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HomeMy WebLinkAbout07 SPTS PK CONCES XFER 10-16-00AGENDA RE?'-)RT I MEETING DATE: OCTOBER 16, 2000 NO. 07 10-16-00 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: PATRICK SANCHEZ, DIRECTOR, PARKS AND RECREATION SERVICES SUBJECT: TRANSFER AND ASSIGNMENT OF TUSTIN SPORTS PARK FOOD AND BEVERAGE CONCESSION LEASE AGREEMENT Ill SUMMARY: Mom's Sports Caf6 is requesting the Tustin Sports Park Food and Beverage Lease Agreement be assigned to Luigi and Amy Ravetto of Caffe Piemonte. RECOMMENDATION: Approve the assignment of the lease transfer of the Tustin Sports Park Concession to Luigi and Amy Ravetto, dba Express Sports Caf& waive the City's right to collect_a transfer fee and approve the Assignment of Resolution. FISCAL IMPACT: No fiscal impact. The terms and conditions of the original lease remain in effect. BACKGROUND: Marcia Sanserino, dba Mom's Sports Cafb, originally entered into a lease agreement with the City to operate the food and beverage concession at the Tustin Sports Park on January 19, 1999. Marcia has submitted a written request to the City pursuant to the assignment provision in the lease agreement to assign the lease to Luigi and Amy Ravetto. The assignment of the lease has been reviewed by our City Attorney and is subject to the approval of our City Council. Luigi and Amy Ravetto are successful Tustin business proprietors who own and operate Caffe Piemonte. Staff'is satisfied that Luigi and Amy- Ravetto can satisfactorily operate the food and beverage concession at the Tustin Sports Park. The City Attorney has reviewed the assignment of the lease agreement ensuring compliance with all applicable prerequisite terms and conditions. The City's Risk Manager and Finance Director has reviewed the insurance provisions required by the lease transfer and has approved the insurance designation. Under the terms of the lease,, the City is entitled to receive a transfer fee equal to 'one percent (1%) of the gross sales pdce. Since the amount due the City is insignificant and less than $200, staff recommends the City waive its right to collect the transfer fee. The City Council may complete the lease transfer by approving the attached Assignment of Resolution. Respectfully Submitted, Patrick Sanchez Director, Parks and Recreation Attachments: Resolution Assignment of Lease Agreement Lease Agreement City Attomey Review RESOLUTION NO. 00-68 l0 13. 12 13 3.4 15 3.6 18 2O 23. 22 23 A RESOLUTION OF THE CITY COUNCIL OF THE CiTY OF TUSTIN, CALIFORNIA, APPROVING THE ASSIGNMENT OF THE LEASE AGREEMENT FOR THE FOOD AND BEVERAGE CONCESSION AT THE TUSTIN SPORTS PARK. WHEREAS, on January 19, 1999, the City of Tustin ("CitY") and Marcia Sanserino ("Lessee") entered into a Lease Agreement to operate a Food and Beverage Concession at the Tustin Sports Park (the "LeaSe"); and WHEREAS, section 18.7 of the Lease prohibits assignment of the Lease "without the prior consent of the City, which consent shall not be unreasonably withheld;" and WHEREAS, Luigi and Amy Ravetto, dba Express Sports Caf6, desires to assume all of Marcia Sanserino's rights and obligations under the Lease; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Tustin, California, does hereby resolve, declare, determine and order as follows: , That Luigi and Amy Ravetto, dba Express Sports Caf6, are capable of' performing under terms of the Lease as well as Marcia Sanserino. o That the Assignment of Lease Agreement, attached hereto as Exhibit "A," is hereby approved and shall become effective upon the notarized signature of a duly authorized corporate officer of Express Sports Cafb. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin, held on the 16th day of October 2000. Jeffery M. Thomas, Mayor ATTEST: 25 Pamela Stoker, City Clerk. TO: CITY OF TIJSTIN ., CERTIFI~AT5 OF INSURANCE AND DESIGNATION OF NAIV~_D ADDrTIONAL INSURED NO MODIFICATIONS OR ADDITIONS MAY BE MADE .TO THiS FORM CITY OF TUSTIN P.O. Box 3539 Turn'in, CA g268%353g II Express Sports Cafe ' 1 il 12850 Robinson Drive· I Company Letzer S: 5 ~Coml3any Letter D: Jl 14 S State College Blvd #226 'CompanyLeflmrE: [Anaheim, CA' 9 2 8 0 6 Company Letter F: PROJECT: Luiqi & Amy Ravetto ,, COMPANIES AFFORDING CO~GE (MUST HA~ BE~S ~TING OF AT L~AST A, VII] ,, Zurich InsUrance Group This certifies that the pdlicies of ins~rance']i~'e"E l~lo~ ha-~e been issued to ~ i~s~d ~'~e above: are in force at ibis' ~'m~ ~h~! the City of Tusfin is named as an additional insured thereon as respects claims arising.in connection with ~e Pm)eCt named above and that such insurance shall be primary with respect to any other insurance in force procured by City. - Policy Policy : Type of Insurance Policy Number GENERAL LIABILITY [~{ Commercial W7141962 General Liability [ ~ Occurrence Basis [,~ Owner's & Contractors' Protective [ ~Bmad Form Prop. Damage [ ~Explosion, Collapse, Unclerground Hazards AUTOMOBILE LIABILrTY' [ ] Any Auto [ ] Ali Owned Autos [ ] Scheduled Autos W7 1 4 1 9 6 2 7 [~ Hired Autos ,rz~ Non-Owned Autos [ ] Garage Liability -" EXCESS LIABILITY [ ] Umbrella Form [ ] Other than Umbrelta FOrm WORKERS' COMPENSATION Effective Date 7 11-1-00 11-1-00 Expiration Date 11-1-01 1t-1-01 All Limits In Thousands General Aggregate $ 2,0 0 0 Prods-Comp/Ops Agg. Pers. & Advg. injury Each Occurrence . Fire Damage (Any One Fire) Medical Expense (Any One Person) CSL Bodily Injury ('Per Person) Bodily Injury --(Pier o~:curm-nc~) Property EACH OCCURRENCE 2,000 $ 1,000 ;0o0 $ 1,000 $. 10 $ 1,000 AGGREGATE STATUTORY $!., 0 0 0 Each Accident Disease-Policy Limit Disease-Each Employee  PLOYER'$ LIABILITY NWC478436 7-28-00 7-28-01 I'oT. . Desc,~tionofOperations/LocationsNehictes/Speciatltems: All operations as described above It is cer~3ed thata waiver of subrogation is hereby issued to the City of Tustin as pertains to the t~rms of all Workers Compensation insurance. The issuing company will give thirty (30) d.ays written notice to ~itation. DATE ISSUED:. 1 0- z] - 2 0 0 0 . ' Author[zed Ae~i-eseniative of the abo~,e-~med insurance company(les) ASSIGNMENT OF LEASE This Assignment of Lease ("Assignment") is made as of October ,2000 between Marcia Sanserino, 22351 Eagle Rock Way, Laguna Beach, California 92651 dba Mom's Sports Caf6, 12850 Robinson Drive, Tustin, California 92780 ("Assignor"), and Luigi Ravetto and Amy Ravetto, 8215 East White Oak Ridge, #8, Orange, California 92869 dba Express Sports Caf6 ("Assignees"). RECITALS A. The City of Tustin, a municipal corporation, ("City") is the owner of the 20-acre Tustin Sports Park site located at 12850 Robinson Drive, Tustin, California. B. The Tustin City Council is authorized by the provision of Government Code Section 37396 to lease City park and recreation property for the provision of services consistent with public park and recreation purposes. C. The City desired to lease tenant space at the Tustin Sports Park property for the purpose of operating food/beverage concession. D. The City, as landlord ("Landlord"), and Assignor, as Tenant, executed a Lease Agreement dated January 19, 1999 for Assignor to operate a food/beverage concession consistent with public park and recreation purposes ("Lease"), a copy of .which is attached hereto and incorporated herein by reference as Exhibit "A", pursuant to which Landlord leased to Tenant and Tenant leased from Landlord that certain portion of property at the Tustin Sports Park located at 12850 Robinson Drive, Tustin, California, which is described and depicted on Exhibits "A" and "B" attached to the Lease and incorporated herein by reference for a term of five (5) years, subject to earlier termination as provided in the Lease. E. Pursuant to section 18.7 of the Lease, Assignor desires to assign the Lease to Assignees, and Assignees desire to accept the assignment of the Lease from Assignor and assume all obligations under the Lease, subject to approval of this Assignment by the Tustin City Council. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are acknowledged, Assignor and Assignees agree as follows: Section 1. Assignment Subject to approval of this Assignment by the Tustin City Council, Assignor assigns and transfers to Assignees all rights, interest, and obligations in the Lease and Assignees accepts from Assignor all rights, interest, and obligations in the Lease, subject to the terms and conditions set forth in this Assignment. 26618\1 Section 2. Assumption of Lease Obligations Subject to approval of this Assignment by the Tustin City Council, Assignees assume and agree to perform and fulfill all the terms, covenants, conditions, and obligations required to be performed and fulfilled by Assignor as lessee under the Lease, including the making of all payments due to or payable on behalf of the City under the Lease as they become due and payable. Section 3. Assignor's Covenants Assignor covenants that the copy of the Lease, attached hereto as Exhibit "A", including Amendment No. 1 to the Lease dated April 1, 2000, attached hereto as Exhibit "B", is a true and correct copy of the Lease as is currently in effect and that there exists no other agreement or agreements affecting Assignor's tenancy under the Lease. Section 4. Litigation Costs If any litigation between Assignor and Assignees arises out of this Assignment or concerning the meaning of interpretation of this Assignment, both Assignor and Assignees agree to indemnify and hold harmless the City. Section 5. Indemnification Assignor agrees to indemnify Assignees from and against any loss, cost, or expense, including attorneys' fees and court costs relating to the failure of Assignor to fulfill Assignor's obligations under the Lease, and accruing with respect to the period on or prior to the date of this Assignment. Likewise, Assignees agrees to indemnify Assignor from and against any loss, cost, or expense, including attorneys' fees and court costs relating to the failure of Assignees to fulfill obligations under the Lease, and accruing with respect to the period subsequent to the date of this Assignment. Section 6_ Successors and Assigns This Assignment shall be binding on and inure to the benefit of the parties to it, their heirs, executors, administrators, successors in interest, and assigns. Section 7_ Governing La~w This Assignment shall be governed by and construed in accordance with California law. 26618\1 2 IN WITNESS WHEREOF, the parties hereto have executed this Assignment of Lease on the day and year first written above. ASSIGNOR: Marcia Sanserino dba Mom's Sports Caf6 22351 Eagle Rock Way Laguna Beach, California 92651 ASSIGNEE.St. dl ,SSlSports cafb 8215 : v~ite Oak Ridge, ~8, Orange, California 92869 CONSENT OF LANDLORD The undersigned City, as Landlord under the Lease, hereby consents to this Assignment of the Lease to Assignees, provided however, that notwithstanding this Assignment and the undersigned's consent to this Assignment, Assignor shall remain primarily obligated as tenant under the Lease and the undersigned does not waive or relinquish any rights under the Lease against Assignor or Assignees. CITY OF TUSTIN: Jeffery M. Thomas, Mayor Attest: Dated: Approved as to form: Beverley VVhite Chief Deputy City Clerk Lois E. Jeffrey City Attorney 26618\1 3 XHIBIT A I~EASE AGREEMENT THIS LEASE is made and entered into.on this / ~ day of ,19 5~ by and between the CITY OF TUSTIN, hereimfter referred to as "CCrI~" and Marcia Sanserino, 20 Rincon, Irvine, California, 92620, dba Mom's Sports Cafe, hereinatier referred to as "LESSEE"; The City is the owner ofthe 20-acre Tustin Sports Park site, located at 12850 Robinson Drive and depicted on Extn~ A attached hereto and incorporated herein by reference. g¸o The City Council is authOrized by the provision of Government Code Section 37396 to lease City park and recreation property for the provision of services consistent with public park and recreation purposes; and Co City desires to lease tenant space at the Tustin Sports Park property for the propose of operating a food/beverage concession; and D. City desires to lease portions of the Sports Park site for such pm'poses in accordance w/th the terms and conditions set forth in this Lease. AGREENm-NT NOW, 2lqEREFORE, in consideration of the mutual covenants, promises and conditions set forth hercqn hereinaiter contained, the parties hereto agree as follows: · 1..0,,DEMISED PREMISES 1'.1 City leases to Lessee for its management and operation certain 'real property improvements which consist of a concession lease space of approximately one thousand (1,000) square feet for food and beverage concession, together with certain stmct~es, bustlings, storage and/or improvements (collective~ the "demised premises"). The concession lmil~g plans are shown on Extfibit B attached hereto and incorporated herein by reference. The portions of the concession building being leased hereunder as the demised premises are specifically demarcated on Exh~t B. The demised premises (specifically including the structures, buildings and/or impr. ovements thereon) shall be surrendered to the City upOn temmtion of this Lease. 1.2 The demised premises shall be used only and exclusively for concession operations and such other purposes as are related thereto, provided express written approval therefor is granted by the City Manager, or his designee, and for no other purpose whatsoever. 1.3 Lessee acknowledges personal inspection of the proposed park; as depicted on Exhibit A, and concession impr. ovements as depicted on Extnbit B, and the surrounding area and evaluation of the extent to which the physical condition thereof will affect the operation of the concession Lessee accepts the demised premises in their existing physical condition as shown on construction plans and agr~s to make no demands upon the City for any improvements or alteration thereof. 1.4 Lessee shall construct upon the demi.~ed premises the required tenant improvements in accordance with the provisions set forth in Section 8 hereinafter and the attached Extn'bit C attached hereto and incorporated herein by reference. Said project and any changes thereto shall be subject to the prior approval of the City. All such construction shall be at Lessee's sole expense. 1.4.1 Any other improvements, additions, alterations or changes to the demised premises shall be mbject to: prior approval bythe City Manager; securing of applicable permits; and compliance with such terms and conditions as may be impo, sed thereon by the City. 1.5 Lessee hereby acknowledges the title of City, and/or any other public agencies'having jurisdiction thereover, in and to the demised premises and the' improvements located thereon, and covenants and agrees never to assail, contest or resist said rifle. 1.6 Ownership of all tenant improvements constructed by Lessee upon the demised premises and all alteration, additions or betterments thereto, shall immediately vest and be vested in City at all times during and after the term hereof; without compensation being paid therefor. Such structures, buildings and/or improvements shall be surrendered to the City with the remainder of the demised premises upon termination of this Lease. 2.1 The term of this Lease shall be for a period of five (5) years, commencing on the first day ofthe calendar month su~eding a sixty (60) days notice to proceed being issued to the Lessee. 2.2 In'the event Lessee holds over beyond the term herein provided wkh the consent express or imp. fled of City, such holding shall be from month to month only, subject to the conditions of this Lease; such holding shall not be construed as a renewal of lhi.q Lease and shall be at the monthly compensation provided herein. 2.3' Lessee may apply for an extemion of the term of this Lease for up to two timber successive terms'of five (5) years each (conectively the option terms); provided that no later than sixty (60) days prior to the expiration date of the respective term, the City receives a written request therefor, signed by Lessee. The City Counci shall have exclusive discretion to determine whether to grant or deny Lessee's application. City shall have the right to deny/approve the grant of an extension of thi.~ Lease (and/or) to renegotiate the terms of this Lease, including but not limited to basic service obligations, rn~imum concession payments, and required temnt impjovements. Lessee's option to extend this Lease shall also be con~ditional on all of the following: 1. Lessee is in good faith compliance with terms of this Lease; . This Lease has not been canceled by City prior to the expiration of the term of (2) . . o this Lease; Lessee is not in default under this Lease; Lessee has not abandoned, vacated or discontinued operations for a period in excess of five (5) days. This does not include successive days of inclement weather or days that the City has given prior aPProval to be closed. If the City closes the park, it is deemed to be approval to close. Lessee has received satisfactory performance evaluations from City. 3.0.. KENT 3.1 From and atter the lease commencement date, Lessee shall pay to City a minimum monthly rent which will be payable on the first day of each month. This rent will be $300 per month . for the first twelve months, and will be $400 per montli thereafter. From and after the expiration of the second full year of the initial term, City will, every year on the anniversary of the lease commencement date, notify Lessee of an adjustment in the ~_ mimnm Annual Rent. The adjustment shall be measured by the lVfmimum Annual Rent for the first full year of the initial term times the lesser of (a) the increase in the consn_~mer price index for All Urban Consnmers, Ail Items, base year 1982-1984 = 100, for the Los AngelesJAnaheim/Rivcn~ide geographical area as compiled by the United States Department of Labor for the mediately prig. year, or Co) four percent (4%).. 3.2 Percentage Rent. In addition to the Ivfinimum Annual Rent, Lessee shall, on a quarterly basis, pay Percentage Rent ~n'~oss ~lo~es ~---ual to ten percent (10%) of gross sales over $3,_000 per month. Said. Perce_.~_. tag. e Rent ~hal~become ~e and payable quarterly on the twenty fifth (25~) day of the month ,mmechately following the end ofthe first quarter. The City's aczeptance'of any monies paid to City by Lessee as Percentage Rent, as Shown by any statement furnished by Lessee, shall not be construed as an admission of the accuracy of said statement, or of the sufficiency of the amount of said Percentage Rent payment, but City shall be entitled to revie~v the adequacy of such payment as hereinabove set forth. 3.3 Gross Sales. (a) The term "Gross Sales" as used herein Shall mean: (1) The entire amount of the acU~ sales price, whether wholesale or retail, and whether wholly or partly for cash or on credit or in exchange for any other product, commod/ty, service, commercial paper or forbearance, of ail sales of merchandise and all charges made by Lessee and its employees or others acting on its behalf for the rendition of services of any kind whatsoever, made from or upon the demised premises. (3) (2) All other receipts of all business conducted in, at or from the demised pretties, including all deposits not refunded to purchasers, proceeds, rece~ts or any revenue derived whatsoever from the use of demised premises (i.e. rental, repair or cleaning of tenn~ equipment, tennis reservation fees, tournament fees, fees for lessom, etc.). (3) Orders taken in or from the demised premises although said orders may be filled elsewherel and sales by any subtenant in or from the demised premises, and ail without credit to Tenant for uncollected or uncorrectable credit accounts. (4) GrOsS receipts of all coin-operated devices which may be phced in the demi.qed premises by Tenant or under any rent concession, percentage or other arrangement including, without limitation, such devices as pinball machines, vending machines, video games and ~ devices (but excluding revenue fi-om telephones that are collected by a public and/or private utility), except that nothing herein shall be construed as Citys consent to the use of same in the demised premises; and (5) All other revenues or receipts generated by or arising from the use of the demised premises. Co) Exclusions from Gross Sales, Notwkhsmnding anytl~g to the contrary contained herein, Gross Sales shall not include, or if included there shall be .deducted (but only to the extent that they have been included), the following: · (1) Sales and use taxes, so-called kmury taxes, commmers' excise taxes, gross receipts taxes, and other ~ taxes now or in the future im?sed on the sale of merchandise or "~ervices, but only if such taxes are added to the selling price and collected from customers. (2) The transfer or exchange of merchandise between ,the stores or businesses of Tenant, if any, where such transfers or exchanges of merchandise are made solely for the convenient operation of a business owned and operated by Tenant and not for the purpose of consummating a prior sale made in, to or from the demised premises or for the propose of depriving ' City of the benef~ of a sale which otherwise would be made in, at or from the de~qed premises. (3) The mount ofretmm to shippers or manufacturers. .. (4) The amolmt of any cash or credit refund made upon any sale where the merchandise sold or some pan thereof is thereafter returned by the purchaser. Each sale upon · inst~llment or credit shall be treated as a sale for the full price in the month during which such sale shall be made, irrespective of the time when Tenant shall receive payment (whether in full or partial) from its customers. (5) which are not stock in trade. (6) damage to merchandise. Sales of trade fixtures or personal property to be replaced by Tenant Sums and credits received in the settlcnnent of claims for loss of or (7) Gift certificates, or similar vouchers, until such time as they shall have been}Convened into a sale by red.on. (8) (9)' purposes without charge. (10) Meals provided for officers or employees without charge. Meals, goods or products provided for promotional or publicity 'Cash refunds made to ct~omers in the ordinary course of business. (11) Value added taxes ('WAT") or other taxes added to the selling price of products and other sim~ taxes now or hereafter impo. sed upon the sale of merchandise or services, whether such taxes are added to the selting price or included therein. (12) Discounted sales to en~ployees of Tenant, not to exceed 2% of Gross Sales. (c) Sta)ements of Gross Sales. Lessee shall furnish to City statements of Lessee's Gross Sales within twenty (20) days after the end of each applicable Percentage Rent quarter. Each statement shall be signed and certified to'be correct by an officer or employee of Lessee. · 3.4 Payment shall be payable at the office of the City Manager at 300 Cemennial Way, ~rustin, CA or at such other place or places as City may, from time to _time, designate by written notice to Lessee delivered on or before the fifteenth day of each month following initiation of the term of this - .-.Lease. 3.5 Rent and other sums due City under this Lease shall be due when specified in this Lease and shall bear a late payment charge of two percent (2%) per month if not paid within ten (10) calendar days after the date on which payment is due. In no .event, however, shall any such late .charges exceed the maximum amount permitted by law. Any returned checks will be assessed the maxirmzm fee for returned checks permitted by State law to cover bank charges. In addition, the late payment charge shall be added unless the replacement payment is made within the ten (10) calendar day grace period. 4.0 ACCOUNTING KECO~S 4.1 All sales shall be recorded by means of cash registers which publicly display the amount of each sale and automatically issue a customer's pre-numbered receipt or verify the amount recorded on a slip. Said cash register shall in ail cases have locked-in sales totals and tran~ctions counters which are constantly aco_~mulating and which cannot, in either case, be reset, and in addition thereto, a tape located within the register on which transaction numbers and 'sales details are '~ ,nuprimed. Beginning and ending cash register readings shall be made a matter of daily record. In the event of a technical or electrical failure of the cash register' Lessee shall record by hand ail collections, and issue a sequentially pre-numbered customers receipt in like manner. (5) } 4.2 Lessee shall be required to mainta~ a method of accounting, to the satisfaction of the City, which correctly and accurately reflects the gross receipts and disbursements related to tenant impr~ ovements and maintenance costs of the Lessee in connection with each type of authorized operations (food and beverage concession). The method of accounting, including bank accounts established for said operations, shall be separate fi-om the accounting system used for any other business operated by Lessee or for the recording Lessee's personal financial affairs. Such method shall include the keeping of the following documents: a. Regnlar books of accounting such as general ledgers. b. Journals inchding any supporting and underlying docmnents such as vouchers, checks, tickets, bank statements, etc. State and Federal income tax remms and California sales and use returns and checks and other documents providing payment of sumq shown. Cash register tapes (daily tapes may be separate but shall be retained so that from day to day the sales can be identified). e. Any other accounting records that the Finance Director or City Manager deems necessary for proper reporting of receipts. 4.3 'An documents, books and accounting reco~ shall be open for inspection and re- inspection at any reasonable time during the term of thk Lease and for four (4) years thereafter. In addition, the Cky may from time to time conduct an audit and re-audit of the books and business so that accuracy of the above records can be confirmed. All information obtained in connect/on with the City's inspection of records or audit shall be treated as confidential information, and, to the extent permitted by. law, exempt from public disclosure thereof. Lessee shall cooperate with City in making the impectio~ 4.4 In the event that an audit or review conducted by the City finds that due to Lessee's non-compliance with its obligation to report gross r~ts in connection with its operations authorized herein, an actual loss and/or projected loss of revenue to City can be dete~uinect, the City, at its option .~hall: (1) bill Lessee for said losses, said mount to be paid to City within thirty (30) days following b~lling therefore unless otherwise extended by the City Manager, and/or (2) use the Security Deposit as provided for herein; and/or (3) terminate thi.q Lease. 4.4.1 Should the City find that the additional rental payment due to City exceeds two percent (2%) of the total amount which should have been paid as determined by such review or audit and observation, and there being no reasOnable basis for the failure to report and pay thereon, Lessee shall also pay the cost of the audit as determined by City and pay late charges as heretofore provided for the delinquent paymems. 4.5 Lessee shall furnish the City .with a monthly gross receipts report showing the amount payable therefrom to the City. Such a report shall accompany each monthly payment required to be (6) made as provided hereir~ The monthly reporting period shall be by calendar month, rather than monthly anniversary date of the effective date of this Lease. In adclition thereto, Lessee shall furnish the ~ity with monthly profit and loss statements and an annual profit and loss statement and a balance sheet prepared by a person and in a form acceptable to said City. The monthly profit and loss statements shall be submitted with the monthly rental payment. The annual financial statement shall be submitted within sixty (60) days alter the close of the Lease year. Said closing date ~aI1 be determined by reference to the date for commencement of the term herein provide& 5.Q BUSINESS PURPOSES AND BASIC SERVICE OBLIGATIONS 5.1 Food and Beverage Concession Operations A. Business Purposes The demised premises are to be used by Lessee for the operation of a food and beverages concession area and 'associated retail operations all in substantial accordance with the Lessee's proposal to the City for operation of the demised premises. Copies of the portions of the proposal relevant to goods, services and operations provided, are attached hereto as Extn~bit D and incorporated herein by reference. To the extent of any conflict between the provisions of the proposal and the provisions ofthis Lease, the provisions ofthis Lease shall conlxol. B. Lessee's Staff Lessee shall be responsible for each member of its food and beverage staff to comply with all regulations as determined by the Orange County Health Department in food preparation Lessee shall be responsible for hiring the necessary'personnel'to conduct opemti0ns. Lessee shall comply with all federal, state and local laws relating to minimum wage, social secnnSty, civil rights, ADA, unemployment compemation .and workers' compensation Lessee shall require all employees to observe all applicable City rules and regulations and to exercise courtesy and consideration in their relations with the public. C. Days and Hours of Operation Lessee 'shall submit for City's approval a schedule setting forth hours of operation for the business. Any curtailment or decrease of this service is subject to the prior written approval of the city. The above days and hours of operation shall be complied with unless advance wrkten authorization to deviate from this schedule has been obtained form the Cky Manager. The hours of operation would be subject to change to adjust to the needs of the ' conmmity. Special hours would be added to accommodate spec/al tournaments or events. The hours designated at the outset ofthe lease shall be: Fall and Spring: Monday thru Friday 2:30 p.m to 9:30 p.m (~) Wrater (Dec to Jan) Saturday Sunday Monday thru Friday Saturday Sunday Holiday Weekday 9:00 a.m. to 9:30 p.m 12:00 noon to 5:00 p.m 5:00 p.m. to 9:00 p.m 9:00 a.m to 5:00 p.m Closed Closed Summer Monday thru Friday Saturday Sunday 11:00 a.m. to 10:00 p.m. 9:00 a.m. to 10:00 p.m. 12:00 noon to 5:00 p.m. D. Food and Beverage Products Lessee shall provide and maintain the necessary food and beverage products required to satisfy the public demand therefor. All such products sold or kept for sale by Lessee shall be first class in quality, wholesome and pure and shall conform to the Federal, State County and City food laws, ordinances and regulations in all respects. No adulterated, mi.qbranded or impure articles shall be sold or kept for sale by Lessee and all food and beverage products kept on hand by Lessee shall be stored and handled with due regard for sanitation In the event that Lessee's food and beverage products are deemed by City Manager to be less than first class in quality, said officer shall have the fight to order the improvement of the quality of any such products kept or offered for sale. 5.2 Exclusivity Lessor agrees that LesSee shall have the eXclusive right to conduct a food and .beverage concession business on the Sports Park site. The City of Tustin reserves the right to determine four (4) public event days sponsored by the City of Tustin without Lessee's prior written consent for the purposes of pr°riding alternative food and beverage services. 6.0 MAINTENANCE 6.1 Building, Equity. ent and Grounds Maintenance A. Lessee shall~ at its cost and expense during the term of thiu Lease, keep and maintain the demised premi.~es and ail improvements, .fixtures, trade fixtures, equipment and utility systems which may now or hereatter exist thereon, in good, operable, useable and sanitary order and repair and in a good, safe and first-class condition throughout the term ofthi.~ .Lease, providing for such repairs, replacements, rebuilding and restoration as may be required'by the City to comply with the requirements hereof. All such repairs and/or any modifications or additions to the facili~es shall have the approval ofthe City prior to their implem~tation B. Should Lessee fail, after ten'(10) days notice from City of the need thereof, to perform its obligations required hereunder,' City in addition to all other available remedies may, but shall not be obligated to, exercise its right-of-en~ as provided hercqnaf~er in Section 23. Lessee shall forthwith on demand reimburse City for its costs incurred in connection with such right of entry including direct and indirect overhead costs as determined by the City. (8) C. In regard to the level of maintenance, all work shall be performed in accordance witl~the highest industry-wide maintenance standards at established frequencies so as to maintain the aesthetic level and proper condition of the concession facility. D. Regularly scheduled inspections of the demised premises and of Lessee's operations authorized herein shall be made by the City. The written report of such inspections shall be recorded, retained for reference, and fonvarded to 'Lessee upon request. E. In regard to emergency services, the Lessee will provide the City with the names and telephone numbe~ of at least two (2) qualified persons who can be called by City representatives when emergency maint~ce conditions occur dumg hours when the Lessee's normal work force is not present. The City shall call for such assistance only in the event of a genuine and substantial emergency. F. The Lessee at its sole cost and expense shall finnish ail necessary equipment, supplies and material of good qualky and in sufficient number to kfltiI1 the requirements of this Lease and to acco~lish an acceptable and professional level of maintenance. G. City shall be responsible for the maintenance and repak of the exterior of all concession structures, except to the extent that City finds that Lessee is respons~le for damage to the exterior of a concession structare. In that case, City shall have the option of either requiring Lessee to .repair the damage, or repairing the damage itself, at Lessee's expeas, e. 6.2 Operation of Demised Premises. Lessee shall operate and manage the demised premises in a first-class manner, comparable to other first-class businesses providing similar facilities. 7.0 OPERATING RESPONSIBILITIES 7.1 Compliance with Laws Lessee shall conform to and abide by. all City and coming ordinances, and all state and federal laws and regulatiom, insofar as the same or any of them are applicable; and where ~s and/or licenses are required for the food and beverage and/or tennis operation heretmder and/or any consm~on authorized herein, the same must be first obtained ~om the regulatory agency having jurisdiction thereover.. 7.2 COmpliance with Rules and Regulations Lessee shall conform to and abide by all rules and regulations of the City Coun~ md the City Manager insofar as the same or any of them are applicable. 7.3 Disorderly Persons Lessee shall exercise every reasonable effort not to allow any loud, boisterous or (9) disorderly persons to loiter about the demised premises. 7.4 Illegal Activities Lessee shall not knowingly permit any illegal activities to be conducted upon the demised premises. 7.5 ~ Lessee shall not post si~.q upon the demised premises or improvements therein unless prior written approval therefore is obtained from the Community Development Director. Compliance w/th the City's sign ordinance provisions shall be the responsibility of the Lessee. This approval shall not be unreasonably withheld. 7.6 Lessee's Staffand Employment Practice Lessee shall maintain an adequate and proper staff. The City may at any time give Lessee written notice to the effect that the conduct or action of a designated employee of Lessee is, in the reasonable belief of the City, detrimental to the interest of the public patronizing the demised premises. Following City's written notice therefor Lessee shall, at City's discretion: (1) terminate Such employee's work assi~ment at the demised premises or (2) meet with representatives 'of the City to consider the appropriate course of action with respect to such matter and Lessee shall take reasonable 'measures under the circumqances to assure the City that the conduct and act54fies of Lessee's employee will not be detrimental to the interest of the public patronizing the demised premises. " A. Lessee shall establish an identification system for personnel assigned to the concession facility which clearly indicates to patrons 'the name of the person(s) on duty. The identification system shall be famished at the Lessee's expense and may include appropriate attire, name badges and/or name plates as specified by the City. B. Lessee warrants that it fully complies wkh all laws regarding employment of aliens and others, and that all its employees performing services hereunder meet the citizenship or alien status requirements contained in federal and.state statutes hnd regulations. Lessee sba3 obtain~ from all covered employees perfo~g services hereunder,, all verification and other documentation of employment eligltaI~ stares required by federal and state statutes and regulations as they curr~y exist and as they may be hereafter mended. Lessee shall retain such docmnentation for all covered · employees for the period prescribed by law. Lessee shall indemnify, defend, and hold harmless, the City, its offices and employees from employer sanctions and any other liability which may be assessed against Lessee or city or both in connec~on with any alleged violation of federal and/or state statutes or regulations pertaining to the eligl'bility for employment of persons performing s~xvices under this Lease. 7.7 Utilities A. Lessee shall make all arrangements for and pay for all applicable utilities fmuished to or used on the demised'premises including without limitatiom gas, electricity, water, (10) refuse removal, telephone sexvice, cable TV, etc. In addition, upon expiration or earlier termnation of any ltreexisfing City concession agreements, Lessee shall provide for the transfer of all applicable utility accounts from any prior concessionaire to Lessee and thereafter shall pay for said utilities. B. Lessee waives any and all c!a~m~ again~ C'!tY for compensation for loss or damage caused by a defect, deficiency or impakment of any utilities system, water system, water supply system, drainage, sYStem, waste system, heating or gas system, electri~ apparatus or wires serving the demised premises. City shall warrant ail underground or '~dden" plnmbing, utilities and structure. 7.8 Sanitation Lessee shall keep the demised premises free-and clear of rubbish and litter and shall deposit rubbish and litter in containers designated by City. Trash containers shall be kept in an approved enclosed area. City shall Charge Lessee monthly for rubbish removal, at rotes no greater than the stan~d rate charged other commercial users for City rubbish removal services.' No offensive matter or refuse or substance constitufi'ng an nnnecessary, unreasonable, or unlawful fire hazard, or material detrimental to the public health shall be permiaed to remain on the demised premises and Lessee shall prevent any accumulation thereof from occurring. 7.9 Security Devices Lessee may provide any legal devices, mechanisms or equipm~t desigmed for the purpose of protecting the demised premises from theft, burglary or van&ti.qm, provided written approval for installation thereof is first obtained from the City. Ail purchases and installation thereof Shall be at Lessee's expense. During the last thirty (30) days prerxding the termination of this Lease, Lessee shall remove ~me from the dem[qed premises, except for those items of personalty which have been furnished by City or have been so aftqxed that their removal therefrom cannot be accomplished without damage to the realty as determined by the City. 7.10 Prices Lessee shall at all times ~ a complde Est or schedule of the prices charged for an goods and services, or combinations thereof, supplied to the public on or from the dcnnis~ pren~es. Said prices shall be fair and reasonable based upon the following considerations.: that said operation is intended to serve the needs 'of the public for the goods and/or services supplied at a fair and reasonable cost; ~mparability with prices charged for similar goods and/or services supplied in the Orange County area; and reasonableness ofprofit margin in view of the cost ofproviding same in compliance with the obligations assumed in this Lease. 'In the event the City notifies Lessee that the prices being charged are not fair and reasonable, Lessee shall have the right to confer with the City and justify said prices. Following reasonable conference and consultafion'thereon, Lessee' shall make such price adjustments as may be ordered by the City. Lessee may appeal the det~m~ination of the City to the City Council, whose decision thereon shall be final and conclusive. However, Lessee shall comply with the ordered price adjustment pending the appeal and final ruling thereon by the City Councnl 7.11 Safety_ (11) } Lessee shall immediately correct any unsafe condition of the demised premi.~es, as well as any unsafe practices occurring thereon Lessee shall obtain emergency medical care for any employee who is in need thereof, because of illness, or injury occun/ng on the demised premises. Lessee shall cooperate fully with City in the investigation of any injury or death occurring on the demised premises, including a prompt report thereof to the City Manager. 7.12 .Quati_ty of Goods and Services Services to the public, with goods and merchandise of the best quality and at reasomble charges, is of prime concern to City and is'considered a part of the consideration for thi.~ Lease. Therefore, Lessee agrees to operate and manage, during the entire term of this Lease, the .facilities in a first-class manner, and comparable to other similar facilities and services. Where such facilities are provided, Lessee shall furnish and dispense foods and beverages of the best quality and shall maintain a high standard of service at least equal to that of other food/beverage snack bar establishments in City and/or adjacent communities and to those prevailing in such areas for similar products and services, and withouf discrimination Lessee, following rece~ of written notification therefor, shall immediately withdraw or remove from sale any goods or services which may be found objectionable to the City based on findings that the provision of such goods or services are harmful to the public welfare. 7.13 .Reporting The Lessee or his representative shall meet with the City Manager or his representative at such other times as may be required by the City to review Lessee's performance under this Lease and to-discuss any problems or matters as detem~ed bythe City. 7.14 Trade Fixtures Lessee at its own expense shall provide and install an appliances, furniture, fixtures, equipment, door locks and padlocks or personal property that are required for the operation of the demi.~ed premises. Dtu/ng the last thirty (30) days preceding the termination of this Lease, Lessee shall remove same from the demised premises, other than for those items which have been so affixed that the removal therefrom cannot be accomplished without damage to the realty. Should Lessee fail to so remove said appliances, furniture, fixtures, equipment, door locks and padlocks within said thirty (30) days period, Lessee shall lose all right, title and interest in and thereto, and City may elect to keep same upon the demised premises or to sell, remove or demolish same. Lessee shall reimburse City i'or any cost, as determined by the City Manager, incurred in excess of any consideration received from such sale, removal or demolition. 7.15 Habkation The demised premises shaIl not be used for human habitation 7.16 Nuisances and Annoyances (12) Lessee shall not use or permit the use of the demi.qed premi`qes in any manner which crea~es a nuisance or measurable annoyance to. persons outside the demised premises, including, without limitation, live, recorded or broadcast entertainment or the use of loudspeakers or sound or light apparatus other than as may be required by law or necessary or advisable for safety purposes and other than a customer paging system. 7.17 Inspection Services, equipment and improvements shall be subject to inspection and approval by the City Building Department, the County Health Department, and the Fire Marshall~ as applicable. 8.0 KEQUIRF. D TENANT IMPROVEMENT PROGRAM 8.1 A tenant improvement program shall be prepared by Lessee and approved by the City which Shall indicate the description of the tenant impjovements proposed by Lessee in order to operate said concession, the estimated impJovement costs, and the projected time frame for commencement and completion of the tenant improvement project. It is understood that the construction' and/or impr. ov~ts required herein may, at the discretion of Lessee, be constructed in phases, each phase being separated from the other by a period of time to be mutually agreed upon by Lessee and the City Manager. In no event' shall the phasing of the construction required herein extend the completion thereof beyond the date heretofore provided, subject to the prov/sions ofparagraph 8.4.. · 8.2 City and Lessee may agree from time to time that various additional tenant i.mprovement(s) mutually agreed upon, shall be completed as necessary to improve and/or ensure the USeabilky of the demi.~ed prem~s. .8.3 Prior to commencement of construction, Lessee shall obtain City's wrkten approval of ail plan% specifications and construction cost estimates by Lessee for the tenant improvements to be constructed upon the dem[qed premi.qes. No modification 'of said plan.q, specqfications, or tenant ~mpr. ovements, shall be made'by Lessee without approval thereof by the City. Lessee agrees that City may have on the site at any time during the construction improvement period an 'inspector who shall have the right of access to the demi.qed prerni`qes and the construction work. 8.4 The parties agree that any delay in the construction due to 'fire, earthquake, war, labor dispute or other events without fantt and beyond the control of Lessee shall extend the time in which said construction must be completed by the length of time of such delay. 8.5 Lessee shall 'constmct, perform, complete and mainta~ all construction and inst_allations covered by thi`q Lease in a good and workmanl~e manner and with high quality materials, and shall ftu~h all tools, equipment, labor and material necessary to perform and to complete same. Upon completion of the tenant impr. ovements, Lessee shall furnish the City with one (1) complete set of as-built construction drawings on mykr or its equivalent (all circuit breakers, mechanical equipment, switches, plumbing and fire sprinkler section and main values shall be plainly labeled and a master 'index shall be provided); operating man~ for bustling equipment and systems; and copies of all written warranties. Upon t~on ofthi.q Lease whether by expiration of term or cancellation, Lessee shall (13) assign to City all express warranties furnished by other persons in connection with the provision of' labaf and/or material to the works of impjovement' covered by this Lease. Upon review by and consultation with City's Finance Director or City Attorney, Lessee shall provide such insurance coverage as City reasonably deem necessary for the contemplated construction project. .9.0 ADVERTISING AND PROMOTIONAL MATERIALS Lessor reserves the right to review and approve any advertising or promotional materials. Said approval shall not be unreasonably withheld or delayed and shall be deemed to be given ff no objection is made within fifteen (15) business, days fonowing the request for approval Such materials include, but are not limited to: advertising in newspapers, magazines and trade joumals, and radio and/or television commerciak. Lessee may, at its own expense, place such siLm.q in or upon the demi.qed premi.qes as it may 'deem necessary subject to compliance with Sections 8600 et seq. and 9400 et seq. of the Tustin City Code and provided consent by the City as to the type, design and method of installation is first obtained and proper permits obtained. All signage placed by Lessee on, in or about the demi.~ed premises shall remain the property of the Lessee and shall be removed by Lessee upon termination or expiration of 'this Lease at Lessee% expense, and any damage caused by such removal shall be repaired at Lessee's e~e. 10.0 BONDS 10.1 During any period of construction of the tenant improvements herein required or otherwise authorized, Lessee shall provide a performance bond in an amount of not less than one hundred percent (100%) of the cost for the construction to be performed as evidenced by contracts for all required tenant impr~ ovements, payable to the City of Tustin and executed by a corporate surety licensed to do business in, and in good standing in, the State of California and acceptable to the Risk Manager and City Attorney. The surety shall have a Best% Key Rating of at least A VII. The condifi'on of the bond shall be such that if Lessee shall complete the required construction specified herein in accordance with approved plans and specifications for the tenant impr. ove~ts and receive a certificate of occupancy for the buil~g, then surety shall no longer be bound thereon Said bond shall be main~ed in full force and effect by Lessee until said tenant improvements have been accepted by the City. 10.3 The City Attorney n~ay accept in lieu of the bonds heretofore descdtxxt, the performance and payment bonds of COrporations duly authorized to issue surety bonds by the State, naming as principal a licensed contractor eng>loyed by Lessee to construct works of impjovement on the demised premises provided each bond othemise conforms to the requirements set forth in 10.1 and 10.2 and names City as an additional obligee. 10.4 Lessee shall have the option to deposit with the City cash or United States Government securities in all respects satisfactory to the City Attorney in lieu of the surety obligations herein required. Said cash or seanifies shall be deemed deposited with City to secure full and satisfactory (14) i::~formance of the principal obligations h~retofore descn3xxt for which Surety is required, and shall be releas~ upon satisfactory performance thereof, as evidenced by certification of completion by the City Manager and unconditional release of mechauic's liens by all claimants. In lieu thereof, Lessee may deposit the required _amount in a bank or other financial institution whose deposits are federally insured, provided the account is made payable to City on demand and the ~cates of deposit are delivered to the City Manager. Lessee shall be entitled to all interest on the deposit and to the remm of the certificate of deposit upon satisfactory performance as heretofore define& 11.q DESTKUCTION OF DF. MISED PREMISES 11.1 in the event the demised premises shall be totally or partially destroyed by a risk covered by the insurance coverage required herein, Lessee shall either restore the demised premises or terminate this Lease. City shall make the loss adjustment with the insurance company insmSng the loss and receive payme-at of the proceeds of insurance. If the destruction is from a risk for which insurance coverage is not required or provided under said policy of insurance, City shall either restore the demised premises or terminate this Lease. Said insurance proceeds, if any, shall be held for the benefit of Lessee only'in the event of an election by Lessee to restore the demised premises and shall be disbursed in installments as constmcti°n progresses for payment of the costs of restoration upon satisfactory performance of the work required, as evidenced by certification of completion by the City Manager and release of mechanic's liens by all persons furnishing labor and materials thereon. If the proceeds ofinmmnce are insufficient to Pay the a~al costs of restoration, Lessee shall deposit the amount of the deficiency with the City upon demand therefor by the City Manager, and said sums shall be held for payment of said costs and disbursed in the manner heretofore provide& Amy undistn~buted funds shall be retained by City and credited to the rental reserved over the remaining term of this Lease. ~Lessee elects to restore.the demised premises, plans, specifications, and construction cost estimates ' for the restoration thereof shall be prepared by Lessee and for~varded to .City for approval prior to the performance of any work thereon. Said documents shall be prepared and submitted in a timely manner following adjustments of the loss and receipt of the proceeds of inmrance by City. The required construction shall be performed by Lessee and/or licensed and bonded contractor(s) thereof who shall be required to carry comprehensive liability and property damage inmrance, workers' compensation insurance, and standard fire, and extended coverage insmance, with vandalism and malicious mischief endorsements, during the period of construction, in amounts equal to the insurance limits required herein, or as otherwise determined by the City. Said construction shall be commenced promptly following the approval thereof by the City, issuance of permits therefor by governmental agencies having jurisdiction thereover, and posting of the construction site by City with notice of nonresponsi~ity, and shall be diligently prosecuted to completion All work shall be performed in accordance with the approved plans and specifications, unless changes therein are approved in advance thereof by City. Lessee agrees that City may have on the site at any time during the construction period an inspector who shall have the right to access to the demised premises and the work occurring thereon Lessee, at the commencement of the construction work, shall notify City in writing of the identity, place of business, and telephone number of responsible person(s) in charge of the consuuction to be occunSng thereon All construction shall be performed in a good and worlcmanl~e manner. Upon completion of the restoration, Lessee shall immediately record a notice of completion with the Registrar-Recorder. · (15) 11.2 If the demi.~ed premises are restored, this Lease shall continue in full force and effect, except that ff Lessee files a claim therefor with the City, the payment to be made by Lessee shall be abated and/or other relief afforded to the extent that the City may det~nine the damage and/or restoration interferes with the concession operation, provided any such claim shall be denied ff the destruction of the demised premises is found by the City to have been mused by the fault or neglect of Lessee. Lessee agrees to cooperate in the determination of the abatement and/or other relief to be provided by furnishing all information requested relative to the concession operation, and permitting examination and audit of all accounting records kept in connection with the conduct thereof. 11.3 Lessee shall cooperate in the restoration of the demised premiss by vacating the same and removing therefrom all items of inventory, trade fixtures, equipment and furnishings for such periods as are required for the restoration thereof. 11.4 The aforesaid provisions for abatement and/or other relief shall also be applicable to a total or partial destruction of the demised premises by the aforementioned causes, except that the relief to be provided shall be based upon the extent the City may determine that the reduction in the public's use of the demised premises due to the partial or total closure thereof has affected the concession operation 11.5 Lessee agrees to accept the remedy heretofore provided in the event of a destruction of the demised premises and hereby waives-any and all additional rights and remedies for relief or cprrpensation that are presently available or may hereafter be made available under the laws and statutes of this State. i~..0 CONSTRUCTION BY CITY AFFECTING DEMISED PREMISES 12.1 In the event City shall construct or cause to be constructed a new facility or renovation on the demised premises, for reasons described in Section 11, this Lease shall continue in full force and effect, except that the payments to be made by Lessee shall be abated and/or other relief afforded to the extent that the City may determine the construction interferes with the Lessee's authorized operations, provided a claim therefor is filed w/th the City within one hundred (100) days of the commencement of construction- Lessee agrees that the provisions of Section 12 shall not apply to improvements construCted pursuant to the tgnant improvement plan_ 12.2 Lessee agrees to cooperate with City in the event the construction affects the demised premises by vacating the same and removing therefrom all items of inventory, trade fixtures, equipment and ~gs for such periods as are required by the construct/on of the new facilities. Lessee further agrees to COOlX~te in the determination of the abatement and/or other relief to be provided by furnishing all information requested relative to the operation and permitting examination and audit of all accounting records kept in connection with the conduct thereof. 12.3 Following completion of the new or renovated facility, Lessee shall resume its operations therefrom within thirty (30) days of written notice from the City Manager that the demised premises are now available for occupancy. (16) 12.4 The aforementioned provisions of thi~ section shall also be applicable in the event of p~ce of work on the demised premises that requires a partial or total closure thereof, except that the abatement and/or other relief to be provided shall be based upon the extent the City may determine that the reduction in the public's use of the demised premises, due to the partial or total closure thereof, has affected Lessee's operations. 12.5 Lessee agrees to accept the remedy heretofore,' provided in the event of construction upon the demised premises, and hereby waives any and all additional rights and remedies for relief or compensation that are presently available or may be made available hereafter under the laws and statutes of this State. 13.0 INDEPENDENT CONTKACTOK 13.1 This Lease is by and between the City of Tustin and Lessee and is not intended and shall not be construed, to create the relationship of agent, servant, employee, or representative of the City by the Lessee. 13.2 Lessee understands and agrees that all persons furnishing services to Lessee pursuant to ~his Lease are, for purposes of Workers' Compensation, liability, employees solely of Lessee, and not of City. ' 13.3 Lessee shall bear the sole responsibility and liab'tlity for .furnishing' workers' compensation benefits to any person for injuries from or connected with services performed on behalf .of. Lessee pursuant to this Lease. 13.4 Lessee understands and specific.~y agrees'to inform its employees that Lessee is an independent contractor to the City. 13.5 Lessee understands and specifically agrees to inform its employees that they are not agents or employees of the City. 14.0 SECURITY DEPOSIT 14.1 Prior to the commencement of the term of this Lease, Lessee shall pay to the City a surm equal to one-twelf~ (1/12th) of the M'mimnm Annual Rent. In lieu thereof, Lessee may deposit said amount in a t~_nk or other financial institution whose deposits are federally insured, provided that a certificate of deposit is delivered to the City Manager giving City the exclusive right to withdraw any or al/of said amount at any time during the terin of this Lease. Lessee shall be entitled to any and all interest ac.m~g from said certificate of deposit. A. Said su~m shall serve as securky for faithful performance of all covenants, prorates and conditions assumed by Lessee herein, and may be applied in satisfaction.and/or mitigation of damages arising from a breach thereof~ incl~ding, but not limited to, delinquent payments; correction of maintenance deficiencies; securing required ' .msm'a_nce; 10ss of revenue due to abandonment, vacation (17) or discontinuance of food and beverage operations or termi.q concession operations; completion of cons~uction; and payment of mechanic's liens. Application of mounts on deposit in satisfaction and/or mitigation of damages shall be without prejudice to the exercise of any other rights provided herein or by law to remedy a breach ofthi.q Lease. B. In the event any or all said mounts is applied in satisfaction and/or mitigation of damages Lessee shall immediately deposit such sums as are necessary to restore the security deposit to the full amount required hereunder. C. Said sum shall be returned to Lessee upon termination of this Lease less any amounts that may be wkhheld therefrom by City as heretofore provide& 14.2 Additionally, Lessee shall fiauish to City a faithfifl performance bond in a sum equal to one-sixth (1/6th) of the M'mimurn Annual Rent payable to the City and executed by a corporate surety licensed to do business in, and in good standing in the State of Califom and acceptable to the Risk Manager and City Attorney. The surety shall-have a Best's Key Rating of at least A VII. Such bond shall be satisfactory to City in all respects and shall be conditioned upon the faithful performance by Lessee of the terms and conditions of this Lease and shall be renewed to provide for continuing liability in the above amount notwkhstanding any payment or recovery thereon A. The City Attorney may also accept from the Lessee, in lieu of the bond heretofore descn~oed, the deposit of the r .equ/red amount in a bank or other financial institution whose deposits are federally insured, provided that the amount is made payable to City on demand and the certificate of deposit is delivered to the City Manager, or such other instrument such as an irrevocable ! ~etter of credit payable only to City and in. form and content accepm, ble to the City Attorney. Lessee shall be entitled to all interest 'on the deposit and the remm of the ceaificate of deposit upon satisfactory performance as heretofore defined. 15.0 HOLD HARMLESS AND INDEMNIFICATION 15.1 The Lessee shall indemnify and save harmless the City of Tustin and all officers, employees, agents and independent contractors thereof from all claims, suits, or actions of every name, kind, and description, brought for, or on account of; 'injuries to or death of any person including, but not limited to, workmen and the public, or damage to property resulting from thc construction of the work or by or in consequence of any negligence regarding the work, the use of~mpr~ oper materials or equipment in construction of the work, the neglect or refusal of the Lessee to fakhfully perform the work and all of the Lessee's obligations under thi,q Lease, or by or on account of any act or omission by the Lessee or his agents or a subcontractor or his agents or a third party during the progress of the work or at any time before its completion and final acceptance, or which might arise in connection with the agreed upon work or is caused by or happening in connection with the progress of said work 15.2 The indemnification by the Lessee shall include all costs and expenditures including attorney's fees incurred by the City of Tustin or its employees, officers, agents or independent contractors with respect to such claim or suit and the Lessee will, if requested by the City, defend any litigation arising out of such claims at the sole cost and expense of the Lessee. City shall have the fight (18) to select legal counsel of its choice in connection with such defense. 16. INS~CE 16.1 Without limiting Lessee's indemnification of City, Lessee shall provide and maintain at its own expense during the term of this Lease the following program(s) of insurance covering ks operations hereunder. Such inszmance shall be provided by insurer(s) licensed to do business in, and in good standing in, the Sate of C21ifornia, with a Best's Key Rating of at least A VII, and satisfactory to City's Risk Manager and the City Attorney. Evidence of such programq satisfactory to City shall be delivered to the City on or before the effective date of this Lease. Such evidence shall specifically identify this Lease and shall contain express conditions that City is to be given written notice at least thirty (30) days in advance of any modification or termination of any program of insmauce. Such insurance, w/th the .exception of Workers' Compensation insurance, shall be primary to and not contributing with any other insurance maintained by City, and shall name the City and its officers and en~loyees as additional insureds. The City ofTustin hsmance Endorsement Form, a copy of which is attached as E~ E hereto and incorporated herein by reference,, must be executed by the applicable insurance underwriters and delivered to City. A. DmSng the term of this Lease, following completion of construction of tenant improvements, Lessee shall provide and maintain the following forms and mounts of insurance: 1.. Liability: Comprehensive General Liability insurance endorsed for independent Contractor, Premises-Operations, Products/Completed Operations, Contractual, Broad Form Property Damage, and Personal Injury with a combined single limit of not less than ONE 5}[ILLION DO~ ($1,000,000.00) per occurrence.' If such insurance is written on a Claims Made Form, such insurance shall be endorsed' to provide an extended reporting per/od of not less than five years following termination of this Lease. 2. Workers Compensatiorr A program of Workers' Compensation insurance in an amount and form to meet all applicable requirements of the Labor Code of the State of California, including Employers' Liability with a $150,000 limit covering an persons providing services by or on behalf of Lessee and all risks to such persons under this Lease. 3. Property_ Coverage.: (1) Real Property - All Risk insurance, including flood, for the full insurable replacement value with a deductible no greater than five percent (5%) for all risk related coverages, and (2) Personal Property Insurance for the actual cash value against the hazards of fire, theft, burglary, vandalism and malicious mischief. B. During the period(s) of construction of'tenant improvements as required herein, Lessee shall provide the fonowing forms and amounts ofinsurauce: 1. · Builders All-Risk Insurance: including flood coverage, covering the entire work, again~ loss or damage until completion and acceptance by the City Manager. Insurance shall be in an amount for the replacement value of the impr. ovem~ and endorsed for broad form property damage, breach of Warranty, explosion, collapse, and underground hazards. Deductibles not (19) exceeding five percent (5%) of the construction cost will be permitted. 2. 'Comprehensive General Liability: endorsed for all owned and non- owned vehicles with a combined single limit of at least Three Hundred Thousand Dollars ($300,000) per occurrence. 3. Workers' Compensation: a program of Workers' Compensation insurance in an amount and form to meet ail applicable requirements of the Labor Code of the State of California, including Employer's Liability with a $150,000 limit covering all persons providing services by or on behalf of Lessee and all risks to such persons under this Lease. 16.2 Failure on the part of Lessee to procure or maintain iequired inmmnce shall constitute a material breach of contract upon which City may immediately terminate this Lease. 16.3 Conduct of Lessee's operations shall not commence until Lessee has complied with the aforementioned insurance requirements. Further, said operations, whether in whole or in part,, shall be subject to suspension with City during any period that Lessee fails to maintain said policies in full force and effect. 16.4 The specified amount of tiabilky insurance required herein may be subject to renegotiation on an annual basis. Should either party request renegotiation with respect to the amount of l/ability insurance to be provided, the determination thereof shall be established through mutual. negotiations between the parties. Lessee shall continue to provide insurance in the manner heretofore provided, pending final renegotiation thereof. 16.5 No cancellation provision in any insurance policy shall be construed in derogation of the continuous duty of Lessee to fum/sh insurance during the term of this Lease. At least thirty (30) days prior to the expiration of any such policy, a signed and complete certificate of insurance, with all endorsements required by this section, showing that such insurance coverage has been renewed or- extended shall be filed with the City. 17.0 TAXES AND ASSESSMENTS 17.1 Lessee shall also pay all taxes, assessments, fees .and. charges on goods, merchandise, fixtures, appliances and equipment owned or used therein. 18.0 ASSIGNMENT, SUBLETTING, AND ENTERING 18.1 Prohibition of Ass(munent. The Parties acknowledge that City is entering into this Lease in reliance upon the experience .and abilities of Lessee and its principals. Consequently, Lessee shall not vohmm.rfly assign or enmmtx.~.its interest in this Lease or in the demised premises, or mblease substantially all or any pan of the demised premises, or allow any other person or entity (except Lessee's Authorized Representatives) to occupy or use all or any pan of the demised premises without the prior written consent of City, which consent shall not be ~mreasonably withhelct Lessee shall not, (20) without the pr/or written consent of the City assign, hypothecate, or mortgage this Lease or sublease or license any portion of the demised premises. Any attempted assignment, hypothecation, mortgage, Sublease or liceme without the consent of the City shall render thi.q Lease null and void. 18.2 - Each and all of the provisions, agreements, terms, covenants and conditions herein contained to be performed by Lessee shall be binding upon any transferee thereof. 18.3 The operations herein authorized shall not be transferable by testamentary disposition or the state laws of intestate succession, as the rights, privileges, and use conferred by this Lease shall terminate prior to the date for expiration thereof in the event of the death of LesSee occurring within the term herein provided. Additionally, neither this Lease nor any interest therein shall be transferable in proceedings in attachment or execution again~ Lessee or in voluntary or involmXary proceedings in bankmptcy or insolvency or receivership taken by or again~ LeSsee, or by any process of law including proceedings under all applicable federal bankruptcy laws. 18.4 Shareholders and/or partners of Lessee may transfer, sell, exchange, assign or divest themselves of any interest they may have therein. However, in the event any such sale, transfer, exchange, assi,~nment or divestment is affected in such a way as to give majority control of Lessee to any persons, corporation, partnership or legal entity other than the majority controlling interest therein at the time of execution of this Lease, approval thereof shall be required. Consent to any such transfer shall only be refused if the City finds that the transferee is lacking in experience and/or financial ab'~-y to render and provide services for the operation of the concession(s). Failure to obtain such consent 'shall constitute an event of default under Section 21.8 hereof. .. 18.5 The prohibition herein contained shall not be applicable with respect to transfers of this i~e arising from the exercise of a power of sale or judicial forecloSUre purmant to the terms and conditions of a hypothecation or mortgage previously approved by the City. 18.6 In reference to Section 18.5 hereinbefore, the City's consent with regard to successive tran.qfers of Ihi.q Lease arising from the exercise of a power of sale or judicial foreclosure .or the assi~ment of the Lease in lieu of foreclosure, pursuant to the terms of a deed of trust previously approved by the City, shall not be unreasonably withhelc[ 18.7 In the event Lessee shall request the prior written consent of City to give, assign, transfer or grant control ofthi~ Lease, and subsequently City gives written consent to the assignment, a trar~qfer fee equal to one percent (1%) of the gross sales price shall be paid to City. Said sum shall be payable to City in full either within thirty (30) days after said consent is given or prior to the close of any escrow, whichever occurs first. 19.0 NON-DISCRIMINATION AND CIVIL RIGHTS COMPL~CE 19.1 Lessee hereby certifies and agrees that, in ail matters affecting thi.q L~e, it will comply with ail applicable federal and state hws and regulations pro~ discrimination. 19.2 Lessee certifies and agrees that all persons employed thereby, are and shall be treated equally without regard to or because of race, creed, color, rational origin, political affiliation, marital statu~, sex, age or handicaP and in compliance with ail federal and state laws prohibiting discrimination in employment, including but not limited to, the Federal Civil Rights Act of 1964; the Unmh Civil Rights Act; and Cartwright Act; the State Fair Employment Practices Art and Americans with Disabilities Act. 19.3 Lessee certifies and agrees that subcontractors, bidders and vendors thereof are and shall be selected without regard to or because of race, creed, color, national orig/n> political affiliation, marital status, sex, age or handicap. 19.4 All employment records shall be open for.~on and reinspection at any reasonable time during the term of this Lease for the purpose of verifying the practice of non-d/s~tion by Lessee/n the areas heretofore descn~becl~ 19:5 If City.finds that any of the above provisiom have been violated, the same shall constitute a material breach of contract upon which City may determine to cancel, terminate, or suspend this Lease. While City reserves the fight to determine independently that the non- discrimination provisions ofthi.~ Lease have been violated, in addition, a determination by the California Fair Employment and Housing DeparUnent or the Federal Equal Employment Opponunky Commission that Lessee has violated State or Federal non-dis~fion laws or regulations shall constitute a findingby City that Lessee has violated the non-discrimmtion provisions ofthi,~ Lease. 19.6 Lessee shall include the non-discrimination subcontracts to perform work under the contract. and compliance provisions 20.0 TERMINA~ON OF AGREEMENT 20.1 The abandonment, vacation or discontinuance of concession operations on the demised premises for more than five (5) consecutive days. This does not include inclement weather or days that the City has' given prior approval to be closed. If the City closes the park, it is deemed to be approval to close. Upon the occurrence of any one or more of the eveats of default hereinatter descn.~l, this Lease shah be subject to termination. As a condition precede~ thereof, the City Manager shall give Lessee ten (10) days notice by registered or certified mail ofthe date set for termination hereof and the grounds thereof. 20.2 Upon termimtion City shall have the right to take possession of the demised premises, including all improvements, equipmem, and inventory located thereon, and use same for the purpose of satisfying and/or ~tiga~g all damages arising fi'om a breach ofthi.q Lease. 20.3 Action by City to effectuate a tmnination and forfeiture of possession-shall be without prejudice to the exercise of any other rights provided herein or by law to remedy a breach ofthi~ Lease. (22) 21.0 EVENTS OF DEFAULT 21.1 The abandonment, vacation or discontinuance, of concession operations on the demi.qed premises for more than 5 consecutive days. This does not include inclement weather or days that the City has given approval ~o be cloSed.. If the City doses the park, it is deemed to be approval to close. 21.2 The faikn'e of Lessee to punctually pay or make the payments herein when due, where the delinquency continues beyond ten (10) days following written notice for payment thereof. 21.3 The f~e of Lessee to operate in the manner required by this Lease, where such faiEu-e continues for more than thirty (30) days 'after written notice from the City to correct the condition therein specified. 21.4 The faikn'e to maintain the demised pren~es and the impr~ ovements constructed thereon in the state of repair required hereunder; and in a clean, sanitary, safe and satisfactory condition, where such failure continues for more than thirty (30) days after written notice from the City for correction thereof, provided that where fi]lfillment of such obligation requires activity over a period of _time and Lessee shall have mediately, .following receipt of. such notice, commenced to perform whatever may be required to cure the particular default and continues such performance diligently, said _time limit may be waived in the manner and to the extent allowed by the City. · 21.5 The failure of Lessee to keep, perform and observe any other promises, covenants, conditions and agreements set forth in this Lease, where such failure continues for more than thirty (30) days after written notice bom the City for correction thereof~ provided that where fi~lfillment of Such obligation requires activity over a period of time and Lessee shall have commenced to peri'om whatever may be required to cure the partimlar default within ten (10) days after such notice and continues SUch performance diligently, said time limit may be waived in the manner and to the extent allowed by the City Manager. 21.6 The filing of a vokmtary petition in bankru~cy by Lessee; the adjudication of Lessee as a ban~; the appoinunent of any r~eiver or trustee of Lessee's assets; the making of a genera1 assignment for the benefit of creditors; a' petition or answer seeking an arrangement for the reorgauimtion of Lessee under any federal reorganization act, inchdJng petitions or answers under federal laws; the ocan'rence of any act which operates to deprive Lessee permaue~y of the rights, powers and privileges necessary for the proper conduct and operation of the concession; the levy of any attachment or execution which substantially interferes with Lessee's operations under this Lease and which attachment or execution is not vacated, dismiss~ stayed or set aside within a period of sixty (60) days; the City reasonably determines that the Lessee is insolvent; Lessee shall be deemed to be insolvent if it has ceased to pay its debts in the ordinary course of business or cannot pay its debts as they become due, whether it has committed an act of bankruptcy or not, .and whether insolvent within the meaning of federal bankruptcy law or not. 21.7 Det~on by the City, the State Fair Employment Commission, or the Federal Equal Emplo~ Oppo~ Commission of discrimimtion having been practiced by Lessee in violation of state md/or federal laws in connec~on with the Lease.. (23) ~ 21.8 Transfer of the majority controlling interest of Lessee to persons other !hah those who are in control at the time of the execution of this Lease, without approval thereof by the City Manager. 21.9 Lessee's material mi~epresentation of fact(s) in its literature, forms and/or affidavits, which were subn~ed in response to the Request For Proposals used in the solicitation process for this Lease. 21.10 Failure to have submitted schematic plan.~ and/or working drawings for tenant impjovements on or before the date(s) designated in thi.q Lease for submi.~sion thereof. 21.11' F~e to have commenced required construction oftenant improvements or any phase thereof on or before the date designated in thi.q Lease for commencement thereof. 21.12 Failure to have completed construction of tenant' improvements on or before the date designated in thk Leasefor completion thereof. 22.0 WAIVER 22.1 Any waiver by City of any breach of any one or more of the covenants, conditions, terms and agreements herein contained shall not be construed to be a waiver of any subsequent or other breach ofthe same or of any other covenant, condition, term or agreement herein contained, nor shall ~ure on the part of City to require exact, full and complete compliance with any of the covenants, conditions, terms or agreements herein contained be construed as in any manner changing the terms ofthi~ Lease or stoPPing City from enforcing the full provisions thereof. 22.2 No delay, failure, or omission of City to re-enter the derni.~ed premi.qes or to exercise any right, power, privilege or option, arising from any default, nor any subsequent acceptance of payments then or thereafter shall impair any such right, power, privilege or option, or be construed as a waiver of or acquies~ce in tach default or as a relinqni.qhmem of any fight. 22.3 No notice to Lessee shall be required to restore or revive "_time ofthe essence" after the waiver by Cily of any default. 22.4 No option, right, power, remedy or privilege of City shall be construed as being exhausted by the exercise thereof in one or more instances. The rights, powers, optiom, privileges and remedies given City by thi~ Lease shall be cum~la_tive. 23.0 RIGHT-OF-ENTRY 23.1 Should Lessee be deemed deficient, as determined bythe City, in its performance of its obligations required hereunder,. City in addition to ail other available remedies may, lint shall not be so obliged,, enter upon the demised premiss, a~ correct Lessee's deficiencies using City forces, and (24) equipmem and material~ on the demi.~ed pr~rni.qes suitable for such purposes,, or by employing a separate private contractor. City's costs so incurred, including direct and indirect overhead costs as determined by the City, shall be reimbursed to City by Lessee and/or its sureties within thirty (30) days of denmnd thereof. 23.2 In the event of an abandonment, vacation or discontinuance of operations for a period five (5) days, exclusive of inclement weather, approval of the City to be closed, or closure of the park by the City, Lessee hereby irrevocably appoints City as an agent for continuing operation of the s~ices granted herein, and in connection therewith authorizes the officers, employees, agents and independent contractors thereof to (1) take possession of the demi.qed premises, including an improvements, equipment and inventory thereon; (2) remove any and an persons or property on said demi.qed prem[qes and place any such property in storage for the account of and at the expense of Lessee; (3) sublease or Iiceme the demised premises; and (4) after payment of an expeme of such subleasing or licensing apply an pa~s realized therefrom to the satisfaction and/or mitigation of an damages arising from Lessee's 'breach of thi.q Lease. Entry by the officers, ex~loyees, agents or independent contractors of City upon the demised premises for the purpose of exercising the authority conferred hereon as agent of LesSee shall be without prejudice to the exercise of any other rights provided h/rein or by law to remedy a breach of this Lease. 24.0 SUR.RENDER 24.1 Upon expiration of the term hereof, or termination thereof as herein provided, Lessee shall peaceably vacate the demised premiss and shall remove an tenant improvements, equipment and LX:rsonal property used in Lessee's operatiom. Notwithstan~g the foregoing, however, on. receipt of written notice from City, delivered at City's option, LeSsee shall instead surrender the demi.~ed premi.~es to City with all tc~ant improvements remaining in tact and shall deliver up the demi.~ed premi.~es and the tenant impr~ ovm~, to the extent that City elects not to have Lessee remove the tenant irnrrr, ovements. Title to the demi~qed premises and the tenant impr~ ovements remain~ vested in City, pursuant to Section 1.6. 24.2 Upon expiration of the term of thi.q Lease, Lessee shaI1 at City's request, execute and deliver to City within ~ (30) days after service of written demand, a good and sufficient quitclaim deed of the Lessee's interest in thi.q Lease and the de~qed premises. Should Lessee fail or refuse to deliver to City a quitclaim deed as aforesaid, a written notice by City reciting the fm~e of the Lessee to execute and deliver the quitclaim deed, shall after ten (10) days from the date of recordation of the notice be conclusive evidence against Lessee and all persons claiming under Lessee of the termination of this Lease. · 25.0' INTERPRETATION... 25.1 This ~ shall be interpreted according to the roles which govern the interpretation of contracts, as pre~ in Title 2, of Part 2, of Division 3, of the California Civil Code, commencing with Section 1635. (25) 25.2 The headings herein contained are for convenience and reference only and are not interkted to define or limit the scope of any provision thereof. 25.3 The following words as used herein shall be construed to have the following meaning, unless otherwise apparent from the context in which they are used: "City_" - The City of Tustin "City Man~er" - City Manager or his designee. "State"- The State of California "Finance Director"- Finance Director of the City of Tustir~ '~Beverage'~ - Any liquid prepared by flavoring heating and/or .admixing in advance of consu ~mption thereof; not including alcoholic beverages as defined in the State Alcoholic Beverage Control Act. "Gross Receipts" - Except as specifically provided by policy statement issued by the City, the term "gross receipts" as used in this Leased is defined to be all money, cash receipts, collected or accrued from the use granted within the demised premi.qes including the rendering or supplying of services and the sale of goods, foods or beverages. 25.3.1 Except as. specific~y provided below or by policy statement issued by the City ..Manager, there shall be no deduction from gross-receipts for any overhead cost or expense of operations, such as, but without limitation to salaries, wages, costs of goods, interest, debt amortization, credit, collection costs, discount from credit card operations, insurance and taxes. 25.3.2 The City, by policy statement consistent with recognized and accepted business and .accounting practices, upon consultation with Lessee, and with the approval ofthe Finance Director and City Attorney, may further interpret the term "gross receipts" as used in this Lease. 25.4 In the event of any conflict in the definition or interpr~tion of any word, respons~/lity, service or schedule between the body of this Lease and the Extn~ attached hereto, the terms ofthe body ofthi.q Lease shall control 26.0 FORCE ~ EXTENSIONS 26.1 Except as otherwise specifi~y provided hereinbefore, mci in the event either party. hereto shall be delayed or prevented from performance of any act required hereunder by reason of fire, earthq~e, war, labor dispute, or other cause without fault and beyond control of the party obligated, performance of such act shall be excused for the periOd of time of the delay as determined by the City Manager. An extension of time for any'such cause shall only be for a period oftlme equivalent to the forced delay. Lessee's inabK~ to obtain financing .qhall not be grounds for an extension of time. City Manager shall prepare and exeo_wte, and Lessee. shall execaxte the appropriate document acknowledging (26) any extension of time granted pursuant to thi.~ section. 27.0 LESSEE'S NON-COMPLIANCE 27.1 If the City determines that there are deficiencies in Lessee's perform~ce of the concession operations authorized and required herein, the City will provide, as specified in Section 20 (Default) herein, a written notice to the Lessee to correct said deficiencies within specified time frames, except for the repair of leaking valves which must be corrected within twenty-four (24) hours following notification 27.2 In the event that .Lessee fails to correct the deficiencies within 'the pres. m]xxt time frames the City may, at its option; (1) use the Security Deposit as provided for herein, (2) exercise its rights under paragraph 23 (Right-of-Entry) herein, and/or (3) terminate thi.q Lease. 28.0 NOTICES Any notice required to be given under the terms of this Lease or any law applicable thereto may be: (1) delivered by personal service; or (2) placed in a sealed envelope, with postage paid, addressed to the person on whom it is to be seawed, return reccqpt requested, and deposited in a post office, ~x, mb-post office, substation or mail chute, or other like fac'~,:y regularly maimained by the United States Postal Service. follows: The address to be used for any notice served by mail upon Lessee .qhall be addressed as LESSEE: TO: Marcia Sanserino 'ITrl'.E: Owner ADDRESS: 20 Kine, on Ilvine, CA 92620 or attemate mailing location as may hereafter be designated in writing to the City by Lessee.' Any notice served by mail-upon City shall be addressed to the City as follows: crrY MANAGER CITY OF TUSTIN 300 CENTENNIAL WAY TUSTIN, CA 92680 PARKS AND RECREATION SERVICES CITY OF TUSTIN 300 CENTENNIAL WAY TUSTIN, CA 92680 Personal suwice shall be deemed complete on delivery and service by mail shall be deemed complete upon receipt as reflected by the retmu receipt. (27) 29.0 ~ SEVERABILITY If any provision ofthk Lease is deterx~ed to be illegal, invalid, or unenforceable by a court of competent jm/sdiction, the rernain~g provisions hereof shall not be affected thereby and shall remain in full force and effect. 30.0 cONTRACT ENFORCEMENT AND AMENDMENTS TO THIS LEASE 30.1 The City Manager .qhall be responsble for the enforcement of this Lease on.behalf of City and shall be assisted therein by those office~ and employees of City having duties in connection with the aclmini,qtration thereof. 30.2 Any offica~ and/or authorized employees of City may enter upon the deml.qed prerni.qes at any and all reasonable _times for the purpose of determining whether or not Lessee is complying with the terms and conditions hereof, or for any other purpose inddental to the rights of City within the demi.ged premiqes. Lessee shall be notified with reasonable notice for the purpose of entry. 30.3 In the event either party commences legal proceedings for the enforcement of thi.~ Lease, the prevailing party shall be entitled to recover its attorney's fees and costs incttrred in the action brought thereon_ 30.4 This document may be modified only by fm-ther wrkten agreement between the parties. Any such modification shall not be effec~e unless and until executed by Lessee and in the case of the City, unless otherwise specifically authorized hereinbefore, until executed by the Mayor of the City. 31.0 ENTIRE AGREEMENT · 31.1 This docttment, and the exh~its attached hereto, constitutes the entire.agreement between the City and Lessee for operations and use granted herein. Ail other agreements, promises and representations with respect thereto, other than contained herein, are expressly revoked. (28) ~ IN WITNESS WHEREOF, the City has by action of City Council authorized this Lease to be executed for and on behalf ofthe City ofTustin bythe Mayor, and the Lessee has caused the same to be executed by its duly authorized officer. CITY OF TUSTIN Dated: ATrEST: Pamela Stoker City Clerk A[PPROVED AS TO FORM: City Attorney "LESSEE" Dated: 'Title: (29) · EXHIBIT A TUSTIN SPORTS PARK SITE o®~?oeO o e. EXHIBIT B CONCESSION BUILDING PLANS WITH DEMARCATION OF DEMISED PREMISES Z. 0 0 0 .D EXHIBIT C CAPITAL IMPROVEMENT PROGRAM CAPITAL IMPROVEMENT PROGRAM The proposed tenant improvements include making the current concession building operable. All of the existing cabinets, lighting, fixtures and plumbing will stay as they exist. Mom's will bring in equipment that is needed for the menu items offered, and will finish off the counters so the3' are workable. The time frame for these improvements will be as short 'as possible m order to open the business as soon as possible. Keeping in mind there are always unforseen delays, an estimated amount of time would be six w~ks in order to get the concession in working order. Business would open as soon as possible after the work is completed. The estimated budget for improvements would be: EQUIPMENT $10,500.00 ~'im~N,t~NT IMPROVEMENTS $8,000.00 TOTAL $18,500.00 EXHIBIT D PROPOSED PRICE LIST AND MENU PROPOSED MENU AND PRICE LI ST Hot Food Homemade BBQ Beef Baked Potato with Chili 1/4 lb. Hamburger with cheese *BBQ on the patio Bowl of Chili Hot Dog Corn Dog 1/4 lb Al! Beef Dog Polish Sausage ~French Bread Pizza Bean and Cheese Burrito S andwi ch for special $4.O0 $3.O0 $3.50 53.50 $4.00 events 53.00 $1.75 $1.5o 52.50 $2.50 $2.25 $1.75 and busy days Cold Food Turkey Sandwich Roast Beef Sandwich Ham Sandwich $3.50 $3,50 53.5o Snacks Nachos Salsa and Chips H~t Pretzel Hot Churro Chips Qookies String Cheese Candy Muffins Croissants $'1.50 Si.oo 5i.25 5i.50 $ .75 S .75 5 ..75 $ .05-.75 Si.25 $i.25 Ice Cream Assorted Novelties Frozen Yogurt $ .75 - 1.25 $1.50 / 2.25 Cold Drinks Pepsi-Cola Diet Pepsi 7-Up Sunkist 'Orange Root Beer Iced Tea Lemonade Sport Drinks Bottled Water Apple Juice Orange Juice $1.00 / $1.50 $1.75 / $1.25 $i.oo 5i.oo $2.50 Hot Drinks Coffee $1.00 Hot Tea $1.00 Hot Chocolate $1.00 Cappuccino $2.50 Espresso $1.50 Cafe Latte $2.25 Cafe Mocha $2.75 Party Packaqe Package includes main~food item, chips, refillable drinks, and ice cream or candy, it also includes the use of tables and chairs which are reserved on the patio for the party. There is a minimum of 10 people. Above items w~n Hot dog $4.25 per person Pizza $4.75 Corn Dog $4.25 Sandwich $5..50 Hamburger $5.50 Seam Snack Card Team snack card can be purchased for 12 snacks (either candy, ice c~eam,, chips or pretzel) and drink. This also includes a free ~rink for the coach! Price- $15.00 (NOTE: this card would be changed to accommodate the size of team in season) FINANCIAL STATEMENT This financial statement and income statement is a balance sheet showing assets, liabilities and sources of income. Because of the confidential nature of specific account numbers and contents, that was withheld until requested at a later time. All assets and credit histories can be verified through reputable banks and financial institutions. The funds to finance 'Mom's Sport Cafe' will not be borrowed, but taken from existing assets. FINANCIAL STA TEll/IENT AND INCOME STA TEMEIVT For Marcia and Gary Sanserino 20 Rincon Irvine, Ca. 92620 &SSETS ~Oash on Hand $ 8,000 U.S. Government Securities $ 10,500 Cash Value- Life Insurance $ 19,500 Stocks and Securities $ 108,500 Real Estate $ 560,000 Automobile $ 9,000 =ersonal property $ 75,000 Other Collectibles (art, coins, etc.) $ 17,000 401 K $ 229,500 TotalAssets $ 1,037,000 LIABILITIES Mortgage $ 332,000 Other Total Liabilities ~ $332,000 Net Worth $ 705,000 SOURCE OF INCOME I Salary , $ 87,000 Dividends and Interest ~ $ 2,000 , Bonus and Commissions $ 83,000 Other ~$ - ' Total Income $ 172,000 CASH FLOW ANALYSIS AND PROFORMA CASH FLOW ANALYSIS I i I 1999! 2000i 20011 2002! 2005' Food and beverage I $ 38,000 I $ 49,400 i $ 64,220 I $ 80,275 I $100,343 Special Events 15 500 i$ 1,000i$ 2,00015 2,500 i$ 3,000 Misc. !$ -!$ -15 -!$ -i$ - TOTAL REVENUE $ 38,500 15 50,400 I$ 66,220 i $ 82,775 i$103,343 COST OF SALES '. .i i i ,i Food,! $. 11,666 I $13,415 j$ 15,428 i $ 17,742 ; $ 20,403 Paper Supplies iS 2,500 !$ 2,750 iS 3,025 !$ 3,327 !$ 3,659 Misc. iS 1,200!$ 1,200i$ 1,200i$ 1,200 !$ 1,200 I TOTAL COSTS iS 15,366 $17,365 iS 19,653 '~$22,269 ;$ 25,262 GROSS PROFIT '~ $ 23,134 i $ 33,035 ] $ 46,567 i $ 60,506 i $ 78;081 EXPENSES ! I ! i ~ ! , Salary Expense I$ 6,000i$ 6,60015 7,260i$ 7,986 I$ 8,784 Empl.yment Develop. I$ 300!$ 33015 363 !$ 398 iS 438 RS . $ 2,000 !$ 2,200{$ 2,420 IS 2,662 {$ 2,928 StateBd. of Equal. i$ 1,200 I$ 1,320,$ 1,452I$ 1,597 I$ 1,756 Equipment I$10,500I. $' 1,000 I$ 500 I$ 500 ! $ 500 Insurance iS 2,000 IS 2,200 I$ 2,420I $ 2,662 iS 2,928 iS 500 Advertising I$ 500 !$ 50015 50015 500 , Stationery I$ 500 I$ 100 I$ 100 15 100. $ 100 Health Department I$ 800 I$ 88015 968I $ 1,064 15 1,170 Maintenance/Tenant improvements !$ 8,000 I$ 1,000 I$ 1,000 i$ 1,000 I $ 1,000 Accounting !$ 900 iS 990i$ 1,000I$ 1,00015 1,100 Telephone/Utilities I$ 1,825 I$ 1,825 I$ 1,825 I$ 1,825 iS 1,825 IRent I$ 2,65015 3,840i$ 5,422 $ 6,756 iS 7,962 Permits iS 350!$ 350!$ 350 $ 350!$ 350 WoW, man's Comp t$ 500 I$ 550 !$ 605 $ 665 I$ 732 Bank Charges iS 350!$ 350!$ 35015 350 I$ 350 Fundraising I$ 3,040 i$ 3,95215 5,13715 6,42215 8,027 Misc. !$ 100 !$ 100I$ 100 i$ 100 15 100 TOTAL EXPENSES !$ 41,515 iS 28,087 I.$ 31,772 I $ 35,937 i $ 40,550 TOTAL OPERATING COSTS I $ 56,881 i $ 45.452 $ 51,425, $ 58,206 1 $ 65,812 ~ET PROFIT i $(18,381)1 $ 4,948 $14,795 !$ 24,569 t $ 37,531 EXHIBIT E CERTIFICATE OF INSURANCE BMR INSURANCE AGENCY September 21,1998 MOM'S SPORTS CAFE 20 Rincon Irvine,-CA. 92620 Insurance Agents and Brokers Lic. # OC17392 Attn: MARSHA INSURANCE PROPOSAL for MOM'S SPORTS CAFE 12850 Robinson Drive Tustin, CA. 92680 We are pleased to offer the following premium quotation: COMPANY: FIRST FINANCIAL INSURANCE CO. (Rated A+ by A.M. Best) PROPERTY INSURED: Contents: $100,000 90% Co-Insurance PERILS' Special Form .VALUATION: Actual Cash Value EXCLUSIONS: Flood, Replacement Cost, Earthquake DEDUCTIBLE: $1,000 per claim COVERAGE: General Aggregate Limit Products-Completed Operations Aggregate Personal and Advertising Injury Limit Each .Occurrence Limit Fire Damage Limit (Any One Fire) Medical Expense $1,000,000 $1,000,000 $1,000,000 $1,000,000 $ 5O,OOO $ 5,OOO "~'.. Member of CAM Insurance Se,q/ices 13732 Newoort Avenue.:.Suit,= BMR BMR INSURANCE AGENCY Insurance Agent~ and Brokers Lic. # OC17392 ADDITIONAL INSURED: (1) Fully Earned Premium of $50.00 EXCLUSIONS: Pollution, Punitive Damages, Asbestos, Lead Based Paint, Employment Related Practices, Assault & Battery, Liquor Liability DEDUCTIBLE: $250.00 Per Claim ( including Loss Adjustment Expense PREMIUM: $2,28O.OO 75.00 Company Fully Earned Policy Fee $2.355.00 Annual Premium CONDITIONS: Must have a dry chemical system installed over cooking area. Please confirm type of system. Replacement Cost is NOT available on Contents WARRANT Central Station Burglar Alarm installed and working. We would need an original signed application along with a'deposit · premium to bind. Total annual premium or financing subject to a finance charge are the payment options available. The coverage descriptions in this proposal are simplified illustrations only and do not alter, extend or restrict the insurance contract described. Await your instructions to proceed further. Sincerely, Georgia Huff Member of CAM Insurance Services 1,q7~2 Newport Avenue. Suite 6. P.O. Bo× 10:~5. Tustin, CA 92781 f714~ 838-1912 · FAX: (714~ 838-7568 XHIBIT B AMENDMENT NO. 1 T LEA E AGREEMENT RE MOM'S SPORTS CAFE This Amendment No. 1 dated for purposes of identification this 1st day of April, 2000, is made and entered into between the City of Tustin, a municipal corporation (hereinafter referred to as "City"), and Marcia Sanserino, doing business as Mom's Sports Caf6 (hereinafter referred to as "Lessee"). RECITALS A. The City entered into a Lease Agreement with Lessee dated January 19, 1999, for portions of the Sports Park located at 12850 Robinson Drive for Lessee to operate a food/beverage concession consistent with public park and recreation purposes (the "Lease Agreement'.'). B. Section 3.1 of the Lease Agreement requires Lessee to pay a minimum monthly rent in the amount of Three Hundred Dollars ($300.00) per month for the first year, Four Hundred Dollars ($400.00) for the second year subject to fair market rent rate adjustments for the third year through the fifth year of the five-year term of the Lease Agreement. C. The business is experiencing difficulties covering its costs and making .inCreased rent payments that threaten its closure, and Lessee desires relief from minimum monthly.rent increases. D. Section 3.2 of the Lease Agreement further requires Lessee to pay the City ten percent (10%) of the gross sales over Three Thousand Dollars ($3000.00) per month generated by the operation of the business that may generate income to the City unless the business seizes to operate. E. The City wishes that the business continue to operate and services consistent with public park and recreation purposes. provide F. Lessee has changed address and 'a new address should be provided for noticing purposes. Now, therefore, in consideration of the mutual covenants, conditions set froth herein, the City and Lessee agree as follows' promises, and AGREEMENT . Amendment to Section 3.1 of the Lease Agreement pertaining to Renl. Effective April 1, 2000, Section 3.1 of the Lease Agreement is hereby amen~ded to read as follows: Lessee shall pay City Three Hundred dollars ($300.00) per month as minimum monthly rent for the term of the Lease Agreement, except during the month of December of each year, when the business will be closed and no rent shall be due. 119192\1 I of 2 Rent. . Effective April 1, 2000, Section 3.2 of the Lease Agreement is hereby deleted and Lessee shall not be required to pay Percentage Rent. 3. · Effective April 1, 2000, the address to be used for any notice as provided in Secti°n 28 of the Lease Agreement served by mail upon Lessee shall be addressed as follows: Marcia Sanserino 22351 Eagle Rock Way Laguna Beach, CA 92651 4. All Other Provisions of the Lease Agreement Remain in Effecl. All provisions of the Lease Agreement not specifically modified herein shall remain in full force and effect. IN. WITNESS WHEREOF, the parties have executed this Amendment No. 1~'io the Lease Agreement as of the dates stated below. ' CiTY OF TUSTIN' Je~~./l'~o~as; May~r Attest: Pamela Stoker City Clerk LESSEE: Marcia .Sanserino Owner Dated: ,5--/5"- Approved as to form: Lois E. Jeffrey City Attorney Dated: 2 of 2