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HomeMy WebLinkAbout05 LEASE AGREEMENT FOR OPERATION OF FOOD AND BEVERAGE CONCESSION AT TSPDocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 MEETING DATE TO: FROM: SUBJECT: AGENDA REPORT APRIL 5, 2022 MATTHEW S. WEST, CITY MANAGER Agenda Item 5 Reviewed: DS City Manager Finance Director N/A CHAD W. CLANTON, DIRECTOR, PARKS AND RECREATION LEASE AGREEMENT FOR OPERATION OF THE FOOD/BEVERAGE CONCESSION AT TUSTIN SPORTS PARK SUMMARY: Kathy Gallardo and Rob Stait (dba Best of Friends Cafe) terminated their lease for the food and beverage concession at Tustin Sports Park, effective February 1, 2022. Staff is recommending a new Lease Agreement be entered into with Joel Preciado, owner of Fabian Grassini Tennis and Sports Inc., dba Bageled. RECOMMENDATION: Staff recommends that the City Council: 1. Approve a new three (3) year Lease Agreement between Fabian Grassini Tennis and Sports Inc. (dba Bageled) and the City of Tustin for the operation of the food and beverage concession at Tustin Sports Park. FISCAL IMPACT: For the first twelve months of the new Lease Agreement, the terms require the lessee to pay a rent of five hundred dollars ($500) per month, which is the same amount that Best of Friends Cafe has been paying for the past two years. After the first 12 months, the rent will go up to six hundred dollars ($600) per month for the remainder of the Agreement. The only exception is during the month of December of each year when the concession will be closed and no rent shall be due. CORRELATION TO THE STRATEGIC PLAN This recommendation advances Strategy 6 of Goal A in the City of Tustin Strategic Plan regarding Economic and Neighborhood Development by exploring opportunities for expanding recreational activities. BACKGROUND: Best of Friends Cafe began operating the food and beverage concession area at Tustin Sports Park in October 2018 on an assigned lease. When their original three-year term ended in October 2021, they chose to continue on a month-to-month basis. While Best of Friends put considerable time and effort into the concession and were very well received by the community, they were unable to continue their operation due to a variety of challenges (i.e. COVID-19 regulations, supply chain issues, staffing DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 limitations). On January 6, 2022, Best of Friends Cafe informed staff that they would be terminating their lease effective on February 1, 2022. On January 10, 2022, Joel Preciado reached out to staff to inquire about the possibility of taking over the food and beverage concession. Mr. Preciado has been teaching tennis at Tustin Sports Park as a contract instructor with Fabian Grassini Tennis since 2007. In 2017, Mr. Preciado purchased Mr. Grassini's business and assumed the position of head coach for the program. Throughout Mr. Preciado's time providing classes and instruction at Tustin Sports Park, he has built a positive track record and solid rapport with patrons and staff. Mr. Preciado's proposed approach is to operate the concession at Tustin Sports Park under the dba "Bageled", featuring a variety of food and beverage items suitable to park visitors including bagels, coffee, and sandwiches, as well as `grab and go' options. In addition, Mr. Preciado has proposed to incorporate a small retail pro shop area into the space which will provide a variety of athletic equipment suitable to the various sports activities held at the park (i.e. tennis, softball/baseball, soccer). After multiple meetings and a review of his business plan (including projected menu, hours, and staffing), statement of experience, and references, staff has deemed Mr. Preciado capable of operating the concession and is recommending a three (3) year initial term, with the potential for two successive five (5) year extensions. This matter has been reviewed by the City Attorney's office and the Lease Agreement has been approved as to form. Respectfully submitted, DocuSigned by: L(a m a446Vt, —mWt6nton, Director Parks & Recreation Attachment — Tustin Sports Park Cafe Lease Agreement DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 LEASE AGREEMENT THIS LEASE is made and entered into on this day of , 20 , by and between the CITY OF TUSTIN, hereinafter referred to as "CITY" and Fabian Grassini Tennis and Sports Inc., dba Ba eg led, hereinafter referred to as "LESSEE"; RECITALS A. The City is the owner of the 20 -acre Tustin Sports Park site, located at 12850 Robinson Drive, and depicted on Exhibit A attached hereto and incorporated herein by reference. B. 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 C. City desires to lease tenant space at the Tustin Sports Park property for the purpose of operating a food/beverage concession and sporting goods retail; D. City desires to lease portions of the Tustin Sports Park site for such purposes in accordance with the terms and conditions set forth in this Lease. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants, promises, and conditions set forth herein hereinafter 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 and sporting goods retail lease space of approximately one thousand (1,000) square feet for food and beverage concession and sporting goods retail, together with certain structures, buildings, storage, and/or improvements (collectively the "demised premises"). The concession building plans are shown on Exhibit B attached hereto and incorporated herein by reference. The portions of the concession building being leased hereunder as the demised premises are precisely demarcated on Exhibit B. The demised premises (specifically including the structures, buildings, and/or improvements thereon) shall be surrendered to the City upon the termination of this lease. 1.2 The demised premises shall be used only and exclusively for concession operations and sporting goods retail, such other purposes as are related thereto, provided express written approval, therefore, is granted by the Director of Parks & Recreation or his designee, and for no other purpose whatsoever. DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 1.3 Lessee acknowledges personal inspection of the proposed park, as depicted on Exhibit A, concession improvements as depicted on Exhibit 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 agrees to make no demands upon the City for any improvements or alteration. 1.4 Lessee shall construct upon the demised premises the necessary tenant improvements in accordance with the provisions set forth in Section 8 hereinafter. 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 subject to prior approval by the Director of Parks & Recreation, securing applicable permits, and compliance with such terms and conditions as may be imposed 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 the said title. 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, therefore. Such structures, buildings, and/or improvements shall be surrendered to the City with the remainder of the demised premises upon termination of this lease. 1 WIF, 2.1 The term of this lease shall be for a period of three (3) years commencing on the first day of the calendar month after this agreement has been ratified. 2.2 In the event Lessee holds over beyond the term herein provided with the consent express or implied 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 this lease and shall be at the monthly compensation provided herein. 2.3 Lessee may apply for an extension of the term of this Lease for up to two further successive terms of five (5) years each (collectively the option terms); provided that no later than 60 days prior to the expiration date of the respective term, the City receives a written request therefor, signed by Lessee. The City Council shall have exclusive discretion to grant or deny Lessee's application. The City shall have the right to approve or deny the grant of an extension of this lease (and/or) to renegotiate the terms of this lease, including, but not limited to, basic service obligations, minimum concession payments, and required tenant improvements. Lessee's option to extend this lease shall also be conditional on all of the following: DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 1. Lessee is in good faith compliance with terms of this lease; 2. This lease has not been canceled by City prior to the expiration of the term of this lease; 3. Lessee is not in default under this lease; 4. 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 approved to close. 5. Lessee has received satisfactory performance evaluations from City. 3_0 RENT 3.1 Lessee shall pay the City $500 per month for the first 12 months and $600 per month thereafter, as monthly rent for the term of the Lease Agreement, except during December of each year, when the business will be closed, and no rent shall be due. 3.2 Payment shall be payable at the office of the Parks & Recreation Department at 300 Centennial Way, Tustin, 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 15th day of each month following initiation of the term of this Lease. 3.3 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. However, in no event shall any such late charges exceed the maximum amount permitted by law. Any returned checks will be assessed the maximum 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 RECORDS 4.1 All sales shall be recorded by means of cash registers that 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 all cases have locked -in sales totals and transaction counters which are constantly accumulating 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 imprinted. 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 all DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 collections and issue a sequentially pre -numbered customer's receipt in like manner. 4.2 Lessee shall be required to maintain a method of accounting to the satisfaction of the City which correctly and accurately reflects the gross receipts and disbursements related to tenant improvements and maintenance costs of the Lessee in connection with each type of authorized operations (food and beverage concession and sporting goods retail). The method of accounting, including bank accounts established for said operations, shall be separate from 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. Regular books of accounting such as general ledgers. b. Journals including any supporting and underlying documents such as vouchers, checks, tickets, bank statements, etc. C. State and Federal income tax returns and California sales tax returns and checks, and other documents providing payment of sums shown. d. 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 Director of Parks & Recreation deems necessary for proper reporting of receipts. 4.3 All documents, books, and accounting records shall be open for inspection and re- inspection at any reasonable time during the term of this lease and for four (4) years thereafter. In addition, from time to time, the City may 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 connection 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 inspection. 5_0 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 sporting goods retail operations, all in substantial accordance with the Lessee's proposal to the City for the operation of the demised premises. B. Lessee's Staff Lessee shall be responsible for each member of its food and beverage staff to DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 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 operations. Lessee shall comply with all federal, state, and local laws relating to minimum wage, social security, civil rights, ADA, unemployment compensation, and workers' compensation. Lessee shall require all employees to observe all applicable City rules and regulations and exercise courtesy and consideration in their relations with the public. C. Days and Hours of Operation Concession service shall begin operations within 30 days of the commencement date of this Agreement. Operating hours shall be limited to the hours that Tustin Sports Park is open to the public (6:00 am — 10:00 pm). Lessee shall submit a schedule setting forth hours of operation for the business for City's approval. 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 written authorization to deviate from this schedule has been obtained from the Director of Parks & Recreation. The hours of operation would be subject to change to adjust to the community's needs. Special hours would be added to accommodate special tournaments or events. The minimum hours designated at the outset of the lease shall be: Monday through Friday 11:00 am to 6:00 pm Saturday 8:00 am to 4:00 pm Sunday 8:00 am to 1:00 pm D. Food and Beverage Products Lessee shall provide and maintain the necessary food and beverage products required to satisfy the public demand. 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, misbranded, 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. If Lessee's food and beverage products are deemed by the Director of Parks & Recreation to be less than first-class in quality, said officer shall have the right 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 and sporting goods retail business on the Tustin Sports Park site. City has 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 providing alternative food and beverage services. The City will DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 require community groups holding permitted tournaments at the Tustin Sports Park to use the food and beverage services of Lessee or pay a fee to use alternative food and beverage services. 6_0 MAINTENANCE 6.1 Building, Equipment, and Grounds Maintenance A. Lessee shall, at its cost and expense during the term of this lease, keep and maintain the demised premises and all improvements, fixtures, trade fixtures, equipment, and utility systems which may now or hereafter exist thereon, in sound, operable, useable, and sanitary order and repair and in a good, safe and first-class condition throughout the term of this 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 facilities shall have the approval of the City prior to their implementation. B. Should Lessee fail, after ten (10) days notice from City of the need thereof, to perform its obligations required hereunder, the City in addition to all other available remedies may, but shall not be obligated to, exercise its right -of -entry as provided hereinafter in Section 22. 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. C. Regarding the level of maintenance, all work shall be performed in accordance with the highest industry -wide maintenance standards at established frequencies to maintain the aesthetic level and proper condition of the concession facility. D. Regularly scheduled inspections of the demised premises and Lessee's operations authorized herein shall be made by the City. The written report of such inspections shall be recorded, retained for reference, and forwarded to Lessee upon request. E. Regarding emergency services, the Lessee will provide the City with the names and telephone numbers of at least two (2) qualified persons who can be called by City representatives when emergency maintenance conditions occur during hours when the Lessee's normal workforce is not present. The City shall call for such assistance only in a genuine and substantial emergency. F. The Lessee, at its sole cost and expense, shall furnish all necessary equipment, supplies, and material of good quality and in sufficient number to fulfill the requirements of this lease and to accomplish an acceptable and professional level of maintenance. G. City shall be responsible for the maintenance and repair of the exterior of all concession structures, except to the extent that the City finds that Lessee is responsible for damage to the exterior of a concession structure. In that case, City shall have the option of either requiring Lessee to repair the damage, or repairing the damage itself, at Lessee's expense. DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 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 county ordinances, and all state and federal laws and regulations, insofar as the same or any of them are applicable; and where permits and/or licenses are required for the food and beverage operation hereunder and/or any construction authorized herein, the same must be first obtained from 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 Council, and the Director of Parks & Recreation 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 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 Signs Lessee shall not post signs upon the demised premises or improvements therein unless prior written approval, therefore, is obtained from the Parks & Recreation Director. Compliance with the City's sign ordinance provisions shall be the responsibility of the Lessee. This approval shall not be unreasonably withheld. 7.6 Lessee's Staff and 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 assignment 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 circumstances to assure the City that the conduct and activities of DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 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/retail facility, which clearly indicates to patrons the name of the person(s) on duty. The identification system shall be furnished at the Lessee's expense and may include appropriate attire, name badges, and/or nameplates as specified by the City. B. Lessee warrants that it fully complies with 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 and regulations. Lessee shall obtain, from all covered employees performing services hereunder, all verification and other documentation of employment eligibility status required by federal and state statutes and regulations as they currently exist and as they may be hereafter amended. Lessee shall retain such documentation for all covered employees for the period prescribed by law. Lessee shall indemnify, defend, and hold harmless the City, its officers, and employees from employer sanctions and any other liability which may be assessed against Lessee or City or both in connection with any alleged violation of federal and/or state statutes or regulations pertaining to the eligibility for employment of persons performing services under this lease. 7.7 Utilities A. Lessee shall make all arrangements for and pay for all applicable utilities furnished to or used on the demised premises, including without limitation: gas, electricity, water, refuse removal, telephone service, Cable TV, etc. In addition, upon expiration or earlier termination of any preexisting 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 claims against City for compensation for loss or damage caused by a defect, deficiency or impairment of any utility system, water system, water supply system, drainage, system, waste system, heating or gas system, electrical apparatus, or wires serving the demised premises. The City shall warrant all underground or "hidden" plumbing, 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. The City shall charge Lessee monthly for rubbish removal, at rates no greater than the standard rate charged by other commercial users for City rubbish removal services. No offensive matter or refuse or substance constituting an unnecessary, unreasonable, or unlawful fire hazard or material detrimental to the public health shall be permitted to remain on the demised premises, and Lessee shall prevent any accumulation thereof from occurring. DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 7.9 Security Devices Lessee may provide any legal devices, mechanisms, or equipment designed for the purpose of protecting the demised premises from theft, burglary, or vandalism, provided written approval for installation thereof is first obtained from the City. All purchases and installation thereof shall be at Lessee's expense. During the last 30 days preceding the termination of this Lease, Lessee shall remove same from the demised premises, except for those items of personalty which have been furnished by City or have been so affixed 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 maintain a complete list or schedule of the prices charged for all goods and services, or combinations thereof, supplied to the public on or from the demised premises. Said prices shall be fair and reasonable based upon the following considerations: that said the operation is intended to serve the needs of the public for the goods and/or services supplied at a fair and reasonable cost; comparability with prices charged for similar goods and/or services supplied in the Orange County area; and reasonableness of profit margin in view of the cost of providing same in compliance with the obligations assumed in this lease. If 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 consultation thereon, Lessee shall make such price adjustments as the City may have ordered. Lessee may appeal the determination 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 Council. 7.11 Safety Lessee shall immediately correct any unsafe condition of the demised premises, 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 occurring 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 Director of Parks & Recreation. 7.12 Quality of Goods and Services Services to the public, with goods and merchandise of the best quality and at reasonable charges, are of prime concern to City and are considered a part of the consideration for this lease. Therefore, Lessee agrees to operate and manage the facilities in a first-class manner during the entire term of this lease 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 those prevailing in such areas for similar products and services, and without discrimination. Following receipt of written notification, Lessee shall immediately withdraw or remove from sale any goods or services that may be found objectionable to the City based on findings that such goods or services are harmful to public DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 welfare. 7.13 Reporting The Lessee or his representative shall meet with the Director of Parks & Recreation or his representative at such other times as may be required by the City to review Lessee's performance under this lease and discuss any problems or matters as determined by the City. 7.14 Trade Fixtures Lessee shall provide and install all appliances, furniture, fixtures, equipment, door locks, padlocks, or personal property required to operate the demised premises at its own expense. During the last 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 30 days period, Lessee shall lose the 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 for any cost, as determined by the Director of Parks & Recreation, incurred in excess of any consideration received from such sale, removal, or demolition. 7.15 Habitation The demised premises shall not be used for human habitation. 7.16 Nuisances and Annoyances Lessee shall not use or permit the use of the demised premises in any manner which creates 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 REQUIRED TENANT IMPROVEMENT PROGRAM 8.1 At any time during the original term or renewable period of this Agreement, and upon the request of the City, a tenant improvement program shall be prepared by Lessee and approved by the City, which shall indicate the description of the tenant improvements proposed by Lessee in order to operate said concession, the estimated improvement costs, and the projected time DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 frame for commencement and completion of the tenant improvement project. It is understood that the construction and/or improvements 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 Director of Parks & Recreation. In no event shall the phasing of the construction required herein extend the completion thereof beyond the date heretofore provided, subject to Section 8.4. 8.2 City and Lessee may agree from time to time that various additional tenant improvement(s) mutually agreed upon shall be completed as necessary to improve and/or ensure the usability of the demised premises. 8.3 Before the commencement of construction, Lessee shall obtain the City's written approval of all plans, specifications, and construction cost estimates by Lessee for the tenant improvements to be constructed upon the demised premises. No modification of said plans, specifications, or tenant improvements, shall be made by Lessee without approval thereof by the City. Lessee agrees that City may have on the site during the construction improvement period an inspector who shall have the right of access to the demised premises 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 fault 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 construct, perform, complete and maintain all construction and installations covered by this lease in a good and workmanlike manner and with high-quality materials, and shall furnish all tools, equipment, labor, and material necessary to perform and complete same. Upon completion of the tenant improvements, Lessee shall provide the City with one (1) complete set of as -built construction drawings (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 manuals for building equipment and systems, and copies of all written warranties. Upon termination of this lease, whether by expiration of term or cancellation, Lessee shall assign to City all express warranties furnished by other persons in connection with the provision of labor and/or material to the works of improvement covered by this lease. Upon review by and consultation with City's Director of Finance 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 9.1 The city 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 if no objection is made within 15 business days following the request for approval. Such materials include, but are not limited to: advertising in newspapers, magazines and trade journals, and radio and/or television commercials. Lessee may, at its own expense, place such signs in or upon the demised premises as it may deem necessary subject to compliance with Section 9400 et seq. of the Tustin City Code and DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 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 demised premises shall remain the property of the Lessee and shall be removed by Lessee upon termination or expiration of this lease at Lessee's expense. Any damage caused by such removal shall be repaired at Lessee's expense. 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 improvements, 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's Key Rating of at least A VII. The condition 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 improvements and receive a certificate of occupancy for the building, then surety shall no longer be bound thereon. Said bond shall be maintained in full force and effect by Lessee until said tenant improvements have been accepted by the City. 10.2 The City Attorney may accept in lieu of the bonds heretofore described, the performance and payment bonds of corporations duly authorized to issue surety bonds by the State, naming as principal a licensed contractor employed by Lessee to construct works of improvement on the demised premises provided each bond otherwise conforms to the requirements set forth in 10.1 and names City as an additional obligee. 10.3 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 securities shall be deemed deposited with City to secure full and satisfactory performance of the principal obligations heretofore described for which surety is required, and shall be released upon the satisfactory performance thereof, as evidenced by Notice of Completion by the Director of Parks & Recreation and unconditional release of mechanic'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 Certificates of Deposit are delivered to the Director of Parks & Recreation. Lessee shall be entitled to all interest on the deposit and the return of the Certificate of Deposit upon satisfactory performance as heretofore defined. 11.0 DESTRUCTION OF DEMISED PREMISES 11.1 If 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. The City shall make the loss adjustment with the insurance company insuring the loss and receiving payment of the insurance proceeds. Suppose the destruction is from a risk for DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 which insurance coverage is not required or provided under a said insurance policy. In that case, 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 construction progresses for payment of the costs of restoration upon satisfactory performance of the work required, as evidenced by certification of completion by the Director of Parks & Recreation and release of mechanic's liens by all persons furnishing labor and materials thereon. Suppose the insurance proceeds are insufficient to pay the actual costs of restoration. In that case, Lessee shall deposit the amount of the deficiency with the City upon demand, therefore by the Director of Parks & Recreation. The said sums shall be held for payment of said costs and disbursed in the manner heretofore provided. Any undistributed funds shall be retained by City and credited to the rental reserved over the remaining term of this lease. If Lessee elects to restore the demised premises, plans, specifications, and construction cost estimates for the restoration thereof shall be prepared by Lessee and forwarded 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 insurance proceeds by the 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 insurance, workers' compensation insurance, and standard fire, and extended coverage insurance, 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 therefore by governmental agencies having jurisdiction thereover, and posting of the construction site by City with notice of no responsibility, and shall be diligently prosecuted to completion. All work shall be performed according to the approved plans and specifications unless changes therein are approved in advance 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 the demised premises and the work occurring thereon. At the commencement of the construction work, Lessee shall notify City in writing of the identity, place of business, and telephone number of the responsible person(s) in charge of the construction to be occurring thereon. All construction shall be performed in a good and workmanlike manner. Upon completion of the restoration, Lessee shall immediately record a Notice of Completion with the Registrar -Recorder. 11.2 If the demised premises are restored, this Lease shall continue in full force and effect, except that if Lessee files a claim therefore 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 determine the damage and/or restoration interferes with the concession operation, provided any such claim shall be denied if the destruction of the demised premises is found by the City to have been caused 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 premises by vacating the same and removing therefrom all inventory items, trade fixtures, equipment, and furnishings for such periods as are required for the restoration thereof. DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 11.4 The provisions above for abatement and/or other relief shall also be applicable to 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 destruction of the demised premises and hereby waives any and all additional rights and remedies for relief or compensation that are presently available or may hereafter be made available under the laws and statutes of this State. 12.0 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 with the City within one 100 days of the commencement of construction. Lessee agrees that Section 12 shall not apply to improvements constructed pursuant to the tenant 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 furnishings for such periods as are required by the construction of the new facilities. Lessee further agrees to cooperate 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 within 30 days of written notice from the Director of Parks & Recreation that the demised premises are now available for occupancy. 12.4 The provisions above of this section shall also be applicable in the event of performance 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 CONTRACTOR DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 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 this lease are employees solely of Lessee and not of City for Workers' Compensation and liability. 13.3 Lessee shall bear the sole responsibility and liability 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 agrees explicitly to inform its employees that Lessee is an independent contractor to the City. 13.5 Lessee understands and agrees explicitly to inform its employees that they are not agents or employees of the City. 14.0 HOLD HARMLESS AND INDEMNIFICATION 14.1 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 the construction of the work or by or in consequence of any negligence regarding the work, the use of improper materials or equipment in construction of the work, the neglect or refusal of the Lessee to faithfully perform the work and all of the Lessee's obligations under this 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 parry 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. 14.2 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 concerning 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. The city shall have the right to select legal counsel of its choice in connection with such defense. 15. INSURANCE 15.1 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 its operations hereunder. Such insurance shall be provided by the insurer(s) licensed to do DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 business in, and in good standing in, the State of California, with a Best's Key Rating of at least A VII. Evidence of such programs satisfactory to the City shall be delivered to the City on or before the effective date of this lease. Endorsements shall provide that (a) City is to be given written notice at least 30 days in advance of any modification or termination of any program of insurance; (b) Such insurance, with 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, its officers, and employees as additional insureds. A. During the term of this lease, following completion of construction of tenant improvements, Lessee shall provide and maintain the following forms and amounts 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 MILLION DOLLARS ($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 period of not less than five years following termination of this Lease. 2. Worker's Compensation: A policy of Workers' Compensation insurance in an amount and form to meet all applicable requirements of the Labor Code of the State of California, and Employers' Liability Insurance 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. Such worker's compensation insurance shall be endorsed to provide a waiver of subrogation against the City. 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 following forms and amounts of insurance: 1. Builder's All -Risk Insurance: Including flood coverage, covering the entire work against loss or damage until completion and acceptance by the City. Insurance shall be in an amount for the replacement value of the improvements and endorsed for broad form property damage, breach of warranty, explosion, collapse, and underground hazards. Deductibles not 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 $300,000 per occurrence. 3. Workers' Compensation: A policy of Workers' Compensation insurance in an amount and form to meet all applicable requirements of the Labor Code of the State of California, and Employer's Liability Insurance 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. Such DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 worker's compensation insurance shall be endorsed to provide a waiver of subrogation against the City. 15.2 Failure on the part of Lessee to procure or maintain required insurance shall constitute a material breach of contract upon which City may immediately terminate this lease. 15.3 Conduct of Lessee's operations shall not commence until Lessee has complied with the aforementioned insurance requirements. Upon execution of this Agreement, Lessee shall provide the City, and to the satisfaction of City, certificates of insurance and endorsements evidencing the satisfaction of the requirements of this section. 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. 15.4 The specified amount of liability insurance required herein may be subject to renegotiation on an annual basis. Should either parry request renegotiation with respect to the amount of liability insurance to be provided, the determination thereof shall be established through mutual negotiations between the parties. The lessee shall continue to provide insurance in the manner heretofore provided, pending final renegotiation. 15.5 No cancellation provision in any insurance policy shall be construed in derogation of the continuous duty of Lessee to furnish insurance during the term of this Lease. At least 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. 16.0 TAXES AND ASSESSMENTS 16.1 Lessee shall also pay all taxes, assessments, fees, and charges on goods, merchandise, fixtures, appliances, and equipment owned or used therein. 17.0 ASSIGNMENT, SUBLETTING, AND ENCUMBERING 17.1 Prohibition of Assignment. 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 voluntarily assign or encumber its interest in this lease or the demised premises, or sublease substantially all or any part of the demised premises, or allow any other person or entity (except Lessee's Authorized Representatives) to occupy or use all or any part of the demised premises without the prior written consent of City, which consent shall not be unreasonably withheld. Lessee shall not, without the prior 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 license without the consent of the City shall render this lease null and void. 17.2 Each and all of the provisions, agreements, terms, covenants, and conditions herein DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 contained to be performed by Lessee shall be binding upon any transferee thereof. 17.3 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 against Lessee or in voluntary or involuntary proceedings in bankruptcy or insolvency or receivership taken by or against Lessee, or by any process of law including proceedings under all applicable federal bankruptcy laws. 17.4 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, assignment, 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 lacks experience and/or financial ability 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 19.8 hereof. 17.5 The prohibition herein contained shall not be applicable with respect to transfers of this lease arising from the exercise of a power of sale or judicial foreclosure pursuant to the terms and conditions of hypothecation or mortgage previously approved by the City. 17.6 In reference to Section 18.5 hereinbefore, the City's consent with regard to successive transfers of this lease arising from the exercise of a power of sale or judicial foreclosure or the assignment 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 withheld. 17.7 In the event Lessee shall request the prior written consent of City to give, assign, transfer, or grant control of this lease and subsequently City gives written consent to the assignment, a transfer 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 30 days after said consent is given or prior to the close of any escrow, whichever occurs first. 18.0 NON-DISCRIMINATION AND CIVIL RIGHTS COMPLIANCE 18.1 Lessee hereby certifies and agrees that, in all matters affecting this lease, it will comply with all applicable federal and state laws and regulations prohibiting discrimination. 18.2 Lessee certifies and agrees that all persons employed thereby, are and shall be treated equally without regard to or because of race, creed, color, national origin, political affiliation, marital status, sex, age, or handicap and in compliance with all federal and state laws prohibiting discrimination in employment, including but not limited to, the Federal Civil Rights Act of 1964; the Unruh Civil Rights Act; and Cartwright Act; the State Fair Employment Practices Act, and Americans with Disabilities Act. DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 18.3 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 origin, political affiliation, marital status, sex, age, or handicap. 18.4 All employment records shall be open for inspection and reinspection at any reasonable time during the term of this lease to verify the practice of non-discrimination by Lessee in the areas heretofore described. 18.5 If City finds that any of the above provisions have been violated, the same shall constitute a material breach of contract. The City may determine to cancel, terminate, or suspend this lease. While City reserves the right to determine independently that the non-discrimination provisions of this lease have been violated, in addition, a determination by the California Fair Employment and Housing Department or the Federal Equal Employment Opportunity Commission that Lessee has violated State or Federal non-discrimination laws or regulations shall constitute a finding by City that Lessee has violated the non-discrimination provisions of this lease. 18.6 Lessee shall include the non-discrimination and compliance provisions in all subcontracts to perform work under the contract. 19.0 EVENTS OF DEFAULT 19.1 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 the approval to be closed. If the City closes the park, it is deemed to be approved to close. 19.2 The failure 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. 19.3 The failure of Lessee to operate in the manner required by this lease, where such failure continues for more than 30 days after written notice from the City to correct the condition therein specified. 19.4 The failure to maintain the demised premises and the improvements 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 30 days after written notice from the City for correction thereof, provided that where the fulfillment of such obligation requires activity over a period of time and Lessee shall have immediately, 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. 19.5 The failure of Lessee to keep, perform, and observe any other promises, covenants, conditions, and agreements outlined in this Lease, where such failure continues for more than 30 days after written notice from the City for correction thereof, provided that where the fulfillment of DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 such obligation requires activity over a period of time and Lessee shall have commenced performing whatever may be required to cure the particular 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. 19.6 The filing of a voluntary petition in bankruptcy by Lessee; the adjudication of Lessee as a bankrupt; the appointment of any receiver or trustee of Lessee's assets; the making of a general assignment for the benefit of creditors; a petition or answer seeking an arrangement for the reorganization of Lessee under any federal reorganization act, including petitions or answers under federal laws; the occurrence of any action which operates to deprive Lessee permanently 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, dismissed, stayed or set aside within a period of 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. 19.7 Determination by the City, the State Fair Employment Commission, or the Federal Equal Employment Opportunity Commission of discrimination having been practiced by Lessee in violation of state and/or federal laws in connection with the lease. 19.8 Transfer of the majority controlling interest of Lessee to persons other than those in control at the time of the execution of this lease, without approval thereof by the City. 19.9 Failure to have submitted schematic plans and/or working drawings for tenant improvements on or before the date(s) designated in this lease for submission thereof. 19.10 Failure to have commenced required construction of tenant improvements or any phase thereof on or before the date designated in this Lease for commencement thereof. 19.11 Failure to have completed construction of tenant improvements on or before the date designated in this lease for completion thereof. 20.0 TERMINATION OF AGREEMENT 20.1 Failure by Lessee to cure any default identified by the City, within the timeframe allotted the Lessee to cure, either by contract or mutual agreement of the Parties, may result in termination of this agreement. As a condition precedent, the Director of Parks & Recreation shall give Lessee ten (10) days notice by registered or certified mail of the date set for termination hereof and the grounds thereof. 20.2 Upon termination, City shall have the right to take possession of the demised premises, including all improvements, equipment, and inventory located thereon, and use same to satisfy and/or mitigate all damages arising from a breach of this lease. DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 20.3 Action by City to effectuate a termination and forfeiture of possession shall be without prejudice to the exercise of any other rights provided herein or by law to remedy a breach of this lease. 21.0 WAIVER 21.1 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 of the same or of any other covenant, condition, term, or agreement herein contained, nor shall failure 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 of this lease or stopping City from enforcing the full provisions thereof 21.2 No delay, failure, or omission of City to re-enter the demised premises 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 acquiescence in such default or as a relinquishment of any right. 21.3 No notice to Lessee shall be required to restore or revive "time of the essence" after the waiver by City of any default. 21.4 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, options, privileges, and remedies given City by this lease shall be cumulative. 22.0 RIGHT -OF -ENTRY 22.1 Should Lessee be deemed deficient, as determined by the City, in its performance of its obligations required hereunder, City in addition to all other available remedies may, but shall not be so obliged, enter upon the demised premises and correct Lessee's deficiencies using City forces, and equipment and materials on the demised premises suitable for such purposes, or by employing a separate private contractor. The city's costs incurred, including direct and indirect overhead costs as determined by the City, shall be reimbursed to the City by Lessee and/or its sureties within 30 days of demand. 22.2 In the event of abandonment, vacation, or discontinuance of operations for a period of 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 the continuing operation of the services granted herein, and in connection in addition to that authorizes the officers, employees, agents, and independent contractors thereof to (1) take possession of the demised premises, including all improvements, equipment, and inventory thereon; (2) remove any, and all persons or property on said demised premises and place any such property in storage for the account of and at the expense of Lessee; (3) sublease or license the demised premises; and (4) after payment of all expense of such subleasing or licensing apply all payments realized therefrom to the DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 satisfaction and/or mitigation of all damages arising from Lessee's breach of this lease. Entry by the officers, employees, agents, or independent contractors of City upon the demised premises for the purpose of exercising the authority conferred hereon as an agent of Lessee shall be without prejudice to the exercise of any other rights provided herein or by law to remedy a breach of this Lease. PAX - Illi:IaM079I:7 23.1 Upon expiration of the term hereof, or termination thereof as herein provided, Lessee shall peaceably vacate the demised premises and remove all tenant improvements, equipment, and personal property used in Lessee's operations. Notwithstanding the foregoing, however, on receipt of written notice from City, delivered at City's option, Lessee shall instead surrender the demised premises to City with all tenant improvements remaining intact and shall deliver up the demised premises and the tenant improvements, to the extent that City elects not to have Lessee remove the tenant improvements. Title to the demised premises and the tenant improvements remains vested in City, pursuant to Section 1.6. 23.2 Upon expiration of the lease term, Lessee shall, at City's request, execute, and deliver to City within 30 days after service of a written demand, a good and sufficient quitclaim deed of the Lessee's interest in this lease and the demised premises. Should Lessee fail or refuse to deliver to City a quitclaim deed as aforesaid, a written notice by City reciting the failure 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. 24.0 INTERPRETATION 24.1 This lease shall be interpreted according to the rules which govern the interpretation of contracts, as prescribed in Title 2, of Part 2, of Division 3, of the California Civil Code, commencing with Section 1635. 24.2 The headings herein contained are for convenience and reference only and are not intended to define or limit the scope of any provision thereof. 24.3 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 "Director of Parks & Recreation" — Director of Parks and Recreation or his designee. "State" - The State of California "Director of Finance" - Finance Director of the City of Tustin. DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 "Beverage" - Any liquid prepared by flavoring, heating, and/or admixing in advance of consumption thereof, not including alcoholic beverages as defined in the State Alcoholic Beverage Control Act. "Gross Receipts" - Except as specifically provided by the policy statement issued by the City, the term "gross receipts" as used in this lease, is defined to be all money and cash receipts, collected or accrued, from the use granted within the demised premises including the rendering or supplying of services and the sale of goods, foods, or beverages. 24.3.1 Except as specifically 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. 24.3.2 The City, by policy statement consistent with recognized and accepted business and accounting practices, upon consultation with Lessee, and with the approval of the Director of Finance and Director of Parks and Recreation, may further interpret the term "gross receipts" as used in this lease. 24.4 In the event of any conflict in the definition or interpretation of any word, responsibility, service, or schedule between the body of this lease and the exhibits attached hereto, the terms of the body of this lease shall control. 25.0 FORCE MAJEURE/TIME EXTENSIONS 25.1 Except as otherwise specifically provided hereinbefore, and in the event either parry hereto shall be delayed or prevented from the performance of any act required hereunder by reason of fire, earthquake, war, labor dispute, or other cause without fault and beyond the control of the party obligated, the 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 of time equivalent to the forced delay. Lessee's inability to obtain financing shall not be grounds for an extension of time. City Manager shall prepare and execute, and Lessee shall execute the appropriate document acknowledging any extension of time granted pursuant to this section. 26.0 LESSEE'S NON-COMPLIANCE 26.1 If the City determines that there are deficiencies in Lessee's performance of the concession operations authorized and required herein, the City will provide, as specified in Section 19 (Events of 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 24 hours following notification. 26.2 If Lessee fails to correct the deficiencies within the prescribed time frames, the City DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 may, at its option; (1) use the Security Deposit as provided for herein, (2) exercise its rights under Section 22 (Right -of -Entry) herein, and/or (3) terminate this lease. 27.0 NOTICES 27.1 Any notice required to be given under the terms of this lease or any law applicable to it 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 served, return receipt requested and deposited in a post office, mailbox, sub -post office, substation or mail chute, or other like facility regularly maintained by the United States Postal Service. as follows: LESSEE: The address to be used for any notice served by mail upon Lessee shall be addressed Joel Preciado Fabian Grassini Tennis and Sports Inc. 2931 El Camino Real, #408 Tustin, CA 92782 or alternate 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: Director, Parks and Recreation Department City of Tustin 300 Centennial Way Tustin, CA 92780 Personal service shall be deemed complete on delivery, and service by mail shall be deemed complete upon receipt as reflected by the return receipt. 28.0 SEVERABILITY 28.1 If any provision of this Lease is determined to be illegal, invalid, or unenforceable by a court of competent jurisdiction, the remaining provisions hereof shall not be affected thereby and shall remain in full force and effect. 29.0 CONTRACT ENFORCEMENT AND AMENDMENTS TO THIS LEASE 29.1 The Director of Parks & Recreation shall be responsible for the enforcement of this Lease on behalf of the City and shall be assisted therein by those officers and employees of the City having duties in connection with the administration thereof. DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 29.2 Any officers and/or authorized employees of City may enter upon the demised premises 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 incidental to the rights of City within the demised premises. Lessee shall be notified with reasonable notice for entry. 29.3 In the event either parry commences legal proceedings for the enforcement of this lease, the prevailing party shall be entitled to recover its attorney's fees and costs incurred in the action brought thereon. 29.4 This document may be modified only by further written agreement between the parties. Any such modification shall not be effective 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. 30.0 ENTIRE AGREEMENT 30.1 This document and the exhibits attached hereto constitute the entire agreement between the City and Lessee for operations and use granted herein. All other agreements, promises, and representations with respect thereto, other than contained herein, are expressly revoked. DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 IN WITNESS WHEREOF, the City has, by the action of City Council, authorized this Lease to be executed for and on behalf of the City of Tustin by the Mayor, and the Lessee has caused the same to be executed by its duly authorized officer. Dated: ATTEST: Erica N. Yasuda City Clerk APPROVED AS TO FORM: David Kendig City Attorney Dated: "CITY" CITY OF TUSTIN Mayor "LESSEE" Lolm Name: Title: DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 EXHIBIT A TUSTIN SPORTS PARK SITE DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 EXHIBIT B CONCESSION/RETAIL BUILDING PLANS WITH DEMARCATION OF DEMISED PREMISES DocuSign Envelope ID: E79FCF1F-AF68-4563-80A5-1A743A3ADD90 G F2 (RF Z I Oft) FT -2 TF 9, \-rw E,