SR-11-G (2)
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Council Meeting: January 10, 1983
Santa Monica, California
(l- Cr
JAM 1 0 1984
TO: Mayor & C~ty Councll
FROM: C~ty Staff
SUBJECT: Recommendatlon to Extend EXlstlng Month-to-Month Pler
Leases to Two (2) Year Terms, Subject to
Renegotiat~on of Certaln Terms and Rates, and D~rect
Staff to Forward the Current Draft Lease Document to
the Pier Restoratlon Corporat~on (PRC) for Rev~ew and
Comment.
INTRODUCTION
On May 10, 1983. the CIty Councll approved a reconstructIon and
restoratIon plan for the Santa Monlca Pler. Included In the plan
was a leas~ng strategy for existIng pier tenants. SInce that
time, staff has evaluated ongoing pler operatIons, revlewed
Industry practlces, consulted with representatives of the Pler
Restoratlon CorporatIon, and negotlated a lease form wlthlessee
representatIves.
ThlS report prOVIdes background information, a
discussion of a newly proposed leaslng strategy, and a
recommendatIon that Council 1) authorIze the converSlon of all
month-to-month tenancies to two year
leases, subject to
renegotiatlon of lease rates, the transfer clause, and the publlC
liablllty clause; 2) forward eXlstLng new lease form to the Pler
Restoration Corporatlon for their reVlew and comment; and 3)
dlrect staff to negotlate a term of the final Pler Restoration
Corporatlon "Service Agreement" that deflnes the Corporatlon's
role In negotlatlng lease terms/rates/condltlons for lessees
requestlng terms greater than 2 years. The final lease document
wlll be approved by Councll. /I-G-
.l~(t 1 0 1~84
r
BACKGROUND
At the present tlme, eIght (8) Pler tenants occupy their business
premIses pursuant to month-to-month tenanC1es. Seven (7) lessees
are on longer term leases wIth eXpIratIon dates rangIng from 1986
to 2004. Tenants have repeatedly 1nd1cated a des1re for greater
lease protection by obta1nlng leases longer than month-to-month.
The C1 ty's goal was to standardIze a lease form for the P1er and
as leases exp1red or were renegotiated, ellm1nate the many lease
forms now 1n eXIstence on the PIer.
On May 10, 1983, Council dIrected staff to offer all p1er tenants
wIth month-to-month tenanc1es, longer term leases prOV1ded: 1)
the leases were in conformance with the Pier Task Force
GU1dellnes; 2) the Interests of the PIer tenants were
accommodated; and 3) the abIl1ty of the C1ty to ensure an
economIcally vIable pIer was protected.
DISCUSSIONS
In the May 10th report, CounCIl approved guidel1nes for staff to
follow during lease negotIatIons. These gUIdelines were
utIl1zed 1n the draftIng of the attached standard lease form.
The drafting of this lease form was completed in considerat1on
w1th representat1ves of the P1er Task Force, the P1er RestoratIon
Corporation and a variety of representatives of the Santa Monica
P1er Lessee's ASSOCIatIon.
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'- ~
Slnce the 1ncept1on of the P1er Restorat1on Corporat1on, the
lessees have expressed an 1ncreas1ng 1nterest In extend1ng their
eX1sting month-to-month leases to two year terms. It 1S thelr
apparent feeling that 1n this way the1r presense on the P1er can
be secured until they can better evaluate in 2 years If the
level of restorat1on/reconstruction planned for the Pier mer1ts
the execut10n of a new and longer term lease. LIkew1se, the PRe
Board of Directors has expressed an ever grow1ng 1nterest in the
dIrect particIpat10n of long term lease negotlat1ons glven thelr
responsibillty for finanCIng the long term improvements
necessary for the Pler's reconstruction/restoration. The PRC
and the CIty expect to execute a final "Service Agreement" on or
before July 1, 1984. It 1S intended that thiS "Service
Agreement" wIll Include a prOVISion to require the PRC to
negotlate leases longer than two years durlng the PRe's flrst 12
months of the "Service Agreement".
It is staff's assessment that legltlmate concerns have been
raIsed by both groups WhICh were not present prlor to the
draftlng of the May 10th report. WhIle staff has compIled wlth
Council's directlve to prepare a standard lease form for lease
negotlatlons, It is staff's further assessment that the Council's
goals that all leases meet the Pier GUIdelines, accommodate the
interests of the tenants, and insure the finanCial vlability of
the Pler are best served If the recommendatIons below are
Implemented.
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BUDGET/FINANCIAL IMPACT
Extending the P1er leases to two years w1ll not have an 1mpact on
the current year's budget FY 1983-84.
Impacts may be felt 1n
later years 1f the two year lease results 1n a lower vacancy rate
or if, 1n negot1at1ng the longer lease, rents are increased.
RECOMMENDATIONS
It 15 staff's recommendat1on that the Council:
1. D1rect the City Manager to extend all month-to-month
leases, which are current as certif1ed by the DIrector
of Community & EconomIC Development, to two year leases
wIth IndIvIdual tenant renegotIation of lease rate,
terms of publIC llablllty, and prohlbitlon agalnst
transfer. Staff wIll return to Councll for approval of
Indlvldual leases as negotlatlons are completed.
2.
Forward the attached standard Pler Lease form to
PIer Restoratlon CorporatIon for their review
comment.
the
and
Prepared by:
Mark Tlgan, Director
Communlty & Economlc Development Department
Ernesto R. Flores, Manager
Economlc Development DlvIslon
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"
LEASE AGREEMENT
This Lease Agreement, entered into this day of
, 19B , by and between the CITY OF SANTA
MONICA, a municipal corporat10n (hereinafter "Lessor") and
(hereinafter "Lessee") is made with reference to the
following:
R E C I TAL S:
A. Lessor is a municipal corporation duly organized and
val1dly eX1st1ng under the laws of the State of California
with the power to carryon 1ts business as it is now being
conducted under the statutes of the State of California and
the Charter of the City.
B. By and through 1917 General Statutes 78 as amended
ny 1970 General Statutes 1077, the State of Cal ifornia has
granted to Lessor certain tide and submerged land for commerce
and navigation.
C. Lessor owns and operates the Santa Monica Pier wh1ch
1S located on sa1d tide and submerged land. Lessor recognizes
and acknowledges that the Santa Monica Pier is a valuahle
recreational resource of the City of Santa Monica and that
Lessor will endeavor to protect the Santa Mon1ca Pier as a
public resource.
D. In order to develop and improve said tide and
submerged land for commerce and navigation, the Lessee desires
to lease a certain portion of real property on or about the
Santa Monica Pl.er upon the terms and conditions herein set
forth.
NOW, THEREFORE, the undersigned parties do hereby
mutually agree as follows:
1. TERM.
Lessor hereby leases to Lessee certain real property
upon each of the covenants and conditions set forth herein for
the per10d of years commencing on 198 ,
and ending - 19 (hereinafter refer red to as
"Lease Term"), subJect to termination as herein set forth.
Said certain real property 1.S located on or about the Santa
Mon1.ca Pier in the City of Santa Monica, California, commonly
known as and more particularly
described in Exhibit "A" which is attached hereto and
incorporated here1.n by this reference (hereinafter referred to
as "Premises"). Upon expiration or termination of the Lease
Term, Lessee shall immed1.atelY surrender possession of the
premises to Lessor.
2. PREMISES.
A. Use.
The Prem1.ses covered by this Lease shall be only such as
are described 1.n Sect1.on 1 above. Lessee shall not use any
premises or property that is not specif1.cally de scr ibed
therein without the prior wrl.tten consent of Lessor. Lessee
shall use the Premises contl.nuously during the Lease Term
under the trade name of:
and for the following purpose:
The good s, wares and merchandise Lessee shall dispense
and services Lessee shall perform are only those described in
Exhibi t "B" WhlCh is attached hereto and incorporaten herein
by this reference and such other items approved in advance and
in writing by Lessor.
Lessee shall not use or occupy the Premises for any
other purpose or under any other trade name without Lessor's
prior written consent. Lessee shall not dipsense any other
products or perform any other serVl.ces without Lessor's prior
written consent. Other than which is specified above, Lessor
shall not unreasonably withhold consent to use of any other
trade name.
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Lessee shall continuously use the Premises for the
purpose specified herein as follows:
(1) During the months of
calendar year as follows:
of each
(2) During the months of
calendar year as follows:
of each
Lessor may change the hours, days and months of
operat~on upon 30 days' wr~tten not~ce.
Lessee shall use as much of the Premises as is
reasonably possible for sales purposes and shall use such part
thereof for storage or administrative purposes only as shall
be reasonably necessary therefor. Lessee shall not use any
portion of the Premises for any purposes not fully and
directly connected with the business which Lessee is permitted
to operate and conduct.
B. Operation. Lessee shall operate its business, and
all aspects thereof, in the manner comparable to a first class
bUs1.ness of the same type which is located in the general
geograph1.cal area as the Santa Monica Pier. Lessee shall at
all times keep and maintain within anI'! upon the Prem1.ses a
full staff of employees and an adequate stock of merchandise
and trade fixtures to service and supply the usual and
ordinary demands and requirements of its customers. Les see
shall employ 1ts best judgement, efforts and abilities to
operate its business to produce tne max~mum prof~ table and
practicable volume of sales and to enhance the reputation and
attract1.Veness of the Santa Mon1.ca Pier.
c. Vendors~ Games. Lessee snaIl not permit vendors to
display wares in any manner in or about the Premises without
f~rst obta1ning prior written consent from the Lessor. The
Lessee snaIl first receive written approval from the Lessor
before installing or permitting to be installed any and all
vending or video machines or arcade games or computers. The
Lessor reserves the right of rental of all public telephone
pay stations within the Premises.
D. Rules and Re9ulations. Lessee agrees to comply with
all of the following rules and regulations and agrees that
Lessor may, at its sole discretion, change these rules and
regulations upon thirty (30) days' prior written notice:
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(1) No bicycles, vehicles, except in areas
previously designated by Lessor for such use, or animals
of any k~nd shall be brought into or kept in or about
the Premises. Unless the Premises, as permitted by the
use clause in this Lease, are to be used for restaurant
or related purposes, no cooking shall be done or
permitted by Lessee in its Premlses, except that the
preparation of coffee, tea, hot chocolate and similar
i terns for Les se e, its employees and vis i tors sha 11 be
permitted, provided such activities do not increase
Lessor's insurance rates or violate any applicable
governmental regulations ~ncludinq, without limitation,
any fire, building, health and safety, employee safety
or other regulatlons.
(2) Lessee shall not cause or permit any unusual
or objectionable odors to be produced in or e~anate from
the Prem~ses.
(3) The Premises shall not be used for lodging or
sleeping.
(4) Lessee shall not make, or permit to be made,
any unseemly or disturb~ng noises, or disturb or
interfere with occupants of the Santa Monica Pier or
neighboring buildings by the use of any musical
lnstrument, radlo, phonographs or unusual noise, or in
any other way.
(5) Neither Lessee nor its servants, employees,
agents, visitors or l~censees shall at any time bring or
keep upon its Premises any flammable, combustible or
explosive fluid, chemical or substance, except for a
reasonable quantity of such material reasonably
necessary for the conduct of its trade or business,
provided such material and quantity is not in violation
of any laws or insurance policies or regulatlons.
LesSee must obtain prior approval of the City of Santa
Monica Fire Department of material and method of
storage.
(6) No additional locks or bolts of any kind
shall be placed upon any of the doors or windows by
Lessee, nor shall any changes be made in existing locks
or the mechanisms thereof unless Lessor is furnishen a
key therefor. Lessee must, upon the termination of its
tenancy, give to Lessor all keys pertaining to the
Premises, either furnished to, or otherwise procured by,
Lessee. In the event of the los s of any keys so
furnished, Lessee shall pay Lessor the cost of replacing
the same or of changing the lock or locks opened by such
lost key if Lessor shall deem Lt necessary to make such
change.
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(7) Lessor shall have the right, hy written
notice, to order Lessee to discontinue a particular type
of advertising. Lessor agrees that such notice shall
not be unreasonably issued.
(B) Lessor may limit the weight, size and
location of all safes, fixtures and other equipment or
mater~al s used in the Premises. In the event Les see
shall require equipment in excess of fifty (SO) pounds
per square foot. Lessee shall notify Lessor of such fact
and shall pay the cost of structural analysis and
bracing to accommodate same. All damaqe done to the
Premlses or Santa Monica Pler by puttlng in, or tak~ng
out, or maintaining such extra heavy equipment or
materials shall be repaired at the sole expense of
Lessee.
3. MINIHUM MONTHLY RENT.
On the tenth day of each and every calendar month during
the term hereof. Lessee shall pay a sum set as minimum monthly
rent (herelnafter "Minimum Monthly Rent") for such month.
Lessee shall pay as Minimum Monthly Rent the sum of
Dollars ($ ) for the months of May
through September and the sum of Dollars
($ ) for the months of October throuQh Apr il.
Minimum Monthly Rent for any fractional part of a month
between the commencement date and the first day of the first
full calendar month within the Lease Term shall be prorated,
and pald by Lessee to Lessor alonq with the first full month
of Mlnimum Monthly Rent due hereunder.
The Mlnimum Monthly Rent shall be subject to annual
adjustment at the commencement date of the second year of the
Lease Term and each year thereafter (the "adjustment date") as
hereln set forth.
The base for computing the adjustment is the Consumer
Price Index for All Urban Consumers (Base Year 1967 = 100) for
Los Angeles - Long Beach - Anaheim. California, published by
the United States Department of Labor, Bureau of Labor
Statistics ("Index"), which is published for the month two
months prior to the date of the commencement of the term
("Beginn~ng Index"). If the Index published two months prior
to the adJustment date ("Extension Index") has increased over
the Beglnning Index, the Minimum Monthly Rent for the
following year (until the next rent adjustment) shall be set
by multiply~ng the Minimum Monthly Rent by a fraction, the
numerator of which is the Extension Index and the denominator
of which is the Beglnning Index. In no case shall the Minimum
Monthly Rent be less than the Minimum Monthly Rent set forth
above. On adjustment of the Minlmum Monthly Rent as provided
in this Lease, the parties shall immediately execute an
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amendment to the LeaSe stating the new Minimum Monthly Rent.
If the Index is discontinued or rev~sed durinq the term, such
other government index or computation with which it is
replaced shall be used in order to obtain substantially the
same result as would be obtained if the Index has not been
discontinued or revised.
4. PERCENTAGE RENT.
In addition to the Minimum Monthly Rent specified in
Section 3 above. Lessee shall pay to Lessor a sum equal to the
amount that four percent (4%) of Lessee' s Gross Sales as
defined herein made from or upon the Premises exceeds the
M~n~mum Monthly Rent (hereinafter "Percentage Rent").
A. Gross Sales. The term "Gross Sales" as used in this
Lease shall be construed to mean (i) the entire amount of the
actual sales price, whether wholesale or retail, and whether
wholly or partly for cash or on credit or in exchange for any
other product, cOJTImodity, service, commercial paper or
forebearance, of all sales of merchandise and all charges made
by Lessee or its employees or others acting on its behalf for
the rend1tion of services of any kind whatsoever; (ii) all
other receipts of all business conducted in, at or from the
Prem1ses. ~ncluding all deposits not refunded to purchasers,
proceeds. receipts or any revenue derived whatsoever from the
use of Premises by or for any television, radio, movie.
studio. photograph promoter or any other such activity, on or
near the Prem~ses; (i~~) orders taken in or from the Premises
although sa1d orders may be filled elsewhere. and sales by any
sublessee ~n or from the Premises. and all w~thout credit to
Lessee for uncollected or uncollectible credit accounts: (iv)
gross receipts of all coin-operated devl.ces which may be
placed 1n the Premises by Lessee or under any rent concession.
percentage or other arrangement including, without limitat1on,
such devices as pinball mach::tnes, vending mach ines, video
games and similar devices (but excluding revenue from
telephone that is collected by a public utility), except that
nothing set forth here~n shall be construed as Lessor's
consent to the use of same in the Premises to the extent this
Lease otherwise required Lessor's consent thereto: and (v) all
otner revenues or receipts generated by or arising from the
use of the Prem~ses. All sales oriq~nally made in, at or for
the Premises shall be considered as made and completed
therein. even though the payment of the account may be
transferred to some other office of Lessee for collection, or
although del::t very of merchandise sold in, at or from the
Premises may be maoe from a place other than the Premises.
B. Exclusion from Gross Sales. There shall be excluded
from Gross'Sales (i) any sums collected and paid out for any
sales tax or tax based upon the sale or sales of merchand~se
and required by law, whether now or hereafter in force, to be
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paid by Lessee or collected from its customers, to the extent
that such taxes have been added to exchange of merchandise and
included in the Gross Sales price~ (ii) the transfer or
exchange of merchandise between the stores of Lessee, if any,
where such transfers or exchanges or merchandise are made
solely for the convenient operation of Lessee' s business and
not for the purpose of consummating a sale which has
theretofore been made in, at or from the Premises or for t'he
purpose of depriving Lessor of the benefit of a sale which
otherwise would be made in, at or from the Premises~ (iii) the
amount of returns to shippers or manufacturers and (iv) the
amount of any cash or credit refunil made upon any sale where
the merchandise sold or some part thereof is thereafter
returned by the purchaser to and accepted by Lessee. Each
sale upon installment or credit shall be treated as a sale for
the full prlce in the month during which such sale shall be
made, lrrespectlve of the time when Lessee shall receive
payment (whether in full or partial) from its customers.
c. Computatlon. Percentage Rent shall be computed and
paid for each calendar month during each year of the Lease
Term. Any sales made during the first fractional calendar
month of the Lease Term shall be added to the flrst full
calendar month of the Lease Term. The last month for
computatlon and payment of Percentage Rent shall end on the
date the Lease Term explres or terminates.
D. Method of Payment.
(1) Monthly Payment. On the tenth day of each calendar
month during the Lease Term, Lessee shall submit an itemized
statement of Lessee' s Gras s Sales as defined herein for the
preceding calennar month and the computation of Percentage
Rent due Lessor. Together with said statement, Lessee shall
pay Lessor the amount by which the sum so computed as
Percentage Rent exceeds that Minimum Monthly Rent paid for the
precechng calendar month. Notwi ths tanding the ahove, the
Percentage Rent due Lessor for the calendar mont~, or fraction
thereof, shall be due and paid on the date the term expires or
termlnates.
(2) Quarterly Adjustment. Withln 10 days of the end of
each quarter of each calendar year of Lease Term, Lessee shall
submit to Lessor a statement of Gross Sales and Percentage
Rent due Lessor during the preceding calendar quarter that has
been certified to be correct by a Certifled Public Account and
an ltemization and computation of the Minlmum Monthly Rent and
Percentage Rent actually paid to Lessor during the preceding
calendar quarter. An adJustment to rental paid by Lessee
during the preceding calendar quarter shall be made as
follows: If Lessee shall have paid to Lessor an amount
greater than Lessee is required to pay as Percentage Rent for
such calendar quarter under the terms hereof, Lessee shall be
entitled to a credit against Lessee's next payment of
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Percentage Rent for the amount of such overpayment or, if
Lessee shall have paid an amount less than the Percentacre Rent
requ1red to be paid hereunder, then Lessee shall forthwith pay
such difference to Lessor.
For the purpose of computing the quarterly adjustment to
the Percentage Rent, sales made during the f1rst fract10nal
quarter in which rentals commence shall be added to the sales
made dur1ng the first full quarter (provided the first
fract10nal quarter is within the same calendar year as the
f 1rst full calendar quarter) and Lessee shall pay to Lessor
the amount by which the amount so computed as a percentage of
Gross Sales of Lessee during this entire period exceeds the
Minimum Monthly Rent which are payable by Lessee during said
entire period.
5. COMMON AREAS.
A. Def1nition. "Common Areas" shall mean those
port1ons of the Santa Monica Pier locate~ within the physical
boundary thereof which are made available for the general use,
convenience or benefit of all Lessees and v1sitors of the
Santa MonJ.ca Pier, including without lirn1tation, all utility
lines and systems, access road s, dr 1veways, sidewalks.
pedestrian walkways. decking. stairways and other similar
areas, in addition, to maintenance and equipment areas, but
does not 1ncl ude the parking area des cribed in Section 7
hereof. The locat1on of Common Areas are described in Exhibit
"e" which is attached hereto and incorporated herein by this
reference.
B. Maintenance and Operation of Common Areas. Lessor
shall operate. manage and mainta1n the Common Areas. The
manner 1n wh1ch such Common Areas shall be operated, managed
and maintained and the expeditures therefor shall be at the
sole discretion of Lessor. Lessee hereby forever releases and
discharges Lessor, its C1ty Council, boards and commissions,
officers, agents, servants and employees from any and all
actions, causes of action, obligations, costs, damages,
losses, claims, liabi11ties and demands of any nature
whatsoever ar1sing out of or in any way relating to Lessor's
aperat1on, management and maintenance of the Common Areas.
Each party hereto understands and agrees that this release
extends to all claims of every nature and kind whatsoever,
known or unknown, suspected or unsuspected, and all rights
under Section 1542 of the California Civil Code are hereby
expressly waived. Said section reads as follows:
Section 1542. General Release. 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.
B
c. Lessee's Use of eommon Areas. Lessee and its
employees and inv~tees are, except as otherwise specifically
provided in the Lease, authorized, empowered and privileged to
use the Common Areas in common with other persons during the
Lease Term. Nothing herein contained shall be construed as
giv1ng or granting to Lessee or any other person any interest
in the real property upon which the Santa Monica Pier is
located.
Lessor shall from time to time designate an area or
areas within the Santa Monica Pier for the use of Lessee and
its suppliers in loading ana unloading trucks and other
vehicles. Lessee shall not at any time park or permit the
parking of its trucks or vehicles or the trucks or vehicles of
its suppliers or others, in any area with1n the Santa Monica
Pier not designated by Lessor for such use by Lessee and its
suppliers. If any such car, truck or other veh1cle is parked
in any area w1thin the Santa Monica Pier contrary to the
foregoing provisions, Lessor may cause the same to be towed to
a publ1c garage or other parking area and the expense of such
towing plus storage charges, will be paid by Lessee. Lessee
further agrees to hold Lessor, its City Counc1l, boards and
commissions, off~cers, agents, servants and employees from any
and all actions, causes of action, obligations, costs,
damages, losses, cla1ms, liabilities and demands of any nature
whatsoever arising out of or in any way connected W1 th such
removal.
D. Lessor's Control of Common Areas. Lessor shall at
all times have the sole and exclusive control of all the
Common Areas. Lessee's rights hereunder in and to the Common
Areas shall at all times be subject to the rights of Lessor
and the other lessees in the Santa Monica pier to use or to
benefit from the use of such areas and it shall be the duty of
Lessee (i) to the extent reasonably within 1 ts control, to
keep all of the Common Areas adjacent to the Premises free and
clear of any obstruct1ons, whether created or permitted by
Lessee or its operation; (ii) to use and allow the use of
Common Areas only for any parking permitted by Lessor or
normal ingress and egress by customers, patrons and suppliers
to and from the building occupied by Les see and the other
Lessees in the Santa Mon1.ca Pier and such other use approved
in advance and in writing from Lessor and (iii) not to cause,
permit or suffer any Common Areas to be used so as to
unreasonably interfere with the r1ghts of other lessees of the
Santa Monica Pier or Lessor or their invitees or business.
Lessor may at any time establish or change the nature,
use, S1ze and composit1on of the Common Areas, which acts may
include without limitation (1) the conversion of any leased
area or parking areas into Common Areas, and vice versa~ (ii)
the location and relocation of driveways, entrances, exits ana
parking spaces: (ii1) installation of landscaping or
restr1cted areas; and (1V) establishment of handicap and
loading zones.
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E. Construction. Lessor shall have the right to
perform any and all construction to, in or about the Common
Areas which it deems reasonable for the maintenance,
replacement, refurbishment, renovation or improvement of the
Common Areas, other premises or the Santa Monica Pier in
general. In connection therewith, Lessor shall not be liable
to Lessee by reason of any injury to or interference with
Les see's business or property or for any other inconvenience
or damages caused thereby.
6. COMMON AREA CHARGE.
This Section only applies if the Lease Term extends
beyond July I, 1987.
A. Definition. "Common Area costs" means all sums
expended by Lessor for the ma1ntenance and operation of the
Common Areas. Costs for maintenance and operation of the
Common Areas shall 1nclude, without limitation, costs, wages
and materials of resurfacing, repainting and restriping,
cleaning, sweeping, redecki ng, j an i torial se rvices and
superv1sion; ma1ntenance of Cornmon Area restrooms: purchase,
construction, and maintenance of refuse receptacles: planting
and relandscaping; directional signs and other markers;
security and policing excepting policing by Santa Monica
Police Department; maintenance and operation of a shuttle or
s1milar transportation system servicing the Santa Monica Pier
that is 1n effect now or hereafter implementer' or operated;
car stops, liqht1ng and other utilities, machinery and
equJ.pment used in connection with the Common Areas; premiums
on public liability, property damage insurance and any other
insurance that Lessor obtains and maintains on the Santa
Mon1ca Pier and other costs necessary in Lessor's judgment for
the ma1ntenance and operation of the Common Areas.
Costs for maintenance and operation shall not include
any costs for the repa1r, maintenance and replacement of Santa
Monica P1er pilings or the understructure of the Santa Monica
Pier or breakwater.
B. Accounting Period. The accounting period for
determ1natian of Common Area costs is the period of time
commencing July lst and ending June 30th of each year
commencing July l, 1987, of the Lease Term, or any portion
thereof in the event of termination or expiration of the Lease
Term (hereinafter "accounting period").
C. Lessee's Common ~rea Charge. Lessee's Common Area
charge is Lessee's proportionate share of Common Area costs as
defined above which shall be the ratio that the total number
of square feet of the Premises bears to the total number of
square feet of Common Area, which is %,
multiplied by the total Common Area costs.
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Lessee's proportionate share of Common Area costs shall
be recomputed in the event that either the total number of
square feet of the Premises or the total number of square feet
of the Common Areas are changed.
D. Commencement and Payment of Common Area Charge.
(1) Monthly Payment. Commencing in July, 1987, and
each calendar month thereafter for the remaining balance of
the Lease Term, Lessee shall pay as additional rent to Lessor
on the tenth day of each calendar month an amount estimated by
Les sor to be one-twel fth of Lessee's Common Area charge for
the yearly accounting periOd. If the term COmMences on a day
other than the first day of a month, Lessee's payment for this
f1rst month shall be prorated. Lessor may adjust the monthly
Common Area charge at the end of each accounting period on the
basis of Lessor's reasonably anticipated costs for the
following accounting period.
(2) Yearly Adjustment. Lessor shall furnish to Lessee
a yearly statement show1ng the total Call1!'lon Area costs and
Lessee's share of Common Area costs for each account 1ng
periOd, during the remaining balance of the Lease Term within
30 days after the end of each account1 ng pe r iod. Sa id
statement shall analyze the preceding accounting per 10d and
determine the amount paid and the amount due for Les se e' s
share of the Common Area costs. If Lessee's share of Common
Area costs for the accounting period exceeds the actual
payments made by Lessee, Lessee shall pay as additional rent
to Lessor the defic1ency within 30 days after rece1pt of the
statement. If Lessee's payments made during the account1ng
period exceed Lessee's share of Common Area costs, Lessor
shall pay Lessee the excess at the time Lessor furnishes the
statement to Lessee.
The Common Area charge required by this Section shall be
deemed to be additional rent under this Lease.
7. PARKING AREAS.
Lessor agrees to prov1de Lessee with a sufficient number
of parking spaces to sat1sfy any municipal. state or federal
parking requirements that are in effect at the execution date
of Lease. The parking may be provided by Lessor either on the
Santa Mon~ca Pier or in adjacent public parking facilities.
Lessor reserves the right to charge the amount that it,
in its sole discretion, deems appropr~ate for parking. In
addition, Lessor reserves the right to enforce parking charges
by operation of meters, parking ticket val idatian system,
assessments or otherwise.
11
8. SEeURITY DEPOSITS.
Lessee shall deposi t with Lessor upon execution hereof
$ wh1ch is computed as two months' Minimum Rent
as defined in Section 3 of this Lease as security for Lessee's
faithful performance of Lessee's obligations hereunder.
If Lessee fails to pay rent or other charges due
hereunder, or otherwise defaults with respect to any provis1on
of this Lease, Lessor may use, apply or retain all or any
portion of sa id deposit for the payment of any rent or other
charge ~n default or for the payment of any other sum to which
Lessor may become obligated by reason of Lessee's default, or
to compensate Lessor for any loss or damage which Lessor may
suffer there'by. If Lessor so uses or applies all or any
portion of saJ.d depos~t, Lessee shall within ten (10) days
after written demand therefor deposit cash with Lessor in an
amount sufficient to restore sa1d deposit to the full amount
hereinabove stated and Lessee's failure to do so shall be a
material breach of this Lease.
If the compensation to Lessor shall, from time to time,
increase during the term of th1s Lease, Lessee shall thereupon
depos1t with Lessor additional secur1 ty deposit so that the
amount of security deposit held by Lessor shall at all times
bear the same proportion to current compensation as the
orig1nal secur~ty deposit bears to the original compensation
set forth in Section 3.
If Lessee performs all of Lessee's obligations
hereunder, said deposit or so much thereof as has not
theretofore been appl~ed by Lessor, ~ncluding any interest
earned thereon, shall be returned to Lessee at the expiration
of the term hereof and after Lessee has vacated the Premises.
No trust relat10nship is created herein between Lessor and
Lessee with respect to sa1d security deposits.
9. LATE CHARGES.
Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause
Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to
ascerta1n. Such costs include, but are not limited to,
process1ng and accounting charges, and late charges which may
be imposed on Lessor by terms of any mortgage or trust deed
covering the Premises.
Accordingly, if any installment of rent or any other sum
due from Lessee shall not be received by Lessor or Lessor I s
designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to 10% of such overdue
12
amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor
will incur by reason of late payment of Lessee. Acceptance of
such late charge by Lessor shall in nO event constitute a
wa1ver of Lessee's default with respect to such overdue
amount, nor prevent Lessor from exercising any of the other
r1ghts and remedies granted hereunder.
In the event that a late charge is payable hereunder,
whether or not collected, for three (3) consecutive
installments of rent, then rent shall automatically become due
and payable quarterly in advance, rather than monthly,
notwithstanding Section 3 or any other provision of this Lease
to the contrary.
The late charge required by this Section shall be deemed
to be additional rent under this Lease.
10. DELAY OF POSSESSION.
Notwithstanding the commencement date specified in
Sect10n 1, 1f for any reason Lessor cannot deliver possession
of the Premises to Lessee on sav'l date, Lessor shall not be
subject to any liab1l1ty therefor, nor shall such failure
affect the validity of this Lease or the obl~gations of Lessee
hereunder or extend the term hereof, but in such case, Lessee
shall not be obl~gated to pay rent until possession of the
Pre~J.ses is tendered to Lessee.
ll. CONDITION OF PREMISES.
Lessee hereby accepts the Premises in their condition
exist~ng as of the Lease commencement date or the date the
Lessee takes possession of the Premises, whichever is earlier,
subject to all applicable zoning, municipal, county and state
laws, ord1nances and regulations governing and regulating the
use of the Premises, and any covenants or restrictions of
record, and accepts this Lease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto.
Lessee acknowledges that ne1ther Lessor nor Lessor's agent has
made any representation or warranty as to the present or
future suitability of the Premises for the conduct of Lessee's
business.
Upon termination or expiration of this Lease Term,
Lessee agrees to immedLately surrender possession of the
Premises and agrees that the Premises shall be in a condition
which is at least equivalent to condition at the Lease
commencement date, less reasonable wear and tear.
Notwithstanding the foregoing, Lessor hereby warrants
that it has the authority to enter into th1s Lease and to
13
.
lease the Premises to Lessee for uses which are consistent
with the trust under which the Premises are held by Lessor
pursuant to the Grant from the State of California. It is
expressly understood and agreed that in the event the tenancy
hereunder is or becomes inconsistent with the trust under
wh~ch the Premises are held by Lessor pursuant to the Grant
from the State of Californ1a, the rights and obligations of
the part1es hereto w1ll be governed solely and exclusively by
the applJ.cable laws of the State of California and Les sor
shall 1ncur no liability to Lessee.
l2. MAINTENANCE AND REPAIR.
Lessee expressly agrees to ma~ntain and keep, at its
sol e cost and expense, the Premises and all improvements of
whatever kina that may be now erected thereon, or hereafter
erected, installed or otherwise made thereon by Lessee in a
safe, clean, wholesome and san1tary condition. Lessee 's
obligat10n incl udes, W1 thout limitation, the floor covering,
all exterior and interior walls, ceiling, roof doors, and
plate glass, the ut1lity systems, meters, pipes and conduits,
all f1xtures, fire sprinkler systems, air conditioning and
heating equipment serving the Premises and other equipment
thereln, the store front or store fronts and immed1ately
surround~ng area, all Lessee's signs, locks and closing
devJ.ces ana all w1ndow sashes, casements or frames, door and
door frames. Lessee hereby consents to periodic inspections
by Lessor for the purpose of determininq maintenance
v10lat10ns and agrees to i!T1lTlediately correct each and every
violat10n. Lessee shall not allow refuse, garbage, or trash
to accuf'lulate outside the Premises, except on the date of
scheduled pickup service, and then only in locked receptacles
located in areas designed for such purposes by Lessor.
Lessee shall make all repairs necessary to maintain the
Prem~ses. Lessee shall make any and all necessary repairs to
or replacement of any equipment, structures, or other physJ.cal
improvements on the Premises, to comply with any and all
applicable re<!ulations, laws or ordinances of the State of
Ca11fornla, County of Los Angeles, or other governmental body.
If Lessee fails to correct any unsafe, unclean,
unwholesome or unsanitary cond1t10n with1n 48 hours after
beJ.ng notJ.f1ed in writing to do so by the Lessor, then the
Lessor may enter Premises and remedy the condit10n, or
candit1ons, and charge the cost to Lessee w1thout any
liabili ty for any resulting business loss or damage. In the
event of an emergency, Lessor may immediately enter the
Prem1ses to remedy an unsafe, unclean, unwholesome or
unsa ni tary cond i tion and charge the cost to Lessee. Lessor
shall notify Lessee of such emergency as soon as reasonably
possible.
14
Lessee, at its sole cost and expense, shall remove all
debris, shoaling or submerged craft from the water area of the
Premises which may obstruct water traffic and otherwise
interfere with the use of any water lease hereunder, if such
debris, shoaling, or submerged craft res ul ted from or was
caused by the actions of Lessee, its agents, servants,
employees, sublessees, concessionaires or license es. If
Lessee fails to commence the removal of such debris, shoaling
or submerged craft wi thin ten (10) days after receipt of
notice thereof from Lessor, or thereafter fails to prosecute
diligently said removal to completion, Lessor may use the
security deposit referred to in Section 8 of the Lease, up to
the whole thereof as is necessary to cover the costs of
removing such debris, shoaling, or submerged craft. In the
event said security deposit is not sufficient to cover such
costs, Lessee shall immediately pay the amount by which said
costs exceed said security deposits upon receiving
notification from Lessor.
To the extent Lessor has funds available from revenues
of the operation of the Santa Monica Pier and Harbor Area,
Lessor shall continue to repair, maintain and replace pier
pi11ngs and the understructure of the Pier and breakwater.
The nature and amount of such repair, maintenance or
replacement shall be determined by Lessor in its sole and
absolute discretion. To the extent Lessor does not so repair,
maintain and replace pier pilings or the understructure of the
breakwater and in the event the fa~lure thereof materially
affects the habitable and useful condition of the Premises and
reBul ts 1n the inabi11 ty of Lessee to cause the Premises to
produce a fa1r and reasonable economic return in connection
with Lessee's business operations conducted therein, Lessee
may at its option and as its exclusive remedy against Lessor
on account of such failure to repa1r, maintain or replace,
terminate this Lease on 30 days' wr1tten notice. In no event
w~ll Lessor be SUbject to any liability of any nature
whatsoever by reason of Lessor's failure to so repair,
ma1ntain or replace pier pilings or the understructure of the
Santa Monica Pier or the breakwater. Lessee hereby assumes
all risks of loss that Lessee may suffer or sustain in
connection therewith.
13. LESSOR'S OBLIGATIONS.
Except for any obligations of Lessor under Section 30
(relating to destruction of the Premises), and under Section
38 (relating to condemnation of the Premises), it is intended
by the part1es hereto that Lessor has no obliqation, in any
manner whatsoever, to repair and rnainta1n the Premises nor the
building located thereon nor the equipment therein, whet'her
structural or nonstructural, all of which obligations are
intended to be that of the Lessee. Lessee expressly waives
the benefit of any statute now or hereinafter in effect which
15
would otherwise afford Lessee the right to make repa irs at
Lessor's expense or to terminate this Lease Agreement because
of Lessor's failure to keep the Premises in good order,
condition and repair. Lessee acknowledges that it has sought
the advice of counsel regarding the effect of this waiver and
that it voluntarily makes this waiver. Lessee further
acknowledges that except for this waiver, Lessor would not
enter into this Lease with Lessee.
Lessor shall not at any time be required to make any
improvements or repairs whatsoever with respect to the
Premises except that Lessor may, at its sole discretion, do
any necessary improvements or repairs to protect the Premises
or any property adjoining the Premises or repairs or
ma1ntenance in or about the Santa Monica Pier and Harbor Area.
14. IMPROVEMENTS AND ALTERATIONS.
Lessee shall not make any changes in, decoration of,
al terat~ons or additions to, or remove any portion of the
Prem~ses without first securing the consent of the Lessor in
writ~ng. All such approved changes, decorating, alterations,
addit10ns or removals shall be at the sole expense of Lessee.
Subject to provisions hereof J any alterations,
add1tions, or improvements 1nstalled by Lessee, its contractor
or agents at any time during Lease Term shall be done only in
compliance with all the following provisions:
A. No such work shall proceed without Lessor's
pr10r written approval of or written waiver of its right
to approve (i) Lessee's contractor: (ii) certificates of
insurance from a company or companies approved by
Lessor, furnished to Lessor by Lessee's contractor and
endorsed to show Lessor as an adaitional insured; (iii)
detailed plans and specifications for such work and (iv)
with respect to any work costing more than Five Thousand
Dollars ($5,000.00), if required by Lessor, procurement
by Lessee or its contractor of both a performance and
labor and materials payment bond (or a sinl:lle bond
inclUding such coverage) guaranteeing l1enfree
completion of the work of improvements.
B. All such work shall be done in conform1ty with
a valid building permit or other permits or licenses
that are required, copies of which shall be furnished to
Lessor before the work is commenced. Any work not
acceptable to any governmental authority or agency
having or exercising jurisdiction over such work, or not
reasonably satisfactory to Lessor, shall be promptly
replaced at Lessee's expense.
c. The schedule of work by Lessee or its
contractors shall be previously approved by Lessor.
16
D. Lessee shall reimburse Lessor for any expense
incurred by Lessor by reason of faulty work done by
Lessee or its contractors, or by reason of delays caused
by such work, or by reason of inadequate cleanup.
E. Before the commencement of any construction by
Lessee in, on or around the Premises, Lessee, or its
contractors, shall give advance wr1tten notice thereof
to Lessor or its agent, suff1cient for Lessor's
preparation, posting and recordat1on of an appropr1ate
not1ce of nonresponsibility, as provided under
applicable law.
F. All data process1ng, copying and other special
electrical equ1pment shall have a separate duplex outlet
and shall be installed only under the supervision of
Lessor or its electrical contractor. and Lessee shall
pay any additional costs incurred by Lessor on account
thereof.
G. Notwithstanding anything to the contrary set
forth herein. any construction by Lessee shall be
subject to Lessee's having secured all consents,
approvals and having fulfilled all requirements of the
Department of Building and Safety of the City of Santa
Monica, the California Coastal Commission. and. if
necessary, the Landmarks Commission of the City of Santa
Monica, the Architectural Review Board and the City
Council of the City of Santa Monica and shall be in
strict compliance w1th the design criteria in effect or
hereinafter adopted by the Les sor. Notwithstanding
anything to the contrary set forth in the Lease, noth1ng
shall be interpreted or construed as Lessor, by reason
of its be~ng a municipal corporation, in any way waiving
or deprivating any regulatory or police power of Lessor
in any of its other governmental capacities. It is
intended hereby that Lessee shall be obligated to
fulfill such requirements as may be imposed by any
governmental agency or authority of the City of Santa
Mon1ca having or exercising jurisdiction over the
Premises or of any construction to be undertaken by
Lessee there1n.
15. EQUIPMENT AND FURNISHINGS.
All equipment and furniShings and the cost of their
installation shall be provided at the sole expense of the
Lessee, and all such equipment and its installation shall be
subject to the prior approval of the Lessor. The location of
the installation of all equipment, furniShing and fixtures,
and any changes in the location shall be approved, in advance,
by Lessor. Lessee shall furnish a list of all furnishing and
equipment so installed and those items furnished by Lessee may
17
be removed after obtaining prior written approval from Lessor:
which approval shall not be unreasonably withheld. No
furnishing or fixture installed in such a manner as to become
part of the Premises shall be removed and Lessee shall not be
ent1tled to any payment therefor.
l6. RELOCATION.
Commencing July l, 1987, Lessor shall have the right to
relocate Lessee upon the following terms and conditions:
A. Lessor give Lessee six (6) months' prior
written notice, wh~ch notice may be given prior to July
l, 1987.
B. A new lease is offered on terms which are
substant1ally equ1valent to this Lease and 1S executed
prior to relocation.
c. The real
square footage area
Premises.
property to be leased is equal in
to at least 60% of the Lessee's
D. The term of the new lease 1S for at least the
rema1ning balance of the Lease Term.
E. The rental to be pa1d under the new lease,
computed per square foot, is sUbstantially equivalent to
the rental set forth in Sections 3 and 4 of this Lease,
computed per square foot.
F. Any right to Percentage Rent Offset set forth
in this Lease shall be incorporated into the new lease.
G. Lessor pays the Lessee's reasonable moving
expenses in an amount not to exceed $8,000.00.
Lessor agrees that the right to relocate shall only be
exercised in good faith and for the purpose of furtherance of
the development of the Santa Monica Pier, which inCludes, but
is not limited to, redesign of the Santa Monica Pier and
enhancement of the Santa Monica Pier as a recreational and
revenue produc1ng facility.
Within ninety (90) days of receipt of Lessor's notice of
relocat10n, Lessee shall, in writing, give Lessor a notice of
election. Th1S notice of election shall specify Lessee's
election to e1 ther relocate or terminate this Lease, which
termination shall be deemed effective six months from the date
of Lessor's notice of relocation. The failure of Lessee to
give such notice of elect10n wi th1n said ninety (90) day
period shall be deemed to be an election to terminate th1s
18
Lease effect1ve six (6) months from the date of Lessor's
notice of relocation.
17. EMPLOYEES AND MECHANICS' LIENS; BROKER'S FEES.
Lessee shall keep saJ.d Premises and every estate, r1ght,
title and interest therein, or 1n part thereof, at all times
during the term of this Lease, free and clear of any
mechanics I liens, and other liens, and l1ens for labor,
services, supplies, equipment, or material incurred by it, and
Lessee .will at times fully pay and discharge and wholly
protect, defend and save harmless Lessor on account of said
liens, or claims, or assertion, or filing thereof.
Lessor and Lessee hereby represent that no real estate
broker or agent is entitled to a fee or commission in
connect1on w1th th1S Lease.
18. INGRESS AND EGRESS.
The Lessor reserves the r1ght to enter upon the Premises
covered by this Lease at any and all times during the term of
this Lease.
Lessor, at its option and 1n its sole discretion, may at
any time control and li~it access to, in, or about the Santa
Monica Pier and Harbor Area for the public health, safety,
welfare, or for any municipal or public purpose. Lessor shall
not be liable or responsible for any damages arising therefrom
to the Premises, buildings. structures. installations or
improvements thereon, or any business or operation of Lessee.
Lessee will remain l1able for the full amount of rent
and other sums due, except as hereinafter provided in this
Sect10n. In the event that such control and lim~tation of
access renders the Premises totally unusable for Lessee I s
purposes for a period exceed1ng twenty-four (24) hours, then
from sa1d twenty-fourth (24th) hour Lessee shall be entitled
to a credit against the minimum monthly rental payable of one
thirtJ.eth (1/30th) of said rental for each day from said
twenty-fourth (24th) hour that renders the Prem~ses totally
unusable for Lessee's purposes.
Lessor reserves the right to regulate and restrict the
acti vities of Lessee with regard to all deliveries, loading,
unloading and servicing of the Premises and Lessee agrees to
abide by such regulations of Lessor.
19
19. UTILITIES.
The Lessee shall pay all charges for fuel, gas, water,
electr1city, pickup of refuse, telephone services and all
other ut1lities necessary to carryon the operations of
Lessee. Lessee understands and agrees that all service lines
for utility installations shall be below the deck of the Santa
Monica Pier and no wires, poles, pipes, conduits or other
facilities shall be placed, laid on or constructed on or above
the surface of the Pier. Lessor reserves the right to
designate the method and the place for the introduction of
said serV1ce lines into the Premises.
20. SIGNS, LIGHTING AND ADVERTISEMENT.
Lessee shall not paint or place any sign, liqht,
advertl-sement, antenna, or awning on the exterior of the
PreMises or the windows or doors or roof of the Premises
without the prior wr1tten consent of Lessor. All signs shall
be constructed in compliance with such requirements,
regulatJ.ons and ordinances as the C1ty of Santa Monica may, at
1ts sole discretion, establish. No overhanging roof or
proJecting sign or other advertisement and no paper or
cardboard sl-gns on or in the windows, doors or exterior of the
Prem1ses and no sidewalk racks or other displays shall be
permitted wJ.thout the prior wr~tten consent of Lessor.
Lessee may not display, sell merchandise, allow grocery
carts, portable signs, devic es or any other obj ects to be
stored or to remain outside the defined exterior walls and
permanent doorways of the Premises without prior written
consent of Lessor.
Lessee shall keep the exterior of the Premises and
d1splay w1ndows illuminated 1n the manner and during the time
specified by Lessor.
21. TAXES.
Lessee shall exonerate, indemnify, and hold Lessor
harmless from and ag-ainst, shall defend Lessor from and
against, and shall assume full responsibility for, payment of
all wages or salaries and all federal, state, and local taxes
or contributions imposed or required under the Unempl oymen t
Insurance, Social Security, Income Tax, and Worker' s
Compensation laws, or under other laws respecting Lessee's
employees engaged in the performance of Lessee's obligations
hereunder.
This Lease may create a possessory interest in public
property which is subject to taxation. In the event such
interest is created, Lessee shall pay any and all taxes levied
on such interest.
20
Lessee shall pay any and all taxes upon personal
property and improvements belonging to Lessee and upon its
possessory interest, if any, in property of Lessor, and Lessee
shall pay all sales and other taxes levied against the
operation of its business.
22. INSURANCE.
Prior to the commencement date of this Lease, Lessee
shall furn1sh the Lessor with certificates showing the type,
amount, class of operations covered, effective dates and dates
of expiration of insurance polic1es. Such certificates, which
do not limit Lessee's indemn1fication, shall also contain
substantially the following statement: "The insurance covered
by this certificate will not be cancelled or materially
altered, except after thirty (30) days' written notice has
been received by the Lessor."
It ~s agreed that Lessee shall maintain in force at all
times during the performance of this Lease all appropriate
policies of insurance, and that said polic1es shall be secured
from a good and responsible company or companies, acceptable
to Lessor, doing insurance business in the State of
Californ1a.
Lessee shall maintain the follow1ng insurance coverage:
A. Liability Insurance. The general
11ability coverage shall provide the fallowina
minimum limits:
Bodily Injury----- $250,000 each person
$500,000 each occurrence
$500,000 aggregate
Property Damage--- $100,000 each occurrence
$250,000 aggregate
A combined single limit pal~cy with
aggregate limits in the amount of $1,000,000 will
be considered equivalent to the required minimum
limits. All sel1d coverage to include liability
for occurrences on the Premises. Lessor may, at
its option, require product liability insurance.
B. Worker's Comp~nsation. All employees of
the Lessee must be included under such policy in
an amount and with coverage to meet all
requirements of the Labor Code of the State of
California.
2l
c. Property Insurance. The Lessee shall
obtain and keep in force during the term of this
Lease a pol icy or policies of insurance covering
loss or damage to the Premises, in the amount of
at least 100% of the full replacement value
thereof, as the same may exist from time to time,
against all perils included within the
class1fication of fire, extended coverage,
vandalism, malicious mischief, flood, wave wash
and spec1al extended perils. Said insurance shall
provide for payment of loss thereunder to Lessor.
Each year during the term of this Lease Agreement,
Lessee shall provide Lessor with an amended
insurance endorsement which reflects the current
full replacement value of the Premises.
D. BU1lder's Risk Insurance. Before
commencement of any construction or demolition,
Lessee shall procure and shall maintain in force
until complet10n and acceptance of work, "all
risks" bU1lder's risk insurance including
vandalism and malicious mischief, covering
improvements in place and all material and
equipment at the Jobsite furnished under contract,
but excluding contractor's, subcontractor's and
construct10n manager's tools and equ1pment and
property owned by contractor's or subcontractor's
employees, with limits in accordance with project
value.
E. Boiler, Unusual Hazards and Other
Insurance. Lessee shall procure and keep in
force, in coverage satisfactory to Lessor:
(I) Boiler and mach1nery insurance if at
any time from time to time such equipment is
located on the Premises.
(2) If Lessee commits, permits or causes
the conduct of any activity or the bringing or
operation of any equipment on or about the
Premises creating unusual hazards, Lessee shall,
promptly on notice of demand from Lessor, procure
and maintain in force, during such activity or
operation, insurance sufficient to cover the risks
represented thereby. Lessor's demand for unusual
hazard insurance shall not constitute a waiver of
Lessor's right, if Lessor would otherwise have
that right, to demand the removal, cessation or
abatement of such activity or operation.
(3) Lessee may procure and maintain any
insurance not required by this Lease, but all such
insurance shall be subject to all of the
22
provisions hereof pertaining to insurance and
shall be for the benefit of Lessor and Lessee.
F. subr09ation Waiver. Lessee agrees that
in the event of loss due to any of the perils for
which it has agreed to provide insurance, that
Lessee shall look solely to its insurance for
recovery. Lessee hereby grants to Lessor, on
behalf of any insurer providing insurance to
either Lessee or Lessor Santa Monica with respect
to the serv~ces of Lessee herein, a waiver of any
right of subrogat~on which any such insurer of
sa~d Lessee may acquire aga1nst Lessor by virtue
of the payment of any loss under such insurance.
G. Fa1lure to Secure. If Lessee at anytime
during the term hereof, should fail to secure or
ma~nta1n the foreg01ng insurance, Lessor shall,
after two (2) days' notice, be permitted to obtain
such insurance in the Lessee's name or as an agent
of the Lessee and shall be compensated by the
Lessee for the costs of the insurance premiums.
Lessee shall pay Lessor interest on paid insurance
prem1ums at the maximum rate permitted by law
computed from the date written notice is received
that the premiums have been paid.
H. Additional Insured. Lessor, its City
Council, boards and comm~ssions, officers, agents,
servants, and el11ployees shall be named as an
add~tional insured under the policies of insurance
required by this Lease. The naming of an
add~tional 1nsured shall not affect any recovery
to which such addit10nal insured would be entitled
under this policy if not named as such additional
insured~ and an additional insured named herein
shall not be held liable for any premium or
expense of any nature on this pol icy or any
extenS10n thereof. Any other insurance held by an
additional insured shall not be required to
contribute anythJ.ng toward any loss or expense
covered by the insurance provided by this policy.
Proceeds from any such policy or policies shall be
payable to the Lessor primarily, and to the Lessee
secondar1ly, 1f necessary.
23. SAFETY REQUIREMENTS.
All work performed under this Lease shall be performed
in such a manner as to provide safety to the public and to
meet or exceed the safety standards outlined by the State of
California safety regulations. The Lessor reserves the right
to issue a restraint or cease and desist orders to the Lessee
23
when unsafe or harmful acts are observed or reported relative
to the performance of the work under th1s Agreement.
Lessee shall maintain Premises
persons and/or property resulting from
hazardous cond1tion noted by the Lessee,
of its operations, shall immediately
Lessor.
free of haZards to
its operations. Any
wh1ch is not a result
be reported to the
24. COMPLIANCES.
Lessee shall conduct all operations in accordance with
all laws and comply with all laws, state or federal,
ordinances, rules and regulations applicable to such business,
in effect or here1nafter adopted by the City of Santa Monica,
County of Los Angeles, State of California or the United
States, including compll.ance with all technical construction
codes adopted by the City of Santa Monica.
25. PERMITS &~D LICENSES.
Lessee shall obtain and maintain during the term of this
Lease, all appropriate licenses, permits and certificates that
may be required in connection with the operation of its
facility and for the provision of services hereunder and such
licenses, permits, and certificates shall be obtained without
add1tional expense to Lessor.
26. HOLD HARHLESS.
Lessee shall 1ndemn1fy and hold harmless Les sor, its
C1ty Counc1l, boards and commissions, offl.cers, agents,
servants and employees from and against any and all actions,
causes of action, obligat10ns, costs, damages, losses, claims,
liabilities and demands of any nature whatsoever, including
reasonable attorneys' fees, regardless of the merit or outcome
of any such cla1m or suit, arising from or in any manner
connected to the services or work conducted pursuant to this
Lease.
Lessee shall indemnify and hold harmless Lessor, its
City Council, boards and commissions, officers, agents,
servants and employees from and against any and all actions,
causes of action, Obligations, costs, damages, losses, claims,
liabilit1es and demands of any nature whatsoever, including
reasonable attorneys' fees, accruing or resulting to any and
all persons, firms or corporations furnishing or supplying
work, services, materials, equipment or supplies in connection
with services or work conducted or performed pursuant to this
Lease and arising out of such activities or work, and from any
and all claims and losses whatsoever, including reasonable
24
attorneys' fees, accruing or resulting to any person,
corporation for damage, injury or death arising
Lessee's operations.
firm or
out of
without limiting the generality of the foregoing, Lessee
hereby agrees that the Lessor, its C1ty Council, boards and
commissions, officers, agents, servants and employees, shall
not be liable for injury to Lessee's business or any loss of
income therefrom or for damaqe to the goods, wares,
merchandise, improvements or other property of Lessee,
Lessee's employees, invitees, customers, or any other person
in or about the Premises, nor shall Lessor, its City Council,
boards and commissions, officers, agents, servants and
employees be l~able for injury to the person of Lessee,
Lessee's employees, agents or contractors, whether such damage
or 1njury is caused by or results from fire, steam,
electric1ty, gas, water or ra1n, or from the breakage,
leakage, obstruction or other defects of pipes, sprinklers,
wires, appliances, plumbing, air conditioning or lighting
f1xtures, crime, or from any other cause, whether the said
damage or injury results from conditions arising upon the
Premises or upon other portions of the building of which the
Premises are a part, or from other sources or places and
regardless of whether the cause of such damage or injury or
the means of repa1r1ng the same is inaccessible to Lessee.
Lessor, its City Council, boards and commissions, officers,
agents, servants and employees shall not be liable for any
damages aris~ng from any act or neglect of any other Lessee,
if any, of the building in Wh~ch the Premises are located.
27. PROHIBITION AGAINST TRANSFER.
Lessee shall not assign, sublease, hypothecate, or
transfer this Lease or any interest therein, directly or
indirectly, by operation of law or otherwise without the prior
written consent of the Lessor: any attempt to do so without
complY1ng w1th the foreg01ng shall be null and void, ann any
assignee, sublessee, lienholder or transferee shall acquire no
r1ght or interest by reason of such attempted assignment,
hypothecation or transfer.
The sale, assignment, transfer or other disposition of
any of the issued and outstanding capital stock of Lessee, or
of the interest of any general partner or joint venturer or
synd1cate member or cotenant if Lessee is a partn ership or
joint venturer or syndicate or cotenancy, which shall result
in changing the control of Lessee, shall be construed as a
transfer of this Lease. Control means fifty percent (50%) or
more of the voting power of the corporation.
For the purpose of this Lease, any conces s ionaire or
licensee on the Premises Lessee shall be deemed to be a
sublessee, and all of the provisions of this Section shall be
25
equally applicable to the granting of any concession or
license and to concessionaires or licensees with the same
force and effect as though specifically provided herein.
If Lessee desires at any time to assign or otherwise
trans fer this Lease or to sublet the Premises or any portion
thereof t it must f~rst notify Lessor of its desire to do so
and shall submit in wr1ting to Lessor the name of the proposed
sublessee or assignee, the nature of the proposed sublessee's
or assignee's business to be carr1ed on in the Premises, the
terms and prov1sions of the proposed sublease or assignment,
and such financial information as Lessor may reasonably
request concerning the proposed sublessee or assignee.
Lessor's consent to any assignment, subletting or other
transfer, is subject to compliance with all of the following:
A. Lessee shall remain fully liable under the
Lease during the unexp1red term hereof.
B. Lessee shall provide Lessor with evidence
reasonably satisfactory to Lessor that such transfer
will not devalue Lessor's interest under this Lease, the
proposed trans feree is financi ally responsible t the
f1nancial strength of the proposed transferee equals or
exceeds that of the current Lessee and the the use of
the Premises by the proposed transferee is consistant
with that specified in Sect10n 2 of this Lease.
c. Lessee shall re1mburse Lessor for Lessor's
reasonable attorneys' fees incurred in connection W1 th
the review, processing and documentation of such
transfer request, not to exceed the sum of five hundred
dollars ($500.00). Nothing contained herein shall be
construed to limit the amount of attorneys I fees under
any other prov1sion of this Lease.
D. The only compensation that Lessee shall be
ent1tled to receive for the sublease t assignment or
trans fer of th1s Lease or any interest therein is the
fair market value of Lessee's bus1ness and goodwill that
remains on the Premises less any value attributable to
the leasehold interest. The value of the leasehold
interest shall be determined by the use of a fair market
appraisal that is prepared in a form and manner
acceptable to Lessor. Except as provided for herein,
Lessee shall not receive any other compensation from the
sublease, assignment or transfer of this Lease. Lessor
reserves the right to inspect the books, records and
documents of Lessee and the assignee, trans feree or
sublessee to determine the validity of the compensation
stated for the transfer, sublease or assignment.
26
E. Any sublessee of part or all of Lessee's
interest in the Premises shall agree that in the event
that Lessor gives such sublessee notice that Lessee is
in default under this Lease, such sublessee shall
thereafter make all sublease or other payments directly
to Lessor, Which payments will be received by Lessor
without any liability whether on the sublease or
otherwise (except to credit such sums against those due
under the Lease), and any sublessee shall agree to
attorn to Lessor or its successors and assigns should
this Lease be terminated for any reason, except that in
no event shall Lessor or its successors or assigns be
obligated to accept such attornment.
F. Any such transfer and consent shall be
effected on forms approved by Lessor.
G. Lessee shall not then be in default hereunder
in any respect.
H. Any such sublessee, assignee or transferee
must agree to assume, be bound by and perform all of the
terms, covenants and conditions of this Lease which
could reasonably be construed as applicable to such
transferee, subject to the condition that Lessor shall
not be bound to any provision of any agreements
pertaining to such transfer to the extent such agreement
grants rights not possessed by Lessee against Lessor.
I. One executed copy of any and all written
instruments evidencing or relating to any such
assignment, sublease or transfer shall be delivered to
Lessor.
Notwithstanding any other provision hereof, the request
of Lessee for Lessor's consent to assiqnment, sublease or
transfer is additionally construed as an offer by Lessee to
trans fer Lessee's interest to Lessor upon payment of the sum
computed under subsection D above. Lessor may accept this
offer within sixty (60) days after receipt thereof. If so
accepted, the transfer shall be deemed consumated and Lessor
shall acquire all the interest, r1ght and title of the
proposed assignee, sublessee or transferee.
Lessor has the right, at its sole discretion, to assign,
sublease, hypothecate or transfer this Lease or any interest
therein to any person or entity. In the event of any bona
fide transfer or transfers of the title of such fee ownership,
the Lessor herein named, except as hereinafter provided (and
in case of any subsequent transfers or conveyances, the then
grantor after the date of such transfer or conveyance) shall
be automatically freed and relieved from all personal
liability as respects the performance of any covenants or
ob11gations on the part of the Lessor contained in this Lease
27
thereafter to be performed, provided that any funds in the
hands of such Lessor, or the then grantor, at the time of such
transfer in which Lessee has an interest shall be turned over
to the grantee, and any amount then due and payable to Lessee
by Lessor, or the then grantor, under any provision of this
Lease shall be paid to Lessee. It being intended hereby that
the covenants and obligations contained in the Lease on the
part of Lessor shall, subject as aforesaid, be binding on
Lessor, its successors and assigns only during and in respect
of the~r respect~ve successive periods of ownership_
28. MERCHANT'S ASSOCIATION.
Lessee shall join and, at all times during the Lease
Term, ma1ntain membership 1n any Merchant's Association that
may be sponsored by Lessor for SUbstantially all of the retail
businesses on the Santa Monica Pier. The fee for such
membership shall be determined by the members of that
organization but in no event shall be less than four percent
(4%) of M1nimum Monthly Rent as defined in Section 3. Lessor
shall advise the Merchant's Associations of all pending
actions, plans and proposals which materially affect the Santa
Monica Pier.
All funds of the Merchant's Association shall be
maintained in a joint account requiring the signature of a
representati ve of the Merchant I s Association and the Lessor
prior to w1thdrawal and shall be subject prior written
approval of Lessor of all expenditures from said account. All
the expenditures of the Merchant I s Association shall be for
the sole purpose of promoting the Santa Monica Pier and any
change, add1tion or amendment to the bylaws of the Merchant's
Associat10n shall require the pr10r written consent of Lessor.
Lessor shall join and maintain membership in the
Merchant's Association and equally match, on a noncumulative
basis, all dues and assessments collected by the Merchant 's
Association from lessees during each year, except that in no
case shall Lessor's obligation to pay dues and assessments
exceed the sum of $ in any year.
29. SECURITY INTEREST.
The Lessor shall have a security interest upon and
against all personal property belonging to Lessee and used in
connection with said Premises to secure the payment of any and
all sums due to the Lessor pursuant to the terms of this
Lease. The Lessee shall not encumber its personal property on
the Premises without the prior written approval of the Lessor.
28
30. DAMAGE OR DESTRUCTION OF PREMISES.
A. Definitions. "Premises Partial Damage" shall herein
mean damage or destruction to the Premises to the extent that
the cost of repair is less than 25% of the full insurable
val ue of the Premises. "Premises Building Partial Damage"
shall herein mean damage or destruction to the bui lding of
which the Premises are a part to the extent that the cost of
repair is less than 25% of the full insurable value of such
building as a Whole.
"Premises Total Destruction" shall herein mean damage or
destruction to the Premises to the extent that the cost of
repair is 25% or more of the full insurable value of the
Premises and the repairing and rebuilding of the Premises
would exceed ninety (90) days. "Premises Building Total
Destruction" shall herein mean damage or destruction to the
building of which the Premises are a part to the extent that
the cost of repa1r is 25% or more of the full insurable value
of such building as a whole and the time for the repairing and
rebuild1ng of the Premises would exceed ninety (90) days.
"Insured Loss" shall herein mean damage or destruction
which was caused by an event required to be covered by the
insurance descr~bed in Section 22.
B. Partial Damage Insured Loss. Subject to the
pravis10ns of subsections D, E and F, if at any time during
the term of th~s Lease there 1S damage which is an Insured
Loss and which falls into the classification of Premises
Partial Damage or Premises Building Partial Damage, then
Lessor shall, at Lessor's expense, repair such damage, but not
Lessee's equipment or Lessee improvements unless the same have
become a permanent part of the Premises as a fixture hereof as
soon as reasonably possible and tltis Lease shall continue in
full force and effect. Lessor shall repair such damage to a
substantially equivalent leaseable square footage as existed
prior to occurence of the damage. Notwithstanding the above,
if the insurance proceeds received by Lessor are not
sufficient to effect such repair, Lessor shall give notice to
Lessee of the amount required in addition to the insurance
proceeds to effect such repair. Lessee shall contribute the
required amount to Lessor within ten days after Lessee has
received notice from Lessor of the shortage in the insurance.
When Lessee shall contribute such amount to Lessor, Lessor
shall make such repairs as soon as reasonably possible and
this Lease shall continue in full force and effect. Lessee
shall in no event have any right to reimbursement for any such
amounts so contributed.
c. Part~al Damage
prov1sions of subsections D,
the term of this Lease there
Loss and which falls within
Uninsured Loss. Subject to the
E and F, if at any time during
is damage which is not an Insured
the classification of Premises
29
Partial Damage or Premises Building Partial Damage, unless
caused by a negligent or willful act of Lessee (in which event
Lessee shall make the repairs at Lessee's sole expense),
Lessor may at Lessor's option eitner (i) repair such damage as
soon as reasonably possible at Lessor I s expense, in which
event this Lease Agreement shall continue in full force and
effect, or (i1) give written notice to Lessee within thirty
(30) days after the date of the occurrence of such damage of
Lessor' s intent~on to cancel and terminate this Lease, as of
the date of the occurrence of such damage. In the event
Lessor elects to give such notice of Lessor's intention to
cancel and terminate th1s Lease, Lessee shall have the right
with1n ten (10) days after the rece1pt of such notice to give
written notice to Lessor of Lessee's intention to repair such
damage at Lessee's expense, without reimbursement from Lessor,
in which event th1s Lease shall continue in full force and
effect, and Lessee shall proceed to make such repairs as soon
as reasonably possible. If Lessee does not give such notice
within such ten (10) day period th1s Lease shall be cancelled
and terminated as of the date of the occurrence of such
damage.
D. Total Destruction. If at any time during the term
of this Lease there is damage, whether or not an Insured Loss
(includ1ng destruction or demolition required by any
authorized pub11c authority), which falls into the
class1fication Prem1ses Total Destruction or Premises Building
Total Destruction, this Lease shall automatically terminate as
of the date of such total destruction.
E. ~amage, .Near End of Terl'l. If at any time during the
last S1X months of the term of th1s Lease, which is determined
for purposes of th1S paragraph as including any opt ions to
extend the terM of this Lease, there is damage, whether or not
an Insured Loss, wh1cn falls within tne classification of
Prem1ses Part1al Damage, Lessor may at Lessor's option cancel
and terminate th1s Lease as of the date of occurrence of such
damage by giv1ng written notice to Lessee of Lessor's election
to do so within thirty (30) days after the date of occurrence
of such damage.
F. Lessee's Remedies. Lessee shall have no claim
against Lessor, its City Council, boards and commissions,
off1cers, agents, servants and employees for any damage, loss
of business or good will, alterations, improvements, fixtures,
furnishings, equipment, buildings, structures, vehicles and
inventory suffered by reason of any such damage, destruction,
repair or restoration.
If Lessor shall be obligateCl to repair or restore the
Premises under the provisions of this Section and shall not
commence such repair or restoration within ninety (90) days
after such obligations shall accrue, Lessee may at Lesse e' s
option cancel and terminate this Lease by giving Lessor
30
written notice of Lessee's election to do so at any time prior
to the commencement of such repair or restoration. In such
event, this Lease shall terminate as of the date of such
notice.
G. Termination - Advance Payments. Upon termination of
this Lease pursuant to this Section, an equitable adjustment
shall be made concerning advance rent and any advance payments
made by Lessee to Lessor. Lessor shall, in addition, return
to Lessee so much of Lessee's secur1ty deposit, including any
accrued interests thereon, as has not theretofore been applied
by Lessor.
H. Waiver. Lessor and Lessee waive the provisions of
any statutes which relate to termination of leases when leased
property is destroyed and agree that such event shall be
governed by the terms of this Lease.
I. Consistency. Any
application of this Section 30
31 shall be resolved in favor
31.
incons1stencies between the
and the provisions of Section
of the application of Section
31. DAMAGE OR DESTRUCTION OF THE SANTA MONICA PIER.
A. In the event that the Santa Monica P1er is damaged
or destroyed by fl-re or any other cause, to the extent of
fJ.fty percent (50%) of the insured value or replacement cost,
which shall be determ1ned by Lessor in its sole discretl-on,
Lessor shall have the right to either (i) terminate this Lease
by giv1ng to Lessee written not1ce thereof, which shall be
given, if at all, within ninety (90) days following the date
of sa1d occurrence, in which case the Lease shall be
terminated as of the date of such occurrence, or (ii) give
written notice to Lessee within ninety (90) days following the
date of said occurrence of Lessor' 5 intention to repair such
damage as soon as reasonably possible at Lessor's expense, 1n
which event this Lease shall continue in full force and
effect. This Section is to be deemed effective
notwithstanding that the Premises may be unaffected by such
f1re or other cause.
B. In the event Lessor elects to qive such notice of
Lessor's intent10n to cancel and terminate this Lease provined
in this Section, Lessee shall have the right within thirty
(30) days after the receipt of such notice to give written
not1ce to Lessor of Lessee's intention to repair such damage
at Lessee's expense, without reimbursement from Lessor, in
which event th1s Lease shall continue in full force and
effect. Lessee shall proceed to make such repairs as soon as
reasonably possible, If Lessee does not give such notice
within such thirty (30) day period this Lease shall be
cancelled and terminated as of the date of the occurrence of
such damage.
31
c. Notwithstanding the above, in the event that any
damage or destruction that occurs subsequent to the execution
of this Lease and results in the Lessor's gross expenses for
the Santa Monica Pier exceeding its gross revenues from the
Santa Monica Pier, Lessor shall have the right to terminate
this Lease by g1ving to Lessee written notice thereof, which
notice shall be given, if at all, wi thin ninety (90) days
following the date of said occurrence. Rent shall be prorateo
as of the effective date of such termination.
D. Lessee shall have no claim against Lessor, its City
Council, boards and commissions, officers, aqents, servants
and employees for any damage, including, but -not limited to,
personal property, loss of business or good will, alterations,
improvements, fixtures, furnishings, equipment, buildings,
structures, vehicles, and inventory suffered by reason of any
such damage, destruction, repa1r or restoration.
E. If Lessor shall be obligated to repair or restore
the Premises under the provisions of this paragraph and shall
not commence such repa1r or restoration wi thin ninety (90)
days after such obligations shall accrue, Lessee may at
Lessee's option cancel and terminate this Lease by giving
Lessor written not1ce of Lessee's election to do so at any
t1me prior to the commencement of such repair or restoration.
In such event, this Lease shall terminate as of the date of
such notice.
F. Upon terminat10n of this Lease pursuant to this
Section, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Lessee to
Lessor. Lessor shall, in addition, return to Lessee so much
of Lessee's security deposit, including any accrued interest
thereon, as has not theretofore been applied by Lessor.
Lessee and Lessor agree that Lessor shall have no additional
obligations to Lessee than that which is specified in this
Section.
G.
statutes
property
governed
Lessor and Lessee waive the provisions of any
which relate to termination of leases when lease
is destroyed and agree that such event shall be
by the terms of this Lease.
32.
SUBORDINATION.
This Lease is and shall be subordinate to any
encumbrance now of record or recorded by Lessor after the date
of th1s Lease affecting the Premises.
Such subordination is effective without any further act
of Lessee. Lessee shall from time to time on request from
Lessor execute and deliver any documents or instruments that
may be required by a lender to effectuate any subordination.
32
If Lessee fails to execute and deliver any such documents, or
instruments, Lessee irrevocably constitutes and appoints
Lessor as Lessee's special attorney-in-fact to execute and
deliver any such documents or 1nstruments.
33. DEFAULTS.
The occurrence of anyone or more of the following
events shall constitute a material default and breach of th1s
Lease by Lessee:
A. The vacat1ng or abandonment of the Premises by
Lessee.
B. The failure by Lessee to make any payment of rent or
any other payment required to be made by Lessee hereunder, as
and when due, where such failure shall continue for a period
of three business days after written notice thereof from
Lessor to Lessee. In the event that Lessor serves Lessee with
a Notice to Pay Rent or Quit pursuant to applicable Unlawful
Deta~ner statutes, such Notice to Pay Rent or Quit shall also
constitute the notice required by this subsection.
C. Except as specified in subsection B, the failure by
Lessee to observe or perform any of the covenants, conditions
or prov1sions of this Lease to be observed or performed by
Lessee where such failure shall continue for a period of ten
(10) days after written notice hereof from Lessor to Lessee;
provided, however, that if the nature of Lessee's default is
such that more than ten (lO) days are reasonably required for
1ts cure, then Lessee shall not be deemed to be in default if
Lessee co~enced such cure within said ten (10) day period and
thereafter diligently prosecutes such cure to completion.
D. The making by Lessee of any general arrangement or
assignment for the benefit of creditors.
E. Lessee becomes a "debtor" as defined in 11 v.s.c.
Section lOI or any successor statute thereto (unless, in the
case of a petition filed against Lessee, the same is dismissed
within 60 days).
F. The
possession of
the Premises
possession is
appointment of a trustee or receiver to take
substantially all of Lessee's assets located at
or of Lessee's interest in this Lease, where
not restored to Lessee within thirty (30) days.
G. The attachment, execution or the judicial seizure of
substantially all of Lessee's assets located at the Premises
or of Lessee's interest in this Lease, where such seizure is
not discharged within thirty (30) days.
H. The discovery by Lessor that any financial statement
given to Lessor by Lessee was materially false.
33
I. The failure of Lessee to maintain active and paid
membership in the association described in Section 28 hereof.
34. REMEDIES.
In the event of any such material default or breach by
Lessee, Lessor may at any time thereafter, with or without
notice or demand and without limiting Lessor in the exercise
of any right or remedy which Lessor may have by reason of such
default or breach:
A. Term1nate Lessee's right to possession of the
Premises by any lawful means, in wh1ch case this Lease shall
term1nate and Lessee shall immediately surrender possession of
the Premises to Lessor. In such event, Lessor shall be
entitled to recover from Lessee all damages incurred by Lessor
by reaSOn of Lessee's default, including, but not limited to,
the cost of recovering possession of the Premises: expenses of
relett1ng, including necessary renovation and alternation of
the Premises and reasonable attorneys' fees.
B. Maintain Lessor's right to possession, in Which case
this Lease shall continue in effect whether or not Lessee
shall have abandoned the Premises. In such event, Lessor
shall be entitled to enforce all of Lessor's rights and
remedies under th1s Lease.
c. Pursue any other remedy now or hereafter available
to Lessor under the laws of judicial decisions of the State of
California. Unpaid installments of rent and other unpaid
monetary obligations of Lessee under the terms of this Lease
shall bear interest from the date due at the maximum rate then
allowable by law.
35. DEFAULT BY LESSOR.
Lessor shall not be in default unless Lessor fails to
perform obligat10ns required of Lessor wi thin a reasonable
t1me, but in no event la ter than thirty (30) days after
written notice by Lessee to Lessor and to the holder of any
first mortgage or deed of trust covering the Premises whose
name and address shall have theretofore been furnished to
Lessee in writing, specifying wherein Lessor has failed to
perform such obligations: provided, however, that if the
nature of Lessor's obligat1on is such that more than th1rty
(30) days are required for performance then Lessor shall not
be in default if Lessor commences performance wi thin such
thirty (30) day periOd and thereafter diligently prosecutes
the same to complet1on.
Nothing contained herein shall be construed as limiting
the right of Lessee to pursue any legal remedies it may have
in the event of a default by Lessor.
34
36. COMPENSATION UPON TERMINATION.
Upon any termination, each party shall pay that portion
of the compensation specified in Section 3 hereof unpaid prior
to the effective date of termirtation of the Lease or other
incompletion of the Lease Term.
37. REMOVAL OF PERSONAL PROPERTY.
Upon any termination, Lessor shall have the right, with
forty-e1ght (48) hours' written notice, to remove and dispose
of any and all personal property, furnishings and equipment
wh1ch remain on the Prem1ses after termination or expiration
of the term of this Lease without jud1cial action. Upon the
expiration of such forty-eight (48) hours' written notice, all
personal property, furn1shings ann equipment remaining in the
Premises shall conclusively be deemed abandoned and shall
become Lessor's property free and clear.
38. CONDEMNATION.
If the Premises or any portion thereof is taken under
the power of eminent doma1n, or sold under the threat of the
exercise of said power (all of which are herein called
"condemnation"), this Lease shall terminate as to the part so
taken as of the date the condemning authority takes title or
possession, whichever f1rst occurs. If more than 10% of the
floor area of the building on the Premises, or more than 25%
of the area of the Premises which is not occupied by any
building, is taken by condemnation, Lessee may, at Lessee's
option, to be exercised in writing only within ten (10) days
after Lessor shall have given Lessee written notice of such
taking (or in the absence of such notice, within ten (10) days
after the condemn1ng authority shall have taken possession),
terminate this Lease as of the date the condemning authority
takes such possession.
If Lessee does not terminate this Lease in accordance
with the foregoing, this Lease shall remain in full force and
effect as to the portion of the Premises remaining, except
that the rent shall be reduced in the proportion that the
floor area of the Premises taken bears to the total area of
the original Premises. Any award for the taking of all or any
part of the Premises under the power of eminent domain or any
payment made under threat of the exercise of such power shall
be the property of Lessor, whether such award shall be made as
compensation for diminution in value of the leasehold or for
the taking of the fee, or as severance dama.;fes: provided,
however, that Lessee shall he entitled to any award for loss
of or damage to Lessee's trade fixtures and removable personal
property.
35
In the event that this Lease is not terminated by reason
of such condemnation, Lessor shall, to the extent of severance
damages received by Lessor in connection with such
condemnation, repair any damage to the Premises caused by such
condemnation except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall
pay any amount in excess of such severance damages required to
complete such repair.
39. NOTICES.
All not1ces, demands, requests or approvals to be given
under this Lease shall be given in writing and shall be deemed
served when delivered personally, or seventy-two (72) hours
after the deposit thereof in the United States mail, postage
prepaid, registered or cert1fied, addressed as hereinafter
provided.
All notices, demands, requests or approvals from Lessee
to Lessor shall be addressed to:
City Hall
1685 Main Street
Santa Monica, Californ1a 90401
Attent10n:
All notices, demands, requests or approvals from the
Lessor to Lessee shall be addressed to:
40. PRODUCTION OF STATEMENT, RECORDS k~D AUDIT.
Lessee agrees to keep and maintain at the Premises a
full, permanent, and accurate set of books and records of all
sales of merchandise and revenue derived from the conduct of
business in, at or from the Premises from which Gross Sales
can be determined and all supporting records, including all
federal, state and local tax returns. Lessee agrees to
furnish to Lessor cop1es of its quarterly California sales and
use tax returns at the time that each is filed with the State
of Cal~forn1a.
Lessor may specify the method, manner and procedure for
preparation and ma1ntenance of the financial records
pertaining to the Premises. All such record s shall be
maintained in accordance with generally accepted accounting
principles and shall be clearly identified and readily
accessible.
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Lessee further agrees that it will keep, retain, and
preserve for at least three (3) years all records, books,
bankbooks, or duplicate deposit books, and other evidence of
Gross Sales for such year. Lessee agrees to install in the
Premises a cash register, or registers, approved by Lessor,
equipped with a cumulative total, and sealed and maintained in
a manner approved by Lessor. Lessee agrees to register, or
cause to be registered upon such cash register, or registers,
all amounts required to be included in Gross Sales.
Lessor shall have the right, without prior notice and at
Lessor's expense, to inspect and audit Lessee's books and
record s and to make transcr1pts therefrom to verify the
payment due Lessor. Such audit may be made at any time during
normal business hours without prior not1ce by Lessor. If
Lessor's audit discloses an error of five percent (5%) or more
in Gross Sales as reported by Lessee which results in an
underpayment of the rent specified in paragraph 3 and Lessor's
audit is correct, Lessee shall pay the cost of Lessor's audit
computed on the bas~s of four (4) times the direct payroll of
the audit staff complet1ng the audit and audit report. Lessee
shall i~ediately pay all deficiencies to Lessor.
Lessor shall keep any information gained from such
statements, inspection, or audit confidential and shall not
disclose it other than to carry out the purposes of this
Lease, except that Lessor shall be permitted to divulge the
contents of any statements in connection with any financing
arrangements or sale of Lessor's interest in the Premises.
4l. ESTOPPEL CERTIFICATE.
Either party shall at any time upon not less than twenty
(20) days' prior written notice from the other party, execute,
acknowledge and deliver a statement in wr1ting (i) certifying
that this Lease is unmodified and in full force and effect
(or, if modif1ed, stating the nature of such modif1cation and
certifY1ng that this Lease. as so modified, is 1n full force
and effect) and the date to wh1ch the rent and other charges
are paid in advance, 1f any, and (ii) acknowledging that there
are not, to that party's knowledge, any uncured defaults or
specifying such defaults if any are claimed. Any such
statement may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Premises.
The failure to deliver such statement within such time
shall be conclusive that (i) this Lease is in full force and
effect, without modification except as may be represented by
the requesting party, (ii) there are no uncured defaults in
the requesting party's performance, and (iii) not more than
one (1) month's rent has been paid in advance.
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If Lessor desires to finance, ref1nance, or sell the
Premises, or any part thereof, Lessee hereby agrees to deliver
to any lender or purchaser designated by Lessor such financial
statements of Lessee as may be reasonably required by such
lender or purchaser. Such statements shall include the past
three years I financial statements of Lessee. All such
financial statements shall be received by Lessor and such
lender or purchaser in conf~dence and shall be used only for
the purposes herein set forth.
42. INTEREST ON PAST-DUE OBLIGATIONS.
Except as expressly herein provided, any amount due to
Lessor not paid when due shall bear interest at the maximum
rate then allowable by law from tne date due. Payment of sucn
interest shall not excuse or cure any default by Lessee under
this Lease, provided, however, that interest snall not be
payable on late charges incurred by Lessee or on any amounts
upon Which late charges are paid by Lessee.
43. TIME OF ESSENCE.
Time is of the essence.
44. ADDITIONAL RENT.
Any monetary obligations of LeSsee to Lessor under the
terms of this Lease shall be deemed to be rent.
45. WAIVERS.
No waiver by Lessor or any provision hereof shall be
deemed a waiver of any other provision hereof or of any
subsequent breach by Lessee of the same or any other
provision. Lessor's consent to, or approval of, any act shall
not be deemed to render unnecessary the obtaining of Lessor's
consent to or approval of any subsequent act by Lessee. The
acceptance of rent hereunder by Lessor shall not be a waiver
of any preceding breach by Lessee of any provision hereof,
other than the fa1lure of Lessee to pay the particular rent so
accepted, regardless of Lessor's knowledge of such preced1ng
breach at the time of acceptance of such rent.
46. RECORDING.
Either Lessor or Lessee shall, upon request of the
other, execute, acknowledge and deliver to the other a "snort
form" memorandum of this Lease for record1ng purposes.
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47. ~UMULATIVE REMEDIES.
No remedy or election hereunder shall be deemed
exclusive, but shall, wherever possible, be cumulative with
all other remedies at law or in equity.
48. SECURITY MEASURES.
Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or
other security measures and that Lessor shall have no
obligation whatsoever to provide same. Lessee assumes all
responsibility for the protection of Lessee, its employees and
agents, invi tees, customers, and property from acts of third
parties.
49. EASEMENTS.
Lessor reserves to itself the right, from time to time,
to grant such easements, rights and dedications that Lessor
deems necessary or desirable, and to cause the recordat10n of
parcel maps and restrictions so long as such easements,
rights, dedications, parcel maps and restrictions do not
unreasonably interfere with the use of the Premises by Lessee.
Lessee shall sign any of the aforementioned documents upon
request of Lessor and failure to do so shall constitute a
mater1al breach of this Lease.
50 . HOLDOVER.
Any holding over by Lessee after the expiration or any
termination of this Lease shall not constitute a renewal or
extension of the term of this Lease.
5l. RELATIONSHIP OF PARTIES.
Nothing contained in this Lease shall be deemed or
construed to create the relationship of principal and agent or
of partnership or of joint venture or of any association
between Lessor and Lessee or any other relationship other than
Lessor and Lessee.
52. COSTS OF LITIGATION.
If any legal action is necessary to enforce any
provision hereof or for damages by reason of an alleged breach
of any provisions of this Lease, the prevailing party shall be
entitled to receive from the losing party all costs and
expenses and such amount as the court may adjudge to be
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reasonable attorneys I fees for the costs incurred by the
prevailing party in such action or proceeding.
53. COUNTERPARTS.
Th~s Lease may be executed in several counterparts, each
of which is an original, and all of which together constitute
but one and the same document.
54. CAPTIONS FOR CONVENIENeE.
The captions herein are for convenience and reference
only and are not a part of this Lease and do not in any way
limit, define, or amplify the terms and provisions hereof.
55. GOVERNING LAW.
This Lease has been made and shall be construed and
interpreted in accordance with the laws of the State of
California.
56. MERGER OF NEGOTIATIONS.
This Lease represents the full and complete
understanding of every k1nd and nature whatsoever between the
parties hereto and all preliminary negotiations and agreements
of whatsoever kind or nature are merged herein. No verbal
agreement or implied covenant shall be held to vary the
prov1sions hereof.
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IN WITNESS WHEREOF, the parties have caused this Lease
to be executed the day and year first above written.
CITY OF SANTA MONICA,
a municipal corporation
BY
John H. A1schuler, Jr.
City Manager
APPROVED AS TO FORM:
Robert M. Myers
City Attorney
LESSEE:
BY
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Optional Clause A:
and Alterations.
Insert in Section 14, Improvements
Lessee agrees to construct the improvements described in
Exhibit" "which is attached hereto and incorporated herein
by this reference, in the t1me, manner, specification and
schedule set forth therein. Lessee shall not be entitled to
Percentage Rent Offset set forth in Section of this Lease
for the improvements described in said Exhibit.
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Qptional Clause B: Insert in Section 4, Percentage Rent.
E. Percentage Rent Offset. Lessee shall be entitled to
an offset of up to one half of the monthly Percentage Rent on
the following terms and cond~tions (hereinafter referred to as
"Percentage Rent Offset If) :
(I) Lessee has complied with all the provisions of
Section 14 hereof.
(2) The Percentage Rent Offset is limited to
structural improvements consistent with Section 14 of
this Lease where the approved cost is in excess of
$10,000. (The approved cost is the cost of the
structural improvements as determined by Lessor, in its
sole discretion.) In the event that Lessee disputes the
amount to be determined to be the approved cost, Lessee
has the option of performing a certified construction
audit and submitting the results to Lessor. The
ident~ty of the auditor shall be mutually determined by
Lessor ann Lessee prior to commencement of the audit and
the cost shall be solely borne by Lessee.
(3) The maximu~ total amount of Percentage Rent
Offset during the Lease Term is fifty percent (50%) of
the approved cost.
(4) The maximum total amount of time that Lessee
can claim or apply Percentage Rent Offset is the earlier
of (i) duration of the economic life of the structural
improvement as set by the California State Board of
Equalization Component Economic Life Criteria or other
standard mutually determined to be similar or (ii)
terminat10n or expirat10n of the term of this Lease Term
or (i~1) the transfer of any of Lessee's right, title or
interest in this Lease as defined in Section 27 of this
Lease or (1V) the date of total amount of Percentage
Rent Offset during the Lease Term exceeds fifty percent
(50%) of the approved cost.
(5) Lessee shall have obtained prior written
consent of Lessor for Percentage Rent Offset detailing
the structural improvement subject to Percentage Rent
Offset, the approved cost, the total amount that Lessee
is entitled to offset against Percentage Rent and the
duration of the economic life of the structural
improvement.
(6) Together with the statement described in
Section 3 above, Lessee shall have submitted a statement
to Lessor itemizing the date of Lessor's consent to
Percentage Rent Offset, approved cost, previous offsets
of Percentage Rent Offsets and remaining time for
duration of economic life of the structural improvement.
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11-C: BOATHOUSE HOSTS. INC: Presented was a staff report
transm~tting a request of Boathouse Hosts, Inc. to expand the
Boathouse Restaurant at 301 Santa Monica P~er.
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CITY COUNCIL MI~UTES OF OCTOBER 12, 1982