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HomeMy WebLinkAboutState Lands Commission - 2018-07-16 Recorded in Official Records, Orange County Hugh Nguyen, Clerk-Recorder II II II III I 111[ 111 I II II NO FEE * $ R 0 0 1 0 5 2 3 4 6 7 $ * RECORDED AT THE REQUEST OF 2018000463815 9:56 am 12112/18 AND WHEN RECORDED MAIL TO: 47 NC-5 L02 46 STATE OF CALIFORNIA 0.00 0.00 0.00 0.00 135.00 0.00 0.000.000.00 0.00 California State Lands Commission Attn: Title Unit 100 Howe Avenue, Suite 100-South Sacramento, CA 95825-8202 STATE OF CALIFORNIA OFFICIAL BUSINESS Document entitled to free recordation pursuant to Government Code Section 27383 PER RESOLUTION NO. 2018-41 SPACE ABOVE THIS L/NE FOR RECORDER'S USE A.P.N. DOCUMENTARY TRANSFER $ EMPT County: Orange LEASE NO.PRC 6616.1 Signature o eclarant or Agent determining the tax This Lease consists of this summary and the following attached and incorporated parts: Section 1 Basic Provisions Section 2 Special Provisions Amending or Supplementing Section 1 or 3 Section 3 General Provisions Exhibit A Land Description Exhibit B Site and Location Map Exhibits C1-C6 Sublease Endorsements Exhibit D Lease Maintenance Reimbursement Agreement SECTION 1 BASIC PROVISIONS THE STATE OF CALIFORNIA, hereinafter referred to as Lessor acting by and through the CALIFORNIA STATE LANDS COMMISSION (100 Howe Avenue, Suite 100-South, Sacramento, California 95825-8202), pursuant to Division 6 of the Public Resources Code and Title 2, Division 3 of the California Code of Regulations, and for consideration specified in this Lease, does hereby lease, demise, and let to CITY OF HUNTINGTON BEACH, hereinafter referred to as Lessee, those certain lands described in Exhibit A hereinafter referred to as Lease Premises, subject to the reservations, terms, covenants, and conditions of this Lease. 1-his document Is so*for the offldei business of the City of Kxftvim seach. ae contempieto I under Govema X Code Page 1 of 19 Sec.27383 and shouktte re did Fee of ctww". RECORDED AT THE REQUEST OF AND WHEN RECORDED MAIL TO: STATE OF CALIFORNIA California State Lands Commission Attn: Title Unit 100 Howe Avenue, Suite 100-South Sacramento, CA 95825-8202 STATE OF CALIFORNIA OFFICIAL BUSINESS Document entitled to free recordation pursuant to Government Code Section 27383 PER RESOLUTION NO. 2018-41 SPACE ABOVE THIS LIVE FOR RECORDER'S USE A.P.N. DOCUMENTARY TRANSFER TAXR-50 EMPT County: Orange �f L ,� LEASE NO. PRC 6616.1 Signature of--Declarant or Agent determining the tax This Lease consists of this summary and the following attached and incorporated parts: Section 1 Basic Provisions Section 2 Special Provisions Amending or Supplementing Section 1 or 3 Section 3 General Provisions Exhibit A Land Description Exhibit B Site and Location Map Exhibits Cl-C6 Sublease Endorsements Exhibit D Lease Maintenance Reimbursement Agreement SECTION 1 BASIC PROVISIONS THE STATE OF CALIFORNIA, hereinafter referred to as Lessor acting by and through the CALIFORNIA STATE LANDS COMMISSION (100 Howe Avenue, Suite 100-South, Sacramento, California 95825-8202), pursuant to Division 6 of the Public Resources Code and Title 2, Division 3 of the California Code of Regulations, and for consideration specified in this Lease, does hereby lease, demise, and let to CITY OF HUNTINGTON BEACH, hereinafter referred to as Lessee, those certain lands described in Exhibit A hereinafter referred to as Lease Premises, subject to the reservations, terms, covenants, and conditions of this Lease. I-hisdocu rant is soi*for the omm of the City of Hwavton Beech, as conternplsted uruier Covens 8W Code Page 1 of 19 Sec. 27383 and.shoukMe recorded fm of charge. MAILING ADDRESS: 2000 Main Street Huntington Beach, CA 92648 LEASE TYPE: Public Agency Use LAND TYPE: Sovereign LOCATION: Sovereign land in the Pacific Ocean, offshore Huntington Beach, Orange County, as described in Exhibit A attached and by this reference made a part hereof. LAND USE OR PURPOSE: The operation and maintenance of an existing public municipal pier and related concessions. TERM: 25 years; beginning June 21, 2018; ending June 20, 2043, unless sooner terminated as provided under this Lease. CONSIDERATION: $125 per year, with additional consideration being the public's use and benefit. Subject to modification by Lessor as specified in Paragraph 11 (b) and (c) of Section 2— Special Provisions; and Paragraph 3(c) of Section 3 - General Provisions. AUTHORIZED IMPROVEMENTS: X EXISTING: Municipal pier and related concessions LIABILITY INSURANCE: N/A SURETY BOND OR OTHER SECURITY: N/A SECTION 2 SPECIAL PROVISIONS BEFORE THE EXECUTION OF THIS LEASE, ITS PROVISIONS ARE AMENDED, REVISED, OR SUPPLEMENTED AS FOLLOWS: 1. All future structural modifications or material changes to any of the Authorized Improvements, other than future routine repairs and maintenance, will require Commission staff s review and approval prior to commencement of construction. In the event of an urgent repair requiring immediate action, notification shall be made through Lessor's 24-hour emergency response number at (562) 590-5201. 2. Lessee acknowledges and agrees: a. The site may be subject to hazards from natural geophysical phenomena including, but not limited to, waves, storm waves, tsunamis, earthquakes, erosion, flooding, and sea-level rise ("climate change General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 2 of 19 effects"). The risks posed to the site from these discrete processes, and the combined, additive impacts of multiple processes are anticipated to increase in severity over the term of the lease due to the localized effects of climate change. Specifically, climate change effects could expose the public beach and pier infrastructure, to stronger and prolonged flooding events, requiring maintenance and repair beyond what is regularly needed. Adverse impacts from climate change effects on facilities within the lease area, could result in degradation of Public Trust resources and values, including water quality, recreation, and public safety. Future conditions may necessitate additional adaptation measures to increase the resiliency of the lease area to the impacts of sea-level rise and coastal climate change processes. b. To assume the risks to the Lessee and to the property that is the subject of any Coastal Development Permit that is issued to Lessee for development on the Lease Premises, of injury and damage from such hazards in connection with the permitted development and use. c. To unconditionally waive any claim or damage or liability against the State of California, its agencies, officers, agents, and employees for injury or damage from such hazards. 3. Lessee acknowledges that the Lease Premises are subject to the Public Trust and are presently available to members of the public for recreation, waterborne commerce, navigation, fisheries, open space, and any other recognized Public Trust uses. Lessee also agrees that any proposed construction activities and subsequent use of the Lease Premises shall not unreasonably interfere with or limit Public Trust rights and shall do so only to the extent necessary to protect public health and safety during construction activities authorized by Lessor, or when imminent threats to public health and safety are present. 4. Lessee shall provide Lessor with a copy of the updated Local Hazard Mitigation Plan (public draft circulated in March 2017) after its approval by Federal Emergency Management Agency (FEMA) and adoption by the City of Huntington Beach. Lessee shall provide Lessor with copies of any subsequent updates to the Local Hazard Mitigation Plan by January 1 of year following such update. 5. Lessee shall conduct structural and utility safety assessment inspection reports, as specified in this paragraph, during the lease term for the improvements in compliance with the American Society of Civil Engineers (ASCE), Manuals of Practice (MOP) 130—Waterfront Facilities Inspection and Assessment, and the ASCE Standard Practice Manual 101-for Underwater Investigations. Lessee shall provide a copy of the inspection reports, including any necessary remedial action plan, to Lessor's staff for review and comment. The next inspection shall be conducted on or before December 31, 2020, and Lessee shall submit a report to Lessor within 30 days of inspection completion. Subsequent inspections and reports shall be due every five years in accordance with the same schedule and timing. 6. Lessee shall provide Lessor with an annual summary report on or before each Lease anniversary date (June 21), or a date to be mutually agreed to by Lessee and Lessor's staff. The report shall include any local monitoring information required by Lessee or other agencies or entities which relates to sea-level rise vulnerability and adaptation capacity of the Lease Premises and the facilities therein. Information shall include but is not limited to: sea-level rise and flooding vulnerability and risk assessments, updates or amendments to the Local Coastal Program, annual flooding frequency and extent, time and duration of any pier closures resulting from flooding, wave overtopping, or storm related damage, annual site photographs, schedule and nature of repair and maintenance operations, and coastal hazard remediation and removal. Pertinent information may be sourced from the Lessee itself or any other research conducted within the Lease Premises or adjacent land. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 3 of 19 7. Lessee shall execute a reimbursement agreement with Lessor, substantially in the form as shown in Exhibit D (attached and by this reference made a part hereof), to pay for all reasonable costs and expenditures paid or incurred by the Lessor, its staff or both for review and approval of any plan or related materials required herein, including but not limited to any review or preparation of reports, documents or other actions pursuant to the California Environmental Quality Act (CEQA), plan reviews, and/or amendments. Payment by Lessee shall be in a form and manner which is determined by Lessor's staff and is consistent with the requirement of State law. 8. Lessor acknowledges that the Huntington Beach Municipal Pier is registered with U.S. National Registry of Historic Places. Therefore, notwithstanding Section 3, Paragraph 13 of this Lease, Lessee may be relieved of its obligation to remove the pier under expiration or sooner termination of this Lease, subject to the following conditions: a) the pier and all appurtenant structures are free of any liens or encumbrances; b) the pier and all appurtenant structures have undergone an above and below water inspection as specified in Section 2, Paragraph 5 of this lease; and the inspection report deems the pier and appurtenant structures to be in sound structural and safe condition with no significant defects; c) upon staff's review and concurrence of the structural inspection reports findings, the Commission at its sole discretion accepts a good and sufficient quitclaim deed for the pier and appurtenant structures from Lessee. If Lessee is released from the removal obligations pursuant to this paragraph, Lessee's insurance, indemnity, and liability obligations shall survive the expiration or early termination of this Lease, until such time, that a new operator or tenant is found for the Pier. 9. Five years prior to the expiration of this Lease, Lessee shall submit to Lessor a summary report that details resiliency planning efforts and adaptation strategies related to sea-level rise impacts within the Lease Premises. The report shall include a record of flood frequency and extent, and protective measures taken to reduce flood risk to public and visitor serving facilities within the Lease Premises and upland property. Findings from the utility safety assessment inspection report for the Huntington Beach Pier will also be summarized in the report as well as any emergency repairs made to structures located in the Lease Premises. The contents of this report shall contain sufficient detail to enable Lessor and Lessee to assess the effectiveness of these planning efforts in maintaining and enhancing the resiliency of Public Trust resources and values within the Lease Premises subject to the risks associated with sea-level rise and climate change. 10. Lessor acknowledges and agrees: a. By way of the Sublease Endorsement Exhibits Clthrough C6, attached and by this reference made a part hereof, Lessor approves the existing subleases between Lessee and the operators of the existing concessions on the Lease Premises, provided that the sublessees shall name the State of California as an additional insured insofar as their operations within the Lease Premises are concerned for all liability insurance coverage required under their respective sublease agreements. b. Any sublease approved by Lessor Pursuant to Subparagraph 9(a) shall be an exception to Section 3, Subparagraph 5(h) of this Lease, and to the extent commercial use of the Lease Premises is contemplated by such sublease, Lessor agrees that such commercial use shall not constitute a Default of the Lease. 11. Lessee acknowledges and agrees: General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 4 of 19 a. Prior to the execution of any subsequent sublease agreement involving the lease facilities, including but not limited to the renewal or extension of any existing subleases described in Paragraph 9 herein, Lessee shall provide Lessor with copies of the sublease agreement for review and approval. The subleases shall confer no rights to the sublessees that extend beyond the terms of this lease, and in no event shall the expiration term of any sublease extend beyond that of this Lease. b. On September 30`h of each year Lessee shall provide Lessor with an annual report showing whether expenses for the operation and maintenance of the Lease Premises exceeded the income generated thereon in the preceding fiscal year. Lessee shall pay rent for any fiscal year in which the amount of income generated exceeds expenses for operation and maintenance of the Lease premises. The monetary rent shall be one half(50%) of the income generated that exceeds the expenses for operation and maintenance within the fiscal year. Lessee shall include the rental payment as prescribed above when submitting an annual report covering a fiscal year in which monetary rent is due. c. Lessee's "income" for purposes of determining rent under this lease shall not include any income tax. "Expenses" shall include direct costs and indirect costs, including administrative expenses and payment of bond and loan obligations. All such indirect costs shall be attributable to the operation and maintenance of the Lease Premises. [Remainder of Page Intentionally Left Blank] General Lease—Public Agency Use Form5l.16(Rev. 10/14) Page 5 of 19 SECTION 3 GENERAL PROVISIONS L GENERAL In the case of any conflict between these General Provisions and Special Provisions found in Section 2, the Special Provisions control. 2. DEFINITIONS For the purposes of this Lease, the following terms shall be defined as stated below: "Additions" shall be defined as any use or Improvements other than those expressly authorized in this Lease. "Alterations" shall be defined as any material change in the size, scope, density, type, nature, or intensity of Improvements on the Lease Premises from what is authorized in this Lease. Alterations shall also include any modifications, alterations, or renovations of the land or waterways on the Lease Premises other than those authorized by this Lease. "Breach" shall be defined as a party's unjustified or unexcused nonperformance of a contractual duty the party is required to immediately perform. "Damages" shall include all liabilities, demands, claims, actions or causes of action whether regulatory, legislative or judicial in nature; all assessments, levies, losses, fines, penalties, damages, costs and expenses, including, without limitation: (i) reasonable attorneys', accountants', investigators', and experts' fees and expenses sustained or incurred in connection with the defense or investigation of any such liability, and (ii) costs and expenses incurred to bring the Lease Premises into compliance with Environmental Laws, a court order, or applicable provisions of a Regulatory Agency. The term "Damages" also includes, expressly, those Damages that arise as a result of strict liability, whether arising under Environmental Laws or otherwise. "Default" shall be defined as a material Breach of magnitude sufficient to justify termination of the Lease. "Environmental Law" shall be defined as and include all federal, state, and local environmental, health, and safety laws, statutes, ordinances, regulations, rules, judgments, orders, and notice requirements, which were in effect as of the date of execution of this Lease or are subsequently enacted and lawfully applied hereto, which regulate or relate to (a) the protection or clean-up of the environment; (b) the use, treatment, storage, transportation, handling or disposal of hazardous, toxic or otherwise dangerous substances, wastes or materials; (c) the quality of the air and the discharge of airborne wastes, gases, particles, or other emissions; (d) the preservation or protection of waterways, groundwater, or drinking water; (e) the health and safety of persons or property; or (f) impose liability with respect to any of the foregoing, including without limitation, the California Environmental Quality Act (CEQA) [PRC §§ 21000 et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) [42 USCS §§ 9601 et seq.]; the Resource Conservation and Recovery Act of 1.976 (RCRA) [42 USCS §§ 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (FWPCA) [33 USCS §§ 1251 et seq.]; the Toxic Substances Control Act (TSCA) [15 USCS §§ 2601 et seq.]; the Hazardous Materials Transportation Act (HMTA) [49 USCS §§ 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USCS §§ 136 et seq.]; the Superfund Amendments and Reauthorization Act [42 USCS §§ 6901 et seq.]; the Clean Air Act [42 USCS §§ 7401 et seq.]; the Safe Drinking Water Act [42 USCS §§ 300f et seq.]; the Solid Waste Disposal Act [42 USCS §§ 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USCS §§ 1201 et seq.]; the Emergency Planning and Community Right to Know Act [42 USCS §§ 11001 et seq.]; the Occupational Safety and Health Act [29 USCS §§ 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C §§ 25280 et seq.]; the California Hazardous Substances Account Act [H & S C §§ 25300 et seq.]; the California Hazardous Waste Control Act [H & S C §§ 25100 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C §§ 24249.5 et seq.]; the Porter-Cologne Water Quality Act [Water C §§ 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above. "Hazardous Material" shall be defined as and include any substance which falls within the definition of hazardous substance, hazardous waste, hazardous material, toxic substance, solid waste, pollutant, or contaminant, under any Environmental Law. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 6 of 19 "Improvements" shall be defined as any modification, alteration, addition, or removal of any material, and any other action which serves to change the condition of the Lease Premises from the natural state whether situated above, on, or under the Lease Premises. Improvements include, but are not limited to buildings, structures, facilities, decks, docks, wharves, piers, walks, curbs, bridges, buoys, landscaping, roadways, shoreline protective structures of all types, foundations, pilings or similar support structures whether above or below the water line, fences, utilities, pipelines, and any other construction of any type situated on the Lease Premises. "Lease" shall be defined as this lease contract together with all amendments and exhibits. "Lease Premises" shall be defined as the area of land, together with any improvements located thereon, the use and occupancy of which is authorized by this Lease. "Lessor" shall be defined as the state of California, acting by and through the California State Lands Commission, including the Commissioners, their alternates and designates, the Executive Officer, and the staff of the California State Lands Commission. "Regulatory Agency" shall include any Federal, State, County, Municipal, or Local agency having jurisdiction over the Lease Premises. "Repairs" shall be defined as all work of any kind made to maintain, change, restore, strengthen, replace, alter, or otherwise affect any Improvement on the Lease Premises. "Residence" shall be defined as any Improvement, whether permanent, movable, or temporary, or a portion thereof, which is for the time being a home or place of lodging. A Residence includes any Improvement affixed to the land such as trailers or cabins, built on a raised foundation such as stilts or pilings, and floating residences such as boats, barges, arks, and houseboats, and any combination of such Improvements which provide residential accommodations to the Lessee or others. "Residence" shall not include transitory, intermittent, recreational use of facilities such as campgrounds. "Residential Use" shall be defined as Improvements such as, but not limited to, sundecks, and sunrooms which are extensions of, or additions to, the upland property and are not water-dependent uses. Although the various uses or Improvements which may fall under this definition may vary by geographic area, lease type, or other factors, it is the intention of the parties to include in this definition all uses and Improvements which are not water-dependent but residential in nature, or those uses and Improvements which are not consistent with common law public trust principles and values. 3. CONSIDERATION (a) Absolute Triple Net Lease This Lease is an absolute triple net lease, pursuant to which Lessor has no obligation with respect to the payment of taxes, insurance, the cost of maintenance, utilities and repairs or other costs or obligations associated with the Leased Premises, except as expressly stated herein. (b) Rent Lessee agrees to pay Lessor rent as stated in this Lease, in annual installments, for the use and occupancy of the Lease Premises. The first installment shall be due on or before the beginning date of this Lease and all subsequent installments shall be due on or before each anniversary of its beginning date during each year of the Lease term, or as otherwise provided in this Lease. Said sums shall be paid in lawful money of the United States of America. Lessee shall send said rent to the mailing address of Lessor. Timeliness of receipt of remittances sent by mail shall be governed by the postmark date as stated in Government Code Section 11002. Invoices for rent due may be provided by Lessor as a courtesy. Lessor's failure to, or delinquency in, providing invoices shall neither excuse Lessee from paying rent, nor extend the time for paying rent. (c) Modification Lessor may modify the method, amount, or rate of consideration effective on each fifth anniversary of the beginning date of this Lease. Should Lessor fail to exercise such right effective on any fifth anniversary it may do so effective on any one (1) of the next four (4) anniversaries following such fifth anniversary, without prejudice to its right to effect such modification on the next or any succeeding fifth anniversary of the General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 7 of 19 beginning date. No such modification shall become effective unless Lessee is given at least thirty (30) days' notice prior to the date of the Commission meeting wherein the rent modification is considered, or thirty (30) days' notice prior to the effective date of the increase, whichever provides a greater notice period. If the consideration for this Lease is based on a percentage of income, royalties, profits, or any similar business performance indicators, Lessee shall provide Lessor with financial statements and all other documents necessary to determine the relevant basis for income. (d) Penalty and Interest Any installments of rent accruing under this Lease not paid when due shall be subject to a delinquency charge equal to five percent (5%) of the principal sum due. Annual payments shall bear interest as specified in Public Resources Code Section 6224 and the Lessor's then existing administrative regulations governing penalty and interest. (e) Non-Monetary Consideration If the consideration to Lessor for this Lease is the public use, benefit, health, or safety, Lessor shall have the right to review such consideration at any time and set a monetary rental if the Lessor, at its sole discretion, determines that such action is in the best interest of the State. Lessee's assignment or transfer of this Lease pursuant to Section 3 Paragraph 11 below to any third party which results in royalties, profits, or any form of compensation, whether monetary or otherwise, shall give Lessor the right to reevaluate the requirements of this Lease as stated in Section 3 Paragraph 11. Lessee shall be given at least thirty (30) days' notice prior to the date of the Commission meeting wherein the rent modification is considered, or thirty (30) days' notice prior to the effective date that this Lease is converted to a monetary rental, whichever provides more notice. (f) Place for Payment of Rent All rent that becomes due and payable under this Lease shall be paid to Lessor in person or by United States mail at the Sacramento Offices of the California State Lands Commission, currently at 100 Howe Avenue, Suite 100-South, Sacramento, CA 95825-8202, or at any other place or places that Lessor may designate by written notice to Lessee. Alternately, Lessee may contact Lessor's accounting department for Lessor's current practices for payment by credit card or electronic fund transfer. 4. BOUNDARIES This Lease is not intended to establish the State's boundaries and is made without prejudice to either party regarding any boundary or title claims which may be asserted presently or in the future. 5. LAND USE (a) General (1) Lessee shall use the Lease Premises only for the purpose or purposes stated in this Lease and only for the operation and maintenance of the Improvements expressly authorized in this Lease. Lessee shall commence use of the Lease Premises within ninety (90) days of the beginning date of this Lease or within ninety (90) days of the date set for construction to commence as set forth in this Lease, whichever is later. (2) All demolition, construction, remodeling, reconstruction, maintenance, repairs, removal, or remediation performed on the Lease Premises at any time by Lessee shall first be authorized by all appropriate Regulatory Agencies. Lessee is solely responsible for determining what approvals, authorizations, or certifications are required, and shall be solely responsible for all costs incurred thereby. In addition, Lessee shall obtain and comply with preventative or remedial measures required by any environmental reports, assessments, or inspections, including, but not limited to those required by the California Environmental Quality Act and/or the National Environmental Policy Act, or as otherwise required by law or reasonably requested by Lessor. Nothing in this Lease shall be interpreted as a pre- approval of any permit, certification, or any other precondition required for the use of the Lease Premises. (b) Continuous Use Lessee's use of the Lease Premises shall be continuous from commencement of the Lease until its expiration. Lessee's discontinuance of such use for a period of ninety (90) days shall be presumed to be an abandonment unless Lessee demonstrates to Lessor's satisfaction that Lessee's use of the Lease Premises is consistent with similarly situated properties. In the event of an abandonment, Lessor may elect to terminate the Lease as General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 8 of 19 provided in Paragraph 12(a)(3). Abandonment of the Lease Premises shall not relieve Lessee of any obligations under this Lease. (c) Repairs and Maintenance (1) Lessor shall not be required to make any Repairs in, on, or about all or part of the Lease Premises. Lessee shall, at all times during the term of this Lease and without any cost or expense to Lessor, keep and maintain the Lease Premises, including all Improvements, in good order and repair and in a clean, safe, sanitary, and orderly condition. (2) Lessee shall make, or cause to be made, any Repairs which may be required by any Regulatory Agency. Lessee shall observe and comply with, any law, statute, ordinance, plan, regulation, resolution, or policy applicable to the Lease Premises in making such Repairs. All work shall be performed with reasonable diligence, completed within a reasonable time, and performed at the sole cost and expense of Lessee. (3) Lessee expressly accepts the Lease Premises "as is" and expressly acknowledges that: (i) Lessor has made no representations or warranties as to the suitability of the Lease Premises for any Improvements. Lessee shall conduct all tests necessary to determine the suitability of the Lease Premises for any proposed use or Improvements authorized; and (ii) Lessor has made no representations or warranties as to the quality or value of any Improvements found on the Lease Premises, or of their conformity to any applicable building codes, zoning ordinances, or other regulations. Lessee agrees to inspect any preexisting Improvements at its own cost to determine whether such Improvements are safe and suitable for the Lessee's intended use; and (iii) Lessee shall neither be entitled to any reduction in rent, nor any extension of the terms of this Lease because of damage to or destruction of any Improvements on the Lease Premises. (iv) Lessee and Lessor agree that any Improvements on the Lease Premises constitute the personal property of Lessee and that fixture law does not apply. (4) In the event that the Lease Premises is partly, or in whole, comprised of tidal, submerged, or waterfront property, Lessee expressly accepts the hazards involved in using or improving such lands. Lessor is not responsible for, and Lessee shall not be reimbursed for nor receive any offset of rent for, any damages or reduced use of the Lease Premises caused by: local or invasive flora or fauna, flooding, erosion, sea level rise, storms, freezing, inclement weather of any kind, acts of god, maintenance or failure of protective structures, and any other such hazards. (d) Additions, Alterations, and Removal No Improvements other than those expressly authorized in this Lease shall be constructed by the Lessee on the Lease Premises without the prior written consent of Lessor. Any Additions or Alterations are expressly prohibited. Lessee is also prohibited from any Additions or Alterations which cause a material change to the environmental impact on or around the Lease Premises. (e) Enjoyment This Lease is non-exclusive, and is subject to the provisions of Section 3, Paragraph 6 below. Lessee shall have the right to exclude persons from the Lease Premises only when their presence or activity constitutes a material interference with Lessee's use and enjoyment of the Lease Premises. (f) Discrimination Lessee, in its use of the Lease Premises, shall not discriminate against any person or class of persons on any basis protected by federal, state, or local law, including: race, color, creed, religion, national origin, sex, sexual orientation, gender identity, age, marital/parental status, veteran status, or disability. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 9 of 19 (g) Residential Use Unless otherwise provided for in this Lease, no portion of the Lease Premises shall be used as a location for a Residence, for the purpose of mooring or maintaining a structure which is used as a Residence, or for Residential Uses. (h) Commercial Use Unless otherwise provided for in this Lease, the Lease Premises is to be used by Lessee and Lessee's invitees or guests only. Use of the Lease Premises for commercial purposes; conducting a business, whether for profit or otherwise; and any subleasing, rental, or any transaction whereby Lessee directly or indirectly receives compensation from a third party in exchange for use of the Lease Premises shall constitute an immediate Default of this lease with no cure period. 6. RESERVATIONS, ENCUMBRANCES, AND RIGHTS-OF-WAY (a) Reservations (1) Lessor expressly reserves all natural resources in or on the Lease Premises, including but not limited to timber, minerals, and geothermal resources as defined under Public Resources Code sections 6401, 6407, and 6903, respectively; the right to grant and transfer the same; as well as the right to grant leases in and over the Lease Premises which may be necessary or convenient for the extraction of such natural resources. Such leasing shall be neither inconsistent nor incompatible with the rights or privileges of Lessee under this Lease. (2)Lessor expressly reserves a right to go on the Lease Premises and all Improvements for any purposes associated with this Lease or for carrying out any function required by law, or the rules, regulations, or management policies of the State Lands Commission. Lessor shall have a right of reasonable access to the Lease Premises across Lessee owned or occupied lands adjacent to the Lease Premises for any purpose associated with this Lease. (3)Lessor expressly reserves to the public an easement for convenient access across the Lease Premises to other State-owned lands located near or adjacent to the Lease Premises and a right of reasonable passage across and along any right-of-way granted by this Lease; however, such easement or right-of- way shall be neither inconsistent nor incompatible with the rights or privileges of Lessee under this Lease. (4)Lessor expressly reserves the right to lease, convey, or encumber the Lease Premises, in whole or in part, during the Lease term for any purpose not inconsistent or incompatible with the rights or privileges of Lessee under this Lease. (b) Encumbrances The Lease Premises may be subject to pre-existing contracts, leases, licenses, easements, encumbrances, and claims and is made without warranty by Lessor of title, condition, or fitness of the land for the stated or intended purpose. 7. RULES, REGULATIONS, AND TAXES (a) Lessee shall comply with and be bound by all presently existing or subsequently enacted rules, regulations, statutes or ordinances of the State Lands Commission or any Regulatory Agency. Occupancy or use of the Lease Premises provides no exemption from applicable regulations including, but not limited to, federal, state, county and local regulations, regulations promoting public health, safety, or welfare, building codes, zoning ordinances, and sanitation regulations. Lessee expressly acknowledges that Regulatory Agencies have jurisdiction over the Lease Premises unless such laws are in direct conflict with state law or public trust principles. (b) Lessee understands and agrees that a necessary condition for the granting and continued existence of this Lease is that Lessee obtains and maintains all permits or other entitlements. Lessee expressly acknowledges that issuance of this Lease does not substitute for, or provide preference in obtaining authorizations from other Regulatory Agencies. General Lease Public Agency Use Form51.16(Rev. 10/14) Page 10 of 19 (c) Taxes (1) In addition to the rent due under this Lease, Lessee accepts responsibility for and shall pay any and all real and personal property taxes, including possessory interest taxes, assessments, special assessments, user fees, service charges, and other charges of any description levied, imposed on, assessed, or associated with the leasehold interest, Improvements on the Lease Premises, any business or activity occurring on the Lease Premises, the Lease Premises itself, or any portion thereof, levied by any governmental agency or entity. Such payment shall not reduce rent due Lessor under this Lease and Lessor shall have no liability for such payment. (2) In the event that this Lease commences, terminates or expires during a tax year, Lessee shall pay the taxes for the period of such year during which this Lease was in effect. (3) Any and all taxes and assessments and installments of taxes and assessments required to be paid by Lessee under this Lease shall be paid when due and the official and original receipt for the payment of such tax, assessment, or installment shall be delivered to Lessor upon request. (4) Lessee shall indemnify and hold Lessor, the Lease Premises, and any Improvements now or hereafter located thereon, free and harmless from any liability, loss, or Damages resulting from any taxes, assessments, or other charges required by this Lease to.be paid by Lessee and from all interest, penalties, and other sums imposed thereon and from any sales or other proceedings to enforce collection of any such taxes, assessments, or other charges. 8. INDEMNITY (a) Lessee's use of the Lease Premises and any Improvements thereon is at Lessee's sole and exclusive risk. (b) In addition to any other obligation to indemnify Lessor as otherwise provided in this Lease, except to the extent caused by the sole negligence and/or willful misconduct of the Lessor, Lessee shall indemnify, hold harmless, and, at the option of Lessor, defend Lessor, its officers, agents, and employees from any and all Damages resulting from Lessee's occupation and use of the Lease Premises. Lessee shall reimburse Lessor in full for all reasonable costs and attorneys' fees, specifically including, without limitation, any Damages arising by reason of: (1) The issuance, enjoyment, interpretation, Breach, or Default of this Lease; (2) The challenge to or defense of any environmental review upon which the issuance of this Lease is based; (3) The death or injury of any person, or damage to or destruction of any property from any cause whatever in any way connected with the Lease Premises, or with any of the Improvements or personal property on the Lease Premises; (4) The condition of the Lease Premises, or Improvements on the Lease Premises; (5) An act or omission on the Lease Premises by Lessee or any person in, on, or about the Lease Premises; (6) Any work performed on the Lease Premises or material furnished to the Lease Premises; (7) Lessee's failure to comply with any material legal or other requirement validly imposed on Lessee or the Lease Premises by a Regulatory Agency. (c) The reimbursement provisions of this Paragraph 8 shall not apply to any claims, litigation, or other actions which may be brought by either Lessee or Lessor against each other. (d) Nothing in this paragraph shall be construed as requiring that Lessor defend itself against all or any aspect of any challenge to this Lease or any associated environmental review. However, Lessee may take whatever legal action is available to it to defend this Lease or any associated environmental review against any challenge by a third party, whether or not Lessor chooses to raise a defense against such a challenge. (e) Lessee shall notify Lessor immediately in case of any accident, injury, or casualty on the Lease Premises. 9. INSURANCE (a) Lessee shall obtain and maintain in full force and effect during the term of this Lease comprehensive general liability insurance and property damage insurance, with such coverage and limits as may be reasonably requested by Lessor from time to time, but in no event for less than the sum(s) specified against any and all claims or liability arising out of the ownership, use, occupancy, condition, or maintenance of the Lease Premises and all Improvements. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 11 of 19 (b) The insurance policy shall identify the Lease by its assigned number. The specific Improvements shall also be generally identified, as well as their location on state owned property. The coverage provided shall be primary and non-contributing. Lessee shall keep such policy current. Lessor shall be named as a "certificate holder" and/or an"additional interest" on the policy. Lessee shall provide Lessor with a current certificate of insurance at all times. At Lessor's request, Lessee shall provide a full copy of the current insurance policy, along with any and all endorsements or other such documents affecting the coverage. Lessor will not be responsible for any premiums or other assessments on the policy. (c) The insurance coverage specified in this Lease shall be in effect at all times during the Lease term and subsequently until Lessor has either accepted all of the Lease Premises as improved or restored by Lessee as provided elsewhere in this Lease. Lessee shall notify Lessor within five (5) business days if the insurance is canceled for any reason. 10. SURETY BOND (a)When required by Section 1 of this Lease, Lessee shall provide a surety bond or other security device acceptable to Lessor, for the specified amount, and naming the State of California, California State Lands Commission as the assured, to guarantee to Lessor the faithful observance and performance by Lessee of all of the terms, covenants, and conditions of this Lease. (b) Lessor may require an increase in the amount of the surety bond or other security device to cover any additionally authorized Improvements, any modification of consideration, or to provide for inflation or other increased need for security. The surety bond or other security device may be increased on each fifth anniversary of the beginning date of this Lease. Should Lessor fail to exercise such right effective on any fifth anniversary, it may do so effective on any one (1) of the next four (4) anniversaries following such fifth anniversary without prejudice to its right to effect such modification on the next or any succeeding fifth anniversary. No such modification shall become effective unless Lessee is given at least thirty (30) days' notice prior to the date of the Commission meeting wherein the modification of the bond or security is considered, or thirty (30) days' notice prior to the effective date of the increase, whichever provides more notice. (c)The surety bond or other security device shall be maintained in full force and effect at all times during the Lease term and subsequently until Lessor has either accepted all of the Lease Premises as improved or restored by Lessee as provided elsewhere in this Lease. Lessee must first seek approval of Lessor before changing the type of security device used, or the bond holder. 11. ASSIGNMENT,ENCUMBRANCING OR SUBLETTING (a) Lessee shall not either voluntarily or by operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber this Lease and shall not sublet the Lease Premises, in whole or in part, or allow any person other than the Lessee's employees, agents, servants and invitees to occupy or use all or any portion of the Lease Premises without the prior written consent of Lessor, which consent shall not be unreasonably withheld. (1) Notwithstanding the foregoing prohibition against transfer and assignment, the Lease may be transferred by Lessee if the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; or the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse. In the event of such a transfer, Lessor shall be notified in writing within 30 days of the transfer. (2) Notice to Lessor of Successor Trustee(s): In the event this Lease is held in trust, and the Lessee is a trustee thereof, the substitution or succession of a new trustee shall not be an assignment or transfer for the purposes of this Paragraph. Lessee (and by operation of law, any successor trustee) agrees to provide prompt notice to Lessor of any succession or substitution of trustee in accordance with Paragraph 16(c) of General Provisions, no later than sixty (60) days after the named trustee as appears on the face of this Lease becomes unable or ceases to serve as trustee for any reason. (b) The following shall be deemed to be an assignment or transfer within the meaning of this Lease: (1)If Lessee is a business entity, any dissolution, merger, consolidation or other reorganization of Lessee, or the sale or other transfer of substantially all the assets of Lessee. If Lessee is a publicly traded entity, General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 12 of 19 transfers of interests in Lessee shall not constitute an assignment requiring the consent of Lessor. (2)If Lessee is a partnership, a transfer of any interest of a general partner, a withdrawal of any general partner from the partnership, or the dissolution of the partnership. (c) If this Lease is for sovereign lands appurtenant to adjoining littoral or riparian land, Lessee shall not transfer or assign its ownership interest or use rights in such adjoining lands separately from the leasehold rights granted herein without the prior written consent of Lessor. (d) If Lessee desires to assign, sublet, encumber or otherwise transfer all or any portion of the Lease Premises, Lessee shall do all of the following: (1) Give not less than 90 days' prior written notice to Lessor; (2)Provide the name, complete business organization, operational structure, and formation documents of the proposed assignee, sublessee, secured third party, or other transferee; and the nature of the use of and interest in the Lease Premises proposed by the assignee, sublessee, secured third party or other transferee. . (3)Provide the terms and conditions of the proposed assignment, sublease, or encumbrance or other transfer; (4)Provide audited financial statements for the two most recently completed fiscal years of the proposed assignee, sublessee, secured party or other transferee; and provide pro forma financial statements showing the projected income, expense and financial condition resulting from use of the Lease Premises; and (5)Provide such additional or supplemental information as Lessor may reasonably request concerning the proposed assignee, sublessee, secured party or other transferee. (6) Lessor will evaluate proposed assignees, sublessees, secured third parties and other transferees and grant approval or disapproval according to standards of commercial reasonableness considering the following factors within the context of the proposed use: the proposed party's financial strength and reliability, their business experience and expertise, their personal and business reputation, their managerial and operational skills, their proposed use and projected rental, as well as other relevant factors. (e) Lessor shall have a reasonable period of time from the receipt of all documents and other information required under this provision to grant or deny its approval of the proposed party. Lessor may reevaluate the rent, insurance and/or bond provisions of this Lease, and may condition its approval of the proposed assignment, sublease, hypothecation, mortgage, or other transfer on the party's acceptance of the new terms. Lessee's rights stated in this paragraph shall apply regardless of whether the proposed transfer coincides with a regular rent review period as stated in Section 3 Paragraph 3(c) above. (f) Lessee's mortgage or hypothecation of this Lease, if approved by Lessor, shall be subject to terms and conditions imposed by a separately negotiated encumbrancing agreement. (g) Upon the express written assumption of all obligations and duties under this Lease by an assignee approved by Lessor, the Lessee may be released from all liability under this Lease arising after the effective date of assignment and not associated with Lessee's use, possession or occupation of or activities on the Lease Premises; except as to any hazardous wastes, substances or materials as defined under federal, state or local law, regulation, or ordinance manufactured, generated, used, placed, disposed, stored or transported on the Lease Premises during Lessee's tenancy. (h) If the Lessee files a petition or an order for relief is entered against Lessee, under Chapters 7, 9, 11 or 13 of the Bankruptcy Code (11 USC Sect. 101, et seq.) then the trustee or debtor-in-possession must elect to assume or reject this Lease within sixty (60) days after filing of the petition or appointment of the trustee, or the Lease shall be deemed to have been rejected, and Lessor shall be entitled to immediate possession of the Lease Premises. No assumption or assignment of this Lease shall be effective unless it is in writing and General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 13 of 19 unless the trustee or debtor-in-possession has cured all Defaults under this Lease (monetary and non- monetary) or has provided Lessor with adequate assurances (1) that within ten (10) days from the date of such assumption or assignment, all monetary Defaults under this Lease will be cured; and (2) that within thirty (30) days from the date of such assumption, all non-monetary Defaults under this Lease will be cured; and (3) that all provisions of this Lease will be satisfactorily performed in the future. (i) In the event of any transfer or assignment, under this Paragraph 11 or by any other means authorized by this Lease, the Lease terms shall be for the remaining years existing on the Lease prior to the transfer or assignment. A transfer or assignment shall not extend the term of this Lease. 12. DEFAULT AND REMEDIES (a) Default The occurrence of any one or more of the following events shall immediately and without further notice constitute a Default of this Lease: (1) Lessee's failure to make any payment of rent, royalty, or other consideration as required under this Lease; or (2) Lessee's failure to obtain or maintain liability insurance or a surety bond or other security device as required under this Lease; or (3) Lessee's abandonment of the Lease Premises (including the covenant for continuous use as provided for in Paragraph 5(b)) during the Lease term; or (4) Lessee's failure to obtain and maintain all necessary governmental permits or other entitlements; or (5)The maintenance of the Lease Premises in violation of, or failure to comply with, any applicable provisions of any Regulatory Agency, Environmental Law, or maintenance of the Lease Premises in a condition constituting nuisance; or (6) Lessee's Failure to commence to construct and to complete construction of the Improvements authorized by this Lease within the time limits specified in this Lease. (7) Lessee is found to sublet or otherwise surrender daily management and control of the Lease Premises to a third party without the knowledge, expressed written consent or authorization of the Lessor. (b) Lessee's failure to observe or perform any other term, covenant, or condition of this Lease when such failure shall continue for a period of thirty (30) days after Lessor's giving written notice shall constitute a Default of this lease. However, if the nature of Lessee's Default under this paragraph 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 commences such cure within such thirty (30) day period and diligently proceeds with such cure to completion. (c) Should Lessee Breach any term, covenant, or condition of this Lease under Paragraph 12(b) above three (3) times in any three hundred and sixty-five (365) day period, the third Breach will be a Default under this Lease and Lessor will be entitled to immediately terminate this Lease, and take other appropriate action. Lessor will provide written notice of each Breach as provided above, and provide written notice that future Breaches will constitute immediate Default with no cure period. (d) Remedies In the event of a Default by Lessee and Lessee's failure to cure such Default if such a cure period is applicable, Lessor may at any time and with or without notice do any one or more of the following in addition to any rights or remedies permitted by law: (1) Re-enter the Lease Premises, remove all persons and property, and repossess and enjoy such premises; or General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 14 of 19 (2) Terminate this Lease and Lessee's right of possession of the Lease Premises by any lawful means. The termination shall not relieve Lessee of any obligation, monetary or otherwise, which has accrued prior to the date of termination. Such termination shall be effective upon Lessor's giving written notice and upon Lessee's receipt of such notice. Lessee shall immediately surrender possession of the Lease Premises to Lessor. Lessor shall be entitled to recover from Lessee all amounts to which Lessor is entitled pursuant to Section 1951.2 of the California Civil Code, or any other provision of law, including any necessary Repair, renovation, alteration, remediation, or removal of Improvements; or (3) Maintain this Lease in full force and effect and recover any rent, royalty, or other consideration as it becomes due without terminating Lessee's right of possession regardless of whether Lessee shall have abandoned the Lease Premises, subject to the conditions imposed by Cal. Civil Code § 1951.2; or (4) Exercise any other right or remedy which Lessor may have at law or equity. (e) Determination of Rental Value If rent under this Lease is calculated as a percentage of Lessee's income attributable to the Lease Premises and Lessee abandons the Lease Premises during some or all of the applicable period, then the reasonable rental value shall be the percentage of proceeds Lessor would have received had Lessee operated the Lease Premises in the usual and customary manner. (f) Waiver of Rights The failure or delay of either party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any Breach by the other party. Lessor's acceptance of any rent shall not be considered a waiver of any preexisting Breach by Lessee other than the failure to pay the particular rent accepted regardless of Lessor's knowledge of the preexisting Breach at the time rent is accepted. 13. RESTORATION OF LEASE PREMISES AND ENVIRONMENTAL MATTERS (a) Restoration of Lease Premises (1) Upon expiration or sooner termination of this Lease, Lessee must immediately surrender possession of the Lease Premises to Lessor. Prior to the time of surrender, Lessee must remove all or any Improvements together with the debris and all parts of any such Improvements at its sole expense and risk, regardless of whether Lessee actually constructed or placed the Improvements on the Lease Premises; or Lessor, at its sole and absolute discretion, may itself remove or have removed all or any portion of such Improvements at Lessee's sole expense. Lessor may waive all or any part of this obligation in its sole discretion if doing so is in the best interests of the State. (2) As a separate and related obligation, Lessee shall restore the Lease Premises as nearly as possible to the conditions existing prior to the installation or construction of any Improvements. For purposes of this Lease, restoration includes removal of any landscaping; removal of any Hazardous Materials; and to the extent possible, undoing any grading, fill, excavation, or similar alterations of the natural features of the Lease Premises. Lessor may waive all or any part of this obligation in its sole and absolute discretion. (3)Unless otherwise provided for in this Lease, Lessee shall submit to Lessor no later than one (1) year prior to the expiration of this Lease either: (a) an application and minimum expense deposit for a new lease for the continued use of the Lease Premises, or (b) a plan for the restoration of the Lease Premises to be completed prior to the expiration of the lease term together with a timeline for obtaining all necessary permits and conducting the work prior to the expiration of this Lease. (4) In removing any or all Improvements, or conducting any restoration work, Lessee shall be required to obtain any permits or other governmental approvals as may then be required by any Regulatory Agency, including, without limitation, any Environmental Law. (5)Lessor may, upon written notice, in its sole and absolute discretion, accept title to any or all Improvements at the termination of this Lease. Lessor shall notify Lessee that Lessor intends to take title to any or all Improvements within six (6) months of Lessee submitting a plan for restoration under General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 15 of 19 Paragraph 13(a)(3)(b) above. If Lessor elects to take title to any such Improvements, Lessee shall deliver to Lessor such documentation as may be necessary to convey title to such Improvements to Lessor free and clear of any liens, mortgages, loans, or any other encumbrances. Lessor shall not pay, and Lessee shall not be entitled to compensation for Lessor's taking title to such property. (b) Environmental Matters (1) Lessee's Obligations: (i) Lessee will not use, occupy, or permit any portion of the Lease Premises to be used or occupied in violation of any Environmental Law. Lessee shall not manufacture or generate or store Hazardous Material on the Lease Premises unless specifically authorized under other terms of this Lease. (ii) Lessee shall practice conservation of water, energy, and other natural resources. (iii) Lessee shall notify Lessor and the appropriate governmental emergency response agency, or agencies immediately in the event of any release or threatened release of any Hazardous Material. (2) Lessor may at any time during the Lease term require Lessee to conduct at its own expense and by a contractor approved by Lessor an independent environmental site assessment or inspection for the presence or suspected presence of Hazardous Material generated, used, placed, disposed, stored, or transported on the Lease Premises during the term of the Lease. Lessee shall provide the results of the assessment or inspection to Lessor and the appropriate governmental response agency or agencies and shall further be responsible for removing or taking other appropriate remedial action regarding such Hazardous Material in accordance with applicable Environmental Law. (3) Environmental Indemnity Lessee shall indemnify, defend, and hold Lessor and Lessor's, officer, appointees, volunteers, employees, agents, successors and assigns free and harmless from and against all Damages that may at any time be imposed upon, incurred by, or asserted or awarded against Lessor in connection with or arising from any Breach of Lessee's obligations hereunder; or out of any violation by Lessee of any Environmental Law; or resulting in the imposition of any lien or claim for the recovery of any costs for environmental cleanup or other response costs relating to the release or threatened release of Hazardous Materials on the Lease Premises during the Lessee's tenancy. This obligation shall include any prior leases between Lessor and Lessee and will continue through any periods Lessee is in holdover, unlawful detainer, or any subsequent month-to-month tenancies created by operation of law. Lessee's obligations hereunder will survive the expiration or sooner termination of this Lease. (4) Violation of this section shall constitute grounds for termination of the Lease. Lessor, shall notify Lessee when, in Lessor's opinion, Lessee has violated the provisions of this section. Lessee shall immediately discontinue the conduct and respond within five (5) business days. Lessee shall take all measures necessary to remedy the condition. 14. QUITCLAIM Lessee shall, upon the early termination of this Lease and at Lessor's request, execute and deliver to Lessor in a form provided by Lessor a good and sufficient release of all rights under this Lease. Should Lessee fail or refuse to deliver such a release, Lessor may record a written notice reciting such failure or refusal. This written notice shall, from the date of its recordation, be conclusive evidence against Lessee of the termination of this Lease and all other claimants. 15. HOLDING-OVER (a) This Lease shall terminate without further notice upon the expiration of the term of this Lease. Lessee shall have removed any Improvements and completed any restoration as required by Lessor prior to the expiration of this Lease, and shall surrender possession of the Lease Premises. Any failure by the Lessee to remove Improvements, restore the Lease Premises, and/or surrender possession of the Lease Premises at the expiration or sooner termination of this Lease shall not constitute a renewal or extension and shall not give Lessee any rights in or to the Lease Premises or any part thereof except as expressly provided in this Lease. Lessee shall be deemed in unlawful detainer of the Lease Premises and Lessor shall be entitled to all resulting legal remedies. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 16 of 19 (b) Lessor may, in its sole discretion, choose to accept Rent for the Lease Premises instead of immediately taking legal action to recover possession of the Lease Premises. Any tenancy created by operation of law on Lessor's acceptance of rent shall be deemed a month-to-month tenancy regardless of what sum or sums Lessee delivers to Lessor. Except as set forth below, any subsequent tenancy created in this manner shall be on the same terms, covenants, and conditions set forth in this Lease insofar as such terms, covenants, and conditions can be applicable to a month-to-month tenancy (c) In recognition of the increased accounting, land management, and supervisory staff time required for month-to-month tenancies, the rent for each month or any portion thereof during such holdover period may be an amount equal to one hundred fifty percent (150%) of one-twelfth (1/12) of the total compensation for the most recent year paid. In the event this Lease does not require monetary compensation, Lessor shall have the right to establish rent based on the fair market value of the Lease Premises. The month-to-month tenancy may be terminated by Lessee or Lessor upon thirty (30) calendar days' prior written notice to the other. 16. ADDITIONAL PROVISIONS (a) Waiver (1)No term, covenant, or condition of this Lease and no omission, neglect, Default or Breach of any such term, covenant or condition shall be deemed to have been waived by Lessor's acceptance of a late or nonconforming performance or otherwise, unless such a waiver is expressly acknowledged by Lessor in writing. No delay or omission of Lessor to exercise any right or power arising from any omission, neglect, Default or Breach of term, covenant, or condition of this Lease shall be construed as a waiver or any acquiescence therein. (2) Any such waiver shall not be deemed to be a waiver of any other term, covenant or condition; of any successive Breaches of the same term, covenant, or condition; or of any other Default or Breach of any term, covenant or condition of this Lease. (b) Time Time is of the essence for this Lease and each and all of its terms, covenants or conditions in which performance is a factor. (c) Notice All notices required to be given under this Lease shall be given in writing, sent by U.S. Mail with postage prepaid, to Lessor at the offices of the State Lands Commission and the Lessee at the address specified in this Lease. Lessee shall give Lessor notice of any change in its name or address. (d) Consent Where Lessor's consent is required under this Lease its consent for one transaction or event shall not be .deemed to be a consent to any subsequent occurrence of the same or any other transaction or event. (e) Changes This Lease may be terminated and its term, covenants, and conditions amended, revised, or supplemented . only by mutual written agreement of the parties. (0 Successors The terms, covenants, and conditions of this Lease shall extend to and be binding upon and inure to the benefit of the heirs, successors, and assigns of the respective parties. (g) Joint and Several Obligation If more than one Lessee is a party to this Lease, the obligations of the Lessees shall be joint and several. (h) Captions The section and paragraph captions used in this Lease are for the convenience of the parties. The captions are not controlling and shall have no effect upon the construction or interpretation of this Lease. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 17 of 19 (i) Severability If any term, covenant or condition of this Lease is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Lease shall not be affected thereby, and each term and provision of this Lease shall remain valid and enforceable to the fullest extent permitted by law. 0) Representations Lessee agrees that no representations have been made by Lessor or by any person or agent acting for Lessor. Lessor and Lessee agree and acknowledge that this document contains the entire agreement of the parties, that there are no verbal agreements, representations, warranties or other understandings affecting this Lease, and Lessor and Lessee, as a material part of the consideration of this Lease, waive all claims against the other for rescission, damages, or otherwise by reason of any alleged covenant, agreement or understanding not contained in this Lease. (k) Gender and Plurality In this Lease, the masculine gender includes both the feminine and neuter, and the singular number includes the plural whenever the context so requires. (I) Survival of Certain Covenants All covenants pertaining to bond, insurance, indemnification, restoration obligations, Breach, Default, and remedies shall survive the expiration or earlier termination of this Lease until Lessee has fulfilled all obligations to restore the Lease Premises as required by this Lease. (m) Counterparts This agreement may be executed in any number of counterparts and by different parties in separate counterparts. Each counterpart when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement. (n) Delegation of Authority Lessor and Lessee acknowledge Lessor as defined herein includes the Commission Members, their alternates or designees, and the staff of the Commission. The ability of staff of the Commission to give consent, or take other discretionary actions described herein will be as described in the then-current delegation of authority to Commission staff. All other powers are reserved to the Commission. [Remainder of Page Intentionally Left Blank] General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 18 of 19 STATE OF CALIFORNIA - STATE LANDS COMMISSION LEASE NO. PRC 6616.1 This Lease shall become effective only when approved by and executed on behalf of the State Lands Commission of the State of California and a duly executed copy has been delivered to Lessee. The submission of this Lease by Lessor, its agent, or representative for examination by Lessee does not constitute an option or offer to lease the Lease Premises upon the terms and conditions contained herein, or a reservation of the Lease Premises in favor of Lessee. Lessee's submission of an executed copy of this Lease to Lessor shall constitute an offer to Lessor to lease the Lease Premises on the terms and conditions set forth herein. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date hereafter affixed. LESSEE: LESSOR: CITY OF`- T G-TON BEACH STATE OF CALIFORNIA STATE LANDS COMMISSION y• -- ---------- ------- -- Michael Pose obert Brian Bugsch Title: Ma or J Title: Chief, Land Management Division AUG 3 0 Z018 Date: (,, /�211/ Date: ATTACH ACKNOWLEDGMENT Execution of this document was authorized by the California State Lands Commission on (Month Day Year) A!UCHAEL 0 FORM By: T� E. G ES CITY ATTORNEY CITY OF HUNTINGTON BEACH General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 19 of 19 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On 7/17/2018 before me, P. L. Esparza, Notary Public, personally appeared Mike Posey who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P.L.ESPARZA Notary Public-California WITNESS my hand and official seal. Orange County Commission k 2204197 My Comm.Expires Aug 4,2021 (Seal) (Notary S gna re) EXHIBIT A Land Description EXHIBIT A PRC 6616.1 LAND DESCRIPTION A strip of tide and submerged land 160 feet wide being 80 feet on each side of the following described centerline situate within the City of Huntington Beach, Orange County, State of California, the centerline of said strip being described as follows; BEGINNING at the intersection of northeasterly line of Ocean Avenue with the centerline of Main Street, thence S 41' 41' 37" W 2065.92 feet to the end of said centerline of said strip of tide and submerged land. EXCEPTING THEREFROM all that portion lying landward of the ordinary high water mark of the Pacific Ocean. Accompanying plat is hereby made part of this description. END OF DESCRIPTION Prepared 06/14/2018 by the California State Lands Commission Boundary Unit. . �typ.L LA1�rd „o o .e a 8 Op CAL1V "Page 1 of 2 513 NO SCALE \ \ \ ���♦ APN: 024-150-06� 0 \ o 80' \ ,Li F i ♦♦�oF 79SS EXISTING 03� MUNICIPAL PIER LEASE AREA PACIFIC OCEAN EXHIBIT A Page 2 of 2 RPF 06/14/2018 LAND DESCRIPTION PLAT PRC 6616.1, CITY OF CALIFORNIA STATE HUNTINGTON BEACH LANDS COMMISSION ORANGE COUNTY Ll - 514 EXHIBIT B Site and Location Map NO SCALE SITE P �z9♦♦ APN: 024-150-06 / `s 0, 80, F� 9SS EXISTING MUNICIPAL PIER LEASE AREA PACIFIC OCEAN MUNICIPAL PIER, HUNTINGTON BEACH NO SCALE LOCATION Exhibit B t _ - PRC 6616.1 CITY OF HUNTINTON BEACH (;; APN 024-150-06 t, y, GENERAL LEASE- z PUBLIC AGENCY USE ORANGE COUNTY • awnwm,n ru.n�� 1;J. jr 1 + _ - - - _.ti�s.+i._ SITE t SITE V. d r MAP SOURCE: USGS QUAD This Exhibit is solely for purposes of generally defining the lease premises, is based on unverified information provided by the Lessee or other parties and is not intended to be, nor shall it be construed as, a waiver or limitation of any State interest in the subject or any other property. RPF 06/14/2018 EXHIBITS C1 through C6 Endorsement of Subleases EXHIBIT C-I PRC 6616.1 ✓ . J SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No.C57 dated, June 21, 2018, the herein sublease between, City of Huntington Beach and Abercrombie & Fitch Company, under a portion of State Lease PRC No. 6616.1 , is hereby approved. BY: BiRIAN BUGSCH, CHO Land Management Division EXHIBIT C-2 �l^1G/IY�Gf PRC 6616.1 �J SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No. C57 dated, June 21, 2018, the herein sublease between, City of Huntington Beach and Ruby's Diner Inc., under a portion of State Lease PRC No. 6616.1, is hereby approved. BY: BRIAN BUGSCH, of Land Management Division EXHIBIT C-3 (091'fM/l w�0s kX h, h)1- -2 PRC 6616.1 y SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No. C57 dated, June 21, 2018, the herein sublease between, City of Huntington Beach and Let's Go Fishing, under a portion of State Lease PRC No. 6616.1, is hereby approved. BY: /4z��fzl BfRIAN BUGSCH, ief Land Management Division EXHIBIT C-4 PRC 6616.1 � y SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No.C57 dated, June 21 , 2018, the herein sublease between, City of Huntington Beach and Fair Share Enterprises, under a portion of State Lease PRC No. 6616.1 , is hereby approved. d - B IAN BUGSCH, Chief Land Management Division EXHIBIT C-5 109 inAlly mja�5 ix- hlb-1 PRC 6616.1 SUBLEASE ENDORSEMENT I STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No. C57 dated, June 21, 2018, the herein sublease between, City of Huntington Beach and Surf City Store, under a portion of State Lease PRC No. 6616.1 , is hereby approved. BY: B'RIAN BUGSCH, Chief Land Management Division EXHIBIT C-6 0 ,q)ra lk / IN,4j , �6-Yhlb 4 } PRC 6616.1 `J —j SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No. C57 dated, June 21, 2018, the herein sublease between, City of Huntington Beach and Kite Connection, under a portion of State Lease PRC No. 6616.1 , is hereby approved. BY: 134�IAN BUGSCH, Chief Land Management Division EXHIBIT D Lease Maintenance Reimbursement Agreement STATE OF CALIFORNIA AGREEMENT NUMBER STANDARD AGREEMENT k'67 STD.213(new 06103) REGISTRATION NUMBER l. This Agreement is entered into between the State Agency and the Contractor named below: STATE AGENCY'S NAME California State Lands Commission (State) CONTRACTOR'S NAME _ City of Huntington Beach 2. The term of this Agreement is: June 21, 2018 thru June 20, 2043 3. The maximum amount of this Agreement is: $ 22,500 4. The parties agree to comply with the terms and conditions of the following exhibits which are by this reference made a part of the Agreement: Exhibit A—Scope of Work 2 Page(s) Exhibit B—Budget Detail and Payment Provision/Definitions and Terms 2 Page(s) Exhibit C*—General Terms and Conditions _ GTC 4/2017 Check mark One item below as Exhibit D: 2 Page(s) —Exhibit D—Special Terms and Conditions (attached hereto as part of this Agreement) ❑ Exhibit D*—Special Terms and Conditions _ Items shown with an Asterisk(*)are hereby incorporated by reference and made part of this Agreement as if attached hereto These documents can be viewed at htW.Ilwww.das.ca.4ovIols/ResourceslStandardContractLanpuape.aspx. IN WITNESS WHEREOF,this Agreement has been executed by parties hereto. CALIFORNIA CONTRACTOR Department of General Services Use ool CO CT R' AM (ifot r a individual state whether corporation,partnership,etc.) Cit of H in t Be BY( or n ignaurr DATE SIGNED PRINiT5NAME AND TITLE OF PERS SIG ING Michael Posey, Ma or ADDRESS 2000 Main Street, Huntington Heach CA 92648 STATE OF CALIFORNIA AGENCY NAME California a Lands Commission BY(Autho ' of Si attire) DATE SIGN �/o P TED NAME AND TITLE OF PERSZ5N SIGNING enise Cook, Fiscal Officer ADDRESS Exempt per 100 Howe Avenue, Suite 100-South, Sacramento, California 95825 850 EXHIBIT A SCOPE OF WORK 1. Work to be Performed—The City of Huntington Beach, the"Lessee", enters into this Agreement with the California State Lands Conunission, the"Commission" or"State" (hereafter the Lessee and the Commission/State are referred to collectively as the"Parties") for staff costs associated with the processing and review of periodic reports of the facilities associated with Lessee's General Lease— Public Agency Use, Lease No. PRC 6616.1 (Lease). The State hereby agrees to perform the following services: A. Lease Management: The State shall review the Lessee's annual summary reports. Reviewing costs shall include, but not be limited to, actual costs for staff time for review of sea-level rise and flooding vulnerability and risk assessments, updates or amendments to the Local Coastal Program, annual flooding frequency and extent, annual site photographs, schedule and nature of repair and maintenance operations, and coastal hazard remediation and removal. In addition to Lessee's annual report submissions, Lessee shall conduct a structural assessment on or before December 31, 2020 and then every five years following the initial inspection, with a report to.be provided within 30 days of inspection for Commission engineering staff review. Staff costs shall include but not be limited to, actual costs of staff time for review of submitted annual summary reports and engineering review of structural inspection reports for the term of the lease pursuant to Section 2, Special Provisions, Paragraph 6, of Lease No. PRC 6616.L B. Mutual Understanding: This Agreement is entered into by the parties hereto with the express understanding that the State cannot assure: 1) final approval of the permit or lease; 2) that permits from other State or local permitting agencies are obtainable; and 3) that either the State or the Lessee by entering into this Agreement is representing that the lease will go forward as proposed. Lessee understands and expressly acknowledges that the State's review of annual summary and inspection reports is for the sole purpose of evaluating Lessee's compliance with a lease from the Commission, if any, and not for any other purpose. 2. Parties' Agents A. For Engineering Review the State's Project Officer shall be: Chandrashekar Basavalinganadoddi, Supervising Mineral Resource Engineer California State Lands Commission Mineral Resource Management 200 Oceangate, 12`h floor Long Beach, CA 90802 Tel. (562) 590-5209 Email: Chandrashekar.Basavaiinganadoddi(d)slc.ca.gov Page 2 of 11 851 B. For Lease Management the State's Project Officer shall be: Lucien Pino, Public Land Management Specialist California State Lands Commission 100 Howe Avenue, Suite 100 South Sacramento, CA 95825 Tel. (916) 574- 1858 E-mail: lucie.n.pino a slc.ca.gov C. The Applicant's Project Manager shall be: Travis K. Hopkins, Director of Public Works City of Huntington Beach Public Works Department 2000 Main Street Huntington Beach, CA 92648 Tel. (714) 374-5348 E-mail: thopkins(c)surfcity-hb.org D. The Applicant's Agent is: Travis K. Hopkins, Director of Public Works City of Huntington Beach Public Works Department 2000 Main Street Huntington Beach, CA 92648 Tel. (714) 374-5348 E-mail: thopkins[a)surfcity-hb.org 3. Notices and Authorities A. Any notice or other written communications required or permitted under this Agreement may be personally delivered in writing to the State's Project Officer or Applicant's Project Manager, or may be sent by certified mail, return receipt requested, to the address stated above and shall, based on such delivery or sending, be deemed to have been effectively communicated. Either party may change such address by written notice to the other party. Any notice given other than as provided above, shall not be deemed to be effectively communicated until received in writing. B. The Project Manager shall have full authority to act on behalf of the Lessee for administration of the Project. All communications given to the Project Manager shall be as binding, as if given to the Lessee. C. The State may change its Project Officer, at any time, by written notice to the Lessee. The Lessee may change its Project Manager, at any time, by written notice to the State's Project Officer. Page 3 of 11 852 EXHIBIT B BUDGET AND PAYMENT PROVISIONS 1. Invoicing and Payment—Lessee agrees to reimburse the State for all reasonable costs associated with the review and processing of annual summary report and quinquennial inspection report submissions according to this Standard Agreement whether prior or subsequent to the execution of this Agreement. Processing costs shall include, but not be limited to, staff time associated with those tasks outlined in Exhibit A, Scope of Work. Staff costs shall be computed in accordance with Section 8752 of the State Administrative Manual and shall include salaries and wages, related staff benefits and administrative overhead. The invoice shall be mailed to the Lessee's Project Manager. Payments shall reference the Agreement number assigned to this Agreement and must be mailed to the following address: California State Lands Commission 100 Howe Avenue, Suite 100 South Sacramento, CA 95825-8202 Attention Accounting 2. Estimated Reimbursable Costs —The initial estimated costs are based on the information and contracts existent as of the date of this Agreement. The itemized reimbursable costs estimate, to include recurring annual costs, for Work to be Perfonned is: A. Lease Management Estimate: To include the following: 1. Processing and Review of Annual Summary Report: $500 2. Processing and Engineering Review of Periodic Structural Inspection Reports (once every five years): $2,0001 ($400 per year) Approximate Recurring Annual Cost Estimate for Lease Management Review: $9001 3. Expense Deposits and Billings: A. Lease Management: Staff costs incurred by the State for Lease Management pursuant to this Agreement, as specified in Exhibit B, paragraph 2(c), shall be billed in arrears on a monthly basis. All payments are due 30 days from the date of the invoice. The State reserves the right to demand an expense deposit equal to the remainder of the Agreement should the Lessee fail to pay invoices within the time specified. Total costs invoiced, including expense deposits, shall not exceed the dollar amount specified in this Agreement unless amended. ' Estimate is based on usual and customary review;should extraordinary circumstances or major repair work occur,staff time needed for engineering review may exceed this estimate.In such an event,Lessee will compensate the State for staff time that exceeds the estimated amount,in accordance with the terms of this agreement. Z The$900 Recurring Annual Cost Estimate includes the$500 annual amount,and the recurring periodic amount divided equally at$400 per year over each five-year period. Page 4 of 11 853 4. Additional Costs or Services—Lessee will be advised of any estimated cost increase in writing in accordance with this Agreement should the need for additional services become known or as costs previously estimated exceed the above estimate. Upon notification of the need for additional funds, the Lessee shall have the option to dispute or accept the increase with all the terms and conditions of this Agreement being unchanged and in effect. The Lessee shall notify the State within five (5) days of notice of any intent to dispute the change. Non-response shall be acknowledged as acceptance of the additional charges and Lessee will be billed for the balance in accordance with the terms above. 5. Definitions and Terms - Wherever the following abbreviations and terms (or pronouns in place of them) are used, the intent and meaning shall be interpreted as provided in this section. Working titles having a masculine gender, and pronouns referring to such said titles, are utilized in this Agreement for the sake of brevity and are not intended to refer to either sex or the neuter. All references to the singular shall refer also to the plural. All references to the plural shall refer also to the singular. A. As used within this Agreement, the terms "Lessee" and"Contractor" are used interchangeably and are to be considered the same entity. B. As used within this Agreement, the terms "State" and"Commission" are used interchangeably and are to be considered the same entity. C. The term "Agreement"refers to this document as executed by the Lessee and the State. This document includes Standard Form and any attached Exhibits. D. The term "Project Manager"refers to that person appointed or designated by the Applicant to administer the lease for the Applicant. E. The term"Project Officer"refers to that person appointed by the State to manage the lease file associated with this agreement. F. The term "Lessee's Agent"refers to that person designated by the Lessee to provide technical assistance and support to the State in coordinating transmittal of reports and other technical information and shall have no authority to act for the Lessee unless otherwise stated in writing by Lessee to the State's Project Officer. [Ren7ainder of Page Intentionally Left Blank] Page 5 of 11 854 GTC 04/2017 EXHIBIT C GENERAL TERMS AND CONDITIONS 1. APPROVAL: This Agreement is of no force or effect until signed by both parties and approved by the .Department of General Services, if required. 2. AMENDMENT: No amendment or variation of the terms of this Agreement shall be valid unless made in writing, signed by the parties and approved as required. No oral understanding or Agreement not incorporated in the Agreement is binding on any of the parties. 3. ASSIGNMENT: This Agreement is not assignable by the Contractor, either in whole or in part, without the consent of the State in the form of a formal written amendment. 4. AUDIT: Contractor agrees that the awarding department, the Department of General Services, the Bureau of State Audits, or their designated representative shall have the right to review and to copy any records and supporting documentation pertaining to the performance of this Agreement. Contractor agrees to maintain such records for possible audit for a minimum of three (3) years after final payment, unless a longer period of records retention is stipulated. Contractor agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records. Further, Contractor agrees to include a similar right of the State to audit records and interview staff in any subcontract related to performance of this Agreement. (Gov. Code §8546.7, Pub. Contract Code §10115 et seq., CCR Title 2, Section 1896). 5. INDEMNIFICATION: Contractor agrees to indemnify, defend and save harmless the State, its officers, agents and employees from any and all claims and losses accruing or resulting to any and all contractors, subcontractors, suppliers, laborers, and any other person, firm or corporation furnishing or supplying work services, materials, or supplies in connection with the performance of this Agreement, and from any and all claims and losses accruing or resulting to any person, firm or corporation who may be injured or damaged by Contractor in the performance of this Agreement. 6. DISPUTES: Contractor shall continue with the responsibilities under this Agreement during any dispute. 7. TERMINATION FOR CAUSE: The State may terminate this Agreement and be relieved of any payments should the Contractor fail to perform the requirements of this Agreement at the time and in the manner herein provided. In the event of such termination the State may proceed with the work in any manner deemed proper by the State. All costs to the State shall be deducted from any sum due the Contractor under this Agreement and the balance, if any, shall be paid to the Contractor upon demand. 8. INDEPENDENT CONTRACTOR: Contractor, and the agents and employees of Contractor, in the performance of this Agreement, shall act in an independent capacity and not as officers or employees or agents of the State. 9. RECYCLING CERTIFICATION: The Contractor shall certify in writing under penalty of perjury, the nunimum, if not exact, percentage of post-consumer material as defined in the Public Contract Code Section 12200, in products, materials, goods, or supplies offered or sold to the State regardless of whether the product meets the requirements of Public Contract Code Section 12209. With respect to printer or Page 6 of 11 855 duplication cartridges that comply with the requirements of Section 12156(e), the certification required by this subdivision shall specify that the cartridges so comply (Pub. Contract Code §12205). 10. NON-DISCRIMINATION CLAUSE: During the performance of this Agreement, Contractor and its subcontractors shall not deny the contract's benefits to any person on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, nor shall they discriminate unlawfully against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. Contractor shall insure that the evaluation and treatment of employees and applicants for employment are free of such discrimination. Contractor and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code §12900 et seq.), the regulations promulgated thereunder (Cal. Code Regs., tit. 2, §11000 et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code §§11135-11.139.5), and the regulations or standards adopted by the awarding state agency to implement such article. Contractor shall permit access by representatives of the Department of Fair Employment and Housing and the awarding state agency upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours' notice, to such of its books, records, accounts, and all other sources of information and its facilities as said Department or Agency shall require in ascertaining compliance with this clause. Contractor and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. (See Cal. Code Regs., tit. 2, §11105.) Contractor shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under the Agreement. 11. CERTIFICATION CLAUSES: The CONTRACTOR CERTIFICATION CLAUSES contained in the document CCC 04/2017 are hereby incorporated by reference and made a part of this Agreement by this reference as if attached hereto. 12. TIMELINESS: Time is of the essence in this Agreement. 13. COMPENSATION: The consideration to be paid Contractor, as provided herein, shall be in compensation for all of Contractor's expenses incurred in the performance hereof, including travel, per diem, and taxes, unless otherwise expressly so provided. 14. GOVERNING LAW: This contract is governed by and shall be interpreted in accordance with the laws of the State of California. 15, ANTITRUST CLAIMS: The Contractor by signing this agreement hereby certifies that if these services or goods are obtained by means of a competitive bid, the Contractor shall comply with the requirements of the Government Codes Sections set out below. a. The Government Code Chapter on Antitrust claims contains the following definitions: 1) "Public purchase" means a purchase by means of competitive bids of goods, services, or materials by the State or any of its political subdivisions or public agencies on whose behalf the Attorney General may bring an action pursuant to subdivision (c) of Section 16750 of the Business and Professions Code. 2) "Public purchasing body" means the State or the subdivision or agency making a public purchase. Government Code Section 4550. Page 7 of 11 856 b. hi submitting a bid to a public purchasing body, the bidder offers and agrees that if the bid is accepted, it will assign to the purchasing body all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. See. 15) or under the Cartwright Act(Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, materials, or services by the bidder for sale to the purchasing body pursuant to the bid. Such assignment shall be made and become effective at the time the purchasing body tender's final payment to the bidder. Government Code Section 4552. c. If an awarding body or public purchasing body receives, either through judgment or settlement, a monetary recovery for a cause of action assigned under this chapter, the assignor shall be entitled to receive reimbursement for actual legal costs incurred and may, upon demand,recover from the public body any portion of the recovery, including treble damages, attributable to overcharges that were paid by the assignor but were not paid by the public body as part of the bid price, less the expenses incurred in obtaining that portion of the recovery. Government Code Section 4553. d. Upon demand in writing by the assignor, the assignee shall, within one year from such demand, reassign the cause of action assigned under this part if the assignor has been or may have been injured by the violation of law for which the cause of action arose and (a) the assignee has not been injured thereby, or(b) the assignee declines to file a court action for the cause of action. See Government Code Section 4554. 16. CHILD SUPPORT COMPLIANCE ACT: For any Agreement in excess of$100,000, the contractor acknowledges in accordance with Public Contract Code 7110, that: a. The contractor recognizes the importance of child and family support obligations and shall fully comply with all applicable state and federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with section 5200) of Part 5 of Division 9 of the Family Code; and b. The contractor, to the best of its knowledge is fully complying with the earnings assignment orders of all employees and is providing the names of all new employees to the New Hire Registry maintained by the California Employment Development Department. 17. UNENFORCEABLE PROVISION: In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. 18. PRIORITY HIRING CONSIDERATIONS: If this Contract includes services in excess of$200,000, the Contractor shall give priority consideration in filling vacancies in positions funded by the Contract to qualified recipients of aid under Welfare and Institutions Code Section 11200 in accordance with Pub. Contract Code §10353. 19. SMALL BUSINESS PARTICIPATION AND DVBE PARTICIPATION REPORTING REQUIREMENTS: a. If for this Contract Contractor made a commitment to achieve small business participation, then Contractor must within 60 days of receiving final payment under this Contract(or within such other time period as may be specified elsewhere in this Contract) report to the awarding department the actual percentage of small business participation that was achieved. (Govt. Code § 14841.) Page 8 of 11 857 b. If for this Contract Contractor made a comnutment to achieve disabled veteran business enterprise (DVBE) participation, then Contractor must within 60 days of receiving final payment under this Contract (or within such other time period as may be specified elsewhere in this Contract) certify in a report to the awarding department: (1) the total amount the prime Contractor received under the Contract; (2) the name and address of the DVBE(s) that participated in the performance of the Contract; (3) the amount each DVBE received from the prime Contractor; (4) that all payments under the Contract have been made to the DVBE; and (5) the actual percentage of DVBE participation that was achieved. A person or entity that knowingly provides false information shall be subject to a civil penalty for each violation. (Mil. & Vets. Code § 999.5(d); Govt. Code § 14841.) 20, LOSS LEADER: If this contract involves the furnishing of equipment, materials, or supplies then the following statement is incorporated: It is unlawful for any person engaged in business within this state to sell or use any article or product as a"loss leader" as defined in Section 17030 of the Business and Professions Code. (PCC 10344(e).) [Remainder of Page Intentionally Left Blank] Page 9 of 11 858 EXHIBIT D SPECIAL TERMS AND CONDITIONS 1. Type of Agreement—This Agreement between the State and the Lessee is for the reimbursement of costs, from the Lessee to the State, for lease maintenance related activities, detailed in Exhibits A and B of this Agreement, performed by staff of the California State Lands Commission. This Agreement does not involve the procurement of goods or services from the Lessee. 2. Effective Reimbursement Period—Notwithstanding the date of Agreement approval in paragraph 1 of GTC 4/2017, the Lessee agrees to reimburse the State for lease maintenance-related review costs detailed in Exhibits A and B of this Agreement, that accrue beginning on the date listed in form STD.213, paragraph 2 of this Agreement until the termination of this Agreement. The term of this agreement shall extend to include any holdover period of Lease No. PRC 6616.1. 3. This paragraph supersedes paragraph 5 of, Exhibit C, "Indemnification": Indemnification—To the fullest extent permitted by law, Lessee shall defend, indemnify, and hold harmless the State of California and any and all agencies or departments thereof, including but not limited to, any and all boards, commissions, officers, agents, employees, and representatives (Indemnitees), against any and all claims, liabilities, charges, losses, expenses, and costs, including the State's attorneys' fees (Liabilities), that may arise from or by reason of any action or inaction by the Indemnitees in connection with the work described in Exhibit A. This obligation of the Lessee to indemnify, defend, and hold harmless the Indemnitees shall not apply to any Liabilities caused solely by the gross negligence or intentional acts of the State or its officers, agents, and employees; or to any claims, litigation, or to other actions brought by the Lessee against the Indemnitees in relation to the Lessee's application or this Agreement. This provision shall survive termination of this Agreement. 4. This paragraph supersedes paragraph 6 of GTC 610, Exhibit C, "Disputes": Disputes —Except as otherwise provided in this Agreement, any dispute concerning a question of fact arising under or relating to the performance of this Agreement which is not disposed of by Agreement shall be decided by the Project Officer, who shall reduce his decision to writing in regard to the dispute and shall transmit a copy thereof to the Lessee within thirty (30) days. The decision of the Project Officer shall be final and conclusive, unless within thirty (30) days from the date of receipt of such copy, the Lessee transmits to the State a written appeal. Said appeal shall be supported with specificity. a. In connection with any appeal proceeding under this clause, the Lessee shall be afforded an opportunity to be heard before the State Lands Commission within sixty(90) days of the receipt by the State of the Lessee's written appeal and to offer evidence in support of its appeal. Pending the final decision of any such dispute, the Lessee shall proceed diligently with the performance of the Agreement and in accordance with the written decision of the Project Officer which is the subject of the Lessee's appeal including the payment of invoices to the State. b. The procedure described herein shall not prejudice or deny the Lessee's remedies at law. However, the Lessee agrees to exhaust the procedure described herein before pursuing remedies at law. All amounts paid to the State under protest shall be held by the State in trust until the dispute is resolved. Page 10 of 11 859 5. Modification—This paragraph supersedes paragraph 7 of GTC 610, Exhibit C, "Termination for Cause": Either party may elect to modify the scope of work or costs associated with the lease maintenance described in Exhibit A, Paragraph 1(A) and Exhibit B, Paragraphs 2(A) of this Agreement by written notice at any time prior to or during the lease term upon ten (10) days written notice to the other party. The Lessee agrees that in the event of such modification of this Agreement by either party as provided above, it shall reimburse the State one hundred percent (100%) of all costs incurred by the State in the performance of its obligations as described in this Agreement. 6. Reimbursement of Costs — Lessee shall reimburse the State in full for all reasonable costs and attorney's fees, including, but not limited to,those charged it by the California Office of the Attorney General, that the State incurs in connection with the defense of any action brought against the State challenging this Agreement or any other matter related to this Agreement or the work performed by the State under this Agreement. In addition, Lessee shall reimburse the State for any court costs and reasonable attorney fees that the State may be required by a court to pay as a result of such action. Lessee may participate in the defense of the action,but its participation shall not relieve it of its obligations under this Paragraph. The provision of this Paragraph shall not apply to any claims, litigation or other actions which may be brought by the Parties against each other and shall not apply to the extent that any such obligation is void or otherwise unenforceable under applicable law in effect on or validly retroactive to the date of this Agreement. Nothing in this Paragraph shall be construed to require the State to defend itself against all or any aspect of the challenge to this Agreement or work performed under this Agreement. However, Lessee may take whatever legal action is available to it to defend this Agreement or any work performed under this Agreement against any challenge by a third party, whether or not the State chooses to raise a defense against such a challenge. 7. Records— Upon five (5)business days' notice, the State's records relating to its costs shall be available for the Lessee's audit in the State's office in Sacramento. Said audit shall take place only during regular business hours of the. State. Payment of costs by the Lessee shall not constitute a waiver of its rights to audit nor an acknowledgment by the Lessee of the validity of the costs that have been paid. Nothing herein shall be deemed to require the State, its consultants, other contractors and subcontractors to maintain books, records, or documents other than those usually maintained by them, provided that such books, records and documents reasonably segregate and identify the costs for which reimbursement is required hereunder. As used herein, "State's records" include any audit of the consultant by the State or its designated representative as authorized in this Agreement. S. Paragraphs 4, 7, 8, 9, 10, 11, 13, 15, 16, 18, 19, and 20 of GTC 4/2017, Exhibit C, do not apply to this Reimbursement/Revenue Agreement, and are hereby waived and shall have no force or effect upon this Agreement. [Remainder of Page Intentionally Left Blank] Page 11 of 11 860 RESOLUTION NO. 2018-41 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AUTHORIZING EXECUTION BY THE MAYOR AND CITY CLERK OF A LEASE AGREEMENT BETWEEN THE CITY AND CALIFORNIA STATE LANDS COMMISSION FOR OPERATION AND MAINTENANCE OF HUNTINGTON BEACH PIER AND RELATED CONCESSIONS BE IT RESOLVED by the City Council of the City of Huntington Beach that it does hereby approve the Lease with California State Lands Commission for the use of tidelands for the operation and maintenance of the Huntington Beach Municipal Pier, together with its related concessions, a copy of which lease is attached hereto and by this reference made a part hereof as though set out in full herein. BE IT FURTHER. RESOLVED that the Mayor and City Clerk are authorized and directed to execute the lease herein referred to, and forward same to the proper authorities at the State Lands Commission for consideration. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 16th day of July, 2018. k 114 " - Mayor REVIE ND APPROVED: APPROVED FO City a a er riAttorney ATED AND APPROVE Director of Public s 18-6539/181302/MV Res. No. 2018-41 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, ROBIN ESTANISLAU, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a Regular meeting thereof held on July 16, 2018 by the following vote: AYES: O'Connell, Semeta, Posey, Hardy, Delgleize, Brenden, Peterson NOES: None ABSENT: None RECUSE: None City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California The foregoing Inetrumant is a owmat copy of the original on file In this office. /- '� 201_�_' �y Clerk and x o .lecot he Council of the city of Huntington Beach, California. By �"� ri City of Huntington Beach 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov f9.I7.1909,P ♦ Office of the City Clerk Robin Estanislau, City Clerk December 12, 2018 California State Lands Commission Attn: Title Unit 100 Howe Avenue, Suite 100-South Sacramento, CA 95825-8202 To Whom It May Concern: Enclosed is a copy of the fully executed and recorded "Lease No. 6616.1 approved by the Huntington Beach City Council on July 16, 2018. Sincerely, qw Robin Estanislau, CIVIC City Clerk RE:ds Enclosure Sister Cities. Anjo, Japan ♦ Waitakere, New Zealand Switzer Donna From: Tucker, Aja <Aja.Tucker@rec.ocgov.com> Sent: Monday, December 10, 2018 4:26 PM To: Dills, Ken Cc: Switzer, Donna Subject: RE: Document Transfer Tax Information Handout The DTT Statement needs to be on the document, a separate piece of paper is not acceptable in Orange County. We usually see it around or below the title of the document, here's a screen shot of what it looks like on a Deed (it would not be any different for a lease)...you would not have to execute a new document, per say (although an attorney may suggest otherwise). It could be typed or legibly printed in the general area. 1 SPACE ABt)vE 13t13 LI1E Ff)A RECARIDER'S USE GRANT DEED 1"HE IJNMASIGNIM GRANTORS)DECLARF(S)111Ai UOC:UMF.NTARY'TRANSFER TAX IS$994-50 and CITY S ® computed on:ull va:uc of proper'ty conveyed,or ❑ computed un full value Iess:Jens or encumbrances remaenmg at the tune of sak. ❑ unincorporaled area: ® Cm o!Sants Ana Aja "fucker Supervisor- Recorder Sem-ices (71.3) 834-4022 Hugh Ngu%'en Orange County Clerk-Recorder Website:www.ocrecorder.com Subscribe to our newsletter From: Dills, Ken [mailto:kdills@surfcity-hb.org] Sent: Monday, December 10, 2018 4:20 PM To: Tucker, Aja Cc: Switzer, Donna Subject: RE: Document Transfer Tax Information Handout So would a simple letter from the City suffice as a DTT Statement or is there a form we need to fill out? From:Tucker, Aja <Aja.Tucker@rec.ocgov.com> Sent: Monday, December 10, 2018 4:14 PM To: Dills, Ken <kdills@surfcity-hb.org> Cc: Switzer, Donna <Donna.Switzer@surfcity-hb.org> Subject: RE: Document Transfer Tax Information Handout Hi Ken, I wish I could be more useful to you, however, our office is tasked with ministerial duties only. One of those being, looking for DTT Statements on applicable documents, a lease qualifies for DTT, therefore the DTT Statement must be on the document, whether tax is due or not. We're not able to "help" make the determination. 1 I may be able to provide some clarity with regard to the main component when completing the DTT Statement. The following question should be asked, primarily: "Is there any monetary consideration for the transfer......if the answer is yes, then tax is due on that consideration, ($0.55 per five hundred, $055 for$101 -$500, $1.10 for$501-$1000). It is possible for the term of the lease to be less than 35 years but there still be monetary consideration. If you are uncertain we suggest you consult an attorney to help make that determination. If there is no monetary consideration, the DTT Statement would state "No Consideration" and then a reason why, such as gift, term of the lease is less than 35 years. We do not verify or police the DTT statements. We have no way of knowing if the information provided is accurate, incorrect or fraudulent. Please let me know if I can be of further assistance to you. Thank you! .Aja fucker Supervisor- Recorder Smices (71.3) 8 34-4022 40 Hugh Nguyen Orange Count Clerk-Recorder Website:www.ocrecorder.com Subscribe to our newsletter From: Dills, Ken [mailto:kdills@surfcity-hb.org] Sent: Monday, December 10, 2018 3:33 PM To: Tucker, Aja Cc: Switzer, Donna Subject: RE: Document Transfer Tax Information Handout Thank you Aja. This pertains to our lease with the State for the coastal lands on which our municipal pier sits. The lease is$125/year and is for 25 years. If I'm reading this correctly, any lease less than 35 years is exempt, and therefore, we would be exempt from paying any documentary transfer tax. Am I correct? Ken Dills City of Huntington Beach 714-375-5055 From:Tucker, Aja <Aia.Tucker@rec.ocgov.com> Sent: Monday, December 10, 2018 3:25 PM To: Dills, Ken <kdills@surfcity-hb.org> Subject: Document Transfer Tax Information Handout Good afternoon Ken, Please find attached our DTT Information handout and let me know if you have any questions. 2 Thank you! Aja Tucker Supervisor- Recorder Services (714)834-4022 Hugh Nguyen Omngc County Clcrk-Roeondtr Website:www.ocrecorder.com Subscribe to our newsletter 3 STATE OF CALIFORNIA EDMUND G. BROWN JR., Governor CALIFORNIA STATE LANDS COMMISSION JENNIFER LUCCHESI, Executive Officer 100 Howe Avenue, Suite 100-South (916) 574-1800 Fax (916) 574-1810 Sacramento, CA 95825-8202 California Relay Service TDD Phone 1-800-735-2929 1 from Voice Phone 1-800-735-2922 L Contact Phone: (916) 574-1858 Contact Fax: (916) 574-1835 Travis K. Hopkins OCT ' 1 2018 File Ref: PRC 6616.1 City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Subject: General Lease — Public Agency Use, for the Continued Use and Maintenance of an Existing Municipal Pier and Appurtenant Structures, Located in the Pacific Ocean, Huntington Beach, Orange County. Dear Mr. Hopkins: Enclosed is the fully executed lease, PRC 6616.1, authorizing the subject facilities. This Lease was approved at the State Lands Commission meeting held on June 21 , 2018. Please be advised that, Lease No. PRC 6616.1, has an annual rent associated with it in the amount of $125. Please note that invoices are sent as a courtesy, rent is due on or before June 21sr of each year. If you do not receive an invoice, you are still obligated to pay rent as set forth in your lease. Our Accounting Office will be notifying you regarding a refund due or balance outstanding on this project under separate cover. The Commission appreciates your cooperation and patience in helping to complete this transaction. Please feel free to write or call if you have any questions. Sincerely, Lucien Pino Public Land Management Specialist Enclosure fi �3 M1 City of Huntington Beach \ 1 '�4 J File #: 18-094 MEETING DATE: 7/16/2018 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Travis K. Hopkins, PE, Director of Public Works Subiect: Adopt Resolution No. 2018-41 authorizing the execution of a Lease Agreement with the State Lands Commission for operation and maintenance of the Huntington Beach Pier and related Concessions Statement of Issue: The current lease with the California State Lands Commission for operation and maintenance of the Huntington Beach Pier expires on January 31 , 2019. A Council resolution is needed to authorize the Mayor to execute a new lease agreement. Financial Impact: The annual rent payable to the State of one-hundred-twenty-five dollars ($125) and other minor administrative costs will be paid from the Public Works General Fund operating budget from business unit 10085101. Recommended Action: Adopt Resolution 2018-41, "A Resolution of the City Council of the City of Huntington Beach Authorizing Execution by the Mayor of a Lease Agreement Between the City and California State Lands Commission for Operation and Maintenance of Huntington Beach Pier and Related Concessions." Alternative Action(s): Do not adopt the resolution or execute the lease. This would allow the State to obtain a new operator or tenant. Do not adopt the resolution and instruct staff to renegotiate specific lease terms. Analysis: In 1984, the City entered into a 35-year lease with the State Lands Commission for the tideland beneath Huntington Beach Pier. Two amendments not affecting the term of the lease were executed in 2003. The current lease expires on January 31, 2019. City of Huntington Beach Page 1 of 2 Printed on 7/11/2018 powere Q5� Legistar— File #: 18-094 MEETING DATE: 7/16/2018 The annual rent payable to the State is $125. At the State's discretion they may adjust this amount on the fifth anniversary of the lease and every five years thereafter through the term. The lease allows the City to sublease and collect rent from the businesses on the Pier. If the amount collected exceeds the City's cost of operation and maintenance, fifty-percent (50%) of the excess revenue is due to the State. An annual report of the rent income and operating expenses is submitted by the City every September. The costs of operation and maintenance over the last three-years has averaged $843,400 per year. The average annual rent collected over the same period is $605,800, an average difference of$237,200. Therefore, no additional rent over and above the $125 is anticipated. Environmental Status: Not applicable Strategic Plan Goal: Enhance and maintain infrastructure Attachment(s): 1. Resolution 2018-41 "A Resolution of the City Council of the City of Huntington Beach Authorizing Execution by the Mayor of a Lease Agreement Between the City and California State Lands Commission for Operation and Maintenance of Huntington Beach Pier and Related Concessions." 2. State Lands Lease No. 6616.1 3. Exhibit A Land Description 4. Exhibit B Site Map 5. Exhibit C-1 sublease Ruby's Diner 6. Exhibit C-2 sublease Let's Go Fishing 7. Exhibit C-3 sublease Surf City 8. Exhibit C-4 sublease Kite Connection 9. Exhibit C-5 sublease Fare Share Enterprises 10. Exhibit C-6 sublease Abercrombie & Fitch 11. Exhibit D Lease Maintenance Reimbursement Agreement City of Huntington Beach Page 2 of 2 Printed on 7/11/2018 powere4$?,Legistaril ATTACHMENT # 1 RESOLUTION NO. 2018-41 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AUTHORIZING EXECUTION BY THE MAYOR AND CITY CLERK OF A LEASE AGREEMENT BETWEEN THE CITY AND CALIFORNIA STATE LANDS COMMISSION FOR OPERATION AND MAINTENANCE OF HUNTINGTON BEACH PIER AND RELATED CONCESSIONS BE IT RESOLVED by the City Council of the City of Huntington Beach that it does hereby approve the Lease with California State Lands Commission for the use of tidelands for the operation and maintenance of the Huntington Beach Municipal Pier, together with its related concessions, a copy of which lease is attached hereto and by this reference made a part hereof as though set out in full herein. BE IT FURTHER. RESOLVED that the Mayor and City Clerk are authorized and directed to execute the lease herein referred to, and forward same to the proper authorities at the State Lands Commission for consideration. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 16th day of JUILX , 2018. Mayor REVIE ND APPROVED: APPROVED FO City a a er ZiAttorney w wATED AND APPROVE Director of Public s 18-6539/181302/MV Res. No. 2018-41 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, ROBIN ESTANISLAU, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a Regular meeting thereof held on July 16, 18, 2018 by the following vote: AYES: O'Connell, Semeta, Posey, Hardy, Delgleize, Brenden, Peterson NOES: None ABSENT: None RECUSE: None City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California ATTAC H M E N T #2 RECORDED AT THE REQUEST OF AND WHEN RECORDED MAIL TO: STATE OF CALIFORNIA California State Lands Commission Attn: Title Unit 100 Howe Avenue, Suite 100-South Sacramento, CA 95825-8202 STATE OF CALIFORNIA OFFICIAL BUSINESS Document entitled to free recordation pursuant to Government Code Section 27383 SPACE ABOVE THIS LINE FOR RECORDER'S USE A.P.N. County: Orange LEASE NO. PRC 6616.1 This Lease consists of this summary and the following attached and incorporated parts: Section 1 Basic Provisions Section 2 Special Provisions Amending or Supplementing Section 1 or 3 Section 3 General Provisions Exhibit A Land Description Exhibit B Site and Location Map Exhibits C1-C6 Sublease Endorsements Exhibit D Lease Maintenance Reimbursement Agreement SECTION 1 BASIC PROVISIONS THE STATE OF CALIFORNIA, hereinafter referred to as Lessor acting by and through the CALIFORNIA STATE LANDS COMMISSION (100 Howe Avenue, Suite 100-South, Sacramento, California 95825-8202), pursuant to Division 6 of the Public Resources Code and Title 2, Division 3 of the California Code of Regulations, and for consideration specified in this Lease, does hereby lease, demise, and let to CITY OF HUNTINGTON BEACH, hereinafter referred to as Lessee, those certain lands described in Exhibit A hereinafter referred to as Lease Premises, subject to the reservations, terms, covenants, and conditions of this Lease. Page 1 of 19 MAILING ADDRESS: 2000 Main Street Huntington Beach, CA 92648 LEASE TYPE: Public Agency Use LAND TYPE: Sovereign LOCATION: Sovereign land in the Pacific Ocean, offshore Huntington Beach, Orange County, as described in Exhibit A attached and by this reference made a part hereof. LAND USE OR PURPOSE: The operation and maintenance of an existing public municipal pier and related concessions. TERM: 25 years;beginning June 21, 2018; ending June 20, 2043, unless sooner terminated as provided under this Lease. CONSIDERATION: $125 per year, with additional consideration being the public's use and benefit. Subject to modification by Lessor as specified in Paragraph 11 (b) and(c) of Section 2—Special Provisions; and Paragraph 3(c) of Section 3 - General Provisions. AUTHORIZED IMPROVEMENTS: X EXISTING: Municipal pier and related concessions LIABILITY INSURANCE: N/A SURETY BOND OR OTHER SECURITY: N/A SECTION 2 SPECIAL PROVISIONS BEFORE THE EXECUTION OF THIS LEASE,ITS PROVISIONS ARE AMENDED, REVISED, OR SUPPLEMENTED AS FOLLOWS: 1. All future structural modifications or material changes to any of the Authorized Improvements, other than future routine repairs and maintenance, will require Commission staff s review and approval prior to commencement of construction. In the event of an urgent repair requiring immediate action, notification shall be made through Lessor's 24-hour emergency response number at(562) 590-5201. 2. Lessee acknowledges and agrees: a. The site may be subject to hazards from natural geophysical phenomena including, but not limited to, waves, storm waves, tsunamis, earthquakes, erosion, flooding, and sea-level rise ("climate change General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 2 of 19 effects"). The risks posed to the site from these discrete processes, and the combined, additive impacts of multiple processes are anticipated to increase in severity over the term of the lease due to the localized effects of climate change. Specifically, climate change effects could expose the public beach and pier infrastructure, to stronger and prolonged flooding events, requiring maintenance and repair beyond what is regularly needed. Adverse impacts from climate change effects on facilities within the lease area, could result in degradation of Public Trust resources and values, including water quality, recreation, and public safety. Future conditions may necessitate additional adaptation measures to increase the resiliency of the lease area to the impacts of sea-level rise and coastal climate change processes. b. To assume the risks to the Lessee and to the property that is the subject of any Coastal Development Permit that is issued to Lessee for development on the Lease Premises, of injury and damage from such hazards in connection with the permitted development and use. c. To unconditionally waive any claim or damage or liability against the State of California, its agencies, officers, agents, and employees for injury or damage from such hazards. 3. Lessee acknowledges that the Lease Premises are subject to the Public Trust and are presently available to members of the public for recreation, waterborne commerce, navigation, fisheries, open space, and any other recognized Public Trust uses. Lessee also agrees that any proposed construction activities and subsequent use of the Lease Premises shall not unreasonably interfere with or limit Public Trust rights and shall do so only to the extent necessary to protect public health and safety during construction activities authorized by Lessor, or when imminent threats to public health and safety are present. 4. Lessee shall provide Lessor with a copy of the updated Local Hazard Mitigation Plan (public draft circulated in March 2017) after its approval by Federal Emergency Management Agency (FEMA) and adoption by the City of Huntington Beach. Lessee shall provide Lessor with copies of any subsequent updates to the Local Hazard Mitigation Plan by January 1 of year following such update. 5. Lessee shall conduct structural and utility safety assessment inspection reports, as specified in this paragraph, during the lease term for the improvements in compliance with the American Society of Civil Engineers (ASCE), Manuals of Practice (MOP) 130—Waterfront Facilities Inspection and Assessment, and the ASCE Standard Practice Manual 101-for Underwater Investigations. Lessee shall provide a copy of the inspection reports, including any necessary remedial action plan, to Lessor's staff for review and comment. The next inspection shall be conducted on or before December 31, 2020, and Lessee shall submit a report to Lessor within 30 days of inspection completion. Subsequent inspections and reports shall be due every five years in accordance with the same schedule and timing. 6. Lessee shall provide Lessor with an annual summary report on or before each Lease anniversary date (June 21), or a date to be mutually agreed to by Lessee and Lessor's staff. The report shall include any local monitoring information required by Lessee or other agencies or entities which relates to sea-level rise vulnerability and adaptation capacity of the Lease Premises and the facilities therein. Information shall include but is not limited to: sea-level rise and flooding vulnerability and risk assessments, updates or amendments to the Local Coastal Program, annual flooding frequency and extent, time and duration of any pier closures resulting from flooding, wave overtopping, or storm related damage, annual site photographs, schedule and nature of repair and maintenance operations, and coastal hazard remediation and removal. Pertinent information may be sourced from the Lessee itself or any other research conducted within the Lease Premises or adjacent land. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 3 of 19 7. Lessee shall execute a reimbursement agreement with Lessor, substantially in the form as shown in Exhibit D (attached and by this reference made a part hereof), to pay for all reasonable costs and expenditures paid or incurred by the Lessor, its staff or both for review and approval of any plan or related materials required herein, including but not limited to any review or preparation of reports, documents or other actions pursuant to the California Environmental Quality Act(CEQA), plan reviews, and/or amendments. Payment by Lessee shall be in a form and manner which is determined by Lessor's staff and is consistent with the requirement of State law. 8. Lessor acknowledges that the Huntington Beach Municipal Pier is registered with U.S. National Registry of Historic Places. Therefore, notwithstanding Section 3, Paragraph 13 of this Lease, Lessee may be relieved of its obligation to remove the pier under expiration or sooner termination of this Lease, subject to the following conditions: a) the pier and all appurtenant structures are free of any liens or encumbrances; b) the pier and all appurtenant structures have undergone an above and below water inspection as specified in Section 2, Paragraph 5 of this lease; and the inspection report deems the pier and appurtenant structures to be in sound structural and safe condition with no significant defects; c) upon staff s review and concurrence of the structural inspection reports findings, the Commission at its sole discretion accepts a good and sufficient quitclaim deed for the pier and appurtenant structures from Lessee. If Lessee is released from the removal obligations pursuant to this paragraph, Lessee's insurance, indemnity, and liability obligations shall survive the expiration or early termination of this Lease, until such time, that a new operator or tenant is found for the Pier. 9. Five years prior to the expiration of this Lease, Lessee shall submit to Lessor a summary report that details resiliency planning efforts and adaptation strategies related to sea-level rise impacts within the Lease Premises. The report shall include a record of flood frequency and extent, and protective measures taken to reduce flood risk to public and visitor serving facilities within the Lease Premises and upland property. Findings from the utility safety assessment inspection report for the Huntington Beach Pier will also be summarized in the report as well as any emergency repairs made to structures located in the Lease Premises. The contents of this report shall contain sufficient detail to enable Lessor and Lessee to assess the effectiveness of these planning efforts in maintaining and enhancing the resiliency of Public Trust resources and values within the Lease Premises subject to the risks associated with sea-level rise and climate change. 10. Lessor acknowledges and agrees: a. By way of the Sublease Endorsement Exhibits Clthrough C6, attached and by this reference made a part hereof, Lessor approves the existing subleases between Lessee and the operators of the existing concessions on the Lease Premises, provided that the sublessees shall name the State of California as an additional insured insofar as their operations within the Lease Premises are concerned for all liability insurance coverage required under their respective sublease agreements. b. Any sublease approved by Lessor Pursuant to Subparagraph 9(a) shall be an exception to Section 3, Subparagraph 5(h) of this Lease, and to the extent commercial use of the Lease Premises is contemplated by such sublease, Lessor agrees that such commercial use shall not constitute a Default of the Lease. 11. Lessee acknowledges and agrees: General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 4 of 19 a. Prior to the execution of any subsequent sublease agreement involving the lease facilities, including but not limited to the renewal or extension of any existing subleases described in Paragraph 9 herein, Lessee shall provide Lessor with copies of the sublease agreement for review and approval. The subleases shall confer no rights to the sublessees that extend beyond the terms of this lease, and in no event shall the expiration term of any sublease extend beyond that of this Lease. b. On September 301h of each year Lessee shall provide Lessor with an annual report showing whether expenses for the operation and maintenance of the Lease Premises exceeded the income generated thereon in the preceding fiscal year. Lessee shall pay rent for any fiscal year in which the amount of income generated exceeds expenses for operation and maintenance of the Lease premises. The monetary rent shall be one half(50%) of the income generated that exceeds the expenses for operation and maintenance within the fiscal year. Lessee shall include the rental payment as prescribed above when submitting an annual report covering a fiscal year in which monetary rent is due. c. Lessee's "income" for purposes of determining rent under this lease shall not include any income tax. "Expenses" shall include direct costs and indirect costs, including administrative expenses and payment of bond and loan obligations. All such indirect costs shall be attributable to the operation and maintenance of the Lease Premises. [Remainder of Page Intentionally Left Blank] General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 5 of 19 SECTION 3 GENERAL PROVISIONS L GENERAL In the case of any conflict between these General Provisions and Special Provisions found in Section 2, the Special Provisions control. 2. DEFINITIONS For the purposes of this Lease, the following terms shall be defined as stated below: "Additions" shall be defined as any use or Improvements other than those expressly authorized in this Lease. "Alterations" shall be defined as any material change in the size, scope, density, type, nature, or intensity of Improvements on the Lease Premises from what is authorized in this Lease. Alterations shall also include any modifications, alterations, or renovations of the land or waterways on the Lease Premises other than those authorized by this Lease. "Breach" shall be defined as a party's unjustified or unexcused nonperformance of a contractual duty the party is required to immediately perform. "Damages" shall include all liabilities, demands, claims, actions or causes of action whether regulatory, legislative or judicial in nature; all assessments, levies, losses, fines, penalties, damages, costs and expenses, including, without limitation: (i) reasonable attorneys', accountants', investigators', and experts' fees and expenses sustained or incurred in connection with the defense or investigation of any such liability, and (ii) costs and expenses incurred to bring the Lease Premises into compliance with Environmental Laws, a court order, or applicable provisions of a Regulatory Agency. The term "Damages" also includes, expressly, those Damages that arise as a result of strict liability, whether arising under Environmental Laws or otherwise. "Default" shall be defined as a material Breach of magnitude sufficient to justify termination of the Lease. "Environmental Law" shall be defined as and include all federal, state, and local environmental, health, and safety laws, statutes, ordinances, regulations, rules, judgments, orders, and notice requirements, which were in effect as of the date of execution of this Lease or are subsequently enacted and lawfully applied hereto, which regulate or relate to (a) the protection or clean-up of the environment; (b) the use, treatment, storage, transportation, handling or disposal of hazardous, toxic or otherwise dangerous substances, wastes or materials; (c) the quality of the air and the discharge of airborne wastes, gases, particles, or other emissions; (d) the preservation or protection of waterways, groundwater, or drinking water; (e) the health and safety of persons or property; or (f) impose liability with respect to any of the foregoing, including without limitation, the California Environmental Quality Act (CEQA) [PRC §§ 21000 et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) [42 USCS §§ 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (RCRA) [42 USCS §§ 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (FWPCA) [33 USCS §§ 1251 et seq.]; the Toxic Substances Control Act (TSCA) [15 USCS §§ 2601 et seq.]; the Hazardous Materials Transportation Act (HMTA) [49 USCS §§ 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USCS §§ 136 et seq.]; the Superfund Amendments and Reauthorization Act [42 USCS §§ 6901 et seq.]; the Clean Air Act [42 USCS §§ 7401 et seq.]; the Safe Drinking Water Act [42 USCS §§ 300f et seq.]; the Solid Waste Disposal Act [42 USCS §§ 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USCS §§ 1201 et seq.]; the Emergency Planning and Community Right to Know Act [42 USCS §§ 11001 et seq.]; the Occupational Safety and Health Act [29 USCS §§ 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C §§ 25280 et seq.]; the California Hazardous Substances Account Act [H & S C §§ 25300 et seq.]; the California Hazardous Waste Control Act [H & S C §§ 25100 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C §§ 24249.5 et seq.]; the Porter-Cologne Water Quality Act [Water C §§ 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above. "Hazardous Material" shall be defined as and include any substance which falls within the definition of hazardous substance, hazardous waste, hazardous material, toxic substance, solid waste, pollutant, or contaminant, under any Environmental Law. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 6 of 19 "Improvements" shall be defined as any modification, alteration, addition, or removal of any material, and any other action which serves to change the condition of the Lease Premises from the natural state whether situated above, on, or under the Lease Premises. Improvements include, but are not limited to buildings, structures, facilities, decks, docks, wharves, piers, walks, curbs, bridges, buoys, landscaping, roadways, shoreline protective structures of all types, foundations, pilings or similar support structures whether above or below the water line, fences, utilities, pipelines, and any other construction of any type situated on the Lease Premises. "Lease" shall be defined as this lease contract together with all amendments and exhibits. "Lease Premises" shall be defined as the area of land, together with any improvements located thereon, the use and occupancy of which is authorized by this Lease. "Lessor" shall be defined as the state of California, acting by and through the California State Lands Commission, including the Commissioners, their alternates and designates, the Executive Officer, and the staff of the California State Lands Commission. "Regulatory Agency" shall include any Federal, State, County, Municipal, or Local agency having jurisdiction over the Lease Premises. "Repairs" shall be defined as all work of any kind made to maintain, change, restore, strengthen, replace, alter, or otherwise affect any Improvement on the Lease Premises. "Residence" shall be defined as any Improvement, whether permanent, movable, or temporary, or a portion thereof, which is for the time being a home or place of lodging. A Residence includes any Improvement affixed to the land such as trailers or cabins, built on a raised foundation such as stilts or pilings, and floating residences such as boats, barges, arks, and houseboats, and any combination of such Improvements which provide residential accommodations to the Lessee or others. "Residence" shall not include transitory, intermittent, recreational use of facilities such as campgrounds. "Residential Use" shall be defined as Improvements such as, but not limited to, sundecks, and sunrooms which are extensions of, or additions to, the upland property and are not water-dependent uses. Although the various uses or Improvements which may fall under this definition may vary by geographic area, lease type, or other factors, it is the intention of the parties to include in this definition all uses and Improvements which are not water-dependent but residential in nature, or those uses and Improvements which are not consistent with common law public trust principles and values. 3. CONSIDERATION (a) Absolute Triple Net Lease This Lease is an absolute triple net lease, pursuant to which Lessor has no, obligation with respect to the payment of taxes, insurance, the cost of maintenance, utilities and repairs or other costs or obligations associated with the Leased Premises, except as expressly stated herein. (b) Rent Lessee agrees to pay Lessor rent as stated in this Lease, in annual installments, for the use and occupancy of the Lease Premises. The first installment shall be due on or before the beginning date of this Lease and all subsequent installments shall be due on or before each anniversary of its beginning date during each year of the Lease term, or as otherwise provided in this Lease. Said sums shall be paid in lawful money of the United States of America. Lessee shall send said rent to the mailing address of Lessor. Timeliness of receipt of remittances sent by mail shall be governed by the postmark date as stated in Government Code Section 11002. Invoices for rent due may be provided by Lessor as a courtesy. Lessor's failure to, or delinquency in, providing invoices shall neither excuse Lessee from paying rent, nor extend the time for paying rent. (c) Modification Lessor may modify the method, amount, or rate of consideration effective on each fifth anniversary of the beginning date of this Lease. Should Lessor fail to exercise such right effective on any fifth anniversary it may do so effective on any one (1) of the next four (4) anniversaries following such fifth anniversary, without prejudice to its right to effect such modification on the next or any succeeding fifth anniversary of the General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 7 of 19 beginning date. No such modification shall become effective unless Lessee is given at least thirty (30) days' notice prior to the date of the Commission meeting wherein the rent modification is considered, or thirty (30) days' notice prior to the effective date of the increase,whichever provides a greater notice period. If the consideration for this Lease is based on a percentage of income, royalties, profits, or any similar business performance indicators, Lessee shall provide Lessor with financial statements and all other documents necessary to determine the relevant basis for income. (d) Penalty and Interest Any installments of rent accruing under this Lease not paid when due shall be subject to a delinquency charge equal to five percent (5%) of the principal sum due. Annual payments shall bear interest as specified in Public Resources Code Section 6224 and the Lessor's then existing administrative regulations governing penalty and interest. (e) Non-Monetary Consideration If the consideration to Lessor for this Lease is the public use, benefit, health, or safety, Lessor shall have the right to review such consideration at any time and set a monetary rental if the Lessor, at its sole discretion, determines that such action is in the best interest of the State. Lessee's assignment or transfer of this Lease pursuant to Section 3 Paragraph 11 below to any third party which results in royalties, profits, or any form of compensation, whether monetary or otherwise, shall give Lessor the right to reevaluate the requirements of this Lease as stated in Section 3 Paragraph 11. Lessee shall be given at least thirty (30) days' notice prior to the date of the Commission meeting wherein the rent modification is considered, or thirty (30) days' notice prior to the effective date that this Lease is converted to a monetary rental,whichever provides more notice. (f) Place for Payment of Rent All rent that becomes due and payable under this Lease shall be paid to Lessor in person or by United States mail at the Sacramento Offices of the California State Lands Commission, currently at 100 Howe Avenue, Suite 100-South, Sacramento, CA 95825-8202, or at any other place or places that Lessor may designate by written notice to Lessee. Alternately, Lessee may contact Lessor's accounting department for Lessor's current practices for payment by credit card or electronic fund transfer. 4. BOUNDARIES This Lease is not intended to establish the State's boundaries and is made without prejudice to either party regarding any boundary or title claims which may be asserted presently or in the future. 5. LAND USE (a) General (1) Lessee shall use the Lease Premises only for the purpose or purposes stated in this Lease and only for the operation and maintenance of the Improvements expressly authorized in this Lease. Lessee shall commence use of the Lease Premises within ninety (90) days of the beginning date of this Lease or within ninety(90) days of the date set for construction to commence as set forth in this Lease, whichever is later. (2) All demolition, construction, remodeling, reconstruction, maintenance, repairs, removal, or remediation performed on the Lease Premises at any time by Lessee shall first be authorized by all appropriate Regulatory Agencies. Lessee is solely responsible for determining what approvals, authorizations, or certifications are required, and shall be solely responsible for all costs incurred thereby. In addition, Lessee shall obtain and comply with preventative or remedial measures required by any environmental reports, assessments, or inspections, including, but not limited to those required by the California Environmental Quality Act and/or the National Environmental Policy Act, or as otherwise required by law or reasonably requested by Lessor. Nothing in this Lease shall be interpreted as a pre- approval of any permit, certification, or any other precondition required for the use of the Lease Premises. (b) Continuous Use Lessee's use of the Lease Premises shall be continuous from commencement of the Lease until its expiration. Lessee's discontinuance of such use for a period of ninety (90) days shall be presumed to be an abandonment unless Lessee demonstrates to Lessor's satisfaction that Lessee's use of the Lease Premises is consistent with similarly situated properties. In the event of an abandonment, Lessor may elect to terminate the Lease as General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 8 of 19 provided in Paragraph 12(a)(3). Abandonment of the Lease Premises shall not relieve Lessee of any obligations under this Lease. (c) Repairs and Maintenance (1) Lessor shall not be required to make any Repairs in, on, or about all or part of the Lease Premises. Lessee shall, at all times during the term of this Lease and without any cost or expense to Lessor, keep and maintain the Lease Premises, including all Improvements, in good order and repair and in a clean, safe, sanitary, and orderly condition. (2) Lessee shall make, or cause to be made, any Repairs which may be required by any Regulatory Agency. Lessee shall observe and comply with, any law, statute, ordinance, plan, regulation, resolution, or policy applicable to the Lease Premises in making such Repairs. All work shall be performed with reasonable diligence, completed within a reasonable time, and performed at the sole cost and expense of Lessee. (3) Lessee expressly accepts the Lease Premises "as is" and expressly acknowledges that: (i) Lessor has made no representations or warranties as to the suitability of the Lease Premises for any Improvements. Lessee shall conduct all tests necessary to determine the suitability of the Lease Premises for any proposed use or Improvements authorized; and (ii) Lessor has made no representations or warranties as to the quality or value of any Improvements found on the Lease Premises, or of their conformity to any applicable building codes, zoning ordinances, or other regulations. Lessee agrees to inspect any preexisting Improvements at its own cost to determine whether such Improvements are safe and suitable for the Lessee's intended use; and (iii) Lessee shall neither be entitled to any reduction in rent, nor any extension of the terms of this Lease because of damage to or destruction of any Improvements on the Lease Premises. (iv) Lessee and Lessor agree that any Improvements on the Lease Premises constitute the personal property of Lessee and that fixture law does not apply. (4) In the event that the Lease Premises is partly, or in whole, comprised of tidal, submerged, or waterfront property, Lessee expressly accepts the hazards involved in using or improving such lands. Lessor is not responsible for, and Lessee shall not be reimbursed for nor receive any offset of rent for, any damages or reduced use of the Lease Premises caused by: local or invasive flora or fauna, flooding, erosion, sea level rise, storms, freezing, inclement weather of any kind, acts of god, maintenance or failure of protective structures, and any other such hazards. (d) Additions, Alterations, and Removal No Improvements other than those expressly authorized in this Lease shall be constructed by the Lessee on the Lease Premises without the prior written consent of Lessor. Any Additions or Alterations are expressly prohibited. Lessee is also prohibited from any Additions or Alterations which cause a material change to the environmental impact on or around the Lease Premises. (e) Enjoyment This Lease is non-exclusive, and is subject to the provisions of Section 3, Paragraph 6 below. Lessee shall have the right to exclude persons from the Lease Premises only when their presence or activity constitutes a material interference with Lessee's use and enjoyment of the Lease Premises. (f) Discrimination Lessee, in its use of the Lease Premises, shall not discriminate against any person or class of persons on any basis protected by federal, state, or local law, including: race, color, creed, religion, national origin, sex, sexual orientation, gender identity, age, marital/parental status, veteran status, or disability. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 9 of 19 (g) Residential Use Unless otherwise provided for in this Lease, no portion of the Lease Premises shall be used as a location for a Residence, for the purpose of mooring or maintaining a structure which is used as a Residence, or for Residential Uses. (h) Commercial Use Unless otherwise provided for in this Lease, the Lease Premises is to be used by Lessee and Lessee's invitees or guests only. Use of the Lease Premises for commercial purposes; conducting a business, whether for profit or otherwise; and any subleasing, rental, or any transaction whereby Lessee directly or indirectly receives compensation from a third party in exchange for use of the Lease Premises shall constitute an immediate Default of this lease with no cure period. 6. RESERVATIONS,ENCUMBRANCES,AND RIGHTS-OF-WAY (a) Reservations (1)Lessor expressly reserves all natural resources in or on the Lease Premises, including but not limited to timber, minerals, and geothermal resources as defined under Public Resources Code sections 6401, 6407, and 6903, respectively; the right to grant and transfer the same; as well as the right to grant leases in and over the Lease Premises which may be necessary or convenient for the extraction of such natural resources. Such leasing shall be neither inconsistent nor incompatible with the rights or privileges of Lessee under this Lease. (2)Lessor expressly reserves a right to go on the Lease Premises and all Improvements for any purposes associated with this Lease or for carrying out any function required by law, or the rules, regulations, or management policies of the State Lands Commission. Lessor shall have a right of reasonable access to the Lease Premises across Lessee owned or occupied lands adjacent to the Lease Premises for any purpose associated with this Lease. (3)Lessor expressly reserves to the public an easement for convenient access across the Lease Premises to other State-owned lands located near or adjacent to the Lease Premises and a right of reasonable passage across and along any right-of-way granted by this Lease; however, such easement or right-of- way shall be neither inconsistent nor incompatible with the rights or privileges of Lessee under this Lease. (4)Lessor expressly reserves the right to lease, convey, or encumber the Lease Premises, in whole or in part, during the Lease term for any purpose not inconsistent or incompatible with the rights or privileges of Lessee under this Lease. (b) Encumbrances The Lease Premises may be subject to pre-existing contracts, leases, licenses, easements, encumbrances, and claims and is made without warranty by Lessor of title, condition, or fitness of the land for the stated or intended purpose. 7. RULES, REGULATIONS, AND TAXES (a)Lessee shall comply with and be bound by all presently existing or subsequently enacted rules, regulations, statutes or ordinances of the State Lands Commission or any Regulatory Agency. Occupancy or use of the Lease Premises provides no exemption from applicable regulations including, but not limited to, federal, state, county and local regulations, regulations promoting public health, safety, or welfare, building codes, zoning ordinances, and sanitation regulations. Lessee expressly acknowledges that Regulatory Agencies have jurisdiction over the Lease Premises unless such laws are in direct conflict with state law or public trust principles. (b)Lessee understands and agrees that a necessary condition for the granting and continued existence of this Lease is that Lessee obtains and maintains all permits or other entitlements. Lessee expressly acknowledges that issuance of this Lease does not substitute for, or provide preference in obtaining authorizations from other Regulatory Agencies. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 10 of 19 (c) Taxes (1) In addition to the rent due under this Lease, Lessee accepts responsibility for and shall pay any and all real and personal property taxes, including possessory interest taxes, assessments, special assessments, user fees, service charges, and other charges of any description levied, imposed on, assessed, or associated with the leasehold interest, Improvements on the Lease Premises, any business or activity occurring on the Lease Premises, the Lease Premises itself, or any portion thereof, levied by any governmental agency or entity. Such payment shall not reduce rent due Lessor under this Lease and Lessor shall have no liability for such payment. (2) In the event that this Lease commences, terminates or expires during a tax year, Lessee shall pay the taxes for the period of such year during which this Lease was in effect. (3) Any and all taxes and assessments and installments of taxes and assessments required to be paid by Lessee under this Lease shall be paid when due and the official and original receipt for the payment of such tax, assessment, or installment shall be delivered to Lessor upon request. (4) Lessee shall indemnify and hold Lessor, the Lease Premises, and any Improvements now or hereafter located thereon, free and harmless from any liability, loss, or Damages resulting from any taxes, assessments, or other charges required by this Lease to be paid by Lessee and from all interest, penalties, and other sums imposed thereon and from any sales or other proceedings to enforce collection of any such taxes, assessments, or other charges. 8. INDEMNITY (a) Lessee's use of the Lease Premises and any Improvements thereon is at Lessee's sole and exclusive risk. (b) In addition to any other obligation to indemnify Lessor as otherwise provided in this Lease, except to the extent caused by the sole negligence and/or willful misconduct of the Lessor, Lessee shall indemnify, hold harmless, and, at the option of Lessor, defend Lessor, its officers, agents, and employees from any and all Damages resulting from Lessee's occupation and use of the Lease Premises. Lessee shall reimburse Lessor in full for all reasonable costs and attorneys' fees, specifically including, without limitation, any Damages arising by reason of: (1) The issuance, enjoyment, interpretation, Breach, or Default of this Lease; (2) The challenge to or defense of any environmental review upon which the issuance of this Lease is based; (3) The death or injury of any person, or damage to or destruction of any property from any cause whatever in any way connected with the Lease Premises, or with any of the Improvements or personal property on the Lease Premises; (4) The condition of the Lease Premises, or Improvements on the Lease Premises; (5) An act or omission on the Lease Premises by Lessee or any person in, on, or about the Lease Premises; (6) Any work performed on the Lease Premises or material furnished to the Lease Premises; (7) Lessee's failure to comply with any material legal or other requirement validly imposed on Lessee or the Lease Premises by a Regulatory Agency. (c) The reimbursement provisions of this Paragraph 8 shall not apply to any claims, litigation, or other actions which may be brought by either Lessee or Lessor against each other. (d) Nothing in this paragraph shall be construed as requiring that Lessor defend itself against all or any aspect of any challenge to this Lease or any associated environmental review. However, Lessee may take whatever legal action is available to it to defend this Lease or any associated environmental review against any challenge by a third party, whether or not Lessor chooses to raise a defense against such a challenge. (e) Lessee shall notify Lessor immediately in case of any accident, injury, or casualty on the Lease Premises. 9. INSURANCE (a) Lessee shall obtain and maintain in full force and effect during the term of this Lease comprehensive general liability insurance and property damage insurance, with such coverage and limits as may be reasonably requested by Lessor from time to time, but in no event for less than the sum(s) specified against any and all claims or liability arising out of the ownership, use, occupancy, condition, or maintenance of the Lease Premises and all Improvements. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 11 of 19 (b) The insurance policy shall identify the Lease by its assigned number. The specific Improvements shall also be generally identified, as well as their location on state owned property. The coverage provided shall be primary and non-contributing. Lessee shall keep such policy current. Lessor shall be named as a "certificate holder" and/or an "additional interest" on the policy. Lessee shall provide Lessor with a current certificate of insurance at all times. At Lessor's request, Lessee shall provide a full copy of the current insurance policy, along with any and all endorsements or other such documents affecting the coverage. Lessor will not be responsible for any premiums or other assessments on the policy. (c) The insurance coverage specified in this Lease shall be in effect at all times during the Lease term and subsequently until Lessor has either accepted all of the Lease Premises as improved or restored by Lessee as provided elsewhere in this Lease. Lessee shall notify Lessor within five (5) business days if the insurance is canceled for any reason. 10. SURETY BOND (a)When required by Section 1 of this Lease, Lessee shall provide a surety bond or other security device acceptable to Lessor, for the specified amount, and naming the State of California, California State Lands Commission as the assured, to guarantee to Lessor the faithful observance and performance by Lessee of all of the terms, covenants, and conditions of this Lease. (b)Lessor may require an increase in the amount of the surety bond or other security device to cover any additionally authorized Improvements, any modification of consideration, or to provide for inflation or other increased need for security. The surety bond or other security device may be increased on each fifth anniversary of the beginning date of this Lease. Should Lessor fail to exercise such right effective on any fifth anniversary, it may do so effective on any one (1) of the next four (4) anniversaries following such fifth anniversary without prejudice to its right to effect such modification on the next or any succeeding fifth anniversary. No such modification shall become effective unless Lessee is given at least thirty (30) days' notice prior to the date of the Commission meeting wherein the modification of the bond or security is considered, or thirty (30) days' notice prior to the effective date of the increase, whichever provides more notice. (c)The surety bond or other security device shall be maintained in full force and effect at all times during the .Lease term and subsequently until Lessor has either accepted all of the Lease Premises as improved or restored by Lessee as provided elsewhere in this Lease. Lessee must first seek approval of Lessor before changing the type of security device used, or the bond holder. 11. ASSIGNMENT,ENCUMBRANCING OR SUBLETTING (a) Lessee shall not either voluntarily or by operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber this Lease and shall not sublet the Lease Premises, in whole or in part, or allow any person other than the Lessee's employees, agents, servants and invitees to occupy or use all or any portion of the Lease Premises without the prior written consent of Lessor, which consent shall not be unreasonably withheld. (1) Notwithstanding the foregoing prohibition against transfer and assignment, the Lease may be transferred by Lessee if the transfer is caused by the death of a spouse and the full interest of the deceased spouse is transferred to a surviving spouse; or the transfer is caused by the dissolution of the marriage of Lessee and the full interest of one of the spouses is transferred to the other spouse. In the event of such a transfer, Lessor shall be notified in writing within 30 days of the transfer. (2) Notice to Lessor of Successor Trustee(s): In the event this Lease is held in trust, and the Lessee is a trustee thereof, the substitution or succession of a new trustee shall not be an assignment or transfer for the purposes of this Paragraph. Lessee (and by operation of law, any successor trustee) agrees to provide prompt notice to Lessor of any succession or substitution of trustee in accordance with Paragraph 16(c) of General Provisions, no later than sixty (60) days after the named trustee as appears on the face of this Lease becomes unable or ceases to serve as trustee for any reason. (b) The following shall be deemed to be an assignment or transfer within the meaning of this Lease: (1)If Lessee is a business entity, any dissolution, merger, consolidation or other reorganization of Lessee, or the sale or other transfer of substantially all the assets of Lessee. If Lessee is a publicly traded entity, General Lease—Public Agency Use Form51.16 (Rev. 10/14) Page 12 of 19 transfers of interests in Lessee shall not constitute an assignment requiring the consent of Lessor. (2)If Lessee is a partnership, a transfer of any interest of a general partner, a withdrawal of any general partner from the partnership, or the dissolution of the partnership. (c) If this Lease is for sovereign lands appurtenant to adjoining littoral or riparian land, Lessee shall not transfer or assign its ownership interest or use rights in such adjoining lands separately from the leasehold rights granted herein without the prior written consent of Lessor. (d) If Lessee desires to assign, sublet, encumber or otherwise transfer all or any portion of the Lease Premises, Lessee shall do all of the following: (1) Give not less than 90 days' prior written notice to Lessor; (2) Provide the name, complete business organization, operational structure, and formation documents of the proposed assignee, sublessee, secured third party, or other transferee; and the nature of the use of and interest in the Lease Premises proposed by the assignee, sublessee, secured third party or other transferee. . (3) Provide the terms and conditions of the proposed assignment, sublease, or encumbrance or other transfer; (4)Provide audited financial statements for the two most recently completed fiscal years of the proposed assignee, sublessee, secured party or other transferee; and provide pro forma financial statements showing the projected income, expense and financial condition resulting from use of the Lease Premises; and (5) Provide such additional or supplemental information as Lessor may reasonably request concerning the proposed assignee, sublessee, secured party or other transferee. (6) Lessor will evaluate proposed assignees, sublessees, secured third parties and other transferees and grant approval or disapproval according to standards of commercial reasonableness considering the following factors within the context of the proposed use: the proposed party's financial strength and reliability, their business experience and expertise, their personal and business reputation, their managerial and operational skills, their proposed use and projected rental, as well as other relevant factors. (e) Lessor shall have a reasonable period of time from the receipt of all documents and other information required under this provision to grant or deny its approval of the proposed party. Lessor may reevaluate the rent, insurance and/or bond provisions of this Lease, and may condition its approval of the proposed assignment, sublease, hypothecation, mortgage, or other transfer on the party's acceptance of the new terms. Lessee's rights stated in this paragraph shall apply regardless of whether the proposed transfer coincides with a regular rent review period as stated in Section 3 Paragraph 3(c) above. (f) Lessee's mortgage or hypothecation of this Lease, if approved by Lessor, shall be subject to terms and conditions imposed by a separately negotiated encumbrancing agreement. (g) Upon the express written assumption of all obligations and duties under this Lease by an assignee approved by Lessor, the Lessee may be released from all liability under this Lease arising after the effective date of assignment and not associated with Lessee's use, possession or occupation of or activities on the Lease Premises; except as to any hazardous wastes, substances or materials as defined under federal, state or local law, regulation, or ordinance manufactured, generated, used, placed, disposed, stored or transported on the Lease Premises during Lessee's tenancy. (h) If the Lessee files a petition or an order for relief is entered against Lessee, under Chapters 7, 9, 11 or 13 of the Bankruptcy Code (11 USC Sect. 101, et seq.) then the trustee or debtor-in-possession must elect to assume or reject this Lease within sixty (60) days after filing of the petition or appointment of the trustee, or the Lease shall be deemed to have been rejected, and Lessor shall be entitled to immediate possession of the Lease Premises. No assumption or assignment of this Lease shall be effective unless it is in writing and General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 13 of 19 unless the trustee or debtor-in-possession has cured all Defaults under this Lease (monetary and non- monetary) or has provided Lessor with adequate assurances (1) that within ten (10) days from the date of such assumption or assignment, all monetary Defaults under this Lease will be cured; and (2) that within thirty (30) days from the date of such assumption, all non-monetary Defaults under this Lease will be cured; and (3) that all provisions of this Lease will be satisfactorily performed in the future. (i) In the event of any transfer or assignment, under this Paragraph 11 or by any other means authorized by this Lease, the Lease terms. shall be for the remaining years existing on the Lease prior to the transfer or assignment. A transfer or assignment shall not extend the term of this Lease. 12. DEFAULT AND REMEDIES (a) Default The occurrence of any one or more of the following events shall immediately and without further notice constitute a Default of this Lease: (1)Lessee's failure to make any payment of rent, royalty, or other consideration as required under this Lease; or (2)Lessee's failure to obtain or maintain liability insurance or a surety bond or other security device as required under this Lease; or (3)Lessee's abandonment of the Lease Premises (including the covenant for continuous use as provided for in Paragraph 5(b)) during the Lease term; or (4) Lessee's failure to obtain and maintain all necessary governmental permits or other entitlements; or (5)The maintenance of the Lease Premises in violation of, or failure to comply with, any applicable provisions of any Regulatory Agency, Environmental Law, or maintenance of the Lease Premises in a condition constituting nuisance; or (6)Lessee's Failure to commence to construct and to complete construction of the Improvements authorized by this Lease within the time limits specified in this Lease. (7)Lessee is found to sublet or otherwise surrender daily management and control of the Lease Premises to a third party without the knowledge, expressed written consent or authorization of the Lessor. (b) Lessee's failure to observe or perform any other term, covenant, or condition of this Lease when such failure shall continue for a period of thirty (30) days after Lessor's giving written notice shall constitute a Default of this lease. However, if the nature of Lessee's Default under this paragraph 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 commences such cure within such thirty (30) day period and diligently proceeds with such cure to completion. (c) Should Lessee Breach any term, covenant, or condition of this Lease under Paragraph 12(b) above three (3) times in any three hundred and sixty-five (365) day period, the third Breach will be a Default under this Lease and Lessor will be entitled to immediately terminate this Lease, and take other appropriate action. Lessor will provide written notice of each Breach as provided above, and provide written notice that future Breaches will constitute immediate Default with no cure period. (d) Remedies In the event of a Default by Lessee and Lessee's failure to cure such Default if such a cure period is applicable, Lessor may at any time and with or without notice do any one or more of the following in addition to any rights or remedies permitted by law: (1)Re-enter the Lease Premises, remove all persons and property, and repossess and enjoy such premises; or General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 14 of 19 (2) Terminate this Lease and Lessee's right of possession of the Lease Premises by any lawful means. The termination shall not relieve Lessee of any obligation, monetary or otherwise, which has accrued prior to the date of termination. Such termination shall be effective upon Lessor's giving written notice and upon Lessee's receipt of such notice. Lessee shall immediately surrender possession of the Lease Premises to Lessor. Lessor shall be entitled to recover from Lessee all amounts to which Lessor is entitled pursuant to Section 1951.2 of the California Civil Code, or any other provision of law, including any necessary Repair, renovation, alteration, remediation, or removal of Improvements; or (3)Maintain this Lease in full force and effect and recover any rent, royalty, or other consideration as it becomes due without terminating Lessee's right of possession regardless of whether Lessee shall have abandoned the Lease Premises, subject to the conditions imposed by Cal. Civil Code § 1951.2; or (4)Exercise any other right or remedy which Lessor may have at law or equity. (e) Determination of Rental Value If rent under this Lease is calculated as a percentage of Lessee's income attributable to the Lease Premises and Lessee abandons the Lease Premises during some or all of the applicable period, then the reasonable rental value shall be the percentage of proceeds Lessor would have received had Lessee operated the Lease Premises in the usual and customary manner. (f) Waiver of Rights The failure or delay of either party to exercise any right or remedy shall not be construed as a waiver of such right or remedy or any Breach by the other party. Lessor's acceptance of any rent shall not be considered a waiver of any preexisting Breach by Lessee other than the failure to pay the particular rent accepted regardless of Lessor's knowledge of the preexisting Breach at the time rent is accepted. 13. RESTORATION OF LEASE PREMISES AND ENVIRONMENTAL MATTERS (a) Restoration of Lease Premises (1) Upon expiration or sooner termination of this Lease, Lessee must immediately surrender possession of the Lease Premises to Lessor. Prior to the time of surrender, Lessee must remove all or any Improvements together with the debris and all parts of any such Improvements at its sole expense and risk, regardless of whether Lessee actually constructed or placed the Improvements on the Lease Premises; or Lessor, at its sole and absolute discretion, may itself remove or have removed all or any portion of such Improvements at Lessee's sole expense. Lessor may waive all or any part of this obligation in its sole discretion if doing so is in the best interests of the State. (2) As a separate and related obligation, Lessee shall restore the Lease Premises as nearly as possible to the conditions existing prior to the installation or construction of any Improvements. For purposes of this Lease, restoration includes removal of any landscaping; removal of any Hazardous Materials; and to the extent possible, undoing any grading, fill, excavation, or similar alterations of the natural features of the Lease Premises. Lessor may waive all or any part of this obligation in its sole and absolute discretion. (3)Unless otherwise provided for in this Lease, Lessee shall submit to Lessor no later than one (1) year prior to the expiration of this Lease either: (a) an application and minimum expense deposit for a new lease for the continued use of the Lease Premises, or (b) a plan for the restoration of the Lease Premises to be completed prior to the expiration of the lease term together with a timeline for obtaining all necessary permits and conducting the work prior to the expiration of this Lease. (4)In removing any or all Improvements, or conducting any restoration work, Lessee shall be required to obtain any permits or other governmental approvals as may then be required by any Regulatory Agency, including, without limitation, any Environmental Law. (5)Lessor may, upon written notice, in its sole and absolute discretion, accept title to any or all Improvements at the termination of this Lease. Lessor shall notify Lessee that Lessor intends to take title to any or all Improvements within six (6) months of Lessee submitting a plan for restoration under General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 15 of 19 Paragraph 13(a)(3)(b) above. If Lessor elects to take title to any such Improvements, Lessee shall deliver to Lessor such documentation as may be necessary to convey title to such Improvements to Lessor free and clear of any liens, mortgages, loans, or any other encumbrances. Lessor shall not pay, and Lessee shall not be entitled to compensation for Lessor's taking title to such property. (b) Environmental Matters (1) Lessee's Obligations: (i) Lessee will not use, occupy, or permit any portion of the Lease Premises to be used or occupied in violation of any Environmental Law. Lessee shall not manufacture or generate or store Hazardous Material on the Lease Premises unless specifically authorized under other terms of this Lease. (ii) Lessee shall practice conservation of water, energy, and other natural resources. (iii) Lessee shall notify Lessor and the appropriate governmental emergency response agency, or agencies immediately in the event of any release or threatened release of any Hazardous Material. (2) Lessor may at any time during the Lease term require Lessee to conduct at its own expense and by a contractor approved by Lessor an independent environmental site assessment or inspection for the presence or suspected presence of Hazardous Material generated, used, placed, disposed, stored, or transported on the Lease Premises during the term of the Lease. Lessee shall provide the results of the assessment or inspection to Lessor and the appropriate governmental response agency or agencies and shall further be responsible for removing or taking other appropriate remedial action regarding such Hazardous Material in accordance with applicable Environmental Law. (3) Environmental Indemnity Lessee shall indemnify, defend, and hold Lessor and Lessor's, officer, appointees, volunteers, employees, agents, successors and assigns free and harmless from and against all Damages that may at any time be imposed upon, incurred by, or asserted or awarded against Lessor in connection with or arising from any Breach of Lessee's obligations hereunder; or out of any violation by Lessee of any Environmental Law; or resulting in the imposition of any lien or claim for the recovery of any costs for environmental cleanup or other response costs relating to the release or threatened release of Hazardous Materials on the Lease Premises during the Lessee's tenancy. This obligation shall include any prior leases between Lessor and Lessee and will continue through any periods Lessee is in holdover, unlawful detainer, or any subsequent month-to-month tenancies created by operation of law. Lessee's obligations hereunder will survive the expiration or sooner termination of this Lease. (4) Violation of this section shall constitute grounds for termination of the Lease. Lessor, shall notify Lessee when, in Lessor's opinion, Lessee has violated the provisions of this section. Lessee shall immediately discontinue the conduct and respond within five (5) business days. Lessee shall take all measures necessary to remedy the condition. 14. QUITCLAIM Lessee shall, upon the early termination of this Lease and at Lessor's request, execute and deliver to Lessor in a form provided by Lessor a good and sufficient release of all rights under this Lease. Should Lessee fail or refuse to deliver such a release, Lessor may record a written notice reciting such failure or refusal. This written notice shall, from the date of its recordation, be conclusive evidence against Lessee of the termination of this Lease and all other claimants. 15. HOLDING-OVER (a) This Lease shall terminate without further notice upon the expiration of the term of this Lease. Lessee shall have removed any Improvements and completed any restoration as required by Lessor prior to the expiration of this Lease, and shall surrender possession of the Lease Premises. Any failure by the Lessee to remove Improvements, restore the Lease Premises, and/or surrender possession of the Lease Premises at the expiration or sooner termination of this Lease shall not constitute a renewal or extension and shall not give Lessee any rights in or to the Lease Premises or any part thereof except as expressly provided in this Lease. Lessee shall be deemed in unlawful detainer of the Lease Premises and Lessor shall be entitled to all resulting legal remedies. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 16 of 19 (b) Lessor may, in its sole discretion, choose to accept Rent for the Lease Premises instead of immediately taking legal action to recover possession of the Lease Premises. Any tenancy created by operation of law on Lessor's acceptance of rent shall be deemed a month-to-month tenancy regardless of what sum or sums Lessee delivers to Lessor. Except as set forth below, any subsequent tenancy created in this manner shall be on the same terms, covenants, and conditions set forth in this Lease insofar as such terms, covenants, and conditions can be applicable to a month-to-month tenancy (c) In recognition of the increased accounting, land management, and supervisory staff time required for month-to-month tenancies, the rent for each month or any portion thereof during such holdover period may be an amount equal to one hundred fifty percent (150%) of one-twelfth (1/12) of the total compensation for the most recent year paid. In the event this Lease does not require monetary compensation, Lessor shall have the right to establish rent based on the fair market value of the Lease Premises. The month-to-month tenancy may be terminated by Lessee or Lessor upon thirty (30) calendar days' prior written notice to the other. 16. ADDITIONAL PROVISIONS (a) Waiver (1)No term, covenant, or condition of this Lease and no omission, neglect, Default or Breach of any such term, covenant or condition shall be deemed to have been waived by Lessor's acceptance of a late or nonconforming performance or otherwise, unless such a waiver is expressly acknowledged by Lessor in writing. No delay or omission of Lessor to exercise any right or power arising from any omission, neglect, Default or Breach of term, covenant, or condition of this Lease shall be construed as a waiver or any acquiescence therein. (2)Any such waiver shall not be deemed to be a waiver of any other term, covenant or condition; of any successive Breaches of the same term, covenant, or condition; or of any other Default or Breach of any term, covenant or condition of this Lease. (b) Time Time is of the essence for this Lease and each and all of its terms, covenants or conditions in which performance is a factor. (c) Notice All notices required to be given under this Lease shall be given in writing, sent by U.S. Mail with postage prepaid, to Lessor at the offices of the State Lands Commission and the Lessee at the address specified in this Lease. Lessee shall give Lessor notice of any change in its name or address. (d) Consent Where Lessor's consent is required under this Lease its consent for one transaction or event shall not be deemed to be a consent to any subsequent occurrence of the same or any other transaction or event. (e) Changes This Lease may be terminated and its term, covenants, and conditions amended, revised, or supplemented . only by mutual written agreement of the parties. (f) Successors The terms, covenants, and conditions of this Lease shall extend to and be binding upon and inure to the benefit of the heirs, successors, and assigns of the respective parties. (g) Joint and Several Obligation If more than one Lessee is a party to this Lease, the obligations of the Lessees shall be joint and several. (h) Captions The section and paragraph captions used in this Lease are for the convenience of the parties. The captions are not controlling and shall have no effect upon the construction or interpretation of this Lease. General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 17 of 19 (i) Severability If any term, covenant or condition of this Lease is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Lease shall not be affected thereby, and each term and provision of this Lease shall remain valid and enforceable to the fullest extent permitted by law. 0) Representations Lessee agrees that no representations have been made by Lessor or by any person or agent acting for Lessor. Lessor and Lessee agree and acknowledge that this document contains the entire agreement of the parties, that there are no verbal agreements, representations, warranties or other understandings affecting this Lease, and Lessor and Lessee, as a material part of the consideration of this Lease, waive all claims against the other for rescission, damages, or otherwise by reason of any alleged covenant, agreement or understanding not contained in this Lease. (k) Gender and Plurality In this Lease, the masculine gender includes both the feminine and neuter, and the singular number includes the plural whenever the context so requires. (1) Survival of Certain Covenants . All covenants pertaining to bond, insurance, indemnification, restoration obligations, Breach, Default, and remedies shall survive the expiration or earlier termination of this Lease until Lessee has fulfilled all obligations to restore the Lease Premises as required by this Lease. (m) Counterparts This agreement may be executed in any number of counterparts and by different parties in separate counterparts. Each counterpart when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement. (n) Delegation of Authority Lessor and Lessee acknowledge Lessor as defined herein includes the Commission Members, their alternates or designees, and the staff of the Commission. The ability of staff of the Commission to give consent, or take other discretionary actions described herein will be as described in the then-current delegation of authority to Commission staff. All other powers are reserved to the Commission. [Remainder of Page Intentionally Left Blank] General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 18 of 19 STATE OF CALIFORNIA - STATE LANDS COMMISSION LEASE NO. PRC 6616.1 This Lease shall become effective only when approved by and executed on behalf of the State Lands Commission of the State of California and a duly executed copy has been delivered to Lessee. The submission of this Lease by Lessor, its agent, or representative for examination by Lessee does not constitute an option or offer to lease the Lease Premises upon the terms and conditions contained herein, or a reservation of the Lease Premises in favor of Lessee. Lessee's submission of an executed copy of this Lease to Lessor shall constitute an offer to Lessor to lease the Lease Premises on the terms and conditions set forth herein. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date hereafter affixed. LESSEE: LESSOR: CITY U T ON BEACH STATE OF CALIFORNIA STATE LANDS COMMISSION By -- — ---- — -- B y ------ ---- -- — Michael Posey, Robert Brian Bugsch Title: Mayor— Title: Chief Land Management Division Date: , t/y Date: ATTACH ACKNOWLEDGMENT Execution of this document was authorized by the California State Lands Commission on (Month Day Year) A4OVEDS O FORM By: Sl7iE, G ES CITY ATTORNEY CITY OF HUNTINGTON BEACH General Lease—Public Agency Use Form51.16(Rev. 10/14) Page 19 of 19 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On 7/17/2018 before me, P. L. Esparza, Notary Public, personally appeared Mike Posey who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. �. P.L.ESPARZA Notary Public-California WITNESS my hand and official seal. Orange County Commission#2204197 My Comm.Expires Aug 4,2021 (Seal) (Notary S gna re) ATTACHMENT #3 EXHIBIT A PRC 6616.1 LAND DESCRIPTION A strip of tide and submerged land 160 feet wide being 80 feet on each side of the following described centerline situate within the City of Huntington Beach, Orange County, State of California, the centerline of said strip being described as follows: BEGINNING at the intersection of northeasterly line of Ocean Avenue with the centerline of Main Street, thence S 41' 41' 37"W 2065.92 feet to the end of said centerline of said strip of tide and submerged land. EXCEPTING THEREFROM all that portion lying landward of the ordinary high water mark of the Pacific Ocean. Accompanying plat is hereby made part of this description. END OF DESCRIPTION Prepared 06/14/2018 by the California State Lands Commission Boundary Unit. O�P`L LqN� ,A o .t x o CIA ;v 8 'Y S� Op CAI,, "Page 1 of 2 513 NO SCALE \ P �� ♦♦ APN: 024-150-06� pC Q ti i 80' F i 9ss EXISTING MUNICIPAL PIER LEASE AREA PACIFIC OCEAN EXHIBIT A Page 2 of 2 RPF 06/14/2018 LAND DESCRIPTION PLAT s PRC 6616.1, CITY OF CALIFORNIA STATE HUNTINGTON BEACH LANDS COMMISSION ORANGE COUNTY 514 ATTACHMENT #4 NO SCALE SITE 5D � P APN: 024-150-06 p i i i 80, c ,9Ss EXISTING MUNICIPAL PIER LEASE AREA PACIFIC OCEAN MUNICIPAL PIER, HUNTINGTON BEACH NO SCALE LOCATION Exhibit B �i + ��{ y rn f PRE 6616.1 �{ r J `' Y x` L r'- CITY OF HUNTINTON BEACH APN 024-150-06 GENERAL LEASE- PUBLIC AGENCY USE ORANGE COUNTY 1 ' ,. SITE SITE t MAP SOURCE: USGS QUAD This Exhibit is solely for purposes of generally defining the lease premises, is based on unverified information provided by the Lessee or other parties and is not intended to be, nor shall it be construed as, a waiver or limitation of any State interest in the subject or any other property. RPF 06/14/2018 ATTACHMENT #5 EXHIBIT C-1 PRC 6616.1 SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute item No.TBD dated, June 21, 2018, the herein sublease between the City of Huntington Beach and Ruby's Diner Inc., under a portion of State Lease PRC No. 6616.1, is hereby approved. BY: ROBERT BRIAN BUGSCH, Chief Land Management Division 516 Dept.ID ED 16-23 Page 1 of 2 Meeting Date:9119/2016 CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 9/19/2016 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A.Wilson, City Manager PREPARED BY: Kenneth A. Domer, Assistant City Manager Kellee Fritzal, Deputy Director, Business Development SUBJECT: Approve a New Lease Agreement between the City of Huntington Beach and Ruby's Huntington Beach LTD for Operation of the Ruby's Huntington Beach Pier Restaurant Statement of Issue: The City Council is asked to approve a new lease between the City and Ruby's Huntington Beach LTD for the operation of the Ruby's Huntington Beach Pier Restaurant. The lease is proposed for a period of fifteen (15) years from 2016 to 2032. Ruby's will be investing over $160,000 in tenant improvements to the building and the new lease will include a 0.50% percentage share of rent increase effective beginning June, 2022. Financial Impact: Currently, the City receives a minimum monthly rent and a percentage rent based on sales volume through its current lease which is subject to a five (5) year extension than can be invoked by Ruby's in 2017. Based on the current lease, the City is receiving approximately $520,000 a year in revenue. As proposed under a new lease, in June 2022 the percentage rent will increase by .50%, increasing revenue to the City by a minimum of$20,000 to $25,000 a year. In addition, the periodic adjustment to minimum rents will be subject to a 3% increase every third year. The increase in 2022 to the current Percentage Rent to the City by one-half percent would result in an estimated Percentage Rent increase to the City of$286,000 over the Lease term. Recommended Action: A) Approve"Lease Between the City of Huntington Beach and Ruby's Huntington Beach, LTD. For Operation of A Restaurant on the Huntington Beach Pier;" and B) Authorize the Mayor and City Clerk to execute the Lease Agreement and other related documents. Alternative Action(s). Do not approve the Lease and direct Staff accordingly. Analysis: In October 1993, the City approved a lease with Ruby's Diner, Inc. (Ruby's) to operate concessions on the Huntington Beach Pier. The Agreement was for 10 years, with two, five-year extensions, and included the Ruby's building and a coffee shop and a bait/tackle/snack shop. In December xB -95- Item 6. - 1 517 Dept.ID ED 16-23 Page 2 of 2 Meeting Date:9/19/2016 2002, the City Council approved Amendment No. 1 to the Ruby's Lease,which: 1) Extended Ruby's lease-term for an additional 10 years (effectively pushing the lease out to 2022 if all extensions were applied); 2) Removed Ruby's obligation to build two additional concession buildings, and; 3) Reduced Ruby's percentage rent payment by one percent (1%) due to reduction in the concession buildings that Ruby's was obligated to operate. The amendment was based in part on the fact that the City had decided to build the three pier buildings and to lease them independently, Over the last six months, Ruby's has been discussing plans to improve the restaurant and had asked to invoke the final five-year extension (from 2017 to 2022) and requested an additional ten- year lease extension. The requested increase, if granted, would have taken the current lease to 2032, or 16 additional years from 2016. After deliberating over whether granting a lease was in the best interest of the City, the issue was brought to the City Council's Economic Development Committee. There it was determined that the best course of action was to initiate a new lease to bring the terms up to current City standards and to remain generally within the term remaining, while incorporating the proposed ten-year extension to gain additional tenant improvements to benefit the City. Accordingly, with the new lease, as proposed,the following would occur: • New, updated lease agreement meeting new City Insurance requirements • Additional Maintenance Standards, including painting every three-years, if needed, and cleaning of the roof • Minimum rent will be subject to a 3% increase every third year • Monthly minimum rent to be paid and a single "true up" at the end of the year (percentage rent) • Late charge is 1% of any amount due and unpaid • New Tenant Improvements - over $160,000 including interior flooring, ceiling, wall material, tables, seating, decor, lighting fixtures, and exterior new trivoli LED lighting on the roof • Surf City USA Signage on roof • All improvements must be approved and completed within two years. Ruby's has been a good partner with the City and the new lease provides for upgrades to the building, enhanced maintenance of the building, and on-going support for a local businesses, all of which is in the City's best interest. Environmental Status: Not Applicable Strategic Plan Goal: Strengthen Economic and Financial Sustainabiiity Attachment(s): 1. Lease Between the City of Huntington Beach and Ruby's Huntington Beach, LTD., For Operation of A Restaurant on the Huntington Beach Pier Item 6. - 2 HB -96- 518 LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND RUBY'S HUNTINGTON BEACH, LTD. FOR OPERATION OF A RESTAURANT ON THE HUNTINGTON BEACH PIER THIS LEASE (the "Lease") is made and entered into effecti VAVI 1 , 2016, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and RUBY'S HUNTINGTON BEACH, LTD.,a California limited partnership("Lessee"). WHEREAS, City is the owner of the Huntington Beach Pier(the"Pier''), subject to the terms i of Lease dated May 7, 1984 and recorded May 21, 1985 as Instrument Number 85-183878 of Official Records of Orange County, California (the "State Lands Lease"). The tern "Premises"as used in this i Lease refers to the area of the Pier identified on Exhibits "A-V and "A-2," attached hereto and incorporated herein by this reference, i.e., the restaurant building located on the Premises and the improvements owned by City therein (collectively, the "Improvements"), but specifically excluding the Pier structure. Lessee desires to lease the Premises for the purpose of operating a casual full-service restaurant and accessory retail sales. City desires to lease the Premises to Lessee for such purpose in accordance with the terms and conditions set forth in this Lease. NOW,THEREFORE,the parties covenant and agree as follows: SECTION I. SUPERSEDING OF PRIOR LEASE This Lease shall superseded and replace any existing lease agreements for the Premises currently entered into by and between the parties and all supplemental agreements entered into by and between the parties regarding the existing lease agreements. 1 M:\Use rs\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revOli.docx 519 I i SECTION 2. GRANT OF CONCESSION ON THE PREMISES i 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 restaurantopen to thepublic at the Premises, i together with accessory retail sales (hereinafter sometimes referred to as the "Concession"). Lessee I shall not use the Premises for any other purpose or business. A map depicting the Premises is set forth in Exhibit"A",which is attached hereto and incorporated herein by this reference. City further grants i to Lessee and its agents, representatives,guests, invitees, licensees,employees,successors and assigns the right of access to and from the Premises across City owned, controlled or occupied Iands adjacent to the Premises, including without limitation, only between the hours of 5:00 a-m. and 10:00 p.m. Pacific time (except in an emergency),the Pier, for any purpose associated with this Lease; provided, however,access for the purpose of loading and unloading of delivery vehicles shall be on and subject to the terms of Section 59 below. This lease is not intended to confer third-party beneficiary status to anyone. City covenants and agrees to allow only the following products to be sold from any permanent or temporary concession on the Pier soft drinks, hot beverages, bottled water,juices, pre-packaged snacks, muffins, cookies, candy and prepackaged sandwiches. In addition the City covenants and agrees not to allow any other food or beverages to be sold from the Pier. SECTION 3. RESERVATIONS, ENCUMBRANCES AND RIGHTS-OF-WAY (a) City expressly reserves all natural resources 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 under or above the Premises for the extraction of such natural resources. However, such leasing or other arrangement shall 2 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revOli.docx 520 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. (e) City expressly reserves the right to lease, convey,or encumber the Pier,in whole or in part,for any purpose not inconsistent or incompatible with,and subject to,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 City's interest in Pier and/or in the leasehold estate created hereby, or any portion thereof. Lessee also agrees to cooperate and provide any documentation reasonably necessary for City to obtain any such financing. (d) This Lease is subject to the State Lands Lease and is made without warranty by City of title, condition or fitness of the Premises 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 perfonnance is a factor. SECTION 5. TERM i This Lease shall commence at 12:01 a.m.,on iQ,2016,and shall end at 11:59 p.m.,on May 1 31,2032. 3 M:\Users\VPC\Rubys\Huntington Beach\Ruby's Lease Final 9-12-16 revDii.docx 521 SECTION 6. CONDITION OF PREMISES AS IS The taking of possession of the Premises by Lessee shall, in itself, constitute acknowledgment thatthe 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. Subject to the foregoing, Lessee may validate parking tickets for City's parking structure located at the corner of Walnut and 3`d Streets for i Lessee's guests, invitees, officers and employees,and City will(a)allow Lessee's guests and invitees one (1) hour of free parking per parking ticket validated by Lessee, up to a maximum of sixty (60) parking card validations per day, and (b) not charge Lessee's employees whose parking tickets are validated with a"Ruby's Employees"stamp for parking but Lessee shall be responsible to pay to City monthly in arrears within thirty (30)days after receipt of City's invoice the daily employee validation amount per the City's parking fee resolution for each employee parking ticket so validated in the prior month. 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 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. 4 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final9-1Z-16 revOli.dou 522 (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 Office of Business Development or its designee shall be the 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 I0.1 Minimum Base Rent Lessee agrees to pay to City as rent(the"Rent") for the use and occupancy of the Premises a minimum base Rent as follows: Lessee shall pay a monthly base rent in advance of the first day of each month of the term, 1/12`h as set forth herein (the"Minimum Base Rent"). In addition, Lessee shall pay Percentage Rent (as defined below) at the rates set forth herein. Lessee's obligation to pay Minimum Base Rent and Percentage Rent under this Lease shall begin to accrue on the commencement date set forth in Section 5 above; in the event Lessee has made any payment under the existing Lease on account of any period from and after the commencement date of this Lease, such amounts shall be credited against the first Rents payable hereunder. The Minimum Base Rent of$I0,455.43 per month is subject to a 2% increase on January 1, 2017. Additional 3% increases occur every third year on January 1, 2020, January 1,2023,January 1, 5 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's lease Final9-12-16 revOli.docx 523 2026, and January ],2029. Minimum Base Rent adjustments shall take effect January I st of each such year. 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. 10.2 Percentage Rent In addition to Minimum Base Rent, during the Term or any extension thereof Lessee shall pay to City a sum("Percentage Rent")within thirty(30)days after the end of each Operational Year (as defined below), or portion thereof within the term, based on the applicable annual percentage of Gross Sales as shown as Exhibit"B". An "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 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 rate to utilize. With respect to 2016, Gross Sales and Percentage Rent shall be calculated under this Lease commencing on the commencement date hereof, and sales prior to the commencement date of this Lease shall be calculated and payable under the existing lease. Lessee shall undertake a final calculation of rent due under the existing lease within thirty (30) days after the commencement date hereof (in accordance with the gross sales percentages set forth therein), and to the extent such calculation shows that rent paid thereunder exceeded or was less than the amount indicated, the appropriate party shall promptly reimburse the other party for the difference. To the extent the total Rent paid with respect to an Operational Year is less than the total amount of Rent due taking into account the total annual Gross Sales as finally determined by Lessee 6 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revOli.docx 524 for such Operational Year,Lessee shall pay the difference within thirty(30)days after the end of such Operational Year. - SECTION 11. LATE CHARGE AND PENALTY If the Rent is not received by the City Treasurer within twenty(20)calendar days after the end of the month for which the Rent is being paid,or the next business day if the twentieth day falls on a weekend or holiday, Lessee shall pay the following late charge and penalty: (1) a late charge in the amount of one percent (1%) of any amount due and unpaid; and (2) one and a half percent(I %%) penalty, per month shall be added to each month the rent is due but unpaid. With respect to any 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 internet sales processed on site, merchandise, food and beverages, or services sold or rendered, or equipment rented in,on,or from the Premises during the term of this Lease, in each instance by Lessee or anyone contracting with Lessee, including, without limitation, its assignees 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 Parties, and/or from all public telephones, vending, weighing and all other machines owned, operated, or leased to or by Lessee Parties 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, or services to be delivered or 7 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revOli-docx 525 rendered by Lessee Parties 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 by Lessee Parties to third parties of equipment of any kind in, on, or from the Premises; (d) All revenues,receipts,commissions or proceeds generated offsite by Lessee Parties but delivered through the Concession; (e) All revenues, receipts, commissions or proceeds made by Lessee Parties 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(excluding wages,benefits and tips paid to employees); and (f) All other revenues, receipts, commissions or proceeds paid to Lessee Parties and 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 the first day of each Operational Year, SECTION 13.GROSS SALES EXCLUSIONS Notwithstanding Section 12 above, 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) Sales and use taxes, so-called luxury taxes, consumer's excise taxes, gross receipts taxes, value added taxes and other similar taxes now or in the future imposed on the 8 M:\Users\VPC\Rubys\Huntington Beach\Ruby's Lease Final 9-12-16 revOli. m 526 sale of merchandise or services, whether 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 that impose them whether or not such taxes are added to the selling price or included therein; (b) Any transfer of trade inventory from the Premises to the manufacturer or supplier from whom it was obtained by Lessee Parties, and the transfer or exchange of merchandise or inventory between Lessee's restaurants, where such transfers or exchanges of merchandise or inventory are made solely for the convenient operation of Lessee's business; (c) Bulk or occasional sales on a non-retail basis of inventory and assets of Lessee, including without limitation, Trade Fixtures(as defined in Section 49 below); (d) Sums and credits received in the settlement of claims for loss of or damage to trade inventory or Trade Fixtures; (e) Any sales resulting in a cash or credit refund to a customer in the ordinary course of business; (f) Any sales of merchandise to City employees,which take place at City Hall; (g) Any sales of merchandise to City employees during special events as approved in advance by the City's Ogee of Business Development,and any other meals, goods, or products provided for promotional or publicity purposes without charge; (h) Uncollectible credit accounts and other bad debts, not to exceed 2%of Gross Sales; (i) Discounted sales to employees of Lessee,not to exceed 2% of Gross Sales, and meals provided for officers or employees without charge;and (j) Amounts paid to charge card or credit card issuers. 9 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revoli.docx 527 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 reasonably acceptable to City, and City and/or its designated representatives shall have the right, at all reasonable times and upon prior notice, 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 written request therefore. Lessee shall furnish to City and/or its designated representatives copies of its quarterly California sales and use tax returns within thirty (30) days after 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 a point of sale system of record keeping and such other reasonable documentation which would normally be examined by an independent accountant pursuant to generally accepted auditing standards in performing an audit of Lessee's sales sufficient to provide determination i and verification of Gross Sales and the exclusions and deductions therefrom. Such system shall log in daily sales totals, sales details, and tally total sales for each day. Lessee agrees to maintain on the Premises, or another location subject to the prior written approval of City, all records and books of account, 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. 10 M:\Users\VPC\Rubys\Huntington Beach\Ruby's Lease Final9-12-16 revOlLdocx 528 i I i 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, I ior 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 during the Lease term,the total of any exclusions,the total Rent paid I to City for each of those months,all with year-end totals. City may at any time within three(3)years i after receiving the year-end statement; at its sole cost and expense,.cause all records and books of account for the year purportedly covered by the statement, to be audited by City or an independent 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 and books of account to City or its designated representative for City's use in the audit and/or for copying. If the audit discloses that Gross I 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 1 1 above. Furthermore,Lessee shall promptly on demand reimburse City for the full cost and expense of the audit conducted by any independent accountant should the audit disclose that the questioned year-end statement understated Gross Sales(including an overstatement of exclusions)or the Rent by any greater than Two Hundred and Fifty Dollars ($250.00). Notwithstanding the foregoing, in the event of any audit by City, Lessee may contest the results of City's audit by performing a confirmatory audit within 11 M:\Users\VPC\Rubys\Huntington Beach\Ruby's Lease Finai 9-12-16 revOli.dooc 529 thirty(30) days of receipt of City's audit results and supporting evidence, using an independent public accountant reasonably acceptable to City, and the parties shall thereafter meet and confer to reach agreement on the actual amount of overpayment or underpayment by Lessee- City further reserves the right to examine and audit all such records and books of account at any time during the three year period following the expiration or termination of this Lease. In addition, City shall have the right to enter upon the Premises(or such other location where Lessee's books of account and records are maintained) during business hours and with at least twenty-four (24) 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 reasonably required by City. City is entitled to take statements by deposition under oath of Lessee, its officers, bookkeepers,and/or accountants or any person who prepared the books, records, statements, and other documentation required to be provided by Lessee under this Lease. SECTION 16. SECURITY DEPOSIT Upon execution hereof, Lessee shall pay and maintain at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period,a security deposit with City in a sum of not less than Ten Thousand Dollars($10,000.00)to guarantee all of Lessee's obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, the repair and maintenance of the Premises as provided herein (amounts held by City under the existing lease shall be credited against such deposit, and any balance refunded to Lessee). Such deposit shall be in the form of cash, a cash bond or an assignment of certificate of deposit(the "CD") or savings account to 12 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Fina(9-12-16 revOli.docx 530 City, and shall be provided to the City Treasurer_ The form of any such security deposit shall be approved by the City Attorney and the City Treasurer.No interest shall accrue to the benefit of Lessee on cash deposits,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.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 reasonably 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 Concession services be provided in a manner to meet the needs of the public, and should City reasonably deem the Concessions hours of operation and/or food, merchandise,services,or rentals inadequate to meet such needs,City may require Lessee to make such changes reasonably 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. Lessee shall keep Premises in operation and open to the public for business each calendar day of the year, except Thanksgiving Day, Christmas Day, and Independence Day and two other days approved by City. The restaurant shall serve breakfast, lunch, and dinner,daily, with minimum hours of operation during the months of June,July,and August from 7:00 a.m.,to 10:00 p.m., and during the other months from 7:30 a.m,.to 9.00 p.m.The operating days and hours may be modified due to weather conditions or unforeseen events. Any modification to the operating days and hours must be approved in advance in writing by the Office of Business Development or its designee. 13 M:\Users\VPC�Rubys\Huntington Beach\Ruby's tease Final 9-12-16 revOli.docx 531 Except as permitted in advance in writing by City,all foods and beverages shall be sold in those disposable containers not limited or prohibited by City ordinance(written notice of which limit and/or prohibition shall be provided to Lessee by City). No pull-top cans or Styrofoam containers are to be vended or dispensed from the Premises. Lessee, wherever feasible, shall eliminate the use of non-recyclable containers and plastics.City may from time to time review the items sold and containers or utensils used or dispensed by Lessee. City reserves the right to prohibit the sale or use of non- recyclable containers or plastics,and Lessee shall comply with City's requirement regarding prohibition of non-recyclable items. Lessee shall comply with any City exclusivity agreement the City may have with any food or beverage sponsor, except to the extent the same conflicts with Lessee's contractual obligations. This paragraph shall apply solely to food and beverages sold or packaged"to go"and not to plates, dishes, utensils, etc., used for food and beverages served and consumed inside the building on the Premises. City in its reasonable discretion reserves the right to prohibit Lessee's sale,provision or rental of any item or service rendered or performed, which it deems objectionable or offensive, beyond the scope deemed necessary for proper service to the public,inappropriate for sale,provision or rental by the Concession, or of inferior quality. SECTION 18. INDEMNIFICATION. DEFENSE AND HOLD HARMLESS AGREEMENT Lessee hereby agrees to protect,defend, indemnify,and hold harmless City,its officers, elected or appointed officials,employees,agents and volunteers from and against any and all claims,damages, losses, expenses,judgments,demands, and defense costs(including, without limitation, costs and fees of litigation(including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with (1) the use or occupancy of the Premises by the public, Lessee's patrons, and/or Lessee and its officers, employees or agents,or(2)the death or injury of any person, including but not limited to the public, Lessee's patrons, or Lessee, or the damage to property caused by a condition of 14 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revOli.docx 532 the Premises,or(3)the death or injury of any person, including but not limited to the public,Lessee's patrons, or Lessee, or the damage to property caused by any act or omission of Lessee, its officers, employees or agents,in each case in or about the Premises,or any failure by Lessee to keep the Premises in a safe condition, or (5) Lessee's (or Lessee's assigns 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 that was caused by the sole negligence or willful misconduct of City, or(5) if, and only to the extent, that Lessee's obligations pursuant to this clause (5)are covered by Lessee's insurance,any claim by the public,Lessee's patrons or Lessee's employees of any discrimination,misconduct,mistreatment, or other negligence or willful misconduct by Lessee, its officers,employees,or agents in or about the Premises,Lessee shall hold all Trade Fixtures,personal property and trade inventory on the Premises at the sole risk of Lessee and hold and save City harmless from any loss or damage thereto by any cause whatsoever, except to the extent such loss or damage that was caused by the negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and,unless insurance defense counsel is appointed,City shall reasonably 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 19. 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 evidence of workers' compensation and employers' liability insurance in amounts 15 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revOlWou 533 I i 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' shall furnish t City a certificate of waiver of subrogation under the terms of the employees. Lessee sh 1 o ty g workers' compensation and employers' liability insurance and Lessee shall similarly require all sublessees and contractors to waive subrogation. I SECTION 20. 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 evidence that Lessee maintains 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 state that it indemnifies Lessee, its officers, employces 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 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 and 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 any other similar form of limitation on the required coverage, but may include commercially reasonable deductibles. 16 M:\Users\VPCRubys\Huntington Beach\Ruby's Lease Final9-12-16 revOli.dou 534 SECTION 21. 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, and 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 and/or 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 fortis in Section 50(Destruction)below,and either party elects to terminate the Lease, the entire amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City-The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as necessary to restore the Premises or for any such other purpose(s) as City sees This policy shall also contain the following endorsements: 17 M:\Users\VPC\Rubys\Huntington6each\Ruby's lease Final 9-12-16 rev011.docx 535 (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 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 certificate of insurance showing that coverage has been renewed shall be filed with City. SECTION 22- 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 20 above and/or property insurance coverage in Section 21 above at that time is not adequate, Lessee shall increase the insurance coverage as reasonably required by City, not to exceed ten percent(109/0)per annum. SECTION 23.CERTIFICATES OF INSURANCE;ADDITIONAL INSURED ENDORSEMENTS Prior to commencement of this Lease, Lessee shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease; these certificates shall: (a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in force;and (c) shall promise to provide that such policies shall not be canceled or modified without thirty(30)days'prior written notice of City; however ten(10)days' prior written notice in the event of cancellation for nonpayment of premium, 18 M:\Users\VPC\Rubys\Huntington Beach\Ruby's Lease Final 9-12-16 revOli.docx 536 which I 0-day notice provision shall not apply to property insurance in Section 21 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 a copy of any or all the policies of insurance. Lessee shall pay, in a prompt and timely manner, the premiums on all insurance herein required. SECTION 24.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 materially 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 market rates. SECTION 25. MAINTENANCE OF PREMISES,• 'TENANT IMPROVEMENTS Subject to this Section 25 and Section 26 below,City has no maintenance responsibilities with respect to the Premises. Lessee agrees to use commercially reasonable efforts to maintain the Premises in good order and repair,at Lessee's sole cost and expense,during the entire term of this Lease or during any holdover period, pursuant to the City's maintenance standards. With respect to maintenance of anything in or about the Premises that is not a Lessee Maintenance Item (as defined herein),and/or any repairs and/or replacement required to maintain the Premises in good order and repair, while the same shall be Lessee's obligation to perform after consultation with City as to the scope and cost of any such 19 M.-\Users\VPC\Rubys\Hunt'rngtonBeach\Ruby's Lease Final 9-12-16 revoli.docx 537 maintenance,Lessee shall be entitled to a rent credit pursuant to Section 26 below. As used herein the term "Lessee Maintenance Items" means, collectively, the interior of the Premises and the exterior walls,windows and trim, and shall include washing bird droppings and dirt off the Premises, including roof, windows, and exterior walls, as needed, but not less than quarterly, and graffiti removal as provided below.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)on the Premises. Lessee's obligation includes, without limitation, maintaining and operating the Premises 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. Lessee shall at all times faithfully obey and comply with all laws, rules and regulations applicable thereto. Lessee shall monitor,inspect and assess the Premises at least daily when the Premises are open for business,and more often as circumstances may warrant,for conditions that would, or could reasonably be expected to, present danger to the public, Lessee's patrons or Lessee. At Lessee's sole cost and expense,Lessee shall remedy without delay any defective, dangerous, or unsanitary condition(s) within the Premises caused by any third party other than City, including but not limited to the public, Lessee's patrons,or Lessee. Lessee shall maintain ADA access around the immediate Premises- Lessee shall install and maintain grease trap(s)or grease interceptors) in accordance. with the City's requirements set forth in Chapter 14.56 of the Huntington Beach Municipal Code, 20 M:\Users\VPC\Rubys\Fluntington Bea ch\Ruby's Lease Final9-12-16 revOli.docx 538 Lessee shall paint, stain; or seal the exterior surfaces of the Premises every three (3) years, except as otherwise agreed to by the parties in writing. All exterior metal surfaces, except the roof, shall be painted with rust resistant paint no less than once every other year, except as otherwise agreed to by the parties in writing.Any and all graffiti on the Premises shall be removed by Lessee,at its sole cost and expense, within forty-eight (48) hours of Lessee receiving notice thereof or of Lessee becoming aware of such graffiti. In addition, with or without notice from City, Lessee shall, at its sole cost and expense, repair and/or replace any broken glass as soon as possible, and shall secure the Premises after any glass is broken 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 commence to repair and/or replace all damage or destruction within 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 but subject to Sections 26 and 51 below,shall commence to repair and/or replace I all other damage or destruction to the Premises, regardless of cause, except by fault of City. Lessee shall provide,on an annual basis upon City's request,records and receipts for all Lease- related maintenance, repair and replacement costs. i Lessee shall comply with all written notices served by City with regard to the care and i maintenance of the Premises as required by this Lease or applicable law.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. Subject to force majeure, should Lessee fail to complete making the necessary repairs within fifteen (15) days after receiving such notice, or within forty-eight(48) hours in the case of broken glass or for removing graffiti, or fail to diligently proceed to complete the necessary repairs within the period of time reasonably specified in the City's notice, City may proceed 21 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9.12-16 revOlt.docx 539 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. City shall,at its expense,operate and maintain the Pier in good order and repair. Lessee hereby expressly waives the right to make repairs to the Pier 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. Lessee has proposed improvements to the Premises as set forth in Exhibit "D". City has received and consents to the proposed improvements in Exhibit "D". Aft proposed improvements in Exhibit "D" shall be submitted to and approved by all City, State, county and/or local entities and comply with all requirements, including, but not limited to plans, specifications, permits, approvals and inspections.All proposed and approved improvements in Exhibit"D" shall be fully completed to the satisfaction of City no later than one year from the date of approval of plans by City. SECTION 26. RENT CREDIT After the proposed tenant improvements,a Rent credit may be available for some or all of any tenant improvements performed by Lessee upon prior written approval by the Office of Business Development or its designee.The terms of payment of any Rent credit will be determined by the Office of Business Development. City shall give Lessee Rent credit if Lessee undertakes (1) maintenance, repair and/or replacement of the structure and/or roof of the building in which the Premises are located and/or of utilities(water, sewer,gas and electrical)up to the point of connection to the Premises(and if separately metered to the Premises the"point of connection"shall be the point at which such separate meter is installed)or(2)any work City in its sole discretion deems necessary and appropriate;provided, however, if sewer blockage is caused by improper grease trap maintenance and/or use of plumbing facilities within the Premises, the cost of removal of such blockage shall be borne by Lessee and not 22 M:\Users\VPC\Rubys\Huntingtoneeach\Ruby's Lease Fiinal9-12-16 revOli.docx 540 I I eligible for a Rent credit hereunder. Prior to Lessee undertaking any such work,City must agree(not to be unreasonably withheld, conditioned or delayed) in writing to the amount of and procedures for the Rent credit,the work to be done by Lessee and the cost of such work. SECTION 27. 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 28.TAXES In the event that this Lease creates a taxable possessory interest in property, Lessee agrees to pay taxes levied on the leasehold interest created by this Lease, at its sole cost and expense. Lessee also agrees to pay, at its sole cost and expense, before becoming 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 fumish to City satisfactory evidence establishing such payment. Lessee shall comply with all laws, regulations, and ordinances regarding the collection of taxes due a government agency. SECTION 29.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 23 M:\Users\VPC\Rubys\Huntington6each\Ruby's Lease Final 9.12-16 revOli.docx 541 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 30. UTILITIES AND SERVICES 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. Lessee shall use good energy practices as described in the State of California Flex Your Power Best Practice Guide, SECTION 31. BUSINESS LICENSE Lessee shall maintain a business license from City during the entire term of this Lease and during any holdover period. SECTION 32. SIGNS, ADVERTISING AND APPROVAL OF NAME City shall have the right to approve,at its sole discretion,and at any time, or require Lessee to change or remove signs, kiosks, names, placards, decorations, or advertising placed on, or inscribed, i painted, or affixed upon the Premises. No outdoor sales are allowed by Lessee unless prior written approval is obtained from the Office of Business Development or its designee. All outdoor kiosks, I displays or banners must first be approved in writing by the Office of Business Development or its designee. 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 24 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9.12-16 revOli.docx 542 or during any holdover period in good appearance and repair. All signs, kiosks, names, placards, decorations,or advertising must comply with all Code requirements of City and any other governmental authority with jurisdiction. Notwithstanding anything to the contrary herein, Lessee may maintain all existing signage,decorations and lighting that is in or about the Premises as of the commencement of this Lease. SECTION 33.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, sublease all or any part of the Premises, or allow any other person or entity to occupy or use all or any part of the Premises (except Lessee's authorized representatives) without the prior written consent of City, which consent shall not be unreasonably withheld. The 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 the City's written 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. 25 M:\Users\VPC\Rubys\Huntington8each\Ruby's Lease final 9-12-16 revOli.docx 543 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) Voluntaa 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: (1)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); (2)a"Subsidiary"shall mean any corporation or partnership 26 M:\Users\VPC\Rubys\Huntington8each\Ruby's Lease Final9-12-16 revOli.docx 544 i I not less than twenty- five percent(25%)of whose outstanding stock shall, at the time, be owned directly or indirectly by Lessee and which is at least as creditworthy as Lessee, and(3)a"Successor"shall mean(1)a Iimited liability company,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 limited Iiability company, corporation or partnership acquiring a substantial portion of the property and assets of Lessee with respect to the Premises and the Concession and/or(ii)a bona fide franchisee of the"Franchisor"(Ruby's Franchise Systems, Inc., a California corporation, and an affiliate of Lessee)who has proven retail food service experience and has participated in the Franchisor's training programs prior to the effective date of such assignment or subletting, or, upon termination of any franchise agreement with a franchisee of Franchisor that is a Successor,to Franchisor. SECTION 34.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. 27 M:\Users\VPC\Rubys\tluntingtonBeach\Ruby's Lease Final 9.12-16 revOli.docx 545 SECTION 35_ 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 within 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 sixty-five (65) days in a calendar year, minus any days of closure of the Concession caused or permitted by City, shall be deemed an abandonment of the Premises. (d) Lessee's violation of Section 19(Indemnification, Defense and bold Harmless Agreement), 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. 28 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final9-12-16 revOhdocx 546 (f) Lessee's failure to observe or perform any other term, covenant, obligation, duty, responsibility or condition of this Lease,including those contained in Section 25 for example, to be observed or performed by Lessee when such failure shall continue for a period of thirty (30) days after City's giving written notice to Lessee, or such earlier period if specifically set forth in this Lease;however,if the nature of such failure is such that more than thirty(30) days are reasonably required for its cure,then Lessee shall not be deemed to be in Default if Lessee notifies City of the length of the additional time required to cure and receives City's written approval of the additional time required, which approval will not be unreasonably withheld, and commences such cure within such thirty (30) day period and diligently proceeds with such cure to completion during such additional time period approved by City. SECTION 36. 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 fora 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 29 M:\lJsers\VPC\Rubys\HuntingtonBeach\Ruby's lease Final 9.22-16 revOli.docx 547 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 tem-i. 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, 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 54 and 55 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 30 M:\Users\VPC\Rubys\HuntingtonBeachNRuby's Lease Final 9-12-16 revOli.docx 548 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 that 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 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 36(a)(2)(A)and(B)above,the"worth at the time of the award"shall be computed by allowing interest at the rate of helve percent (12%) per annum. As used in 31 m:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revOli.docz 549 Section 36(a)(2)(C)above,the"worth at the time of the award"shall be computed by discounting sudh 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 36(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 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) Cites Right to Cure Lessee's Default, Upon continuance of any Default, City may at 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 I l 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 therefore 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. 32 M:\Users\VPC\Rubys\Huntingion Beach\Ruby's Lease Final 9-12-16 revOli.docx 550 II i i I (d) Waiver of Rim. 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 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 37. 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 38. 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 39.CITY'S DEFAULTS/LESSEE'S REMEDY In the event City fails to perform any material obligation of City under the Lease within sixty (60) days after receiving written notice from Lessee specifying the nature of such default, or, if the 33 M:\Users\UPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 rev01Ldocx 551 nature of City's obligation is such that more than sixty (60) days are required for its performance, if City fails to commence such performance within such sixty (60) 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 Percentage Rent due up to the time of termination and surrendering the Premises pursuant to Sections 54 and 55 below,except as otherwise provided herein. During such sixty (60) days period, Lessee's obligation to pay Minimum ' Base Rent shall be abated. Subject to the immediately preceding sentence,the remedy of termination afforded Lessee in this Section 39 is Lessee's sole and exclusive remedy for a default by City. SECTION 40.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, unless otherwise expressly stated in the consent. SECTION 41. 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,Lessees continued I occupancy of the Premises shall constitute a month-to-month tenancy, subject to all the terms and i i conditions of this Lease,at a monthly rent of one hundred ten percent(I I0%)of the previous calendar year's annual Minimum Base Rent divided by twelve(12)(or the average monthly Minimum Base 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 Minimum Base Rent, whichever is greater, and shall not constitute a renewal or extension of the Lease term. 34 M:\Users\VPC\Rubys\Huntington Beach\Ruby's Lease Final 9-12-16 revOli.docx I i 552 i I I SECTION 42. 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 I 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 43. INSPECTION OF PREMISES Upon at least twenty-four(24)hours advance written,verbal or electronic notice given by City to Lessee,Lessee shall permit City or City's agents,representatives or employees to enter the Premises at all reasonable times for the purpose of inspecting, investigating and surveying the Premises to determine whether Lessee is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect City's interest in the Premises or to perform City's duties under this Lease. City may make quarterly physical inspections of the Premises and may direct that interior maintenance or outdoor painting repairs are to be performed where such work is necessary to protect the Premises or to provide a clean, attractive and well-maintained Premises. Lessee shall perform those maintenance and repairs that it is responsible for within thirty (30) calendar days. City also shall have the right at 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, in accordance with Section 57 below, and Lessee shall adjust the operation of the Concession in such a manner that City may proceed expeditiously. SECTION 44. QUIET POSSESSION 35 M.\Users\vPC\Rubys\HuntingtonBeach\Ruby`s Lease Final 9-12-16 revoli.docx 553 Subject to payment by Lessee of the Rent and performance of all of the covenants,conditions and provisions on Lessee's part to be observed and performed under this Lease,Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. SECTION 45. PHOTOGRAPHY Lessee acknowledges and agrees that City may grant pennits 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 46. 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 food preparation, cleaning and I maintenance 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 36 M:\Users\VPC\Rubys\HuntingtonBeacli\Ruby's Lease Final 9-12-16 revoli.docx 554 and penalties incurred as a result thereof except any release caused by the sole negligence or willfui misconduct of City. Lessee will defend City at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. "Hazardous Substance" shall be interpreted broadly to mean any substance or material defined or designated as a hazardous or toxic waste, hazardous or toxic material, hazardous or toxic or radioactive substance, highly combustible or I flammable fluid or material,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 dine 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 i or disease. SECTION 47.NONDISCRIMINATION Lessee and its employees shall not discriminate because of race, ethnicity, religion, color, ancestry, sex sexual orientation 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 i or question the acceptability of the patronage of any person because of race, ethnicity, religion,color, ancestry, sex,sexual orientation,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,ethnicity, religion, color,ancestry, sex, sexual orientation, age,national origin or physical handicap.Lessee shall take affirmative action to ensure that applicants 37 M:\Users\VPC\Rubys\Huntington Beach\Ruby's Lease Finat 9-12-16 revOli.doa 555 are employed and that employees are treated during employment,without regard to their race,ethnicity, religion,color,ancestry,sex,sexual orientation,age, national origin or physical handicap-Such:action shall include, without limitation, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including, without limitation, apprenticeship. Lessee shall post in conspicuous places,available to all employees and applicants for employment,notices setting forth the provisions of this Section. 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 knowingly and willfully 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 each case which violation related to the Premises. In the event of violation of this Section, City shall have the right to terminate this Lease. SECTION 48. LiENS Lessee shall keep the Premises free and clear from any and all liens, including, without limitation, mechanics' or materialmen's 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 38 M:\Users\VPC\Rubys\HuntingtonSeach\Ruby's Lease Final9-12-16 revOli.docx 556 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 49. INSTALLATION AND REMOVAL OF TRADE FIXTURES Lessee shall have the right during the entire term of this Lease 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 55 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 50. 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 after the occurrence of the event. 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_ (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 its 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 39 M:\Users\VPC\Rubes\HuntingtonBeach\Ruby's Lease Final9-12-16 revOli.doec 557 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,trade inventory,business interruption insurance, and the like, 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 54 and 55 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 51. NO ABATEMENT OF RENT DURfNG REPAIR WORK If and only to the extent that Lessee is entitled to reimbursement for Rent,taxes, insurance and other obligations payable hereunder from and after any casualty under the insurance policies Lessee is required to maintain under this Lease,the rent shall not be abated for the time Lessee is prevented from using the whole or a portion of the Premises nor shall Lessee shall not be excused from the payment of taxes, insurance or any other obligations for the time Lessee is prevented from using the whale or a portion of the Premises-, subject to the foregoing, Rent and all other payments required of Lessee 40 M:\Users\VPC\Rubys\Hu ntington Beach\Ru by's lease final 9-12-16 revOli.dou 558 hereunder shall be abated if and to the extent that Lessee is unable to operate its business from the Premises. SECTION 52. 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. This Section shall not apply to a condemnation by City of any of Lessee's property and/or interest in this lease. SECTION 53_ RELOCATION AND ASSISTANCE, BUSINESS GOODWILL AND LEASEHOLD BONUS VALUE Upon expiration or termination of this Lease for any reason, 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. 41 M:\Users\VPC\Rubys\FluntingtonBeach\Ruby's Lease Final9-12-16 revOli.docx 559 SECTION 54. QUITCLAIM DEED Upon expiration or termination of this Lease as provided for herein, 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 55. RESTORATION AND SURRENDER OF PREMISES/TITLE TO IMPROVEMENTS TO THE BUILDING On expiration or termination of this Lease, 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, ordinary wear and tear excepted. Lessee also shall, without compensation to Lessee, surrender all Improvements to the building 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 to the building performed by Lessee during the Term hereof, at Lessee's own risk and cost and expense;or City may itself remove or have removed all or any portion of such Improvements to the building, at Lessee's own risk and cost and expense. If required by City to do so, in removing 42 M:\Users\VPC\Rubys\Huntington Beach\Ruby's Lease Final 9.12.16 revOli.docx 560 any such Improvements to the building,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 term ination of this Lease;provided,however,that Lessee shall be considered a holdover tenant(pursuant to Section 41 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 (and any ensuing holdover), 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 56. 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. Nothing contained in this Section shall excuse the prompt payment of tine 43 M:\Users\VPC\Rubys\Huntington8each\Ruby's Lease Final 9-12-16 revOli.docx 561 Rent or other consideration by Lessee as required by this Lease or the perfonnance of any act rendered difficult solely because of the financial condition of the party, City or Lessee, required to perform the act,except as otherwise specifically provided in this Lease. SECTION 57. CITY'S OPTION TO CLOSE THE PREMISES Initial 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. City retains the right to close the pier and Premises for emergencies without any notice to Lessee, for any extent of time and without compensation or credit. In those cases where there is a City-planned pier closure,or other City activities or special events that will restrict access to the Premises, Lessee will be given a ten (10)business day notice. Except if and only to the extent that Lessee is entitled to reimbursement for Rent, taxes, insurance and other obligations payable hereunder from and after any casualty under the insurance policies Lessee is required to maintain under this Lease, Rent and such other amounts as Lessee may be required to pay City pursuant to this Lease shall be abated during any such period. SECTION 58. CITY DAYS . City shall have the right to utilize the second floor of the Restaurant (the "Space") for City related purposes not more than twelve(12) days during each Lease Year, for a period of not more than five (5) hours on each such day, provided that City may only use the Space for one (1) day per year during the period from June 15 to September 15,subject to the terms and conditions of this Section 58. City shall provide Lessee with not less than thirty (30) days prior written notice of its intent to utilize the Space pursuant to this Section 58, Said written notice shall provide a reasonably detailed account of the date and time during which City intends to utilize the Space and will describe the purpose and 44 M:\Users\VPC\Rubys\Huntington6each\Ruby's lease Final9-12-16 revoli.docx 562 manner of such use. The parties shall reasonably cooperate with one another to accommodate scheduling conflicts, taking into account Lessee's pre-existing commitments and other reasonable customer service and economic considerations. In utilizing the Space,City shall use its best efforts to minimize,to the greatest extent possible, interference with Lessee's use of,and business operations at, the Premises. Rent and all other charges under the Lease shall be reduced equitably to reflect the extent to which City's use of the Space materially interferes with Lessee's use of the Premises or its business operations at the Premises, City shall indemnify, hold harmless, protect and defend (with counsel reasonably acceptable to Lessee) Lessee from and against any and all injuries, liabilities,claims, demands, penalties, costs and expense whatsoever to persons or property caused by, arising from, related to or in connection with the use of the Space by City, its officers,agents,employees, representatives,invitees,guests, licensees,assignees using the Space during any City Day.City hereby covenants and agrees,at City's sole cost and expense, to (i) immediately undertake, and prosecute diligently to completion, the repair and restoration of any damage, injury or excessive wear and tear caused to the Space, the Premises or any of Lessee's personal property (including, but not limited to, equipment, fixtures, decorative items and furniture) during any City Day,to their condition prior to such damage or injury,and(ii)replace any of Lessee's personal property that is lost or stolen during any such City Day,whether such damage or loss is caused by City, its officers, agents, employees, representatives, invitees, guests, licensees or assignees using the Space during such City Day. SECTION 59. DELIVERIES OF SUPPLIES The City Manager or his/her designee may establish the days and times deliveries of supplies may be made, consistent with Huntington Beach Municipal Code Section 13.08.290(g), and shall 45 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-22-16 revOli.docx 563 not unreasonably interfere with the conduct of Lessee's business in connection therewith, and advise Lessee in writing thereof. SECTION 60. EMPLOYEE PARKING All employee parking shall comply with Huntington Beach Municipal Code Section 13.08.290(d)and(g). SECTION 61. CONFLICT OF INTEREST Lessee warrants and covenants that no official or employee of City, nor any business entity in which an official or employee of City is interested,(1)has been employed or retained by Lessee to solicit or aid in the procuring of this Lease; or(2)shall be employed by Lessee in the performance of this Lease without the immediate written divulgence of such fact to City. In the event City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City, Lessee, upon request of City, shall terminate such employment immediately. For breaches or violation of this Section, City shall have the right both to terminate this Lease without liability and, in its discretion, recover the full amount of any such compensation paid to such official, employee or business entity. No official or employee of City shall have any financial interest in this Lease in violation of the applicable provisions of the California Government Code. SECTION 62. 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; 46 M:\Users\VPC\Rubys\Huntington Beach\Ruby's Lease final 9-12-16 revOli,docx 564 provided that City and Lessee, by notice given hereunder, may designate different addresses to which subsequent notices,certificates or other communications will be sent: CITY: City of Huntington Beach ATTN: Deputy Director, Office of Business Development P.O. Box 190 Huntington Beach,CA 92648 LESSEE: Ruby's Huntington Beach, Ltd. ATTN: Doug Cavanaugh 201 Shipyard Way, Suite E Newport Beach,CA 92663 SECTION 63. 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, Federal, State, county or municipal, relating to Lessee's use and occupancy of the Premises and/or operation of the Concession whether such statutes,ordinances,regulations and requirements be now in force or hereinafter enacted. This Lease is expressly subject to the laws, regulations and policies of City. Lessee shall deliver to City a copy of any notice from any governmental entity received by Lessee regarding any alleged violation of law regarding the Lease, Premises or the Concession or from any person allegedly entitled to give notice under any conditions, covenants, or restrictions binding or affecting the Premises. The judgment of any court of competent jurisdiction, or the admission by Lessee in a proceeding brought against Lessee by any government entity, that Lessee has violated any such statute, ordinance, regulation or requirement shall be conclusive as between City and Lessee and shall be grounds for termination of this Lease by City. SECTION 64. INTERPRETATION OF THIS LEASE 47 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revoli_dom 565 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 enforcement of any of 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 65. SURVIVAL Terms and conditions of this Lease, which by their sense and context survive the expiration or termination of this Lease, shall so survive. SECTION 66. MODIFICATION No waiver or modification of any Ianguage in this Lease shall be valid unless in writing and duly executed by both parties. SECTION 67. 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 48 M;\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-22-16 revDii.docx 566 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 68. 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 69. 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 or agent 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 i 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. j SECTION 70. ATTORNEY'S FEES i In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Lease or to secure the performance hereof, each party shall bear its own attorney's I fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non- prevailing party. j SECTION 71. LEGAL SERVICES SUBCONTRACTING PROHIBITED j Lessee and City agree that City is not liable for payment of any subcontractor work involving legal I services, and that such legal services are expressly outside the scope of services contemplated I hereunder. Lessee understands that pursuant to Huntington Beach City Charter Section 309, the City i jAttorney is the exclusive Iegal counsel for City; and City shall, subject to Section 70 above, not be liable for payment of any legal services expenses incurred by Lessee. 49 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease final 9-12-16 revoli.dou 567 SECTION 72. GOVERNING LAW This Lease shall be governed and construed in accordance with the laws of the State of California. SECTION 73. 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 74, ENTIRETY The parties acknowledge and agree that they are entering into this Lease freely and voluntarily following extensive arm's length negotiations,and that each has had the opportunity to consult with legal counsel prior to executing this Lease. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party, or anyone acting on that party's behalf, which are not embodied in this Lease, and that that party has not executed this Lease in reliance on any representation, inducement,promise, agreement,warranty,fact or circumstance not expressly set forth in this Lease-The Lease,and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Lease,the Premises,the leasing of the Premises to Lessee,or the lease term created under this Lease and supersede all prior understandings and agreements,whether oral or in writing between the parties respecting the subject matter hereof. 50 M:\Users\VPC\Rubys\HuntingtonBeach\Ruby's Lease Final 9-12-16 revOli.docx 568 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. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement,and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact,held by the signatory or is withdrawn. LESSEE CITY OF HUNTINGTON BEACH, a RUBY'S HUNTINGTON BEACH, LTD., municipal corporation of the State of a California limited partnership California By G Tad Belshe, EVP and Secretary of Ruby's Diner,Inc., Manager of Ruby's SoCal Diners, Mayor LLC, General Partner of Lessee City Clerk INITIATED AND APPROVED. Deputy Director of Business Development Assistant City Manager APPROVED AS TO FORM: City Attorney REVIEWED AND APPROVED: City Manager 50 M:\Users\VPC\Rubys\l-funtingtonBeach\Riby's Lease Final 9-12-16 rev I i.doc 569 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. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. LESSEE CITY OF HUNTfNGTON BEACH,a R.UBY'S HUNTINGTON BEACH. LTD., municipal corporation of the State of a California limited partnership California By .�� � —, Tad Belshe, EVP and Secretary of Ruby's Diner, Inc., Manager of Ruby's SoCal Diners, Oayor LLC, General Partner of Lessee ftj City Clerk INITIATED AND APPROVED: Deputy DirUe or of Business evelopment Assistant City Manager APPROVED A RM. City Attorney VI APROVED: Oq�anager I - I; 50 M:\Users\VPC\Rubys\HuntingtonBeach\Rubv's Lease Final 9-12-16 rev t i.doc i 570 EXHIBIT"A - I" M -- d i �,L£e� _ �gtix:aaA l x. 571 EXHIBIT "A-2" Zi Ni 4p I 572 0 573 EXHIBIT "B" Percentage Rent will be based on the following annual Gross Sales percentages: Initial Term:Commencement-5/3 2022 Annual Sales Volume Percentage $0- $800,000.00 6% $800,001.00-$1,300,000.00 7% $1,300,001.00-$2,000,000.00 9% $2,000,001.00 and above 11% ExtensionTerm:June 1.2022-May3L2032 Annual Sales Volume Percentage $0-$800,000.00 6.5% $800,001.0041,300,000.00 7.5% $1,300,001.00-$2,000,000.00 9.5% S2,000,00 1.00 and above 0 EXAMPLE FOR PERCENTAGE RENT CALCULATIONS: Assumptions—Annual Gross Sales of$4,500,000;Minimum Base Rent of$10,455.43 per month or $125,465.16 annually. (Annual Gross Sales Calculation) Initial Term: 6%x$800,000.00 $ 48,000.00 7%x$500,000.00 $ 35,000.00 9%x$700,000,00 $ 63,000.00 1 1%x $2,500,000.00 $ 275,000.00 Percentage of Gross Sales $ 421,000.00 Annual Minimum Base Rent $ (125,465.16) PERCENTAGE RENT $ 295,534.84 Extension Term: 6.5%x$800,000.00 $ 52,000.00 7.5%x$500,000.00 $ 37,500.00 9.5%x$700,000.00 $ 66,500.00 11.5%x$2,500,000.00 $ 287,500.00 Percentage of Gross Sales $ 443,500.00 Annual Minimum Base Rent $ (125,465.16) PERCENTAGE RENT $ 318,034.84 574 EXHIBIT "C" Quarterly Evaluation Month Year Today's Date_ Inspected By: _ 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: -------------- EV BIT"C" Page I of 2 575 DEFINITIONS Doors and Locks Rest Rooms(Plumbing) Clean and in operable position and condition.All Entry mats,floors and carpets shall be kept clean. locks shall be regularly checked and maintained. Walls shall be kept fingermark free.Tile and wall Absolutely no chain locks are allowed. Locks surfaces shall be kept clean.Toilet bowls,rims, shall only be used on authorized locations_ tank tops,and bodies shall be kept clean. Mirrors shall be kept clean and streak free. Soap Exterior Walls dispensers clean and full. Paper towel dispenses Clean and smooth,void of rust,graffiti,stickers, clean and full.Toilet paper dispensers clean and etching,or other materials or marks that were not full.All sink and faucet fixtures clean and rust originally placed on the walls. free.Light fixtures clean and functioning.Air fresheners functioning. Exterior Area Trash receptacles clean, lined and emptied Outside area around concession building that is regularly. utilized by the concessionaire. Roof Graffiti Removal. Free of debris and cleaned regularly as needed to remove All graffiti shall be removed within forty-eight bird droppings,graffiti or vandalism. hours including painted or sprayed graffiti, Roof leaks shall be reported immediately to the magic markers,stickers,etching,and surf wax. Community Services Department. The building shall be kept free of graffiti. Interior rest room graffiti shall be removed on a Rust regular basis not to exceed forty-eight hours. No accumulation or degeneration to interior or exterior surfaces. Rusted areas shall be cleaned and Grease Trap painted on a regular basis to avoid long term Free and clear flowing with regularly scheduled damage. maintenance to prevent buildup or clogging. Signage Hood Grease Filter Clean,readable and in good condition. Bulbs in Removed and cleaned a minimum of every three lighted signs shall be replaced as needed within months,and checked regularly and cleaned more twenty-four hours. No unauthorized signs shall be often if necessary. Filters shall be replaced at posted. such time as required where volumes are no longer maintained. Trash Deposited in designated containers. There shall Interior Walls be no buildup of cardboard boxes,unused Clean and smooth,void of dirt or corrosion_ All equipment,unwanted decorator items,etc.within Fire-rated walls shall be solid and unpenetrated. the trash areas. Trash areas shall be secured from public use to avoid deposit of fish remains. Removal of Bird Dropping The building in its entirety shall be cleaned a Trim minimum of every three months to remove all Clean and smooth,void of corrosion and rust. bird droppings. If bird droppings present a health problem,they shall be removed prior to the Windows minimum three month periods. Clean and void or cracks.No commercial stickers shall be used on windows. EXHIBIT"C" Page 2 of 2 576 1 I EXMBIT"D" nUbY5 Huntington Beach Pier Remodel Budget Estimate 2016 (1 1 t I Flooring $25,000 Ceiling $S,000 Wall Material $5,000 Trim $500 Tables $13,000 Seating (Upholstery-Stools-Chairs) $27,300 Lighting Fixtures $6,000 Decor(Art and Misc Decor) $5,000 electrical $700 Signage $7,000 Lighting $30,000 Ruby's Design&Construction Coordination $24,000 Permits $2,500 Contingency $l 0,000 milli Cost estimates based on currently know specs and labor rates_Estimates subject to change based on final specs selected,current prevailing rates,and market conditions 577 CERTIFICATE OF LIABILITY INSURANCE DATE(MIxDWYYYYI AC� i» 09/01/2016 ' THIS CERTIFICATE IS ISSUED AS A MATTER OF INFOFZMATION PRODUCER ONLY AND CONFERS NO R)GHTS UPON THE CERTIFICATE THADDEUS W.SMITH &ASSOCIATES HOLDER.THIS CERTIFICATE DOES NOT AMEND,EXTEND OR 3151 AIRWAY AVE-#A2 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COSTA MESA,CA 92626 NAIC 7141241-3072 INSURERS AFFORDING COVERAGE INSURED INSURERA Gemini Insurance Company 10833 RUBY'S HU NTiNGTON BEACH,LTD INSURER B: U Y International Umferwrfters 19817 RUBY'S DINER, INC., ETAL INSURERC; 201 SHIPYARD WAY� INSURER O: NEWPORT BEACH, CA 92663 INSURER G COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED.NOTWITHSTANDI ANY REQUIREMENT TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAYBE ISSUED OR MAY PERTAIN,THE INSURANCEAFFORDED BY THE POLICIES DESCRIBED HEREIN IS SVBJEGTTOALLTHETERMS,EXCLUSIONSAND CONDITIONS OF SUCH POLICIES.AGGREGATE UMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLANSS, WSWPOLICY NUMBER DA DD ( LIMITS LTR INSRD TYPE OP:WSURANCE 1,000,000 A X GENERAL LrASILITY VCGP022601---- 09/01116 09/D1/17 F?,CN PRRE 5 D S 100,000 C(a11MeRCIAL GENERAL LIABILITY wMED Ereonl S EXCLUDED ❑CLAws MADE O OCCUR 1 ODD,DDO �/ DEDUCTI$LE$ZS,OODPERSURY S GENETE $ 2,OOD,DDO PER OCCURRENCE 2,000,000 PRODUCTS-COMPIOPAGG S j GEN'LAGGREGATE LIMIT APPLIES PER POLICY PROJECT LOC A AUTOMOBILE LIABILITY VCGPO22601 09/01/16 09101117 COMBINED SINGLE LIMIT $ 1,4Do,Doa (Ea acdderd) ANYAUTO ALtOWNETlAUTOS BODILYINJURY S (Par person) SCHEDULED AUTOS HI REDA'To. ��T1L�Y.1�>FRY $ - NON-OVANEDAUTOS PROPERTY DAMAGE S (Per W=ident) AUTO ONLY-EAACCIDENT S GARAGE LIABILITY OTHERTHAN EAACC S ANYAUTO AUTO ONLY: AGG S 25,DOO,OOD B EXCESSJUMBRELLALIABILITY 1000061619-08 09/01/16 09/01/17 EACH OCCURRENCE 5 25,oDD,000 �I OCCUR CLAIMS MADE AGGREGATE S EXCESS OF$1,000,000 $ OVER PRIMARY ; DEDUCTIBLE $ ✓ RETENTION $ 10,000 TORY LEanrTS ER F d CO,%NSA- ON AND LITY E1.EACH ACCIDENT S �IPROPRIMBER EXCLUDED? UTtVE EL DISEASE-EA FmPLOYEE $ Ifyyees,desaibelareer APP OVER 1�LICYLIMIT $ 5PECWLPRDVISIONS below OTHER '- By; iCHAE E. AT S RbIFY OF HUNTTNGTON BEACH RE Rubys Diner located at Huntington Beach Pier,Huntington Beach,GA. The City of Huntington Beach,its officers,elected or appointed officiats,smployees agents,volunteers are included as Addltonal Insured Lessoras respects Gabi{i#y .,'etal,products and completed operations of Rubys Diner,lnc,eta[,premises owned,occupied arising out of action performed by or on behalf of Ruby's Diner,Inc or used by Rubys Diner,Inc.etal.Primary and Won-Contributory Coverage is included.Endorsements;CG2013,CG2011,CG24D4&CG2001 atbr-hed. CERTIFICATE HOLDER CANCELLATION SHOULD ANY DFTHE ABOVE DESCPJBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF.THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NDTICE TO THE CERTISCATE HOLDER NAMED TO THE LEFT, L City of Huntingtw BeachNI 2000 Main St Huntington Beach CA 92M AUTHORMEDR IN ©ACORD CORPORATION 1989 ACORD 25(2401108) 578 Policy:VCGPO22601 CG20110413 Insured Name: Ruby's Diner,Inc. Effective Date 09/01f2016 Number:40 THIS ENDORSEMENT CHANGES THE POLICY.PLEASE READ IT CAREFULLY. ADDITIONAL INSURED -MANAGERS OR. LESSORS OF PREMISES This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Designation Of Premises(Part Leased To You): All locations for which you and the additional insured have agreed in writing in a contract prior to an accurrence that causes "bodily injury", "property damage" or"personal and advertising injury". Name Of Person(s)Or Organization(s)(Additional Insured); Any person or organization when you and such person or organization have agreed in wasting in a contract,prior to an occurrence that causes"bodily injury","properly damage"or"personal and advertising injury", that such person or organization be added as an additional insured on your policy. Additional Premium: $ incl. Information nuired to complete this Schedule if not shown above will be shown in the Declarations. A_ Section H-Who Is An Insured is amended to include as an additional insured the person(s)or organization(s)shown in the Schedule,but only with respect to liability arising out of the ownership,maintenanc-c or use of that part of the premises leased to you and shown in the Schedule and subject to the following additional exclusions: This insurance does not apply to: 1. Any"occurrence"which takes place after you cease to be a tenant in that premises. 2. Structural alterations,new construction or demolition operations perfarmed by or on behalf of the person(s)or organization(s)shown in the Schedule. However: 1. The insurance afforded to such additional insured Only applies to the extent permitted by law;and 2. if coverage provided to the additional insured is required by a contract or agreement,the insurance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured B. With respect to the insurance afforded to these additional insureds,the following is added to Section III-Limits Of Insurance: If coverage provided to the additional insured is required by a contract or agreement,the most we will pay on behalf of the additional insured is the amount of insurance: 1. Required by the contract or agreemnn ;or 2. Available under the applicable Limits of Insurance shown in the Declarations; whichever is less. This endorsement shall not increase the applicable Limits of Insurance shown in the Declarations. CG 20 1104 13 1 of 1 579 CG20130413 Policy_VCGPO22601 insured Larne: Ruby's Diner,Inc. Effective Date:09/01l2016 Number.41 THIS ENDORSEMENT CHANGES THE POLICY.PLEASE READ TF CAREFULLY. ADDITIONAL INSURED - STATE OR GOVERNMENTAL AGENCY OR SUBDIVISION _ OR POLITICAL SUBDIVISION OR AUTHORIZATIONS RELATING TO PREMISES This endorsement modifies insurance provided under the following: Commercial General Liability Coverage Part SCHEDULE State Or Governmental Agency Or Subdivision or Political Subdivision: j Any State or Government Agency when you and such Agency have agreed in writing in a contract, Prior to an occurrence that causes "bodily injury", "property damage" or"personal and advertising injury",that such person or organization be added as an additional insured on your policy. information required to complete his 5cbadule if not shown above will be shown in the Declarations. A. Seddon I.I—Who Is An Insured is amended to include as an additional insured any state or governmental agency or subdivision or political subdivision shown in the Schedule,subjectto the following additional provision: This insurance applies only with respect to the following hazards for which the state or governmental agency or subdivision or political subdivision has issued a permit or authorization in connection with premises you own,rent or control and to which this insurance applies 1. The existence,maintenance,repair,construction,erection or removal of advertising signs,awnings,canopies,cellar entrances,coal holes,driveways,manholes,marquees,hoist away openings,sidewalk vaults,street banners or decorations and similar exposures;or 2. The construction,erection or removal of elevators;or 3. The ownership,maintenance or use of any elevators covered by this insurance. However. 1. The insurance afforded to such additional insured only applies to the extent permitted by law;and 2. if coverage provided to the additional insured is required by a contract or agreement,the insurance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured 1 of 2 CG 20 13 04 13 580 i Policy Number: VCGP022S01 CG 24 04 05 09 insured Name:Ruby's Dlner,Inc. Effective Date:0910112016 Number.47 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY, WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US This endorsement modifies insurance provided under the following: Commercial General Liability Coverage Part SCHEDULE Dame Of Person Or Organization:Any person or organization when you and such person or organization have agreed in writing in a contract, prior to an occurrence that causes"bodily injury",'property damage" or"personal and advertising injury",that you would provide such person or organization a waiver of transfer of rights of recovery against others to us on your policy. Information required to complete this Schedule, if not shown above will be shown in the Declarations, The following is added to Paragraph B. Transfer Of Rights Of Recovery Against Others To Us of Section IV—Conditions: We waive any right of recovery we may have against the person or organization shown in the Schedule above 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 the person or organization shown in the Schedule above. CG 24 04 05 09 Page I of 1 581 CG 20 010413 Policy:VCGPO22601 Insured Name:Ruby's Diner,Inc. Effective Date:0101/2016 Number.39 THIS ENDORSEMY-NT CHANGES THE POLICY.PLEASE READ IT CAREFULLY. PRIMARY AND NONCONTRIBUTORY OTTER INSURANCE CONDITION This endorsement modifies insurance provided under the following: Commercial General Liability Coverage Part Condition and supersedes any provision to the contrary: The following is added to the Other Insurance Primary And Noncontributory insurance This insurance is primary to and will not seek contribution from any othcx insurance available to an additional insured under your policy provided that: (i) The additional insured is a Named Insured under such other insurance;and that (2) You have agreed in wdting in a contract or agreementthis u urance would be primary and would not seek conmbution from any other insurance available to the additional insured. 1 of 1 CCi 20 010413 582 IMPORTANT If the certificate holder is an ADDITIONAL INSURED,the policy(ies)must be endorsed.A statement on this certificate does not confer rights to the certificate holder in Wu of such endorsement(s). 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 cert(ficate holder in Lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s),authorized representative or producer,and the certificate holder,nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. ACORN 25(2001168) 583 �- ", D� DATE CERTIFICATE OF PROPERTY INSURANCE 09J0112096 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Thaddeus W.Smith&Associates HOLDER.THIS CERTIFICATE DOES NOT AMEND,EXTEND OR 3151 Airway Ave,#tA-2 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. Costa Mesa CA 92626 COMPANIES AFFORDING COVERAGE (714)241-3072-Phone COMPANY ARCH SPECIALTY INSURANCE COMPANY (714)754-1391 -Fax A INSURED COMPANY RUBY'S HUNTINGTON BEACH, LTD B RUBY'S DINER, INC. ETAL COMPANY 201 SHIPYARD WAY#E c NEWPORT BEACH,CA 92663 COMPANY D COVERAGES THIS IS TO CERTIFY THATTHE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMEDABITH FOR THE POLICY PERIOD INDICATED,NOTWfTHSTANOINGANY REQUIREMENT,TERM OR CONDITIDN OFANY CONTRACTOR OTHER DOCUMENT Wm]RESPECT TO WHICH THIS CERTIFICATE ERTI I ONSANO CO ISSUEDNDITIONS OMAY SUCHPOLICIES. tNSU t Mfrs SHOWN MAY HAVE BEEN REDUCED BY PANCEAFFORDED By THE POUCIES RD Ci.A1MS IBED HEREIN IS SUBJECT TO ALLTHE TERMS, EXCL CO POUCYNUMBER DAT1E(M DDNn DATE MMODfM LTR COVERED PROPERTY LIMITS TYPE OF INSURANCE A PROPERTY ESP0051572-04 09/01116 09/01/17 BUILDING $ 5,000,0DO PERSONAL PROPERTY S CAUSES OF LOSS Included BUSINESS INCOME $ BASIC Included EXTRA EXPENSE $ F BROAD BLANKET BUILDING $ V SPECIAL LOSS OF RENTS 13LMKETPERS PROP S EARTHOUAKE COVERAGE-INCLUDED BLANKET BLDG&PP $ FLOOD PER POLICY FORM Demolition T 1,000,000 P REPLACEMENT COST 5D0,000 Uti3ity Sery S S INLAND MARINE g TYPE OF POLICY S S CAUSES OF LOSS $ NAMED PERILS s OTHER S CRIME > TYPE OF POLICY S S BOILER&MACHINERY y OTHER LOCATION OF PRWRESOBSCRIPTION OF PROPERTY e RE: RUBY'S DINER LOCATED AT HUNTINGTON BEACH PIER,HUNTINGTON BEACH,CA AP OVER AS FORM , I ay: SPECIAL CONDITIONSIOTHER COVERAGES CIIY ATTORNEY Deductibles:$10,000 Per Occurrence except:5%Earthquake-minimum$100,000:5%Flood-TWM%Mornr�lfCiin�k9d�l4 in special flood hazard areas)per unit. CERTTIFTCATE HOLDER CANCELLATION SHOULD ANY OF THEABDVE DESCRIBED POt-ICtES HE CANCELLED BEFORE TH E CITY OF HUNTINGTON BEACH EXPIRATION DATE THEREOF,THE ISSUING compANY WILL ENDEAVOR TO MAIL 2000 MAIN ST 31) DAYS WRITMA NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, HUNTINGTON BEACH,CA 92W AUT'HORi2ED R TA �ACORD CORPORATION 791}5 ACORD 2411J85I 584 Acorz�® CERTIFICATE OF LIABILITY INSURANCE D4/13J2016 HIS THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE RDED CERTIFICATE HOLDER. T CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY TAUTHORIZEDHIS O BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CON SrTiUTE A CONTRACT BETWEEN THE ISSUING tNSURER(Sj, R£PRESENTATNE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT- if the certificate holder is an AODrrIONAL INSURED, the policY(ies) must be endorsed. tf 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 Ileu o1 such endorsement(s). COMACr P RODUCER FAX PkiDNE €MC,tic 80D 592-254I Wr No,Ecth (8DD)592-0047 Hit): red Solutions E-MAIL siscerts@self)nsuredsof tltions.co m trator,California Restaurant Mlutual Benefit Corp. !7! INSURER(S)Ai FORDING COVERAGE NAIC X ineyard Ave..9102 Ontario,CA 91764 INSURER, Callfemia Restaarant>tiutual Benern cDrp--' vRa1 _ SiateNationallnsuranceCRuby's Diner,Inc,Rubys DinerAffiliate of Cattfornia Restaurant Mutual Benefit Corp.201 Shipyard Way Ste E Newport fleach,CA 9Z663 REVISION NUMBER: AGES CERTIFICATE NUMBER: COVER THIS TOCERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUEDTO THE INSURED NAMEDABOVE FORTHE POLICY PERIOD INDICATED.NOTWITHSTANDING ANYEQUIREMENT,TERM,ORCONDMON DFANY CONTRACTOR OTHER DOCUMENT WffHRESPECTTO 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 CONDIT)ONS OF SUCH POUCIFS. LIMITS SHOWN MAY HAVE SEEN REDUCED By PAID CLAIMS.c INLQ ADDL SUER _ ih. LIMITS 1 LTR TYPE OF INSURANCE INSR WJD QOULY MUMBER MM EAEii OCCURRENCE IS COMMERCIAL GENERAL UABIUTY 1 DAMAC£TDREWrED $ CLAIMS-MADE �DCCUR I PREMISES 4E.oo-vrr—I — MED EXP(Arty one personl 5 � PERSONAL&ADY INJURY O $ GENERALAGGREGATE S GEN'L AGGREGATE UMRAPPLIES PER: { PRODUCTS-COMP/OP AGG S . ` POLICY DPROJECT❑LOC 4 S WMB[NFD SINGLE lIMiT OTHER AUTOMOBILE LIABIUTY BODILY INJURY(Per person) $ ANYAUTO ANY OWNED SCHEDULED ^ ❑ BDOtLY INJURY(Per accident) $ AUTOS RUTOS Eli PROPFJRY DAMAGE $ NON-OWNED Vw-cident) HIRED AUTOS AIM Is EACH OCCURRENCE S UMBRELLA UAB OCCUR AGGREGATE EXCESS UAV CLAIMS-MADE $ DED RETENTIONS X VJC START- oTrF WORKERS COMPFJ`tSJLT1ON TORY Limns ER AND EMPLOYERS'UARRUTY YIN ANY MOPRIETOR/PARTNERIDLECUIIVE D N/A 4517A933 Di/0112016 12/3112015 E.L EACH ACaDDn' S1,DDD,00D.0fl A OFFICE/MEMBER EXCLUDED? f.L DISEASE-EA EMPLOYEE $1000,OD. {Mandatory In NH) LL DISEASE.POLICY UM IT SI,D00,000-DO If Yes,desolbe wider OFSCRIPr1ON OF OPERATIONS below l 01/D1J2U16 01/01J2017 EXCESS WORKERS COMPENSATION I NDE-fl812463-YS B Applicable to WCStatotory Umits and Employers AND EMPLOYERS LIABILITY I Ua T Umits. ES(AttachACORD mre ID1,AdditionRl Ranerks—,edulC,tfuspacelsrequlred DES>3tiPTEONOFLIPERATiOK51LOCATION/VEHICL f , I All Canfomia Operations waiver oFSubrogationapplies-see attached" BY: MICHA L E.GATES older of Master CerNScate 'Complies with the requirements of the Director of Industrial Relations under the previsions of Sections 370B to37D5,lndusrve,of the tabor re OFF Hof UE�NG�TON BEACH of Consent to Self-Insure No-4517 CANCELLATION CERTIFICATE HOLDER � City of Huntington Beach SkOU10 ANY OF THE ABOVE oE5•LTiIt3ED PDUCSES 8E CANCEL l m BEFORE THE EXPIRATION DATE -THEREOF, NOTICE WILL BE D£UVERED IN 2000 Main St Huntington Beach,,CA 42648 ACCORDANCE WTTK THE POLICY PROVISIONS- , REPRESEKTATIVE A.Seegmitier ��-;i 01986-2010 ACORD CORPORATION. All rights reserved ACORD 25(ZO14101) The ACCORD name and logo are registered marks of ACORD 585 WORKERS COMPENSATION AND EMPLOYERS LIABILIN California Restaurant Mutual Benefit Corp_ WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS We have the right to recover our payments from anyone liable for a covered injury. We will not enforce our right against the person or organization named in the schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) This agreement shall not operate directly or indirectly to benefit anyone not named in the Schedule. Schedule Name of Person or Organization: City of Huntington Beach 20Do Main St Huntington Beach,CA 92648 policy No.: 4517-0933 Insured: Ruby's Diner,Inc. Ruby's Diner 586 City Of Huntington Beach 2000 Main Street + Huntington Beach, CA 92648 (714) 536-5227 * `,\7N,\n,\r.huntingtonbeachca.gov Office of the City Clerk 7).196l. Robin Estanislau,City Clerk I September 23, 2016 i Ruby's Huntington Beach, Ltd. ATTN: Doug Cavanaugh 201 Shipyard Way, Suite E Newport Beach CA 92663 Dear Mr. Cavanaugh: Enclosed for your records is a fully executed copy of the "Lease Between the City of Huntington Beach and Ruby's Huntington Beach, Ltd. For Operation of a Restaurant on the Huntington Beach Pier," approved by the Huntington Beach City Council on September 19, 2016. Sincerely, i , Robin Estanislau, CMC City Clerk RE:pe Enclosure Sister Cities: Anjo, Japan ♦ Waitakere, New Zealand 587 ATTACHMENT #6 EXHIBIT C-2 PRC 6616.1 SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No.TBD dated, June 21, 2018, the herein sublease between the City of Huntington Beach and Let's Go Fishing, under a portion of State Lease PRC No. 6616.1, is hereby approved. BY: ROBERT BRIAN BUGSCH, Chief Land Management Division 588 ' City of Huntington Beach ' ` 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF BUSINESS DEVELOPMENT Business Development • Housing • Real Estate 714.536.5582 www.hbbiz,com fax - 714.375.5087 t ' 2ECIEIVED City o,.FiLincington Beach August 13,2014 A'j,' 12014 f'-`":e of 'evelopmant Marian Johnson "Let's Go Fishing" Store 11734 Forest Grove Street El Monte, CA 91732 Subject: Lease Agreement extension between the City of Huntington Beach and Marian Johnson, DBA Let's Go Fishing and Surf City Snack Bar Dear Mr.Johnson: The City of Huntington Beach("City")has interest in extending the lease term pursuant to the current Lease Agreement("Agreement")between the City and Let's Go Fishing Store. The current Agreement will expire on November 16, 2014. However the Lease Term may be extended one additional five (5)year period upon mutual consent of the City and Lessee(pursuant to section 5 of the Agreement). If you are interested in extending the lease(all other terms and conditions remain the same)for the additional five (5) year period,please sign below and return this letter in the enclosed envelope. If you have any questions, please contact Micheal Green,Real Property Coordinator at (714) 536-5224. Sincerely, Kellee Fritzal Deputy Director "iann Spj01 C: Dave Dominguez,Facilities and Development Manager Micheal Green,Real Property Coordinator Sister Cities:Anjo,Japan Waitalzere,Neu,Zealand 589 City of Huntington Beach ' ` 2000 MAIN STREET CAOFORNIA 92648 _ DEPARTMENT OF BUSINESS DEVELOPMENT Business Development • Housing • Real Estate Fen.ti�s*_ 714.536.5582 www.bbbiz.com fax - 714.375,5087 2EC.`TVED City O'Hui1iington Beach August 13,2014 i` `� 2014 r`°:^e of BUE_:?_ . IeVelopment Marian Johnson "Let's Go Fishing"Store 11734 Forest Grove Street El Monte, CA 91732 Subject: Lease Agreement extension between the City of Huntington Beach and Marian Johnson,DBA Let's Go Fishing and Surf City Snack Bar Dear Mr.Johnson: The City of Huntington Beach("City")has interest in extending the lease term pursuant to the current Lease Agreement("Agreement")between the City and Let's Go Fishing Store. The current Agreement will expire on November 16,2014. However the Lease Term may be extended one additional five(5) year period upon mutual consent of the City and Lessee(pursuant to section 5 of the Agreement). If you are interested in extending the lease (all other terms and conditions retrain the same) for the additional five(5) year period,please sign below and return this letter in the enclosed envelope. If you have any questions, please contact Micheal Green,Real Property Coordinator at (714) 536-5224. Sincerely, X/av& - Kellee Fritzal Deputy Director "iann 4 Jt C: Dave Dominguez,Facilities and Development Manager Micheal Green,Real Property Coordinator Sister Cities:Arzjojapaiz -Waitakere,NewZealarad 590 7- - ��G3�7Z Lt Council/Agency Meeting Held: / (o OD Deferred/Continued to: &624�� A roved Q Conditionally Approved ❑ Denied CeI&fkXSignatqe Council Meeting Date: 11/16/2009 Department ID Number: ED 09-72 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY C CIL MEMBERS SUBMITTED BY: FRED A. WILSON, CITY ADMINIS OR PREPARED BY: STANLEY SMALEWITZ, DIRECTO OF ECONOMIC DEVELOPMENT JIM B_ ENGLE, DIRECTOR OF COMMUNITY SERVI SUBJECT: APPROVE LEASE AGREEMENT WITH MARIAN JOH ON, DBA LET'S GO FISHING AND SURF CITY SNACK BAR, LLC. FOR USE OF A NEWLY CONSTRUCTED PIER BUILDING Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachments) Statement of Issue: The City Council is asked to approve a five-year Lease Agreement with Marian Johnson, DBA Let's Go Fishing and Surf City Snack Bar, LLC., for the use of the newly constructed 800 square foot pier building to operate a bait and tackle retail store as well as a snack bar. Funding Source: Not applicable. Recommended Action: Motion to: Approve and authorize the Mayor and City Clerk to execute the Lease Agreement between the City of Huntington Beach and Marian Johnson, DBA Let's Go Fishing and Surf City Snack Bar, LLC. Alternative Action(s): Recommend staff to renegotiate the Lease Agreement or do not approve the Lease Agreement. 1 REQUEST FOR CITY COUNCIL .ACTION MEETING DATE: 11/16/2009 DEPARTMENT ID NUMBER: ED 09-72 Analysis: In May 2007, City Council approved the use of Redevelopment funds to construct three permanent concession buildings on the pier. The permanent buildings will replace three 10' x 32' portable, modular units. The modular unit closest to Ruby's Diner has been occupied by Let's Go Fishing since 1998. Each concession has operated under a temporary special permit and has paid a nominal fee on a yearly basis. They have also paid their own utilities and lease on their modular units. Direction was given by City Council in January 2009 to have staff proceed in negotiating lease agreements with the three current pier concessionaires. Economic Development Staff has surveyed surrounding pier retail areas to determine a market rate rent for the newly constructed pier buildings. Recommended market rates based on the survey were presented to the Economic Development Committee and approved. The proposed Let's Go Fishing and Surf City Snack Bar, LLC rent structure is as follows: A minimum base rent of$0.75 per square foot for a total of$600.00 per month. Base rent will increase by a percentage equal to the Los Angeles-Anaheim-Riverside All Urban Consumer Price Index (CPI), no less than 3% and not to exceed 5% per year. In year one of operations, in those months where 5% of gross receipts exceeds the monthly base rent, lessee shall pay 5% of all gross receipts. In each subsequent year, after year one, in those months where 10% of gross receipts exceeds the monthly base rent, lessee shall pay 10% of all gross receipts. The lower base rent for Let's Go Fishing and Surf City Snack Bar, LLC is due to the further distance from the shoreline. Let's Go Fishing will be able to expand and add a "Surf City" Snack Bar. Due to the current Lease between the City and Ruby's Diner, only the following items will be allowed to be sold at the snack bar: soft drinks, hot beverages, bottled water, juices, pre-packaged snacks, muffins, cookies, candy, and pre-packaged sandwiches. The City Attorney's Office has prepared a City standard concessionaire Lease Agreement for a term of five (5) years with one (1) option to extend for an additional five (5) years thereafter. The operator has reviewed and approved the proposed Lease Agreement. Strategic Plan Goal: Maintain and Improve Public Improvements. Enhance Economic Development. Environmental Status: Not applicable -2- 1113/2009 2:10 PM 2 REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 11/16/2009 DEPARTMENT (D NUMBER: ED 09-72 Attachment(s): 1. Lease Agreement between the City of Huntington Beach and Marian Johnson, DBA Let's Go Fishing and the Surf City Snack Bar, LLC. 3- 11/3/2009 11:22 AM ATTACHMENT # 1 LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND MARIAN JOHNSON, DOING BUSINESS AS LET'S GO FISHING AND SURF CITY SNACK BAR, LLC THIS LEASE (the "Lease") is made and entered into effective IVOV , 2009 by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California("City") and Marian Johnson, doing business as Let's Go Fishing and Surf City Snack Bar, a limited liability corporation ("Lessee"). WHEREAS, City wishes to lease certain real property (the "Property"), consisting of a bait and tackle shop, along with a snack shop on the pier in the City of Huntington Beach, California, 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 bait and tackle shop and a snack shop on the pier 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. A map depicting the Premises is set forth in Exhibit "A", which is attached hereto and incorporated I 09-2121/35728 595 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 Tight 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- 2 09-2i21l35728 596 portion thereof Lessee also agrees to cooperate and provide any documentation necessary for City to obtain any such financing. (d) This Lease is subject to pre-existing contracts, leases, licenses, easements, encumbrances and claims affecting the Premises and it is made without warranty by City of title, condition or fitness of the land for the stated or intended use. SECTION 4. TIME OF ESSENCE Time shall be of the essence of this Lease and each and all of its terms, covenants or conditions in which performance is a factor. SECTION 5. TERM This Lease shall commence at 12:01 a.m. on�y lb , 2009, for a five (5) year term, which shall end at 11:59 p.m. on IVOV , 2014. -The term of this Lease may be extended for one additional five (5) year period upon mutual consent of City and Lessee evidenced in writing. City may withhold consent to extend this Lease with or without cause, in which case this Lease shall terminate. 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. 3 09-212I/35728 597 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, 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. 4 09-2121/35728 598 SECTION 10. RENT Lessee agrees to pay to City as rent (the "Rent") for the use and occupancy of the Premises a minimum base Rent of$0.75 a square foot for a total of$600.00 a month. The base Rent will increase on a yearly basis by a percentage equal to the Los Angeles-Riverside-Orange County All Urban Consumer Price Index (CPI) in an amount not less than three (3) percent nor more than five(5) percent per year. In the first year of operation, in those months where five (5) percent of gross sales receipts exceeds the monthly base rent, Lessee shall then pay five (5) percent of all gross receipts instead of basic rent. In each subsequent year after the first year, in those months where ten (10) percent of gross sales receipts exceeds the monthly base Rent, Lessee shall then pay ten(10)percent of all gross sales receipts as Rent instead of the base Rent. Lessee shall pay the Rent monthly to City at the City Treasurer's Office, P.O. Box 711, Huntington Beach, California, 92648, or at such other place or places as City may from time-to- time designate by written notice delivered to Lessee. Lessee shall pay the Rent, which must be received by the City Treasurer within fifteen (15) calendar days after the end of the month for which the Rent is being paid, or on the next business day if the fifteenth day falls on a weekend or holiday. SECTION 11. LATE CHARGE AND PENALTY If the Rent is not received by the City Treasurer within twenty (20) calendar days after the end of the month for which the Rent is being paid, or the next business day if the twentieth day falls on a weekend or holiday, Lessee shall pay the following late charge and penalty: (1) a late charge of ten percent (10%) shall be applied to any outstanding balance after any payment hereunder is due but unpaid; and (2) one and a half percent (1 1/%) penalty per month shall be added for each month the Rent is due but unpaid. With respect to any other payments required 5 09-2121/35728 599 by Lessee, a -one and a half percent (1 ih%) 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 ar 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 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. 6 09-2121/35728 600 (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 the first day of each month. 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 7 09-2121/35728 601 (e) Any sales resulting in a cash or credit refund to a customer in the ordinary course of business. (f) Any sales of merchandise to City employees which take place at City Hall-, and (g) Any sales of merchandise to City employees during special events as approved in advance by the Director of Community Services. 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 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, 8 09-2 1 2 1/3 5 728 602 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 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 9 09-2121/35728 603 forth in Section l I 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 lb. SECURITY DEPOSIT Upon execution hereof, Lessee shall pay and maintain at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, a.security deposit with City in a sum of not less than Two Thousand Five Hundred Dollars ($2,500.00) to guarantee all of Lessee's obligations, liabilities, duties and responsibilities under the. Lease, including, without limitation, the-repair and maintenance of the Premises as provided herein. Such deposit shall be in the form of a cash bond or an assignment of certificate of deposit (the "Cl)") or savings account to City, and shall be provided to the City Treasurer. The form of any 10 0 9-2 12 113 57 2 8 604. such security deposit shall be approved by the City Attorney and the City.Treasurer. No interest shall accrue on cash deposits to the benefit of Lessee, but interest shall accrue on a CD or savings account and shall be paid to Lessee under the terms of the CD or savings account. Lessee shall send a copy of each renewal of the CD to the City Treasurer to ensure that City has the records of each active deposit account. SECTION 17. 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. Lessee shall only sell fishing, bait and tackle related merchandise at the bait and tackle shop, and only soft drinks, hot beverages, bottled juices, bottled water, juices, pre-packaged snacks, muffins, cookies, candy and pre-packaged sandwiches at the snack shop. The bait and tackle shop, and snack shop, shall be in operation for a minimum of three hundred (300) days during the calendar year and for a minimum of four (4) hours a day. The minimum number of operating days and hours may be modified due.to weather conditions or unforeseen events. Any 11 . 0 9-2 12 1/3 5 72 9 605 modification to this minimum number of days must be approved in advance in writing by the Director of Community Services or his or her designee. Except as permitted in advance in writing by City;all foods and beverages shall be sold in disposable paper or plastic containers. No pull-top cans or Styrofoam containers are to be vended or dispensed from the Premises unless pre-approved.in writing by City. Lessee, wherever feasible, shall eliminate the use-of non-recyclable containers and plastics. City may from time to time review the items sold and containers or utensils used or dispensed by Lessee. City reserves the right to prohibit the sale or use of non-recyclable containers or plastics. City in its sole discretion reserves.the right to prohibit Lessee's sale, provision.or rental of any item'or service rendered or performed, which it deems objectionable or offensive,,beyond the scope deemed necessary for proper service to the public; inappropriate for sale, provision or rental by the Concession, or of inferior quality. SECTION 18. INDEMNIFICATION DEFENSE AND HOLD HARMLESS AGREEMENT Lessee hereby agrees to protect, defend,indemnify and hold. harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all ` claims, damages, Iosses, 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 12 09-2 12 1/3 5 728 606 obligations contained in this Lease by Lessee;its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee shall- hold all Trade Fixtures, personal property and trade inventory on the Premises at the sole risk of Lessee and'save City harmless from any loss or damage thereto by any cause whatsoever, except such loss- or damage which was caused.by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall applyto 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 19. WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE Lessee acknowledges awareness of Section 3700 el 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 20. 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 13 09-2 1 2 1/3 572 8 607 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 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 21. 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 14 09-2121/35728 608 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 he 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 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 he 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. 15 09-2 1 2 1/3 5 72 8 609 SECTION 22. 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 23. CERTIFICATES OF INSURANCE;ADDITIONAL INSURED ENDORSEMENTS Prior to commencement of this. Lease, Lessee shall famish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease; these certificates shall: (a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in'force; and (c) shall promise to provide that such policies shall not be canceled or modified without thirty(30) days'prior written notice of City;however ten(10) days' prior written notice in the event of cancellation for nonpayment of premium, which 10-day notice provision shall not apply to property insurance in Section 22 above. Lessee shall maintain the foregoing insurance coverages in force during the entire term of the Lease or any renewals or extensions thereof or during any holdover period. The requirement for carrying the foregoing insurance coverages shall not derogate from Lessee's defense, hold harmless and indemnification obligations as set forth in this Lease. City or its representatives shall at all times have the right to demand the original or a copy of any or 16 09-2121/3572-8 610 all the policies of insurance. Lessee shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. SECTION 24. INSURANCE HAZARDS Lessee shall not commit or permit the commission of any acts on the Prerises 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 25. MAINTENANCE OF PREMISES;TENANT IMPROVEMENTS City's maintenance responsibilities of the Premises shall be limited to maintaining all sewers and drain lines, building exterior and roof repairs. Except as set forth in the preceding sentence, Lessee agrees to maintain the Premises in good order and repair, at Lessee's sole cost and expense, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, pursuant to. the City's maintenance standards. A copy of the quarterly evaluation summary sheet setting forth the City's maintenance checklist is attached as Exhibit 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 on the Premises. Lessee's obligation includes, without limitation, maintaining and operating the Premises 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 17 09-2121/35728 - 611 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. Lessee shall maintain ADA access around the entire building. 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 rtrst resistant paint no less than once every other year. Any and all graffiti;on the Premises shall be removed by Lessee, at its sole cost and expense, within forty-eight (48) hours of Lessee receiving notice thereof or of Lessee becoming aware of such graffiti: In addition, with.or without notice from City; Lessee shall, at its sole cost and expense, repair and/or replace any broken glass within forty-eight (48) hours of its becoming broken, regardless of cause, except by fault of City. Except as provided above for graffiti and broken glass, Lessee, at its sole cost and expense and with or without notice from City, shall repair and/or replace, all damage or'destruction.to the Premises caused by act(s) of vandalism as soon as possible but in no event later than fourteen (14) days after the date such damage or, destruction occurred. Lessee, at its sole cost and expense, shall repair and/or replace all other damage or destruction to the Premises, regardless of cause, except by fault of City. Lessee shall comply with all written notices served by City with regard to the care and maintenance of the Premises. Any written notice hereunder shall specify the work to be done and the period of time deemed to be reasonably necessary for completion of such work. Should 18 0 4-2 1 2 1/3 5 728 612 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. LESSEE shall complete all interior Tenant Improvements within thirty (30) calendar days of completion of construction of the pier building, including without limitation, flooring, ceiling., kitchen, fixtures,lighting, seating, signage, and counter areas. SECTION 26:RENT CREDIT A Rent credit may be available for some or all of any tenant improvements performed by Lessee upon prior written approval by the Director of Community Services or his or her designee. The terms of payment of any Rent credit will be determined by the Director of Community Services of City. City in its sole discretion may decide to give Lessee other- rent credit if Lessee undertakes (1) any repair or maintenance obligation of City under this Lease, or (2) any work City in its sole discretion deems necessary and appropriate. Prior to Lessee 19 09-2121/35728 613 undertaking any such work, City must agree in writing to the amount of and procedures for the rent credit,the work to be done by Lessee and the cost of such work. SECTION 27. 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 28. TAXES This Lease may create a possessory interest in property, which is subject to taxation. In the event that such possessory interest is`created, Lessee agrees to be subject to the payment of and to pay taxes levied on such interest, at its sole cost and expense. Lessee also agrees to pay, at its sole cost and expense,before they become delinquent all other lawful taxes, assessments or charges, which at any time may be levied by any governmental agency including, without limitation, the State, County, City or any tax or assessment levying body upon any interest in this Lease, or any possessory right which Lessee may have in or to the Premises, by reason of Lessee's use or occupancy thereof or otherwise, as well as all taxes, assessments-, and charges on Trade Fixtures, personal property.and trade inventory in, on, or about the Premises. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. Lessee shall comply with all laws, regulations and ordinances regarding the collection-of taxes due a government agency. 20- 09-2121/35728 614 SECTION 29. 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 30. UTILITIES AND SERVICES 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. Lessee shall use good energy practices as described in the State of California Flex Your Power Best Practice Guide, SECTION 31. 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 32. 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, 21 09-2121/35728 615 painted or affixed upon the Premises. No outdoor sales are allowed by Lessee unless prior written'approval is obtained from the Director of Community Services or his or her designee: All outdoor displays or-"banners must first be approved in writing by the Director of Community Services or his or her designee. 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 33.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 22 09-2121/35728 616 I ` , satisfactory to City that the proposed, assignee, encumbrancer, occupier or user, sublessee or.other transferee has suitable financial strength, experience and character for operation and control of the Premises and the Concession and that the use of the Premises by the proposed assignee, encumbrancer, occupier or user, sublessee or other transferee is consistent with that specified herein; and is commercially reasonable. Any proposed assignee, encumbrancer, occupier or user, sublessee or-other transferee shall agree to abide by the terms and conditions of the Lease including, without limitation, all the obligations, liabilities, duties and responsibilities of Lessee, and other conditions imposed upon it pursuant to law. An approval by City to one assignment, encumbrance, occupation or use,. sublease or other transfer shall not be deemed to be an approval to any other assignment;encumbrance,,occupation or use, sublease or.other transfer. (c) Voluntary assignment defined. Except as otherwise expressly provided herein, any dissolution, merger, consolidation or reorganization of Lessee, or the sale or 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 23 09-2121/35729 617 follows: (a) an "Affiliate"is any corporation which directly or indirectly controls or is controlled or is under common. control with Lessee (for this purpose, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction .of the management and policies of such corporation, whether through the ownership of voting securities or by contract or otherwise), (b)a"Subsidiary" shall mean any corporation or partnership not less than twenty- five percent (25%) of whose outstanding stock shall, at the time, be owned directly or indirectly by Lessee and which is at least as creditworthy as Lessee, and (c) a "Successor" shall mean a corporation or partnership in which or with which Lessee is merged or consolidated, in accordance with applicable statutory provisions for merger or consolidation of corporations, or a corporation or partnership acquiring a substantial portion of the property and assets.of Lessee. SECTION 34. 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. 24 09-2 12 1/3 572 8 618 SECTION 35. 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 sixty-five (65) days in a calendar year, minus any days of closure of the Concession caused by City, shall be deemed an abandonment of the Premises. (d) Lessee's violation of Section 19 (Indemnification, Defense and'Hold Harmless Agreement), Section 34 (No Assigning, Subleasing or Encumbering), Section 47 (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. 25 09-2 1 2 113 5 728 619 (f) Lessee's failure to observe of 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 rizore than thirty (30) days are reasonably required for its-cure, then Lessee shall not be deemed to be in Default if Lessee notifies City of the length of the additional time required to cure and -receives City's written approval of the additional time required, which approval will not be unreasonably withheld, and commences such cure within such thirty (30) day period and diligently proceeds with such cure to completion during such additional time period approved by City. SECTION 36. 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 thename 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 26 09-2 1 2 1 65728 620 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 theaccount 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, 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: 27 04-2121/35728 621 (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 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 Ioss 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 28 09-2121/35728 622 (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 36(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 36(a)(2)(C) above, the"worth at the time of the award" shall be computed by discounting such amount of 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 36(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 Iocation at the sole cost,expense and risk of Lessee, and for the account of and in the name of Lessee. (b) Election of Remedy. The election of one' remedy 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. 1f City at any time, by reason of such Default by Lessee, 29 09-2121/35728 623' 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 I174 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 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 37. 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 30 09-2 12 1/3 5 72 8 624 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 38. 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 39. CITY'S DEFAULTS/LESSEE'S REMEDY In the event City fails to perform any material obligation of City under the Rental Agreement 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 Rental Agreement 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 Rental Agreement, including,without limitation,paying any Rent due up to the time of termination and surrendering the Premises pursuant to Sections 53 and 54 below. This remedy of termination is Lessee's.sole and exclusive remedy for a default by City. - SECTION 40. 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. 31 0 9-2 1 2 1/3 5 72 8 625 SECTION 41: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 42. 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 43. INSPECTION OF PREMISES Upon at least twenty-four(24)hours advance written, verbal or electronic notice given by City to Lessee, Lessee shall permit City or City's agents, representatives or employees to enter the Premises at all reasonable times for the purpose of inspecting, investigating and surveying the Premises to determine whether Lessee is complying with the terms of this Lease and for the- Purpose of doing other lawful acts that may be necessary to protect City's interest in the Premises or to perform City's duties under this Lease. City shall make quarterly physical inspections of the Leased Premises and may direct that interior maintenance or outdoor painting 32 09-2 1 2 1/3 5 72 8 626 repairs are to be performed where such work is.necessary to protect the Premises or to.provide a clean, attractive and well-maintained premise. Lessee shall perform those maintenance and repairs which they are responsible for within thirty (30) calendar days. 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 44. RESERVED SECTION 45. 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 46. 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 33 09-2121135728 627- 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 ariy such Hazardous Substance and any damage, loss,-or expense or liability resulting from any such Hazardous Substance including, without limitation, all attorney's fees, costs and penalties incurred as a result thereof except any . release caused by the sole negligence or willful misconduct of City. .Lessee will conduct all defense at its sole cost and expense and City shall approve selectiori 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 47. 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 nianner that would directly or inferentially reflect upon or 34 09 2121/35728 628 question the acceptability of the patronage of any person because of race, religion, color, ancestry, sex, age, national origin or physical handicap. In the performance of this Lease, Lessee shall not discriminate against any employee or. applicant for employment, because of race, religion, color, ancestry, sex,.age, national origin or physical handicap. Lessee shall take affirmative action to ensure that applicants are employed and that employees are treated during employment, without regard to their race, religion, color, ancestry, sex, age, national origin or physical handicap. Such action shall include, without limitation, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including; without limitation, apprenticeship_ Lessee shall post in conspicuous places, available to all employees and applicants for employment,,notices setting forth the provisions of this Section. 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 pair 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 35 09-212IB5728 629 sustained by City by reason thereof shall be borne and paid for by Lessee, -at its sole cost and expense. SECTION 48. SALE OF ALCOHOLIC BEVERAGES AND ENTERTAINMENT PROHIBITED Notwithstanding anything.to the contrary, the sale or provision of alcoholic beverages and/or live entertainment in, on, or from the Premises is expressly forbidden, unless expressly permitted in writing by City in advance. For any proposed sale or provision of alcoholic beverages, Lessee must first obtain written City approval prior to submitting any request for approval to the Alcohol Beverage Commission- SECTION 49. 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 50. 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 36 09-2121135728 630. 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 51. 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: (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 37 09-212I/35728 631 as necessary to restore the Premises or for any other such purpose(s) as City sees fit. In addition, if Lessee elects to.termiilate 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 55 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 52. NO ABATEMENT OF RENT DURING REPAIR WORK The Rent shall not be abated for the time Lessee is prevented from using the whole or a portion of the Premises. In addition, Lessee shall not be excused from the payment of taxes, .insurance or any other obligations for the time Lessee is prevented from using the whole or a portion of the Premises. SECTION 53. 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 properly; compensation .for the value of any of Lessee's trade inventory; .38 09-2121/35729 632 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 54. RELOCATION AND ASSISTANCE BUSINESS GOODWILL AND LEASEHOLD BONUS VALUE Upon expiration or termination of this Lease for any reason, but excluding eminent domain, Lessee shall not be entitled to any relocation rights or benefits, business goodwill or bonus value attributable to this Lease, and.Lessee expressly waives any claim to the same. SECTION SS.'QUITCLAIM DEED Upon expiration or termination of this Lease as provided for herein, 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 39 09-2121/35728 633 deliver to City any other instrument requested by City as necessary to perfect City's right, title and interest to the Premises. SECTION 56. RESTORATION AND SURRENDER OF PREMISES/TITLE TO IMPROVEMENTS TO THE BUILDING On expiration or termination of this Lease, 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 the building 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 to the building,. at Lessee's own risk and cost and expense. If required.by City to do so, in removing any such Improvements to the building, 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 40 09-2121/35728 634 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 ally 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 57. FORCE MAJEURE-UNAVOIDABLE DELAYS Should the performance of any act required by this Lease to be performed by either City or Lessee be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, restrictive governmental laws or regulations, or any other cause except financial inability not the fault of.the party required to perform the act, the time for performance of the act shall be extended for a period equivalent to the period of delay and performance of the act during the period- of delay shall be excused. Provided, however, that nothing contained in this Section shall excuse the prompt payment of the Rent or other consideration by Lessee as required by this Lease or the performance of any act rendered difficult solely because of the financial condition of the party, City or Lessee, required to perform the act. SECTION 58. CITY'S OPTION TO CLOSE THE PREMISES City may close the Premises without liability and without advance notice to Lessee therefore at any time as City in its sole discretion deems necessary for the.protection of life, limb 41 09-2i2l/35728 635 or property, or for public health, safety or welfare purposes, or other City activities or special events, or upon reasonable notice to effect any repair, remodeling or rebuilding deemed necessary by City in its sole discretion. City retains the right to close the pier for emergencies without any notice to Lessee, for any extent of time and without compensation or credit. In those cases where there is a City-planned pier closure, Lessee will be-given a two (2) business week notice. SECTION 59. DELIVERIES OF SUPPLIES The Director of Community Services of City may establish the days and times deliveries of supplies may be made and advise Lessee in writing thereof. SECTION 60. EMPLOYEE PARKING All employee parking shall comply with Huntington Beach Municipal Code Section 13.08.290(d)and(g). SECTION 61. CONFLICT.OF INTEREST - Lessee warrants and covenants that no official or employee of City, nor any business entity in which an official or employee of City is interested, (1) has been employed or retained by Lessee to solicit or aid in the procuring of this Lease; or (2) shall be employed by Lessee in the performance of this Lease without the immediate written divulgence of such fact to City. In the event City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City, Lessee, upon request of City, shall terminate such employment immediately. For breaches or violation of this Section, City shall have the right both to terminate this Lease without liability and, in its discretion, recover the full amount of any-such compensation paid to such official, 42 09.2121/35728 636 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 62. 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 -(I) 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 Marian Johnson ATTN: Director of Community Services dba Let's Go Fishing and 2000 Main Street,P.O. Box 190 Surf City Snack Bar, LLC Huntington Beach,CA 92648 11734 Forest Grove St'. El Monte CA 91732 SECTION 63. 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, Federal, State, county or municipal, relating to Lessee's use and.occupancy of the Premises and/or operation of the Concession whether such statutes, ordinances, regulations and requirements be-now in force or hereinafter enacted. This Lease is expressly subject to the laws, regulations and policies of City. Lessee shall deliver to City a copy of any notice from any governmental entity-received by Lessee regarding any alleged violation of law regarding the Lease, Premises or the Concession or from any person allegedly entitled to give notice under any conditions, covenants, or restrictions binding.or affecting the Premises. The judgment of any court of competent jurisdiction, or the- 43 09-2121/35728 637 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 64. 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 65. SURVIVAL Terms and conditions of this Lease, which by their sense and context survive the expiration or termination of this Lease, shall so survive. SECTION 66. MODIFICATION No waiver or modification of any language in this Lease shall be valid unless in writing and duly executed by both parties.- 44 09-2 1 2 1/3 5 72 8 638 SECTION 67. 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 68. 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 69. 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 70. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Lease or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non-prevailing party. 45 09-2121/35728 .639 SECTION 71. LEGAL SERVICES SUBCONTRACTING PROHIBITED Lessee and City agree that City is not Iiable 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 72. GOVERNING LAW This Lease shall be governed and construed in accordance with the laws of the State of California. SECTION 73. 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 74. ENTIRETY The parties acknowledge and agree that they are entering into this Lease freely and voluntarily following extensive arm's length negotiations, and that each has had the opportunity to consult with legal counsel prior to executing this Lease. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party, or anyone acting on that party's behalf, which are not embodied in this Lease, and that that party has.not executed this Lease in reliance on.any representation, inducement, promise, agreement,warranty, fact or circumstance not expressly set forth in this Lease. The Lease, and the attached-exhibits, contain the entire agreement between the parties respecting the subject 46 09-2121/35728 640 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. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any-injuries or damages to CITY in the event that such authority or power is not, in fact,held by the signatory or is withdrawn. MARIAN JOHNSON, Doing Business As CITY OF HUNTINGTON BEACH, a Let's Go Fishing and Surf City Snack Bar,a municipal corporation of the State of limited liability corporation California 9&By: a-(-'i an ��`�1��,..c7 K• Mayor print n s �,+ • ITS: (circle one)Chairman/President[Vice President _ Partner I y Clerk AND INITIATED AND APPROVED:- . By: print name Di c r of Community Se es ITS: (circle one)Chairman/President/Vice President Partner Director of Economic De went REVIE APPROVED: APPROVED AS TO FORM- bt i y Administrator City Attorney 01Co 1�1 ti71c�q 47 09-2121/35728 641 n 3Tj J IMN � .�� �7..�L4n yr��i i'ti Si ?_ r. Ta• �_ ..t - ,� i�'t'+ _ r» s.•N GtNK� V• i�� i O a t.y.{y}'.�tk�yFiy R.''F�a"�'Y� ^ �t� .,_zy+ �Nq�yF t�4�IC •� y� I •a f _i - �+ P NEZ �s''g'�• S+':'max-+-t'�9�'r�Q'es'�3� � �'.T't�+ r`?-< #�•, ;y.� i'�� 'h� ice?�3•t+.�•�S•d��, p 4Yj'�� ''."�.• ••C�. 1+ �t ! t to �.L T` �> 9+q- , / �a ''� �-•+.� �{!i `'fit' �• *�W: r`�� . • 1 'rt ^f�: „t1a�Y v� 4t' S. ._f. t. r 3e{''' yC •t��y •.;,, .t F.R! + r!�iEFice.+!�► �r/o ! �" _ �, � _ S y "-� f ;rr} a }. rti� f n��h'� I)g1.�` yr ,/, ,.•,K.1' --��",�ty.�t� t # 33 it � a. r b: s ,Y .�c xt r•. a y tr .'�•r'k�!� +`� 'ry ��,,s.P'r,4�°`���!4:.r��R��r�t6']�-,.inv � 'j• -?Y;„ ''r �. cr.,1�.-� "Z-a c�'. �.•, � - �' Ti .+t,.t•�4iFv Z +! a °il` :.�:.�R•a' e k s�a:GS _ � .'.� ..! 9: ,+}- +�fl dal �b�}.7'(''•i'-'.d � '' !K,f° S� y��„�.� -�dei� ti t ` �' �� � S7t�fff�. / .����• �3t=-i4 r- 3 +r!-�w � s` a jj�taa' �g ' c $� rr ► 7v 54— kTi ..4_t� :�l..�sr:?c:,al.. s.af :_�,....�l4. .�,m�LA. �• c•,4wz ..4. -..x.'.�: Exhibit"B" Quarterly Evaluation CITY OF HUNTINGTON Quarterly Evaluation SUMMARY SHEET Date Inspected: By: Representative: Area OK Needs Attention GENERAL Doors & Locks Exterior Walls Graffiti Removai Interior Walls Removal of Bird Droppings Restrooms (Plumbing) Roof Rust Signa e Trash Trim Windows Other COMMENTS: 643 u INSURANCE AND INDEMNIFICATION WAIVER —�un = ;� IU1�'�I-Fl�C;i4TIO'N REQIJE FF iiLct iv L u ' City of Huntington T1,M NOV 12 2009 1. Requested by: Keliee Fritzai)Eco'M,6t iic�'Development NOV 1 0 2009 %.uy n«vi iinY a vnl�o 2. Date: November 10, 2009 }iUMA RRGSQURCC-S 3. Name of contractor/permittee: Let's Go Fishing/Surf City S ADMINISTRATION 4. Description of work to be performed: Leasing of 800 foot building space on the pier for retail and snack shop use 5. Value and length of contract: 5 years with one 5 year option minimum base rent in first year is $600.00 a month plus a percentage of sales 6. Waiver/modification request: Completed Property Insurance, Workman's Compensation Insurance and additional endorsement language 7. Reason for request and why it should be granted: Pier Building has not been completed vet and Let's Go Fishing can't insure nonexistent building. At this point they do not have any employees will get insurance when building is complete and staff is hired. Additional insured names the City of Huntington Beach. ' 8. Identify the risks to the City.in approving this waiver/modification: None. i i Dep6hirient Head &tlnature Date: i APPROVAL'S Approvals must:be obtained:in'the order iisted'oi'ttii form. Two ap'provais.are regiaired for a re uesrtoi•be: ranted; A roval'from-the`°CtyAdrt ': .rafor's'Offiee=is' requrea_at 9_ _ pp Risk-Ma** d-the:City Afto y's Offce';;disa 1. Ri Management Approved ❑ Denied f Q Sig ure D to 2. City Attorney's Office proved ❑ Deni4 ms Signature to 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date 7.7 lf'approved, the completed : wveNrno-or fic-a tio VCit Attorne 's Office aon9' t'wthhq-:co tractfan-re--_q;OPp ure cset=Csth teo{cboen"tsruabemt:_hitates'dt#eoe ti�h ea pproved; _ this form is to�be fled.with:the'Risk Manam geert Division ofy bii.Resources 644 Let's Go Fishing Insurance Waiver 11/10/2009 10:43,00 AM 10/19/2309 15:56 714-546-0651 BUDDY R BEARBOWER PAGE 01 ® CERTIFICATE OF LIABILITY INSURANCE D101191200 THIS CERTIRCA7i NI y ISSUED AS A MATTER OF INFORMATION muDY R BEARBOWER, GENT ONLY AND CONF-:RI NO RIGHTS UPON THE CERTIFICATEMESAVERDE DRIVE'EAST,STE P HOLDER. THIS GE-IT FICATE DOES NOT AMEND, EXTEND OR -. COSTA MESA,CA 92626 ALTER THE COVER AG?AFFORDED BY THE POUC.IES BELOW. Li INSURERS AFFORDIIIr. OVERAGE NA1C# INSURED INSURER A'91sAa Falm Cwr.4ml hxumnc ComPanY 251S1.-... MARIAN JOHNSON,UBA INSURER 3� LETS GO FISHING INSURER C: 2IDS0'OCEAN AVENUEfRONT INSURERO: HUNTINGTON BEACH,CA92948 INSURER E: COVERAGES THE POLICIES OF INSURANCE LISTED BaOi J HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOI:'TF E POLICY PERIOD INDICATED,NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION ANY CONTRACT OR OTHER oOCUMENT WITH RESPECT 1 O v IHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN.THE INSURANCE AFFORDED ly THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL 1 HE PERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES,AGGREGATE.LIMITS SHOM MAY 4AVE BEEN REDUCED 8Y.PAIO•CLAIMS. Ii9 AD4 --• "_ POLKYNUNB£R POLICY EFFcI-[1VE POLICY E:.PI TION LIMITS Lilt TYPQ OF IMSURANCE DATE MMIbOhYYY DATE MN ni SEVERAL UASILIT'Y EACH OCCURRENCE s X COTAMEACIALO£NERALIJA9ILITY PREMISE IEly '- i CLAIMS MADE CI OCCUR 92-A4�dd7.0 G MED EXP(Any ene peMon) PERSONAL&ADV INJURY W GENERAL AGGREGATE s 2,000.000 1 0SWL AGGREGATE UMrr APPLIEG PER: PRODUCTS•COMPIOP AGG I I POLICY 'PRD• ..._ JE LOG s AUTOMOBILE llALIEUX COMBINC-D SINGLE LIMIT ANY AUTO (SzzcrJdeMl_` S ;A ,?�DAS FOALL OWNED 4UT05 BODILY INJURY SCMEOULCO AUTOSr ry�+�7HIRED AUTOS CCS i lid CI �] . t)OOILY INJURY NDN-0WfifC-D AUT06 _ �PRDPERTYAAMAGE s - .--. (Pef acdcla Hl GARAGE LIABILITY •AUTO ONLY•6A ACCIDENT E ANY AUTO 1 OTHER THAN EAACC I AUTO ONLY. AGG S EXCESS I UMBRELLA LIABILITY EACH OCCURRENCE 3 OCCUR EI CLAIMSmx0E i AGGREGATE .__ I __....•__.___ DEDUCTIBLE RETENTION S s Y/OR1fEm COAIPENHaT90N WD T N T- U EMPLOYMT UARILITY TOR"LIMITS ER ANY PROPRIETOWPARTNERIEXECUTIVEa E.L EACH ACCIDENT s OFRCEWMEMBER EXCLUDED'? E.L DISEASE•EA EMPLOYE 3 __^`� Ma,dAery11 NMI — yeM, under E L DISEASE_POLICY LIMIT S Ofi3ER DESCRIPTION OF OPERATIONS 1 LOCATTOkS I VEHIC 3 EXCLUSIONS ADDED BY ENDORSEMENT!SPECIAL PROVISIONS CERTIFICATE HOLDER CANCELLATION _ THECiTYOFTttUNTIPIGTONBEA H SHOULD ANY OF THE ABOIEDSCNOED POLICIES BE CANCELLED BEFORETXKKXNAATON THUG MAINS 1 UNT DATE IMERCOF.WRI93UM IQR SUNER'MLLEMbEAVOR J0 TO MAIL DAY-WWrfVN HU NTINGTO N BEACH,CA 92648 NOTICE TO THE CERTIFICA T k MLDER NAMED TO TIME LEFT,BUT FAILURE TO DO SO SMALL IMPOSE NO COUGA71ON 0 1 LU STUlY OF ANY IONO UPON THE INWrXk ITS AGENTS OR RGPRf=WTAT1Vrc, AU AEPRE9ENTAt N6 �ACORD 25(2009101) BB-D 108 ACORD CO PORATION, A nghts msmvad. OCT-19-2009 16:17 714 546 0651 P.01 645 10/19/2009 16:07 714-546-0651 BUDDY R BEARBOWER PAGE 02 SYATE fp¢Ml INSURE NCI IMPORTANT If the certificate holder{ an ADDITIONAL_INSURED,the pollay(les)must b!e idorsed.A statement on this certificate does riot confer rights to the certificate holder in lieu of su;h mdorsement(s), If SUBROGATION IS IVED,subject to the terms and conditions of the p)lic,,certain policies may require an endorsemen.A statement on is certificate does not confer rlgh s t,the certificate holder in lieu f such endorsement(&). DISCLAIMER This Certificate of Insur rice does not constitute a contract between the issu ng Insurer(s),authorized representative or produc ar,and the certificate holder,nor does it affirmativel r o negatively amend, extend or alter the co'vL4 age afforded by the pollcies listed thereon. AcaaD 2s(2anWm) — OCT-19-2009 16:29 t 714 546 0651 98/ P.02 646 j� d r.66 TS90 9V9 VTL ZT:VT 6082--LT—IDO : Q SoY: f � C � �C(rr��' �nsc.lr��c�. S hdwI►q9 STaTC faIIM Proo-� o -� , S a dd��-, MsLlre d OCTOBER 13, 2009 (VvJ Eire Policy Status B Ph. (6 6) 442-8737 JOHNSON, MARIAN K GEN'L Policy: 92-PA-444 -0 G Yr issd: 1998 DBA LETS GO FISHING Xref: 11734 FOREST GROVE ST EL MONTE CA 91732-2224 Location: 21050 OCF AVE FRNT HUNTINGTO4 BH CA 92648 Term: CONT Type: BUS-MERCANTILE Ren w date: JUN-01-10 Coverage information Premium: 500. 00 Writt n date: N- -98 B-BUSH PROP 4300 C-LOSS INC ACT LOSS -L-BUSN LIAB 1000000 Ainount due: SFPP GEN AGGREGT 2000000 Date due: SFPP PCO AGGREGT 2000000 Bill to: SFPP --M-MEDIPERSN 5000 ?rev prem: 500 Prev risk: 4, 100 SFPP acct:0365-9681-23 Deductibles applied: 500 1L:; PER OTHER DED MAY APPLY Messages: TOOF FROM 12/24, 1:199 TO 01/10/2000 YRBUS $ 9 /RENYR $ 18 CHR C 20.0'Q'- Year built: 1998 Cc n,str: FRAME Zone: 79 Sub zone: 01 BUD R,BEARSOWER,Agent LIC.9 0796112 285D MI SA VERDE DR,E.SUITE P CC STA MESA,CA 92626 PHONE:71 701 FAX:714.546-U651 Move-in: N Entry: JUN 9• 98 FMP seg: 03 TO 39dd 63M08�1V38 8 AaGna 1990-9vS-bTL ZS ET 509ZJ£T/�}Ty %L6 TS90.9VS VT2- 2T:bT 6B0z-EI-1DD .. rig srAr¢ racx aciVAww ea Firs Policy Status OCTOBER 13, 2009 ADDL INSURED - SECTION 11 ADDL INSURED SECTION Il CITY OP HUNTINGTON BEACH MOBILE MODULAR MGMT CORP A MUNICIPAL CORPORATION 11450 MISSI N BLVD 2000 MAIN ST FL 5 MIRA LOMA Ck 91752-1015 HUNTINGTN BCH CA 92548-2702 'LOSS PAYEE MOBILE MODULAR MGMT COR? 11450 MISSION BLVD MIRA LOMA CA 91 -1015 ADDL INSURED - SECTION II CALIFORNIA STATE LANDS COMMISSION 100 HOWE AVE STE 100S ` SACRAMENTO CA 951:2 3-8219 -BUDDY R.BEARBOWER,Agent L1C.b 0196112 21350 MESA VERDE OR,E.SUITE P COSTA MESA.CA S2626 pH E:714.546-1701 FAX:714-546.1X51 :'ROPERTY LOCATIONS LOC CMPX ADDRESS LI ILITY STCLS BLD AMT CON`.CE?T:� PREMIUM EXPOSURE LIMIT PREMIUM 002 21050 OCEAN AVE # R1T HUNTINGTON BH 92648 557 4300 455 65936 1000000 Z0 3DVd 83MD98V38 N AGang 1590-9vS-GEL ZS:ET S@0Z/ET%%T48 RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Approval of Lease Agreement with Let's Go Fishing for newly constructed pier building COUNCIL MEETINGS DATE: November 16, 2009 RCA ATTACHMENTS Si`AY:US Ordinance (wlexhibits & legislative draft if applicable) Attached ❑ Not Ap licable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (wlexhibits if applicable) Attached (Signed in full by the City Attomey) Not Applicable ❑ Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attomey) Attached Not Applicable ❑ Fiscal Impact Statement (Unbudgeted, over $5,000) Attached ❑ Not Applicable Bonds (If applicable) Attached ❑ Not Applicable Staff Report (If applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (If applicable) Attached ❑ Not Ap licable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable ENPLAMAT10N FOR H1 51ING ATTACHGu EMTS REV1EMED'� °_."`"`a`:Y � RET RNED . FORWAJkDED Administrative Staff Deputy City Administrator(Initial l ( ) ( ) City Administrator(Initial) cry cT City Clerk EXPLANATION FOR RETURN OF ITEM: �. - . e RCA Author: Machado, Ext. 1797 649 City ®f r1untington Beach 2000 Maim Street • Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L.FLYNN CITY CLERK November 18, 2009 Marian Johnson dba Let's Go Fishing and Surf City Snack Bar, LLC 11734 Forest Grove St. El Monte, CA 91732 Dear Ms. Johnson: Enclosed for your records a copy of the Lease Agreement between the City of Huntington Beach and Marian Johnson, doing business as Let's Go Fishing and Surf City Snack Bar, LLC for a bait and tackle shop, along with a snack shop on the pier in the City of Huntington Beach. Sincerely, Jo n L. Flynn, CMC City Clerk JF:pe Enclosure G:followup:bbrmtltr Sister Cities: Anjo, Japan • 1Naitakere, New Zealand 650 (Telephone:714-536-5227) ATTACHMENT #7 EXHIBIT C-3 PRC 6616.1 SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No.TBD dated, June 21, 2018, the herein sublease between the City of Huntington Beach and the Surf City Store, under a portion of State Lease PRC No. 6616.1, is hereby approved. BY: ROBERT BRIAN BUGSCH, Chief Land Management Division 651 S 1 City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF BUSINESS DEVELOPMENT Business Development • Housing • Real Estate �rl �p► 710536.5582 www.hbbiz.com fax - 7I4-375.5087 August 14,2014 Tina Viray and Nelson Wescott The Surf City Store 19592 rach Iane,#103 Huntington Beach, CA 92648 Subject: Lease Agreement extension between the City of Huntington Beach and Tina Viray and Nelson Wescott,A General Partnership,DBA The Surf City Store Dear Tina and Nelson: The City of Huntington Beach("City")has interest in extending the lease term pursuant to the current Lease Agreement("Agreement")between the City and The Surf City Store. The current Agreement will expire on November 16,2014. However the Lease Term may be extended one additional five(5)year period upon mutual consent of the City and Lessee(pursuant to section 5 of the Agreement). If you are interested in extending the lease(all other terms and conditions remain the same) for the additional five(5)year period,please sign below and return this letter in the enclosed envelope. If you have any questions,please contact Micheal Green, Real Property Coordinator at (714) 536-5224. Sincerely, Kellee Fritz Deputy Director Tina y .Z L440� Nelson Wescott C:Dave Dominguez,Facilities and Development Manager Micheal Green, Real Property Coordinator Sister Cities:Anjo,japarr -Waitahere,Neu,Zealarrd 652 S•�i Y1R ter rJ�72, UJ t--;'�J Council/Agency Meeting Held: LQQ Deferred/Continued to: ASploved 0 Conditionally Approved ❑ Denied City erk'S ignatur Council Meeting Date: 11/16/2009 Department ID Number. ED 09-69 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY COU . IL MEMBERS SUBMITTED BY: FRED A. WILSON, CITY ADMINIST PREPARED BY: STANLEY SMALEWITZ, DIRECTOR ECONOMIC DEVELOPMENT7$ JIM B. ENGLE, DIRECTOR OF COMMUNITY SERVI SUBJECT: APPROVE LEASE AGREEMENT WITH TINA VIRAY AN NELSON WESCOTT, DBA SURF CITY STORE, FOR USE OF AgEWLY CONSTRUCTED PIER BUILDING Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: The City Council is asked to approve a five-year Lease Agreement with Tina Viray and Nelson Wescott, DBA Surf City Store, for the use of a newly constructed 620 square foot pier building to operate a visitor serving retail store. Funding Source: Not applicable. Recommended Action: Motion to: Approve and authorize the Mayor and City Clerk to execute the Lease Agreement between the City of Huntington Beach and Tina Viray and Nelson Wescott, DBA Surf City Store. Alternative Actions): Recommend staff to renegotiate the Lease Agreement or do not approve the Lease Agreement. 3 �r� REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 11/16/2009 DEPARTMENT ID NUMBER: ED 09-69 Analysis: In May 2007, City Council approved the use of Redevelopment funds to construct three permanent concession buildings on the pier. The permanent buildings will replace three 10' x 32' portable, modular units. One of the modular units closer to the shoreline has been occupied by Surf City Store since 1998. Each concession has operated under a temporary special permit and has paid a nominal fee on a yearly basis. They have also paid their own utilities and lease on their modular units. Direction was given in January 2009, by City Council to have staff-proceed in negotiating with the three current pier concessionaires. Economic Development Staff has surveyed surrounding pier retail areas to determine a market rate rent for the newly constructed pier buildings. Recommended market rates based on the survey were presented to the Economic Development Committee earlier this year and approved. The proposed Surf City Store rent is structured as follows: A minimum base rent of$1.00 per square foot for a total of$620.00 per month. Base rent will increase by a percentage equal to the Los Angeles-Anaheim-Riverside All Urban Consumer Price Index (CPI), no less than 3% and not to exceed 5% per year. In year one of operations, in those months where 5% of gross receipts exceeds the monthly base rent, lessee shall pay 5%of all gross receipts for non-"Surf City, Huntington Beach" merchandise. In each subsequent year, after year one, in those months where 10% of gross receipts exceeds the monthly base rent, lessee shall pay 10% of all gross receipts for non-"Surf City, Huntington Beach" merchandise. The Surf City Store has been previously located at various locations throughout the City, including Downtown, and near the intersection of Hamilton and Newland Street. The Surf City Store has also helped the City retain its service mark "Surf City, Huntington Beach" through a separate License Agreement approved by Council in 2003. The License Agreement requires the Surf City Store to pay the City 5% of gross sales for all "Surf City, Huntington Beach" merchandise. This License Agreement will stay in place in order to protect the "Surf City, Huntington Beach" service mark which under State law, must be continually used by the City. The City Attorney's Office has prepared a City standard concessionaire Lease Agreement for a term of five (5) years with one (1) option to extend for an additional five (5) years thereafter. Tina Viray and Nelson Wescott have reviewed and approved the proposed Lease Agreement. Strategic Plan Goal: Maintain and Improve Public Improvements. _2. 11/2/2009 4:51 PM 654 REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 11/16/2009 DEPARTMENT ID NUMBER: ED 09-69 Environmental Status: Not applicable Attachment(s): 1, Lease Agreement between the City of Huntington Beach and Tina Viray and Nelson Wescott, A General Partnership DBA The Surf City Store. 3. 11/2/2009 4:38 PM 655 ATTACHMENT # 1 LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND TINA VIRAY AND NELSON WESCOTT,A GENERAL PARTNERSHIP DOING BUSINESS AS THE SURF CITY STORE THIS LEASE (the "Lease".) is made and entered into effective ��, 2009 by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and Tina Viray and Nelson Wescott, a general partnership, doing business as The Surf City Store("Lessee"). WHEREAS, City wishes to tease certain real property (the "Property"), consisting of a gift shop on the pier in the City of Huntington Beach, California, 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 shalt 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 gift shop on the pier 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. A map depicting the Premises is set forth in Exhibit "A", which is attached hereto and incorporated herein by this reference. This Lease is not intended to confer third-party beneficiary status to anyone. 1 07-1 L00.004/36744 657 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. 2 07-1100.004136744 658 (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 OV- , 2009, for a five (5) year term, which shall end at 11:59 p.m. on /01/ & , 2014. The term of this Lease may be extended for one additional five (5) year period upon mutual consent of City and Lessee evidenced in writing. City may withhold consent to extend this Lease with or without cause, in which case this Lease shall terminate. 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. 3 07-1100.004/36744 659 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, 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 minimum base Rent of$1.00 a square foot for a total of$620.00 a month. The base Rent will 'increase on a yearly basis by a percentage equal to the Los Angeles-Riverside-Orange County All Urban Consumer Price Index (CPI) in an amount not less than three (3) percent nor more than five (5) percent per year. In the first year of operation, in those months where five (5) percent of gross sales receipts for non-"Surf City" service-mark merchandise exceeds the 4 07-1100.0 0 4/3 6 74 4 660 monthly base Rent, Lessee shall then pay five (5) percent of all gross sales receipts.for non-"Surf City" service-mark merchandise as Rent instead of the base Rent. In each subsequent year after the first year, in those months where ten (10) percent of gross receipts for non-"Surf-City" service-mark merchandise exceeds the monthly base Rent, Lessee shall then pay ten(10) percent of all gross receipts for non-"Surf City" service-mark merchandise as Rent instead of the base Rent. Lessee shall pay the Rent monthly to City at the City Treasurer's Office, P.O. Box 711, Huntington Beach, California, 92648, or at such other place or places as City may from time-to- time designate by written notice delivered to Lessee. Lessee shall pay the Rent, which must be received by the City Treasurer within fifteen (15) calendar days after the end of the month for which the Rent is being paid, or on the next business day if the fifteenth day falls on a weekend or holiday. SECTION 11. LATE CHARGE AND PENALTY If the Rent is not received by the City Treasurer within twenty (20) calendar days after the end of the mouth 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 1/z%) penalty per month shall be added for each month the Rent is due but unpaid. With respect to any other payments required by Lessee, a one and a half percent (I ';/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 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 5 07-I 100.004/367a4 661 (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 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 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. 6 07-1100.004136744 662 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 the first day of each month. 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 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; and (f) Any sales of merchandise to City employees which take place at City Hall; and (g) Any sales of merchandise to City employees during special events as approved in advance by the Director of Community Services. 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, 7 07-1 100.004/36744 663 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 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 8 07-1100.004136744 664 Lessee showing the total Gross Sales and any exclusions Iisted 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 fhe accuracy of the statement, or of the sufficiency of the amount of the Rent payment, and City shall be entitled to review the adequacy of such payment as set forth herein. By the end of each January, Lessee shall deliver to City a year-end statement showing the total amount of Gross Sales made in, on, or from the Premises in each month of the preceding year, the total of any exclusions, the total Rent paid to City for each of those months, all with year-end totals. City may at any time within three (3) years after receiving the year-end statement, at its sole cost and expense, cause all records, books of account and cash register tapes-for the year purportedly covered by the statement, to be audited by City or an accountant 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 9 07-1 3 00.004/36744 665 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 Upon execution hereof, Lessee shall pay and maintain at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, a security deposit with City in a sum of not less than Two Thousand Five Hundred Dollars ($2,500.00) to guarantee all of Lessee's obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, the repair and maintenance of the Premises as provided herein. Such deposit shall be in the form of a cash bond or an assignment of certificate of deposit (the "CD") or savings account to City, and shall be provided to the City Treasurer. The form of any such security deposit shall be approved by the City Attorney and the City Treasurer. No interest shall accrue on cash deposits to the benefit of Lessee, but interest shall accrue on a CD or savings account and shall be paid to Lessee under the terms of the CD or savings account. Lessee shall send a copy of each renewal of the CD to the City Treasurer to ensure that City has the records of each active deposit account. SECTION 17. 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 10 07-1100.004/36744 666 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. Lessee shall only sell "Surf City" and visitor serving and related merchandise. The gift shop shall be in operation for a minimum of three hundred (300) days during the calendar year and for a minimum of four(4) hours a day. The minimum number of operating days and hours may be modified due to weather conditions or unforeseen events. Any modification to this minimum number of days must be approved in advance in writing by the Director of Community Services or his or her designee. Except as permitted in advance in writing by City, all foods and beverages shall be sold in disposable paper or plastic containers. No pull-top cans or Styrofoam containers are to be vended or dispensed from the Premises unless pre-approved in writing by City. Lessee, wherever feasible, shall eliminate the use of non-recyclable containers and plastics. City may from time to time review the items sold and containers or utensils used or dispensed by Lessee. City reserves the right to prohibit the sale or use of non-recyclable containers or plastics. 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. 11 07-1100.0 0 413 6 7 44 667 SECTION 18. INDEMNIFICATION,DEFENSE AND HOLD HARMLESS AGREEMENT Lessee hereby agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with (1) the use or occupancy of the Premises by Lessee, its officers, employees or agents, or(2) the death or injury of any person or the damage to property caused by a condition of the Premises, or(3) the death or injury of any person or the damage to property caused by any act or omission of Lessee, its officers, employees or agents, or (4) any failure by Lessee to keep the Premises in a safe condition, or (5) Lessee's (or Lessee's agents and/or sublessees,if any)performance of this Lease or its failure to comply with any of its obligations contained in this Lease by Lessee, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee shall hold all Trade Fixtures, personal property and trade inventory on the Premises at the sole risk of Lessee and save City harmless from any loss or damage thereto by any cause whatsoever, except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. SECTION 19. 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 12 07-1100.004/36744 668 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 20. 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 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. 13 07-1 I00.004136744 669 SECTION 21, 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 parry elects to terminate the Lease, the entire amount of any insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or not owned or leased by Lessee and trade inventory, but only to the extent the insurance proceeds specifically cover those items) shall be paid to City. The proceeds of any such insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair.as necessary to restore the Premises or for any such other purpose(s) as City sees fit. This policy shall also contain the following endorsements: 14 07-1100.004/36744 670 (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 22. 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 23. CERTIFICATES OF INSURANCE, ADDITIONAL INSURED ENDORSEMENTS Prior to commencement of this Lease, Lessee shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease; these certificates shall: (a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in force; and (e) 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) 15 07-1100.004/36744 671 days' prior written notice in the event of cancellation for nonpayment of premium, which 1 0-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 24. 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 25. MAINTENANCE OF PREMISES; TENANT IMPROVEMENTS City's maintenance responsibilities of the Premises shall be limited to maintaining all sewers and drain lines, roofs repairs. Except as set forth in the preceding sentence, Lessee agrees to maintain the Premises in good order and repair, at Lessee's sole cost and expense, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, pursuant to the City's maintenance standards. A copy of the quarterly evaluation summary sheet setting forth the City's maintenance checklist is attached as Exhibit "B", and incorporated 15 07-1 I00.0 04/3 6 744 672 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 on the Premises. Lessee's obligation includes, without limitation, maintaining and operating the Premises 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 shall be responsible for maintenance of the mechanical door unless the failure of the door is caused by environmental factors, the determination of which is to be made by the Director of Community Services or his or her designee. 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. Lessee shall maintain ADA access around the entire building. Lessee shall paint, stain or seal the Premises' exterior surfaces a minimum of every three (3) years, unless City determines in its sole discretion that such work shall be done on a more frequent basis. All exterior metal surfaces, except the roof, shall be painted with rust resistant paint no less than once every other year. Any and all graffiti on the Premises shall be removed by Lessee, at its sole cost and expense, within forty-eight (48) hours of Lessee receiving notice thereof or of Lessee becoming aware of such graffiti. In addition, with or without notice from City, Lessee shall, at its sole cost and expense, repair and/or replace any broken glass within forty-eight (48) hours of its becoming broken, regardless of cause, except by fault of City. Except as provided above for graffiti and broken glass, Lessee, at its sole cost and expense and 17 07-1100,004/36744 673 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. LESSEE shall complete all interior Tenant Improvements within thirty (30) calendar days of completion of construction of the pier building, excluding rain delays or holidays, including 18 07-1 100.004/36744 674 without limitation, flooring, ceiling, kitchen, fixtures, Iighting, seating, signage, and counter areas. SECTION 26. RENT CREDIT A Rent credit may be available for some or all of any tenant improvements performed by Lessee upon prior written approval by the Director of Community Services or his or her designee. The terms of payment of any rent credit will be determined by the Director of Community Services. City in its sole discretion may decide to give Lessee other rent credit if Lessee undertakes (1) any repair or maintenance obligation of City under this Lease, or(2) any work City in its sole discretion deems necessary and appropriate. Prior to Lessee undertaking any such work, City must agree in writing to the amount of and procedures for the rent credit,the work to be done by Lessee and the cost of such work. SECTION 27. 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 28. 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 19 07-1100,004/36744 675 Lease, or any possessory right which Lessee may have in or to the Premises, by reason of Lessee's use or-occupancy thereof or otherwise, as well as all taxes, assessments, and charges on Trade Fixtures, personal. property and trade inventory in, on, or about the Premises. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. Lessee shall comply with all laws, regulations and ordinances regarding the collection of takes due a government agency. SECTION 29. 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 30. UTILITIES AND SERVICES 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. Lessee shall use good energy practices as described in the State of California Flex Your Power Best Practice Guide. 20 07-1100.0 04/3 6 74 4 676 SECTION 3 1. BUSINESS LICENSE Lessee shall maintain a business Iicense from City during the entire term of this Lease or any renewals or extensions thereof or during any holdover period. SECTION 32. SIGNS ADVERTISING AND APPROVAL,OF NAME City shall have the right to approve in its sole discretion and at any time require Lessee to change or remove signs, names, placards, decorations or advertising placed on, or inscribed, painted or affixed upon the Premises. No outdoor sales are allowed by Lessee unless prior written approval is obtained from the Director of Community Services or his or her designee. All outdoor displays or banners must first be approved in writing by the Director of Community Services or his or her designee. 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 33. NO ASSIGNING SUBLEASING OR ENCUMBERING (a) Prohibition of Assi Ment. 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. 21 07-1100.004/36744 677 Any assignment, encumbrance, occupation or use, sublease or other transfer without such consent shall be voidable and, at City's sole discretion, shall constitute a Default of this Lease. (b) Consent to Transfer. City's consent to any assignment, encumbrance, occupation or use, sublease or other transfer is subject to Lessee providing City with evidence satisfactory to City that the proposed, assignee, encumbrancer, occupier or user, sublessee or other transferee has suitable financial strength, experience and character for operation and control of the Premises and the Concession and that the use of the Premises by the proposed assignee, encumbrancer, occupier or user, sublessee or other transferee is consistent with that specified herein, and is commercially reasonable. Any proposed assignee, encumbrancer, occupier or user, sublessee or other transferee shall agree to abide by the terms and conditions of the Lease including, without limitation, all the obligations, liabilities, duties and responsibilities of Lessee, and other conditions imposed upon it pursuant to law. An approval by City to one assignment, encumbrance, occupation or use, sublease or other transfer shall not be deemed to be an approval to any other assignment, encumbrance, occupation or use, sublease or other transfer. (c) Voluntga 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. 22 07-1100.004/36744 678 (d) Exceptions. Notwithstanding the foregoing paragraphs or anything to the contrary contained herein, City's consent shall not be required for an assignment or subleasing to an Affiliate, Subsidiary or Successor of Lessee (for purposes hereof, an "Affiliate," a "Subsidiary" and a"Successor" of Lessee are defined as follows: (a)an"Affiliate" is any corporation which directly or indirectly controls or is controlled or is under common control with Lessee (for this purpose, "control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities or by contract or otherwise), (b) a "Subsidiary" shall mean any corporation or partnership not less than twenty- five percent (25%) of whose outstanding stock shall, at the time, be owned directly or indirectly by Lessee and which is at least as creditworthy as Lessee, and (c) a "Successor" shall mean a corporation or partnership in which or with which Lessee is merged or consolidated, in accordance with applicable statutory provisions for merger or consolidation of corporations, or a corporation or partnership acquiring a substantial portion of the property and assets of Lessee. SECTION 34. 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, 23 07-1100.004/36744 679 Lessee shall immediately provide City with written notice of any, assignment, encumbrance, occupation or use, sublease or other transfer. SECTION 35. 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 sixty-five (65) days in a calendar year, minus any days of closure of the Concession caused by City, shall be deemed an abandonment of the Premises. (d) Lessee's violation of Section 19 (Indemnification, Defense and Hold Harmless Agreement), Section 34 (No Assigning, Subleasing or Encumbering),'Section 47 (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, 24 07-1100.004/36744 680 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 and diligently proceeds with such cure to completion during such additional time period approved by City. SECTION 36. 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) Recntrywithout 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. 25 07-1100.004/36744 681 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, 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: 26 07-L I00 04/3 6 744 682 (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 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 ownedloperated 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 27 07-1 100.0 0 413 6 74 4 683 (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 36(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 36(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 36(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 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 28 07-1100.004/36744 684 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 Iaer 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 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 37. 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. 29 07-1100.004/36744 685 SECTION 38. 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 39. CITY'S DEFAULTS/LESSEE'S REMEDY In the event City fails to perform any material obligation of City under the Rental Agreement 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 Rental Agreement 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 Rental Agreement, including, without limitation,paying any Rent due up to the time of termination and surrendering the Premises pursuant to Sections 53 and 54 below. This remedy of termination is Lessee's sole and exclusive remedy for a default by City. SECTION 40. 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. 30 07-1100.004/36744 686 SECTION 41. 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 42. 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 43. INSPECTION OF PREMISES Upon at least twenty-four(24)hours advance written, verbal or electronic notice given by City to Lessee, Lessee shall permit City or City's agents, representatives or employees to enter the Premises at all reasonable times for the purpose of inspecting, investigating and surveying the Premises to determine whether Lessee is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect City's interest in the Premises or to perform City's duties under this Lease. City shall make quarterly physical inspections of the Leased Premises and may direct that interior maintenance or outdoor painting repairs are to be performed where such work is necessary to protect the Premises or to provide a 31 07-1 100-004136744 687 clean, attractive and well-maintained premise. Lessee shall perform those maintenance and repairs which they are responsible for within thirty (30) calendar days_ 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 44. RESERVED SECTION 45. 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 46. 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, 32 07-1100.004/36744 688 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 win conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. "Hazardous substance" shall be interpreted broadly to mean any substance or material defined or designated as a hazardous or toxic waste, hazardous or toxic material, hazardous or toxic or radioactive substance, or other similar term, by any Federal, State or local 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 47. 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. 33 07-1100.004/36744 689 In the performance of this Lease, Lessee shall not discriminate against any employee or applicant for employment, because of race, religion, color, ancestry, sex, age, national origin or physical handicap. Lessee shall take affirmative action to ensure that applicants are employed and that employees are treated during employment, without regard to their race, religion, color, ancestry, sex, age, national origin or physical handicap. Such action shall include, without limitation, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including, without limitation, apprenticeship. Lessee shall post in conspicuous places, available to-all employees and applicants for employment, notices setting forth the provisions of this Section. 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. 34 07-1100.004/35744 690 SECTION 48. SALE OF ALCOHOLIC BEVERAGES AND ENTERTAINMENT PROHIBITED Notwithstanding anything to the contrary, the sale or provision of alcoholic beverages and/or live entertainment in, on, or from the Premises is expressly forbidden, unless expressly permitted in writing by City in advance. For any proposed sale or provision of alcoholic beverages, Lessee must first obtain written City approval prior to submitting any request for approval to the Alcohol Beverage Commission. SECTION 49. 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 3494. SECTION 50. 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. 35 07-I 1 M004/36744 691 SECTION 51.. 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: (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, 36 07-1100.004/36744 692 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 52. NO ABATEMENT OF RENT DURING REPAIR WORK The Rent shall not be abated for the time Lessee is prevented from using the whole or a portion of the Premises. In addition, Lessee shall not be excused from the payment of taxes, insurance or any other obligations for the time Lessee is prevented from using the whole or a portion of the Premises. SECTION 53. 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 37 07-1100,004/36744 693 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 54. RELOCATION AND ASSISTANCE, BUSINESS GOODWILL AND LEASEHOLD BONUS VALUE Upon expiration or termination of this Lease for any reason, but excluding eminent domain, Lessee shall not be entitled to any relocation rights or benefits, business goodwill or bonus value attributable to this Lease, and Lessee expressly waives any claim to the same. SECTION 55. QUITCLAIM DEED Upon expiration or termination of this Lease as provided for herein, 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 56. RESTORATION AND SURRENDER OF PREMISES/TITLE TO IMPROVEMENTS TO THE BUILDING 38 07-1100.0 04/3 6 744 694 On expiration or termination of this Lease, 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 the building 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 to the building, at Lessee's own risk and cost and expense; or City may itself remove or have removed all or any portion of such Improvements, at Lessee's own risk and cost and expense. If required by City to do so, in removing any such Improvements to the building, 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 39 07-1100.004136744 695 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 57. FORCE MAJEURE-UNAVOIDABLE DELAYS Should the performance of any act required by this Lease to be performed by either City or Lessee be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, restrictive governmental laws or regulations, or any other cause except financial inability not the fault of the party required to perform the act, the time for performance of the act shall be extended for a period equivalent to the period of delay and performance of the act during the period of delay shall be excused. Provided, however, that nothing contained in this Section shall excuse the prompt payment of the Rent or other consideration by Lessee as required by this Lease or the performance of any act rendered difficult solely because of the financial condition of the,party, City or Lessee, required to perform the act. SECTION 58. CITY'S OPTION TO CLOSE THE PREMISES City may close the Premises without liability and without advance notice to Lessee therefore 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 other City activities or special events, or upon reasonable notice to effect any repair, remodeling or rebuilding deemed . necessary by City in its sole discretion. City retains the right to close the pier for emergencies without any notice to Lessee, for any extent of time and without compensation or credit. In those cases where there is a City-planned pier closure, Lessee will be given a two (2) business week notice. 40 07-1100.004/36744 696 SECTION 59, DELIVERIES OF SUPPLIES The Director of Community Services of City may establish the days and times deliveries of supplies may be made and advise Lessee in writing thereof. SECTION 60. EMPLOYEE PARKING All employee parking shall comply with Huntington Beach Municipal Code Section 13.08.290 (d)and(g). SECTION 61. CONFLICT OF INTEREST Lessee warrants and covenants that no official or employee of City, nor any business entity in which an official or employee of City is interested, (1) has been employed or retained by Lessee to solicit or aid in the procuring of this Lease; or (2) shall be employed by Lessee in the performance of this Lease without the immediate written divulgence of such fact to City. In the event City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City, Lessee, upon request of City, shall terminate such employment immediately. For breaches or violation of this Section, City shall have the right both to terminate this Lease without liability and, in its discretion, recover the full amount of any such compensation paid to such official, employee or business entity. No official or employee of City shall have any financial interest in this Lease in violation of the applicable provisions of the California Government Code. SECTION 62. 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 41 07-1100.004/36744 697 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 Tina Viray ATTN: Director of Community Services Nelson Westcott 2000 Main Street, P.O.Box 190 dba The Surf City Store Huntington Beach, CA 92648 19502 Ranch Lane #I03 Huntington Beach CA 92648 SECTION 63. 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, Federal, State, county or municipal, relating to Lessee's use and occupancy of the Premises and/or operation of the Concession whether such statutes, ordinances, regulations and requirements be now in force or hereinafter enacted. This Lease is expressly subject to the laws, regulations and policies of City. Lessee shall deliver to City a copy of any notice from any governmental entity received by Lessee regarding any alleged violation of law regarding the Lease, Premises or the Concession or from any person allegedly entitled to give notice under any conditions, covenants, or restrictions binding or affecting the Premises. The judgment of any court of competent jurisdiction, or the admission by Lessee in a proceeding brought against Lessee by any government entity, that Lessee has violated any such statute, ordinance, regulation or requirement shall be conclusive as. between City and Lessee and shall be grounds_for termination of this Lease by City. SECTION 64. 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 42 07-1100.004/36744 698 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 65. SURVIVAL Terms and conditions of this Lease, which by their sense and context survive the expiration or termination of this Lease,shall so survive. SECTION 66. MODIFICATION No waiver or modification of any language in this Lease shall be valid unless in writing and duly executed by both parties.- SECTION 67. 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. 43 07-1100.004/36744 699 SECTION 68. 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 69. 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 70. ATTORNEY'S FEES In the event suit is brought by either party to.construe, interpret and/or enforce the terns and/or provisions of this Lease or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non-prevailing party. SECTION 71. 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. -44 07-1 l 00,004/36744 700 SECTION 72. GOVERNING LAW This Lease shall be governed and construed in accordance with the laws of the State of California. SECTION 73. 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 74. ENTIRETY The parties acknowledge and agree that they are entering into this Lease freely and voluntarily following extensive arm's length negotiations, and that each has had the opportunity to consult with legal counsel prior to executing this Lease. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party, or anyone acting on that party's behalf, which are not embodied in this Lease, and that that party has not executed this Lease in reliance on any representation, inducement, promise, agreement; warranty,fact or circumstance not expressly set forth in this Lease. The Lease, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Lease, the Premises; the leasing of the Premises to Lessee, or the lease term created under this Lease and supercede all prior understandings and agreements, whether oral or in writing between the parties respecting the subject matter hereof. 45 07-1100.004136744 701 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: Each undersigned represents and warrants that its signature hereinbelow has the power, authority.and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully for any injuries or damages to City in the event that such authority or power is not, in fact,held by the signatory or is withdrawn. TINA VIRAY AND NELSON WESCOTT, CITY OF HUNTINGTON BEACH, a a general partnership, doing business as municipal corporation of the State of The Surf City Store California By: _T_JQA , � VISA o 0 / 54ayor print name ITS: ('circle one)Chairman/PresidentNice President Fartner ty Clerk yfido°l } AND INITIATED AND APPROVED: By: --- D• c r of Community Serv' es print name ITS: (circl r one)Chairman/President/Vice President artner .. Director of Economic Development REVIEWS PROVED: APTRDVED AS TO FORM: C ministrator �" / City Attorney VW to113 toq 46 07-1100.004/36744 702 EXHIBIT "All LOCATION MAP SURF CITY STORE •t .ems •7a:'' - ¢�. � �I ,5"�� �'.i.;},-•a•' - Ito r ! rat". k' '3'• - '.�_`; .• -'t-• - '� ''a Ltiq;!_'N'•. . !��i�-�•'e .Y� • . 's'- ..s•r yr r.,•'p1, '1 ,' s�,[�':J}����Gz .1•.�i��, .d��.lw�T''j` " .i�•:. n '_:.�:•'1�`.•�21��\� !,`: es• w � - 5 �`�.-T ..iK -'9 '- -.-i/� Y•F�•• -ai it ' • l - ..r � f.�:yS'�_�_ •;)l'���,'w[.'y{}1_��; +`'`��v•.,l .TY._ t,� ,.S- t �� Made ���h '�' ,� ,'Y'� .2`r v.. •�!' ./i \ ::-ur.St�,�• _� � n .ems '- !4 � - r!,r .�' r. ' .� ,14! \ ik� ,y.i, ''Y st '�r .�'':oaf• v�k` 4,�,.P'.^'t •,<�(} r:ay'•' ';:b-. �•-grti \i _ o �,�!'� � �"`. sa,`••'..s�''•f.,':j}:.:.'`.�c... -`+"'�"' ' ",'r.. Suit C it 5tor A:s^• :x. �'?.. `�-��; .i' s3 � fls, .. - -•:•'i`,•-..- _-,l. ,E'er-.-.w.. - s,. ��Y I"\ Qailfl'.. ��.-'b�i� y7 � ..X -a` " ..'i: 'Y. a .4'.,'�M T_. ,! .•\..,�.'.._" r !�• rN• :a i". _ '1�ii.` k:�7z �_�� - ^•i`. ='?` '��:;,`. - ::;`' 703 Exhibit"B" Quarterly Evaluation CITY OF HUNTINGTON Quarterly Evaluation SUMMARY SHEET Date Inspected: By: Representative: Area OK Needs Attention GENERAL Doors & Locks Exterior Walls Graffiti Removal Interior Walls Removal of Bird Droppings Restrooms (Plumbing) Roof Rust Signa e Trash Trim Windows Other COMMENTS: 704 S ity INSURANCE AND INDEMNIFICATION WAIVER 9 D MODIFICATION REQUEST 1. Requested by: Kellee Fritzal/Economic Development ®V 2009 2. Date- October 29, 2009 3. Name of contractor/ ermittee: Surf City Store City of Huntington Boach y City Attorneys Office 4. Description of work to be performed: Leasing of 621 foot building space on the pier for retail use 5. Value and length of contract: 5 years with one 5 year option, minimum base rent in first year is $620.00 a month plus a percentage of sales 6. Waiver/modification request: Waiver of property Insurance deductible amount. 7. Reason for request and why it should be granted: Surf City Store only has a $250.00 deductible for their property insurance 8. Identify the risks to the City in approving this waiver/modification: None. D artment "ead Si nature Date: APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required. fora request to be gran ted. Approval from the'City Ad ministrator's:Offi6e is only, required of Risk Management and the City ttorney`s 004disagree. 1. Ik Management Approved ❑ Denied 3/d Signature Date 2. City Attorney's Office A proved ❑ Denied Signature Date)��� 3, City Administrator's Office ❑ Approved ❑ Denied Signature Date If approved,,,the completed waiver/modification request is to be submitted to the City.Attorney's Office.along with the contract for approval. Once the contract has been,approved, this form is-to be fled with the Risk Management Division of Human Resources 01713 Insurance Waiver 10/29/2009 4:08:00 PM Ac_o CERTIFICATE CIF LiA�iL1TY iIVSUi ANC OP ID SD DATE(MINDDA)YY) SURFC11 10/21/09 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ISU Insurance Serv. of Irvine ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE DBA of Norton Ins. Srvc. , Inc. HOLDER,THIS CERTIFICATE DOES NOT AMEND,EXTEND OR 5 Corporate Park, Suite #170 ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. Irvine CA 92606-5164 Phone: 949-419-210D Fax:949-419-0491 INSURERS AFFORDING COVERAGE NAIL9 INSURED INSURER A. Hartford Casualty ins company INSURER B: oak Rivet Insurance company Surf City Store INSURER C: P.O. Box 899 INSURER Huntington Beach CA 92648 INSURER E. COVERAGES THE POLICIES OF INSURANCE LISTED BELOIN HAVE BEE14 ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED_NOTWITHSTANDING ANY REOUIRFMENT,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 POU'CIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS.EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. LTR NSRE TYPE OF INSURANCE POLICY NUMBER i DATE(MMIDDNY) DATE(MMIDDYY) LIMITS GENERAL LIABILITY EACH OCCURRENCE , A X X COMMERCIAL GENERAL LIABILITf 725BALZ1883 09/01/09 Q9/01/1D PREMISES(Ea occuren;e) $3Q0 000 _ CLAIMS MADE OCCUR MED EXP(Any one parson) $1 D,0 00 PERSONAL 3 ADV BcJURY L 2,0 0 0,0 0 0 GENERAL AGGREGATE s4,000,000 GEN'L AGGREGATE LIMIT APPLIES PER PRODUCTS-COMP/OP AGG $4,000,QOO X I POLICY PEo- lOC AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT {Ea accpdenl) $2 r 0 0 0,0 0 0 ANY AUTO ALL OWNED AUTOS BODILY INJURY SCHEDULED AUTOS (Per person) A X HIRED.AUTOS 72SBAL71883 09/01/Q9 09/01/10 BODILY INJURY $ X NON-OWNED AUTOS {Per accident) PROPERTY DAMAGE $ (Par accident) GARAGE LIABILITY AUTO ONLY-EA ACCIDENT $ ANY AUTO OTHER FA ACC $ AUTO 014LY: AGG $ EXCESSIUMBRELLA LIABILITY AP D A!1J S FO EACHOCCURRENCE $ OCCUR CLAIMS MADE i� AGGREGATE _ 3 I ME sGRA ,C2tyA ney (J� DEDUCTIBLE RETENTDCNJ SWC STA7U- $ WORKERS COMPENSATION AND X TORY LIMITS ER EMPLOYERS'LIABILITY g 2200052932091 04/01/09 04/01/10 E.L.EACH ACCIDENT $1,000,000 ANY PROPRIETORiPARTNERIEXECUTIVE OFFICEPJMEMBER EXCLUDED? E.L.DISEASE-EA EMPLOYEE $1,0 0 0,00 0 II yes,descnbe under E.L.DISEASE-POLICY LIMIT $1,0 0 0,0 0 0 SPECIAL PROVISIONS belay OTHER DESCRIPTION OF OPERATIONS!LOCATIONS I VEHICLES!EXCLUSIONS ADDED BY ENDORSEMENT I SPECIAL PROVISIONS *Except 10 Day Notice of Cancellation for non payment of premium. The City of Huntington Beach, its agents, officers and employees are added as an additional insured. CERTIFICATE HOLDER CANCELLATION CITYOFH SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF,THE ISSU Nr INSURER WILL ENDEAVOR TO MAIL 30* DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NA14ED TO THE LEFT,BUT FAILURE TO DO$O SHALL City of Huntington Beach IMPOSE 140 OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER,ITS AGENTS OR ATTN: Risk Management Division 2000 A4ain St REPRESENTATNES. Huntington Beach CA 92648 AUTHORIZ EPRES IVE ACORD 25(2001108) O ACORD CORPORATION 1988 706 POLECY NUMBER:72 SBA LZ1B83 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - FER.SON-ORGANIZATION coTHE CITY OF HUNTINGTON BEACH, ITS AGENTS, OFFICERS AND EMPLOYEES r- RISK MANAGEMENT 0 2000 MAIN STREET HUNTINGTON BEACH C.A. 9264E b rl O - m co co c-1 N N N b O o KITCHEL CONTRACTORS 1707 EAST HIGHLAND STE 200 PHOENIX AZ B5016-4659 PROJECT: 4464-HOKULI19 WORKING ITEMS i� Form IH 12 00 11 95 T S'1_Q.NO.001 Printed in U.S.A. Page 001 ProcessDate: 06/18/09 ExpirationUats• 09/01/10 INSURED COPY 707 ATE r1-..c..nrr,:ua:vccn ,,. .i:.. w;n..:e....:,�i�R-,.,,,..f .,...se,.<,✓�E fv_s. .s<.,C:., �2:a'•_.,+.fs"`<�N..w..�I�<:��._......r.•-�..er_x.Y,e.._.�.°rij�a�YY�✓'.ertt zrf?yti�. 3 y.l,zei;t.�Y.,s.,...s....{ D 10/(29/D 09 rS� r R9�I ACORD �P 't THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED,IS IN FORCE.AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY. _ PRODUCER (11_C, nK 949-419-2100 j949-419-049 COMPANY 1� ISU Insurance Serv. of Irvine DBA of Norton Ins. Srvc. , Inc. Hartford Casualty Ins Company 5 Corporate Park suite #170 P.O. Box 2333 Irvine CA 92606-6164 Brea CA 92622-2333 Ron Norton CODE 252740 SCIC SUB CODE: CUSTOMER ID P SURFCI I INSURED LOAN NUMBER POLICY NUMBER Surf City Store 72SEALZI883 Viray & Westcott DBA: EFFECTIVE DATE EXPIRATION DATE CONTINUED UNTIL P.O. Box 899 09/01/09 09/O1/10 TERMINATED IF CHECKED Huntington Beach CA 92648 THIS REPLACES PRIOR EVIDENCE DATED: LOCATIONIDESCRIPTION 001 HUNTINGTON BEACH PIER HUNTINGTON BEACH CA 92605 COVERAGEIPERILSIFORMS AMOUNT OF INSURANCE DEDUCTIBLE Premise 001 Building 001 Building Special Form-RCV (Tenant Improvements) $27,600 $250 Business Personal Property Special Form - RCV $21,000 $250 tBs{sflCll.) In Y �9C1dI�C0 I(10TlS._:s � s zi°iH 'xe h �� k;- °s`r3"ir? c s 'r,.n„ ><...__, *Except for 10 day notice of cancellation for non-payment of premium City of Huntington Beach is named as Loss Payee as respects to Tenant Improvements THE POLICY IS SUBJECT TO THE PREMIUMS,FORMS,AND RULES IN EFFECT FOR EACH POLICY PERIOD,SHOULD THE POLICY BE TERMINATED,THE COMPANY WILL GIVE THE ADDITIONAL INTEREST IDENTIFIED BELOW *3 D DAYS WRITTEN NOTICE.AND WILL SEND NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST,IN ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW. NAME AND ADDRESS MORTGAGEE ADDITIONAL INSURED X LOSS PAYEE City of Huntington Beach L0A"4 Risk Management Division 2000 Main Street AUTHORIZED REPRESENTATIVE Huntington Beach CA 92648 ge�i'� Y :i.,.: S�RL# D {iQPl71t31 �$3 _ 708 RCA ROUTINGT INITIATING DEPARTMENT: Economic Development SUBJECT: Approval of Lease Agreement with Surf City Store for newly constructed pier building COUNCIL MEETING DATE: November 16, 2009 CA STAT A :ATTAE`I�ME�TS _ - _ _ z. __ US_ Ordinance (w/exhibits & legislative draft if applicable) Attached ❑' Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) Attached Signed in full by the City Attorney) Not Applicable ❑ Subleases, Third Party Agreements, etc. Attached ❑ Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached Not Applicable ❑ Fiscal Impact Statement (Unbudgeted, over$5,000) Attached ❑ Not Ap licable Bonds (If applicable) Attached Not Applicable Staff Report(if applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ i-� Not Applicable EXPLAN7aTlO.N-FQR:MlSSING AT=TACNMENTS.:.' REVIEWEQ- . Administrative Staff Deputy City Administrator Initial \c"' City Administrator Initial City Clerk ( ) EXPLANATION-FOR.�RET:U.RN`OFITEM RCA Author Machado,Ext. 1797 709 City of Huntington Beach 2000 Main Street • Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK November 18, 2009 Tina Viray Nelson Westcott dba The Surf City Store 19502 Ranch Lane#103 Huntington Beach, CA 92648 To Whom It May Concern: Enclosed for your records is a copy of the Lease Agreement between the City of Huntington Beach and Tina Viray and Nelson Wescott, A General Partnership doing business as The Surf City Store on the pier in the City of Huntington Beach. Sincerely, Al Joan L. Flynn, CIVIC City Cleric JF:pe Enclosure G:followup:agrmtltr Sister Cities: Anjo, Japan • Waitakere, New Zealand (Telephone:714-536-52271 710 ATTACHMENT #8 EXHIBIT C-4 -PRC 6616.1 SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No.TBD dated, June 21, 2018, the herein sublease between the City of Huntington Beach and the Kite Connection, under a portion of State Lease PRC No. 6616.1, is hereby approved. BY: ROBERT BRIAN BUGSCH, Chief Land Management Division 711 City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF BUSINESS DEVELOPMENT Business Development Housing Real Estate 714.53b.5S62 WWW.hbbiz.com £ax — 714,375.5087 August 13,2014 Dave Shenkrnan Kite Connection 7112 Candlelight Circle Huntington Beach,CA 92647 Subject:Lease A reenlent extension between the City ofDBA(Kite Connection International incorporated. Beach and Dave Shealanan, Dear Mr.Shenlcmau: The City of Huntington Beach("City")has interest in extending the lease term pursuant to the current Lease Agreement("Agreement"}between the City and Fite Connection. The current Agreement will expire on November 16,2014.However the Lease Term may be extended one additional five(5)year period upon mutual consent of the City and Lessee(pursuant to section 5 of the Agreement). If you are interested in extending the lease(all other terms and conditions remain the same)for the additional five(5)year period,please sign below and return this letter in the enclosed envelope. If you have any questions,please contact Micheal Green,Real Property Coordinator at (714)536-5224. Sincerely, Kellee Fritzal an Deputy Director C:Dave Dominguez,Facilities and Development Manager Micheal Green,Real Property Coordinator Sistcrories:Anjojapan •Waitahelr,New 5caland 712 City of Huntington Beea9 6h 2000 MAIN STREET CALIFORNIA DEPARTMENT O48 F BUSINESS DEVELOPMENT R Business Development Housing Re Al Es 714, 375.5Q87 714.536.5582 www.hbbifz.eom 714 August 13,2014 Dave Shenkman Kite Connection 7112 Candlelight Circle Huntington Beach,CA 92647 Subject: Lease Agreement extension between the City of Huntington Beach and Dave Shenlunxn,DBA Kite Connection International incorporated. Dear Mr. Shenkman: The City of Huntington Beach("City")has interest in extending the lease term pursuant to the current Lease Agreement{"Agreement")between the City and Kite Connection. The current Agreement will expire on November 16,2014.However the Lease Term may be extended one additional five(5)year period upon mutual consent of the City and Lessee(pursuant to section 5 of the Agreement). if you are interested in extending the lease(all other terms and conditions remain the same)for the additional five(5)year period,please sign below and return this letter in the enclosed envelope. If you have any questions,please contact Micheal Green,Real Property Coordinator at (714) 536-5224. Sincerely, j Kellee Fritzal Deputy Director C,Dave Dominguez,Facilities and Development Manager Micheal Green,Real Property Coordinator Sfstet•Ciries;An}o,japan -Waitahcr;NCw9[a1and 713 Council/Agency Meeting Held: ZI h 0 Deferred/Continued to: AAp oved O Conditionally Approved ODenied Ci ler ' Signatu Council Meeting Date: 11/16/2009 Department ID Number: ED 09-71 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY C#FECONOMIC MEMBERS SUBMITTED BY: FRED A. WILSON, CITY ADMINIST PREPARED BY: STANLEY SMALEWITZ, DIRECTO DEVELOPMENT JIM B. ENGLE, DIRECTOR OF COMMUNITY SERVICE SUBJECT: APPROVE LEASE AGREEMENT WITH DAVE SHENK N, DBA KITE CONNECTION INTERNATIONAL INCORPORATED_FO USE OF A NEWLY CONSTRUCTED PIER BUILDING Statement of issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: The City Council is asked to approve a five-year Lease Agreement with Dave Shenkman, DBA Kite Connection International Incorporated for the use of a newly constructed 620 square foot pier building to operate a kite retail store. Funding Source: Not applicable. Recommended Action: Motion to: Approve and authorize the Mayor and City'Clerk to execute the Lease Agreement between the City of Huntington Beach and Dave Shenkman, DBA Kite Connection International Incorporated. Alternative Action(s): Recommend staff to renegotiate the Lease Agreement or do not approve the Lease Agreement. �4 REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 11/16/2009 DEPARTMENT ID NUMBER: ED 09-71 Analysis: In May 2007, City Council approved the use of Redevelopment funds to construct three permanent concession buildings on the pier. The permanent buildings will replace three 10' x 32' portable, modular units. One of the modular units closest to the shoreline has been occupied by Kite Connection since the mid 1990's. Each concessionaire has operated under a temporary special permit and has paid a nominal fee on a yearly basis. They have also paid their own utilities and lease on their modular units. The Kite Connection sells several Huntington Beach themed souvenirs, as well as a variety of kites and banners. Prior to being placed on the pier, the Kite Connection operated out of a different beach concession location. Direction was given by City Council in January 2009 to have staff proceed in negotiating lease agreements with the three current pier concessionaires. Economic Development Staff has surveyed surrounding pier retail areas to determine a market rate rent for the newly constructed pier buildings. Recommended market rates based on the survey were presented to the Economic Development Committee earlier this year and approved. The proposed Kite Connection rent structure is as follows: A minimum base rent of$1.00 per square foot for a total of$620.00 per month. Base rent will increase by a percentage equal to the Los Angeles-Anaheim-Riverside All Urban Consumer Price Index (CPI), no less than 3% and not to exceed 5% per year. In year one of operations, in those months where 5% of gross receipts exceeds the monthly base rent, lessee shall pay 5% of all gross receipts. In each subsequent year, after year one, in those months where 10% of gross receipts exceeds the monthly base rent, lessee shall pay 10% of all gross receipts. The City Attorney's Office has prepared a City standard concessionaire Lease Agreement for a term of five (5) years with one (1) option to extend for an additional five (5) years thereafter. Dave Shenkman has reviewed and approved the proposed Lease Agreement. Strategic Plan Goal: Maintain and Improve Public Improvements. Enhance Economic Development. Environmental Status: Not applicable -2- 11/3/260911:19 AM REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 11116/2009 DEPARTMENT ID NUMBER: ED 09-71 Attachments?: 1. Lease Agreement Between the City of Huntington Beach and Dave Shenkman, DBA Kite Connection International Incorporated. -3- 11/3/2009 1119 AM6 ATTACHMENT # 1 LEASE BETWEEN THE CITY OF HUNTINGTON BEACH AND DAVE SHENKMAN,DOING BUSINESS AS KITE CONNECTION INTERNATIONAL INCORPORATED f r THIS LEASE (the "Lease') is made and entered into effective &V-.-&, 2009 by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City") and Dave Shenkman, doing business as Kite Connection International Incorporated,a California corporation("Lessee"). WHEREAS, City wishes to lease certain real property (the "Property"), consisting of a kite store on the pier in the City of Huntington Beach, California, 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 kite store on the pier 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. A map depicting the Premises is set forth in Exhibit "A", which is attached hereto and incorporated herein by this reference. This Lease is not intended to confer third-party beneficiary status to anyone. 1 09-2132.001/36831 718 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 Iands 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. 2 09-2132.00113 6 8 3 1 719 (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 continence at I2:01 a.m. on 0V /(�7, 2009, for a five (5) year term, which shall end at 11-.59 p.m. on ! o1/. , 2014. The term of this Lease may be extended for one additional five (5) year period upon mutual consent of City and Lessee evidenced in writing. City may withhold consent to extend this Lease with or without cause, in which case this Lease shall terminate. 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. 3 04-2132.00 1/3 683 1 720 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 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 minimum base Rent of$1.00 a square foot for a total of$620.00 a month. The base Rent will increase on a yearly basis by a percentage equal to the Los Angeles-Riverside-Orange County All Urban Consumer Price Index (CPI) in an amount not less than three (3) percent nor more than five(5)percent per year. In the first year of operation, in those months where five (5) 4 09-2132.001/36831 721 percent of gross sales receipts exceeds the monthly base Rent, Lessee shall then pay five (5) percent of all gross sales receipts as Rent instead of the base Rent. In each subsequent year after the first year, in those months where ten(10) percent of gross receipts exceeds the monthly base Rent, Lessee shall then pay ten (10) percent of gross receipts as Rent instead of the base Rent. Lessee shall pay the Rent monthly to City at the City Treasurer's Office, P.O. Box 711, Huntington Beach, California, 92648, or at such other place or places as City may from time-to- time designate by written notice delivered to Lessee. Lessee shall pay the Rent, which must be received by the City Treasurer within fifteen (15) calendar days after the end of the month for which the Rent is being paid, or on the next business day if the fifteenth day falls on a weekend or holiday. SECTION 11. LATE CHARGE AND PENALTY If the Rent is not received by the City Treasurer within twenty (20) calendar days after the end of the month for which the Rent is being paid, or the next business day if the twentieth day falls on a weekend or holiday, Lessee shall pay the following late charge and penalty: (1) a late charge of ten percent (10%) shall be applied to any outstanding balance after any payment hereunder is due but unpaid; and (2) one and a half percent (1 '/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 internet sales processed on site, merchandise, or services sold or rendered, or equipment rented, in, on, or from the Premises by Lessee, or anyone contracting with Lessee, including, without 5 09-2132.001/36931 722 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 revenue's , receipts, commissions or proceeds from on-line sales by Lessee Party(ies), and/or from all public telephones, vending, weighing and all other machines ov✓ned, operated, or leased to or by Lessee Party(ies) in, on, or from the Premises; (b) All revenue's, receipts, commissions or proceeds from sales based on orders solicited or taken, in, on, or from the Premises for merchandise, 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 tie filled elsewhere; (c) All revenues, receipts, commissions or proceeds from the renting of equipment of any kind in,pn, 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. 6 09-2132.001/36831 723 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 the first day of each month. 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 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. (fl Any sales of merchandise to City employees which take place at City Hall. (g) Any sales of merchandise to City employees during special events as approved in advance by the Director of Community Services. 7 09-2132.001/36831 724 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 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. 8 09-2132.001/36831 725 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 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 1 I 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 9 09-2 132.00 1/3 683 3 726 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 Upon execution hereof, Lessee shall pay and maintain at all times during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, a security deposit with City in a sum of not less than Two Thousand Five Hundred Dollars ($2,500.00) to guarantee all of Lessee's obligations, liabilities, duties and responsibilities under the Lease, including, without limitation, the repair and maintenance of the Premises as provided herein. Such deposit shall be in the form of a cash bond or an assignment of certificate of deposit (the "CD") or savings account to City, and shall be provided to the City Treasurer. The form of any such security deposit shall be approved by the City Attorney and the City Treasurer. No interest shall accrue on cash deposits to the benefit of Lessee, but interest shall accrue on a CD or savings account and shall be paid to Lessee under the terms of the CD or savings account_ 10 09-2132.001/36831 727 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. 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. Lessee shall only sell kite and related merchandise at the kite store. The kite store shall be in operation for a minimum of three hundred (300) days during the calendar year and for a minimum of four (4) hours a day. The minimum number of operating days and hours may be modified due to weather conditions or unforeseen events. Any modification to this minimum number of days must be approved in advance in writing by the Director of Community Services or his or her designee. 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 11 09-2132.001/36831 728 from time to time review the items sold and containers or utensils used or dispensed by Lessee. City reserves the right to prohibit the sale or use of non-recyclable containers or plastics. City in its sole discretion reserves the right to prohibit Lessee's sale, provision or rental of any item or service rendered or performed, which it deems objectionable or offensive, beyond the scope deemed necessary for proper service to the public, inappropriate for sale, provision or rental by the Concession, or of inferior quality. SECTION 18. INDEMNIFICATION DEFENSE AND HOLD HARMLESS AGREEMENT Lessee hereby agrees to protect, defend, indemnify and hold harmless City, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with (1) the use or occupancy of the Premises by Lessee, its officers, employees or agents, or(2) the death or injury of any person or the damage to property caused by a condition of the Premises, or (3) the death or injury of any person or the damage to property caused by any act or-omission of Lessee, its officers, employees or agents, or (4) any failure by Lessee to keep the Premises in a safe condition, or (5) Lessee's (or Lessee's agents and/or sublessees,if any) performance of this Lease or its failure to comply with any of its obligations contained in this Lease by Lessee, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee shall hold all Trade Fixtures, personal property and trade inventory on the Premises at the sole risk of Lessee and save City harmless from any loss or damage thereto by any cause whatsoever, except such loss or damage which was caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of 12 09-2132,001136831 729 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 19. 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 20. 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 13 09-2132.001136831 730 ($1,000,000.00) per occurrence. If coverage is provided under a form which includes a designated general aggregate limit, the aggregate limit must be no less than One Million Dollars ($1,000,000.00) for the Premises. This policy shall name City, its officers, elected or appointed officials, employees,agents, and volunteers as Additional Insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Lease shall be deemed excess coverage and that Lessee's insurance shall be primary. Under no circumstances shall said above-mentioned insurance contain a self insured retention, or a"deductible" or any other similar form of limitation on the required coverage. SECTION 21. 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 14 09-2132MI/36831 731 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 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 22. 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. 15 09-2132.001/36831 732 SECTION 23. CERTIFICATES OF INSURANCE-ADDITIONAL INSURED ENDORSEMENTS Prior to commencement of this Lease, Lessee shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Lease; these certificates shall: (a) provide the name and policy number of each carrier and policy; (b) shall state that the policy is currently in force; and (c) shall promise to provide that such policies shall not be canceled or modified without thirty(30)days' prior written notice of City;however ten(10) days' prior written notice in the event of cancellation for nonpayment of premium, which 10-day notice provision shall not apply to property insurance in Section 22 above. Lessee shall maintain the foregoing insurance coverages in force during the entire term of the Lease or any renewals or extensions thereof or during any holdover period. The requirement for carrying the foregoing insurance coverages shall not derogate from Lessee's defense,hold harmless and indemnification obligations as set forth in this Lease. City or its representatives shall at all times have the right to demand the original or a copy of any,or all the policies of insurance. Lessee shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. SECTION 24. 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 mariner 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 16 04-2132.001136831 733 this Lease. Lessee shall, at its sole cost and expense, comply with all requirements of any insurance carver providing any insurance policy for the Premises or required by this Lease necessary for the continued maintenance of these policies at reasonable rates. SECTION 25. MAINTENANCE OF PREMISES;TENANT IMPROVEMENTS City's maintenance responsibilities of the Premises shall be limited to maintaining all sewers and drain lines, and roofs repairs. Except as set forth in the preceding sentence, Lessee agrees to maintain the Premises in good order and repair, at Lessee's sole cost and expense, during the entire term of this Lease or any renewals or extensions thereof or during any holdover period, pursuant to the City's maintenance standards. A copy of the quarterly evaluation summary sheet setting forth the City's maintenance checklist is attached as Exhibit "B", 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 on the Premises. Lessee's obligation includes, without limitation, maintaining and operating the Premises 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 tinges faithfully obey and comply with all laws, rules and regulations applicable thereto. Lessee shall be responsible for maintenance of the mechanical door unless the failure of the door is caused by environmental factors, the determination of which is to be made by the Director of Community Services or his or her designee. Lessee, at its sole cost and expense, shall remedy 17 04-2I32.00113683I 734 without delay any defective, dangerous or unsanitary condition(s) caused by Lessee or anyone related thereto. Lessee shall maintain ADA access around the entire building. Lessee shall paint, stain or seal the Premises' exterior surfaces a minimum of every three (3) years, unless City determines in its sole discretion that such work shall be done on a more frequent basis. All exterior metal surfaces, except the roof, shall be painted with rust resistant paint no less than once every other year. Any and all graffiti on the Premises shall be removed by Lessee, at its sole cost and expense, within forty-eight (48) hours of Lessee receiving notice thereof or of Lessee becoming aware of such graffiti. In addition, with or without notice from City, Lessee shall, at its sole cost and expense, repair and/or replace any broken glass within forty-eight (48) hours of its becoming broken, regardless of cause, except by fault of City. Except as provided above for graffiti and broken glass, Lessee, at its sole cost and expense and with or without notice from City, shall repair and/or replace all damage or destruction to the Premises caused by act(s) of vandalism as soon as possible but in no event later than fourteen (14) days after the date such damage or destruction occurred. Lessee, at its sole cost and expense, shall repair and/or replace all other damage or destruction to the Premises,regardless of cause, except by fault of City. Lessee shall comply with all written notices served by City with regard to the care and maintenance of the Premises. Any written notice hereunder shall specify the work to be done and the period of time deemed to be reasonably necessary for completion of such work. Should Lessee fail to commence making the necessary repairs within seven(7) days after receiving such notice, or within twenty-four (24) hours of the glass becoming broken in the case of broken glass, or fail to diligently proceed to complete the necessary repairs within the period of time reasonably specified in the City's notice, or within forty-eight (48) hours of the glass becoming 18 09-2132.001136831 735 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 Cade relating thereto. LESSEE shall complete all interior Tenant Improvements within thirty (30) calendar days of completion of construction of the pier building, excluding rain delays and holidays, including without limitation, flooring, ceiling, kitchen, fixtures, lighting, seating, signage, and counter areas. SECTION 26. RENT CREDIT A Rent credit may be available for some or all of any tenant improvements performed by Lessee upon prior written approval by the Director of Community Services or his or her designee. The terms of payment of any rent credit will be determined by the Director of Community Services. 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, or (2) any work City in its sole discretion deems necessary and appropriate. 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. 19 09-2132.001/36831 736 SECTION 27. 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 28. 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 Ievied by any governmental agency including, without limitation,the State, County, City or any tax or assessment Ievying body upon any interest in this Lease, or any possessory right which Lessee may have in or to the Premises, by reason of Lessee's use or occupancy thereof or otherwise, as well as all taxes, assessments, and charges on Trade Fixtures, personal property and trade inventory in, on, or about the Premises. Upon request, Lessee shall promptly furnish to City satisfactory evidence establishing such payment. Lessee shall comply with all laws, regulations and ordinances regarding the collection of taxes due a government agency. SECTION 29. 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 20 09-2132.001/36831 737 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 30. UTILITIES AND SERVICES 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. Lessee shall use good energy practices as described in the State of California Flex Your Power Best Practice Guide. SECTION 31. 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 32. SIGNS ADVERTISING AND APPROVAL OF NAME City shall have the right to approve in its sole discretion and at any time require Lessee to change or remove signs, names, placards, decorations or advertising placed on, or inscribed, painted or affixed upon the Premises. No outdoor sales are allowed by Lessee unless prior written approval is obtained from the Director of Community Services or his or her designee. All outdoor displays or banners must first be approved in writing by the Director of Community 21 09-2132.0 0 1/36 83 1 738 Services or his or her designee. 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 33. 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 22 09-2132.001/36831 739 the use of the Premises by the proposed assignee, encumbrancer, occupier or user, sublessee or other transferee is consistent with that specified herein, and is commercially reasonable. Any proposed assignee, encumbrancer, occupier or user, sublessee or other transferee shall agree to abide by the terms and conditions of the Lease including, without limitation, all the obligations, liabilities, duties and responsibilities of Lessee, and other conditions imposed upon it pursuant to law. An approval by City to one assignment, encumbrance, occupation or use, sublease or other transfer shall not be deemed to be an approval to any other assignment,encumbrance, occupation or use, sublease or other transfer. (c) Voluntary assignment defined. Except as otherwise expressly provided herein, any dissolution, merger, consolidation or reorganization of Lessee, or the sale or 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 23 09-2132,001136831 740 or cause the direction of the management and policies of such corporation, whether through the ownership of voting securities or by contract or otherwise), (b) a"Subsidiary" shall mean any corporation or partnership not less than twenty- five percent (25%) of whose outstanding stock shall, at the time, be owned directly or indirectly by Lessee and which is at least as creditworthy as Lessee, and (c) a "Successor" shall mean a corporation or partnership in which or with which Lessee is merged or consolidated, in accordance with applicable statutory provisions for merger or consolidation of corporations, or a corporation or partnership acquiring a substantial portion of the property and assets of Lessee. SECTION 34. 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 he 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 35. 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. 24 04-2 1 3100 113 6 83 1 741 (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 sixty-five (65) days in a calendar year, minus any days of closure of the Concession caused by City, shall be deemed an abandonment of the Premises. (d) Lessee's violation of Section 19 (Indemnification, Defense and Hold Harmless Agreement), Section 34 (No Assigning, Subleasing or Encumbering), Section 47 (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) 25 09-2132.001136831 742 days are reasonably required for its cure,then Lessee shall not be deemed to be in Default if Lessee notifies City of the length of the additional time required to cure and receives City's written approval of the additional time required, which approval will not be unreasonably withheld, and commences such cure within such thirty (30) day period and diligently proceeds with such cure to completion during such additional time period approved by City. SECTION 36. 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 26 09-2132.00113683I 743 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, 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) Tennination. 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 27 09-2132.001/36831 744 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 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 36(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 28 09-2132,001136831 745 annum. As used in Section 36(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 36(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 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 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 29 09-2132.001/36831 746 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 Iiable for any Ioss 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 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 37. 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. 30 09-2132.001/36831 747 SECTION 38. 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 39. CITY'S DEFAULMLESSEE'S REMEDY In the event City fails to perform any material obligation of City under the Rental Agreement 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 Rental Agreement 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 Lessee Agreement, including,without limitation,paying any Rent due up to the time of termination and surrendering the Premises pursuant to Sections 53 and 54 below. This remedy of termination is Lessee's sole and exclusive remedy for a default by City. SECTION 40. 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. 31 09-2132,001/36831 748 SECTION 41. 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 42. 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 43. INSPECTION OF PREMISES Upon at least twenty-four(24)hours advance written,verbal or electronic notice given by City to Lessee, Lessee shall permit City or City's agents, representatives or employees to enter the Premises at all reasonable times for the purpose of inspecting, investigating and surveying the Premises to determine whether Lessee is complying with the terms of this Lease and for the purpose of doing other lawful acts that may be necessary to protect City's interest in the Premises or to perform City's duties under this Lease. City shall make quarterly physical inspections of the Leased Premises and may direct that interior maintenance or outdoor painting 32 09-2132,001/36831 749 repairs are to be performed where such work is necessary to protect the Premises or to provide a clean, attractive and well-maintained premise. Lessee shall perform those maintenance and repairs which they are responsible for within thirty (30) calendar days, 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 44. RESERVED SECTION 45. 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 46. 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 33 09-2132.00I/3693I 750 officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind or nature) arising out of or in connection with any such Hazardous Substance and any damage, loss, or expense or liability resulting from any such Hazardous Substance including, without limitation, all attorney's fees, costs and penalties incurred as a result thereof except any release caused by the sole negligence or willful misconduct of City. Lessee will conduct all defense at its sole cost and expense and City shall approve selection of Lessee's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Lessee. "Hazardous substance" shall be interpreted broadly to mean any substance or material defined or designated as a hazardous or toxic waste, hazardous or toxic material, hazardous or toxic or radioactive substance, or other similar term, by any Federal, State or local 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 47.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 34 09-2131001/36831 751 question the acceptability of the patronage of any person because of race, religion, color, ancestry, sex, age,national origin or physical handicap. In the performance of this Lease, Lessee shall not discriminate against any employee or applicant for employment, because of race, religion, color, ancestry, sex, age, national origin or physical handicap. Lessee shall take affirmative action to ensure that applicants are employed and that employees are treated during employment, without regard to their race, religion, color, ancestry, sex, age, national origin or physical handicap. Such action shall include, without limitation, the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including, without limitation, apprenticeship. Lessee shall post in conspicuous places, available to all employees and applicants for employment, notices setting forth the provisions of this Section. 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 35 09-2132.00 1/3 683 1 752 sustained by City by reason thereof shall be borne and paid for by Lessee, at its sole cost and expense. SECTION 48. SALE OF ALCOHOLIC BEVERAGES AND ENTERTAINMENT PROHIBITED Notwithstanding anything to the contrary, the sale or provision of alcoholic beverages and/or live entertainment in, on, or from the Premises is expressly forbidden, unless expressly permitted in writing by City in advance. For any proposed sale or provision of alcoholic beverages, Lessee must first obtain written City approval prior to submitting any request for approval to the Alcohol Beverage Commission. SECTION 49. 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 50. 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 36 09-2132.001/36931 753 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 51. 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: (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 37 09-2132.001136831 754 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 52.NO ABATEMENT OF RENT DURING REPAIR WORK The Rent shall not be abated for the time Lessee is prevented from using the whole or a portion of the Premises. In addition, Lessee shall not be excused from the payment of taxes, insurance or any other obligations for the time Lessee is prevented from using the whole or a portion of the Premises. SECTION 53. EMINENT DOMAIN If, during the tern 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; 38 09-2 L32A01/3G831 755 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 54. RELOCATION AND ASSISTANCE BUSINESS GOODWILL AND LEASEHOLD BONUS VALUE Upon expiration or termination of this Lease for any reason, but excluding eminent domain, Lessee shall not be entitled to any relocation rights or benefits, business goodwill or bonus value attributable to this Lease,and Lessee expressly waives any claim to the same. SECTION 55. QUITCLAIM DEED Upon expiration or termination of this Lease as provided for herein, 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 39 09-2132.001136831 756 deliver to City any other instrument requested by City as necessary to perfect City's right, title and interest to the Premises. SECTION 56, RESTORATION AND SURRENDER OF PREMISES/TITLE TO IMPROVEMENTS TO THE BUILDING On expiration or termination of this Lease, 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 the building 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 to the building, at Lessee's own risk and cost and expense; or City may itself remove or have removed all or any portion of such Improvements to the building, at Lessee's own risk and cost and expense. If required by City to do so, in removing any such Improvements to the building, 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 40 09-2 132.00113693 I 757 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 57. FORCE MATEURE-UNAVOIDABLE DELAYS Should the performance of any act required by this Lease to be performed by either City or Lessee be prevented or delayed by reason of an act of God, strike, lockout, labor troubles, inability to secure materials, restrictive governmental laws or regulations, or any other cause except financial inability not the fault of the party required to perform the act, the time for performance of the act shall be extended for a period equivalent to the period of delay and performance of the act during the period of delay shall be excused. Provided, however, that nothing contained in this Section shall excuse the prompt payment of the Rent or other consideration by Lessee as required by this Lease or the performance of any act rendered difficult solely because of the financial condition of the party, City or Lessee, required to perform the act. 41 09-2132,001/36831 758 SECTION 58. 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 other City activities or special events, or upon reasonable notice to effect any repair, remodeling or rebuilding deemed necessary by City in its sole discretion. City retains the right to close the pier for emergencies without any notice to Lessee,for any extent of time and without compensation or credit. In those cases where there is a City-planned pier closure, Lessee will be given a two (2) business week notice. SECTION 59. DELIVERIES OF SUPPLIES The Director of Community Services of City may establish the days and times deliveries of supplies may be made and advise Lessee in writing thereof. SECTION 60. EMPLOYEE PARKING All employee parking shall comply with Huntington Beach Municipal Code Section 13.08.290(d) and (g). SECTION 61. CONFLICT OF INTEREST Lessee warrants and covenants that no official or employee of City, nor any business entity in which an official or employee of City is interested, (1) has been employed or retained by Lessee to solicit or aid in the procuring of this Lease; or (2) shall be employed by Lessee in the performance of this Lease without the immediate written divulgence of such fact to City. In the event City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City, Lessee, upon request of City, shall terminate such employment immediately. For breaches or 42 09 2132,001/36831 759 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 62. 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 Dave Shenkman ATTN: Director of Community Services dba Kite Connection International 2000 Main Street,P.O.Box 190 Incorporated Huntington Beach, CA 92648 7112 Candlelight Circle Huntington Beach, CA, 92647 SECTION 63. 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, Federal, State, county or municipal, relating to Lessee's use and occupancy of the Premises and/or operation of the Concession whether such statutes, ordinances, regulations and requirements be now in force or hereinafter enacted.. This Lease is expressly subject to the laws, regulations and policies of City. Lessee shall deliver to City a copy of any notice from any governmental entity received by Lessee regarding any alleged violation of law regarding the Lease,Premises or the Concession or 43 09-2132.001/36831 760 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 64. 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 65. SURVIVAL Terms and conditions of this Lease, which by their sense and context survive the expiration or termination of this Lease, shall so survive. 44 09-2132.001/36831 761 SECTION 66. MODIFICATION No waiver or modification of any language in this Lease shall be valid unless in writing and duly executed by both parties. SECTION 67. 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 68. 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 69. 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 70. 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 45 09-2132.001/36831 762 attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non-prevailing party. SECTION 71. 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 72- GOVERNING LAW This Lease shall be governed and construed in accordance with the laws of the State of California. SECTION 73. 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 74. 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 parry's behalf, which are not embodied in this Lease, and that that party has not executed this Lease in reliance on any representation,inducement, 46 09-2132.001/36831 763 promise, agreement, warranty, fact or circumstance not expressly set forth in this Lease. The Lease, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Lease, the Premises, the leasing of the Premises to Lessee, or the lease term created under this Lease and 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. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact,held by the signatory or is withdrawn. DAVE SHENKMAN,Doing Business As CITY OF HUNTINGTON BEACH, a KITE CONNECTION INTERNATIONAL, municipal corporation of the State of a California corporation Califo w By: �VAVF W IV KOY /\J Mayor e ITS: (circle one) a'rTn resident(Vice President ity Clerk ufirJo? AND INITIATED AND APPROVED: By: DAWN S N(60 K( r print nafne D' c of Communi S i s ITS:� s�'� '�7 (circle one)S cre /CiIIGF117nei�1 Officer/Asst. Director o Economic Deve opment se -Treasurer REVIE APPROVED: APPROVED AS TO FORM: ".,DAI--- )I 9 C dministrator City Attorney l0-ID8�a1 47 09-2132.001136 8 3 1 764 EXH I BIT "A" LOCATION MAP KITE CONNECTION "4. �J ✓•.f.:it N+. �e, + yp ^ w t. 7 '+e :_��-tipp' , •'i -"ti.. �4' 2 i rl �i r,r-.1,� . 4 .• _ r`' i.!•+'4.�1"_„i G,u,iu v'•A.•�'. _ b a. ,,.;. - ,C, � ��j• r }tif+�e � fir-- �� .' - - ^ Y. ti ~:`, �. .f• � I tom. '.� 's -�-i.+ ..r .,. - - r - • ...;�' -. r - � _ :. 'f .�� \�' ;fie.. ?� .f -1t.ir ' '�h 9 t. . ; ... Kite Connection •/� -++ „ ,. •}. ;'� .� '�. ... '"ire-a. � •�'r'S1o�';�' ., f _ ,��pyr�/r .-�,...� _ ..^•ht c,n• ... '.,.:v'•' `•a :y> h� _ ?2. w s�- -vi :�.:�� ii. r o S•`i'c'e-0 y` i `.• =ve,, � #III yL�r 'Sjl! ah.., 'p�r.. -r •t'r.-, +•�:*'r' _ eT­ r 4-ti� .d„ -��. ,C �; -ri !�.. !', i ,t• - :?... .q r-:^ ..,:y� ',a- F{{ '.lye � :dJ. �,��•�;-�....:r:"'. ``�a •` _ ".�;":�=:;•;' . �. �T r .fir %'�•:'•4{a •k 765 Exhibit "B" Quarterly Evaluation CITY OF HUNTINGTON Quarterly Evaluation SUMMARY SHEET Date Inspected: By: Representative: Area OK Needs Attention GENERAL Doors & Locks Exterior Walls Graffiti Removal Interior Walls Removal of Bird Droppings Restrooms (Plumbing) Roof Rust Signa e Trash Trim Windows Other COMMENTS: 766 Sul :ity INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION, REQUE zLCLi\l:i r.. Ci efi-tuntin+d:=��: oih NOV 12 2009 NOV 1. Requested by: Kellee Fritzal/EconomicrD.evelop.men ach Ugly Attorney's Office , 2. Date: November 10, 2009 HUNIANREsoLit( :-; ADM I 3. Name of contractor/permittee: Kite Connection 4. Description of work to be performed: Leasing of 620 foot building space on the pier for retail and snack:shop use 5. Value and length of contract: 5 years with one 5 year option minimum base rent in first year is $620 00 a month plus a percentage of sales 6. Waiver/modification request: Completed Property Insurance and Workman's Compensation Insurance. 7. Reason for request and why it should be granted: Pier Building has not been completed yet and Kite Connection can't insure nonexistent building At this point they do not have any employees, will get insurance when building is complete and staff is hired. 8. Identify the risks to the City in approving this waiver/modification, None. Department ea ignature ate: -PP:ROVALS - _ - A royals must:be;obtained,in.6Ei order=listed,gn-this form>',Two approvals are requited PP for a request to-be-granted. Approval from the City A inisttator s O#ice�s oriiy regti�red � m -Risk Manage ent;,and°the City rney's Off = 1. z Management pproved ElDenie Signature ate 2. City Attorney's Office proved ❑ Den Signature Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date roved the com feted viaiver%rnodifcation-[equesf`is=to::be,s�Nbm tted'to fhe:_-=.- 1f app _ _ p . ncetent bappovang4ith th :concf O een_City Attoney s Office o d, this form is to be filed with;the:Risk=Management.Divisiop-. Human-Resources . 767 Kite Connection Insurance Waiver 11/10/2009 2A3:00 PM 11%10/2009 12:31 915626921659 RON OLSON INS AGENCY PAGE 02/04 Commercial Certificate of Insurance F A R M E PIS' Agency Michael Evans I Name 11701 BROADWAY issue Date {MD41 T)rm �1� 09 . & Whittier,CA 90601-3118 Address 562-692-1076 This certificate is issued as a matter of information only and confers no rights upon the cer'[iflcate holder.This certificate does not amend,extend or alter the 77 coverage afforded by the polities shown below. SC 29 Dist. 76 Agent - Companies Ptoni&g Coverage: insured come=rty A Truck Insurxncc Exchange DAVID SHENKMAN, Wier. Name DSA:KITE CONNECTION Company B Farmers Insurance Exchange [suer & 7112 CANDLELIGHT CIR company C Mid-Century Insurance Company Address ffUNTINGTN SCH,CA 92647 Lrr(er Company [[tree t Coverages This is to certify that the policies of Insurance listed below have been issued to the insured named above for the policy period indicated.Notwlthstanding any requirement•term or condition of any contract or other docurnrnt 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 ptsid claims. Co. Policy Etrcctsve Policy Expiration PolicyUrnits Lu Type of Insurance Policy Number Date tMMIDDfy17 Date tNtwwrm General Aggregate S2,000,000 i A General Liability 094179629 11113i20D8 11/13/2009 products-Comp/OPS 1e Commercial General Aggregate S 1,000,000 Liability Personal& 7c -Occun•ence Version Advertising Injury F 1,000,000 l Contractual-Incidental Each Occurrence nee 5 1,000,000 t Fire Barrage } Only (Any one fire) b 75,000 Owners&Contractors Prot. Medical Expense (Any one person) $5,000 Automobile Liability Combined Single i Limit S All Owned Commercial Autos BF,iv G ' Eodily Inw-f P,rTo filer person) S Scheduled Autos Hired Autas Bodily Injury S (Per accident) Non-Owned Autos Property Damage S Garage Liability Garage Awegate s ' Umbrella Liability Lin rt S Workers'Compensation Statutory finch Accident S and Olsease-Each Employee S Employers'Liabiilty Disease-Policy 1.16t g Description of OperationsNehicles/Restrictions/Special items: LISTED AS ADDITIONAL INSURED:THE CITY OF hTNTINGTON BEACH,IT'S ELECTED OR APPOINTED OFFICIALS, AGENTS,OFFICERS,EMPLOYEES AND VOLUNTEERS LOC: I PACIFIC COAST HWY,N'i)NTrNGTN BCH,CA 92648 l Certificate Holder Cante)latioll THE CITY OF HUNTINGTON PEACH Should any of the above described policies be cancelled before the expiration date Name thereof,the issuing company will endeavor to mail 30 days written notice to the ` certificate holder named to the left,but failure to[nail such notice shall impose no I Address H i MAIN STREET, obligation or liability of any kind upon the company.its agents or representatives. U NTINGTON BEACH,CA 92648 MICHAEL EVANS . Authorized Representative sG-Y49Z <-9Q Copy Distribution:Sefvite Center Copy and Agent's Copy '-ar 768 NOU-10-2009 12:12 9ISS26921659 97x F-02 11/13120D9 12:31 915626921659 RON OLSON INS AGENCY PAGE 03/04 Commercial Certificate of Insurance i"A R M E 7RS7 Agency Michael Evans 1 Name 11701 BROADWAY Issue Date (MMIDD/YY) 11/10/2009 & Whittier,CA 9060I-3119 Address 562-692-1076 This cerdflcare is issued as a matter of in(orrnation only and confeta no rights upon the certificate holder.This certificate does not amend,extend or alter the coverage afforded by the policies shown below. Si 29 Dist. 76 Agent 377 l Companies Providing Coy erage: Insured company Truck Tnsurancc 1:xchv,gc DAVTD STIEi`tKMAN, Letter Name DBA:KITE CONNECTION company $ Farmers Insurance Exchange Utter & 7112 CANDLELIGHT CAR company C Mid-Century Insurance Company Address • HUNTINGTN BCH,CA 92647 Leiter Company Letter Coverages 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,terra 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! subject to id)the terms.exclusions and conditions of such policies.Limits shown may have been reduced by paid claims. _ Co. Type of Insurance Polic Number PoilcyMective Policy Expiration Policy Limits Ltr yp y Dare cmmlDwYL Date IMMrAWM A General LiabilityGeneral Aggregate $2,000,000 0941�&6$9 13i33l2009 11/I32010 products-Comp/OP5 fC Cornmerdal General Aggregate $ 1,000,000 Liability Personal& 1C -Occiurence Version Advertising Injury I S 1,000,000 Contractual-Incidental Each Oceturenee S 1,000,000 Only Fire Damage (Any one fire) i 75,000 Owners&Contractors Prot. Medical Expense (Any one person) g 5,000 Automobile Liability Lim biped Single . All Owned Commercial $ Autos Bodily Injury Scheduled Autos {Perpenan g Hired Autos EodilyInjury 1 Non-Owned Autos (Per accident) 1 Garage LiabEitty � Property Damage S Garage Aggregate $ Umbrella Liability Limit S Workers' Compensation Statutory and Each Accident S Disease-Each Employee 3 Employers'Liability Disease-Policy Limit S Description of Operations/Vehicles/Rarifctions/Special Items: LISTED AS ADDITIONAL INSURED:THE CITY OF HUNTTNGTON BEACH,IT'S ELECTED OR APPOINTED OFFICIALS, AGENTS,OFFICERS,EMPLOYEES AND VOLUNTEERS LOC: I PACIFIC COAST HWY,HUNTINGTN BCH,CA 92648 Certificate Holder Cancellation , THE CITY OF HUNTI'NGTON BEACH Should any of the above described policies be cancelled before the expiration date Name theceof_the issuing company will endeavor to mail 30 days written notice to the & 2000 MAIN STREET, certificate holder named to the left.but failure to marl such notice shall impose no Address HUNTINGTON BEACH,CA 92648 obligation or lisbllity of any kind upon the company.its agents or representatives. MICHAEL EVANS fwtltorizcd Representative 5t;-z497 4—t4 Copy Distribution:Service Center Copy and Agent's Copy H-ot 769 Nnti—1 m ai�g t�: 1 P 91 SF;26971659 997 P.03 11/10/2009 12:31 915626921659 RON OLSON INS AGENCY PAGE 04/04 z POLICY NUMBER: 094178689 BUSINESSOWNERS BP 04 48 0197 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY, ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: BUSINESSOWNERS POLICY SCHEDULE` Name Of Person Or Organlzatlon;THE CITY OF HUNTINGTON REACH,IT' S ELECTED OR APPOINTED OFFICIALS, AGENTS, OFFICERS, EMPLOYEES AND VOLUNTEERS Information requirad to complete this Schedule, if not shown on this endorsement, will be shown in the Decla- rations. The following is added to Paragraph C. Who Is An Insured in the Businessowners Liability Coverage Form: 4. Any person or organization shown in the Schedule is also an insured, but only with respect to liability arising out of your ongoing operations or premises owned by or ranted to you. BP 04 48 01 97 Copyright, Insurance Services Office, Inc„ 1997 Page 1 of 1 O 770 NOU-10-2009 12:12 915626921b59 913% P.04 RCA ROUTING SHEET WTIATING DEPARTMENT: Economic Development SUBJECT: Approval of Lease Agreement with Kite Connection for newly constructed pier building COUNCIL MEETING DATE: November 16, 2009 RGA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Ap licable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) Attached (Signed rn full by the City Attomey) Not Applicable ❑ Subleases, Third Party Agreements, etc. Attached El (Approved as to form by City Attomey) Not Applicable Certificates of Insurance (Approved by the City Attomey) Attached Not Applicable ❑ Fiscal Impact Statement (Unbudgeted, over$5,000) Attached EJ Not Applicable Bonds (if applicable) Attached ❑ Not Ap licable Staff Report (if applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (If applicable) Attached Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EAPLAHAT6OM FOR HISS R9O ATTAOHMEMYS REVIEWEDv z�=as'' RE U ED FOR I A DED Administrative Staff 1 _ J- Deputy City Administratoit Initial),,-;,; - TO City Administrator (Initial) City Clerk c;;'r�: �'F,;'c-ti�.aT EXPLANATION FOR RETURN OF ITEM: - o RCA Author: Machado, Ext. 1797 771 city ®f Huntington each 2000 Main Street o Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK November 18, 2009 Dave Shenkman dba Kite Connection International, Inc. 7112 Candlelight Cr. Huntington Beach, CA 92647 Dear Mr. Shenkman: Enclosed for your records is a copy of the Lease Agreement between the City of Huntington Beach and Dave Shenkman, doing business as Kite Connection International, Inc. for a kite store on the pier in the City of Huntington Beach. Sincerely, j Joa L. Flynn, CIVIC City Clerk JF:pe Enclosure G:foilowup:agmtltr Sister Cities: Anjo, Japan o Waitakere, New Zealand 772 (Telephone:714-536-5227) ATTAC H M E N T #9 EXHIBIT C-5 PRC 6616.1 . SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No.TBD dated, June 21, 2018, the herein sublease between the City of Huntington Beach and Fare Share Enterprises, a New York corporation, under a portion of State Lease PRC No. 6616.1, is hereby approved. BY: _ ROBERT BRIAN BUGSCH, Chief Land Management Division 773 Dept I D ED 16-36 Page 4 of 2 Meeting Date:1 1121/201 6 CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 11/21/2016 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A.Wilson, City Manager PREPARED BY: Ken Domer, Assistant City Manager Kellee Fritzal, Deputy Director, Business Development i SUBJECT: Approve and authorize execution of a three-year License Agreement between i the City and Fare Share Enterprises for coin operated telescopes on the Pier Statement of Issue: The City Council is asked to approve a three (3) year License Agreement between the City of Huntington Beach and Fare Share Enterprises to install and maintain coin operated telescopes on the Pier. Financials Impact: License Agreement provides for a 50% share of all revenue received from the public's use of the telescopes. The previous License generated revenue for the City in the amount of approximately $3,000 annually. Recommended Action: Approve and authorize the Mayor and City Clerk to execute the "License Agreement Between the City of Huntington Beach and Fare Share Enterprises for Coin Operated Telescopes on Huntington Beach Pier." I Alternative Action(s): Do not approve the Amendment and provide direction to staff. Analysis: The City has provided for coin operated telescopes on the Pier for the pleasure of visitors. Since 2008, "See Scopes" has been the operator of the telescopes on the Pier. However, due to the corrosive nature of the sea air and the resulting maintenance and upkeep needs for the current telescopes, the City released a Request for Proposals (RFP) for new a provider. The City received two (2) proposals and selected "Fare Share Enterprises" as the new provider of telescope operations on the Pier. I The selection was made due to Fare Share's proposal of a 50/50 split, no-charge to install the telescopes, maintenance plan, and references for similar operations. If approved, Fare Share will install and maintain six (6) new telescopes in January 2017. Based on use, an additional six telescopes could be installed. The installation will be coordinated with the Community Services Department. Fare Share currently has telescopes on the pier in Santa Monica and also at the Griffith Observatory in Los Angeles. HB -365- IteHl 9. - 1 Dept.ID ED 16-36 Page 2 of 2 Meeting Date:11/21/2D16 The license fee is fifty percent (50%) of their gross monthly receipts. This fee will continue over the term of the Agreement. Environmental Status: Not Applicable Strategic Plan Goal: Strengthen economic and financial sustainability Attachment(s): 1. License Agreement between the City of Huntington Beach and Fare Share Enterprises i I I 775 Item 9. - 2 HB -366- r LICENSE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND FARE SHARE ENTERPRISES FOR COIN OPERATED TELESCOPES ON HUNTINGTON BEACH PIER This License Agreement is made and entered into by and between the CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("CITY") and FARE SHARE ENTERPRISES, a New York corporation("LICENSEE"). WHEREAS, CITY is the owner of certain real property located on the western part of Main Street, Huntington Beach, west of Pacific Coast Highway in the City of Huntington Beach, Orange County, California, with an address of 1033 Pacific Coast Highway, and commonly known as the Huntington Beach Pier and Pier Plaza (hereafter referred to as"the Property"); and LICENSEE desires to install, maintain and operate a number of Coin Operated Telescopes (hereinafter referred to as "Telescopes") on the Property- for a fee to users under the terms contained in this License Agreement; and CITY desires to grant LICENSEE a license (hereafter referred to as "the License') to install, maintain and operate the Telescopes on specific locations within the Property area as determined at the sole discretion of the Community Services Director in the manner set forth in this License Agreement; and i CITY and LICENSEE wish to enter into this License Agreement defining their respective rights and responsibilities concerning said License. NOW, THEREFORE, in consideration of the promises and Agreements hereinafter made and exchanged, the CITY and LICENSEE covenant and agree as follows: RLS 9/6/16/16-5426/143473/DO 1 776 i SECTION I. SCOPE OF LICENSE; STATEMENT OF WORK: ACCEPTANCE OF RISK LICENSEE may enter upon the Property for the purpose of installing, operating and maintaining the Telescopes as set forth in Exhibit A attached hereto and incorporated herein by reference. Installation shall take place on March 1, 2017 (`'Installation Date'). Prior to Installation Date, CITY and LICENSEE shall meet to determine a work schedule and specific locations for the Telescopes. CITY may at its sole discretion set forth the date of installation as well as the number and location of Telescopes. However,the installation date shall be no later than five(5) months from the Contract Implementation Date and the number of Telescopes shall be no less than six, unless otherwise agreed to in writing. LICENSEE shall furnish, at its own expense, all labor, plans, tools, equipment, supplies, transportation, utilities and all other items, services, applicable permits, and Telescopes necessary to complete and construct/install the Telescopes in a good and workmanlike manner. Maintenance: In the event one of the Telescopes becomes inoperable, including coin intake, as determined by CITY or LICENSEE, the machine shall be immediately repaired or replaced. LICENSEE agrees to assume the risk of all Ioss or damage arising out of the nature of the scope of this License, during its progress or prior to acceptance, from the action of the elements, from any unforeseen difficulties which may arise or be encountered in the prosecution of work, and for all other risks of any description connection with the work, including, but not limited to, all expenses incurred by or in RLS 9/6/16/16-5426/143473/DO 2 777 consequence of the suspension or discontinuance of work, except such as are herein expressly stipulated to be borne by CITY, and for well and faithfully completing the work within the stipulated time and in the manner shown and described in this Agreement, and in accordance with the requirements of CITY under them for the compensation set forth in the accepted proposal for coin operated viewing instruments from LICENSEE.to CITY("Proposal"). If a service was not included in the Proposal,LICENSEE may provide the service at CITY request on a time and materials basis. LICENSEE acknowledges that it is fully familiar with all the terms, conditions and obligations of this Agreement, the location of the job site, and the conditions under which the work is to be performed, and that it enters into this Agreement based upon its investigation of all such matters and is relying in no way upon any opinions or representations of CITY. It is agreed that the terms of the Proposal, Specifications of the Coin Operated Telescopes as well as any construction documents if any are incorporated into this Agreement by this reference, with the same force and effect as if the same were set forth at length herein, and that CONTRACTOR and its subcontractors, if any, shall be bound by said documents insofar as they relate in part or in any way, directly or indirectly, to the work covered by this Agreement. Should there be any conflict between the terms of this License, the Proposal, or any construction documents, then this License shall control and nothing herein shall be considered as an acceptance of the terms of said proposal which is in conflict herewith. RLS 9/6/16/16-5426/143473/D0 3 778 SECTION 2. TERM This License shall commence upon its approval by CITY and shall terminate in three(3) years,unless extended, or sooner terminated, as provided for herein. SECTION 3. LICENSE FEE In consideration of this License, LICENSEE agrees to pay to CITY a fee ("License Fee") of fifty percent (50%) of the gross monthly receipts of each Telescope for the use of the Property to operate the Telescopes. Gross monthly receipts shall include each time the Telescope is activated regardless of whether compensation was actually received by LICENSEE. LICENSEE shall pay the License Fee quarterly on or before the I51h day of each month the License Fee is due during the term of this License Agreement to the CITY at the City Treasurer's Office, P.O. Box 711, Huntington Beach, California, 92649, or at such other place or places as CITY may from time-to-time designate by written notice delivered to LICENSEE in the manner set forth in the Notice Section of this License Agreement. SECTION 4. LATE CHARGE AND PENALTY If the License Fee is not received by the City Treasurer by the fifteenth day of each month during the term of this License Agreement, or the next business day if the fifteenth day falls on a weekend or holiday, LICENSEE shall pay the following late charge and penalty: (1) a late charge of ten percent (10%) per week shall be applied to any outstanding balance after any payment hereunder is due but unpaid; and(2) one and a half percent(2%) penalty per month shall be added for each month the License Fee is due but unpaid. RLS 9/6/16/16-5426/143473/DO 4 779 SECTION 5. BOOKS AND RECORDS LICENSEE shall keep true and accurate books and records showing all of its business transactions in separate records of account of the fee for Telescopes use 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 LICENSEE hereby agrees that all such records and instruments shall promptly be delivered and made available to CITY and/or its designated representatives within thirty (30) days of receiving written request therefor. LICENSEE shall furnish to CITY and/or its designated representatives copies of its quarterly California sales and use tax returns related to this License 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 Property. LICENSEE agrees to maintain at its central off-ices 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 Property 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 6. RESERVATIONS,ENCUMBRANCES AND RIGHTS-OF-WAY A. CITY expressly reserves the right to convey or encumber the Property, in whole or in part, for any purpose not inconsistent or incompatible with the rights or privileges of LICENSEE under this License Agreement. In addition, LICENSEE agrees to subordinate this LICENSE to any existing or future CITY financing RLS 9/6/16/16-5426/143473/DO 5 780 regarding the Property or any portion thereof. LICENSEE also agrees to cooperate and provide any documentation necessary for CITY to obtain any such financing. B. This License is subject to pre-existing contracts, licenses, easements, encumbrances and claims affecting the Property, if any, and it is made without warranty by CITY of title, condition or fitness of the land for the stated or intended use. SECTION 7. TIME OF ESSENCE Time shall be of the essence of this License Agreement and each and all of its terms, covenants or conditions in which performance is a factor. SECTION 8. TERMINATION This License Agreement may be terminated by either parry with or without cause upon thirty (30) days written notice delivered to the other party to this License Agreement in the manner set forth in the Notice Section of this License Agreement, SECTION 9. MAINTENANCE LICENSEE agrees to care for and maintain the Telescopes, at LICENSEE's sole cost and expense, during the entire term of this License Agreement or any extension thereof, in good and satisfactory condition as acceptable to the CITY. Care for and maintenance includes but is not limited to removal of graffiti. In the event LICENSEE does not maintain the Property or Telescopes in a satisfactory manner, LICENSEE authorizes CITY to perform such maintenance on LICENSEE's behalf. All costs incurred performing said maintenance shall be assessed to and billed directly to the LICENSEE. LICENSEE agrees to pay such costs within ten (10) days of billing. RLS 9/6/16/16-5426/143473/DO 6 781 SECTION 10. CONTROL OF EQUIPMENT LICENSEE shall keep any equipment used or brought onto the Property for the purposes of operating or maintaining the Facility under its absolute and complete control at a]I times and said equipment shall be used on the Property at the sole risk of LICENSEE. SECTION 11. REMOVAL OF THE TELESCOPES UPON TERMINATION Upon tennination of this License Agreement, LICENSEE will remove the Telescopes placed on the property and restore the Property to its natural condition to the satisfaction of, and at no cost to, the CITY. SECTION 12. ADDITIONS, ALTERATIONS AND REMOVAL A. No modifications, alterations or additions to the Property or Telescopes, including, without limitation, landscape design, construction of additional structures or changes to the structural design of the Property or Telescopes, shall be constructed or made by LICENSEE without first obtaining the prior written approval of CITY, which may be withheld by CITY in its sole and complete discretion. B. Except as provided under this License Agreement, no alteration or removal of the Telescopes or Property or natural features of the Property shall be undertaken without LICENSEE first obtaining the prior written approval of CITY. C. LICENSEE's obligation to obtain CITY's prior written approval is ' separate and independent of LICENSEE's obligation to obtain any permits from CITY, including without limitation, building permits. RLS 9/6/16/16-5426/143473/DO 7 782 SECTION 13. CITY'S CONTRACT ADMINISTRATOR CITY's Deputy Director of Business Development, or his or her designee, shall be CITY's Contract Administrator for this License Agreement with the authority to act on behalf of CITY for the purposes of this License Agreement, and all CITY approvals and notices required to be given herein to CITY shall be so directed and addressed. i i SECTION 14. INDEMNIFICATION.DEFENSE AND HOLD HARMLESS LICENSEE 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 directly or indirectly out of the grant of the License under this License Agreement including that arising from the passive concurrent negligence of CITY, but save and except those which arise out of the active concurrent negligence, sole negligence, or the sole willful misconduct of CITY. LICENSEE will conduct all defense at its sole cost and CITY shall approve selection of LICENSEE's counsel. The CITY shall be reimbursed by LICENSEE for all costs and attorney's fees incurred by CITY in enforcing the obligations set forth in this Section. 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 LICENSEE. SECTION 15. WORKERS' COMPENSATION INSURANCE. Pursuant to the California Labor Code Section 1861,LICENSEE acknowledges awareness of Section 3700 et seq. of said code,which requires every employer to be RLS 9/6/16/16-5426/143473/DO 8 783 I insured against liability for workers' compensation; LICENSEE covenants that it will comply with all such laws and provisions prior operating the Facility on the Property pursuant to this license. LICENSEE shall maintain such Workers' Compensation Insurance in an amount of not less than One Hundred Thousand Dollars ($100,000) bodily injury by accident, each occurrence, One Hundred Thousand Dollars ($100,000) bodily injury by disease, each employee, and Two Hundred Fifty Thousand Dollars($250,000)bodily injury by disease,policy limit, at all times incident hereto, in forms and underwritten by insurance companies satisfactory to CITY. SECTION 16. GENERAL,LIABILITY INSURANCE In addition to LICENSEE's covenant to defend, hold harmless and indemnify CITY, LICENSEE shall carry at all times,on all activities to be performed on the Property and/or the Facility as contemplated herein,general liability insurance, including coverage for bodily injury and property damage. All insurance shall be underwritten by insurance companies in forms satisfactory to CITY. Said insurance shall name the CITY, its officers, agents and employees and all public agencies as determined by the CITY as Additional Insureds. LICENSEE shall subscribe for and maintain said insurance policies in full force and effect during the life of this License Agreement, in an amount of not less than One Million Dollars($1,000,000)combined single limit coverage. If coverage is provided under a form which includes a designated general aggregate limit, such limit shall be not Iess than One Million Dollars ($1,000,000). In the event of aggregate coverage, LICENSEE shall immediately notify CITY of any known depletion of limits. LICENSEE shall require its insurer to waive its subrogation rights against CITY and RLS 9/6/16/1.6-5426/143473/DO 9 784 agrees to provide certificates evidencing the same. 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 17. CERTIFICATES OF INSURANCE; ADDITIONAL INSURED ENDORSEMENT LICENSEE shall furnish to CITY certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this License Agreement; said certificates shall provide the name and policy number of each carrier and policy,and shall state that the policy is currently in force and shall promise to provide that such policies will not be canceled without thirty (M)days prior written notice to CITY. LICENSEE shall maintain the foregoing insurance coverages in force until this License Agreement is terminated. The requirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of CITY by LICENSEE under this License Agreement. CITY or its representative shal I at all times have the right to demand the original or a copy of all said policies of insurance. LICENSEE shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. A separate copy of the additional insured endorsement to each of LICENSEE'S insurance policies, naming the CITY, its officers and employees as Additional Insureds shall be provided to the City Attorney for approval upon execution of this License Agreement by LICENSEE. i i RLS 9/6/16/16-5426/143473/DO 10 785 SECTION 18. INSURANCE HAZARDS LICENSEE shall not commit or permit the commission of any acts on the Property or Telescopes nor use or permit the use of the Property or Telescopes in any manner that will increase the existing rates for, or cause the cancellation of any liability, property, or other insurance policy for the Property required by this License Agreement. i LICENSEE shall, at its sole cost and expense, comply with all requirements of any insurance carrier providing any insurance policy for the Property and/or Telescopes or required by this License Agreement necessary for the continued maintenance of these policies at reasonable rates. SECTION 19. RELEASE LICENSEE hereby releases and forever discharges CITY of and from any and all claims, demands, actions or causes of action whatsoever which LICENSEE may have,or may hereafter have, against the CITY specifically arising out of the matter of the entry of LICENSEE onto the Property or the operation of the Telescopes. This is a complete and final release and shall be binding upon LICENSEE and the heirs, executors, administrators, successors and assigns of LICENSEE'S use of the Property and Telescopes under this License Agreement. LICENSEE hereby expressly waives any rights under or benefit of any law of any jurisdiction whatsoever providing to the contrary. Neither the acceptance of this RELEASE nor any payment made hereunder shall constitute any admission of any liability of CITY. SECTION 20. WASTE LICENSEE shall not alter, damage or commit any kind of waste upon the Property of Facility or any improvement, equipment or personal property thereon and RLS 9/6/16/16-5426/143473/DO 11 786 shall not interfere in any manner with the operations or activities of CITY. LICENSEE shall not cause any workmen's or materialmen's liens to be placed upon the Property or Facility and agrees to indemnify and hold CITY harmless against any such liens including but not limited to the payment of attorneys' fees. SECTION 21. DAMAGE. DESTRUCTION OR NUISANCE LICENSEE shall not commit or permit the commission by others of any damage or destruction of, on, or to the Property or Telescopes. LICENSEE 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 Property; and LICENSEE shall not use or permit the use of the Property or Telescopes for any unlawful purpose. SECTION 22. PAYMENT OF OBLIGATIONS LICENSEE shall promptly pay, at its sole cost and expense, before they become delinquent, any and all bills, debts, liabilities and obligations incurred by LICENSEE in connection with LICENSEE's use of the Property and operation of the Telescopes. Upon request, LICENSEE shall promptly furnish to CITY satisfactory evidence establishing such payment. SECTION 23. SIGNS AND ADVERTISING CITY shall have the right to approve in its sole discretion and at any time require LICENSEE to change or remove signs, names, placards, decorations or advertising placed on, or inscribed,painted or axed upon the Telescopes. Should CITY approve of any sign, name,placard, decoration or advertising, LICENSEE shall maintain the same at all times during the entire term of this License Agreement or any renewals or extensions RLS 9/6/16/1 6-5426/143473/DO 12 787 thereof. All signs, names, placards, decorations or advertising must comply with all requirements of any governmental authority with jurisdiction. SECTION 24. ASSIGNMENT The parties acknowledge that CITY is entering into this License Agreement in reliance upon the experience and abilities of LICENSEE and its principals. Consequently, LICENSEE shall not voluntarily assign, encumber or otherwise transfer its interest in the License Agreement or allow any other person or entity (except LICENSEE's authorized representatives) to occupy or use all or any part of the Property or Telescopes without the prior written consent of CITY, which consent may be withheld at CITY's sole discretion. Provided, however, that CITY's consent shall not relieve LICENSEE from any and all of its obligations, liabilities, duties or responsibilities under this License Agreement. Any assignment, encumbrance, occupation or use of the Property or Telescopes without such consent shall be voidable and, at CITY's sole I discretion, shall constitute a Default of this License Agreement. SECTION 25. TERMS BINDING ON SUCCESSORS All the terms, covenants and conditions of this License Agreement shall inure to the benefit of, and be binding upon, the parties and their successors, including, without limitation, their assignees,users, 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, or uses, or other transfers hereinbefore set forth, or (2) CITY's consent thereto. RLS 9/6/16/16-5426/143473/DO 13 788 SECTION 26. WAIVER OF CLAIMS LICENSEE 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 License Agreement, or any part thereof, or caused by any judgment or award in any suit or proceeding declaring this License Agreement null, void or voidable, or delaying the License Agreement or any part thereof from being carried out SECTION 27. DESTRUCTION Should the Property or Telescopes be partially destroyed, this License Agreement shall continue in full force and effect, and LICENSEE, at LICENSEE's sole cost and expense, shall complete the work of repairing and restoring the Property and Telescopes i 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 Property or Telescopes 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 LICENSEE notice of such determination in writing and each party may, in that party's sole discretion: (a) Continue this License Agreement in full force and effect in which case LICENSEE shall repair and restore, at LICENSEE's sole cost and expense, the Property and Facility to their former condition;or (b) Terminate this License Agreement by giving the other party thirty (30) days' written notice of its election to termnate the License Agreement. In the event that either party elects to terminate this License Agreement, the RLS 9/6/16/16-5426/143473/DO 14 789 entire amount of any insurance proceeds, if any, 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 Property or for any other such purpose(s) as CITY sees fit. In addition, if LICENSEE elects to terminate the License Agreement, LICENSEE must still comply with all of its obligations, Iiabilities, duties and responsibilities under the License Agreement, including, without limitation,paying any License Fee up to the time of termination. SECTION 28. CITVS OPTION TO CLOSE THE PROPERTY I CITY may close the Property without liability and without advance notice to LICENSEE 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 Property by CITY longer than two (2) weeks during a period when the Facility would otherwise be operating shall extend the term of the License Agreement by the same amount of time. If this occurs.LICENSEE and CITY shall memorialize this extension in writing. SECTION 29. CONFLICT OF INTEREST LICENSEE 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 LICENSEE to solicit or aid in the procuring of this License Agreement; or (2) shall be employed by LICENSEE in the performance of this License Agreement without the immediate written divulgence of such fact to CITY. In the event RLS 9/6/16/16-5426/143473/DO 15 790 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, LICENSEE, upon request of CITY, shall terminate such employment immediately. For breaches or violation of this Section, CITY shall have the right both to terminate this License Agreement 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 License Agreement in violation of the applicable provisions of the California Government Code. SECTION 30. NO TITLE INTEREST No title interest of any kind is hereby given and LICENSEE shall never assert any claim or title to the Property. SECTION 31. 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 LICENSEE, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent: CITY: LICENSEE: City of Huntington Beach David Lockrow, President ATTN: Deputy Director of Fare Share Enterprise Business Development 201 W. Genesee Street,#242 2000 Main Street Fayetteville, NY 13066 RLS 9/6/16/16-5426/143473/DO 16 791 Huntington Beach,CA 92648 SECTION 32. COMPLIANCE WITH LAWS LICENSEE, at its sole cost and expense, shall comply with all statutes, ordinances, regulations and requirements of all governmental entities, including, without limitation, Federal, State, county or municipal, relating to LICENSEE's use of the Property and/or operation of the Telescopes whether such statutes, ordinances, regulations and requirements be now in force or hereinafter enacted. This License Agreement is expressly subject to the laws, regulations and policies of CITY. LICENSEE shall deliver to CITY a copy of any notice from any governmental entity received by LICENSEE regarding any alleged violation of law regarding the License Agreement, the Property or the Telescopes or from any person allegedly entitled to give notice under any conditions, covenants, or restrictions binding or affecting the Property or Facility. The judgment of any court of competent jurisdiction, or the admission by LICENSEE in a proceeding brought against LICENSEE by any government entity, that LICENSEE has violated any such statute, ordinance, regulation or requirement shall be conclusive as between CITY and LICENSEE and shall be grounds for termination of this License Agreement by CITY. SECTION 33. INTERPRETATION OF THIS License Agreement The language of all parts of this License Agreement 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 License Agreement 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 License Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly RLS 9/6/16/16-5426/143473/DO 17 792 provided here. As used in this License Agreement, 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 License Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. I j SECTION 34. SURVIVAL I Terms and conditions of this License Agreement, which by their sense and context survive the expiration or termination of this License Agreement, shall so survive. SECTION 35. MODIFICATION No waiver or modification of any language in this License Agreement shall be valid unless in writing and duly executed by both parties. SECTION 36. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this License Agreement 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 License Agreement. RLS 9/6/16/16-5426/143473/DO I8 793 SECTION 37. ATTORNEY'S FEES Except as expressly set herein, in the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this License Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the non- prevailing party. SECTION 38. GOVERI\TING LAW This License Agreement shall be governed and construed in accordance with the laws of the State of California. SECTION 39. DUPLICATE ORIGINAL The original of this License Agreement 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 44_ ENTIRETY The parties acknowledge and agree that they are entering into this License I Agreement freely and voluntarily following extensive arm's length negotiations, and that I each has had the opportunity to consult with legal counsel prior to executing this License i Agreement. The parties also acknowledge and agree that no representations, inducements, promises, License 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 License Agreement, and that that party has not executed this License Agreement in reliance on any RLS 9/6/16/16-5426/143473/DO 19 794 representation, inducement, promise, License Agreement, warranty, fact or circumstance not expressly set forth in this License Agreement. This License Agreement, and the attached exhibits, contain the entire License Agreement between the parties respecting the subject matter of this License Agreement, the Property, Telescopes, or the License created under this License Agreement and supersede all prior understandings and License Agreements, whether oral or in writing between the parties respecting the subject matter hereof. IN WITNESS WHEREOF,the parties hereto have caused this License Agreement to be executed by and through their authorized officers on 1, 3 12016. 21, 2016) LICENSEE CITY OF HUNTINGTON BEACH, a FAIR SHARE ENTERPRISES, municipal corporation of the State of a New York corporation California print name r ITS: (circle one)Chairm ; rr den/Vice President �q L/i6d _ AND `'ty Clerk By: INITIATED AND APPROVED: . pri t name ITS: (eircle one)Secretary/Chief Financial Officer/Asst. X 0 ecretan -'Ireasurer Deputy Director 6f Business Development f � REVIE APPROVED: APPROVED A O ity Manager City Attorney l)\co a\1�1- NW RLS 9/6/16/16-5426/143473/DO 20 795 i t 5 u i .. - ��-rrs"� ..:_tea��.d4y T - -�' � •a ;, s h # t a al - s �: " Y N City ®f Huntington Beach. 2000 Main Street 0 Huntington Beach, CA 92648 (714) 536-5227 4 www.huntingtonbeachea.gov Office of the City Clerk Robin Estanislau, City Clerk November 22, 2016 i Fare Share Enterprise ATTN: David Lockrow, President 201 W. Genesee Street, #242 Fayetteville, NY 13066 Dear Mr. Lockrow: Enclosed is a copy of the fully executed "License Agreement Between the City of Huntington Beach and Fare Share Enterprises for Coin Operated Telescopes on Huntington Beach Pier." Sincerely, Robin Estanislau, CIVIC City Clerk RE:pe Enclosure Sister Cities: Anjo, Japan o Waitakere, New Zealand 797 s iiy INSURANCE AND INDEMNIFICATION WAIVER H o MODIFICATION REQUEST 1. Requested by: Max Daffron 2. Date: November 14, 2016 3. Name of contra cto r/perm ittee: Fare Share Enterprises 4. Description of work to be performed: Pier Telescope Instalation 5. Value and length of contract: Three Years 6. Waiver/modification request. Waiver of Completed Ops Endorsement and City named AI Endors. 7. Reason for request and why it should be granted: NY Company cannot include 8. Identify the risks to the City in approving this waiver/modification: NA tt�►�4�IG DepartV' t ead Signature Date: APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval torn the City Manager's Office is only required if Risk Management and a City Attorneys O ce disagree. 1. isk Management approved ❑ Denied Si nature Date 2. City Attorney's Office Approved ❑ Denied Signature Date 3. City Manager's Office ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Human Resources 798 Insurance Waiver Form (2).docm 11/14/2016 9:23:00 AM CITY OF HUNTINGTON BEACH Phone:7%374.5378 Fax 714-6365212 Waiver Procedure To requcsi a waiver,indicate provide a b&fdescdptlan(l—2 sentences)of the proposed work/pro*4 its dollar value(if not a specific dollar amAxmt,use an average,annual estimate or non-profit)and pmjcvwd tmwfiam(per job or as-need basis). For substantial dollar deducakraiR autouats,a financial,sxaomaut is repaired(Balance Budget Reports,Dun&Bradstreet Report,etc,).Waiver_Requestcd- tfswtiC Ct t7 ' A4a Coll Encroachment vsbeO ���✓✓ o Proposed Work:Dollar value: l Projected nmefiattcc; i I 79 DATE(MMIDDIYYYY) CERTIFICATE OF LIABILITY INSURANCE 110f31/2016 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 j 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 CONTCT NAMEA Cheri Green,CISR 4neGroup NY, Inc. PHONfKlr Noxy 315 413 4419 _ FAX )_375-457-7902 Syracuse NY 13204 cgreen@bhfinsurance.com Clinton Street E n1Art reen bhiinsurance.com Syr INSURERS AFFORDING COVERAGE NAIC9 INSURER A:Hartford Fire Insurance Corn any 19682 INSURED FARSH INSURER B: Fare Share Enterprises, Inc. INSURERC: 5530 Gulf Road - Chittenango NY 13037 INSURERD: - INSURER E. INSURER F: COVERAGES CERTIFICATE NUMBER:132282240 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. POLICY LLTR TYPE OF INSURANCE NSD SWVD POLICY NUMBER MMIDD POUCYEFF MMIDD EXP LIMITS A X COMMERCIAL GENERAL LIABILITY Y 01SSAAR4B1SS6 9/25/2016 9/2512017 EACH OCCURRENCE iS1,OD0,DOD _ CLAIMS-MADE Lam• I OCCUR DAMAGE TO RENTED PREMISES_(Ea occurrence S300,000 MED EXP(Any one person) $10,000 PERSONAL BADV INJURY $1.000,000 GEN'L AGGREGATE LIMIT APPLIES PER GENERAL AGGREGATE S2,000,000 X POLICY PRO- ❑ JECT LOC PRODUCTS•COMPlOPAGG 52,000,000 OTHER: S AUTDMDBILE LIABILITY MBIIJED LE LIMIT S Ea accident) A14Y AUTO _ BODILY INJURY(Per person) $ ALL OWNED SCHEDULED BODILY INJURY Per accident $ AUTOS AUTOS ( ) NON-OWNED PROPERTY DAMAGE HIRED AUTOS AUTOS Per accident S S UMBRELLA LIAR OCCUR EACH OCCURRENCE S EXCESS LIAR CLAIMS-MADE AGGREGATE S DED RETENTIONS S WORKERS COMPENSATION PER OTH- AND EMPLOYERS'LfABft1TY Y 1 N STATUTE ER ANY PROPRIETOPJPARTNERIEXECUTNE -E-L H ACCIDENT $ D?OFFICERIMEMSER EXCLUDE ❑NIA A B .. (Mandatary In NH) M MtfAE E, ATES DiS SE•EA EMPLOY S cribe under DESIf CRIPTION OF OPERATIONS below CM ATTORNEY E L DISEASE•POLICY LIMIT S CITY OF HUNI INGTON BE CH DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES(ACORD 101,Additional Remarks Schedule,may be attached if more space is required) RE: Viewing Machine on Huntington Beach Pier Huntington Beach CA 92648 CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE City of Huntington Beach Offices THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN 2000 Main Street ACCORDANCE WITH THE POLICY PROVISIONS, Huntington Beach CA 92648 AUTHORIZED REPRESENTATIVE i ©1988-2014 ACORD CORPORATION. All rights reserved. ACORD 25(2014101) The ACORD name and logo are registered marks of ACORD 800 AGENCY CUSTOMER to: FARSH LOC#: �.� ADDITIONAL REMARKS SCHEDULE Page I of I AGENCY NAMED INSURED OneGrou NY, Inc. Fare Share Enterprises, Inc. POLICY NUMBER 210 W. Genesee St#242 Fayetteville,NY 13066 CARRIER NAFC CODE EFFECTIVE DATE: ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM. FORM NUMBER: 25 FORM TITLE: CERTIFICATE OF LIABILITY INSURANCE Coverage applies per form(s): General Liability: SS0008(04/05)- Business Liability Form-Who is an Insured i ACORD 101(2008/01) ©2008 ACORD CORPORATION.All rights reserved. The ACORD name and logo are registered marks of ACORD 801 i Resolution No. 2008-63 F i 1 S � CITE' OF HUNTINGTON BEACH 2000 Main Street, Huntington Beach, CA 92648-2702 i i } i Declaration of Non-Employer Status f The State of California requires every enterprise or business to provide workers compensation insurance coverage. if you have no employees, you may make a 4 declaration to that effect by completing and signing this form and returning to: { 3 i City. of Huntington Beach 2000 Main Street 1 Huntington Beach, CA 92648-2702 � F t I certify that in the performance of the activity or work for which this permit is issued. I shall not employ any person In any manner so as to become- subject-to California Workers' Compensation Insurance requirements. I authorize the City of Huntington Beach to immediately and retroactively revoke the license or permit issued under this declaration if 1 hire any employee(s) or become subject to the provision of the laws requiring Workers' Compensation insurance. i l Company/Organization: —_`t' .�a . C-4 !smS Address: *24Z r3o� f s Applicant [please print]: Title; if any: .est t Applicant's Signature: E Date Signed: �j�•,/ Telephone Number: ATTACHMI:AiT#7 802 I Resolution No. 2008-63 E CITY OF HUNTINGTON BEACH 3 2000 Main Street, Huntington Beach, CA 9264$-2702 � DECLARATION OF PERMIT TEE � } E i l certify that no vehicle(s) will be used or operated in the performance of the I task(s) or event(s) for which this permit is granted. � i authorize the City of Huntngton 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: Company Name if applicable): t Date Signed: t t 7 ((Q I 1 { t ATTACHME14tT#5 803 AGENCY CUSTOMER ID: FARSH LOC#: ADDITIONAL REMARKS SCHEDULE Page i of I AGENCY NAMED INSURED OneGroup NY, Inc. Fare Share Enterprises, Inc. POLICY NUMBER 210 W. Genesee St#242 Fayetteville, NY 13066 CARRIER NA�c CODE EFF-'ECTI VF,DATE: ADDITIONAL REMARKS THIS ADDITIONAL.REMARKS FORM IS A SCHEDULE TO ACORD FORM. FORM NUIv[aER: 25 FORM TITLE- CERTIFICATE OF LIABILITY INSURANCE Coverage applies per fDTm(S): General Liability: SS0008(04/05)- Business Liability Form-Who is an Insured f ACORD 101 (2008101) ©2008 ACORD CORPORATION.All rights reserved. The ACORD name and logo are registered marks of ACORD 804 I i i i I BUSINESS LIABILITY COVERAGE FORM Farm SS 00 08 04 05 805 n 7n(l5. ThP Hatifnrt� QUICK REFERENCE BUSINESS LIABILITY COVERAGE FORM READ YOUR POLICY CAREFULLY I BUSINESS LIABILITY COVERAGE FORM Beginning on Page A. COVERAGES 1 Business Liability 1 Medical Expenses 2 i Coverage Extension-Supplementary Payments 2 B. EXCLUSIONS 3 C. WHO IS AN INSURED 10 D. LIABILITY AND MEDICAL EXPENSES LIMITS OF INSURANCE 14 E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 15 1. Bankruptcy 15 2. Duties In The Event Of Occurrence,Offense, Claim Or Suit 15 3. Financial Responsibility Laws 16 4. Legal Action Against Us 16 5. Separation Of Insureds 16 6. Representations 16 7. Other Insurance 16 8. Transfer Of Rights Of Recovery Against Others To Us 17 F. OPTIONAL ADDITIONAL INSURED COVERAGES 18 Additional Insureds 18 G. LIABILITY AND MEDICAL EXPENSES DEFINITIONS 20 Form SS 00 08 04 05 806 i _1 BUSINESS LIABILITY COVERAGE FORM Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered. Throughout this policy the words "you"and "your"refer to the Named Insured shown in the Declarations. The words "we","us"and"our"refer to the stock insurance company member of The Hartford providing this insurance. The word"insured"means any person or organization qualifying as such under Section C.-Who Is An Insured. Other words and phrases that appear in quotation marks have special meaning. Refer to Section G. - Liability And Medical Expenses Definitions. A. COVERAGES (a) The "bodily injury" or "property 1. BUSINESS LIABILITY COVERAGE (BODILY damage" is caused by an INJURY, PROPERTY DAMAGE, PERSONAL "occurrence" that takes place in the AND ADVERTISING INJURY) "coverage territory"; Insuring Agreement (b) The "bodily injury" or "property damage" occurs during the policy a. We will pay those sums that the insured period;and becomes legally obligated to pay as (c) Prior to the policy period, no insured damages because of "bodily injury", listed under Paragraph 1. of Section "property damage" or "personal and C. — Who Is An Insured and no advertising injury" to which this insurance . "employee"authorized by you to give applies. We will have the right and duty to or receive notice of an "occurrence" defend the insured against any "suit" or claim, knew that the"bodily injury" seeking those damages. However, we will or "property damage" had occurred, have no duty to defend the insured against in whole or in part. If such a listed any "suit" seeking damages for "bodily Insured or authorized "employee" injury", "property damage" or"personal and knew, prior to the policy period, that advertising injury" to which this insurance the "bodily injury" or "property does not apply. damage" occurred, then any We may, at our discretion, invesfigate any continuation, change or resumption "occurrence" or offense and settle any claim of such "bodily injury" or "property or"suit"that may result. But: damage" during or after the policy (1) The amount we will pay for damages is period will be deemed to have been limited as described in Section D. - known prior to the policy period. Liability And Medical Expenses Limits (2) To "personal and advertising injury" Of Insurance; and caused by an offense arising out of your (2) Our right and duty to defend ends when business, but only if the offense was we have used up the applicable limit of committed in the "coverage territory" insurance in the payment of judgments, during the policy period. settlements or medical expenses to which c. "Bodily injury" or "property damage" will be this insurance applies. deemed to have been known to have No other obligation or liability to pay sums or occurred at the earliest time when any perform acts or services is covered unless insured listed under Paragraph 1, of Section explicitly provided for under Coverage C. — Who Is An Insured or any "employee' Extension-Supplementary Payments. authorized by you to give or receive notice b. This insurance applies: of an"occurrence"or claim: (1) Reports all, or any part, of the "bodily (1) To "bodily injury" and "property injury" or "property damage" to us or damage"only if: any other insurer, Form SS 00 08 0405 Page 1 f 24 Cc? 2005i.ThP Hartford 807 BUSINESS LIABILITY COVERAGE FORM (2) Receives a written or verbal demand or b. We will make these payments regardless of claim for damages because of the"bodily fault, These payments will not exceed the injury'or"property damage";or applicable limit of insurance. We will pay (3) Becomes aware by any other means that reasonable expenses for: "bodily injury" or "property damage" has (1) First aid administered at the time of an occurred or has begun to occur, accident; d. Damages because of"bodily injury" include (2) Necessary medical, surgical, x-ray and damages claimed by any person or dental services, including prosthetic organization for care, loss of services or devices; and death resulting at any time from the "bodily (3) Necessary ambulance, hospital, injury professional nursing and funeral e. Incidental Medical Malpractice services. (1) "Bodily injury` arising out of the 3. COVERAGE EXTENSION - rendering of or failure to render SUPPLEMENTARY PAYMENTS professional health care services as a a. We will pay, with respect to any claim or physician, dentist, nurse, emergency medical technician or paramedic shall "suit" we investigate or settle, or any 'suit" against an insured we defend: be deemed to be caused by an 'occurrence", but only if: (1) All expenses we incur. (a) The physician, dentist, nurse, (2) Up to $1,000 for the cost of bail bonds emergency medical technician or required because of accidents or traffic paramedic is employed by you to law violations arising out of the use of provide such services;and any vehicle to which Business Liability (b) You are not engaged in the Coverage for"bodily injury" applies. We do not have to furnish these bonds. business or occupation of providing such services. (3) The cost of appeal bonds or bonds to (2) For the purpose of determining the release attachments, but only for bond limits of insurance for incidental medical amounts within the applicable limit of malpractice, any act or omission insurance. We do not have to furnish together with all related acts or these bonds, omissions in the furnishing of these (4) All reasonable expenses incurred by the services to any one person will be insured at our request to assist us in the considered one"occurrence". investigation or defense of the claim or 2. MEDICAL EXPENSES "suit", including actual loss of earnings up to $500 a day because of time off Insuring Agreement from work. a. We will pay medical expenses as described (5) All costs taxed against the insured in below for "bodily injury" caused by an the"suit". accident: (6) Prejudgment interest awarded against (1) On premises you own or rent; the insured on that part of the judgment (2) On ways next to premises you own or we pay. If we make an offer to pay the rent; or applicable limit of insurance, we will not (3) Because of your operations; pay any prejudgment interest based on that period of time after the offer. provided that: (7) All interest on the full amount of any (1) The accident takes place in the judgment that accrues after entry of the "coverage territory" and during the judgment and before we have paid, policy period; offered to pay, or deposited in court the (2) The expenses are incurred and reported part of the judgment that is within the to us within three years of the date of applicable limit of insurance. the accident; and Any amounts paid under (1) through (7) (3) The injured person submits to above will not reduce the limits of insurance, examination, at our expense, by physicians of our choice as often as we reasonably require. Pace 2 of 24 Form 5S 00 004 05 i BUSINESS LIABILITY COVERAGE FORM I b. If we defend an insured against a "suit' So long as the above conditions are met, and an indemnitee of the insured is also attorneys' fees incurred by us in the _ named as a party to the "suit", we will defense of that indemnitee, necessary defend that indemnitee if all of the litigation expenses incurred by us and following conditions are met. necessary litigation expenses incurred (1) The "suit" against the indemnitee by the indemnitee at our request will be seeks damages for which the insured paid as Supplementary Payments. has assumed the liability of the Notwithstanding the provisions of indemnitee in a contract or agreement Paragraph 1.b.(b) of Section B. - that is an "insured contract"; Exclusions, such payments will not be (2) This insurance applies to such liability deemed to be damages for "bodily assumed by the insured; 'injury" and "property damage" and will not reduce the Limits of Insurance. (3) The obligation to defend,or the cost of the defense of, that indemnitee, has Our obligation to defend an insured's also been assumed by the insured in indemnitee and to pay for attorneys' fees the same"'insured contract; and necessary litigation expenses as Supplementary Payments ends when: (4) The allegations in the "suit" and the information we know about the (1) We have used up the applicable limit "occurrence" are such that no conflict insurance in the payment of appears to exist between the interests judgments or settlements;or of the insured and the interest of the (2) The conditions set forth above, or the indemnitee; terms of the agreement described in (5) The indemnitee and the insured ask Paragraph(6)above,are no longer met, us to conduct and control the defense B. EXCLUSIONS of that indemnitee against such "suit" 1. Applicable To Business Liability Coverage and agree that we can assign the same counsel to defend the insured This insurance does not apply to: and the indemnitee;and a. Expected Or Intended Injury (6) The indemnitee: (1) 'Bodily injury" or "property damage" (a) Agrees in writing to: expected or intended from the (1) Cooperate with us in the standpoint of the insured. This exclusion does not apply to "bodily investigation, settlement or injury" or "property damage" resulting defense of the"suit'; from the use of reasonable force to (ii) Immediately send us copies of protect persons or property;or any demands, notices, (2) "Personal and advertising Injury" arising summonses or legal papers out of an offense committed by, at the received in connection with direction of or with the consent or the"suit'; acquiescence of the insured with the (111) Notify any other insurer whose expectation of inflicting "personal and coverage is available to the advertising injury", indemnitee;and b. Contractual Liability (iv) Cooperate with us with (1) "Bodily injury"or"property damage';or respect to coordinating other applicable insurance available (2) "Personal and advertising Injury" to the indemnitee; and for which the insured is obligated to pay (b) Provides us with written damages by reason of the assumption of authorization to: liability in a contract or agreement. (1) Obtain records and other This exclusion does not apply to liability information related to the for damages because of: "suit";and (a) "Bodily injury","property damage"or (ii) Conduct and control the "personal and advertising injury"that defense of the indemnitee in the insured would 'have in the such"suit". absence of the contract or agreement; or Form S5 00 08 04 05 Paoe 509f 24 i BUSINESS LIABILITY COVERAGE FORM (b) "Bodily injury"or"property damage" (b) Performing duties related to the assumed in a contract or agreement conduct of the insured's business,or that is an "insured contract", (2) The spouse, child, parent, brother or provided the "bodily injury" or sister of that "employee" as a "property damage" occurs consequence of(1)above. subsequent to the execution of the This exclusion applies: contract or agreement. Solely for the purpose of liability assumed in (1) Whether the insured may be liable as an "insured contract", reasonable an employer or in any other capacity; attorneys' fees and necessary and litigation expenses incurred by or for (2) To any obligation to share damages a party other than an insured are with or repay someone else who must deemed to be damages because of pay damages because of the injury. "bodily injury" or"property damage" This exclusion does not apply to liability provided: assumed by the insured under an"insured (i) Liability to such party for, or for contract". the cost of, that party's defense f. Pollution has also been assumed in the same"insured contract",and (1) "Badiiy injury", "property damage" or "personal and advertising injury" (11) Such attorneys' fees and arising out of the actual, alleged or litigation expenses are for threatened discharge, dispersal, defense of that party against a seepage, migration, release or escape civil or alternative dispute of"pollutants" resolution proceeding in which (a) At or from any premises, site or damages to which this insurance applies are alleged. location which is or was at any time owned or occupied by, or c. Liquor Liability rented or loaned to any insured. "Bodily injury" or "property damage" for However, this subparagraph does which any insured may be held liable by not apply to: reason of: (1) "Bodily Injury"if sustained within (1) Causing or contributing to the a building and caused by intoxication of any person; smoke, fumes, vapor or soot (2) The furnishing of alcoholic beverages to produced by or originating from a person under the legal drinking age or equipment that is used to heat, under the influence of alcohol;or cool or dehumidify the building, or equipment that is used to (3) Any statute, ordinance or regulation heal water for personal use, by relating to the sale, gift, distribution or the building's occupants or their use of alcoholic beverages. guests: This exclusion applies only if you are in the 11 "Bodilyinjury' "property or " e business of manufacturing, distributing, ( ) t e ry p p b selling, serving or furnishing alcoholic damage"for which you may be beverages. held liable, if you are a contractor and the owner or d. Workers' Compensation And Slmilar lessee of such premises,site or Laws location has been added to your Any obligation of the insured under a policy as an additional insured workers' compensation, disability benefits with respect to your ongoing or unemployment compensation law or operations performed for that any similar law. additional insured at that e. Employer's Liability premises, site or location and "Bodily injury"to: such premises, site or location (1) An "employee" of the insured arising is not and never was owned oroccupied by, or rented or out of and in the course of: loaned to, any insured, other (a) Employment by the insured;or than that additional insured; or Pace 4 of 24 Form SS 00 09164 05 BUSINESS LIABILITY COVERAGE FORM (iii)"Bodily injury" or "property released as part of the damage" arising out of heat, operations being performed smoke or fumes from a by such insured, contractor or "hostile fire"; subcontractor; (b) At or from any premises, site or (il) 'Bodily injury" or "property location which is or was at any damage" sustained within a time used by or for any insured or building and caused by the others for the handling, storage, release of gases, fumes or disposal, processing or treatment vapors from materials brought of waste; into that building in connection (c) Which are or were at any time with operations being performed transported, handled, stored, by you or on your behalf by a treated, disposed of, or processed contractor or subcontractor;or as waste by or for: (III) "Bodily injury" or "property (1) Any insured; or damage" arising out of heat, smoke or fumes from a (ii) Any person or organization for "hostile fire";or whom you may be legally responsible; (e) At or from any premises, site or location on which any insured or any (d) At or from any premises, site or contractors or subcontractors location on which any insured or working directly or indirectly on any any contractors or subcontractors insured's behalf are performing working directly or indirectly on operations if the operations are to any insured's behalf are test for, monitor, clean up, remove, performing operations if the contain, treat, detoxify or neutralize, "pollutants" are brought on or to or in anyway respond to, or assess the premises, site or location in the effects of,"pollutants". connection with such operations by such insured, contractor or (2) Any loss, cost or expense arising out subcontractor. However, this of any: subparagraph does not apply to: (a) Request, demand, order or statutory (1) 'Bodily injury" or "property or regulatory requirement that any damage" arising out of the insured or others test for, monitor, escape of fuels. lubricants or clean up, remove, contain, treat; other operating fluids which are detoxify or neutralize, or in any way needed to perform the normal respond to, or assess the effects of, electrical, hydraulic or "pollutants";or mechanical functions (b) Claim or suit by or on behalf of a necessary for the operation of governmental authority for "mobile equipment"or its parts, damages because of testing for, if such fuels, lubricants or other monitoring, cleaning up, removing, operating fluids escape from a containing, treating, detoxifying or vehicle part designed to hold, neutralizing, or in any way store or receive them. This responding to, or assessing the exception does not apply if the effects of, "pollutants". "bodily injury" or "property However, this paragraph does not damage" arises out of the apply to liability for damages because intentional discharge, dispersal of"property damage"that the insured or release of the fuels, would have in the absence of such lubricants or other operating request, demand, order or statutory or fluids, or if such fuels, regulatory requirement, or such claim lubricants or other operating or "suit" by or on behalf of a fluids are brought on or to the governmental authority. premises, site or location with the intent that they be discharged, dispersed or 811 Form SS 00 08 04 05 P arse 5 of 24 i I BUSINESS LIABILITY COVERAGE FORM g. Aircraft,Auto Or Watercraft (2) The use of "mobile equipment" in, or "Bodily injury' or"property damage" arising while in practice or preparation for, a out of the ownership, maintenance, use or prearranged racing, speed or entrustment to others of any aircraft, "auto" demolition contest or in any stunting or watercraft owned or operated by or rented activity, or loaned to any insured. Use includes t. Wa r operation and"loading or unloading". "Bodily injury", "property damage" or This exclusion applies even if the claims "persona! and advertising injury", however against any' insured allege negligence or caused,arising,directly or indirectly,out of: other wrongdoing in the supervision, hiring, {1) War, including undeclared or civil war; employment,training or monitoring of others by that insured, if the "occurrence" which (2) Warlike action by a military force, caused the "bodily injury" or "property including action in hindering or damage" involved the ownership, defending against an actual or maintenance, use or entrustment to others of expected attack, by any government, any aircraft; "auto' or watercraft that is sovereign or other authority using owned or operated by or rented or loaned to military personnel or other agents;or any insured. (3) Insurrection, rebellion, revolution, This exclusion does not apply to: usurped power, or action taken by governmental authority in hindering or (1) A watercraft while ashore on premises defending against any of these. you own or rent; j_ Professional Services (2) A watercraft you do not own that is: °Bodily injury", "property damage" or (a) Less than 51 feet long; and "personal and advertising injury" arising (b) Not being used to carry persons out of the rendering of or failure to render for a charge; any professional service, This includes (3) Parking an "auto" on, or on the ways but is not limited to: next to, premises you own or rent, (1) Legal; accounting or advertising provided the"auto" is not owned by or services; rented or loaned to you or the insured; (2) Preparing, approving, or failing to (4) Liability assumed under any "insured prepare or approve maps, shop contract" for the ownership, drawings, opinions, reports, surveys, maintenance or use of aircraft or field orders, change orders, designs or watercraft; drawings and specifications; (5) "Bodily injury" or "property damage" (3) Supervisory, inspection, architectural arising out of the operation of any of or engineering activities; the equipment listed in Paragraph f.(2) (4) Medical, surgical, dental, x-ray or or f.(3) of the definition of "mobile nursing services treatment, advice or equipment";or instruction; (6) An aircraft that is not owned by any (5) Any health or therapeutic service insured and is hired,chartered or loaned treatment,advice or instruction; with a paid crew. However, this (6) Any service, treatment, advice or exception does not apply if the insured instruction for the purpose of has any other insurance for such"bodily appearance or skin enhancement, hair injury" or "property damage", whether removal or replacement or personal the other insurance is primary, excess, grooming; contingent or on any other basis. h. Mobile Equipment (7) Optical or hearing aid services including the prescribing, preparation, "Bodily injury" or "property damage" f9tfing, demonstration or distribution of arising out of: ophthalmic lenses and similar (1) The transportation of"mobile equipment" products or hearing aid devices; by an "auto" owned or operated by or rented or loaned to any insured;or 812 Paae 6 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (8) Optometry or optometric services Paragraphs (1), (3) and (4) of this including but not limited to examination exclusion do not apply to "property of the eyes and the prescribing, damage" (other than damage by fire) to preparation, fitting,demonstration or premises, including the contents of such distribution of ophthalmic lenses and premises, rented to you for a period of 7 or similar products; fewer consecutive days. A separate Limit (9) Any. of Insurance applies to Damage To Premises Rented To You as described in (a) Body piercing (not including ear Section D.-Limits Of Insurance. piercing); Paragraph (2) of this exclusion does not (b) Tattooing, including but not limited apply if the premises are "your work" and to the insertion of pigments into or were never occupied, rented or held for under the skin; and rental by you. (c) Similar services; Paragraphs(3)and(4)of this exclusion do (10) Services in the practice of pharmacy; not apply to the use of elevators. and Paragraphs (3), (4), (5) and (6) of this (11) Computer consulting, design or exclusion do not apply to liability assumed programming services, including web under a sidetrack agreement, site design. Paragraphs(3) and(4)of this exclusion do Paragraphs(4)and(5)of this exclusion do not apply to "property damage" to not apply to the Incidental Medical borrowed equipment while not being used Malpractice coverage afforded under to perform operations at a job site. Paragraph 1.e, in Section A.-Coverages. Paragraph (6) of this exclusion does not k. Damage To Property apply to"property damage"included in the "Property damage"to: "products-completed operations hazard". (1) Property you own, rent or occupy, I. Damage To Your Product including any costs or expenses "Property damage" to "your product" incurred by you, or any other person, arising out of it or any part of it. organization or entity, for repair, m. Damage To Your Work replacement, enhancement, restoration or maintenance of such "Property damage" to "your work" arising property for any reason, including out of it or any part of it and incl uded in the prevention of injury to a person or "products-completed operations hazard". damage to another`s property; This exclusion does not apply if the (2) Premises you sell, give away or damaged work or the work out of which abandon,if the"property damage"arises the damage arises was performed on your out of any part of those premises; behalf by a subcontractor. (3) Property loaned to you; n. Damage To Impaired Property Or Property Not Physically Injured (4) Personal property in the care, custody or control of the insured; "Property damage" to "impaired properly" or property that has not been physically (5) That particular part of real property on injured, arising out of: which you or any contractors or subcontractors working directly or (1) A defect, deficiency, inadequacy or indirectly on your behalf are performing dangerous condition in "your product' operations, if the "property damage" or"your work"; or arises out of those operations;or (2) A delay or failure by you or anyone (6) That particular part of any property acting on your behalf to perform a that must be restored, repaired or contract or agreement in accordance replaced because "your work" was with its terms. incorrectly performed on it. This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical injury to "your product" or "your work" after it has been put to its intended use. I Form SS 00 08 04 05 P20e V&24 BUSINESS LIABILITY COVERAGE FORM o. Recall Of Products, Work Or Impaired (c) Title of any literary or artistic work; Property (8) Arising out of an offense committed by Damages claimed for any loss, cost or an insured whose business is: expense incurred by you or others far the (a) Advertising, broadcasting, loss of use, withdrawal, recall, inspection, publishing or telecasting; repair, replacement, adjustment, removal (b) Designing or determining content or disposal of: of web sites for others;or (1) "Your product"; (c) An Internet search, access, (2) "Your work"; or content or service provider. (3) "Impaired property"; However, this exclusion does not if such product, work or property is apply to Paragraphs a., b. and c. withdrawn or recalled from the market or under the definition of "personal and from use by any person or organization advertising injury" in Section G. — because of a known or suspected defect, Liability And Medical Expenses deficiency, inadequacy or dangerous Definitions. condition in it. For the purposes of this exclusion, p. Personal And Advertising Injury placing an "advertisement" for or "Personal and advertising injury": linking to others on your web site, by (1) Arising out of oral,written or electronic itself, is not considered the business publication of material, if done by or at of advertising, broadcasting, the direction of the insured with publishing or telecasting; knowledge of its falsity; (9) Arising out of an electronic chat room (2) Arising out of oral,written or electronic or bulletin board the insured hosts, publication of material whose first owns, or over which the insured publication look place before the exercises control; beginning of the policy period; (10) Arising out of the unauthorized use of another's name or product in your e-mail (3) Arising out of a criminal act committed address, domain name or metatags, or by or at the direction of the insured; any other similar tactics to mislead (4) Arising out of any breach of contract, another's potential customers; except an implied contract to use (11) Arising out of the violation of a another's "advertising idea" in your person's right of privacy created by "advertisement; any state or federal act. (5) Arising out of the failure of goods, However, this exclusion does not products or services to conform with apply to liability for damages that the any statement of quality or insured would have In the absence of performance made in your such state or federal act; "advertisement" (12) Arising out of: (6) Arising out of the wrong description of the price of goods,products or services; (a) An "advertisement' for others on (7) Arising out of any violation of any your web site; intellectual property rights such as (b) Placing a link to a web site of copyright, patent, trademark, trade others on your web site; name, trade secret, service mark or (c) Content from a web site of others other designation of origin or displayed within a frame or border authenticity. on your web site, Content includes However, this exclusion does not information, code, sounds, text, apply to infringement, in your graphics or images;or "advertisement",of (d) Computer code, software or (a) Copyright; programming used to enable: (b) Slogan, unless the slogan is also (1) Your web site; or a trademark, trade name, service (ii) The presentation or functionality mark or other designation of origin of an "advertisement" or other or authenticity; or content on your web site; 814 Paae 8 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (13) Arising out of a violation of any anti- (a) May be awarded or incurred by trust law; reason of any claim or suit (14) Arising out of the fluctuation in price or alleging actual or threatened injury value of any stocks, bonds or other or damage of any nature or kind to securities: or persons or property which would not have occurred in whole or in (15) Arising out of discrimination or part but for the"asbestos hazard"; humiliation committed by or at the direction of any "executive officer" (b) Arise out of any request, demand, director, stockholder, partner or order or statutory or regulatory member of the insured. requirement that any insured or others test for, monitor, clean up, q. Electronic Data remove, encapsulate, contain, Damages arising out of the loss of, loss of treat, detoxify or neutralize or in use of, damage to, corruption of, inability any way respond to or assess the to access, or inability to manipulate effects of an"asbestos hazard"; or "electronic data". (c) Arise out of any claim or suit for r. Employment-Related Practices damages because of testing for, "Bodily Inj ury"or"personal and advertising monitoring, cleaning up, removing, injury"to: encapsulating, containing, treating, (1) A person arising out of any: detoxifying or neutralizing or in any way responding to or assessing the (a) Refusal to employ that person; effects of an"asbestos hazard'. (b) Termination of that person's t. Violation Of Statutes That Govern E- employment;or Mails, Fax, Phone Calls Or Other (c) Employment-related practices, Methods Of Sending Material Or policies, acts or omissions, such as Information coercion, demotion, evaluation, 'Bodily injury', "property damage", or reassignment, discipline, "personal and advertising injury" arising defamation, harassment, humiliation directly or indirectly out of any action or or discrimination directed at that omission that violates or is alleged to person;or violate: (2) The spouse, child, parent, brother or (1) The Telephone Consumer Protection sister of that person as a Act(TCPA), including any amendment consequence of "bodily injury' or of or addition to such law; "personal and advertising injury"to the (2) The CAN-SPAM Act of 2003, including person at whom any of the any amendment of or addition to such employment-related practices described in Paragraphs(a), (b), or(c) law; or above is directed. (3) Any statute, ordinance or regulation, This exclusion applies: other than the TCPA or CAN-SPAM Act of 2003, that prohibits or limits the (1) Whether the insured may be liable as sending, transmitting, communicating or an employer or in any other capacity; distribution of material or information. and Damage To Premises Rented To You — (2) To any obligation to share damages Exception For Damage By Fire, Lightning with or repay someone else who must or Explosion pay damages because of the injury. Exclusions c. through h. and k.through o. do s. Asbestos not apply to damage by fire, lightning or (1) 'Bodily injury", "property damage" or explosion to premises rented to you or "personal and advertising injury" temporarily occupied by you with permission of arising out of the"asbestos hazard". the owner. A separate Limit of Insurance (2) Any damages, judgments, settlements, applies to this coverage as described in loss,costs or expenses that: Section D. - Liability And Medical Expenses Limits Of Insurance. Form SS 00 08 04 05 Paae 9tof 24 BUSINESS LIABILITY COVERAGE FORM 2. Applicable To Medical Expenses Coverage e. A trust, you are an insured. Your trustees We will not pay expenses for"bodily injury": are also insureds, but only with respect to their duties as trustees. a. Any Insured To any insured,except"volunteer workers". . 2. Each of the following is also an insured: b. Hired Person a. Employees And Volunteer Workers To a person hired to do work for or on behalf Your "volunteer workers" only while of any insured or a tenant of any insured. performing duties related to the conduct of C. Injury On Normally Occupied Premises your business, or your "employees", other than either your"executive officers"(if you To a person injured on that part of are an organization other than a premises you own or rent that the person partnership,joint venture or limited liability normally occupies. company) or your managers (if you are a d. Workers' Compensation And Similar limited liability company), but only for acts Laws within the scope of their employment by To a person, whether or not an you or while performing duties related to employee" of any insured, if benefits for the conduct of your business. the "bodily injury" are payable or must be However, none of these "employees" or provided under a workers' compensation "volunteer workers"are insureds for: or disability benefits law or a similar law. (1) "Bodily injury" or "personal and e. Athletics Activities advertising injury": To a person injured while practicing, (a) To you, to your partners or instructing or participating in any physical members (if you are a partnership exercises or games, sports or athletic or joint venture), to your members contests. (if you are a limited liability f. Products-Completed Operations Hazard company), or to a co-"employee" while in the course of his or her Included with the "products-completed employment or performing duties operations hazard". related to the conduct of your g. Business Liability Exclusions business, or to your other Excluded under Business Liability Coverage. "volunteer workers" while performing duties related to the C. WHO 13 AN INSURED conduct of your business; 1. If you are designated in the Declarations as: (b) To the spouse, child, parent, a. An individual, you and your spouse are brother or sister of that co- insureds, but only with respect to the "employee" or that "volunteer conduct of a business of which you are the worker" as a consequence of sole owner. Paragraph(1)(a)above; b. A partnership or joint venture, you are an (c) For which there is any obligation insured. Your members, your partners, and to share damages with or repay their spouses are also insureds,but only with someone else who must pay respect to the conduct of your business. damages because of the injury C. A limited liability company, you are an described in Paragraphs (1)(a) or above; or insured. Your members are also insureds, but only with respect to the conduct of your (d) Arising out of his or her providing business. Your managers are insureds, but or failing to provide professional only with respect to their duties as your health care services. managers. If you are not in the business of d. An organization other than a partnership, providing professional health care joint venture or limited liability company, you services, Paragraph (d) does not apply are an insured. Your"executive officers"and to any nurse, emergency medical directors are insureds, but only with respect technician or paramedic employed by to their duties as your officers or directors. you to provide such services. Your stockholders are also insureds,but only (2) "Property damage"to property: with respect to their liability as stockholders. (a) Owned, occupied or used by, 816 Paae 10 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM (b) Rented to, in the care, custody or b. Coverage under this provision does not control of, or over which physical apply to: control Is being exercised for any (1) "Bodily injury" or "property damage" purpose by you, any of your that occurred; or "employees", "volunteer workers", any partner or member(if you are (2) "Personal and advertising injury' a partnership or joint venture), or arising out of an offense committed any member (if you are a limited before you acquired or formed the liability company), organization. b. Real Estate Manager 4. Operator Of Mobile Equipment Any person(other than your"employee"or With respect to"mobile equipment" registered in "volunteer worker"), or any organization your name under any motor vehicle registration while acting as your real estate manager. law, any person is an insured while driving such c. Temporary Custodians Of Your equipment along a public highway with your Property permission. Any other person or organization responsible for the conduct of such person is Any person or organization having proper also an insured, but only with respect to liability temporary custody of your property if you arising out of the operation of the equipment, and die, but only: only if no other insurance of any kind is available (1) With respect to liability arising out of the to that person or organization for this liability. maintenance or use of that property,and However,no person or organization is an insured (2) Until your legal representative has with respect to: been appointed. a. "Bodily injury" to a co-"employee" of the d. Legal Representative If You Die person driving the equipment;or Your legal representative if you die, but b. "Property damage" to property owned by, only with respect to duties as such. That rented to, in the charge of or occupied by representative will have ail your rights and you or the employer of any person who is duties under this insurance. an'Insured under this provision. e. Unnamed Subsidiary 5. Operator of Nonowned Watercraft Any subsidiary and subsidiary thereof, of With respect to watercraft you do not own that yours which is a legally incorporated entity is less than 51 feet long and is not being used of which you own a financial interest of to carry persons for a charge, any person is an more than 50% of the voting stock on the insured while operating such watercraft with effective date of this Coverage Part. your permission. Any other person or The insurance afforded herein for any organization responsible for the conduct of subsidiary not shown in the Declarations such person is also an insured, but only with as a named insured does not apply to respect to liability arising out of the operation injury or damage with respect to which an of the watercraft, and only if no other insured under this insurance is also an insurance of any kind is available to that insured under another policy or would be person or organization for this liability. an insured under such policy but for its However, no person or organization is an termination or upon the exhaustion of its insured with respect to: limits of insurance. a. "Bodily injury" to a co-"employee" of the 3. Newly Acquired Or Formed Organization person operating the watercraft; or Any organization you newly acquire or form, b. "Property damage" to property owned by, other than a partnership, joint venture or rented to, in the charge of or occupied by limited liability company, and over which you you or the employer of any person who is maintain financial interest of more than 50% of an insured under this provision, the voting stock, will qualify as a Named 6. Additional Insureds When Required By Insured if there is no other similar insurance Written Contract, Written Agreement Or available to that organization. However: Permit a. Coverage under this provision is afforded The person(s) or organization(s) identified in only until the 180th day after you acquire Paragraphs a. through f. below are additional or form the organization or the end of the insureds when you have agreed, in a written policy period,whichever is earlier; and 817 Form SS 00 08 04 05 Paae 11 of 24 BUSINESS LIABILITY COVERAGE FORM contract, written agreement or because of a (e) Any failure to make such permit issued by a state or political inspections, adjustments, tests or subdivision, that such person or organization servicing as the vendor has be added as an additional insured on your agreed to make or normally policy, provided the injury or damage occurs undertakes to make in the usual subsequent to the execution of the contract or course of business, in connection agreement,or the issuance of the permit. with the distribution or sale of the A person or organization is an additional products; insured under this provision only for that Demonstration, installation, period of time required by the contract, servicing or repair operations, agreement or permit. except such operations performed However, no such person or organization is an all the vendor's premises in connection with the sale of the additional insured under this provision if such product; person or organization is included as an additional insured by an endorsement issued (g) Products which. after distribution by us and made a part of this Coverage Part, or sale by you, have been labeled including all persons or organizations added or relabeled or used as a as additional insureds under the specific container, part or ingredient of any additional insured coverage grants in Section other thing or substance by or for F.—Optional Additional Insured Coverages, the vendor;or a. Vendors (h) "Bodily Injury" or "property Any person(s)or organizations)(referred to damage" arising out of the sole below as vendor), but only with respect to negligence of the vendor for its own acts or omissions or those of "bodily injury" or "property damage" arising its employees or anyone else out of "your products"which are distributed acting on its behalf. However,this or sold in the regular course of the vendors exclusion does not apply to: business and only if this Coverage Part provides coverage for "bodily injury" or (1) The exceptions contained in "property damage" included within the Subparagraphs(d)or(f); or "products-completed operations hazard". (II) Such inspections, adjustments, (1) The insurance afforded to the vendor tests or servicing as the vendor is subject to the following additional has agreed to make or normally exclusions: undertakes to make in the usual course of business, in l his insurance does not apply to: connection with the distribution (a) "Bodily injury" or "property or sale of the products. damage" for which the vendor is (2) This insurance does not apply to any obligated to pay damages by insured person or organization from reason of the assumption of whom you have acquired such products, liability in a contract or agreement, or any ingredient, part or container, This exclusion does not apply to entering into, accompanying or liability for damages that the containing such products. vendor would have in the absence of the contract or agreement; b. Lessors Of Equipment (b) Any express warranty (1) Any person or organization from unauthorized by you, whom you lease equipment; but only (c) Any physical or chemical change with respect to their liability for "bodily injury", "property damage" or in the product made intentionally b the vendor; "personal and advertising injury" by caused, in whole or in part, by your (d) Repackaging, except when maintenance, operation or use of unpacked solely for the purpose of equipment leased to you by such inspection, demonstration, testing, person or organization, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; g g Paae 12 of 24 Form SS 00 08104 05 BUSINESS LIABILITY COVERAGE FORM (2) With respect to the insurance afforded e. Permits Issued By State Or Political to these additional insureds, this Subdivisions insurance does not apply to any (1) Any state or political subdivision, but "occurrence" which takes place after only with respect to operations you cease to lease that equipment. performed by you or on your behalf for c. Lessors Of Land Or Premises which the state or political subdivision (1) Any person or organization from has issued permit. whom you lease land or premises, but (2) With respect to the insurance afforded only with respect to liability arising out to these additional insureds, this of the ownership, maintenance or use insurance does not apply to; of that part of the land or premises (a) "Bodily injury", "property damage" leased to you. or "personal and advertising (2) With respect to the insurance afforded injury" arising out of operations to these additional insureds, this performed for the state or insurance does not apply to: municipality; or (a) Any 'occurrence" which takes (b) 'Bodily injury"or"property damage" place after you cease to lease that included within the "products- land or be a tenant in that completed operations hazard", premises;or f. Any Other Party (b) Structural alterations, new (1) Any other person or organization who construction or demolition is not an insured under Paragraphs a. operations performed by or on through e, above, but only with behalf of such person or respect to liability for "bodily injury", organization. "property damage" or "personal and d. Architects,Engineers Or Surveyors advertising injury" caused, in whole or (1) Any architect, engineer, or surveyor, but in part, by your acts or omissions or only with respect to liability for "bodily the acts or omissions of those acting injury", "property damage" or "personal on your behalf: and advertising injury" caused, in whole (a) In the performance of your or in part, by your acts or omissions or ongoing operations; the acts or omissions of those acting on (b) In connection with your premises your behalf: owned by or rented to you;or (a) In connection with your premises; (c) In connection with"your work"and or included within the "products- (b) In the performance of your completed operations hazard', but ongoing operations performed by only if you or on your behalf. (1) The written contract or written (2) With respect to the insurance afforded agreement requires you to to these additional insureds, the provide such coverage to following additional exclusion applies: such additional insured;and This insurance does not apply to (11) This Coverage Part provides "bodily injury", "property damage" or coverage for "bodily injury" or "personal and advertising injury" "property damage" included arising out of the rendering of or the within the "products- failure to render any professional completed operations hazard". services by or for you, including: (2) With respect to the insurance afforded (a) The preparing, approving, or to these additional insureds, this failure to prepare or approve, insurance does not apply to: maps, shop drawings, opinions, "Bodily injury", "property damage" or reports, surveys, field orders, "personal and advertising injury" change orders, designs or arising out of the rendering of, or the drawings and specifications; or failure to render, any professional (b) Supervisory, inspection, architectural, engineering or surveying architectural or engineering services, Including: activities, Form 55 00 08 04 05 Pao 1Tof 24 BUSINESS LIABILITY COVERAGE FORM (a) The preparing, approving, or This General Aggregate limit does not failure to prepare or approve, apply to—property damage" to premises maps, shop drawings, opinions, while rented to you or temporarily reports, surveys, field orders, occupied by you with permission of the change orders, designs or owner, arising out of fire, lightning or drawings and specifications;or explosion. (b) Supervisory, inspection, 3. Each Occurrence Limit architectural or engineering Subject to 2.a, or 2.b above, whichever activities. applies, the most we will pay for the sum of all The limits of insurance that apply to additional damages because of all "bodily injury", insureds are described in Section D. — Limits "property damage" and medical expenses Of Insurance. arising out of any one "occurrence" is the How this insurance applies when other Liability and Medical Expenses Limit shown In insurance is available to an additional insured the Declarations. is described in the Other Insurance Condition The most we will pay for all medical expenses in Section E.—Liability And Medical Expenses because of "bodily injury" sustained by any General Conditions. one person is the Medical Expenses Limit No person or organization is an insured with shown in the Declarations. respect to the conduct of any current or past 4. Personal And Advertising Injury Limit partnership, joint venture or limited liability Subject to 2.b. above, the most we will pay for company that is not shown as a Named Insured in the sum of all damages because of all the Declarations. "personal and advertising injury" sustained by D. LIABILITY AND MEDICAL EXPENSES any one person or organization is the Personal LIMITS OF INSURANCE and Advertising Injury Limit shown in the Declarations. 1. The Most We Will Pay 5. Damage To Premises Rented To You Limit The Limits of Insurance shown in the Declarations and the rules below fix the most The Damage To Premises Rented To You we will pay regardless of the number of: Limit is the most we will pay under Business Liability Coverage for damages because of a. Insureds; "property damage"to any one premises,while b. Claims made or"suits" brought; or rented to you, or in the case of damage by fire, c. Persons or organizations making claims or lightning or explosion, while rented to you or bringing"suits". temporarily occupied by you with permission of 2. Aggregate Limits the owner. The most we will pay for: In the case of damage by fire, lightning or explosion,the Damage to Premises Rented To a. Damages because of "bodily injury" and You Limit applies to all damage proximately "property damage" included in the caused by the same, event, whether such "products-completed operations hazard" its damage results from fire, lightning or explosion the Products-Completed Operations or any combination of these. Aggregate Limit shown in the 6. How Limits Apply To Additional Insureds Declarations. b. Damages because of ail other "bodily The most we will pay on behalf of a person or injury", "property damage" or "personal organization who is an additional insured and advertising injury", including medical under this Coverage Part is the lesser of. expenses, is the General Aggregate Limit a. The limits of insurance specified in a shown in the Declarations. written contract, written agreement or This General Aggregate Limit applies permit issued by a state or political separately to each of your "locations" subdivision;or owned by or rented to you. b. The Limits of Insurance shown in the "Location" means premises involving the Declarations. same or connecting lots, or premises Such amount shall be a part of and not in whose connection is interrupted only by a addition to the Limits of Insurance shown in street, roadway or right-of-way of a the Declarations and described in this Section. railroad. 820 Paae 14 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM If more than one limit of insurance under this (1) Immediately send us copies of any policy and any endorsements attached thereto demands: notices, summonses or applies to any claim or"suit", the most we will pay legal papers received in connection under this policy and the endorsements Is the with the claim or"suit'; single highest limit of liability of all coverages (2) Authorize us to obtain records and applicable to such claim or "suit". However, this other information; Paragraph does not apply to the Medical Expenses (3) Cooperate with us in the investigation, j limit set forth in Paragraph 3. above. settlement of the claim or defense The Limits of insurance of this Coverage Part apply against the"suit'; and separately to each consecultve annual period and to (4) Assist us, upon our request, in the any remaining period of less than 12 months,starting enforcement of any right against any with the beginning of the policy period shown in the person or organization that may be Declarations, unless the policy period is extended the insured because of injury after issuance for an additional period of less than 12 liable months. In that case, the additional period will be or damage which this insurance deemed part of the last preceding period for purposes may also appllyy., of determining the Limits of Insurance, d. Obligations At The Insureds Own Cost E. LIABILITY AND MEDICAL EXPENSES No insured will, except at that insured's own GENERAL CONDITIONS cost, voluntarily make a payment, assume any obligation, or incur any expense, other 1. Bankruptcy than for first aid,without our consent. Bankruptcy or insolvency of the insured or of e. Additional Insured's Other Insurance the Insured's estate will not relieve us of our If we cover a claim or "suit" under this obligations under this Coverage Part. Coverage Part that may also be covered 2. Duties In The Event Of Occurrence, by other insurance available to an Offense,Claim Or Suit additional insured, such additional insured a. Notice Of Occurrence Or Offense must submit such claim or "suit" to the other insurer for defense and indemnity. You or any additional Insured must see to it that we are notified as soon as However; this provision does not apply to practicable of an "occurrence or an the extent that you have agreed in a offense which may result in a claim. To written contract, written agreement or the extent possible, notice should include: permit that this insurance is primary and non-contributory with the additional (1) How,when and where the "occurrence" insured's own insurance. or offense took place f. Knowledge Of An Occurrence, Offense, . (2) The names and addresses of any Claim Or Suit injured persons and witnesses; and Paragraphs a, and b. apply to you or to (3) The nature and location of any injury any additional insured only when such or damage arising out of the 'occurrence", offense, claim or "suit" is "occurrence"or offense. known to: b. Notice Of Claim (1) You or any additional insured that is If a claim is made or "suit" is brought an individual; against any insured, you or any additional (2) Any partner, if you or an additional insured must: insured is a partnership; (1) Immediately record the specifics of the (3) Any manager, if you or an additional claim or "suit" and the date received; insured is a limited liability company, and (4) Any "executive officer" or insurance (2) Notify us as soon as practicable. manager, if you or an additional You or any additional insured must see to insured is a corporation; it that we receive a written notice of the (5) Any trustee, if you or an additional claim or"suit"as soon as practicable. insured is a trust;or c. Assistance And Cooperation Of The (6) Any elected or appointed official,if you Insured or an additional insured is a political You and any other involved insured must; subdivision or public entity, 821 Form SS 00 08 04 05 Paoe IS of 24 BUSINESS LIABILITY COVERAGE FORM This Paragraph f. applies separately to (3) We have issued this policy in reliance you and any additional insured. upon your representations. 3. Financial Responsibility Laws b. Unintentional Failure To Disclose a. When this policy is certified as proof of Hazards financial responsibility for the future under If unintentionally you should fail to disclose the provisions of any motor vehicle all hazards relating to the conduct of your financial responsibility law, the insurance business at the inception date of this provided by the policy for "bodily injury" Coverage Part, we shall not deny any liability and "property damage" liability will coverage under this Coverage Part comply with the provisions of the law to because of such failure. the extent of the coverage and limits of 7, Other Insurance insurance required by that law. If other valid and collectible insurance is b. With respect to "mobile equipment" to available for a loss we cover under this which this insurance applies, we will Coverage Part, our obligations are limited as provide any liability, uninsured motorists, follows: underinsured motorists, no-fault or other coverage required by any motor vehicle a. Primary insurance law. We will provide the required limits for This insurance is primary except when b. those coverages. below applles. If other insurance is also 4. Legal Action Against Us primary, we will share with all that other No person or organization has a right under insurance by the method described in c. below. this Coverage Farm: b. Excess Insurance a. To join us as a party or otherwise bring us into a "suit" asking for damages from an This insurance its excess over any of the insured: or other insurance, whether primary, excess, b. To sue us on this Coverage Form unless contingent or on any other basis: all of its terms have been fully complied (1) Your Work with. That is Fire, Extended Coverage, A person or organ€zatian may sue us to recover Builder's Risk, Installation Risk or on an agreed settlement or on a final judgment similar coverage for"your work"; against an insured; but we will not be liable for (2) Premises Rented To You damages that are not payable under the terms of That is fire, lightning or explosion this insurance or that are in excess of the insurance for premises rented to you applicable limit of insurance, An agreed or temporarily occupied by you with settlement means a settlement and release of liability signed by us, the insured and the permission of the owner; claimant or the claimant's legal representative. (3) Tenant Liability 5. Separation Of Insureds That is insurance purchased by you to Except with respect to the Limits of Insurance, cover your [lability as a tenant far 11 and any rights or duties specifically assigned property damage to premises rented in this policy to the first Named Insured; this to you or temporarily occupied by you with permission of the owner; insurance applies: a. As if each Named Insured were the only (4) Aircraft,Auto Or Watercraft Named Insured;and If the loss arises out of the maintenance b. Separately to each insured against whom or use of aircraft "autos"or watercraft to a claim is made or"suit"is brought. the extent not subject to Exclusion g. of Section A.—Coverages. 6. Representations (5) Property Damage To Borrowed a. When You Accept This Policy Equipment Or Use Of Elevators By accepting this policy, you agree: If the loss arises out of "property (1) The statements in the Declarations damage" to borrowed equipment or are accurate and complete; the use of elevators to the extent not (2) Those statements are based upon subject to Exclusion k. of Section A.— representations you made to us;and Coverages, 822 Paae 16 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. Underthis 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 or part of any payment, defend the insured against any"suit"if any 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. 882 Form SS 00 08 04 05 Pace 17of 24 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, emended 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 1S 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 performed by or on behalf of such Subdivision Permits 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 824 Pace 18 of 24 Form SS 00 08 04 0S 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: {fj Demonstration, installation, This insurance does not apply to: servicing or repair operations, except such operations performed (1) "Bodily injury", "property damage" or 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 (g) Products which, after distribution (2) "Bodily injury' or property damage" 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 vendors (i) The exceptions contained in business and only if this Coverage Part Subparagraphs(d)or (f);or provides coverage for "bodily injury" or (lij Such inspections, "property damage" included within the "products-completed operations hazard". adjustments, tests or servicing as the vendor has agreed to b. The insurance afforded to the vendor is make or normally undertakes subjecttothe 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 1S 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 organizations) 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 Paoe 1Fof 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 indude 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; b. The Internet, but only that part of a web (2) In connection with "your work" performed fnr 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 injury" arising out of the rendering of, or among persons through a computer network. 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: 826 Pafie 20 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM a. The United States of America(including its b. You have failed to fulfill the terms of a territories and possessions), Puerto Rico contract or agreement; and Canada; if such property can be restored to use by: b. International waters or airspace, but only if a. The repair, .replacement, adjustment or . the injury or damage occurs in the course removal of "your product" or "your work"; of travel or transportation between any or places included in a.above; b. Your fulfilling the terms of the contract or c. All other parts of the world if the injury or agreement. damage arises out of: 12. "insured contract" means: (1) Goods or products made or sold by you in the territory described in a.above; a. A contract for a lease of premises. However, that portion of the contract for a (2) The activities of a person whose home lease of premises that indemnifies any is in the territory described in a. person or organization for damage by fire, above, but is away for a short time on lightning or explosion to premises while your business;or rented to you or temporarily occupied by (3) "Personal and advertising injury" you with permission of the owner is offenses that take place through the subject to the Damage To Premises Internet or similar electronic means of Rented To You limit described in Section communication D. — Liability and Medical Expenses Limits provided the insured's responsibility to pay of Insurance. damages is determined in the United States of b. A sidetrack agreement; America (including its territories and c. Any easement or license agreement, possessions), Puerto Rico or Canada, in a including an easement or license "suit" on the merits according to the agreement in connection with construction substantive law in such territory, or in a or demolition operations on or within 50 i settlement we agree to. feet of a railroad; 7. "Electronic data" means information, facts or d. Any obligation, as required by ordinance, programs: to indemnify a municipality, except in a. Siored as or on; connection with work for a municipality; b. Created or used on; or e. An elevator maintenance agreement;or c. Transmitted to or from f. That part of any other contract or computer software, including systems and agreement pertaining to your business applications software, hard or floppy disks, (including an indemnification of a CD-ROMS, tapes, drives, cells, data municipality in connection with work processing devices or any other media which performed for a municipality) under which are used with electronically controlled you assume the tort liability of another equipment. party to pay for"bodily injury" or "property 8. "Employee" includes a "leased worker`. damage"to a third person or organization, "Employee" does not include a "temporary provided the "bodily injury' or "property damage"is caused, in whole or in part, by worker". you or by those acting on your behalf. 9. "Executive officer" means a person holding Tort liability means a liability that would be any of the officer positions created by your imposed by law in the absence of any charter, consfitution, by-laws or any other contract or agreement. similar governing document. Paragraph f. includes that part of any 10. "Hostile fire" means one which becomes contract or agreement that indemnifies a uncontrollable or breaks out from where it was railroad for "bodily injury" or "property intended to be. damage" arising out of construction or 11. "Impaired property' means tangible property, demolition operations within 50 feet of any other than "your product" or "your work", that railroad property and affecting any railroad cannot be used or is less useful because: bridge or trestle, tracks, road-beds,tunnel, a. It incorporates"your product' or "your work" underpass or crossing. that is known or thought to be defective, However, Paragraph f. does not include deficient,inadequate or dangerous;or that part of any contract or agreement: I 827 Form SS 00 08 04 05 Paoe 21 of 24 BUSINESS LIABILITY COVERAGE FORM (1) That indemnifies an architect, (1) Power cranes, shovels, loaders, engineer or surveyor for injury or diggers or drills; or damage arising out of: (2) Road construction or resurfacing (a) Preparing, approving or failing to equipment such as graders, scrapers prepare or approve maps, shop or rollers: drawings, opinions, reports, e. Vehicles not described in a., b., c., or d. surveys, field orders, change above that are not self-propelled and are orders, designs or drawings and maintained primarily to provide mobility to specifications; or permanently attached equipment of the (b) Giving directions or instructions, following types: or failing to give them, if that is the (1) Air compressors, pumps and primary cause of the injury or generators, including spraying, damage; or welding, building cleaning, (2) Under which the insured, if an geophysical exploration, lighting and architect, engineer or surveyor, well servicing equipment; or assumes liability for an injury or (2) Cherry pickers and similar devices damage arising out of the insured's used to raise or lower workers; rendering or failure to render professional services, including those f. Vehicles not described in a., b., c., or d. listed in {1) above and supervisory, above maintained primarily for purposes other than the transportation of persons or inspection, architectural or engineering activities. cargo. 13. "Leased worker" means a person leased to However, self-propelled vehicles with the following types of permanently attached you by a labor leasing firm under an equipment are not "mobile equipment" but agreement between you and the labor leasing will be considered"autos": firm,to perform duties related to the conduct of your business. "Leased worker" does not (1) Equipment, of at least 1,000 pounds include a"temporary worker". gross vehicle weight; designed 14. "Loading or unloading" means the handling of primarily for: property: (a) Snow removal; a. After it is moved from the place where it is (b) Road maintenance, but not accepted for movement into or onto an construction or resurfacing; or aircraft,watercraft or"auto"; (c) Street cleaning; b. While it is in or on an aircraft,watercraft or (2) Cherry pickers and similar devices "auto';or mounted on automobile or truck c. While it is being moved from an aircraft, chassis and used to raise or lower watercraft or"auto" to the place where it is workers;and finally delivered; (3) Air compressors, pumps and but "loading or unloading" does not include the generators, including spraying, movement of property by means of a mechanical welding, building cleaning, device, other than a hand truck, that is not geophysical exploration, lighting and attached to the aircraft,watercraft or"auto". well servicing equipment. 15. "Mobile equipment"means any of the following 16. "C=rrence" means an accident including types of land vehicles, including any attached continuous or repeated exposure to substantially machinery or equipment: the same general harmful conditions. a. Bulldozers, farm machinery, forklifts and 17. "Personal and advertising injury"means injury, other vehicles designed for use principally including consequential "bodly injury', arising off public roads; out of one or more of the following offenses: b. Vehicles maintained for use solely on or a. False arrest,detention or imprisonment; next to premises you own or rent; b. Malicious prosecution; c. Vehicles that travel on crawler treads; d. Vehicles, whether self-propelled or not, on which are permanently mounted: 828 Pace 22 of 24 Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM c. The wrongful eviction from, wrongful entry Work that may need service, maintenance, into, or invasion of the right of private correction, repair or replacement, but occupancy of a room, dwelling or which is otherwise complete, will be premises that the person occupies, treated as completed. committed by or on behalf of its owner, The "bodily injury" or "property damage" landlord or lessor; must occur away from premises you own d. Oral, written or electronic publication of or rent, unless your business includes the material that slanders or libels a person or selling, handling or distribution of "your organization or disparages a person's or product" for consumption on premises you organization's goods, products or services; own or rent, e. Oral, written or electronic publication of b. Does not include "bodily injury" or material that violates a person's right of "property damage"arising out of: privacy, 1 The transportation of property, { } p p p rty, unless f. Copying, in your "advertisement", a the injury or damage arises out of a person's or organization's "advertising condition in or on a vehicle not owned idea"or style of"advertisement", or operated by you, and that condition g. Infringement of copyright, slogan, or title of was created by the "loading or any literary or artistic work, in your unloading" of that vehicle by any "advertisement"; or insured;or h. Discrimination or humiliation that results in (2) The existence of tools, uninstalled injury to the feelings or reputation of a equipment or abandoned or unused natural person, materials. 18. "Pollutants" means any solid, liquid, gaseous or 20. "Property damage"means: thermal irritant or contaminant; including smoke, a. Physical injury to tangible property, vapor, soot, fumes, acids, alkalis, cherrucals and including all resulting loss of use of that waste. Waste includes materials to be recycled, property. All such loss of use shall be reconditioned or reclaimed. deemed to occur at the time of the 19. 'Products-completed operations hazard"; physical injury that caused it; or a. Includes all "bodily injury" and "property b. Loss of use of tangible property that is not damage" occurring away from premises physically injured. All such loss of use you own or rent and arising out of "your shall be deemed to occur at the time of product"or"your work"except: "occurrence"that caused it. (1) Products that are still in your physical As used in this definition, "electronic data" is possession;or not tangible property. (2) Work that has not yet been completed 21. "Suit" means a civil proceeding in which or abandoned. However, "your work" damages because of "bodily injury", "property will be deemed to be completed at the damage" or "personal and advertising injury" earliest of the following times: to which this insurance applies are alleged. (a) When all of the work called for in "Suit" includes: your contract has been completed. a. An arbitration proceeding in which such (b) When all of the work to be done at damages are claimed and to which the the job site has been completed if insured must submit or does submit with your contract calls for work at our consent; or more than one job site. b, Any other alternative dispute resolution (c) When that part of the work done at proceeding in which such damages are a job site has been put to its claimed and to which the insured submits intended use by any person or with our consent. organization other than another 22. "Temporary worker" means a person who is contractor or subcontractor furnished to you to substitute for a permanent working on the same project, "employee" on leave or to meet seasonal or short-term workload conditions. 23. "Volunteer worker"means a person who: a. Is not your"employee"; 829 Form SS 00 08 04 05 Pace 23 of 24 BUSINESS LIABILITY COVERAGE FORM b. Donates his or her work; (2) The providing of or failure to provide c. Acts at the direction of and within the warnings or instructions, scope of duties determined by you; and c. Does not include vending machines or d. Is not paid a fee, salary or other other property rented to or located for the compensation by you or anyone else for use of others but not sold. their work performed for you. 25. "Your work": 24. "Your product": a. Means: a. Means: (1) Work or operations performed by you (1) Any goods or products, other than real or on your behalf;and property,manufactured, sold, handled, (2) Materials, parts or equipment distributed or disposed of by: furnished in connection with such work (a) You; or operations. (b) Others trading under your name; b. Includes: or (1) Warranties or representations made at (c) A person or organization whose any time with respect to the fitness, business or assets you have quality, durability, performance or use acquired;and of"your work"; and (2) Containers (other than vehicles), (2) The providing of or failure to provide materials, parts or equipment warnings or instructions. furnished in connection with such goods or products, b. Includes: (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of"your product"; and 830 Pace 24 of 24 Form SS 00 0$04 05 ATTACHMENT # 10 EXHIBIT C-6 PRC 6616.1 SUBLEASE ENDORSEMENT STATE OF CALIFORNIA STATE LANDS COMMISSION Pursuant to Commission Minute Item No.TBD dated, June 21, 2018, the herein sublease between the City of Huntington Beach and Abercrombie & Fitch Company, Abercrombie & Fitch Trading Company, and J.M. Hollister, LLC (collectively referred to as "Abercrombie") under a portion of State Lease PRC No. 6616.1, is hereby approved. BY: _ ROBERT BRIAN BUGSCH, Chief Land Management Division 831 Dept.ID CS 14-023 Page 9 of 3 Meeting Date:10/6/2014 CITY OF HUNTINGTON BEACH REQUEST FOR. CITY COUNCIL ACTION MEETING DATE: 10/6/2014 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Janeen Laudenback, Director of Community Services SUBJECT: Approve and authorize execution of an amended and reinstated License Agreement with Abercrombie & Fitch Co. for video authorization at the Huntington Beach Municipal Pier I Statement of Issue: On July 19, 2004, the City entered into a five-year agreement with Hollister LLC, to allow live video feed from the Huntington Beach Pier in its clothing stores nationwide. This agreement was extended in 2008. Hollister has determined that it no longer needs to provide a live video feed and would prefer to utilize recorded video feeds from the pier to display in certain stores worldwide.' Through their parent company, Abercrombie and Fitch Co., (Abercrombie) Hollister has requested that the agreement be amended and restated to allow for recorded video footage taken from the pier and transfer the ownership of the cameras and related equipment to the City. Council is being asked to approve the amended and restated agreement. I Financial Impact: The City will receive an annual license fee of $116,000 plus an inflationary factor of three percent (3%) per year. Annual revenues will be deposited into General Fund Property/Equipment Lease- Beach account 10000100,43105. Additionally, the City shall receive a total of $50,000 for Marine j Safety purposes each time the new agreement is extended for five-years. i Recommended Action: I Approve authorize the Mayor and City Clerk to execute the "Amended and Restated City Agreement"with Abercrombie and Fitch Co. to allow for video recording from the Huntington Beach Pier up to four (4) times per year for up to five (5) consecutive days and, to transfer the ownership =. of the nine (9)video cameras and monitors used for live video streaming to the City. Alternative Actions): Do not approve the amended and restated agreement with Abercrombie and Fitch Co. and direct staff accordingly, I Analysis: Hollister stores are limited liability companies comprised of J.M. Hollister, Hollister Michigan, Hollister Ohio, and Hollister California. Its parent company is Abercrombie and Fitch Co. (Abercrombie). In 2004, Hollister approached the City with an advertizing concept to stream live video feed taken from the Huntington Beach Pier into its stores nationwide. The goal of the concept was to create a casual beach atmosphere in its stores to target their core clientele — teens and young adults. On July 19, 2004, the City approved a license agreement with Hollister to place two (2) fixed focal cameras under the pier. In 2008, the agreement was extended and allowed for the 832 HB -?S i- Item 15. - I AMENDED AND RESTATED CITY AGREEMENT This AMENDED AND RESTATED CITY AGREEMENT (this "Agreement"), is made this 6W day of October, 2014(the"Effective Date"), by and between the City of Huntington Beach, a municipal corporation (the "City"), on the one hand, and Abercrombie & Fitch Co. (a Delaware corporation), Abercrombie & Fitch Trading Co. (an Ohio corporation), and J.M. Hollister, LLC (a Delaware limited liability company) (hereinafter referred to collectively as "Abercrombie"), on the other hand. RECITALS A. City is the owner of the Huntington Beach Pier located within the City of Huntington Beach. B, City on the one hand and J.M. Hollister, LLC, Hollister Michigan, LLC, Hollister Ohio, LLC, and Hollister California, LLC on the other hand were parties to that certain License Agreement dated July 30, 2004 (the "Original Agreement'). Hollister Michigan, LLC, Hollister Ohio, LLC, and Hollister California, LLC no longer exist and have been merged into entities owned and controlled by Abercrombie & Fitch Co. and/or Abercrombie & Fitch Trading Co. Pursuant to the Original Agreement, Abercrombie was granted a license to install, operate and maintain camera equipment to broadcast a live video feed of Huntington Beach to certain Hollister Co.stores across the United States ("Live Video Feed"). C. City and Abercrombie are parties to that certain City Agreement dated August 4, 2008 (the "City Agreement") that terminated, amended and restated the Original Agreement. The City Agreement permitted Abercrombie to install, operate and maintain a total of nine cameras and related equipment to broadcast the Live Video Feed (collectively, the `Existing Camera Equipment'). This Agreement is intended to replace the City Agreement in its j entirety, and upon the Effective Date of this Agreement, the City Agreement shall terminate and no longer be in effect. I 1 D. Abercrombie has determined that it no longer needs to provide a Live Video Feed and would prefer to utilize recorded video feeds fro►n the Huntington Beach Pier to display in certain or all of its stores worldwide and related purposes ("Recorded Content'). Abercrombie desires to record video from the Huntington Beach Pier on a certain limited number of visits per year to capture the Recorded Content, as described further below in Section 3. j E. City desires to assume full ownership and possession free of charge for the Existing Camera Equipment for public safety purposes. (00004916.Docx 18) 833 NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and conditions contained herein, and other valuable consideration,the receipt ofwhich is hereby acknowledged, the City and Abercrombie do hereby agree as follows: 1. Transfer of Existing Camera Equipment. Pursuant to the Original Agreement, Abercrombie installed two 21-inch flat panel monitors and related equipment at the Moorhouse Lifeguard Headquarters facility to display the Live Video Feed from the two original cameras. Pursuant to the City Agreement, Abercrombie provided seven additional monitors for the additional views available from the seven additional cameras (collectively, the nine installed monitors and related equipment at the Moorhouse Lifeguard Headquarters facility shall be referred to herein as the "Monitor Equipment"). As of the Effective Date, Abercrombie agrees to transfer to the City free of charge full ownership and possession of the Existing Camera Equipment and Monitor Equipment. As of the Effective Date, the City agrees to assume and take full ownership and possession of the Existing Camera Equipment and Monitor Equipment and any liability associated therewith. The City agrees that the Live Video Feed shall be used solely by the City for public safety purposes only and no other person or entity other than the City may use such Live Video Feed or Existing Camera Equipment for any other purpose. 2. License Area. The area subject to this License (the "License Area") includes those areas of the Huntington Beach Pier designated on Exhibit A attached hereto and related access paths to and from the designated areas. The License Area may also include other areas of the Huntington Beach Pier with prior approval by the City, which shall not be unreasonably withheld. 3. Grant of License, e e The City hereby grants to Abercrombie a license to use the License Area for tile purposes of filming, recording and capturing the Recorded Content pursuant to the Work Plan attached hereto as Exhibit B for the Term of the Agreement (the "License"). The scope of the License shall be further defined by the following: a. The City grants Abercrombie access to the License Area up to four (4) times a year for up to five (5) consecutive days on each visit (the "Recording Visit"). On each Recording Visit, Abercrombie shall be permitted to record continuously on a daily basis from one hour before sunrise to one hour after sunset with a production crew of up to approximately six (6) cameras and related crew members. i b. On an annual basis, Abercrombie agrees to provide the City with a list of desired dates for the four (4) Recording Visits ("Recording Visit Dates"). The City agrees to review such list within ten (10) business days from receipt and to work cooperatively in good faith with Abercrombie to finalize the Recording Visit Dates expeditiously and in no event later than twenty (20) business days after receipt of such list. The Parties acknowledge and agree that the City shall provide Abercrombie with priority status in finalizing the Recording Visit Dates with the exception of certain dates associated with events exclusively occupying the Huntington {00004916.DOCX/8 2 834 Beach Pier and surrounding areas. In the event that a scheduled Recording Visit needs to be cancelled for any reason, including, without limitation, for the lack of sunlight or other weather condition, Abercrombie shall provide a written cancellation notice to the City as soon as reasonably practicable. The City shall have the right to cancel any scheduled Recording Visit for an emergency or health and safety reason associated with the License Area, and shall provide a written cancellation notice to Abercrombie as soon as reasonably practicable after any such determination. In the event of any cancellation, the Parties agree to work cooperatively in good faith to promptly reschedule the cancelled Recording Visit, if deerned necessary by Abercrombie. C. The City agrees to process expeditiously any necessary permits or approvals for Abercrombie's intended use of the License Area. d. The City agrees to provide Abercrombie access to parking areas near the Huntington Beach Pier at no additional cost. C. Abercrombie acknowledges and agrees that the City is not endorsing the products or advertising of Abercrombie or Hollister by the grant of this License. 4. Term of Agreement. This Agreement shall be for a term of five (5) years ("Term") commencing upon the Effective Date of this Agreement, and shall be automatically extended for an additional four (4) successive five-year terns after the expiration of the Term, provided the Agreement has not been earlier terminated as provided herein. i a 5. Payment. a. I Abercrombie shall pay to the City $116,000 per year commencing upon the Effective Date of this Agreement (the "License Fee"). The License Fee shall be increased on each annual anniversary of the Effective Date by three (3) percent per year. b. Abercrombie shall pay the License Fee to the City on an annual basis on each anniversary of the Effective Date through and until the termination of this Agreement. i C. Abercrombie shall also pay $50,000 each time the Term of this Agreement is extended for five years as consideration for the rights granted hereto. Abercrombie agrees that the amount described above shall be provided to the City for marine safety purposes. The $50,000 payment shall be paid by Abercrombie to the City within thirty (30) days after the commencement of each new five(5) year term. d. Abercrombie shall configure the Recorded Content to exhibit the text"Huntington Beach, Surf City, USA©" on all video wall displays. The size of the text shall be legible with a minimum and maximum size of text to be determined subject to the City's reasonable approval. The Parties acknowledge and agree that this text shall not be associated with any advertising slogan or symbol. 00004 4!G_DOCX i 8) 3 835 6. Safely Requirements. In exchange for the License granted above, Abercrombie agrees that it shall not suffer or permit any dangerous condition to be created, exist, or continue on the License Area as a result of its activities associated with the Recorded Content; and, that all of its acts and those of its contractors and subcontractors shall be carried out in a careful and reasonable manner. Abercrombie acknowledges and agrees that the City shall not be held responsible or liable for any damage to the recording equipment for Recorded Content caused by disasters, riots, fires, vandals, storms, waves, water,wind and/or earthquakes. 7. Commercial Filming Permit. City hereby grants to Abercrombie a Commercial Filming Permit during the Term of the Agreement, as may be extended, free of charge. See Commercial Filming Permit attached hereto as Exhibit C. 8. Condition of License Area. Abercrombie acknowledges that it shall enter the License Area at its own risk, and that neither the City nor any of its officers, employees, agents, or contractors have made any warranty or representation to Abercrombie with regard to the safe condition of the License Area. 9. Indemnification Defense, Hold Harmless. Abercrombie shall protect, defend, indemnify and save and hold harmless City, its officers, officials, employees, and agents from and against any and all liability, loss, damage, expenses, costs (including without limitation costs and fees of litigation of every nature) arising out of or in connection with Abercrombie's performance of this Agreement or Abercrombie's failure to comply with any of Abercrombie's obligations contained in the Agreement by Abercrombie, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of City. City shall be reimbursed by Abercrombie for j all costs and attorney's fees incurred by City in enforcing this obligation. i 10. Worker's Compensation and Employers' Liability Insurance. Pursuant to California Labor Code Section 186I, Abercrombie acknowledges awareness of Section 3700 et seq. of said Code, which requires every employer to be insured against liability for workers' compensation; Abercrombie covenants that it will comply with such provisions prior to commencing performance of the work hereunder; and shall indemnify, defend and hold harmless City from and against all claims, demands, payments, suit, actions, proceedings, and judgments of every nature and description, including attorney's fees and costs presented, brought Or recovered against City, for or on account of any liability under any of said acts which may be incurred by reason of any work to be performed by Abercrombie under this Agreement. Abercrombie shall maintain workers' compensation and employers' liability in amounts not less than the State statutory limits. (0000491 b.DOCX/8) 4 836 11. General Liability Insurance. In addition to the workers' compensation and employers' liability insurance and Abercrombie's covenant to indemnify City, Abercrombie shall obtain and furnish to City, a policy of general public liability insurance, including automotive bodily injury and property damage insurance covering the License Area. The policy shall indemnify Abercrombie, its officers, agents and employees, while acting within the scope of their duties, against any and all claims arising out of or in connection with the License Area, and shall provide coverage in not less than the following amount: combined single limit bodily injury, persona] 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 general aggregate limit, the aggregate limit must be no less than one million dollars ($1,000,000.00) for the License Area. The policy shall name City, its agents, officers, employees and volunteers as additional insureds, and shall specifically provide that any insurance coverage which may be applicable to the License Area shall be deemed excess coverage and that Abercrombie's insurance shall be primary. 12. Property Insurance. Before entering the License Area, Abercrombie shall provide property insurance with extended coverage endorsements thereon, on the License Area in an amount equal to the full replacement cost thereof, this policy shall be on a replacement cost basis and shall not contain a coinsurance penalty provision. In the event of loss, the policy proceeds shall be used to repair or rebuild any such improvements so damaged or destroyed; and if not so used, such proceeds shall be paid to City. The proceeds of any such insurance payable to City shall be used for rebuilding or repair as necessary to restore the License Area and at the sole discretion of City. The policy shall name City as an additional insured. The policy or policies shall also contain the following: l. The insurer will not cancel or reduce the insured's coverage without thirty (30)days prior written notice to City;and 1 i 2. City will not be responsible for premiums or assessments on the policy. 1 A complete and signed certificate of insurance required by this Section shall be filed with City prior to the execution of this Agreement. At least thirty (30) days prior to the expiration of any such policy, a signed and complete certification of insurance showing that coverage has been renewed, shall be filed with City. Upon request, Abercrombie shall furnish City a certified copy of the applicable policy within fifteen(15) days. (00004916.DOCX 181 5 837 13. Certificates of Insurance; Additional Endorsements. Prior to the execution of this Agreement, Abercrombie shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Agreement;these certificates shall: a, provide the name and policy number of each carrier and policy; b. state that the policy is currently in force; and C. promise that such policies shall not be suspended, voided or canceled by either Party, reduced in coverage or in limits except after thirty (30) days' prior written notice; however,ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. Abercrombie shall maintain the foregoing insurance coverages in force during the entire Tenn of this Agreement or any renewal Term(s), including any holdover periods. The requirement for carrying the foregoing insurance coverages shall not derogate from the provisions for indemnification of City by Abercrombie under the Agreement. City or its representatives shall at all times have the right to demand the original or a copy of all said applicable policies of insurance. Abercrombie shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. 14. Insurance Proceeds. Any insurance proceeds received by City because Of the total or partial destruction of said License Area or any buildings on said License Area shall be the sole property of City. 15. Insurance Hazards. Abercrombie shall not commit or permit the commission of any acts on said License Area nor use or permit the use of said License Area in any manner that will increase the existing rates for or cause the cancellation of any property, liability or other insurance policy insuring the Huntington Beach Pier, said License Area or the improvements on said License Area. Abercrombie shall, at its sole cost and expense, comply with any and all requirements of insurance carriers necessary for the continued maintenance at reasonable rates of property, liability and other insurance policies On the Huntington Beach Pier and License Area, 16. Notice. Any written notice or required submittals, given under the terms of this Agreement, shall be delivered personally, or mailed, certified mail, postage prepaid, addressed to the Party concerned as follows: (00004916.DOCX!8) 6 838 To City: CITY OF HUNTINGTON BEACH Attn:Janeen Laudenback Community Services Department 2000 Main Street Huntington Beach, CA 92648 Phone: (714) 374-5309 2nd Copy to City: CITY CLERK CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach;CA 92648 To Abercrombie: Reid Wilson, Esq, Abercrombie&Fitch 6301 Fitch Path New Albany, OH 43054 (614) 283-6131 2"d Copy to Abercrombie: Francis Park, Esq. Park&Velayos LLP 801 South Figueroa Street, Suite 450 Los Angeles, California 90017 (213) 570-8000 City or Abercrombie may from time to time designate any other address for this purpose by written notice to the other Party. 17. Termination. This Agreement may be terminated by Abercrombie upon thirty (30) days written notice to the City, provided, however, that if Abercrombie elects to terminate this Agreement prior to the expiration of the Term, as may be extended, Abercrombie shall pay to the City a termination fee of$60,000. In the event of a material breach,violation or failure to perform or satisfy any of the obligations in this Agreement which has not been cured after a reasonable period of time after written notice to Abercrombie, the City may elect to terminate this Agreement upon thirty (30) days written notice to Abercrombie. This Section shall survive the termination or expiration of this Agreement. (000049]b.DOCX/8) 7 839 18. Public Necessity. City may, upon three (3) months prior notice in writing to Abercrombie, suspend or revoke this Agreement without liability to Abercrombie when public necessity so requires, or suspend operation immediately hereunder, without any advance notice and without any liability to Abercrombie, in the event of public emergency, as may be determined by the City Manager. Such suspension will terminate when the public necessity or emergency no longer exists. The Parties agree that if the suspension or revocation discussed above exceeds 30 days, then Abercrombie shall have the right to terminate this Agreement without fee or penalty notwithstanding Section 17 above. 19. Conflict of Interest. Abercrombie 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 to solicit or aid in the procuring of this Agreement; or (2) will be employed in the ; performance of this Agreement without the immediate 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 the City, Abercrombie, upon request of City, shall terminate such employment immediately. For breaches or violations of this Section, City shall have the right both to annul this Agreement without liability, and, in its sole discretion, recover the full amount of any such compensation paid to such official,employee or business entity. 20. Attorneys Fees, In the event suit is brought by either Party to enforce the terms and provisions of this Agreement or to secure the performance hereof, each Party shall bear its own attorney's fees, except as provided in Section 9 above. I 21. Non-Possessory Interest. 1 City retains full possession of the License Area and Abercrombie will not acquire any interest temporary, permanent, irrevocable, possessory or otherwise by reason of this Agreement, or by the exercise of the permission given herein. Abercrombie will make no claim to any such interest, Any violation of this provision will immediately void and terminate this Agreement. i 22. Liens. Abercrombie shall not permit any mechanics' or materialness', or other liens, or stop notices, to stand against the License Area by reason of any use or occupancy by Abercrombie, or any person claiming under Abercrombie. If Abercrombie desires to contest or withhold any payment which would lead to the placement of any such liens or stop notices, or contest any such lien, or stop notice, then prior to commencing such contest and withholding, Abercrombie shall furnish City with a bond to secure the payment of such obligation and obtain City's prior written approval of the bond, [00004916.DOCX 19) 8 840 23. Miscellaneous. a. Assignment. Neither Abercrombie nor the City shall assign (or sublease) its rights or responsibilities under this Agreement, in whole or in part, except with the written consent of the other Party hereto. Any attempted assignment without such prior written consent shall be invalid and void. b. Compliance with Laws. Abercrombie shall comply with all required State, County and City laws and regulations relating to the use of the License Area and shall be solely responsible for all costs incurred in connection with such compliance, C. Applicable Law, This Agreement shall be construed, governed and enforced in accordance with the laws of the State of California. d, Entire Agreement. This Agreement contains a full and complete expression of the Parties and it shall supersede all other agreements, written or oral, hereto made by the Parties with respect to the subject matter hereof, This Agreement may be modified only in writing, signed by the Parties hereto. (signature page follows) 0000441 b.DOCX/8) 9 841 IN WITNESS WHEREOF, authorized representatives of the City and Abercrombie have duly executed this Agreement as of the day and year first written above. Abercrombie: ABERC,.-GWIE&FIT H CO. By: anathan Ramsden Chief Operating Officer Date: -7 1 19 � I ABE IE&FITCH TRADING CO. By: �v"kJ t t_soNJ !2STAMT sf c.e A" Date: J.M. H ISTER, LLC By: —s Jo athan Ramsden President i r Date: 4 i i i i i i i (00004916.DOCX13) 10 842 City: CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Major i i Ci lerk INITI TED AND AAPPROVED: Q)(N( (L==, Q/; v-�) K ctoi of Community Services REV I- D APPROVED: p"anager APPROVED AS TO FORM: (P—:) City Ari rney CITY'S SIGNATURE PAGE TO AGREEMENT BETWEEN CITY AND ABERCROMBIE &FITCH CO., ABERCROMBIE&FITCH TRADING CO. AND 3.M, HOLLISTER,LLC i i (000049u,,nocxis) ] ] 843 r OUR zi� -n. ft iN'^''ls=4'C OT s r _ .r _ter. ..e._w t..._�?ad a�_��£."�.e z•:�...�.�... -�.� - r `�.a�a-�-'�..f�i- ,,-.�� �S�s3�'_t+i�i t 6 ;. E7►'MIT B Work Plan Each Recording Visit consists of up to five (5) days of continuous recording at the Huntington Beach Pier with up to six (6) cameras and related crew members. On each visit, Abercrombie intends to record continuously from one hour before sunrise to one hour after sunset for up to five (5) continuous days, Abercrombie will cordon off the recording areas on the Huntington Beach Pier with stanchions Or cones that will be maintained, as deemed necessary by Abercrombie, for the duration Of the Recording Visit. The three recording areas are depicted on the License Area Map attached hereto as Exhibit A and are generally located in the area of Tower 0 Lifeguard Tower. Each recording area is approximately 40 feet by 8 feet and is intended to allow for recording equipment and related personnel to be protected and secure for recording continuous content for the duration of the Recording Visit. It is the intent of Abercrombie and the City to be flexible in the designation and use of recording areas, and new areas may be agreed to with the reasonable consent of the City. The video recording personnel will bring to the recording areas the cameras, video recorders, tripods, stanchions, cones and other related equipment necessary for capturing Recorded Content and for protecting the equipment from weather conditions, including, but not limited to, temporary protective shade ("Recording Equipment"). The City and Abercrombie will work to coordinate in advance any necessary parking, approvals and clearances to set up, maintain, operate and remove the Recording Equipment at the Recording Areas. The City will 1 designate a City representative who will be available by phone for the entire duration of each Recording Visit, as well as immediately prior to and after each Recording Visit. The cameras and video recorders are battery-operated, but in the event that power is needed, Abercrombie will use accessible shore power or bring a generator to power the Recording Equipment in the License Area during the Recording Visits. Recorded Content from the Recording Visits may be edited, as deemed necessary by Abercrombie, prior to being displayed in stores and related purposes. 1 l {00004916.DOCX r 8) 845 Application Received; SUBMIT COMPLETED APPLICATION TO: fi lmpermits @surfcity-hb.org Film Office is located at the Lifeguard Headquarters 103 Pacific Coast Elighway Huntington Beach,CA 92648 Barbara Gray (714)536-5197 FAX(714)3744500 FILM/PHOTOGRAPHY PERMIT APPLICATION Pale l Lead Contact: Project Name: Project Company: Film Dates: Prep/Strike Dates: Production Company: Production Type: OFilm []Still ❑Video Address: Classification. City/State/Zip: ❑Commercial OTV ❑Feature ODocument ❑School Project ❑Other Office Number: Cell: E-Mail: FAX: General Location(s): Specific Site: Activity: i Number of Crew: Number of Cast Members; i Vehicles;(Types) j Numb er of veldcles: f Day 1 Hours: t From: To: Day 2 Hours: From: To: Permitee hereby agrees to ensure compliance with the conditions of the permit,including provisions and any attachments, agrees to obtain prior city approval for deviations from the information provided herein, and understands that failure to comply with these requirements may result in the immediate cancellation of production, Applicant Date 846 FILM/PHOTOGRAPHY PERMIT APPLICATION Page 2 Special Requirements/Equipment/Parking Location Manager; Office Phone: Portable/Pager: Assistant Location Manager: Office Phone: Portable/Pager; Parking Requirements: Equipment to be used(list): Services Required: ONone []Food ❑Hotel j Stunts/Special effects: Pyrotechnics; 1 Hazardous material to be used: k o ech !Pyr t ruc�an; License#: Aerial stunts/elements: i Wild animals to be used: 1 Traffic Control; Describe your plan for controlling traffic,(i.e.personnel and/or devices autos,bikes, pedestrians): i Other unusual activities: Traffic: Please submit a site plan showing location(s)of shoot,cast,crew,vehicle(s)and route to be traveled in order to film a scene. 847 PROVISIONS Permittee waives all claims against the City, its officers, agents and employees,for loss or damage caused by, arising out of, or in any way connected with, the exercise of this permit and permittee agrees to save harmless,indemnify and defend City, its officers, agents and employees,from any and all loss, damage or liability which may be suffered or incurred by City, its officers, agents and employees caused by, arising out of or in any way connected with exercise by permittee of the rights hereby granted,except those arising out of the sole negligence of the City, City shall have the privilege of inspecting the premises covered by this permit at any and all times. This permit shall not be assigned. City may terminate this permit at any time if permittee fails to perform any covenant herein contained at the time and in the manner herein provided. City agrees it will not unreasonably exercise this right of termination. The parties hereto agree that the permitee, its officers, agents and employees, in the performance of this permit shall act in an independent capacity and not as officers, employees or agents of the City, No alteration or variation of the terms of this permit shall be valid unless made in writing and sighed by the parties hereto. Permitee will not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, sex, sexual orientation, age, national origin or physical handicap. Permitee agrees to comply with the terms and conditions contained herein and all rules and regulations of the City subject to this permit, I i Date Applicant's Signature Title i i i i i i f PERMIT MUST BE KEPT ON LOCATION AT ALL TIMES 848 ATTACHMENT # 11 EXHIBIT D Lease Maintenance Reimbursement Agreement 849 STATE OF CALIFORNIA AGREEMENT NUMBER STANDARD AGREEMENT STD.2I3(new 06/03) REGISTRATION NUMBER 1. This Agreement is entered into between the State Agency and the Contractor named below: STATE AGENCY'S NAME California State Lands Commission (State) CONTRACTOR'S NAME City of Huntington Beach 2. The term of this _ Agreement is: June 21 2018 thru June 20 2043 3. The maximum amount of this Agreement is: $ 22,500 4. The parties agree to comply with the terms and conditions Of the following exhibits which are by this reference made a part of the Agreement: _ — Exhibit A—Scope of Work 2 Page(s) Exhibit B—Budget Detail and Payment Provision/Definitions and Terms 2 Page(s) _ Exhibit C*—General Terms and Conditions GTC 4/2017 Check mark one item below as Exhibit D: 2 Page(s) ® Exhibit D—Special Terms and Conditions (attached hereto as part of this Agreement) ❑ Exhibit D*—Special Terms and Conditions _ Items shown with an Asterisk(*) are hereby incorporated by reference and made part of this Agreement as if attached hereto These documents can be viewed at http*//www dgs ca ctov/ols/Resources/StandardContractLanguage.aspx. IN WITNESS WHEREOF,this Agreement has been executed by parties hereto. CALIFORNIA CONTRACTOR Department of General Services Use onl CO CT R' AM (ifor r t n individual,state whether a corporatian,partnership,etc.) Cit of H in t Be BY( ut ortz ignatur DATE SIGNED �Tu za1 PRINT NAME AND TITLE OF PERS SI ING Michael Pose , Ma or ADDRESS 2000 Main Street, Huntington Heach, CA 92648 STATE OF CALIFORNIA AGENCY NAME California State Lands Commission BY(Authorized Signature) DATE SIGNED PRINTED NAME AND TITLE OF PERSON SIGNING Denise Cook, Fiscal Officer ADDRESS Exempt per 100 Howe Avenue, Suite 100-South, Sacramento, California 95825 850 EXHIBIT A SCOPE OF WORK 1. Work to be Performed—The City of Huntington Beach, the"Lessee", enters into this Agreement with the California State Lands Commission, the"Commission" or"State" (hereafter the Lessee and the Commission/State are referred to collectively as the"Parties") for staff costs associated with the processing and review of periodic reports of the facilities associated with Lessee's General Lease— Public Agency Use, Lease No. PRC 6616.1 {Lease). The State hereby agrees to perform the following services: A. Lease Management: The State shall review the Lessee's annual summary reports. Reviewing costs shall include, but not be limited to, actual costs for staff time for review of sea-level rise and flooding vulnerability and risk assessments, updates or amendments to the Local Coastal Program, annual flooding frequency and extent, annual site photographs, schedule and nature of repair and maintenance operations, and coastal hazard remediation and removal. In addition to Lessee's annual report submissions, Lessee shall conduct a structural assessment on or before December 31, 2020 and then every five years following the initial inspection,with a report to.be provided within 30 days of inspection for Commission engineering staff review. Staff costs shall include but not be limited to, actual costs of staff time for review of submitted annual summary reports and engineering review of structural inspection reports for the term of the lease pursuant to Section 2, Special Provisions, Paragraph 6, of Lease No. PRC 6616.1. B. Mutual Understanding: This Agreement is entered into by the parties hereto with the express understanding that the State cannot assure: 1) final approval of the permit or lease; 2) that permits from other State or local permitting agencies are obtainable; and 3)that either the State or the Lessee by entering into this Agreement is representing that the lease will go forward as proposed. Lessee understands and expressly acknowledges that the State's review of annual summary and inspection reports is for the sole purpose of evaluating Lessee's compliance with a lease from the Commission, if any, and not for any other purpose. 2. Parties' Agents A. For Engineering Review the State's Project Officer shall be: Chandrashekar Basavalinganadoddi, Supervising Mineral Resource Engineer California State Lands Commission Mineral Resource Management 200 Oceangate, 121h floor Long Beach, CA 90802 Tel. (562) 590-5209 Email: Chandrashekar.Basaval.inganadoddi(d)slc.ca.gov Page 2of11 851 B. For Lease Management the State's Project Officer shall be: Lucien Pino, Public Land Management Specialist California State Lands Commission 100 Howe Avenue, Suite 100 South Sacramento, CA 95825 .Tel. (916) 574- 1858 E-mail: lucien.pino cRr slc.ca.gov C. The Applicant's Project Manager shall be: Travis K. Hopkins, Director of Public Works City of Huntington Beach Public Works Department 2000 Main Street Huntington Beach, CA 92648 Tel. (714) 374-5348 E-mail: tbopkins(u)surfci -hb.org D. The Applicant's Agent is: Travis K. Hopkins, Director of Public Works City of Huntington Beach Public Works Department 2000 Main Street Huntington Beach, CA 92648 Tel. (714) 374-5348 E-mail: thopkins0surfcity-hb.org 3. Notices and Authorities A. Any notice or other written communications required or permitted under this Agreement may be personally delivered in writing to the State's Project Officer or Applicant's Project Manager, or may be sent by certified mail, return receipt requested, to the address stated above and shall, based on such delivery or sending, be deemed to have been effectively communicated. Either party may change such address by written notice to the other party. Any notice given.other than as provided above, shall not be deemed to be effectively communicated until received in writing. B. The Project Manager shall have full authority to act on behalf of the Lessee for administration of the Project. All communications given to the Project Manager shall be as binding, as if given to the Lessee. C. The State may change its Project Officer, at any time,by written notice to the Lessee. The Lessee may change its Project Manager, at any time, by written notice to the State's Project Officer. Page 3 of 11 852 EXHIBIT B BUDGET AND PAYMENT PROVISIONS 1. Invoicingae nd Payment—Lessee agrees to reimburse the State for all reasonable casts associated with the review and processing of annual summary report and quinquennial inspection report submissions according to this Standard Agreement whether prior or subsequent to the execution of this Agreement. Processing costs shall include, but not be limited to, staff time associated with those tasks outlined in Exhibit A, Scope of Work. Staff costs shall be computed in accordance with Section 8752 of the State Administrative Manual and shall include salaries and wages, related staff benefits and administrative overhead. The invoice shall be mailed to the Lessee's Project Manager. Payments shall reference the Agreement number assigned to this Agreement and must be mailed to the following address: California State Lands Commission 100 Howe Avenue, Suite 100 South Sacramento, CA 95825-8202 Attention Accounting 2. Estimated Reimbursable Costs—The initial estimated costs are based on the information and contracts existent as of the date of this Agreement. The itemized reimbursable costs estimate, to include recurring annual costs, for Work to be Performed is: A. Lease Management Estimate: To include the following: 1. Processing and Review of Annual Summary Report: $500 2. Processing and Engineering Review of Periodic Structural Inspection Reports (once every five years): $2,0001 ($400 per year) Approximate Recurring Annual Cost Estimate for Lease Management Review: $9002 3. Expense Deposits and Billings: A. Lease Management: Staff costs incurred by the State for Lease Management pursuant to this Agreement, as specified in Exhibit B, paragraph 2(c), shall be billed in arrears on a monthly basis. All payments are due 30 days from the date of the invoice. The State reserves the right to demand an expense deposit equal to the remainder of the Agreement should the Lessee fail to pay invoices within the time specified. Total costs invoiced,including expense deposits, shall not exceed the dollar amount specified in this Agreement unless amended. Estimate is based on usual and customary review;should extraordinary circumstances or major repair work occur,staff time needed for engineering review may exceed this estimate.In such an event,Lessee will compensate the State for staff time that exceeds the estimated amount,in accordance with the terms of this agreement. 2 The$900 Recurring Annual Cost Estimate includes the$500 annual amount,and the recurring periodic amount divided equally at$400 per year over each five-year period. Page 4 of 11 853 4. Additional Costs or Services—Lessee will be advised of any estimated cost increase in writing in accordance with this Agreement should the need for additional services become known or as costs previously estimated exceed the above estimate. Upon notification of the need for additional funds, the Lessee shall have the option to dispute or accept the increase with all the terms and conditions of this Agreement being unchanged and in effect. The Lessee shall notify the State within five(5) days of notice of any intent to dispute the change. Non-response shall be acknowledged as acceptance of the additional charges and Lessee will be billed for the balance in accordance with the terms above. 5. Definitions and Terms - Wherever the following abbreviations and terms (or pronouns in place of them) are used, the intent and meaning shall be interpreted as provided in this section. Working titles having a masculine gender, and pronouns referring to such said titles, are utilized in this Agreement for the sake of brevity and are not intended to refer to either sex or the neuter. All references to the singular shall refer also to the plural. All references to the plural shall refer also to the singular. A. As used within this Agreement, the terms."Lessee"and"Contractor" are used interchangeably and are to be considered the same entity. B. As used within this Agreement, the terms "State" and"Commission" are used interchangeably and are to be considered the same entity. C. The term "Agreement"refers to this document as executed by the Lessee and the State. This document includes Standard Form and any attached Exhibits. D. The term"Project Manager"refers to that person appointed or designated by the Applicant to administer the lease for the Applicant. E. The term"Project Officer"refers to that person appointed by the State to manage the lease file associated with this agreement. F. The term "Lessee's Agent"refers to that person designated by the Lessee to provide technical assistance and support to the State in coordinating transmittal of reports and other technical information and shall have no authority to act for the Lessee unless otherwise stated in writing by Lessee to the State's Project Officer. [Remainder of Page Intentionally Left Blank] Page 5 of 11 854 GTC 04/2017 EXHIBIT C GENERAL TERMS AND CONDITIONS 1. APPROVAL: This Agreement is of no force or effect until signed by both parties and approved by the Department of General Services, if required. 2. AMENDMENT: No amendment or variation of the terms of this Agreement shall be valid unless made in writing, signed by the parties and approved as required. No oral understanding or Agreement not incorporated in the Agreement is binding on any of the parties. 3. ASSIGNMENT: This Agreement is not assignable by the Contractor, either in whole or in part, without the consent of the State in the form of a formal written amendment. 4. AUDIT: Contractor agrees that the awarding department, the Department of General Services, the Bureau of State Audits, or their designated representative shall have the right to review and to copy any records and supporting documentation pertaining to the performance of this Agreement. Contractor agrees to maintain such records for possible audit for a minimum of three(3) years after final payment,unless a longer period of records retention is stipulated. Contractor agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records. Further, Contractor agrees to include a similar right of the State to audit records and interview staff in any subcontract related to performance of this Agreement. (Gov. Code §8546.7, Pub. Contract Code §10115 et seq., CCR Title 2, Section 1896). 5. INDEMNIFICATION: Contractor agrees to indemnify, defend and save harmless the State, its officers, agents and employees from any and all claims and losses accruing or resulting to any and all contractors, subcontractors, suppliers, laborers, and any other person, firm or corporation furnishing or supplying work services, materials, or supplies in connection with the performance of this Agreement, and from any and all claims and losses accruing or resulting to any person, firm or corporation who may be injured or damaged by Contractor in the performance of this Agreement. 6. DISPUTES: Contractor shall continue with the responsibilities under this Agreement during any dispute. 7. TERMINATION FOR CAUSE: The State may terminate this Agreement and be relieved of any payments should the Contractor fail to perform the requirements of this Agreement at the time and in the manner herein provided. In the event of such termination the State may proceed with the work in any manner deemed proper by the State. All costs to the State shall be deducted from any sum due the Contractor under this Agreement and the balance, if any, shall be paid to the Contractor upon demand. 8. INDEPENDENT CONTRACTOR: Contractor, and the agents and employees of Contractor, in the performance of this Agreement, shall act in an independent capacity and not as officers or employees or agents of the State. 9. RECYCLING CERTIFICATION: The Contractor shall certify in writing under penalty of perjury, the minimum, if not exact, percentage of post-consumer material as defined in the Public Contract Code Section 12200, in products, materials, goods, or supplies offered or sold to the State regardless of whether the product meets the requirements of Public Contract Code Section 12209. With respect to printer or Page 6 of 11 855 duplication cartridges that comply with the requirements of Section 12156(e), the certification required by this subdivision shall specify that the cartridges so comply(Pub. Contract Code §12205). 10.NON-DISCRIMINATION CLAUSE: During the performance of this Agreement, Contractor and its subcontractors shall not deny the contract's benefits to any person on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, nor shall they discriminate unlawfully against any employee of applicant for employment because of race,religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. Contractor shall insure that the evaluation and treatment of employees and applicants for employment are free of such discrimination. Contractor and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code §12900 et seq.), the regulations promulgated thereunder(Cal. Code Regs., tit. 2, §11000 et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code §§11135-11139.5), and the regulations or standards adopted by the awarding state agency to implement such article. Contractor shall permit access by representatives of the Department of Fair Employment and Housing and the awarding state agency upon reasonable notice at any time during the normal business hours,but in no case less than 24 hours' notice, to such of its books, records, accounts, and all other sources of information and its facilities as said Department or Agency shall require in ascertaining compliance with this clause. Contractor and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. (See Cal. Code Regs., tit. 2, §11105.) Contractor shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under the Agreement. 11. CERTIFICATION CLAUSES: The CONTRACTOR CERTIFICATION CLAUSES contained in the document CCC 04/2017 are hereby incorporated by reference and made a part of this Agreement by this reference as if attached hereto. 12. TMIELINESS: Time is of the essence in this Agreement. 13. COMPENSATION: The consideration to be paid Contractor, as provided herein, shall be in compensation for all of Contractor's expenses incurred in the performance hereof, including travel, per diem, and taxes, unless otherwise expressly so provided. 14. GOVERNING LAW: This contract is governed by and shall be interpreted in accordance with the laws of the State of California. 15. ANTITRUST CLAIMS: The Contractor by signing this agreement hereby certifies that if these services or goods are obtained by means of a competitive bid, the Contractor shall comply with the requirements of the Government Codes Sections set out below. a.The Government Code Chapter on Antitrust claims contains the following definitions: 1) "Public purchase" means a purchase by means of competitive bids of goods, services, or materials by the State or any of its political subdivisions or public agencies on whose behalf the Attorney General may bring an action pursuant to subdivision(c) of Section 16750 of the Business and Professions Code. 2) "Public purchasing body" means the State or the subdivision or agency making a public purchase. Government Code Section 4550. Page 7 of 11 856 b. In submitting a bid to a public purchasing body, the bidder offers and agrees that if the bid is accepted, it will assign to the purchasing body all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act(Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, materials, or services by the bidder for sale to the purchasing body pursuant to the bid. Such assignment shall be made and become effective at the time the purchasing body tender's final payment to the bidder. Government Code Section 4552. c. If an awarding body or public purchasing body receives, either through judgment or settlement, a monetary recovery for a cause of action assigned under this chapter, the assignor shall be entitled to receive reimbursement for actual legal costs incurred and may, upon demand, recover from the public body any portion of thexecovery, including treble damages, attributable to overcharges that were paid by the assignor but were not paid by the public body as part of the bid price, less the expenses incurred in obtaining that portion of the recovery. Government Code Section 4553. d. Upon demand in writing by the assignor, the assignee shall, within one year from such demand, reassign the cause of action assigned under this part if the assignor has been or may have been injured by the violation of law for which the cause of action arose and (a) the assignee has not been injured thereby, or(b) the assignee declines to file a court action for the cause of action. See Government Code Section 4554. 16. CHILD SUPPORT COMPLIANCE ACT: For any Agreement in excess of$100,000, the contractor acknowledges in accordance with Public Contract Code 7110, that: a. The contractor recognizes the importance of child and family support obligations and shall fully comply with all applicable state and federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with section 5200) of Part 5 of Division 9 of the Family Code; and b. The contractor, to the best of its knowledge is fully complying with the earnings assignment orders of all employees and is providing the names of all new employees to the New Hire Registry maintained by the California Employment Development Department. 17. UNENFORCEABLE PROVISION: In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. 18. PRIORITY HIRING CONSIDERATIONS: If this Contract includes services in excess of$200,000, the Contractor shall give priority consideration in filling vacancies in positions funded by the Contract to qualified recipients of aid under Welfare and Institutions Code Section 11200 in accordance with Pub. Contract Code §10353. 19, SMALL BUSINESS PARTICIPATION AND DVBE PARTICIPATION REPORTING REQUIREMENTS: a. If for this Contract Contractor made a commitment to achieve small business participation, then Contractor must within 60 days of receiving final payment under this Contract (or within such other time period as may be specified elsewhere in this Contract) report to the awarding department the actual percentage of small business participation that was achieved. (Govt. Code § 14841.) Page 8 of 11 857 b. If for this Contract Contractor made a commitment to achieve disabled veteran business enterprise (DVBE) participation, then Contractor must within 60 days of receiving final payment under this Contract (or within such other time period as may be specified elsewhere in this Contract) certify in a report to the awarding department: (1) the total amount the prime Contractor received under the Contract; (2) the name and address of the DVBE(s) that participated in the performance of the Contract; (3) the amount each DVBE received from the prime Contractor; (4) that all payments under the Contract have been made to the DVBE; and(5) the actual percentage of DVBE participation that was achieved. A person or entity that knowingly provides false information shall be subject to a civil penalty for each violation. (Mil. & Vets. Code § 999.5(d); Gov-. Code § 14841.) 20. LOSS LEADER: If this contract involves the funushing of equipment, materials, or supplies then the following statement is incorporated: It is unlawful for any person engaged in business within this state to sell or use any article or product as a"loss leader" as defined in Section 17030 of the Business and Professions Code. (PCC 10344(e).) [Remainder of Page Intentionally Leff Blank] Page 9 of 11 858 EXHIBIT D SPECIAL TERMS AND CONDITIONS 1. Type of Agreement—This Agreement between the State and the Lessee is for the reimbursement of costs, from the Lessee to the State, for lease maintenance related activities, detailed in Exhibits A and B of this Agreement,performed by staff of the California State Lands Commission. This Agreement does not involve the procurement of goods or services from the Lessee. 2. Effective Reimbursement Period—Notwithstanding the date of Agreement approval in paragraph 1 of GTC 4/2017, the Lessee agrees to reimburse the State for lease maintenance-related review costs detailed in Exhibits A and B of this Agreement, that accrue beginning on the date listed in form STD.213,paragraph 2 of this Agreement until the tennination of this Agreement. The term of this agreement shall extend to include any holdover period of Lease No. PRC 6616.1. 3. This paragraph supersedes paragraph 5 of, Exhibit C, "Indemnification": Indemnification—To the fullest extent permitted by law, Lessee shall defend, indemnify, and hold harmless the State of California and any and all agencies or departments thereof, including but not limited to, any and all boards, commissions, officers, agents, employees, and representatives (Indemnitees), against any and all claims, liabilities, charges, losses, expenses, and costs, including the State's attorneys' fees (Liabilities), that may arise from or by reason of any action or inaction by the Indemnitees in connection with the work described in Exhibit A. This obligation of the Lessee to indemnify, defend, and hold harmless the Indemnitees shall not apply to any Liabilities caused solely by the gross negligence or intentional acts of the State or its officers, agents, and employees; or to any claims, litigation, or to other actions brought by the Lessee against the Indemnitees in relation to the Lessee's application or this Agreement. This provision shall survive termination of this Agreement. 4. This paragraph supersedes paragraph 6 of GTC 610, Exhibit C, "Disputes": Disputes—Except as otherwise provided in this Agreement, any dispute concerning a question of fact arising under or relating to the performance of this Agreement which is not disposed of by Agreement shall be decided by the Project Officer, who shall reduce his decision to writing in regard to the dispute and shall transmit a copy thereof to the Lessee within thirty (30) days. The decision of the Project Officer shall be final and conclusive, unless within thirty (30) days from the date of receipt of such copy, the Lessee transmits to the State a written appeal. Said appeal shall be supported with specificity. a. In connection with any appeal proceeding under this clause, the Lessee shall be afforded an opportunity to be heard before the State Lands Commission within sixty(90) days of the receipt by the State of the Lessee's written appeal and to offer evidence in support of its appeal. Pending the final decision of any such dispute, the Lessee shall proceed diligently with the performance of the Agreement and in accordance with the written decision of the Project Officer which is the subject of the Lessee's appeal including the payment of invoices to the State. b. The procedure described herein shall not prejudice or deny the Lessee's remedies at law. However, the Lessee agrees to exhaust the procedure described herein before pursuing remedies at law. All amounts paid to the State under protest shall be held by the State in trust until the dispute is resolved. Page 10 of 11 859 5. Modification—This paragraph supersedes paragraph 7 of GTC 610,Exhibit C, "Termination for Cause": Either party may elect to modify the scope of work or costs associated with the lease maintenance described in Exhibit A, Paragraph 1(A) and Exhibit B, Paragraphs 2(A) of this Agreement by written notice at any time prior to or during the lease term upon ten (10) days written notice to the other party. The Lessee agrees that in the event of such modification of this Agreement by either party as provided above, it shall reimburse the State one hundred percent(100%)of all costs incurred by the State in the performance of its obligations as described in this Agreement. 6. Reimbursement of Costs—Lessee shall reimburse the State in full for all reasonable costs and attorney's fees, including, but not limited to,those charged it by the California Office of the Attorney General, that the State incurs.in corinection with the defense of any action brought against the State challenging this Agreement or any other matter related to this Agreement or the work performed by the State under this Agreement. In addition, Lessee shall reimburse the State for any court costs and reasonable attorney fees that the State may be required by a court to pay as a result of such action. Lessee may participate in the defense of the action, but its participation shall not relieve it of its obligations under this Paragraph. The provision of this Paragraph shall not apply to any claims, litigation or other actions which may be brought by the Parties against each other and shall not apply to the extent that any such obligation is void or otherwise unenforceable under applicable law in effect on or validly retroactive to the date of this Agreement. Nothing in this Paragraph shall be construed to require the State to defend itself against all or any aspect of the challenge to this Agreement or work performed under this Agreement. However, Lessee may take whatever legal action is available to it to defend this Agreement or any work performed under this Agreement against any challenge by a third party, whether or not the State chooses to raise a defense against such a challenge. 7. Records—Upon five (5) business days' notice, the State's records relating to its costs shall be available for the Lessee's audit in the State's office in Sacramento. Said audit shall take place only during regular business hours of the State. Payment of costs by the Lessee shall not constitute a waiver of its rights to audit nor an acknowledgment by the Lessee of the validity of the costs that have been paid. Nothing herein shall be deemed to require the State,its consultants, other contractors and subcontractors to maintain books, records, or documents other than those usually maintained by them, provided that such books, records and documents reasonably segregate and identify the costs for which reimbursement is required hereunder. As used herein, "State's records" include any audit of the consultant by the State or its designated representative as authorized in this Agreement. S. Paragraphs 4, 7, 8, 9, 10, 11, 13, 15, 16, 18, 19, and 20 of GTC 4/2017, Exhibit C, do not apply to this Reimbursement/Revenue Agreement, and are hereby waived and shall have no force or effect upon this Agreement. [Remainder of Page Intentionally Left Blank] Page 11 of 11 860 .• City of Huntington Beach w 2000 Main Street ♦ Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov FB�p...1999AP� � Office of the City Clerk Robin Estanislau, City Clerk August 1, 2018 California State Lands Commission Land Management Division Attn: Lucien Pino Public Land Management Specialist 100 Howe Avenue, Suite 100-South Sacramento, CA 95825 Dear Mr. Pino: Enclosed are two original copies, one complete copy with exhibits and one copy without exhibits, of both the State Lands Lease No. PRC 6616.1" and the "Lease Maintenance Reimbursement Agreement between the California State Lands Commission and the City of Huntington Beach." Also enclosed are two certified copies of Resolution No. 2018-41 authorizing the Mayor and City Clerk to execute these Agreements on behalf of the City. Upon complete execution, please return one original of each agreement (originals without the exhibits) to us. Please mail the Agreements to: Robin Estanislau City Clerk 2000 Main Street, 2"d Floor Huntington Beach CA 92648 Your attention to this matter is greatly appreciated. Sincerely, Robin Estanislau, CIVIC City Clerk RE:ds Enclosures Sister Cities: Anjo, Japan ♦ Waitakere, New Zealand