HomeMy WebLinkAbout2010 CON CDC San Diego Port District - Lease National City Aquatic & Education CenterNOTE TO FILE
01-19-11
IN THE MATTER OF: Resolution of the CDC of the City of
National City authorizing the Chairman to execute a 30-year
Lease Agreement with the San Diego Unified Port District for
property in Pepper Park for the construction of the National
City Aquatic and Education Center. Please note the
following:
A FULLY EXECUTED ORIGINAL AGREEMENT WAS
NEVER FILED WITH THE OFFICE OF THE CITY CLERK
ORIGINATING DEPARTMENT: X CDC Housing & Grants
City Attorney _ Human Resources
City Manager _ MIS
_ Community Svcs. _ Planning
_ Engineering Police
Finance Public Works
Fire
NTF
SAN DIEGO UNIFIED PORT DISTRICT
LEASE TO
COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY
OF PROPERTY LOCATED AT
GOESNO PLACE
NATIONAL CITY, CALIFORNIA
FOR THIRTY (30) YEARS
COMMENCING January 1, 2011
AND ENDING December 31, 2040
TABLE OF CONTENTS
Paragraph/Exhibit Page Number
1. TERM 1
2. USE 1
3. RENT 1
4. IMPROVEMENTS 2
5. CONSTRUCTION OF IMPROVEMENTS 3
6. TITLE TO IMPROVEMENTS 4
7. LIENS 5
8. LEASE ENCUMBRANCE 5
9. ASSIGNMENT - SUBLEASE 10
10. DEFAULTS AND REMEDIES 11
11. BANKRUPTCY 15
12. EMINENT DOMAIN 15
13. TERMINATION OF PRIOR AGREEMENTS 15
14. USE OBLIGATION 15
15. MAINTENANCE AND REPAIR 15
16. PERFORMANCE BOND 16
17. TAXES AND UTILITIES 16
18. CONFORMANCE WITH LAWS AND REGULATIONS 17
19. EQUAL EMPLOYMENT OPPORTUNITY AND NON-DISCRIMINATION 17
20. NONDISCRIMINATION 18
21. PARTIAL INVALIDITY 18
22. HOLD HARMLESS 18
23. SUCCESSORS IN INTEREST 18
24. EASEMENTS 18
25. TITLE OF LESSOR 19
26. INSURANCE 19
27. POLICY OF LESSOR 22
28. WARRANTIES -GUARANTEES -COVENANTS 22
29. DAMAGE TO OR DESTRUCTION OF LEASED PREMISES 22
30. QUITCLAIM OF LESSEE'S INTEREST UPON TERMINATION 22
31. PEACEABLE SURRENDER 23
32. WAIVER 23
33. HOLDOVER 23
34. SECTION HEADINGS 23
35. ENTIRE UNDERSTANDING 23
36. TIME IS OF THE ESSENCE 24
37. NOTICES 24
38. REMOVAL OF MATERIALS 24
39. ACCEPTANCE OF LEASED PREMISES 25
40. WASTE/NUISANCE 25
41. NUMBER AND GENDER 25
42. APPLICABLE LAW 25
43. ATTORNEY'S FEES 25
44. HAZARDOUS MATERIALS 25
45. STORAGE TANKS 28
46. ENVIRONMENTAL DISCLOSURES 29
47. AS -IS LEASE AND WAIVERS 30
48. JOINT AND SEVERAL LIABILITY 33
49. ACKNOWLEDGMENT OF LESSOR'S IMPROVEMENTS 33
50. DISPUTE RESOLUTION 33
51. ABSTRACT OF LEASE 35
Exhibit "A"
Exhibit "B"
ii
LEASE
THIS LEASE, made and entered into this day of
20 , between the SAN DIEGO UNIFIED PORT DISTRICT, a public corporation,
hereinafter "Lessor," and COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
NATIONAL CITY, a community development commission, hereinafter "Lessee,"
WITNESSETH:
Lessor, for the consideration hereinafter set forth, hereby leases to Lessee for the term and
upon the conditions hereinafter set forth, a portion of those lands conveyed to the
San Diego Unified Port District by that certain Act of the Legislature of the State of
California entitled "San Diego Unified Port District Act," Stats. 1962, 1st Ex. Sess., c. 67, as
amended, which lands are more particularly described as follows:
Approximately 8,412 square feet of land area located at south end of Goesno
Place in National City, California, hereinafter "Leased Premises", more
particularly described and delineated on attached Drawing No. 028-025 dated
September 12, 2008 and marked as Exhibits "A" and "B", attached hereto and
by this reference made a part hereof.
TO HAVE AND TO HOLD said Leased Premises for the term of the Lease and upon the
conditions as follows:
1. TERM: The term of the Lease shall be for a period of thirty (30) years, commencing
on the 1st day of January, 2011, hereinafter called the "Commencement Date," and ending
on the 31st day of December, 2040, hereinafter called the "Termination Date," unless
sooner terminated as herein provided. Provided however on the mutual agreement of the
parties, Lessee shall, however, have the option to extend this Lease for one, five (5) year
term.
2. USE: Lessee agrees that the Leased Premises shall be used only and exclusively
for an aquatic and recreational center and for no other purposes whatsoever.
This restriction on use of the Leased Premises absolutely prohibits a change in use.
3. RENT: Consideration is primarily the benefit to Lessor and the people of the state of
California of having Lessee agrees to pay to Lessor rent in accordance with the following:
(a) The rent for this Lease shall be the sum of One Dollar ($1.00) per year. per year.
Said rent shall be payable in advance on or before the first (1st) day of the first (1st)
month of each calendar year. It is acknowledged that the use provided herein is a
public benefit and is further consideration for this agreement.
(b) All payments shall be delivered to Lessor's Treasurer. Checks shall be made
payable to the San Diego Unified Port District and mailed to the Treasurer's Office,
San Diego Unified Port District, Post Office Box 120488, San Diego, California
92112-0488, or delivered to the Treasurer's Office, San Diego Unified Port District,
3165 Pacific Highway, San Diego, California. Lessor may change the designated
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place of payment and filing at any time upon ten (10) days' written notice to Lessee.
Lessee assumes all risk of loss and responsibility for late charges, as herein
described, if payments are made by mail.
(c) All payments by Lessee to Lessor shall be by a good and sufficient check.
No payment made by Lessee or receipt or acceptance by Lessor of a lesser amount
than the correct amount of rent due under this Lease shall be deemed to be other
than a payment on account of the earliest rent due hereunder, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment be deemed an accord and satisfaction, and Lessor may accept such check
or payment without prejudice to Lessor's right to recover the balance or pursue any
other available remedy.
4. IMPROVEMENTS:
In accordance with the procedures described herein, Lessee may, at its own expense,
make alterations or changes, or cause to be made, built, installed, or removed any
structures, machines, appliances, utilities, signs, or other improvements necessary or
desirable for the authorized use of the Leased Premises. Provided, however, said work
shall be in accordance with plans and specifications, including but not limited to working
drawings, hereinafter "Plans," previously submitted to and approved in writing by Lessor.
No construction, installation, or removal of any improvement upon the Leased Premises
shall commence without Lessor's prior written approval. All construction, installations, and
removals shall be in accordance with Plans submitted to and approved in writing by Lessor
prior to the commencement of any such work. All Plans are subject to changes as may be
approved by Lessor, in Lessor's sole discretion. Further, all work shall be in accordance
with all applicable laws, regulations, ordinances, and codes.
Notwithstanding the foregoing, within the interior of any enclosed building structure, and
without Lessor's prior consent, Lessee shall have the right to install and/or remove
machines, equipment, appliances, and trade fixtures that are necessary or desirable for the
authorized use of the Leased Premises.
When required by Lessor, Lessee shall, at its sole cost and expense, pave or landscape the
entire portion of the Leased Premises not covered by structures. All paving and/or
landscaping shall be in accordance with Plans which must be submitted to and approved in
writing by Lessor prior to the commencement of any such paving and/or landscaping.
(e) Lessee shall notify Lessor prior to submitting application(s) to any governmental
regulatory agency for any development or construction permit or license pertaining to
the Leased Premises. Lessee shall also provide Lessor with a copy of all
application(s) within five (5) days of making said application(s), along with copies of
all Plans submitted as part of the application(s). Lessee shall also provide Lessor,
within ten (10) days of Lessee's receipt, a copy of all permits, licenses, or other
authorizations subsequently issued.
Lessee agrees that no banners, pennants, flags, spinners, or other advertising devices, nor
any temporary signs, shall be flown, installed, placed, or erected on the Leased Premises
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without Lessor's prior written consent.
5. CONSTRUCTION OF IMPROVEMENTS:
On or before December 31, 2012, Lessee shall provide evidence of financial capability and
commence the construction of and diligently proceed to completion, a aquatic and
recreation center, hereinafter "Project." The Project shall be substantially in accordance
with plans and specifications, including but not limited to working drawings, hereinafter
"Plans," previously approved in writing by Lessor, subject to changes thereto as may be
approved by Lessor, in Lessor's sole discretion. Said Plans, and any approved changes
thereto, are by this reference made a part hereof. Construction of the Project shall be
completed by no later than December 31, 2015. Provided, however, the commencement
and completion dates may be extended pursuant to Paragraph 5(e) herein. In the event of
any inconsistency between the Plans and the terms and conditions of this Lease, the terms
and conditions of this Lease shall prevail.
(b) Lessee shall, as a condition of this Lease, but not as a covenant, make an
investment in the Project improvements in an amount which shall exceed Two -
million One -Hundred Thirty-seven Thousand Five -hundred Sixty-one Dollars
($2,137,561), provided that funding is available for the project. Such investment is
qualification for the term of this Lease and is not a portion of the rent obligations
provided in Paragraph 3 herein. Further, neither such investment, nor such
improvements, nor any other Lessee investment or improvement shall be considered
by the parties hereto or any arbitrator (in the event of arbitration) in determining any
rent during the term of this Lease. It is agreed that the funding for the project
improvements is not to be provided by Lessee, but from outside sources, unless
Lessee determines to become the source of funding.
Investment in the Project improvements referenced in Paragraph 5(b) above shall
include an investment of not less than Twenty-one Thousand Three -hundred
Seventy-six Dollars ($21,376) in public artworks. No public artwork shall be
installed on the Leased Premises unless the written approval of the Lessor has been
granted. Acceptable forms of public artworks are described in Lessor's Board of
Port Commissioners' Policy No. 609 and include, but are not limited to, paintings,
sculptures, works of visual art, and artist -designed landscapes.
(d) Within sixty (60) days following completion of any substantial improvement within
the Leased Premises, but at not less than quarterly intervals, Lessee shall furnish
Lessor an itemized statement of the actual construction cost of such improvement.
The statement shall be sworn to and signed, under penalty of perjury, by Lessee or
its responsible agent.
Lessee shall maintain true, accurate, and complete records to support said
statement. Such records shall include, but are not limited to a general ledger,
vendor invoices, cancelled checks, construction loan documentation, agreements
with third -party contractors, and contractor progress payment billings. Additionally,
should Lessee perform any construction in-house, Lessee shall substantiate the
actual work performed by maintaining a payroll journal, copies of cancelled payroll
checks, and timecards or other payroll documents which show dates worked, hours
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worked, and pay rates.
Books and records herein required shall be maintained and made available either at
the Leased Premises or at such other location as is agreeable to Lessor.
Further, Lessor shall have the right at any and all reasonable times to examine and
audit said books and records without restriction for the purpose of determining the
accuracy thereof, and the accuracy of the aforesaid statement. In the event Lessee
does not make available the original books and records at the Leased Premises or
within the limits of San Diego County, Lessee agrees to pay all necessary expenses
incurred by Lessor in conducting an audit at the location where said books and
records are maintained.
(e) The time(s) during which Lessee's construction is delayed by acts of God, war,
invasion, rebellion, revolution, insurrection, riots, labor problems, unavailability of
materials, government intervention, or acts or omissions of Lessor, shall be added to
the times for the commencement and completion of construction established in
Paragraph 5(a) herein. Provided, however, in no event shall the period of excused
delay exceed 365 days in the aggregate.
(f)
Failure to comply with this Paragraph is a breach of this Lease and cause for
termination in accordance with Paragraph 10 herein.
6. TITLE TO IMPROVEMENTS: For the purpose of this Paragraph, "improvements"
shall include, but are not limited to subsurface improvements. On the Commencement Date
of this Lease, all existing structures, buildings, installations, and improvements located on
the Leased Premises are owned by and title thereto is vested in Lessee. All said existing
structures, buildings, installations, and improvements, as well as structures, buildings,
installations, and improvements of any kind placed on the Leased Premises by Lessee
subsequent to the Commencement Date of this Lease shall, at the option of Lessor, be
removed by Lessee at Lessee's expense. Lessor may exercise said option as to any or all
of the structures, buildings, installations, and improvements after the Termination Date or
sooner termination of this Lease. If Lessor exercises such option, Lessee shall remove
such structures, buildings, installations, and/or improvements within sixty (60) days after the
Termination Date of this Lease or sooner termination thereof, whichever occurs earlier.
Provided, however, Lessee agrees to repair any and all damage occasioned by their
removal. Title to any such structures, buildings, installations, and/or improvements not so
removed within said sixty (60) days shall vest in Lessor, at a cost of one -hundred ($100)
dollars paid to Lessee, except that Lessor shall have the right to have them removed and to
repair any and all damage occasioned by their removal, all at the expense of Lessee.
On the Commencement Date of this Lease, all existing machines, appliances, equipment,
trade fixtures, and portable public artworks (Le., artworks that are not architecturally
integrated into the structures and buildings and are capable of being removed and
transported to another location without being damaged) located on the Leased Premises
are owned by and title thereto is vested in Lessee. Furthermore, all machines, appliances,
equipment, trade fixtures, and portable public artworks placed on the Leased Premises by
Lessee subsequent to the Commencement Date of this Lease are owned by and title
thereto is vested in Lessee. All machines, appliances, equipment, trade fixtures, and
portable public artworks shall be removed by Lessee, at Lessee's expense, within sixty (60)
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days after the Termination Date of this Lease or sooner termination thereof, whichever
occurs earlier. Provided, however, Lessee agrees to repair any and all damage occasioned
by their removal.
Notwithstanding the foregoing, any machines, appliances, equipment, trade fixtures, and
portable public artworks placed on the Leased Premises by Lessee as qualification for the
term of this Lease pursuant to Paragraph 5 herein, as well as portable public artworks
located on the Leased Premises on the Commencement Date of this Lease, may only be
removed by Lessee, at Lessor's option. If machines, appliances, equipment, trade fixtures,
and portable public artworks required by Lessor to be removed are not removed by Lessee
within sixty (60) days after the Termination Date of this Lease or sooner termination thereof,
whichever occurs earlier, the same may be considered abandoned and shall thereupon
become the property of Lessor, at a cost of one -hundred ($100) dollars paid to Lessee,
except that Lessor shall have the right to have them removed and to repair any and all
damage occasioned by their removal, all at the expense of Lessee.
During any period of time employed by Lessee under this Paragraph to remove structures,
buildings, installations, improvements, machines, appliances, equipment, trade fixtures, and
portable public artworks, Lessee shall continue to pay the full rent to Lessor in accordance
with this Lease, which said rent shall be prorated daily.
7. LIENS: Lessee shall defend, indemnify, and hold harmless Lessor against all claims
and liens for labor, services, or materials in connection with improvements, repairs, or
alterations made by Lessee or Lessee's sublessees, contractors, and agents on the Leased
Premises, and the costs of defending against such claims and liens, including reasonable
attorneys' fees.
In the event any such claim or lien, or any other claim(s), lien(s) or levy(ies) whatsoever of
any nature caused by Lessee or Lessee's sublessees, contractors, and agents, is filed
against the Leased Premises or the leasehold interests of Lessee therein, Lessee shall,
upon written request of Lessor, deposit with Lessor a bond conditioned for the payment in
full of all claims upon which said lien(s) or levy(ies) have been filed. Such bond shall be
acknowledged by Lessee, as principal, and by an entity licensed by the Insurance
Commissioner of the state of California to transact the business of a fidelity and surety
insurance company, as surety. Lessor shall have the right to declare this Lease in default in
the event the bond required by this Paragraph has not been deposited with Lessor within
ten (10) days after written request has been delivered to Lessee.
This provision shall not apply to a foreclosure of a trust deed or mortgage encumbering the
leasehold if the encumbrance has previously received Lessor consent in accordance with
Paragraph 8 herein.
8. LEASE ENCUMBRANCE:
(a) Lessor's Consent to Encumbrance. Lessee shall not encumber the Lease,
leasehold interest, and the improvements thereon by a deed of trust, mortgage, or
other security instrument to assure the payment of Lessee's promissory note,
without Lessor's prior written consent, in each instance. If Lessee enters into any
deed of trust, mortgage, or other security instrument that encumbers the Lease,
5
leasehold interest, or the improvements thereon without Lessor's prior written
consent, Lessor shall have the right to declare this Lease in default.
In the event Lessee requests Lessor's consent to any Lease encumbrance, hereinafter
referred to as a "transaction" in this Paragraph 8, Lessee shall reimburse Lessor for all
Lessor's reasonable costs and expenses associated with said transaction. Said costs shall
include reasonable legal fees and disbursements relating to or arising out of any such
transaction, regardless of whether such transaction is consummated.
(b) Definition of "Consented -to -Lender". The term "Consented -to -Lender" as hereinafter
used in this Lease, means the lender holding an encumbrance consented to by
Lessor. It may include one or more lenders holding obligations of the Lessee
secured by a single deed of trust, mortgage, or other security instrument.
(c) Voluntary Lease Surrender. Without the prior written consent of the Consented -to -
Lender, should Lessee owe the Consented -to -Lender any amounts under any
security instrument encumbering this Lease, leasehold interest, or the improvements
thereon, Lessor will not accept the voluntary surrender, cancellation, or termination
of this Lease before the expiration of the term thereof.
(d) Loan Default. If a deed of trust, mortgage, or other security instrument consented to
by Lessor is in default at any time, the Consented -to -Lender shall, as provided by
law, have the right, without Lessor's prior consent, to:
(e)
(f)
(1) Accept an assignment of the Lease in lieu of foreclosure; or
(2) Cause a foreclosure sale to be held pursuant to either judicial proceedings or
power of sale as provided in its deed of trust, mortgage, or other security
instrument.
Provided, however, with the exception of said Consented -to -Lender, no assignment
to the successful bidder shall be effective without Lessor's prior written consent.
Assume Lease Obligations. Before said Consented -to -Lender, or any other future
consented -to assignee, acquires the leasehold interest, it shall, as an express
condition precedent, agree in writing to assume each and every obligation under the
Lease. Furthermore, before any said Consented -to -Lender, or any other future
consented -to assignee or purchaser, may subsequently assign or sublease all or any
portion of the leasehold interest, it shall, in each instance, obtain Lessor's prior
written consent.
Further, a Consented -to -Lender that has: (i) acquired the leasehold interest and
assumed the Lessee's obligations, or (ii) entered into a new lease pursuant to
Paragraph 10 herein, concurrently with a termination of this Lease, shall be released
from all further obligations under this Lease after it assigns the leasehold interest to
an assignee consented to by Lessor, in accordance with this Paragraph 8.
Lessor's Consent to Assignment. Whenever a Consented -to -Lender is required by
the provisions of this Paragraph 8 to obtain Lessor's prior consent to an:
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Assignment to the successful bidder upon a foreclosure by said Consented -to -
Lender; or
(2) Assignment or sublease of all or substantially all of the Leased Premises by
said Consented -to -Lender should it become the lessee by reason of: (i)
being the successful bidder upon said foreclosure, or (ii) an assignment in
lieu of foreclosure, or (iii) under a new lease entered into pursuant to
Paragraph 10 herein; then Lessor will grant such consent if:
(i) The principal(s) of such assignee, purchaser, or sublessee are
reputable (meaning the absence of reputations for dishonesty, criminal
conduct, or association with criminal elements -- "reputable" does not
mean "prestigious," nor does the determination of whether one is
reputable involve considerations of personal taste or preference);
(ii) The principal(s) of such assignee, purchaser, or sublessee possess
sufficient business experience and financial means to perform
Lessee's obligations under this Lease --according to the then -current
standards for business experience and financial means that Lessor
generally requires of new or renewed lessees at the time of the
request; and
(iii) The assignee, purchaser, or sublessee agrees in writing to assume
each and every obligation under this Lease.
Further, Lessor will not unreasonably or arbitrarily withhold such consent.
Provided, however, no such assignee, purchaser, or sublessee shall subsequently:
(i) assign, transfer, or sublease any or all of the Leased Premises without Lessor's
prior written consent, in accordance with Paragraph 9 herein; or (ii) encumber the
Lease, leasehold interest, and improvements thereon without Lessor's prior written
consent, in accordance with this Paragraph 8.
Provided further, if said Consented -to -Lender becomes the lessee by reason of: (I)
being the successful bidder upon foreclosure, or (ii) an assignment in lieu of
foreclosure, or (iii) being the lessee of a new lease entered into pursuant to
Paragraph 10 herein, then said Consented -to -Lender may, upon a subsequent
assignment or subleasing of all or substantially all of the Leased Premises, take
back from its assignee, purchaser, or sublessee, a purchase money deed of trust,
mortgage, or security instrument. Provided, however, said Consented -to -Lender
must execute and submit to Lessor documentation substantially in the same form
and content as was originally submitted to Lessor when consent was granted to the
earlier encumbrance. Only said Consented -to -Lender or the successful bidder upon
said foreclosure may enforce the provisions of this Paragraph 8. Further, no other
third party shall have the rights or remedies, as third -party beneficiaries, or
otherwise, hereunder.
The burden of producing evidence and the burden of proof showing Lessor that a
prospective assignee, purchaser, or sublessee meets each and all of the aforesaid
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(g)
qualifications and standards shall be on said Consented -to -Lender or successful
bidder upon foreclosure. Lessor's decision shall be based upon Lessor's high duty
of care in administering a valuable public resource, which it holds in trust for the
people of the state of California. In the absence of fraud or arbitrary or unreasonable
action in applying or failing to apply said standards, Lessor's decision shall be final.
If Lessor Rejects Lease Transferee. In the event Lessor rejects: (i) the successful
bidder upon foreclosure, or (ii) a proposed assignee or sublessee of the Consented -
to -Lender (said successful bidder or Consented -to -Lender being sometimes referred
to hereinafter as the "Aggrieved Party," and said successful bidder, or proposed
assignee or sublessee from the Consented -to -Lender being sometimes referred to
hereinafter as the "Applicant"), the sole remedy of the Aggrieved Party shall be to
seek relief in the nature of specific performance through the arbitration procedure
hereinafter established. Further, in no event shall Lessor be liable to the Aggrieved
Party or Applicant, or any person or entity whatsoever, for money damages.
Provided, however, the Aggrieved Party shall be entitled to recover such damages, if
any, it may sustain as a result of Lessor's failure or refusal to comply with a Superior
Court order confirming an award in favor of the Aggrieved Party in said arbitration.
The issue to be submitted to arbitration shall be whether Lessor's Board of Port
Commissioners' record contains substantial evidence to support the decision to
reject the Applicant in accordance with the standards of reputation, business
experience, and/or financial means, as provided herein. The Aggrieved Party may
submit said issue to arbitration.
The arbitration shall be conducted pursuant to Title 9 of Part 3 of the California Code
of Civil Procedure (section references herein shall be to the Code of Civil
Procedure), as amplified and modified by the following provisions:
(1) Arbitration shall be initiated by the Aggrieved Party filing a written demand for
arbitration with Lessor no later than thirty (30) days following Lessor's
adoption of a resolution rejecting the Applicant. If the Aggrieved Party so
elects, Lessor shall be deemed to have adopted a resolution rejecting an
Applicant if Lessor has not acted within ninety (90) days after the Aggrieved
Party files a written application for Lessor to approve the Applicant;
(2) Said arbitration shall be conducted by a single neutral arbitrator who shall not
be a County of San Diego resident;
(3)
If the parties have not agreed on the selection of the arbitrator within five (5)
days after said demand for arbitration is filed, either party may petition the
Superior Court of the state of California, county of San Diego, to select the
arbitrator pursuant to Section 1281.6;
(4) Each party shall submit its nominees, if any, to the court within five (5) days
after said petition is served and filed;
(5)
Said arbitrator shall not conduct a trial de novo, but shall consider only said
record before Lessor's Board of Port Commissioners. Provided, however,
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said arbitrator may consider evidence outside said record if the arbitrator
believes that the Board's decision was affected by Lessor's fraudulent action
which was not reasonably discoverable prior to the Board's decision;
(6) Said arbitrator shall make the award in writing within forty-five (45) days of
being appointed;
(7)
(8)
(9)
The right of any party to take depositions for discovery purposes, as provided
in Section 1283.05, shall be waived;
Certain time periods established in said Title 9 shall be shortened as follows:
(i) Sections 1284, 1288.4, 1290.2, and 1290.6--halved;
(ii) Section 1288--four years to 30 days and 100 days to 15 days; and
(iii) Section 1288.2--100 days to 15 days;
San Diego, California shall be the venue of the arbitration hearing and any
court proceedings;
(10) The decision of the Superior Court in any proceeding to confirm, correct, or
vacate the award shall be final, and the parties to said arbitration waive any
rights to appeal therefrom, as provided in Sections 1294 and 1294.2, or
otherwise; and
(11) The parties shall bear their costs, fees, and expenses incurred in connection
with said arbitration, in accordance with the provisions of Section 1284.2.
(h) Notice of Foreclosure Sale. Said Consented -to -Lender shall include a statement in
any Notice of Foreclosure Sale covering the foregoing requirements for Lessor's
consent to an assignment upon said foreclosure.
(i) Subsequent Encumbrance. Except for subleases, utility easements, and other
necessary rights -of -way, Lessor shall not expressly consent to a subsequent lien or
encumbrance against the Leased Premises without said Consented -to -Lender's prior
written consent.
(j) Assignment of Security Interest. Said Consented -to -Lender shall not assign its
security interest in the Leased Premises in whole or in part without Lessor's prior
written consent, in each instance. Provided, however, Lessor's consent to such an
assignment shall be deemed granted (and such assignee will for all purposes of this
Lease be deemed to be a Consented -to -Lender) if the assignment is to:
(1) A financial institution in good legal standing under the laws of its jurisdiction of
incorporation having assets exceeding Five Hundred Million Dollars
($500,000,000); or
(2) The United States of America or any state thereof, or any agency thereof; or
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(3)
An assignee by operation of law; e.g., a state insurance department engaged
in supervising the liquidation or rehabilitation of an insurance company
lender.
Provided, however, for purposes of the foregoing provisions "financial institution"
shall mean: (i) an insurance company qualified to do business in the state of
California; or (ii) a federally- or state -chartered bank, savings bank, or savings and
loan association; or (iii) a pension or retirement fund operated for the employees and
former employees of, and regulated and controlled by, the United States of America
or any state thereof, or any agency thereof; e.g., the California State Teachers'
Retirement System.
Provided, further, no subsequent assignment by such assignee will be permitted
unless:
(1) The assignment conforms to all requirements of this Paragraph 8;
(2) A duplicate original(s) of such assignment is furnished Lessor; and
(3) In case of an assignment where Lessor's consent is deemed granted: (i)
assignee promptly furnishes Lessor reasonably satisfactory evidence that
said assignee complies with the foregoing requirements, and (ii) said
assignee expressly agrees to take such assignment subject to all Lessor's
rights under this Lease.
9. ASSIGNMENT — SUBLEASE: Lessee shall not, without the prior written consent of
Lessor:
(a) Assign or transfer the whole or any part of this Lease or any interest therein;
(b) Sublease (which shall also include management and/or operating agreements
covering the Leased Premises) the whole or any part of the Leased Premises;
(c) Permit transfer of the Lease or possession of the Leased Premises by merger,
consolidation, or dissolution of Lessee;
(d) Notwithstanding the provisions contained in Paragraph 8 herein, permit
hypothecation, pledge, encumbrance, transfer or sale, voluntary or involuntary, in
whole or in part, of this Lease or any interest therein; or
(e) Permit the occupancy of the whole or any part of the Leased Premises by any other
person or entity.
Notwithstanding the foregoing, nothing herein shall be construed to prevent the occupancy
of said Leased Premises by any employee or business invitee of Lessee.
Further, Lessee shall not, without the prior written consent of Lessor:
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(a) Permit assignment, hypothecation, withdrawal, admittance, dissolution, change,
pledge, encumbrance, transfer or sale, voluntary or involuntary, of any interest of a
member's managing interests, limiting interests or membership interests;
(b) Contract for the management or operation of the whole or any part of the Leased
Premises; or
(c) Permit the transfer of the Lease or possession of the Leased Premises by any
changes in the respective interests of the parties comprising Lessee.
It is mutually agreed that the qualifications of the Lessee, are a part of the consideration for
granting this Lease. Said parties do hereby specifically agree to maintain active control and
supervision of the operations conducted on the Leased Premises.
In the event Lessee requests Lessor's consent to any Lease assignment, Lease transfer,
Lease amendment, and/or sublease, hereinafter referred to as a "transaction," Lessee shall
reimburse Lessor for all Lessor's reasonable costs and expenses associated with said
transaction. Said costs shall include reasonable legal fees and disbursements relating to or
arising out of any such transaction, regardless of whether such transaction is
consummated.
In the event Lessor consents to any Lease assignment or transfer, said consent shall be
conditioned upon the following: (i) if, on the effective date of such proposed assignment or
transfer, the rent being paid under this Lease is less than market rent, Lessor shall
thereafter be paid additional rent to equal market rent; (ii) assignee shall agree and assume
each and every obligation under the Lease; (iii) if deemed necessary by Lessor, a Lease
amendment shall be executed which will include new or revised lease provisions; and (iv)
assignee shall comply with other conditions and qualifications determined by the Board of
Port Commissioners of Lessor. Notwithstanding, items (i), (iii), and (iv) shall not apply in the
event of: (a) a Lease assignment or transfer to a third party from a Consented -to -Lender
which acquired title to the Lease by foreclosure or deed in lieu of foreclosure or a new
Lease pursuant to the provisions of Paragraph 10 herein, or (b) assignment or transfer of
the Lease to a Consented -to -Lender by deed in lieu of foreclosure, or to a Consented -to -
Lender or a third party as the successful bidder at a foreclosure sale. Upon the effective
date of any said consented -to Lease assignment or transfer, assignee shall thereafter pay
to Lessor the market rent.
In the event Lessor consents to any sublease, said consent shall be conditioned upon the
following: (i) if, upon the effective date of any said consented -to sublease, the rent being
paid for the sublease area is less than market rent, Lessor shall thereafter be paid
additional rent to equal market rent for the sublease area as long as said sublease is in
effect; (ii) if deemed necessary by Lessor, a Lease amendment shall be executed which
shall include new or revised lease provisions; and (iii) Lessee shall comply with other
conditions and qualifications determined by the Board of Port Commissioners of Lessor.
10. DEFAULTS AND REMEDIES:
(a) Defaults. The occurrence of any one (1) or more of the following events shall
constitute a default hereunder:
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(1) Abandonment of the Leased Premises. Abandonment is herein defined to
include, but is not limited to, any absence by Lessee from the Leased
Premises for ten (10) consecutive days or longer.
(2) Failure by Lessee to pay, when due, any Lease -required rent, other payment,
and/or charge herein, where such failure continues for a period of ten (10)
days after written notice thereof. Provided, however, any such notice
provided in this Paragraph 10(a)(2) or in subsequent Paragraph 1 0(a)(3) shall
be in lieu of, and not in addition to, any notice required under Section 1161 of
the California Code of Civil Procedure, as amended.
(3)
Failure by Lessee to perform any other express or implied covenants or
conditions in this Lease (other than any breach under Paragraph 9, for which
immediate notice of termination may be given), should such failure continue
for thirty (30) days after written notice thereof.
(4) Subject to any restrictions or limitations placed on Lessor by applicable laws
governing bankruptcy, Lessee's: (a) applying for, consenting to, or suffering
the appointment of a receiver, trustee, or liquidator for all or a substantial
portion of its assets; (b) making a general assignment for the benefit of
creditors; (c) admitting in writing its inability to pay its debts or its willingness
to be adjudged a bankrupt; (d) becoming unable to, or failing to, pay its debts
as they mature; (e) being adjudged a bankrupt; (f) filing a voluntary petition or
suffering an involuntary petition under any bankruptcy, arrangement,
reorganization, or insolvency law (unless in the case of an involuntary
petition, the same is dismissed within thirty (30) days of such filing); (g)
convening a meeting of its creditors, or any class thereof, for purposes of
effecting a moratorium, extension, or composition of its debts; or (h) suffering,
or permitting to continue unstayed and in effect for ten (10) consecutive days,
any attachment, levy, execution, or seizure of all or a substantial portion of
Lessee's assets or of Lessee's interest in this Lease.
This Paragraph 10(a)(4) shall not be applicable or binding on the beneficiary
of any deed of trust, mortgage, or other security instrument on the Leased
Premises which is of record with Lessor and has been consented to by
resolution of Lessor, or to said beneficiary's successors in interest consented
to by resolution of Lessor, as long as there remains any monies to be paid by
Lessee to such beneficiary under the terms of such deed of trust; provided
that such beneficiary or its successors in interest, continuously and timely
pays to Lessor all rent due or coming due under the provisions of this Lease
and the Leased Premises are continuously and actively used in accordance
with Paragraph 14 of this Lease, and provided that said beneficiary agrees in
writing to assume and perform each and every obligation under the Lease.
(5) Failure by Lessee to comply with all time periods specified in this Lease.
(6) Notwithstanding Paragraph 10(a)(5), failure by Lessee to timely comply with
all other provisions of this Lease.
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(b) Remedies. In the event of any default, Lessor may exercise the following remedies:
(1) Termination: Terminate Lessee's right to possession of the Leased Premises
whereupon this Lease shall terminate and Lessee shall immediately
surrender possession of the Leased Premises to Lessor. In such event,
Lessor shall be entitled to recover from Lessee:
(i)
The 'Worth at the Time of Award", as hereinafter defined, of the
unpaid rent which had been earned at the time of termination;
(ii) The "Worth at the Time of Award" of the amount by which the unpaid
rent which would have been earned after termination until the time of
award exceeds the amount of such loss that Lessee proves could
have been reasonably avoided;
(iii) The "Worth at the Time of Award" of the amount by which the unpaid
rent for the balance of the term of this Lease after the time of award
exceeds the amount of such loss that Lessee proves could have been
reasonably avoided; and
(iv) Any other amount necessary to compensate Lessor for all the
detriment proximately caused by Lessee's failure to perform its
obligations under this Lease, or which would ordinarily be likely to
result therefrom, including but not limited to the cost of recovering
possession of the Leased Premises, expenses of reletting (including
necessary repair, renovation and alteration of the Leased Premises),
reasonable attorneys' fees, and any other reasonable costs.
The "Worth at the Time of Award" of the amounts referred to in
Paragraphs 10(b)(1)(i) and 10(b)(1)(ii) shall be computed by charging
interest at ten percent (10%) per annum from the dates such amounts
accrued to Lessor. The 'Worth at the Time of Award" of the amount
referred to in Paragraph 10(b)(1)(iii) shall be computed by discounting
such amount at one (1) percentage point above the Discount Rate of
the Federal Reserve Bank of San Francisco at the time of the award.
(2) Reletting: Without terminating or effecting a forfeiture of the Lease, or
otherwise relieving Lessee of any obligation herein, Lessor may, but need
not, relet the Leased Premises or any portion thereof, at any time or from time
to time, for such terms and upon such conditions and rent as Lessor, in its
sole discretion, deems proper. Regardless of whether the Leased Premises
are relet, Lessee shall continue to pay to Lessor all Lease -required amounts
up to the date that Lessor terminates Lessee's right to possession of the
Leased Premises; provided, however, following a default, Lessor shall not
unreasonably withhold its consent to any Lessee -requested assignment of
this Lease or subletting of the Leased Premises, unless Lessor shall also
elect to terminate this Lease and Lessee's right to possession of the Leased
Premises, as provided in Paragraph 10(b)(1). Such payments shall be due at
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(3)
the times provided in this Lease and Lessor need not wait until the
termination of the Lease to recover said amounts. If Lessor relets the Leased
Premises, or any portion thereof, such reletting shall not relieve Lessee of
any obligations herein, except that Lessor shall apply the rent or other
proceeds actually collected for such reletting against amounts due from
Lessee herein, to the extent such proceeds compensate Lessor for Lessee's
nonperformance of any obligation herein. Lessor may execute any lease
made pursuant thereto in its own name. Further, Lessor shall be under no
obligation to reveal to new lessee how these proceeds were applied, nor shall
said new lessee have any right to collect any such proceeds. Lessor shall
not, by any reentry or other act, be deemed to have accepted Lessee's
surrender of the Leased Premises or Lessee's interest therein, nor be
deemed to have terminated this Lease or to have relieved Lessee of any
obligation herein, unless Lessor shall have furnished Lessee with express
written notice of Lessor's election to do so, as set forth herein.
Other: Any and/or all other rights or remedies of Lessor specified elsewhere
in this Lease or provided by law.
In the event Lessor has consented to an encumbrance of this Lease for security purposes in
accordance with Paragraph 8 of this Lease, it is understood and agreed that Lessor shall
furnish copies of all notice(s) of default(s) to the beneficiary or mortgagee under said
encumbrance by certified mail (provided Lessee has delivered to Lessor written request,
therefore, together with the name and address of any such beneficiary or mortgagee)
contemporaneously with the furnishing of such notices to Lessee. Furthermore, in the event
Lessee fails to cure such default(s) within the time permitted herein, said beneficiary or
mortgagee shall be permitted to cure such default(s) at any time within fifteen (15) days
following the expiration of the period within which Lessee may cure said default(s);
provided, however, Lessor shall not be required to furnish any further notice(s) of default(s)
to said beneficiary or mortgagee.
In the event this Lease is terminated pursuant to the provisions of this Paragraph 10, Lessor
shall continue to have all rights provided in Paragraph 6 of this Lease.
Notwithstanding the foregoing, should a default not be cured within the cure periods
referred to above, said Lease shall not be terminated as to said beneficiary or mortgagee
unless Lessor first legally offers to enter into a valid lease with said beneficiary or
mortgagee, and said offer is not accepted in writing within (30) days after said offer is made.
Furthermore, such new lease must be entered into as a condition concurrent with such
termination for the then -remaining term of this Lease. Furthermore, the new lease must
contain the same terms, conditions, and priority as this Lease, provided the mortgagee or
beneficiary promptly cures all then -existing defaults under this Lease when and to the
extent it is able to cure them. Such new lease may be entered into even though possession
of the Leased Premises has not been surrendered by the defaulting Lessee. In such event,
unless legally restrained, Lessor shall promptly proceed to obtain possession of the Leased
Premises and to deliver possession to said mortgagee or beneficiary as soon as the same
is obtained. Should the mortgagee or beneficiary fail to accept said offer in writing within
said thirty- (30) day period, or, having so accepted said offer, should it fail promptly to cure
all existing defaults under this Lease when and to the extent it is able to cure them, then
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such termination shall also be effective as to said mortgagee or beneficiary.
11. BANKRUPTCY: Lessor shall have the right to declare this Lease in default if
Lessee: (i) becomes insolvent; (ii) makes an assignment for the benefit of creditors; (iii)
becomes the subject of a bankruptcy proceeding, reorganization arrangement, insolvency,
receivership, liquidation, or dissolution proceeding; or in the event of any judicial sale of
Lessee's leasehold interest.
The conditions of this Paragraph shall not be applicable or binding on: (1) Lessee; or (2) the
beneficiary in any deed of trust, mortgage, or other security instrument encumbering the
leasehold interest which Lessor has consented to in writing; or (3) the aforesaid
beneficiary's successors in interest which Lessor has consented to in writing, as long as
there remains any monies to be paid by Lessee to such beneficiary under the terms of such
deed of trust; provided Lessee, such beneficiary, or such beneficiary's successors in
interest continuously pay to Lessor all rent due or coming due under the provisions of this
Lease, and the Leased Premises are continuously and actively used in accordance with
Paragraph 14 herein.
12. EMINENT DOMAIN: If any public authority takes the whole or a substantial part of
the Leased Premises under the power of eminent domain, then the term of this Lease shall
cease as to the part so taken from the day the possession of that part is taken. Further, the
rent shall be paid up to that day. Lessee shall then have the right either to: (i) cancel this
Lease and declare the same null and void; or (ii) continue in possession of the remainder of
the Leased Premises under the then -current Lease terms. Provided, however, the rent
shall be reduced in proportion to the value of the portion of the Leased Premises taken.
13. TERMINATION OF PRIOR AGREEMENT(S): Any and all existing permits, leases,
or rental agreements between Lessor and Lessee for the Leased Premises which have not
already expired or terminated, are hereby terminated on the effective date of this Lease.
Any rights, duties, and obligations of the parties, if any, pursuant to the terms, covenants,
and conditions in any such hereby terminated agreements shall remain enforceable and
subject to all defenses, including without limitation any applicable statute of limitations.
Further, said statute shall not be waived or extended because of this Lease. Nothing herein
is intended nor shall be construed as a waiver of any such rights, or as a release of any
such duties or obligations, whether known or unknown at this time or upon the effective date
of this Lease.
14. USE OBLIGATION: Lessee shall actively and continuously use and operate the
Leased Premises for the limited particular exclusive use expressly provided for in
Paragraph 2, herein, except for failure to so use caused by wars, strikes, riots, civil
commotion, acts of public enemies, and acts of God. Said active and continuous use and
operation enhances the value of the lands within Lessor's jurisdiction; provides needed
public service; and provides additional employment, taxes, and other benefits to the general
economy of the area. Lessee, however, shall not and is expressly prohibited from using the
Leased Premises for any other purpose or use whatsoever, whether it is purported to be in
addition to or in lieu of the particular exclusive use expressly provided in Paragraph 2,
herein.
15. MAINTENANCE AND REPAIR: As part of the consideration for this Lease, Lessee
15
shall assume full responsibility for operation and maintenance of the Leased Premises
throughout the term and without expense to Lessor. Lessee shall perform all maintenance,
which includes all painting, repairs, and replacements necessary to maintain and preserve
the Leased Premises in a good, safe, healthy, and sanitary condition, satisfactory to Lessor
and in compliance with all applicable laws. Provided, however, prior to Lessee performing
any extraordinary repairs, plans and specifications must first be submitted to Lessor and
receive Lessor approval, pursuant to the procedures provided in Paragraph 4 herein.
Further, Lessee shall provide approved containers for trash and garbage and keep the
Leased Premises free and clear of rubbish, litter, and any other fire hazards. Lessee waives
all rights to make repairs at the expense of Lessor, as provided in Section 1942 of the
California Civil Code, and all rights provided by Section 1941 of said Code.
For the purpose of keeping the Leased Premises in a good, safe, healthy, and sanitary
condition, Lessor always shall have the right but not the duty to enter, view, inspect,
determine the condition of, and protect its interests in the Leased Premises. Provided,
however, Lessor or its representatives shall: (a) conduct such entry in a manner that
causes the least inconvenience and disruption to Lessee's operation as practicable; and (b)
comply with all safety and security requirements of Lessee. It is not intended, however, that
Lessee's safety and security requirements be used to bar Lessor's right of inspection.
Further, Lessee shall provide Lessor reasonable access to the Leased Premises for such
purpose.
If inspection discloses the Leased Premises are not in the condition required herein, Lessee
immediately must commence the necessary maintenance work, and complete said work
within ten (10) days after written notice from Lessor. Further, if at any time Lessor
determines the Leased Premises are not in the condition required herein, Lessor may
require Lessee to file and pay for a faithful performance bond to assure prompt correction,
without additional notice. The amount of said bond shall be adequate, in Lessor's opinion,
to correct all unsatisfactory conditions.
Notwithstanding, Lessor shall not be required to perform any maintenance, including
painting, repairs, or replacements; or to make any improvements whatsoever on or for the
benefit of the Leased Premises.
The rights reserved in this Paragraph shall not create any obligations or increase any
obligations for Lessor elsewhere in this Lease.
16. PERFORMANCE BOND: Lessee shall not commence any major construction upon
the Leased Premises until performance bonds in the amount of the total estimated
construction cost of the proposed improvements have been secured and submitted to
Lessor. In lieu of said performance bonds, the Executive Director of Lessor may, in his sole
discretion, accept performance and labor and material bonds supplied by Lessee's
contractor or subcontractors, performance guarantees, or other satisfactory evidence that
said construction will be timely completed. Said bonds must be in a form acceptable to
Lessor and have been issued by a company qualified to do business in the state of
California.
17. TAXES AND UTILITIES: This Lease may result in a taxable possessory interest
and be subject to the payment of property taxes. Lessee shall pay before delinquency all
16
taxes and assessments of any kind assessed or levied upon Lessee or the Leased
Premises by reason of: (i) this Lease; (ii) any buildings, machines, or other improvements of
any nature whatsoever erected, installed, or maintained by Lessee; or (iii) the business or
other activities of Lessee upon or in connection with the Leased Premises. Lessee also
shall pay any fees imposed by law for licenses or permits for any business or activities of
Lessee upon the Leased Premises, or under this Lease, and shall pay before delinquency
any and all charges for utilities at or on the Leased Premises.
18. CONFORMANCE WITH LAWS AND REGULATIONS: Lessee agrees that, in all
activities on or in connection with the Leased Premises, and in all uses thereof, including
the making of any alterations, changes, installations, or other improvements, it will abide by
and conform to all laws and regulations. Said laws and regulations shall include, but are not
limited to those prescribed by the San Diego Unified Port District Act; any ordinances of the
city in which the Leased Premises are located, including the Building Code thereof; any
ordinances and general rules of Lessor, including tariffs; and any applicable laws of the
state of California and federal government, as any of the same now exist or may hereafter
be adopted or amended. In particular and without limitation, Lessee shall have the sole and
exclusive obligation and responsibility to comply with the requirements of: (i) Article 10 of
Lessor Code entitled "Stormwater Management and Discharge Control," and (ii) the
Americans With Disabilities Act of 1990, including but not limited to regulations promulgated
thereunder, and Lessor shall have no such obligations or responsibilities as to the Leased
Premises.
19. EQUAL EMPLOYMENT OPPORTUNITY AND NONDISCRIMINATION: Lessee
shall comply with Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act
of 1991; the California Constitution; the California Fair Employment and Housing Act; the
Americans with Disabilities Act of 1990; and any other applicable federal, state, or local
laws and regulations now existing or hereinafter enacted, requiring equal employment
opportunities or prohibiting discrimination. This shall include without limitation, laws and
regulations prohibiting discrimination because of race, color, religion, sex, national origin,
ancestry, physical or mental disability, veteran status, medical condition, marital status, age,
sexual orientation, pregnancy, or other non -job related criteria. In complying with all such
laws, including without limitation the Americans with Disabilities Act of 1990, Lessee shall
be solely responsible for such compliance and required programs, and there shall be no
allocation of any such responsibility between Lessor and Lessee.
Annually, Lessee shall formulate and file with Lessor an approved: (i) "Equal Employment
Opportunity and Nondiscrimination Program," and (ii) "Statement of Compliance" for the
promotion of equal employment opportunities and nondiscrimination. Lessee shall make
such progress reports as required by Lessor, and, upon Lessor's reasonable notice, Lessee
shall make available for inspection and copying all of its records relevant to compliance with
this Paragraph. Provided, however, Lessee is only required to file the Program and
Statement when the average annual employment level operating on the Leased Premises
exceeds fifty (50) employees. Provided further, should Lessee be subject to a federally -
mandated affirmative action program for employees, Lessee may, in lieu of filing the
Program and Statement, annually certify in writing to Lessor that Lessee is subject to such a
program, and, upon Lessor's request, Lessee shall furnish evidence thereof.
For the purposes and provisions of this Paragraph, a sublessee shall be considered the
17
Lessee should the sublessee become the prime operator of the Leased Premises.
Lessee's compliance with this Paragraph is an express condition hereof, and any failure by
Lessee to so comply and perform shall be a default as provided in this Lease, and Lessor
may exercise any right as provided herein, and as otherwise provided by law.
20. NONDISCRIMINATION: Lessee agrees at all times to fully comply with all laws now
existing or hereinafter enacted, prohibiting discrimination against any person or class of
persons by reason of race, color, religion, sex, national origin, ancestry, physical or mental
disability, veteran status, medical condition, marital status, age, sexual orientation,
pregnancy, or other non -job related criteria. In complying with all such laws, including
without limitation the Americans With Disabilities Act of 1990, Lessee shall be solely
responsible for such compliance and required programs, and there shall be no allocation of
any such responsibility between Lessor and Lessee.
21. PARTIAL INVALIDITY: If any term, covenant, condition, or provision of this Lease
is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of the provisions herein shall remain in full force and effect, and shall in no way
be affected, impaired, or invalidated thereby.
22. HOLD HARMLESS: Lessee shall, to the fullest extent permitted by law, defend,
indemnify, and hold harmless Lessor and its officers, employees, and agents for any and all
liability, claims, judgments, damages, proceedings, orders, directives, costs, including
reasonable attorneys' fees, or demands arising directly or indirectly out of the obligations
undertaken in connection with this Lease, or Lessee's use, occupancy, possession or
operation of the leased Premises, except claims or litigation arising through the sole
negligence or willful misconduct of Lessor. It is the intent of this Paragraph that Lessee
indemnify and hold harmless Lessor for any actions of Lessee or Lessor, including duties
that may be legally delegated to Lessee or to third parties, except for those arising out of
the sole negligence or willful misconduct of Lessor. This indemnity obligation shall apply for
the entire time that any third party can make a claim against or sue Lessor for liabilities
arising out of Lessee's use, occupancy, possession, or operation of the Leased Premises,
or arising from any defect in any part of the Leased Premises.
23. SUCCESSORS IN INTEREST: Unless otherwise provided in this Lease, the terms,
covenants, conditions, and agreements herein shall apply to and bind the heirs, successors,
executors, administrators, and assigns of all the parties hereto, all of whom shall be jointly
and severally liable hereunder.
24. EASEMENTS: This Lease and all rights granted hereunder are subject to all
easements and rights -of -way previously granted or reserved by Lessor in, upon, over, and
across the Leased Premises for any purpose whatsoever. Said Lease and granted rights
shall be subject to future easements and rights -of -way for access, gas, electricity, water,
sewer, drainage, telephone, telegraph, television transmission, and such other Lessor or
public facilities as Lessor may determine from time to time to be in the best interests of the
development of the lands within Lessor's jurisdiction. Lessor agrees to make an effort to
locate future easements and rights -of -way, and to install associated public facilities, so as to
produce a minimum amount of interference with Lessee's business. Further, Lessee shall
not be entitled to any monetary payment or other remuneration for any such future
18
easements and rights -of -way.
25. TITLE OF LESSOR: Lessor's title is derived from the provisions of the San Diego
Unified Port District Act, Appendix 1, Harbors & Navigation Code, and is subject to the
provisions of said Act. This Lease is granted subject to the terms and conditions of said
Act.
26. INSURANCE: Lessee shall maintain insurance acceptable to Lessor in full force
and effect throughout the term of this Lease. The policies for said insurance shall, as a
minimum, provide the following:
(a) Forms of Coverage
(1) "OCCURRENCE" form Commercial General Liability covering the Leased
Premises, operations, and contractual liability assumed by Lessee in this
Lease in the amount of not less than Two Million Dollars ($2,000,000)
combined single limit per occurrence for bodily injury, personal injury, and
property damage. The general aggregate shall be Four Million Dollars
($4,000,000) unless a Two Million Dollars ($2,000,000) per location
aggregate limit is provided separate by endorsement.
If alcoholic beverages are served or sold on the Leased Premises, Liquor
Liability coverage in the amount of not less than One Million Dollars
($1,000,000) shall be obtained. If no alcoholic beverages are served or sold
on the Leased Premises, the proof of insurance shall so state.
(2) Fire and Extended Coverage, including water damage and debris cleanup
provisions, in an amount not less than ninety percent (90%) of full
replacement value of all improvements located within the Leased Premises.
The fire and extended coverage policies shall be endorsed with a Loss Payee
endorsement in favor of Lessor. It is agreed that any insurance proceeds in
excess of Twenty -Five Thousand Dollars ($25,000) resulting from a loss
under said policies shall be payable jointly to Lessor and Lessee to ensure
that said proceeds will be reinvested in rebuilding and/or repairing the
damaged portions of the Leased Premises and any damaged or destroyed
improvements located thereon. Provided, however, if there is a Lessor -
consented to mortgage or deed of trust encumbering the leasehold, then all
fire and extended coverage policies shall be made payable jointly to the
mortgagee or beneficiary and Lessee, to ensure that any proceeds shall be
held by said mortgagee or beneficiary for the following purposes:
(i)
As a trust fund to pay for the reconstruction, repair, or replacement of
the damaged or destroyed improvements, in kind and scope, in
progress payments as the work is performed. Any funds remaining
after completion of said work shall be retained by said mortgagee or
beneficiary and applied to reduce any debt secured by such mortgage
or deed of trust. Furthermore, any funds remaining after full payment
of said debt shall be paid to Lessee; or
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(3)
(ii) In the event that this Lease is terminated with consent of both Lessor
and said mortgagee or beneficiary, and the improvements are not
reconstructed, repaired, or replaced, the insurance proceeds shall be
retained, without liability, by said mortgagee or beneficiary to the
extent necessary to fully discharge the debt secured by said mortgage
or deed of trust. Furthermore, said mortgagee or beneficiary shall hold
the balance thereof to restore the Leased Premises to a neat and
clean condition. Any remaining funds shall lastly be paid to Lessor
and Lessee, as their interests may appear.
In the event underground storage tanks are located on the Leased Premises,
Lessee is required to comply with Code of Federal Regulations, Title 40,
Chapter I, Subchapter H or Title 23, Division 3, Chapter 18 of California Code
of Regulations, collectively, herein "UST Law." At the time Lessee is required
to comply with any provisions of UST Law requiring financial assurance
mechanisms, Lessee shall provide Lessor with a certified copy of its
Certification of Financial Responsibility. If Lessee's program for financial
responsibility requires insurance, then Lessee's policy(ies) shall name Lessor
and its officers, employees, and agents as additional insureds, and all other
terms of Subparagraph (b), below, shall apply. Should Lessee change its
financial assurance mechanisms, Lessee shall immediately provide Lessor
with a certified copy of its revised Certification of Financial Responsibility.
(b) General Requirements
(1) All required insurance shall be in force the first day of the term of this Lease,
and shall be maintained continuously in force throughout the term of this
Lease. In addition, the cost of all required insurance shall be borne by
Lessee. During the entire term of this Lease, Lessee shall provide Lessor
with Certificates, in a form acceptable to Lessor, evidencing the existence of
the necessary insurance policies and original endorsements effecting
coverage required by this Paragraph. The Certificates and endorsements for
each insurance policy are to be signed by a person authorized by that insurer
to bind insurance on its behalf. Notwithstanding the foregoing, Lessor
reserves the right to require complete, certified copies of all required policies
at any time.
(2) All liability insurance policies shall name, or be endorsed to name Lessor and
its officers, employees, and agents as additional insureds and protect Lessor
and its officers, employees, and agents against any legal costs in defending
claims. All liability policies shall provide cross -liability coverage.
All insurance policies shall be endorsed to state that coverage will not be
suspended, voided, cancelled, or reduced in coverage or in limits, except
after Lessee has furnished Lessor with thirty (30) days' prior written notice by
certified mail. All insurance policies shall be endorsed to state that Lessee's
insurance is primary and not excess or contributory to any insurance issued
in the name of Lessor. Further, all insurance companies must be satisfactory
to Lessor.
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(3)
Any deductibles or self -insured retentions must be declared and acceptable
to Lessor. If the deductibles or self -insured retentions are unacceptable to
Lessor, then Lessee shall have the option to either: (i) reduce or eliminate
such deductibles or self -insured retentions as respects the Lessor and its
officers, employees, and agents; or, (ii) procure a bond guaranteeing
payment of losses and related investigations, claim administration, and
defense expenses.
(4) Lessor shall retain the right at any time to review the coverage, form, and
amount of insurance required herein. If, in the opinion of Lessor, the
insurance provisions in this Lease do not provide adequate protection for
Lessor and/or members of the public using the Leased Premises or using
services connected with Lessee's use or occupancy of the Leased Premises,
Lessor may require Lessee to obtain insurance sufficient in coverage, form,
and amount to provide adequate protection. Lessor's requirements shall be
reasonable, but shall be designed to ensure protection from and against the
kind and extent of risks that exist at the time a change in insurance is
required.
(5)
Lessor shall notify Lessee in writing of changes in the insurance
requirements. With respect to changes in insurance requirements that are
available from Lessee's then -existing insurance carrier, Lessee shall deposit
Certificates evidencing acceptable insurance policies with Lessor
incorporating such changes within sixty (60) days of receipt of such notice.
With respect to changes in insurance requirements that are not available from
Lessee's then- existing insurance carrier, Lessee shall deposit Certificates
evidencing acceptable insurance policies with Lessor, incorporating such
changes, within one hundred twenty (120) days of receipt of such notice. In
the event Lessee fails to deposit insurance Certificates as required herein,
this Lease shall be in default without further notice to Lessee, and Lessor
shall be entitled to exercise all legal remedies.
(6) If Lessee fails or refuses to maintain insurance as required in this Lease, or
fails to provide proof of insurance, Lessor has the right to declare this Lease
in default without further notice to Lessee, and Lessor shall be entitled to
exercise all legal remedies.
(7)
The procuring of such required policies of insurance shall not be construed to
limit Lessee's liability hereunder, nor to fulfill the indemnification provisions
and requirements of this Lease. Notwithstanding said policies of insurance,
Lessee shall be obligated for the full and total amount of any damage, injury,
or loss caused by negligence or neglect connected with this Lease, or with
the use or occupancy of the Leased Premises.
(8) Lessee agrees not to use the Leased Premises in any manner, even if use is
for purposes stated herein, that will result in the cancellation of any insurance
Lessor may have on the Leased Premises or on adjacent premises, or that
will cause cancellation of any other insurance coverage for the Leased
Premises or adjoining premises. Lessee further agrees not to keep on the
21
Leased Premises or permit to be kept, used, or sold thereon, anything
prohibited by any fire or other insurance policy covering the Leased
Premises. Lessee shall, at its sole expense, comply with all reasonable
requirements for maintaining fire and other insurance coverage on the
Leased Premises.
(c) Lessee may satisfy the requirements of this Paragraph 26(c) by maintaining
its lawful self -insured status during the term of this Lease. Lessee to issue a
letter of self-insurance to Lessor as a condition of this lease
27. POLICY OF LESSOR: It is Lessor's policy that prevailing wage rates shall be paid
all persons employed on the lands within Lessor's jurisdiction.
28. WARRANTIES -GUARANTEES -COVENANTS: Lessor makes no warranty,
guarantee, covenant, including but not limited to covenants of title and quiet enjoyment, or
averment of any nature whatsoever concerning the condition of the Leased Premises,
including the physical condition thereof, or any condition which may affect the Leased
Premises. It is agreed that Lessor will not be responsible for any loss, damage, and/or
costs, which may be incurred by Lessee by reason of any such condition or conditions.
29. DAMAGE TO OR DESTRUCTION OF LEASED PREMISES: Should Lessee -owned
improvements be: (i) damaged or destroyed by fire, the elements, acts of God, or by any
other cause; or (ii) declared unsafe or unfit for occupancy or use by a public entity with the
appropriate authority, (i) and/or (ii) hereinafter "event," Lessee shall, within ninety (90) days
of such event, commence and diligently pursue to completion the repair, replacement, or
reconstruction of the improvements necessary to permit full occupancy and use of the
Leased Premises for the uses required herein. Repair, replacement, or reconstruction of
such improvements shall be accomplished in a manner and according to Plans approved by
Lessor. Provided, however, Lessee shall not be obligated to repair, reconstruct, or replace
the improvements following their destruction in whole or substantial part, except to the
extent the loss is covered by insurance required pursuant to Paragraph 26 herein (or would
be covered regardless of whether such required insurance is actually in effect).
If Lessee elects not to restore, repair, or reconstruct as herein required, then this Lease
shall terminate. Further, Lessor shall have any rights to which it would be entitled under the
provisions of Paragraph Nos. 26 and 6 herein.
No event described herein shall relieve Lessee of its obligations to pay all rent and other
amounts otherwise due hereunder.
30. QUITCLAIM OF LESSEE'S INTEREST UPON TERMINATION: Upon termination of
this Lease for any reason, including but not limited to termination because of default by
Lessee, Lessee shall execute, acknowledge, and deliver to Lessor within thirty (30) days
after receipt of written demand therefor, a good and sufficient deed whereby all Lessee's
right, title, and interest in the Leased Premises is quitclaimed to Lessor. Should Lessee fail
or refuse to deliver the required deed to Lessor, Lessor may prepare and record a notice
reciting the failure of Lessee to execute, acknowledge, and deliver such deed. Said notice
shall be conclusive evidence of the termination of this Lease and of all right of Lessee, or
those claiming under Lessee, in and to the Leased Premises.
22
31. PEACEABLE SURRENDER: Upon expiration of this Lease or earlier termination or
cancellation thereof, as herein provided, Lessee shall peaceably surrender the Leased
Premises to Lessor in as good condition as the Leased Premises were at the
Commencement Date of this Lease, except as the Leased Premises were repaired, rebuilt,
restored, altered, or added to as permitted or required by the provisions of this Lease,
ordinary wear and tear excepted, and subject to Paragraph 6 herein. If Lessee fails to
surrender the Leased Premises at the expiration of this Lease or the earlier termination or
cancellation thereof, Lessee shall defend and indemnify Lessor from all liability and
expense resulting from the delay or failure to surrender, including without limitation any
succeeding lessee claims based on Lessee's failure to surrender.
32. WAIVER: Should either Lessor or Lessee waive any breach by the other of any
Lease covenant, condition, or agreement, such waiver shall not be, nor be construed to be,
a waiver of any subsequent or other breach of the same or any other Lease covenant,
condition, or agreement. Further, failure on the part of either party to require or exact the
other's full and complete compliance with any of the Lease covenants, conditions, or
agreements shall not be, nor be construed as in any manner changing the terms, or
preventing the enforcement in full, of the provisions hereof. In addition, Lessor's
subsequent acceptance of rent hereunder shall not be deemed to be a waiver of any
preceding Lessee breach of any Lease term, covenant, or condition, other than Lessee's
failure to pay the particular rent so accepted, regardless of Lessor's knowledge of Lessee's
preceding breach at the time rent is accepted.
33. HOLDOVER: This Lease shall terminate without further notice at expiration of the
term. Any holding over by Lessee after either expiration or termination shall not constitute a
renewal or extension, or give Lessee any rights in or to the Leased Premises.
If Lessee, with Lessor's consent, remains in possession of the Leased Premises after Lease
expiration or termination, such possession shall be deemed a month -to -month tenancy
terminable upon thirty (30) days' notice furnished at any time by either party to the other.
In addition, all provisions of this Lease, except those pertaining to term, shall apply to the
month -to -month tenancy, and Lessee shall continue to pay all rent required by this Lease.
Provided, however, if percentage rent is required by this Lease, it shall be paid monthly on
or before the tenth (10th) day of each month, including the tenth (10th) day of the month
following the expiration of any such holdover period.
34. PARAGRAPH HEADINGS: The Table of Contents and Paragraph Headings
contained herein are for convenience in reference and are not intended to define or limit the
scope of any provision thereof.
35. ENTIRE UNDERSTANDING: This Lease contains the entire understanding and
agreement of the parties. Lessee acknowledges there is no other written or oral
understanding or agreement between the parties with respect to the Leased Premises, and
that this Lease supersedes all prior negotiations, discussions, obligations, and rights of the
parties hereto. No waiver, modification, amendment, or alteration of this Lease shall be
valid unless it is expressly in writing and signed by authorized representatives of the parties
hereto. Each of the parties to this Lease acknowledges that no other party, agent, or
representative has made any promise, representation, waiver, or warranty whatsoever,
23
expressed or implied, which is not expressly contained in writing in this Lease. Each party
further acknowledges it has not executed this Lease in reliance upon any collateral promise,
representation, waiver, or warranty, or in reliance upon any belief as to any fact not
expressly recited in this Lease.
36. TIME IS OF THE ESSENCE: Time is of the essence of each and all of the terms
and provisions of this Lease. This Lease shall inure to the benefit of and be binding upon
the parties hereto and any successors of Lessee as fully and to the same extent as though
specifically mentioned in each instance. All covenants, conditions, and agreements in this
Lease shall extend to and bind any assigns and sublessees of Lessee.
37. NOTICES: All notices provided for by this Lease or by law to be given or served
upon Lessor or Lessee shall be in writing and: (i) personally served upon Lessor or Lessee,
or any person hereafter authorized by either party in writing to receive such notice, or (ii)
served by certified letter addressed to the appropriate address hereinafter set forth, or to
such other address designated in writing by the respective party.
To Lessor
Executive Director
San Diego Unified Port District
Post Office Box 120488
San Diego, CA 92112-0488
To Lessee
Community Development Commision of
National City
Executive Director
1243 National City Boulevard
National City, CA 919504301
Should any consented -to assignee, consented -to purchaser, or Consented -to -Lender notify
Lessor in writing of its desire to receive notices, such party shall also be personally served,
or served by certified letter at such appropriate address designated in writing by the
respective party.
Any notice or notices given or served as provided herein shall be effectual and binding for
all purposes upon the parties so served; provided, however, if served by certified mail,
service will be considered completed and binding on the party served forty-eight (48) hours
after deposit in the U.S. Mail.
38. REMOVAL OF MATERIALS: Lessee shall, upon expiration of this Lease or sooner
termination as herein provided, remove within sixty (60) days all materials, including without
limitation all ships, vessels, barges, hulls, debris, and surplus and salvage items, hereinafter
"Materials," from the Leased Premises and adjacent property, so as to leave the same in as
good condition as when first occupied by Lessee, subject to reasonable wear and tear.
Provided, however, if Lessee fails to remove all Materials within sixty (60) days, Lessor may
remove, sell, or destroy said Materials at the expense of Lessee. Further, Lessee agrees to
pay Lessor the reasonable cost of such removal, sale, or destruction; or, at the option of
Lessor, said Materials not removed, sold, or destroyed by Lessee shall become the property
of Lessor, without cost to Lessor, and without any payment to Lessee.
During any period of time required to remove said Materials, or to test for and/or remediate
Hazardous Materials as required in Paragraph 44 herein, Lessee shall continue to pay the
full rent to Lessor in accordance with this Lease, which said rent shall be prorated daily.
24
39. ACCEPTANCE OF LEASED PREMISES: BY SIGNING THIS LEASE, LESSEE
REPRESENTS AND WARRANTS THAT IT HAS INDEPENDENTLY INSPECTED THE
LEASED PREMISES AND MADE ALL TESTS, INVESTIGATIONS, AND OBSERVATIONS
NECESSARY TO SATISFY ITSELF OF THE CONDITION OF THE LEASED PREMISES.
LESSEE AGREES IT IS RELYING SOLELY ON SUCH INDEPENDENT INSPECTION,
TESTS, INVESTIGATIONS, AND OBSERVATIONS IN MAKING THIS LEASE. LESSEE
ALSO ACKNOWLEDGES THAT THE LEASED PREMISES ARE IN THE CONDITION
CALLED FOR BY THIS LEASE, THAT LESSOR HAS PERFORMED ALL WORK WITH
RESPECT TO THE LEASED PREMISES, AND THAT LESSEE DOES NOT HOLD
LESSOR RESPONSIBLE FOR ANY DEFECTS IN THE LEASED PREMISES. LESSEE
FURTHERMORE ACCEPTS, AND SHALL BE RESPONSIBLE FOR, ANY RISK OF HARM
TO ANY PERSON AND PROPERTY, INCLUDING WITHOUT LIMITATION, EMPLOYEES
OF LESSEE, FROM ANY LATENT DEFECTS IN THE LEASED PREMISES.
Initial
Lessor Lessee
40. WASTE/NUISANCE: Lessee shall not use the Leased Premises in a manner that
constitutes waste or nuisance.
41. NUMBER AND GENDER: Words of any gender used in this Lease shall include any
other gender and each word in the singular number shall include the plural whenever the
tense requires.
42. APPLICABLE LAW: The Lease will be governed by and construed and enforced in
accordance with the laws of the State of California.
43. ATTORNEY FEES: Should any suit be commenced to enforce, protect, or establish
any right or remedy of any of the terms and conditions hereof, including without limitation a
summary action commenced by Lessor under the laws of the state of California relating to
the unlawful detention of property, the prevailing party shall be entitled to have and recover
from the losing party reasonable attorney fees and costs of suit.
44. HAZARDOUS MATERIALS:
(a) Definition of "Hazardous Material." The term "Hazardous Material" shall mean any
pollutant, contaminant, or hazardous, dangerous, or toxic chemical, material, or
substance, including oil and petroleum products, which now or in the future may be
within the meaning of any applicable, federal, state, or local law, regulation,
ordinance, or requirement at any concentration that is or has become regulated by
the United States, the State of California, or any local government authority having
jurisdiction over the Leased Premises.
(b) Lessee Use of Hazardous Materials. Lessee shall not cause or permit any
Hazardous Material, or products or materials which include any hazardous
substance as a component, to be generated, brought onto, used, stored, emitted,
released or disposed of in or about the Leased Premises by Lessee or its agents,
employees, contractors, sublessees, or invitees unless expressly approved, at
Lessor's sole discretion, in writing by Lessor after submittal by Lessee of Material
25
Safety Data Sheets ("MSDS") or other information requested by Lessor.
Limited quantities of equipment, materials and supplies customarily used in
connection with the construction of improvements and standard office, food service
and janitorial supplies customarily used in places of business which contain
chemicals categorized as Hazardous Material are excluded from this requirement.
Lessee shall use, store, and dispose of all such Hazardous Materials in strict
compliance with all applicable statutes, ordinances, regulations, and other
requirements in effect during the Lease Term that relate to public health and safety
and protection of the environment ("Environmental Laws"); and shall comply at all
times with all Environmental Laws.
(c) Notice of Release or Investigation. If during the term of this Lease (including any
extensions), Lessee becomes aware of (i) any actual or threatened release of any
Hazardous Material on, in, under, from, or about the Leased Premises; or (ii) any
inquiry, investigation, proceeding, or claim (collectively "Inquiry") by any government
agency or other person regarding the presence of any Hazardous Material on, in,
under, from or about the Leased Premises, Lessee shall give Lessor written notice of
the release or Inquiry within five (5) days after Lessee learns or first has reason to
believe there has been a release or Inquiry and shall simultaneously furnish to
Lessor copies of any claims, notices of violation, reports, warning or other writings
received by Lessee that concern the release or Inquiry.
(d) Lessor Right to Inspect. If Lessee has in the past or continues to use, dispose,
generate, or store Hazardous Materials on the Leased Premises, Lessor or its
designated representatives, at Lessor's sole discretion, may at any time during the
term of this Lease, but is no way obligated to, enter upon the Leased Premises and
make any inspections, tests or measurements Lessor deems necessary to
determine if a release of Hazardous Materials has occurred. Lessor shall furnish
Lessee a minimum of twenty-four (24) hours' notice in writing prior to conducting any
inspections or tests, unless, in Lessor's sole judgment, circumstances require
otherwise. Such tests shall be conducted in a manner so as to attempt to minimize
any inconvenience and disruption to Lessee's operation as is practicable. If such
tests indicate a release of Hazardous Materials, then Lessor, at Lessor's sole
discretion, may require Lessee, at Lessee's sole expense and at any time during the
term of this Lease, to have such tests for such Hazardous Materials conducted by a
qualified party or parties on the Leased Premises. If Lessor has reason to believe
any Hazardous Materials originated from a release on the Leased Premises have
contaminated any area outside the Leased Premises, including but not limited to
surface and groundwater, then Lessor, at Lessor's sole discretion, may require
Lessee, at Lessee's sole expense and at any time during the term of this Lease, to
have tests for such Hazardous Materials conducted by a qualified party or parties on
said area outside the Leased Premises. Lessor's failure to inspect, test or take other
actions pursuant to this Paragraph 44(d) regarding the Leased Premises, shall in no
way relieve Lessee of any responsibility for a release of a Hazardous Material.
(e) Clean-up Obligations. If the presence of any Hazardous Material brought onto the
Leased Premises by Lessee or Lessee's employees, agents, sublessees,
contractors, or invitees, or generated by same, results in contamination of the
Leased Premises, adjacent properties or the San Diego Bay, Lessee shall promptly
26
(f)
take all necessary actions, at Lessee's sole expense, to remove or remediate such
Hazardous Materials. Lessee shall provide notice to Lessor prior to performing any
removal or remedial action. Lessee shall not propose nor agree to any covenant of
use restriction as part of any removal or remediation required as a result of this
Paragraph 44(e). To the extent Lessor incurs any costs or expenses in performing
Lessee's obligation to clean-up contamination resulting from Lessee's operations or
use of the Leased Premises, Lessee shall promptly reimburse Lessor for all costs
and expenses incurred within thirty (30) days. Any amounts not so reimbursed
within thirty (30) days after Lessee's receipt of an itemized statement therefore shall
bear interest at the Prime Rate plus Five Percent (5%) per annum compounded
monthly. This provision does not limit the indemnification obligation set forth in
Paragraph 44(f). The obligations set forth in this Paragraph 44(e) shall survive any
expiration or other termination of this Lease.
(I)
Clean-up Extending Beyond Lease Term. Should any clean-up of Hazardous
Materials for which Lessee is responsible not be completed prior to the
expiration or sooner termination of the Lease, including any extensions
thereof, then: (A) Lessee shall deposit into an escrow account an amount of
money equal to the balance of the estimated costs of the clean-up, together
with instructions for the disbursement of such amount in payment of the costs
of any remaining clean-up as it is completed, and (B) if the nature of the
contamination or clean-up required of Lessee is of such a nature as to make
the Leased Premises untenable or unleaseable, then Lessee shall be liable to
Lessor as a holdover lessee until the clean-up has been sufficiently
completed to make the Leased Premises suitable for lease to third parties.
The estimated cost of the clean-up shall require approval of the Lessor.
(ii) Financial Security. If Lessor determines, in its reasonable discretion, that
Lessee does not have insurance or other financial resources sufficient to
enable Lessee to fulfill its obligations under this Paragraph 44(e), whether or
not accrued, liquidated, conditional, or contingent, then Lessee shall, at the
request of Lessor, procure and thereafter maintain in full force and effect such
environmental impairment liability and/or pollution liability insurance policies
and endorsements, or shall otherwise provide such collateral or security
reasonably acceptable to Lessor as is appropriate to assure that Lessee will
be able to perform its duties and obligations hereunder.
Indemnification. Lessee shall, at Lessee's sole expense and with counsel
reasonably acceptable to Lessor, indemnify, defend, and hold harmless Lessor and
Lessor's directors, officers, employees, partners, affiliates, agents, successors, and
assigns with respect to all losses, including reasonable attorneys' and environmental
consultants' fees, arising out of or resulting from Lessee's occupancy or use of the
Leased Premises, or the violation of any applicable Environmental Law, by Lessee
or Lessee's agents, assignees, sublessees, contractors, or invitees. This
indemnification applies whether or not the concentrations of any such Hazardous
Material is material, the concentrations exceed state or federal maximum
contaminant or action levels, or any government agency has issued a clean-up or
other order. This indemnification shall survive the expiration or termination of this
Lease. This indemnification includes, but is not necessarily limited to:
27
(g)
(i) Losses attributable to diminution in the value of the Leased Premises;
(ii) Loss or restriction of use of rentable space(s) in the Leased Premises;
(iii) Adverse effect on the marketing of any space(s) in the Leased Premises;
(iv) All other liabilities, obligations, penalties, fines, claims, actions (including
remedial or enforcement actions of any kind and administrative or judicial
proceedings, orders, or judgments), damages (including consequential and
punitive damages), and costs (including attorney, consultant, and expert fees
and expenses) resulting from the release or violation; and,
(v) All, costs (including reasonable attorneys' fees, consulting fees and
subcontracted costs) incurred by Lessor in undertaking any assessment or
remediation of the Leased Premises that might not have been fully resolved
by Lessee by the time this Lease terminates or expires.
Lessor shall have a direct right of action against Lessee even if no third party has
asserted a claim. Furthermore, Lessor shall have the right to assign said indemnity.
Termination of Lease. Upon the expiration or earlier termination of the term of the
Lease, Lessee shall: (i) cause all Hazardous Materials previously owned, stored, or
used by Lessee to be removed from the Leased Premises and disposed of in
accordance with all applicable provisions of law; (ii) remove any underground or
aboveground storage tanks or other containers installed or used by Lessee, or its
predecessors, to store any Hazardous Material on the Leased Premises, and repair
any damage to the Leased Premises caused by such removal; (iii) cause any soil or
other portion of the Leased Premises which has become contaminated by any
Hazardous Material stored or used by Lessee, or its predecessors, to be
decontaminated, detoxified, or otherwise cleaned -up in accordance with the
applicable requirements of any relevant government authorities; and (iv) surrender
possession of the Leased Premises to Lessor free of contamination attributable to
Hazardous Materials generated or used by Lessee or stored or disposed of by any
party other than Lessor in or on the Leased Premises.
45. STORAGE TANKS:
(a) Underground Storage Tanks. No underground storage tanks ("USTs") shall be
permitted to be installed on the Leased Premises during the term of this Lease
without the prior written consent of the Lessor's Executive Director in his or her sole
and absolute discretion. In the event Lessee obtains such approval to install a UST
on the Leased Premises, Lessee shall be responsible for complying with all laws and
regulations pertaining to such UST, including tank monitoring of such UST as
required by the County of San Diego Hazardous Material Management Division
(HMMD) or any other responsible agency. Lessee further agrees to take
responsibility for reporting unauthorized releases from USTS to HMMD and the
Lessor within twenty-four (24) hours of such unauthorized release. Lessee will be
responsible for all fees and costs related to the unauthorized release of any
28
Hazardous Material including, but not limited to: investigative, surface and
groundwater clean-up, and expert and agency fees. Lessee shall maintain evidence
of financial responsibility for taking corrective action and for compensating third
parties for bodily injury and/or property damage caused by a release from a UST.
Lessee further agrees to be responsible for maintenance and repair of the USTs;
obtaining tank permits; filing a business plan with HMMD or other responsible
agency; and for paying UST fees, permit fees, and other regulatory agency fees
relating to USTs.
Lessee agrees to keep complete and accurate records on the Leased Premises for a
period of not less than thirty-six (36) months from the applicable events including,
but not limited to, permit applications, monitoring, testing, equipment installation,
repairing and closure of the USTs, and any unauthorized releases of Hazardous
Materials. Lessee also agrees to make such records available for Lessor or
responsible agency inspection. Lessee further agrees to include a copy of Health
and Safety Code, Chapter 6.7, Section 25299, as part of any agreement between
Lessee and any operator of USTs.
Furthermore, Lessee shall be responsible for compliance with all other laws and
regulations presently existing, or hereinafter enacted, applicable to USTs, including
without limitation any such laws and regulations which alter any of the above
requirements.
(b) Aboveground Storage Tanks. No aboveground storage tanks ("ASTs") shall be
permitted to be installed on the Leased Premises during the term of this Lease
without the prior written consent of the Lessor's Executive Director in his or her sole
and absolute discretion. In the event Lessee obtains such approval to install an
AST, Lessee shall be responsible for complying with all laws and regulations
pertaining to such AST. Lessee shall, in accordance with this Lease and applicable
laws and regulations, secure and pay for all necessary permits and approvals,
prepare a spill prevention control counter measure plan and conduct periodic
inspections to ensure compliance therewith, including conformance with the latest
version of said applicable laws and regulations. In addition, Lessee shall maintain
and repair said tanks to conform and comply with all other applicable laws and
regulations for ASTs, including without limitation all of the requirements of Health &
Safety Code, Chapter 6.67, Sections 25270 through 25270.13 as presently existing
or as hereinafter amended, including without limitation conducting daily visual
inspection of said tanks, allowing the San Diego Regional Water Quality Control
Board ("SDRWQCB"), Lessor, and/or responsible agency, to conduct periodic
inspections. Lessee also shall comply with valid orders of the SDRWQCB, filing the
required storage tank statement and payment of the fee therefor, establishing and
maintaining the required monitoring program and systems, reporting spills as
required, and payment of lawfully imposed penalties as provided therein and as
otherwise provided by law. The Lessee shall be responsible for all costs associated
with any unauthorized release from ASTS, including but not limited to, investigative,
surface and groundwater clean-up, and expert and agency fees.
46. ENVIRONMENTAL DISCLOSURES: Lessee understands and agrees that the
Leased Premises are being leased in an "as is, with all faults" condition and that
29
improvements, grading, filling, removal of existing improvements, and relocation of utility
lines shall be made and performed by Lessee at the sole cost and expense of Lessee.
Lessee further understands and agrees that the "as -is, with all faults" condition of the
Leased Premises includes any contamination of the Leased Premises, including structures,
soils, groundwater, and adjacent San Diego Bay water and sediment, and that information
received from Lessor regarding such matters may not be complete or accurate and should
not be accepted as such.
Lessee hereby acknowledges that excavation of soils from the Leased Premises could
result in exportation of a regulated waste requiring appropriate characterization, handling,
transport and disposal (together "Regulated Waste Removal"). Lessor takes no
responsibility and assumes no liability whatsoever for Regulated Waste Removal.
Accordingly, Lessee hereby waives any claim, or potential claim, it may have to recover
costs or expenses arising out of or associated with Regulated Waste Removal and agrees
to indemnify, defend and hold harmless Lessor from and against any and all claims,
liabilities, losses, damages, costs, and expenses arising from, out of, or in any way related
to Regulated Waste Removal.
Lessor accepts no liability or responsibility for ensuring that Lessee's workers, including
without limitation those conducting testing, construction and maintenance activities on the
Leased Premises, are satisfactorily protected from residual contaminants in 29 Code of
Federal Regulations ("CFR"). Lessee shall assess all human health risks from vapor
transport or direct contact with residual hazardous substances or contaminants and
incorporate such engineering and institutional controls as may be required to sufficiently
protect human health of onsite workers and transient visitors. Lessee hereby waives any
claim, or potential claim, it may have to recover any damages, losses, costs and expenses
related to worker exposure or alleged exposure to any residual onsite contamination and to
indemnify, defend and hold harmless Lessor from and against any and all such claims,
liabilities, losses, damages, costs, and expenses.
47. "AS -IS" LEASE AND WAIVERS: Lessee's execution of the Lease shall fully and
finally constitute:
(a) Lessee's Acknowledgment. Lessee's acknowledgment that Lessor has given to
Lessee sufficient opportunity to consider, inspect and review, to Lessee's complete
satisfaction: (1) any and all rights, appurtenances, entitlements, obligations, and
liabilities concerning the Leased Premises; (2) the physical condition of the Leased
Premises, including, without limitation, the condition of the buildings (if any) and the
soils, subsoil media, and groundwaters at or under the Leased Premises; (3) the
effect upon the Leased Premises of any and all applicable federal, state or local
statutes, ordinances, codes, regulations, decrees, orders, laws or other
governmental requirements (collectively, "Applicable Laws"); (4) the development
potential of the Premises including without limitation on the preceding clause (3), the
effect of all Applicable Laws concerning land use, environmental quality and
maintenance, endangered species, and traffic regulation; (5) the financial prospects
of the Leased Premises and local market conditions; (6) Lessee's determination of
the feasibility of Lessee's intended use and enjoyment of the Leased Premises; and
(7) all other facts, circumstances, and conditions affecting, concerning or relating to
the Leased Premises. The land use; the environmental, biological, physical and
30
legal condition of the Leased Premises; the feasibility of Lessee's intended use and
enjoyment of the Leased Premises and such other facts, circumstances and
conditions being collectively referred to herein as the "Condition of the Leased
Premises"; and, without limitation on any other provision of this Lease, Lessee
expressly assumes the risk that adverse conditions affecting the Leased Premises
have not been revealed by Lessee's investigations.
(b) Only Lessor's Express Written Agreements Binding. Lessee acknowledges and
agrees that no person acting on behalf of Lessor is authorized to make, and that
except as expressly set forth in this Lease, neither Lessor nor anyone acting for or
on behalf of Lessor has made, any representation, warranty, statement, guaranty or
promise to Lessee, or to anyone acting for or on behalf of Lessee, concerning the
Condition of the Leased Premises or any other aspect of the Leased Premises.
Lessee further acknowledges and agrees that no representation, warranty,
agreement, statement, guaranty or promise, if any, made by any person acting on
behalf of Lessor which is not expressly set forth in this Lease will be valid or binding
on Lessor.
(c) As -Is Lease. Lessee further acknowledges and agrees that Lessee's execution of
this Lease shall constitute Lessee's representation, warranty and agreement that the
Condition of the Leased Premises has been independently verified by Lessee to its
full satisfaction, and that, except to the extent of the express covenants of Lessor set
forth in this Lease, Lessee will be leasing the Leased Premises based solely upon
and in reliance on its own inspections, evaluations, analyses and conclusions, or
those of Lessee's representatives; and that LESSEE IS LEASING THE LEASED
PREMISES IN ITS "AS -IS, WITH ALL FAULTS" CONDITION AND STATE OF
REPAIR INCLUSIVE OF ALL FAULTS AND DEFECTS, WHETHER KNOWN OR
UNKNOWN, AS MAY EXIST AS OF THE LESSEE'S EXECUTION OF THIS LEASE.
Without limiting the scope or generality of the foregoing, Lessee expressly assumes
the risk that the Leased Premises do not or will not comply with any Applicable Laws
now or hereafter in effect.
(d) Waivers, Disclaimers and Indemnity.
(i)
Waiver and Disclaimer. Lessee hereby fully and forever waives, and Lessor
hereby fully and forever disclaims, all warranties of whatever type or kind with
respect to the Leased Premises, whether expressed, implied or otherwise
including, without limitation, those of fitness for a particular purpose,
tenantability, habitability or use.
(ii) Lessor's Materials. Lessee further acknowledges that any information and
reports including, without limitation, any engineering reports, architectural
reports, feasibility reports, marketing reports, soils reports, environmental
reports, analyses or data, or other similar reports, analyses, data or
information of whatever type or kind which Lessee has received or may
hereafter receive from Lessor or its agents or consultants have been
furnished without warranty of any kind and on the express condition that
Lessee will make its own independent verification of the accuracy, reliability
and completeness of such information and that Lessee will not rely thereon.
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Accordingly, subject to terms of Paragraph 47(e) below, Lessee agrees that
under no circumstances will it make any claim against, bring any action,
cause of action or proceeding against, or assert any liability upon, Lessor or
any of the persons or entities who prepared or furnished any of the above
information or materials as a result of the inaccuracy, unreliability or
incompleteness of, or any defect or mistake in, any such information or
materials and Lessee hereby fully and forever releases, acquits and
discharges Lessor and each person furnishing such information or materials
of and from, any such claims, actions, causes of action, proceedings or
liability, whether known or unknown.
(e) Release and Waiver.
(i)
Release. Except to the extent of Claims (as defined below) against Lessor
arising from any breach by Lessor of its covenants and obligations expressly
provided in this Lease, Lessee, on behalf of Lessee, its successors and
assigns, hereby fully and forever releases, acquits and discharges Lessor of
and from, and hereby fully forever waives:
Any and all claims, actions, causes of action, suits, proceedings, demands,
rights, damages, costs, expenses, losses, judgments, provisional relief, fines,
penalties, and fees, including, without limitation, any and all claims for
compensation, reimbursement, or contribution whatsoever (individually and
collectively, "Claims.), whether known or unknown, direct or indirect,
foreseeable or unforeseeable, absolute or contingent, that Lessee or any of
Lessee's successors or assigns now has or may have or which may arise or
be asserted in the future arising out of, directly or indirectly, or in any way
connected with: (A) any act or omission of Lessor (or any person acting for or
on behalf of Lessor or for whose conduct Lessor may be liable), whether or
not such act be the active, passive or sole negligence of Lessor, in
connection with prior ownership, maintenance, operation or use of the Leased
Premises; (B) any condition of environmental contamination or pollution at the
Leased Premises (including, without limitation, the contamination or pollution
of any soils, subsoil media, surface waters or groundwaters at the Leased
Premises); (C) to the extent not already included in clause (8) above, the
prior, present or future existence, release or discharge, or threatened release,
of any Hazardous Materials at the Leased Premises, (including, without
limitation, the release or discharge, or threatened release, of any Hazardous
Materials into the air at the Leased Premises or into any soils, subsoils,
surface waters or groundwaters at the Leased Premises); (D) the violation of,
or noncompliance with, any Environmental Requirement or other Applicable
Law now or hereafter in effect, however and whenever occurring; (E) the
condition of the soil at the Leased Premises; (F) the condition of any
improvements located on the Leased Premises including, without limitation,
the structural integrity and seismic compliance of such improvements; (G) any
matters which would be shown on an accurate ALTA land survey of the
Leased Premises (including, without limitation, all existing easements and
encroachments, if any); (H) all Applicable Laws now or hereafter in effect; (I)
matters which would be apparent from a visual inspection of the Leased
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Premises; or (J) to the extent not already covered by any of the foregoing
clauses (A) through (I) above, the use, maintenance, development,
construction, ownership or operation of the Leased Premises by Lessor or
any predecessor(s)-in-interest in the Leased Premises of Lessor.
(ii) Waiver of Civil Code Section 1542. With respect to all releases made by
Lessee under or pursuant to this Paragraph 47, Lessee hereby waives the
application and benefits of California Civil Code § 1542 and hereby verifies
that it has read and understands the following provision of California Civil
Code § 1542:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor."
Lessee:
48. JOINT AND SEVERAL LIABILITY: If Lessee, as a party to this Lease, is a
partnership; joint venture; or is comprised of more than one party or entity, or a combination
thereof; the obligations imposed on Lessee under this Lease shall be joint and several, and
each general partner, joint venturer, party or entity of Lessee shall be jointly and severally
liable for said obligations. Furthermore, nothing herein shall be deemed or construed as
creating a partnership or joint venture between Lessor and Lessee, or between Lessor and
any other entity or party, or cause Lessor to be responsible in any way for the debts or
obligations of Lessee, or any other party or entity.
49. ACKNOWLEDGMENT OF LESSOR'S IMPROVEMENTS: Lessee agrees that it has
examined the Leased Premises and the condition thereof, that the improvements thereon in
their present condition are satisfactory and usable for Lessee's purposes, and that no
representations as to value or condition have been made by or on behalf of Lessor.
50. DISPUTE RESOLUTION: Except for (i) a dispute or disagreement as to the amount
of rent that Lessee is to pay Lessor or (ii) a default in the payment of rent, all other disputes
or disagreements between or among the parties arising out of or relating to the terms,
conditions, interpretation, performance, default or any other aspect of this Lease, such
parties shall first attempt to resolve the dispute informally. In the event the dispute is not
resolved informally, prior to and as a precondition to the initiation of any legal action or
proceeding, the parties shall refer the dispute to mediation before a retired State or Federal
judge mutually selected by the parties. The dispute shall be mediated through informal,
nonbinding joint conferences or separate caucuses with an impartial third party mediator
who will seek to guide the parties to a consensual resolution of the dispute. The mediation
proceeding shall be conducted within thirty (30) days (or any mutually agreed longer period)
after referral, and shall continue until any party involved concludes, in good faith, that there
is no reasonable possibility of resolving the dispute without resort to a legal action or
proceeding. All costs of the mediation shall be shared equally by the parties involved.
Each party shall bear its own attorneys' fees and other costs incurred in connection with the
mediation. In the event the parties are unable to resolve the dispute through mediation, in
addition to any other rights or remedies, any party may institute a legal action.
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