Attachment B
Lease Agreement
14-23
14-24
14-25
, . ..
)
:and appurtenances. "In good condition" means neatand broom-cl~an, and is equivalent to similar phrases referring to physical adequacy in appearance and for use. (i) Hold Harmless - to defend and indemnify from all liability, losses, penalties, Damage, costs, attorney fees, expenses, causes of action, claims, or judgments arising out of or related to any Damage to any Person or property.
U) Law - any judicial decision, statute, constitution, ordinance, resolution, regulation, rule, administrative order, or other requirement of any municipal, county, s_tate, federal, or other government agency or authority having jurisdiction over the Parties or the Premises.
(k) Maintenance or Maintain - repairs, replacement, maintenance, repainting, and cleaning.
(I) Person - one or more natural persons, or legal entities, including, without limitation, partnerships, corporations, trusts, estates, associations, or a combination of natural persons and legal entities.
(m) Premises - those portions of the Pier designated on Exhibit A as the Restaurant and Accessory Area.
(n) Provision - any term, covenant, condition, or clause in this Lease that defines, establishes, or limits the performance required or permitted by either Party. (o) Rent - Base Rent, Percentage Rent, taxes, and other similar charges payable by Tenant under the Provisions of this Lease.
(p) Rent Commencement Date - the Rent Commencement Date (ano the Effective Date) shall be July 1, 2000.
(q) Successor - assignee, transferee, personal representative, heir, or other Person succeeding lawfully, and pursuant to the provisions of this Lease, to the rights or obligations of either Party.
(r) Tenant - RUBY's DINER, INC., a California corporation, and any Successor.
Balboa: Pier Concession Lease - June 20. 2000 3
14-26
)
(s) Termination - the termination of this Lease, for any reason, prior to Expiration ..
1.2 Other Definitions. - The following additional terms are defined in the following sections of this Lease:
(a) ABC §5.7
(b) Gross Sales §4.4
(c) Lease Year §4.2 (e)
(d) Percentage Rent §4.2 (a)
(e) Base Rent §4.1 (a)
(f) Pier Recital A
(g) Restaurant and Accessory Area Recital B
(h) Term §3.1
2. LEASE OF PREMISES
2.1 • Agreement to Lease. City leases the Premises to Tenant and Tenant leases the Premises from City for the Term and on the conditions in this Lease.
2.2 Exclusivity. Tenant shall operate a Restaurant on the Premises. Tenant shall have the exclusive right to serve and sell food and beverages on the Pier.
3. TERM
3.1 Term of Lease. The Term of this Lease shall be fifteen (15) years frOf'!l the Effective Date unless sooner terminated as provided in Section 14.
3.2 Option to Extend. Provided Tenant is not then in material default, Tenant may extend the term of this Lease for two additional successive terms of five (5) years (the "Option Term" or Option Terms) the first commencing on Expiration of the initial Term and the second commencing on Expiration of the first Option Term. Tenant may exercise the Balboa Pier Concession Lease - June 20. 2000 4
14-27
)
option by giving City written notice of its intention to do so at least. three (3} months prior to Expiration of the initial Term or the first Option Term.
3.3 Hold Over. Should Tenant, with City's consent, hold over and continue in possession of the Premises after Expiration of the Term or any Option Term, Tenant's continued occupancy of the Premises shall be considered a month-to-month tenancy subject to all the terms and conditions of this Lease, except the provisions of Subsections
3.1 and 3.2.
4. RENT
4.1 Base Rent.
(a) Base Rent. From and after the Rent Commencement Date, Tenant shall pay Base Rent to City in the sum of Thirty Thousand and no/100 Dollars ($30,000.00) per year during the Term. Base Rent shall be paid in equal monthly installments of Two-Thousand Five Hundred and no/100 Dollars ($2,500.00). Base Rent for each full month shall be due on the first day of that month. Base Rent for any partial month shall be prorated in accordance with the actual number of days in that month and shall be due on the first day of that month that falls within the Term.
(b) Periodic Adjustment. On the eighth (8th), twelfth (12th) and, assuming Tenant's exercise of the options to extend the Term, the sixteenth (16th), and twentieth (20th) anniversaries of the Rent Commencement Date, the Base Rent shall be. increased by the lesser of the cumulative percentage increase in the CPI or three percent (3%) per.year.
The cumulative percentage increase in the CPI shall be determined based on the increases during the period from the Rent Commencement Date or the date of the previous adjustment (whichever is appropriate) to the last date prior to the anniversary on which the CPI was published (typically the CPI for any given month is published approximately sixty (60) days after the end of that month).
Balboa Pier Concession Lease - June 20, 2000 5
14-28
14-29
14-30
14-31
14-32
14-33
14-34
14-35
14-36
14-37
14-38
)
proceeding or contest brought by Tenant unless the provisions of ~ny Law require that the proceeding or contest be brought by or in the name of City or any owner of the Premises.
In that case, City shall join in the proceeding or contest or permit it to be brought in City's name as long as City is not required to bear any cost. If requested by Tenant, City shall execute any instrument or document necessary or advisable in connection with the proceeding or contest. Tenant, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered, together with all rel_ated costs, charges, interest and penalties. Tenant shall Hold Harmless the City and its officers and employees from and against any liability, claim, demand, penalty, cost or expense arising out of or in connection with any contest by Tenant pursuant to this Section.
7. UTILITIES AND REFUSE COLLECTION.
(a) Basic Utilities. Tenant shall make all arrangements for and pay for all utilities furnished to or used on the Premises, including, without limitation, gas, electricity, water, telephone service, cable TV and janitorial service. Tenant shall be entitled to water service under the same terms and conditions as any other occupant of the Pier and shall pay the same fees, rate or rates as any other customer of the City. Any repair to utility lines within the Premises is the sole responsibility of Tenant. Tenant shall be responsible for the servicing and maintenance of the sewage holding tank.
(b) Refuse Col!'ecfion. Tenant shall keep the Premises free and clean of rubbish and litter and shall deposit accumulated rubbish and litter in containers designated by_ City.
Trash containers shall be kept in an approved enclosed area. Tenant shall pay City, in addition to any Rent or other charges, a monthly fee of Two Hundred Dollars ($200) in consideration of which City shall provide refuse collection service seven (7) days per week.
Tenant shall comply with the provisions of the Newport Beach Municipal Code relative to the deposit of material to be collected by City. On the third anniversary of the f3§.n.t Commencement Date and every three years thereafter during the Term or any Option Balboa Pier Concession Lease - June 20, 2000 16
14-39
Term, the monthly refuse fee shall be adjusted. The adjustment i~ the monthly refuse fee shall reflect (i) the percentage increase in the quantity of refuse collected during the preceding twelve (12) month period (for which information regarding the quantity of refuse collected from the Premises is available) when compared to the quantity of refuse collected during the first twelve (12) months of this Lease ("Base Year"); and (ii) the percentage increase in the landfill fees City is required to pay to dispose of the refuse. Any single increase in the monthly refuse fee shall not exceed twenty percent (20%) of the .then current monthly fee. At no time during the term of this Agreement shall the monthly fee exceed $400 per month. City shall provide an adequate amount of containers for Tenant's business operations.
8. AL TE RATIONS TO THE PREMISES.
(a) Alterations Requiring Building Permits. Any alteration that requires a building permit from City shall require the written consent of the City Manager which shall not be unreasonably withheld.
(b) Alterations Costing More than $50,000. Tenant shall not make any Alterations (other than non-structural Alterations costing less than Fifty Thousand Dollars [$50,000.00]) to the Premises without the prior written consent of the City Manager which shall not be unreasonably withheld. In granting or withholding consent to proposed Alterations by Tenant, the City Manager shall consider the impact of the proposed Alte rations on public views and the impact of the proposed Alterations on space available for public use of the Pier for fishing and other activities. The City Manager may require, as a condition of approval, that Tenant agree to amendments to this Lease, including amendments increasing the amount of Rent payable under this Lease if the proposed Alterations would materially increase the floo r area of the structures on the Premises. The City Manager may also require Tenant to provide, at Tenant's expense, appropriate engineering and feasibility studies regarding the Balboa Pier Concession Lease - June 20, 2000 17
14-40
) )
structural integrity of the Pier and .the Premises. City consent~ to Alterations that are in substantial conformity with preliminary plans approved by City and attached as Exhibit C.
(c) Quality of Work Performed. All work shall be performed in a good and workmanlike manner, shall substantially comply with the plans and specifications submitted to City and shall comply with all applicable governmental permits and Laws in force at the time permits are issued.
(d) Payment of Costs. Tenant shall pay all costs related to the construction of any Alterations by Tenant or its agents. Tenant shall keep the Premises free and clear of all mechanics' liens resulting from construction performed at the direction of Tenant. (e) Indemnification. Tenant shall Hold Harmless City and its officers and employees with respect to any Damage or Damages related to any work performed on the Premises by Tenant. City shall promptly provide Tenant with a copy of any claim filed by any third party with respect to work performed by Tenant.
(f) "Disposition of Alterations at Expiration or Lease Termination. Any Alterations made to the Premises shall remain on, and be surrendered with, the Premises on Expiration or Termination of this Lease (excluding Tenant's fixtures, equipment, furniture, movable decorations and the like). However, City may elect not less than thirty (30) days prior to Expiration or Termination of this Lease, to require Tenant to remove any Alterations that Tenant has made to the Premises, except those Alterations existing as of the date of this Lease or approved by City. If City requires removal of Alter~tions, Tenant shall, _at its cost, remove the Alterations and restore the Premises to its condition prior to installation of such Alterations, ordinary wear and tear excepted, before the last day of the Term, or within thirty (30) days after notice is given, whichever is later. Prior to Expiration or within fifteen (15) days after Termination of this Lease, Tenant may remove any movable partitions, machinery, equipment, furniture, and trade fixtures previously installed by Tenant, provided that Tenant repairs any damage to the Premises caused by removal.
Balboa Pier Concession Lease - June 20. 2000 18
14-41
)
9. MAINTENANCE OF PREMISES
9.1 Maintenance and Repair by Tenant and City. Tenant agrees that it will keep the Premises in Good Condition. Tenant's Maintenance responsibilities include washing bird droppings and dirt off the Premises, including roof, windows and exterior walls as needed, but not less than once every ninety (90) days. Graffiti shall be removed or painted over by Tenant as soon as reasonably practicable. City may perform Maintenance_ or repairs in the event Tenant fails to commence required Maintenance or repairs within three (3) business days after receipt of notice to do so. The cost of any Maintenance or repairs by the City pursuant to this Subsection shall be payable as additional Rent. All furnishings, equipment, facilities, improvements, alterations, attachments and appurtenances not provided by City, but required for the Restaurant, including all kitchen equipment and interior furnishings, shall be maintained in Good Condition and repair by Tenant at its cost.
Tenant also agrees to keep the southerly eighty (80) feet of the Balboa Pier, including all benches, free from rubbish, debris and garbage related to the operation of the Restaurant.
The City may perform required cleaning and charge the costs to Tenant if the Tenant fails to perform within five (5) days after notice to do so and continue to Maintain the area as required by this Lease.
9.2 Maintenance and Repair of Pier. City agrees, at its expense, to Maintain the Pier in good repair. City shall repair, Maintain and replace Pier pilings an9 the under structure of the Pier as necessary to ensure structural integrity. City shall have the riQht to resurface the Pier or conduct any other emergency maintenance and/or emergency repair at any time during the initial Term or any Option Term. City shall use its best efforts to schedule any Maintenance, repair or construction on or of the Pier or Premises during the period from November 1 through the end of February (Maintenance Period) when Tenant's Gross Sales are historically lower than the average monthly Gross Sales. City shall also use its best efforts to ensure that construction, repair or Maintenance of or on the Pier or Balboa Pier Concession Lease - June 20. 2000 19
14-42
14-43
14-44
14-45
14-46
14-47
14-48
14-49
14-50
14-51
14-52
14-53
14-54
14-55
14-56
14-57
14-58
14-59
)
default. City shall also be in default if it commences performance within ten (10) days but fails to diligently complete performance. In the event of City's default, Tenant may:
(a) Upon five (5) days notice to City cure any such default by City and City shall reimburse Tenant the amount of all costs and expenses incurred by Tenant in curing the default, together with interest and expenses at the maximum rate then allowed by law; (b) Terminate this Lease if City's default materially interferes with Tenant's use of the Premises for their intended purpose and City fails to cure such default within ten C! 0) days after a second demand by Tenant in which case Tenant shall have no further or continuing obligations; or
(c) Commence an action for specific performance and recover costs and expense, including reasonable attorney fees if Tenant is the prevailing party.
20. NOTICES
Any notice, demand, request, consent, approval or communication that either Party desires or is required to give shall be in writing and shall be deemed given three (3) days after deposit into the United States registered mail, postage prepaid, by registered or certified mail, return receipt requested. Unless notice of a different address has been given in accordance with this Section, all notices shall be addressed as follows:
If to City, to:
If to Ten ant, to:
Balboa Pier Concession Lease - June 20. 2000
CITY OF NEWPORT BEACH
Attention: City Manager
3300 Newport Boulevard
Newport Beach, C,A 92663
RUBY'S DINER, INC.
110 Newport Center Drive, Suite 11 O
Newport Beach, CA 92660
Attention: Douglas Cavanaugh
and Ralph Kosmides
37 14-60
14-61
14-62
14-63
14-64
14-65
14-66
14-67