HomeMy WebLinkAboutTHRIVE SANTA ANA, INC. (2)Return ORIGINAL
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City of Santa Ana
20 Civic Center Plaza (M-�Q)
cm P.O. Box 1988
Attention: City Clerk
Exempt from Filing Fees Gov. Code Sections 27383, 6103 I
DISPOSITION AND DEVELOPMENT AGREEMENT
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by and between the
City of Santa Ana,
a California charter city in the County of Orange of the State of California,
and
THRIVE Santa Ana, Inc.,
a California public benefit corporation.
[Dated as of March 3, 2020, for reference purposes only]
CITY OF SANTA ANA
DISPOSITION AND DEVELOPMENT AGREEMENT
Community Micro -Farm Project at
1901 West Walnut Street, Santa Ana
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement") is dated
as of March 3, 2020, for reference purposes only, and is entered into by and between the CITY
OF SANTA ANA, a California charter city in the County of Orange of the State of California
("City"), and`'THRIVE Santa Ana, Inc., a.501(c)(3) tax exempt California public benefit
corporation ("Developer")(collectively, the "Parties," and each a "Party"). The Parties enter
into this Agreement with reference to the following recited facts (collectively, the "Recitals,"
and each a "Recital"):
RECITALS
A. The City owns that certain real property generally located at 1901 West Walnut
Street, Santa Ana, California 92703 (APN 007-332-08), and as more particularly described in
the Legal Description attached to this Agreement as Exhibit "A" and incorporated herein by
reference ("Property").
B. The Developer proposes to develop a community micro -farm on the Property.
The term "micro -farm" refers to a small space primarily used to cultivate crops in an urban or
suburban setting. Additionally, micro -farms are used to teach gardening and farming skills to
community members. Developer will use a comprehensive assessment of community needs to
determine the specific use of the Property, as particularly described in the Project Description
attached to this Agreement as Exhibit `B" and incorporated herein by reference ("Project").
C. On May 1, 2018, the Parties entered into an Exclusive Negotiation Agreement
(No. A-2018-117) to negotiate the potential future development of the Property. Developer
successfully completed a majority of Agreement milestones.
D. On September 17, 2019, the Parties entered into a Second Exclusive Negotiation
Agreement (No. N-2019-206) to complete the final two milestones related to project financing
and finalizing City staff approvals. The term of the Second Exclusive Negotiation Agreement
will expire on the earlier of the execution of this Agreement or March 15, 2020.
E. The proposed Project will result in the redevelopment of underutilized land,
development of a community micro -farm for the benefit of local residents, and increased
employment opportunities within the City produced by the Project.
F. Based on the reasons identified in Recital E, above, together with the
commitments and obligations of the Developer to develop the Property as contained in this
Agreement, the City has determined that the lease of the Property to the Developer for
development of the Project in accordance with this Agreement is in the best interest of the City.
1
G. The City desires to lease the Property, and the Developer desires to enter into a
lease of the Property for the purpose of development of the Project on the Property on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH THE PARTIES ACKNOWLEDGE, AND
PURSUANT TO THE PROMISES AND COVENANTS SET FORTH IN THIS
AGREEMENT, THE PARTIES AGREE, AS FOLLOWS:
ARTICLE 1
PURPOSE, PARTIES, PROPERTY, AND USE
1.1 Recitals. The Recitals are hereby incorporated into this Agreement.
1.2 Purpose. The purpose of this Agreement is to set forth the obligations of the
Parties and the terms and conditions precedent for the lease of the City Property from the City
to the Developer, and the design, development, construction and operation of the Project on the
Property.
The City has determined that the construction and operation of the Project by Developer
within the City will stimulate direct and indirect economic activity within the City, will enhance
the quality of life of residents and will provide substantial additional intangible benefits to the
City. As such, the development of the Property pursuant to this Agreement and the fulfillment
generally of this Agreement are in the vital and best interests of the City, and the health, safety,
morals and welfare of its residents and in accord with the public purposes and provisions of
applicable federal, state and local laws and requirements.
1.3 Parties.
1.3.1 The Ci . The City is the City of Santa Ana, a California charter city.
The principal office of the City is located at 20 Civic Center Plaza, Santa Ana, California 92702.
1.3.2 The Developer. The Developer is THRIVE Santa Ana, Inc., a 501(c)(3)
tax exempt California public benefit corporation. The principal address of the Developer is
located at P.O. Box 1935, Santa Ana, CA 92702. Whenever the term "Developer" is used
herein, such term shall include any permitted nominee, assignee or successor in interest as
herein provided.
(a) The qualifications and identity of the Developer are of
particular concern to the City, and it is because of such qualifications and identity that the City
has entered into this Agreement with the Developer. Except as otherwise provided in this
Section 1.3.2, no voluntary or involuntary successor in interest of the Developer shall acquire
any rights or powers under this Agreement, and the Developer shall not assign all or any part
of this Agreement without the prior written approval of the City, which approval will be in the
City's sole discretion exercised in good faith. This Agreement may be terminated by the City
if there is any significant change (voluntary or involuntary) in the management or control of the
Developer without City's prior written approval, which approval will not be unreasonably
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withheld. Except as otherwise provided in this Agreement, for an approved assignment to be
effective, the Developer and assignee shall enter into an assignment and assumption agreement
in a form reasonably approved by the City.
(b) Notwithstanding the foregoing, the following assignments or
transfers of this Agreement and the Property shall be permitted:
(i) the sub -lease of micro -farm or commercial space to
tenants or end -users, for occupancy upon completion; or,
(ii) an assignment as security for a construction and/or
development loan from a lender, subject to the approval by City pursuant to this Agreement,
which approval shall not be unreasonably withheld, conditioned, or delayed.
1.4 Property. The Property is that certain real property generally located at 1901
West Walnut Street, Santa Ana, California 92703 (APN 007-332-08), as more particularly
described in the Legal Description attached to this Agreement as Exhibit "A".
1.5. Use. Developer intends to use the Property pursuant to the Project Description
attached to this Agreement as Exhibit `B". During the pre -development and construction
timeframe, the use of the Property shall include special events planned by Developer, only upon
prior approval by the City. After the completion of construction, the certificate of occupancy
issued by the City shall govern the allowable uses on the Property, which shall include micro -
farm and ancillary secondary uses. Any request by Developer to change the Project or use of
the Property shall be subject to all applicable City review procedures and Approvals.
ARTICLE 2
DEFINITIONS
2.1 Defined Terms. In addition to the usage of certain words, terns or phrases that
are defined in the initial paragraph, the Recitals or in the body of this Agreement, the following
words, terms and phrases are used in this Agreement, as follows, unless the particular context
of usage of a word, term or phrase requires another interpretation:
2.1.1 "Approvals" means any and all licenses, permits, approvals, consents,
certificates (including certificate(s) of occupancy), rulings, variances, authorizations, or
amendments to any of the foregoing, as shall be necessary or appropriate under any Law to
commence, perform, or complete any construction, demolition, installation, use, maintenance,
repair, occupancy or operation of the Project.
2.1.2 "Automobile Liability Insurance" means insurance coverage against
claims of personal injury (including bodily injury and death) and property damage covering all
owned, leased, hired and non -owned vehicles used by the Developer regarding the Project, with
minimum limits for bodily injury and property damage of ONE MILLION DOLLARS
($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such
insurance shall be provided by a business or commercial vehicle policy.
2.1.3 `Bankruptcy Law" means Title 11, United States Code, and any other
or successor State or Federal statute relating to assignment for the benefit of creditors,
appointment of a receiver or trustee, bankruptcy, composition, insolvency, moratorium,
reorganization, or similar matters.
2.1.4 "Bankruptcy Proceedine'means any proceeding, whether voluntary or
involuntary, under any Bankruptcy Law.
2.1.5 `Builder's Risk Insurance" means "All Risk" builder's risk insurance on
a completed value (non -reporting) basis, in an amount sufficient to prevent coinsurance, but in
any event not less than 100% of replacement value, including cost of debris removal, but
excluding foundation and excavations, naming the City and the Developer, as their interests
may appear. Such insurance shall also: (a) contain a waiver of subrogation against
subcontractors; (b) state that "permission is granted to complete and occupy'; (c) cover, for
replacement value, all materials and equipment on or about any offsite storage location intended
for use for the Project; and (d) provide for a deductible not exceeding Ten Thousand Dollars
($10,000).
2.1.6 "CEOA" means the California Environmental Quality Act, Public
Resources Code Sections 21000, et seq.
2.1.7 "CEOA Document" means any Negative Declaration (mitigated or
otherwise) or any Environmental Impact Report (including any addendum, amendment,
subsequent or supplemental document) required by any Government to issue any discretionary
Approval required for the Project.
2.1.8 "City Manager" means the City Manager of the City or his or her
designee or successor in function.
2.1.9 "City Parties" means, collectively, the City, its governing body, elected
officials, employees, agents and attorneys.
2.1.10 "City Party" means, individually, the City, its governing body, elected
officials, employees, agents or attorneys.
2.1.11 "Claims" means any and all claims, losses, costs, damages, expenses,
liabilities, liens, actions, causes of action (whether in tort, contract or under statute, at law, in
equity or otherwise), charges, awards, assessments, fines or penalties of any kind (including
consultant and expert fees and expenses, Legal Costs of counsel retained by the City Parties,
expert fees, costs of staff time and investigation costs of whatever kind or nature), and
judgments, including, but not limited to, claims for: (i) injury to any Person (including death
at any time resulting from that injury); (ii) loss of, injury or damage to, or destruction of property
(including all loss of use resulting from that loss, injury, damage, or destruction) regardless of
where located, including the property of the City Parties; (iii) any workers' compensation claim
or determination; (iv) any Prevailing Wage Action; or (v) any Environmental Claim.
2.1.12 "Contractor's Insurance" means Contractor's comprehensive general
and automobile liability insurance for not less than One Million Dollars ($1,000,000) for
personal injury and One Million Dollars ($1,000,000) for broad form property damage,
including premises -operations liability, contractor's protective liability for all subcontractors'
operations, completed operations, contractual liability (referring to the indemnity provisions of
the applicable construction contract(s)), and automobile liability (owned and non -owned), and
for any foundation, excavation, or demolition work, an endorsement that such operations are
covered and that the "XCU Exclusions" have been deleted, which insurance may be in the form
of a single limit policy or policies.
2.1.13 "Control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether by ownership of
Equity Interests, by contract or otherwise.
2.1.14 "Controlling" and "Controlled" mean exercising or having Control.
2.1.15 "County' means the County of Orange, California.
2.1.16 "CPI" means the United States Department of Labor, Bureau of Labor
Statistics "Consumer Price Index" for Urban Wage Earners and Clerical Workers (CPI-W)
published for the Anaheim -Santa Ana -Irvine Metropolitan Statistical Area, with a base of 1982-
1984 = 100. If the CPI ceases to be published, with no successor index, then the Parties shall
reasonably agree upon a reasonable substitute index. The CPI for any date means the CPI last
published before the calendar month that includes such date.
2.1.17 "CPI Adiustment Factor" means, as of any date, the greater of (a) 1.00
or (b) the CPI for such date divided by the CPI for the Commencement Date.
2.1.18 "Default" means any Monetary Default or Non -Monetary Default.
2.1.19 "Developer Official Action" means the official action of the Developer
authorizing the Developer's entry into and performance of this Agreement, in substantially the
form attached to this Agreement as Exhibit "D", executed by the authorized representative(s)
of the Developer.
2.1.20 "Developer Parties" means, collectively, the directors, officers,
employees and agents of the Developer.
2.1.21 "Developer Party" means, individually, the directors, officers,
employees or agents of the Developer.
2.1.22 "Due Diligence Completion Notice" means a written Notice of the
Developer delivered to the City, prior to the end of the Due Diligence Period, indicating the
Developer's unconditional acceptance of the condition of the Property or indicating the
Developer's rejection or conditional acceptance of the condition of the Property and refusal to
execute the Lease to the Property, describing in reasonable detail the actions that the Developer
reasonably believes are indicated to allow the Developer to unconditionally accept the condition
of the Property.
2.1.23 "Due Diligence Investigations" means the Developer's due diligence
investigations of the Property to determine the suitability of the Property for development or
operation of the Project, including, without limitation, investigations of the environmental and
geotechnical suitability of the Property, as deemed appropriate in the reasonable discretion of
the Developer, all at the sole cost and expense of the Developer.
2.1.24 "Due Diligence Period" means the one hundred and eighty (180)
calendar day period commencing on the day immediately following the Effective Date and
ending at 5:00 p.m. Pacific Time on the one hundred eightieth (180s') consecutive day
thereafter.
2.1.25 "Effective Date" means the first date on which all of the following have
occurred: (i) the City has received two (2) counterpart originals of this Agreement executed by
the authorized representative(s) of the Developer; (ii) the City has received a certified copy of
the Developer Official Action executed by the authorized representative(s) of the Developer;
(iii) this Agreement has been approved by the City governing body; (iv) this Agreement has
been executed by the authorized representative(s) of the City; (v) an original of this Agreement
executed by the authorized representative(s) of the City has been delivered by the City to the
Developer.
2.1.26 "Environmental Claims" means any and all claims, demands, damages,
losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits,
proceedings, costs, disbursements and expenses, including, without limitation, Legal Costs and
costs of environmental consultants and other experts, and all foreseeable and unforeseeable
damages or costs of any kind or of any nature whatsoever directly or indirectly relating to or
arising from any actual or alleged violation of any Environmental Law occurring during or
arising from the Developer's Due Diligence Investigations, the Developer's occupancy of the
Property, the Developer's construction, installation or operation of the Project or any other
actions of or attributable to the Developer regarding the Property.
2.1.27 `Environmental Law" means any Law regarding any of the following at,
in, under, above, or upon the Property: (a) air, environmental, ground water, or soil conditions;
or (b) clean-up, control, disposal, generation, storage, release, transportation, use of, or liability
or standards of conduct concerning, Hazardous Substances.
2.1.28 "Event of Default" means the occurrence of any one or more of the
following:
(a) Monetary Default. A Monetary Default that continues for seven
(7) days after Notice from the non -defaulting Party, specifying in reasonable detail the amount
of money not paid and the nature and calculation of each such payment.
(b) Prohibited Liens. Failure of the Developer to cause any
Prohibited Lien to be released within fifteen (15) days after Notice of such lien to the Developer.
(c) Bankruptcy or Insolvency. The Developer ceases to do business
as a going concern, ceases to pay its debts as they become due or admits in writing that it is
unable to pay its debts as they become due, or becomes subject to any Bankruptcy Proceeding
(except an involuntary Bankruptcy Proceeding dismissed within sixty (60) days after
commencement), or a custodian or trustee is appointed to take possession of, or an attachment,
execution or other judicial seizure is made with respect to, substantially all of the Developer's
assets or the Developer's interest in this Agreement (unless such appointment, attachment,
execution, or other seizure was involuntary and is contested with diligence and continuity and
vacated and discharged within sixty (60) days).
(d) Transfer. The occurrence of a Transfer, other than a Permitted
Transfer, whether voluntarily or involuntarily or by operation of Law, in violation of the terms
and conditions of this Agreement.
(e) Non -Monetary Default. Any Non -Monetary Default, other than
those specifically addressed in Sections 2.1.28(b) through 2.1.28(d), that is not cured within
thirty (30) days after Notice to the Developer describing the Non -Monetary Default in
reasonable detail, or, in the case of a Non -Monetary Default that cannot with reasonable due
diligence be cured within thirty (30) days after such Notice, if the Developer does not do all of
the following: (i) within thirty (30) days after the City's Notice, advise the City of the
Developer's intention to take all reasonable steps to cure such Non -Monetary Default; (ii) duly
commence such cure within such period, and then diligently prosecute such cure to completion;
and (iii) complete such cure within a reasonable time under the circumstances.
2.1.29 "Federal" means the government of the United States of America.
2.1.30 "Final" means, relative to an Approval or any CEQA Document, when
all administrative appeal periods regarding such matter have expired, all administrative appeals
or challenges regarding such matter (if any) have been resolved to both the City's and the
Developer's reasonable satisfaction, all statutory periods for challenging such matter have
expired, all litigation or other proceedings (if any) challenging any such matter have been
resolved to both the City's and the Developer's reasonable satisfaction and all appeal periods
relating to any such litigation or other proceedings have expired.
2.1.31 "Hazardous Substance" means flammable substances, explosives,
radioactive materials, asbestos, asbestos -containing materials, polychlorinated biphenyls,
chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous
wastes, medical wastes, toxic substances or related materials, explosives, petroleum, petroleum
products, and any "hazardous" or "toxic" material, substance or waste that is defined by those
or similar terms or is regulated as such under any Law, including any material, substance or
waste that is: (i) defined as a "hazardous substance" under Section 311 of the Water Pollution
Control Act (33 U.S.C. § 1317), as amended; (ii) substances designated as "hazardous
substances" pursuant to 33 U.S.C. § 1321; (iii) defined as a "hazardous waste" under Section
1004 of the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., as
amended; (iv) defined as a "hazardous substance" or "hazardous waste" under Section 101 of
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superf ind Reauthorization Act of 1986, 42 U.S.C. § 9601, et seq., or any so-
called "superfund" or "superlien" law; (v) defined as a "pollutant" or "contaminant" under 42
U.S.C.A. § 9601(33); (vi) defined as "hazardous waste" under 40 C.F.R. Part 260; (vii) defined
as a "hazardous chemical" under 29 C.F.R. Part 1910; any matter within the definition of
"hazardous substance" set forth in 15 U.S.C. § 1262; (viii) any matter, waste or substance
regulated under the Toxic Substances Control Act ("TSCA") [15 U.S.C. Sections 2601, et seq.];
(ix) any matter, waste or substance regulated under the Hazardous Materials Transportation
Act, 49 U.S.C. Sections 1801, et seq.; (x) those substances listed in the United States
Department of Transportation (DOT)Table [49 CFR 172.101]; (xi) any matter, waste or
substances designated by the EPA, or any successor authority, as a hazardous substance [40
CFR Part 302]; (xii) any matter, waste or substances defined as "hazardous waste" in Section
25117 of the California Health and Safety Code; (xiii) any substance defined as a "hazardous
substance" in Section 25316 of the California Health and Safety Code; (xiv) any matter, waste,
or substance that is subject to any other Law regulating, relating to or imposing obligations,
liability or standards of conduct concerning protection of human health, plant life, animal life,
natural resources, property or the enjoyment of life or property free from the presence in the
environment of any solid, liquid, gas, odor or any form of energy from whatever source; or (xv)
other substances, materials, and wastes that are, or become, regulated or classified as hazardous
or toxic under any Laws or the regulations adopted pursuant to any Laws, including manure,
asbestos, polychlorinated biphenyl, flammable explosives and radioactive material.
2.1.32 "Hazardous Substance Discharge" means any deposit, discharge,
generation, release, or spill of a Hazardous Substance that occurs at on, under, into or from the
Property, or during transportation of any Hazardous Substance to or from the Property (whether
on its own or contained in other material or property), or that arises at any time from the use or
operation of the Project or any activities conducted at on, under or from the Property or any
adjacent or nearby real property, or resulting from seepage, leakage, or other transmission of
Hazardous Substances from other real property to the Property, whether or not caused by a
Party or whether occurring before or after the Close of Escrow.
2.1.33 "Indemnifv' means, where this Agreement states that any hidemnitor
shall "indemnify" any Indemnitee from, against, or for a particular matter, that the Indemnitor
shall indemnify the Indemnitee and defend and hold the Indemnitee harmless from and against
any and all loss, cost, claims, liability, penalties, judgments, damages, and other injury,
detriment, or expense (including Legal Costs, interest and penalties) that the hndemnitee suffers
or incurs: (a) from, as a result of, or on account of the particular matter; or (b) in enforcing the
Indemnitor's indemnity obligation. "Indemnified" shall have the correlative meaning.
2.1.34 "Indemnitee" means any Person entitled to be Indemnified under the
terms of this Agreement.
2.1.35 "Indemnitor" means a Party that agrees to Indemnify any other Person.
2.1.36 "Insurance Documents" means certified copies of insurance policies,
original certificates of insurance or endorsements evidencing all insurance coverage required
to be obtained by the Developer, pursuant to this Agreement.
2.1.37 "Law" means all laws, ordinances, requirements, orders, proclamations,
directives, rules, and regulations of any Government applicable to the Property or the Project,
in any way, including any development, use, maintenance, taxation, operation, or occupancy
of, or environmental conditions affecting the Property or the Project, or relating to any taxes,
or otherwise relating to this Agreement or any Party's rights or remedies under this Agreement,
or any Transfer of any of the foregoing, whether in force on the Effective Date or passed,
enacted, or imposed at some later time, subject in all cases, however, to any applicable waiver,
variance, or exemption.
2.1.38 "Legal Costs" of any Person means all reasonable costs and expenses
such Person incurs in any legal proceeding (or other matter for which such Person is entitled to
be reimbursed for its Legal Costs), including reasonable attorneys' fees, court costs and
expenses and consultant and expert witness fees.
2.1.39 "Liability Insurance" means general comprehensive public liability
insurance against claims for Personal injury, death or property damage occurring upon, in, or
about the Property, the Project adjoining streets or passageways, providing coverage for a
combined single limit of One Million Dollars ($1,000,000) for any one occurrence. The City
may increase such limit up to once every three (3) years, upon at least one hundred eighty (180)
days' Notice to the Developer, provided that any increased limit: (a) does not exceed the limit
initially set forth herein multiplied by the CPI Adjustment Factor, rounded to the nearest
multiple of One Hundred Thousand Dollars ($100,000).
2.1.40 "Monetary Default' means any failure by either Party to pay or deposit,
when and as this Agreement requires, any amount of money, or evidence of any insurance
coverage, whether to or with a Party or a third -party.
2.1.41 "Non -Monetary Default" means the occurrence of any of the following,
except to the extent constituting a Monetary Default: (i) any failure of a Party to perform any
of its obligations under this Agreement; (ii) a Party's failure to comply with any material
restriction or prohibition in this Agreement; or (iii) any other event or circumstance that, with
passage of time or giving of Notice, or both, or neither, would constitute a Default under this
Agreement.
2.1.42 `Notice" means any consent, demand, designation, election, Notice, or
request relating to this Agreement, including any Notice of Default. All Notices must be in
writing.
2.1.43 "Notice of Default" means any Notice claiming or giving Notice of a
Default or alleged Default.
2.1.44 `Notify" means give a Notice.
2.1.45 "Performance Schedule" means the schedule for the performance of
certain actions by the City or the Developer, pursuant to the terms and conditions of this
Agreement, attached to this Agreement as Exhibit "C".
2.1.46 "Person" means any association, corporation, governmental entity or
City, individual, joint venture, joint-stock company, limited liability company, partnership,
trust, unincorporated organization, or other entity of any kind.
2.1.47 "Prevailing Wage Action" means: (i) any determination by the State
Department of Industrial Relations that prevailing wage rates should have been paid, but were
not, (ii) any determination by the State Department of Industrial Relations that higher prevailing
wage rates than those paid should have been paid, (iii) any administrative or legal action or
proceeding arising from any failure to comply with the California Labor Code provisions
regarding prevailing wage payments, including maintaining certified payroll records pursuant
to California Labor Code 1776, or (iv) any administrative or legal action or proceeding to
recover wage amounts pursuant to California Labor Code Section 1781.
2.1.48 "Project" means the development of a community micro -farm on the
Property. The term "micro -farm" refers to a small space primarily used to cultivate crops in an
urban or suburban setting. Additionally, micro -farms are used to teach gardening and farming
skills to community members. Developer will use a comprehensive assessment of community
needs to determine the specific use of the Property, as particularly described in the Project
Description attached to this Agreement as Exhibit "B" and incorporated herein by reference.
All to be developed in accordance with the terms and conditions of this Agreement, plans and
specifications approved by the City and any conditions imposed by the City in its approval of
the Developer's development application(s) related to the Project.
2.1.49 "Project Completion Date" means the earlier of. (i) the date of issuance
of a Certificate of Completion for the Project; or, (ii) one (1) year from the execution of this
Agreement. Developer may request up to a one (1) year extension of such construction deadline
from the City, which shall be reviewed administratively and may be granted or denied in the
City Manager's sole discretion.
2.1.50 "Property Insurance" means insurance providing coverage for the
Project and the Property, against loss, damage, or destruction by fire and other hazards
encompassed under the broadest form of property insurance coverage then customarily used for
like properties in the County (except earthquake or war risk) from time to time, in an amount
equal to one hundred percent (100%) of the Full Replacement Value (without deduction for
depreciation) of the Project (excluding excavations and foundations) and in any event sufficient
to avoid co-insurance, with "ordinance or law" coverage. Such insurance may contain a
deductible clause not exceeding Five Thousand Dollars ($5,000) multiplied by the then current
CPI Adjustment Factor. To the extent customary for like properties in the County at the time,
such insurance shall include coverage for explosion of steam and pressure boilers and similar
apparatus located on the Property; coverage for terrorism; coverage against damage or loss by
flood, if the Property is located in an area in which flood insurance is available under the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as such
laws may be amended, modified or replaced from time to time; an "increased cost of
construction" endorsement; and an endorsement covering demolition and cost of debris
removal.
2.1.51 "Property Insurance Proceeds" means net proceeds (after reasonable
costs of adjustment and collection, including Legal Costs) of Property Insurance, when and as
received by the Developer.
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2.1.52 "Record," "recorded," "recording" or "recordation" each mean
recordation of the referenced document in the official records of the Recorder of the County.
2.1.53 "State" means the State of California.
2.1.54 "Transfer" of any property, right or obligation means any of the
following, whether by operation of law or otherwise, whether voluntary or involuntary, and
whether direct or indirect: (a) any assignment, conveyance, grant, hypothecation, mortgage,
pledge, sale, or other transfer, whether direct or indirect, of all or any part of such property,
right or obligation, or of any legal, beneficial, or equitable interest or estate in such property,
right or obligation or any part of it (including the grant of any easement, lien, or other
encumbrance); (b) any conversion, exchange, issuance, modification, reallocation, sale, or other
transfer of any direct or indirect Equity Interest(s) in the owner of such property, right or
obligation by the holders of such Equity Interest(s); (c) any transaction described in "b"
affecting any Equity Interest(s) or any other interest in such property, right or obligation or in
any such owner (or in any other direct or indirect owner at any higher tier of ownership) through
any manner or means whatsoever; or (d) any transaction that is in substance equivalent to any
of the foregoing. A transaction affecting Equity Interests, as referred to in clauses "b" through
"d," shall be deemed a Transfer by the Operator even though the Operator is not technically the
transferor. A "Transfer" shall not, however, include any of the foregoing (provided that the
other Party to this Agreement has received Notice of such occurrence) relating to any Equity
Interest: (a) that constitutes a mere change in form of ownership with no material change in
beneficial ownership and constitutes a tax-free transaction under federal income tax law and
the State real estate transfer tax; (b) to member(s) of the immediate family(ies) of the
transferor(s) or trusts for their benefit; or (c) to any Person that, as of the Commencement Date,
holds an Equity Interest in the entity whose Equity Interest is being transferred.
2.1.55 "Unavoidable Delay" means a delay in either Party performing any
obligation required to be performed by such Party under this Agreement, except payment of
money, arising from or on account of any cause whatsoever beyond the Party's reasonable
control, despite such Party's reasonable diligent efforts, including industry -wide strikes, labor
troubles or other union activities (but only to the extent such actions do not result from an act
or omission of the Party), casualty, war, acts of terrorism or riots. Unavoidable Delay shall not
include delay caused by a Party's financial condition, illiquidity, or insolvency.
2.1.56 "Usury Limit' means the highest rate of interest, if any, that Law allows
under the circumstances.
2.1.57 "Waiver of Subrogation' means a provision in, or endorsement to, any
Liability Insurance, Automobile Liability Insurance or Property Insurance policy, by which the
insurance carrier agrees to waive rights of recovery by way of subrogation against any Person
for any loss such policy covers.
2.1.58 "Workers' Compensation Insurance" means worker's compensation
insurance complying with the provisions of State Law and an employer's liability insurance
endorsement, with commercially standard limits, covering all employees of the Developer, its
contractors and vendors.
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ARTICLE 3
PROPERTY LEASE
3.1 Prior to City Lease of Property. Prior to City leasing the Property to
Developer and Developer accepting the lease of the Property from the City, Developer shall
provide sufficient evidence that is satisfactory to the City, in City's sole and absolute discretion,
that the following have been completed:
3.1.1 Developer has obtained all entitlements for the Project.
3.1.2 Developer has obtained construction financing for the Project.
3.1.3 Developer has obtained permanent financing for the Project.
3.1.4 Developer provided City sufficient evidence of equity.
3.1.5 Developer has obtained all necessary building permits for the Project.
3.2 Lease. Once Developer has satisfied Section 3.1, City shall lease the Property
to the Developer for the Project, and the Developer shall accept the lease of the Property from
the City, for a ninety-nine (99) year term, at a rental rate of one dollar ($1.00) per month,
pursuant to the terms and conditions of this Agreement. City shall retain ownership of the
Property. The Parties shall execute the lease of the Property from the City to the Developer
pursuant to the terms of the City Lease attached herewith as Exhibit "E" and incorporated herein
by reference.
3.3 Developer Due Diligence Investigations.
3.3.1 License to Enter. The City licenses and permits the Developer to enter
the Property solely for the purpose of undertaking and completing such Due Diligence
Investigations as the Developer deems necessary and appropriate. The license provided in this
Section 3.3.1 shall expire at the earlier of: (i) the end of the Due Diligence Period or (ii) the
date of Developer's delivery of the Due Diligence Completion Notice. The Developer shall
conduct all of its Due Diligence Investigations at its sole cost and expense. The Developer shall
abide by any reasonable additional condition(s) of entry onto the Property required by the City,
whether or not set forth in this Agreement. Any Due Diligence Investigations of the Property
by the Developer shall not unreasonably disrupt any then existing use or occupancy of the
Property or the operations of the City. The City shall inform THRIVE of such operations or
use, 14 days before said use or operations.
3.3.2 Limitations. The Developer shall not conduct any intrusive or
destructive testing of any portion of the Property, other than low volume soil samples, without
the City's prior written consent. Following the conduct of any Due Diligence Investigations on
the Property, the Developer shall restore the Property to substantially its condition prior to the
conduct of such Due Diligence Investigations.
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3.3.3 Indemnity; Insurance. The activities of the Developer or its agents
directly or indirectly related to the Developer's Due Diligence Investigations shall be subject
to the Developer's indemnity, defense and hold harmless obligations under this Agreement.
Prior to commencing any Due Diligence Investigations on the Property, the Developer shall
deliver copies of policies or original certificates of all required Liability Insurance.
3.3.4 Due Diligence Completion Notice. The Developer shall deliver a Due
Diligence Completion Notice to the City prior to the end of the Due Diligence Period. If the
Developer does not unconditionally accept the condition of the Property by delivery of its Due
Diligence Completion Notice indicating such acceptance, prior to the end of the Due Diligence
Period, the Developer shall be deemed to have rejected the condition of the Property and refused
to accept lease of the Property. If the condition of the Property is rejected or deemed rejected
by the Developer, then the City or the Developer shall have the right to cancel the lease and
terminate this Agreement, in their respective sole and absolute discretion, until such time (if
ever) as the City receives the Due Diligence Completion Notice stating the Developer's
unconditional acceptance of the condition of the Property. Any termination of this Agreement
and cancellation of the lease, pursuant to this Section 3.3.4, shall be without liability to the other
Party or any other Person, and shall be accomplished by delivery of a written Notice of
termination to the other Party.
3.3.5 No Representations or Warranties. The Developer shall rely solely and
exclusively upon the results of its Due Diligence Investigations of the Property, including,
without limitation, investigations regarding geotechnical soil conditions, compliance with all
Laws applicable to the development or use of the Property by the Developer and any other
matters relevant to the condition or suitability of the Property for the development or operation
of the Project, as the Developer may deem necessary or appropriate. The City makes no
representation or warranty, express or implied, to the Developer relating to the condition of the
Property or suitability of the Property for any intended use or development by the Developer.
3.3.6 Acceptance of Property "AS -IS." The Developer shall accept all
conditions of the Property, without any liability of the City Parties whatsoever, upon the
Developer's unconditional acceptance of the condition of the Property indicated in its Due
Diligence Completion Notice. The Developer's delivery of its Due Diligence Completion
Notice indicating the Developer's unconditional acceptance of the condition of the Property
shall evidence the Developer's unconditional and irrevocable acceptance of the Property in the
Property's AS IS, WHERE IS, SUBJECT TO ALL FAULTS CONDITION, WITHOUT
WARRANTY AS TO QUALITY, CHARACTER, PERFORMANCE OR CONDITION and
with full knowledge of the physical condition of the Property, the nature of the City's interest
in and use of the Property, all Laws applicable to the Property, and of any and all conditions,
restrictions, encumbrances and all matters of record relating to the Property. The Developer's
delivery of its Due Diligence Completion Notice indicating the Developer's unconditional
acceptance of the condition of the Property shall constitute the Developer's representation and
warranty to the City that the Developer has received assurances acceptable to the Developer by
means independent of the City or any agent of the City of the truth of all facts material to the
Developer's lease of the Property pursuant to this Agreement, and that the Property is being
leased by the Developer as a result of its own knowledge, inspection and investigation of the
Property and not as a result of any representation(s) made by the City or any employee, official,
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consultant or agent of the City relating to the condition of the Property, unless such statement
or representation is expressly and specifically set forth in this Agreement. The City hereby
expressly and specifically disclaims any express or implied warranties regarding the Property.
3.4 City Pre -Lease Document Approval.
3.4.1 Developer Delivery of Documents. The Developer shall deliver all of
the following described documents to the City at least forty-five (45) calendar days prior to the
execution of the Lease:
(a) All Insurance Documents; and,
(b) Any covenants, conditions or restrictions proposed for the
Property.
3.4.2 City Approval. Within thirty (30) calendar days after the City receives
any item required to be delivered to the City by the Developer, the City shall Notify the
Developer whether or not such submitted matter is reasonably acceptable to the City. Any
Notice from the City stating that a particular submitted matter is not acceptable to the City shall
also state the actions that the City reasonably believes are required to make such matter
acceptable to the City. Within thirty (30) calendar days after receipt of any Notice from the
City stating that a submitted matter is not acceptable to the City, the Developer shall
appropriately revise any matter disapproved by the City in a manner intended in good faith to
obtain the City's approval of such matter and re -submit such matter to the City for approval.
The process applicable to the City's consideration of the initial submittal of any matter shall
apply to any re -submittal of such matter, following its disapproval by the City. If the City fails
to Notify the Developer that it does not approve of any submitted matter within the requisite
thirty (30) calendar day period, then the City shall be deemed to have approved such matter.
3.5 City Relocation Assistance.
3.5.1 Relocation. The Property is vacant, and therefore, the City has no known
relocation and related obligations. Notwithstanding the foregoing, as between the City and the
Developer, the City shall be responsible, at its sole cost and expense, for any and all relocation
and related expenses attributable to the relocation of the occupants of the Property, if any. The
City shall defend, indemnify and hold the Developer and its officers, employees, agents,
attorneys, and contractors harmless from and against all liability for any relocation and related
expenses attributable to the development of the Property and the relocation of its previous
occupants.
ARTICLE 4
PROJECT DEVELOPMENT
4.1 Developer Covenant to Develop Project. The Developer covenants to and for
the exclusive benefit of the City that the Developer shall commence and complete the
development of the Project on the Property, within the time period for such action set forth in
the Performance Schedule. The Developer covenants and agrees for itself, its successors and
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assigns that the Property shall be improved and developed with the Project, in conformity with
the terms and conditions of this Agreement and all applicable Laws and conditions of each
Government. The covenants of this Section 4.1 shall run with the land of the Property, until
the earlier of. (i) the date of issuance of a Certificate of Completion for the Project; or, (ii) one
(1) year from the execution of this Agreement. Developer may request up to a one (1) year
extension of such construction deadline from the City, which shall be reviewed administratively
and may be granted or denied in the City Manager's sole discretion.
4.2 Developer to Obtain all Project Approvals.
4.2.1 Submission of Development Application,
The Developer shall, within
the time period(s) for such actions set forth in the Performance Schedule, prepare and submit a
complete development application and any other required application, document, fee, charge or
other item (including, without limitation, deposit, fund or surety) required for construction or
installation of the Project, pursuant to all applicable Laws and Approvals, to each necessary
Government for review and approval. The City's zoning, building and land use regulations
(whether contained in ordinances, the City's municipal code, conditions of approval or
elsewhere), shall be applicable to the construction and installation of the Project on the Property
by the Developer, pursuant to this Agreement. The Developer acknowledges that all plans and
specifications and any changes to any plans or specifications for the Project shall be subject to
all applicable Laws and Approvals. The Developer shall obtain all entitlements, permits and
other approvals for construction and installation of the Project on the Property from each
Government, within the time periods for such actions set forth in the Performance Schedule,
and prior to the commencement of any construction or installation of the applicable portion(s)
of the Project.
4.2.2 Reservations. The approval of this Agreement by the City shall not be
binding on the City Council, the Planning Commission, Design Review Committee or any other
commission, committee, board or body of the City regarding any approvals of the Project
required by such bodies. No action by the City with reference to this Agreement or any related
documents shall be deemed to constitute issuance or waiver of any required City permit,
approval or authorization regarding the Property, the Project or the Developer. The Developer
obtains no right, permit or entitlement to construct or install the Project on the Property or any
portion of the Property by virtue of this Agreement.
4.2.3 Project Changes. If any revisions of the Project are required by a
Government, the Developer shall promptly make any such revisions that are: (i) generally
consistent with the Scope of Development; and, (ii) would not result in any material additional
improvements not identified in the Developer's submitted application.
4.2.4 Conditions of Approval. Notwithstanding any provision to the contrary
in this Agreement, the Developer agrees to accept and comply fully with any and all reasonable
conditions of approval applicable to any approvals, permits or other governmental actions
regarding the construction or installation of the Project on the Property, that are both: (i)
generally consistent with this Agreement; and, (ii) would not result in any material additional
improvements not identified in the Developer's submitted application.
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4.2.5 Developer Payment of Costs and Fees. The Developer and the City agree
that the City shall not provide any financial assistance to the Developer in connection with the
construction or installation of the Project. This provision does not preclude support to the
Developer including, but not limited to, discretionary funds. The Developer shall be solely
responsible for paying for the costs of all design work, construction, labor, materials, fees,
permits, applications, and other expenses associated with the Project. The Developer shall pay
any and all fees pertaining to the review and approval of the Project by each Government and
utility service providers, including the costs ofpreparation of all required construction, planning
and other documents reasonably required by each Government or utility service provider
pertinent to the construction, installation or operation of the Project on the Property, including,
but not limited to, specifications, drawings, plans, maps, permit applications, land use
applications, zoning applications, environmental review and disclosure documents and design
review documents. The Developer shall obtain any and all necessary governmental approvals,
prior to the commencement of applicable portions of construction and installation of the Project,
and the Developer shall take reasonable precautions to ensure the safety and stability of
surrounding properties during the construction and installation of the Project.
4.2.6. CEQA. The conceptual Project components may be revised and refined by the
entitlement application process that Developer intends to pursue once this Agreement is
approved by the City Council to obtain the necessary entitlements, which will take place in
accordance with the Schedule of Performance and as otherwise provided for herein.
Accordingly, the foregoing conceptual Project components will be subject to further
consideration and approval by City in accordance with applicable laws and regulations,
including City's review under the California Environmental Quality Act (Public Resources
Code § 21000 et seq. and CEQA Guidelines § 15000 et seq.) ("CEQA"). As described more
fully herein, Developer's development of the Site is conditioned on City completing its
compliance with CEQA before City considers whether or not to approve the Project or any of
its components. By entering into this Agreement, City is not committing itself to approve the
Project or any component of the Project. However, as detailed more fully herein, City will
undertake the steps necessary so that it may properly consider, in the future, whether or not to
approve the Project. As part of this consideration and as may be required for purposes of CEQA
compliance, it is understood and agreed by the parties that City may consider alternatives to the
Project or any of its components; it may impose feasible measures upon the Project to mitigate
identified significant impacts; it may condition approval of the Project on Developer's
willingness to modify the Project; or it may deny the Project altogether. Accordingly, City is
retaining its full discretion within the bounds of applicable laws in considering the Project.
4.3 Developer Changes to Project Plans and Specifications During Course of
Construction. The Developer shall have the right, during the course of construction of the
Project, to make "minor field changes," without seeking the approval of the City, if such
changes do not affect the type of use to be conducted within all or any portion of a structure.
"Minor field changes" shall be defined as those changes from the approved construction
drawings, plans and specifications that have no substantial effect on the Project and are made
in order to expedite the work of construction in response to field conditions. Nothing contained
in this Section 4.3 shall be deemed to constitute a waiver of or change in any Approvals
governing any such "minor field changes" or in any Approvals by any Government otherwise
required for any such "minor field changes."
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4.4 Construction Start and Completion of Project
4.4.1 The Developer shall commence construction and installation of the
Project in accordance with the Performance Schedule. Thereafter, the Developer shall
diligently proceed to complete the construction and installation of the Project, in a good and
workmanlike manner, in accordance with the Performance Schedule and all applicable Laws
and all Approvals for the Project issued by each Government.
4.4.2 On or before the Project Completion Date, the Developer shall
(a) Record a Notice of Completion, in accordance with California
Civil Code Section 3093, for the entirety of the Project;
(b) Cause the Project to be inspected by each Government and
correct any defects and deficiencies that may be disclosed by any such inspection;
(c) Cause all occupancy certificates and other Approvals necessary
for the occupancy and operation of the completed Project to be duly issued; and
(d) After commencement of the work of improvement of the Project,
the Developer shall not permit the work of improvement of the Project to cease or be suspended
for a time period in excess of forty-five (45) calendar days, either consecutively or in the
aggregate, other than as a result of an Unavoidable Delay. The City, in its sole and absolute
discretion, may extend the Project Completion Date for up to an additional sixty (60) days, in
the aggregate.
4.5 Compliance with Laws. All work performed in connection with the
construction or installation of the Project shall comply with all applicable Laws and Approvals.
4.6 Performance Schedule. All planning construction, installation and other
development obligations and responsibilities of the Developer related to the Project shall be
initiated and completed within the times specified in the Performance Schedule, or within such
reasonable extensions of such times granted by the City or as otherwise provided for in this
Agreement.
4.7 Developer Attendance at City Meetings. The Developer agrees to have one
or more of its employees or consultants who are knowledgeable regarding this Agreement and
the development of the Project, such that such Person(s) can meaningfully respond to City staff
questions regarding the progress of the Project, attend meetings with City staff or meetings of
the City governing body, when requested to do so by City staff, with reasonable advance written
Notice to the Developer.
4.8 PREVAILING WAGES.
4.8.1 THE DEVELOPER AGREES WITH THE CITY THAT THE
DEVELOPER SHALL ASSUME ANY AND ALL RESPONSIBILITY AND BE SOLELY
RESPONSIBLE FOR DETERMINING WHETHER OR NOT LABORERS EMPLOYED
RELATIVE TO THE CONSTRUCTION OR INSTALLATION OF THE PROJECT MUST
17
BE PAID THE PREVAILING PER DIEM WAGE RATE FOR THEIR LABOR
CLASSIFICATION, AS DETERMINED BY THE STATE, PURSUANT TO LABOR CODE
SECTIONS 1720, ET SEQ.
4.8.2 THE DEVELOPER, ON BEHALF OF ITSELF, ITS SUCCESSORS,
AND ASSIGNS, WAIVES AND RELEASES THE CITY FROM ANY RIGHT OF ACTION
THAT MAY BE AVAILABLE TO ANY OF THEM PURSUANT TO LABOR CODE
SECTION 1781. THE DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL
CODE SECTION 1542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN
THIS SECTION 4.8, WHICH READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
4.8.3 BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 4:
C_ G
Initials of Authorized
Developer Representative
4.8.4 ADDITIONALLY, THE DEVELOPER SHALL INDEMNIFY,
DEFEND AND HOLD HARMLESS THE CITY AGAINST ANY CLAIMS PURSUANT TO
LABOR CODE SECTION 1781 ARISING FROM THIS AGREEMENT OR THE
CONSTRUCTION OR INSTALLATION OF ALL OR ANY PORTION OF THE PROJECT.
4.9 Insurance. The Developer, to protect the City Parties against any and all claims
and liability for death, injury, loss and damage resulting from the Developer's actions in
connection with this Agreement, the Property and the Project, shall, at the Developer's sole cost
and expense, throughout the term of the Lease of the Property, maintain the following insurance
(or its then reasonably available equivalent), as applicable: (a) Liability Insurance; (b) Property
Insurance; (c) Builder's Risk Insurance; and (d) Worker's Compensation Insurance.
Additionally, the Developer, to protect the City Parties, shall cause its contractors and
subcontractors, at their sole cost and expense, until issuance of a Certificate of Completion for
the Project, to maintain Contractor's Insurance.
4.9.1 Nature of Insurance. All Liability Insurance, Property Insurance,
Automobile Liability Insurance and Contractor's Insurance policies this Agreement requires
shall be issued by carriers that: (a) are listed in the then current `Best's Key Rating Guide—
Property/Casualty—United States & Canada" publication (or its equivalent, if such publication
ceases to be published) with a minimum financial strength rating of "A" and a minimum
financial size category of "VII'; and (b) are admitted to do business in the State of California
18
by the California Department of Insurance. The Developer may provide any insurance under a
"blanket" or "umbrella" insurance policy, provided that (i) such policy or a certificate of such
policy shall specify the amount(s) of the total insurance allocated to the Property and the
Project, which amount(s) shall equal or exceed the amount(s) required by this Agreement and
shall not be reduced for claims made for other properties; and (ii) such policy otherwise
complies with this Agreement.
4.9.2 Policy Requirements and Endorsements. All insurance policies this
Agreement requires shall contain (by endorsement or otherwise) the following provisions:
(a) Insured. Liability Insurance, Automobile Liability Insurance and
Contractor's Insurance policies shall name the City Parties as "additional insured." Property
Insurance Policies shall name the City as a "loss payee." The coverage afforded to the City
Parties shall be at least as broad as that afforded to the Developer and may not contain any
terms, conditions, exclusions, or limitations applicable to the City Parties that do not apply to
the Developer.
(b) Primary Coverage. All policies shall be written as primary
policies, not contributing to or in excess of any coverage that the City Parties may carry.
(c) Contractual Liability. Liability Insurance policies shall contain
contractual liability coverage, for the Developer's indemnity obligations under this Agreement.
The Developer's obtaining or failure to obtain such contractual liability coverage shall not
relieve the Developer from nor satisfy any indemnity obligation of the Developer under this
Agreement.
(d) Deliveries to the City. Prior to the commencement of any Due
Diligence Investigations, and no later than twenty (20) days before any insurance required by
this Agreement expires, is cancelled or its liability limits are reduced or exhausted, the
Developer shall deliver to the City certificates of insurance evidencing the Developer's
maintenance of all insurance this Agreement requires. Each insurance carrier shall give the
City no less than thirty (30) calendar days' advance written Notice of any cancellation, non -
renewal, material change in coverage or available limits of liability under any insurance policy
required by this Agreement. Also, phrases such as "endeavor to" and "but failure to mail such
Notice shall impose no obligation or liability of any kind upon the company" shall not be
included in the cancellation wording of any certificates of insurance or any coverage for the
City Parties.
(e) Waiver of Certain Claims. The Developer shall attempt in good -
faith to cause the insurance carrier for each Liability Insurance, Automobile Liability Insurance
and Property Insurance policy to agree to a Waiver of Subrogation, if not already in the policy.
To the extent that the Developer actually obtains insurance with a Waiver of Subrogation, the
Parties release each other, and their respective authorized representatives, from any claims for
damage to any Person or property that are caused by or result from risks insured against under
such insurance policies.
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(I) No Representation. Neither Party makes any representation that
the limits, scope, or forms of insurance coverage this Agreement requires are adequate or
sufficient.
(g) No Claims Made Coverage. None of the insurance coverage
required under this Agreement may be written on a claims -made basis.
(h) Fully Paid and Non -Assessable. All insurance obtained and
maintained by the Developer in satisfaction of the requirements of this Agreement shall be fully
paid for and non -assessable.
(i) City Option to Obtain Coverage. During the continuance of an
Event of Default arising from the Developer's failure to carry any insurance required by this
Agreement, the City may, at its sole option, purchase any such required insurance coverage and
the City shall be entitled to immediate payment from the Developer of any premiums and
associated costs paid by the City for such insurance coverage. Any amount becoming due and
payable to the City under this Section 4.9 that is not paid within fifteen (15) calendar days after
written demand from the City for payment of such amount, with an explanation of the amounts
demanded, will bear interest from the date of the demand at the rate of ten percent (10%) per
annum or the maximum rate allowed by California law, whichever is less. Any election by the
City to purchase or not to purchase insurance otherwise required by the terms of this Agreement
to be carried by the Developer shall not relieve the Developer of its obligation to obtain and
maintain any insurance coverage required by this Agreement.
0) Cross -Liability; Severability of Interests. All Liability Insurance
and Contractor's Insurance shall be endorsed to provide cross -liability coverage for the
Developer and the City Parties and to provide severability of interests.
(k) Deductibles and Self -Insured Retentions. The Developer shall
pay or cause to be paid any and all deductibles and self -insured retentions under all insurance
policies issued in satisfaction of the terms of this Agreement regarding any claims relating to
the City Parties.
(1) No Separate Insurance. The Developer shall not carry separate
or additional insurance concurrent in form or contributing in the event of loss with that required
under this Agreement, unless endorsed in favor of the City, as required by this Agreement.
(m) Insurance Independent of Indemnification. The insurance
requirements of this Agreement are independent of the Developer's indemnification and other
obligations under this Agreement and shall not be construed or interpreted in any way to satisfy,
restrict, limit, or modify the Developer's indemnification or other obligations or to limit the
Developer's liability under this Agreement, whether within, outside, or in excess of such
coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor
shall the provision of such insurance preclude the City from taking such other actions as are
available to it under any other provision of this Agreement or otherwise at law or in equity.
U
ARTICLE 5
SPECIAL DEVELOPMENT COVENANTS OF THE DEVELOPER
5.1 Maintenance Condition of the Property. The Developer for itself, its
successors and assigns, covenants and agrees that:
5.1.1 Maintenance Standard. The entirety of the Property and the Project shall
be maintained by the Developer at Developer's cost in good condition and repair and in a neat,
clean and orderly condition, ordinary wear and tear and casualty excepted, including, without
limitation, maintenance, repair, reconstruction and replacement of any and all asphalt, concrete,
landscaping, utility systems, irrigation systems, drainage facilities or systems, grading,
subsidence, retaining walls or similar support structures, foundations, signage, ornamentation,
and all other improvements on or to the Property, now existing or made in the future by or with
the consent of the Developer, as necessary to maintain the appearance and character of the
Project and the Property. The Developer's obligation to maintain the Project and the Property
described in the immediately preceding sentence shall include, without limitation: (i)
maintaining the surfaces in a level, smooth and evenly covered condition with the type of
surfacing material originally installed or such substitute as shall in all respects be equal in
quality, use, and durability; (ii) removing all papers, mud, sand, debris, filth and refuse and
thoroughly sweeping areas to the extent reasonably necessary to keep areas in a clean and
orderly condition; (iii) removing or covering graffiti with the type of surface covering originally
used on the affected area, (iv) placing, keeping in repair and replacing any necessary and
appropriate directional signs, markers and lines; (v) operating, keeping in repair and replacing
where necessary, such artificial lighting facilities as shall be reasonably required; (vi) providing
security services as reasonably indicated; and (vii) maintaining, mowing, weeding, trimming
and watering all landscaped areas and making such replacements of plants and other
landscaping material as necessary to maintain the appearance and character of the landscaping,
all at the sole cost and expense of the Developer. The Developer's obligation to maintain the
Project and the Property described in the two immediately preceding sentences is, collectively,
referred to in this Agreement as the "Maintenance Standard." The Developer may contract with
a maintenance contractor to provide for performance of all or part of the duties and obligations
of the Developer with respect to the maintenance of the Project and the Property; provided,
however, that the Developer shall remain responsible and liable for the maintenance of the
Project and the Property, at all times.
5.1.2 Maintenance Deficiencv. If, at any time following the execution of the
Lease, there is an occurrence of an adverse condition on any area of the Project or the Property
in contravention of the Maintenance Standard (each such occurrence being a "Maintenance
Deficiency"), then the City may Notify the Developer in writing of the Maintenance Deficiency.
If the Developer fails to cure or commence and diligently pursue to cure the Maintenance
Deficiency within thirty (30) calendar days following the Developer's receipt of Notice of the
Maintenance Deficiency, the City may conduct a public hearing, following transmittal of
written Notice of the hearing to the Developer, at least, ten (10) days prior to the scheduled date
of such public hearing, to verify whether a Maintenance Deficiency exists and whether the
Developer has failed to comply with the provisions of this Section 5.1. If, upon the conclusion
of the public hearing, the City finds that a Maintenance Deficiency exists and remains uncured,
21
the City shall have the right to enter the Project and the Property and perform all acts necessary
to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then
be available to the City to accomplish the abatement of the Maintenance Deficiency. Any sum
expended by the City for the abatement of a Maintenance Deficiency pursuant to this Section
5.1 shall be reimbursed to the City by the Developer, within thirty (30) calendar days after
written demand for payment from the City. Any amount expended by the City for the abatement
of a Maintenance Deficiency pursuant to this Section 5.1 that is not reimbursed to the City by
the Developer within thirty (30) calendar days after written demand to the Developer for such
reimbursement, shall accrue interest at the lesser of: (i) the rate of ten percent (10%) per annum;
or, (ii) the Usury Limit, until paid in full.
5.1.3 Graffiti. Graffiti, as defined in Government Code Section 38772, that
has been applied to any exterior surface of a structure or improvement on the Property, that is
visible from any public right-of-way adjacent or contiguous to the Property, shall be removed
by the Developer by either painting over the evidence of such vandalism with a paint that has
been color -matched to the surface on which the paint is applied or removed with solvents,
detergents or water, as appropriate. If any such graffiti is not removed within twenty-four (24)
hours following the time of the discovery of the graffiti, the City shall have the right to enter
the Property and remove the graffiti, without Notice to the Developer. Any sum expended by
the City for the removal of graffiti on the Property pursuant to this Section 5.1 shall be
reimbursed to the City by the Developer within thirty (30) calendar days after written demand
for payment from the City. Any amount expended by the City for the removal of graffiti
pursuant to this Section 5 that is not reimbursed to the City by the Developer within thirty (30)
calendar days after written demand to the Developer for such reimbursement, shall accrue
interest at the lesser of (i) the rate of ten percent (10%) per annum; or, (ii) the Usury Limit,
until paid in full.
5.2 Obligation to Refrain from Discrimination. The Developer covenants and
agrees for itself, its successors, its assigns and every successor -in -interest to all or any portion
of the Property, that there shall be no discrimination against or segregation of any Person, or
group of Persons, on account of gender, sexual orientation, marital status, race, color, religion,
creed, national origin or ancestry in the lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property nor shall the Developer, itself or any Person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of the Developers, lessees,
sub -Developers, sub -lessees or vendees of the Property.
5.3 Form of Non-discrimination and Non -segregation Clauses. The Developer
covenants and agrees for itself, its successors, its assigns, and every successor -in -interest to all
or any portion of the Property, that the Developer, such successors and such assigns shall refrain
from restricting the lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of all
or any portion of the Property on the basis of gender, sexual orientation, marital status, race,
color, religion, creed, ancestry or national origin of any Person. All leases or contracts
pertaining to the Property or any part thereof shall contain or be subject to substantially the
following non-discrimination or non -segregation covenants:
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5.3.1 In leases: "The Lessee herein covenants by and for itself, its successors
and assigns, and all persons claiming under or through them, and this lease is made and accepted
upon and subject to the following conditions: That there shall be no discrimination against or
segregation of any Person or group of persons, on account of race, color, creed, religion, gender,
sexual orientation, marital status, national origin, or ancestry, in the leasing, subleasing,
transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the
lessee itself, or any Person claiming under or through it, establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, number,
use, or occupancy, of the Developers lessees, sub -lessee, sub -Developers, or vendees in the
premises herein leased."
5.3.2 In contracts: "There shall be no discrimination against or segregation of
any Person or group of persons on account of race, color, creed, religion, gender, sexual
orientation, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use,
occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the
transferee or any Person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use,
or occupancy, of the Developers, lessees, sub -lessees, sub -Developers, or vendees of the
premises herein transferred." The foregoing provision shall be binding upon and shall obligate
the contracting party or parties and any subcontracting party or parties, or other transferees
under the instrument.
5.4 Survival and Enforcement of Special Development Covenants. These
special development covenants may be enforced by the City regardless of whether the City
currently owns or continues to own an interest in any property benefited by any such covenants.
The Developer irrevocably stipulates and agrees that breach of any of the special development
covenants set forth in this ARTICLE 55 will result in great and irreparable damage to the City,
and will result in damages to the City that are either impracticable or extremely difficult to
quantify. Accordingly, upon the breach of any special development covenant set forth in this
Article 5, the City may institute an action for injunctive relief and/or for damages regarding
such breach.
ARTICLE 6
DEFAULTS, REMEDIES AND TERMINATION
6.1 Defaults.
6.1.1 Events of Default. In addition to other acts or omissions of a Party that
may legally or equitably constitute a Default or breach of this Agreement, the occurrence of
any of the following specific events shall constitute an "Event of Default' under this
Agreement:
(a) Monetary Default. If a Monetary Default occurs and continues
for seven (7) days after Notice from the City, specifying in reasonable detail the amount of
money not paid and the nature and calculation of each such payment.
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(b) Bankruptcy or Insolvency. If the Developer ceases to do business
as a going concern, ceases to pay its debts as they become due or admits in writing that it is
unable to pay its debts as they become due, or becomes subject to any Bankruptcy Proceeding
(except an involuntary Bankruptcy Proceeding dismissed within sixty (60) days after
commencement), or a custodian or trustee is appointed to take possession of, or an attachment,
execution or other judicial seizure is made with respect to, substantially all of the Developer's
assets or the Developer's interest in this Agreement (unless such appointment, attachment,
execution, or other seizure was involuntary and is contested with diligence and continuity and
vacated and discharged within sixty (60) days).
(c) Breach of Representation or Warranty. Any representation,
warranty or disclosure made to the City by the Developer regarding this Agreement, the
Property or the Project is materially false or misleading, whether or not such representation or
disclosure appears in this Agreement.
(d) Deposit of Funds, Bonds or Other Security. If the Developer fails
to make any deposit of funds or provide any bond or other security required under this
Agreement within seven (7) days after Notice of such Default to the Developer.
(e) Insurance. If the Developer fails to obtain, maintain or replace
any insurance coverage required under this Agreement within seven (7) days after Notice of
such Default to the Developer.
(f) Material Deviation in Project. Any material deviation in the
work of construction or installation of the Project from the approved Project description,
without the prior written approval of the City that is not corrected within fifteen (15) days
following written Notice of such Default.
(g) Project Progress.
(i) The construction or installation of the Project does not
commence by the time provided for such commencement in the Performance Schedule.
(ii) The construction or installation of the Project is delayed
or suspended for a period in excess of that permitted under Section 4.4.2(d).
(iii) The Project is not completed by the Project Completion
Date.
(h) Non -Monetary Default. If any Non -Monetary Default occurs and
the Developer does not cure such Non -Monetary Default within thirty (30) days after Notice
from the City describing the Default in reasonable detail, or, in the case of a Non -Monetary
Default that cannot with reasonable due diligence be cured within thirty (30) days from such
Notice, if the Developer shall not: (a) within thirty (30) days after the City's Notice, advise the
City of the Developer's intention to take all reasonable steps to cure such Non -Monetary
Default; (b) duly commence such cure within such period, and then diligently prosecute such
cure to completion; and, (c) complete such cure within a reasonable time under the
circumstances.
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(i) Transfer. The occurrence of a Transfer other than a Permitted
Transfer, whether voluntarily or involuntarily or by operation of Law, in violation of the terms
and conditions of this Agreement.
6.2 DEVELOPER'S WAIVER OF RIGHT TO SPECIFIC PERFORMANCE
AND LIMITATION ON RECOVERY OF DAMAGES PRIOR TO EXECUTION OF
THE LEASE.
6.2.1 THE DEVELOPER WAIVES ANY RIGHT TO MAINTAIN AN
ACTION AGAINST THE CITY FOR SPECIFIC PERFORMANCE OF ANY TERM OR
PROVISION OF THIS AGREEMENT, PRIOR TO THE EXECUTION OF THE LEASE.
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT BY THE CITY, PRIOR TO
THE EXECUTION OF THE LEASE, THE DEVELOPER SHALL BE LIMITED TO
RECOVERING ANY AMOUNTS ACTUALLY EXPENDED BY THE DEVELOPER IN
REASONABLE RELIANCE ON THIS AGREEMENT, PRIOR TO THE DATE OF THE
OCCURRENCE OF THE DEFAULT BY THE CITY, NOT TO EXCEED AN AGGREGATE
AMOUNT OF _ TWENTY THOUSAND DOLLARS
($_20,000). THE DEVELOPER WAIVES ANY RIGHT TO RECOVER ANY
OTHER SUMS FROM THE CITY ARISING FROM A DEFAULT BY THE CITY, PRIOR
TO THE EXECUTION OF THE LEASE. THE DEVELOPER ACKNOWLEDGES THE
PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVERS AND
RELEASES CONTAINED IN THIS SECTION 6.2, WHICH CIVIL CODE SECTION
READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.
6.2.2 BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 6.2.
CC
Initials of Authorized
Developer Representative
6.3 Legal Actions. Following the execution of the Lease, either Party may institute
legal action to cure, correct or remedy any Default, to recover damages for any Default, or to
obtain any other remedy available to that Party under this Agreement, at law or in equity
regarding any Default. Any such legal action must be instituted in the Superior Court of the
State of California in and for Orange County, in any other appropriate court within Orange
County, or in the United States District Court with jurisdiction in Orange County.
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6.4 Rights and Remedies are Cumulative. Except as otherwise expressly stated
in this Agreement, the rights and remedies of the Parties set forth in this Agreement are
cumulative and the exercise by either Party of one or more of such rights or remedies shall not
preclude the exercise by it, at the same or different times, of any other rights or remedies for
the same default or any other default by the other Party.
6.5 Indemnification.
6.5.1 Obligations. The City shall Indemnify the Developer Parties and the
Developer shall Indemnify the City Parties against any wrongful intentional act or negligence
of the hndemnitor. The Developer shall also Indemnify the City Parties against any and all of
the following: (a) any Application made at the Developer's request; (b) any Due Diligence
Investigations by the Developer; (c) use, occupancy, management or operation of the Project;
(d) any agreements that the Developer (or anyone claiming through the Developer) makes
regarding the Project; (e) the condition of the Project or any space under, adjoining or
appurtenant to the Property; and, (f) any accident, injury or damage whatsoever caused to any
Person in or on the Property or the Project. Notwithstanding anything to the contrary in this
Agreement, no hndemnitor shall be required to Indemnify any hidemnitee to the extent of the
Indemnitee's wrongful intentional acts or negligence.
6.5.2 Limitation on Liability of the Citv. Following the execution of the Lease,
the Developer is and shall be responsible for operation of the Property and the Project, and the
City shall not be liable for any injury or damage to any property (of the Developer or any other
Person) or to any Person occurring on or about the Property or the Project, except to the extent
caused by the City's wrongful intentional act or negligence.
6.5.3 Strict Liability. The indemnification obligations of an Indemnitor shall
apply regardless of whether liability without fault or strict liability is imposed or sought to be
imposed on one or more Indemnitees.
6.5.4 Independent of Insurance Obligations. The Developer's indemnification
obligations under this Agreement shall not be construed or interpreted as in any way restricting,
limiting, or modifying the Developer's insurance or other obligations under this Agreement and
is independent of the Developer's insurance and other obligations under this Agreement. The
Developer's compliance with its insurance obligations and other obligations under this
Agreement shall not in any way restrict, limit, or modify the Developer's indemnification
obligations under this Agreement and are independent of the Developer's indemnification and
other obligations under this Agreement.
6.5.5 Survival of Indemnification and Defense Obligations. The indemnity
and defense obligations under this Agreement shall survive the expiration or earlier termination
of this Agreement, until all claims against any of the Indemnitees involving any of the
indemnified matters are fully, finally, absolutely and completely barred by applicable statutes
of limitations.
6.5.6 Independent Duty to Defend. The duty to defend under this Agreement
is separate and independent of the duty to Indemnify. The duty to defend includes claims for
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which an Indemnitee may be liable without fault or strictly liable. The duty to defend applies
immediately upon notice of a Claim, regardless of whether the issues of negligence, liability,
fault, default or other obligation on the part of the Indemnitor or the Indemnitee have been
determined. The duty to defend applies immediately, regardless of whether the Indemnitee has
paid any amounts or incurred any detriment arising out of or relating (directly or indirectly) to
any claims. It is the express intention of the Parties that an Indemnitee be entitled to obtain
summary adjudication or summary judgment regarding an Indemnitor's duty to defend the
Indemnitee, at any stage of any claim or suit, within the scope of the Indemnitor's indemnity
obligations under this Agreement.
6.6 Indemnification Procedures. Wherever this Agreement requires any
Indemnitor to Indemnify any Indemnitee:
6.6.1 Prompt Notice. The Indemnitee shall promptly Notify the Indemnitor of
any claim. To the extent, and only to the extent, that the Indemnitee fails to give prompt Notice
of a Claim and such failure materially prejudices the Indemnitor in providing indemnity for
such claim, the Indemnitor shall be relieved of its indemnity obligations for such claim.
6.6.2 Selection of Counsel. The Indemnitor shall select counsel reasonably
acceptable to the Indemnitee. Counsel to Indemnitor's insurance carrier that is providing
coverage for a claim shall be deemed reasonably satisfactory. Even though the Indemnitor shall
defend the action, Indemnitee may, at its option and its own expense, engage separate counsel
to advise it regarding the claim and its defense. The Indemnitee's separate counsel may attend
all proceedings and meetings. The Indemnitor's counsel shall actively consult with the
Indemnitee's separate counsel. The Indemnitor and its counsel shall, however, fully control the
defense, except to the extent that the Indemnitee waives its rights to indemnity and defense for
such claim.
6.6.3 Cooperation. The Indemnitee shall reasonably cooperate with the
Indemnitor's defense of the Indemnitee, provided the Indemnitor reimburses the Indemnitee's
actual out of pocket expenses (including Legal Costs) of such cooperation.
6.6.4 Settlement. The Indemnitor may, with the Indemnitee's consent, not to
be unreasonably withheld, settle a claim. The Indemnitee's consent shall not be required for
any settlement by which all of the following occur: (a) the Indemnitor procures (by payment,
settlement, or otherwise) a release of the Indemnitee from the subject claim(s) by which the
Indemnitee need not make any payment to the claimant; (b) neither the Indemnitee nor the
Indemnitor on behalf of the Indemnitee admits liability; (c) the continued effectiveness of this
Agreement is not jeopardized in any way; and (d) the Indemnitee's interest in the Project is not
jeopardized in any way.
6.6.5 Insurance Proceeds. The Indemnitor's obligations shall be reduced by
net insurance proceeds the Indemnitee actually receives for the matter giving rise to
indemnification obligation.
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ARTICLE 7
GENERAL PROVISIONS
7.1 Incorporation of Recitals. The Recitals set forth preceding this Agreement are
true and correct and are incorporated into this Agreement in their entirety by this reference.
7.2 Restrictions on Change in Management or Control of the Developer,
Assignment and Transfer.
7.2.1 Restrictions. The Developer acknowledges that the qualifications and
identity of the Developer are of particular importance and concern to the City. The Developer
further recognizes and acknowledges that the City has relied and is relying on the specific
qualifications and identity of the Developer in entering into this Agreement with the Developer
and, as a consequence, Transfers are permitted only as expressly provided in this Agreement.
The Developer represents to the City that it has not made and agrees that it will not create or
suffer to be made or created, any Transfer, other than a Permitted Encumbrance either
voluntarily, involuntarily or by operation of law, without the prior written approval of the City,
which may be given, withheld or conditioned in the City's sole and absolute discretion. Any
Transfer made in contravention of this Section 7.2 shall be voidable at the election of the City.
The Developer agrees that the restrictions on Transfers set forth in this Section 7.2 are
reasonable.
7.3 Delivery of Transfer Documents. All instruments and other legal documents
proposed to effect any proposed Transfer shall be submitted to the City for review, at least
thirty-five (35) calendar days prior to the proposed date of the Transfer, and the written
approval, disapproval or conditions of the City shall be provided to the Developer, within thirty
(30) calendar days following the City's receipt of the Developer's request. Legal Challenges.
The Developer acknowledges that the City is a "public entity" and/or a "public agency" as
defined under applicable California law. Therefore, the City must satisfy the requirements of
certain California statutes relating to the actions of public entities, including, without limitation,
CEQA. Also, as a public entity, the City's action in approving this Agreement may be subject
to proceedings to challenge or invalidate this Agreement or mandamus. The Developer assumes
the risk of delays and damages that may result to the Developer from any third -party legal
actions related to the City's approval of this Agreement or pursuit of the activities contemplated
by this Agreement, even in the event that an error, omission or abuse of discretion by the City
is determined to have occurred. If a third -parry files a legal action regarding the City's approval
of this Agreement or the pursuit of the activities contemplated by this Agreement, the City may
terminate this Agreement on thirty (30) days advance written Notice to the Developer of the
City's intent to terminate this Agreement, referencing this Section 7.3, without any further
obligation to perform the terms of this Agreement and without any liability to the Developer or
any other Person resulting from such termination, unless the Developer unconditionally agrees
in writing to indemnify and defend the City, with legal counsel acceptable to the City, against
such third -party legal action, within thirty (30) calendar days following the date of the City's
Notice of intent to terminate this Agreement, including without limitation paying all Legal
Costs, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and
the expenses of any and all financial or performance obligations resulting from the disposition
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of the legal action. Any such written defense and indemnity agreement between the City and
the Developer must be in a separate writing and reasonably acceptable to the City in both form
and substance. Nothing contained in this Section 7.3 shall be deemed or construed to be an
express or implied admission that the City may be liable to the Developer or any other Person
for damages or other relief alleged regarding any alleged or established failure of the City to
comply with any Law. If the City and the Developer have not entered into a written defense
and indemnity agreement, pursuant to this Section 7.3 within thirty (30) calendar days following
the date of the City's notice of intent to terminate this Agreement, then this Agreement shall
terminate, without further Notice or action by either Party, on the fortieth (401) day following
the date of the City's notice of intent to terminate this Agreement.
7.4 City Manager Implementation. The City shall implement this Agreement
through its City Manager. The City Manager is hereby authorized by the City to issue
approvals, interpretations, waivers and enter into certain amendments to this Agreement on
behalf of the City, to the extent that any such action(s) does/do not materially or substantially
change the Project or cause the City to incur any obligation exceeding Fifty Thousand Dollars
($50,000). All other actions shall require the consideration and approval of the City governing
body. Nothing in this Section 7.4 shall restrict the submission to the City governing body of
any matter within the City Manager's authority under this Section 7.4, in the City Manager's
sole and absolute discretion, to obtain the City governing body's express and specific
authorization on such matter. The specific intent of this Section 7.4 is to authorize certain
actions on behalf of the City by the City Manager, but not to require that such actions be taken
by the City Manager, without further consideration by the City governing body.
7.5 Notices, Demands and Communications Between the Parties.
7.5.1 Notices. Any and all Notices submitted by either Party to the other Party
pursuant to or as required by this Agreement shall be proper, if in writing and transmitted to the
principal office of the City or the Developer, as applicable, set forth in Section 7.5.2, by one or
more of the following methods: (i) messenger for immediate Personal delivery, (ii) a nationally
recognized overnight (one-night) delivery service (i.e., Federal Express, United Parcel Service,
etc.) or (iii) registered or certified United States Mail, postage prepaid, return receipt requested.
Such Notices may be sent in the same manner to such other addresses as either Party may
designate from time to time, by Notice. Any Notice shall be deemed to be received by the
addressee, regardless of whether or when any return receipt is received by the sender or the date
set forth on such return receipt, on the day that it is delivered by personal delivery, on the date
of delivery by a nationally recognized overnight courier service (or when delivery has been
attempted twice, as evidenced by the written report of the courier service) or four (4) calendar
days after it is deposited with the United States Postal Service for delivery, as provided in this
Section 7.5.1. Rejection, other refusal to accept or the inability to deliver a Notice because of
a changed address of which no Notice was given or other action by a Person to whom Notice is
sent, shall be deemed receipt of the Notice.
7.5.2 Addresses. The following are the authorized addresses for the
submission of Notices to the Parties, as of the Effective Date:
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To the Developer:
THRIVE Santa Ana, Inc.
P.O. Box 1935
Santa Ana, CA 92702
UCI School of Law Community
Economic Development Clinic
P.O. Box 5479
Irvine, CA 92616-5479
Public Law Center
c/o Housing and Homelessness
Prevention Unit
601 Civic Center Drive West
Santa Ana, CA 92701
To the City:
City of Santa Ana
Community Development
Agency
20 Civic Center Plaza (M-25)
P.O. Box 1988
Santa Ana, CA 92702
With courtesy copy to
City of Santa Ana
City Attorney's Office
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, CA 92702
7.6 Warranty Against Payment of Consideration for Agreement. The
Developer represents and warrants that: (i) the Developer has not employed or retained any
Person to solicit or secure this Agreement upon an agreement or understanding for a
commission, percentage, brokerage, or contingent fee, excepting bona fide employees of the
Developer; and, (ii) no gratuities, in the form of entertainment, gifts or otherwise have been or
will be given by the Developer or any of its agents, employees or representatives to any elected
or appointed official or employee of the City in an attempt to secure this Agreement or favorable
terms or conditions for this Agreement. Breach of the representations or warranties of this
Section 7.6 shall automatically terminate this Agreement, without further notice to or action by
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either Party and the Developer shall immediately refund any payments made to the Developer
by the City pursuant to this Agreement, prior to the date of any such termination.
7.7 Relationship of Parties. The Parties each understand and agree that the City
and the Developer are independent contracting entities and do not intend by this Agreement to
create any partnership, joint venture, or similar business arrangement, relationship or
association between them.
7.8 Survival of Agreement. All of the provisions of this Agreement shall be
applicable to any dispute between the Parties arising from this Agreement, whether prior to or
following expiration or termination of this Agreement, until any such dispute is finally and
completely resolved between the Parties, either by written settlement, entry of a non -appealable
judgment or expiration of all applicable statutory limitations periods and all terms and
conditions of this Agreement relating to dispute resolution and limitations on damages or
remedies shall survive any expiration or termination of this Agreement.
7.9 Conflict of Interest. No member, officer, official or employee of the City
having any conflict of interest, direct or indirect, related to this Agreement, the Property or the
development or operation of the Project shall participate in any decision relating to this
Agreement. The Parties represent and warrant that they do not have knowledge of any such
conflict of interest.
7.10 Non -liability of Officials, Employees and Agents. No City Party shall be
personally liable to the Developer, or any successor in interest of the Developer, in the event of
any Default or breach by the City under this Agreement or for any amount that may become
due to the Developer or to its successor, or on any obligations under the terms or conditions of
this Agreement, except as may arise from the negligence or willful intentional acts of such City
Party.
7.11 Calculation of Time Periods. Unless otherwise specified, all references to time
periods in this Agreement measured in days shall be to consecutive calendar days, all references
to time periods in this Agreement measured in months shall be to consecutive calendar months
and all references to time periods in this Agreement measured in years shall be to consecutive
calendar years. Any reference to business days in this Agreement shall mean and refer to
consecutive business days of the City.
7.12 Principles of Interpretation. No inference in favor of or against any Party shall
be drawn from the fact that such Party has drafted any part of this Agreement. The Parties have
both participated substantially in the negotiation, drafting, and revision of this Agreement, with
advice from legal and other counsel and advisers of their own selection. A word, term or phrase
defined in the singular in this Agreement may be used in the plural, and vice versa, all in
accordance with ordinary principles of English grammar, which shall govern all language in
this Agreement. The words "include" and "including" in this Agreement shall be construed to
be followed by the words: "without limitation." Each collective noun in this Agreement shall
be interpreted as if followed by the words "(or any part of it)," except where the context clearly
requires otherwise. Every reference to any document, including this Agreement, refers to such
document, as modified from time to time (excepting any modification that violates this
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Agreement), and includes all exhibits, schedules, addenda and riders to such document. The
word "or" in this Agreement includes the word "and."
7.13 Governing Law. The Laws of the State of California shall govern the
interpretation and enforcement of this Agreement, without application of conflicts of laws
principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully
performed in and relates to real property located in the City.
7.14 City Attorney Fees and Costs. For the purposes of this Agreement, all
references to reasonable attorneys' fees and costs in reference to the City are intended to include
the salaries, benefits and costs of the City Attorney, as City General Counsel, and the lawyers
employed in the City Attorney's Office who provide legal services regarding the particular
matter, pro -rated to an hourly rate, in addition to any fees and costs of outside counsel to the
City.
7.15 Unavoidable Delay; Extension of Time of Performance.
7.15.1 Notice. Subject to any specific provisions of this Agreement stating that
they are not subject to Unavoidable Delay or otherwise limiting or restricting the effects of an
Unavoidable Delay, performance by either Party under this Agreement shall not be deemed, or
considered to be in Default, where any such Default is due to the occurrence of an Unavoidable
Delay. Any Party claiming an Unavoidable Delay shall Notify the other Party: (a) within ten
(10) days after such Party knows of any such Unavoidable Delay; and (b) within five (5) days
after such Unavoidable Delay ceases to exist. To be effective, any Notice of an Unavoidable
Delay must describe the Unavoidable Delay in reasonable detail. The extension of time for an
Unavoidable Delay shall commence on the date of receipt of written Notice of the occurrence
of the Unavoidable Delay by the Party not claiming an extension of time to perform due to such
Unavoidable Delay and shall continue until the end of the condition causing the Unavoidable
Delay. The Party claiming an extension of time to perform due to an Unavoidable Delay shall
exercise its commercially reasonable best efforts to cure the condition causing the Unavoidable
Delay, within a reasonable time.
7.15.2 ASSUMPTION OF ECONOMIC RISKS. EACH PARTY
EXPRESSLY AGREES THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, OF
EITHER PARTY SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN
MARKET CONDITIONS OR DEMAND OR CHANGES IN THE ECONOMIC
ASSUMPTIONS OF EITHER PARTY THAT MAY HAVE PROVIDED A BASIS FOR
ENTERING INTO THIS AGREEMENT SHALL NOT OPERATE TO EXCUSE OR DELAY
THE PERFORMANCE OF EACH AND EVERY ONE OF EACH PARTY'S OBLIGATIONS
AND COVENANTS ARISING UNDER THIS AGREEMENT. ANYTHING IN THIS
AGREEMENT TO THE CONTRARY NOTWITHSTANDING, THE PARTIES
EXPRESSLY ASSUME THE RISK OF UNFORESEEABLE CHANGES IN ECONOMIC
CIRCUMSTANCES AND/OR MARKET DEMAND/CONDITIONS AND WAIVE, TO THE
GREATEST LEGAL EXTENT, ANY DEFENSE, CLAIM, OR CAUSE OF ACTION BASED
IN WHOLE OR IN PART ON ECONOMIC NECESSITY, IMPRACTICABILITY,
CHANGED ECONOMIC CIRCUMSTANCES, FRUSTRATION OF PURPOSE, OR
SIMILAR THEORIES. THE PARTIES AGREE THAT ADVERSE CHANGES IN
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ECONOMIC CONDITIONS, EITHER OF THE PARTY SPECIFICALLY OR THE
ECONOMY GENERALLY, OR CHANGES IN MARKET CONDITIONS OR DEMANDS,
SHALL NOT OPERATE TO EXCUSE OR DELAY THE STRICT OBSERVANCE OF
EACH AND EVERY ONE OF THE OBLIGATIONS, COVENANTS, CONDITIONS AND
REQUIREMENTS OF THIS AGREEMENT. THE PARTIES EXPRESSLY ASSUME THE
RISK OF SUCH ADVERSE ECONOMIC OR MARKET CHANGES, WHETHER OR NOT
FORESEEABLE AS OF THE EFFECTIVE DATE.
Initials of Authorized Initials of Authorized
Representative(s) of City Representative(s) of Developer
7.16 Real Estate Commissions. The City shall not be responsible for any real estate
brokerage or sales commissions, finder fees or similar charges that may arise from or be related
to this Agreement. The Developer shall be solely responsible for any real estate brokerage or
sales commissions, finder fees or similar charges that may arise from or be related to this
Agreement that are claimed by any Person engaged by the Developer relating to the Property,
the Project or this Agreement. Further, the Developer shall Indemnify the City from any such
claims for real estate brokerage or sales commissions, finder fees or similar charges.
7.17 Binding on Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective legal representatives, successors and
assigns.
7.18 No Other Representations or Warranties. Except as expressly set forth in
this Agreement, no Party makes any representation or warranty material to this Agreement to
any other Party.
7.19 Tax Consequences. Developer acknowledges this Agreement and agrees that
it shall bear any and all responsibility, liability, costs, and expenses connected in any way with
any tax consequences experienced by the Developer related to this Agreement or the execution
of the Lease.
7.20 No Third -Party Beneficiaries. Nothing in this Agreement, express or implied,
is intended to confer any rights or remedies under or by reason of this Agreement on any Person
other than the Parties and their respective permitted successors and assigns, nor is anything in
this Agreement intended to relieve or discharge any obligation of any third -Person to any Party
or give any third -Person any right of subrogation or action over or against any Party.
7.21 Execution in Counterparts. This Agreement may be executed in two or more
counterpart originals, each of which shall be deemed to be an original, but all of which together
shall constitute one and the same document.
7.22 Entire Agreement.
33
7.22.1 Integrated Agreement. This Agreement includes pages and
exhibits, which constitute the entire understanding and Agreement of
the Parties regarding the Project, lease of the Property and the other subjects addressed in this
Agreement. This Agreement integrates all of the terms and conditions mentioned in this
Agreement or incidental to this Agreement, and supersedes all negotiations or previous
agreements between the Parties with respect to the Project, lease of the Property and the other
subjects addressed in this Agreement.
7.22.2 No Merger. None of the terns, covenants, restrictions, agreements or
conditions set forth in this Agreement shall be deemed to be merged with any lease or sublease
of any part of the Property, and this Agreement shall continue in full force and effect before
and after any such instruments.
7.22.3 Waivers Must be in Writing. All waivers of the provisions of this
Agreement and all amendments to this Agreement must be in writing and signed by the
authorized representative(s) of both the City and the Developer.
7.23 Exhibits. The exhibits attached to this Agreement are described as follows:
Exhibit A:
Property Legal Description
Exhibit B:
Project Description
Exhibit C:
Performance Schedule
Exhibit D:
Developer Official Action
Exhibit E:
City Lease
7.24 Time Declared to be of the Essence. As to the performance of any obligation
under this Agreement of which time is a component, the performance of such obligation within
the time specified is of the essence.
7.25 No Waiver. Failure to insist on any one occasion upon strict compliance with
any term, covenant, condition, restriction or agreement contained in this Agreement shall not
be deemed a waiver of such term, covenant, or condition, restriction or agreement, nor shall
any waiver or relinquishment of any rights or powers under this Agreement at any one time or
more times, be deemed a waiver or relinquishment of such right or power at any other time or
times.
[Signatures on following page]
34
IN WITNESS WHEREOF, the Parties have executed this Disposition and Development
Agreement on the dates indicated next to each of the signatures of their authorized
representatives, as appear below:
ATTEST:
APPROVED AS TO FORM:
SONIA R CARVALHO
City Attorney
Ryan U Hodge
Assistant City Attorney
RECOMMENDED FOR APPROVAL:
STEVEN A. MENDOZA
Executive Director
Community Development Agency
35
CITY OF SANTA ANA
KRISTINE RIDGE
City Manager
DEVELOPER
By..
CESAR COVARRUBIAS
Treasurer, THRIVE Santa Ana, Inc.
Dated: d 1 H 11-a
By: 0
SANDRA ORTEGA
Secretary, THRIVE Santa Ana, Inc.
Dated: gnaigngn
EXHIBIT "A"
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
PROPERTY LEGAL DESCRIPTION
1901 West Walnut Street ("Property") is situated in the State of California, County of Orange,
and the City of Santa Ana. The Property has a lot size of 16,558 square feet (.38 acre) as shown
on a Map recorded as parcel 8 in Book 7 on page 332 of Assessor Parcel Maps of Orange County,
California. The Property is bounded on its easterly edge by South Daisy Avenue and its southern
edge by West Walnut Street. The following is the Property Legal Description:
P BK 54 PG 50 PAR 3
EXHIBIT "B"
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
PROJECT DESCRIPTION
Developer proposes a micro -farm use for the Property. Operation of a community micro -
farm and related activities, including, but not limited to, production and distribution of fresh
vegetables, flowers, other ornamentals, and fruit, also hosting weekly open-air markets and
community activities that promote health. The site will include raised garden beds, a work area,
produce puck -up counter, and lunch tables. An on -site parking lot will be used on weekends as an
open-air market area. The micro -farm will host community workshops and events in line with the
mission of THRIVE Santa Ana.
EXHIBIT "C"
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
PERFORMANCE SCHEDULE
A. Days shall be calendar days, unless otherwise specified.
B. The City Manager is authorized by the City to make minor changes to the schedule
prior to the Project Completion Date resulting in an aggregate extension of the Project Completion
Date of ninety (90) calendar days or less.
C. All specific dates set forth in parentheses in this schedule are estimates only and
not binding on the Parties.
D. In the event of any conflict between this schedule and the Agreement, the terms and
provisions of the Agreement shall control.
E. All defined terms indicated by initial capitalization used in this schedule shall have
the meanings ascribed to the same terms in the Agreement.
Action
Date Action to 4e
Coin leted B
1.
Effective Date of Agreement
3.
Submission of updated Financial Pro Forma from Developer
to City
4.
Delivery of Due Diligence Completion Notice from Developer
to City
5.
Submittal of building permit application(s) from Developer to
City
6.
Issuance of building permit(s) by City
7.
Execution of Lease
8.
Groundbreaking ceremony
9.
Document Construction Financing, Permanent Financing, and
Evidence of Equity
10
Commencement of construction and installation of Project
11.
Submission of administrative request for extension of
construction deadline, if necessary, from Developer to City
Up to (1) additional
year
12.
Completion of construction and installation of Project
13.
Submission of Certificate of Completion from Developer to
city
One (1) year from
execution of DDA
14.
Issuance of Certificate of Occupancy by City
15. Grand opening ceremony
EXHIBIT "D"
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
DEVELOPER OFFICIAL ACTION
[To be attached behind this cover page]
CERTIFICATION OF CORPORATION AUTHORITY
THRIVE Santa Ana, hie., a 501(c)(3) tax exempt California public benefit corporation (the
"Corporation"), does certify that any one (1) of the following named persons:
are, authorized and empowered for and on behalf of and in the name of the Corporation to execute
and deliver that certain DISPOSITION AND DEVELOPMENT AGREEMENT , dated
(the "Agreement"), to lease certain property, generally, located at 1901 West Walnut
Street, Santa Ana, California, to perform the other obligations of the Corporation set forth in the
Agreement and all other documents to be executed in connection with the transactions
contemplated in the Agreement, and to take all actions that may be considered necessary to
conclude the transactions contemplated in the Agreement.
The authority conferred shall be considered retroactively, and any and all acts authorized in this
document that were performed before the execution of this certificate are approved and ratified.
The authority conferred shall continue in full force and effect until the City shall have received
notice in writing from the Corporation of the revocation of this certificate.
We fiuther certify that the activities covered by the foregoing certifications constitute duly
authorized activities of the Corporation; that these certifications are now in full force and effect;
and that there is no provision in any document under which the Corporation is organized and/or
that governs the Corporation's continued existence limiting the power of the undersigned to make
the certifications set forth in this certificate, and that the same are in conformity with the provisions
of all such documents.
Corporation:
EYA-HBIT "E"
TO
DISPOSITION AND DEVELOPMENT AGREEMENT
CITY LEASE
[Attached behind this cover page]
CITY OF SANTA ANA
GROUND LEASE
Community Micro -Farm Project at
1901 West Walnut Street, Santa Ana
THIS GROUND LEASE ("Lease") is dated as of , for reference
purposes only, and is entered into by and between the CITY OF SANTA ANA, a California charter
city in the County of Orange of the State of California ("Lessor"), and THRIVE Santa Ana, Inc.,
a 501(c)(3) tax exempt California public benefit corporation ("Tenant") (collectively, the
"Parties," and each a "Party"). The Parties enter into this Lease with reference to the following
recited facts (collectively, the "Recitals," and each a "Recital"):
RECITALS
A. Lessor owns that certain real property generally located at 1901 West Walnut
Street, Santa Ana, California 92703 (APN 007-332-08), and as more particularly described in the
Legal Description attached to this Lease as Exhibit "A" and incorporated herein by reference
("Premises").
B. Tenant proposes to develop a community micro -farm on the Premises. The term
"micro -farm" refers to a small space primarily used to cultivate crops in an urban or suburban
setting. Additionally, micro -farms are used to teach gardening and fanning skills to community
members. Tenant will use a comprehensive assessment of community needs to determine the
specific use of the Premises, as particularly described in the Project Description attached to this
Lease as Exhibit `B" and incorporated herein by reference ("Project").
C. On May 1, 2018, the Parties entered into an Exclusive Negotiation Agreement (No.
A-2018-117) to negotiate the potential future development of the Premises, but that original
Exclusive Negotiation Agreement expired on its own terms on April 26, 2019.
D. On September 17, 2019, the Parties entered into a Second Exclusive Negotiation
Agreement (No. N-2019-206) for the purpose of further planning and evaluating the feasibility of
the proposed Project.
E. The Parties entered into a Disposition and Development Agreement ("DDA") dated
March 3, 2020, incorporated herein by this reference, pursuant to which Lessor had agreed to lease
the Premises to Tenant upon the fulfillment of certain conditions precedent.
F. The proposed Project will result in the redevelopment of underutilized land,
development of a community micro -farm for the benefit of local residents, and increased
employment opportunities within the City produced by the Project.
G. Based on the reasons identified in Recital F, above, together with the commitments
and obligations of the Tenant to develop the Premises and operate the Project as contained in the
Page d
DDA and this Lease, Lessor has determined that the lease of the Premises to the Tenant for
development and operation of the Project in accordance with the DDA and this Lease is in the best
interest of the Lessor.
H. Lessor desires to lease the Premises, and the Tenant desires to enter into a lease of
the Premises for the purpose of development and operation of the Project on the Premises on the
terms and conditions set forth in the DDA and this Lease.
I. Lessor acknowledges that the conditions precedent required by the DDA have been
fulfilled and therefore the Parties desire that Tenant shall ground lease the Premises from Lessor
on the terms set forth herein.
J. Lessor and Tenant have jointly agreed to enter into this Lease as of the date set
forth above.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH THE PARTIES ACKNOWLEDGE, AND
PURSUANT TO THE PROMISES AND COVENANTS SET FORTH IN THIS AGREEMENT,
THE PARTIES AGREE, AS FOLLOWS:
ARTICLE I
DEFINITIONS
1.1 Definitions: The following defined terms used in this Lease shall have the meanings
set forth below. Other terms are defined in other provisions of this Lease, and shall have the
definitions given to such terms in such other provisions.
1.1.1. "Affiliate" shall mean, with respect to any person (which as used herein
includes an individual, trust or entity), any other person which directly or indirectly through one
or more intermediaries controls, or is controlled by, or is under common control with, such person.
1.1.2. "Aggregate Transfer" shall refer to the total "Ownership Interest(s)" in
Tenant transferred or assigned in one transaction or a series of related transactions (other than an
Excluded Transfer) occurring since the latest of (a) the Effective Date, (b) the execution by Tenant
of this Lease, or (c) the most recent Tenant Ownership Change; provided, however, that there shall
be no double counting of successive transfers of the same interest in the case of a transaction or
series of related transactions involving successive transfers of the same interest. Isolated and
unrelated transfers shall not be treated as a series of related transactions for purposes of the
definition of "Aggregate Transfer."
1.1.3. "Certificate of Occupancy" shall mean a temporary or final certificate of
occupancy (or other equivalent entitlement, however designated) which entitles Tenant to
commence normal operation and occupancy of the Improvements.
Page12
1.1.4. "City" or "Lessor" shall mean the City of Santa Ana, California, a charter
city and municipal corporation. "City Council' shall mean the City Council of the City of Santa
Ana.
1.1.5. "Claims" shall mean liens, claims, demands, suits, judgments, liabilities,
damages, fines, losses, penalties, costs and expenses (including without limitation reasonable
attorneys' fees and expert witness costs, and costs of suit), and sums reasonably paid in settlement
of any of the foregoing.
1.1.6. "Contractor" shall mean Tenant's general contractor for the construction of
the Improvements.
1.1.7. "County" shall mean the County of Orange, a political subdivision of the
State of California.
1.1.8. "Effective Date" is defined in the introductory paragraph to this Lease, and
shall be the date on which Tenant take possession of the Premises and is entitled to commence
construction pursuant to Article V, below.
1.1.9. "Event of Default" is defined in Section 11.1.
1.1.10. "Excluded Transfer" shall mean any of the following:
(a) A transfer by any direct or indirect partner, shareholder, or member of
Tenant (or of a limited partnership, corporation, or limited liability company that is a direct or
indirect owner in Tenant's ownership structure) as of the Effective Date or the date on which a
Tenant Ownership Change occurred as to the interest transferred, to any other direct or indirect
partner, shareholder, or member of Tenant (or of a limited partnership, corporation, or limited
liability company that is a direct or indirect owner in Tenant's ownership structure) as of the
Effective Date, including in each case to or from a trust for the benefit of the immediate family of
any direct or indirect partner or member of Tenant who is an individual;
(b) A transfer of an Ownership hrterest in Tenant or in constituent entities
of Tenant (i) to a member of the immediate family of the transferor (which for purposes of this
Lease shall be limited to the transferor's spouse, children, parents, siblings, and grandchildren);
(ii) to a trust for the benefit of a member of the immediate family of the transferor; (iii) from such
a trust or any trust that is an owner in a constituent entity of Tenant as of the Effective Date, to the
settlor or beneficiaries of such trust or to one or more other trusts created by or for the benefit of
any of the foregoing persons, whether any such transfer described in this subsection is the result
of gift, devise, intestate succession, or operation of law; or (iv) in connection with a pledge by any
partners or members of a constituent entity of Tenant to an affiliate of such partner or member;
(c) A transfer of a direct or indirect interest resulting from public trading in
the stock or securities of an entity, when such entity is a corporation or other entity whose stock
and/or securities is/are traded publicly on a national stock exchange or traded in the over-the-
Page13
counter market and the price for which is regularly quoted in recognized national quotation
services;
(d) A mere change in the form, method, or status of ownership (including,
without limitation, the creation of single -purpose entities) as long as the ultimate beneficial
ownership remains the same as of the Effective Date, or is otherwise excluded in accordance with
subsections (a) — (c) above;
(e) A transfer to an Affiliated nonprofit public benefit corporation or for -
profit corporation, or to a limited partnership whose general partner is a nonprofit corporation, for -
profit corporation or limited liability company Affiliated with the Tenant or the Tenant's general
partner, subject to the Lessor's right to approve the agreement to effect such assignment or transfer;
(f) The lease, assignment of lease or sublease of any individual residential
unit in the Improvements;
(g) A transfer of the Tenant's interest in the Premises by foreclosure or deed
in lieu of foreclosure to any bona fide third -party lender holding a lien encumbering the Premises
(or its nominee); or,
(h) Any assignment of the Lease by Tenant to an Affiliate of Tenant or to a
Mortgagee as security in which there is no change to the direct and indirect beneficial ownership
of the leasehold interest.
1.1.11. "Force Maj cure Event" is defined in Article XIV.
1.1.12. "Hazardous Material(s)" is defined in Section 4.5.
1.1.13. "Improvements" shall mean and includes all buildings (including above-
ground and below ground portions thereof, and all foundations and supports), building systems
and equipment (such as HVAC, electrical and plumbing equipment), physical structures, fixtures,
hardscape, paving, curbs, gutters, sidewalks, fences, landscaping and all other improvements of
any type or nature whatsoever now or hereafter made or constructed on the Premises. The term
Improvements shall mean the Initial Improvements and any replacement improvements
constructed in accordance with the terms of this Lease. During the entire Term, the Improvements
will be restricted to the allowed uses.
1.1.14. "Includes" shall mean "includes but is not limited to" and "including" shall
mean "including but is not limited to."
1.1.15. "Initial Improvements" shall mean the improvements first constructed by
Tenant on the Premises at its sole cost and expense.
1.1.16. "Interest Rate" shall mean the lower of: (a) the reference or prime rate of
U.S. Bank National Association, in effect from time to time plus three percent (3%); or (b) the
Page 14
highest rate of interest permissible under the Laws not to exceed the rate of twelve percent (12%)
per annum.
1.1.17. "Laws" shall mean all laws, codes, ordinances, statutes, orders and
regulations now or hereafter made or issued by any federal, state, county, local or other
governmental agency or entity that are binding on and applicable to the Premises and
Improvements.
1.1.18. "Lease" shall mean this Ground Lease (including any and all addenda,
amendments and exhibits hereto), as now or hereafter amended.
1.1.19. "Lender" shall mean: (a) a bank, savings bank, investment bank, savings
and loan association, mortgage company, insurance company, trust company, commercial credit
corporation, real estate investment trust, pension trust or real estate mortgage investment conduit;
or (b) some other type of lender engaged in the business of making commercial loans, provided
that such other type of lender has total assets of at least $2,000,000 and capital/statutory surplus
or shareholder's equity of at least $500,000,000 (or a substantially similar financial capacity if the
foregoing tests are not applicable to such type of lender); or (c) a local, state or federal
governmental entity, which provides predevelopment, construction and/or permanent financing
for Tenant's development of the Property.
1.1.20. "Lessor's Interest" shall mean all of Lessor's interests in the real property,
the Premises, this Lease and its existing interest in the real property, Premises, as well as the
Improvements upon the expiration of the Term or earlier termination thereof.
1.1.21. "Lessor Parties" shall mean, collectively and individually, the City and its
respective Affiliates, governing boards, agents, employees, members, officers, directors and
attorneys.
1.1.22. "Limited Partner" shall mean any limited partner or investor member (and
its successors and/or assigns) of Tenant and shall include all references to "investor" in this Ground
Lease.
1.1.23. "Ownership Interests" shall mean the share(s) of stock, partnership
interests, membership interests, other equity interests or any other direct or indirect ownership
interests in Tenant, regardless of the form of ownership and regardless of whether such interests
are owned directly or through one or more layers of constituent partnerships, corporations, limited
liability companies, or trusts.
1.1.24. "Person" shall include firms, associations, partnerships, joint ventures,
trusts, corporations and other legal entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.
1.1.25. "Premises" or "Property" shall mean that certain real property containing
undeveloped land in the City, together with all easements, rights and privileges appurtenant
Page15
thereto, to be leased to Tenant pursuant to this Lease and on which Tenant intends to construct the
Improvements. The legal description of the Premises is attached hereto as Exhibit A.
1.1.26. "Project" shall mean the Improvements, and all related appurtenances,
constructed by Tenant on the Premises.
1.1.27. "Rent" shall mean one dollar and zero cents ($1.00) per month, pursuant to
the terms and conditions of this Lease, due and payable from Tenant to Lessor for lease of the
Premises to the Tenant for the Project.
1.1.28. "Risk Manager" shall mean the Risk Manager for the City, or designee, or
upon written notice to Tenant, such other person as may be designated by the City Council.
1.1.29. "Tenant Ownership Change" shall mean (a) any transfer or assignment by
Tenant of the Leasehold Estate or (b) any "Aggregate Transfer" of at least twenty five percent
(25%) of the "Ownership Interest(s)" in Tenant, in each case that is not an "Excluded Transfer."
1.1.30. "Term" is defined in Section 2.2.
1.1.31. "Transfer" is defined in Section 10.1.
1.1.32. "Transfer Notice" is defined in Section 10.4.
1.1.33. "Work" shall mean both Tenant's construction activity with respect to the
Improvements, including permitted future changes, alterations and renovations thereto and also
including, without limiting the generality of the foregoing, site preparation, landscaping,
installation of utilities, street construction or improvement and grading or filling in or on the
Premises.
ARTICLE II
LEASE OF PROPERTY
2.1 Lease of Premises.
2.1.1. Lessor hereby leases the Premises to Tenant for the Term, and Tenant hereby
leases the Premises from Lessor for the Term, subject to the terms, conditions, covenants,
restrictions and reservations of this Lease.
2.1.2. Warranty of Peaceful Possession. Lessor covenants and warrants that,
subject to the Tenant's payment of Rent and performance and observation of all of the covenants,
obligations and agreements herein contained and provided to Tenant, Tenant shall and may
peaceably and quietly have, hold, occupy, use and enjoy the Premises during the Term and may
exercise all of its rights hereunder. Except as otherwise set forth herein, the Lessor covenants and
agrees that it shall not grant any mortgage or lien on or in respect of its fee interest in the Premises
unless the same is expressly subject and subordinate to this Lease.
Page16
2.2 Term. The "Term" of this Lease shall commence on the Effective Date of this Lease,
and shall expire at 12:00 midnight Pacific Standard Time on the 99`s anniversary of the Effective
Date, unless sooner terminated as a result of Tenant's non-compliance with any terms, conditions,
covenants, restrictions or reservations of this Lease.
2.3 Termination at End of Term. This Lease shall terminate without need of further
actions of any Party at 12:00 midnight Pacific Standard Time on the last day of the Term.
2.4 Condition of the Premises. TENANT HEREBY ACCEPTS THE PREMISES "AS
IS", AND ACKNOWLEDGES THAT THE PREMISES IS IN SATISFACTORY
CONDITION. LESSOR MAKES NO WARRANTY, IMPLIED OR OTHERWISE, AS TO
THE SUITABILITY OF THE PREMISES FOR TENANT'S PROPOSED USES. LESSOR
MAKE NO COVENANTS OR WARRANTIES, IMPLIED OR OTHERWISE,
RESPECTING THE CONDITION OF THE SOIL, SUBSOIL, OR ANY OTHER
CONDITIONS OF THE PREMISES OR THE PRESENCE OF HAZARDOUS
MATERIALS, NOR DOES LESSOR COVENANT OR WARRANT, IMPLIED OR
OTHERWISE, AS TO THE SUITABILITY OF THE PREMISES FOR THE PROPOSED
DEVELOPMENT, CONSTRUCTION OR USE BY TENANT. LESSOR SHALL NOT BE
RESPONSIBLE FOR ANY LAND SUBSIDENCE, SLIPPAGE, SOIL INSTABILITY OR
DAMAGE RESULTING THEREFROM. LESSOR SHALL NOT BE REQUIRED OR
OBLIGATED TO MAKE ANY CHANGES, ALTERATIONS, ADDITIONS,
IMPROVEMENTS OR REPAIRS TO THE PREMISES. TENANT SHALL RELY ON ITS
OWN INSPECTION AS TO THE SUITABILITY OF THE PREMISES FOR THE
INTENDED USE.
TENANT INITIALS:
2.5 Limitations of the Leasehold. This Lease and the rights and privileges granted Tenant
in and to the Premises are subject to all covenants, conditions, restrictions, and exceptions of record
as of the date hereof or otherwise disclosed to Tenant prior to the date hereof. Nothing contained
in this Lease or in any document related hereto shall be construed to imply the conveyance to
Tenant of rights in the Premises which exceed those owned by Lessor, or any representation or
warranty, either express or implied, relating to the nature or condition of the Premises or Lessor's
interest therein.
2.6 Tenant's Investigation. Tenant acknowledges that it is solely responsible for
investigating the Premises to determine the suitability thereof for the uses contemplated by Tenant.
Tenant fuuther acknowledges by executing this Lease that it has completed its investigation and
has made such determinations as Tenant believes may be required under the circumstances.
2.7 Option to Purchase. Lessor grants Tenant the exclusive right to an option to purchase
("Option") the Property herein, for a gross sales price equal to a negotiated fair market value, based
on an appraisal to be conducted by the Lessor, throughout the term of this lease, or if the lease is
earlier terminated, at that time. Tenant shall notify Lessor in writing, prior to the termination date
of the Lease Agreement, of Tenant's intent to exercise the Option. When exercising the Option,
Tenant shall also deposit with Lessor the sum of $5,000 as a deposit towards the appraisal, escrow
Page17
fees and purchase price of the premises. Upon exercise of this Option by Tenant, a closing shall
take place within 60-days after City Council approval of a purchase agreement. Before the closing
date, Tenant shall provide evidence of financing to purchase the Property. In the event., Tenant's
reasonable efforts were unable to procure financing, the deposit shall be retained by the Lessor as
liquidated damages. Whether or not the sale of the Property successfully closes, all expenses
relating to the sale and to the closing, including, but not limited to, all appraisal and escrow fees,
shall be borne by Tenant. Notwithstanding the forgoing, the City reserves the right to make a
determination as to the validity of this Option, and to exercise this Option, in accordance with all
laws and regulations prior to authorizing a purchase agreement.
ARTICLE III
3.1 Rent. Throughout the ninety-nine (99) year Term of this Lease, regardless of an earlier
termination date, Lessor shall lease the Premises to the Tenant for the Project, and the Tenant shall
accept the lease of the Premises from the Lessor, at a Rent of one dollar and zero cents ($1.00) per
month, pursuant to the terms and conditions of this Lease.
3.2 Triple Net Rent. It is the intent of the Parties that all Rent shall be absolutely net to
Lessor and that, except as otherwise provided herein, Tenant will pay all costs, charges, insurance
premiums, taxes, utilities, expenses and assessments of every kind and nature ("Tenant Costs")
incurred for, against or in connection with the Premises which arise or become due during the
Term as a result of Tenant's use and occupancy of the Premises. Tenant shall pay all Tenant Costs
during the Tenn prior to delinquency. Tenant agrees to indemnify and hold harmless Lessor
against any liability, claim, or demand for the late payment or non-payment of any Tenant Costs.
Under no circumstances or conditions, whether now existing or hereafter arising, or whether
beyond the present contemplation of the Parties, shall Lessor be obligated or required to make any
payment of any kind whatsoever or be under any other obligation or liability under this Lease
except as expressly provided herein.
3.3 Insufficient Funds. If any payment of Rent or other fees made by check is returned
due to insufficient funds or otherwise, Lessor shall have the right to require Tenant to make all
subsequent Rent payments by cashier's check, certified check or automated clearing house debit
system. All Rent or other fees shall be paid in lawful money of the United States of America,
without offset or deduction or prior notice or demand. No payment by Tenant or receipt by Lessor
of a lesser amount than the Rent or other fees due shall be deemed to be other than on account of
the Rent or other fees due, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as rent be deemed an accord and satisfaction, and Lessor
shall accept such check or payment without prejudice to Lessor's right to recover the balance of
the Rent or other fees or pursue any other remedy available to the Lessor in this Lease.
Page18
ARTICLE IV
USE OF PREMISES
4.1 Permitted Use of Premises. Tenant may use the Premises for the construction,
development, entitlement, operation, maintenance, replacement and repair of the Improvements as
follows:
4.1.1. Required Services and Uses. Tenant intends to use the Property pursuant
to the Project Description attached to this Agreement as Exhibit `B". During the pre -development
and construction timeframe, the use of the Property shall include special events planned by Tenant,
only upon prior approval by the City. After the completion of construction, the certificate of
occupancy issued by the City shall govern the allowable uses on the Property, which shall include
micro -farm and ancillary secondary uses. Any request by Tenant to change the Project or use of
the Property shall be subject to all applicable City review procedures and Approvals.
4.1.2. Ancillary Services and Uses. Subject to the prior written approval of
Lessor, which approval may be granted or withheld in the sole discretion of the Lessor, Tenant
may provide those additional services and uses which are ancillary to and compatible with the
required services and uses set forth in Section 4.1. L, above.
4.1.3. Restricted Use. The services and uses listed in this Section 4.1, both
required and optional, shall be the only services and uses permitted. Tenant agrees not to use the
Premises for any other purpose or engage in or permit any other activity within or from the
Premises unless approved in writing by the Lessor, which approval may be granted or withheld in
the sole discretion of the Lessor.
4.1.4. Continuous Use. During the Term, Tenant shall continuously conduct
Tenant's business in the Premises in the manner provided under this Lease and shall not
discontinue use of the Premises for any period of time except in the case of a Force Maj cure Event
or as permitted in advance and in writing by the Lessor.
4.1.5. Alcohol Restrictions. The sale or service of alcoholic beverages on the
premises shall only be allowed if in compliance with all applicable federal, state, and City statutes,
regulations, rules and ordinances, including, but not limited to, appropriate approvals of the
California Department of Alcoholic Beverage Control and the Santa Ana Planning and Building
Agency..
4.1.6. Permits and Licenses. Tenant shall be solely responsible to obtain, at its
sole cost and expense, any and all permits, licenses or other approvals required for the uses
permitted herein and shall maintain such permits, licenses or other approvals for the entire Term.
4.2 Nuisance; Waste. Tenant shall not maintain, commit, or permit the maintenance or
commission of any nuisance as now or hereafter defined by any statutory or decisional law
applicable to the Premises and improvements or any part thereof. Tenant shall not commit or
allow to be committed any waste in or upon the Premises or Improvements and shall keep the
Premises and the hmprovements thereon in good condition, repair and appearance.
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4.3 Compliance with Laws. Tenant shall not use or permit the Premises or the
Improvements or any portion thereof to be used in any manner or for any purpose that violates any
applicable Laws. Tenant shall have the right to contest, in good faith, any such Laws, and to delay
compliance with such Laws during the pendency of such contest (so long as there is no material
threat to life, health or safety that is not mitigated by Tenant to the satisfaction of the applicable
authorities). Lessor may cooperate with Tenant in all reasonable respects in such contest,
including joining with Tenant in any such contest if Lessor's joinder is required in order to
maintain such contest; provided, however, that any such contest shall be without cost to Lessor,
and Tenant shall indemnify, defend (with attorneys acceptable to Lessor), and hold harmless the
Lessor from any and all claims, liabilities, losses, damages, or actions of any kind and nature,
including reasonable attorneys' fees, arising or related to Tenant's failure to observe or comply
with the contested Law during the pendency of the contest.
4.4 Hazardous Materials.
4.4.1. Definition of Hazardous Materials. For purposes of this Lease, the term
"Hazardous Material" or "Hazardous Materials" shall mean any hazardous or toxic substance,
material, product, byproduct, or waste, which is or shall become regulated by any governmental
entity, including, without limitation, the Lessor acting in its governmental capacity, the State of
California or the United States government.
4.4.2. Use of Hazardous Materials. Except for those Hazardous Materials which
are customarily used in connection with the construction, operation, maintenance and repair of the
Improvements or used in connection with any permitted use of the Premises and Improvements
under this Lease (which Hazardous Materials shall be used in compliance with all applicable
Laws), Tenant or Tenant's employees, agents, independent contractors or invitees (collectively
"Tenant Parties") shall not cause or permit any Hazardous Materials to be brought upon, stored,
kept, used, generated, released into the environment or disposed of on, under, from or about the
Premises (which for purposes of this Section shall include the subsurface soil and ground water).
4.4.3. Tenant Obligations. If the presence of any Hazardous Materials on, under
or about the Premises caused or permitted by Tenant or Tenant Parties, and excluding Hazardous
Materials existing on the Premises prior to the Effective Date (the "Existing Hazardous
Materials"), results in (i) injury to any person, (ii) injury to or contamination of the Premises (or
a portion thereof), or (iii) injury to or contamination or any real or personal property wherever
situated, Tenant, at its sole cost and expense, shall promptly take all actions necessary or
appropriate to return the Premises to the condition existing prior to the introduction of such
Hazardous Materials to the Premises and to remedy or repair any such injury or contamination.
Without limiting any other rights or remedies of Lessor under this Lease, Tenant shall pay the cost
of any cleanup or remedial work performed on, under, or about the Premises as required by this
Lease or by applicable Laws in connection with the removal, disposal, neutralization or other
treatment of such Hazardous Materials caused or permitted by Tenant or Tenant Parties, excluding
any Existing Hazardous Materials. Notwithstanding the foregoing, Tenant shall not take any
remedial action in response to the presence, discharge or release, of any Hazardous Materials on,
under or about the Premises caused or permitted by Tenant or Tenant Parties, or enter into any
settlement agreement, consent decree or other compromise with any governmental or quasi -
governmental entity without fast obtaining the prior written consent of the Lessor. All work
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performed or caused to be performed by Tenant as provided for above shall be done in good and
workmanlike manner and in compliance with plans, specifications, permits and other requirements
for such work approved by Lessor.
4.4.4. Indemnification for Hazardous Materials.
(a) To the fullest extent permitted by law, Tenant hereby agrees to
indemnify, hold harmless, protect and defend (with attorneys acceptable to Lessor) Lessor, its
elected officials, officers, employees, agents, independent contractors, and the Premises, from and
against any and all liabilities, losses, damages (including, but not limited, damages for the loss or
restriction on use of rentable or usable space or any amenity of the Premises or damages arising
from any adverse impact on marketing and diminution in the value of the Premises), judgments,
fines, demands, claims, recoveries, deficiencies, costs and expenses (including, but not limited to,
reasonable attomeys' fees, disbursements and court costs and all other professional or consultant's
expenses), whether foreseeable or unforeseeable (collectively, "Liabilities"), arising out of the
presence, use, generation, storage, treatment, on or off -site disposal or transportation of Hazardous
Materials on, into, from, under or about the Premises by Tenant or Tenant Parties, and excluding
all Existing Hazardous Materials.
(b) The foregoing indemnity shall also specifically include the cost of any
required or necessary repair, restoration, clean-up or detoxification of the Premises and the
preparation of any closure or other required plans.
(c) The foregoing indemnity and defense obligations of this Lease shall
survive its expiration or termination; provided, however, that the indemnity contained in this
Section 4.4.4 shall not apply to any Liabilities arising or occurring (a) prior to the Effective Date
of this Ground Lease, (b) after the expiration or earlier termination of the Term of this Ground
Lease, or (c) as a result of the grossly negligent or wrongful acts or omissions of Lessor.
4.5 Access by Lessor. Lessor reserves the right for its authorized representatives to enter
the Premises upon two (2) business days' prior written notice to Tenant, during normal business
hours, in order to determine whether Tenant is complying with Tenant's obligations hereunder, or
to enforce any rights given to Lessor under this Lease. Lessor and its representatives shall report
to the Tenant's on -site office and must be accompanied by a representative of Tenant at all times
while on the Property and obey Tenant's rules and regulations. Tenant acknowledges Lessor has
the authority to enter the Premises and perform work on the Premises at any time as needed to
provide immediate or necessary protection for the general public. Lessor will take all necessary
measures not to unreasonably interfere with Tenant's business at the Premises in exercising its
rights under this Section.
Lessor shall indemnify and hold Tenant harmless from and against any loss, cost, damage or
liability, including, without limitation, attorneys' fees, which results from Lessor's willful
misconduct or gross negligence, or willful misconduct or gross negligence committed by any party
acting under Lessor's authority, of the rights granted by this Section 4.5.
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ARTICLE V
CONSTRUCTION OF IMPROVEMENTS
5.1 Construction of Improvements.
5.1. L Initial Improvements. Upon the fulfillment of the Preconditions set forth
in Section 5.1.2, below, and payment for and issuance of all permits required under the Laws
(whether from Lessor in its governmental capacity, or otherwise), Tenant shall construct the Initial
Improvements.
5.1.2. Preconditions. No work for development of the Initial Improvements shall
be commenced, and no building or other materials shall be delivered to the Premises, until:
(a) Lessor has provided approval in writing that all the conditions set forth
in Section 3.1 of the DDA have been satisfied;
(b) Tenant has obtained a permit through the City, submitted Project design,
conceptual development, plans and special provisions for the construction of Improvements in
accordance with the Lessor's criteria, standard and practices;
(c) Tenant has given Lessor written notice of the proposed commencement
of construction of the Premises or the delivery of construction materials in order to allow Lessor
to take all necessary actions under California Civil Code section 3094, including posting of a notice
of non -responsibility at the Premises; and
(d) Tenant has provided to Lessor evidence that (i) Tenant has entered into
a Construction Contract with a Contractor in accordance with Section 5.2 below, (ii) Tenant has
secured the construction funding required under Section 5.1.4 below, and (iii) Tenant has provided
Lessor with assurances sufficient to construct the Initial Improvements in accordance with Section
5.3 below.
5.1.3. Utilities. To the extent not already constructed, Tenant, at no cost to Lessor,
shall construct or cause to be constructed all water, gas, heat, light, power, air conditioning,
telephone, broadband internet, and other utilities and related services supplied to and/or used on
the Premises at Tenant's sole cost and expense for the purposes of conducting Tenant's operations
thereon. All such utilities shall be separately metered from any utilities which may be used by
Lessor in conducting its operations, if any, on or about the Premises. Nothing contained in this
Section is to be construed or implied to give Tenant the right or permission to install or to permit
any utility poles or communication towers to be constructed or installed on the Premises.
5.1.4. Construction Funding. Prior to commencement of construction of the
Initial Improvements, Tenant shall provide to Lessor evidence reasonably satisfactory to Lessor of
funding available to Tenant that is sufficient to pay for Tenant's estimated total cost of constructing
the Initial Improvements, which evidence may consist of (i) a written commitment to Tenant from
a Lender selected by Tenant to provide a construction loan to Tenant for the purpose of
constructing the Initial Improvements (which may be secured by a Leasehold Mortgage
encumbering Tenant's leasehold interest under this Lease), (ii) actual equity funds then held by
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Tenant or irrevocably committed to be paid to Tenant for the purpose of constructing the Initial
Improvements, or (iii) any combination of the foregoing. Tenant may from time to time change
any of the foregoing funding sources and the allocation thereof, so long as the aggregate available
funding continues to be sufficient to pay for Tenant's estimated remaining cost of constructing the
Initial Improvements, provided that Tenant shall promptly notify Lessor of any such change.
5.1.5. Compliance with Laws and Permits. Tenant shall cause all Improvements
made by Tenant to be constructed in substantial compliance with all applicable Laws, including
all applicable grading permits, building permits, and other permits and approvals issued by
governmental agencies and bodies having jurisdiction over the construction thereof. No permit,
approval, or consent given hereunder by Lessor, in its governmental capacity, shall affect or limit
Tenant's obligations hereunder, nor shall any approvals or consents given by Lessor, as a Party to
this Lease, be deemed approval as to compliance or conformance with applicable governmental
codes, laws, rules, or regulations.
5.1.6. Reports. Not less than monthly from the commencement of construction of
the Initial Improvements, Tenant shall provide Lessor with written construction status reports in
the form of AIA No. G702 ("Application and Certification for Payment") or comparable form,
augmented by oral reports if so requested by Lessor.
5.1.7. Certificate of Occupancy. Tenant shall provide Lessor with a copy of the
Certificate of Occupancy promptly following issuance thereof.
5.1.8. Insurance. Tenant shall deliver to Lessor both (i) certificates of insurance
evidencing required coverage as specified in Section 8.1, and (ii) evidence of worker's
compensation insurance, which provide the requisite insurance levels in accordance with Article
VIII, for all persons employed in connection with the construction of any Improvements upon the
Premises and with respect to whom death or bodily injury claims could be asserted against Lessor
or the Premises. Tenant shall (or shall cause Contractor to) maintain, keep in force and pay all
premiums required to maintain and keep in said insurance herein at all times during which
construction Work is in progress.
5.1.9. Mechanic's Liens.
(a) Payment of Liens. Tenant shall pay or cause to be paid the total cost
and expense of all "Work of Improvement," as that phrase is defined in the California Mechanics'
Lien law in effect and as amended from time to time. Tenant shall not suffer or permit to be
enforced against the Premises or Improvements or any portion thereof, any mechanics',
materialmen's, contractors' or subcontractors' liens arising from any work of improvement,
however it may arise. Tenant may, however, in good faith and at Tenant's sole cost and expense
contest the validity of any such asserted lien, claim, or demand, provided Tenant (or any contractor
or subcontractor, as applicable) has furnished the release bond (if required by Lessor or any
construction lender) required in California Civil Code section 8000 et seq. (or any comparable
statute hereafter enacted for providing a bond freeing the Premises from the effect of such lien
claim). In the event a lien or stop -notice is imposed upon the Premises as a result of such
construction, repair, alteration, or installation, and provided the lien is not the result of actions of,
or work performed by, the Lessor, Tenant shall either:
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(1) Record a valid Release of Lien, or
(2) Procure and record a bond in accordance with Section 8424 of
the Civil Code, which releases the Premises from the claim of the lien or stop -notice and from any
action brought to foreclose the lien, or
(3) Post such security as shall be required by Tenant's title insurer
to insure over such lien or stop -notice, or
(4) Should Tenant fail to accomplish either of the three optional
actions above within 30 days after Tenant receives notice of the filing of such a lien or stop -notice,
it shall constitute an Event of Default hereunder.
(b) Indemnification. Tenant shall at all times indemnify, defend with
counsel approved in writing by Lessor and hold Lessor harmless from all claims, losses, demands,
damages, cost, expenses, or liability costs for labor or materials in connection with construction,
repair, alteration, or installation of structures, improvements, equipment, or facilities within the
Premises, and from the cost of defending against such claims, including reasonable attorneys' fees
and costs, but excluding any liability resulting from the gross negligence or willful misconduct of
Lessor, and excluding any liens resulting from the actions of, or work performed by, the Lessor.
(c) Protection Against Liens. Lessor shall have the right to post and
maintain on the Premises any notices of non -responsibility provided for under applicable
California law. During the course of construction, Tenant shall obtain customary mechanics' lien
waivers and releases. Upon completion of the construction of any Improvements, Tenant shall
record a notice of completion in accordance with applicable law. Promptly after the Improvements
have been completed, Tenant shall (or shall cause Contractor to) record a notice of completion as
defined and provided for in California Civil Code section 8000 et seq.
(d) Lessor's Rights. If Tenant (or any contractor or subcontractor, as
applicable) does not cause to be recorded the bond described in California Civil Code section 8000
et seq. or otherwise protect the Premises and Improvements under any alternative or successor
statute, and a final judgment has been rendered against Tenant by a court of competent jurisdiction
for the foreclosure of a mechanic's, materialman's, contractor's or subcontractor's lien claim, and
if Tenant fails to stay the execution of judgment by lawful means or to pay the judgment, Lessor
shall have the right, but not the duty to pay or otherwise discharge, stay or prevent the execution
of any such judgment or lien or both. Upon any such payment by Lessor, Tenant shall immediately
upon receipt of written request therefor by Lessor, reimburse Lessor for all sums paid by Lessor
under this paragraph together with all Lessor's reasonable attorney's fees and costs, plus interest
at the Interest Rate from the date of payment until the date of reimbursement.
5.1.10. No Responsibility. Any approvals by Lessor with respect to any
Improvements shall not make Lessor responsible for the Improvement with respect to which
approval is given or the construction thereof. Tenant shall indemnify, defend and hold Lessor
harmless from and against all liability and all claims of liability (including, without limitation,
reasonable attorneys' fees and costs) arising during the Term of this Lease for damage or injury to
persons or property or for death of persons arising from or in connection with the Improvement or
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construction thereof, but excluding any liability resulting from the gross negligence or willful
misconduct of Lessor, and excluding any liens resulting from the actions of, or work performed
by, the Lessor.
5.2 Prevailing Wages.
5.2.1 THE TENANT AGREES WITH THE CITY THAT THE TENANT SHALL
ASSUME ANY AND ALL RESPONSIBILITY AND BE SOLELY RESPONSIBLE FOR
DETERMINING WHETHER OR NOT LABORERS EMPLOYED RELATIVE TO THE
CONSTRUCTION OR INSTALLATION OF THE PROJECT MUST BE PAID THE
PREVAILING PER DIEM WAGE RATE FOR THEIR LABOR CLASSIFICATION, AS
DETERMINED BY THE STATE, PURSUANT TO LABOR CODE SECTIONS 1720, ET SEQ.
5.2.2 THE TENANT, ON BEHALF OF ITSELF, ITS SUCCESSORS, AND
ASSIGNS, WAIVES AND RELEASES THE CITY FROM ANY RIGHT OF ACTION THAT
MAY BE AVAILABLE TO ANY OF THEM PURSUANT TO LABOR CODE SECTION 1781.
THE TENANT ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542
RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS SECTION 4.8,
WHICH READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.
5.2.3 BY INITIALING BELOW, THE TENANT KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 4:
Initials of Authorized
Tenant Representative
5.2.4 ADDITIONALLY, THE TENANT SHALL INDEMNIFY, DEFEND AND
HOLD HARMLESS THE CITY AGAINST ANY CLAIMS PURSUANT TO LABOR CODE
SECTION 1781 ARISING FROM THIS AGREEMENT OR THE CONSTRUCTION OR
INSTALLATION OF ALL OR ANY PORTION OF THE PROJECT.
5.3 Tenant's Assurance of Construction Completion. Prior to commencement of
construction of the Initial Improvements, or any phase thereof, within the Premises by Tenant,
Tenant shall furnish to Lessor evidence that assures Lessor that sufficient monies will be available
to complete the proposed construction. The amount of money available shall be at least the total
estimated construction cost. Such evidence may take one of the following forms:
5.3.1. Performance bond and labor and materials bond in a principal sum equal to
the total estimated construction cost supplied by Contractor or subcontractors-
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5.3.2. Irrevocable letter of credit issued to Lessor from a financial institution.
5.3.3. Cash deposited with the Lessor (may be in the form of cashier's check or
money order or may be electronically deposited);
5.3.4. A completion guaranty, in favor of Lessor from an Affiliate of Tenant, in a
form reasonably acceptable to Lessor, coupled with a repayment guaranty in favor of the senior
construction lender for its loan;
5.3.5. Any combination of the above.
All bonds and letters of credit must be issued by a company qualified to do business in the State
of California and acceptable to Lessor. All bonds and letters of credit shall be in a form acceptable
to Lessor, and Lessor's Risk Manager in their reasonable discretion, and shall insure faithful and
full observance and performance by Tenant of all terms, conditions, covenants, and agreements
relating to the construction of improvements within the Premises.
Tenant shall provide or cause its Contractor to provide payment and/or performance bonds in
connection with the construction of the Initial Improvements, and shall name the Lessor as an
additional obligee on, with the right to enforce, any such bonds.
5.4 Ownership of Improvements.
5.4.1. For purposes of this Section 5.4, "Term" shall have the meaning stated in
Section 2.2
5.4.2. During Term. Title to all Improvements constructed or placed on the
Premises by Tenant and paid for by Tenant are and shall be vested in Tenant during the Term of
this Lease, until the expiration or earlier termination thereof. Any and all depreciation,
amortization and tax credits for federal or state purposes relating to the Improvements located on
the Premises and any and all additions thereto shall be deducted or credited exclusively by Tenant
during the Term. The Parties agree for themselves and all persons claiming under them that the
Improvements are real property.
5.4.3. Upon Expiration or Earlier Termination of Term. All Improvements on
the Premises at the expiration or earlier termination of the Term of this Lease shall, without
additional payment to Tenant, then become Lessor's property free and clear of all claims to or
against them by Tenant and free and clear of all Leasehold Mortgages and any other liens and
claims arising from Tenant's use and occupancy of the Premises, and with taxes paid current as of
the expiration or earlier termination date. Tenant shall upon the expiration or earlier termination
of the Tenn deliver possession of the Premises and the Improvements to Lessor in good order,
condition and repair consistent with the requirements of this Lease and in compliance with all
applicable laws and regulations for the occupancy of the Project, taking into account reasonable
wear and tear and the age of the improvements.
5.5 "AS -BUILT" Plans. Within sixty (60) days following completion of any substantial
improvement within the Premises, Tenant shall furnish to Lessor a complete set of reproducibles
and two sets of prints of "As -Built" plans and a magnetic tape, disk or other storage device
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containing the "As -Built" plans in a form usable by Lessor, to Lessor's satisfaction, on Lessor's
computer aided mapping and design ("CAD") equipment. CAD files are also to be converted to
Acrobat Reader (pdf format), which shall be included on the disk or CD ROM. hi addition, Tenant
shall furnish Lessor copy of the final construction costs for the construction of such improvements.
ARTICLE VI
REPAIRS, MAINTENANCE, ADDITIONS AND RECONSTRUCTION
6.1 Maintenance by Tenant. Throughout the Term of this Lease, Tenant shall, at Tenant's
sole cost and expense, keep and maintain the Premises and any and all Improvements now or
hereafter constructed and installed on the Premises in good order, condition and repair (i.e., so that
the Premises does not deteriorate more quickly than its age and reasonable wear and tear would
otherwise dictate) and in a safe and sanitary condition and in compliance with all applicable Laws
in all material respects. Tenant shall immediately notify the Lessor of any damage relating to the
Premises.
6.2 Interior Improvements, Additions and Reconstruction of Improvements.
Following the completion of construction of the Initial Improvements, Tenant shall have the right
from time to time to make any interior improvements to the Improvements that are consistent with
the Lessor's approved use of the Premises as reflected in this Lease, without Lessor's prior written
consent, but with prior written notice to the Lessor (except in the event of an emergency, in which
case no prior written notice shall be required but Tenant shall notify Lessor of any emergency
work done as soon as practicable). With prior written approval of Lessor, Tenant may restore and
reconstruct the Improvements, and in that process make any modifications otherwise required by
changes in Laws, following any damage or destruction thereto (whether or not required to do so
under Article VII); and/or to make changes, revisions or improvements to the Improvements for
uses consistent with the Lessor approved use of the Premises as reflected in this Lease. Tenant
shall perform all work authorized by this Section at its sole cost and expense, including, without
limitation, with insurance proceeds approved for such use in accordance with Article VII, if any,
and in compliance with all applicable Laws in all material respects.
6.3 All Other Construction, Demolition, Alterations, Improvements and
Reconstruction. Following the completion of construction of the Initial Improvements, and
except as specified in Sections 6.1 and 6.2, any construction, alterations, additions, major repairs,
demolition, improvements or reconstruction of any kind shall require the prior written consent of
the Lessor. Tenant shall perform all work authorized by this Section at its sole cost and expense,
including, without limitation, with insurance proceeds approved for such use in accordance with
Article VII, if any, and in compliance with all applicable Laws in all material respects.
6.4 Requirements of Governmental Agencies. At all times during the Term of this Lease,
Tenant, at Tenant's sole cost and expense, shall: (i) make all alterations, improvements,
demolitions, additions or repairs to the Premises and/or the Improvements required to be made by
any law, ordinance, statute, order or regulation now or hereafter made or issued by any federal,
state, county, local or other governmental agency or entity; (ii) observe and comply in all material
respects with all Laws now or hereafter made or issued respecting the Premises and/or the
Improvements; (iv) indemnify, defend and hold Lessor, the Premises and the Improvements free
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and harmless from any and all liability, loss, damages, fines, penalties, claims and actions resulting
from Tenant's failure to comply with and perform the requirements of this Article VI.
6.5 Lessor Obligations. Tenant specifically acknowledges and agrees that Lessor and
Lessor Parties do not and shall not have any obligations with respect to the maintenance, alteration,
improvement, demolition, replacement, addition or repair of any Improvements.
6.6 Lessor Reservations. Without limiting Lessor's rights with respect to the Premises,
Lessor reserves for itself, its successors and assigns those rights necessary to assure proper
maintenance and operation of the Premises and to permit any steps to be taken which the Lessor
deems necessary or desirable to maintain, repair, improve, modify or reconstruct the Premises.
The rights reserved to Lessor in this section or any other section of this Lease shall be exercised
by the Lessor at its sole discretion, unless otherwise provided herein.
ARTICLE VII
DAMAGE AND RESTORATION
7.1 Damage and Restoration. hi the event the whole or any part of the Improvements
shall be damaged or destroyed by fire or other casualty, damage or action of the elements which
is fully covered by insurance required to be carried by Tenant pursuant to this Lease or in fact
caused by Tenant, at any time during the Term, Tenant shall with all due diligence, at Tenant's
sole cost and expense, repair, restore and rebuild the Improvements on substantially the same plan
and design as existed immediately prior to such damage or destruction and to substantially the
same condition that existed immediately prior to such damage, with any changes made by Tenant
to comply with then applicable Laws and with any upgrades or improvements that Tenant may
determine in its reasonable discretion. If Tenant desires to change the use of the Premises
following such casualty, then Tenant may make appropriate changes to the Premises to
accommodate such changed use after approval of such change of use by the Lessor pursuant to
Article IV above. This Article shall not apply to cosmetic damage or alterations. hi the event that
Tenant shall determine, by notice to the Lessor given by the later of ninety (90) days after the date
of the damage or destruction or thirty (30) days after receipt by Tenant of any such insurance
proceeds, that there are not adequate proceeds to restore the Improvements and/or the Premises to
substantially the same condition in which they existed prior to the occurrence of such damage or
destruction, then Tenant may terminate this Lease as of a date that is not less than thirty (30) days
after the date of such notice. If Tenant tenninates this Lease pursuant to this Section 7.1, Tenant
shall surrender possession of the Premises to the Lessor immediately and assign to the Lessor (or,
if same has already been received by Tenant, pay to the Lessor) all of its right, title and interest in
and to the proceeds from Tenant's insurance upon the Premises.
7.2 Restoration. In the event of any restoration or reconstruction pursuant to this Section,
all such work performed by Tenant shall be constructed in a good and workmanlike manner
according to and in conformance with the Laws, rules and regulations of all governmental bodies
and agencies and the requirements of this Lease applicable to the construction of the Initial
Improvements.
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7.3 No Rental Abatement. Tenant shall not be entitled to any abatement, allowance,
reduction, or suspension of Rent because part or all of the Improvements become untenantable as
a result of the partial or total destruction of the Improvements, and Tenant's obligation to keep and
perform all covenants and agreements on its part to be kept and performed hereunder, shall not be
decreased or affected in any way by any destruction of or damage to the Improvements; except as
otherwise provided herein.
7.4 Application of Insurance Proceeds. If following the occurrence of damage or
destruction to the Premises or Improvements, Tenant is obligated to or determines that there are
adequate proceeds to restore the Premises and Improvements pursuant to this Article VII, then all
proceeds from the insurance required to be maintained by Tenant on the Premises and the
Improvements shall be applied to fully restore the same, and, any excess proceeds shall be paid to
Tenant and any deficit in necessary funds plus the amount of any deductible shall be paid by
Tenant. If Tenant after commencing or causing the commencement of the restoration of Premises
and Improvements shall determine that the insurance proceeds are insufficient to pay all costs to
fully restore the Improvements, Tenant shall pay the deficiency and shall nevertheless proceed to
complete the restoration of Premises and the Improvements and pay the cost thereof. Upon lien
free completion of the restoration, any balance of the insurance proceeds remaining over and above
the cost of such restoration shall be paid to Tenant.
7.5 Exclusive Remedies. Notwithstanding any destruction or damage to the Premises
and/or the Improvements, Tenant shall not be released from any of its obligations under this Lease,
except to the extent and upon the conditions expressly stated in this Article VII. Lessor and Tenant
hereby expressly waive the provisions of California Civil Code Sections 1932(2) and 1933(4) with
respect to any damage or destruction of the Premises and/or the Improvements and agree that their
rights shall be exclusively governed by the provisions of this Article VII.
ARTICLE VIII
INSURANCE AND INDEMNITY
8.1 Insurance. The Tenant, to protect the Lessor against any and all claims and
liability for death, injury, loss and damage resulting from the Tenant's actions in connection with
this Lease, the Premises and the Project, shall, at the Tenant's sole cost and expense, throughout
the term of the Lease of the Premises, maintain the following insurance (or its then reasonably
available equivalent), as applicable: (a) Liability Insurance; (b) Property Insurance; (c) Builder's
Risk Insurance; and (d) Worker's Compensation Insurance. Additionally, the Tenant, to protect
the Lessor, shall cause its contractors and subcontractors, at their sole cost and expense, until
issuance of a Certificate of Completion for the Project, to maintain Contractor's Insurance.
8.1.1 Nature of Insurance. All Liability Insurance, Property Insurance, Automobile
Liability Insurance and Contractor's Insurance policies this Lease requires shall be issued by
carriers that: (a) are listed in the then current `Best's Key Rating Guide Property/Casualty—
United States & Canada" publication (or its equivalent, if such publication ceases to be published)
with a minimum financial strength rating of "A" and a minimum financial size category of "VII";
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and (b) are admitted to do business in the State of California by the California Department of
Insurance. The Tenant may provide any insurance under a "blanket" or "umbrella" insurance
policy, provided that (i) such policy or a certificate of such policy shall specify the amount(s) of
the total insurance allocated to the Premises and the Project, which amount(s) shall equal or exceed
the amount(s) required by this Lease and shall not be reduced for claims made for other properties;
and (ii) such policy otherwise complies with this Lease.
8.1.2 Policy Requirements and Endorsements. All insurance policies this Lease
requires shall contain (by endorsement or otherwise) the following provisions:
(a) Insured. Liability Insurance, Automobile Liability Insurance and
Contractor's Insurance policies shall name the Lessor as "additional insured." Property Insurance
Policies shall name the Lessor as a "loss payee." The coverage afforded to the Lessor shall be at
least as broad as that afforded to the Tenant and may not contain any terms, conditions, exclusions,
or limitations applicable to the Lessor that do not apply to the Tenant.
(b) Primary Coverage. All policies shall be written as primary policies,
not contributing to or in excess of any coverage that the Lessor may carry.
(c) Contractual Liability. Liability Insurance policies shall contain
contractual liability coverage, for the Tenant's indemnity obligations under this Lease. The
Tenant's obtaining or failure to obtain such contractual liability coverage shall not relieve the
Tenant from nor satisfy any indemnity obligation of the Tenant under this Lease.
(d) Deliveries to the Lessor. Prior to the commencement of any Due
Diligence Investigations, and no later than twenty (20) days before any insurance required by this
Lease expires, is cancelled or its liability limits are reduced or exhausted, the Tenant shall deliver
to the Lessor certificates of insurance evidencing the Tenant's maintenance of all insurance this
Lease requires. Each insurance carrier shall give the Lessor no less than thirty (30) calendar days'
advance written Notice of any cancellation, non -renewal, material change in coverage or available
limits of liability under any insurance policy required by this Lease. Also, phrases such as
"endeavor to" and "but failure to mail such Notice shall impose no obligation or liability of any
kind upon the company" shall not be included in the cancellation wording of any certificates of
insurance or any coverage for the Lessor.
(e) Waiver of Certain Claims. The Tenant shall attempt in good -faith
to cause the insurance carrier for each Liability Insurance, Automobile Liability Insurance and
Property Insurance policy to agree to a Waiver of Subrogation, if not already in the policy. To the
extent that the Tenant actually obtains insurance with a Waiver of Subrogation, the Parties release
each other, and their respective authorized representatives, from any claims for damage to any
Person or property that are caused by or result from risks insured against under such insurance
policies.
(f) No Representation. Neither Party makes any representation that the
limits, scope, or forms of insurance coverage this Lease requires are adequate or sufficient.
(g) No Claims Made Coverage. None of the insurance coverage
required under this Lease may be written on a claims -made basis.
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(h) Fully Paid and Non -Assessable. All insurance obtained and
maintained by the Tenant in satisfaction of the requirements of this Lease shall be fully paid for
and non -assessable.
(i) Lessor Option to Obtain Coverage. During the continuance of an
Event of Default arising from the Tenant's failure to carry any insurance required by this Lease,
the Lessor may, at its sole option, purchase any such required insurance coverage and the Lessor
shall be entitled to immediate payment from the Tenant of any premiums and associated costs paid
by the Lessor for such insurance coverage. Any amount becoming due and payable to the Lessor
under this Section 4.9 that is not paid within fifteen (15) calendar days after written demand from
the Lessor for payment of such amount, with an explanation of the amounts demanded, will bear
interest from the date of the demand at the rate of ten percent (10%) per annum or the maximum
rate allowed by California law, whichever is less. Any election by the Lessor to purchase or not
to purchase insurance otherwise required by the terms of this Lease to be carried by the Tenant
shall not relieve the Tenant of its obligation to obtain and maintain any insurance coverage required
by this Lease.
(j) Cross -Liability; Severability of Interests. All Liability Insurance
and Contractor's Insurance shall be endorsed to provide cross -liability coverage for the Tenant and
the Lessor and to provide severability of interests.
(k) Deductibles and Self -Insured Retentions. The Tenant shall pay or
cause to be paid any and all deductibles and self -insured retentions under all insurance policies
issued in satisfaction of the terms of this Lease regarding any claims relating to the Lessor.
(1) No Separate Insurance. The Tenant shall not carry separate or
additional insurance concurrent in form or contributing in the event of loss with that required under
this Lease, unless endorsed in favor of the Lessor, as required by this Lease.
(m) Insurance Independent of Indemnification. The insurance
requirements of this Lease are independent of the Tenant's indemnification and other obligations
under this Lease and shall not be construed or interpreted in any way to satisfy, restrict, limit, or
modify the Tenant's indemnification or other obligations or to limit the Tenant's liability under
this Lease, whether within, outside, or in excess of such coverage, and regardless of solvency or
insolvency of the insurer that issues the coverage; nor shall the provision of such insurance
preclude the Lessor from taking such other actions as are available to it under any other provision
of this Lease or otherwise at law or in equity
8.2 Indemnification.
8.2.1 Obligations. The Lessor shall Indemnify the Tenant and the Tenant shall
Indemnify the Lessor against any wrongful intentional act or negligence of the Indemnitor. The
Tenant shall also Indemnify the Lessor against any and all of the following: (a) any Application
made at the Tenant's request; (b) any Due Diligence Investigations by the Tenant; (c) use,
occupancy, management or operation of the Project; (d) any agreements that the Tenant (or anyone
claiming through the Tenant) makes regarding the Project; (e) the condition of the Project or any
space under, adjoining or appurtenant to the Premises; and, (f) any accident, injury or damage
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whatsoever caused to any Person in or on the Premises or the Project. Notwithstanding anything
to the contrary in this Lease, no Indemnitor shall be required to Indemnify any Indemnitee to the
extent of the Indemnitee's wrongful intentional acts or negligence.
8.2.2 Limitation on Liability of the Lessor. Following the execution of the Lease,
the Tenant is and shall be responsible for operation of the Premises and the Project, and the Lessor
shall not be liable for any injury or damage to any property (of the Tenant or any other Person) or
to any Person occurring on or about the Premises or the Project, except to the extent caused by the
Lessor's wrongful intentional act or negligence.
8.2.3 Strict Liability. The indemnification obligations of an Indemnitor shall
apply regardless of whether liability without fault or strict liability is imposed or sought to be
imposed on one or more Indemnitees.
8.2.4 Independent of Insurance Obligations. The Tenant's indemnification
obligations under this Lease shall not be construed or interpreted as in any way restricting, limiting,
or modifying the Tenant's insurance or other obligations under this Lease and is independent of
the Tenant's insurance and other obligations under this Lease. The Tenant's compliance with its
insurance obligations and other obligations under this Lease shall not in any way restrict, limit, or
modify the Tenant's indemnification obligations under this Lease and are independent of the
Tenant's indemnification and other obligations under this Lease.
8.2.5 Survival of Indemnification and Defense Obligations. The indemnity and
defense obligations under this Lease shall survive the expiration or earlier termination of this
Lease, until all claims against any of the Indemnitees involving any of the indemnified matters are
fully, finally, absolutely and completely barred by applicable statutes of limitations.
8.2.6 Independent Duty to Defend. The duty to defend under this Lease is
separate and independent of the duty to Indemnify. The duty to defend includes claims for which
an Indemnitee may be liable without fault or strictly liable. The duty to defend applies immediately
upon notice of a Claim, regardless of whether the issues of negligence, liability, fault, default or
other obligation on the part of the Indemnitor or the Indemnitee have been determined. The duty
to defend applies immediately, regardless of whether the hidernnitee has paid any amounts or
incurred any detriment arising out of or relating (directly or indirectly) to any claims. It is the
express intention of the Parties that an Indemnitee be entitled to obtain summary adjudication or
summary judgment regarding an hidemnitor's duty to defend the Indemnitee, at any stage of any
claim or suit, within the scope of the Indemnitor's indemnity obligations under this Lease.
8.3 Indemnification Procedures. Wherever this Lease requires any hndemnitor to
Indemnify any Indemnitee:
8.3.1 Prompt Notice. The Indemnitee shall promptly Notify the Indemnitor of
any claim. To the extent, and only to the extent, that the Indemnitee fails to give prompt Notice
of a Claim and such failure materially prejudices the Indemnitor in providing indemnity for such
claim, the Indemnitor shall be relieved of its indemnity obligations for such claim.
8.3.2 Selection of Counsel. The Indemnitor shall select counsel reasonably
acceptable to the Indemnitee. Counsel to Indemnitor's insurance carrier that is providing coverage
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for a claim shall be deemed reasonably satisfactory. Even though the Indemnitor shall defend the
action, Indemnitee may, at its option and its own expense, engage separate counsel to advise it
regarding the claim and its defense. The Indemnitee's separate counsel may attend all proceedings
and meetings. The Indemnitor's counsel shall actively consult with the Indemnitee's separate
counsel. The Indemnitor and its counsel shall, however, fully control the defense, except to the
extent that the Indemnitee waives its rights to indemnity and defense for such claim.
8.3.3 Cooperation. The hndemnitee shall reasonably cooperate with the
Indemnitor's defense of the Indemnitee, provided the Indemnitor reimburses the Indemnitee's
actual out of pocket expenses (including Legal Costs) of such cooperation.
8.3.4 Settlement. The hndemnitor may, with the Indemnitee's consent, not to be
unreasonably withheld, settle a claim. The Indemnitee's consent shall not be required for any
settlement by which all of the following occur: (a) the Indemnitor procures (by payment,
settlement, or otherwise) a release of the Indemnitee from the subject claims) by which the
Indemnitee need not make any payment to the claimant; (b) neither the Indemnitee nor the
Indemnitor on behalf of the hndemnitee admits liability; (c) the continued effectiveness of this
Lease is not jeopardized in any way; and (d) the hidemnitee's interest in the Project is not
jeopardized in any way.
8.3.5 Insurance Proceeds. The hidemnitor's obligations shall be reduced by net
insurance proceeds the Indemnitee actually receives for the matter giving rise to indemnification
obligation.
ARTICLE IX
CONDEMNATION
9.1 Definitions.
9.LI. "Condemnation" means (i) the taking or damaging, including severance
damage, by eminent domain or by inverse condemnation or for any public or quasi -public use
under any statute, whether by legal proceedings or otherwise, by a Condemnor (hereinafter
defined), and (ii) a voluntary sale or transfer to a Condemnor, either under threat of condemnation
or while condemnation legal proceedings are pending.
9.1.2. "Date of Taking" means the later of (i) the date actual physical possession
is taken by the Condemnor; or (d) the date on which the right to compensation and damages
accrues under the law applicable to the Premises.
9.1.3. "Award" means all compensation, sums or anything of value awarded, paid
or received for a Total Taking, a Substantial Taking or a Partial Taking (hereinafter defined),
whether pursuant to judgment or by agreement or otherwise.
9.1.4. "Condemnor" means any public or quasi -public authority or private
corporation or individual having the power of condemnation.
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9.1.5. "Total Taking" means the taking by Condemnation of all of the Premises
and all of the Improvements.
9.1.6. "Substantial Taking" means the taking by Condemnation of so much of the
Premises or Improvements or both that one or more of the following conditions results, as
reasonably determined by Tenant: (i) The remainder of the Premises would not be economically
and feasibly usable by Tenant; and/or (ii) A reasonable amount of reconstruction would not make
the Premises and Improvements a practical improvement and reasonably suited for the uses and
purposes for which the Premises were being used prior to the Condemnation; and/or (iii) The
conduct of Tenant's business on the Premises would be materially and substantially prevented or
impaired.
9.1.7. "Partial Taking" means any taking of the Premises or Improvements that is
neither a Total Taking nor a Substantial Taking.
9.1.8. "Notice of Intended Condemnation" means any notice or notification on
which a reasonably prudent person would rely and which he would interpret as expressing an
existing intention of Condemnation as distinguished from a mere preliminary inquiry or proposal.
It includes but is not limited to service of a Condemnation summons and complaint on a Party
hereto. The notice is considered to have been received when a Party receives from the Condemnor
a notice of intent to condemn, in writing, containing a description or map reasonably defining the
extent of the Condemnation.
9.2 Notice and Representation.
9.2.1. Notification. The Party receiving a notice of one or more of the kinds
specified below shall promptly notify the other Party of the receipt, contents and dates of such
notice: (i) a Notice of Intended Condemnation; (ii) service of any legal process relating to the
Condemnation of the Premises or Improvements; (iii) any notice in connection with any
proceedings or negotiations with respect to such a Condemnation; (iv) any notice of an intent or
willingness to make or negotiate a private purchase, sale or transfer in lieu of Condemnation.
9.2.2. Separate Representation. Lessor and Tenant each have the right to
represent its respective interest in each Condemnation proceeding or negotiation and to make full
proof of its claims. No agreement, settlement, sale or transfer to or with the Condemnor shall be
made without the consent of Lessor and Tenant. Lessor and Tenant shall each execute and deliver
to the other any instruments that may be required to effectuate or facilitate the provisions of this
Lease relating to Condemnation.
9.3 Total or Substantial Taking.
9.3.1. Total Taking. On a Total Taking, this Lease shall terminate on the Date of
Taking.
9.3.2. Substantial Taking. If a taking is a Substantial Taking, Tenant may, by
notice to Lessor given within ninety (90) days after Tenant receives a Notice of Intended
Condemnation, elect to treat the taking as a Total Taking. If Tenant does not so notify Lessor, the
taking shall be deemed a Partial Taking.
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9.3.3. Early Delivery of Possession. Tenant may continue to occupy the Premises
and Improvements until the Condemnor takes physical possession. At any time following Notice
of Intended Condemnation, Tenant may in its sole discretion, elect to relinquish possession of the
Premises to Lessor before the actual Taking. The election shall be made by notice declaring the
election and agreeing to pay all Rent required under this Lease to the Date of Taking. Tenant's
right to apportionment of or compensation from the Award shall then accrue as of the date that the
Tenant relinquishes possession.
9.3.4. Apportionment of Award. On a Total Taking all sums, including damages
and interest, awarded for the fee or leasehold or both shall be distributed and disbursed as finally
determined by the court with jurisdiction over the Condemnation proceedings in accordance with
applicable law. Notwithstanding anything herein to the contrary, Tenant shall be entitled to receive
compensation for the value of its leasehold estate under this Lease including its fee interest in all
Improvements, personal property and trade fixtures located on the Premises, its relocation and
removal expenses, its loss of business goodwill and any other items to which Tenant may be
entitled under applicable law.
9.4 Partial Taking.
9.4.1. Effect on Rent. On a Partial Taking this Lease shall remain in full force and
effect covering the remainder of the Premises and Improvements, and Tenant shall not be entitled
to any refund of the Rent.
9.4.2. Restoration of Improvements. Promptly after a Partial Taking, Tenant shall
repair, alter, modify or reconstruct the Improvements ("Restoring") so as to make them reasonably
suitable for Tenant's continued occupancy for the uses and purposes for which the Premises are
leased.
9.4.3. Apportionment of Award. On a Partial Taking, Lessor shall be entitled to
receive the entire award for such Partial Taking, except that (i) the proceeds of such Partial Taking
shall first be applied towards the cost of Restoring the Premises pursuant to Section 9.4.2 and (ii)
Tenant shall be entitled to receive any portion of such award allocated to Tenant's interest in any
of Tenant's Improvements, Personal property and trade fixtures taken, and any part of the award
attributable to the low income housing tax credits.
9.5 Waiver of Termination Rights. Both Parties waive their rights under Section
1265.130 of the California Code of Civil Procedure (and any successor provision) and agree that
the right to terminate this Lease in the event of Condemnation shall be governed by the provisions
of this Article IX.
ARTICLE X
ASSIGNMENT, SUBLETTING AND ENCUMBERING
10.1 General. Except as provided in Sections 10.3, Tenant shall not mortgage, pledge,
hypothecate, encumber, transfer, sublease Tenant's interest in this Lease or assign (including an
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assignment by operation of law) Tenant's interest in the Premises or Improvements or any part or
portion thereof (hereinafter referred to collectively as "Transfer") without the written consent of
the Lessor. Tenant's failure to obtain the Lessor's written consent to a Transfer shall render such
Transfer void. Occupancy of the Premises by a prospective transferee, sublessee, or assignee prior
to Lessor's written consent of a Transfer shall constitute an Event of Default, except as set forth
in Section 10.3, below.
10.1.1. Except as provided in Section 10.3, below, if Tenant hereunder is a
corporation, limited liability company, an unincorporated association or partnership, the sale or
transfer of any stock or interest in said corporation, company, association and partnership in the
aggregate exceeding 25% shall require the written consent of the Lessor, as set forth in Section
10.1, above.
10.1.2. Should Lessor consent to any Transfer, such consent and approval shall not
constitute a waiver of any of the terms, conditions, covenants, restrictions or reservations of this
Lease nor be construed as Lessor's consent to any further Transfer. Such terms, conditions,
covenants, restrictions and reservations shall apply to each and every Transfer hereunder and shall
be severally binding upon each and every party thereto. Any document regarding the Transfer of
the Premises or any part thereof shall not be inconsistent with the provisions of this Lease and in
the event of any such inconsistency, the provisions of this Lease shall control.
10.1.3. This Section shall not be interpreted to prohibit, disallow or require Lessor's
consent to space leases (subleases of less than Tenant's entire Lease interest), which are consistent
with the approved uses under this Lease.
10.2 Leasehold Mortgage. Under no circumstances may Tenant mortgage, encumber or
hypothecate Lessor's Fee Interest.
10.3 Excluded Transfers. Lessor's consent, asset forth in Section 10.1, above, shall not
be required for any Excluded Transfer (each party to whom an Excluded Transfer may be made
is a "Permitted Transferee"), provided, however, that (1) Tenant shall notify Lessor of such
Excluded Transfer at least twenty (20) days prior to the consummation of such Excluded Transfer,
and shall provide Lessor with information regarding the transferee evidencing that the Transfer
falls within the scope of this Section 10.3 and the definition of Excluded Transfer, and (2) if such
Transfer involves an assignment of Tenant's rights under this Lease, Tenant or such transferee
shall provide Lessor with a written assumption of Tenant's obligations and liabilities under this
Lease executed by such transferee in a form approved by the Lessor; provided, however, that the
provisions of this Section 10.3 shall not apply to any Transfer to a Foreclosure Transferee.
10.4 Transfer Procedure. The provisions of this Section 10.4 shall not be applicable to
an Excluded Transfer, which shall be governed by Section 10.3, above. If Tenant desires at any
time to enter into a Transfer for which Lessor's consent is required hereunder, Tenant shall provide
Lessor with written notice ("Transfer Notice") at least ninety (90) days prior to the proposed
effective date of the Transfer. The Transfer Notice shall include (i) the name and address of the
proposed transferee, (ii) the nature of the Transfer (e.g., whether an assignment, sublease, etc.),
(iii) the proposed effective date of the Transfer, (iv) income statements and "fair market" balance
sheets of the proposed transferee for the two (2) most recently completed fiscal or calendar years
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(provided however, if the proposed transferee is a newly formed entity and has not been in
existence for such two (2) year period, the financial statements submitted shall be those of its
principals), (v) a detailed description of the proposed transferees qualifications and experience that
demonstrates the transferee meets the criteria for a Tenant as established by this Lease, and (vi) a
bank or other credit reference. Thereafter, Tenant shall furnish such supplemental information as
Lessor may reasonably request concerning the proposed transferee. Lessor shall, no later than
ninety (90) days after Lessor's receipt of the information specified above, deliver written notice to
Tenant which shall (i) indicate whether Lessor give or withhold consent to the proposed Transfer,
and (ii) if Lessor withhold consent to the proposed Transfer, setting forth a detailed explanation of
Lessor's grounds for doing so. If Lessor consents to a proposed Transfer, then Tenant may
thereafter effectuate such Transfer to the proposed transferee based upon the specific terms of the
Lessor's approval and after execution of a consent to assignment by Lessor in a form approved by
the Lessor; provided, however, that the provisions of this Section 10.4 shall not apply to any
Transfer to a Foreclosure Transferee.
10.5 Liability of Transferors/Transferees For Lease Obligations. In the case of an
assignment, each Permitted Transferee and any other assignees or transferees of this Lease shall
assume in writing all of Tenant's obligations thereafter arising under this Lease. All assignees or
transferees of any interest in this Lease or the Premises or Improvements (whether or not directly
liable on this Lease) shall be subject to the terms, conditions, covenants, restrictions and
reservations of this Lease. The transferor may be released from all liability under this Lease only
if the Permitted Transferee or other transferee agrees in writing to assume all of transferor's
obligations and liabilities and provides to Lessor evidence of sufficient and adequate assets,
including any required insurance policies, subject to approval by Lessor, which approval shall not
be unreasonably withheld, that evidence said Permitted Transferee's or other transferees' financial
and otherwise competence to assume transferor's obligations and liability (an "Approved
Release"). Except for an Approved Release, for all other Transfers, any transferor of any interest
in this Lease or the Premises or Improvements shall remain primarily liable for all obligations
hereunder and shall be subject to the terms, conditions, covenants, restrictions and reservations of
this Lease. Except for an Approved Release, the Lessor may proceed directly against the transferor
in its sole and absolute discretion, with no obligation to exhaust its remedies against the transferee.
10.6 Conditions of Certain Lessor Consent.
10.6.1. Lessor may withhold consent to a Transfer (excluding Excluded Transfers
which shall not require Lessor consent) at its absolute sole discretion if any of the following
conditions exist:
(a) An Event of Default exists under this Lease.
(b) The prospective transferee has not agreed in writing to keep, perform,
and be bound by all the terms conditions, covenants, restrictions and reservations of this Lease.
(c) In the case of an assignment, the prospective transferee has not agreed
in writing to assume all of transferor's obligations and liabilities.
(d) The construction of the Initial Improvements has not been completed.
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(e) Any construction required of Tenant as a condition of this Lease has not
been completed.
(f) All the material terms, covenants, and conditions of the Transfer that are
relevant to the Lessor's approval of the Transfer have not been disclosed in writing to the Lessor.
10.7 Transfer of Mortgages of Lessor's Interest. Notwithstanding anything to the
contrary set forth in this Ground Lease, unless required by statute, court order or operation of law,
Lessor shall not transfer, assign, pledge or hypothecate its fee interest in the Premises (other than
to entities under common control with Lessor or other governmental entities under applicable law)
without the prior written consent of Tenant. Any and all mortgages or liens placed or suffered by
the Lessor encumbering the Lessor's fee interest in the Premises shall be expressly subject and
subordinate to this Lease, to all obligations of Lessor hereunder, to all of the rights, titles, interests,
and estates of the Tenant created or arising hereunder, to each New Lease and to each Leasehold
Mortgage. Furthermore, any Person succeeding to the Lessor's fee interest as a consequence of
any conveyance, foreclosure or other transfer shall succeed to all of the obligations of the Lessor
hereunder.
ARTICLE XI
DEFAULT AND REMEDIES
11.1 Event of Default. Each of the following events shall constitute an "Event of Default"
by Tenant:
11.1.1. Failure to Pay. Tenant's failure or omission to pay any Rent or other sum
payable hereunder on or before the date due where such failure shall continue for a period of five
(5) days after written notice thereof from Lessor to Tenant; provided, however, that any such notice
shall be in lieu of, and not in addition to, any notice required under California Code of Civil
Procedure §1161 et seq.
11.1.2. Failure to Perform. The failure or inability by Tenant to observe or
perform any of its obligations under this Lease (other than those specified in Sections 11.1.1,
11.1.3, 11.1.6, or 11.1.8 herein, which have their own notice and cure periods), where such failure
shall continue for a period of thirty (30) days after written notice thereof from Lessor to Tenant or
past any such longer period as reasonably agreed upon by the Tenant, Lessor in writing as may be
necessary for completion of its cure; provided, however, that any such notice by Lessor shall be in
lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section
1161 et. seq.; provided, fiuther, that if the nature of such failure is such that it can be cured by
Tenant but that more than thirty (30) days are reasonably required for its cure (for any reason other
than financial inability), then Tenant shall not be deemed to be in default if Tenant shall commence
such cure within said thirty (30) days, and thereafter diligently pursues such cure to completion.
11.1.3. Abandonment. The abandonment (as defined in California Civil Code
Section 1951.3) or vacation of the Premises by Tenant for a period of thirty (30) days or more.
11.1.4. Assignments.
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(a) The making by Tenant of any assignment of its leasehold estate under
this Lease without Lessor's consent, as set forth in Article X;
(b) A case is commenced by or against Tenant under Chapters 7, 11 or 13
of the Bankruptcy Code, Title I I of the United States Code as now in force or hereafter amended
and if so commenced against Tenant, the same is not dismissed within ninety (90) days of such
commencement;
(c) the appointment of a trustee or receiver to take possession 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 within sixty (60) days; or
(d) Tenant's convening of a meeting of its creditors or any class thereof for
the purpose of effecting a moratorium upon or composition of its debts. In the event of any such
default, neither this Lease nor any interests of Tenant in and to the Premises shall become an asset
in any of such proceedings.
11.1.5. Termination of and Failure to Reinstate Insurance Coverage.
Termination of Tenant's insurance coverage and lack of reinstatement within ten (10) business
days after notice from Lessor of such termination.
11.1.6. Failure to Provide Evidence of Insurance. Tenant's failure to provide
Lessor with a valid and adequate certificate of insurance and endorsements, or binder, at any time
during the Term of the Lease, within the time period required under Article VHI.
11.1.7. Lessor's Consent and Approval of Transfer. Occupancy of the Premises
by a prospective transferee, sublessee, or assignee which requires Lessor's consent or approval,
before Lessor's written consent and approval of a Transfer is obtained as required in Section 10.1.
11.2 Lessor's Remedies. If an Event of Default occurs, Lessor shall have the following
remedies in addition to all rights and remedies provided by law or equity to which Lessor may
resort cumulatively or in the alternative:
11.2.1. Termination of Lease. Lessor shall have the right to terminate this Lease
and all rights of Tenant hereunder including Tenant's right to possession of the Premises. In the
event that Lessor shall elect to so terminate this Lease then Lessor may recover from Tenant:
(a) The worth at the time of award of the unpaid Rent and other charges,
which had been earned as of the date of the termination hereof, plus
(b) Any other amount necessary to compensate Lessor for all 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, including, but not limited to, the cost
of recovering possession of the Premises, expenses of reletting, including necessary repair,
renovation and alteration of the Premises, reasonable attorneys' fees, expert witness costs; plus
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(c) Any other amount which Lessor may by law hereafter be permitted to
recover from Tenant to compensate Lessor for the detriment caused by Tenant's default as
permitted under applicable California law.
11.2.2. Continue Lease in Effect. Lessor may continue this Lease in effect without
terminating Tenant's right to possession and to enforce all of Lessor's rights and remedies under
this Lease, at law or in equity, including the right to recover the Rent as it becomes due under this
Lease; provided, however, that Lessor may at any time thereafter elect to terminate this Lease for
the underlying Event(s) of Default by notifying Tenant in writing that Tenant's right to possession
of the Premises has been terminated.
11.2.3. Removal of Personal Property Following Termination of Lease. Lessor
shall have the right, following a termination of this Lease and Tenant's rights of possession of the
Premises under Section 11.2.1 above, to re-enter the Premises and, subject to applicable law, to
remove Tenant's personal property from the Premises. Such property may be removed and stored
in a public warehouse or elsewhere at the cost of and for the account of Tenant, or disposed of
without such storage, in accordance with applicable California law.
11.3 Lessor's Right to Cure Tenant Defaults. If Tenant shall have failed to cure, after
expiration of the applicable time for curing, a particular default under this Lease, Lessor may at
their election, but is not obligated to, make any payment required of Tenant under this Lease or
perform or comply with any term, agreement or condition imposed on Tenant hereunder, and the
amount so paid plus the reasonable cost of any such performance or compliance, plus interest on
such sum at the Interest Rate from the date of payment, performance or compliance until
reimbursed shall be deemed to be payable by Tenant on Lessor's demand. Tenant's failure to
reimburse the Lessor within 30 days of Lessor's demand shall constitute an Event of Default under
this Lease. No such payment, performance or compliance shall constitute a waiver of default or
of any remedy for default, or render Lessor liable for any loss or damage resulting from the same.
11.4 Lessor's Default. Lessor shall not be considered to be in default under this Lease
unless Tenant has given Lessor written notice specifying the default, and either (i) as to monetary
defaults, Lessor have failed to cure the same within ten (10) business days after written notice from
Tenant, or (ii) as to nonmonetary defaults, Lessor have failed to cure the same within thirty (30)
days after written notice from Tenant, or if the nature of Lessor's nonmonetary default is such that
more than thirty (30) days are reasonably required for its cure, then such thirty (30) day period
shall be extended automatically so long as Lessor commences a cure within such thirty (30) day
period and thereafter diligently pursues such cure to completion. Tenant shall have no right to
offset or abate alleged amounts owing by Lessor under this Lease against any amounts owing by
Tenant under this Lease. Additionally, Tenant's sole remedy for any monetary default shall be
towards the Lessor's interest in the property and not to any other assets. Any and all claims or
actions accruing hereunder shall be absolutely barred unless such action is commenced within six
(6) months of the event or action giving rise to the default.
11.5 Remedies Cumulative. All rights and remedies of Lessor contained in this Lease
shall be construed and held to be cumulative, and no one of them shall be exclusive of the other,
and Lessor shall have the right to pursue any one or all of such remedies or any other remedy or
relief which may be provided by law, whether or not stated in this Lease.
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11.6 Waiver by Lessor. No delay or omission of Lessor to exercise any right or remedy
shall be construed as a waiver of such right or remedy or any default by Tenant hereunder. The
acceptance by Lessor of Rent or any other sums hereunder shall not be (a) a waiver of any
preceding breach or default by Tenant of any provision thereof, other than the failure of Tenant to
pay the particular rent or sum accepted, regardless of Lessor's knowledge of such preceding breach
or default at the time of acceptance of such rent or sum, or (b) waiver of Lessor's right to exercise
any remedy available to Lessor by virtue of such breach or default. No act or thing done by
Lessor's agents during the term of this Lease shall be deemed an acceptance of a surrender of the
Premises, and no agreement to accept a surrender shall be valid unless in writing and signed by
Lessor.
11.7 Interest. Any installment or Rent due under this Lease or any other sums not paid to
Lessor when due (other than interest) shall bear interest at the Interest Rate from the date such
payment is due until paid, provided, however, that the payment of such interest shall not excuse or
cure the default.
11.8 Conditions Deemed Reasonable. Tenant acknowledges that each of the conditions
to a Transfer, and the rights of Lessor set forth in this Article X in the event of a Transfer is a
reasonable restriction for the purposes of California Civil Code Section 1951.4.
11.9 Waiver by Tenant. Tenant's waiver of any breach by Lessor of any term, covenant
or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the
same or any other term, covenant or condition herein contained.
11.10 Tenant Covenants and Agreements. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by Tenant at Tenant's
sole cost and expenses and without any abatement of Rent. If Tenant shall fail to pay any sum of
money, other than Rent required to be paid by it hereunder, or shall fail to perform any other act
on its part to be performed hereunder, or to provide any insurance or evidence of insurance to be
provided by Tenant within the time period required under this Lease, then in addition to any other
remedies provided herein, Lessor may, but shall not be obligated to do so, and without waiving or
releasing Tenant from any obligations of Tenant, make any such payment or perform any such act
on Tenant's part to be made or performed as provided in this Lease or to provide such insurance.
Any payment or performance of any act or the provision of any such insurance by Lessor on
Tenant's behalf shall not give rise to any responsibility of Lessor to continue making the same or
similar payments or performing the same or similar acts. All costs, expenses, and other sums
incurred or paid by Lessor in connection therewith, together with interest at the Interest Rate from
the date incurred or paid by Lessor, shall be paid by Tenant within thirty (30) days of receipt of a
demand and invoice from Lessor, and Tenant's failure to pay the Lessor, as stated herein, shall
constitute an Event of Default under this Lease.
ARTICLE XII
HOLDING OVER
12.1 If Tenant holds over after the expiration or earlier termination of the Term hereof
without the express written consent of Lessor, Tenant shall become a Tenant at sufferance only, at
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a monthly rental rate of Ten Thousand Dollars ($10,000) ("Hold Over Rent"), increased annually
commencing with commencement of the hold over period by an amount equal to three percent
(3%) for each year of the Term. If Tenant fails to surrender the Premises and the Improvements
as stated herein, and Lessor shall take legal action to cause Tenant's eviction from the Premises
and is successful in such action, Tenant shall be responsible for all costs and expenses, including
reasonable attorney's fees and costs, incurred by Lessor in connection with such eviction action;
Tenant shall also indemnify and hold Lessor harmless from all loss or liability or reasonable
attorney's fees and costs, including any claim made by any succeeding tenant, incurred by Lessor
founded on or resulting from such failure to surrender.
ARTICLE XIH
ESTOPPEL CERTIFICATES
13.1 At any time and from time to time, within ten (10) business days after written
request by either Lessor or Tenant (the "requesting party"), the other Party (the "responding
party") shall execute, acknowledge and deliver an estoppel certificate addressed to the requesting
party, and/or to such other beneficiary (as described below) as the requesting party shall request,
certifying (i) that this Lease is in full force and effect, (ii) that this Lease is unmodified, or, if there
have been modifications, identifying the same, (iii) the dates to which Rent has been paid in
advance, (iv) that, to the actual knowledge of the responding party, there are no then existing and
uncured defaults under the Lease by either Lessor or Tenant, or, if any such defaults are known,
identifying the same, and (v) any other factual matters (which shall be limited to the actual
knowledge of the responding party) as may be reasonably requested by the requesting party. Such
certificate may designate as the beneficiary thereof the requesting party, and/or any third party
having a reasonable need for such a certificate (such as, but not limited to, a prospective purchaser,
transferee or lender) and any such certificate may be relied upon by the Parties.
ARTICLE XIV
FORCE MAJEURE
14.1 Unless otherwise specifically provided herein, the period for performance of any
nonmonetary obligation by either Party shall be extended by the period of any delay in
performance caused by Acts of God, strikes, boycotts, lock -outs, inability to procure materials not
related to the price thereof, failure of electric power, riots, civil unrest, acts of terrorism,
insurrection, war, declaration of a state or national emergency, weather that could not have
reasonably been anticipated, changes in the Laws which would prevent the Premise from being
operated in accordance with this Lease, or other reasons beyond the reasonable control of Lessor,
Tenant, or their respective agents or representatives (collectively, "Force Majeure Events"). In
no event, however, shall Force Majeure Events include the financial inability of a Party to this
Lease to pay or perform its obligations hereunder. Further, nothing herein shall extend the time
for performance of any monetary obligation owing under this Lease (including Tenant's obligation
to pay Rent owing hereunder).
ARTICLE XV
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RECORDS AND ACCOUNTS
15.1 Financial Statements. Upon request, within one hundred eighty (180) days after the
end of each accounting year, Tenant shall at its own expense submit to Lessor a balance sheet and
income statement prepared by a Certified Public Accountant ("CPA") who is a member of the
American Institute of Certified Public Accountants ("AICPA") and the California Society of
CPAs, reflecting business transacted on or from the Premises during the preceding accounting
year. The CPA must attest that the balance sheet and income statement submitted are an accurate
representation of Tenant's records as reported to the United States of America for income tax
purposes. Tenant shall provide Lessor with copies of any of CPA's management letters prepared
in conjunction with their audits of Tenant's operations from the Premises. Copies of management
letters shall be provided directly to Lessor by the CPA at the same time Tenant's copy is provided
to Tenant. In the event that when such financial statements are submitted, the Tenant has a budget
for the following accounting year, Tenant, at the same time, shall also provide Lessor with such
budget.
15.1.1. Tenant acknowledges its understanding that any and all of the Financial
Statements submitted to the Lessor pursuant to this Lease become Public Records and may be
subject to public inspection and copying pursuant to §§ 6250 et. seq. of the California Government
Code.
15.1.2. All Tenant's books of account and records and supporting source documents
related to this Lease or to business operations conducted within or from the Premises shall be kept
and made available at one location within the limits of the county unless an alternative location is
approved in writing by the Lessor. Lessor shall, through its duly authorized agents or
representatives, have the right to examine and audit said books of account and records and
supporting source documents at any and all reasonable times for the purpose of determining the
accuracy thereof in connection with such Sections of this Lease as the Parties mutually and
reasonably agree the audit is relevant thereto.
15.2 Reports. In the event that the Tenant commissions, requests or is required to produce
any reports related to the physical condition of the Improvements or Premises, Tenant shall submit
copies of such reports to Lessor along with the financial statements required above in Section 15.1.
ARTICLE XVI
OPERATIONAL OBLIGATIONS OF TENANT
16.1 Standards of Operation.
16. L I. Tenant shall operate the Premises in a manner reasonably comparable to
other comparable facilities or businesses within the County of Orange. Tenant shall at all times
during the Term provide adequate security measures to reasonably protect persons and property
on the Premises.
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16.1.2. The ultimate purpose of this Lease is to permit the construction and
operation of a micro -farm, in accordance with Section 4.1.1. Accordingly, Tenant covenants and
agrees to operate said Premises fully and continuously to accomplish said purposes and not to
abandon or vacate the Premises at any time.
16.1.3. The facilities on the Premises shall be operated during normal business
hours, subject to any temporary interruptions in operations or closures due to ordinary maintenance
and repair and any Force Majeure Event, defined in Article XIV above.
16.2 Protection of Environment. Tenant shall take all reasonable measures available to:
16.2.1. Avoid any pollution of the atmosphere or littering of land or water caused
by or originating in, on, or about Tenant's facilities.
16.2.2. Maintain a reasonable noise level on the Premises so that persons in the
general neighborhood will be able to comfortably enjoy the other facilities and amenities in the
area.
16.2.3. Prevent the light fixtures of the Premises from emitting light that could
negatively affect the operation of cars or airplanes in the area.
16.2.4. Prevent all pollutants from Tenant's operations on the Premises from being
discharged, including petroleum products of any nature, except as may be permitted in accordance
with any applicable permits or as permitted by applicable Law. Tenant and all of Tenant's agents,
employees and contractors shall conduct operations under this Lease so as to ensure that pollutants
do not enter the municipal storm drain system (including but not limited to curbs and gutters that
are part of the street systems), or directly impact receiving waters (including but not limited to
rivers, creeks, streams, estuaries, lakes, harbors, bays and the ocean), except as may be permitted
by any applicable permits or as permitted by applicable law.
16.2.5. The Lessor may enter the Premises in accordance with Section 4.5 and/or
request Tenant records at any reasonable time to assure that activities conducted on the Premises
comply with the requirements of this Section.
16.3 On -Site Manager. Tenant shall employ a competent manager who shall be
responsible for the day-to-day operation and level of maintenance, cleanliness, and general order
for the Premises. Such person shall be vested with the authority of Tenant with respect to the
supervision over the operation and maintenance of the Premises, including the authority to enforce
compliance by Tenant's agents, employees, concessionaires, or licensees with the terms and
conditions of this Lease and any and all rules and regulations adopted hereunder. Tenant shall
notify Lessor in writing of the name of the Manager currently so employed.
16.4 Policies and Procedures to be Established by Tenant. Prior to the completion of
construction, Tenant shall submit to Lessor proposed policies and procedures pertinent to the
operation of the micro -farm and manner of providing the uses required by this Lease ("Policies
and Procedures").
ARTICLE XVII
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RESERVED
ARTICLE XVIH
BEST MANAGEMENT PRACTICES
18.1 Tenant and all of Tenant's, subtenant, agents, employees and contractors shall conduct
operations under this Lease so as to assure that pollutants do not enter municipal storm drain
systems, in violation of applicable Laws, which systems are comprised of, but are not limited to
curbs and gutters that are part of the street systems ("Stormwater Drainage System"), and to
ensure that pollutants do not directly impact "Receiving Waters" (as used herein, Receiving
Waters include, but are not limited to, rivers, creeks, streams, estuaries, lakes, harbors, bays and
oceans).
18.2 The Santa Ana and San Diego Regional Water Quality Control Boards have issued
National Pollutant Discharge Elimination System ("NPDES") permits ("Stormwater Permits")
to the County of Orange, and to the Orange County Flood Control District ("District") and cities
within Orange County, as co-permittees (hereinafter collectively referred to as "NPDES Parties")
which regulate the discharge of urban runoff from areas within the County of Orange, including
the Premises leased under this Lease. The NPDES Parties have enacted water quality ordinances
that prohibit conditions and activities that may result in polluted runoff being discharged into the
Stormwater Drainage System.
18.3 To assure compliance with the Stormwater Permits and water quality ordinances, the
NPDES Parties have developed a Drainage Area Management Plan ("DAMP") which includes a
Local hnplementation Plan ("LIP") for each jurisdiction that contains Best Management Practices
(`BMPs") that parties using properties within Orange County must adhere to. As used herein, a
BMP is defined as a technique, measure, or structural control that is used for a given set of
conditions to manage the quantity and improve the quality of stormwater runoff in a cost effective
manner. These BMPs are found within the District and/or County's LIP in the form of Model
Maintenance Procedures and BMP Fact Sheets (the Model Maintenance Procedures and BMP Fact
Sheets contained in the DAMP/LIP shall be referred to hereinafter collectively as "BMP Fact
Sheets") and contain pollution prevention and source control techniques to eliminate non-
stormwater discharges and minimise the impact of pollutants on stormwater runoff.
18.4 BMP Fact Sheets that apply to uses authorized under this Lease include the BMP Fact
Sheets that are attached hereto as Exhibit C. These BMP Fact Sheets may be modified during the
term of the Lease; and the Lessor shall provide Tenant with any such modified BMP Fact Sheets.
Tenant, its agents, contractors, representatives and employees and all persons authorized by Tenant
to conduct activities on the Premises shall, throughout the term of this Lease, comply with the
BMP Fact Sheets as they exist now or are modified, and shall comply with all other requirements
of the Stormwater Permits, as they exist at the time this Lease commences or as the Stormwater
Permits may be modified. Tenant agrees to maintain current copies of the BMP Fact Sheets on
the Premises throughout the term of this Lease. The BMPs applicable to uses authorized under
this Lease must be performed as described within all applicable BMP Fact Sheets.
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18.5 Tenant may propose alternative BMPs that meet or exceed the pollution prevention
performance of the BMP Fact Sheets. Any such alternative BMPs shall be submitted to the Lessor
for review and approval prior to implementation.
18.6 Lessor may enter the Premises in accordance with Section 4.5 and/or request Tenant's
records at any reasonable time during normal business hours to assure that activities conducted on
the Premises comply with the requirements of this Section.
ARTICLE XIX
GENERAL CONDITIONS & NUSCELLANEOUS PROVISIONS
19.1 Signs. Tenant agrees not to construct, maintain, or allow any signs, banners, flags,
etc., upon the Premises except (a) as approved in writing in advance by Lessor, which approval
may be withheld in the sole and absolute discretion of the Lessor, or (b) required by any of Tenant's
lenders, provided that any such signage is in compliance with all applicable Laws. Tenant further
agrees not to construct, maintain, or allow billboards or outdoor advertising signs upon the
Premises, except as approved in writing by Lessor.
19.2 Nondiscrimination. Tenant agrees not to discriminate against any person or class of
persons by reason of sex, age (except as permitted by law), race, color, creed, physical handicap,
or national origin in employment practices and in the activities conducted pursuant to this Lease.
19.3 Taxes and Assessments. Pursuant to California Revenue and Taxation Code Section
107.6, Tenant is specifically informed that this Lease may create a possessory interest which is
subject to the payment of taxes levied on such interest. It is understood and agreed that all taxes
and assessments (including but not limited to said possessory interest tax) which become due and
payable upon the Premises or upon fixtures, equipment, or other property installed or constructed
thereon, shall be the full responsibility of Tenant, and Tenant shall cause said taxes and
assessments to be paid promptly.
19.4 Quitclaim of Interest upon Termination. Upon termination of this Lease for any
reason whatsoever in accordance with the terms of the Lease, Tenant shall execute, acknowledge,
and deliver to Lessor, within ten (10) business days, a good and sufficient deed, in a form as
approved by the Lessor, whereby all right, title, and interest of Tenant in the Premises is
quitclaimed back to Lessor ("Quitclaim Deed"). The Quitclaim Deed shall then be recorded by
Lessor to remove any cloud on title created by this Lease. In the event that the Tenant fails to
provide such Quitclaim Deed within ten (10) additional business days after written demand by
Lessor, the Parties agree that the Lessor will be damaged and entitled to compensation for those
damages. Such actual damages will, however, be extremely difficult to ascertain. Therefore, if
the Tenant does not provide the required Quitclaim Deed after such notice and cure period, in
addition to any other remedy provided by law or equity, the Tenant shall pay the Lessor $1,000
per day for every day that passes until a Quitclaim Deed is delivered, which amount shall be
deemed to constitute a reasonable estimate of Lessor's damages and not a penalty. Such amount
shall become due and payable by Tenant to Lessor for each calendar day that passes beyond the
cure period. Notwithstanding the foregoing, if the Tenant has disputed the termination of the Lease
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by Lessor, upon a final determination by a court of competent jurisdiction that the Lease has not
been terminated, Tenant shall not be subject to payment of the foregoing damages.
19.5 Public Records. Tenant acknowledges that any written information submitted to
and/or obtained by Lessor from Tenant or any other person or entity having to do with or related
to this Lease and/or the Premises, either pursuant to this Lease or otherwise, is a "public record"
open to inspection and copying by the public pursuant to the California Public Records Act
(Government Code §6250, et seq.) ("CPRA") as now in force or hereafter amended, or any Law
in substitution thereof, or otherwise made available to the public, unless such information is
exempt from disclosure pursuant to the applicable sections of CPRA. In the event that a CPRA
request is made for any financial statements and records (not including Gross Receipts Statements)
and the Lessor determines that the records must be turned over, the Lessor will give Tenant ten
(10) days' written notice prior to turning over such records so that Tenant can take any necessary
action, including, but not limited to, injunctive relief, to prevent Lessor from turning over such
financial statements and records.
19.6 Attorney's Fees. In any action or proceeding brought to enforce or interpret any
provision of this Lease, or where any provision hereof is validly asserted as a defense, each Party
shall bear its own attorneys' fees and costs.
19.7 Payment Card Compliance. Should Tenant conduct credit/debit card transactions
in conjunction with Tenant's business with the Lessor, on behalf of the Lessor, or as part of the
business that Tenant conducts on the Premises, Tenant covenants and warrants that it will during
the course of such activities be Payment Card Industry Data Security Standard ("PCl/DSS") and
Payment Application Data Security Standard ("PA/DSS") compliant and will remain compliant
during the entire duration of its conduct of such activities. Tenant agrees to immediately notify
Lessor in the event Tenant should ever become non -compliant at a time when compliance is
required hereunder, and will take all necessary steps to return to compliance and shall be compliant
within ten (10) days of the commencement of any such interruption. Upon demand by Lessor,
Tenant shall provide to Lessor written certification of Tenant's PCl/DSS and/or PA/DSS
compliance.
19.8 Right to Work and Minimum Wage Laws.
19.8.1. Pursuant to the United States of America Fair Labor Standard Act of 1938,
as amended, and State of California Labor Code, Section 1178.5, Tenant shall pay no less than the
greater of the Federal or California Minimum Wage to all its employees that directly or indirectly
service the Premises, in any manner whatsoever. Tenant shall require and verify that all its
contractors or other persons servicing the Premises on behalf of the Tenant also pay their
employees no less than the greater of the Federal or California Minimum Wage.
19.8.2. Tenant shall comply and verify that its general contractor complies with all
other Federal and State of California laws for minimum wage, overtime pay, record keeping, and
child labor standards pursuant to the servicing of the Premises or terms and conditions of this
Lease.
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19.9 Declaration of Knowledge by Tenant. Tenant warrants that Tenant has carefully
examined this Lease and by investigation of the site and of all matters relating to the Lease
arrangements has fully informed itself as to all existing conditions and limitations affecting the
construction of the Lease improvements and business practices required in the operation and
management of the uses contemplated hereunder.
19.10 Governing Law. This Lease shall be governed by and construed in accordance with
the laws of the State of California and the City of Santa Ana.
19.11 Venue. The Parties hereto agree that this Lease has been negotiated and executed in
the State of California and shall be governed by and construed under the laws of California. In the
event of any legal action to enforce or interpret this Lease, the sole and exclusive venue shall be a
court of competent jurisdiction located in Orange County, Califomia, and the Parties hereto agree
to and do hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure
Section 394. Furthermore, the Parties hereto specifically agree to waive any and all rights to
request that an action be transferred for trial to another county.
19.12 Headings and Titles. The captions of the Articles or Sections of this Lease are only
to assist the Parties in reading this Lease and shall have no effect upon the construction or
interpretation of any part hereof.
19.13 Interpretation. Whenever required by the context of this Lease, the singular shall
include the plural and the plural shall include the singular. The masculine, feminine and neuter
genders shall each include the other. In any provision relating to the conduct, acts or omissions of
Tenant, the term "Tenant" shall include Tenant's agents, employees, contractors, invitees,
successors or others using the Premises with Tenant's expressed or implied permission. In any
provision relating to the conduct, acts or omissions of Lessor, the term "Lessor" shall include
Lessor's agents, employees, contractors, invitees, successors or others using the Premises with
Lessor's expressed or implied permission.
19.14 Ambiguities. Each Party hereto has reviewed this Lease with legal counsel, and has
revised (or requested revisions of) this Lease based on the advice of counsel, and therefore any
rules of construction requiring that ambiguities are to be resolved against a particular Party shall
not be applicable in the construction and interpretation of this Lease or any exhibits hereto.
19.15 Successors and Assigns. Except as otherwise specifically provided in this Lease,
all of the covenants, conditions and provisions of this Lease shall be binding upon and shall inure
to the benefit of the Parties hereto and their respective heirs, personal representatives, successors
and assigns.
19.16 Time is of the 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.
19.17 Severability. If any term or provision of this Lease is held invalid or unenforceable
to any extent under any applicable law by a court of competent jurisdiction, the remainder of this
Lease shall not be affected thereby, and each remaining term and provision of this Lease shall be
valid and enforceable to the fullest extent permitted by law.
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19.18 Integration. This Lease, along with any exhibits, attachments or other documents
affixed hereto or referred to herein and related City permits, constitute the entire agreement
between Lessor and Tenant relative to the leasing of the Premises. This Lease and such exhibits,
attachments and other documents may be amended or revoked only by an instrument in writing
signed by Lessor and Tenant.
19.19 Notices, Demands and Communications Between the Parties.
19.19.1 Notices. Any and all Notices submitted by either Party to the other Parry
pursuant to or as required by this Agreement shall be proper, if in writing and transmitted to the
principal office of the Lessor or the Tenant, as applicable, set forth in Section 19.19.2, by one or
more of the following methods: (i) messenger for immediate Personal delivery, (ii) a nationally
recognized overnight (one-night) delivery service (i.e., Federal Express, United Parcel Service,
etc.) or (iii) registered or certified United States Mail, postage prepaid, return receipt requested.
Such Notices may be sent in the same manner to such other addresses as either Party may designate
from time to time, by Notice. Any Notice shall be deemed to be received by the addressee,
regardless of whether or when any return receipt is received by the sender or the date set forth on
such return receipt, on the day that it is delivered by personal delivery, on the date of delivery by
a nationally recognized overnight courier service (or when delivery has been attempted twice, as
evidenced by the written report of the courier service) or four (4) calendar days after it is deposited
with the United States Postal Service for delivery, as provided in this Section 19.19.1. Rejection,
other refusal to accept or the inability to deliver a Notice because of a changed address of which
no Notice was given or other action by a Person to whom Notice is sent, shall be deemed receipt
of the Notice.
19.19.2 Addresses. The following are the authorized addresses for the submission
of Notices to the Parties, as of the Effective Date:
To the Tenant:
THRIVE Santa Ana, Inc.
P.O. Box 1935
Santa Ana, CA 92702
UCI School of Law Community
Economic Development Clinic
P.O. Box 5479
hvine, CA 92616-5479
Public Law Center
c/o Housing and Homelessness
Prevention Unit
601 Civic Center Drive West
Santa Ana, CA 92701
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To the Lessor:
City of Santa Ana
Community Development Agency
20 Civic Center Plaza (M-25)
P.O. Box 1988
Santa Ana, CA 92702
With courtesy copy to
City of Santa Ana
City Attorney's Office
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, CA 92702
19.20 Dispositions of Abandoned Property. If Tenant abandons or quits the Premises or
is dispossessed thereof by process of law or otherwise, title to any personal property belonging to
and left on the Premises thirty (30) days after such event shall, at Lessor's option, be deemed to
have been transferred to Lessor. Lessor shall have the right to remove and to dispose of such
property at Tenant's cost, including the cost of labor, materials, equipment and an administrative
fee equal to fifteen percent (15%) of the sum of such costs without liability therefor to Tenant or
to any person claiming under Tenant, and shall have no need to account therefor. At Lessor's
option, Lessor may provide Tenant with an invoice for such costs, which invoice Tenant agrees to
pay within fifteen (15) days of receipt.
19.21 No Partnership. This Lease shall not be construed to constitute any form of
partnership or joint venture between Lessor and Tenant. Lessor and Tenant mutually acknowledge
that no business or financial relationship exists between them other than as Lessor and Tenant, and
that Lessor is not responsible in any way for the debts of Tenant or any other Party.
19.22 Authorization. Lessor and Tenant (each, a "signing party") each represents and
warrants to the other that the person or persons signing this Lease on behalf of the signing party
has full authority to do so and that this Lease binds the signing party. Concurrently with the
execution of this Lease, the Tenant shall deliver to the Lessor a certified copy of a resolution of
the signing party's board of directors or other governing board authorizing the execution of this
Lease by the signing party.
19.23 Recording. This Lease itself shall not be recorded, but in the event that the Tenant
encumbers the leasehold as set forth in a memorandum hereof may be recorded in the form of
Exhibit D attached hereto ("Memorandum"). The Memorandum may be executed concurrently
with this Lease and thereafter recorded in the Official Records of the County Recorder on the
Effective Date of this Lease has occurred. Tenant shall be responsible for the payment of all
charges imposed in connection with the recordation of the Memorandum, including, without
limitation, any documentary transfer tax imposed in connection with this transaction and all
recording fees and charges.
Page140
19.24 Exhibits. This Lease contains the following exhibits, schedules and addenda, each
of which is attached to this Lease and incorporated herein in its entirety by this reference:
Exhibit A: Legal Description of the Premises
Exhibit B: Project Description
Exhibit C: Best Management Practices Fact Sheets
Exhibit D: Form of Memorandum of Lease
19.25 Consent/Duty to Act Reasonably. Except as otherwise expressly provided herein,
whenever this Lease grants Lessor and/or Tenant the right to take any action, grant any approval
or consent, or exercise any discretion, Lessor and/or Tenant shall act reasonably and in good faith
and take no action which might result in the frustration of the other Parry's reasonable expectations
concerning the benefits to be enjoyed under this Lease.
19.26 Counterparts. For the convenience of the Parties to this Lease, this Lease may be
executed in several original counterparts, each of which shall together constitute but one and the
same agreement. Original executed pages may be assembled together into one fully executed
document.
19.27. No Merger. The interests created by this Lease shall not be extinguished by merger
of any or all of the ownership interests the Premises or the Improvements in one person or entity.
(Signatures on following page)
Page 141
IN WITNESS WHEREOF, the Parties have executed this Ground Lease on the dates indicated
next to each of the signatures of their authorized representatives, as appear below:
ATTEST:
DAISY GOMEZ
Clerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALHO_
City Attorney
Ryan U. H dge
Assistant City Attorney
lU {bE e%a;Ec.JCE�J C>NL6 C�a- Orr
ODD MET.
RECOMMENDED FOR APPROVAL
STEVEN A. MENDOZA
Executive Director
Community Development Agency
TENANT
By: Lux
CESAR COVARRUBIAS
Treasurer, THRIVE Santa Ana, Inc_
Dated:
By:ao
SANDRA ORTEGA
Secretary, THRIVE Santa Ana, Inc.
Dated:
Page142
EXIIIBIT "A"
TO
GROUND LEASE
PROPERTY LEGAL DESCRIPTION
1901 West Walnut Street ("Property") is situated in the State of California, County of Orange,
and the City of Santa Ana. The Property has a lot size of 16,558 square feet (.38 acre) as shown
on a Map recorded as parcel 8 in Book 7 on page 332 of Assessor Parcel Maps of Orange County,
California. The Property is bounded on its easterly edge by South Daisy Avenue and its southern
edge by West Walnut Street. The following is the Property Legal Description:
P BK 54 PG 50 PAR 3
Page 143
EXHIBIT `B"
TO
GROUND LEASE
PROJECT DESCRIPTION
Tenant proposes a micro -farm use for the Premises. Operation of a community micro -
farm and related activities, including, but not limited to, production and distribution of fresh
vegetables, flowers, other ornamentals, and fruit, also hosting weekly open-air markets and
community activities that promote health. The site will include raised garden beds, a work area,
produce puck -up counter, and lunch tables. An on -site parking lot will be used on weekends as
an open-air market area. The micro -farm will host community workshops and events in line with
the mission of THRIVE Santa Ana.
Page144
EXIHBIT "C"
TO
GROUND LEASE
BEST MANAGEMENT PRACTICES
("BMEs" Fact Sheets)
Best Management Practices can be found at: http://www.ocwatersheds.com/documentsibmp
which website may change from time to time.
BMPs apply to the TENANT's defined Premises and BMPs also apply to the TENANf's
Contractor therefore TENANT shall cause Contractor to be responsible for implementing and
complying with all BMP Fact Sheet requirements that apply to construction activity with respect
to the Improvements, and also including, without limiting the generality of the foregoing, site
preparation, landscaping, installation of utilities, street construction or improvement and grading
or filling in or on the Premises. TENANT is to be aware that the BMP clause within this Lease,
along with all related BMP Exhibits, may be revised, and may incorporate more than what is
initially being presented in this Lease. Suggested BMPs Fact Sheets may include, but may not
be limited to, the following list shown below and can be found at:
http://www.ocwatersheds.conVdocuments/bmp/industrialcommercialbusinessesactivities (which
website may change from time to time):
IC3 Building Maintenance
IC4 Carpet Cleaning
IC6 Contaminated or Erodible Surface Areas
IC7 Landscape Maintenance
IC9 Outdoor Drainage from Indoor Areas
ICI Outdoor Loading/Unloading of Materials
IC 12 Outdoor Storage of Raw Materials, Products, and Containers
IC14 Painting, Finishing, and Coatings of Vehicles, Boats, Buildings, and Equipment
IC15 Parking & Storage Area Maintenance
IC17 Spill Prevention and Cleanup
IC21 Waste Handling and Disposal
IC22 Eating and Drinking Establishments
IC23 Fire Sprinkler Testing/Maintenance
IC24 Wastewater Disposal Guidelines
Page 145
EXHIBIT "D"
TO
GROUND LEASE
FORM OF MEMORANDUM OF LEASE
ul au =1173 ZHU Li 19yaw W.W
This is a Memorandum of Lease ("Memorandum") made and entered into as of this
day of 20_, by and between the CITY OF SANTA ANA, a California charter city
in the County of Orange of the State of California ("Lessor"), and THRIVE Santa Ana, Inc., a
501(c)(3) tax exempt California public benefit corporation ("Tenant'), upon the following terms:
1. Lease. The provisions set forth in a written lease between the parties hereto dated
("Lease"), are hereby incorporated by reference into this Memorandum.
2. Subject Premises. The Premises which are the subject of the Lease are more particularly
described as on Exhibit A, attached hereto
3. Effective Date of Lease. The Lease shall be deemed to have commenced on (the
"Effective Date") as set forth within the terms of the Lease.
4. Term. The Term of the Lease shall be Ninety -Nine (99) years from the Effective Date as stated
in the written Lease.
5. Duplicate Copies of the originals of the Lease are in the possession of the Lessor and Tenant
and reference should be made thereto for a more detailed description thereof and for resolution of
any questions pertaining thereto. The addresses for Lessor and Tenant are as follows:
To the Tenant:
THRIVE Santa Ana, Inc.
P.O. Box 1935
Santa Ana, CA 92702
UCI School of Law Community
Economic Development Clinic
P.O. Box 5479
Irvine, CA 92616-5479
Public Law Center
c/o Housing and Homelessness
Prevention Unit
601 Civic Center Drive West
Santa Ana, CA 92701
Page 146
To the Lessor:
City of Santa Ana
Community Development Agency
20 Civic Center Plaza (M-25)
P.O. Box 1988
Santa Ana, CA 92702
With courtesy copy to
City of Santa Ana
City Attorney's Office
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, CA 92702
6. Purpose. It is expressly understood and agreed by all Parties that the sole purpose of this
Memorandum is to give record notice of the Lease; it being distinctly understood and agreed that
said Lease constitutes the entire lease and agreement between Lessor and Tenant with respect to
the Premises and is hereby incorporated by reference. The Lease contains and sets forth additional
rights, terms, conditions, duties, and obligations not enumerated within this instrument which
govern the Lease. This Memorandum is for informational purposes only and nothing contained
herein may be deemed in any way to modify or vary any of the terms or conditions of the Lease.
In the event of any inconsistency between the terms of the Lease and this instrument, the terns of
the Lease shall control. The rights and obligations set forth herein shall be binding upon and inure
to the benefit of the Parties hereto and their respective heirs, representatives, successors, and
assigns.
(Signatures on followingpage)
Page 147
IN WITNESS WHEREOF, the Parties hereto have executed this Memorandum pursuant to due
authorization on the dates herein acknowledged.
ATTEST:
DAISY GOMEZ
Clerk of the Council
APPROVED AS
SONIA R. CAR
City Attorney
Ryan O. Hodge
Assistant City A
RECOMMEND:
CITY OF SANTA ANA
KRISTINE RIDGE
Citv Manaser
-Mks FA6E lS ?Pro--V- 6F
�' NOf Fc�2 s�� t� �,2E✓ �
*>E ExEwt ONCE 62avN9
LC-ASlr-- IS EEC LA- q
STEVEN A. MENDOZA
Executive Director
Community Development Agency
By:
CESAR COVARRUBIAS
Treasurer, THRIVE Santa Ana, Inc.
Dated:
By.
SANDRA ORTEGA
Secretary, THRIVE Santa Ana, Inc.
Dated:
Page 148