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HomeMy WebLinkAboutCity Council - 6253 RESOLUTION NO. 6253 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH PROVIDING CONSENT TO ASSIGNMENT OF LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND CECIL E. WHEAT AND VIRGINIA NELL WHEAT WHEREAS, the City of Huntington Beach, as Lessor, and Cecil E. Wheat and Virginia Nell Wheat, as Lessees, are parties to that certain lease, dated October 13, 1989, for the premises commonly known as "ZACK'S TOO, " a copy of said lease attached hereto as Exhibit "A" and by this reference incorporated herein; and Lessees desire to assign their interest in said lease to a third party, known as Mike Ali; and Pursuant to Section 9 . 01 of said lease, the express written consent of Lessor must be obtained prior to any such assignment, NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows : 1 . Consent is hereby provided to the assignment of the lease attached hereto as Exhibit "A" from Cecil E. Wheat and Virginia Nell Wheat to Mike Ali . PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 4th d a y o f _ March 1991. Mayor ATT T: APPROVED AS TO FORM: City Clerk City Attorney FI—e- �.-'y.0-'i f2.^20-q 1 APPROV D. INIT ATED AND APPROVED: City Administrator Director Community S vices dd- si a� n EXHIBIT "A" LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND "ZACK' S, TOO" FOR A BEACH CONCESSION LOCATED ON THE OCEANSIDE OF PACIFIC COAST HIGHWAY SOUTH OF THE PIER IN THE CITY OF HUNTINGTON BEACH The CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California , hereinafter referred to as "LESSOR, " hereby leases to CECIL E . WHEAT and VIRGINIA NELL WHEAT, individuals , hereinafter collectively referred to as "LESSEE, " those certain premises known as "ZACK ' S, TOO" , hereinafter referred to as the "PREMISES, " located in the County of Orange, State of California, described more particularly in Exhibit "A" , attached hereto and incorporated herein by this reference, upon the following terms and conditions : ARTICLE 1 . TERM OF LEASE Section 1 . 01 . ORIGINAL TERM This lease shall be for a term of five (5) years commencing at 12 : 01 a .m. on January 1, 1990, and ending at 12 : 01 a .m. on _Tanuary 1 , 1995 , unless sooner terminated as herein provided pursuant to Article 10 Subsection (u) . Section 1 . 02 . TERMS AND CONDITIONS LESSOR may, however, upon thirty (30) days ' notice in writing to LESSEE, suspend this Agreement and the lease granted herein without liability to the LESSOR in the event of failure of LESSEE to comply with any of the terms or conditions or agreements hereof , or when public necessity so requires , or to suspend operation immediately hereunder temporarily in the event of public necessity, as may be reasonably determined by the City Administrator . - 1 - 6253 1 ' In the event of such suspension, LESSEE shall be allowed sixty ( 60) days after notice within which to cure the failure or default which gave rise to such suspension without termination hereof . Section 1 . 03 . HOLD OVER Should LESSEE hold over and continue in possession of said premises after expiration of the term of this lease or any extension thereof , LESSEE ' S continued occupancy of said premises shall be considered a month-to-month tenancy subject to all the terms and conditions of this lease . ARTICLE 2 . RENT Section 2 . 01 . PERCENTAGE RENTAL LESSEE agrees to pay to LESSOR as rent for the use and occupancy of said premises a sum equal to 12 . 5 percent ( 12 . 50) of the amount of the gross sales , as defined in this Article, made each month by LESSEE in, on, or from said premises . The rent specified in this section shall be paid by LESSEE to LESSOR at 2000 Main Street , Huntington Beach, California , 92648 , or at such other place or places as LESSOR may from time to time designate by written notice delivered to LESSEE, within fifteen ( 15) days after the end of the calendar month during which the gross sales on which it was computed were made . A late charge equal to the prime commercial interest rate established by the Bank of America shall be added on the loth day after any payment hereunder is due, but unpaid . Section 2 . 02 . GROSS SALES DEFINED For the purposes of this Article, the term "gross sales" - 2 - � 1 shall mean the total selling price of all merchandise or services sold or rendered in, or property rented on, or from said premises by LESSEE, his sublessees , licensees, or concessionaires , whether for cash or on credit , and if on credit whether or not paid, shall include, without limitation : (a) Proceeds from all automatic vending, weighing, and other machines owned and operated by LESSEE in or on said premises ; (b) Commissions received by LESSEE from such automatic vending , weighing , and other machines not owned by LESSEE but operated in or on said premises ; (c) Commissions received by LESSEE from the operation of public telephones in or on said premises ; (d) Proceeds from sales based on orders solicited or taken from, in, or on said premises for merchandise or services to be delivered or rendered of , or from sources outside, said premises ; and (e) Proceeds from the renting of beach equipment of any kind from said premises . Section 2 . 03 . GROSS SALES EXCLUSIONS Notwithstanding the provisions of Section 2 . 02 of this lease, the term "gross sales" shall not include the following items , and such items may be deducted from "gross sales" to the extent they have been included therein or have been included in a prior computation of "gross sales" on which a percentage rental has been paid under this lease to LESSOR: 3 - 6253 �r ( a) Any sales or excise taxes otherwise includable in "gross sales" as defined in this Article become part of the total selling price of merchandise or services rendered in, from, or on said premises where LESSEE must account for and remit the taxes to the government entity or entities by which they are imposed; and (b) Any transfer of merchandise from said premises to the manufacturer or supplier from whom it was obtained by LESSEE . Section 2 . 04 . BOOKS AND RECORDS LESSEE shall at all times keep or cause to be kept on the said premises full , complete, and accurate records and books of account showing the total amount of gross sales as defined in this Article made each calendar month in, on, or from said premises . Furthermore, LESSEE shall at the time of sale and in the presence of the customer cause the full selling price of each piece of merchandise and each service rendered in, on, or from said premises to be recorded in a cash register or cash register tape that have cumulative totals and are sealed in a manner approved by LESSOR. LESSEE agrees to maintain on said premises for a period of three (3 ) years following the close of each calendar month all records and books of account and all cash register tapes showing or in any way pertaining to the gross sales made in, or from said premises during such calendar month . Section 2 . 05 . STATEMENT OF GROSS SALES At the time specified in Section 2 . 01 of this lease for the payment of the rent specified in that section, LESSEE shall deliver 4 to LESSOR a true and accurate statement signed by LESSEE or by an authorized employee of LESSEE showing the total gross sales made during the preceding calendar month in, on, or from said premises and the amount of rent then being paid calculated on such gross sales pursuant to this lease . LESSOR may at any time within three (3 ) years after receiving any such statement , at his own cost and expense, cause all books , records , and cash register tapes described in Section 2 . 04 of this lease for the calendar month purportedly covered by the statement to be audited by a public or certified public accountant selected by LESSOR. LESSEE shall on receiving written notice of LESSOR ' S desires for such an audit deliver and make available all such books , records , and cash register tapes to the public or certified public accountant selected by LESSOR . Furthermore, LESSEE shall promptly on demand reimburse LESSOR for the full cost and expense of the audit should the audit disclose that the questioned statement understated gross sales or the rent payable because of gross sales by five (5%) percent or more . ARTICLE 3 . USE OF PREMISES Section 3 . 01 . PERMITTED USE The premises are let for the purpose of operation of a beach concession for the sale of merchandise, food, rental of beach equipment , and other such uses as may from time to time be approved in writing by LESSOR. LESSOR reserves the right to prohibit the sale or rental of any item or article which is objectionable or beyond the scope of the merchandise necessary for proper service to the public or public safety. The prices for the merchandise sold 5 - 6253 and the rental of the recreational beach and water equipment shall be fixed by LESSEE, and LESSOR reserves the right to establish and revise a schedule of maximum prices for any or all items sold or rented to the public by LESSEE, provided, however, that such schedule of maximum prices established by LESSOR shall be reasonable and in accordance with the best interests of the public , the LESSEE, and the LESSOR. ARTICLE 4 . TAXES AND UTILITIES Section 4 . 01 PAYMENT OF UTILITY CHARGES LESSEE shall pay, and hold LESSOR and the property of LESSOR free and harmless from, all charges for the furnishing of gas , water, electricity, telephone service, and other public utilities to said premises during the term of this lease or any extension thereof and for the removal of garbage and rubbish from said premises during the term of this lease or any extensions thereof . Section 4 . 02 . PERSONAL PROPERTY TAXES LESSEE shall pay before they become delinquent all taxes , assessments , or other charges levied or imposed by any governmental entity on the furniture, trade fixtures , appliances, and other personal property placed by LESSEE in, on, or about said premises including , without limiting the generality of the other terms used in this section, any shelves , counters , vaults , vault doors , wall safes , partitions , fixtures , machinery, plant equipment , office equipment , television or radio antennas , or communication equipment brought on said premises by LESSEE. - 6 - a Section 4 . 03 . REAL PROPERTY TAXES All real property taxes or possessory interest taxes and assessments levied or assessed against said premises by any governmental entity, shall be paid before they become delinquent by LESSEE . ARTICLE 5 . MAINTENANCE, ALTERATIONS AND REPAIRS Section 5 . 01 . MAINTENANCE BY LESSEE LESSEE shall , at his own cost and expense, maintain in good condition and repair the exterior roof , exterior walls , structural supports , and the foundation of said premises including window glass . In the event that LESSEE fails to so maintain such items , LESSOR shall promptly be reimbursed by LESSEE for the full cost of any such repairs made by LESSOR. Except as otherwise expressly provided in Section 5 . 02 of this lease, LESSEE shall at his own cost and expense keep and maintain all portions of said premises as well as all improvements on said premises and all facilities appurtenant to . said premises in good order and repair and in as safe and clean a condition as they were when received by LESSEE from LESSOR, reasonable wear and tear also excepted . Section 5 . 02 . MAINTENANCE OF SHOW WINDOW GLASS LESSEE shall , at his own cost and expense, repair and replace any glass in any show window on said premises that becomes broken regardless of cause, including show window glass that is broken by fire , by act of God, except by fault of LESSOR, or by fault of some employee or agent of LESSOR . Furthermore, LESSEE shall at his own cost and expense at all times during the term of this lease carry 7 - 6253 adequate plate glass insurance on the glass in all show windows on said premises to perform the repair and replacement requirements of this section . Should LESSEE fail to repair or replace any glass broken in a show window or fail to maintain adequate plate glass insurance on the glass in show windows on said premises , LESSOR may replace or repair the broken glass or secure such insurance and LESSEE will promptly reimburse LESSOR for the cost thereof and pay LESSOR interest on such costs at the rate of ten ( 100) percent per annum from the date the costs were incurred by LESSOR to the date they are reimbursed to LESSOR by LESSEE. Section 5 . 03 . ALTERATIONS AND LIENS LESSEE shall not make or permit any other person to make any alterations to said premises or to any improvement thereon or facility appurtenant hereto without the written consent of LESSOR first had and obtained . LESSEE shall keep the premises free and clear from any and all liens , claims , and demands for work performed, materials furnished, or operations conducted on said premises at the instance or request of LESSEE. Furthermore, any and all alterations , additions , improvements , and fixtures , except furniture and trade fixtures , made or placed in or on said premises by LESSEE or any other person shall on expiration or sooner termination of this lease become the property of LESSOR and remain on said premises , provided, however, that LESSOR shall have the option on expiration or sooner termination of this lease of requiring LESSEE, at LESSEE ' S sole cost and expense, to remove any or all such alterations , additions , improvements , or fixtures from said premises . 8 - Section 5 . 04 . INSPECTION BY LESSOR LESSEE shall permit LESSOR or LESSOR' S agents , representatives , or employees to enter said premises at all reasonable times for the purpose of inspecting said premises to determine whether LESSEE is complying with the terms of this lease and for the purpose of doing other lawful acts that may be necessary to protect LESSOR ' S interest in said premises under this lease or to perform LESSOR ' S duties under this lease . Section 5 . 05 . SURRENDER OF PREMISES On expiration or sooner termination of this lease, or any extensions or renewals of this lease, LESSEE shall promptly surrender and deliver said premises to LESSOR in as good condition as they are now at the date of this lease . Reasonable wear and tear and repairs herein required to be made by LESSOR excepted . ARTICLE 6 . INDEMNITY AND INSURANCE Section 6 . 01 . HOLD-HARMLESS CLAUSE LESSEE agrees to indemnify, defend and hold LESSOR, its officers , agents and employees , and the property of LESSOR, including said premises free and harmless from any and all claims , liability, loss , damage, or expenses resulting from LESSEE ' S occupation and use of said premises, specifically including , without limitation, any claim, liability, loss , or damage arising from the passive, concurrent negligence of LESSOR, but save and except those which arise from the active concurrent negligence, sole negligence, or sole willful misconduct of LESSOR, and including those arising by reason of : 9 6253 (a) The death or injury of any person or persons , including LESSEE or any person who is an employee or agent of LESSEE, or by reason of the damage to or destruction of any property, including property owned by LESSEE or any person who is anemployee or agent of LESSEE, and caused or allegedly caused by either the condition of said premises , or some act or omission of LESSEE or of some agent , contractor, employee, servant , sublessee, or concessionaire of LESSEE on said premises ; (b) Any work performed on said premises or materials furnished to said premises at the instance or request of LESSEE or any agent or employee of LESSEE; and (c) LESSEE ' S failure to perform any provision of this lease or to comply with any requirement of law or any requirement imposed on LESSOR or the leased premises by any duly authorized governmental agency or political subdivision . LESSEE will conduct all defense at his sole cost and expense and promptly reimburse LESSOR for any costs or attorney fees incurred by LESSOR . Section 6 . 02 . LIABILITY INSURANCE In addition to the workers ' compensation insurance and LESSEE ' S covenant to indemnify LESSOR, LESSEE shall obtain and furnish to LESSOR the following insurance policy covering the said premises : - 10 - General Liability Insurance . A policy of general public liability insurance, including motor vehicle coverage . Said policy shall indemnify LESSEE, its officers , agents and employees , while acting within the scope of their duties , against any and all claims of arising out of or in connection with the said premises , and shall provide coverage in not less than the following amount : combined single limit bodily injury and property damage, including g products/completed operations liability and blanket contractual liability of $1 , 000 , 000 per occurrence or if a designated aggregate form is utilized , $2 , 000 , 000 in the annual aggregate as required by resolution of City Council . Said policy shall name LESSOR, its officers , and employees as Additional Insureds , by endorsement attached thereto , and shall specifically provide that any other insurance coverage which may be applicable to said premises shall be deemed excess coverage and that LESSEE ' S insurance shall be primary. A Certificate of Insurance for said policy shall be approved in writing by the City Attorney prior to the commencement of the lease term, and a current Certificate shall be furnished at all times during the lease term. All Certificates of Insurance (and the policies of insurance or endorsements thereof) shall provide that any such Certificates and policies shall not be cancelled or modified without thirty (30) days ` prior written notice to LESSOR . LESSEE shall notify LESSOR immediately if and when any of said policies are reduced in coverage or limits due to payment of a claim by its insurance carrier . Section 6 . 03 . FIRE INSURANCE In order that the business of LESSEE and the gross sales of - 11 - 6253 LESSEE as defined in this lease may continue with as little interruption as possible, LESSEE shall , during the full term of this lease and any renewals or extensions thereof , maintain at LESSEE ' S own cost and expense an insurance policy issued by a reputable company authorized to conduct insurance business in California insuring for their full insurable value all fixtures and equipment and : to the extent possible, all merchandise that is , at any time during the term of this lease or any renewal or extension thereof , in or on said premises against damage or destruction by fire, theft , or the elements . LESSEE shall also maintain in force during the entire term of this agreement , a standard broad form fire insurance policy in which the LESSOR is named and in which any and all losses are made payable to LESSOR . The face amount of said policy shall be for eighty (80%) percent of the replacement value of the premises , and be in a form acceptable to the City Attorney. Section 6 . 04 . WORKERS ' COMPENSATION POLICY CERTIFICATE WITH STATUTORY LIMITS LESSEE shall comply with all of the provisions of the Workers ' Compensation Insurance and Safety Acts of the State of California , the applicable provisions of Divisions 4 and 5 of the California Labor Code and all amendments thereto; and all similar state or federal acts or laws applicable; and shall indemnify, defend and hold harmless LESSOR from and against all claims , demands , payments , suits , actions , proceedings and judgments of every nature and description, including attorney ' s fees and costs , presented, brought or recovered against LESSOR, for or on account of - 12 - any liability under any of said acts which may be incurred by reason of any activity performed by LESSEE under this agreement . LESSEE shall obtain and furnish evidence to LESSOR of maintenance of statutory workers ' compensation insurance and employers ' liability in an amount of not less than $500 , 000 bodily injury by accident , each accident , $500 , 000 bodily injury by disease, each employee, and $1 , 000 , 000 bodily injury by disease, policy limit . Section 6 . 05 . LESSOR ' S INSURANCE EXCESS All policies of insurance shall specifically provide that LESSOR is an additional named insured and that any policy of insurance maintained by the LESSOR which may be applicable to any loss hereunder shall be deemed excess to LESSEE ' S policy of insurance . Thirty (30) days prior to LESSOR ' S possession of premises , LESSEE shall furnish to LESSOR, a certificate, endorsed by the carrier or its agent , as proof of the existence of the insurance required hereunder . Such certificate and policy or policies required by this agreement shall be in a form acceptable to the City Attorney. Section 6 . 06 . CANCELLATION OF POLICIES The above described policy or policies shall contain a provision that thirty (30) days ' notice of termination, cancellation or reduction of coverage of insured or additional insured shall be given in writing to LESSEE . ARTICLE 7 . SIGNS AND TRADE FIXTURES Section 7 . 01 . INSTALLATION AND REMOVAL OF TRADE FIXTURES 13 - 6253 LESSEE shall have the right at any time and from time to time during the term of this lease and any renewal or extension of such term, at LESSEE ' S sole cost and expense, to install and affix in, to , or on said premises such items , herein called "trade fixture, " for use in LESSEE ' S trade or business as LESSEE may, in his sole discretion, deem advisable . Any and all such trade fixtures that can be removed without structural damage to said premises or any building or improvements on said premises shall , subject to Section 7 . 02 of this lease, remain the property of the LESSEE and may be removed by LESSEE at any time prior to the expiration or sooner termination of this lease . Section 7 . 02 . TRADE FIXTURES AS SECURITY FOR LEASE Subject to and to be subordinated to any security interest which LESSEE may give to any leading institution and/or financing source for the purpose of obtaining financing for the purchase of trade fixtures and equipment or the operation of said premises , LESSEE hereby grants to LESSOR a security interest in all trade fixtures and equipment owned by LESSEE and now or hereafter placed on said premises by LESSEE as security for the faithful performance of all the terms , conditions , and covenants of this lease to be performed by LESSEE. Any right or rights of removal of trade fixtures given LESSEE by the provisions of Section 7 . 01 of this lease shall be exercisable only if, at the time for removal , LESSEE is not in default in performance of this lease . LESSEE may, however, at any time he is not in default in performance of this lease, trade in or replace any trade fixture free of the security interest created by this section and this security interest will 14 - then attach to the item that replaced such trade fixture . On default in performance of any obligation of this lease to be performed by LESSEE, LESSOR shall immediately have, as to the trade fixtures , the remedies provided to a secured party under the Uniform Commercial Code as enacted in California . Section 7 . 03 . UNREMOVED TRADE FIXTURES Any trade fixtures described in this Article that are not removed from said premises by LESSEE within thirty (30) days after the expiration or sooner termination, regardless of cause, of this lease shall be deemed abandoned by LESSEE and shall automatically become the property of LESSOR as owner of the real property to which they are affixed and not simply because of the lien described in Section 7 . 02 of this lease . Section 7 . 04 . SIGNS LESSEE shall not place and maintain, nor permit any other person to place or maintain, on or in any exterior door , wall , or window of said premises any sign, awning, canopy, marquee, or other advertising without the express written consent and approval of LESSOR . Furthermore, LESSEE shall not place any decoration, lettering , or advertising matter on the glass of any exterior show window of said premises without the written approval and consent of LESSOR . Should LESSOR consent to any such sign, awning , canopy, marquee, decoration, or advertising matter , LESSEE shall maintain it at all times during this lease in good appearance and repair . On expiration or sooner termination of this lease, and of the items mentioned in this section not removed from said premises by LESSEE on such expiration or termination of this lease may, without damage - 15 - 6253 or liability, be destroyed by LESSOR. This lease is expressly contingent upon approval of all signs by both LESSOR and LESSEE. ARTICLE 8 . Section 8 . 01 . PARTIAL DESTRUCTION At the option of the LESSOR, should said premises or the building on said premises be partially destroyed by any cause not the fault of LESSEE or any person in or about said premises with the consent , express or implied, of LESSEE, this lease shall continue in full force and effect and LESSOR, at LESSOR ' S own cost and expense, shall promptly commence and diligently continue and complete the work of repairing and restoring said premises to their prior condition providing such work can be accomplished under all applicable governmental laws and regulations within one hundred eighty ( 180) working days . Section 8 . 02 . TOTAL DESTRUCTION At the option of the LESSOR, should said premises or the building on said premises be so far destroyed by any cause not the fault of LESSEE or any person in or about said premises with the consent , expressed or implied, of LESSEE that they cannot be repaired or restored to their former condition within one hundred eighty ( 180) working days , LESSOR may, at LESSOR ' S option : (a) Continue this lease in full force and effect by repairing and restoring, at LESSOR ' S own cost and expense, said premises to their former condition; or - 16 - (b) Terminate this lease by giving LESSEE written notice of such termination . Section 8 . 03 . INSURANCE PROCEEDS Any insurance proceeds received by LESSOR because of the total or partial destruction of said premises or the building on said premises shall be the sole property of LESSOR, free from any claims of LESSEE, except any and all insurance proceeds , including business interruption insurance which would ordinarily flow to the benefit of LESSEE . Section 8 . 04 . ABATEMENT OF RENT Should LESSOR elect under Section 8 . 02 of this lease or be required under Section 8 . 01 of this lease to repair and restore said premises to their former condition following partial or full destruction of said premises or the building on said premises : (a) LESSOR shall have full right to enter said premises and take possession of so much of said premises , including the whole of said premises , as may be reasonably necessary to enable LESSOR promptly and efficiently to carry out the work of repair and restoration; and (b)The percentage rent described in Section 2 . 01 of this lease shall not be abated for the time LESSEE is prevented from using the whole of said premises . Section 8 . 05 TOTAL CONDEMNATION Should, during the term of this lease or any renewal or extension thereof, title and possession of all of said premises be taken under the power of eminent domain by any public or 17 - 6253 quasi-public agency or entity, this lease shall terminate as of 12 : 01 a .m. of the date actual physical possession of said premises is taken by the agency or entity exercising the power of eminent domain and both LESSOR and LESSEE shall thereafter be released from all obligations , except those specified in Section 8 . 08 of this lease, under this lease . Section 8 . 06 . TERMINATION OPTION FOR PARTIAL CONDEMNATION Should, during the term of this lease or any renewal or extension thereof , title and possession of only a portion of said premises be taken under the power of eminent domain by any public or quasi-public agency or entity, LESSEE may, at LESSEE ' S option, terminate this lease if more than five percent (5%) of the ground area [or floor space] or more than 10 percent ( 10%) in value of said premises if taken under the power of eminent domain. LESSEE shall exercise his option by giving written notice to LESSOR within 30 days after actual physical possession of the portion subject to the eminent domain is taken by the agency or entity exercising the power . This lease shall terminate as of 12 : 01 a .m. of the date the notice if deemed given to LESSOR. Section 8 . 07 . PARTIAL CONDEMNATION WITHOUT TERMINATION Should LESSEE fail to exercise the option described in Section 8 . 06 of this lease or should the portion of said premises taken under the power of eminent domain be insufficient to give rise to the option described in Section 8 . 06 of this lease, then, in the event : (a) This lease shall terminate as to the portion of said premises taken by eminent domain as of 12 : 01 - 18 - a .m. of the day, herein called the "date of taking , " actual physical possession of that portion of said premises is taken by the agency or entity exercising the power of eminent domain . (b) LESSOR, at LESSOR ' S own cost and expense, shall remodel or reconstruct the building remaining on the portion of said premises not taken by eminent domain into a single efficient architectural unit as soon after the date of taking , or before,, as can be reasonably done, provided, however, that the percentage rent specified in this lease shall be abated or reduced during such remodeling and reconstruction. Section 8 . 08 . CONDEMNATION AWARD Should, during the term of this lease or any renewal or extension thereof, title and possession of all or any portion of said premises be taken under the power of eminent domain by any public or quasi-public agency or entity, the portion of the compensation or damages for the taking awarded to each of the parties to this lease, LESSOR and LESSEE, shall belong to and be the sole property of the party LESSOR or LESSEE, to whom it is awarded . LESSEE shall be entitled to that portion of the compensation or damages awarded for the eminent domain taking that represents ( 1) the reasonable value of LESSEE ' S rights under this lease for the unexpired term of this lease, (2) the cost or loss sustained by LESSEE because of the removal of LESSEE ' S merchandise, trade fixtures, equipment, and furnishings from the portion of said 19 - 6253 premises taken by eminent domain, and (3) whatever other compensation and/or damages which may be usual and customary to LESSEES under the circumstances . Section 8 . 09 . ARBITRATION OF CONDEMNATION AWARD Should separate awards not be made to LESSOR and LESSEE for the taking by eminent domain of all or any portion of said premises , and should LESSOR and LESSEE be unable to agree on the manner the total award is to be divided between them, pursuant to Section 8 . 08 of this lease, the proper division of the award between LESSOR and LESSEE shall be settled by arbitration in accordance with the rules promulgated by the American Arbitration Association . Each party shall appoint an arbitrator and the two arbitrators so appointed shall , within a month after both have been appointed, select a third arbitrator . The decision of any two of the three arbitrators in writing shall be binding on both LESSOR and LESSEE . Should no two arbitrators be able to agree within one month after appointment of the third arbitrator , the report of the arbitrator most favorable to LESSOR and the report of the arbitrator most favorable to LESSEE shall both be disregarded and the report of the remaining arbitrator shall be binding on both LESSOR and LESSEE . Should either LESSOR or LESSEE fail to appoint an arbitrator within fifteen ( 15) days after receiving written notice from the other to do so , the arbitrator selected by the other party shall act for both and his decision in writing shall be binding on both LESSOR AND LESSEE . ARTICLE 9 . DEFAULT, ASSIGNMENT, AND TERMINATION Section 9 . 01 . SUBLEASING OR ASSIGNING AS BREACH - 20 - LESSEE shall not encumber, assign, or otherwise transfer this lease, any right or interest in this lease, or any right or interest in said premises or any of the improvements that may now or hereafter be constructed or installed on said premises without the express written consent of LESSOR first had and obtained . Neither shall LESSEE sublet said premises or any part thereof or allow any other person, other than LESSEE ' S agents , servants , and employees to occupy said premises or any part thereof without the prior written consent of LESSOR . A consent by LESSOR to one assignment , one subletting , or one occupation of said premises by another person shall not be deemed to be a consent to any subsequent assignment , subletting , or occupation of said premises by another person . Any encumbrance, assignment , transfer, or subletting without the prior written consent of LESSOR, whether it be voluntary or involuntary, by operation of law or otherwise, is void and shall , at the option of LESSOR terming this to t s lease . The consent of LESSOR to any encumbrance , assignment including occupation or transfer hereof of LESSEE ' S interest in this lease or the subletting by LESSEE of said premises or parts of said premises shall not be unreasonably withheld; however, LESSOR shall have the right of first refusal in connection with any assignment , sale, sublease or transfer hereof and agrees to exercise or refuse such right in writing within thirty (30) days ' notice by LESSEE . Such right shall not apply, however, to assignments , transfers , or sublettings to immediate family members e bers of LESSEE, a family trust, or to any corporate entity of which LESSEE, or any of LESSEE' S immediate family, are sole stockholders . 21 - 6253 Section 9 . 02 . ABANDONMENT BY LESSEE Should LESSEE breach this lease and abandon said premises prior to the natural expiration of the term of this lease, LESSOR may. (a) Continue this lease in effect by not terminating LESSEE ' S right to possession of said premises , in which event LESSOR shall be entitled to enforce all his rights and remedies under this lease, including the right to recover the rent specified in this lease as it becomes due under this lease; or (b) Terminate this lease and recover from LESSEE : (1) The worth at the time of award of the unpaid rent which had been earned at the time of termination of the lease; (2) The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination of the lease until the time of award exceeds the amount of rental loss that LESSEE proves could have been reasonably avoided; (3) The worth at the time of award of the amount by which the unpaid rent for the balance of the term of this lease after the time of award exceeds the amount of rental loss that LESSEE proves could be reasonably avoided; and - 22 - (4) Any other amount necessary to compensate LESSOR for all detriment proximately caused by LESSEE ' S failure to perform his obligations under this lease . .Section 9 . 03 . DEFAULT BY LESSEE Should LESSEE default in the performance of any of the covenants , conditions , or agreements contained in this lease , LESSEE shall have breached the lease and LESSOR may, in addition to the remedy specified in the subparagraph (b) of Section 9 . 02 of this lease , reenter and regain possession of said premises in the manner provided by the laws of unlawful detainer of the State of California then in effect . Section 9 . 04 . INSOLVENCY OF LESSEE The insolvency of LESSEE as evidenced by a receiver being appointed to take possession of all or substantially all of the property of LESSEE, or the making of a general assignment for the benefit of creditors by LESSEE, or filing a petition in bankruptcy shall terminate this lease and entitle LESSOR to reenter and regain possession of said premises . Section 9 . 05 . CUMULATIVE REMEDIES The remedies given to LESSOR in this Article shall not be - exclusive but shall be cumulative and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this lease . Section 9 . 06 . WAIVER OF BREACH The waiver by LESSOR of any breach by LESSEE of any of the provisions of this lease shall not constitute a continuing waiver or 23 - 6253 a waiver of any subsequent breach by LESSEE either of the same or another provision of this lease . ARTICLE 10 . MISCELLANEOUS Section 10 . 01 . FORCE MAJEURE - UNAVOIDABLE DELAYS Should the performance of any act required by this lease to be performed by either LESSOR or LESSEE be prevented or delayed by reason of an act of God, strike, lockout , labor troubles , inability to secure materials , restrictive governmental laws or regulations , or any other cause except financial inability not the fault of the party required to perform the act, the time for performance of the act will be extended for a period equivalent to the period of delay and performance of the act during the period of delay will be excused, provided, however, that nothing contained in this section shall excuse the prompt payment of rent by LESSEE as required by this lease or the performance of any act rendered difficult solely because of the financial condition of the party, LESSOR or LESSEE, required to perform the act . SGCtiOn 10 . 02 . CARE OF PREMISES - MAINTENANCF, DEPOSIT ( a) LESSEE shall paint , stain or seal the premises ' stucco , trim, etc . , a minimum of every two years , unless it is, determined by LESSOR in its sole discretion , that such work shall be done once every year . All exterior metal surfaces shall be painted no less than once each year except the roof . (b) Any and all graffiti shall be removed by LESSEE at it ' s 24 - r , own expense from the leased premises within forty-eight (48) hours ' notice thereof . (c) LESSEE shall not obstruct , cause or permit any obstruction surrounding the premises or any part thereof in any manner whatsoever . (d) LESSEE shall comply with all written notices served by LESSOR with regard to the care and maintenance of the premises . ( 1) Any written notice hereunder shall specify the work to be done, the estimated cost thereof , and the period of time deemed to be reasonably necessary for completion of such work . Should LESSEE fail to comply with LESSOR ' S written notice within fifteen (15) days , or within a time deemed reasonably necessary of the time specified therein, LESSEE shall pay over to LESSOR the estimated cost of such work as setforth in the notice . Upon receipt of such sum, LESSOR shall then proceed to cause the required work to be performed . (e) Upon execution hereof, LESSEE shall pay and maintain at all times hereunder, a security deposit with LESSOR in a sum of not less than Two Thousand Five Hundred dollars ($2 , 500) to guarantee the repair and maintenance of the leased premises as provided hereinabove . Such deposit may be in the form of cash or an assignment of certificate of deposit or savings 25 - 6253 z°j > account . The form of any such assignment shall be approved by the City Attorney. The interest accrued on said deposit shall be paid to LESSEE annually. A surety bond approved by the City Attorney may be substituted for the above mentioned deposit . (f) EMERGENCY CLOSING OR CLOSING TO EFFECT REPAIR/REMODELING THE PREMISES LESSOR may close the beach without liability therefor at any time it deems necessary for the protection of life, limb or property, or upon reasonable notice to effect any repair, remodeling or rebuilding deemed necessary by LESSOR. In such event , Section 8 . 04 (b) hereof shall also apply. (g) DELIVERIES OF SUPPLIES LESSOR shall establish the days and times deliveries of supplies may be made and advise LESSEE in writing thereof . (h) EMPLOYEE PARKING LESSOR shall establish the days and times when LESSEE and LESSEE ' S employees and number of automobiles, trucks , and other motorized and non-motorized vehicles may park, and where, and advise LESSEE in writing thereof . ( i) NOTICE Any written notice, given under the terms of this agreement , shall be either delivered personally or mailed, certified mail, postage prepaid, addressed to - 26 - I the party concerned, as follows : TO CITY: TO LESSEE: Mr . Robert Franz Mr . Cecil Wheat Deputy City Administrator Mrs . Virginia Wheat City of Huntington Beach 239 Lake Street 2000 Main Street Huntington Beach, CA 92648 Huntington Beach, CA 92648 (j ) LESSEE ' S RIGHT TO RENEGOTIATE LEASE If , in the event , LESSOR shall at some future time within the term of this lease or any extension thereof, redevelop the immediate area on which said premises is situated, or the immediate adjacent surrounding area thereto, to the extent that one or more new eating facilities are constructed and situated either on said immediate area or adjacent thereto, and, in such event, LESSEE can demonstrate that such has or will cause him to be detrimentally affected thereby, then, in such event , LESSEE shall have the right to request that the terms , conditions , and provisions of this lease be renegotiated . In that event and upon such request by LESSEE, LESSOR will respond and act reasonably and in good faith in the renegotiation of this lease. (k) INSURANCE HAZARDS LESSEE shall not commit or permit the commission of any acts on said premises nor use or permit the use of said premises in any manner that will increase the existing 27 - 6253 rates for or cause the cancellation of any fire, liability, or other insurance policy insuring said premises or the improvements on said premises . LESSEE shall , at his own cost and expense, comply with any and all requirements of LESSOR' S insurance carriers necessary for the continued maintenance at reasonable rates of fire and liability insurance policies on said premises and the improvements on said premises . ( 1) WASTE OR NUISANCE LESSEE shall not commit or permit the commission by others of any waste on said premises ; LESSEE shall not maintain, commit , or permit the maintenance or commission of any nuisance as defined in Section 3479 of the California Civil Code on said premises ; and LESSEE shall not use or permit the use of said premises for any unlawful purpose . (m) COMPLIANCE WITH LAW LESSEE shall at LESSEE ' S own cost and expense comply with all statutes , ordinances , regulations, and requirements of all governmental entities , both federal and state and county or municipal , relating to LESSEE ' S use and occupancy of said premises whether such statutes , ordinances , regulations , and requirements be now in force or hereinafter enacted . The judgment of any court of competent jurisdiction, or the admission by LESSEE in a proceeding brought against LESSEE by any government entity, that LESSEE has violated any such - 28 - 7 statute, ordinance, regulation, or requirement shall be conclusive as between LESSOR and LESSEE and shall be ground for termination of this lease by LESSOR . (n) BINDING ON HEIRS AND SUCCESSORS This lease shall be binding on and shall inure to the benefit of the heirs , executors , administrators , successors , and assigns of the parties hereto . (o) PARTIAL INVALIDITY Should any provision of this lease be held by a court of competent jurisdiction to be either invalid, void, or unenforceable, the remaining provisions of this lease shall remain in full force and effect unimpaired by the holding, so long as the reasonable expectations of the parties hereto are not materially impaired . (p) SOLE AND ONLY AGREEMENT This instrument constitutes the sole and only agreement between LESSOR and LESSEE respecting said premises , the leasing of said premises to LESSEE, or the lease term herein specified, and correctly sets forth the obligations of LESSOR and LESSEE to each other as of its date . Any agreements or representations respecting said premises or their leasing by LESSOR to LESSEE not expressly set forth in this instrument are null and void . (q) TIME OF ESSENCE Time is expressly declared to be the essence of this lease . - 29 - 6253 ( r) CONCESSION ROOF Tenant is required to maintain the concession roof including all materials and repairs to LESSOR ' S satisfaction. ( s) GOODS OR SERVICES In the event the Mayer Corporation requests that concessionaire provide goods and/or services , the cost for any such request shall be charged to and paid by the Mayer Corporation on a "cost-plus" basis . (t) EXTERIOR MODIFICATIONS In the event the LESSOR requests exterior modifications to the building on the premises , any such work shall occur during the off season and in every way seek to minimize any disruption in LESSEE ' S business . Any and all costs for such modifications shall be paid by the LESSOR or its nominee . No such cost shall be paid by concessionaire . (u) TERMINATION In addition, the five year term is subject to termination by Lessor upon one hundred eighty ( 180) days written notice, if during the term hereof , the implementation of a revitalization plan affecting the Lesse ' s operation occurs . Lessee is hereby granted the right to participate in such revitalization process , and will be afforded the opportunity to continue to operate pursuant hereto so long as Lessee meets Lessor ' s reasonable requirements pursuant to such revitalization plan. - 30 - h WARNING: READ THE FOLLOWING PARAGRAPH BEFORE EXECUTING THIS LEASE AGREEMENT ARTICLE 11 . LESSEE ' S NON-ELIGIBILITY FOR RELOCATION ASSISTANCE The leased PREMISES is within a redevelopment project area . Government Code 7260 et . seq. provides for relocation benefits for displaced persons . However, the LESSEE, if displaced, would not be entitled to relocation benefits by virtue of the fact that the premises have heretofore been acquired and are being held by LESSOR expressly for redevelopment purposes . IN CONSIDERATION OF THIS INTERIM LEASE LESSEE HEREBY ACKNOWLEDGES THAT NO BENEFITS ARE AVAILABLE AND EXPRESSLY WAIVES ANY CLAIM TO RELOCATION BENEFITS PURSUANT TO CIVIL CODE §3513 . (Lessee' s Initials) 31 - 6253 IN WITNESS WHEREOF the parties hereto have executed this agreement on the 13th day of October 1989 , at Huntington Beach, California . LESSEE : LESSOR: CITY OF HUNTINGTON BEACH, a municipal corporation Cecil E . W ea Virgi is Nell Wheat Mayor ATTEST: APPROVED AS TO FORM: City Clerk C,Cty Attorney R ,VIEWED AND APPROVED: %"II�'T A I{F� A PROVED : City Administrator Director o Administrative Services - 32 - Peso No. 6253 STATE OF CALIFORNIA COUNTY OF ORANGE ss: CITY: OF HUNTIPJGTON BEACH ) I , CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majoriiy of a1l the members of said City Council at a regular meeting thereof held on the 4th day of March 19 91 _, by the following vote: AYES: Councilmembers: MacA1 istar, Winchell, Sri 1y arc-en.�ly, Robitoi 11c- NOES: Councilmembers: None ABSENT: Councilmembers: Moulton-Patterson City Clerk an ex-o is uerk of the City Council of the City of Huntington Beach, California 1.