The URL can be used to link to this page

Home My WebLink AboutDWIGHTS BEACH CONCESSION - 2003-10-0611TY OF HUNTINGTON BEACt n'�' 2A MEETING DATE: October 6, 2003 DEPARTMENT ID NUMBER: CS 02-001 Council/Agency Meeting Held: /o/Gfo3 Deferred/Continued to: V pproved ❑ Conditionally Approved ❑ Denied City Clerk's Signature Council Meeting Date: October 6, 2003 Department ID Number: CS 69-0ca CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS SUBMITTED BY: PREPARED BY: SUBJECT: RAY SILVER Cit Administrator�� fn r" N w Y JIM ENGLE, Community Services Direct CLAY MARTIN, Administrative Services Di ctor APPROVE STANDARD LEASE AGREEMENT FOR CITY'S FOOD AND RENTAL CONCESSIONS FOR DWIGHT'S BEACH CONCESSION Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: Should City Council approve the renewal of the lease between David Clapp and Laurie Knight, DBA Dwight's & Jack's, Inc. (owner of Dwight's) and the City using the standard concessionaire lease agreement? Funding Source: Not applicable. Recommended Action: Motion to: Approve the lease renewal between the City of Huntington Beach and David Clapp & Laurie Knight, for DBA Dwight's & Jack's, Inc. Beach Concession, using the standardized lease agreement with terms and conditions as presented herein Alternative Action(s): 1. Do not approve the lease renewal with Dwight's & Jack's, Inc for Dwight's Beach Concession. 2. Approve the lease renewal with Dwight's & Jack's, Inc and the City using a different form of lease -10 Dwight's RCA 9-11-03 �2! 9/19/2003 10:48 AM 1 R%UEST FOR COUNCIL ACTIt7N MEETING DATE: October 6, 2003 DEPARTMENT ID NUMBER: CS 02-001 Analysis: On October 25, 1993 the City entered into a lease agreement with David Clapp and Laurie Knight, who are the owners of Dwight's, to operate a beach concession at its present location. Dwight's is popular with beach patrons, and has been successful. In February of 2002, the City Council approved a standard lease to be used when renewing leases for all beach, park, food, and rental concessions. The lease with David Clapp and Laurie Knight for Dwight's beach concession is now due for renewal. Staff has prepared a lease for the subject property and it has been executed by David Clapp and Laurie Knight. The Community Services Department, which is the operating department of concessionaire lease agreements, along with the Real Estate Division of Administrative Services and the City Attorney's Office recommend the approval of this lease. Environmental Status: N/A Attachment(s): Dwight's RCA 9-11-03 9/19/2003 10:48 AM ATTACHMENT 1 SECTION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 • LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND DAVID CLAPP AND LAURIE KNIGHT, DBA DWIGHT'S & JACK'S, INC. FOR BEACH CONCESSION Table of Contents G/f,A0 D�►G�"a� PAGE Superseding of Prior Lease...................................................................................... I Grant of Concession on the Premises......................................................................2 Reservations, Encumbrances and Rights-of-Way....................................................2 , Timeof Essence.......................................................................................................3 Term.........................................................................................................................3 Conditions of Premises as Is....................................................................................3 Duration of Public Facilities....................................................................................4 Additions, Alterations and Removal........................................................................4 City's Contract Administrator..................................................................................4 Rent.............................................................................................................. 5 LateCharge and Penalty..........................................................................................5 GrossSales Defined.................................................................................................6 Gross Sales Exclusions............................................................................................7 Booksand Records..................................................................................................8 Statement of Gross Sales/Audit...............................................................................9 SecurityDeposit.......................................................................................................10 Use of Coca-Cola Products...................................................................................... I I Quality of Sales, Rentals and Services......................:.............................................I I Indemnification, Defense and Hold Harmless Agreement......................................12 Workers' Compensation and Employers' Liability Insurance..................................13 General Public Liability Insurance..........................................................................14 PropertyInsurance...................................................................................................14 Increase in Amount of General Public Liability and Property Insurance................16 Certificates of Insurance; Additional Insured Endorsements..................................16 InsuranceHazards....................................................................................................17 Maintenance of Premises.........................................................................................17 RentCredit................................................................................................................19 Damage, Destruction or Nuisance...........................................................................19 Taxes........................................................................................................................20 Paymentsof Obligations..........................................................................................20 Utilitiesand Services...............................................................................................20 BusinessLicense......................................................................................................21 Signs, Advertising and Approval of Name..............................................................21 No Assigning, Subleasing or Encumbering.............................................................21 Terms Binding on Successors..................................................................................24 Default......................................................................................................................24 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72. 73 74 75 Remedies..................................................................................................................26 Cumulative Remedies..............................................................................................30 Waiverof Default....................................................................................................30 City's Defaults/Lessee's Remedy.............................................................................30 Consent....................................................................................................................31 Holdover..................................................................................................................31 Waiverof Claims.....................................................................................................32 Inspection of Premises.............................................................................................32 City's Right to Lease Buyout.......................................................................:...........32 Photography.............................................................................................................35 Hazardous Substances..............................................................................................36 Nondiscrimination....................................................................................................3 7 Sale of Alcoholic Beverages and Entertainment Prohibited....................................38 Liens......................................................................................................................... 39 Installation and Removal of Trade Fixtures.............................................................39 Destruction...............................................................................................................39 No Abatement of Rent During Repair Work.......................:...................................41 EminentDomain .... :................................................................................................. 41 Relocation and Assistance, Business Goodwill and Leasehold Bonus Value .........42 QuitclaimDeed........................................................................................................42 Restoration and Surrender of Premises/Title to Improvements...............................42 Force Majeure - Unavoidable Delays......................................................................44 City's Option to Close the Premises ........................................ Deliveries of Supplies..............................................................................................45 EmployeeParking....................................................................................................45 Conflictof Interest...................................................................................................45 Notice.......................................................................................................................45 Compliancewith Laws............................................................................................46 Interpretation of this Lease......................................................................................47 Survival....................................................................................................................47 Modification.............................................................................................................47 SectionHeadings.....................................................................................................47 Brokers.....................................................................................................................48 Independent Contractor............................................................................................48 Attorney's Fees.........................................................................................................48 Legal Services Subcontracting Prohibited...............................................................48 GoverningLaw........................................................................................................49 DuplicateOriginal....................................................................................................49 Entirety.....................................................................................................................49 THIS LEASE LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND DWIGHT'S & JACK'S, INC. FOR DWIGHT'S BEACH CONCESSION (the "Lease") is made and entered into effective BS,' (,2 2003 by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and DWIGHT'S & JACK'S INC., a California corporation ("Lessee") WHEREAS, City wishes to lease certain real property (the "Property"), described as Dwight's Beach Concession, 201 Pacific Coast Highway, Huntington Beach, CA 92648, together with a. building and other related improvements (collectively referred to as the "Improvements"). The term "Premises" as used in this Lease shall mean both the Property and the Improvements. Lessee desires to lease the Premises in the manner set forth below. NOW, THEREFORE, the parties covenant and agree as follows: SECTION 1. SUPERSEDING OF PRIOR LEASE This Lease shall supersede and replace any existing lease agreement(s) for the Premises currently entered into by and between the Iparties and all supplemental agreement(s) entered into by and between the parties regarding the existing lease agreement(s). SECTION 2. GRANT OF CONCESSION ON THE PREMISES City, pursuant to the terms of this Lease, grants to Lessee for the purposes stated herein, the right, privilege and duty to equip, operate and maintain a concession open to the public located on the Premises (hereinafter sometimes referred to as the "Concession"). Lessee shall not use the Premises for any other purpose or business. The legal description of the Premises is 03agree/dwights concession lease/9/16/03 I set forth in Exhibit "A", which is attached and incorporated herein by this reference. A map depicting the Premises is set forth in Exhibit "B", which is attached hereto and incorporated herein by this reference. This Lease is not intended to confer third -party beneficiary status to anyone. SECTION 3. RESERVATIONS, ENCUMBRANCES AND RIGHTS=OF-WAY (a) City expressly reserves all natural resources in, on, or two hundred fifty (250) feet under the Premises, including, without limitation, oil, coal, natural gas and other hydrocarbons, minerals, aggregates, timber and other geothermal resources, as well as the right to grant leases or other contractual arrangements in and over the Premises for the extraction of such natural resources. However, such leasing or other arrangement shall be neither inconsistent nor incompatible with the rights or privileges of Lessee under this Lease. (b) City expressly reserves a right to enter upon the Premises with as much advance written, verbal or electronic notice as possible to Lessee for any reason associated with public health, safety or welfare, or for the protection of life, limb or property. In all other cases unless otherwise specifically set forth herein, City reserves the right for such entry but City shall give Lessee at least twenty-four (24) hours advance written, verbal or electronic notice. City shall have a right of reasonable access to the Premises across Lessee owned, controlled or occupied lands adjacent to the Premises, if any, for any purpose associated with this Lease. (c) City expressly reserves the right to lease, convey, or encumber the Premises, in whole or in part, for any purpose not inconsistent or incompatible with the rights or privileges of Lessee under this Lease. In addition, Lessee agrees to subordinate 03agree/dwights concession lease/9/16/03 2 the Lease to any existing or future City financing regarding the Premises or any portion thereof. Lessee also agrees to cooperate and provide any documentation necessary for City to obtain any such financing. (d) This Lease is subject to pre-existing contracts, leases, licenses, easements, encumbrances and claims affecting the Premises and it is made without warranty by City of title, condition or fitness of the land for the stated or intended use. SECTION 4. TIME OF ESSENCE Time shall be of the essence of this Lease and each and all of its terms, covenants or conditions in which performance is a factor. SECTION 5. TERM This Lease shall commence at 12:01 a.m. on October 20, 2003, for a ten (10) year term, which shall end at 11:59 p.m. on October 19, 2013, unless extended, or sooner terminated, as provided for herein. SECTION 6. CONDITIONS OF PREMISES AS IS The taking of possession of the Premises by Lessee shall, in itself, constitute acknowledgment that the Premises are in good and tenantable condition. Upon taking possession of the Premises, Lessee agrees to accept the Premises in their presently existing condition, "as is", and agrees that City shall not be obligated to make any alterations, additions or betterments thereto. SECTION 7. DURATION OF PUBLIC FACILITIES By entering into this Lease, City makes no stipulation as to the type, size, location or duration of public facilities (excluding the Premises), including, without limitation, any City parking lots to be maintained on property owned, controlled or occupied by City. 03agree/dwights concession lease/9/16/03 3 • • SECTION 8. ADDITIONS, ALTERATIONS AND REMOVAL (a) No modifications, alterations or additions to the Premises, including, without limitation, construction of Improvements or changes to structural design, landscape design, or interior or exterior furnishings, shall be constructed or made by Lessee without Lessee first obtaining the prior written approval of City, which will not be unreasonably withheld. (b) Except as provided under this Lease, no alteration or removal of existing Improvements on or natural features of the Premises shall be undertaken without Lessee first obtaining the prior written approval of City. (c) Lessee's obligation to obtain City's prior written approval is separate and independent of Lessee's obligation to obtain any permits from City, such as, without limitation, a building permit. SECTION 9. CITY'S CONTRACT ADMINISTRATOR City's Director of Community Services, or his or her designee, shall be City's Contract Administrator for this Lease with the authority to act on behalf of City for the purposes of this Lease, and all City approvals and notices required to be given herein to City shall be so directed and addressed. SECTION 10. RENT Lessee agrees to pay to City as rent (the "Rent") for the use and occupancy of the Premises a sum equal to the following percentages of the amount of "Gross Sales", as defined in Section 12 below: $0 - $100,000.00 of Gross Sales = 7.5%; $100,000.01 - $150,000.00 of Gross Sales = 9.5%; 03agree/dwights concession lease/9/16/03 4 • Over $150,000.00 of Gross Sales = 11.5%. Lessee shall pay the Rent monthly to City at the City Treasurer's Office, P.O. Box 711, Huntington Beach, California, 92648, or at such other place or places as City may from time -to - time designate by written notice delivered to Lessee. Lessee shall pay the Rent, which must be received by the City Treasurer within fifteen (15) calendar days after the end of the month for which the Rent is being paid, or on the next business day if the fifteenth day falls on a weekend or holiday. SECTION 11. LATE CHARGE AND PENALTY If the Rent is not received by the City Treasurer within twenty (20) calendar days after the end of the month for which the Rent is being paid, or the next business day if the twentieth day falls on a weekend or holiday, Lessee shall pay the following late charge and penalty: (1) a late charge of ten percent (10%) shall be applied to any outstanding balance after any payment hereunder is due but unpaid; and (2) one and a half percent (1 '/z%) penalty per month shall be added for each month the Rent is due but unpaid. With respect to any other payments required by Lessee, a one and a half percent (1 'h%) penalty per month shall be added for each month such payment hereunder is due but unpaid. SECTION 12. GROSS SALES DEFINED For the purpose of this Lease, the term "Gross Sales" shall mean the total price of all merchandise, food and beverages, or services sold or rendered, or equipment rented, in, on, or from the Premises by Lessee, or anyone contracting with Lessee, including, without limitation, its agents or sublessees (collectively or individually, "Lessee Party(ies)"), whether wholesale or retail, whether for cash or on credit, and if on credit whether or not paid, and whether in 03agree/dwights concession lease/9/16/03 5 exchange for any other product, commodity, service, commercial paper or forbearance, and shall include, without limitation, the following: (a) All revenues, receipts, commissions or proceeds from on-line sales by Lessee Party(ies), and/or from all public telephones, vending, weighing and all other machines owned, operated, or leased to or by Lessee Party(ies) in, on, or from the Premises; (b) All revenues, receipts, commissions or proceeds from sales based on orders solicited or taken, in, on, or from the Premises for merchandise, food and beverages, or services to be delivered or rendered off, or from sources outside, the I Premises, including, without limitation, all orders taken in, on, or from the Premises although the orders may be filled elsewhere; (c) All revenues, receipts, commissions or proceeds from the renting of equipment of any kind in, on, or from the Premises; and (d) All revenues, receipts, commissions or proceeds generated from offsite but delivered through the Concession. (e) All revenues, receipts, commissions or proceeds made by Lessee Party(ies) or their employees or others acting on their behalf for the rendition of services of any kind whatsoever, made in, on, or from the Premises. (f) All other revenues, receipts, commissions or proceeds generated by, arising or derived whatsoever from the use of the Premises or derived whatsoever from any business conducted in, on, or from the Premises. For purposes of computing the Gross Sales figure on which to calculate the Rent, the amount of Gross Sales shall start over at zero dollars on January 1 of each year. If the Lease 03agree/dwights concession lease/9/16/03 6 commences on any date other than January 1, the Gross Sales calculation begins from such commencement date and runs through December 31 of such Lease commencement year. SECTION 13. GROSS SALES EXCLUSIONS Gross Sales shall not include the following items, and Lessee may deduct such items from Gross Sales to the extent they have been included therein or have been included in a prior computation of Gross Sales on which the Rent has been paid under this Lease to City: (a) Any sales, excise or other taxes otherwise includable in Gross Sales and which become part of the total price of merchandise, food and beverages, or services sold or rendered, or equipment rented, in, on, or from the Premises where Lessee must account for and remit the taxes to the government entity or entities which impose them, but only if such taxes are added to the total price and collected from customers; (b) Any transfer of trade inventory from the Premises to the manufacturer or supplier from whom it was obtained by Lessee; (c) Sales of Trade Fixtures (as defined in Section 51 below); (d) Sums and credits received in the settlement of claims for loss of or damage to trade inventory or Trade Fixtures; and (e) Any sales resulting in a cash or credit refund to a customer in the ordinary course of business. SECTION 14. BOOKS AND RECORDS Lessee shall keep true and accurate books and records showing all of its business transactions in separate records of account for the Concession in a manner acceptable to City, and City and/or its designated representatives shall have the right, at all reasonable times, to 03agree/dwights concession lease/9/16/03 7 inspect such books and records including, without limitation, State of California sales or use tax returns or other State return records, and. Lessee hereby agrees that all such records and instruments shall promptly be delivered and made available to City and/or its designated representatives within thirty (30) days of receiving written request therefor. Lessee shall furnish to City and/or its designated representatives copies of its quarterly California sales and use tax returns at the time each is filed with the State of California. The books and records shall show the total amount of Gross Sales made each calendar month in, on, or from the Premises and any exclusions listed in Section 13 above. All sales and charges shall be recorded by means of cash registers which display the amount of the transaction i certifying the amount recorded. The register shall be equipped with devices which log in daily sales totals and which shall record on tapes the transaction numbers and sales details. At the end of each day the tape shall record the total sales for that day. Lessee agrees to maintain on the Premises, or another location subject to the prior written approval of City, all records, books of account and cash register tapes, showing, or in any way pertaining to the Gross Sales made in, on, or from the Premises during such calendar month, including, without limitation, State of California sales or use tax returns or other State tax returns, for a period of five (5) years following the close of each calendar month. SECTION 15. STATEMENT OF GROSS SALES/AUDIT At the time specified in Section 10 of this Lease for the payment of the Rent, Lessee shall deliver to City a true and accurate statement signed by Lessee or by an authorized employee of Lessee showing the total Gross Sales and any exclusions listed in Section 13 above made during the preceding calendar month and the amount of the Rent then being paid calculated on such Gross Sales pursuant to this Lease. The acceptance by City of any monies paid to City by Lessee 03agree/dwights concession lease/9/16/03 8 as the Rent, as shown by any statement furnished by Lessee, shall not be construed as an admission of the accuracy of the statement, or of the sufficiency of the amount of the Rent payment, and City shall be entitled to review the adequacy of such payment as set forth herein. By the end of each January, Lessee shall deliver to City a year-end statement showing the total amount of Gross Sales made in, on, or from the Premises in each month of the preceding year, the total of any exclusions, the total Rent paid to City for each of those months, all with year-end totals. City may at any time within three (3) years after receiving the year-end statement, at its sole cost and expense, cause all records, books of account and cash register tapes for the year purportedly covered by the statement, to be audited by City or an accountant selectedl by City. Lessee shall, within thirty (30) days of receiving written notice of City's desire for such an audit, deliver and make available all such records, books of account and cash register tapes to City or its designated representative for City's use in the audit and/or for copying. If the audit discloses that Gross Sales were understated and/or exclusions overstated, Lessee shall immediately pay the additional Rent, together with a penalty thereon from the date it was due at the penalty rate set forth in Section 11 above. Furthermore, Lessee shall promptly on demand reimburse City for the full cost and expense of the audit should the audit disclose that the questioned year-end statement understated Gross Sales (including an overstatement of exclusions) or the Rent by any amount greater than Two Hundred Fifty Dollars ($250.00). City further reserves the right to examine and audit all such records, books of account and cash register tapes at any time during the three (3) year period following the expiration or termination of this Lease. In addition, City shall have the right to enter upon the Premises during business hours and with two (2) hours advance written, verbal or electronic notice to Lessee to perform any audit or inspection function with respect to this Lease. 03agree/dwights concession lease/9/16/03 9 Lessee, its bookkeeper and/or accountant shall respond to all questions and inquiries of City with respect to the books, records, statements and other documentation being examined, and shall promptly provide other further documentation as may be required by City. City is entitled to take statements by deposition under oath of Lessee, its officers, bookkeepers and/or accountants or any person who prepared the books, records, statements and other documentation required to be provided by Lessee under this Lease. SECTION 16. SECURITY DEPOSIT Upon execution hereof, Lessee shall pay and maintain at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, a security deposit with City in a sum of not less than Two Thousand Five Hundred Dollars ($2,500.00) to guarantee all of Lessee's obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, the repair and maintenance of the Premises as provided herein. Such deposit shall be in the form of a cash bond or an assignment of certificate of deposit (the "CD") or savings account to City, and shall be provided to the City Treasurer. The form of any such security deposit shall be approved by the City Attorney and the City Treasurer. No interest shall accrue on cash deposits to the benefit of Lessee, but interest shall accrue on a CD or savings account and shall be paid to Lessee under the terms of the CD or savings account. Lessee shall send a copy of each renewal of the CD to the City Treasurer to ensure that City has the records of each active deposit account. SECTION 17. USE OF COCA -COLA PRODUCTS Lessee shall comply with City's exclusivity agreement with the Coca-Cola Bottling Company of Southern California ("Coca-Cola") by doing the following: only Coca-Cola fountain and bottling products shall be bought and sold in, on, or from the Premises for the term 03agree/dwights concession lease/9/16/03 10 of the City's agreement with Coca-Cola. This includes all carbonated and non -carbonated, non- alcoholic beverages defined as soft drinks, juices, juice drinks, teas, isotonics, water and frozen beverages. Frozen beverages shall not include ice creams and frozen yogurts. Lessee's failure to adhere to the Coca-Cola exclusivity clause shall constitute a Default of this Lease as defined in Section 36 below. This exclusivity shall not apply to third -party rentals that bring their own drink products. SECTION 18. QUALITY OF SALES, RENTALS AND SERVICES Lessee, at its sole cost and expense, shall equip, operate, manage and maintain the Premises and Concession and shall keep the same equipped and maintained in a manner acceptable to City during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. It is the intent of City that the Concession's services be provided in a manner to meet the needs of the visiting public, and should City deem the Concession's hours of operation and/or food, merchandise, services or rentals inadequate to meet such needs, City may require Lessee to make such changes requested by City. Lessee shall not use or permit the Premises to be used, in whole or in part, during the entire term of this Lease or any renewals or extensions thereof of during any holdover period for any purpose other than as herein set forth, without the prior written consent of City. Except as permitted in advance in writing by City, all foods and beverages shall be sold in disposable paper or plastic containers. No pull -top cans or styrofoam containers are to be vended or dispensed from the Premises unless pre -approved in writing by City. Lessee, wherever feasible, shall eliminate the use of non -recyclable containers and plastics. City may from time to time review the items sold and containers or utensils used or dispensed by Lessee. City reserves the right to prohibit the sale or use of non -recyclable containers or plastics. 03agree/dwights concession lease/9/16/03 11 City in its sole discretion reserves the right to prohibit Lessee's sale, provision or rental of any item or service rendered or performed, which it deems objectionable or offensive, beyond the scope deemed necessary for proper service to the public, inappropriate for sale, provision or rental by the Concession, or of inferior quality. SECTION 19. INDEMNIFICATION, DEFENSE AND HOLD HARMLESS AGREEMENT Lessee hereby agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any I kind or nature) arising out of or in connection with (1) the use or occupancy of the Premises by Lessee, its officers, employees or agents, or (2) the death or injury of any person or the damage to property caused by a condition of the Premises, or (3) the death or injury of any person or the damage to property caused by any act or omission of Lessee, its officers, employees or agents, or (4) any failure by Lessee to keep the Premises in a safe condition, or (5) Lessee's (or Lessee's agents and/or sublessees, if any) performance of this Lease or its failure to comply with any of its obligations contained in this Lease by Lessee, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee shall hold all Trade Fixtures, personal property and trade inventory on the Premises at the sole risk of Lessee and save City harmless from any loss or damage thereto by any cause whatsoever, except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any 03agree/dwights concession lease/9/16/03 12 • 0 insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. SECTION 20. WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE Lessee acknowledges awareness of Section 3700 et seq. of the California Labor Code, which requires every employer to be insured against liability for workers' compensation. Lessee covenants that it shall comply with such provisions prior to the commencement of this Lease. Lessee shall obtain and furnish to City workers' compensation and employers' liability insurance in amounts not less than the State statutory limits. Lessee shall require all sublessees and i contractors to provide such workers' compensation and employers' liability insurance for all of the sublessees' and contractors' employees. Lessee shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and Lessee shall similarly require all sublessees and contractors to waive subrogation. SECTION 21. GENERAL PUBLIC LIABILITY INSURANCE In addition to the workers' compensation and employers' liability insurance and Lessee's covenant to defend, hold harmless and indemnify City, Lessee shall obtain and furnish to City, a policy of general public liability insurance, including motor vehicle coverage against any and all claims arising out of or in connection with the Premises. This policy shall indemnify Lessee, its officers, employees and agents, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Premises, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of One Million Dollars ($1,000,000.00) per occurrence. If coverage is provided under a form which includes a 03agree/dwights concession lease/9/16/03 13 0 s designated general aggregate limit, the aggregate limit must be no less than One Million Dollars ($1,000,000.00) for the Premises. This policy shall name City, its officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Lease shall be deemed excess coverage and that Lessee's insurance shall be primary. Under no circumstances shall said above -mentioned insurance contain a self -insured retention, or a "deductible" or any other similar form of limitation on the required coverage. SECTION 22. PROPERTY INSURANCE Lessee shall provide before commencement of this Lease and shall obtain and furnish to City, at Lessee's sole cost and expense, property and fire insurance with extended coverage endorsements thereon, by a company acceptable to City authorized to conduct insurance business in California, in an amount insuring for the full insurable value of all Improvements, Trade Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory in or on the Premises against damage or destruction by fire, theft or the elements. This policy shall contain a full replacement cost endorsement naming Lessee as the insured and shall not contain a coinsurance penalty provision. The policy shall also contain an endorsement naming City as an Additional Insured. The policy shall contain a special endorsement that such proceeds shall be used to repair, rebuild or replace any such Improvements, Trade Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory so damaged or destroyed; and if not so used, such proceeds (excluding any insurance proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee, and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City. The policy shall also contain a special endorsement that if the Premises are.so destroyed triggering the parties' ability 03agree/dwights concession lease/9/16/03 14 to terminate as set forth in Section 52 (Destruction) below, and either party elects to terminate the Lease, the entire amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City. The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as necessary to restore the Premises or for any such other purpose(s) as City sees fit. This policy shall also contain the following endorsements: (a) The insurer shall not cancel or reduce the insured's coverage without (30) i days prior written notice to City; (b) City shall not be responsible for premiums or assessments on the policy. A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with City prior to the execution of this Lease. At least thirty (30) days prior to the expiration or termination of any such policy, a signed and complete certificate of insurance showing that coverage has been renewed shall be filed with City. SECTION 23. INCREASE IN AMOUNT OF GENERAL PUBLIC LIABILITY AND PROPERTY INSURANCE Not more frequently than once every two (2) years, if, in the sole opinion of City, the amount and/or scope of general public liability insurance in Section 21 above and/or property insurance coverage in Section 22 above at that time is not adequate, Lessee shall increase the insurance coverage as reasonably required by City. 03agree/dwights concession lease/9/16/03 15 SECTION 24. CERTIFICATES OF INSURANCE; ADDITIONAL INSURED ENDORSEMENTS Prior to commencement of this Lease, Lessee shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease; these certificates shall: (a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in force; and (c) shall promise to provide that such policies shall not be canceled or modified without thirty (30) days' prior written notice of City; however ten (10) days' prior written notice in the event of cancellation for nonpayment of premium, which 10-day notice provision shall not apply to property insurance in Section 22 above. Lessee shall maintain the foregoing insurance coverages in force during the entire term of the Lease or any renewals or extensions thereof or during any holdover period. The requirement for carrying the foregoing insurance coverages shall not derogate from Lessee's defense, hold harmless and indemnification obligations as set forth in this Lease. City or its representatives shall at all times have the right to demand the original or a copy of any or all the policies of insurance. Lessee shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. SECTION 25. INSURANCE HAZARDS Lessee shall not commit or permit the commission of any acts on the Premises nor use or permit the use of the Premises in any manner that will increase the existing rates for, or cause the cancellation of any liability, property, or other insurance policy for the Premises or required by 03agree/dwights concession lease/9/16/03 16 this Lease. Lessee shall, at its sole cost and expense, comply with all requirements of any insurance carrier providing any insurance policy for the Premises or required by this Lease necessary for the continued maintenance of these policies at reasonable rates. SECTION 26. MAINTENANCE OF PREMISES City's maintenance responsibilities of the Premises shall be limited to maintaining all sewers and drain lines, roofs and attached public restrooms (if they exist). Except as set forth in the preceding sentence, Lessee agrees to maintain the Premises in good order and repair, at Lessee's sole cost and expense, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, pursuant to the City's maintenance standards. A copy of the quarterly evaluation summary sheet setting forth the City's maintenance checklist is attached as Exhibit "C", and incorporated herein by this reference. Except as provided above, Lessee, at its sole cost and expense, shall perform any maintenance and repairs including, without limitation, facility maintenance and landscape maintenance on the Premises. Lessee's obligation includes, without limitation, maintaining and operating the Premises and adjacent areas to a distance of not more than fifty (50) feet, in a clean, safe, wholesome and sanitary condition free of trash, garbage or obstructions of any kind and in compliance with any and all present and future laws, general rules or regulations of any governmental authority now, or at any time during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, in force, relating to sanitation or public health, safety or welfare, or for the protection of life, limb or property; and Lessee shall at all times faithfully obey and comply with all laws, rules and regulations applicable thereto. Lessee, at its sole cost and expense, shall remedy without delay any defective, dangerous or unsanitary condition(s) caused by Lessee or 03agree/dwights concession lease/9/16/03 17 anyone related thereto. Provided, however, that Lessee shall have no obligation to repair or maintain sewer lines or respond to sewer leaks. Lessee shall paint, stain or seal the Premises' exterior surfaces a minimum of every three (3) years, unless City determines in its sole discretion that such work shall be done on a more frequent basis. All exterior metal surfaces, except the roof, shall be painted with rust resistant paint no less than once every other year. Any and all graffiti on the Premises shall be removed by Lessee, at its sole cost and expense, within forty-eight (48) hours of Lessee receiving notice thereof or of Lessee becoming aware of such graffiti. In addition, with or without notice from City, Lessee shall, at its sole cost and expense, repair and/or replace any broken glass within forty-eight (48) hours of its becoming broken, regardless of cause, except by fault of City. Except as provided above for graffiti and broken glass, Lessee, at its sole cost and expense and with or without notice from City, shall repair and/or replace all damage or destruction to the Premises caused by act(s) of vandalism as soon as possible but in no event later than fourteen (14) days after the date such damage or destruction occurred. Lessee, at its sole cost and expense, shall repair and/or replace all other damage or destruction to the Premises, regardless of cause, except by fault of City. Lessee shall comply with all written notices served by City with regard to the care and maintenance of the Premises. Any written notice hereunder shall specify the work to be done and the period of time deemed to be reasonably necessary for completion of such work. Should Lessee fail to commence making the necessary repairs within seven (7) days after receiving such notice, or within twenty-four (24) hours of the glass becoming broken in the case of broken glass, or fail to diligently proceed to complete the necessary repairs within the period of time reasonably specified in the City's notice, or within forty-eight (48) hours of the glass becoming 03agree/dwights concession lease/9/16/03 18 broken in the case of broken glass, or within the forty-eight (48) hour time period for removing graffiti, or within fourteen (14) days of the date that the vandalism damage or destruction occurred, City shall proceed to cause the required work to be performed, and Lessee shall promptly reimburse City for the cost of labor and materials thereof and pay City a penalty on such costs at the penalty rate set forth in Section 11 above from the date the costs were incurred by City to the date they are reimbursed to City by Lessee. Lessee hereby, expressly waives the right to make repairs at the expense of City and the benefit, if any, of the provisions of Sections 1941 and 1942 of the California Civil Code relating thereto. SECTION 27. RENT CREDIT City in its sole discretion may decide to give Lessee rent credit if Lessee undertakes (1) any repair or maintenance obligation of City under this Lease, (2) any work City in its sole discretion deems necessary and appropriate or (3) any Lessee improvements. Prior to Lessee undertaking any such work, City must agree in writing to the amount of and procedures for the rent credit, the work to be done by Lessee and the cost of such work. SECTION 28. DAMAGE, DESTRUCTION OR NUISANCE Lessee shall not commit or permit the commission by others of any damage or destruction of, on, or to the Premises and/or Concession. Lessee shall not maintain, commit or permit the maintenance or commission of any nuisance as defined in Section 3479 and/or Section 3480 of the California Civil Code on the Premises; and Lessee shall not use or permit the use of the Premises for any unlawful purpose. 03agree/dwights concession lease/9/16/03 19 SECTION 29. TAXES This Lease may create a possessory interest in property, which is subject to taxation. In the event that such possessory interest is created, Lessee agrees to be subject to the payment of and to pay taxes levied on such interest, at its sole cost and expense. Lessee also agrees to pay, at its sole cost and expense, before they become delinquent all other lawful taxes, assessments or charges, which at any time may be levied by any governmental agency including, without limitation, the State, County, City or any tax or assessment levying body upon any interest in this Lease, or any possessory right which Lessee may have in or to the Premises, by reason of Lessee's use or occupancy thereof or otherwise, as well as all taxes, assessments, and charges on Trade Fixtures, personal property and trade inventory in, on, or about the Premises. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. Lessee shall comply with all laws, regulations and ordinances regarding the collection of taxes due a government agency. SECTION 30. PAYMENT OF OBLIGATIONS Lessee shall promptly pay, at its sole cost and expense, before they. become delinquent, any and all bills, debts, liabilities and obligations incurred by Lessee in connection with Lessee's occupation and use of the Premises and/or operation of the Concession. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. SECTION 31. UTILITIES AND SERVICES Excluding any attached public restrooms, if they exist, Lessee shall be responsible for the payment of all utility charges, including, without limitation, gas, electricity, water, telephone service, cable TV service, and the furnishing of all necessary refuse and garbage containers and the removal and disposal of all rubbish, refuse and garbage resulting from the operation of the 03agree/dwights concession lease/9/16/03 20 Premises and/or the Concession. All such rubbish, refuse and garbage removed shall be disposed of in accordance with applicable laws and local ordinances. All trash containers and/or trash bins shall be adequately screened and located to the satisfaction of City. For the purposes of this Section, sewage disposal shall be construed as a utility. All such charges shall be paid by Lessee directly to the provider of the service and shall be paid as they become due and payable. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. SECTION 32. BUSINESS LICENSE Lessee shall maintain a business license from City during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. SECTION 33. SIGNS, ADVERTISING AND APPROVAL OF NAME City shall have the right to approve in its sole discretion and at any time require Lessee to change or remove signs, names, placards, decorations or advertising placed on, or inscribed, painted or affixed upon the Premises. Should City approve of any sign, name, placard, decoration or advertising, Lessee shall maintain the same at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period in good appearance and repair. All signs, names, placards, decorations or advertising must comply with all requirements of any governmental authority with jurisdiction. SECTION 34. NO ASSIGNING, SUBLEASING OR ENCUMBERING (a) Prohibition of Assignment. The parties acknowledge that City is entering into the Lease in reliance upon the experience and abilities of Lessee and its principals. Consequently, Lessee shall not voluntarily assign, encumber or otherwise transfer its interest in the Lease or in the Premises, or sublease all or any part of the Premises, or allow any other person or entity (except Lessee's 03agree/dwights concession lease/9/16/03 21 authorized representatives) to occupy or use all or any part of the Premises without the prior written consent of City, which consent shall not be unreasonably withheld. Provided, however, that City's consent shall not relieve Lessee from any and all of its obligations, liabilities, duties or responsibilities under this Lease. Any assignment, encumbrance, occupation or use, sublease or other transfer without such consent shall be voidable and, at City's sole discretion, shall constitute a Default of this Lease. (b) Consent to Transfer. City's consent to any assignment, encumbrance, occupation or use, sublease or other transfer is subject to Lessee providing City with evidence satisfactory to City that the proposed, assignee, encumbrancer, occupier or user, sublessee or other transferee has suitable financial strength, experience and character for operation and control of the Premises and the Concession and that the use of the Premises by the proposed assignee, encumbrancer, occupier or user, sublessee or other transferee is consistent with that specified herein, and is commercially reasonable. Any proposed assignee, encumbrancer, occupier or user, sublessee or other transferee shall agree to abide by the terms and conditions of the Lease including, without limitation, all the obligations, liabilities, duties and responsibilities of Lessee, and other conditions imposed upon it pursuant to law. An approval by City to one assignment, encumbrance, occupation or use, sublease or other transfer shall not be deemed to be an approval to any other assignment, encumbrance, occupation or use, sublease or other transfer. (c) Voluntary assignment defined. Except as otherwise expressly provided herein, any dissolution, merger, consolidation or reorganization of Lessee, or the sale or 03agree/dwights concession lease/9/16/03 22 other transfer resulting in a transfer of a controlling percentage of the capital stock of Lessee (other than a transfer by will, devise, bequest, intestate succession, a transfer to or between the family members of Lessee, or a transfer to or between one or more trusts for the benefit of Lessee and/or Lessee's family members, where applicable) shall be deemed a voluntary assignment. (d) Exceptions. Notwithstanding the foregoing paragraphs or anything to the contrary contained herein, City's consent shall not be required for an assignment or subleasing to an Affiliate, Subsidiary or Successor of .Lessee (for purposes hereof, an "Affiliate," a "Subsidiary" and a "Successor" of Lessee are defined as follows: (a) an "Affiliate" is any corporation which directly or indirectly controls or is controlled or is under common control with Lessee (for this purpose; "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities or by contract or otherwise), (b) a "Subsidiary" shall mean any corporation or partnership not less than twenty- five percent (25%) of whose outstanding stock shall, at the time, be owned directly or indirectly by Lessee and which is at least as creditworthy as Lessee, and (c) a "Successor" shall mean a corporation or partnership in which or with which Lessee is merged or consolidated, in accordance with applicable statutory provisions for merger or consolidation of corporations, or a corporation or partnership acquiring a substantial portion of the property and assets of Lessee. 03agree/dwights concession lease/9/16/03 23 SECTION 35. TERMS BINDING ON SUCCESSORS All the terms, covenants and conditions of this Lease shall inure to the benefit of and be binding upon the parties and their successors, including, without limitation, their assignees, encumbrancers, occupiers or users, sublessees or other transferees. The provisions of this Section shall not be deemed as a (1) waiver of any of the prohibitions and conditions against assignments, encumbrances, occupations or uses, subleases or other transfers hereinbefore set forth, or (2) City's consent thereto. If more than one lessee is a party to this Lease, the obligations of the lessees shall be joint and several. Even if City's consent is not required, Lessee shall immediately provide City with written notice of any, assignment, encumbrance, occupation or use, sublease or other transfer. SECTION 36. DEFAULT The occurrence of any one or more of the following events shall constitute a material default and breach ("Default") of this Lease by Lessee: (a) Lessee's failure to make any payment of the Rent or other payment required to be made by Lessee at the time required for payment under this Lease. (b) Lessee's failure to obtain or maintain the insurances and/or the security deposit as required under this Lease. (c) Lessee's vacating or abandonment of the Premises during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. Closure of the Concession for more than a combined total of one hundred eighty (180) days in a calendar year, minus any days of closure of the Concession caused by City, shall be deemed an abandonment of the Premises. (d) Lessee's violation of Section 19 (Indemnification, Defense and Hold Harmless Agreement), Section 34 (No Assigning, Subleasing or Encumbering), Section 47 03agree/dwights concession lease/9/16/03 24 0 • (Hazardous Substances), Section 48 (Nondiscrimination), Section 49 (Sale of Alcoholic Beverages and Entertainment Prohibited), Section 62 (Conflict of Interest) or Section 64 (Compliance with Laws). (e) The insolvency of Lessee as evidenced by a receiver being appointed to take possession of all or substantially all of Lessee's assets located at or on the Premises or of Lessee's interest. in this Lease, or the making by Lessee of a general arrangement or assignment for the benefit of creditors, or Lessee's filing a petition in bankruptcy, whether voluntary or involuntary, or the attachment, execution or the judicial seizure of substantially all of Lessee's assets located at or i on the Premises or of Lessee's interest in the Lease. (f) Lessee's failure to observe or perform any other term, covenant, obligation, duty, responsibility or condition of this Lease to be observed or performed by Lessee when such failure shall continue for a period of thirty (30) days after City's giving written notice to Lessee, or such earlier period if specifically set forth in this Lease; however, if the nature of such failure is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in Default if Lessee notifies City of the length of the additional time required to cure and receives City's written approval of the additional time required, which approval will not be unreasonably withheld, and commences such cure within such thirty (30) day period and diligently proceeds with such cure to completion during such additional time period approved by City. 03agree/dwights concession lease/9/16/03 25 • 0 SECTION 37. REMEDIES (a) Cumulative Nature of Remedies. In the event of any Default by Lessee, City shall have the remedies described in this Section in addition to all other rights and remedies provided by law or equity, to which City may resort cumulatively or in the alternative: (1) Reentry without Termination. City may at City's sole discretion reenter the Premises, and, without terminating the Lease, at any time and from time to time relet the Premises or any part or parts of them for the account and in the name of Lessee or otherwise. Any reletting may be for the remainder of the term or for a longer or shorter period. City may in City's sole discretion eject all persons or eject some and not others or eject none. In addition, City may in its sole discretion remove some or all of the Trade Fixtures, personal property and trade inventory from the Premises. City may store such removed Trade Fixtures, personal property and trade inventory in a public warehouse or other location at the sole cost, expense and risk of Lessee, and for the account of and in the name of Lessee. City shall apply all rents from reletting as follows: first, to the payment of reasonable expenses (including brokers' commissions) paid or incurred by or on behalf of City in recovering possession, placing the Premises in good condition, and preparing or altering the Premises for reletting; second, to the reasonable expense of securing new subtenants; third, to the fulfillment of Lessee's covenants to the end of the term. City may execute any leases or subleases made under this provision either in City's name or 03agree/dwights concession lease/9/16/03 26 in Lessee's name and City shall be entitled to all rents from the use, operation or occupancy of the Premises. Lessee shall nevertheless pay to City on the dates specified in this Lease the equivalent of all sums required of Lessee under this Lease, plus City's expenses, less the proceeds of any reletting or attornment. (2) Termination. In the event of a Default by Lessee, City may at City's sole discretion terminate this Lease by giving Lessee written notice of termination. In the event City terminates this Lease, City may recover possession of the Premises (which Lessee shall immediately surrender and vacate upon demand) and remove all persons therefrom, and Lessee shall comply with, without limitation, Sections 56 and 57 below. City also shall be entitled to recover as damages all of the following: (A) The worth at the time of the award of any unpaid Rent or other charges which have been earned at the time of termination; (B) The worth at the time of the award of the amount by which the unpaid Rent (each month's Rent would be calculated as the average Rent for that same month in the preceding years, or if Lessee did own/operate the Concession in the preceding years, then each month's Rent would be calculated as the average of all months Lessee owned/operated the Concession) and other charges which would have been earned after termination until the time of the award exceeds the amount of the loss of such rental and other charges that Lessee proves could have been reasonably avoided; 03agree/dwights concession lease/9/16/03 27 (C) The worth at the time of the award of the amount by which the unpaid Rent (each month's Rent would be calculated as the average Rent for that same month in the preceding years, or if Lessee did not own/operate the Concession in the preceding years, then each month's Rent would be calculated as the average of all months Lessee owned/operated the Concession) and other charges for the balance of the term after the time of the award exceeds the amount of the loss of such rental and other charges that Lessee proves could have been reasonably avoided; A (D) Any other amount necessary to compensate City for the detriment proximately caused by Lessee's failure to perform its obligations, liabilities, duties or responsibilities under this Lease; and (E) At City's sole discretion, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law. As used in Sections 37(a)(2)(A) and (B) above, the "worth at the time of the award" shall be computed by allowing interest at the rate of twelve percent (12%) per annum. As used in Section 37(a)(2)(C) above, the "worth at the time of the award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%). The amount recoverable by City pursuant to Section 37(a)(2)(D) above shall include, without limitation, any costs or expenses incurred by City in maintaining or preserving the Premises after such Default. 03agree/dwights concession lease/9/16/03 28 (3) Use of Personal Property. City may at City's sole discretion use the Trade Fixtures, personnel property and/or trade inventory located on, about or appurtenant to the Premises without compensation and without liability for use or damage, or store them in a public warehouse or other location at the sole cost, expense and risk of Lessee, and for the account of and in the name of Lessee. (b) Election of Remedy. The election of one remedy fdr any one item.shall not foreclose an election of any other remedy for another item or for the same item at a later time. (c) City's Right to Cure Lessee's Default. Upon continuance of any Default, City may in its sole discretion, but is not obligated to, cure such Default at Lessee's sole cost and expense. If City at any time, by reason of such Default by Lessee, pays any sum or does any act, the sum paid by City plus the reasonable cost of performing such act, together with a penalty thereon at the penalty rate set forth in Section 11 above from the date the costs were incurred or the act performed by City to the date they are reimbursed to City by Lessee, shall be due as additional rent not later than five (5) days after service of a written demand therefor on Lessee, including reasonably detailed documentation of the amount owed. No such payment or act shall constitute a waiver of Default or of any remedy for Default or render City liable for any loss or damage resulting from any such act. (d) Waiver of Rights. Lessee hereby waives any right of redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 or 1179, 03agree/dwights concession lease/9/16/03 29 or under any other present or future law, in the event Lessee is evicted or City takes possession of the Premises by reason of any Default by Lessee hereunder. (e) Other Rights of City. No act of City, including, without limitation, City's entry on the Premises, efforts to relet the Premises, or maintenance of the Premises, shall be construed as an election to terminate this Lease unless a written notice of such intention is given to Lessee by City or unless the termination thereof is decreed by a court of competent jurisdiction. Notwithstanding if City elects to continue the Lease in full force and effect after a Default by Lessee and to relet the Premises, City may at any time after such reletting elect to terminate this Lease for any such Default. SECTION 38. CUMULATIVE REMEDIES The remedies given to City in this Lease shall not be exclusive but shalt be cumulative and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this Lease. City shall have the right to exercise any other right or remedy which City may have at law or in equity including, without limitation, City's rights under the unlawful detainer laws. SECTION 39. WAIVER OF DEFAULT The waiver by City of any Default by Lessee of any of the provisions of this Lease shall not constitute a continuing waiver or a waiver of any subsequent Default by Lessee either of the same or another provision of this Lease. SECTION 40. CITY'S DEFAULTS/LESSEE'S REMEDY In the event City fails to perform any material obligation of City under the Lease within ninety (90) days after receiving written notice from Lessee specifying the nature of such default, or, if the nature of City's obligation is such that more than ninety (90) days are required for its 03agree/dwights concession lease/9/16/03 30 performance, if City fails to commence such performance within such ninety (90) day period and thereafter diligently prosecute the same to completion, then City shall be in default of this obligation. If City's default materially interferes with Lessee's use of the Premises for its intended purpose, Lessee shall have the option to terminate the Lease by giving City at least sixty (60) days' written notice of its intent to terminate. In such a situation, Lessee must still comply with all of its obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, paying any Rent due up to the time of termination and surrendering the Premises pursuant to Sections 56 and 57 below. This remedy of termination is Lessee's sole and exclusive remedy for a default by City. SECTION 41. CONSENT When City's consent/approval is required under this Lease, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. SECTION 42. HOLDOVER Should Lessee hold over and continue in possession of the Premises after expiration or termination of this Lease, with or without the express prior written consent of City, Lessee's continued occupancy .of the Premises shall constitute a month -to -month tenancy, subject to all the terms and conditions of this Lease, at a monthly rent of one hundred ten percent (110%) of the previous calendar year's annual Rent divided by twelve (12) (or the average monthly Rent for all months Lessee owned/operated the Concession if Lessee has owned/operated the Concession for less than one (1) year) or that month's actual Rent, whichever is greater, and shall not constitute a renewal or extension of the Lease term. 03agree/dwights concession lease/9/16/03 31 SECTION 43. WAIVER OF CLAIMS Lessee hereby waives any claim against City, its officers, elected or appointed officials, employees, agents or volunteers for damage or loss caused by any suit or proceeding directly or indirectly attacking the validity of this Lease, or any part thereof, or caused by any judgment or award in any suit or proceeding declaring this Lease null, void or voidable, or delaying the Lease or any part thereof from being carried out. SECTION 44. INSPECTION OF PREMISES Upon at least twenty-four (24) hours advance written, verbal or electronic notice given by City to Lessee, Lessee shall permit City or City's agents, representatives or employees to enter the Premises at all reasonable times for the purpose of inspecting, investigating and surveying the 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 City's interest in the Premises or to perform City's duties under this Lease. City also shall have the right in its sole discretion to do any and all work of any nature necessary for the preservation, maintenance and operation of property owned, controlled or occupied by City. Lessee shall be given reasonable notice when such work becomes necessary, and Lessee shall adjust the operation of the Concession in such a manner that City may proceed expeditiously. SECTION 45. CITY'S RIGHT TO LEASE BUYOUT City shall have the right at any time during the entire term of this Lease or any renewals or extensions thereof to buyout the remaining years of the Lease and Lessee's interest in this Lease based upon the following buyout formula: Average of the most recent two (2) years (preceding the date of the notice of buyout) annual Gross Sales under this Lease or a prior lease multiplied 03agree/dwights concession lease/9/16/03 32 0 0 by a twelve and one-half percent (12.501o) profit margin multiplied by the number of years remaining on the Lease discounted by twelve and one half percent (12.5%) to present value. For example: The annual Gross Sales for the most recent two (2) years of the Concession are $335,000.00 and $350,000.00. If City gives Lessee notice of its buyout intention in September, the preceding two (2) years would be the preceding twenty-four (24) months ending in August. There are three (3) years remaining in the Lease. The average of the Gross Sales of the most recent two (2) years is $342,500.00 ($335,000.00 + $350,000.00/2). The profit margin is 12.5% of the most recent two (2) year average which is $42,812.50 ($342,500.00 x 0.125). The profit margin is then discounted at the rate of 12.5% to present value over the. remaining years of the Lease: Year 1: $42,812.50 / 1.125 = $38,055.56 Year 2: $42,812.50 / 1.125 / 1.125 = $33,827.16 Year 3: $42,812.50 / 1.125 / 1.125. / 1.125 = $30,068.59 All of the discounted cash flows for the remaining years of the Lease are totaled and the result is the buyout price of the Lease. In this case, the City's buyout price is $101,951.31. If Lessee has owned/operated the Concession for less than two (2) years, the City's buyout price will be the greater of (1) the amount calculated under the Gross Sales formula above or (2) all reasonable and provable start-up costs, which start-up costs will be determined 03agree/dwights concession lease/9/16/03 33 0 0 by City in its sole discretion. The annual Gross Sales figure on which to calculate the buyout amount shall be calculated as follows: The average monthly Gross Sales for all months up to twenty-three (23) months converted into an annual Gross Sales figure. For example, if City decides to buyout the Lease of a new Lessee who has owned/operated the Concession for fifteen (15) months, with an average monthly Gross Sales figure of Five Thousand Dollars ($5,000.00), the annual Gross Sales figure for the option to buyout would be Sixty Thousand Dollars ($60,000.00). For purposes of this calculation, a Lessee shall not be considered a new lessee if the Concession was previously owned/operated by a lessee, whose assignment, encumbrance, occupation or use, sublease or other transfer to Lessee did not require City approval in Section 34 above. At City's sole option, City shall have the right, but not the obligation, to purchase any or all of Lessee's Trade Fixtures (defined in Section 51 below), based on the appraised fair value market of the Trade Fixtures. If City desires to purchase any or all of Lessee's Trade Fixtures, City shall select an appraiser to provide an appraisal of such Trade Fixtures. If Lessee disagrees with City's appraisal, Lessee, at its sole cost and expense, shall select another appraiser to provide an appraisal. If City disagrees with Lessee's appraisal, City shall select another appraiser to perform an appraisal. In such case, the parties agree that the price for the Trade Fixtures will be the average of these three (3) appraisals. All appraisers must be members in good standing in the American Society of Appraisers. Notwithstanding the foregoing, at any time, City may elect not to purchase any or all of Lessee's Trade Fixtures. 03agree/dwights concession lease/9/16/03 34 Upon City's request, Lessee shall provide City with proof of lien free, good and merchantable title to any such Trade Fixtures City desires to purchase. Lessee shall protect, defend, indemnify, and hold harmless City, its officers, elected and appointed officials, employees, agents and volunteers from and against any and all liens, claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with Lessee's fraud, omission or negligence regarding any purchase of Lessee's Trade Fixtures by City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability i regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. Lessee acknowledges and agrees that this Lease buyout option of City has been negotiated at arms -length and does not constitute nor does Lessee construe this to be an act of eminent domain or inverse condemnation. In the event City exercises this buyout option, Lessee waives any and all claims of loss of business goodwill and relocation rights or benefits. Lessee also shall immediately surrender the Premises as set forth herein and comply with, without limitation, Sections 56 and 57 below. SECTION 46. PHOTOGRAPHY Lessee acknowledges and agrees that City may grant permits to third parties engaged in the production of still and motion pictures and related activities to take photographs or videos of or on the Premises when such permission shall not interfere with the primary business of Lessee, all without providing Lessee with notice or requiring consent by Lessee. 03agree/dwights concession lease/9/16/03 35 SECTION 47. HAZARDOUS SUBSTANCES Lessee represents and warrants that its use or occupation of the Premises shall not generate any Hazardous Substance (as defined below in this Section), and it shall not store or dispose on the Premises nor transport to or over the Premises any Hazardous Substance during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. The foregoing restrictions shall not be deemed to restrict or prohibit the use by Lessee of ordinary cleaning products as customarily used in Lessee's ordinary course of business at the Concession, provided that Lessee complies with all provisions of law as to the use, storage and disposal of such products. Lessee further agrees to clean up and remediate any such Hazardous Substance on the Premises, and agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with any such Hazardous Substance and any damage, loss, or expense or liability resulting from any such Hazardous Substance including, without limitation, all attorney's fees, costs and penalties incurred as a result thereof except any release caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. "Hazardous substance" shall be interpreted broadly to mean any substance or material defined or designated as a hazardous or toxic waste, hazardous or toxic material, hazardous or toxic or radioactive substance, or other similar term, by any Federal, State or local 03agree/dwights concession lease/9/16/03 36 environmental law, regulation or rule presently in effect or promulgated in the future, as such law, regulation or rule may be amended from time to time; and it shall be interpreted to include, without limitation, any substance which after release into the environment will or may reasonably be anticipated to cause sickness, death or disease. SECTION 48. NONDISCRIMINATION Lessee and its employees shall not discriminate because of race, religion, color, ancestry, sex, age, national origin or physical handicap against any person by refusing to furnish such person any accommodation, facility, rental, service or privilege offered to or enjoyed by the general public. Nor shall Lessee or its employees publicize the accommodation, facilities, rentals, services or privileges in any manner that would directly or inferentially reflect upon or question the acceptability of the patronage of any person because of race, religion, color, ancestry, sex, age, national origin or physical handicap. In the performance of this Lease, Lessee shall not discriminate against any employee or applicant for employment, because of race, religion, color, ancestry, sex, age, national origin or physical handicap. Lessee shall take affirmative action to ensure that applicants are employed and that employees are.treated during employment, without regard to their race, religion, color, ancestry, sex, age, national origin or physical handicap. Such action shall include, without limitation, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including, without limitation, apprenticeship. Lessee shall post in conspicuous places, available to all employees and applicants for employment, notices setting forth the provisions of this Section. 03agree/dwights concession lease/9/16/03 37 u • Lessee shall permit access to its records of employment, employment advertisements, application forms, and other pertinent data and records by City, the State Fair Employment Practices Commission or any other agency with jurisdiction over these matters, for the purpose of investigation to ascertain compliance with this Section. City may determine a violation of this Section to have occurred upon receipt of a final judgment having that effect from a court in an action to which Lessee was a party, or upon receipt of a written notice from the State Fair Employment Practices Commission or other government agency with jurisdiction over these matters that it has investigated and determined that Lessee has.violated the Fair Employment Practices Act or other applicable discrimination i law and has issued an order which has become final, or obtained an injunction. In the event of violation of this Section, City shall have the right to terminate this Lease, and any loss of revenue sustained by City by reason thereof shall be borne and paid for by Lessee, at its sole cost and expense. SECTION 49. SALE OF ALCOHOLIC BEVERAGES AND ENTERTAINMENT PROHIBITED Notwithstanding anything to the contrary, the sale or provision of alcoholic beverages and/or live entertainment in, on, or from the Premises is expressly forbidden, unless expressly permitted in writing by City in advance. For any proposed sale or provision of alcoholic beverages, Lessee must first obtain written City approval prior to submitting any request for approval to the Alcohol Beverage Commission. SECTION 50. LIENS Lessee shall keep the Premises free and clear from any and all liens, including, without limitation, mechanics' or materialmens' liens, claims and demands for work performed, 03agree/dwights concession lease/9/16/03 38 materials furnished, or operations conducted on or about the Premises or by reason of any use or occupancy by Lessee, or any person claiming under Lessee. When applicable, Lessee shall cause a notice of nonresponsibility to be posted and recorded pursuant to California Civil Code Section 3094. SECTION 51. INSTALLATION AND REMOVAL OF TRADE FIXTURES Lessee shall have the right during the entire term - of this Lease or any renewals or extensions thereof, at Lessee's sole cost and expense, to install or affix in, to, or on the Premises any machinery, equipment and other objects (the "Trade Fixtures"), for use in Lessee's trade or business as Lessee may deem advisable. Any and all such Trade Fixtures that can be removed without structural damage to the Premises shall, subject to Section 57 below, remain the property of Lessee and may be removed by Lessee at any time prior to the expiration or termination of this Lease, provided Lessee repairs any damage caused by the removal. Upon execution of this Lease and every anniversary, Lessee shall provide City with a list of all Trade Fixtures on the Premises. SECTION 52. DESTRUCTION Should the Premises be partially destroyed, this Lease shall continue in full force and effect, and Lessee, at Lessee's sole cost and expense, shall complete the work of repairing and restoring the Premises to their prior condition providing such work can be accomplished under all applicable governmental laws and regulations within one hundred eighty (180) days. Should the Premises be so far destroyed that in City's reasonable judgment they cannot be repaired or restored to their former condition within one hundred eighty (180) days, City shall give Lessee notice of such determination in writing and each party may, in that party's sole discretion: 03agree/dwights concession lease/9/16/03 39 (a) Continue this Lease in full force and effect in which case Lessee shall repair and restore, at Lessee's sole cost and expense, the Premises to their former condition; IOD (b) Terminate this Lease by giving the other party thirty (30) days' written notice of such termination within sixty (60) days after the date that City gives Lessee notice that the Premises cannot, be repaired or restored to their former condition within one hundred eighty (180) days. In the event that either party elects to terminate this Lease, the entire amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent that the insurance proceeds specifically cover those items) shall be paid to City. The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as necessary to restore the Premises or for any other such purpose(s) as City sees fit. In addition, if Lessee elects to terminate the Lease, Lessee must still comply with all of its obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, paying any Rent due up to the time of termination and surrendering the Premises, pursuant to Sections 56 and 57 below. In the event of the damage or destruction of Improvements, Trade Fixtures and/or personal property located on the Premises not giving rise to a termination of this Lease, Lessee shall, at its sole cost and expense, replace and repair the same as soon as reasonably possible to permit the prompt continuation of Lessee's business at the Premises. 03agree/dwights concession lease/9/16/03 40 SECTION 53. NO ABATEMENT OF RENT DURING REPAIR WORK The Rent shall not be abated for the time Lessee is prevented from using the whole or a portion of the Premises. In addition, Lessee shall not be excused from the payment of taxes, insurance or any other obligations for the time Lessee is prevented from using the whole or a portion of the Premises. SECTION 54. EMINENT DOMAIN If, during the term of this Lease or any renewals or extensions thereof or during any holdover period, City's real property (whether held by City in fee simple, an easement interest or otherwise) and/or the Premises is taken in eminent domain, the entire award (that is, all forms) of I compensation, other than as provided herein, shall belong to and be paid to City. In the event of condemnation, Lessee shall be entitled to an award of only the following forms of compensation, if any, from the condemning authority: compensation for loss of business goodwill; compensation for the value of any of Lessee's Trade Fixtures; compensation for the value of any of Lessee's personal property; compensation for the value of any of Lessee's trade inventory; and compensation for relocation benefits as authorized by law. All other forms of compensation, such as, for example, but not by way of limitation, any bonus value of Lessee's interest in this Lease, shall belong to and be paid to City. In the event of condemnation, unless Lessee is allowed by the condemning authority to continue its operations on the Premises, the Lease shall terminate on the earliest of the following dates: the date the condemning authority obtains a prejudgment order for possession; the date title to the Premises vests in the condemning authority; or the date when Lessee is required by the condemning authority to cease its operations. 03agree/dwights concession lease/9/16/03 41 SECTION 55. RELOCATION AND ASSISTANCE, BUSINESS GOODWILL AND LEASEHOLD BONUS VALUE Upon expiration or termination of this Lease for any reason, including, without limitation, if City exercises its Lease buyout option, but excluding eminent domain, Lessee shall not be entitled to any relocation rights or benefits, business goodwill or bonus value attributable to this Lease, and Lessee expressly waives any claim to the same. SECTION 56. QUITCLAIM DEED Upon expiration or termination of this Lease as provided for herein, including, without limitation, in the event City exercises its Lease buyout option, Lessee shall execute and deliver to City within thirty (30) days thereof, a good and sufficient quitclaim deed to the rights and interests of Lessee in the Premises and the Lease. Should Lessee fail or refuse to deliver to City this quitclaim deed, City may record in the Orange County Recorder's Office a written notice reciting the failure of Lessee to execute and deliver this quitclaim deed. The date of recordation of this notice by City shall be conclusive evidence against Lessee and all persons claiming under Lessee of the expiration or termination of this Lease and any rights or interests of Lessee in the Premises and/or the Lease. Lessee also agrees to execute, acknowledge, and deliver to City any other instrument requested by City as necessary to perfect City's right, title and interest to the Premises. SECTION 57. RESTORATION AND SURRENDER OF PREMISES/TITLE TO IMPROVEMENTS On expiration or termination of this Lease, including, without limitation, in the event City exercises its Lease buyout option, Lessee shall, without compensation to Lessee, promptly surrender and deliver the Premises to City in as good condition as such were at the 03agree/dwights concession lease/9/16/03 42 commencement date of this Lease, reasonable wear and tear excepted. Lessee also shall, without compensation to Lessee, surrender all Improvements to City in good condition and repair, ordinary wear and tear excepted, free and clear of all liens and encumbrances. Lessee also shall remove all Trade Fixtures, personal property and trade inventory. City may in its sole discretion accept all or any portion of the Premises, as then improved with Improvements and no sum whatsoever shall be paid to Lessee or any other person; or City may require Lessee to remove all or any portion of such Improvements, at Lessee's own risk and cost and expense; or City may itself remove or have removed all or any portion of such Improvements, at Lessee's own risk and cost and expense. If required by City to do so, in removing any such Improvements, Lessee shall restore the Premises as nearly as possible to the conditions existing prior to their installation or construction. All such removal and restoration shall be to the satisfaction of City and shall be completed within thirty (30) days of the expiration or termination of this Lease; provided, however, that Lessee shall be considered a holdover tenant (pursuant to Section 42 above) after expiration or termination of the Lease until the time Lessee completes this removal and restoration work, including, without limitation, the removal of any Trade Fixtures, personal property and trade inventory left on the Premises. In addition, any Trade Fixtures, personal property or trade inventory left on the Premises after the expiration of this 30-day period, regardless of cause, shall be deemed abandoned by Lessee. In City's sole discretion, it may choose to do one or more of the following: (1) take any or all of such Trade Fixtures, personal property and trade inventory as City property; (2) store any or all of such Trade Fixtures, personal property and trade inventory in a public warehouse or other location at the sole cost, expense and risk of Lessee, and for the account and in the name of Lessee; or (3) dispose of any or all of such Trade Fixtures, personal property and trade inventory without any liability to 03agree/dwights concession lease/9/16/03 43 Lessee. In addition, Lessee's indemnification, hold harmless and defense obligations set forth in this Lease shall apply to such Trade Fixtures, personal property and/or trade inventory, and to City's actions with respect thereto. SECTION 58. FORCE MAJEURE - UNAVOIDABLE DELAYS Should the performance of any act required by this Lease to be performed by either City 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 shall be extended for a period equivalent to the period of delay and performance of the act during the period of delay shall be excused. Provided, however, that nothing contained in this Section shall excuse the prompt payment of the Rent or other consideration by Lessee as required by this Lease or the performance of any act rendered difficult solely because of the financial condition of the party, City or Lessee, required to perform the act. SECTION 59. CITY'S OPTION TO CLOSE THE PREMISES City may close the Premises without liability and without advance notice to Lessee therefor at any time as City in its sole discretion deems necessary for the protection of life, limb or property, or for public health, safety or welfare purposes, or upon reasonable notice to effect any repair, remodeling or rebuilding deemed necessary by City in its sole discretion. The length of time of any closing of the Premises by City longer than two (2) weeks during a period when the Concession would otherwise be open shall extend the term of the Lease by the same amount of time. If this occurs, Lessee and City shall memorialize this extension in writing. 03agree/dwights concession lease/9/16/03 44 SECTION 60. DELIVERIES OF SUPPLIES City may establish the days and times deliveries of supplies may be made and advise Lessee in writing thereof. SECTION 61. EMPLOYEE PARKING City shall establish the days, times and locations where Lessee and Lessee's employees may park, and the number of automobiles, trucks, and other motorized and non -motorized vehicles that Lessee and Lessee's employees may park, and advise Lessee in writing thereof. SECTION 62. CONFLICT OF INTEREST Lessee warrants and covenants that no official or employee of City, nor any :business entity in which an official or employee of City is interested, (1) has been employed or retained by Lessee to solicit or aid in the procuring of this Lease; or (2) shall be employed by Lessee in the performance of this Lease without the immediate written divulgence of such fact to City. In the event City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City, Lessee, upon request of City, shall terminate such employment immediately. For breaches or violation of this Section, City shall have the right both to terminate this Lease without liability and, in its discretion, recover the full amount of any such compensation paid to such official, employee or business entity. No official or employee of City shall have any financial interest in this Lease in violation of the applicable provisions of the California Government Code. SECTION 63. NOTICE Unless specifically providing for verbal or electronic notice, all notices, certificates, or other communications required to be given hereunder shall be in writing and made in the following manner, and shall be sufficiently given and deemed received when (a) personally delivered; or (b) 03agree/dwights concession lease/9/16/03 45 three (3) business days after being sent via United States certified mail — return receipt requested; or (c) one (1) business day after being sent by reputable overnight courier, in each case to the addresses specified below; provided that City and Lessee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent: CITY: City of Huntington Beach ATTN: Director of Community Services 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 LESSEE: Dwight's & Jack's, Incorporated c/o Laurie Knight 944 11 th Street Huntington Beach, CA 92648 SECTION 64. COMPLIANCE WITH LAWS Lessee, at its sole cost and expense, shall comply with all statutes, ordinances, regulations and requirements of all governmental entit ies, including, without limitation, Federal, State, county or municipal, relating to Lessee's use and occupancy of the Premises and/or operation of the Concession whether such statutes, ordinances, regulations and requirements be now in force or hereinafter enacted. This Lease is expressly subject to the laws, regulations and policies of City. Lessee shall deliver to City a copy of any notice from any governmental entity received by Lessee regarding any alleged violation of law regarding the Lease, Premises or the Concession or from any person allegedly entitled to give notice under any conditions, covenants, or restrictions binding or affecting the Premises. 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 statute, ordinance, regulation or requirement shall be conclusive as between City and Lessee and shall be grounds for termination of this Lease by City. 03agree/dwights concession lease/9/16/03 46 SECTION 65. INTERPRETATION OF THIS LEASE The language of 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 any of the parties. If any provision of this Lease is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Lease. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Lease, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any I act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Lease which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. SECTION 66. SURVIVAL Terms and conditions of this Lease, which by their sense and context survive the expiration or termination of this Lease, shall so survive. SECTION 67. MODIFICATION No waiver or modification of any language in this Lease shall be valid unless in writing and duly executed by both parties. SECTION 68. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Lease are merely descriptive and are included solely 03agree/dwights concession lease/9/16/03 47 for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the 17, parties or affect the construction or interpretation of any provision of this Lease. SECTION 69. BROKERS Each party warrants to and for the benefit of the other that it has had no dealings with any real estate broker or other agent (attorneys excepted) in connection with the negotiation or making of this Lease. SECTION 70. INDEPENDENT CONTRACTOR Lessee is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of City. Lessee shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for Lessee and its officers, agents and employees and all business licenses, if any, in connection with the Lease and/or any services to be performed hereunder. SECTION 71. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Lease or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non -prevailing party. SECTION 72. LEGAL SERVICES SUBCONTRACTING PROHIBITED Lessee and City agree that City is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. Lessee understands that pursuant to Huntington Beach City Charter 03agree/dwights concession lease/9/16/03 48 Section 309, the City Attorney is the exclusive legal counsel for City; and City shall not be liable for payment of any legal services expenses incurred by Lessee. SECTION 73. GOVERNING LAW This Lease shall be governed and construed in accordance with the laws `of the State of California. SECTION 74. DUPLICATE ORIGINAL The original of this Lease and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed.shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who signed it. SECTION•75. - ENTIRETY The parties acknowledge and agree that they are entering into this Lease freely and voluntarily following extensive arm's length negotiations, and that each has had the opportunity to consult with legal counsel prior to executing this Lease. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party, or anyone acting on that party's behalf, which are not embodied in this Lease, and that that party has not executed this Lease in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Lease. The Lease, and,,the attached exhibits., contain the entire agreement between the parties respecting the subject matter of this Lease, the Premises, the leasing of the Premises to Lessee, or the lease term created under this Lease and supercede all prior understandings and agreements, whether oral or in writing between the parties respecting the subject matter hereof. [SIGNATURES ON NEXT PAGE] 03agree/dwights concession lease/9/17/03 49 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized offices the day, month and year first above written. DWIGHT'S & JACK'S, INCORPORATED, By: J DA ID LE CLAPP, PRESIDE print name ITS: (circle one) Chairman/President/Vice President AND By: Akt� /)tu� G CRE AR REASURER print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary - Treasurer CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California &W�/ Mayor ATTEST: ?A24doLvei0 03 City Clerk APPROVED AS TO FORM:. City Attorney INITIATED AND APPROVED: C):A� 6 a��6 DiZt / of Community Serv' es APPROV OZJ� Director o dministrative ervices REVIEWED AND APPROVED: y Administrator 03agree/dwights concession lease/9/17/03 50 0 ATTACHMENT A 100 ...0 �iUii 21 AKA 201 Pacific Coast Highway, Huntington Beach, CA 82648 BEACH NUMBERING SYSTEM I RAIN ST. LAKE AVE. HUNTINGTON AVE. 0PIERSIDE VILLAGFO HIGHWAY COAST �--PACIFIC G 3 �I I GG2 BR3 S 4 BCMAXMEL'S JA C3 Z DOS R 8CI BC BR5 81 BEA SERVICE ROADZACK'S DNIGIIT'S V1C'S BEACH BLVO. G4 STATE BR6 C7 PARKS �ZACK'S TOO 13 15 L5 L7 L9 11 Q LI L3 LEGEND: BC - BEACH CONCESSION BR - BEACH RESTROOM G - GATE PD - POLICE L - LIFEGUARD TOWER HDQS-HARBORS a BEACHES HDQS. ■0 ■■ NONE■ ■■■CC ■■■■■■■■■ ■■■O■■i ■u ■ ■MMEiM ■ ■■■■■■■■■■■■■■■■ Itw' ON IN ■ ■■ Mr �l6�. ,,. somI■�■■rH■■■■■■.■■■■•,■■■■■�■■�■ : ■� ':::::::::: g NM M'CIa : '�■ii■ M MO10 So ��.■.■�■� ■■■■� ■■C�• ■■C■.■■■■■■■■ ..■ >~, in us C0 111 C:C:CN::IINNIERM�MC:'= :�.,:':m:=:MCSM .�S■.:■. ■...14wr.,.�� ■IMEMEM■E■■ ■E 0 : .■■ :� •.III ■■:a ■..Or■E■■%■GM ..■ ...... EOM■ _: .�: ■ ■■■� ■■ MIN ■ ■ MEMO■■:■■ ■■■ z.:0;. ,� s :::NO .10 0 INNS MEN SIMS twardelligroll-311 .: ��■E::: NEI MI : 00 .9_=:: ME:MOON �J • ATTACHMENT B 9/19/2003 9:38:42 AM �•�r�OOuOW�? 00 �000 < <a °e ° O 0 0 "o O 00°O OQ e� O o 4k.0 O OOo 0 a 0 0 O C./ 5> DWIGHT'S BEACH CONCESSION 201 PACIFIC COAST HIGHWAY N W A" E S City of Huntington Beach Scale: V = 274' • • ATTACHMENT C CITY OF HUNTINGTON BEACH Dwight's Quarterly Evaluation SUMMARY SHEET Date Inspected: By: Tim Turner and Larry Neishi Dwight's Representative: Laurie Knight Phone: (714) 960-2917 FAX: Area O.K. Needs Attention GENERAL Doors & Locks Exterior Walls Graffiti Removal Interior Walls Removal of Bird Droppings - Restrooms . (Plumbing) Roof Rust Signa e Trash Trim Windows Other COMMENTS: E • DEFINITIONS Doors and Locks Clean and in operable position and condition. All locks shall be regularly checked and maintained. Absolutely no chain locks are allowed. Locks shall only be used on' authorized locations. Exterior Walls clean and smooth, void of rust, graffiti, stickers, etching, or other materials or marks that were not originally placed on the walls. Graffiti Removal All graffiti shall be removed within forty-eight hours including painted or sprayed graffiti, magic markers, stickers, etching, and surf wax. The building shall be kept free of graffiti. Interior rest room graffiti shall be removed on a regular basis not to exceed forty-eight hours. Grease Trap Free and clear flowing with regularly scheduled maintenance to prevent buildup or clogging. Hood Grease Filter Removed and cleaned a minimum of every three months, and checked regularly and cleaned more often if necessary. Filters shall be replaced at such time as required where volumes are no longer maintained. Interior Walls Clean and smooth, void of dirt or corrosion. All fire -rated walls shall be solid and unpenetrated. Removal of Bird Droppings the building in its entirety shall be cleaned a minimum of every three months to remove all bird droppings. If bird droppings present a health problem, they shall be removed prior to the minimum three month periods. Rest Rooms (Plumbing) Entry mats, floors and carpets shall be kept clean. Walls shall be kept fingermark free. Tile and wall surfaces shall be kept clean. Toilet bowls, rims, tank tops, and bodies shall be kept clean. Mirrors shall be kept clean and streak free. Soap dispensers clean and full. Paper towel dispensers clean and full. Toilet paper dispensers clean and full. All sink and faucet fixtures clean and rust free. Light fixtures clean and functioning. Air fresheners functioning. Trash receptacles clean, lined and emptied regularly. Roof Free of debris and cleaned regularly'as needed .to remove bird droppings, graffiti or vandalism. Roof leaks shall be reported immediately to the Community Services Department. Rust No accumulation or degeneration to interior or exterior surfaces. Rusted areas shall be cleaned and painted on a regular basis to avoid long term damage. Signage Clean, readable and in good condition. Bulbs in lighted signs shall be replaced as needed within twenty-four hours. No unauthorized signs shall be posted. Trash Deposited in designated containers. There shall be no buildup of cardboard boxes, unused equipment, unwanted decorator items, etc. within the trash areas. Trash areas shall be secured from public use to avoid deposit.of fish remains. Trim Clean and smooth, void of contusion and rust. Windows Clean and void of cracks. No commercial stickers shall be used on windows. Exterior Area Outside area around concession building that is utilized by the concessionaire. KIM JONES STATE FARM 714631S769 08/12/09 11117am P. 003 CERTIFICATE OF INSURANCE This eedifies'that ® STATE AFIRE AND CASUALTY COMPANY, Bloomington,lf wis ❑ STATE FARM GENERAL INSURANCE COMPANY, Bloomington, Illinois 600.❑ STATE FARM FIRE AND CASUALTY COMPANY, Scarborough, Ontario 3 s— ❑ STATE FARM FLORIDA INSURANCE COMPANY, Winter Haven, Florida,,( I9 C,eJ�� ❑ STATE FARM LLOYDS, Dallas, Texas insures the following policyholder for the coverages Indicated below: Name of policyholder JACKS BEACH CONCESSION �\ Address of policyholder 1210 MAIN ST., HUNTINGTON BEACH, CA. 92648 Location of operations 201 SOUTH. PACIFIC COAST HWY Description of operations INDIVIDUAL OWNER The policies listed below have been Issued to the polkyholder for the policy periods shown: The insurance. described in these policies is subject to all the terms exclusions, and conditions of those policies. The limits of liability shown may have been reduced by any paid claims. POLICY NUMBER TYPE OF INSURANCE POLICY PERIOD Effective Date : Expiration Date LIMITS OF LIABILITY (at beginning of policy period) Comprehensive BODILY INJURY AND Business Liability PROPERTY DAMAGE --------------------- - This insurance inciudes: 0 ------- -- --------- �--------•------ L ------- Products - Completed Operations ❑ Contractual Liability ❑ Underground Hazard Coverage Each Occurrence $ ❑ Personal Injury ❑ Advertising Injury General Aggregate $ ❑ Explosion Hazard Coverage ❑ Collapse Hazard Coverage Products - Completed $ ❑ Operations Aggregate 1-3 POLICY PERIOD BODILY INJURY AND PROPERTY DAMAGE EXCESS LIABILITY Effective Date ; Expiration Date (Combined Single Limit) ❑ Umbrella Each Occurrence $r ❑ Other Aggregate $ Part 1 STATUTORY Part 2 BODILY INJURY Workers' Compensation and Employers Liability Each Accident $ Disease Each Employee $ Disease -Policy Limit $ POLICY PERIOD LIMITS OF LIABILITY POLICY NUMBER TYPE OF INSURANCE Effedlve Date : Expiration Date (at beginning of policy period) 92-72-9728-4 MERCANTILE 10-08-02 10-08-03 2000000 LIAB/4000000 AGG THE CERTIFICATE OF INSURANCE IS NOT A CONTRACT OF INSURANCE AND NEITHER AFFIRMATIVELY NOR NEGATIVELY AMENDS, EMENDS OR ALTERS THE COVERAGE APPROVED BY ANY POLICY DESCRIBED HEREIN. ADDITIONAL INSURED If any of the described policies are canceled before its expiration date, State Farm will try to trait a written notice to the Certificate holder 30 Name and Address of Certificate Holier days before cancellation. If however, we fail to mail such notice, no obligation or liability will be imposed CITY OF HUNTINGTON BEACH, ITS AGENTS, OFFICERS AND EMPLOYEES F;;7 nts or representatives. 2000 MAIN #FL 5 HUNTINGTON BEACH, CA. 92648-2702 SignatutffAUthorft9d Representative AGENT 08/12/03 Title Date Agent's Code Stamp APO Code 558-W4 a.3 04-1M Printed in U.SA OVED AS TO FORM: Ap �JE IFER McGRATH, City Attorney ' w aille ✓ .J LJIN : S l fi l t FARM 714521S759 09l14/09 09 [ 61am P . ooa rVur AY, VV""M J.,. YV t':1A I1't L'tl LV.7Y J[A[L t'AML [AJUKAAt.t1 � .r, • WJVV1 HT Policy No. 92-72-9728-4 • P Cam) ADDITIONAL INSURED ENDORSEMENT State or Political Subdivisions - Permits .......,ti PolICy ND.: 92-72-9728-4 Named tnsured: JACKS BEACH CONCESSION INC State or Political Subdivision: CITY OF HUWTXNGTW BEACH ITS AGENTS, OFFICERS AND EMPLOYEES 2000 MAIN ST FL 5 BXWTINGTON Bit CA 92648-2702 WHO IS AN INSURED, under SECTION i1 2. This insurance does not apply to: DESIGNATION OF INSURED, Is emended to Include as an Insured any state or political subdivision a. bodily injury. property damage, shown above, subject to the fWowing personal injury or advertising injury provis;�; arising out of operatkm performed for the state or municipality; or 1. This insurance applies only with respect to operations performed by you or on your b. bodily injury or property damage behalf for which the state or political included within the products -completed subdivision has issued a permit. operations hazard. RE-43" Prmftd in V.S.A M) KIM JONES S1ATE FARM /14b�1b/bJ fors/ 1c/n=F 111 1 /am r . roue CERTIFICATE OF INSURANCE This certifies that ® STATE FAR IRE AND CASUALTY COMPANY, Bloomington. 00is ❑ STATE FARM GENERAL INSURANCE COMPANY, Bloomington, Illinois ❑ STATE FARM FIRE AND CASUALTY COMPANY, Scarborough, Ontario ❑ STATE FARM FLORIDA INSURANCE COMPANY, Winter Haven, Florida ❑ STATE FARM LLOYDS, Dallas, Texas insures the following policyholder for the coverages Indicated below: Name of policyholder DWIGHTS BEACH CONCESSION Address of policyholder 1210 MAIN ST. ,- HUNTINGTON BEACH, CA. 92648 Location of Operations 201 SOUTH PACIFIC COAST HWY Description of operations INDIVIDUAL OWNER The policies listed below have been issued to the policyholder for the polity periods shown. The Insurance described in time policies Is subject to all the terms exclusions, and conditions of those policies. The limits of liability shown may have been reduced by any paid claims. POLICY NUMBER TYPE OF INSURANCE POLICY PERIOD Effective Date : Expiation Date UMITS OF LIABILTTY (at beginning of policy period) Comprehensive BODILY INJURY AND Business Liability PROPERTY DAMAGE -•- This insurance includes: - ----------- ---•----------- ❑Products -Completed Operations ❑ Contractual Liability ❑ Underground Hazard Coverage Each Occurrence $ ❑ Personal Injury ❑ Advertising Injury General Aggregate $ ❑ Explosion Hazard Coverage ❑ Collapse Hazard Coverage Products — Completed $ ❑ Operations Aggregate POLICY PERIOD BODILY INJURY AND PROPERTY DAMAGE EXCESS LIABILITY Effective Date ; Expiration Date (Combined Single Limit) ❑ Umbrella Each Occurrence $ , ❑ Other Aggregate $ Part 1 STATUTORY Part 2 BODILY INJURY Workers' Compensation and Employers Liability Each Accident $ Disease Each Employee $ Disease - Policy Limit $ POLICY PERIOD LIMITS OF LIABILITY POLICY NUMBER TYPE OF INSURANCE Effective Date : Expiration Date (at beginning of policy period) 92-72-9728-4 MERCANTILE 10-08-02 10-08-03 2000000 LIAR/4000000 AGG THE CERTIFICATE OF INSURANCE IS NOT A CONTRACT OF INSURANCE AND NEITHER AFFIRMATIVELY NOR NEGATIVELY AMENDS, EXTENDS OR ALTERS THE COVERAGE APPROVED BY ANY POLICY DESCRIBED HEREIN. ADDITIONAL INSURED If any of the described policies are. canceled.before its expiration date, State Farm will try to mail a written notice to the certificate holder 30 Name and Address of Certificate Holder days before cancellation. If however, we fall to mail such notice, no obligation or liability will be imposed CITY OF HUNTINGTON BEACH, ITS AGENTS, OFFICERS AND EMPLOYEES On S e Pgrin or its agen r representatives. 2000 MAIN NFL 5 HUNTINGTON BEACH, CA. 92648-2702 S' tureE Representative T 08/12/03 r TWe Date Agenrs Code Stamp AFO Code 558.994 8.3 O4-1899 Printed in U.S.A. ROVED Ag .T.0 FORM: N NIFER WGRATH, City Attorney3 GuQ! vP� n arl 4Ljr--D bIRlt 1-RNM /Jb 4z.Lt'e------- - -- U8/iJ/U1 Wtv lb:*U FAS 714 241 ZUVo �t+ar.L0fW0 r..o,capm r. rwa 5TA'lt l�AH0.INSUltANVU 10UU1 r 1 • • fEe32t HT Poky No. 92-72-9728-4 p1881 ADDITIONAL INSURED ENDORSEMENT r" State or Political Subdivisions - Permits ..w..y PORGY NO.: 92 72-9728-4 Named Insured.: JACXs BEACH colic SSION INC State or Political Subdivision: CITY OF iiUTJ' INGTOR BEACH ITS AGENTS, OFFICRItS AND EMPLOYEES 2000 MAIN ST FL 5 HUNTINGTON 13H CA 92648-2702 WHO IS AN INSURED, under SECTION If 2. This insurance does not apply to. DESIGNATION OF INSURED, is amended to Include as an Insured any state or poildical subdivision a. bodily injury, property damage, shown above. subject to the following personal injury or advertising injury provisions: arising out of operations performed for ft state or rrxmicipality; or 1. This insurance applies orgy with respect to operations performed by you or on your b. bodily Injury or property damage behalf for which the state or political inducted within the products -completed subdivision has issued a permit. operations hazard. P64MI P► w h USA (YAM) __.__..Br.! LAR.wT.inkic nwf%A- .... _ AMENEDED •SEP 52002 Policy Number `'` """ """'""`' 92-72-9729-6 SIPTE FARM GEr" =RAI. INSURANCE COMPANY [ 3i36-3 AGOURA,RD,-WESTLAKE VILLAGE,CA 91363-0001 A STOCK COMPANY WITH HOME OFFICES IN BLOOMINGTON, ILLINOIS Named Insured and Mailing Address 8707-F417 D DWIGHTS BEACH CONCESSION, INC 1210 MAIN ST HUNTINGTON BCH CA 92648-2721 Cov A - Inflation Coverage Index: 143.4 BUSINESS POLICY - SPECIAL FORM 3 Cov B - Consumer Price-index:179.9 AUTOMATIC RENEWAL - If the POLICY PERIOD is shown as 12 MONTHS, this policy will be renewed automatic subject to the premiums, rules and forms in effect for each succeeding policy period. If this policy is terminated, we give you and the Mortgagee/Lienholder written notice in compliance with the policy provisions or as required by law. Policy Period: 12 Months The policy period begins and ends at 12:01 am standard time at the Effective Date: OCT 8 2002 premises location. Expiration Date: OCT 8 2003 amed in Location of Covered Premises: 201 PACIFIC COAST HWY HUNTINGTON BH CA 92648 Coverages & Property Section l A Buildings B Business Personal Property C Loss of Income - 12 Months Section II L Business Liability M Medical Payments Products -Completed Operations (PCO) Aggregate General Aggregate (Other Than PCO) Forms, Options; and Endorsements Special Form 3 Debris Removal Endorsement Amendatory Endorsement Policy Endorsement Business Policy Endorsement Glass Deductible - Section I Additional Insured Limits of Insurance $ 223;400 $ Actual Loss $ 2,005;000 $ 4,000:000 $ 4,000,000 FP-6143 FE-6451 FE-6205 FE-6506.1 FE-6464 FE-6538.1 FE-6321 Your policy is amended SEP 5 2002 ADDL INSURED NAME & ADDRESS CHANGED Other items shown are effective with the policy's 2002 renewal cupancy: mercantile Deductibles - Section I $ 1,000 Basic In case of loss under this policy, the deductible will applied to each occurrence and will be deducted from amount of the loss. Other deductibles may apply - refE policy. Endorsement Premium None Discounts Applied: Renewal Year Years in Business Claim Record Continued on Reverse Side of Page I OTHER LIMITS AND EXCLUSIONS MAY APPLY - R Prepared SEP 09 2002 Countersi ed FP-8030.2C CKKU By 06/1993 KIMBERLY JONES Your policy consists of this page, any endorsements (714) 531-0502 and the policy form. PLEASE KEEP THESE TOGETHER. Agent (OM KAM JUKES STATE FARM 714S3157S9 U3113/03 WED 1b:bU *cAA tlq Z91 ZVVU J1Alt rAKX inaUnvrt,c HT Policy No. 92-72-9729-6 ADDITIONAL INSURED ENDORSEMENT State or Political Subdivisions - Perrnits Policy No.: 92-72=9729-6 Named lesuled: DwiGwa BzAcH CONCESSION, INC State or Political Subdivision: CITY OF HUMNGTOR BEACH ITS AGENTS, OFFICERS AND EMPLOYEES 2000 MAI11 ST FL 5 HUNTINGTON BH CA 9264E-2702 WHO 1S AN WSURED, under SECTION 11 DESIGNATION OF INSURED, is amended to include as an insured any state or political subdivision shown above, subject to the hftMng provisiorm 1. This insurance applies only with respect to operations performed by you or on your behalf for which the state or political subdivision has issued a permit. 08l13/09 03t29pm P. 002 gUVV& aFE-s3tt (7►) MGM Y� 2. This insurance does not apply to: a. bodily injury, property damage, personal Injury or advertising injury arising out of operations performed for the state or municipawty, or b. bodily Injury or property damage Included within the products -completed operations hazard. F:r-- R= PrW" in u.s.A Cnee) n+m JVNt.S STATE FARM 71463167ss 09/14/09 68/13/03 WED 15:50 PAX 714 241 209D STATE FARM INSURUYCG HT Policy NO. 92-72-9729-6 ADDMONAL INSURED ENDORSEMENT State or Political Subdivislons - Permits Policy No.: 92 - 72 - 9729 - 6 Named Insured: DWiaHTs BEACH CONCSsszow, INC. State or Political Subdivision: CITY OF MMI NGTON BEACH ITS AGENTS, OPPICBRS AND BHPLOYM 2000 MAID 9T YL 5 HU)rrrNGTON SH CA 92648-2702 WHO IS AN INSURED, under SECTION 11 DESIGNATION OF INSURED. is amended to include as an Insured any state or political subdivision shown above, subject to the fallowing provisions: 1. This insurance applies only with reaped to operations performed by you or on your behalf for which the state or poll ical subdivision has issued a permit. 2. This insurance does not apply to: tSiam P. 002 10 002 Rf 632t rraa) IMF Mr a. bodily Injury, property damage. personal Injury or advertising injury arising out of operations performed for the state or rrwrty, or b. bodily injury or property damage included within the products -completed operations hazard. F6 M PrinWt+U.SA (TM) • 21 HT Policy No. 92-72-9729-6 FE(7/88) ADDITIONAL INSURED ENDORSEMENT State or Political Subdivisions - Permits Policy No.: 92-72-9729-6 Named Insured: DWIGHTS BEACH CONCESSION, INC State or Political Subdivision: CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS AND EMPLOYEES 2000 MAIN ST FL 5 HUNTINGTON BH CA 92648-2702 WHO IS AN INSURED, under SECTION II 2. This insurance does not apply to: DESIGNATION OF INSURED, is amended to include as an insured any state or political subdivision a. bodily injury, property damage, shown above, subject to the following personal injury or advertising injury provisions: arising out of operations performed for the state or municipality; or 1. This insurance applies only with respect to operations performed by you or on your b. bodily injury or property damage behalf for which the state or political included within the products -completed subdivision has issued a permit. operations hazard. FE-6321 Printed in USA (7/88) KIM JONES STATE FARM 714S31S7S9 09/12/e9 e3:espm P. 002 • AUGUST 12, 2003 Fire Policy Status Ph. (000)000-0000 DWIGHTS BEACH CONCESSION, INC. GENL Policy: 92-72-9729-6 G Yr issd:.1983 1210 .MAIN ST. Xref :. HUNTINGTON BCH CA 92648-2721 Location: 201 PACIFIC COAST HWY HUNTINGTON BH CA 92648 Term: CONT Type: BUS -MERCANTILE Renew date: OCT-OB-04 Coverage information Premium: 1,865.58 A -BUILDING 267700 CA GAR ASMT 36.58 B-BUSN PROP 24000 BILLED 07/30/2003 C-LOSS INC ACT LOSS L-BUSN LIAR 2000000 Amount due: 1865.58 GEN AGGREGT 400000D Date due: OCT-08-03 PCO AGGREGT 4000000 Bill to: INSD M-MED/PERSN 5000 Prev prem: 1,541 Prev risk: 265,000 Deductibles applied:1000 ALL PER OTHER DED MAY APPLY Messages: Year built: 1967 Constr: FRAME Zone: 79 Sub zone: 01 KIM JONES STATE FARM 714531S7SS 08/12/03 03:0spm P. 003 AUGUST 12, 2003 Fire Policy Status ADDL INSURED - SECTION II CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS AND EMPLOYEES 2000 MAIN ST FL 5 HUNTINGTON BH CA 92648-2702 Prem adj:,YRBUS $ 129 /RENYR $ 246 CHR C 20.0% FMP seg: 99 PROPERTY LOCATIONS LOC CMPX ADDRESS LIABILITY STCLS BLD AMT CONTENTS PREMIUM EXPOSURE LIMIT PREMIUM 001 201 PACIFIC COAST HWY HUNTINGTON BH CA 92648 553 267700 24000 1767 193833 2000000 KIM JONES SIAIE FARM Z146816768 08/1Z/08 0ae0Spm P. 004 • AUGUST 12, 2003 Fire Policy Status H Ph. (714)536-2603 JACKS BEACH CONCESSION INC GENL Policy: 92-72-9728-4 G Yr issd: 1985 1210 MAIN ST Xref:.. HUNTINGTON BCH CA 92648-2721 Location: HUNTINGTON AVE & COAST HWY HUNTINGTON BH CA 92648 Term: CONT Type: BUS -MERCANTILE Renew date: OCT-08-04 Coverage information Premium: 1,800.30 A -BUILDING 216200 CA GAR ASMT 35.30 B-BUSN PROP 29800 BILLED 07/30/2003 C-LOSS INC ACT LOSS L-BUSN LIAB 2000000 Amount due: 1800.30 GEN AGGREGT 4000000 Date due: OCT-08-03 PCO AGGREGT 4000000 Bill to: INSD M-MED/PERSN 5000 Prev prem: 1,471 Prev risk: 214,000 Deductibles applied:1000 ALL PER OTHER DED MAY APPLY Messages: Year built: 1958 Zone: 79 Sub zone: 01 Constr: FRAME KIM JONES STATE FARM 714SS16759 08/12/03 03:0spm P. 00S i AUGUST 12, 2003 Fire Policy Status ADDL INSURED SECTION II CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS AND EMPLOYEES 2000 MAIN ST FL 5 HUNTINGTON BH CA 92648-2702 Prem adj: YRBUS $ 124 /RENYR $ 235 CHR C 20.0% FMP seg: 99 PROPERTY LOCATIONS LOC CMPX ADDRESS LIABILITY STCLS BLD AMT CONTENTS PREMIUM EXPOSURE LIMIT PREMIUM 001 HUNTINGTON AVE & COAST HWY HUNTINGTON BH CA 92648 553 216200 29800 1697 230169 2000000 STATE FARM INSURANCE COMPANIES • State Farm General Insurance Company 31303 Agoura Road Westlake Village,CA 91363.0001 D-8707-F417 F Z 3 CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS AND EMPLOYEES 2000 MAIN ST FL 5 HUNTINGTON BH CA 92648-2702 Il�lr�i�l�lrll��lrillr�lrnlrllrrrlllnirrl�lllrrrllr�rlluil Insured: JACKS BEACH CONCESSION INC Location: HUNTINGTON AVE & COAST HWY HUNTINGTON BH CA Add Ins -II: CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS AND EMPLOYEES Forms, Options, and Endorsements Special Form 3 FP-6143 Money & Secur $1,000/$1,000 OPT MO Debris Removal Endorsement FE-6451 Amendatory Endorsement FE-6205 Policy Endorsement FE-6506.2 Business Policy Endorsement FE-6464 Glass Deductible - Section I FE-6538.1 Additional Insured FE-6321 Terrorism Insurance Cov Notice FE-6999 PROVE TO F oK ` r1w J NNIFER Mc GRA XityAttomvy i • RENEWAL CERTIFICATE POLICY NUMBER - -97 - BUSINESS - MERCANTILE / SERVICE OCT 08 2003 to OCT 08 2004 DATE DUE PLEASE PAY THIS AMOUI TO BE PAID BY INSURED Coverages and Limits Section A Buildings $216,20( B Business Personal Property 29 80( C Loss of Income Actual Los! Deductibles - Section I Basic 1,00( Other deductibles may apply - refer to policy Section II L Business Liability $2, 000, 001 M Medical Payments 5,00( Gen Aggregate (Other than PCO) 4,000,00( Products -Completed Operations 4,000,00( (PCO Aggregate) Annual Premium $1,697 Forms, Opts, & Endrsmnt 36 Bus Liability - Cov L 32 CA Surcharge 35 Total Amount $1,800 Premium Reductions Your premium has already been reduced by the following: Renewal Year Discount Yrs in Business Discount Claim Record Discount Cov. A - Inflation Index: 144.9 Cov. B - Consumer Price:. 184.2 �164&` t°ekizcs,i�iwe�ac... Agent IMBER Y JONES Telephone-_177141 531-0502 o.e.,—a_ 11 11 'In Onna 80 3211 3484 See reverse side for important informatior Please keep this part for your record. STATE FARM INSURANCE COMPANIES State Farm General Insurance Company 31303 Agoura Road weeds a VIIIage,CA 91363-0001 D-8707-1417 F Z 3 CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS AND . .EMPLOYEES 2000 MAIN ST FL . HUNTINGTON BH CA 92648-2702 Insured: DWIGHTS BEACH CONCESSION, INC Location: 201 PACIFIC COAST HWY HUNTINGTON BH CA Add Ins -II: CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS AND EMPLOYEES Forms, Options, and Endorsements Special Form 3 Money & Secur $1,000/$1,000 Debris Removal Endorsement Amendatory Endorsement Policy Endorsement Business Policy Endorsement Glass Deductible - Section I Additional Insured Terrorism Insurance Cov Notice FP-6143 OPT MO FE-6451 FE-6205 FE-6506.2 FE-6464 FE-6538.1 FE-6321 FE-6999 • RENEWAL CERTIFICATE POLICY NUMBER 92-72-9729-6 BUSINESS - MERCANTILE / SERVICE OCT 08 2003 to OCT 08 2004 DATE DUE PLEASE PAY THIS AMOU! TO BE PAID BY INSURED Coverages and Limits Section I . A Buildings $267,701 B Business Personal Property 24 001 C Loss of Income Actual Los - Deductibles - Section 1 Basic 1,00( Other deductibles may apply - refer to policy Section II L Business Liability $2, 000, 00( M Medical Payments 5, 00( Gen Aggregate (Other than PCO) 4,000 00( Products -Completed Operations 4, 000, 00( (PCO Aggregate) Annual Premium $1, 767 Forms, Opts, & Endrsmnt 36 Bus Liability - Cov L 26 CA Surcharge 36 Total Amount $1,865 Premium Reductions Your premium has already been reduced by the following: Renewal Year Discount Yrs in Business Discount Claim Record Discount Cov. A - Inflation Index: 144.9 Cov. B - Consumer Price: 184.2 / Agent IMBER Y JONES Telephone (714) 531-0502 D.e. rnA . 11 11 '11) Onnl 4@—i 80 3211 3485 See reverse side for important informatior Please keep this part for your record. ,. • ORTHOLDER COPY SG STATE ;P.O. BOX`807 SAN FRANCISCO,CA 94142-0807. COMPENSATION INSURANCE FUND CERTIFICATE -OF WORKERS' COMPENSATION -INSURANCE ISSUE DATE: 06-30-2003 GROUP:._ 000029 - _ - POLICY NUMBER: 00 562 -2003 CERTIFICATE -ID: 1.- CERTIFICATE -EXPI S: 06-30=2004.` 06-30-2. 3/06-30-200k- r :C I`TY`.:OF HUNTI NGTON . BEACH _ SG JOB: ALL S' CHR 15..::MENDOZA, R ISK MANAGEMENT 2000 MAIN STREET HUNTINGTON,BEACH; CA 92648 This is to certify that we have issued a valid Workers' Compensation insurance policy in a form approved by the - California Insurance Commissioner to the employer named below. for the policy period indicated. This policy is not subject to cancellation by the Fund except upon 30 days' advance written notice to the employer. We will also give you 30 days `advance notice should this policy be cancelled prior to -its normal -expiration ' This certificate of insurance is notaninsurance policy and does not amend,. extend or.alter the :coverage afforded by the policies ::listed herein Notwithstanding any requirement, term, or condition of any contract. or: other., document ........::........ with respect'ao which this certificate of ;insurance ri'may ,be' issued or may pertain,.` the insurance afforded:by..the policies described herein is subject. to all the terms, exclusions and conditions of such policies._ Ailet AUTHORIZED REPRESENTATIVE _ PRESIDENT EMPLOYER'.S'tIABILITY. LIMIT INCLUDING DEFENSE COSTS: $1,000,000.00 P.ER"OCCURRENCE. , ENDORSEMENT'#2065 ENTITLED CERTIFICATE HOLDERS' NOTICE: EFFECTIVE'06-30-2063 IS ATTAC�HED`TO. AND FORMS A PART OF THIS POLICY qAti / J11_4NIFER,McGRATH, City Attorney - I EMPLOYER LEGAL NAME t DWI GHT! S ::S% JACK'S INC ;` DWIG'HT'S &JACK'S INC 1210 MAIN ST HUNTINGTON BH CA 92648 IREv.3-031 PRINTED 05-16-2003, P 4 `8 THIS DOCUMENT HAS A BLUE PATTERNED BACKGROUND • *IFICATE HOLDER COPY STATE P.O. BOX 420807, SAN FRANCISCO, CA 94142-0807 COMPENSATION INSURANCE FUND CERTIFICATE OF WORKERS' COMPENSATION INSURANCE JULY 30, 2003 CITY OF HUNTINGTON BEACH RISK MANAGEMENT ATTN: CHRIS MENDOZA 2000 MAIN STREET HUNTINGTON BEACH CA 92648 GROUP: 000029 POLICY NUMBER: 5625-2003 CERTIFICATE ID: 3 CERTIFICATE EXPIRES: 06-30-2004 06-30-2003/06-30-2004 This is to certify that we have issued a valid Worker's Compensation insurance policy in a form approved by the California Insurance Commissioner to the employer named below for the policy period indicated. This policy is not subject to cancellation by the Fund except upon 30 days advance written notice to the employer. We will also give you 30 days advance notice should this policy be cancelled prior to its normal expiration. This certificate of insurance is not an insurance policy and does not amend, extend or alter the coverage afforded by the policies listed herein. Notwithstanding any requirement, term or condition of any contract or other document with respect to which this certificate of insurance may be issued or may pertain, the insurance afforded by the policies described herein is subject to all the terms, exclusions, and conditions, of such policies. AUTHORIZED REPRESENTATIVE PRESIDENT Vx- EMPLOYER'S LIABILITY LIMIT INCLUDING DEFENSE COSTS: $1,000,000 PER OCCURRENCE ENDORSEMENT #0015 ENTITLED ADDITIONAL INSURED EMPLOYER EFFECTIVE 07-30-2003 IS ATTACHED TO AND FORMS A PART OF THIS POLICY. NAME OF ADDITIONAL INSURED: CITY OF HUNTINGTON BEACH JACK CLAPP, PRESIDENT - EXCLUDED JEANETTE CLAPP, SEC TRES - EXCLUDED DAVID.CLAPP, CHAIRMAN OF THE BOARD - EXCLUDED ENDORSEMENT #2065.ENTITLED CERTIFICATE HOLDERS' NOTICE EFFECTIVE 07.-.01-1995.IS. ATTACHED TO AND FORMS A PART OF THIS POLICY. ENDORSEMENT #2065 ENTITLED CERTIFICATE HOLDERS' NOTICE EFFECTIVE 06-30-2003 IS ATTACHED TO AND FORMS A PART OF THIS POLICY. EMPLOYER DWIGHT'S & JACK'S INC. 1210 MAIN ST HUNTINGTON BH CA 92648 SCIF 10262E rEPF-UI: EJAI INSUR�VCE AND INDEMNIFIMATION WAIVER MODIFICATION REQUEST 1. Requested by: Chris Mendoza/Risk Management 2. Date: August 12, 2003 3. Name of contractor/permittee: Jack's/Dwight's Beach Concession 4. Description of work to be performed: Take-out food sales and equipment rentals 5. Value and length of contract: Approximately $200K/yearly; year-round operation 6. Waiver/modification request: General liability 7. Reason for request and why it should be granted: Unable to comply with the city's cancellation clause wording 8. Identify the risks to the City in approving this waiver/modification: None. Dep ent Head Signature Date: APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval from the City Administrators Office is only required if Risk Management and the City Attorney's Office disagree. 1. Ris Management Approved ❑ Denied 3 ignature Date 2. City Attorney's Office 1�1<pproved ❑ De r 6 4'�:4 nature Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Administrative Services 1--.---- 0 014 rynnne 4.15e% r"A r LETTER OF TRANSMITTAL OF ITEM APPROVED BY THE CITY COUNCIL/ REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH DATE: October 8, 2003 TO: David Clapp & Laurie Knight Name - 1210 Main Street Street Huntington Beach, CA 92648 City, State, Zip ATTENTION: DEPARTMENT: REGARDING: Lease - Dwight's Beach Concession See Attached Action Agenda Item E-10 Date of Approval 10/6/03 Enclosed For Your Records Is An Executed Copy Of The Above Referenced Agenda Item. . Remarks: ��Q�i►t1:Ge ISZ7��C�""' Connie Brockway City Clerk Attachments: Action Agenda Page Agreement X Bonds Insurance x RCA Deed Other CC: Jim Engle, Director Community Svc X X n Name Department RCA Agreement Insurance Other Clay Martin, Director' Admin. Svc. X X.. Name Department RCA Agreement Insurance Other Chris Mendoza Risk Management X Name Department RCA Agreement Insurance Other Name Department RCA Agreement Insurance Other Name Department RCA Insurance g1followup/letters/coverletter of transmittal LJ CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 RISK MANAGEMENT DIVISION June 4, 1998 Jack Clapp _ - 1210 Main Street Huntington Beach, CA 92648 RE: Lease — Dwight's Beach Concession Dear Mr. Clapp: Our records indicate that we do not have an updated Certificate of Insurance for general liability coverage as required by our lease agreement. We are in possession of your workers compensation insurance renewal certificate which wil expire on June 30, 1999. It is imperative that we receive a certificate of insurance that evidences the following minimum limits with a California admitted carrier with a current A.M. Best's Rating of no less than ANII: , ♦ General Liability: $1,000,060 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this location or the general aggregate limit shall be twice the required occurrence limit. ♦ The City of Huntington Beach it agents, officers and employees must be name as certificate holder and as additional insured by separate attached endorsement. ♦ Property Insurance: Full replacement cost with no coinsurance penalty provision. ♦ Deductibles, self -insured retentions, or similar forms of coverage limitations or modifications must be declared to and approved by the City of Huntington Beach. DRUG USE IS AB Air r r • • ♦ Notice of Cancellation Requirement: The City requires 30-day notice of cancellation. The words "endeavor to" and "failure to mail such notice shall impose no obligation nor liability of any kind upon the company, its agents or representatives" must be removed or stricken out if they appear on a certificate. An exception for notice of cancellation of 10 days for non- payment of premium or non -reporting of payroll is acceptable. Please forward this letter to your insurance agent. If you have any questions, please call the Risk Management Office at (714) 536-5252 or (714) 536-5589. Sincerely, i Karen S. Foster, ARM Risk Manager Cc: Dan Brennan Connie Brockway, City Clerk Gail Hutton, City Attorney • 0 CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 REAL ESTATE SERVICES December 9, 1993 Jack Clapp 1210 Main Street Huntington Beach, California 92648 Reference: Lease — Dwight's Beach Concession Dear Jack: In accordance with your request for confirmation as to the beginning date of your above referenced lease agreement with the City of Huntington Beach, the date is October 25, 1993. The date that was handwritten into the contract supercedes the typed date as shown on page 1, which states June 21, 1993 as the beginning date. The termination date therefore would be October 24, 1998 and not, as typed, June 20, 1998. If you have any questions, please call me at 714/536-5544. Respectfully, DAN M. BRENNAN Director Real Estate Services DMb/rf 0141U cc: Arnie Ross DRUG USE,. IS AB CITE' OF Hl.ENTINGTON SCAM-4 2000 MAIN STREET CALIFORNIA 92643 REAL ESTATE SERVICES December 9, 1993 641 Jack Clapp 1210 Main Street Huntington Beach, California 92648 Reference: Lease — Dwight's Beach Concession Dear Jack: In accordance with your request for confirmation as to the beginning date of your above referenced lease agreement with the City of Huntington Beach, the date is October 25, 1993. The date that was handwritten into the contract supercedes the typed date as shown on page 1, which states June 21, 1993 as the beginning date. The termination date therefore would be October 24, 1998 and not, as typed, June 20, 1998. If you have any questions, please call me at 714/536-5544. Respectfully, DAN M. BRENNAN Director Real Estate Services DMb/rf 0141U cc: Arnie Ross ZRUG USE is AB • 0 ;,",& CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK November 10, 1993 Mr. Jack K. Clapp 1210 Main Street Huntington Beach, CA 92648 REFERENCE: LEASE - DWIGHT'S BEACH CONCESSION Dear Mr. Clapp: Enclosed is an executed copy of the "LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, DBA AS DWIGHT'S BEACH CONCESSION". A copy of your insurance form is also enclosed. If you have any questions regarding this Agreement, please contact Robert J. Franz, Deputy City Administrator, at (714) 536-5228. Sincerely, Connie Brockway, CMC City Clerk CB:jh Enclosures 2743k-2 (Telephone: 714-536-5227 ) RE UESI FOR CITY COUNCIL ACTION Date October 18, 1993 Submitted to: HONORABLE MAYOR AND CITY COUN MEMBE Submitted by: MICHAEL T. UBERUAGA, City Administrato Prepared by: ROBERT J. FRANZ, Deputy City Administrator ® y CIL Subject:-- DWIGHT'S BEACH CONCESSION , /V - $ 1923 C1T1 CLER Consistent with Council Policy? Yes [ ] New Policy or Excepti n Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: The renewal of a beach concession lease between Jack K. and/or Jeanette R. Clapp, H/W, dba "Dwight's" as Lessee and the City of Huntington Beach as Lessor. A new term of five (5) years is proposed, with three five (5) year options if mutually agreed by the concessionaire and the City Council. This Request for City Council Action is being resubmitted due to certain insurance clauses having been inadvertently omitted in the last submitted contract. Step Increase Rents as follows: Annual Sales Volume $1 - $100,000 $100,000 - $200,000 $200,000 - Plus Percentage Rate 10.5% 12.5% 14.5% RECOMMENDATION: Approve the lease with Jack K. and/or Jeanette R. Clapp, H/W, dba "Dwight's". ANALYSIS: The Clapp family has been associated with city concessions on or near thV beach since 1934. On April 1, 1968, the City entered into a ten (10) year lease agreement with optional extensions with Mr. Clapp which ended in 1988. Since 1988 Mr. Clapp has been operating on a month to month basis with a flat 12.5% fee to the City. A longer term agreement has not been proposed since 1988 due to the uncertainty about development plans in this area. Current plans to complete the Pier Plaza area include the need to continue this concession operation in its current location. The proposed step increase in the rents will allow the City a greater income return and preclude a new contract .to cover price increases. This lease, with renewed terms which are in line with the current concession lease market, will continue proven good service to the beach public and maximize profitability for the City. This lease will further enable the concessionaire to .continue, improving the present City owned facility. FUNDING -SOURCE:- -None. ALTERNATE ACTION: Continue the lease for a period of time - month to. month. ATTACHMENTS: Proposed hew lease agreement. P10 5/85 � r Thib IS 10 Certify that i I has in force for i • CERTIFICATE OF INSURANIO STATE FARM FIRE AND CASUALTY COMPANY, Bloomington, Illinois ❑ STATE FARM GENERAL INSURANCE COMPANY, Bloomington, Illinois location of operations PEACE C0XCV-BLION & -TALC'S RFA('T-T CONCF,SSIOI Ntme of P011eyMIftr 1 71 n MATN .S•TRRE Adoress of Noi,eynoiaer 141=11Atr±rrnu BEACN, . CA 92648 _----._—._. TACK AbID .TRAURTT9 C aPD the following r:nverages for thp rP.rinds and limits Indicated below. POLICY NUMBER TYPE OF INSURANCE POLICY PERIOD LIMITS OF LIABILITY (etf.rexp.) ❑ Comprehehaide Ganeral Liability, Limanufacturers, and Contractors' Liability ❑ Owners'. Landlords' and runput4' Liability The above insiriinCP inctud • 3 I (applicabla if indreatad by�) L. I PROnUCTS•COMPLETCD OPERATIONS ❑ OWNFRS' OR r.ONTRAC:TpRS' PROTEC TIVE LIABILITY F I CONTRACTUAL LIABILITY ❑ BROAD FORM PROPERTY DAMAGF ❑ RROAn FORM r nMPRFNENSIVE GENEMAL LIABILITY POLICY NUMBER TYPE OF INSURANCE POLICY PERIOD I(011GOxD.) (BUSINESS cn-72-9729-4L.—__.... MERCANTILE .. 0/-V.92-10/8/93 b,PUSINESS n ❑ DUAI I ImuR for Each OCCurrurtt:C Aggregate Each Occurrence A00re0ale' I I Combined Single Limit for BODILY INJURY PROPERTY DAMAC S Cecil Occurrence $ _ Aggregate S CANTRACTLIAI I IAAII ITY LIMITS (It different than above.) Farh Onmirrrrnna $ Each Occurrence $ Aggregate $ BODII Y INJURY At, PROPERTY DAMAC Ronit Y IN,11•IRY PROPERTY DAMAC. EXCESS LIABILITY ❑ Combined Sirloin I tmtt Inr BODILY INJURY AP U Umbrella PROPERTY DAMAL L_I Other AFI+ OVED AS TO FORMv Each Occurrence $ 2,000,000 _- GAI , i?UTTO1t, City Attorn y Aggregate s 4,000,000 B ✓ep;, "_-_FV=Orrie- pan .1 STATUTORY Workers Compensation' Part 2 BODILY INJURY and Employers 02,2 EaCh ArrlilrnA T Liability !/ ()IRP.A.4P.•FAf:h Ft111,1„yr.,t, $ Disease•Pejhvy Limit S 'AUUmU91a nil a(tplicaldn it (twines'. I nnrilirdx' ;end Tenaniv' I intidity Inxur1ncr nxnludnr; nlmcHial aileralinns. new rin,ttrnrtin.i Or 00M01,140n. THE CERTIFICATE OF INSURANCE 16 NOT A CONTRACT OF INSURANCE AND NEITHER AFFIRMATIVELY NOR NEGATIVELY AMENDS, EXTENDS OR ALTERS THE COVERAGE APPROVED BY ANY POLICY DESCRIBED HEREIN. ****30 DAY NOTICE WILL BE GIVEN TO THE CITY Or HUNTINGTON BEACH IN THE EVENT OF_CANCELLATION**** NAME AND ADDRESS Or PARTY TO WHOM CERTIFICATC IS.ISSUtU CITY OF HtFNTINGTON BEACH, ITS AGNTS, OFFICERS, AND EMPT,OYEES Oa 2000 MAIN STREET IIUNTINGTON BEACH, CA 92648 n ure Of Ailrto, `!. Title t 1 • fe J. 0 HUNTINGTON BEACH TO FROM: DATE: SUBJECT: CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION Connie Brockway Robert Sangster, October 7, 1993 Dwight's Lease City Clerk Deputy City Attorne j)6 This will confirm that the lease which has now been submitted for consideration of the City Council, and which contains some additional provisions, and corrections, will supersede the prior draft which the Council approved and that prior draft is not to be executed. The old lease is abandoned. E • CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: Tony Moya FROM: Connie Brockway, City Clerk RE: Dwight's Beach Concession DATE: July 13, 1993 There is no Worker's Compensation or liability checked for this insurance for Jack Clapp's Beach Concession. Is that because it is Business Mercantile Insurance? I want to be sure this insurance covers our agreement. I've enclosed a copy of the RCA and Lease Agreement for your reference. You may call me at Ext. 5404. CB:jh Attachments (3) 2742k �4"je CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: Connie Brockway, City Clerk FROM: Gail Hutton, City Attorney DATE: July 2, 1993 SUBJECT: Dwight's Lease Please hold the lease that was authorized for Dwight's pending further review by Council. Please do not have it executed by the Mayor. There are some unresolved issues with this lease that we would like Council to consider, such as whether there should be a minimum rent. Gail Hutton City Attorney cc: Joe Barron, Deputy City Attorney • LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP and JEANETTE R. CLAPP, husband and wife, dba DWIGHT'S BEACH CONCESSION TABLE OF CONTENTS Page 1. DESCRIPTION OF PREMISES . . . . . . . . . . . . 1 2. ORIGINAL TERM . . . . . . . . . . . . . . . . . 1 3. OPTION TO EXTEND . . . . . . . . . . . . . . . . 2 4. TERMS AND CONDITIONS . . . . . . . . . . . . . . 2 5. HOLD OVER . . . . . . . . . . . . . . . . . . . 2 6. RENT . . . . . . . . . . . . . . . . . . . . . . 2 7. GROSS SALES DEFINED . . . . . . . . . . . . . . 3 8. GROSS SALES EXCLUSIONS . . . . . . . . . . . . . 4 9. BOOKS AND RECORDS . . . . . . . . . . . . . . . 4 10. STATEMENT OF GROSS SALES . . . . . . . . . . . . 5 11. PERMITTED USE . . . . . . . . . . . . . . . . . 6 12. PAYMENT OF UTILITY CHARGES . . . . . . . . . . . 6 13. PERSONAL PROPERTY TAXES . . . . . . . . . . . . 7 14. REAL PROPERTY TAXES . . . . . . . . . . . . . . 7 15. MAINTENANCE BY LESSEE . . . . . . . . . . . . . 7 16. MAINTENANCE OF SHOW WINDOW GLASS . . . . . . . . 8 17. ALTERATIONS AND LIENS . . . . . . . . . . . . . 8 18. INSPECTION BY LESSOR . . . . . . . . . . . . . . 9 19. SURRENDER OF PREMISES . . . . . . . . . . . . . 9 20. INSTALLATION AND REMOVAL OF TRADE FIXTURES . . . 9 21. TRADE FIXTURES AS SECURITY FOR LEASE . . . . . . 10 22. UNREMOVED TRADE FIXTURES . . . . . . . . . . . . 11 23. SIGNS . . . ... . . . . . . . . . . . . . . . . 11 24. PARTIAL DESTRUCTION . . . . . . . . . . . . . . 11 25. TOTAL DESTRUCTION . . . . . . . . . . . . . . . 12 26. INSURANCE PROCEEDS . . . . . . . . . . . . . . . 12 27. ABATEMENT OF RENT . . . . . . . . . . . . . . . 13 i • • TABLE OF CONTENTS - Continued Page 28. CONDEMNATION COMPENSATION. . . . . . . . . . . . 13 29. RELOCATION AND ASSISTANCE. . . . . . . . . . . . 14 30. SUBLEASING OR ASSIGNING AS BREACH. . . . . . . . 14 31. ABANDONMENT BY LESSEE . . . . . . . . . . . . . . 15 32. DEFAULT BY LESSEE . . . . . . . . . . . . . . . . 16 33. INSOLVENCY OF LESSEE . . . . . . . . . . . . . . 16 34. CUMULATIVE REMEDIES . . . . . . . . . . . . . . . 16 35. WAIVER OF BREACH . . . . . . . . . . . . . . . . 16 36. FORCE MAJEURE - UNAVOIDABLE DELAYS . . . . 17 37. CARE OF PREMISES - MAINTENANCE DEPOSIT . . . . 17 38. SECURITY DEPOSIT . . . . . . . . . . . . . . . . 18 39. EMERGENCY CLOSING OR CLOSING . . . . . . . . . . 18 40. DELIVERIES OF SUPPLIES . . . . . . . . . . . . . 19 41. EMPLOYEE PARKING . . . . . . . . . . . . . . . . 19 42. NOTICE. . . . . . . . . . . . . . . . . . . . . 19 43. LESSEE'S RIGHT TO RENEGOTIATE. . . . . . . . . . 19 44. INSURANCE HAZARDS . . . . . . . . . . . . . . . . 20 45. WASTE OR NUISANCE . . . . . . . . . . . . . . . . 20 46. COMPLIANCE WITH LAW . . . . . . . . . . . . . . 20 47. CUMULATIVE REMEDIES . . . . . . . . . . . . . . 20 48. BINDING ON HEIRS . . . . . . . . . . . . . . . . 21 49. PARTIAL INVALIDITY . . . . . . . . . . . . . . . 21 50. SOLE AND ONLY AGREEMENT. . . . . . . . . . . . 21 51. TIME OF ESSENCE . . . . . . . . . . . . . . . . 21 52. INDEMNIFICATION/HOLD HARMLESS. . . . . . . . . . 21 53. WORKERS COMPENSATION . . . . . . . . . . . . . . 22 54. INSURANCE . . . . . . . . . . . . . . . . . . . 22 ii • LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, dba DWIGHT'S BEACH CONCESSION THIS AGREEMENT is made and entered into this _(- day of Oi ,(-bt k 1993, by and between THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California (hereinafter referred to as "LESSOR"), and JACK K. CLAPP, and JEANETTE R. CLAPP, husband and wife, (hereinafter referred to as "LESSEE"). WHEREAS, LESSOR owns certain real property (hereinafter referred to as the "PREMISES"), in the City of Huntington Beach, and LESSEE desires to lease the aforesaid premises in the manner set forth below. NOW, THEREFORE, the parties covenant and agree as follows: 1. DESCRIPTION OF PREMISES LESSOR hereby leases to LESSEE that certain real property commonly known and described as DWIGHT'S BEACH CONCESSION, located in the City of Huntington Beach, and as outlined on the attached map marked as Exhibit A. SECTION 2. ORIGINAL TERM This lease shall be for a term of five (5) years commencing at 12:01 A.M. on June 21, 1993 and ending at 12:01 A.M. on June 20, 1998, unless sooner terminated as herein provided. JCB521 1 SECTION 3. OPTION TO EXTEND LESSEE is hereby granted and shall, if not then in default under this lease, have an option to extend the term of this lease for an additional period of three five (5) year extensions by mutual agreement only from the expiration of this lease, exercisable by LESSEE with City Council approval upon no less than six (6) months prior written notice, on the same terms, covenants, and conditions and subject to the same exceptions and reservations contained in this lease. SECTION 4. TERMS AND CONDITIONS LESSOR may upon three (3) days notice in writing to LESSEE for rent and thirty (30) days notice in writing to LESSEE for covenants, -terminate 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. In the event of termination, LESSEE shall be allowed fifteen (15) days after notice within which to cure the failure or default which gave rise to such termination. SECTION 5. HOLD OVER Should LESSEE hold over and continue in possession of said premises after expiration of the terms 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. SECTION 6. RENT LESSEE agrees to pay to LESSOR as rent for the use and occupancy of said premises a sum equal to the following JCB521 2 • 11 percentages of the amount of gross sales as defined in this Article, made each month by LESSEE in, on or from said premises. Sales Volume $1.00 - $100,000 $100,001 - $200,000 $200,001 - plus Percentage Rate 10.5% 12.5% 14.5% 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 one and one-half percent (1%%) per month shall be added on the loth day after any payment hereunder is due, but unpaid. SECTION 7. GROSS SALES DEFINED For the purposes of this Article, the term "gross sales" 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, and 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; JCB521 3 0 • (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 off, or from sources outside, said premises; and (e) Proceeds from the renting of beach equipment of any kind from said premises. SECTION 8. GROSS SALES EXCLUSIONS Notwithstanding the provisions of Section 7 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: (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 9. 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 JCB521 4 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 registers 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 sale made in, or from said premises during such calendar month. SECTION 10. STATEMENT OF GROSS SALES At the time specified in Section 6 of this lease for the payment of the rent specified inthat section, LESSEE shall deliver 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 9 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 JCB521 5 • 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. SECTION 11. PERMITTED USE The premises are let for the purpose of operation of a beach concession for the sale of merchandise, food and 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 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 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. SECTION 12. 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 services, 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. JCB521 6 SECTION 13. 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. SECTION 14. 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. SECTION 15. 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. 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 16 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. JCB521 7 • • SECTION 16. 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 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 (10) percent per annum from the date the costs were incurred by LESSOR to the date they are reimbursed to LESSOR by LESSEE. SECTION 17. 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 such 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 JCB521 8 • • 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. SECTION 18. 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 19. 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. SECTION 20. INSTALLATION AND REMOVAL OF TRADE FIXTURES 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 JCB521 9 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 21 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 21. 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 rights or rights of removal of trade fixtures given LESSEE by the provisions of Section 20 of this lease shall be exercisable only if, at the time of 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 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 the State of California. JCB521 10 • 0 SECTION 22. 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 21 of this lease. SECTION 23. 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 interior or exterior shop 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, any 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 or liability, be destroyed by LESSOR. This lease is expressly contingent upon approval of all signs by both LESSOR and LESSEE. SECTION 24. PARTIAL DESTRUCTION Should said premises of the building on said premises be partially destroyed by any cause not the fault of LESSEE or any JCB521 11 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 25. TOTAL DESTRUCTION' 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, express 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 (b) Terminate this lease by giving LESSEE written notice of such termination. SECTION 26. 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, except LESSEE shall be compensated for loss to leasehold improvements and fixtures beyond any and all insurance proceeds including business interruption insurance which would ordinarily flow to the benefit of LESSEE. JCB521 12 SECTION 27. ABATEMENT OF RENT Should LESSOR elect under Section 25 of this lease or be required under Section 24 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 24 of this lease shall be not abated for the time LESSEE is prevented from using the whole of said premises. SECTION 28. CONDEMNATION COMPENSATION All compensation.and.damages awarded for a total taking of the PREMISES shall belong to and be the sole property of LESSOR, and LESSEE shall have no claim to any amount or part of any award except, however, that LESSEE shall be entitled to receive the portion of any award attributable to the taking of those leasehold improvements and fixtures that LESSEE has the right to remove under this lease but does not remove from the PREMISES; or when LESSEE does remove the fixtures or improvements, a reasonable amount for removal and relocation expenses, provided that amount does not exceed the market value of the improvements and fixtures. LESSEE hereby irrevocably assigns and transfers to LESSOR any right LESSEE may have to compensation or damages to which LESSEE may become entitled. This Lease shall have no condemnation value to LESSEE. JCB521 13 SECTION 29. RELOCATION AND ASSISTANCE In the event this lease is terminated for any reason by LESSOR, LESSEE shall not be entitled to any relocation rights or benefits and, except those itemized in Section 28, expressly waives such benefits and rights under City, State or Federal Relocation Assistance Plans. SECTION 30. SUBLEASING OR ASSIGNING AS BREACH 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, terminate this 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 JCB521 14 exercise or refuse such right in writing within thirty (30) days of notice by LESSEE. Such right shall not apply, however, to assignments, transfers,.or sublettings to immediate family members of LESSEE, a family trust, or to any corporate entity of which LESSEE, or any of LESSEE's immediate family, are sole stockholders. SECTION 31. 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 right and remedies under this lease, including the right to recover the rent.specified in this lease as it becomes due under this lease; (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 JCB521 15 amount of rental loss that LESSEE proves could be reasonably avoided; and (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 32. 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 35 of this lease, re-enter 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 33. 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 re-enter and regain possession of said premises. SECTION 34. 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 35. 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 JCB521 16 • • or a waiver of any subsequent breach by LESSEE either of the same or another provision of this lease. SECTION 36. 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. SECTION 37. CARE OF PREMISES - MAINTENANCE 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 its own expense from the leased premises within forty-eight (48) hours of notice thereof. (c) LESSEE shall not obstruct, cause or permit any obstruction surrounding the premises or any part thereof JCB521 17 in any manner whatsoever. (d) LESSEE shall comply with all written notice served by LESSOR with regard to the care and maintenance of the premises. 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 set forth in the notice. Upon receipt of such sum, LESSOR shall then proceed to cause the required work to be performed. SECTION 38. SECURITY DEPOSIT 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 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. SECTION 39. EMERGENCY CLOSING OR CLOSING TO EFFECT REPAIR/REMODELING THE PREMISES. LESSOR may close the beach without liability therefore 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. JCB521 18 SECTION 40. DELIVERIES OF SUPPLIES. LESSOR shall establish the days and times deliveries of supplies may be made and advise LESSEE in writing thereof. SECTION 41. EMPLOYEE PARKING. LESSOR shall establish the days and times when LESSEE's 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. SECTION 42. NOTICE. Any written notice, given under the terms of this agreement, shall be either delivered personally or mailed, certified mail, postage prepaid, addressed to the party concerned, as follows: CITY OF HUNTINGTON BEACH: LESSEE: Mr. Robert Franz Mr. Jack K. Clapp Deputy City Administrator Dwight's City of Huntington Beach 1210 Main Street 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 Huntington Beach, CA 92648 SECTION 43. 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. The parties agree that - each shall deal with the other in good faith. JCB521 19 SECTION 44. 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 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. SECTION 45. 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 def.ined 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. SECTION 46. 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 statute, JCB521 20 • ordinance, regulation, or requirement shall be conclusive as between LESSOR and LESSEE and shall be ground for termination of this lease by LESSOR. SECTION 47. 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. SECTION 4,8.., 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. SECTION 49. 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 agreeents or representations respecting said premises or their leasing by LESSOR to LESSEE not expressly set forth in this instrument are null and void. SECTION 50. TIME OF ESSENCE. Time is expressly declared to be the essence of this lease. SECTION 51. INDEMNIFICATION, DEFENSE, HOLD HARMLESS LESSEE shall indemnify and save and hold harmless LESSOR, its officers and employees, from any and all liability, including any claim of liability and any and all losses or costs arising out of JCB521 21 the negligent performance of this agreement by LESSEE, its officers or employees or from any willful misconduct of LESSEE, its officers or employees while engaged in the performance of this agreement. SECTION 52. WORKERS' COMPENSATION 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 Division 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 any liability under any of said acts which may be incurred by reason of any work to be 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 0 disease, policy limit. SECTION 53. 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 policies covering the PROJECT: JCB521 22 C� • (a) 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 PROJECT, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of $1,000,000 per occurrence and in the annual aggregate. Said policy shall name LESSOR, its officers, and employees as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the PROJECT shall be deemed excess coverage and that LESSEE'S insurance shall be primary. (b) Fire Insurance. In order that the business of LESSEE and the gross sales of 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 the premises against damage or destruction by fire, theft, or the elements. JCB521 23 • • 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 which any and all losses are made payable to LESSOR. The face amount of the policy shall be for ninety (90) percent of the replacement value of the premises, and be in a form acceptable to the City Attorney. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first above written. LESSEE: CITY OF HUNTINGTON BEACH JACK K. CLAPP and JEANETTE R. a municipal corporation of %AW, Xus}:)a4d aF4,*fe the State -of California LA r jEANETTE R. .. Mayor ATTEST: City Clerk APPROVED AS TO FORM: REVIEWED AND APPROVED: I City Administrator D .a�,i City Attorney PPROVED: epLKy_,(2'i)Ey Administrator JCB521 24 EXHIBIT " , AKA 201 Pacific Coast Highway, Huntington Beach, CA 92648 BEACH NUMBERING SYSTEM MAIN ST. LAKE AVE. HUNTINGTON AVE. Q PIERSIDE VILLAGE p HIGHWAY PACIFIC COAST ---� G 3 MAXWI E L'S GI G2 jANBC3 BR5 BCBR3 BR4 BC5 �I BCI gC HDOS gR2 BC3 v SERVICE DWIGHT'S VIC'S L3 L5 LTF9 LI • BEACH BLVD. G4 STATE BR6 CT PARK - BEACH 2A K'S ROADZACK'S HUT TOO 11 ... 13 . • 15 LEGEND: BC - BEACH CONCESSION BR -BEACH RESTROOM G - GATE PD - POLICE L -LIFEGUARD TOWER HDOS- HARBORS 81 BEACHES HDOS. REQUEA FOR CITY COUNADACTION Date May 17, 1993 Submitted to: HONORABLE MAYOR AND CITY COUN Submitted by: MICHAEL T. UBERUAGA, City Administrator VA Prepared by: ROBERT J. FRANZ, Deputy City Administrator CI UNCIL Subject: DWIGHT'S BEACH CONCESSION Z�19 ._. 9_.-- s/i �/93 • 4/'7/93 CIT CLER Consistent with Council Policy? [�Q Yes (] New Policy or Exc Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: V0Q& STATEMENT OF ISSUE: The renewal of a beach concession lease between Jack K. and/or Jeanette R. Clapp, H/W, dba "Dwight's" as Lessee and the City of Huntington Beach as Lessor. A new term of five (5) years is proposed, with three five (5) year options if mutually agreed by the concessionaire and the City Council. Step Increase Rents as follows: Annual Sales Volume $1 — $100,000 $100,000 — $200,000 $200,000 — Plus Percentage Rate 10.5% 12.5% 14.5% RECOMMENDATION: Approve the lease with Jack K. and/or Jeanette R. Clapp, H/W, dba "Dwight's". ANALYSIS: The Clapp family has been associated with city concessions on or near the beach since 1934. On April 1, 1968, the City entered into a ten (10) year lease agreement with optional extensions with Mr. Clapp which ended in 1988. Since 1988 Mr. Clapp has been operating on a month to month basis with a flat 12.5% fee to the City. A longer term agreement has not been proposed since 1988 due to the uncertainty about development plans in this area. Current plans to complete the Pier Plaza area include the need to continue this concession operation in its current location. The proposed step increase in the rents will allow the City a greater income return and preclude a new contract to cover price increases. This lease, with renewed terms which are in line with the current concession lease market, will continue proven good service to the beach public and maximize profitability for the City. This lease will further enable the concessionaire to continue improving the present City owned facility. FUNDING SOURCE: None. ALTERNATE ACTION: Continue the lease for a period of time — month to month. ATTACHMENTS: Proposed new lease agreement. 0099U Plo 5/85 1\ LE TABLE OF CONTENTS Page 1. DESCRIPTION OF PREMISES . . . . . . . . . . . . 1 2. ORIGINAL TERM . . . . . . . . . . . . . . . . . 1 3. OPTION TO EXTEND . . . . . . . . . . . . . . . . 1 4. TERMS AND CONDITIONS . . . . . . . . . . . . . . 2 5. HOLD OVER . . . . . . . . . . . . . . . . . . . 2 6. RENT . . . . . . . . . . . . . . . . . . . . . . 2 7. GROSS SALES DEFINED . . . . . . . . . . . . . . 3 8. GROSS SALES EXCLUSIONS . . . . . . . . . . . . . 4 9. BOOKS AND RECORDS . . . . . . . . . . . . . . . 4 1 10. STATEMENT OF GROSS SALES . . . . . . . . . . . . 5 11. PERMITTED USE . . . . . . . . . . . . . . . . . 6 12. PAYMENT OF UTILITY CHARGES . . . . . . . . . . . 6 13. PERSONAL PROPERTY TAXES . . . . . . . . . . . . 7 14. REAL PROPERTY TAXES . . . . . . . . . . . . . . 7 15. MAINTENANCE BY LESSEE . . . . . . . . . . . . . 7 16. MAINTENANCE OF SHOW WINDOW GLASS . . . . . . . . 8 17. ALTERATIONS AND LIENS . . . . . . . . . . . . . 8 18. INSPECTION BY LESSOR . . . . . . . . . . . . . . 9 19. SURRENDER OF PREMISES . . . . . . . . . . . . . 9 20. INSTALLATION AND REMOVAL OF TRADE FIXTURES . . . 10 21. TRADE FIXTURES AS SECURITY FOR LEASE . . . . . . 10 22. UNREMOVED TRADE FIXTURES . . . . . . . . . . . . 11 23. SIGNS . . . . . . . . . . . . . . . . . . . . . 11 TABLE OF CONTENTS Page 2 Page 24. PARTIAL DESTRUCTION . . . . . . . . . . . . . . 12 25. TOTAL DESTRUCTION . . . . . . . . . . . . . . . 12 26. INSURANCE PROCEEDS . . . . . . . . . . . . . . . 13 27. "ABATEMENT OF RENT . . . . . . . . . . . . . . . 13 28. TOTAL CONDEMNATION . . . . . . . . . . . . . . . 13 29. TERMINATION OPTION FOR PARTIAL CONDEMNATION 14 30. PARTIAL CONDEMNATION WITHOUT TERMINATION . . . . 14 31. CONDEMNATION AWARD . . . . . . . . . . . . . . . 15 32. ARBITRATION OF CONDEMNATION AWARD . . . . . . . 16 33. RELOCATION AND ASSISTANCE . . . . . . . . . . . 16 34. SUBLEASING OR ASSIGNING AS BREACH . . . . . . . 17 35. ABANDONMENT BY LESSEE . . . . . . . . . . . . . 18 36. DEFAULT BY LESSEE . . . . . . . . . . . . . . . 19 37. INSOLVENCY OF LESSEE . . . . . . . . . . . . . . 19 38. CUMULATIVE REMEDIES . . . . . . . . . . . . . . 19 39. WAIVER OF BREACH . . . . . . . . . . . . . . . . 19 40. FORCE MAJEURE - UNAVOIDABLE DELAYS . . . . . . . 20 41. CARE OF PREMISES - MAINTENANCE DEPOSIT . . . . . 20 42. INDEMNIFICATION, DEFENSE, HOLD HARMLESS . . . . 25 43. WORKERS' COMPENSATION . . . . . . . . . . . . . 25 44. INSURANCE . . . . . . . . . . . . . . . . . . . 26 0 • LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, dba DWIGHT'S BEACH CONCESSION THIS AGREEMENT is made and entered into this 21st day of June , 1993, by and between THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California (hereinafter referred to as "LESSOR"), and JACK K. CLAPP, and JEANETTE R. CLAPP, husband and wife, (hereinafter referred to as "LESSEE"). WHEREAS, LESSOR owns certain real property (hereinafter referred to as the "PREMISES"), in the City of Huntington Beach, and LESSEE desires to lease the aforesaid premises in the manner set forth below. NOW, THEREFORE, the parties covenant and agree as follows: 1. DESCRIPTION OF PREMISES LESSOR hereby leases to LESSEE that certain real property commonly known and described as DWIGHT'S BEACH CONCESSION. SECTION 2. ORIGINAL TERM This lease shall be for a term of five (5) years commencing at 12:01 A.M. on June 21, 1993 and ending at 12:01 A.M. on June 20, 1998, unless sooner terminated as herein provided. SECTION 3. OPTION TO EXTEND LESSEE is hereby granted and shall, if not then in default under this lease, have an option to extend the term of • • this lease for an additional period of three five (5) year extensions by mutual agreement only from the expiration of this lease, exercisable by LESSEE with City Council approval upon no less than six (6) months prior written notice, on the same terms, covenants, and conditions and subject to the same exceptions and reservations contained in this lease. SECTION 4. TERMS AND CONDITIONS LESSOR may upon three (3) days notice in writing to LESSEE for rent and thirty (30) days notice in writing to LESSEE for covenants, terminate 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. In the event of termination, LESSEE shall be allowed fifteen (15) days after notice within which to cure the failure or default which gave rise to such termination. SECTION 5. HOLD OVER Should LESSEE hold over and continue in possession of said premises after expiration of the terms 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. SECTION 6. RENT LESSEE agrees to pay to LESSOR as rent for the use and occupancy of said premises a sum equal to the following percentages of the amount of gross sales as defined in this Article, made each month by LESSEE in, on or from said premises. -2- • • Sales Volume $1.00 - $100,000 $100,001 - $200,000 $200,001 - plus Percentage Rate 10.5% 12.5% 14.5% 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 7. GROSS SALES DEFINED For the purposes of this Article, the term "gross sales", 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, and 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; -3- • C, (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 off, or from sources outside, said premises; and (e) Proceeds from the renting of beach equipment of any kind from said premises. SECTION 8. GROSS SALES EXCLUSIONS Notwithstanding the provisions of Section 7 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: (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 9. 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 - 4 - 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 registers 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 sale made in, or from said premises during such calendar month. SECTION 10. STATEMENT OF GROSS SALES At the time specified in Section 6 of this lease for the payment of the rent specified in that section, LESSEE shall deliver 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 9 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 - 5 - • • 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. SECTION 11. PERMITTED USE The premises are let for the purpose of operation of a beach concession for the sale of merchandise, food and 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 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 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. SECTION 12. 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 services, 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 13. 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. SECTION 14. 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. SECTION 15. 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. 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 16 of this lease, LESSEE shall at his own cost and expense keep and maintain all portions of said premises as well as all MM 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 16. 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 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 (10) percent per annum from the date the costs were incurred by LESSOR to the date they are reimbursed to LESSOR by LESSEE. SECTION 17. 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 such 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. SECTION 18. 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 19. 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. - 9 - • • SECTION 20. INSTALLATION AND REMOVAL OF TRADE FIXTURES 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 21 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 21. 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 rights or rights of removal of trade fixtures given LESSEE by the provisions of Section 20 of this lease shall be exercisable only if, at the time of 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 =tIM • • security interest created by this section and this security interest will 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 the State of California. SECTION 22. 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 21 of this lease. SECTION 23. 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 interior or exterior shop 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, any 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 or liability, be destroyed by LESSOR. This lease is expressly contingent upon approval of all signs by both LESSOR and LESSEE. SECTION 24. PARTIAL DESTRUCTION Should said premises of 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 25. TOTAL DESTRUCTION 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, express 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 - 12 - (b) Terminate this lease by giving LESSEE written notice of such termination. SECTION 26. 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 27. ABATEMENT OF RENT Should LESSOR elect under Section 25 of this lease or be required under Section 24 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 24 of this lease shall be not abated for the time LESSEE is prevented from using the whole of said premises. SECTION 28. 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 quasi -public agency or entity, this lease shall terminate as of - 13 - • • 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 31 of this lease, under this lease. SECTION 29. 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 30. PARTIAL CONDEMNATION WITHOUT TERMINATION Should LESSEE fail to exercise the option described in Section 29 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 29 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 a.m. of the day, herein called the "date of taking", actual physical - 14 - 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, will remodel/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 31. CONDEMNATION AWARD Should, during the term of this lease or any renewal 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 and (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 premises taken by eminent domain, and (3) whatever other - 15 - compensation and or damages which may be used and customary to LESSEE under the circumstances. SECTION 32. 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 31 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 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 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. SECTION 33. RELOCATION AND ASSISTANCE In the event his lease is terminated for any reason by LESSOR, LESSEE shall not be entitled to any relocation rights or =tom benefits and expressly waives such benefits and rights under City, State or Federal Relocation Assistance Plans. SECTION 34. SUBLEASING OR ASSIGNING AS BREACH 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, terminate this 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 of notice by LESSEE. Such right shall not apply, however, to - 17 - • • assignments, transfers, or sublettings to immediate family members of LESSEE, a family trust, or to any corporate entity of which LESSEE, or any of LESSEE's immediate family, are sole stockholders. SECTION 35. 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 right and remedies under this lease, including the right to recover the rent specified in this lease as it becomes due under this lease; (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 - 18 - • amount of rental loss that LESSEE proves could be reasonably avoided; and (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 36. 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 35 of this lease, re-enter 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 37. 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 re-enter and regain possession of said premises. SECTION 38. 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 39. WAIVER OF BREACH The waiver by LESSOR of any breach by LESSEE of any of the - 19 - L� U provisions of this lease shall not constitute a continuing waiver or a waiver of any subsequent breach by LESSEE either of the same or another provision of this lease. SECTION 40. 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. SECTION 41. CARE OF PREMISES - MAINTENANCE 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 its own expense from the leased premises within forty-eight (48) hours of notice thereof. - 20 - (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 notice served by LESSOR with regard to the care and maintenance of the premises. 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 set forth 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 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. - 21 - (f) Emergency closing or closing to effect repair/remodeling the premises.. LESSOR may close the beach without liability therefore 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. (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's 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 the party concerned, as follows: CITY OF HUNTINGTON BEACH: LESSEE: Mr. Robert Franz Deputy City Administrator City of Huntington Beach 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 Mr. Jack K. Clapp Dwight's 1210 Main Street 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 - 22 - • E 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 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 - 23 - 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 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 - 24 - 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 agreeents 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. SECTION 42. INDEMNIFICATION, DEFENSE, HOLD HARMLESS LESSEE shall indemnify and save and hold harmless LESSOR, its officers and employees, from any and all liability, including any claim of liability and any and all losses or costs arising out of the negligent performance of this agreement by LESSEE, its officers or employees or from any willful misconduct of LESSEE, its officers or employees while engaged in the performance of this agreement. SECTION 43. WORKERS' COMPENSATION 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 Division 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, - 25 - • • 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 any liability under any of said acts which may be incurred by reason of any work to be 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 44. 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 policies covering the PROJECT: (a) 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 PROJECT, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket - 26 - contractual liability, of $1,000,000 per occurrence and in the annual aggregate. Said policy shall name LESSOR, its officers, and employees as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the PROJECT shall be deemed excess coverage and that LESSEE'S insurance shall be primary. (REST OF PAGE BLANK) - 27 - IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first above written. LESSEE: JACK K. CLAPP and JEANETTE R. C s an Wife ACK K.t-fA1.40 JEANETTE R. CLAPP ATTEST: City Clerk APPROVED:.EVIEWED AND A/S7-1 CITY OF HUNTINGTON BEACH a municipal corporation of the State of California Mayor APPROVED AS TO FORM: City' Atto/ne ��ff T INITI�ED WD Dy - 28 - nistra-tor AMENDMENT TO THE LEASE AGREEMENT FOR BEACH CONCESSION - - "DWIGHT'S" THIS AGREEMENT is made and entered into this to t/,-` day of , 1989, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California, hereinafter referred to as "CITY," and JACK K. CLAPP AND JEANETTE R. CLAPP, hereinafter collectively referred to as "LESSEE." WHEREAS, this Agreement is an amendment to the Lease Agreement entered into by the above -mentioned parties on April 1, 1968 and to all amendments thereto entered into prior to the date of execution hereof, said Lease Agreement and amendments hereinafter referred to as "LEASE;" and The terms of this amendment are to supersede those of the LEASE, and any provisions inconsistent with the terms of this amendment shall be interpreted so as to bring them into accord with the terms of this amendment. All other terms of the LEASE shall remain in full force and effect; and This amendment pertains to the terms of the LEASE and specifically to the extension thereof. NOW, THEREFORE, the LEASE is amended as follows: 1. EXTENSION OF TERM The LEASE, and all the terms and conditions thereof is hereby extended to and including September 30, 1989. 2. MONTH TO MONTH TENANCY Commencing October 1, 1989, and continuing thereafter until terminated as herein provided, the tenancy contemplated by the LEASE shall be a month -to -month tenancy, which may be terminated by either party upon thirty (30) days advance written notice. -1- WARNING: READ THE FOLLOWING PARAGRAPH BEFORE EXECUTING THIS LEASE AMENDMENT 3. 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 CITY expressly for redevelopment purposes. IN CONSIDERATION OF THIS EXTENSION OF THE LEASE. LESSEE HEREBY ACKNOWLEDGES THAT NO BENEFITS ARE AVAILABLE AND EXPRESSLY WAIVES ANY CLAIM TO RELOCATION BENEFITS PURSUANT TO CIVIL CODE § 3513. IN WITNESS WHEREOF the parties hereto have executed this agreement on the month and year first above written at Huntington Beach, California. :. / ATT City Clerk RE ND R D: City Administrator rf CITY HUNTINGT BEA , a mun' ipal co rati Mayor APPRO/VFD AS TO M: 4"�R ,11r City Attorney PbA- Ira