPT [ESSEE"'S OR SUBTENANTS
OPERATIONS.
B. ~ESSEE-OWNED IMPROVEMENTS SHALL BE PLANNED TO PERMIT ENTRY
FOR MAINTENANCE AND REPAIR BY DISTRICT, AND DISTRICT WILL REIMBURSE.
LESSEE FOR PHYSICAL DAMAGES CAUSED BY DISTRICT TO LESSEE-OWNED
IMPROVEMENTS LOCATED ON .THE PREMISES ONLY IF SUCH DAMAGED LESSEE-OWNED
IKPROVEMENTS ARE LOCATED AND BUILT IN ACCORDANCE 'WITH PLANS AND
SPECIFICATIONS AS HAVE BEEN APPROVED BY' DI'STRICT.
· --- C. LESSEE'SHALL PERMIT ANY DISTRICT-AUTHORIZED PUBLIC UTILITY
]MPANY OR DISTRICT TO RUN GAS, WATER, SEWER, ELECTRIC OR TELEPHONE'
)NDUCTORS, PIPES, CONDUITS, OR DUCTWORK WHERE NECESSARY OR DESIRABLE
OVER, UNDER, OR THROUGH THE LEASED PREMISES IN A MANNER WHICH WILL. NOT
U~REASONABLY INTERFERE WITH THE'LESSEE'S USE OF THE LEASED PREMISES.
ARTICLE X×IV - DESTRUCTION ..
A. IF A TOTAL DESTRUCTION (THE RENDERING TO~ALLY uNuSABLE OF
FIFTY PERCENT (5OX), OR MORE OF LESSEE'S IMPROVEMENTS ON THE LEASED
PREMISES) OR A PARTIAL DESTSRUCTION (LESS THAN FIFTY PERCENT) OCCURS
TO LESSEE-OWNED IMPROVMENTS,' LESSEE SHALL WITHIN SIXTY (60) DAYS
THEREAFTER COMMENCE AND DILIGENTLY PROSECUTE TO,COMPLETION, ·
RECONSTRUCTION OR REPAIR, IN THE MANNER AND TO THE SAME EXTENT
REQUIRED UNDER ARTICLE XXIt - MAINTENANCE AND REPAIR; PROVIDED,
HOWEVER, THAT IF A 'TOTAL DESTRUCTION OCCURS DURING THE LAST FIYE' (5)
YEARS OF THE TERM OF THIS LEASE, THEN EITHER LESSEE OR DISTRICT SHALL
HAVE THE OPTION TO CANCEL THIS LEASE BY LESSEE OR DISTRICT SENDING
~;RI~TEN NOTICE OF CANCELLATION WITHIN THRITY (30) DAYS OF SUCH
DESTRUCTIpN.
B. DURING A PARTIAL DESTRUCTION OR TOTAL DESTRUCTION, ONLY AS TO
~HAT PORTION OF THE LEASED PREMISES ACTUALLY DESTROYED AND ONLY DURING
SUCH PERIOD OF ~DESTRUCTION~ MINIMUM ANNUAL RENT FOR SUCH PORTION SHALL
ABATED AND .THE THEN CURRENT MINIMUM ANNUAL RENT PRO~ATED AS A RATIO
~ RENTS RECEIVED BY LESSEE BEFORE THE DESTRUCTION TO THOSE AVAILABLE
LESSEE AFTER THE DESTRUCTION. PROVIDED HOWEVER, IN NO EVENT SHALL
'~.NE M]NINUH ANNUAL RENT ~E LESS THAN ONE-HALF OF THE AMOUNT OF ~HE
THEN CURRENT MINIMUM ANNUAL RENT... THERE SHALL BE NO PRORATION OF
PERCENTAG~ES OF GROSS RECEIPTS I.F THERE IS EITHER A PARTIAL DESTRUCTION
OR T~T~L DESTRUCTION.
'--' C. IF ANY OF. THE' LESSEE-OWNED IMPROVEMENTS ARE DAMAGED OR
ESTROYED BY ANY CASUALTY NOT CONTEMPLATED BY THE INSURANCE PROVISIONS
..; THiS LEASE, DISTRICT SHALL NOT BE LIABLE FOR DAMAGES OR OTHERWISE
FOR ANY LOSS OF DAMAGE SUSTAINED BY. LESSEE, AND IF THE LEASED PREMISES
ARE THEREBY RENDERED UNFIT FOR THE USES PRESCRIBED HEREIN, THIS LEASE
MAY BE CANCELLED BY EITHER'LESSEE OR DISTRICT~ BY EITHER OF sAID
LESSEE OR DISTRICT SENDING WRITTEN NOTICE OF CANCELLATION WITHIN
THIRTY'.(30) DAYS'OF SUCH EVENT. HOWEVER, IN THE EVENT LESSEE WISHES
TO REBUILD UTILIZING NEW FINANCIN~ DISTRICT SHALL NOT CANCEL THE
.LEASE FOR AT LEAST 180 DAYS, AND IN THE EVENT LESSEE PRODUCES EVIDENCE
THAT FINANCING WILL. BE FORTHCOMING, WILL COOPERATE TO ALLOW LESSEE TO
RETAIN THE LEASE AND REBUILD, OR' ELSE WILL ISSUE'A NEW LEASE WITH
SIMILAR TERMS AND CONDITIONS AS REQUIRED TO ALLOW REBUILDING.
ARTICLE XXV-REMOVAL OF' IMPROVEMENTS-AND OWNERSHIp UPON TERMINATION
'A. ALL IMPROVEMENTS CONS'TRUCTED ON THE LEASED PREMISES BY LESSEE
SHALL BE ON. NED BY LESSEE UNTIL EXPIRATION OR SOONER TERMINATION OF
THIS LEASE. LESSEE SHALL NOT, HOWEVER, REMOVE ANY IMPROVEMENTS FROM
THE LEASED PREMISES, NOR WASTE, DESTROY, OR MODIFY AND IMPROVEMENTS'ON
THE LEASED PREMISES,. EXCEPT AS PERMITTED BY THIS LEASE.
B. AT THE EXPIRATION, TERMINATION'O~ CANCELLATION OF THE LEASE~
LESSEE SHALL, WITHIN ·SIXTY (60) DAYS, AT ITS OWN EXPENSE, REMOVE ALL
"-']VABLE IMPROVEMENTS AND INSTALLATIONS OF ANY KIND OWNED OR PLACED ON
~E LEASED PREMISES BY-LESSEE, AND SHALL LEAVE THE LEASED PREMISES IN
,. JBSTANTIALLY THE SAME CONDITION AS WHEN FIRST OCCUPIED BY LESSEE.
MOVABLE iMPROVEMENTS AND INSTALLATIONS ARE DEFINED AS THOSE
IMPROVEMENTS AND INSTALLATION, INCLUDING FURNITURE~ EQUIPMENT,
APPLIANCES, POTTED AND TUBBED PLANTS AND THE LIKE, WHICH ARE NOT
ATTACHED OR FASTENED TO' THE GROUND OR DECK OR FLOOR OF A STRUCTURE OR
BUILDING. DISTRICT, HOWEVER, MAY ELECT AT THE EXPIRATION,
TERMINATION~ OR CANCELLATION OF THIS LEASE TO NEGOTIATE WiTH LESSEE TO.
ACQUIRE LESSEE'S MOVABLE IMPROVEMENTS AND INSTALLATIONS OR ANY PART
THEREOF. IF DISTRICT DESIRES TO PURCHASE SAID MOVABLE ITEMS, IT SHALL
SEND'WRITTEN NOTICE OF SUCH ELECTION WITHIN TEN (10) DAYS AFTER THE
DATE OF SUCH NOTICE, REMOVE ALL SUCH IMPROVEMENTS AS ABOVE PROVIDED.
C. ALL BUILDINGS~ STRUCTURES, IMPROVEM~'NTS AND FACILITIES
CONSTRUCTED OR PLACED NITHIN THE LEASED PREMISES BY LESSEE, 'WHICH ARE
ATTACHED OR FAS'~ENED TO THE GROUND OR DECK OR FLOOR OF A STRUCTURE ON
THE DATE OF TERMINATION SHALL BECOME THE PROPERTY OF DISTRICT AT THE
EXPIRATION OF THIS LEASE OR UPON EARLIER TERMINATION THEREOF.
'D. .IF LESSEE DOES NOT REMOVE, OR HAS NOT COMPLETED REMOVAL OF
ITS MOVABLE IMPROVEMENTS AND INSTALLATIONS, AS PROVIDED HEREIN, TITLE
THERETO SHALL VEST IN DISTRICT, AND DISTRICT. MAY REMOVE OR CAUSE ~0 BE
REHOVED OR SOLD OR DESTROYED, THE MOVABLE IMPROVEMENTS AND
'"','STALLATIONS ON THE LEASED PREMISES, AND LESSEE SHALL*PAY 'fO DISTR]CT
~IE REASONABLE AND ACTUAL COST OF ANY SUCH REMOVAL, SALE OR
DESTRUCTION, ·IN E~CESS OF ANY CONSIDERATION RECEIVED By'DISTRICT AS A.
RESULT.O~ SAID SALE, REMOVAL OR DEMOLITION.
&
A. UPON.RECEIPT OF ANY NOTICE. THAT CONDEMNATION PROCEEDINGS ARE
BE INSTITUTED OR UPON SERVICE OF PROCESS IN ANY CONDEMNATION
'r~OCEEDING, LESSEE AND LENDER SHALL BE IMMEDIATELY NOTiFI~D IN WRITING
AND WITHIN TWENTY (ZO) DAYS AFTER SAID NOTICE, LESSEE SHALL' DISCLOSE
TO.DISTRICT ALL FACTS PERTAINING TO THE PROBABLE FUTURE WORTH. OF
LESSEE'S INTEREST IN THE LANDS SUBJECT.TO THE'CONDEMNATION.
B.' UPON THE TAKING. OF ALL Od'PART Of THE LEASED PREMISES BY
CONDEMNATION OR THREAT THEREOF, LESSEE'S RIGHT TO SHARE IN
COMPENSATION OTHERWISE PAYABLE .TO THE LEssOR SHALL BE AS FOLLOWS:
1, WHOLE TAKE.· THIS LEASE SHALL TERMINATE ON THE DAY OF
TRANSFER 'OF TITLE OR POSSESSION TO THE.CONDEMNING AGENCY, WHICHEVER IS'
FIRST. ANY AND ALL EMINENT DOMAIN OR CONDEMNATION AWARDS OR DAMAGES
OR SETTLEMENT MONIES SHALL FIRST BE APPLIED TO LESSOR'S INTEREST IN
THE LAND TAKEN, VALUED AS IF uNENcUMBERED, AND SHALL THEN BE APPLIED
IN PAYMENT OF THE THEN OUTSTANDING BALANCE,-IF·ANY, OF THE LOAN MADE
TO LESSEE'BY ENCUMBRANCER, AND THE BALANCE OF SUCH MONIES, IF ANY,
SHALL BE APPLIED TO LESSEE'S INTEREST IN THE LEASEHOLD AS FOLLOWS,
LESSEE SHALL ASSERT NO CLAIM FOR LOSS OF BONUS VALUE BUT MAY RECOVER
PREPAID RENTS AND SECURITY DEPOSITS, iF ANY, AND THE THEN PRESENT
WORTH OF' REMAINING LIFE OF THE BUILDINGS OR LEASE, AND USE OF
LEASEHOLD FIXTURES AND IMPROVEMENTS INSTALLED BY LESSEE WITH.THE
,.I~ISTRICT'S WRITTEN CONSENT. BONUS VALUE IS DEFINED AS THE EXCESS OF
AIR RENTAL VALUE OVER CONTRACT RENT.
PARTIAL TAKE LEAVING REMAINDER UNUSABLE FOR'LEASEHOLD
PURPOSE. LESSEE MAY'ELECT TO TERMINATE THIS LEASE AS OF DATE OF
TRANSFER OF TITLE OR POSSESSION OR THE AWARD AND APPORTIONMENT OF
AWARD, WHICHEVER IS EARLIER, AND THE LESSEE'S COMPENSATION SHALL"BE
THE SAME AS IN A WHOLE TAKE. IF LESSEE DOES NOT TERMINATE,
COMPENSATION SHALL BE AS IF THE REMAINDER IS USUABLE.
3. PARTIAl. TAKE LEASING REMAINDER USABLE FOR LEASEHOLD
PURPOSE. LESSEE SHALL ASSERT NO CLAIM FOR LOSS OF BONUS VALUE OR
OBLIGATION TO PAY FUTURE RENTS. LESSEE MAY RECOVER THE THEN VALUE OF
THE REMAINING USE OF LEASEHOLD FIXTURES AND IMPROVEMENTS INSTALLED BY
LESSEE ON THE PART TAKEN WITH THE DISTRICT'S ERITTEN CONSENT; THEN IF
THE REMAINDER'S FAIR RENTAL VALUE WILL BE LESS 'THAN THE RENT REQUIRED
UNDER THIS LEASE, LESSEE MAY ELECT TO HAVE THE RENT REDUCED TO A FAIR'
'RE~TAL VALUE FROM AND AFTER THE DATE OF TRANSFER OF TITLE OR
PGSSESSION, WITH RESULTING ADJUSTMENT OF THE SECURITY DEPOSIT.
C. LESSEE MUST.GIVE NOTICE TO LESSOR OF ANY OF THE ABOVE
ELEC'rION~ WITHIN FORTY-FIVE (45) DAYS AFTER OBTAINING KNOWLEDGE OF THE
i~PENDING AcquISITION.
LESSEE WILL BE DEEMED TO HAVE KNOWLEDGE ~F THE IMPENDING
C~UISITION QN HIS ENTRY INTO NEGOTIATIONS WITH THE CONDEMNING
GENCY'S REPRESENTATIVES, ON RECEIPT OF SERVICE OF. COMPLAINI AND
· .'~UMI~ONS, OR O~DER FOR IMMEDIATE'POSSESSION, OR ON RECEIPT OF A LETTER
~F INQUIRY FROM THE DISTRICT ADVISING LESSEE OF THE IMPENDING
-34-
ACQUISITION AND R~QUEST~NG NOTICE OF LESSEE'S RESULTING ELECTIONS AND
CONTENTIONS. 'LENDER AND LESSEE HAVE THE RIGHT TO PARTICIPATE IN ANY
AND AL~,ASPECTS OF THE CONDEMNATION PROCEEDINGS.
' Z. LESSEE'S NOTICE SHALL'CONTAIN A.CLEAR AND UNEQUIVOCAL
-"~'ATEMENT OF HIS ELECTION UNDER SUBPARAGRAPH. B ABOVE, REASONS FOR THIS
_ECTION, LESSEE'S CONTENTION OF COMPEN'SATION, AND/OR THE REMAINDER'S
~IR RENTAL VALUE AND REASONS.FOR THESE CONTENTIONS.
'3. TIME. IS :OF THE ESSENCE .AND .THE EXPRESS PURPOSE OF THE
REQUIRED NOTICE OF ELECTION~ CONTENTIONS~, AND'REASONS IS SO THE ~
DISTRICT MAY RELY ON.'THEM IN NEGOTIATIONS OR LITIGATION WITH THE
CONDEMNING AGENCY. ~
4. LESSEE'S CONTENTIONS SHALL NOT BE CONCLUSIVE'AS TO THE
AMOUNT OF COMPENSATION, OR USABILITY, OR FAIR RENTAL VALUE OF THE
REMAINDER, AND ANY DISPUTE OF THESE ISSUES SHAL~ BE RESOLVED BY
ARBITRATION IN ACCORDANCE WITH THE RULES AND PROVISION OF THE'AMERICAN
ARBITRATION ASSOCIATION..
D. -LESSEE'S FAILURE TO GIVE NOTICE oF ELECTION, CONTENTIONS, AND
REASONS SHALL CONSTITUTE A WAIVER OF ALL RIGHTS TO COMPENSATION AND/OR
REDUCTION'OF RENT AND, IN THE EVENT OF A PARTIAL TAKING, RENT SHALL
CONTINUE THROUGHOUT THE REMAINING TERM AND IN THE FULL AMOUNT PROVIDED
HERE.
ARTICLE XXVII - CAPTI0~.
THE TITLE.OF HEADINGS OF THE ARTICLES AND SUBARTICLES OF THI~ LEASE
F.jE NOT A PART OF THIS LEASE AND~SHALL HAVE NO EFFECT UPON THE
NSTRUCTION OR INTERPRETATION Or ANY PART THEREOF. .-
'~RTICLE XXVIII - SAVINGS CLAUSE, .:"
'.IF 'ANY PROVISION OR PROVISIONS OF THIS LEASE 'ARE FOR ANY REASON
ADJUDGED TO BE UNENFORCEABLE OR.INVALID, IT IS THE SPECIFIC INTENT OF
THE PARTIES THAT THE REMAINDER SHALL SUBSIST, BE, AND REMAIN IN FULL
FORCE AND EFFECT.'
ARTICLE XXIX - LIMITATION OF.LEASEH~
THIS LEASE, AND THE RIGHTS AND PRIVILEGES GRANTED LESSEE TO THE LEASED
PREMISES, A~E SUBJECT TO ALL COVENANTS, CONDITIONS~ RESTRICTIONS AND
AND EXCEPTIONS OF RECORD OR APPARENT, INCLUDING' THOSE NH1CH ARE SET
OUT IN THE HARBORS AND NAVIGATION CODE OF THE STATE OF CALIFORNIA.
NOTHING CONTAINED IN THIS LEASE, OR IN ANY DOCUMENT RELATED HERETO,
SHALL BE CONSTRUED TO IMPLYTHE CONVEYANCE TO LESSEE OF ANY RIGHTS
~HICH 'THE DISTRICT DOES NOT HAVE PO~ER TO CONVEY.
ARTICLE X~X - E~B~E MAJEURE
IF EITHER PARTY HERETO SHALL BE DELAYED OR PREVENTED FROM THE
PERFORMANCE OF ANY ACT REQUIRED HEREUNDER BY REASON OF~ACTS OF'GOD,
"*"E~TR'ICTIVE ~OVERNMENTAL LAWS OR REGULATIONS, OR 0THER'CAUSE NITHOUT-
AULT AND BEYOND THE CONTROL OF THE PARTY OBLIGATED, FINANCIAL
,,_,NAB!LITY EXCEPTED, PERFORMANCE OF SUCH ACTS SHALL BE EXCUSED FOR THE
PERIOD OF THE DELAY, AND THE PERIOD FOR THE PERFORMANCE OF ANY SUCH
' ~
-3.5-
ACTS SHALL BE EXTE'NDED FOR A PERIOD EQUIVALENT TO THE-PERIOD OF SUCH
DELAY. NOTHING IN THIS CLAUSE,· HOWEVER, SHALL EXCUSE LESSEE FROM THE
PROMPT~P&YMENT'OF ANY RENTAL OR OTHER CHARGE REQUIRED BY LESSEE~
E%CEP~ RS MAY BE EXPRESSLY PROVIDED ELSEWHERE IN THIS ARTICLE.
r~.~TICLE XXXI - HOLDING OV~B.
I THE EVENT LESSEE SHALL HOLD OVER AFTER THE TERM HEREIN 'GRANTED'WITH
"~HE CONSENT OF THE DISTRICT, SUCH HOLDING OVER SHALL BE A TENANCY FROM
~ONTH TO MONTH AND SHALL BE GOVERNED BY THE TERMS, CONDITIONS AND
COVENANTS CONTAINED IN THIS LEASE.
ARTICLE XXXII - DISTRICT'S RIGHT TO RETENTER
LESSEE AGREES TO YIELD AND PEACEFULLY DELIVER POSSESSION OF THE LEASED
PREMISES ON THE DATE OF' TERMINATION OF THIS LEASE, WHATSOEVER THE
REASON FOR SUCH TERMINATION. UPON GIVING WRITTEN NOTICE OF
TERMINATION TO LESSEE, THE DISTRICT SHALL HAVE THE RIGHT TO RE-ENTER
AND TAKE POSSESSION OF THE LEASED PREMISES ON THE DATE SUCH
TERMINATION BECOMES EFFECTIVE, WITHOUT FURTHER NOTICE OF ANY KIND.
TERMINATION OF THE LEASE AND RE-ENTRY OF THE LEASED PREMISES' BY
DISTRICT SHALL IN NO WAY ALTER OR DIMINISH ANY OBLIGATION OF LESSEE
UNDER THE .LEASE TERMS AND SHALL NOT CONSTITUTE AN ACCEPTANCE OR
SURRENDER.'
LESSEE WAIVES ANY AND ALL RIGHT OF REDEMPTION UNDER ANY EXISTING-
OR FUTURE LAW OR STATUTE IN THE EVENT OF EVICTION FROM OR
DISPOSSESSION OF THE LEASED PREMISES FOR ANY REASON, OR IN THE EVENT
DISTRICT RE-ENTERS AND TAKES POSSESSION OF THE LEASED PREMISES IN A
J-~WFUL MANNER.
[TICLE XXXII.I - AMENDMENTS
'[HIS' LEASE SETS FORTH ALL THE AGREEMENTS AND UNDERSTANDINGS 'OF THE
PARTIES, AND ANY MODIFICATIONS MUST BE IN WRITING.
ARTICLE XXXIV - yIME
TIME IS OF THE ESSENCE OF THIS LEASE.
ARTICLE XXXV - UTILITIES
~AIN UTILITY LINES, INCUDING SEWER, WATER, GAS, TELEPHONE AND' -
ELECTRICITY TO THE DEVELOPMENT OF WHICH THE LEASED PARCEL IS &
PORTION, SHALL BE CONSTRUCTED BY DISTRICT. 'CONSTRUCTION OF UTILTIES .
WITHIN THE LEASED PREMISES SHALL' BE THE RESPONSIBILITY OF LESSEE.
DISTRICT RESERVES THE RIGHT TO EX-~END ANY MAIN UTILITY LINE
CONSTRUCTED BY THE LESSEE FROM THE LEASED PREMISES FOR THE CONVENIENCE
OF THE DISTRICT OR OTHER LESSEES OF THE DISTRICT.
ARTICLE XX×VI - ANTI-DiSCRIMINATION
LESSEE AND/OR ITS SUBTENANTS SHALL NOT DISCRIMINATE AGA~INST ANY MEflBER
.~ THE PUBLIC UTILIZIN~ LESSEES (OR SUBTENTANTS) SERViE~ES OR
ICILITIES, OR AGAINST ANY EMPLOYEE OR APPLICANT FOR EMPLOYMENT~
[CAUSE OF AGE, RACE, RELiGION~ COLOR, CREED, NATIONAL ORIGIN~
'~TNCESTRY, SEX,. OR SEXUAL PREFERENCE. THE LESSEE SHALL TAKE
-36-
AFFIRMATIVE ACTION~ TO ENSURE THAT- APPLICANT~ ARE EMPLOYED AND THAT
EHPLOYEES ARE'TREATED, DURING EMPLOYMENT, WITHOUT REGARD TO THEIR AGE,
RACE, ~E~IGION~: COLOR, CREED, NATIONAL ORIGIN~ ANCESTRY, SEX OR SEXUAL
P~EFER~CE, WITH THE GOAL THAT THE ETHNIC COMPOSITION OF THE
POP~L~TION OF THE.DISTRICT. SUCH ACTION SHALL INCLUDE, BUT NOT
MITED TO,' EMPLOYHENT, UPGRADING, DEMOTION OR T~ANFER, RECRUITMENT,
,YOFF OR TERMINATION, RATE OF PAY OR OTHER FORMo OF coMPENoA~ION AND
iLECTION FOR TRAINING. LESSEE SHALL CONrLY WITH THE E~U~L
~PORTUNITY REQUIREMENTS OF EXECUTIVE ORDER 11~4&,.TITLE VII, OF THE
CIVIL RIGHTS ACT OF 1.~4,. THE CALIFORNIA FAIR EMPLOYMENT PRACTICE ACT~'
AND' OTHER FEDERAL~ STATE~, MUNICIPAL OR DISTRICT. LAWS. OR'ORDINANCES
RELATING TO E~UAL EMPLOYMENT OPPORtUNItY.' LESSEE AGREES TO SUBMIT ANY
CERTIFICATE OF COMPLIANCE WITH SAI~D STATUTORY PROVISIONS UPON DEMAND
BY DISTRICT.
FAILURE TO COMPLY WITH THIS ARTICLE SHALL CONSTITUTE A BREACH OF
THE 'LEASE, FOR WHICH THE LEASE MAY BE TERMINATE~ IN ACCORDANCE WITH
THE PROVISIONS HEREOF. ..
·
ARTICLE XXXVII - DEFINITIONS .
THE DEFINITIONS OF TERMS SET FORTH IN THE DOCUMENTS ENTITLED."DESIGN
CRITERIA F'OR CONSTRUCTION BY LESSEES OF THE SAN MATED COUNTY HARBOR'
DISTRICT 19SO"(EXHIBIT B),' WHICH HAS HERETOFORE BEEN INCORPORATED AND
HADE A PART OF THIS LEASE~. SHALL BE APPLICABLE TO THE TERMS'AND ·
PROVISIONS HEREOF~
ARTICLE XXXVIII - DISPUTES.
~Y 'AND ALL DISPUTES REGARDING THE,TERMS AND CONDITIONS OF THESE LEASE
)CUMENTS OR THE PERFORMANCE OF ANY PARTY TO THIS LEASE, SHALL BE
~VERNED BY THE LAWS OF ]'HE STATE'OF CALIFORNIA AND RESOLVED BY A
COURT OF COMPETENT JURISDICTION THEREIN, EXCEPT AS PROVIDED IN ARTICLE
V HEREIN REGARDING ADJUSTMENT .OF RENT. NOTWITHSTANDING ANY OTHER
PROVISION OF THE LEASE OR LEASE GENER'AL CONDITIONS TO THE CONTRARY,
THE NOTICES SERVICE OF PROCESS ETC., REQUIRED. UNDER THiS LEASE SHALL
BE SENT OR DELIVERED TO THE DESIGNATED PERSON AND TO THE ADD'R~SS SHOWN
IN ARTICLE VIII OF THE LEASE, WHETHER OR NOT IN. CONFORMANCE WITH
SUBPARAGRAPH F. OF ARTICLE VIII.'·
ARTICLE XXXIX - LEGAL ACTION
IF LEGAL ACTION IS INSTITUTED TO ENFORCE THIS LEASE OR IS' BASED UPON
ANY CLAIM ARISING OUT OF OR PURSUANT TO THE TERMS DE THIS, THEN THE
PREVAILING PARTY IN SAID LITIGATION SHALL BE AWARDED REASONABLE
.ATTORNEY'S FEES AND COSTS OF SUIT.
ARTICLE XXXX - NOTICES
NOTICES R~QUiRED HEREUNDER SHALL BE DEEMED TO HAVE BEEN RECEIVED WHEN
ACKNOWLEDGED TO BE RECEIVED BY RECIPIENT EITHER THROUGH SIGNATURE OR
REGISTERED, CERTIFIED, EXPRESS HAIL OR DELIVERY SERVICE OR WHEN
PERo~NALLY DELIVERED TO A REPRESENTATIVE OF THE PARTY ·
LEASE
PARCEL. D
THIS LEASE is made and entered into bY and
between the SAN MATEO COUNTY HARBOR DISTRICT, a polit~
ical subdivision of the State of California, hereinafter
called "Lessor" or "District," ~nd OYSTER POINT VILLAGE
.ASSOCIATES, INC., a California corporation, hereinafter
'called "Lessee."
· The parties agree that:
ARTICLE I _ LEASE DOCUMENTS. This lease
these specific provisions together with the
includes
attached General Conditions and. the following documents,
which are also attached'hereto and all are made a part
hereof:
A. Exhibit' A: Legal description an~ drawing
of Parcel D (also known as a portion of Parcels 2 and
in the Specific Plan attached hereto as Exhibit
B. Exhibit B: The booklet entitled "Design
Criteria for Construction by Lessees of the San Mateo
County Harbor District - 1980."
C.' The booklet entitled "Oyster Point Marina
Specific Plan'f dated September, 1983, as approved by the
City of South San Francisco on September 7, 1983,
P~solu{ion 124-83.
ARTICLE II - PROPERTY LEASED. Distr~ct hereby
leases to Lessee and Lessee hereby rents from District
the property located in the City of South San Francisco,
COunty of San ~ateo, State of California, descrlbe4 as
follows: The
premises described in Exhibit A known as
Parcel D, located at Oyster Point Marina/Park, South San
Francisco, California, consistin§ of approximately 4.887
acres of land.
ARTICLE III - TERM. .The term of this lease
· shall be twenty-five (25) yea~s, co~encing on t~ first
day of the calendar mont~-fellm~n~the day o~ execution
of this Lease by District. However, Lessee has the
~ption. to renew or extend ~his lease for an additional
twenty-five (25) years, exercisable at any .time after
execution of this Lease by District in accordance with
Article IX herein.
ARTICLE IV - USES AND SERVICES. With respect
to Parcel D, in conjunction with the lease on Parcel
but not conditioned upon said other lease, Lessee shall
develop, construct, and operate (or cause to be con-
structed and/or operated) a commercial, vtllaEe-sty.le
complex, the Parcel D portion of whTch shall include, in
accordance with Lessee's proposal dated June 10, 1983,
at least one (1) dinner restaurant with a -cocktail
lounge and related facilities, having a mini~3m space of
6,000 square feet, parking for a minimum of eighty-eiEht
(88) cars and !andscaping, and shall include, if not
already a substantial part of the on-Eotng ~nd estab-
lished uses of' Parcel B, a coffee shop, boat sales,
2
specialty
shops and retail uses, and may include any
use,. or "combination of uses, specifically allowed for
this area by the rems of the Oyster Point ~Marina
Specific..Plan, attached hereto as Exhibit C. Lessee
shall endeavor to include uses authorized for Parcel B
if not already a part of the use of Parcel B.
Lessee is specifically granted the continuing
· option to use any of the leased premises, for a package
liquor store, gift shop, delicatessen, beauty shop, fast
food store, barber shop, bar, offices and/or bait and
~ckle shop.
A. Lessee shall provide on the leased
premises all equipment requifed' for the operation of
said facilities. 1
B. No other uses are permitted except with
the prior written consent of the District.
ARTICLE V - OPERATING SCHEDULE AND CONTROLLED
PRICES.
A. OperatinR Schedule. Except as otherwise
approved by District in advance of execution of this
Lease, and in writing, beginning on the date the 'facil-
ities are first .offered for use by the general public,
all of the non-office uses and services specified
Article IV - USES A~ SERVICES herein, shall be provided
with full services on leased premises during regular
business hours not less than six (6) days each week of
.3
the lease term. Lessee shall provide District with a
schedule'.of Operating hours.
B. Controlled Prices. Lessee shalI,.at all
times, maintain a schedule of the.prices charged for all
goods or services or combinations thereof .supplied to
the pubiic on or from the leased premises, whether the
s~me are supplied by Lessee .or by. its sublessees,
.assignees, concessionaires, permittees, or licensees,
'and shall make said'schedule available to District.
· Ail rates and charges to patrons served on or
~rom the leased premises shall be reasonable and'consis-
tent with the quality of services and facilities offered
and shall be no more than rates'and charges for compa-
rable 'services and facilities in Northern California]i
Pursuant to the provisions of Section 72.2 of
·
the .California Harbors and Navigations Code, Lessor
hereby reserves to itself the power to fix and determine
the rates to be charged by the Lessee for the use by the
public of any and 'all facilities developed by Lessee
under this Lease.
ARTICLE VI -.IMPROVE~NTAND INVESTMENTS.
A, Lessee shall cause to be designed,
constructed and installed on the leased premises, at no
cost to District, any and all buildings and other
improvgments, in the. manner and in the time approved by
the District during the option period preceding exe-
cution of this ~ease, for all uses specified herein and
any optional services or uses planned for the leased
premises by Lessee and approved by the District.
Improvements shall include equipment and inst~lla~fou,
B. In 'addition to maintenance ~nd repairs
required pursuant to General ConditiOns of this Lease,
the Lessee shall maintain the premises in accordance
with standards imposed by the State of California'
..Regtonai Water Control Board. .
C. All design and construction shall confom
with the requirements as set forth in the Design Cri-
t~ria booklet adopted by District, attached hereto ms
Exhibit B, and all applicable codes and ordinances
including but not .limited to, ~istrict, 'City,
State' and Federal'. Construction shall be commenced
within.three hundred sixty (360) days after executic~of
this' Lease or as otherwise approved in writin&
District durinE the option period preceding executio~
this Lease, or as agreed in writing, thereafter.'-
construction schedule shall follow the requtremen~s'-'Qf
the Design Criteria, Exhibit B, however, said
struction may be in two (2) phases, with
dates no later than November 30, 1986, and Novembmr ~,
1987, respectively. Construction and related pro~e¢~
costs on that portion of the complex requtre~ in
lease shall not be less than Three Million Sf~
Eighty-Five Thousand and No/100 Dollars
5
ARTICLE VII - LEASE RENTS AND GROSS RECEIPTS.
Lessee shall pay to District the minimum rents or the
percentage rental as set forth herein and in Article V
of the General Conditions of this Lease, whichever is"
greater.
A. Minimum Annual Rent.
(5) years of the lease term, ~he
shall be in accordance with the following schedule:
For the first five
minimum annual rent
Year Rent
1- $12,075.00
2 $24,150.00
3 $48,300.00
4 $48,300.00
5 $48,300.00
After the fifth (Sth) year of the lease term, the
mtntmum annual rent shall be adjusted in accordance with
the provisions of Article V of the General Conditions of
~ercentaKe Rent.
I. In addition to the minimum annual
rent, Lessee shall pay the -mount by which the total of
the percentage of gross receipts specified in San Marco
County Harbor District Ordinance Code §3.803 and 'as
exceed the minimum annual rent set forth
this Lease.
B.
Business
Sale of food and non-alcoholic
beverages sold in restaurants
and coffee shop, fast food sales
~ercentaRe
follows,
herein~
6
and delicatessen.
Sale of alcoholic beverages (when
connected with food sales or
through a package liquor store).
Sale'of alcoholic beverages'(as
separate bar).
Boat sales.
Rental of meeting rooms,
Chandlery. '
All other sales.
Rental for subleased office space
not involving retail sales.
3%
3Z
IZ
5%
5%
5z throu e'u '
of 9th year
8% through end
of 25th year
10% thereafter
2. Cross receipts are the gross income
derived, received, or charged by any sublessee, 'sub-
tenant, concessionaire, licensee,' or any other person,
firm or corporation (herein called "subtenant"~, or by
Lessee, for sales, charges for service, for the use of
space made in or on the leased premises, or from any and
all sources of income derived in w~ole or in part from
any business transacted in, at or from the 'leased
premises, whether from subtenants, customers, or other-
wise,'both for cash and on credit, and in cases of sales
credit, whether or not payment is actually
or charges on
made.
limitation,
Cross receipts shall include,
a. Deposits not refunde~;.
without
leased premises
b. Orders taken on or from the
to be filled or paid for elsewhere;
c. Sales or charges for all
services performed, whether such sales are made or such
?
services are rendered at or arranged through ~he occu-
pied space at the leased premises by lonE distance
performed'.
communication 'and whether .initiated,
· 'comPleted at another location;
d. Considerations
Lessee for
subtenants,
~ or
value directly from
including subrents;
received by
customers, and from
Each sale or charge for services or use
of space on credit or in installments shall be treated
as a sale or charge for'the whole price for the calendar
year in which the sale or charge is made whether or not
any payments are made within that year.
3. The following matters only may be
excluded or deducted from Gross Receipts at the time
they are ascertained, and where not ascertainable during
the period covered by a statement of Gross Receipts,
then from the time of a subsequent statement when they
are known:
retained by employees
Gratuities such as ·"tips"
of Lessee or subtenant for their
personal benefit;
b. Ail sums collected a~d paid out
for sales taxes; luxury taxes, excise taxes, and similar
8
taxes required by law to be added to the total purchase
price, whether now or hereafter in force, to be col-
lected froTM customers and paid by Lessee or subtpnant;
c. Merchandise transferred or
exchanged.between other stores or warehouses'owned by or
affiliated with Lessee or any subtenant, if such trans-
fers or exchanges are made solely for' the convenient
operation of Lessee"s or subtenant's business and not
for the purpose of consummating a sale previously m~de
at, on, or from the leased premises or for the, purpose
~f depriving District from the percentage of Gross
Receipts of a sale that otherwise would be made at, on,
or from the leased premises;
d. Merchandise
pets or manufacturers;
returned to ship-
e. Ail refunds made on any sale or
charge for service or use of space previously included
as Gross Receipts;,
f. All cash or credit received in
settlement of any claims for loss or damage;
E- Gift certificates or like
vouchers, if not issued for value, until the time they
have been converted into a sale by redemption;
h.. Bulk sales made by Lessee or
subtenant not in the ordinary course of business and
subject to prior written approval of District;
9
i. Any income or receipts, under
generally accepted accounting principles, which are
derived from the sale or disposal of any capital, assets
(excluding any assets normally sold in the course of
business conducted on the leased premises)'or fro~ the
retirement of any indebtedness, or from Lessee's or'
subtenant's investments of any funds not invested in the
.leased premises or the operation of Lessee's or sub-
'tenant's business on the leased premises;
j. Percentage rent collected by
~essee from subtenants for District's benefit.
None of the .above exclusions or deductions
from Gross Receipts shall be excluded or deducted if in
substance it is a typical sale, charge for service, or
other source of gross income which is ordinarily the
subject of percentage rent, but arranged only ~o avoid
such rent, or if actually contracted for elsewhere on
other premises such as typical sale, charge for service,
or other source of gross income which is ordinarily the
subject of percentage rent, and such saIe,, charge for
service, or other gross income is for the Lessee's or
subtenant's business benefit.
C. Payment of Rent.
1. Minimum Rent. Minimum annual rent
(adjusted or unadjusted) shall be due and payable in
advance in equal monthly installments on. or before the
%
first day of each month of the term of this Lease.
2. percentaRe Rents. At the end of each
quarter .of the year (i.e., March 31st, June 30th,
September 30th and December 31st), percentage rentals at
the rates hereinabove described 'of gross receipts shall
be computed for the prior quarter and the difference
between the minimum annual rent for said quarter and the
percentage rent for said quarter shall be du~ and
payable on the fifteenth (15th) day following the end of-
said quarter.
The percentage rent schedule based upon
gross receipts shall be recomputed at the end of each
year using the applicable percentages and the balance of
rents as computed for each year shall be due 'and payable
on or before March 30th of the following year. Any
overpayment of rent shall be credited toward future
rents.
ARTICLE VIII - NOTICES AND PAYMENTS. Ail
notices and communications required under this Lease
shall be in writing, and all notices and payments shall
be made as follows:
A. All payments and notices to Lessee shall
be given or mailed to:
Ms. Marti Christoffer
Oyster Point Village Associates, Inc.
1670 Pine Street
· San Francisco, California 94109
B. All payments and notices to District
shall be given or mailed to:
11
General Manager
San Mateo County Harbor District
~1 Johnson Pier.
Half Moon Bay, California 94019
to such 'person as
writing.
D. Any
To Enc,,m~rance Holder at such address and
it shall designate- to District in
fpllowing
Article·
party may designate a different
address by giving notice as set ~orth in this Article.
E. All notices and communications referred
to herein shall be deemed given on the fifth (bth) day
mailing if given in accordance with this
F. If Lessee is not a resident ofthe County
of San MarCo or is an association or partnership without
a member or partner resident of said County, or is a
foreign corporation, Lessee shall file with District a
designation of natural person residing in the County of
San Marco, State of California, giving his or her name,
residence and business address as the agent of Lessee
for the service of process in any court action between
Lessee or Encumbrance Holder and District, arising out
of or based on this lease, and the :delivery to-such
agent of written notice or a copy of any process in such
action shall Constitute a valid service upon Lessee.
· ARTICLE IX - OPTION TO RENEW. District grants
Lessee the option to renew this lease for a further
period of twenty-five (25) years from the ~xpiration
date of the 'original term, upon the same terms and
12
conditions 'as set forth herein. Said option to renew
this Lease shall be exercised in writing and provided to
the District at any.time between execution of this Lease
by-District and six (6) months prior to the expiration
of the first term, and shall be effectiVe Whe~' the
exercise of said option is received by the
notice Of
DistriCt.
The parties recognize and acknowledge that the.
'District, as Lessor, is a party to a Joint Powers
Agreement with the City of South San Francisco which
governs the District's authority and power with respect
to the Oyster Point Marina/Park. Said Joint Powers
Agreement was effective on November 11, 1977 and con-
tinues' in full force and effect for a period of for-
ty-nine (49) years from that date until modified or
terminated'by an agreement in writing between the City
and the District. Although proposals have been made and
negotiations.are under way with respect to revision of
said Joint Powers Agreement, interpretation of- that-
document may result in a finding or determination that
the District, as Lessor, cannot enter into a lease for
the Oyster Point Harina/Park premises for a term which
exceeds the termination of the Joint Powers Agreement,
which is currently November 10, 2026.
is determined that the City's approval
this lease to extend a full fifty (50)
option to renew),
Therefore, if it
is required for
years ~including
and the City of South San Francisco
has refused
lease, the
to give their approval of the terms of this
term of this lease shall automatically be
modified to end on November 10, 2026.
ARTICLE X - APPROVAL BY DEPARTMENT OF BOATING
AND. WATERWAYS° Award of this Lease by District is
subject to the final approval by the California Depart-.
merit of Boating and Waterways ("Cai-Boating,), and award
of this Lease by District shall become final only after
'award has been approved by said Department. If the
Lease is not so approved by Cai-Boating, through no
fault of the Lessee, the option purchase price shall be
refunded in full to Lessee.
LESSEE
· OYSTER POINT VILLAGE ASSOCIATES, INC.
Dated: / B
(Corporate Resolution Attached)
DISTRICT
SAN }~TEO COUNTYHARBOR DISTRICT
Dated:
Ronald D. McClellan
General Manager
of
The"foregoing Lease is approved this · 1984.
day
STATE OF CALIFORNIA
DEPARTMENT OF BOATING AND WATERWAYS
·
STATE OF CALIFORNIA
-.
COUNTY OF SAN MATEO
year /~ , before me
N~ar~ Publi~ ~rs~nally appeared ' '
~~ ~CC/~//~ , ~o~ to me to be the
~F~/ ~~~ of ~h~ ~an Hateo Cowry Harbor
Distrlct, ~' political subdzvmsxon of the State of
Califo~ia, and kno~ to me to be the person who exe-
cuted the within inst~ent on behalf of the sai~
.political subdivision, and acknowledged to me that such
STATE OF CALIFOR/IIA )
)
COUNTY OF SAN MATEO )
SS.
~nown to me be ~'~/~/ of thf.'_~_~_ _g~_-,~_~
~A~/f~. that executed the withzn-~nstru-
to
ment, and the p~rson who ex:e. cuted t_he wit~hip
on behalf of the ~¥~ ('L~~/U'
herein, and acknowledzed to me that said
(~t,~:~. ~_~/~/~xecuted the same.
s .AL
ins trument
named
Ir
CONSENT TO ACTION
BY BOARD OF DIRECTORS WITHOUT A MEETING.
The undersigned directors of Oyster Point Village Associates,
Inc., a California Corporation, consent to the following action
of the board of directors of Oyster Point Village Associates,
Inc., without a meeting by unanimous consent of all directors of
that corporation:
Marti ~hristoffer, President Roger Superko, Secretary
Jeremy Walters, Vice President Richard Bertolina, Financial Officer
Adoption of the following resolution of the board of directors:
To exercise leaseOn Parcel "B" as General Partner to Oyster,
--Point Village Ltd., and on Parcel "D" as Oyster Point Village
Associates, Inc., at Oyster Point Marina in South San Francisco
~._with the Harbor District of San Mateo County.
To have $30,380 disbursed from Oyster Point Village~ Ltd'~ funds
and $4,120 from Oyster Point Village Associates, Inc. funds, for
the lease deposit to be deposited in a Time Deposit or
Certificate of Deposit or other instruments of credit as provided
on page 8 of the General Conditions of the Lease.
To authorize Marti Christoffer, President, to sign both leases
on b, ehalf of Oyster Point Village.Associates, Inc~
f'/;,' (/ '~/, '. ·
. %,- .. ...... ..%
. %.. .;~ . .,..-
~e~ Po,hr ~lloge ~~e~, ln~~ 1670 Pine ~,, ~n ~ond~o, ~lifom~o 94109 (415) 673-~5
SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That Jeremy Walters Naploha of 3233 Jackson Street, City of
San Francisco, County of San Francisco, State of California,
hereby appoints Roger Superko of 177 Carnelian Way, City of
San Francisco, County of San Francisco, State of California,
as his attorney in fact to act in his name and to do any and
all of the following:
For the period from December 21, 1984, through January 10,
1985, to exercise all voting rights relating to his 1,000
shares of Oyster Point Village Associates, Inco, for the
following'business matters:
1. Carry out any activities necessary to mortgage and
hypothecate' including but not limited to signing loan
agreements, guarantees, and any other loan documents
necessary to secure and cause to be made loans from Bank of
America for the construction and permanent financing of
Oyster Point Village, Phase I, Parcel "B", Oyster Point
Boulevard, South San Francisco, California.
22 Carrying out other activities'necessary to begin
construction on Oyster Point Village, Phase I.
3. Executing any and all documents necessary to carry out
the above activities as acting Vice-President of Oyster
Point Village Associates, Inc. ~
4. Sign as Lessee on the San Marco Harbor Commission
Leases for ~arcels "B" and "D" at Oyster Point Marina.
Granting to his attorney in fact full' power and authority to
do and perform all and every act and thing whatsoever
requisite, necessary and proper to be done in the exercise
~f any of the rights and powers herein granted, as fully to
all intents and purposes as she'might or could do if
personally present, with full power or substitution or
revocation, hereby ratifying and confirming all that his
attorney in fact, or his substitute or substitutes, shall
lawfully do or cause to be done by virtue of this power of
attorney and the rights and powers herein granted.
In witness whereof I have hereunto signed my name this 21st
day of December 1984.
i ~eremy W~rs Naplo. ha
IT_L[
ALPHABETICAL
INDEX
ADJUSTMENT OF RENT
(ART'ICC
ANT i - D'I SCR I MI NATI 0 N
(ARTICLE V) ' · - &
xxxIii) " " ' " 36
(ARTICLE XXXVI '
ASSIGNNENT~ su~LETTING~ ~ HYPOTHECATION (ARTICLE XVI) .....
CAPTIONS (ARTICLE XXVII) ' 3~'
CLAIMS AND PROTEST (ARTICLE XIX) .................................
CONPLIANCE WITH LAWS AND REGULATIONS (ARTICLE XIII) ....... :'. ..... l&
CONDEMNAT~ON'(iRTICLE XXVI) .................................
CONSTRUCTION'(ARTICLE IV) ............... ' .................. -
DECLARATION OF KNOWLEDGE BY LESSEE (ARTICLE II) ................
,.J/EFAULT OR BREACH (ARTICLE XVIII) '
EFINiTIONS (ARTICLE XXXVII) ...................................... 37
DESTRUCTION (ARTICLE XXIV) ............................. ,,,,' ......
DIsTRIcT'S RIGHT TO RE-ENTER (ARTICLE XXXII) ............... ",
FEE FOR FAILURE TO PAY WHEN DUE (ARTICLE VI) ...................... T
FINANCIAL REPORTS AND RECORDS (ARTICLE XV) ................
FORCE MAJEURE
HOLD HARMLESS
HOLDING OVER
(ARTICLE XXX) . 36
INSURANCE' (ARTICLE VIII
LIMITATION OF LEASEHOLD (ARTICLE XXIX) ........................... 35
LIQO!DATED DAMAGES (ARTICLE XI) ................................ ..15
_ EAINTENANCE AND REPAIR (ARTICLE'XXII) ....... - ........... ¢ .......... 30
)OT lC. ES ( AR~I'CLE XXXX) ....................... · ................. 37
OPERATIONS
O~NERSHIP OF
.~,S E SS 0 RY
(ARTICLE X) ' I4
P~OT'ECTION OF
LEASES
(ARTICLE X¥II) ' Z4
INTEREST TAXES, TAXES, ASSESSMENTS AND FEES
(ARTICLE IX) m 13
LEASED PREMISES (ARTICLE XII) ...................... I6
QUIET
REENTRY
REMOVAL
RIGHT
ENJOYMENT (ARTICLE' III) ....
kY DISTRICT WITHOUT TERMINATION (ARTICLE XX)...; .........
OF IMPROVEMENTS AND OWNERSHIP UPON TERMINATION
'(ARTICLE XXV) ' m'
OF .ENTRY BY PUBLIC ENTITIES (ARTICLE XXIII) ................ 3Z
INGS CLAUSE (ARTICLE XX¥III) ' 35
SAV ..................................
SECURITY DEPOSIT (ARTICLE VII) .................................... 8
TIME (ARTICLE XXXIV) ' 36
WAIVER AND NON-WAIVER (ARTICLE XXI) .............................. 30
,J~.RRANTY OF TITLE (ARTICLE I) ..................................... 3
LEASE
GENERAL CONDITIONS
P_A-E_'CELS B AND _D_
ARTICLE I - WARRAN-TY OF TITLE
. A.. DISTRICT WARRANTS THAT IT HAS AUTHORITY TO LEASE THE LANDS'
QUESTION AND THAT THERE ARE NO RESTRICTIONS, LIENS OR ENCUMBRANCES
WHICH WOULD PREVENT LESSEE'FROM DEVELOPING AND OPERATING THE BUSINES~
.ENTERPRISES PROVIDED'FOR IN THIS LEASE EXCEPT AS MAY BE SPECIFICALLY
SET FORTH I.N THE LEASE' DOCUMENTS.
%
B. DISTRICT FURTHER WARRANTS THAT.DEVELOPMENT ON LANDS OWNED OR
CONTROLLED BY THE DISTRICT SHALL BE OF COMPATIBLE USES. DISTRICT AND
LESSEE AGREE THAT THIS LEASE SHALL IN NO NAY LIMIT DISTRICT'S RIGHT TO
DEVELOP LIKE BUSINESS ENTERPRISES AND OTHER COMPAT[BLE USES AT ANY
TIME ON LANDS OWNED OR CONTROLLED BY THE DISTRICT.
ARTICLE IS-- DECLARATION OF KNOWLEDGE BY LESSEE
LESSEE WARRANTS THAT LESSEE HAS CAREFULLY EXAMINED THIS LEASE AND BY
INVESTIGATION OF THE SITE AND OF ALL MATTERS RELATINS. TO THE LEASE
ARRANGEMENTS HAS FUE~Y INFORMED ITSELF 'AS'TO ALL EXISTING CONDITQNS
AND LIMITATIONS AFFECTING THE CONSTRUCTION OF THE LEASE IMPROVEMENTS
-'~D BUSINESS PRACTICES REQUIRED IN THE OPERATION AND MANAGEMENT OF THE
YES CONTEMPLATED HEREUNDER.
'~'RTICLE III - ~UIET ENJOYMENT
LESSEE, PAYING ~HE RENT HEREIN RESERVED, AND PERFORMING AND OBSERVING
THESE VERBAL COVENANTS AND CONDITIONS BY IT TO BE' KEPT AND PERFORMED
MAY PEACEABLY HOLD AND ENJOY THE LEASED PREMISES SUBJECT TO THE TERMS,
COVENANTS, AND CONDITIONS OF THIS'LEASE DURING THE TERM THEREOF.
ARTICLE IV - ~ONSTRUCTION
A. LESSEE SHALL BE RESPONSIBLE FOR THE CONSTRUCTION OF
LESSEE-OWNED'IMPROVEMENTS AT ITS SOLE COST AND EXPENSE'.
B. LESSEE SHALL SUBMIT AND OBTAIN APPROVA~ OF PLANS AND.
SPECIFICATIONS FOR ALL IMPROVEMENTS IN ACCORDANCE WITH THE
REQUIREMENTS OF "DESIGN CRITERIA FOR CONSTRUCTION BY LESSEE .... ETC."
(E%HIBIT B), AS DESIGNATED AND/OR REQUIRED BY THE HARBOR DISTRICT~ AND
ALL APPLICABLE CODES AND ORDINANCES, INCLUDING BUT NOT LIMITED TO
DISTRICT, CITY, COUNTY, STATE AND FEDERAL. AFTER APFROVAL OF
SCWEMATIC FHASE, LESSOR SHALL NOT UNREASONABLY WITHHOLD APPROVALS OF
SUCCEEDING PHASES PROVIDED THEY FOLLOW THE SCHEME AND SCHEDULE
ESTABLISHED IN THE SCHEMATIC PHASE AS PREVIOUSLY APPROVED BY THE
-3-
C..~SE~ANCE AND PAYMENT BON~. NO CONSTRUCTION SHALL BE
COMMENCED NOR BE DEEMED TO HAVE COMMENCED AT THE LEASED PREMISES UNTIL
LES~EE'-HAS PROVIDED DISTRICT A PERFORMANCE AND PAYMENT BOND IN THE
AMOUNT,OF THE TOTAL ESTIMATED CONSTRUCTION COSTS OF THE IMPROVEMENTS
F~ BE CONSTRUCTED*BY LESSEE.
" SAID BOND SHALL BE IN A FORM ACCEPTABLE TO DISTRICT AND SHALL
.~TATE THE FOLLOWING:
1. THAT I¥ IS CONDITIONED TO'SECURE' THE ~OMPLETION'OF THE
PROPOSED CONSTRUCT'ION,-FREE FROM ALL LIENS'AND CLAIMS OF CONTRACTORS~
SUBCONTRACTORS, MECHANICS, LABORERS, AND MATERIAL AND/OR EQUIPMENT
SUPPLI'ERS, ETC.
Z. ,THAT THE CONSTRuCTIoN WORK SHALL BE FULLY AND FAITHFULLY
PERFORMED BY LESSEE~ THE GENERAL CONTRACTORS~ OR~ ON THEIR DEFAULT,
THE SURETY..
THAT .IN DEFAULT OF SUCH COMPLETION AND PAYMENT, SUCH PART
OF THE AMOUNT OF THE BOND AS SHALL BE REQUIRED TO COMPLETE THE ~ORK
SHALL BE PAID TO DISTRICT AS LIQUIDATED AND AGREED DAMAGES FOR THE
NONPERFORMANCE OF THE LESSEE'S AGREEMENT; IT BEING AGREED THAT THE
AMOUNT. OF ~HE DISTRICT'S DAMAGES IS EXTREMELY DIFFICULT TO ASCERTAIN
AND DETERMINE.
~. THAT THE SURETY WILL DEFEND AND INDEMNIFY DISTRICT AND/OR
ITS SUCCESSORS AND EACH OF THEIR ELECTIVE AND APPOINTIVE BOARDS~
COMMISSIONS, AGENTS, CONSULTANTS, INDEPENDENT CONTRACTORS AND
EMPLOYEES AGAINST ALL LOSSES, COSTS, DAMAGES, EXPENSES, CLAIMS, AND
?"IABILITIES OF ANY KIND, ARISING lOUT OF OR CONNECTED WITH THE
ONSTRUCTION.
IN LIEU OF A PERFORMANCE AND'PAYMENT BOND, ~E. SSEE MAY PROVIDE.
CONSTRUCTION SURETY BONDS SUPPLIED BY LESSEE'S GENERAL CONTRACTOR OR
CONTRACTORS~ PROVIDED SUCH BONDS CONTAIN THE SAME CONDITIONS, ARE
ISSUED JOINTLY TO LESSEE AND DISTRICT~ AND ARE IN AN AMOUNT EQUAL TO
THE TOTAL ESTIMATED C~NSTRUCTION COST OF THE IMPROVEMENTS.
'SHOULD LESSEE ACT"AS OWNER/BUILDER, THEN ALL.SUBCONTRACTORS SHALL
PROV!DE CONSTRUCTION SURETY BONDS ON THE SAME CONDITIONS AS ABOVE.-
STATED FOR CONSTRUCTION SURETY BONDS TO BE PROVIDED BY LESSEE~S
GENERAL CONTRACTOR. "
ALL CONSTRUCTION.PERFORMANCE AND PAYMENT ~ONDS SHALL BE*ISSUED BY
A RESPONSIBLE SURETY COMPANY QUALIFIED TO DO BUSINESS IN THE STATE OF
CALIFORNIA ACCEPTABLE TO DISTRICT, AND SHALL REMAIN IF EFFECT UNTIL
~HE ENTIRE'COST OF THE WORK SHALL HAVE BEEN PAID IN FULL AND THE NEW
I~PROVEHENTS SHALL HAVE BEEN INSURED AS PROVIDED BY THIS LEASE.
CERTIFiCaTE OF COMPLETION. UPON coMpLETION OF SAID
IMPROVEMENTS AND ANY APPROVED MODIFICATION THERETO, SAN MATED COUNTY·
HAR~0~ DISTRICT 'WILL EXECUTE AND DELIVER TO LESSEE A CERTIFICATE OF
CO~FLETION WHICH ~ILL RECITE THAT DISTRICT HAS' INSPECTED AND APPROVED
~""~LL iMPROVEMENTS AND THAT THERE EXISTS NO DEFAULT- IN T~IS LEASE WITH
-4-
RESPECT TO SAID I~PROVEMENTS AS OF THE..DATE.OF THE C~RTIFICATE! IF
SUCH IS THE FACT~ -.
E, STATEMENT OF CONSTRUCTION COSTS AND "AS-BUILT" PLANS.
~IT~IN,SIXTY '(60) DAYS FOLLOWING COMPLETION OF ANY SUBSTANTIAL
~.T~MPROVEMENT HITHIN THE LEASED PREMISES, LESSEE SHALL FURNISH DISTRICT
f COMPLETE REPRODUCIBLE SET OF "AS-BUILT" PLANS AND AN ITEMIZED
[TATEMENT' OF THE ACTUAL CONSTRUCTION COST OF SUCH IMPROVEMENT. THE
'~TATEMENT OF COST SHALL BE SWORN TO AND SIGNED BY LESSEE OR HIS'
RESPONSIBLE AGENT UNDER PENALTY OF PERJURY.
F.. APPROVAL OF CHANGES.-" AFTER'COMPLETIoN OF THE oRIGINAL
CONSTRUCTION,i' STRUCTURAL MODIFICAT.I. ONS, ALTERATIONS, OR MAJOR OR MINOR
REPAIR'SHALL COMPLY. WITH THE PROVISIONS OF THE CURRENT "DESIGN
-CRITERIA FOR CONSTRUCTION BY.LESSEE" (EXHIBIT B), AND SHALL NOT BE
COMMENCED WITHOUT DISTRICT'S PRIOR WRITTEN APPROVAL'OF THE PLANS,
SPECIFICATIONS AND SCHEDULE FOR SUCH CONSTRUCTION, STRUCTURAL
MODIFICATION~ OR ALTERATION. REPAIRS OR CHANGE~ IN RESPONSE TO
E~ERGENCY. CONDITIONS-NAY BE MADE ~ITHOUT'PRIOR APPROVAL, PROVIDED THAT
SAID REPAIRS OR CHANGES CONFORM TO ALLOWED USES', DO NOT CONST!TUTE
STRUCTURAL MODIFICATIONS AND DO NOT MATERIALLY CHANGE THE APPEARANCE
OF THE PREMISES AS PREVIOUSLY APPROVED. LESSOR SHALL NOT UNREASONABLY
~ITHHOLD APPROVAL OF CHANGES CONFORMING TO THE THEN CURRENT "DESIGN
CRITERIA"'IEXHI~IT B) AND OVERALL CONCEPT OF THE PROJECT INCLUDING
UPGRADES AND CHANGES REQUIRED TO ALLOW THE PROJECT TO MODERNIZE AND
REHAIN COMPETITIVE AS TIME GOES ON.
6. NOTICE OF NON-RESPONSIBILITY. ' DISTRICT HAS FULL AND
COMPLETE ACCESS TO THE LEASED PREMISES TO POST AS MANY "NOTICES OF
r.~ON-RESPCNSIBIL. ITY" AS THE DISTRI'CT DEEMS APPROPRIATE.
H. MECHANICS LIENS.' LESSEE SHALL AT ALL TIMES INDEMNIFY AND
LSAVE DISTRICT HARMLESS FROM ANY AND ALL'CLAIMS FOR LABOR AND MATERIALS
IN CONNECTION WITH CONSTRUCTION, REPAIR, ALTERATIONS~ OR INSTALLATI. ON
OF STRUCTURES~ .IMPROVEMENTS~ EQUIPMENT, OR FACILITIES AT THE LEASED'
PREMISES, AND FROM THE COST OF DEFENDING AGAINST SUCH CLAIMS,
INCLUDING ATTORNEYS' FEES. IN COMPLYING WITH THIS PROVISION LESSEE
MAY PROVIDE LEGAL COUNSEL, ACCEPTABLE TO THE DISTRICT~ TO DIRECTLY .
REPRESENT AND DEFEND THE DISTRICT. SAID COUNSEL ~UST BE FREE FROM ALL
CONFLICTS OF INTEREST IN SAID REPRESENTATION.
IN THE EVENT A LIEN IS IMPOSED UPON THE LEASED PREMISES AS A
RESULT OF SUCH CONSTRUCTION, REPAIR~ ALTERATION OR INSTALLATION,
LESSEE SHALL PROCURE AND RECORD A BOND IN ACCORDANCE WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3143, WHICH FREES THE
LEASED PREMISES FROM THE CLAIM OF THE LIEN AND FROM ANY ACTION BROUGHT
TO FORECLOSE THE LIEN.
ABSENT A WRITTEN WAIVER By THE DISTRICT, SHOULD LESSEE FAIL TO
PROCURE AND RECORD SAID BOND WITHIN TEN (IO) DAYS AFTER THE FILING OF
AhY SUCH LIEN, THIS LEASE SHALL BE IN DEFAULT-AND SHALL BE SUBJECT TO
IH~ED[ATE TERMINATION BY DISTRICT, ANYTHING IN THIS LEASE TO THE
CONTRARY NOTWITHSTANDING.
-5-
ART'ICLE V - ADJUSTMENT OF RENT ,
A." ADJUSTMENT OF MINIMUM ANNUAL RENT. AT- THE BEGINNING DF 'THE
I~TH (6TH) YEAR AND OF EACH FIVE-YEAR.PERIOD THEREAFTER, THE MINIMUM
BE ADJUSTED FOR THE NEXT ENSUING FIVE-Y~AR PERIOD TO
NNUAL
RENT
SHALL
'A~.AMOUNT EQUAL TO SEVENTY-FIVE (75) PERCENT OF THE AVERAGE OF THE
TOTAL YEARLY RENT PAID DURING THE PREVIOUS FIVE-YEAR PERIOD~' PROVIDED~
HOWEVER, IN NO EVENT SHALL SUCH ADJUSTED.'MZNIMUM .~NNUAL RENT BE LESS
THAN THE MINIMUM ANNUAL RENT FOR THE PREVIOUS'yEAR OF THE LEASE TERM.
ON THE FIRST DAY OF EACH OF THE FIRST THREE MONTHS OF EACH
SUCH ENSUING FIVE-YEAR PERIOD, LESSEE SHALL PAY ONE-TWELFTH OF THE
MINIMUM ANNUAL RENT AT THE RATE PAID DURING THE LAST PRECEDING YEAR;
NO LATER THAN THE END OF SUCH THREE-MONTH PERIOD, LESSEE SHALL PAY THE
ADDITIONAL'AMOUNT,'IF ANY, BETWEEN THE AMOUNT PAID AS MINIMUM ANNUAL
RENT AND'THE AMOUNT DUE AS ADJUSTED'MINIMUM ANNUAL RENT. ANY
OVERPAYMENT MADE DURING SUCH THREE-MONTH PERIOD SHALL BE CREDITED
AGAINST FUTURE MINIMUM ANNUAL RENT.
B. ADJUSTMENT OF PERCENTAGE RENT
$. AT ANY TIME NO EARLIER THAN TWO HUNDRED SEVENTY (Z70~
DAYS NOR LATER THAN ONE HUNDRED EIGHTY (180) DAYS PRIOR TO THE TENTH
(10TH) ANNIVERSARY OF'THE LEASE'TERM, AND NITHIN SAID TIME LIMITS
PRIOR TO EACH TEN-YEAR PERIOD DURING THE TERM OF THIS LEASE
THEREAFTER,.EITHER LESSEE OR DISTRICT MAY~ BY WRITTEN NOTICE.'TO THE'
~.~THER~-REQUEST MODIFICATION OF THE PERCENTAGES OF GROSS RECEIPTS
.,~ AYABLE AS RENT. '-
AFTER RECEIPT OF ~UCH-.NOTICE, L~SSEE AND DISTRICT MAY
NEGOTIATE MODIFICATION OF THE PERCENTAGES OF THE GROSS RECEIPTS AS
RENT HEREUNDER. IF NO WRITTEN REQUEST IS GIVEN AS HEREIN PROVIDED~
THE PERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT SHALL CONTINUE AS
THE BASIS FOR DETERMINATION OF PERCENTAGE RENT UNTIL THE NEXT
PERCENTAGE RENT MODIFICATION REQUEST PERIOD AND COMPLIANCE WITH THE
PROVISIONS OF THIS SU~-ARTICLE OCCUR.
Z. IF~ AFTER A WRITTEN REQUEST FOR MODIFICATION~ LEssEE AND
DISTRICT AGREE THAT MODIFICATIONS ARE APPROPRIATE BUT ARE UNABLE TO
AGREE ON THE MODIFICATION OF THE PERCENTAGES OF GROSS RECEIPTS PAYABLE
AS RENT BY THIRTY (30) DAYS PRIOR TO THE TENTH (lOTH) ANNIVERSARY OF
THE ~LEASE TERM OR THIRTY (30) DAYS PRIOR TO TH~ COMMENCEMENT DATE OF
EACH TEN-YEAR PERIOD THEREAFTER, AS APPLiCABLE~ THEN
THE PERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT SHALL
CONTINUE .AS THE BASIS FOR DETERMINATION OF PERCENTAGE RENT UNTIL
HODIFIED AS HEREINAFTER PROVIDED.
(b) AT'FANY TIME NO EARLIER THAN THIRTY (30) DAYS NOR LATER
THAN SEVEN (7) DAYS PRIOR TO THE TENTH (lOTH) ANNIVERSARY OF THE LEASE
...~ERM, OR WITHIN SAID TIME LIMITS PRIOR I,O~THE. COHMENCE~EN~ OF EAC~
EN-YEAR PERi.OD· THEREAF]'ER, AS APPLICABLE~ LESSEE OR DISTRICT MAY, BY
RiTTEN NOTICE TO THE OTHER, ELECT TO SUBMIT DETERMINATION OF
-~'ERCENTAGE RENTS.FOR AR~i'TRAT[ON. ~ITHIN TEN (I0) DAYS AFTER SUCH
NOTICE, LESSEE AND DISTRICT SHALL EACH APPOINT AN ARBITRATOR AND
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INFORM THE OTHER 'I'M WRITING OF THE NAME AND ADDRESS OF ITS APPOINTED
ARBITRATOR. ~EFOR£ SELECTING AN. ARBITRATOR(S), THE LESSEE AND
DISTRIC~ MUST AGREE ON THE QUALIFICATIONS.REQUIRED FOR BOTH
ARBI,TRATORS, IN WRITING. ARBITR.A~ORS MAY BE REJECTED BY THE OPPOSING
SIDE IF. THE ARBITRATION DOES NOT MEET THE AGREED UPON QUALIFICATIONS.
[ (c) 'IF WITHIN SIXTY (60) DAYS AFTER APPOINTMENT OF THE
L.,~BITRATORS, THE ARBITRATOR HAVE NOT AGREED ON THE MODIFICATION OF THE
PERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT, THE ARBITRATORS SHALL
IMMEDIATELY'APPOiNT A THIRD ARBITRATOR, SUBJECT Tp THE SAME
QUALIFICATIONS,~ AND THE DECISION OF ANY TWO. ARBITRATORS SHALL BE
BINDING ON THE PARTIES TO THIS LEASE.' THE THREE ARBITRATORs SHALL
SUBMIT'THEIR DECISIONS WITHIN NINETY (90) DAYS AFTER THE APPOINTMENT
OF THE THIRD ARBITRATOR. IF NO DECISION IS. MADE WITHIN SAID NINETY
(90) DAYS, THE PERCENTAGES' OF GROSS RECEIPTS PAYABLE AS RENT SHALL
CONTINUE AS THE BASIS FOR DETERMINATION OF PERCENTAGE RENT UNTIL THE
NEXT MODIFICATION REQUEST PERIOD AND COMPLIANCE WITH THE PROVISIONS*OF
THIS SUB-.ARTICLE OCCUR .... .-
id) THE DECISION OF THE ARBITRATORS SHALL BE IN WRITING,
DATED AND SIGNED BY THE ARBITRATORS IN DUPLICATE. ONE COPY OF THE
DECISION SHALL BE DELIVERED TO LESSEE AND THE OTHER TO DISTRICT. THE
PERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT, AS FIXED BY THE
ARBITRATORS~ SHALL BECOME EFFECTIVE ON THE DATE OF THE DECISION OF'THE
ARBITRATORS. ..
(e) IF THE PARTIES AGREE THAT MODIFICATIONS ARE APPROPRIATE
BUT ARBITRATION IS'NOT CONDUCTED VOLUNT'AR~LY AS PROVIDED HEREIN,
EITHER PARTY NAY PETITION TO THE SUPERIOR COURT, IN ACCORDANCE WITH
"'"'HE PROVISIONS OF SECTIONS 1ZSO, ET SEQ., OF THE CODE OF CIVIL'
~OCEDURE OF THE STATE OF CALIFORNIA.
(~) IN NO EVENT SHALL THE PERCENTAGE OF GROSS RECEIPTS
PAYABLE AS PERCENTAGE RENTS BE RAISED OR LOWERED MORE THAN'TWEnTY-FIVE
PERCENT (ZSX)'OF THE PERCENTAGE IN EFFECT AT THE COMHENCEMENT OF THE
THEN CURENT ARBITRATION, AND FURTHER, THE ADJUSTED PERCENTAGE'FOR ANY
USE OR SERVICE SHALL NOT BE LESS THAN THE MINIMUM PERCENTAGE FOR SUCH
USE OR SERVICE AS LISTED IN THE PROPOSAL FOR AN OPTION TO LEASE. ANY
ADJUSTMENT OF THE' PERCENTAGE RENTS SHALL BE .BASED UPON USES AND
SERVICES PERMITTED UNDER THIS LEASE.
(9) ' EACH PARTY HERETO SHALL-PAY THE CHARGES OF THE
ARBITRATOR APPOINTED BY 'IT AND THE EXPENSES INCURRED BY SUCH
ARBITRATOR. THE CHARGES FOR SERVICES OF THE.THiRD ARBITRATOR AND THE
OTHER EXPENSES OF ARBITRATION SHALL BE BORNE BY LESSEE AND DISTRICT IN
EQUAL SHARES.
ARTICLE*VI - FEE FOR FAILURE TO PAY WHEN DUE
ALL MONIES, INCLUDING, WITHOUT LIMITATION, RENT SECURITY DEPOSIT,
FEES FOR FAILURE TO PAY WHEN DUE, AS HEREINAFTER PROVIDED, LIQUIDATED
DAMAGES, AND ANY OTHER PAYMENTS THAT LESSEE IS OBLIGATED*TO MAKE,
WHICH ARE PAYAgLE TO .DISTRICT BY LESSEE, ARE AGREED TO BE PAYABLE
~"'ITHOUT ABATEMENT, DEDUCTION, OR OFFSET OF ANY KIND OR'CHARACTER
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WHATSOEVER. '
IF 'MONEY PAYABLE TO DISTRICT AS A CONDITION OF THIS LEASE IS NOT
PAI~ WITHIN TEN (10) DAYS EHEN DUE, A LATE CHARGE OF 5% OF THE AMOUNT
DUE SHA~L BE ASSESSED AND THE PRINCIPAL SHALL ACCRUE INTEREST AT THE
r'-'JEN CURRENT PRIME. RATE, AS SET BY BANK OF' AMERICA ON SAID DATE, FROM
t~D AFTER THE DUE DATE OF ANY PAYMENT OF FIXED MINIMUM RENT,
.ZRCENTAGE RENT, RENT SECURITY DEPOSI. T, LIQUIDATED DAMAGES OR ANY
OTHER PAYMENTS. .
ARTICLE VI I - SECURITY" DEPOSIT
LESSEE SHALL PROVIDE DISTRICT. WITH, AND AT ALL TIMES THEREAFTER
MAINTAIN~ A SECURITY DEPOSIT IN THE AMOUNT OF $34~500. AFTER THE
· FIFTH YEAR OF THE LEASE, SUCH AMOUNT SHALL BE ADJUSTED PERIODICALLY,'
AND CONCURRENTLY WITH THE ADJUSTMENT OF MINIMUM ANNUAL RENT, TO
ONE-HALF OF T~E AMOUNT OF THE THEN CURRENT MINIMUM ANNUAL RENT;
PROVIDED~. HOWEVER, 'AT ALL TIMES THE SECURITY DEPOSIT SHALL BE NOT LESS
THAN $34,50~. $10,350 OF SAID SECURITY DEPOSIT I.S ALLOCATED TO LEASE'
PARCEL B AND $Z4,150 'IS ALLOCATED TO LEASE PARCEL D.
THE SECURITY DEPOSIT SHALL TAKE ONE OF THE FORMS SET OUT BELOW
AND SHALL .GUARANTEE LESSEE'S FULL AND FAITHFUL PERFORMANCE OF ALL THE
TERNS~ COVENANTS~ AND CONDITIONS OF THiS LEASE:
A. CASH
B. THE ASSIGNMENT TO DISTRICT OF A ~AVINGS DEPOSIT HELD IN A
FINANCIAL INSTITUTION IN SAN MATEO COUNTY ACCEPTABLE TO DISTriCT.
'-'JCH ASSIGNMENT SHALL CONSIST OF DELIVERY TO DISTRICT OF' THE-'ORIGINAL
~SSBOOK FOR SUCH SAVINGS DEPOSIT AND EXECUTION AND DELIVERY OF A
~.tI"TTEN-ASSIGNMENT OF SAID DEPOSIT TO DISTRICT ON A FORM APPROVED BY
.DISTRICT.
C. A RENEWABLE TIME CERTIFICATE OF DEPOSIT FROM A FINANCIAL
INSTITUTION IN SAN MATEO COUNTY WHEREIN THE PRINCIPAL SUM IS MADE
PAYABLE TO DISTRICT ON ORDER; BOTH THE FINANCIAL INSTITUTION AND THE
FORM OF THE.CERTIFICATE MUST BE APPROVED BY DISTRICT.
D. ANY INCREASE IN THE SECURITY DEPOSIT MAY BE IN ANy OTHER FORM
APPROVED IN WRITING BY THE DISTRICT, WITH THE FIRST $34,500 REQUIRED
TO.BE IN ONE OF THE THREE (3) ABOVE DESCRIBED FORMS.
E. A RENEWABLE INSTRUMENT OR INSTRUMENTS OF CREDIT FROM ONE OR
~ORE FINANCIAL INSTITUTIONS, SUBJECT TO REGULATION BY THE STATE OR
FEDERAL. GOVERNMENT, PLEDGING THAT FUNDS NECESSARY TO SECURE '.''
PERFORMANCE OF THE LEASE TERNS, COVENANTS, AND CONDITIONS ARE
GUARANTEED FOR PAYNENT~ AND AGREEING THAT SAID FUNDS SHALL SECURE
LESSEE'S PERFORMANCE, AND THAT'ALL OR ANY PART 'SHALL BE-PAID TO
DISTRICT ~PON DEMAND. BOTH THE FINANCIAL INSTITUT'ION(S) AND THE FORM
OF THE INSTRUMENT(S) MUST BE APPROVED BY DISTRICT.
LESSEE NAY CHANGE THE FORM OF SECURITY DEPOSIT (A. THROUGH D.,
~"'~CLUSiVE A~OVE) ONLY WITHIN THIRTY (30) DAYS AFTER AN~ ANNIVERSARY OF
~E LEASE TERM. REGARDLESS OF THE.FORM IN ~HICH LESSEE ELECTS ¥0 ~AKE
.~ID SECURITY DEPOSIT, ALL OR ANY PORTION OF THE PRINCIPAL. SUM SHALL
BE AVAILABLE' UNCONDITIONALLY TO DISTRICT-FOR CORRECTING ANY DEFAULT OR
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BREACH OF THIS.'LEA~E BY LESSEE, HIS SUCCESSORs OR ASSIGNS, OR FOR
PAYMENT ~F EXPENSES INCURRED BY. DISTRICT AS A. RESULT OF THE FAILURE OF
LESSEEj'.HIS SUCCESSORS OR ASSIGNSj TO FAITHFULLY PERFORM ALL THE
TERMS~ 'COVENANTS~ AND CONDITIONS OF THIS LEASE.
"-- ~'SHOULD 'LESSEE.ELECT TO ASSIGN A SAVINGS DEPOSIT TO DISTRICT,
:OVIDE A TIME CERTIFICATE OF DEPOSITi OR PROVIDE AN INSTRUMENT OF
,.,.~EDIT TO EULFILL THE SECURITY DEPOSIT REQUIREMENTS OF TH~S LEASE~ THE
DEPOSITORY OR ISSUER.THEREIN SHALL INCUR NO LIABILITY SECA'USE OF THE
PAYMENT OF ANY OR ALL OF THE PRINCIPAL SUM. TO DISTRICT .UPON DEMAND.
THE AGREEMENT ENTE.RED- INTO BY LESSEE'WITH A.FINANCIAL'INSTITUTION TO
ESTABLISH-THE DEPOSIT. NECESSARY TO~ PERMIT ASSIGNMENT OR ISSUANCE OF
CERTIFI.C~TE~ AS .PROVIDED ABOVE~. M~Y ALLO~ THE PAYMENT TO LESSEE OF
INTEREST. ACCRUING ON ACCOUNT OF SAID DEPOSIT. '
' IF AT' AMY'.TIME DURIN~ THE TERM OF'THIS LEASE~ ANY RENT OR ANY
OTHER' SUN PAYBLE TO DISTRICT SHALL BE OVERDUE AND UNPAID~ DISTRICT
gAY~ AT'D.ISTRICT'S OPTION~ APPLY ANY PORTION OF.THIS SECURITY DEPOSIT
TO THE PAYMENT'OF ANY OVERDUE RENT OR ANY OTHER SUMS DUE AND PAYABLE
TO DISTRICT UNDER.THIS.LEASE.
SHOULD THE ENTIRE SECURITY DEPOSIT OR ANY PORTION THEREOF' BE
APPROPRIATED AND APPLIED BY DISTRICT FOR THE PAYMENT.OF OVERDUE RENT
OR ANY SUCR OTHER SUM' DUE AND PAYABLE TO DISTRICT B.Y LESSEE~ THEN
LESSEE SHALL WITHIN THIRTY DAYS (30) AFTER WRITTEN DEMAND BY' DISTRICT~
RESTORE SAID SECURITY DEPOSIT TO THE REQUIRED AMOUNT ....
LESSEE SHALL MAINTAIN'THE REQUIRED' S~CURITY DEPOSIT THROUGHOUT
THE LEASE TERM. FAILURE TO DO SO. SHALL BE DEEMED A DEFAULT AND SHALL
"-": GROUND FOR IMMEDIATE TERMINATION OF THIS LEASE.
THE SECURITY DEPOSIT SHALL BE REBATED~ REASSIGNE'D~ RELEASED OR
ENDORSED TO LESSEE ON ORDER, AS APPLICABLE, AT THE END OF THE LEASE.
TER~, PROVIDED LESSEE IS NOT THEN IN DEFAULT*AND HAS PERFORHED ITS
OBLIGATIONS REQUIRED TO BE PERFORMED UPON TERMINATION OF THIS LEASE°
ARTICLE VIII ' INSURANCE
-- A. INSURANCE DURING CONSTRUCTi~ 'LESSEE SHALL MAINTAIN~ KEEP
IN FORCE AND PAY ALL PREMIUMS REQUIRED TO MAINTAIN AND KEEP'IN EORCE
ALL CLASSES OF THE FOLLOWING INSURANCE AT ALL TIMES DURING WHICH THERE
IS ANY CONSTRUCTION, INCLUDING "MAJOR REPAIR" (AS LATER DEFINED IN
THIS LEASE).
1. BUI'LD'ERS RISK INSUR~ '"ALL RISKS" BUILDERS RISK '
INSURANCE INCLUDING VANDALISM AND MALICIOUS MISCHIEF, COVERING ALL
MATERIAL AND EQUIPMENT AT THE JOB SITE FURNISHED UNDER CONTRACT~ BUT
EXCLUDING CONTRACTOR'S~' SUB-CONTRACTOR'S, AND CONSTRUCTION MANAGER'S
TOOLS AND EQUIPMENT AND PROPERTY OWNED-BY CONTRACTOR'S OR ·
SUB-'CONTRaCTOR'S EMPLOYEES, WITH LIMITS OF NOT LESS THAN ONE HUNDRED
PERCENT (lOOZ) OF THE TOTAL ESTIMATED COST OF CONSTRUCTION.
~OILg~_UNUSUAL H~Z6~_~_~!HER INSURANCE
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BOILER AND MACHINERY INSURANCE IN SUCH AMOUNTS OF COVERAGE AS
REASONABLY SATISFACTORY' TO DISTR~CT IF AT ANY TIME OR FROM TIME TO
TINE-SUCH EQUIP'VENT IS LOCATED ON THE LEASED PREMISES. IF LESSEE
COMMENCES~ PERMITS~ OR CAUSES· THE CONDUCT OF ANY ACTIVITY OR THE
~RINGIN~ OR OPERATION OF ANY EQUIPMENT ON OR ABOUT THE LEASED PREMISES
n-'EATING UNUSUAL HAZARDS~ LESSEE SHALL, PROMPTLY ON NOTICE OF DEMAND
~* DISTRICT~ PROCURE AND MAINTAIN IN FORCE DURING SUCH ACTIVITY OR
!_,~ERATION~ INoURANCE~ SUFFICIENT TO COVER THE RISKS REPRESENTED .
THEREBY. DISTRICT'S DEMAND FOR UNUSUAL HAZARD INSURANCE SHALL NOT
CONSTITUTE A'NAIVER OF DISTRICT'S RIGHT~ IF..DISTRICT WOULD OTHERWISE
HAVE THAT RIGHT-~ TO DEMAND THE-REMOVALs CESSATION[ OR ABATEMENT OF
SUCH ACTIVITY OR OPERATION.. OTHER INSURANCE~ ~N AMOUNTS FROM TINE TO
TIME REASONABLY.REQUIRED BY DISTRICT, AGAINST OTHER INSURABLE RISKS~
IF AT THE TIME SUCH INSURANCE IS PROCURABLE AND THE TOTAL PREMIU~ COST
FOR SUCH INSURANCE DOES NOT EXCEED AN AMOUNT EQUAL TO THE TOTAL
PREMIUM COST FOR INSURANCE REQUIRED UNDER THIS LEASE TO BE KEPT IN
FORCE AND MAINTAINED DURING THE PERIOD SUCH CONSTRUCTION IS IN
PROGRESS..
3. WORKERS' cOMPENsATIoN INSURANC~ WORKERS' coMPENSATION
INSURANCE COVERING ALL PERSONS EMPLOYED IN CONNECTION WITH THE WORK
AND WITH RESPECT TO DEATH OR ~ODILY INJURY CLAIMS NNICH COULD BE
ASSESSED A~AINST DISTRICT OR THE LEASED PREMISES.
B. DURING THE TERM OF THIS LEASE~ LESSEE SHALL MAINTAINs KEEP IN
FORCE~ AND PAY AL~ PREMIUMS REQUIRED TO MAINTAIN AND KEEP IN FORCE THE
FOLLOWING INSURAWCE:
I. PUBLIC LIABILITY AND.PROPERTY DAMAGE A COMB. INED
--"INGLE LINIT~ COMPREHENSIVE GENERAL .LIABILITY POLICY IN THE AMOUNT OF
NE MILLION DOLLAR~ ($t~O00~O00). IN ADDIT[ON~ A FIVE MILLION
~LLAR~($5~O00~O00) 'EXCESS LIABILITY POLICY SHALL ~E PROVIDED. THE
PROPERTY DAMAGE INSURANCE SHALL COVER DAMAGE OR DESTRUCTION OF ANY
PROPERTY~ OTHER THAN THAT WHICH IS O~NED= LEASED OR IN THE CAREe
CUST'ODY~ OR CONTROL OF LESSEE WITH THE LIMIT. APPLYING TO ANY ONE
ACC.IDENT~ DISASTER~ OR CLAIM.
FIRE AND EXTENDED COVERAGE ALL IMPROVEMENTS LOCATED
ON OR APPURTENT TO AND INCLUDING THE LEASED PREMISES SHALL ~E KEPT
INSURED AGAINST LOSS OR DAMAGE BY FIRE AND SUCH OTHER RISKS AS ARE NOW
OR' HEREAFTER INCLUDED. IN EXTENDED COVERAGE ENDORSEMENTS IN COMMON USE
'FOR COMMERCIAL 'STRUCTURES~ INCLUDING VALDALISM AND MALICIOUS MISCHIEF.
THE AMOUNT OF SUCH INSURANCE SHALL.~E SUFFICIENT TO PREVENT EITHER
DISTRICT OR LESSEE FROM BECOMING A CO'INSURER UNDER THE PROVISIONS OF.
THE POLICIES, BUT IN NO EVENT SHALL THE AMOUNT BE LESS THAN NINETY
PERCENT (90%) OF THE THEN ACTUAL REPLACEMENT COST EXCLUDING COSTS OF
REPLACING EXCAYA'TIoNs AND FOUNDATIONS~ BUT WITHOUT DEDUCTION OR
DEPRECIATION (HEREIN CALLED "FULL .INSURABLE VALUE"). IF THE PARTIES
DO NOT AGREE THAT THE AMOUNT :OF INSURANCE COMPL-1ES-WITH THE'ABOVE AND
CANEOT RESOLVE SAID DISPUTE, DISTRICT MAY, NOT MORE OFTEN THAN'ONCE
EVERY TNELYE MINTHS~ REQUEST THE CARRIER OF THE INSURANCE THEN IN
FORCE TO DETERMINE THE FULL INSURABLE VALUE AS DEFINED IN THIS
'"'SROVISION, AND THE RESULTING DETERMINATION SHALL BE C~CLUSIVE BETWEEN
~HE P~RTIES F'OR THE PURPOSE OF THIS LEASE. ' DISTRICT SHALL~ AT
.... ESSEE'S SOLE COST ANO EXPENSE~ COOPERATE FULLY WITH LESSEE TO OBTAIN
~HE LAnGEST POSSIBLE RECOVERY, AND ALL POLICIES OF FIRE AND EXTENDED
COVERAGE INSURANCE REQUIRED BY THIS ARTICLE .SHALL PROVIDE THAT THE
PROCEEDS OF ~HICH ~HALL BE.DEEMED'TO BE HELD IN TRUST BY THE RECIPIENT
FOR'THE'USES ~ND PURPOSES PRESCRIBED BY THIS'LEASE.
,, A. INSURANCE TRUSTE[ PRIOR TO THE COMMENCEMENT OF THE
'"E-_RMS OF THIS LEASE, LESSEE SHALL DESIGNATE THE'INSURANCE TRUSTEE'~
~I~H DESIGNATION SHALL BE SUBJECT TO APPROVAL-BY DISTRICT.. THE
.... ~SURANCE TRUSTEE MAY BE ANY.CALIFORNIA OR FEDERALLY CHARTERED SAVINGS
AND 'LOAN ASSOCIATION, A FEDERALLY CHARTERED BANK, OR TRUST CONPANY~
PREFERABLY WITH'AN OFFICE OR BRANCH LOCATED WITHIN TWENTY (ZO) NILES
OF'THE LEASED PREMISES. OR THE LENDER HOLDING THE MORTGAGE ON THE.
IMPROVEMENTS~. IN THE ABSENCE'OF A DESIGNATION BY LESSEE'OR APPROVAL
BY. DISTRICT,' THE TREASURER'OF ~HE~SAN MATED COUNTY HARBOR DISTRICT
SHALL SERVE AS INSURANCE TRUSTEE. . .'
B. 'EpWERS AND DUTIES OF INSURANCE TRUSTEE ALL PROCEEDS
PAYABLE PURSUANT TO THE PROVISION OF ANY POLICY OR POLICIES OF FIRE
INSURANCE OR EXTENDED COVERAGE SHALL BE EXPRESSLY MADE PAYABLE
OF LOSS OR-DAMAGE TO, AND SHALL BE ASSIGNED AND'DELIVERED TOe THE
INSURANCE TRUSTEE FOR DISTRICT AND LESSEE FOR THE FOLLOWING PURPOSES
WITH THE FOLLOWING POWERS AND DUTIES, EXCEPT IF THE PROCEEDS DO NOT
EXCEED THE AMOUNT DEFINED IN THIS LEASE AS THE MEASURE OF "MINOR
REPAIRS"~ SUCH PROCEEDS SHALL BE ADJUSTED BY AND PAID TO LESSEE AND
SHALL BE APPLIED'BY LESSEE FOR REPAIR, RESTORATION~ OR RECONSTRUCT[ON
OF ANY IMPROVEMENT DAMAGED OR DESTROYED BY THE C~SUALTY GIVING RISE TO
T~E.INSURANCE CLAIM:
(~) ALL PROCEEDS RECEIVED'BY THE INSURANCE TRUSTEE
FROM ANY INSURANCE POLICY OR FIRE INSURANCE POLICY OR EXTENDED
'-'3VERAGE POLICY SHALL FIRST BE USED, SUBJECT TO ANY OTHER CONDITIONS'
ONTAINED IN THIS LEASE, BY SUCH INSURANCE TRUSTEE AS A FUND FOR THE
.... ~STORATION AND REPAIR OF ANY AND ALL BUILDINGS, IMPROVEMENTS, AND
EQUIPMENT LOCATED ON THE LEASED ~REMISES WHICH HAVE BECOME DESTROYED
OR DAMAGED. SUCH PROCEEDS IN SUCH EVENT SHALL BE USED AND-APPLIED BY
THE INSURANCE TRUSTEE IN SATISFACTION AND DISCHARGE OF THE COST OF THE
RESTORATION OF THE DAMAGED OR DESTROYED BUILDING~ IMPROVEMENTS, AND
EQUIPMENT.
(Z) SUCH' PROCEEDS SHALL BE PAID OUT BY THE INSURANCE
TRUSTEE FROM'TIME TO TIME TO PERSONS FURNISHING LABOR OR MATERIALS, OR
BOTH, INCLUDING ARCHITECT'S FEES AND CONTRACTOR'S COMPENSATION IN THE
CONSTRUCTION WORK ON. VOUCHERS APPROVED BY A LICENSED ARCHITECT OR
ENGINEER EMPLOYED BY LESSEE TO SUPERINTEND THE WORK; PROVIDED,
HONEVER~ THAT IF SUCH INSURANCE ~RUSTEE SHALL, IN ITS REASONABLE
DISCRETION~ DET. ERMINE OR CONCLUDE THAT SUCH VOUCHERS ARE BEING
IMPROPERLY APPROVED BY SUCH ARCHITECT OR ENGINEER, OR IF NO SUCH
ARCHITECT OR ENGINEER IS APPOINTED, THEN SUCH INSURANCE TRUSTEE SHALL
HAVE THE RIGHT TO APPOINT AN ARCHITECT OR ENGINEER CHOSEN BY THE
INSURANCE TRUSTEE TO SUPERVISE.THE CONSTRUCTION WORK AND TO MAKE
PAYMENTS ON VOUCHERS APPROVED BY SUCH LAST-MENTIONED ARCHITECT OR
ENGINEER. THE REASONABLE EXPENSES OR CHARGES-OF SUCH ARCHITECT OR
ENGINEER SHALL BE PAID .BY SUCH INSURANCE TRUSTEE OUT OF THE TRUST
FUND.
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.($i' ANY PROCEEDS NOT DISBURSED BY THE INSURANCE
TRUSTEE~ AS PROVIDED ABOVE, AND'REMAINING IN'THE HANDS OF THE
INSURANCE TRUSTEE AFTER THE COMPLETION OF THE RESTORATION OR THE
REPAIR WORK AND THE PAYMENT AND DISCHARGE OF THE COST THEREOF, SHALL,
.__THIN'THIRTY AFTER WRITTEN DEMAND MADE BY LESSEE AND
(30)~DAYS
OOMPANIED BY REAooNABLE PROOF OF SUCH~COMpLETION AND PAYMENT, BE
L.IVERED BY THE INSURANCE TRUSTEE TO LESSEE OR LENDER, H~ICHEVER HAS
'~IRST CLAIM TO THE FUNDS. -
(4) IF THE AMOUNT OF THE INSURANCE PROCEEDS IS
I'NSUFFICIENT TO PAY THE ACTUAL COST OF.RECONSTRUCTION, REPAIR, OR
REHABILITATION, such DEFICIENCY WILL BE BORNE AND PROVIDED FOR BY
LESSEE BY DEPOS*ITING SAME WITH THE INSURANCE TRUSTEE WITHIN ONE
HUNDRED TWENTY (1ZO) DAYS FOLLOWING THE REQUEST BY THE INSURANCE
TRUSTEE TO LESSEE REQUESTING A SUM EQUAL TO THE AMOUNT OF SUCH
DEFICIENCY.
'. (5) LESSEE SHALL, AT ALL TIMES PRIOR TO A LOSS THEREON
BE'ENTI'TLED TO CAUSE THE SURRENDER OF ANY POLICY OR POLICIES OF FIRE
INSURANCE OR EXTENDED COVERAGE INSURANCE AND TO RECEIVE THE ALLOWABLE
REBATE OF UNEARNED PREMIUMS THEREON UPON THE CONDITION HOWEVER, THAT
LESSEE FIRST SHALL SUBSTITUTE 'A POLICY.OR POLICIES IN AN EQUAL OR
GREATER AMOUNT.
(6) ALL ACTUAL'COSTS AND ~HARGES OF ~HE INSURANCE
TRUSTEE SHALL BE BORNE AND PAID BY LESSEE. '
(?) IF THE INSURANCE TRUSTEE SHALL RESIGN OR FOR'ANY
,~.EASON BE UNWILLING TO ACT OR CONTINUE TO ACT, THE LESSEE SHALL
[SIGNATE A SUBSTITUTE INSURANCE TRUSTEE IN THE SAME MANNER AND
~ JBJECT TO THE SAME CONDITIONS AS PROVIDED FOR DESIGNATION OF THE
'ORIGINAL INSURANCE TRUSTEE. ..
3. BUSINESS INTERRUPTION INSURANCE IF AND WHEN
PROCURABLE, BUSINESS INTERRUPTION INSURANCE COVERING LOSS OF INCOME TO
THE EXTENT OF ONE HUNDRED PERCENT (100%) OF GROSS INCOME FOR A SIX
MONTH PERIOD.
· . PRODUCTS LIABILITY COVERAGE ALL SUBLESSEES, WHERE
APPLICABLE AND APPROPRIATE, SHALL BE REQUIRED TO PROVIDE PRODUCTS
LIABILITY INSURANCE IN TERMS AND IN AMOUNTS ACCEPTABLE TO THE
DISTRICT.
C. LESSEE MAY PRocuRE AND MAINTAIN ANY INSURANCE NOT REQUIRED BY
THIS LEASE, BUT ALL SUCH INSURANCE SHALL BE SUBJECT TO ALL OTHER
PROVISIONS O~ THiS LEASE PERTAINING'TO INSURANCE AND SHALL BE FOR'THE
MUTUAL BENEFIT OF DISTRICT AND LESSEE.
'D. ALL INSURANCE'REQUiRED ~Y EX~RESS PROVISIONS OF THiS LEASE
SHALL ~E CARRIED ONLY WITH RESPONSIBLE .INSURANCE COMPANIES LICENSED TO
DO BUSINESS iN THE STATE OF CALIFORNIA. ALL SUCH POLICIES SHALL BE
NON-ASSESSABLE AND SHALL CONTAIN LANGUAGE, TO THE EXTENT OBTAINABLE,
TO THE EFFECT THAT:
1.. ANY LOSS SHALL BE PAYABLE NO~WITHSTANOING ANY ACT OR
-1Z-
NEGLIGENCE OF DIS~BICT~ ITS OFFICERS, AGENT~, AND EMPLOYEES THAT MAY
OTHERWISE RESU.LT IN A FORFEITURE.'OF THE INSURANCE.
Z. THE INSURER WAIVES THE RIGHT OF SUBROGATION AGAINST
DiSTRiCT, ITS OFFICERS~ AGENTS AND EMPLOYEES.
3. .THE POLICIES ARE PRIMARY 'AND NON-CONTRIBUTING WITH ANY
~,.~SURANCE THAT MAY BE CARRIED BY 'DISTRICT; AND
4.'..THE POLICIES CANNOT BE CANCELLED OR 'MATERIALLY CHANGED
EXCEPT AFTER THIRTY DAYS (30) PRIOR WRITTEN' NO~ICE BY THE INSURER TO
DISTRICT. :
E. PROMPTLY UPON RECEIPT OF THEM~ LESSEE SHALL FURNISH DISTRICT
WITH COPIES OF ALL INSURANCE POLICIES.. LESSEE SHALL FURNISH DISTRICT
WITH BINDERS REPRESENTING ALL INSURANCE REQUIRED BY'.THIS LEASE PRIOR'
TO THE COMMENCEMENT OF THE' LEASE TERM.
F. 'iF LESSEE FAILS OR REFUSES ~0 PROCURE OR TO MAINTAIN
INSURANCE REQUIRED BY THIS LEASE OR FAILS OR REFUSES TO FURNISH
DISTRICT WITH REQUIRED PROOF THAT THE INSURANCE HAS BEEN PROCURED 'AND
IS IN FULL FORCE AND EFFECT AND PAID FOR, DISTRICT SHALL HAVE THE
RIGHT, BUT NOT THE OBLIGATION, UPON FIVE (5) DAYS WRITTEN NOTICE TO
LESSEE,-T~PROCURE AND'MAINTAIN SUCH INSURANCE. THE PREMIUMS PAID BY
DISTRICT SHALL BEAR INTEREST AT THE LEGAL RATE THEN IN EFFECT IN THE
STATE OF CALIFORNIA FROM THE DATE WHEN THE PREMIUM IS. PAID BY
DISTRICT. DISTRICT NAY REIMBURSE ITSELF FOR THE COST OF SAI'D
INSURANCE FROM LESSEE'S SECURITY DEPOSI'T.
F--=A 6. DISTRICT MAY, AT ANY TIME, BUT NOT MORE OFTEN THAN ONCE A
_ R, REQUIRE LESSEE TO INCREASE THE MINIMUM DOLLAR AMOUNTS FOR
L,.NSURANCE REQUIRED BY THIS LEASE, BUT EVERY SUCH INCREASE SHALL BE
REASONABLE UNDER THE CIRCUMSTANCES.
ARTICLE IX - POSSESSORY INTEREST'TAXES. TA×ES%_6~ESS~ENTS AND FEES
A. PURSUANT TO CALIFORNIA REVENUE AND TAXATION CODE SECTION
107.~, LESSEE IS HEREBY. ADVISED THAT THIS LEASE CREATES A POSSESSORY
INTEREST SUBJEC~ TO PROPERTY TAXATION ANO, AS THE PARTY IN WHOM' THE
POSSESSORY INTEREST IS VESTED~ LESSEE ~ILL BE SUBJECT TO PAYMEN~ OF
THE TAXES LEVIED ON-SAID INTEREST.
B. LESSEE SHALL PAY PROMPTLY ALL TAXES AND ASSESSMENTS OF ANY
KIND WHATSOEVER ASSESSED OR LEVIED FOR OR UPON ~HE LEASED PREMISES~
INCLUDING TAXES AND ASSESSMENTS ASSESSED OR LEVIED UPON ANY MACHINES~
APPLIANCES, PROPERTY~ INTEREST, POSSESSORY INTEREST~ OR IMPROVEMENT OF
ANY KIND ERECTED, INSTALLED, MAINTAINED UPON, OR USED IN CONNECTI.ON
WITH THE LEASED PREMISES· LESSEE SHALL ALSO PAY PROMPTLY ANY TAXES
LEVIED UPON THE. BUSINESS OR OTHER ACTIVITIES OF LESSEE OR ITS
SUBTENANTS, UPON OR IN CONNECTION ~ITH THE LEASE PREMISES.
FURTPERMORE~ LESSEE SHALL PAY ANY FEES IMPOSED BY LAN FOR ANY LICENSES
OR PERi, ITS FOR ANY ~USINESS OR ACTIVITY OF LESSEE OR SUBTENANTS UPON
THE LEASED PREMISES.
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C. THE PAYMENT OF ANY SUCH TAXES, FEE~, OR CHA~GES SHALL NOT
CONSTITUTE CAUSE FOR-MODIFICATION'OF RENT PAYABLE BY LESSEE.
- D. IF THE IMPOSITION OF ANY TAX, FEE, CHARGE, DUTY, OR
ASSESSMENT SHALL BE DEEMED BY LESSEE TO BE IMPROPER, ILLEGAL, OR
'-"XCESSIVE, LESSEE'..MAY~. AT ITS SOLE COST AND EXPENSE, DISPUTE AND
O~TEST THE SAME IN ANY MANNER PROVIDED BY LAW, PROVIDED, HOWEVER, ANY
. ..~CH TAXES, FEES, CHARGES, DUTIES, OR ASSESSMENTS.SHALL HAVE FIRST
BEEN PAID.
ARTICLE X '- ~RATIONS
A. RENTS AND SERVICEs. LESSEE SHALL BUILD AND OFFER FOR
RENTAL TO SUBTENANTS, THE LEASED PREMISES. LESSEE SHALL BUILD AND
MANAGE THE PREMISES, AND PROVIDE FOR EXTERIOR MAINTENANCE AND UPKEEP.,
TO'ALLOW SUBTENANTS TO PROVIDE SERVICES AND AMENITIES OF COMPARABLE
QUALITY TO THOSE PREVAILING IN OTHER MARINA FACILITIES IN NORTHERN
CALIFORNIA, AND SHALL ARRANGE TO PROVIDE ADEQUATE SECURITY MEASURES TO
REASONABLY PROTECT PERSONS AND PROPERTY ON THE LEASED PREMISES.
LESSEE IS NOT REQUIRED TO DIRECTLY PROVIDE THE SERVICES AND AMENITIES,
BUT SHALE DO SO THROUGH SUBTENANTS,
THE ULTIMATE PURPOSE OF THIS LEASE FOR THE BENEFIT OF THE PUBLIC IS
THE COMPLETE AND CONTINUOUS USE OF THE'LEASE FACILITIES. ALL
FACILITIES AND SERVICES SHALL BE MADE AVAILABLE TO THE PUBLIC WITHOUT
DISCRIMINATION AS TO RACE, RELIGION, COLOR, CREED~ NATIONAL ORIGIN,
ANCESTRY, SEX OR SEXUAL PREFERENCE.
THE IMMEDIATE PURPOSE OF THIS LEASE IS THE DEVELOPMENT OF THE PREMISES
."'ND THE REALIZATION OF THE GREATEST'. POSSIBLE REVENUE THEREFROM '~Y
ESSEE AND DISTRICT.
IT IS AGREED THAT THE ULTIMATE AND IHHEDIATE PURPOSES ARE
CONSISTENT AND COMPATIBLE. ACCORDINGLY, LESSEE COVENANTS AND AGREES
TO bPERATE SAID PREMISES FULLY'AND CONTINUOUSLY TO ACCOMPLISH SAID
'PURPOSES.
B. COOPERATION AMONG LESSEES .'
1. LESSEE SHALL coOPERATE WITH ALL OTHER LESSEES OF THE
DISTRICT WHO WILL BE OPERATING ENTERPRISES IN THE VICINITY OF THE
LEASED PREMISES, AND SHALL CONDUCT ITS OPERATIONS SO AS TO AVOID
INTERFERENCE WITH THE OPERATIONS OF OTHER LESSEES. ANY DIFFERENCE OR
CONFLICT WHICH MAY ARISE BETWEEN LESSEE AND OTHER LESSEES WILL BE
ADJUSTED BY DISTRICT. IF THE OPERATIONS OF LESSEE ARE IMPAIRED
BECAUSE OF ANY ACTS OR OMISSIONS OF SUCH OTHER LESSEES, LESSEE SHALL
HAVE NO CLAIM AGAINST DISTRICT-ON THAT ACCOUNT.
ENVIRONMENT PROTECTION.
LESSEE SHALL TAKE ALL REASONABLE NE'ASURES TO:
1. AVOID ANY POLLUTION OF THE ATMOSPHERE, LAND OR
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WA'FER OR LITTERING'OF LAND OR WATER CAUSED B~ OR ORIGINATING IN~ ON OR
ABOUT LESSEE'S'-FACILITIES. -
Z. KEEP THE NOISE LEVEL ON THE LEASED PREMISES TO A
..U~NIMUM SO THAT PERSONS IN THE GENERAL .NEIGHBORHOOD WILL BE ABLE TO
~N~ORTAgLY ENJOY OTHER FACILITIES LEAS'ED BY LESSOR IN THE VICINITY OF
{E LEASED PREMISES.
3. KEEP THE LIGHTS-ON THE LEASED PREMISES FROM
ADVERSELY AFFECTING THE OPERATION OF BOATS 'IN. THE AREA.
4. PREVENT ALL POLLUTANTS, INCLUDING PETROLEUM
PRODUCTS OF ANY NATURE~ FROM ~EIN~ DISCHARGED INTO THE HARBOR WATERS~
LESSEE'S MANAGEMENT SHALL ~E PERSONALLY EXPERIENCED AND SKILLED
IN THE MANAGEMENT OF COMMERCIAL REAL ESTATE PROPERTIES.
LESSEE SHALL· REOUIRE THAT SUBTENANTS PRESENT EVIDENCE OF THEIR
EXPERIENCE AND SKILL IN MANAGING THE OPERATIONS CONTEMPLATED EY THEIR
SUBLEASES. ANY SUBTENANT SHALL KEEP EMPLOYED AT ALL TIMES~ THE '
APPROPRIATE'SUPERVISOR 'AND ANY NECESSARY ASSISTANTS~ AND'SHALL PROVIDE
'THAT THEIR SUPERVISOR REPRESENT'THE SUBTENANT IN ITS A~SENCE FOR ~HE
OPERATION OF THEIR BUSINESS, AND ALL DIRECTIONS GIVEN THE SUPERVISOR
SHALL BE 'AS ~INDING AS IF GIVEN TO THE SUBTENANT.
IN GENERAL~ THE DISTRICT SHALL GIVE ALL DIRECTIONS TO THE LESSEE'
~N RE~ARD TO SUBTENANTS~ EXCEPT IN CASE OF E~ERGENCY WHEN DIRECTIONS
ALL BE GIVEN DIRECTLY TO THE APPROPRIATE PARTY.
E. VIOLATION OF THIS ARTICLE
A VIOLA~IO'N OF THIS ARTICLE SHALL CONSTITUTE A-BREACH OF THIS
LEASE AND DISTRICT SHALL HAVE ALL RIGHTS AND' REMEDIES PROVIDED ~Y LAN
EXCEPT THAT SUCH A BREACH SHALL NOT ~E ~ROUNDS FOR TERMINATION OR
CANCELLAT[bN OF THIS LEASE.
ARTICLE X! - ~[gUIDATED DAMA~[~
'A. VIOLATION'AND AMOUNt. NOTWITHSTANDIN~ ANY OTHER LEASE
TERM, AND IN ADDITION TO ALL OTHER REMED)ES AVAILABLE TO DISTRICT FOR
VIOLATIONS OR BREACHES OF THIS LEASE, DISTRICT 'SHALL HAVE THE RIGHT TO
DEMAND AND LESSEE AGREES TO PAY LIQUIDATED DAMAGES IN THE SUM OF
ONE-ONE HUNDREDTH (1/100) OF THE SECURITY DE~GSIT REQUIRED BY THIS'
· LEASE FROM THE' DAY A WRITTEN DEMAND IS DELIVERED TO LESSEE AND FOR
EACH DAY A VIOLATION EXISTS OF,ANY OF THE FOLLOWING PROVISIONS:
LEASE PROVISIONS
ARTICLE IV
ARTICLE V
ART, ICLE VI
USES AND SERVICES
OPERATING SCHEDULE AND CONTROLLED PRI.CES
IMPROVEMENTS AND INYESTMENTS
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GENERAL CONDITIONS
ARTICLE IV CONSTRUCTION
,--. ' ARTICLE X OPERATIONS
- ARTICLE XV FINANCIAL REPORTS AND RECORDS
~'OCH DAMAGES ARE AND WILL CONTINUE TO BE IMPRACTIBLE AND EXTREMELY
DIFFICULT TO DETERMINE. EXECUTION OF THIS LEASE SHALL CONSTITUTE
AGREEMENT BY LESSEE AND DISTRICT THAT ACTUAL ~AM. AGES FOR BREACH OF. ANY
OF SAID PROVISIONS ARE AND WiLL CONTINUE TO BE.IMPRACTIBLE AND
EXTREMELY DIFFICULT TO DETERMINE A~D THAT ONE-ONE HUNDREDTHS (1/100)
OF THE'SECURITY DEPOSIT REQUIRED ~Y THIS LEASE PER DAY IS THE MINIMUM
VALUE OF THE COST AND ACTUAL DAMAGE CAUSED BY ANY VIOLATIONS NAMED IN
THIS ARTICLE.
LIQU!DATED DAHAGES SHALL NOT BE ASSESSED IF THE LESSEE STARTS AND
DILIGENTLY PURSUES A REMEDY WITHIN A REASONABLE TIME FROM ACTUAL.
RECEIPT OF SUCH WRITTEN.NOTICE, AND IN THAT CASE WILL NOT THEN BE -
CONSIDERED TO BE IN DEFAULT PROVIDED THAT THE VIOLATION DOES NOT.
CONSTITUTE A MATERIAL AND SIGNIFICANT BREACH OF THE LEASE SUCH THAT
COSTS ARE-BEING INCURRED BY DISTRICT AND/OR THE PUBLIC HEALTH AND
SAFETY ARE INVOLVED. THIS LIMITATION ON LIQUIDATED DAMAGES SHALL
EXTEND FOR A MAXIMUM OF THIRTY (30) DAYS FROM DELIVERY OF THE NOTICE
OF VIOLATION. SUCH DAMAGES SHALL NOT BE PAYABLE FOR ANY PERIOD PRIOR
TO WRITTEN NOTICE TO LESSEE FROM GENERAL MANAGER THAT A VIOLATION
EXISTS, AND FURTHER, SUCH DAMAGES SHALL BE ~AIVED UNLESS THE. BOARD OF
,.~ARBOR COMMISSIONERS DETERMINES THAT A VIOLATION EXISTS.
B. DECLARATORY RELIEF. LESSEE SHALL HAVE THE RIGHT TO HAVE
ANY COURT OF COMPETENT JURISDICTION DETERMINE WHETHER THERE HAS BEEN A
VIOLATION OF THIS ARTICLE; PROVIDED, HOWEVER, THAT ONCE A VIOLATION
HAS BEEN DETERMINED TO HAVE OCCURRED~ 'THE AGREED LIQUIDATED DAMAGES
SHALL BE ONE-ONE HUNDREDTH (1/100.) OF THE SECURITY DEPOSIT REQUIRED BY
THIS LEASE FOR EACH .DAY THE VIOLATION EXISTED AFTER WRITTEN NOTICE TO
LESSEE FROM GENERAL MANAGER THAT A VIOLATION EXISTS,
ARTICLE XII - PROTECTION OF LEASED PREMISES
LESSEE SHALL MAINTAIN AN ADEQUATE LIGHTING AND TAKE OTHER SECURITY
MEASURES AS REQUIRED BY THE DISTRICT OR THE CITY OF SOUTH SAN
FRANCISCO, ABOUT THE LEASED PREMISES IN SUCH A'MANNER AS TO MAXIMIZE
THE PROTECTION OF THE DISTRICT'S PROPERTY AND TO PROTECT ALL
INDIVIDUALS, FROM DAMAGE, INJURY, LOSS OR LIABILITY ARISING FROM USE
OF THE PREMISES BY THE.iLESSEE, iTS PATRONS OR CLIENTS, OR ANY OTHER
INDIVIDUAL.
ARTICLE X'III - COMPLIANCE WITH LAD!S AND REGULATIONS
A. LESSEE SHALL AT ALL TIMES OBSERVE AND COMPLY WITH, AND SHALL
..CAUSE ALL ITS EMPLOYEES TO OBSERVE AND-COMPLY WITH ALL, APPLICABLE
. AWS, ORDINANCES, REGULATIONS, ORDERS, AND DECREES OF ALL PUBLIC
AUTHORITIES HAVING JURISDICTION OVER OPERATI.ONS UNDER- THIS LEASE,
WHETHER NOT IN FORCE OR WHICH MAY HEREAFTER BE IN FOR~E.
· B. IF THE IMPOSITION OF ANY LAW, ORDER, ORDINANCE, REGULATION OR
DIRECTION SHALL BE DEEMED BY.LESSEE TO BE IMPROPER, ILLEGAL,
.~:~SSIVE, OR UNREASONABLE, 1T MAY AT ITS SOLE COST AND EXPENSE,
oPUTE AND CONTEST THE SAME IN ANY MANNER PROVIDED BY LAW.
~TICLE XIV - HOLD HARMLESS
A. LESSEE SHALl'DEFEND ALL SUITS BROUGHT AGAINST D!STRICT~ ITS
OFFICERS, AGENTS, OR EMPLOYEES, OR NAMING DISTRICT, ITS OFFICERS~
AGENTS', OR EMPLOYEES AS A DEFENDANT WHEREIN IT IS ALLEGED THAT
OPERATIONS BY LESSEE OR CONDITIONS ON THE LEASED PREMISES CREATE A
LIABILITY OF DISTRICT, ITS OFFICERS, AGENTS, OR EMPLOYEES, AND LESSEE
SHALL PAY ANY AND ALL JUDGMENTS AGAINST AND SAVE AND HOLD DISTRICT,
ITS'OFFICERS~' AGENTS, AND EMPLOYEES HARMLESS FROM ANY LIABILITY, COST~
EXPENSE, OR LOSS.ON ACCOUNT THEREOF, EXCEPT THAT JUDGMENTS SOLELY
BASED ON ACTS OR OMISSIONS OF DISTRICT, ITS OFFICERS, AGENTS, OR
EMPLOYEES NEED NOT BE PAID BY LESSEE AND FURTHER EXCEPT THAT LESSEE
NEED NOT HOLD DISTRICT,'ITS OFFICERS, AGENTS, OR EMPLOYEES HARMLESS
THEREFROM.
B. ~ISTRICT SHALL GIVE WRITTEN NOTICE TO LESSEE WITHIN TEN
DAYS AFTER ANY SUIT SHALL HAVE BEEN SERVED ON DISTRICT WHEREIN IT IS
ALLEGED THAT OPERATIONS BY THE LESSEE OR CONDITIONS ON THE LEASED
PREMISES CREATE A LIABILITY'OF THE DISTRICT. DISTRICT-SHALL GIVE
~RITTEN NOTICE TO LESSEE WITHIN THIRTY (30). DAYS AFTER THE FILING OF
ANY WRITTEN CLAIM AGAINST DISTRICT WHEREIN IT IS ALLEGED THAT
[~:ERATIONS BY THE LESSEE OR CONDITIONS ON THE LEASED PREMISES CREATE
ABILITY OF THE DISTRICT. IF SUCH NOTICE SHALL NOT BE GIVEN WITHIN
~ID PERIODS, DISTRICT SHALL INDEMNIFY'LESSEE AND HOLD 'IT HARMLESS
~OM ANY DAMAGES OR LOSS LESSEE MAY 'SUFFER AS A RESULT OF DISTRICT'S
FAILURE TO GIVE SUCH NOTICE. SUCH NOTICE, HOWEVER, SHALL NOT ~E
REQUIRED IN THOSE INSTANCES WHERE LESSEE SHALL ALSO HAVE OTHERWISE
RECEIVED .NOTICE OF'SUCH CLAIM OR SUIT.
ARTICLE XV -~FINANCIAL'REpORTs AND ~ECORDS * '* *
TO INSURE COMPLETE AND TIMELY RECEIPT OF RENTS .{MINIMUM AND
PERCENTAGE, UNADJUSTED AND ADJUSTED) BY DISTRICT FROM LESSEE DURING
THE TERM OF THIS LEASE, LESSEE SHALL INSTALL AND MAINTAIN'A SEPARATGE
SYSTEM OF A~COUNTS' AND RECORDS FOR THE BUSINESS CONDUCTED AT, ON AND
FROM THE LEASED PREMISES, AND SHALL KEEP TRUE, ACCURATE AND.COMPLETE
ACCOUNTS AND RECORDS, AND SHALL REQUIRE ITS SUBLESSEES,
CONCESSIONAIRES, AND LICENSEES, IF ANY, TO DO THE SAME.
.A. ~USINESS RECORDS. LESSEE SHALL INSTALL AND MAINTAIN A
SYSTEM OF ACCOUNTS AND RECORDS ~HICH, IN THE OPINION OF THE DISTRICT~
CONFORMS TO GOOD ACCOUNTING PRACTICE. THE SYSTEM OF ACCOUNTS AND
RECORDS SHALL BE SUBMITTED TO DISTRICT FOR REVIE~ AND APPROVAL PRIOR
COMPLETION OF ANY PHASE OF CONSTRUCTION'. NO CHANGEeSHALL BE MADE
THE SYSTEM OF ACCOUNTS AND RECORDS THEREAFTER BY LESSEE UNLESS SUCH
L,JANGE, , , HAS BEEN FIRST APPROVED IN WRITING BY DISTRICT. SUCH APPROVALS
BY DISTRIC~ SHALL NOT BE UNREASONABLY WITHHELD. AN~ DISPUTE SHALL'BE
THE TERM ".DISTRICT".INCLUDESiTHE CITY OF SO. SAN'FRANCISCO.
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PROCESSED IN. ACCORDANCE WITH THE PROCEDURES SET FORTH- IN ARTICLE XIX -
CLAIMS AND PROTEST~
· 1. SOURCE DOCUMENTS. THE BUSINESS RECORDS MUST BE
SUPPORTED BY SOURCE DOCUMENTS SUCH AS SALES SLIPS, UNBILLED ACCOUNTING
-=~CWMENTS, LEDGERS, BANK DEPOSIT RECEIPTS, SALES TAX RETURNS, CASH
[GISTER TAPES, SALES BOOKS, BANK BOOKS, PURCHASE INVOICES, AND OTHER
.,.~CORDS-AND DOCUMENTS REASONABLY NECESSARY TO VERIFY THE GROSS
RECEIPTS.REPORTED BY LESSEE. ALL RETAIL SALES AND CHARGES SHALL. BE
PROPERLY DOCUMENTED AND RECORDED PROMPTLY B.Y MEANS OF CASH REGISTERS
OR OTHER COMPARABLE DEVICES WHICH DISPLAY TO THE CUSTOMER THE AMOUNT
OF THE TRANSACTION AND AUTOMATICALLY ISSUE A RECEIPT. THE REGISTERS
SHALL RE EQUIPPED WITH DEVICES.WHICH LOCK IN SALES TOTALS AND OTHER
TRANSACTION RECORDS~ OR WITH COUNTERS WHICH ARE NOT RE-SETTABLE AND
~HI'CH RECORD TRANSACTION NUMBERS AND SALES DETAILS. FOR TRANSACTIONS
NOT RECORDED'.BY. MEANS OF CASH REGISTERS OR OTHER COMPARABLE DEVICES~
LESSEE SHALE 3SSUE SERIALLY NUMBERED TICKETS OR INVOICES FOR EACH SUCH
TRANSACTI.ON AND SHALL KEEP ADEQUATE RECORDS OF SUCH TICKETS OR
INVOICES BOTH, ISSUED :'.AND UNISSUED,
Z. LOCATION OF RECORDS. ALL RECORDS REQUIRED BY THIS
LEASE SHALL BE'KEPT AND MAINTAINED WITHIN SEVENTY-FIVE (75) MILES' OF
SAN MATEO,. SAN MATEO COUNTY, CALIFORNIA~ AND ALL SUCH RECORDS SHALL BE
SO KEPT AND MAINTAINED FOR NOT LESS THAN FIVE (5) YEARS AFTER DELIVERY
OF THE REQUIRED ANNUAL REPORTS FOR SUCH YEAR UNLESS THE WRITTEN
APPROVAL OF THE DISTRICT BE FIRST OBTAINED; PROVIDED, HOWEVER~ THAT
LESSEE NAY AT'REASONABLE TIMES REMOVE ANY.OR ALL RECORDS OR PERMIT OR
CAUSE THEM -TO. BE REMOVED FOR LEGAL OR ACCOUNTING PURPOSES OR FOR OTHER
PURPOSES PROMOTIVE OF AND CQNSIST.ENT WITH THESE PROVISIONS OF THIS
a-~.'. A S E.
3. DISTRICT'S ACCESS TO RECORDS. DISTRICT SHALL HAVE THE
~iGHT, AT ANY. REASONABLE TIME, AND FROM TIME TO TIME, AFTER GIVING
REASONABLE.NOTICE, TO DO ANY OR ALL OF THE FOLLOWING:
z. TO AUDIT SAID RECORDS; :'
"" b, T.O. BAUSE AN AUDIT OF SAID RECORDS TO ~E MADE';
c. T0":MAKE ABSTRACTS FROM SAID RECORDS;
d. :TO MAKE COPIES OF ANY OR ALL OF SAID RECORDS;
-' e..iTU.EXAMINE ANY OR ALL SUBLEASES~ LICENSES~ AND
CONCESSION AGREEMENTS~
..
~. TO MAKE COPIES OF ANY OR ALL SUBLEASES, LICENSES,
CONCESSION AGREEMENTS,'AND OTHER APPROPRIATE DOCUMENTS;
~. TO EXAMINE AND ~AKE COPIES OF L. ESSEE'S ARTICLES OF
INCORPORATION, BYLAWS, PARTNERSHIP AGREEMENT, LIST CF SHAREHOLDERS~
AND ANY O~HER DOCUMENT PERTINENT TO DETERMINING THE FORM OF AND
OWNERSHIP IN LESSEE AND ANY AMENDMENTS TO ANY OF SUCH ~OCUMENTS~
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h,. TO EXAMINE AND MAKE COPIES OF SALE~ TAX REPORTS,
AND ANY PORTION OR'ALL OF ANY INCOME TAX RETURNS APPLICABLE TO
LESSEE~S BUSInESS/ES UNDER THIS LEASE. LESSEE KNOWINGLY AND
SPE~IF!CALLY WAIVES ANY AND ALL RIGHTS OR PRIVILEGES REGARDING SAID
INCOME ~AX RETURNS THAT NIGHT OTHERWISE PREVENT THIER PRODUCTION AND
izh!S~ECTION .(OR COYPING) BY DISTRICT.
{ssEE SHALL MAKE ALL RECORDS SPECIFIED IN .THE NOTICE AVA)LABLE AT THE
"tIME SPECIFIED, IF REASONABLE, AND AT THE PLACE WHERE THE.RECORDS ARE
TO BE KEPT; PROVIDED-, HOWEVER, THAT DISTRICT NAY .HAVE SAID RECORDS
COPIED BY AN INDEPENDANT COPY SERVICE AT DISTRICT'S EXPENSE, TO ~EVIE~
IN ANOTHER LOCATION.
i.. THESE PR'OVISIONS, AS TO.DISTRICT ACESS TO RECORDS
SHALL BE REPEATED I'N EACH AND EVERY SUBLEASE OF THESE PREMISES TO
PROVIgE DISTRICT THESE SAME POWERS AND RIGHTS WITH RESPECT TO EACH
SUBTENANT.
B. STATEMENT~. WITHIN THIRTY (30) DAYS AFTER THE.CLOSE OF
EACH CALENDAR QUARTER (MARCH 31, JUNE 30, SEPTEMBER 30, AND DECEMBER
31), LESSEE SHALL SUBMIT TO-DISTRICT A QUARTERLY REPORT HHICH SHALL
INCLUDE A STATEMENT OF EARNINGS .AND GROSS RECEIPTS DURING THAT
QUARTER. 'EACH QUARTERLY STATEMENT SHALL BE ON. A FORM SUPPLIED BY THE
DISTRICT AND SHALL BE VERIFIED AND SIGNED BY A RESPOINSIBLE OFFICER OF
LESSEE, ON BEHALF OF LESSEE. WITHIN NINETY (90) DAYS AFTER THE
COMMENCEMENT OF THIS LEASE, LESSEE SHALL BY WRITTEN NOTICE ADVISE
DISTRICT OF THE CLOSING DATE OF LESSEE'S FISCAL YEAR AND SHALL BY
WRITTEN NOTICE ADVISE DISTRICT OF ANY CHANBE IN SUCH CLOSING ~ATE.
rb~ITHIN NINETY ¢90) DAYS AFTER THE' CLOSE OF THE FISCAL YEAR, LESSEE
IALL~.FURNISH DISTRICT AN ANNUAL FINANCIAL STATEMENT OF THE LESSEE,
tEPA~ED IN A WANNER APPROVED BY THE DISTRICT, VERIFIED AND SI~NED BY
'A"RESPONSI~LE oFFICER OF LESSEE, ON BEHALF OF LESSEE. IN ALL
FINANCIAL STATENENTS, THE TOTAL GROSS RECE[PTS FOR THE ACCOUNTI. NG YEAR
SHALL BE CLASSIFIED ACCORDING TO THE CATEGORIES OF BUSINESS
ESTABLISHED FOR PERCENTAGE RENTS AS SET FORTH IN THIS LEASE AND SHALL
BE PREPARED IN'ACCORDANCE WITH GOOD ACCOUNTING PRACTICES AND
PRINCIPALS.
C. UNDERSTATEMENT DF GROSS RECEIPTS. IF THE EXAMINATION AND
AUDIT OF THE RECORDS OF LESSEE BY DISTRICT DISCLOSES THAT THE GROSS
RECEIPTS HERE UNDERSTATED BY MORE THAN FIVE PERCENT ¢5X) FOR THE
PERIOD COVERED BY SUCH AUDIT, THE FULL COST OF THE AUDIT, AS
DETERMINED BY THE DISTRICT AUDITOR~ SHALL BE PAID BY LESSEE HITHIN
THIRTY (30) DAYS AFTER WRITTEN DEMAND AND LESSEE SHALL IMMEDIATELY PAY
THE ADDITIONAL PERCENTAGE RENT DUE, IF ANY~ PLUS INTEREST AT THE THEN
LEGAL RATE iN THE STATE OF CALIFORNIA FROM THE DATE WHEN SUCH
PERCENTAGE RENT WAS DUE. OTHERWISE, DISTRICT SHAL ~EAR,THE COST OF
SUCH AUDIT. SUCH PAYMENTS BY LESSEE SHALL BE WITHOUT PREJUDICE TO THE
RIGHT OF LESSEE TO RECOVER BACK THE AMOUNTS OF SUCH PAYMENTS TO THE
EXTEHT THAT THE SAME ARE UNWARRANTED AND ~ERE NOT DUE FROM LESSEE TO
DISTRICT~ PROVIDED~ HOWEVER, THAT ANY ACTION OR PROCEEDING THEREFORE
SHALL ~E COMMENCED BY LESSEE WITHIN SIXTY (40) DAYS AFTER SUCH.PAYMENT
~bILESS ANY DISPUTE HAS BEEN PROCESSED IN ACCORDANCE HIEH THE'
PROCEDURES SE'T FORTH IN ARTICLE XIX - CLAIMS AND PROTEST, AND IN SUCH
EVENT, ~UCH SIXTY (60) DAY PERIOD SHALL COMMERCE AFTER THE DECISION OF
THE.BOARD OF HARBOR COMMISSIONERS IS FINAL.
D. · CONFIDENTIAL INFORMATION. ALL INFORMATION OBTAINED BY
"'IS)RICT, ITS OFFICERS~ AGENTS, AND EMPLOYEES, REQUIRED TO BE PROVIDED
~ LESSEE BY THIS ARTICLE,. SHALL BE .TREATED AS CONFIDENTIAL EXCEPT IN
..~qY LITIGATION OR ARBITRATION PROCEEDINGS BETWEEN DISTRICT, LESSEE'
SUBTENTANT, OR ENCUMBRANCE HOLDER AND EXCEPT ALSO THAT DISTRICT NAY
DIVULGE SUCH-INFORMATION TO A GOVERNMENTAL.AGENCY., OR TO ENCUMBRANCE
HOLDER OR ITS REPRESENTATIVE, ON DEMAND.
ARTICLE X~I ' ASSIGNME~_SUBLETTI'~G AND HYPOTHECATION
A. LESSEE SHALL NOT SUFFER ANY PERSON TO OCCUPY OR USE THE
LEASED PREMISES.OR ANY PORTION THEREOF EXCEPT IN'THE NORMAL COURSE OF
.BUSINESS FOR'THE USES EXPRESSLY PERMITTED'HEREUNDER WITHOUT THE PRIOR
WRITTEN APPROVAL OF' DISTRICT. LESSEE SHALL NOT ASSIGN OR HYPOTHECATE
THIS LEASE OR ANY INTEREST THEREIN OR SUBLET THE LEASED PREMISES OR
ANY PART THEREOF OR ANY RIGH'T OR PRIVILEGE APPURTENANT THERETO WITHOUT
THE PRIOR WRITTEN APPROVAL OF DISTRICT, WHICH SHALL NOT BE
UNREASONABLY WITHHELD.
t. ~ITIONS FOR SUBLEASING. EACH SUBLEASE SHALL'
PROVIDE THAT, IF LESSEE DEFAULTS OR BREACHES THIS LEASE, AND IF'THE
SUBLESSEE IS NOTIFIED 'OF LESSEE'S DEFAULT OR BREACH AND IF SO
INSTRUCTED BY DISTRICT, SUBLESSEE SHALL MAKE RENTAL PAYMENTS'TO
DISTRICT OR ENCUMBRANCE HOLDER. LESSEE' S~ALL NOT ACCEPT, DIRECTLY OR
INDIRECTLY, 'MORE THAN TWELVE (1Z) MONTHS PREPAID RENT FROM ANY
'"JBLESSEE. SUBRENTS SHALL BE FIXED AT THE FAIR RENTAL VALUE EOR THE-
1EMISES. SUBLEASES SHALL BE MADE EXPRESSLY SUBJECT TO THIS LEASE AND
--WALL PERMIT THE SUBLESSEE-TO PERFORM ANY ACT REQUIRED OF LESSEE UNDER
THIS LEASE. SUBLEASES SHALL EXPRESSLY REQU1RE THE SUBLESSEE'TO COMPLY
WITH THE TERMS~ COYENANTS, AND CONDITIONS OF THIS LEASE ON THE
SUBLEASED PREMISES, EXCEPT THAT ALL PERCENTAGE RENTS AND SUBRENTS
SHALL BE PAID TO LESSEE, AND EACH SUBLEASE SHALL ALSO INCLUDE SUCH
OTHER TERMS, COVENANTS AND CONDITIONS GENERALLY CONSISTENT WITH --
PROVISIONS OF OTHER LEASES OF THE DISTRICT FOR SIMILAR USES. LESSEE
SHALL, PROMPTLY AFTER EXECUTION OF'EACH SUBLEASE, NOTIFY DISTRICT OF
THE NAME AND MAILING ADDRESS OF THE SUBLESSEE AND SHALL,'PROMPTLY'
AFTER DEMAND, AT DISTRICT'S ELECTION, EITHER PROVIDE DISTRICT WITH A
COPY OF THE SUBLEASE OR PERMIT DISTRICT. TO EXAMINE AND COPY THE
SUBLEASE. .
Z.' THE VOLUNTARY OR OTHER SURRENDER OF THis LEASE BY
LESSEE, OR MUTUAL CANCELLATION THEREOF, SHALL NOT ~ORK A MERGER~ AND
SHALL, AT'THE OPTION OF DISTRICT, TERMINATE ALL OR ANY EXISTING
SUBLEASES OR MAY,. AT THE OPTION OF. DISTRICT, OPERATE. AS. AN ASSIGNMENT.
~0 DISTRICT OF ANY OR ALL SUCH'SUBLEASES.
3. CONDITIONS FOR ASSIGNMENT OF LEASEHOLD. ANY
ASSIGN!~ENT OR SUBLEASE TO 'AN INTERMEDIARY FE.R THE-PUrPOSE OF FURTHER
SUBLETTING TO SUBTENANT OPERATORS, OR TAKING OVER LESSEE'S FUNCTIONS
~ I~ANAGER O~ .ALL OR SUBSTANTIALLY ALL OF THE LEASED P~Ei4ISES SHALL BE
[E~iED AN ASSIGNHENT OF THE LEASEHOLD. LESSEE SHALL FILE A REQUEST TO
.~.$~IGN LEASEHOLD TO WHICH SHALL BE ATTACHED A COi~PLETED PROPOSER'S
QUESTIONNAIRE PREPARED BY T~IE PROSPECTIVE ASSIGNEE. CONCURRENTLY WITH
-ZOz
FILING THE REQuEST. TO ASSIGN'LEASEHOLD, LESSEE SHALL PAY IN'CASH OR
CERTIFIED CASHIER'S CHECK THE SUM OF FIVE HUNDRED DOLLARS ($500.00) TO
ENABLE'DISTRICT TO ADEQUATELY INVESTIGATE THE PROPOSED ASSIGNEE'S
QUALIFICATIONS AS A PERMITTED ASSIGNEE. IF THE PROPOSED ASSIGNEE'S
NET WORTH ON THE DATE OF ASSIGNMENT IS NOT EQUAL TO OR GREATER THAN
...S~EE'S NET' WORTH AT THE COMMENCEMENT OF THIS LEASE, DISTRICT MAY
QUIRE LEssEE TO GUARANTEE~ sUCH ASSIGNEE'S OBLIGATIONS HEREUNDER FOR
. ]CH PERIOD AS DISTRICT DEEMS ADVISABLE.~ NET NORTH SHALL.MEAN THE
AMOUNT BY WHICH THE TOTAL OF ALL ASSETS SHALL EXCEED THE TOTAL OF ALL
LIABILITIES AS DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES AS APPROYED B~"THE DISTRICT AUDITOR. DISTRICT
SHALL APPROVE OR DISAPPROVE ANY RE~UE'STS TO .ASSIGN LEASEHOLD WITHIN
THIRTY.(30) DAYS OF RECEIPT OF SUCH REQUEST. IF DISTRICT DOES NOT
APPROVE OR DISAPPROVE THE REQUEST WITHIN SAID THIRTY
LESSEE HAS' NOTIFIED DISTRICT BY REGISTERED MAIL THAT THE REQUEST TO
ASSIGN LEASEHOLD HAS BEEN DULY MADE AND THE SUM FOR.INVESTIGATION OF
THE PROSPECTIVE ASSIGNEE HAS BEEN DULY. PAID~ AND THAT THIRTY (30) DAYS
HAVE BEEN ELAPSED WITHOUT APPROVAL OR DISAPPROVAL BY DISTRICT~ THEN IF
DISTRICT DOES NOT APPROVE OR DISAPPROVE THE REQUEST TO ASSIGN
LEASEHOLD WITHIN TEN (10) DAYS OF SUCH NOTIFICATION~ DISTRICT SHALL
DEEMED TO HAVE APPROVED THE REQUEST TO ASSIGN LEASEHOLD. IN THE EVENT
DISTRICT DISAPPROVES THE REQUEST TO ASSIGN LEASEHOLD~ DISTRICT.AGREES
TO SUBMIT.THE MATTER TO BINDING ARBITRATION~ UTILIZING THE SERVICES OF
A RETIRED SAN MATEO COUNTY JUDGE AS ARBITRATOR, IF AVAILABLE~ OR
CHOOSING A SAN MATEO COUNTY JUDICIAL ARBITRATOR. BY THE SAME MEANS USED
FOR SAN MATEO COUNTY SUPERIOR COURT ACTIONS.
THE CONSIDERATION PASSING TO LEssEE ~ROM SUCH ASSIGNEE UPON
TRANSFER OF LESSEE,S INTEREST IN .THIS LEASE TO A DISTRICT-APPROVED
'"'~RSON OR ENTITY SHALL NOT BE INCLUDED AS GROSS RECEIPTS FOR'THE
~TERMINATION OF RENT.- UPON ASSIGNMENT OF LESSEE'S INTEREST IN THIS
.~ASE TO A DISTRICT-~PPROVED ASSIGNEE WHO HAS UNCONDITIONALLY ASSUMED
THE -OBLIGATIONS IMPOSED BY THIS LEASE, LESSEE AND ITS PREDECESSORS IN
INTEREST SHALL BE RELIEVED OF ALL OBLIGATIONS HEREUNDER ARISING AFTER
THE DATE OF SUCH TRANSFER.
B. ~YPOTHECATION'. LESSEE MAY, WITH THE PRIOR WRITTEN APPROVAL
OF DISTRICT, GRANT A SECURITY INTEREST TO THIS LEASE FOR THE PURPOSE
OF FINANCING CONSTRUCTION~ INCLUDING "MAJOR REPAIRS" AND "MINOR
REPAIRS" SUBJECT TO COMPLIANCE WITH EACH AND EVERY CONDITION THAT
FOLLOWS. FINANCING INCLUDES BOTH THE CONSTRUCTION (OR INTERIM LOAN)
AND THE TAKE-OUT (OR'PERMANENT OR LONG-TERM) LOAN.. DISTRICT SHALL.NOT
UNREASONABLY WITHHOLD APPROVAL.
1. NO SECURITY INTEREST IN THIS LEASE (WHICH TERM SHALL BE
DEEMED TO INCLUDE THE LEASEHOLD MORTGAGE OR'DEED OF TRUST, THE NOTE-
EVIDENCING ANY INDEBTEDNESS SECURED BY SUCH LEASEHOLD MORTGAGE OR DEED
OF TRUST AND ALL DOCUMENTS EVIDENCING ~HE COMMITHENT OF FINANCING)
SHALL EXTENO TO OR AFFECT THE FEE, THE REVERSIONARY INTEREST~ OR THE
ESTATE OF DISTRICT IN AND TO ANY LAND OR DISTICT-O~NED IMPROVEMENTS
NOW OR HEREAFSER ERECTED ON THE LEASE PRH'ISES.
Z. ANY SECURITY INTEREST IN THIS LEASE SDHALL BE GRANTED
"'DR ONLY THE .FOLLOWING PURPOSES: (1) TO FINANCE CONSTRUCTION OF
iMMANENT IMPROVEMENTS AND STRUCTURES UPON THE DEHISED PREMISES~
3 PROVIDE ~TAKE-OUT" FINANCING OF ANY CONSTRUCTION LOAN NOT TO EXCEED
THE GREATER OF NINETY PERCENT (90%) OF THE APFRAISED VALUE OF THE
-Z1-
IMPROVEMENTS ON TH'Em'DEMISED PREMISES, (3) TO REFINANCE TH~
CONSTRUCTION NOT TO EXCEED EIGHTY-FIVE PERCENT CB§%) OF THE APPRIASED
VALUE OF THE II~PROVEMENTS ON THE DEMISED PREMISES AND (4) TO FINANCE
LES~EE'S CAPITAL ADDITIONS AND EQUiPMENT~ TENANT IMPROVEMENTS~
A_..,CQUISITIONS AND/OR REPLACEMENTS REASONABLY REQUIRED IN PURSUIT OF ITS
)St, NESS ACTIVITIES ON THE PREMISES.
.... NO SECURITY INTEREST IN THIS LEASE OR ASSIGNMENT THEREOF
SHALL BE BINDING UPON DISTRICT IN THE ENFORCEMENT OF ITS RIGHTS UNDER
THIS LEASE, NOR SHALL DISTRICT BE DEEMED.TO HAVE "ANY NOTICE .THEREOF~
UNLESS .SUCH SECURITY INTEREST. COMPLIES WITH'EACH AND EVERY PROVISION
OF THIS ARTICLE PERTAINING TO SUCH,. SECURITY INTEREST,
3. NO SECURITY I'NTEREST IN THIS LEASE SHALL BE'CREATED WITH
NOR ASSIGNED TO ANY PERSON OR ENTITY, NATURAL OR ARTIFICIAL EXCEPT AN
INSTITUTIONAL· LENDER (HEREIN CALLED "ENCUMBRANCE HOI.]DER") DIHICR SHALL
MEAN ANY BONAFIDE .INSTITUTION AUTHORIZED UNDER THE LAIRS OF '[HE STATE
OF CALIFORNIA TO LEND. HONEY' ON THE SECURITY OF AN INTEREST oR
INTERESTS IN REAL PROPERTY, INCLUDING BUT NOT LIMITED. TO, AN 'INSURANCE ''
COMPANY OR TRUST COMPANY OR REAL' ESTATE INVESTMENT TRUST MORTGAGE
TRUST OR MUTUAL FUND OR PENSION AND WELFARE PROFIT SHARING FUND OR
ENDOW.NMENT FUND WITH AN' INVESTMENT PORTFOLIO OF NOT LESS THAN TEN
MILLION DO-L. LARS ($10,000,000), A CHARITABLE OR NON-PROFIT CORPORATION
OR ASSOCIATION WITH AN iNVESTMENT PORTFOLIO OF NOT LESS THAN FIVE.
EILLION DOLLARS ($5,000,000), ANY CALIFORNIA OR FEDERALLY CHARTERED
CORPORATIONS (IF LEGALLY EMPOWERED TO' MAKE LOANS CONTEMPLATED BY THIS
LEASE), UNLESS SPECIFICALLY ALLORED AND. AP. PROVED BY THE DISTRICT IN
WRITING. ,
4. NO SECURITY INTEREST IN THIS LEASE OF{ ASSIGNMENT THEREOF
1ALL BE VALID UNLESS ALL OF THE FOLLOWING CONDITIONS ARE MET.'
[. AT THE TIME OF MAKING SUCH SECURITY INTEREST THIS
LEASE IS IN FDLL FORCE AND EFFECT; AND .-.
-b. SUCH SECURITY INTEREST SHALL HAVE BEEN EXPRESSLY
MADE 'SUBJECT TO THE TERMS, COVENANTS, AND CONDITIONS OF THIS LEASE)
AND
C'. SUCH SECURITY INTEREST SHALL EXPRESSLY PROVIDE THAT
ENCUMBRANCE HOLDER SHALL PROVIDE EVIDENCE TO DISTRICT THAT ENCUMBRANCE
HOLDER HAS ~.CCEPTED OR APPROVED THE COMPLETED II~,PROVEMENTS AND THAT
THE IMPROVEMENTS HAVE BEEN ACCEPTED BY THE LENDER TO THE EXTENT THAT
THE TAKE-OUT FINANCING CAN BE PUT IN EFFECT. i
'.. d. SUCH SECURITY INTEREST SHALL EXPRESSLY PROVIDE THAT
ANY PROCEEDS FRO;4 INSURANCE, INCLUDING FiRE OR EXTENDED COVERAGE~
SHALL E:E USED FOR REPAIR OR REBUILDING OF THE LEASEHOLD IMPROVEMENTS
AND SUCH OTHER EXPENSES AS ARE'"
E,,F'RESSLY. REQUIRED TO BE PAID FROM SUCH
pROCEEDS BY '[HIS LEASE. SUCH SEC. URITY INTEREST MAY PROVIDE THAT AFTER
SUCH PROCEEDS HAVE BEEN SO APPLiED~ AN'~' REMAINING BALANCE~.WHICH WOULD
THEN ]~;E PAYABLE TO LESSEE, COULD ]9. E USED TO REPAY ALL OR PART OF '[HE
O.~.UTSTANDING LOAN SECURED BY SUCH SECURITY IN~.EREST.
· . ".e. SUCH SECURITY"INTEREST SHALL EXPRESSLY PROVIDE THAT
ALL ,NOTICES OF DEFAULT UNDER THE NOTE AND DEED .OF TRUST OR LEASEHOLD
MORTGAGE MUST BE SENT TO DISTRICT AND ~ESSEE, AND THAT DISTRICT SHALL
,u. AVE TH~ RIGHT, BUT NOT THE OBLIGATION, TO CURE THE DEFAULT OR CAUSE
IE°"DEFAULT TO BE ~URED IF LESSEE FAILS' TO DO SO.. DISTRICT SHALL HAVE
IENTY (ID) DAYS IN WHICH TO CURE ANY DEFAULT OR TO CAUSE ANY DEFAULT
~'~ BE CURED AFTER THE TIME FOR LESSEE TO CURE 1T HAS EXPIRED. ANY
SUBLESSEE OR .SUBTENANT OF SUCH SUBLEASE OF THE LEASED PREMISES, SHALL
HAVE THE RIGHT,.BUT NOT THE OBLIGATION, TO' CURE 'ANY DEFAULTWITHIN THE
PERIOD-PERMITTED FOR DISTRICT TO CURE SUCH DEFAULT. .IF ANY.SUCH
SUBLESSEE OR'SUBTENANT 'OF· A' SUBLEASE CURES'ALL'LESSEE'S DEFAULTS THEN'
EXISTING, SUCH SUBLESSEE,OR SUBTE~ANT'S POSSESSION AND use SHALL NOT
BE'DISTURBeD BY ENCUMBRANCE.HOLDER AS LONG AS THE SUBLESSEE OR
SUBTENANT PERFORMS ITS SUBLEASE PROVISIONS AND CONTINUES TO PERFORM
THE OBLIGATIONS.OF THE LESSEE, INCLUDING PAYMENT O~ RENT TO THE
DISTRICT AND ~UMS DUE THE ENCUMBRANCE HOLDER ACCORDING TO THIER ..
RESPECTI~rE INTERESTS. .'. . .
,. ~. 'DISTRICT SHALL HAVE RECEIVED WRITTEN NOTICE OF THE
MAKING OF SUCH SECUIRTY INTEREST WITHIN FIVE ¢5) DAYS AFTER THE
EXECUTION AND DELIVERY OF SUCH SECURITY INTEREST AND SUCH SECURITY
INTEREST GR ABSTRACT THEREOF SHALL HAVE BEEN RECORDED WITHIN 'TEN
DAYS AFTER.THE EXECUTION AND DELIVERY THEREOF.. . :"
5. IF ENCUMBRANCE HOLDER ACQUIRED LESSEE'S INTEREST IN THE
LEASE AS A RESULT OF A SALE UNDER THE SECURITY INTEREST PuRsUANT TO. A
JUDGMENT OF FORECLOSURE OR THROUGH ANY TRANSFER IN LIEU OF
,r.~RECLOSURE, INCLUDING, WITHOUT' L'IM/TATION, PURCHASE AT TRUS~ DEED
~ iLE, SUCH ENCUMBRANCE-HOLDER SHALL HAVE THE PRIVILEGE OF TRANSFERRING
'S INTEREST IN SUCH LEASE TO A WHOLLY OWNED SUBSIDIARY CORPORATION
~iTHOUT THE PRIOR CONSENT OF DISTRICT, AND IN.SUCH EVENT, SUCH-
ENCUMBRANCE H~LDER SHALL BE RELIEVED OF ANY FURTHER LIABILITY UNDER
THIS LEASE ARISING FROM AND AFTER SUCH TRANSFER.
6. ENCUMBRANCE HOLDER SHALL HAVE THE RIGHT, AT ANY TIME
DURING THE TERM 'OF THE OUTSTANDING SECURITY INTEREST AND WHILE THIS
LEASE-IS IN FULL FORCE AND.EFFECT, TO DO ANY ACT OR THING REQUIRED BY
THIS LEASE TO BE PERFORMED BY LESSEE IN ORDER TO PREVENT ~ FORFEITURE
OF LESSEE'S RIGHTS HEREUNDER, AND ALL SUCH ACTS OR THINGS SO DONE
SHALL PREVENT A FORFEITURE OF LESSEE'S RIGHTS HEREUNDER AS IF DONE BY
LESSEE,.
?. WRITTEN CONSENT OF ENCUMBRANCE HOLDER SHALL BE OBTAINED
PRIOR TO ANY 'AMENDMENT TO THIS LEASE. "
EACH AND.ALL OF THE PROVISIONS, AGREE~ENTS,.TERMS~
COVENANTS, AND CCNDITIONS OF THIS LEASE TO ~E PERFORPED, KEPT AND
'OBSERVED BY DISTRICT AND L~SSEE SHALL BE BINDING UPO~ THE HEIRS,
EXECUTORS, ADMINISTRATORS, SUCCESSORS, AND ASSIGNS O~ DISTRICT AND
LESSEE, AND ALL RIGHTS, PRIVILEGES AND BENEFITS ARISING UNDER THIS
LEASE IN FAVOR OF DISTRICT, LESSEE AND ENCONBRANCE HOLDER SHALL BE
· "'WAILABLE IN FAVOR OF THE. HEIRS, E~ECUTORS~ ADt~iNISTRA~ORS,
JCCESSORS~ AND ASSIGNS THEREOF RESPECTIVELY, PROVIDED, HOWE~ER~ THAT
ANY ASSIGNMENT, H~P'OTHECATION, OR.SUBLETTING BY OR THROUGH LESSEE OR
ENCOMBR~NCE HOLDER IN VIOLATION 'OF THE PROVISIONS OF THIS LEASE SHALL
BE VOID-, AND' NO RIGHTS WHATSOEVER SHALL BE CONFERRED THEREBY.
C. ~ HYPOTHECATION OR ASSIGNMENT FOR BENEFIT OF CREDITORS_
"
A GENERAL ASSIGNMENT BY LESSEE FOR THE BENEFIT OF CREDITORS,
;SHALL CONSTITUTE A BREACH OF THIS LEASE BY LESSEE AND BE CAUSE FOR
IMMEDIATE TERMINATION OF THIS LEASE BY DISTRICT, ANYTHING IN THIS.
LEASE TO THE' CONTRARY NOTWITHSTANDING. IN THE EVENT THE LEASE IS
TERMINATED BY THE DISTRICT FOR THE ABOVE CAUSE, THE ENCUMBRANCE HOLDER
SHALL HAVE THE RIGHT TO-ASSUME THF-. LEASE, A.S AN ASSIGNEMENT, WITHOUT
PRIOR 'APPROVAL' OF THE DISTRICT ANI~ SAID ASSIGNMENT SHALL
CONSTITUTE A BREACH OF' THIS 'LEASE. ENCUMBRANCE HOLDER SHALL
THEREAFTER BE REQUIRED TO FOLLOW ARTICLE XVI A.3~ IN REQUESTING
ASSIGNMENT OF. THE LEASE TO A NEW MANAGING ENTITY.
ARTICLE XVII - ONNERSHI'P OF LESSEE
A. ANY VOLUNTARY CHANGE IN LEGAL STATUS OF LESSEE, INCLUDING;
WITHOUT LIMITATION, A CHANGE TO A SOLE PROPRIETORSHIP, PARTNERSHIP~
CORPORATION, JOINT VENTURE, OR ANY OTHER ENTITY, NATURAL OR
ARTIFICIAb, OR ANY VOLUNTARY TRANSFER OF OR ALTERATION IN THE RATIO OF
THE EVIDENCES OF OWNERSHIP INTERESTS IN LESSEE (INCLUDING, WITHOUT
LIMITATION, SHARES OF STOCK), SHALL BE DEEMED AN ASSIGNMENT PROHIBITED.
BY ARTICLE XVI - ASSIGNMENT, SUBLETTING AND HYPOTHECATION, UNLESS THE
PRIOR WRITTEN'CONSENT OF THE DISTRICT-BE OBTAINED. ANY DISPUTE SHALL
BE PROCESSED IN ACCORDANCE WITH THE PROCEDURE SET FORTH IN ARTICLE
,.,Y~[X-CLAIMS AND PROTESTJ THE SALE. OF LIMITED. PARTNERSHIP SHARES TO
~VESTORS, OR THE TRANSFER OF A PORTION OF THE LIMITED PARTNERSHIP
~ARES FROM TIME TO TIME SHALL NOT BE DEEMED A CHANGE IN THE LEGAL
'~'~ATUS OF LESSEE, AND SHALL NOT BE DEEMED A PROHIBITED ASSIGNMENT,
_...B. ANY TRANSFER OF THIS LEASE OR ANY'INTEREST THEREIN FROM
LESSEE BY CORPORATE REORGANIZATION, MERGER, CONSOLIDATION,
LIQUIDATION, SHALL BE DEEMED AN ASSIGNMENT PROHIBITED BY ARTICLE XVI -
ASSIGNMENT, SUBLETTING AND HYPOTHECATION, UNLESS THE' PRIOR WRITTEN
CONSENT OF DISTRICT BE OBTAINED. SUCH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD BY DISTRICT. ANY DISPUTE SHALL BE PROCESSED IN
ACCORDANCE WITH THE PROCEDURE SET FORTH IN ARTICLE XIX- - CLAIMS AND
PROTEST, -.
'C. ANY APPOINTMENT OF A RECEIVER TO TAKE POSSESSION OF THE'
LEASED PREMISES OR THE IMPROVEMENTS, OR OF LESSEE'S INTEREST IN THE
LEASEHOLD OR 'LESSEE'S OPERATIONS ON THE LEASED PREMISES FOR. ANY
REASON, OR THE SUBJECTION OF ANY RIGHT OR INTEREST OF LESSEE DIRECTLY
RELATED TO THE BUSINESS CONDUCTED ON, AT OR FROM THE LEASED PRED;ISES
TO ATTACHMENT, EXECUTION, OR OTHER LEVY, OR TO SEIZURE UNDER LEGAL
PROCESS, IN ANY SUCH EVENT, UNLESS THE APPOINTMENT OF THE RECEIVER OR
ATTACHMENT, EXECUTION, OR OTHER LEVY, OR SEIZURE UNDER LEGAL PROCESS
IS PURSUANT TO BANKRUPTCY, OR IS RELEASED, AND ALL CONSEQUENT ORDERS,
ADJUDICATIONS, CUSTODIES, AND SUPERVISORS ARE DISMISSED, VACATED, OR
.J~.THERi4ISE PERMANENTLY STAYED OR TERMINATED .WITHIN NINETY (90) DAYS
=TER THE APPOINTMENT,. FILING, OR OTHER INITIAL EVENT, SUCH .EVENT
tALL BE DEEMED AN ASSIGNMENT PROHIBITED BY ARTICLE XVI - ASSIGNMENT~
'SEIBLETTING AND HYPOTHECATION. ANY EXTENSION OF TIME NAY'ONLY BE
~iRANTED UPON THE CONDITION THAT A WRITTEN REQUEST FO.~ EXTENSION OF
-Z4-
TIME IS FILED WITH THE DISTRICT PRIOR TO THE EXPIRATION OF SAID NINETY
(90) DAY PERIOD, AND UPON SUCH FURTHER CONDITIONS AS THE DISTRICT, IN
ITS SOLE DISCRETION, SHALL SEE FiT.TO IMPOSE;.
, D. ANYTHING IN THIS LEASE TO THE CONTRARY NOTWITHSTANDING, ANY
DEFAULT'OR BREACH OF THIS ARTICLE SHALL BE CURED, IF ENCUMBRANCE
'~'~'~LDER ELECTS TO PURSUE ITS. RIGHT TO FORECLOSE ON ITS SECURITY
ITEREST AND NOTIFIES DISTRICT IN WRITING OF ITS INTENTION TO DO SO
~.,.THIN TWENTY (ZO) DAYS AFTER RECEIVING NOTICE OF INTENTION TO
TERMINATE BY DISTRICT, AS PROVIDED IN ARTICLE XCIII, DEFAULT OR
BREACH, AND EACH~AND'EVERY CONDITION OF ITS. RIGH~ T.O FORECLOSE OF ITS
SECURITY INTEREST OcCuRs.
ARTICLE iXVIII '.~[[~ULT OF BREACH' · ."' .
A. LESSEE. SHALL NOT BE CONSIDERED IN'DEFAULT OR BREACH AS TO ANY
PROVISION OF.THIS LEASE WHEN SUCH DEFAULT OR BREACH'IS THE RESULT OF
COMPLIANCE WITH, OR PURSUANT TO, ANY PROCESS, ORDER OR DECREE OF ANY
COURT OR REGULATORY BODY OF COMPETENT JURISDICTION.
B.. EACH TERM AND EAcH pROvIsION IN THIS LEASE TO BE'KEPT
OBSERVED, OR PERFORMED BY LESSEE SHALL BE~CONSTRUED TO BE BOTH A
COVENANT AND A CONDITION.
C. IF LESSEE SHAL~ DEFAULT OR BREACH ANY COVENANT OR CONDITIONS
TO BE KEPT, OBSERVED, OR PERFORMED BY LESSEE, DISTRICT SHALL GIVE
WRITTEN NOTICE OF DEFAULT OR BREACH TO LESSEE AND ENCUMBRANCE HOLDER.
LESSEE SHALL HAVE THIRTY (30) DAYS AFTER ~ERVICE OF SAID NOTICE IN
WHICH TO CURE', REMEDY, AND CORRECT SAID'DEFAULT OR BREACH, OR IN WHICH
TO COMMENCE AND.DILIGENTLY PURSUE. THE PERFORMANCE'OF THE THING OR WORK
~QUIRED TO BE DONE TO CURE, REMEDY, AND CORRECT SAID DEFAUL~ OR
:EACH. SHOULD LESSEE'FAIL TO SO CURE, REMEDY, AND CORRECT SAID
.;FAULT OR BREACH, OR TO COMMENCE.AND DILIGENTLY PURSUE SUCH-
CORRECTIVE REMEDIAL ACTION WITHIN'AND DURING SAID THIRTY (30) DAY
PERIOD,' OR' SHOULD THEREAFTER FAIL TO DILIGENTLY PURSUE SUCH. CORRECTIVE
ACTION, DISTRICT SHALL HAVE THE RIGHT, BUT NOT THE O~LIGATION, TO
TERMINATE THE LEASE~ SUBJECT TO THE RIGHTS OF ENCUMBRANCE HOLDER AS
SET FORTH IN'THIS ARTICLE AND IN ARTICLE XVI - ASStGNMENT~ SUBLETTING
AND HYPOTHECATION. DISTRICT SHALL MAIL TO LESSEE AND ENCUMBRANCE
HOLDER NOTICE OF INTENTION TO TERMINATE OR NOTICE OF INTENTION 'TO
REENTER. .
D. IF. A.DEFAULT OR BREACH HAS O~CURRED AND HAS NO~ BEEN CURED BY
LESSEE OR ENCUMBRANCE HOLDER IN ACCORDANCE WITH THIS ARTICLE AND
ARTICLE XVI -i ASSIGNMENT, SUBLETTING AND HYPOTHECATION~ OF THIS
ARTICLE, A NOTICE OF TERMINATION MAY BE SENT BY DISTRICT TO LESSEE.AND
ENCUMBRANCE. HOLDER AND TEN (10) DAYS AFTER RECEIPT O~ SUCH NOTICE,
UNLESS SAID DEFAULT OR BREACH HAS BEEN CURED, THIS LEASE SHALL BE
TERMINATED. UPON SUCH"TERMINATION, LESSEE'S RIGHT TO POSSESSION OF
THE PREMISES SH~LL TERMINATE AND LESSEE SHILL SURRENDER POSSESSION
THEREOF IMMEDIATELY. IN NO EVENT SHALL DISTRICT TERMINATE-THIS LEASE
UNTIL AT LEAST NINETY (90) DAYS FOLLOWING ~HEF~ECEiPT OF THE NOTICE OF
DEFAULT OR BREACH BY ENCUMBRANCE HOLDER.
-2:5-
E, DISTRICT .SHALL NOT EXERCISE ANY REM.EDY AVAILABLE TO IT FOR
BREACH OR DEFAULT BY LESSEE AND SHALL NOT TERMINATE THIS LEASE DUE TO
ANY DEFAULT Od.BREACH BY LESSEE UNLESS DISTRICT SHALL HAVE SENT
WRITTEN NOTICE OF DEFAULT OR BREACH TO ENCUMBRANCE HOLDER.· UPON
REC~iPT~OF SUCH NOTICE, ENCUMBRANCE HOLDER SHALL HAVE THE RIGHT TO
.~URE ANY DEFAULT OR BREACH IN THE FOLLOWING MANNER, AND IF ALL
:F~ULTS OR BREACHES ARE SO CURED, THIS. LEASE SHALL REMAIN IN FULL
IRCE AND EFFECT;
1. IF THE. DEFAULT OR BREACH IS IN'THE PAYMENT OF RENT,
TAXES, INSURANCE PREMIUMS, UTILITY CHARGES,' LIQUIDATED DAMAGES, OR ANY
OTHER SUH OF-MONEY WHATSOEVER, SUCH SUM OR SUMS SHALL BE'PAID TO
DISTRICT, OR OTHER PROPER PAYEE, N'ITHIN TWENTY (ZO) DAYS AFTER SENDING
THE NOTICE OF INTENTION TO TERMINATE OR NOTICE IF INTENTION TO REENTER
TO ENCUMBRANCE HOLDER.
Z..-- IF THE BREACH OR DEFAULT IS OTHER THAN AS SPECIFIED IN
SUBARTiCLE I ABOVE, SUCH DEFAULT OR BREACH SHALL BE CURED IF:
z.- WITHIN TWENTY' (ZO) DAYS AFTER SENDiN~ THE NOTICE OF
INTENTION TO'TERMINATE OR NOTICE OF INTENTION TO REENTER TO
ENCUMBRANCE HOLDER BY DISTRICT SAID ENCUMBRANCE HOLDER CURES,
REMEDIES, AND CORRECTS SAID DEFAULT OR BREACH, OR COMMENCES AND
DILIGENTLY.PURSUES THE PERFORMANCE OF THE THING OR WORK REQUIRED TO BE
DONE TO CURE, CORRECT AND REMEDY SAID DAFAULT OR BREACH. ANY PERIOD
HEREIN STATED SHALL BE EXTENDED BY THE TIME IN WHICH ENCUMBRANCE
HOLDER IS PREVENTED FROM SECURING POSSESSION OF THE LEASED PREMISES BY
ANY ORDER, JUDGMENT, OR DECREE OF ANY COURT OR REGULATORY BODY OF
COMPETENT JURISDICTION IF POSSESSION OF THE LEASED PREMISES IS
~CESSARY TO CURE THE DEFAULT OR BREACH; OR
b.- ~ITHIN TWENTY (ZO) DAYS AFTER SENDING THE NOTICE OF
~TENTiON TO TERMINATE OR NOTICE OF INTENTION TO REENTER TO
ENCUMBRANCE HOLDER, DISTRICT RECEIVES' FROM ENCUMBRANCE HOLDER WRITTEN
NOTICE OF INTENTION TO FORECLOSE SECURITY iNTEREST, AND ALL OF ~HE
FOLLOWING EVENTS OCCUR:
(1) WITHIN SAID PERIOD, ENCUMBRANCE HOLDER
COMMENCES FORECLOSURE OF ITS SECURITY INTEREST BY JUDICIAL ACTION OR'
.TRUST DEED SALE AND DILIGENTLY PROSECUTES SAID ACTION OR TRUST DEED.
SALE; AND ...
ENCUMBRANCE HOLDER PAYS RENT AND SUCH OTHER
.MONIES TO BE 'PAID TO DISTRICT BY LESSEE UNDER T~IS LEASE UNTIL SUCH
FORECLOSURE ~ALE BECOMES FINAL OR SUCH TRUST DEED SALE IS CONCLUDED~
AND
(3). WITHIN THIRTY-FIVE (35) DAYS AFTER SUCH
FORECLOSURE SALE BECOMES FINAL'OR LSUCH TRUST DEED SALE IS CONCLUDED,
THE TRANSFEREE OR PURCHASER CURES, REMEDIES, AND CORRECTS SAID DEFAULT
OR BREACH, OR COMMENCES AND DILIGENTLY PURSUES THE PERFORMANCE OF THE
THING OR WORK REQUIRED TO BE DONE TO CURE, CORRECT~ AND RE~4EDY SAID
DEFAULT OR BREACH. ANY PERIOD HEREIN STATED SHALL BE EXTENDED BY THE
,.T~ME IN WHICH SUCH TRANSFERREE OR FURCHASER IS PREVENTED BY ANY ORDER,
JDGMENT OR DECREE OF ANY COURT OR REGULATORY BODY OF COMPETENT
)RISDICTION FROM COMMENCING FORECLOSURE BY JUDICIAL ACTION OR TRUST
'uEED SALE, OR FROM SECURING POSSESS]ON OF THE LEASED PREMISES IF
POSSESSION OF .~HE LEASED PREMISES IS NECESSARY TO CURE THE DEFAULT OR
BREACH.
C. ANY DEFAULT OR BREACH WHICH ARISES B~ OPERATION OF
'"~TICLE XVI '- ASSIGNMENT, SUBLETTING AND HYPOTHECATION, SUBARTICLE
, ('1) OR (Z)~ SHALL BE DEEMED TO HAVE'BEEN CURED IF, WITHIN TWENTY
~0) DAYS AFTER SENDING A NOTICE OF INTENTION'TO TERMINATE OR NOTICE
OF INTENTION TO REENTER TO ENCUMBRANCE HOLDER, DISTRICT R~CEIVED FROM
ENCUMBRANCE HOLDER. WRITTEN NOTICE OF INTENTION TO FORECLOSE 'SECURITY
INTEREST, AND .BOTH OF .THE FOLLOWING EVENTS OCCUR~
.m .(i) WITHIN SAID PERIOD ENCUMBRANCE HOLDER ~OMMENCES
FORECLOSURE OF ITS SECURITY INTEREST BY JUDICIAL ACTION QR.'TRUST DEED
SALE AND DILIGENTLY PROSECUTES SAID ACTION OR TRUST DEED SALE; AND
(Z) ENCUMBRANCE HOLDER PAYS RENT AND SUCH OTHER MONIES
TO BE PAID TO DISTRICT BY LESSEE UNDER THIS LEASE UNTIL SUCH
FORECLOSURE SALE BECOMES FINAL OR SUCH TRUST DEED SALE IS CONCLUDED.
ANY PERIOD HEREIN STATED SHALL. BE~EXTENDED BY THE TIME IN WHICH
SUCH TRANSFEREE OR PURCHASER IS PEVENTED BY ANY ORDER, JUDGMENT, OR
DECREE OF ANY COURT OR REGULATORY BODY OF COMPETENT JURISDICTION FROM
COMMENCING'FORECLOSURE BY JUDICIAL ACTION OR TRUST DEED SALE, OR FROM
SECURING POSSESSION OF THE LEASED PREMISES IF POSSESSION OF. THE LEASED
PREMISES.IS NECESSARY. TO CURE THE DEFAULT OR BREACH.
ARTICLE IIX - CLAIMS AND PROTEST
--" DURING REASONABLE HOURS, DISTRICT,. ITS AGENTS OR EMPLOYEES, SHALL
tVE THE RIGHT~ BUT NOT THE OBLIGATION, TO ENTER UPON AND INSPECT THE
...~ASED PREMISES AND OPERATIONS, AND TO MADE WRITTEN DEMAND UPON LESSEE
TO PERFORM ITS OBLIGATIONS UNDER THIS LEASE. SUCH DEMAND SHALL
SPECIFY THE O.~LIGATIONS TO BE PERFORMED.
IF LESSEE DISPUTES SUCH DEMAND, WITHIN THIRTY (30) DAYS AFTER ANY
SUCH DEMAND IS GIVEN, LESSEE.SHALL FILE A WRITTEN PROTEST'OF DEMAND
WITH DISTRICT, STATING CLEARt~Y AND 'IN DETAIL ITS OBJECTIONS AND
REASONS. IF LESSEE DOES NOT FILE SUCH PROTEST WITHIN THIRTY (30>
DAYS, LESSEE SHALL BE DEEMED TO HAVE WAIVED ALL CEAIMS FOR I)'AMAGES AND
ADJUSTMENTS AGAINST DISTRICT ARISING OUT OF THE DEMAND, '
UPON RECEIPT OF ANY SUCH P. ROTEST. FROM LESSEE, DIsTRICT~ 'ITS
AGENTS OR EMPLOYEES, SHALL REVIEW THE DEMAND OBJECTED TO AND LESSEE'S.
PROTEST, AND SHALL WITHIN THIRTY (30) DAYS NOTIFY LESSEE IN WRITING OF
ITS DECISION,' WHICH SHALL BE BINDING ON ALL PARTIES, UNLESS WITHIN
THIRTY '(30) DAYS THEREAFTER LESSEE SHALL FILE WITH THE DISTRICT A
REQUEST FOR RECONSIDERATION. WITHIN THIRTY (30) DAYS OF RECEIPT OF
SUCH REQUEST FOR RECONSIDERATION, DISTRICT SHALL RENDER ITS DECISION.
FAILURE By DISTRICT TO RENDER ITS DECISION WITHIN THIRTY (30) DAYS
SHALL BE bEEMED A REJECTION OF THE PROTEST AND RAT-IFICATiON OF
DISTRICTS INITIAL DECISION.
ART~CL~ XX - ~[[NTRY BY DIS[BICT'.WITHOUT TERMINATION
. 4' A.', ~~'' IF LESSEE IS IN DEFAULT OR BREACH OF ANY OF THE
..~,.TER~S, COVENANTS,.OR CONDITIONS OF THIS LEASE OR iF LESSEE ABANDONS.
~E~LEASED PREMISES, THEN DISTRICT, IN.ADDITION TO ANY'OTHER RIGHTS OR
EMEDIES TO WHICH IT MAY BE ENTITLED, INSTEAD OF SENDING A NOTICE OF
,,~TENTION TO TERMINATE AS PROVIDED IN ARTiCLE'XVI!I - DEFAULT OR
BREACH, MAY SEND A NOTICE OF INTENTION TO REENTER. TWENTY (ZO) DAYS
AFTER SENDING.SUCH· NOTICE OF INTENTION TO REENTER, IF. LESSEE,IS STILL
IN DEFAULT OR BREACH, DISTRICT MAY SEND A NOTICE OF REENTRY.. THE.
EXERCISE.OF SUCH RIGHT TO SEND NOTICE OF REENTRY SHALL PREVAIL OVER,
SUPERSEDE~ AND SUSPEND THE RIGHTS OF ENCUMBRANCE'HOLDER IS SUCH NOTICE·
OF REENTRY IS SENT TO ENCUMBRANCE HOLDER PRIOR TO RECEIPT OF DISTRICT
OF ENCUMBRANCE HOLDER'S NOTICE OF INTENTION TO. FORECLOSE SECURITY
INTEREST AND 'IF DISTRICT APPLIES' THE SUBREN'TALS RECEIVED AND COLLECTED
BY DISTRICT. AS BELOW PROVIDED. "SUCH RIGHTS OF ENCUMBRANCE HOLDER
SHALL REMAIN SUSPENDED UNTIL DISTRICT SENDS TO ENCUMBRANCE HOLDER'ITs
NOTICE OF INTENTION TO TERMINATE. DISTRICT SHALL HAVE THE IMMEDIATE
RIGHT OF REENTRY UPON SENDING'NOTICE OF REENTRY TO LESSEE.. A COPY OF
SUCH NOTICE OF REEN[RY SHALL BE SENT BY DISTRICT TO ENCUMBRANCE
HOLDER.
· · B. R~LETTING. SHOULD. DISTRICT ELECT TO.REENTER, AS.HEREIN
PROVIDED, OR SHOULD IT TAKE POSSESSION PURSUANT TO LEGAL PROCEEDINGS
OR PURSUANT TO ANY NOTICE PROVIDED BY LAW, OR SHOULD IT TAKE
POSSESSION UPON ABANDONMENT OF.THE LEASED-PREMISES BY LESSEE, DISTRICT
MAY EITHER TERMINATE THIS LEASE AS IN THIS LEASE PROVIDED, O~ DISTRICT
~AY, WITHOUT TERMINATING THIS LEkSE, FROM TIME TO TIME, RELE~ THE
'--EASED PREMISES OR ANY PART THEREOF FOR SUCH TERMS (WHICH MAY EXTEND
[YOND THE TERM OF THIS LEASE) AND AT SUCH RENTAL OR RENTALS AND ON
~.~dCH OTHER TERMS AND CONDITIONS AS DISTRICT IN ITS SOLE DISCRETION MAY
DEEM ADVISABL~ WITH THE RIGHT TO MADE ALTERATIONS AND REPAIRS TO THE
IMPROVEMENTS WITHOUT LIABILITY TO LESSEE OR ENCUMBRANCE HOLDER
THEREFORE~ PROVIDED HOWEVER, ANY ALTERATIONS OR REPAIRS IN ADDITION ~O
THOSE REQUIRED BY THIS LEASE TO BE PERFORMED BY LESSEE SHALL BE
SUBJECT TO PRIOR WRITTEN CONSENT OF ENCUMBRANCE HOLDER.
C. RENTALS.. SHOULD DISTRICT UPON LESSEE'S DEFAULT OR'BREACH
OR ABANDONMENT ELECT TO RELET THE LEASED PREMISES WITHOUT TERMINATING
THIS LEASE, LESSEE SHALL BE DEEMED TO HAVE ASSIGNED, AND DOES HEREBY
ASSIGN, TO DISTRICT, ALL SUBRENTS AND OTHER SUMS FALLIN~ DUE FROM
LESSEE'S SUBTENANTS, LICENSEES, AND CONCESSIONAIRS (HERE~N CALLED
"sUBTENANTS") DURING ANY PERIOD IN WHICH DISTR~CT HAS THE RIGHT UNDER
THIS LEASE, IF EXERCISED FROM AND AFTER SENDING NOTICE OF REENTRY, TO
REENTER THE LEASED PREMISES FOR LESSEE'S DEFAULT OR BREACH OR UPON
LESSEE'S ABANDONMENT, AND LESSEE SHALL NOT HAVE ANY RIGHT TO SUCH SUD1S
DURING THAT PERIOD. DISTR~CT MAY COLLECT THE SUMS AND MAY ALSO. ~RiNG
ACTION FOR THE RECOVERY OF SUMS DIRECTLY FROM SUCH OBLIGORS. DISTRICT
SHALL RECEIVE AND COLLECT SUCH.SUMS (SUBRENTS AND OTHE~ SUMS FALLING
DUE FROM SUBTENANTS), APPLYING THEM EXCEPT AS OTHERWISE ORDERED BY A
COURT OR OTHER REGULATING BODY HAVING JURISDiCTIO~ OVER THE SUBJECT
MATTER: ·
1. .FIRSt, TO THE/pAYMENT~ OF ANY INDEBTEDNESS OTHER THAN
RENT D~E HEREUNDER FROM LESSEE TO DISTRICT.
, Z. SECOND,.TO THE PAYMENT OF ANY COSTS AND EXPENSES OF SUCH
,.Z~LE-TTING AND ANY'ALTERATIONS OR REPAIRS REQUIRED THEREFOR.
3. THIRD, TO THE PAYMENT OF RENT DUE' AND UNPAID BY LESSEE
"~REUNDER. ·
4. FOURTH, '.TO ANY DELINQUENT PAYMENTS DUE UNDER THE LOAN-
AND UNPAID BY LESSEE TO ENCUMBRANC.E HOLDER.
5. FIFTH, sUCH AMOUNT EQUAL'TO. THE LAsT PRECEDING ADJUSTED
MINIMAL ANNUAL RENT SHALL BE HELD BY DISTRICT AND APPLIED IN PAYMENT
OF FUTURE RENT AS THE SAME NAY BECOME DUE AND PAYABLE'HEREUNDER.
6. 'SIXTH, THE RESIDUE, IF ANY,'SHALL B'E HELD BY DISTRICT--
AND APPLIED IN PAYMENT OF FUTURE PAYMENTS DUE UNDER THE LOAN TO
ENCUMBRANCE HOLDER AS THE SAME MAY'.BECOME DUE AND PAYABLE THEREUNDER.
7. SEVENTH, THE RESIDUE, IF ANY, SHALL BE HELD BY DISTRICT
AND APPLIED IN 'PAYMENT OF FUTURE. RENT'AND OTHER OBLIGATIONS OF LESSEE
TO DISTRICT AS THE SAME MAY BECOME DUE AND PAYABLE HEREUNDER.
LESSEE SHALL NEVERTHELESS PAY DISTRICT ON THE DUE DATE SPECIFIED
IN THIS LEASE THE EQUIVALENT OF ALL SUMS REQUIRED TO BE PAID'TO ..
DISTRICT BY LESSEE UNDER THIS LEASE, PLUS'DISTRICT'S EXPENSES~ LESS
THE SUMS ASSIGNED AND ACTUALLY COLLECTED UNDER THIS ARTICLE. DISTRICT
H~.~Y PROCEED'TO ~OLLECT'EITHER THE ASSIGNED SUMS OF LESSEE'S ~ALANCES
! ~ BOTH., OR ANY INSTAE'LMENT OR INSTALLMENTS OF THEM, EI. THER BEFORE OR'
[ =TER EXPIRATION OF THE TERM OF. THIS LEASE, BUT THE PERIOD OF
'L~MITATIDNS SHALL NOT BEGIN TO RUN ON LESSEE'S P'AYMENTS UNTIL THE DUE
DATE OF THE FINAL INSTALLMENT TO WHICH DISTRICT IS ENTITLED,. NOR SHALL
SUCH PERIOD BEGIN TO RUN ON THE PAYMENTS OF THE ASSIGNED SUMS UNTIL
THE DUE DATE OF THE FINAL 'INSTALLMENT DUE FROM THE RESPECTIVE
OBLIGORS. SHOULD SUCH SUBRENTS AND OTHER SUMS FALLING DUE FROM
SUBTENANTS AS COLLECTED AND RECEIVED BY DISTRICT, PLUS DISTRICT'S
EXPENSES, BE LESS THAN THAT DUE TO BE PAID ON THE.DATE SPECIFIED IN
THIS LEASE, THEN LESSEE SHALL PAY SUCH DEFICIENCY TO DISTRICT. LESSEE.
· SHALL ALSO PAY TO DISTRICT, .AS SOON AS ASCERTAINED AND WITHIN THIRTY
(30) DAYS AFTER WRITTEN DEMAND THEREFOR, THE COST AND EXPENSES,
INCLUDING ATTORNEYS'. FEES, 1F ANY, INCURRED BY DISTRICT IN SUCH
RELETTING.
D. CONTINUING ELECTION TO TERMINATE. NO SUCH REENTRY OR
TAKING POSSESSION OF THE LEASED PREMISES BY DISTRICT SHALL BE
CONSTRUED AS AN ELECTION ON ITS PART TO TERMINATE THIS LEASE UNLESS A
NOTICE OF INTENTION TO TERMINATE IS SENT TO LESSEE AND TO ENCUMBRANCE
HOLDER OR UNLESS THE TERMIHATION THERECF BE DECREED BY A COURT OF
COMPETENT JURISDICTION. NOTHiTHSTANDING ANY SUCH'REENTRY WITHOUT
TERMINATION~ DISTRICT MAY~ AT ANY TIME THEREAFTER~ ELECT TO TERMINATE
THIS LEASE FOR ANY SUCH PREVIOUS DEFAULT~ BREACH~ OR ABANDONMENT BY
'~-ESSEE BY SENDING ITS NOTICE OF INTENTION TO TERMINATE~TO LESSEE AND
) ENCUMBRANCE HOLDER. ANY TERMINATION OF THIS LEASE AS HEREIN-
- ~OVIDED SHALL NOT RELIEVE LESSEE FROM THE PAYMENT OF ANY SUM OR SUMS
'~AT SHALL THEN ~E DUE AND PAYABLE TO DISTRICT HEREUNDER, OR ANY CLAIM
ANY SUCH TERMINATI'ON SHALL NOT PREVENT'DISTRICT FROM ENFORCING.PAYMENT
OF ANy SUCH SUM OR SUMS OR CLAIM"FOR DAMAGES'BY ANY REMEDY PROVIDED
FOR,BY'LAW, OR FROM' RECOVERING DAMAGES FROM LESSEE FOR ANY DEFAULT OR
BREACH THEREUNDER.
'*~'E, CUMULATIVE RIGHTS. ALL RIGHTS, OPTIONS AND REMEDIES OF
[STRICT CONTAINED IN THIS LEASE SHALL BE CONSTRUED AND HELD TO BE
~UDMULATIVE, AND NO'ONE OF THEM SHALL BE EXCLUSIVE OF THE OTHER~ EXCEPT
IN THIS ARTICLE. OTHERWISE PROVIDED, AND DISTRICT SHALL HAVE THE RIGHT
TO.PU~SME ANY ONE'.OR.ALL OF SUCH REMEDIES O.R ANY ~THER-REMEDY OR
RELIEF WHICH NOW IS OR MAY HEREAFTER BE,PROVIbED.BY LAN,-WHETHER 'OR
NOT STATED %N.THIS LEASE..
ARTICLE XX! -'WAIVER AND NON-WAIVER '.
A, THE. FAILURE OF'DISTRICT TO EITHER'GIVE NOTICE OF DEFAULT OR
BREACH OF THE.LEASE, OR TO TERMINATE THE LEASE BECAUSE OF A DEFAULT OR
BREACH THEREOF, OR TO EXERCISE ANY OTHER RIGHT CONFERRED ON IT
PURSUANT TO THE LEASE, SHALL NOT BE A WAIVER OF ANY RIGHT OR RIGHTs
CONFERRED BY THE LEASE,' NOR SHALL DISTRICT BE ESTOPPE9 TO ASSERT SUCH
RIGHT OR RIGHTS AS ANY REASONABLE TIME AFTER DISTRICT HAS KNOWLEDGE OF
A BREACH OR-DEFAULT.
NO wAIvER OF ANY DEFAULT OR BREACH SHALL CONSTITUTE A WAIVER
OF ANY OTHER DEFAULT OR.BREACH, WHETHER OF THE SAME OR ANY OTHER TERM,
COVENANT, OR CONDITION. NO WAIVER; BENEFIT, PRIVILEGE OR SERVICE
VOLUNTARILY GIVEN OR PERFORMED BY DISTRICT OR'LESSEE SHALL GIVE THE
OTHER ANY CONTRACTURAL RIGHT BY CUSTOM, ESTOPPEL OR OTHERWISE, THE
,~-UBSEQUENT ACCEPTANCE OF RENT PURSUANT TO THIS LEASE SHALL NOT
)NSTITUTE A WAIVER OF ANY PRECEDING DEFAULT BY LESSEE OTHER THAN A
[FAULT IN THE PAYMENT OF THE PARTICULAR. RENTAL PAYMENT SO ACCEPTED,
'R~GARDLESS OF DISTRICT'S KNOWLEDGE OF THE PRECEDING BREACH AT THE TI~E
OF ACCEPTING THE RENT, NOR SHALL ACCEPTANCE OF RENT OR ANY OTHER
PAYMENT AFTER TERMINATION OF THiS LEASE CONSTITUTE'A REiNST~TEMENT~
EXTENSION OR RENEWAL OF THIS LEASE OR REVOCATION OF ANY NOTICE OR
OTHER ACT BY D~STRICT.
ARTICL~ XXII-~ MAINTENANCE AND REPAIR
A. THROUGHOUT THE TERM OF THIS LEASE, LESSEE SHALL, AT 'LESSEE'S
SOLE COST AND EXPENSE, MAINTAIN THE LEASED PREMISES AND ALL
IMPROVEMENTS, INSTALLATIONS, AND FACILITIES ON THE LEASED PREMISES,
INCLUDIN6 LANDSCAPE IMPROVEMENTS, PARKING LOTS AND PAINTING OF
EQUIPMENT AND STRUCTURES, IN FIRST CLASS CONDITION AND. REPAIR,
ORDINARY WEAR AND TEAR EXPECTED, AND IN ACCORDANCE WITH ALL APPLICABLE
PERM.ITS FROM GOVERNMENTAL AGENCIES, LAWS, RULES, ORDINANCES, ORDERS
AND REGULATIONS OF:
1. FEDERAL, STATE, DISTRICT, MUNICIPAL. AND OTHER
GOVERNMENTAL AGENCIES AND BODIES HAVING OR CLAIMING JURISDICTION~
Z. ALL '[HEIR RESPECTIVE DEPARTMENTS, I~UREAUS AND OFFICIALS;
'3.. .THE INSURANCE UNDERWRITING BOARD OR INSURANCE INSPECTION
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BUREAU HAVING OR CLAIMING JURISDICTION; '-
~ - 4. ALL INSURANCE COMPANIES INSURING ALL OR ANY PART OF THE
LEASEHOLD PREMISES OR IMPROVEMENTS~ INSTALLATIONS~ ~R FACILITIES.
LESSEE· SHALL, HOWEVER, HAVE THE RIGHT TO CONTEST THE ABOVE ORDERS IN
...T~E ,MANNER AND TIME PRESCRIBED BY THE ENTITY ISSUING THE ORDER.
[SSEE SHALL PROMPTLY AND DILIGENTLY REPAIR, RESTORE? AND.REPLACE AS
'~EQURiED TO MAINTAIN OR COMPLY AS ABOVE, OR TO REMEDY ALL,DAMAGE TO OR
DESTRUCTION OF ALL OR ANY PART OF THE IMPROVMENTS., INSTALLATIONS, OR
FACILITIES .(HEREIN CALLED "IMPROVEMENTS") RESULTING WHOLLY OR IN 'PART
FROM CAUSES REQUIRED BY THIS LEASE TO BE COVERED BY FIRE OR EXTENDED
COVERAGE .INSURANCE. IF THE REPAIRS, RESTORATION OR REPLACEMENT ARE TO
BE FUNDED BY INSURANCE PROCEEDS AS THE RESULT OF AN ACCEPTED CLAIM~
LESSEE SHALL SUBMIT A SCHEDULE TO DISTRICT SHOWING THE DATE FUNDS ARE
ANTICIPATED. AND. THE DATE WORK WILL BE COMPLETED. THE COMPLETED WORK
OF MAINTENANCE, COMPLIANCE, REPAIR, RESTORATION, OR REPLACEMENT S~ALL
BE EQUAL .IN VALUE, QUALITY AND USE TO. THE CONDITION OF THE
IMPROVEMENTS BEFORE THE EVENT GIVING RISE TO THE WORK~ EXCEPT AS
EXPRESSLY PROVIDED TO THE CONTRARY IN THIS LEASE.
B. "MAJOR" AND "MINOR" REPAIRS. FOR THE PURPOSE OF THIS
LEASE, NHEREEYER USED, THE FOLLONING WORKS SHALL HAVE THE MEANINGS
STATED:
1. "CONSTRUCTION COST" MEANS THE TOTAL ESTIMATED COST OF
THE WORK TO BE PERFORMED TO COMPLY WITH THIS ARTICLE INCLUDING WITHOUT
LIMITATION THE COST OF LABOR, MATERIALS, ~ND REASONABLE PROFIT TO' THE
GENERAL CONTRACTOR AND SUBCONTRACTORS, ALL UNDER THE MECHANICS LIEN
~L~.~S IN EFFECT AT THE TIME THE WORK IS COMMENCED OR ANY DEMOLITION OR
i [{ REMOVAL OF EXISTING IMPROVEMEN[S'OR PARTS OF IMPROVEMENTS AS NELL''
[ ~ FOR PREPARATION~ 'CONSTRUCTION, AND COMPLETION OF ALL NEW
iRPROVEMENTS OR PARTS OF IMPROVEMENTS.
Z. "VALUE OF IMPROVEMENTS" IS THE LATEST AVAILABLE
APPRAISAL OF "FULL'INSURAbLE VALUE" OF THE INPROVENENTS AS DEFINED AND
DETERMINED IN ARTICLE VIII - INSURANCE.
3. ·"MINOR REPAIR" MEANS ANY REPAIRS, ALTERATIONS~
INSTALLATIONS OR ADDITIONS TO THE IMPROVEMENTS FOR WHICH THE
CONSTRUCTION COST DOES NOT EXCEED T~EI~TY-FIVE (ZSZ) PERCENT OF THE'
VALUE OF THE THEN CURRENT IMPROVEMENTS. '
4. "MAJOR REPAIR'' MEANS ANY REPAIRS,.~ ALTERATIONS,
INSTALLATIONS OR ADDITIONS WHICH ARE NOT DEFINED AS "MINOR REPAIR~.
C. APPROVALS BY DISTRICT. FOR ALL REPAIRS, LESSEE SHALL
COMPLY I~ITH EACH AND EVERY CONDITION FOR CONSTRUCTION PROVIDED FOR IN
THiS LEASE; HOWEVER, FOR ANY REFAIRS TO THE INTERIOR OF STRUCTURES~-
ANO FOR MINOR REPAIRS FOR WHICH THE CONSTRUCTION COST DOES NOT EXCEED
TWENTY THOUSAND DOLLARS ($ZO,O00.O0), IN 1985', INCREASED YEARLY BY THE
CONSUMER PRICE iNDEX FOR. THE METROPOLITAN SAN FRANCISCO ]gAY AREA.
DISTRICT MAY RELEASE FROM ANY ~UC, CONDITION ONLY UPON PRIOR WRITTEN
~EQUEST FOR R. ELEASE FROM CONSTRUCTION CONDITIONS .SETTIaG FORTH EACH
ANV EVERY CONDITION FROM'WHICH'LESSEE SEEKS ~ELEASE.
D.'- FAILURE BY LESSEE. IF, AT ANY TIME DURING THE TERM OF THIS.
LEA~E, LESSEE'FAILS TO MAKE NECESSARY REPAIRS OR TO MAINTAIN THE
LEASE~ ~REMISES, AFTER RECEIVING A WRITTEN DEMAND UNDER THE PROVISIONS
F:~ ~RTICLE XIX - CLAIMS AND PROTEST, THE BOARD. OF HARBOR COMMISSIONERS
Y AUTHORIZE DISTRICT TO 'MADE OR CAUSE TO BE MADE SUCH REPAIRS OR
-..~INTAINANCE AND THE COST THEREOF SHALL BE DEEMED TO BE A.PAYMENT DUE
DISTRICT'FROM LESSEE, PLUS INTEREST AT THE THEN CURRENT PRIME RATE.AS
SET BY THE BANK. OF AMERICA. ON SAID DATE, AND'THE ~OTAL OF SUCH. AMOUNT
SHALL BE PAID WITHIN THIRTY (30) DAYS FROM DEMAND.'
ARTIC~ X-XIII'- 'RIGHT OF ENTRY BY iPUBLIC ENTITIES .. .': ' '
A. DISTRICT RESERvES'THE RIGHT TO' ENTER THE LEASED PREMISES TO
MAINTAIN AND REPAIR, REMOVE OR REPLACE, ADD TO OR GENERALLY IMPROVE
DISTRICTTOWNED IMPROVEMENTS; PROVIDED, 'HOWEVER, .THAT SUCH ENTRY SHALL
NOT UNREASONABLY INTERFERE WITH LESSEE'S .USE OF THE LEASED PREMISES.
WHERE PRACTICABLE, DISTRICT MUST GIVE LESSEE FIVE (5) DAYS WRITTEN
NOTICE IF SAID ACTIONS WILL IN ANY WAY DISRUPT LESSEE'S OR SUBTENANTS
OPERATIONS.
B.. ~ESSEE-OWNED IMPROVEMENTS SHALL BE PLANNED TO PERMIT ENTRY
FOR MAINTENANCE AND REPAIR BY DISTRICT, AND DISTRICT WILL REIMBURSE
LESSEE FOR PHYSICAL DAMAGES CAUSED.BY DISTRICT TO LESSEE-OWNED
IMPROVEMENTS LOCATED ON THE PREMISES ONLY IF SUCH DAMAGED LESSEE-OWNED.
IMPROVEMENTS ARE LOCATED AND BUILT IN ACCORDANCE WITH PLANS AND
SPECIFICATIONS AS HAVE BEEN APPROVED BY DISTRICT.
"-- C. LESSEE SHALL. PERMIT ANY DISTRICT-AUTHORIZED PUBLIC UTILITY
~MPANY OR DISTRICT TO RUN GAS, WATER, SEWER, ELECTRIC OR TELEPHONE
-~JNDUCTORS, PIPES, CONDUITS, OR DUCTWORK WHERE NECESSARY OR DESIRABLE
OVER, UNDER, OR THROUGH THE LEASED PREMISES IN A MANNER WHICH WILL NOT
UNREASONABLY INTERFERE WITH THE LESSEE'S USE'OF THE LEASED PREMISES.
ARTICLE XXIV - DESTRUCTION
A. IF A TOTAL DESTRUCTION (THE RENDERING TOTALLY UNUSabLE OF
FIFTY PERCENT (50%), OR MORE OF LESSEE'S IMPROVEMENTS ON THE LEASED
PREMISES) OR A PARTIAL DESTSRUCTION (LESS THAN FIFTY PERCENT) OCCURS
TO LESSEE-OWNED IMPROVMENTS, LESSEE SHALL WITHIN SIXTY (~0) DAYS
THEREAFTER COMMENCE AND DILIGENTLY PROSECUTE TO COMPLETION,
RECONSTRUCTION OR REPAIR~ IN THE MANNER AND TO THE SAME EXTENT
REQUIRED UNDER ARTICLE XXII - MAINTENANCE AND ~EPAIR; PROVIDED,
HOWEVER, THAT IF A TOTAL DESTRUCTION OCCURS DURING THE LAST FIVE (5)
YEARS OF THE TERM OF THIS LEASE, THEN EITHER LESSEE OR DISTRICT SHALL
HAVE THE OPTION TO CANCEL THIS LEASE BY LESSEE OR DISTRIC~ SENDING
WRITTEN NOTICE OF CANCELLATION WITHIN THRITY (30) DAYS OF SUCH
DESTRUCTIpN.
]~. DURING A PARTIAL DESTRUCTION OR TOTAL DESTRUCTION, ONLY AS TO
'[HAT PORTION OF THE LEASED PREMISES ACTUALLY ])ESTROYED AND ONLY DURING
S_..UCH PERIOD OF DESTRUCTION, MINIMUM ANNUAL RENT FOR SUCH PORTION SHALL
ABATED AND THE THEN CURRENT MINIMUM ANNUAL RENT PRORATED AS A RATIO
: RENTS RECEIVED ~Y LESSE'E BEFORE THE DESTRUCTION TO THOSE. AVAILABLE
.,...J LESSEE AFTER THE DESTRUCTION. PROVIDED HOWEVER, IN NO EVENT SHALL
'IHE MINIMU~ ANNUAL RENT BE LESS THAN ONE-HALF OF THE AMOUNT OF THE
-3Z-
THEN CU. RRENT MINIMUM ANNUAL RENT'. THE~E SHA~L BE NO PRORATION OF
PERCENTAGES OF GROSS RECEIPTS IF THERE IS EITHER A PARTIAL DESTRUCTION
OR TOTAL DESTRUCTION.
-- d.~ IF ANY OF-THE LESSEE-OWNED IMPROVEMENTS ARE DAMAGED OR
~S~ROYED BY ANY CASUALTY NOT.CONTEMPLATED BY THE INSURANCE PROVISIONS
. ,; THIS LEASE, DISTRICT SHALL NOT BE LIABLE FOR DAMA6ES OR OTHERWISE
FOR ANY LOSS OF DAMAGE SUSTAINED BY LESSEE, AND IF THE LEASED PREMISES
ARE THEREBY RENDERED UNFIT FOR THE USES PRESCRIBED HEREIN, THIS LEASE
MAY BE CANCELLED BY EITHER LESSEE OR DISTRICT~. BY EITHER OF SAID
LESSEE OR DISTRICT SENDING WRITTEN NOTICE OF CANCELLATION WITHIN
THIRTY (30) DAYS OF SUCH EVENT.' HOWEVER, IN THE EVENT LESSEE WISHES
TO REBUILD UTILIZING NEW FINANC'IN~, DISTRICT SHALL NOT CANCEL THE
LEASE FOR AT LEAST 180 DAYS, AND' IN THE EVENT LESSEE PRODUCES EVIDENCE
THAT FINANCING WILL BE FORTHCOMING, WILL COOPERATE TO ALLOW LESSEE TO
RETAIN THE LEASE AND REBUILD, OR ELSE WILL ISSUE A NEW LEASE WITH
SIMILAR TERMS AND CONDITIONS AS REQUIRED.TO ALLOW REBUILDINGJ
ARTICLE XXV-REMOVAL OF IMPROVEMENTS-AND OWNERSHIP UPON'TERMiNATION
A. ALL IMPROVEMENTS CONSTRUCTED ON THE LEASED PREMISE~ BY LESSE~
SHALL BE OWNED BY LESSEE UNTIL EXPIRATION OR SOONER TERMINATION OF
THIS LEASE. LESSEE SHALL NOT, 'HOWEVER, REMOVE'ANY IMPROVEMENTS FROM'
THE LEASED PREMISES, NOR WASTE, DESTROY, OR MODIFY' AND IMPROVEMENTS ON
THE LEASED PREMISES, EXCEPT AS PERMITTED BY THIS LEASE.
B. AT THE EXPIRATION, TERMINATION O~ CANCELLATION OF THE LEASE,
LESSEE'SHALL, WITHIN SIXTY (60) D.AYS, AT ITS OWN EXPENSE~ REMOVE ALL
~'~VABLE IMPROVEMENTS AND' INSTALLATIONS OF ANY KIND OWNED OR ~LACED ON
tE LEASED PREMISES BY' LESSEE, AND oHALL LEAVE THE LEASED PREMISES IN
L_,.JBSTANTIAL~Y THE SAME'CONDITION AS WHEN FIRST OCCUPIED BY LESSEE.
MOVABLE IMPROVEMENTS AND INSTALLATIONS ARE DEFINED AS THOSE'
IMPROVEMENTS AND INSTALLATION, INCLUDING FURNITURE, EQUIPMENT,
APPLIANCES, POTTED AND TUBBED PLANTS AND THE LIKE~ ~HICH ARE NOT
ATTACHED OR FASTENED TO THE GROUND OR DECK OR-FLOOR OF A STRUCTURE OR
BUILDING. DISTRICT, HOWEVER, MAY ELECT AT THE EXPIRATION,
TERMINATION, OR CANCELLATION OF THIS LEASE TO NEGOTIATE WITH LESSEE'TO
ACQUIRE'LESSEE'S' MOVABLE IMPROVEMENTS AND INSTALLATIONS OR ANY PART
THEREOF. IF DISTRICT DESIRES TO PURCHASE SAID MOVABLE ITEMS, IT SHALL
SEND ~RITTEN NOTICE OF SUCH ELECTION WITHIN TEN (10) DAYS AFTER THE
DATE OF SUCH NOTICE, REMOVE ALL SUCH IMPROVEMENTS AS ABOVE PROVIDED~
C. ALL BUILDINGS, STRUCTURES, IMPROVEMENT. S AND FACILITIES
CONSTRUCTED OR PLACED WITHIN THE LEASED PREMISES BY LESSEE, WHICH ~RE
ATTACHED OR FASTENED TO THE GROUND OR DECK OR'FLOOR OF. A STRUCTURE ON
THE DATE OF TERMINATION SHALL BECOME THE PROPERTY OF DISTRICT AT THE
EXPIRATION OF THIS LEASE OR UPON EARLIER TERMINATION THEREOF.
D. ~F LESSEE DOES NOT REMOVE, OR HAS NOT COMPLETED REMOVAL OF
.ITS MOVABLE IMPROVEMENTS AND INSTALLATIONS, AS PROVIDED HEREIN, TITLE
THERETO SHALL VEST IN DISTRICT, AND DISTRICT' HAY REMOVE OR CAUSE TO BE
REMOVED OR SOLD OR DESTROYED,. THE ~OVABLE IMPROVEMENTS_AND. ,
--"STALLATIONS ON THE LEASED FREMISES, AND LESSEE SHALL PAY ~'0 DISTRICT
.E REASONABLE AND ACTUAL COST OF ANY SUCH REMOVAL, SALE OR
DESTRUCTION, 'I'N EXCESS OF'ANY CONSIDERATION RECEIVED BY DISTRICT AS A
RESULT OF SAID SAL~, REMOVAL OR DEMOLITION.
ARTICLE XXVI - CONDEb!NA~!~ .
~EAINSTITUTEDUPON RECEIPT OF ANY NOTICE THAT CONDEMNATION PROCEEDINGS ARE
F-O OR UPON SERVICE OF PROCESS IN ANY CONDEMNATION
[ ROCEEDING, LESSEE AND LENDER SHALL BE IMMEDIATELY. NOTIFIED IN,WRITING
~ND WITHIN TWENTY .(ZO) DAYo AFTER SAID NOTICE, LESSEE SHALL DIoCLOSE
TO.DISTRICT ALL FACTS PERTAINING TO THE PROBABLE.FUTURE WORTH OF
LESSEE!S INTEREST 'IN THE LANDS SUBJECT TO THE'qQNDEMNATION.
~. '~PON THE TAKING OF ALL oR'PART OF THE ~EASED PREMISES BY
CONDEMNATION OR THREAT THEREOF~ LESSEE'S RIGHT TO SHARE IN
COMPENSATION OTHERWISE PAYABLE TO THE LESSOR SHALL BE AS FOLLOWS:
.?
1'~' WHOLE TAKE. THIS-LEASE SHALL TERMINATE ON THE DAY OF
TRANSFER.OF TITLE OR POSSESSION TO THE CONDEMNING AGE. NCY, WHICHEVER IS
FIRST. ANY AND ALL"EMINENT DOMAIN OR CONDEMNATION AWARDS OR DAMAGES
OR SETTLEMENT MONIES SHALL FIRST BE APPLIED TO LESSOR'S I~TEREST IN
THE LAND TAKEN, VALUED AS IF UNENCUMBERED, AND SHALL THEN BE APPLIED
'IN PAYMENT OF THE THEN OUTSTANDING BALANCE~ IF ANY~ OF THE LOAN MADE
TO LESSEE.BY ENCUMBRANCER, AND THE BALANCE OF SUCH MONIES, IF ANY,
SHALL BE APPLIED TO LESSEE'S INTEREST IN THE LEASEHOLD AS'FOLLOWS.
LESSEE SHALL ASSERT NO CLAIM FOR LOSS OF BONUS VALUE BUT MAY RECOVER
PREPAID RENTS AND SECURITY DEPOSITS, 'IF ANY~ AND THE THEN PRESENT
WORTH OF REMAINING LIFE OF THE BUILDINGS OR LEASE, AND USE OF
LEASEHOLD FIXTURES AND IMPROVEMENTS INSTALLED BY LESSEE WITH THE
DISTRICT'S WRITTEN CONSENT. BONUS VALUE IS DEFINED AS THE EXCESS OF
,-r-AIR RENTAL VAL~E OVER CONTRACT RENT.
[ Z. PARTIAL TAKE LEAVING REMAINDER UNUSABLE ~OR LEASEHOLD
L_p~RPOSE. LESSEE MAY ELECT TO TERMINATE THIS LEASE AS OF DATE OF
TRANSFER OF TITLE OR POSSESSION OR THE AWARD AND APPORTIONMENT OF
AWARD, WHICHEVER IS EARLIER, AND THE LESSEE'S COMPENSATION SHALL BE
THE SAME AS IN A WHOLE TAKE. IF LESSEE DOES NoT TERMtNATE~
COMPENSATION SHALL BE AS IF THE REMAINDER IS USUABLE.'
3. PARTIAL TAKE LEASING REMAINDER USABLE FOR LEASEHOLD
~RPOSE. LESSEE SHALL ASSERT NO CLAIM FOR LOSS OF BONUS VALUE OR
OBLIGATION TO PAY FUTURE RENTS. LESSEE MAY RECOVER THE THEN VALUE OF
THE REMAINING USE OF LEASEHOLD FIXTURES kND IMPROVEMENTS INSTALLED BY
LESSEE ON THE PART TAKEN WITH THE DISTRICT'S ERITTEN CONSENT. THEN IF
THE REMAINDER'S FAIR RENTAL VALUE WILL ~E LESS~THAN THE RENT REQUIRED
UNDER THIS LEASE, LESSEE MAY ELECT TO HAVE THE RENT REDUCED TO A FAIR
RENTAL VALUE FROM AND AFTER THE DATE OF TRANSFER OF TITLE OR
POSSESSION, WITH RESULTING ADJUSTMENT OF THE SECURITY DEFOSIT.
C. LESSEE MUST GIVE NOTICE TO LESSOR OF ANY OF THE ABOVE
ELECTION~ WITHIN' FORTY-FIVE '(45) DAYS AFTER OBTAINING KNOWLEDGE OF THE
I!IPENOING ACQUISITION.
1. LESSEE WILL BE DEEMED TO HAVE KNOHLEDGE ~F THE IMPENDING
~QUISITION OH HIS ENTRY INTO NEGOTIATIONS WITH THE CONDEMNING
GENCY'S REPRESENTATIVES, ON RECEIPT OF SERVICE OF COMPLAINT AND
UMI4ONS, OR OR~ER FOR IMMEDIATE POSSESSION, OR ON RECEIPT OF A LETTER
INQUIRY FRO~ THE DISTRICT ADVISING LESSEE OF THE IMPENDING
#
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ACQUISITION AND REQUESTING NOTICE OF LESSEE'S RESULTING ELECTIONS AND
CONTENTIONS, .LENDER AND LESSEE HAVE THE RIGHT TO PARTICIPATE IN ANY
AND AL~ ASPECTS OF THE CONDEMNATION PROCEEDINGS.
~ , Z. LESSEE'S'NOTICE SHALL CONTAIN A CLEAR AND UNEQUIVOCAL
A%EMENT OF ~IS ELECTION UNDER SUBPARAGRAPH B ABOVE, REASONS FOR THIS
ECTION, LESSEE's cONTENTION OF COMPENSATION' 'AND/OR THE RENAINDER'S
IR RENTAL VALUE AND REASONS FOR THESE CONTENTIONS.
-. ~3. 'TIME IS OF THE ESSENCE AND.THE EXPRESS PURPOSE.OF THE
REQUIRED NOTICE OF' ELECTION~ CONTENTiONS~ AND'REASONS'IS.SO -THE
DISTRICT MAY RELY ON THEn IN NEGOTIATIONS' OR LITIGATION NITH 'THE
CONDEMNING AGENCY. ' , ,
4, LESSEE's. CONTENTIONS'SHALL NOT BE CONCLUSIVE AS TO THE
AMOUNT'OF CONPENSATION~ OR USABILITY~ OR FAIR RENTAL VALUE OF THE
REMAINDER, 'AND ANY DISPUTE OF THESE ISSUES SHALL BE RESOLVED BY
ARBITRATLON IN ACCORDANCE NITH THE. RULES AND PROVISION OF THE AMERICAN
ARBITRATION ASSOCIATION.
D. -LESSEE's FAILURE TO GIVE NOTICE OF ELECTION, CONTENTIONS, AND
REASONS SHALL CONSTITUTE A WAIVER OF ALL RIGHTS TO COMPENSATION AND/OR
REDUCTION.OF RENT AND,.IN THE'EVENT OF A PARTIAL TAKING, RENT SHALL
CONTINUE THROUGHOUT THE REMAINING TERM AND IN THE FULL AMOUNT PROVIDED
HERE · · ·
ARTICLE XXVII - cAPTIONS. "
THE TITLE OF HEADINGS OF THE ARTICLES AND SU~ARTICLES OF THIs LEASE
,..~E NOT A PART OF THIS LEASE AND SHALL HAVE NO EFFECT UPON T~E
)NSTRUCTION OR INTERPRETATION OF ANY PART THEREOF*.
'ARTICLE XXVIII - SAVINGS CLAUSE, .
IF ~NY PROVISION OR PROVISIONS OF THIS LEASE'ARE FOR ANY REASON
ADJUDGED TO BE UNENFORCEABLE OR INVALID, IT .IS THE SPECIFIC.INTENT OF
THE PARTIES THAT THE REMAINDER SHALL SUBSIST~.BE~ AND REMAIN' IN FULL
FORCE'AND EFFECT. .- --
ARTICLE XXIX - LIMITATION OF.LEASEH~
THIS LEASE, AND THE RIGHTS AND PRIVILEGES GRANTED LESSEE'TO THE LEASED
PREMISES, MAE SUBJECT TO ALL COVENANTS,.CONDITIONS~ RESTRICTIONS AND
AND EXCEPTIONS OF RECORD OR APPARENT, INCLUDING THOSE WHICH ARE SET
OUT IN THE HARBORS AND NAVIGATION CODE OF THE STATE OF CALIFORNIA.
~OTHING CONTAINED IN THIS LEASE, OR IN ANY DOCUMENT RELATED HERETO~
SHALL BE CONSTRUED TO IMPLYTHE CONVEYAXCE TO LESSEE OF ANY RIGHTS
WHICH THE DISTRICT DOES NOT HAVE POWER TO CONVEY.
ARTICLE X'XX - FORCE 'MAJEURE
IF EITHER PARTY HERETO SHALL BE DELAYED OR PREVENTED FRO~ THE
PERFORMANCE OF ANY ACT REQUIRED HEREUNDER BY REASON OF ACTS OF GOD,
,.E, ESTRICT]VE ~OVERNMENTAL LAWS OR REGULATIONS, OR OTHER~CAUSE WITHOUT
~ULT AND BEYOND THE CONTROL OF THE PARTY O~LIGATED, FINANCIAL
~ABILITY EXCEPTED, PERFORMANCE OF SUCH ACTS SHALL BE EXCUSED FOR THE
"~ERIOD OF THE DELAY~ AND THE PERIOD FOR THE PERFORMANCE'OF ANY SUCH
ACTS SHALL BE EXTENDED FOR A PERIOD 'EQUIVALENT TO THE PERIOD OF SUCH
DELAY.; .~ NOTHI.~G IN THIS CLAUSE, HOWEVER, SHALL E){CUSE LESSEE FROM THE
PROMPer PAYMENT OF ANY RENTAL OR OTHER..CHARGE REQUIRED BY LESSEE~
E}'.C~PT A.S NAY. BE EXPRESSLY PROVIDED ELSEWHERE IN THIS ARTICLE.
'"~TI'~LE XXXI - HOLDING OVER.
._,A-THE EVENT LESSEE SHALL HOLD' OVER AFTER THE TERM' HEREIN'.GRANTED WITH'
THE CONSENT OF THE DISTRICT', SUCH HOLDING OVER SHALL BE A TENANCY FROM
MONTH TO MONTH AND SHALL BE 60VERNED.BY THE TERM~, CONDITIONS AND
COVENANTS CONTAINED IN THIS LEASE. "
.
ARTICLE XXXII - DISTRICT'S RIGHT TO RE-ENTER
LESSEE AGREES. TO YIELD AND PEACEFULLY DELIVER POSSESSION OF THE LEASED
PREMISES ON' THE'DATE OF TERMINATION OF THIS LEASE, WHATSOEVER THE
REASON FOR SUCH TERMINATION. uPoN GIVING WRITTEN NOTICE OF
TERMINATION TO LESSEE, THE DISTRICT SHALL HAVE THE RIGHT TO RE-ENTER
AND TAKE POSSESSION OF THE LEASED PREMISES ON THE DATE SUCH
TERMINATION BECOMES EFFECTIVE, WITHOUT FURTHER NOTICE OF ANY ·KIND.
TERMINATION OF THE LEASE AND RE-ENTRY OF THE LEASED PREMISES BY
DISTRICT SHALL'IN NO WAY ALTER OR DIMINISH ANY OBLIGATION OF .LESSEE
UNDER THE'LEASE TERMS AND SHALL NOT CONSTITUTE AN ACCEPTANCE OR
SURRENDER.
OR 'FUTURE LAN OR STATUTE IN THE EVENT OF EVICTION FROM OR '-
DISPOSSESSION OF THE LEASED PREMISES FOR ANY REASON, OR IN THE EVENT
DISTRICT RE-ENTERS AND TAKES POSSESSION'OF THE LEASED PREMISES IN A
-.,~TICLE XXXII.I - ANENDNENTS " '
THIS'LEASE SETS FoRTH'ALL THE AGREEMENTS AND UNDERSTANDING~ OF.THE
PARTIES, AND ANY MODIFICATIONS MUST BE IN WRITING.
ARTICLE 'XXXIV - TIME "
TIME IS OF THE ESSENCE OF THIS LEASE.
LESSEE NAIVES ANY' AND ALL RIGHT OF REDEMPTION UNDER ANY EXISTING
ARTICLE XXXV - UTILITIES
~AIN UTILITY LINES,. INCUDING SEWER, WATER, GAS,~ TELEPHONE'AND
ELECTRICITY TO THE DEVELOPMENT OF WHICH THE LEASED PARCEL IS l
PORTION, SHALL BE CONSTRUCTED BY DISTRICT. CONSTRUCTION OF UTILTIES
WITHIN THE 'LEASED PREMISES SHALL BE THE RESPONSIBILITY OF LESSEE,
DISTRICT RESERVES THE RIGHT TO EXTEND ANY MAIN UTILITY LINE
CONSTRUCTED BY THE LESSEE'FROm'THE LEASED PREMISES FOR'THE CONVENIENCE
OF THE DISTRICT OR OTHER LESSEES OF THE DISTRICT.
ARTICLE XXXVI - ~![Z~iSCRIMINATION
LESSEE AND/OR ITS SUBTENANTS SHALL NOT DISCRIMINATE AGAINST iANY MEMBER
--' THE PUBLIC UTILIZING LESSEES (OR SU~TENTANTS) SERVICES OR
~CILITIES, OR AGAINST ANY EMPLOYEE OR APPLICANT FOR EMPLOYMENT;
~£CA~SE OF AGE, RACE, RELIGION, COLOR, CREED, NATIONAL ORIGIN~
ANCESTRY, SEX, OR SEXUAL-pREFERENCE. THE LESSEE SHALL TAKE
AFFIRMATIVE ACTIONS TO ENSURE THAT' APPLICANTS 'ARE EMPLOYED AND THAT
E~PLOYEES ARE 'TREATED, DURING EMPLOYMENT, WITHOUT REGARD TO THEIR AGE,
RACE,~RdELIGION, COLOR, CREED, NATIONAL ORIGIN, ANCESTRY, SEX OR SEXUAL
PREEERENCE, WITH THE GOAL THAT THE ETHNIC COMPOSITION OF THE
POPULA~fON OF THE.DISTRICT. SUCH ACTION SHALL INCLUDE, BUT NOT
--NIe~ED TO, EMPLOYMENT., UPGRADING~ DEMOTION. OR TRANFER, RECRUITMENT,
~YOFF OR TERMINATION, RATE OF PAY OR OTHER FORMS OF COHPENSATION AND
:LECTION FOR TRAINING. LESSEE SHALL COMPLY WITH THE EQU~L
OPPORTUNITY REQUIREMENTS OF EXECUTIVE ORDER 11Z46, TITLE VII, OF THE
CIVIL RIGHTS ACT OF 1764, THE CALIFORNIA FA'IR EMPLOYMENT PRACTICE ACT~
AND OTHER FEDERAL, STATE,, MUNICIPAL OR DISTRICT LAWS OR'ORDINANCES
RELATING. TO EQUAL EMPLOYMENT OPPORTUNITY' 'LESSEE AGREES TO. SUB~IT ANY
CERTIFICATE OF COMPLIANCE WITH SAI~D STATUTORY PROVISIONS UPON"DEMAND
BY DISTRICT. '~
FAILURE TO.COMPLY WITH THIS.ARTICLE SHALL CONSTITUTE A BREACH OF
THE LEASE, FOR WHICH THE LEASE MAY BE TERMINATED IN ACCORDANCE WITH
THE PROVISIONS HEREOF.
ARTICLE 'XXXVII.- DEFINITIONS
THE DEFINITIONS OF TERMS SET FORTH IN THE DOCUMENTS ENTITLED "DESIGN
CRITERIA FOR CONSTRUCTION BY LESSEES OF THE SAN MATEO COUNTY 'HARBOR
DISTRICT I~80"(EXHIBIT B), WHICH HAS HERETOFORE BEEN INCORPORATED AND
MADE A PART OF THIS LEASE, SHALL BE APPLICABLE TO 'THE TERMS'AND
PROVISIONS HEREOF.
ARTICLE XXXVI.II - DISPUTES.
"'IY AND ALL DISPUTES REGARDING THE,TERMS AND CONDITIONS OF THESE LEASE
tCUMENTS OR THE PERFORMANCE OF ANY PARTY TO THIS LEASE, SHALL BE
~VERNED BY THE LAWS OF THE STATE'OF CALIFORNIA AND RESOLVED BY A
COURT OF COMPETENT JURISDICTION THEREIN, EXCEPT AS PROVIDED IN ARTICLE
V HEREIN REGARDING ADJUSTMENT OF RENT. NOTWITHSTANDING ANY OTHER
PROVISION OF-THE LEASE OR LEASE GENERAL CONDITIONS TO THE CONTRARY~
THE NOTICES SERVICE OF PROCESS ETC., REQUIRED UNDER THiS LEASE SHALL
BE SENT OR DELIVERED TO THE DESIGNATED PERSON AND TO THE ADDRESS SHOWN
IN ARTICLE VIII OF THE LEASE, WHETHER OR NOT IN CONFORMANCE WITH
SUBPARAGRAPH F. OF ARTICLE VIII.
ARTICLE XXXIX - LEGAL
IF LEGAL ACTION IS INSTITUTED TO ENFORCE THIS LEASE OR IS BASED UPON
ANY CLAIM ARISING OUT OF OR PURSUANT TO THE'TE~MS OF THIS, THEN THE
PREVAILING PARTY IN SAID LITIGATION SHALL BE AWARDED REASONABLE
ATTORNEY'S FEES AND COSTS OF SUIT.
ARTICLE XXXX - NOTICES
NOTICES R~QUIRED HEREUNDER SHALL BE DEEHEO TO HAVE' BEEN RECEIVED WHEN
ACKNOWLEDGED TO BE RECEIVED BY RECIPIENT EITHER THROUGH SIGNATURE OR
REGISTERED, CERTIFIED, EXPRESS HAIL OR DELIVERY SERVICE OR WHEN
PERSONALLY DELIVERED TO A REPRESENTATIVE OF THE PARTY.~
-37-
LEASE
PARCEL B
.. -. THIS LEASE is made and. entered into. '~y. and
between the SAN 14ATEO COUNTY HARBOR DISTKICT, a po'lit~
ical' subdivision of the State of California, hereinafter
called "Lessor" or "District," and OYSTEK POINT VILLAGE
· LIPEITED,. a California .'limited partnership, hereinafter
called "Lesse. e." ' ' '
The parties, agree that:
ARTICLE I - LEASE DOCUMENTS. This lease
these specific provisions toEether with the
includes
attached General Conditions a~_. d ~he following documents,
which are also attached'hereto and all are made a ~pa~t
hereof:
A. Exhibit A:' Legal description and drawing
of Parcel B (also knO~an'as a portion of .Parcels 2 and 4
in the SpeCific Plan attached hereto as Exhibit C,)
B.. Exhibit B: The. booklet entitled "Design
Criteria for Construction by Lessees of the San Mateo
County Harbor District - 1980."
0. The booklet entitled "O~ster Point Marina
Specific Plan" dated September, 1983, as approved by the
City of gouth San Francisco on September 7, 1983,
ResOlution 124-83.
ARTICLE II - PROPERTY LEASED. District hereby
leases to Lessee and Lessee hereby rents from District
.the property located in the City of South San Francisco,
County of San liateo, State of' California, described as
follows: The premises described in Exhibit A known as
· Parcel B, located at Oyster Point Marina/Park, South San
Francisco,' California, consisting'of, approximately. 1.9'
acres ~f land.
ARTICLE III - TER}t. .The term of this lease
· shall be twenty-five '(25) years, commencinE on cl~a~ first
day of the calendar month kf~llowln~the day of execution
of this Lease by District. However, Lessee has the
5ptton to renew or extend this lease for an additional
twenty-five (25) years, exercisable at any time after
execution of this Lease by District in accordance with
Article IX herein.
ARTICLE IV - USES AND SERVICES. l~ith respect
to P. arcel B, in con]unctioh with the lease on P'~rcel D,
but not conditioned upon Said other lease, lessee shall
develop, construct, ~d operate (or cause to be con-
struc'ted and/or operated) a comercial, village-style
complex, the· Parcel B portion of which shall include, in
accordance with lessee's proposal dated June 10, 1983,
approximately 20,000 square feet of building floor
space, which shall include offices, a delicatessen/cof-
fee shop, with approximately 10,000 square feet of said
building being suitable for, and offered for, boat sales
(brokerage), speciality shops, and other re, tail. uses.
If a substantial po{tion of Parcel B is not used for
boat
Sales and speciality shops/retail, said uses shall
be required for Parcel D. Uses 'of this' Pa~'cet may
include any use, or combination of uses, specifically
allowed for this ·area by the terms of the Oystec Point
Harina Specific Plan, attached hereto 'as Exhtbi.~-. C,.'
Lessee shall':endeavor' to include' retail uses (includine
a -chandlery) and banking."facil;xties for.~ the. use,' o~
general 'publiC+: alike. ........ . .
.... Lessee is specifically granted the continuing
option to use any'. of the leased premises for a package
!iquor store, gift shop, delicatessen, beauty shop, fast
food store, barber shop, bar, and/or bait and tackle
shop.
premises all.--equipment
said facilities.
B. No other: uses are permitted .excep~ .with
the prior written consent of the District.
~hall p~ovide ou the Ie. ased
.required for the operation of
PRICE'S.
ARTICLE V - OPERATING SCHEDULE AND CONTROLLED
A. -Operatin~ Schedule.
approved by
Except as otherwise
District in advance of execution of this
Lease, and in writing, beginning on the date the faciI-
ities are first offered for use by the general public,
ali of the non-office uses and services specified in
Article IV - USES AND SERVICES herein, shall be provided
with full services on leased premises during, regular
business hours not less than six (6) days each week of
the "lease term. Lessee shall provide District with .a
schedule of operating hours·
B... Controlled Prices. Lessee shall,'at all
times. maintain a schedule of the prices charged for ail
goods or services or combinations thereof supplied to
the public on or from the lea~d premi~es~ whether the
'same are supplied by. Lessee or by its'. sublessees,
'assi~ees, concessionaires,, permittees, or licensees,
and shall make said schedule available to District.
All rates and char§es to patrons served on Or
from the leased premises shall be reasonable and consis.
tent with the quality of service~ and'facilities offered
and shall be no more than rates'and Charges for cdmpa-'
table services and facilities in Northern California.
Pursuant to the'provisions of Section 72.2 of
the California Harbors. and Navigations Code, Lessor
hereby reserves to itself the power to fix and determine
the rates to be charged by the Lessee for. the use by the
public of any- and all facilities developed by Lessee
under'this Lease.
ARTICLE VI - IMPROVEMENT AND INVESTMENTS.
A. Lessee shall cause to be designed,
constrgcted and installed on the leased premises, at no
cost to District, any and all buildings and other
improvements,
the District
in the manner
during' the
and in the time approved by
option period % preceding
.execution of this lease, for all uses specified herein
and any optional services or uses 'planned for the leased
premises by Lessee and approved' by the District.
Improvements shall include eqUipment and tnst. a.lla~ion.
--~" B~.'~ .In addition to maintenance .and. repairs-
required pursuant to. General Conditions of this Leasco..
~the Lessees:( shall .~maintain the-] premises' 'in acc°rdanc~
-w~th stan~rds ~osed by '.:the.. State of Ca[[lo,ia
Regional ~ater Control Board~
'C. All design and construction shall conform
.With the requirements as set forth in the Design Cfi-
teria booklet adopted by District, attached hereto as
Exhibit B,' and all applicab, le~ codes -and ordinances
including,"bUt not limited to, District, City, County,
State and F~-deral. Construction shall be 'commence~
within thirty (30) days' after execution of this Lease
and completed within three hundred sixty (360) 'days
after execution of this Lease, or as otherwise approved
in~';~"wrttinE by Distric~ durinE the option, period pre-
ced~n~ execution of this Lease&. or as amended there-
after. The construction schedule shall follow the re-
quirements of the Desi§n Criteria, '-Exhibit B. C~n-
struction and related project costs on that portion of
the complex required in this lease shall not be less
than Two Million and No/100 Dollars ($2,000,000.00).
Lessee
ARTICLE VII - LEASE RENT'S AND GROSS RECEIPTS.
shall p~y to District the minimum rents or the
~-'perce~tage rental as set forth herein and in Article V
of the Cene~al Conditions of this Lease,. whichever is
greater.
A.. Hinimum Annual Rent. For the firgt 'five
years' of- the lease . term, · the- minimum annual rent
shall be in accordance with the following schedule:
.$10,350.00
3
$20,700'.00
5
After the fifth
$20,700.00
$20'700.00
(Sth) year 'of. the lease .te~n,
the
minimum annual rent shall be adjusted in accordance~ith
the provisions of Article V of the General Conditions of
this. Lease.
B. ~ercen~age Rent.
1. In addition to the minimum annual
rent~ Lessee'shall pay the amountby which the total of
the percentage o'f gross receipts specified in san Mateo
County Harbor. District: Ordinance Code -§3,803 and as
follows, exceed the minimum annual~' rent set forth
herein-.
Business .'
Sale of food and non-alcoholic
beverages sold in restaurants
and coffee shop, fast food sales
and delicatessen.
Sale of alcoholic beverages (when
connected wi~h food sales or
Percentage
3Z
through a package liquor store).
Sale of alcoholic beverages (as
separate bar).
3Z
.Boat sales.
Rental of. meeting rooms~'
space
fi throu~k
-..~.~ of 9ch year.
al~ =hrou~h end
of 2~h
_ year
101 thereafter
derived
tenant,
firm or
Lessee,
received,
Gross receipts
or charged by
concessionaire, licensee.,
are the gross income
any- sublessee, sub-
or any other per.son,
cOrporation (herein called "subtenant"), olr..by
for. ~ales, charges for Service, for the use of
apac. e made in or on the leased premises, or £ro~ any and
all sources of income derived in whole or in part.' from
any- .busineSS transacted in, at or ·from the leased
premises, whether from Subtenants, customers, or Other-
wise~, both for' cash and on credit, and in cases of sales
,';{ .?%
or/Char~es on credit, whether or not pa~ent is actually
made. .
Gross. receipts shall include, without
limitation, all: -
ao
Deposits not ~efunded;
b. Orders taken on Or froTM
..
leased premises.to be filled or paid for elsewhere;
the
c. Sales or charges, for all
services performed, whether such 'sales are made or such
services are rendered at or arranged through the occu-
pied. space at the leased, premises by ion§ distance
com,~ication and whether initiated, performed,-'~.or
completed at another location;
· LesSee for . Value directly from cusgom~rs, and
subtenants, tnCludin§ subrents~
Each sale or charge for services or use
of space on credit or in installments shall be treated
as a sale or charge for the whole price for the calengar
year in which-the sale or' cha~ge'.is made whether or
any-payments are made within that year.
3.' The .following matters only may be
excluded or deducted from Cross Rece~pt~ at th~ t~me
they are ascertained, andwhere not ascertainable during
the period covered by a-statement of Cross
then from the time of a subsequent statement
are known:
Receipts,
when they
retained
by employees of
Cratuities such as "tips"
Lessee or subtenant for their
personal benefit;
for 'sales taxes,
'b. All sums collected and paid out.
luxury taxes, excise taxes, and similar
taxes
required by law
to be added
to the tota~l purchase
8
price, whether now or hereafter in' force, to be col-
lected from customers and paid bY LeSsee or subtenant;
c. Herchandise transferre~ or
~f~l[ated ~th Lessee or ~y sub[chant, if such t~ans-:
or-.~chanEes ~e';made .solely for the convenien~
~erat~on of 'Lessee,s or. subtenant's bus~nes~ and no~
,ese' of cons~tinE a sale P~evfo~l~
'at~ on, or: fr~ the leased praises or for the purpose
of ~eprtv~nE District fro~ the percen~aEe of Gros~
~ece[pts of a sale that other[se would Be made al,' on,
or from the leased premises;
pets Or m-nufac~urers;
Herchandise returned to ship-
All refunds made on any sale or
cha~§e for service or u~e Of space previously 'included
as Gross Receipts;
' '' ' ' . r , ~ . f. All cash. or credit received
settlement 'of .any Claims for loss or damage~
V~uchers, if not issued for value., until the t~e" ~hey-
have been converted into a sale by redemption;
h. Bulk sales made by. Lessee or
subtenant no~ in the ordinary course of business and
subjec~ to prior written approval of District~ .
i.. Any income or receipts, under
generally accepted accounting principles, which are
9
derived from the
sale or disposal of any capital assets
(excluding any assets normally sold in the' course of
business conducted on the' leased premises) or £rom the
retirement of 'any indebtedness, or from Lesse~'s or
sUbtenant's investments of any funds not invested in.
leased premiSeS or the operatiOn of Lessee's or sub=
te~ant,'s business on ~he .leased premisesl '
". ..:':. j. Percentage rent coI.lec~ed by.
'Lessee from Subtenants for District's benefit.
None of the above exclusions or deductions
~om Gross Receipts shall be excluded or deducte~ if in
substance it is a typical sale, charge for service, or-
other source of gross income.which is ordinarily the
subject of percentage rent, but arranged only-to avoid
such rent, or if actually contracted for elsewhere on
. other premises such as t~ical sale, charge for ~ervice,
or ot~er source of §ros~ income which is ordinartl7 the
subject of percentage rent, and such sale, charge for
service, or other' gross income is for the Lessee's or
subtenant ' s business benefit.
C. Payment of Rent.
1. Minimum Rent.
Hinimum annual rent
(adjusted or .unadjusted) shall be due and payable in
advance.in 'equal monthly installments on or before the
first ~ay of each month of the term Of this Lease.
2. PercentaKe Rents. At the~nd of each
quarter of th~ year (i..e., Hatch 31st, 3une 30th,
10
September 30th and December 31st), percentage rentals at
tl{e rates hereinaboTM described of gross receipts shall
be Computed'fo.r the prior quarter and the difference
between, the minimum annual rent for said quarter and the
percentage '~'?rent f6r 'said 'quarter shall be due
Payable:on:the fifteenth (15th)~u=y following the
~ro~s receipts shal!..:'be reco~ute~ at the en~ of eac~
~e~.usfn~ .the applicable percentaEes an~ the balance of
rents as. computed for each ~ear shall be due and pa~able
on or before-March
overpayment of rent
.rents~
notices
30th of the. following yea:,.:. Any
shall be' dredited toward future
ARTICLE VIII - NOTICES AND PAYMENTS. All
and communications required under this Lease
shall be in writing, and all notices and payments shall
be made' as follows ::'
'-.-:i":-.~'A..' All paTmen~s and notices to Lessee shall
be. given or/mailed' to
L .
~ - Ms.. Merit Chrtstoffer
Oyster Point Village Limited "
1670 Pine Street
San Francisco, California 94109
B. All payments and notices to District
shall be given or mailed to:
. ?
General Manager
San Marco County Harbor Distriot
~1 Johnson Pier '
Half Moon Bay, California 94019
C. To Encumbrance Holder at such address and
such person as it shall designate to District in
writing.
D. Any party may designate a different
address bY. SiVlng n°tice as set 'forth in thi '
-E. All 'notices and co~tca~ions
herein s~11 be ,de~ed g~ve~ on the f~th (5~) day
'following"mailing/'i~ff':g~ven ~ accorda~ce w~k
F. If Lessee is not a res[den~ of the Co~t
San HateO or is an association or partnership
a member or partner resident of said County, or is a
foreign corporation, Lessee shall file with Distric~ a
designation'' ~f natural person residing in the Count.y of
San Hateo, State of California, §iving his or her name,
residence and business address as the agent of Lessee
for the service of process in any court action between
Lessee or EnCumbrance Holder and Distric~ arising out
of or based on , '~nd the deliver7 ~o such
a~ent of written notice or a copy of any process in'such
action shall.constitUte a valid servic~ upon Lessee~
ARTICLE IX - OPTION TO RENEW. District grants
Lessee the option to renew this lease, for a further
period of twenty-five (25) years from the expiration
date jf the original £erm, upon the 'same terms and
conditions as set forth herein. Said option to renew
this Lease shalt be exercised in writing and provided to
the-District at any. time between execution of this Lease
By District and six (6) months prior to the expiration
of the first term, and shall be effective when the
notice of 'exercise of said .option is recetved-.by the
District...
.... ' T~e: arties reCo~ize 'and acknowle~e ~a~ the
' ~ement ~th. the .~ C~ of South S~ Fr~C[scC'.:~~'
- g~e~s the Distr~cc' s' authority and power with-, respect
to the Oyster P°ht ~rina/Park. Said' Joint P~ers
~reement was effective on November 11, 1977 ~d
ttnu% in full force ~d effect for a period of for-
ty-ntne (49) years from' that aate ~tfI modified
te~inated, by an 'agreement tn ~iting between the City
~d'the District. Alth0~gh proposals'have been made and
negotiations 'are ~der way ~ith respect to revision of'
said Joint "Po~ers ~reement, interpretation of that'
doc~ent ~y' "result .in a finding o~ dete~ination that
zhe~',District;, as Lessor~ ca~ot enter into' a lease~ for
Zhe ~ster Porn= Marina/Park praises for a te~.
~ceeds the te~nati°n of the Joint Powers AEreement,
~ch is currently November 10, ~026.~. ~erefore,. ~f
~s dete~ned that the City's approval is required for
this lease to exten8 a full fifty (50) years (tncludinE'
option to renew), and the City of South San Francisco
has refused to ~tve their approval of the Ce~s of this
.
13
lease, the term of this lease shall automatically be
modified to end on November 10, 2026.
AI~TICLE X - APPROVAL BY DEPARTHENT OF BOATING
AND WATERWAYS.. Award of this Lease by Distr~c= is
subject to the' final approva! by the Californi~ D~par~--
ment' of Boating and ~aterways (',Cai-Boating'), and ~war~
of.tb/s .Lease By District shall.become final only
-'award has been approved by 'said Depart~nent. ' If =he
Lease is. not .so approved by Cai-Boating. through, no
fault of the LeSsee· the option purchase price shall be'
refunded in full to Lessee.
LESSEE
OYSTER POINT VILLAGE LIMITED
· 1/JA~Tr cH[~f~O~_~_~'_~, as _P-~id~n~: of'
Oyster. Point Village AssociateS· Inc.
Ceneral Partner
Dated':
(Corporate Resolution Attached)
SAN HATEO COUNTY HARBOR DISTRICT
Ronald D. McClellan
General Manager
of
The foregoing Lease is approved this · 1984.
STATE OF CALIFORNIA
day
DEPARTHENT OF BOATIN~ AND~ATER~AYS
By
14
STATE' OF CALIFORNIA. )
yea= ]:/~,~ , before me ,..~~r~/?/~__ ZJ.,/Z~_ .,
Not.fy Fublic, pe=$onally app.a=ed ~~ ~'~//~
l ~'~o~. to me to be :~he, - '
~scr~ct,~~al subdivision of ~he S~a~e of
California, and ~o~ ~o me to-ha ~he parson ~ho. exe-
cuted. ~he ~hiu ~s~eut ou bthalf of ~he sa~d
political subdiv~sion, ~d ac~owled~td ~o me ~hac $~
· pol~tical subdivisio~ ~ecu~ed ~he s~a. '
STATE OF CALIFORNIA ) .
co rr > ..
year,/7~3 ,' perso~!ly appeare8 ' I -~~
~/~ ~. ~-that executed the
~eDt, a~d the
person ~ho executed the
h~%i~ ."~ud .ac~qwY~4ged to me that said
~~0 COU~
CONSENT TO ACTION -'
BY'BOARD OF DIRECTORS WITHOUT A MEETING
The undersigned directors of Oyster Point Village ASsociates,
Inc., a-California Corporation, consent to the following action
of the board of directOrs, of Oyster Point Village Associates,
Inc., without a meeting by unanimous consent of all directors of
that corporation:
Marti Christoffer. President
Jeremy ~alters, Vice President
Roger Superko. Secretary
Richard Bertolina. Financial Officer
Adoption of the following resolution of the board of directors:
To eXercise lease on Parcel "B" as Gen~ral Partner to Oyster
Point Village Ltd., and on Parcel "D" as Oyster Point Village
Associates; Inc., at Oyster Point Marina in South San Francisco
.__with the Harbor District of San Mateo County.
To' have $30,380 disbursed from O~ster Point Village, Ltd: funds
' "and $4,120 from Oyster Point Village ASsociates, Inco funds for
the lease deposit to be deposited in a Time Deposit or
Certificate of DepOsit or other instruments of credit as provided
To authorize Marti Christoffer~ President,'to sign both leases .
~er ~inf ~llo~e ~i~e& Inco~r~ 4670 ~ne ~t. ~n ~oncf~. Cofifo~lo 94~ [445]
SPECIAL POWER OF ATTORNEY
--- KNOW ALL MEN BY THESE PRESENTS:
That Jeremy Walters Naploha of 3233 Jackson Street, City of
San Francisco, County of San Francisco, State of California,
hereby appoints Roger Superko of 177 Carnelian Way, City'of
'..~ San Francisco; County of San Francisco,. State of.California,-
as his attorney fn fact to act in his name and to do'any
For th~Period f~°m December 21, 1984' - '''?~
through January 10,.
~'~.>.1985, to exercise all voting rights relating to his 1,000
'~%~"shares<of Oyster Point Village Associates, Inc.; for the~.~
following business matters:' ..'...
1. Carry out a activities necessary to mortgage and
hypothecate including but' not limited to signing loan
agreements, Guarantees, and any other loan documents
necessary to secure and cause to be made loans from Bank of
tmeri~a for the construction and permanent financing of
Oyster Point Village, Phase I, Parcel "B", Oyster Point
Boulevard, South San Francisco, California.
2. Carrying out ~ther activities necessary to begin
construction on. Oyster Point. VillaGe,~ Phase I,
3.- Executing an~...and all documents necessary to carry out
the above activities as acting Vice-President of Oyster
Point Village Associates, Inc.,
4. Sign"as Lessee on' the San Mated Harbor Commission
Leases f~r ~arcels "B" and "D" at Oyster Point Marina. .'
Granting to his at'torney'in fact full power and authority to
do and perform all. and every act and:thing whatsoever
requisite, necessary and proper to be done in the exercise
~f any of the rights and powers herein granted, as fully.to
all intents and purposes as she might or could do if "-'~:~l'-
personally present, with full power or substitution or
revocation, hereby ratifying and confirming all that his
attorney in fact, or his substitute or substitutes, shall
lawfully do or cause to be done by virtue of this power of
attorney and the rights and powers herein granted.
In witness whereof I have hereunto signed my name this 21st
day of December 1984.
j~
Legal Description
smmt S~N F~AMC~SCO,
-Stalin: I"= I~":
LEGAL DESCRIPTION
Re;
LD3 410-2610
~...L' THAT CERTAIN REAL'PROPERTY SITUATE 'IN THE CITY OF SouTHSAN
FRANCISCO' COUNTY OF SAN MATEO, STATE OF CALIFORNIA, MORE PARTICULARLY
'COUUENCING AT'A POINT UHICH BEARS SOUTH 3' 34' 2&' EAST 300.H3 FEET"
FROU THE INTERSECTION OF THE UESTERLY LINE OF OYSTER POINT BLVD.' WITH
THE SOUTHERLY LINE OF PARCEL ONE AS SHOUN'ON THAT CERTAIN HAP ENTITLED
"PARCEL HAP OF OYSTER POINT BUSINESS PARK",.AS FILED IN VOLUME 52 OF
PARCEL MAPS AT PAGE 59, SAN MATEO COUNTY RECORDSI THENCE'ALONg A CURVE
TO THE LEFT UZTHA RADIUS POINT'UHICH BEARS SOUTH 3° 29' 00" EAST 20
FEET THROUGH A CENTRAL ANGLEOF 63° 32' 31", FOR'AN ARC LENGTH OF
22.18 FEET; THENCE ALONG A TANGENT REVERSE CURVE TO THE RIGHT U/TH A
RADIUS OF 250 FEET, THROUGH A CENTRAL ANGLE OF 17' 53' 51", FOR AN ARC
LENGTH 0F'78.09 FEET, TO THE POINT OF BEGINNING, SAID POINT OF
BEGINNING BEING IN THE SOUTHEASTERLY LINE OF OYSTER POINT BOULEVARD~
THENCE SOUTH 49' 07' 40" EAST 101o85 FEET; THENCE NORTH 86° 009 3I"
EAST 151.99 FEET; THENCE SOUTH 03° 59' 29" EAST 144,00 FEET; THENCE
SOUTH 41° 00''31" UEST.82o07 FEET~ THENCE SOUTH 48° 59' 29" EAST
FEET; THENCE SOUTH 41' 00' 31" UEST 132.00 FEET; THENCE NORTH
48° 59' 29" UEST 50.00 FEET: THENCE SOUTH 55'. 39' 25" UEST 82°6I FEET~
THENCE 2.00 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE RIGHT,
THE CHORD OF UHI*CH BEARS NORTH 32" 12' 14" UEST, UiTH A RADIUS OF
'-'280.00 FEET AND SUBTENDING A CENTRAL ANGLE OF O0° 05' 22"~ TO A
~NT OF TANGENT REVERSING CURVATURE~ THENCE 50.26 FEET ALONG THE ARC
~-A CURVE TOT HE LEFT UITH A RADIUS OF 399.29 FEET AND SUBTENDING A
CENTRAL ANGLE OF' 07° 12' 44"; THENCE, NON-TANGENT, NORTH 33' 51' 19"
EAST 10.43 FEET:. THENCE 55.00 FEET ALONG THE ARC OF A NON-TANGENT
CURVE TO THE LEFT WITH A RADIUS OF 409.29 FEET AND SUBTENDING A
CENTRAL ANGLE OF 07' 41' 58", THE CHORD OF WHICH BEARS NORTH
43' 28' 19" VEST; THENCE SOUTH 03' 57' 25" EAST 299.01 FEET TO A POINT
ON THE SOUTHEASTERLY .LINE OF OYSTER POINT BOULEVARD; THENCE NORTH
40° 52' 20" EAST 49.00 FEET, ALONG SAID SOUTHEASTERLY LINE TO.~HE
POINT OF BEGINNING, CONTAINING 1,905 ACRES, MORE OR LESS.