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THIS LEASE made this

LEA S E

d ..5~..tf;r day of !l:..wAA1963, by the County of Los Angeles, hereinafter called"Courrt.yt", and Stara.e,. DiUer, an lndlV14U&1, end JOJ1"&1,

Co1'pOraUOft, a oorpon.UOft, 301nt Yeftturel'B

hereinafter called llLessee", WITNESSETH:That in consideration of the terms, conditions,

and covenants herein contained, to be kept and performedby the parties hereto and the strict, prompt and punctualperformance of each of the terms, conditions and covenantsby Lessee on his part agreed to be kept and performed,Cpunty by these presents does lease and demise unto Lessee,and Lessee by these presents does lease, hire, and takefrom County the following described parcel or parcels ofland or water, consisting of a total of ~5~38_··~,_6~96 _square feet and situated in the Marina del Rey Small CraftHarbor of the County of Los Angeles, State of California,hereinafter sometimes referred to as Parcel or ParcelsNumber _e1JltI."...y ~~:-·_t_"'__ and_._n1not__ ·_·een__ (1_8_._1_9_) _

/

legally described in Exhibit HAllattached hereto andincorporated herein.

TO HAVE AND TO HOLD said leased premises for theterm of this lease and upon terms and conditions as follows:

1. DEFINITION OF TERMS.The following words have in ~his lease the signifi-

cance attached to them in this paragraph, unless otherwiseapparent from the context:

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"BOARD!! means the Board of Supervisors of theCounty of Los Angeles.

"COMMISSION" means the Small Craft Harbor AdvisoryCommission of the County of Los Angeles.

"COUNTY" means the County of Los Angeles."DEPARTMENT" means the Department of Small Craft

Harbors of the County of Los Angeles."DESIGN CONTROL BOARDlY means the board appointed

by the Board of Supervisors to review and approve thearchitectural design and arrangement of facilities con-structed at Marina del Rey.

lIDIRECTOR" means the Director of the Department ofSmall Craft Harbors of the County of Los Angeles.

IIEN GINEER " means the County Engineer of the Countyof Los Angeles.

The word "PROPERTYII includes both real and personalproperty.

The word "SECTIONII means a section of this lease.The words "SHALLII and lYWILLlIare mandatory and

the word "MAY" is permissive.The word "SUBLESSEE" includes licensee, permittee,

concessionaire, assignee or transferee of or from Lesseewith respect to any interest in the property demised underthis lease.

Words and phrases contained herein shall be con-strued according to the context and the approved usage of

.the American language, but technical words and phrases,and such others as have acqUired a peculiar and appropriatemeaning by law, or are defined in the preceding paragraphof this section, are to be construed according to suchtechnical, peculiar, and appropriate meaning or definition.

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Words used in this lease in the present tenseinclude the future as well as the present; words used in

the masculine gender include the feminine and the neuterand the neuter includes the masculine and feminine;the singular number includes the plural and the pluralthe singular; the word ffpersonffincludes a corporationas well as a natural person.

2. TERM.

The term of this lease shall bes1m (60)

years, commencd.ng upon the ..•t'!'l•.••rs..o!.Jltt.....- day19d.A. D., •.••of lull

3. PURPOSE OR USE OF PROPERTY.The leased premises shall be used only and exclusively

for ClUb, reBtaurant and lIotel or boa:Hl, or either ot them,

Wh10h lIust lnolude U'! MeAOrM', apartments in addHjon opj;t onal

and such other related uses and purposes incidental theretoas are specifically approved and for no other purposeswhatsoever without the written approval of County; the usesand purposes above listed are set forth to define the maxi-mum contemplated scope of permissible uses and purposes,and their enumeration is not intended to be authorizationfor any specific use or purpose.

It is also expressly understood that the uses of thesaid premises which are permitted hereinabove do not includethe following:

A ••• hel W••

:I ...Ioat or V.hicle Repatrs other than mor a.meiDI orowner 1IalattmlPo.

c ...Live Ba1t W.BD •••Sportt1shtu Gr fhl1"1ter Boat aotiV11i1fUlI

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There shall be no actual construction upon saidpremises except that required by Sections 5 and 6 hereof,and except that additional construction allowed upon approvalof Director pursuant to Section g hereof.

Lessee shall conform to and abide by all rules andregulations relating to the operations herein authorizedand shall be subject at all times to applicable rules,regulations, resolutions, ordinances and statutes of theCounty of Los Angeles, State of California, the FederalGovernment, and all other governmental agencies whereapplicable; and where permits are required for such operationsthe same must be first had and obtained from the regulaLorybody having jurisdict10n tber-~£ be£~re such oper~tion is

und$rtaken.4. ACTIVE PUBLIC USE.The ultimate object of this lease is the complete

and continuous use of the premises herein demised by andfor the benefit of the public, without discriminationas to race or religion, the immediate object being thedevelopment and realization of the greatest possible revenuetherefrom. It is agreed that said immediate and ultimateobjects are consistent and compatible. Accordingly, L~sseecovenants and agrees that he will operate said premisesfully and continuously to the end that the public may enjoymaximum benefits and County may obtain maximum revenuetherefrom.

In the event of any dispute or controversy relatinghereto, this lease shall be construed with due regard tothe aforesaid objects.

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5. PLANS AND SPECIFI CATIDNS FOR REQUIRED -CONSTRUCTION.

Prior to commencing construction and within .1'*7(60) days after the commencement of the term

of this lease, Lessee shall file with Department six (6) setsof schematic plans and outline specifications, prior tocommencing construction and within __~A1ne~~~.tr~.·~_(~90~)L- _days after the approval of schematic plans and outlinespecifications, Lessee shall file with Department four (4)sets of preliminary plans and outline specifications, priorto commencing construction and within ODe hundred twent¥ (120)days artier the approval of' the preliminary plans and outlinespecifications Lessee shall file four (4) sets of finalplans and specifications for the construction of the followingimprovements upon the aforesaid premises:'lub, re"'vran& and

the cost of which land and water improvements shall beestimated to be not less than the total sum of I1ve HUndred

Such final plans and specifications shall conform tothe Minimum Standards of Construction and Architectural Treat-ment for Marina del Rey Small Craft Harbor as heretoforadopted by the Board on January 3, 1961 and subsequent amend-ments thereto, and shall be subject to approval by Director,Design Control Board and Engineer. No constructionshall begin until said Director, Design Control Board andEngineer have approved said final plans and specifications-

No modification of the approved plans and specificationsor of said improvements, inclUding landscaping shall be made

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by Lessee without the prior approval of said Director, DesignControl Board and Engineer.

6. REQUIRED CONSTRUCTION SCHEDULE.Lessee expressly covenants and agrees that within

days afterthe approval of the final plans and specifications asprovided for in Section 5, Lessee shall in good faithcommence construction of the improvements described therein,including required underground laterals for power, light,telephone, television, sewer, water (including fire lines),gas lines and landscaping, in accordance with said approvedplans and specifications, and shall diligently prosecutesuch construction and shall complete the same not laterthan ttWQ ••tumdred tom (240)days thereafter; provided that any delay in construction dueto fire, earthquake, war, labor dispute, or other event beyondcontrol of Lessee shall extend the time in which said construc-tion must be completed by the length of time of such delay.

Failure of Lessee to commence or diligently prosecutesaid work within said time shall, upon written notice thereofto Lessee by Board, ipso facto effect a forfeiture of thislease and all rights of Lessee thereunder.

7. RENTAL PAYMENT SECURITY.County hereby acknowledges receipt from Lessee of

the sum of Port,•• - thousand lipt Hundred 1.1ghtf·fiyeand 1JfJ100 --- ..•..._-- ..__ - Dollars ($ 4),ilh,;:i.14. ••.••__ )

equal to six (6) full monthly installments of square footrental for the demised premises. This sum shall be used andapplied as follows:

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• •One-half of said sum shall be applied toward the

payment of rent first accruing under this lease, and one-halfof said sum shall be retained by County as a guarantee tocover delinquent rent, and shall be so applied. In theevent all or any part of said sum so deposited is appliedagainst any rent due and unpaid, the Lessee shall reimbursesaid deposit, so that at all times during the life of thislease said deposit shall be maintained. Failure to maintainthe full amount of said deposit shall subject this lease toforfeiture. Upon forfeiture or termination of this leaseany portion of said deposit due the Lessee shall be returned.

At any time subsequent to the first five (5) yearsof the term of this lease Lessee may substitute for saidcash deposit to cover delinquent rent a corporate suretybond, issued by a surety company licensed to transactbusiness in the State of California, said bond and companyto be in all respects satisfactory to County, in an amountequal to said deposit.

$. ADDITIONAL CONSTRUCTION.Lessee may, at its own expense, make or construct,

or cause to be made or constructed, improvements other than'those required by Sections 5 and 6, additions, alterations,repairs, or changes in the leased premises prov:i.dedsuchproposed improvements) additions, alterations, repairs, orchanges are within the scope of permissible uses set forthin Section 3, and further provided that each specific pro-posed improvement, addition, alteration, repair, or changemust first have the written approval of Director. Directormay refuse permission for the construction of any proposed

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additional improvement, addition, alteration, repair orchange, and his decision will be final.

If Director approves said proposed construction,Lessee shall submit plans and specifications to Director andEngineer and may commence construction upon receipt ofwritten approval thereof from Director, Design ControlBoard and Engineer and upon compliance with such terms andconditions relating to the construction as Director mayimpose.

9. LANDSCAPING.Lessee shall, at its own cost and expense and to the

satisfaction of County, install and maintain landscapingupon the demised premises. A general layout of proposed land-scaping shall be submitted as part of the plans and speci-fications for all proposed improvements of the site. Thiswill include the landscaping of all areas between any streetand set back lines and such other areas as are necessary tocreate a pleasing development of the project as a whole. Alllandscaping plans and layout must have the approval ofDirector, Design Control Board and Engineer.

10. PERFORMANCE AND SURETY BONDS.Lessee shall, at its own cost and expense, furnish

County three (3) separate corporate surety bonds, in allrespects satisfactory to the County, as follows:(a) Within ten (10 days prior to commencement

of any construction hereunder, Lessee shallfurnish a corporate surety performance bond,issued by a surety company licensed totransact business in the State of California,in an amount equal to fifty per cent (50%)

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of the contract price of any constructionrequired of Lessee pursuant to Sections 5

and 6, said bond and said company to be inall respects, including amount thereof,satisfactory to County, naming Lessee asprincipal and said company as surety, andCounty as obligee, to assure full and satis-factory performance by Lessee of Lessee'sobligation contained in Sections 5 and 6

to bUild, construct, and install improve-ments and landscaping upon the demisedpremises.

(b) Within ten (10) days prior to commencementof any construction hereunder, Lessee shallfurnish a corporate surety bond, issuedby a surety company licensed to transactbusiness in the State of California, withLessee as principal, and said company assurety, and County as obligee, in a sumequal to fifty per cent (50%) of theaforesaid contract price of any construction,guaranteeing payment for all materials, pro-Visions, provender, supplies, and equipment,used in, upon, for or about the performanceof said construction work or for labor donethereon of any kind whatsoever and protect-ing County from any and all liability, lossor damages arising from failure to make suchpayment.

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In the event that Lessee employs a licensedcontractor for the construction hereinbeforerequired and obtains from said contractor orcontractors similar bond or bonds in likeamount, in all respects satisfactory toCounty, County, upon application by Lesseeand upon the naming of County as an additionalobligee under such bond or bonds, will acceptsaid contractor1s bonds in lieu of the bondsotherwise reqUired by this paragraph andparagraph (a) of this Section.

(c) Lessee shall furnish a corporate surety bondin the amount of ••• = ••••••••••

••••• '............... ••• t '. Dollars

($10,000.00- •••••• l, guaranteeing the removalof all debris or submerged craft emanatingfrom the premises herein demised, whether onsaid premises or elsewhere, which may obstructtraffic or interfere in any way with the properuse of the navigable waters of ~~rina del ReySmall Craft Harbor, guaranteeing the removal,prior to the expiration or other terminationof this lease, of all mooring, anchorage andslip facilities, pilings and floats in thewater area, and all improvements on the backland owned, operated or maintained by Lessee,and guaranteeing the leaving of the ground ina level and usable condition and the removalof all facilities not designated by Directorto be left in place; Director shall give

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Lessee thirty (30) days written notice forthe performance of any of the guaranteeshereinbefore provided for.

(d) The Lessee shall have the option to depositwith the County of Los Angeles, cash or UnitedStates Government securities in all respectssatisfactory to the County of Los Angeles inlieu of any corporate surety bonds requiredherein. Said cash or securities shall bedeemed deposited with the County for all thepurposes enumerated herein and shall be sodeposited for the benefit of the County underthe same terms and conditions as set forthherein with respect to corporate surety bonds.11. GROSS RECEIPTS.The term "gross receipts" as used in this lease

is defined to be all money, cash, receipts, assets, pro-perty or other things of value, including but not limitedto, gross charges, sales, rentals, fees and commissionsmade or earned, and all gross sums received or earned byLessee, his assignees, sublessees, licensees, permitteesor concessionaires, whether collected or accrued, from anybusine~s, use or occupation, or any combination thereof,originating, transacted or perfor~ed, in whole or in part,on the premises, including but not limited to, rental,the rendition or supplying of services, and the sale ofgoods, wares or merchandise; less sales and excise taxesapplicable thereto, required to be collected by Lessee, hisassignees, sublessees, licensees and permittees in

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connection with the rendering or supplying of services orgoods, wares or merchandise.

There shall be no deduction from gross receipts forany overhead or cost or expense of operation, such as, butwithout limitation to, salaries, wages, cost of goods,interest, debt amortization, discount, collection, creditcard and bad debt charges, insurance and taxes, except asspecifically provided for herein.

Gross receipts shall include the amount of anymanufacturer's or importer's excise tax included in theprices of any property or material sold, even though themanufacturer or importer is also the retailer thereof, andit is immaterial whether the amount of such excise tax isstated as a separate charge. Gross receipts, however, shallnot include Federal, State, Municipal or other taxes col-lected from the consumer (regardless of whether the amountthereof is stated to the consumer as a separate charge)and paid periodically by Lessee to a governmental agency,accompanied by a tax return or statement, but the amountof such taxes shall be shown on the books and recordselsewhere herein required to be maintained.

12. SQUARE FOOT AND HOLDING RENTALS.Lessee shall pay to County an annual square foot

rental in twelve (12) equal monthly installments. Saidinstallments shall be due and payable in advance uponthe first day of each calender month, starting with thecalendar month next succeeding the date of substantialcompletion of the improvements required to be constructedpursuant to Sections 5 and 6, or starting with the calendarmonth next succeeding the commencement of use by the public

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of any of the improvements required to be constructedpursuant to Sections 5 and 6 or of any portion of thepremises herein demised.

For the purpose of commencing liability forsaid square foot rental, the determination of Directorshall be final as to whether said improvements havebeen substantially completed or whether any of saidimprovements or any portion of the premises are beingused by the public. No use by the public of any ofsaid improvements or of any adjoining portions of theparcel hereby demised shall be made until completionof said improvements as determined by Director.

It is understood and agreed that the date forcompletion of the construction required by Sections 5

and 6, as said date is established in Section 6, is thecompletion date for all of the improvements enumeratedin Section 5. It is further understood and agreed thatLessee may desire to complete the aforesaid improvementsin stages and to progressively commence public use ofthe various portions of said improvements and adjoiningportions of the parcel herein demised as the same may becompleted. In the event of such a program of progressivecompletion and opening to public use, satisfactory toCounty, the annual square foot rental for the portionscompleted and opened to use shall commence accordinglyand shall be eqUitably adjusted in the proportion thatthe improvements and areas completed and opened to thepublic use bear to the whole improvement and area· Thedecision of Director as to said equitable adjustmentshall be final.

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The aforesaid annual square foot rental for thewhole of the premises herein demised shall be ••venteen••• 45./100 •..••••.••••••••••••.cents ($0.1745--) per square footof land area and f!ul1een-_ ....._-- cents ($0. 14-...)per square foot of water area, or the total ofl18btl-three"l'houand Seven It'lUUlN4 SeventY' ••cne an4 1I8!J.OO:.. •.••.. _ ..•__ ••• -Dollars (;~,~1'11.48-"" ....011 •••••• ) •

Prior to the start of square foot rental payments asin this section above provided for, Lessee shall pay tocounty each month in advance a "holding rental" consistingof one-third of the contemplated total monthly installmentof square foot rental, starting on the __-=t~1=ra~~~ _

3_~ __ day of 1\l1J ,19Ea. In the event ofthe start of proportionate square foot rentals under a pro-gram of progressive completion, as in this section aboveprovided for, the tfholding rental" shall be abated for thatportion of the completed improvements and adjoining areathus made subject to square foot rental.

If Director finds that Lessee has completed hisimprovement and construction but cannot utilize it due tofailure of the County to complete roadways, water access,or utility lines, Director shall order the abatement ofall rental payments until water access, roadways andutility lines are provided, which in the opinion of theDirector are available for the operation of the Lessee'sfunctions.

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If Lessee fails to commence or diligently prosecuteconstruction of improvements at the time agreed upon inSection 6, and continues in such failure for ten (10) dayssaid "holding rental" shall increase to one-half of thesaid total monthly installment of square foot rental, payablemonthly in advance starting on the first day of the calendarmonth next succeeding the tenth calendar day of said failure.The determination as to whether Lessee has failed to com-mence or to diligently prosecute construction shall be madeby Director and Director's decision shall be final. IfLessee's said failure to commence or diligently prosecuteconstruction continues for a period of thirty (30) calendardays, the full total monthly installment of square footrental shall be due and payable each month in advance there-after starting on the first day of the calendar month nextsucceeding the end of said thirty-day period.

13. PERCENTAGE RENTALS.The square foot rental agreed upon in Section 12 is

a minimum rental, payable in lawful money of the United States.The money received as square foot rental for any calendarmonth shall be applied to the payment of the percentage rentalfor said calendar month as provided for in this Section 13·

Within fifteen {15} days after the close of each andevery calendar month of the term hereof, Lessee shall pay toCounty a sum in like money, less the amount of the monthlyinstallment of annual square foot rental previously paid forsaid cal~ndar month under Section 12, equal to the total ofthe following for said previous calendar month:

(a) TWENTY Per Cent (20%) gross receipts fromthe rental of boat slips, anchorages,moorings, gear lockers, or storage space;

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· .,(b) TEN Per Cent (10%) of gross receipts from

the launching and retrieving of small boats;(c) TEN Per Cent (10%) of gross receipts from

the dry storage of boats;(d) SIX Per Cent (6%) of gross receipts from

sales of ship chandlery supplies, fishingtackle, paints, varnishes, and similarcommodities;

(e) ONE AND ONE-QUARTER Per Cent (1-1/4%) ofgross receipts from sale of new and usedboats, house trailers, trailer cabanasor cabanas. This percentage does notapply to the sale of used boats whentaken in as part payment for new boatswhere such used boats are disposed ofwithin one hundred twenty (120) daysafter the sale of the new boat;

(f) THREE Per Cent (3%) of gross receipts fromboat haulout, repair, painting and similaractivities;

(g) TEN Per Cent (lO%) of gross receipts frominsurance sales commissions or from broker-age commissions;

(h) ONE AND ONE-HALF Cents ($0.015) per eachgallon of gasoline, diesel fuel or mixedfuel sold or SIX Per Cent (6%) of grossreceipts of such sales, whichever is thegreater;

(i) FIVE Per Cent (5%) of gross receipts fromsales of petroleum or fuel products other

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than those covered by subparagraph (h)above;

(j) THREE Per Cent (3%) of gross receipts fromthe sale of food or food products andalcholic or other beverages served onthe demised premises or prepared on thepremises and served off the premises whenfood sale is the primary purpose;

(k) SIX Per Cent (6%) of gross receipts fromthe sale of packaged liquor;

(1) TEN Per Cent (10%) of gross receipts fromthe sale of alcholic or other beveragesprepared and served on the demised premisesor prepared on the premises and served offthe premises when such sale is the primarypurpose;

(m) FIFTEEN Per Cent (15%) of gross receiptsfrom club initiation fees and club dues;

(n) SEVEN AND ONE-HALF Per Cent (7-1/2%) ofgross receipts from the rental of alldwelling units except trailer-cabana sites,and from guest rooms, meeting rooms or othersimilar space;

(0) TWENTY Per Cent (20%) of gross receiptsfrom rentals or other fees charged for useof trailer-cabana sites;

(p) TWENTY Per Cent (20%) of gross receiptsfrom parking fees;

(q) SIX Per Cent (6%) of gross receipts fromthe operation of sportsfishing boats;

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(r) SIX Per Cent (6%) of gross receipts frommiscellaneous activities such as sports-wear shops, beauty shops, specialty foodshops, and gift shops;

(s) FIVE Per Cent (5%) of gross receipts fromcoin vending machines;

(t) TWENTY-FIVE Per Cent (25%) of grossreceipts received by Lessee from the tele-phone company as compensation for paytelephones located on the leasehold;

(ul FIVE Per Cent (5%) of gross receipts fromany and all service charges or labor charges;

(v) TWENTY Per Cent (20%) of gross receiptsfrom the rental of boats;

(w) FIVE Per Cent (5%) of gross receipts fromall other activities carried on on saidpremises.

If the total of the percentages of gross receiptsagreed to be paid by Lessee for any calendar yearexceeds the sum of the Square Foot Rental, but isless than the total.of monthly payments actuallymade by the Lessee for said calendar yeart Lesseeshall be allowed credit at the end of said calendaryear for the difference between the said total ofpercentages agreed to be paid and said total ofpayments actually made.

If any of the items, services, good or facilitiesmentioned in subparagraphs (a) through (w) of thisparagraph be provided by Lessee or its sublessees,assignees, licensees, concessionaires or permittees,

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• -without the usual charges therefor according to theprice list or schedule provided for in Section 16,or if said usual charge be not collected in full,the proper amount thereof shall nevertheless beincluded in the gross receipts reported by Lesseeand its sublessees, assignees, licensees, con-cessionaires and permittees, and the applicablepercentage thereof paid to County.14. RENT RENEGOTIATION TO MEET LEGAL REQUIREMENTS.Section 26)62 of the Government Code requires that

each lease provide that the square foot and percentage rentalsbe subject to increase if and when the Board of Supervisorsis required to increase such rates to meet its obligationsunder the Act (Govt. Code, Title 3, Div. 2, Pt. 2, Ch. 14)and the Bond Resolution described in Section 46 of thislease.

In the event that the Board of Supervisors determinesthat it is required to increase the amount of rentals tomeet such obligations, it may increase the square foot andpercentage rentals without limit except that each parcelleased shall bear no more than its proportionate share ofsaid increase as reasonably determined by Director. Rentalincreases under this section shall not be made during thefirst five (5) years of the term hereof, nor more oftenthan every ten (10) years thereafter.

15. GENERAL RENT RENEGOTIATION AND ARBITRATION.Except as provided in Section 14, the square foot and

percentage rentals hereinbefore provided for shall applyand be in effect for the first *••• .,..... (21) yearsof the term hereof. At the end of said period, and at theend of every _-':::'-::::::.:::"--J.(1O;:::;. ::;J)L.. _ year period thereafter,

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••the said rentals shall be readjusted as providedhereinafter.

Such rentals shall be readjusted by Lessee and County,in accordance with standards of and for fair market valuehereinafter set forth, at some time not more than nine (9)months and not less than six (6) months before the beginningof each such period, in the event Lessee and County cannotagree upon the readjustment of rentals, the same shall bedetermined by a board of three (3) real estate appraisers,one of whom shall be appointed by County, one by Lessee, andthe third by the two (2) appraisers so appointed.

If the rentals have not been readjusted by mutualagreement within the three-month period above prescribed,County shall give to Lessee a written notice demanding sub-mission to said board of real estate appraisers and nominatingthe person to act as real estate appraiser on behalf of County.Within fifteen (15) days from the service of such noticeLessee shall appoint its real estate appraiser and notifyCounty of such appointment. If either party shall not havenotified the other in writing of the appointment of its realestate appraiser, the Presiding Judge of the Superior Courtof the State of California, in and for the County of LosAngeles, shall, upon request of either party, appoint thereal estate appraiser for the party so in default. If thetwo (2) real estate appraisers so chosen shall be unable toagree upon the third real estate appraiser within ten (10)days after the appointment of the second real estate appraiser,the third real estate appraiser shall be appointed by thePresiding Judge of said Superior Court upon request of eitherparty. Any vacancy in the board of real estate appraisersshall be filled by the party who or which made the original

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appointment to the vacant place. If not so filled withinten (10) days from commencement of said vacancy, the vacantposition shall be filled by the said Presiding Judge uponrequest of either party.

The board of real estate appraisers shall, immediatelyupon the appointment of its members, enter upon the dischargeof its duties and determine the amount of readjusted rentalsand notify the parties thereof in writing within sixty (60)days after its appointment. A majority of the real estateappraisers who agree thereto may readjust such rentals, suchreadjustment to be based upon a determination of the fairmarket value of this lease, taking into consideration the usespermitted thereunder and all of its terms, conditions, andrestrictions, franchise value, earning power, and all ofthe factors and data relating to such value reqUired or properto be considered in determining the fair market value ofleaseholds tmder the laws of eminent domain in the State ofCalifornia; also prOVided that at all times during the termof this lease the total of such rentals shall be in suchamount that the property hereby demised ::,.lallproduce atleast its proportionate share of the revenue required byGovernment Code, Section 26360 and the revenue required tomeet the obligations of County under that certain Revenue BondResolution of the County Board of Supervisors referred to inSection 46; and, notwithstanding the renegotiation andarbitration provisions of this Section 15, the minimum rentalunder this lease shall never be lower than the product of

-la And ~oo. •••w ••• .cents ($0·06".. •••---••••••·)multiplied by the square feet of the leased land and waterarea. In the event said real estate appraisers fail todetermine and give notice of the amounts of readjusted

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I . •• ••rentals within sixty (60) days, a new board of real estateappraisers shall be appointed in the manner hereinbeforeprescribed.

If for any reason said readjusted rentals shall notbe finally determined until after the beginning of any periodfor which the same must be readjusted, Lessee shall continueto pay rentals at the former rate as a credit against theamount of the readjusted rentals when finally determined,provided, however, that the amounts fixed as the readjustedrentals shall accrue from the beginning of said period andproper adjustment shall be made for payments made by Lesseeat the former rates during said interim. The costs andexpenses of each of the two (2) real estate appriasersappointed by the parties shall be borne by the party $0

appointing. Costs and expenses of the third real estateappraiser shall be equally divided between the parties.

16. CONTROLLED PRICES.Lessee shall at all times maintain a complete list

or schedule of the prices charged for all goods or services,or combinations thereof, supplied to the public on or fromthe premises hereby demised, whether the same are suppliedby Lessee or by its sublessees, assignees, concessionaires,permittees or licensees.

Said prices shall be fair and reasonable, based uponthe following two (2) considerations:

First, that the property herein demised is intendedto serve a public use and to provide needed facilities tothe public at fair and reasonable cost; second, that Lesseeis entitled to a fair and reasonable return upon his invest-ment pursuant to this lease-

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In the event that Director notifies Lessee that anyof said prices are not fair and reasonable, Lessee shall havethe right to confer with Director and to justify said prices.If, after reasonable conference and consultation, Directorshall determine that any of said prices are not fair andreasonable, the same shall be modified by Lessee or itssublessees, assignees, concessionaires, permittees orlicensees, as directed.

The Lessee may appeal the determination of the Directorto the Board of Supervisors, whose decision shall be finaland conclusive. Pending such appeal, the prices fixed bythe Director, shall be the maximum charged by the Lessee.

17. MONTH TO MONTH TENANCY.If Lessee holds over after the expiration of this

lease for any cause, such holding over shall be deemed to bea tenancy from month to month only, at the same rental permonth and upon the same terms, conditions, restrictions andprovisions as herein contained.

Such holding over shall include any time employed byLessee to remove machines, appliances and other equipmentduring the thirty day period hereinafter provided for suchremoval.

18. DISPOSITION OF INSTALLATIONS OR IMPROVEMENTS.Title to all structures, buildings or improvements con-

structed by Lessee upon the demised premises, and all alterations,additions, or betterments thereto, shall remain in Lessee untiltermination of this lease; and upon such termination, whetherby expiration of the term hereof, cancellation for good cause,forfeiture, or otherwise, title to said structures, bUildings,improvements and all alterations, additions or bettermentsthereto, and all improvements made to or upon said premises,

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• .,shall, at the option of County, vest in County withoutcompensation therefor to Lessee, and said structures, buildings,and improvements shall remain upon and be surrendered withthe premises as part thereof-

However, in the event of termination or expiration ofthis lease, the County may require the Lessee to remove, atthe sole cost and expense of Lessee, and not later than thetermination or expiration date, all works, structures andimprovements of any kind whatsoever placed or maintained onsaid premises, whether below, on or above the ground byLessee or others, including, but not limited to, wharves,piers, docks, slips, bulkheads, seawalls, piling, channels,concrete foundations, structures and bUildings; and Lesseeshall, upon the expiration of this lease, immediately restore,and quit, and peacefully surrender possession of, said premisesto County in at least as good and usable condition, acceptableto the Director, as the same were in at the time of firstoccupation thereof by Lessee or others, ordinary wear andtear excepted, and shall, in any event, leave the surface ofthe ground in a level, graded condition, with no excavations,holes, hollows, hills or humps. Should Lessee fail to soremove said structures, buildings and improvements and restoresaid premises, County may sell, remove or demolish the same,in event of which sale, removal or demolition Lessee shallreimburse County for any cost or expense thereof in excess ofany consideration received by County as a result of such sale,removal or demolition.

Prior to such termination Lessee shall remove at itscost and expense such machinery, appliances or fixtures asare not firmly affixed to said structures, buildings andimprovements; should Lessee fail to so remove said appliances

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••or fixtures prior to such termination, Lessee shall lose allright, title and interest in and thereto, and County mayelect to keep the same upon the premises or to sell, remove,or demolish the same, in event of which sale, removal ordemolition Lessee shall reimburse County for any cost orexpense thereof in excess of any consideration received byCounty as a result of said sale, removal or demolition.

Title to all utility lines, switchboards, transformervaults and all other service facilities constructed orinstalled by Lessee upon the demised premises shall vest inCounty upon construction or installation.

19. PLACE OF PAYMENT AND FILING.All rentals shall be paid to and all statements and

reports herein required shall be filed with Department.Checks, drafts and money orders shall be made payable tothe County of Los Angeles.

20. SERVICE OF WRITTEN NOTICE OR PROCESS.If Lessee is not a resident of the State of California,

or is an association or partnership without a member orpartner resident of said state, or is a foreign corporation,Lessee shall file with Department a designation of a naturalperson residing in the County of Los Angeles, State ofCalifornia, giving his name, residence, and business address,as the agent of Lessee for the service of written notice orfor service of process in any court action between Lesseeand County, arising out of or based upon this lease, and thedelivery to such agent of written notice or a copy of any pro-cess in such action shall constitute a valid service uponLessee.

If for any reason service of such written notice orof such process upon such agent is not possible, then Lessee

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•• ••may be personally served with such written notice or processoutside of the State of California and such service shallconstitute valid service upon Lessee; and it is furtherexpressly agreed that Lessee is amenable to such processand submits to the jurisdiction of the court so acquiredand waives any and all objection and protest thereto.

Written notice shall be deemed sufficient if saidnotice is deposited in the United States mail, postage pre-paid, addressed to Lessee at the premises above describedor to such other address that Lessee may in writing file withDirector; provided, however, that nothing herein containedshall preclude or render inoperative service of such noticeupon the Lessee in the manner prescribed by law.

21. DEFAULT.This lease is made upon the condition that if the

rents or other sums which Lessee herein agrees to pay, orany part thereof, shall be unpaid on the date on which thesame shall become due, or if other default be made in anyof the terms, agreements, conditions or covenants hereincontained on the part of Lessee, or should Lessee abandonor cease to use the premises for a period of thirty (30) daysat anyone time, except when prevented by fire, earthquake,strikes or other calamity beyond its control, then and insuch event, at the option of County as evidenced by resolutionof Board, this lease shall be forfeited, and County mayexercise all rights of entry and re-entry upon the demisedpremises and may operate for its Ohm and sole benefit saidpremises and all improvements thereon.

Lessee shall not be considered in default as to anyprovision of this lease when such default is the result of,or pursuant to, any process, order or decree of any courtor regulatory body of competent jurisdiction.

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.,No default shall be declared by County, as to any breach

which may be cured or obviated by Lessee, until the expirationof thirty (30) days after written notice by County to Lessee ofsuch default, during which thirty (30) day period Lessee shallhave the right to cure or obviate said default, provided,that only ten (10) days written notice and time to cure shallbe required and allowed in the case of failure to pay rent orother sums herein provided to be paid by Lessee.

22. SUBLEASE, ASSIGNMENTS, AND SUCCESSORS.At least thirty (30) days written notice of intention

to sublet portions of the demised premises to others shall begiven to Director. During said thirty day period, Directorshall approve or disapprove said proposed sublease. In theevent of disapproval, said proposed sublease shall not bemade. The gross receipts of any sublessee under any suchsublease shall be included within the definition of "GrossReceipts" as set forth in Section 11. Any and all sublesseesshall be subject to and bound by each and all of the termsand conditions of this lease and in particular those pertainingto control of prices pursuant to Section 16. The term llsub-lease" as used in this paragraph shall include any license,permit, concession, assignment or transfer of any interest inOr to said property by Lessee, and the term "sublessee1T shallinclude any licensee, permittee, concessionaire, assignee ortransferee of or from Lessee. Lessee may, without prior ap-proval of the Director, sublease portions of the demised prem-ises (including, but not limited to, single residential units,boat slips, and dry storage racks) for a period not to exceedone year, for individual, nonbusiness, noncommercial uses·Lessee may at any time request approval by the Director of aplan to sublease specific residential units for stated periodsin excess of one year. No condominium or cooperative dwellingplan of any kind shall be employed without the approval of theDirector.

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• •Lessee may, with the consent of County, give, assign,

transfer, mortgage, hypothecate, grant control of, or encumberLessee's interest under this lease and the leasehold estateso created, to a bona fide lender on the security of theleasehold estate, and Lessee may execute any and allinstruments in connection therewith necessary and proper tocomplete such loan and perfect the security therefor to begiven to such lender. Any such bona fide lender shall havethe right at any time during the term of the loan and whilethis lease is in full force and effect:

(a) To do any act or thing required of Lesseein order to prevent a forfeiture of Lessee'srights hereunder and all such acts or thingsso done shall be as effect to prevent aforfeiture of Lessee's rights hereunder asif done by Lessee.

(b) To realize on the security of the leaseholdestate and to acquire and succeed to theinterest of Lessee hereunder by foreclosureor by a deed or assignment in lieu of fore-closure and thereafter at such lender's optionto convey, assign, or sublease the interestor title to said leasehold estate to anyother person subject to all the'terms, condi-tions, and covenants of this lease. Two (2)copies of any and all security devices orinstruments shall be filed with Directorprior to the effective date thereof, andLessee shall give Director prior writtennotice of any changes or amendments thereto.

Except as in this Section 22 specifically hereinbeforeprovided, Lessee shall not, either directly or indirectlygive, assign, hypothecate, encumber, transfer, or grant

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• •control of this lease or any interest, right or privilegetherein, or sublet the whole or any portion of the demisedpremises or license the use of the same in whole or in part.Neither this lease nor any interest therein shall be assignable,or transferable in proceedings in attachment, garnishment, orexecution against Lessee, or in voluntary or involuntaryproceedings in bankruptcy or insolvency or receivership takenby or against Lessee or by any process of law, and possessionof the whole or any part of the demised premises shall not bedivested from Lessee in such proceedings or by any process oflaw, without written consent of County. Any breach of theprovisions of this paragraph shall give County the right toterminate this lease immediately-

County agrees that it will not terminate said leasebecause of any default or breach thereunder on the part ofLessee if the holder of a trust deed, within thirty (30) daysafter service of written notice on said holder by the Countyof its intention to terminate this lease for such default orbreach, shall (1) cure such default or breach if the same canbe cured by the payment or expenditure of money prOVided tobe paid under the terms of this lease, or if such default orbreach is not so curable, if said holder shall within saidthirty-day period commence and thereafter diligently pursueto completion proceedings for foreclosure and sale under andpursuant to the trust deed, and (2) shall keep and performall of the covenants and conditions of this Lease providedherein to be kept and performed by Lessee until such timeas said leasehold shall be sold upon foreclosure pursuant tosaid trust deed or shall be released or reconveyed thereunder;provided, however, that if the holder of a trust deed shallfail or refuse to comply with any and all of the conditions

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·. ••of this paragraph, then and thereupon County shall bereleased from the covenant of forebearance herein contained;and any notice provided for in this paragraph shall beserved in the same manner as provided in Section 20 of thislease, and shall be delivered or directed to said holder atits address as last shown on the records of County.

Each and all of the provisions, agreements, terms,covenants and conditions herein contained to be performed,fulfilled, observed and kept shall be binding upon the heirs,executors, administrators, successors and assigns of therespective parties hereto, and all rights, privileges andbenefits arising under this lease and in favor of eitherparty shall be available in favor of the heirs, executors,administrators, successors and assigns thereof respectively;provided, that no assignment or subletting by or through Lesseein violation of the provisions of this lease shall vest anyrights in any such assignment or sublease.

23. LIENS.At least ten (10) days prior to commencement of con-

struction, Lessee shall furnish County with written noticeof intention to commence construction so that County may postupon premises hereby demised a notice of non-responsibility.

24. WAIVER OF CONDITIONS OR COVENANTS.Any waiver by County of any breach of anyone or more

of the covenants, conditions, terms and agreements of thislease shall not be construed to be a waiver of any subsequentor other breach of the same or of any other covenant, con-dition, term or agreement of this lease, nor shall failureon the part of County to require or exact full and completecompliance with any of the covenants, conditions, terms oragreement of this lease be construed as in any manner changing

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•• ~J

the terms hereof or estopping County from enforcing the fullprovisions hereof, nor shall the terms of this lease bechanged or altered in any manner whatsoever other than bywritten agreement of County and Lessee. No delay, failure,or omission of County to re-enter the demised premises or toexercise any right, power, privilege or option, arisingfrom any default, nor any subsequent acceptance of rent thenor thereafter accrued shall impair any such right, power,privilege or option or to be construed as a waiver of oracquiescence in such default or as a relinquishment of anyright. No notice to Lessee shall be required to restore orrevive time as of the essence after the waiver by County ofany default. No option, right, power, remedy, or privilegeof County shall be construed as being exhausted by theexercise thereof in one or more instances.

The rights, powers, options and remedies given Countyby this agreement shall be cumulative.

25. PROPERTY INSURANCE.Throughout the term of this lease and during Lessee's

occupancy of the demised premises, Lessee, at its own costand expense, shall insure against loss of or damage to allbuildings, structures, equipment and improvements thereon,resulting from fire, lightening, vandalism, malicious mis-chief, and those risks ordinarily defined in ltextendedcoverage".

Such insurance shall be in an amount equal to 90% ofthe full replacement value of said bUildings, structures,equipment and improvements, and shall be placed and maintainedwith such insurance company or companies and in such form asshall be satisfactory to County.

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\ . -.. .

All such insurance policies, along with their endorse-ments, shall name County as an insured; upon the occurrenceof any loss the proceeds of such insurance shall be held byCounty in trust for the named insureds as their interestsappear. In the event of such loss Lessee shall be obligatedto rebuild or replace the destroyed or damaged buildings,structures, equipment and improvements to the full satisfactionof County. Said obligation to rebuild or replace is notdependent upon the existence of insurance. County shallreimburse Lessee for said rebuilding or replacement out ofand to the full extent of the proceeds of said insurance aspayments are required for said purposes. Any surplus orproceeds after said rebuilding or replacement shall bedistributed to the named insureds as their interests appear.

Duplicate policy or policies evidencing such insurancecoverage, in such form as shall be acceptable to County, shallbe filed with Director prior to the commencement of construc-tion of such improvements, and such policy or policies shallprovide that such insurance coverage will not be cancelledor reduced without at least thirty (30) days prior writtennotice to Director. At least thirty (30) days prior to theexpiration of any such policy, a certificate showing thatsuch insurance coverage has been renewed shall be filed withDirector.

26. INDEMNITY CLAUSE AND CASUALTY INSURANCE.Lessee shall at all times relieve, indemnify, protect

and save harmless County and its Boards, officers, agents,and employees from any and all claims and liability, inclUdingexpenses incurred in defending against the same, for the deathof or injury to persons or damage to property, including pro-perty owned or controlled by or in the possession of County,

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• •any of its officers, agents or employees, that may inwhole or in part arise from or be caused by (a) the operations,maintenance, use or occupation of the herein demised premisesby Lessee, (b) the acts, omissions or negligence or Lessee,its agents, officers, employees or permittees, or (c) thefailure of Lessee to observe and abide by any of the termsor conditions of this lease or any applicable law, ordinance,rule or regulation; the obligation of Lessee to so relieve,indemnify, protect and save harmless County, and each of itsBoards, officers, and employees, shall continue during anyperiods of occupancy or of holding over by Lessee, its agents,officers, employees or permittees, beyond the expiration orother termination of this lease.

Lessee shall maintain in full force and effect duringthe term of this lease, comprehensive general liabilityinsurance with bodily injury and property damage liabilitylimits of not less than One Hundred Thousand Dollars($100,000) per person and Three Hundred Thousand Dollars($300,000) per occurrence of death or bodily injury andFifty Thousand Dollars ($50,000) per occurrence of propertydamage; and Lessee agrees that County, its Board of Super-visors and members thereof, and County's and Board's officers,agents and employees, shall be named as additional insuredsunder such liability insurance policy or policies.

A duplicate policy evidencing such insurance coverageshall be filed with Director Within ten (10) days of the

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.".'

execution of this lease by County and prior to any entry uponthe premises herein demised, and said policy shall providethat such insurance coverage shall not be cancelled or reducedwithout at least thirty (30) days prior written notice toDirector. At least thirty (30) days prior to the expirationof any such policy, a policy showing that such insurancecoverage has been renewed or extended shall be filed withDirector.

The amounts of casualty insurance by this Sectionrequired shall be subject to renegotiation at the same timeand in the same manner as the amounts of rent hereunder.

27. WORKMEN'S COMPENSATION INSURANCE.Lessee shall maintain in force during the term of

this lease, in an amount and with coverage satisfactory toDirector, Workmen's Compensation Insurance. A certificateevidencing such insurance coverage shall be filed withDirector prior to entry upon the premises herein demised.

28. FAILURE TO PROCURE INSURANCE.In case of failure on the part of Lessee to procure

or renew the herein required insurance, County may, at itsdiscretion, procure or renew such insurance and pay any andall premiums in connection therewith and all monies so paidby County shall be repaid, by Lessee, to County upon demand.

29. TAXES AND ASSESSMENTS.Lessee agrees to pay before delinquency all lawful

taxes, assessments, fees or charges which at any time maybe levied by the State, County or any tax or assessmentlevying body upon any interest in this lease or anypossessory right which Lessee may have in or to the premisescovered hereby or to the improvements thereon by reason ofits use or occupancy thereof or otherwise, as well as all

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• •taxes, assessments, fees and charges on goods, merchandise,fixtures, appliances, equipment and property owned by itin, on or about said premises.

30. ACCOUNTING RECORDS.In order to determine the amount of and provide for

the payment of the rental due hereunder, Lessee shall at alltimes during the term of this lease, and for twelve monthsthereafter, keep, or cause to be kept, locally, to thesatisfaction of Director, true, accurate and completerecords and double-entry books of account, such records toshow all transactions relative to the conduct of operations,and to be supported by documents of original entry such as,but without limit to, sales slips, cash register tapes, andpurchase invoices.

All sales shall be recorded by means of cash registerswhich publicly display the amount of each sale and auto-matically issue a customer's receipt or certify the amountrecorded on a sales slip. Said cash registers shall in allcases have locked-in sales totals and transaction counterswhich are constantly accumulating and which cannot, in eithercaae., be reset, and in addition thereto, a tape located withinthe register 'on-which transaction numbers· and sales' detailsare imprinted. Beginning and ending cash register readingsshall be made a matter of daily record.

No later than the 15th day of each calendar month,'Less¢e shall render to County a detailed statement showinggross receipts during the preceding calendar month, togetherwith the amount payable to .County as elsewhere herein pro-vided, and shall accompany same with remittance of amountso shown to be due.

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•• •Books of account and records hereinabove required shall

be kept or made available at the demised premises or at suchother locations as is agreeable to County, and County shallhave the right at any and all reasonable times to examineand audit said books and records without restriction for thepurpose of determining the accuracy thereof and of the monthlystatements of gross receipts derived from occupancy of thedemised premises.

County may require the installation of any additionalaccounting methods or machines which in its sale discretionit deems necessary.

31. ACCOUNTING YEAR.The term "accounting year II as used herein shall mean

a period of twelve (12) consecutive calendar months, the firstaccounting year commencing concurrently with the beginning ofthe term of this lease and ending on the last day of thetwelfth calendar month following the beginning of said term-thereafter the 1faccounting yearlt shall be each period oftwelve (12) consecutive calendar months.

32. COST OF AUDIT.In the event Lessee does not make available its

original records and books of account at the leased premisesor within the territorial limits of the County of Los Angeles,Lessee agrees to pay all necessary expenses incurred byCounty in conducting any audit at the location where saidrecords and books of account are maintained.

33. ENTRY BY COUNTY.County and its duly authorized representatives or

agents may enter upon said demised premises at any and allreasonable times during the term of this lease for the pur-pose of determining whether or not Lessee is complying with

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• •the terms and conditions hereof, or for any other purposeincidental to the rights of County.

34. RIGHT OF ENTRY AS AGENT.In any and all cases in which provision is made herein

for termination of this lease, or for exercise by County ofright of entry or re-entry upon the demised premises, or incase of abandonment or vacation of the premises by Lessee,Lessee hereby irrevocably appoints County the agent of Lesseeto enter upon the demised premises and remove any and allpersons and property whatsoever situated upon the demisedpremises and place all or any portion of said property, exceptsuch property as may be forfeited to County, in storage forthe account of and at the expense of Lessee.

In such case County may relet the premises upon suchterms as County may deem fit, and if a sufficient sum shallnot be thus realized, after paying the expenses of suchreletting and collecting, to satisfy the rent and other sumsherein reserved to be paid, Lessee agrees to pay any deficiency,and to pay the expenses of such reletting and collecting.

Lessee hereby exempts and agrees to save harmlessCounty from any cost, loss or damage arising out of orcaused by any such entry or re-entry upon the demised pre-mises and the removal of persons and property and storageof such property by County and its agents.

35- MAINTENANCE OF PREMISES.Lessee shall give prompt notice to County of any

fire or damage that may occur from any cause whatsoever.Lessee shall, to the satisfaction of Director, keep andmaintain the leased premises and all improvements of anykind which may be erected, installed or made thereon byLessee in good and substantial repair and condition,

-37-

•including painting, and shall make all necessary repairsand alterations thereto.

County shall not at any time be required to make anyimprovements or repairs whatsoever except that County mayat its sole discretion do any necessary dredging, filling,grading, slope protecting, construction of sea walls, orrepair of water system, sewer facilities, roads, or otherCounty facilities in order to protect the leased premisesor the adjoining premises.

Lessee expressly agrees to maintain the leasehold ina safe, clean, wholesome and sanitary condition, to the com-plete satisfaction of Director and in compliance with allapplicable law. Lessee further agrees to provide proper con-tainers for trash and garbage and to keep the demised premises,both land and water areas thereof, free and clear of rubbishand litter. County shall have the right to enter upon andinspect the said premises at any time for cleanliness andsafety.

36. REPAIRS BY COUNTY.Lessee shall from time to time make any and all

necessary repairs to or replacement of any equipment, structure,structures, or other physical improvements, upon the demisedpremises, in order to comply with any and all regulations,laws or ordinances of the State of California, County ofLos Angeles or other governmental body, which may beapplicable.

If Lessee fails to make any such repairs or replace-ment as required, County may notify Lessee of said defaultin writing, and should Lessee fail to cure said default andmake said repairs or replacements within a reasonable timeas established by County, County may make such repairs or

!

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•replacements and the cost thereof, including, but not limitedto, the cost of labor, materials and equipment, shall becharged against Lessee and shall become a part of the rentalfor the period next following the period of default, or thesame may be prorated over a period of time to be determinedby the County.

3? SPECIAL SERVICES.In addition to the rental charges as herein prOVided,

Lessee shall pay all service charges for furnishing water,power, sewage disposal, light, telephone service, garbageand trash collection and all other utilities, to saidpremises.

38. SIGNS, AWNINGS, UTILITY LINES, AERIALS, ANDANTENNAE.

No signs or awnings shall be erected or maintainedupon the demised premises (other than inside any buildingsconstructed by Lessee or sublessee), except such signs asshow the business or profession of Lessee or sublessee. Allsuch signs must be approved by Director. All utility lines,and specifically the ones for the utilities mentioned inSection 6, shall be underground. Aerials and antennae shallconform to the minimum standards of construction and archi-tectural treatment mentioned in Section 5.

39. HAZARDOUS SUBSTANCES.No goods, merchandise, or material shall be kept,

stored or sold in or on said demised premises which are inany way explosive or hazardous; and no offensive or dangeroustrade, business or occupation shall be carried on thereinor thereon, and nothing shall be done on said premises, whichwill CaUse an increase in the rate of or cause a suspensionor cancellation of the insurance upon said or other premisesand the improvements thereon.

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•No machinery or apparatus shall be used or operated

on said leased premises which will in any way injure saidpremises, or improvements thereon, or adjacent or other pre-mises, or improvements thereon; provided, however, thatnothing in this Section contained shall preclude Lessee frombringing, keeping or using on or about said premises suchmaterials, supplies, equipment and machinery as areappropriate or customary in carrying on its said business,or from carrying on its business in all usual respects.

Open flame welding or burning, gasoline or other fuelstorage is expressly prohibited without prior written consentof the Director.

40. NUISANCE.Lessee shall not permit the property hereby demised to

be used for any unlawful purpose and shall not perform, permitor suffer any act of omission or commission upon or about saidproperty or any buildings or construction thereon which wouldresult in a nuisance or a violation of the laws and ordinancesof the United States, State of California, or the Countyof Los Angeles, as the same may be now or hereafter inforce and effect.

41. RULES AND REGULATIONS.Lessee shall abide by all applicable rules, regulations,

resolutions, ordinances, and statutes of the County of LosAngeles, the State of California or other governmental body,where applicable, respecting the use, operation, maintenance,repair or improvement of the leased premises and equipment,and shall pay for any and all licenses required in connectionwith the use, operation, maintenance, repair or improvementof the leased premises.

42. RESERVATIONSLessee expressly agrees that this lease and all rights

hereunder shall be subject to all prior exceptions, reservations,

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• •leases, licenses, easements, and rights-of-way of recordnow existing in, to, over or affecting the leased premisesfor any purpose whatsoever.

Lessee expressly agrees that this lease and all rightshereunder shall be subject to conditions, covenants, restrictions,rights of way and easements as shown on Los Angeles CountyAssessor's Map No. ee, recorded in Book 1, pages 53 to 70inclusive of Assessor's Maps in the office of the Recorderof the County of Los Angeles, including but not limited tothe right of the County of Los Angeles to install, construct,maintain, service and operate sanitary sewers, fire accessroads, storm drains, drainage facilities, electric powerlines, telephone lines and access and harbor utility ease-ments, together with the right of the County to convey sucheasements and transfer such rights to others.

43. EMINENT DOMAIN.If the whole or any substantial part of the premises

hereby leased shall be taken by any paramount public authorityunder the power of eminent domain then the term of this leaseshall cease as to the part so taken from the day the possessionof that part shall be taken for any public purpose, and fromthat day Lessee shall have the right to either cancel thislease or to continue in the possession of the remainder ofthe premises under the term herein provided, except that thesquare foot rental shall be reduced in proportion to theamount of the premises taken.

All damages awarded for such taking shall belong toand be the property of County; provided, however, that Countyshall not be entitled to any portion of the award made forloss of business installation or improvements belonging toLefi~e.

44. FREE USE OF FACILITIES.There shall be no free use of services or facilities

prOVided on or from said premises which would in any way-41-

• .. , •violate Section 506 of the Bond Resolution incorporated byreference in this agreement.

45. QUIET ENJOYMENT.Lessee, upon performing its obligations hereunder,

shall have the quiet and undisturbed possession of thedemised premises throughout the term of this lease.

46. BOND RESOLUTION.Reference is hereby made to Chapter 14, Part 2,

Division 2, Title 3, of the Government Code of the State ofCalifornia, sometimes referred to as the Act, and to thatcertain resolution of the Board authorizing and providingfor the issuance of $13,000,000 of Marina del Rey Revenue Bondsof 1959 of said County and providing the terms and conditionsfor the issuance of said bonds as adopted by said Board onSeptember 8, 1959, including amendments ordered September 15,1959, and November 10, 1959, which are hereby incorporated byreference in full as part of this agreement.

47. TIME.Time is of the essence of this lease and applies to

all times, restrictions, conditions and limitations containedherein; this lease shall bind Lessee and its sublessees,assigns, successors, heirs, administrators or legalrepresentatives, as the case may be.

48. MULTI-FAMILY PROJECT AND FEDERAL HOUSINGADMINISTRATION FINANCING REQUIREMENTS.

Notwithstanding any other provision of this lease, ifand so long as all or part of this leasehold is used for amulti-family residential project:

(a) The annual ground rental provided in paragraphs 12and 13 hereof for that part of the leasehold used for amulti-family residential project shall not exceed for the

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..

• •first five years of this lease term six per cent (6%) ofan appraisal by County, of the value of the land with improve-ments placed thereon by County but without improvementsplaced thereon by Lessee, and thereafter shall not exceedsix per cent (6%) of the renegotiated value of the land withimprovements placed thereon by County but without improve-ments placed thereon by Lessee. The appraisal by County mustbe approved by the Federal Housing Admlnistration where theleasehold is subject to a mortgage or trust deed insured,reinsured or held by the Federal Housing Commissioner oracquired by him because of default under said mortgage ortrust deed.

The renegotiated value of the land shall be basedupon the value of the land for use as a site for a multi-family residential project, and related uses, or during theperiod of FHA's interest in the leasehold as a site forsuch uses as permitted by the FHA, regardless of the valueof the land if used for other purposes and any renegotiatedground rental shall be based upon such value;

Nothing in this subdivision (a) shall prevent theCounty from increasing the total rentals payable under thislease in such amount that the property hereby demised shallproduce at least its proportionate share of the revenuerequired by Sections 26360 and 26362 of the Government Codeof the State of California and the revenue required to meetthe obligations of the County under that certain bond resolu-tion of the County Board of Supervisors referred to inSection 46.

(b) Upon any default under this lease, where theleasehold is subject to a mortgage or trust deed insured,reinsured or held by the Federal Housing Commissioner, Countyshall give mortgagee and the Federal Housing Commissionernotice in writing, and the mortgagee and the Federal HousingCommissioner, their successors and assigns, shall have the

, I • •right at any time within six (6) months from the date ofsuch notice to correct the default and reinstate the lease,or, if County declares the lease forfeited and securespossession of the leased premises, the mortgagee or theFederal Housing Commissioner within six (6) months of suchforfeiture and securing of possession may elect to requestand receive a new lease running to mortgagee or FederalHousing Commissioner, their successors and assigns, havingthe same provisions and conditions as this lease and havinga term equal to the remaining term of this lease, exceptthat the Federal Housing Commissioner's liability forground rental shall not extend beyond his occupancy there-under, the County to deliver possession of the propertyimmediately upon the execution of such new lease, and themortgagee or Federal Housing Commissioner to pay to Countythe amount of ground rentals due under this lease less anynet rentals or other income which County may have receivedduring the time it may have been in possession of the prop-perty;

(c) County may accept in lieu of the performanceand payment bonds required by this lease, the bond requiredby the Federal Housing Commissioner in connection with con-struction of a project financed with an FHA insured loan,if County finds such bonds to be satisfactory as to formand amount and County is made a co-obligee on such bond; and

(ct) In lieu of the requirements for hazard insurancein this lease, County may accept hazard insurance as requiredby the Federal Housing Commissioner, if the terms of suchinsurance are satisfactory to County, and the County isincluded as in insured under the policy as its interestsmay appear.

-44-

TO 449 C

I (Corporation) JOYRAL CORPORATIO~STATE OF CALIFORNIA } ®COUNTY OF LOS ANGELES SS.

- On October 1 1963'1 . - - before me, the under-',- signed, a Notal')' Public in and for said State. personally appeared

U . J. B Grunauer Jr.ffi " known to"Uleto be tb ••.__ ~ _:I: Frances" Anderson President. and~ ~:-='=.~=,""'--'.=~~~:!!!_----'known to me to be

~ withfn Instru •••en ' k ,Secretary of the corporation that executed the~ wJ\h1J>-Instrumen? o:°b'eh tif m[ y: be the persons wh? executed the

~

aek J d d a 0 t e corporation therein named andm no.~ e ge to ~e that such corporation executed the within i~$tru-

~ ent pursuant to It~ob.y·lawsOra resolution of its board of directors.

• WITNESS my h1~)ld official seal,

I.,,~~::;;ure s~~::~~e~1~2~~~[C~i{N e (Typed or Printed) "-~~~-~

Notal')' Public in and for said State

STATEOF CuJpOllNIA,

County of Los Angeles} .s.

O October 1, 19 63 betN ,--, ore me,the undersigned, a Notary Public in and for said County and State, personaUyappeared STANLEY DII.LJ::R

/ :;; SHEA VY GEl.DMAN

ACKNOWL,EOGMENT-GENERAL-WOLC()'I'TS rORM 232-REV. a-eo

..IN WITNESS WHEREOF, County has, by order of its

Board of Supervisors, caused this lease to be subscribedby the Chairman of said Board and attested by the Clerkthereof, and the Lessee has executed the same the day andyear first hereinabove written.

19kL·

By(CORPORATE SEAL) By ~. _

By \ /0 V J'<fJ L Co R PO is ('-Fn ory.:~ .:":":• C~ IJ~",~/fl /"~-_. President pr-

f\

...~;:::~.~~?v".".-=(.~~::-e:('i'1/-2~"-,..~r.'GORDON T. NESVIGClerk of the Board of (5 EA L)Supervisors

Secretary

By WINIFRED BERNSTEINDeputy

APPROVED AS TO FORM:

THE COUNTY OF LOS ANGELES

By WARREN M. DORNChairman of its Board of

Supervisors

Revised 12-19-61

-45-

• 1 •• . .

LEGAL DESCRIPTION

Marina Del RayLease Parcei No. 19

Parcels 243 and 244, in the County of Los Angeles, Stateof California, as shown on Los Angeles County Assessor's MapNo. 88, recorded in Book 1, pages 53 to 70 inclusive, ofAssessor's Maps, in the office of the Recorder of said county.

Reserving and excepting therefrom unto t~e County of LosAngeles easements for sanitary sewer, fire access and harborutility purposes over those portions thereof designated onsaid map to be reserved by said county for such purposes.

DESCRIPTION APPROVED't\UG,;\ 1 \96\

~BIE 7CountY Engl_

ltV.·· ••DEPUTY

LEGAL DESCRIP7ION

Marina Del HeyLease Parcel No. 18

Parcels 241 and 242, in the County or Los Arigeles' Stateof California, as shown on Los Angeles County Assessor;, MapNo. 88, recorded in Book 1, pages 53 to 70 inclusive, ofAssessor's Maps, in the office of the Recorder of said county.

Reserving and excepting therefrom. unto the Courrty of LosAngeles easements for sani ta.ry sewer,. fire access) storm drainand harbor utility purposes over those portions thereotde-signatad on said ll1ap to be reserved by said county for BUellpurposes.' .

DESCRIPTION APPROVED/lUG:1 11961

~A.LAMBIE.' /,.---4 County' Engl"'"

6 •••• ~.DEPUTY