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HomeMy WebLinkAbout2012 CON American Outdoor Advertising - Amendment #2 - Lease Site for Signager SECOND AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE CITY OF NATIONAL CITY AND AMERICAN DIGITAL OUTDOOR, L.P. This Second Amendment to the Lease Agreement is entered into this 30`h day of October 2012, by and between the City of National City, a municipal corporation ("CITY"), and American Digital Outdoor, L.P. ("AO"). RECITALS A. The CITY and AO entered into a Lease Agreement on April 3, 2012 ("the Lease"), for the lease of a vacant parcel of land identified as assessor's parcel number 562 220 41 00, located between the 30th Street cul-de-sac and Interstate 5. B. The Lease sets forth terms and conditions whereby AO will install, operate, and maintain a single -faced digital billboard. C. The parties entered into an Amendment to the Lease in June 2012, to extend the time to obtain Caltrans and City permits. D. The single -faced digital display will be southerly facing and visible to those driving northbound on Interstate 5. E. AO did not originally anticipate that a north facing display would be visible to those driving southbound on Interstate 5, however, it now appears a north facing display may be visible to southbound drivers. F. The parties now desire to allow for a north facing digital display to be built as part of the originally contemplated structure, which may provide opportunities for a more visible gateway and greater revenue generation. NOW, THEREFORE, the parties hereto agree to amend the Lease as follows: 1. AO may build a double-faced Message Center in a "v" concept as more particularly described in Exhibit "A'', whereas a single -faced Message Center was originally set forth in the Lease; 2. The definition of Message Center is amended to allow a double -sided or single - sided digital (LED) display area, whereas the definition prior to this Amendment allows for only single -side digital (LED) display; 3. If AO erects a double-faced message center, both faces are and remain subject to all requirements of the Lease; 4. If AO erects a double-faced message center but determines that the north face will not be visible to southbound traffic, then AO shall remove the north facing portion of the message center in its entirety so that no portion of the north facing message center remains visible; 5. If AO erects the double-faced message center, then the north face shall be subject to, and the revenue it generates part of, the calculation for the Business Revenue Share set forth in Section 3 and in Schedule 1 of the Lease; 6. In addition to the Business Revenue Share, if AO erects the double-faced message center, the parties shall re -open the lease after 12 months of operation to discuss the appropriate amount of an increase to the Monthly Rent set forth in Section 3 and Schedule 1 of the Lease, for a double-faced message center as the Monthly Rent currently contemplated a single -faced message center; and, 7. Each and every term of the Lease, shall remain in full force and effect, except for the amendment contained herein. IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to the Agreement on the date and year first above written above. CITY OF NATIONAL CITY B on Morrison, Mayor PROVED AS TO FORM: C 'udia City Att itua Silva AMERICAN DIGITAL OUTDOOR, L.P. eClair, Managing Partner Second Amendment to Agreement 2 City of National City and October 30, 2012 American Digital Outdoor, LP RESOLUTION NO. 2012 — 219 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE THE SECOND AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE CITY AND AMERICAN DIGITAL OUTDOOR, LP, TO ALLOW FOR A POSSIBLE NORTH FACE TO THE PREVIOUSLY APPROVED SIGNAGE ON A PARCEL OF LAND AT THE END OF THE 30TH STREET CUL-DE-SAC WHEREAS, on April 3, 2012, the City Council adopted Resolution No. 2012-83 approving a Lease Agreement with American Digital Outdoor, LP ("AO"), for the lease of a vacant parcel of land identified as assessor's parcel number 562 220 41 00, located between the 30`h Street cul-de-sac and Interstate 5; and WHEREAS, the Lease sets forth terms and conditions whereby AO will install, operate and maintain a single -faced digital billboard; and WHEREAS, the parties entered into an Amendment to the Lease in June 2012, to extend the time to obtain Caltrans and City permits; and WHEREAS, the single -faced digital display will be southerly facing and visible to those driving northbound on Interstate 5; and WHEREAS, AO did not originally anticipate that a north facing display would be visible to those driving southbound on Interstate 5, however, it now appears a north facing display may be visible to southbound drivers; and WHEREAS, the parties desire to allow for a possible north face to the previously approved signage, which may provide opportunities for a more visible gateway and greater revenue generation. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of National City that the Mayor is hereby authorized to execute the Second Amendment to the Lease Agreement between the City of National City and American Digital Outdoor, LLP, to allow for a possible north face to the previously approved signage on a parcel of land at the end of the 30th Street cul-de-sac. Said Second Amendment to the Lease Agreement is on file in the office of the City Clerk. ATTEST: PASSED and ADOPTED this 30th day of October, 12. 1 Mic ael R. Dalla, City Clerk Mor so , ayor A' POVED AS TO FORM: Claudia G- �' ua Silva City Atto Passed and adopted by the Council of the City of National City, California, on October 30, 2012 by the following vote, to -wit: Ayes: Councilmembers Morrison, Natividad, Rios, Sotelo-Solis, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California Clerk of the i ot�iN City ty ational City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2012-219 of the City of National City, California, passed and adopted by the Council of said City on October 30, 2012. City Clerk of the City of National City, California By: Deputy CITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT MEETING DATE: October 30, 2012 AGENDA ITEM NO. 11 ITEM TITLE: Resolution of the City Council of the City of National City authorizing the Mayor to execute a Second Amendment to the Lease Agreement between the City of National City and American Digital Outdoor, L.P., to allow for a possible north face to previously approved signage on a parcel of land at the end of the 30th Street cul-de-sac. PREPARED BY: Leslie Deese, City Manager /Claudia Silva, City AttorneyDEPARTMENT: City Manager/C,ty PHONE: 619 -336-4240 619-336-4222 APPROVED B • EXPLANATION: See attached Staff Report torney FINANCIAL STATEMENT: ACCOUNT NO. N/A ENVIRONMENTAL REVIEW: N/A ORDINANCE: INTRODUCTION: FINAL ADOPTION: APPROVED: APPROVED: Finance MIS STAFF RECOMMENDATION: Adopt Resolution BOARD / COMMISSION RECOMMENDATION: N/A 1TTACH M E NTS: Staff Report Resolution STAFF REPORT The purpose of this staff report is to request the City Council approve a resolution to execute a second amendment to the lease agreement between the City of National City and American Outdoor to allow for a possible north face to previously approved signage on a parcel of land at the end of the 30th Street cul-de-sac. Representatives from American Outdoor recently approached City staff with a proposal to allow for an additional LED digital display face on the north side of the sign structure. The base rent paid to the City will remain the same as described in the original agreement (attached) and 33% of the gross revenue (after ad agency commissions, if applicable) will be paid to the City for any revenue generated on the north face. Both the City and American Outdoor understand that the additional north face may have limited or no commercial. If that is the case, the display may be used for public service announcements or by the City to advertise itself or community events. Utility costs to illuminate the north face will be born by American Outdoor. If American Outdoor erects the double-faced message center, the City and American Outdoor shall re -open the lease after 12 months of operation to discuss the appropriate amount of an increase to the Monthly Rent as set forth in Section 3 and Schedule 1 of the Lease for a double-faced message center as the Monthly Rent currently contemplated a single -faced message center. If it is determined that the north face isn't visible, it will be removed by American Outdoor. • • RESOLUTION NO. 2012 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE THE SECOND AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE CITY AND AMERICAN DIGITAL OUTDOOR, LP, TO ALLOW FOR A POSSIBLE NORTH FACE TO THE PREVIOUSLY APPROVED SIGNAGE ON A PARCEL OF LAND AT THE END OF THE 30TH STREET CUL-DE-SAC WHEREAS, on April 3, 2012, the City Council adopted Resolution No. 2012-83 approving a Lease Agreement with American Digital Outdoor, LP ("AO"), for the lease of a vacant parcel of land identified as assessor's parcel number 562 220 41 00, located between the 30th Street cul-de-sac and Interstate 5; and WHEREAS, the Lease sets forth terms and conditions whereby AO will install, operate and maintain a single -faced digital billboard; and WHEREAS, the parties entered into an Amendment to the Lease in June 2012, to extend the time to obtain Caltrans and City permits; and WHEREAS, the single -faced digital display will be southerly facing and visible to those driving northbound on Interstate 5; and WHEREAS, AO did not originally anticipate that a north facing display would be visible to those driving southbound on Interstate 5, however, it now appears a north facing display may be visible to southbound drivers; and WHEREAS, the parties desire to allow for a possible north face to the previously approved signage, which may provide opportunities for a more visible gateway and greater revenue generation. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of National City that the Mayor is hereby authorized to execute the Second Amendment to the Lease Agreement between the City of National City and American Digital Outdoor, LLP, to allow for a possible north face to the previously approved signage on a parcel of land at the end of the 30th Street cul-de-sac. Said Second Amendment to the Lease Agreement is on file in the office of the City Clerk. PASSED and ADOPTED this 30th day of October, 2012. Ron Morrison, Mayor ATTEST: APPROVED AS TO FORM: Michael R. Dalla, City Clerk Claudia Gacitua Silva City Attorney SECOND AMENDMENT TO THE LEASE AGREEMENT BETWEEN THE CITY OF NATIONAL CITY AND AMERICAN DIGITAL OUTDOOR, L.P. This Second Amendment to the Lease Agreement is entered into this 30th day of October 2012, by and between the City of National City, a municipal corporation ("CITY"), and American Digital Outdoor, L.P. ("AO"). RECITALS A. The CITY and AO entered into a Lease Agreement on April 3, 2012 ("the Lease"), for the lease of a vacant parcel of land identified as assessor's parcel number 562 220 41 00 located between the 30th Street cul-de-sac and Interstate 5. B. The Lease provides sets forth terms and conditions whereby AO will install, operate and maintain a single faced digital billboard. C. The parties entered into an Amendment to the Lease in June 2012 to extend the time to obtain Caltrans and City permits. D. The single faced digital display will be southerly facing and visible to those driving northbound on Interstate 5. E. AO did not originally anticipate a north facing display would be visible to those driving southbound on Interstate 5, however, it now appears a north facing display may be visible to southbound drivers. F. The parties now desire to allow for a north facing digital display to be built as part of the originally contemplated structure, which may provide opportunities for a more visible gateway and greater revenue generation. NOW, THEREFORE, the parties hereto agree to amend the Lease as follows: 1. AO may build a double-faced Message Center in a "v" concept as more particularly described in Exhibit A, whereas a single -faced Message Center was originally set forth in the Lease; 2. The definition of Message Center is amended to allow a double -sided or single - sided digital (LED) display area, whereas the definition prior to this Amendment allows for only single -side digital (LED) display; 3. If AO erects a double-faced message center, both faces are and remain subject to all requirements of the Lease; 4. If AO erects a double-faced message center but determines that the north face will not be visible to southbound traffic, then AO shall remove the north facing portion of the message center in its entirety so that no portion of the north facing message center remains visible; 5. If AO erects the double-faced message center, then the north face shall be subject to, and the revenue it generates part of, the calculation for the Business Revenue Share set forth in Section 3 and in Schedule 1 of the Lease; 6. In addition to the Business Revenue Share, if AO erects the double-faced message center, the parties shall re -open the lease after 12 months of operation to discuss the appropriate amount of an increase to the Monthly Rent set forth in Section 3 and Schedule 1 of the Lease, for a double-faced message center as the Monthly Rent currently contemplated a single -faced message center; and, 7. Each and every term of the Lease, shall remain in full force and effect, except for the amendment contained herein. IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to the Agreement on the date and year first above written above. CITY OF NATIONAL CITY AMERICAN DIGITAL OUTDOOR, L.P. By: By: Ron Morrison, Mayor Tom LeClair, Managing Partner APPROVED AS TO FORM: Claudia Gacitua Silva City Attorney Second Amendment to Agreement 2 City of National City and October 30, 2012 American Digital Outdoor, LP N paSr�E To? V E'J 2'1i5 Sr U c" Y sr, Sy V(GIIJrrY tlgi 17oQa5£2 PIGITAL /e-43>A+e2:> CEAIT“MauNT V,. SNAP go ' O.A. , / wr A pn) 1. £ — Z2a-¢! 00 NATroNAL Gtrr, GA 1-ai W. 30 sf.„4 VP. CPNT: AMEfiO4,1 PIy I TA o✓rom2- I9 Z E-. NI(,MrAIJ-' 4 304 714cENo c, A2 gS rt. Coprncr' T6H tt CC Ria. fuoeac: `(-ob) 417. S45-' EMAIL' TaHo At,e4, o3 oUTDW¢. 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APN 562 220 41 00 The City of National City (the "City"), a California Municipal Corporation, and American Digital Outdoor, L.P. ("AOA"), a California Corporation, hereby amend the Lease made and entered the 3rd day of April, 2012 as follows: Recitals A. Effective as of April 3, 2012 the City and AOA entered into a Lease for a vacant parcel of land identified as Assessor's Parcel Number 562 220 41 00 (the "Parcel"), located between the 30th Street cul-de-sac and Interstate 5. B. The Lease sets forth terms and conditions whereby AOA will install, operate and maintain a digital billboard on the Parcel. C. Pursuant to the terms of the Lease AOA is obligated to obtain Caltrans and City Permits by a date certain. D. Despite best efforts AOA has not yet been able to obtain the Caltrans or City Permits. E. The Lease also requires AOA to prepay rent to the City one day after securing the Caltrans and City Permits, but no later than June 30, 2012. F. The parties wish to amend the Lease to allow AOA additional time to obtain the required Caltrans and City Permits. G. In the interim AOA will deposit the rental prepayment as a sign of good faith. H. The parties wish to select an escrow agent to accept and hold AOA's rental prepayment in escrow, subject to the terms of the Lease. I. The parties intend this document to memorialize their agreement and understanding. AGREEMENT NOW, THEREFORE, in consideration of the recitals and promises contained herein, and other good and valuable consideration the receipt of which is hereby acknowledged, the parties agree as follows: 1. Creation of Escrow Account. The parties hereby amend the Lease by adopting and inserting a new sections 3(d), 3(e) and 3(f) as follows: 7 3(d) Escrow Account for Rental Prepayment. The City and AOA agree to create and establish an Escrow Account in the event that AOA is not able to secure the issuance of the City Permits and/or Caltrans Permits on or before June 30, 2012. The City and AOA select The Bank of New York Mellon Trust Company ("Mellon Trust") as escrow agent, and by signing below Mellon Trust accepts appointment of escrow agent pursuant to the escrow instructions set forth below. 3(e) Escrow Instructions. In the event that the City Permits and Caltrans Permits have not been issued, on or before June 30, 2012 AOA shall deliver to Mellon Trust as escrow agent the rental prepayment described in section 3(c), above. Mellon Trust shall hold the rent prepayment in escrow in a non -interest bearing account until the occurrence of the earlier of the following events: One day after AOA is issued both the City Permits and the Caltrans Permits, Mellon Trust shall release to the City the rental fee payment held in escrow, subject to all of the terms and conditions of the Lease. In the event that AOA is not able to secure issuance of the City Permits and Caltrans Permits on or before December 31, 2012, then AOA may exercise its right to terminate the Lease pursuant to section 6(b)(4), below, and upon the effective date of termination, Mellon Trust shall return to AOA the rental prepayment held in escrow. 2. Reaffirmation of Lease; Controlling Document. The City and AOA reaffirm the continuing validity and enforceability of all other terms and conditions of the Lease and incorporate same by reference as if set forth fully below. In the event of any conflict between the Lease and this Amendment, the terms and conditions of this Amendment shall control. IN WITNESS WHEREOF, the parties have executed this Amendment to the Lease effective as of the day of June 2012. CITY! F NATIONAL CITY AMER DIGITAL OUTDOOR, LP Morrison, ayor Tom LeClair ROVED AS TO FORM: C is Gaci " Silva City Attorne Managing Member THE BANK OF NEW YORK MELLON TRUST COMPANY hereby accepts appointment of and agrees to act as escrow agent pursuant to the terms of the Lease and this Amendment. 2 THE BANK OF NEW YORK MELLON TRUST COMPANY By Its Date LEASE AGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND AMERICAN DIGITAL OUTDOOR, L.P. APN 562 220 41 00 This Lease is made and entered into this 3`d day of April, 2012, by and between the City of National City (the "City"), a California municipal corporation, and American Digital Outdoor, L.P. ("AOA"), a California Corporation. Recitals A. The City owns a parcel of land, identified as Assessor's Parcel Number 562 220 41 00 [the "Parcel"], which is located adjacent to Interstate 5, a local freeway, and is further described by legal description in Exhibit "A" to this Lease. B. The location of the Parcel makes it suitable for the operation of a digital billboard which could generate additional revenue for municipal purposes. C. The City desires to lease the Parcel to an outdoor -advertising company that will install, operate and maintain a digital billboard on it. D. The City issued a Request for Qualifications and AOA responded to the City's request for qualifications for a signage program. E. AOA was found to be qualified based on extensive experience in successfully installing, operating, and maintaining digital billboards throughout the United States F. AOA desires to lease the Parcel from the City for the purpose of installing, operating, and maintaining digital billboards, and it has the requisite resources and expertise to do so successfully. G. AOA is also willing and able to comply with the conditions set forth in the National City Municipal Code currently in affect and as may be in effect by future amendment. AGREEMENT NOW, THEREFORE, with these recitals in mind, the parties agree as follows: Definitions. This section defines the terms "Business Day", "Caltrans", "Caltrans Permits", "City Permits", "Commencement Date", "Digital Billboard", "Effective Date", "Hazardous Substances", "include", "Lease Year", Message Center", "Operational", "Premises", "Sign Structure", and "Term". Other terms are defined elsewhere in this Lease. Lease Agreement (k) (0 (g) (h) (i) (a) "Business Day" means any day the City's main offices located at 1243 National City Boulevard, National City, California, are open to the public. (b) "Caltrans" means the California Department of Transportation. (c) "Caltrans Permits" means all permits and approvals that AOA must obtain from Caltrans to install, operate and maintain the Digital Billboard in accordance with this Lease. (d) "City Permits" means all building permits, zoning amendments, and other permits, entitlements and agreements that the City, acting in its governmental capacity, must issue or approve for AOA to install, operate and maintain the Digital Billboard in accordance with this Lease. Neither this definition nor this Lease obligate the City to issue or approve any discretionary permit, or to approve any legislative act. The City retains all discretion in any and all approvals and/or legislative decisions that may be needed for AOA to operate a Digital Billboard. (e) "Commencement Date" means the first day of the first month all of the following have occurred: the City has approved the Plans (defined in Section 5(a)), and AOA has received all necessary governmental permits and approvals for the Digital Billboard, including the Caltrans Permits and the City Permits, and the sign structure and message center have been installed, is operational, and ready to accept commercial advertising. "Digital Billboard" means the single -sided outdoor -advertising sign that AOA will install and operate on the Premises in accordance with the criteria set forth in Exhibit "B" to this Lease. The Digital Billboard consists of a Message Center and a Sign Structure. "Effective Date" means the date as of which both the City and AOA have signed this Lease, as indicated by the dates in the signature blocks below. "Hazardous Substances" means any material or substance identified in Exhibit "C" to this Lease. "Include" and its variants are not restrictive. For example, "includes" means "includes, but not limited to," and "including" means "including, but not limited to." (j) "Lease Year" means one of the consecutive 12-month periods during the Term. The first Lease Year begins when the Initial Term begins. "Message Center" means the portion of the Digital Billboard that consists of a single -sided digital (LED) display area used for general commercial advertising, with the display area measuring 14 feet high and 48 feet wide. The Message Center is more particularly described in Exhibit `B". (1) "Operational" means the Digital Billboard is capable, legally and functionally, of displaying advertising on the Message Center. 2 City of National City and American Digital Outdoor, LP 11 (m) "Premises" or "Parcel" means the City -owned real property referenced herein as Assessor's Parcel Number 562 220 41 00, and further described and depicted in Exhibit "A". (n) "Sign Structure" means the portion of the Digital Billboard other than the Message Center, and it includes all ancillary equipment and utilities installed on the Premises. The Sign Structure is more particularly described in Exhibit "B". (o) "Term" means the entire time this Lease is in effect. As specified in Section 2, it consists of the Initial Term, the Extended Term, and any period of holding over. I. Lease of Premises. The City hereby leases the Premises to AOA, and AOA hereby leases the Premises from the City, on the terms and conditions set forth in this Lease. 2. Term of Lease. (a) Initial Term. The "Initial Term" of this Lease commences on the 1st (first) day of the 1st (first) month when electricity is delivered to the Premises and ends 15 years after the date the Initial Term commences. (b) Extended Term. At the end of the Initial Term, AOA will have the right to extend this Lease for an additional five (5) years upon mutually acceptable terms and conditions, which shall be no less than those that applied during the Initial Term. To exercise its right to the Extended Term, AOA must not be in default of this Lease, must give the City a written notice of extension no earlier than 180 days and not later than 90 days before the Initial Term ends, and must have negotiated a mutually acceptable monthly rent with the City. The Extended Term begins when the Initial Term ends, and it ends five years after that date. (c) Expiration of Lease and Holding Over. This Lease expires automatically at the end of the Initial Term, unless extended in accordance with Section 2(b). If this Lease is extended, then it expires automatically at the end of the Extended Term. Any holding over after expiration will not constitute a renewal of this Lease, but will be on a month -to -month tenancy on the same terms and conditions that applied at expiration. 3. Consideration. As consideration for the rights and benefits it enjoys under this Lease, including the use and occupancy of the Premises during the Term, AOA shall do all of the following: (a) Rent. Each month during the Initial Term, AOA shall pay the City the "Monthly Rent" set forth in Schedule 1. (1) Monthly Rent is due and payable on the first day of each calendar month at the address set forth for the City in Section 11(a). Any installment of Monthly Rent that is not paid within 20 days after it is due and payable will increase by 5%. (2) AOA shall maintain and make available at its Phoenix office, for the Lease Agreement 3 City of National City and American Digital Outdoor, LP (b) City's review and audit all contracts, leases, invoices and other records that are relevant to the accurate determination of Monthly Rent in accordance with Schedule 1. After the Monthly Rent for a five-year period has been determined in accordance with Schedule 1, AOA shall retain the related records for at least three (3) years. Business Revenue Share. In addition to the Monthly Rent payment, AOA shall pay a business revenue share. AOA shall make this payment on the last day of the twelfth month following the Initial Term, on an annual basis in arrears, one-third (1/3) of the Annual Net Revenue that exceeds the annual rent, as set forth in Schedule 1. For example, if July 1, 2012 is the commencement of the Initial Term, then the business revenue share would be payable on July 31, 2013 and would cover the time period of July 1, 2012 through June 30, 2013. (c) Prepayment of Monthly Rent for Months 1 (One) through 60 (Sixty). AOA shall prepay the first 60 months of rent on the first day following the day the building permit from the City and the CalTrans Permit have been issued, but no later than June 30, 2012. AOA prepayment of rent shall be discounted for present day value, for a total discounted amount due of $450,000. 4. Use of Premises. (a) Condition of Premises. The City makes no representations or warranties of any kind, express or implied, written or oral, about any of the following: the physical condition of the Premises; the suitability of the Premises for AOA's anticipated use; any limitations on AOA's use of the Premises, including limitations arising from zoning laws, environmental laws, or other laws, regulations, or govemmental requirements; the costs of conducting AOA's business on the Premises; or the condition of the soils or ground waters of the Premises. By taking possession of the Premises, AOA accepts the Premises "as is" and acknowledges that the Premises are satisfactory for AOA's purposes. AOA has ascertained the condition of the Premises through its own independent investigation and has relied solely on that independent investigation when entering into this Lease. (b) Permitted Uses. Except as otherwise provided in Section 5(k), AOA has the exclusive right to display outdoor advertising on the Premises. The City shall not authorize any other off -site outdoor advertising on the Premises. AOA's exclusive right to conduct outdoor advertising on the Premises includes the following: (1) Installing, operating, maintaining, repairing, improving, repositioning (with the City's consent), and removing the Digital Billboard on or from the Premises when this Lease terminates. (2) All rights of ingress and egress over the Premises that AOA needs to access the Digital Billboard, including the right to extend utility service to the Digital Billboard. Lease Agreement 4 City of National City and American Digital Outdoor, LP • • 13 (3) (c) Prohibited Uses. (1) Hazardous Substances. AOA shall not use, handle, store, transport, generate, release, or dispose of any Hazardous Substances on, under or about the Premises, except as follows: AOA may use Hazardous Substances that AOA needs to install, operate, maintain, repair, improve, reposition, or remove the Digital Billboard in accordance with this Lease if the City has consented in writing before the Hazardous Substances are brought on the Premises. Within 10 days after receiving the City's written request, AOA shall disclose in writing all Hazardous Substances then being used on the Premises, the purpose and duration of the use, and the manner of storage and disposal. (2) Unlawful Activities. AOA shall not use or permit the Premises to be used in any way that violates this Lease or any valid and applicable statute, ordinance, regulation, rule, or order of any federal, state or local governmental entity (including the City). AOA shall not maintain or commit, or permit the maintenance or commission of, any public or private nuisance as defined by any law applicable to the Premises on or after the Effective Date. AOA hereby waives any rights to compensation it may have if a court finds that the Digital Billboard constitutes a public or private nuisance under any valid and applicable federal, state or local law, and for that reason orders AOA to remove or modify the Digital Billboard or to limit the operation of the Message Center. Encumbrances. AOA shall not encumber the Premises or any part of the Premises or the Digital Billboard or any part of the Digital Billboard for any purpose without the City's prior written consent, which the City may withhold for any reason. AOA shall keep the Premises and the Digital Billboard free of all liens and other encumbrances other than those, if any, to which the City consents. (d) Unobstructed Use. (1) The City shall not allow any landscaping or other structure to be planted or developed on the Premises, or on immediately adjoining property owned and controlled by the City, that would impair the visibility of the Digital Billboard from northbound Interstate 5. AOA shall be responsible for addressing any existing vegetation or obstruction currently located on the Premises. City makes no warranties or representations regarding the existing visibility of the potential Digital Billboard from northbound Interstate 5. (2) If AOA notifies the City in writing that an obstruction exists, and if the City authorized or actively caused the obstruction, then the City shall remove or remedy the obstruction at its own cost within 15 days after receiving the notice. Lease Agreement 5 City of National City and American Digital Outdoor, LP (3) (5) If AOA notifies the City in writing that an obstruction exists, and if the City did not authorize or actively cause the obstruction, then the City may remove or remedy the obstruction at its own cost within 15 days after receiving the notice, at its sole discretion. If the City does not remove or remedy the obstruction within the 15 days, then, at no cost to the City, and after coordinating with the appropriate department(s) of the City, AOA may remove the obstruction described in the notice. (4) AOA's exercise of its rights under this Section 4(d) are in addition to any other remedies it may have under this Lease. There may be easements for ingress and egress by other public agencies or utilities. These easements shall not be considered obstructions. AOA enters into this Lease subject to and in acceptance of those easements. 5. Installation and Operation of Digital Billboard. AOA shall install and operate the Digital Billboard on the Premises in accordance with this Section 5 and consistent with Section 4, all at no cost to the City. (a) Plans and Specifications. At no cost to the City, AOA shall prepare complete plans and specifications for the Digital Billboard, working closely with the City to develop plans and specifications that are mutually acceptable (the "Plans"). AOA shall submit the Plans to the City for final approval, which the City shall not withhold unreasonably. Caltrans Permits. As soon as practicable after the Effective Date, AOA shall apply to Caltrans for all Caltrans Permits, and the City shall cooperate with AOA in that effort, all at no cost to the City. At its discretion, AOA may designate the City as the permittee under the Caltrans Permits, but that designation will confer no legal rights on City to use, encumber or transfer the Caltrans Permits, except as may be necessary for the parties to benefit from the Digital Billboard during the Term. Upon termination of this Lease, the City shall relinquish any interest it may have in the Caltrans Permits and execute any documents needed to confirm that AOA is the sole owner of the Caltrans Permits. AOA shall perform all obligations wider the Caltrans Permits at no cost to the City whether AOA or the City is designated as the pennittee. City Permits. The City shall diligently process AOA's applications for all City Permits. This Lease does not commit the City in advance to approve the City Permits; and this lease does not constrain the City's discretion, acting as a government, with respect to the City Permits specifically or to the Digital Billboard generally. The City retains all discretion in any and all approvals and/or legislative decisions which may be related to the operation of digital billboards, and nothing in this Lease shall be construed to constrain the City's discretion in this regard in any way. (d) Installation. AOA shall begin installing the Digital Billboard as soon as practicable after the Effective Date, and shall diligently pursue installation to (b) (c) Lease Agreement 6 City of National City and American Digital Outdoor, LP IS • • completion without unnecessary interruption so that the Digital Billboard is Operational before the 180`h day after the Effective Date. AOA will be excused, however, for any delays in beginning or completing installation that are caused by a Force Majeure Event, as defined in Section 11(e)(1). AOA shall use reasonable diligence to avoid such delays and to resume work as promptly as possible after such a delay. (e) Ownership. AOA will own the Digital Billboard during the Term. (1) Security Fences. Before beginning installation of the Digital Billboard, AOA shall enclose, with a temporary security fence, the portion of the Premises AOA needs to install, operate, maintain and repair the Digital Billboard. AOA shall maintain the temporary security fence until AOA replaces it with a permanent security fence that circumscribes an area coextensive with the area the temporary fence circumscribed. AOA shall install the permanent security fence around the Digital Billboard at the beginning of the Operations Phase, and maintain that fence until the end of the Term. AOA shall install and maintain the temporary and permanent fences at no cost to the City, and shall consult with the City on each fence's location and design. Any such fencing shall not impair any existing easements over the Premises for ingress and egress by other public agencies, utilities, or entities. (g) Maintenance. At no cost to the City, AOA shall maintain the Premises and shall maintain, repair, and improve the Digital Billboard in accordance with the highest standards of the outdoor -advertising industry. AOA's maintenance obligation under this Section 5(g) includes the obligation to remove promptly any graffiti from the Premises and the Digital Billboard. AOA's obligation to improve the Digital Billboard under this Section 5(g) includes the obligation to replace the entire Message Center after ten years if the Message Center falls below prevailing industry standards at that time. The City is not obligated to maintain the Premises or to maintain or repair the Digital Billboard. If, however; AOA does not maintain the Premises, then the City may notify AOA in accordance with Section 11(a) that the City will perform the maintenance described in the notice if AOA does not do so within 10 Business Days. If AOA does not perform the needed maintenance within 10 Business Days after the notice is given, then the City may perform the maintenance described in the notice, and AOA shall reimburse the City's costs. (h) Insured Damage or Destruction. This Lease will continue in full effect if the Digital Billboard is damaged or destroyed in whole or part by any cause covered by the fire -and -casualty insurance AOA is required to maintain under Section 10(a)(3), subject to the following: (1) AOA shall repair or replace the Digital Billboard at no cost to the City using the insurance proceeds AOA receives or is entitled to receive under the fire -and -casualty policy. AOA shall promptly apply for, and diligently pursue the issuance of, any permits or approvals it needs to repair or replace the Digital Billboard. Within 30 days after obtaining the necessary permits and approvals, AOA shall begin work to repair or replace the Lease Agreement 7 City of National City and American Digital Outdoor, LP /6 (i) Lease Agreement Digital Billboard. AOA shall complete the work within 180 days after the work begins and shall pay any costs that exceed the available insurance proceeds. (2) AOA may elect not to repair or replace the Digital Billboard if: (A) the cost to repair or replace it exceeds 50% of its fair -market value immediately before it is damaged or destroyed; and (B) the damage or destruction occurs: (3) during the last two years of the Initial Term (if AOA opts not to extend this Lease under Section 2(b)); or (ii) during the last two years of the Extended Term (if AOA opts to extend this Lease under Section 3(b)). if AOA elects, under Section 5(h)(2), not to repair or replace the Digital Billboard, then AOA shall— (i) (A) notify the City in writing of its election; (B) use the insurance proceeds AOA receives for the damage or destruction to remove the Digital Billboard and restore the Premises in accordance with Section 5(1); and (C) pay to the City half of the insurance proceeds that remain after AOA has performed under Section 5(h)(3)(B), and this Lease will terminate when those proceeds are so paid. Uninsured Damage or Destruction. This Lease will continue in full effect if the Digital Billboard is damaged or destroyed in whole or part by any cause not covered by the fire -and -casualty insurance AOA is required to maintain under Section 10(a)(3) if the cost to repair the damage is less than or equal to twelve times the Monthly Rent in effect when the damage occurs. AOA shall repair the damage at no cost to the City as soon as is reasonably practicable. (j) Utilities. At no cost to the City, AOA shall provide and pay for all utility connections, utility equipment, and utility service required to install, operate, maintain, repair, improve, or reposition the Digital Billboard throughout the Tenn. AOA shall coordinate with the City and San Diego Gas and Electric ("SDG&E") for utility tie-ins and electrical power sources that AOA may need to operate the Digital Billboard. (k) Advertising Rights. During the Term, AOA will have the exclusive right to enter into agreements for advertising on the Digital Billboard, subject to the following: (1) Operation of the Message Center. In operating the Message Center, AOA shall conform to all valid and applicable laws and regulations, including 8 City of National City and American Digital Outdoor, LP Lease Agreement laws and regulations pertaining to outdoor advertising. AOA shall not display any message that in the judgment of the City Manager or the City Manager's designee: (A) is false, misleading, or deceptive; (B) promotes the sale or use of tobacco products, or medical marijuana, whether directly or indirectly; (C) depicts violence or anti -social behavior or relates to illegal activity; (D) contains "obscene matter", as that term is defined in California Penal Code section 311 at the time of the Effective Date, or promotes adult entertainment; (E) promotes or opposes a candidate for public office, or promotes or opposes a ballot measure; (F) holds a person or group of persons up to public ridicule, derision or embarrassment, or defames a person or group of persons; or (G) contains language that is obscene, vulgar, profane, or scatological, or that presents a clear -and -present danger of causing riot, disorder or other imminent threat to public safety, peace or order. (H) advertises automobile dealerships or auto malls located outside the City of National City. (I) advertises shopping malls located outside the City of National City. (J) promotes the sale or use of alcohol for more than 25% of the advertising time on the Digital Billboard or without a specific warning encouraging consumers to drink responsibly. (2) Amber Alerts and Public -Service Messages. AOA shall make the Message Center available to Caltrans for the purpose of displaying "Amber Alert" messages in accordance with the Amber Alert Guidelines set forth in Exhibit "D" to this Lease. In addition, AOA shall make the Message Center available to Caltrans, to the City, and to other government agencies, on a space -available basis and without cost, for the purpose of displaying public-service messages (e.g., reports of commute times, drunk -driving -awareness messages, reports of serious accidents, emergency -disaster communications). Alternatively, AOA may include such public-service messages in the body of commercial advertising. As used in this Section 5(k)(2) and in Section 5(k)(3), "space -available basis" means any time when AOA has not sold out the display time on the Message Board. 9 City of National City and American Digital Outdoor, LP (1) (m) City Messages. At the request of the City Manager or the City Manager's designee, AOA shall make the Message Center available to the City, on a space -available basis, for the purpose of displaying the City's own commercial or noncommercial messages. The City's messages must meet AOA's graphics -arts standards so that the messages are "camera ready", at no cost to AOA. AOA shall duplicate (e.g., digitalize), install and display each City message for at least 20 consecutive days at no cost to the City. (4) City Sign. On each side of the Sign Structure, AOA shall install, operate, maintain, and repair a City sign that faces the same direction as a display area on the Message Center. The size and design of the City sign shall substantially comply with the criteria set forth in Exhibit "B". Removal of Digital Billboard. Within 60 days after the Term ends, whether the Term expires as scheduled or is terminated early for any reason, AOA shall remove the Digital Billboard from the Premises and shall restore the Premises to their pre -lease condition, all at no cost to the City. Compliance with Laws; Waiver of Compensation. During the Term and while removing the Digital Billboard after the Term, in accordance with Section 5(1), AOA shall do the following at no cost to the City: comply with all valid and applicable statutes, ordinances, regulations, rules, and orders that concern the Premises or the Digital Billboard and are enacted or issued by any federal, state or local governmental entity with jurisdiction over the Premises or the Improvements (including the City) whether enacted or issued before, on or after the Effective Date. (3) (n) Other potential sites. During the first eighteen months after the Effective Date, should the City make available a City -owned property for possible installation of a digital billboard, AOA shall have the first opportunity to enter into negotiations with the City to negotiate a possible agreement for the site. City shall retain all discretion during any such negotiations and is not under obligation to agree on terms. 6. Early Termination. (a) City's Termination Rights. Without prejudice to its other remedies at law or in equity, the City may terminate this Lease, at any time and in its sole discretion, effective 30 days after the City gives AOA written notice of termination, if any of the following circumstances occurs: Lease Agreement (1) AOA breaches its obligation to pay Monthly Rent when due and does not cure the breach within 30 days after the City serves AOA with a written notice of breach. (2) AOA breaches its obligation to perform in accordance with any material provision of this Lease other than the obligation to pay Monthly Rent and (A) does not cure the breach within 30 Business Days after the City serves 10 City of National City and American Digital Outdoor, LP (3) it with a written notice of breach; or, (B) if the breach cannot reasonably be cured within 30 Business Days, does not begin work on a cure within 30 Business Days after the City serves it with a written notice of breach and diligently pursue the cure to completion within 90 days after work begins. The express designation in this Lease of a provision as "material" does not imply that other provisions are not material. The Digital Billboard is not Operational by the 180th day after the Effective Date. (b) AOA 's Termination Rights. Without prejudice to its other remedies at law or in equity, including the right to seek just compensation under the laws of eminent domain as described in Section 8, AOA may terminate this Lease, at any time and in its sole discretion, effective 30 days after AOA gives the City written notice of termination, if any of the following circumstances occurs: (c) The view of the Message Center's display area from the portion of Interstate 5 adjacent to the Premises is materially obstructed, and AOA did not cause the obstruction. This Section 6(b)(1) does not apply to obstructions covered by Section 4(d). (2) AOA cannot safely use the Premises to install, operate, maintain, repair, or improve the Digital Billboard because of a non -remediable condition, and AOA did not cause the condition. (I) (3) There is a material diversion of traffic from, or a material reduction or change in the directional flow of traffic on, the portion of Interstate 5 adjacent to the Premises, and the diversion or disruption continues uninterrupted for at least 24 consecutive months. (4) Through no fault of its own, AOA cannot obtain or maintain the governmental permits required to install, operate, maintain, repair, or improve the Digital Billboard, including the Caltrans Permits and the City Permits. (5) Use of the Message Center for its intended purpose is prevented or limited by law, or AOA is required by any court or other governmental entity, for reasons other than eminent domain, to remove the Digital Billboard from the Premises. (6) The Digital Billboard is damaged by a casualty for which AOA is not required under this Lease to carry insurance, and the cost to repair the damage exceeds twelve times the Monthly Rent in effect when the damage occurs. AOA 's Right to Renegotiation. If any of the circumstances identified in Section 6(b) occurs, then, at its discretion and in lieu of termination, AOA may request that the City negotiate on reducing the Monthly Rent to an amount that reasonably reflect the diminished value of the Digital Billboard to AOA, and on receiving the Lease Agreement 11 City of National City and American Digital Outdoor, LP request the City shall negotiate in good faith with AOA. The City is not required, however, to agree on a reduction. (d) City's and ACA's Additional Termination Rights. Without prejudice to their other remedies at law or in equity, either party may terminate this lease if the other party (or, for AOA, its parent company)— (1) has an order for relief entered with respect to it, commences a voluntary case, or has an involuntary case filed against it under any applicable bankruptcy, insolvency, or other similar law then in effect, and the order or case is not stayed, withdrawn, or settled within 60 days after it is entered, commenced, or filed (11 U.S.C. § 365(e)(2)(A), as amended, or any successor statute); or (2) files for reorganization, becomes insolvent, or has a receiver or other officer with similar powers appointed for its affairs in any court with jurisdiction, whether or not with its consent (unless dismissed, bonded or discharged within 60 days after appointment). 7. Taxes. AOA is responsible for and shall pay or otherwise discharge, without abatement or deduction, all taxes levied on, or related to, AOA's outdoor -advertising activities on the Premises. AOA recognizes and understands that this Lease may create a possessory interest subject to property taxation and that AOA may be subject to the payment of property taxes levied on such interest. AOA further agrees to pay any and all property taxes, if any, assessed during the term of this Lease pursuant to Sections 107 and 107.1 of the Revenue and Taxation Code against AOA's possessory interest in the lease premises. This obligation includes payment of any — (a) sales or similar tax on AOA's sale of advertising space on the Digital Billboard; (b) possessory interest tax related to this Lease or to AOA's possession or use of the Premises; and (c) real property tax allocated to the Digital Billboard and personal property tax levied on AOA's personal property on the Premises. 8. Eminent Domain. (a) Definitions. The following definitions apply to this Section 8: Lease Agreement (1) "Condemning Entity" means any entity that by law may exercise the power of eminent domain to acquire possession of, and title to, any of the following: the Digital Billboard, the entire Premises, or an Essential Part of the Premises. (2) "Essential Part of the Premises" means any portion of the Premises that is reasonably necessary for installing, operating, maintaining, repairing, or improving the Digital Billboard in accordance with this Lease. 12 City of National City and American Digital Outdoor, LP (b) Termination Events. This lease will terminate if a Condemning Entity acquires the Digital Billboard, the entire Premises, or an Essential Part of the Premises— (c) (1) (2) by using the power of eminent domain; or through negotiations under the threat of using the power of eminent domain. Termination Date; Rent Refund. Termination under this Section 8 will occur on the date the Condemning Entity obtains possession of, or title to, the Digital Billboard, the entire Premises, or the Essential Part of the Premises, whichever occurs first. Within 15 Business Days after the termination date, the City shall refund to AOA any pre -paid Monthly Rent for the unexpired portion of the Term; and (d) Compensation. If termination occurs under this Section 8, then AOA and the City may each independently seek to recover from the Condemning Entity all compensation and other remedies provided by law for the interests taken from them. But the City may not seek or recover compensation for AOA's lost interests, and AOA may not seek or recover compensation for the City's lost interests. 9. Indemnification. (a) Definitions. The following definitions apply to this Section 9: (1) "Person" is to be interpreted broadly and includes AOA and AOA's directors, officers, employees, contractors, and agents; and, includes the City and the City's elected officials, officers, employees, contractors, and agents. (2) "Liabilities" means all liabilities, claims, demands, damages, and costs (including reasonable attorneys' fees and litigation costs through final resolution on appeal) that arise directly or indirectly from AOA's possession or use of the Premises. (3) Lease Agreement "Occurrence" means (A) the death of, or injury to, any Person; and (B) damage to, or destruction of, any real property, personal property (including intellectual property), or the environment (broadly interpreted to include the air, soil, soil vapor, surface water, groundwater, flora, and fauna on or about the Premises). (4) "Secured Area" means the portion of the Premises enclosed by the permanent security fence that AOA erects around the Digital Billboard in accordance with Section 5(f). (b) General Indemnity. AOA shall indemnify, defend (with attorneys reasonably acceptable to the City), protect, and hold the City and the City's property (including the Premises) harmless from and against all Liabilities that arise 13 City of National City and American Digital Outdoor, LP (5) directly or indirectly from AOA's possession or use of the Premises. AOA is obligated under this Section 9(b) even if the City or the City's elected officials, officers, employees, contractors, or agents reviewed, accepted, or approved the work, materials, or activities from which the Liabilities arise. But AOA is not obligated under this Section 9(b) to the extent the Liabilities are caused by the sole active negligence or willful misconduct of the City or the City's elected officials, officers, employees, contractors, or agents. AOA's obligation under this Section 9(b) includes Liabilities arising from any of the following: (1) Any Occurrence on the Premises or outside the Secured Area, but only to the extent caused by AOA's acts or omissions. (2) Any Occurrence inside the Secured Area. (3) Any Occurrence that is in any way connected with any of AOA's personal property on the Premises. (4) Any Occurrence caused or allegedly caused by (A) any condition of the Premises created by AOA or by any Person on the Premises with AOA's permission; or (B) some act or omission on the Premises by AOA or by any Person on the Premises with AOA's permission. Any Occurrence caused by, or related in any way to, work or activities performed on the Premises or materials furnished to the Premises at the request of AOA or any person or entity acting for AOA, or with AOA's permission. (6) Any Occurrence that is caused by, or related in any way to, a verbal or nonverbal display on the Message Center. AOA's failure to perform any provision of this Lease, to comply with any requirement of law applicable to AOA, or to fulfill any requirement imposed by any governmental entity (including the City when acting as a government) on AOA or on AOA's use of the Premises. Hazardous Substances. AOA shall indemnify, defend (with attorneys reasonably acceptable to the City), protect, and hold harmless the City, the City's elected officials, officers, employees, and agents, and the City's property (including the Premises) from and against all Liabilities that arise directly or indirectly from either of the following: (1) The possession, use, generation, transportation, release, threatened release, handling, storage, or disposal by AOA or AOA's contractors of any Hazardous Substance on or under the Premises during the Term or during AOA's removal of the Digital Billboard in accordance with Section 5(1). (2) The possession, use, generation, transportation, release, threatened release, handling, storage, or disposal by anyone other than the City or the City's (7) (c) Lease Agreement 14 City of National City and American Digital Outdoor, LP elected officials, officers, employees, contractors, or agents of any Hazardous Substance on or under the Secured Area during the Tenn or during AOA's removal of the Digital Billboard in accordance with Section 5(1). AOA is not obligated under this Section 9(c)(2) for any Hazardous Substance that existed on or under the Premises on or before the Effective Date unless AOA's intentional, negligent or willful misconduct causes or exacerbates a release of the Hazardous Substance. (d) Legal Challenges. AOA shall indemnify, defend (with attorneys reasonably acceptable to the City), protect, and hold harmless the City and the City's elected officials, officers, and employees in any litigation brought to challenge the validity of this Lease, the validity of the City Permits or the Caltrans Permits, or the validity of the City ordinances that authorize the installation and operation of the Digital Billboard on the Premises. AOA's obligation to indemnify under this Section 9(d) includes liability for attorneys' fees awarded to a party who successfully challenges the validity of this Lease, of the City Permits or the Caltrans Permits, or of any authorizing ordinance. (e) Survival. AOA's obligations under this Section 9 will survive this Lease. 10. Insurance. (a) Types of Policies. During the Term and during AOA's removal of the Digital Billboard in accordance with Section 5(1), at no cost to the City, AOA shall procure and maintain the following insurance policies covering AOA's possession and use of the Premises: (1) A policy of comprehensive general -liability insurance providing coverage at least as broad as that provided by ISO Form CG 0001. This policy must (A) be issued on an occurrence basis; (B) include coverage for premises, operations, products and completed operations, advertising injury, and contractual liability; (C) have a combined single limit of at least $2,000,000 for each occurrence; and (D) include a fire legal -liability limit of $50,000 for each occurrence. (2) A policy of automobile liability insurance providing coverage at least as broad as that provided by ISO Form CA 0001. This policy must (A) have a combined single limit of at least $1,000,000 for each occurrence; and (B) cover owned, non -owned, and hired vehicles. (3) Lease Agreement A policy of fire and casualty insurance that insures the Digital Billboard for its full replacement value against damage or destruction by fire or by any of the perils commonly covered under the standard extended coverage endorsement to fire insurance policies issued on real property in San Diego County. In addition, during installation of the Digital Billboard, the policy must include coverage for course of construction, vandalism and malicious mischief, and must insure the Digital Billboard and all materials delivered to the Premises for their full insurable value. All insurance 15 City of National City and American Digital Outdoor, LP (b) proceeds that become payable under this policy while this Lease is in effect will be paid to AOA in trust and applied by AOA to the cost of repairing and restoring the Digital Billboard as required by, and except as otherwise provided in, Section 5(h). (4) A policy of workers compensation insurance with limits at least equal to those required by California law, and including employer liability insurance with a limit of at least $1,000,000. This policy must include a waiver of subrogation against the City. As an alternative to this policy, and subject to approval by the City's Risk Management Department, AOA may provide the City with a copy of AOA's Certificate of Consent to Self Insure from the California Department of Industrial Relations and a certificate showing AOA's excess -insurance limits and self -insured retentions. Insurer Qualifications. Each policy must be issued by an insurer the California Department of Insurance has authorized to transact business in California in the relevant line of insurance, and the insurer must have a rating of at least "A" by A.M. Best Company or a rating the City's Risk Management Department determines to be substantially equivalent. (c) Certificates of Insurance and Endorsements. Within 10 days after the Effective Date, and afterward upon request, AOA shall provide the City with certificates of insurance, signed by authorized representatives of the insurers, and with original endorsements, confirming that AOA has procured and is maintaining the insurance policies required by this Section 10. AOA shall also provide the City a copy of all endorsements. Lease Agreement Notice. Each of the policies must obligate the insurer to give the City at least 30 days' advance written notice before the policy is cancelled or materially changed. Other Requirements. The general liability and automobile liability policies must each— (1) (3) name the City and the City's elected officials, officers, employees, and agents as additional insureds; (2) provide that AOA's insurance coverage is primary insurance with respect to the City and the City's elected officials, officers, employees, and agents to the extent they are additional insureds; provide that AOA's insurance applies separately to each insured against whom a claim is made or a suit brought, except with respect to the applicable policy limits; and (4) provide that the City's insurance and self-insurance are in excess of AOA's insurance and will not contribute with it. 16 City of National City and American Digital Outdoor, LP (g) (f) Quinquennial Review. The City may revise these insurance requirements every five years if the City reasonably determines that revision is needed to conform the policy terms, conditions and limits with then -current insurance industry standards for structures and real property comparable to the Digital Billboard and the Premises. A revision will take effect 30 days after the City gives AOA notice in accordance with Section 11(a). No Limit on Indemnification. Nothing in this Section 11 limits AOA's obligations under Section 9. 11. Miscellaneous. (a) Notices. Any notice or other communication under this Lease must be in writing and will be considered properly given and effective only when mailed or delivered in the manner provided by this Section 11(a) to the persons identified below. A mailed notice or other communication will be effective or will be considered to have been given on the third day after it is deposited in the United States Mail (certified mail and return receipt requested), addressed as set forth below, with postage prepaid. A notice or other communication sent in any other manner will be effective or will be considered properly given when actually delivered. A party may change its address for these purposes by giving written notice of the change to the other party in the manner provided in this Section 11(a). If to the City: 1f to AOA: City Manager City of National City 1243 National City Boulevard National City, CA 91950-4301 American Outdoor Advertising 1702 East Highland Avenue, Suite 304 Phoenix, AZ 58016-4666 (b) Assignments and Subleases. A party may not assign or otherwise transfer this Lease or any interest in it, and this Lease is not assignable by operation of ]aw, without the other party's prior written consent, which the other party shall not withhold, delay or condition unreasonably. An assignment or transfer of this Lease does not occur, for purposes of this Section 11(b), if AOA merges with another company, reorganizes its stock, or undergoes a similar corporate restructuring, or if AOA sells any of its assets or stock. AOA may not sublease the Premises or any part of the Premises, or the Digital Billboard or any part of the Digital Billboard, without the City's prior written consent, which the City may withhold or condition in its sole discretion. An assignment, transfer or sublease made contrary to this Section 11(b) is void. (c) Successors and Assigns. This Lease binds and inures to the benefit of the successors and assigns of the parties. This Section 11(c) does not constitute the City's consent to any assignment of this Lease or any interest in the Lease, or to Lease Agreement 17 City of National City and American Digital Outdoor, LP (d) (e) (f) (g) (h) Lease Agreement any sublease of the Premises or any part of the Premises, or to any sublease of the Digital Billboard or any part of the Digital Billboard. The City's Right to Enter and Inspect the Premises. The City and the City's elected officials, officers, employees, and agents may enter upon and inspect the Premises at any time to determine AOA's compliance with this Lease. Force Majeure. "Force Majeure Event" means a cause of delay that is not the fault of the party who is required to perform under this Lease and is beyond that party's reasonable control, including the elements (including floods, earthquakes, windstorms, and unusually severe weather), fire, energy shortages or rationing, riots, acts of terrorism, war or war -defense conditions, acts of any public enemy, epidemics, the actions or inactions of any governmental entity (excluding the City) or that entity's agents, litigation, labor shortages (including shortages caused by strikes or walkouts), and materials shortages. (2) Except as otherwise expressly provided in this Lease, if the performance of any act required by this Lease to be performed by either the City or AOA is prevented or delayed because of a Force Majeure Event, then the time for performance will be extended for a period equivalent to the period of delay, and performance of the act during the period of delay will be excused. (1) (3) This Section 11(e) does not excuse (A) AOA's obligation to pay Monthly Rent when due and payable; or (B) either party's obligation to perform an act when performance is rendered difficult or impossible solely because of that party's financial condition. Waiver of Breach. A party's failure to insist on strict performance of this Lease or to exercise any right or remedy upon the other party's breach of this Lease will not constitute a waiver of the performance, right or remedy. A party's waiver of the other party's breach of any provision in this Lease will not constitute a continuing waiver or a waiver of any subsequent breach of the same or any other provision. A waiver is binding only if set forth in writing and signed by the waiving party. Relationship of the Parties. This Lease does not create any relationship or association between the City and AOA other than that of landlord and tenant. For example, and without limiting the previous sentence, this Lease does not create between the City and AOA the relationship of principal and agent, nor does it create a partnership or joint venture. Attorneys Fees. The party prevailing in any litigation concerning this Lease, the Premises, or any improvements to the Premises (including the Digital Billboard) 18 City of National City and American Digital Outdoor, LP i (p) Lease Agreement will be entitled to an award by the court of reasonable attorneys' fees and litigation costs through final resolution on appeal in addition to any other relief that may be granted in the litigation, If the City is the prevailing party, then this Section 1 1(h) will apply whether the City is represented in the litigation by the Office of the City Attorney or by outside counsel. (i) Severability. If a court with jurisdiction holds any nonmaterial provision of this Lease to be invalid, void or unenforceable, then the remaining provisions will remain in full force. (j) Counterparts . The parties may execute this Lease in counterparts, each of which will be considered an original, but all of which will constitute the same lease. (k) Memorandum of Lease. Either the City or AOA may record this Lease or a memorandum thereof with the San Diego County Clerk/Recorder. (I) Further Assurances. Each party shall execute all additional documents or instruments, and take all necessary action that either party reasonably considers necessary to carry out the proper purposes of this Lease. (m) Time of Essence. Time is of the essence of this Lease. (n) Interpretation. This Lease is to be interpreted and applied in accordance with California law without regard to conflict of laws principles, except that the rule of interpretation in California Civil Code section 1654 will not apply. Schedules 1 and 2, and Exhibits A, B, C, D, E, and F are part of this Lease. (o) Construction. The parties acknowledge and agree that (i) each party is of equal bargaining strength, (ii) each party has actively participated in the drafting, preparation and negotiation of this Agreement, (iii) each such party has consulted with or has had the opportunity to consult with its own, independent counsel and such other professional advisors as such party has deemed appropriate, relative to any and all matters contemplated under this Agreement, (iv) each party and such parry's counsel and advisors have reviewed this Agreement, (v) each party has agreed to enter into this Agreement following such review and the rendering of such advice, and (vi) any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement, or any portions hereof, or any amendments hereto. Integration and Modification. This Lease sets forth the parties' entire understanding regarding the matters addressed. It supersedes all prior or contemporaneous agreements, representations and negotiations (written, oral, express, or implied) and may be modified only by another written agreement signed by both parties. 19 City of National City and American Digital Outdoor, LP Schedule 1 The following definitions apply in this Schedule 1: "Gross Revenue" means all revenue AOA actually derives from the Digital Billboard, including revenue from the display of messages and revenue from non -advertising uses of the Digital Billboard, such as any rental AOA receives from a telecommunications company that uses the Digital Billboard as a cell site or cell tower. This reference to a cell site tower does not confer any right to such use, but is stated by way of example only. "Annual Net Revenue" means the difference between the Gross Revenue that AOA actually receives in a lease year and any commissions or fees that AOA actually pays to a bona fide independent advertising agency (i.e., an agency not owned or co -owned or controlled or otherwise affiliated with AOA) in connection with messages displayed on the Digital Billboard. The amount of such a commission or fee may not exceed 16% of the revenue to which it relates. AOA shall pay Monthly Rent (as described in Section 3.a.) as follows: a. Monthly Rent for months 1 through 60: The Annual Rent total shall be $102,000 (One Hundred Two Thousand Dollars) per year, paid monthly in the amount of $8,500 (Eight Thousand Five Hundred Dollars). $8,500 is the Base Rent. b. The first 60 (Sixty) months shall be paid in advance, as set forth in Section 3. AOA shall pay Business Revenue Sharing (as referenced in Section 3), in addition to Monthly Rent, as follows: AOA shall pay one-third (1/3) of that portion of the Annual Net Revenue that exceeds $102,000 per year. This 1/3 shall be calculated on an annual basis in arrears. By way of example, if Annual Net Revenue is $120,000 in a year, then the Business Revenue Sharing would be calculated as follows: $120,000 (Annual Net Revenue "ANR") - $102,000 (Annual Rent "AR") _ $18,000 which is then divided by 3 for a Business Revenue Sharing ("BRS") payable in the amount of $6,000. The formula would then be as follows: (ANR-AR) =3=BRS c ( 81 1l GRAPHIC F 0 S 1 ' 5 / A.P. NO. 559-200-38 T.P.O.B N1z.6'26 i1N crt tP 037 Vrk �%N (.P O Aq- ` i 2 O-y p S41 3125"W(R)/ zt A.P. NO. 1562-220-33 1.>+ SCALE 1 �� n '0 20 40 (INFEET ) . 1 inch = 20 ft. 24 ST VICINITY MA N.O SCALE, A.P. NO. 559-200-34 S fir,_ D=115'38'47:L—R� \Z 58 2g1• S41'23'25"W 11.5' T.P.O.B. •0>, LEGAL DESCRIPTION PORTIONS OF LOTS 33 & 34 AND A PORTION OF 29TH STREET IN BAHIA VISTA, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF NO. 1815, FILED IN OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 19, 1924 BASIS OF BEARINGS THE BASIS OF BEARING FOR THIS PLAT IS THE EASTERLY RIGHT OF WAY UNE OF THE SAN DIEGO AND ARIZONA EASTERN RAILROAD ACCORDING TO RECORD OF SURVEY NO. 15781 I.E. N17'43'34"W LEGEND INDICATES AREA TO BE VACATED BY THE CITY OF NATIONAL CITI?` AREA = 2,533.63 SQ. FT ± INDICATES TRUE POINT OF BEGINNING THIS PLAT WAS PREPARED BY ME OR UNDER MY DIRECTION. PRELIMINARY STEVEN A. 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A,wm mrw.... ....®nwa+ .l Nw0 a1...TAFnawnarepnron. [ggv..p. . O.PNO.OR .nsa ,V.y.wKbwi .1VW".1. rt... m.vv.,A 11KI PLd6YMW1[{,V »..r: W^.0....VOw.valsAl..aY r1s:..,Th .1 anlr..ta a' -sw 11.4 an pas.a7vK.e:.mw0awe.1...N...K. aim. m.< n+xwsm.Aw.».wa.sse. _ �w:Kc..Kmnsalsr sawso.. NA W K1..1.Map.K..y.n .P.v.m w.eeno.s.es «.1s+1...wtw awls nevaTTAIA-ATonme AAA Ar.. AA,AT.s.....ao sT went" ...:rA1ea ws.sa .rAmsaeeK rsK,.ss.•wr palmw.seamerle rnan W A..v.rsn.mus.sao s.o- r.cls.e s moos MlKr.KCMa.e .ms. wrawnww......nKlos es,s 1enrew.m� siwr..osa+�. ANFKICAN 0WCCX2IR 42610.7.11.1.10. x. e..paaraw ass .ePaesrTa r.cmmmsn 14'. 45 5''N;AC P097 CENTER MWMT SINGLE FACE VD READY 03/30,12 (List of Hazardous Substances) Exhibit C OFFICE OF THE CITY CLERK 1243 National City Blvd. National City, California 91950 CoA#'O l!li ED Michael R. Dalla, CMC - City Clerk 619-336-4228 phone / 619-336-4229 fax November 7, 2012 Mr. Tom LeClair American Digital Outdoor 1702 E. Highland #304 Phoenix, AZ 85016 Dear Mr. LeClair, On October 30th, 2012, Resolution No. 2012-219 was passed and adopted by the City Council of the City of National City, authorizing execution of a Second Amendment to a Lease Agreement with American Digital Outdoor. We are enclosing for your records a certified copy of the above Resolution and a fully executed original Amendment. Michael R. Dalla, CMC City Clerk Enclosures cc: Office of the City Manager