HomeMy WebLinkAboutAGMT - Ruby's Diner • •
LEASE
(Seal Beach Pier Restaurant)
THIS LEASE (this "Lease ") is made and entered into as of the 23 day of September,
2002, by and between the CITY OF SEAL BEACH, a municipal corporation ( "City "), as
landlord, and RUBY'S DINER, INC., a California corporation, as tenant ( "Tenant ") (collectively,
the "Parties" and each individually, a "Party ").
RECITALS
A. City is the owner of the Seal Beach Fishing Pier, located at 900 Ocean Avenue, Seal
Beach, California ( "the Pier "), subject to the terms of a Tidelands Lease ( "the Tidelands
Lease "), dated June 22, 1967, recorded August 17, 1967 at Book 8345, Page 376, of
Official Records of Orange County, California, and a Lease and Operating Agreement
( "the Operating Agreement "), dated December 12, 1983, recorded February 14, 1984,
as Document No. 84- 063426 of said Official Records. In addition, City's use of the Pier
is subject to Agreement Number 83- 114- 84 -09 -A, dated June 6, 1984, with the State of
California, acting through the State Coastal Conservancy ( "the 1984 Conservancy
Agreement ") and Agreement Number 84- 060- 84 -09A, dated May 30, 1985, with the
State of California, acting through the State Coastal Conservancy ( "the 1985
Conservancy Agreement ").
B. Tenant desires to sublease portions of the Pier from City for the purpose of operating a
combination sit -down, casual food - service restaurant, with a concession and associated
retail operations.
C. City is willing to sublease portions of the Pier to Tenant for such purposes in
accordance with the terms and conditions set forth in this Lease.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, City
and Tenant hereby agree as follows:
1. DEFINITIONS
1.1 General Definitions
As used in this Lease, the following words and phrases shall have the following
meanings:
a) Alteration - Any addition or change to or modification of, the Premises made
by Tenant including, without limitation, fixtures.
b) Authorized Representative - Any officer, agent, employee, or independent
contractor retained or employed, or independent contractor retained or
employed by either Party, acting within authority given him by that Party.
c) City - City of Seal Beach, a municipal corporation, and any Successor to City
in the Premises.
d) Damage - Injury, deterioration, or loss to a Person or property caused by
another's Person's acts or omissions. Damage includes death.
e) Damages - A monetary compensation or indemnity that can be recovered by
any Person who has suffered damage to his person, property, or rights
through another's act or omission.
f) Expiration - The coming to an end of the time specified in this Lease as its
duration, including any extension of the Term resulting from the exercise of an
option to extend.
g) Good condition - The good physical condition of the Premises and each
portion of the Premises, including, without limitation, signs, windows, show
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windows, and appurtenances. "In good condition" means first - class, neat,
clean and broom - clean, and is equivalent to similar phrases referring to
physical adequacy in appearance and for use.
h) Hold harmless - To defend and indemnify from all liability, losses, penalties,
Damages, costs, expenses (including, without limitation, attorneys' fees),
causes of action, claims, or judgments arising out of or related to any
Damage to any Person or property.
i) Law - Any judicial decision, statute, constitution, ordinance, resolution,
regulation, rule, administrative order, or other requirement of any municipal,
county, state, federal, or other government agency or authority having
jurisdiction over the Parties, the Premises and /or the Pier, in effect either at
the time of execution of this Lease or at any time during the Term, including,
without limitation, any regulation or order of a quasi - official entity or body
(e.g., board of fire examiners or public utilities).
j) Maintenance - Repairs, replacement, repainting, and cleaning.
k) Person - One or more human beings, or legal entities or other artificial
persons including, without limitation, partnerships, corporations, trusts,
estates, associations, and any combination of human beings and legal
entities.
I) Premises - Those portions of the Pier designated on Exhibit A attached
hereto, consisting of approximately 2,769 square feet, along with the trade
fixtures and personal property described in Section 2.
m) Provision - Any term, agreement, covenant, condition, clause, qualification,
restriction, reservation, or other stipulation in this Lease that defines or
otherwise controls, establishes, or limits the performance required or
permitted by either Party hereunder.
n) Rent - Minimum Monthly Rent, Minimum Annual Rent, Percentage Rent,
taxes, insurance, utilities, and any other charges payable by Tenant under the
Provisions of this Lease.
o) Successor - Assignee, transferee, personal representative, heir or other
Person succeeding lawfully, and pursuant to the provisions of this Lease, to
the rights or obligations of either Party.
p) Tenant — RUBY'S DINER, INC., a California corporation, and any Successor
hereunder.
q) Term - The period of time during which Tenant has a right to occupy the
Premises.
r) Termination - The ending of the Term, for any reason whatsoever, prior to
Expiration.
1.2 Other Definitions
The following additional terms are defined in the following sections of this Lease:
a) ABC 5.2 (e)
b) Adjustment Date 5.1 (b)
c) Gross Sales 5.2 (d)
d) Lease Year 5.2 (c)
e) Minimum Annual Rent 5.1 (a)
f) Minimum Monthly Rent 5.1(a)
g) 1984 Conservancy Agreement Recital A
h) 1985 Conservancy Agreement Recital A
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i) Operating A reement Reci ai A
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j) Percentage Rent 5.2 (a)
k) Percentage Rent Period 5.2 (c)
I) Pier Recital A
m) Tidelands Lease Recital A
2. LEASE OF PREMISES
City leases the Premises to Tenant and Tenant leases the Premises from City for
the Term and upon the terms and conditions set forth in this Lease.
3. TERM
3.1 Term of Lease - The original term of this Lease shall be ten (10) years,
commencing on the earlier of (1) the date Tenant first opens the Premises for
business, or (2) November 1, 2002, and ending on October 31, 2012 (the
"Original Term "). When the date of commencement of the Original Term has
been ascertained, the Parties shall immediately confirm such date in writing.
Prior to the commencement of the Original Term, Tenant may enter the Premises
for the purpose of remodeling and preparing to open the Premises for business.
Such entry shall be subject to all of the Provisions of this Lease.
3.2 Option(s) to Extend Term of Lease - Unless this Lease is terminated prior to
expiration of the Original Term, Tenant shall have the privilege and option of
extending the term of this Lease (the "Option ") for two (2) additional successive
terms of five (5) years each (each, an "Extension Term "), to commence upon
expiration of the Original Term or the immediately preceding Extension Term,
only so long as Tenant is not in default or breach hereunder at the time of
exercise of such option and at the time such Extension Term commences.
Tenant shall exercise such option by delivering written notice thereof to City no
later than six (6) months, but no earlier than nine (9) months, prior to the
expiration of the Original Term or the immediately preceding Extension Term,
sent in the manner and to the address of City set forth in Section 18 hereof. If for
any reason Tenant fails to timely and properly exercise an Option as aforesaid,
then that Option (and the other Option, if not yet exercised) shall automatically
terminate. The Options may only be exercised consecutively. In addition, in the
event of termination of this Lease for any reason, then each Option, if not yet
exercised, or if exercised but not yet commenced, shall automatically terminate.
The terms and conditions of this Lease shall be the same during each Extension
Term as during the Original Term, except as provided otherwise herein. The
"Term" as used herein shall be deemed to include the Original Term and the
Extension Term(s), if any.
3.3 In the event that Tenant timely and validly exercises the Option, the Minimum
Annual Rent payable during such Extension Term(s) shall be increased pursuant
to the provisions in Sections 5.1 (b) and 5.2 of this Lease.
4. INTENTIONALLY OMITTED. .
5. RENT - All Rent shall be paid to City at the address to which notices to City are required
to be given hereunder.
5.1 Minimum Annual Rent
(a) Minimum Annual Rent - Tenant shall pay to City as minimum annual rent
( "Minimum Annual Rent "), without deduction, setoff, prior notice, or
demand, the sum of Seventy -Two Thousand Dollars ($72,000.00). One -
twelfth of the Minimum Annual Rent, or Six Thousand Dollars ($6,000.00)
( "Minimum Monthly Rent "), shall be payable monthly in advance on the
first day of each month of the Term, without deduction, setoff, prior notice,
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or demand. Minimum Monthly Rent for any a�iial month shall be prorated
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at the rate of 1130 of the Minimum Monthly Rent per day.
(b) Periodic Adjustment - Minimum Annual Rent shall be adjusted as of
November 1, 2003, and November 1 of every year thereafter ( "the
Adjustment Date "), so that the adjusted Minimum Annual Rent shall be
equal to the greater of (i) the then current Minimum Annual Rent, or (ii)
ninety percent (90 %) of the average rent (including both Minimum Annual
Rent and Percentage Rent as defined in Section 5.2(a)) payable by
Tenant for the Lease Year (as defined in Section 5.2(c)) immediately
preceding the Adjustment Date.
5.2 Percentage Rent
(a) Percentage Rent - In addition to Minimum Monthly Rent, Tenant shall pay
to City a sum ( "Percentage Rent ") equal to the difference of (i) Six Percent
(6 %) of Tenant's Gross Sales (as defined in Section 5.2(d)) plus Seven
Percent (7 %) of Tenant's Gross Sales of Alcoholic Beverages (as defined
in Section 5.2(e)) during each month, less (ii) the aggregate Minimum
Monthly Rent paid during that month. If the calculation results in a
negative amount, the negative shall be applied against future months
positive calculations.
(b) Method of Payment - Percentage Rent shall be computed each
Percentage Rent Period (as defined in Section 5.2(c)). On or before the
fifteenth (15 day of the calendar month immediately following the close
of each Percentage Rent Period, Tenant shall pay to City the amount by
which the sums computed as a percentage of Tenant's Gross Sales and of
Tenant's Gross Sales of Alcoholic Beverages during the Percentage Rent
Period exceeds the Minimum Monthly Rent that Tenant is required to pay
during the Percentage Rent Period pursuant to Section 5.1.
Within thirty (30) days after the end of each Lease Year, City shall
determine the amount of Percentage Rent based on the Gross Sales of
Tenant and Tenant's Gross Sales of Alcoholic Beverages during such
Lease Year and the sums paid to City as Minimum Annual Rent and
Percentage Rent during such Lease Year.
If Tenant has paid to City an amount of Percentage Rent greater than the
Percentage Rent it is in fact obligated to pay for the Lease Year pursuant
to Section 5.2(a), Tenant shall be entitled to a refund of such excess
amount within thirty (30) days. If Tenant has paid to City an amount of
Percentage Rent less than the Percentage Rent that Tenant is required to
pay pursuant to Section 5.2(a), Tenant shall immediately pay the
difference to City.
(c) Percentage Rent Period; Lease Year Defined - A "Percentage Rent _
Period" is a monthly period.
A "Lease Year" is a one (1) year period ending October 31, except that if
the Term commences prior to November 1, 2002, the first Lease Year
shall be the shorter period ending October 31, 2002.
(d) Gross Sales - The term "Gross Sales" as used herein shall mean:
(i) The entire amount of the actual sales price, whether wholesale or
retail, and whether wholly or partly for cash or on credit or in
exchange for any other product, commodity, service, commercial
paper or forbearance, of all sales of merchandise and all charges
made by Tenant or its employees or others acting on its behalf for
the rendition of services of any kind whatsoever, made from or
upon the Premises.
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(ii) All other receipts of all business conducted in, at or from the
Premises, including all deposits not refunded to purchasers,
proceeds; receipts or any revenue derived whatsoever from the use
of the Premises.
(iii) Orders taken in or from the Premises although said orders may be
filled elsewhere, and sales by any subtenant in or from the
Premises, and all without credit to Tenant for uncollected or
uncollectible credit accounts.
(iv) Gross receipts of all coin operating devices which may be placed in
the Premises by Tenant or under any rent concession, percentage
or other arrangement including, without limitation, such devices as
pinball machines, vending machines, video games and similar
devices (but excluding revenue from telephones that are collected
by a public utility), except that nothing herein shall be construed as
City's consent to the use of same in the Premises; and
(v) All other revenues or receipts generated by or arising from the use
of the Premises.
(e) Gross Sales of Alcoholic Beverages - The term "Gross Sales of Alcoholic
Beverages" as used herein shall mean the entire amount of the actual
sales price, whether wholesale or retail, and whether wholly or partly for
cash or on credit or in exchange for any other product, commodity, e
service, commercial paper or forbearance, of all sales of beer, wine,
liquor, mixed drinks or other alcoholic beverages, as defined in California
Business and Professions Code 23004 or the regulations of the California
Department of Alcoholic Beverage Control ( "ABC "), made from or upon
the Premises.
(f) Exclusions from Gross Sales - Gross Sales shall not include, or if included
there shall be deducted (but only to the extent they have been included),
the following:
(i) Sales, and use taxes, so- called luxury taxes, consumers' excise
taxes, gross receipts taxes, and other similar taxes now or in the
future imposed on the sale of merchandise or services, but only if :
such taxes are added to the selling price and collected from °
customers.
(ii) The transfer or exchange of merchandise between the stores or
businesses of Tenant, if any, where such transfers or exchanges of
merchandise are made solely for the convenient operation of a
business owned and operated by Tenant and not for the purpose of
consummating a prior sale made in, to or from the Premises or for
the purpose of depriving City of the benefit of a sale which
otherwise would be made in, at or from the Premises.
(iii) The amount of returns to shippers or manufacturers.
(iv) The amount of any cash or credit refund made upon any sale
where the merchandise sold or some part thereof is thereafter
returned by the purchaser. Each sale upon installment or credit
shall be treated as a sale for the full price in the month during which
such sale shall be made, irrespective of the time when Tenant shall
receive payment (whether in full or partial) from its customers.
(v) Sales of trade fixtures or personal property to be replaced by
Tenant which are not stock in trade.
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(vi) Sums and credits received in the settlement of claims for loss of or
damage to merchandise.
(vii) Gift certificates, or similar vouchers, until such time as they shall
have been converted into a sale by redemption.
(viii) Meals provided for officers or employees without charge.
(ix) Meals, goods, or products provided for promotional or publicity
purposes without charge.
(g) Statements of Gross Sales and Gross Sales of Alcoholic Beverages -
Tenant shall furnish to City statements of Tenant's Gross Sales and Gross
Sales of Alcoholic Beverages within fifteen (15) days after the end of each
Percentage Rent Period, and annual statements of Gross Sales and
Gross Sales of Alcoholic Beverages within thirty (30) days after the end of
each Lease Year. Each statement shall be signed and certified to be
correct by an officer or employee of Tenant.
(h) Sales and Charges - All sales and charges shall be recorded by means of
cash registers which display to the customers the amount of the
transaction certifying the amounts recorded. The register shall be
equipped with devices which log in daily sales totals, and which shall
record on tapes the transaction numbers and sales details. At the end of
each day the tape will record the total sales for that day and an officer or
employee of Tenant will verify the total Gross Sales and Gross Sales of
Alcoholic Beverages each day by signing his or her name to the tape.
(i) Production of Statement, Records and Audit - Tenant agrees to make
available for inspection by City at the Premises or at Tenant's corporate
headquarters a full, permanent and accurate set of books and records of
all sales of merchandise and revenue derived from the conduct of
business in, at or from the Premises from which Gross Sales and Gross
Sales of Alcoholic Beverages can be determined and all supporting
records, including without limitation all federal, state and local tax returns.
Tenant shall also furnish the City copies of its quarterly California sales
and use tax returns at the time each is filed with the State of California.
Tenant further agrees that it will keep, retain and preserve for at least
three (3) years beyond the Expiration or Termination of this Lease all
records, books, bankbooks or duplicate deposit books and other evidence
of Gross Sales and Gross Sales of Alcoholic Beverages.
City shall have the right, upon reasonable notice during the Term and
within three (3) years after Expiration or Termination of this Lease to
inspect and audit Tenant's books and records and to make transcripts
therefrom to verify the payment due City. Such audit may be made at any
time during normal business hours. Tenant shall cooperate fully with City
• in making the inspection. City shall also be entitled, once during each
Lease Year and once after Expiration or Termination of this Lease, to an
independent audit of Tenant's books of account, records, cash receipts,
and other pertinent data to determine Tenant's Gross Sales and Gross
Sales of Alcoholic Beverages, by a certified public accountant to be
designated by City. The audit shall be limited to the determination of
Gross Sales and Gross Sales of Alcoholic Beverages and shall be
conducted during usual business hours.
If the audit shows that there is a deficiency in the payment of any
Percentage Rent, the deficiency shall become immediately due and
payable. City shall bear its costs of the audit unless the audit shows that
Tenant understated Gross Sales or Gross Sales of Alcoholic Beverages
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by four percent (4%) or more, in which case Tenant shall pay all City's
costs of the audit.
City shall keep any information gained from such statements, inspections
or audits confidential and shall not disclose it other than to carry out the
purposes of this Lease, except that City shall be permitted to divulge the
contents of any statements in connection with any financing arrangements
or sale of City's interest in the Premises and /or the Pier or if required by
applicable Law.
(h) Acceptance - The acceptance by City of any monies paid to City by
Tenant as Percentage Rent for the Premises, as shown by any statement
furnished by Tenant, shall not be construed as an admission of the
accuracy of said statement, or of the sufficiency of the amount of said
Percentage Rent payment, but City shall be entitled to review the
adequacy of such payment as hereinabove set forth.
5.3 Late Fees — Any payment of Rent payable by Tenant hereunder which is not paid
within ten (10) days of its due date shall be subject to a late charge equal to ten
percent (10 %) of the overdue amount.
5.4 Additional Rent - Upon execution of this Lease by both parties, Tenant agrees to
pay the City as consideration for this Lease and to be considered as additional
Rent hereunder, the sum of Two Hundred Thousand Dollars ($200,000.00) in the
form of a cashier's check.
6. BUSINESS PURPOSES AND USE OF PREMISES
6.1 Business Purposes - The Premises are to be used by Tenant for the operation of
a combination sit -down, casual food service restaurant, together with a
concession and associated retail operations utilizing the existing concession
service window, all in substantial accordance with Tenant's Proposal to City for
operation of the Premises, which Proposal is attached hereto as Exhibit D and is
incorporated herein by this reference, and for no other purpose whatsoever
without the prior written consent of City, which consent may be withheld in the
sole and absolute discretion of City.
6.2 Operation of Premises - Tenant shall operate and manage the Premises in a
first -class manner, comparable to other first -class businesses providing similar
facilities. In operating and managing the Premises, at all times Tenant shall at a
minimum: (a) clean all food preparation equipment daily; (b) clean all walls,
ceilings and floors so as to keep them free of grease and dirt; (c) wash windows
regularly; (d) keep counter tops and tables clean and dry at all times; (e) remove
all dirty dishes from public view and stack them out of sight; (f) dispose of grease
in containers, and not pour grease down drains; (g) use for service to patrons
only spotless and dry utensils, dishes, cups, bowls and glasses; (h) keep the
Premises clean and sanitary at all times; (i) prevent any offensive refuse matter
and any substances constituting an unnecessary, unreasonable or unlawful fire
hazard and material detrimental to the public health from being or accumulating
in the Premises; (j) use Tenant's best efforts to permit no intoxicated person or
persons, profane or indecent language, or boisterous or loud conduct in or about
the Premises, which efforts shall include without limitation calling upon the aid of
peace officers when necessary or appropriate to assist in maintaining peaceful
conditions; (k) not knowingly permit the use or possession of narcotics or other
controlled substances on the Premises; (I) not sell or serve imitation, adulterated,
misbranded or impure items; (m) not use fillers or dilutants in food items; and (n)
not reduce the size of standard servings of manufactured or processed food
products.
Tenant shall not use or permit the use of the Premises in any manner which (x)
creates a nuisance or an unreasonable annoyance (including, without limitation,
live, recorded or broadcast entertainment or the use of loudspeakers or sound or
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Tight apparatus) to persons outside the Premises, (y) violates any Law, or (z) is
determined by City in its reasonable discretion to be an objectionable or
inappropriate use of public property.
Each employee involved in the sale of food and refreshments shall wear at all
times while on the Premises a clean uniform.
6.4 Continuous Operation - Weather permitting, Tenant shall keep the Premises in
operation and open to the public for business each calendar day of the year,
except Thanksgiving Day, Christmas Day, and three (3) other days per year
approved in writing by City. Unless otherwise approved in writing by City (which
approval may be revoked at any time), the restaurant shall serve breakfast, lunch
and dinner daily, with hours of operation during the months of June, July and
August from 6:30 a.m. to 10:00 p.m. and during the other months from 7:30 a.m.
to 9:00 p.m. The concession shall serve hot dogs, hamburgers and other snack
foods daily, with hours of operation during the months of June, July and August
from 9:00 a.m. to 6:00 p.m. and during the other months from 11:00 a.m. to 4:00
p.m.; provided, however, that if the restaurant is not open for breakfast (as may
be permitted by City under the preceding sentence), the concession shall provide
breakfast service, and the minimum hours of operation of the concession shall
commence at 6:30 a.m. The public rest rooms shall be open to the public during
all hours that either the restaurant or the concession is open.
6.5 Advertising Display - Tenant may, at its own expense, place such signs in or
upon the Premises as it deems necessary, provided the written consent of City
Manager or his /her designee as to the type, design and method of installation is
first obtained which consent may be withheld in City Manager's or his /her
designee's sole and absolute discretion. Such signs shall remain the property of
Tenant and shall be removed by Tenant upon Termination or Expiration of this
Lease at Tenant's expense, and any damage caused by such removal shall be
repaired at Tenant's expense.
6.6 Independent Contractor - City shall have no interest in the business of Tenant. It
is understood and agreed that Tenant operates the said business as an
independent contractor. Tenant shall be allowed to pursue a Conditional Use
Permit to serve beer and wine only on the Premises.
6.7 Alcoholic Beverages - Except as permitted by this Section 6.7, Tenant shall not
sell or serve alcoholic beverages at, on or from the Premises. If Tenant at any
time holds a beer and wine license for the Premises from ABC, Tenant may with
the consent of City engage in the type of sales permitted under that license.
After City gives its consent, such consent may be withdrawn at any time by the
City Council of City, provided that Tenant is first given a reasonable opportunity
to address the City Council on the subject, either orally or in writing. Tenant
acknowledges that the grant or withdrawal of City's consent under this section is
a matter of contract law created by this Lease, and is in addition to and not in lieu
of any powers of City as a governmental body; consequently, the decision of the
City Council to withdraw the City's consent under this section shall be conclusive.
Tenant waives any rights Tenant may at any time have to contest the decision of
the City Council or to contend that the sale of alcoholic beverages on the Pier is
under the exclusive jurisdiction of ABC or any other agency.
Subject to the foregoing Provisions of this Section 6.7, City hereby consents to
the sale of alcoholic beverages inside the restaurant portion of the Premises
pursuant to a beer and wine license. In addition to all other requirements of this
Lease, Tenant shall comply with all of the rules and regulations of ABC and
comply with all of the terms and conditions of any license granted by ABC.
6.8 No Distress Sales - No auction, fire, bankruptcy, "going out of business" or other
distress sales of any nature may be conducted on the Premises and /or the Pier
without the prior written consent of City, which consent may be withheld in the
sole and absolute discretion of City.
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6.9 Parking and Delivery Access - Tenant shall be entitled to the exclusive use of
three parking spaces, clearly designated and reserved for use by Tenant's
employees, to be provided by City in City's parking facility at the base of the Pier.
City shall have the right to control parking by Tenant's employees by any
reasonable means nd Tenant shall cause its employees to comply with the
procedures and regulations established by City from time to time to control such
parking.
Tenant acknowledges that neither Tenant nor Tenant's suppliers may operate
vehicles on the Pier without the prior written consent of City. City hereby
consents to Tenant's use of a mini pick -up truck or comparable vehicle on the
Pier for delivery purposes and hauling of trash, so long as not more than one
such vehicle is on the Pier at any time.
6.10 Public Rest Rooms - Notwithstanding anything in this Lease to the contrary,
Tenant shall make available to the general public (as well as restaurant patrons)
the existing rest rooms which are a part of the Premises. Tenant shall keep the
public rest rooms in good order and repair and in a clean and sanitary condition.
7. TAXES, LICENSES AND OTHER OBLIGATIONS
7.1 Payment of Taxes - As additional Rent, Tenant shall pay directly to the
appropriate taxing authorities any possessory interest taxes and all property
taxes on personal property located on the Premises and /or the Pier, levied or
assessed upon or against the Premises and /or the Pier or against Tenant during
the Term. Such taxes shall be paid at least ten (10) days before delinquency and
before any fine, interest or penalty shall become due or be imposed by operation
of law for their non - payment, and, upon request, Tenant shall promptly furnish to
the City satisfactory evidence establishing such payment.
7.2 Payment of Obligations - Tenant shall promptly pay, when due, any and all bills,
debts, liabilities and obligations incurred in connection with Tenant's occupation
and use of the Premises and /or the Pier.
7.3 Challenge to Taxes - Any provision herein contained to the contrary
notwithstanding, Tenant shall have the right in good faith, at its sole cost and
expense, to contest the amount or legality of any said possessory interest taxes
on or attributable to the Premises or to Tenant's occupation and use of the
Premises and /or the Pier, including the right to apply for reduction thereof. In the
event that Tenant seeks a reduction or contests the amount and /or validity of
such taxes, such action by Tenant shall not constitute a default so long as
Tenant complies with the Provisions of this Section 7.3.
City shall not be required to join in any proceeding or contest brought by Tenant
unless the provisions of any Law require that the proceeding or contest be
brought by or in the name of City or any owner of the Premises. In that case City
shall join in the proceeding or contest or permit it to be brought in City's name so
long as City is not required to bear any cost. Tenant, upon final determination of
the proceeding or contest, shall immediately pay or discharge any decision or
judgment rendered, together with all costs, charges, interest, and penalties
incidental to the decisions or judgment.
If Tenant does not pay the taxes when due and Tenant seeks a reduction or
contests them as provided in this Section 7.3, before the commencement of the
proceeding or contest Tenant shall furnish to City a surety bond issued by an
insurance company qualified to do business in California. The amount of the
bond shall equal one hundred fifty percent (150 %) of the total amount of taxes in
dispute. The bond shall hold City and the Premises (and /or the Pier, if
applicable) harmless from any damage arising out of the proceeding or contest
and shall insure the payment of any judgment that may be rendered.
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8. UTILITIES AND SERVICES •
Tenant shall make all arrangements for and pay for all utilities furnished to or used on
the Premises, including without limitation, gas, electricity, water, refuse removal,
telephone service and janitorial service, and for all connection charges. Tenant shall be
responsible for annual inspections of the gas line and ongoing routine maintenance of
that line.
Tenant shall keep the Premises free and clean of rubbish and litter and shall deposit
accumulated rubbish and litter in containers approved by City. Tenant shall place such
containers in close proximity to the Premises and shall move the containers at
appropriate times to locations at the base of the Pier or off the Pier so that the
containers can be emptied by Tenant's refuse collection service.
9. ALTERATIONS
Tenant agrees to improve and remodel the structure and interior of the Premises in the
amount of Four Hundred Thousand Dollars ($400,000.00) to a first class quality facility,
based on the estimated budget for building improvements, tenant improvements and
equipment set forth in Exhibit B attached hereto and incorporated herein by this
reference, and in compliance with the terms and conditions outlined in Exhibit C
attached hereto and incorporated herein by this reference ( "Conditions of
Construction ").
Tenant shall not make any Alterations, other than non - structural Alterations costing not
more than Twenty -Five Thousand Dollars ($25,000.00), to the Premises or the Pier
without the prior written consent of City Manager or his /her designee, which consent
may be withheld in City Manager's or his /her designee's sole and absolute discretion.
In granting or withholding its consent to the proposed Alterations by Tenant, City may:
(a) consider the views of the public regarding the proposed improvements; (b) require
as a condition of such approval that Tenant agree to amendments to this Lease,
including without limitation amendments increasing the amount of Rent payable under
this Lease if the proposed Alterations would increase the floor area of the structures on
the Premises; and (c) require Tenant to provide at Tenant's expense appropriate
engineering and feasibility studies regarding the structural integrity of the Pier and the
Premises. In constructing any Alterations, Tenant shall comply with the Conditions of
Construction set forth in Exhibit C.
All work shall be performed in a good and workmanlike manner, shall substantially
comply with the plans and specifications submitted to City and shall comply with all
applicable governmental permits, laws, ordinances and regulations.
Tenant shall pay all costs for construction done by it or caused to be done by it on the
Premises as permitted or required by this Lease. Tenant shall keep the Premises and
the Pier free and clear of all mechanics' liens resulting from construction done by or for
Tenant.
Tenant shall indemnify, defend, protect and hold City and its officers, directors,
councilmembers, agents, employees and representatives harmless from and against all
liability and loss and Damages of any type arising out of work performed on the
Premises by Tenant, together with actual attorneys' fees and all costs and expenses
reasonably incurred by City, including but not limited to fees incurred by City's legal
counsel of its own choice, in negotiating, settling, defending or otherwise protecting
against such claims.
Any Alterations made shall remain on and be surrendered with the Premises upon
Expiration or Termination of the Term, except that City may elect within thirty (30) days
after Expiration or Termination of the Term to require Tenant to remove any Alterations
that Tenant has made to or on the Premises. If City so elects, Tenant at its cost shall
restore the Premises to the condition designated by City in its election, before the last
day of the Term, or within thirty (30) days after notice of election is given, whichever is
later.
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Notwithstanding anything herein to the contrary, prior to Expiration or within fifteen (15)
days after Termination of this Lease, Tenant may remove any moveable partitions,
machinery, equipment and trade fixtures previously installed by Tenant (other than
equipment supplied by City), provided that Tenant repairs any damage to the Premises
occasioned by such removal.
•
10. MAINTENANCE OF PREMISES
10.1 Maintenance and Repair by Tenant - Tenant agrees that it shall, at its cost,
during the Term of this Lease, keep the Premises in good condition and repair.
In the event Tenant fails to commence making necessary repairs within seventy -
two (72) hours after receipt of notice from City that such repairs are necessary,
City may make such repairs or cause such repairs to be made, and charge the
cost of said repairs to Tenant. The cost of such repairs shall be payable as
additional Rent pursuant to Section 15.2(e).
All furnishings, equipment, facilities, improvements, alterations, attachments and
appurtenances not provided by City, but required for the proposed business
operation, including all kitchen equipment and interior furnishings, shall be
maintained in good condition and repair by Tenant at its cost.
10.2 Maintenance and Repair of Pier - City agrees, at its expense, to keep the Pier in
good order and repair. City shall repair, maintain and replace pier pilings and the
understructure of the Pier and breakwater. To the extent City does not so repair
or maintain and replace pier pilings or the understructure and the breakwater and
in the event the failure thereof materially affects the habitable and useful
condition of the Premises and results in the inability of Tenant to cause the
Premises to produce a fair and reasonable economic return in connection with
Tenant's business operation conducted therein, Tenant may, at its option, on
account of such failure to repair, maintain or replace, terminate this Lease on
thirty (30) days' written notice, provided that such failure shall persist for an
unreasonable time after written notice of the need of such Maintenance is given
to City by Tenant. There shall be no allowance to Tenant for a diminution of
rental value, and no liability on the part of City by reason of inconvenience,
annoyance or injury to business arising from the performance of any
Maintenance in or to any portion of the Pier or the Premises.
City shall not be responsible for any loss suffered by Tenant as a result of
malfunctioning of any equipment or facility provided by City.
10.3 Entry by City - City and its Authorized Representatives shall have the right to
enter the Premises at all times, to examine the same and to make such repairs
as City may deem reasonably necessary, and City shall be allowed to take all
material into and upon the Premises that may be required therefor and may for
that purpose erect scaffolding and other necessary structures where reasonably
required by the character of the work to be performed, provided that the business
of Tenant shall be interfered with as little as is reasonably practicable, all without
the same constituting an eviction of Tenant in whole or in part. Minimum Annual
Rent shall abate during the period of repairs by City by the proportion that the
unusable part of the Premises bears to the whole thereof; provided, however,
there shall be no Rental abatement during the period of repairs by City
undertaken as a result of Tenant's failure to make such repairs as required
pursuant to Section 10.1 hereof.
City and its Authorized Representatives are expressly granted permission to
inspect the Premises at any reasonable time for Maintenance or other purposes.
Upon execution of this Lease, Tenant shall provide City with a key to the
Premises, for the City to keep throughout the Term of this Lease. If Tenant shall
not be personally present to open and permit an entry into the Premises, at any
time, when for any reason an entry therein shall be necessary or permissible
hereunder, City or its Authorized Representatives may enter the same by a
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master ke or forcibly enter the same, without ma t renderin City s y, may i I o cby e e rendering y or such
Authorized Representatives liable therefor, and without in any manner affecting
the Provisions of this Lease. During such entry City or its Authorized
Representatives shall accord reasonable care to Tenant's property. Any entry to
the Premises obtained by City by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an eviction of Tenant from the
Premises or any portion thereof.
11. INDEMNITY AND EXCULPATION; INSURANCE
11.1 Exculpation of City - City shall not be liable to Tenant for any damage to Tenant
or Tenant's property from any cause other than the negligent, intentional or willful
acts of City or its Authorized Representatives. Tenant waives all claims against
City for damage to Person or property arising for any reason other than the
negligent, intentional or willful acts of City or its Authorized Representatives.
11.2 Indemnity - Tenant shall indemnify, defend, protect and hold City and its officers,
directors, councilmembers, agents, employees and representatives harmless
from and against any liability or loss (including without limitation reasonable
attorneys' fees and other costs of defense) for Damage to any Person or property
caused by or arising out of Tenant's breach of this Lease or the acts or omissions
to act of Tenant or Tenant's Authorized Representatives in connection with
Tenant's use of the Premises and /or the Pier, or by failure of Tenant to fulfill its
obligations hereunder. City shall indemnify and hold Tenant harmless from any
liability or loss (including without limitation reasonable attorneys' fees and other
costs of defense) for Damage to any Person or property caused by the failure of
City to fulfill its obligations hereunder, except as specified otherwise herein. A
party's obligation under this paragraph to indemnify and hold the other party
harmless shall be limited to the sum that exceeds the amount of insurance
proceeds, if any, received by the party being indemnified.
11.3 Public Liability, Auto Liability and Property Damage Insurance - Tenant at its cost
shall maintain throughout the Term comprehensive general liability and property
damage insurance with liability limits of not less than Two Million Dollars
($2,000,000.00) combined single limit, and property damage limits of not less
than One Million Dollars ($1,000,000.00) per occurrence, insuring against all
liability of Tenant and its Authorized Representatives arising out of and in
connection with Tenant's use or occupancy of the Premises. Tenant at its cost
shall also maintain throughout the Term automobile liability insurance with a
minimum limit of One Million Dollars ($1,000,000) per accident, insuring against
all liability of Tenant and its Authorized Representatives arising out of and in
connection with Tenant's use or occupancy of the Premises.
All public liability insurance and property damage insurance shall insure
performance by Tenant of the indemnity provisions of Section 11.2 hereof;
provided, however, notwithstanding the foregoing or anything to the contrary
contained herein, the indemnification provided in Section 11.2 shall not be
construed or interpreted as in any way restricting, limiting or modifying Tenant's
insurance or other obligations under this Lease and is independent of Tenant's
insurance or other obligations hereunder. Tenant's compliance with the
insurance requirements and other obligations under this Lease shall not in any
way restrict, limit or modify Tenant's indemnification obligations under this Lease.
The City and the State of California shall be named as additional insureds, and
the policy shall contain cross - liability endorsements.
11.4 Increase in Amount of Public Liability and Property Damage Insurance - Not
more frequently than every three (3) years, if, in the opinion of the insurance
broker or consultant retained by City or City's Risk Manager, the amount of public
liability and property damage insurance coverage at that time is not adequate,
Tenant shall increase the insurance coverage as reasonably required by City's
insurance broker or consultant or City's Risk Manager.
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11.5 Fire Insurance on Building and Other Improvements - Tenant at its cost shall
maintain throughout the Term, on the buildings and other improvements that are
or become a part of the Premises, a policy of standard "all risk" fire and extended
coverage insurance, with vandalism and malicious mischief endorsements, to the
extent of at least full replacement value.
The insurance policy shall be issued in the names of City and Tenant, as their
interests appear. The insurance policy shall provide that any proceeds shall be
made payable to City and Tenant jointly.
11.6 Determination of Replacement Value - The "full replacement value" of the
buildings and other improvements to be insured under Section 11.5 shall be
determined by the company issuing the insurance policy at the time the policy is
initially obtained. Not more frequently than once each year, either Party shall
have the right to notify the other Party that it elects to have the replacement value
redetermined by an insurance company. The redetermination shall be made
promptly and in accordance with the rules and practices of the Board of Fire
Underwriters, or a like board recognized and generally accepted by the insurance
company, and each Party shall be promptly notified of the results by the
company. The insurance policy shall be adjusted according to the
redetermination.
11.7 Loss of Rent Insurance - Tenant at its cost shall maintain loss of rent insurance
throughout the Term, insuring that the Minimum Monthly Rent will be paid to City
for a period up to six (6) months in the event that the Premises and /or the Pier
are destroyed or rendered inaccessible by a risk insured against by a policy of
standard "all risk" fire and extended coverage insurance, with vandalism and
malicious mischief endorsements.
11.8 Worker's Compensation Insurance - Tenant shall maintain Worker's
Compensation Insurance in force during the Term of this Lease in an amount and
with coverage satisfactory to meet all requirements of the Labor Code of the
State of California. A certificate evidencing such insurance coverage shall be
filed with the City Clerk on or before the commencement of the Lease Term and
prior to any entry upon the Premises.
11.9 Waiver of Subrogation - The Parties release each other, and their respective
Authorized Representatives, from any claims for Damage to any Person or to the
Premises and to the fixtures, personal property, and Alterations either in or on
the Premises that are caused by or result from risks insured against under any
insurance policies carried by the parties and in force at the time of any such
Damage.
Each party shall cause each insurance policy obtained by it to provide that the
insurance company waives all rights of recovery by way of subrogation against
either party in connection with any Damage covered by any policy. Neither party
shall be liable to the other for any Damage caused by fire or any of the risks
insured against under any insurance policy required by this Lease. If any
insurance policy cannot be obtained with a waiver of subrogation, or is obtainable
only by the payment of an additional premium charge above that charged by
insurance companies issuing policies without waiver of subrogation, the party
undertaking to obtain the insurance shall notify the other party of this fact. The
other party shall have a period of twenty (20) days after receiving the notice
either to place the insurance with a company that is reasonably satisfactory to
the other Party and that will carry the insurance with a waiver of subrogation, or
to agree to pay the additional premium if such a policy is obtainable at additional
cost. If the insurance cannot be obtained or the party in whose favor a waiver of
subrogation is desired refuses to pay the additional premium charged, the other
party is relieved of the obligation to obtain a waiver of subrogation rights with
respect to the particular insurance involved.
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11.10 Other Insurance Matters - All the insurance required under this Lease shall:
(a) Be issued by insurance companies authorized to do business in the State
of California, acceptable to City;
(b) Be issued as a primary policy.
(c) Be noncontributing with any insurance that may be carried by City;
(d) Contain an endorsement requiring at least thirty (30) days' written notice
from the insurance company to both parties before cancellation or change
in the coverage, scope, or amount of the policy.
Each policy, or a certificate of the policy, together with evidence of payment of
premiums, shall be deposited with City before Tenant's entry on the Premises,
and on renewal of the policy not Tess than thirty (30) days before expiration of the
term of the policy. At the election of City upon the Expiration of the Term, City
shall reimburse Tenant pro rata for all prepaid premiums on insurance required to
be maintained by Tenant, and Tenant shall assign all of Tenant's right, title, and
interest in that insurance to City; in the event of earlier Termination of this Lease
City shall, at its election, have the right to require Tenant to make such
assignment to City upon City's pro rata reimbursement to Tenant for prepaid
premiums. The provisions of the preceding sentence shall be applicable only to
the extent that Tenant's insurance carrier permits assignment to be made to City.
Tenant shall use its best efforts to secure the prior consent of the carriers to such
assignment whenever Tenant obtains, renews or replaces any of the insurance
required by this Section 11.
Either Party may effect for its own account any insurance not required under this
Lease.
12. CASUALTY DAMAGE
12.1 Destruction of Premises - If the Premises are totally or partially destroyed,
rendering the Premises totally or partially inaccessible or unusable, Tenant shall
restore the Premises to substantially the same condition as immediately prior to
such destruction (including all trade fixtures, personal property, improvements
and Alterations as are installed by Tenant, which shall be replaced by Tenant at
its expense). Such destruction shall not terminate this Lease. If the cost of the
restoration exceeds the amount of any available insurance proceeds, Tenant can
elect to terminate this Lease by giving notice of such election to City within thirty
(30) days after determining that the restoration cost will exceed the insurance
proceeds. Upon such termination, the insurance proceeds shall be paid to City.
12.2 Replacement of Tenant's Property - In the event of the damage or destruction of
improvements located on the Premises not giving rise to a Termination of this
Lease, Tenant shall, at its own expense, replace and repair all of Tenant's trade
fixtures, equipment, machinery, furnishings, furniture and inventory as soon as
possible to permit the prompt continuation of Tenant's business at the Premises.
12.3 Abatement of Rent - In the event of damage or destruction of the Premises and
the Lease is not terminated, Tenant shall continue to utilize the Premises for the
operation of its business to the extent it may be practicable to do so. Minimum
Monthly Rent shall abate as provided in Section 13.2 from the time any damage
or destruction occurs until the earlier of (a) the completion of restoration of the
improvements on the Premises, or (b) six (6) months after the date of the
damage or destruction.
13. DAMAGE OR DESTRUCTION OF THE PIER
13.1 Destruction of Pier - In the event that the Pier, or any part thereof, is damaged or
destroyed by fire or any other cause, so as to render the Premises inaccessible
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or untenantable, and such damage or destruction carrot reasonably be repaired
within six (6) months after the date of the casualty, City shall have the right to
either (a) terminate this Lease by giving Tenant written notice thereof, which shall
be given, if at all, within ninety (90) days following the date of the casualty, in
which case this Lease shall be terminated as of the date of the casualty, or (b)
give written notice to Tenant within ninety (90) days following the date of the
casualty of City's intention to repair such damage as soon as reasonably possible
at City's expense, in which event this Lease shall continue in full force and effect;
however, Minimum Monthly Rent shall be abated in accordance with the
procedures set forth in Section 13.2 for the period from the occurrence of the
damage to the completion of the repairs.
If City agrees to repair or restore the Pier under the provisions of this Section and
shall not commence such repair or restoration within one hundred twenty (120)
days after giving Tenant written notice of its intention or agreement to repair,
Tenant may, at Tenant's option, cancel and terminate this Lease by giving City
written notice of Tenant's election to do so at any time prior to the
commencement of such repair or restoration. In such event, this Lease shall
terminate as of the date of such notice from Tenant to City, and City shall have
no liability under this Lease.
13.2 Abatement of Rent - If abatement of Minimum Monthly Rent is required under
this Lease, the amount of abatement shall be determined in accordance with the
procedures set forth in this Section 13.2.
Unless the Damage or destruction is caused by the negligence or intentional act
or omission of Tenant or any of Tenant's agents, employees, invitees or
customers, Damage or destruction of all or a portion of the Premises and /or the
Pier shall result in an abatement of the Minimum Monthly Rent by that proportion
that the unusable part of the Premises bears to the entire Premises.
14. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING AND
ENCUMBERING
14.1 Prohibition of Assignment - The Parties acknowledge that City is entering into
this Lease in reliance upon the experience and abilities of Tenant and its
principals. Consequently, Tenant shall not voluntarily assign or encumber its
interest in this Lease or in the Premises, or sublease all or any part of the
Premises, or allow any other person or entity (except Tenant's Authorized
Representatives) to occupy or use all or any part of the Premises without the
prior written consent of City, which consent shall not be unreasonably withheld.
Any assignment, encumbrance, or sublease without such consent shall be
voidable and, at City's election, shall constitute a default by Tenant hereunder.
City's consent to any assignment, subletting or other transfer is subject to the
Tenant providing City with evidence reasonably satisfactory to City that the
proposed transferee has suitable financial strength, experience and character for
the operation and control of the Premises, and the use of the Premises by the
proposed transferee is consistent with that specified herein.
Any dissolution, merger, consolidation, reorganization of Tenant, or the sale or
other transfer resulting in a transfer of a controlling percentage of the capital
stock of Tenant shall be deemed a voluntary assignment. The phrase
"controlling percentage" means the ownership of, or the right to vote, stock
possessing at least 50% of the total combined voting power of all classes of
Tenant's capital stock issued, outstanding, and entitled to vote for the election of
directors.
14.2 Continuing Effect - City's consent to any assignment, encumbrance or sublease
shall not relieve Tenant from its obligations or liabilities under this Lease nor act
as a waiver of the requirement that such consent be obtained to any subsequent
assignment, encumbrance or sublease.
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15. DEFAULT
15.1 Default by Tenant - The occurrence of any one or more of the following events
shall constitute a material default and breach of this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant.
(b) The failure of Tenant to make any payment of Rent or any other payment
required by this Lease, as and when due, when such failure shall continue
for a period of seven (7) days after written notice thereof from City to
Tenant.
(c) Except as specified in Section 15.1 (b), the failure of Tenant to observe or
perform any of the covenants, conditions or provisions of this Lease to be
observed or performed by Tenant where such failure shall continue for a
period of twenty (20) days after written notice thereof from City to Tenant;
provided, however, that if the nature of Tenant's default is such that more
than twenty (20) days are reasonably required for its cure, then Tenant
shall not be deemed to be in default if Tenant commences such cure
within said twenty (20) day period and thereafter diligently prosecutes
such cure to completion.
(d) The making by Tenant of any general arrangement or assignment for the
benefit of creditors.
(e) Tenant becomes a "debtor" as defined in 11 U.S.C. Section 101 or any
successor statute thereto (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty (60) days).
(f) The appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such appointment is not discharged within
sixty (60) days.
(g) The attachment, execution or the judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where such seizure is not discharged within sixty (60) days.
15.2 Remedies
(a) Cumulative Nature of Remedies - If any default by Tenant shall continue
uncured, following notice of default as required by this Lease, for the
period, if any, applicable to the default under the applicable provision of
this Lease, City shall have the remedies described in this Section 15.2 in
addition to all other rights and remedies provided by law or equity, to
which City may resort cumulatively or in the alternative.
(b) Reentry without Termination — City has the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect after
lessee's breach and abandonment and recover rent as it becomes due, if
lessee has right to sublet or assign, subject only to reasonable limitations).
City may at City's election reenter the Premises, and, without terminating
this Lease, at any time and from time to time relet the Premises or any
part or parts of them for the account and in the name of Tenant or
otherwise. City may at City's election eject all Persons or eject some and
not others or eject none. City shall apply all rents from reletting as follows:
first, to the payment of actual expenses (including attorneys' fees or
brokers' commissions or both) paid or incurred by or on behalf of City in
recovering possession, placing the Premises in good condition, and
preparing or altering the Premises for reletting; second, to the reasonable
expense of securing new subtenants; and third, to the fulfillment of
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Tenants covenants to the end of the Term.eny reletting may be for the
remainder of the Term or for a longer or shorter period. City may execute
any leases made under this provision either in City's name or in Tenant's
name and shall be entitled to all rents from the use, operation or
occupancy of the Premises. Tenant shall nevertheless pay to City on the
dates specified in this Lease the equivalent of all sums required of Tenant
under this Lease, plus City's expenses, less the proceeds of any reletting
or attornment. No act by or on behalf of City under this provision shall
constitute a Termination of this Lease unless City gives Tenant specific
written notice of Termination.
(c) Termination - City may at City's election terminate this Lease by giving
Tenant written notice of Termination. In the event City terminates this
Lease, City may recover possession of the Premises (which Tenant shall
surrender and vacate upon demand) and remove all Persons and property
therefrom, and City shall be entitled to recover as damages all of the
following:
(i) The worth at the time of the award of any unpaid Rent or other
charges which have been earned at the time of Termination;
(ii) The worth at the time of the award of the amount by which the
unpaid Rent and other charges which would have been earned
after Termination until the time of the award exceeds the amount of
the loss of such rental or other charges that Tenant proves could
have been reasonably avoided;
(iii) The worth at the time of the award of the amount by which the
unpaid Rent and other charges for the balance of the Term after the
time of the award exceeds the amount of the loss of such rental
and other charges that Tenant proves could have been reasonably
avoided;
(iv) Any other amount necessary to compensate City for the detriment
proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be
likely to result therefrom; and
(v) At City's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable
California Law.
As used in Section 15.2(c)(i) and (ii) above, the "worth at the time of
the award" shall be computed by allowing interest at the rate of
twelve percent (12 %) per annum. As used in Section 15.2(c)(iii)
above, the "worth at the time of the award" shall be computed by
discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award, plus one
percent (1 %). The amount recoverable by City pursuant to Section
15.2(c)(iv) above shall include, but is not limited to, any costs or
expenses incurred by City in maintaining or preserving the
Premises after such default, preparing the Premises for reletting to
a new tenant, accomplishing any repairs or alterations to the
Premises for the purpose of such reletting, rectifying any damage
thereto occasioned by the act or omission of Tenant, or any other
costs necessary or appropriate to relet the Premises.
(d) Use of Tenant's Personal Property - City may at City's election use
Tenant's personal property and trade fixtures located on, about or
appurtenant to the Premises or any of such property and fixtures without
compensation and without liability for use or damage, and /or store them
for the account and at the cost of Tenant. The election of one remedy for
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IP
any one item shall not foreclose an electio� of any other remedy for
Y Y Y
another item or for the same item at a later time.
(e) City's Right to Cure Tenant's Default - At any time after Tenant fails to
perform any covenant or Provision of this Lease, City may, but is not
obligated to, cure such failure at Tenant's cost. If City at any time, by
reason of such failure by Tenant, pays any sum or does any act, the sum
paid by City plus the reasonable cost of performing such act shall be due
as additional Rent immediately at the time the sum is paid or the act
performed. No such payment or act shall constitute a waiver of default or
of any remedy for default or render City liable for any Toss or damage
resulting from any such act.
(f) Waiver of Rights - Tenant hereby waives any right of redemption or relief
from forfeiture under California Code of Civil Procedure Sections 1174 or
1179, or under any other present or future law, in the event Tenant is
evicted or City takes possession of the Premises by reason of any default
by Tenant hereunder.
15.3 Default by City - City shall not be in default unless City fails to perform obligations
required of City under this Lease within a reasonable time, but in no event later
than thirty (30) days after written notice by Tenant to City in writing, specifying
wherein City has failed to perform such obligation; provided, however, that if the
nature of City's obligation is such that more than thirty (30) days are required for
performance, then City shall not be in default if City commences performance
within such thirty (30) day period and thereafter diligently prosecutes the same to
completion. In no event shall Tenant have the right to terminate this Lease as a
result of City's default, and Tenant's remedies shall be limited to Damages and /or
an injunction.
16. CONDEMNATION
16.1 In the event proceedings are taken pursuant to an exercise of the power of
eminent domain by any lawful authority to condemn or otherwise acquire in
excess of ten percent (10 %) of the floor area within the Premises and in the
further event that the Premises will no longer be suitable for the permitted uses
hereunder as a result of such taking, Tenant shall have the option, by written
notice to City at any time prior to the date of the taking by the condemning
authority, to terminate this Lease effective as of the date of possession. In the
event of such Termination, the Minimum Monthly Rent shall be prorated to the
date of Termination and any unearned rent shall be refunded to Tenant. Tenant
shall not grant a right of entry to any condemnor without the prior written consent
of City.
16.2 Should Tenant not elect to so terminate this Lease or should any such taking not
be sufficient to allow such option to terminate, this Lease shall terminate as to the
portion of the Premises taken upon the date which possession of said portion is
taken, but this Lease shall continue in full force and effect as to the remainder of
the Premises. Tenant shall, in the event of a taking of any portion of the
Premises, be entitled to a reduction in the Minimum Monthly Rent thereafter
required to be paid, such that the reduced Minimum Monthly Rent will be in the
same proportion to the Minimum Monthly Rent theretofore required to be paid
that the fair rental value of the Premises following such a taking and restoration
and repair by City bears to the fair rental value of the Premises immediately prior
to such taking.
16.3 In the event that an award is made for an entire or partial taking or for damage to
the Premises or any interest therein in any action in direct or inverse
condemnation or in the event of a taking under the power of eminent domain, the
parties hereto agree that their respective rights to the award or compensation
paid shall be as follows:
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(a) City portion of the award received for the taking of
Y sh be entitled to that p
the real property within the Premises, including all buildings and other
improvements to which City is entitled upon Expiration or Termination of
this Lease, and for severance damages.
' (b) Tenant shall be entitled to any award that may be made for the taking of or
injury to Tenant's business and profits (excluding any "bonus value"
attributable to this Lease) or on account of any cost or loss Tenant may
sustain in the removal of its merchandise, fixtures, equipment and
furnishings from the Premises.
(c) Any interest payable on the total award shall be divided between City and
Tenant in the same ratio as are the awards granted to them pursuant to
the other provisions of this Section.
17. SUBJECT TO TIDELANDS LEASE, OPERATING AGREEMENT AND
CONSERVANCY AGREEMENTS.
This Lease is subject and subordinate to the provisions of the Tidelands Lease, the
Operating Agreement, the 1984 Conservancy Agreement and the 1985 Conservancy
Agreement. Tenant shall not take any action which would cause City to be in violation
of any Provisions of those agreements. If either the Tidelands Lease or the Operating
Agreement terminates and this Lease terminates as a result of such termination (other
than due to the fault of one of the Parties), the Parties shall be released from all
liabilities and obligations under this Lease.
18. NOTICES
Any notice, demand, request, consent, approval or communication that either Party
desires or is required to give to the other Party hereunder shall be in writing and shall be
delivered to the addresses set forth below, and shall be deemed given as of (a) the time
of hand delivery, (b) one (1) business day after deposit with a nationally recognized
overnight courier service, or (c) three (3) days after deposit into the United States mail,
postage prepaid, by registered or certified mail, return receipt requested. Unless notice
of a different address has been given in accordance with this Section, all such notices
shall be addressed as follows:
If to City, to: CITY OF SEAL BEACH
' 211 Eighth Street
Seal Beach, California 90740
Attention: City Manager
With a copy to: BANCAP COMMERCIAL REAL ESTATE SERVICES
6265 E. Second Street, Suite 102
Long Beach, CA 90803
Attention: R. Whitney Latimer
If to Tenant, to: RUBY'S DINER, INC.
660 Newport Center Drive
Suite 850
Newport Beach, CA 92660
Attention: Douglas S. Cavanaugh, President & CEO
19. ATTORNEYS' FEES
If either party commences an action against the other party arising out of or in
connection with this Lease, the prevailing party shall be entitled to have and recover
from the losing party reasonable attorneys' fees and costs of suit as awarded by the
court.
19
• •
20. SURRENDER OF PREMISES; HOLDING OVER
20.1 Duty to Surrender - At the Expiration or earlier Termination of the Term, Tenant
shall surrender to City the possession of the Premises. Surrender or removal of
Alterations, fixtures and trade fixtures shall be as directed in the Provisions of this
Lease on ownership of Alterations, fixtures and trade fixtures at Expiration or
Termination. Tenant shall leave the surrendered property and any other property
in good and broom -clean condition, reasonable wear and tear excepted. All
property that Tenant is not required to surrender but that Tenant does abandon
shall, at City's election, become City's property at Expiration or Termination.
20.2 Holding Over - If Tenant, with City's consent, remains in possession of the
Premises after Expiration or Termination of the Term, or after the date in any
notice given by City to Tenant terminating this Lease, such possession by Tenant
shall be deemed to be a month -to -month tenancy terminable on thirty (30) days'
notice given at any time by either Party. All Provisions of this Lease shall apply
to the month -to -month tenancy except the provisions of Section 3 and Section
5.1, and the Minimum Monthly Rent payable by Tenant shall increase by one
• hundred fifty percent (150 %) during such holdover period.
21. WAIVER
The waiver by City or Tenant of any breach by the other party of any term, covenant, or
condition herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant, or condition herein contained. The
subsequent acceptance of Rent hereunder by City shall not be deemed to be a waiver
of any preceding breach by Tenant of any term, covenant, or condition of this Lease
other than the failure to pay the particular Rent so accepted, regardless of City's
knowledge of such preceding breach at the time of acceptance of such Rent.
22. PARTIAL INVALIDITY
If any term or Provision of this Lease or the application thereof to any Person or
circumstance shall to any extent be held invalid or unenforceable by a court of
competent jurisdiction, the remainder of this Lease, or the application of such term or
Provision to Persons or circumstances other than those as to which it is held to be
invalid or unenforceable, shall not be affected thereby, and each term and Provision of
• this Lease shall be valid and be enforced as written to the fullest extent permitted by
Law.
23. GOVERNING LAW
This Lease shall be governed by the Law of the State of California.
Neither City's execution of this Lease nor any consent or approval given by City
hereunder in its capacity as landlord shall waive, abridge, impair or otherwise affect
City's powers and duties as a governmental body. Any requirements under this Lease
that Tenant obtain consents or approvals of City are in addition to and not in lieu of any
requirements of Law that Tenant obtain approvals or permits. However, City shall
attempt to coordinate its procedures for giving contractual and governmental approvals
so that Tenant's requests and applications are not unreasonably denied or delayed.
24. ENTIRE AGREEMENT; MODIFICATION
This Lease contains the entire agreement between the parties with respect to the
subject matter hereof. No verbal agreement or implied covenant shall be held to vary
the provisions hereof, any statements, law or custom to the contrary notwithstanding.
No promise, representation, warranty, or covenant not included in this Lease has been
or is relied on by either party. Each party has relied on its own inspection of the
Premises and examination of this Lease, the counsel of its own advisors, and the
warranties, representations, and covenants in this Lease itself. The failure or refusal of
20
either art to ins ec�the Premises, to read this Lease or�ther documents, or to obtain
P Y p ,
legal or other advice relevant to this transaction constitutes a waiver of any objection,
contention, or claim that might have been based on such reading, inspection, or advice.
No Provision of this Lease may be amended or varied except by an agreement in
writing signed by the parties hereto or their respective Successors.
25. TIME OF ESSENCE
Time is of the essence with respect to the performance of every Provision of this Lease
in which time of performance is a factor.
26. SUCCESSORS
Subject to the Provisions of this Lease on assignment and subletting, each and all of the
covenants and conditions of this Lease shall be binding on and shall inure to the benefit
of the heirs, Successors, executors, administrators, assigns, and personal
representatives of the respective parties.
27. BROKERS
Each Party warrants to and for the benefit of the other that it has had no dealings with
any real estate broker or other agent (attorneys excepted) in connection with the
negotiation or making of this Lease other than Bancap Commercial Real Estate
Services.
28. TABLE OF CONTENTS; HEADINGS
The table of contents of this Lease and the captions of the various sections of this
Lease are for convenience and ease of reference only and do not define, limit, augment,
or describe the scope, content, or intent of this Lease or of any part or parts of this
Lease.
29. GENDER; NUMBER
The neuter gender includes the feminine and masculine, the masculine includes the
feminine and neuter, and the feminine includes the masculine and the neuter, and each
includes corporation, partnership, or other legal entity whenever the context so requires.
The singular number includes the plural whenever the context so requires.
30. EXHIBITS
All exhibits to which reference is made in this Lease are hereby incorporated by
reference. Any reference to "this Lease" includes matters incorporated by reference.
31. COUNTERPARTS
This Lease may be executed simultaneously in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument. For purposes of this Lease, facsimile signatures shall be deemed to be
original signatures, and shall be'followed by the immediate overnight delivery of original
signature pages.
21
•
• IN WITNESS WHEREOF, the Parties hereto have executed this Lease as of the date
first written above.
CITY OF SEAL BEACH,
a California municipal corporation
( "City ")
By: U U. Mayor
ATTE -T:
46 O
O r ne Yeo, City Clerk
APPROVED AS TO FORM:
Richards, Watson & Gershon
By: G � " / ga seie
Quinn M. Barrow, City Attorney
RUBY'S DINER, INC.,
a California corporation
( "Tenant ")
By: X91
Douglas S. Cavanaugh
President and CEO
By:
Ralph L. Kosmides
Chief Financial Officer
22
• •
EXHIBITS
A Premises
B Estimated Budget
C Conditions of Construction
D Proposal and Menu
23
• EXHIBIT A •
Site Plan of Premises -
Ocean Avenue
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• •
EXHIBIT B
Equipment and Fixtures
Tenant shall use existing fixtures and equipment located on the Premises relating to
the "Ruby's Diner Concept" and commit new capital to improve the existing structure
located on the Premises, update equipment where necessary, and provide interior
improvements and signage necessary for the "Ruby's Diner Concept ", in the
aggregate amount of Four Hundred Thousand Dollars ($400,000.00).
Tenant shall comply with all conditions of construction set forth in Exhibit C.
25
• •
EXHIBIT C
Conditions of Construction
Before any work of construction, Alteration or repair is commenced on the Premises
and /or the Pier, and before any building materials have been delivered to the Premises
by Tenant or under Tenant's authority, Tenant shall comply with all the following
conditions or procure City's written waiver of the condition or conditions:
1. Deliver to City for City's approval two (2) sets of preliminary construction plans
and specifications prepared by an architect or engineer licensed to practice in
California, sufficient to enable potential contractors and subcontractors to make
reasonably accurate bid estimates and to enable City to make an informed
judgment about the design and quality of construction and about any effect on
the reversion. With the plans, Tenant shall deliver to City the certificate of the
Person who prepared the plans and specifications certifying that Tenant has fully
paid for them or waiving payment and waiving any right to a Lien for preparing
them and permitting City to use the plans without payment for purposes relevant
to and consistent with this Lease.
City's approval or disapproval shall be communicated in the manner provided for
notices, and disapproval shall be accompanied by specification of the grounds for
disapproval. Tenant shall not deliver working drawings to any governmental
body for a building permit until preliminary plans are approved as in this
paragraph.
Tenant shall prepare final working plans and specifications substantially
conforming to preliminary plans previously approved by City, shall submit them to
the appropriate governmental agencies for approval and shall deliver to City one
complete set as approved by the governmental agencies. Changes from the
preliminary plans shall be considered to be within the scope of the preliminary
plans (a) if they are not substantial or if they are made to comply with
suggestions, requests or requirements of a governmental agency or official in
connection with the application for permit or approval, and (b) if they do not
depart substantially in size, utility, or value from the improvements described in
the plans and specifications theretofore submitted by Tenant to City.
2. Deliver to City the written approval of the plans and specifications by the financial
institution (if any) that shall have made the commitment for financing the
construction.
3. Notify the City of Tenant's intention to commence a work of improvement at least
twenty (20) days before commencement of any such work or delivery of any
materials in connection therewith. The notice shall specify the approximate
location and nature of the intended improvements. City shall have the right to
post and maintain on the Premises and /or the Pier any notices of
nonresponsibility provided for under applicable law, and to inspect the Premises
in relation to the construction at all reasonable times.
4. Furnish City with a true copy of Tenant's contract with the general contractor and
with evidence of the general contractor's financial condition for City's approval.
The contract shall give City the right but not the obligation to assume Tenant's
obligations and rights under that contract if Tenant should default.
City may disapprove by notice given within fifteen (15) days following delivery of
the copy of the contract. The notice shall specify the grounds for disapproval. If
Tenant elects to act as general contractor, the reference above to contract and
26
evidence shall be considered to apply to the subcontractor of each subcontract in
excess of Twenty -Five Thousand Dollars ($25,000.00).
5. Deliver to City true copies of all documents to evidence the commitment of
financing for any new construction. "Financing" includes both the construction
(or interim) financing and the take -out (also called permanent or long -term loan.
City may require by notice that no construction commence until the take -out
financing is firmly committed.
City shall have the right but not the obligation to assume Tenant's financing for
any improvements on the Premises. Tenant shall cause the Lender to execute
all documentation facilitative of this right. City's exercise of this right shall not
constitute a waiver of any other right City may have against Tenant.
6. Furnish City a bond as described below if, and promptly after, City gives notice of
demand within ten (10) days after Tenant has complied with all the foregoing
conditions of construction. The bond shall be that of a responsible surety
company, licensed to do business in California, in an amount not less than the
estimated cost of construction, and shall remain in effect until the entire cost of
the work shall have been paid in full and the new improvements shall have been
insured as provided in this Lease. The bond shall state the following:
(a) That it is conditioned to secure the completion of the proposed
construction, free from all liens and claims of contractors, subcontractors,
mechanics, laborers, and materialmen for six (6) months following
completion of construction;
(b) That the construction work shall be effected by Tenant, the general
contractor, or, on their default, the surety;
(c) That in default of such completion, such part of the amount of the bond as
shall be required to complete the work shall be paid to City as liquidated
and agreed damages for the nonperformance of Tenant's agreements, it
being agreed that the exact amount of City's damages is difficult and
impractical to ascertain; and
(d) That the surety will defend and indemnify City against all loss, cost,
damage, expense, and liability arising out of or connected with the work of
improvement.
City may, but shall not unreasonably, disapprove the bond.
7. Procure and deliver to City at Tenant's expense evidence of compliance with all
then applicable codes, ordinances, regulations, and requirements for permits and
approvals, including but not restricted to building permits, zoning and planning
requirements, and approvals from various governmental agencies and bodies
having jurisdiction.
8. Deliver to City (a) certificates of insurance evidencing coverage for "builder's
risk ", (b) evidence of worker's compensation insurance covering all Persons
employed in connection with the work and with respect to whom death or bodily
injury claims could be asserted against City or the Premises, and (c) evidence
that Tenant has paid or caused to be paid all premiums for the coverage
described above in this paragraph and any increase in premiums on insurance
provided for in the Provision on insurance, sufficient to assure maintenance of all
insurance above during the anticipated course of the work. Tenant shall
maintain, keep in force, and pay all premiums required to maintain and keep in
force all insurance above at all times during which such work is in progress.
27
1
•
• •
EXHIBIT D
Ruby's Concept
As we look forward to a new lease term on the Seal Beach pier, we are pleased to
propose a renovation to the pier facility that will bring this great landmark back up to the
Ruby's state -of -the -art standard. We are confident that the improvements will relate to
better guest satisfaction which will of course correlate to improved sales.
A proven performer in malls, on piers and other unique venues, the nationally recognized
Ruby's Diner concept serves over 10 million guests annually with our famous family
oriented fare that has won us consistent accolades in local and national publications.
The management team behind the scenes at our home office is a world class group of
seasoned industry professionals who are taking the Ruby's brand to the next level. By
this time next year, we will have over fifty restaurants in eight states. We will be
featured as the cover story in Chain Leader magazine for the month of December, 2002.
Attached is our latest menu. We think you will agree it has a wide variety of offerings to
suit almost any palate and all age groups. All of this we offer at a price affordable for
most budgets.
Again, we look forward to a shiny new Ruby's on the end of the beautiful Seal Beach
pier.
28
1 QUINN M. BARROW
CITY ATTORNEY
2 CITY OF SEAL BEACH
3 RICHARDS, WATSON & GERSHON
A Professional Corporation
4 PATRICK K. BOBKO (Bar No. 208756)
pbobko rwglaw.com
5 STEVEN L. FLOWER (Bar No. 234997)
sflower @rwglaw.com
6 355 South Grand Avenue, 40th Floor
Los Angeles, California 90071-3101
7 Telephone: 213.626.8484
Facsimile: 213.626.0078
8
Attorneys for Plaintiff
9 City of Seal Beach
10 SUPERIOR COURT OF THE STATE OF CALIFORNIA
z o 11 COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
o �
v=i ° 12
c
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u
L? z 13 THE CITY OF SEAL BEACH, a California Case No. 30-2013-00640596-CU-BC-CJC
z ° Charter City,
° 0 14 STIPULATION FOR ENTRY OF
a Plaintiff, JUDGMENT PURSUANT TO
15 v. SETTLEMENT AGREEMENT
V1 a
2 16 RUBY'S DINER, INC., a California [Exempt from filing fees pursuant to Govt. Code § 6103]
a W Corporation, and DOES 1 Through 100,
_ 17 Inclusive, [Settlement Agreement and Form of
E Judgment Enclosed Herewith]
Fla 18 Defendants.
=y! Judge: Hon. Peter Wilson
19 Dept: C-12
20
Action Filed: March 29, 2013
21 Trial Date: March 24. 2014
22 Plaintiff City of Seal Beach (the "CITY") on the one hand, and Ruby's Diner, Inc.
23 ("RUBY's") on the other, stipulate as follows:
24
25 Recitals
26 1. In December 2002 the CITY and RUBY's entered into a 10-year lease for the
27 restaurant at the end of the Seal Beach Pier (the "LEASE"). The CITY and RUBY's had a
28 business relationship until January 2013, when the LEASE expired.
STIPULATION FOR ENTRY OF JUDGMENT
S7296-0209\1690349v3.doc
1 2 One of the terms of the LEASE said: "Tenant shall use existing fixtures and
2 equipment located on the Premises relating to the `Ruby's Diner Concept' and commit new
3 capital to improve the existing structure on the Premises, update equipment where
4 necessary, and provide interior improvements and signage necessary for the `Ruby's Diner
5 Concept,' in the aggregate amount of Four Hundred Thousand Dollars ($400,000)."
6 3 At the time the LEASE expired, there was a dispute between the CITY and
7 RUBY's over certain improvements that were required to be completed under the LEASE.
8 RUBY's quit the premises in January 2013 at the end of the LEASE. RUBY's contended
9 that it had made improvements to the restaurant and the structure in an amount that satisfied
10 the terms of the Lease in the amount of$393,938.45. The CITY claimed otherwise.
Z 11 4 On March 29, 2013 the CITY filed this lawsuit against RUBY's alleging
o
_
cn 2 12 claims for breach of contract and associated claims.
LU
13 5 The PARTIES settled their differences and released each other from all
—
z
L14 claims related thereto, known or unknown, regardless of whether such claims were asserted
Q
15 by the CITY against RUBY's in this lawsuit pursuant to a Settlement Agreement, a true and
cn
° Q 16 correct copy of which is attached hereto as Exhibit A. This Court was made aware of the
u o 17 settlement and the Settlement Agreement pursuant to the Notice of Settlement and Request
E
a 18 for the Court to Retain Jurisdiction which relief was granted by the Court.
19 6. The Settlement Agreement requires, among other terms, that RUBY's pay the
20 CITY the sum of Two Hundred and Seventy Five Thousand dollars ($275,000). RUBY's
21 agreed to pay the CITY Fifty Thousand dollars ($50,000) within five business days of the
22 effective date of the Settlement Agreement, and then pay Ten Thousand dollar ($10,000)
23 monthly installments for a period of twenty-two (22) consecutive months, and one Five
24 Thousand dollar ($5,000) installment on the twenty-third month. The twenty-three monthly
25 installments shall commence on the 30th day following the effective date of the Settlement
26 Agreement, and recur on that same date thereafter until the total sum due to the CITY is
27 paid.
28 7. RUBY's has defaulted on the payments required per Section 6 of the
-2-
STIPULATION FOR ENTRY OF JUDGMENT
S7296-0209\1690349v3.aoc
1 Settlement Agreement, triggering the CITY's right to file this Stipulation for Entry of
2 Judgment.
3
4 Stipulation
5 1. The parties stipulate that judgment shall be entered in the CITY's favor in the
6 amount of Five Hundred Seventy Thousand dollars ($570,000) minus any amounts
7 previously paid, together with costs of suit taxed by the Court at $ A form of
8 Judgment is attached hereto as Exhibit B.
9
10 Dated: March 19, 2014 QUINN M. BARROW
CITY ATTORNEY
Z o 11 CITY OF SEAL BEACH
o �
v=ia 12 RICHARDS, WATSON & GERSHON
w o A Professional Corporation
13 PATRICK K. BOBKO
STEVEN L. FLOWER
° " 14
15
(r) By: I .a.rd
16 4
P • 1' CK . :0B I' I
ce
w tto eys for Plaintiff
F
2 17 ity of Seal Beach
ay 18 Dated: March Z/, 2014 CITY OF SEAL BEACH
19
20 By: .Aloi
LLER 'A. DEATON
21 Mayor
22
23
•
24
25
26
27 [SIGNATURES FOLLOW]
28
-3-
STIPULATION FOR ENTRY OF JUDGMENT
S7296-0209\1690349v3.doc
1 Dated: March /?,2014 LOBEL,NEUE& I ILL,LLP
�
2 WILLIAM N.LOBEL
DERRICK ERICO
3
4 By:
CK TALE 0
5 Attorneys for Defendant
•
Ruby's Diner, Inc.
6
7 ,
•
8 Dated; March ,2014 RUBY'S DINER,INC.
9
By: 62117
10 ', DOUGLAS CAVANAUGH
President
11
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28
-4-
SIMULATION FOR ENTRY OF JUDGMENT
37296-020911690349v3.doc
1 SETTLEMENT AND MUTUAL RELEASE AGREEMENT
2
3 1. Introduction
4 This Settlement and Mutual Release Agreement ("AGREEMENT") is made and entered
5 into on as of the EFFECTIVE DATE, by and among the City of Seal Beach (the "CITY"), on the
6 one hand, and Ruby's Diner, Inc., ("RUBY's"), on the other hand. This Agreement is made with
7 reference to the following facts:
8
9 2. Definitions
10 For the purposes of this AGREEMENT only, the following capitalized terms shall have the
o 11 following meanings:
o �
=
v) a 12 2.1 "ACTION"
W O
13 "ACTION" shall mean the complaint filed by the CITY against RUBY's for breach of
z °
N o w 14 contract and associated claims captioned City of Seal Beach v. Ruby's Diner, Inc. (OCSC No. 30-
a
3 15 2013-00640596-CU-BC-CJC).
v
N 16 2.2 "CLAIM" or"CLAIMS"
aW
0 17 "CLAIM" or "CLAIMS" shall mean any past, present or future, fixed or contingent,
E
1 18 matured or immature, liquidated or unliquidated, claims, cross-claims, liabilities, rights, demands,
Ord
19 notices, inquiries, damages, requests, suits, lawsuits, costs, costs of suit, attorneys' fees, experts'
20 fees, actions, administrative proceedings, causes of action or orders, of any nature, character, type
21 or description, whenever and however occurring, whether at law or in equity, and whether
22 sounding in tort, contract, nuisance, trespass, negligence, strict liability or any statutory, common
23 law or other cause of action directly or indirectly related to the CITY defined herein below.
24 2.3 "CITY"
25 "CITY" shall collectively mean the City of Seal Beach, and the Directors, Officers, Agents,
26 Employees, Successors, Heirs, Lessees, Assigns, and Attorneys of the City.
27
28
S7296-0209\1690262v1.doc
1 ; 2.4 "EFFECTIVE DATE"
2 `EFFECTIVE DATE"shall mean t1}e e-e€the-last-sigeature-neuessary aaexecute this-—
3 L AK■\ l 0, o?G i y
4 2.5 "INCIDENT"
5 "INCIDENT"shall mean anything relating or regarding the dispute over the LEASE for the
6 Seal Beach City Pier between the CITY and RUBY's.
7 2.6 "LEASE"
8 "LEASE"shall refer to the 10-year lease between the CITY and RUBY's entitled"City of
9 Seal Beach Lease Agreement by and between City of Seal Beach and Ruby's Diner,Inc."that was
10 made and entered into on September 23,2002.
11 2.7 "PARTY"or"PARTIES"
cSn a 12 "PARTY"or"PARTIES"shall mean the CITY and RUBY's.
oc oe
W 8
LD 4 13
z
o 14 3. Recitals
IS 3.1 In December 2002 the City and Ruby's entered into a 10-year lease for the
aQ 16 restaurant at the end of the Seal Beach Pier(the"LEASE"). The City and Ruby's had a business
E
17 relationship until January 2013,when the Lease expired.
ix
'Of 18 3.2 One of the terms of the Lease said: "Tenant shall use existing fixtures and
19 I equipment located on the Premises relating to the `Ruby's Diner Concept' and commit new capital
20 to improve the existing structure on the Premises,update equipment where necessary,and provide
21 interior improvements and signage necessary for the`Ruby's Diner Concept,' in the aggregate
22 amount of Four Hundred Thousand Dollars($400,000)."
23 3.3 At the time the LEASE expired,there was a dispute between the CITY and RUBY's
24 over certain improvements that were required to be completed under the LEASE. RUBY's quit the
25 premises in January 2013 at the end of the LEASE. RUBY's contended that it had made
26 improvements to the restaurant and the structure in an amount that satisfied the terms of the Lease
27 in the amount of$393,938.45. The CITY claimed otherwise.
28 ///
-2-
57296-020911690262v1.dnc
1 3.4 On March 29, 2013 the CITY filed this ACTION against RUBY's alleging claims
2 for breach of contract and associated claims.
3 3.5 The PARTIES now desire to settle their differences and to release each other from
4 all claims related thereto, known or unknown, regardless of whether such claims were asserted in
5 the ACTION.
6
7 NOW THEREFORE, in consideration for the mutual covenants and agreements contained
8 in this AGREEMENT, and for good and valuable consideration, the receipt and adequacy of which
9 is hereby acknowledged, the parties hereby agree as follows:
10
11 4. Payment of Two Hundred and Seventy-five Thousand Dollars and no cents
o �
v=i 12 ($275,000) in Settlement of All Claims
� a
W oV
? z 13 4.1 RUBY's agrees to pay the CITY Two Hundred and Seventy-five Thousand dollars
z °
0 14 in settlement of all CLAIMS as described herein. The payment shall be made as follows:
< a-
1 5 4.1.1 RUBY's shall pay Fifty Thousand dollars ($50,000) by check to the "City of
° t 16 Seal Beach" not later than five (5) days following the EFFECTIVE DATE of this AGREEMENT.
¢ W
V 17 4.1.2 RUBY's shall pay Ten Thousand dollars ($10,000) by check to the "City of
ail! 18 Seal Beach" on or before the 30th day following the EFFECTIVE DATE of this AGREEMENT,
19 and shall pay Ten Thousand dollars to the CITY on that same date monthly for twenty-two (22)
20 consecutive months thereafter. On the twenty-third month following the EFFECTIVE DATE of
21 this AGREEMENT, RUBY's shall pay the CITY Five Thousand dollars ($5,000).
22
23 5. Ruby's Payment of Two Hundred and Seventy-five Thousand Dollars Shall be
24 Secured by a Stipulated Judgment in the City's Favor
25 5.1 The payment of the SETTLEMENT upon the terms set forth in Section 4, above,
26 shall be secured by RUBY's execution of a stipulated judgment in favor of the CITY in the amount
27 of Five Hundred and Seventy Thousand dollars ($570,000) in the form attached as Exhibit "A" (the
28
-3-
57296-0209\1690262v1.doc
1 "Stipulated Judgment") and hereby incorporated by reference into this AGREEMENT. Ruby's
2 shall execute the Stipulated Judgment and deliver it to the Seal Beach City Attorney concurrent
3 with the execution of this AGREEMENT.
4 5.2 The CITY shall hold the Stipulated Judgment without filing it with the Court so long
5 as RUBY's shall timely make the payments of all sums due under Section 4.1.2 herein. Upon
6 payment of all such sums, the CITY will return the Stipulated Judgment to RUBY's or to RUBY's
7 Counsel as directed by RUBY's.
8 5.3 If any payment is not received by the CITY within 5 business days of the date in
9 which it is due, the City Attorney will give written notice to RUBY's that payment has not been
10 received. Notice shall be delivered by certified mail to RUBY's Counsel at the following address:
o 11 William Lobel, Esq.
o 2- Lobel, Neue & Till LLP
vi 2 12 840 Newport Center Drive, Suite 750
— Z
13 Newport Beach, CA 92660;
z
oN w 14 and to RUBY's to the following two addressees:
Q
15 Ruby's Diner, Inc.
557 Wald Street, Irving, CA 92618
° 16 Attn: Doug Cavanaugh
¢ W
u 17 Ruby's Diner, Inc.
E
18 557 Wald Street, Irving, CA 92618
%vi Attn: Finance Department.
19
Should RUBY's desire to change the address for notice to its Counsel, it shall do so in writing, by
20
certified mail to Richards Watson &, Gershon, Attn: Quinn M. Barrow, 355 South Grand Ave., 40`h
21
Floor, Los Angeles, California 90071.
22
5.4 If any delinquent payment is not received within 10-days of the date written notice
23
is postmarked to RUBY's, the CITY shall be entitled to make an ex parte application to the Court
24
to have the Stipulated Judgment filed, accepted, and entered against RUBY's. Concurrent with the
25
entry of the Stipulated Judgment, the CITY shall also file a notice of partial satisfaction of
26
judgment indicating the amount of settlement payments prior to RUBY's default.
27
5.5 The entry of the Stipulated Judgment shall supersede this AGREEMENT in its
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1 entirety, and the total amount of RUBY's obligation to the CITY shall be the full amount of the
2 Stipulated Judgment less any sums previously paid. The Court shall award as costs on the
3 Stipulated Judgment reasonable attorneys' fees and costs to the CITY incurred in the ex parte
4 application for entry of the Stipulated Judgment.
5
6 6. Stipulation Regarding Installment Settlement
7 To facilitate the payment of the settlement amounts in installments, the CITY and RUBY's
8 shall submit to the Court a"Stipulation Re: Settlement" ("Settlement Stipulation"). The Settlement
9 Stipulation shall advise the Court of the Settlement and request the Court to place the matter on its
10 "Suspense Calendar" and retain jurisdiction to enforce the terms of this AGREEMENT, including
o 11 without limitation, the entry of the Stipulated Judgment. Should the Court refuse to accept the
v) ° 12 Settlement Stipulation according to its terms, RUBY's shall have 14 days to provide the CITY's
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15 same terms of this Agreement as the Stipulation for Judgment. After such Confession of Judgment
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2 , 16 is received by the CITY's counsel, the CITY shall dismiss the ACTION without prejudice.
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r 18 7. Release and Dismissal Concurrent with Full Payment
19 7.1 In consideration of this AGREEMENT and other good and sufficient consideration,
20 and except for the obligations created by this AGREEMENT, upon the date that RUBY's has paid
21 in full all of the sums set forth in Section 4 above and according to the schedule therein, the
22 releases put forth in the following section 8 shall become effective.
23 7.2 Within five (5) business days of RUBY's final payment under Section 4, the CITY
24 shall file with the Court a dismissal with prejudice of the ACTION.
25
26 8. Release of All Claims.
27 8.1 Except for any specific obligation of the parties set forth in and established by this
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1 AGREEMENT, which shall not be released hereby, RUBY's and the CITY each for and on behalf
2 of themselves, and each of their officers, directors, employees, predecessors, successors, assigns,
3 representatives and attorneys, do hereby fully and forever remise, release and discharge each and
4 all of the other parties to this AGREEMENT, and each of their respective subsidiaries, affiliates
5 and/or parent corporations, companies and divisions, affiliates, partnerships, partners, successors,
6 predecessors and assigns, and each of their respective members, officers, directors, shareholders,
7 partners, employees, insurers and attorneys, of and from any and all claims, demands, agreements,
8 contracts, covenants, actions, suits, causes of action, obligations, controversies, debts, costs,
9 expenses, accounts, damages,judgments, lawsuits and liabilities of whatever kind or nature, in law,
10 equity or otherwise, whether known or unknown, liquidated or unliquidated, material or
z o 11 immaterial, occurring on or before the date of this AGREEMENT.
12 8.2 The releases stated in Section 7 above, are mutual general releases and extend to all
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20 KNOWN BY HIM/HER MUST HAVE MATERIALLY AFFECTED
21 HIS/HER SETTLEMENT WITH THE DEBTOR."
22
23 8.3 The PARTIES to this AGREEMENT acknowledge that they had the opportunity to
24 have explained to them by counsel of their choice the effect and import of the civil provisions of
25 Civil Code § 1542. The PARTIES further acknowledge and agree to these waivers of rights under
26 §1542 of the Civil Code have been separately bargained for and are essential and material terms to
27 this AGREEMENT and, without such waivers, the PARTIES would not have entered into this
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1 AGREEMENT.
2 8.4 Each PARTY to this AGREEMENT further assumes the risk of mistake of fact in
3 connection with the true facts relating to the matters described herein, and with respect to any of
4 the facts which are now unknown to them relating thereto, and agrees that this AGREEMENT shall
5 be in all respects enforceable and not subject to termination or rescission by such difference in
6 facts.
7 8.5 Each of the PARTIES represent and agree that they are the lawful owners of all
8 right, title and interest in and to any of the claims relating to or arising out of the ACTION, and
9 have not assigned or transferred, or attempted to assign or transfer, to any person or entity, any of
10 the CLAIMS relating to or arising out of the ACTION, that they have released in this
z o 11 AGREEMENT.
(A ° 12 8.6 The PARTIES stipulate that the Court retain jurisdiction over the PARTIES to
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3 15 8.7 It is the intention of the PARTIES in executing this AGREEMENT that the
} 16 AGREEMENT be effective as a full and final accord and satisfaction and mutual general release of
0 17 and from all related matters, and that the terms hereof be contractual and not a mere recital. This
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19
20 9. Entire Agreement
21 This AGREEMENT constitutes the entire AGREEMENT between the PARTIES pertaining
22 to the subject matter hereof and supersedes all prior and contemporaneous agreements and
23 understandings of the PARTIES; there are no warranties, representations or other agreements
24 between the parties except as expressly set forth herein. No supplementation, modification, waiver
25 or termination of the AGREEMENT shall be binding unless executed in writing by the party to be
26 bound thereby.
27
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1 10. Waiver of Breach
2 No waiver of any of the provisions of this AGREEMENT shall be deemed or shall
3 constitute a waiver of any of the other provisions hereof whether or not similar, nor shall such
4 waiver constitute a continuing waiver. The PARTIES hereby may amend or modify this
5 AGREEMENT in such a manner that may be agreed upon by written instrument executed by such
6 PARTIES.
7
8 11. Execution and Counterparts
9 Each of the PARTIES hereto agree that they will execute and deliver all such documents
10 and instruments as may be necessary and appropriate to effectuate the terms hereof. This
11 AGREEMENT may be executed in counterparts and, as so executed, shall constitute one
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15 The CITY and RUBY's agree to bear their own attorneys' fees and costs incurred in
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7'y 18 13. Reliance on Advice of Independent Counsel
19 All PARTIES hereto acknowledge that they have each been represented or have had the
20 opportunity to be represented by independent counsel of their own choice throughout all of the
21 negotiations which preceded execution of this AGREEMENT. This AGREEMENT shall be
22 construed fairly as to all PARTIES and not in favor of or against any of the PARTIES, regardless
23 of which of the PARTIES prepared this AGREEMENT, and the PARTIES hereby waive California
24 Civil Code § 1654.
25
26 14. Severability
27 The PARTIES agree and acknowledge that if any provision of this AGREEMENT is
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1 asserted by any PARTY or determined by a final judgment of a Court of competent jurisdiction to
2 be illegal or unenforceable, such assertion or determination shall not affect the balance of this
3 AGREEMENT, which shall remain in full force and effect as such invalid provision shall be
4 deemed severable.
5
6 15. Headings
7 The various headings of the sections and paragraphs of this AGREEMENT have been
8 inserted for convenience of reference only and do not affect the meaning or interpretation of this
9 AGREEMENT or any provision of it. All reference herein to the masculine gender shall be
10 deemed to apply equally to the feminine and neuter genders and vice-versa. All reference to the
z o 11 singular shall be deemed to apply equally to the plural and vice-versa.
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15 of California and the rights and obligations of the PARTIES hereunder shall be construed and
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r'y 18 17. Time is of the Essence
19 Time is of the essence with respect to all provisions of this AGREEMENT.
20
21 18. Signatories' Authority
22 Each of the PARTIES represent that the person signing this AGREEMENT has the
23 authority to do so on that party's behalf In addition, each of the PARTIES represent that it has the
24 authority to enter into the promises and agreements set forth in this AGREEMENT.
25
26 19. No Admission of Liability
27 The CITY and RUBY's have entered into this AGREEMENT solely to compromise and
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1 settle disputed claims. The signatories do not admit, concede, or otherwise acknowledge liability
2 in this matter. The PARTIES hereto expressly deny and disclaim any liability or that either has
3 engaged in any wrongful conduct whatsoever.
4
5 20. Confidentiality. To the extent permitted by law, the Parties agree that none shall
6 disclose the background or terms of this Agreement to any third party concerning the subject matter
7 of this Agreement or the claims made in the ACTION except to the extent that disclosure is
8 required on an as needed basis to their attorneys, accountants, tax authorities and/or governmental
9 agencies, or by applicable law or court order. If any person inquires as to the dispute, the parties
10 may say that the matter has been resolved but shall make no further comment. This confidentiality
o 11 provision shall terminate upon the CITY's right to file the Stipulated Judgment or Confession of
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17 21.1 Each PARTY and/or its Counsel shall receive a fully executed copy of this
R.15.3 18 AGREEMENT.
19
20 22. Construction and Waiver of Benefits of Doctrine of Contra Proferentum
21 The CITY and RUBY's have jointly drafted this AGREEMENT with the assistance of
22 Counsel. Hence, the CITY and RUBY's agree that the terms of this AGREEMENT, or any of
23 them, shall not be interpreted against or in factor of any PARTY on the ground that any PARTY
24 participated n the drafting of this AGREEMENT. The CITY and RUBY's accordingly expressly
25 and specifically waive the right to benefit from the application of the doctrine of contra
26 proferentum in any subsequent dispute concerning interpretation of the provisions of this
27 AGREEMENT.
28
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.
1
2 IN WITNESS WHEREOF,the parties have executed this AGREEMENT as of the date
3 :set forth below.
4i
5 DATED: ,2014 RUBY'S DINER,INC.
6
. 7 By:
DOU LAS C VANAUGH
!' 8 President
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10 I DATED:1 7 `-212014 THE CITY OF SEAL BEACH
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= z, BY: .
a 12 ERY DEATON,Mayor
13 ! City of Seal Beach
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4 15
v-) 3 DATED:Mara,. I ,2014 LOBEL,NEUE&TILL,LLP
CI 16 I William N •el
EI Derrick Tidlerico ,
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W10' 18 j By: �`r�.
%vi Counsel for Ruby s Diner,Inc.
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20
21 DATED/ CIL f'2014 RICHARDS WATSON& GERSHON,PC '
Quinn M.Barrow
•
22 Patrick K.Bobko /
23 �/
24 Quinn` M.Barrow,City •ttorney •
25 ! City of Seal Beach
26 '
27
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