HomeMy WebLinkAboutReso 21-18 Interim Lease TLC 87-88 833 EmbarcaderoRESOLUTION NO. 21-18
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF MORRO BAY, CALIFORNIA
APPROVING AN INTERIM LEASE AGREEMENT
FOR LEASE SITE 87-88/87W-88W, LOCATED AT 833 EMBARCADERO
THE CITY COUNCIL
City of Morro Bay, California
WHEREAS, the City of Morro Bay is the lessor of certain properties on the Morro Bay
Waterfront described as City Tidelands leases and properties; and
WHEREAS, TLC Family Enterprises ("Tenant") has received Consent of Landowner ("COL")
approval for their proposed redevelopment of Lease Site 87-88/87W-88W (the "Premises"); and
WHEREAS, City desires to lease Premises to Tenant on an interim basis until such time
Tenant completes Concept Plan approval for its redevelopment proposal and negotiates a new long-
term lease agreement; and
WHEREAS, Tenant proposes to manage, operate and maintain the Premises until site
redevelopment occurs, subject to the conditions of the COL.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Morro Bay,
California, as follows:
1. The attached Interim Lease Agreement for Lease Site 87-88/87W-88W is hereby
approved.
2. The Mayor is hereby authorized to execute the Interim Lease Agreement.
PASSED AND ADOPTED by the City Council of the City of Morro Bay at a regular
meeting thereof held on the 2&t day of April, 2018 on the following vote:
AYES:
NOES:
ABSENT
one
Irons, Davis,
None
N
TEST:
IL ti f7 r
Dana Swanson, City Clerk
Headding, Makowetski, McPherson
This INTERIM LEASE (this Lease") is made and entered into by and between the CITY
OF MORRO BAY, a municipal corporation of the State of California herein called CITY and
TLC Family Enterprises, Inc., a California corporation, herein called TENANT (CITY and
TENANT are sometimes collectively referred to as the Parties and individually as the Party.).
WITNESSE
WHEREAS, the State of California
within the CITY limits of CITY to the County
Chapter 1076, Statutes of 1947, as amended
Statutes of 1957, and Chapter 70, Statutes of
may be amended from time to time by the Le
Statutes are expressly recognized and agreed,to
WHEREAS, the Parties hereto
Morro Bay, Lessor
San Luis Obispo in
State of California t
the Superior;
adj udging ar
conveyed by
passed auton
Court of the
d, decreeing.
the,State of
the 17th day of July, 1
WHEREAS,
of
ed certain tide :apd submerged lands located
an Luis Obispo and to its successors, being
Chapter 413, Statutes ;flf 1955, Chapter 1874,
0, first extraordinary session; which Statutes
be in
acts; and
State of
all of which
and effect by the Parties; and
July 17, 1964, the CITY of
d interest of the County of
veyed to said County by the
►ber 14, 1968, in the case of CITY of
and State of California, Defendants, by
in and for the County of San Luis Obispo, #30417,
other things, that the title to said tide and submerged lands so
to the County of San Luis Obispo in trust, as set forth above,
F Morro Bay upon the date of its incorporation as a CITY on
accepts the within Lease with full knowledge there is no warranty
of title in and to the within described premises by CITY to TENANT; and
WHEREAS, in order to develop and improve Morro Bay Harbor and to assist in carrying
out the provisions of the tideland grant as aforesaid, and in order to provide facilities for the
accommodation of those using Morro Bay Harbor, CITY desires to lease to TENANT the within
described property upon the terms and conditions set forth herein; and
01181.0024/466264.5 JWP TLC Family Enterprises, Inc.
WHEREAS, if this Lease is not otherwise terminated, then the Parties intend to work to
negotiate to replace this Lease with another lease, if all the requirements of that certain Consent
of Owner, dated February 28, 2018, and signed by the Parties (COL) are timely met.
NOW, THEREFORE, in consideration of the covenants to be performed and the rental to
be paid by TENANT to CITY, CITY leases to TENANT, and TENANT leases from CITY, all of
the following premises (herein collectively referred to as the Premises) in the CITY of
Morro Bay, County of San Luis Obispo, State of California, described as follows: Lease Sites
87-88/87W48.
This property is delineated on Parcel Map of the CITY of Morro Bay No. 68-30, which
map was recorded on October 10, 1968, in Book 3, Page 10 of Parcel Maps in the Office of the
County Recorder, San Luis Obispo County, California. A copy of said Map is attached hereto as
Exhibit A and made a part hereof by reference.
Article 1 FIXED TERM
Section 1.01 Term.
The term of this Lease shall be deemed to be a period commencing as of April 1, 2018
the "Commencement Date") and shall terminate, without notice, on October 26, 2018, unless
sooner terminated, as herein provided or extended by mutual agreement of the Parties.
Notwithstanding the foregoing, the Parties agree, if this Lease is terminated for any reason, and
(i) if TENANT is in good standing regarding the terms of this Lease, then CITY and TENANT
shall negotiate in good faith a new lease solely for TENANT to continue to operate Under the
Sea Gallery in the downstairs portion of the Premises currently occupied by Under the Sea
Gallery through October 31, 2019, and (ii) if any subtenant and sublease are approved by CITY
for the Premises and is in good standing regarding its sublease, then CITY will allow the
subtenant to remain through October 31, 2019, but that subtenant will then become a tenant of
CITY under terms and conditions of a lease similar to the sublease approved by CITY.
Section 1.02 No Extensions.
Requests for continued use of the Premises shall be treated as an application for a new
lease and shall require appropriate application to the CITY with all required supporting
information and documents, CITY Council approval and the execution of a new CITY lease,
containing the then most current terms, covenants, conditions and rent schedules.
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Section 1.03 Hold Over.
If TENANT holds the Premises after the expiration of the term of this Lease with the
consent of the CITY, express or implied, then such holding over (in the absence of a
written agreement between CITY and TENANT with respect thereto) shall be deemed to create a
tenancy from month -to -month, terminable on thirty -days' written notice from either Party to the
other, at a monthly rental equal to two hundred percent (200%) of the total Rent for the month
immediately preceding the expiration of this Lease, and otherwise subject to each and every
term, covenant and condition of this Lease.
Section 1.04 Replacement.
As of the Commencement Date of this Lease, this Lease shall extinguish and replace
every prior lease between CITY and TENANT respecting the Premises, if any. Any right or
interest held by the TENANT pursuant to any existing lease with respect to the Premises which
is not granted pursuant to this Lease shall be extinguished as of the Commencement Date of this
Lease.
Article 2 RENT
Section 2.01 Annual Minimum Rent.
TENANT agrees to pay to CITY a minimum guaranteed annual rental for the use and
occupancy of the Premises in the amount of $3,000 per month (the "Minimum Rent"), payable in
advance commencing on Aprill and then on the first day of each month during the term of this
Lease; provided, that the Minimum Rent shall be waived for April and May to the extent
TENANT shows proof, satisfactory to the Harbor Director, TENANT has paid, to third parties,
at least $6,000 for necessary cleaning, repair and maintenance to render the currently vacant
Premises habitable and rentable. All Rent, including the Minimum Rent and the Percentage
Rent, shall be paid in lawful money of the United States of America, without offset or deduction
and shall be paid to CITY at the Harbor Department located at 1275 Embarcadero, Morro Bay,
California, or at such other place or places CITY may from time to time designate by
written notice delivered to TENANT.
Section 2.02 Percentage Rent.
A. In addition to the Minimum Rent, TENANT agrees to pay to CITY at the time
and in the manner hereinafter specified, as additional Rent for the use and occupancy of the
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Premises, a sum equal to three percent (3%) of TENANT'S Gross Sales, hereinafter defined, less
the amount of the Minimum Rent paid pursuant to this Lease (the "Percentage Rent").
B. The term "Gross Sales," as used herein, shall mean (subject to the exceptions and
authorized deductions as hereinafter set forth), the total selling price and the total gross amount
received by TENANT from all rentals, merchandise sold and services rendered in, on or from the
Premises by TENANT, its sublessees, licensees, or concessionaires, both for cash and on credit
including, but not limited to, rentals of dockage space, leasing and servicing operations and
ticket sales, and if on credit whether or not payment be actually made therefore, all charges for
services, alterations or repairs made in or upon the Premises; the gross amount received by
TENANT for merchandise sold pursuant to orders received in the Premises, though filled
elsewhere; and the gross amount received by TENANT from any and all other sources of income
derived from the business conducted upon the Premises.
C. Notwithstanding the other provisions of Section 2.04, the term "Gross Sales" shall
not include the following items, and such items may be deducted from Gross Sales to the extent
they have been included therein or have been included in a prior computation of Gross Sales or
for which a Percentage Rent has been paid under this Lease to CITY:
(1) Credits and refunds made to customers for merchandise returned or exchanged;
(2) Any sales or excise taxes otherwise includable in Gross Sales as defined in this
Section because such taxes are part of the total selling price of merchandise or services rendered
in, from, or on the Premises, where TENANT must account for and remit the taxes to the
government entity or entities by which they are imposed; and
(3) With respect to credit card sales, fees retained or withheld by the issuer and/or
merchant bank pursuant to TENANT'S credit card acceptance agreement, and
(4) Rental payments to TENANT from sublessees whose total gross sales are
included in gross sales computations.
D. TENANT shall keep or cause to be kept full, complete, and accurate records, and
books of account in accordance with accepted accounting practices showing the total amount of
Gross Sales, as defined herein, made each calendar month in, on or from the Premises.
TENANT shall keep said records and books of account within San Luis Obispo County and shall
notify CITY in advance of their location at all times. Furthermore, TENANT shall at the time of
sale and in the presence of the customer cause the full selling price of each piece of merchandise,
each rental received and each service rendered in, on or from the Premises to be recorded in a
cash register or cash registers that have cumulative totals and are sealed in accordance with
standard commercial practices. Said records, books of account and cash register tapes, including
any sales tax reports that TENANT may be required to furnish any government or governmental
agency shall at all reasonable times be open to the inspection of CITY, CITY'S auditor, or other
01181.0024/466264.5 JWP Master Lease 11/O1 -4-
authorized representative or agent of CITY. TENANT consents to the release of sales tax
information to CITY and on demand will furnish to CITY a copy of the sales tax reports,
quarterly reports and any audit reports of sales for confidential internal use of the CITY in
determining Gross Sales for TENANT. TENANT consents and authorizes CITY to request such
information directly from the State Board of Equalization or other state agency with which sales
tax information is filed.
E. By July 31 of each year, TENANT shall furnish CITY with a statement, to be
certified by TENANT as current, true and accurate, which shall set forth the Gross Sales of each
department, sublessee, licensee and concession operating in, on or from the Premises for the
previous twelve (12) calendar months, ending June 30, just concluded, and the authorized
deductions, if any, therefrom; and with it TENANT shall pay to CITY the amount of the
Percentage Rent which is due to CITY as shown thereby. If TENANT shall at any time cause an
audit of sales of TENANT'S business to be made by a public accountant, TENANT shall furnish
CITY with a copy of said audit without cost or expense to CITY. CITY may, once in any
twelve-month period, cause an audit of the business of TENANT to be made by a public
accountant of CITY'S own selection. TENANT shall, upon receiving written notice of CITY'S
desire for such an audit deliver and make available all such books, records and cash register
tapes to the public or certified public accountant selected by CITY. Furthermore, TENANT shall
promptly on demand reimburse CITY for the full cost and expense of said audit, should the audit
disclose that the questioned statement or statements understated Gross Sales by five percent (5%)
or more but less than ten percent (10%). In the event that an audit performed at CITY'S request
discloses that TENANT understated Gross Sales by less than 5%, the cost of such audit shall be
paid by CITY. In the event that any audit or other review of records discloses that the amounts
reported as Gross Sales was understated by TENANT by ten percent (10%) or more, CITY shall
not only be entitled to recover from TENANT all costs of audit and review but shall also be
entitled to recover from TENANT a penalty equal to two times the Percentage Rent due pursuant
to this Lease on such unreported amounts. Whenever any audit discloses that Gross Sales were
understated by any amount, TENANT shall immediately pay the additional Percentage Rent
therein shown to be payable by TENANT to CITY, together with interest at the Default Rate
thereon, from the date the Percentage Rent was payable until the date paid.
F. CITY shall be entitled at any time within five (5) years after the receipt of any
such Percentage Rent payment, to question the sufficiency of the amount thereof and/or the
accuracy of the statement or statements furnished by TENANT to justify the same. For the
purpose of enabling CITY to check the accuracy of any such statement or statements, TENANT
shall for said period of five (5) years after submission to CITY of any such statement keep all of
TENANT'S records, including sales tax returns, all cash register tapes and other data which in
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any way bear upon or are required to establish in detail TENANT'S Gross Sales and any
authorized deductions therefrom as shown by any such statements and shall upon request make
the same available to CITY for examination.
Section 2.03 Reimbursements.
If TENANT fails to perform any term or covenant of this Lease, CITY may, but is not
obligated to, perform such term or covenant, and TENANT shall reimburse CITY therefore as
additional Rent hereunder. As an illustration and not as a limitation, if TENANT fails to procure
the insurance required by this Lease, CITY may, but is not obligated to, obtain such insurance,
with the cost of the premiums being due to CITY upon demand as additional Rent.
Section 2.04 Penalty and Interest.
(1) If any Rent is not received within ten (10) days following the date on which the
Rent first became due, TENANT shall pay a late penalty of ten percent (10%) of the amount of
the Rent in addition to the Rent.
(2) In addition to the penalty, TENANT shall pay interest at the rate of one percent
(1%) per month or fraction thereof or the maximum amount permitted by law as of the date this
Lease is signed, whichever is greater (the "Default Rate"), on the amount of the Rent, exclusive
of the penalty, from the date on which Rent first became delinquent until paid. The term "Rent"
includes any sums advanced by the CITY and any unpaid amounts due from TENANT to the
CITY.
Article 3 USE OF PREMISES
Section 3.01 Permitted Uses.
The Premises shall, during the term of this Lease, be used for the purpose of operating
and conducting thereon and therein the uses permitted by, and in compliance with, all
Conditional Use Permits applicable to the Premises, as may be amended from time to time, and
for no other purpose. At the commencement date of this Lease, such uses include Restaurant,
bar, retail sales, docks for commercial and pleasure boats, seafood market and office space.
Section 3.02 Unauthorized Use.
TENANT agrees to allow only those uses authorized in Section 3.01 hereinabove and any
unauthorized use thereof shall constitute a breach of this Lease and shall, at the option of CITY,
terminate this Lease.
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Section 3.03 Operation of Business - Hours of Operation.
Failure to actively and diligently conduct the business authorized herein constitutes a
breach of the agreement and shall, at the option of CITY, terminate this lease.
(1) TENANT shall during the term of this Lease conduct retail sales business of the
nature specified in Section 3.01 of this Lease in the downstairs portion of the Premises in an
efficient and diligent manner and keep the Premises open for the conduct of business
continuously and without interruption for at least six hours each day of the year except one day
each week and legal holidays. This provision shall not apply if the Premises shall be closed and
the business of TENANT is temporarily shut down for a period not to exceed fourteen (14)
calendar days in any calendar year to make necessary repairs, maintenance or other construction
deemed necessary by TENANT. This provision shall not apply if the Premises shall be closed
and the business of TENANT is temporarily shut down as authorized or required by the CITY
Manager or on account of strikes, walkouts, or causes beyond the control of TENANT or for not
more than three (3) days out of respect to the memory of an officer, employee, or close relative
of any officer or employee of TENANT.
(2) TENANT shall operate TENANT'S business on the Premises with due diligence
and efficiency and in like manner as comparable businesses operated in the CITY or the coastal
area of San Luis Obispo County, so as to produce the maximum amount of Gross Sales and gross
receipts from services which may be produced from TENANT'S business; and TENANT at all
times shall carry on Premises, a stock or merchandise of such size, character, and quality as is
reasonable, designed to produce the maximum return to TENANT, when the sale of merchandise
is a permitted use under this Lease.
Notwithstanding the foregoing, CITY understands and agrees the portions of the Premises which
were formerly occupied by it the Hook restaurant (the "Restaurant Space"), and the upstairs
spaces, are now vacant and in need of rehabilitation before they can be properly occupied. Based
on that, CITY agrees TENANT will use its best good faith effort to do what is necessary to make
those areas usable, as soon as possible. CITY and TENANT also agree if that is not possible,
then TENANT shall at least do the following:
(1) Repair, as needed, and maintain the two restrooms for public use during regular business
hours for the Restaurant Space; provided, that if the Parties agree the restrooms can be safely
cordoned off from the rest of the Restaurant Space, then the restricted access shall be installed
and maintained by TENANT and the two restrooms shall be open for public use during the
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regular business hours for the downstairs portion of the Premises currently occupied by Under
the Sea Gallery,
(2) Allow the use of the patio/open air portions of that area to be used by the public similar to
the Harbor Walk and
(3) Improve, to the reasonable approval of the Harbor Director, the aesthetics, housekeeping
and utility of all the publicly viewable portions of the fagade areas and common public open
spaces on the Premises.
Section 3.04 Competition.
During the term of this Lease, TENANT shall not directly nor indirectly acquire or
establish any similar or competing business within a radius of five. (5) miles from the location of
the Premises; provided, however, that TENANT may, with prior written approval from CITY,
own or operate more than one business, whether or not competing and similar along the
Embarcadero upon CITY lease sites. The purpose of this Section is to prevent and prohibit
TENANT from reducing revenue to CITY by diverting business from the operation at the
Premises to another similar business owned by TENANT within the CITY, but not upon a CITY
lease site from which CITY is paid rent based on Gross Sales. In accordance with this Section,
CITY hereby approves TENANT'S current operations at 725 Embarcadero (Rose's Landing).
Section 3.05 Hazardous Materials.
(1) TENANT shall not transport, use, store, maintain, generate, dispose, release, treat
or discharge any "Hazardous Material" (as defined- below) upon or about the Premises (such
activities being hereafter referred to as "Hazardous Materials Activities"), nor permit TENANT'S
employees, agents, or contractors to engage in Hazardous Materials Activities upon or about the
Premises, except as allowed by applicable law. The term "Hazardous Material" for purposes
hereof shall mean any chemical, substance, material or waste or component thereof which is now
or hereafter listed, defined or regulated as a hazardous or toxic chemical, substance, material or
waste or component thereof by any federal, state or local governing or regulatory body having
jurisdiction, or which would trigger any employee or community "right -to -know" requirements
adopted by any such body. All Hazardous Materials Activities at the Premises shall be
conducted strictly in accordance with all applicable laws and regulations. If TENANT shall
transport any hazardous waste from the Premises, then such transportation shall be done only by
a contractor duly licensed to haul hazardous waste and shall use only a duly licensed disposal site
approved by TENANT'S liability insurer.
(2) TENANT shall promptly notify CITY of: (i) any enforcement, cleanup or other
regulatory action taken or threatened by any governmental or regulatory authority with respect to
01181.0024/466264.5 JWP Master Lease ll/Ol -g-
the presence of any Hazardous Material on the Premises or the migration thereof from or to other
property, (ii) any demands or claims made or threatened by any party against TENANT or the
Premises relating to any loss or injury resulting from any Hazardous Material on or from the
Premises, and (iii) any matters where TENANT is required by applicable law to give a notice to
any governmental or regulatory authority respecting any Hazardous Material on the Premises.
CITY shall have the right (but not the obligation) to inspect the Premises, to take such remedial
action on the Premises, as CITY may deem appropriate, and to join and participate, as a party, in
any .legal proceedings or actions affecting the Premises initiated in connection with any
environmental, health or safety law.
(3) If any Hazardous Material is released, discharged or disposed of by TENANT or
its employees, agents or contractors, on or about the Premises in violation of the foregoing
provisions, then TENANT shall immediately notify CITY. CITY may elect either to take such
remedial action as CITY deems appropriate, in which event TENANT shall reimburse CITY for
all costs thereof within ten (10) days after demand, or direct TENANT to perform such
remediation. If CITY directs TENANT to perform the remediation, then TENANT shall
immediately take such remedial action, as CITY shall direct. TENANT shall, properly and in
compliance with applicable laws clean up and remove the Hazardous Material from the Premises
and any other affected property at TENANT'S expense. If CITY directs TENANT to perform
remediation hereunder and if TENANT shall fail to comply with the provisions of this
Section within five (5) days after written notice by CITY, or such shorter time as may be
required by applicable law or in order to minimize any hazard to persons or property, then CITY
may (but shall not be obligated to) arrange for such compliance directly or as TENANT'S agent
through contractors or other parties selected by CITY at TENANT'S expense (without limiting
CITY'S other remedies under this Lease or applicable law).
Section 3.06 Tidelands Trust.
TENANT shall use and occupy the Premises in strict compliance with the Tidelands
Trust purposes under which the Premises or any portion thereof are held by CITY pursuant to the
grants from the State of California as set forth in this Lease.
Section 3.07 Compliance with Law.
TENANT shall, at no cost to CITY, comply with all of the requirements of all local,
municipal, county, state and federal authorities now in force, or which may hereafter be in force,
pertaining to the Premises, and shall faithfully observe in the use of the Premises all local,
municipal and county ordinances and state and federal statutes, rules, regulations and orders now
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in force or which may hereafter be in force (collectively, "Legal Requirements") provided that
TENANT shall not be required to comply with any Legal Requirement imposed by the CITY
that would substantially deprive TENANT of a material benefit under this lease unless such
Legal Requirement has been imposed or required by a county, state or federal authority. The
judgment of any court of competent jurisdiction, or the admission of TENANT in any action or
proceeding against TENANT, whether CITY is a party thereto or not, TENANT has violated any
such Legal Requirement in the use of the Premises shall be conclusive of that fact as between
CITY and TENANT.
Section 3.08 Waste or Nuisance.
TENANT shall not commit or permit the commission by others of any waste on the
Premises; TENANT shall not maintain, commit, or permit the maintenance or commission of
any nuisance as defined by law on the Premises; and TENANT shall not use or permit the use of
the Premises for any unlawful purpose.
Section 3.09 Use by CITY.
(1) Subject to TENANT'S rights hereunder to possession of the Premises, CITY may
grant licenses to, or otherwise authorize, other persons and entities permitting uses of the Morro
Bay Harbor.
(2) CITY also retains and reserves for itself, its successors and assigns, all oil, gas,
petroleum and other mineral or hydrocarbon substances in and under the lands leased hereby
together with right to prospect and extract all such substances.
Article 4 CONSTRUCTION, ALTERATION AND REPAIRS
Section 4.01 Construction Approval.
(1) TENANT shall not make or permit any other person to make any alterations or
structural additions or structural modifications to the Premises or to any structure thereon or
facility appurtenant thereto if the cost thereof shall exceed ten thousand dollars ($10,000),
without the prior written consent of CITY. The consent. to be obtained pursuant to this
Section 4.01(1) shall be requested from the Harbor Director, or the City's designee, for CITY. If
the Harbor Director or any future successor to the duties of the City's Harbor Director, or the
City's designee, gives such consent to proceed, it is understood that such consent is given by
CITY only in its capacity as the landlord under this Lease and not as the permit -issuing
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authority. TENANT remains obligated to obtain any needed building permits and comply with
all applicable planning processes.
(2) Where required by the Morro Bay Municipal Code, California Coastal Act, Corps
of Engineers or any other state or federal agency having authority over the proposed project, then
all Conditional Use Permits, Concept Plans, Precise Plans, Coastal Development Plans, and any
other required plans or permits shall be applied for and approved prior to any construction,
aIteration or repairs.
Section 4.02 Construction Bond.
(1) Prior to the commencement of any construction the cost of which is greater than
the amount of one hundred thousand dollars ($ inn ,000), TENANT shall file with the Morro Bay
CITY Clerk a final detailed Civil Engineer's, Registered Architect's or Licensed and Bonded
General Contractor's estimate of the cost of construction and installation of improvements on the
Premises. Said estimate must be submitted to the CITY Engineer for approval. TENANT shall
file with the Morro Bay CITY Clerk a faithful performance bond, in a form and issued by a
corporate surety company satisfactory to CITY, in an amount satisfactory to CITY but not in
excess of one hundred percent (100%) of the final detailed cost estimate, securing the faithful
performance of TENANT or its contractor in the completion of said construction.
(2) TENANT shall also file with the Morro Bay CITY Clerk a labor and materials
bond, in a form and issued by a corporate surety company satisfactory to CITY, in an amount
satisfactory to CITY but not in excess of one hundred percent (100%) of the final detailed cost
estimate, securing the payment of all claims for the performance of labor or services on, or the
furnishing of materials for, the performance of said construction.
(3) In lieu of the above referenced bonds, TENANT may post cash deposits or may
make other mutually satisfactory arrangements to guarantee the completion of construction
projects. In the event the contractor bonds the project, CITY may be named as additional
indemnitee to comply with these requirements.
Section 4.03 Mechanics' Liens.
At all times during the term of this Lease, TENANT shall keep the Premises and all
buildings, installations and other improvements now or hereafter located on the Premises free
and clear of all liens and claims of liens for labor, services, materials, supplies, or equipment
performed on or furnished to the Premises. TENANT further agrees to at all times, save CITY
free and harmless and indemnify CITY against all claims for labor or materials in connection
with any improvement, repairs, or alterations on the Premises, and the cost of defending against
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such claims, including reasonable attorneys' fees. Should TENANT fail to pay and discharge or
cause the Premises to be released from such liens or claim of liens within ten (10) days after the
filing of such lien or levy, TENANT shall upon written notification be required to immediately
deposit with CITY a bond conditioned for payment in full of all claims on which said lien or levy
has been filed. Such bond shall be acknowledged by TENANT as principal and by a company or
corporation, licensed by the Insurance Commissioner of the State of California to transact the
business of a fidelity and surety insurance company as surety. The beneficiary of any security
instrument which instrument is on record with CITY, shall have the right to file such a bond on
behalf of TENANT. CITY shall have right to post and keep posted on the Premises notices of
non -responsibility and any other notices that may be provided by law or which CITY may deem
proper for the protection of CITY and Premises from such liens. TENANT shall give CITY
notice at least twenty (20) days prior to commencement of any work on the Premises to afford
CITY the opportunity to post such notices.
Section 4.04 Ownership of Improvements.
The Parties agree title to all buildings, structures, installations and improvements of any
kind or other property on the Premises, however occurring, vests in CITY, with the exception of
trade fixtures, appliances, machines or other personal property (i) installed on Premises by
TENANT and (ii) to which CITY and TENANT, agree to in writing prior to installation, title is
vested in TENANT. The Parties agree, at the termination of this Lease, however occurring,
TENANT shall have sixty (60) days thereafter to remove from the Premises all trade fixtures,
appliances and machines installed on Premises by TENANT and other personal property title of
which is vested in TENANT, as provided hereunder, (TENANT Property). If TENANT fails to
remove from the Premises any TENANT Property as required by the previous sentence, then title
to the TENANT Property not so removed shall vest in CITY and TENANT shall not remove
same.
Article 5 LEASEHOLD MORTGAGES
TENANT shall not mortgage, securitize or hypothecate this leasehold interest in
whole or any part without the prior written approval of CITY as evidenced by a resolution of the
City Council of CITY.
01181.0024/466264.5 JWP Master Lease 11/O1 -12-
Section 6.01 Maintenance by TENANT.
At all times during the term of this Lease, TENANT shall, at TENANT'S own cost and
expense, keep and maintain all improvements now or hereafter on the Premises in good order
and repair and in a safe and clean condition; provided, that CITY shall be responsible for repair,
CITY determines are necessary, of any seawalls, revetments or bulkheads on the Premises.
Furthermore, TENANT shall, at TENANT'S own cost and expense, maintain at all times during
the term of this Lease the whole of the Premises in a clean, sanitary, neat and orderly condition.
CITY may, at the sole option of CITY, clean and clear the Premises, at TENANT'S cost and
expense, in the event TENANT fails to clean and clear the Premises in accordance with this
Section to the satisfaction of CITY after fifteen (15) days' written notice to TENANT from CITY
of CITY'S intent to exercise this option.
Section 6.02 Legal Requirements.
At all times during the term of this Lease, TENANT, at no cost to CITY, shall:
(I) Make all alterations, additions, or repairs to the Premises or the
improvements or facilities on the Premises required by any Legal Requirements (as defined in
Section 3.07 above) now or hereafter made or issued;
(2) Observe and comply with all Legal Requirements now or hereafter made
or issued respecting the Premises or the improvements or facilities located thereon;
(3) Obtain all required permits pursuant to the Morro Bay Municipal Code or
State law prior to the initiation of any repair or maintenance activity; and
(4) Indemnify and hold CITY and the property of CITY, including the
Premises, free 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
section.
Section 6.03 Failure to Repair.
In the event failure to repair results in a hazardous or unsafe condition, CITY shall have
the right and option but not the obligation to close and prohibit access to the unsafe portion of the
Premises until such repairs are completed and accomplished and the Premises rendered safe for
public use. In addition, if TENANT fails to repair any hazardous or unsafe condition within ten
(10) days of written notice thereof from CITY, CITY shall have the right, but not the obligation,
to perform such repair at TENANT'S expense. TENANT shall reimburse CITY for any such
repair undertaken by CITY, promptly upon CITY'S demand, as additional Rent. Failure by
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CITY to enforce any of the provisions of this Article shall not constitute a waiver of these
provisions and CITY may at any time enforce all of the provisions of this Article, requiring all
necessary repairs, rebuilding or replacement.
Section 6.04 Inspection by CITY.
CITY or CITY'S agents, representatives, or employees may enter the Premises at all
reasonable times for the purpose of inspecting the Premises to determine. whether TENANT is
complying with the terms of this Lease and for the purpose of doing other lawful acts that may
be necessary to protect CITY'S interest in the Premises under this Lease or to perform CITY'S
duties under this Lease.
Section 6.05 TENANT'S Duty to Restore Premises.
(1) If at any time during this Lease, any improvements now or hereafter on the
Premises are damaged or destroyed in whole or in part by the elements, or any other cause not
the fault of TENANT or CITY and such destruction makes uninhabitable, any portion of the
Premises at which TENANT or its sublessees are located, as reasonably determined by CITY'S
Building Official, then this Lease shall terminate upon written notice from either Party.
(2) Any and all insurance proceeds that become payable at any time during the term
of this Lease because of damage to or destruction of any improvements on the Premises shall be
paid to CITY, except for those proceeds payable for TENANT Property.
Article 7 INDEMNITY AND INSURANCE
Section 7.01 Indemnity Agreement.
(1) TENANT shall indemnify and hold CITY, and the property of CITY (including
the Premises and any improvements now or hereafter on the Premises), and the CITY'S officers,
officials, employees and volunteers harmless from any and all liability, claims, loss, damages,
and expenses, including attorney fees and litigation expenses, resulting from TENANT'S
occupation and use of the Premises or any negligent act or omission of the TENANT or any of
its subtenants, employees, contractors or anyone for whom TENANT may be liable, specifically
including, without limitation, any liability, claim, loss, damage, or expense arising by reason o£
(a) The death or injury of any person, including TENANT or any person who
is an employee or agent of TENANT, or by reason of the damage to or destruction of any
property, including property owned by TENANT or by any person who is an employee or agent
A TENANT, from any cause whatever while such person or property is in or on the Premises or
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in any way connected with the Premises or with any of the improvements or personal property on
the Premises;
(b) The death or injury of any person, including TENANT or any person who
is an employee or agent of TENANT, or by reason of the damage to or destruction of any
property, including property owned by TENANT or any person who is an employee or agent of
TENANT, caused or allegedly caused by either (i) the condition of the Premises or any
improvement placed on the Premises by TENANT, or (ii) any act or omission on the Premises
by TENANT or any person in, on, or about the Premises with or without the permission and
consent of TENANT;
(c) Any work performed on the Premises or materials furnished to the
Premises at the instance or request of TENANT or any person or entity acting for or on behalf of
TENANT;
(d) TENANT'S failure to perform any provision of this Lease or to comply
with any Legal Requirement imposed on TENANT or the Premises.
(2) TENANT'S obligations pursuant to this Section to indemnify and hold harmless
do not extend to any liability, claim, loss, damage or expense arising from CITY'S active
negligence or willful misconduct.
Section 7.02 Liability Insurance.
During the term of this Lease, TENANT shall maintain at its cost Commercial General
Liability insurance with coverages at least as broad as ISO Forms labeled "City of Morro Bay
Insurance requirements for Lessees", Certificate of Insurance — City of Morro Bay", and
"Additional Insureds — Managers or Lessors of Premises" attached hereto as Exhibit B and made
a part hereof as may be updated or changed from time to time at the sole discretion of the CITY,
insuring against claims for bodily injury (including death), property damage, contractual liability,
personal injury and advertising injury occurring on the Premises or from operations located in
any part of the Premises. Such insurance shall afford protection in amounts no less than One
Million Dollars ($1,000,000) per occurrence for bodily injury, personal injury and property
damage, provided that if insurance with a general aggregate limit is used, either the general
aggregate limit shall apply separately to the Premises or the general aggregate limit shall be
twice the occurrence limit stated in this Section. All liability insurance carried by TENANT
hereunder shall name CITY, its officers, officials, employees and volunteers as additional
insureds, and shall be primary insurance with respect to such additional insureds. TENANT
shall include all its subtenants as insureds under TENANT's liability policies or shall furnish
01181.0024/466264.5 JWP Master Lease 11/O1 -15-
separate certificates and endorsements for each subtenant
comply with all requirements of this Article Seven.
Section 7.03 Worker's Compensation.
All coverages for subtenants shall
TENANT shall maintain at TENANT'S own expense and keep in full force and effect
during the term of this Lease, Worker's Compensation Insurance as provided by law. Said
insurance shall contain a waiver of subrogation rights against CITY. TENANT shall also
maintain employer's liability insurance with minimum coverage of $1,000,000 per accident for
bodily injury or disease.
Section 7.04 Property Insurance.
TENANT shall, at its cost, at all times during the term of this Lease keep all
improvements and other structures on the Premises, as well as any and all additions,
improvements and betterments thereto, insured for one hundred percent (100%) of their full
replacement cost with no co-insurance provision against loss or destruction by the perils covered
by "all risk" (excluding earthquake) property damage insurance policies. Any loss payable under
such insurance shall be payable to TENANT, CITY, and any Lender under a Leasehold
Encumbrance pursuant to Article 5 of this Lease, as their interests may appear, and such proceeds
shall be used and applied in the manner required by Article 6 of this Lease.
Section 7.05 Additional Coverage.
TENANT shall also maintain, at its expense, the insurance described in this Section 7.05.
(1) If TENANT has (or is required by any Legal Requirement to have) a liquor
license and is selling or distributing alcoholic beverages on the Premises, then TENANT shall
maintain liquor liability coverage in appropriate amounts. TENANT shall require any subtenant
who has (or is required by any Legal Requirement to have) a liquor license and who is selling or
distributing alcoholic beverages on the Premises, to maintain such coverage.
(2) TENANT shall maintain "all risk" (excluding earthquake) property damage
insurance covering TENANT's personal property located at the Premises, in amounts not less
than the full replacement value of such personal property. CITY shall have no interest in the
proceeds of such insurance.
(3) TENANT shall, at TENANT'S own expense, obtain and maintain any additional
insurance coverages that CITY may reasonably require. As illustration only and not as a
limitation, in appropriate circumstances such additional insurance may include increased general
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liability limits, business interruption coverage, business automobile liability, boiler and
machinery insurance and/or builder's risk insurance. However, TENANT shall not be required to
maintain additional coverages that are in excess of those typically maintained by similarly
situated tenants in the Morro Bay area.
Section 7.06 General Requirements.
Except as specifically provided to the contrary, all the insurance required pursuant to this
Article Seven shall be subject to the requirements of this Section 7.06.
(1) Maintenance of proper insurance coverage is a material element of this Lease and
failure to maintain or renew coverage or to provide evidence of coverage and/or renewal may be
treated by the CITY as a material breach of contract. TENANT shall forward the CITY
specifications and forms to TENANT'S insurance agent for compliance.
(2) CITY may at any time require TENANT to increase the minimum coverage limits
for insurance required by this Lease, but every such increase shall be reasonable under the
circumstances.
(3) All policies shall be issued by insurance companies authorized to issue such
insurance in California, with an A.M. Best's rating of no less than A: VII.
(4) Any deductibles or self -insured retentions must be declared to and approved by
CITY. At the option of CITY, either: the insurer shall reduce or eliminate such deductibles or
self -insured retentions as respects CITY, its officers, officials, employees and volunteers; or the
TENANT shall provide a financial guarantee satisfactory to CITY guaranteeing payment of
losses and related investigations, claim administration and defense expenses.
(5) Each insurance policy required by this Lease shall be endorsed to state that
coverage shall not be cancelled or reduced, except after thirty (30) days' prior written notice by
certified mail, return receipt requested, has been given to CITY.
(6) TENANT shall furnish CITY with certificates and amendatory endorsements
effecting the coverage required by this Lease. The endorsements shall be on forms provided by
CITY or on other than CITY's forms, provided those endorsements or policies conform to the
requirements. All certificates and endorsements are to be received and approved by CITY before
use of the Premises, and promptly following any renewal or replacement. CITY reserves the
right at any time to require complete, certified copies of all required insurance policies, including
endorsements effecting the coverage required by these specifications.
01181.0024/466264.5 JWP Master Lease ll/Ol -1 %-
(7) TENANT's insurance coverage shall be primary insurance as respects CITY, its
officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by
CITY, its officers, officials, employees, or volunteers shall be excess of TENANT's insurance
and shall not contribute with it.
Section 7.07 No Subrogation.
TENANT agrees that in the event of loss due to any of the perils for which it has agreed
to provide insurance, TENANT shall look solely to its insurance for recovery. TENANT hereby
grants to the CITY, on behalf of any insurer providing insurance to either TENANT or CITY
with respect to TENANT'S occupancy of the Premises, a waiver of any rights to subrogation
which any such insurer of said TENANT may acquire against the CITY by virtue of the payment
A any loss under such insurance. Each insurance policy required under this Lease including
those insuring TENANT against claims, expense, or liability for injury to persons or property
shall provide that the insurer shall not acquire by subrogation any right to recovery which
TENANT has expressly waived in writing prior to the occurrence of the loss.
Section 7.08 TENANT'S Waiver.
TENANT hereby waives any right of recovery against CITY for each claim, expense,
liability, or business interruption, or other loss, except where caused by CITY'S active
negligence or willful misconduct. TENANT agrees that to the extent that TENANT fails to
acquire insurance, TENANT shall not have any claim against CITY for any loss that results from
a risk or peril that would have been included in such insurance.
Section 7.09 Insurance Not a Limit.
The insurance requirements of this Article Seven are independent of, and do not limit or
modify, TENANT'S indemnification and other obligations pursuant to this Lease.
Article 8 TAXES AND FEES
Section 8.01 TENANT to Pay Taxes.
TENANT shall pay, before delinquency, all taxes and assessments levied upon or
assessed to TENANT on the Premises by reason of this Lease or of any equipment, appliances,
improvement, or other development of any nature whatsoever, erected, installed, or maintained
by TENANT or by reason of the business or other activity of TENANT upon or in connection
with the Premises. TENANT shall pay all possessory interest taxes applicable to the Premises.
01181.0024/466264.5 JWP Master Lease I1/O1 -1 g-
Section 8.02 TENANT to Pay License and Permit Fees.
TENANT shall pay any fees imposed by law for licenses or permits for any business or
activities including construction by TENANT upon Lite Premises.
Section 8.03 Utilities.
TENANT shall pay, or cause to be paid, and hold CITY and the property of CITY,
including the Premises, free and harmless from all charges for the furnishing of gas, water,
electricity, telephone service, and for other public utilities to the Premises during the term of this
Lease and for the removal of garbage and rubbish from the Premises during the term of this
Lease.
Section 9.01 Total Condemnation.
If title and possession to all of the Premises is permanently taken for any public or quasi -
public use under any statute, or by the right of eminent domain, then this Lease shall terminate
on the date that possession of the Premises is taken, and both CITY and TENANT shall
thereafter be released from all obligations, including Rent, all of which shall be prorated to the
date of termination, except those specified in Section 9.02 of this Lease:
Section 9.02 Condemnation Award.
Any compensation or damages awarded or payable because of the permanent taking of all
or any portion of the Premises by eminent domain shall be allocated between CITY and
TENANT as follows:
(I) All compensation or damages awarded or payable for the taking by eminent
domain of any land that is part of the Premises shall be paid to and be the sole property of CITY
free and clear of any claim of TENANT or any person claiming rights to the Premises through or
under TENANT.
(2) All compensation or damages awarded or payable which is specifically attributed
by the taking party to the "good will" of TENANT'S business shall be paid to and be the sole
property of TENANT.
(3) All compensation or damages awarded or payable because of any improvements
constructed or located on the portion of the Premises taken by eminent domain where only a
portion of the Premises is taken by eminent domain, and TENANT is not entitled to or does not
01181.0024/466264.5 JWP Master Lease 11/O1 -19-
terminate this Lease, shall be applied in the manner specified in Section 9.04 toward the
replacement of such improvements with equivalent new improvements on the remaining portions
of the Premises.
(4) All compensation or damages awarded or payable because of any improvements
constructed or located on the portion of the Premises taken by eminent domain where this Lease
is terminated because of the taking by eminent domain, whether all or only a portion of the
Premises is taken by eminent domain, shall be allocated between CITY and TENANT as
follows:
(a) That percentage of the compensation or damages awarded or payable
because of the improvements that equals the percentage of the full term of this Lease that has, at
the time of the taking, not expired shall belong to and be the sole property of TENANT.
(b) That percentage of the compensation or damages awarded or payable
because of the improvements that equals the percentage of the full term of this Lease that has, at
the time of the taking, expired shall belong to and be the sole property of CITY.
(c) The term "time of taking" as used in this Section shall mean 12:01 a.m. of
the date that the agency or entity exercising the eminent domain power, takes, title, or the date
that it takes physical possession of the portion of the Premises, whichever shall first occur.
(5) Any severance damages awarded or payable because only a portion of the
Premises is taken by eminent domain shall be the sole and separate property of CITY.
Section 9.03 Termination for Partial Taking.
If, during the term of this Lease, title and possession of only a portion of the Premises is
taken for any public or quasi -public use under any statute, or by right of eminent domain, then
TENANT may, at TENANT'S option, terminate this Lease by serving written notice of
termination on CITY within ninety (90) days after TENANT has been deprived of actual
physical possession of the portion of the Premises taken for such public use. This Lease shall
terminate on the first day of the calendar month following the calendar month in which the notice
of termination described in this section is served on CITY. On termination of this Lease
pursuant to this Article, all subleases and subtenancies in or on the Premises or any portion of the
Premises created by TENANT under this Lease shall also terminate and the Premises shall be
delivered to CITY free and clear of all such subleases and subtenancies, provided, however, that
CITY may, at CITY'S option, by mailing written notice to a subtenant allow any subtenant to
attorn to CITY and continue such subtenant's occupancy on the Premises as a TENANT of
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CITY. On termination of this Lease pursuant to this section, however, both CITY and TENANT
shall be released from all obligations under this Lease, except those specified in Section 9.02 of
this Lease.
Section 9.04 Rent Abatement for Partial Taking.
If, during the term of this Lease, title and possession of only a portion of the Premises is
taken under the power of eminent domain by any public or quasi -public agency or entity and
TENANT does not terminate this Lease, then this Lease shall terminate as to the portion of the
Premises taken under eminent domain on the date actual physical possession of the portion taken
by eminent domain is taken by the agency or entity exercising the eminent domain power.
Furthermore, the Rent payable under this Lease shall, as of that time be reduced in the same
proportion of the Premises taken by eminent domain bears to the full value of the Premises at
that time; provided however, that TENANT shall make a good faith effort to replace any
improvements or facilities with equivalent new facilities on the remaining portion of the
Premises and do all other acts at TENANT'S own cost and expense required by the eminent
domain taking to make the remaining portion of the Premises fit for the use specified in this
Lease.
Section 9.05 Conveyance in Lieu of Eminent Domain.
A voluntary conveyance by CITY, with the consent of TENANT, of title to all or a
portion of the Premises to a public or quasi -public agency or entity in lieu of and under threat by
such agency or entity to take the same by eminent domain proceedings shall be considered a
taking of title to all or such portion of the Premises under the power of eminent domain subject
to the provisions of this Article.
Section 9.06 Temporary Taking.
If the possession of the Premises or any portion thereof should be taken under the power
of eminent domain by any public or quasi -public agency or entity for a limited period not
extending beyond the term of this Lease, then this Lease shall not terminate (except as provided
in this Section 9.06) and TENANT shall continue to perform all its obligations hereunder, except
only to the extent that TENANT is prevented from performing such obligations by reason of
such taking. TENANT shall be entitled to receive the entire amount of compensation or
damages awarded because of such temporary taking. If a temporary taking extends for more
than thirty-six (36) months, then TENANT shall have the right to terminate this Lease, and
TENANT shall be entitled to receive, out of the compensation or damages awarded because of
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such temporary taking, the amount that is attributable to the period of time up until the effective
date of TENANT'S termination of this Lease.
Section 10.01 No Assignment Without CITY'S Consent.
Except as provided in this Article 10, TENANT shall not assign or otherwise transfer this
Lease, any right or interest in this Lease, or any right or interest in the Premises or any of the
improvements that may now or hereafter be constructed or installed on the Premises without the
express written consent of CITY evidenced by resolution first had and obtained. Any
assignment or transfer by TENANT without the prior written consent of CITY, whether it be
voluntary or involuntary, by operation of law or otherwise, is void and shall, at the option of
CITY, terminate this Lease. A consent by CITY to one assignment shall not be deemed to be a
consent to any subsequent assignment of this Lease by TENANT. CITY shall not unreasonably
nor arbitrarily withhold its approval to the assignment or transfer of this Lease to an assignee
who is financially reliable and qualified to conduct the business for which this Lease was
granted. It is mutually agreed TENANT'S qualifications are a part of the consideration for
granting of this Lease and TENANT does hereby agree to maintain active control and
supervision of the operation conducted on the Premises.
Section 10.02 Change of Ownership as Assignment.
For purposes of this Article 10, the following transactions will be deemed to be
assignments or transfers:
(1) If TENANT is a partnership or limited liability company:
(a) A change in ownership effected voluntarily, involuntarily,- or by operation
of law, within atwelve-month (12-month) period, of twenty-five percent (25%) or more of the
partners or members or twenty-five percent (25%) or more of the partnership or membership
interests; or
(b) The dissolution of the partnership or limited liability company without its
immediate reconstitution.
(2) If TENANT is a closely held corporation (i.e., one whose stock is not publicly
held acid not traded through an exchange or over the counter):
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(a) The sale or other transfer, within a twelve-month (12-month) period, of
more than an aggregate of twenty-five percent (25%) of the voting shares of TENANT (other
than to immediate family members by reason of gift or death); or
(b) The dissolution, merger, consolidation, or other reorganization of
TENANT.
Section 10.03 Application for Assignment.
A condition of an assignment shall be that TENANT shall file with the CITY an
application to assign the leasehold prepared by the prospective assignee. Concurrently with
filing the application, TENANT shall pay a reasonable fee associated with the cost pf processing
said application, in cash or certified or cashier's check to enable CITY adequately to investigate
the proposed assignee's qualifications as a permitted assignee. CITY shall not be required to
account for the use of the sum paid. If the proposed assignee's net worth on the date of
assignment is not sufficient to reasonably guarantee successful operation of the Premises in
compliance with all applicable CITY, County, State and federal requirements, CITY may
withhold approval of the assignment or condition it upon TENANT'S guarantee of such
assignee's obligations hereunder for such period as CITY deems advisable. Net worth shall
mean the amount by which the total of all assets shall exceed the total of all liabilities as
determined in accordance with general accepted accounting principles as approved by CITY'S
auditor, or other authorized representative or agent.
Section 10.04 Probate Transfer of Assignment.
If TENANT is an individual, nothing herein contained will prevent the transfer of this
Lease by will, or by operation of law under the intestacy provisions of the California Probate
Code as it may be amended from time to time. Probate sale of the leasehold interest will not be
permitted without the consent of the CITY, evidenced by resolution, first had and obtained.
Section 10.05 No Sublease Without CITY'S Consent.
TENANT shall not sublease the whole nor any part of the Premises, or license, permit, or
otherwise allow any other person (the employees of TENANT excepted) to occupy or use the
Premises, or any portion thereof, without the prior written consent of CITY's Harbor Director, or
any future successor to the duties of the City's Harbor Director. A consent to one subletting,
occupation, licensing or use shall not be deemed to be a consent to any subsequent subletting,
occupation, licensing or use by another person. Any sublease or license without CITY'S
written consent shall be void, and shall at CITY'S option, terminate this Lease. CITY shall not
01181.0024/466264.5 JWP Master Lease 11/Ol -23-
unreasonably nor arbitrarily withhold its consent to sublet to one who is qualified and financially
reliable. CITY'S consent to any occupation, use, or licensing shall be in CITY'S sole and
absolute discretion. Notwithstanding any provisions herein to the contrary, the terms
"assignment," "subletting," "occupation," or "use," shall not be construed or interpreted to mean
or include the temporary, short term renting or leasing of boat slips, motel, hotel, or apartment
accommodations on the premises.
Section 10.06 Subtenant Subject to Lease Terms.
Any and all subleases shall be expressly made subject to all the terms, covenants, and
conditions of this Lease. Subject to Section 1.01, the term of any sublease shall not extend
beyond the term of this Lease. Subject to Sections 1.01 and 10.09, termination of this Lease
prior to the expiration of this Lease term shall also terminate any and all subleases. A breach of
the terms of this Lease by a subtenant shall constitute a breach on the part of TENANT and shall
subject both the subtenant and TENANT to all the remedies provided to CITY herein and by
law. Failure by any subtenant to report Gross Sales or to pay Percentage Rent due from
subtenant shall constitute a breach of this lease. TENANT hereby agrees to and does guarantee
payment of such Percentage Rent due by a subtenant under the terms of this lease.
Section 10.07 Consent Form Agreement.
Prior to any consent by CITY' S Harbor Director to any sublease hereof, TENANT shall
cause to be executed between TENANT and any subtenant an agreement making the CITY a
third -party beneficiary, in a form acceptable to CITY'S Harbor Director, whereby the subtenant
agrees to be bound by all of the terms, covenants and conditions of this Lease. Further, it is
agreed by TENANT any default by the subtenant of any of the terms, covenants and conditions
of this Lease shall be deemed to be violations by TENANT of this Lease and that all remedies of
CITY for such violation, including termination of this Lease, shall immediately be enforceable
by CITY against TENANT. TENANT shall apply any and all monies received from any
subtenant first to the payment of obligations of the subtenant to CITY.
Section 10.08 TENANT and Guarantor Remain Liable.
Prior to approval by CITY to any sublease hereof, TENANT shall agree to be primarily
and jointly and severally liable to CITY for all obligations due CITY by any subtenant, including
the payment of rents, and TENANT shall agree that CITY may proceed directly against
TENANT for any obligation owing CITY by the subtenant. If this Lease is guaranteed, neither
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the sublease nor CITYS approval thereof shall release the guarantor from its obligations
pursuant to the guaranty.
Section 10.09 Nondisturbance.
On the terms set forth below, CITY may enter into agreements with subtenants providing
that in the event of any termination of this Lease prior to the expiration date, CITY will not
terminate or otherwise disturb the rights of the subtenant under such sublease, but will instead
honor such sublease as if such agreement had been entered into directly between Landlord and
such subtenant, conditioned upon such subtenant's agreement to attorn to Landlord and full
performance of all obligations under the sublease in question ("Non -Disturbance Agreement").
CITY agrees to execute a Non -Disturbance Agreement in connection with a particular sublease
provided that Tenant provides CITY with a copy of the sublease, and the Non -Disturbance
Agreement is customary in form and substance and otherwise reasonably acceptable to CITY.
Article 11 DEFAULT AND TERMINATION
Section 11.01 Abandonment by TENANT.
If TENANT breaches this Lease and abandons all or any part of the Premises prior to the
scheduled expiration of the term of this Lease, CITY may continue this Lease in effect by not
terminating TENANT'S right to possession of the Premises, in which event CITY shall be
entitled to enforce all CITY'S rights and remedies under this Lease including the right to recover
the Rent specified in this Lease as it becomes due under this Lease.
Section 11.02 Termination for Breach by TENANT.
All covenants and agreements contained in this Lease are declared to be conditions to this
Lease and to the term hereby demised to TENANT. Should TENANT fail to perform any
covenant, condition, or agreement contained in this Lease, except for payment of any Rent or
other monetary amount due, and such failure is not cured within thirty (30) days after written
notice thereof is served on TENANT, then CITY may terminate this Lease immediately, and in
the event of such termination, TENANT shall have no further rights hereunder and TENANT
shall thereupon forthwith remove from the Premises and shall have no further right or claim
thereto and CITY shall immediately thereupon have the right to re-enter and take possession of
the Premises, subject only to appropriate legal process.
01181.0024/466264.5 JWP Master Lease I l/O1 -25-
Section 11.03 Termination for Failure to Pay Rent.
If any payment of Rent is not made as herein provided and such failure to pay is not
cured within three (3) days after written notice thereof is served on the TENANT, CITY shall
have the option to immediately terminate this Lease; and in the event of such termination,
TENANT shall have no further right or claim thereto and CITY shall immediately thereupon
have the right to re-enter and take possession of the Premises, subject only to appropriate legal
process.
Section 11.04 Lender May Cure Default.
CITY shall afford the Lender under any Leasehold Encumbrance of record with CITY the
right to cure any default by TENANT of the covenants, conditions, or agreements hereof, as
provided in Article 5 of this Lease.
Section 11.05 Attorneys' Fees.
In the event the CITY finds it necessary to retain an attorney in connection with the
default by the TENANT or enforcement of any of the terms, conditions, and covenants of this
Lease, even though litigation is not instituted, TENANT shall pay to CITY its reasonable
attorneys' fees. Non-payment of attorneys' fees by TENANT within three (3) days after
written notice is served on TENANT shall give rise to an independent legal action by CITY to
collect same. If CITY is successful in such legal action, CITY shall also be entitled to attorney
fees and costs for the collection action. To the extent that CITY is represented by the City
Attorney, a reasonable sum for such attorneys' services will be included as attorneys' fees.
Section 11.06 Damages for Breach.
If TENANT defaults in the performance of any covenant, condition or agreement
contained in this Lease and the default be incurable or not be cured within the time period set
forth hereinabove, then CITY may terminate this Lease and:
(1) Bring an action to recover from TENANT:
(a) The worth at the time of award of the unpaid rent which had been earned
at the time of termination of this Lease;
(b) The worth at the time of award of the amount by which the unpaid rent
which would have been earned after termination of this Lease until the time of award exceeds the
amount of rental loss that TENANT proves could have been reasonably avoided;
01181.0024/466264.5 JWP Master Lease 11/01 -26-
(c) The worth at the time of award of the amount by which the unpaid rent for
the balance of the term after the time of award exceeds the amount of rental loss that TENANT
proves could be reasonably avoided; and
(d) Any other amount necessary to compensate CITY for all detriment
proximately caused by TENANT'S failure to perform its obligations under this Lease; and
(2) Bring an action, in addition to or in lieu of the action described in
subparagraph (1) of this Section, to re-enter and regain possession of the Premises in the manner
provided by the laws of unlawful detainer of the State of California then in effect.
Section 11.07 Cumulative Remedies.
The remedies available to CITY in this Article shall not be exclusive but shall be
cumulative with and in addition to all remedies now or hereafter allowed by law or elsewhere
provided in this Lease.
Section 11.08 Waiver of Breach.
The waiver by CITY of any breach by TENANT of any of the provisions of this Lease
shall not constitute a continuing waiver or a waiver of any subsequent breach by TENANT either
of the same or a different provision of this Lease.
Section 11.09 Surrender of Premises.
On expiration or sooner termination of this Lease, TENANT shall surrender the Premises,
and, subject to Section 4.04, all improvements in or on the Premises, and all facilities in any way
appertaining to the Premises, to CITY in good, safe, and clean condition, reasonable wear and
tear excepted.
Article 12 MISCELLANEOUS
Section 12.01 Attorneys' Fees.
If any litigation is commenced between the Parties concerning the Premises, this Lease,
or the rights and duties of either in relation thereto, then the Party prevang in such gation
shall be entitled, in addition to such other relief as may be granted in the litigation, to a
reasonable sum as and for its attorneys' fees and court costs in such litigation, which shall be
determined by the court in such litigation or in a separate action brought for that purpose. The
"prevailing" party shall mean the Party who obtains substantially the relief sought by that Party.
01181.0024/466264.5 JWP Master Lease 11/O1 -2%-
Section 12.02 Notices.
Any and all notice or demands by or from CITY to TENANT, or TENANT to CITY,
shall be in writing. They shall be served either personally, or by registered or certified mail.
Any notice or demand to CITY may be given to:
with a copy to:
City of Morro Bay
Attn: Harbor Director
1275 Embarcadero
Morro Bay, CA 93442
City of Morro Bay
Attn: City Manager
City Hall
595 Harbor Street
Morro Bay, CA 93442
Any notice or demand to TENANT may be given at:
TLC Family Enterprises, Inc.
665 Kings Avenue
Morro Bay, CA 93442
Such addresses maybe changed by written notice by either party to the other Party.
Section 12.03 Governing Law and Jurisdiction.
This Lease, and all matters relating to this Lease, shall be governed by the laws of the
State of California in force at the time any need for interpretation of this Lease or any decision
concerning this Lease arises. CITY and TENANT consent to exclusive personal and subject
matter jurisdiction in the Superior Court of the State of California in and for the county where
the Premises are located, and each Party waives any claim that such court is not a convenient
forum. Each Party hereby specifically waives the provisions of California Code of Civil
Procedure Section 394, and any successor statute thereto.
Section 12.04 Binding on Successors.
Subject to the provisions herein relating to assignment and subletting each and all of the
terms, conditions, and agreements herein contained shall be binding upon and inure to the benefit
of the successors and assigns of any and all of the Parties; and all of the Parties shall be jointly
and severally liable hereunder.
01181.0024/466264.5 JWP Master Lease 11/O1 -28-
Section 12.05 Partial Invalidity.
Should any provision of this Lease be held by a court of competent jurisdiction to be
either invalid, void, or unenforceable, the remaining provisions of this Lease shall remain in full
force and effect unimpaired by the holding.
Section 12.06 Sole and Only Agreement.
This Lease and the COL, including all exhibits incorporated by reference, constitutes the
sole and only agreements between CITY and TENANT respecting the Premises and the leasing
of the Premises to TENANT. Any other agreements or representations respecting the Premises
and their leasing to TENANT by CITY, which are not expressly set forth in this Lease, are null
and void. This lease terms herein specified correctly set forth the obligations of CITY and
TENANT as of the date of this Lease. No modification, amendment, or alteration of this Lease
shall be valid unless it is in writing and signed by the Parties.
Section 12.07 Modification.
This agreement shall not be modified except pursuant to a written agreement executed by
the MAYOR and CITY CLERK pursuant to prior CITY Council approval. Notwithstanding
CITY Council approval, no agreement shall become effective until such agreement is in fact
executed by the MAYOR and CITY CLERK. TENANT understands that this agreement may
not be modified by oral statements by any person representing the CITY including the MAYOR.
and CITY CLERK. TENANT specifically agrees not to rely on oral statements, purported oral
waivers, or purported oral modifications and agrees not to rely upon purported
written modifications unless they meet the requirements of this paragraph and are approved in
writing pursuant to formal City Council action and a subsequent written modification signed by
the MAYOR and CITY CLERK. If the title of any person authorized to act for CITY under this
Lease shall be changed during the term of this Lease, then the person who succeeds to
substantially the same responsibilities with respect to the CITY shall have the authority to act for
CITY under this Lease.
Section 12.08 Time of Essence.
Time is expressly declared to be the essence of this Lease.
Section 12.09 Memorandum of Lease for Recording.
CITY and TENANT shall, at the request of either at any time during the term of this
Lease, execute a memorandum or "short form" of this Lease, which shall describe the Parties, set
01181.0024/466264.5 JWP Master Lease 11/O1 -29-
forth a description of the leased premises, specify the term of this Lease, and incorporate this
Lease by reference.
The following provisions apply to this Lease site only:
Section 13.01 TENANT'S Obligation to Redevelop Site
TENANT has proposed a major redevelopment project for the Premises (Proposed
Redevelopment) and was granted the COL and the Parties intend this Lease to be an interim
lease; (i) to allow TENANT to manage and operate the Premises and cause some use of the
previous restaurant portion of the Premises and (ii) for the Parties an opportunity to negotiate a
permanent lease for the Premises, all while TENANT is processing permits and completing
design/development of the Proposed Redevelopment. TENANT agrees it shall be a material
default and breach of this Lease if TENANT fails to meet the following time frames for the
Proposed Redevelopment.
1. TENANT must obtain Concept Plan approval from the Planning Commission and City
Council on or before August 31, 2018 at 4:00 p.m. or this Consent of Landowner
Agreement will expire on September 1, 2018.
2. TENANT, after obtaining Concept Plan approval by the Planning Commission and City
Council, shall negotiate in good faith with CITY for a new lease for the Premises. Upon
execution of the new lease, the COL shall no longer be of any effect, and the new lease
will replace this Lease. If a new lease is not executed by the Parties on or before October
25, 2018, then the COL shall expire on October 26, 2018; and, unless this Lease is
extended by mutual agreement of the Parties, the provisions of Section 1.03 shall apply.
01181.0024/466264.5 JWP Master Lease ll/01 -30-
EXECUTED on April_, 2016, at Morro Bay, San Luis Obispo County, California.
CITY OF MORRO BAY
TLC Family Enterprises, Inc., a California
corporation
MAYOR By:
By:
ATTEST:
CITY CLERK
01181.0024/466264.5 JWP Master Lease 11/O1 -31-
EXHIBIT A
COPY OF PARCEL MAP
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by and between
the CITY OF MORRO BAY
and
TLC FAMILY ENTERPRISES
("TENANT")
01181.0024/466264.5 JWP S/RWS/Cmbcty.Harbor.O11011.agr.MasterLease
Article 1
Article 2
Article 3
Article 4
TABLE OF CONTENTS
FIXEDTERM.............................................................................................................2
Section1.01 Term..............................................................................................2
Section 1.02 No Extensions...............................:....................:..........................2
Section1.03 Hold Over......................................................................................3
Section 1.04 Replacement..................................................................................3
RENT..........................................................................................................................3
Section 2.01 Annual Minimum Rent.................................................................3
Section 2.02 Percentage Rent...................................:........................................3
Section 2.03 Reimbursements.......................................:....................................6
Section 2.04 Penalty and Interest.......................................................................6
USEOF PREMISES...................................................................................................6
Section 3.01 Permitted Uses..........................:...................................................6
Section 3.02 Unauthorized Use..........................................................................6
Section 3.03 Operation of Business -Hours of Operation.................................7
Section 3.04 Competition...................................................................................8
Section 3.05 Hazardous Materials. 0 * 6 * 0 9 0 0 0 0 0 0 0 m & 6 0 a 0 a 0 0 0 0 0 0 * a # # 0 0 s * 0 * * 8
Section 3.06 Tidelands Trust.........................:...................................................9
Section 3.07 Compliance with Law.
Section 3.08 Waste or Nuisance. . a 0 9 0 a 0 0 0 a 0 6 a & 0 0 a a 0 a a a 0 0 0 * 6 0 6 0 * 0 9 0 0 * 0 0 0 0 4 0 a 0 0 0 0 a 0 9 m m 0 0 6 a * a 0 * # 4 * 0 0 0 m a 0 10
Section 3.09 Use by CITY,
CONSTRUCTION, ALTERATION AND REPAIRS:............................................10
Section 4.01 Construction Approval. lu
Section 4.02 Construction Bonds I I
Section 4.03 Mechanics' Liens.........................................................................11
Section 4.04 Ownership of Improvements.....:.................................................12
01181.0024/466264.5 JWP S/RWS/Cmbcty.Harbor.O11011.agr.MasterLease -1-
Article 5
Article 6
Article 7
Article 8
Article 9
LEASEHOLD MORTGAGES.................................................................................12
REPAIRS, MAINTENANCE AND RESTORATION............................................13
Section 6.01 Maintenance by TENANT..........................................................13
Section 6.02 Legal Requirements....................................................................13
Section 6.03 Failure to Repair.........................................................................13
Section 6.04 Inspection by CITY.....................................................................14
INDEMNITY AND INSURANCE..........................................................................14
Section 7.01 Indemnity Agreement.................................................................14
Section 7.02 Liability Insurance......................................................................15
Section 7.03 Worker's Compensation..............................................................16
Section 7.04 Property Insurance......................................................................16
Section 7.05 Additional Coverage...................................................................16
Section 7.06 General Requirements.................................................................17
Section 7.07 No Subrogation...........................................................................18
Section 7.08 TENANT'S Waiver.....................................................................18
Section 7.09 Insurance Not a Limit.................................................................18
TAXESAND FEES..................................................................................................18
Section 8.01 TENANT to Pay Taxes.... 18
Section 8.02 TENANT to Pay License and Permit Fees.
Section 8.03 Utilities. too@*@* 19
CONDEMNATION..................................................................................................19
Section 9.01 Total Condemnation. . 0 0 a 0 0 9 W 0 0 0 0 0 * & * a 0 0 0 0 6 a M a 0 a 0 0 0 0 0 & # 0 6 & * * a 0 0 a & 0 M 6 0 0 0 0 0 * & # & & 0 6 & a 9 0 a a 6 019
Section 9.02 Condemnation Award.
Section 9.03 Termination for Partial Taking...................................................20
Section 9.04 Rent Abatement for Partial Taking.............................................21
Section 9.05 Conveyance in Lieu of Eminent Domain....................................21
01181.0024/466264.5 JWP S/RWS/Cmbcty.Harbor.01101 Lagr.MasterLease 4i-
Article 10
Article 11
Article 12
Section 9.06 Temporary Taking.
ASSIGNMENT AND SUBLEASING.....................................................................22
Section 10.01 No Assignment Without CITY'S Consent..................................22
Section 10.02 Change of Ownership as Assignment.........................................22
Section 10.03 Application for Assignment........................................................23
Section 10.04 Probate Transfer of Assignment.................................................23
Section 10.05 No Sublease Without CITY'S Consent.......................................23
Section 10.06 Subtenant Subject to Lease Terms..............................................24
Section 10.07 Consent Form Agreement...........................................................24
Section 10.09 Nondisturbance...........................................................................25
DEFAULT AND TERMINATION..........................................................................25
Section 11.01 Abandonment by TENANT........................................................25
Section 11.02 Termination for Breach by TENANT.........................................25
Section 11.03 Termination for Failure to Pay Rent...........................................26
Section 11.04 Lender May Cure Default...........................................................26
Section 11.05 Attorneys' Fees............................................................................26
Section 11.06 Damages for Breach....................................................................26
Section 11.07 Cumulative Remedies.
Section 11.08 Waiver of Breach. a & a 0 0 6 a V 0 6 0 0 & 0 * 0 a 0 0 0 0 0 0 0 V & 0 a * 0 9 0 * * a 0 0 0 0 6 027
Section 11.09 Surrender of Premises.
MISCELLANEOUS.................................................................................................27
Section 12.01 Attorneys' Fees.
Section12.02 Notices. M 6 0 0 0 0 a 0 a * a 0 * * 0 * 0 0 0 a 0 0 0 0 0 6 0 * * 0 0 a 0 0 0 0 0 V 6 6 6 0 * 0 * 0 0 0 0 0 0 0 a 0 a 9 V a 0 0 0 & 0 0 9 0 0 M 0 0 0 0 0 0 * 0 * 0 * * 0 0 0 & a 0 0 z zs
Section 12.03 Governing Law and Jurisdiction.................................................28
Section 12.04 Binding on Successors.
Section 12.05 Partial Invalidity........... 9*000060
01181.0024/466264.5 JWP S/RWS/Cmbcty.Harbor.011011.agr.MasterLease -111-
Article 13
Section 12.06 Sole and Only Agreement, . 0 * 6 6 * a 0 0 0 0 0 0 a a * 0 a 0 0 # 0 * * 0 6 # & 9 U94006 of U6660029
Section 12.0 / Modification................................................................................29
Section 12.08 Time of Essence..........................................................................29
Section 12.09 Memorandum of Lease for Recording........................................29
SPECIAL PROVISIONS PECULIAR TO THIS LEASE SITE.................................30
Section 13.01 TENANT'S Obligation to Redevelop Site.................................30
01181.0024/466264.5 JWP S/RWS/Cmbcty.Hazbor.O11011.agr.MasterLease -1V-
595 Harbor St.
Morro Bay, CA 93442
(805) 772-6200
FAX (805) 772-7329
INSURANCE REQUIREMENTS FOR LESSEES
(NO AUTO RISKS)
Lessee shall procure and maintain for the duration of the contract insurance against claims for
injuries to persons or damages to property which may arise from or in connection with the
Lessee's operation and use of the leased premises. The cost of such insurance shall be borne by
the Lessee.
Minimum Scope of Insurance
Coverage shall be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occurrence
form CG 0001).
2. Workers' Compensation insurance as required by the State of California and
Employer's Liability Insurance (for lessees with employees).
3. Property insurance against all risks of loss to any tenant improvements or
betterments.
Minimum Limits of Insurance
Lessee shall maintain limits no less than:
1. General Liability:
2. Employer's Liability:
3. Property Insurance:
$1,000,000 per occurrence for bodily injury,
personal injury and property damage. If
Commercial General Liability Insurance or other
form with a general aggregate limit is used, either
the general aggregate limit shall apply separately to
this project/location or the general aggregate limit
shall be twice the required occurrence limit.
$1,000,000 per accident for bodily injury or disease.
Fu11 replacement cost with no coinsurance penalty
provision.
01181.0024/466264.5 JWP TLC Family Enterprises, Inc.
City of Morro Bay
Insurance Requirements for Lessees
Deductibles and Self -Insured Retentions
Any deductibles or self -insured retentions must be declared to and approved by the City. At the
option of the City, either: the insurer shall reduce or eliminate such deductibles or self -insured
retentions as respects the City, its officers, officials, employees and volunteers; or the Lessee
shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and
related investigations, claim administration and defense expenses.
Other Insurance Provisions
The general liability policy is to contain, or be endorsed to contain, the following provisions:
1. The City, its officers, officials, employees, and volunteers are to be covered as
insureds with respect to liability arising out of ownership, maintenance or use of
that part of the premises leased to the Lessee.
2. The Lessee's insurance coverage shall be primary insurance as respects the City,
its officers, officials, employees, and volunteers. Any insurance or self-insurance
maintained by the City, its officers, officials, employees, or volunteers shall be
excess of the Lessee's insurance and shall not contribute with it.
3. Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be canceled, except after thirty (30) days' prior written notice
by certified mail, return receipt requested, has been given to the City.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII.
Verification of Coverage
Lessee shall furnish the City with original certificates and amendatory endorsements effecting
coverage required by this clause. The endorsements should be on forms provided by the City or
on other than the City's forms, provided those endorsements or policies conform to the
requirements. All certificates and endorsements are to be received and approved by the City
before use of City premises. The City reserves the right to require complete, certified copies of
all required insurance policies, including endorsements effecting the coverage required by these
specifications at any time.
01181.0024/466264.5 JWP
Spec C 2
City of Morro Bay
Insurance Requirements for Lessees
Sub -lessee
Lessee shall include all sub -lessees as insureds under its policies or shall furnish separate
certificates and endorsements for each sub -lessee. All coverages for sub -lessees shall be subject
to all of the requirements stated herein.
Insurance\SpecC
Rev. 8/01
01181.0024/466264.5 JWP
SpecC 3
City of Morro Bay
Insurance Requirements for Lessees
Reproduction of Insurance Services Office, Inc. Form
INSURER: ISO Form CG 20 11 11 85 (Modified)
POLICY NUMBER: Commercial General Liability
ENDORSEMENT NUMBER:
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED -- MANAGERS OR LESSORS OF PREMISES
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART,
SCHEDULE
1. Designation of Premises (Part Leased to You):
2. Name of Person or Organization (Additional Insured): City of Morro Bay
3. Additional Premium:
(If no entry appears above, the information required to complete this endorsement
will be shown in the Declarations as applicable to this endorsement.)
WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in
the Schedule, but only with respect to liability arising out of the ownership, maintenance or use of that part of the
premises leased to you and shown in the Schedule and subject to the following additional exclusions:
This insurance does not apply to:
1. Any "occurrence" which takes place after you cease to be a tenant in that premises.
2. Structural alterations, new construction or demolition operations performed by or on behalf of the person
or organization shown in the schedule.
Modifications to ISO form CG 20 11 11 85:
1. The Insured scheduled above includes the Insured's elected or appointed officers, officials, employees
and volunteers.
2. This insurance shall be primary as respects the Insured shown in the schedule above, or if excess, shall
stand in an unbroken chain of coverage excess of the Named Insured's scheduled underlying primary
coverage. In either event, any other insurance maintained by the Insured scheduled above shall be in
excess of this insurance and shall not be called upon to contribute with it.
3. The insurance afforded by this policy shall not be canceled except after thirty days prior written notice
by certified mail return receipt requested has been given to the City.
Signature -Authorized Representative
Address
CG 20 11 11 85 Insurance Services Office, Inc. Form (Modified)
Insurance�Form#3
Rev. 8/01
O1181.0024/466264.5 JWP
Spec 0 4