CONCESSION AGREEMENT
by and between
CITY OF SAN CLEMENTE
(“CITY”)
and
HOOK AND COOK SC, LLC
(“CONCESSIONAIRE”)
May 14, 2026
CONCESSION AGREEMENT
FOR
END OF SAN CLEMENTE PIER CONCESSION
This Agreement (the “Agreement”) is made and entered into this _____ day of ________, 2026, by and between the City of San Clemente, a municipal corporation, organized under the laws of the State of California, with its principal place of business at 910 Calle Negocio, San Clemente, California, 92673 ("City") and Hook and Cook SC, LLC, a California Limited Liability Company, with its principal place of business at 131 Esplanade San Clemente, CA 92672 ("Concessionaire"). City and Concessionaire are sometimes individually referred to herein as "Party" and collectively as "Parties."
R E C I T A L S
WHEREAS, City is the owner and operator of that certain real property located in the City of San Clemente, California, described as the Bait & Tackle Shop located on the City’s Municipal Pier (the “City’s Property”); and WHEREAS, City desires to enter into an Agreement with Concessionaire for the use of that portion of the City’s Property referred to herein as the Premises (as defined below), and Concessionaire desires to use the Premises, all subject to the terms and conditions set forth herein; and WHEREAS, the City desires to grant a limited right to operate a concession for bait, tackle, food, and non-alcoholic beverage services on the Premises; and WHEREAS, Concessionaire desires to operate such concession under the terms and conditions set forth herein.
NOW, THEREFORE, IT IS MUTUALLY AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:
C O V E N A N T S:
In consideration of the foregoing Recitals, which are incorporated into this Agreement by this reference, and the mutual covenants and conditions contained herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by both City and Concessionaire, the Parties agree as follows:
SUMMARY OF FUNDAMENTAL AGREEMENT TERMS
Subject to the more complete statement of certain terms and conditions elsewhere in this Agreement (which more complete description shall prevail to the extent of any inconsistency or conflict with the provisions set forth in this Article I), the fundamental business terms of this Agreement are summarized herein below:
Nature of Agreement: This Agreement grants Concessionaire a limited, revocable license to operate a concession within the Premises for the benefit of the public. This Agreement does not create or convey any possessory interest, tenancy, or other real property interest. Concessionaire acknowledges that its rights under this Agreement are subject to the continuing control, oversight, and discretion of the City.
City: City of San Clemente, a municipal corporation, and any successor to or assignee of City’s fee ownership of the real property within which the Premises are located.
Concessionaire: Hook and Cook SC, LLC, a California Limited Liability Company, and any permitted assignee or transferee of interest in the Premises approved by City in accordance with this Agreement, as set forth in Article X.
Premises: The Premises consist of the bait and tackle concession building located on the San Clemente Municipal Pier and certain immediately surrounding areas on the Pier as set forth in Exhibit A hereto, which is fully incorporated herein by this reference.
Initial Term: An “Initial Term” of four (4) years, as more particularly set forth in Article III.
Extension Term: This Agreement may be extended for one (1) additional period of two (2) years (the “Extended Term”), subject to the mutual written agreement of both City and Concessionaire. Any such extension shall be subject to satisfactory performance by Concessionaire, as determined in the sole and absolute discretion of the City Manager, including compliance with all material terms of this Agreement, as determined by the City, and shall be on the terms and conditions set forth in this Agreement, including the adjusted compensation structure applicable to the Extended Term.
Rent: For the Initial Term, Concessionaire shall pay to the City, on a monthly basis, compensation equal to the greater of a fixed base rent or a percentage of Gross Sales, as defined herein. The Base Rent shall be in the amount of One Thousand Two Hundred Dollars ($1,200.00) per month and shall increase by Fifty Dollars ($50.00) per month annually in Years 2, 3, and 4. Accordingly, Base Rent shall be $1,200.00 per month in Year 1, $1,250.00 per month in Year 2, $1,300.00 per month in Year 3, and $1,350.00 per month in Year 4. Percentage Rent shall be three percent (3%) of Gross Sales during Years 1, 2, and 3. Beginning in Year 4, the Percentage Rent rate shall increase to five percent (5%). If the Parties mutually agree to extend this Agreement for an Extended Term, Percentage Rent shall be seven percent (7%) during each year of the Extended Term. Concessionaire shall pay the greater of the applicable Base Rent or the applicable percentage of Gross Sales (as that term is defined in Article IV); During any approved Extension Term, the Base Rent shall be adjusted to One Thousand Four Hundred Dollars ($1,400.00). Rent to be “triple net” to the City. (See Articles V, VII, and IX.) Security Deposit: A security deposit of One Thousand Two Hundred Dollars ($1,200.00) shall be maintained by the City in accordance with Article XV.
Permitted Uses: Concessionaire shall use the Premises solely for the operation of a bait and tackle concession, together with the sale of food and non-alcoholic beverages, as approved by the City. (See Article VI.) Minimum/Maximum Hours of Operation: During the peak season, defined as April 1 through October 31, Concessionaire shall operate at least six (6) days per week, with minimum hours of 8:00 a.m. to 4:00 p.m. on Saturdays and Sundays, and 9:00 a.m. to 4:00 p.m. on weekdays. Notwithstanding the foregoing, Concessionaire may close Wednesdays during the peak season for cleaning, maintenance, and restocking purposes, subject to prior written approval by the Beaches, Parks & Recreation Director or designee.
During the off-season, defined as November 1 through March 31, Concessionaire shall operate at least five (5) days per week, which shall include Saturdays and Sundays. Minimum hours shall be 8:00 a.m. to 4:00 p.m. on Saturdays and Sundays and 9:00 a.m. to 3:00 p.m. on weekdays.
The foregoing hours are minimum hours only and are not intended to restrict Concessionaire from operating during additional hours when the San Clemente Municipal Pier is open to the public, subject to City approval and applicable laws, regulations, and City policies. Maximum permitted hours of operation shall be 6:00 a.m. to 9:00 p.m., seven (7) days per week, unless otherwise approved by the City in advance in writing.
Concessionaire shall close operations on the Fourth of July due to City fireworks operations and related public safety restrictions. Concessionaire may operate extended hours on Lobster Season Opening Day, subject to prior coordination with the City.
The foregoing covenant to operate shall not apply during periods of inclement weather, emergency conditions, City-directed closures, or other circumstances outside Concessionaire’s reasonable control, provided Concessionaire promptly notifies the Beaches, Parks & Recreation Director or designee. (See Section 6.02.) Addresses for Notices and Agents for Service of Process:
To City:
City of San Clemente
910 Calle Negocio
San Clemente, CA 92673
Attn: Beaches, Parks & Recreation Director and City Clerk To Concessionaire:
Hook and Cook SC, LLC
131 Esplande
San Clemente, CA 92672
Attn: Nicholas Rivard
AGREEMENT OF PREMISES
GENERAL.
Subject to the terms and conditions set forth in this Agreement, City hereby grants Concessionaire a limited, revocable right to operate a concession within the Premises, subject to the terms of this Agreement.
QUIET ENJOYMENT.
City agrees that, subject to the limitations expressly set forth in this Agreement, Concessionaire, upon paying the Rent and performing the terms and covenants in this Agreement required to be performed by Concessionaire, may operate within the Premises in accordance with this Agreement, subject to the City’s oversight and operational requirements.
AS-IS CONDITION.
From and after the Commencement Date (as that term is defined in Section 3.01 hereinbelow), the Premises will be leased in an as-is physical condition only. By taking possession of the Premises, Concessionaire thereby acknowledges the Premises are in good and working condition for the purposes intended and that Concessionaire will not hold City responsible for any repairs or improvements thereon except as may be expressly set forth herein.
City represents that equipment identified as City-provided in Exhibit B hereto, which is hereby fully incorporated by this reference, shall be in working order on the Commencement Date. City shall address material deficiencies in City-provided equipment identified by Concessionaire within an initial operational period of twenty (20) calendar days from the Commencement Date, subject to reasonable limitations and excluding damage caused by Concessionaire and provided that Concessionaire notifies the City as soon as reasonably practical, and no later than five (5) business days after discovering any such material equipment deficiencies.
TERM
COMMENCEMENT AND DURATION.
The “Initial Term” of this Agreement shall commence on the “Commencement Date,” which shall be ______________. Starting from 12:01 a.m. on the Commencement Date, the Initial Term shall be four (4) years, with one (1) possible two (2) year extension.
SURRENDER; HOLDING OVER.
At the expiration or earlier termination of this Agreement, Concessionaire shall immediately surrender the Premises to the City in good condition, reasonable wear and tear excepted, and remove all personal property and equipment. Any property remaining after termination may, at the City’s option, be deemed abandoned and may be retained or removed or disposed of by the City at Concessionaire’s expense. If Concessionaire continues to occupy or operate within the Premises after expiration or termination without a written agreement from the City, such occupancy shall be deemed a month-to-month revocable license, subject to all terms and conditions of this Agreement, and may be terminated by the City at any time upon written notice. Concessionaire shall continue to pay compensation to the City during any holdover period in an amount equal to the greater of the Base Rent or Percentage Rent as defined herein.
RENT
AMOUNT OF RENT.
Rent shall be the greater of: (a) “Base Rent,” or (b) “Percentage Rent,” as set forth below. Base Rent shall be One Thousand Two Hundred Dollars ($1,200.00) per month during Year 1 of the Initial Term and shall increase by Fifty Dollars ($50.00) per month annually in Years 2, 3, and 4. Accordingly, Base Rent shall be $1,200.00 per month in Year 1, $1,250.00 per month in Year 2, $1,300.00 per month in Year 3, and $1,350.00 per month in Year 4.
Percentage Rent shall be three percent (3%) of Gross Sales during Years 1, 2, and 3 of the Initial Term. Beginning in Year 4, the Percentage Rent rate shall increase to five percent (5%). If the parties mutually agree in writing to extend this Agreement for an Extended Term, Base Rent shall be One Thousand Four Hundred Dollars ($1,400); and Percentage Rent shall be seven percent (7%) of Gross Sales during each year of the Extended Term.
For each calendar month during the Initial Term, Concessionaire shall pay the greater of the applicable Base Rent or the applicable Percentage Rent. Any Rent or other payments due under this Agreement for any fractional part of a calendar month shall be prorated based on the number of days in that month during which the Agreement is in effect.
COMMENCEMENT OF RENT OBLIGATIONS
Notwithstanding any provision of this Agreement to the contrary, Concessionaire’s obligation to pay compensation to the City shall commence upon the date Concessionaire is authorized to begin operations by the Orange County Health Care Agency and has commenced active operations and sales from the Premises.
Concessionaire shall use diligent, good-faith efforts to obtain all required permits and approvals necessary to commence operations in a timely manner. Any delay in commencement of operations attributable to Concessionaire’s failure to pursue required approvals in a timely manner shall not delay the City’s right to require payment of Rent.
TIME OF PAYMENT.
Concessionaire’s obligation to pay Rent shall commence in accordance with Section 4.02 (Commencement of Rent Obligations). Rent shall be due and payable every month. Concessionaire shall pay Rent to City no later than the tenth day of the month following the full or partial calendar month for which Rent is due. For example, rent for the month of January is due and payable no later than February 10. It is understood and agreed that the ten-day grace period shall be used by Concessionaire for accounting and determining whether the Percentage Rent is greater than the Base Rent for the applicable month.
CALCULATION OF PERCENTAGE RENT.
Throughout the Initial Term, any Extended Term, and any holdover period, Concessionaire shall calculate and record, for every full or partial calendar month, as applicable, the total Gross Sales. If the Percentage Rent for the applicable month is greater than the Base Rent, Concessionaire shall pay the Percentage Rent for that month. If the Percentage Rent for the applicable month is less than the Base Rent, Concessionaire shall pay the Base Rent for that month. For purposes of this Agreement, “Gross Sales” means all revenues, receipts, income, proceeds of sales, and compensation for services of every kind, including without limitation rentals or other fees for the usage of space and deposits not refunded, whether provided for cash or on credit, earned directly or indirectly from the business(es) on and operations on the Premises in and for the applicable month. “Gross Sales” shall not include the occasional sale of fixtures and equipment by Concessionaire following their substantial use in the conduct of Concessionaire’s operations upon the Premises, sales and use taxes and similar taxes imposed on the sale of goods or services on the Premises, insurance proceeds, or credits or reimbursements earned by Concessionaire for merchandise returned to shippers, manufacturers, wholesalers, or suppliers.
ACCOUNTING FOR GROSS SALES.
Concessionaire shall maintain full, complete, and accurate books, records, and accounts of all Gross Sales derived from the operation of the Premises. Such records shall be maintained in accordance with generally accepted accounting principles and in a manner that clearly reflects all transactions related to Concessionaire’s operations at the Premises.
At such time as Concessionaire submits to City each monthly payment of Rent, such payment shall be accompanied by an itemized statement showing the Gross Sales derived from all business and operations at the Premises during the applicable month, together with a detailed itemization of the goods and services provided, as well as any deductions or exclusions therefrom.
Concessionaire shall maintain its accounting records in a manner that allows City to or its representatives to verify the accuracy of Gross Sales and the calculation of Percentage Rent through review of such records and supporting documentation, including through reconciliation of point of sale records, bank deposits, and applicable sales tax filings. All business records of Concessionaire must be supported by source documents such as sales slips, invoices, billings, unbilled accounting documents, ledgers, bank deposit receipts, sales tax returns, cash register tapes, sales books, bank books, purchase invoices, contracts, and such other similar records and documents as may be reasonably necessary to verify the amount of Gross Sales and the basis of the calculations necessary for the determination of Percentage Rent hereunder.
Concessionaire shall retain all such books, records, and supporting documentation for a period of not less than three (3) years following the date of creation. If Concessionaire utilizes any third-party vendor or operator in connection with its operations at the Premises, Concessionaire shall ensure that such party complies with the accounting and reporting requirements of this Section. Any failure by such party to comply shall constitute a Default by Concessionaire under this Agreement.
MAINTENANCE AND INSPECTION OF RECORDS; AUDIT.
City shall have the right, upon reasonable notice, during the Term and for a period of one hundred eighty (180) days following expiration or termination of this Agreement, to inspect and audit Concessionaire’s books, records, and accounts for the purpose of verifying Gross Sales and the calculation of Rent due to City. Any such inspection or audit shall be conducted during normal business hours and in a manner that minimizes interference with Concessionaire’s operations. Concessionaire shall cooperate fully with City in connection with any such inspection or audit. Concessionaire shall provide to City copies of its California sales and use tax returns on a quarterly basis at the time such returns are filed.
If any audit conducted by City reveals that Gross Sales were understated for the period under review, Concessionaire shall promptly pay any deficiency in Rent, together with interest as provided in this Agreement, and if any audit conducted by City reveals that Gross Sales were understated by more than two percent (2%) for the period under review, Concessionaire shall promptly shall reimburse City for the reasonable costs of such audit.
If the audit reveals an overpayment of Rent, City shall promptly refund such overpayment to Concessionaire. City shall maintain the confidentiality of financial information obtained through any inspection or audit to the extent permitted by law. Acceptance by City of any Rent payment shall not be deemed a waiver of City’s right to later audit or adjust such payment.
MANNER OF PAYMENT.
All Rent and other payments and charges due under this Agreement shall be paid by Concessionaire to City without prior demand therefor, and without any deduction or offset whatever, in lawful money of the United States of America, which shall be legal tender at the time of payment, at:
City of San Clemente
910 Calle Negocio
San Clemente, CA 92673
Attn: Cashier
or to such other person or at such other place as City may from time to time designate in writing. Concessionaire shall reference the period for which Rent is being paid. The acceptance by the City of the Concessionaire’s payment shall not constitute a waiver of the City’s right to subsequently demand that any additional amount be paid that may be owing.
DELINQUENT PAYMENTS.
Interest.
If Concessionaire shall neglect or fail to pay any Rent when the same is due and payable Concessionaire shall pay to City, in addition to such unpaid amounts, interest upon such unpaid amounts at the rate of ten percent (10%) per annum or the maximum legal rate then in effect, whichever is less, from the date the delinquent payment was due until principal and accrued interest are paid in full.
Late Charge.
Concessionaire acknowledges that late payment by Concessionaire to the City of Rent or any other amount required to be paid under this Agreement will cause the City to incur costs not contemplated by this Agreement, the exact amount of which is extremely difficult and impracticable to ascertain. Such costs include, without limitation, processing and administrative and collection costs, accounting charges, and late charges that may be imposed on City by virtue of its debt obligations. Accordingly, if Concessionaire fails to pay Rent or any other payment required to be paid under this Agreement within ten (10) days after such payment is due, Concessionaire shall additionally pay a late charge equal to five percent (5%) of the amount of such payment or $150.00, whichever is greater.
Independent Rights.
The interest and late charge provisions contained in this Section 4.07 are in addition to and do not diminish or represent a substitute for any other City rights and remedies, including for a Default by Concessionaire as set forth in Article XII of this Agreement.
TAXES AND UTILITY CHARGES
TAXES.
Taxes for Possession of Premises.
Concessionaire shall timely pay any and all taxes, assessments, and other charges, however described (hereinafter collectively referred to as “Taxes”), that are levied, assessed, or imposed by any governmental agency against the Premises, or any portion thereof (including without limitation any possessory interest tax imposed on Concessionaire’s possessory interest arising from use of the Premises), or any improvements or other property in or on the Premises (including any personal property of any kind (including fixtures) owned by or placed in, upon, or about the Premises by or on behalf of Concessionaire), or operations thereon by Concessionaire, for any period from and after the Commencement Date until the termination or expiration of the Term of this Agreement or such later date that Concessionaire actually vacates the Premises.
Right to Contest Taxes.
Concessionaire may at any time, in good faith and upon reasonable grounds, protest, dispute, or contest the validity or amount of the whole or any part of Taxes for which Concessionaire is responsible, and in this regard Concessionaire may in good faith diligently conduct any necessary proceedings to void, reduce, recover, or seek a refund of the same. It is understood that Concessionaire shall not, in the event of and during the bona fide and diligent prosecution of any such proceeding, be deemed to be in default in respect to the payment of any disputed Taxes so long as Concessionaire complies with the following provisions:
Concessionaire shall prosecute any such proceeding to a final conclusion as speedily as is reasonably possible; Neither the Premises nor any part thereof shall by reason of any such proceeding be, in the reasonable judgment of City, in danger of being forfeited, lost, or materially affected; Concessionaire shall deposit with City or at the election of City with a bank or trust company (“Escrow Agent”) situated in Orange County, California, mutually acceptable to City and Concessionaire, cash or an irrevocable letter of credit or a bond in the amount so contested and unpaid, together with all interest and penalties in connection therewith, and all charges that may be assessed against or become a charge on the Premises or any part thereof in such proceeding (to the extent that the amount of such interest, penalties, and charges are then ascertainable); Any such proceeding to contest the validity or amount of any Taxes or to recover any Taxes paid by Concessionaire shall be prosecuted by Concessionaire at Concessionaire’s sole cost and expense, and Concessionaire shall indemnify, defend (with counsel acceptable to City), and hold City harmless from and against any and all claim, liability, loss, cost, or expense of any kind, including but not limited to reasonable attorneys’ fees and expenses, which may be imposed upon or incurred by City in connection therewith; and Upon the termination of any such proceedings it shall be the obligation of Concessionaire to promptly pay the unpaid portion of any such Taxes or part thereof as are finally determined in such proceedings to be due and owing, together with all costs, fees, interest, penalties, or other liabilities in connection therewith, and, upon such payment, City shall direct the Escrow Agent to return any amount deposited with it, not theretofore expended, with respect to such Taxes; provided, however, City, if requested by Concessionaire, shall direct that the Escrow Agent disburse the monies on deposit with it directly to the taxing authority to whom the Taxes are payable.
UTILITIES.
Payment for Services.
Concessionaire shall timely pay when due any and all utility charges and fees, however described, for water, gas, electricity, telephone, sewer, trash collection and recycling, storm drain and water quality, cable television, internet, and telecommunications services, and any other utility services provided to or for the benefit of the Premises. To the extent the Premises do not have the means to measure Concessionaire’s usage of any utility separately from the usage of City or other Concessionaires at or occupants of the City’s Property, if applicable, Concessionaire shall pay the portion of that utility usage based upon the percentage of square feet occupied by the Premises compared to the total square footage of the improvements on the City’s Property or based upon such other method of allocation as may be reasonably determined by City to be fair and appropriate based upon Concessionaire’s proportionate usage.
Interruption of Service.
So long as City does not default in the performance of its obligations and duties hereunder, City shall not be liable in damages or otherwise for any temporary denial of access to the Premises or any failure or interruption of any utility service being furnished to the Premises, and no such temporary denial, failure, or interruption, unless protracted and due to City’s active negligence or willful misconduct, shall entitle Concessionaire to terminate this Agreement or to an abatement of Rent or other amounts due hereunder.
USE OF PREMISES
USE.
The Premises shall be used for only those uses described in Article I, clause (vii) of this Agreement and the terms and conditions of any applicable governmental permits and licenses applicable to the Premises from time to time. To the extent there may be any inconsistency between the terms and conditions of any applicable governmental permits and licenses applicable to the Premises and this Agreement, the terms and conditions of the applicable governmental permits and licenses shall govern. As a material part of the consideration for this Agreement, Concessionaire covenants that it shall not use or permit the Premises to be used for any purpose other than the purposes specified in this Agreement.
Concessionaire may conduct limited community-oriented programming, including educational or recreational activities, subject to the following conditions: all such activities shall require prior written approval by the City; such activities shall not conflict with City-sponsored events or previously scheduled uses; City-sponsored and permitted events shall take priority; no more than four (4) such events shall be conducted per calendar year; and all such activities shall be processed through the City’s Special Event Permit process, including payment of applicable application fees, provided that site use fees shall be waived.
HOURS OF OPERATION.
The Premises shall be open for business to the general public during the minimum hours of operation specified in Article I, clause (viii) of this Agreement, and shall not be open beyond the maximum hours of operation specified therein or as may otherwise be prohibited by City ordinance, City policy, or City direction. Concessionaire is permitted to close for up to two (2) weeks at the end of December, subject to prior coordination with the City. Concessionaire shall work with the City’s designee to request any additional closure dates on an annual basis. Additional closure dates shall be requested at least thirty (30) days in advance of the expected closure, unless the closure is due to emergency repairs, inclement weather, emergency conditions, City-directed closures, or other circumstances outside Concessionaire’s reasonable control. Closures due to inclement weather or emergency conditions shall be communicated promptly to the Beaches, Parks & Recreation Director or designee.
Concessionaire may operate extended hours on Lobster Season Opening Day, subject to prior coordination with the City. Concessionaire shall close operations on the Fourth of July holiday and will not be permitted to access the Pier due to City fireworks operations. All other holiday hours of operation shall be mutually agreed upon by City and Concessionaire on an annual basis.
City and Concessionaire shall agree to meet eighteen (18) months into the Agreement to review the Hours of Operation and determine whether the established operating schedule meets the needs of both Parties. The City reserves the right to revise the maximum hours of operations upon at least thirty (30) days’ written notice. The minimum hours of operations cannot be revised except as agreed by both Parties in writing.
RESTRICTIONS ON USE.
Except as may be provided below in this Section 6.03, Concessionaire, at its sole cost and expense, shall faithfully observe in the use, occupancy, and possession of the Premises all municipal and county ordinances, and all state and federal statutes, regulations and orders now in force and which may hereafter be in force, and Concessionaire shall fully comply at its sole expense with all regulations, orders, permits, and other requirements issued or made pursuant to any such laws. The final non-appealable judgment of any court of competent jurisdiction or the admission by Concessionaire in any action or proceeding against Concessionaire, whether City be a party thereto or not, that Concessionaire has violated any such statute, ordinance, regulation, order, permit, or other requirement for which Concessionaire is responsible in its use, occupancy, or possession of the Premises shall be conclusive of that fact as between City and Concessionaire.
Access for Disabled Persons.
City, at its sole cost and expense, shall be responsible in its design and construction for timely complying with all federal, state, and local laws and regulations, including but not limited to the Americans with Disabilities Act of 1990 (“ADA”), regarding ingress and egress to and from the Premises for disabled persons, including without limitation the cost of making any physical modifications or improvements to the area outside the Premises for that purpose (herein, “ADA Improvements”). Concessionaire shall be responsible for any ADA Improvements within the Premises to accommodate use and occupancy by disabled persons. In addition to the foregoing, Concessionaire shall indemnify, defend (with counsel acceptable to City), and hold harmless City and its officers, officials, directors, employees, and agents, and each of them, from and against any and all claims, actions, damages, liabilities, and expenses (including without limitation attorneys’ fees) directly or indirectly arising from or out of any alleged or actual violation of any federal, state, or local law or regulation, including the ADA, enacted to prevent the discrimination against persons with disabilities, where said alleged or actual violation occurs within any of the areas for which Concessionaire is responsible.
City shall indemnify, defend, and hold harmless Concessionaire and its officers, officials, directors, shareholders, employees, and agents, and each of them, from and against any and all claims, actions, damages, liabilities and expenses (including without limitation attorneys’ fees) directly or indirectly arising from or out of any alleged or actual violation of any federal, state, or local law or regulation, including the ADA, enacted to prevent the discrimination against persons with disabilities, where said alleged or actual violation occurs within any of the areas for which City is responsible outside of the Premises.
Nuisance, Waste, Peaceful Co-existence.
Concessionaire shall not commit or allow to be committed any nuisance, act of waste, or other act in or about the Premises that will in any manner whatsoever obstruct or interfere with the rights of adjacent or nearby property owners, businesses, residents, and the general public or injure or annoy them; nor shall Concessionaire allow the Premises to be used for any improper, immoral, unlawful, or objectionable purpose.
CONCESSIONAIRE’S CONDUCT OF BUSINESS.
Concessionaire shall keep the Premises and all public areas immediately adjacent to the Premises at all times in a neat, clean, and orderly condition. Concessionaire’s failure to comply with this Section shall be deemed to be a material breach of this Agreement.
Water Quality.
Concessionaire must be familiar with and comply with the City’s water quality requirements as defined in Section 13.40 of the City’s Municipal Code. For any exterior cleaning activities, the Concessionaire must use dry sweeping/cleaning methods to the maximum extent possible, and properly collect and dispose of collected material. If use of water becomes necessary, all wash water must be collected and not allowed to discharge to the ocean, area drains, storm drain inlets, gutters, paved areas, or any similar features. Floor mats or other equipment are prohibited from being cleaned in exterior areas. Any waste oil or grease must be collected for recycling and must be properly stored for recycling collection. Concessionaire must properly maintain grease traps and/or grease interceptor units, and keep records to document such maintenance.
6.04.2 Trash/Recycling
Concessionaire must keep the trash area clean and trash lids closed. Trash containers must never be filled with liquid or hosed out with water or other liquids. Concessionaires must implement a recycling program and separate other recyclable materials to maximize placement of recyclable materials in recycling bins provided by the City.
6.04.3 Prohibition on Use of Polystyrene Food Service Products Concessionaire shall not sell, serve, or package food or beverages from the Premises in containers made out of expandable polystyrene, or otherwise use or distribute or permit the use or distribution of expandable polystyrene food service products, including, without limitation, takeout containers, trays, plates, drinking cups, and bowls in connection with Concessionaire’s use of the Premises.
6.04.4 Vehicle Operation Safety Regulations for Use of San Clemente Beaches Vehicle access onto the pier is not permitted within the terms of this Agreement.
MAINTENANCE AND REPAIRS
GENERAL PROVISIONS.
During the Initial Term, any Extended Term, and any holdover period, Concessionaire shall at its expense maintain the Premises and all improvements, fixtures, and personal property located within the Premises in a first-class condition, and in good order and repair, free of litter and trash, reasonable wear and tear, and casualty damage excepted. Concessionaire shall maintain all landscaping, potted plants, and other live plants in and about the Premises in a healthy, pruned, and neat condition, and Concessionaire shall promptly remove and replace any dead or diseased plants. Except as expressly set forth in Articles VIII and IX, City shall have no responsibility for maintenance or repair of the Premises or any improvements, fixtures, or personal property located thereon.
Concessionaire shall be responsible for the day-to-day maintenance and repair of the Premises and all portions thereof, including, without limitation, all of Concessionaire’s fixtures and equipment, the exterior and interior windows, all Concessionaire signs, door and window locks and closing devices, and all window sashes, casements or frames, doors and door frames, floor coverings, including carpeting, and other special flooring. Concessionaire shall promptly replace all broken glass, both exterior and interior, with glass of the same kind, size, and quality.
CITY’S RIGHT OF SUBSTITUTED PERFORMANCE.
If at any time during the Term Concessionaire refuses or neglects to make repairs or maintain the Premises or any part thereof in a manner consistent with the terms of this Agreement or otherwise reasonably satisfactory to City, City shall have the right, upon giving Concessionaire reasonable written notice of its election to do so, to make such repairs or perform such maintenance on behalf of and for the account of Concessionaire. In such an event, City’s cost for such work shall be reimbursed by Concessionaire to City within ten (10) business days after Concessionaire’s receipt of a bill therefor.
CONSTRUCTION, ADDITIONS, ALTERATIONS, AND IMPROVEMENTS
CONCESSIONAIRE IMPROVEMENTS.
Concessionaire shall not have the right to make any additions, alterations, or improvements to the Premises without the prior written consent of City, which consent City shall not unreasonably delay, condition, or deny; provided, however, that nothing set forth in this Agreement is intended or shall be interpreted to limit or restrict City’s exercise of its police powers, including with respect to the consideration and approval of required applications for development and building entitlements.
Any and all additions, alterations, and improvements, whether or not requiring City’s consent, which are made or caused to be made by Concessionaire before or during the Initial Term or any Extended Term or holdover period shall be made at Concessionaire’s expense in accordance with the following: (i) such work, including, without limitation, Concessionaire’s final working drawings, plans, specifications, and choice of contractors, subcontractors, and suppliers shall be subject to the continuing approval of City, which information shall be furnished to City for City’s review and approval before the work is commenced, and any work not acceptable to the appropriate governmental entity or not reasonably satisfactory to City shall be promptly replaced at Concessionaire’s expense; (ii) notwithstanding any failure by City to object to any such work, City shall not be responsible therefor; (iii) such work shall not adversely affect the outside appearance and strength of the Premises, or the mechanical, electrical, and plumbing services and equipment thereof; (iv) such work shall not alter, add to, or otherwise change the exterior of the Premises without City’s prior written consent, which consent City may withhold in its sole and absolute discretion; (v) such work shall not cause or create a dangerous or hazardous condition and shall not interfere with or disturb adjacent or nearby property owners, businesses, or residents; (vi) Concessionaire shall cause all such work to be performed in such a manner as not to obstruct the access to the Premises; (vii) such work shall be done in a good and workmanlike manner and in compliance with all applicable legal requirements and shall be diligently prosecuted to completion; (viii) Concessionaire’s contractor or each of its subcontractors shall be bonded with sureties satisfactory to City in an amount sufficient to ensure full performance of the work to be done by Concessionaire and to ensure full payment to materialmen; (ix) Concessionaire and its contractor and subcontractors shall carry such worker’s compensation general liability and personal and property damage insurance as City may reasonably require; (x) such insurance shall be adequate to protect City and shall name City as an additional insured; (xi) Concessionaire shall defend (with counsel acceptable to City), indemnify, and hold harmless City and its officers, directors, shareholders, employees, and agents (all of the foregoing being hereinafter collectively referred to as the “Indemnitees”) from and against any and all claims, actions, damages, liabilities, and expenses (including, without limitation, attorneys’ fees) directly or indirectly arising out of or incurred in connection with, and any and all claims, demands, suits, actions for or in relation to, wages or cost of materials or equipment used in connection with, additions, alterations and improvements made or caused to be made by Concessionaire; and (xii) City shall have the right at all reasonable times to post and keep posted on the Premises any notice that may be provided by law which City may deem necessary or advisable for the protection of City and the Premises from mechanics’ lien or stop notice claims. The restrictions contained in this Section 8.01 with respect to Concessionaire’s contractors, subcontractors, and suppliers shall apply regardless of whether such persons or entities are employees or agents of, or otherwise affiliated with Concessionaire.
CONCESSIONAIRE’S PROPERTY.
Except for any and all building or structural improvements and trade fixtures permanently affixed to the Premises, which shall immediately become and remain the property of City, any and all items of personal property, including but not limited to trade fixtures not permanently affixed to the Premises, and other fixtures, furniture, furnishings, and other equipment constructed or placed on the Premises after City’s delivery of the Premises to Concessionaire shall be and remain the property of Concessionaire upon termination. Concessionaire shall remove from the Premises all such items of property prior to the termination of this Agreement. Concessionaire may also remove any signs containing Concessionaire’s name, trademark, symbol, logo, or design, regardless of whether the same are attached or affixed to the real property and regardless of their characterization as real or personal property or fixtures under law.
Upon termination of this Agreement, if Concessionaire causes any damage to the Premises or other property of City by removing any property whatsoever, Concessionaire shall at its own expense repair and restore the Premises and other City property, as applicable, as nearly as practicable to the condition such property was in prior to said damage and in compliance with Section 7.01 of this Agreement.
If for any reason Concessionaire leaves any of Concessionaire’s property in or around the Premises after the termination or expiration of this Agreement, Concessionaire shall be conclusively deemed to have abandoned such property in place in addition to whatever rights City may have and City shall have the right to immediately remove, destroy and dispose of, or reuse the same at City’s sole option without any further obligation to Concessionaire. In such circumstances, Concessionaire hereby agrees and waives any rights and claims that it might otherwise have against City to notice, an opportunity to reclaim Concessionaire’s property, and any right to compensation for City’s use or disposal of Concessionaire’s property under California Civil Code § 1980 et seq. and any other applicable provision of law.
INSURANCE; INDEMNITY
CONCESSIONAIRE’S INSURANCE.
Concessionaire, at its sole expense, shall procure and maintain in effect the following policies of insurance for the entire Initial Term and Extended Term of this Agreement, and any holdover period:
Comprehensive General Liability Insurance.
A policy of comprehensive general liability insurance written on a per occurrence basis in an amount not less than Two Million Dollars ($2,000,000) for bodily injury, death, and property damage or destruction of property on and about the Premises. Said insurance shall include coverage for, among other risks and perils, all businesses and operations on the Premises (including any businesses and operations conducted by third parties, regardless of whether such third party businesses and operations violate this Agreement, and without any waiver by City of any other right or remedy it may have against Concessionaire with respect thereto), premises and operations, blanket contractual, cross liability, broad form property damage, independent contractors, owned and non-owned automobile and vehicle coverage, garage keeper’s liability (if Concessionaire manages parking or provides valet parking services), and dramshop and liquor liability coverage. The amount of any deductible or self-insured retention under said policy shall not exceed Ten Thousand Dollars ($10,000.00) without City’s written consent. City shall have the right at any time during the Term, not more frequently, than once every three (3) years, to deliver written notice to Concessionaire requiring Concessionaire to increase the amount of such policy so long as the required percentage increase in the coverage amount does not exceed the percentage increase in the Consumer Price Index published by the United States Department of Labor (All Items) for the smallest geographic area within which the Premises are located or are most proximate between the Commencement Date and the date of City’s notice, and in such event Concessionaire shall procure the increased amount of insurance and provide proof of same to City within thirty (30) days. Such insurance shall be primary insurance and not participating with or in excess of any coverage which City may carry. All such insurance shall specifically insure the performance by Concessionaire of the indemnity agreement set forth in Section 9.04 of this Agreement as to liability for damage to property or injury to or death of persons. (ii) Worker’s Compensation Insurance.
A policy of worker’s compensation insurance and employer’s liability insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for both City and Concessionaire against any loss, claim, or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Concessionaire in the course of carrying out the work or services contemplated in this Agreement. (iii) Business Interruption Insurance.
A policy of business interruption insurance in sufficient amounts to cover any payment by Concessionaire, including Rent, to City for a period of not less than one (1) year during any casualty loss and restoration of the Premises while this Agreement remains in effect. Concessionaire’s obligation to pay Rent during any period of business interruption shall be offset only to the extent that insurance proceeds are actually received and attributable to Rent coverage. No full abatement of Rent shall apply except as otherwise expressly provided herein. (iv) Fire and Extended Coverage Insurance.
A policy of standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements, covering all Concessionaire Improvements to the Premises and Concessionaire’s trade fixtures, furnishings, equipment, and personal property on the Premises in an amount equal to one hundred percent (100%) of the replacement costs thereof.
Prior to the Commencement Date, pursuant to Section 3.01 of this Agreement, Concessionaire shall file with the City Clerk, in a form and content satisfactory to City, certificates of insurance for all of the above policies. All of the above policies shall be carried by companies rated “B-plus” (B+) or better in Best’s Insurance Guide, and shall be primary insurance and name City and its officers, employees, and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against City and against its officers, employees, and agents, and their respective insurers. All of said policies of insurance shall provide that the said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to City. In the event any of said policies of insurance are cancelled or not renewed or extended, Concessionaire shall, prior to the cancellation or expiration date, submit new evidence of insurance to City. No operations or services authorized pursuant to this Agreement shall commence or continue until Concessionaire has provided City with certificates of insurance or appropriate insurance binders evidencing the above insurance coverages, and said certificates of insurance or binders are approved by City.
WAIVER OF SUBROGATION.
Concessionaire hereby waives, to the maximum extent permitted by law and any policy issued by its insurance company, any and all rights of recovery against City, or against the employees, agents, and representatives of City, for loss of or damage to Concessionaire or its property or the property of others under its control, where such loss or damage is insured against under any insurance policy in force at the time of such loss or damage. Upon obtaining such insurance, Concessionaire shall give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Agreement. Concessionaire shall obtain and furnish evidence to City of the waiver of subrogation in favor of City from all insurance carriers furnishing insurance hereunder.
INCREASES IN INSURANCE COSTS.
Concessionaire shall not carry any stock or goods or do anything in, on, or about the Premises at any time during the Term of this Agreement which will in any way tend to increase the insurance rates or the risks against which City maintains an insurance policy for any portion of the City’s Property, including the Premises. Concessionaire shall pay to City forthwith upon demand the amount of any increase in premiums for insurance carried by City resulting from Concessionaire’s acts or omissions, whether or not City shall have consented to such acts or omissions on the part of Concessionaire.
INDEMNITY.
Regardless of any limitations on and exclusions from coverage of any insurance policies obtained by Concessionaire, Concessionaire shall fully indemnify, defend (with counsel acceptable to City), and hold harmless City and its officers, directors, shareholders, employees, and agents, and each of them (the foregoing being hereinafter collectively referred to as the “Indemnitees”), from and against any and all claims, actions, damages, liabilities, and expenses (including, without limitation, attorneys’ fees) for damage to property (including Concessionaire’s property) and injury to or death of persons (including officers, directors, employees, or agents of Concessionaire) directly or indirectly arising from or out of Concessionaire’s occupancy or use of the Premises or any part thereof, including the means of ingress into or egress from the Premises, arising from or related to Concessionaire’s acts or omissions in connection with its operations under this Agreement. This indemnity shall not apply to the extent of any active negligence or willful misconduct of the City or its indemnities. If the Premises are not surrendered at the time required pursuant to this Agreement, Concessionaire shall indemnify, defend, and hold harmless the Indemnitees against loss or liability resulting from the delay by Concessionaire in so surrendering the Premises, including, without limitation, claims made by any succeeding Concessionaire, other than City or an affiliate of City.
These indemnification obligations, and all other indemnification obligations set forth herein, shall survive expiration or termination of this Agreement.
EXEMPTION OF CITY.
So long as City does not default in the performance of its obligations and duties pursuant to this Agreement, City shall not be liable to Concessionaire for injury or damage which may be sustained by any person, property, or effects of Concessionaire or any other person in or about the Premises caused by or resulting from fire, steam, electricity, gas, water, or rain, which may leak or flow from or into any part of the Premises, or from the breakage, leakage, obstruction, or other defects of the pipe, sprinklers, wires, appliances, plumbing, air conditioning, or lighting fixtures of the same, whether such damage or injury results from conditions arising upon the Premises or from other sources.
CASUALTY DAMAGE.
Destruction by Risk Covered by Insurance.
If the Premises are totally or partially destroyed by a risk covered by insurance carried by Concessionaire, rendering the Premises totally or partially inaccessible or unusable, Concessionaire shall utilize the insurance proceeds to restore the Premises to substantially the same condition as they were in immediately prior to such destruction. Restoration shall be commenced as soon as reasonably practicable, and in no event later than ninety (90) days after the later of (i) the date such destruction occurs or (ii) the date such insurance proceeds are made available for such restoration, and thereafter the work shall be diligently pursued to completion.
Damage Not Covered by Insurance.
If the Premises are totally or substantially destroyed by a risk not covered by and not required to be covered by insurance, then either Party may at its option elect to terminate this Agreement by giving written notice to the other Party within fifteen (15) days after determining the replacement cost; provided, however, that in such event this Agreement shall not terminate if the non-terminating Party shall, within thirty (30) days after receipt of such notice give written notice to the terminating Party of its election to cause the repair and restoration of the Premises at its cost. In such event, the Party electing to cause the repair and restoration shall, at its sole expense, provide the funds necessary therefor and shall thereafter promptly and diligently repair and restore the Premises. Each Party agrees in such event to assign all insurance proceeds to the Party electing to make the repairs. As used herein, the term “substantially destroyed” shall mean that the uninsured replacement cost exceeds the sum of Twenty-five Thousand Dollars ($25,000.00).
Replacement of Concessionaire’s Property.
In the event of the damage or destruction of improvements located on the Premises not giving rise to a termination of this Agreement, Concessionaire shall, at its own expense, replace and repair all Concessionaire’s trade fixtures, equipment, machinery, furnishings, furniture and inventory as soon as possible to permit the prompt continuation of Concessionaire’s business from the Premises.
Damage Near End of Agreement Term.
In the event more than fifty percent (50%) of the Premises are totally destroyed during the last six (6) months of the Initial Term or any Extended Term, Concessionaire and City shall each have the option to terminate this Agreement on written notice to the other of exercise thereof within thirty (30) days after such destruction.
Abatement of Rent.
If a partial damage or destruction of the improvements on the Premises occurs and this Agreement is not terminated, there shall be no abatement of Rent for a period of one year (the period of the business interruption insurance which Concessionaire is required to maintain pursuant to this Agreement), and Concessionaire shall continue to utilize the improvements for the operation of its business to the extent it may be practicable to do so. If, despite diligent effort, Concessionaire is unable to fully repair and restore the Premises during said one-year period, the Base Rent shall abate from the end of the one-year period until the improvements on the Premises are fully repaired or restored, but only by that proportion that the unusable part of the improvements bears to the whole thereof.
Abatement for City-Caused Pier Closures
In the event the City closes the San Clemente Municipal Pier, in whole or in part, in a manner that restricts public access to the Premises due to City-initiated construction, safety conditions, or other City-controlled actions, or public-safety determinations not arising from Concessionaire's acts or omissions, and such closure continues for more than seven (7) consecutive days, Base Rent and Percentage Rent shall abate on a pro-rata daily basis from the eighth (8th) day of closure and continuing until access is restored. This Section 8.06.6 shall survive any conflicting language in Sections 5.02.2 and 15.16. This provision shall not apply to routine, short-term, or scheduled closures, including but not limited to special events or annual operations.
ASSIGNMENTS AND SUBLETTING
ASSIGNMENT AND TRANSFER.
This Agreement is a personal contract in that City has entered into this Agreement to a material extent because of the unique character and quality of Concessionaire and Concessionaire’s existing business operations. Accordingly, Concessionaire shall not transfer, assign, sublet, devise, bequeath, enter into license or concession agreements, change ownership, mortgage, or hypothecate (hereinafter, collectively, “Transfer”) this Agreement or Concessionaire’s interest in and to all or any portion of the Premises, without prior written consent of the City, which may be granted or withheld in the City’s sole discretion. For purposes of this Agreement, a Transfer shall include, but not be limited to, (i) any assignment of this Agreement, (ii) any sublease or sublicense of all or any portion of the Premises, and (iii) any direct or indirect change in ownership or control of Concessionaire that results in a transfer of a controlling interest. Notwithstanding the foregoing, the following shall not constitute a Transfer requiring City consent, provided that Concessionaire provides prior written notice to the City: (a) transfers to an entity under common ownership or control with Concessionaire; (b) transfers made for estate planning purposes; and (c) the admission of passive minority investors, provided that such investors (i) do not have operational control over the business, (ii) collectively hold less than a controlling interest in Concessionaire, and (iii) the original principals remain actively involved in the day-to-day management of the concession. Any purported Transfer in violation of this Section shall be void and shall constitute a material breach of this Agreement. No Transfer, whether or not approved by the City, shall relieve Concessionaire of its obligations under this Agreement unless expressly agreed to in writing by the City.
CITY REVIEW OF TRANSFER.
In evaluating any proposed Transfer requiring City approval, the City may consider any factors it deems relevant to the operation of the concession and the public interest, including, but not limited to, the proposed transferee’s financial capacity, operational experience, reputation, and ability to comply with the terms of this Agreement. Approval of any Transfer shall not be construed as a waiver of the requirement for City approval of any future Transfer. No Transfer shall release Concessionaire from its obligations under this Agreement unless expressly approved in writing by the City.
OBLIGATIONS AND LIABILITIES OF TRANSFEREE.
Each Transfer to which there has been consent shall be by an instrument in writing in form satisfactory to City, and shall be executed by the transferor in each instance; and each transferee shall agree in writing for the benefit of City herein to assume, to be bound by, and to perform the terms, covenants, and conditions of this Agreement to be done, kept, and performed by Concessionaire, including the payment of all amounts due under this Agreement. Failure to comply with the provisions of this section shall operate to prevent any such Transfer from becoming effective.
NO WAIVER OR RELEASE.
Consent to any Transfer which may be given by City or the acceptance of any Rent by City from Concessionaire or any third party, shall not constitute a waiver by City of the provisions of this Article or a release of Concessionaire from the full performance by it of the covenants contained herein to be performed by Concessionaire. Any consent given by City to any Transfer shall not relieve Concessionaire from the requirement of obtaining the written consent of City to any subsequent Transfer. The restrictions on transferability contained in this Article shall be considered a continuous covenant and shall run with the land.
MECHANICS’ LIENS
Concessionaire shall give City twenty (20) days’ prior written notice before any construction work on the Premises is undertaken by or on behalf of Concessionaire. Concessionaire shall do all things reasonably necessary to prevent the filing of any mechanics’ liens or other liens against the Premises, or any part thereof, by reason of work, labor, services, or materials supplied or claimed to have been supplied to Concessionaire or anyone holding the Premises, or any part thereof, through or under Concessionaire. Without limiting the generality of the foregoing, Concessionaire shall record a notice of completion promptly upon the completion of any such work, labor, services or supplying of materials, in the manner permitted by law. If any such lien shall at any time be filed, Concessionaire shall promptly notify City of same and shall either cause the same to be discharged of record within twenty (20) days after the date of filing the same, or, if Concessionaire, in its discretion and good faith, determines that such lien should be contested, it shall furnish such security as may be required by law to prevent any foreclosure proceedings against the Premises, or any part thereof, or Concessionaire’s interest therein, during the pendency of such contest. If Concessionaire shall fail to discharge such lien within such period or fail to furnish such security, then, in addition to all other rights or remedies, City may, but shall not be obligated to, discharge the same no sooner than five (5) days after delivery of written notice to Concessionaire (and assuming Concessionaire has not cured its default within that period of time) (i) by paying the amount claimed to be due, (ii) by procuring the discharge of such lien by deposit in court, (iii) by giving security, or (iv) in such other manner as is, or may be, prescribed by law. Any amount paid by City for any of the aforesaid purposes, including all reasonable attorney’s fees to procure the discharge of such lien with all necessary disbursements in connection therewith, with interest thereon at the rate of ten percent (10%) per annum or the maximum rate permitted by law, whichever is less, from the date of payment, shall be repaid by Concessionaire to City on demand. Nothing herein contained shall imply any consent or agreement on the part of City to subject the Premises, or any part thereof, to liability under any mechanics’ lien law.
DEFAULT, TERMINATION, AND REMEDIES
DEFINITION OF DEFAULT.
The occurrence of any one or more of the following events shall constitute a material “Default” of this Agreement by Concessionaire:
Rent Default.
The failure by Concessionaire to make, as and when due, any payment of Rent or other charges payable by Concessionaire hereunder, where such failure has continued for a period of ten (10) days after written notice thereof from City to Concessionaire. Any such notice shall be in lieu of, and not in addition to, any notice otherwise required under Sections 1161 and 1162 of the California Code of Civil Procedure.
Abandonment.
The abandonment or vacation of the Premises by Concessionaire. As used herein, abandonment is defined to include, without limitation, any absence of Concessionaire from the Premises for fifteen (15) consecutive days or longer, or the failure to continuously operate the business authorized by this Agreement for fifteen (15) consecutive days or longer, provided, however, that the following closures shall be excluded from the calculation of consecutive days: (a) closures during inclement weather; (b) closures specifically permitted under Section 6.02 (including the two-week December closure and Wednesday closures); (c) closures arising from City-caused conditions or pier closures; (d) closures excused by casualty loss or force majeure; and (e) any other closures of which Concessionaire has provided advance written notice to the Beaches, Parks & Recreation Director, excepting such failures as may be excused due to the occurrence of casualty losses or other events of force majeure as set forth in Section 16.16 of this Agreement.
Failure to Perform Covenants.
The failure by Concessionaire to observe or perform any of the express or implied covenants, promises, agreements, or provisions of this Agreement to be observed or performed by Concessionaire, where such failure has continued for a period of fifteen (15) days after written notice thereof from City to Concessionaire (or such other time period as may be expressly provided herein); provided, however, that if such failure to observe or perform cannot be cured with such fifteen (15) day period due to causes referred to in Section 16.16, Concessionaire shall not be deemed in Default of this Agreement if, within such fifteen (15) day period, Concessionaire promptly commences to cure such failure and thereafter diligently pursues the cure to completion. Any such notice shall be in lieu of, and not in addition to, any notice otherwise required under Sections 1161 and 1162 of the California Code of Civil Procedure. In the event Concessionaire fails to comply with the same material term, covenant, or condition of this Agreement on three (3) occasions during any twelve (12) month period of the Term, and is given notice as provided herein for each such failure, then each failure thereafter during such twelve (12) month period shall at the sole option of City constitute an incurable Default. The fifteen (15) day curing period provided for in this Subsection shall in no event be construed to lengthen or extend the curing periods provided elsewhere in this Section. Furthermore, if the covenant, promise, agreement, or provision of this Agreement that Concessionaire fails to observe or perform is of such a nature that it cannot afterward be performed, then such failure shall constitute an incurable Default immediately upon occurrence and no notice or time to effect a cure need be given to Concessionaire.
Falsification of Statements.
The falsification by Concessionaire or an agent of Concessionaire of any report or statement required to be furnished to City pursuant to the terms of this Agreement, which at the sole option of City shall constitute an incurable Default.
Assignment of Possessory Interest.
The Transfer of Concessionaire’s rights and interest in this Agreement without City’s prior written consent, as set forth in Article X.
Insolvency
Insolvency, which shall be the (i) making by Concessionaire of any general assignment for the benefit of creditors; (ii) filing by or against Concessionaire of a petition to have Concessionaire adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Concessionaire, the same is dismissed within thirty (30) days); (iii) appointment of a trustee or receiver to take possession of substantially all of Concessionaire’s assets located on the Premises or of Concessionaire’s interest in this Agreement, where possession is not restored to Concessionaire within thirty (30) days; (iv) attachment, execution or other judicial seizure of substantially all of Concessionaire’s assets located on the Premises or of Concessionaire’s interest in this Agreement, where such seizure is not discharged within thirty (30) days thereafter; or (v) Concessionaire’s convening of a meeting of its creditors or any class thereof for the purpose of effecting a moratorium upon or composition of its debts.
NOTICE OF DEFAULT.
Notices given under this Article shall specify the alleged Default and the applicable provisions of this Agreement and shall demand that Concessionaire perform the provisions of this Agreement, or pay Rent or other sum that is otherwise due, within the applicable period or quit the Premises.
CITY’S REMEDIES.
Upon the occurrence of a Default by Concessionaire, or at any time thereafter during the continuance of such Default, in addition to and not by way of limitation of any other rights and remedies City may have under this Agreement and applicable law, City shall have the right, at its option and without further notice or demand of any kind to Concessionaire, to any and all of the following remedies:
Continuation of Concessionaire’s Interest.
City may continue Concessionaire’s interest in the Agreement and Premises in full force and effect, and City shall have the right to collect any Rent payable to City when due. During the period Concessionaire is in Default, unless Concessionaire is diligently proceeding to cure the Default, City may enter the Premises and relet them or any part thereof to a third party or parties. Concessionaire shall be liable immediately to City for all costs City incurs in reletting the Premises, including costs for advertisements and brokerage fees. Reletting may be for a period shorter or longer than the remaining Term, whether the Initial Term or any Extended Term, of this Agreement. Concessionaire shall pay to City the rent due under this Agreement on the date such Rent is due, which payment shall be adjusted by the amount of Rent City receives from any reletting. No act of malfeasance, effort to relet, or any other act by City allowed by this Subsection 12.03.1 shall terminate Concessionaire’s interest in the Agreement unless City notifies Concessionaire in writing that City elects to terminate.
Termination of Concessionaire’s Interest.
City may terminate Concessionaire’s right to possession of the Premises at any time while Concessionaire is in Default, provided that Concessionaire is not diligently proceeding to cure such Default, by giving Concessionaire written notice specifying that the Default has not been cured and that City has terminated this Agreement, effective as of the date of termination set forth in such notice. Concessionaire’s interest in this Agreement shall terminate on the date specified in such notice as fully and completely as if such date were the date originally fixed for the expiration of the Initial Term or applicable Extended Term, and Concessionaire shall quit and surrender the Premises. No act by City other than giving such notice of termination to Concessionaire shall terminate Concessionaire’s interest in this Agreement. Upon termination of Concessionaire’s interest, in addition to any other rights City has pursuant to this Agreement or at law or in equity, City shall have the rights described in Section 12.04 of this Agreement.
Right to Appoint Receiver.
City shall have the right to have a receiver appointed to collect Rent and conduct Concessionaire’s business while Concessionaire is in Default, provided Concessionaire has not commenced to cure and is not diligently proceeding to cure said Default. Neither the filing of a petition for the appointment of a receiver nor the appointment thereof shall constitute an election by City to terminate this Agreement.
Right to Cure at Concessionaire’s Expense.
City may, at any time after Concessionaire commits a Default, cure such Default at Concessionaire’s expense. If City at any time, by reason of Concessionaire’s Default, pays any sum or does any act that requires the payment of any sum, the sum paid by City shall be due immediately from Concessionaire to City at the time the sum is paid, and if paid at a later date, shall bear interest in the amount of ten percent (10%) per annum or the maximum rate allowed by law, whichever is less, from the date the sum is paid by City until reimbursement by Concessionaire.
TERMINATION OF AGREEMENT DAMAGES.
Upon City’s termination of this Agreement, as set forth in Section 12.03, City may recover as damages from Concessionaire any and all of the following:
Unpaid Rent at Termination.
The worth, at the time of award, of the unpaid and past due Rent at the time of termination.
Unpaid Rent at Award.
The worth, at the time of award, of the amount by which the unpaid Rent that would have been earned after the date of termination until the date of award exceeds the amount of the loss of Rent that Concessionaire proves could have been reasonably avoided.
Future Rent.
The worth, at the time of award, of the amount by which the unpaid Rent for the balance of the Initial Term, or the applicable Extended Term, exceeds the amount of the loss of Rent that Concessionaire proves could have been reasonably avoided.
Other Amounts.
Any other amount necessary to compensate City for all of the detriment proximately caused by Concessionaire’s failure to perform its obligations under this Agreement or that in the ordinary course of things would be likely to result therefrom, whether through inability to relet the Premises on satisfactory terms or otherwise, specifically including, but not limited to, (i) all reasonable expenses necessary to relet the Premises, which shall include the cost of advertisements and brokerage fees, and (ii) any increase in insurance premiums caused by the vacancy of the Premises.
TERMS DEFINED.
As used in Section 12.04, the following terms are defined:
Worth at the Time of Award.
The “worth, at the time of award” of the amounts referred to in Subsections 12.01.1 and 12.01.2 is computed by allowing interest from the due date thereof to the date of payment at the rate of ten percent (10%) per annum or the maximum rate permitted by law, whichever is less. The “worth at the time of award” of the amount referred to in Subsection 12.01.3 is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).
Time of Award.
The “time of award” as used in Subsections 12.01.1, 12.01.2, and 12.01.3 is the date on which judgment is entered by a court of competent jurisdiction.
CITY’S DEFAULT.
City shall be in Default of this Agreement if it fails or refuses to perform any provision of this Agreement that it is obligated to perform if the failure to perform is not cured within thirty (30) days after written notice of default has been received by City from Concessionaire. If such Default cannot be reasonably cured within thirty (30) days, City shall not be in Default if City commences to cure the Default within the thirty (30) day period and thereafter diligently and in good faith continues to cure the Default.
INDEMNIFICATION UNAFFECTED.
Nothing in this Article shall limit or otherwise impair the right of City to indemnification from Concessionaire under this Agreement, whether before or after this Agreement expires or is terminated.
NO TERMINATION.
Even though Concessionaire has breached this Agreement, this Agreement shall continue in effect for so long as City does not terminate Concessionaire’s right to possession, and City may enforce all of City’s rights and remedies under this Agreement, including the right to recover Rent as it becomes due.
TERMINATION AND ENTRY.
In the event City terminates this Agreement, City may (upon such notice as is expressly provided in this Article XII) re-enter the Premises and take possession thereof and remove all persons therefrom, and Concessionaire shall have no further claim under this Agreement. Such termination shall not relieve Concessionaire of any obligation hereunder that has accrued prior to the date of such termination. City may take possession of all personal property of Concessionaire and of any other person that is located on the Premises and may store all such personal property on behalf of and at the risk and expense of Concessionaire. Within thirty (30) days after City takes possession thereof, Concessionaire may redeem such personal property upon payment to City in full of all amounts then due from Concessionaire to City hereunder and all costs incurred by City in providing such storage. If Concessionaire fails to redeem such personal property within such period, City may sell such personal property in any reasonable manner and shall apply the proceeds from such sale actually collected by City from such sale first against the costs of storage and sale and then against any other obligation due from Concessionaire hereunder. Concessionaire recognizes these rights as just and adequate remedies and hereby expressly waives any and all rights of redemption granted by or under present or future laws (including, without limitation, Sections 1174 and 1179 of California Code of Civil Procedure) in the event of Concessionaire’s being evicted or dispossessed for any cause, or in the event of City’s obtaining possession of the Premises by reason of a Default of Concessionaire under this Agreement, or otherwise.
LIEN FOR RENT.
Concessionaire hereby grants to City a lien and security interest on all property of Concessionaire now or hereafter placed in or upon the Premises, and such property shall be and remain subject to such lien and security interest of City for payment of all Rent and any other amount required to be paid by Concessionaire under this Agreement. Said lien and security interest shall be in addition to and cumulative of the City’s liens and provided by law. This Agreement shall constitute a security agreement under the California Commercial Code (the “CCC”) so that City shall and may enforce a security interest on all property now or hereafter placed by or on behalf of Concessionaire in or on the Premises, including, but not limited to, all fixtures, machinery, equipment, furnishings, and other articles of personal property. Concessionaire shall execute as debtor such financing statement or statements as City may now or hereafter reasonably request in order that such security interest or interests may be protected pursuant to the CCC. City may, at its election at any time file a copy of this Agreement as a financing statement. City, as secured Party, shall be entitled to all of the rights and remedies afforded a secured Party under the CCC.
WAIVER.
No delay or omission in the exercise of any right or remedy of City shall impair such a right or remedy or be construed as a waiver. The waiver by the City of any failure by Concessionaire to perform any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant, or condition or any subsequent or preceding failure or breach of the same or any other term, covenant, or condition herein contained. The subsequent acceptance of Rent (or a portion thereof) by City shall not be deemed to be a waiver of any previous breach by Concessionaire of any term, covenant, or condition of this Agreement, other than the failure of Concessionaire to pay the Rent (or portion thereof) so accepted, regardless of City’s knowledge of such prior existing failure or breach at the time and acceptance of such Rent. Without limitation on the foregoing, no payment by Concessionaire or receipt by City of a lesser amount than the monthly installment of Rent due under this Agreement shall be deemed to be other than on account of the earliest Rent due hereunder, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and City may accept such check or payment without prejudice to City’s right to recover the balance of such Rent or pursue any other remedy available to City; no receipt of money by City from Concessionaire after the termination of this Agreement or after the service of any notice of the commencement of any suit, or after final judgment for possession of the Premises, shall reinstate, continue or extend the Initial Term or any Extended Term, or affect any such notice, demand or suit; and acceptance of any payment from a debtor in possession, a trustee or any other person acting on behalf of Concessionaire or Concessionaire’s estate shall not waive or cure a default hereunder. City’s consent to or approval of any act by Concessionaire requiring City’s consent shall not be deemed to waive or render unnecessary City’s consent to or approval of any subsequent act by Concessionaire requiring City’s consent or approval.
SURRENDER.
Prior to expiration of the Initial Term or any then-effective Extended Term, only an express written notice from City to Concessionaire of City’s intention to accept a surrender by Concessionaire shall constitute acceptance of the surrender of the Premises and accomplish a termination of this Agreement. No other act or conduct of City, including, without limitation, the acceptance of the keys to the Premises, shall constitute an acceptance of the surrender of the Premises before the expiration of the Initial Term or any then-effective Extended Term. City shall not, by any re-entry or other act, be deemed to have accepted any surrender by Concessionaire of the Premises or Concessionaire’s interest therein, or be deemed to have terminated this Agreement, or to have relieved Concessionaire of any obligation hereunder, unless City shall have given Concessionaire written notice of City’s election to terminate this Agreement.
CUMULATIVE REMEDIES.
In addition to other remedies provided in this Agreement, City shall be entitled, to the extent permitted by applicable law, to injunctive relief in case of the violation or attempted or threatened violation of any of the covenants, agreements, conditions or provisions of this Agreement, or to a decree compelling performance of any of the other covenants, agreements, conditions or provisions of this Agreement, or to any other remedy allowed to City at law or in equity. Except as provided herein or as provided under applicable California law in effect at the time of execution hereof, the rights and remedies reserved to City in this Article XII are independent and cumulative and in addition to all other rights available to City under this Agreement, at law or in equity, and City may pursue any or all of such rights and remedies, at the same time or otherwise.
COMMON AREAS: USE, MAINTENANCE, AND COSTS
DEFINITIONS.
As used herein, “Common Areas” shall mean all areas and improvements within the City’s Property, if any, that will not be held for exclusive use by City or by other persons entitled to occupy any space therein. Common Areas shall include parking areas, walkways, driveways, delivery passages, curbs, sidewalks, landscaped and planted areas, service areas, exterior and interior access ways and stairways, retaining walls, paving, light fixtures, and other areas and non-building improvements, where said Common Areas are provided by City for the common use of City, Concessionaires and their respective employees, agents and invitees, and the general public. City may make changes at any time in the size, shape, location, number, and extent of the Common Areas and may provide substitute parking, so long as Concessionaire’s access to the Premises is not unreasonably impaired. No such change shall entitle Concessionaire to any abatement of Rent. Before instituting any such changes, City shall notify Concessionaire thereof and consult with Concessionaire thereon, but Concessionaire’s consent thereto shall not be required, and City may institute such changes in its sole discretion.
CONCESSIONAIRE’S RIGHT TO USE; CONCESSIONAIRE’S COOPERATION.
Concessionaire and its employees, agents, and invitees shall be entitled to use the Common Areas in common with City and with other persons authorized by City; provided, however, that Concessionaire’s use of the Common Areas shall not interfere with or impair the use and enjoyment of the City’s Property by City, other Concessionaires and occupants, their employees, agent, and invitees, or any other member of the public. The rights of Concessionaire in and to the Common Areas shall at all times be subject to the rights of City and the other Concessionaires and occupants of the City’s Property to use the same in common with Concessionaire. City shall not be responsible to Concessionaire for the violation or nonperformance by any other Concessionaire or occupant of the City’s Property for failure to observe Concessionaire’s right to use and enjoyment of the Common Areas. Concessionaire shall keep the Common Areas free and clear of any obstructions created or permitted by Concessionaire or resulting from Concessionaire’s operation.
CONTROL BY CITY.
Management.
City shall operate, manage, equip, police, insure, light, repair, clean, and maintain the Common Areas. City may temporarily close the Common Areas, or any portion or portions thereof, for repairs or alterations, or to prevent a dedication thereof or the accrual of prescriptive right therein.
Exclusive Control.
City shall at all times have exclusive control of all Common Areas and may at any time restrain any use thereof, except as otherwise provided by law or in this Agreement. City may at any time remove any unauthorized person from the Common Areas or prohibit the use thereof by unauthorized persons. If, in the opinion of City, unauthorized persons are using any of the Common Areas by reason of the presence of Concessionaire, Concessionaire, upon demand of City, shall remove such unauthorized persons by appropriate proceedings. Nothing herein shall affect the rights of City at any time to remove any such unauthorized persons from the Common Areas or to restrain the use of any of the Common Areas by unauthorized persons.
PARKING.
Concessionaire and its employees and agents shall park their vehicles only in portions of the public parking areas within the Pier Bowl or Linda Lane Areas, which parking areas shall be reasonably close to the Premises. Concessionaire shall be entitled to two (2) free resident parking permits per calendar year. Concessionaire shall assume responsibility for compliance by its employees with the parking provisions contained herein. Concessionaire hereby authorizes City to tow away from the Common Areas any vehicle belonging to Concessionaire or Concessionaire’s employees or agents parking in violation of these provisions.
SIGNAGE
USE OF SIGNAGE AND FIXTURES.
Concessionaire shall have the right, subject to obtaining any required governmental plans and permits and obtaining City’s prior written consent, which consent shall not be unreasonably denied, delayed, or conditioned, to:
(a) Install or affix to the exterior doors or windows of the Premises lighting fixtures, shades, awnings, or exterior decorations (including exterior painting); and (b) Install or affix to the exterior doors or windows of the Premises or to the face of the building any sign, lettering, placards, or the like.
PROHIBITED ACTIVITIES.
Concessionaire shall not, without City’s prior written consent, do any of the following:
(a) Cause or permit to be used any advertising or other materials or methods which are objectionable to City, including, without limitation, loudspeakers, mechanical or moving display devices, unusually bright or flashing lights, and similar devices, the effect of which may be seen or heard outside the Premises; (b) Solicit business in the parking areas, or distribute, or cause to be distributed, any handbills or other advertising matter in the parking areas or in other Common Areas; or (c) Use any sign or advertising that is not of professional quality.
MAINTENANCE.
Concessionaire shall at all times maintain its windows and signs in a neat, clean, and orderly condition. If, as to any sign exposed to the Common Areas, Concessionaire shall fail to do so after twenty-four (24) hours’ written notice from City, City may repair, clean, or maintain such exterior sign and the cost thereof shall be payable by Concessionaire to City upon demand as additional Rent.
SECURITY DEPOSIT
A security deposit is on file with the City as stated in Article I, clause (vi) of this Agreement. The Security Deposit shall be held by City as security for the performance by Concessionaire of all of the terms, covenants, and conditions of this Agreement to be kept and performed by Concessionaire. The Security Deposit shall not be mortgaged, assigned, transferred, or encumbered by Concessionaire without the prior written consent of City and any such act on the part of Concessionaire shall be without force and effect and shall not be binding upon City. In the event of bankruptcy or other debtor-creditor proceedings against Concessionaire, such Security Deposit shall be deemed to be applied first to the payment of Rent and other charges due City for all periods prior to filing of such proceedings. If Concessionaire commits a Default with respect to any provision of this Agreement, including without limitation the provisions relating to the payment of Rent, City may (but shall not be required to) use, apply, or retain all or any part of the Security Deposit for the payment of any Rent or any other sum in default, or for the payment of any other amount which City may spend or become obligated to spend by reason of Concessionaire’s Default or to compensate City for any other loss or damage which City may suffer by reason of Concessionaire’s Default. If any portion of the Security Deposit is so used or applied, Concessionaire shall, within five (5) days or written demand therefore by City, deposit cash with City in an amount sufficient to restore the Security Deposit to its original amount, and Concessionaire’s failure to do so shall be a material Default of this Agreement. City shall not be required to keep the Security Deposit separate from its general funds, and Concessionaire shall not be entitled to interest on the Security Deposit. If Concessionaire fully performs every provision of this Agreement to be performed by it, the Security Deposit or any balance thereof shall be returned to Concessionaire (or, at City’s option, to the last assignee of Concessionaire’s interest hereunder) upon termination of this Agreement. In the event of termination of City’s interest in this Agreement, City shall transfer the Security Deposit to City’s successor in interest, and upon such transfer, City shall be discharged from any further liability with respect to the Security Deposit.
MISCELLANEOUS
CITY’S RIGHT OF ACCESS.
Upon reasonable prior notice to Concessionaire, City and its agents shall have free access to inspect the Premises during Concessionaire’s normal business hours (or at other times in the event of a sudden and unanticipated emergency), to make reasonable repairs or installations which City may be required or permitted to make hereunder, to exhibit the Premises to prospective purchasers or Concessionaires, and to post notices required or permitted by law.
NONDISCRIMINATION.
Concessionaire covenants, by and for itself, and its successors and assigns, and this Agreement is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or any other protected class pursuant to federal, state, or local law, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Premises, nor shall Concessionaire, or any person claiming under or through Concessionaire, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of licensees, Concessionaires, lessees, sublessees, or vendees in the Premises.
The foregoing provisions shall be binding upon and shall obligate City and Concessionaire and any transferees or assignees of either of them.
TRANSFER OF CITY’S INTEREST.
Upon any transfer of City’s interest in the Premises, the transferor shall be automatically relieved of all obligations and liabilities on the part of City accruing after the date of such transfer.
SEVERABILITY.
Any provision of this Agreement that shall prove to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof, and such remaining provisions shall remain in full force and effect.
TIME OF ESSENCE.
Time is of the essence with respect to every provision of this Agreement.
AGREEMENT NOT SUBJECT TO LEVY.
This Agreement and the interest of Concessionaire hereunder shall not be subject to garnishment or sale under execution in any action or proceeding which may be brought against or by Concessionaire without the written consent of City.
NON-PARTNERSHIP.
It is understood and agreed that neither Party shall be construed or held to be a partner, joint venture, affiliate, or associate of the other, nor shall either Party be liable for any debts or other obligations incurred by the other; and that the relationship of the Parties hereto is and at all times shall be and remain that of City and Concessionaire.
BROKERS.
Concessionaire hereby warrants and represents that Concessionaire has not dealt with any brokers. Concessionaire shall defend (with counsel acceptable to City), indemnify and hold harmless City from any and all claims, costs, expenses (including, without limitation, attorneys’ fees), and liability for any commission, brokerage fee, or other charge claims against City by any broker, agent, or finder purporting to have been engaged by Concessionaire in connection with this Agreement, which indemnity obligation shall survive the termination of this Agreement.
QUITCLAIM.
At the termination of this Agreement, Concessionaire shall execute, acknowledge, and deliver to City, within ten (10) days after written demand from City, any quitclaim deed or other document reasonably required by any reputable title company to remove the cloud of this Agreement from the title to the real property subject to this Agreement.
SAFETY AND HEALTH.
Concessionaire shall at all times during the Initial Term, any Extended Term, and any holdover period, comply with the requirements of the Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq., and any similar legislation in California (collectively, the “Act”), to the extent that the Act applies to the Premises and operations thereon. Without limiting the generality of the foregoing, Concessionaire shall maintain all working areas, all machinery, structures, electrical facilities, and the like upon the Premises in a condition that fully complies with the requirements of the Act. Concessionaire shall defend (with counsel acceptable to City), indemnify and hold harmless City from any liability, claims, or damages arising as a result of a breach of the foregoing covenant and from all costs, expenses, and charges arising therefrom, including, without limitation, attorneys’ fees and court costs incurred by City in connection therewith, which indemnity obligation shall survive the termination of this Agreement.
ATTORNEY’S FEES.
If either City or Concessionaire institutes any action or proceeding against the other relating to the provisions of this Agreement, or any default hereunder, the unsuccessful Party in such action or proceeding shall reimburse the prevailing Party therein for the reasonable expenses, disbursements, and attorneys’ fees incurred therein by the prevailing Party.
CAPTIONS.
Article, Section, and Subsection captions in this Agreement have been inserted solely for the convenience of the Parties, and such captions, headings, and titles shall in no way define or limit the scope, intent, or application of any provision of this Agreement.
INUREMENT.
Subject to any provisions hereof restricting assignment or subletting by Concessionaire, the terms and conditions contained in the Agreement shall bind the Parties and their successors and assigns.
CHOICE OF LAW.
This Agreement shall be construed in accordance with and governed by the internal laws of the State of California, without regard to conflict of law principles.
GENDER; NUMBER.
Throughout this Agreement, the stated gender shall be read to mean the feminine, masculine, or neuter, and the stated number shall be read to mean the singular or plural, as the context may require.
FORCE MAJEURE.
In the event City or Concessionaire is delayed, hindered, or prevented from performing any act required hereunder by reason of strikes, lockouts, or other labor troubles, inability to procure or shortage of materials or supplies, failure of power, energy shortages, restrictive governmental laws or regulations, inclement weather, fire, explosion, earthquake or other casualty, riots, insurrection, war, act of God, or other causes that are without the fault and beyond the reasonable control of such Party, then the performance of such Party shall be excused for and extended by the period of such delay provided that such Party notifies the other Party of such delay and the cause within ten (10) days. The provisions herein shall not operate to excuse Concessionaire from the prompt payment of Rent or any other payment required under this Agreement, unless herein otherwise expressly provided to the contrary. In no event shall Concessionaire’s inability to obtain financing, interest rates, or market conditions excuse Concessionaire’s performance or entitle Concessionaire to an extension of time for performance of its obligations set forth in this Agreement.
NO REPRESENTATIONS OR WARRANTIES BY CITY.
Concessionaire agrees to accept physical possession of the Premises in a strictly “as-is” physical condition, subject to all matters of record and to all applicable zoning, municipal, county, state, and federal laws, ordinances, and regulations governing and regulating the use of the Premises. Concessionaire acknowledges that neither City nor City’s agents have made any representation or warranty as to such matters of record, or as to such laws, ordinances, zoning regulations, or as to the condition of the Premises or the suitability of the Premises for the conduct of Concessionaire’s business. City reserves the absolute right to Agreement other space within City’s Property as City, in the exercise of its sole business judgment, shall determine to better promote its interests. Concessionaire does not rely on the fact, nor does City represent, that any specific Concessionaire or number of Concessionaires shall during the Initial Term or Extended Term occupy any other space within the City’s Property.
EFFECTIVENESS OF AGREEMENT.
Submission of this instrument for examination or signature by Concessionaire does not constitute an offer of or option to Agreement; it is not effective as an Agreement otherwise until execution by City and delivery thereof to Concessionaire.
INCORPORATION OF PRIOR AGREEMENT AGREEMENTS.
This Agreement and the Exhibits hereto cover in full each and every agreement of every kind or nature whatsoever between the Parties concerning the Premises, and all preliminary negotiations and agreements of whatsoever kind or nature, except those contained herein, are superseded and of no further force or effect. City has made no representations or promises whatsoever with respect to the Premises, except those contained herein; and no other person, firm, or corporation has at any time had any authority from City to make any representations or promises on behalf of City, and Concessionaire expressly agrees that if any such representations or promises have been made by others, Concessionaire hereby waives all right to rely thereon. No verbal agreement or implied covenant shall be held to vary the provisions of this Agreement, any statute, law, or custom to the contrary notwithstanding. No provision of this Agreement may be amended or added to except by an agreement in writing signed by the Parties hereto or their respective successors in interest. Concessionaire, by initialing this section, acknowledges that it has read the same and understands it to be a waiver of any right to rely on any representations or agreements concerning the Premises not expressly set forth in this Agreement.
Concessionaire’s Initials
City’s Initials
NOTICES.
Any notice required or permitted hereunder shall be in writing and shall be served personally or by certified or registered mail. If served by mail, notice shall be addressed as specified in Article I. Any notice given by mail shall be deemed to have been delivered seventy-two (72) hours after deposit in the United States mail, postage prepaid and addressed as specified in Article I. Either Party may, by written notice to the other, specify a different address for notice.
SERVICE OF PROCESS.
Concessionaire hereby appoints as its agent for receiving service of legal process on behalf of Concessionaire the person or entity identified in Article I at the address specified therein. Concessionaire shall not revoke or rescind the above appointment or otherwise relieve or replace said agent without first notifying City in writing of the name and address of another agent to be substituted in lieu thereof. Such notice shall specify the effective date of substitution.
COUNTERPARTS.
This Agreement may be signed by the Parties in several counterparts, and each of the signature pages shall be deemed to be an original copy and, when combined, shall be a document binding on the Parties.
ELECTRONIC SIGNATURES.
This Agreement may be signed electronically with the same force and effect as original ink signatures. [Signature Page to Follow]
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed on the respective dates set forth opposite their signatures.
CITY OF SAN CLEMENTE
By:________________________________
Andy Hall, City Manager
ATTEST: Dated: _________________________
____________________________
CITY CLERK of the City of
San Clemente, California
APPROVED AS TO FORM:
_____________________________
Elizabeth A. Mitchell, City Attorney
APPROVED AS TO AVAILABILITY
OF FUNDING:
_____________________________
Finance Authorization
HOOK AND COOK SC, LLC
a Limited Liability Company
(“CONCESSIONAIRE”)
By:_____________________________
Lauren Rivard, CEO
Dated: _________________________
EXHIBIT “A”
DEPICTION OF THE PREMISES
The Premises subject to this Concession Agreement consist of the bait and tackle concession facility located at the terminus (seaward end) of the San Clemente Municipal Pier.
The Premises include:
The interior concession structure is commonly referred to as the “end-of-pier bait and tackle shop” Service windows and associated operational areas directly attached to the structure Limited adjacent exterior areas immediately surrounding the structure, as necessary for day-to-day concession operations, as determined and approved by the City as depicted on Exhibit A-1 or in another writing by the City The Premises do not include:
Public seating areas beyond those specifically designated by the City Public walkways or fishing areas on the pier
Any additional pier structures or facilities not expressly identified Use of any exterior space beyond the footprint of the concession building shall be subject to prior written approval by the City and may be modified or revoked at the City’s discretion.
EXHIBIT “A-1”
SITE MAP
[See attached]
EXHIBIT “B”
LIST OF EQUIPMENT
City-Provided Equipment
Hood, blower, flashing, fire suppression, and Ansel System Water heater
Grease Trap
Swamp Cooler
Entry security system
Entry door fly fan
Service window pull-down screens
Floor sink
Four (4) roll-down doors
Provided by Lessee
[To be provided upon execution]
ARTICLE I SUMMARY OF FUNDAMENTAL AGREEMENT TERMS 1
ARTICLE II AGREEMENT OF PREMISES 2
SECTION 2.01 GENERAL. 2
SECTION 2.02 QUIET ENJOYMENT. 2
SECTION 2.03 AS-IS CONDITION. 3
ARTICLE III TERM
SECTION 3.01 COMMENCEMENT AND DURATION. 3
SECTION 3.02 SURRENDER; HOLDING OVER. 3
ARTICLE IV RENT
SECTION 4.01 AMOUNT OF RENT. 4
SECTION 4.02 TIME OF PAYMENT. 4
SECTION 4.03 CALCULATION OF PERCENTAGE RENT. 4
SECTION 4.04 ACCOUNTING FOR GROSS SALES. 5
SECTION 4.05 MAINTENANCE AND INSPECTION OF RECORDS; AUDIT. 6 SECTION 4.06 MANNER OF PAYMENT. 7
SECTION 4.07 DELINQUENT PAYMENTS. 7
4.07.1 Interest. 7
4.07.2 Late Charge. 7
4.07.3 Independent Rights. 8
ARTICLE V TAXES AND UTILITY CHARGES 8
SECTION 5.01 TAXES. 8
5.01.1 Taxes for Possession of Premises. 8
5.01.2 Right to Contest Taxes. 8
SECTION 5.02 UTILITIES. 9
5.02.1 Payment for Services. 9
5.02.2 Interruption of Service. 9
ARTICLE VI USE OF PREMISES 9
SECTION 6.01 USE. 9
SECTION 6.02 HOURS OF OPERATION. 10
SECTION 6.03 RESTRICTIONS ON USE. 10
6.03.1 Access for Disabled Persons. 10
6.03.2 Nuisance, Waste, Peaceful Co-existence. 11
SECTION 6.04 CONCESSIONAIRE’S CONDUCT OF BUSINESS. 11
SECTION 6.05 GENERAL PROVISIONS. 12
SECTION 6.06 CITY’S RIGHT OF SUBSTITUTED PERFORMANCE. 12 ARTICLE VII CONSTRUCTION, ADDITIONS, ALTERATIONS, AND IMPROVEMENTS 12 SECTION 7.01 CONCESSIONAIRE IMPROVEMENTS. 12
SECTION 7.02 CONCESSIONAIRE’S PROPERTY. 13
ARTICLE VIII INSURANCE; INDEMNITY 14
SECTION 8.01 CONCESSIONAIRE’S INSURANCE. 14
SECTION 8.02 WAIVER OF SUBROGATION. 16
SECTION 8.03 INCREASES IN INSURANCE COSTS. 16
SECTION 8.04 INDEMNITY. 16
SECTION 8.05 EXEMPTION OF CITY. 16
SECTION 8.06 CASUALTY DAMAGE. 17
8.06.1 Destruction by Risk Covered by Insurance. 17
8.06.2 Damage Not Covered by Insurance. 17
8.06.3 Replacement of Concessionaire’s Property. 17
8.06.4 Damage Near End of Agreement Term. 17
8.06.5 Abatement of Rent. 18
ARTICLE IX ASSIGNMENTS AND SUBLETTING 18
SECTION 9.01 NO ASSIGNMENT ALLOWED. 18
SECTION 9.02 CERTAIN TRANSFERS. 18
SECTION 9.03 OBLIGATIONS AND LIABILITIES OF TRANSFEREE. 19 SECTION 9.04 NO WAIVER OR AGREEMENT. 19
ARTICLE X MECHANICS’ LIENS 19
ARTICLE XI DEFAULT, TERMINATION, AND REMEDIES 20
SECTION 11.01 DEFINITION OF DEFAULT. 20
11.01.1 Rent Default. 20
11.01.2 Abandonment. 20
11.01.3 Failure to Perform Covenants. 20
11.01.4 Falsification of Statements. 21
11.01.5 Assignment of Agreementhold Interest. 21
11.01.6 Insolvency 21
SECTION 11.02 NOTICE OF DEFAULT. 21
SECTION 11.03 CITY’S REMEDIES. 21
11.03.1 Continuation of Concessionaire’s Interest. 21
11.03.2 Termination of Concessionaire’s Interest. 22
11.03.3 Right to Appoint Receiver. 22
11.03.4 Right to Cure at Concessionaire’s Expense. 22
SECTION 11.04 TERMINATION OF AGREEMENT DAMAGES. 22
11.04.1 Unpaid Rent at Termination. 22
11.04.2 Unpaid Rent at Award. 23
11.04.3 Future Rent. 23
11.04.4 Other Amounts. 23
SECTION 11.05 TERMS DEFINED. 23
11.05.1 Worth at the Time of Award. 23
11.05.2 Time of Award. 23
SECTION 11.06 CITY’S DEFAULT. 23
SECTION 11.07 INDEMNIFICATION UNAFFECTED. 24
SECTION 11.08 NO TERMINATION. 24
SECTION 11.09 TERMINATION AND ENTRY. 24
SECTION 11.10 LIEN FOR RENT. 24
SECTION 11.11 WAIVER. 25
SECTION 11.12 SURRENDER. 25
SECTION 11.13 CUMULATIVE REMEDIES. 25
ARTICLE XII COMMON AREAS: USE, MAINTENANCE, AND COSTS 26 SECTION 12.01 DEFINITIONS. 26
SECTION 12.02 CONCESSIONAIRE’S RIGHT TO USE; CONCESSIONAIRE’S COOPERATION. 26 SECTION 12.03 CONTROL BY CITY. 26
12.03.1 Management. 26
12.03.2 Exclusive Control. 27
SECTION 12.04 PARKING. 27
ARTICLE XIII SIGNAGE 27
SECTION 13.01 USE OF SIGNAGE AND FIXUTRES …………..……………27 SECTION 13.02 PROHIBITED ACTIVITIES. 27
SECTION 13.02 MAINTENANCE. 28
ARTICLE XIV SECURITY DEPOSIT 28
ARTICLE XV MISCELLANEOUS 29
SECTION 15.01 CITY’S RIGHT OF ACCESS. 29
SECTION 15.02 NONDISCRIMINATION. 29
SECTION 15.03 TRANSFER OF CITY’S INTEREST. 29
SECTION 15.04 SEVERABILITY. 29
SECTION 15.05 TIME OF ESSENCE. 29
SECTION 15.06 AGREEMENT NOT SUBJECT TO LEVY. 29
SECTION 15.07 NON-PARTNERSHIP. 30
SECTION 15.08 BROKERS. 30
SECTION 15.09 QUITCLAIM. 30
SECTION 15.10 SAFETY AND HEALTH. 30
SECTION 15.11 ATTORNEY’S FEES. 30
SECTION 15.12 CAPTIONS. 31
SECTION 15.13 INUREMENT. 31
SECTION 15.14 CHOICE OF LAW. 31
SECTION 15.15 GENDER; NUMBER. 31
SECTION 15.16 FORCE MAJEURE. 31
SECTION 15.17 NO REPRESENTATIONS OR WARRANTIES BY CITY. 31 SECTION 15.18 EFFECTIVENESS OF AGREEMENT. 32
SECTION 15.19 INCORPORATION OF PRIOR AGREEMENT AGREEMENTS. 32 SECTION 15.20 NOTICES. 32
SECTION 15.21 SERVICE OF PROCESS. 32
SECTION 15.22 COUNTERPARTS. 33
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