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HomeMy WebLinkAboutJACKS BEACH CONCESSIONS - 1994-11-07(6) June 6, 2005 - Council/Agency Agenda - Page 6 D-1. (Redevelopment Agency) Cancel Public Hearing to be Rescheduled and Renoticed to a Date Uncertain - Continue the Evaluation on the Progress of the Five Year Implementation Plan (2002-2007) for the Southeast Coastal Redevelopment Project Area (410.05) Communication submitted by the Acting Deputy Executive Director transmitting the following Statement of Issue: The evaluation on the progress of the Five Year Implementation Plan for the Southeast Coastal Project area needs to be rescheduled. As this meeting was duly noticed as the public hearing date for the evaluation, the Redevelopment Agency will move to hold the public hearing to a later date and renotice the hearing. Recommended Action: Motion to: 1. Not open the public hearing; and 2. Reschedule and renotice the hearing on the evaluation of the Five Year Implementation Plan for the Southeast Coastal Project Area. Mayor Hardy announced cancellation with rescheduling to a date uncertain E-1. (City Council/Redevelopment Agency) Minutes Continued from May 16, 2005 Meeting (120.65) - Approve and adopt the minutes of the City Council/Redevelopment Agency Regular Meetings of April 18, 2005 and Adjourned Regular Meetings of April 25, 2005 as written and on file in the Office of the City Clerk. Submitted by the City Clerk. Approved 6 — 0 — 1 (Cook absent) ilr*2. 1 a ac Tcession at t f Exeicw ie Ck�cu errt i Advi iarf by l y Attorn&y (600.35) — Approve the second of three available five-year extensions of the City's lease with Dwight's and Jack's, Inc. for Jack's Beach Concession and authorize the Mayor and City Clerk to execute any necessary related documents if advised by the City Attorney. Submitted by the Acting Economic Development Director and Community Services Director. Funding Source: Not applicable. Councilmember Bohr inquired about lease details. Acting Assistant City Administrator Robert Beardsley introduced Economic Development Consultant Mike Hennessey, who responded. Approved 6 — 0 --1 (Cook absent) ,O� A)6--IJ � AS .v e. N�-cc-ss/ _ 1� t ti� c t= CS Council/Agency Meeting Held: oZ010 Deferred/Continued to: ❑ Denied Council Meeting Date: December 20, 2010 Sign Department ID Number: ED 10-056 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Administrator PREPARED BY: Stanley Smalewitz, Director of Economic Development Jim Engle, Director of Corrrmw7flty Services SUBJECT: Approve the third and final lease extension with Dwight's and Jack's, Inc. for Jack's Beach Concession at Huntington City Beach Statement of Issue: The City Council is asked to approve the final five year option of three available five-year extensions of a lease agreement with Dwight's and Jack's Inc. for the operation of Jack's Beach Concession. Financial Impact: N/A Recommended Action: Motion to: Approve the third and final five-year extension of the lease agreement with Dwight's and Jack's Inc. for the operation of Jack's Beach Concession, retro-actively from January 1, 2010, to December 31, 2014. Alternative Action(s): Do not approve the concession lease extension. HB -163- Item 9. - 1 REQUEST FOR COUNCIL ACTION MEETING DATE: 12/20/2010 DEPARTMENT ID NUMBER: ED 10-56 Analysis: The City's 1994 Lease Agreement with Dwight's and Jack's, Inc. for the operation of Jack's Beach Concession, contained an option for the lessee to extend the term of the initial five- year lease for an additional period of three, five-year terms. The first extension was exercised in 1999 and the second extension was approved in 2005; both of which have expired. A third and final extension has been requested, and if approved, the City Council would extend the term of the lease retroactively from January 1, 2010, to December 31, 2014. The Clapp family has operated both Jack's Beach Concession and nearby Dwight's Concession in Huntington Beach for over fifty years. Jack's Beach Concession carries a variety of food items and beach rental equipment. The Clapp's have never been in default of their lease and have maintained their facility in a satisfactory manner. Jack's Beach Concession has paid an average of $55,000 per year ini rent to the City over the past two years. During 2010, an audit was performed by the City's Finance Department which covered the period from 2007-2009. During this audit, items were noted on business processes that needed correction. During a follow up review, which covered the period from June 1, 2010, through September 30, 2010, it was determined that Jack's had corrected their business processes and there were no exceptions noted. Jack's now complies with the requirements set forth in the Lease Agreement with the City. Due to the length of the time which was needed in order to complete the audit and follow up review process, City staff is requesting that City Council retro-actively extend the term of the lease from January 1, 2010, to December 31, 2014. Environmental Status: N/A Strategic Plan Goal: Maintain financial viability and our reserves Attachment(s): Item 9. - 2 HB -164- ATTACHMENT HB -165- Item 9. - 3 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, dba JACK'S BEACH CONCESSION 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 3 9. BOOKS AND RECORDS 4 10. STATEMENT OF GROSS SALES 4 11. PERMITTED USE 5 12. PAYMENT OF UTILITY CHARGES 5 13. PERSONAL PROPERTY TAXES 6 14. REAL PROPERTY TAXES 6 15. MAINTENANCE BY LESSEE 6 16. MAINTENANCE OF SHOW WINDOW GLASS 7 17. ALTERATIONS AND LIENS 7 18. INSPECTION BY LESSOR 8 19. SURRENDER OF PREMISES 8 20, INSTALLATION AND REMOVAL OF TRADE FIXTURES 8 21. TRADE FIXTURES AS SECURITY FOR LEASE 9 22. UNREMOVED TRADE FIXTURES 9 23. SIGNS 9 24. PARTIAL DESTRUCTION 10 25. TOTAL DESTRUCTION 10 26. INSURANCE PROCEEDS 11 27. ABATEMENT OF RENT 11 28. CONDEMNATION COMPENSATION 11 29. RELOCATION AND ASSISTANCE 12 30. SUBLEASING OR ASSIGNING AS BREACH 12 - -- MDOINMENT-13Y-LESSEE­�13 32. DEFAULT BY LESSEE 14 33. INSOLVENCY OF LESSEE 14 34. CUMULATIVE REMEDIES 14 35. WAIVER OF BREACH 15 36. FORCE MAJEURE - UNAVOIDABLE DELAYS 15 37. CARE OF PREMISES - MAINTENANCE DEPOSIT 15 38. SECURITY DEPOSIT 16 p/9/8/94 Item 9. - 4 Ng -166- TABLE OF CONTENTS- Continued Page 39. EMERGENCY CLOSING OR CLOSING 16 40. DELIVERIES OF SUPPLIES 16 41. EMPLOYEE PARKING 17 42. NOTICE 17 43. LESSEE'S RIGHT TO RENEGOTIATE 17 44. INSURANCE HAZARDS 18 45. WASTE OR NUISANCE 18 46. COMPLIANCE WITH LAW 18 47:-BINDING ON HEIRS 19 49. PARTIAL INVALIDITY 19 49. SOLE AND ONLY AGREEMENT 19 50. TIME OF ESSENCE 19 51. INDEMNIFICATION/HOLD HARMLESS 19 52. WORKERS COMPENSATION 20 53. INSURANCE 20 6/clapp/9/8194 HB -167- Item 9. - 5 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, dba JACK'S BEACH CONCESSION THIS AGREEMENT is made and entered into this 0 day o1994, 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 JACK'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 January 1, 1995 and ending at 12:01 A.M. on December 31, 1999, 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, 1 6/clapp/9/26/94 Item 9. - 6 HB -16 - ice.. Y 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. Sales Volume Percentage Rate $1.00 - $100,000 10.5% $100,001_-$200,000 12 F1 -- $200,001 - plus 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 2 6/clapp/9/8/94 Item 9.-7 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 10th 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; (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 3 6/clapp/9/8/94 Item 9. - 8 Ng -170- 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 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. 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 4 6klapp/9/M4 Item 9.-9 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 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 rem onabl�and in ac'cnrdance w;th_the_best irater��ts 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 5 6/dapp/9/8/94 Item 9.-10 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 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 6 6/clapp/9/8/94 item 9.-11 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 -ate 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 6/clapp/9/8/94 Item 9. - 12 Ng -174- 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 premiss 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 may, in his sole discretion, deem advisable. Any and 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. 8 6/clapp/918194 Item 9.-13 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. 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, 9 6/clapp/9/8/94 Item 9. - 14 HB -176- 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 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: 10 6/cfapp/9/8/94 ....:. ...... . Item 9.-15 (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. 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 11 6/clapp/9/8/94 Item 9. - 16 HB -178- 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 voltre to LESSEE. 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 andrights 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 LESSEFs agents, servants, and employees, to occupy said premises or any part thereof without the prior written consent of LESSOR. A 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, 12 6/clapp/9/8/94 Item 9.-17 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 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; 13 6/ctapp/9094 Item 9. - 18 HB -180- (3) The worth at the time of award of the amount by which the unpaid rent for the balance of the term of this lease after the time of award exceeds the amount of rental loss that LESSEE proves could be reasonably avoided; and (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 provided in this lease. 14 6/clapp/9/8/94 Item 9.-19 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 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 in any manner whatsoever. is 6/clapp/9/8/94 Item 9. - 20 HB -182- (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, SECTION 40. DELIVERIES OF SUPPLIES. LESSOR shall establish the days and times deliveries of supplies may be made and advise LESSEE in writing thereof. 16 6/clapp/9/8/94 Item 9.-21 SECTION 41. EMPLOYEE PARKING. LESSOR shall establish the days and times when LESSEITs 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 Mr. Robert Franz Deputy City Administrator City of Huntington Beach 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 LESSEE: Mr. Jack K. Clapp JACK'S 1210 Main Street 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. 17 6/clapp/918/94 Item 9. - 22 HB -184- r-. 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 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. 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 • • •• _•_ ■ • _■ .• -r■u-■ -■ . ■> a -• �• • statute, ordinance, regulation, or requirement shall be conclusive as between LESSOR and LESSEE and shall be ground for termination of this lease by LESSOR. 18 6lclapp/918/94 Item 9. - 23 l 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 48. 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 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. 19 61dapp/9/8/94 Item 9. - 24 HB -186- 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 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: (a) General Liability Insurance. A policy of general public liability insurance, including motor vehicle coverage. Said policy shall indemnify LESSEE, its • - •'I 1• 11• • - j 1 i• � i 1 I" ••^ • 1' • • 1 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. 20 6/clapp/9/8/94 Item 9. - 25 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. 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 21 61dapp/M194 Item 9. - 26 Ng -188- (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, A municipal JACK K. CLAPP and JEANETTE R. CLAPP, a corporation of the State of California ATTE City Clerk Mayor APPROVED AS TO FORM: .7i W City Attorney -13--7 O vb-G. w 6/clapp/g/8/94 22 HB -1 89- Item 9. - 27 CD B EXHIBIT A CITY OF HUNTING°TON BEACH IV co BEACH NUMBERING SYSTEM F'RST Sl Ir 1p E IFµ-, }iUNTI w 4 BR4 DC5 Fo BCI g DwlG11T'S E RAAOZACK V C' S L7 L9 tf 13 L6 � l LI LEGE U: IZ MAIPY N S7 LAKE H AVE, Q PIERSIDE VILLAGER COAST PACIFIC MAx��•s G I Gz wInc BR BC HOQS BR2 BC3 h PIER L3 PACIric MEW NG70N AVE. G3 s s`� — 2l3� HIGI{ •S BEACH IiUT BEACH BLVO. ST'ATI BR6 BC7 PARk zncx's • T00 15 8C - 8 ACH CONCESSION BR- BEACH. RESTROOM G - GA E PD - P LICE L-LIF GUARD TOWER HDOS-HARBORS 8� BEACHES HDQS. Ln HB -191- Item 9. - 29 Council/Agency Meeting Held: O.S- Deferred/Continued to: Approved El Conditionally Approved ❑ Denied u17 Ci ler s Slgna e Council Meeting Date: 6/6/2005 Department ID Number: ED 05-10 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYO TY COUNCIL MEMB RS SUBMITTED BY: PENELOPE CULBRET - FT, CITY ADMINIST TOR PREPARED BY: ROBERT F. BET1NG DIRECTOR OF ECONOMIC DEVELOPMEN A 7YF ' JIM B. ENGLE, DIRECTOR OF COMMUNITY SERVI SUBJECT: APPROVE EXTENSION OF LEASE FOR JACK'S BEA CONCESSION Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: The City Council is asked to approve the second of three available five-year extensions of a lease agreement with Dwight's and Jack's, Inc. for the operation of Jack's Beach Concession at Huntington City Beach. Fundinq Source: NIA Recommended Action: Approve the second of three available five-year extensions of the City's lease with Dwight's and Jack's, Inc. for Jack's Beach Concession and authorize the Mayor and City Clerk to execute any necessary related documents if advised by the City Attorney. Alternative Action(s): Do not approve the concession lease extension. Analysis: The City's 1994 lease agreement with Dwight's and Jack's, Inc. for the operation of Jack's Beach Concession contains an option for the lessee to extend the term of the initial five-year lease for an additional period of three, five-year terms. The first extension was exercised in 1999 and has already expired. A second extension was requested by the lessee, which if approved by the Council would, extend the term of the lease retroactively from January 1, 2005 to December 31, 2009. The Clapp family has operated both Jack's Beach Concession and nearby Dwight's Concession at Huntington City Beach for over forty-five years. Open daily during the summer and on weekends in the winter, Jack's Beach Concession carries a variety of food items and beach rental equipment. The Clapp s have never been in default of their lease and have maintained their facility in a satisfactory manner. Jack's Beach Concession grosses an average of $183,175 per year and pays approximately $21,084 per year in rent to the City. (These figures are the average revenue and rent for the three years prior to commencement of the south beach improvement project.) 0 REQUEST FOR ACTION MEETING DATE: 6I6I2005 DEPARTMENT ID NUMBER:ED 05-10 This concession lease extension was discussed at the Council's Economic Development Committee (EDC) meeting on February 14, 2005, where staff was directed to bring the matter to the full Council for consideration. Environmental Status: NIA Attachment(s): G:1Steve\Reai Estate\Concessions\Jacks\RCA - Jacks Extension 6-6-05.doc .2- 5/1612005 5:50 PM 0 is Site Map ATTACHMENT #1 0 0 Lease Agreement for Jack's Concession ATTACHMENT #2 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, dba JACK'S BEACH CONCESSION TABLE OF CONTENTS Pape 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 3 9. BOOKS AND RECORDS 4 10. STATEMENT OF GROSS SALES 4 11. PERMITTED USE 5 12. PAYMENT OF UTILITY CHARGES 5 13. PERSONAL PROPERTY TAKES 6 14. REAL PROPERTY TAXES 6 15. MAINTENANCE BY LESSEE 6 16. MAINTENANCE OF SHOW WINDOW GLASS 7 17. ALTERATIONS AND LIENS 7 18. INSPECTION BY LESSOR 8 19_ SURRENDER OF PREMISES 8 20. INSTALLATION AND REMOVAL OF TRADE FIXTURES 8 21. TRADE FIXTURES AS SECURITY FOR LEASE 9 22. UNREMOVED TRADE FIXTURES 9 23. SIGNS 9 24. PARTIAL DESTRUCTION 10 25. TOTAL DESTRUCTION 10 26. INSURANCE PROCEEDS 11 27. ABATEMENT OF RENT 11 28. CONDEMNATION COMPENSATION 11 29. RELOCATION AND ASSISTANCE 12 30. SUBLEASING OR ASSIGNING AS BREACH 12 31. ABANDONMENT BY LESSEE 13 32. DEFAULT BY LESSEE 14 33. INSOLVENCY OF LESSEE 14 34. CUMULATIVE REMEDIES 14 35. WAIVER OF BREACH 15 36. FORCE MAJEURE - UNAVOIDABLE DELAYS 15 37. CARE OF PREMISES - MAINTENANCE DEPOSIT 15 38. SECURITY DEPOSIT 16 6lclappl9l8/94 TABLE OF CONTENTS- Continued Page 39. EMERGENCY CLOSING OR CLOSING 16 40. DELIVERIES OF SUPPLIES 16 41. EMPLOYEE PARKING 17 42. NOTICE 17 43. LESSEE'S RIGHT TO RENEGOTIATE 17 44. INSURANCE HAZARDS 18 45. WASTE OR NUISANCE 18 46. COMPLIANCE WITH LAW 18 47. BINDING ON HEIRS 19 49. PARTIAL INVALIDITY 19 49. SOLE AND ONLY AGREEMENT 19 50. TIME OF ESSENCE 19 51. INDEMNIFICATION/HOLD HARMLESS 19 52. WORKERS COMPENSATION 20 53. INSURANCE 20 6/clapp/9/9194 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, dba JACK'S BEACH CONCESSION THIS AGREEMENT is made and entered into this 0 day o1994, 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 JACK'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 January 1, 1995 and ending at 12:01 A.M. on December 31, 1999, 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, 61clappl9126/94 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. 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 2 6/cbpp/waQ4 after the end of the calendar month during which the gross safes on which it was computed were made. A late charge equal to one and one-half percent (1 Y2%) per month shall be added on the 10th 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; (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 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 4 6/dappPM/94 paid calculated on such gross sates 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 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 Il. 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 5 6Jdapp&8194 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 improvements on said premises and all facilities appurtenant to said premises in good order 6 6lclapp/918194 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 cant' 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 WetaPP&M4 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 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. 6ldapPO&94 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. 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, 9 61clapplWM4 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, expresser 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: 10 61dapp/9/8/94 (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. 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 ll 6klapPIM94 n 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. 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, 12 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 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 sp.ecif ed 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; 13 6/dappl918194 r-- 1 (3) The worth at the time of award of the amount by which the unpaid rent for the balance of the term of this lease after the time of award exceeds the amount of rental loss that LESSEE proves could be reasonably avoided; and (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 REMEDIE 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. 14 WclaW9/8194 SECTION 35. WAIVER OF BREACH The waiver by LESSOR of any breach by LESSEE of any of the provisions of this lease shalt 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 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 in any manner whatsoever. 15 61clappl9 SM (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 (115) 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 REPAIRMEMODELING 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. SECTION 40. DELIVERIES OF SUPPLIES. LESSOR shall establish the days and times deliveries of supplies may be made and advise LESSEE in writing thereof. 16 6letapp/9094 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: Mr. Robert Franz Deputy City Administrator City of Huntington Beach 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 LESSEE: Mr. Jack K. Clapp JACK'S 1210 Main Street 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. 17 61clapp/W8194 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 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. 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, ordinance, regulation, or requirement shall be conclusive as between LESSOR and LESSEE and shall be ground for termination of this lease by LESSOR. is 6lclappl916194 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 48. 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 it tf is 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, HQLD 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. 19 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 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: (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. 20 6/dapp191M4 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. 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 21 6ldappWM4 (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, A municipal JACK K. CLAPP and JEANETTE R. CLAPP, a corporation of the State of California Husband and Wife By: Mayor a K. Clapp, Frusb n APPROVED S TO FORM: eanette R. Clapp, Wife City ATTE : 13-5q 4 �6 _ b-q NIT City Clerk 22 fttapp/W8194 EXHIBIT A CITY OF HUNTINGTON BEACH a4 /0/ B fX• ,rl31I f�1 "n' i,Ac/f/c coAsr f 11w, BEACH NUMBERING SYSTEM MAIN ST. �z AKf= AVE. C PIERSIDE VILLAGEi-> COAST PACIFIC MhJCW'S far � G2 HpQ BR2 SC3 �cr ec v DWIGFIT'S VIC'S HUNTINGTON AVE. GS 'S '� 8R4 BCS E ROADUCK'S Ls 11 PAc1P'lc OC AM- IiIGHWAY �r BEACH BLVD. BR5 6C6 BR6 )acJ REACH 2ACK'S MIT TOO • !3 15 LEGEND: BC - BEACH CONCESSION BR - BEACH RESTROOM G - GATE PD - POLICE L-LIFEGUARD TOWER HDQS- HARBORS a BEACHES HDQS. �JAGKS Ln Z5A56 0IMAD �l3 IN ASSIGNMENT AND EXTENSION OF LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, AND DWIGHT'S AND JACK'S, INC., FOR JACK'S BEACH CONCESSION THIS ASSIGNMENT AND EXTENSION OF LEASE AGREEMENT is made and entered into this 20th day of September , 1999, by and between the City of Huntington Beach, a California municipal corporation, hereinafter referred to as "the City," and Jack K. Clapp and Jeanette R. Clapp, husband and wife, hereinafter collectively referred to as "the Lessee," and Dwight's and Jack's, Inc., a California corporation, hereinafter referred to as "the Assignee." WHEREAS, the City and the Lessee are parties to that certain lease dated November 21,1994, entitled "Lease Agreement Between the City of Huntington Beach and Jack K. Clapp and Jeanette R. Clapp, husband and wife, dba Jack's Beach Concession," hereinafter referred to as "the Original Agreement;" and Section 3 of the Original Agreement provides that it may be extended for three additional five year periods upon mutual agreement of the parties; and Section 30 of the Original Agreement provides that the Lessee shall not assign the Original Agreement without the express written consent of the City first had and obtained; and The City and the Lessee wish to extend the Original Agreement for an additional five-year period, and provide for the assignment thereof to the Assignee, 4/99agree/jack's/48/24/99 RLS 99-490 NOW, THEREFORE, the City, the Lessee and the Assignee do hereby agree as follows: EXTENSION OF ORIGINAL AGREEMENT The term of the Original Agreement is hereby extended for a period of five (5) years. The Original Agreement shall now terminate on December 31, 2004. 2. CONSENT TO ASSIGNMENT OF ORIGINAL AGREEMENT The City hereby consents to the assignment of the Original Agreement and the rights, duties and obligations arising under thereunder from the Lessee to the Assignee. 3. ACKNOWLEDGMENT OF RIGHTS DUTIES AND OBLIGATIONS The Assignee hereby accepts the assignment of the Original Agreement, and acknowledges that by accepting said assignment, it accepts all of the rights, duties and obligations arising under the Original Agreement and that -such tights, duties and obligations are hereby assigned or transferred from the Lessee to the Assignee. REST OF PAGE INTENTIONALLY LEFT BLANK 2 4/99apm/jack's/08/19/99 M 99-490 4. REAFFIRMATION All other terms and conditions of the Original Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties have caused this Assignment and Extension of Lease Agreement to be executed by and through their authorized officers the day, month and year first above written. ASSIGNEE: DWIGHT'S and JACK'S, INC., a California corporation f By a I K. Clapp, Preside By: J azQ�- tte R. Clapp, Secretary -Treasurer LESSEE: JACK K. CLAPP AND JEANETTE R. CLAPP, Husband and Wife WIN 4I99agreerjjack's109119199 RLS 99490 CITY: CITY OF HUNTINGTON BEACH, a California municipal corporation I �A— kA^., Mayor ATTEST: .�� City Clerk APPROVED AS TO FORM: �1t Attorney (?-�ia t q q Jti§'� REVIEWED AND APPROVED: City Ad nistrator INITIATED AP ROVED: Dire of Co pity Services npr is ua ic:utp Kimneri!j Jones '/145315759 P- 1 CERTIFICATE OF INSURANCE* This certifies that ® STATE FARM FIRE AND CASUALTY COMPANY, Bloomington, Illinois ❑ STATE FARM GENERAL INSURANCE COMPANY, Bloomington, Illinois ❑ STATE FARM FIRE AND CASUALTY COMPANY, Scarborough, Ontario C] STATE FARM FLORIDA INSURANCE COMPANY, Winter Haven, Florida APR 2 2005 0 STATE FARM LLOYDS, Dallas, Texas insures the following policyholder for the coverages indicated below: INC ,. Name of policyholder JACKS BEACH CONCESSION� �2lSr�� Address of policyholder i s i u MAIN 5T . , Location of operations - — - Description of operations INDMDUAL OWNER The policies listed below have been issued to the policyholder 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 ftm been reduced by any paid claims. POLICY NUMBER 'TYPE OF INSURANCE POLICY PERIOD Effective Date ; E�giiradon Date LIMITS OF LIABILITY (at beginning of policy period) Comprehensive BODILY INJURY AND _--:--: - ------------- Business Liability PROPERTY DAMAGE - Ties insurance indudes - ---- ----- _ -- -----: -- -- --- -- --- -- ----- -- - - ❑ 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 EXCESS LIABILITY POLICY PERIOD Effective Date ; Expiratfort Date BODILY IWURY ARID PROPERTY DAMAGE (Combined Single Limit) ❑ Umbrella Each Occurrence $ ❑ Other Aggregate $ Part I STATUTORY Part 2 BODILY INJURY Workers' Compensation and Employers Liability Each Accident $ ' Disease Each Employee $ Disease - Policy Limit $ POLICY NUMBER TYPE OF INSURANC E POLICY PERIOD EffeeUve Date ; EM*ation Date LIMITS OF LIABILITY (at beginning of policy period) 92-72--9728--4 MERCANTILE 10-08-04 10-08-05 2000000 LIABI4000000 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, restate Farm will try to mail a written notice to the certificate holder 30 days before Name and Address of Certificate Holder cancellation. If however, 'we fall to mail such notice, no oblig to or lies � will be imposed on State CITY OF HUNTINGTON BEACH, Fargti on agent'~ sentatives. ITS AGENTS, OFFICERS AND EMPLOYEES J' 2000 MAIN #FL 5 HUNTINGTON BEACH, CA. 92648-2702 Sig r+eofAuthorkWRepresentative A 9 04/12105 Title Dane Agent's Code Stamp APPROVED A TO FORM: Am Code JPNNIFER JG,�RATCit),.tt9en 7S 5617 �' 658-404R3 04-1999 PdrftdinU.S.A. 71 4 .;-i `';2 -�.�::;-s^ . r N) 5-3 1 - 0 90 2- 7145315759 97% P. 01 INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST RECEIVED 1. Requested by: Steve Holtz/Real Estate Services Manager APR 13 2005 2. Date: April 13, 2005 City of Huntfngton Beach 3. Name of contractor/permittee: Jack's/Dwight Beach Concession CRY Attorney'sOffice 4. Description of work to be performed: Take out food sales & Ecluipment rentals 5. Value and length of contract: Approximately 200K/ earl ear -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 (see attached waiver from 2003) S. Identify the risks to the City in approving this waiver/modification: None. 4/13/05 D partment Head Signature Date: 2. City Attorney's Office proved ❑ Denie T `" Signature Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature City � ttl l Date ■147MfnnL 44.n ) A►A INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST R E C E I V E D MAY 0 3 2005 1. Requested by: Christi Mendoza, Risk Management City of Huntln ton lcf 2. Date: May Z2005 -- CityAttomovsotf 3. Name of contractor/permittee: Jack's/Dwiaht's Beach Concession 4. Description of work to be performed: Take-out food sales and equipment rentals a. Value and length of contract $200,000 annual, year-round operation 6. Waiver/modification request: Cancellation clause wordiLig general liability insurance 7. Reason for request and why it should be granted: Unable to comply with the city's cancellation clause wording requirement 8. Identify the risks to the City in approving this waiver/modification: None. Department Head Sig re Date: APPROVALS Approvals must be obtained in the order listed on this farm. Two approvals are required for a request#a be granted, Apipr val frpFn the City. Administrator's Offfit a is only re. qufted if Risk Management and tM City Attomey's Office disagree. 1. Risk Management f "proved ❑ Deniedyl � Signature Date 2. City Attomey's Office > R Ap roved ❑ Den' ? ` Sig aiure Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date If approved, the cornpletea wraiverlmodification west is to toe sulxnitted to the City Attorneys Uffice,along with -the Contract for approval. Onoe the contract has been approved., this form is to be filed with the Risk Management Division of Administrative Services May 02 05 01:37p Kimberly Jones 7145315759 P.3 CERTIFICATE OF INSURANCE This certifies chat ® STATE FARM FIRE AND CASUALTY COMPANY. BlaOmir'tgton, iBrtois ❑ STATE FARM GENERAL INSURANCE COMPANY,Slownimton, Ilinois ❑ STATE FARM FIRE AND CASUALTY COMPANY, Scarborough, Orrtaria ❑ STATE FARM FLORIDA INSURANCE COMPANY, Winter Hagen. Florida ❑ STATE FARM LLOYDS, Dallas, Texas insures the following policyholder for the coverages indicated below: Name of policyholder CLAPP, JACK: JACKS BEACH CONCESSION, INc. Address of Ok:�I� 1210 MAIN ST. , HUNTINGTON BEACH, CA. 92646 Location ofoperavons Description of operations INDIVIDUAL OWNER The policies Iced below have been Issued to the policyholder fro the policy periods shown. The insurance described in these policies is subject to all "terms excision, and corAWms of those poledes. The rmft of Ga ky shown may have been reduced by any pair# clairrls. POLICY PEWO UMTTS OF UABILITY POLICY NUMBER TYPE OF iNSIIRANCE Five ng, ; Dilute (at begi w*v of policy period) Comprehensive BODILY INJURY AND ' Btrstness Lam. ' PROPERTY DAMAGE ------- ---:--:-------------- T!>es ursuranoe includes: ---------- -------- .......- ------ - -------------- [] Products - Corrrpteted Operations ❑ C.o"bu ml Liability ❑ Underground Hazard Coverage Eadl Ocrurmerroe ❑ Personal injury ❑ Advertising Injury General Aggregate i ❑ b on Hazard Coverage ❑ Collapse Hazard Coverage Products -- Completed $ ❑ Operations Aggregate 13 POLICY PERIOD BODILY INJURY AND PROPERTY DAMAGE EXCESS LlABIL ITY Effecfte Daft ; !ration Date (Combined Single Limit) ❑ Umbrella Each Oocurrenoe $ ❑ Other Aggregate i Pad 1 STATUTORY Part 2 BODILY INJURY Works' Comperraatiorr and Employers Liability Each Acddent tl Disease Each Emptoyee S Disease - Policy Limit S POLICY PERIOD UMIT'S OF LIABN.ITY POLICY NUMBER TYPE OF 110URAN CEx live Date ; Ergriation Date (at beginner ig of policy peiod) 92-72-9728-4 MERCANTILE 10-08-04 10-08-05 2000000 EACH OCCURANCE 4000000 AGGREGATE. THE CERTIFICATE OF INSURANCE IS NOT A CONTRACT OF INSURANCE AND NEITHER AFFIRMATIVELY NOR NEGATIVELY AMMDS, EXTENDS OR ALTERS THE COVERAGE APPROVED BY ANY POLICY DESCREE3ED meREMt. ADDITIONAL INSURED If any of the described pdicies we canceled before its expiration date, State Farm will try to mall a written notice to the oertilicate holder 30 days bebm Name and Address of CeMcate Holder rancellabon. If however, we lair to mail such notice, no obliWtion or liability will be imposed on State CITY OF WWTINGTON BEACH. F or agents. ITS AGENTS, OEFICERS AND EMPLOYEES 2000 MAIN #FL 5 HUNTINGTON BEACH, CA. 92848-2702 941 ofAut1wria�edRepre�ative 05102105 T#le Hallos Age Ws Code Startup AFO Coda SS&M 8.3 04-190 p6med in U.SA APPROVED �S T�. :ETYNIFER McGRATt� f 0 ^t I FEAM !' PotfaI No 92-72-9728-4 ADDMWAL MMMM ENOORSEMOU Sta% or poWwd SWWMWom - PemAls po" 11 . 92 -72 - 9728 - 4 Named mod: JACKS BMUM CCUMMILON We Stye or.poli&A 3Ubdfvision: CM OF WAn'n=M > rM CMS AND s4PLaVss 2000 » 9T FL 5 lgjnTIMGTT On CA 92640-2702 WHO 15 AN - RMRED, under SECTION It DESKMKTXM OF INSURED. is ended b Ada as an Dared w► smte Of P shown above6 wb*d to Um Mow" WWA"W- i - Tbb kmmm gvin a* +m respw. fv operations pmamWby you or on Vow bow for %Nch fie stage or pafl5cal subdwalan tas asind a PWML (Me) 2. Ttris il]S XWIA = loss n 3t OPPly to: a. P *Mne' pa ou" ar ad sing i *"Y CIA of q*ff8d0M performed for hie ohm fxnxx**Mw,ar b. WHY l Of Pill idEded wiWn " p� age offi o a - haaaL AP ROVED A TO FORM. M k)EMNIFER I o McGRATH, City t tt�, S �S PVMdiRUZA 04/13//C�U.u+5 IZ:48 tA& 114 010 XV00 VAJL ru k.fs. i_ nnw-w-Ahw% AL qPr Ar ■ I AL AAI ■Ty/ IIL10%1 MA ►I dl% J 9-IFPCLJ Dante ft.� 04/01/2005 PRODUCER THIS CUMFICATE IS ISSUED AS A MATTER Of INFORMATION WILL.IAM VEON (LIC # OC23571) 5145 BALL ROAD ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE ALTER THE COVERAA CERTIFICATENOT HE pOLIC�IES EXTEND CYPRESS, CA 90630 (714) 816-2967 and fax (714) 816-2955 INSWIMS AFFORWNG COVERAGE twC a INSURED IINKWGRA: TRUCK INSURANCE EXCHANGE DWIGHT & JACKS IN%WRe: 101 & 201 PACIFIC COAST HIGHWAY HUNTINGTON BEACH, CA 92M (714) 536.2603 waAftRC; 459URERO: INSURER 0: 011uesArMor THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOYWITHSTANDING ANY REQUIREMENT. TERU OR COr1DMON OP ANY CONrRACT OR OTHER i30GUM&dT WITH RKSMT TO WHICH TPOS CIENTIPICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED Br THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. EXCLUSIONS AND CONDITIONS OF SUCH POLICES. AGGREGATE L"TS SHOWN MAY HAVE BEEN REDUCED BY PAIR CLAM. LTR Yi01b TYPE GF W4SIAI(NAIK* POLNCY Numil I LAMB NA"1II:RALLAORM MANERCIAL GENERAL LIABILITY ❑ CLAMS MAM r-1 OCCUR NL AGGAeGATE LIMIT N"KN 9 PTR; POLICY Into4ICCT F1 Loa EAC6I4CCURREMICE S IE S NE0 OW (Ally ay paswi 5 PERSONAL AAOV WJJPY S GALL AGGREGATE f M OOUCTS - complOP Aaa i AUTONAIM9 VAAAM ANY AUTO ALL OWPAO AvTGS SCHE XXW AUTOS HIRED AUTOS HON-0NIMED ALR08 W±T�1 Y+lCs1.E LIMIT y SO 90DiLY INJURY (PO` ws "I s 90bfLY IwLI(!Rr 1ii�566�r .ix4Anil r=M§ �oIAIRAC+E t GARAGE uma%= ANY Avra AUTO OKY - N;A 140000 I THAN EA ACC �GtXC ORtY: AEG I y fix CESSI;AIBRELUI A,IA1PUMY OGGJk CLAA SMADE 0EIIUCTI9LE ACTFwow S EACH OCCUWiENCE S AP.GRGOATE I I I I A ram. LI B Aim ANT PROrM mr. opwiicam fImuurtrtEyyR��rrExCL em? PE SC T'RQV %'S W .- A0116-79-46 04101 i1005 04/0112006 Ar-4 T02f, eR EL EAW ACCENT : 1,040,000 ELumox-mewuns I +.000,000 E.L DISEASE - Pauc-e-LWITI i 1.000.00E O MAILING ADDRESS MAILING ADDRESS: 1210 MAIN STREET HUNT BCH. CA 92W WORKERS COMPENSATION: AS AN ADDITIONAL INSURED ENDORSEMENT REQUIRED NAMING THE CITY OF HUNGTINGTON BEACH. ITS AGENTS. OFFICERS AND EMPLOYEES AS AN ADDITIONAL INSURER] ON THE INSURANCE CERTIFICATE. THE PURPOSE IS TO OBTAIN A CONTRACT. ENCROACHMENT PERMITS REQUIRE ONLY THAT THE ADDITIONAL INSURED BE LISTED ON THE IINSURANCE CERTIFICATE. CONTRACTS REQUIRE THE ADDITIONAL INSURED BE SUBMITTED AS AN ADDITIONAL INSURED ENDORSEMENT PAGE WITH THE CERTIFICATE City of Huntington Beach Should the above described policy be cancelled its Officers. Agents, & Employees before the expiration date thereof the issuing 20OG Main Street company will mall 30 days written n Ica to the Huntington Beach, CA 92648 Corti fflodod to W ILLIAM VEON APRIL 14, 2005 ACOiiO 25 Izaolroal O ACORD GORPORATM 19841 APPROVED AS TO FOR\ TIER McGRATik, 5 l l fl-5 i ORTHOLDER COPY STATE P.O. BOX 420807, SAN FRANCISCO, CA 94142-0807 COMPENSATION I N£LIRANCa FUND CERTIFICATE OF WORKERS' COMPENSATION INSURANCE ISSUE DATE. 04-19-2005 GROUP: 000029 POLICY NUMBER: 5625-2004 CERTIFICATE ID: 5 CERTIFICATE EXPIRES: 06-30-2005 06-30-2004/06-30-2005 THE CITY OF HUNTINGTON BEACH ECONOMIC DEVELOPEMENT DEPT 2000 MAIN ST HUNTINGTON BEACH CA 92648 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 after the coverage afforded by the policy listed herein. Notwithstanding any requirement, term or oonditian of any contract or other document with respect to which this oertificate of insurance may be issued or to which it may pertain, the insurance afforded by the policy described herein is subject to all the terms, exclusions, and conditions, of such policy. AUTHORIZED REPRESENTATIVE PRESIDENT EMPLOYER'S LIABILITY LIMIT INCLUDING DEFENSE COSTS: $1,000,000 PER OCCURRENCE. ENDORSEMENT #1600 - DAVID CLAPP PRES - EXCLUDED. ENDORSEMENT #1600 - LAURIE KNIGHT SEC TREAS - EXCLUDED. ENDORSEMENT #1600 - JACK CLAPP VP - EXCLUDED. ENDORSEMENT #1600 - CINDY CLAPP BDCH - EXCLUDED. ENDORSEMENT #1600 - BRANDON KNIGHT BDCH - EXCLUDED. ENDORSEMENT #2065 ENTITLED CERTIFICATE HOLDERS' NOTICE EFFECTIVE 07-01-1995 IS ATTACHED TO AND FORMS A PART OF THIS POLICY. APPROVED AS V) FORM: EMPLOYER tty lk� �FER.GRATH. 'Tty U DWIGHT'S & JACK'S INC. 1210 MAIN ST HUNTINGTON BEACH CA 92648 [ASC,CNI PRINTED: 04-20-2005 SCIF 10262E Accept this certificate only If you am a faint watermark that reads'OFFIGIAL STATE FUND DOCUMENT' PAGE I OF I RtA ROUTING SHIET INITIATING DEPARTMENT: Economic Development SUBJECT: Approve Extension of Lease Agreement for Jack's Beach Concession COUNCIL MEETING DATE: June 6, 2005 ............. ...... ........... ..... ....... ATTACHMENTS ......... STATU'SRCA Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached Not Applicable ❑ Contract/Agreement (w/exhibits if applicable) Attached Not Applicable Not ❑ Si ned in l by the City Attome Attached ❑ Subleases, Third Party Agreements, etc. Not Applicable Approved as to form by City Attome Certificates of Insurance (Approved b the City Attome ( Ap Y Y Y) Attached Not Applicable ❑ Fiscal Impact Statement (Unbudget, over $5,000) Attached Not Applicable ❑ Bonds (If applicable) Attached Not Applicable ❑ Staff Report (If applicable) Attached Not Applicable ❑ Commission, Board or Committee Report If applicable) p � PP ) Attached Not Applicable ❑ Attached ElFindin Findings/Conditions for Approval and/or Denial g pP Not Applicable . EXPLANATION `FOR_MISSING ATTACHMENTS . .. EXPLANATION FOR RETURN OF ITIEW 0 • CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALL FOR NIA 92648 OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK LETTER OF TRANSMITTAL OF ITEM APPROVED BY THE CITY COUNCIL/ REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH / ♦ i r i Street Name r City, State, Zip ATTENTION: DEPARTMENT: See Attached Action Agenda Item Date of Approval Enclosed For Your Records Is An Executed Copy Of The Above Referenced Agenda Item. Remarks: Connie Brockway City Clerk Attachments: Action Agenda Page Agreement ✓ Bonds Insurance RCA Deed Other CC: A Q Name Department RCA Agreement Insurance other _ Name Department RCA Agreement Insurance Other Name Department RCA Agreement Insurance Other Name Department RCA Agreement Insurance Other Risk Management Dept, Insurance Received by Name - Company Name - Date G:Eollowup/Letters/coverltr I Telephone: 714-536-5227 ) fa� I -loan, Corr „Serr , Council/Agency Meeting Held: 99 Deferred/Continued to: _ --"2- City Clerk's Signature rir Approved O Conditionally Approved O Dented 'l - o Council Meeting Date: September 20, 1999 Department ID Number: CS99-040 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL ACTION. a, SUBMITTED TO: HONORABLE MAYOR AND CITY OUNCIL MEMBERS - SUBMITTED BY: RAY SILVER, City Administrator PREPARED BY: RON Hagan, Director, Community Services SUBJECT: APPROVE ASSIGNMENT AND EXTENSION OF LEASE AGREEMENT WITH JACK K. CLAPP AND JEANETTE R. CLAPP FOR JACK'S BEACH CONCESSION Statement of issue, Funding Saurce, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachnwnt(s) Statement of Issue: Should the city approve an extension of Jack's Beach Concession lease with Jack and Jeanette Clapp? Funding Source: Revenue to the General Fund in the amount of $20,000 annually. Recommended Action: Motion to approve assignment and extension of lease agreement with Jack K. Clapp and Jeanette R. Clapp for operation of Jack's Beach Concession. Alternative Actions : Do not approve assignment and extension of lease agreement with Jack K. Clapp and Jeanette R. Clapp for operation of Jack's Beach Concession, and give staff alternative direction. Analysis: The 1994 lease agreement with Jack and Jeanette Clapp for Jack's Beach Concession contains a provision for a five-year extension of the lease under the same terms and conditions with the mutual agreement of the city and the Clapp's. The Clapp's have requested the extension and staff is recommending that City Council grant this request. The Clapp family has operated both Dwight's and Jack's Beach Concessions for over forty years and has been an excellent concessionaire during this time. Jack's Beach Concession operates daily during the summer and on weekends in the winter. The concession carries a variety of food items and beach rental equipment. The Clapp's have never been in default of their lease and have maintained their facility in a satisfactory manner. Jack's Beach Concession grosses an average of $200,000 per year depending on weather, and pays approximately $20,000 per year in rent to the city. The concession is within the South Beach Improvement Master Plan Phase II area and is compatible with that plan. Consequently, staff is recommending approval of the assignment and extension of lease. C �� REQUEST FOR COUNCIL ACT�N MEETING DATE: September 20,1999 DEPARTMENT ID NUMBER: CS99-040 Environmental Status: Not applicable Attachment[s): RCA Author: RH:cr Document2 -2- August 30,1999 9:49 AM 0 0, ASSIGNMENT AND EXTENSION OF LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, AND DWIGHT'S AND JACK'S, INC., FOR JACK'S BEACH CONCESSION THIS ASSIGNMENT AND EXTENSION OF LEASE AGREEMENT is made and entered into this 20th day of September , 1999, by and between the City of Huntington Beach, a California municipal corporation, hereinafter referred to as "the City," and Jack K. Clapp and Jeanette R. Clapp, husband and wife, hereinafter collectively referred to as "the Lessee," and Dwight's and Jack's, Inc., a California corporation, hereinafter referred to as "the Assignee." WHEREAS, the City and the Lessee are parties to that certain lease dated November 21, 1994, entitled "Lease Agreement Between the City of Huntington Beach and Jack K. Clapp and Jeanette R. Clapp, husband and wife, dba Jack's Beach Concession," hereinafter referred to as "the Original Agreement;" and Section 3 of the Original Agreement provides that it may be extended for three additional five year periods upon mutual agreement of the parties; and Section 30 of the Original Agreement provides that the Lessee shall not assign the Original Agreement without the express written consent of the City first had and obtained; and The City and the Lessee wish to extend the Original Agreement for an additional five-year period, and provide for the assignment thereof to the Assignee, 4/99agrcoack's/08/24/99 RE:S 99-490 • • NOW, THEREFORE, the City, the Lessee and the Assignee do hereby agree as follows: EXTENSION OF ORIGINAL AGREEMENT The term of the Original Agreement is hereby extended for a period of five (5) years. The Original Agreement shall now terminate on December 31, 2004. 2. CONSENT TO ASSIGNMENT OF ORIGINAL AGREEMENT The City hereby consents to the assignment of the Original Agreement and the rights, duties and obligations arising under thereunder from the Lessee to the Assignee. 3. ACKNOWLEDGMENT OF RIGHTS, DUTIES AND OBLIGATIONS The Assignee hereby accepts the assignment of the Original Agreement, and acknowledges that by accepting said assignment, it accepts all of the rights, duties and obligations arising under the Original Agreement and that such rights, duties and obligations are hereby assigned or transferred from the Lessee to the Assignee. REST OF PAGE INTENTIONALLY LEFT BLANK 2 4/99ageerack'sU/19/99 RIS 99-490 4. REAFFIRMATION All other terms and conditions of the Original Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties have caused this Assignment and Extension of Lease Agreement to be executed by and through their authorized officers the day, month and year first above written. ASSIGNEE: DWIGHT' S and JACK'S, INC., a California corporation By a K. Clapp, Preside By: J ette R. Clapp, Secretary -Treasurer LESSEE: JACK K. CLAPP AND JEANETTE R. CLAPP, Husband and Wife te R. Clapp 3 4/99agnee/jack's/08/19/99 RIS 99-490 CITY: CITY OF HUNTINGTON BEACH, a California municipal corporation Mayor AT ST: • 44&AWV? City Clerk ov APPROVED AS TO FORM: r it Attorney 4q REVIEWED AND APPROVED. ", AiAll City AdnTnistrator INITIATED PAPROVED: Direo?'otc6fiiWnity Services • State Farm General Insurance Company 31303 Agoura Road Westlake Viliage,CA 91363-0001 A Stock Company with Home Offices in Bloomington, Illinois POLICY NUMBER BUSINESS - MERCANTILE / SERVICE 92-72-9728-4 OCT 08 1999 TO OCT 08 2000 D-8707-F417 F Z 3 CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS, AND EMPLOYEES 2000 MAIN ST HUNTINGTON BH CA 92648-2702 ('IIllllil�llllil'li��ll�lll�lll lll�lI11111I11�lllll�111��111' Insured: JACKS BEACH CONCESSION INC Location: HUNTINGTON AVE & COAST HWY HUNTINGTON BH CA Add Ins -II: CITY OF HUNTINGTON BEACH Add Ins: RITEWAY PRODUCTS WEST forms, Options, and Endorsements Special Form 3 Money & Secur $1,0001$1,000 Debris Removal Endorsement Amendatory Endorsement Policy Endorsement Business Policy Endorsement Additional Insured Glass Deductible - Section I Additional Insured Endorsement S TO FORM .1 FP-6143 OPT MO FE-6451 FE-6205 FE-6506.1 FE-6464 FE-6320 FE-6538.I FE-6491 DECLARATIONS PAGE DATE DUE PLEASE PAY THIS AMOUNT TO BE PAID BY INSURED Coverages and Limits Section I A Buildings $132, 300 B Business Personal Property 26,700 C Loss of Income Actual Loss Deductibles - Section I Basic 1,000 Other deductibles may apply - refer to policy Section II L Business Liability $2, 000, 000 M Medical Payments 5,000 Gen Aggregate (Other than PGO) 4,000,000 Products -Go mpleted Operations 4,000,000 (POO Aggregate) Annual Premium Forms, Opts, & Endrsmnt Bus Liability - Cov L-. Total Amount Premium Reductions Your premium has already been reduced by the following; Renewal Year Discount Yrs in BUsinese Discount G r. t1;UTT0N Tip T;'El y Cov, A - Inflation Index: 133.9 Gov. 8 - Consumer Price: 166.2 ttorney Your State Farm Fire an fsualty Company policy is being non -renewed- This new policy is being Written by State Farm General Insurance Company as explained on the enclosed insert. $1,008.00 55.00 53.00 $1,116.00 Acre,. IM JO S -(714) 531-0542 JUL See reverse side for important informalion. Please keep this part for your record. • JA State Farm General Insurance Company 31303 Agoura Road Westlake Village,CA 91363-0001 A Stock Company with Home Offices in Bloomington, Illinois POLICY NUMBER BUSINESS - MERCANTILE / SERVICE 92-72-9729-6 OCT 08 1999 TO OCT 08 2000 D-8707-F417 F Z 3 CITY OF HUNTINGTON BEACH ITS AGENTS, OFFICERS, AND EMPLOYEES 2000 MAIN ST HUNTINGTON BH CA 92648-2702 111111111111111lilnllnln:1,ll,11IIIr311J1111„1II►41II{11! Insured: DWIGHTS BEACH CONCESSION, INC Location: 201 PACIFIC COAST HWY HUNTINGTON BH CA Add Ins -I[: 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 Additional Insured Glass Deductible -Section I FP--6143 OPT MO FE-6451 FE-6205 FE-6506.1 FE-6464 FE--6320 FE-6538.1 GATL CITY ATTORNEY Ev: u xr .--s A; ornav el l�lo �asn yonsxj abeatnu AlKaaNc aberane acfj sraeyna sa,f sr;a,u,sur: a41i! ON El W, iWoyas/��ont wok pus o� ua,yJp a�oryen ay1 s! pl0Llas1c4 ul sarorlod Lured alei5 El(Aluo suapfogAajcd ornv) 11V of sagdde auei $lo II xo4 �1oa43 {lua6e uuea alelg anob aas asealdl aGueya uolteaoZ ,yuo a6ue43 ssaappe 6e,gleW ON saA ❑ �Gsa.ippe snolna,id.moA of wnlai of ueld no/ op Lstlluow Auew mao4'Amioduralli Xleaodural ❑ 3uaua0.19d El :a6ue4o ss kunoc) dltlsuma j slmn 40 aplslno Mslrufn 40 eplsul 'ON au04d ssaulsng apoo IelsodldlZ eoulno.ld/algS 4D 'ON euoyd aouaprsald »-a 10 lea [IS DECLARATIONS PAGE DATE DUE PLEASE FAY THIS AMOUNT TO BE PAID BY INSURED Coverages and Limits Section I A Buildings $161, 400 B Business Personal Property 21, 400 C Loss of Income Actual Loss Deductibles - Section I Basic 1,000 • Other deductibles may apply - refer to policy Section II L Business Liability $2, 000, 000 M Medical Payments 5, 000 Gen Aggregate (Other than POO) 4,000 000 Products -Completed Operations 4,000,000 (PCO Aggregate) Annual Premium $1, 006.00 Forms, Opts, & Endrsmnt 45.00 Bus Liability - Cov L 44.00 Total Amount $1, 095.00 Premium Reductions Your premium has already been reduced by the following: Renewal Year Discount Yrs in Business Discount F ROt" . K I M C JONES 'k** 5TPTE FPRM : NO PHONE NO, • 53 L CERTIFICATE OF INSURANCE TNd; 00ifina that [] TATE FANM FIRE AND CASUALTY COMPANY, Slaominton, Minais TA'. E FARM =4FRAL NSUMANCE CuMPANY, Bloorrc,ngton. Ililnois insurers the rol6wi7g policyho4br to( the cover agas dic;J40 I3mlota: — IVam4 of i,ele,:y! ruirlwr AddrOsa ul tx�:iaytroklbr ..,�,. � �• .-1_-.�.-.— .�.�... . _ LocalIon of operation$ _ t—r r LQL POLICY NUMEICA r Fits insuranua sndu6im-: POLICY NUMBER TYPIS OF IN3URANCE }i t'�u�Y Pettloo ! L(Mlia or LIASILmy -- - - f iffeolcl ant* rulydljgn 0016 ��AI4f�rdhtln3rYtl ', .... ..... a1'_ablGty J ManufaCt ms arxt CCN1VaCtOIS l.ip�ji�ii �.: Ownpr>:, LarulbrCa, ...-. .-•-----• ..:....................... � Dual Lilttlt5 tor: a' Esoh occurrgr^.a9 : TsrantS LwwIIN� t.. C.� 4- A h U ProOucta • Completed Operations i� Ownero Or CiorVACtom PI'MK O Liab )ity 1i' ❑ L S' l ] Centraatuel LI•{ai{itv UY A ❑ Proresaiartati ErrarG arks fart i5sictng ❑ &8&d Form Prupurty Dama9a ❑ &sad Font4 ComprehbnaNd S:terlraral Llat?ky 800ILY INJURY PROPERTY GAMAIQE BODILY tWURi' ANP MPEATY DAMAGE 6;n'bbad Sirlglo LI nit tor: EIRcn Occurrence — — - A99regate r sach Occur, to wu Aggrople' POLICY PER IOQ WNITRACTUAL I, ABILITY LIMITS (If 17lwan; from above) TYPE OF INSURANCE Ettarctlu* Data ExpUrAAn �kata I BODILY iNJURY HMO r EMOEoid e_IAbkiTY r i El ❑ 4}ncr ❑ Workers' Gompeneatgn atld t mpkNws UaWy Each 0morence PHOM ITY DAMAOE A�rtgrlr OWLS Y� Y ANO PSOPSR7Y DAMAGE (Cmmbk*d Dlnrilre 6alrnl) FEW Occurro+aoa AggailgatO Pa►t I UTATUTGRY Pali i BODILY INJUAY Ejl& A Oftrrt L}Isaare Gault Elrrpwyae INasaao Pukri Urni 00 r� ` ' y `ter ` r�4�" 5at#77 '/ " Y �7-1r. 7 44 L OMT4.a, t w dwn. aW ?sir+s i �sknly hwxa+e� r.ue Wa !! ! 1pUdW'N r;M�WiW. � 4V�lNti%1M1 Y '. ,wig cumFlCATV Or IN9UIYANCi is NOT A CON IMACT Of INSURANCE AND NEITKF-R AFFIRmATIVaLY NOR NIEGATIVtLY AMENDS, winos, On tLYFIRG THE COVERAGE APPROVED SY ANY POLICY DESCF113ED MEREIK me all ht"wul; or Cantleato ►trjktur r OF h�U�J7'ir��� Act 4- HM.i9 rM•, H7U1f A, i �� f� f KIM JOKES 8707 ORANGE F417 SG STATE P.O. BOX 807, SAN FRANCISCO,CA 94101-0807 COMPENSATION F N S U R AN C E FUND CERTIFICATE OF WORKERS'• COMPENSATION INSURANCE POLICY NUMBER: 029799 UNIT 00OSS25 ISSUE DATE - CERTIFICATE ,EXPIRES: 06-30-00 This is to certify that we have issued a valid Workers' Compensation InSUFance 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. EMPLOYER'S LIABILITY LIMIT' NCLUDING DEIiNSE COSTS: $1�, 00;000 L10''PER OCCURRENCE. ENDORSEMENT #2065 ENTITLED CERTIFICATE HOLE)i Sl NOTICE EFFECTIVE 06/30 99 IS ATTACHED TO AND FORMS A PART OF THIS POLICY. FORM, TV B . y CAL-,- PLtor e9. RCA ROUTING SHEET INITIATING DEPARTMENT: COMMUNITY SERVICES SUBJECT: APPROVE ASSIGNMENT AND EXTENSION OF LEASE AGREEMENT WITH JACK K. AND JEANETTE R. CLAPP FOR JACK'S BEACH CONCESSION COUNCIL MEETING DATE: September 20, 1999 Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed infull by the City Attome Attached Subleases, Third Party Agreements, etc. (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attome Attached Financial Impact Statement Unbud et, over $5,000 Not Applicable Bonds If applicable) Not 8pplicable Staff Report If applicable) Not Applicable Commission Board or Committee Report If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EP.A` I. FO.t..f. ITEM....::; ... F APPROVED BY Ct t W 1920 I�b / -. 4,e- - FOR CITY COUNCl ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY CO SUBMITTED BY: MICHAEL T. UBERUAGA, City Admin PREPARED BY: ROBERT J. FRANZ, Deputy City Adm SUBJECT: "JACK'S" BEACH CONCESSION Consistent with Council Policy: [ ✓ ] Yes DATE: November 7, 1994 [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments STATEMENT OF OBJECTIVE: The renewal of a beach concession lease between Jack K. and/or Jeanette R. Clapp, H/W, dba " Jack'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: $ 1 to 100,000 `[�I���I�Iii �►��Ii1�iI�I�7 $200,000 - Plus 10.5% 12.5% 14.5% RECOMMENDATION: Approve the lease with Jack K. and/or Jeanette R. Clapp, HNV, dba "Jack's". ANALYSIS: The Clapp family has been associated with the 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. Mr. and Mrs. Clapp were on a month -to -month agreement until January 1, 1990. From 1 /1 /90 to 1 /1 /95, Mr. Clapp has been operating on a five year lease basis of a flat 12.5% fee to the City. Current plans to complete the Pier and beach 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 as gross sales increase. 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. r REQUEf� FOR CITY COUNCT ACTION "JACK'S" BEACH CONCESSION FUNDING SOURCE: None. ALTERNATIVE ACTION: Continue the lease for a period of time - month to month. ATTACHMENTS: Proposed new lease agreement. JACKS.DOC -2- 09106/94 10:56 AM 0 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, dba JACK'S BEACH CONCESSION TABLE OF CONTENTS Pane 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 3 9. BOOKS AND RECORDS 4 10. STATEMENT OF GROSS SALES 4 11. PERMITTED USE 5 12. PAYMENT OF UTILITY CHARGES 5 13. PERSONAL PROPERTY TAXES 6 14. REAL PROPERTY TAXES 6 15. MAINTENANCE BY LESSEE 6 16. MAINTENANCE OF SHOW WINDOW GLASS 7 17. ALTERATIONS AND LIENS 7 18. INSPECTION BY LESSOR 8 19. SURRENDER OF PREMISES 8 20. INSTALLATION AND REMOVAL OF TRADE FIXTURES 8 21. TRADE FIXTURES AS SECURITY FOR LEASE 9 22. UN REMOVED TRADE FIXTURES 9 23. SIGNS 9 24. PARTIAL DESTRUCTION 10 25. TOTAL DESTRUCTION 10 26. INSURANCE PROCEEDS 11 27. ABATEMENT OF RENT 11 28. CONDEMNATION COMPENSATION 11 29. RELOCATION AND ASSISTANCE 12 30. SUBLEASING OR ASSIGNING AS BREACH 12 31. ABANDONMENT BY LESSEE 13 32. DEFAULT BY LESSEE 14 33. INSOLVENCY OF LESSEE 14 34. CUMULATIVE REMEDIES 14 35. WAIVER OF BREACH 15 36. FORCE MAJEURE - UNAVOIDABLE DELAYS 15 37. CARE OF PREMISES - MAINTENANCE DEPOSIT 15 38. SECURITY DEPOSIT 16 6/clapp1919/94 TABLE OF CONTENTS- Continued Page 39. EMERGENCY CLOSING OR CLOSING 16 40. DELIVERIES OF SUPPLIES 16 41. EMPLOYEE PARKING 17 42. NOTICE 17 43. LESSEE'S RIGHT TO RENEGOTIATE 17 44. INSURANCE HAZARDS 18 45. WASTE OR NUISANCE 18 46. COMPLIANCE WITH LAW 18 47. BINDING ON HEIRS 19 49. PARTIAL INVALIDITY 19 49. SOLE AND ONLY AGREEMENT 19 50. TIME OF ESSENCE 19 51. INDEMNIFICATION/HOLD HARMLESS 19 52. WORKERS COMPENSATION 20 53. INSURANCE 20 6lclappl918194 0 0 LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JACK K. CLAPP AND JEANETTE R. CLAPP, HUSBAND AND WIFE, dba JACK'S BEACH CONCESSION 414 THIS AGREEMENT is made and entered into this 0 day of,1994, 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: DESCRIPTION OF PREMISES LESSOR hereby leases to LESSEE that certain real property commonly known and described as JACK'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 January 1, 1995 and ending at 12:01 A.M. on December 31, 1999, 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, 61clapp19126194 0 0 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. 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 2 0 • 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 Y2%) per month shall be added on the 10th 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; (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 B. 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 6/clapp/9/8194 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 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 4 6/clapp/9/8/94 0 0 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 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 5 8lciapp1918194 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 improvements on said premises and all facilities appurtenant to said premises in good order 6/clapp/9/8/94 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 61dappI 8194 0 0 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 18. 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 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. ftlappW194 9 0 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. 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, ftlapp/M/94 0 . 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: to ftlapp/M/94 0 (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 toss to leasehold improvements and fixtures beyond 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. 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 li ftlapp/8/M4 • 0 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. 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, 12 6lclapp19094 0 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 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; 13 6ldapp/WS/94 (3) The worth at the time of award of the amount by which the unpaid rent for the balance of the term of this lease after the time of award exceeds the amount of rental loss that LESSEE proves could be reasonably avoided; and (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. 14 Wdapp/MG4 • 0 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 or a waiver of any subsequent breach by LESSEE either of the same or another provision of this lease. SECTION 38. 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 in any manner whatsoever. is 6lclappM/8I94 i 0 (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 REPAIRMEMODELING 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. SECTION 40. DELIVERIES OF SUPPLIES. LESSOR shall establish the days and times deliveries of supplies may be made and advise LESSEE in writing thereof. 16 6/dapp/9/aG4 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 Mr. Robert Franz Deputy City Administrator City of Huntington Beach 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 LESSEE: Mr. Jack K. Clapp JACK'S 1210 Main Street 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. 17 6/dapp0a194 i 0 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 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. 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, ordinance, regulation, or requirement shall be conclusive as between LESSOR and LESSEE and shall be ground for termination of this lease by LESSOR. 18 6lclapp1918/94 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 48. 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 E 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 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. 19 61dapp/W94 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 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: (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. 20 ftlappl9/8/94 0 171 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. 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 21 6101appl9W4 0 0 (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: JACK K. CLAPP and JEANETTE R. CLAPP, a Husband and Wife By: CITY OF HUNTINGTON BEACH, A municipal corporation of the State of Califomia Mayor ack K. Clapp, Husb�nf APPROVED S TO FORM: eanette R. Clapp, Wife City Attorney ATTE : q73-1( NIT City Clerk AND City Administrator 22 61dapp&8/94 RYMTRTT A -CITY OF HUNTINGTON BEACH st't� F/RST Sr Y;9 "A' PAC/F/C COAST j f/w,i 0 r BEACH NUMBERING SYSTEM I '*N MAIN ST N MMLAKE AVE. h� <DPIF.RSIDE VILLAGEp COAST PACIFIC HUNTINGTON AVE. )AC S MAXWELL'S GI G2 BCAl BC3 Bft BCI gC KpaS BR2 DWIGIIT'S VIC'S L1 L3 L5 FL BEACii BLVD. HIGHWAY G4 G3 9ft5 BC6 BR6 BC7 BR4 BC5 REACH ZACK'S E ROADZACK'5 TOO HUT 15 LEGEND: BC - BEACH CONCESSION BR -BEACH RESTROOM G - GATE PAr,irfc OCEAN' LD I L FEGUARD TOWER HDOS-HARBORS 8 BEACHES HDOS. JACKS .�137 SDiI STATE PARK v.� FROM : K I M C JOr EE' :+ ;t :k5­ rF FHiR. 'S INS PHONE NO. : 531 575� P113 ' I CERTIFICATE OF INSURANCE Thtg is to certify mist Lj STATE FARM FIRE ANO CASUALTY COMPANY, Bloomington, Illinois Ej STATE FARM GENERAL INSURANCE COMPANY, Rloomingipn, Illinois hat, In force for f7WTC•u'T�± R NCESSInPt.._.&. ,AUK `S B.FAC9 CONCH,` ION Namn of PnAcyholde. Addrau of Palkyhuidor _H1'b1TTmn..rr m 02h ur CA R264 3 Iucatiurlulupera,tlpns 201 PACIFIC COAST HWY v& HL)NTINICTON A V F AT PAC'TFTC ('0AFT HWYr (T,B, .TACK .A.ND JEANE'T'TE CLAPP _ --- the following crovwncjp5 for ihp pemods and fimif.e Inriinnind hMnw POLICY NUMBER TYPE OF IhlNl�h�i llFc POLICY PERIOD LIMITS OF LIABILITY .,,I (eff.;exp.) Ire a.."...-. _ ;.....- 'dt,s., PCiOCV NLWb_VR )0--72-97 it-4 LJ Ordill frallosisive Gdneri l Liability r--7 Mdnuftar.t"w't` and ApPPpVMV 1:8 To pol L✓' C:nnrran..tnrq' I,4F.�ility _ T 0 Cf.t.7 -� OWOCS', Landlcards' and BY. DsPutY city A L" )idnerrrlte' Liabilily PRODUCTS -COMPLETED OPERATIONS OWNERS, OR CONTRAC':TI?R:ti' PROTEC IAVE LIABILITY �r�� CONTRACTUAL IIARILITY Lj RROAL, FOHMI PROPERTY DAMAOE I f BROArl FORM C:nWIPRFHENSIVt OCNERAL LIA(ift.ITY FYPE OP INSURANCE POLICY PERIOD OPUSINESs —MERCANTILE :--RTISTNF.s� EXCESS LIABILITY L.J 41f�+4tiri94', zA I C1111r;r E Dual Limns in, Li'tf:11 (3r; t;>arrgn_a .rsrn6t A4Aregwv Each OccLim-c cr: g BODILY INJURY PROFFRTYOAMAGL Cir mhrnwf Sin714? L-ii; 'u. ROPILY INJURY AND ?RGPE9TY f]AMA(,I' euulr C)z-r.,�r, r • A77rF�;irr;• $ ---- CONTRACTUAL LIABIL 11 r L iM?r;, ill ditferenl rtruh 150DILY' INJURY Each OZCL Aaor90ata CLFimblrled Single. L irnit fnr ^fPAOHErNT'Y DAMAGE fl[1�,�ul-fl s j_,aao , n o n 20r)1LY INJ01, ANC FFiOPERSY LSaMAf), farfr 0CGIJrr+W_(1 S Ayyrt--r;,rlc $ }A1r>rk;'.rg f:nrcru¢rlygttir}r, Part STATUTOPY �1 wart 2 BODILY INJL)n, I I u'IU EIIItIIUY'UrU Esf h ArrlriAnf $ _.. Lld.Lrlir Cy .. .. .._... __.. __.. Oi;Oesa_E3ch Disease-POJry Lirnif. B `Ag"rofjuh.! rrrJ1 applicable if iiwlle'.r... I :rrrrflnffic' and TananteLILOHOy l-,vurarmv axr.lu.'la8 010r.IL+1:11 al!c,ati�:)*. new oo,,�(ruclrrni : JUrlwlitiur1. THE CERTIFICATE OF INSURANCE 19 NOT A CONTRACT OF INSURANCE AND NEITHER AmA MATIVELY NOR NEGATIVELY AMENDS, EXTENDS OR ALTERS THE COVERAGE APPROVED BY ANY PWOV DESCRIEw fri12REIN. ***30 DAY NOTICE WTLTr PE GIVEAI TO TTIV C-LTY nT HFACH TN THE FVENT OF CANCFT..T,ATTn1NT* * * NAMF ANF) Ar1raRFt,�µ Caf PAk' a S rl WiOM CERTIFICATr l$ l$$IjFP rCITY OF ITT;NTINCTON nRACH, TT•S AGENTS, OFFTC'FPS, AND $MPLOVEPS 2000 WAIN STPCE'r HL)NTTNGTON REACH, CA 17l2618 Dste i •' SI aturrl ql Au.�aor+�r,rt R �lucr-Ant.?d42 0 i SG STATE P.O. BOX 807, SAN FRANCISCO,CA 94101-0807 COMPENSATION INSURANCE FUND CERTIFICATE OF WORKERS' COMPENSATION INSURANCE POLICY NUMBER: 1362226 - 94 ISSUE DATE: 07-01-94 CERTIFICATE EXPIRES: 07-01-95 CITY OF HUNTINGTON BEACH 008: ALL OPERATIONS RISK MANAGEMENT ATTN: DENNIS COULTER EMPLOYEES = 0 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 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. 'IV W441114- PRESIDENT EMPLOYER'S LIABILITY LIMIT: $3,000,000.00 PER OCCURRENCE. ENDORSEMENT #2065 ENTITLED CERTIFICATE HOLDERS' NOTICE EFFECTIVE 07/01/94 IS ATTACHED TO AND FORMS A PART OF THIS POLICY. iRIA --Attorney xt corney EMPLOYER LEGAL NAME DWIGHT'S JACK'S INC. DWIGHT'S & JACK'S INC. 1210 MAIN ST. HUNTINGTON BEACH, CA 92648 PRINTED: 06-20-94 P0408