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HomeMy WebLinkAboutReso 10-1985 RESOLUTION NO. 10-85 CITY COUNCIL, 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 City of South San Francisco owns portions of the Oyster Point Marina; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco 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 City and 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 City Council of the City of South San Francisco at a regular meeting held on the 9th day of January , 1985 , by the following vote: AYES: NOES: ABSENT: Councilmembers Mark N. Addiego, Emanuele N. Damonte. Richard A. Half, y, Gus Nicolopulos; and Roberta Cerri Teqlia None None 2 ALF'HABET ] CAL INDEX .!_LE ADJUSTMENT OF RENT AMENDNENTS (ARTICLE ANT I- DISCRIMINATION (ARTICLE V) ' ' 6 XXX I I I ) ' ; ' 36 (ARTICLE X×XV .............................. ASSIGNMENT, SUBLETTING, & HYPOTHECATION (ARTICLE XVI) ............ ZO CAPTrONS (ARTICLE XXVlI)' 35 CLAIMS AND PROTEST (ARTICLE COMPLIANCE WITH LAWS AND REGULATIONS (.ARTICLE XlII) .............. ]6 CONDEKNAT[ON (ARTICLE XXVI) ...................................... 34 CONSTRUCTION (ARTICLE IV) '3 DECLARATION OF KNOWLEDGE BY LESSEE (ARTICLE II) ................... 3 DEFAULT OR BREACH (ARTICLE XVI!I) ................................. 25 EFINITIONS (ARTICLE XXXVII) ...................................... 37 DESTRUCTION (ARTICLE XXIV) ....................................... 3Z DISTRICT'S RIGHT TO RE-EHTER (ARTICLE XXXII) ..................... 36 FEE FOR. FAILURE TO PAY WHEN DUE (ARTICLE Vi) ...................... 'ir FINANCIAL REPORTS AND RECORDS (ARTICLE XV) ....................... I7 FORCE MAJEURE (ARTICLE XXX) ' 36 ttOLD HARMLESS '(ARTICLE XIV) 17 HOLDinG OVER-(ARTICLE XXXI) ...................................... 35 INSUR'NCE (ARTICLE VIii) 9 · LIMiTAT!ON'OF LEASEHOLD (ARTICLE XXIX) ........................... 35 LIQU'DATED DAHAGES (ARTICLE "II ' 15- E XxI . . · MAI..'~TE!:JANC.. AND REPAIR (ARTICLE t) ................. ~ ......... 30 t ~'II['"S (ARTICLE XXXX) ' 37 OPERATIONS' (ARTICLE O~NE~SHIP OF LEASES SSESSORY INTEREST (ARTICLE PROTECTION x) ., , (ARTICLE XVII) ............................... ~'~ TAXES, TAXES, ASSESSMENTS AND FEES IX) ........................................... t3 OF LEASED PREMISES (ARTICLE XII) ...................... · .... 16 QUIET ENJOYMENt. REENTRY BY REMOVAL OF RIGHT OF (ARTICL~ III) ' DISTRICT WITHOUT TERMINATION (ARTICLE XX) ...... ; ...... Z8 IMPROVEMENTS AND OWNERSHIP UPON TERMINATION '(ARTICLE XXV) ......................................... 33 ENTRY PUBLIC ENTITIES' (ARTICLE .XXIII) ................ 3Z SAV]N6S CLAUSE (ARTICLE XXVIII) ' 35 SECURITY DEPOSIT (ARTICLE VII) ..................................... TIME (ARTICLE XXXIV) ' UTILITIES (ARTICLE XXXV) ......................................... WAIVER AND NON NA'IVER (ARTICLE XXI) 30 OF TITLE (ARTICLE I) ~RRANTY ..................................... ./ '. (. _L_EASE GENERAL CONDITIONS PARCELS B AND .__~ ARTICLE I ~ ~BRANTY 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 WAY 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 CAREFULL.Y 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 r~i~D BUSINESS PRACTICES REQUIRED IN THE OPERATION AND MANAGEMENT OF THE ;ES CONTEMPLATED HEREUNDER. ;~TICLE III - ~UIET ENJOYMEN~ .. ' ' 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 THE TERMS, COVENANTS, .AND CONDITIONS OF'THIS LEASE DURING THE TERM THEREOF [)ISTRiCT. ARTICLE IV - CONSTRUCTION A. LESSEE SHALL. BE RESPONSIBLE FOR. THE CONSTRUCTION OF LEssEE-OWNED IMPROVEMENTS AT ITS SOLE COST AND EXPENSE. E. LESSEE SHALL SUBMIT AND OBTAIN APPROVA% OF ~LANS AND SPECIFICATIONS FOR ALL IMPROVEMENTS IN ACCORDANCE WITH THE REQUIREMENTS OF "DESIGN CRITERIA FOR CONSTRUCTION BY LESSEE .... ETC." (EXHIBIT B), AS DESIGNATED AND/OR REQUIRED BY THE HARBOR DISTRICT, AND ALL A~-F'LICABLE CODES AN~ ORDINANCES, INCLUDING BUT NOT LIMITED TO DISTRICT,'CITY~ COUNTY, STATE AND FEDERAL. AFTER APPROVAL OF SCH~FATIC PHASE, LESSOR SHALL NOT UNREASONABLy WITHHOLD APPROVALS OF ~,~C:EEDING PHASES PROVIDED THEY FOLLOW THE SCHEME AND SCHEDULE ESTABLISHED IN THE SCHEmATiC PHASE ~S .PREVIO]SLY APPROVED.BY THE '3-- ' C. ~.ERFORMANCE AND PAYMENT BQ~D. NO CoNsTRucTION SHALL BE COMmENCeD N~R BE DEEMED TO HAVE COMMENCED AT THE LEASED PREMISES UNTIL. LESSE~ HAS PROVIDED DISTRICT A PERFORMANCE AND PAYMENT BOND IN THE .AMOUNT DF THE TOTAL ESTIMATED CONSTRUCTION COSTS OF THE IMPROVEMENTS ) E~E CONSTRUCTED'BY LESSEE. SAID BOND SHALL BE'IN A FORM ACCEPTABLE TO DISTRICT AND SHALL -~FATE THE FOLLOWING: 1. 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 AND 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 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 ~-'[ABILITIES OF ANY KIND, ARISING OUT OF OR CONNECTED WITH THE )NSTRUCTION. . IN' LIEU OF A PERFORMANCE AND PAYMENT BOND, LESSEE MAY PROVIDE.- CONSTRUCTION SURETY BONDS SUPPLIED BY LESSEE'S GENERAL CONTRACTOR OR CONYRACTORS, PROVIDED SUCH BONDS CONTAIN THE SAME CONDITIONS, ARE ISSUED JOINTLY-TO LESSEE AND DISTRICT~ AND ARE IN AN AMOUNT EQUAL 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 i~PROVEMENTS SHALL HAVE' BEEN INSURED AS PROVIDED BY THIS LEASE. D. CERTIFICATE OF COMPLETION. UPON COMPLETION OF SAID IMoROVEMENTS AND ANY APPROVED MODIFICATION THERETO, SAN MATEO COUNTY HARBOR DISTRICT WILL EXECUTE AND DELIVER TO LESSEE A CERTIFICATE OF CO;n~LETION WHICH WILL RECITE THAT D~STRICT HAS INSPECTED AND APPROVED ~'-_L iMPROVEMENTS AND THAT THERE EXISTS NO DEFAULT IN T~IS LEASE WITH FILE D!O.: ................... :; .... RESPECT TO SAID I ME TS AS OF, THE ,DATE OF' CERTIFICATE, IF SUCH IS~T~E FACT. . ~ E. ~ STATEMENT OF CONSTRUCTION COSTS AND "AS-BUILT" PLANS. r"~THIN SIXTY (60)'DAYS FOLLOWING COMPLETION OF ANY SUBSTANTIAL i 1PROVENENT WITHIN THE LEASED PREMISES, LESSEE SHALL FURNISH DISTRICT ~ COMPLETE REPRODUCIBLE SET OF "AS-BUILT" PLANS AND AN ITEMIZED 'sTATEMENT 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 CHANGE~. 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 NAY 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 T.HE 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 ALLOW THE PROJECT TO MODERNIZE AND' REMAIN COMPETITIVE AS .TIME GOES ON. G. NOTICE OF NON-RESPONSIBILITY. DISTRICT HAS FULL AND r.~MPLETE ACCESS TO THE LEASED PREMISES TO POST AS MANY "NOTICES OF )N-RESPONSIBILITY" AS THE DISTRICT DEEMS APPROPRIATE. . H. ~[~ICS LIENS. 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, INCLUDING ATTORNEYS' FEES. IN COMPLYING WITH THIS PROVISION LESSEE NAY PROVIDE LEGAL COUNSEL,'ACCEPTABLE TO THE DISTRICT, TO DIRECTLY REPRESENT AND DEFEND THE DISTRICT. SAI~' 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 3!43, WHICH FREES THE LEASED PREMISES FROM THE CLAI~ 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 ~HIS LEASE .TO THE ~-~.JN]'RARY NOTWITHSTANDING. ~ ARTIC~E"v -eADJUSTMENT OF RENT · ADJUSTMENT OF MINIMUM ANNUG~_REN~. AT THE ~EGINNING OF THE '×TH (GTH) YEAR AND OF EACH FIVE-YEAR PERIOD THEREAFTER, THE MINIMUM ~NUAL. RENT SHALL BE.ADJUSTED FOR THE NEXT ENSUING FIVE-YEAR PERIOD TO ~AN AMOUNT EQUAL TO SEVENTY-FIVE (?5) 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 F]RST DAY OF EACH O~ THE FIRST THREE MONTHS.OF EACH SUCH ENSUING FIVE-YEAR PERIOD, LESSEE SHALL PAY ONELT[4ELFTH 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 CREDITED AGAINST FUTURE MINIMUM ANNUAL RENT. B. ADJUSTMENT OF PERCENTAGE RENT 1. AT ANY TIME NO EARLIER THAN TWO HUNDRED SEVENTY (Z70) DAYS NOR LATER THAN ONE HUNDRED EIGHTY (1~0) 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 DISTRICT MAY, BY WRITTEN NOTICE TO THE ~3.THER, REQUEST MODIFICATION OF THE PERCENTAGES OF GROSS RECEIPTS kYABLE 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 RENT MODIFICATION REQUEST PERIOD AND COMPLIANCE NITH THE PROVISIONS OF'THIS SUB'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 MODIFIED 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 ~'~RH, OR WITHIN SAID TIME LIMITS PRIOR. TO THE COMMENCENENT OF EACH EM-YEAR PERI.OD THEREAFTER, AS APPLICABLE, LESSEE OR DISTRICT MAY, BY ~iTTEN NOTICE TO THE OTHER, ELECT TO SUBMIT DETERMINATION OF PERCENTAGE RENTS FOR ARBITRATION. WITHIN TEN (10) DAYS AFTER SUCH ~OTICE, LESSEE AND DISTRICT SHALL EACH APPOINT AN ARBITRATOR AND INFORM THE OTHER IN WR..~ITING OF THE NAME AND ADDRE._.~S OF ITS APPOINTED ARBITRATOR. BEFORE stCTING AN ARBITRaTOR(S), ~ LESSEE AND DISTRICT MUST. AGREE ON'"THE QUALIFiCATIOnS REOUIRm--'D FOR BOTH AR~ITRA'~ORS,, IN WRITING.. ARBITRATORS MAY BE REJECTED BY THE OPPOSING SIDE ~F THE ~RBITRATION DOES NOT MEET THE AGREED UPON QUALIFICATIONS. (c) IF W'ITHIN SIXTY (60) DAYS AFTER APPOINTMENT OF THE BiTRATORS, THE ARDITRATOR. HAVE NOT AGREED ON THE KODIF[CATION' OF THE RCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT~ THE'A~BITRATORS SHALL '~,.iMEDIATELY APPOINT A THIRD ARBITRATOR, SUBJECT TO THE SAME ~UALIFICATIONS~ AND THE DECISION OF ANY TWO ARBITRATORS SHALE BE ~INDING ON THE PART]ES'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 ~ITHIN SA~D NINETY (90) DAYS~'THE PERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT SHALL CONTINUE AS THE ~ASIS 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 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 VOLUNTARILY AS PROVIDED HEREIN~ EITHER PARTY NAY PETITION TO THE SUPERIOR ~OURT, IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 1Z80, ET SEQ.: OF THE CODE OF CIVIL PROCEDURE OF THE STATE OF CALIFORNIA. (~) IN N'O EVENT SHALL THE PERCENTAGE OF GROSS RECEIpTs. -.AYABLE AS PERCENTAGE RENTS BE RAISED OR LOWERED MO~E THAN TWENTY-FIVE PERCENT (ZSX) .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. ARTICLE VI - [~E 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~ HHICH ARE PAYABLE TO DISTRICT BY LESSEE, ARE A~REED TO BE PAYABLE WITHOUT..ABATEMENT~ DEDUCTION, OR OFFSET OF ANY KIND OR CHARACTER WHATSOEVER.. ' · IF~MONEY"PAYA~LE TO DISTRICT ~S A CONDIT'ION OF THiS LEASE IS NOT PAID NITH~N~TEN~ (10) DAYS ~HEN DUE, A LATE CHARGE OF 5% OF THE AMOUNT DUE,SUA~L BE ASSESSED AND THE PRINCIPAL SHALL ACCRUE INTEREST AT THE THEN CURRENT PRIME ~RATE, AS SET BY BANK OF ANERICA ON SAID DATE, FROM ~4D AFTER THE'DUE DATE OF ANY PAYMENT OF FIXED MINIMUM RENT, ERCENTAGE RENT, RENT SECURITY DEPOS)T, LIQUIDATED DAMAGE~ OR ANY [HER PAYMENTS. ARTICLE VII -iSECURITY DEPOSIT ' . . ' ' .-'.. . LESSEE SHALL PROVIDE DISTRICT'W'ITH, 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 THE AMOUNT OF THE THEN CURRENT MINImUM.ANNUAL RENT; PROVIDED~. HOWEVER, AT ALL TIMES THE SECURITY DEPOSIT. SHALL BE NOT' LESS THAN $34,§00. $10~350 OF'SAID SECURITY DEPOSIT IS ALLOCATED TO LEASE PARCEL B AND $~4~1~0 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 TERMS, COVENANTS, AND CONDITIONS OF THiS LEASE: .. A. C'ASH.. ' 'B. THE ASSIGNMENT TO DISTRICT OF A SAVINGS DEPOSIT HELD IN A FINANCIAL INSTITUTION IN SAN MATEO COUNTY ACCEPTABLE TO DISTRICT, SUCH ASSIGNMENT SHALL CONSIST OF DELIVERY TO DISTRICT OF THE'ORIGINAL ~.~,SSBOOK FOR SUCH SAVINGS DEPOSIT AND EXECUTION AND DELIVERY OF A )ITTEN ASSIGNMENT. OF SAID DEPOSIT'TO DISTRICT ON A FORM.APPROVED BY C. A RENEWABLE 'TIME CERTIFICATE OF DEPOSIT FROM A F~NANCIAL 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 $34,500 REQUIRED TO BE IN ONE OF THE THREE (3) ABOVE'DESCRIBED FORMS. E. A RENEWABLE INSTRUMENT OR INSTRUMENTS OF CREDIT'FROM ONE OR HORE FINANCIAL INSTITUTIONS, SUBJECT TO REGULATION BY THE STATE OR FEDERAL'GOVERNMENT,'PLEDGING THAT FUNDS NECESSARY TO SECURE PERFORMANCE OF THE LEASE TERMS, COVENANTS, AND CONDITIONS ARE GUARANTEED FOR PAYMENT, AND AGREEING THAT SAID FUNDS SHALL SECURE LE$SEE'S PERFORMANCE, 'AND .THAT-ALL OR ANY PART SHALL BE.PAID TO DISTRICT GPON DEMAND. BOTH THE·FINANCIAL INSTITUTION(S)AND THE FORM OF THE INSTRUMENT(S) MUST BE APPROVED BY DISTRICT. LESSEE MAY CHANGE THE FORM OF SECURITY DEPOSIT (A. THROUGH INCLUSIVE ABOVE). ONLY WITHIN THIRTY ~(30) DAYS AFTER AN~ ANNIVERSARY OF. ,.T.~E LEASE TER'M. REGARDLESS OF THE FORM IN ~HICH LESSE~ ELECTS'TO MAKE ,ID SECURITY DEPOSIT, ALL OR ANY PORTION OF THE PRINCIPAL SUM SHALL r AVAILABLE UNCONDITIONALLY TO DISTRICT FOR CORRECTING ANY DEFAULT OR' -8- CENTRAL BREACH OF THIS 'LEASE ESSEE, HIS SUCCESSORS O~SI-GNS, OR FOR PAYMENT OF EXPENSES RRED BY. DI~TRIC~ AS A RESULT OF THE FAILURE OF LESSEE,oHIS ~UCCESSORS OR ASSIGNS, TO FAITHFULLY PERFORM ALL THE TERMS~ COVEN'~NTS, AND CONDITIONS OF THI~ LEASE. SHOULD LESSEE ELECT TO ASSIGN A SAVINGS DEPOSIT TO DISTRICT, ~OVIDE A TIME CERTIFICATE OF DEPOSIT, OR PROVIDE AN INSTRUMENT OF ..2EDIT TO FULFILL THE SECURITY DEPOSIT REQUIREMENTS OF THIS LEASE, THE DEPOSITORY 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 k CERTIFICATE, AS PROVIDED ABOVE, MA~Y 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 ~AY', AT D/STRICT'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*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 MA'INTAIN THE REQUIRED SECURITY 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, REASSIGNED, RELEASED OR ENDORSED TO LESSEE ON ORDERs' AS 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 DURIN~ WHICH THERE . ]S ANY CONSTRUCTION, INCLUDING "MAJOR REPAIR" (AS LATER DEFINED IN THIS LEASE). i, 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 SUE:-CONTR~CTOR'S EMPLOYEES, WITH LIMITS OF NOT LESS THAN ONE HUNDRED PERCENT' (1OO%) OF THE TOTAL ESTIMATED COST OF CONSTRUCTION. Z. BOILER, UNUSUAL HAZ~_6~_~U[~ INSURANCE' -9- TIME SUOH EQUIPMENT IS LOCATED ON' THE LEASED PREI4!SES. IF LESSEE C6~ME~CES, P~RMITS,' OR CAUSES THE CONDUCT OF ANY ACTIVITY OR THE BRiNGING-OR .OPERATION OFi ANY EQUIPMENT ON OR ABOUT THE LEASED PREMISES ~ -~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 O~HERWISE HAYE THAT .RIGHT, TO DEMAND THE.REMOVAL, CESSAT!ON,'OR ABATEMENT OF SUCH ACTIVITY'OR OPERATION. OIHER INSURANCE, IN AMOUNTS FROM TIME TO TI~E REASONABLY REQUIRED BY DISTRI"CT, AGAINST OTHER INSURABLE .RISKS-, IF AT THE TIME SUCH INSURANCE IS PROCURABLE AND THE TOTAL ~RE~IUM COST FOR' SUCH INSURANCE DOES NOT EXCEED AN ~MOUNT 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 INSURANCE NORKERS' coMPENs'ATION INSURANCE COVERING ALL PERSONS EMPLOYED IN CONNECTION WITH 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 NAINTAIN'~ KEEP IN ~ORCE~ AND PAY ALL PREMIUMS' REQUIRED TO MAINTAIN AND KEEP IN FORCE THE FOLLOWING INSURANCE: 1'. ~U~ LIABIL~TY' AND PROPERTY DAMAGE A COMBINED ~"iNGLE LIMIT, COMPREHENSIVE GENERAL LIABILITY POLICY IN THE AMOUNT OF ! _ !LLION ($i,000,000). IN ADDITION, A'FIVE ILLI'ON L_2~($§,000,000.) EXCES~ LIABILITY POLICY SHALL BE PROVIDED. THE PROPERTY DAMAGE INSURANCEISHALL COVER 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'. " 2. FIRE AND'EXTENDED COVERAGE 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 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 BE SUFFICIENF 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 COS~ 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 CANNOT RESOLVE SAID DISPUTE, DISTRICT MAY, NOT MORE OFTEN THAN'ONCE EVERY TWELVE MONTHS, REQUEST THE CARRIER OF THE INSURANCE THEN IN FORCE TO DETERMINE THE FULL INSURABL£ VALUE AS DEFINED IN THIS "-ROY!SION, AND THE RESULTING DETERMINATION SHALL BE CORCLUSIVE BETWEEN HE PARTIES F'OR THE PURPOSE OF THIS LEASE. DISTRICT SHALL, 'AT ESSE~'S SOLE COST AND EXPENSE, COOPERATE FULLY WITH LESSEE )0 OBTAIN THE LARGEST POSSIBLE RECOVERY, AND ALL POLICIES'OF FIRE AND EXTENDED COVERAGE I NSURANCB A~ L~P~ R IRED BY THIS ARTICLE SHA O~IDE THAT'THE PROCEEDS OF ~ICH SH BE DEEMED 'TO Bt HELD IN '~UoT BY THE RECIPIENT FOR TH~,USES AND PURPOSES PRESCRIBED BY THIS 'LEASE. · ~., A. INSURANCE TRUSTEE PRIOR TO THE COMMENCEMENT OF THE TERNS OF THIS LEASE, LESSEE SHALL DESIGNATE THE INSURANCE TRUSTEE, F"-AiCH DESIGNATION SHALL BE. SUBJECT TO APPROVAL BY DISTRICT.- THE qSURANCE TRUSTEE MAY BE ANY CALIFORNIA OR FEDERALLY CHARTERED SAVINGS. ,~.~D 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., 1N THE ABSENCE OF A DESIGNATION BY LESSEE OR APPROVAL BY .DISTRICT,~THE TREASURER OF THE'SAN MATEO COUNTY HARBOR SHALL SERVE AS INSURANCE TRUSTEE. . .~,-' B. POWERS AND DUTIES OF INSURANCE TRUe[II ALL PROCEEDS PAYABLE PURSUANT TO THE PROVISION OF ANY POLICY~OR POLICIES'OF FIRE INSURANCE OR EXTENDED COVERAGE SHALL BE EXPRESSLY NADE 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 HITH 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, RESTORATtON~ OR RECONSTRUCTION OF ANY IRPROVEMENT DAMAGED OR DESTROYED BY THE CASUALTY GIVING RISE TO T~E iNSURANCE CLAIM: (1') ALL PROCEEDS RECEIVED'BY THE .INSURANCE TRUSTEE' FROM ANY INSURANCE POLICY OR FIRE INSURANCE POLICY OR EXTENDED COVERAGE POLICY. SHALL FIRST BE USED, SUBJECT TO ANY OTHER CONDITIONS ?-0NTAiNED IN THIS LEASE, BY SUCH INSURANCE TRUSTEE AS A FUND'FOR THE ESTORATION AND REPAIR OF ANY AND ALL BUILDINGS, IMPROVEMENTS, AND ~UiPMENT 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,' HOWEYER, THAT IF SUCH INSURANCE TRUSTEE SHALL., ~N ITS REASONABLE DISCRETION, 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. HAVE THE RIGHT TO APPOINT AN ARCHITECT OR ENGINEER CHOSEN BY THE INSbRANCE TRUSTEE TO SUPERVISE THE CONSTRUCTION WORK AND ~O MAKE F'A'YKENTS ON VOUCHERS APPROVED By SUCH LAST-MENTIONED ARCHITECT OR EHGi~EER. THE REASONABLE EXPENSES OR CHARGES OF SUCH ARCHITECT-OR ENGINEER SHALL BE PAID BY SUCH INSURANCE TRUSTEE OUT OF THE TRUST FUND. - - -11- ., (3) A~i~PROCEEDS NOT DISBURSED B~ii~THE'~'NSURANCE TRUSTEE, AS PROVID'ED ~OVE, AND REMAINING IN'.~THE~.NDS OF THE INSURANCE, TRUSTEE AFTER THE COMPLETION OF THE. RESTORATION OR THE REF'AIR WORK ~AND THE PAYMENT AND DISCHARGE OF THE COST THEREOF~ SHALL~ ~]THIN THIRTY (SO) DAYS AFTER WRITTEN DEI-~AND MADE BY LESSEE AND ACCbMPAN'IED BY REASONABLE PROOF OF SUCH COMPLETION AND PAYMENT, BE ~'~LIVERED 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 ('1~0) 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 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. (7) IF THE INSURANCE TRUSTEE SHALL RESIGN OR FOR ANY REASON BE UNWILLING TO ACT OR CONTINUE TO ACT, THE LESSEE SHALL DESIGNATE A SUBSTITUTE INSURANCE TRUSTEE IN THE' SAME MANNER AND ""]BJECT 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 (I00%) OF GROSS INCOME FOR A SIX MONTH PERIOD. 4. 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 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 D0 BUSINESS IN THE STATE OF CALIFORNIA. ALL SUCH POLICIES SHALL BE MGM-ASSESSABLE AND SHALL CONTAIN LANGUAGE, TO THE EXTENT OBTAINABLE~ TO THE EFFECT THAT: 1. .ANY LOSS SHALL BE PAYABLE NOTWITHSTANDIN~ ANY ACT OR -IZ- NEGLIGENCE OF DIST~IC] ITS OFFICERS, A'GENTS~ LOYEES THAT MAY OTHERWISE, RESULT IN A FORFEITURE'O~ THE'INSURANCE, Z. .THE INSURER WAIVES THE RIGHT OF SUBROGATION AGAINST DiSTR!C~', ITS OFFICERS, AGENTS AND EMPLOYEES. TIHE 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 NbTICE 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 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, 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 NAY REIMBURSE ITSELF FOR THE COST OF SAID INSURANCE FROM LESSEE'S SECURITY DEPOSIT. --- 6. DISTRICT MAY, AT ANY TIME, BUT NOT MORE OFTEN THAN ONCE A {AR, REQUIRE LESSEE TO INCREASE THE MINIMUM DOLLAR AMOUNTS FOR ~SURANCE REQUIRED BY THIS LEASE,.BUT EVERY SUCH INCREASE SHALL BE REASONABLE UNDER THE CIRCUMSTANCES. ART'!CLE IX - POSSESSORY INTEREST'TAXES~_~[~ ASSESSMENTS AND FEES A. PURSUANT TO CALIFORNIA REVENUE AND TAXATION CODE SECTION 1OT.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 ~E 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 ~HE LEASED PREMISES, I~CLUDING TA~ES 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 PROMPTLY ANY TAXES LEVIED 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 LAW FOR ANY LICENSES OR PERMITS FOR ANY BUSINESS OR ACTIVITY OF LESSEE OR SUBTENANTS UPON THE LEASED PREMISES. CONSTITUTJE CAUSE FORI~IFICATION ~F RE~IT PAYABLE--BYW!' LESSEE' B. IF 'THE IMPOSITION OF ANY TAX, FEE, CHARGE, DUTY, OR ASSESSMF_,NT SHALL BE DEEHED 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' BY LAW, PROVIDED,' HOWEVER, ANY JCH TAXES, FEES, CHARGES,· DUTIES, OR ASSESSMENTS SHALL HAVE FIRST 'BEEN PAID. ARTICLE X - OPERATIONS A;. RENTS AND SERVICES. LESSEE SHALL BUILD AND OFFER FOR RENTAL TO SUBTENANTS, THE LEASED PREMISES~ LESSEE SHALL B~-ILDi 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 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 BY ~SSEE 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. 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 PROTE~[!gB. LESSEE SHALL TAKE ALL REASONABLE MEASURES TO: 1. AVOID ANY POLLUTION OF THE ATMOSPHEME, LAND OR -14- F[;..~ ?!O.: ......... ~ .... " ,^rEM OR LITTERIN .O kND OR WATER CAUSED BY 0 GINATIN IN,. ON oR ABOUT LES, SEE'~ FACILITIES. ' · Z. KEEP THE NOISE LEVEL ON THE LEASED PREMISES TO A MIN~MUN'~O THAT PERSONS IN THE GENERAL NEIGHBORHOOD WILL BE ABLE TO r-"C:~FORTABLY ENJOY OTHER FACILITIES LEASED BY LESSOR IN THE VICINITY OF HE LEASED PREMISES. 3. KEEP THE LIGHTS ON THE LEASED ~REMZSES FROM ADVERSELY-AFFECTING THE OPERATION OF BOATS {N THE AREA. : -':' 4. PREVENT'ALL PObLUTANTS, INCLUDING PETROLEUM PRODUC~S OF ANY 'NATURE~ FROM BEIN~ DISCHARGED INTO THE HARBOR WATER'S. .~.:~: SUPERVISION BY LESSEE " -~LESSEE'S MANAGEMENT SHALL BE PERSONALLY EXPERIENCED AND SKILLED IN THE MANAGEMENT OF COMMERCIAL REAL ESTAT.E PROPERTIES. · LESSEE SHALL..REQUIRE THAT SUBTENANTS PRESENT E¥IDENCE OF THEIR EXPERIENCE AND'SKILL IN 'MANAGING THE OPERATIONS CONTEMPLATED BY THEIR SUBLEASES. ANY SUBTENANT SHALL KEEP EMPLOYED AT ALL TIMES,.THE APPRDPRIATE 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 ~'~HALL 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 LA~ EXCEPT THAT SUCH A ~REACH SHALL NOT BE GROUNDS FO~ TERMINATION OR CANCELLATION OF THIS LEASE. ' "'/:" ~i ..... " ' ' ARTICLE XI - ~A~UIDATED DAMA~[~ "':" 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 SU~ OF ONE-ONE HUNDREDTH (1/1OO) 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 FOLLOWING PROVISIONS: LEASE PROVISIONS ARTICLE IV USES AND SERVICES ARTICLE V OPERATING SCHEDULE AND CONTROLLED PRICES ARTICLE VI IMPROVEMENTS AND INVESTMENTS ~ -i5- C~NTRAL R '-" r:'-,' ~ ?O.: .............................. GENERAL CON IONS ~ ~ A~TICLE 'IV CONSTRUCTION · -' 'ARTICLE X OPERATIONS ~- ARTICLE'XV FINANCIAL REPORTS AND RECORDS JCH DAMAGES'ARE AND HILL CONTINUE TO BE IMPRACTIBLE AND EXTREMELY 'uIFFICULT TO DETERMINE. EXECUTION OF THIS LEASE SHALL CONSTITUTE AGREEMENT BY 'LESSEE AND DISTRICT THAT ACTUAL DAMAGES FOR BREACH OF ANY OF SAID P~OVlSIONS'ARE AND WILL CONTINUE TO BE IMPRACTIBLE AND EXTREMELY-DIFFICULT TO DETERMINE A~D THAT ONE-ONE HUNDREDTHS 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 tF 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 PERIO~ PRIOR TO WRITTEN NOTICE TO LESSEE FROM GENERAL MANAGER THAT A VIOLATION EXISTS, AND FURTHER, SUCH DAMAGES SHALL BE WAIVED UNLESS THE BOARD OF HARBOR COMMISSIONERS DETERMINES THAT A VIOLATION EXISTS. B. DECEARATORY RELIEF. LESSEE SHALL HAVE THE RIGHT TO HAVE '-~NY 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 EXIS¥S. ARTICLE XII - PROTECTION OF LEASED PREMISES LESSEE SHALL M~INTAIN AN ADEQUATE LIGHTING AND TAKE OTHER SECURITY PLEASURES 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 PROPERT~ 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'III - COMPLIANCE WITH LAWS AND REGULATIONS A. LESSEE SHALL AT ALL TIMES OBSERVE AND COMPLY WITH, AND SHALL CAUSE ALL ITS EMPLOYEES TO OBSERVE ~ND COMPLY WITH ALL APPLICABLE ..J..A~S, ORDINANCES, RE6ULATIONS, ORDERS, AND DECREES OF ~LL PUBLIC -16- AUTHORITIES HAVIN~.JU~_~DICTION OVER OPERATIONS ~ER"THIS LEASE, WHETHER ~OT IN FoRcE O~ ~HICH MAY H~REA~TE't~,.~E S.' IF THE IMPOSITION OF ANY LAW, ORDER, ORDINANCE, REGULATION OR DiRECTIO~ SHALL RE DEEMED BY LESSEE TO BE IMPROPER, ILLEGAL, ~--'3,{CESSIVE, OR UNREASONABLE, IT MAY AT ITS SOLE COST AND'EXPENSE, ISPUTE AND CONTEST THE SAME IN ANY MANNER PROVIDES BY LAN. ARTICLE XIV - HOLD HARMLESS A. LESSEE SHALL DEFEND ALL SUITS BROUGHT AGAINST 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, AND EMPLOYEES HARMLESS FROM ANY LIABILITY, COST, EXPENSE, OR LOSS ON ACCOUNT THEREOF, EXCEPT THA~ 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. ~iSTRICT. SHALL GIVE WRITTEN NOTICE TO LESSEE WITHIN TEN (10) DAYS AFTER AN~ 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 THA~ ?'~ERATIONS ~Y THE LESSEE OR CONDITIONS ON THE LEASED PREMISES CREATE A IABILITY OF THE DISTRICT. IF SUCH NOTICE SHALL NOT BE GIVEN WITHIN ~iD PERIODS, DISTRICT SHALL INDEMNIFY LESSEE AND HOLD IT HARMLESS FROM 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 WHERE 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 RECORDS 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 SYSTEH OF ACCOUNTS AND RECORDS WHICH, IN THE OPINION OF THE DISTRICT, CONFORMS TO GOOD ACCOUNTING PRACTICE. THE SYSTEM OF ACCOUNTS AND RECORDS SHALL BE SUBMITTED TO DISTR~CT FOR REVIEW AND APPROVAL PRIOR .... J COMPLETION OF ANY PHASE OF CONSTRUCTION. NO CHANGE~SHALL BE MADE ~ THE SYSTEM'OF ACCOUNTS AND RECORDS THEREAFTER BY LESSEE UNLESS SUCH ~ANGE HAS BEEN FIRST APPROVED IN WRITING BY DISTRICT; SUCH APPROVALS Bv DISTRICT SHALL NOT ~E UNREASONABLY WITHHELD. ANY DISPUTE SHALL BE -17- FROCESSED IN ACCOR~ANI WITH THE PROCEDURES SET :TH.IN ARTICLE XIX - CLAIMS AND PRO.TEST; . ~ 'm ' 1.' SOURCE DOCUMENTS. THE BUSINESS RECORDS MUST BE SUP~O~TBD BY SOURCE DOCUMENTS SUCH AS SALES SLIPS, UNBILLED ACCOUNTING DOCUMENTS, 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 .,~CEIPTS 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 THE CUSTOMER THE AMOUNT OF THE TRANSACTION AND AUTOMATICALLY ISSUE A RECEIPT. THE REGISTERS SHALL BE EQUIPPED WITH DEVICES WHI'CH LOCK IN SALES TOTALS AND OTHER " TRANSACTION RECORDS, OR WITH COUNTERS WHICH ARE NOT RE-SETTABLE 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. 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 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 OF THIS LEASE. 3. DISTRICT'S ACCESS TO RECORDS. DISTRICT sHALL HAVE THE · ,tGHT, 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. TO CAUSE AN AUDIT OF SAID RECORDS TO BE MADE; 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; ~. TO MAKE COPIES OF ANY OR ALL SUBLEASES, LICENSES, CONCESSION AGREEMENTS, AND OTHER APPROPRIATE DOCUMENTS; 9- TO EXAMINE AND MAKE COPIES OF LESSEE'S ARTICLES OF I~.~CCRPORATION, BYLAWS, PARTNERSHIP AGREEMENT, .LIST OF SHAREHOLDERS~ ANY OTHER DOCUMENT PERTINENT TO DETERMINING THE FORM OF AND O~NERSHIP IN LESSEE AND ANY AMENI~MEN~TS TO ANY OF SUCH DOCUMENTS~ · -18- FiLE h. 'TO ~MINE AND MAKE .CO~IES OF ~ES TAX REPORTS, AND ANY'PORTION OR'ALL OF ANY INCOM~ TA~ RETURNSA~'PLICABLE TO LESSEE'~ ~US~NESS/ES UNDER THIS LEASE. LEssEE KNOWINGLY AND SPECIEICALLY WAIVES ANY AND ALL RIGHTS OR PRIVILEGES REGARDING SAID INCOME TAX RETURNS THAT MIGHT. OTHERWISE PREVENT THiER PRODUCTION AND -~!SPECTION (OR COYPING) BY DISTRICT. ~SSEE SHALL MAKE ALL RECORDS SPECIFIED IN THE NOTICE AVAILABLE AT THE TIME SPECIFIED, IF REASONABLE, AND AT THE PLACE WHERE THE RECORDS ARE TO BE KEPT; PROVIDED, HOWEVER, THAT*DISTRICT MAY 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 F~SCAL YEAR AND SHALL BY RRITTEN NOTICE ADVISE DISTRICT OF ANY CHANGE IN SUCH CLOSING DATE. r"~[THIN NINETY (90) DAYS AFTER THE'CLOSE OF THE FISCAL YEAR, LESSEE {ALL FURNISH DISTRICT AN ANNUAL FINANCIAL STATEMENT OF THE LESSEE~ ~EPARED IN A MANNER APPROVED BY THE DISTRICT, VERIFIED AND SIGNED BY A 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. ~DERSTATEMENT 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 PAID BY LESSEE ~ITHIN 3HiRTY (30) DAYS AFTER .WRITTEN DEMAND AND LESSEE SHALL IMMEDIATELY PAY Ti~E 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 WITHIN~SIXTY (~0) DAYS AFTER SUCH PAYMENT ,-~LESS ANY DISPUTE HAS BEEN PROCESSED IN ACCORDANCE WI~H THE -19- pROCEDURES SET.'FOR~H RTICLE XIX - CLAIMS. AND ~OTEST, AND IN SUCH EVENT, SLJCH SI~TY (60) AY PERIOD S~ALL,COMMENCEw.h~TER THE DECISION OF T~E BOARD OF HARBOR CO~MISSIONERS IS F~NAL. · D. -,~NFIDENTIAL INFORMATION. ALL INFORMATION OBTAINED BY 'r-'[STRICT~ ITS OFFICERS, AGENTS, AND EMPLOYEES, REQUIRED TO BE PROVIDED i { LESSEE BY THIS-ARTICLE, SHALL BE TREATED AS CONFIDENTIAL EXCEPT IN ~Y LITIGATION OR ARBITRATION PROCEEDINGS BETWEEN DISTRICT., LESSEE SUBTENTANT, OR ENCUMBRANCE HOLDER AND EXCEPT ALSO THAT DISTRICT MAY DIVULGE SUCH' INFORMATION TO A GOVERNMENTAL AGENCY, 0R"TO ENCUMBRANCE HC~DER OR ITS REPRESENTATIVE,. ON DEMAND. ARTICLE XVI ASSIGNH~i~_~LBTTI~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 LEAS~ 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 WITHHELD. ~. ~ONDITIONS 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 ?'JBLESSEE. SUBRENTS SHALL BE FIXED AT THE FAIR RENTAL VALUE'ROW THE ~ tEMISES. SUBLEASES SHALL BE MADE EXPRESSLY SUBJECT TO THIS LEASE AND 4ALL PERMIT THE SUBLESSEE TO PERFORM ANY ACT REQUIRED OF LESSEE UNDER THIS LEASE. SUBLEASES SHALL EXPRESSLY REQUIRE THE SUBLESSEE TO COMPLY WITH 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 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 ~F THIS LEASE BY 'LESSEE, OR MUTUAL CANCELLATION THEREOF, SHALL NOT WORK A MERGER, AND SHALL, AT THE OPTION OF DISTRICT, TERMINATE ALL OR ANY EXISTING SUILEASES 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 A:=~IGNMENT OR SUBLEASE TO AN INTERMEDIARY FCR THE PURPOSE OF FURTHER SUILETTING TO SUBTENANT OPERATORS, OR' TAKING OVER LESSEE'S FUNCTIONS ?'~.:, I.~ANAGER OF ALL OR SUBSTANTIALLY ALL OF THE LEASED P~EMiSES SHALL BE EEPiED AN ASSIGNMENT OF THE LEASEHOLD. LESSEE SHALL FILE A REQUEST TO ~ciGN LEASEHOLD TO WHICH SHALL BE ATTACHED A COMPLETED PROPOSER'S ~UESTIO,~NAIRE PREPARED BY THE PROSPECTIVE ASSIGNEE. CONCURRENTLY WITH -ZO- FILE h!©.: .................. FILING THE REQUES% TOiSIGN LEASEHOLD,' LESSEE SIL ~AY~IN'CASH OR CERTIFIED CASHIER'S CH~K THE SUM OF FI~E HUNDRED"'DOLLARo ($500.00) TO ENABLE D)STRI~T TO ADEQUATELY INV'E~TIGATE THE PROPOSED ASSIGNEE'S QUALIFI~ATIO~NS AS A PERMITTED ASSIGNEE. IF THE PROPOSED ASSIGNEE'S NET. W~RT~ ON THE DATE OF ASSIGNMENT IS NOT EQUAL TO OR GREATER THAN LESSEE'S NET WORTH AT THE COMMENCEMENT OF THIS LEASE, DISTRICT MAY F"SQUiRE LESSEE TO GUARANTEE SUCH ASSIGNEE'S OBLIGATIONS HEREUNDER FOR JCH PERIOD AS DISTRICT DEEMS ADVISABLE. NET WORTH SHALL MEAN THE .,.~OUNT BY WHICH THE TOTAL OF ALL ASSETS SHALL EXCEED THE TOTAL 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 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, D~STRICT 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 A ~ETIRED '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 PROM SUCH ASSIGNEE UPON TRANSFER OF LESSEE'S INTEREST IN THIS LEASE TO A DISTRICT-APPROVED' 'PERSON OR ENTITY SHALL-NOT BE INCLUDED AS 6ROSS RECEIPTS FOR 'THE [TERMINATION OF' RENT. UPON ASSIGNMENT OF LESSEE'S INTEREST IN THIS [ASE TO A DISTRICT-APPROVED ASSIGNEE WHO HAS UNCONDITIONALLY ASSUMED .,~E 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. HYPOTHECATION. LESSEE MAY, WITH THE PRIOR WRITTEN APPROVAL OF DISTRICT, GRANT A SECURITY INTEREST TO THIS LE~SE FOR THE PURPOSE OF FINANCING CONSTRUCTION, INCLUDING "MAJOR REPAIRS" AND "MINOR REPAIRS" SUBJECT TO COMPLIANCE ~ITH 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. l. NO SECURITY INTEREST IN THIS LEASE (WHICH TERM SHALL BE DEEMED TO INCLUDE THE LEASEHOLD MORTGAGE OR'DEED OF TRUST, THE NOTE E~IDENCING 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-OWNED IMPROVEMENTS NO~ O~ HEREAFTER ERECTED ON THE LEASE PRMISES. Z. ANY SECURITY INTEREST IN THIS LEASE SDHALL BE GRANTED FOR ONLY THE .FOLLOEING PURPOSES: (1') TO FINANCE CONSTRUCTION OF F-'~RMANENT IMPROVEMENTS AND STRUCTURES UPON THE DEMISED PREMISES~ '~ ~ROVIDE "TAKE-OUT'~ FINANCING OF ANY CONSTRUCTION LOAN NOT TO EXCEED · ..IR ~EATER OF NINETY PERCENT (~OX) OF THE APPRAISED VAI.UE OF THE IHPROVEMENTS'ON THE ~ED PREM!SE~, ~3) ~0 R:r~NANCE THE CONSTRUC?ION NbT TO EXCEED EIGHTY-FIVE PERCENT (85Z) OF THE APPRIASED VALUE O~ THE' IMPROVEMENTS ON. THE DEMISED PREMISES AND (4) TO FINANCE LES~E~'S.,CAPITAL ADDITIONS AND EQUIPMENT, TENANT IMPROVEMENTS, rACQUISITIONS AND/OR REPLACEMENTS REASONABLY REQUIRED IN PURSUIT OF ITS JSINESS 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 H~VE ANY NOTICE ~HEREOF, 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") ~HICH 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 LIMITED. TO, AN INSURANCE COMPANY OR TRUST COMPANY OR REAL'ESTATE INVESTMENT TRUST MORTGAGE TRUST OR MUTUAL FUND OR PENSION AND WELFARE PROFIT SHARIN6 FUND OR ENDO~.NMENT FUND WITH AN INVESTMENT PORTFOLIO OF NOT LESS THAN TEN MILLION DOLLARS ($10,000,000), A CHARITABLE OR NON-PROFIT CORPORATION OR ASSOCIATION WITH AN INVESTMENT PORTFOLIO OF NOT LESS THAN FIVE EILL~ON DOLLARS ($5,000,000), ANY~CALIFORNIA OR FEDERALLY CHA~TERED CORPORATIONS (IF LEGALLY EMPOWERED TO MAKE LOANS CONTEMPLATED ~Y THIS LEASE), UNLESS SPECIFICALLY ALLO~ED AND'.APPROVED BY THE DISTRICT IN WRITING.. ? 4. NO SECURITY iNTEREST IN THIS LEASE OR ASSIGNMENT THEREOF 4ALL BE VALID UNLESS ALL OF THE FOLLOWING CONDITIONS ARE MET.: z AT THE TINE 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 ,. ~. SUCH SECURITY INTEREST SHALL EXPRESSLY PROVIDE THAT ENCUMBRANCE HOLDER SH~LL PROVIDE EVIDENCE TO'DISTRICT THAT ENCUMBRANCE HOLDER HAS ACCEPTED OR APPROVED THE COMPLETED I~PROVEMENTS 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 PROCEEDS FROM INSURANCE, INCLUDING FIRE OR EXTENDED COVERAGE, SHALL BE USED FOR REPAIR OR REBUILDING OF THE LEASEHOLD IMPROVEMENTS AN~ SUCH OTHER EXPENSES AS ARE EXPRESSLY REQUIRED TO BE PAID FROM SUCH PROCEEDS BY THIS LEASE. SUCH SECURITY INTEREST MAY PROVIDE THAT AFTER SUCH F'ROCEEDS HAVE T-:REM SO APPLIED, ANY'REMA. ININ~ BALANCE, RHICH WOULD THEN BE PAYABLE TO LESSEE, COULD BE USED TO REPAY ALL OR PART OF THE OUTSTANDING LOAN SECURED BY SUCH SEE~URITY INTEREST. -- ......... .... · e. SUCH SECURITY'-INtEREST SHALL EXPRESSLY PROVIDE THAT ALL'.NO%I~ES gF'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 r" JE DEFAULT TO BE'CURED IF LESSEE FAILS TO DO SO. DISTRICT SHALL HAVE ~ENTY (ZO) DAYS IN WHICH TO CURE ANY DEFAULT OR TO CAUSE ANY DEFAULT __3 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 [ONG AS THE SU~LESSEE OR SUBTENANT PERFORMS ITS SUBLEASE PROVISIONS AND 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. ~. 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 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 F--ALE, SUCH ENCUMBRANCE HOLDER SHALL HAVE THE PRIVILEGE OF TRANSFERRING iFS iNTEREST IN SUCH LEASE TO A WHOLLY O~NED SUBSIDIARY CORPORATION _[THOUT THE PRIOR CONSENT OF DISTRICT, AND IN SUCH EVENT, SUCH ENCUM3RANCE 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 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 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 BY LESSEE. 7. WRITTEN CONSENT OF ENCUMBRANCE HOLDER SHALL BE OBTAINED PRIOR TO ANY AMENDMENT TO THIS'LEASE. .. B. EACH AND ALL OF THE PROVISIONS, AGREEMENTS, TERMS, COVENANTS, AND CONDITIONS OF THIS LEASE TO BE PERFORHED~ KEPT AND OBSERVED BY DISTRICT AND ~ESSEE SHALL BE BINDING UPON THE HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS, AND ASSIGNS OF DISTRICT AND LESSEE~ AND ALL RIGHTS, PRIVILEGES AND BENEFITS ARISING UNDER THIS LEASE IN FAVOR OF DISTRICT, LESSEE AND ENCOMBRANCE HOLDER SHALL BE AVAILABLE IN FAVOR OF THE HEIRS, EXECUTORS, ADMiNISTRA~ORS, - '-JCCESSORS, AND ASSIGNS.THEREOF RESPECTIVELY, PROVIDED, HOWEVER, THAT ANY ASSIGNMENT, H~POT~cATIoN, OR SUBLETTING.BY THROUGH LESSEE OR ENCOMBRANCE HOLDER IN VIOLATION 0F'THE ~ROVIS!ONS OF THIS LEASE SHALL BE ¥OID~ 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, '",~HALL 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 WOTWITHSTANDING. IN THE EVENT THE LEASE· IS TERMINATED BY. THE DISTRICT FOR THE ABOVE CAUS~,.THE ENCUMBRANCE HOLDER SHALL HAVE THE RIGHT TO ASSUME THE LEASE, AS AN ASSIGNEMENT, WITHOUT PRIOR APPROVAL OF THE DISTRICT'AN~ 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 - OWNERSHIP OF LESSEE A. ANY VOLUNTARY CHANGE' IN LEGAL STATUS O~ LESSEE, I'NCLUDING, WITHOUT LIMITATION, A CHANGE TO A SOLE PROPRIETORSHIP, PARTNERSHIP, CORPORATION, JOINT VENTURE, OR ANY OTHER ENTITY,.NATURAL OR ARTIFICIA~ 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 ,.SLI%-CLAIMS AND PROTEST. THE SALE'OF LIMITED PARTNERSHIP.SHARES TO- ! iEVESTORS, OR THE TRANSFER OF A PORTION OF THE LIMITED PARTNERSHIP HARES 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 ~RANSFER 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,.SUBLE~TING AND HYPOTHECATION,. UNLESS ~HE.PRIOR WRITTEN CONSENT OF DISTRICT BE OBTAINED. SUCH CONSENT SHALL NOT BE U~REASONABLY 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 F'~RSUANT TO BANKRUPTCY, OR IS RELEASED, AND ALL CONSEQUENT ORDERS, ADJUDICATIONS, CUSTODIES~ AND SUPER~!SORS ARE DISMISSED, VACATED, OR HER~ISE PERMANENTLY STAYED OR TERMINATED WITHIN NINETY (~0) DAYS FTER THE APPOINTMENT, FILING~ OR OTHER INITIAL EVENT, SUCH ~¥ENT HALL BE DEEMED AN ASSIGNMENT PROHIBITED BY ARTICLE-XVI - ASSIGNMENT, ~J --TTING AND HYPOTHECATION. ANY EXTENSION OF TIME NAY ONLY BE GRANTED UPON THE CONDITION THAT A WRITTEN REQUEST FOR EXTENSION OF -Z4- F~L~ NO.: TIME IS FILED WITH. STRICT PRIOR TO THE E×PI~ION OF SAID NINETY (90) DAY PERIOD, AND SUCH FURTHER ~ONDI~IONS'~R'S THE DISTRICT, IN ITS SOLE'DISCRETION, SHALL SEE FiT 70 I~POSE.I ~. .,ANYTHING IN THIS LEASE TO THE CONTRARY NOTWITHSTANDING~ ANY DEFAULT OR BREACH OF THIS ARTICLE SHALL BE CURED, IF ENCUMBRANCE r"]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 INTENTIGN TO TERMINATE BY DISTRICT, AS PROVIDED IN ARTICLE XCIII, DEFAULT OR BREACH, AND EACH AND EVERY CONDITION OF ETS RIGHT TO FORECLOSE OF ITS SECURITY INTEREST OCCURS. ARTICLE XVIII .- DEFAULT OF BREACH A. LESSEE SHALL NOT BE CONSIDERED IN DEFAULT OR BREACH'AS TO ANY PROV'ISiON 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. I.~'LESSEE SHALL DEFAULT OR BREACH ANY COVENANT OR CONDITIONS TO BE KEPT, OBSERVED, OR PERFORMED BY LESSEE~ DISTRICT SHALL GIVE WRITTEN NOTICE'OF DEFAULT DR BREACH ~0 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 COMMENCE AND.DILIGENTLY PURSUE THE PERFORMANCE OF THE THING OR WORK ,QU!RED TO BE DONE TO CURE, REMEDY, AND CORRECT SAID DEFAULT OR [EA~H. SHOULD LESSEE FAIL TO SO CURE: REMEDY~ AND CORRECT SAID JFAULT 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 ENCUMBRANCE HOLDER AS- SET.FORTH IN THIS ARTICLE AND IN ARTICLE XVI - ASSIGNMENT, 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 OCCURRED AND HAS NOT 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 ~ERMINATION, LESSEE'S RIGHT TO POSSESSION OF THE PREMISES SHALL TERMINATE AND LESSEE SHALL SURRENDER POSSESSION ~HEREOF IMMEDIATELY. IN NO EVENT SHALL DISTRICT TERMINATE THIS LEASE UNTIL AT LEAST NINETY (~O} DAYS FOLLOWING THE RECEIPT OF.THE NOTICE OF DEFAULT OR BREACH BY ENCUMBRANCE HOLDER, E. DISTRICT SHAt3~kNOT EXERCISE ANY REMEDY A,~LILABLE TO IT FOR BREACH OR DEFAULT 'BY L~EE AND SHALL NOT TERMIN~ THIS LEASE DUE TO ANY DEFAULT OR BREACH BY LESSEE. UN~ESS DISTRI.CT SHALL HAYE SENT W~iTTE~ NOT,CE'OF' DEFAULT OR BREACH TO ENCUMBRANCE HOLDER. UPON RECEIPT OF SUCH NOTICE, ENCUMBRANCE HOLDER SHALL HAVE THE RIGHT TO CURE AN~'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 PAYHENT OF RENT, TAXES, INSURANCE PREMIUMS, UTILITY CHARGES~.LIQUIDATED DAMAGES~ OR ANY OTHER SUM OF MONEY WHATSOEVER, SUCH SUM OR SUMS SHALL BE PAID TO DISTRICT, 'OR OTHER PROPER PAYEE, WITHIN TWENTY (~O) DAYS AFTER. SEND.ING 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 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 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 REOUIRED TO BE DONE TO CU. AE, CORRECT AND REMEDY SAID DAFAULT OR BREACH. 'ANY PERIOD HEREIN STATED SHALL BE EXTENDED BY THE TIME IN WHICH ENCUM'BRANCE HOLDER IS PREVENTED FROM SECURING POSSESSION OF THE LEASED PREMISES BY ANY ORDER, JUDGMENT, OR DECREE OF ANY COURT 'OR RE6ULATORY BODY OF COMPETENT JURISDICTION IF POSSESSION OF THE LEASED PREMISES IS NECESSARY TO CURE THE DEFAULT OR BREACH; OR b. WITHIN TWENTY. (ZO) DAYS AFTER SENDING THE NOTICE OF JTENTiON 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 THE 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 MONZES TO BE PAID TO DISTRICT BY LESSEE UNDER THIS LEASE ~NTIL 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 ~REACH, OR COMMENCES AND DILIGENTLY PURSUES THE PERFORMANCE OF THE THING OR WORK REQUIRED TO.BE DONE TO CURE, CORRECT, AND REMEDY SAID DEFAULT OR BREACH. ANY PERIOD HEREIN STATED SHALL BE EXTENDED BY THE TINE IN WHICH SUCH TRANSFERREE OR PURCHASER IS PREVENTED BY ANY ORDER, ,--"JDG~ENT OR DECREE'OF ANY COURT OR REGULATORY BODY OF ~OMPETENT JRISDICTION FROM COMMENCING FORECLOSURE BY JUDICIAL ACTION OR TRUST EEO SALE, OR FROM SECURING POSSESSION OF THE LEASED PREMISES IF -Z6- PC~SESSION OF' THE l, ~.RE ACH. PREMISES IS NECESSARY T~UE~ THE DEFAULT OR " c. .ANY DEFAULT OR BREACH WHICH ARISES BY OPERATION OF ARTICLE ~VI - 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 ~ 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) WITHIN 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 LEA~E 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 XIX .- CLAIMS AND PROTEST " DURING REASONABLE HOURS, DISTRICT, ITS AGENTS OR EMPLOYEES, 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 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 CLEARLY AND IN DETAIL ITS OBJECTIONS AND REASONS. IF LESSEE DOES NOT FILE SUCH PROTEST WIYHIN 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 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 SPALL BE hELMED A REJECTION OF THE PROTEST AND RATIFICATION OF DISTR~CTS INITIAL DECISION. ARTIGL~ XX1 5 REENTRY BY DISTRICT WITHOUT TERMINATION r"- A. ~E~!~-' 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 1N DEFAULT OR BREACH, DISTRICT MAY SEND A NOTICE OF REENTRY. THE EXERCISE OF SUCH RIGHT.TO SEND NOfICE 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. B[LETTi~§. sHOULD DISTRICT ELECT TO REENTER, AS.HEREIN PROVIDED, OR SHOULD IT TAKE POSSESSION PURSUAN~ TO LEGAL PROCEEDINGS OR PURSUANT TO ANY NOTICE PROVIDED BY LAW~ OR SHOULD IT'TAKE POSSESSION UPON ABANDONMENT OF,THE LEASED PREMISES BY LESSEEs'DISTRICT ?J~.Y EITHER TERMINATE THIS LEASE AS IN.THIS LEASE PROVIDED, OR DISTRICT. i ~Y,' 'WITHOUT TERMINATING THIS LEASE, FROM TIME TO TIME, RELET THE i E'ASED PREMISES OR ANY PART THEREOF FOR SUCH TERMS (WHICH NAY EXTEND 'BEYOND THE TERM' OF THIS LEASE) AND AT SUCH RENTAL OR RENTALS AND ON SUCH OTHER TERMS AND CONDITIONS AS DISTRICT IN ITS SOLE DISC'RETION 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 H~LDER, C. RENTALS. -SHOULD DISTRICT UPON LESSEE'S DEFAULT ORiBREACH 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 ~REACH OR UPON LESSEE°S ABANDONMENT, AND LESSEE SHALL NOT HAVE ANY RIGHT TO SUCH SUMS DURING THAT PERIOD. DISTRICT MAY COLLECT THE SUMS AND MAY ALSO BRING ACTICH FOR THE RECOVERY OF SUMS DIRECTLY FROM SUCH OBLIGORS. DISTRICT SHALL RECEIVE AND COLLECT SUCH SUMS (SUBRENTS AND OTHER SUMS FALLING DUE FROM SUBTENANTS), APPLYING THEM-EXCEPT AS OTHERWISE ORDERED BY A ~-~3URT OR OTHER REGULATING BODY HAVING JURISDiCTIO~ OVER THE SUBJECT ~TTER: 1. FIR~T~ 'HE PAYMENT OF ANY INDEB NESS OTHER THAN RENT DUE,HEREUNDER FROM LESSEE TO ~ISTR~CT. ~ Z. SECOND, TO THE PAYMENT OF ANY COSTS AND EXPENSES OF SUCH RE~ETTI~ AND ANY.ALTERATIONS OR REPAIRS REQUIRED THEREFOR. 3. THIRD~ TO THE PAYMENT OF 'RENT DUE'AND UNPAID BY LESSEE EREUNDER. 4. FOURTH, TO ANY DELINQUENT PAYMENTS DUE UNDER THE LOAN AND UNPAID 'BY LESSEE TO ENCUMBRANCE 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 APPLIED IN PAYMENT OF FUTURE PAYMENTS DUE UNDER THE LOAN TO ENCUMBRANCE HOLDER A'S 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 MAY PROCEED TO COLLECT'EITHER THE. ASSIGNED SUMS OF LESSEE'S ~ALANCES ~ BOTH, OR ANY INSTALLMENT OR INSTALLMENTS OF THEM, EITHER BEFORE OR =TER EXPIRATION OF THE TERM OF THIS LEASE, BUT THE PERIOD OF IMITATIPNS SHALL NOT BEGIN 'TO' RUN ON LESSEE'S PAYMENTS 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, IF ANY, INCURRED BY DISTRICT IN SUCH RELETTiNG. D. CONTINUING ELECTION TO TERMINAT[~ NO SUCH REENTRY OR TAKING POSSESSION OF THE LEASED PREMISES BY DISTRICT SHALL BE CGNSTRUED 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 TERI~INATION THEREOF BE DECREED BY A COURT OF COMPETENT JURISDICTION. NOTWITHSTANDING ANY SUCH REENTRY WITHOUT TERMINATION, DISTRICT MAY, AT ANY TIME THEREAFTER, ELECT TO TERMINATE ~HIS LEASE FOR ANY SUCH PREVIOUS DEFAULT, BREACH, OR ABANDONMENT BY LESSEE BY SENDING ITS NOTICE OF INTENTION TO TERMINATE~TO LESSEE AND ; -3 ENCUMBRANCE HOLDER. ANY TERMINATION OF THIS LEASE ~S HEREIN- ~OVI~ED SHALL NOT RELIEVE LESSEE FROM THE PAYMENT OF ANY SUM OR SUMS ~AT SHALL THEN BE DUE 'AND PAYABLE TO DISTRICT HEREUNDER, OR ANY CLAIM ANY SUCH TERMINATION NOT PREVENT DISTRICT ENFORCING PAYMENT OF ANY S~CH SUM OR'SUMS OR CLAIM. F~R DAMAGES/BY REMEDY PROVIDED FOR By,LAW, ,OR'FROM RECOVERING DAMAGES FROM LESSEE FOR ANY DEFAULT OR BREACH THEREUNDER. .. r-- E. CUMUlaTIVE RIGHT~. 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 'IN THIS ARTICLE OTHERWISE 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 D~STRICT 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 E~TOPPED TO ASSERT SUCH RIGHT OR RIGHTS AS ANY REASONABLE TIME.AFTER DISTRICT HAS KNOWLEDGE OF A' BREACH OR DEFAULT. B. '~O 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,.E~TOPPEL OR OTHERWISE, THE SUBSEQUENT ACCEPTANCE OF RENT PURSUANT TO THIS LEASE SHALL NOT ~3NSTITUTE A WAIVER OF ANY PRECEDING DEFAULT BY LESSEE OTHER THAN.A ~ SFAULT IN THE PAYMENT OF THE PARTICULAR RENTAL PAYMENT SO ACCEPTED~ I i~GARDLESS OF DISTRICT'S KNOWLEDGE OF THE PRECEDING BREACH AT THE TI~E 'O~ ACCEPTING THE RENT, NOR SHALL ACCEPTANCE OF RENT OR ANY OTHER ' 'PAYMENT AFTER. TERMINATION OF THiS LEASE CONSTITUTE k REINSTATEMENTs. 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 I~PROVEMENTS, INSTALLATIONS, AND'FACILITIES ON THE LEASED PREMISEs, INCLUDING LANDSCAPE IMPROVEMENTS, PARKING LO~S AND PAINTING OF EOUIPMENT 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 CLAII4ING JURISDICTION{ Z. ALL THEIR RESPECTIVE DEPARTMENTS~ BUREAUS AND OFFICIALS~ 3. ,.THE INSURANCE UNDERWRITING BOARD OR INSURANCE INSPECTION -30- BUREAU HAVING'OR C~AI JURISDICTION). ~ 4~ ALL INSURANCE COMPANIES'INSURING ALL OR ANY PART OF THE LEASEHOLD 'PREMISES OR IMPROVEMENTS, INSTALLATIONS, OR FACILITIES. LESSEE ~HALL, HOWEVER, HAVE THE RIGHT TO CONTEST THE ABOVE ORDERS IN ,,-Y-HE MANNER AND TIME PRESCRIBED BY THE ENTITY ISSUING THE ORDER. 'SSEE SHALL PROMPTLY AND DILIGENTLY REPAIR, RESTORE, AND .REPLACE AS 'R~QURIED 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 BE FUNDED BY INSURANCE PROCEEDS.AS THE RESULT OF AN ACCEPTED CLAIM~ LESSEE SHALL SUBMIT A SCHEDULE TO DISTRICT SHOWING THE DATE FUNDS ARE ANTIC'!PATED AND THE DATE WORK WILL BE COMPLETED. THE COMPLETED WORK OF MAINTENANCE, COMPLIANCE, REPAIR, RESTORATION~ OR REPLACEMENT SHALE 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: · · ~. ."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 ,~WS IN EFFECT AT TH.E TIME THE WORK IS COMMENCED OR ANY DEMOLITION OR IY REMOVAL OF EXISTING' IMPROVEMENTS OR PARTS OF IMPROVEMENTS AS HELL ; FOR PREPARATION, CONSTRUC.TION~ AND COMPLETION OF ALL NEW 'IDPROVEMENTS OR PARTS OF. IMPROVEMENTS, ' ' Z. '"VALUE OF'IMPROVEMENTS" IS THE LATEST AVAILABLE APPRAISAL OF "FULL INSURABLE VALUE" OF THE IMPROVEMENTS AS DEFINED AND ~ETERMINED 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 (25~) 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 DISTRIG[. FOR ALL REPAIRS, LESSEE SHALL COMPLY WITH EACH AND EVERY CONDITION FOR CONSTRUCTION PROVIDED FOR IN THIS LEASE~ HOWEVER, FOR ANY REPAIRS TO THE INTERIOR OF STRUCTURES, AND FOR M'INOR REPAIRS FOR WHICH THE CONSTRUCTION COST DOES NOT EXCEED TDENTY THOUSAND DOLLARS ¢$Z0,000.00}, IN 1~85, INCREASED YEARLY BY THE CONSUMER PRICE INDEX FOR THE METROPOLITAN SAN FRANCISCO BAY AREA. DISTRICT MAY RELEASE'FROM ANY SUCH CONDITION ONLY UPON PRIOR ~RITTEN ,-'="EQUEST FOR RELEASE FROM CONSTRUCTION CONDITIONS .SETTING FORTH EACH -31- ANV EVERY CONDITiO~ FI WHICH LESSEE SEEKS RELE0. D. ~'FAILURE BY LESSEE. IF, AT ANY TIME'DURING THE TERM OF ·THIS LEASE~LE~[[ FAILS TO MAKE NECESSARY REPAIRS OR TO MAINTAIN THE LEASED PREMISES, AFTER RECEIVING A WRITTEN DEMAND UNDER THE PROVISIONS ~-= ARTICLE 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 TOTAL OF SUCH AMOUNT SHALL' BE PAID WITHIN THIRTY (30) DAYS FROM DEMAND. ARTICLE XXIII' - RIGHT OF ENTRY BY ~UBLIC 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 [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 I~PROVEMENTS 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 UNREASONABLY INTERFERE' WITH THE LESSEE'S USE OF THE LEASED PREMISES. ARTICLE XXIV - .~[~TRUCTION A. IF A TOTAL DESTRUCTION (THE RENDERING TO~ALLY UNUSABLE OF FIFTY PERCENT (5OX), OR MORE OF LESSEE'S IMPROVEMENTS ON THE LEASED PREHISES) 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 XXII - MAINTENANCE AND REPAIR; 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 DISTRICT SENDING ,,~ITTEN NOTICE OF CANCELLATION WITHIN THRITY (30) DAYS OF SUCH ~ESTRUCTIpN. ~. DURING A PARTIAL DESTRUCTION OR TOTAL DESTRUCTION, ONLY AS TO THAT 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 ~HE MINIMUM ANNUAL RENT BE LESS THAN ONE-HALF OF THE AMOUNT OF THE THEN CURRENT MINiMOM ANNUAL RENT.. .THERE SHALL BE NO PRORATION OF PERCENTAGES OF'GROSS RECEIPTS IF THERE IS EITHER A PARTIAL DESTRUCTIO. OR TO~L ~E~TRUCTION. -- C. IF ANY OF THE LESSEE-OWNED IMPROVEMENTS ARE DAMAGED OR [STROYED 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 FINANCINg, 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-BEMOVAL OF IMPROVEMENTS-AND OWNERSHIp UPON TERMINATION A. ALL IMPROVEMENTS CONSTRUCTED ON THE LEASED PREMISES BY LESSEE 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' OR CANCELLATION OF THE LEASE~ LESSEE SHALL, WITHIN SIXTY (60) DAYS, AT ITS OWN EXPENSE, REMOVE ALL -~3VABLE IMPROVEMENTS AND INSTALLATIONS OF ANY KIND OWNED OR PLACED ON iE LEASED PREMISES BY LESSEE, AND SHALL LEAVE THE LEASED PREMISES IN JBSTANTIALLY THE SAME CONDITION AS WHEN FIRST OCCUPIED BY LESSEE. 'MOVABLE iMFROVEMENTS 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. I'F 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, IMPROVEMENTS AND FACILITIES' CONSTRUCTED OR PLACED WITHIN THE LEASED PREMISES BY LESSEE, 'WHICH ARE ATTACHED OR FA~'¥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. ~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. MAY REMOVE OR CAUSE TO BE REMOVED OR SOLD OR DESTROYED, THE MOVABLE IMPROVEMENTS AND "','STALLATIONS ON THE LEASED PREMISES, AND LESSEE SHALL~PAY TO DISTRICT . tE REASONABbE AND ACTUAL COST OF ANY SUCH REMOVAL, SALE OR DESTRUCTION, IN E)~'CES~F ANY CONSIDERATION RESULT OF SAID SALE~ REMOVAL OR ART~I6't.E'~X~VI -CONDENNATION . BY DISTRICT AS A '--' A. UPON RECEIPT OF ANY NOTICE. THAT CONDEMNATION PROCEEDINGS ARE O BE INSTITUTED OR UPON SERVICE OF 'PROCESS IN ANY CONDEMNATION ROCEEDING, LESSEE AND LENDER SHALL BE IMMEDIATELY'NOTiFIED 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 O~'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 DISTRICT'S WRITTEN CONSENT. BONUS VALUE IS DEFINED AS THE EXCESS OF r-'AIR RENTAL VALUE OVER CONTRACT RENT. ~., Z, 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. LES. SEE 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 WRITTEN CONSENT; THEN IF THE REMAINDER'S FAIR RENTAL VALUE RILL BE LESS 'THAN THE RENT REQUIRES 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 P~SSESSION, WITH RESULTING ADJUSTMENT OF THE SECURITY DEPOSIT. C. LESSEE MUST GIVE NOTICE TO LESSOR OF ANY OF THE ABOVE ELEC'FION~ WITHIN FORTY-FIVE (45) DAYS AFTER OBTAINING KNOWLEDGE OF THE i~PENDING ACQUISITION. 1. LESSEE WILL BE DEEMED-TO HAVE KNOWLEDGE QF THE IMPENDING ?-CQUISITION qN HIS ENTRY INTO NEGOTIATIONS WITH THE CONDEMNING ~ ~- S REPRESENTATIVES, ON RECEIPT OF SERVICE OF. COMPLAINT AND ~. JMMONS, OR ORDER FOR IMMEDIATE'POSSESSION, OR ON RECEIPT OF A LETTER OF INQUIRY FROM THE DISTRICT ADVISING LESSEE OF THE IMPENDING ACQUISITION AND R~0UE~'~NG NOTICE OF LESSEE'S NG ELECTIONS AND CONTENTIONS. 'LENDER AND LESSEE HA~E TH~ RIGHT TO PARTICIPATE IN ANY AND-AL~.~ A~PECTS OF THE CONDEMNATION PROCEEDINGS. ~' Z. LESSEE'S NOTICE SHALL 'CONTAIN A.CLEAR AND UNEQUIVOCAL r' ~ATEMENT OF HIS ELECTION UNDER SUBPARAGRAPH. B ABOYE, REASONS FOR THIS _ECTION, LESSEE'S CONTENTION OF COMPENSATION, AND/OR THE RENAINDER'S ~kIR 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'RE^SONS IS SO THE' DISTRICT MAY RELY ON.'THEM IN NEGOT~IATIONS 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 - CAPTIONS. THE TITLE OF HEADINGS OF THE ARTICLES' AND SUBARTICLES OF THI~ LEASE F E NOT A PART OF THIS LEASE AND SHALL HAVE NO EFFECT UPON THE NSTRUCTION OR INTERPRETATION OF ANY PART THEREOF. ARTICLE XXVIII .- SAVINGS CLAUSE. IIF 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 - ~[~!~TION OF LEASEHOLD. ' 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 WHICH ARE SET' OUT IN THE HARBORS AND NAVIGATION CODE OF THE STATE OF CALIFORNIA. ~0TH!NG 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 POWER TO CONVEY. ARTICLE X'XX - E_OB_CE MAJEURE 1F EITHER PARTY HERETO· SHALL BE DELAYED OR PREVENTED FROM THE PERFORMANCE OF ANY ACT REQUIRED HEREUNDER BY REASON OF~,ACTS OF' GOD, ~:TR'ICTIVE 6. OVERNMENTAL LAI~S OR REGULATIONS, OR OTHER'"CAUSE NITHOUT AULT AND BEYOND THE CONTROL OF THE PARTY OBLIGATED, FINANCIAL ! ,..,~{AE:ILITY EXCEPTED~ PERFORMANCE OF SUCH ACTS SHALL BE EXCUSED FOR THE PERIOD OF THE DELAY~ AND THE PERIOD FOR THE PERFORMANCE OF ANY SUCH F%I~ ACTS SHALL BE EXTE'ND R A PERIOD EQUIVALENT HE PERIOD OF SUCH DELAY. N~THING IN'THIS CLAUSE,' HOICEVER~ SHAE'L EXCUSE LESSEE FROM THE' PROHPT,PAYMENT 'OF ANY RENTAL OR OTHER CHARGE REQUIRED BY LESSEE, EX[:EF'~ A~'"MAY BE EXPRESSLY PROVIDED ELSEWHERE IN THIS ARTICLE. ~RTICLE XXXI - HOLDIN~ OVER. ~ THE EVENT LESSEE SHALL HOLD OVER AFTER THE TERM HEREIN 'GRANTED'WITH 'iHE CONSENT OF THE DISTRICT, SUCH HOLDING OVER SHALL BE A TENANCY FROM MONTH TO MONTH AND SHALL BE GOVERNED BY THE TERMS, CONDITIONS AND COVENANTS CONTAINED IN'THIS LEASE. .. ARTICLE XXXI - 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. 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 THIS'LEASE SETS FORTH ALL THE AGREEMENTS AND UNDERSTANDINGS 'OF THE PARTIES, AND ANY MODIFICATIONS MUST BE IN WRITING. ARTICLE XXXIV - TIME - TIME IS OF THE ESSENCE OF THIS LEASE.' ARTICLE XXXV - UTILITIES MAIN 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 EXTEND ANY MAIN UTILITY LINE CONSTRUCTED BY THE LESSEE'FRO~ THE LEASED PREMISES FOR THE CONVENIENCE OF THE DISTRICT OR OTHER LESSEES OF THE DISTRICT. ARTICLE XXXVI - ANTI-DISCRIMINATION "ANCESTRY, SEX,. OR SEXUAL PREFERENCE. LESSEE AND/OR ITS sUBTENANTS SHALL NOT DISCRIMINATE AGAINST ANY MEMBER n~ THE PUBLIC UTILIZING LESSEES (OR SUBTENTANTS) SERVICES OR ~CILITIES, OR AGAINST ANY EMPLOYEE OR APPLICANT FOR EMPLOYMENT, {CAUSE OF AGE, RACE, RELIGION, COLOR, CREED, NATIONAL ORIGIN, -36- THE. LESSEE SHALL TAKE AFFIRMATIVE ACTION~ ~NSURE THAT. APPLICANT~ AR~EMPLOYED AND THAT E~PLOYEE~ ARE 'TREATED, DURING EMPLOYMENt, WITHOUT REGARD TO THEIR AGE, RACE~EL!~}ON, COLOR, CREED~ NATIONAL ORIGIN, ANCESTRY, SEX OR SEXUAL P~EFi~E~:E~ WITH THE GOAL THAT THE ETHNIC COMPOSITION OF THE POP~LATION OF THE DISTRICT. SUCH ACTION SHALL INCLUDE~ BUT NOT ;MITED TO, EMPLOYMENT~ UPGRADING, DEMOTION OR TRANFER, RECRUITMENT, ~YOFF OR TERMINATION, 'RATE OF PAY OR OTHER FORMS OF COMPENSATION AND ._£LECTION FOR TRAINING. LESSEE SHALL COMPLY WITH THE EQU%L OPPORTUNITY REQUIREMENTS OF EXECUTIVE ORDER 11246, TITLE VII, OF THE CiViL RIGHTS ACT OF 19&4, THE CALIFORNIA FAIR EMPLOYMENT PRACTICE ACT, AND OTHER FEDERAL, STATE~, MUNICIPAL OR DISTRICT LAWS OR'ORDINANCES RELATING TO EQUAL EMPLOYMENT OPPORyUNI~Y.' LESSEE AGREES TO SUBMIT ANY CERTIFICATE OF COMPLIANCE WITH SAI'D STATUTORY PROVISIONS U~ON ~EMAND 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 PQR CONSTRUCTION BY LESSEES OF THE SAN MATEO COUNTY HARBOR- DISTRICT l'g80"(EXHIBIT B), WHICH HAS HERETOFORE BEEN INCORPORATED AND MADE A PART OF THIS LEASE,. SHALL BE APPLICABLE TO THE TERMS'AND PROVISIONS HEREOF~ ARTICLE XXXVIII - pISPUTES. ;Y' AND ALL-~ISPUTES REGARDING THE,TERMS AND CONDITIONS OF THESE LEASE ~CUMENTS OR THE PERFORMANCE OF ANY PARTY TO THIS LEASE, SHALL BE :_.JVERNED 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 ACTION IF LEGAL ACTION IS INSTITUTED TO ENFORCE THIS LEASE OR IS' BASED UPON A~Y CLAIM ARISING OUT OF OR PURSUANT TO THE TERMS OF THIS, THEN THE PREVAILING PARTY IN SAID LITIGATION SHALL BE AWARDED REASONABLE AiTORNEY'S FEES AND COSTS OF SUIT. ARTICLE XXXX - ~OTICES NOTICES R~QUIRED HEREUNDER SHALL BE DEEMED TO HAVE BEEN RECEIVED ~HEN ACKNOWLEDGED TO BE RECEIVED BY RECIPIENT EITHER THROUGH SIGNATURE OR REGISTERED, CERTIFIED, EXPRESS MAIL OR DELIVERY SERVICE OR WHEN PERSONALLY DELIVERED TO A REPRESENTATIVE OF THE PARTY.~ LEASE PARCEL B THIS LEASE is made and. entered into. 'by and between the S~N MATEO COUNTY HARBOR DISTRICT, a po'lit- ica! subdivision of the State of California, hereinafter called "Lessor" o~ "District," and OYSTER POINT VILLAGE · L~ITED, a California.limited partnership, hereinafter called "Lesse. e." The parties, agree that~ ARTICLE I - LEASE DOCUMENTS. This 'lease includes these specific provisions together with the attached General Conditions a~d ~he following documents, which are also attached hereto and all are made a ;part hereof: ~ · .. A. Exhibit A: Legal description and drawing of Parcel B (also known'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 Ma.teo County Harbor District - 1980." C. The booklet entitled "Oyster Point Marina Specifi'c Plan" dated September, 1983, as approved by the City of South San Francisco on September. 7, 1983, Resolution 124-83. ARTICLE II - PROPERTY LEASED. District hereby leases to Lesse'e and Lessee hereby rents f=om District ,the property located in the City of South San Francisco, CountY of San Mateo, 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 of land. ARTICLE III - ?EP,~. .The term of. this lease shall be twenty-five '(25) yea.rs,- c_omme~n_c!.ng .on t~..first '- ' . ' . ~c~,~: ~ ~_'"~~.. _ 'day of the calendar mont~followzn~/the day of execu~lon of this Lease by District. However, Lessee has the bption 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. With respect to ~arcel. B, im conjunction with the lease on Parcel D, but not conditioned upon said other lease, lessee shall develop, construct, and operate (or cause to. be con- strutted and/or operated) a commercial, 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 5eing suitable for, and offered for, boat sales (brokerage), speciality shops, and If a substantial portion of Parcel 2 other retail uses. B is no[ used for ~oat sales and speciality shops/retail, said uses shall - be required for Parcel D. Uses 'of this Par'cel may include any use, or combination of uses, specifically allowed for this .area by the terms of the 0yste~ Point Marina Specific Plan, attached hereto as Exhibit. C~ and Lessee shall endeavor to include retail uses (including a chandlery) and banking facilities for the use of the "boaters and the general public alike. 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, and/or bait and tackle shop. A. Lessee Shall provide on the leased premises all equipment .required for the operation of said facilities. 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 in Article IV - USES AND SERVICES herein, shall be provided with full services on leased premises durihg regular busimess hours not less t~an ~ix (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 all goods or services or combinations thereof supplied to the public on or from. the leas6d premises, whethe~ the 'same are supplied by Lessee or by its sublessees, assignees, concessionaires,, permittees, or licensees, and shall make said schedule available to District. All rates and .charges 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 he no more than rates and Charges for c6mpa-- table services and facilities in Northern California. · Pursuant to the provisions of Section ?2.2 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, in the manner and in the time approved by the District during' the 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 installation. B. In addition to maintenance and repairs required pursuant to. General Conditions of thi~ Lease,. the Lessee shall maintain the' premises 'in accordance · with standards imposed by the State of California Regional Water Control Board· 'C. All design and construction shall conform ~ith the requirements as set forth in the Design Cri- teria booklet adopted by District, attached hereto as Exhibit B, and all applicable~ codes-and ordinances including, but not limited to, District, City, County, State. and Federal. Construction shall be commenced 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 writing by Distric~ during the option period pre- ceding execution of this Lease~ or as amended there- after. The construction schedule shall follow the re- quirements of the Design Criteria, Exhibit B. Con- 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). ARTICLE VII - LEASE RENTS AND GROSS RECEIPTS. % Lessee shall p~y to District the minimum rents or the 5 ~.t iD f=;~L.."7 ?jC~: -. ..... ..'. · ~' ~ereemtage rental as set f~rth'heretn and in Article V of the General Conditions of this Lease,. whichever is greater. A. Minimum Annual Rent. For the first 'five (5) years' of the lease term, the minimum annual rent shall be in accordance'with the following schedule: Year · Rent 1 $ 5,175.00 2 $10,350.00 3 $20,700.00 4 $20,700.00 5 $20,700.00 After the fifth (hth) year 'of- the lease term, the mfntmumannual rent shall be adjusted in accordance ~ith the provisions of Article V of the General Condition~ of this. Lease. B. percentage Rent. 1. In addition to the minimum annual rent, Lessee shall pay the amount by which the total of the percentage of 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 with food sales or percentaKe 3Z 6 through a package liquor store). Sale of alcoholic beverages (as separate bar). .Boat sales. Rental of meeting rooms. Chandlery. Ail other sales. Rental for subleased office space not involving retail sales. 2. Gross receipts derived, received, or charged By tenant, concessionaire, licensee., 3~ 5Z 5% through end of 9th year. 8% through end of 25th year 10% thereafter are the gross income any- sublessee, sub- or any other person, firm or corporation (herein called "subtenant"), ok By Lessee, for sales, charges for service, for the use of spaqe made in or on the leased premises, or fro~ 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 charges on credit, whether or not payment is actually made. Gross limitation, all: leased premises. receipts shall ~nclude, without a. Deposits not ~efunded; b. Orders taken on Sr from 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 long distance c~unication and whether initiated, performed~- .or completed at another location; d. Considerations received by · Lessee for value directly from customers, and from subtenants, including 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 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: a. Gratuities such as "tips" retained by employees of Lessee or subtenant for their personal benefit; b. Ail sums collected and paid out for 'sales taxes, luxury taxes, excise taxes, and similar taxes required by law to be added to the total purchase price~ whether now or hereafter in force, to be col- lected from customers and paid by Lessee or subtenant; 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 cons~,mmating a sale previously made 'at, on, or from the leased premises or for the purpose of depriving District from the percentage of Gross Receipts of a sale that otherwise would be made a~, on, or from the leased premises; d. Merchandise returned to ship- pers Or manufacturers; charge for service or use Of space previously ~ncluded as Gross Receipts; f~ All cash or credit received in. settlement of amy claims for loss or damage~ g. Gift certificates or like vouchers, if not issued for value, until the time they have been converted into a same 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;. t. Any income or receipts, under generally accepted accounting principles, which are Ail refunds made on any sale or derived from the sale or disposal o2 any capital assets (excluding any assets normally sold in the course of business conducted on the leased premises) or from 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~ ]. Percentage rent collected by 'Lessee from subtenants for District's benefit. None of the above exclusions or deductions ~rom Gross Receipts shall be excluded or deducte~ if in. substance it ts 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 om other premises such as typical sale, charge for service, or ot~er source of gross income which is ordinarily 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. 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 ~ay of each month of the term °f t~is Lease. 2. Percentage Rents. At the ~nd of each · quarter of the year (t..e., March 31st, 10 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'minimumannual rent for. said quarter and the percentage rent for said quarter shall be due and payable on the fifteenth (15th) day following the end of~' said quarter. gross receipts The percentage rent schedule based upon 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 dredited toward future notices ARTICLE VIII - NOTICES AND PAYMENTS. Ail and con~nunications required under this Lease shall be in %rriting, and all notices and payments shall be made' as follows: A. Ail payments and notices to Lessee shall be given or mailed to: Ms.. Martt Christoffer 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 Distric~ #1 Johnson Pier ~ Half Moon Bay, California 94019 11 · following Article. · C. To Enc~mbrance Holder at: such address and to such person as it shall designate to District in writing. D. Any. party may designate a different address by giving notice as 'set forth in thi~' Artfcie. E. Ail notices and commUnications referredl to herein shall be deemed give~ on the fifth (Sth) day mailing if given in accordance with this period of twenty-five (25) years date ~f the original term, upon 'conditions as set forth herein. F. If. Lessee is not a resident of the County of San Hateo or is an association or partnership without' a member or partner resident of said County, or is a foreign corporation, Lessee shaI1 file with Distric~ ~ designation Of natural person residing in the CoUnty of San Hateo, 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 servic~ upon Lessee. ARTICLE IX - OPTION TO RENEW. District grants Lessee the option to renew this lease for a further from the expiration the 'same terms and Said optio~ to renew this Lease shall be exercised tn wrtting and provided to the District at any time b'etwe~en 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 received-by the District. The parties recognize and acknowledge that th& 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 kate until modified or terminated by an agreement in w~iting 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 doc,,ment may result in a finding or determination that the District, as Lessor, cannot enter into a lease for the Oyster Point Marina/Park premises for a term-which exceeds the termination of the Joint Rowers 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), and the City of South San Francisco has refused to give their approval of the te~ms of this % Therefore,. if it is required for years (including 13 lease, the 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 Distric~ is subject to the final approval by the California'.Depart- ment of Boating and Waterways ("Cai-Boating"), and ~wa.r6 of this Lease by District shall.become f~naI only after · award has been approved by said Department. If the Lease is mot so approved by Cal-Boatimg, through no fault of the Lessee, the option purchase price shall be r~funded in full to Lessee. LESSEE OYSTER POINT VILLAGE LIMITED Oyster Point Village Associates, Ina,, General Partner (Corporate Resolution Attached) DISTRICT SAN MATEO COUNTY HARBOR DISTRICT Dated: of Ronald D. McClellan · General Manager The foregoing Lease is approved this · 1984. STATE OF CALIFORNIA day DEPARTMENT OF BOATING AND WATERWAYS "' STATE OF CALIFORNIA % '~ .- COUNTY OF SAN MATEO v/Z[~> , bezore me ~//~/7/~.~ /4-/ Notary P,blic. personally appeared' ~/~ .... , ~no~ to me to be .the ' trlCt ~ a poetical subdivisfo~ of the State of Califo~la, and kno~ to me to be the person who cured the w~thim inst~ent ~n behalf of the said political subdivision, and acknowledged to me that such political subdivisio~ executed the same. STATE OF CALIFORNIA ) COUNTY OF SAN MATEO ) merit, the ~erson ~o executed the within instrument On behalf of the ~~ ~~~~xecuted the s~e. ' SE~' 15 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 Walters, 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 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 'ith the Harbor District of San Marco County. ' To have $30,380 disbursed from Oyster Point Village, Ltd: funds and $4,120 from Oyster Point Village Associates, Inca 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 behalf of Oyster Point Village.Associates, Inc.. Dated: January 2, 1985 . Marti Christoffer / F Richard Bertol~na ~, , p '.' ~ %" ,. . . . · ,,,,~ '.., ...... ,,. . Oyster Point Village ~s~es, Inco~r~ 1670 Pine Sff~t, ~n Francisco, California 941~ [415) 673-~6 ~ ~ 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 an~ all of the following: For the period from DeCember 21, 1984, through January 10, 1985, to exercise all voting rights kelating to his 1,000 shares of Oyster Point Village Associates, Inc., 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. 2. Carrying out 6ther 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 Mateo 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 t~ 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. ', - Legal Description ' · SOUTH SAN FRANCISCO, CALIFORNIA .. ' -. ' Sc:al.: I": I00': Re~ LD3 410-2610 LEGAL DESCRIPTION ~cL THAT CERTAIN REAL PROPERTY SITUATE IN THE CITY OF SOUTH SAN FRANCISCO, COUNTY OF SAN MATEO, STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBEDAS FOLLOWS: COMMENCING AT'A POINT UHICH BEARS SOUTH 3° 34' 26" EAST 300.33 FEET' FROM THE INTERSECTION OF THE UESTERLY LINE OF OYSTER POINT BLVD. UITH THE SOUTHERLY LINE OF PARCEL ONE AS SHOWN'ON THAT CERTAIN MAP ENTITLED "PARCEL MAP OF OYSTER POINT BUSINESS PARK", AS FILED IN VOLUME 52 OF PARCEL MAPS AT PAGE 59, SAN MATEO COUNTY RECORDS; THENCE ALONG A CURVE TO THE LEFT UITH A RADIUS POINT'UHICH BEARS SOUTH 3° 29' 00" EAST 20 FEET THROUGH A CENTRAL ANGLE OF 63° 32' 31", FOR AN ARC LENGTH OF 22.18 FEET: THENCE ALONG A TANGENT REVERSE CURVE TO THE RIGHT WITH A RADIUS OF 250 FEET, THROUGH A CENTRAL ANGLE OF 17° 53' 51", FOR AN ARC LENGTH OF'T&o09 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° 00' 31" EAST 151.9~ FEET; THENCE SOUTH 03' 59' 29" EAST 144.00 FEET; THENCE SOUTH 41° 00''31" UEST 82.07 FEET~ THENCE SOUTH 48° 59' 29" EAST FEET; THENCE SOUTH 41° 00' 31" WEST 132.00 FEET; THENCE NORTH 48° 59' 29" WEST 50.00 FEET: THENCE SOUTH 55'. 39' 25" UEST 82.61FEETt THENCE 2,00 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE RIGHT, J~[ CHORD OF WHICH BEARS NORTH 32' 12' 14" UEST, UiTH A RADIUS OF 80.00 FEET AND SUBTENDINg A CENTRAL ANGLE OF 00' 05' 22", TO A = INT OF TANGENT REVERSING CURVATURE: THENCE 50.2~ FEET A;LONG THE ARC br'A CURVE TO THE LEFT UITH A RADIUS OF 39~.,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 ALON~ THE ARC OF A NON-TANGENT CURVE TO THE LEFT UITH A RADIUS OF 409,29 FEET AND SUBTENDING A CENTRAL ANGLE OF 07° 41' 58", THE CHORD OF UHICH BEARS NORTH 43° 28' 19" BEST~ 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. ADJUSTMENT AHENDMENTS .O GENERAL CONDi'TIONS. ~ARCELSI ~[~ -~ D ALPHABETICAL INDEX OF RENT (ARTICLE V) - - CLE XX~III) ' ' (ARTI ........ ~ ............................. ANTi-DiSCRIMINATION (ARTICLE XXXVI) .............................. ASSIGNMENT, SUBLETTING. & HYPOTHECATION (ARTICLE XVI) CAPTIONS (ARTICLE XXVII) m '35 '. CLAIMS AND PROTEST (ARTICLE XIX) COMPLIANCE WITH LAWS AND REGULATIONS (ARTICLE XIII) ........ CONDEMNAT~DN'(ARTICLE XXVI) .'34 CONSTRUCTION (ARTICLE IV) - ' · DECLARATION OF KNOWLEDGE BY LESSEE (ARTICLE II) ................... ._..DEFAULT OR BREACH (ARTICLE XVIII).. .......................... , .... )EFINiTIONS (ARTICLE XXXVII) ...................................... DESTRUCTION (ARTICLE XXIV) ' DISTRICT'S RIGHT TO RE-ENTER (ARTICLE XXXII) ..................... FEE FOR FAILURE TO PAY WHEN DUE (ARTICLE VI) ........ FINANCIAL REPORTS AND RECORDS (ARTICLE XV) ....................... FORCE MAJEURE (ARTICLE HOLD HARMLESS (ARTICLE XXX) · 36 XIV) ' t? HOLDING OVER (ARTICLE XXXI) ...................................... 35 INSUPANC: (ARTICLE VIII) ' ~ LIMITATION OF LEASEHOLD (ARTICLE XXIX) ........................... 3~ LI'~DATED DAMAGES (ARTICLE ×I) .................................. ~ __~AINTENANCE AND REPAIR (ARTICLE XXII) ....... · .......... ~ .......... 30 NOT[¢"S (ARtiCLE ~XXX) 37 OPERATIONS (ARTICLE OPiNER~HIP OF LEASES r *OS..SESSORY PROTECTION (ARTICLE XVII) ............................... Z4 INTEREST TAXES, TAXES, ASSESSMENTS AND FEES (ARTICLE IX) ........................................... ~3 OF LEASED PREMISES (ARTICLE XII) ...................... 16 RTI ' ' QUIET ENJOYMENT-(A CLE III) ..................................... 3 REENTRY REMOVAL BY DISTRICT WITHOUT TERMINATION (ARTICLE XX)...; ......... 28 OF IMPROVEMENTS AND OWNERSHIP UPON TERMINATION (ARTICLE XXV) ' '" 33 RIGHT OF .ENTRY BY PUBLIC ENTITIES (ARTICLE XXIII) ................ 3Z SAVINGS CLAUSE (ARTICLE XXVIII) .................................. 35 SECURITY ~EPOSIT (ARTICLE VII) ..................................... 8 lIME (ARTICLE XXXIV) ' 36 UTILITIES (ARTICLE XXXV) .......................................... wAIVER AND NON-WAIVER (ARTICLE XXI) ............................... 30 F.-~ARRANTY. 0F TITLE (ART_!CLE LEASE GENERAL CONDIIIONS pARcELS B AND _D_ 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 WAY 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 · ---&ND LIMITATIONS AFFECTING THE CONSTRUCTION OF THE LEASE IMPROVEMENTS ~ND BUSINESS PRACTICES REQUIRED IN THE OPERATION AND MANAGEMENT OF THE ~SES CONTEMPLATED HEREUNDER. ARTICLE III - ~IET 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 THE ~ERMS, 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. LESSEE SHALL SUBMIT AND OBTAIN APPROV~ 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 ALt. APPLICABLE CODES AND ORDINANCES, INCLUDING BUT NOT LIMITED TO DIS[~ICT,' CITY, COUNTY, STATE AND FEDERAL. AFTER APPROVAL OF SCheMATIC PHASE, 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 DI~nlCT. .. -3- C. PERFOB~NCE P~ENT BO_~_~..NO CONST~CTION SHALL BE COMMENCE~,NOR BE DEEMED TO HAVE COMMENCED AT THE LEASED PREMISES UNTIL LESSEE HAS PROVIDED DISTRICT A PERFORMANCE AND PAYMENT BOND 1N THE AMOUNT.~OF THE TOTAL ESTIMATED CONSTRUCTION COSTS OF THE IMPROVEMENTS r-.~O.BE CONSTRUCTED BY LESSEE. SAID BOND SHALL BE IN A FORM ACCEPTABLE TO DISTRICT AND SHALL ;TATE THE FOLLOWING: 1. THAT IT IS CONDITIONED TO SECURE THE ,COMPLETION'OF THE PROPOSED CONSTRUCT'ION,. 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. ~. THAT .IN DEFAULT OF SUCH COMPLETION AND 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 ~ETER~.INE. 4. 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 ~_LIABILITIES OF 'ANY KIND, ARISING 'OUT OF OR CONNECTED WITH THE :ONSTRUCTION. IN LIEU OF A PERFORMANCE AND~ PAYMENT BOND, LESSEE 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 CONSTRUC'TION COST OF THE. IMPROVE~4ENTS. 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 IRPROVEHENTS SH~LL HAVE BEEN INSURED AS PROVIDED BY THIS LEASE. D. CERTIFICATE OF COMPLETION. UPON COMPLETION OF SAID IMPROVEMENTS AND ANY APPROVED MODIFICATION THERETO, SAN MATED COUNTY' HARBOR DISTRICT 'WILL EXECUTE AND DELIVER TO LESSEE A CERTIFICATE OF CO~F'LETION WHICH WILL RECITE THAT DISTRICT HAS INSPECTED AND APPROVED _~L.L iMPROVEMENTS AND THAT THERE EXISTS NO DEFAULT IN T~iS LEASE WITH --'4-- RESPECT TO SAID IMPR MENTS AS OF THE.DATE~OF CERTIFICATE, IF SUCH IS THE FACT. . ,E. ~TATEMENT OF CONSTRUCTION COSTS AND "AS-BUILT" PLANS. ~ITHIN,.,.SIXTY {60) DAYS FOLLOWING COMPLETION OF ANY SUBSTANTIAL ~IMPROVEMENT i~ITHIN THE LEASED PREMISES, LESSEE SHALL FURNISH DISTRICT ~ 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 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 CHANGE~ 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 PREMISES 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 ALLOW THE PROJECT TO MODERNIZE AND REMAIN 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 NON-RESPONSIBILITY" AS THE DISTRI'CT DEEMS APPROPRIATE. H. MECHANICS LIENS.' LESSEE SHALL AT ALL TIMES INDEMNIFY AND ~AVE 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~ 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 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 LEASED PREMISES FROM ~HE CLAIM OF THE LIEN AND FROM ANY ACTION BROUGHT TO FORECLOSE THE LIEN. .. . ABSENT A WRITTEN WAIVER BY THE DISTRICT, SHOULD LESSEE FAIL TO P,~OE'URE AND RECORD SAID BCND WITHIN TEN (10) DAYS AFTER THE FILING OF ANY SUCH LIEN~ THIS LEASE SHALL BE IN DEFAULT. AND SHALL BE SUBJECT TO ]~-;MEDiATE TEF;M, INATION BY DISTRICT, ANYTHING IN THIS LEASE TO THE CONTRARY NOT~I THSTANDI'NG. ~ . .~ '~:~,'~ . ~ -~ ~ ~ -5- ARTICLE V'- ADJUSTMENT OF RENT A. _A_DJUSTMENT OF MINIMUM ANNUAL RENT. AT-THE E:EGINNING OF THE ~-";I>~TH (&TH) YEAR AND OF EACH FIVE-YEAR PERIOD THEREAFTER, THE MINIMUI~ ~NNUAL RENT SHALL BE ADJUSTED FOR THE NEXT ENSUING FIVE-Y.EAR PERIOD TO .iN AMOUNT EQUAL TO SEVENTY-FIVE (75) PERCENT OF THE AVERAGE OF THE TOTAL YEARLY RENT PAID DURING THE PREVIOUS FIVE-YEAR PERIOD;' PROV[DED~ HOWEVER, IN NO EVENT SHALL SUCH ADJUSTED.MINIMUM ..ANNUAL RENT T-:E.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-~ONTH PERIOD, LESSEE SHALL PAY THE' ADDITIONAL AMOUNT, 'IF ANY, BETWEEN THE AMOUNT PAID AS MINIMU~ 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. ADJUSTMENT OF PERCENTAGE RENT 1~ AT ANY TIME NO EARLIER THAN TWO HUNDRED SEVENTY (Z70~ DAYS NOR LATER THAN ONE HUNDRED EIGHTY (IS0) 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 DISTRICT MAY~ ~Y NRITTEN NOTICE. TO'THE OTHER, 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. ~ASIS FOR DETERMINATION OF PERCENTAGE RENT UNTIL THE NEXT PERCENTAGE RENT MODIFICATION REQUEST PERIOD AND COMPLIANCE WITH THE PROVISIONS OF THIS SUB-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 ~ODIFIED AS HEREINAFTER PROVIDED. (b) AT.ANY TIME NO EARLIER THAN THIRTY (30) DAYS NOR LATER THAN SEVEN (7) DAYS PRIOR TO THE TENTH (IOTH) ANNIVERSARY OF THE LEASE TERM., O.R WITHIN SAID TIME LIMITS PR][OR 'I'O-TttE. COMME[~CENENT OF EACH TEN-YEAR PERIOD THEREAF'IER, AS ~PPLICABLE~ LESSEE OR DISTRICT MAY~ BY RiTTE~ NOTICE TO THE OTHER, ELECT TO SUBMIT DETERMINATION OF ' .ERCENTAGE RENTS FOR ARbiTRATION. WITHIN TEN (10) DAYS AFTER SUCH ~OTICE, LESSEE AND DISTRICT SHALL EACH APPOINT AN ARBITRATOR AND ARBITRATOR. BEFOREs~mm~ECTING AN. ARBITRATOR(S), THE LESSEE 'AND DISTRICT ~UST AGREE ON THE QUALIFICATIONS .REQUIRED FOR BOTH ARBITRATORS, IN HRITING.- ARBITRATORS MAY BE REJECTED BY THE OPPOSING BIDE IF,, THE ARBITRATION DOES NOT MEET THE AGREED UPON QUALIFICATIONS. ? "' ¢c) 'IF WITHIN SIXTY ¢60) DAYS. AFTER APPOINTMENT OF THE RBiTRATORS~ THE ARBITRATOR HAVE NOT AGREED ON THE MODIFICATION OF THE ~ ,JERCENTAGES OF GROSS RECEIPTS PAYABLE AS RENT~ THE'ARBITRaTORS SHALL IMMEDIATELY APPOINT A THIRD ARBITRATOR, SUBJECT TD 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. (d) THE DECISION OF THE ARBITRATORS SHALL BE IN WRITI'NG~ 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 DECISIO~ OF'THE ARBITRATORS. .'~ (e) IF THE PARTIES AGREE THAT MODIFICATIONS ARE APPROPRIATE. BUT ARBITRATION IS NOT CONDUCTED VOLUNT'ARILY AS PROVIDED HEREIN, EITHER PARTY MAY PETITION TO THE SUPERIOR COURT~ IN ACCORDANCE WITlt THE PROVISIONS OF SECTIONS 1280, ET SEQ., OF THE CODE OF CIVIL' ~ROCEDURE 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 (~5%)'0F 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 THEIRS ARBITRATOR AND THE OTHER EXPENSES OF ARBITRATION SHALL BE BORNE BY LESSEE AND DISTRICT 1N EQUAL SHARES. ARIlCLE'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 1S OBLIGATED TO MAKE, .. ~I~ICH ARE PAYABLE TO DISTRICT BY LESSEE, ARE ~REED TO BE PAYABLE ~ITHO~T ABATEMENT, DEDUCTION, OR OFFSET OF ANY KIND OR,CHARACTER -7- WHATSOEVER. · IF MONEY PAYABLE TO DISTRICT AS A CONDITION OF THIS LEASE IS NOT PAID WITHIN TEN (10) DAYS ~HEN DUE, A LATE CHARGE OF 5% OF THE AMOUNT DUE SHALL BE ASSESSED AND THE PRINCIPAL SHALL ACCRUE INTEREST AT THE r-~HEN CURRENT PRIME RATE, AS SET BY DANK OF' AMERICA ON SAID DATE, FROM ND AFTER THE DUE DATE OF ANY PAYMENT O.F FIXED MINIMUM RENT, ERCENTAGE RENT~ RENT SECURITY DEPOSIT, LIQUIDATED DAMAGES OR ANY UTHER pAYMENTS. ARTICLE VII - ~[~URITY"DEPOSIT 'LESSEE SHALL PROVIDE DISTRICT. WITH, AND AT' ALL TIMES THEREAFTER MAINTAIN, A SECURITY DEPOSIT IN THE A~OUNT 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 DE NOT LESS THAN $34,500. $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 TERMS~ COVENANTS, AND CONOITIONS 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.  CH ASSIGNMENT'SHALL CONSIST ~F DELIVERY TO DISTRICT OF THE ORIGINAL SSBOOK FOR SUCH SAVINGS DEPOSIT AND EXECUTION AND DELIVERY OF A RITTEN-ASSIGNMENT OF SAID DEPOSIT TO DISTRICT ON A FORM APPROVED BY V'ISTRICT. C. A RENEWABLE TIME CERTIFICATE 'OF DEPOSIT FROM A FINANCIAL INSTITUTION IN SAN MATZO COUNTY WHEREIN THE PRINCIPAL SUM .IS MADE PAYABLE TO DISTRICT ON ORDERJ 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 LORE FINANCIAL INSTITUTIONS, SUBJECT TO REGULATION ~Y THE STATE OR FEDERAL. GOVERNMENT., PLEDGING THAT FUNDS NECESSARY TO SECURE PERFORMANCE OF THE LEASE ~ERHS, COVENANTS, AND CONDITIONS ARE GUARANTEED FOR PAYMENT~ AND AGREEING THAT SAID FUNDS SHALL SECURE LESSEE'S PERFORMANCE, AND THAT'ALL OR ANY PART'SHALL BE PAID TO DISTRICT GPON DEMAND. BOTH THE FINANCIAL INSTITUTION(S) AND THE FORM OF ~HE INSTRUMENT'S) MUST DE APPROVED BY DISTRICT. LESSEE MAY CHANGE THE FORM OF SECURITY DEPOSIT (A. THROUGH D., ?NCLUSIVE A~OVE) ONLY WITHIN THIRTY (30) DAYS AFTER AN~ ANNIVERSARY OF LEASE TERM. REGARDLESS OF THE.FORM IN t~HICH LESSEE ELECTS ~0 MAKE iAID SECURITY DEPOSIT, ALL OR ANY PORTION OF THE' PRINCIPAL. SUM SHALL AVAILABLE UNCFjNDITIONALLY TO DISTRICT FOR CORRECTING ANY DEFAULT OR C'Z'.'Z-~"~" i-~ ~ ,~ ~. L ~',f ..... '. ~ ..'.5 BREACH OF THIS'LEA~E LESSEE, HIS SUCCESSORS O SSIGNS, DR FOR PAYMENT O~ 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 THIS LEASE - SHOULD LESSEE ELECT TO ASSIGN A SAVINGS DEPOSIT TO DISTRICT, ROVIDE A TIME CERTIFICATE OF DEPOSIT, OR PROVIDE AN INSTRUMENT OF ~REDIT TO FULFILL THE SECURITY DEPOSIT REQUIREMENTS OF THI'.S LEASE, THE DEPOSITORY 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 TOi PERMIT ASSIGNMENT OR ISSUANCE OF A CERTIFICATE, AS PROVIDED ABOVE,. M~Y ALLOW THE PAYMENT TO'LESSEE OF INTEREST ACCRUING ON ACCOUNT OF SAID DEPOSIT. IF AT ANY'TIME DURIN8 THE TERM OF THiS LEASE, ANY RENT OR ANY OTHER SUM PAYBLE TO DISTRICT'SHALL BE OVERDUE AND UNPAID~ DISTRICT NAY, 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 ~ 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 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· 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 TINES 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 T~OL~ AND EQUIPMENT AND PROPERTY ONNED~BY CONTrACtOR S OR -. SUB-CONTRaCTOR'S' EMPLOYEES, WITH LIMITS OF NOT LESS THAN ONE HUNDRED PERCENT (1.OO%) OF THE TOTAL ESTIMATED COST OF CONSTRUCTION. BOILER~ UNgSUAL HAZARDS~ AND OTHER INSURANCE -9- BOILER AND MACHINERY URANCE IN SUCH AMOUNTS ICOVERAGE AS - REASONABLy SA%ISFACTORY' TO DISTR'iC~ IF'AT ANY TIME OR FROM.TIME TO TIME SUCH'EQUIPMENT IS LOCATED ON THE LEASED PREMISES. IF LESSEE COMMENCES, PERMITS, OR CAUSES' THE CONDUCT OF ANY ACTIVITY OR THE BRINGING OR OPERATION OF ANY EQUIPMENT ON OR' ABOUT THE LEASED PREMISES ?"REATING UNUSUAL HAZARDS, LESSEE SHALL,, PROMPTLY ON NOTICE OF DEMAND ' F DISTRICT, PROCURE AND MAINTAIN IN FORCE DURING SUCH ACTIVITY OR. " PERATION, 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. DISTR. ICT MOULD OTHERWISE HAVE THAT RIGHT, TO DEMAND THE REMOVAL, CESSATION, OR.ABATEMENT OF SUCH ACTIVITY'OR OPERATION,- OTHER INSURANCE, I'N ~MOUNTS FROM TIME TO TIME' REAS. ONABLY REQUIRED BY DISTRICT, AGAINST OTHER INSURABLE RISKS, IF AT THE TIME SUCH INSURANCE IS PROCURABLE .AND THE TOTAL PREMIUM COST FOR SUCH INSURANCE DOES NOT EXCEED AN AMOUNT EOUAL TO THE TOTAL PREMIUM COST FO~ INSURANCE REQUIRED UNDER THIS LEASE TO BE KEPT IN FORCE AND MAINTAINED DURING THE PERIOD SUCH CONSTRUCTION IS IN PROGRESS.. 3. WORKERS' COMPENSATION INSURANCE WORKERS' COMPENSATION INSURANCE COVERING ALL PERSONS EMPLOYED IN CONNECTION WITH THE WORK AND WITH RESPECT TO DEATH OR BODILY INJURY CLAIMS WHICH COULD BE ASSESSED tGAINST DISTRICT OR THE LEASED PREMISES. B. DURING THE TERM OF THIS LEASE, LESSEE SHALL MAINTAIN, KEEP IN FORCE~ AND PAY ALt PREMIUMS REQUIRED TO MAINTAIN AND KEEP IN FORCE THE FOLLOWING INSURANCE: 1. PU~LiC LIABILITY AND.PROPERTY DAMAGE A COMBINED ~INGLE LIMIT, COMPREHENSIVE GENERAL.LIABILITY POLICY 1N THE AMOUNT OF ! iNE MILLION DOLLARS ($1,000,000). IN ADDITION~ A FIVE MILLION . ~ .~.~~($5,000,000) EXCESS LIABILITY POLICY SHALL BE PRO¥IDED. THE PROPERTY DAMAGE INSURANCE SHALL COVER DAMAGE OR DESTRUCTION OF ANY PROPERTY, OTHER THAN THAT WHICH IS O~NED, 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 COVERAGE 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 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.BE SUFFICIE'~T 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 E>(CAVA'TIONS AND FOUNDATIONS, BUT WITHOUT DEDUCTION OR DEPRECIATION (HEREIN CALLED "FULL INSURABLE VALUE"), IF THE PARTIES DO NOT AGREE T~AT THE AMOUNT OF INSURANCE COMPLIES-WITH THE ABOVE AND CANEOT RESOLVE SAID DISPUTE', ·DISTRICT MAY, NOT MORE OFTEN THAN'ONCE EVERY TEELVE M.DNTHS~ REQUEST THE CARRIER OF THE INSURANCE THEN IN FORCE TO DETERMINE THE FULL INo~nA~LE VALUE AS DEFINED IN THIS '-"ROVISION, AND THE RESULTING DETERMINATION SHALL BE CONCLUSIVE BETWEEN HE PARTIES F'OR THE PURPOSE OF THIS LEASE, DISTRICT SHALL, AT ESSEE'S SOLE COST AND EXPENSE, COOPERATE FULLY WITH LESSEE TO ~BTAIN THE LARGEST POSSi.BLE RECOVERY, AND ALL POLICIES OF FIRE AND EXTENDED -10- COVERAGE INSURANCE RE~IRED BY THIS ARTICLE .SHA! PR~¥IDE THAT THE PROCEEDS OF WHICH SHAT BE-DEEMED ~0 BE HELD. IN IST BY THE RECIPIENT FOR THE U~,~ES ~ND PURPOSES PRESCRIBED BY THIS'LEASE. · , A. INSURANCE TRUSTEE PRIOR TO THE COMMENCEMENT OF THE TERMS OF THIS LEASE, LESSEE SHALL DESIGNATE THE'INSURANCE TRUSTEE', iHI~H DESIGNATION SHALL BE SUBJECT TO APPROVAL B'Y DISTRICT.. THE i !NSURANCE TRUSTEE MAY BE ANY.CALIFORNIA OR FEDERALLY CHARTERED SAVINGS ' ~ND LOAN. ASSOCIATION, A FEDERALLY CHARTERED BANK, OR TRUST COMPANY~ PREFERABLY WITH AN OFFICE OR BRANCH LOCATED WITHIN TWENTY (20) MILES 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 MATEO 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 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 APPLIED'BY LESSEE FOR REPAIR, RESTORATION, OR RECONSTRUCTION OF ANY IMPROVEMENT DAMAGED OR DESTROYED BY THE CASUALTY GIVING 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 US'ED, S~JECT T~ ANY ~THER CONDITIONS. ONTAINED IN THIS LEASE, BY SUCH INSUR.NCE TRUoTEE A~ A FUND FOR THE ESTORAT.ION AND REPAIR OF ANY AND ALL BUILDI'NGS~ 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, HOWEVER, THAT IF SUCH INSURANCE TRUSTEE SHALL, IN ITS REASONABLE DISCRETION, DE~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 ~ORK 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. -11- (3i' PROCEEDS-NOT D, ISBUR~ED THE INSURANCE TRUSTEE, ~AS PROVIDED ABOVE, AND IR~MAINING 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 ,COOMPANIED BY REASONABLE PROOF OF SUCH COMPLETION AND PAYMENT, BE IEL.IVERED BY THE INSURANCE TRUSTEE TO LESSEE OR LENDER, WHICHEVER HAS FIRST 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 DEPOS'ITING SAME WITH THE INSURANCE TRUSTEE WITHIN ONE HUNDRED TWENTY (120) 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 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 ~HARGES OF ~HE INSURANCE TRUSTEE SHALL BE BORNE AND PAID BY LESSEE. (7) -IF THE INSURANCE TRUSTEE SHALL RESIGN OR FOR ANY r-.REASON BE UNWILLING TO ACT OR CON-TiNUE TO ACT, THE LESSEE SHALL ~ESIGNATE A SUBSTITUTE INSURANCE TRUSTEE IN THE SAME MANNER AND ; UBJECT TO THE SAME CONDITIONS AS PROVIDED FOR DESIGNATION OF THE URIGiNAL INSURANCE TRUSTEE. 3. ~USINESS 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. ~RODUCTS 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 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 ~E CARRIED ONLY WITH RESPONSIBLE INSURANCE COMPANIES LICENSED TO DO BUSINESS iN THE STATE OF CALiFORHiA. ALL SUCH POLICIES SHALL BE NON-ASSESSABLE AND SHALL CONTAIN LANGUAGE, TO THE EXTENT OBTAINABLE, TO THE EFFECT' THAI': 1. . ANY LOSS SHALL BE PAYABLE NOTWITHSTANDING ANY ACT OR -IZ- NEGLIGENCE OF DIST'RIC~ ITS OFFICERS, AGENT~, A MPLOYEES THAT MAY OTHERWISE RESU.LT I~A~rORFEITURE. O~ THE INSURANCE. ~ Z. THE INSURER WAIVES THE RIGHT OF SUBROGATION AGAINST DiSTRi~T, ITS OFFICERS, AGENTS AND EMPLOYEES. 3.' THE POLICIES ARE PRIMARY ~AND NON-CONTRIBUTING WITH ANY NSURANCE THAT MAY BE CARRIED BY 'DISTRICT; AND · 4. THE POLICIES CANNOT BE CANCELLED OR MATERIALLY CHANGED EXCEPT AFTER THIRTY DAYS 130) PRIOR WRITTEN N~TICE 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 ~ITH 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 MAY REIMBURSE ITSELF FOR THE COST OF SAID INSURANCE FROM LESSEE.'S SECURITY DEPOSI'T. '-- 6. DISTRICT MAY, AT ANY TIME, BUT NOT MORE OFTEN THAN ONCE A EAR, REQUIRE LESSEE TO INCREASE THE MINIMUM DOLLAR AMOUNTS FOR NSURANCE REQUIRED BY THIS LEASE, BUT EVERY SUCH INCREASE SHALL BE REASONABLE UNDER THE CIRCUMSTANCES, ARTICLE IX - POSSESSORY INTEREST TAXES, TAXE~z_6SSESSMENTS AND FEES A. PURSUANT TO CALIFORNIA REVENUE AND TAXATION CODE SECTION 107.~, LESSEE IS HEREBY. ADVISED THAT THIS LEASE CREATES A POSSESSORY INTEREST SUBJECT TO PROPERTY TAXATION ANO, AS THE PARTY IN ~HOM THE POSSESSORY INTEREST IS VESTED, LESSEE WILL BE SUBJECT TO PAYMEN~ 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, ]NCLUDINS TAXES AND ASSESSMENTS ASSESSED OR LEVIED UPON ANY MACHtNES~ 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 PROMPTLY ANY TAXES LEVIED UPON THE ~USINESS 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 PERI, ITS FOR ANY ~USINESS OR ACTIVITY OF LESSEE OR SUBTENANTS UPON THE LEASED PREMIS S -13- C. THE PAYMENT ANY SUCH TAXES, FEES, O~HARGES SHALL NOT CONSTITUTE CAUSE FOR FICATIO. N'~F RENT P~YABL~By LESSEE. D. ~F 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 '~TEST THE SAME IN ANY MANNER PROVIDED BY LAW, PROVIDED, HOWEVER, ANY JCH TAXES, FEES, CHARGES, DUTIES, OR ASSESSMENTS.SHALL HAVE FIRST 'u&EN PAID. ARTICLE X - OPERATIONS 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 SHALL 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 r~D THE REALIZATION OF THE GREATEST. POSSIBLE REVENUE THEREFROM 'BY [SSEE AND DISTRICT. IT IS AGREED THAT THE ULTIMATE AND IMMEDIATE PURPOSES ARE CONSISTENT AND COMPATIBLE. ACCORDINGLY,'LESSEE COVENANTS AND'AGREES. TO OPERATE SAID PREMISES FULLY AND CONTINUOUSLY TO ACCOMPLISH SAID 'PURPOSES. B. COOPERATION AMON'~ 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 -14- WATER OR LITTERING O ND OR WATE~ CAUSED ~Y GINATING IN, ON OR ABOUT LESSEE'S' FACILITIES. ~' Z. KEEP TH~ NOISE LEVEL ON THE LEASED PREMISES TO A MINIMUm'SO THAT PERSONS IN THE GENERAL .NEIGHBORHOOD WILL BE ABLE TO ?"~M'~ORTA~LY ENJOY OTHER FACILITIES LEASED BY LESSOR IN THE VICINITY OF IE LEASED PREMISES. 3. KEEP THE LIGHTS'ON THE LEASED PREMiSES'FROM ADVERSELY AFFECTING THE OPERATION OF BOATS 'IN THE AREA. ' ' 4. PREVENT ALL POLLUTANTS, INCLUD!NG PETROLEUM PRODUCTS OF ANY 'NATURE, FROM BEIN~ DISCHARGED INTO THE HARBOR t~ATERS. D. ~UPERV~ON BY LESSEE LESSEE'~.MANAGEMENT SHALL BE pERSONALLY EXPERIENCED AND SKILLED IN THE MANAGEMENT OF COMMERCIAL 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  ALL BE GIVEN DIRECTLY TO THE APPROPRIATE PARTY. E.. VIOLATION OF THIS ARTICLE A VIOLATIO'N OF THIS ARTICLE SHALL CONSTITUTE A-BREACH OF'THIS LEASE AND DISTRICT SHALL HAVE ALL RIGHTS AND' REMEDIES PROVIDED BY LAN EXCEPT THAT SUCH A BREACH SHALL NOT BE GROUNDS FOR TERMINATION OR CANCELLATION OF THIS LEASE. ARTICLE XI - ~~TED DAMA~ .. A. VIOLATION~GND AMOUNT. NOTWITHSTANDING ANY OTHER LEASE TERM, AND IN ADDITION TO ALL OTHER REMEDIES AVAILABLE TO DISTRICT FOR VIOLATIpNS 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 DEFGSIT 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 ARTICLE VI USES AND SERVICES OPERATING SCHEDULE AND CONTROLLED PRICES IMPROVEMENTS AND INVESTMENTS ' -15- GENERAL CONDITIONS ' ' ARTICLE IV CONSTRUCTION ARTICLE X OPERATIONS ARTICLE XV FINANCIAL REPORTS AND RECORDS .... iCH 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 DAMAGES FOR BREACH OF. ANY OF SAID PROVISIONS ARE AND WILL CONTINUE TO BE.IMPRACTIBLE AND EXTREMELY DIFFICULT TO DETERMINE AND THAT ONE-ONE HUNDREDTHS (I/1OO) 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 tN THIS ARTICLE. LIQUIDATED DAMAGES SHALL NOT BE ASSESSED IF THE LESSEE STARTS AND DILIGENTLY PURSUES A REMEDY WITHIN A REASONABLE TINE 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 WAIVED UNLESS THE. BOARD OF HARBOR 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, FROH DAMAGE, INJURY, LOSS OR LIABILITY ARISING FROM USE oF THE PREMISES BY THE LESSEE, iTS PATRONS OR CLIENTS, OR ANY OTHER INDIVIDUAL. ARTICLE XiII - COMPLIANCE I'~ITH LAWS AN.D REGULATIONS A. LESSEE SHALL AT ALL TIMES OBSERVE AND COHPLY WITH, AND SHALL CAUSE ALL ITS EMPLOYEES TO OBSERVE -AND COMPLY WITH ALL, APPLICABLE r-'AWS, ORDINANCES, REGULATIOi~S, ORDERS, AND DECREES OF ~ALL PUBLIC AUTHORITIES HAVING J ICTION OVER OPERATI.ONSIDER' THIS-- LEASE, WHETHER N~T IN FOR~E HHICH MAY HEREAFTER BE IN FOR~E. ~. IF THE IMPOSITION Of ANY LAN, ORDER, ORDINANCE, REGULATION OR DiRECtION SHALL BE DEEMED BY LESSEE TO BE IMPROPER, ILLEGAL,  '-IC~SSIVE, OR UNREASONABLE, IT MAY AT ITS SOLE COST AND EXPENSE, SPUTE AND' CONTEST THE SAME IN ANY MANNER PROVIDED BY LAW. ARTICLE XIV - HOLD HARM~[~ A. LESSEE SHALL DEFEND ALL SUITS ~ROUGHT AGAINST 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 CREATEi 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 LIABILIT'Y~ 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 ~Y 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 WRITTEN NOTICE TO LESSEE WITHIN THIRTY (30) DAYS AFTER THE FILIN~ OF ANY WRITTEN CLAIM AGAINST DISTRICT WHEREIN IT IS ALLEGED THAT ERATIONS BY THE LESSEE OR CONDI'TIONS ON THE LEASED PREMISES CREATE A ABILITY OF THE DISTRICT. IF SUCH NOTICE SHALL NOT BE GIVEN WITHIN ~ID PERIODS, DISTRICT SHALL INDEMNIFY'LESSEE AND HOLD IT HARMLESS FROM ANY DAMAGES OR LOSS LESSEE MAY ·SUFFER AS A RESULT OF DISTRICT'S FAILURE TO GIVE SUCH NO~ICE. SUCH NOTICE, HOWEVER, SHALl- NOT BE REQDIRED IN THOSE INSTANCES WHERE 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 REPORI~ AND RECORDS 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 ACCOUNTS' AND RECORDS FOR THE BUSINESS CONDUCTED AT', ON AND FROM THE LEASED PREMISES, AND SHALL KEEP ~RUE, ACCURATE AND.COMPLETE ACCOUNTS AND RECORDS', AND SHALL· REOUIRE ITS SUBLESSEES, CONCESSIONAIRES, AND LICENSEES, IF ANY, TO DO THE SAHE. .A. ~USINESS RECORDS. LESSEE SHALL INSTALL AND MAINTAIN A SYSTEM OF ACCOUNTS AND RECORDS WHICH, IN THE OPINION OF THE DISTRICT, CONFORMS TO GOOD ACCOUNTING PRACTICE. THE SYSTEM OF ACCOUNTS AND RECORDS SHALL BE SUgMITTED TO DISTRICT FOR REVIEW AND APPROVAL PRIOR "--O COMPLETION OF ANY PHASE OF CONSTRUCTION. NO CHANGE~SHALL BE MADE N THE SYSTEM OF ACCOUNTS AND RECORDS THEREAFTER BY LESSEE UNLESS SUCH ;HANGE HAS BEEN FIRST APPROVED IN WRITING BY DISIRICT. SUCH APPROVALS BY DiSTRICi SHALL NOT BE UNREASONABLY WITHHELD. ANY DISPUTE SHALL BE .......... ~ .~...~, ~ ~ -17- PROCESSED IN- ACCOF~DA CLAIMS AND~ PROTEST. ITH THE PROCEDURES-SET IN ARTICLE XIX - '*' 1. SOURCE DOCUMENTS. THE BUSINESS RECORDS MUST BE ?'~]PPORTED BY SOURCE DOCUMENTS SUCH AS SALES SLIPS, UNBiLLED ACCOUNTING SC~MENTS, LEDGERS, BANK DEPOSIT RECEIPTS, SALES TAX RETURNS, ~ASR EGISTER TAPES, SALES BOOKS, BANK BOOKS, PURCHASE INVOICES, AND OTHER RECORDS AND DOCUMENTS REASONABLY NECESSARY TO VERIFY THE GROSS RECEIPTS REPORTED BY LESSEE. ALL RETAIL SALES AND CHARGES SHALL. BE PROPERLY DOCUMENTED AND RECORDED PROMPTLY BY 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 BE EOUIPPED WITH DEVICES WHICH LOCK IN SALES TOTALS AND OTHER TRANSACTION RECORDS~ OR WITH COUNTERS WHICH ARE NOT RE-SETTABLE.AND WHICH RECORD TRANSACTION NUMBERS AND SALES DETAILS. FOR TRANSACTIONS NOT RECORDED BY. MEANS OF CASH REGISTERS OR OTHER COMPARABLE DEVICES~ LESSEE SHAEL '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. 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 SHAL~ 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  '~URPOSES PROMO~IVE OF AND CONSISTENT WITH THESE PROVISIONS OF THIS EASE. 3. DISTRICT'S ACCESS TO RECORDS. DISTRICT SHALL HAVE'THE RIGHT, AT ANY-REASONABLE TIME, AND FROM TIME TO TIHE, AFTER GIVING REASONABLE NOTICE, TO DO ANY OR ALL OF THE FOLLOWING: TO AUDIT SAID RECORDS; TO CAUSE A'N AUDIT OF SAID RECORDS TO BE MADE; TO MAKE ABSTRACTS FROM SAID RECORDS; TO MAKE COPIES OF ANY OR ALL OF SAID RECORDS; e. .iTO EXAMINE ANY OR ALL SUBLEASES, LICENSES, AND CONCESSION AGREEMENTS; f. TO MAKE COPIES=- OF ANY OR ALL SUBLEASES, LICENSES, CONCESSION AGREEMENTS,'AND OTHER APPROPRIATE DOCUMENTS; 3- TO EXAMINE AN9 NAKE COPIES OF L-ESSEE'S ARTICLES OF INCORPORATION, BYLAWS, PARTNERSHIP AGREEMENT, LIST CF SHAREHOLDERS~ AND ANY OTHER DOCUMENT PERTINENT TO_DETERMINING THE FORH OF AND ~WNERSHIP IN LESSEE AND ANY AMENDMENTS TO ANY OF SUCH ~CCUMENTS; -18- AND ANY PORTION OR'AL ANY INCOI~E TAX RET~RNo~mR'PPLICABLE TO LESSEEtS ~USI~ESS/ES UNDER THIS LEASE. LESSEE KNOWINGLY AND SPECI~,!CALLY WAIVES ANY AND ALL RIGHTS OR PRIVILEGES REGARDING SAID INCOME 7^" RETURNS THAT MI .T OTHER.ISE PREVENT T. IER PRODUCTION A.D ,,N. ECTI'ON .<OR CO PI. , .Y DISTRICT. i ~sSEE SHALL MAKE ALL RECORDS SPECIFIED IN .THE NOTICE AVA)LABLE AT THE 'lIME SPECIFIED, IF REASONABLE, AND AT THE PLACE WHERE THE.RECORDS ARE TO BE KEPT; PROVIDED, HOWEVER, THAT DISTRICT MAY .HAVE SAID'RECORDS COPIED BY AN INDEPENDANT COPY SERVICE AT DISTRICT'S EXPENSE, TO ~EVIEW IN ANOTHER LOCATION. i. THESE PROVISIONS, AS TO.DISTRICT ACESS TO RECORDS SHALL BE REPEATED IN EACH AND EVERY SUBLEASE OF THESE PREMISES TO PROVIgE DISTRICT THESE SAME POWERS AND RIGHTS WITH RESPECT TO EACH SUBTENANT. B. STATEMENTS. 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 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 FISCAL YEAR AND SHALL BY WRITTEN NOTICE ADVISE DISTRICT OF ANY CHANGE IN SUCH CLOSING DATE. !~THIN NINETY (90) DAYS AFTER THE' CLOSE OF THE FISCAL YEAR~ LESSEE ALL~FURNISH DISTRICT AN ANNUAL FINANCIAL STATEMENT OF THE LESSEE, iEPA~ED IN A MANNER APPROVED BY THE DISTRICT, VERIFIED' AND SIGNED BY 'A"RESPONSIBLE OFFICER OF' LESSEE, ON ~EHALF OF LESSEE. IN ALL FINANCIAL STATEMENTS, THE TOTAL GROSS RECEIPTS FOR THE ACCOUNTING YEAR SHALL ~E 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 (5%) FOR THE PERIOD. COVERED BY SUCH AUDIT, THE FULL COST'OF THE AUDIT, AS DETERMINED BY THE DISTRICT AUDITOR, SHALL BE PAID BY LESSEE ~ITHIN 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 ~EAR,THE COS'T 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 WERE-NOT DUE FRO~ LESSEE TO DISTRICT; PROVIDED, HOWEVER, THAT ANY ACTION OR PROCEEDING THEREFORE SHALL BE COMMENCED BY LESSEE NITHIN.SIXTY ¢&O) DAYS AFTER SUCH PAYMENT .tlbiLESS ANY DISPUTE HAS BEEN PROCESSED IN ACCORDANCE WI~H THE PROCEDURES SET FORTH ARTICLE XlX - CLAIMS ANtROT'EST,- AND IN SUCH EVENT, SUCH SIXTY '(60) DAY PERIOD SHALL COMMENCE-AFTER THE DECISION OF THE BOAR~,OF HARBOR COMMISSIONERS IS FINAL. D., CONF'IDENTIAL INFORMATION. ALL INFORMATION OBTAINED BY r~iSTRICT, 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 BET~EE~ DISTRICT, LESSEE ~UBTENTANT, 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 ~ ASSIGNMENTs SUBLETTING 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 RIGHT OR PRIVILEGE APPURTENANT THERETO WITHOUT THE PRIOR WRITTEN APPROVAL OF DISTRICT, WHICH SHALL NOT BE UNREASONABLY WITHHELD. '1. 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 r~'~JBLESSEE. SUBRENTS SHALL BE FIXED AT THE FAIR RENTAL VALUE EOR THE' ~EMISES SUBLEASES SHALL BE MADE EXPRESSLY SUBJECT TO THIS LEASE AND tALL PERMIT THE SUBLESSEE-TO PERFORM ANY ACT REQUIRED OF LESSEE UNDER ~HIS LEASE. SUBLEASES SHALL EXPRESSLY REQUIRE .THE SUBLESSEE TO COMPLY WITH THE TERMS~ COVENANTS, AND CONDITIONS OF THIS LEASE ON THE SUBLEASED PREMISES, EXCEPT THAT ALL PERCENTAGE RENTS AND SUBREN~S 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 ~Y LESSEE, OR MUTUAL CANCELLATION THEREOF, SHALL NOT WORK 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. ~U~.H'SUBLEASES ~O DISTRICT OF ANY OR ALL 3. CONDITIONS FOR'ASSIGNMENT OF LEASEHOLD. ANY ASSIG~MENT OR SUBLEASE TO AN INTERMEDIARY FE.R THE-PLI~PO-SE OF FURTHER SU~L'ETTING TO SU'2TENANT OPERATORS, OR TAKING OVER LESSEE'S FUNCTIONS · ."-"~.$ I~ANAGER OF ALL OR SUBSTANTIALLY ALL OF THE LEASED P~EMISES SHALL BE --EI:~ED AN ASSIGNHENT OF THE LEASEHOLD. LESSEE SHALL FILE A REQUEST TO -]SIGN LEASEHOLD TO WHICH SHALL BE ATTACHED A COP. PLETED PROPOSER'S 'I~UES'riO:"~NAIRE PREPARED BY T~IE PROSPECTIVE ASSIGNEE. CONCURRENTLY WITH -ZO- ~-'l LE FILING THE REQUEST To~sIGN~ LEASEHOLD, LESSEE PAY IN'CASH OR CERTIFIE~ 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 ""'~SSEE'S NET WORTH AT THE COMMENCEMENT OF THIS LEASE, DISTRICT MAY [QUIRE LESSEE TO GUARANTEE SUCH ASSIGNEE'S OBLIGATIONS HEREUNDER FOR JCH PERIOD AS DISTRICT DEEMS ADVISABLE. NET NORTH SHALL,MEAN THE ~MOUNT BY WHICH THE TOTAL OF ALL ASSETS SHALL EXCEED THE TOTAL OF ALL LIABILITIES AS DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AS APPROVED B~"THE'DISTRICT AUDITOR, DISTR~CT 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 NOTIEIED 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 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 A RETIRED SAN MATEO COUNTY JUDGE AS ARBITRATOR, IF AVAILABLE~ OR CHOOSING A SAN MATED 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 r"ERSON OR ENTITY SHALL-NOT BE INCLUDED AS GROSS RECEIPTS FOR THE {TERMINATION OF RENT. UPON ASSIGNMENT OF LESSEE'S INTEREST' IN THIS " EASE TO A DISTRICT-APPROVED ASSIGNEE WHO HAS UNCONDITIONALLY ASSUMED 'THE .O~LIGATIONS 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. HYPOTHECATION'. 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 CH'DEED OF TRUST,.THE NOTE- EVIDENCING 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-OkNED'IMPROVEMENTS NO~ OR HEREAFTER ERECTED ON THE LEASE F'RI4'ISES. Z. ANY SECURITY INTEREST IN THIS LEASE SDHALL BE GRANTED ONLY THE FOLLOEING PURPOSES: (1) TO FINANCE CONSTRUCTION OF E~flANENT IMPROYEt~ENTS AND STRUCTURES UPON THE DEI,iiSED PREMISES~ PROVIDE "TAKE-OUT" FINANCING OF ANY CONSTRUCTIO~ LOAN NOT TO EXCEED N,.~ETY PERCENT (~0%) OF THE APFRAISED VALUE OF THE IMPROVEMENTS ON TH'~ SED PREMISES, (3) TO NANCE THE CONSTRUCTJ.ON NOT TO EXCEED EIGHTY-FIVE'PERCENT (B5%) OF THE APPRIASED VALUE OF THE IMPROVEMENTS ON THE DEMISED PREMISES AND (4) TO FINANCE LESSEE'S CAPITAL ADDITIONS AND E~UiPMENT, TENANT IMPROVEMENTS, ACQUISITIONS AND/OR REPLACEMENTS REASONABLY REQUIRED IN PURSUIT OF ITS .... IStN~SS ACTIVITIES ON THE PREMISES. ~ NO SECURITY INTEREST .IN THIS LEASE OR ASSIGNMENT THEREOF ~HALL BE BINDING UPON DISTRICT IN THE ENFORCEMENT OF ITS RIGHTS UNDER THIS LEASE, NOR SHALL DISTRICT BE DEEMED TO HAVE ~NY NOTICE THEREOF~ UNLESS.SUCH SECURITY INTEREST. COMPLIES WITH EACH AND EVERY PROVISION OF THIS. ARTICLE PERTAINING TO SUCH 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 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 ENDON.NMENT FUND WITH AN'INVESTMENT PORTFOLIO OF NOT LESS 'THAN TEN MILLION D~LLARS ($10,000,000), A CHARITABLE OR NON-PROFIT CORPORATION OR ASSOCIATION WITH AN iNVESTMENT PORTFOLIO OF NOT LESS THAN FIVE MILLION DOLLARS ($5,000,000), ANY CALIFORNIA OR FEDERALLY CHARTERED CORPORATIONS (IF LEGALLY EMPOWERED TO MAKE LOANS CONTEMPLATED BY THIS LEASE), UNLESS SPECIFICALLY ALLO~ED AND A~PROVED BY THE DISTRICT IN WRITING. ~ 4. NO SECURITY INTEREST IN THIS LEASE OR ASSiGNME~T ~HEREOF 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 ~EEN 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 PROcEEDs 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 SE[URITY INTEREST MAY PROVIDE THAT AFTER SUCH PROCEEDS HAVE BEEN SO APPLIED, ANY REMAINING BALANCE, WHICH WOULD THEN BE PAYABLE TO LESSEE, COULD BE USED TO REPAY ALL OR PART OF THE OUTSTANDING LOAN SECURED BY SUCH SECURITY INTEREST. · "e. SUCH SECURITY' I~TER~ST SHALL EXPRESSLY PROVIDE THAT' ALL NOTICES OF'DEFAULT UNDER THE NOTE AND DEED .OF TRUST OR LEASEHOLD MORTGAGE MUST BE SENT TO.DISTRICT AND LESSEE, AND THAT DISTRICT SHALL HAVE_ T~ RIGHT, BUT NOT THE OBLIGATION, TO CURE THE DEFAULT OR CAUSE IR'DEFAULT TO BE CURED IF LESSEE FAILS TO DO SO. DISTRICT SHALL HAVE IENTY (ZO) DAYS IN ~HICH TO CURE ANY DEFAULT OR TO CAUSE ANY DEFAULT vd 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 ~NY 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 AND 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 ~ITHIN 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 {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 TRUSf DEED ~.r"'~LE, SUCH ENCUMBRANCE-HOLDER SHALL HAVE THE PRIVILEGE OF TRANSFERRING FS INTEREST IN SUCH LEASE TO A WHOLLY O~NED SUBSIDIARY CORPORATION ,,~THOUT THE PRIOR CONSENT OF DISTRICT, AND IN.SUCH EVENT~ SUCH- ENCUM3RANCE HOLDER SHALL ~E 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 HHILE 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 BY LESSEE~ 7, WRITTEN CONSENT OF ENCUMBRANCE HOLDER SHALL BE OBTAINED PRIOR TO ANY 'AMENDMENT TO THIS LEASE. B. EACH AND.ALL OF THE PROVISIONS, AGREE~ENTS,.TERMS, COVENANTS~ AND CONDITIONS OF THIS LEASE TO BE PERFOR~ED~ KEPT AND O~SERVED BY DISTRICT AND L~SSEE SHALL BE BINDING UFO~ THE HEIRS~ EXECUTORS, ADMINISTRATORS, SUCCESSORS, AND ASSIGNS OF DISTRICT AND LESSEE, AND ALL RIGHTS, PRIVILEGES AND BENEFITS ARISING UNDER THIS LEASE IN FAVOR OF DISTRICT, LESSEE AND ENCONBEANCE HOLDER SHALL BE ...iVAIL. ABLE IN FAVOR OF THE HEIRS, E~ECUTORS, ADmiNISTRAtORS, UCCESSORS~ AND ASSIGNS THEREOF ~ESPECTIVELY, PROViDED~ HOWEYER~ THAT -Z3- ANY ASSIGNMENT, HVPOT~I~ATION, OR SUBLETTING BY THROUGH LESSEE OR ENCOMBRA~E HOLDER IN VIOLATION 'OF'THE'PROVISIONS OF THIS LEASE SHALL BE VOID, AND NO RIGHTS )qHATSOEVER SHALL BE CONFERRED THEREBY. _.. C. ' HYPOTHECATION OR ASSIGNMENT FOR BENEFIT OF CREDITORS A GENERAL ASSIGNMENT BY LESSEE FOR THE BENEFIT OF CREDITORS, 'a'HALL 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 E~ENT THE LEASE IS TERMINATED BY THE DISTRICT FOR THE ABOVE CAUSe, THE ENCUMBRANCE HOLDER SHALL HAVE THE RIGHT TO ASSUME TH~ LEASE, AS AN ASSIGNEMENT~ WITHOUT PRIOR 'APPROVAL OF THE DISTRICT AN~ SAID ASSIGNMENT SHALL NOT 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 }{VII - O~NERSHI'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 ARTIFICIAL., OR ANY VOLUNTARY TRANSFER OF OR ALTERATION IN THE RATIO OF THE EVIDENCES OF OWNERSHIP INTERESTS tN 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 OBTAINEDi ANY DISPUTE SHALL BE PROCESSED IN ACCORDANCE WITH THE PROCEDURE SET FORTH IN ARTICLE r.~jX-CLAIMS AND PROTEST.' THE SALE. OF LIMITED. PARTNERSHIP SHARES TO ~VESTORS, OR THE TRANSFER OF A PORTION OF THE LIMITED PARTNERSHIP JARES 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 L~ASE OR ANY 'INTEREST THEREIN FROM LES'~EE BY CORPORATE REORGANIZATION, MERGER, CONSOLIDATION, OR LIQUIDATION~ SHALL BE DEEMED AN ASSIGNMENT PROHIBITED BY ARTICLE }{VI - ASSIGNMENT, SUBLETTING AND HYPOTHECATION, UNLESS THE' PRIOR WRITTEN CONSENT OF DISTRICT BE OBTAINED. SUCH CONSENT SHALL NOT BE UNREASONABLY WITHHELD BY DISTRICT. ANY DISPUTE SH.ALL 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' i_EASED 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 PREHISES TO ATTACHMENT, EXECUTION, OR OTHER LEVY, OR TO SEIZURE UNGER LEGAL PROCESS, IN ANY SUCH EVENT, UNLESS THE APPOINTMENT OF THE RECEIVER OR ATTA. CH~ENT, EXECUTION, OR OTHER LEVY, OR SEIZURE UNDER LEGAL PROCESS IS F'URSUANT TO BANKRUPTCY, OR IS EEl. EASED, AND ALL CONSEQUENT ORDERS, ADJUDICATIONS, CUSTODIES, AND SUP~:~F~~ ~r~.~.~o ARE DISMISSED, VACATED, OR ~r~THER[4ISE PERMANENTLY STAYED OR TERi~IINATED WITHIN N!NE~TY ~90) DAYS FTER THE APPOINTMENT,. FILING~ OR OTHER INITIAL EVENT, SUCH EVENT HALL BE DEEMED AN ASSIGNMENT PROHIE:ITED BY ARTICLE ~','VI - ASSIGNMENT, '.SL;BLETTING AND H'~'POTHECATION. ANY E}{TENSION OF TIME MAY ONLY BE 6RANTED UPON THE CONE'ITION THAT A WRITTEN REQUEST FOR EXTENSION OF TIME IS FILED WITH TH~9ISTRICT PRIOR TO THE EXP,T~ATION OF SAID NINETY (90) DAY PERIOD, A~D ~I~N SUCH FURTHER CONDI~ION~AS THE DISTRICT, IN ITS SOLE ~ISCRETION, SHALL SEE FIT'TO ~MPOSEC ~. ANYTHING IN THIS LEASE TO THE CONTRARY NOTWITHSTANDING, ANY DEFAULt'OR BREACH OF THIS ARTICLE SHALL BE CURED, IF ENCUMBRANCE ?'3LDER 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 ×CIII, DEFAULT OR BREACH, AND EACH AND EVERY CONDITION OF ITS. RIGH~ TO FORECLOSE OF ITS SECURITY INTEREST OCCURS. ARTICLE'.XVIII -. DEFAULT OF BREACH A. LESSEE SHALL NOT BE CONSIDERED IN DEFAULT OR BREAC~ 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. I.F LESSEE SHAL~ DEFAULT OR BREACH ANY cOVENANT OR CONDITIONS TO BE KEPT, OBSERVED, OR PERFORMED BY LESSEE, DISTRICT SHAL~ 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 DEFAULT OR :EACH. SHOULD LESSEE'FAIL TO SO CURE, REMEDY, AND CORRECT SAID !_..iFAULT 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 ENCUMBRANCE HOLDER AS SET FORTH IN THIS ARTICLE AND IN ARTICLE XVI - ASSIGNMENT, 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 OCCURRED AND HAS NOT 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, UNLESS SAID DEFAULT OR ~REACH HAS BEEN CURED, THIS LEASE SHALL BE TERMINATED. UPON SUCH'TERMINATION, LEe~ ~oE='S~ ~IGHT TO POSSESSION OF THE PREMISES SHALL TERMINATE AND LESSEE SHALL SURRENDER POSSESSION THEREOF IMMEDIATELY. IN NO EVENT SHALL DISTRICT TERHINATE-THIS LEASE UNTIL AT LEAST NINETY (90) DAYS FOLLOI~ING THE'RECEiPT OF THE NOTICE OF DEFAULT OR BREACH BY ENCUMBRANCE HOLDER. -ZS- E. DISTRICT .SHAINOT EXERCISE ANY REMEDY ~IL'.ABLE TO IT FOR BREACH OR DEFAULT BY LESSEE AND SH~LL NOT TE'RHIHRTE THIS LEASE DUE TO ANY DEFAULT OF~.DREACH DY LESSEE UNLESS DISTRICT SHALL HAVE SENT WRITTE..N NOTICE OF DEFAULT OR BREACH TO ENCUMBRANCE HOLDER,. UPON RECEiP-T,OF SUCH NOTICE, ENCUMBRANCE HOLDER SHALL HAVE THE RIGHT TO ~-IJRE 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 SUM OF MONEY 'WHATSOEVER, SUCH SUM OR SUMS' SHALE BE'PAID TO DISTRICT, OR OTHER PROPER PAYEE, WITHIN 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 z,. WITHIN TWENTY' (ZO) DAYS AFTER SENDING 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 ?I~ECESSARY TO CURE THE DEFAULT OR BREACH; OR .. b.. WITHIN TWENTY (20) DAYS AFTER SENDING THE NOTICE OF ']NTENTiON 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 THE FOLLOWING EVENTS OCCUR: (I) WITHIN SAID PERIOD, ENCUMBRANCE HOLDER COMMENCES FORECLOSURE OF ITS SECURITY INTEREST BY JUDICIAL ACT[ON 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 T~IS LEASE UNTIL SUCH FORECLOSURE SALE BECOMES FINAL OR SUCH TRUST DEED SALE IS CONCLUDED; AND (3). WITHIN THIRTYJFIVE (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 ~E DONE TO CURE, CORRECT, AND REMEDY SAID DEFAULT OR BREACH. ANY PERIOD HEREIN STATED SHALL BE EXTENDED BY THE ;-~!ME IN WHICH SUCH TRANSFERREE OR FURCHASER IS PREVENTED BY ANY ORDER, ~ ]DGMENT OR DECREE OF ANY COURT OR REGULATORY BODY OF COMPETENT : JRISDICTION FROM COMMENCING FORECL~oun~ BY JUDICIAL ACTION OR TRUST 'DEED SALE, OR FROM SECURING POSSESSION OF THE LEASED PREMISES IF POSSESSION OF THE'~EA PREMISES IS NECESSARY E"[HE DEFAULT OR c. ANY DEFAULT OR BREACH WHICH ARISES BY OPERATION OF ~- '¢TICLE XVI - ASSIGNMENT, SUBLETTING AND HYPOTHECATION, SUBARTICLE (1) OR (Z)., SHALL BE DEEMED TO HAVE'BEEN CURED IF, WITHIN TWENTY ~ .lO) DAYS AFTER SENDING A NOTICE OF INTENTION T0 TERMINATE OR NOTICE OF INTENTION TO REENTER TO ENCUMBRANCE HOLDER, DISTRICT R~CEIVED FROM ENCUMBRANCE HOLDER. WRITTEN NOTICE OF INTENTION TO FOKECLOSE SECURITY INTEREST~ AND BOTH OF .THE FOLLOWING EVENTS OCCUR:' .. .. .(i) WITHIN SAID PERIOD ENcuMBRaNCE HOLDER 60MMENCES 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 THE LEASED PREMISES.IS NECESSARY. TO CURE THE DEFAULT OR BREACH. · ARTICLE XIX - CLAIMS AND PROTEST ? DURING REASONABLE HOURS, DIS'TRICT,~ ITS AGENTS OR EMPLOYEES, SHALL ! iVE THE RIGHT, BUT NOT THE OBLIGATION, TO ENTER UPON AND INSPECT THE i, ..!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 CLEARliY AND 'IN DETAIL ITS OBJECTIONS AND REASONS. IF LESSEE DOES NOT FILE SUCH PROTEST WITHIN THIRTY DAYS, LESSEE SHALL BE DEEMED 'TO HAVE WAIVED ALL CEAIMS FOR D'AMAGES 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 OBJECTED TO AND LESSEE'S. PROTEST, AND SHALL WITHIN THIRTY (30) DAYS NOTI~Y LESSEE IN WRITING OF I~S 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 StICH REQUEST FOR RECONSIDERATION, DISTRICT SHALL REPDER ITS DECISION. FAILURE BY DISTRICT TO RENDER ITS DECISION WITHIN THIRTY (30) DAYS SHALL BE bEEMED A REJECTION OF THE PROTEST AND RATIFICATION OF DISTRICTS INITIAL DECISION. ARTICLE. }~ - ~gENTRy BY DiSTRICT"WiTHOGT TERMINATION "~., REENTRY. IF LESSEE IS IN DEFAULT OR BREACH OF ANY OF THE " {RMs, COVENANTS,.OR CONDITIONS OF THIS LEASE OR IF LESSEE ABANDONS JR'LEASED PREMISES, THEN DISTRICT, IN'ADDITION TO ANY OTHER RIGHTS OR .£MEDIES TO WHICH IT MAY BE ENTITLED, INSTEAD OF SENDING A NOTICE OF INTENTION TO TERMINATE AS PROVIDED IN ARTICLE'XVIII - DEFAULT OR ~REACH, MAY ~END A NOTICE OF INTENTION TO REENTER, THENTY' (ZO} DAY~ 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 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 PROCEEDINSS OR PURSUANT TO ANY NOTICE PROVIDED BY LAW, iOR 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, RELET THE i 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 SUCH OTHER TERMS AND CONDITIONS AS DISTRICT IN ITS SOLE DISCRETION MAY DEEM ADVISABL~ ~ITH 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 ADDI'TION TO THOSE REQUIRED BY THIS LEASE TO B.E PERFORMED BY LESSEE SHALL BE SUBJECT TO PRIOR WRITTEN CONSENT OF ENCUMBRANCE HOLDER. C. RENTALS. SHOULD DISTRICT UPO~ 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 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 SUMS DURING THAT PERIOD. DISTRICT MAY COLLECT THE SUMS AND MAY ALSO-BRING ACTION FOE THE RECOVERY OF SUMS DIRECTLY FROM SUCH OBLIGORS. DISTRICT SHALL RECEIVE AND COLLECT SUCH.SUMS (SU~RENTS AND OTHER SUMS FALLING DUE FROM SUBTENANTS), APPLYING THEM EXCEPT AS OTHERWISE ORDERED BY A COURT OR OTHER REGULATING BODY HAVING JURISDICTION OVER THE SUBJECT "'--'AT TER: 1. .FIRST, TO THECPAYMENT OF'ANY INDEBTEDNESS OTHER THAN RENT DUE ~EREUNDER FROM LESSEE TO DISTRICT. % , , Z. 'SECOND,. TO THE PAYMENT OF ANY COSTS AND EXPENSES OF SUCH [LETTING AND ANY' ALTERATIONS OR REPAIRS REQUIRED THEREFOR. ~ 3. THIRD, TO THE PAYMENT OF RENT DUE-AND UNPAID BY LESSEE HEREUNDER, 4. .FOURTH, 'TO ANY DELINQUENT PAYMENTS DUE UNDER THE LOAN AND UNPAID BY' LESSEE TO ENCUNBRANC.E HOLDER. I 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 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 RE 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 BALANCES ~ BOTH., OR ANY INSTAELMENT OR INSTALLMENTS OF THEM, EITHER BEFORE OR .~?TER EXPIRATION OF'THE TERM OF THIS LEASE, BUT THE PERIOD OF LIMITATIPNS 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 THEREOF BE DECREED BY A COURT OF CO~F'ETENT JURiSDiCTION, NOT~!iTHSTANDING ANY SUCH'REENTRY ~ITHOUT TERMINATION, DISTRICT MAY, AT ANY TIME THEREAFTER, ELECT TO TERMINATE THIS LEASE FOR ANY SUCH.PREVIOUS DEFAULT, BREACH, OR ABANDONMENT BY --[SSEE BY SENDING ITS NOTICE OF INTENTION TO TERi~INATE~TO LESSEE AND ~ E~CUMBRANCE HOLDER. ANY TERMINATION OF THIS LEASE AS HEREIN- ~,...~OVIDED SHALL NOT RELIEVE LESSEE FROM THE PAYHENT OF ANY SUM OR SUMS THAT SHALL THEN BE DUE AND PAYABLE TO DISTRIC~ HEREUNDER, OR ANY CLAIM ANY SUCH TERMINATI'ON NOT PREVENT DISTRICT ENFORCING PAYMENT OF ANY SUCH SUM OR SUMS OR CLAIM FOR DAMAGES'BY ANY REMEDY PROVIDED FOR.BY [Afl, OR'FROM RECOVERING DAMAGES FROM LESSEE FOR ANY DEFAULT OR BREAC~ THEREUNDER. ..... "E. ~UMULATI~E RIGU~. 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 IN THIS ARTICLE OTHERWISE PROVIDED, AND DISTRICT SHALL HAVE THE RIGHT TO.PURSUE ANY ONE OR ALL.OF SUCH REMEDIES OR ANY ~THER'REMEDY OR RELIEF WHICH NO~ IS OR MAY HEREAFTER BE.PROVIbED.BY LAW~-WHETHER 'OR NOT STATED IN 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 ESTOPPED TO ASSERT SUCH RIGHT OR RIGHTS AS ANY REASONABLE TIME AFTER DISTRICT HAS KNOWLEDGE OF' A BREACH OR.DEFAULT. B. NO 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 ,"')NSTITUTE A WAIVER OF ANY PRECEDING DEFAULT BY LESSEE OTHER THAN A [FAULT IN THE PAYMENT OF THE PARTICULAR RENTAL PAYMENT SO ACCEPTED, L .~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 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 LOTS AND PAINTING OF EQUIPMENT 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 iCLAIMING JURISDICTION; .* Z. ALL THEIR RESPECTIVE DEPARTMENTS~ £~UREAUS AND OFFICIALS,l 3.. .THE INSURANCE UNDERWRITING BOARD OR INSURANCE INSPECTION -30- ~UREAU HAVING· OR CLAI~G JURISDICTION; · ., ~4. ALL INSURANCE COMPANIES INSURING ALL OR ANY PART OF THE LEASEWOLD PREMISES OR IMRROVEMENTS, INSTALLATIONS, CR FACILITIES. LESSEE' SHALL, HOWEVER, HAVE THE RIGHT TO CONTEST THE ABOVE ORDERS IN r~HE .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 IMPROVMENT~, 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 SHALl. BE EQUAL .IN VALUE, QUALITY AND USE TO THE CONDITION OF THE IMPROVEMENTS BEFORE THE EVENT GIVING RISE TO THE MURK, EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY IN THIS LEASE. B. "MAJOR" AND "MINOR" REPAIRS. FOR THE PURPOSE OF THIS LEASE, WHEREE~'ER USED, THE FOLLOWING WJRKa SHALL' HAVE THE I4EANINGS 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 14ECHANICS LIEN ,,WS IN EFFECT AT THE TIME THE WORK IS COMMENCED OR ANY DEMOLITION OR Y REMOVAL OF EXISTING IMPROVENENiS'OR PARTS OF IMPROYEMENTS AS WELL ! : FOR PREPARATION, CONSTRUCTION, AND COMPLETION OF ALL NEW 'I~PROYEMENTS OR PARTS OF IMPROVEMENTS. 2. "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 T~NTY-FIVE (~5%) PERCENT OF THE VALUE OF THE THEN CURRENT IMPROVEMENTS. 4. "MAJOR REPAIR'' MEANS ANY REPAIRS,~ ALTERATIONS, INSTALLATION~ OR ADDITIONS WHICH ARE NOT DEFINED AS "MINOR REPAIR". C. APPROVALS_~Y DISTRICT. FOR ALL REPAIRS, LESSEE SHALL COMPLY WITH EACH AND EVERY CONDiTiON FOR CONSTRUCTION PROVIDED FOR IN THiS LEASE; HOWEVER, FOR ANY EEF'AiRS TO THE INTERIOR OF STRUCTURES,- AND FO~ MINOR REPAIRS FOR WHICH THE CONSTRUCTION COST DOES NOT EXCEED T~ENTY THOUSAND DOLLARS ($20,000.00), IN 1985, INCREASED YEARLY BY THE CONSUMER P~CE iNDEX FOR'THE METROPOLITAN SAN FRANCISCO ~AY AREA· DISTRICT MAY RELEASE FROM ANY SUCH CONDITION ONLY UPON PRIOR WRITTEN ~,.EQUEST FOR RELEASE FROM CONST~UCTI~AN CONDITIONS .SETTI~G FORTH EACH ANV EVERY coNDITION WHICH'LESSEE ~EEKS ~ELE~I~E. D.'' ~AILURE BY LESSEE. IF, AT ANY TIME DURING THE TERM OF THiS LEASE, LESSEE'FAILS TO MAKE NECESSARY REPAIRS OR TO MAINTAIN THE LEASE~ ~REMiSES, AFTER RECEIVING A WRITTEN DEMAND UNDER THE PROVISIONS .P--E ARTICLE XIX - CLAIMS AND PROTEST, THE BOARD. OF HARBOR COMMISSIONERS kY AUTHORIZE DISTRICT TO MADE OR CAUSE' TO BE MADE SUCH REPAIRS OR tINTAINANCE AND THE COST THEREOF SHALL BE DEEMED TO BE A PAYMENT DUE 'ulSTRICT 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.' ARTICLE. XXIII' - RIGHT OF ENTRY BY FPUBLIC ENTITIE~ 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, IHOWEVER, .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 PUBLI-C OTIL.ITY ?)MPANY OR DISTRICT TO RUN GAS, WATER, SEWER, ELECTRIC OR TELEPHONE i ~NDUCTORS, PIPES, CONDUITS, OR DUCTWORK WHERE NECESSARY OR DESIRABLE 'U~ER, UNDER, OR THROUGH THE LEASED PREMISES IN A MANNER WHICH WILL'NOT UNREASONABLY INTERFERE WITH THE LESSEE'S USE'OF ~HE LEASED PREMISES. ARTICLE XXIV - DESTRUCTION A. IF A TOTAL DESTRUCTION (THE RENDERING TOTALLY UNUSA'BLE OF FIFTY PERCENT (507.), 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 XXII - MAINTENANCE AND ~EF'AIR; 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 DISTRICT' SENDING ~';RITTEN NOTICE OF CAN.CELLATION .~ITHIN THRITY (30) DAYS OF SUCH DESTRUCT I)]N. ~. DURING A .PARTIAL DESTRUCTION OR TOTAL DESTRUCTION, ONLY AS TO THAT PORT!ON OF THE LEASED PREMISES ACTUALLY DESTROS'ED AND ONLY DURING SUCH 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 LESSEE BEFORE THE DESTRUCTION TO THOSE. AVAILABLE i ~ LESSEE AFTER THE DESTRUCTION. PROVI'~ED HOWEVER~ IN NO EVENT SHALL "idE MINI~U~I ANNUAL RENT BE LESS THAN ONE-HALF OF THE AMOUNT OF THE THEN CURRENT MINIMUM ANNUAL RENT.. .THE~E SHALL BE NO PRORATION OF PERCENTAG~S OF.GROSS RECEIF'TS IF ~THERE IS EITHER A PARTIAL DESTRUCTION OR TC'~AL DESTRUCTION. . C. IF ANy. OF THE LESSEE-OWNED IMPROVEHENTS ARE DAMAGED OR ~-~-.:S~ROYED BY ANY CASUALTY NOT .CE~NTEMPLATED BY THE INSURANCE PROVISIONS ' THIS LEASE, DISTRICT SHALL NOT BE LIABLE FOR DAMAGES OR OTHERWISE ,. jR 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.' HOI~EVER, IN THE EVENT LESSEE WISHES TO' REP~UILD UTILIZING NEW FINANCINg, 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 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 PREMISES BY LESSEE 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, LESSEEISHALL, WITHIN SIXTY (60) DAYS, AT ITS OWN EXPENSE, REMOVE ALL MOVABLE IMPROVEMENTS AND INSTALLATIONS OF ANY KIND OWNED OR ~LACED ON' tE LEASED PREMISES BY LESSEE, AND SHALL LEAVE THE LEASED PREMISES IN JBSTANTIAL[Y THE SAME'CONDITION AS WHEN FIRST OCCUPIED BY LESSEE. i..,3VABLE 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, IMPROVEMENTS AND FACILITIES CONSTRUCTED OR PLACED WITHIN ~HE LEASED PREMISES BY LESSEE~ WHICH ATTACHED OR FASTENED TO THE GROUND OR DECK OR FLOOR OFf A STRUCTURE ON THE DATE OF TERMINATION SHALL ~ECOME 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 I(OVABLE 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 KOVABLE IMPROVEMENTS~AND .I~STALLATIONS ON THE LEASED PREMISES, AND LESSEE SHALL, PAY'TO DISTRICT aE REASONABLE AND ACTUAL COST OF ANY SUCH REMOVAL, SALE OR -33- DESTRUCTION, 'IN EXCES~F 'ANY CONSIDERATION RECEDED BY DISTRICT AS A RESULT O~ SAID SALE, REMOVAL O.R. DEMOLITION. ARTICLE XXVI - CONDEMNATION '- · ~.' UPON. RECEIPT OF ANY NOTICE THAT CONDEMNATION PROCEEDINGS ARE ] BE INSTITUTED OR UPON SERVICE OF PROCESS IN ANY CONDEMNATION .... ~OCEEDING, LESSEE AND LENDER SHALL .BE IMMEDIATELY NOTIFIED IN WRITING AND'WITHIN TWENTY .(20) 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'~ONDEMNATION. B'. '.UPON 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 SHAEL 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 DISTRICT'S WRITTEN CONSENT. BONUS VALUE IS DEFINED AS THE E~CESS OF F"~IR RENTAL VALUE OVER CONTRACT RENT. ~ .. 2. PARTIAL TAKE LEAVING REMAINDER UNUSABLE ~OR LEASEHOLD' ~POSE. 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 COMP.ENSATION 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 I'NSTALLED BY LESSEE ON THE PART TAKEN WITH THE DISTRICT'S WRITTEN 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 RENTAL VALUE FROM AND AFTER THE DATE OF TRANSFER OF TITLE OR POSSESSION, WITH RESULTING ADJUSTMENT OF THE SECURITY DEFOSIT. C. LESSEE DIUST GIVE NOTICE TO LESSOR OF ANY OF THE ABOVE ELECTION~ WITHIN. FORTY-FIVE (45) DAYS AFTER OBTAINING KNOWLEDGE OF THE I~IPENDING ACQUISITION. 1. LESSEE WILL BE DEEMED~TO HAVE KNOWLEDGE ~F THE IMPENDING NEGOTIATIONS WITH THE CONDEMNING ~ .... CQUISiTION ON HIS ENTRY INTO ~i GENCY'S REPRESENTATIVES, ON RECEIPT OF SERVICE OF COMPLAINT AND ~B.O,~, OR OAf',ER FOR IMMEDIATE POSSESSION~ OR ON RECEIPT OF A LETTER -[:F INQUIRY FRO~ THE DISTRICT ADVISING LESSEE OF THE IMPEN~IN~ -34- ~ -- ACQUISITION AND REQUE~I!~ING NOTICE OF LESSEE'S RE~_TING ELECTIONS AND CONTENTIONS. .LENDER AND LESSEE HA~E T,E RIGHT TO PARTICIPATE IN ANY AND ALL,~A~PECTS OF THE CONDEMNATION PROCEEDINGS. · Z. LESSEE'S'NOTICE SHALL CONTAIN A CLEAR AND UNEQUIVOCAL ' FAT~EMENT OF HIS ELECTION UNDER SUBPARAGRAPH B ABOVE, REASONS FOR THIS .ECTION, LESSEE'S CONTENTION OF COMPENSATION, 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 THE~ 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 SHALL 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 - cApTIONS. THE TITLE OF HEADINGS OF THE ARTICLES AND SUBARTICLES OF THIs LEASE F E NOT A PART OF THIS LEASE AND SHALL HAVE NO EFFECT UPON THE NSTRUCTION OR INTERPRETATION OF ANY PART THEREOF. ARTICLE XXVIII - ~INGS 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 - LIMITAT~ION OF LEASEHOLD 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 ~HOSE ~HICH 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'XX - FORCE MAJEURE IF EITHER PARTY HERETO SHALL BE DELAYED OR PREVENTED FROM THE PERFORMANCE OF ANY ACT REQUIRED HEREUNDER BY REASON OF ACTS OF GOD, F'"ESTRICTIVE GOVERNMENTAL LA~'~S OR REGULATIONS, OR OTHER~CAUSE WITHOUT AULT AND BEYOND THE CONTROL OF THE PARTY OBLIGAiED, FINANCIAL ~'NAE:ILITY EXCEPTED, PERFORHANCE OF SUCH ACTS SHALL BE EXCUSED FOR THE PERIOD OF THE DELAY, AND THE PERIOD FOR THE PERFORMANCE OF ANY SUCH -35- v_.z ~J ACTS SHALL BE EXTENDE OR A PER.IOq EQUIVALENT. PERIOD OF SUCH DELAY. .~E~THING IN THIS CLAUSE, HOWEVER, SHALL EXCUSE LESSEE FROM THE PROMPt, PAYMENT OF ANY RENTAL OR OTHER CHARGE REQUIRED BY LESSEE~ E%CEP) ~S MAY BE EXPRESSLY PROVIDED ELSEWHERE IN THIS ARTICLE. ~--"~TI~LE XXXI - HOLDING 'iN.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 GOVERNED.BY THE TERMS, CONDITIONS AND COVENANTS CONTAINED IN'THIS LEASE. . ARTICLE XXX!I - 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 TERMINATI'ON 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 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 NFUL MANNER. ,. ~TICLE XXXII.I - AMENDMENTS .. THIS'LEASE SETS FORTH ALL THE AGREEMENTS AND UNDERSTANDINGS OF THE PARTIES, AND ANY MODIFICATIONS MUST BE IN WRITING. ARTICLE XXXIV - TIME TIME IS OF THE ESSENCE OF. THIS LEASE. ARTICLE XXXV - UTILITIES MAIN UTILITY LINES,.'iNCUDING SEWER, WATER, GAS,~ TELEPHONE'AND ELECTRICITY TO THE DEVELOPMENT OF WHICH THE LEASED PARCEL IS i PORTION, SHALL BE CONSTRUCTED BY DISTRICT. CONSTRUCTION OF UTILTIES WITHIN THE LEASED PREMISES SHALL BE THE RESpGNSIBILITY OF LESSEE. DISTRICT RESERVES THE RIGHT TO EXTEND ANY MAIN UTILITY LINE CONSTRUCTED BY THE LESSEE FRO~.THE LEASED PREMISES FOR THE CONVENIENCE OF THE DISTRICT OR OTHER LESSEES OF THE DISTRICT. ARTICLE XXXVI - ANTI-DISCRIMINATION ..i..ESSEE AND/OR ITS SUBTENANTS SHALL NOT DISCRIMINATE AGAINST ]ANY MEMBER ~ THE PUBLIC UTILIZING LESSEES (OR SUBTENTANTS) SERVICES OR ~CILITIES, OR AGAINST ANY EMPLOYEE OR APPLICANT FOR EMPLOYMENT~ :~;ECA~SE OF AGE, RACE, RELIGION, COLOR, CREED, NATIONAL ORIGIN, ANCESTRY, SEX, OR SEXUAL PREFERENCE. THE LESSEE SH~LL TAKE AFFIRMATIVE ACTIONS T SURE THAT .APP%ICAN.o AR MPI-oYED AND THAT E[~PLOYEE~ARE 'TREATED, DURING EMPLOYMENT~ WITHOUT REGARD TO THEIR AGE, RACE, ~LIGIONj COLOR, CREED~ NATIONAL ORIGIN', ANCESTRY, SEX OR SEXUAL PREFERENCE, WITH THE GOAL THAT THE ETHNIC COMPOSITION OF THE POPULATION .OF THE.DISTRICT. SUCH ACTION SHALL INCLUDE, BUT NOT IMI~ED TO, EMPLOYMENT.~ UPGRADING,' DEMO.TION OR TRANFER, RECRUITMENT, ,YOFF OR TERMINATION, RATE OF PAY OR OTHER FORMS OF COMPENSATION AND . .:LECTION FOR TRAINING. LESSEE SHALL COMPLY WITH THE EQU~L OPPORTUNITY REQUIREMENTS OF.EXECUTIVE ORDER 11Z~6, TITLE VII~ OF THE CIVIL RIGHTS ACT OF 19~4, THE CALIFORNIA FA'IR EMPLOYMENT PRACTICE ACT, AND OTHER FEDERAL, 'STATE,, MUNICIPAL OR DISTR~CT LAWS.OR ORDINANCES RELATING TO EQUAL EMPLOYMENT OPPORTUNITY 'LESSEE AGREES TO. SUB~IT ANY CERTIFICATE OF COMPLIANCE WITH SAID STATUTORY PROVISIONS UPON DEMAND BY DISTRICT. -- FAILURE.~O.COMPLY WITH THIS.ARTICLE SHALL CONSTITUTE A ~REACH OF' THE'LEASE, FOR WHICH THE LEASE MAY BE TERMINATED IN ACCORDANCE WITH THE PROVI'SIONS 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 DISTRIC~ I~80"(EXH'IBIT B), WHICH HAS HERETOFORE BEEN INCORPORATED AND MADE A PART OF THIS L~ASE, SHALL BE APPLICABLE TO 'THE TERMS'AND PROVISIONS HEREOF. ARTICLE. XXXVI.II - 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 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, ~HE 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 ACTION IF LEGAL ACTION IS INSTITUTED TO ENFORCE THIS LEASE OR IS BASED UPON ANY CLAIM ARISING OUT OF OR PURSUANT TO THE'TE~MS OE THIS, THEN THE PREVAILING P~RTY IN SAID LITIGATION SHALL BE AWARDED REASONABLE ATTORNEY'S FEES AND COSTS OF SUIT. ARTICLE XXXX - NOTICES'. NOTICES R~QUIRED HEREUNDER SHALL BE DEEI~EO TO HAVE' ~EEN RECEIVED WHEN ACKNO[~LEDGED TO BE RECEIVED BY RECIPIENT EITRER THROUGH SIGNATURE OR REGISTERED, CERTIFIED, EXPRESS MAIL OR DELIVERY SERVICE OR ~HEN PERSONALLY DELIVERED TO A REPEESENTATIYE OF THE PARTY.~ % -37- 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 "f. essor" or "District," a. nd OYSTER POINT VILLAGE .ASSOCIATES, INC., a California corporation, hereinafter 'called "Lessee." . The parties agree that: ARTICLE I - LEASE DOCUMENTS. This lease includes these specific provisions together with the attached General Conditions and. the following documents, which 'are also attached 'hereto and all are made a part hereof: A. Exhibit A: Legal description and drawing of Parcel D (also known 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 Marco County Harbor District - 1980." C. The booklet entitled "Oyster Point Marina Specific Plan, 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. District hereby leases to Lessea and Lessee hereby rents from District the property located in the City of South San Francisco, County of San Marco, State of California, described as follows: The premises described in Exhibit A known as Parcel D, located at Oyster Point Marina/Park, South San Francisco, California, consisting of approximately 4.887 acres of land. ARTICLE III - TERM. .The term of this lease .shall be twenty-five (25) years, commencing on t~% first day of the calendar montH-f~ll~w~ngJthe day o~ execution of this Lease by District, However, Lessee has the gption, 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, With respect to Parcel D, in conjunction with the lease on ParCel B, but not conditioned upon said other lease, Lessee shall develop, construct, and operate (or cause to be con- structed and/or operated) a commercial, village-style complex, the. Parcel D portion of which 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 minimum space of 6,000 square feet, parking for a minimum of eighty-eight (88) cars and landscaping, and shall include, if not already a substantial part of the on-going ~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 terms of the 'Oyster Point .Marina SpeCific Plan, attached hereto as Exhibit C. Lessee shal.1 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 ~ackle shop. A. Lessee shall provide on premises all equipment required· for the said facilities. B. No other uses are permitted except with the prior written consent of the District. PRICES. the leased operation of ARTICLE V - OPERATING SCHEDULE AND CONTROLLED A. Operating Schedule. Except as otherwise by District in advance of execution of this approved Lease, and in writing, beginning on t~e date the facil- ities are first .offered for use by the general public, all of the' non-office uses and services specified in. 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 e~ch week of z 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 all goods or services or combinations thereof suppli~d to the public on or f=om 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 krom 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]. 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}~NT AND 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~llation. B. In 'addition to maintenance End .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 .-RegionaI Water Control Board· C. All design and construction shall conform with the requirements as set forth in the Design t~ria booklet adopted by District., attached here=o Exhibit B, and all applicable codes and ordinances including but not limited to, District, City, State' and Federal'· Construction shall be within three hundred sixty (360) days after executi~ this' Lease or as otherwise approved in wrf=~ District during the option period preceding execut~ ~f this Lease, or as agreed in writing, thereafter- construction schedule shall follow the requiremen~sjef the Design Criteria, Exhibit B, however, said structton may be in two (2) phases, with co=9 dates no later than November 30, 1986, and November 1987, respectively. Construction and related costs on that portion of the complex required ~n lease shall not be less than Three Million Si~ Bundred EiEhty-Five Thousand and N0/100 Dollars ($3,6~5,000'00)' 5 F ARTICLE VII - LEASE RENTS AND GROSS RECEIPTS. Lessee Shali 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. For the first five (5) years of the lease term, ~he minimum a~nual rent shall' be in accordance with the following schedule: Year Rent i $12,07.5.00 2 $24,150.00 3 $48,300.00 4 $48,300.00 5 $48,300.00 After the fifth (5th) year of the lease term, the minimum annual rent shall be adjusted in accordance with the provisions of Article V of the General Conditions of this Lease. B. follows, herein~ Percentage Rent. l. 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 Mateo County Harbor District Ordinance Code §3.803 and as exceed the minimum annual rent set forth Business Sale of food and non-alcoholic beverages sold in restaurants and coffee shop, fast food sales ~ercentage 6 I and delicatessen. 3% Sale of alcoholic beverages (when connected with food sales or through a package liquor store). 3Z Sale of alcoholic beverages (as separate bar). 5% Boat sales. lZ Rental of meeting rooms. Chandlery. 5% 5% All other sales. Rental for subleased office space not involving retail sales. 5% through end of 9th year 8% through end of 25th year 1.0% thereafter 2. Gross receipts are the gross income derived, received, or charged 5y 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 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 credit, whether or not payment is actually receipts shall include, without Deposits not refunde~;. 7 GROSS or charges on made. limitation, all: b. Orders taken on or from the leased premises 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 the occu- pied space at the leased premises by long distance communication and whether initiated, performed, or · .completed at another location; d.. Considerations received by Lessee for value directly from customers, and from .~ubtenants, including 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 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 ma7 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 personal for sales taxes; by employees benefit; b. luxury Gratuities such as. "tips" of Lessee or subtenant for their Ail sums collected a~d paid out 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 from customers and paid by Lessee or subtenant; 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 cons~mmating a sale previously made 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; Merchandise returned to ship- pets or manufacturers; e. All 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; g. 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 subtengnt not in the ordinary course of business and subject to prior written approval of District; 9 generally accepted i. Any income or receipts., under 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 from 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 ~ssee 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 to 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 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. Minimum annual rent (adjusted or unadjusted) shall be due and payable-in advance in equal monthly installments on or ~efore first day of ea¢h month of the term of this Lease. the 10 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 minimumannuaI rent for said quarter and the percentage rent for said quarter shall be due 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 t~e 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· All notices and cor, munications 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 C. To Encumbrance Holder at such address and to such person as it shall designate to District in writing. D. Any party, may designate a different address by giving notice as set ~orth in this Article. E. All notice's and co~aunications referred to herein shall be deemed given on the fifth (Sth) day following mailing if given in accordance with this Article. F. If Lessee is not a resident of'the 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 date of the original term, upon the the ~xpiration same te~,¥,s and 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 notice of exercise of said option is received by the 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 ~overns 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 .~he 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 Marina/Park premises for a term which exceeds the termination of the Joint Powers Agreement, which is currently November 10, 2026. Therefore, if it is determined that the City's approval is required fOr this lease to extend a full fifty (50) years ~(including option to renew), and the City of South San Francisco has reused to give their ~proval of the terms of this lease, the te~-~ of this lease shall automatically be modified to end on Nove~er 10, 2026. ARTICLE X - ~PROV~ BY DEPARTMENT OF BOATING AND"WA~RWAYS. Award of this 'Lease by District. s~Ject to the f~al approval by the Califo~ia Depart-. ment of Boat~g and Waterways ("Cai-Boating"), and award of this Lease by District shall become final only after 'award has been approved by said Depar~ent. If 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 ~ ' (Co.orate Resolution Attached) DISTRICT S~ ~TEO CO~TY I~RBOR DISTRICT Dated: Ronald D. McClellan General Manager of The foregoing Lease is approved this , 1984. day STATE OF CALIFORNIA DEPARTMENT OF BOATING AND WATERWAYS · 14 STATE OF CALIFORNIA ) COUNTY OF SAN MATEO ) N~.~ar~ Publ%~. ~r~nally appeared ~ ~ ~ ~/~Z ~/~ , ~.o~ to ~ to ~e ~tr~et, ~ point,cai ~ubd~v~on of - the 8~ate of California, and kno~ to ~ to b~ the p~rson who exe- cuted the within instment on behalf of the said .political subdivision, and acknowledged to me that such political subdivision executed the s~e. / ; 7 STATE OF CALIFORNIA ) ) COUNTY OF SAN MATEO ) known to me .~o_ be ~'~./~f/f// of the ~g'~T'~ ~.,~/'- ~/~ ~~,~. that executed the within-{nstru- ment, and the p~rson who executed ~he wighiD instr~ent on behalf of the ~~. ~~~~~ named h~rein, and acknowledmed to me that said _(~~. ~~~~xecuted the same. SEAL 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 lease on 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: '/r y s_- ~/ ic ard ,ertolina ..... R~ Su-.per o j~ .'"?:?i":'." v'--- :- . /7,"':>" "" ' % ', · i ", -, '% · ~ ,,' - ~fer Poi0f ~lloge ~i~es, Incor~t~ ~670 Pine ~eef, ~n ~onci 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. 2. 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 Mateo 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 fa~t, 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. ~eremy W~rs Naplo. ha