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Michael Bartusick and Christine Bartusick dba Park Bench Cafe - 2012-08-06 (7)
APPIUVCP 7-CD ��NTiNGTo - 2000 Main Street, T.; Huntingtgo2n6Beeach, CA • >�, _ City of Huntington Beach File #: 23-210 MEETING DATE: 3/21/2023 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Al Zelinka, City Manager VIA: Chris Slama, Director of Community & Library Services PREPARED BY: Chris Cole, Community & Library Services Manager Subject: Approve and authorize execution of Amendment to Lease Amendment between the City of Huntington Beach and Michael and Christie Bartusick for Park Bench Café, for the operation of a restaurant/food concession in Huntington Central Park Statement of Issue: The City Council is asked to approve a ten-year Lease Amendment between the City of Huntington Beach and Michael and Christie Bartusick, for the continued operation of Park Bench Café for the operation of a restaurant/food concession in Huntington Central Park located at 17732 Goldenwest Street, Huntington Beach, California. Financial Impact: Monthly, the City will receive a minimum base rent or a percentage of gross revenues generated at the facility, whichever is greater. Beginning with Year 2 of the Amendment, the base rent will be increased annually by the Consumer Price Index for the Los Angeles - Long Beach - Anaheim, CPI- U. The percentages are defined below: Years 1 through 10 $0 - $100,000.00 of Gross Sales 8.0% $100,000.01 - $150,000.00 of Gross Sales 9.0% Over $150,000.00 of Gross Sales 10.0% Minimum Base Rent $1,451.50 per month plus annual CPI increases Recommended Action: Approve and authorize the Mayor and City Clerk to execute the "Amendment to Lease Amendment between the City of Huntington Beach and Michael and Christie Bartusick, dba Park Bench Café" for a restaurant/food concession in Huntington Central Park. Alternative Action(s): City of Huntington Beach Page 1 of 3 Printed on 3/16/2023 power LegistarT"^ File #: 23-210 MEETING DATE: 3/21/2023 Do not approve the recommended action and direct staff accordingly. Analysis: The Park Bench Café is an existing restaurant/food concession located in Huntington Central Park at 17732 Goldenwest Street. The outdoor café was established in 1988, and remains a popular establishment that caters to park visitors as well as residents. The facility is well run and has been a source of steady rental income for the City of Huntington Beach. City Council approved a 10-year lease with Michael and Christie Bartusick (Lessee) on August 6, 2012. The lease with Park Bench Café is now due for renewal. Lessee agrees to a 10-year lease term, wherein rental payments are based on a percentage of gross sales, or a minimum base rent of $1,451.50 per month, whichever is greater, plus CPI annual increases. Lessee shall operate the café a minimum of 250 days during the calendar year, for a minimum of four (4) hours per day. Lessee, at his/her sole cost and expense, shall equip, operate, manage and maintain the premises in good safe working condition. As stated in the original lease, lessee's obligations include: • Maintain and operate the premises and adjacent areas within 50 feet in clean, safe, wholesome and sanitary condition free of trash, garbage or obstructions of any kind and in compliance with any and all present and future laws, codes, rules or regulations. • Perform maintenance and repairs including landscape maintenance. • Paint, stain or seal the Premises' exterior surfaces a minimum of every three years unless City determines in its sole discretion that such work shall be done on a more frequent basis. • All exterior metal surfaces, except the roof, shall be painted with rust resistant paint no less than once every other year. • Remove any and all graffiti on the Premises at its sole cost and expense within 48 hours of Lessee receiving notice thereof or Lessee becoming aware of such graffiti. • Shall repair and/or replace any broken glass within 48 hours regardless of cause, except by fault of City, at its sole cost and expense. • Repair and/or replace all damage or destruction to the Premises caused by act(s) of vandalism as soon as possible but in no event later than 14 days after the date such damage or destruction occurred. • Responsible for the payment of all utility charges, including, without limitation, gas, electricity, water, telephone services, cable TV services, internet services, and any other technology services available during the term of this Leases, as well as sewage disposal. • Responsible for all trash containers and/or trash bins shall be adequately screened and located to the satisfaction of the City. As stated in the original lease, City's obligations include: • Maintaining all sewer and drain lines and roofs. • May from time to time review the items sold and containers or utensils used. • Reserves the right to prohibit the sale or use of non-recyclable containers or plastics. • Reserves the right to prohibit lessee's sale, provision or rental of any item or service rendered or performed, which it deems objectionable or offensive, beyond the scope deemed necessary City of Huntington Beach Page 2 of 3 Printed on 3/16/2023 power Legistar"" File #: 23-210 MEETING DATE: 3/21/2023 for proper service to the public. • The right to approve and at any time require Lessee to change or remove signs, names, placards, decorations or advertising place on, or inscribed, painted or affixed upon the Premises. Lessee has agreed to and signed the attached lease amendment. The lease rates are consistent with current market rates for comparable City concession agreements. Based upon Lessee's qualifications and previous experience with the City, staff recommends approval of the lease amendment. Environmental Status: Not applicable. Strategic Plan Goal: Community Engagement Attachment(s): 1. Amendment to Lease Amendment between the City of Huntington Beach and Michael and Christie Bartusick, dba Park Bench Café. 2. Lease Agreement between the City of Huntington Beach and Michael and Christine Bartusick, dba Park Bench Café dated August 6, 2012. City of Huntington Beach Page 3 of 3 Printed on 3/16/2023 powerpowere224 Legistar'" AMENDMENT TO LEASE AMENDMENT BETWEEN CITY OF HUNTINGTON BEACH AND MICHAEL & CHRISTIE BARTUSICK dba PARK BENCH CAFÉ THIS AMENDMENT TO LEASE AMENDMENT (this "Amendment") is made and entered into this 02/sr day of A Ara/_ , 2023(the "Effective Date")by and between the CITY OF HUNTINGTON BEACH, a municipal corporation ("Lessor"), and MICHAEL BARTUSICK AND CHRISTIE BARTUSICK dba PARK BENCH CAFÉ, a California corporation ("Lessee"). Lessor and Lessee are at times collectively referred to herein as "Parties" and individually as a "Party." Y• RECITALS: A. Lessee leases from Lessor certain real property (the "Property"), described as a café style restaurant with outdoor dining, known as Park Bench Café, whose address is 17732 Goldenwest Street, Huntington Beach, CA, together with a building and other related improvements (collectively referred to as the "Improvements"). The term "Premises" as used in this Lease shall mean both the Property and the Improvements. Lessee desires to lease the Premises in the manner set forth below. B. Parties have mutually agreed to extend the previous Lease Amendment, dated August 6, 2012,for an additional ten(10)year term,which shall end at 11:59 pm. On August 5,2032, unless extended, or sooner terminated as provided herein. C. This Amendment and extension to the previous Lease, with all terms and conditions of the previous Lease remain in place unless otherwise stated or amended in this Amendment. D. All references to Community Services Department shall be known as and referred to as Community & Library Services Department. E. SECTION 10. RENT, shall be amended to include: Sub-section (a) Minimum Base Rent. For the first year of this Lease, Lessee shall pay City as minimum rent for the Premises ("Minimum Base Rent") the sum of Seventeen Thousand Four Hundred and Eighteen Dollars ($17,418.00) per year, plus any increases 1 22-11771/294863 provided for Sub-Paragraph "(b)" below. Rent shall be paid in lawful money of the United States of America, without deduction or offset, at Huntington Beach City Hall, City Treasurer, 2000 Main Street, Huntington Beach, CA 92648, or the place City may designate in writing. Lessee shall pay City each month One Thousand Four Hundred and Fifty One Dollars and Fifty Cents ($1,451.50, which is one-twelfth of the Minimum Base Rent. Should monthly payments for Minimum Base Rent be required for any partial month pursuant to any provision of the Lease, such Rent shall be prorated in accordance with the actual number of days in the month in which such proration occurs. Sub-Section (b) Adjustment of Minimum Base Rent. Commencing on the first anniversary of this Lease, and each anniversary thereafter ("Rent Adjustment Date"), the Minimum base Rent shall be adjusted by the annual increase in the Consumer price Index published by the Bureau of Labor Statistics, United States Department of Labor, for the Los Angeles-Long Beach-Anaheim, CPI-U, as available for the prior one-year period from October 1 through September 30. In no event shall the Minimum Base Rent be decreased from the previous year. Sub-Section (c) Percentage Rent. In alternative to the Minimum Base Rent, each month Lessee shall pay City a sum ("Percentage Rent") equal to the amounts that the product of the percentage rate set forth in this paragraph multiplied by the cumulative Gross Sales at the Premises through that month of the Operational Year exceeds the Minimum Annual Rent owed for the same month. Lessee shall pay City Percentage Rent according to the following annual Gross Sales Percentages: (at this point, add in the table in Section 10 under Rent). Years 1 through 5 table header shall be removed and replace with "Percentage Rent". Additionally, beginning in year 1, the Minimum Base shall increase to $1,451.50 a month and shall be subject to annual CPI increase, not to exceed 5%". The table shall read as follow: $0 - $100,000 of Gross Sales = 8.0% $100,000.01 - $150,000.00 of Gross Sales = 9.0% Over $150,000.00 Gross Sales = 10.0% Minimum Base Rent* = $1,400 per month plus annual CPI 2 22-11771/294863 Years 6 — 10" and the subsequent table shall be removed and replaced with the statement: "The `Operational Year' is a one-year period ending December 31. For purposes of computing the percentage Rent for any partial Operational Year at the beginning or end of the Lease Term or any extension thereof, the volume of Gross Sales for that period shall be adjusted pro rata to the number of months in that partial Operational Year to determine the Percentage Rent to utilize." *Monthly rent will equal minimum base rent or percentage of gross sales for the month,whichever is greater NOW, THEREFORE, Lessor and Lessee agree as follows: 1. Integration and Conflicts. The Parties acknowledge and agree that this Amendment shall be integrated into the Lease as part thereof. In the event of any conflict or inconsistency between the provisions of the Lease and the terms of this Amendment,the terms of this Amendment shall control. 2. Binding Effect. This Amendment shall be binding upon, and insure to the benefit of, the Parties and their respective successors and assigns. 3. Joint Preparation. The Parties have been represented by counsel in the negotiation of the terms of this Amendment and have jointly prepared this Amendment. 4. Modifications. This Amendment may not be amended or modified unless such amendment or modification is in writing and signed by both Parties. 5. Counterparts. This Amendment may be executed in any number of duplicate originals and each such duplicate original shall be deemed to constitute but one and the same Amendment. THIS SPACE INTENTIONALLY LEFT BLANK 3 22-11771/294863 IN WITNESS WHEREOF, the parties hereto have caused this Lease Amendment to be executed by and through their authorized officers the day, month and year first above written. PARK BENCH CAFÉ CITY OF HUNTINGTON BEACH, a Municipal corporation of the State of California By� CIA C73A 1C-k. t 4.7 Print Na e Mayor Title APPROVED AST RM: By: City Attorney d.(,,/ \ kV dAt '&?,-Kki51C1 Print Name ITIAT A APPROVED: Title Director of Community & Library Services ATTEST: VI ED AND VED: 44401. 4Z6/-4/241,W City Clerk -VP/23 • Manager 4 22-11771/294863 VC �� ACCPRO CERTIFICATE OF LIABILITY INSURANCE DATE(MM/OD(YYYY) 3/13/2023 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED,the policy(ies)must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT NAME: Alena Hernandez Burnham WGB Insurance Solutions PHONE FAX CA 714 573-1770 CA License Number OF69771 (SCAN..Ex();714 515 3189 15901 Red Hill Avenue ADDREss: alena.hernandez@wgbib.com Tustin CA 92780 INSURER(S)AFFORDING COVERAGE NAIC II INSURER A:Sentinel Insurance Company,Ltd. 11000 INSURED PARKB-1 INSURER B:Hartford Accident and Indemnity Company 22357 Park Bench Cafe, Inc. Goldenwest INSURER C:Travelers Property Casualty Company of America 25674 17732 Huntington Beach CA 92647 INSURER D: INSURER E INSURER F: COVERAGES CERTIFICATE NUMBER:1454937844 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE 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.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSRLR TYPE OF INSURANCE AI SD DDL SWVD POLICY NUMBER (UBR MMIDD(YYYYI (MMIFF DD/YYYY) LIMITS A X COMMERCIAL GENERAL LIABILITY 72SBABC8006 9/20/2022 9/20/2023 EACH OCCURRENCE $1,000,000 DAMAGE RENTED CLAIMS-MADE X OCCUR PREMISES0(Ea occurrence) $1,000,000 MED EXP(Any one person) $10,000 PERSONAL&ADV INJURY $1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $2,000,000 POLICY JEa LOC PRODUCTS-COMP/OP AGO $2,000,000 OTHER: $ B AUTOMOBILE LIABILITY 72S8A8C8006 D/20/2022 9/20/2023 COMBINED SINGLE LIMIT g1,000,000 (Ea accident) ANY AUTO BODILY INJURY(Per person) $ OWNED SCHEDULED BODILY INJURY(Per accident) $ AUTOS ONLY AUTOS v HIRED X NON-OWNED PROPERTY DAMAGE _AUTOS ONLY _ AUTOS ONLY (Per accident) S UMBRELLA LIAB OCCUR EACH OCCURRENCE $ EXCESS LIAB CLAIMS-MADE AGGREGATE $ DED RETENTION$ $ C WORKERS COMPENSATION UB-005W80637A 4/1/2023 4/1/2024 X AND EMPLOYERS'LIABILITY SSATUTE OTH- ER YIN ANYPROPRIETORIPARTNER/EXECUTIVE N l A E.L.EACH ACCIDENT $1,000,000 O FFI C E RIME M B ER E X CL UD ED7 (Mandatory in NH) E.L.DISEASE-EA EMPLOYEE $1,000,000 If yes,describe under DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT $1,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS/VEHICLES(ACORD 101,Additional Remarks Schedule,may be attached If more space Is required) City of Huntington Beach,its elected or appointed officials,agents,officers,employees and volunteers are named as additiont i as r t e General Liability per attached SS 41 70 06 11 and SS 41 71 12 19 as required by written contract subject to the terms and cop$016FVVIBDp® yl r� id Non-Contributory applies on the General Liability per attached CG88100413. 8 MICHAEL E. ATES CITY AT RNEY CITY OF HU GTON BEACH CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of Huntington Beach 2000 Main Street AUTHORIZED REPRESENTATIVE Huntington Beach CA 92648 1.00.4�� ©1888-2015 ACORD CORPORATION. All rights reserved. ACORD 25(2016/03) The ACORD name and logo are registered marks of ACORD • ACORD® CERTIFICATE OF LIABILITY INSURANCE DATE(MMIPPIYYYY) 11/17/2022 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED,the policy(les)must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED,subject to the terms and conditions of the policy,certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). PRODUCER CONTACT NAME: Rachelle Williams Burnham WGB Insurance Solutions PHONE FAX CA License Number 0F69771 (AM.No,Eat):714-505-7000 cac.No);714-573-1770 15901 Red Hill Avenue ADDREss: rwilliams@wgbib.com Tustin CA 92780 INSURER(S)AFFORDING COVERAGE NAIC INSURER A:Pacific Compensation Insurance Company 11555 INSURED PARKS-1 INSURERS:Sentinel Insurance Company,Ltd. 11000 Park Bench Cafe,Inc. • 17732 Goldenwest INSURER C:Hartford Accident and Indemnity Company 22357 Huntington Beach CA 92647 INSURERD; INSURER E: INSURER F: COVERAGES CERTIFICATE NUMBER:231471965 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE 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.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADDL SUER POLICY EFF POLICY EXP LTR TYPE OF INSURANCE NSD SWVD POLICY NUMBER (MMIDD YY) IMMIDDIYYYYI LIMITS B X COMMERCIAL GENERAL LIABILITY 72SBABC8006 9/20/2022 9/20/2023 EACH OCCURRENCE $1,000,000 DAMAGE TO RENTED CLAIMS-MADE X OCCUR PREMISES(Ea occurrence) $1,000,000 MED EXP(My one person) $10,000 PERSONAL&ADV INJURY $1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $2,000,000 POLICY PRO-JECT LOC PRODUCTS-COMP/OPAGO 52,000,000 . .. OTHER: C AUTOMOBILE LIABILITY 72SBABC8006 9 22 9/20/2023 COMBINEO n0 SINGLE LIMIT $1,000,000 (Ea acckie ANY AUTO App OVER AS TO (Per accident)BODILY INJURY(Per person) $ — OWNED SCHEDULED BODILY INJURY(Per accident) $ AUTOS ONLY AUTOS X HIRED X NON-OWNED f�� PROPERTY DAMAGE S AUTOS ONLY _ AUTOS ONLY �y: Ml L.GATES $ CITY ATTORNEY UMBRELLA LIAB OCCUR OF}t JNYSNGTON MACHEACH OCCURRENCE $ EXCESS LIAB CLAIMS-MADE AGGREGATE S DED RETENTIONS A WORKERS COMPENSATION WA00302505 4/1/2022 4/1/2023 X STATUTE ER OTTH AND EMPLOYERS'LIABILITY ANYPROPRIETORIPARTNERJEXECUTIVE YI NI N 1 A E,L,EACH ACCIDENT $1,000,000 OFFICERIMEMBEREXCLUDED? ( ' (Mandatory In NH) E.L.DISEASE-EA EMPLOYEE S1,000,000 It yes,describe under DESCRIPTION OF OPERATIONS below E.L.DISEASE-POLICY LIMIT S 1,000,000 DESCRIPTION OF OPERATIONS!LOCATIONS!VEHICLES(ACORD 101,Additional Remarks Schedule,may be attached It more space Is required) City of Huntington Beach,its elected or appointed officials,agents,officers,employees and volunteers are named as additional Insured on the General Liability per attached SS 41 70 06 11 and SS 41 71 12 19 as required by written contract subject to the terms and conditions of the policy. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. City of Huntington Beach 2000 Main Street AUTHORIZED REPRESENTATIVE Huntington Beach CA 92648 Pao ©1988-2015 ACORD CORPORATION. All rights reserved. ACORD 25(2016/03) The ACORD name and logo are registered marks of ACORD POLICY NUMBER: 72 SBA BC8006 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNER, LESSEES OR CONTRACTOR CITY OF HUNTINGTON BEACH, ITS ELECTED OR APPOINTED OFFICIALS, AGENTS, OFFICERS, EMPLOYEES AND VOLUNTEERS 2000 MAIN ST HUNTINGTON BEAC CA 92648 LOC 001 BLDG 001 SS4170 AND SS4171 CITY OF HUNTINGTON BEACH, ITS ELECTED OR APPOINTED OFFICIALS, AGENTS, OFFICERS, EMPLOYEES AND VOLUNTEERS 2000 MAIN STREET HUNTINGTON BEACJ, CA 92648 RE: NUMBER OF JOB LOCATIONS: 1 Form IH 12 00 11 85 T SEQ.NO. 001 Printed In U.S.A. Page 001 Process Date: 05/27/22 Expiration Date: 0 9/20/22 POLICY NUMBER: 72 SBA BC8006 CHANGE NUMBER: 001 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS - SCHEDULED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: BUSINESS LIABILITY COVERAGE FORM SCHEDULE Name Of Additional Insured Person(s)Or Organization(s): SEE IH1200 Location(s) Of Covered Operations: SEE IH1200 Information required to complete this Schedule, if not shown above,will be shown in the Declarations. A. Section C. —Who Is An Insured is amended to B. With respect to the Insurance afforded to these include as an additional insured the person(s) or additional insureds, the following additional organization(s) shown in the Schedule, but only exclusions apply: with respect to liability for "bodily injury", "property This insurance does not apply to "bodily injury" or damage" or "personal and advertising injury" "property damage"occurring after: caused,in whole or in part, by: 1. All work, including materials, parts or 1. Your acts or omissions;or equipment furnished in connection with such 2. The acts or omissions of those acting on your work, on the project (other than service, behalf; maintenance or repairs) to be performed by or in the performance of your ongoing operations for on behalf of the additional insured(s) at the the additional Insured(s) at the location(s) location of the covered operations has been designated above. completed;or 2. That portion of "your work" out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project. Form SS 41 70 06 11 Page 1 of 1 Process Date: 05/27/22 Policy Expiration Date: 09/20/22 © 2011,The Hartford (Includes copyrighted material of insurance Services Office, Inc.,with its permission) POLICY NUMBER:72 Sak RC8006 CHANGE NUMBER: 001 y THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS - COMPLETED OPERATIONS This endorsement modifies insurance provided under the following: BUSINESS LIABILITY COVERAGE FORM SCHEDULE Name Of Additional Insured Person(s) Or Organization(s): SEE IH1200 Location And Description Of Completed Operations: SEE IH1200 Section C. Who Is An Insured is amended to Include the following: (2) Supervisory, Inspection, quality a. The person(s)or organization(s) shown in control, architectural, engineering or the Schedule on the Declarations Is also surveying activities or services; an additional insured, but only with (3) Maintenance of Job site safety, respect to liability for "bodily injury" or construction administration, "property damage" caused, in whole or in construction contracting, construction part, by "your work" and at the location management, computer consulting or designated and described in the Location design software development or And Description Of Completed Operations programming service, or selection of Schedule in the Declarations performed a contractor or programming service; for that additional insured and included in (4) Monitoring, sampling, or testing the "products-completed operations service necessary to perform any of hazard". the services included in (1), (2)or (3) b. With respect to the insurance afforded to above; these additional insureds, this Insurance (5) Supervision, hiring, employment, does not apply to "bodily injury", "properly training or monitoring of others who damage" or "personal and advertising are performing any of the services injury" arising out of the rendering of, or included in (1), (2)or(3)above; the failure to render, any professional c. The insurance afforded to these architectural, engineering or surveying additional insureds only applies to the services, Including: extent permitted by law. (1) The preparing, approving, editing of or failure to prepare or approve, shop drawings, maps, opinions, reports, surveys, change orders, field orders, designs, drawings, specifications, warnings, recommendations, permit applications, payment requests, manuals or instructions; Form SS 41 71 12 19 Page 1 of 1 Process Date:05/27/22 Policy Expiration Date: 09/20/22 O 2019,The Hartford (Includes copyrighted material of Insurance Services Office, Inc.,with its permission) Policy Number: 72SBABC8006 BUSINESS LIABILITY COVERAGE FORM F. OPTIONAL ADDITIONAL INSURED 3. Additional Insured -Grantor Of Franchise COVERAGES WHO IS AN INSURED under Section C. is If listed or shown as applicable In the Declarations, amended to include as an additional insured one or more of the following Optional Additional the person(s) or organization(s) shown in the Insured Coverages also apply. When any of these Declarations as an Additional insured - Optional Additional Insured Coverages apply, Grantor Of Franchise, but only with respect to Paragraph 6. (Additional Insureds When Required their liability as grantor of franchise to you. by Written Contract, Written Agreement or Permit) 4. Additional Insured - Lessor Of Leased of Section C., Who Is An Insured, does not apply Equipment to the person or organization shown in the a. WHO IS AN INSURED under Section C.Is Declarations. These coverages are subject to the amended to include as an additional terms and conditions applicable to Business insured the person(s) or organization(s) Liability Coverage in this policy, except as shown in the Declarations as an Additional provided below: Insured — Lessor of Leased Equipment, 1. Additional insured - Designated Person Or but only with respect to liability for "bodily Organization injury", "property damage" or "personal WHO IS AN INSURED under Section C. is and advertising injury" caused, in whole or amended to include as an additional insured in part, by your maintenance, operation or the person(s) or organization(s) shown in the use of equipment leased to you by such Declarations, but only with respect to liability person(s)or organization(s). for "bodily Injury", "property damage" or b. With respect to the insurance afforded to "personal and advertising injury" caused, in these additional insureds, this insurance whole or in part, by your acts or omissions or does not apply to any "occurrence" which the acts or omissions of those acting on your takes place after you cease to lease that behalf: equipment. a. In the performance of your ongoing 5. Additional Insured - Owners Or Other operations;or Interests From Whom Land Has Been b. In connection with your premises owned Leased by or rented to you. a. WHO IS AN INSURED under Section C.is 2. Additional Insured - Managers Or Lessors amended to include as an additional Of Premises insured the person(s) or organization(s) shown In the Declarations as an Additional a. WHO IS AN INSURED under Section C. Is Insured—Owners Or Other Interests From amended to include as an additional insured Whom Land Has Been Leased, but only the person(s)or organization(s)shown in the with respect to liability arising out of the Declarations as an Additional Insured - ownership, maintenance or use of that part Designated Person Or Organization;but only of the land leased to you and shown in the with respect to liability arising out of the Declarations. ownership,maintenance or use of that part of b. With respect to the insurance afforded to the premises leased to you and shown in the Declarations. these additional insureds, the following additional exclusions apply: b. With respect to the insurance afforded to these additional insureds, the following This insurance does not apply to: additional exclusions apply: (1) Any "occurrence" that takes place This insurance does not apply to: after you cease to lease that land;or (1) Any "occurrence" which takes place (2) Structural alterations, new after you cease to be a tenant In that construction or demolition operations premises;or performed by or on behalf of such person or organization. (2) Structural alterations, new 6. Additional Insured - State Or Political construction or demolition operations Subdivision—Permits performed by or on behalf of such person or organization. a. WHO IS AN INSURED under Section C.is amended to Include as an additional insured the state or political subdivision shown in the Declarations as an Additional Page 18 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM Insured — State Or Political Subdivision - (e) Any failure to make such Permits, but only with respect to inspections, adjustments, tests or operations performed by you or on your servicing as the vendor has agreed behalf for which the state or political to make or normally undertakes to subdivision has issued a permit. make in the usual course of b. With respect to the insurance afforded to business, in connection with the these additional insureds, the following distribution or sale of the products; additional exclusions apply: (f) Demonstration, installation, This insurance does not apply to: servicing or repair operations, (1) "Bodilyinjury", "property dama e" or except such operations performed 1 rY g at the vendor's premises in "personal and advertising injury" connection with the sale of the arising out of operations performed for product; the state or municipality;or "Bodilyinjury" or "propertydamage" (g) Products which, after distribution (2) j rY g or sale by you, have been labeled Included in the "product-completed or relabeled or used as a operations"hazard. container, part or ingredient of any 7. Additional Insured—Vendors other thing or substance by or for a. WHO IS AN INSURED under Section C.is the vendor;or amended to include as an additional (h) "Bodily injury" or "property insured the person(s) or organization(s) damage" arising out of the sole (referred to below as vendor)shown in the negligence of the vendor for its Declarations as an Additional Insured - own acts or omissions or those of Vendor, but only with respect to "bodily its employees or anyone else injury" or"property damage"arising out of acting on its behalf. However,this "your products" which are distributed or exclusion does not apply to: sold in the regular course of the vendor's (i) The exceptions contained in business and only if this Coverage Part Subparagraphs(d)or(f);or provides coverage for "bodily injury" or "property damage" included within the (ii) Such inspections, "products-completed operations hazard". adjustments, tests or servicing asb. The insurance afforded to the vendor is make the ory normndorally has ad to normally undertakes subject to the following additional exclusions: to make in the usual course of (1) This insurance does not apply to: business, in connection with (a) "Bodily injury" or "property the distribution or sale of the damage" for which the vendor is products. obligated to pay damages by (2) This insurance does not apply to any reason of the assumption of insured person or organization from liability in a contract or agreement. whom you have acquired such This exclusion does not apply to products, or any ingredient, part or liability for damages that the container, entering into, vendor would have in the absence accompanying or containing such of the contract or agreement; products. (b) Any express warranty 8. Additional Insured—Controlling Interest unauthorized by you; WHO IS AN INSURED under Section C. is (c) Any physical or chemical change amended to include as an additional insured in the product made intentionally the person(s) or organization(s) shown in the by the vendor; Declarations as an Additional Insured — (d) Repackaging, unless unpacked Controlling Interest, but only with respect to solely for the purpose of inspection, their liability arising out of: demonstration, testing, or the a. Their financial control of you; or substitution of parts under b. Premises they own, maintain or control instructions from the manufacturer, while you lease or occupy these premises. and then repackaged in the original container; Form SS 00 08 04 05 Page 19 of 24 BUSINESS LIABILITY COVERAGE FORM This insurance does not apply to structural The limits of insurance that apply to additional alterations, new construction and demolition insureds are described in Section D. — Limits Of operations performed by or for that person or Insurance. organization. How this insurance applies when other insurance 9. Additional Insured — Owners, Lessees Or is available to an additional insured is described in Contractors — Scheduled Person Or the Other Insurance Condition in Section E. — Organization Liability And Medical Expenses General a. WHO IS AN INSURED under Section C.is Conditions. amended to include as an additional G. LIABILITY AND MEDICAL EXPENSES insured the person(s) or organization(s) DEFINITIONS shown in the Declarations as an Additional Insured—Owner, Lessees Or Contractors, 1. "Advertisement" means the widespread public but only with respect to liability for "bodily dissemination of information or images that injury", "property damage" or "personal has the purpose of inducing the sale of goods, and advertising injury" caused, in whole or products or services through: in part, by your acts or omissions or the a. (1) Radio; acts or omissions of those acting on your (2) Television; behalf: (3) Billboard; (1) In the performance of your ongoing (4) Magazine; operations for the additional insured(s);or (5) Newspaper; (2) In connection with "your work" b. The Internet, but only that part of a web performed for that additional insured site that is about goods, products or and included within the "products- services for the purposes of inducing the completed operations hazard", but sale of goods,products or services;or only if this Coverage Part provides c. Any other publication that is given coverage for "bodily injury" or widespread public distribution. "property damage" included within the However, "advertisement"does not include: "products-completed operations a. The design, printed material, information hazard". or images contained in, on or upon the b. With respect to the insurance afforded to packaging or labeling of any goods or these additional insureds, this insurance products;or does not apply to"bodily injury", "property b. An interactive conversation between or damage" or "personal an advertising among persons through a computer network. injury" arising out of the rendering of, or the failure to render, any professional 2. "Advertising Idea" means any idea for an architectural, engineering or surveying "advertisement". services, including: 3. "Asbestos hazard" means an exposure or (1) The preparing, approving, or failure to threat of exposure to the actual or alleged prepare or approve, maps, shop properties of asbestos and includes the mere drawings, opinions, reports, surveys, presence of asbestos in any form. field orders,change orders, designs or 4. "Auto" means a land motor vehicle, trailer or drawings and specifications;or semi-trailer designed for travel on public (2) Supervisory, inspection, architectural roads, including any attached machinery or or engineering activities. equipment. But "auto" does not include 10. Additional Insured — Co-Owner Of Insured "mobile equipment". Premises 5. "Bodily injury"means physical: WHO IS AN INSURED under Section C. is a. Injury; amended to include as an additional insured b. Sickness;or the person(s) or Organization(s) shown In the c. Disease Declarations as an Additional Insured — Co- Owner Of Insured Premises, but only with sustained by a person and, if arising out of the respect to their liability as co-owner of the above, mental anguish or death at any time. premises shown in the Declarations. 6. "Coverage territory"means: Page 20 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (6) When You Are Added As An When this Insurance Is excess over other Additional Insured To Other insurance, we will pay only our share of Insurance the amount of the loss, if any, that That is other insurance available to exceeds the sum of: you covering liability for damages (1) The total amount that all such other arising out of the premises or insurance would pay for the loss in the operations, or products and completed absence of this insurance;and operations, for which you have been (2) The total of all deductible and self- added as an additional insured by that insured amounts under all that other insurance;or insurance. (7) When You Add Others As An We will share the remaining loss,if any,with Additional Insured To This any other insurance that is not described in Insurance this Excess Insurance provision and was not That is other insurance available to an bought specifically to apply in excess of the additional insured. Limits of Insurance shown in the However, the following provisions Declarations of this Coverage Part. apply to other insurance available to c. Method Of Sharing any person or organization who is an If all the other insurance permits additional insured under this Coverage contribution by equal shares,we will follow Part: this method also. Under this approach, (a) Primary Insurance When each insurer contributes equal amounts Required By Contract until it has paid its applicable limit of This insurance is primary if you insurance or none of the loss remains, have agreed in a written contract, whichever comes first. written agreement or permit that If any of the other insurance does not permit this insurance be primary. If other contribution by equal shares, we will insurance is also primary, we will contribute by limits. Under this method,each share with all that other insurance insurer's share is based on the ratio of its by the method described in c. applicable limit of insurance to the total below, applicable limits of insurance of all insurers. (b) Primary And Non-Contributory 8. Transfer Of Rights Of Recovery Against To Other Insurance When Others To Us Required By Contract a. Transfer Of Rights Of Recovery if you have agreed in a written If the insured has rights to recover all or contract, written agreement or part of any payment, including permit that this insurance is Supplementary Payments, we have made primary and non-contributory with under this Coverage Part, those rights are the additional insured's own transferred to us. The insured must do insurance, this insurance is nothing after loss to impair them. At our primary and we will not seek request, the insured will bring "suit" or contribution from that other transfer those rights to us and help us insurance. enforce them. This condition does not Paragraphs(a)and (b)do not apply to apply to Medical Expenses Coverage, other insurance to which the additional b. Waiver Of Rights Of Recovery (Waiver insured has been added as an Of Subrogation) additional insured. If the Insured has waived any rights of When this insurance is excess, we will recovery against any person or have no duty under this Coverage Part to organization for all orpart of anypayment, defend the insured against any"suit"if anyg e Y 9 including Supplementary Payments, we other insurer has a duty to defend the have made under this Coverage Part, we insured against that "suit". If no other also waive that right, provided the insured insurer defends, we will undertake to do waived their rights of recovery against so, but we will be entitled to the insured's such person or organization In a contract, rights against all those other insurers, agreement or permit that was executed prior to the injury or damage. Form SS 00 08 04 05 Page 17 of 24 POLICY NUMBER: 72 SBA BC8006 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNER, LESSEES OR CONTRACTOR CITY OF HUNTINGTON BEACH, ITS ELECTED OR APPOINTED OFFICIALS, AGENTS, OFFICERS, EMPLOYEES AND VOLUNTEERS 2000 MAIN ST HUNTINGTON BEAC CA 92648 LOC 001 BLDG 001 SS4170 AND SS4171 CITY OF HUNTINGTON BEACH, ITS ELECTED OR APPOINTED OFFICIALS, AGENTS, OFFICERS, EMPLOYEES AND VOLUNTEERS 2000 MAIN STREET HUNTINGTON BEACJ, CA 92648 RE: NUMBER OF JOB LOCATIONS: 1 Form IH 12 0011 85 T SEQ.NO. 001 Printed In U.S.A. Page 001 Process Date: 05/27/22 Expiration Date: 0 9/20/22 POLICY NUMBER :72 SBA BC8006 CHANGE NUMBER: 001 fay THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS - COMPLETED OPERATIONS This endorsement modifies insurance provided under the following: BUSINESS LIABILITY COVERAGE FORM SCHEDULE Name Of Additional insured Person(s)Or Organization(s): SEE IH1200 Location And Description Of Completed Operations: SEE IH1200 Section C. — Who is An insured is amended to include the following: (2) Supervisory, Inspection, quality a. The person(s)or organization(s) shown in control, architectural, engineering or the Schedule on the Declarations Is also surveying activities or services; an additional insured, but only with (3) Maintenance of job site safety, respect to liability for "bodily injury" or construction administration, "property damage" caused, in whole or In construction contracting, construction part, by "your work" and at the location management, computer consulting or designated and described in the Location design software development or And Description Of Completed Operations programming service, or selection of Schedule In the Declarations performed a contractor or programming service; for that additional insured and included in (4) Monitoring, sampling, or testing the "products-completed operations service necessary to perform any of hazard". the services included in (1), (2)or(3) b. With respect to the insurance afforded to above; these additional insureds, this Insurance (S) Supervision, hiring, employment, does not apply to "bodily injury", "property training or monitoring of others who damage" or "personal and advertising are performing any of the services injury" arising out of the rendering of, or included in(1), (2)or(3)above; the failure to render, any professional c. The insurance afforded to these architectural, engineering or surveying additional insureds only applies to the services, including: extent permitted by law. (1) The preparing, approving, editing of or failure to prepare or approve, shop drawings, maps, opinions, reports, surveys, change orders, field orders, designs, drawings, specifications, warnings, recommendations, permit applications, payment requests, manuals or instructions; Form SS 41 71 12 19 Page 1 of 1 Process Date:05/27/22 Policy Expiration Date: 09/20/22 © 2019,The Hartford (Includes copyrighted material of Insurance Services Office, Inc., with its permission) POLICY NUMBER: 72 SBA BC8006 CHANGE NUMBER: 001 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS - SCHEDULED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: BUSINESS LIABILITY COVERAGE FORM SCHEDULE Name Of Additional Insured Person(s)Or Organization(s): SEE IH1200 Location(s)Of Covered Operations: SEE 1H1200 Information required to complete this Schedule, if not shown above,will be shown In the Declarations. A. Section C. —Who Is An Insured is amended to B. With respect to the Insurance afforded to these include as an additional insured the person(s) or additional insureds, the following additional organization(s) shown in the Schedule, but only exclusions apply: with respect to liability for"bodily injury", "property This insurance does not apply to "bodily injury" or damage" or "personal and advertising Injury" "property damage"occurring after: caused,in whole or in part, by: 1. All work, including materials, parts or 1. Your acts or omissions; or equipment furnished in connection with such 2. The acts or omissions of those acting on your work, on the project (other than service, behalf; maintenance or repairs) to be performed by or in the performance of your ongoing operations for on behalf of the additional insured(s) at the the additional insured(s) at the location(s) location of the covered operations has been designated above. completed;or 2. That portion of "your work" out of which the Injury or damage arises has been put to its Intended use by any person or organization other than another contractor or subcontractor engaged In performing operations for a principal as a part of the same project. Form SS 41 70 06 11 Page 1 of 1 Process Date: 05/27/22 Policy Expiration Date: 09/20/22 © 2011,The Hartford (Includes copyrighted material of Insurance Services Office, Inc.,with its permission) / �� NTINGT 0o ,F° '' City of Huntington Beach 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 • www.huntingtonbeachca.gov - o coufm �P i�� Office of the City Clerk � Robin Estanislau, City Clerk March 13, 2023 Park Bench Cafe Attention: Michael and/or Christine Bartusik 20431 Graystone Lane Huntington Beach, CA 92646 Dear Mr. and Mrs. Bartusik: Enclosed is an executed copy of the Amendment to Lease Amendment between the COHB and Michael & Christine Bartusick dba Park Bench Café, approved by City Council on March 21, 2023. Sincerely, / o, ktizillAd Robin Estanislau, CMC City Clerk RE:ds Enclosure Sister City: Anjo, Japan LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND MICHAEL AND CHRISTIE BARTUSICK,dba PARK BENCH CAFÉ THIS LEASE (the "Lease") is made and entered into effective4-r,t6u,sr , 2O/ by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and MICHAEL and CHRISTIE BARTUSICK, dba PARK BENCH CAFÉ, a California corporation,hereinafter"Lessee." WHEREAS, City wishes to lease certain real property (the "Property"), described as a cafe style restaurant with both indoor and outdoor dining, known as the Park Bench Cafe, whose address is 17732 Goldenwest Street, Huntington Beach, CA, together with a building and other related improvements (collectively referred to as the "Improvements"). The term "Premises" as used in this Lease shall mean both the Property and the Improvements. Lessee desires to lease the Premises in the manner set forth below. NOW,THEREFORE,the parties covenant and agree as follows: SECTION 1. SUPERSEDING OF PRIOR LEASE This Lease shall supersede and replace any existing lease agreement(s) for the Premises currently entered into by and between the parties and all supplemental agreement(s) entered into by and between the parties regarding the existing lease agreement(s). SECTION 2. GRANT OF CONCESSION ON THE PREMISES City, pursuant to the terms of this Lease, grants to Lessee for the purposes stated herein, the right,privilege and duty to equip, operate and maintain a concession open to the public located on the Premises (hereinafter sometimes referred to as the"Concession"). Lessee shall not use the Premises for any other purpose or business. The legal description of the Premises is set forth in Exhibit "A", which is attached and incorporated herein by this reference. A map depicting the Premises is set Page 1 of 46 12-3281/80661 241 forth in Exhibit "B", which is attached hereto and incorporated herein by this reference. This Lease is not intended to confer third-party beneficiary status to anyone. SECTION 3. RESERVATIONS,ENCUMBRANCES AND RIGHTS-OF-WAY (a) City expressly reserves all natural resources in, on, or two hundred fifty (250) feet under the Premises, including, without limitation, oil, coal, natural gas and other hydrocarbons, minerals, aggregates, timber and other geothermal resources, as well as the right to grant leases or other contractual arrangements in and over the Premises for the extraction of such natural resources. However, such leasing or other arrangement shall be neither inconsistent nor incompatible with the rights or privileges of Lessee under this Lease. (b) City expressly reserves a right to enter upon the Premises with as much advance written,verbal or electronic notice as possible to Lessee for any reason associated with public health, safety or welfare, or for the protection of life, limb or property. In all other cases unless otherwise specifically set forth herein, City reserves the right for such entry but City shall give Lessee at least twenty-four (24) hours advance written, verbal or electronic notice. City shall have a right of reasonable access to the Premises across Lessee owned, controlled or occupied lands adjacent to the Premises, if any,for any purpose associated with this Lease. (c) City expressly reserves the right to lease, convey, or encumber the Premises,in whole or in part, for any purpose not inconsistent or incompatible with the rights or privileges of Lessee under this Lease. In addition, Lessee agrees to subordinate the Lease to any existing or future City fmancing regarding the Premises or any portion thereof. Lessee also agrees to cooperate and provide any documentation necessary for City to obtain any such financing. Page 2 of 46 12-3281/80661 242 (d) This Lease is subject to pre-existing contracts, leases, licenses, easements, encumbrances and claims affecting the Premises and it is made without warranty by City of title, condition or fitness of the land for the stated or intended use. SECTION 4. TIME OF ESSENCE Time shall be of the essence of this Lease and each and all of its terms, covenants or conditions in which performance is a factor. SECTION 5. TERM This Lease shall commence at 12:01 a.m. on AU a sr b, 20Lfor a ten (10) year term, which shall end at 11:59 p.m. on //U (f sr , 20A, unless extended, or sooner terminated, as provided for herein. Lessee agrees that the cafe/restaurant shall be operational a minimum of 250 days per year. An operational day is defined as being open for business a minimum of four (4) hours per day. SECTION 6. CONDITIONS OF PREMISES AS IS The taking of possession of the Premises by Lessee shall,in itself,constitute acknowledgment that the Premises are in good and tenantable condition. Upon taking possession of the Premises, Lessee agrees to accept the Premises in their presently existing condition,"as is", and agrees that City shall not be obligated to make any alterations,additions or betterments thereto. SECTION 7. DURATION OF PUBLIC FACILITIES By entering into this Lease, City makes no stipulation as to the type, size,location or duration of public facilities (excluding the Premises),including,without limitation, any City parking lots to be maintained on property owned,controlled or occupied by City. SECTION 8. ADDITIONS,ALTERATIONS AND REMOVAL (a) No modifications, alterations or additions to the Premises, including, without limitation, construction of Improvements or changes to structural design, landscape Page 3 of 46 12-3281/80661 243 design, or interior or exterior furnishings, shall be constructed or made by Lessee without Lessee first obtaining the prior written approval of City, which will not be unreasonably withheld. (b) Except as provided under this Lease, no alteration or removal of existing Improvements on or natural features of the Premises shall be undertaken without Lessee first obtaining the prior written approval of City. (c) Lessee's obligation to obtain City's prior written approval is separate and independent of Lessee's obligation to obtain any permits from City, such as, without limitation, a building permit. SECTION 9. CITY'S CONTRACT ADMINISTRATOR City's Director of Community Services, or his or her designee, shall be City's Contract Administrator for this Lease with the authority to act on behalf of City for the purposes of this Lease, and all City approvals and notices required to be given herein to City shall be so directed and addressed. SECTION 10. RENT Lessee agrees to pay to City as rent(the "Rent") for the use and occupancy of the Premises a sum equal to the following percentages of the amount of"Gross Sales," as defined in Section 12 below: Years 1 through 5 $0$100,000.00 of Gross Sales =7.0%; $100,000.01 -$150,000.00 of Gross Sales =8.0%; Over$150,000.00 of Gross Sales =9.0% Minimum Base Rent* =$1,000 per month plus annual CPI increases Years 6 through 10 $0 $100,000.00 of Gross Sales =7.5%; $100,000.01 -$150,000.00 of Gross Sales =8,5%; Over$150,000.00 of Gross Sales =9.5% Minimum Base Rent* =$1,250 per month plus annual CPI increases *Monthly rent will equal minimum base rent or percentage of gross sales for the month-whichever is greater. Page 4 of 46 12-3281/80661 244 Lessee shall pay the Rent monthly to City at the City Treasurer's Office, P.O. Box 711, Huntington Beach, California, 92648, or at such other place or places as City may from time-to-time designate by written notice delivered to Lessee. Lessee shall pay the Rent, which must be received by the City Treasurer within fifteen (15) calendar days after the end of the month for which the Rent is being paid,or on the next business day if the fifteenth day falls on a weekend or holiday. SECTION 11. LATE CHARGE AND PENALTY If the Rent is not received by the City Treasurer within ten(10) calendar days after the end of the month for which the Rent is being paid, or the next business day if the twentieth day falls on a weekend or holiday, Lessee shall pay the following late charge and penalty: (1) a late charge of ten percent (10%) shall be applied to any outstanding balance after any payment hereunder is due but unpaid; and (2) one and a half percent(1 'A%) penalty per month shall be added for each month the Rent is due but unpaid. With respect to any other payments required by Lessee, a one and a half percent (1 ''A%) penalty per month shall be added for each month such payment hereunder is due but unpaid. SECTION 12. GROSS SALES DEFINED For the purpose of this Lease, the term "Gross Sales" shall mean the total price of all merchandise, food and beverages, or services sold or rendered, or equipment rented, in, on, or from the Premises by Lessee, or anyone contracting with Lessee, including, without limitation, its agents or sublessees (collectively or individually, "Lessee Party(ies)"),whether wholesale or retail, whether for cash or on credit, and if on credit whether or not paid, and whether in exchange for any other product, commodity, service, commercial paper or forbearance, and shall include,without limitation, the following: (a) All revenues, receipts, commissions or proceeds from on-line sales by Lessee Party(ies), and/or from all public telephones, vending, weighing and all other Page 5 of 46 1 2-32 8 1/8 0 6 6 1 245 machines owned, operated, or leased to or by Lessee Party(ies) in, on, or from the Premises; (b) All revenues, receipts, commissions or proceeds from sales based on orders solicited or taken,in, on, or from the Premises for merchandise,food and beverages,or services to be delivered or rendered off, or from sources outside, the Premises, including, without limitation, all orders taken in, on, or from the Premises although the orders may be filled elsewhere; (c) All revenues, receipts, commissions or proceeds from the renting of equipment of any kind in, on, or from the Premises; and (d) All revenues, receipts, commissions or proceeds generated from offsite but delivered through the Concession. (e) All revenues, receipts, commissions or proceeds made by Lessee Party(ies) or their employees or others acting on their behalf for the rendition of services of any kind whatsoever,made in,on, or from the Premises. (f) All other revenues, receipts, commissions or proceeds generated by, arising or derived whatsoever from the use of the Premises or derived whatsoever from any business conducted in, on, or from the Premises. For purposes of computing the Gross Sales figure on which to calculate the Rent,the amount of Gross Sales shall start over at zero dollars on January 1 of each year. If the Lease commences on any date other than January 1, the Gross Sales calculation begins from such commencement date and runs through December 31 of such Lease commencement year. Page 6 of 46 12-3281/80661 246 SECTION 13. GROSS SALES EXCLUSIONS Gross Sales shall not include the following items, and Lessee may deduct such items from Gross Sales to the extent they have been included therein or have been included in a prior computation of Gross Sales on which the Rent has been paid under this Lease to City: (a) Any sales, excise or other taxes otherwise includable in Gross Sales and which become part of the total price of merchandise, food and beverages, or services sold or rendered, or equipment rented, in, on, or from the Premises where Lessee must account for and remit the taxes to the government entity or entities which impose them,but only if such taxes are added to the total price and collected from customers; (b) Any transfer of trade inventory from the Premises to the manufacturer or supplier from whom it was obtained by Lessee; (c) Sales of Trade Fixtures(as defined in Section 51 below); (d) Sums and credits received in the settlement of claims for loss of or damage to trade inventory or Trade Fixtures;and (e) Any sales resulting in a cash or credit refund to a customer in the ordinary course of business. SECTION 14. BOOKS AND RECORDS Lessee shall keep true and accurate books and records showing all of its business transactions in separate records of account for the Concession in a manner acceptable to City, and City and/or its designated representatives shall have the right, at all reasonable times, to inspect such books and records including, without limitation, State of California sales or use tax returns or other State return records, and Lessee hereby agrees that all such records and instruments shall promptly be delivered and made available to City and/or its designated representatives within thirty (30) days of receiving Page 7 of 46 12-3281/80661 247 written request therefor. Lessee shall furnish to City and/or its designated representatives copies of its quarterly California sales and use tax returns at the time each is filed with the State of California. The books and records shall show the total amount of Gross Sales made each calendar month in, on, or from the Premises and any exclusions listed in Section 13 above. All sales and charges shall be recorded by means of cash registers which display the amount of the transaction certifying the amount recorded. The register shall be equipped with devices which log in daily sales totals and which shall record on tapes the transaction numbers and sales details. At the end of each day the tape shall record the total sales for that day. Lessee agrees to maintain on the Premises, or another location subject to the prior written approval of City, all records, books of account and cash register tapes, showing, or in any way pertaining to the Gross Sales made in, on,or from the Premises during such calendar month, including, without limitation, State of California sales or use tax returns or other State tax returns,for a period of five(5)years following the close of each calendar month. SECTION 15. STATEMENT OF GROSS SALES/AUDIT At the time specified in Section 10 of this Lease for the payment of the Rent, Lessee shall deliver to City a true and accurate statement signed by Lessee or by an authorized employee of Lessee showing the total Gross Sales and any exclusions listed in Section 13 above made during the preceding calendar month and the amount of the Rent then being paid calculated on such Gross Sales pursuant to this Lease. The acceptance by City of any monies paid to City by Lessee as the Rent, as shown by any statement furnished by Lessee, shall not be construed as an admission of the accuracy of the statement,or of the sufficiency of the amount of the Rent payment, and City shall be entitled to review the adequacy of such payment as set forth herein. By the end of each January, Lessee shall deliver to City a year-end statement showing the total amount of Gross Sales made in,on,or from the Premises in each month of the preceding year,the total of any exclusions,the total Rent paid to City for each of those months, all with year-end totals. City may at any time within three (3) years after Page 8 of 46 12-3281/80661 248 receiving the year-end statement, at its sole cost and expense, cause all records,books of account and cash register tapes for the year purportedly covered by the statement, to be audited by City or an accountant selected by City. Lessee shall,within thirty (30) days of receiving written notice of City's desire for such an audit, deliver and make available all such records, books of account and cash register tapes to City or its designated representative for City's use in the audit and/or for copying. If the audit discloses that Gross Sales were understated and/or exclusions overstated, Lessee shall immediately pay the additional Rent, together with a penalty thereon from the date it was due at the penalty rate set forth in Section 11 above. Furthermore, Lessee shall promptly on demand reimburse City for the full cost and expense of the audit should the audit disclose that the questioned year-end statement understated Gross Sales (including an overstatement of exclusions) or the Rent by any amount greater than Two Hundred Fifty Dollars ($250.00). City further reserves the right to examine and audit all such records, books of account and cash register tapes at any time during the three (3) year period following the expiration or termination of this Lease. In addition, City shall have the right to enter upon the Premises during business hours and with two (2)hours advance written,verbal or electronic notice to Lessee to perform any audit or inspection function with respect to this Lease. Lessee, its bookkeeper and/or accountant shall respond to all questions and inquiries of City with respect to the books, records, statements and other documentation being examined, and shall promptly provide other further documentation as may be required by City. City is entitled to take statements by deposition under oath of Lessee, its officers, bookkeepers and/or accountants or any person who prepared the books, records, statements and other documentation required to be provided by Lessee under this Lease. SECTION 16. SECURITY DEPOSIT Lessee's existing security deposit of Two Thousand Five Hundred Dollars ($2,500.00) to guarantee all of Lessee's obligations, liabilities, duties and responsibilities under the Lease, Page 9 of 46 I2-3281/80661 249 including, without limitation, the repair and maintenance of the Premises as provided herein, shall remain in'effect during the rental term. No interest shall accrue on cash deposits to the benefit of Lessee, but interest shall accrue on a CD or savings account and shall be paid to Lessee under the terms of the CD or savings account. Lessee shall send a copy of each renewal of the CD to the City Treasurer to ensure that City has the records of each active deposit account. SECTION 17. USE OF DRINK SPONSOR Lessee shall comply with any exclusivity agreement which the City may have with a drink sponsor. This exclusivity shall not apply to third-party rentals that bring their own drink products. SECTION 18. QUALITY OF SALES,RENTALS AND SERVICES Lessee, at its sole cost and expense, shall equip, operate, manage and maintain the Premises and Concession and shall keep the same equipped and maintained in a manner acceptable to City during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. It is the intent of City that the Concession's services be provided in a manner to meet the needs of the visiting public, and should City deem the Concession's hours of operation and/or food, merchandise, services or rentals inadequate to meet such needs, City may require Lessee to make such changes requested by City. Lessee shall not use or permit the Premises to be used, in whole or in part, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period for any purpose other than as herein set forth, without the prior written consent of City. Except as permitted in advance in writing by City, all foods and beverages shall be sold in disposable paper or plastic containers. No pull-top cans or styrofoam containers are to be vended or dispensed from the Premises unless pre-approved in writing by City. Lessee,wherever feasible,shall eliminate the use of non-recyclable containers and plastics. City may from time to time review the Page 10 of 46 12-3281/80661 250 items sold and containers or utensils used or dispensed by Lessee. City reserves the right to prohibit the sale or use of non-recyclable containers or plastics. City in its sole discretion reserves the right to prohibit Lessee's sale,provision or rental of any item or service rendered or performed, which it deems objectionable or offensive, beyond the scope deemed necessary for proper service to the public, inappropriate for sale, provision or rental by the Concession,or of inferior quality. The restaurant must be in operation for a minimum of 250 days during the calendar year. An operational day is defined as being open for business a minimum of four consecutive hours. SECTION 19. INDEMNIFICATION,DEFENSE AND HOLD HARMLESS Lessee hereby agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with (1) the use or occupancy of the Premises by Lessee, its officers, employees or agents, or (2) the death or injury of any person or the damage to property caused by a condition of the Premises, or (3) the death or injury of any person or the damage to property caused by any act or omission of Lessee, its officers, employees or agents, or (4) any failure by Lessee to keep the Premises in a safe condition, or (5) Lessee's (or Lessee's agents and/or sublessees, if any) performance of this Lease or its failure to comply with any of its obligations contained in this Lease by Lessee,its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee shall hold all Trade Fixtures,personal property and trade inventory on the Premises at the sole risk of Lessee and save City harmless from any loss or damage thereto by any cause whatsoever, except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense Page 11 of 46 12-3281/80661 251 and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee, SECTION 20. WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE Lessee acknowledges awareness of Section 3700 et seq. of the California Labor Code, which requires every employer to be insured against liability for workers' compensation. Lessee covenants that it shall comply with such provisions prior to the commencement of this Lease. Lessee shall obtain and furnish to City workers' compensation and employers' liability insurance in amounts not less than the State statutory limits. Lessee shall require all sublessees and contractors to provide such workers' compensation and employers' liability insurance for all of the sublessees' and contractors' employees. Lessee shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and Lessee shall similarly require all sublessees and contractors to waive subrogation. SECTION 21. GENERAL PUBLIC LIABILITY INSURANCE In addition to the workers' compensation and employers' liability insurance and Lessee's covenant to defend, hold harmless and indemnify City, Lessee shall obtain and furnish to City, a policy of general public liability insurance, including motor vehicle coverage against any and all claims arising out of or in connection with the Premises, This policy shall indemnify Lessee, its officers, employees and agents, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Premises, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of One Million Dollars ($1,000,000.00) per occurrence. If coverage is provided under a form which includes a designated Page 12 of 46 12-3281/80661 252 general aggregate limit,the aggregate limit must be no less than One Million Dollars ($1,000,000.00) for the Premises. This policy shall name City, its officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Lease shall be deemed excess coverage and that Lessee's insurance shall be primary. Under no circumstances shall said above-mentioned insurance contain a self-insured retention,or a"deductible"or any other similar form of limitation on the required coverage. SECTION 22. PROPERTY INSURANCE Lessee shall provide before commencement of this Lease and shall obtain and furnish to City, at Lessee's sole cost and expense,property and fire insurance with extended coverage endorsements thereon, by a company acceptable to City authorized to conduct insurance business in California, in an amount insuring for the full insurable value of all Improvements, Trade Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory in or on the Premises against damage or destruction by fire, theft or the elements. This policy shall contain a full replacement cost endorsement naming Lessee as the insured and shall not contain a coinsurance penalty provision. The policy shall also contain an endorsement naming City as an Additional Insured. The policy shall contain a special endorsement that such proceeds shall be used to repair, rebuild or replace any such Improvements, Trade Fixtures,personal property whether or not owned or leased by Lessee, and all trade inventory so damaged or destroyed; and if not so used, such proceeds (excluding any insurance proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee, and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City. The policy shall also contain a special endorsement that if the Premises are so destroyed triggering the parties' ability to terminate as set forth in Section 52 (Destruction) below, and either party elects to terminate the Lease, the entire Page 13 of 46 1 2-3 2 8 1/8066 1 253 amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City. The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as necessary to restore the Premises or for any such other purpose(s) as City sees fit. This policy shall also contain the following endorsements: (a) The insurer shall not cancel or reduce the insured's coverage without(30) days prior written notice to City; (b) City shall not be responsible for premiums or assessments on the policy. A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with City prior to the execution of this Lease. At least thirty (30) days prior to the expiration or termination of any such policy, a signed and complete certificate of insurance showing that coverage has been renewed shall be filed with City. SECTION 23. INCREASE IN AMOUNT OF GENERAL PUBLIC LIABILITY AND PROPERTY INSURANCE Not more frequently than once every two (2) years, if, in the sole opinion of City,the amount and/or scope of general public liability insurance in Section 21 above and/or property insurance coverage in Section 22 above at that time is not adequate, Lessee shall increase the insurance coverage as reasonably required by City. SECTION 24. CERTIFICATES OF INSURANCE;ADDITIONAL INSURED ENDORSEMENTS Prior to commencement of this Lease, Lessee shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease;these certificates shall: Page 14 of 46 12-3281/80661 254 (a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in force;and (c) shall promise to provide that such policies shall not be canceled or modified without thirty(30) days'prior written notice of City;however tell(10) days' prior written notice in the event of cancellation for nonpayment of premium, which 10-day notice provision shall not apply to property insurance in Section 22 above. Lessee shall maintain the foregoing insurance coverages in force during the entire term of the Lease or any renewals or extensions thereof or during any holdover period. The requirement for carrying the foregoing insurance coverages shall not derogate from Lessee's defense,hold harmless and indemnification obligations as set forth in this Lease. City or its representatives shall at all times have the right to demand the original or a copy of any or all the policies of insurance. Lessee shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. SECTION 25. INSURANCE HAZARDS Lessee shall not commit or permit the commission of any acts on the Premises nor use or permit the use of the Premises in any manner that will increase the existing rates for, or cause the cancellation of any liability, property, or other insurance policy for the Premises or required by this Lease. Lessee shall, at its sole cost and expense, comply with all requirements of any insurance carrier providing any insurance policy for the Premises or required by this Lease necessary for the continued maintenance of these policies at reasonable rates. SECTION 26. MAINTENANCE OF PREMISES City's maintenance responsibilities of the Premises shall be limited to maintaining all sewers and drain lines, roofs and attached public restrooms (if they exist). Except as set forth in the Page 15 of 46 12-3281/80661 255 preceding sentence, Lessee agrees to maintain the Premises in good order and repair, at Lessee's sole cost and expense, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, pursuant to the City's maintenance standards. A copy of the quarterly evaluation summary sheet setting forth the City's maintenance checklist is attached as Exhibit "C", and incorporated herein by this reference. Except as provided above, Lessee, at its sole cost and expense, shall perform any maintenance and repairs including, without limitation, facility maintenance and landscape maintenance on the Premises. Lessee's obligation includes, without limitation, maintaining and operating the Premises and adjacent areas to a distance of not more than fifty (50) feet, in a clean, safe,wholesome and sanitary condition free of trash, garbage or obstructions of any kind and in compliance with any and all present and future laws, general rules or regulations of any governmental authority now, or at any time during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, in force, relating to sanitation or public health, safety or welfare, or for the protection of life, limb or property; and Lessee shall at all times faithfully obey and comply with all laws, rules and regulations applicable thereto. Lessee, at its sole cost and expense, shall remedy without delay any defective, dangerous or unsanitary condition(s) caused by Lessee or anyone related thereto. Provided, however,that Lessee shall have no obligation to repair or maintain sewer lines or respond to sewer leaks. Lessee shall paint, stain or seal the Premises' exterior surfaces a minimum of every three (3) years, unless City determines in its sole discretion that such work shall be done on a more frequent basis. All exterior metal surfaces, except the roof, shall be painted with rust resistant paint no less than once every other year. Any and all graffiti on the Premises shall be removed by Lessee, at its sole cost and expense, within forty-eight (48) hours of Lessee receiving notice thereof or of Lessee becoming aware of such graffiti. In addition, with or without notice from City, Lessee shall, at its Page 16 of 46 12-3281/80661 256 sole cost and expense, repair and/or replace any broken glass within forty-eight (48) hours of its becoming broken,regardless of cause, except by fault of City. Except as provided above for graffiti and broken glass, Lessee, at its sole cost and expense and with or without notice from City, shall repair and/or replace all damage or destruction to the Premises caused by act(s) of vandalism as soon as possible but in no event later than fourteen (14) days after the date such damage or destruction occurred. Lessee, at its sole cost and expense, shall repair and/or replace all other damage or destruction to the Premises,regardless of cause,except by fault of City. Lessee shall comply with all written notices served by City with regard to the care and maintenance of the Premises. Any written notice hereunder shall specify the work to be done and the period of time deemed to be reasonably necessary for completion of such work. Should Lessee fail to commence making the necessary repairs within seven (7) days after receiving such notice, or within twenty-four(24) hours of the glass becoming broken in the case of broken glass, or fail to diligently proceed to complete the necessary repairs within the period of time reasonably specified in the City's notice, or within forty-eight (48) hours of the glass becoming broken in the case of broken glass, or within the forty-eight(48) hour time period for removing graffiti, or within fourteen (14) days of the date that the vandalism damage or destruction occurred,City shall proceed to cause the required work to be performed, and Lessee shall promptly reimburse City for the cost of labor and materials thereof and pay City a penalty on such costs at the penalty rate set forth in Section 11 above from the date the costs were incurred by City to the date they are reimbursed to City by Lessee. Lessee hereby expressly waives the right to make repairs at the expense of City and the benefit, if any, of the provisions of Sections 1941 and 1942 of the California Civil Code relating thereto. Page 17 of 46 12-3281/80661 257 SECTION 27. RENT CREDIT City in its sole discretion may decide to give Lessee rent credit if Lessee undertakes (1) any repair or maintenance obligation of City under this Lease, (2) any work City in its sole discretion deems necessary and appropriate or (3) any Lessee improvements. Prior to Lessee undertaking any such work,City must agree in writing to the amount of and procedures for the rent credit,the work to be done by Lessee and the cost of such work. The maximum rent credit shall be no more than $50,000 through the full term of the Lease. SECTION 28. DAMAGE,DESTRUCTION OR NUISANCE Lessee shall not commit or permit the commission by others of any damage or destruction of, on, or to the Premises and/or Concession. Lessee shall not maintain, commit or permit the maintenance or commission of any nuisance as defined in Section 3479 and/or Section 3480 of the California Civil Code on the Premises; and Lessee shall not use or permit the use of the Premises for any unlawful purpose. SECTION 29. TAXES This Lease may create a possessory interest in property, which is subject to taxation. In the event that such possessory interest is created, Lessee agrees to be subject to the payment of and to pay taxes levied on such interest, at its sole cost and expense. Lessee also agrees to pay, at its sole cost and expense, before they become delinquent all other lawful taxes, assessments or charges, which at any time may be levied by any governmental agency including,without limitation,the State, County, City or any tax or assessment levying body upon any interest in this Lease,or any possessory right which Lessee may have in or to the Premises,by reason of Lessee's use or occupancy thereof or otherwise, as well as all taxes, assessments, and charges on Trade Fixtures, personal property and trade inventory in, on, or about the Premises. Upon request, Lessee shall promptly furnish to City Page 18 of 46 12-3281/80661 258 satisfactory evidence establishing such payment. Lessee shall comply with all laws, regulations and ordinances regarding the collection of taxes due a government agency. SECTION 30. PAYMENT OF OBLIGATIONS Lessee shall promptly pay, at its sole cost and expense, before they become delinquent, any and all bills, debts, liabilities and obligations incurred by Lessee in connection with Lessee's occupation and use of the Premises and/or operation of the Concession. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. SECTION 31. UTILITIES AND SERVICES Excluding any attached public restrooms, if they exist, Lessee shall be responsible for the payment of all utility charges, including, without limitation, gas, electricity, water, telephone service, cable TV service, and the furnishing of all necessary refuse and garbage containers and the removal and disposal of all rubbish,refuse and garbage resulting from the operation of the Premises and/or the Concession. All such rubbish, refuse and garbage removed shall be disposed of in accordance with applicable laws and local ordinances. All trash containers and/or trash bins shall be adequately screened and located to the satisfaction of City. For the purposes of this Section, sewage disposal shall be construed as a utility. All such charges shall be paid by Lessee directly to the provider of the service and shall be paid as they become due and payable. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. SECTION 32. BUSINESS LICENSE Lessee shall maintain a business license from City during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. SECTION 33. SIGNS,ADVERTISING AND APPROVAL OF NAME City shall have the right to approve in its sole discretion and at any time require Lessee to change or remove signs, names, placards, decorations or advertising placed on, or inscribed,painted Page 19 of 46 12-3281/80661 259 or affixed upon the Premises. Should City approve of any sign, name, placard, decoration or advertising, Lessee shall maintain the same at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period in good appearance and repair. All signs, names, placards, decorations or advertising must comply with all requirements of any governmental authority with jurisdiction. SECTION 34. NO ASSIGNING,SUBLEASING OR ENCUMBERING (a) Prohibition of Assignment. The parties acknowledge that City is entering into the Lease in reliance upon the experience and abilities of Lessee and its principals. Consequently,Lessee shall not voluntarily assign, encumber or otherwise transfer its interest in the Lease or in the Premises, or sublease all or any part of the Premises, or allow any other person or entity (except Lessee's authorized representatives) to occupy or use all or any part of the Premises without the prior written consent of City, which consent shall not be unreasonably withheld. Provided, however, that City's consent shall not relieve Lessee from any and all of its obligations, liabilities, duties or responsibilities under this Lease. Any assignment, encumbrance, occupation or use, sublease or other transfer without such consent shall be voidable and,at City's sole discretion,shall constitute a Default of this Lease. (b) Consent to Transfer. City's consent to any assignment, encumbrance, occupation or use, sublease or other transfer is subject to Lessee providing City with evidence satisfactory to City that the proposed, assignee, encumbrancer, occupier or user, sublessee or other transferee has suitable financial strength, experience and character for operation and control of the Premises and the Concession and that the use of the Premises by the proposed assignee,encumbrancer,occupier or user, sublessee or other transferee is consistent with that specified herein, and is commercially reasonable. Page 20 of 46 12-3281/80661 260 Any proposed assignee, encumbrancer, occupier or user, sublessee or other transferee shall agree to abide by the terms and conditions of the Lease including, without limitation, all the obligations, liabilities, duties and responsibilities of Lessee, and other conditions imposed upon it pursuant to law. An approval by City to one assignment, encumbrance, occupation or use, sublease or other transfer shall not be deemed to be an approval to any other assignment, encumbrance, occupation or use, sublease or other transfer. (c) Voluntary assignment defined. Except as otherwise expressly provided herein, any dissolution, merger, consolidation or reorganization of Lessee, or the sale or other transfer resulting in a transfer of a controlling percentage of the capital stock of Lessee (other than a transfer by will, devise, bequest, intestate succession, a transfer to or between the family members of Lessee, or a transfer to or between one or more trusts for the benefit of Lessee and/or Lessee's family members, where applicable) shall be deemed a voluntary assignment. (d) Exceptions. Notwithstanding the foregoing paragraphs or anything to the contrary contained herein, City's consent shall not be required for an assignment or subleasing to an Affiliate, Subsidiary or Successor of Lessee (for purposes hereof, an "Affiliate," a"Subsidiary" and a"Successor" of Lessee are defined as follows: (a) an"Affiliate" is any corporation which directly or indirectly controls or is controlled or is under common control with Lessee (for this purpose, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation,whether through the ownership of voting securities or by contract or otherwise), (b) a"Subsidiary"shall mean any corporation or partnership not less than twenty-five percent (25%) of whose outstanding stock shall, at the time, Page 21 of 46 12-3281/80661 261 be owned directly or indirectly by Lessee and which is at least as creditworthy as Lessee, and(c) a"Successor"shall mean a corporation or partnership in which or with which Lessee is merged or consolidated, in accordance with applicable statutory provisions for merger or consolidation of corporations, or a corporation or partnership acquiring a substantial portion of the property and assets of Lessee. SECTION 35. TERMS BINDING ON SUCCESSORS All the terms, covenants and conditions of this Lease shall inure to the benefit of and be binding upon the parties and their successors, including, without limitation, their assignees, encumbrancers, occupiers or users, sublessees or other transferees. The provisions of this Section shall not be deemed as a (1) waiver of any of the prohibitions and conditions against assignments, encumbrances, occupations or uses, subleases or other transfers hereinbefore set forth, or (2) City's consent thereto. If more than one lessee is a party to this Lease, the obligations of the lessees shall be joint and several. Even if City's consent is not required, Lessee shall immediately provide City with written notice of any, assignment,encumbrance, occupation or use,sublease or other transfer. SECTION 36. DEFAULT The occurrence of any one or more of the following events shall constitute a material default and breach("Default") of this Lease by Lessee: (a) Lessee's failure to make any payment of the Rent or other payment required to be made by Lessee at the time required for payment under this Lease. (b) Lessee's failure to obtain or maintain the insurances and/or the security deposit as required under this Lease. (c) Lessee's vacating or abandonment of the Premises during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. Closure of the Concession for more than a combined total of one hundred eighty (180) days in a Page 22 of 46 12-3281/80661 262 calendar year, minus any days of closure of the Concession caused by City, shall be deemed an abandonment of the Premises. (d) Lessee's violation of Section 19 (Indemnification, Defense and Hold Harmless), Section 34 (No Assigning, Subleasing or Encumbering), Section 47 (Hazardous Substances), Section 48 (Nondiscrimination), Section 49 (Sale of Alcoholic Beverages and Entertainment Prohibited), Section 62 (Conflict of Interest) or Section 64 (Compliance with Laws). (e) The insolvency of Lessee as evidenced by a receiver being appointed to take possession of all or substantially all of Lessee's assets located at or on the Premises or of Lessee's interest in this Lease, or the making by Lessee of a general arrangement or assignment for the benefit of creditors, or Lessee's filing a petition in bankruptcy, whether voluntary or involuntary, or the attachment, execution or the judicial seizure of substantially all of Lessee's assets located at or on the Premises or of Lessee's interest in the Lease. (f) Lessee's failure to observe or perform any other term, covenant, obligation, duty, responsibility or condition of this Lease to be observed or performed by Lessee when such failure shall continue for a period of thirty (30) days after City's giving written notice to Lessee, or such earlier period if specifically set forth in this Lease; however, if the nature of such failure is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in Default if Lessee notifies City of the length of the additional time required to cure and receives City's written approval of the additional time required, which approval will not be unreasonably withheld, and commences such cure within such thirty (30) day period Page 23 of 46 12-3281/80661 263 and diligently proceeds with such cure to completion during such additional time period approved by City. SECTION 37. REMEDIES (a) Cumulative Nature of Remedies. In the event of any Default by Lessee, City shall have the remedies described in this Section in addition to all other rights and remedies provided by law or equity,to which City may resort cumulatively or in the alternative: (1) Reentry without Termination. City may at City's sole discretion reenter the Premises, and, without terminating the Lease, at any time and from time to time relet the Premises or any part or parts of them for the account and in the name of Lessee or otherwise. Any reletting may be for the remainder of the term or for a longer or shorter period. City may in City's sole discretion eject all persons or eject some and not others or eject none. In addition, City may in its sole discretion remove some or all of the Trade Fixtures,personal property and trade inventory from the Premises. City may store such removed Trade Fixtures, personal property and trade inventory in a public warehouse or other location at the sole cost,expense and risk of Lessee,and for the account of and in the name of Lessee. City shall apply all rents from reletting as follows: first, to the payment of reasonable expenses (including brokers' commissions) paid or incurred by or on behalf of City in recovering possession, placing the Premises in good condition, and preparing or altering the Premises for reletting; second, to the reasonable expense of securing new subtenants; third, to the fulfillment of Lessee's covenants to the end of the term. City may execute any leases or subleases made under this provision either in City's name or in Lessee's name and City shall be entitled to all rents from the use, Page 24 of 46 12-3281/80661 264 operation or occupancy of the Premises. Lessee shall nevertheless pay to City on the dates specified in this Lease the equivalent of all sums required of Lessee under this Lease, plus City's expenses, less the proceeds of any reletting or attornment. (2) Termination. In the event of a Default by Lessee, City may at City's sole discretion terminate this Lease by giving Lessee written notice of termination. In the event City terminates this Lease, City may recover possession of the Premises (which Lessee shall immediately surrender and vacate upon demand) and remove all persons therefrom, and Lessee shall comply with, without limitation, Sections 56 and 57 below. City also shall be entitled to recover as damages all of the following: (A) The worth at the time of the award of any unpaid Rent or other charges which have been earned at the time of termination; (B) The worth at the time of the award of the amount by which the unpaid Rent (each month's Rent would be calculated as the average Rent for that same month in the preceding years, or if Lessee did own/operate the Concession in the preceding years, then each month's Rent would be calculated as the average of all months Lessee owned/operated the Concession) and other charges which would have been earned after termination until the time of the award exceeds the amount of the loss of such rental and other charges that Lessee proves could have been reasonably avoided; (C) The worth at the time of the award of the amount by which the unpaid Rent (each month's Rent would be calculated as the average Rent for Page 25 of 46 12-3281/80661 265 that same month in the preceding years, or if Lessee did not own/operate the Concession in the preceding years, then each month's Rent would be calculated as the average of all months Lessee owned/operated the Concession) and other charges for the balance of the term after the time of the award exceeds the amount of the loss of such rental and other charges that Lessee proves could have been • reasonably avoided; (D) Any other amount necessary to compensate City for the detriment proximately caused by Lessee's failure to perform its obligations, liabilities, duties or responsibilities under this Lease; and (E) At City's sole discretion, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law. As used in Sections 37(a)(2)(A) and (B) above, the "worth at the time of the award" shall be computed by allowing interest at the rate of twelve percent (12%) per annum. As used in Section 37(a)(2)(C) above,the "worth at the time of the award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%). The amount recoverable by City pursuant to Section 37(a)(2)(D) above shall include, without limitation, any costs or expenses incurred by City in maintaining or preserving the Premises after such Default. (3) Use of Personal Property. City may at City's sole discretion use the Trade Fixtures, personnel property and/or trade inventory located on, about or appurtenant to the Premises without compensation and without liability for use or damage, or store them in a public warehouse or other location at the sole Page 26 of 46 12-3281/80661 266 cost, expense and risk of Lessee, and for the account of and in the name of Lessee. (b) Election of Remedy. The election of one remedy for any one item shall not foreclose au election of any other remedy for another item or for the same item at a later time. (c) City's Right to Cure Lessee's Default. Upon continuance of any Default, City may in its sole discretion, but is not obligated to, cure such Default at Lessee's sole cost and expense. If City at any time, by reason of such Default by Lessee, pays any sum or does any act, the sum paid by City plus the reasonable cost of performing such act, together with a penalty thereon at the penalty rate set forth in Section 11 above from the date the costs were incurred or the act performed by City to the date they are reimbursed to City by Lessee, shall be due as additional rent not later than five (5) days after service of a written demand therefor on Lessee, including reasonably detailed documentation of the amount owed. No such payment or act shall constitute a waiver of Default or of any remedy for Default or render City liable for any loss or damage resulting from any such act. (d) Waiver of Rights. Lessee hereby waives any right of redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or under any other present or future law, in the event Lessee is evicted or City takes possession of the Premises by reason of any Default by Lessee hereunder. (e) Other Rights of City. No act of City, including,without limitation, City's entry on the Premises, efforts to relet the Premises, or maintenance of the Premises, shall be construed as an election to terminate this Lease unless a written notice of such intention is given to Lessee by City or unless the termination thereof is decreed by a court of competent jurisdiction. Notwithstanding if City elects to continue the Lease Page 27 of 46 12-3281/80661 267 in full force and effect after a Default by Lessee and to relet the Premises, City may at any time after such reletting elect to terminate this Lease for any such Default. SECTION 38. CUMULATIVE REMEDIES The remedies given to City in this Lease shall not be exclusive but shall be cumulative and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this Lease. City shall have the right to exercise any other right or remedy which City may have at law or in equity including,without limitation,City's rights under the unlawful detainer laws. SECTION 39. WAIVER OF DEFAULT The waiver by City of any Default by Lessee of any of the provisions of this Lease shall not constitute a continuing waiver or a waiver of any subsequent Default by Lessee either of the same or another provision of this Lease. SECTION 40. CITY'S DEFAULTS/LESSEE'S REMEDY In the event City fails to perform any material obligation of City under the Lease within ninety (90)days after receiving written notice from Lessee specifying the nature of such default,or,if the nature of City's obligation is such that more than ninety (90) days are required for its performance, if City fails to commence such performance within such ninety (90) day period and thereafter diligently prosecute the same to completion,then City shall be in default of this obligation. If City's default materially interferes with Lessee's use of the Premises for its intended purpose, Lessee shall have the option to terminate the Lease by giving City at least sixty (60) days' written notice of its intent to terminate. In such a situation, Lessee must still comply with all of its obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, paying any Rent due up to the time of termination and surrendering the Premises pursuant to Sections 56 and 57 below. This remedy of termination is Lessee's sole and exclusive remedy for a default by City. Page 28 of 46 12-3281/80661 268 SECTION 41. CONSENT When City's consent/approval is required under this Lease, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. SECTION 42. HOLDOVER Should Lessee hold over and continue in possession of the Premises after expiration or termination of this Lease, with or without the express prior written consent of City, Lessee's continued occupancy of the Premises shall constitute a month-to-month tenancy, subject to all the terms and conditions of this Lease, at a monthly rent of one hundred ten percent (110%) of the previous calendar year's annual Rent divided by twelve (12) (or the average monthly Rent for all months Lessee owned/operated the Concession if Lessee has owned/operated the Concession for less than one (1)year)or that month's actual Rent,whichever is greater,and shall not constitute a renewal or extension of the Lease term. SECTION 43. WAIVER OF CLAIMS Lessee hereby waives any claim against City, its officers, elected or appointed officials, employees, agents or volunteers for damage or loss caused by any suit or proceeding directly or indirectly attacking the validity of this Lease, or any part thereof, or caused by any judgment or award in any suit or proceeding declaring this Lease null,void or voidable, or delaying the Lease or any part thereof from being carried out. SECTION 44. INSPECTION OF PREMISES City shall make quarterly physical inspections of the leased premises upon at least twenty- four (24) hours advance written, verbal or electronic notice given by City to Lessee. Lessee shall permit City or City's agents, representatives or employees to enter the Premises at all reasonable times for the purpose of inspecting, investigating and surveying the Premises to determine whether Page 29 of 46 12-3281/80661 269 Lessee is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect City's interest in the Premises or to perform City's duties under this Lease. City also shall have the right in its sole discretion to do any and all work of any nature necessary for the preservation, maintenance and operation of property owned, controlled or occupied by City. Lessee shall be given reasonable notice when such work becomes necessary, and Lessee shall adjust the operation of the Concession in such a manner that City may proceed expeditiously. SECTION 45. CITY'S RIGHT TO LEASE BUYOUT City shall have the right at any time during the entire term of this Lease or any renewals or extensions thereof to buyout the remaining years of the Lease and Lessee's interest in this Lease based upon the following buyout formula: Average of the most recent two (2) years (preceding the date of the notice of buyout) annual Gross Sales under this Lease or a prior lease multiplied by a twelve and one-half percent(12.5%)profit margin multiplied by the number of years remaining on the Lease discounted by twelve and one-half percent (12.5%) to present value. For example: The annual Gross Sales for the most recent two (2) years of the Concession are $335,000.00 and $350,000.00. If City gives Lessee notice of its buyout intention in September,the preceding two (2) years would be the preceding twenty-four (24) months ending in August. There are three (3) years remaining in the Lease. The average of the Gross Sales of the most recent two (2) years is $342,500.00 ($335,000.00 +$350,000.00/2). The profit margin is 12.5% of the most recent two (2) year average which is $42,812.50 ($342,500.00 x 0.125). Page 30 of 46 12-3281/80661 270 The profit margin is then discounted at the rate of 12.5%to present value over the remaining years of the Lease: Year 1: $42,812.50/ 1.125 =$38,055.56 Year 2: $42,812.50/ 1.125/1.125 =$33,827.16 Year 3: $42,812.50/ 1.125/1.125/1.125=$30,068.59 All of the discounted cash flows for the remaining years of the Lease are totaled and the result is the buyout price of the Lease. In this case,the City's buyout price is$101,951.31. If Lessee has owned/operated the Concession for less than two (2) years, the City's buyout price will be the greater of(1)the amount calculated under the Gross Sales formula above or (2) all reasonable and provable start-up costs, which start-up costs will be determined by City in its sole discretion. The annual Gross Sales figure on which to calculate the buyout amount shall be calculated as follows: The average monthly Gross Sales for all months up to twenty-three (23) months converted into an annual Gross Sales figure. For example, if City decides to buyout the Lease of a new Lessee who has owned/operated the Concession for fifteen (15) months, with an average monthly Gross Sales figure of Five Thousand Dollars ($5,000.00), the annual Gross Sales figure for the option to buyout would be Sixty Thousand Dollars($60,000.00). For purposes of this calculation, a Lessee shall not be considered a new lessee if the Concession was previously owned/operated by a lessee,whose assignment, encumbrance, occupation or use, sublease or other transfer to Lessee did not require City approval in Section 34 above. At City's sole option, City shall have the right,but not the obligation,to purchase any or all of Lessee's Trade Fixtures (defined in Section 51 below), based on the appraised fair value market of the Trade Fixtures. Page 31 of 46 12-3281/80661 271 If City desires to purchase any or all of Lessee's Trade Fixtures, City shall select an appraiser to provide an appraisal of such Trade Fixtures. If Lessee disagrees with City's appraisal, Lessee, at its sole cost and expense, shall select another appraiser to provide an appraisal. If City disagrees with Lessee's appraisal, City shall select another appraiser to perform an appraisal. In such case, the parties agree that the price for the Trade Fixtures will be the average of these three(3) appraisals. All appraisers must be members in good standing in the American Society of Appraisers. Notwithstanding the foregoing, at any time, City may elect not to purchase any or all of Lessee's Trade Fixtures. Upon City's request, Lessee shall provide City with proof of lien free, good and merchantable title to any such Trade Fixtures City desires to purchase. Lessee shall protect, defend,indemnify, and hold harmless City, its officers, elected and appointed officials, employees, agents and volunteers from and against any and all liens, claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with Lessee's fraud, omission or negligence regarding any purchase of Lessee's Trade Fixtures by City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. Lessee acknowledges and agrees that this Lease buyout option of City has been negotiated at arms-length and does not constitute nor does Lessee construe this to be an act of eminent domain or inverse condemnation. In the event City exercises this buyout option, Lessee waives any and all claims of loss of business goodwill and relocation rights or benefits. Lessee also shall immediately Page 32 of 46 12-3281/80661 272 surrender the Premises as set forth herein and comply with, without limitation, Sections 56 and 57 below. SECTION 46. PHOTOGRAPHY Lessee acknowledges and agrees that City may grant permits to third parties engaged in the production of still and motion pictures and related activities to take photographs or videos of or on the Premises when such permission shall not interfere with the primary business of Lessee,all without providing Lessee with notice or requiring consent by Lessee. SECTION 47. HAZARDOUS SUBSTANCES Lessee represents and warrants that its use or occupation of the Premises shall not generate any Hazardous Substance (as defined below in this Section), and it shall not store or dispose on the Premises nor transport to or over the Premises any Hazardous Substance during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. The foregoing restrictions shall not be deemed to restrict or prohibit the use by Lessee of ordinary cleaning products as customarily used in Lessee's ordinary course of business at the Concession, provided that Lessee complies with all provisions of law as to the use, storage and disposal of such products. Lessee further agrees to clean up and remediate any such Hazardous Substance on the Premises, and agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with any such Hazardous Substance and any damage, loss, or expense or liability resulting from any such Hazardous Substance including, without limitation, all attorney's fees, costs and penalties incurred as a result thereof except any release caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall Page 33 of 46 1 2-3 2 8 1/8066 1 273 approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. "Hazardous substance" shall be interpreted broadly to mean any substance or material defined or designated as a hazardous or toxic waste,hazardous or toxic material,hazardous or toxic or radioactive substance, or other similar term, by any Federal, State or local environmental law,regulation or rule presently in effect or promulgated in the future, as such law, regulation or rule may be amended from time to time; and it shall be interpreted to include,without limitation, any substance which after release into the environment will or may reasonably be anticipated to cause sickness,death or disease. SECTION 48. NONDISCRIMINATION Lessee and its employees shall not discriminate because of race,religion, color, ancestry, sex, age, national origin or physical handicap against any person by refusing to furnish such person any accommodation,facility,rental, service or privilege offered to or enjoyed by the general public. Nor shall Lessee or its employees publicize the accommodation, facilities, rentals, services or privileges in any manner that would directly or inferentially reflect upon or question the acceptability of the patronage of any person because of race, religion, color, ancestry, sex, age, national origin or physical handicap. In the performance of this Lease, Lessee shall not discriminate against any employee or applicant for employment, because of race, religion, color, ancestry, sex, age, national origin or physical handicap. Lessee shall take affirmative action to ensure that applicants are employed and that employees are treated during employment, without regard to their race,religion, color, ancestry, sex, age, national origin or physical handicap. Such action shall include, without limitation, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, Page 34 of 46 12-3281/80661 274 including,without limitation, apprenticeship. Lessee shall post in conspicuous places, available to all employees and applicants for employment,notices setting forth the provisions of this Section. Lessee shall permit access to its records of employment, employment advertisements, application forms, and other pertinent data and records by City, the State Fair Employment Practices Commission or any other agency with jurisdiction over these matters, for the purpose of investigation to ascertain compliance with this Section. City may determine a violation of this Section to have occurred upon receipt of a final judgment having that effect from a court in an action to which Lessee was a party, or upon receipt of a written notice from the State Fair Employment Practices Commission or other government agency with jurisdiction over these matters that it has investigated and determined that Lessee has violated the Fair Employment Practices Act or other applicable discrimination • law and has issued an order which has become final, or obtained an injunction. In the event of violation of this Section, City shall have the right to terminate this Lease, and any loss of revenue sustained by City by reason thereof shall be borne and paid for by Lessee, at its sole cost and expense. SECTION 49. SALE OF ALCOHOLIC BEVERAGES AND ENTERTAINMENT PROHIBITED Notwithstanding anything to the contrary, the sale or provision of alcoholic beverages and/or live entertainment in, on, or from the Premises is expressly forbidden, unless expressly permitted in writing by City in advance. For any proposed sale or provision of alcoholic beverages, Lessee must first obtain written City approval prior to submitting any request for approval to the Alcohol Beverage Commission. Page 35 of 46 12-3281/80661 275 SECTION 50. LIENS Lessee shall keep the Premises free and clear from any and all liens, including, without limitation, mechanics' or materialmens' liens, claims and demands for work performed, materials furnished, or operations conducted on or about the Premises or by reason of any use or occupancy by Lessee, or any person claiming under Lessee. When applicable, Lessee shall cause a notice of nonresponsibility to be posted and recorded pursuant to California Civil Code Section 3094. SECTION 51. INSTALLATION AND REMOVAL OF TRADE FIXTURES Lessee shall have the right during the entire term of this Lease or any renewals or extensions thereof, at Lessee's sole cost and expense,to install or affix in,to, or on the Premises any machinery, equipment and other objects (the "Trade Fixtures"), for use in Lessee's trade or business as Lessee may deem advisable. Any and all such Trade Fixtures that can be removed without structural damage to the Premises shall, subject to Section 57 below, remain the property of Lessee and may be removed by Lessee at any time prior to the expiration or termination of this Lease, provided Lessee repairs any damage caused by the removal. Upon execution of this Lease and every anniversary, Lessee shall provide City with a list of all Trade Fixtures on the Premises. SECTION 52. DESTRUCTION Should the Premises be partially destroyed, this Lease shall continue in full force and effect, and Lessee, at Lessee's sole cost and expense, shall complete the work of repairing and restoring the Premises to their prior condition providing such work can be accomplished under all applicable governmental laws and regulations within one hundred eighty(180) days. Should the Premises be so far destroyed that in City's reasonable judgment they cannot be repaired or restored to their former condition within one hundred eighty (180) days, City shall give Lessee notice of such determination in writing and each party may,in that party's sole discretion: Page 36 of 46 12-328 1/8 0 66 1 276 (a) Continue this Lease in full force and effect in which case Lessee shall repair and restore,at Lessee's sole cost and expense,the Premises to their former condition;or (b) Terminate this Lease by giving the other party thirty (30) days' written notice of such termination within sixty (60) days after the date that City gives Lessee notice that the Premises cannot be repaired or restored to their former condition within one hundred eighty (180) days. In the event that either party elects to terminate this Lease, the entire amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent that the insurance proceeds specifically cover those items) shall be paid to City. The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as necessary to restore the Premises or for any other such purpose(s) as City sees fit. In addition,if Lessee elects to terminate the Lease, Lessee must still comply with all of its obligations, liabilities, duties and responsibilities under the Lease,including, without limitation,paying any Rent due up to the time of termination and surrendering the Premises,pursuant to Sections 56 and 57 below. In the event of the damage or destruction of Improvements, Trade Fixtures and/or personal property located on the Premises not giving rise to a termination of this Lease,Lessee shall,at its sole cost and expense, replace and repair the same as soon as reasonably possible to permit the prompt continuation of Lessee's business at the Premises. SECTION 53. NO ABATEMENT OF RENT DURING REPAIR WORK The Rent shall not be abated for the time Lessee is prevented from using the whole or a portion of the Premises. In addition, Lessee shall not be excused from the payment of taxes, Page 37 of 46 12-3281/80661 277 insurance or any other obligations for the time Lessee is prevented from using the whole or a portion of the Premises. SECTION 54. EMINENT DOMAIN If, during the term of this Lease or any renewals or extensions thereof or during any holdover period, City's real property (whether held by City in fee simple, an easement interest or otherwise) and/or the Premises is taken in eminent domain,the entire award (that is, all forms) of compensation, other than as provided herein, shall belong to and be paid to City. In the event of condemnation, Lessee shall be entitled to an award of only the following forms of compensation, if any, from the condemning authority: compensation for loss of business goodwill; compensation for the value of any of Lessee's Trade Fixtures; compensation for the value of any of Lessee's personal property; compensation for the value of any of Lessee's trade inventory; and compensation for relocation benefits as authorized by law. All other forms of compensation,such as, for example,but not by way of limitation, any bonus value of Lessee's interest in this Lease, shall belong to and be paid to City. In the event of condemnation, unless Lessee is allowed by the condemning authority to continue its operations on the Premises, the Lease shall terminate on the earliest of the following dates: the date the condemning authority obtains a prejudgment order for possession; the date title to the Premises vests in the condemning authority; or the date when Lessee is required by the condemning authority to cease its operations. SECTION 55. RELOCATION AND ASSISTANCE, BUSINESS GOODWILL AND LEASEHOLD BONUS VALUE Upon expiration or termination of this Lease for any reason, including, without limitation, if City exercises its Lease buyout option,but excluding eminent domain, Lessee shall not be entitled to any relocation rights or benefits, business goodwill or bonus value attributable to this Lease, and Lessee expressly waives any claim to the same. Page 38 of 46 1 2-3 2 8 1/8 0 661 278 SECTION 56. QUITCLAIM DEED Upon expiration or termination of this Lease as provided for herein, including, without limitation, in the event City exercises its Lease buyout option, Lessee shall execute and deliver to City within thirty(30) days thereof, a good and sufficient quitclaim deed to the rights and interests of Lessee in the Premises and the Lease. Should Lessee fail or refuse to deliver to City this quitclaim deed, City may record in the Orange County Recorder's Office a written notice reciting the failure of Lessee to execute and deliver this quitclaim deed. The date of recordation of this notice by City shall be conclusive evidence against Lessee and all persons claiming under Lessee of the expiration or termination of this Lease and any rights or interests of Lessee in the Premises and/or the Lease. Lessee also agrees to execute, acknowledge, and deliver to City any other instrument requested by City as necessary to perfect City's right,title and interest to the Premises. SECTION 57. RESTORATION AND SURRENDER OF PREMISES/TITLE TO IMPROVEMENTS On expiration or termination of this Lease, including, without limitation, in the event City exercises its Lease buyout option,Lessee shall, without compensation to Lessee, promptly surrender and deliver the Premises to City in as good condition as such were at the commencement date of this Lease, reasonable wear and tear excepted. Lessee also shall, without compensation to Lessee, surrender all Improvements to City in good condition and repair, ordinary wear and tear excepted, free and clear of all liens and encumbrances. Lessee also shall remove all Trade Fixtures, personal property and trade inventory. City may in its sole discretion accept all or any portion of the Premises, as then improved with Improvements and no sum whatsoever shall be paid to Lessee or any other person; or City may require Lessee to remove all or any portion of such Improvements, at Lessee's own risk and cost and expense; or City may itself remove or have removed all or any portion of such Improvements, at Lessee's own risk and cost and expense. If required by City to do so, in removing Page 39 of 46 12-3281/80661 279 any such Improvements, Lessee shall restore the Premises as nearly as possible to the conditions existing prior to their installation or construction. All such removal and restoration shall be to the satisfaction of City and shall be completed within thirty (30) days of the expiration or termination of this Lease;provided,however,that Lessee shall be considered a holdover tenant(pursuant to Section 42 above) after expiration or termination of the Lease until the time Lessee completes this removal and restoration work, including, without limitation, the removal of any Trade Fixtures, personal property and trade inventory left on the Premises. In addition, any Trade Fixtures,personal property or trade inventory left on the Premises after the expiration of this 30-day period,regardless of cause, shall be deemed abandoned by Lessee. In City's sole discretion, it may choose to do one or more of . the following: (1) take any or all of such Trade Fixtures, personal property and trade inventory as City property; (2) store any or all of such Trade Fixtures, personal property and trade inventory in a public warehouse or other location at the sole cost, expense and risk of Lessee, and for the account and in the name of Lessee; or(3) dispose of any or all of such Trade Fixtures,personal property and trade inventory without any liability to Lessee. In addition, Lessee's indemnification,hold harmless and defense obligations set forth in this Lease shall apply to such Trade Fixtures, personal property and/or trade inventory, and to City's actions with respect thereto. SECTION 58. FORCE MAJEURE-UNAVOIDABLE DELAYS Should the performance of any act required by this Lease to be performed by either City or Lessee be prevented or delayed by reason of an act of God, strike, lockout,labor troubles,inability to secure materials, restrictive governmental laws or regulations, or any other cause except financial inability not the fault of the party required to perform the act, the time for performance of the act shall be extended for a period equivalent to the period of delay and performance of the act during the period of delay shall be excused. Provided, however, that nothing contained in this Section shall excuse the prompt payment of the Rent or other consideration by Lessee as required by this Lease or Page 40 of 46 12-3281/80661 280 the performance of any act rendered difficult solely because of the financial condition of the party, City or Lessee,required to perform the act. SECTION 59. CITY'S OPTION TO CLOSE THE PREMISES City may close the Premises without liability and without advance notice to Lessee therefor at any time as City in its sole discretion deems necessary for the protection of life, limb or property, or for public health, safety or welfare purposes, or upon reasonable notice to effect any repair, remodeling or rebuilding deemed necessary by City in its sole discretion. The length of time of any closing of the Premises by City longer than two (2) weeks during a period when the Concession would otherwise be open shall extend the term of the Lease by the same amount of time. If this occurs,Lessee and City shall memorialize this extension in writing. SECTION 60. DELIVERIES OF SUPPLIES City may establish the days and times deliveries of supplies may be made and advise Lessee in writing thereof. SECTION 61. EMPLOYEE PARKING City shall establish the days, times and locations where Lessee and Lessee's employees may park, and the number of automobiles, trucks, and other motorized and non-motorized vehicles that Lessee and Lessee's employees may park, and advise Lessee in writing thereof. SECTION 62. CONFLICT OF IN LEREST Lessee warrants and covenants that no official or employee of City,nor any business entity in which an official or employee of City is interested, (1) has been employed or retained by Lessee to solicit or aid in the procuring of this Lease; or(2) shall be employed by Lessee in the performance of this Lease without the immediate written divulgence of such fact to City. In the event City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City,Lessee, upon request of Page 41 of 46 12-3281/80661 281 City, shall terminate such employment immediately. For breaches or violation of this Section, City shall have the right both to terminate this Lease without liability and,in its discretion,recover the full amount of any such compensation paid to such official, employee or business entity. No official or employee of City shall have any financial interest in this Lease in violation of the applicable provisions of the California Government Code. SECTION 63. NOTICE Unless specifically providing for verbal or electronic notice, all notices, certificates, or other communications required to be given hereunder shall be in writing and made in the following manner, and shall be sufficiently given and deemed received when (a) personally delivered; or (b) three (3) business days after being sent via United States certified mail—return receipt requested; or (c) one (1) business day after being sent by reputable overnight courier, in each case to the addresses specified below; provided that City and Lessee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent: CITY: LESSEE: City of Huntington Beach Park Bench Café ATTN: Director of Community Services ATTN: Michael and/or Christie Bartusic 2000 Main Street,P.O. Box 190 20431 Graystone Lane Huntington Beach, CA 92648 Huntington Beach, CA 92646 SECTION 64. COMPLIANCE WITH LAWS Lessee,at its sole cost and expense, shall comply with all statutes,ordinances,regulations and requirements of all governmental entities, including,without limitation,Fire Department regulations; Health Department Regulations, American Disabilities Act (ADA), Federal, State, county or municipal,relating to Lessee's use and occupancy of the Premises and/or operation of the Concession whether such statutes, ordinances, regulations and requirements be now in force or hereinafter enacted. This Lease is expressly subject to the laws, regulations and policies of City. Lessee shall deliver to City a copy of any notice from any governmental entity received by Lessee regarding any Page 42 of 46 12-3281/80661 282 alleged violation of law regarding the Lease, Premises or the Concession or from any person allegedly entitled to give notice under any conditions, covenants, or restrictions binding or affecting the Premises. The judgment of any court of competent jurisdiction, or the admission by Lessee in a proceeding brought against Lessee by any government entity, that Lessee has violated any such statute, ordinance,regulation or requirement shall be conclusive as between City and Lessee and shall be grounds for termination of this Lease by City. SECTION 65. INTERPRETATION OF THIS LEASE The language of all parts of this Lease shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Lease is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Lease. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Lease,the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract,then the latter shall prevail, and the provision of this Lease which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. SECTION 66. SURVIVAL Terms and conditions of this Lease,which by their sense and context survive the expiration or termination of this Lease, shall so survive. Page 43 of 46 12-3281/80661 283 SECTION 67. MODIFICATION No waiver or modification of any language in this Lease shall be valid unless in writing and duly executed by both parties. SECTION 68. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Lease are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret,define,limit or describe,or construe the intent of the parties or affect the construction or interpretation of any provision of this Lease. SECTION 69. BROKERS Each party warrants to and for the benefit of the other that it has had no dealings with any real estate broker or other agent (attorneys excepted) in connection with the negotiation or making of this Lease. SECTION 70. INDEPENDENT CONTRACTOR Lessee is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of City. Lessee shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for Lessee and its officers, agents and employees and all business licenses, if any, in connection with the Lease and/or any services to be performed hereunder. SECTION 71. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Lease or to secure the performance hereof, each party shall bear its own Page 44 of 46 12-3281/80661 284 attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non-prevailing party. SECTION 72. LEGAL SERVICES SUBCONTRACTING PROHIBITED Lessee and City agree that City is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. Lessee understands that pursuant to Huntington Beach City Charter Section 309,the City Attorney is the exclusive legal counsel for City; and City shall not be liable for payment of any legal services expenses incurred by Lessee. SECTION 73. GOVERNING LAW This Lease shall be governed and construed in accordance with the laws of the State of California. SECTION 74. DUPLICATE ORIGINAL The original of this Lease and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who signed it. SECTION 75. ENTIRETY The parties acknowledge and agree that they are entering into this Lease freely and voluntarily following extensive arm's length negotiations, and that each has had the opportunity to consult with legal counsel prior to executing this Lease. The parties also acknowledge and agree that no representations, inducements,promises, agreements or warranties, oral or otherwise,have been made by that party, or anyone acting on that party's behalf, which are not embodied in this Lease, and that that party has not executed this Lease in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Lease. The Lease, and the attached Page 45 of 46 12-3281/80661 285 exhibits, contain the entire agreement between the parties respecting the subject matter of this Lease, the Premises, the leasing of the Premises to Lessee,or the lease term created under this Lease and supercede all prior understandings and agreements, whether oral or in writing between the parties respecting the subject matter hereof. IN WITNESS WHEREOF,the parties hereto have caused this Lease to be executed by and through their authorized officers the day,month and year first above written. • MICHAEL BARTUSICCHRISTIE CITY OF HUNTINGTON BEACH, a BARTUSICIba PARK B CH CAFE municipal corporation of the State of ��SS California By: / l c,k ( a e-rvs t'c k ... .,.A..fte...e-F---, j-. print n Mayor ITS: (circle one)Chai an/Presiden a President ANDOcd By: Ait/ 4 ��;t y Clerk ��111v �J r�sfic a.TList'CA INITIAT D ROVED: ITS: (circl- : - . of Financial officer/,• sst.Secre •1:4„. reasurer Director Community Services ' APPROVED AS TO FORM: REVIE ND APPROVED: F.--evit ///f/2-6,- it Manager V City Attorney m V 7-i-/ Page 46 of 46 12-3281/80661 286 0 al SUBJEC •;: EX H r a t T • -A• • • _ - Po,,--Eion ri.• pPi 1.11 — o10 - 6e? , , . • • • Kr,o w n a Ss ! 7 7 3 2 G o ld en'vast, S i-r 1" •• �.,r..- _._..t. _..:_.A_ n_. ... jam. . ._.._._. .-- .. _. . ,-• - - .. - _ -•"r:..�— .._.-_,.--..--z.:t� e:�:r_+.x:-f.47s-st.:.:.ls...,i•:-'-w. ....._a.:'•:•. :r.;:s =.{ - -. ::su_•Gc.__-_.n=i...-...-:-.4e:e:.sr--•—=�:�: w-_.•_W... 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L.) . .. . • • • Pli, THS • • • T • . r--- T ce r2T AI/E. r+.s.1. . 287 CHKD.BY DA'r` SHEET NO..- xB -275- Item 11. - 50 CITY OF HUNTINGTON BEACH Quarterly Evaluation Month Year Today's Date - Inspected By: • Area O.K. Needs Attention: Doors&Locks Exterior Walls Exterior Area Graffiti Removal Grease Trap • Hood Grease Filters Interior Walls • Removal of Bird Droppings Rest Room . • • Roof Rust Signage • • Trash Trim • Windows • COMMENTS: • • • ACTION REQUIRED: • • AGREED TO: • EXHIBIT C Page 1 of 2 288 HB -277- Item 11. - 52 Mr. Amory Hanson 8102 Ellis Avenue Apartment 121 Huntington Beach CA 92646 March 21, 2023 The Mayor of Huntington Beach 2000 Main Street Huntington Beach CA 92648 My Dear Mister Mayor, I am writing to express my support for Item XVI. Sincerely Yours, Mr. Amory Hanson CC: The Honorable Grace Vandermark CC:The Honorable Rhonda Bolton CC: The Honorable Patrick Burns CC: The Honorable Daniel Kalmick CC: The Honorable Casey McKeon CC: The Honorable Natalie Moser SUPPLEMENTAL COMMUNICATION Meeting Date: JAZ/AZ.7 Agenda Item No.; /la 42,3 - 02/11 E0__7 Council/Agency Meeting Held: Deferred/Continued to: l Ap roxed� Waa iittionnaiiy a Council Meeting Date ❑ Denied August 6, 2012 I Department ID Number: ED 12-26 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Bob Hall, Deputy City Manager/Economic Development Director Paul Emery, Deputy City Manager/Community Services Director SUBJECT: Approve and authorize execution of a Lease Agreement between the City and Michael and Christine Bartusick, dba Park Bench Cafe, for the operation of a restaurant/food concession in Central Park Statement of Issue: The City Council is asked to approve a ten-year Lease Agreement between the City of Huntington Beach and Michael and Christine Bartusick, dba Park Bench Cafe for the operation of a restaurant/food concession in Huntington Central Park located at 17732 Goldenwest Street, Huntington Beach, California. Financial Impact: City will receive a percentage of gross revenues generated at the facility estimated at $35,000 per year. Recommended Action: Motion to: Approve and authorize the Mayor and City Clerk to execute the "Lease Agreement Between the City of Huntington Beach and Michael and Christine Bartusick, dba Park Bench Cafe" for a restaurant/food concession in Huntington Central Park. Alternative Action(s): Do not approve the lease agreement and direct staff accordingly. Item 11. - 1 HB -226- REQUEST FOR COUNCIL ACTION MEETING DATE: 8/6/2012 DEPARTMENT ID NUMBER: ED 12-26 Analysis: The Park Bench Cafe is an existing restaurant/food concession located in Huntington Central Park at 17732 Goldenwest Street. The outdoor cafe, operated by Michael and Christine Bartusick, was established in 1988. Park Bench Cafe is a local favorite that caters to park visitors as well as residents. The facility is well run and has been a source of steady rental income for the City of Huntington Beach. City Council last approved a 10-year lease with Michael and Christie Bartusick (Lessee) on July 1, 2002. The lease with Park Bench Cafe is now due for renewal. On May 14, 2012, staff presented lease renewal terms to the Economic Development Committee (EDC). EDC recommended approval of the terms and asked staff to finalize negotiations with Lessee. Lessee agrees to a 10-year lease term, rental payments based on percentage of gross sales, with a minimum base rent of $1,000 per month, and to operate the cafe a minimum of 250 days during the calendar year. Lessee, at his sole cost and expense, shall equip, operate, manage and maintain the premises in good safe working condition. Lessee has executed the attached lease. The lease rates are consistent with current market rates for comparable concession businesses. Charter Section 612 ("Measure C") does not apply to this transaction since the facility has operated in the park as a concession lease prior to 1989 and is not intended to go through a major renovation. Based upon Lessee qualifications and previous experience with the City, the Community Services Department and Economic Development Department are recommending approval of the lease. Environmental Status: NA Strategic Plan Goal: Enhance economic development Attachment(s): xB -227- Item 11. - 2 ATTACHMENT #1 Item 11. - 3 HB -228- LEASE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND MICHAEL AND CHRISTIE BARTUSICK, dba PARK BENCH CAFE THIS LEASE (the "Lease") is made and entered into effective ha 6tz s% 06 , �T 20/�) by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and MICHAEL and CHRISTIE BARTUSICK, dba PARK BENCH CAFE, a California corporation, hereinafter "Lessee." WHEREAS, City wishes to lease certain real property (the "Property"), described as a cafe style restaurant with both indoor and outdoor dining, known as the Park Bench Cafe, whose address is 17732 Goldenwest Street, Huntington Beach, CA, together with a building and other related improvements (collectively referred to as the "Improvements"), The term "Premises" as used in this Lease shall mean both the Property and the Improvements. Lessee desires to lease the Premises in the manner set forth below. NOW, THEREFORE, the parties covenant and agree as follows: SECTION 1. SUPERSEDING OF PRIOR LEASE This Lease shall supersede and replace any existing lease agreement(s) for the Premises currently entered into by and between the parties and all supplemental agreement(s) entered into by and between the parties regarding the existing lease agreement(s). SECTION 2. GRANT OF CONCESSION ON THE PREMISES City, pursuant to the terms of this Lease, grants to Lessee for the purposes stated herein, the right, privilege and duty to equip, operate and maintain a concession open to the public located on the Premises (hereinafter sometimes referred to as the "Concession"). Lessee shall not use the Premises for any other purpose or business. The legal description of the Premises is set forth in Exhibit "A", which is attached and incorporated herein by this reference. A map depicting the Premises is set Page 1 of 46 12-3281/80661 forth in Exhibit "B", which is attached hereto and incorporated herein by this reference. This Lease is not intended to confer third -party beneficiary status to anyone. SECTION 3. RESERVATIONS, ENCUMBRANCES AND RIGHTS -OF -WAY (a) City expressly reserves all natural resources in, on, or two hundred fifty (250) feet under the Premises, including, without limitation, oil, coal, natural gas and other hydrocarbons, minerals, aggregates, timber and other geothermal resources, as well as the right to grant leases or other contractual arrangements in and over the Premises for the extraction of such natural resources. However, such leasing or other arrangement shall be neither inconsistent nor incompatible with the rights or privileges of Lessee under this Lease. (b) City expressly reserves a right to enter upon the Premises with as much advance written, verbal or electronic notice as possible to Lessee for any reason associated with public health, safety or welfare, or for the protection of life, limb or property. In all other cases unless otherwise specifically set forth herein, City reserves the right for such entry but City shall give Lessee at least twenty-four (24) hours advance written, verbal or electronic notice. City shall have a right of reasonable access to the Premises across Lessee owned, controlled or occupied lands adjacent to the Premises, if any, for any purpose associated with this Lease. (c) City expressly reserves the right to lease, convey, or encumber the Premises, in whole or in part, for any purpose not inconsistent or incompatible with the rights or privileges of Lessee under this Lease. In addition, Lessee agrees to subordinate the Lease to any existing or future City financing regarding the Premises or any portion thereof. Lessee also agrees to cooperate and provide any documentation necessary for City to obtain any such financing. Page 2 of 46 12-3281180661 (d) This Lease is subject to pre-existing contracts, leases, licenses, easements, encumbrances and claims affecting the Premises and it is made without warranty by City of title, condition or fitness of the Iand for the stated or intended use. SECTION 4. TIME OF ESSENCE Time shall be of the essence of this Lease and each and all of its terms, covenants or conditions in which performance is a factor. SECTION 5. TERM This Lease shall commence at 12:01 a.m. on & & ys/- 6, 209,,for a ten (10) year term, which shall end at 11:59 p.m. on _6S 7 , 2QQ, unless extended, or sooner terminated, as provided for herein. Lessee agrees that the cafe/restaurant shall be operational a minimum of 250 days per year. An operational day is defined as being open for business a minimum of four (4) hours per day. SECTION 6. CONDITIONS OF PREMISES AS IS The taking of possession of the Premises by Lessee shall, in itself, constitute acknowledgment that the Premises are in good and tenantable condition. Upon taking possession of the Premises, Lessee agrees to accept the Premises in their presently existing condition, "as is", and agrees that City shall not be obligated to make any alterations, additions or betterments thereto. SECTION 7. DURATION OF PUBLIC FACILITIES By entering into this Lease, City makes no stipulation as to the type, size, location or duration of public facilities (excluding the Premises), including, without limitation, any City parking lots to be maintained on property owned, controlled or occupied by City. SECTION 8. ADDITIONS, ALTERATIONS AND REMOVAL (a) No modifications, alterations or additions to the Premises, including, without limitation, construction of Improvements or changes to structural design, landscape Page 3 of 46 12-3281/80661 design, or interior or exterior furnishings, shall be constructed or made by Lessee without Lessee first obtaining the prior written approval of City, which will not be unreasonably withheld. (b) Except as provided under this Lease, no alteration or removal of existing Improvements on or natural features of the Premises shall be undertaken without Lessee first obtaining the prior written approval of City. (c) Lessee's obligation to obtain City's prior written approval is separate and independent of .Lessee's obligation to obtain any permits from City, such as, without limitation, a building permit. SECTION 9, CITY'S CONTRACT ADMINISTRATOR City's Director of Community Services, or his or her designee, shall be City's Contract Administrator for this Lease with the authority to act on behalf of City for the purposes of this Lease, and all City approvals and notices required to be given herein to City shall be so directed and addressed. SECTION 10. RENT Lessee agrees to pay to City as rent (the "Rent") for the use and occupancy of the Premises a sum equal to the following percentages of the amount of "Gross Sales," as defined in Section 12 below: Years 1 throuah 5 $0 $100,000.00 of Gross Sales =7.0%, $100,000.01 - $150,000.00 of Gross Sales =8.0%; Over $150,000.00 of Gross Sales =9.0% Minimum Base Rent*=$1,000 per month plus annual CPI increases Years 6 throuah 10 $0 $100,000.00 of Gross Sales =7.5%; $100,000.01 - $150,000.00 of Gross Sales =8.5%; Over $150,000.00 of Gross Sales =9.5% Minimum Base Rent*=$1,250 per month plus annual CPI increases *Monthly rent will equal minimum base rent or percentage of gross sales for the month -whichever is greater. Page 4 of 46 12-3281/80661 Lessee shall pay the Rent monthly to City at the City Treasurer's Office, P.O. Box 711, Huntington Beach, California, 92648, or at such other place or places as City may from time -to -time designate by written notice delivered to Lessee. Lessee shall pay the Rent, which must be received by the City Treasurer within fifteen (15) calendar days after the end of the month for which the Rent is being paid, or on the next business day if the fifteenth day falls on a weekend or holiday. SECTION 11. LATE CHARGE AND PENALTY If the Rent is not received by the City Treasurer within ten (10) calendar days after the end of the month for which the Rent is being paid, or the next business day if the twentieth day falls on a weekend or holiday, Lessee shall pay the following late charge and penalty: (1) a late charge of ten percent (10%) shall be applied to any outstanding balance after any payment hereunder is due but unpaid; and (2) one and a half percent (1 11/2%) penalty per month shall be added for each month the Rent is due but unpaid. With respect to any other payments required by Lessee, a one and a half percent (1 '/2%) penalty per month shall be added for each month such payment hereunder is due but unpaid. SECTION 12. GROSS SALES DEFINED For the purpose of this Lease, the term "Gross Sales" shall mean the total price of all merchandise, food and beverages, or services sold or rendered, or equipment rented, in, on, or from the Premises by Lessee, or anyone contracting with Lessee, including, without limitation, its agents or sublessees (collectively or individually, "Lessee Party(ies)"), whether wholesale or retail, whether for cash or on credit, and if on credit whether or not paid, and whether in exchange for any other product, commodity, service, commercial paper or forbearance, and shall include, without limitation, the following: (a) All revenues, receipts, commissions or proceeds from on-line sales by Lessee Party(ies), and/or from all public telephones, vending, weighing and all other Page 5 of 46 12-3281/80661 machines owned, operated, or leased to or by Lessee Party(ies) in, on, or from the Premises; (b) All revenues, receipts, commissions or proceeds from sales based on orders solicited or taken, in, on, or from the Premises for merchandise, food and beverages, or services to be delivered or rendered off, or from sources outside, the Premises, including, without limitation, all orders taken in, on, or from the Premises although the orders may be filled elsewhere; (c) All revenues, receipts, commissions or proceeds from the renting of equipment of any kind in, on, or from the Premises; and (d) All revenues, receipts, commissions or proceeds generated from offsite but delivered through the Concession. (e) All revenues, receipts, commissions or proceeds made by Lessee Party(ies) or their employees or others acting on their behalf for the rendition of services of any kind whatsoever, made in, on, or from the Premises. (f) All other revenues, receipts, commissions or proceeds generated by, arising or derived whatsoever from the use of the Premises or derived whatsoever from any business conducted in, on, or from the Premises. For purposes of computing the Gross Sales figure on which to calculate the Rent, the amount of Gross Sales shall start over at zero dollars on January 1 of each year. If the Lease commences on any date other than January 1, the Gross Sales calculation begins from such commencement date and runs through December 31 of such Lease commencement year. Page 6 of 46 12-3281/80661 SECTION 13. GROSS SALES EXCLUSIONS Gross Sales shall not include the following items, and Lessee may deduct such items from Gross Sales to the extent they have been included therein or have been included in a prior computation of Gross Sales on which the Rent has been paid under this Lease to City: (a) Any sales, excise or other taxes otherwise includable in Gross Sales and which become part of the total price of merchandise, food and beverages, or services sold or rendered, or equipment rented, in, on, or from the Premises where Lessee must account for and remit the taxes to the government entity or entities which impose them, but only if such taxes are added to the total price and collected from customers; (b) Any transfer of trade inventory from the Premises to the manufacturer or supplier from whom it was obtained by Lessee; (c) Sales of Trade Fixtures (as defined in Section 51 below); (d) Sums and credits received in the settlement of claims for loss of or damage to trade inventory or Trade Fixtures; and (e) Any sales resulting in a cash or credit refund to a customer in the ordinary course of business. SECTION 14. BOOKS AND RECORDS Lessee shall keep true and accurate books and records showing all of its business transactions in separate records of account for the Concession in a manner acceptable to City, and City and/or its designated representatives shall have the right, at all reasonable times, to inspect such books and records including, without limitation, State of California sales or use tax returns or other State return records, and Lessee hereby agrees that all such records and instruments shall promptly be delivered and made available to City and/or its designated representatives within thirty (30) days of receiving Page 7 of 46 12-3281/80661 written request therefor. Lessee shall furnish to City and/or its designated representatives copies of its quarterly California sales and use tax returns at the time each is filed with the State of California. The books and records shall show the total amount of Gross Sales made each calendar month in, on, or from the Premises and any exclusions listed in Section 13 above. All sales and charges shall be recorded by means of cash registers which display the amount of the transaction certifying the amount recorded. The register shall be equipped with devices which log in daily sales totals and which shall record on tapes the transaction numbers and sales details. At the end of each day the tape shall record the total sales for that day. Lessee agrees to maintain on the Premises, or another location subject to the prior written approval of City, all records, books of account and cash register tapes, showing, or in any way pertaining to the Gross Sales made in, on, or from the Premises during such calendar month, including, without limitation, State of California sales or use tax returns or other State tax returns, for a period of five (5) years following the close of each calendar month. SECTION 15. STATEMENT OF GROSS SALESJAUDIT At the time specified in Section 10 of this Lease for the payment of the Rent, Lessee shall deliver to City a true and accurate statement signed by Lessee or by an authorized employee of Lessee showing the total Gross Sales and any exclusions listed in Section 13 above made during the preceding calendar month and the amount of the Rent then being paid calculated on such Gross Sales pursuant to this Lease. The acceptance by City of any monies paid to City by Lessee as the Rent, as shown by any statement furnished by Lessee, shall not be construed as an admission of the accuracy of the statement, or of the sufficiency of the amount of the Rent payment, and City shall be entitled to review the adequacy of such payment as set forth herein. By the end of each January, Lessee shall deliver to City a year-end statement showing the total amount of Gross Sales made in, on, or from the Premises in each month of the preceding year, the total of any exclusions, the total Rent paid to City for each of those months, all with year-end totals. City may at any time within three (3) years after Page 8 of 46 12-3281/80661 receiving the year-end statement, at its sole cost and expense, cause all records, books of account and cash register tapes for the year purportedly covered by the statement, to be audited by City or an accountant selected by City. Lessee shall, within thirty (30) days of receiving written notice of City's desire for such an audit, deliver and make available all such records, books of account and cash register tapes to City or its designated representative for City's use in the audit and/or for copying. If the audit discloses that Gross Sales were understated and/or exclusions overstated, Lessee shall immediately pay the additional Rent, together with a penalty thereon from the date it was due at the penalty rate set forth in Section 11 above. Furthermore, Lessee shall promptly on demand reimburse City for the full cost and expense of the audit should the audit disclose that the questioned year-end statement understated Gross Sales (including an overstatement of exclusions) or the Rent by any amount greater than Two Hundred Fifty Dollars ($250.00). City further reserves the right to examine and audit all such records, books of account and cash register tapes at any time during the three (3) year period following the expiration or termination of this Lease. In addition, City shall have the right to enter upon the Premises during business hours and with two (2) hours advance written, verbal or electronic notice to Lessee to perform any audit or inspection function with respect to this Lease. Lessee, its bookkeeper and/or accountant shall respond to all questions and inquiries of City with respect to the books, records, statements and other documentation being examined, and shall promptly provide other further documentation as may be required by City. City is entitled to take statements by deposition under oath of Lessee, its officers, bookkeepers and/or accountants or any person who prepared the books, records, statements and other documentation required to be provided by Lessee under this Lease. SECTION 16. SECURITY DEPOSIT Lessee's existing security deposit of Two Thousand Five Hundred Dollars ($2,500.00) to guarantee all of Lessee's obligations, liabilities, duties and responsibilities under the Lease, Page 9 of 46 12-3281180661 including, without limitation, the repair and maintenance of the Premises as provided herein, shall remain in effect during the rental term. No interest shall accrue on cash deposits to the benefit of Lessee, but interest shall accrue on a CD or savings account and shall be paid to Lessee under the terms of the CD or savings account. Lessee shall send a copy of each renewal of the CD to the City Treasurer to ensure that City has the records of each active deposit account. SECTION 17. USE OF DRINK SPONSOR Lessee shall comply with any exclusivity agreement which the City may have with a drink sponsor. This exclusivity shall not apply to third -parry rentals that bring their own drink products. SECTION IS. QUALITY OF SALES RENTALS AND SERVICES Lessee, at its sole cost and expense, shall equip, operate, manage and maintain the Premises and Concession and shall keep the same equipped and maintained in a manner acceptable to City during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. It is the intent of City that the Concession's services be provided in a manner to meet the needs of the visiting public, and should City deem the Concession's hours of operation and/or food, merchandise, services or rentals inadequate to meet such needs, City may require Lessee to make such changes requested by City. Lessee shall not use or permit the Premises to be used, in whole or in part, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period for any put -pose other than as herein set forth, without the prior written consent of City. Except as permitted in advance in writing by City, all foods and beverages shall be sold in disposable paper or plastic containers. No pull -top cans or styrofoam containers are to be vended or dispensed from the Premises unless pre -approved in writing by City. Lessee, wherever feasible, shall eliminate the use of non -recyclable containers and plastics. City may from time to time review the Page 10 of 46 12-3281/80661 items sold and containers or utensils used or dispensed by Lessee. City reserves the right to prohibit the sale or use of non -recyclable containers or plastics. City in its sole discretion reserves the right to prohibit Lessee's sale, provision or rental of any item or service rendered or perfonned, which it deems objectionable or offensive, beyond the scope deemed necessary for proper service to the public, inappropriate for sale, provision or rental by the Concession, or of inferior quality. The restaurant must be in operation for a minimum of 250 days during the calendar year. An operational day is defined as being open for business a minimum of four consecutive hours. SECTION 19. INDEMNIFICATION, DEFENSE AND HOLD HARMLESS Lessee hereby agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with (1) the use or occupancy of the Premises by Lessee, its officers, employees or agents, or (2) the death or injury of any person or the damage to property caused by a condition of the Premises, or (3) the death or injury of any person or the damage to property caused by any act or omission of Lessee, its officers, employees or agents, or (4) any failure by Lessee to keep the Premises in a safe condition, or (5) Lessee's (or Lessee's agents and/or sublessees, if any) performance of this Lease or its failure to comply with any of its obligations contained in this Lease by Lessee, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee shall hold all Trade Fixtures, personal property and trade inventory on the Premises at the sole risk of Lessee and save City harmless from any loss or damage thereto by any cause whatsoever, except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense Page 11 of 46 12-3281/80661 and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. SECTION 20. WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE Lessee acknowledges awareness of Section 3700 et seq, of the California Labor Code, which requires every employer to be insured against liability for workers' compensation. Lessee covenants that it shall comply with such provisions prior to the commencement of this Lease. Lessee shall obtain and furnish to City workers' compensation and employers' liability insurance in amounts not less than the State statutory limits. Lessee shall require all sublessees and contractors to provide such workers' compensation and employers' liability insurance for all of the sublessees' and contractors' employees. Lessee shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation and employers' liability insurance and Lessee shall similarly require all sublessees and contractors to waive subrogation. SECTION 21. GENERAL PUBLIC LIABILITY INSURANCE In addition to the workers' compensation and employers' liability insurance and Lessee's covenant to defend, hold harmless and indemnify City, Lessee shall obtain and furnish to City, a policy of general public liability insurance, including motor vehicle coverage against any and all claims arising out of or in connection with the Premises. This policy shall indemnify Lessee, its officers, employees and agents, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Premises, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of One Million Dollars ($1,000,000.00) per occurrence. If coverage is provided under a form which includes a designated Page 12 of 46 12-3281/80661 general aggregate limit, the aggregate limit must be no less than One Million Dollars ($1,000,000.00) for the Premises. This policy shall name City, its officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Lease shall be deemed excess coverage and that Lessee's insurance shall be primary. Under no circumstances shall said above -mentioned insurance contain a self -insured retention, or a "deductible" or any other similar form of limitation on the required coverage. SECTION 22. PROPERTY INSURANCE Lessee shall provide before commencement of this Lease and shall obtain and furnish to City, at Lessee's sole cost and expense, property and fire insurance with extended coverage endorsements thereon, by a company acceptable to City authorized to conduct insurance business in California, in an amount insuring for the full insurable value of all Improvements, Trade Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory in or on the Premises against damage or destruction by fire, theft or the elements. This policy shall contain a full replacement cost endorsement naming Lessee as the insured and shall not contain a coinsurance penalty provision. The policy shall also contain an endorsement naming City as an Additional Insured. The policy shall contain a special endorsement that such proceeds shall be used to repair, rebuild or replace any such Improvements, Trade Fixtures, personal property whether or not owned or leased by Lessee, and all trade inventory so damaged or destroyed; and if not so used, such proceeds (excluding any insurance proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee, and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City. The policy shall also contain a special endorsement that if the Premises are so destroyed triggering the parties' ability to terminate as set forth in Section 52 (Destruction) below, and either party elects to terminate the Lease, the entire Page 13 of 46 12-3281/80661 amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City. The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as necessary to restore the Premises or for any such other purpose(s) as City sees fit. This policy shall also contain the following endorsements: (a) The insurer shall not cancel or reduce the insured's coverage without (30) days prior written notice to City; (b) City shall not be responsible for premiums or assessments on the policy. A complete and signed certificate of insurance with all endorsements required by this Section shall be filed with City prior to the execution of this Lease. At least thirty (30) days prior to the expiration or termination of any such policy, a signed and complete certificate of insurance showing that coverage has been renewed shall be filed with City. SECTION 23. INCREASE IN AMOUNT OF GENERAL PUBLIC LIABILITY AND PROPERTY INSURANCE Not more frequently than once every two (2) years, if, in the sole opinion of City, the amount and/or scope of general public liability insurance in Section 21 above and/or property insurance coverage in Section 22 above at that time is not adequate, Lessee shall increase the insurance coverage as reasonably required by City. SECTION 24. CERTIFICATES OF INSURANCE• ADDITIONAL INSURED ENDORSEMENTS Prior to commencement of this Lease, Lessee shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease; these certificates shall: Page 14 of 46 12-3281/80661 (a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in force; and (c) shall promise to provide that such policies shall not be canceled or modified without thirty (30) days' prior written notice of City; however ten (10) days' prior written notice in the event of cancellation for nonpayment of premium, which 10-day notice provision shall not apply to property insurance in Section 22 above. Lessee shall maintain the foregoing insurance coverages in force during the entire term of the Lease or any renewals or extensions thereof or during any holdover period. The requirement for carrying the foregoing insurance coverages shall not derogate from Lessee's defense, hold harmless and indemnification obligations as set forth in this Lease. City or its representatives shall at all times have the right to demand the original or a copy of any or all the policies of insurance. Lessee shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. SECTION 25. INSURANCE HAZARDS Lessee shall not commit or permit the commission of any acts on the Premises nor use or permit the use of the Premises in any manner that will increase the existing rates for, or cause the cancellation of any liability, property, or other insurance policy for the Premises or required by this Lease. Lessee shall, at its sole cost and expense, comply with all requirements of any insurance carrier providing any insurance policy for the Premises or required by this Lease necessary for the continued maintenance of these policies at reasonable rates. SECTION 26. MAINTENANCE OF PREMISES City's maintenance responsibilities of the Premises shall be limited to maintaining all sewers and drain lines, roofs and attached public restrooms (if they exist). Except as set forth in the Page 15 of 46 12-3281/80661 preceding sentence, Lessee agrees to maintain the Premises in good order and repair, at Lessee's sole cost and expense, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, pursuant to the City's maintenance standards. A copy of the quarterly evaluation summary sheet setting forth the City's maintenance checklist is attached as Exhibit "C", and incorporated herein by this reference. Except as provided above, Lessee, at its sole cost and expense, shall perform any maintenance and repairs including, without limitation, facility maintenance and landscape maintenance on the Premises. Lessee's obligation includes, without limitation, maintaining and operating the Premises and adjacent areas to a distance of not more than fifty (50) feet, in a clean, safe, wholesome and sanitary condition free of trash, garbage or obstructions of any kind and in compliance with any and all present and future laws, general rules or regulations of any governmental authority now, or at any time during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, in force, relating to sanitation or public health, safety or welfare, or for the protection of life, limb or property; and Lessee shall at all times faithfully obey and comply with all laws, rules and regulations applicable thereto. Lessee, at its sole cost and expense, shall remedy without delay any defective, dangerous or unsanitary condition(s) caused by Lessee or anyone related thereto. Provided, however, that Lessee shall have no obligation to repair or maintain sewer lines or respond to sewer leaks. Lessee shall paint, stain or seal the Premises' exterior surfaces a minimum of every three (3) years, unless City determines in its sole discretion that such work shall be done on a more frequent basis. All exterior metal surfaces, except the roof, shall be painted with rust resistant paint no less than once every other year. Any and all graffiti on the Premises shall be removed by Lessee, at its sole cost and expense, within forty-eight (48) hours of Lessee receiving notice thereof or of Lessee becoming aware of such graffiti. In addition, with or without notice from City, Lessee shall, at its Page 16 of 46 12-3281/80661 sole cost and expense, repair and/or replace any broken glass within forty-eight (48) hours of its becoming broken, regardless of cause, except by fault of City. Except as provided above for graffiti and broken glass, Lessee, at its sole cost and expense and with or without notice from City, shall repair and/or replace all damage or destruction to the Premises caused by act(s) of vandalism as soon as possible but in no event later than fourteen (14) days after the date such damage or destruction occurred. Lessee, at its sole cost and expense, shall repair and/or replace all other damage or destruction to the Premises, regardless of cause, except by fault of City. Lessee shall comply with all written notices served by City with regard to the care and maintenance of the Premises. Any written notice hereunder shall specify the work to be done and the period of time deemed to be reasonably necessary for completion of such work. Should Lessee fail to commence making the necessary repairs within seven (7) days after receiving such notice, or within twenty-four (24) hours of the glass becoming broken in the case of broken glass, or fail to diligently proceed to complete the necessary repairs within the period of time reasonably specified in the City's notice, or within forty-eight (48) hours of the glass becoming broken in the case of broken glass, or within the forty-eight (48) hour time period for removing graffiti, or within fourteen (14) days of the date that the vandalism damage or destruction occurred, City shall proceed to cause the required work to be performed, and Lessee shall promptly reimburse City for the cost of labor and materials thereof and pay City a penalty on such costs at the penalty rate set forth in Section 11 above from the date the costs were incurred by City to the date they are reimbursed to City by Lessee. Lessee hereby expressly waives the right to make repairs at the expense of City and the benefit, if any, of the provisions of Sections 1941 and 1942 of the California Civil Code relating thereto. Page 17 of 46 12-3281/80661 SECTION 27. RENT CREDIT City in its sole discretion may decide to give Lessee rent credit if Lessee undertakes (1) any repair or maintenance obligation of City under this Lease, (2) any work City in its sole discretion deems necessary and appropriate or (3) any Lessee improvements. Prior to Lessee undertaking any such work, City must agree in writing to the amount of and procedures for the rent credit, the work to be done by Lessee and the cost of such work. The maximum rent credit shall be no more than $50,000 through the full term of the Lease. SECTION 28. DAMAGE, DESTRUCTION OR NUISANCE Lessee shall not commit or permit the commission by others of any damage or destruction of, on, or to the Premises and/or Concession. Lessee shall not maintain, commit or permit the maintenance or commission of any nuisance as defined in Section 3479 and/or Section 3480 of the California Civil Code on the Premises; and Lessee shall not use or permit the use of the Prenuses for any unlawful purpose. SECTION 29. TAXES This Lease may create a possessory interest in property, which is subject to taxation. In the event that such possessory interest is created, Lessee agrees to be subject to the payment of and to pay taxes levied on such interest, at its sole cost and expense. Lessee also agrees to pay, at its sole cost and expense, before they become delinquent all other lawful taxes, assessments or charges, which at any time may be levied by any governmental agency including, without limitation, the State, County, City or any tax or assessment levying body upon any interest in this Lease, or any possessory right which Lessee may have in or to the Premises, by reason of Lessee's use or occupancy thereof or otherwise, as well as all taxes, assessments, and charges on Trade Fixtures, personal property and trade inventory in, on, or about the Premises. Upon request, Lessee shall promptly furnish to City Page 18 of 46 12-3281/80661 satisfactory evidence establishing such payment. Lessee shall comply with all laws, regulations and ordinances regarding the collection of taxes due a government agency. SECTION 30. PAYMENT OF OBLIGATIONS Lessee shall promptly pay, at its sole cost and expense, before they become delinquent, any and all bills, debts, liabilities and obligations incurred by Lessee in connection with Lessee's occupation and use of the Premises and/or operation of the Concession. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. SECTION 31. UTILITIES AND SERVICES Excluding any attached public restrooms, if they exist, Lessee shall be responsible for the payment of all utility charges, including, without limitation, gas, electricity, water, telephone service, cable TV service, and the furnishing of all necessary refuse and garbage containers and the removal and disposal of all rubbish, refuse and garbage resulting from the operation of the Premises and/or the Concession. All such rubbish, refuse and garbage removed shall be disposed of in accordance with applicable laws and local ordinances. All trash containers and/or trash bins shall be adequately screened and located to the satisfaction of City. For the purposes of this Section, sewage disposal shall be construed as a utility. All such charges shall be paid by Lessee directly to the provider of the service and shall be paid as they become due and payable. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. SECTION 32. BUSINESS LICENSE Lessee shall maintain a business license from City during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. SECTION 33. SIGNS ADVERTISING AND APPROVAL OF NAME City shall have the right to approve in its sole discretion and at any time require Lessee to change or remove signs, names, placards, decorations or advertising placed on, or inscribed, painted Page 19 of 46 12-3291/90661 or affixed upon the Premises. Should City approve of any sign, name, placard, decoration or advertising, Lessee shall maintain the same at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period in good appearance and repair. All signs, names, placards, decorations or advertising must comply with all requirements of any governmental authority with jurisdiction. SECTION 34. NO ASSIGNING, SUBLEASING OR ENCUMBERING (a) Prohibition of Assignment. The parties acknowledge that City is entering into the Lease in reliance upon the experience and abilities of Lessee and its principals. Consequently, Lessee shall not voluntarily assign, encumber or otherwise transfer its interest in the Lease or in the Premises, or sublease all or any part of the Premises, or allow any other person or entity (except Lessee's authorized representatives) to occupy or use all or any part of the Premises without the prior written consent of City, which consent shall not be unreasonably withheld. Provided, however, that City's consent shall not relieve Lessee from any and all of its obligations, liabilities, duties or responsibilities under this Lease. Any assignment, encumbrance, occupation or use, sublease or other transfer without such consent shall be voidable and, at City's sole discretion, shall constitute a Default of this Lease. (b) Consent to Transfer. City's consent to any assignment, encumbrance, occupation or use, sublease or other transfer is subject to Lessee providing City with evidence satisfactory to City that the proposed, assignee, encumbrancer, occupier or user, sublessee or other transferee has suitable financial strength, experience and character for operation and control of the Premises and the Concession and that the use of the Premises by the proposed assignee, encumbrancer, occupier or user, sublessee or other transferee is consistent with that specified herein, and is commercially reasonable. Page 20 of 46 12-3281/80661 Any proposed assignee, encumbrancer, occupier or user, sublessee or other transferee shall agree to abide by the terms and conditions of the Lease including, without limitation, all the obligations, liabilities, duties and responsibilities of Lessee, and other conditions imposed upon it pursuant to law. An approval by City to one assignment, encumbrance, occupation or use, sublease or other transfer shall not be deemed to be an approval to any other assignment, encumbrance, occupation or use, sublease or other transfer. (c) Voluntary assignment defined. Except as otherwise expressly provided herein, any dissolution, merger, consolidation or reorganization of Lessee, or the sale or other transfer resulting in a transfer of a controlling percentage of the capital stock of Lessee (other than a transfer by will, devise, bequest, intestate succession, a transfer to or between the family members of Lessee, or a transfer to or between one or more trusts for the benefit of Lessee and/or Lessee's family members, where applicable) shall be deemed a voluntary assignment. (d) Exceptions. Notwithstanding the foregoing paragraphs or anything to the contrary contained herein, City's consent shall not be required for an assignment or subleasing to an Affiliate, Subsidiary or Successor of Lessee (for purposes hereof, an "Affiliate," a "Subsidiary" and a "Successor" of Lessee are defined as follows: (a) an "Affiliate" is any corporation which directly or indirectly controls or is controlled or is under common control with Lessee (for this purpose, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities or by contract or otherwise), (b) a "Subsidiary" shall mean any corporation or partnership not less than twenty-five percent (25%) of whose outstanding stock shall, at the time, Page 21 of 46 12-3281/80661 be owned directly or indirectly by Lessee and which is at least as creditworthy as Lessee, and (c) a "Successor" shall mean a corporation or partnership in which or with which Lessee is merged or consolidated, in accordance with applicable statutory provisions for merger or consolidation of corporations, or a corporation or partnership acquiring a substantial portion of the property and assets of Lessee. SECTION 35. TERMS BINDING ON SUCCESSORS All the terms, covenants and conditions of this Lease shall inure to the benefit of and be binding upon the parties and their successors, including, without limitation, their assignees, encumbrancers, occupiers or users, sublessees or other transferees. The provisions of this Section shall not be deemed as a (1) waiver of any of the prohibitions and conditions against assignments, encumbrances, occupations or uses, subleases or other transfers hereinbefore set forth, or (2) City's consent thereto. If more than one lessee is a party to this Lease, the obligations of the lessees shall be joint and several. Even if City's consent is not required, Lessee shall immediately provide City with written notice of any, assignment, encumbrance, occupation or use, sublease or other transfer. SECTION 36. DEFAULT The occurrence of any one or more of the following events shall constitute a material default and breach ("Default") of this Lease by Lessee: (a) Lessee's failure to make any payment of the Rent or other payment required to be made by Lessee at the time required for payment under this Lease. (b) Lessee's failure to obtain or maintain the insurances and/or the security deposit as required under this Lease. (c) Lessee's vacating or abandonment of the Premises during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. Closure of the Concession for more than a combined total of one hundred eighty (180) days in a Page 22 of 46 12-3281/80661 calendar year, minus any days of closure of the Concession caused by City, shall be deemed an abandonment of the Premises. (d) Lessee's violation of Section 19 (Indemnification, Defense and Hold Harmless), Section 34 (No Assigning, Subleasing or Encumbering), Section 47 (Hazardous Substances), Section 48 (Nondiscrimination), Section 49 (Sale of Alcoholic Beverages and Entertainment Prohibited), Section 62 (Conflict of Interest) or Section 64 (Compliance with Laws). (e) The insolvency of Lessee as evidenced by a receiver being appointed to take possession of all or substantially all of Lessee's assets located at or on the Premises or of Lessee's interest in this Lease, or the making by Lessee of a general arrangement or assignment for the benefit of creditors, or Lessee's filing a petition in bankruptcy, whether voluntary or involuntary, or the attachment, execution or the judicial seizure of substantially all of Lessee's assets located at or on the Premises or of Lessee's interest in the Lease. (f) Lessee's failure to observe or perform any other term, covenant, obligation, duty, responsibility or condition of this Lease to be observed or performed by Lessee when such failure shall continue for a period of thirty (30) days after City's giving written notice to Lessee, or such earlier period if specifically set forth in this Lease; however, if the nature of such failure is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in Default if Lessee notifies City of the length of the additional time required to cure and receives City's written approval of the additional time required, which approval will not be unreasonably withheld, and commences such cure within such thirty (30) day period Page 23 of 46 12-3281/80661 and diligently proceeds with such cure to completion during such additional time period approved by City. SECTION 37. REMEDIES (a) Cumulative Nature of Remedies. In the event of any Default by Lessee, City shall have the remedies described in this Section in addition to all other rights and remedies provided by law or equity, to which City may resort cumulatively or in the alternative: (1) Reentry without Termination. City may at City's sole discretion reenter the Premises, and, without terminating the Lease, at any time and from time to time relet the Premises or any part or parts of them for the account and in the name of Lessee or otherwise. Any reletting may be for the remainder of the term or for a longer or shorter period. City may in City's sole discretion eject all persons or eject some and not others or eject none. In addition, City may in its sole discretion remove some or all of the Trade Fixtures, personal property and trade inventory from the Premises. City may store such removed Trade Fixtures, personal property and trade inventory in a public warehouse or other location at the sole cost, expense and risk of Lessee, and for the account of and in the name of Lessee. City shall apply all rents from reletting as follows: first, to the payment of reasonable expenses (including brokers' commissions) paid or incurred by or on behalf of City in recovering possession, placing the Premises in good condition, and preparing or altering the Premises for reletting; second, to the reasonable expense of securing new subtenants; third, to the fulfillment of Lessee's covenants to the end of the term. City may execute any leases or subleases made under this provision either in City's name or in Lessee's name and City shall be entitled to all rents from the use, Page 24 of 46 12-3281/80661 operation or occupancy of the Premises. Lessee shall nevertheless pay to City on the dates specified in this Lease the equivalent of all sums required of Lessee under this Lease, plus City's expenses, less the proceeds of any reletting or attornment. (2) Termination. In the event of a Default by Lessee, City may at City's sole discretion terminate this Lease by giving Lessee written notice of termination. In the event City terminates this Lease, City may recover possession of the Premises (which Lessee shall immediately surrender and vacate upon demand) and remove all persons therefrom, and Lessee shall comply with, without limitation, Sections 56 and 57 below. City also shall be entitled to recover as damages all of the following: (A) The worth at the time of the award of any unpaid Rent or other charges which have been earned at the time of termination; (B) The worth at the time of the award of the amount by which the unpaid Rent (each month's Rent would be calculated as the average Rent for that same month in the preceding years, or if Lessee did own/operate the Concession in the preceding years, then each month's Rent would be calculated as the average of all months Lessee owned/operated the Concession) and other charges which would have been earned after termination until the time of the award exceeds the amount of the loss of such rental and other charges that Lessee proves could have been reasonably avoided; (C) The worth at the time of the award of the amount by which the unpaid Rent (each month's Rent would be calculated as the average Rent for Page 25 of 46 12-3281/80661 that same month in the preceding years, or if Lessee did not own/operate the Concession in the preceding years, then each month's Rent would be calculated as the average of all months Lessee owned/operated the Concession) and other charges for the balance of the term after the time of the award exceeds the amount of the loss of such rental and other charges that Lessee proves could have been reasonably avoided; (D) Any other amount necessary to compensate City for the detriment proximately caused by Lessee's failure to perform its obligations, liabilities, duties or responsibilities under this Lease; and (E) At City's sole discretion, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law. As used in Sections 37(a)(2)(A) and (B) above, the "worth at the time of the award" shall be computed by allowing interest at the rate of twelve percent (12%) per annum. As used in Section 37(a)(2)(C) above, the "worth at the time of the award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%). The amount recoverable by City pursuant to Section 37(a)(2)(D) above shall include, without limitation, any costs or expenses incurred by City in maintaining or preserving the Premises after such Default. (3) Use of Personal Property. City may at City's sole discretion use the Trade Fixtures, personnel property and/or trade inventory located on, about or appurtenant to the Premises without compensation and without liability for use or damage, or store them in a public warehouse or other location at the sole Page 26 of 46 12-3281/80661 cost, expense and risk of Lessee, and for the account of and in the name of Lessee. (b) Election of Remedy. The election of one remedy for any one item shall not foreclose an election of any other remedy for another item or for the same item at a later time. (c) CitY s Right to Cure Lessee's Default. Upon continuance of any Default, City may in its sole discretion, but is not obligated to, cure such Default at Lessee's sole cost and expense. If City at any time, by reason of such Default by Lessee, pays any sum or does any act, the sum paid by City plus the reasonable cost of performing such act, together with a penalty thereon at the penalty rate set forth in Section 11 above froze the date the costs were incurred or the act performed by City to the date they are reimbursed to City by Lessee, shall be due as additional rent not later than five (5) days after service of a written demand therefor on Lessee, including reasonably detailed documentation of the amount owed. No such payment or act shall constitute a waiver of Default or of any remedy for Default or render City liable for any loss or damage resulting from any such act. (d) Waiver of Rights. Lessee hereby waives any right of redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or under any other present or future law, in the event Lessee is evicted or City takes possession of the Premises by reason of any Default by Lessee hereunder. (e) Other Rights of City. No act of City, including, without limitation, City's entry on the Premises, efforts to relet the Premises, or maintenance of the Premises, shall be construed as an election to terminate this Lease unless a written notice of such intention is given to Lessee by City or unless the termination thereof is decreed by a court of competent jurisdiction. Notwithstanding if City elects to continue the Lease Page 27 of 46 12-3281/80661 in full force and effect after a Default by Lessee and to relet the Premises, City may at any time after such reletting elect to terminate this Lease for any such Default. SECTION 38. CUMULATIVE REMEDIES The remedies given to City in this Lease shall not be exclusive but shall be cumulative and in addition to all remedies now or hereafter allowed by law or elsewhere provided in this Lease. City shall have the right to exercise any other right or remedy which City may have at law or in equity including, without limitation, City's rights under the unlawful detainer laws. SECTION 39. WAIVER OF DEFAULT The waiver by City of any Default by Lessee of any of the provisions of this Lease shall not constitute a continuing waiver or a waiver of any subsequent Default by Lessee either of the same or another provision of this Lease. SECTION 40. CITY' S DEFAULTS/LESSEE'S REMEDY In the event City fails to perform any material obligation of City under the Lease within ninety (90) days after receiving written notice from Lessee specifying the nature of such default, or, if the nature of City's obligation is such that more than ninety (90) days are required for its performance, if City fails to commence such performance within such ninety (90) day period and thereafter diligently prosecute the same to completion, then City shall be in default of this obligation. If City's default materially interferes with Lessee's use of the Premises for its intended purpose, Lessee shall have the option to terminate the Lease by giving City at least sixty (60) days' written notice of its intent to terminate. In such a situation, Lessee must still comply with all of its obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, paying any Rent due up to the time of termination and surrendering the Premises pursuant to Sections 56 and 57 below. This remedy of termination is Lessee's sole and exclusive remedy for a default by City. Page 28 of 46 12-3281/80661 SECTION 41. CONSENT When City's consent/approval is required under this Lease, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. SECTION 42. HOLDOVER Should Lessee hold over and continue in possession of the Premises after expiration or termination of this Lease, with or without the express prior written consent of City, Lessee's continued occupancy of the Premises shall constitute a month -to -month tenancy, subject to all the terms and conditions of this Lease, at a monthly rent of one hundred ten percent (110%) of the previous calendar year's annual Rent divided by twelve (12) (or the average monthly Rent for all months Lessee owned/operated the Concession if Lessee has owned/operated the Concession for less than one (1) year) or that month's actual Rent, whichever is greater, and shall not constitute a renewal or extension of the Lease term. SECTION 43. WAIVER OF CLAIMS Lessee hereby waives any claim against City, its officers, elected or appointed officials, employees, agents or volunteers for damage or loss caused by any suit or proceeding directly or indirectly attacking the validity of this Lease, or any part thereof, or caused by any judgment or award in any suit or proceeding declaring this Lease null, void or voidable, or delaying the Lease or any part thereof from being carried out. SECTION 44. INSPECTION OF PREMISES City shall make quarterly physical inspections of the leased premises upon at least twenty- four (24) hours advance written, verbal or electronic notice given by City to Lessee. Lessee shall permit City or City's agents, representatives or employees to enter the Premises at all reasonable times for the purpose of inspecting, investigating and surveying the Premises to determine whether Page 29 of 46 12-3281/80661 Lessee is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect City's interest in the Premises or to perform City's duties under this Lease. City also shall have the right in its sole discretion to do any and all work of any nature necessary for the preservation, maintenance and operation of property owned, controlled or occupied by City. Lessee shall be given reasonable notice when such work becomes necessary, and Lessee shall adjust the operation of the Concession in such a manner that City may proceed expeditiously. SECTION 45. CITY'S RIGHT TO LEASE BUYOUT City shall have the right at any time during the entire term of this Lease or any renewals or extensions thereof to buyout the remaining years of the Lease and Lessee's interest in this Lease based upon the following buyout formula: Average of the most recent two (2) years (preceding the date of the notice of buyout) annual Gross Sales under this Lease or a prior lease multiplied by a twelve and one-half percent (12.5%) profit margin multiplied by the number of years remaining on the Lease discounted by twelve and one-half percent (12.5%) to present value. For example: The annual Gross Sales for the most recent two (2) years of the Concession are $335,000.00 and $350,000.00. If City gives Lessee notice of its buyout intention in September, the preceding two (2) years would be the preceding twenty-four (24) months ending in August. There are three (3) years remaining in the Lease. The average of the Gross Sales of the most recent two (2) years is $342,500.00 ($335,000.00 + $350,000.00/2). The profit margin is 12.5% of the most recent two (2) year average which is $42,812.50 ($342,500.00 x 0.125). Page 30 of 46 12-3291/80661 The profit margin is then discounted at the rate of 12.5% to present value over the remaining years of the Lease: Year 1: $42,812.50 / 1.125 = $38,055.56 Year 2: $42,812.50 / 1.125 / 1.125 = $33,827.16 Year 3: $42,812.50 / 1.125 / 1.125 / 1.125 = $30,068.59 All of the discounted cash flows for the remaining years of the Lease are totaled and the result is the buyout price of the Lease. In this case, the City's buyout price is $101,951.31. If Lessee has owned/operated the Concession for less than two (2) years, the City's buyout price will be the greater of (1) the amount calculated under the Gross Sales formula above or (2) all reasonable and provable start-up costs, which start-up costs will be determined by City in its sole discretion. The annual Gross Sales figure on which to calculate the buyout amount shall be calculated as follows: The average monthly Gross Sales ,for all months up to twenty-three (23) months converted into an annual Gross Sales figure. For example, if City decides to buyout the Lease of a new Lessee who has owned/operated the Concession for fifteen (15) months, with an average monthly Gross Sales figure of Five Thousand Dollars ($5,000.00), the annual Gross Sales figure for the option to buyout would be Sixty Thousand Dollars ($60,000.00). For purposes of this calculation, a Lessee shall not be considered a new lessee if the Concession was previously owned/operated by a lessee, whose assignment, encumbrance, occupation or use, sublease or other transfer to Lessee did not require City approval in Section 34 above. At City's sole option, City shall have the right, but not the obligation, to purchase any or all of Lessee's Trade Fixtures (defined in Section 51 below), based on the appraised fair value market of the Trade Fixtures. Page 31 of 46 12-3281/80661 If City desires to purchase any or all of Lessee's Trade Fixtures, City shall select an appraiser to provide an appraisal of such Trade Fixtures. If Lessee disagrees with City's appraisal, Lessee, at its sole cost and expense, shall select another appraiser to provide an appraisal. If City disagrees with Lessee's appraisal, City shall select another appraiser to perform an appraisal. In such case, the parties agree that the price for the Trade Fixtures will be the average of these three (3) appraisals. All appraisers must be members in good standing in the American Society of Appraisers. Notwithstanding the foregoing, at any time, City may elect not to purchase any or all of Lessee's Trade Fixtures. Upon City's request, Lessee shall provide City with proof of lien free, good and merchantable title to any such Trade Fixtures City desires to purchase. Lessee shall protect, defend, indemnify, and hold harmless City, its officers, elected and appointed officials, employees, agents and volunteers from and against any and all liens, claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with Lessee's fraud, omission or negligence regarding any purchase of Lessee's Trade Fixtures by City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. Lessee acknowledges and agrees that this Lease buyout option of City has been negotiated at arms -length and does not constitute nor does Lessee construe this to be an act of eminent domain or inverse condemnation. In the event City exercises this buyout option, Lessee waives any and all claims of loss of business goodwill and relocation rights or benefits. Lessee also shall immediately Page 32 of 46 12-3281/80661 surrender the Premises as set forth herein and comply with, without limitation, Sections 56 and 57 below. SECTION 46. PHOTOGRAPHY Lessee acknowledges and agrees that City may grant permits to third parties engaged in the production of still and motion pictures and related activities to take photographs or videos of or on the Premises when such permission shall not interfere with the primary business of Lessee, all without providing Lessee with notice or requiring consent by Lessee. SECTION 47. HAZARDOUS SUBSTANCES Lessee represents and warrants that its use or occupation of the Premises shall not generate any Hazardous Substance (as defined below in this Section), and it shall not store or dispose on the Premises nor transport to or over the Premises any Hazardous Substance during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. The foregoing restrictions shall not be deemed to restrict or prohibit the use by Lessee of ordinary cleaning products as customarily used in Lessee's ordinary course of business at the Concession, provided that Lessee complies with all provisions of law as to the use, storage and disposal of such products. Lessee further agrees to clean up and remediate any such Hazardous Substance on the Premises, and agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with any such Hazardous Substance and any damage, loss, or expense or liability resulting from any such Hazardous Substance including, without limitation, all attorney's fees, costs and penalties incurred as a result thereof except any release caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall Page 33 of46 ] 2-3281/80661 approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. "Hazardous substance" shall be interpreted broadly to mean any substance or material defined or designated as a hazardous or toxic waste, hazardous or toxic material, hazardous or toxic or radioactive substance, or other similar term, by any Federal, State or local environmental law, regulation or rule presently in effect or promulgated in the future, as such law, regulation or rule may be amended from time to time; and it shall be interpreted to include, without limitation, any substance which after release into the environment will or may reasonably be anticipated to cause sickness, death or disease. SECTION 48. NONDISCRIMINATION Lessee and its employees shall not discriminate because of race, religion, color, ancestry, sex, age, national origin or physical handicap against any person by refusing to furnish such person any accommodation, facility, rental, service or privilege offered to or enjoyed by the general public. Nor shall Lessee or its employees publicize the accommodation, facilities, rentals, services or privileges in any manner that would directly or inferentially reflect upon or question the acceptability of the patronage of any person because of race, religion, color, ancestry, sex, age, national origin or physical handicap. In the performance of this Lease, Lessee shall not discriminate against any employee or applicant for employment, because of race, religion, color, ancestry, sex, age, national origin or physical handicap. Lessee shall take affirmative action to ensure that applicants are employed and that employees are treated during employment, without regard to their race, religion, color, ancestry, sex, age, national origin or physical handicap. Such action shall include, without limitation, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, Page 34 of 46 12-3281/80661 including, without limitation, apprenticeship. Lessee shall post in conspicuous places, available to all employees and applicants for employment, notices setting forth the provisions of this Section. Lessee shall perinit access to its records of employment, employment advertisements, application forms, and other pertinent data and records by City, the State Fair Employment Practices Commission or any other agency with jurisdiction over these matters, for the purpose of investigation to ascertain compliance with this Section. City may determine a violation of this Section to have occurred upon receipt of a final judgment having that effect from a court in an action to which Lessee was a party, or upon receipt of a written notice from the State Fair Employment Practices Commission or other government agency with jurisdiction over these matters that it has investigated and determined that Lessee has violated the Fair Employment Practices Act or other applicable discrimination law and has issued an order which has become final, or obtained an injunction. In the event of violation of this Section, City shall have the right to terminate this Lease, and any loss of revenue sustained by City by reason thereof shall be borne and paid for by Lessee, at its sole cost and expense. SECTION 49. SALE OF ALCOHOLIC BEVERAGES AND ENTERTAINMENT PROHIBITED Notwithstanding anything to the contrary, the sale or provision of alcoholic beverages and/or live entertainment in, on, or from the Premises is expressly forbidden, unless expressly permitted in writing by City in advance. For any proposed sale or provision of alcoholic beverages, Lessee must first obtain written City approval prior to submitting any request for approval to the Alcohol Beverage Commission. Page 35 of 46 12-3281/80661 SECTION 50. LIENS Lessee shall keep the Premises free and clear from any and all liens, including, without limitation, mechanics' or materialmens' liens, claims and demands for work performed, materials furnished, or operations conducted on or about the Premises or by reason of any use or occupancy by Lessee, or any person claiming under Lessee. When applicable, Lessee shall cause a notice of nonresponsibility to be posted and recorded pursuant to California Civil Code Section 3094. SECTION 51. INSTALLATION AND REMOVAL OF TRADE FIXTURES Lessee shall have the right during the entire term of this Lease or any renewals or extensions thereof, at Lessee's sole cost and expense, to install or affix in, to, or on the Premises any machinery, equipment and other objects (the "Trade Fixtures"), for use in Lessee's trade or business as Lessee may deem advisable. Any and all such Trade Fixtures that can be removed without structural damage to the Premises shall, subject to Section 57 below, remain the property of Lessee and may be removed by Lessee at any time prior to the expiration or termination of this Lease, provided Lessee repairs any damage caused by the removal. Upon execution of this Lease and every anniversary, Lessee shall provide City with a list of all Trade Fixtures on the Premises. SECTION 52. DESTRUCTION Should the Premises be partially destroyed, this Lease shall continue in full force and effect, and Lessee, at Lessee's sole cost and expense, shall complete the work of repairing and restoring the Premises to their prior condition providing such work can be accomplished under all applicable governmental laws and regulations within one hundred eighty (180) days. Should the Premises be so far destroyed that in City's reasonable judgment they cannot be repaired or restored to their former condition within one hundred eighty (180) days, City shall give Lessee notice of such determination in writing and each party may, in that party's sole discretion: Page 36 of 46 12-3281/80661 (a) Continue this Lease in full force and effect in which case Lessee shall repair and restore, at Lessee's sole cost and expense, the Premises to their former condition; or (b) Terminate this Lease by giving the other party thirty (30) days' written notice of such termination within sixty (60) days after the date that City gives Lessee notice that the Premises cannot be repaired or restored to their former condition within one hundred eighty (180) days. In the event that either party elects to terminate this Lease, the entire amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent that the insurance proceeds specifically cover those items) shall be paid to City. The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as necessary to restore the Premises or for any other such purpose(s) as City sees fit. In addition, if Lessee elects to terminate the Lease, Lessee must still comply with all of its obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, paying any Rent due up to the time of termination and surrendering the Premises, pursuant to Sections 56 and 57 below. In the event of the damage or destruction of Improvements, Trade Fixtures and/or personal property located on the Premises not giving rise to a termination of this Lease, Lessee shall, at its sole cost and expense, replace and repair the same as soon as reasonably possible to permit the prompt continuation of Lessee's business at the Premises. SECTION 53. NO ABATEMENT OF RENT DURING REPAIR WORK The Rent shall not be abated for the time Lessee is prevented from using the whole or a portion of the Premises. In addition, Lessee shall not be excused from the payment of taxes, Page 37 of 46 12-3281/80661 insurance or any other obligations for the time Lessee is prevented from using the whole or a portion of the Premises. SECTION 54. EMINENT DOMAIN If, during the term of this Lease or any renewals or extensions thereof or during any holdover period, City's real property (whether held by City in fee simple, an easement interest or otherwise) and/or the Premises is taken in eminent domain, the entire award (that is, all forms) of compensation, other than as provided herein, shall belong to and be paid to City. In the event of condemnation, Lessee shall be entitled to an award of only the following forms of compensation, if any, from the condemning authority: compensation for loss of business goodwill; compensation for the value of any of Lessee's Trade Fixtures; compensation for the value of any of Lessee's personal property; compensation for the value of any of Lessee's trade inventory; and compensation for relocation benefits as authorized by law. All other forms of compensation, such as, for example, but not by way of limitation, any bonus value of Lessee's interest in this Lease, shall belong to and be paid to City. In the event of condemnation, unless Lessee is allowed by the condemning authority to continue its operations on the Premises, the Lease shall terminate on the earliest of the following dates: the date the condemning authority obtains a prejudgment order for possession; the date title to the Premises vests in the condemning authority; or the date when Lessee is required by the condemning authority to cease its operations. SECTION 55. RELOCATION AND ASSISTANCE BUSINESS GOODWILL AND LEASEHOLD BONUS VALUE Upon expiration or termination of this Lease for any reason, including, without limitation, if City exercises its Lease buyout option, but excluding eminent domain, Lessee shall not be entitled to any relocation rights or benefits, business goodwill or bonus value attributable to this Lease, and Lessee expressly waives any claim to the same. Page 38 of 46 12-3281/80661 SECTION 56. QUITCLAIM DEED Upon expiration or termination of this Lease as provided for herein, including, without limitation, in the event City exercises its Lease buyout option, Lessee shall execute and deliver to City within thirty (30) days thereof, a good and sufficient quitclaim deed to the rights and interests of Lessee in the Premises and the Lease. Should Lessee fail or refuse to deliver to City this quitclaim deed, City may record in the Orange County Recorder's Office a written notice reciting the failure of Lessee to execute and deliver this quitclaim deed. The date of recordation of this notice by City shall be conclusive evidence against Lessee and all persons claiming under Lessee of the expiration or termination of this Lease and any rights or interests of Lessee in the Premises and/or the Lease. Lessee also agrees to execute, acknowledge, and deliver to City any other instrument requested by City as necessary to perfect City's right, title and interest to the Premises. SECTION 57, RESTORATION AND SURRENDER OF PREMISES/TITLE TO IMPROVEMENTS On expiration or termination of this Lease, including, without limitation, in the event City exercises its Lease buyout option, Lessee shall, without compensation to Lessee, promptly surrender and deliver the Premises to City in as good condition as such were at the commencement date of this Lease, reasonable wear and tear excepted. Lessee also shall, without compensation to Lessee, surrender all Improvements to City in good condition and repair, ordinary wear and tear excepted, free and clear of all liens and encumbrances. Lessee also shall remove all Trade Fixtures, personal property and trade inventory. City may in its sole discretion accept all or any portion of the Premises, as then improved with Improvements and no stun whatsoever shall be paid to Lessee or any other person; or City may require Lessee to remove all or any portion of such Improvements, at Lessee's own risk and cost and expense; or City may itself remove or have removed all or any portion of such Improvements, at Lessee's own risk and cost and expense. If required by City to do so, in removing Page 39 of 46 12-3281/80661 any such Improvements, Lessee shall restore the Premises as nearly as possible to the conditions existing prior to their installation or construction. All such removal and restoration shall be to the satisfaction of City and shall be completed within thirty (30) days of the expiration or termination of this Lease; provided, however, that Lessee shall be considered a holdover tenant (pursuant to Section 42 above) after expiration or termination of the Lease until the time Lessee completes this removal and restoration work, including, without limitation, the removal of any Trade Fixtures, personal property and trade inventory left on the Premises. In addition, any Trade Fixtures, personal property or trade inventory left on the Premises after the expiration of this 30-day period, regardless of cause, shall be deemed abandoned by Lessee. In City's sole discretion, it may choose to do one or more of the following: (1) take any or all of such Trade Fixtures, personal property and trade inventory as City property; (2) store any or all of such Trade Fixtures, personal property and trade inventory in a public warehouse or other location at the sole cost, expense and risk of Lessee, and for the account and in the name of Lessee; or (3) dispose of any or all of such Trade Fixtures, personal property and trade inventory without any liability to Lessee. In addition, Lessee's indemnification, hold harmless and defense obligations set forth in this Lease shall apply to such Trade Fixtures, personal property and/or trade inventory, and to City's actions with respect thereto. SECTION 58. FORCE MAJEURE - UNAVOIDABLE DELAYS Should the performance of any act required by this Lease to be performed by either City or Lessee be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, restrictive governmental laws or regulations, or any other cause except financial inability not the fault of the party required to perform the act, the time for performance of the act shall be extended for a period equivalent to the period of delay and performance of the act during the period of delay shall be excused. Provided, however, that nothing contained in this Section shall excuse the prompt payment of the Rent or other consideration by Lessee as required by this Lease or Page 40 of 46 12-3281/80661 the performance of any act rendered difficult solely because of the financial condition of the party, City or Lessee, required to perform the act. SECTION 59. CITY'S OPTION TO CLOSE THE PREMISES City may close the Premises without liability and without advance notice to Lessee therefor at any time as City in its sole discretion deems necessary for the protection of life, limb or property, or for public health, safety or welfare purposes, or upon reasonable notice to effect any repair, remodeling or rebuilding deemed necessary by City in its sole discretion. The length of time of any closing of the Premises by City longer than two (2) weeks during a period when the Concession would otherwise be open shall extend the term of the Lease by the same amount of time. If this occurs, Lessee and City shall memorialize this extension in writing. SECTION 60. DELIVERIES OF SUPPLIES City may establish the days and times deliveries of supplies may be made and advise Lessee in writing thereof. SECTION 61. EMPLOYEE PARKING City shall establish the days, times and locations where Lessee and Lessee's employees may park, and the number of automobiles, trucks, and other motorized and non -motorized vehicles that Lessee and Lessee's employees may park, and advise Lessee in writing thereof. SECTION 62. CONFLICT OF INTEREST Lessee warrants and covenants that no official or employee of City, nor any business entity in which an official or employee of City is interested, (1) has been employed or retained by Lessee to solicit or aid in the procuring of this Lease; or (2) shall be employed by Lessee in the performance of this Lease without the immediate written divulgence of such fact to City. In the event City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City, Lessee, upon request of Page 41 of 46 12-3281/80661 City, shall terminate such employment immediately. For breaches or violation of this Section, City shall have the right both to terminate this Lease without liability and, in its discretion, recover the full amount of any such compensation paid to such official, employee or business entity. No official or employee of City shall have any financial interest in this Lease in violation of the applicable provisions of the California Government Code. SECTION 63. NOTICE Unless specifically providing for verbal or electronic notice, all notices, certificates, or other communications required to be given hereunder shall be in writing and made in the following manner, and shall be sufficiently given and deemed received when (a) personally delivered; or (b) three (3) business days after being sent via United States certified mail — return receipt requested; or (c) one (1) business day after being sent by reputable overnight courier, in each case to the addresses specified below; provided that City and Lessee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent: CITY: LESSEE: City of Huntington Beach Park Bench Cafe ATTN: Director of Community Services ATTN: Michael and/or Christie Bartusic 2000 Main Street, P.O. Box 190 20431 Graystone Lane Huntington Beach, CA 92648 Huntington Beach, CA 92646 SECTION 64. COMPLIANCE WITH LAWS Lessee, at its sole cost and expense, shall comply with all statutes, ordinances, regulations and requirements of all governmental entities, including, without limitation, Fire Department regulations; Health Department Regulations, American Disabilities Act (ADA), Federal, State, county or municipal, relating to Lessee's use and occupancy of the Premises and/or operation of the Concession whether such statutes, ordinances, regulations and requirements be now in force or hereinafter enacted. This Lease is expressly subject to the laws, regulations and policies of City. Lessee shall deliver to City a copy of any notice from any governmental entity received by Lessee regarding any Page 42 of 46 12-3281/80661 alleged violation of law regarding the Lease, Premises or the Concession or from any person allegedly entitled to give notice under any conditions, covenants, or restrictions binding or affecting the Premises. The judgment of any court of competent jurisdiction, or the admission by Lessee in a proceeding brought against Lessee by any government entity, that Lessee has violated any such statute, ordinance, regulation or requirement shall be conclusive as between City and Lessee and shall be grounds for termination of this Lease by City. SECTION 65. INTERPRETATION OF THIS LEASE The language of all parts of this Lease shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Lease is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Lease. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Lease, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or fixture statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Lease which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. SECTION 66. SURVIVAL Terms and conditions of this Lease, which by their sense and context survive the expiration or termination of this Lease, shall so survive. Page 43 of 46 12-3281/80661 SECTION 67. MODIFICATION No waiver or modification of any language in this Lease shall be valid unless in writing and duly executed by both parties. SECTION 68. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Lease are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Lease. SECTION 69. BROKERS Each party warrants to and for the benefit of the other that it has had no dealings with any real estate broker or other agent (attorneys excepted) in connection with the negotiation or making of this Lease. SECTION 70. INDEPENDENT CONTRACTOR Lessee is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of City. Lessee shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for Lessee and its officers, agents and employees and all business licenses, if any, in connection with the Lease and/or any services to be performed hereunder. SECTION 71. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Lease or to secure the performance hereof, each party shall bear its own Page 44 of 46 12-3281/80661 attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non -prevailing party. SECTION 72. LEGAL SERVICES SUBCONTRACTING PROHIBITED Lessee and City agree that City is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. Lessee understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for City; and City shall not be liable for payment of any legal services expenses incurred by Lessee. SECTION 73. GOVERNING LAW This Lease shall be governed and construed in accordance with the laws of the State of California. SECTION 74. DUPLICATE ORIGINAL The original of this Lease and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who signed it. SECTION 75. ENTIRETY The parties acknowledge and agree that they are entering into this Lease freely and voluntarily following extensive arm's length negotiations, and that each has had the opportunity to consult with legal counsel prior to executing this Lease. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party, or anyone acting on that party's behalf, which are not embodied in this Lease, and that that party has not executed this Lease in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Lease. The Lease, and the attached Page 45 of 46 12-3281/80661 exhibits, contain the entire agreement between the parties respecting the subject matter of this Lease, the Premises, the leasing of the Premises to Lessee, or the lease term created under this Lease and supersede all prior understandings and agreements, whether oral or in writing between the parties respecting the subject matter hereof. IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by and through their authorized officers the day, month and year first above written. MICHAEL BARTUSIge CHRISTIE CITY OF HUNTINGTON BEACH, a BARTUSICNba PARK BENCH CAFE municipal corporation of the State of 0,6 i) A_-11 California nopi ri name—� ITS: (circle-e cretary/ of Financial Officer/�t. Secre ar - Treasurer REVIE ND APPROVED: it Manager Mayor y Clerk INITIAT A D A,P�PROVED: Director Community Services APPROVED AS TO FORM: \A;,�—City Attorney V 7- Page 46 of 46 12-3281/80661 MUNnNCWW K 2 Go Iden e 5 ;5 r --^lC _---�_-_.__ C.0 _� —_. _�.-$_ _--�-T�\�3:?.4�:n _-.._..�: .ram^4"S^��^^..._'..: -. �•:Y. 4�.�'^�TZ�i��-�_'-Z'L`13�u�Y�M�- _.. _.� _ _ . �_._. �-. _ r �A R w :.. 7 p 306 is ._ 1 H S 3-3! TC CHKQ. BY QA HB -275- SHEET` —Item 1 1 . - 50 .... - - --- C _. . 4 SUaJEC - �— $ "L^IV--WW CEA04 ti 2 • r 3 � CO t i 1 3` �+ a 1 rri o 4- — . 33 " P _ , T— • jij • 1 CHKD. BY DATE SHEET NO, OF Item 11. - 51 HB -276- CITY OF HUNTINGTON BEACH Quarterly Evaluation Month Year Today's Date Inspected By: Area O.K. Needs Attention: Doors & Locks Exterior Walls Exterior Area Graffiti Removal Grease Trap Hood Grease Filters Interior Walls Removal of Bird Droppings Rest Room Roof Rust Signage Trash Trim Windows CON 4EMS: ACTION REQUIRED: AGREED TO: EXHIBIT C Page 1 of 2 HB -277- Item l l . - 52 DEFINITIONS Doors and Locks Clean and in operable position and condition All locks shall be regularly checked and maintained. Absolutely no chain locks are allowed. Locks shall only be used on authorized locations. Exterior Walls clean and smooth, void of rust, graffiti, stickers, etching, or other materials or marks that were not originally placed on the walls. Graffiti Removal All graffiti shall be removed within forty-eight hours including painted or sprayed graffiti, magic markers, stickers, etching, and surf wax. The building shall be kept free of graffiti. Interior rest room graffiti shall be removed on a regular basis not to exceed forty-eight hours. Grease Trao Free and clear flowing with regularly scheduled maintenance to prevent buildup or clogging. Hood Grease Filter Removed and cleaned a minimum of every three months, and checked regularly and cleaned more often if necessary. Filters shall be replaced at such time as required where volumes are no longer maintained. Interior Walls Clean and smooth, void of dirt or corrosion. Al fire -rated walls shall be solid and unpenetrated. Removal of Bird Droppings the building in its entirety shall be cleaned a minimum of every three months to remove all bird droppings. If bird droppings present a health problem, they shall be removed prior to the minimum three month periods. Rest Rooms (Plumbing) Entry mats, floors and carpets shall be kept clean. Walls shall be.kept fingermark free. Tile and wall surfaces shall be kept clean. Toilet bowls, rims, tank tops, and bodies shall be kept clean. Mirrors shall be kept dean and streak free. Soap dispensers clean and full. Paper towel dispensers clean and full. Toilet paper dispensers clean and full. All sink and faucet fixtures clean and rust free. Light fixtures dean and functioning. Air fresheners functioning. Trash receptacles clean, lined and emptied regularly. Roof Free of debris and cleaned regularly as needed to remove bird droppings,. graffiti or vandalism. Roof leaks shall be reported immediately to the Community Services Department. Rust No accumulation or degeneration to interior or exterior surfaces. Rusted areas shall be cleaned and painted on a regular basis to avoid long term damage. Si na e Clean, readable and in good condition. Bulbs in lighted signs shall be replaced as needed within twenty-four hours. No unauthorized signs shall be posted. Trash Deposited in designated containers. There shall be no buildup of cardboard boxes, unused equipment, unwanted decorator items, etc. within the trash areas. Trash areas shall be secured from public use to avoid deposit of fish remains. Trim Clean and smooth, void of corrosion and rust. Windows - Clean and void of cracks. No commercial stickers shall be used on windows. Exterior Area Outside area around concession building that is utilized by the concessionaire. - EXHIBIT C Page 2 of 2 Item It. . - 53 HB -278- ATTACHMENT #2 ��--, OP ID: PF CERTIFICATE OF LIABILITY INSURANCE DATE07113DlYYYY) 7/13l12 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER 714-755-1575 NAME: ` Nikki Molnar, Ext. 20 ACI Commercial Insurance 714-755 4124 PHONE 714-755-1575 ac No): 714-352-3728 505 E. First St. Suite E. (A c No. Exc): Tustin, CA 92780 E-MAIL ADDRESS: service@aciinsure.com ACI Commercial Insurance PRODUCER pARKBEN -CUSTOMER ID #: INSURERS AFFORDING COVERAGE NAIC # INSURED The Park Bench Cafe, Inc. INsuRERA:Republic Indemnity California Mike Bartusick INSURERS:Safeco Insurance Company 24740 17732 Goldenwest Street Huntington Beach, CA 92648 INSURERC: INSURER D : INSURER E: INSURER F : COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE 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. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. ILTRR TYPE OF INSURANCE A POLICY NUMBER MMIDD/YYYY MMLDD EXP LIMBS GENERAL LIABILITY EACH OCCURRENCE $ 1,000,000 -DAMAGE TO RENTED PREMISES Ea occurrence $ 1,000,000 B X COMMERCIAL GENERAL LIABILITY X 01 CH651475-5 09/20/11 09/20/12 MED EXP (Any one person) $ 1 %(xx) CLAIMS -MADE FAI OCCUR PERSONAL & ADV INJURY $ 1,000,000 GENERAL AGGREGATE $ 2,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS - COMP/OP AGG $ 2,000,000 $ JECI X POLICY PRO. LOC AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS APPROVED AS TO FOI At., COMBINED SINGLE LIMIT (Ea accident) $ BODILY INJURY (Per person) $ BODILY INJURY (Per accident) $ SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS �pONIFERMcGRATH,C#Att.TTyylley PROPERTY DAMAGE (Per accident) $ UMBRELLA LIAB HCLAIMS-MADE OCCUR EACH OCCURRENCE $ AGGREGATE $ EXCESS LIAB DEDUCTIBLE $ $ RETENTION $ A WORKERS COMPENSATION AND EMPLOYERS' LIABILITYYIN ANY PROPRIETOR/PARTNERIEXECUTIVE F-- OFFICER/MEMBER EXCLUDED? (Mandatory In NH) If yes, describe under DESCRIPTION OF OPERATIONS below NIA 177054-03 04/01/12 04/01/13 X WC STATU- 07H- DRY , E.L. EACH ACCIDENT - $ 1,000,000 E.L. DISEASE - EA EMPLOYEE $ 1,000,000 E.L. DISEASE -POLICY LIMIT 1 $ 1,000,000 DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (Attach ACORD 101, Additional Remarks Schedule, If more space Is required) REGARDING THE PARK BENCH CAFE, INC.; 17732 GOLDENWEST STREET HUNTINGTON BEACH, CA 92648 AND KOKOMO'S SURFSIDE GRILL; 21071 PACIFIC CbAST HWY, HUNTINGTON BEACH, CA 92648. CITY OF HUNTINGTON BEACH ITS ELECTED OR ADDITIONALOINSUREDSPER THEAGENTSJkTTACHEDOFFICERFbRM CCG 75E35fi02507 EERS ARE NAMED AS THE CITY OF HUNTINGTON BEACH COMMUNITY SERVICES DEPT 2000 MAIN STREET HUNTINGTON BEACH, CA 92648 CITYHB1 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE ACI Commercial Insus ©19W 2009 ACORD CORPORATION. All rights reservea. ACORD 25 (2009/09) The ACORD name and logo are registered marks of ACORD "" REPRINTED FROM THE FORbAS USRA" — COMMERCIAL GENERAL LIABILITY CG 76 35 02 07 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. LIABILITY PLUS ENDORSEMENT This endorsement modifies Insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name of Person or Organization: CITY OF HUNTINGTON BEACH, ITS ELECTED OR APPOINTED OFFICIALS, AGENTS, OFFICERS, EMPLOYEES, AND VOLUNTEERS 2000 MAIN STREET HUNTINGTON BEACH CA 92648 ADDITIONAL INSURED — BY WRITTEN CONTRACT, AGREEMENT OR PERMIT, OR SCHEDULE The following paragraph Is added to WHO IS AN INSURED (Section 11): 4. Any person or organization shown in the Sched- ule or for whom you are required by written con- tract, agreement or permit to provide Insurance is an insured, subject to the following additional provisions: a. The contract, agreement or permit must be In effect during the policy period shown in the Declarations, and must have been exe- cuted prior to the "bodily injury", "property damage", or "personal and advertising injury". b. The person or organization added as an In- sured by this endorsement Is an insured only to the extent you are held liable due to: (1) The ownership, maintenance or use of that part of premises you own, rent, lease or occupy, subject to the following additional provislons: (a) This Insurance does not apply to any "occurrence" which takes place after you cease to be a tenant in any premises leased to or rented to you; (b) This insurance does not apply to any structural alterations, new con- struction or demolition operations performed by or on behalf of the person or organization added as an insured; (2) Your ongoing operations for that in- sured, whether the work is performed by you or for you; (3) The maintenance, operation or use by you of equipment leased to you by such person or organization, subject to the following additional provisions: (a) This Insurance does not apply to any occurrence" which takes place after the equipment lease expires; Includes Copyrighted Material of Insurance Services Office, Inc., with Its permission. Copyright, insurance Services, 2001 C6 76 35 02 D7 Page i of 4 EP - REPRINTED FRCM THE FORMS LIBRARY---' (b) This insurance does not apply to "bodily In)ury" or "property dam- age" arising out of the sole negli- gence of such person or organization; (4) Permits issued by any state or political subdivision with respect to operations performed by you or on your behalf, subject to the following additional pro- vision: This insurance does not apply to `bodily injury", "property damage", or "personal and advertising injury" arising out of operations performed for the state or municipality.. c. The insurance with respect to any architect, engineer, or surveyor added as an Insured by this endorsement does not apply to "bodily injury", "property damage", or "per- sonal and advertising injury" arising out of the rendering of or the failure to render any professional services by or for you, includ- Ing: (1) The preparing, approving, or tailing to prepare or approve maps, drawings, opinions, reports, surveys, change or- ders, designs or specifications; and (2) Supervisory, inspection or engineering services. d. This insurance does not apply to "bodily Injury" or "property damage" included within the "products -completed operations haz- ard". A person's or organizations status as an Insured un- der this endorsement ends when your operations for that Insured are completed. No coverage will be provided if, In the absence of this endorsement, no liability would be Imposed by law on you. Coverage shall be limited to the extent of your negligence or fault according to the applicable princi- ples of comparative fault. NON -OWNED WATERCRAFT AND NON -OWNED AIRCRAFT UABIUTY This exclusion applies even If the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, H the °occurrence" which caused the "bodily injury" or "property damage' involved the ownership, mainte- nance, use or entrustment to others of any aircraft, `auto" or watercraft that Is owned or operated by or rented or loaned to any in- sured. This exclusion does not apply to: (1) A watercraft while ashore on premises you own or rent; (2) A watercraft you do not own that is: (a) Less than 52 feet tong; and (b) Not being used to carry persons or property for a charge; (3) Parking an "auto" on, or on the ways next to, premises you own or rent, pro- vided the "auto" is not owned by or rented or loaned to you or the insured; (4) Liability assumed under any "insured contract" for the ownership, mainte- nance or use of aircraft or watercraft; or (5) 'Bodily injury" or "property damage" arising out of: (a) the operation of machinery or equipment that is attached to, or part of, a land vehicle that would qualify under the definition of "mobile equipment" if it were not subject to a compulsory or financial responsibility law or other motor ve- hicJe Insurance law In the state where it is licensed or principally garaged; or (b) the operation of any of the machin- ery or equipment listed in Paragraph f.(2) or f.(3) of the definition of "mobile equipment". (6) An aircraft you do not own provided it is not operated by any insured. TENANTS' PROPERTY DAMAGE LIABILITY Exclusion g. of COVERAGE A (Section 1) is replaced When a Damage To Premises Rented To You Limit Is by the following: shown in the Declarations, Exclusion). of Coverage A, Section I Is replaced by the following: g. 16odily injury" or "property damage" arising out of the ownership, maintenance, use or j• Damage To Property entrustment to others of any aircraft, "auto" Property damage" to: or watercraft owned or operated by or rented or loaned to any insured. Use Includes oper- (1) Property you own, rent, or occupy, including ation and "loading or unloading". any costs or expenses incurred by you, or Page 2 of 4 REPRINTED FROM THE FORMS URRARY any other person, organization or entity, for WHO IS AN INSURED — MANAGERS repair, replacement, enhancement, restora- tion or maintenance of such property for any The following is added to Paragraph 2.a, of WHO IS reason, including prevention of injury to a AN INSURED {Section II): person or damage to anther's property; (2) Premises you sell, give away or abandon, if the "property damage" arises out of any part of those premises; (3) Property loaned to you; (4) Personal property in the care, custody or control of the insured; (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property. damage" arises out of those operations, or (6) That particular part of any property that must be restored, repaired or replaced because `your work' was incorrectly performed on ft. Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the con- tents of such premises, rented to you. A separate limit of Insurance applies to Damage To Prem- ises Rented To You as described in Section iII -- Limits Of Insurance, Paragraph (1) does not apply to executive officers, or to managers at the supervisory level or above. SUPPLEMENTARY PAYMENTS -- COVERAGES A AND B — BAIL BONDS — TIME OFF FROM WORK Paragraph 1.b. of SUPPLEMENTARY PAYMENTS — COVERAGES A AND B is replaced by the following: b. Up to $3,000 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies. We do not have to furnish these bonds. Paragraph If.d. of SUPPLEMENTARY PAYMENTS — COVERAGES A AND B is replaced by the following: d. All reasonable expenses incurred by the in- sured at our request to assist us In the in- vestigation or defense of the claim or "suit", including actual loss of earnings up to $500 a day because of time off from work. Paragraph (2) of this exclusion does not apply if EMPLOYEES AS INSUREDS - HEALTH CARE the premises are "your work" and were never SERVICES occupied, rented or held for rental by you. Provision 2.a.(1)(d) of WHO IS AN INSURED (Section Paragraphs (3), (4), (5) and (6) of this exclusion i1) is deleted, unless excluded by separate endorse do not apply to liability assumed under a side- ment. track agreement. Paragraph (6) of this exclusion does not apply to EXTENDED COVERAGE FOR NEWLY ACQUIRED 'property damage" included in the "products- ORGANIZATIONS completed operations hazard'. Paragraph 6. of LIMITS OF INSURANCE (Section III) is replaced by the following: 6. Subject to 5. above, the Damage To Premises Rented To You Limit Is the most we will pay un- der Coverage A for damages because of "property damage" to any one premises, while rented to you, or In the case of damage by fire, while rented to you or temporarily occupied by you with permission of the owner. The Damage To Premises Rented To You limit is the higher of the Each Occurrence Limit shown in the Declarations or the amount shown in the Declarations as Damage To Premises Rented To You Limit Provision 3.a. of WHO iS AN INSURED (Section 11) is replaced by the following: a. Coverage under this provision is afforded only until the end of the policy period. EXTENDED "PROPERTY DAMAGE" Exclusion a. of COVERAGE A (Section 1) Is replaced by the following: a. 'Bodily injury" or "property damage" expected or intended from the standpoint of the Insured. This exclusion does not apply to 'bodily injury" or "property, damage" resulting from the use of reasonable force to protect persons or property. GG 76 35 02 07 Page 3 of 4 EP — REPRMTFn FROM THE FORMS USRARY — EXTENDED DEFINITION OF BODILY INJURY Paragraph 3. of DEFINITIONS (Section V) is replaced by the following: 3. "Bodily injury" means bodily injury, sickness or disease sustained by a person, Including mental anguish or death resulting from any of these at any time. TRANSFER OF RIGHTS OF RECOVERY The following is added to Paragraph 8. Transfer Of Rights Of Recovery Against Others To Us of COM- MERCIAL GENERAL LIABILITY CONDITIONS (Sec- tion IV): We waive any rights of recovery we may have against any person or organization because of payments we make for injury or damage arising out of your ongoing operations or `your work" done under a contract with that person or organization and included in the "products -completed operations hazard". This waiver applies only to a person or organization for whom you are required by written contract, agreement or permit to waive these rights of recovery. AGGREGATE LIMITS OF INSURANCE — PER LOCATION For all sums which the insured becomes legally obli- gated to pay as damages caused by 'occurrences" under COVERAGE A (Section 1), and for all medical expenses caused by accidents under COVERAGE C (Section 1), which can be attributed only to operations at a single 'location": Paragraphs 2.a.. and 2.b. of Limits of Insurance (Sec- tion 111) apply separately to each of your hocations" owned by or rented to you. "Location" means premises Involving the same or connecting lots, or premises whose connection is Interrupted only by a street, roadway, waterway, or right-of-way of a railroad. INCREASED MEDICAL EXPENSE LIMIT The Medical Expense Limit is amended to $10,000. KNOWLEDGE OF OCCURRENCE The following is added to Paragraph 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit of COMMERCIAL GENERAL LIABILITY CONDITIONS (Section IV): Knowledge of an "occurrence", claim or "suit" by your agent, servant or employee shall not in itself constitute knowledge of the named insured unless an officer of the named insured has received such notice from the agent, servant or employee. UNINTENTIONAL FAILURE TO DISCLOSE ALL HAZARDS The following Is added to Paragraph 6. Representa- tions of COMMERCIAL GENERAL LIABILITY CONDI- TIONS (Section M: If you unintentionally fail to disclose any hazards ex- isting at the Inception date of your policy, we will not deny coverage under this Coverage Form because of such failure. However, this provision does not affect our right to collect additional premium or exercise our right of cancellation or non -renewal. LIBERALIZATION CLAUSE The following paragraph is added to COMMERCIAL GENERAL LIABILITY CONDITIONS (Section IV): 10. It a revision to this Coverage. Part, which would provide more coverage with no additional pre- mium, becomes effective during the policy period In the state shown in the Declarations, your pol- icy will automatically provide this additlonal cov- erage on the effective date of the revision. Page 4 or 4 CITY OF JHIUNTINGTON BEACH 2000 Main Street, Huntington Beach, CA 92648-2702 DECLARATION OF PERMITTEE I certify that no vehicle(s) will be used or operated in the performance of the task(s) or event(s) for which this permit is granted. i authorize the City of Huntington Beach to immediately and retroactively revoke the license or permit issued in connection with or in the performance of said task(s) or events(s) if any vehicle(s) is used. Signature of Permittee: Print Name: Michael Bartusic+ Company Name (if applicable): _PARK BENCH CAFE' Date Si neck/-� 1 �Z 16407 EXHIBIT 1 Esparza, Patty From: Dominguez, David Sent: Wednesday, August 08, 2012 10:23 AM To: Vigliotta, Mike; Gomez, Luis Cc: Esparza, Patty Subject: RE: Park Bench Lease Thanks Mike. I just talked it over with Luis and we agree with the date of approval as the start of the new term. atfia e, tDomin ue David Dominguez Facilities, Development& Coneessioris Manager City of Huntington Beach ICOmzrrunity Services Department Office: 714-374.5309 From: Vigliotta, Mike Sent: Wednesday, August 08, 2012 10:22 AM To: Dominguez, David; Gomez, Luis Cc: Esparza, Patty Subject: RE: Park Bench Lease I would start from date approved unless there is language in the lease referencing "backdating" to catch rent etc ... that is why I asked the question about rent ... if they are paying and have insurance etc.. and all is well ... I would date as of CC action From: Dominguez, David Sent: Wednesday, August 08, 2012 10:10 AM To: Vigliotta, Mike; Gomez, Luis Cc: Esparza, Patty Subject: RE: Park Bench Lease Mike — They have been paying and are up to date on rent. The previous lease term was from March 1, 2002 through February 28, 2012. They were essentially on a month -to -month from 2/28 until now. What we are not sure on is if the agreement approved by Council on Monday night will have the term back dated to March 1, or start from the date it was approved. Thanks r9aid e. tDomiM�Ua David Dominguez Facilities_ Development & Concessions Manager City of Huntington Beach iCOmmunity Services Department Office: 714.374.5309 From: Vigliotta, Mike Sent: Wednesday, August 08, 2012 9:53 AM To: Gomez, Luis Cc: Esparza, Patty; Dominguez, David Subject: RE: Park Bench Lease What is the date on the lease? Have they been paying rent up to today? From: Gomez, Luis Sent: Tuesday, August 07, 2012 5:35 PM To: Vigliotta, Mike Cc: Esparza, Patty; Dominguez, David Subject: Park Bench Lease Mike, The previous Park Bench Lease expired on Feb 28, 2012. The new lease was approved last night. Are we to back date the new lease to the expiration date (2/28/12) or can it commence as of today? Luis Gomez, MBA, PE Economic Development Project Manager City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 (714)536-5544 City ®f Huntington Beach 2000 Main Street ® Huntington Beach, CA 92648 (714) 536-5227 ® www.huntingtonbeachca.gov Office of the City Clerk Joan L. Flynn, City Clerk August 8, 2012 Park Bench Cafe Attn: Michael and Christie Bartusick 20431 Graystone Ln Huntington Beach, CA 92646 Dear Mr. Bartusick: Enclosed for your records is a copy of the "Lease Agreement Between The City of Huntington Beach And Michael and Christie Bartusick, dba Park Bench Cafe." JF:pe Enclosure &followap:agnnthr Sister Cities: Anjo, Japan ® Waitakere, New Zealand