HomeMy WebLinkAboutC-8966-1 - Concession Agreement - Corona del Mar State BeachCONCESSION AGREEMENT
by and between
CITY OF NEWPORT BEACH,
a California municipal corporation and charter city
"City"
and
THEJETTYCDM, LLC
a California limited liability company
"Concessionaire"
Dated OCT It 12022
CONCESSION AGREEMENT
THIS CONCESSION AGREEMENT ("Agreement") is made and entered into as of
the ] day of 0 G'f0'bLR , 2022 ("Effective Date"), by and between the CITY OF
NEWPORT BEACH, a California municipal corporation and charter city ("City"), and
THEJETTYCDM, LLC, a California limited liability company ("Concessionaire"). City and
Concessionaire are at times individually referred to as "Party" and collectively as "Parties"
herein.
RF('_ITAI R
A. Corona del Mar State Beach is part of the California State Parks system,
and is operated by City pursuant to the Operating Agreement by and between City and
the State of California, dated August 1, 1999 (the "Operating Agreement'). Pursuant to
the Operating Agreement, City agreed "to develop, operate, control and maintain the
premises as public recreational beach and park with related concession..."
B. Brothers Huskey, LLC began operating the concession "Tackle Box" at
3029 Ocean Boulevard, Newport Beach, California 92625 on Corona del Mar State Beach
("Property") under a month -to -month concession agreement dated October 29, 2015
("Month -to -Month Agreement'). The Property is depicted on Exhibit "A" and incorporated
herein by reference.
C. In November 2015, City conducted an informal solicitation seeking
proposals for operation of a concession at the Property. After reviewing the proposals,
City elected to continue to allow Brothers Huskey, LLC to operate the Tackle Box
concession for a longer trial basis and extended the Month -to -Month Agreement.
D. Brothers Huskey, LLC subsequently dissolved and one of its former
members formed THEJETTYCDM, LLC to continue the operation of a restaurant.
E. City and Concessionaire now desire to terminate the Month -to -Month
Agreement and enter into a longer -term agreement for the purpose of allowing
Concessionaire to operate a restaurant ("Concession"), as more fully described in Section
5 herein, on a portion of the Property consisting of approximately 1,639 square feet
("Premises"), as depicted on Exhibit "B" attached hereto and incorporated herein by this
reference.
F. Pursuant to City Council Policy F-7, City did not conduct an open bid
process for the leasing of the Premises as converting the Premises to another use or
changing the current concessionaire of the Premises would result in loss in revenue,
excessive vacancy, and relocation or severance costs, which would outweigh other
financial benefits. Although no appraisal was conducted, Rent, as defined herein, is
comparable to current market rates to ensure that revenue is equivalent to the open
market value of the highest and best use of the Premises and the highest financial return.
Concession Agreement - THEJETTYCDM, LLC Page 2
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt of which is hereby acknowledged,
the Parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS
1.1 General Definitions. As used in this Agreement, the following words and
phrases shall have the following meanings:
(a) Alteration — any improvements, additions, alterations, changes, or
modifications of the Premises made by Concessionaire including, but not limited to
fixtures and signage, and including Concessionaire Improvements.
(b) Authorized City Representative — the City Manager or his/her
designee.
(c) Expiration - the lapse of the time specified as the Term of this
Agreement, including any extension of the Term resulting from the exercise of an option
to extend.
(d) Good Condition - neat and broom -clean, and is equivalent to similar
phrases referring to physical adequacy in appearance and for use.
(e) Rent — includes Base Rent, Percentage Rent, taxes, and other
similar charges payable by Concessionaire under the provisions of this Agreement.
(f) Termination - the termination of this Agreement, for any reason, prior
to Expiration.
(g) Other Definitions. - The following additional terms are defined in the
following sections of this Agreement:
(1)
Base Rent
§4.2
(2)
Claim or Claims
§10.1
(3)
Concession
Recital E, §5.1
(4)
Concessionaire Improvements
§8.1
(5)
Gross Sales
§4.7
(6)
Hazardous Materials
§17
(7)
Indemnified Parties
§10.1
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(8) Percentage Rent §4.4
(9) Property Recital B
(10) Premises Recital E
(11) Rent §4
(12) Term §3
2. PREMISES
City finds it to be in the public interest and consistent with park uses to grant an
exclusive right to operate a concession at the Premises. Therefore, pursuant to the terms
and conditions set forth herein, City hereby grants to Concessionaire the exclusive right,
privilege and concession to conduct a business at the Premises as described in Section
5 of this Agreement. Concessionaire acknowledges that City has delivered the Premises
in an "as is" condition and accepts the Premises in such condition. Concessionaire
agrees that City has made no representations or warranties with respect to the condition
or suitability of the Premises or any construction or improvements except as specifically
set forth in this Agreement. Concessionaire acknowledges that Concessionaire, or
unrelated third parties occupying the Premises prior to Concessionaire, may have
constructed improvements and installed fixtures, furniture, and equipment on the
Premises, and Concessionaire agrees it is relying solely on its own inspections and
investigations regarding the condition of the Premises, including fixtures, furniture, and
equipment, the surrounding area and other matters related thereto.
3. TERM
3.1 Initial Term. The Term of this Agreement shall be five (5) consecutive years
from the Effective Date (the "Initial Term"), unless extended as provided in Section 3.2
below, or terminated in accordance with the other provisions of this Agreement.
3.2 Option Term. Provided Concessionaire is not then in default beyond
applicable notice and cure periods, upon Concessionaire's written notice, and upon
written approval of City, Concessionaire may extend the Term of this Agreement for two
(2) additional successive terms of five (5) years each ("Option Term" or "Option Terms"),
on the same terms and conditions as contained in this Agreement. Concessionaire shall
give City its written notice of intention to extend the Term at least six (6) months prior to
expiration of the current Term.
3.3 Terms of Lease. The "Term" is defined as the Initial Term and, if exercised,
any Option Terms.
3.4 Hold Over. Should Concessionaire, with City's consent, hold over and
continue in possession of the Premises after the Initial Term or any Option Term,
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Concessionaire's continued occupancy of the Premises shall be considered a month -to -
month tenancy subject to all the terms and conditions of this Agreement, except the
provisions of Sections 3.1 and 3.2.
4. RENT
4.1 General. From May to September of each year, Concessionaire shall pay
Base Rent and Percentage Rent. From October to April of each year, Concessionaire
shall only pay Percentage Rent.
4.2 Base Rent. The Base Rent shall be established at Three Thousand Two
Hundred Dollars and 00/100 Dollars ($3,200.00) per month. Base Rent shall be paid,
in advance, on the first day of each month from May to September. Base Rent for any
partial month shall be prorated in accordance with the actual number of days in that month
and shall be due on the first day of that month that falls within the Term.
4.3 Rent Adjustments. Annually, upon each successive anniversary date of
the Effective Date, the Base Rent shall be adjusted to reflect the increases in the cost of
living as indicated by the Consumer Price Index described below. Base Rent may be
adjusted if the Consumer Price Index for the Los Angeles — Long Beach — Anaheim Area,
All Urban Consumers, All Items ("Index"), as published by the United States Department
of Labor, Bureau of Labor Statistics ("Bureau"), increases over the Base Period Index.
The initial "Base Period Index" shall be the Index for the calendar month which is four (4)
months prior to the month of the Effective Date's annual anniversary. The initial Base
Period Index shall be compared with the Index for the same calendar month for each
subsequent year ("Comparison Index"). The Comparison Index used for a given year's
adjustment calculation will become the Base Period Index for purposes of the next annual
Base Rent adjustment calculation. If the Comparison Index is higher than the Base Period
Index, then Base Rent for the next year shall be increased by the amount of such
percentage change, subject to a maximum increase of three percent (3%). In no event
shall Base Rent be reduced below the current Base Rent. Should the Bureau discontinue
the publication of the above Index, or publish same less frequently, or alter same in some
other manner, then the parties shall adopt a substitute Index or substitute procedure
which reasonably reflects and monitors consumer prices.
4.4 Percentage Rent.
4.4.1 Pam. "Percentage Rent" shall be calculated by multiplying six
percent (6%) by the total Gross Sales (as defined in Section 4.7) for the calendar
month. Payment of Percentage Rent is due no later than twenty-five (25) days after the
end of the month. In months where Percentage Rent exceeds Base Rent, Concessionaire
shall pay to City Percentage Rent less the amount of Base Rent paid for that month.
4.4.2 Accounting and Payment. Concessionaire shall submit with each
Percentage Rent payment a written statement showing the total Gross Sales for that
Concession Agreement - THEJETTYCDM, LLC Page 5
month (or fractional month when applicable). The written statement shall be on a form
satisfactory to City and certified by Concessionaire to be correct.
4.5 Revenue from Premises Use in Film, Television, and/or Advertising.
Concessionaire may allow the Premises to be used for film, television production,
advertising production, or other media vehicle only upon written approval from City and
in compliance with the Newport Beach Municipal Code. One-half (1/2) of all monetary
revenue received by Concessionaire as compensation or other payment for the use of
the Premises in a film, television production, advertising production, or other media
vehicle shall be paid to City no later than thirty (30) days after Concessionaire receives
this compensation or other payment.
4.6 Payment Location. Rent shall be payable at the office of City's Revenue
Division at 100 Civic Center Drive, Newport Beach, California, or at such other place or
places as City may from time to time designate by written notice delivered to
Concessionaire; or by electronic delivery if mutually agreed upon by City and
Concessionaire at www.newportbeachca.gov. Concessionaire assumes all risk of loss
and responsibility for late charges and delinquency rates if Rent is not timely received by
City regardless of the method of transmittal.
4.7 Gross Sales.
4.7.1 The term "Gross Sales" means:
(1) All money, cash receipts, assets, property or other things of
value, including but not limited to gross charges, sales, rentals, fees and commissions
made or earned by Concessionaire and/or any assignees, licensees, permittees or
concessionaires thereof, whether collected or accrued from any business, use or
occupation, or any combination thereof, originating, transacted or performed in whole or
in part, on the Premises, including but not limited to rentals, the rendering or supplying of
services and the sale of goods, wares or merchandise, whether wholesale or retail,
whether for cash or credit, or otherwise, and including the value of all consideration other
than money received for any of the foregoing, without, except as expressly provided in
Section 4.7.2, deduction from gross receipts for any overhead or cost or expense of
operations, such as, but without limitation to salaries, wages, costs of goods, interest,
debt amortization, credit, collection costs, discount from credit card operations, insurance
and taxes. Each installment or credit sale shall be treated as a sale for the full price in
the month during which such sale is made, irrespective of whether or when
Concessionaire receives payment therefor. Gross Sales shall include any amount
allowed upon any "trade in," the full retail price of any merchandise delivered or redeemed
for trading stamps or coupons and all deposits not refunded to customers,
(2) Orders taken in or from the Premises, even if the orders are
filled elsewhere, and sales by any subconcessionaire in or from the Premises;
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(3) Gross receipts of all coin -operated devices that are placed on
the Premises by Concessionaire or pursuant to any rent concession, percentage or other
arrangement (but excluding revenue from telephones that are collected by a public and/or
private utility); and
(4) Rentals of any beach equipment, beach furniture, goods,
wares or merchandise.
4.7.2 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:
(1) 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;
(2) The amount of returns to shippers or manufacturers;
(3) The amount of any cash refund or credit refund made upon
any sale where the merchandise sold or some portion of the merchandise sold is returned
by the customer. The amount of said refund shall be considered an exclusion from Gross
Sales in the month during which such refund is provided by Concessionaire to the
customer. The corresponding sale (whether paid in full or partial), shall be treated as a
sale for the full price in the month during which such sale was consummated, irrespective
of the time when Concessionaire shall receive payment (whether in full or partial) from its
customers;
(4) Sales of trade fixtures or personal property to be replaced by
Concessionaire that are not considered stock in trade;
(5) Sums and credits received in the settlement of claims for loss
of or damage to merchandise,
(6) Meals provided for officers or employees without charge;
(7) Meals, goods or products provided for promotional or publicity
purposes without charge;
(8) Cash refunds made to customers in the ordinary course of
business;
(9) Value added taxes ("VAT") or other taxes added to the selling
price of products and other similar taxes now or hereafter imposed upon the sale of
merchandise or services, whether such taxes are added to, or included in the selling price;
Concession Agreement - THEJETTYCDM, LLC Page 7
(10) Discounted sales to employees of Concessionaire, not to
exceed two percent (2%) of the monthly Gross Sales;
(11) Uncollectible credit accounts and other bad debts, not to
exceed two percent (2%) of the monthly Gross Sales; and
(12) Amounts paid to charge card or credit card issuers.
4.7.3 Annual Statements of Gross Sales. Within thirty (30) days after the
end of each calendar year during the Term hereof and within thirty (30) days of
Termination of this Agreement, Concessionaire shall furnish to City a statement in writing,
certified by Concessionaire and a Certified Public Accountant to be correct, showing the
total Gross Sales made in, upon, or from and/or otherwise attributable to the Premises
during the preceding calendar year (or fractional year when applicable).
4.7.4 Sales and Charges. All sales and charges shall be recorded by point
of sale (POS) systems that display the amount of the transaction certifying the amount
recorded. The POS systems shall log daily sales totals and keep records of the
transaction numbers and sales details.
4.7.5 Production of Statement, Records and Audit. Concessionaire shall
keep at the Premises (and shall require any permitted subconcessionaire to keep at the
Premises) full, complete and proper books, records and accounts of its daily Gross Sales,
both for cash and on credit, at any time operated in the Premises. Concessionaire agrees
to make available for inspection by City at the Premises, a complete and accurate set of
books and records of all sales of goods, wares, and merchandise and revenue derived
from the conduct of business or activity in, at or from the Premises from which Gross
Sales can be determined. Concessionaire shall also make available, upon City request,
all supporting records. Concessionaire shall also furnish City copies of its quarterly
California sales and use tax returns at the time each is filed with the State of California.
Concessionaire shall retain and preserve for at least three (3) years all records, books,
bankbooks or duplicate deposit books and other evidence of Gross Sales. City shall have
the right, upon reasonable notice, during the Term and within one hundred eighty (180)
days after Expiration or Termination of this Agreement to inspect and audit
Concessionaire's books and records and to make transcripts to verify the Rent due to
City. The audit may be conducted at any reasonable time during normal business hours.
Concessionaire shall cooperate with City in making the inspection and conducting the
audit. The audit shall be limited to the determination of Gross Sales and shall be
conducted during usual business hours in a manner that minimizes any interference with
the conduct of Concessionaire's regular business operations. Any deficiency in payment
of Rent and any overpayment of Rent shall be paid or refunded, as applicable, within
twenty (20) days after the completion of the audit. City shall bear its costs of the audit
unless the audit shows that Concessionaire understated Gross Sales by more than two
percent (2%), in which case Concessionaire shall pay all City's reasonable costs of the
audit. City shall not disclose financial information received in confidence and pursuant to
this Agreement except to carry out the purposes of this Agreement unless disclosure is
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required (rather than permitted) by law. However, City may disclose the results of any
audit in connection with any financing arrangements, the sale or transfer of City's interest
in the Premises, pursuant to order of a court or administrative tribunal, or to collect any
outstanding Rent.
4.7.6 Concessionaire's Gross Sales Audit. In the event of any audit by
City in accordance with this Agreement, Concessionaire may contest the results of City's
audit by performing a confirming audit, at Concessionaire's expense, within sixty (60)
days of receipt of City's audit results and supporting evidence, using an independent
Certified Public Accountant reasonably acceptable to City.
4.7.7 Acceptance. The acceptance by City of any money paid to City by
Concessionaire as Percentage Rent for the Premises, as shown by any statement
furnished by Concessionaire, shall not be construed as an admission of the accuracy of
said statement, or of the sufficiency of the amount of the Percentage Rent payment.
4.8 Late Payment. Concessionaire hereby acknowledges that the late payment
of Rent or other sums due hereunder will cause City to incur costs not contemplated by
this Agreement, the exact amount of which is extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges. Accordingly, any sum
owed by Concessionaire that is not paid within five (5) days of its due date shall be subject
to a ten percent (10%) late charge. City and Concessionaire agree that this late charge
represents a reasonable estimate of such costs and expenses and is fair compensation
to City for its loss suffered by such late payment by Concessionaire.
4.9 Interest on Unpaid Sums. Unpaid sums due to either City or
Concessionaire under this Agreement shall bear interest at the rate of ten percent (10%)
per annum on the unpaid balance, including but not limited to late payment penalties,
from the date due until paid.
5. BUSINESS PURPOSES AND USE OF PREMISES
5.1 Business Purposes. The Premises are to be used by Concessionaire for
the operation of a bona fide eating place selling food, consisting of a kitchen, dining area,
enclosed patio and dry storage. Alcoholic beverages may be sold by Concessionaire in
accordance with the necessary permits and licenses, subject to the conditions set forth in
Exhibit "C" attached hereto and incorporated herein by reference (the "Alcohol
Conditions"), as may be modified from time to time by the Newport Beach Police
Department and notified to Concessionaire in writing. Concessionaire shall be solely
responsible for obtaining all required permits and licenses for the provision of alcoholic
beverages, including, but not limited to, California Department of Alcoholic Beverage
Control license(s).
5.2 Operation of Premises. Concessionaire shall operate and manage the
Premises in a manner comparable to other high -quality businesses providing similar food
Concession Agreement - THEJETTYCDM, LLC Page 9
and services and prices competitive with similar beach concession facilities. Deliveries
shall be made and completed only between 7 a.m. and 6 p.m. on non -holiday weekdays.
5.3 Prohibited Uses. Concessionaire shall not sell or permit to be kept, used,
displayed or sold in or about the Premises (a) pornographic or sexually explicit books,
magazines, literature, films or other printed material, sexual paraphernalia, or other
material which would be considered lewd, obscene or licentious, (b) any article which may
be prohibited by standard forms of fire insurance policies, or (c) any alcoholic beverages
not otherwise permitted and licensed under this Section 5 of the Agreement. Vending
machines, gaming machines or video or arcade games shall not be used or installed on
the Premises unless expressly permitted by this Agreement. Concessionaire shall not
use or permit the use of the Premises in any manner that (a) creates a nuisance or (b)
violates any Law. Concessionaire shall not offer entertainment or broadcast music or
entertainment through exterior speakers or other form of transmission without the written
approval of City. In this event, Concessionaire shall obtain all required City permits and
approvals.
5.4 No Smoking. No smoking or vaping is permitted on the Property and
Premises. "Smoking" means and includes inhaling, exhaling, burning, or carrying any
lighted smoking equipment for tobacco or any other weed or plant. "Vaping" means and
includes inhaling or exhaling any vaporized liquid or solid, usually from a battery -operated
electronic device.
5.5 Food Packaging and Debris. Concessionaire shall use food packaging
consistent with good environmental practices, including prohibiting polystyrene (also
known as Styrofoam) from the Premises, minimizing the use of PVC plastics (especially
plastic bags for carrying food), and providing both trash receptacles and places for
customers to dispose of recyclable products.
5.6 Outdoor Dininq. In addition to the outdoor dining areas identified in Exhibit
"B", Concessionaire shall be permitted to place tables and chairs on a portion of the paved
area outside of the Premises. Use of the paved area by Concessionaire is on a non-
exclusive basis, and shall be in accordance with City zoning codes and State
requirements. The layout of the tables is subject to approval by City. All furniture and
associated equipment shall be capable of being moved or relocated to provide adequate
circulation and paths of travel around the Premises. Concessionaire may not expand onto
the beach area, or place any temporary furniture or objects onto the beach area unless
expressly approved or permitted in writing by City.
5.7 Seasonal Operation. Concessionaire shall keep the Premises in operation
and open to the public for business in accordance with the following schedule:
5.7.1 Minimum Hours of Operation. Weather permitting, minimum hours
of operation of the Premises shall be:
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(1) From Memorial Day through Labor Day: open daily, hours
from at least 9:00 a.m. to 6:00 p.m., but no earlier than 6:00 a.m. and no later than 10:00
p.m.
(2) From the day after Labor Day to the day before Memorial Day:
open Wednesday to Sunday or five (5) days per week, hours from at least 11:00 a.m. to
4:00 p.m., but no earlier than 6:00 a.m. and no later than 10:00 p.m.
5.8 Off -Seasonal Operation. In consideration of the seasonality of the location
of the Premises, at its discretion, Concessionaire may temporarily close the Premises on
Tuesdays, Wednesdays and/or Thursdays (either continuous or intermittently) during the
months of November through March each year. Additionally, Concessionaire may
temporarily close the Premises from December 1 through January 31, or through the start
of Newport Beach Restaurant Week, but in no event later than January 31 each year
unless otherwise first approved in writing by an Authorized City Representative.
Notwithstanding the provisions of this subsection, Concessionaire may, at its discretion,
open weather permitting.
5.9 Inclement Weather. In consideration of the variable weather of the
Premises, at its discretion, Concessionaire may temporarily close any regularly scheduled
day or partial day of operation due to inclement weather, which shall include rain, mist,
high winds, or severe high or low temperatures. Rent set forth under Section 4 of this
Agreement shall continue to be due and payable in full and shall not be altered, modified
reduced or prorated due to Concessionaire's election to temporarily close due to
inclement weather.
5.10 Closure for Construction. Concessionaire may close the Premises during
periods of remodeling, reconstruction, inventory and emergencies (including substantially
inclement weather) or to comply with laws. During the period of an approved closure for
construction, Base Rent shall be abated on a prorated basis in compliance with Section
12 below.
5.11 Notice to Public Temporary Change in Operation. Concessionaire shall, at
least thirty (30) calendar days in advance of any off-season closures, closures for
construction, or change in hours of operation, notify City in writing and post notices in and
upon the Premises, and to Concessionaire's website and social media pages, informing
customers of the changes. Concessionaire shall immediately, or whenever reasonable at
least forty-eight (48) hours in advance, post notices in and upon the Premises, and to its
website and social media pages informing customers of any temporary change in hours
of operation due to inclement weather.
5.12 Food Preparation. Concessionaire shall install, at Concessionaire's own
expense, fire protective systems in grill, deep fry, and cooking areas which are required
by City, County, and state fire ordinances. Concessionaire shall also install adequate
ventilation systems to operate the cooking area.
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5.13 Advertising Display. Concessionaire may, at its own expense, place unlit
signs in or upon the Premises and Property subject to the prior written consent of City as
to the size, type, number, design and method of installation and in compliance with City's
sign code regulations. All signage placed by Concessionaire on, in or about the Premises
and Property shall remain the property of Concessionaire and shall be removed by
Concessionaire upon Termination or Expiration of this Agreement at Concessionaire's
expense; and any damage caused by removal shall be repaired at Concessionaire's
expense.
5.14 Personnel. Concessionaire shall be responsible for hiring the necessary
personnel to conduct the daily operation of Concession. Concessionaire shall comply
with all federal, state, and local Laws related to minimum wage, social security,
nondiscrimination, ADA, unemployment compensation, and workers' compensation. If
required by City, employees shall wear a uniform and/or identification badge.
5.15 Independent Contractor. It is understood that Concessionaire is an
independent contractor and not an agent or employee of City. The manner and means of
operating the Premises are under the control of Concessionaire, except to the extent they
are limited by statute, rule or regulation and/or the expressed terms of this Agreement.
No civil service status or other right of employment shall accrue to Concessionaire's
employees. Nothing in this Agreement shall be deemed to constitute approval for
Concessionaire or any of Concessionaire's employees or agents, to be the agents or
employees of City. City shall have no interest in the business of Concessionaire.
5.16 No Distress Sales. No auction, fire, bankruptcy, "going out of business" or
other distress sales of any nature may be conducted on the Premises without the prior
written consent of an Authorized City Representative, which approval will not be
unreasonably withheld but may be conditioned.
5.17 Parking for Employees. City grants Concessionaire a non-exclusive right to
the parking areas, as shown on Exhibit "D" and incorporated herein by this reference. City
reserves the right to relocate such parking areas, or assign parking in the future. City shall
provide Concessionaire with a total of four (4) parking permits each year for use of the
parking lot at the Property by its employees. The permits issued by City shall be designed
to permit use by different employees from day to day. Concessionaire shall cause its
employees to comply with the procedures and regulations established by the City from
time -to -time to control parking. The parking permits shall terminate upon Termination or
Expiration of this Agreement.
6. TAXES, LICENSES AND OTHER OBLIGATIONS
6.1 Payment of Taxes. Concessionaire shall pay directly to the appropriate
taxing authorities all taxes applicable to this Agreement, fixtures and Concessionaire's
personal property on the Premises, that are levied or assessed against Concessionaire
during the Term. Taxes shall be paid at least ten (10) days before delinquency and before
any fine, interest or penalty is due or imposed by operation of law. Concessionaire shall,
Concession Agreement - THEJETTYCDM, LLC Page 12
upon request, promptly furnish to City satisfactory evidence of payment. Concessionaire
acknowledges that this Agreement may create a possessory interest subject to property
taxation and that Concessionaire may be subject to the payment of property taxes levied
on such interest. Concessionaire shall pay, before delinquency all taxes, assessments,
license fees and other charges ("Taxes") that are levied or assessed against
Concessionaire's interest in the Premises or any personal property installed on the
Premises.
6.2 Payment of Obligations. Concessionaire shall promptly pay, when due, any
and all bills, debts, liabilities and obligations incurred by Concessionaire in connection
with Concessionaire's occupation and use of the Premises.
6.3 Challenge to Taxes. Concessionaire shall have the right in good faith, at its
sole cost and expense, to contest the amount or legality of any Taxes on or attributable
to this Agreement, the Premises, Concessionaire's personal property, or
Concessionaire's occupation and use of the Premises, including the right to apply for
reduction. If Concessionaire seeks a reduction or contests such taxes, Concessionaire's
failure to pay the taxes shall not constitute a default as long as Concessionaire complies
with the provisions of this Section. City shall not be required to join in any proceeding or
contest brought by Concessionaire 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 as long as City is not required to bear any cost. If requested by Concessionaire,
City shall execute any instrument or document necessary or advisable in connection with
the proceeding or contest. Concessionaire, on final determination of the proceeding or
contest, shall immediately pay or discharge any decision or judgment rendered, together
with all related costs, charges, interest and penalties. Concessionaire shall indemnify,
defend and hold harmless City, including its City Council, appointed and elected officers,
boards and commissions, employees, Authorized City Representatives, agents and
volunteers, from and against any liability, claim, demand, penalty, cost or expense arising
out of or in connection with any contest by Concessionaire pursuant to this Section.
7. UTILITIES
Concessionaire shall make all arrangements for utilities installation and pay for all
utilities furnished to or used on the Premises, including, without limitation, gas, electricity,
water, telephone service, and cable TV. Concessionaire may use City's trash enclosures
or public trash cans, provided however, that City may, at City's discretion, require
Concessionaire to arrange for its own refuse collection. Any repair to utility lines within
the Premises is the sole responsibility of Concessionaire. Concessionaire shall service
and maintain the Concession's 1500-gallon grease interceptor. Refuse collection and
grease interceptor maintenance shall occur between 7:00 a.m. and 6:00 p.m. on non -
holiday weekdays.
8. CONCESSIONAIRE IMPROVEMENTS: ALTERATIONS TO THE PREMISES
Concession Agreement - THEJETTYCDM, LLC Page 13
8.1 Concessionaire Improvements. Subject to all applicable laws, it shall be
Concessionaire's responsibility to install or replace any improvements to the Premises as
necessary for the Concession to operate in a responsible, safe and lawful manner as
described in Section 5 of this Agreement, including those improvements as depicted in
Exhibit "E" attached hereto and incorporated herein by reference ("Concessionaire
Improvements"). The Concessionaire Improvements must be completed prior to
Concessionaire operating any alcohol services on the Premises. Concessionaire shall
submit plans, diligently pursue their approval, and begin construction of Concessionaire
Improvements within twelve (12) months of the Effective Date of this Agreement. Final
design of the Concessionaire Improvements shall be subject to the prior written approval
by City, as may be modified in order to obtain certain permits as may be necessary. The
installation of Concessionaire Improvements shall be in strict compliance with the
approved final design, and construction shall be performed between 7:00 a.m. and 6:00
p.m. on non -holiday weekdays.
8.2 Concessionaire's Architects and Contractors. All Concessionaire
Improvements and any subsequent repairs, alterations, additions or improvements to any
of the foregoing shall be designed, selected or constructed, as applicable, by qualified
and licensed (where required) architectural, design, engineering and construction firms
selected by Concessionaire. Any contractors hired by Concessionaire shall be fully
licensed and bonded. Concessionaire's contractors and any subcontractors shall obtain
insurance in an amount and form to be approved by City's Risk Manager, including
workers compensation insurance as required by law, general liability, automobile liability
and builder's risk insurance covering improvements to be constructed, all pursuant to
standard industry custom and practice. City, its elected or appointed officers, officials,
employees, agents and volunteers, and the State of California, its elected or appointed
officers, officials, employees, agents and volunteers shall be named as an additional
insured on the contractors and any subcontractors policies.
8.3 Costs of Construction. Concessionaire shall bear all costs and expenses
associated with the design and construction of the Premises, which costs and expenses
include without limitation all modifications, alterations and improvements to the dining
area, employee restroom and storage area and outdoor dining area.
8.4 Prevailing Wages. Pursuant to the applicable provisions of the Labor Code
of the State of California, not less than the general prevailing rate of per diem wages
including legal holidays and overtime work for each craft or type of workman needed to
execute the work contemplated under this Section shall be paid to all workmen employed
on the work to be done according to this Section by the Concessionaire's contractors and
any subcontractor. In accordance with the California Labor Code (Sections 1770 et seq.),
the Director of Industrial Relations has ascertained the general prevailing rate of per diem
wages in the locality in which the work is to be performed for each craft, classification, or
type of workman or mechanic needed to execute the Concessionaire Improvements. A
copy of said determination is available by calling the prevailing wage hotline number (415)
703-4774, and requesting one from the Department of Industrial Relations.
Concessionaire's contractors and subcontractors are required to obtain the wage
Concession Agreement - THEJETTYCDM, LLC Page 14
determinations from the Department of Industrial Relations and post at the job site the
prevailing rate or per diem wages. It shall be the obligation of Concessionaire's
contractors or any subcontractor under him/her to comply with all State of California labor
laws, rules and regulations and the parties agree that the City shall not be liable for any
violation thereof.
8.5 Permits. Concessionaire shall obtain, and be responsible for the costs for,
all building permits, health department permits, alcohol licensing permits, and other
required permits prior to commencement of Concessionaire Improvements and
operations.
8.6 Quality of Work Performed. All Concessionaire Improvements, alterations,
maintenance and other work shall be performed in a good and workmanlike manner, shall
comply with the plans and specifications submitted to City, and shall comply with all
applicable governmental permit requirements and Laws in force at the time permits are
issued.
8.7 Payment of Costs. Concessionaire shall pay all costs related to the
construction of the Concessionaire Improvements and any other alterations by
Concessionaire or its agents.
8.8 Liens. Concessionaire shall keep the Premises free from any liens arising
out of any work performed, material furnished, or obligation incurred by Concessionaire
or alleged to have been incurred by Concessionaire.
8.9 Disposition of Concessionaire Improvements at Expiration or Agreement
Termination. Any Concessionaire Improvements or other alterations made to the
Premises (excluding Concessionaire's fixtures, equipment, furniture, and moveable
decorations) shall remain on, and be surrendered with, the Premises on Expiration or
Termination of this Agreement. Except in the case of termination for default as set forth
under Section 14 of this Agreement, City may require Concessionaire to remove any
Concessionaire Improvements or alterations that Concessionaire has made to the
Premises by providing notice at least thirty (30) days prior to the Expiration or Termination
of this Agreement. If City requires such removal, Concessionaire shall, at its cost, remove
the Concessionaire Improvements or alterations and restore the Premises to Good
Condition before the last day of the Term, or within thirty (30) days after notice is given,
whichever is earlier. Prior to Expiration or within fifteen (15) days after Termination of this
Agreement, Concessionaire may remove any moveable partitions, machinery,
equipment, furniture, and trade fixtures previously installed by Concessionaire, provided
that Concessionaire repairs any damage to the Premises caused by removal.
9. MAINTENANCE OF PREMISES
9.1 Maintenance by Concessionaire. Concessionaire agrees that it will keep
the Premises, including all furnishings, equipment, facilities, improvements, alterations,
attachments and appurtenances not provided by City, but required for Concession
Concession Agreement - THEJETTYCDM, LLC Page 15
operations, including all kitchen equipment and interior furnishings, in Good Condition at
its cost. Graffiti shall be called in to City's Graffiti Hotline for removal.
9.2 Maintenance by City. City may perform maintenance in the event
Concessionaire fails to commence required maintenance within three (3) business days
after receipt of notice to do so. The cost of any maintenance by City pursuant to this
Section shall be payable as additional Rent. City may perform required cleaning and
charge the costs to Concessionaire if the Concessionaire fails to perform within five (5)
days after notice to do so and continue to maintain the area as required by this
Agreement.
9.3 Entry by City. Upon twenty-four (24) hour notice to Concessionaire, City
and its Authorized City Representatives may enter upon and inspect the Premises at any
reasonable time for any lawful purpose. In case of emergency, City or its Authorized City
Representative may enter the Premises by whatever force necessary if Concessionaire
is not present to open and permit an entry. Any entry to the Premises by City shall not
be construed as a forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction of Concessionaire from the Premises or any portion thereof.
10. INDEMNITY AND EXCULPATION; INSURANCE
10.1 Hold -Harmless Clause. Concessionaire agrees to indemnify, defend and
hold harmless City, its City Council, Boards, Commissions, officers, agents, volunteers,
employees, and the State of California (collectively, the "Indemnified Parties") from and
against any and all claims (including, without limitation, claims for bodily injury, death or
damage to property), demands, obligations, damages, actions, causes of action, suits,
losses, judgments, fines, penalties, liabilities, costs and expenses (including, without
limitation, attorney's fees, disbursements and court costs) of every kind and nature
whatsoever (individually, a "Claim"; collectively, "Claims"), which may arise from or in any
manner relate (directly or indirectly) to Concessionaire's possession, occupation or use
of the Premises, specifically including, without limitation, any claim, liability, loss, or
damage arising by reason of:
(1) The death or injury of any Person or damage to personal property
caused or allegedly caused by the condition of the Premises or an act or omission of
Concessionaire or an agent, contractor, subcontractor, supplier, employee, servant,
sublessee or concessionaire of Concessionaire;
(2) Any work performed on the Premises or materials furnished to the
Premises at the request of Concessionaire or any agent or employee of Concessionaire,
with the exception of maintenance performed by City; and/or
(3) Concessionaire's failure to perform any provision of this Agreement
or to comply with any requirement of Law or any requirement imposed on the Premises
by any duly authorized governmental agency or political subdivision.
Concession Agreement - THEJETTYCDM, LLC Page 16
Concessionaire's obligations pursuant to this Subsection shall not extend to any Claim
proximately caused by the sole negligence, willful misconduct, or unlawful or fraudulent
conduct on the part of the Indemnified Parties. This indemnity shall apply to all claims
and liability regardless of whether any insurance policies are applicable.
10.2 Exculpation of City. Except as otherwise expressly provided in this
Agreement, City shall not be liable to Concessionaire for any damage to Concessionaire
or Concessionaire's property from any cause other than the sole negligence, intentional
or willful acts of the Indemnified Parties. Except as otherwise expressly provided in this
Agreement, Concessionaire waives all claims against the Indemnified Parties arising for
any reason other than the sole negligence, intentional or willful acts of the Indemnified
Parties. City shall not be liable to Concessionaire for any damage to the Premises,
Concessionaire's property, Concessionaire's goodwill, or Concessionaire's business
income, caused in whole or in part by acts of nature including, without limitation, waves,
wind and ocean currents.
10.3 Insurance. In addition to insurance required of Concessionaire to be
obtained, provided, and maintained during the construction of the Concessionaire
Improvements, and without limiting Concessionaire's indemnification of City,
Concessionaire shall obtain, provide and maintain at its own expense during the term of
this Agreement, a policy or policies of liability insurance of the type and amounts specified
in Exhibit "F," attached hereto and incorporated herein by this reference.
11. DAMAGE OR DESTRUCTION OF PROPERTY/PREMISES
11.1 Destruction of Premises. If the Premises are totally or partially destroyed,
rendering the Premises or any portion thereof totally or partially inaccessible or unusable,
Concessionaire shall restore the Premises to substantially the same condition as
immediately prior to such destruction (including all trade fixtures, personal property,
Concessionaire Improvements and Alterations as are installed by Concessionaire or its
contractors or subcontractors, which shall be replaced by Concessionaire at its expense).
Concessionaire may elect to terminate this Agreement by giving notice of such election
to City within sixty (60) days after the date of the occurrence of any casualty if the cost of
the restoration exceeds the amount of any available insurance proceeds, if the damage
has been caused by an uninsured casualty or event, or if Concessionaire reasonably
estimates that repairs of the Premises will take more than six (6) months. Upon such
termination, insurance proceeds applicable to reconstruction of the Premises (excluding
Concessionaire's personal property therein) shall be paid to City and Concessionaire
shall have no further liability or obligations under this Agreement.
11.2 Replacement of Concessionaire's Property. In the event of damage or
destruction of Concessionaire Improvements located on the Premises not giving rise to
Concessionaire's option to terminate this Agreement, Concessionaire shall, at its own
expense, replace and repair all Concessionaire's trade fixtures, equipment, machinery,
furnishings, furniture and inventory as soon as reasonably possible to permit the prompt
continuation of the Concession.
Concession Agreement - THEJETTYCDM, LLC Page 17
11.3 Destruction of the Property. In the event that all or a portion of the Property
is damaged, and the Premises or a material portion becomes inaccessible or
commercially unusable, and the damage or destruction cannot reasonably be repaired
within twelve (12) months after the date of the casualty, City shall have the right to either:
(1) Terminate this Agreement. City shall give Concessionaire written
notice of termination within thirty (30) days following the date of the casualty, which shall
be effective sixty (60) days after the date of the notice; or
(2) Repair the damage at City's expense. City shall give Concessionaire
written notice of its intention to repair such damage as soon as reasonably possible at
City's expense, in which event this Agreement shall continue in full force and effect;
however, Rent shall be abated in accordance with the procedures set forth in Section 12.
If City fails to commence repairs within one hundred twenty (120) days after its notice of
its intention to repair, then Concessionaire may terminate this Agreement by giving City
written notice at any time prior to the commencement of repairs. In such event, this
Agreement shall terminate as of the date of notice from Concessionaire to City, and City
shall have no liability under this Agreement.
12. ABATEMENT OF RENT
12.1 Concessionaire Improvements; Approved Construction. Rent shall be
abated during the construction of Concessionaire Improvements and during approved
closures for construction the extent the closure limits Concessionaire's ability to fully
operate the Concession. Concessionaire may continue to operate that portion of the
Premises not under construction as it may be safe, practicable and commercially
reasonable to do so. Concessionaire shall provide documentation of construction activity
at least forty-five (45) calendar days prior to the commencement of the scheduled
construction and the City's subsequent written approval. In no way shall abatement of
Rent pursuant to this subsection: (a) exceed Ten Thousand Dollars ($10,000) in the
aggregate during the Term of this Agreement, and (b) exceed six (6) months, whether
consecutively or collectively. "Construction" shall mean the installation of Concessionaire
Improvements in strict compliance with the design plans approved in writing by City.
12.2 Damage or Destruction. In the event of damage or destruction of the
Premises or damage to the Property that impacts the Premises and this Agreement is not
terminated, Concessionaire shall continue to utilize the Premises for the operation of its
business to the extent it may be practicable and commercially reasonable. Rent shall be
proportionally reduced based on the value of the actual area of the Premises that is
rendered unusable. The proration of Rent shall commence on the date that use of the
Premises is impacted and continue until the completion of those repairs necessary to
restore full use of the Premises, for a maximum abatement period of six (6) consecutive
months. Concessionaire's obligation to pay taxes pursuant to this Agreement shall not be
abated or reduced. Rent shall not abate if the damage or destruction to the Premises is
the result of the negligence or willful conduct of Concessionaire or its employees, officers
Concession Agreement - THEJETTYCDM, LLC Page 18
or agents. Concessionaire's right to prorated Rent is contingent on payment of insurance
proceeds, if any, equal to the amount of Rent pursuant to coverage required by Section
10.3.
12.3 No Abatement for Maintenance. Concessionaire shall not be entitled to
any abatement of Rent for any temporary closures for general maintenance of the
Premises to keep the Concession operating in a manner comparable to other high -quality
concession businesses.
13. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING AND
ENCUMBERING
13.1 Prohibition of Assignment. City and Concessionaire acknowledge that City
is entering into this Agreement in reliance upon the experience and abilities of
Concessionaire. Consequently, Concessionaire shall not voluntarily assign or encumber
its interest in this Agreement or in the Premises, or assign substantially all or any part of
the Premises, or allow any other person or entity (except Concessionaire's authorized
representatives) to occupy or use all or any part of the Premises without the prior written
consent of City, which shall not be unreasonably withheld. City's consent to any
assignment or other transfer is subject to Concessionaire providing City with evidence
reasonably satisfactory to City that the proposed transferee has financial strength and
restaurant or food service experience comparable to Concessionaire and the use of the
Premises by the proposed transferee is consistent with the terms of this Agreement.
Except as otherwise expressly provided herein, any dissolution, merger, consolidation,
reorganization of Concessionaire, or the sale or other transfer resulting in a transfer of a
controlling percentage of the capital stock of Concessionaire, shall be deemed a voluntary
assignment; provided, however, that the sale or transfer of a controlling percentage of the
capital stock of Concessionaire pursuant to a public offering(s) of equity or debt
instruments issued by Concessionaire, or other transfers of publicly traded capital stock
or debt instruments shall not constitute a voluntary assignment and shall not require City's
consent or approval. The phrase "controlling percentage" means the ownership of, or the
right to vote, stock possession of at least fifty percent (50%) of the total combined voting
power of all classes of Concessionaire's capital stock issued, outstanding, and entitled to
vote for the election of directors, except for ownership of publicly traded shares, warrants
or similar equity interests in Concessionaire traded on a national exchange or over-the-
counter markets.
13.2 Exceptions. Notwithstanding the foregoing paragraphs or anything to the
contrary contained herein, City's consent shall not be required for an assignment or
subletting to an Affiliate, Subsidiary, or Successor of Concessionaire. For purposes
hereof, an "Affiliate", a "Subsidiary", and a "Successor" of Concessionaire are defined as
follows:
(1) an "Affiliate" is any corporation or other entity which directly or
indirectly controls or is controlled or is under common control with Concessionaire (for
purposes of this Section, "control" shall mean the possession, directly or indirectly, of the
Concession Agreement - THEJETTYCDM, LLC Page 19
power to direct or cause the direction of the management and policies of such corporation
or other entity, whether through the ownership of voting securities or by contract or
otherwise),
(2) a "Subsidiary" shall mean any corporation or other entity not less
than twenty-five percent (25%) of whose outstanding stock shall, at the time, be owned
directly or indirectly by Concessionaire and which is at least as creditworthy as
Concessionaire; and
(3) a "Successor' shall mean a corporation or other entity in which or
with which Concessionaire is merged or consolidated, in accordance with applicable
statutory provisions for merger or consolidation of corporations or a corporation or other
entity acquiring a substantial portion of the property and assets of Concessionaire.
13.3 Continuing Effect. City's consent to any assignment or encumbrance shall
not relieve Concessionaire from its obligations or liabilities under this Agreement nor act
as a waiver of the requirement that such consent be obtained to any subsequent
assignment or encumbrance.
14. DEFAULT
14.1 Default by Concessionaire. The occurrence of any one or more of the
following events shall constitute a default and material breach of this Agreement by
Concessionaire:
(1) The vacating or abandonment of the Premises by Concessionaire for
more than fifteen (15) consecutive days that was not otherwise expressly permitted under
this Agreement or pre -approved in writing by City;
(2) The revocation of any license issued by the State;
(3) The failure by Concessionaire to make any payment of Rent or any
other payment required by this Agreement, as and when due, when such failure shall
continue for a period of ten (10) days after written notice of default from City to
Concessionaire,
(4) Except as specified in Subsection 14.1(2), the failure of
Concessionaire to observe or perform any of the material covenants, conditions or
provisions of this Agreement to be observed or performed by Concessionaire where such
failure shall continue for a period of ten (10) days after written notice thereof from City to
Concessionaire; provided, however, that if the nature of Concessionaire's default is such
that more than ten (10) days are reasonably required for its cure, then Concessionaire
shall not be deemed to be in default if Concessionaire commences such cure within said
ten (10) day period and thereafter diligently prosecutes such cure to completion;
Concession Agreement - THEJETTYCDM, LLC Page 20
(5) The making by Concessionaire of any general arrangement or
assignment for the benefit of creditors;
(6) Concessionaire 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
Concessionaire, the same is dismissed within ten (10) days);
(7) The appointment of a trustee or receiver to take possession of
substantially all of Concessionaire's assets located at the Premises or of
Concessionaire's interest in this Agreement, where such appointment is not discharged
within ten (10) days; and
(8) The attachment, execution or the judicial seizure of substantially all
of Concessionaire's assets located at the Premises or of Concessionaire's interest in this
Agreement, where such seizure is not discharged within sixty (60) days.
14.2 Remedies.
14.2.1 Cumulative Nature of Remedies. If any default by
Concessionaire shall continue without cure as required by this Agreement, City shall have
the remedies described in this Section in addition to all other rights and remedies provided
by law or equity, to which City may resort cumulatively or in the alternative.
14.2.2 Reentry without Termination. City may reenter the Premises,
and, without terminating this Agreement, re -let all or a portion of the Premises. City may
execute any agreements made under this provision in City's name and shall be entitled
to all rents from the use, operation, or occupancy of the Premises. Concessionaire shall
nevertheless pay to City on the dates specified in this Agreement the equivalent of all
sums required of Concessionaire under this Agreement, plus City's expenses in
conjunction with re -letting, less the proceeds of any re -letting or atonement. No act by or
on behalf of City under this provision shall constitute a Termination of this Agreement
unless City gives Concessionaire specific written notice of Termination.
14.2.3 Termination. City may terminate this Agreement by giving
Concessionaire notice of Termination. In the event City terminates this Agreement, City
may recover possession of the Premises (which Concessionaire shall surrender and
vacate upon demand) and remove all Persons and property. City shall be entitled to
recover the following as damages:
(1) The value of any Rent or other charges that are unpaid at the
time of Termination;
(2) The value of the Rent and other charges that would have
accrued after Termination less the amount of Rent and charges City received or could
have received through the exercise of reasonable diligence as of the date of the award;
Concession Agreement - THEJETTYCDM, LLC Page 21
(3) Any other amount necessary to reasonably compensate City
for the detriment proximately caused by Concessionaire's failure to perform its obligations
under this Agreement; and
(4) 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. City
shall be entitled to interest at the rate of ten percent (10%) per annum on all Rent and
other charges from the date due or the date they would have accrued. City shall also be
entitled to an award of the costs and expenses incurred by City in maintaining or
preserving the Premises after default, preparing the Premises for re -letting, or repairing
any damage caused by the act or omission of Concessionaire.
14.2.4 Use of Concessionaire's Personal Property. City may use
Concessionaire's personal property and trade fixtures located on the Premises or any of
such property and fixtures without compensation or liability to Concessionaire for use or
damage. In the alternative City may store the property and fixtures at the cost of
Concessionaire. City shall not operate the Premises in any manner tending to indicate
that the Premises are affiliated with, part of or operated in conjunction with
Concessionaire's business.
14.3 City's Right to Cure Concessionaire's Default. Upon continuance of any
default beyond applicable notice and cure periods, City may, but is not obligated to, cure
the default at Concessionaire's cost. If City pays any money or performs any act required
of, but not paid or performed by, Concessionaire after notice, the payment and/or the
reasonable cost of performance shall be due as additional Rent not later than five (5)
days after service of a written demand accompanied by supporting documentation. No
such payment or act shall constitute a waiver of default or of any remedy for default or
render City liable for any loss or damage resulting from performance.
15. SUBJECT TO STATE OPERATING AGREEMENT
The Premises are located on property that is the subject of the Operating
Agreement. Concessionaire shall not take any action that would cause City to be in
violation of any provisions of that Operating Agreement. If the State of California
terminates the Operating Agreement, this Agreement shall terminate as a result and the
Parties shall be released from all liabilities and obligations under this Agreement.
16. WASTE OR NUISANCE
Concessionaire shall not commit or permit the commission of any waste on the
Premises. Concessionaire shall not maintain, commit, or permit any nuisance as defined
in Section 3479 of the California Civil Code on the Premises. Concessionaire shall not
use or permit the use of the Premises for any unlawful purpose, including, but not limited
to, any use that violates City's charter or Municipal Code.
17. NO CONFLICTS OF USE, HAZARDOUS MATERIALS
Concession Agreement - THEJETTYCDM, LLC Page 22
City represents and warrants that, to the best of City's knowledge, (i)
Concessionaire's use of the Premises does not conflict with applicable Laws, and City
knows of no reason why Concessionaire would be unable to obtain all required permits,
licenses and approvals from the appropriate governmental authorities; (ii) the Property is
not in violation of any environmental laws, rules or regulations and Concessionaire's
contemplated uses will not cause any such violation; and (iii) the Property is free of any
and all Hazardous Materials as of the date of this Agreement. In the event that the
presence of any Hazardous Materials not caused by Concessionaire is detected at the
Property at any time during the Term of this Agreement all remedial work shall be
performed by City at City's expense. Concessionaire's obligation to open shall be delayed
until the remedial work is completed if the remedial work is performed prior to
Concessionaire opening for business. Concessionaire's obligation to pay Rent shall be
abated in direct proportion to the extent Concessionaire is unable to conduct its business
upon the Premises as a result of any remedial work that is performed subsequent to
Concessionaire opening for business. Concessionaire shall have the right (but not the
obligation) to terminate this Agreement, upon thirty (30) days advance written notice to
City in the event that Hazardous Materials are detected at the Property and the presence
or the remediation materially affects Concessionaire's ability to conduct its business in
the Premises. "Hazardous Materials" shall mean any oil, flammable explosives,
asbestos, urea formaldehyde, radioactive materials or waste, or other hazardous, toxic,
contaminated or polluting materials, substances or wastes, including, without limitation,
any "hazardous substances", "hazardous wastes", "hazardous materials" or "toxic
substances" under applicable federal, state and local laws, ordinances and regulations.
18. FORCE MAJEURE; EXTENSIONS OF TIME OF PERFORMANCE
18.1. Neither Party will be liable for any failure or delay in performing an obligation
under this Agreement that is due to any of the following causes (hereinafter "Force
Majeure"): acts of God, war, terrorist act, government -mandated quarantine restrictions,
riot, natural catastrophes, Federal or state governmental acts or omissions, national
strikes, fire, or explosion, provided that the Force Majeure is unforeseeable, beyond the
control of, and not due to the fault or negligence of the Party claiming the Force Majeure.
For the avoidance of doubt, Force Majeure shall not include (a) the novel coronavirus
Covid-19 pandemic, which is ongoing as of the date of the execution of this Agreement,
(b) financial distress or the inability of either Party to make a profit or avoid a financial
loss, (c) changes in the market prices or conditions, or (d) a Party's financial inability to
perform its obligations hereunder.
18.2. A Party's excuse in liability from failure or delay in performing an obligation
under this Agreement due to Force Majeure shall only be to the extent caused by the
Force Majeure and shall not be any longer than the period commencing from when the
requisite written notice is given and ending when the Party is no longer delayed or
prevented from performing on account of the Force Majeure. A Party claiming Force
Majeure shall promptly notify the other Party in writing, no later than five (5) days after the
Concession Agreement - THEJETTYCDM, LLC Page 23
commencement of delay or inability to perform, and the Party shall continue with
commercially reasonable diligence in an effort to limit the period of nonperformance or
delay. Time of performance under this Agreement may also be extended in writing by City
and Concessionaire.
19. CITY'S DEFAULTS/CONCESSIONAIRE'S REMEDIES
City shall be in default if it fails to perform, or commence performance if the
obligation requires more than ten (10) days to complete, any material obligation within ten
(10) days after receipt of written notice by Concessionaire to City specifying the nature of
such default. City shall also be in default if it commences performance within ten (10)
days but fails to diligently complete performance. In the event of City's default,
Concessionaire may:
(a) Upon five (5) days' notice to City, cure any such default, and City
shall reimburse Concessionaire the amount of all costs and expenses incurred by
Concessionaire in curing the default, together with interest and expenses at the maximum
rate then allowed by law; or
(b) Terminate this Agreement if City's default materially interferes with
Concessionaire's use of the Premises for its intended purpose and City fails to cure such
default within ten (10) days after a second demand by Concessionaire in which case
Concessionaire shall have no further or continuing obligations.
20. EVENT OF BANKRUPTCY
20.1 If this Agreement is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. or any similar or
successor statute ("Bankruptcy Code"), any and all monies or other consideration payable
or otherwise to be delivered in connection with such assignment shall be paid or delivered
to City, shall be and remain the exclusive property of City and shall not constitute property
of Concessionaire or of the estate of Concessionaire within the meaning of the
Bankruptcy Code. Any and all monies or other consideration constituting City's property
under this Section not paid or delivered to City shall be held in trust for the benefit of City
and be promptly paid or delivered to City.
20.2 Any person or entity to which this Agreement is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to have
assumed all of the obligations arising under this Agreement on and after the date of such
assignment, including the obligation to operate the business which Concessionaire is
required to operate under this Agreement.
21. NOTICES
Any notice, demand, request, consent, approval or communication that either party
desires or is required to give shall be in writing and shall be deemed given three (3) days
Concession Agreement - THEJETTYCDM, LLC Page 24
after deposit into the United States registered mail, postage prepaid, by registered or
certified mail, return receipt requested. Unless notice of a different address has been
given in accordance with this Section, all notices shall be addressed as follows:
If to City, to: CITY OF NEWPORT BEACH
Attn: Real Property Administrator
100 Civic Center Drive
Newport Beach, CA 92660
If to Concessionaire, to: Brian Huskey
c/o THEJETTYCDM, LLC
3029 Ocean Blvd.
Corona Del Mar, CA 92625
(626) 755-8841
22. TERMINATION OF EXISTING MONTH -TO -MONTH AGREEMENT
Concurrently with execution of this Agreement by the Parties, the Month -to -Month
Agreement is hereby terminated.
23. SURRENDER OF PREMISES
At the Expiration or earlier Termination of this Agreement, Concessionaire shall
surrender to City the possession of the Premises. Concessionaire shall leave the
surrendered Premises, required personal property and fixtures, in Good Condition,
reasonable wear and tear excepted. All property that Concessionaire is not required to
surrender, but that Concessionaire does abandon shall, at City's election, become City's
property.
24. COMPLIANCE WITH ALL LAWS
Concessionaire shall at its own cost and expense comply with all statutes,
ordinances, regulations and requirements of all governmental entities, including federal,
state, county or municipal, whether now in force or hereinafter enacted. In addition, all
work prepared by Concessionaire shall conform to applicable City, county, state and
federal laws, rules, regulations and permit requirements and be subject to approval of an
Authorized City Representative.
25. WAIVERS
The waiver by either party of any breach or violation of any term, covenant or
condition of this Agreement, or of any ordinance, law or regulation, shall not be deemed
to be a waiver of any other term, covenant, condition, ordinance, law or regulation, or of
any subsequent breach or violation of the same or other term, covenant, condition,
ordinance, law or regulation. The subsequent acceptance by either party of any fee,
Concession Agreement - THEJETTYCDM, LLC Page 25
performance, or other consideration which may become due or owing under this
Agreement, shall not be deemed to be a waiver of any preceding breach or violation by
the other party of any term, condition, covenant of this Agreement or any applicable law,
ordinance or regulation.
26. SEVERABILITY
If any term or portion of this Agreement is held to be invalid, illegal, or otherwise
unenforceable by a court of competent jurisdiction, the remaining provisions of this
Agreement shall continue in full force and effect.
27. APPLICABLE LAW
This Agreement shall be construed in accordance with the laws of the State of
California in effect at the time of the execution of this Agreement. Any action brought
relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the
County of Orange.
28. ENTIRE AGREEMENT: AMENDMENTS
28.1 The terms and conditions of this Agreement, all exhibits attached, and all
documents expressly incorporated by reference, represent the entire agreement of the
parties with respect to the subject matter of this Agreement.
28.2 This Agreement shall supersede any and all prior agreements, oral or
written, regarding the subject matter between Concessionaire and City.
28.3 No other agreement, promise or statement, written or oral, relating to the
subject matter of this Agreement, shall be valid or binding, except by way of a written
amendment to this Agreement.
28.4 The terms and conditions of this Agreement shall not be altered or modified
except by a written amendment to this Agreement signed by Concessionaire and City.
28.5 If any conflicts arise between the terms and conditions of this Agreement,
and the terms and conditions of the attached exhibits or the documents expressly
incorporated by reference, the terms and conditions of this Agreement shall control.
28.6 Any obligation of the parties relating to monies owed, as well as those
provisions relating to limitations on liability and actions, shall survive termination or
expiration of this Agreement.
28.7 Each party has relied on its own inspection of the Premises and examination
of this Agreement, the counsel of its own advisors, and the warranties, representations,
and covenants in this Agreement. The failure or refusal of either party to inspect the
Premises, to read this Agreement or other documents, or to obtain legal or other advice
Concession Agreement - THEJETTYCDM, LLC Page 26
relevant to this transaction constitutes a waiver of any objection, contention, or claim that
might have been based on such reading, inspection, or advice.
29. TIME IS OF THE ESSENCE
Time is of the essence for this Agreement. Concessionaire agrees to
proceed in an efficient and timely manner to obtain all necessary approvals, licenses and
permits required to engage in the business services as described under Section 5.
30. SUCCESSORS
Subject to the provisions of this Agreement on assignment and subletting, each
and all of the covenants and conditions of this Agreement shall be binding on and shall
inure to the benefit of the heirs, successors, executors, administrators, assigns, and
personal representatives of the respective parties.
31. INTERPRETATION
The terms of this Agreement shall be construed in accordance with the meaning
of the language used and shall not be construed for or against either party by reason of
the authorship of this Agreement or any other rule of construction which might otherwise
apply.
32. TABLE OF CONTENTS; HEADINGS
The table of contents of this Agreement and the captions of the various sections
of this Agreement are for convenience and ease of reference only and do not define, limit,
augment, or describe the scope, content, or intent of this Agreement.
33. GENDER; NUMBER
The neuter gender includes the feminine and masculine, the masculine includes
the feminine and neuter, and the feminine includes the neuter, and each includes
corporation, partnership, or other legal entity whenever the context requires. The singular
number includes the plural whenever the context so requires.
34. EXHIBITS
All exhibits to which reference is made in this Agreement are incorporated by
reference. Any reference to "this Agreement" includes matters incorporated by reference.
35. MEMORANDUM OF CONCESSION AGREEMENT
A Memorandum of Concession Agreement, in a form and content similar to that
contained in Exhibit "G" shall be recorded by the parties promptly upon execution of this
Agreement. Upon execution by both parties, the Memorandum of Concession Agreement
Concession Agreement - THEJETTYCDM, LLC Page 27
shall be recorded against the Premises in the office of the Orange County Clerk -
Recorded, as required by Government Code Section 37393.
36. CITY BUSINESS LICENSE
Concessionaire shall obtain and maintain during the duration of this Agreement, a
City business license as required by the Newport Beach Municipal Code.
37. NO ATTORNEYS' FEES
The prevailing party in any action brought to enforce the terms and conditions of
this Agreement, or arising out of the performance of this Agreement, shall not be entitled
to recover its attorneys' fees.
38. NONDISCRIMINATION
Concessionaire, for itself and its successors, agrees that in the performance under
this Agreement, Concessionaire shall not discriminate against any person because of the
marital status or ancestry of that person or any characteristic listed or defined in
Government Code Section 11135.
39. NO THIRD PARTY BENEFICIARIES
City (both as a lessor and as the City of Newport Beach) and Concessionaire do
not intend, by any provision of this Agreement, to create in any third party, any benefit or
right owed by one party, under the terms and conditions of this Agreement, to the other
party.
40. LAWS
It shall be the obligation of Concessionaire to comply with all laws, statutes, rules,
and regulations including, but not limited to, State of California labor laws, rules and
regulations and the parties agree that City shall not be liable for any violation by
Concessionaire (or Concessionaire's agent, sublessee or any party affiliated with
Concessionaire) thereof.
41. NO DAMAGES
Concessionaire acknowledges that City would not enter into this Agreement if it
were to be liable for damages (including, but not limited to, actual damages, economic
damages, consequential damages, lost profits, loss of rents or other revenues, loss of
business opportunity, loss of goodwill or loss of use) under, or relating to, this Agreement
or any of the matters referred to in this Agreement, including, without limitation, any and
all plans, permits, licenses or regulatory approvals, and CEQA documents. Accordingly,
Concessionaire covenants and agrees on behalf of itself and its successors and assigns,
not to sue City (either in its capacity as lessor in this Agreement or in its capacity as the
Concession Agreement - THEJETTYCDM, LLC Page 28
City of Newport Beach) for damages (including, but not limited to, actual damages,
economic damages, consequential damages, lost profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use) or monetary relief for any
breach of this Agreement by City or for any dispute, controversy, or issue between City
and Concessionaire arising out of or connected with this Agreement or any of the matters
referred to in this Agreement, including, without limitation, any and all plans, permits,
licenses or regulatory approvals, CEQA documents, or any future amendments or
enactments thereto, the parties agreeing that declaratory relief, injunctive relief, mandate
and specific performance shall be Concessionaire's sole and exclusive judicial remedies.
42. GOVERNMENT CLAIMS ACT
Concessionaire and City agree that in addition to any claims filing or notice
requirements in this Agreement, Concessionaire shall file any claim that Concessionaire
may have against City in strict conformance with the Government Claims Act
(Government Code sections 900 et seq.), or any successor statute.
43. COUNTERPARTS
This Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one (1) and the
same instrument.
[SIGNATURES ON NEXT PAGE]
Concession Agreement - THEJETTYCDM, LLC Page 29
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH ("City"),
OFFICE OF THE CITY ATTORNEY a California municipal corporation and
Date:
� By.
aron . Harp ti
i ttorne
�/
ATTEST:
Date: I/ / I J-2cp 2,3
By: Z . 4�2� 4
Leilani I. Brow
City Clerk
Attachments: Exhibit "A" — Property
Exhibit "B" — Premises
Exhibit "C"
Exhibit "D"
Exhibit "E"
charter city
Date: 2 1 v
By:
Grac eung
City nagger
CONCESSIONAIRE: THEJETTYCDM,
LLC, a California limited liability company
Date:
Signed in Counterpart
By:
Brian Huskey
Managing Mem
—Alcohol Conditions
— Parking
— Concessionaire Improvements
Exhibit "F" — Insurance
Exhibit "G" — Memorandum of Lease
Concession Agreement - THEJETTYCDM, LLC Page 30
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
Date:
By:
Aaron C. Harp
City Attorney
ATTEST:
Date:
By:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH ("City"),
a California municipal corporation and
charter city
Date:
By:
Grace K. Leung
City Manager
CONCESSIONAIRE: THEJETTYCDM,
LLC, a California limited liability company
Date:
By:
Brian Huskey
Managing Member
Attachments: Exhibit "A"
— Property
Exhibit "B"
— Premises
Exhibit "C"
— Alcohol Conditions
Exhibit "D"
— Parking
Exhibit "E"
— Concessionaire Improvements
Exhibit "F"
— Insurance
Exhibit "G"
— Memorandum of Lease
Concession Agreement - THEJETTYCDM, LLC Page 30
EXHIBIT "A"
PROPERTY
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PREMISES
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EXHIBIT "C"
ALCOHOL CONDITIONS
1. The applicant shall comply with all federal, state, and local laws, and all
conditions of the Alcoholic Beverage License. Material violation of any of those laws or
conditions in connection with the use is a violation and may be cause for revocation of
the use permit.
2. All owners, managers and employees selling alcoholic beverages shall
undergo and successfully complete a qualified training certification program in
responsible methods and skills for selling alcoholic beverages ("certification") within sixty
(60) calendar days of hire. This certification must be updated every three (3) years, unless
required in shorter intervals by the State of California, regardless of certificate expiration
date. The certification must meet the standards of the certifying/licensing body designated
by the State of California. Concessionaire shall comply with the requirements of this
section within sixty (60) calendar days of obtaining its license to serve alcoholic
beverages. Records of each owner's, manager's, and employee's successful completion
of their certification shall be maintained on the premises and shall be presented upon
request by a representative of the City of Newport Beach.
3. Alcohol will only be permitted to be sold on the Premises in the designated
indoor and outdoor areas from 5:00 p.m. to 9:00 p.m. Monday through Saturday, and 9:00
a.m. to 9:00 p.m. Sundays.
4. The exterior windows and doors of the facility shall be closed after 9:00 p.m.
5. The service and sale of packaged alcoholic beverages (i.e., bottled or
canned) for off -premise consumption shall be prohibited.
6. State Department of Alcoholic Beverage Control ("ABC") license types
classified as "Public Premises" shall be prohibited.
7. Approval of this Agreement does not permit Concessionaire to operate as
nightclub as defined by the Newport Beach Municipal Code.
8. Prior to operation with proper alcoholic beverage licensing, a
comprehensive security plan shall be submitted to the Newport Beach Police Department
for review and approval.
9. There shall be no exterior advertising or signs of any kind or type, including
advertising directed to the exterior from within, promoting or indicating the availability of
alcoholic beverages. Interior displays of alcoholic beverages or signs which are clearly
visible to the exterior shall constitute a violation of this condition.
10. No "happy hour" type of reduced price alcoholic beverage promotion shall
be allowed except when offered in conjunction with food ordered from the full service
menu.
11. No games or contests requiring or involving the consumption of alcoholic
beverages shall be permitted.
Concession Agreement - THEJETTYCDM, LLC Exhibit C-1
12. Concessionaire shall be responsible for the control of noise generated by
the Premises including, but not limited to, noise generated by patrons, food service
operations, and mechanical equipment. All noise generated by the proposed use shall
comply with the provisions of Chapter 10.26 and other applicable noise control
requirements of the Newport Beach Municipal Code. Pre-recorded music may be played
in the Premises, provided exterior noise levels outlined below are not exceeded. The
noise generated by the proposed use shall comply with the provisions of Chapter 10.26
(Community Noise Control) of the Newport Beach Municipal Code.
13. No outdoor sound system, loudspeakers, or paging system shall be
permitted in conjunction with the Premises without the written approval of City.
Concessionaire shall obtain all required City permits and approvals.
14. Concessionaire is required to take reasonable steps to discourage and
correct objectionable conditions that constitute a nuisance within the facility, or
surrounding public areas, sidewalks, or parking lots of the Premises during business
hours, if directly related to the patrons of the establishment.
15. No alcoholic beverages shall be consumed on any property adjacent to the
licensed premises under the control of the licensee.
16. There shall be no live entertainment or dancing allowed on the Premises
without Concessionaire first obtaining a Special Event Permit from City and must strictly
comply with the terms set forth in the Special Event Permit.
17. A Special Events Permit is required for any event or promotional activity
outside the normal operational characteristics of the approved use, as conditioned, or that
would attract large crowds, involve the sale of alcoholic beverages, include any form of
on -site media broadcast, or any other activities as specified in the Newport Beach
Municipal Code to require such permits.
18. There shall be no on -site radio, televisions, video, film, or other electronic
media broadcasts, including recordings to be broadcasted at a later time, which include
the service of alcoholic beverages, without first obtaining an approved Special Event
Permit issued by the City of Newport Beach, and subject to the terms and conditions set
forth in the Special Event Permit.
19. Any event or activity staged by an outside promoter or entity, where the
applicant, operator, owner or his employees or representatives share in any profits, or
pay any percentage or commission to a promoter or any other person based upon money
collected as a door charge, cover charge or any other form of admission charge is
prohibited.
20. Concessionaire, as the operator of the Premises, shall not share any profits
or pay any percentage or commission to a promoter or any other person based upon
monies collected as a door charge, cover charge, or any other form of admission charge,
including minimum drink orders or the sale of drinks.
Concession Agreement - THEJETTYCDM, LLC Exhibit C-2
21. The height of the boundary wall of the designated outdoor area where
alcohol may be served shall be not less than forty-two (42) inches tall, and shall enclose
the area. Fences, walls, or similar barriers shall serve only to define the outdoor area
where alcohol may be served and not constitute a permanent all weather enclosure. The
installation of roof coverings shall not have the effect of creating a permanent enclosure.
The use of any type of overhead covering shall be subject to review and approval by the
City Manager and necessary building permits.
22. Storage outside of the leased Premises shall be prohibited, with the
exception of the required trash container enclosure.
23. All trash shall be stored within the Premises, or otherwise screened from
view of neighboring properties, except when placed for pick-up by refuse collection
agencies. The trash enclosure shall remain closed at all times, except when being loaded
or while being collected by the refuse collection agency.
24. Concessionaire shall ensure that the trash dumpsters and/or receptacles
are maintained to control odors. This may include the provision of either fully self-
contained dumpsters or periodic steam cleaning of the dumpsters, if deemed necessary
by the Code Enforcement Division. Cleaning and maintenance of trash dumpsters shall
be done in compliance with the provisions of Title 14, including all future amendments
(including Water Quality related requirements).
25. Trash receptacles for patrons shall be conveniently located inside of the
Premises. The exterior of the business shall be maintained free of litter and graffiti at all
times. City shall provide for daily removal of trash, litter debris and graffiti from the
Premises. Concessionaire shall immediately notify City of any such issues at the
Premises.
26. Deliveries and refuse collection for the facility shall be prohibited between
the hours of 10:00 p.m. and 8:00 a.m., daily, unless otherwise approved by City Manager.
27. Concessionaire shall limit their use and operation of the Premises to the
establishment of an eating and drinking establishment as defined by Title 20 of the
Municipal Code, with the principal purpose for the sale or service of food and beverages
with sale and service of alcoholic beverages incidental to the food use.
28. The type of alcoholic beverage license issued by the California Board of
Alcoholic Beverage Control shall be a Type 41 (On -Sale Beer and Wine for a Bona Fide
Public Eating Place) in conjunction with the service of food as the principal use of the
facility. Any upgrade in the alcoholic beverage license shall be subject to the approval of
an amendment to this lease Agreement and shall require the approval of City Council.
29. Execution of this Agreement does not permit the Premises to operate as a
bar, tavern, cocktail lounge, or nightclub as defined by the Newport Beach Municipal
Code.
Concession Agreement - THEJETTYCDM, LLC Exhibit C-3
30. Food service from the regular menu shall be available to patrons up to thirty
(30) minutes before the scheduled closing time.
31. Strict adherence to maximum occupancy limits is required.
32. Should the Premises be sold or leased to a new tenant, subtenant, or
otherwise come under new ownership, operation, or management, an amendment to the
Agreement, or a new Agreement shall be required.
33. Notwithstanding the indemnification requirements set forth in the
Agreement, Concessionaire shall, to the fullest extent permitted by law, indemnify, defend
and hold harmless City, its City Council, its boards and commissions, officials, officers,
employees, and agents from and against any and all claims, demands, obligations,
damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities,
costs and expenses (including without limitation, attorneys' fees, disbursements and court
costs) of every kind and nature whatsoever which may arise from or in any manner related
(directly or indirectly) to City's approval of Concessionaire's use of the Premises. This
indemnification shall include, but not be limited to, damages awarded against the City, if
any, costs of suit, attorney's fees, and other expenses incurred in connection with such
claim, action, causes of action, suit or proceeding whether incurred by Concessionaire,
City, and/or the parties initiating or bringing such proceeding. Concessionaire shall
indemnify the city for all of City's costs, attorneys' fees, and damages, which City incurs
in enforcing the indemnification provisions set forth in this condition. Concessionaire shall
pay to the City upon demand any amount owed to the City pursuant to the indemnification
requirements prescribed in this condition.
Concession Agreement - THEJETTYCDM, LLC Exhibit C-4
EXHIBIT "D"
PARKING
Concession Agreement - THEJETTYCDM, LLC Exhibit D-1
EXHIBIT D - Parking
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any results obtained in its use.
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EXHIBIT "E"
CONCESSIONAIRE IMPROVEMENTS
Concession Agreement - THEJETTYCDM, LLC Exhibit E-1
EXHIBIT "F"
INSURANCE
1. Certificates of Insurance. Concessionaire shall provide certificates of insurance with
original endorsements to City as evidence of the insurance coverage required herein.
Insurance certificates must be approved by City's Risk Manager prior to execution of
this Agreement by the City. Current certification of insurance shall be kept on file with
City at all times during the term of this Agreement.
2. Signature. A person authorized by the insurer to bind coverage on its behalf shall sign
certification of all required policies.
3. Acceptable Insurers. All insurance policies shall be issued by an insurance company
currently authorized by the Insurance Commissioner to transact business of insurance
in the State of California, with an assigned policyholders' Rating of A- (or higher) and
Financial Size Category Class VII (or larger) in accordance with the latest edition of
Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager.
4. Coverage Requirements.
4.1. Workers' Compensation Coverage. Concessionaire shall maintain Workers'
Compensation Insurance at statutory limits and Employer's Liability Insurance at
One Million and 00/100 Dollars ($1,000,000.00) for his or her employees in
accordance with the laws of the State of California. Any notice of cancellation or
non -renewal of all Workers' Compensation policies must be received by City at
least thirty (30) calendar days (ten (10) calendar days written notice of non-
payment of premium) prior to such change. The insurer shall agree to waive all
rights of subrogation against City, its officers, agents, employees and volunteers
for all losses that relate in any way to this Agreement.
4.2. General Liability Coverage. Concessionaire shall maintain commercial general
liability insurance in an amount not less than Two Million and 00/100 Dollars
($2,000,000.00) per occurrence for bodily injury, personal injury, and property
damage, including without limitation, contractual liability. If commercial general
liability insurance or other form with a general aggregate limit is used, either the
general aggregate limit shall apply separately to the work to be performed under
this Agreement, or the general aggregate limit shall be at least twice the required
occurrence limit.
4.3. Products Liability Coverage. Concessionaire shall maintain products liability
insurance covering bodily injury and property damage for all activities of the
Concessionaire arising out of or in connection with products and services sold
by the Concessionaire under this Agreement, in an amount not less than two
million dollars and 00/100 ($2,000,000.00) combined single limit for each
occurrence.
Concession Agreement - THEJETTYCDM, LLC Exhibit F-1
4.4. Liquor Liability Coverage. Concessionaire shall maintain liquor liability insurance
in an amount not less than two million dollars and 00/100 ($2,000,000) per
occurrence for bodily injury, personal injury, and property damage.
Concessionaire shall obtain a liquor liability insurance policy that covers all
alcohol sold or distributed under this Agreement. The policy shall specifically
include assault and battery coverage as well as coverage for Concessionaire's
employees and patrons.
4.5. Professional Liability (Errors & Omissions) Insurance. Concessionaire shall
require that Concessionaire's consultants, contractors and/or subcontractors
providing any design, engineering, surveying or architectural services for the
Premises maintain professional liability insurance that covers the services to be
performed, in the minimum amount of one million dollars and 00/100
($1,000,000) per claim and two million dollars and 00/100 ($2,000,000) in the
aggregate. Any policy inception date, continuity date, or retroactive date must be
before the Effective Date of this Agreement and Concessionaire shall require that
Concessionaire's consultants, contractors and/or subcontractors agree to
maintain continuous coverage through a period no less than three (3) years after
completion of the services performed.
4.6. Builder's Risk Insurance. During construction, Concessionaire shall require that
Concessionaire's construction contractors and subcontractors maintain Builders
Risk insurance or an installation floater as directed by City, covering damages to
the work for "all risk" or special causes of loss form with limits equal to one
hundred percent (100%) of the completed value of the work, with coverage to
continue until final acceptance of the work by Concessionaire and City. City shall
be included as an insured on such policy, and Concessionaire shall provide City
with a copy of the policy.
4.7. Pollution Liability Insurance. Concessionaire shall require that Concessionaire's
construction contractors and subcontractors maintain a policy providing
contractor's pollution liability ("CPL") coverage with a total limit of liability of no
less than two million dollars and 00/100 ($2,000,000) per loss and in the
aggregate per policy period dedicated to this project. The CPL shall be obtained
on an occurrence basis for a policy term inclusive of the entire period of
construction. If all or any portion of CPL coverage is available only on a claims -
made basis, then a 10-year extended reporting period shall also be purchased.
The CPL policy shall include coverage for cleanup costs, third -party bodily injury
and property damage, including loss of use of damaged property or of property
that has not been physically injured or destroyed, resulting from pollution
conditions caused by contracting operations. Coverage as required in this
paragraph shall apply to sudden and non -sudden pollution conditions resulting
from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic
chemicals, liquids, or gases, waste materials, or other irritants, contaminants, or
pollutants. The CPL shall also provide coverage for transportation and off- site
disposal of materials. The policy shall not contain any provision or exclusion
Concession Agreement - THEJETTYCDM, LLC Exhibit F-2
(including any so-called "insured versus insured" exclusion or "cross -liability"
exclusion) the effect of which would be to prevent, bar, or otherwise preclude any
insured or additional insured under the policy from making a claim which would
otherwise be covered by such policy on the grounds that the claim is brought by
an insured or additional insured against an insured or additional insured under
the policy.
4.8. Automobile Liability Coverage. Concessionaire shall maintain automobile
insurance covering bodily injury and property damage for all activities of the
Concessionaire arising out of or in connection with the services to be performed
under this Agreement, including coverage for any owned, hired, non -owned or
rented vehicles, in an amount not less than Two Million Dollars and 00/100
Dollars ($2,000,000.00) combined single limit for each occurrence.
4.9. Fire and Extended Coverage. Concessionaire shall maintain fire and extended
coverage insurance, together with insurance against vandalism, theft and
malicious mischief, on the Concessionaire Improvements, trade fixtures, signs,
equipment, personal property, inventory, and all other Alterations on or upon the
Premises from loss or damage to the extent of their full replacement value.
4.101oss of Rent. Concessionaire shall maintain loss of rent insurance insuring that
the Rent will be paid to City for a period up to six (6) months if the Premises are
destroyed or rendered unusable or inaccessible for commercial purposes by a
risk insured under a special form property coverage policy including vandalism
and malicious mischief endorsements.
5. Endorsements. Each insurance policy shall be endorsed with the following specific
language:
5.1. Additional Insured Status. The City, its elected or appointed officers, agents,
officials, employees and volunteers, and the State of California, its elected or
appointed officers, officials, employees, agents and volunteers, are to be covered
as additional insureds, with respect to liability arising out of work performed by
or on behalf of the Concessionaire.
5.2. Primary and Non -Contributory_. This policy shall be considered primary insurance
as respects to City, its elected or appointed officers, officials, employees, agents
and volunteers as respects to all claims, losses, or liability arising directly or
indirectly from the Concessionaire's operations or services provided to City. Any
insurance maintained by City, including any self -insured retention City may have,
shall be considered excess insurance only and not contributory with the
insurance provided hereunder.
5.3. Liability Insurance. This insurance shall act for each insured and additional
insured as though a separate policy had been written for each, except with
respect to the limits of liability of the insuring company.
Concession Agreement - THEJETTYCDM, LLC Exhibit F-3
5.4. Waiver of Subrogation. The insurer waives all rights of subrogation against City,
its elected or appointed officers, agents, officials, employees and volunteers
or shall specifically allow Concessionaire or others providing insurance
evidence in compliance with these requirements to waive their right of
recovery prior to a loss. Concessionaire hereby waives its own right of
recovery against City, and shall require similar written express waivers from
each of its consultants, contractors or subcontractors.
5.5. Loss Payee. City shall be included a loss payee under the commercial property
insurance.
6. Additional Requirements.
6.1. Reporting Provisions. Any failure to comply with reporting provisions of the
policies shall not affect coverage provided to City, its elected or appointed
officers, officials, employees, agents or volunteers.
6.2. Notice of Cancellation. The insurance provided by this policy shall not be
suspended, voided, canceled, or reduced in coverage or in limits, by either party
except after thirty (30) calendar days (ten (10) calendar days written notice of
non-payment of premium) written notice has been received by City.
6.3. In the event City determines that (i) the Concessionaire's activities on the
Property creates an increased or decreased risk of loss to the City, (ii) greater
insurance coverage is required due to the passage of time, or (iii) changes in the
industry require different coverage be obtained, Concessionaire agrees that the
minimum limits of any insurance policy required to be obtained by
Concessionaire or Concessionaire's consultants, contractors or subcontractors,
may be changed accordingly upon receipt of written notice from City. With
respect to changes in insurance requirements that are available from
Concessionaire's then -existing insurance carrier, Concessionaire shall deposit
certificates evidencing acceptable insurance policies with City incorporating such
changes within thirty (30) calendar days of receipt of such notice. With respect
to changes in insurance requirements that are not available from
Concessionaire's then- existing insurance carrier, Concessionaire shall deposit
certificates evidencing acceptable insurance policies with City, incorporating
such changes, within ninety (90) calendar days of receipt of such notice.
6.4. Any deductibles applicable to the commercial property or insurance purchased
in compliance with the requirements of this section shall be approved by City.
6.5. Concessionaire and Concessionaire's consultants, contractors and/or
subcontractors shall be subject to the insurance requirements contained herein
unless otherwise specified in the provisions above or written approval is granted
by the City. Concessionaire shall verify that all consultants, contractors and/or
Concession Agreement - THEJETTYCDM, LLC Exhibit F-4
subcontractors maintain insurance meeting all the requirements stated herein,
and Concessionaire shall ensure that City is an additional insured on insurance
required from contractors, consultants and/or subcontractors.
6.6. For General Liability coverage, contractors, consultants and/or subcontractors
shall provide coverage with a format at least as broad as provided by Insurance
Services Office form CG 203 80413.
6.7. If Concessionaire maintains higher limits than the minimums shown above, the
City requires and shall be entitled to coverage for the higher limits maintained by
Concessionaire. Any available insurance proceeds in excess of the specified
minimum limits of insurance and coverage shall be available to the City.
6.8. Concessionaire shall give City prompt and timely notice of any claim made or
suit instituted arising out of or resulting from Concessionaire or Concessionaire's
agents, representatives, consultants, contractors or subcontractors performance
under this Agreement.
6.9. Concessionaire shall provide certificates of insurance, with original
endorsements as required above, to City as evidence of the insurance coverage
required herein. Insurance certificates must be approved by City prior to
commencement of work or issuance of any permit. Current certification of
insurance shall be kept on file with City at all times during the term of this
Agreement.
Concession Agreement - THEJETTYCDM, LLC Exhibit F-5
EXHIBIT "G"
MEMORANDUM OF LEASE
RECORDING REQUESTED AND
WHEN RECORDED RETURN TO:
Office of the City Clerk
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
[Exempt from Recordation Fee - Govt. Code §§. 6103 and 27383]
MEMORANDUM OF CONCESSION AGREEMENT
This Memorandum of Concession Agreement ("Memorandum") is dated
and is made between City of Newport Beach, a California municipal
corporation and charter city ("City") and THEJETTYCDM, LLC, a California limited liability
company ("Concessionaire"), concerning the Premises described in Attachment "A"
attached hereto and by this reference made a part hereof.
For good and adequate consideration, City leases the Premises to Concessionaire and
Concessionaire leases the Premises from City, for the term and on the provisions
contained in the Concession Agreement ("Agreement") dated ,
including without limitation provisions prohibiting assignment, subleasing, and
encumbering said leasehold without the express written consent of City in each instance,
all as more specifically set forth in said Agreement, which said Agreement is incorporated
in this Memorandum by this reference.
The term is five (5) years, beginning 2022, and ending
, 2027, on the same terms and conditions contained in the Agreement.
This Memorandum is not a complete summary of the Agreement. Provisions in this
Memorandum shall not be used in interpreting the Agreement's provisions. In the event
of conflict between this Memorandum and the Agreement, the Agreement shall control.
Execution hereof constitutes execution of the Agreement itself.
[SIGNATURES ON NEXT PAGE]
Concession Agreement - THEJETTYCDM, LLC Exhibit G-1
IN WITNESS WHEREOF, the Parties hereto have executed this Memorandum as
of the date first written above.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:
By:
4 Aa arp
City Attorney
ATTEST:
Date:
in
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH ("City"),
a California municipal corporation and
charter city
Date:
By:
Grace K. Leung
City Manager
CONCESSIONAIRE: THEJETTYCDM,
LLC, a California limited liability company
Date:
By:
Brian Huskey
Managing Member
Concession Agreement - THEJETTYCDM, LLC Exhibit G-2
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of } ss.
On 20 before me,
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature (seal)
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual who
signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity
of that document.
State of California
County of _ } ss.
On 20 before me,
Notary Public, personally appeared
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(seal)
Concession Agreement - THEJETTYCDM, LLC Exhibit G-3
ATTACHMENT "A"
PREMISES
Concession Agreement - THEJETTYCDM, LLC Exhibit G-4
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