Document:

exv10w1

Exhibit 10.1

UNITED STATES

DEPARTMENT OF THE INTERIOR

NATIONAL PARK SERVICE

HISTORIC PROPERTY LEASE

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HASLETT WAREHOUSE

at

SAN FRANCISCO MARITIME NATIONAL HISTORIC PARK

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HISTORIC LEASE NO. HL-SAFR001-98

Dated October 16, 2000

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	Page	 
	1. DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2. LEASE OF THE PREMISES
	 	 	17	 
	 
	 	 	 	 
	3. ACCEPTANCE OF THE PREMISES
	 	 	24	 
	 
	 	 	 	 
	4. TERM
	 	 	26	 
	 
	 	 	 	 
	5. ANNUAL RENTAL, ONE TIME PAYMENTS, OTHER OBLIGATIONS TO LESSOR
	 	 	26	 
	 
	 	 	 	 
	6. IMPOSITIONS
	 	 	33	 
	 
	 	 	 	 
	7. AUDIT AND RECORDS
	 	 	34	 
	 
	 	 	 	 
	8. NET LEASE; NO COUNTERCLAIM OR ABATEMENT
	 	 	36	 
	 
	 	 	 	 
	9. LESSOR NOT OBLIGATED TO PAY LESSEE EXPENSES
	 	 	37	 
	 
	 	 	 	 
	10. USE OF THE PREMISES
	 	 	37	 
	 
	 	 	 	 
	11. LIMITATION ON EFFECT OF APPROVALS
	 	 	39	 
	 
	 	 	 	 
	12. CONSTRUCTION AND INSTALLATION APPROVAL
	 	 	39	 
	 
	 	 	 	 
	13. DESIGN OF LESSEE IMPROVEMENTS, ALTERATIONS AND PRESERVATION MAINTENANCE
	 	 	40	 
	 
	 	 	 	 
	14. SUBMISSION OF EVIDENCE OF FINANCING; CLOSING OF FINANCING
	 	 	43	 
	 
	 	 	 	 
	15. CONSTRUCTION OF IMPROVEMENTS AND ALTERATIONS AND PRESERVATION MAINTENANCE
	 	 	46	 
	 
	 	 	 	 
	16. PERMITS AND APPROVALS
	 	 	49	 
	 
	 	 	 	 
	17. EXCAVATION, SITE, AND GROUND DISTURBANCE
	 	 	51	 
	 
	 	 	 	 
	18. OWNERSHIP OF IMPROVEMENTS
	 	 	51	 
	 
	 	 	 	 
	19. BUILDING MAINTENANCE AND PRESERVATION MAINTENANCE
	 	 	52	 
	 
	 	 	 	 
	20. UTILITIES
	 	 	54	 
	 
	 	 	 	 
	21. COMPLIANCE WITH APPLICABLE LAWS; NEPA; NHPA
	 	 	54	 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	 	Page	 
	22. HAZARDOUS MATERIALS
	 	 	55	 
	 
	 	 	 	 
	23. INSURANCE
	 	 	59	 
	 
	 	 	 	 
	24. DAMAGE OR DESTRUCTION
	 	 	68	 
	 
	 	 	 	 
	25. INDEMNITY
	 	 	72	 
	 
	 	 	 	 
	26. LIENS
	 	 	73	 
	 
	 	 	 	 
	27. TRANSFER AND SUBLETTING
	 	 	74	 
	 
	 	 	 	 
	28. LEASEHOLD MORTGAGES
	 	 	77	 
	 
	 	 	 	 
	29. TRANSFER BY LESSOR
	 	 	90	 
	 
	 	 	 	 
	30. RIGHT TO ESTOPPEL CERTIFICATES
	 	 	91	 
	 
	 	 	 	 
	31. DEFAULTS
	 	 	91	 
	 
	 	 	 	 
	32. REMEDIES
	 	 	92	 
	 
	 	 	 	 
	33. ALTERNATIVE DISPUTE RESOLUTION
	 	 	95	 
	 
	 	 	 	 
	34. SURRENDER AND VACATE THE PREMISES
	 	 	97	 
	 
	 	 	 	 
	35. HOLDING OVER
	 	 	98	 
	 
	 	 	 	 
	36. REPRESENTATIONS AND WARRANTIES OF LESSEE
	 	 	98	 
	 
	 	 	 	 
	37. REPRESENTATIONS AND WARRANTIES OF LESSOR
	 	 	99	 
	 
	 	 	 	 
	38. COMPLIANCE WITH FEDERAL EQUAL OPPORTUNITY LAWS
	 	 	99	 
	 
	 	 	 	 
	39. NOTICES
	 	 	99	 
	 
	 	 	 	 
	40. LESSOR’S RIGHT TO EXHIBIT THE PREMISES
	 	 	100	 
	 
	 	 	 	 
	41. NO PARTNERSHIP OR JOINT VENTURE
	 	 	101	 
	 
	 	 	 	 
	42. ANTI-DEFICIENCY ACT
	 	 	101	 
	 
	 	 	 	 
	43. GENERAL PROVISIONS
	 	 	101	 

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TABLE OF CONTENTS

(continued)

EXHIBITS

EXHIBIT A — PREMISES

EXHIBIT B — RETAINED SPACE

EXHIBIT C — OFFICE SPACE

EXHIBIT D — RESTAURANT SPACE

EXHIBIT E — RETAIL SPACE

EXHIBIT F — TRADE FIXTURES

EXHIBIT G — SCHEDULE OF PERFORMANCE

EXHIBIT H — PRELIMINARY SCHEMATIC PLANS FOR, AND DESCRIPTION OF, THE INITIAL LESSEE IMPROVEMENTS

EXHIBIT I — VAULT

EXHIBIT J — RETAINED SPACE RESTROOMS AND DRINKING FOUNTAINS

EXHIBIT K — STREET ENCROACHMENT AGREEMENT

EXHIBIT L — LIST OF REPORTS AND STUDIES IDENTIFYING HISTORIC ELEMENTS

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HISTORIC LEASE

THIS LEASE is made and entered into effective as of October 16, 2000, by and between the United
States Department of the Interior, National Park Service acting through the Regional Director,
Pacific West Region, an agency of the United States of America (“Lessor”) and Maritime Hotel
Associates, L.P., a California limited partnership whose General Partner is Hyde Street
Hospitality, Inc a wholly-owned subsidiary of the Kimpton Hotel & Restaurant Group, Inc, a
California corporation (“Lessee”).

RECITALS

WHEREAS, the San Francisco Maritime National Historical Park is administered by the Secretary of
the Department of the Interior (“Secretary”) through the National Park Service (“Lessor”) pursuant
to the National Park Service Organic Act, 16 U.S.C. Sections 1 et seq., and the San Francisco
Maritime National Historical Park Authorization Act, 16 U.S.C. Sections 410nn et seq.; and

WHEREAS, the Haslett Warehouse is listed on the National Register of Historic Places pursuant to
the National Historic Preservation Act of 1966, as amended, 16 U.S.C. Sections 470 et seq.; and

WHEREAS, pursuant to 16 U.S.C. Section 470h-3 and 410nn-1 et seq. and 36 C.F.R. Part 18, Lessor has
determined that the Haslett Warehouse is an historic property that Lessor is unable to preserve and
rehabilitate during the foreseeable future, and that the historic property will be adequately
preserved by this Lease; and

WHEREAS, Lessor has determined that the use and occupancy of the Haslett Warehouse for the use
contemplated in this Lease is consistent with the San Francisco Maritime National Historical Park
General Management Plan (defined below), and the purposes of the San Francisco Maritime National
Historical Park Authorization Act, and is compatible with the public interest; and

WHEREAS, Lessee desires to lease that certain real property comprising the Haslett Warehouse
(exclusive of the Retained Space (defined below)), comprised of approximately 188,435 square feet
of gross building area; together with certain additional land and an existing appurtenant easement
(collectively, “Premises”) as such Premises are more particularly described in Exhibit A; and to
adaptively reuse the Haslett Warehouse for an approximately 268-room, first class hotel as
described herein with a nautical theme, restaurant, and limited retail and office space; and

WHEREAS, Lessor desires to retain approximately 9,565 square feet of space (the “Retained Space”)
for public purposes, such as a museum and visitor center, as such Retained Space is more
particularly shown on Exhibit B; and

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WHEREAS, Lessor has agreed to lease the Premises to Lessee on the terms, agreements, covenants,
conditions and provisions set forth in this Lease and solely for the purposes provided in this
Lease.

NOW THEREFORE, in consideration of the rents to be paid under this Lease and all of the terms,
agreements, covenants, conditions and provisions contained in this Lease, Lessee and Lessor
(collectively, “Parties”) hereby agree as follows:

	1.	 	DEFINITIONS

As used in this Lease, the following terms shall have the following meanings applicable, as
appropriate, to both the singular and plural forms of the defined terms:

	 	1.1.	 	“Affected Property” is as defined in Section 22.4 of this Lease.
	 
	 	1.2.	 	“Affiliate(s)” means, all entities or persons controlled by or under common
control, through one or more entities, with Lessee.
	 
	 	1.3.	 	“Agency” means any Federal, state, or local agency, department, commission,
board, bureau, office or other governmental authority having jurisdiction.
	 
	 	1.4.	 	“Allowance” is as defined in Section 5.3.3 of this Lease.
	 
	 	1.5.	 	“Alterations” means any improvements, alterations, Major Alterations or Minor
Alterations, of or to the Premises or Retained Space made by Lessee after the
completion of Initial Lessee Improvements.
	 
	 	1.6.	 	“Annual Rental” is as defined in Section 5.4 of this Lease.
	 
	 	1.7.	 	“Annual Report” means a report that includes but is not limited to (a) audited
financial statements certified by a certified public accountant that is independent of
Lessee and Affiliates, prepared on an annualized basis showing Gross Receipts and Rent
Roll for the preceding Lease Year; (b) a statement by Lessee that Lessee’s and any
Affiliates’, Lessee’s Agents’, employees’, guests’, visitors’, invitees’, sublessees’,
licensees’, and permittees’ and other persons or entities under the control of Lessee
during the Term, use of the Premises is consistent with this Lease, (c) a statement
describing any material change in the status of Initial Lessee Improvements and Major
Alterations as of the end of such Lease Year.
	 
	 	1.8.	 	“Applicable Laws” mean all present and future applicable statutes, regulations,
requirements, licenses, rules, guidelines, ordinances, codes, permits, orders, decrees,
and the like, and all amendments thereto, of any Agency, relating to or affecting this
Lease or the design, construction and use of Premises by Lessee, Affiliates, Lessee’s

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	 	 	 	Agents, employees, guests, visitors, invitees, sublessees, licensees, permittees or
other persons or entities under the control of Lessee during the Term, including, but
not limited to:

	 	1.8.1.	 	Those Applicable Laws pertaining to the Park such as 16 U.S.C. 1 et seq.,
16 U.S.C. 410nn et seq.; and the General Management Plan.
	 
	 	1.8.2.	 	Those Applicable Laws pertaining to reporting, licensing, permitting,
investigation, remediation or abatement of emissions, discharges, or releases
(or threatened emissions, discharges or releases) of Hazardous Materials in
or into the air, surface water, ground water or land, or relating to the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials;
	 
	 	1.8.3.	 	Those Applicable Laws pertaining to the protection of the environment
and/or the health or safety of employees or the public;
	 
	 	1.8.4.	 	Those Applicable Laws pertaining to the protection or restoration of
natural or cultural resources;
	 
	 	1.8.5.	 	Those Applicable Laws pertaining to historic leasing, historic preservation
tax certification, and the treatment of historic properties; and
	 
	 	1.8.6.	 	Those Applicable Laws pertaining to national and local building
construction requirements.

	 	 	 	Notwithstanding the foregoing, “Applicable Laws” shall not include (i) any
amendment to the General Management Plan, nor any subsequent General Management
Plan, or (ii) guideline(s) established by the Pacific West Region of the National
Park Service or the San Francisco Maritime National Historical Park; solely to the
extent that such amendment or subsequent General Management Plan, or guideline(s)
materially increases the cost to Lessee of, the operation or use of the Premises
pursuant to this Lease, or prohibits Lessee’s use of the Premises pursuant to this
Lease.
	 
	 	1.9.	 	“Approved Operator” means a hotel operator of established reputation, operating
five (5) or more hotels, and having at least five (5) years experience in the operation
of hotels in the United States, which hotels are of equal or better quality as the
Hotel Standard or a hotel chain

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	 	 	 	operator of established reputation, experienced in
operating hotels of equal or better quality as the Hotel Standard.
	 
	 	1.10.	 	“Base Rental” is as defined in Section 5.5 of this Lease.
	 
	 	1.11.	 	“Bona Fide Institutional Lender” means any one or more of the following,
whether acting in its own interest and capacity or in a fiduciary capacity
for one or more persons or entities none of which need be Bona Fide Institutional
Lenders: (a) any savings bank, commercial bank or trust company (whether acting
individually, or in any trust or fiduciary capacity), savings and loan
association, or building loan association that has deposits in excess of One
Billion Dollars ($1,000,000,000) (which amount shall be increased in proportion to
increases in the CPI after the Commencement Date) and is subject to the
jurisdiction of the Comptroller of the Currency, the Office of Thrift Supervision,
the Federal Deposit Insurance Corporation, or the Federal Reserve Board, and the
courts of the United States of America, any state thereof, or the State of
California; (b) any insurance company, governmental agency, real estate investment
trust, religious, educational or eleemosynary institution or state, municipal or
similar public employees’ welfare, benefit, pension or retirement fund or system
subject to the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq.,
investment banking, merchant banking or brokerage firm (or any special account,
managed fund, department, or agency of any of the foregoing) (i) any one of which
has assets of at least (A) at all times prior to Substantial Completion of the
Initial Lessee Improvements, Five Hundred Million Dollars ($500,000,000) (or
equivalent in foreign currency); and (B) at all time from and after Substantial
Completion of the Initial Lessee Improvements, Fifty Million Dollars ($50,000,000)
(or the equivalent in foreign currency), as adjusted for increases in the CPI from
and after the Completion Date, and (ii) in the case of a religious, educational or
eleemosynary institution or an employees’ welfare, benefit, pension or retirement
fund or system, investment banking, merchant banking or brokerage firm, is
regularly engaged in any aspect of the financial services business; (c)
governmental and quasi-governmental agencies and government sponsored
organizations; or (d) an investment banking firm that originates at least One
Hundred Million Dollars ($100,000,000) annually of commercial mortgage loans for
sale or transfer, in their entirety, to another entity in the mortgage loan
business that is a Bona Fide Institutional Lender, or in connection with the sale
of the mortgage in any secondary mortgage loan market, including any mortgage
backed security or real estate investment conduit transaction or any other
institutional quality rated public offering or private placement. For purposes
hereof, (x) acting in a “fiduciary capacity” shall be deemed to include acting as
a trustee, agent, or in a similar capacity under a

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	 	 	 	mortgage, loan agreement,
indenture or other loan document, and (y) a lender, even if not a Bona Fide
Institutional Lender, shall be deemed to be a Bona Fide Institutional Lender if
promptly after such loan is consummated the note(s) or other evidence of
indebtedness and/or the collateral securing the same are assigned to one or more
persons then qualifying as a Bona Fide Institutional Lender. In no event however
shall the term “Bona Fide Institutional Lender” include any Affiliate of Lessee or
any Excluded Contractor. Subsequent to, and not including,
the initial financing of the Initial Lessee Improvements, the term, Bona Fide
Institutional Lender, shall also include any other type of commercial financing
entity, or vehicle that may from time to time hereafter be generally accepted in
the commercial real estate market for financing commercial construction or other
commercial real estate financing, that includes as a matter of course hotel
projects similar in size, nature, and scope to the Haslett Warehouse hotel
development.
	 
	 	1.12.	 	“Building Maintenance” means maintenance of the Premises, including but not
limited to, the Fixtures and the Trade Fixtures in such manner as to keep the Premises
including, but not limited to, the Fixtures and the Trade Fixtures in good and sanitary
order, condition, and repair (permitting reasonable wear and tear) in compliance with
the Hotel Standard and Applicable Laws.
	 
	 	1.13.	 	“Certificate of Occupancy” means a document issued by Lessor that confirms
that Lessor’s requirements for full occupancy and use of the Premises as provided for
in this Lease have been completed.
	 
	 	1.14.	 	“Commencement Date” is as defined in Section 4 of this Lease
	 
	 	1.15.	 	“Commercially Reasonable Insurance Rates” means with respect to insurance
coverage, that such coverage is commercially available from companies admitted or
approved to do business in the state of California, with a financial rating of at least
A-VIII, as rated by the A.M. Best Key Rating Guide, at rates and on terms such that it
is/would be purchased by similarly situated owners or operators of similar hotel
properties that are historic properties listed on the National Register of Historic
Places in the San Francisco Bay Area of California.
	 
	 	1.16.	 	“Conditional Certificate of Occupancy” means a Certificate of Occupancy issued
with conditions for final completion and allowing for partial occupation or partial use
of the Premises.
	 
	 	1.17.	 	“Construction Contracts” is as defined in Section 23.13.1 of this Lease.
	 
	 	1.18.	 	“CPI” means the United States Department of Labor, Bureau of Labor Statistics,
Consumer Price Index, All Urban Consumers, All Items, San

*** SAN FRANCISCO MARITIME NATIONAL HISTORICAL PARK ***

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	 	 	 	Francisco-Oakland-San Jose,
California (1993-95 equals 100) or, if such index is no longer published, a successor
or substitute index designated by Lessor, published by an Agency reflecting changes in
consumer prices in the San Francisco Bay Area.
	 
	 	1.19.	 	“Design and Construction Documents” means schematic design and review
documents, design development review drawings and construction documents and permit
drawings or any other documents required to be prepared under this Lease for Initial
Lessee Improvements or Alterations other than Minor Alterations.
	 
	 	1.20.	 	“Design and Construction Monitor” is an experienced professional firm hired by
Lessor at the sole cost and expense of the Lessee and acting on behalf of Lessor to (a)
review Design and Construction Documents, (b) monitor all construction of the Initial
Lessee Improvements and all Alterations other than Minor Alterations, and (c) assure
Lessor of compliance with the terms and conditions of this Lease. In connection with
the Initial Lessee Improvements, Lessor shall provide a list of firms to Lessee no
later than the tenth (10th) day of the Due Diligence Period. Lessee shall notify
Lessor in writing within three (3) business days of receipt of such list of any
reasonable objections Lessee may have to any of the listed contractors and provide the
reasons therefor.
	 
	 	1.21.	 	“Due Diligence Period” is as defined in Section 3.2 of this Lease.
	 
	 	1.22.	 	“Environmental Damages” means all claims, demands, damages, injuries, losses,
penalties, fines, costs (including reasonable consultant fees and expert fees),
liabilities, causes of action, judgments, expenses and the like, of any nature
whatsoever and by whomever made, incurred at any time after Lessor relinquishes and
vacates the Premises to Lessee that relate to the presence or release of any Hazardous
Materials in or into the air, surface water, ground water or land at, on, about, under
or within the Premises and to the extent that they arise directly or indirectly from or
in connection with the use of Premises by Lessee, Affiliates, Lessee’s Agents,
employees, guests, visitors, invitees, sublessees, licensees, and permittees and other
persons or entities under the control of Lessee during the Term.
	 
	 	1.23.	 	“Event of Default” is as defined in Section 31 of this Lease.
	 
	 	1.24.	 	“Excluded Contractor” means any person or entity debarred, suspended, proposed
for debarment or suspension, or declared ineligible by any agency or instrumentality of
the United States or by the General Accounting Office or otherwise excluded from
procurement or nonprocurement programs of the United States or any agency or
instrumentality thereof, and (a) included on the List of Parties Excluded

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	 	 	 	from Federal
Procurement and Nonprocurement Programs maintained by the United States General
Services Administration, or successor compilation of similar information; or (b) which
Lessor has advised Lessee within ten (10) days after request from Lessee would be an
Excluded Contractor but for clause (a).
	 
	 	1.25.	 	Expiration Date” and “Final Expiration Date” are as defined in Section 4 of
this Lease.
	 
	 	1.26.	 	“Fixtures” means all fixtures, equipment, and machinery permanently attached
to and forming a part of the Premises or Retained Space, required or necessary for use
and occupancy of the Premises or Retained Space and including all parts of the operating systems of the Premises or
Retained Space such as heating, air conditioning, sprinkler, alarm, water, waste,
and electrical, provided that the term “Fixtures” shall not include Trade
Fixtures.
	 
	 	1.27.	 	“Food and Beverage and All Other Department Revenues” means all Gross Receipts
less Rooms Department Revenues and including gross receipts, income, revenues, rents or
economic benefit of any kind, whether in the form of cash, property or services,
received by Lessee or Affiliates including those from the sale of food and beverages,
or from rentals of retail or office space or other concessions on the Premises to the
extent not specifically included in the Percentage Rental Exclusions. Gross receipts,
as determined in accordance with generally accepted accounting principles and
specifically with the most current edition of the Uniform System of Accounts for the
Lodging Industry of the American Hotel and Motel Association, of any sublessee
operating the Restaurant Space shall be part of Food and Beverage and All Other
Department Revenues and consequently any rent received by Lessee from such sublessee
shall not be included in Food and Beverage and All Other Department Revenues for the
purposes of Section 5 of this Lease.
	 
	 	1.28.	 	“Force Majeure” means reasons or causes reasonably beyond Lessee’s control
(excluding Lessee’s financial inability), such as acts of God or of public enemies,
war, invasion, insurrection, rebellion, earthquake, riots, fires, floods, epidemics,
quarantine restrictions, strikes, lockouts, freight embargoes, and unusually severe
weather delays, or any similar cause.
	 
	 	1.29.	 	“General Management Plan” means that certain General Management Plan, San
Francisco Maritime National Historical Park, San Francisco County, California, dated
October 1997, as amended (subject to the qualification provided at the end of in
Section 1.8 above).
	 
	 	1.30.	 	“Gross Receipts” means the entire amount of gross receipts received by Lessee
or Affiliates, which amount is determined in accordance with

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	 	 	 	generally accepted
accounting principles and specifically with the most current edition of the Uniform
System of Accounts for the Lodging Industry of the American Hotel and Motel Association
(the “Uniform System”) consistently applied, derived by Lessee from the operation of
the Premises and not from any other source less Percentage Rental Exclusions. Gross
Receipts shall include all cash or other revenues received by Lessee from the Premises,
including but not limited to, rent, any payments in lieu of rent, non-returnable option
payments, or payments under a loss of rents insurance policy or provision. There shall
also be included in Gross Receipts the gross receipts from all mechanical or other
vending devices placed on the Premises by Lessee, other than such devices that are
installed on portions of the Premises not open to the public and that are solely for
the convenience of
Lessee’s employees. The gross receipts of any sublessee operating the Restaurant
Space shall be part of Gross Receipts and consequently any rent received by Lessee
from such Restaurant Space shall not be included in Gross Receipts.
	 
	 	1.31.	 	“Haslett Warehouse” means that certain building, comprising that portion of
the Premises that is an historic structure known as the Haslett Warehouse and listed on
the National Register of Historic Places. The Retained Space is located within the
Haslett Warehouse.
	 
	 	1.32.	 	“Hazardous Materials” means any material or other substance (including storage
tanks and Preexisting Hazardous Materials):

	 	1.32.1.	 	The presence of which is governed by any Applicable Laws as being
hazardous or harmful to human health or the environment;
	 
	 	1.32.2.	 	That is or becomes defined as a “hazardous waste,” “extremely hazardous
waste,” “restricted hazardous waste,” “hazardous substance,” “pollutant,”
“contaminant,” “toxic contaminant” under any Applicable Laws;
	 
	 	1.32.3.	 	That is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous or is or becomes regulated by
any Agency under any Applicable Laws;
	 
	 	1.32.4.	 	The presence of which poses or threatens to pose a hazard to the
environment or to the health or safety of persons

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	 	1.32.5.	 	That contains, without limitation of the foregoing, gasoline, diesel fuel
or other petroleum hydrocarbons or volatile organic compounds;
	 
	 	1.32.6.	 	That contains, without limitation of the foregoing, polychlorinated
biphenyls (PCBs), asbestos, asbestos-containing materials, or urea
formaldehyde foam insulation; or
	 
	 	1.32.7.	 	That contains or consists of, without limitation of the foregoing, radon
gas.

	 	1.33.	 	“Historic Elements” means materials, features and any other elements of the
Haslett Warehouse that are of historic significance and that existed as of the
Commencement Date (including those elements identified in those reports and studies
listed on Exhibit L) and remain in the Haslett Warehouse upon completion of the Initial
Lessee Improvements.
	 
	 	1.34.	 	“Historic Preservation Certification Requirements” means those requirements
set forth in 36 C.F.R. Part 67.
	 
	 	1.35.	 	“Historical Valuation Coverage” means the cost to repair or replace damaged
components and/or materials of the Premises, using like materials and workmanship,
giving consideration to duplicating the original texture, color, appearance and
function, and as much as possible restoring the damaged property to the condition
existing immediately prior to the loss consistent with the Historic Preservation
Certification Requirements and the Secretary of Interior’s Standards.
	 
	 	1.36.	 	“Hotel Standard” means a first-class, but not deluxe, standard of operation,
construction and maintenance, including the quality of construction and of the
furniture, equipment and finishes. The Hotel Nikko, The Palace, The Fairmont, the St.
Francis and the Ritz Carlton are examples of deluxe hotels in San Francisco as of the
Commencement Date. The Tuscan Inn, the Galleria Park Hotel and the Villa Florence
Hotel are examples of hotels operating at the Hotel Standard as of the Commencement
Date. During the Term, hotels meeting the Hotel Standard will be those operating at a
standard similar to the aforementioned properties and as first-class, but not deluxe,
hotels in the City of San Francisco, California. The retail space within the Alexis
Hotel building in Seattle, Washington, is an example of retail space operating at the
Hotel Standard as of the Commencement Date.
	 
	 	1.37.	 	“Impositions” are all taxes, assessments, rates, charges, license fees,
municipal liens, levies, excises or imposts, whether general or special, or ordinary or
extraordinary, of every name, nature and kind whatsoever,

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	 	 	 	if any, lawfully imposed by
any Agency, or other authority or entity, that may be levied, assessed, charged or
imposed or may be or become a lien or charge upon the Premises or any part thereof; or
upon the rent or income of Lessee; or upon the use or occupancy of the Premises; or
upon this transaction or any document creating or transferring an estate or interest of
Lessee in the Premises; or upon any improvements or Fixtures; or upon the leasehold
estate of Lessee; or upon Lessor by reason of its ownership of the fee underlying this
Lease but excluding taxes on the revenue or income of Lessor from this Lease.
Impositions also include, but are not limited to, the payment of any bonds or charges
imposed or required by any Agency, or other authority or entity, by reason of the
proposed or actual use, treatment, storage, discharge or disposal of Hazardous
Materials on or from the Premises by Lessee, or any sublessee or licensee claiming
through Lessee.
	 
	 	1.38.	 	“Initial Lessee Improvements” means the Rehabilitation and other improvements
performed by Lessee for initial occupancy of the Premises, including, but not limited
to, (a) a first-class hotel (with a nautical theme), comprised of approximately 268
rooms (approximately
11 luxury suites, approximately 11 full suites, approximately 24 king through
suites, approximately 123 large double queen rooms, approximately 96 deluxe guest
rooms, and approximately 3 regular guest rooms, (b) restaurant, and (c) limited
office and retail, (i) substantially as more fully described in the portion of
that certain proposal from Lessee entitled, “A Proposal for the Rehabilitation of
the Haslett Warehouse at San Francisco Maritime Historical Park” dated August 10,
1998 attached as Exhibit H, and (ii) as described in this Lease and (d) pursuant
to Section 2.3 below, the Retained Space, all as may be modified as reflected in
Lessee’s final Design and Construction Documents for the Initial Lessee
Improvements approved in writing by Lessor.
	 
	 	1.39.	 	“Inventory and Condition Report” is a document that sets forth an inventory of
the Premises and its Fixtures at the Commencement Date, at the completion of Initial
Lessee Improvements, periodically during the Term to reflect changes, and at the
Expiration Date with the latter inventory showing the condition of the Premises and
Fixtures at that time for the purposes of Section 34 of this Lease.
	 
	 	1.40.	 	“Interest Rate” means the percentage of interest charged based on the current
value of funds to the United States Treasury as published periodically in the Treasury
Financial Manual.
	 
	 	1.41.	 	“Lease” means this Lease No. HL-SAFR001-99, including all conditions,
exhibits, modifications, amendments, and extensions thereof.

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	 	1.42.	 	“Lease Year” is as defined in Section 5.2 of this Lease.
	 
	 	1.43.	 	“Leasehold Mortgage” is as defined in Section 28 of this Lease.
	 
	 	1.44.	 	“Lessee’s Agents” means Lessee’s directors, officers, partners, members,
employees, contractors, or agents.
	 
	 	1.45.	 	“Lessor’s Agents” means Lessor’s director, officers, employees, contractors,
or agents.
	 
	 	1.46.	 	“Major Alterations” means each Alteration (or group of Alterations, if
occurring substantially at the same time and as part of a single project) of or to the
Premises or Retained Space by Lessee made after the completion of the Initial Lessee
Improvements, the construction cost of which is greater than Five Million Dollars
($5,000,000) adjusted by CPI since the Commencement Date to the year in which the Major
Alteration begins.
	 
	 	1.47.	 	“Minor Alterations” means each Alteration (or group of Alterations, if
occurring substantially at the same time and as part of a single project) of or to the
Premises by Lessee made after the completion of the Initial
Lessee Improvements, the construction cost of which is less than One Hundred
Thousand Dollars ($100,000) adjusted by CPI since the Commencement Date to the
year in which the Minor Alterations begins; provided that such Alterations are
limited to decorative improvements, repainting, recarpeting, and installation of
Trade Fixtures and equipment, all of which are comparable to the Hotel Standard,
and shall not include Preservation Maintenance.
	 
	 	1.48.	 	“Office Space” means that certain space comprised of approximately 4,200
square feet located on the ground floor of the Premises and shown on Exhibit C, as may
be modified as reflected in Lessee’s final Design and Construction Documents for the
Initial Lessee Improvements approved in writing by Lessor.
	 
	 	1.49.	 	“Park” means all the area, facilities, features, and property that are
contained within the boundaries of or otherwise controlled by San Francisco Maritime
National Historical Park.
	 
	 	1.50.	 	“Percentage Rental” is as defined in Section 5.6 of this Lease.
	 
	 	1.51.	 	“Percentage Rental Exclusions” means the following items, which, to the extent
set forth herein, do not constitute a part of and which shall be excluded by Lessee
from, Gross Receipts for the purpose of calculating Percentage Rental:

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	 	1.51.1.	 	Federal, state and municipal excise, sales, use, or luxury or similar tax,
which are collected directly from occupants or users either as a part of or
added to the sales price of any goods, services, rooms or displays, such as
bed taxes, gross receipts, room admission, cabaret or equivalent taxes and
actually paid by Lessee;
	 
	 	1.51.2.	 	credits and refunds to customers from cancellations of room reservations;
	 
	 	1.51.3.	 	provided that the amount of such business does not exceed comparable hotel
industry standards, receipts, whether direct or through license or concession
by Lessee, from guest room movies, newspapers, magazines, guest room
telephone, guest laundry, and guest room mini-bar revenues;
	 
	 	1.51.4.	 	the amount of any gross sales revenues received by any sublessee(s) of the
Office Space and Retail Space;
	 
	 	1.51.5.	 	parking revenues;
	 
	 	1.51.6.	 	proceeds of any insurance, judgments, settlements or condemnation awards
that do not compensate Lessee for loss of Gross Receipts;
	 
	 	1.51.7.	 	the actual charge not to exceed the customary and usual charge to Lessee
by credit card companies imposed on a credit card transaction by a user;
	 
	 	1.51.8.	 	value that may be imputed to complimentary occupancy of hotel rooms and
complimentary meals for users without charge, solely for the purpose of
generating future goodwill for the hotel operation in the Premises in
accordance with then prevailing customary and usual practices of other
comparable hotels in San Francisco, California;
	 
	 	1.51.9.	 	value that may be imputed to complimentary employee meals;
	 
	 	1.51.10.	 	any penalty charged by Lessee for a returned check;
	 
	 	1.51.11.	 	the face value of any returned checks written off by Lessee as a bad debt
to the extent Lessor received Percentage Rental on the services involved; and

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	 	1.51.12.	 	any charge added by Lessee to its regular cash price as a finance charge
for installment sales on credit.

	 	1.52.	 	“Personal Property” means all furniture, equipment, appliances, apparatus, and
all other property placed on the Premises that neither are permanently attached to nor
form a part of the Premises, whether leased or owned by Lessee, including without
limitation, (a) all furniture, equipment and personal property located on or used in
connection with the operation of the Premises, (b) all as-built plans, drawings and
specifications for the Initial Lessee Improvements and any Alterations, and all
architectural, structural, mechanical, electrical, and landscaping plans and
specifications, surveys, engineering studies and reports and applicable flood plain
maps relating to the Premises (collectively, the “Plans”), and (c) all of Lessee’s
right, title and interest in any intangible personal property now or hereafter used in
connection with the use and operation of the Premises, including, without limitation,
the right to use any trade name now used in connection with the Initial Lessee
Improvements, all warranties or guarantees received from any contractors,
subcontractors, suppliers or materialmen in connection with any construction, repairs
or alterations of the Premises, names, licenses, franchises, permits, Lessee lists,
advertising materials and other similar property and rights relating to the use and
operation of the Hotel or any of the other Personal Property. Personal Property also
includes Trade Fixtures. Personal Property includes both tangible and intangible
personal property including intellectual property. Notwithstanding Lessee’s
rights in and to the Plans, Lessee shall provide Lessor with a copy of each of the
Plans upon termination of this Lease and shall assign to Lessor all transferable
warranties or guarantees received from any person or entity including but not
limited to contractors, subcontractors, suppliers or materialmen in connection
with the Premises.
	 
	 	1.53.	 	“Preexisting Hazardous Materials” means Hazardous Materials that existed in,
on, or under the Premises prior to the Commencement Date, whether such substances were
within the definition of Hazardous Materials as used in this Lease as of the
Commencement Date or subsequently become included within such definition.
	 
	 	1.54.	 	“Premises” are as defined in the Recitals above and Exhibit A and includes the
Vault.
	 
	 	1.55.	 	“Preservation Maintenance” means the act or process of applying preservation
treatment to the Haslett Warehouse to maintain and retain the historic character of the
Haslett Warehouse in accordance with the application of the Historic Preservation
Certification Requirements and the Secretary of Interior’s Standards. Preservation
Maintenance

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	 	 	 	includes housekeeping and routine and cyclic work scheduled to mitigate
wear and deterioration of the Haslett Warehouse without altering the historic
character, protecting the condition of the Haslett Warehouse, repairing or replacing in
kind broken or worn out elements, parts, or surfaces so as to keep the existing
appearance and function of the site or structure, and emergency stabilization work
necessary to protect damaged historic fabric from additional damage.
	 
	 	1.56.	 	“Preservation Plan” is a document that sets forth a plan, including a time
schedule, for Preservation Maintenance, including, without limitation, Lessee’s ongoing
compliance with the Historic Preservation Certification Requirements and the Secretary
of Interior’s Standards.
	 
	 	1.57.	 	“Reconstruction” means the act or process, in accordance with the Secretary of
Interior’s Standards pertaining to “reconstruction”, of accurately depicting by means
of new construction, form, features, and detailing of a non-surviving site, landscape,
building, or object for the purpose of replicating its appearance at a specific period
of time and it is historic location.
	 
	 	1.58.	 	“Rehabilitation” means the act or process, in accordance with the Historic
Preservation Certification Requirements and the Secretary of Interior’s Standards
pertaining to “rehabilitation”, of returning a property to a state of utility through
repair or alteration that makes possible an
efficient contemporary use while preserving those portions or features of the
property that are significant to its historical, architectural and cultural
values. From and after the date that is ten (10) years after the Commencement
Date, “Rehabilitation” following casualty or other damage or destruction may, at
Lessor’s direction, include Restoration or Reconstruction of specific Historic
Elements in accordance with the Secretary of Interior’s Standards.
	 
	 	1.59.	 	“Rent Roll” means a full and complete list of all sublessees of Lessee, if
any, and for each sublessee, a full and complete description of sublease terms,
including but not limited to term, annual rent, base rent, percentage rent, sublessee
improvements, escalation clauses, concessions, inducements, options to renew,
amendments to sublease, and any other information regarding subleases as Lessor may
from time to time reasonably prescribe.
	 
	 	1.60.	 	“Restaurant Space” means that certain space comprised of approximately 4,550
square feet located on the ground floor of the Premises and shown on Exhibit D, as may
be modified as reflected in Lessee’s final Design and Construction Documents for the
Initial Lessee Improvements approved in writing by Lessor.

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	 	1.61.	 	“Restoration” means the act or process in accordance with the Secretary of
Interior’s Standards pertaining to “restoration”, of accurately depicting the form,
features, and character of a property as it appeared at a particular period of time by
means of the removal of features from other periods in its history and reconstruction
of missing features from the restoration period.
	 
	 	1.62.	 	“Retail Space” means that certain space comprised of approximately 1,200
square feet located on the ground floor of the Premises and shown on Exhibit E, as may
be modified as reflected in Lessee’s final Design and Construction Documents for the
Initial Lessee Improvements approved in writing by Lessor.
	 
	 	1.63.	 	“Retained Space” means space located within the Haslett Warehouse that is not
leased to Lessee and is reserved for use by Lessor. The Retained Space comprises
approximately 9,565 square feet of the ground floor area within the Haslett Warehouse
as measured from the interior surface of the finished walls and is a contiguous area
beginning approximately at the Jefferson and Hyde Street corner of the building and
extending across the bays of the building’s support grid fronting on Jefferson Street
as shown on Exhibit B and continuing into the interior of the building on the lowest
level along the Hyde Street wall of the building so as to encompass the requisite area
in a generally rectangular shape. The outside entrance to the Retained Space shall be
through an existing opening onto Jefferson Street. The Retained Space extends downward
from the bottom of the finished surfaces of the ceiling above and extends no
further downward than the top of the concrete floor slab. The Retained Space does
not include the Vault.
	 
	 	1.64.	 	“Rooms Department Revenues” means all Gross Receipts, income, revenues, rents
or economic benefit of any kind, whether in the form of cash, property or services,
received by Lessee or Affiliates solely from the rental of guest rooms in the Premises
other than Percentage Rental Exclusions. Rooms Department Revenues does not include
Food and Beverage and All Other Department Revenues.
	 
	 	1.65.	 	“Schedule of Performance” means the Schedule of Performance attached as
Exhibit G to this Lease.
	 
	 	1.66.	 	“Secretary of Interior’s Standards” means (a) the Secretary of Interior’s
Standards for Historic Preservation codified in 36 C.F.R. Part 68; (b) the Secretary of
the Interior’s Standards for the Treatment of Historic Properties, 1995; and (c) the
Secretary’s Standards for Rehabilitation and Guidelines for Rehabilitating Historic
Buildings (1990 revision).

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	 	1.67.	 	“Street Encroachment Agreement” means that certain Street Encroachment
Agreement with the City and County of San Francisco attached as Exhibit K to this
Lease.
	 
	 	1.68.	 	“Substantial Completion” means the work of constructing the Initial Lessee
Improvements, Alterations, or Preservation Maintenance, as applicable, is substantially
complete and the constructed facility is operable as a usable facility.
	 
	 	1.69.	 	“Term” is as defined in Section 4 of this Lease.
	 
	 	1.70.	 	“Termination Date” means the Expiration Date or Final Expiration Date or such
earlier date as this Lease is terminated pursuant to any provision of this Lease.
	 
	 	1.71.	 	“Trade Fixtures” means those items, or categories of items, whether owned or
leased by Lessee, listed on Exhibit F of this Lease.
	 
	 	1.72.	 	“Transfer” means the direct or indirect, voluntary or by operation of law,
sale, assignment, subletting, encumbering, pledge or other transfer or hypothecation of
Lessee’s or any permitted assignee’s or sublessee’s interest in or rights with respect
to the Premises or Lessee’s leasehold estate therein. Any sale or other transfer,
including by consolidation, merger or reorganization, of a Controlling Interest in
Lessee or any permitted assignee or sublessee, if such entity is a corporation, or any
sale or other transfer of a Controlling Interest in the partnership interests of such
entity, if such entity is a partnership, whether in a single transfer or in a series of
related transfers, and whether directly or by sales or
transfers of underlying partnership or corporate ownership interests, shall be
deemed a Transfer. The term “Controlling Interest” as used in this Lease means,
in the case of a corporate entity, an interest, beneficial or otherwise, of
sufficient outstanding voting securities or capital of the Lessee, permitted
assignee, or sublessee or related entity so as to permit exercise of managerial
authority over the actions and operations of the Lessee, permitted assignee, or
sublessee, of a majority of the Board of Directors of Lessee, permitted assignee
or sublessee, and, in the instance of a partnership, limited partnership, joint
venture, limited liability company, or individual entrepreneurship, beneficial
ownership of the capital assets of Lessee, permitted assignee or sublessee so as
to permit exercise of managerial authority over the actions and operations of
Lessee, permitted assignee or sublessee. Notwithstanding the foregoing definition
of “Transfer,” a “Transfer” shall not include any transaction in connection with
the granting of an Assignment for Security or Leasehold Mortgage pursuant to
Section 28.2 below (but excluding a foreclosure or giving of a deed in lieu of
foreclosure thereunder). A foreclosure or the giving of a deed in lieu

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	 	 	 	shall be deemed a “Transfer” and shall require Lessor’s prior written approval in
accordance with Section 28.13.2 below.
	 
	 	1.73.	 	“Utility Areas” means the areas between the bottom of the slab over the
Retained Space extending downward to the bottom of the finished surfaces of the ceiling
of the Retained Space, together with such vertical areas immediately adjacent to the
interior side of the exterior walls of the Retained Space and columns located therein
and to and from the Vault, which locations are reasonably necessary for utilities
serving the Premises. The location of any and all utilities serving the Premises
within the Utility Areas shall be subject to Lessor’s prior written approval.
	 
	 	1.74.	 	“Vault” means that certain space comprised of approximately 115 square feet
located on the ground floor along the interior wall of the Haslett Warehouse along Hyde
Street as shown on Exhibit I. The Vault contains an electrical transformer and related
electrical equipment which provides electricity to the Premises and the Retained Space.

	2.	 	LEASE OF THE PREMISES

	 	2.1.	 	Lease of the Premises

	 	2.1.1.	 	In accordance with the powers granted by Congress, Lessor, for and in
consideration of the rents, covenants and agreements herein contained on the
part of Lessee, its heirs, successors and assigns, to be paid, kept and
performed, hereby leases and demises to Lessee, and Lessee hereby hires from
Lessor, upon and subject to the terms
agreements, covenants, conditions and provisions of this Lease, the
Premises, excepting and reserving unto Lessor:

	 	(a)	 	the Retained Space;
	 
	 	(b)	 	nonexclusive easements in the
Utility Areas as appurtenances to the Retained Space to use,
operate, maintain, repair, reconstruct, replace, install,
construct, and inspect Lessor’s utilities, such as lighting,
alarm systems, electrical, and telecommunications, and
facilities, and all necessary and proper lines, ducts, measuring
devices, and other related apparatus and equipment in and
through the Utility Areas and to and from the Vault; together
with the right, at all reasonable times to access the Utility
Areas and the Vault for the same;

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	 	(c)	 	the right, at all reasonable
times and for purposes other than mere inspection, upon
reasonable prior notice under the circumstances, given at least
thirty (30) days in advance where feasible (except in case of
emergency), and subject to the rights of Lessee’s invitees in
the Premises, to enter and to permit any Agency, public or
private utilities and other persons to enter upon the Premises
as may be necessary as determined in Lessor’s reasonable
judgment for the purposes of (i) using, operating, maintaining,
replacing, inspecting, and relocating any existing underground
wells, water, natural gas, steam, storm, storm sewer and
sanitary sewer lines, telephone and electric power lines,
conduits and facilities, and flood control facilities; (ii)
using, installing, operating, maintaining, renewing, replacing,
inspecting, and relocating underground wells, water, natural
gas, steam, storm, storm sewer and sanitary sewer lines,
telephone and electric power lines, conduits and facilities, and
flood control facilities required by Applicable Laws or mandated
by governmental entities other than the National Park Service;
or (iii) using, installing, operating, maintaining, renewing,
replacing, inspecting, and relocating wells and other equipment
as reasonably required for environmental monitoring or
remediation purposes. No such facilities shall materially
interfere with the use or stability of any building or
improvement on the Premises. Lessee hereby waives any claims
for damages for any injury or inconvenience to or
interference with Lessee’s use and occupancy of the Premises,
any loss of occupancy or quiet enjoyment of the Premises or
any other loss occasioned by Lessor’s exercise of its rights
under this Section 2.1(c);
	 
	 	(d)	 	the right, at all reasonable
times and upon twenty-four (24) hours’ prior notice to Lessee
(except in the case of emergency), and subject to the rights of
guests in the Premises, in its sole discretion, but not the
obligation, to enter and to permit any Agency to enter upon and
to permit such investigation or testing on the Premises as are
reasonably necessary in the opinion of Lessor. No such
inspection or testing by Lessor shall materially interfere with
the use or

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	 	 	 	stability of any building or improvement on the
Premises. Lessee shall establish procedures providing emergency
access by Lessor to any secured areas within the Premises, which
procedures shall comply with all Applicable Laws. Lessee hereby
waives any claims for damages for any injury or inconvenience to
or interference with Lessee’s use and occupancy of the Premises,
any loss of occupancy or quiet enjoyment of the Premises or any
other loss occasioned by Lessor’s exercise of its rights under
this Section 2.1(d); and
	 
	 	(e)	 	the right to enter upon the
Premises at any reasonable time for the purpose of inspection
and inventory and when otherwise deemed necessary for the
protection of interests of Lessor, and Lessee shall have no
claim of any character on account thereof against Lessor or any
officer, agent, or employee thereof. Lessor shall have the
right to make, without prior notice thereof, annual inspections
for compliance with public health and safety standards. Lessor
may make follow-up inspections to ensure compliance therewith.
Lessor retains the right to close the Premises when immediate
danger to life or property is discovered on such inspections or
follow-up inspections. To the extent feasible, Lessor will
provide reasonable notice of such closure. Lessee hereby waives
any claims for damages for any injury or inconvenience to or
interference with Lessee’s use and occupancy of the Premises,
any loss of occupancy or quiet enjoyment of the Premises or any
other loss occasioned by Lessor’s exercise of its rights
under this Section 2.1(e).
	 
	2.1.1.1.
	 	Premises may be initially demised to Lessee with permitted uses
authorized to others on the courtyard portion of the Premises adjacent
to the Haslett Warehouse on the east side (“Courtyard Permits”). Upon
the Commencement Date, Lessor will invoke the cancellation clause in
the Courtyard Permits and will cause the property to be vacated. Once
vacated, the courtyard portion of the Premises will be demised to the
Lessee without being subject to such uses.

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	 	2.1.2.	 	Lessor hereby grants to Lessee for the benefit of the Premises, subject to
the other terms and conditions of this Lease, a nonexclusive easement
appurtenant to the Premises for reasonable access through the Retained Space,
for use by the Lessee, its employees, contractors, consultants, and agents,
for the purposes of (a) the use, operation, maintenance, repair,
reconstruction, replacement, installation, construction, and inspection of
utilities, such as heating, air conditioning, water, waste, electrical, and
telecommunications, and facilities, and all necessary and proper lines,
ducts, valves, fittings, pumps, measuring and protective devices, and other
apparatus and equipment in and through the Utility Areas, and (b) the use,
operation, maintenance, repair, reconstruction, replacement, installation,
construction, and inspection of electrical utilities and facilities, and all
necessary and proper lines, ducts, fittings, measuring and protective
devices, and other electrical apparatus in the Vault; together with the
right, to access the Utility Areas and the Vault for the same; provided that
(c) Lessee’s access rights granted hereunder shall be limited to all
reasonable times and for purposes other than mere inspection, upon reasonable
prior notice under the circumstances, given at least thirty (30) days in
advance where feasible (except in the case of emergency), (d) shall be for a
reasonably minimum period of time, and (e) Lessee’s use shall not
unreasonably interfere with the use of the Retained Space or reduce or
unreasonably impair the usefulness or function of the Retained Space or
Lessor’s utilities located within the Utility Areas.
	 
	 	2.1.3.	 	This Lease is subject to all Applicable Laws including, but not limited to,
all liens, encumbrances, restrictions, rights and conditions of law or of
record or otherwise actually
known to Lessee or reasonably ascertainable by inspection or survey.

	 	2.2.	 	Reservation of Rights

	 	2.2.1.	 	The privileges granted herein are further expressly subject to all existing
easements, licenses, and rights-of-way.
	 
	 	2.2.2.	 	This Lease reserves to the Lessor the right to install, operate, and
maintain a sign on the exterior of the Premises giving notice to the public
of Lessor’s presence in the Retained Space. Such sign shall conform to

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	 	 	 	Applicable Laws and be in accordance with the style and
appearance of signage adopted by Lessee. Any signage or other
items proposed to be placed on the exterior of the Premises by
Lessor must be designed and installed in consultation with Lessee
and shall be installed, maintained, and operated in such a manner
as to not interfere with the operations of Lessee.
	 
	 	2.2.3.	 	Mineral Rights
	 
	 	 	 	Mineral rights to the land subject to this Lease are retained by
the State of California, reserving all mineral deposits, as defined
in Section 6407 of the Public Resources Code, together with the
right to prospect for, mine, and remove such deposits.

	 	2.2.4.	 	Nothing contained in this Lease shall give or be deemed to give Lessee an
independent right to grant easements or other rights-of-way over, under, on,
or through the Premises.

	 	2.3.	 	Retained Space

	 	2.3.1.	 	Lessor’s use of the Retained Space will be for public purposes such as a
museum, display area, and visitor center and for similar public purposes
related to the Park and the objectives of Lessor, including, without
limitation, activities conducted by any cooperating association or convention
and visitor’s bureau.

	 	2.3.2.	 	Lessee shall (a) construct the building shell of the Retained Space as
provided in Section 13 below as part of the Initial Lessee Improvements and
pursuant to mechanical, electrical and plumbing (“MEP”) performance
specifications submitted by Lessor to Lessee in accordance with the Schedule
of Performance; and (b) use the Allowance to design and construct the
interior of the Retained Space; provided that the cost of such design and
construction of the interior of the Retained Space shall be limited to the
extent of the Allowance. Prior to expenditure of the Allowance, Lessee shall
obtain Lessor’s prior written approval for such expenditure. The allocation
and expenditure of the Allowance for such design and construction shall be
determined by Lessor in its sole discretion. Lessor shall complete the
installation of the interior of the Retained Space as funds are available.

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	 	 	 	Lessor hereby grants reasonable access to Lessee to the
Retained Space for performance and completion of its obligations
pursuant to this Section 2.3.2.
	 
	 	2.3.3.	 	Lessee, at Lessee’s sole cost and expense, shall engage an acoustical
engineer as required to mitigate noise and vibration from the electrical
transformer and other electrical equipment in the Vault and Lessee’s
utilities in the Utility Areas so that such noise and vibration shall be
reduced to levels appropriate to, and shall not materially interfere with,
the use of the Retained Space pursuant to Section 2.3.1 above; provided that
such mitigation shall be subject to Lessor’s prior written approval.

	 	2.3.4.	 	Lessor shall perform maintenance in the Retained space in accordance with
Applicable Laws. The visitor center within the Retained Space shall be
operated and maintained consistent with the operation and maintenance
standards established for the Bear Valley Visitor Center at Point Reyes
National Seashore, Loomis Museum at Lassen Volcanic National Park, and
Newhalem Visitor Center at North Cascades National Park.

	 	2.3.5.	 	In the event Lessor ceases to require the use of the Retained Space for
public purposes (described in Section 2.3.1 above) and subject to Applicable
Laws, Lessee will be offered such space as an addition to Premises under the
terms of the Lease and on terms compatible with the requirements of Lessor
and at fair market value. Lessor shall not permit (a) the operation of a
restaurant in the Retained Space; or (b) any use or operation of the Retained
Space which generates excessive noxious odors or noise, such as a fast food
restaurant or nightclub. Operations in the Retained Space for uses other
than as a visitor center shall be commensurate with the Hotel Standard.

	 	2.3.6.	 	Lessor and Lessee shall cooperate to facilitate and coordinate the
interactions between the Retained Space and Premises. Exhibits in the
Retained Space shall meet National Park Service standards for Exhibit
Planning and Design and Exhibit Fabrication. In addition, all National Park
Service Conservation Guidelines that relate to the preservation and exhibit;
or of historical collections will be applied. Exhibits shall be maintained
as required in National Park Service Servicewide Cyclic and

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	 	 	 	Repair/Rehab Programs. The Bear Valley Visitor Center at Point Reyes National Seashore,
Loomis Museum at Lassen Volcanic National Park, and Newhalem Visitor Center at
North Cascades National Park are examples of visitor centers
operating under these standards.
	 
	 	2.3.7.	 	Lessee shall (or shall cause to) install the heating, HVAC, plumbing and
sprinklers serving the Retained Space and shall operate, maintain, repair,
reconstruct, and replace any and all such utilities serving the Premises and
the Retained Space. Lessor shall operate, maintain, repair, reconstruct, and
replace any and all utilities serving solely the Retained Space. All
utilities installed by Lessee serving the Retained Space shall be located
within the Utility Areas as approved by Lessor. Lessor will pay directly to
the providing utility for Lessor’s use of all utilities serving the Retained
Space to the extent feasible, otherwise, if requested by Lessor, Lessee shall
contract with the applicable utility provider to provide such utility service
to Lessor; the rate per unit charged the Lessor for such service shall be
approximately the average cost per unit of providing such service and Lessee
shall bill Lessor monthly therefor. Lessor shall pay Lessee within thirty
(30) days of receipt of the invoice for such utility service.

	 	2.3.8.	 	Lessor shall permit Lessee and its agents, contractors and representatives
to access the Vault through the Retained Space at reasonable times and for
purposes other than mere inspection, upon reasonable prior notice under the
circumstances, given at least thirty (30) days in advance where feasible
(except in an emergency situation in which event no notice shall be required
if not reasonably possible under the circumstances), for the purpose of
inspecting, repairing, replacing, and maintaining the Vault and/or any
equipment therein, and to perform Lessee’s obligations pursuant to Section
2.3.3 above. In connection with any such entry (except in the event of an
emergency situation), Lessee shall (a) use reasonable efforts to minimize the
interference with or disruption to the use and operation of the Retained
Space; and (b) not exercise its rights of entry with unreasonable frequency.
In any case where Lessee exercises its right to enter upon the Retained Space
pursuant to this Section 2.3.8, Lessee shall, to the extent reasonably
practicable, allow Lessor or its designee to

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	 	 	 	accompany Lessee in the Retained
Space while Lessee is present thereon.

	3.	 	ACCEPTANCE OF THE PREMISES

	 	3.1.	 	As Is Condition of the Premises

	 	3.1.1.	 	Lessee expressly agrees to take the Premises and all improvements thereon
in their existing “as is” condition and acknowledges that in entering into
this Lease, Lessee does not rely on, and Lessor does not make, any express or
implied representations or warranties as to any matters including, without
limitation, the suitability of the soil or subsoil; any characteristics of
the Premises or improvements thereon; the suitability of the Premises for the
intended use; the likelihood of deriving trade from or other characteristics
of the Park; the economic or programmatic feasibility of Lessee’s use and
occupancy of the Premises; title to the Premises; Hazardous Materials on or
in the vicinity of the Premises; or any other matter. Lessee will satisfy
itself pursuant to Section 3.2 of this Lease as to such suitability and other
pertinent matters by Lessee’s own inquiries and tests into all matters
relevant in determining whether to enter into this Lease. Lessee hereby
accepts the Premises in their existing condition, and hereby expressly agrees
that if any remedial work, Preservation Maintenance, improvements or
Alterations is required to conform the Premises to the requirements of
Applicable Laws, Lessee shall, at its sole cost and expense, undertake and
diligently prosecute to completion any such work except as expressly set
forth in this Lease, provided, however that the provisions of this Section 3
do not modify the provisions of Section 22 below with respect to Pre-existing
Hazardous Materials.

	 	3.1.2.	 	Lessee understands and expressly agrees that Lessor’s approval of Design
and Construction Documents and Lessor’s provision of the Certificate of
Occupancy or Conditional Certificate of Occupancy or any Lessor approval of
Lessee’s completion of Alterations, Building Maintenance, or Preservation
Maintenance does not make nor imply any representation or warranty by Lessor
that the Premises complies with all Applicable Laws.

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	 	3.2.	 	Lessee’s Due Diligence

	 
	 	 	 	During the ninety (90) day period (the “Due Diligence Period”) commencing with the
Commencement Date, Lessee shall conduct such investigations of the Premises and
surrounding property as Lessee shall feel necessary to determine if the Premises
are in a condition acceptable to Lessee, and whether Lessee can obtain adequate
financing and professional and contracting services for the construction of the
Initial Lessee Improvements and whether the environmental remediation of the Premises and
surrounding property can be undertaken in a manner satisfactory to Lessee. During
the Due Diligence Period and in accordance with the Schedule of Performance,
Lessee shall submit to the State Historic Preservation Officer, and provide a copy
to Lessor, of Lessee’s historic preservation certification application pursuant to
36 C.F.R. Part 67. Within ten days of receipt, Lessee shall provide to Lessor a
copy of the certification of Rehabilitation determined by Historic Preservation
Services, National Park Service, Washington, D.C. During the Due Diligence
Period, Lessee shall be responsible for Lessee’s activities and those of
Affiliates, Lessee’s Agents, employees, guests, visitors, invitees, sublessees,
licensees, and permittees and other persons or entities under the control of
Lessee in conducting the necessary investigations and otherwise occupying or using
the Premises and shall provide insurance coverage sufficient to fully protect,
defend and indemnify Lessor from loss and damage. At any time during the Due
Diligence Period, Lessee may, in its sole discretion, but only after performing
the repair, replacement or restoration of any damage to Premises caused by Lessee,
Affiliates, Lessee’s Agents, employees, guests, visitors, invitees, sublessees,
licensees, and permittees and other persons or entities under the control of
Lessee in compliance with all Applicable Laws and in accordance with the terms and
conditions of this Lease, as a result of Lessee’s investigations, elect to
terminate this Lease by giving Lessor a written notice of such termination,
whereupon this Lease shall terminate. Upon such termination by Lessee, Lessor
shall retain the payment made pursuant to Section 5.3.1 below and Lessee and
Lessor shall have no further obligation to each other except that the indemnity
provided in this Section 3.2 shall survive such termination.

	 	3.3.	 	Lessor Removal of Hazardous Materials from Premises

	 
	 	 	 	Upon completion of the Due Diligence Period and absent Lessee’s termination of the
Lease pursuant to Section 3.2 above, Lessor shall remove Lessor’s personal
property from the Premises including, without limitation, stored Hazardous
Materials such as cans of paint and similar items.

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	4.	 	TERM

	 	4.1.	 	Unless terminated sooner, the initial term of this Lease (“Term”) shall be for
a period of fifty-seven (57) years, commencing on the date first above written
(“Commencement Date”) and expiring on the last day of December 31, 2057 (“Expiration
Date”) as extended to the Final Expiration Date or on such earlier date as this Lease
may be terminated as hereinafter provided.

	 	4.2.	 	Upon completion of Initial Lessee Improvements and issuance of a Certificate of
Occupancy or Conditional Certificate of Occupancy, whichever occurs first, the Term
shall be considered extended by an additional period equal to the time from the
Commencement Date until the issuance of the certificate and expiring after the
completion of such period (“Final Expiration Date”) or on such earlier date as this
Lease may be terminated as provided hereinafter but in no event shall the Final
Expiration Date be later than the last day of December 31, 2059.

	5.	 	ANNUAL RENTAL, ONE TIME PAYMENTS, OTHER OBLIGATIONS TO LESSOR

	 	5.1.	 	All payments due to Lessor under the terms of this Lease shall be payable at:

	 
	 	 	 	Regional Director, Pacific West Region

U.S. Department of the Interior

National Park Service

600 Harrison Street, Suite 600

San Francisco, California 94107

or at such other place or places as Lessor may designate in writing from time to time.

	 	5.2.	 	Lease Year

	 
	 	 	 	The term “Lease Year,” is hereby defined as follows:

	 	5.2.1.	 	The first Lease Year shall commence upon issuance of a Certificate of
Occupancy or Conditional Certificate of Occupancy, whichever occurs first,
and shall end on December 31 of that calendar year.
	 
	 	5.2.2.	 	Each subsequent Lease Year shall be a calendar year and shall commence on
the January 1 following the expiration of the preceding Lease Year, and shall
end on the December 31 thereafter, or on the last day of the Term, whichever
occurs first.

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	 	5.3.	 	One-Time Payments and Allowance

	 	5.3.1.	 	As partial consideration for this Lease, Lessee shall pay to Lessor on the
date that this Lease is first executed by the Lessor, in lawful money of the
United States of America, without deduction or offset, the amount of One
Hundred Thousand Dollars ($100,000).
	 
	 	5.3.2.	 	As partial consideration for this Lease, and in accordance with the
Schedule of Performance, Lessee shall pay to Lessor or its designee, in
lawful money of the United States of America, without deduction or offset,
the amount of One Million Nine Hundred Thousand Dollars ($1,900,000).
	 
	 	5.3.3.	 	As partial consideration for this Lease, and in accordance with the
Schedule of Performance, Lessee shall establish and manage a “Capital
Account” and shall deposit the amount of Five Hundred Forty Thousand Dollars
($540,000) in lawful money of the United States of America, into such Capital
Account. The funds in such Capital Account, including interest earned
thereon (the “Allowance”), shall be used by Lessee solely for construction of
the Retained Space in accordance with the terms and conditions of this Lease.

	 	5.4.	 	Annual Rental

	 
	 	 	 	In addition to all other amounts and charges due under this Lease, Lessee shall
and hereby agrees to pay to Lessor each Lease Year, in lawful money of the United
States of America, without deduction or offset except as provided for in Section
33.7 below, an absolute net annual rental (“Annual Rental”), which rental shall be
the sum total amount of the following: Base Rental including the CPI adjustment
applicable and Percentage Rental and other charges due hereunder.

	 	5.5.	 	Base Rental
	 
	 	 	 	In addition to all other amounts and charges due under this Lease, Lessee shall
and hereby agrees to pay to Lessor each Lease Year, beginning with the first day
following issuance of the Certificate of Occupancy or of a Conditional Certificate
of Occupancy, whichever occurs first, as part of the Annual Rental a Base Rental
(“Base Rental”) in the initial amount of One Million Dollars ($1,000,000) payable
in equal monthly installments, of Eighty-Three Thousand Three Hundred and
Thirty-Three Dollars and Thirty-Three cents ($83,333.33).

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	 	5.5.1.	 	Adjustments to Base Rental
	 
	 	 	 	The Base Rental shall be subject to adjustment according to
Sections 5.5.1.1 and 5.5.1.2 of this Lease. In no case shall the
Base Rental, as a result of an adjustment be less than the Base
Rental in effect immediately prior to such adjustment.

	 	5.5.1.1.	 	Adjustment Schedule
	 
	 	 	 	CPI adjustments to the Base Rental shall be made
every five (5) years during the Term with the
first such adjustment to be made effective on the
first day following the fifth anniversary of the
issuance of the Certificate of Occupancy or
Conditional Certificate of Occupancy, whichever
occurs first. Such CPI adjustments as may be
applicable for a partial month shall be remitted
with the first full monthly payment due at the
adjusted amount.
	 
	 	5.5.1.2.	 	CPI Adjustments

	 	5.5.1.2.1.	 	The initial base for computing the CPI
adjustment is the CPI published most
immediately preceding the Commencement Date
(“Beginning Index”). The CPI published most
immediately proceeding the Adjustment Date in
question (“Adjustment Index”) is to be used
in determining the amount of the adjustment.
If the Adjustment Index has increased over
the Beginning Index, the Base Rental shall be
set by multiplying the then-current Base
Rental by a fraction, the numerator of which
is the Adjustment Index and the denominator
of which is the Beginning Index.
	 
	 	5.5.1.2.2.	 	If the CPI is changed so that the base
year differs from that in

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	 	 	 	effect when the Term
commences, the CPI shall be converted
in accordance with the conversion
factor published by the United States
Department of Labor, Bureau of Labor
Statistics. If the CPI is
discontinued or revised during the
Term, such other government index or
computation with which it is replaced
shall be used in order to obtain
substantially the same result as would
be obtained if the CPI had not been
discontinued or revised.
	 
	 	5.5.1.2.3.	 	Notwithstanding the foregoing, any
increase in Base Rental shall not exceed
twenty percent (20%) of the initial annual
Base Rental.

	 	5.5.2.	 	Upon the determination of the new Base Rental, pursuant to CPI adjustments
as set forth in this Lease, Lessor shall notify Lessee of such new Base
Rental and such notification shall constitute an amendment to this Lease, as
if such amendment were duly executed by the Parties.
	 
	 	5.5.3.	 	Base Rental shall be payable in twelve (12) equal monthly installments
during each Lease Year, monthly in advance, on the first day of each calendar
month, without offset or deduction, commencing on the first day following the
issuance of the Certificate of Occupancy or Conditional Certificate of
Occupancy, whichever occurs first. Should any Lease Year contain fewer than
three hundred sixty-five (365) days or more than three hundred sixty-six
(366) days, then the Base Rental for said Lease Year shall be computed on a
daily basis at an amount equal to one/three-hundred-sixty-fifths (1/365) of
the Base Rental, and paid monthly in advance, with any fractional calendar
month paid at the beginning of the succeeding full calendar month.

	 	5.6.	 	Percentage Rental

	 	5.6.1.	 	In addition to all other amounts and charges due under this Lease, Lessee
shall and hereby agrees to pay to Lessor

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	 	 	 	as part of the Annual Rental a percentage rental (“Percentage Rental”) for the Premises, the Office Space,
the Retail Space and the Restaurant Space for each Lease Year as
follows:

	 	5.6.1.1.	 	For the purposes of calculating Percentage Rental, Gross
Receipts will be allocated into two categories in a manner
consistent with the Uniform System. Percentage Rental
Exclusions will be allowed. Percentage Rental will be
determined based on the varying percentages allocated to the
two categories. The categories are (a) Rooms Department
Revenues, and (b) Food and Beverage and All Other Department
Revenues. All Gross Receipts from the Premises excluding
Rooms Department Revenues shall be included in Food and
Beverage and All Other Department Revenues.
	 
	 	5.6.1.2.	 	Percentage Rental for Lease Years 1 to 5 is calculated as
follows: (a) the sum of (i) a base amount equal to six
percent (6%) of Rooms Department Revenues up to $13,563,200
(in 2000 dollars), plus (ii) four percent (4%) of Food and
Beverage and All Other Department Revenues, plus (iii) eight
percent (8%) of Rooms Department Revenues between $13,563.200
and $17,360,875 (in 2000 dollars), plus (iv) ten percent (10%)
of Rooms Department Revenues over $17,360,875 (in 2000
dollars), minus (b) the amount of Base Rental payable by
Lessee in any such Lease Year.
	 
	 	5.6.1.3.	 	Percentage Rental for Lease Years 6 to 38 is calculated as
follows: (a) the sum of (i) a base amount equal to eight
percent (8%) of Rooms Department Revenues up to $13,563,200
(in 2000 dollars), plus (ii) four percent (4%) of Food and
Beverage and All Other Department Revenues, plus (iii) ten
percent (10%) of Rooms Department

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	 	 	 	Revenues between $13,563,200
and $17,360,875 (in 2000 dollars), plus (iv) twelve percent
(12%) of Rooms Department Revenues over $17,360,875 (in 2000
dollars), minus (b) the amount of Base Rental
payable by Lessee in any such Lease Year.
	 
	 	5.6.1.4.	 	Percentage Rental for Lease Years 39 to 48 is calculated
as follows: (a) the sum of (i) a base amount equal to ten
percent (10%) of Rooms Department Revenues up to $17,360,875
(in 2000 dollars), plus (ii) four percent (4%) of Food and
Beverage and All Other Department Revenues, plus (iii) twelve
percent (12%) of Rooms Department Revenues over $17,360,875
(in 2000 dollars), minus (b) the amount of Base Rental payable
by Lessee in any such Lease Year.

	 	5.6.1.5.	 	Percentage Rental for Lease Years 49 through the end of
the Term is calculated as follows: (a) the sum of (i) a base
amount equal to twelve percent (12%) of Rooms Department
Revenues up to $17,360,875 (in 2000 dollars), plus (ii) four
percent (4%) of Food and Beverage and All Other Department
Revenues, plus (iii) fourteen percent (14%) of Rooms
Department Revenues in excess of $17,360,875 (in 2000
dollars), minus (b) the amount of Base Rental payable by
Lessee in any such Lease Year.

	 	5.6.1.6.	 	The Rooms Department Revenues under Sections 5.6.1.2
through 5.6.1.5 of this Lease will be indexed to the CPI each
year on the anniversary of the issuance of the Certificate of
Occupancy or Conditional Certificate of Occupancy, whichever
occurs first, and in the manner described in Sections 5.5.1.1
and 5.5.1.2 of this Lease.

	 	5.6.2.	 	Although the Percentage Rental due shall be reconciled by calculation on a
yearly basis, the Percentage Rental shall

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	 	 	 	be payable in four (4) quarterly
installments during each Lease Year, in arrears, due on the tenth (10th) day
of April, July, October, and January, without offset or deduction except as
provided for in Section 33.7 below, and with the first payment due on the
tenth (10th) day of the first applicable quarter following the issuance of the
Certificate of Occupancy or Conditional Certificate of Occupancy,
whichever occurs first. Percentage Rental shall be calculated for
quarterly payment based on the cumulative annual Gross Receipts
for the applicable Lease Year. The total of such quarterly
payments shall be adjusted at the end of each Lease Year as
provided in Section 5.6.4 of this Lease.

	 	5.6.3.	 	Within thirty (30) days after the end of each calendar quarter, Lessee
shall furnish to Lessor a statement of Gross Receipts for each month of that
calendar quarter. Each quarterly statement shall be signed and certified to
be correct by Lessee or its authorized representative.

	 	5.6.4.	 	At the end of each Lease Year, Lessee shall furnish to Lessor, in
accordance with Section 7.2 of this Lease, the Annual Report, which report
shall contain a certified report of Gross Receipts for such Lease Year.
Promptly after Lessee’s submission of such Annual Report, the Parties shall
make any adjustment necessitated by any deficiencies or overpayment in the
monthly payments. If Lessee has not paid Lessor a sufficient Percentage
Rental for the Lease Year, then Lessee shall pay any deficiency at the time
of submittal of the Annual Report. If Lessee’s payments for the preceding
Lease Year exceed the amount actually due to Lessor, the amount of the
overpayment shall be credited to the next installment of Percentage Rental or
other amounts next due under this Lease.

	 	5.7.	 	Late Charges
	 
	 	 	 	Any unpaid Annual Rental or other amounts due from Lessee to Lessor shall bear
interest from the date ten (10) days after the date due until paid at the Interest
Rate. In addition, Lessee recognizes that late payment of any portion of the
Annual Rental will result in administrative expense to Lessor, the extent of which
expense is difficult and economically impracticable to ascertain. Lessee
therefore agrees that if any payment of Annual Rental shall be overdue for ten
(10) days beyond the date on which it is due and payable as provided in this
Lease, an

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	 	 	 	additional late charge of five percent (5%) of the sums so overdue shall
become immediately due and payable. Lessee agrees that such amount is a
reasonable estimate of the expense to be suffered by Lessor as a result of such
late payment by Lessee and may be charged by Lessor to defray such expense. In
the event of nonpayment of interest or late charges on overdue Annual Rental,
Lessor shall have, in addition to all
other rights and remedies, the rights and remedies provided in this Lease and by
Applicable Laws for nonpayment of rent.

	 	5.8.	 	Lease not a Concession Authorization
	 
	 	 	 	This Lease encompasses all amounts due to Lessor for the rights to use the
Premises and to conduct the operations authorized by this Lease. This Lease is
not a concession contract and neither authorizes services for Park concession
purposes nor requires concession-related payments or fees.

	6.	 	IMPOSITIONS

	 	6.1.	 	Lessee’s Obligation for Impositions

	 	6.1.1.	 	In addition to Annual Rental and all other amounts and charges due under
this Lease, Lessee covenants and agrees to bear, discharge and pay to the
relevant Agency, in lawful money of the United States, without offset or
deduction, as the same become due, before delinquency, all Impositions that
may be assessed, levied, confirmed, imposed or become a lien upon the
Premises or any part thereof that become payable from and after the
Commencement Date until the later of (a) last day of the Term hereof, or (b)
the last day Lessee has possession of the Premises.

	 	6.1.2.	 	In addition, it shall be Lessee’s sole responsibility to apply for and
prosecute any exemption from any Impositions that may be imposed from and
after the Commencement Date, which Lessee shall pay if necessary and which
shall be at no expense to Lessor. However, Lessor agrees to cooperate with
Lessee’s reasonable requests to assist in any such application for exemption.

	 	6.2.	 	Receipts
	 
	 	 	 	Lessee shall obtain and deliver to Lessor receipts or duplicate receipts or other
satisfactory evidence of payment for all Impositions required to be paid by
Lessee, promptly upon payment thereof in the case of any

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	 	 	 	Impositions for which a
failure to pay may result in a lien upon the Premises, and, in all other cases,
upon request of Lessor.

	7.	 	AUDIT AND RECORDS

	 	7.1.	 	Books and Records
	 
	 	 	 	Lessee shall keep, or cause to be kept, true, accurate and complete records and
double-entry books in accordance with generally accepted accounting principles,
consistently applied, from which Lessor at all times can determine the nature and
amounts of Gross Receipts, Rooms Department Revenues, Food and Beverage and All
Other Department Revenues, Percentage Rental Exclusions by item, and Rent Roll.
Without limitation of the foregoing, such records shall show all transactions
relative to the conduct and production of Gross Receipts and the Rent Roll and
such transactions shall be supported by documents of original entry. Lessee shall
keep and make available to Lessor at all reasonable times, upon advance notice and
during normal business hours, said books of account and records at a location
within the limits of the City and County of San Francisco, California or at the
Premises, for a period of five (5) years after the Lease Year to which they relate
and thereafter in the event of litigation concerning the same until such
litigation terminates in final judgment. Any such inspection shall be scheduled
as soon as possible upon the request of Lessor during normal business hours at a
mutually acceptable time and shall be undertaken so as to minimize, to the extent
reasonably possible, any interference with the conduct of Lessee’s business. If
at any time during the Term, said books, records and accounts prove inadequate to
record Gross Receipts and the Rent Roll or provide other information in the detail
required under this Lease, Lessee shall, upon the request of Lessor, procure and
maintain such books, records and accounts as shall be of a character and form
adequate for said purpose.

	 	7.2.	 	Annual Financial Report
	 
	 	 	 	Lessee shall, at Lessee’s sole cost and expense, prepare or cause to be prepared
and furnished to Lessor an Annual Report within ninety (90) days of the end of
each Lease Year.

	 	7.3.	 	Lessor’s Audit

	 	7.3.1.	 	Upon prior notice and during normal business hours, Lessee shall provide
Lessor access to those records relating to the Premises and Lessee’s use and
occupancy of the Premises under this Lease that are necessary for the purpose
of conducting an audit of such records to

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	 	 	 	verify the calculation and payment
of Percentage Rental for any of the three (3) preceding Lease Years.

	 	7.3.2.	 	If it shall be determined by Lessor as a result of such audit that there
has been a deficiency in the payment of any Percentage Rental for any Lease
Year, then such deficiency shall become immediately due and payable and shall
bear interest at the Interest Rate from the date the payment should have been made until paid. If such audit
determines that there has been an overpayment of any rentals, such
overpayment shall be credited against the next rents and charges
due to Lessor under this Lease.

	 	7.3.3.	 	If Lessee disputes the findings of the audit conducted by Lessor or if the
amount of deficiency is estimated by Lessor to be greater than five percent
(5%) of the amount due, then, at the requirement of the Lessor, upon prior
notice and during normal business hours, Lessee shall provide Lessor access
to those records relating to the Premises and Lessee’s use and occupancy of
the Premises under this Lease that are necessary for the purpose of
conducting an audit of such records by an independent certified public
accountant to verify the calculation and payment of Percentage Rental for any
of the three (3) preceding Lease Years. The accountant shall consult with
both parties during the audit process.

	 	7.3.4.	 	If it shall be determined as a result of such audit that there has been a
deficiency in the payment of any Percentage Rental for any Lease Year, then
such deficiency shall become immediately due and payable and shall bear
interest at the Interest Rate from the date the payment should have been made
until paid. If such audit determines that there has been an overpayment of
any rentals, such overpayment shall be credited against the next rents and
charges due to Lessor under this Lease.

	 	7.3.5.	 	Should Lessor conduct an audit by an independent certified public
accountant for the purposes of Section 7.3.3 above then Lessee shall
reimburse Lessor in full for Lessor’s reasonable out of pocket payments for
the audit by the independent certified public accountant if Lessee is found
to owe additional sums to Lessor.

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	 	7.4.	 	Access to Records

The Secretary of the Department of Interior and Comptroller General of the United States, or any of
their duly authorized representatives, shall at any time up until the expiration of five (5)
calendar years after the expiration of this Lease, have access to and the right to examine any of
the Lessee’s pertinent books, documents, papers, and records, and such documents of any entity or
person related to this Lease that are necessary to perform an audit and to verify Lessee’s
compliance with the terms and conditions of this Lease.

	8.	 	NET LEASE; NO COUNTERCLAIM OR ABATEMENT

	 	8.1.	 	All amounts and charges due to Lessor under this Lease shall be absolutely net
to Lessor and shall be paid without assertion of any counterclaim, offset, deduction or
defense and without abatement, suspension, deferment or reduction except as provided
for in Section 33.7 below. Under no circumstances or conditions, whether now existing
or hereafter arising, and whether or not beyond the present contemplation of the
Parties, shall Lessor be expected or required to make any payment of any kind
whatsoever with respect to the Premises or be under any obligation or liability except
as expressly set forth in this Lease.

	 	8.2.	 	Except as otherwise expressly provided in this Lease, this Lease shall continue
in full force and effect, and the obligations of Lessee under this Lease shall not be
released, discharged or otherwise affected, by reason of: (a) any damage to or
destruction of the Premises or any part thereof or any improvements thereon; (b) any
restriction or prevention of or interference with any use of the Premises or the
improvements or any part thereof; (c) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other proceeding relating to
Lessor, Lessee or any constituent partner of Lessee or any sublessee or assignee or any
action taken with respect to this Lease by a trustee or receiver, or by any court, in
any proceeding; (d) any claim that Lessee or any other person has or might have against
Lessor; (e) any failure on the part of Lessor to perform or comply with any of the
terms, agreements, covenants, conditions and provisions in this Lease or of any other
agreement with Lessee or any other person; (f) any failure on the part of any
sublessee, Transferee, or other person to perform or comply with any of the terms of
any sublease or other agreement between Lessee and any such person; or (g) any
termination of any sublease or other agreement, whether voluntary or by operation of
law.

	 	8.3.	 	The obligations of Lessee under this Lease shall be separate and independent
covenants and agreements except as otherwise expressly

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	 	 	 	stated in this Lease. Lessee
hereby waives, to the full extent permitted by Applicable Laws, all rights now or
hereafter conferred by such Applicable Laws, to quit, terminate or surrender this Lease
or the Premises or any part thereof, or to any abatement, suspension, deferment,
diminution in or reduction of any monetary payments payable to Lessor under this Lease.

	9.	 	LESSOR NOT OBLIGATED TO PAY LESSEE EXPENSES

Lessor is not obligated by the terms of this Lease and does not agree to pay any expense or debt
related to the obligations undertaken by or the operations conducted by the Lessee under the terms
of this Lease. No provision of this Lease is intended to create such an obligation or agreement.

	10.	 	USE OF THE PREMISES

	 	10.1.	 	Use of the Premises

	 	10.1.1.	 	During the Due Diligence Period, Lessee may use the Premises solely in the
manner permitted in Section 3.2 of this Lease. Thereafter, provided Lessee has
not terminated this Lease pursuant to Section 3.2 above, Lessee may use the
Premises for the construction and operation of a hotel meeting the Hotel
Standard, including guest rooms, reception and lobby areas, and uses
customarily related to, or in connection with, providing hotel guests and
invitees services such as storage, back of the house, health club, food and
beverage services, conference space, and offices.

	 	10.1.2.	 	Following the termination of the Due Diligence Period and provided Lessee
has not terminated this Lease pursuant to Section 3.2 of this Lease, Lessee may
use the Office Space for office uses and the Retail Space for retail uses.
Such office uses and retail uses (including interior and exterior displays of
merchandise and related signage) shall be commensurate with the operation of a
hotel at the Hotel Standard.

	 	10.1.3.	 	Following the termination of the Due Diligence Period and provided Lessee
has not terminated this Lease pursuant to Section 3.2 of this Lease, Lessee may
operate a restaurant and bar in the Restaurant Space commensurate with the
operation of a restaurant and bar at the Hotel Standard.

	 	10.1.4.	 	Lessee may amend or change the authorized uses for the Premises subject to
the prior written approval of Lessor

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	 	 	 	which approval or disapproval shall not be
unreasonably withheld or delayed. Proposed changes of use of the Premises
shall be approved unless Lessor determines, in the reasonable exercise of its
discretion, such use to be inconsistent with Applicable Laws or with the
objectives of the Lease including the potential for income to the Lessor.

	 	10.1.5.	 	The Parties hereby acknowledge and agree that Lessee’s covenant that the
Premises shall be used as set forth in this Section 10 is material
consideration for Lessor’s agreement to enter into this Lease.

	 	10.1.6.	 	Without limitation of the foregoing, or any other provision of this Lease,
in no event shall the Premises be used for any purpose that is in violation of
any Applicable Laws; that may
be dangerous to life, limb, property or public health; that in any
manner causes, creates, or results in a nuisance; that is of a nature
that it involves substantial hazard, such as the manufacture or use
of explosives, chemicals or products that may explode, or that
otherwise harms the health or welfare of persons in the physical
environment; or that results in any discharge of Hazardous Materials
on the Premises in violation of Section 22 of this Lease, including
but not limited to the disposing or discharging of such substances
into, on or under the Premises.

	 	10.2.	 	Operation of the Premises after Completion

	 	10.2.1.	 	Lessee covenants that, upon completion of construction of Initial Lessee
Improvements in accordance with the terms of this Lease, Lessee shall through
the entire Term continuously and uninterruptedly operate the Premises as set
forth in this Section 10 provided, however, that Lessee’s obligations to
operate the Premises under this Section 10.2 shall be suspended during any
period of Alterations, Preservation Maintenance, remediation of Hazardous
Materials undertaken by Lessee pursuant to this Lease, and during periods of
modification of sub-leased space for tenant use, all of the foregoing limited,
however, to the portion of the Premises actually affected thereby and for such
time as is reasonably required for such Alterations, Preservation Maintenance,
remediation of Hazardous Materials undertaken by Lessee pursuant to this Lease,
and modification of sub-leased space for tenant use and provided that Lessee
complies with all other obligations under this Lease.

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	 	10.2.2.	 	Further, Lessee’s obligation of continuous operation under this Section
10.2 shall also be suspended to the extent reasonably necessary during a
transition in connection with a Transfer that has been approved by Lessor
pursuant to Section 27 of this Lease, a change in the Approved Operator, or
where such continuous operation is otherwise prevented by Force Majeure. All
of the foregoing are limited to such time as reasonably required to promptly
complete the necessary transition or change of Approved Operator or to
resolve issues reasonably beyond Lessee’s control and are conditioned upon
Lessee’s compliance with all other obligations under this Lease, including
without limitation, payment of Annual Rental and any other costs and expenses
to Lessor.

	11.	 	LIMITATION ON EFFECT OF APPROVALS

All rights of Lessor to review, comment upon, approve, inspect or take any other action with
respect to the Premises or the Retained Space, Initial Lessee Improvements, Building Maintenance,
Preservation Maintenance or Alterations, or the design or construction thereof or the removal of
and/or remediation of any Hazardous Materials, or any other matter, are expressly for the benefit
of Lessor and no other party. No review, comment, approval, inspection, right or exercise of any
right to perform Lessee’s obligations, or similar actions required or permitted by, of, or to
Lessor under this Lease, or actions or omissions of Lessor’s employees or agents, or other
circumstances shall give or be deemed to give Lessor any liability, responsibility or obligation
for, in connection with, or with respect to, the design and construction of Initial Lessee
Improvements or Alterations, Preservation Maintenance, Building Maintenance, or operation of the
Premises or the removal and/or remediation of any Hazardous Materials on, in or from the Premises
or other Park property by Lessee, nor shall any such approval, actions, information or
circumstances relieve or be deemed to relieve Lessee of the sole obligation and responsibility for
the design and construction of Initial Lessee Improvements and Alterations, Preservation
Maintenance, Building Maintenance, and operation of the Premises and the removal and/or remediation
of Hazardous Materials required under this Lease, if any, except as expressly provided in Section
22.7 of this Lease.

	12.	 	CONSTRUCTION AND INSTALLATION APPROVAL

	 	12.1.	 	Lessee shall not undertake any construction of Initial Lessee Improvements,
Retained Space (exterior and interior), Alterations (other than Minor Alterations),
Preservation Maintenance, or the installation of any equipment, Fixtures, Trade
Fixtures or other facilities on the Premises (including temporary equipment or
facilities) necessary for such Initial Lessee Improvements, Alterations (other than
Minor Alterations), or Preservation Maintenance without the prior written

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	 	 	 	approval of Lessor which approval shall not be unreasonably withheld or delayed. Construction of
the Initial Lessee Improvements shall be undertaken in accordance with the Schedule of
Performance and the terms and conditions of this Lease.

	 	12.2.	 	Lessor acknowledges that as of the Commencement Date, the City and County of
San Francisco does not have jurisdiction to enforce its building codes at the Premises
because the Premises are owned by the Federal government and used for a Federal
function. However, Lessor desires that all Design and Construction Documents meet the
locally applicable standards, whether set by national or local codes.

	 	12.3.	 	As part of the process of obtaining approval in accordance with Section 12.1
of this Lease, Lessee, at Lessee’s sole cost and expense, shall submit to Lessor (a)
Design and Construction Documents for approval by Lessor, (b) a proposal for plan and
construction review to meet the objectives of Section 13.2 below, (c) evidence of availability of financing for
such construction, (d) evidence of insurance required pursuant to Section 23 of
this Lease, and (e) other relevant data as may be reasonably required by Lessor.
All material proposed changes or modifications to the approved plan of Initial
Lessee Improvements, Preservation Maintenance or Alterations (other than Minor
Alterations) must be approved by Lessor, which approval shall not be unreasonably
withheld or delayed.

	13.	 	DESIGN OF LESSEE IMPROVEMENTS, ALTERATIONS AND PRESERVATION MAINTENANCE

	 	13.1.	 	Standards

	 	13.1.1.	 	The Secretary of Interior’s Standards acknowledge four distinct but
interrelated treatment approaches to protecting historic resources. Those
approaches include preservation, Rehabilitation, Restoration and
Reconstruction. The treatment approach that has been selected for the Premises
is one of Rehabilitation as to the Initial Lessee Improvements. Lessee shall
design Initial Lessee Improvements and the Retained Space in accordance with
Applicable Laws and sound professional design practice for Rehabilitation of an
historic property listed on the National Register of Historic Places, and in
accordance with the requirements of this Lease and substantially in accordance
with the preliminary schematic plans and documentation attached as Exhibit H,
as may be modified in accordance with Lessee’s final Design and Construction
Documents for the Initial Lessee Improvements as approved in writing by

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	 	 	 	Lessor. In addition, Lessee shall design and construct the interior of the Retained
Space in accordance with the General Management Plan and in accordance with the
recommendations of a designer and/or an architect specializing in visitor
center and museum exhibit design approved by Lessor.

	 	13.1.2.	 	Lessee shall design Alterations and Preservation Maintenance in accordance
with Applicable Laws and sound professional design practice for Rehabilitation
of an historic property listed on the National Register of Historic Places, and
in accordance with the requirements of this Lease.

	 	13.2.	 	Design and Construction Monitor
	 
	 	 	 	The Design and Construction Monitor shall review Design and Construction Documents
as they are developed and in their final form
and certify in writing to Lessor that such Design and Construction Documents
conform with the California Building Standards Code and local variations adopted
by the City and County of San Francisco and are in compliance with all Applicable
Laws, sound professional design practice for the type of project, and with the
requirements of this Lease. The Design and Construction Monitor will monitor all
construction of Initial Lessee Improvements, Alterations (other than Minor
Alterations) and Preservation Maintenance on site as it proceeds and will certify
in writing to Lessor that approved Design and Construction Documents and sound
building practices are followed, that only acceptable changes in approved Design
and Construction Documents in accordance with the requirements of or as otherwise
permitted by this Lease are made, and that each such change is documented in
“as-built” drawings required to be submitted to Lessor by the terms of this Lease.

	 	13.3.	 	Design and Construction Documents

	 	13.3.1.	 	All Design and Construction Documents shall be subject to the prior
written approval of Lessor which approval shall not be unreasonably withheld
or delayed.

	 	13.3.2.	 	All Design and Construction Documents shall be prepared in accordance with
standards and submittal requirements set forth in DO-10A, Guideline for
Design and Construction Drawings, as may be modified from time to time by
Lessor.

	 	13.3.3.	 	In the preparation of Design and Construction Documents, Lessee shall
review utility plans for the location of existing utilities that may be
damaged by Lessee’s construction on

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	 	 	 	the Premises and shall prevent such
damage during the construction process and shall promptly repair any damage
that does occur. All existing “as-built” utility plans will be furnished by
Lessor showing the locations of all Lessor utilities in the relevant areas.
Lessee shall obtain all other necessary utility plans from the appropriate
public utility companies.

	 	13.4.	 	Construction of Retained Space

	 	13.4.1.	 	Retained Space — Building Shell
	 
	 	 	 	Construction of the Retained Space shall be undertaken in
accordance with the Schedule of Performance and the terms and
conditions of this Lease. In addition to the requirements of
Sections 12 and 13 above, as part of Initial Lessee Improvements
and at no cost or expense to Lessor, Lessee shall construct the
building shell of the Retained Space, for use by the Lessor without charge. Such
building shell construction shall consist of lead-based paint and
asbestos remediation, abatement or removal, if necessary, a new
concrete floor, brick wall Preservation Maintenance, timber beams
and columns Preservation Maintenance (subject to Section 13.5
below), ceiling joists Preservation Maintenance, a demising wall
partially of glass and with a connecting doorway to the Premises,
electrical, plumbing, mechanical HVAC base amounts installed within
the Utility Easements Areas up to the Retained Space in accordance
with Lessor’s requirements, as submitted to Lessee pursuant to
Section 2.3.2 of this Lease, seismic strengthening and similar
items all to be completed at the same time as, in the same manner
as, and within the process and following the requirements for
Initial Lessee Improvements for such work in the Premises. Lessee
shall continuously maintain and provide such improvements (other
than Lessor’s utilities located within the Utility Areas) during
the Term and in accordance with the requirements for Building
Maintenance and Preservation Maintenance of the Premises included
in this Lease. No part of the Allowance shall be used for
completion of the work required under this Section 13.4.1.

	 	13.4.2.	 	Retained Space — Restrooms, Drinking Fountains
	 
	 	 	 	Lessee, at its cost and expense, shall construct and install the
finished restrooms and drinking fountains within and for

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	 	 	 	the Retained Space, for use by the Lessor, its employees, guests,
visitors, invitees, sublessees, licensees, and permittees and other
persons or entities in connection with the Retained Space. No part
of the Allowance shall be used for completion of the work required
under this Section 13.4.2. Such work shall include public men’s
and women’s restrooms and drinking fountains, as well as an
employee restroom and drinking fountain; the number of fixtures
shall comply with applicable building codes. Lessor’s preferred
number of fixtures is listed on Exhibit J. The design and location
within the Retained Space of the restrooms and drinking fountains
shall be as determined by Lessor and subject to Lessor’s prior
written approval, which approval shall not be unreasonably withheld
or delayed. Lessee shall perform such work in compliance with
Applicable Laws.

	 	13.4.3.	 	Retained Space — Other Interior
	 
	 	 	 	Improvements to the interior of the Retained Space are separate
from the building shell work described in Section 13.4.1 above and
shall be paid for by application of the Allowance pursuant to
Section 2.3.2 of this Lease.

	 	13.5.	 	Wooden Posts
	 
	 	 	 	Lessee shall minimize damage to any wooden posts holding up the floor areas of the
Premises and Retained Space which require removal as part of the construction
pursuant to this Lease and shall provide any wooden posts or other historic
elements or materials which are removed and not otherwise needed for Preservation
Maintenance of the Premises or Retained Space to the Superintendent of San
Francisco Maritime National Historical Park or his or her designee.

	 	13.6.	 	Copy of Contracts
	 
	 	 	 	Lessee shall, upon request, furnish Lessor with a true and correct copy of
Lessee’s contracts with any architect, engineer, and any general contractor
engaged in connection with this Lease for design and construction of any Initial
Lessee Improvements, Alterations (other than Minor Alterations) or Preservation
Maintenance.

	14.	 	SUBMISSION OF EVIDENCE OF FINANCING; CLOSING OF FINANCING

	 	14.1.	 	Prior to undertaking Initial Lessee Improvements, Preservation Maintenance or
Major Alterations, Lessee shall submit to Lessor

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	 	 	 	evidence satisfactory to Lessor that
Lessee has a firm and binding commitment for any financing necessary for the
construction of Initial Lessee Improvements, or Major Alterations, or any other
maintenance or improvements the construction cost of which is greater than Five Million
Dollars ($5,000,000) adjusted by the CPI since the Commencement Date to the year in
which the construction begins, and the necessary Fixtures and Personal Property
(“Financing Commitment”). Lessor shall approve the Financing Commitment upon
satisfactory assurance that funds are available to complete the project to be
undertaken. Lessor shall have the right to approve or disapprove the proposed lender
thereunder if the proposed lender is to be other than a Bona Fide Institutional Lender.
The requirement for a firm and binding commitment hereunder shall not preclude Lessee
from submitting to Lessor preliminary finance documentation for Lessor’s review and
comment.

	 	14.1.1.	 	Any material conditions to the obligations of the Leasehold Mortgagee to
fund the loan including, but not limited to, approval of title exceptions,
the Premises, any survey, this Lease, and all Design and Construction
Documents, shall be identified at the time of submittal to Lessor, in writing, and
shall be subject to the prior written approval of Lessor.

	 	14.1.2.	 	Lessor’s approval of such Financing Commitment shall not be unreasonably
withheld or delayed. If the source of funds is a Bona Fide Institutional
Lender, such source shall be considered to be a pre-approved Leasehold
Mortgagee.

	 	14.1.3.	 	If Lessor shall disapprove the Financing Commitment or the lender
thereunder, Lessor shall do so promptly by written notice to Lessee stating
the specific reasons for such disapproval. Lessee shall promptly obtain and
submit to Lessor a new Financing Commitment. Lessor shall approve or
disapprove any new Financing Commitment and the lender thereunder in the same
manner.

	 	14.1.4.	 	At the time of any request by Lessee to Lessor for approval of any
Financing Commitment, Lessee shall also represent to Lessor in writing the
amount of any equity financing to be used in the project and the source of
those funds, and will provide satisfactory evidence that those equity funds
are available for commitment to the purposes of this Lease.

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	 	14.2.	 	Prior to the commencement of construction of Initial Lessee Improvements, or
Major Alterations, or any other maintenance or improvements the construction cost of
which is greater than Five Million Dollars ($5,000,000) adjusted by the CPI since the
Commencement Date to the year in which the construction begins, and after Lessor’s
approval of such construction as required by Section 12 of this Lease, Lessee shall
close its loan under the approved Financing Commitment so that the resulting
construction loan funds are available for such Initial Lessee Improvements, or Major
Alterations, or any other maintenance or improvements the construction cost of which is
greater than Five Million Dollars ($5,000,000) adjusted by CPI since the Commencement
Date to the year in which the construction begins. Lessee shall furnish Lessor with
satisfactory evidence that any loan funds combined with any equity funds Lessee shall
have available are available as required in this Lease and that such funds constitute
all of the funds necessary to complete the proposed Initial Lessee Improvements, or
Major Alterations, or any other maintenance or improvements the construction cost of
which is greater than Five Million Dollars ($5,000,000) adjusted by the CPI since the
Commencement Date to the year in which the construction begins.

	 	14.3.	 	Lessee shall deliver to Lessor true copies of all documents to evidence the
Financing Commitment or other arrangements to provide for payment for work undertaken
by Lessee. Such evidence shall be in a form and substance reasonably satisfactory to
Lessor. Lessee shall provide Lessor with drafts of the Financing Commitment thirty
(30) to sixty (60) days in advance of its approval by the lender, to the extent that
such drafts are available to Lessee and the principal terms and conditions have been
substantially agreed upon. Lessor shall use reasonable efforts to complete its review
and notify Lessee of such approval or of the grounds for any disapproval within thirty
(30) days from Lessor’s receipt of the final Financing Commitment and complete
documentation in support thereof, unless Lessee shall have provided Lessor with drafts
of the Financing Commitment thirty (30) to sixty (60) days in advance of the issuance
of the Financing Commitment by the lender, together with complete documentation in
support thereof, then Lessor shall use reasonable efforts to complete its review and
notify Lessee of such approval or of the grounds for any disapproval within ten (10)
business days from Lessor’s receipt of the final Financing Commitment.

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	15.	 	CONSTRUCTION OF IMPROVEMENTS AND ALTERATIONS AND PRESERVATION MAINTENANCE

	 	15.1.	 	Construction of Initial Lessee Improvements or Alterations

	 	15.1.1.	 	If granted permission to proceed pursuant to Sections 12, 13, and 14 of
this Lease, Lessee hereby agrees and covenants to commence and prosecute
diligently, at Lessee’s sole cost and expense, the construction of Initial
Lessee Improvements, Alterations (other than Minor Alterations) or
Preservation Maintenance in accordance with Design and Construction Documents
approved by Lessor, all in accordance this Section 15.
	 
	 	15.1.2.	 	It is a material part of the consideration to Lessor under this Lease that
Lessee commence construction of Initial Lessee Improvements in accordance
with the Schedule of Performance, that Lessee diligently pursue such
construction until completion; and that Lessee complete the construction of
Initial Lessee Improvements by no later than eighteen (18) months after the
commencement of construction.
	 
	 	15.1.3.	 	Notwithstanding the foregoing, Lessee shall not be in default under this
Section 15.1 in the event of an enforced delay in the performance of its
obligations under this Section 15.1 due to Force Majeure provided that Lessee
notifies Lessor in writing of the delay and of its reasonable estimate of the
length of the delay. The purpose and intent of this provision is that, in
the event of the occurrence of any such enforced delay, the time or times for
performance of Lessee shall be extended for the period of the enforced delay,
which period shall be determined by Lessor in the reasonable exercise of its
discretion.

	 	15.2.	 	All Initial Lessee Improvements, Alterations and/or Preservation Maintenance
shall be performed by knowledgeable parties trained and experienced in the work to be
done and all Initial Lessee Improvements and/or Alterations and/or Preservation
Maintenance which so require shall be performed by licensed contractors who meet
applicable California licensing, bonding and certification requirements.
	 
	 	15.3.	 	General Construction Requirements

	 	15.3.1.	 	All Initial Lessee Improvements, Alterations and Preservation Maintenance
shall be done at Lessee’s sole

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	 	 	 	cost and expense. All construction and work
shall be performed in a good and workmanlike manner. Lessee shall
construct Initial Lessee Improvements, Alterations and
Preservation Maintenance in accordance with all Applicable Laws,
the Hotel Standard and all approved Design and Construction
Documents and in accordance with this Section 15 and all other
terms, agreements, covenants, conditions and provisions of this
Lease. Lessee shall construct, install, and maintain equipment
and any construction facilities on the Premises in a safe,
thorough and reliable manner and in accordance with all Applicable
Laws.
	 
	 	15.3.2.	 	Lessee shall not construct any Initial Lessee Improvements, Alterations or
Preservation Maintenance outside the boundaries of the Premises and the
Retained Space.
	 
	 	15.3.3.	 	Any material change in approved Design and Construction Documents or any
material deviations in the actual construction of any Initial Lessee
Improvements or Alterations (other than Minor Alterations) from approved
design elements and all changes that affect Preservation Maintenance shall be
subject to Lessor’s prior written approval which approval shall not be
unreasonably withheld or delayed and which approval may be delegated in
writing by Lessor to the Design and Construction Monitor or to the person or
entity acting in that capacity. Lessor acknowledges that reasonable field
adjustments will be necessary to the approved plans to accommodate unforeseen
circumstances and that such changes may be made without specific approval of
the Lessor, and Lessee agrees that such changes will be non-structural in
nature, will not affect the Preservation Maintenance of the Premises or the
Retained Space and will be reviewed as otherwise may be required by this
Lease.
	 
	 	15.3.4.	 	Lessee shall prepare and maintain on the Premises on a current basis
during construction, approved annotated Design and Construction Documents
showing clearly all changes, revisions and substitutions during construction.

	 	15.4.	 	Construction Completion Procedures

	 	15.4.1.	 	Upon Substantial Completion of the construction of Initial Lessee
Improvements, Alterations or Preservation

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	 	 	 	Maintenance on the Premises or any
part thereof, Lessee shall submit to Lessor a notice of such completion.
	 
	 	15.4.2.	 	Upon completion of construction of Initial Lessee Improvements,
Alterations or Preservation Maintenance, Lessee shall deliver to Lessor
evidence, satisfactory to Lessor, of payment of all costs, expenses,
liabilities and liens arising out of or in any way connected with such
construction (except for liens that are contested in the manner provided in
this Lease).
	 
	 	15.4.3.	 	On completion of the construction of Initial Lessee Improvements, Major
Alterations or Preservation Maintenance, Lessee shall provide to Lessor a
complete set of “as-built” drawings showing clearly all changes, revisions
and substitutions during construction, including, without limitation, field
changes and the final location of all mechanical equipment, utility lines,
ducts, outlets, structural members, walls, partitions and other significant
features of Initial Lessee Improvements, Major Alterations or Preservation
Maintenance, all in a format approved by Lessor.
	 
	 	15.4.4.	 	On completion of construction of Initial Lessee Improvements, Lessee shall
provide Lessor with a complete written inventory of all Fixtures which
inventory shall be subject to Lessor’s approval. In addition, Lessee shall
provide Lessor with a written, updated list of such Fixtures at the time of
completion of any Major Alterations or Preservation Maintenance.
	 
	 	15.4.5.	 	Lessor will issue a Certificate of Occupancy after Substantial Completion
of Initial Lessee Improvements or Major Alterations subject to “punch-list”
items and upon final review to its reasonable satisfaction of the
certifications required of the Design and Construction Monitor pursuant to
Section 13.2 of this Lease and of applicable construction documents,
including all tests, inspections, progress reports, and other pertinent
documents customarily required by the jurisdiction in which the Premises is
located for the issuance of such a document. Lessor and Lessee shall
coordinate and consult on final issues in advance of the completion of
construction to enable Lessor to promptly issue the Certificate of Occupancy.

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	 	15.4.6.	 	Lessor may issue a Conditional Certificate of Occupancy at the request of
the Lessee and when construction of Initial Lessee Improvements or Major
Alterations is completed to the point that Lessee can commence pre-opening operations without threat to life or safety. Lessor’s
determination to issue, and issuance of, such Conditional
Certificate of Occupancy by Lessor shall not be unreasonably
withheld or delayed. Lessee may operate the Premises under a
Conditional Certificate of Occupancy if the Conditional
Certificate of Occupancy authorizes such operations and provided
that all construction necessary for the safe operation of the
Premises and the protection of the life and safety of all members
of the public coming on the Premises has been completed, in
accordance with all Applicable Laws and the terms of this Lease.
	 
	 	15.4.7.	 	In no event shall Lessee open the Premises to the public without either
(a) the issuance of a Certificate of Occupancy or (b) the issuance of a
Conditional Certificate of Occupancy.

	 	15.5.	 	On Site Inspection

	 	15.5.1.	 	Lessor shall be entitled to have on the Premises at any time during the
hours of construction of Initial Lessee Improvements, Alterations or
Preservation Maintenance an inspector(s) or representative(s) who shall be
entitled, without materially interfering with Lessee’s work, to observe all
aspects of the construction in, on, over or under the Premises. No
inspection performed or not performed by Lessor under this Lease shall give
or be deemed to give Lessor any responsibility or liability with respect to
the work or the prosecution thereof or the design or construction of Initial
Lessee Improvements, Alterations or Preservation Maintenance or constitute or
be deemed to constitute a waiver of any of Lessee’s obligations under this
Lease or be construed as approval or acceptance of the work or the
prosecution thereof or the design or construction of Initial Lessee
Improvements, Alterations or Preservation Maintenance.

	16.	 	PERMITS AND APPROVALS

	 	16.1.	 	Except as otherwise provided in this Lease, Lessee shall be solely responsible
for obtaining, at its sole cost and expense, the approval of

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	 	 	 	any Agency for any permit
or other governmental action necessary to permit the activities under this Lease.
Lessor, at no expense to itself, shall cooperate with Lessee to the extent reasonably
required to obtain all such permits and approvals. Notwithstanding the foregoing,
Lessee shall not submit to any person or entity, including any Agency,
information regarding Lessor or Lessor’s lands without Lessor’s prior written
approval, unless the communication of information is in response to a valid order
by a court or Agency or to obtain a permit, approval or financing or is otherwise
required to be released by law, in which case Lessee shall immediately provide
Lessor with written notice of such order or requirement, identifying the specific
information released. In addition, Lessee may release such information that is
necessary for Lessee to obtain insurance, and upon release of such information,
Lessee shall provide Lessor with written notice indicating what information was so
released.
	 
	 	16.2.	 	Although Lessee’s operations will be conducted on Federal property, Lessee
shall generally use and operate in the Premises as if subject to state and local
ordinances in the same manner as if the Premises were not under Federal ownership. All
permits normally required in the City and County of San Francisco shall be obtained by
Lessee to the extent available and applicable and all Impositions otherwise payable
shall be paid, solely at the expense of Lessee; it being understood that all building
construction-related: (a) permits; (b) approvals (including approvals pursuant to the
National Environmental Policy Act (“NEPA”) (including approvals in connection with the
traffic management plan prepared by Lessee pursuant to Lessor’s requirements)); (c)
inspections (made by or on behalf of Lessor); and (d) certificates; pertaining solely
to the Premises will be issued by Lessor rather than by the city, county, state or
other state and local officials. Notwithstanding the foregoing, to the extent that any
construction activities associated with the construction of the Initial Lessee
Improvements or any Alterations, Preservation Maintenance, or any repair and
maintenance activities within, on or about the Premises, are located on or encroach
upon non-federal property outside of the Premises or property over which Lessor does
not have jurisdiction, for example, overhanging canopies, sidewalk cafes, curb cuts,
temporary or permanent street or sidewalk closures, or the like, Lessee shall obtain at
its sole cost and expense all necessary city, county, and/or state or other state and
local permits, approvals, inspections and/or certifications pertaining to such
activities.
	 
	 	16.3.	 	If Lessee is unable to obtain, for reasons beyond Lessee’s control, all Agency
related approvals necessary for the operation of a hotel, restaurant, and related uses
in the Premises, then Lessee shall notify the Lessor in writing of the specific
approvals required and shall allow

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	 	 	 	the Lessor thirty (30) days from the date of
delivery of the notice to the Lessor for the Lessor to obtain or provide the necessary
approvals. If the Lessor does not obtain or provide the necessary approvals within the
thirty (30) day period, then the Lessee shall have the right to extend the time for
Lessor to obtain such approvals or to terminate this Lease in accordance with Section
3.2 above.

	17.	 	EXCAVATION, SITE, AND GROUND DISTURBANCE

Lessee shall conduct no mining or drilling operations; remove no sand, gravel or similar substances
from the ground (except for foundation and utilities work); commit no waste of any kind; or in any
manner change the contour or condition of the Premises or other Park property. Lessee shall give
Lessor not less than thirty (30) days written notice of the scheduled commencement of any site and
ground disturbance on or under any portion of the Premises. Written approval for excavation
including, but not limited to environmental and archaeological clearances are required prior to any
digging or excavation on the Premises.

	18.	 	OWNERSHIP OF IMPROVEMENTS

	 	18.1.	 	This Lease will vest in Lessee no property interest in the Premises or in the
improvements or Fixtures thereon other than a leasehold interest. Title to real
property and improvements and Fixtures thereon, including Initial Lessee Improvements,
Alterations, Building Maintenance and Preservation Maintenance to Premises but
excluding Trade Fixtures shall be and remain solely in Lessor.
	 
	 	18.2.	 	Lessor acknowledges that covenants which allow Lessor certain control and
rights of approval over Personal Property items placed upon the Premises by Lessee are
provided only to insure conformance with the terms of this Lease, but such covenants do
not vest in, nor shall they be construed as vesting in Lessor an ownership interest in
such items.
	 
	 	18.3.	 	Upon removal of Personal Property at any time during the Term or upon
expiration of this Lease, Lessee shall (a) repair all damage caused by such removal at
Lessee’s sole cost and expense and ensure that no safety hazard is created by such
removal, (b) cause a neat appearance to remain in the area of removal, and (c) perform
Preservation Maintenance of any damaged area of the Premises.
	 
	 	18.4.	 	Lessor and Lessee agree that sublessees of the Office Space, Retail Space and
Restaurant Space will install personal property and/or trade fixtures related to their
use of Premises and that the ownership, installation, and removal of such property by
such sublessees shall be governed by the terms of the sublease between Lessee and its
sublessee. At the termination of such subleases, Lessee shall, either at

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	 	 	 	its own expense or at the expense of its sublessees, remove or cause the removal of any such
personal property and trade fixtures and to the extent necessary or appropriate by
reason of such removal, shall perform Preservation Maintenance or cause the
Preservation Maintenance of the applicable portion of the Premises and Building
Maintenance of any affected major building systems in the manner described in Section
34 of this Lease. Lessee shall repair all damage caused by such property removal in
accordance with the terms of
Section 18.3 above. Lessee shall cause any proposed installation, improvements or
alterations of the Premises by sublessees to comply with the terms and conditions
of this Lease.

	19.	 	BUILDING MAINTENANCE AND PRESERVATION MAINTENANCE

	 	19.1.	 	If this Lease is not terminated by Lessee at the termination of the Due
Diligence Period pursuant to Section 3.2 of this Lease, in addition to Lessee’s other
obligations pursuant to this Lease, Lessee shall, with due diligence, at its own cost
and expense and without any cost or expense to Lessor: (a) promptly and continuously
perform all Building Maintenance; (b) subject to the approved Preservation Plan
promptly and continuously perform all Preservation Maintenance; (c) allow no nuisances
to exist or be maintained thereon; and (d) not commit or permit waste upon the
Premises.
	 
	 	19.2.	 	Lessor shall not be obligated to perform any Building Maintenance,
Preservation Maintenance, Initial Lessee Improvements or Alterations of any kind
whatsoever of or to the Premises and Lessee hereby expressly waives any right under any
Applicable Laws that would otherwise permit Lessee to perform Building Maintenance,
Preservation Maintenance, Initial Lessee Improvements or Alterations at Lessor’s
expense.
	 
	 	19.3.	 	During the Term, Lessee shall schedule and perform Building Maintenance and
Preservation Maintenance, and construct the Initial Lessee Improvements and Alterations
reasonably expected to be necessary to the Premises so as to avoid deterioration, keep
the Premises in good order, condition and repair, and to comply with all Applicable
Laws and the Hotel Standard.
	 
	 	19.4.	 	During the last five (5) Lease Years, if Lessee becomes obligated by reason of
this Lease or changes in Applicable Laws, to make or install any extraordinary capital
improvements to the Premises that materially affect the building structure and building
mechanical systems (for example, replacement of the entire roof, structural
improvements affecting load-bearing walls or foundations, or installation of new
mechanical systems servicing the entire Premises), with a then-anticipated recovery
period for the cost exceeding the then-remaining

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	 	 	 	Term, then Lessee shall notify Lessor
of such requirements, the itemized cost and then-anticipated recovery period for such
costs. For purposes of this Section 19.4, the anticipated recovery period shall be the
shortest period permitted by the Internal Revenue Code, as amended.

	 	19.4.1.	 	Lessor shall determine Lessee’s Share (as defined below)) and shall elect
to: (a) terminate this Lease; (b) pay Lessor’s Share (as defined below) of
the reasonable cost
of such capital improvements on a pro rata basis as such costs are
incurred; or (c) authorize Lessee in writing to offset against
subsequent payments of Base Rental and Percentage Rental Lessor’s
Share of the reasonable cost of such capital improvements;
provided that if Lessor elects to terminate this Lease pursuant to
Section 19.4.1(a), then Lessor shall notify Lessee in writing of
its election to terminate and Lessee shall have thirty (30) days
to notify Lessor in writing of Lessee’s determination whether
Lessee shall pay Lessor’s Share in addition to Lessee’s Share for
such capital improvements. If Lessee timely notifies Lessor of
its election to make or install such capital improvements and to
bear all costs, that is, pay Lessor’s Share plus Lessee’s Share,
then Lessor’s termination of this Lease pursuant to Section
19.4.1(a) shall be deemed withdrawn and void ab initio, provided
Lessee commences to make or install such capital improvements and
to bear all costs, that is, pay Lessor’s Share plus Lessee’s
Share, to Lessor’s reasonable satisfaction.
	 
	 	19.4.2.	 	If Lessor does not terminate the Lease pursuant to Section 19.4.1(a)
above, if applicable, then if Lessee’s Share (as defined below) of the cost
of such capital improvements exceeds Five Million Dollars ($5,000,000), which
amount (as adjusted for increases in the CPI since the Commencement Date)
shall be reduced to Four Million Dollars ($4,000,000) as of the date that is
four (4) years before the then-scheduled expiration date of the Term, to
Three Million Dollars ($3,000,000) as of the date that is three (3) years
before the then-scheduled expiration date of the Term, to Two Million Dollars
($2,000,000) as of the date that is two (2) years before the then-scheduled
expiration date of the Term, and to One Million Dollars ($1,000,000) as of
the date that is one (1) year before the then-scheduled expiration date of
the Term; then Lessee

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	 	 	 	shall have, subject to Leasehold Mortgagee’s rights as
specified in Section 28 of this Lease, the option to terminate this Lease.
	 
	 	19.4.3.	 	For purposes of this Section 19.4, “Lessee’s Share” means the portion of
the reasonable cost equal to the ratio which the then remaining number of
Lease Years (or fractional portion thereof) in the Term bears to the
anticipated recovery period for the cost of such capital improvements as
determined by Lessor, and “Lessor’s Share” means such reasonable cost less
Lessee’s Share.

	 	19.5.	 	Within thirty (30) days of the issuance of the Certificate of Occupancy,
Lessee shall submit to Lessor for approval a Preservation Plan, which Preservation Plan
shall, upon request by Lessor, be periodically amended during the Term.

	20.	 	UTILITIES

Except as provided in Section 2.3.7 above, Lessee shall make all arrangements with appropriate
utility providers and shall pay for all utilities furnished to or used at the Premises, including
without limitation, gas, electricity, other power, water, cable, telephone and other communication
services, sewage, garbage, service fees and Impositions thereon.

	21.	 	COMPLIANCE WITH APPLICABLE LAWS; NEPA; NHPA

	 	21.1.	 	General Compliance
	 
	 	 	 	Lessee, at Lessee’s sole cost and expense, shall promptly comply with all
Applicable Laws. Lessee shall give Lessor immediate written notice of any notice
of violation of Applicable Laws received by or on behalf of Lessee and, at its
sole cost and expense, Lessee shall promptly rectify any such violation but shall
retain the right to appeal any non-final rulings prior to taking any action.
	 
	 	21.2.	 	National Environmental Policy Act and National Historic Preservation Act
	 
	 	 	 	Where activities undertaken by Lessee require the preparation of compliance
documents pursuant to the National Environmental Policy Act (“NEPA”) or the
National Historic Preservation Act (“NHPA”), Lessee shall supply all necessary
information to Lessor and any Agency in a timely manner. No construction or
installation activities shall occur until all applicable NEPA and NHPA
requirements have been met.

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	22.	 	HAZARDOUS MATERIALS

	 	22.1.	 	Lessor has furnished to Lessee copies of any and all reports Lessor has in its
possession or has obtained in connection with the presence of Hazardous Materials on
the Premises.
	 
	 	22.2.	 	Except as specifically permitted under Sections 22.8, 22.9, or 22.10 of this
Lease, Lessee shall not, and Lessee shall ensure that Affiliates, Lessee’s Agents,
employees, guests, visitors, invitees, sublessees, licensees, and permittees and other
persons or entities under the control of Lessee during the Term shall not bring,
generate or otherwise use, handle, treat, store, sell, dispose of, discharge or release
any Hazardous Material upon, about, beneath or from the Premises, except for limited
quantities of standard office, personal care, and janitorial supplies containing
chemicals categorized as Hazardous Materials
brought, generated or otherwise used, handled, treated, stored, sold, disposed of,
discharged and released in compliance with Applicable Laws and excepting those
materials otherwise identified in this Lease to be part of the process of
completion of Initial Lessee Improvements. All Hazardous Materials-related
activities undertaken by Lessee, Affiliates, Lessee’s Agents, employees, guests,
invitees, visitors, sublessees, licensees, and permittees and other persons or
entities under the control of Lessee during the Term shall comply with all
Applicable Laws. Lessee shall not, and Lessee shall ensure that Lessee’s Agents,
Affiliates, employees, guests, visitors, invitees, sublessees, licensees, and
permittees and other persons or entities under the control of Lessee during the
Term shall not permit Hazardous Materials to be commingled with the Hazardous
Materials of Lessor, if any. Lessee agrees to be responsible for timely
acquisition of any permit(s) required for its Hazardous Materials-related
activities, and shall provide to Lessor, upon request, inventories of all such
Hazardous Materials and any supporting documentation, including but not limited to
material safety data sheets, uniform waste manifest forms, and/or any other
pertinent permits.
	 
	 	22.3.	 	If Lessee or Lessor become aware of, or reasonably suspect, or receive notice
or other communication concerning (a) any actual, alleged or threatened violation of
any Applicable Laws (i) by Lessee, Affiliates, Lessee’s Agents, employees, guests,
visitors, invitees, sublessees, licensees, and permittees and other persons or entities
under the control of Lessee during the Term and in connection with the Premises or (ii)
from past or present activities of any person in connection with the Premises, or (b)
of any liability of Lessee, Lessee’s Agents, employees, guests, visitors, invitees,
sublessees, licensees, and permittees and other persons or entities under the control
of Lessee during the Term for Environmental Damages in connection with the Premises,
then such

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	 	 	 	party shall deliver to the other party, immediately upon receipt of such
notice or communication by Lessee, a written description of such alleged violation or
liability together with copies of any documents evidencing same. Receipt of such
notice shall not be deemed to create any obligation on the part of Lessor to defend or
otherwise respond to any such notification.
	 
	 	22.4.	 	Lessee shall, at its sole cost and expense, promptly take all actions required
under Applicable Laws by any Agency to remedy damage to the Premises or neighboring
property that arises directly or indirectly from or in connection with the presence, or
release of any Hazardous Material introduced in or into the air, soil, surface water or
ground water by Lessee’s, Affiliates’, Lessee’s Agents’, employees’, guests’,
visitors’, invitees’, sublessees’, licensees’, and permittees’ and other persons’ or
entities’ under the control of Lessee during the Term use of the Premises. Such
actions may include but are not limited to the investigation of the environmental
condition of the areas adversely
affected (“Affected Property”) by Lessee’s breach of any of the provisions of
this Lease, as well as the preparation and performance of any cleanup,
remediation, containment, operation, maintenance, monitoring or restoration work,
whether on or off of the Affected Property. Lessee shall take all actions
required under Applicable Laws and shall restore (such word being used as
contemplated by environmental laws rather than historic preservation laws and
regulations) the Affected Property to a condition substantially equal to that
existing prior to the introduction of the Hazardous Materials upon, about, in,
into, or beneath the Affected Property, in accordance with the standard of
remediation imposed by Applicable Laws. (To the extent of such impacted
conditions, those portions of any Affected Property that cannot be restored to
substantially the pre-existing condition shall be restored in accordance with the
standards or requirements imposed by Applicable Law to the degree deemed necessary
or appropriate by the Agency with jurisdiction to enforce Applicable Laws.) Lessee
shall proceed continuously and diligently with such investigatory and remedial
actions and these actions shall be performed in accordance with Applicable Laws in
a good, safe and workmanlike manner by one or more licensed and reputable
contractors experienced in the conduct of remedial actions in areas containing
significant natural and cultural resources or comparable experience. Such
contractor shall not be an Excluded Contractor. Lessee shall pay all costs and
expenses in connection with such investigatory and remedial activities chargeable
to Lessee, including but not limited to the charges of such contractor(s), all
power and utility costs, any and all taxes or fees that may be applicable to such
activities, and all reasonable costs incurred by Lessor in connection with the
monitoring or reviewing of such investigatory or

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	 	 	 	remedial activities. Lessee
shall promptly provide to Lessor copies of all unprivileged testing results and
reports generated in connection with the aforementioned activities unless Lessor
shall be made a party to such investigatory or remedial activities and in which
case Lessee will provide Lessor with any and all such testing results and reports.
Promptly upon completion of such investigation and remediation, Lessee shall
remove all associated Personal Property, debris, materials and the like, to the
reasonable satisfaction of Lessor.
	 
	 	22.5.	 	Lessor shall have the right, but not the obligation, at all reasonable times
and, except in the case of emergency, following advance notice to Lessee, to enter upon
the Premises, as may be necessary as determined by Lessor in its reasonable discretion,
to conduct inspections and non-invasive tests of the Premises to determine whether
Lessee is complying with all Applicable Laws, at Lessor’s sole expense. Lessor shall
have the right, but not the obligation, to retain independent professional consultants
to enter the Premises to conduct such inspections and to review any report prepared by
or for Lessee concerning such compliance. Upon Lessee’s request, Lessor will make
available to Lessee copies of all final reports and written data obtained by
Lessor from such tests and investigations. Lessee expressly recognizes that it
shall have no claim against Lessor for injury, loss, or other costs occasioned by
any inconvenience to or interference with Lessee’s, Affiliates’, Lessee’s Agents’,
employees’, guests’, visitors’, invitees’, sublessees’, licensees’, and
permittees’ and other persons’ or entities’ under the control of Lessee during the
Term use of the Premises as a result of Lessor’s exercise of the rights reserved
to it under this Section 22.5 except to the extent such claims are covered by
Federal law.
	 
	 	22.6.	 	In addition to all other indemnity requirements set forth in this Lease, and
except as provided in Section 22.7 below, Lessee expressly agrees to indemnify,
reimburse, defend save and hold harmless Lessor and Lessor’s Agents for and from any
and all Environmental Damages as set forth in Section 25 of this Lease.
	 
	 	22.7.	 	This Lease does not create a separate obligation on the part of Lessee and in
favor of Lessor to remediate Preexisting Hazardous Materials nor does it limit or
expand the rights or defenses of Lessor or the Lessee with respect to such Preexisting
Hazardous Materials. Consequently, the provisions of Sections 22.4 and 22.6 above
shall not apply to Preexisting Hazardous Materials except to the extent that: (a)
Lessee’s, Affiliates’, Lessee’s Agents’, employees’, guests’, visitors’, invitees’,
sublessees’, licensees’, and permittees’ and other persons’ or entities’ under the
control of Lessee during the Term negligence or willful

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	 	 	 	misconduct causes an
exacerbation or migration of such Pre-existing Hazardous Materials, or (b) Lessee,
Affiliates, Lessee’s Agents, employees, guests, visitors, invitees, sublessees,
licensees, and permittees and other persons or entities under the control of Lessee
during the Term cause additional damage to the environment beyond such Preexisting
Hazardous Materials due to a violation of any Applicable Laws regarding such
Preexisting Hazardous Materials and, (c) except as specifically stated in Sections 22.8
and 22.9 below. This Section does not relieve Lessee of any obligation it might have
with regard to third parties or any Agency by operation of Applicable Laws, including
but not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act.
	 
	 	22.8.	 	Lessee understands and acknowledges that the area and soils beneath the
Premises are not leased to Lessee and may contain subsurface deposits of lead or lead
slag resulting from prior use of the site for a lead smelting works between 1867 and
1885 and creosote associated with the preservation of the existing building
substructure. Nothing in this Lease requires Lessor (or Lessee except as expressly
stated herein) to remove or otherwise remediate (or otherwise incur any liability with
respect to) creosote, lead or lead slag deposits, or other Hazardous
Materials, that may underlie the Premises. However, whenever Lessee performs
Preservation Maintenance and/or Building Maintenance, or constructs Initial Lessee
Improvements and/or Alterations and/or makes an installation on the Premises or
under the Premises and/or otherwise disturbs the area or soils beneath the
Premises, Lessee shall comply with all Applicable Laws related to the removal or
remediation of creosote, lead or lead slag deposits, or other Hazardous Materials,
as applicable, and to the extent such material is removed in the course of such
work, Lessee shall be designated as the generator and shall arrange for the
removal of such amounts of creosote, lead or lead slag-laden soil, or soils
containing other Hazardous Materials, as applicable, in compliance with Applicable
Laws. Lessee shall arrange for such removal and disposal of such soil with
appropriate licensed contractors, at Lessee’s sole cost and expense.
	 
	 	22.9.	 	Lessee understands and acknowledges that the Premises may contain asbestos
and lead-based paint. Therefore, Lessee hereby agrees that, during the Term, any
necessary costs of removal or remediation with respect to asbestos or lead-based paint
in the Premises or in areas adjacent to the Premises for which access is necessary by
Lessee in order to operate or maintain Premises shall be the responsibility of Lessee
and Lessor shall not be responsible for such removal, remediation or costs associated
therewith. Whenever Lessee performs Preservation Maintenance, Initial Lessee
Improvements, Alterations,

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	 	 	 	Building Maintenance, and/or installation on the Premises,
Lessee shall comply with all Applicable Laws related to the removal or remediation of
asbestos and lead-based paint. Nothing in this Lease shall be construed to require
Lessee to remove asbestos or lead-based paint unless Applicable Laws require such
removal.
	 
	 	22.10.	 	Lessee shall develop and implement management and remediation plans for asbestos and
lead-based paint during any construction activities and for the ongoing Preservation
Maintenance of the Premises. Lessee shall furnish a copy of such management and
remediation plans to Lessor before construction of Initial Lessee Improvements and/or
Alterations and annually as part of the Preservation Plan.
	 
	 	22.11.	 	Should Lessee fail to perform or observe any of its obligations or agreements
pertaining to Hazardous Materials or Applicable Laws for a period of thirty (30) days
(or such longer period of time as is reasonably required) after notice, then Lessor
shall have the right, but not the duty, without limitation of any other rights of
Lessor under this Lease on its own behalf or through its agents, consultants or
contractors, to enter the Premises and perform the same. Lessee agrees to reimburse
Lessor for the costs thereof and to indemnify Lessor for liabilities therefrom as set
in Section 22.6 of this Lease.
	 
	 	22.12.	 	The provisions of this Section 22 shall survive any termination of this Lease.
Section 23 of this Lease shall not limit in any way Lessee’s or Lessor’s obligations
under this Section 22.

	23.	 	INSURANCE

Lessee, at its sole cost and expense, shall procure and maintain in full force and effect the
following insurance at all times during the Term, unless otherwise specified below:

	 	23.1.	 	Property Insurance

	 	23.1.1.	 	Commercial Property

Commercial property insurance insuring against perils equal to an
“all risk” or ISO special causes of loss form and covering the
Premises, including the finished Initial Lessee Improvements,
Alterations and/or Preservation Maintenance, and Lessee’s Personal
Property at full replacement cost (with like kind and
quality/functional equivalent), together with, to the extent such
coverage is available at Commercially Reasonable Insurance Rates, a
“Difference in Conditions/Difference in Limits” endorsement or
separate

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	 	 	 	policy providing Historical Valuation Coverage in the amount
of Two Million Dollars ($2,000,000) per occurrence. Lessor, to the
extent of its interest, shall be an additional insured on the
policy(ies). The property insurance shall include coverage for
debris removal, demolition, building ordinance upgrades and shall
have an agreed amount endorsement.
	 
	 	23.1.2.	 	Boiler and Machinery
	 
	 	 	 	Comprehensive boiler and machinery insurance insuring against loss
caused by equipment breakdown or explosion of steam boilers, pipes
and other objects, and covering consequential business interruption
losses. Coinsurance shall not apply to the coverage. Lessor, to the
extent of its interest, shall be an additional insured on the policy.
	 
	 	23.1.3.	 	Builder’s Risk
	 
	 	 	 	During construction Lessee or Lessee’s general contractor shall
obtain and maintain builder’s risk insurance for the construction of
the entire work authorized as the Initial Lessee Improvements,
Alterations and/or Preservation Maintenance, naming as additional
insureds the Lessor, Lessee, Lessee’s contractors, subcontractors and
agents performing construction on the Premises. Such insurance
shall be written on a completed value form. If the estimated
completed value of the project changes during construction, the
policy shall be endorsed to reflect the new estimated value. Such
builder’s risk insurance shall insure against perils equal to a
special causes of loss (“all risk”) form, and include coverage for
earthquake, flood, and collapse, including collapse resulting from
design error. Such insurance shall cover the entire work, materials
and equipment used in connection with the work, work in transit and
stored off-site, and temporary buildings. The builder’s risk
insurance shall remain in effect until the earliest of: (a) the
issuance of a Certificate of Occupancy by Lessor, (b) when all
insureds under the policy agree it shall be terminated, (c) when
final payment under the Construction Contract has been made, or (d)
the date on which the insurable interests in the Premises of all
insureds other than Lessor have ceased. At all times with respect to
any portion of the Premises, either the insurance required by
Sections 23.1.1 or 23.1.3 of this Lease shall be in effect.

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	 	23.1.4.	 	Earthquake and Flood
	 
	 	 	 	Flood coverage and, to the extent such coverage is available at
Commercially Reasonable Insurance Rates, earthquake coverage with
limits as close to the full replacement cost of the Initial Lessee
Improvements, Alterations and/or Preservation Maintenance, with like
kind and quality/functional equivalent, together with, to the extent
such coverage is available at Commercially Reasonable Insurance
Rates, the “Difference in Conditions/Difference in Limits”
endorsement or separate policy providing Historical Valuation
Coverage in the amount of One Million Dollars ($1,000,000) per
occurrence as required in Section 23.1.1 above. Lessor, to the
extent of its interest, shall be an additional insured on the
earthquake and flood policies required hereby.
	 
	 	23.1.5.	 	Business Income
	 
	 	 	 	Business income and extra expense coverage insuring against perils
equal to a special causes of loss (“all risk”) form, covering a
period of reconstruction and/or restoration of no less than two (2)
years.
	 
	 	23.1.6.	 	Blanket Policy
	 
	 	 	 	The insurance required under this Section 23.1 may be part of blanket
policies but only if the limits required herein will be available
under such blanket policies for any event affecting the Premises.

	 	23.2.	 	Liability Insurance

	 	23.2.1.	 	Environmental Liability

	 	23.2.1.1.	 	Contractor’s Pollution Legal Liability
	 
	 	 	 	Lessee shall maintain, or cause those of its
contractors or agents who handle Hazardous
Materials to maintain, contractor’s pollution
legal liability insurance during the construction
of the Initial Lessee Improvements, Major
Alterations and Preservation Maintenance. Such
insurance shall cover liability (to parties other
than Lessee, Lessee’s Affiliates, and Lessee’s

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	 	 	 	Agents) arising out of bodily injury and damage to
and loss of use of property, clean-up costs,
investigation and defense arising from acts or
omissions for which Lessee is liable under
Sections 22.4 and 22.7 of this Lease, and to the
extent available at Commercially Reasonable
Insurance Rates, shall not exclude claims arising
out of lead, creosote, or asbestos. Lessor shall
be an additional insured on such policy, to the
extent that such coverage is available at
Commercially Reasonable Insurance Rates.
	 
	 	23.2.1.2.	 	Environmental Professional Liability
	 
	 	 	 	Lessee shall maintain, or cause those of its
contractors, consultants or agents who provide
professional environmental services to maintain
environmental professional liability insurance
during the construction of the Initial Lessee’s
Improvements, Major Alterations and Preservation
Maintenance. The policy shall cover liability
arising out of testing, monitoring, measuring and
laboratory analyses, and to the extent available
at Commercially Reasonable
Insurance Rates, shall not exclude claims arising
out of lead, creosote, or asbestos for which
Lessee is liable under Sections 22.4 and 22.7 of
this Lease.
	 
	 	23.2.1.3.	 	Hazardous Materials Disposal
	 
	 	 	 	Lessee shall ensure that any off-site disposal
operator to which Lessee or Lessee’s contractors
ship Hazardous Materials maintains and furnishes
evidence of pollution legal liability insurance.
In addition, Lessee shall maintain, or cause those
of its contractors or agents who transport any
Hazardous Materials to maintain on its automobile
liability policy MCS-90 and CA 9948 endorsements,
or the equivalent.

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	 	23.2.2.	 	Commercial General Liability
	 
	 	 	 	Commercial general liability insurance and if necessary commercial
umbrella liability with a limit of not less than $10,000,000 each
occurrence and in the aggregate. The general liability policy shall
be endorsed to provide that the aggregate limit applies separately to
this location. The commercial general liability policy shall cover
liability arising out of bodily injury, property damage, products and
completed operations, personal and advertising injuries (as defined
by the policy), innkeepers legal liability, police/security guard
liability, and liquor liability if alcoholic beverages are served or
sold on the Premises. Said policy shall cover the Lessor and
Lessor’s officers, directors, and employees as additional insureds
with respect to liability arising out of Lessee’s operations on the
Premises and the ownership, maintenance and use of the Premises.
	 
	 	23.2.3.	 	Commercial Automobile Liability and Garagekeepers Legal Liability
	 
	 	 	 	Commercial automobile liability insurance covering owned, non-owned
and hired automobiles (“any auto”) with limits of not less than
$1,000,000 per accident. If applicable, Lessee shall also maintain
garagekeepers legal liability coverage with a limit of not less than
$1,000,000 each occurrence. Said policies shall cover the Lessor
with respect to liability arising out of the Premises.

	 	23.3.	 	Workers’ Compensation and Employer’s Liability

	 	23.3.1.	 	Workers’ compensation insurance as required by applicable law.
	 
	 	23.3.2.	 	Employer’s liability insurance with limits no less than $1,000,000 for
bodily injury by accident and $1,000,000 for bodily injury by disease.

	 	23.4.	 	General Insurance Program Requirements

	 	23.4.1.	 	Acceptable Insurance
	 
	 	 	 	All of the insurance required under this Lease and all renewals
thereof shall be issued by companies admitted or approved to do
business in the state of California, with a

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	 	 	 	financial rating of at
least A-VIII, as rated by the A.M. Best Key Rating Guide.
	 
	 	23.4.2.	 	Deductibles and Self-Insured Retentions
	 
	 	 	 	Any deductibles and/or self-insured retentions must be on
Commercially Reasonable Insurance Rates, but shall not exceed Fifty
Thousand Dollars ($50,000) per occurrence without Lessor’s prior
written approval. Lessor shall not be responsible for any deductible
or self-insured retention amount.
	 
	 	23.4.3.	 	Lessee’s Insurance is Primary
	 
	 	 	 	All of the insurance required under this Section 23 shall provide
that it is primary and non-contributing with any insurance or
self-insurance carried by Lessor.
	 
	 	23.4.4.	 	Severability of Interests
	 
	 	 	 	To the extent available at Commercially Reasonable Insurance Rates,
the policies required by Sections 23.2.2 and 23.2.3 of this Lease on
which Lessor is an additional or named insured shall contain a
severability of interests with respect to Lessor as additional
insured (or separation of insureds) provision. All of the policies
required pursuant to Section 23.1 of this Lease and to which Lessor
is an additional insured shall provide on such additional insured
endorsement the same protection to Lessor that is provided to a
mortgagee under a standard mortgagee’s clause, in that coverage as
respects Lessor’s interest will not be invalidated
or suspended due to acts of the named insured, except as noted in the
standard mortgagee’s clause (438 BFU or equivalent).
	 
	 	23.4.5.	 	Notice of Cancellation
	 
	 	 	 	All policies required under this Section 23 of this Lease shall
provide that coverage will not be cancelled or non-renewed except
after a minimum of thirty (30) days prior notice to Lessor, or, in
the event of nonpayment of policy premiums by Lessee, ten (10) days
notice to Lessor.

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	 	23.4.6.	 	Evidence of Insurance
	 
	 	 	 	Prior to the Commencement of Construction of the Initial Lessee
Improvements, Lessee shall furnish Lessor with insurance certificates
on ACORD forms, and within sixty (60) days after Commencement of
Construction, certified copies of all insurance on which Lessor is a
named insured, and along with copies of required endorsements, of
other insurance required under this Section 23.
	 
	 	23.4.7.	 	Claims-Made Policies
	 
	 	 	 	Lessee’s or its contractors’ or agents’ liability insurance shall be
on occurrence forms unless the required coverage is not available on
occurrence form. If the liability policy is a claims-made policy,
the retroactive date must precede the date of Commencement of
Construction of the Initial Lessee Improvements, or the date of the
commencement of operations insured under the policy, whichever is
earlier. Continuous coverage must be maintained under the
claims-made policy, or the insured must purchase an extended
reporting period of no less than five (5) years, to the extent
available at Commercially Reasonable Insurance Rates.
	 
	 	23.4.8.	 	Street Encroachment Agreement
	 
	 	 	 	Lessee shall include the City and County of San Francisco as an
additional insured on the policies required pursuant to Section
23.2.2 and 23.2.3 above with respect to liability arising out of the
Street Encroachment Agreement, and such insurance shall provide that
it is primary and non-contributing with any insurance or
self-insurance carried by the City and County of San Francisco.

	 	23.5.	 	Waiver of Subrogation

Lessee hereby waives any and all rights of recovery against Lessor, and Lessor’s
officers, directors and employees for any loss or damage to the extent these
damages are insured by insurance carried by Lessee, and the insurance proceeds are
actually received by the insured, including amounts within any insurance
deductible or self-insured retention. Lessor hereby waives any and all rights
against Lessee, its officers, directors, partners, members, employees, visitors,
contractors, agents, and invitees for recovery for damages to the extent insured
by the builder’s risk and other property insurance applicable to the construction

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	 	 	 	activities on the Premises and the insurance proceeds are actually received by the
insured.
	 
	 	23.6.	 	Lessee’s Contractors
	 
	 	 	 	Lessee shall be responsible for requiring that its contractors, all tiers of
subcontractors, and vendors carry sufficient insurance, including, at a minimum
workers’ compensation and commercial general liability.
	 
	 	23.7.	 	Changes in Insurance Requirements
	 
	 	 	 	All insurance required by this Section 23 shall be evaluated for adequacy by
Lessor and Lessee not less frequently than every five (5) years from the
Commencement Date and shall be re-evaluated by Lessor as a condition to all Major
Alterations or reconstruction of or major repairs to the Haslett Warehouse;
provided, however, that if Lessee or Lessor cannot agree upon the amounts, limits
and deductibles of any insurance required pursuant to this Section 23, such
amounts, limits and deductibles shall be subject to determination by alternative
dispute resolution in accordance with the provisions of Section 33 below.
	 
	 	23.8.	 	No Premium Payments by Lessor
	 
	 	 	 	In no instance will Lessor be obligated to pay insurance policy premiums on the
insurance required hereunder. The policies on which Lessor is a named insured
shall provide that Lessor will not be obligated to pay insurance premiums.
	 
	 	23.9.	 	Availability of Policies
	 
	 	 	 	Lessee shall provide to Lessor (a) certified copies of all insurance policies
required in this Section 23 as soon as practicable, and (b) copies of insurance
binders for all insurance required in this Section 23 within ten (10) business
days of Lessor’s written request for said copies.
	 
	 	23.10.	 	Lessee’s Failure to Comply
	 
	 	 	 	Lessee shall maintain and renew, as appropriate, all policies provided for in this
Lease throughout the Term, and Lessee shall renew such policies before each such
policy’s expiration date.
	 
	 	23.11.	 	Insurance Not Limit on Liability

	 	23.11.1.	 	Lessee assumes full risk and responsibility for any inadequacy of
insurance coverage.

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	 	23.11.2.	 	No approval by Lessor of any insurer, or the terms or conditions of any
policy, or any coverage or amount of insurance, or any deductible amount
shall be construed as a representation by Lessor of the solvency of the
insurer or the sufficiency of any policy or any coverage or amount of
insurance or deductible. By requiring insurance herein, Lessor does not
represent that the stated coverage and limits will necessarily be adequate to
protect Lessee, and such coverage and limits shall not be deemed as a
limitation on Lessee’s liability under the indemnities granted to Lessor
hereunder.
	 
	 	23.11.3.	 	Failure of Lessor to demand such certificate or other evidence of full
compliance with these insurance requirements or failure of Lessor to identify
a deficiency from evidence that is provided shall not be construed as a
waiver of Lessee’s obligation to maintain such insurance.

	 	23.12.	 	Increase In Hazards/Conflict with Coverage
	 
	 	 	 	Lessee shall not do anything, or permit anything to be done that would: (a)
invalidate or be in conflict with the provisions of any insurance policies
covering the Premises or any property located therein, or (b) result in a refusal
by insurance companies of good standing to insure the Premises or other property
in amounts required under this Lease.
	 
	 	23.13.	 	Performance and Payment Bonds

	 	23.13.1.	 	Scope of Requirement
	 
	 	 	 	Lessee shall, during construction of all Initial Lessee Improvements,
Alterations and or Preservation Maintenance, be responsible for, at
its sole cost and expense, payment of all obligations arising under
all contracts let in connection with the construction of Initial
Lessee Improvements, Alterations and/or Preservation Maintenance
(“Construction Contracts”) including but not limited to amounts for
cost overruns, price increases, change orders, Force Majeure delays
and the like, and for guarantees of performance and
payment under such Construction Contracts, and payment in full of all
claims for labor performed and materials supplied under such
Construction Contracts. Any performance and payment bonds, if any,
used by Lessee for these purposes shall be issued by an admitted
surety company licensed to do business in the State of California.

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	 	23.13.2.	 	Notice of Claim
	 
	 	 	 	Upon the request of any person or entity appearing to be a potential
beneficiary of bonds covering payment of obligations arising under
the Construction Contract, if any, the Lessee shall promptly furnish
a copy of all pertinent documentation substantiating the request to
Lessor.

	 	23.14.	 	Lessor Review of Proposed Policies
	 
	 	 	 	To the extent then available to Lessee, at least thirty (30) days before the
Commencement of Construction, Lessee shall provide to Lessor for its review and
comment copies of all proposed insurance policies and endorsements required by
this Section 23.

	24.	 	DAMAGE OR DESTRUCTION

	 	24.1.	 	No Termination; No Effect on Monetary Obligations
	 
	 	 	 	No loss or damage by fire or other causes resulting in either partial or total
destruction of the Park, the Premises, the improvements or, any other property on
the Premises shall, except as otherwise provided herein, operate to terminate this
Lease. No such loss or damage shall affect or relieve Lessee from Lessee’s
obligation to pay any monetary obligations under this Lease and in no event shall
Lessee be entitled to any proration or refund of same and Lessee shall not be
relieved or discharged from the performance and observance of any of the
agreements, covenants and conditions herein contained on the part of Lessee to be
performed and observed.
	 
	 	24.2.	 	Evaluation of Extent and Effect of Damage
	 
	 	 	 	Upon the occurrence of any event of damage or destruction to the Premises, the
Trade Fixtures, the improvements or any portion thereof, Lessee shall promptly
undertake to determine the extent of the same and the estimated cost and time to
perform any necessary Building Maintenance and/or Preservation Maintenance of, or
construct Initial Lessee Improvements or Alterations to, such property in
accordance with the provisions of this Lease to repair, rebuild, or restore the
damage or destruction. Lessee shall notify Lessor of its estimation of such cost
and time as soon as is reasonably practicable but in no event later than ninety
(90) days after the occurrence of the damage or destruction.

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	 	24.3.	 	Damage or Destruction; Duty to Repair, Rebuild or Restore
	 
	 	 	 	If the Premises, the Trade Fixtures, the improvements or any portion thereof are
damaged or destroyed at any time during the Term and this Lease is not terminated
pursuant to and in accordance with the terms of this Section 24, Lessee, as
promptly as reasonably practicable and with all due diligence, at its sole cost
and expense, and in accordance with all Applicable Laws and the requirements of
this Lease, shall repair, rebuild, or restore the damaged or destroyed portions of
the Premises and such damaged or destroyed Fixtures and Personal Property
necessary to operate the Premises for the purposes of this Lease. Lessee’s
obligations pursuant to this Section 24.3 shall be performed in accordance with
the provisions of Sections 12 through 16 and other applicable provisions of this
Lease.
	 
	 	24.4.	 	Proceeds of Insurance
	 
	 	 	 	All insurance proceeds received by or payable to any Party with respect to such
damage (except proceeds of insurance covering loss or damage of Lessee’s Personal
Property and business interruption insurance), less actual costs and expenses
incurred in connection with the collection thereof, shall be held by Lessee, or
the Leasehold Mortgagee, if applicable, in an interest-bearing account, with all
interest accrued thereon deemed proceeds in insurance for purposes of this Lease,
and such proceeds shall be applied to the costs to perform any Building
Maintenance and/or Preservation Maintenance, or construct Initial Lessee
Improvements or Alterations of the Premises or the Fixtures, as the case may be
and in accordance with all Applicable Laws and the requirements of this Lease to
repair, rebuild, or restore the damage or destruction. Lessee, or the Leasehold
Mortgagee, if applicable, shall pay any amount by which insurance proceeds
received as a result of such damage or destruction, less the costs and expenses
incurred in connection with the collection thereof, are insufficient to pay the
entire cost to repair such damage or to carry out the obligations under Section
24.6 below. Notwithstanding the foregoing, if required by Lessor or the Leasehold
Mortgagee, an insurance trustee mutually acceptable to Lessor and Lessee will hold
and apply such proceeds in accordance with this Lease.
	 
	 	24.5.	 	Option to Terminate upon Damage or Destruction
	 
	 	 	 	In the event of any damage to or destruction of the Premises or the improvements
or any portion thereof at any time during the Term, if (a) the time to repair,
rebuild, or restore the Premises to substantially the
same condition as existing immediately prior to such occurrence is reasonably
estimated to exceed nine (9) months, or (b) the cost of such

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	 	 	 	repair, rebuilding,
or restoration exceeds the available proceeds of insurance (or, if greater, the
proceeds that would have been available had insurance been maintained in
accordance with the requirements of this Lease) by more than Five Million Dollars
($5,000,000), which amount (as adjusted for increases in the CPI since the
Commencement Date) shall be reduced to Four Million Dollars ($4,000,000) as of the
date that is four (4) years before the then-scheduled expiration date of the Term,
to Three Million Dollars ($3,000,000) as of the date that is three (3) years
before the then-scheduled expiration date of the Term, to Two Million Dollars
($2,000,000) as of the date that is two (2) years before the then-scheduled
expiration date of the Term, and to One Million Dollars ($1,000,000) as of the
date that is one (1) year before the then-scheduled expiration date of the Term;
then Lessee shall have, subject to Leasehold Mortgagee’s rights as specified in
Section 28 of this Lease, the option to terminate this Lease. Lessee shall not
have the option to terminate this Lease in whole or in part or to surrender the
Premises or any portion thereof pursuant to this Section 24 unless Lessee
surrenders the Premises or portion thereof to Lessor free and clear of all
occupancies, tenancies, subleases and liens, and otherwise in accordance with this
Section 24.
	 
	 	24.6.	 	Election to Terminate; Lessee’s Obligation to Repair, Rebuild, or Restore
Premises Upon Termination
	 
	 	 	 	Lessee shall exercise its right of termination pursuant to this Section 24 by
giving written notice to Lessor within ninety (90) days after determination of the
extent of damage and estimated cost to repair or replacement pursuant to Section
24.2 above. If Lessee elects to terminate this Lease pursuant to this Section 24,
Lessee, at Lessee’s sole cost and expense (which may include, but shall not be
limited to, insurance proceeds applied as set forth in this Section 24.6), and in
accordance with all Applicable Laws, shall promptly demolish and remove all
damaged property, except any property Lessor elects to retain on the Premises, and
shall cause the Premises to be in a clean, safe and sightly condition free from
rubble and shall remediate any Hazardous Materials to the extent required under
Section 22 above and shall surrender the Premises to Lessor in accordance with the
provisions of Section 34 below and free and clear of any and all occupancies,
tenancies, subleases and liens. If this Lease is terminated pursuant to this
Section 24.6, all proceeds of insurance payable with respect to such damage to, or
destruction of the improvements and other property located on the Premises, after
payment of actual costs and expenses of collection thereof, shall be applied to
either the costs of such demolition and removal, and/or then to remediation
required by Section 22 above, as directed by Lessor. Lessee shall, to the extent
of any remaining

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	 	 	 	insurance proceeds, repair or replace any improvements Lessor elects to retain on
the Premises, in an amount not to exceed Five Hundred Thousand Dollars ($500,000
indexed for increases in the CPI since the Commencement Date); provided, however,
that if there are no insurance proceeds available solely because such insurance
coverage was not available at Commercially Reasonable Insurance Rates, Lessee’s
obligations shall be limited to such demolition, removal and remediation and to
the extent of any applicable insurance proceeds available. The balance, if any,
of insurance proceeds shall be distributed as provided in Section 24.7 below.
Lessee’s obligations under this Section 24 shall survive the termination of this
Lease.
	 
	 	24.7.	 	Excess Insurance Proceeds

	 	24.7.1.	 	If there are proceeds of insurance in excess of that required to perform
the obligations required under this Section 24, upon receipt by Lessor of
satisfactory evidence that the work of Building Maintenance, Preservation
Maintenance, Initial Lessee Improvements or Alterations and construction
required under this Section 24 has been fully completed and paid for in
accordance with the terms and conditions of this Lease and that the last day
for filing any mechanic’s or materialmen’s liens has passed without the
filing of any, or if filed, any such lien has been released, any remaining
amount of such proceeds of insurance shall be paid first to Lessee to
discharge the outstanding balance of any Leasehold Mortgage, then to Lessee.
	 
	 	24.7.2.	 	In the event Lessee elects the option to terminate this Lease pursuant to
Section 24.6 above, if there are proceeds of insurance in excess of that
required to perform the obligations required under this Section 24, upon
receipt by Lessor of satisfactory evidence that the work required under this
Section 24 has been fully completed and paid for in accordance with the terms
and conditions of this Lease and that the last day for filing any mechanic’s
or materialmen’s liens has passed without the filing of any, or if filed, any
such lien has been released, any remaining amount of such proceeds of
insurance shall be paid first to Lessee to discharge the outstanding balance
of any Leasehold Mortgage, then to Lessor and Lessee in accordance with their
interest in the property immediately prior to the time of termination.

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	 	24.8.	 	Emergency Repairs
	 
	 	 	 	If, after damage to or destruction of the Premises, or any part thereof, there is
a substantial possibility that immediate emergency repairs (“Emergency Repairs”)
are required to eliminate defective or dangerous conditions and to comply with all
Applicable Laws, Lessee shall promptly undertake such Emergency Repairs after such
damage or destruction as are necessary or appropriate under the circumstances to
eliminate defective or dangerous conditions and to comply with all such Applicable
Laws.
	 
	 	24.9.	 	CPI Adjustment
	 
	 	 	 	If Lessor at any time, but no more often than every three (3) years, believes that
the dollar amounts stated in this Section 24 are insufficient for a prudent owner
of property of the nature of the Premises, the dollar amounts shall be adjusted by
an amount equal to the percentage of change in the CPI from the Commencement Date
or from the last Lease Year in which such adjustment was made to the date of the
adjustment.

	25.	 	INDEMNITY

	 	25.1.	 	Lessor assumes no liability for any damage to or destruction of the Premises,
including improvements therein, or the Park, or Lessee’s Personal Property, or for
personal injuries or death sustained in connection with or as a result of the use of
the Premises by Lessee, Affiliates, Lessee’s Agents, guests, visitors, invitees,
sublessees, licensees, and permittees and other persons or entities under the control
of Lessee during the Term.
	 
	 	25.2.	 	Lessee shall indemnify, reimburse, defend, save and hold harmless Lessor and
Lessor’s Agents from and against any and all liability, claims, demands, damages,
injuries, losses, penalties, fines, costs (including reasonable consulting fees and
expert fees), causes of action, judgments, expenses and the like for any loss of third
party’s business revenue or income, any loss or destruction of, or damage to, any real
property or personal property to the extent owned by Lessor or a third party (excluding
Lessor’s interest in the Premises, Trade Fixtures or Lessee’s Personal Property), or
for the death of or injury to persons, of any nature whatsoever and by whomever made,
that may arise out of or be incident to the use of the Premises by Lessee, Affiliates,
Lessee’s Agents, employees, guests, visitors, invitees, sublessees, licensees, and
permittees and other persons or entities under the control of Lessee during the Term or
to the activities of Lessee, Affiliates, Lessee’s Agents, employees, guests, visitors,
invitees, sublessees, licensees, and permittees and other persons or entities under the
control of Lessee

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	 	 	 	during the Term on the Premises, whether or not the same shall be
occasioned by the negligence or lack of diligence of Lessee, Affiliates, Lessee’s
Agents, employees, guests, visitors, invitees, sublessees, licensees, and
permittees and other persons or entities under the control of Lessee during the
Term, provided, however, that Lessee shall not be liable to the extent that the
damages, expenses, claims or suits result from the willful acts or negligence of
Lessor, provided further that Lessor shall be liable only to the extent such
claims are specifically covered by Federal law. Lessee expressly acknowledges and
agrees that it has an immediate and independent obligation to defend Lessor from
any claim that actually or potentially falls within this Section 25, regardless of
whether such allegation is, or may be, groundless, fraudulent or false. Such
obligation to defend and indemnify shall arise at the time such claim is tendered
to the Lessee by Lessor and shall continue until discharged through performance or
judicial determination. To the extent of any conflict with this Section 25.2 and
the indemnity provisions of Section 22 of this Lease, the indemnity provisions of
Section 22 of this Lease shall control.
	 
	 	25.3.	 	Lessor and Lessor’s Agents shall be liable for acts and omissions related to
this Lease only to the extent specifically covered by Federal law, including the
Federal Tort Claims Act.
	 
	 	25.4.	 	This Section 25 shall survive any termination of this Lease. The provisions
of Section 23 of this Lease shall not limit in any way Lessee’s obligations under this
Section 25.

	26.	 	LIENS

	 	26.1.	 	No Power in Lessee to Create Lien on Lessor’s Interest
	 
	 	 	 	Lessee shall have no power to do any act or to make any contract that may create
or be the foundation for any lien, mortgage or other encumbrance upon the
reversion, fee interest or other estate of Lessor or of any interest of Lessor in
the Premises, except for such actions or contracts contemplated and taken in
accordance with this Lease.
	 
	 	26.2.	 	Discharge of Liens by Lessee
	 
	 	 	 	Lessee shall not suffer or permit any liens known to Lessee to stand against the
Premises, the improvements thereon, or any part thereof by reason of any work,
labor, or services performed for or materials supplied to, or claimed to have been
supplied to Lessee. If any such lien shall at any time be filed against the
Premises, the improvements thereon, or any part thereof, Lessee shall cause the
same to be discharged of record within sixty (60) days after notice to Lessee of
filing

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	 	 	 	the same, by either payment, deposit or bond, unless such lien shall be
contested. If Lessee fails to discharge or contest such lien within such
period and such failure shall continue for a period of fifteen (15) days after
notice by Lessor, then, in addition to any other right or remedy of Lessor, Lessor
may, but shall not be obligated to, procure the discharge of the same either by
paying the amount claimed to be due, by deposit in court, or by bonding. All
amounts paid or deposited by Lessor for any of the aforesaid purposes, and all
other expenses of Lessor and all necessary disbursements in connection therewith
in defending any such action or in procuring the discharge of such lien, shall
become due and payable forthwith by Lessee to Lessor upon written demand therefor.
	 
	 	26.3.	 	No Consent or Waiver by Lessor
	 
	 	 	 	Nothing in this Lease shall be deemed to be, or be construed in any way as
constituting, the consent or request of Lessor, expressed or implied, by inference
or otherwise, to any person, firm or corporation, for the performance of any labor
or the furnishing of any materials for any Building Maintenance, Preservation
Maintenance, Initial Lessee Improvements or Alterations of or to the Premises or
any part thereof, or as giving Lessee any right, power or authority to contract
for or permit the rendering of any services or the furnishing of any materials
that might in any way give rise to the right to file any lien against Lessor’s
interest in the Premises.

	27.	 	TRANSFER AND SUBLETTING

	 	27.1.	 	Transfer
	 
	 	 	 	Lessor is entering into this Lease in reliance on the particular and unique
skills and reputation of Lessee, and Lessor would not enter into this Lease
except for such particular and unique skills and reputation. Except as set forth
in this Section 27, Lessee shall not make Transfers without the express prior
written permission of Lessor.
	 
	 	27.2.	 	Lessee may make Transfers (other than the subleases pursuant to Section 27.7
below) without the prior written approval of the Lessor only if Kimpton Hotel and
Restaurant Group, Inc. maintains a Controlling Interest in the operations conducted by
Lessee on the Premises. Upon any such Transfer which does not change the Controlling
Interest, Lessee shall notify Lessor in writing of any such Transfer to be made at
least thirty (30) days prior to doing so and shall explain in writing the purpose of
the Transfer.
	 
	 	27.3.	 	(a) After the fourth (4th) Lease Year, a Transfer (other than the subleases
pursuant to Section 27.7 below) of the Controlling Interest of

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	 	 	 	Kimpton Hotel and
Restaurant Group, Inc. in Lessee may be made to an Approved Operator or to an entity
with a management contract with an
Approved Operator, which change in Controlling Interest shall require Lessor’s
prior written approval.
	 
	 	 	 	(b) Lessor agrees to approve such Transfer upon demonstration to the reasonable
satisfaction of Lessor that, (i) transferee shall have not less than a twenty
percent (20%), equity investment in the project, as estimated by the appraiser
for the first priority Leasehold Mortgagee financing the acquisition of the
Project by the transferee; regardless if (A) the acquisition is being financed by
a purchase money Leasehold Mortgage held by the transferor or an Affiliate
thereof, securing an amount not exceeding the largest total amount of all
Leasehold Mortgages in effect at any one time as previously approved by Lessor
pursuant to Sections 28.5 and 28.7 of this Lease, or (B) the transferee acquires
the project by taking subject to or assuming an existing Leasehold Mortgage(s);
(ii) transferee is of good reputation; and (iii) either (A) transferee has had
substantial and successful experience in the hotel business sufficient to qualify
as an Approved Operator or (B) transferee has an Approved Operator with a firm
commitment to be retained to operate the Premises and which Approved Operator is
acceptable to Lessor and of good reputation.
	 
	 	27.4.	 	Transferee shall promptly reimburse Lessor for all reasonable costs incurred
in connection with Lessor’s review of a Transfer.
	 
	 	27.5.	 	Provided that Lessor has consented to a Transfer in writing, upon such
approved Transfer Lessee shall be released from its obligations hereunder which arise
subsequent to the effective date of the Transfer to the extent of the interest of
Lessee transferred and to the extent the transferee of the Transfer assumes, in
writing, Lessee’s obligations under this Lease.
	 
	 	27.6.	 	With respect to proposed Transfers, as part of the written request for
approval for a Transfer, Lessee shall furnish to Lessor the following information: (a)
all instruments proposed to implement the transaction; (b) a statement as to the
existence of any litigation questioning the validity of the proposed transaction; (c) a
description of the hotel property management qualifications and financial background of
the proposed assignee; (d) a description of the ownership structure and general
business standing of the proposed assignee; (e) if the transaction may result in an
encumbrance on the Premises, full particulars of the terms and conditions of the
encumbrance; and; (f) such other information as Lessor may reasonably require. Lessor
shall have the right to approve the form of any Transfer.

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	 	27.7.	 	Office Space, Retail Space and Restaurant Spaces Subleasing

	 	27.7.1.	 	Lessee may sublease the Office Space, Retail Space, and Restaurant Space
provided Lessee shall give Lessor thirty (30) days prior written notice
during which time Lessor shall approve or disapprove the proposed sublease.
	 
	 	27.7.2.	 	With respect to proposed subleases, as part of a written request for
approval from Lessor as set forth in Section 27.7.1 above and without
otherwise limiting the criteria upon which Lessor may withhold its consent to
any proposed sublease, Lessee shall furnish to Lessor the following
information: (a) evidence satisfactory to Lessor that the proposed
sublessee’s use of the subleased Premises shall be in compliance with the
terms and conditions of this Lease; (b) a copy of the proposed sublease with
the proposed sublessee, which sublease shall be subject to, and the sublessee
of such sublease shall be required to comply with, all of the terms,
agreements, covenants, conditions and provisions of this Lease; (c) evidence
satisfactory to Lessor of the proposed sublessee’s financial capacity to meet
its commitments under the proposed sublease; and (d) demonstrates that any
proposed sublease for Office Space and Retail Space are at market rental
rate. Subleases so approved shall not serve to relieve Lessee from any
liability or diminish any supervisory authority of Lessor as provided under
this Lease.

	 	27.8.	 	Approval Time, Etc.
	 
	 	 	 	Except as provided in Section 27 above, Lessor shall approve or disapprove any
written request for approval of a Transfer or sublease which written request shall
include all the evidence required under this Section 27 within forty-five (45)
days from the date of receipt by Lessor of complete documentation supporting such
written request. Lessor shall not unreasonably withhold or condition its approval
of any Transfer or sublease. Any disapproval by Lessor shall set forth a written
explanation of the grounds for such disapproval.
	 
	 	27.9.	 	This Lease shall be binding upon, inure to the benefit of, and be enforceable
by transferees of a Transfer approved by Lessor. No rights shall inure to the benefit
of any transferee of Lessee unless such transferee has been approved by Lessor in
accordance with this Section 27.

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	28.	 	LEASEHOLD MORTGAGES

	 	28.1.	 	Additional Definitions. For purposes of this Section 28, the following terms
shall have the meanings hereinafter set forth:

	 	28.1.1.	 	“Assignment for Security” shall mean a transaction or transactions in
which Lessee:

	 	(i)	 	assigns all or any portion of
its interest hereunder for the purpose of security
(“Assignment”); and/or
	 
	 	(ii)	 	executes a deed of trust
(“Deed of Trust”) with respect to all or any portion of its
interest hereunder; and/or
	 
	 	(iii)	 	executes a mortgage
(“Mortgage”) with respect to all or any portion of its
interest hereunder; and/or
	 
	 	(iv)	 	sells and assigns and leases
or subleases back all or any portion of its interest under
this Lease, in connection with a refinancing transaction in
which Lessee obtains debt, repayment of which is secured in
whole or in part, or becomes an obligation in whole or in part
incurred by Lessee in the transaction in which such sale,
assignment and lease or sublease back is delivered or
consummated. In the event that the Lessee enters into such a
sale-leaseback or lease-leaseback transaction, the Lessee
shall nonetheless remain fully responsible for all of its
obligations under this Lease, even after completing the
sale-leaseback or lease-leaseback transaction, until and
unless it is otherwise released from liability in accordance
with the provisions of this Lease. The use of such a
transaction is permitted for refinancing purposes only, and
not for the initial financing of the Initial Lessee
Improvements. The other party in such a transaction will be
treated as a Leasehold Mortgagee as defined in this Lease.

	 	28.1.2.	 	“Leasehold Mortgage” shall mean the encumbrance created by and all of the
instruments of encumbrance in connection with an Assignment for Security,
including, without limitation, a Mortgage, Deed of Trust, Assignment,
reassignment or other instrument regardless of the form of the transaction.

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	 	28.1.3.	 	“Leasehold Mortgagee” shall mean the secured party under a Leasehold
Mortgage regardless of the type of interest created in such secured party by
the Assignment for Security under such Leasehold Mortgage.
	 
	 	28.1.4.	 	“Mortgaged Premises” shall mean Lessee’s interest under this Lease
encumbered by a Leasehold Mortgage.

	 	28.2.	 	Lessee may, subject to the requirements of this Lease, mortgage its interest
in the leasehold estate created by this Lease and may grant a security interest in the
Personal Property situated thereon by a Leasehold Mortgage. Lessee shall have the
right, subject to the terms and conditions of this Section 28, to enter into
Assignments for Security so long as Lessee (or a successor taking by assignment)
remains liable, to the extent provided for in this Lease, for performance of all Lessee
obligations hereunder. A Leasehold Mortgage shall cover no interest in any real
property other than (a) Lessee’s interest in the Premises and the Trade Fixtures or
some portion thereof, (b) any subleases thereon, and (c) any Personal Property of
Lessee. With the exception of the rights expressly granted to Leasehold Mortgagees in
this Lease, the execution and delivery of a Leasehold Mortgage shall not give a
Leasehold Mortgagee any greater rights than those granted Lessee hereunder.
	 
	 	28.3.	 	Notwithstanding anything to the contrary set forth herein, any rights given
hereunder to Leasehold Mortgagees shall not apply to more than two (2) Leasehold
Mortgagees at any one time. Once a Leasehold Mortgagee is designated by Lessee, Lessee
shall not designate different or additional Leasehold Mortgagees without the written
consent of the Leasehold Mortgagee first designated, or the earlier termination of such
Leasehold Mortgage. In the event that at any time there are more than two (2)
Leasehold Mortgagees, Lessee shall notify Lessor in writing of the two (2) Leasehold
Mortgagees to which such rights should apply.
	 
	 	28.4.	 	Amount and Purpose of Loan

	 	28.4.1.	 	Except for Leasehold Mortgages permitted without Lessor’s permission
pursuant to Section 28.6, at no time may the total of all Leasehold Mortgages
on the Premises, as of the date that the latest Leasehold Mortgage is
granted, exceed eighty percent (80%) of the total value of the Premises as
estimated by the appraiser for the latest Leasehold Mortgagee at or about
such time. The appraiser shall be a current member in good standing of
either the American Society of Appraisers (“ASA”) or the Appraisal Institute
(“MAI”), and shall also be a member of

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	 	 	 	either the Counselors of Real Estate (“CRE”) or the International
Society of Hospitality Consultants (“ISHC”), or their successor
organizations. Promptly upon demand, Lessee shall cause a
complete copy of such appraisal, together with all supporting
documentation, to Lessor for determination of compliance with the
terms and conditions of this Lease. Lessee shall bear all costs
of any such appraisal.

	 	28.4.2.	 	No Leasehold Mortgage will be approved by Lessor or will be entered into
by Lessee that has a maturity date beyond the Term.
	 
	 	28.4.3.	 	From the date which is the termination of the Due Diligence Period until
issuance of a Certificate of Occupancy or Conditional Certificate of
Occupancy, a Leasehold Mortgage shall be made only for the purposes of:

	 	(a)	 	short-term, interim or
construction financing incurred to finance demolition and
construction costs relating to the Premises and Fixtures, or
to acquire and install the Personal Property and supplies;
	 
	 	(b)	 	interim, long-term or
take-out financing of the completed development referred to in
Section 28.4.3(a) above; or
	 
	 	(c)	 	long-term or permanent
financing of the take-out loans referred to in Section
28.4.3(b) above.

	 	28.4.4.	 	From the date of issuance of a Certificate of Occupancy a Leasehold
Mortgage can be made for any purpose.

	 	28.5.	 	Lessor to Approve Initial Leasehold Mortgage
	 
	 	 	 	The Lessor shall be provided with copies of the draft initial Leasehold Mortgage
instruments prior to their execution and shall approve such draft Leasehold
Mortgage instruments or shall make any objections within thirty (30) days from the
date of the receipt of the complete documentation of the Leasehold Mortgage.
Lessor shall review the drafts for the purpose of evaluating their conformity with
this Lease, acceptability of the encumbrance instruments, and consistency with the
Financing Commitment. Lessor shall have an additional five (5) business days to
review and approve or disapprove any revisions to the final Leasehold Mortgage
documentation made after the Lessee and

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	 	 	 	Leasehold Mortgagee have negotiated the financing of the Initial Lessee
Improvements, but prior to the scheduled closing of escrow of the initial
Leasehold Mortgage.

	 	28.6.	 	Lessor’s prior written approval shall not be required for refinancing, whether
pursuant to foreclosure or otherwise, an amount not to exceed the largest amount of
total Leasehold Mortgages in effect at any one time as previously approved by Lessor
pursuant to Sections 28.5 and 28.7 of this Lease provided that the source of funds is a
Bona Fide Institutional Lender. Lessee shall promptly provide Lessor notice of any
such refinancing in accordance with Section 28.7 and Section 39 of this Lease.
	 
	 	28.7.	 	Lessor’s prior written approval shall be required for any refinancing that
exceeds the total amount of all mortgage financing previously approved by Lessor to be
in effect at any one time, or any financing from other than a Bona Fide Institutional
Lender. Lessor shall be provided with copies of any such draft Leasehold Mortgage
instruments prior to their execution and shall approve or shall make any objections to
such draft instruments within thirty (30) days from the date of the receipt of the
complete documentation of the Leasehold Mortgage. Lessor shall review the drafts for
the purpose of evaluating their conformity with this Lease, acceptability of the
encumbrance instruments, and consistency with the refinance commitment. Lessor shall
have an additional five (5) business days to review and approve or disapprove any
revisions to the final Leasehold Mortgage documentation made after the Lessee and
Leasehold Mortgagee have negotiated the refinancing of the Leasehold Mortgage, but
prior to the scheduled closing of escrow of the refinance of the Leasehold Mortgage.
	 
	 	28.8.	 	Lessee shall deliver to Lessor, promptly after execution by Lessee, a copy,
certified by Lessee as a true copy, of any Leasehold Mortgage and any subsequent
amendment, modification or extension thereof, together with the name and address of the
owner(s) and holder(s) thereof.
	 
	 	28.9.	 	Lessee shall use good faith, commercially reasonable efforts to cause its
Leasehold Mortgage documents to contain provisions permitting the disposition and
application of the insurance proceeds and condemnation awards with respect to the
Premises in the manner provided in this Lease. To the extent that Lessee is
unsuccessful in so doing despite such efforts, insurance proceeds and condemnation
awards shall be applied in accordance with the Leasehold Mortgage documents and the
laws of the State of California (to the extent not otherwise addressed under federal
laws).

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	 	28.10.	 	Rights Subject to Lease.

	 	28.10.1.	 	All rights acquired by a Leasehold Mortgagee under any Leasehold Mortgage
shall be subject to each and all of the covenants, conditions and
restrictions set forth in this Lease, and to all rights of Lessor hereunder,
none of which covenants, conditions and restrictions is or shall be waived by
Lessor by reason of the giving of such Leasehold Mortgage, except as
expressly provided in this Lease or otherwise specifically waived by Lessor
in writing.
	 
	 	28.10.2.	 	Notwithstanding any provision of this Lease to the contrary, including,
but not limited to, those representing covenants running with the land, no
Leasehold Mortgagee, including any such Leasehold Mortgagee who obtains title
to the leasehold or any part thereof as a result of foreclosure proceedings
or action in lieu thereof but excluding (a) any other party who thereafter
obtains title to the leasehold or any part thereof from or through such
Leasehold Mortgagee, or (b) any other purchaser at foreclosure sale (other
than the Leasehold Mortgagee itself), shall be obligated by the provisions of
this Lease to construct or complete the Initial Lessee Improvements or to
guarantee such construction or completion; however, any Leasehold Mortgagee
that acquires possession of the Premises, either directly or through a
receiver, may construct and complete the Initial Lessee Improvements or such
portion thereof that the Leasehold Mortgagee determines is necessary to
protect the value of its security, provided, however, that nothing in this
Section or any other Section or provisions of this Lease shall be deemed or
construed to permit or authorize any such holder to devote the Premises or
any part thereof to any uses, or to construct any improvements thereon, other
than those uses or improvements provided or authorized in the Lease, as
hereafter amended or extended from time to time.

	 	28.11.	 	Required Provisions of any Leasehold Mortgage.

	 	28.11.1.	 	Lessee agrees to have any Leasehold Mortgage provide:

	 	(a)	 	that the Leasehold Mortgagee
shall by registered or certified mail give written notice to
Lessor of the occurrence of any event of default under the
Leasehold Mortgage;

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	 	(b)	 	that Lessor shall be given
notice at the time any Leasehold Mortgagee initiates any
foreclosure action.

	 	28.12.	 	Notices to Mortgagee

	 	28.12.1.	 	If Lessee shall have granted any Leasehold Mortgage and if the Leasehold
Mortgagee thereunder shall have given to Lessor written notice substantially
in the form provided in Section 28.12.2 below, Lessor shall give to Leasehold
Mortgagee a copy of any and all notices of default or of the occurrence of an
Event of Default from time to time given to Lessee by Lessor at the same time
as and whenever any such notice shall thereafter be given by Lessor to
Lessee, addressed to such Leasehold Mortgagee at the address last furnished
to Lessor. No such notice by Lessor shall be deemed to have been given to
Lessee unless and until a copy thereof shall have been so given to Leasehold
Mortgagee. Any such notices to Leasehold Mortgagee shall be given in the
same manner as provided in Section 39 of this Lease.
	 
	 	28.12.2.	 	The Leasehold Mortgagee under any Leasehold Mortgage shall be entitled to
receive notices from time to time given to Lessee by Lessor under this Lease
in accordance with Section 28.12.1 above provided such Leasehold Mortgagee
shall have delivered a notice to Lessor in substantially the following form:

“The undersigned does hereby certify that it is a Leasehold Mortgagee, as
such term is defined in that certain Lease entered into by and between the
United States Department of the Interior, National Park Service acting
through the Regional Director, Pacific West Region, an agency of the United
States of America, as Lessor, and ______________________, as Lessee (the
“Lease”), of Lessee’s interest in the Lease demising the parcels, a legal
description of which is attached hereto as Exhibit A and made a part hereof
by this reference. The undersigned hereby requests that copies of any and
all notices from time to time given under the Lease to Lessee by Lessor be
sent to the undersigned at the following address:
_________________________.”

	 	28.12.3.	 	The Leasehold Mortgagee shall be entitled to written notice by Lessor and
Lessee of, and shall have the right to intervene in, any arbitration or other
legal proceeding between Lessor and Lessee pertaining to this Lease or the
rights, duties or obligations of the parties under this Lease.

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	 	28.12.4.	 	Lessee shall not claim any offset against any amount owing to Lessor
under this Lease without prior written notice and consent of each Leasehold
Mortgagee whose consent is required pursuant to the terms of its Leasehold
Mortgage.

	 	28.13.	 	Leasehold Mortgagee’s Right to Cure.
	 
	 	 	 	If Lessee, or Lessee’s successors or assigns, shall mortgage this Lease in
compliance with the provisions of this Section, then, so long as any such
Leasehold Mortgage shall remain unsatisfied of record, the following provisions
shall apply:

	 	28.13.1.	 	In the case of any notice of default given by Lessor to Lessee and
Leasehold Mortgagee in accordance with Section 28.12 above, the Leasehold
Mortgagee shall have the same concurrent cure periods as are given Lessee
under this Lease for remedying a default or causing it to be remedied, plus,
in each case, an additional period of thirty (30) days after the later to
occur of (i) the expiration of such cure period, or (ii) the date that Lessor
has served a notice of default upon Leasehold Mortgagee, and Lessor shall
accept such performance by or at the instance of the Leasehold Mortgagee as
if the same had been made by Lessee; provided, however, if such default
cannot reasonably be cured or remedied by the Leasehold Mortgagee within such
additional thirty (30) day period, such cure period shall be extended (and no
Event of Default shall be deemed to have occurred under this Lease) so long
as the Leasehold Mortgagee commences the cure or remedy within such period,
and prosecutes the completion thereof with diligence and dispatch, subject to
Force Majeure and delays caused by foreclosure, bankruptcy or insolvency
proceedings.
	 
	 	28.13.2.	 	Anything herein contained to the contrary notwithstanding, upon the
occurrence of an Event of Default, other than an Event of Default due to a
default in the payment of money or other default reasonably susceptible of
being cured prior to Leasehold Mortgagee obtaining possession, Lessor shall
take no action to effect a termination of this Lease if, within thirty (30)
days after notice of such Event of Default is given to each Leasehold
Mortgagee, a Leasehold Mortgagee shall have (a) obtained possession of the
Premises (including possession by a receiver), or (b) notified Lessor of its
intention to institute foreclosure

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	 	 	 	proceedings or otherwise acquire Lessee’s interest under the
Lease, and thereafter promptly commences and prosecutes such
proceedings with diligence and dispatch (subject to Force Majeure
and delays caused by bankruptcy or insolvency proceedings). Upon
such a foreclosure or other acquisition of Lessee’s interest under
the Lease, Lessor shall recognize such Leasehold Mortgagee, or any
other foreclosure or trustee sale purchaser or recipient of any
deed in lieu as Lessee hereunder (provided that such acquirer is
not an Excluded Contractor) for a period of sixty (60) days
following such foreclosure or other acquisition of Lessee’s
interest under the Lease to obtain approval by the Director of the
National Park Service as required under 36 C.F.R. Section 18.10(d)
and Section 27 above for approval of a successor lessee and upon
such approval, such successor lessee shall take Lessee’s interest
in the Premises subject to all of the terms, agreements,
covenants, conditions and provisions in this Lease and shall
accept and agree in writing to be bound by all the terms and
conditions of this Lease and assume Lessee’s obligations
hereunder. A Leasehold Mortgagee anticipating acquisition of
Lessee’s interest under the Lease may request prior approval by
the Director of a proposed Transferee (including a Transfer to
such Leasehold Mortgagee). A Leasehold Mortgagee, upon acquiring
Lessee’s interest under this Lease, shall be required promptly to
cure all other defaults then reasonably susceptible of being cured
by such Leasehold Mortgagee. The foregoing provisions of this
Section 28.13.2 are subject to the following: (i) no Leasehold
Mortgagee shall be obligated to continue possession or to continue
foreclosure proceedings, provided that it complies with the last
sentence of this Section 28.13.2; (ii) nothing herein contained
shall preclude Lessor, subject to the provisions of this Section,
from exercising any rights or remedies under this Lease (other
than a termination of this Lease to the extent otherwise permitted
hereunder) with respect to any other Event of Default by Lessee
during the pendency of such foreclosure proceedings; and (iii)
such Leasehold Mortgagee shall agree with Lessor in writing to
comply during the period Lessor forebears from terminating this
Lease with such of the terms, conditions and covenants of this
Lease as are reasonably susceptible of being complied with by such
Leasehold Mortgagee. Notwithstanding anything to the contrary,
including an

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	 	 	 	agreement by Leasehold Mortgagee given under clause (iii) of the
preceding sentence, Leasehold Mortgagee shall have the right at
any time to notify Lessor that it has relinquished possession of
the Premises or that it will not institute foreclosure proceedings
or, if such foreclosure proceedings have commenced, that it has
discontinued them, and, in such event, the Leasehold Mortgagee
shall have no further liability under such agreement from and
after the date it delivers such notice to Lessor, and, thereupon,
Lessor shall be entitled to seek the termination of this Lease as
otherwise herein provided. Upon any such termination, the
provisions of this Section 28.13.2 shall apply.

	 	28.13.2.1.	 	If the default of Lessee is with respect to construction
of the Initial Lessee Improvements, nothing contained in this
Section 28.13 or in any other Section or provision of this
Lease shall be deemed to require, permit or authorize
Leasehold Mortgagee, either before or after foreclosure or
action in lieu thereof, to undertake or continue the
construction or completion of the Initial Lessee Improvements
beyond the extent necessary to conserve or protect the Initial
Lessee Improvements or construction already made, without
first (in its sole discretion) having expressly assumed
Lessee’s obligation to Lessor by written agreement reasonably
satisfactory to Lessor, to complete, in the manner provided in
this Lease, the Initial Lessee Improvements on the Premises or
the part thereof to which the lien or title of such Leasehold
Mortgagee relates, and submitted evidence satisfactory to
Lessor that it has the qualifications and financial
responsibility necessary to perform such obligation.
	 
	 	28.13.2.2.	 	Upon assuming Lessee’s obligations to complete the
Initial Lessee Improvements in accordance with Section
28.13.2.1 above, the Leasehold Mortgagee shall be required
only to exercise due diligence in completion of the
construction of the Initial Lessee

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	 	 	 	Improvements but shall not be required to complete
construction of the Initial Lessee Improvements
within the dates set forth in Section 15 of this
Lease.

	 	28.13.2.3.	 	Any transferee of a Leasehold Mortgagee or any purchaser
at a foreclosure sale other than a Leasehold Mortgagee shall
be obligated to complete the Initial Lessee Improvements and
exercise due diligence in the completion of the construction
thereof, but shall not be required to complete construction of
the Initial Lessee Improvements within the dates set forth in
Section 15 of this Lease.
	 
	 	28.13.2.4.	 	Any assuming Leasehold Mortgagee or transferee properly
completing such Initial Lessee Improvements shall be entitled,
upon written request made to Lessor, to a Certificate of
Occupancy from Lessor with respect to such Initial Lessee
Improvements to the same extent and in the same manner as
Lessee would have been entitled had Lessee not defaulted.

	 	28.13.3.	 	In the event of the termination of this Lease prior to the expiration of
the Term, except (i) by eminent domain, or (ii) as the result of damage or
destruction as provided in Section 24 of this Lease, Lessor shall serve upon
the Leasehold Mortgagee written notice that this Lease has been terminated,
together with a statement of any and all sums which would at that time be due
under this Lease but for such termination, and of all other defaults, if any,
under this Lease then known to Lessor. The Leasehold Mortgagee shall
thereupon have the option to obtain a new Lease in accordance with and upon
the following terms and conditions:

	 	28.13.3.1.	 	Upon the written request of the Leasehold Mortgagee,
within thirty (30) days after service of such notice that this
Lease has been terminated, Lessor shall enter into a new lease
of the Premises with the most senior Leasehold Mortgagee
giving notice within such period; and

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	 	28.13.3.2.	 	Such new Lease shall be entered into at the reasonable
cost of the Leasehold Mortgagee thereunder, shall be effective
as of the date of termination of this Lease, and shall be for
the remainder of the Term and at the rent and upon all the
agreements, terms, covenants and conditions hereof, including
any applicable rights of renewal. Such new Lease shall
require the Leasehold Mortgagee to perform any unfulfilled
obligation of Lessee under this Lease which is reasonably
susceptible of being performed by such Leasehold Mortgagee
other than obligations of Lessee with respect to construction
of the Initial Lessee Improvements, which obligations shall be
performed by Leasehold Mortgagee in accordance with this
Section 28.13.3. Upon the execution of such new Lease, the
Leasehold Mortgagee shall pay any and all sums which would at
the time of the execution thereof be due under this Lease but
for such termination, and shall pay all expenses, including
reasonable counsel fees, court costs and disbursements
incurred by Lessor in connection with such defaults and
termination, the recovery of possession of the Premises, and
the preparation, execution and delivery of such new Lease.

	 	28.13.4.	 	Effective upon the commencement of the term of any new Lease executed
pursuant to this Section 28.13.4, all subleases then in effect shall be
assigned and transferred without recourse by Lessor to Leasehold Mortgagee
and all monies on deposit with Lessor which Lessee would have been entitled
to use but for the termination or expiration of this Lease may be used by
Leasehold Mortgagee for the purposes of and in accordance with the provisions
of such new lease. Between the date of termination of this Lease and
commencement of the term of the new lease, Lessor shall not (a) enter into
any new subleases, management agreements or agreements for the maintenance of
the Premises or the supplies therefor which would be binding upon Leasehold
Mortgagee if

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	 	 	 	Leasehold Mortgagee enters into a new lease, (b) cancel or
materially modify any of the existing subleases, management
agreements or agreements for the maintenance of the Premises or
the supplies therefor, or (c) accept any cancellation, termination
or surrender thereof without the written consent of Leasehold
Mortgagee, which consent shall not be unreasonably withheld or
delayed.

	 	28.13.5.	 	Anything herein contained to the contrary notwithstanding, the provisions
of this Section 28.13 shall inure only to the benefit of the holders of the
Leasehold Mortgages which are permitted hereunder.
	 
	 	28.13.6.	 	No agreement between Lessor and Lessee amending, terminating or
surrendering this Lease, or election by Lessee not to continue this Lease as
provided for herein, shall be valid or effective without Leasehold
Mortgagee’s written consent.
	 
	 	28.13.7.	 	No union of the interests of Lessor and Lessee herein shall result in a
merger of this Lease in the fee interest, so long as any Leasehold Mortgage
shall be unsatisfied.
	 
	 	28.13.8.	 	Anything herein contained to the contrary notwithstanding, no Leasehold
Mortgagee, or its designee or nominee, shall become liable under the
provisions of this Lease unless and until such time as it becomes, and then
only for so long as it remains, the owner of the leasehold estate created
hereby.

	 	28.14.	 	Assignment by Leasehold Mortgagee
	 
	 	 	 	If a Leasehold Mortgagee shall acquire Lessee’s interest in this Lease as a result
of a sale under said Leasehold Mortgage pursuant to a power of sale contained
therein, pursuant to a judgment of foreclosure, through any transfer in lieu of
foreclosure, or through settlement of or arising out of any pending or
contemplated foreclosure, bankruptcy or insolvency action, or in the event a
Leasehold Mortgagee becomes Lessee under this Lease or any new Lease obtained
pursuant to this Section 28.13.4, such Mortgagee’s right thereafter to assign or
transfer this Lease or such new Lease shall be subject to the restrictions of
Section 27 of this Lease. In the event Leasehold Mortgagee subsequently assigns
or transfers its interest under this Lease after acquiring the same by foreclosure
or deed in lieu of foreclosure or subsequently assigns or transfers its interest
under any new lease obtained pursuant to Section 28.13.4 above, and in

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	 	 	 	connection with any such assignment or transfer, Leasehold Mortgagee takes back a
mortgage or deed of trust encumbering such leasehold interest to secure a portion
of the purchase price given to Leasehold Mortgagee for such assignment of
transfer, then such mortgage or deed of trust shall be considered a Leasehold
Mortgage, and Leasehold Mortgagee shall be entitled to receive the benefit and
enforce the provisions of this Section 28 and any other provisions of this Lease
intended for the benefit of the holder of a Leasehold Mortgage.

	 	28.15.	 	Condemnation Proceeds
	 
	 	 	 	If more than one Leasehold Mortgagee should assert a right to condemnation or
private sale proceeds payable to, or for the account of, Lessee, then subject to
the terms of the applicable Leasehold Mortgage, Lessee’s share of the condemnation
or private sale proceeds shall be distributed in accordance with the directions of
the Leasehold Mortgagee whose Leasehold Mortgage constitutes the superior lien on
the leasehold estate.
	 
	 	28.16.	 	Execution of Documents

	 	28.16.1.	 	Lessor shall, upon request from Lessee, execute and deliver from time to
time any agreement or document which may reasonably be deemed necessary to
implement the provisions of this Section 28, provided that subordination of
Lessor’s fee interest shall not be required.
	 
	 	28.16.2.	 	Subject to the conditions set forth below, Lessor and Lessee shall
cooperate to include in this Lease by suitable amendment from time to time
any provision which may reasonably be requested by any proposed Leasehold
Mortgagee for the purpose of implementing the mortgagee protection provisions
contained in this Lease and allowing such Leasehold Mortgagee reasonable
means to protect or preserve the lien of the Leasehold Mortgage or to avoid
the impairment of its security on the occurrence of a default under the terms
of this Lease.
	 
	 	 	 	Lessor and Lessee each agree to execute and deliver (and to
acknowledge, if necessary, for recording purposes) any agreement
reasonably necessary to effect any such amendment; provided,
however, that any such amendment shall not, except as specifically
provided in this Lease, in any way:

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	 	(a)	 	affect the Term, require the
subordination of Lessor’s fee simple title or reversionary
interest, or affect the Annual Rental and other monetary
obligations under this Lease, nor
	 
	 	(b)	 	otherwise in any material
respect adversely affect any rights or obligations of Lessor
or its mortgagee under this Lease.

	 	28.16.3.	 	Lessee shall reimburse Lessor for all reasonable fees, including
non-affiliate attorneys’ fees, up to One Thousand Dollars ($1,000) incurred
by Lessor in connection with any agreement or document which Lessor is
requested to execute pursuant to this Section 28.16.

	29.	 	TRANSFER BY LESSOR

	 	29.1.	 	Lessor shall have the right to transfer any or all of its rights and
obligations under this Lease. This Lease shall not be affected by any such transfer,
and Lessee agrees to attorn to the purchaser or transferee.
	 
	 	29.2.	 	If this Lease is transferred by Lessor, Lessor will, as a condition of such
transfer, cause the transferee to recognize Lessee’s and any Leasehold Mortgagee’s
rights hereunder.
	 
	 	29.3.	 	In the event of any transfer of Lessor’s interest in and to the Premises,
Lessor, subject to the provisions hereof, (and in case of any subsequent transfers, the
then transferor) will automatically be relieved from and after the date of such
transfer of all liability with regard to the performance of any covenants or
obligations on the part of Lessor (or such transferor, as the case may be) contained in
this Lease thereafter to be performed, but not from liability incurred by Lessor (or
such transferor, as the case may be) on account of covenants or obligations to be
performed by Lessor (or such transferor, as the case may be) hereunder prior to the
date of such transfer.
	 
	 	29.4.	 	If this Lease is assigned to any person or entity other than another
department or agency of the United Stated Government, Lessor, to the extent feasible,
shall notify Lessee at least sixty (60) days prior to such assignment. Upon such
notification, Lessee may make recommendations as to amendments to this Lease that would
delete those portions of the Lease that have been included in the Lease because of
Lessor’s status as an instrumentality of the United States Government and replace those
provisions with provisions that are reasonably and customarily used with hotel ground
leases for urban

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	 	 	 	properties similar to the Premises and appropriate given the circumstances of the
proposed assignment. Such amendments may be made as part of the assignment to the
extent they are, in the opinion of Lessor, appropriate and reasonable and
customary and do not otherwise alter the relationships between the parties.

	30.	 	RIGHT TO ESTOPPEL CERTIFICATES

Each party, within twenty (20) days written request from the other party, shall execute and deliver
to the other party, in reasonable form, a certificate stating that this Lease is unmodified and in
full force and effect, or in full force and effect as modified, and stating the modifications. The
certificate also shall state the amount of Annual Rental, the Base Rental, and Percentage Rental,
the dates to which the Annual Rental has been paid in advance, and the amount of any security
deposits or prepaid rent and such other matters as may be reasonably or customarily requested.

	31.	 	DEFAULTS

	 	31.1.	 	The occurrence of any one or more of the following events shall constitute an
“Event of Default” under the terms of this Lease (regardless of the pendency of any
bankruptcy, reorganization, receivership, insolvency or other proceedings, in law, in
equity or before any administrative tribunal which has or might have the effect of
preventing Lessee from complying with the terms of this Lease):

	 	31.1.1.	 	Lessee shall fail to pay any Annual Rental when due to Lessor subject to
Lessee’s right to cure within fifteen (15) days after notice by Lessor of
such failure to pay;
	 
	 	31.1.2.	 	Lessee shall fail to perform or comply with any other term hereof, and
such failure shall continue beyond the applicable cure period, if any, or, if
none, for more than thirty (30) days after notice thereof from Lessor, or if
such default cannot reasonably be cured within such thirty (30) day period,
Lessee shall not within such period commence with due diligence and dispatch
the curing of such default, or having so commenced, shall thereafter cease,
fail or neglect to prosecute or complete with diligence and dispatch the
curing of such default;
	 
	 	31.1.3.	 	the filing by or against Lessee of any proceedings under any state or
Federal insolvency or bankruptcy law, or any comparable law that is now or
hereafter may be in effect, whether for liquidation or reorganization, which
proceedings if filed against Lessee are not dismissed or stayed within sixty
(60) days;

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	 	31.1.4.	 	the entry of an order for relief against Lessee under any bankruptcy or
reorganization case;
	 
	 	31.1.5.	 	the appointment of a receiver, trustee or custodian of all or any part of
the property of Lessee which appointment with respect to Lessee is not
dismissed within sixty (60) days; provided, however, that the appointment of
a receiver pursuant to the exercise by a Leasehold Mortgagee of its rights
under a Leasehold Mortgage shall not be an Event of Default hereunder;
	 
	 	31.1.6.	 	the assignment of all or any part of the property, if any, of Lessee for
the benefit of creditors;
	 
	 	31.1.7.	 	the failure of Lessee to give written notice to Lessor of Lessee’s
intention to commence proceedings under any state or Federal insolvency,
bankruptcy or any comparable law that is now or hereafter may be in effect,
whether for liquidation or reorganization, at least thirty (30) days prior to
the commencement of such proceedings;
	 
	 	31.1.8.	 	a writ of attachment or execution is levied on this Lease which is not
released within thirty (30) days;
	 
	 	31.1.9.	 	the Premises are abandoned or cease to be used for the uses permitted
hereunder, which abandonment or cessation is not cured within thirty (30)
days after notice thereof from Lessor (provided, however, that no such thirty
(30) day cure period shall be applicable to any such abandonment or cessation
from and after the first occurrence of any such abandonment or cessation);
	 
	 	31.1.10.	 	Lessee suffers or permits a Transfer of this Lease or any interest
therein to occur in violation of this Lease, or sublets all or any portion of
the Premises in violation of this Lease, which violation is not remedied
within thirty (30) days after notice thereof from Lessor.

	32.	 	REMEDIES

	 	32.1.	 	Upon an Event of Default, Lessor shall have the following rights and remedies
in addition to any rights or remedies available to Lessor at law or inequity, or under
this Lease.

	 	32.1.1.	 	The rights and remedies provided by California Civil Code, Section 1951.2;

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	 	32.1.2.	 	The rights and remedies provided by California Civil Code, Section 1951.4,
that allows Lessor to continue this Lease in effect and to enforce all of its
rights and remedies under this Lease, including the right to recover Annual
Rental as it becomes due, for so long as Lessor does not terminate Lessee’s
right to possession; provided, however, if Lessor elects to exercise its
remedies described in this Section 32.1.2 and Lessor does not terminate this
Lease, and if Lessee requests Lessor’s consent to an assignment of this Lease
or a sublease of the Premises at such time as Lessee is in default, Lessor
shall not unreasonably withhold its consent to such assignment or sublease.
Acts of Building Maintenance or Preservation Maintenance, efforts to relet
the Premises or the appointment of a receiver upon Lessor’s initiative to
protect its interest under this Lease shall not constitute a termination of
Lessee’s rights to possession;
	 
	 	32.1.3.	 	The right to terminate this Lease by giving notice to Lessee in accordance
with Applicable Law;
	 
	 	32.1.4.	 	If Lessor elects to terminate this Lease, the right and power to enter the
Premises and remove therefrom all persons and property and, to store such
property in a public warehouse or elsewhere at the cost of and for the
account of Lessee, and to sell such property and apply such proceeds
therefrom pursuant to Applicable Law.

	 	32.2.	 	No act by Lessor allowed by this Section 32 shall terminate this Lease unless
Lessor notifies Lessee that Lessor elects to terminate this Lease.
	 
	 	32.3.	 	In the event Lessor terminates Lessee’s right to possession of the Premises
pursuant to this Section 32, Lessee hereby expressly waives any and all rights to
recover or regain possession of the Premises under any rights of redemption to which it
may be entitled by or under any present or future law, including, without limitation,
California Code of Civil Procedure Sections 1174 and 1179.
	 
	 	32.4.	 	Upon the occurrence of an Event of Default, Lessor shall have the right, but
not the obligation, to take such action as reasonably necessary to cure such default.
	 
	 	32.5.	 	The remedies given to Lessor in this Section shall be in addition and
supplemental to all other rights or remedies which Lessor may have at law or in equity.

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	 	32.6.	 	Liability Between the Parties

	 	32.6.1.	 	Lessee’s liability pursuant to this Lease is limited to the Lessee’s
interest in the Premises; provided that, Lessee expressly agrees that Lessor
may recover directly from Lessee and/or, subject to Section 28 of this Lease,
any Leasehold Mortgagee that has acquired Lessee’s interest in this Lease
and/or the Premises at a foreclosure sale or by deed in lieu of foreclosure
or assignment of the Leasehold Mortgage held by such Leasehold Mortgagee (but
not from any officer, director, employee, representative or attorney, past,
present or future of Lessee or any such Leasehold Mortgagee), only those
damages that arise out of or in connection with (and with respect to any
Leasehold Mortgagee acquiring the Lessee’s interest in this Lease at a
foreclosure sale or by deed in lieu of foreclosure or assignment of the
Leasehold Mortgage held by such Leasehold Mortgagee, such shall have occurred
on or after the date of acquisition by such Leasehold Mortgagee ) (a) any
Impositions not paid by Lessee; (b) uninsured losses to the extent that such
insurance covering such losses was required to be maintained by Lessee
pursuant to Section 23 of this Lease, but such insurance was in fact not so
maintained; (c) the application of any insurance or condemnation proceeds in
a manner inconsistent with or contrary to the provisions of this Lease; (d)
the cost of razing any improvements Lessee fails to raze in accordance with
the terms of Section 24 of this Lease; (e) any damages suffered by Lessor as
the result of the breach by Lessee of the covenants contained in Section 22
of this Lease, whether or not any action or proceeding is commenced,
including, without limitation, reasonable attorney fees and all costs,
disbursements and expenses of Lessor’s outside counsel, expert witness fees,
transcript preparation fees and costs and document copying, exhibit
preparation, courier, postage, facsimile and long distance expenses; (f) any
expenses in enforcing the limited recourse provisions of this Section 32.6,
whether or not any action or proceeding is commenced, including, without
limitation, reasonable attorney fees and all costs, disbursements and
expenses of Lessor’s outside counsel, expert witness fees, transcript
preparation fees and costs and document copying, exhibit preparation,
courier, postage, facsimile

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	 	 	 	and long distance expenses; and (g) waste committed or permitted
by Lessee.

	 	32.6.2.	 	Lessee agrees that it will have no recourse with respect to any obligation
of Lessor under this Lease, or for any claim based upon this Lease or
otherwise, against any officer, director, employee, representative or
attorney, past, present or future, of Lessor, or against any person other
than Lessor, or against Lessor except to the extent of the value of Lessor’s
interest in the Premises, whether by virtue of any constitution, statute,
rule of law, rule of equity, enforcement of any assessment as penalty, or by
reason of any matter prior to the execution and delivery of this Lease, or
otherwise. By Lessee’s execution and delivery hereof and as part of the
consideration for Lessor’s obligations hereunder all such liability is
expressly waived.

	 	32.7.	 	No failure by Lessor to insist upon the strict performance of any term,
covenant, agreement, provision, condition or limitation of this Lease or to exercise
any right or remedy upon an Event of Default, and no acceptance by Lessor of full or
partial monetary obligation during the continuance of any such Event of Default, shall
constitute a waiver of any such Event of Default or of such term, covenant, agreement,
provision, condition or limitation. No term, covenant, agreement, provision, condition
or limitation of this Lease and no Event of Default under this Lease may be waived,
altered or modified except by a written instrument executed by Lessor. No waiver of
any Event of Default shall affect or alter this Lease, but each and every term,
covenant, agreement, provision, condition and limitation of this Lease shall continue
in full force and effect with respect to any other then existing or subsequent Event of
Default.
	 
	 	32.8.	 	No expiration or termination of this Lease pursuant to the terms hereof or by
operation of law or otherwise and no repossession of the Premises or any part thereof
pursuant to the terms hereof or by operation of law or otherwise, shall relieve Lessee
of its liabilities and obligations hereunder arising prior to termination of this
Lease, all of which shall survive such expiration, termination or repossession,
including, without limitation, the rights of Lessor for indemnification for liability,
personal injuries or property damage, nor shall anything in this Lease be deemed to
affect the right of Lessor to equitable relief.

	33.	 	ALTERNATIVE DISPUTE RESOLUTION

	 	33.1.	 	In the event of any dispute between the Parties arising out of the specific
provisions of this Lease listed below, or any other provision of

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	 	 	 	this Lease that expressly provides for alternative dispute resolution pursuant to
this Section 33, or a breach of any such provisions solely between Lessor and
Lessee, but not including a default with respect to the timely payment of Annual
Rental, or if the parties otherwise agree to do so, Lessee and Lessor shall meet
promptly in an effort to resolve the dispute extrajudicially. The following
provisions of this Lease shall be subject to alternative dispute resolution
pursuant to this Section 33:

	 	33.1.1.	 	Section 2.3.7 [Retained Space], only with respect to the rate per unit
charged Lessor;
	 
	 	33.1.2.	 	Section 7.3 [Lessor’s Audit], with respect to an audit conducted by either
Party;
	 
	 	33.1.3.	 	Section 10.1.1 [Use of the Premises], only with respect to whether
Lessee’s use complies with the use specified in Section 10.1.1;
	 
	 	33.1.4.	 	Sections 19.4.1 and 19.4.2 [Building Maintenance and Preservation
Maintenance], only with respect to termination by Lessor or Lessee;
	 
	 	33.1.5.	 	Section 21.1 [General Compliance with Applicable Law];
	 
	 	33.1.6.	 	Section 23.7 [Changes in Insurance Requirements];
	 
	 	33.1.7.	 	Section 24 [Damage or Destruction], only with respect to termination by
Lessee;
	 
	 	33.1.8.	 	Section 32 [Remedies]; with respect to any provision pursuant to which
Lessor desires to exercise its right of termination; and
	 
	 	33.1.9.	 	Section 34 [Surrender and Vacate the Premises].

	 	33.2.	 	If the dispute is not resolved as a result of such meeting, the dispute shall
be referred to the senior management of each party within fifteen (15) days after the
meeting prescribed in Section 33.1 of this Lease.
	 
	 	33.3.	 	The members of the senior management of each party shall meet to attempt to
resolve the dispute within thirty (30) days after the dispute has been referred to them
as prescribed in Section 33.2 of this Lease.
	 
	 	33.4.	 	Prior to the meeting of the members of the senior management of each party,
the Parties shall exchange a written summary of the issue(s) and the underlying
evidence relating to the dispute. The disputing party shall submit its written summary
to the other party twenty (20) days before the

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	 	 	 	meeting of the senior management. This submission shall set for the basis of its
dispute and identify the member of its senior management authorized to resolve the
dispute on its behalf. Then, ten (10) days thereafter, the other party shall
submit its written summary to the disputing party. This submission shall respond
to the matters raised in the written summary provided by the disputing party and
identify the member of its senior management authorized to resolve the dispute on
its behalf.

	 	33.5.	 	If the dispute is not resolved by the senior management of each party within
thirty (30) days of the last submission provided pursuant to Section 33.4 above, the
Parties will attempt in good faith to resolve the dispute by mediation conducted in
accordance with the Commercial Mediation Rules of the American Arbitration Association.
	 
	 	33.6.	 	Insofar as the Federal Government adopts and maintains binding arbitration as
a method of dispute resolution and to the extent of the development by the United
States of applicable procedures for such binding arbitration, then Lessor and Lessee
shall meet to confer as to whether to adopt such procedures for binding arbitration
that may be promulgated for use by the United States.
	 
	 	33.7.	 	Should the resolution of a dispute under this Section 33 result in a written
agreement by the Lessor that (a) an amount of money is owed by the Lessor to the Lessee
and if Lessor has not paid such amount within thirty (30) days thereafter, then Lessee
may, in its sole discretion, elect to receive payment of such amount by reducing
subsequent monetary payments due by Lessee to Lessor in a total amount equaling the
amount due; or (b) that performance is required by Lessee, then Lessee shall have the
right to cure within thirty (30) days of receipt of the written agreement by the Lessor
pursuant to this Section 33.7, or if such performance cannot reasonably be completed
within such thirty (30) day period, Lessee shall commence within such thirty (30) day
period with due diligence and dispatch the curing and shall, having so commenced,
thereafter not cease, fail or neglect to prosecute or complete with diligence and
dispatch such cure.

	34.	 	SURRENDER AND VACATE THE PREMISES

	 	34.1.	 	On the Termination Date or other termination of the Term, Lessee shall
surrender and vacate the Premises and the Fixtures, remove the Personal Property
therefrom, and return the Premises and improvements thereon, including the Initial
Lessee Improvements, Alterations, Preservation Maintenance, Fixtures and all of
Lessor’s personal property, if any, on the Premises to as good an order and condition
as would be reasonably expected given maintenance and care

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	 	 	 	in accordance with the terms of this Lease and given normal use and wear and tear
on the property. All Fixtures shall be in good working order and shall remain
attached to the Premises. Notwithstanding the removal of any Trade Fixtures, all
major building systems including heating, air conditioning, electrical, security
lighting, fire detection, smoke detection, building fire suppression, alarm,
drainage, water supply, elevator, escalator, and sewer shall be complete and in
good working order and shall function as designed. Lessee shall execute all
documents as Lessor may deem necessary to evidence any such other termination.

	 	34.2.	 	If Lessee shall fail or neglect to remove the Personal Property and shall fail
to leave the Premises in good order as described in this Section 34, then, at Lessor’s
option, the Personal Property shall either become the property of Lessor without
compensation therefor, or Lessor may cause it to be removed and the Premises to be
repaired at the expense of Lessee, and no claim for damages against Lessor or Lessor’s
Agents, shall be created by or made on account of such removal and repair work and all
major building systems shall be returned to working order at the expense of Lessee.
	 
	 	34.3.	 	Ninety (90) days prior to the Termination Date, Lessee and Lessor shall
jointly, or Lessor shall in the absence of Lessee, prepare an Inventory and Condition
Report of the Premises to constitute the basis for materials and work that may be
necessary to meet the conditions of this Section 34.

	35.	 	HOLDING OVER

This Lease shall terminate upon the Termination Date and any holding over by Lessee after the
Termination Date shall not constitute a renewal of this Lease or give Lessee any rights under this
Lease or in or to the Premises.

	36.	 	REPRESENTATIONS AND WARRANTIES OF LESSEE

Lessee hereby represents and warrants to Lessor as follows:

	 	36.1.	 	Lessee is a limited partnership duly formed and validly existing under the
laws of the State of California.
	 
	 	36.2.	 	Lessee has the right, power, legal capacity and authority to enter into and
perform its obligations under this Lease, and to develop, construct, and operate the
Premises as contemplated by this Lease; all approvals or consents of any person(s)
required in connection with the execution and performance of this Lease have been
obtained. The execution and performance of this Lease will not result in or constitute
an Event of

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	 	 	 	Default under this Lease or event that would, with notice or lapse of time or
both, be a default, breach or violation of the organizational instruments
governing Lessee or any agreement or any order or decree of any court or Agency to
which Lessee is a party or to which it is subject.

	 	36.3.	 	Lessee has taken all necessary action to authorize the execution, delivery and
performance of this Lease and this Lease constitutes the legal, valid and binding
obligation of Lessee.

	37.	 	REPRESENTATIONS AND WARRANTIES OF LESSOR

Lessor hereby represents and warrants to Lessee as follows:

	 	37.1.	 	Lessor is an Agency of the United States of America.
	 
	 	37.2.	 	Lessor has taken all necessary action to authorize the execution, delivery and
performance of this Lease, and this Lease constitutes the legal, valid and binding
obligation of Lessor.
	 
	 	37.3.	 	Lessor has made no representations or warranties, direct or implied, written
or verbal, with respect to the Premises or any other property owned by Lessor.

	38.	 	COMPLIANCE WITH FEDERAL EQUAL OPPORTUNITY LAWS

To the extent that the following Orders, Acts, Laws, and regulations apply to this Lease then
Lessee shall comply with the requirements of (a) Title VII of the Civil Rights Act of 1964 (as
amended), as well as Executive Order No. 11246 of September 24, 1965, as amended by Executive Order
11375 of October 13, 1967; (b) Title V, Sections 503 and 504 of the Rehabilitation Act of September
26, 1973, P.L. 93-112 (as amended), which prohibits discrimination on the basis of disability and
requires Government contractors and subcontractors to take affirmative action to employ and advance
in employment qualified handicapped individuals; (c) 41 C.F.R. Chapter 60, which prescribes
affirmative action requirements for government contractors and subcontractors; (d) the Age
Discrimination in Employment Act of December 15, 1967, (as amended); (e) the Americans with
Disabilities Act, 42 U.S.C. Sections 12111 et seq.; (f) and all other Applicable Laws relating to
nondiscrimination in employment and in providing facilities and services to the public, and Lessee
shall do nothing in advertising for employees that will prevent those covered by these laws from
qualifying for such employment.

	39.	 	NOTICES

Any notice, consent or other communication required or permitted under this Lease shall be in
writing and shall be delivered by hand, sent by courier, sent by prepaid registered or certified
mail with return receipt requested, and shall be deemed to have

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been given on the earliest of (a) receipt, (b) one (1) business day after delivery to a courier for
overnight expedited delivery service, or (c) five (5) business days after the date deposited in the
United States mail, registered or certified, with postage prepaid and return receipt requested
(provided that such return receipt must indicate receipt at the address specified), and addressed
as appropriate to the following addresses (or to such other or further addresses as the Parties may
designate by notice given in accordance with this Section 39):

If to Lessor:

Regional Director, Pacific West Region

U.S. Department of the Interior

National Park Service

600 Harrison Street, Suite 600

San Francisco, California 94107

			
	with copy to:	 	Superintendent

San Francisco Maritime National Historical Park

Fort Mason, Building. E, Room 265

San Francisco, California 94123

If to Lessee:

Maritime Hotel Associates, L.P.

c/o Kimpton Hotel and Restaurant Group, Inc.

222 Kearny Street, Suite 200

San Francisco, California 94108

Attention: Chief Financial Officer

And to:

Lessee’s Leasehold Mortgagee pursuant to Section 28 of this Lease.

	40.	 	LESSOR’S RIGHT TO EXHIBIT THE PREMISES

During the final two (2) years of the Term, Lessor shall have the right to enter the Premises at
all reasonable times during normal business hours and after giving twenty-four (24) hours prior
notice for the purposes of exhibiting the same to prospective lessees or developing plans for
conversion of the same to full Park use after expiration of the Term. Lessor shall not take any
action under this Section 40 that causes or is likely to cause material interference with Lessee’s
use and/or occupancy of the Premises under the terms of this Lease.

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	41.	 	NO PARTNERSHIP OR JOINT VENTURE

Lessor is not for any purpose a partner or joint venturer of Lessee in the development or operation
of the Premises or in any business conducted on the Premises. Lessor shall not under any
circumstances be responsible or obligated for any losses or liabilities of Lessee.

	42.	 	ANTI-DEFICIENCY ACT

Lessee and Lessor agree that nothing contained in this Lease shall be construed as binding Lessor
to expend, in any fiscal year, any sum in excess of the appropriation made by Congress for that
fiscal year in furtherance of the subject matter of this Lease, or to involve Lessor in any
contract or other obligation for the future expenditure of money in excess of such appropriations.

	43.	 	GENERAL PROVISIONS

	 	43.1.	 	No Congressional Conflict of Interest
	 
	 	 	 	No member or delegate to Congress or Resident Commissioner shall be admitted to
any share or part of this Lease, or to any benefit that may arise therefrom, but
this provision shall not be construed to extend to this Lease if made with a
corporation for its general benefit.
	 
	 	43.2.	 	No Third Party Beneficiaries
	 
	 	 	 	This Lease shall not, nor be deemed nor construed to, confer upon any person or
entity, other than the Parties hereto, any right or interest, including, without
limiting the generality of the foregoing, any third party beneficiary status or
any right to enforce any provision of this Lease.
	 
	 	43.3.	 	No Preferential Renewal and Relocation Assistance
	 
	 	 	 	This Lease provides no right of renewal, and Lessee hereby waives any preferential
right of renewal of this Lease under 16 U.S.C. Section 20 or otherwise. No rights
shall be acquired by virtue of this Lease entitling Lessee to claim benefits under
the Uniform Relocation Assistance and Real Property Acquisition Policies Act of
1970, Public Law 91-646.
	 
	 	43.4.	 	Memorandum of Lease
	 
	 	 	 	Lessor will record a Memorandum of Lease at no charge to Lessee other than normal
per page recording costs, except that Lessee shall pay any costs which may be
associated with such act of recordation that exceed $100. For the purpose of
recordation by Lessor, Lessee shall at Lessee’s sole expense prepare the
document(s) necessary for recordation and provide such documents to Lessor.

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	 	43.5.	 	Broker’s Commissions
	 
	 	 	 	Lessee warrants that no person or selling agency has been employed or retained to
solicit or secure this Lease upon an agreement or understanding for a commission,
percentage, brokerage or contingent fee. For breach or violation of this
warranty, Lessor shall have the right to annul this Lease without liability.
	 
	 	43.6.	 	Severability
	 
	 	 	 	In case any one or more of the provisions of this Lease shall for any reason be
held to be invalid, illegal or unenforceable in any respect, or inapplicable due
to assignment of this Lease by Lessor to any person or entity other than another
governmental entity of the United States Government, such invalidity, illegality
or unenforceability, or inapplicability of provisions solely applicable to a
governmental entity of the United States Government, shall not affect any other
provision of this Lease, and this Lease shall be construed as if such invalid,
illegal, unenforceable, or inapplicable provisions had not been contained in this
Lease.
	 
	 	43.7.	 	Exhibits
	 
	 	 	 	Each of the exhibits referenced in this Lease is attached hereto and incorporated
herein.
	 
	 	43.8.	 	Time of the Essence
	 
	 	 	 	Time is hereby expressly declared to be of the essence of this Lease and of each
and every term, covenant, agreement, condition and provision of this Lease.
	 
	 	43.9.	 	Headings
	 
	 	 	 	Section and Subsection headings in this Lease are for convenience only and are not
to be construed as a part of this Lease or in any way limiting or amplifying the
provisions of this Lease.
	 
	 	43.10.	 	Lease Construed as a Whole
	 
	 	 	 	The language in all parts of this Lease shall in all cases be construed as a whole
according to its fair meaning and not strictly for or against either Lessor or
Lessee. The Parties acknowledge that each party and its counsel have reviewed
this Lease and participated in its drafting and therefore that the rule of
construction that any ambiguities are to be resolved against the drafting party
shall not be employed or applied in the interpretation of this Lease.

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	 	43.11.	 	Meaning of Terms
	 
	 	 	 	Whenever the context so requires, the neuter gender shall include the masculine
and the feminine, and the singular shall include the plural and vice versa.
	 
	 	43.12.	 	Federal Law
	 
	 	 	 	The laws of the United States shall govern the validity, construction and effect
of this Lease.
	 
	 	43.13.	 	Entire Lease
	 
	 	 	 	This instrument, together with the exhibits hereto, constitutes the entire
agreement between Lessor and Lessee with respect to the subject matter of this
Lease and supersedes all prior offers, negotiations, oral and written. This Lease
may not be amended or modified in any respect whatsoever except by an instrument
in writing signed by Lessor and Lessee.
	 
	 	43.14.	 	Termination Not Merger
	 
	 	 	 	The voluntary sale or other surrender of this Lease by Lessee to Lessor, or a
mutual cancellation thereof, or the termination thereof by Lessor pursuant to any
provision contained in this Lease, shall not work a merger, but, at the option of
Lessor, shall either terminate any or all existing subleases or subtenancies on
the Premises, or operate as an assignment to Lessor of any or all of such
subleases or subtenancies.
	 
	 	43.15.	 	Time Periods
	 
	 	 	 	Any time period to be computed pursuant to this Lease shall be computed by
excluding the first day and including the last day. If the last day falls on a
Saturday, Sunday or holiday, the last day shall be extended until the next
business day that the Lessor is open for business, but in no event shall the
extension be for more than three (3) calendar days. All references to days shall
mean calendar days unless otherwise specifically stated.

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     IN WITNESS WHEREOF, the Regional Director of the Pacific West Region of the National Park
Service, acting on behalf of the United States, in the exercise of the delegated authority from the
Secretary, as Lessor, and Lessee have executed this Lease by proper persons thereunto duly
authorized as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 

	MARITIME HOTEL ASSOCIATES, L.P.	 	NATIONAL PARK SERVICE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Tom LaTour	 	By:	 	/s/ John J Reynolds	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Tom LaTour
	 	 	 	John J. Reynolds	 	 
	 

	 	Title:
	 	President
	 	 	 	Regional Director

Pacific West Region	 	 

Attest:

	 	 	 	 	 

	Name:

	 	/s/ William G. Thomas
 

	 	 
	Title:

	 	Superintendent	 	 

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EXHIBIT A

PREMISES

     The Premises is the Haslett Warehouse, including the Vault but exclusive of the Retained
Space, and the real property located within the San Francisco Maritime National Historical Park,
San Francisco, California, and more particularly described as:

All of that real property situate in the City and County of San Francisco, State of California,
described as follows:

Beginning at the point of intersection of the southerly line of Jefferson Street with the easterly
line of Hyde Street; running thence easterly along said line of Jefferson Street 202.834 feet to a
point distant thereon 209.666 feet westerly from the westerly line of Leavenworth Street; thence
deflecting 89° 55’ 30” to the right and running southerly 141.370 feet; thence southerly and
southeasterly along a curve to the left tangent to the preceding course, which curve has a radius
of 301.90 feet, a central angle of 26° 16’ 49.43”, an arc distance of 138.475 feet to a point on
the northerly line of Beach Street; thence deflecting 116° 21’ 19.43” to the right from the tangent
of the preceding curve at last said point and running westerly along said line of Beach Street
234.400 feet to the easterly line of Hyde Street; thence northerly along said line of Hyde Street
275.00 feet to the point of beginning.

Being a portion of 50 Vara Block No. 259.

Together with a perpetual easement appurtenant to the above described property over a strip of land
3.50 feet in width lying contiguous to and easterly of the easterly boundary line of the above
described premises and extending from the northerly line of Beach Street to a point 27 feet and
1-1/8 inches southerly from the said southerly line of Jefferson Street, this easement being the
purposes of perpetually maintaining suitable clearance for spur tract purposes; and no structure
shall be constructed in, over or upon said 3.50 foot strip of land except such structures as may be
required to drain, maintain, support or construct a spur track at any elevation required by good
railroad practice.

As created and reserved in the deed from California Packing Corporation, a New York Corporation, to
Security Lithograph Company, a California Corporation, dated February 12, 1948, and recorded
February 16, 1948, in Book 4815, Page 487 of Official Records of the City and County of San
Francisco, State of California.

The Premises includes Fixtures and any utility facilities, such as conduits, lines, valves,
fittings and related equipment and apparatus located within the Premises owned by Lessor and
existing as of the Commencement Date. The Premises does not extend below (a) the bottom surface of
the concrete slab on the lowest level of the Haslett Warehouse except for the specific building
foundation structures, or (b) the bottom surface of the hardscape or any improvements installed by
Lessee supporting such hardscape on the above-described real property that is not situated under
the Haslett Warehouse.

 

 

EXHIBIT B

RETAINED SPACE

[Attach Shaded Drawing]

 

 

EXHIBIT C

Office Space

[Attach Shaded Drawing]

 

 

EXHIBIT D

Restaurant Space

[Attach Shaded Drawing]

 

 

EXHIBIT E

Retail Space

[Attach Shaded Drawing]

 

 

EXHIBIT F

TRADE FIXTURES

All of the following items installed by Lessee, to the extent that they are affixed to the Premises
and constitute fixtures (or would constitute fixtures but for Lessee’s rights to remove them
pursuant to this Lease) and are readily removable:

	•	 	Chandeliers, wall sconces, custom or artistic decorative lighting fixtures in the lobby
areas, Restaurant Space, meeting rooms, and suites;
	 
	•	 	Furniture, except to the extent the furniture is fully integrated into the Premises;
	 
	•	 	Curtain rods;
	 
	•	 	Mirrors;
	 
	•	 	Artwork;
	 
	•	 	Shelving, except to the extent the shelving is fully integrated into the walls of the
Premises;
	 
	•	 	Restaurant, bar, catering, room service and other food service equipment and furnishings;
	 
	•	 	Computer and telephone equipment (excluding wiring);
	 
	•	 	Audio/visual equipment;
	 
	•	 	Ice machines;
	 
	•	 	Safes (other than wall safes);
	 
	•	 	Exercise equipment;
	 
	•	 	Security equipment (other than wiring);
	 
	•	 	Key card system (excluding wiring and the locks on the doors);
	 
	•	 	Hair dryers and other personal care items;

and all other equipment reasonably agreed to in writing by Lessor and Lessee at the time of its
installation; but in any event excluding mechanical (including heating, ventilating and air
conditioning), elevator, fire detection, alarm and sprinkler, illumination (other than as listed
above), electrical, and plumbing fixtures and systems in the Premises, and components thereof.

 

 

EXHIBIT G

SCHEDULE OF PERFORMANCE

(Due Diligence and Initial Lessee Improvements)

Haslett Warehouse

	 	 	 	 	 	 	 
	#	 	Action	 	Timeframe	 	Anticipated Date
	1

	 	Lessee pays Lessor $100,000 one-time payment (§
5.3.1)
	 	On Commencement Date
	 	10/16/00
	 
	 	 	 	 	 	 
	2

	 	Lessor provides to Lessee all available site
information in Landlord’s possession to Lessee,
to include “as built” utility plans (§ 13.3.3),
and hazardous material reports (§ 22.1)
Lessor prepares an Inventory and Condition Report
(§ 1.39)	 	 	 	 
	 
	 	 	 	 	 	 
	3

	 	Lessor delivers to Lessee list of potential
Design and Construction Monitors (§ 1.20)
	 	10th day after the

Commencement Date
	 	10/26/00
	 
	 	 	 	 	 	 
	4

	 	Lessee notifies Lessor in writing of receipt of
list of Design and Construction Monitors and any
reasonable objections to any of the listed
contractors (Sec. 1.20)
	 	3rd business day
after receipt of
list from Lessor
	 	10/29/00
	 
	 	 	 	 	 	 
	5

	 	Lessor to submit MEP requirements for Retained
Space (§ 2.3.2)
	 	20th day after

Commencement Date
	 	11/06/00
	 
	 	 	 	 	 	 
	6

	 	Lessee submits to Lessor a traffic management
plan (§ 16.2)
	 	25th day after the

Commencement Date
	 	11/13/00
	 
	 	 	 	 	 	 
	7

	 	Lessee submits to Lessor complete schematic
design package
	 	32nd day after the

Commencement Date
	 	11/17/00
	 
	 	 	 	 	 	 
	8

	 	Lessee submits to State Historic Preservation
Officer (SHPO), and provides copy to Lessor, of
historic preservation certification application
(Tax-Act certification)	 	 	 	 
	 
	 	 	 	 	 	 
	9

	 	Lessee makes first of 3 payments in amount of
$110,000 for services of Design and Construction
Monitor hired by Lessor (§ 1.20)	 	 	 	 
	 
	 	 	 	 	 	 
	10

	 	Lessor completes review of traffic management plan	 	 	 	 

 

 

	 	 	 	 	 	 	 
	#	 	Action	 	Timeframe	 	Anticipated Date
	11

	 	Lessor completes review
process of schematic
design package
	 	21st day after
receipt of complete
schematic design
package
	 	12/08/00
	 
	 	 	 	 	 	 
	12

	 	End of Due Diligence Period
	 	90th day after the

Commencement Date
	 	01/16/01
	 
	 	 	 	 	 	 
	13

	 	Lessor to remove Lessor’s
personal property from
warehouse (§ 3.3)
	 	30th day after end
of Due Diligence
period
	 	02/14/01
	 
	 	 	 	 	 	 
	14

	 	Lessee submits to Lessor
complete design
development package
	 	91st day after
Lessor approval of
schematic design
package
	 	03/09/01
	 
	 	 	 	 	 	 
	15

	 	Lessee makes second of 3
payments in amount of
$110,000 for services of
Design and Construction
Monitor hired by Lessor (§
1.20)	 	 	 	 
	 
	 	 	 	 	 	 
	16

	 	Lessor completes review
process of design
development package
	 	28th day after
receipt of complete
design development
package
	 	04/06/01
	 
	 	 	 	 	 	 
	17

	 	Lessee submits to Lessor a
completed construction
documents package
	 	63rd day after
Lessor approval of
design development
package
	 	06/08/01
	 
	 	 	 	 	 	 
	18

	 	Lessee provides Lessor
with HazMat
Management/Remediation
Plan (§ 22.10)	 	 	 	 
	 
	 	 	 	 	 	 
	19

	 	Lessee submits to Lessor
evidence of insurance (§
23.4.6)
	 	7th day after
submission of
construction
documents package
	 	06/15/01
	 
	 	 	 	 	 	 
	20

	 	Lessee submits to Lessor
complete financial package
showing evidence of
financing availability (§
14.1)	 	 	 	 
	 
	 	 	 	 	 	 
	21

	 	Lessor completes review
process of evidence of
insurance and financial
package
	 	14th day after
receipt of complete
insurance and
financial package
	 	06/29/01
	 
	 	 	 	 	 	 
	22

	 	Lessor completes review
process of construction
documents
	 	35th day after
receipt of complete
construction
documents package
	 	07/13/01

 

 

	 	 	 	 	 	 	 
	#	 	Action	 	Timeframe	 	Anticipated Date
	23

	 	Lessor delivers building permit to
escrow for the loan under the
approved Financing Commitment
	 	1 day prior to
closing of loan
(pending Lessor
approval of
construction
documents package)
	 	07/30/01
	 
	 	 	 	 	 	 
	24

	 	Lessee closes loan under the approved
Financing Commitment (§ 14.2)
	 	16th day after
Lessor approval of
construction
documents package
	 	07/31/01
	 
	 	 	 	 	 	 
	25

	 	Building permit is delivered to Lessee
	 	Concurrent with
closing of loan
under the approved
Financing
Commitment and
issuance of the
building permit for
the project	 	 
	 
	 	 	 	 	 	 
	26

	 	Lessee establishes and deposits $1.9M
payment into “Capital Account” for
projects (§ 5.3.2)	 	 	 	 
	 
	 	 	 	 	 	 
	27

	 	Lessee makes third and last of 3
payments in amount of $110,000 for
services of Design and Construction
Monitor hired by Lessor (§ 1.20)	 	 	 	 
	 
	 	 	 	 	 	 
	28

	 	Lessee establishes and deposits $540K
into “Capital Account” for retained
space (§ 5.3.3)	 	 	 	 
	 
	 	 	 	 	 	 
	29

	 	Lessee begins construction
	 	3rd day after
closing of the loan
under the approved
Financing
Commitment
	 	08/03/01
	 
	 	 	 	 	 	 
	30

	 	Lessee gives Lessor Notice of
Substantial Completion (§ 15.4.1)
	 	13 months after
commencement of
construction
	 	09/03/02
(No later than
12/31/02 (§
15.1.2))
	 
	 	 	 	 	 	 
	31

	 	Lessor issues Conditional Certificate
of Occupancy
	 	Upon Substantial
Completion of
construction
	 	09/11/02
	 
	 	 	 	 	 	 
	32

	 	Lessor issues Certificate of Occupancy
	 	Upon final
completion of
construction
	 	10/11/02

 

 

	 	 	 	 	 	 	 
	#	 	Action	 	Timeframe	 	Anticipated Date
	33

	 	Lessee submits to Lessor
Preservation Plan for
approval (§ 19.5)
	 	30th day after issuance
of Certificate of
Occupancy
	 	11/11/02
	34

	 	Lessee submits to Lessor
Trade Fixture Inventory
(revised Exhibit F), as
applicable, and
inventory and condition
report (§ 15.4.4)	 	 	 	 
	35

	 	Lessee submits to Lessor
As-Built drawings (§
15.4.3)	 	 	 	 

 

 

EXHIBIT H

PRELIMINARY SCHEMATIC PLANS FOR, AND DESCRIPTION OF,

THE INITIAL LESSEE IMPROVEMENTS

[Attached Preliminary Schematic drawings and text from Kimpton’s Proposal]

 

 

EXHIBIT I

VAULT

[Attach Shaded Drawing]

 

 

EXHIBIT J

Retained Space Restrooms and Drinking Fountains

Plumbing Fixtures in the Retained Space

Men’s Restroom:

2 Toilets

2 Urinals

2 Wash basins

1 Diaper changing station

Women’s Restroom:

4 Toilets

2 Wash basins

1 Diaper changing station

Employee Unisex Restroom:

1 Toilet

1 Wash basin

1 Drinking fountain

Other Fixtures:

1 Service sink

2 Drinking fountains

 

 

EXHIBIT K

Street Encroachment Agreement

[Attached Recorded Street Encroachment Agreement]

 

 

EXHIBIT L

List of reports and studies identifying Historic Elements of the Haslett Warehouse:

	1.	 	“Haslett Warehouse: Historic Structures Report”; February 1986; prepared for National Park
Service by Page, Anderson & Turnbull, Inc.
	 
	2.	 	“Haslett Warehouse: Evaluation of Adaptive Use Alternatives”; April 1994; prepared for
National Park Service by Architectural Resources Group.exv10w2

Exhibit 10.2

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SEVENTH AMENDMENT

TO

HISTORIC LEASE

(HL-SAFR001-98)

     THIS SEVENTH AMENDMENT TO HISTORIC LEASE (HL-SAFR001-98) (“Seventh Amendment”) is made and
entered into effective as of 12:00 (noon) Pacific Standard Time February 6, 2001, by and between
the United States Department of the Interior, National Park Service acting through the Regional
Director, Pacific West Region, an agency of the United States of America (“Lessor”) and Maritime
Hotel Associates, L.P., a California limited partnership whose General Partner is Hyde Street
Hospitality, Inc a wholly-owned subsidiary of the Kimpton Hotel & Restaurant Group, Inc, a
California corporation (“Lessee”).

RECITALS

     This Seventh Amendment is entered upon the basis of the following facts, understandings and
intentions of the parties.

     WHEREAS, Lessor and Lessee entered into that certain Historic Lease (HL-SAFR001-98), effective
as of October 16, 2000 (the “Original Lease”), as amended by that certain First Amendment to
Historic Lease (HL-SAFR001-98) effective as of January 16, 2001 (the “First Amendment”), that
certain Second Amendment to Historic Lease (HL-SAFR001-98) effective as of January 18, 2001 (the
“Second Amendment”), that certain Third Amendment to Historic Lease (HL-SAFR001-98) effective as of
January 22, 2001 (the “Third Amendment”), that certain Fourth Amendment to Historic Lease
(HL-SAFR001-98) effective as of January 24, 2001 (the “Fourth Amendment”), that certain Fifth
Amendment to Historic Lease (HL-SAFR001-98) effective as of January 29, 2001 (the “Fifth
Amendment”), and that certain Sixth Amendment to Historic Lease (HL-SAFR001-98) effective as of
February 1, 2001 (the “Sixth Amendment”), which shall be amended by this Seventh Amendment. This
Seventh Amendment, together with the Original Lease, as amended by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, and the Sixth Amendment,
hereinafter shall be referred to collectively as the “Lease;”

     WHEREAS, Lessor, in response to Lessee’s request for an extension of the Due Diligence Period
for certain matters, Lessor has agreed to certain extensions as set

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forth below.

     WHEREAS, the consistency determination process with the San Francisco Bay Conservation and
Development Commission (“BCDC”) has not yet been completed;

     WHEREAS, Lessor and Lessee desire to amend the Lease in the manner set forth herein.

AGREEMENT

     NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth below and
other good and valuable consideration, the parties hereto agree as follows:

     1. The capitalized terms not otherwise defined herein shall have the meanings given in the
Original Lease, First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth
Amendment, and Sixth Amendment.

     2. Section 3.2 is hereby amended to: insert “(a)” at the beginning of the first paragraph;
and provide for an extension of the Due Diligence Period to February 28, 2001.

     3. Section 3.2 is hereby further amended to add the following:

(b) The Due Diligence Period shall be further extended beyond February 28, 2001
solely for the limited purpose of addressing the final decision by San Francisco Bay
Conservation and Development Commission (“BCDC”) on Lessor’s consistency
determination and request for letter of agreement (“Determination Request”). Such
period of extension beyond February 28, 2001 (“Extended Due Diligence Period”) shall
be as set forth below. Lessor and Lessee acknowledge that BCDC does not have the
authority under 15 C.F.R. Part 930 (2000) to conditionally approve a Determination
Request, and instead must either approve or disapprove it.

(c) On January 25, 2001, Lessor submitted the Determination Request to BCDC. Lessee
and Lessor shall cooperate to expedite and facilitate processing of the
Determination Request. Pursuant to 15 C.F.R. Section 930.41 (2000), inaction by
BCDC at the end of forty-five (45) days (or sixty

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(60) days if extended) from the
date of Lessor’s submission of its Determination Request is deemed approval.
Therefore, the Determination Request is deemed approved if BCDC has not acted on it
by March 11, 2001, or by March 26, 2001, if an extension is requested by BCDC
pursuant to 15 C.F.R. Section 930.41 (2000), (the “Required Response Date”). In the
event that Lessor grants any extensions to the Required Response Date to BCDC beyond
March 26, 2001, the Extended Due
Diligence Period shall be extended for a commensurate period, the Required Response
Date shall refer to such extended date, and the Determination Request shall be
deemed approved as provided in 15 C.F.R. Section 930.41 (2000) if BCDC has not acted
by such extended date. If BCDC has approved the Determination Request on or before
the Required Response Date, the Extended Due Diligence Period shall terminate the
day after the date of approval by BCDC.

(d) Lessee’s right to terminate this Lease under the procedures and requirements set
forth in this Section 3.2 during the Extended Due Diligence Period is limited to:
(i) the issuance by BCDC of its written disapproval of the Determination Request (A)
without alternative measures, or (B) with a request for additional information from
Lessor; or (ii) the issuance by BCDC of its written disapproval of the Determination
Request which includes alternative measures which, if implemented, would (A)
materially increase the costs to Lessee of performing its obligations under this
Lease, (B) result in an imposition that is not commercially reasonable, or (C)
materially adversely affect Lessee’s use of any portion of the Premises
(individually and collectively, “Unacceptable Measures”).

(e) If BCDC disapproves the Determination Request without suggesting alternative
measures or without requesting additional information from Lessor, Lessee shall have
five (5) business days from the date of the BCDC disapproval to terminate this Lease
pursuant to this Section 3.2. Alternatively, within five (5) business days from
the date of the BCDC disapproval, Lessee may request in writing an extension of the
Due Diligence Period from Lessor, and the Due Diligence Period shall be extended
pursuant to the terms set forth in Section 3.2(g) for an additional thirty (30) days
after the date of the BCDC action (the “Final Extended Due Diligence Period”) so
that Lessor and BCDC may confer and attempt to resolve any disagreement.

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(f) If BCDC disapproves the Determination Request and suggests alternative measures
on or before the Required Response Date, then Lessee shall be permitted a five (5)
business day period after the date of the disapproval to determine whether the
disapproval includes Unacceptable Measures. If Lessee determines that it does not
include Unacceptable Measures, then it shall so notify Lessor in writing within the
five (5) business day period that it consents to the alternative measures, and the
Extended Due Diligence Period shall be terminated at the end of the five (5)
business day period. If Lessee determines that the BCDC disapproval includes
Unacceptable Measures it may elect to: (i) terminate immediately and shall do so by
providing written notice to the Lessor no later than the end of the five (5)
business day period; or (ii) notify Lessor
in writing during the five (5) business day period that it has reasonably determined
that the BCDC measures include Unacceptable Measures (the “Unacceptable Measure
Notice”).

(g) If Lessee elects to: (i) request an extension from Lessor pursuant to Section
3.2(e) above; (ii) deliver the Unacceptable Measure Notice to Lessor pursuant to
Section 3.2(f)(ii) above; or (iii) if BCDC disapproves the Determination Request
without alternative measures but requests additional information from Lessor prior
to the Required Response Date, then the Extended Due Diligence Period shall be
extended for up to an additional thirty (30) days after the date of the BCDC action
as the Final Extended Due Diligence Period so that Lessor and BCDC may confer and
attempt to resolve any disagreement between them or submit the supplemental
information requested by BCDC. In consideration of the Final Extended Due Diligence
Period, Lessee shall advance incrementally to Lessor funds sufficient to cover
Lessor’s out-of-pocket costs for the design of the museum space as are reasonably
required to keep pace with Lessee’s design and construction schedule, which total
amount shall not exceed Two Hundred Sixty Thousand Dollars ($260,000.00). This
amount shall be offset against the one-time payment payable to Lessor pursuant to
Section 5.3.2 of the Lease. The Final Extended Due Diligence Period shall
terminate: (w) upon written approval by BCDC; (x) at the end of the Final Extended
Due Diligence Period; (y) upon receipt by Lessee of written notice from Lessor that
negotiations have been terminated without resolution; or (z) in the event that
resolution has been reached, five (5)

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days after Lessee has received notice of the
proposed resolution, whichever date is earliest.

(h) If BCDC disapproves the Determination Request, or disapproves the Determination
Request with alternative measures that Lessee has found to be Unacceptable Measures
or has requested additional information and the Extended Due Diligence Period has
been extended through the Final Extended Due Diligence Period, then Lessor, during
the Final Extended Due Diligence Period, may elect to: (i) continue discussions
with BCDC; (ii) resubmit the Determination Request with the additional information
requested by BCDC (“Resubmission”); or (iii) pursue mediation under 15 C.F.R. Part
930 (2000). If Lessor so elects, it shall notify Lessee in writing prior to the end
of the Final Extended Due Diligence Period, and Lessee shall be entitled to extend
the Final Extended Due Diligence Period to: (w) five (5) business days after written
approval or disapproval by BCDC on the Resubmission; (x) five (5) business days
after receipt by Lessee of written notice from Lessor that the negotiations and/or
mediation have been terminated without resolution; (y) in the event that a
resolution has been reached, five (5)
days after Lessee has received notice of the proposed resolution; or (z) by no
later than June 1, 2001, whichever is the earliest date.

     4. Exhibit G, Schedule of Performance, is hereby deleted in its entirety and replaced with
Exhibit G-1, Schedule of Performance attached hereto. All references to Exhibit G in the Lease
shall mean Exhibit G-1.

     5. Upon execution of this Seventh Amendment, Lessee shall pay to Lessor Two Hundred and Twenty
Thousand Dollars ($220,000) as follows:

          a. A nonrefundable advance payment of a portion of the one-time payment payable to Lessor
pursuant to Section 5.3.2 of the Lease in the amount of One Hundred Seventy Thousand Dollars
($170,000); and

          b. A nonrefundable advance payment of a portion of the second payment for the Design and
Construction Monitor in the amount of Fifty Thousand Dollars ($50,000).

     6. The third nonrefundable payment for the Design and Construction Monitor shall be increased
to One Hundred Thirty Thousand Dollars ($130,000) and shall be

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paid in accordance with Exhibit G-1, Schedule of Performance, Line Item #27.

     7. Section 12.1 of the Lease is hereby amended to add the following sentence:

Lessee’s obligation to pay the costs and fees of the Design and Construction Monitor
shall not exceed an aggregate of Three Hundred and Fifty Thousand dollars
($350,000), which shall be paid in accordance with Exhibit G-1, Schedule of
Performance.

     8. Lessor shall permit Lessee to perform Soft Demolition (as defined below) prior to closing
on any financing necessary for the construction of Initial Lessee Improvements provided Lessee
obtains Lessor’s prior written approval of such Soft Demolition, which approval Lessor shall not
unreasonably withhold or delay provided Lessee submits complete plans for such Soft Demolition to
permit Lessor’s timely review. Soft Demolition shall mean interior demolition which does not
affect the integrity of the building, including, without limitation, structural and weatherproofing
elements and Historic Elements, such as removal of non-structural wall partitions or ceiling
panels, or carpeting. Lessee, at its sole cost and expense, shall comply with all Applicable Laws
in the performance of such Soft Demolition, and shall remove all materials demolished as part of
such Soft Demolition and shall dispose of such materials in compliance with all Applicable Laws.
Except as expressly provided herein, all provisions of the Lease applicable to Lessee’s
construction of Initial Lessee Improvements, including insurance and liability provisions, shall
also apply to Soft Demolition.

     9. Section 28.4.1 of the Lease is hereby deleted in its entirety and replaced with the
following:

	 	28.4.1	 	Except for Leasehold Mortgages permitted without Lessor’s permission pursuant to
Section 28.6, at no time may the total of all Leasehold Mortgages on the Premises, as of
the date that the latest Leasehold Mortgage is granted, exceed eighty percent (80%) of
the total value of the Premises as estimated by the appraiser for the latest Leasehold
Mortgagee at or about such time. Conversely, subject to the other provisions of this
Article 28, Lessee shall have the right to enter into Leasehold Mortgages that at any one
time in the aggregate do not exceed eighty percent (80%) of the total value of the
Premises as estimated by the appraiser for the latest Leasehold Mortgagee at or about
such time.

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	 	 	 	For purposes herein, the appraiser shall be a current member in good standing
of either the American Society of Appraisers (“ASA”) or the Appraisal Institute (“MAI”),
and shall also be a member of either the Counselors of Real Estate (“CRE”) or the
International Society of Hospitality Consultants (“ISHC”), or their successor
organizations. Promptly upon demand, Lessee shall cause a complete copy of such
appraisal, together with all supporting documentation, to Lessor for determination of
compliance with the terms and conditions of this Lease. Lessee shall bear all costs of
any such appraisal.

     10. Section 28.13.2 of the Lease is hereby deleted in its entirety and replaced with the
following:

	 	28.13.2	 	(a) Anything herein contained to the contrary notwithstanding, upon the occurrence of an
Event of Default, other than an Event of Default due to a default in the payment of money
or other default reasonably susceptible of being cured prior to Leasehold Mortgagee
obtaining possession, Lessor shall take no action to effect a termination of this Lease if,
within thirty (30) days after notice of such Event of Default is given to each Leasehold
Mortgagee, a Leasehold Mortgagee shall have (i) obtained possession of the Premises
(including possession by a receiver), or (ii) notified Lessor of its intention to institute
foreclosure proceedings or otherwise acquire Lessee’s interest under this Lease, and
thereafter promptly commences and prosecutes such proceedings with diligence and dispatch
(subject to Force Majeure and delays caused by bankruptcy or insolvency proceedings).
	 
	 	 	 	(b) Upon such a foreclosure or other acquisition of Lessee’s interest under this
Lease, Lessor agrees to approve as Lessee hereunder pursuant to 36 C.F.R. Section
18.10(d) (2000), the (i) Leasehold Mortgagee, or (ii) any other foreclosure or
trustee sale purchaser or
grantee of any deed in lieu; provided such acquirer of Lessee’s interest under this
Lease is a Qualified Transferee (as defined below).
	 
	 	 	 	(c) A “Qualified Transferee” shall mean a person or entity that (i) satisfies the
criteria provided in Section 27.3(b) above, (ii) is not an Excluded Contractor, nor
has entered into an Operating Agreement (as defined in Section 28.13.2(k) below)
with an Approved Operator that is an Excluded Contractor; (iii) agrees in a written
agreement to be bound by all

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the terms and conditions of this Lease and assume
Lessee’s obligations hereunder arising or accruing from and after the date of its
acquisition of Lessee’s interest under this Lease (collectively the foregoing
contained in this Section 28.13.2(c)(iii), the “Assumption Agreement”); and (iv)
receives a written determination by Lessor approving such potential acquirer of
Lessee’s interest under this Lease as having satisfied the requirements of Section
28.13.2(c)(i), (ii) and (iii) prior to such acquisition of Lessee’s interest.

(d) A Leasehold Mortgagee anticipating acquisition of Lessee’s interest under this
Lease by foreclosure or otherwise, and any potential foreclosure or trustee sale
purchaser or potential grantee of any deed in lieu may request Lessor’s approval of
such party as a Qualified Transferee prior to such acquisition, purchase or receipt,
which determination shall be made within fifteen (15) business days of Lessor’s
receipt of complete documentation supporting such written request.

(e) Notwithstanding anything to the contrary in the foregoing, Lessor shall
recognize as Lessee a Leasehold Mortgagee, its designee or nominee (other than
Lessee) that acquires Lessee’s interest under this Lease through foreclosure, deed
in lieu, or otherwise for a period of sixty (60) days following such acquisition of
Lessee’s interest under this Lease during which time, Leasehold Mortgagee, its
designee or nominee (other than Lessee) shall (i) assign Lessee’s interest under
this Lease pursuant to Section 28.14, (ii) (A) enter into an Operating Agreement (as
defined in Section 28.13.2(k) below) with a person or entity that has all of the
qualifications of an Approved Operator set forth in Sections 27.3 and 28.13.2 of
this Lease, as reasonably determined by Lessor, and which is not an Excluded
Contractor, and (B) deliver to Lessor an executed counterpart of an Assumption
Agreement; or (iii) deliver to Lessor an executed counterpart of an Assumption
Agreement. Notwithstanding any requirement for an Assumption Agreement and anything
to the contrary in Section 28.13.2(g) below, the provisions of Section 32.6.1
pertaining to a Leasehold Mortgagee shall apply to a Leasehold Mortgagee, its
nominee or designee (other than Lessee) for the period of its possession of Lessee’s
interest under the Lease pursuant to this Section 28.13.2(e) until its assignment of
Lessee’s interest pursuant to Section 28.13.2(e)(i)
above, or its assumption of Lessee’s obligations pursuant to Sections 28.13.2(e)(ii)
or (iii) above, upon either of which events the provisions of

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Section 32.6.1
pertaining to Lessee shall apply to such Leasehold Mortgagee or its assignee, as
applicable. A Leasehold Mortgagee, its nominee or designee (other than Lessee)
assuming Lessee’s obligations pursuant to Sections 28.13.2(e)(ii) or (iii) may
subsequently assign its interest in the Lease in accordance with Section 28.14.

(f) A Leasehold Mortgagee may exercise its rights under this Section 28.13.2 through
a nominee or designee (other than Lessee) which shall be treated for all purposes
under this Section 28.13.2 as though it were a Leasehold Mortgagee, provided that
such nominee or designee is a wholly owned subsidiary of Leasehold Mortgagee
(directly or indirectly) and is not Lessee; and provided, further, that no Leasehold
Mortgagee shall acquire title to this Lease through a nominee or designee which is
an Excluded Contractor.

(g) Subject to Section 28.13.2(e) above, any successor lessee, including, without
limitation, a Qualified Transferee, shall enter into an Assumption Agreement. If an
Assumption Agreement has an effective date during the period of construction of the
Initial Lessee Improvements, then such Assumption Agreement shall be further subject
to potential time extensions provided under Section 28.13.2(j)(ii) or (iii) to the
extent applicable. Additionally, a successor lessee approved pursuant to (i)
Section 28.13.2(c) as a Qualified Transferee with an Operating Agreement (as defined
in Section 28.13.2(k) below) with a person or entity that has all of the
qualifications of an Approved Operator set forth in Sections 27.3 and 28.13.2 of
this Lease, as reasonably determined by Lessor, and which is not an Excluded
Contractor; or (ii) Section 28.13(e)(ii) shall maintain an Operating Agreement (as
defined in Section 28.13.2(k) below) with an Approved Operator for the Term of this
Lease. Any approval by Lessor as required by Section 28.13.2 shall apply only to
the specific transaction thereby authorized and shall not relieve Lessee from any
requirement of obtaining the prior written consent of Lessor, if required under this
Lease, to any further sale, assignment, transfer described in this Section,
including any change in an Approved Operator or Qualified Transferee.

(h) A Leasehold Mortgagee, upon acquiring Lessee’s interest under this Lease, shall
be required promptly to cure all other defaults then reasonably susceptible of being
cured by such Leasehold Mortgagee.

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(i) Notwithstanding anything to the contrary in the foregoing, the following
provisions of this Section 28.13.2(i) are intended to apply to a Leasehold Mortgagee
that obtains possession of the Premises and
intends to institute foreclosure proceedings or otherwise acquire Lessee’s interest
under this Lease pursuant to Section 28.13.2(a) above and shall not apply to a
Leasehold Mortgagee that has acquired Lessee’s interest under this Lease through
foreclosure, deed in lieu or otherwise: (i) no Leasehold Mortgagee shall be
obligated to continue possession or to continue foreclosure proceedings; (ii)
nothing herein contained shall preclude Lessor, subject to the provisions of this
Section, from exercising any rights or remedies under this Lease (other than a
termination of this Lease to the extent otherwise permitted hereunder) with respect
to any other Event of Default by Lessee during the pendency of such foreclosure
proceedings; and (iii) such Leasehold Mortgagee shall agree with Lessor in writing
to comply during the period Lessor forebears from terminating this Lease with such
of the terms, conditions and covenants of this Lease as are reasonably susceptible
of being complied with by such Leasehold Mortgagee. Notwithstanding anything to the
contrary, including an agreement by Leasehold Mortgagee given under clause (iii) of
the preceding sentence, Leasehold Mortgagee shall have the right at any time to
notify Lessor that it has relinquished possession of the Premises, or that it will
not institute foreclosure proceedings or, if such foreclosure proceedings have
commenced, that it has discontinued them, and, in such event, the Leasehold
Mortgagee shall have no further liability under such agreement from and after the
date it delivers such notice to Lessor, and, thereupon, Lessor shall be entitled to
seek the termination of this Lease as otherwise herein provided. Upon any such
termination, the provisions of this Section 28.13.3 shall apply.

(j) The following provisions shall apply during the period of construction of the
Initial Lessee Improvements:

	 	(i)	 	Subject to Section 28.13.2(e)(ii) and (iii), if
the default of Lessee is with respect to construction of the Initial
Lessee Improvements, nothing contained in this Section 28.13.2 or in
any other Section or provision of this Lease shall be deemed to
require, permit or authorize the Leasehold Mortgagee, either before or
after foreclosure or action in lieu thereof, to undertake or continue
the construction or

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	 	 	 	completion of the Initial Lessee Improvements
beyond the extent necessary to conserve or protect the Initial Lessee
Improvements or construction already made, without first (in its sole
discretion) having expressly assumed Lessee’s obligation to Lessor by
written agreement reasonably satisfactory to Lessor, to complete, in
the manner provided in this Lease, the Initial Lessee Improvements on
the Premises or the part thereof to which the lien or title of such
Leasehold Mortgagee relates, and submitted evidence
satisfactory to Lessor that it has the qualifications and financial
responsibility necessary to perform such obligation.
	 
	 	(ii)	 	Upon assuming Lessee’s obligations under this
Lease pursuant to Sections 28.13.2(e)(ii) or (iii) or Section
28.13.2(j)(i) above, the Leasehold Mortgagee shall be required only to
exercise due diligence in completion of the construction of the Initial
Lessee Improvements but shall not be required to complete construction
of the Initial Lessee Improvements within the dates set forth in
Section 15 of this Lease.
	 
	 	(iii)	 	Any transferee of a Leasehold Mortgagee or any
purchaser at a foreclosure sale or other acquirer of Lessee’s interest
under this Lease pursuant to this Section 28.13.2 or Section 28.14
other than a Leasehold Mortgagee shall be obligated to complete the
Initial Lessee Improvements and exercise due diligence in the
completion of the construction thereof, but shall not be required to
complete construction of the Initial Lessee Improvements within the
dates set forth in Section 15 of this Lease.
	 
	 	(iv)	 	Any assuming Leasehold Mortgagee or transferee
properly completing such Initial Lessee Improvements shall be entitled,
upon written request made to Lessor, to a Certificate of Occupancy from
Lessor with respect to such Initial Lessee Improvements to the same
extent and in the same manner as Lessee would have been entitled had
Lessee not defaulted.

***SAN FRANCISCO MARITIME NATIONAL HISTORICAL PARK***

****PACIFIC WEST REGION — NATIONAL PARK SERVICE ****

 

 

Seventh Amendment

Haslett Warehouse

HL-SAFR001-98

Page 12

(k) For purposes under this Lease “Operating Agreement” shall mean a written
contract for development and/or operation and management of the Premises in
accordance with the terms and provisions of this Lease. Lessee (or any successor
Lessee) shall ensure that any Operating Agreement entered into pursuant to this
Lease requires the Premises to be developed and/or operated and managed in
accordance with the terms of this Lease.

     11. The following are technical corrections to the Lease:

          a. The designations HL-SAFR001-98 and HL-SAF001-99 in the Lease are hereby corrected and
replaced by “HL-SAFR001-00”.

          b. Section 1.29 is hereby revised to delete the word “in” between “end of” and
“Section 1.8”.

          c. Section 5.5.1.2.1 is hereby revised to change the phrase “Adjustment Date” to “adjustment
date”.

     12. This Seventh Amendment may be executed in counterparts, each of which shall constitute an
original, and all of which together shall constitute one and the same instrument.

***SAN FRANCISCO MARITIME NATIONAL HISTORICAL PARK***

****PACIFIC WEST REGION — NATIONAL PARK SERVICE ****

 

 

Seventh Amendment

Haslett Warehouse

HL-SAFR001-98

Page 13

     13. Except as otherwise expressly modified by the terms of this Seventh Amendment, the Lease
remains unchanged and in full force and effect.

     IN WITNESS WHEREOF, the Regional Director of the Pacific West Region of the National Park
Service, acting on behalf of the United States, in the exercise of the delegated authority from the
Secretary, as Lessor, and Lessee have executed this Seventh Amendment by proper persons thereunto
duly authorized as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 

	MARITIME HOTEL ASSOCIATES, L.P.,	 	 	 	NATIONAL PARK SERVICE	 	 
	a California limited partnership	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	Hyde Street Hospitality, Inc.	 	 	 	 	 	 	 	 
	 	 	a California corporation	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Its:	 	General Partner	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ J. Kirke Wrench
 

	 	 
	 	By:
	 	/s/ John J. Reynolds
 

	 	 
	 

	 	Name:
	 	J. Kirke Wrench
	 	 	 	Name:
	 	John J. Reynolds	 	 
	 

	 	Title:
	 	CFO
	 	 	 	Title:
	 	Regional Director,	 	 
	 

	 	 	 	 	 	 	 	 	 	Pacific West Region	 	 

***SAN FRANCISCO MARITIME NATIONAL HISTORICAL PARK***

****PACIFIC WEST REGION — NATIONAL PARK SERVICE ****

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