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HomeMy WebLinkAboutAGMT - Seal Beach Pleasure Fishing (Pier Sport Fishing) • k4 i � • 110 411 LEASE (Seal Beach Pier Sport Fishing Facilities) ir v IS LASE is made and entered into as of the ��day of , 1981, by and between the CITY OF SEAL BEACH, a municipal corporation ( "City "), and SEAL BEACH PLEASURE FISHING, INC., a California corporation ( "Tenant "). RECITALS A. City is the owner of the Seal Beach Fishing Pier ( "the Pier "), subject to the terms of a Tidelands Lease ( "the Tidelands Lease "), dated June 22, 1967, recorded August 17, 1967 at Book 8345, Page 376, of Official Records of Orange County, California, and a Lease and Operating Agreement ( "the Operating Agreement "), dated December 12, 1983, recorded February 14, 1984, as Document No. 84- 063426 of said Official Records. B. Tenant desires to sublease a portion of the Pier from City for the purpose of operating a bait - and - tackle shop and other sport fishing facilities. C. City is willing to sublease a portion of the Pier to Tenant for such purposes in accordance with the terms and conditions set forth in this Lease. NOW, THEREFORE, in consideration of the mutual covenants herein contained, City and Tenant hereby agree as follows: 1. Definitions 1.01. General Definitions. As used in this Lease, the following words and phrases shall have the following meanings: (a) Alteration - any addition or change to, or modification of, the Premises made by Tenant including, without limitation, fixtures. (b) Authorized Representative - any officer, agent, employee, or independent contractor retained or employed by either Party, acting within authority given him by that Party. I, y ' (c) City - the City of Seal Beach, a muni- cipal corporation, and any Successor to City in the Premises. (d) Damage - injury, deterioration, or loss to a Person or groperty caused by another Person's acts or omissions. Damage includes death. (e) Damages - a monetary compensation or indemnity that can be recovered in the courts by any Person who has suffered damage to his person, property, or rights through another's act or omission. (f) Expiration - the coming to an end of the time specified in this Lease as its duration, including any extension of the Term resulting from the exercise of an option to extend. (g) Good condition - the good physical condition of the Premises and each portion of the Premises, including, without limitation, signs, windows, show windows, and appurtenances. "In good condition" means first - class, neat, clean, and broom - clean, and is equivalent to similar phrases referring to physical adequacy in appearance and for use. (h) Hold harmless - to defend and indemnify from all liability, losses, penalties, Damages, costs, expenses (including, without limitation, attorneys' fees), causes of action, claims, or judgments arising out of or related to any Damage to any Person or property. (i) Law - any judicial decision, statute, constitution, ordinance, resolution, regulation, rule, adminis- trative order, or other requirement of any municipal, county, state, federal, or other government agency or authority having jurisdiction over the Parties or the Premises, or both, in effect either at the time of execution of this Lease or at any time during the Term, including, without limitation, any regu- lation or order of a quasi - official entity or body (e.g., board of fire examiners or public utilities). (j) Maintenance - repairs, replacement, repainting, and cleaning. (k) Person - one or more human beings, or legal entities or other artificial persons, including, without limitation, partnerships, corporations, trusts, estates, asso- ciations, and any combination of human beings and legal entities. -2- 860926 jIw 0272AER(5) y ID • , (1) Premises - that portion of the Pier shown on Exhibit A attached hereto. (m) Provision - any term, agreement, covenant, condition, clause, qualification, restriction, reservation, or other stipulation in this Lease that defines or otherwise controls, establishes, or limits the performance required or permitted by either Party. (n) Rent - Minimum Monthly Rent, Percentage Rent, Taxes, insurance, utilities, and other similar charges payable by Tenant under the Provisions of this Lease. (o) Successor - assignee, transferee, personal representative, heir, or other Person succeeding law- fully, and pursuant to the provisions of this Lease, to the rights or obligations of either Party. (p) Tenant - Seal Beach Pleasure Fishing, Inc., a California corporation, and any Successor hereunder. (q) Term - the period of time during which Tenant has a right to occupy the Premises. (r) Termination - the ending of the Term for any reason before Expiration. 1.02. Other Definitions. The following additional terms are defined in the following sections of this Lease: (a) Adjustment Date §4.01(b) (b) Beginning Index §4.01(b) (c) Boat Landing Number One S2.02 (d) Boat Landing Number Two S2.02 (e) Boat Operations §5.01 (f) Extended Term §3.02 (g) Extension Index S4.01(b) (h) Gross Sales S4.02(d) -3- 860926 jIw 0272AER(5) . ( i ) Index S4.01(b) (j) Initial Term §3.01 (k) Lease Year S4.02(c) (1) Minimum Monthly Rent §4.01(a) (m) Operating Agreement Recital A (n) Option Notice §3.02 (o) Party §19.10 (p) Percentage Rent §4.02(a) (q) Percentage Rent Period §4.02(c) (r) Pier Recital A (s) Tidelands Lease Recital A 2. Lease of Premises. 2.01 Premises. City leases the Premises to Tenant and Tenant leases the Premises from City for the Term and on the conditions set forth in this Lease. 2.02 Use of Landing Platforms. Tenant and its Authorized Representatives and customers shall have the right to use boat landing number one ( "Boat Landing Number One "), located at the head of the Pier, on a non - exclusive basis, for the purpose of landing and departure. In the event and only so long as Boat Landing Number One is unavailable for Tenant's use because of City repairs to or Maintenance of Boat Landing Number One or the Pier, Tenant's customers and employees shall have the right to use boat landing number two ( "Boat Landing Number Two ") on a non - exclusive basis, for the purpose of land- ing and departure. In no event, however, shall City permit the use of Boat Landing Number One by other sublessees of City for the purpose of operating sports fishing boats or barges, with- out the written consent of Tenant. 2.03 Trade Fixtures and Personal Property. City also leases to Tenant and Tenant leases from City the trade fixtures and personal property listed in Exhibit B. Such trade -4- 860926 jIw 0272AER(5) w • • fixtures and personal property shall be included within the meaning of the term "the Premises" unless specifically excluded. 3. Term. 3.01 Initial Term The Term shall be fifteen (15) years, commencing November 1, 1986, and continuing until October 31, 2001 ( "Initial Term "), unless sooner terminated as hereinafter provided. 3.02 Option to Extend. (a) Grant of Option. Tenant may, at Tenant's option, extend the Term on all the provisions contained in this Lease for an additional period of five (5) years ( "Extended Term ") following Expiration of the Initial Term, by giving notice of exercise of the option ( "Option Notice ") to City at least six months before the Expiration of the Initial Term. However, if Tenant is in default on the date of giving the Option Notice, the Option Notice shall be totally ineffective, or if Tenant is in default on the last day of the Initial Term, the Extended Term shall not commence and this Lease shall expire at the end of the Initial Term. (b) Sole Right to Extend. Tenant shall have no other right to extend the Term beyond the Extended Term. 4. Rent. 4.01 Minimum Monthly Rent. (a) Initial Rate. Tenant shall pay to City as minimum monthly rent ( "Minimum Monthly Rent "), without deduction, setoff, prior notice, or demand, the sum of $500.00 per month for the months of January, February, March, April, May, October, November and December, and the sum of $1400.00 per month for the months of June, July, August and September, both of which sums are -Ay subject to adjustment as provided in §4.01(b). Minimum Monthly Rent shall be paid in advance on the first day of each month, commencing on the date the Term commences and continuing during the Term. Minimum Monthly Rent for the first month or portion thereof shall be paid on the day the Term commences. Minimum Monthly Rent for any partial month be prorated at the rate of 1 /30th of the Minimum Monthly Rent per day. -5- 861006 jIw 0272AER 7 • All Rent shall be paid to City at the address to which notices to City are given. (b) Periodic Adjustment. The Minimum Monthly Rent shall be adjusted annually on the anniversary of the date of commencement of the Term ( "the Adjustment Date ") as follows: - 1 The base for computing the adjustment is the Consumer Price Index for All Urban Consumers for the Los Angeles -Long Beach - Anaheim Metropolitan Area published by the United States Department of Labor, Bureau of Labor Statistics ( "Index "), which is published for the third calendar month preceding the date of the commencement of the Term ( "Beginning Index "). If the Index published for the third calendar month preceding the Adjustment Date ( "Extension Index ") has increased over or decreased below the Beginning Index, the Minimum Monthly Rent for the period until the next Adjustment Date shall be set by multiplying the amounts set forth in S4.01(a) by a fraction, the numerator of which is the Extension Index and the denominator of which is the Beginning Index. If the Index is changed so that the base year differs from that used for the Beginning Index, the Index shall be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the Index is discontinued or revised during 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 had not been discontinued or revised. 4.02 Percentage Rent. (a) Percentage. In addition to Minimum Monthly Rent, Tenant shall pay to City a sum ( "Percentage Rent ") equal to the difference of (i) 5% of the first $200,000.00 of Tenant's Gross Sales (as defined in S4.02(d)) during each Lease Year (as defined in §4.02(c)) plus 6% of Tenant's additional Gross Sales during each Lease Year, less (ii) the aggregate Minimum Monthly Rent paid during that Lease Year. (b) Method of Payment. Percentage Rent shall be computed each Percentage Rent Period (as defined in §4.02(c)). On or before the 10th day of the calendar month immediately following the close of each Percentage Rent Period, Tenant shall pay to City the amount by which the sum computed as a percentage of Tenant's Gross Sales during the Percentage -6- 860926 jIw 0272AER(5) • • Rent Period exceeds the Minimum Monthly Rent that Tenant has paid during the Percentage Rent Period under S4.01. Within 30 days after the end of each Lease Year City shall determine the amount of Percentage Rent based on the Gross Sales of Tenant during the Lease Year and the sums paid to City as Minimum Monthly Rent and Percentage Rent. If Tenant has paid to City an amount of Percentage Rent greater than the Percentage Rent it is in fact obligated to pay for the Lease Year pursuant to §4.02(a), Tenant shall be entitled to an immediate refund of the excess. If Tenant has paid to City an amount of Percentage Rent less than Tenant is required to pay, Tenant shall imme- diately pay the difference to City. (c) Percentage Rent Period; Lease Year Defined. A "Percentage Rent Period" is a calendar month, except that the first Percentage Rent Period shall commence on the date the Term commences and the last Percentage Rent Period shall end on the date the Term expires or terminates. A "Lease Year" is a calendar year, except that the first Lease Year shall commence on the date the term commences and the last Lease Year shall end on the date the Term expires or terminates. (d) Gross Sales Defined. "Gross Sales" of Tenant means the gross selling price of all merchandise or services sold, leased, licensed, or delivered in or from the Premises or connected with Boat Operations (as defined in §5.01) by Tenant, its permitted subtenants, licensees, or con- cessionaires, whether for cash or on credit (whether collected or not), including the gross amount received by reason of orders taken on the Premises although filled elsewhere, and whether made by Tenant's personnel or vending machines. Any transaction on an installment basis, including, without limita- tion, any "lay- away" sale or like transaction, or otherwise involving the extension of credit, shall be treated as a sale for the full price at the time of the transaction, irrespective of the time of payment or when title passes. Gross Sales also shall include any sums that Tenant receives from pay tele- phones, stamp machines, music machines, amusement machines, or public toilet locks. Gross Sales shall not include, or if included there shall be deducted (but only to the extent they have been included), the following: -7- 860926 jIw 0272AER(5) .. • • • (1) The selling price of all merchan- dise returned by customers and accepted for full credit, or the amount of discounts, refunds, and allowances made on such merchandise. (2) Refundable deposits collected by Tenant from its customers. (3) Sums and credits received in the settlement of claims for loss of or damage to merchandise. (4) The price allowed on all merchan- dise traded in by customers for credit or the amount of credit for discounts and allowances made instead of acceptance of merchandise. (5) Any sums paid to third parties for the use or rental of pay telephones, stamp machines, music machines, amusement machines, or public toilet locks. (6) Gift certificates, or similar vouchers, until such time as they shall have been converted into a sale by redemption. (7) Sales and use taxes, so- called , luxury taxes, consumers' excise taxes, gross receipts taxes, and other similar taxes now or in the future imposed on the sale of merchandise or services, but only if such taxes are added to the selling price, separately stated, collected separately from the selling price of merchandise or services, and collected from customers. (8) Sales of goods or services not involving the Pier which relate to the fishing barge operated by Tenant out of the City of Long Beach (for example, sales of tickets for transportation between the Pier and the fishing barge are to be included in Gross Sales, but equipment and tackle rentals on the fishing barge and sales of food on the fishing barge and the barge tender vessel are to be excluded from Gross Sales). (e) Statement of Gross Sales. Tenant shall furnish to City statements of Tenant's Gross Sales within ten (10) days after the end of each month, and annual statements of Gross Sales within thirty (30) days after the end of each Lease Year. Each statement shall be signed and certified to be correct by an officer of Tenant. Tenant shall keep at the Premises full and accurate books of account, records, cash receipts, and other -8- 860926 jIw 0272AER(5) ti U , III • pertinent data showing its Gross Sales. Tenant shall install and maintain accurate receipt - printing cash registers and shall record on the cash registers every sale and other transaction made from the Premises. Tenant shall also furnish to City copies of its quarterly California sales and use returns at the time each is filed with the State of California. Such books of account, records, cash receipts, and other pertinent data shall be kept for a period of three (3) years after the end of each Lease Year. The receipt by City of any statement, or any pay- ment of percentage rent for any period, shall not bind City as to the correctness of the statement or the payment. City shall be entitled during the Term and within three (3) years after Expiration or Termination of this Lease to inspect and examine all Tenant's books of account, records, cash receipts, and other pertinent data, so City can ascertain Tenant's Gross Sales. Tenant shall cooperate fully with City in making the inspection. City shall also be entitled, once during each Lease Year and once after expiration or termination of this Lease, to an independent audit of Tenant's books of account, records, cash receipts, and other pertinent data to determine Tenant's Gross Sales, by a certi- fied public accountant to be designated by City. The audit shall be limited to the determination of Gross Sales and shall be conducted during usual business hours at the Premises. If the audit shows that there is a defi- ciency in the payment of any Percentage Rent, the deficiency shall become immediately due and payable. The costs of the audit shall be paid by City unless the audit shows that Tenant understated Gross Sales by more than three percent (3 %), in which case Tenant shall pay all City's costs of the audit. 4.03 Taxes. As additional rent, Tenant shall pay direct to the appropriate taxing authorities all possessory interest taxes and all property taxes on personal property located on the Premises, levied or assessed upon or against the Premises or against Tenant during the Term. Such taxes shall be paid at least ten (10) days before delinquency and before any fine, interest or penalty shall become due or be imposed by operation of law for their non - payment, and Tenant shall promptly furnish to City satisfactory evidence establishing such payment. 4.04 Interest on Unpaid Rent. Rent not paid when due shall bear interest at the rate of 10% per annum from the date due until paid. -9- 860926 jIw 0272AER(5) • 5. Use. 5.01 Permitted Uses. Tenant shall use the Premises for the following purposes, and for no other purpose: (a) Operation by Tenant of a bait - and - tackle shop for the purpose of selling bait and selling and renting fishing tackle and related or auxiliary equipment; and (b) Operation by Tenant of sport fishing boats, barge fishing, sport fishing charter boats, harbor cruise rides, excursion boats, barge tender boats and recreational boat cruise activities from the Pier ( "Boat Operations ") (excluding operation by Tenant of boats for the purpose of transporting workers or employees to off -shore hydrocarbon drilling or production islands and facilities or for any other business purpose except as set forth herein). The operation of the bait - and - tackle shop and Boat Operations may include as auxiliary uses the sale of coffee, candy, rolls, soft drinks, fruit and similar snack items to customers of the primary operations. Tenant shall not use or permit the use of the Premises in any manner which (i) creates a nuisance, (ii) violates any Law, or (iii) is determined by City in its sole discretion to be an objectionable or inappropriate use of public property. 5.02 Continuous Operation. Weather permitting, Tenant shall keep the Premises in operation and open to the public for business each calendar day of the year, excluding Thanksgiving, Christmas and New Year's days. Such operations shall include at a minimum: (i) maintaining, operating and keeping the bait - and - tackle shop open to the public at least six hours per day; and (ii) providing, maintaining and operat- ing at least one half -day sport fishing boat, accommodating at least 60 passengers. In addition, during the period from June 15 through September 15 of each year, such operations shall also include at a minimum providing, maintaining and operating (i) one fishing barge with a minimum rated capacity of 140 passengers, complete with a galley serving hot food; (ii) one barge tender vessel with a minimum rated capacity of 40 passengers; and (iii) one sport fishing boat with a minimum rated capacity of 60 passengers, complete with a galley serving hot food. However, the arrangement of business days and hours of operation may be altered to provide the greatest revenue for City and Tenant, provided that Tenant makes written application for such change to City Manager, supported by evidence substantiating its request for a change in business days and hours. -10- 861006 jIw 0272AER 7 • 5.03 Notice of Business Operations. Tenant shall notify the City in writing of its operational plans for the Boat Operations and of any change in scheduling and /or operation at least thirty (30) days prior to the effective date of the change. 6. Maintenance. 6.01 City's Maintenance. (a) Obligations. Except as provided in §6.02, City shall maintain and repair, at its sole cost and expense, the Pier, Boat Landing Number One, Boat Landing Number Two and the basic structure of the Premises, including, but not limited to the walls, foundation, roof, plumbing, electrical system, exterior paint, window glass, and floor coverings other than those installed by the Tenant; provided, however, that if such Maintenance is necessitated in whole or in part by Tenant, its authorized representatives, customers or invitees, or any Damage is caused by breaking and entering or any attempt thereof, then Tenant shall pay City the reasonable cost of such Maintenance. City shall not be liable for any failure to make any such repairs or to perform any Maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such Maintenance is given to City by Tenant. Except as provided specifically herein, there shall be no allowance to Tenant for a diminution of rental value, and no liability on the part of City by reason of inconvenience, annoyance or injury to business arising from the performance of any Maintenance in or to any portion of the Pier, Boat Landing Number One, Boat Landing Number Two or the Premises. City shall not be responsible for any loss suffered by Tenant as a result of malfunctioning of any equipment or facility provided by City; however, Minimum Monthly Rent shall be abated pro rata for each day that both Boat Landing Number One and Boat Landing Number Two are unusable as a result of the failure of City of perform its maintenance obligations hereunder, provided that Tenant gives City notice of such unusability within twenty -four (24) hours after discovery thereof. (b) Entry by City. City and its Authorized Representatives shall have the right to enter the Premises at all times, to examine the same and to make such repairs as City may deem necessary or desirable; prior to any entry pursuant to this sentence, City shall give written or oral notice of anticipated entry as far in advance as is reasonable under the circumstances, provided that in no event shall more than twenty -four (24) hours' prior notice be necessary. City shall be allowed to take all material into and upon the Premises that may be required therefor and may for that purpose erect -11- 860926 jlw 0272AER(5) • scaffolding and other necessary structures where reasonably required by the character of the work to be performed, provided that the business of Tenant shall be interfered with as little as is reasonably practicable, all without the same constituting an eviction of Tenant in whole or in part, and the rent reserved shall in no wise abate while said repairs are being made, by reason of loss or interruption of the business of Tenant because of the prosecution of any such work, or otherwise. City and its Authorized Representatives are expressly granted permission to inspect the Premises at any reasonable time. If Tenant shall not be'personally present to open and permit an entry into the Premises, at any time, when for any reason an entry therein shall be necessary or permissible hereunder, City or its Authorized Representatives may enter the same by a master key, or may forcibly enter the same, without rendering City or such Authorized Representatives liable therefor (if during such entry City or its Authorized Representatives shall accord reasonable care to Tenant's prop- erty), and without in any manner affecting the Provisions of this Lease. Any entry to the Premises obtained by City by any of said means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant from the Premises or any portion thereof. 6.02 Tenant's Maintenance. Except as provided in 0.01, Tenant shall maintain at its sole cost and expense the Premises and Boat Landing Number One and all equipment and facilities requiring Maintenance necessitated by breakage, misuse, or malfunction. In addition, Tenant shall be respon- sible for painting and maintaining the interior of the Premises. Routine servicing and Maintenance of all machinery and equipment used by Tenant in the business oper- ations permitted hereunder shall be the responsibility of Tenant. It shall be understood and agreed that any emergency repair, adjustment, service, or replacement that may become necessary shall be the responsibility of Tenant and that City shall not be responsible for any loss suffered by Tenant as a result of malfunctioning of any equipment or facility provided by City. All furnishings, equipment, facilities, improve- ments, alterations, attachments and appurtenances not provided by City, but required for the proposed business operation, shall be furnished and installed by the Tenant at its sole cost and expense, and shall be approved by City Manager prior to -12- 860926 JIw 0272AER(5) • • installation. Such furnishings, equipment, and facilities shall be maintained in a satisfactory condition throughout the Term of this Lease. Tenant shall provide all necessary janitorial, custodial, and related maintenance services in and upon all the Premises. Tenant shall restore the Premises to their original condition, normal wear and tear excepted, within thirty (30) days after Expiration or Termination of this Lease. 7. No Alterations. Tenant shall not make any Alter- ations to the Premises without prior written consent of the City Manager, which consent shall not be unreasonably withheld. Any Alterations made shall remain on and be surrendered with the Premises on Expiration or Termination of the Term, except that City can elect within thirty (30) days after Expiration or Termination of the Term, to require Tenant to remove any Alterations that Tenant has made to the Premises. If City so elects, Tenant at its cost shall restore the Premises to the condition designated by City in its elec- tion, before the last day of the term, or within thirty (30) days after notice of election is given, whichever is later. If Tenant makes any Alterations to the Premises as provided herein, the Alterations shall not be commenced until fifteen (15) days after City has received notice from Tenant stating the date construction of the alterations to commence so that City can post an appropriate notice of non - responsibility. 8. Utilities and Services. Except as otherwise provided herein, Tenant shall make all arrangements for and pay for all utilities and services furnished to or used by it, including, without limitation, gas, electricity, water, telephone service and janitorial service, and for all connection charges. City shall provide trash collection services as reasonably required for the Premises. Subject to the right of City of establish and amend from time to time generally applicable rules and regulations, including without limitation • the fare charged for use thereof, the City shall operate (or cause to be operated) tram service on the Pier at a level of service (which level of service is acknowledged to vary by season) substantially equivalent to the level of service being provided during 1986. -13- 860929 bm 0272AER 6 ., y • • 9. Indemnity and Exculpation; Insurance. 9.01. Exculpation of City. City shall not be liable to Tenant for any damage to Tenant or Tenant's property from any cause other than the negligence or intentional or willful acts of City or its Authorized Representatives. Tenant waives all claims against City for damage to Person or property arising for any reason other than the negligence or intentional or willful acts of City or its Authorized Representatives. 9.02. Indemnity. Tenant shall hold City harm- less from all Damages arising out of any Damage to any Authorized Representative, customer or invitee of Tenant, or to any property of Tenant or its Authorized Representatives, customers or invitees, occurring, in, on, or about the Premises from any cause other than the negligence or intentional or willful acts of City or its Authorized Representatives. Tenant's obligation under this section to indemnify and hold City harmless shall be limited to the sum that exceeds the amount of insurance proceeds, if any, received by City. 9.03. Public Liability and Property Damage Insurance. Tenant at its cost shall maintain public liability and property damage insurance with liability limits of not less than $1,000,000.00 per person and $2,000,000.00 per occurrence, and property damage limits of not less than $100,000.00 per occurrence, insuring against all liability of Tenant and its Authorized Representatives arising out of and in connection with Tenant's use or occupancy of the Premises, Boat Landing Number One, Boat Landing Number Two and all other portions of the Pier, including without limitation Tenant's Boat Oper- ations. All public liability insurance and property damage insurance shall insure performance by Tenant of the indemnity provisions of §9.02. Both parties and the State of California shall be named as additional insureds, and the policy shall contain cross - liability endorsements. 9.04. Increase in Amount of Public Liability and Property Damage Insurance. Not more frequently than each year, if, in the opinion of the insurance broker retained by City, the amount of public liability and property damage insurance coverage at that time is not adequate, Tenant shall increase the insurance coverage as reasonably required by City's insurance broker. 9.05. Fire Insurance on Building and Other Improvements. Tenant at its cost shall maintain on the building and other improvements that are a part of the Premises -14- 860926 jIw 0272AER(5) III a policy of standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements, to the extent of at least full replacement value. The insurance policy shall be issued in the names of Landlord and Tenant, as their interests appear. The insurance policy shall provide that any proceeds shall be made payable to Landlord. 9.06. Determination of Replacement Value. The "full replacement value" of the building and other improvements to be insured under § 9.05 shall be determined by the company issuing the insurance policy at the time the policy is initially obtained. Not more frequently than once each year, either Party shall have the right to notify the other Party that it elects to have the replacement value redetermined by an insurance company. The redetermination shall be made promptly and in accordance with the rules and practices of the Board of Fire Underwriters, or a like board recognized and generally accepted by the insurance company, and each Party shall be promptly notified of the results by the company. The insurance policy shall be adjusted according to the redetermination. 9.07. Intentionally Omitted 9.08. Waiver of Subrogation. The Parties release each other, and their respective Authorized Representa- tives, from any claims for Damage to any Person or to the Premises and to the fixtures, personal property, and Alter- ations of either in or on the Premises that are caused by or result from risks insured against under any insurance policies carried by the Parties and in force at the time of any such Damage. Each Party shall cause each insurance policy obtained by it to provide that the insurance company waives all rights of recovery by way of subrogation against either Party in connection with any Damage covered by any policy. Neither Party shall be liable to the other for any Damage caused by fire or any of the risks insured against under any insurance policy required by this Lease. If any insurance policy cannot be obtained with a waiver of subrogation, or is obtainable only by the payment of an additional premium charge above that charged by insurance companies issuing policies without waiver of subrogation, the Party undertaking to obtain the insurance shall notify the other Party of this fact. The other Party shall have a period of 20 days after receiving the notice either to place the insurance with a company that is reasonably satisfactory to the other Party and that will carry the insur- ance with a waiver of subrogation, or to agree to pay the addi- -15- 861006 jIw 0272AER 7 III tional premium if such a policy is obtainable at additional cost. If the insurance cannot be obtained or the Party in whose favor a waiver of subrogation is desired refuses to pay the additional premium charged, the other Party is relieved of the obligation to obtain a waiver of subrogation rights with respect to the particular insurance involved. 9.09. Other Insurance Matters. All the insur- ance required under this Lease shall: (1) Be issued by insurance companies authorized to do business in the State of California, accept- able to City; (2) Be issued as a primary policy. (3) Be noncontributing with any insurance that may be carried by City; (4) Contain an endorsement requiring 30 days' written notice from the insurance company to both Parties before cancellation or change in the coverage, scope, or amount of the policy. Each policy, or a certificate of the policy, together with evidence of payment of premiums, shall be depo- sited with City at the commencement of the Term, and on renewal of the policy not less than 30 days before expiration of the term of the policy. At the election of City upon the Expir- ation of the Term, City shall reimburse Tenant pro rata for all prepaid premiums on insurance required to be maintained by Tenant, and Tenant shall assign all Tenant's right, title, and interest in that insurance to City; in the event of earlier Termination of this Lease City shall, at its election, have the right to require Tenant to make such assignment to City upon City's pro rata reimbursement to Tenant for prepaid premiums. The provisions of the preceding sentence shall be applicable only to the extent that Tenant's insurance carrier permits assignment to be made to City. Tenant shall use its best efforts to secure the prior consent of the carriers to such assignment whenever Tenant obtains, renews or replaces any of • the insurance required by this §9. Either Party may effect for its own account any insurance not required under this Lease. -16- 861006 j1w 0272AER 7 . • • 10. Prohibition Against Voluntary Assignment, • Subletting, and Encumbering. The Parties acknowledge that City is entering into this Lease in reliance upon the experience and abilities of Tenant and its principals. Consequently, Tenant shall not voluntarily assign or encumber its interest in this Lease or in the Premises, or sublease substantially all or any part of the Premises, or allow any other person or entity (except Tenant's Authorized Representatives) to occupy or use all or any part of the Premises. Any assignment, encumbrance, or sublease shall be voidable and, at City's election, shall constitute a default. No consent to any proposed assignment, encumbrance, or sublease shall constitute a further waiver of the provisions of this section. Any dissolution, merger, consolidation, or other reorganization of Tenant, or the sale or other transfer of a controlling percentage of the capital stock of Tenant shall be deemed a voluntary assignment. The phase "controlling percentage" means the ownership of, or the right to vote, stock possessing at least 50% of the total combined voting power of all classes of Tenant's capital stock issued, outstanding, and entitled to vote for the election of directors. 11. Default. 11.01. Default by Tenant. The following constitute events of default by Tenant under this Lease: (1) The vacating or abandonment of the premises by Tenant. (2) The failure by Tenant to make any pay- ment of rent or any other payment required to be made by Tenant hereunder, if not cured within seven (7) days after notice of such failure. (3) The failure by Tenant to observe or perform any of the covenants, conditions or provisions of this Lease Agreement to be observed or performed by Tenant, if not cured within thirty (30) days after notice of such failure; provided, however, that if the nature of such failure is such that more than thirty (30) days are required for performance, then Tenant shall not be in default if Tenant commences performance within the thirty -day period and thereafter diligently prosecutes the cure to completion. -17- 861006 jIw 0272AER 7 • • (4) The making of any general assignment or general arrangement for the benefit of creditors; or the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt, or a petition or reorganization or arrangement under any'law relating to bankruptcy (unless, in the case of a peti- tion filed against Tenant, the same is dismissed within sixty (60) days); or the appointment of a trustee or a receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days; or the attachment, execution, or other judicial seizure of substantially all of Tenant's assets located at the premises or of Tenant's interest in this Lease, where such seizure is not discharged in thirty (30) days. 11.02 Remedies. (a) Cumulative Nature of Remedies. If any default by Tenant shall continue uncured, following notice of default as required by this Lease, for the period, if any, applicable to the default under the applicable provision of this Lease, City shall have the remedies described in this §11.02 in addition to all other rights and remedies provided by law or equity, to which City may resort cumulatively or in the alternative. (b) Reentry without Termination. City may at City's election reenter the Premises, and, without terminat- ing this Lease, at any time and from time to time relet the Premises or any part or parts of them for the account and in the name of Tenant or otherwise. City may at City's election eject all Persons or eject some and not others or eject none. City shall apply all rents from reletting as follows: first, to the payment of reasonable expenses (including attorneys' fees or brokers' commissions or both) paid or incurred by or on behalf of City in recovering possession, placing the Premises in good condition, and preparing or altering the Premises for reletting; second, to the reasonable expense of securing new subtenants; third, to the fulfillment of Tenant's covenants to the end of the Term; Any reletting may be for the remainder of the Term or for a longer or shorter period. City may execute any leases made under this provision either in City's name or in Tenant's name and shall be entitled to all rents from the use, operation, or occupancy of the Premises. Tenant shall nevertheless pay to City on the dates specified in this Lease the equivalent of all sums required of Tenant under this Lease, plus City's expenses, less the proceeds of any reletting or attornment. No act by or on behalf of City under this provision shall constitute a Termination of this Lease unless City gives Tenant specific notice of Termination. -18- 861006 jIw 0272AER 7 . ` • (c) Termination. City may at City's elec- tion terminate this Lease by giving Tenant notice of Termin- ation. In the event City terminates this Lease, City may recover possession of the Premises (which Tenant shall surrender and vacate upon demand) and remove all Persons and property therefrom, and City shall be entitled to recover as damages all of the following: (1) The worth at the time of the award of any unpaid Rent or other charges which have been earned at the time of Termination; (2) The worth at the time of the award of the amount by which the unpaid Rent and other charges which would have been earned after Termination until the time of the award exceeds the amount of the loss of such rental or other charges that Tenant proves could have been reasonably avoided; (3) The worth at the time of the award of the amount by which the unpaid Rent and other charges for the balance of the Term after the time of the award exceeds the amount of the loss of such rental and other charges that Tenant proves could have been reasonably avoided; (4) Any other amount necessary to compensate City for the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom; and (5) At City's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law. As used in § §11.02(c)(1) and (2), above, the "worth at the time of the award" shall be computed by allowing interest at the rate of ten percent (10 %) per annum. As used in §11.02(c)(3) above, the "worth at the time of the award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1 %). The amount recoverable by City pursuant to §11.02(c)(4) above shall include, but is not limited to, any costs or expenses incurred by City in maintaining or preserving the Premises after such default, preparing the Premises for reletting to a new tenant, accomplishing any repairs or alterations to the Premises for the purpose of such reletting, rectifying any damage thereto occasioned by the act or omission of Tenant or any other costs necessary or appropriate to relet the Premises. -19- 861006 j 0272AER 7 • • (d) Use of Tenant's Personal Property. City may at City's election use Tenant's personal property and trade fixtures located on, about or appurtenant to the Premises or any of such property and fixtures without compensation and without liability for use or damage, or store them for the account and at the cost of Tenant. The election of one remedy for any one item shall not foreclose an election of any other remedy for another item or for the same item at a later time. (e) City's Right to Cure Tenant's Default. At any time after Tenant fails to perform any covenant or Provision .of this Lease, City may, but is not obli- gated to, cure such failure at Tenant's cost. If City at any time, by reason of such failure by Tenant, pays any sum or does any act, the sum paid by City plus the reasonable cost of performing such act shall be due as additional Rent immediately at the time the sum is paid or the act performed. No such pay- ment or act shall constitute a waiver of default or of any remedy for default or render City liable for any loss or damage resulting from any such act. (f) Waiver of Rights. Tenant hereby waives any right of redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or under any other present or future law, in the event Tenant is evicted or City takes possession of the premises by reason of any default by Tenant hereunder. 11.03 Default by City. City shall not be in default unless City fails to perform obligations required of City within a reasonable time, but in no event later than thirty (30) days after written notice by Tenant to City specifying wherein City has failed to perform such obligation; provided, however, that if the nature of City's obligation is such that more than thirty (30) days are required for performance, then City shall not be in default if City commences performance within such thirty (30) days period and thereafter diligently prosecutes the same to completion. In no event shall Tenant have the right to terminate this Lease as a result of City's default and Tenant's remedies shall be limited to Damages and /or an injunction. 12. Damage to Pier. If the Pier, or any part thereof, including without limitation the Premises, is destroyed by fire or otherwise damaged so as to be untenantable, and the damage cannot be repaired within sixty (60) days after the date of the casualty, this Lease may, at the option of either City or Tenant, be -20- • 861006 jIw 0272AER 7 ' III • . • immediately terminated on written notice. If Damage or destruction to the Pier makes operation of or from the Pier hazardous or unsafe for temporary periods, operations by Tenant may be discontinued until such temporary Damage is repaired, in which case rental payments shall be prorated and adjusted accordingly. 13. Intentionally Omitted 14. Signs. Tenant shall obtain the approval of the City Manager, in writing, before any lettering or signs are installed by Tenant on or about the Premises. If the City Manager fails to respond within ten (10) days after receipt of Tenant's request for approval, the City Manager shall be deemed to have approved the proposed lettering or sign. 15. Subject to Tidelands Lease and Operating Agree- ment. This Lease is subject and subordinate to the provi- sions of the Tidelands Lease and the Operating Agreement. Tenant shall not take any action which would cause City to be in violation of any Provisions of the Tidelands Lease or the Operating Agreement. If the either the Tidelands Lease or the Operating Agreement terminates and this Lease terminates as a result of such termination, the Parties shall be released from all liabilities and obligations under this Lease. 16. Notices. Any notice, demand, request, consent, approval or communication that either Party desires or is required to give to the other Party shall be in writing and shall be deemed given as of the time of hand delivery to the addresses set forth below, or three (3) days after deposit into the United States mail, postage prepaid, by registered or certified mail, return receipt requested. Unless notice of a different address has been given in accordance with this section, all such notices shall be addressed as follows: If to City, to: CITY OF SEAL BEACH 211 Eighth Street Seal Beach, California 90740 Attention: City Manager -21- 861006 jIw 0272AER 7 1 ti i! _ • • With a copy to: RICHARDS, WATSON & GERSHON • 333 South Hope Street - 38th Floor Los Angeles, California 90071 Attention: Gregory W. Stepanicich If to Tenant, to: SEAL BEACH PLEASURE FISHING, INC. P. O. Box 26 Seal Beach, California 90740 With a copy to: RISLEY & WHITE A Professional Corporation 800 West Sixth Street, Suite 1650 Los Angeles, California 90017 17. Attorneys' Fees. If either Party becomes a party to any litigation concerning this Lease or the Premises, by reason of any act or omission of the other Party or its Authorized Representatives, and not by any act or omission of the Party that becomes a party to that litigation or any act or omission of its Autho- rized Representatives, the Party that causes the other Party to become involved in the litigation shall be liable to that Party for actual attorney's fees and court costs incurred by it in the litigation. If either Party commences an action against the other Party arising out of or in connection with this Lease, the prevailing Party shall be entitled to have and recover from the losing Party reasonable attorneys' fees and costs of suit. 18. Surrender of Premises; Holding Over. 18.01. Duty to Surrender. At the Expiration or earlier Termination of, the Term, Tenant shall surrender to City the possession of the Premises. Surrender or removal of Alterations, fixtures and trade fixtures shall be as directed in the provisions of this Lease on ownership of Alterations, fixtures and trade fixtures at Expiration or Termination. Tenant shall leave the surrendered property and any property in good and broom -clean condition. All property that Tenant is not required to surrender but that Tenant does abandon shall, at City's election, become City's property at Expiration or Termination. 18.02. Holding Over. If Tenant, with City's consent, remains in possession of the Premises after Expiration or Termination of the Term, or after the date in any notice given by City to Tenant terminating this Lease, such possession by Tenant shall be deemed to be a month -to -month tenancy -22- 861006 jIw 0272AER 7 , t • • 4 terminable on 30 days' notice given at any time by either Party. All Provisions of this Lease shall apply to the month - to -month tenancy except those provisions pertaining to the Term. _ 19. Miscellaneous. 19.01. Governing Law. This Lease shall be construed and interpreted in accordance with the laws of the State of California. 19.02. Waiver. The waiver by City or Tenant of any breach by the other Party of any term, covenant, or condi- tion herein contained shall not be deemed to be a waiver of such term, covenant, or condition or any subsequent breach of the same or any other term, covenant, or condition herein contained. The subsequent acceptance of Rent hereunder by City shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant, or condition of this Lease, other than the failure to pay the particular rents so accepted, regardless of City's knowledge of such preceding breach at the time of acceptance of such Rent. 19.03. Time of Essence. Time is of the essence with respect to the performance of every Provision of this Lease in which time of performance is a factor. 19.04. Brokers. Each Party warrants to and for the benefit of the other that it has had no dealings with any real estate broker or other agent (attorneys excepted) in connection with the negotiation or making of this Lease. 19.05. Table of Contents; Headings. The table of contents of this Lease and the captions of the various sections of this Lease are for convenience and ease of refer- ence only and do not define, limit, augment, or describe the scope, content, or intent of this Lease or of any part or parts of this Lease. 19.06. Gender; Number. The neuter gender includes the feminine and masculine, the masculine includes the feminine and neuter, and the feminine includes the neuter, and each includes corporation, partnership, or other legal entity whenever the context so requires. The singular number includes the plural whenever the context so requires. 19.07. Exhibits. All exhibits to which reference is made in this Lease are hereby incorporated by reference. Any reference to "this Lease" includes matters incorporated by reference. -23- 861006 jIw 0272AER 7 4u • • • 19.08. Entire Agreement; Modification. This Lease contains the entire agreement between the Parties. No verbal agreement or implied covenant shall be held to vary the provisions hereof, any statements, law or custom to the contrary notwithstanding. No promise, representation, warranty, or covenant not included in this Lease has been or is relied on by either party. Each party has relied on its own inspection of the Premises and examination of this Lease, the counsel of its own advisors, and the warranties, representa- tions, and covenants in this Lease itself. The failure or refusal of either party to inspect the Premises, to read this Lease or other documents, or to obtain legal or other advice relevant to this transaction constitutes a waiver of any objec- tion, contention, or claim that might have been based on such reading, inspection, or advice. No provision of this Lease may be amended or varied except by an agreement in writing signed by the parties hereto and the Lender under the first leasehold Encumbrance or their respective Successors. 19.09. Joint and Several Obligations. "Party" shall mean City or Tenant; and if more than one Person is City or Tenant, the obligations imposed on that Party shall be joint and several. 19.10. Severability. The invalidity or illegality of any Provision shall not affect the remainder of this Lease and all remaining Provisions shall, notwithstanding any such invalidity or illegality, continue in full force and effect. 19.11. Successors. Subject to the Provisions of this Lease on assignment and subletting, each and all of the covenants and conditions of this Lease shall be binding on and shall inure to the benefit of the heirs, Successors, executors, -24- 861006 jIw 0272AER 7 OS 1 • 1' ' ■ F administrators, assigns, and personal representatives of the respective parties. IN WITNESS WHEREOF, the undersigned have executed this lease at Seal Beach, California, as of the date first written above. CITY OF SEAL BEACH ( "City ") . IK ,e' / . 4.,- -Mayor ATTEST: I • I Citr Cle k SEAL BEACH PLEASURE FISHING, INC., a California corporation ( "Tenant ") By: ` , ° �, - I ' - 71--14-44-41 President By: Secretary -25- 861006 jIw 0272AER 7 , . " - 0 i 1 —1 1 i lj 11 LJ W �J § Q ‘\ 1 g rd. ti it I i i e e i I t i cc I L tc _1 za N 1 1 1 ►�4,i , $ ui k..H.1 u '{ s HO W'1►I cross IIArcMED CXNi$1T ,4 • • EXHIBIT B TRADE FIXTURES AND PERSONAL PROPERTY NONE.