EXHIBIT 10.3
AMENDED AND RESTATED
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DISPOSITION AND DEVELOPMENT AGREEMENT, AGREEMENT OF
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PURCHASE AND SALE, AND LEASE WITH OPTION TO PURCHASE
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between
THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF XXXXXXX,
a public body, corporate and politic,
and
COMPTON ENTERTAINMENT, INC.,
a California corporation
WALNUT INDUSTRIAL PARK REDEVELOPMENT PROJECT
AMENDED AND RESTATED
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DISPOSITION AND DEVELOPMENT AGREEMENT, AGREEMENT OF
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PURCHASE AND SALE, AND LEASE WITH OPTION TO PURCHASE
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THIS AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT (this "DDA" or
"Lease") is made as of this 4th day of April, 1995, by and between the COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF XXXXXXX, a public body corporate and politic
("Agency") and COMPTON ENTERTAINMENT, INC., a California corporation
("Redeveloper").
TABLE OF CONTENTS
Page
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RECITALS
1. Purchase and Sale of the Convention Center Parcel 2
2. Lease of the Hotel and Other Parcels 4
3. Title and Survey 5
4. Term 7
5. Rent 9
6. Rent Reduction/Credit 9
7. Additional Consideration 11
8. Taxes 11
9. Use and Compliance with Laws 12
10. Physical Condition of the Property 14
11. Construction by Xxxxxxxxxxx 00
00. Certificate of Completion 21
13. Utilities and Services 23
14. Maintenance 23
15. Alterations 24
16. Destruction 24
17. Insurance and Indemnity 27
18. Condemnation 33
19. Assignment, Subletting and Encumbering 36
20. Default 39
21. Agency's Entry on Property 47
22. Notices 48
23. Interest on Past-due Obligations 48
24. Attorneys' Fees 48
Page
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25. Estoppel Certificates 50
26. Surrender of Property 50
27. Form of Nondiscrimination and Nonsegregation Clauses; Local
Hiring and Affirmative Action 50
28. Local Contractors 52
29. Expansion parcels 52
30. Option to Xxxxxxxx 00
00. Holding Over 57
32. Force Majeure; Extension of Times of Performance 57
33. Sale or Transfer by Agency 58
34. Limitation on Recourse Against Agency 58
35. Redeveloper's Representations and Warranties 58
36. Agency's Representations and Warranties 60
37. Miscellaneous 61
(a) Governing Law 61
(b) Time of Essence 61
(c) Additional Rent 61
(d) Quiet Enjoyment 61
(e) Transfer of Agency's Interest 61
(f) Waiver 61
(g) Brokers 61
(h) Headings 62
(i) Inspection Of Books and Records 62
(j) Merger 62
(k) Gender; Number 62
(l) No Joint Venture 62
(m) Exhibits 62
(n) Entire Agreement; Modification 62
(o) Joint and Several Obligations 63
(p) Severability 63
(q) Consents of Agency 63
(r) Records 63
(s) Recordation of Memorandum of Lease With Option to Purchase 63
(t) Execution in Counterparts 63
EXHIBIT 1 LEGAL DESCRIPTIONS 1
EXHIBIT 2 SITE PLAN 1
EXHIBIT 3 SCHEDULE OF PERFORMANCE 1
EXHIBIT 4 CONDITIONS OF CONSTRUCTION 1
EXHIBIT 5 SCOPE OF DEVELOPMENT 1
RECITALS
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A. The purpose of this DDA is to effectuate the Agency's Redevelopment Plan, as
amended (the "Redevelopment Plan") for the Walnut Industrial Park Project Area
(the "Project Area") in the City of Xxxxxxx (the "City") by facilitating the
development, rehabilitation and operation of all or some portion of an existing
hotel structure (the "Hotel") and entertainment center (the "Entertainment
Center") containing one or more restaurants and a card club (the "Card Club"),
and parking (and which may contain a nightclub/sports lounge, gift shop, meeting
facilities/theater, corporate business lounge, and assorted concession venues),
on a parcel of real property of approximately 24.45 acres (the "Property")
located within the Project Area. The Property is legally described in Exhibit 1
attached hereto, and is depicted on the Site Plan attached hereto as Exhibit 2.
B. Agency is the owner of the Property.
C. Redeveloper desires to purchase a portion of the Property and to lease the
remainder of the Property for the purpose of developing and operating the Hotel
and Entertainment Center thereon.
D. Agency desires to lease the Property to Redeveloper in accordance with the
terms and conditions set forth hereinbelow.
E. The Property contains four elements:
1. A portion of the Property (the "Convention Center Parcel") currently improved
with a convention center and parking structure, including the underlying land,
all of which is subject to easements for access to, support of and parking for
the Hotel Parcel.
2. A portion of the Property (the "Hotel Parcel") consisting of a parcel of air
space which includes a nine (9) story hotel containing 290 guest rooms and
ancillary areas such as lobbies, restaurant, kitchen, bars, commercial areas and
the like.
3. A portion of the Property (the "Parking Parcels") will be improved with
parking to support the Hotel and the Entertainment Center.
4. A portion of the Property consists of additional land (the "Expansion
Parcels") upon which Redeveloper shall have the right to expand by construction
of an additional casino or card club.
The Hotel Parcel, the Parking Parcels and the Expansion Parcels are referred to
herein collectively as the "Leasehold Parcels" or the "balance of the Property."
F. This DDA consists of an agreement of purchase and sale of a portion of the
Property, a lease of the balance of the Property to Redeveloper and, if
Redeveloper complies with the terms thereof, an option to purchase the balance
of the Property.
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G. The parties hereto are parties to that certain Disposition and Development
Agreement dated as of December 10, 1992, concerning real property adjacent to
the Property (the "Prior DDA"). By this DDA, the parties shall amend and restate
such Disposition and Development Agreement on the terms provided herein.
H. Redeveloper has obtained a license (the "License") from the City of Xxxxxxx
("City") to operate within the City of Xxxxxxx a Card Club pursuant to
Section 9-10 of the Compton Municipal Code, on the terms and conditions set
forth in the City's Resolution No. 17,087. Such license has been extended and
amended by City Resolution Nos. 17,617 and 17,831. More or less concurrently
herewith, Redeveloper is applying for an amendment to the license to cover the
entire Property so as to permit expansion of the Card Club.
I. Redeveloper proposes to: (i) construct improvements to complete and
rehabilitate the Hotel so that it can be operated, in whole or in part, as a
full service hotel lodging facility, (ii) construct improvements to the Property
so that the Entertainment Center, including the Card Club, can be operated
therefrom, (iii) construct additional parking needed to support the Hotel and
Entertainment Center, and (iv) subject to Section 29 hereof, within fifteen (15)
years after the date hereof, construct, open and operate an expansion of the
Card Club facility on the Expansion Parcels and/or other portions of the
Property. Construction of such improvements and operation of the Hotel and
Entertainment Center from the Property, and construction of the expansion
facility on the Expansion Parcels are referred to herein as the "Project."
J. The Project will assist in the elimination of blight in the Project Area,
will provide additional jobs, and will substantially improve the economic and
physical conditions in the Project Area in accordance with the purposes and
goals of the Redevelopment Plan.
NOW THEREFORE, the parties agree as follows:
1. Purchase and Sale of the Convention Center Parcel.
(a) Redeveloper hereby agrees to purchase from Agency, and Agency agrees to sell
to Redeveloper, the Convention Center Parcel, including the underlying land and
parking structure, subject to easements of support and for parking for the
benefit of the Hotel Parcel, on the terms and conditions set forth hereinbelow.
(b) The purchase price shall be $2,000,000 cash, payable in full at closing.
(c) Closing shall occur at such time as the contingencies set forth in Section
2(b) hereof have been satisfied, but in no case later than July 31, 1995;
provided, however, if the closing has not occurred by July 31, 1995 due to the
fact that the bonds described in Section 5 have not theretofore been defeased,
then
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the closing date may be extended for up to 90 additional days, and if the
closing has not occurred by October 31, 1995, then either party hereto may
terminate this DDA if the terminating party has not defaulted hereunder.
Notwithstanding the foregoing, if the sole reason that the closing has not
occurred is due to the fact that the lis pendens recorded on April 10, 1995, as
Instrument No. 95-496676, Official Records, Los Angeles County (the "Lis
Pendens") has not been expunged, then the closing date may be extended until
such time as the Lis Pendens has been expunged as an exception to title;
provided, however, if the Lis Pendens is not expunged as a title exception by
April 30, 1996, then either party may thereafter terminate this Agreement.
(d) In addition to other matters of title, as provided in Section 3 hereof,
title shall be subject to the following matters:
(i) Existing easements of access, support and for parking referred to
hereinabove.
(ii) The Grant Deed pursuant to which Redeveloper or its successor in interest
takes title shall contain a deed covenant in favor of Agency and City obligating
the grantee, its successors and assigns to continuously and uninterruptedly
operate the Hotel, Card Club and Entertainment Center (except for necessary
interruptions which shall not exceed six consecutive months). If any such use
becomes unfeasible or is rendered illegal (other than as the result of voluntary
action on the part of Redeveloper or a successor in interest), the parties shall
negotiate in good faith to substitute appropriate uses for the Property. Said
covenant shall become ineffective from and after the date that is fifty years
after the Rent Commencement Date (as defined below).
(iii) A deed of trust (the "deed of trust"), in favor of Agency securing
Redeveloper's performance under the Lease hereinafter provided for, shall be
recorded at closing; provided, however, that the foreclosure of such deed of
trust shall not extinguish the Agency's obligation to deliver the sum set forth
in Section 1(e) hereof upon the conditions set forth in Section 1(e).
(e) Anything in Section 1(d)(iii) hereinabove or in the Lease to the contrary
notwithstanding, if, for any reason other than the exercise by Redeveloper of
the option to purchase the Leasehold Parcels, as provided herein, the Lease is
terminated, including a voluntary termination under Section 4(c) hereof or a
termination for breach on the part of Redeveloper or any successor to
Redeveloper, Agency shall be obligated to pay to Redeveloper or to its successor
in interest, the original $2,000,000.00 purchase price of the Convention Center
Parcel, and Redeveloper shall be obligated to reconvey the Convention Center
Parcel to Agency. The failure of Redeveloper to reconvey the Convention Center
Parcel to Agency shall be deemed an event of default under the deed of trust
referred to in Section 1(d)(iii) hereof. Such repurchase price shall be paid
over such
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period of time as shall be determined by binding negotiations of the parties
during the 90 day period following the termination of the Lease. Upon the
exercise of by Redeveloper of the option to purchase the Property which is
subject to the Lease and the payment of the purchase price thereof, the
provisions of this Section 1(e) shall be ineffective, and the deed of trust
referred to in Section 1(d)(iii) shall be reconveyed. The effect of the
covenants referred to in Section 1(d)(ii) and this Section 1(e) shall survive
the transfer of title to the optioned property to Redeveloper or its permitted
successor in interest.
(f) The purchase price shall be paid in all cash through the close of escrow.
Agency will pay the cost of a CLTA policy of title insurance, any documentary
transfer tax, and one half of the escrow fees. Redeveloper will pay the cost of
recording, the additional premium and any expenses (including survey costs) in
the event Redeveloper desires to obtain an extended coverage policy of title
insurance, and the other half of the escrow fees. In connection therewith, the
parties shall execute normal and necessary escrow instructions and all documents
reasonably called for thereunder, so long as such instructions and documents are
not inconsistent herewith.
2. Lease of the Hotel and Other Parcels.
(a) Agency hereby leases the Leasehold Parcels to Redeveloper, and Redeveloper
leases the Leasehold Parcels from Agency (the "Lease"), for the term set forth
in Section 8 hereof, subject to and on the terms and conditions set forth in
this Lease.
(b) Notwithstanding the foregoing, this Lease, including the parties'
obligations hereunder, is subject to the satisfaction or waiver of each of the
following conditions on or before the Effective Date (as hereinafter defined):
(i) Agency's receipt of an opinion from bond counsel to be selected and approved
by Agency that this transaction will not adversely affect the tax exempt status
of any bonds or other obligations issued to finance the acquisition and/or
construction of the Property or any part thereof (including any improvements
thereon) to be leased or conveyed to Redeveloper. This condition is inserted for
the sole benefit of Agency and may be waived or deferred by an instrument in
writing signed by Agency. The parties shall use their best efforts to resolve
any bond issues raised by such opinion letter;
(ii) Redeveloper's execution and delivery of the deed of trust and other
security instruments and a recordable Memorandum of Lease, in substantially the
form approved by Agency and Redeveloper's title insurance company;
(iii) The City of Compton's adoption of an amendment to the License providing
that Hollywood Park, Inc., may be a licensee upon a change in state law allowing
Hollywood Park, Inc., (or a joint
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venture of Hollywood Park, Inc., and the Redeveloper) to hold such license, and
subject to Hollywood Park, Inc. (or such joint venture) qualifying as a licensee
pursuant to Subsections 9-10.1 through 9-10.10, and 9-10.13, of the Compton
Municipal Code, and any other applicable provisions of the Compton Municipal
Code;
(iv) Agency's delivery to Redeveloper of Redeveloper's Policies of Title
Insurance described in Section 6 hereof. This condition is inserted for the sole
benefit of Redeveloper and may be waived, in whole or in part, or deferred by
Redeveloper by an instrument in writing signed by Redeveloper.
If the foregoing conditions are not satisfied or waived by the time permitted
for closing under Section 1(c) hereof, then this Lease may be terminated by
either party on ten (10) days prior written notice to the other party, and this
Lease shall thereafter be of no further force or effect.
3. Title and Survey.
(a) Within ten (10) business days following execution hereof, Agency shall
deliver to Redeveloper a Preliminary Title Report issued by Old Republic Title
Company. Redeveloper's fee interest in the Convention Center Parcel shall be
insured by a standard form, CLTA Owners Policy of title insurance, and
Redeveloper's leasehold interest in the balance of the Property shall be insured
as of the Effective Date by a CLTA Policy of Leasehold Title Insurance (the
"Leasehold Policy") to be purchased and paid for by Agency. The Policy shall
insure Redeveloper's leasehold interest in the Leasehold Parcels free and clear
of all liens, encumbrances, restrictions, and rights-of-way of record, subject
only to the following permitted conditions of title ("Permitted Title
Exceptions"):
(i) Agency's fee interest in the Leasehold Parcels;
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(ii) The applicable zoning, building and development regulations of any city,
county, state or federal jurisdiction affecting the Property; and
(iii) Those exceptions approved by Redeveloper by May 31, 1995. If Redeveloper
unconditionally disapproves any exceptions, this DDA shall thereupon terminate
and shall be of no further force or effect, unless the sole disapproved
exception is the Lis Pendens, in which case this DDA shall terminate if the Lis
Pendens is not expunged by April 30, 1996. If Redeveloper conditionally
disapproves any exceptions, then Agency shall have ten (10) business days after
receipt from Redeveloper of a written specification of the title exceptions to
which Redeveloper is taking objection within which to either agree to remove the
exceptions to which objection was taken or to notify Redeveloper that it is
unwilling or unable to do so. In the event that Agency gives notice that it is
unwilling or unable to remove any exception to which objection was taken, then
Redeveloper shall have ten (10) business days within which to give notice that
either (A) it will accept title subject to the exceptions as to which the Agency
is unwilling or unable to remove, or (B) to terminate this DDA forthwith, in
which instance each of the parties shall be relieved of all further liability
hereunder, provided that no such termination shall affect the License for the
Card Club or any liability of Redeveloper to City in connection therewith. The
failure of Agency to give notice as provided hereinabove within the ten (10) day
period shall be deemed to be a notice that it is unwilling or unable to cure the
title exceptions to which Redeveloper took exception, and the failure of
Redeveloper to give notice within the subsequent ten (10) day period that it
will either accept title subject to such matters or to terminate this DDA shall
be deemed an election on the part of Redeveloper to terminate this DDA. If
Agency gives notice that it intends to remove a title defect, it shall use its
best efforts to complete such action within thirty (30) days thereafter, but, in
any case, Agency shall proceed diligently to cause such title exceptions to be
removed.
(iv) With respect to the Convention Center Parcel, those matters set forth in
Section 1(d) hereof.
(v) Should a title exception which Agency is unwilling or unable to cure and
which Redeveloper is unwilling to accept apply only to one or more the Expansion
Parcels, then Redeveloper may elect to defer or sever the affected parcel by
giving written notice thereof to Agency. In the event that the affected parcel
is severed therefrom, there shall be an equitable reduction in the rental and
the option price pursuant to Section 30 hereof. In the event that the parcel is
merely deferred, no such adjustments shall be made until such time as
Redeveloper elects to sever the particular parcel or parcels and gives notice
thereof as provided herein.
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(b) Redeveloper has elected to obtain an ALTA Extended Coverage Title Insurance
Policy for the Convention Center Parcel and the Leasehold Parcels. Redeveloper
shall cause a licensed surveyor or civil engineer to conduct a survey of the
Property, to prepare from the survey a legal description satisfactory to the
title company insuring Redeveloper's title, and to prepare a plot plan showing
the location of any streets, easements, and rights of way over or in favor of
the Property, by June 7, 1995. Redeveloper shall approve or disapprove any
survey by June 15, 1995. Any survey and any premiums for endorsements or
extended coverage shall be paid by Redeveloper.
4. Term.
(a) Effective Date of Agreement. This Lease shall become effective (the
"Effective Date") on the close of escrow on the purchase and sale of the
Convention Center Parcel. If escrow has not closed by July 31, 1995, then
(subject to the extensions of time for the reasons set forth in Subsection)
either party may terminate this Agreement. Redeveloper shall have the right, on
five (5) days prior notice in writing, to enter into the entire Property
(including both the Convention Center Parcel and the Leasehold Parcels) at any
time prior to the Effective Date for the purposes of undertaking preconstruction
inspection, testing and planning studies, and Redeveloper's obligation to
indemnify Agency, pursuant to Section 17 hereof, shall commence on the date
which is five (5) days after such notice is given (but the insurance obligations
set forth in Section 17 shall not commence until the Effective Date).
Redeveloper shall not commence any work of improvement or other construction
prior to the Effective Date.
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(b) Term of Lease. The term of this Lease (the "Term") shall commence on the
Effective Date, and shall end on the date that is fifty (50) years after the
Rent Commencement Date; unless sooner terminated as provided for herein. The
Rent Commencement Date shall be the earlier of (i) the date that the Card Club
or Hotel open for business or (ii) the date that is two (2) years after the
Effective Date. Notwithstanding the foregoing, if the rehabilitation of the
Hotel and Entertainment Center has not been completed by the date set forth in
the Schedule of Performance, then the Agency shall have the right to terminate
this Lease upon giving Redeveloper thirty (30) days written notice, and all
rights of Redeveloper hereunder or in the Property (including the Initial
Improvements (as defined below)) shall thereupon cease and shall be of no
further force or effect,provided however, that within such thirty (30) day
notice period, Redeveloper shall have the right to exercise its option to
purchase the Property, as provided in Section 30 hereof. If the Card Club has
not opened for business within 5 years after the Effective Date, or if the
Redeveloper has not purchased the Property by the date that is 5 years after the
Effective Date, then the Agency shall have the right to bring forth a substitute
developer or operator for the Card Club, and in such event the Redeveloper shall
negotiate in good faith with such party for either an operating agreement or a
buy-out, on reasonable and fair terms, of the Redeveloper's interest in this
DDA. For the purposes hereof, a "Lease Year" shall be the period commencing on
the Rent Commencement Date or any anniversary thereof and ending on the day
prior to the next anniversary of the Rent Commencement Date.
(c) Redeveloper's Right to Terminate the Lease. Redeveloper shall have the
right, at any time either (i) prior to issuance of any building permits for the
Property, or (ii) after issuance of the Certificate of Completion as described
in Section 22 hereof, to terminate this DDA; provided, however, in the event of
such termination, Redeveloper shall remain liable for any accrued obligations
hereunder arising prior to the date of termination, and any rights of Agency
which are intended to survive the termination of this Lease shall continue in
full force and effect. Redeveloper shall provide 90 days prior written notice to
Agency of any election to terminate this DDA. Redeveloper shall not have the
right to terminate this DDA during the period (i) from and after issuance of any
building permit for the Property and (ii) prior to the issuance of the
Certificate of Completion. In the event of such termination, Redeveloper shall
be released of any further obligation to pay rent (other than rent accrued prior
to the date of termination).
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(d) Personalty. Upon termination of the Lease for any reason other than the
exercise by Redeveloper or its permitted successor in interest of the option to
purchase the Property as provided herein, Redeveloper shall deliver possession
of the Property (including both the Convention Center Parcel (subject to Section
1(e)) and the Leasehold Parcels) to Agency in a good and workable state of
repair (ordinary wear and tear excepted), together with full inventories of
furniture, fixtures and equipment of the type for which Redeveloper was entitled
to Rent Reduction/Credit under Section 6 hereof, including all additions to or
replacements of such items installed after the initial rehabilitation of the
Property.
5. Rent. Redeveloper shall pay to Agency, without demand, prior notice,
deduction, or set-off (except as provided in Section 10 hereof) base rent ("Base
Rent"), in the following sums:
Lease Years 1 through 5 - $ 600,000 per year
Lease Years 6 through 10 - $ 850,000 per year
Lease Years 11 through 15 - $1,100,000 per year
Lease Years 16 through 20 - $1,350,000 per year
Lease Years 21 through 25 - $1,600,000 per year
Lease Years 26 through 30 - $1,850,000 per year
Lease Years 31 through 35 - $2,100,000 per year
Lease Years 36 through 40 - $2,350,000 per year
Lease Years 41 through 45 - $2,600,000 per year
Lease Years 46 through
the end of the Lease - $2,850,000 per year
Base Rent shall be payable in advance on the first day of each Lease Year, in
legal currency of the United States, commencing on the Rent Commencement Date.
6. Rent Reduction/Credit. Redeveloper shall receive a credit against any Base
Rent obligation of Redeveloper set forth in Section 10 in an amount equal to the
actual verified costs of the Initial Improvements constructed or installed by
Redeveloper for the Hotel and the Convention Center, including the actual
verified costs of furnishing and equipping the Hotel and Entertainment Center
pursuant to Section 18 hereof and Exhibit 4 hereto, such costs of construction,
furnishings and equipage including but not limited to inventories of china,
glassware and linens, ("Initial Improvement Costs") to be consistent with
budgets prepared by Redeveloper and submitted to and approved by Agency,
provided however that the cost of remedying defects, certified as latent defects
by the City Engineer, which existed at the Effective Date and which Redeveloper
would have included in the budgets had their existence been known at the
Effective Date, shall be eligible for reimbursement even if not included in the
approved budgets. For purposes hereof, the "Initial Improvements" are the
improvements to the Hotel and Convention Center approved by Agency and provided
pursuant to the Scope of Development, and the furniture, fixtures and equipment
having a useful life of one year or more reasonably required to open the Hotel
and Card Club for
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business, where first approved by Agency and described in the Scope of
Development, constructed or acquired prior to the earlier of (i) the issuance of
the Certificate of Occupancy, or (ii) issuance of the Certificate of Completion,
or (iii) the opening of the Hotel or Card Club for business. Except as
specifically provided herein, no capital investment after the Initial
Improvement Costs shall be eligible for such credit. Expendables, and other
personalty having a useful life of one year or less, shall not be deemed to be
part of the furniture, fixtures and equipment the cost of which is eligible for
such credit, unless otherwise approved by Agency's Board of Directors.
Redeveloper's allowable credit shall be on a dollar for dollar basis and shall
be applied to the first Base Rent due hereunder. Any unused credit in any Lease
Year shall be carried forward to the next ensuing Lease Year. Redeveloper shall
not receive the credit against Base Rent unless and until (i) Redeveloper is
entitled to receive a Certificate of Completion, and (ii) the Hotel and
Entertainment Center (including the Card Club) are complete and free of
mechanics' and materialmen's liens which concern an amount, in the aggregate, of
$100,000.00 (or any such liens are released through counterbonding pursuant to
California Civil Code Section 3143). No credit shall be available for costs
incurred after the Hotel or Card Club receives a Certificate of Occupancy or
opens for business unless the Agency's Board of Directors agrees to provide such
additional credit.
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7. Additional Consideration. Compton Entertainment, Inc. ("CEI"), shall, as
additional consideration, deliver to with Agency the sum of $1,000,000. Such
additional consideration shall be delivered by CEI to Agency in ten installments
as follows: The sum of $100,000 shall be paid on the first day of the third
Lease Year, and the sum of $100,000 shall be paid by CEI to Agency on the first
day of each subsequent Lease Year through the 12th Lease Year, for an aggregate
maximum of $1,000,000.00. The payments of additional consideration provided for
herein shall not be subject to the Rent Reduction/Credit provided for in Section
6 hereof, and shall remain the obligation of CEI and shall not become the
obligation of any assignee of this DDA.
8. Taxes.
(a) Covenant to Pay Taxes. As additional rent, Redeveloper shall pay directly to
the appropriate taxing authorities all Taxes (as defined in Section 8(b)). All
Taxes shall be paid at least 10 days before delinquency and before any fine,
interest or penalty shall become due or be imposed by operation of law for their
non-payment. Redeveloper shall furnish to Agency at least 10 days prior to the
date when any Taxes would become delinquent receipts or other appropriate
evidence establishing such payment. Notwithstanding the foregoing, so long as
Redeveloper is fully operating the Card Club and the Hotel, Redeveloper shall
not be obligated to pay or shall be entitled to receive a refund or rebate of
that portion of any possessory interest taxes, or real property taxes relating
to the Property, to the extent payable or allocable to Agency or City during the
first ten (10) Lease Years of the Term. Provided, however, that if Redeveloper
or Redeveloper's successor in interest has not obtained a State of California
Gaming License for the Card Club within one year after the Effective Date,
Redeveloper shall be obligated to pay the full possessory interest tax or real
property tax (or any prorated portion thereof), and shall not be entitled to any
rebate or refund thereof, until the date upon which the California Gaming
License is obtained.
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(b) Definition of Taxes. The term "Taxes" shall include all real property taxes
(including increases in real property taxes caused by reappraisals that are the
result of changes in the ownership of Agency's interest), possessory interest
taxes, personal property taxes, charges and assessments, (including but not
limited to street improvement liens) which are levied, assessed upon or imposed
by any governmental authority or political subdivision thereof during or with
respect to any portion of the Term hereof with respect to the Property or any
improvements, fixtures, equipment or other property of Redeveloper or Agency,
real or personal, located on the Property or used in connection with the
operation of the Project, and any tax which shall be levied or assessed in
addition to or in lieu of such real or personal property taxes, and any license
fees, taxes measured by or imposed upon rents, or other taxes or charges upon
Agency's leasing of the Property or the receipt of rent hereunder. All
assessments, taxes, fees, levies and charges imposed by governmental agencies
for services such as fire protection, street, sidewalk and road maintenance,
refuse removal and other public services generally provided without charge to
owners or occupants prior to the adoption of Proposition 13 by the voters of the
State of California in the June 1978 election, also shall be deemed included
within the definition of "Taxes" for the purposes of this Lease. Provided,
however, that the definition of "Taxes" shall not include (i) any taxes imposed
by City (other than gaming tax) unless such taxes are of general application
over the City as a whole, or (ii) any special assessments or special taxes
hereafter adopted by City against the Property unless Redeveloper shall have
been granted the right of a property owner to protest the inclusion of the
Property in the Special District in question.
(c) Proration of Redeveloper's Tax Liability. Redeveloper's liability to pay
Taxes shall be prorated on the basis of a 365-day year to account for any
fractional portion of a fiscal tax year included in the Term at its commencement
or expiration.
9. Use and Compliance with Laws.
(a) Redeveloper or an operator under contract to Redeveloper shall use and
operate the Property solely for the following purposes:
(i) the construction and operation of the Hotel in whole or in part.
(ii) the construction and operation of the Card Club containing the maximum
number of gaming tables permitted, subject to health and safety codes and
marketing consideration, in order to maximize revenues.
(iii) operation of one or more restaurants (the "Restaurants").
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(b) Redeveloper shall have the obligation to provide ancillary facilities which
may include but need not be limited to a night club, a sports bar and other
entertainment facilities. The parties recognize that public demand for such
matters may vary from time to time as public tastes and technology change, and
Redeveloper agrees to consult with Agency with respect to the installation,
commencement and termination of operation, substitution and other modification
or replacement of such ancillary facilities.
Redeveloper covenants to and for the benefit of Agency that, subject to Section
32 hereof, Redeveloper shall continuously and uninterruptedly, throughout the
Term of this Lease, operate the Hotel, in whole or in part, the Card Club and
one or more Restaurants on the Property, following completion of the Initial
Improvements constituting the Project, subject to temporary closures for repairs
or remodeling which are reasonable in frequency and duration. Redeveloper shall
diligently pursue obtaining the requisite permission from the State of
California for operation of the Card Club.
(c) At all times from and after opening for business, Redeveloper shall at all
times during the Term hereof obtain, keep and maintain all licenses and permits
required by state and local governmental authorities necessary to operate the
Hotel and the Entertainment Center from the Property. Redeveloper hereby agrees
to comply with all obligations under the Card Club License issued by the City of
Xxxxxxx, and Redeveloper's breach thereof or the termination thereof shall be a
breach of this Lease.
(d) Redeveloper shall at all times provide such security for operation of the
Hotel and Entertainment Center as shall reasonably be required to provide all
necessary protection for the customers, employees, guests, contractors and other
invitees of the Entertainment Center. Redeveloper shall fully comply with the
security requirements of the City of Xxxxxxx Card Club Ordinance and with the
Security Plan submitted to and approved by the City in connection with the
issuance of the Card Club License. Neither Agency nor Agency's Executive
Director shall have any duty or obligation to review, evaluate, or direct the
security of the Hotel and Entertainment Center operation, it being the intent
hereof that Redeveloper shall be solely responsible for providing all necessary
security. Redeveloper shall indemnify, hold harmless and defend Agency and City
against any and all loss, cost or obligation with respect to any claim that any
injury to person or property arising out of or in connection with the operation
of the Property was the result of or was aggravated by any lack of security or
defect in the security plan or the implementation thereof,except for matters
caused by the sole active negligence or to the extent of the wilful misconduct
of Agency or City.
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(e) Redeveloper shall, at Redeveloper's expense, comply promptly with all
applicable statutes, ordinances, rules, regulations, orders, covenants,
conditions, and restrictions of record, and requirements of any governmental
authority or the local Insurance Services Office in effect during the Term
hereof, regulating the Property, the improvements thereon, or Redeveloper's use
of the Property. Redeveloper shall keep and maintain in full force and effect,
and in good standing, all permits and licenses required from state and local
governmental authorities for operation of the Hotel and Entertainment Center
(including the Card Club), and termination of any permit or license shall be a
material breach hereof. If the Insurance Services Office or any other similar
body or any bureau, department or official of the state, county or city
government or any other governmental authority having jurisdiction requires that
any changes, modifications, replacements, alterations, or additional equipment
necessary to life safety be made or supplied in or to any portion of the
Property by reason of Redeveloper's use thereof, Redeveloper shall, at
Redeveloper's cost and expense, make and supply such changes, modifications,
replacements, alterations or additional equipment. Redeveloper shall not use nor
permit the use of the Property in any manner that will tend to create waste or a
nuisance.
(f) At present, the Property conforms to the Redevelopment Plan. This Lease is
conditioned upon, and Redeveloper shall at all times operate the Property, in
conformity with the Redevelopment Plan.
(g) Notwithstanding anything provided herein to the contrary, the parcels
identified as Parcels 2, 3 and 4 of Parcel Map 10784, recorded in Book 112,
Pages 96 and 97, of Parcel Maps, Official Records, Los Angeles County,
California, Parcels 1 and 2 of Parcel Map 8669, recorded in Book 87, Page 9, of
Parcel Maps, Official Records, Los Angeles County, California, and Xxxxxxx 0, 0,
xxx 00 xx Xxxxxx Map 7899, recorded in Book 79, Page 47-49, of Parcel Maps,
Official Records, shall be used by Redeveloper only for surface parking (unless
redesignated at the request of Redeveloper and approved by the Agency), and
Parcels 8 and 9 of Parcel Map No. 7899 shall be used by Redeveloper only for
purposes of expansion of the Card Club and/or for a Casino pursuant to an
approved plan of expansion, provided that such plan makes provision for, and
Redeveloper in fact provides, not less than 14 gross acres of surface parking on
the Property for the benefit of the Hotel and Entertainment Center and for no
other purpose whatsoever. The Agency shall not unreasonably withhold consent to
redesignation of the parcels for development of the expansion of the Card Club,
and no fee shall be charged for such redesignation except as may be necessary to
cover any of the Agency's reasonable expenses (including attorneys fees) in
effectuating such redesignation.
10. Physical Condition of the Property.
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(a) "As-Is" Condition. Except as provided herein below to its contrary, Agency
disclaims any and all covenants or warranties respecting the condition of the
soil or subsoil or any other physical or environmental condition of the
Property. Redeveloper is purchasing and leasing the entire Property in their
"as-is" condition. Prior to the date set forth in the Schedule of Performance
attached hereto as Exhibit 3 (the "Schedule of Performance"), Redeveloper may,
at Redeveloper's expense, conduct examinations, soils tests or an environmental
site assessment on the Property (in connection with which Redeveloper shall
indemnify and hold Agency and the Property free and harmless from any and all
costs, expenses, liabilities and charges resulting from Redeveloper's entry onto
the Property). If the examination or soils tests reveal that the Property is not
suitable (or cannot be made suitable at reasonable cost) for construction of the
Initial Improvements thereon, Redeveloper may elect to cancel this DDA upon
written notice to Agency given within ten (10) days after Redeveloper's receipt
of the completed soils reports or environmental site assessments, but in any
event such notice shall be delivered to Agency no later than June 15, 1995.
Agency hereby assigns to Redeveloper any and all causes of action which it may
have against prior developers, builders, contractors, subcontractors or
suppliers of labor and/or materials to the Hotel Parcel and the Convention
Center Parcel for design and construction defects, negligent construction or
other causes of action of a similar nature resulting in damage to the Hotel
Parcel and/or the Convention Center Parcel, it being understood that (i) all
costs of any litigation (including attorneys' fees) shall be borne solely by
Redeveloper and (ii) the proceeds from any recovery with respect to such
litigation, after payment of the costs thereof (including attorneys' fees),
shall be credited against the cost of the Initial Improvement Costs, thus
reducing the Rent Reduction/Credit referred to in Section 6 hereof.
(b) Environmental Conditions of Property Prior to Commencement of
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Lease. Agency shall be solely responsible for the costs of clean up or
remediation of any deposit or discharge of Hazardous Materials on or from the
Property which occurred prior to the Effective Date, and Agency shall indemnify,
hold harmless and defend Redeveloper against any and all loss, cost or
obligation with respect thereto (including attorneys fees and costs), provided,
however, that Agency shall not be liable to Redeveloper for any consequential
damages suffered by Redeveloper by reason of the existence of any Hazardous
Waste on the Property which existed prior to the Effective Date and which could
have reasonably been discovered by a competent environmental assessment of the
Property.
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(c) Environmental Condition of the Property During Lease Term.
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Redeveloper shall indemnify, protect, defend and hold harmless Agency from and
against any and all claims, liabilities, suits, losses, costs, expenses and
damages, including but not limited to attorneys' fees and costs, arising out of
any claim for loss or damage to any property, including the Property (including
both the Convention Center Parcel and the Leasehold Parcels), injuries to or
death of persons, or for the cost of cleaning up the Property, and removing
hazardous or toxic substances, materials and waste therefrom, by reason of
contamination or adverse effects on the environment, or by reason of any
statutes, ordinances, orders, rules or regulations of any governmental entity or
agency requiring the clean-up of the Property caused by or resulting from any
hazardous material, substance or waste introduced to the Property during the
Term of this Lease. The foregoing indemnity shall survive the expiration or
termination of this Lease, and the close of escrow in the event of Redeveloper's
exercise of the option to purchase the Leasehold Parcels set forth below.
However, Redeveloper shall not be liable on account of this indemnity if, prior
to the date set forth in the Schedule of Performance, Redeveloper elects to
terminate this Lease on account of Redeveloper's disapproval of the condition of
the Property as provided in Section 10(a) hereof. Moreover, upon the expiration
of this Lease, if Redeveloper has not purchased the Leasehold Parcels, then
Redeveloper shall not thereafter be liable on account of this indemnity as a
result of hazardous or toxic substances, materials, or waste that were located
on the Leasehold Parcels prior to the Effective Date, except to the extent such
hazardous or toxic substances, materials, or waste were deposited on the
Property prior to the Effective Date by Redeveloper or Redeveloper's agents,
officers, employees, contractors, sublessees, or assignees.
(d) Other Conditions of Property. Redeveloper, on behalf itself and its
successors, affiliates, partners, and assigns, hereby fully and entirely release
and discharge the City (as a third party beneficiary hereof) and Agency
(including the City's and Agency's servants, employees, agents, representatives,
successors, descendants, heirs, executors, administrators, assigns, and
attorneys), and of each of them alone, of and from any and all claims, causes of
action, or demands, liabilities, damages, and losses, of whatever nature,
anticipated or unanticipated, known or unknown, or in connection with, or in any
way related to, the Property, or for the physical condition of the Property or
any portion thereof, other than as provided hereinabove with respect to
Hazardous Wastes. This release constitutes an explicit waiver by Redeveloper of
each and all of the provisions of California Civil Code Section 1542, which
states as follows:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
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Redeveloper's Initials: _____________________________________________
Redeveloper hereby declares and represents that Redeveloper is effecting and
executing this release of the City and Agency after having read all of this
release and with full understanding of its meaning and effect and after having
received full legal advice as to Redeveloper's rights from an attorney.
11. Construction by Redeveloper.
(a) Approval of Financing. Within ninety (90) days after the Effective Date,
Redeveloper shall deliver to Agency, for Agency's approval, evidence of
Redeveloper's construction and take-out financing for the Initial Improvement
Costs for the Initial Improvements to be constructed or installed by Redeveloper
on the Property pursuant to this Section 11 including any plan of self
financing, which approval shall not be unreasonably withheld or delayed. In
order to enable Agency to evaluate Redeveloper's financing, Redeveloper shall
provide to Agency evidence of such financing including at a minimum
Redeveloper's proforma and line-item budget, a copy of a binding commitment
obtained by Redeveloper for a leasehold mortgage loan or loans financing, if
applicable, (together with any equity capital contribution of Redeveloper) the
hard and soft costs of constructing the Project, financial statements of
Redeveloper and the lender, and other evidence satisfactory to Agency of sources
of loans or capital, sufficient to demonstrate that Redeveloper has or will have
adequate funds to cover all development and construction costs of the entire
Project. The terms and conditions of such commitments, and the identity of the
construction lender itself, shall be subject to Agency's approval, which
approval shall not unreasonably be withheld, provided,however, that should the
lender be a bank, savings and loan association, insurance company or other
institutional lender, no approval of the identity of the lender or other source
of funds shall be required.
(b) Scope of Development. The Initial Improvements shall consist of the matters
described in the Scope of Development attached hereto as Exhibit 5. The Initial
Improvements shall include high quality landscaping as approved by Agency
pursuant to the terms hereof (including, but not limited to, the Conditions of
Construction set forth in Exhibit 4).
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(c) Construction Schedule. Redeveloper shall diligently comply with all
performance dates, including dates for submitting and obtaining approvals for
plans and specifications, as set forth in the Schedule of Performance attached
hereto as Exhibit 3 and incorporated herein by this reference (the "Schedule of
Performance"). Redeveloper shall diligently seek approval of all plans and
specifications, and permits, required to construct the improvements described in
the Scope of Development.
(d) Anti-discrimination During Construction. Redeveloper, for itself and its
successors and assigns, agrees that it shall not discriminate against any
employee or applicant for employment because of age, sex, marital status, race,
handicap, color, religion, creed, ancestry, or national origin in the
construction of the improvements constituting the Property.
(e) Commencement of Construction.
(i) Redeveloper shall commence construction and installation of the Initial
Improvements, notwithstanding any other Section of this Lease to the contrary
(including but not limited to Section 32), within the time period set forth in
the Schedule of Performance.
(ii) When necessary for Redeveloper to commence construction of the Initial
Improvements, Redeveloper may use, sell, demolish, remove, or otherwise dispose
of any improvements existing on the Property at the commencement of the Term of
this Lease. Agency shall receive no compensation for such improvements other
than the performance of Redeveloper's covenants expressed in this Lease,
provided, however, that the proceeds from such disposition shall be credited
against the Initial Improvement Costs, for purposes of computing the Rent
Reduction/Credit under Section 6 hereof.
(iii) After commencement of construction, Redeveloper shall diligently prosecute
such construction to completion. Such construction shall comply with the
Conditions of Construction set forth in Exhibit 4 attached hereto and
incorporated herein by this reference. All work shall be performed in a good and
workmanlike manner, shall substantially comply with the plans and specifications
submitted to and approved by Agency and shall comply with all applicable
governmental licenses, permits, laws, ordinances and regulations.
(iv) No materials, equipment, fixtures, carpets, appliances, or any other part
of the Initial Improvements shall be purchased or installed under conditional
sales agreements, leases, or under other arrangements wherein the right is
reserved or accrues to anyone to remove or to repossess any such items. Agency
may, in the exercise of its good faith
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business judgment, permit certain specialized equipment to be leased for the
Project but only with its prior written approval and, then, only upon
Redeveloper's execution and delivery of an assignment of the lease to Agency,
together with the original lease and the equipment lessor's written approval of
such assignment, in form satisfactory to Agency.
(f) Completion Of Construction. Construction of the Initial Improvements shall
be completed and the Hotel and Entertainment Center (including the Card Club)
ready for occupancy and open for business by the date set forth in the Schedule
of Performance; provided that the time for completion shall be extended for as
long as Redeveloper shall be prevented from completing the construction by
delays beyond Redeveloper's reasonable control, including but not limited to
flood, earthquake, fire, acts of God, war, epidemic and civil commotion;
provided, further, however, Redeveloper's failure to complete construction and
equipage of the Card Club and Hotel and to open the Hotel for business within
one year after Effective Date (subject to the term of any reasonable delay
caused by force majeure) shall, at Agency's election, trigger Agency's right to
terminate the Lease as provided herein; however, if this Lease is so terminated,
then Redeveloper shall be released from liability for rent under this Lease
accruing thereafter.
(g) Minor Field Changes. The parties acknowledge that it is common practice in
the construction industry to make minor changes during the course of
construction without substantially altering the plans and specifications
previously approved by Agency. On completion of the work, Redeveloper shall give
Agency notice of all changes in plans and specifications made during the course
of the work and shall, at the same time, supply Agency with "as built" drawings
accurately reflecting all such changes.
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(h) Easements, Zoning and Other Restrictions.
(i) Easements and Dedications. In order to provide for the more orderly
development of the Property, it may be necessary that street, water, sewer,
drainage, gas, power line and other easements and dedications, and similar
rights be granted or dedicated over or within portions of the Property. Agency
shall, upon request of Redeveloper, join with Redeveloper in executing and
delivering such documents as may reasonably be necessary for the purpose of
granting such easements and dedications.
(ii) Zoning. If necessary or appropriate to the Project, Agency agrees, from
time to time upon request of Redeveloper, to execute such documents, petitions,
applications and authorizations as may reasonably be appropriate or required for
the purposes of obtaining conditional use permits, zoning and rezoning,
tentative and final map approval, precise plan approval, and similar government
approvals with respect to the Property or any part thereof. This paragraph shall
apply to Agency solely in its capacity as owner of the Property and shall not in
any way restrict or bind Agency acting in its governmental capacity.
(iii) Street Vacation. If requested by Redeveloper and if consistent with the
approved plan of development, Agency will apply for vacation of internal streets
within the Property, provided that such vacation does not result in the creation
of land locked parcels.
(iv) Expenses. In each of the foregoing instances, Agency shall be without
expense therefor. Redeveloper shall pay all costs and expenses thereof
(including reimbursement of normal application and processing fees and other
normal and necessary out-of-pocket costs) incurred by Agency.
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(i) Ownership of Improvements. The Initial Improvements on the Property
constructed or installed by Redeveloper shall be owned by Redeveloper until the
expiration or sooner termination of the Term of this Lease; provided, however,
if Redeveloper exercises the option described in Section 30 hereof and purchases
the Property, then Redeveloper shall retain ownership of the Initial
Improvements (in addition to all other Improvements, furniture, fixtures, and
equipment) on the Property notwithstanding the termination of this Lease.
Redeveloper shall not, however, remove any improvements from the Property
(without Agency's prior written consent), nor waste, destroy or modify any
improvements on the Property, except as permitted by this Lease. Anything in
this Section 11(i) to the contrary notwithstanding, Redeveloper shall have the
right to demolish or remove existing improvements on the Property if necessary
or appropriate to permit development of the Property in accordance with the
approved plans. The parties covenant and agree for themselves and all persons
claiming under them that the improvements are real property. Upon expiration or
sooner termination of the Term of this Lease (other than by reason of
Redeveloper's exercise of its option to purchase under Section 30 hereof), all
improvements on the Property, and all furniture, fixtures and equipment used by
Redeveloper in operating the Property (including operation of the Hotel and
Entertainment Center) shall, without additional compensation to Redeveloper,
thereupon become Agency's property free and clear of all claims and encumbrances
to or against them by Redeveloper or any third person, unless within ninety (90)
days after such expiration or termination Agency requires that all or certain
improvements or property be removed by Redeveloper at Redeveloper's expense or
Redeveloper exercises the option described in Section 30 hereof and purchases
the Leasehold Parcels.
12. Certificate of Completion.
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(a) After completion of construction, development, and installation by
Redeveloper of the Initial Improvements, Agency shall, promptly following
written request by Redeveloper therefor, furnish Redeveloper with a Certificate
of Completion, for such completed Initial Improvements. After issuance of a
Certificate of Completion for such completed Initial Improvements, any party
then owning or thereafter purchasing, leasing or otherwise acquiring any
interest in the Project shall not (because of such ownership, purchase, lease or
acquisition) incur any obligation or liability under this DDA as to such portion
of the Project, except that such party shall be bound by any covenants,
conditions or restrictions contained in this Lease, or other instruments
executed in accordance with the provisions of this Lease. Neither Agency nor any
other person, after recordation of a Certificate of Completion, shall have any
rights, remedies or controls that it would otherwise have or be entitled to
exercise as a result a breach of Redeveloper's construction obligations under
this Lease, except that said Certificate of Completion shall have no effect on
any other separate instrument signed by Redeveloper in favor of the City or
Agency, nor shall it have any effect on Redeveloper's obligations under the
environmental warranties and other indemnities provided herein, nor shall it
waive any obligations of Redeveloper included hereunder to survive issuance of a
Certificate of Completion.
(b) If Agency refuses or fails to furnish a Certificate of Completion after
written request from Redeveloper, Agency shall, within thirty (30) days after
the written request, provide Redeveloper with a written statement of the reasons
Agency refused or failed to furnish such Certificate of Completion. The
statement shall also contain Agency's opinion of the action Redeveloper must
take to obtain such Certificate of Completion. If the reason for such refusal is
confined to the immediate availability of specific items or material for
landscaping, and the estimated cost of completion does not exceed $250,000.00
and the particular item or matter is not essential to the operation of the
Property, then Agency will issue its Certificate of Completion upon the posting
by Redeveloper with Agency of a bond or other collateral satisfactory to Agency
in an amount equal to 125% of the reasonable cost of completing the work not yet
completed, but the posting of such bond shall not excuse Redeveloper from
obligation to complete the work, and Redeveloper shall not be entitled to any
Rental Credit for such work until it has, in fact, been completed.
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(c) Such Certificate of Completion shall not constitute evidence of compliance
with or satisfaction of any obligation of Redeveloper to any holder of a
mortgage, trust other than with respect to Redeveloper's right to claim the Rent
Reduction/Credit for work actually completed. Such Certificate of Completion
shall not be construed as a notice of completion as described in California
Civil Code Section 3093.
13. Utilities and Services. Redeveloper shall make all arrangements for and pay
for all utilities and services furnished to or used by it or its licensees or
subtenants, including, without limitation, gas, electricity, water, telephone
service, communications, cable television, and trash collection, and for all
connection charges.
14. Maintenance.
(a) Throughout the Term, Redeveloper shall, at Redeveloper's sole cost and
expense, maintain the Property in safe and first class condition and repair
(ordinary wear and tear excepted) and in accordance with (i) all applicable
laws, rules, ordinances, orders and regulations of federal, state, county,
municipal, and other governmental agencies and bodies having or claiming
jurisdiction and all their respective departments, bureaus, and officials; (ii)
the insurance underwriting board or Insurance Services Office having
jurisdiction over the Property; and (iii) all insurance companies insuring all
or any part of the Property. Agency shall not have any responsibility to
maintain the Property whatsoever.
(b) Except as provided in Section 25 hereof, Redeveloper shall promptly and
diligently repair, restore, and replace as required to maintain or comply as
above, or to remedy all damage to or destruction of all or any part of the
Property. The completed work of maintenance, compliance, repair, restoration, or
replacement shall be equal in value, quality and use to the condition of the
Property before the event giving rise to the work. Agency's election to perform
any obligation of Redeveloper under this section on Redeveloper's failure or
refusal to do so shall not constitute a waiver of any right or remedy for
Redeveloper's default, and Redeveloper shall promptly reimburse, defend and
indemnify Agency against all liability, loss, cost and expense arising from such
election.
(c) Redeveloper waives the provisions of California Civil Code sections 1941 and
1942 with respect to Agency's obligations for tenantability of the Leasehold
Parcels and Redeveloper's right to make repairs and deduct the expenses of such
repairs from rent.
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15. Alterations. Redeveloper shall not make any alterations or additions to the
Leasehold Parcels (other than interior, non-structural, non- systemic
alterations costing not more than $250,000 in any one instance) without the
prior written consent of Agency's executive director, which shall not be
unreasonably withheld. In constructing alterations or additions that exceed the
cost of $250,000, or which affect the exterior or structural portions or the
systems of the Leasehold Parcels, Redeveloper shall comply with (a) the
Conditions of Construction set forth in Exhibit 4 and (b) the provisions of
Section 11 hereof. If Redeveloper makes any alterations to the Leasehold Parcels
as provided in this Section, the alterations or additions shall not be commenced
until 20 days after Agency's executive director has received written notice from
Redeveloper stating the date the construction of the alterations or additions is
to commence so that Agency's executive director, on behalf of Agency, can post
and record an appropriate notice of nonresponsibility. The provisions of this
Section 15 shall not apply to the construction or installation of the Initial
Improvements.
16. Destruction.
(a) Partial Destruction; Restoration by Redeveloper. If less than fifty percent
(50%) of the floor area of the improvements on the Property are rendered
unusable by a casualty during the Term of this Lease and the proceeds of the
casualty insurance are sufficient to do so or, if Redeveloper has failed to
maintain the full amount of casualty insurance required by Section 17(c) hereof,
whether or not the proceeds of the insurance are sufficient, then Redeveloper
shall restore the Improvements on the Property to substantially the same
condition as they were in immediately before such damage or destruction, in
accordance with the original plans and specifications (except for changes as may
be required by changed building and safety codes). Such damage or destruction
shall not terminate this Lease. In reconstructing the improvements, Redeveloper
shall comply with (i) the Conditions of Construction set forth in Exhibit 4 and
(ii) the provisions of Section 11. In the event that, notwithstanding the fact
that Redeveloper has maintained the full amount of casualty insurance required,
the insurance proceeds are not adequate to fund the restoration of the Property,
then Redeveloper may terminate the Lease in the manner provided herein below
with respect to a destruction of more than 50% of the Property, as provided in
Section 16(b) hereinbelow.
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(b) Major Damage or Destruction; Redeveloper's Right to Terminate.
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If more than fifty percent (50%) of the floor area of the improvements on the
Property are rendered unusable by a casualty during the Term of this Lease, then
Redeveloper shall have the option of either repairing and reconstructing the
Property or of terminating this Lease. If Redeveloper elects to repair and
reconstruct, Redeveloper shall promptly do so and shall comply with (i) the
Conditions of Construction set forth in Exhibit 4 and (ii) the provisions of
Section 11. During the period of reconstruction, Redeveloper may continue to
conduct business from the Property from temporary facilities such as a tent or
temporary structures (subject to compliance with local building and safety codes
or other applicable municipal codes).
To exercise its right of termination, Redeveloper must comply with all of the
following conditions:
(i) Give Agency notice of termination within 30 days after the damage or
destruction, specifying the date of termination which shall be not less than 60
days nor more than 120 days after the date such notice of termination is given;
(ii) Prior to the termination date, cure any defaults on Redeveloper's part
under this Lease;
(iii) Continue to make all payments when due (including without limitation the
prorated portion of any annual Base Rent becoming due after Redeveloper has
given the notice of termination but prior to the date of termination), if any,
as required by the provisions of this Lease until the date of termination, if
Redeveloper continues to use the Property after the casualty but prior to the
date of termination;
(iv) Prior to the termination date, pay in full any outstanding indebtedness
incurred by Redeveloper and secured by an encumbrance or encumbrances on the
Property or any part thereof or an interest therein, or alternatively, deliver
to Agency the written consent of the holders of all such encumbrances to the
early termination of this Lease and extinguishment of their liens;
(v) Prior to the termination date, cause to be discharged all liens and
encumbrances encumbering the Property or Redeveloper's interest in the Leasehold
Parcels resulting from any act or omission of Redeveloper;
(vi) On or before the termination date, deliver possession of the Property to
Agency, quitclaim all right, title and interest in the Property to Agency and
cease to do business on the Property, and vacate the Property;
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(vii) Prior to the termination date, effectively relinquish, assign, and deliver
to Agency Agency's share of insurance proceeds resulting from the casualty as
provided in subparagraph (d) below.
In the event of any such termination, any Base Rent paid in advance for such
Lease Year, if any, shall be pro-rated through the date the Lease is terminated.
If Redeveloper does not either (i) terminate the Lease as provided herein, or
(ii) restore the Property in a timely fashion, then the Redeveloper shall be in
breach hereof.
(c) No Abatement or Reduction of Rent. In case of any damage or destruction
where this Lease is not terminated, there shall be no abatement or reduction of
rent except to the extent such rent is paid through a rental continuation policy
or rider.
(d) Insurance Proceeds.
(i) If Redeveloper is obligated or elects to restore the Property pursuant to
this Section, the proceeds of any insurance maintained under this Lease or
pursuant to the deed of trust (other than rental continuation insurance) shall
be made available to Redeveloper for payment of costs and expenses of repair. If
the insurance proceeds are insufficient to cover the cost of repair, then
Redeveloper shall deposit the amount of the deficiency with Agency or shall
otherwise provide assurances to Agency's reasonable satisfaction that such funds
are and will be available, and such funds shall be disbursed by Redeveloper
first, and the balance of the construction costs shall be disbursed from the
insurance proceeds by Agency.
(ii) In the event that the Lease is terminated by reason of the destruction of
all or some part of the improvements on the Property, then the casualty
insurance proceeds shall be divided between Agency and Redeveloper as follows:
(A) Redeveloper shall receive the portion of the casualty insurance proceeds
which bears the same relationship to the total casualty insurance proceeds as
the value of the Initial Improvements not amortized through the Rent
Reduction/Credit bears to the value of all of the improvements on the Property,
both measured prior to the casualty loss.
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(B) Any proceeds of fire and extended coverage insurance attributable to
improvements on the Expansion Parcel, or any improvements that were purchased by
Redeveloper, and that were constructed by Redeveloper at Redeveloper's cost and
expense shall be retained by Redeveloper, except and to the extent of the
credit, if any, given to Redeveloper by Agency on account of such improvements.
(C) Agency shall receive the balance of the casualty insurance proceeds.
Anything herein to the contrary notwithstanding, Agency alone shall be entitled
to any rent continuation insurance proceeds. In the event that Redeveloper
exercises its option to purchase under Section 30 hereof and, in fact,
consummates such purchase, Redeveloper shall be entitled to all of the casualty
insurance proceeds.
(e) Lease to Govern Redeveloper's Rights. Redeveloper waives the provisions of
Civil Code (S)1932(2) and Civil Code (S)1933(4), or any successor statutes, with
respect to any destruction of the Leasehold Parcels, and agrees that
Redeveloper's rights in case of destruction shall be governed solely by the
provisions of this Lease. The provisions of this Lease shall also govern the
Redeveloper's obligations with respect to insurance and restoration of casualty
losses under the deed of trust.
17. Insurance and Indemnity.
(a) Liability Insurance.
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(i) Redeveloper shall procure at its sole cost and expense, and keep in effect
from the date of this Lease and at all times until the end of the Term,
Commercial General Public Liability Insurance applying to the use and occupancy
of the Property, or any part thereof, and the business operated by Redeveloper,
its sublessees, licensees, employees, agents, or any other occupant, on the
Property. Such insurance shall include Broad Form Contractual liability
insurance coverage insuring all of Redeveloper's indemnity obligations under
this Lease. Such coverage shall have a minimum combined single limit of
liability or the equivalent thereof of at least Five Million Dollars
($5,000,000). Redeveloper's public liability insurance shall include dram shop
liability insurance or liquor liability insurance. All of Redeveloper's public
liability insurance policies shall be written to apply to all bodily injury,
property damage, personal injury and other covered loss, however occasioned,
occurring during the policy term, shall be endorsed to provide that such
coverage shall be primary and that any insurance maintained by Agency shall be
excess insurance only. Such coverage shall also contain endorsements: (i)
deleting any employee exclusion on personal injury coverage; (ii) deleting any
liquor liability exclusion; and (iii) providing for coverage of employer's
automobile non-ownership liability. All such insurance shall provide for
severability of interests or a cross-liability endorsement; shall provide that
an act or omission of one of the named insureds shall not reduce or avoid
coverage to the other named insureds; and shall afford coverage for all claims
based on acts, omissions, injury and damage, which claims occurred or arose (or
the onset of which occurred or arose) in whole or in part during the policy
period. The policy shall be endorsed to waive the insurer's rights of
subrogation against Agency.
(b) Workers' Compensation Insurance. Redeveloper shall also maintain Workers'
Compensation insurance in accordance with California law, and an employer's
liability insurance endorsement with customary limits. The policy shall be
endorsed with a waiver of subrogation clause for Agency and the City and their
members, council members, officers, employees, and agents.
(c) Property Insurance.
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(i) Redeveloper shall at Redeveloper's expense obtain and keep in force during
the Term of this Lease a policy of Broad Form (fire and extended coverage)
insurance covering loss or damage to the Property (including the Improvements),
and all furniture, fixtures, equipment, and other personal property of
Redeveloper, in the amount of the Full Replacement Cost Value thereof, as the
same may exist from time to time, against all perils included within the
classification of fire, extended coverage, builder's risk, vandalism, malicious
mischief, and special extended perils ("Special Form," as that term is known in
the insurance industry). Agency and Redeveloper shall be named as the loss
payees on such policy, and any such coverage for the Convention Center Parcel
shall include a Lender's Loss Payable endorsement in favor of Agency, but
Agency's rights shall be subject to the provisions of this Lease. If such
insurance coverage has a deductible clause, the deductible amount shall not
exceed $100,000 per occurrence, and Redeveloper shall be liable for such
deductible amount. Redeveloper shall, in addition, obtain and keep in force
during the Term of this Lease a policy of rental interruption insurance covering
a period of one year, with loss payable to Agency, which insurance shall also
cover all Base Rent, Taxes and insurance premiums for said period.
(ii) The "Full Replacement Cost Value" of the property to be insured under this
Section shall be determined by Redeveloper subject to Redeveloper's exercise of
its reasonable discretion. Not more frequently than once every three (3) years,
either party shall have the right to notify the other party that it elects to
have the Full Replacement Cost Value redetermined by an independent party. The
determination and redeterminations shall be made promptly and in accordance with
the rules and practices of the Insurance Services Office, or a like board
recognized and generally accepted in the industry, and each party shall be
promptly notified of the results by the party making the determination. The
insurance policy shall be adjusted according to the redetermination.
(d) Insurance Policies.
(i) Not more frequently than once every three (3) years, if in the reasonable
opinion of Agency the amount or type of any insurance at that time is not
adequate, Redeveloper shall either acquire or increase the insurance coverage as
reasonably required by Agency.
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(ii) All insurance required under this Lease shall be issued by companies having
a Best's rating of B++vi or better and otherwise reasonably satisfactory to
Agency. Redeveloper shall deliver to Agency copies of policies of such insurance
or certificates evidencing the existence and amounts of such insurance with loss
payable clauses as required by this Section 28. No such policy shall be
cancelable or subject to reduction of coverage or other modification except
after thirty (30) days' prior written notice to Agency. Redeveloper shall, at
least thirty (30) days prior to the expiration of such policies, furnish Agency
with renewals or "binders" thereof. Redeveloper shall not do or permit to be
done anything which shall invalidate the insurance policies referred to in this
Section 28. All policies of insurance shall name Agency and the City and their
members, council members, officers, employees and agents, and any additional
parties designated by Agency, as additional insureds (except to the extent
Agency is the loss payee or a Lenders Loss Payable endorsee).
(iii) Redeveloper shall not use the Property in any manner, even if the use is
for the purposes permitted herein, that will result in the cancellation of any
insurance required under this Lease. Redeveloper further agrees not to keep on
the Property or permit to be kept, used, or sold thereon, anything prohibited by
any fire or other insurance policy covering the Property.
(iv) If Redeveloper shall fail to obtain any insurance required under this
Lease, Agency may, at its election, obtain such insurance and Redeveloper shall,
as additional rent, reimburse Agency for the cost thereof plus a handling charge
equal to Agency's costs in obtaining such insurance including but not limited to
staff salaries and overhead, within five (5) days following demand therefor. If
Redeveloper fails or refuses to maintain insurance as required hereunder, or
fails to provide the proof of insurance, or fails to reimburse Agency for all
costs of insurance including the handling charges, Agency shall have the right
to declare this Lease in default without further notice to Redeveloper, and
Agency shall be entitled to exercise all legal remedies for breach of this
Lease.
(v) All insurance required to be provided hereunder is in addition to, and not
in lieu of, the indemnity provisions of Sections 17(f) and 17(g) hereof. The
procuring of such required policies of insurance shall not be construed to limit
Redeveloper's liability hereunder, nor to fulfill the indemnification provisions
and requirements of this Lease.
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(vi) Redeveloper shall maintain the insurance described herein from and after
the earlier of (A) the close of escrow for the Convention Center Parcel or (B)
the date Redeveloper accepts possession of any Parcel, through and until the
expiration or sooner termination hereof.
(e) Waiver of Subrogation. Redeveloper and Agency each hereby release and
relieve each other and the City, and waive their entire right of recovery
against the other and the City for loss or damage arising out of or incident to
the perils insured against under Section 17(c), which perils occur in, on or
about the Property, whether due to the negligence of Agency, the City or
Redeveloper or their agents, employees, contractors and/or invitees. Redeveloper
shall, upon obtaining the policies of insurance required hereunder, give notice
to the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease and obtain the insurance carrier's
consent thereto.
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(f) Indemnity. Redeveloper shall indemnify, defend, protect, and hold harmless
Agency and the City (and Agency's and the City's members, employees, agents and
contractors) from and against any and all claims, losses, proceedings, damages,
causes of action, liability, costs and expenses (including reasonable attorneys'
fees), arising from or in connection with, or caused by (i) any act, omission or
negligence of Redeveloper or any sublessee of Redeveloper, or their respective
contractors, licensees, invitees, agents, servants or employees, wheresoever on
or adjacent to the Property the same may occur; (ii) any use of the Property, or
any accident, injury, death or damage to any person or property occurring in, on
or about the Property, or any part thereof, or from the conduct of Redeveloper's
business or from any activity, work or thing done, permitted or suffered by
Redeveloper or its sublessees, contractors, employees, or invitees, in or about
the Property (other than to the extent arising as a result of Agency's or the
City's sole active negligence or to the extent of any wilful misconduct of the
Agency or the City, but excluding any matter with respect to which Agency or
City has or enjoys the benefit of sovereign immunity); and (iii) any breach or
default in the performance of any obligations on Redeveloper's part to be
performed under the terms of this Lease, or arising from any negligence of
Redeveloper, or any such claim or any action or proceeding brought thereon; and
in case any action or proceeding be brought against Agency or the City (or
Agency's or the City's agents, members, employees, agents and contractors) by
reason of any such claim, Redeveloper upon notice from Agency shall defend the
same at Redeveloper's expense by counsel satisfactory to Agency. Redeveloper, as
a material part of the consideration to Agency, hereby assumes all risk of
damage to property or injury to persons in, upon or about the Property arising
from any cause other than Agency's gross negligence or intentional acts, and
Redeveloper hereby waives all claims in respect thereof against Agency. These
provisions are in addition to, and not in lieu of, the insurance required under
this Section 17.
Agency shall indemnify, defend, protect, and hold harmless Redeveloper from and
against any and all claims, losses, proceedings, damages, causes of action,
liability, costs and expenses (including attorneys' fees), arising from or in
connection with, or caused by (i) any matter arising prior to the Effective Date
(except when arising as a result of any inspection, investigation, entry or
other activity of Redeveloper on the Property), or (ii) any litigation arising
as the result of or in connection with a purported prior sale of the Property.
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(g) Exemption of Agency from Liability. Except as provided to the contrary in
Section 10(b) hereof, Redeveloper hereby assumes all risks and liabilities of a
landowner in the possession, use or operation of the Property. Redeveloper
hereby agrees that, Agency shall not be liable for injury to Redeveloper's
business or any loss of income therefrom or for damage to the goods, wares,
merchandise or other property of Redeveloper, Redeveloper's employees, invitees,
customers, contractors, workers, or any other person in or about the Property,
including any liability arising from the physical condition of the Property or
the presence of any hazardous or toxic materials or substances on the Property,
nor shall Agency be liable for injury to the person of Redeveloper,
Redeveloper's employees, agents or contractors, whether such damage or injury is
caused by or results from hazardous or toxic materials or substances, fire,
steam, electricity, gas, water, or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause, whether the said
damage or injury results from conditions arising upon the Property or from other
sources or places and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible to Redeveloper.
18. Condemnation.
(a) Definitions.
(i) "Condemnation" means (A) the exercise of any governmental power, whether by
legal proceedings or otherwise, by a Condemnor and (B) a voluntary sale or
transfer by Agency to any Condemnor, either under threat of condemnation or
while legal proceedings for condemnation are pending.
(ii) "Date of Taking" means the date the Condemnor has the right to possession
of the property being condemned.
(iii) "Award" means all compensation, sums, or anything of value awarded, paid,
or received on a total or partial condemnation.
(iv) "Condemnor" means any public or quasi-public authority, or private
corporation or individual, having the power of condemnation or eminent domain.
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(b) Rights and Obligations Governed by Lease. If during the Term there is any
taking of all or any part of the Property (including the Convention Center
Parcel) or any interest in this Lease by Condemnation, the rights and
obligations of the parties shall be determined pursuant to this Section. Each
party waives the provisions of California Code of Civil Procedure Section
1265.130 allowing either party to petition the Superior Court to terminate this
Lease in the event of a partial taking of the Property.
(c) Total Taking. If the Property is totally taken by Condemnation, this Lease
shall terminate on the Date of Taking. In the event of any such termination, any
Base Rent paid in advance shall be pro-rated through the date the Lease is
terminated.
(d) Partial Taking. If any portion less than all of the Property is taken by
Condemnation, this Lease shall remain in effect, except that Redeveloper can
elect to terminate this Lease if the portion of the Property not so taken cannot
be so repaired or reconstructed, taking into consideration the amount of the
award available for repair, so as to be suitable for Redeveloper's continued use
of the Property for the same use as the Property is being used immediately prior
to the taking and the remaining premises would not be economically feasibly
usable by Redeveloper. If Redeveloper elects to terminate this Lease,
Redeveloper must exercise its right to terminate by giving notice to Agency
within 90 days after the nature and the extent of the taking have been finally
determined. If Redeveloper elects to terminate this Lease, Redeveloper also
shall notify Agency of the date of termination, which date shall not be later
than 180 days after Redeveloper has notified Agency of its election to
terminate; except that this Lease shall terminate on the Date of Taking if the
Date of Taking falls on a date before the date of termination as designated by
Redeveloper. If Redeveloper does not terminate this Lease within the ninety-day
period, this Lease shall continue in full force and effect.
(e) Restoration of Property. If there is a partial taking of the Property and
this Lease remains in full force and effect and pursuant to Section 18(d),
Redeveloper shall accomplish all necessary restoration.
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(f) Temporary Taking. On any taking of the temporary use of all or any part or
parts of the Property for a period, or of any estate less than a fee, ending on
or before the expiration date of the Term, the Term shall not be reduced,
extended, or affected in any way, and Redeveloper shall be entitled to any Award
for the use or estate taken. If a result of the taking is to necessitate
expenditures for changes, repairs, alterations, modifications, or reconstruction
of the improvements, Redeveloper shall accomplish all necessary changes,
repairs, alterations, modifications, or reconstruction of the improvements at
Redeveloper's sole cost and expense in accordance with Section 11 hereof. If any
such taking is for a period extending beyond the expiration date of the Term,
the taking shall be treated under the foregoing provisions for total and partial
takings, depending upon whether the temporary taking is of all or only a part of
the Property.
(g) Effect on Rent. If any portion of the Property is taken by Condemnation and
this Lease remains in full force and effect, there shall be no effect on or
reduction of the Base Rent or other rent payable hereunder unless such
Condemnation materially affects Redeveloper's ability to conduct business from
the Property, in which case Base Rent shall be adjusted in a reasonable
proportion reflecting the impact on Redeveloper's business by such Condemnation.
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(h) Application of Award. Any award for any entire taking shall be apportioned
between Agency and Redeveloper as their interests may appear. In the event of a
partial taking, any part of the award attributable to improvements shall be
divided between the parties in the manner provided in Section 16(d)(ii) hereof,
and, in consideration of the abatement of rent, any part of the award
attributable to land shall be paid to Agency; provided, however, that nothing
contained herein shall be deemed to give Agency any interest in or require
Redeveloper to assign to Agency any award made to Redeveloper for the
unamortized value of any improvements or furniture, fixtures, or equipment or
other personal property on the Property constructed or provided by Redeveloper
at Redeveloper's sole cost and expense in accordance with this Lease (amortized
on a straight line basis over the period in which the cost of such improvements
or furniture, fixtures or equipment or personal property are credited to Base
Rent), taking of personal property and fixtures belonging to Redeveloper and
removable by Redeveloper at the expiration of the Term hereof (except to the
extent Redeveloper has received a rent credit therefor), as provided hereunder,
or for the interruption of, or damage to, Redeveloper's business or for
relocation expenses recoverable against the condemning authority, or in the
event of a partial taking, the cost of restoring the Property to a usable
condition. Anything herein to the contrary notwithstanding, in the event of a
termination of the Lease by reason of any such taking, Agency shall be relieved
of any obligation to repay to Redeveloper the initial purchase price of the
Convention Center Parcel, it being understood and agreed by the parties that
Redeveloper's rights shall be limited to the allocation of the award or
settlement in lieu thereof.
(i) Waiver of Right to Take By Eminent Domain. Agency hereby waives its right to
acquire the Property or any material part thereof by exercise of the power of
eminent domain, for the five year period from and after the Effective Date, and
any time after the opening of the Card Club for business.
19. Assignment, Subletting and Encumbering.
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(a) Prohibition Against Voluntary Assignment, Subletting, and
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Encumbering. Except as provided in this Section to the contrary, Redeveloper
shall not, without Agency's prior written consent, voluntarily assign or
encumber Redeveloper's interest in this Lease or in the Leasehold Parcels, or
sublease substantially all or any part of the Leasehold Parcels, or allow any
other person or entity (except Redeveloper's authorized representatives) to
occupy or use all or any part of the Property. For the purposes hereof, an
"encumbrance" shall mean mortgage, deed of trust, land sale contract, lease or
other financing device. Any attempted assignment, encumbrance, or sublease shall
be voidable by Agency and, at Agency's election, shall constitute a default
hereunder. No consent to any assignment, encumbrance, or sublease shall
constitute a further waiver of the provisions of this Section. Any sale or
transfer of the Convention Center Parcel other than as permitted hereunder shall
void the Agency's obligation to repurchase the Convention Center Parcel upon
termination of the Lease but not its right to do so at its option.
(b) Special Exceptions. Anything in Section 19(a) to the contrary
notwithstanding, Agency hereby acknowledges that:
(i) Redeveloper intends, immediately upon the commencement of the Term of the
Lease, to convey the Convention Center Parcel and assign this Lease to Hollywood
Park, Inc., and Hollywood Park, Inc., intends to let the operation of the Card
Club to Compton Entertainment Inc., or a third party. Subject to Hollywood Park,
Inc., assuming all obligations under this Lease, Agency hereby consents to said
conveyance and assignment of this Lease and agrees that the original Redeveloper
shall thereupon be relieved of all obligations hereunder other than those
obligations which accrued prior to the date of the assignment, and other than
those obligations specifically not assumed by Hollywood Park, Inc.
(ii) At such time as Hollywood Park, Inc. qualifies to hold a gaming license, it
intends to convey the Convention Center Parcel and assign this Lease to a joint
venture composed of itself and CEI, and CEI intends to assign its rights under
the lease of the Card Club and the City of Xxxxxxx Gaming License to said joint
venture. Provided that Hollywood Park, Inc., then holds a majority in interest
in equity ownership and managerial control of the joint venture, Agency hereby
consents to said conveyance and assignments.
(iii) Nothing herein shall be deemed to waive Agency's rights under
Section 19(a) with respect to any other or additional assignments or
sublettings, whether of a similar or dissimilar nature.
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(iv) The Agency shall not unreasonably withhold its consent to a sublease of the
Hotel. No consent by the Agency to any sublease or assignment shall operate to
release the Redeveloper or any assignee from any of obligations hereunder
undertaken by Redeveloper or assumed by such assignee, except as provided in
Section to the contrary.
(c) Right to Sublease Restaurant, Bar, Night Club, and Parking Area.
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Notwithstanding the provisions of Section 19(a) hereof, Redeveloper shall have
the right, without Agency's consent, to lease or sublease discrete portions of
the Property, such as a restaurant, bar, nightclub, and parking areas, to an
operator, provided that Redeveloper shall provide to Agency thirty (30) days
prior written notice of the name of the sublessee and the name of the operator
of the restaurant, bar or nightclub.
Redeveloper shall not sublease or otherwise assign this DDA or the right to
operate the Card Club area to any person or entity that has not qualified under
Municipal Code 9-10 with respect to obtaining a license to operate a card club.
(d) Corporate Reorganization. Any dissolution, merger, consolidation, or other
reorganization of Redeveloper, or the sale or other transfer of a controlling
percentage of the capital stock of Redeveloper, shall be deemed a voluntary
assignment hereof. The phase "controlling percentage" means the ownership of, or
the right to vote, stock possessing 50% or more of the total combined voting
power of all classes of Redeveloper's capital stock issued, outstanding, and
entitled to vote for the election of directors. As to any issuance or transfer
of shares whatsoever, Redeveloper shall promptly notify the Agency of (i) the
number of shares issued or transferred, (ii) the name of the recipient or
transferee of such shares, and (iii) the number of all shares of Redeveloper
then issued and outstanding, and the percentage of all shares so transferred or
changed. In the event a corporation whose stock is publicly traded shall become
a successor in interest to Redeveloper, then this preceding sentence shall apply
only to a transfer of 5% more of the voting securities of such corporation. If
Redeveloper changes to a partnership, the foregoing provisions shall similarly
apply to partnership interests so transferred or created.
(e) Encumbrance or Assignment as Security.
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(i) Notwithstanding any other provision contained in this Lease, Redeveloper
shall have the right to encumber or assign Redeveloper's interest in the
Convention Center Parcel and in this Lease to any bank, savings and loan,
insurance company, or other institutional lender for the purpose of financing
the construction of the Initial Improvements or for purposes of expansion on the
Property and for the purpose of providing a take-out loan (in a principal amount
not to exceed the actual total cost of constructing such Initial Improvements or
of constructing the expansion facilities), provided only that upon execution of
such encumbrance (or any amendment, supplement or modification thereto) a true
copy of such instrument and the obligation secured thereby be promptly delivered
to Agency together with a written notice of the name and mailing address of the
lender, the date and place of recording or filing of record thereof and
recorder's instrument number, book and page reference or other recorder's index
reference. Until such true copies and notice are delivered to Agency any such
instrument shall have no force or effect whatsoever on the enforcement by Agency
of any provisions of this Lease or any rights or remedies hereunder. During the
existence of a permitted encumbrance and following delivery thereof there shall
be no cancellation, surrender, acceptance of surrender or modification of this
Lease except (i) by a written instrument executed by Agency, Redeveloper and the
lender, (ii) by reason of Redeveloper's exercise of the option provided for in
Section 30 hereof, or (iii) default under the Lease that is not timely cured by
Redeveloper or the lender. Lessor's interest in this Lease shall at all times
remain senior and superior to the lien of any deed of trust or mortgage securing
any such loan, and any such deed of trust or mortgage shall be subject to
Agency's right to reacquire the Convention Center Parcel upon termination of the
Lease, as hereinbefore provided.
(ii) All financing described in the preceding paragraph shall provide that
Agency shall have the right but not the obligation to assume Redeveloper's
financing for any improvement of the Property. Redeveloper shall cause the
lender to execute all documentation necessary to facilitate this right. Agency's
exercise of this right shall not constitute a waiver of any other right Agency
may have against Redeveloper.
20. Default.
(a) Redeveloper's Default. The occurrence of any of the following shall
constitute a default by Redeveloper:
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(i) Failure to pay rent or any other payment required to be made by Redeveloper
hereunder as and when due and the continuation of such failure to pay rent for
ten (10) days after delivery by Agency to Redeveloper of written of such failure
(in which event a Notice to Pay Rent or Quit provided in accordance with Code of
Civil Procedure Section 1161 (or any successor statute) shall constitute the
notice required for this purpose).
(ii) Failure to pay any Taxes which Redeveloper is obligated to pay, other than
possessory interest taxes to be paid by Agency pursuant to Section 8(a) hereof,
on a timely basis, or the failure to provide any insurance required hereunder,
and the continuation of such failure for ten (10) days after delivery by Agency
of written of such failure to Redeveloper (in which event a notice provided in
accordance with Code of Civil Procedure Section 1161 (or any successor statute)
shall constitute the notice required for this purpose).
(iii) Abandonment or surrender of the Property or the leasehold estate by
Redeveloper.
(iv) Cessation in a material fashion of either the Hotel or Card Club business
for thirty (30) consecutive days. As used herein, cessation of operation of the
Hotel shall mean the failure to operate the main floor and at least one floor of
guest rooms, including service to said rooms. Said thirty (30) day period shall
be subject to Section 32 hereof and shall not include any reasonably necessary
periods of closure for repair or remodeling.
(v) Failure to comply timely with the obligations set forth in the Schedule of
Performance attached hereto as Exhibit 3, and the continuation of such failure
or the failure to commence performance and diligently pursue the same to
completion for thirty (30) days after receipt of written notice thereof from
Agency.
(vi) Failure to perform any other covenant or provision of this Lease, if the
failure to perform is not cured within thirty (30) days after written notice. If
the failure to perform cannot reasonably be cured within thirty (30) days,
Redeveloper shall not be in default of this Lease if Redeveloper commences to
cure the failure to perform within the thirty (30) day period and thereafter
diligently and in good faith prosecutes the cure to completion.
(vii) The subjection of any right or interest to attachment, execution, or other
levy, or to seizure under legal process, if not released within ninety (90) days
after such levy.
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(viii) An assignment by Redeveloper for the benefit of creditors or the filing
of a voluntary or involuntary petition by or against Redeveloper under any law
for the purpose of adjudicating Redeveloper a bankrupt; or for extending time
for payment, adjustment, or satisfaction of Redeveloper's liabilities; or for
reorganization, dissolution, or arrangement on account of or to prevent
bankruptcy or insolvency; unless the assignment or proceeding, and all
consequent orders, adjudications, custodies, and supervisions are dismissed,
vacated, or otherwise permanently stayed or terminated within ninety (90) days
after the assignment, filing, or other initial event.
(ix) The appointment of a receiver, unless such receivership is terminated
within ninety (90) days after the appointment of the receiver, to take
possession of Redeveloper's interest in the Property or of Redeveloper's
interest in the leasehold estate or of Redeveloper's operations on the Property
for any reason, including but not limited to, assignment for benefit of
creditors or voluntary or involuntary bankruptcy proceedings, but not including
receivership (A) pursuant to a permitted first leasehold encumbrance, or (B)
instituted by Agency, the event of default being not the appointment of a
receiver at Agency's instance but the event justifying the receivership, or (C)
commenced pursuant to any license dispute.
(x) Failure to pay when due any license fee for the Card Club License as
required by Section 9-10 of the Compton Municipal Code, or any additional sums
set forth in the City's Resolution No. 17,087, as amended, and the continuation
of such failure to pay such fee or sums for ten (10) days after delivery by the
City of Xxxxxxx or Agency to Redeveloper of written notice of such failure.
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(xi) Termination, annulment, cancellation, revocation, repeal, or rescission of
any of Redeveloper's licenses or permits to operate a Card Club from the
Project, or any other failure of Redeveloper to keep in full force and effect
any license or permit required to operate the Card Club from the Project, and
the expiration of all appeals thereof or the expiration of the time period for
applying for an appeal or other procedure to reinstate the license or permit
pursuant to the terms of any applicable ordinances, statutes, or regulations and
the entry of a fraud judgment, supporting such termination, punishment,
cancellation, revocation, etc., of such licenses if judicially reviewed;
provided, however, notwithstanding the foregoing, if the reason for the
termination, annulment, cancellation, revocation, repeal, or rescission is
Redeveloper's failure to pay any fees to the City of Xxxxxxx or the State of
California as and when due, then Redeveloper shall be in default hereunder if
such fees are not paid within sixty (60) days after their due date. Anything
herein to the contrary notwithstanding, in this event that the then Redeveloper
is not also the operator of the Card Club, the Redeveloper shall have ninety
(90) days within which to substitute an approved operator for the Card Club,
provided that the Agency shall extend such period for a reasonable time upon a
creditable showing that the reason for delay is a matter not within the control
of Redeveloper or its successor in interest.
(b) Security for Performance of Redeveloper's Duties. As additional collateral
security for Redeveloper's performance of its obligations under this Lease,
Redeveloper shall execute and deliver to Agency:
(i) As provided in Section 1(d)(iii) hereof, a first deed of trust and fixture
filing encumbering the Convention Center Parcel, all improvements thereon, and
all rights attendant thereto.
(ii) A security agreement and a Financing Statement (UCC 1) covering all
furniture, fixtures and equipment and other personal property installed on or
used in connection with the Convention Center Parcel and any and all
replacements therefor or additions thereto.
(iii) A security agreement and a Financing Statement (UCC 1) covering all
furniture, fixtures and equipment and other personal property installed on or
used in connection with the Leasehold Parcels and any and all replacements
therefor or additions thereto.
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Redeveloper, or its successors in interest, shall, at the request of Agency,
execute any additional financing statements or continuation statements required
to perfect and maintain the lien of such security agreements on the personalty
so encumbered, including any replacements therefor or additions thereto, whether
or not the filing period for any such continuation statement may have expired.
(c) Remedies.
(i) Cumulative Nature of Remedies. If any default by Redeveloper shall continue
uncured, following notice of default as required by this Lease, for the period,
if any, applicable to the default under the applicable provision of this Lease,
Agency shall have the remedies described in this subsection (c) in addition to
all other rights and remedies provided by the security instruments referred to
in subsection (b) above or otherwise provided by law or equity, to which Agency
may resort cumulatively or in the alternative.
(ii) Termination for Breach. Agency may at Agency's election terminate this
Lease for breach by giving Redeveloper written notice of termination. In the
event Agency terminates this Lease, Agency may recover possession of the
Property (which Redeveloper shall surrender and vacate upon demand) and remove
all persons and property therefrom, and Agency shall be entitled to recover as
damages all of the following:
(A) The worth at the time of the award of any unpaid rent or other charges which
have been earned at the time of termination;
(B) The worth at the time of the award of the amount by which the unpaid rent
and other charges which would have been earned after termination until the time
of the award exceeds the amount of the loss of such rental or other charges that
Redeveloper proves could have been reasonably avoided;
(C) The worth at the time of the award of the amount by which the unpaid rent
and other charges for the balance of the term after the time of the award
exceeds the amount of the loss of such rental and other charges that Redeveloper
proves could have been reasonably avoided; and
(D) Any other amount necessary to compensate Agency for the detriment
proximately caused by Redeveloper's failure to perform its obligations under
this Lease or which in the ordinary course of things would be likely to result
therefrom.
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As used in subsections (A) and (B) above, the "worth at the time of the award"
shall be computed by allowing interest at the rate of 10 percent per annum. As
used in subsection (C) above, the "worth at the time of the award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of the award, plus one percent.
(iii) Continuation of the Lease. Even though Redeveloper has breached this Lease
and abandoned the Property, at Agency's option this Lease shall continue in
effect for so long as Agency does not terminate Redeveloper's right to
possession, and Agency may enforce all of its rights and remedies hereunder,
including the right to recover rent as it comes due under this Lease, and in
such event Agency will permit Redeveloper to sublet the Property or to assign
its interest in the Lease, or both, with the consent of Agency,which consent
will not unreasonably be withheld provided the proposed assignee or sublessee is
reasonably satisfactory to Agency as to credit and reputation and will occupy
the Property for the same purposes specified herein. For purposes of this
subsection, the following shall not constitute a termination of Redeveloper's
right to possession: (i) acts of maintenance or preservation or efforts to relet
the Property; or (ii) the appointment of a receiver under the initiative of
Agency to protect Agency's interest under this Lease.
(iv) Use of Redeveloper's Personal Property. In the event of termination of the
Lease for breach, Agency may at Agency's election use Redeveloper's personal
property and trade fixtures located on, about or appurtenant to the Property or
any of such property and fixtures without compensation and without liability for
use or damage, or store them for the account and at the cost of Redeveloper. The
election of one remedy for any one item shall not foreclose an election of any
other remedy for another item or for the same item at a later time.
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(v) Assignment of Subrents. Redeveloper assigns to Agency all subrents and other
sums falling due from tenants, subtenants, licensees, and concessionaires
(herein collectively called "subtenants") during any period in which Agency has
the right under this Lease, whether exercised or not, to reenter the Property
for Redeveloper's default, and Redeveloper shall not have any right to such sums
during that period. This assignment is subject and subordinate to any and all
assignments of the same subrents and other sums to the lender under a permitted
first leasehold encumbrance. Agency may at Agency's election upon the breach
hereof by Redeveloper reenter the Property with or without process of law,
without terminating this Lease, and either or both collect these sums or bring
action for the recovery of the sums directly from such obligors. Agency shall
receive and collect all subrents and proceeds from reletting, applying them:
first, to the payment of reasonable expenses (including attorneys' fees or
brokers' commissions or both) paid or incurred by or on behalf of Agency in
recovering possession, placing the Property in good condition, and preparing or
altering the Property for reletting; second, to the reasonable expense of
securing new tenants or subtenants; third, to the fulfillment of Redeveloper's
covenants to the end of the Term; and fourth, to Agency's uses and purposes.
Redeveloper shall nevertheless pay to Agency on the due dates specified in this
Lease the equivalent of all sums required of Redeveloper under this Lease, plus
Agency's expenses, less the proceeds of the sums assigned and actually collected
under this provision.
(d) Late Charge. Redeveloper hereby acknowledges that late payment by
Redeveloper to Agency of rent and other charges due under this Lease will cause
Agency to incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. Such costs include, but are not
limited to processing and accounting charges, and late charges which may be
imposed on Agency by the terms of any mortgage or trust deed covering the
Property, or bond issues of Agency. Accordingly, if any installment of rent or
any other charge due from Redeveloper is not received by Agency or Agency's
designee within ten (10) days after such amount shall be due, then, at Agency's
election and upon Agency's demand, Redeveloper shall pay to Agency a late charge
equal to five percent (5%) of such overdue amount. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Agency
will incur by reason of the late payment by Redeveloper. No late charge may be
imposed more than once for the same late rental payment. Acceptance of such late
charge by Agency shall in no event constitute a waiver of Redeveloper's default
with respect to such overdue amount, nor prevent Agency from exercising any
other rights and remedies granted to it hereunder.
(e) Lender's Right to Cure Defaults.
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(i) Notice of Default. Concurrently with giving notice of default to Redeveloper
under Section 20(a), above, Agency shall deliver a copy of such notice of
default to the lender under a permitted encumbrance at its address as furnished
to Agency in accordance with Section 19(e).
(ii) Lender's Right to Cure. During the continuance in effect of a permitted
encumbrance, Agency will not terminate this Lease because of any default on the
part of Redeveloper if the lender, within 30 days after Agency has sent a
written notice pursuant to Section 20(a):
(A) Cures such default, if the default can be cured by the payment of money, or,
if the default is not curable by the payment of money, commences or causes the
trustee under the encumbrance to commence, and thereafter diligently pursues to
completion proceedings to foreclose the encumbrance; and
(B) Keeps and performs all of the covenants and conditions of this Lease
requiring the payment or expenditure of money by Redeveloper until such time as
Redeveloper's leasehold interest is sold upon foreclosure pursuant to the
encumbrance, or transferred by an assignment in lieu of foreclosure.
(iii) Transfer by Lender. Notwithstanding the provisions of Section 19(a) hereof
restricting assignment of this Lease, this Lease may be assigned to the lender
by judicial or non-judicial foreclosure or by assignment in lieu of foreclosure
(without, however, releasing Redeveloper from any of its obligations hereunder)
without further consent of Agency or any assumption agreement by the lender, the
liability of the lender being limited to the period of its possession or
ownership of this Lease. No other or further assignment shall be made except in
accordance with the provisions of Section 19(a) of this Lease.
(f) Waiver of Rights. Redeveloper hereby waives any right of redemption or
relief from forfeiture under California Code of Civil Procedure Sections 1174 or
1179, or under any other present or future law, in the event Redeveloper is
evicted or Agency takes possession of the Property by reason of any default by
Redeveloper hereunder.
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(g) Agency's Default. Agency shall not be deemed to be in default in the
performance of any obligation required to be performed by it hereunder unless
and until it has failed to perform such obligation within ninety (90) days after
written notice by Redeveloper to Agency specifying wherein Agency has failed to
perform such obligation; provided, however, that if the nature of Agency's
obligation is such that more than ninety (90) days are required for its
performance, then Agency shall not be deemed to be in default if it shall
commence such performance within such ninety (90) day period and thereafter
diligently and in good faith prosecute the cure to completion.
21. Agency's Entry on Property. Agency and its authorized representatives shall
have the right to enter the Property at all reasonable times upon reasonable
notice to Redeveloper for any of the following purposes:
(a) To determine whether the Property is in good condition and whether
Redeveloper is complying with its obligations under this Lease;
(b) To do any necessary maintenance and to make any restoration to the Property
that Agency has the right to perform;
(c) To serve, post, or keep posted any legal notices required or allowed under
the provisions of this Lease;
(d) During the last two years of the Term hereof, to show the Property to
prospective brokers, agents, buyers, lenders, or persons interested in an
exchange, at any time during the Term.
Agency shall not be liable in any manner for any inconvenience, disturbance,
loss of business, nuisance, or other damage arising out of Agency's entry on the
Property as provided in this Section, except damage resulting from the acts or
omissions of Agency or its authorized representatives. Redeveloper shall not be
entitled to an abatement or reduction of rent if Agency exercises any rights
reserved in this Section. Agency shall conduct its activities on the Property as
allowed in this Section in a manner that reasonably attempts to minimize any
inconvenience, annoyance, or disturbance to Redeveloper's construction or
business operations.
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22. Notices. Any notice, demand, request, consent, approval or communication
that either party desires or is required to give to the other party shall be in
writing and shall be given to the addresses set forth below, and shall be deemed
delivered three days after deposit into the United States mail, postage prepaid,
by registered or certified mail, return receipt requested. Unless notice of a
different address has been given in accordance with this Section, all such
notices shall be addressed as follows:
If to Agency, to: Community Redevelopment Agency of the City of
Xxxxxxx
000 Xxxxx Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Executive Director
With a copy to: Xxxxxxxx, Xxxxxx & Xxxxxxx
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
If to Redeveloper, to: Compton Entertainment, Inc.
00000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: President
With a copy to: Xxxxxxxx, Xxxxxxxxxx & Xxxxx
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
23. Interest on Past-due Obligations. Any amount due to Agency which not paid
when due shall bear interest at the maximum rate then allowable to be charged by
non-exempt lenders under the usury and other applicable laws of the State of
California from the date due until paid. Payment of such interest shall not
excuse or cure any default by Redeveloper under this Lease.
24. Attorneys' Fees.
(a) If either party becomes a party to any litigation concerning this Lease or
the Property, by reason of any act or omission of the other party or its
authorized representatives, the other party shall be liable to such party for
such party's actual attorney's fees and court costs incurred by it in the
litigation. In the event of any litigation is undertaken against Agency
concerning the validity of this DDA, Redeveloper shall indemnify, defend, and
hold harmless Agency for all costs and expenses incurred by Agency on account of
such litigation. Such defense shall be undertaken by legal counsel mutually
selected by Agency and Redeveloper. Provided, however,
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if Agency shall become a defendant to any lawsuit concerning the validity of
this DDA, and Redeveloper informs Agency that it does not wish to indemnify,
hold harmless and defend Agency, then Agency may immediately cancel and
terminate this DDA without any liability to Redeveloper whatsoever, and
Redeveloper shall be relieved of all liability hereunder other than liability
for matters (other than the defense of such litigation) which arose prior to
such termination.
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(b) If either party commences an action against the other party arising out of
or in connection with this Lease, the prevailing party shall be entitled to have
and recover from the losing party reasonable attorneys' fees and costs of suit.
25. Estoppel Certificates. At any time and from time to time, within thirty (30)
days after notice of request by either party, the other party shall execute,
acknowledge, and deliver to the requesting party, or to such other recipient as
the notice shall direct, a statement certifying that this Lease is unmodified
and in full force and effect; or, if there have been modifications, that it is
in full force and effect as modified in the manner specified in the statement
and acknowledging that there are no uncured defaults or failures to perform any
covenant or provision of this Lease on the part of the requesting party or
specifying any such defaults or failures which are claimed to exist. The
statement shall also state the dates to which the rent and any other charges
have been paid in advance. The statement shall be such that it can be relied on
by any auditor, creditor, commercial banker, and investment banker of either
party and by any prospective purchaser or the lender of the Property or all or
any part or parts of Redeveloper's or Agency's interests under this Lease.
Either party's failure to execute, acknowledge, and deliver, on request, the
certified statement described above within the specified time shall constitute a
breach of this Lease.
26. Surrender of Property. At the expiration or earlier termination of the Term
(other than by reason of the exercise of the option set forth in Section 30
hereof), Redeveloper shall surrender to Agency the possession of the Property.
Surrender or removal of improvements, fixtures and trade fixtures shall be as
directed in the provisions of this Lease on ownership of improvements, fixtures
and trade fixtures at expiration or termination. Except as provided in Section
25 hereof to the contrary, Redeveloper shall leave the surrendered property and
any other property in good and broom clean condition. All personal property that
Redeveloper is not required to surrender but that Redeveloper does abandon
shall, at Agency's election, become Agency's property at the expiration or the
sooner termination of this Lease.
27. Form of Nondiscrimination and Nonsegregation Clauses; Local
----------------------------------------------------------------
HIRING AND AFFIRMATIVE ACTION.
------------------------------
(a) Redeveloper shall refrain from restricting the rental, sale or lease of the
Property, or any portion thereof, on the basis of sex, age, handicap, marital
status, race, color, religion, creed, ancestry or national origin of any person.
All deeds, leases or contracts of sale shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
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1. In deeds: "The grantee herein covenants by and for himself, his heirs,
executors, administrators and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of, any
person or group of persons on account of sex, marital status, race, age,
handicaps color, religion, creed, national origin or ancestry in the sale,
lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land
herein conveyed, nor shall the grantee himself or any person claiming under or
through him, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the
land herein conveyed. The foregoing covenants shall run with the land."
2. In leases: "The lessee herein covenants by and for himself, his heirs,
executors, administrators and assigns, and all persons claiming under or through
him, and this lease is made and accepted upon and subject to the following
conditions:
"That there shall be no discrimination against or segregation of any person or
group of persons on account of sex, marital status, race, age, handicap, color,
religion, creed, national origin or ancestry, in the leasing, subleasing,
transferring, use, or enjoyment of the land herein leased, nor shall the lessee
himself, or any person claiming under or through him, establish or permit any
such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy, of tenants, lessees,
sublessees, subtenants or vendees in the land herein leased."
3. In contracts relating to the sale or transfer of the Property or any interest
therein: "There shall be no discrimination against or segregation of any person
or group of persons on account of sex, marital status, race, age, handicap,
color, religion, creed, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall
the transferee himself or any person claiming under or through him, establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy, of tenants,
lessees, subtenants, sublessees or vendees of the land."
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(b) Redeveloper further understands and agrees that in fulfillment of the
provisions of this DDA, including this Lease, and in complying with the request
of the Agency and the City Council of the City, that the creation of new jobs
from this Project shall be filled with residents of the City of Xxxxxxx who have
lived in the City of Xxxxxxx for more than one year, to the extent that it is
practical and reasonable. Redeveloper shall make every reasonable effort to
fulfill the provisions of this DDA, including the Lease, by complying with
Ordinance No. 1667 of the City of Xxxxxxx, relating to an Affirmative Action
Program. Redeveloper shall work with local institutions to establish training
programs to assist in ensuring a qualified local applicant base is established
for all levels of employment at the Hotel, the Entertainment Center, and any
related enterprises. Further, preferences shall be given to local residents when
such residents demonstrate equal capability relative to other applicants for the
same job. The covenants and agreements set forth in this subsection (b) shall
survive the expiration or termination of this Lease after acquisition of title
to the Property by Redeveloper, whether by exercise of the Option to purchase or
otherwise.
28. Local Contractors. Redeveloper shall make commercially reasonable efforts to
allocate the work associated with the construction of the Initial Improvements
in a manner which provides local contractors with an opportunity to participate
in such work. Contracts for the Initial Improvements shall be let on the basis
of price, quality of service and reputation. Further, preferences shall be give
to local contractors and minority owned businesses when such contractors
demonstrate equal capability and bondability relative to other contractors for
the scope of work to be performed.
29. Expansion Parcels.
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(a) Subject to the provisions of Section 29(b), during the first fifteen (15)
years Lease Years of the Term, Agency shall have the full right to use the
Expansion Parcels, without payment of consideration to Redeveloper. Any such use
shall be of a type which shall not disturb Redeveloper's quiet enjoyment of the
balance of the Property or otherwise adversely affect the use thereof. Agency
shall retain all rentals and other revenues payable on account of the Expansion
Parcels. Provided, however, that Redeveloper shall have the right, upon ninety
(90) days notice in writing to Agency, to terminate Agency's use of the
Expansion Parcels. Redeveloper shall terminate Agency's use of the Expansion
Parcels only upon delivery to Agency of plans and specifications and financing
commitments, as described in Section 11 hereof, for a new card club or casino or
other use permitted by the Agency on the Expansion Parcels, together with
reasonable evidence satisfactory to Agency that Redeveloper shall open the new
card club or casino or other use permitted by the Agency for business within
nine (9) months after the termination date of Agency's right to use the
Expansion Parcels.
(b) If Redeveloper does not open the new card club or casino or other use
permitted by the Agency for business on the Expansion Parcels or another portion
of the Property in compliance with Section 9(g) hereof prior to the expiration
of the 15th Lease Year, and Agency receives a bona fide proposal, from a
reputable third party developer with the capacity to perform, which proposal
Agency wishes to accept, Agency shall give notice in writing thereof to
Redeveloper. Unless, within said ninety (90) day notice period, Redeveloper
irrevocably commits to either (i) open a new casino or card club or other
permitted use on the Expansion Parcels within one year thereafter, or (ii)
undertake the same type of development as has been proposed by the offeror or
one meeting or exceeding the benefit to the Agency of that of the offeror,
Agency shall have the right to proceed with the other transaction, and, upon the
closing thereof, all Redeveloper's rights in the Expansion Parcels shall
terminate and shall be of no further force or effect. In such event, the
purchase price set forth in the Option (described below), shall be reduced as
provided in Section 30(e) hereof, and the Base Rent shall be equitably reduced
(based upon the values established in the Agency's original appraisal for the
parcels comprising the Property), effective upon the closing of the transaction
between Agency and the third party developer. Any attempt by Redeveloper to
wrongfully interfere with the other transaction or the closing thereof, other
than by committing to the expansion as provided hereinabove, may, at the option
of Agency, be deemed default hereunder.
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30. Option to Purchase. Agency hereby grants to Redeveloper the option to
purchase the Leasehold Parcels, including all buildings, furniture, furnishings
and equipment and inventory of food, beverages and other supplies (the
"Option"), subject to the following terms and conditions:
(a) Subject to the provisions hereof, Redeveloper may deliver a written notice
of Redeveloper's election exercise the Option at any time during the Term
hereof. Escrow shall close on or before ninety (90) days after receipt by Agency
of Redeveloper's written notice of Redeveloper's election to exercise the
Option, and Agency shall deliver to Redeveloper marketable title to the
Leasehold Parcels free and clear of any encumbrances other than those (i) in
existence at the Effective Date, (ii) approved by Redeveloper pursuant to this
Lease, or (iii) created or incurred by Redeveloper; provided, however, the
Property shall be free and clear of all monetary liens in existence on the
Effective Date other than those created by Redeveloper (including, without
limitation, deeds of trust executed by the Redeveloper, its successors and
assigns, and mechanics liens resulting from work performed at the request of the
Redeveloper). Agency agrees that it will not voluntarily encumber title to the
Leasehold Parcels without Redeveloper's prior written consent. At the closing,
Agency shall deliver to Redeveloper a good and sufficient grant deed with
respect to the Leasehold Parcels.
(b) Redeveloper shall have no right to exercise the Option, notwithstanding any
provision in the grant of option to the contrary (i) at any time when
Redeveloper is in default hereunder and continuing until the default is cured,
or (ii) during the period of time commencing on the day after a monetary
obligation to Agency is due from Redeveloper and unpaid (without any necessity
for notice thereof to Redeveloper) and continuing until the obligation is paid,
or (iii) in the event that this Lease has been terminated for any reason, or
(iv) during any time Redeveloper's payment of license fees required by Section
9-10 of the Compton Municipal Code, or additional sums set forth in the City's
Resolution No. 17,087, as amended, is due and unpaid, or (v) during any time any
license or permit of Redeveloper or any subtenant or operator to operate a Card
Club from the Property is suspended and has not been reinstated, subject,
however, to the right of Redeveloper to replace an operator pursuant to Section
20(a)(xi) hereof.
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(c) All rights of Redeveloper under this Section shall terminate and be of no
further force or effect, if this Lease is terminated for any reason, or if any
license or permit from the City of Xxxxxxx or the State of California to operate
a Card Club from the Property is terminated, annulled, canceled, revoked,
repealed, or rescinded, or any other failure of Redeveloper or an operator
claiming under Redeveloper to keep in full force and effect any license or
permit required to operate the Card Club from the Project, and the expiration of
all appeals thereof or the expiration of the time period for applying for an
appeal or other procedure to reinstate the license or permit pursuant to the
terms of any applicable ordinances, statutes, or regulations; provided, however,
notwithstanding the foregoing, if the reason for the termination, annulment,
cancellation, revocation, repeal, or rescission is Redeveloper's failure to pay
any fees to the City of Xxxxxxx or the State of California as and when due, then
Redeveloper's rights under this Option shall terminate if such fees are not paid
within 60 days after their due date.
(d) The Option granted to Redeveloper in this Lease is personal to Redeveloper,
and may not be assigned voluntarily or involuntarily, or be exercised by any
person or entity other than Redeveloper or a permitted assignee of Redeveloper.
(e) Redeveloper shall have the right to elect to purchase only the Hotel Parcel
and the Parking Parcels at the time Redeveloper exercises the Option. In such
case,at the time Redeveloper exercises the Option, Redeveloper may elect either
(i) to terminate this Lease as to the Expansion Parcels, or (ii) continue this
Lease with respect to the Expansion Parcels. If Redeveloper elects to continue
this Lease with respect to the Expansion Parcels, then upon the close of escrow
for the Hotel Parcel and Parking Parcels, the Base Rent for the Expansion
Parcels shall be fifty-nine percent (59%) of the Base Rent set forth in Section
10, and there shall be a termination of any remaining Rent Reduction/Credit
pursuant to Section 10. Thereafter, the Redeveloper shall continue to have the
option to purchase the Expansion Parcels, subject to the provisions hereof.
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(f) (i) If Redeveloper purchases all the Leasehold Parcels at once, then the
purchase price of the Leasehold Parcels shall be the sum of $8,082,500.00,
increased at the rate of two percent (2%) per annum, simple interest, from the
Effective Date, and decreased in an amount equal to interest at the rate of five
percent (5%) per annum, simple interest, calculated on the purchase price of the
Convention Center Parcel from the Effective Date to the date of closing of the
purchase under the Option; provided, however, that the purchase price as so
adjusted shall not be greater than the fair market value of the Property but, in
no case, shall the ultimate purchase price be less than $8,082,500.00.
(ii) If Redeveloper purchases only the Hotel Parcel and the Parking Parcels
(whether due to the severing of the Expansion Parcel from this Lease due to the
provisions of Section , or Redeveloper's election to purchase only the Hotel
Parcel and Parking Parcels, as provided in Section ), then the purchase price of
the Hotel Parcel and the Parking Parcels shall be the sum of $3,350,000.00,
regardless of when purchased./1/
(iii) If upon acquisition of the Hotel Parcel and Parking Parcels Redeveloper
has elected to continue this Lease, and thereafter purchases the Expansion
Parcels, then the purchase price of the Expansion Parcels shall be calculated
pursuant to the following formula:
EPPP = 4,732,500 + (8,082,500 X .01 X (HPPD - ED)) + (4,732,500 X .02 X
(EPPD - HPPD))
utilizing the following definitions:
EPPP = Expansion Parcels Purchase Price HPPD = Hotel Parcel and Parking Parcels
Date of Purchase ED = Effective Date
EPPD = Expansion Parcels Date of Purchase
utilizing the number of years, and any fraction thereof, between the HPPD, the
ED, and the EPPD for the purpose of calculating the resulting factors. /1/ This
is due to the fact that the parties had agreed to a base price of the Hotel
Parcels and Parking Parcels in the sum of $3,350,000, increased at the rate of
2% per annum from the Effective Date, and reduced by the sum of the credit of 5%
of the $2,000,000 purchase price for the Convention Center Parcel. However, due
to the fact that such amount would result in a purchase price of less than
$3,350,000, the parties have agreed to fix the purchase price of the Hotel
Parcels and the Parking Parcels at $3,350,000.
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(g) The purchase price shall be paid in all cash through the close of escrow.
Agency will pay the cost of a CLTA policy of title insurance, any documentary
transfer tax, and one half of the escrow fees. Redeveloper will pay cost of
recording, the additional premium and any expenses (including survey costs) in
the event Redeveloper desires to obtain an extended coverage policy of title
insurance, and the other half of the escrow fees. In connection therewith, the
parties shall execute normal and necessary escrow instructions and all documents
reasonably called for thereunder, so long as such instructions and documents are
not inconsistent herewith.
31. Holding Over. If Redeveloper, with Agency's consent, remains in possession
of the Leasehold Parcels or any part thereof after the expiration or termination
of the Term of this Lease, such occupancy shall be a tenancy from month to month
upon all the provisions of this Lease pertaining to the obligations of
Redeveloper, except that the annual Base Rent shall be 150% of the annual Base
Rent set forth in Section 10, above (as, and if, adjusted pursuant hereto), and
shall be payable monthly, in advance, in installments equal to 1/12th of the
annual Base Rent so calculated.
32. Force Majeure; Extension of Times of Performance.
(a) Force Majeure. Except as otherwise provided in this Lease, delay in
performance by any party hereunder shall not be a default where delays or
defaults are due to war; insurrection; strikes; lock-outs; riots; floods;
earthquakes; fires; casualties; acts of God; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; shortages of
transportation; unusually severe weather; or any other causes (other than
financial inability) beyond the reasonable control or without the fault of the
party claiming an extension of time to perform. An extension of time for any
such cause shall only be for the period of the delay, which period shall
commence to run from the time of the commencement of the cause, if written
notice by the party claiming such extension is delivered to the other party
within ten (10) days after commencement of the cause, and shall otherwise
commence to run from the date of delivery of such notice.
(b) Extension of Time. If prior to a date which is three months after the
Effective Date, any lawsuit is filed by a third party against Agency on account
of the California Environmental Quality Act ("CEQA") or otherwise challenging
Agency's ability to enter into this transaction to lease the Property for the
purposes hereof, or against the City of Xxxxxxx on account of the card club
license in favor of Redeveloper, then, to the extent permitted by law, the time
periods provided herein shall be tolled until resolution of such lawsuits in
favor of Agency or City, as the case may be or until there has been
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compliance with CEQA, and the parties shall cooperate in the defense of such
action, with the costs of such defense being borne as hereinabove provided,
and/or shall take all steps necessary to comply with the requirements of CEQA.
33. Sale or Transfer by Agency. In the event of any transfer or transfers of
Agency's interest in the Property, other than a transfer for security purposes
only, the transferor shall automatically be relieved of any and all obligations
and liabilities on the part of the Agency accruing from and after the date of
such transfer; provided, however, that any funds in the hands of Agency in which
Redeveloper has an interest, at the time of such transfer, shall be turned over
to the transferee and upon such transfer, Agency shall be discharged from any
further liability with reference to such funds. The covenants and obligations of
Agency contained in this Lease shall be binding upon Agency, its successors and
assigns only during their respective periods of ownership. Any transferee must,
however, comply with the requirements of the Gaming Laws of the State of
California to the extent applicable.
34. Limitation on Recourse Against Agency. Redeveloper agrees to look solely to
Agency's interest in the Property and the real property of which it is a part
(or the proceeds thereof) for the satisfaction of any remedy of Redeveloper, for
the collection of a judgment (or other judicial process) requiring the payment
of money by Agency in the event of any default by Agency hereunder (other than
with respect to Agency's obligations pursuant to Section 10(b) hereof), and no
other property or assets of Agency shall be subject to levy, execution, or other
enforcement procedure for the satisfaction of Redeveloper's remedies under or
with respect to this Lease, the relationship of Agency and Redeveloper
hereunder, or Redeveloper's use or occupancy of the Property. Under no
circumstances shall Redeveloper have any recourse against any tax increment
revenues of Agency. Any obligations of Agency hereunder to deliver any funds to
Redeveloper shall not be secured by any lien upon or pledge of the Agency's tax
increment, and such obligations shall be subordinate and inferior to any and all
rights, including but not limited to a pledge of any such moneys, created by (A)
any bonded indebtedness now or hereafter created by the Agency, and (B) any loan
agreement, lease agreement, or other obligation or agreement now or hereafter
entered into by the Agency, or otherwise from time to time outstanding that is
secured by a pledge of tax increment.
35. Redeveloper's Representations and Warranties. Redeveloper makes the
following representations and warranties as of the date of this Lease and agrees
that such representations and warranties shall survive and continue thereafter:
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(a) Status. If Redeveloper is a corporation, it is duly organized, validly
existing, in good standing under the laws of the state of its incorporation, has
stock outstanding, which has been duly and validly issued, and is qualified to
do business and is in good standing in the State of California with full power
and authority to perform the obligations contemplated hereby. If Redeveloper is
a partnership, it is duly formed and validly existing and has all power and
authority to consummate the transactions contemplated hereby. If Redeveloper is
a limited liability company, it is duly formed and validly existing and has all
power and authority to perform the obligations contemplated hereby.
(b) Authority. Redeveloper has complied with all laws and regulations concerning
its organization, existence and transaction of business. Redeveloper has the
right and power to own and develop the Project and Initial Improvements thereon
as contemplated in this Lease.
(c) No Litigation. There is no litigation, action, suit, or other proceeding
pending or threatened against Redeveloper, the Property, or the Project which
may in any manner whatsoever substantially adversely affect the validity,
priority, or enforceability of this Lease or the construction, use, occupancy or
operation of the Project.
(d) Enforceability. Redeveloper has full right, power and authority to execute
and deliver this Lease and all instruments executed pursuant hereto, and to
perform the undertakings of Redeveloper contained in this Lease and all
agreements executed pursuant hereto. This Lease and all agreements executed
pursuant hereto constitute valid and binding obligations of Redeveloper which
are legally enforceable in accordance with their terms, subject to the laws of
bankruptcy, creditor's rights exceptions, and equity.
(e) No Breach. None of the undertakings of Redeveloper contained in this Lease
and all agreements executed pursuant hereto violates or any applicable statute,
law, regulation or ordinance or any order or ruling of any court or governmental
entity, or conflicts with, or constitutes a breach or default under, any
agreement by which Redeveloper is, or the Project and Improvements thereon are,
bound or regulated.
(f) Financial Information. All financial information delivered to Agency by
Redeveloper, including, without limit, information relating to Redeveloper, the
Property, the Project, and the Improvements thereon, fairly and accurately
represents such financial condition. No material adverse change in such
financial condition has occurred.
(g) Proceedings. To the best of Redeveloper's knowledge, Redeveloper is not in
violation of any statute, law,
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regulation or ordinance, or of any order of any court or governmental entity.
(h) Accuracy. To the best of Redeveloper's knowledge, all documents, reports,
instruments, papers, data, information and forms of evidence delivered to Agency
by Redeveloper with respect to this Lease and all agreements executed pursuant
hereto are accurate and correct, are complete insofar as completeness may be
necessary to give Agency true and accurate knowledge of the subject matter
thereof, and do not contain any material misrepresentation or omission. Agency
may rely on such reports, documents, instruments, papers, data, information and
forms of evidence without any investigation or inquiry.
(i) Taxes. To the best of Redeveloper's knowledge, Redeveloper has filed all
federal, state, county and municipal tax returns required to have been filed by
Redeveloper, and has paid all taxes which have become due pursuant to such
returns or to any notice of assessment received by Redeveloper. Redeveloper has
no knowledge of any basis for additional assessment with respect to such taxes.
36. Agency's Representations and Warranties. Agency makes the following
representations and warranties as of the date of this Lease and agrees that such
representations and warranties shall survive and continue thereafter:
(a) No Litigation. There is no litigation, action, suit, or other proceeding
pending or threatened against Agency, the Property, or the Project which may in
any manner whatsoever substantially adversely affect the validity, priority, or
enforceability of this Lease or the construction, use, occupancy or operation of
the Project.
(b) Enforceability. Agency has full right, power and authority to execute and
deliver this Lease and all instruments executed pursuant hereto, and to perform
the undertakings of Agency contained in this Lease and all agreements executed
pursuant hereto. This Lease and all agreements executed pursuant hereto
constitute valid and binding obligations of Agency which are legally enforceable
in accordance with their terms, subject to the laws of bankruptcy, creditor's
rights exceptions, and equity.
(c) No Breach. None of the undertakings of Agency contained in this Lease and
all agreements executed pursuant hereto violates or any applicable order or
ruling of any court or governmental entity, or conflicts with, or constitutes a
breach or default under, any agreement by which Agency is, or the Project and
Improvements thereon are, bound or regulated.
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(d) Entitlements. The proposed development and use of the Property is consistent
with City's General Plan and all applicable zoning and land use ordinances and
regulations.
37. Miscellaneous.
(a) Governing Law. This Lease shall be construed and interpreted in accordance
with the laws of the State of California.
(b) Time of Essence. Time is of the essence herein.
(c) Additional Rent. Any monetary obligations of Redeveloper to Agency under the
terms of this Lease shall be deemed to be rent.
(d) Quiet Enjoyment. Upon Redeveloper's paying the Base Rent and other sums
provided hereunder when due, and observing and performing all of the covenants,
conditions, and provisions on Redeveloper's part to be observed and performed
hereunder, Redeveloper shall enjoy the quiet possession of the Leasehold Parcels
for the entire term hereof, subject to all of the provisions of this Lease.
(e) Transfer of Agency's Interest. In the event of any transfer or transfers of
Agency's interest in the Property, the transferor shall be automatically
relieved of any and all obligations and liabilities on the part of Agency
accruing from and after the date of such transfer.
(f) Waiver. The waiver by Agency or Redeveloper of any breach by the other party
of any term, covenant, or condition herein contained shall not be deemed to be a
waiver of such term, covenant, or condition or any subsequent breach of the same
or any other term, covenant, or condition herein contained. The subsequent
acceptance of all or part of the rent due hereunder by Agency shall not be
deemed to be a waiver of any preceding breach by Redeveloper of any term,
covenant, or condition of this Lease, other than the failure to pay the
particular rent so accepted, regardless of Agency's knowledge of such preceding
breach at the time of acceptance of such rent. Acceptance by Agency of a part
payment of the rent due shall not be construed as a waiver by Agency of any
rights to collect the balance of the rent due.
(g) Brokers. Each party warrants to and for the benefit of the other that it has
had no dealings with any real estate broker or other agent (attorneys excepted)
in connection with the negotiation or making of this Lease. Agency shall
indemnify Redeveloper for breaches by Agency of this warranty,
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and Redeveloper shall indemnify Agency for any breaches by Redeveloper of this
warranty.
(h) Headings. The captions of the various sections of this Lease are for
convenience and ease of reference only and do not define, limit, augment, or
describe the scope, content, or intent of this Lease or of any part or parts of
this Lease.
(i) Inspection Of Books and Records. Agency shall have the right at all
reasonable times to inspect the books and records of Redeveloper relevant to the
purposes of this Lease.
(j) Merger. The voluntary or other surrender of this Lease by Redeveloper, or a
mutual cancellation thereof, or a termination by Agency, shall not work a
merger, but instead, at the option of Agency, shall either terminate all or any
existing subtenancies, or at the option of Agency, operate as an assignment to
Agency of any or all of such subtenancies.
(k) Gender; Number. The neuter gender includes the feminine and masculine, the
masculine includes the feminine and neuter, and the feminine includes the
masculine and neuter, and each includes corporations, partnerships and other
legal entities whenever the context so requires. The singular number includes
the plural whenever the context so requires.
(l) No Joint Venture. Nothing contained herein shall be construed to render the
Agency in any way or for any purpose a partner, joint venturer, or associated
in any relationship with Redeveloper other than that of Agency and Redeveloper,
nor shall this Lease be construed to authorize either party to act as agent for
the other.
(m) Exhibits. All exhibits to which reference is made in this Lease are hereby
incorporated by reference. Any reference to "this Lease" includes matters
incorporated by reference.
(n) Entire Agreement; Modification. This Lease contains the entire agreement
between the parties. No verbal agreement or implied covenant shall be held to
vary the provisions hereof, any statements, law or custom to the contrary
notwithstanding. No promise, representation, warranty, or covenant not included
in this Lease has been or is relied on by either party. Each party has relied on
its own inspection of the Property and examination of this Lease, the counsel of
its own advisors, and the warranties, representations, and covenants in this
Lease itself. The failure or refusal of either party to inspect the Property, to
read this Lease or other documents, or to obtain legal or other advice relevant
to this transaction constitutes a waiver of any objection, contention, or claim
that
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might have been based on such reading, inspection, or advice. No provision of
this Lease may be amended or varied except by an agreement in writing signed by
the parties hereto and the lender under a permitted first leasehold encumbrance
or their respective permitted successors.
(o) Joint and Several Obligations. "Party" shall mean Agency or Redeveloper; and
if more than one person is Agency or Redeveloper, the obligations imposed on
that party shall be joint and several.
(p) Severability. The invalidity or illegality of any provision shall not affect
the remainder of this Lease and all remaining provisions shall, notwithstanding
any such invalidity or illegality, continue in full force and effect.
(q) Consents of Agency. Neither Agency's execution of this Lease nor any consent
or approval given by Agency hereunder in its capacity as Agency shall waive,
abridge, impair or otherwise affect Agency's powers and duties as a governmental
body. Any requirements under this Lease that Redeveloper obtain consents or
approvals of Agency or the City are in addition to and not in lieu of any
requirements of law that Redeveloper obtain approvals, licenses, or permits.
(r) Records. Agency or any representative or designee thereof may at any time
during normal business hours, upon 48 hours' notice, examine the books and
records of Redeveloper, or any officer, employee, agent, contractor, affiliate,
related person, assignee or franchise, to the extent that such books and records
relate, directly or indirectly, to the operation and income of the Card Club
from the Property. Redeveloper shall keep all such records at the Property or at
another location in Los Angeles County approved by Agency.
(s) Recordation of Memorandum of Lease With Option to Purchase. This Lease shall
not be recorded. A memorandum of the Lease with Option to Purchase shall be
recorded. The parties shall execute the memorandum in form and substance
approved by Agency and as required by the title insurance company insuring
Redeveloper's leasehold estate, and sufficient to give constructive notice of
this Lease and the option to purchase set forth herein to subsequent purchasers
and lenders.
(t) Execution in Counterparts. This Lease, or the memorandum of this Lease, or
both, may be executed in two or more counterparts, each of which shall be an
original, but all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement at Compton,
California, as of the date first written above.
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COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF
XXXXXXX ("Agency")
By:__________________________________________
Chairman
ATTEST:
SECRETARY
COMPTON ENTERTAINMENT, INC., a California
corporation ("Redeveloper")
By:__________________________________________
XXXXXX XXXXXXXXX, President
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EXHIBIT 1
LEGAL DESCRIPTIONS
ENTIRE PROPERTY
---------------
Xxxxxxx 0, 0, 0, 0, xxx 00, xx Xxxxxx Map No. 7899, in the City of Xxxxxxx, per
map recorded in Book 79, Pages 47-49, of Parcel Maps, Official Records, Los
Angeles County, California.
Parcels 1 and 2 of Parcel Map No. 8669, in the City of Xxxxxxx, per map recorded
in Book 87, Page 9, of Parcel Maps, Official Records, Los Angeles County,
California.
Xxxxxxx 0, 0, 0, xxx 0 Xxxxxx Map No. 10784, in the City of Xxxxxxx, per map
recorded in Book 112, Pages 96 and 97, of Parcel Maps, Official Records, Los
Angeles County, California.
CONVENTION CENTER PARCEL/2/
---------------------------
Parcel 1 of Parcel Map No. 10784, in the City of Xxxxxxx, per map recorded in
Book 112, Pages 96 and 97, of Parcel Maps, Official Records, Los Angeles County,
California, reserving and excepting therefrom easements for access to, support
of and parking for the Hotel Parcel.
HOTEL PARCEL/1/
---------------
A parcel of air space which includes a nine (9) story hotel containing 290 guest
rooms and ancillary areas such as lobbies, restaurant, kitchen, bars, commercial
areas and the like, on Parcel 1 of Parcel Map No. 10784, in the City of Xxxxxxx,
per map recorded in Book 112, Pages 96 and 97, of Parcel Maps, Official Records,
Los Angeles County, California.
PARKING PARCELS
---------------
Parcels 2, 3, and 4 Parcel Map No. 10784, in the City of Xxxxxxx, per map
recorded in Book 112, Pages 96 and 97, of Parcel Maps, Official Records, Los
Angeles County, California.
EXPANSION PARCELS
-----------------
/2/ The legal descriptions of the Hotel Parcel and the Convention Center Parcel
are subject to change based upon legal descriptions prepared by a licensed civil
engineer and approved by Agency and Redeveloper prior to the close of escrow for
the Convention Center Parcel.
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Parcels 2, 7, 8, 9, and 11, of Parcel Map No. 7899, in the City of Xxxxxxx, per
map recorded in Book 79, Pages 47-49, of Parcel Maps, Official Records, Los
Angeles County, California.
Parcels 1 and 2 of Parcel Map No. 8669, in the City of Xxxxxxx, per map recorded
in Book 87, Page 9, of Parcel Maps, Official Records, Los Angeles County,
California.
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EXHIBIT 2
SITE PLAN
[to be inserted]
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EXHIBIT 3
SCHEDULE OF PERFORMANCE
1. Execution of the DDA by Agency and Within 15 days of Agency
Redeveloper approval
2. Amendment of Redeveloper's Card Club Within 60 days of Agency
License from the City of Xxxxxxx and approval
the City's adoption of an ordinance
to waive transient occupancy taxes and
valet taxes until the valet parking
operation at the Hotel is profitable
3. Redeveloper's Approval of Preliminary By May __, 1995
Title Report
4. Redeveloper's Approval of ALTA Survey By June 15, 1995
5. Redeveloper's approval of Physical By June 15, 1995
Condition of the Property
6. Recordation of Memorandum of Lease for On the close of escrow for the
the Project and issuance of leasehold Convention Center Parcel or
policy of title insurance July 31, 1995, whichever first
occurs (the "Effective Date")
7. Redeveloper's submission of Design Within 45 days after Agency's
Development Drawings execution of the DDA
8. Agency's approval or disapproval of Within 30 days after receipt of
Design Development Drawings same from Redeveloper
9. Redeveloper's delivery to Agency of Within 90 days after the
financing commitments for the Project Effective Date
10. Agency's approval of Redeveloper's Within 30 days from submittal
financing for the Project
11. Redeveloper's Submission of the Final Within 120 days after the
Construction Plans for Development Effective Date
of the Project (including construction
drawings) sufficient to obtain building
permits for the Initial Improvements
12. Agency's Approval of Final Construction 60 days after delivery of same
Plans (including construction drawings, to City and Agency, provided
and final grading and landscaping plans) they are acceptable to City
and Agency
13. Payment of fees and issuance of permits Within 30 days of approval of
for grading and site work, and plans
commencement of grading and site work
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14. Payment of fees and issuance of building Within 10 days after issuance
permits and commencement of construction of grading permit
of the Initial Improvements
15. Commencement of Construction of Within 10 days from approval of
remaining work any construction plans
16. Completion of Construction of the Initial Within 12 months after the
Improvements and rehabilitation of Hotel, Effective Date, subject to the
and opening of the Hotel for business length of any delays by the
Agency or City in approving
plans or specifications from
the time periods set forth
herein, and subject to Force
Majeure
17. Opening of the Card Club for business Within 30 days of issuance of
a state license
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EXHIBIT 4
CONDITIONS OF CONSTRUCTION
1. Submittal of Design Development Drawings and Preliminary Construction
-------------------------------------------------------------------------
Budgets. Redeveloper shall prepare and deliver to Agency Design Development
Drawings and a Preliminary Construction Budget for the proposed Initial
Improvements to the Property. Upon Agency's reasonable approval of both the
Design Development Drawings and the Preliminary Budget, Redeveloper shall have
the right to partition the work represented by the Design Drawings in a manner
which will promote the most expeditious construction and completion of the
Initial Improvements. Notwithstanding the foregoing Redeveloper shall not
commence construction as to any portion of the work until such time as Agency
has approved complete Final Construction Plans, or if applicable, Final Interior
Design Documents, and the Budget relative to the portion of work for which
Redeveloper desires to commence construction.
"Design Development Drawings" shall be prepared by a licensed architect or
engineer, and shall include, but not be limited to, preliminary grading and
drainage plans, soil tests, utilities, sewer and service connections, locations
of ingress and egress to and from public thoroughfares, curbs, gutters,
parkways, street lighting, designs and locations for outdoor signs, storage
areas, and landscaping. The Design Development Drawings shall be based upon the
Scope of Development, and shall enable Agency to make an informed judgment about
the design and quality of construction. They shall also include delineation of
landscape and architectural features, floor plans, sections and elevations, site
treatment, proposed building materials and proposed colors, and other features.
The Design Development Drawings shall describe all major design features, as
well as the size, character and quality of the Project as to architectural and
structural systems. Key details of the Project will be provided and samples of
key materials to be used in public visible areas shall accompany the drawings.
With the Design Development Drawings, Redeveloper shall deliver to Agency the
certificate of the person who prepared the plans and specifications certifying
that Agency has fully paid for them or waiving payment and waiving any right to
a lien for preparing them and permitting Agency to use the Design Development
Drawings without payment for purposes relevant to and consistent with this DDA.
"Final Interior Design Documents" are those Final Construction Plans relating to
the interior design of the Initial Improvements.
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2. Submittal of Final Construction Plans and Final Interior Design
-------------------------------------------------------------------
Documents. Prior to the commencement of construction of any portion of the
Initial Improvements, Redeveloper shall prepare complete Final Construction
Documents or, if applicable, Final Interior Design Documents, and submit such
documents to Agency for its approval. Upon receipt of approval from Agency,
Redeveloper may commence construction in a manner consistent with the approved
Final Construction Plans or Final Interior Design Documents.
3. Submittal of Construction Budgets. Upon obtaining bids relative to approved
Construction Documents or Interior Design Documents, Redeveloper shall submit to
Agency a "bid based" Construction Budget outlining specific costs associated
with the work to be performed pursuant to the approved Construction Documents or
Interior Design Documents. Agency shall have the right to review such bid based
budgets and request any additional information reasonably necessary to ascertain
the appropriateness and reasonableness of the items contained within such bid
based Construction Budget. Agency may, in the exercise of its reasonable, good
faith judgment, determine whether the proposed budget is unreasonable, and in
such case, then the unreasonable portion shall not be included in the Rent
Reduction/Credit, unless such cost is shown to be reasonable pursuant to the
arbitration provisions of this paragraph. If the parties cannot agree on a final
budget, the question of whether such charge is appropriate and reasonable shall
be submitted to binding arbitration in accordance with the Construction Industry
Rules of the American Arbitration Association. In no case shall payments be made
to affiliates of the Redeveloper without the Agency's prior written consent.
4. Final Construction Plan Documents. Redeveloper shall submit to Agency all
Final Construction Plans approved by the appropriate governmental agencies for
issuance of the necessary permits to complete the Initial Improvements. Changes
from the Final Construction Plans may be made without the prior written approval
by Agency only if: a) they are not substantial or are made to comply with
exceptions, requests or requirements of any governmental agency or official in
connection with the inspection or approval of the work undertaken; or b) if they
do not materially depart in size, utility or value from the Initial Improvements
described in the Construction Documents or, if applicable, the Interior Design
Documents previously submitted to Agency.
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5. Final Cost Breakdowns. Upon completion of the Initial Improvements,
Redeveloper shall deliver to Agency a Final Cost Breakdown relative to the
Initial Improvements for which Redeveloper is requesting a rent credit pursuant
to Section 6 of the DDA. The form and content of the Final Cost Breakdown shall
be subject to Agency's reasonable approval and shall not deviate materially from
the Construction Budget absent good cause therefor (other than negligence or
mismanagement on the part of Redeveloper) being shown. Any dispute with respect
to such deviation shall be submitted to arbitration as provided herein above.
6. Procedure for Qualification of Rent Credits. As a condition precedent to
Agency's, application of the rent credit described in Section 6 of the DDA,
Redeveloper shall provide to Agency evidence verifying the expenditures
represented in the Final Cost Breakdown. Such evidence may include, but not be
limited to, original paid invoices, names and addresses of persons or firms who
have furnished any work, labor or materials in connection with items contained
in the Final Cost Breakdown and/or receipts indicating full payment of
particular items contained in the Final Cost Breakdown. Agency reserves the
right to refuse to provide a rent credit as to particular items for which Agency
has evidence that such item was either not expended or paid in full; provided,
however, that Redeveloper shall have the right to cure any alleged misallocation
by presenting any contrary evidence to Agency. Redeveloper shall pay for and may
include in the cost of the Initial Improvements any construction manager,
project manager, accountants, auditors or supervisors hired by Agency, at
Agency's reasonable discretion, for the purposes of reviewing and inspecting the
course of construction and determining or confirming the appropriate rent credit
to be applied. Agency's representatives shall have the right to attend regular
construction meetings held by Redeveloper and its superintendents, contractors
and subcontractors. Redeveloper shall not be entitled to receive any rent credit
for materials or labor not actually incorporated into or used for the Initial
Improvements. During the course of construction, Redeveloper shall provide
Agency's representative (or Agency's Executive Director if no representative has
been appointed) with copies of all periodic or special reports with respect to
the work received by Redeveloper from its contractors, subcontractors,
architects, engineers or other consultants and, at least monthly, with a
statement of expenditures made to date.
7. Performance Bonds. Redeveloper shall
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provide a labor and material payment bond and a performance bond acceptable to
the Agency naming the Agency as co-obligee thereon; provided, however, if
Hollywood Park, Inc., shall guaranty to the Agency's satisfaction completion of
the Initial Improvements, then the Redeveloper shall not be required to provide
a labor and material payment bond or performance bond.
8. City and Other Governmental Agency Permits and Approvals. Before commencement
of construction, Redeveloper shall secure, or cause to be secured, any and all
permits which may be required by the City of Xxxxxxx or any other governmental
agency having jurisdiction over the construction or development of the Project.
Redeveloper shall carry out the construction of the Initial Improvements in
conformity with all applicable laws, including all applicable Federal, State and
local occupation, safety and health laws, rules, regulations and standards.
9. Selection of Consultants. Redeveloper shall have the sole right to select
architects, landscape architects, consultants, engineers, interior designers,
and contractors for the Project, provided such selection does not in any way
violate or contradict any portion of the DDA. Agency shall select any
consultants to perform the services described in Section 6 hereof.
10. Cooperation of Agency. Agency shall cooperate with Redeveloper in providing
a "fast track" basis of construction to expedite the design, construction and
furnishing of the Initial Improvements. Additionally, Agency shall cooperate
with Redeveloper in expediting any necessary permits or approvals on the part of
the City of Xxxxxxx for any portions of the work to be performed.
11. Plans and Data. If the DDA is terminated for any reason, Redeveloper shall
deliver to Agency, without a cost or expense to Agency, copies of any and all
maps, architectural designs, engineering plans, drawings, studies, reports,
surveys or data pertaining to the Project, provided Redeveloper has title to
such items and the right to transfer such items free of claims or interest of
any third party. Additionally, upon completion of the work, Redeveloper shall
provide Agency with a set of "as built" plans for the Project.
12. Notification of Commencement of Work. Redeveloper shall notify Agency of
Redeveloper's intention to commence a work of improvement at least twenty
(20) days before commencement of any such work or delivery of any materials in
connection therewith. The notice shall
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specify the approximate location and nature of the intended improvements. Agency
shall have the right to post and maintain on the Property any notices of
nonresponsibility provided for under applicable law, and to inspect the property
in relation to the construction at all reasonable times.
13. Cost of Construction; Mechanics' Liens. Except to the extent of any credit
to Base Rent received by Redeveloper, the entire cost of constructing the
Initial Capital Improvements shall be borne by Redeveloper. Redeveloper shall
keep the Property free and clear of all mechanics' and materialmen's liens
resulting from construction done by or for Redeveloper. Redeveloper shall have
the right to contest the correctness or the validity of any such lien if,
immediately on demand by Agency, Redeveloper procures and records a lien release
bond issued by a corporation authorized to issue surety bonds in California in
an amount equal to one and one-half times the amount of the claim of lien. The
bond shall meet the requirements of Civil Code (S)(S)3143 and shall provide for
the payment of any sum that the claimant may recover on the claim (together with
costs of suit, if it recovers in the action). Redeveloper shall hold harmless,
defend and indemnify Agency and the Property and the property against all
liability and loss of any type arising out of work performed on the Property by
Redeveloper, together with reasonable attorneys' fees and all costs and expenses
reasonably incurred by Agency in negotiating, settling, defending or otherwise
protecting against such claims. If Redeveloper does not cause to be recorded the
bond described in California Civil Code Section 3142 or otherwise protect the
Property under any alternative or successor statue, and a final judgment has
been rendered against Redeveloper by a court of competent jurisdiction for the
foreclosure of a mechanics' materialman's, contractor's or subcontractor's lien
claim, and if Redeveloper fails to stay the execution of the judgment by lawful
means or to pay the judgment, Agency shall have the right, but not the duty, to
pay or otherwise discharge, stay or prevent the execution of any such judgment
or lien or both. Redeveloper shall reimburse Agency for all sums paid by Agency
under this section, together with all Agency's attorneys fees and costs, plus
interest on those sums, fees, and costs, at the maximum legal rate that may be
charged by non-exempt lenders under the usury laws of the State of California.
On completion of any substantial work of improvement during the term,
Redeveloper shall file or cause to be filed a notice of completion. Redeveloper
hereby appoints Agency as Redeveloper's attorney-in-fact to file the notice of
completion on Redeveloper's failure to do so after the work of improvement has
been substantially completed.
-75-
EXHIBIT 5
SCOPE OF DEVELOPMENT
[To Be Inserted]
