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HomeMy WebLinkAboutReso 1981-10731 RESOLUTION NO. 10731 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AGREEMENT BE'IWEEN THE CITY OF CHULA VISTA AND JIMMY'S FAMILY OF FINE RESTAURANTS, INC. FOR THE MAINTENANCE, OPERATION AND IMPROVEMENT OF THE RESTAURANT AND BAR TO BE KNOWN AS JIMMY'S ON THE GREEN AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT The City Council of the City of Chula Vista does hereb{ resolve as follows: NON, THEREFORE, BE IT RESOLVED by the City Council of the Ci ty of Chula Vista that that certain agreement between THE CITY OF CHULA VISTA, a municipal corporation, and JIMMY'S FAMILY OF FINE RESTAURANTS, INC., for the maintenance, operation and improvement of the restaurant and bar to be known as Jimmy's on the Green dated the 2Znd day of December , 19 81 , a copy of which is attached hereto and incorporated herein, the same as though fully set forth herein be, and the same is hereb{ approved. BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista be, and he is hereb{ authorized and directed to execute said agreement for and on behalf of the City of Chula Vista. Presented by ~ -E. R. Asmus, Manager .. -, APproved.~rm by ~_ ~ ,I"...t_> Assistant City George D. Lindberg, City Attorney ADOPTED AND APPROVED by the CITY COUNCIL of the CITY OF CHULA VISTA, CALIFORNIA, this 22nd day of December 198_1-, by the following vote, to-wit: Scott, Cox, Gillow, Campbell, McCandliss Councilmen AYES: NAYES: Councilmen None ABSENT: Councilmen None ATT,jJ1UU:e.- ~2i1;/~~MaYO' (/ City C erk STATE m' CALIFORNIA) COUNTY OF SAN DIEGO) ss. CITY OF CHULA VISTA) I , Jo.- .... . I I tC" ity of Chula Vista I, , City Clerk of the City of Chula Vista, California, DO HEREBY CERTIFY that the above is a full, true and correct copy of Resolution No. and that the same has not been amended or repealed. DATED-- City Clerk Form No. 342 Rev. 7/81 12/15/81 LEASE AGREEMENT WITH JIMMY'S FAMILY OF FINE RESTAURANTS, INC., A CALIFORNIA CORPORATION, AND THE CITY OF CHULA VISTA FOR THE MAINTENANCE, OPERATION AND IMPROVEMENT OF THE RESTAURANT AND BAR PREMISES AT THE CHULA VISTA MUNICIPAL GOLF COURSE TO BE KNOWN AS JIMMY'S ON THE GREEN THIS AGREEMENT, made and entered into this 22nd day of December , 1981, by and between THE CITY OF CHULA VISTA, a municipal corporation, hereinafter called "Lessor", and JIMMY'S FAMILY OF FINE RESTAURANTS, INC., a California corporation, hereinafter called "Lessee"; WIT N E SSE T H ----------- WHEREAS, the City of Chula Vista now desires to enter into a lease agreement for the expansion, improvement, operation and maintenance of certain premises heretofore utilized for restaurant purposes at the Chula Vista Municipal Golf Course with Jimmy's Family of Fine Restaurants, Inc., a California corporation, and WHEREAS, it is the desire of the City in entering into this lease agreement that said Lessee shall be solely and financially responsible for certain fixtures and appurtenances within said premises in accordance with certain plans attached herein and incorporated by reference as if set forth in full, and WHEREAS, Jimmy's Family of Fine Restaurants, Inc. desires to became Lessee of said premises in exchange for the rights, conditions, terms and obligations of this agreement and with the understanding that City at its sole expense will make structural modifications and enlargements to the existing premises costing approximately eight hundred and one thousand, two hundred and fifty dollars ($801,250) to assist in the overall improvements contemplated herein so that Lessee thereafter can operate and maintain said facility in the business of food and beverage service and related activities. NOW, THEREFORE, IT IS MUTUALLY UNDERSTOOD AND AGREED by and between the parties hereto as follows: 1. LEASE PREMISES. For and in consideration of the rent hereinafter specified and all of the covenants, conditions and agreements hereinafter set forth, including most specifically the requirements for the installation of improvements in accordance with and concurrent with the terms of this agreement, Lessor agrees to lease to Lessee: A. Those certain premises with the appurtenances and adjacent properties thereto as set forth herein to be used exclusively for the operation and maintenance of a bar and restaurant, including a coffee shop and banquet facilities as are more particularly described in certain plans and descriptions attached hereto and made a part hereof. B. Said premises shall include all of the clubhouse located at the Chula Vista Municipal Golf Course except for that portion of the premises which is presently used for the operation of the golf course pro shop and offices and the electric golf cart storage room. -1- 4-10 '73/ C. In addition, said lease premises shall include the grounds immediately adjacent to the existing building and such other areas surrounding the building as may be more particularly described in future lease agreements so as to provide for the expansion of the existing facilities. Said premises are more particularly described as follows: A portion of the Chula Vista Municipal Golf Course clubhouse in the Sweetwater Valley to consist of approximately 15,000 square feet of space to be used as a restaurant and bar facility, together with any additional portion of said premises within said Chula Vista Municipal Golf Course as designated by the City Manager and mutually agreeable to Lessee. 2. ADDITIONAL PRIVILEGES. In addition to the use of said premises, Lessee shall establish concessions at said Municipal Golf Course consisting of vending machines for the purpose of dispensing packaged food and beverages to the golfers. The placement of such vending machines shall be designated and approved by the City Manager. Nothing in this lease shall require Lessee to operate an auxiliary food service facility (Halfway House) to serve the needs of the golfer provided said vending machines are provided and maintained are hereinabove contemplated. It is further understood and agreed that nothing in this lease shall prevent or interfere with individual golfers and golf associations from bringing food or beverages upon the Municipal Golf Course or arranging for any activities thereon as approved by the City Manager, except that portion of the golf course speci- fically leased and demised to Lessee as set forth in Section 1. 3. LESSEE'S COMMITMENT. Lessee agrees to use the pre- mises solely for the purpose for which they are demised and to diligently conduct the business so as to produce a gross income comparable with like business operations in light of current and future market conditions and failure to so conduct said business shall be grounds for termination of this lease. 4. USE AND HOURS. Lessee agrees to conduct the business on such premises and to keep said restaurant and bar open during the customary hours of similar operations but not in excess of those permitted under State law. It is further understood that that portion of the premises devoted to the coffee shop operation primarily for service to the golfers shall be open and offering full services during such times as the course is normally in use by golfers. The precise time schedules and numbers of days per week when such coffee shop service will be available shall be subject to the approval of the City Manager. In establishing time schedules and the number of days per week when said coffee shop service shall be open and available, the City Manager shall take into consideration the profitability of the operation and the needs of the golfer and when the overall availability of other food service facilities offered by Lessee either through packaged foods and refreshments or other factors are considered. Nothing contained in this section shall limit the City Manager in establishing open hours so long as the non-profitability factor is not unreasonable, in view of the golfers needs. 5. FIXTURIZATION OF complete fixturization of the heretofore known as the Glenn PREMISES. remodeled, Restaurant Lessee hereby agrees enlarged premises at the Chula Vista to 1f-/~13/ -2- Municipal Golf Course in accordance with those plans denoted as Sheets D-l and D-2, K-l through K-18, and 101 through 114, attached hereto and incorporated herein by reference as if set forth in full. It is agreed and understood that full fixturization of the premises shall be completed within six months of the execution of this lease provided, however, completion of fixturization may be extended by City for such periods as necessary if through no fault of his own Lessee is unable to fulfill his obligation within the period specified herein. It is understood and agreed that financial inability to complete the fixturization work as contemplated herein shall not be deemed cause for not completing the project within six months. If is further understood and agreed that Lessee shall be fully responsible for the full cost of only those fixtures and appurtenances denoted on said plans as the responsibility of Lessee. Failure of Lessee to complete fixturi- zation of the premises as hereinabove contemplated shall be deemed a default by Lessee as defined under Section 7 A (5) of this lease agreement. 6. TERM OF LEASE. The term of this lease shall be for a period of twenty (20) years commencing on the date that Lessee and Lessor agree that the building is ready for occupancy as deter- mined by the Director of Building and Housing and running to and until It is further understood and agreed that Lessor hereby grants Lessee the following options: A. An option to extend this lease agreement for a period of five years after the expiration of said initial term without change as to terms and contitions except as may be mutually agreed between the parties hereto. B. In the event that said option is exercised, the City hereby grants a second option to extend this lease agreement for a period of five years after the expiration of said extension, as provided hereinabove, subject to any mutually agreed revisions. C. Lessee shall give Lessor written notice of the intention to exercise said options as set forth in A and B at lease six (6) months prior to the expiration of the initial term of this agreement or the extended term pursuant to A above. 7. DEFAULT BY LESSEE. A. Default Defined. For the purpose of this lease, the term "default by Lessee" means and includes the occurrence of anyone or more of the following: 1. Failure of Lessee to pay when due any monthly rent installment, taxes, premiums for insurance required to be maintained under this lease, and other sums of money required to be paid by Lessee under this lease. 2. Commencement of any action or proceedings by or against Lessee under any insolvency, bankruptcy, or trustee, or other person to take possession of all or substantially all of the assets of Lessee or /T- / () 7JJ/ -3- IT - j() 72/ execution by Lessee of a general assignment for the benefits of its creditors or upon the assignee's promise to pay creditors if such action, appointment or assignment continues for a period of thirty (30) days after its commencement. 3. Lessee's vacating or abandonment of the premises. 4. Subjection of any right or interest of Lessee to attachment, execution, or other levy or to seizure under legal process if not released within fifteen (15) days. 5. Breach by Lessee of any term, condition, or covenant of this lease except those mentioned in Paragraphs 1 through 4 above, not cured within five (5) days after Lessor gives Lessee written notice of the breach or in the case of breaches reasonably requiring more than five (5) days to be cured, not cured within a reasonable time after such written notice is given (not to exceed sixty (60) days) provided that curing of the breach is commenced within said five days. B. Lessor's Remedies: 1. Termination of Lease - In the event of default by Lessee, Lessor shall have in addition to all other rights and rffinedies including injunctions and other equitable relief provided by law, the right without prior notice or demand upon Lessee to terminate this lease and Lessee's right to possession of the premise by giving written notice of the termination to Lessee and to recover from Lessee: a. The worth of the time of award of the unpaid rent, taxes and other sums equivalent to rent required to be paid by Lessee under this agreement that had been earned at the time of termination. b. The worth at the time of award of the amount by which the unpaid rent, taxes and other sums equivalent to rent required to be paid by Lessee under this lease would have been earned after termination until the time of award exceeds the amount of such rental loss that Lessee proves could have been reasonably avoided. c. The worth at the time of award of the amount by whiCh the unpaid rent, property and other sums equivalent to rent required to be paid by Lessee under this lease for the balance of the term after the time of award exceeds the amount of such rental loss that Lessee proves could be reasonably avoided, and d. Any and all other amounts necessary to compensate Lessor for all the detriment proximately caused by th~ default by Lessee or which in the ordinary course of things would be likely to result therefrom including, but not limited to, the cost and expenses incurred by Lessor (1) in retaking possession of the -4- premises; (2) in making repairs of and alterations to the premises reasonably necessary to return the premises to good condition for use permitted by this lease and in otherwise preparing the premises for reletting; (3) in removing, transporting and storing any of Lessee's property left at the premises although Lessor shall have no obligation to remove, transport, or store any of such property; and (4) in reletting the premises including, but not limited to, brokerage commissions, advertising costs and attorney's fees. 2. Continuation of Lease - Unless Lessor elects to terminate this lease and Lessee's rights to possession as provied in I-Termination of Lease (above), this lease shall continue in full force and effect after default by Lessee and Lessor may enforce all its rights and remedies under this lease including, but not limited to, the right to recover rent, taxes and other sums equivalent to rent required to be paid by Lessee under this lease as they become due under this lease. 3. Definition of "Worth at the Time of Award" - The "worth at the time of award" of the amount mentioned in "I-Termination of Lease (a) and (b)" above shall be computed by including interest at the rate of 10% per annum. The "worth at the time of award" of the amount mentioned in "I-Termination of Lease (c)" above shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award, plus 4%. Notwithstanding any other provision of this lease, however, all interest payable to Lessor under the terms of this lease shall not exceed interest computed at the maximum rate permitted by law. 8. FAILURE TO PAY RENT AND LATE PAYMENTS. It is further understood and agreed that failure of Lessee to pay rent as required herein shall be grounds for termination and should City exercise its right of termination upon such grounds, a subsequent offering by Lessee to pay the rent shall be of no effect and termination shall be final at the option of the City. 9. RENTAL PAYMENTS. Lessee agrees to pay to Lessor a minimum rental payment of EIGHT THOUSAND DOLLARS ($8,000) per calendar month or an amount equal to five percent (5%), whichever is greater, of all gross sales as herein defined for the initial term of this lease and any extension thereof pursuant to the options granted to Lessee. The base rent payment of EIGHT THOUSAND DOLLARS ($8,000) per month shall be adjusted annually on the anniversary date of this lease to reflect the cost of living increase or decrease as indicated by the U. S. Department of Commerce Consumer Price Index for San Diego County. All sums to be paid by Lessee to Lessor shall be in lawful money of the United States of America and shall be paid prior to notice or demand at the address designated hereafter. Within ten (10) days after the end of each calendar month of the term hereof, commencing with the tenth day of the month following the commencement of this lease agreement as hereinafter provided, and ending with the tenth day of the month next succeeding in the last month of the term of this lease agreement, Lessee shall If~ /03/ -5- furnish to City a statement in writing, certified by Lessee to be correct, showing the total gross sales made in the improved facility and appurtenances during the preceding calendar month. Should Lessee's gross sales be less than ONE HUNDRED AND SIXTY THOUSAND DOLLARS ($160,000) in any calendar month, then Lessee shall owe no payment other than the base rent in the amount of EIGHT THOUSAND DOLLARS ($8,000) for that calendar month. All sums due shall be delinquent on the tenth day of each month and subject thereafter to a penalty of ten percent (10%) per month, if unpaid. 10. CONSUMER PRICE INDEX ADJUSTMENT. At the end of each three (3) year lease period and every three (3) year period thereafter, the minimum annual rent as provided in Paragraph 9 above shall be adjusted to reflect any increase or decrease in the cost of living during the three year lease period just ended based upon the U. S. Department of Commerce Consumer Price Index for San Diego Metropolitan Area (1967=100), subgroup all "items". The index number for the month during which the term of this lease commences shall be the "Base Index Number" and the corresponding index number for the last month of each lease year shall be the "current index number". The Base Index Number shall be subtracted from the current index number, and the result obtained shall be converted to a percentage increase (or decrease) of the Base Index Number. The minimum monthly rental as provided in Paragraph 9 above shall then be increased by such cumulative three (3) year percentage increase and the result obtained shall be the new minimum base rent of the premises effective as of the first day of the new three year period. Lessee shall continue payment of the minimum rent rate in effect for the expiring period until notified by Lessor of any increase or decrease in such minimum monthly rental. Such notification shall be given within three (3) calendar months following the last month of each three year period just ended and shall include a memorandum showing the calculations used by Lessor in determining the new minimum monthly rental. On the first day of the calendar month immediately succeeding receipt of such notice, Lessee shall commence payment of the new monthly rental specified in the notice, and shall also pay to Lessor with respect to the month (s) already expired the excess of the required monthly rentals specified in the notice over the then monthly amounts actually paid by Lessee. If the new minimum monthly rental is less than the previous three year period just ended, Lessee may deduct from future monthly rental payments the full sum of all excess rental above the new monthly amount. Notwithstanding any provisions contained in this paragraph, Lessee's monthly rental increase shall not exceed 6% per annum or 18% for each of the three (3) year lease period. In the event, however, the "current index number" shall be less than the preceeding "current index number", the minimum monthly rental for the three (3) year periOd about to commence shall be reduced by the amount equal to such percentage decrease. Notwithstanding the foregoing, in no event shall the minimum monthly rent ever be less than the minimum monthly rent specified in Paragraph 9 above ($8,000) and further, no decrease in excess of 6% shall be effected even if the percentage decrease in the "index" calculates to a percentage in excess of 6%. If publication of the "Index" shall be discontinued, the most cOIllparable index published by any branch or department of the U. S. Government shall be substituted, and such adjustments in the method of cOIllputation shall be made as may be necessary to carry out the intent of this cost of living provision. f( ~ / ()?31 -6- 11. AUDIT RIGHTS. The tenn "gross sales" as used in this lease agreement shall include the entire gross receipts of every kind and nature from sales and services made in the improved facility and appurtenances whether upon credit or for cash, in every department operating in the improved facility and the appurtenances, whether operated by Lessee or by others, including payments received from pay telephones and all other mechanical vending machines located on the premises excepting therefrom any rebates and any refunds to customers and the amount of all sales tax receipts which has to be accounted for by Lessee to any government or governmental agency. Lessee shall keep full, complete and proper books, records and accounts of its daily gross sales, both from cash and on credit, of each separate department and concession at any time operated within the improved facility and appurtenances. City, its agents and employees shall have the right at any and all reasonable times during regular business hours to examine and inspect all of the boOks and records of Lessee including any sales tax reports pertaining to the business of Lessee conducted in, upon, or from the improved facility and appurtenances, but in no event more often than once each month during the tenn of this lease agreement for the purpose of investigating and verifying the accuracy of any statement of gross sales. The acceptance by Lessor of payment of percentage rent provided above shall be without prejudice to Lessor's right to require an audit of Lessee's business by a Certified Public Accountant. The cost of such audit shall be paid by Lessor except as otherwise provided herein. Any such audit perfonned by a Certified Public Accountant selected by Lessor shall be binding upon the parties. If such audit shall disclose an understatement of gross sales of 2% or more of the gross sales theretofore reported by Lessee for the period covered by the audit, Lessee shall pay to Lessor the cost of the audit and the additional percentage rent found due times two. For example, if such audit discloses an understatement of gross sales representing 4%, and the amount of the understatement represents $2,000 based on gross sales times the percentage rent factor, Lessee would owe Lessor the cost of the audit and, in addition thereto, $4,000 by reason of the understatement. ($2,000 for actual rent owed and $2,000 special penalty) 12. TAXES. During the tenn of this lease agreement, Lessee shall pay prior to delinquency all taxes assessed against and levied upon fixtures, furnishings, equipment and all other personal property of Lessee contained within the improved facility and appurtenances. Lessee shall be solely responsible for any possessory interest taxes levied against the improved facility and appurtenances. 13. PARKING AND COMMON FACILITIES. The City agrees to furnish and maintain adequate parking facilities for the needs of Lessee and the patrons of the Lessee arising from the operation of the improved facility and appurtenances during the full term of this lease agreement or any extension thereof. Provided, however, Lessee shall be responsible for the repair and maintenance of any lighting standards in said parking lot and shall assume the full cost for said lighting. It is further understood and agreed that City may make such use of the parking facilities as is necessary to accommodate the operation of the City-owned golf course; provided, however, Lessee is authorized and permitted to designate by appropriate markings on up to 125 parking spaces "for restaurant parking only". The spaces intended to be designated shall be subject to the approval of the City Manager. It is further understood and agreed that it is not the intent of this If- /jl3/ -7- provision to authorize the Lessee or to require the Lessor to enforce said restrictive parking by legal means. It is further the intent of this provision to permit the Lessee, by voluntary means to encourage non-restaurant patrons to seek parking accommodations at locations not so designated. It is further understood and agreed that at such time as the existing parking facility becomes inadequate to accommodate the needs of both City and Lessee, the City and Lessee shall enter into a separate agreement for the expansion of said parking facility with the full cost of said expansion exclusive of land value if expansion occurs on City-owned land, to be borne equally between City and Lessee. 14. ALTERATIONS. Lessee shall not make, or suffer to be made, any alterations to the improved facility that affect the exterior or interior of the improved facility and appurtenances of any structural, mechanical or electrical component of the improvement facility and appurtenances without the prior written consent of City which shall not be unreasonably withheld. All structural improvements to the facility and appurtenances and subsequent alterations, other than trade fixtures, shall become at once part of the realty and the property of the City. Nothwithstanding the foregoing, Lessee shall have the right, from time to time during the term of this lease agreement, to install such interior partitions and to cut such holes in the walls and/or flooring for the conduct of Lessee's business as Lessee deems desirable. 15. LESSEE'S RESPONSIBILITY TO PROTECT LESSOR FROM MECHANIC'S LIENS. Lessee agrees: (1) to pay for all labor and services performed for, and for all materials used by and furnished to, Lessee or any contractor employed by Lessee with respect to the premises, whether or not such labor, service, or materials were related to trade fixtures or other works of improvement; (2) to indemnify and hold Lessor and the premises harmless and free from liabilities, liens, claims, encumbrances, and judgments created or suffered by reason thereof. In the event that any claim of lien be filed against the premises, or any action affecting the title to such property be commenced, Lessee shall forthwith give the Lessor written notice thereof. Nothing herein shall prevent Lessee from contesting in good faith the validity of any lien, claim, encumbrance, or judgment, provided, in the case of mechanics' or material men's liens, Lessee obtains and records appropriate bonds as provided by law to remove the recorded liens created thereby. 16. MAINTENANCE OF PREMISES. Lessee agrees to assume full and complete responsibility for the interior and exterior of the leased premises excluding major structural defects or repairs. Lessee agrees to replace all damaged or broken fixtures including, but not limited to, windows, furnishings, booths, drapes, lighting fixtures, carpeting and all bar and kitchen equipment. Lessee further agrees to assume full maintenance of all air conditioning units, including the necessary replacement thereof. Lessee agrees to maintain all drainage, waste and vent pipes inside of the building. Lessee shall, at all times during the term of this agreement and at Lessee's sole cost and expense, repair the exterior walls, roof and all roof-mounted equipment of the improved facility and appurtenances and keep same in good order and sanitary condition. City shall, at the inception of this lease agreement, provide adequate sewer, water and electrical service to the premises and, further, at City's sole cost and expense, maintain, Il~ It! 73/ -8- repair and keep in good and sanitary condition all areas, including all parking facilities, landscaping, sidewalks, driveways, and all other uses and/or facilities surrounding or in the immediate area, the immediate area being defined as one hundred (100) yards in any direction from any exterior wall of the improved facility and appurtenances. Provided, however, Lessee shall be responsible for removing any blockage that may occur in the underground sewer lateral running from Lessee's waste and vent lines inside of the building to the public sewer line serving the premises. Lessor shall be responsible for repair or replacement of the main sewer lateral running from the exterior of said premise to the public sewer line. Should Lessor fail to respond to or comply with any request by Lessee to repair or keep in good order and sanitary condition such areas as are Lessor's sole responsibility within (24) hours of making such request to repair to any agent or employee by any agent or employee of Lessee, Lessee is herewith authorized but not obligated to perform any such item of repair or incur whatever expense is necessary, in the sole opinion of Lessee, to repair and keep in good order and sanitary condition, the immediate area of the improved facility and appurtenances. Lessee may, at their sole option, either deduct the expense from the next remittance due City or, apply to City for reimbursement for any expense incurred hereof, and, should any such reimbursement not be received by Lessee within thirty (30) days of making such request, deduct the expense from the next remittance due City. If no remittance is due, or if the remittance due is insufficient to reimburse Lessee for the entire expense incurred hereof, deduct the entire expense or the balance of the entire expense from the next remittance due City. 17. COMPLIANCE WITH LAW. Lessee shall comply with all of the requirements of all municipal, state and federal authorities now in force or which may hereafter be in force pertaining to the use of the improved facility and appurtenances and shall faithfully observe in said use all municipal ordinances and state and federal statutes now in force or which shall hereinafter be in force. The judgment of any court of competent jurisdiction, or the admission of Lessee in any action or proceeding against Lessee, whether City is a party thereto or not, that Lessee has violated any such order or statute in said use shall be conclusive between City and Lessee. Lessee shall not commit, or suffer to be committed, any waste or nuisance upon the improved facility and appurtenances. 18. INSURANCE. A. Liability Insurance. During the term of this lease or any extension thereof, Lessee shall obtain an insurance policy from a responsible and solvent corporation authorized to issue such policy under the laws of the State of California, which policy shall insure the parties to this lease against loss or liability imposed by law for injury to or death of any person or damage to property arising from or growing out of the use of the leased premises pursuant to this lease, to the minimum amount as follows: TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) property damage; SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($750,000.00) for death or injury to anyone person in anyone accident; or a single limit liability policy in the amount of TWO MILLION DOLLARS ($2,000,000.00); TWO MILLION DOLLARS ($2,000,000.00) for death or injury to two or more persons in anyone accident. /{- IrJ?51 -9- Such policy shall include "products" liability coverage and minimum liquor liability of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per occurrence. B. Business Interruption Insurance. Lessee shall, at its sole expense and cost, maintain business interruption insurance issued under the laws of the State of California, insuring that the minimum annual rent provided herein will be paid to Lessor for a period of up to one year if the premises are destroyed or rendered inaccessible as a result of fire or other casualty. C. FIRE/EARTHQUAKE INSURANCE. Lessee shall maintain fire/earthquake insurance sufficient to cover the cost of replacement of the original structure as transferred to Lessee and shall provide fire/earthquake insurance sufficient to cover the cost of the replacement of the improvements and additions constructed as a part of the original capital investment for improvements or such improvements as may thereafter be constructed in accordance with the provisions of this lease. In the event of the destruction by fire or the elements or other cause, Lessee agrees to proceed with the reconstruction of the premises within one hundred and eighty (180) days; provided, however, that if it is mutually agreed by City and Lessee that the premises should not be reconstructed, this lease shall terminate. In the event of such termination, Lessee shall immediately surrender the premises to City and Lessee shall pay to the City the full amount of insurance proceeds. Further, Lessee shall provide insurance on all of his own fixtures located on the premises. 19. WORKER'S COMPENSATION. Lessee shall maintain a policy of Worker's Compensation Insurance to cover Lessee's em- ployees and shall provide Social Security coverage for such employees. 20. INSURANCE CERTIFICATES FILED WITH CITY CLERK. Lessee shall file the above named policies or certificates thereof with the City Clerk of the City of Chula Vista. The Risk Manager may, at any time, require Lessee to replace any such policy or certificate with another policy or certificate. 21. ABANDONMENT. Lessee shall not vacate or abandon the improved facility and appurtenances at any time during the term of this agreement, and if Lessee should abandon, vacate or surrender the improved facility and appurtenances or be dispossessed by process of law, or otherwise, any personal property belonging to Lessee and left in the improved facility and appurtenances shall be deemed to be abandoned, at the option of City, except such property as may be mortgaged to City. 22. SIGNS. Lessee shall not place or permit to be placed any projecting sign, marquee or awning on the exterior or windows of the improved facility and appurtenances and any other portion of the premises or parking lot without the prior written consent of City. City shall have the right to approve the type and size, location and color of all signs which Lessee desires to use or place in or upon the exterior or windows of the improved facility and appurtenances and any other portion of the premises or parking lot. 23. UTILITIES. Lessee shall pay before delinquency all charges for water, gas, heat, electricity, power, telephone service and all other services of utilities used in, or upon the improved facility and appurtenances by Lessee during the term of this lease agreement. I?-/~ 73'1 -10- 24. ENTRY AND INSPECTION. Lessee shall permit City, its agents and/or employees to enter into and upon the improved facility and appurtenances at all reasonable times for the purpose of inspecting the same or for the purpose of maintaining the structure, roof, roof-mounted equipment and exterior walls of the improved facility and appurtenances, or for the purpose of posting notices on nonliability for alterations, additions or repairs. City shall be permitted to do any of the above without any rebate of hire and without any liability to Lessee for any loss of occupation or quiet enjoyment of the improved facility and appurtenances thereby occasioned. Lessee shall permit City, at any time time within six (6) months prior to the expiration of this lease agreement, to place upon said premises any usual or ordinary "For Lease" signs and during such six (6) month period, City, its agents and/or employees may, during normal business hours, enter upon said premises and exhibit same to prospective occupants. 25. DAMAGE AND DESTRUCTION OF THE IMPROVED FACILITY AND APPURTENANCES. In the event of (a) partial destruction of said improved facility and appurtenances during the term of this lease agreement which requires repairs to the improved facility and/or appurtenances, or (b) said improved facility and appurtenances being declared unsafe or unfit for occupancy by any authorized public authority for any reason other than Lessee's act, use or occupation, which declaration requires repairs to said improved facility and/or appurtenances, Lessee shall forthwith make said repairs. No such partial destruction (including any destruction necessary in order to make repairs required by any declaration made by any public authority) shall not annul or void this lease agreement except that Lessee shall be entitled to a proportionate reduction in rent to be based upon the extent to which the making of such repairs shall interfere with the business carried on by Lessee in said improved facility and appurtenances. If, during the term of the lease hereby granted, the leased premises shall be destroyed by fire or the elements or any other cause, and if same shall be so damaged that they cannot be repaired with reasonable diligence within one hundred and eighty (180) days, then said lease may terminate at the option of either party and become null and void from the date of such damage or destruction, and in the event of the exercise of such option by either party, Lessee shall immediately surrender the premises to City and this lease agreement shall thereupon terminate. 26. ASSIGNMENT. Lessee shall not assign this lease agreement, or any interest therein, or any right or privilege appurtenant thereto, or permit any other person, the agents and servants of Lessee excepted, to occupy or use the improved facility and appurtenances or any portion thereof, without first Obtaining the written consent of City, which consent shall not be unreasonably withheld. Consent by City to one assignment, occupation or use by another person shall not be deemed to be a consent to any subsequent assignment, occupation or use by another person. Any assignment without the prior written consent of City shall be void, and shall, at the option of City terminate this lease agreement. Neither this lease agreement or any interest therein shall be assignable, as to the interest of Lessee, by operation of law, without the prior written consent of City. 27. INVOLUNTARY ASSIGNMENT. This lease cannot be assigned involuntarily or by any process of law, and in case Lessee is adjudged to be bankrupt or insolvent or Lessee makes a general assignment for the benefit of creditors or fails to release any levy or attachment or execution upon Lessee's property 1(-/07S/ -11- within thirty (30) days after such levy is made, then it shall be optional with the Lessor to consider any of the same a breach of this lease and to cancel and terminate this lease, but nothing herein contained shall be construed to compel Lessor to do so. 28. INSOLVENCY OF LESSEE. Lessee agrees that in the event all or substantially all of its assets be placed in the hands of a receiver or trustee, and in the event such receivership or trusteeship continue for a period of ten (10) days, or should Lessee make an assignment for the benefit of creditors, or be adjudicated a bankrupt, or should Lessee institute any proceedings under any state or federal bankruptcy act Wherein Lessee seeks to be adjudicated a bankrupt, or seeks to be discharged of its debts, or should any involuntary proceeding be filed against Lessee under such bankruptcy laws and Lessee consents thereto or acquiesces therein by pleading or default, then this lease agreement or any interest in and to the improved facility and appurtenances shall not became an asset in any of such proceedings and, in any of such event, and, in addition to any and all rights or remedies of City hereunder or as provided by law, it shall be unlawful for City at City's option to declare the term hereof ended and to reenter the improved facility and appurtenances, take possession thereof and remove all persons therefrom and Lessee shall have no further claim therein or hereunder. 29. SURRENDER OF LEASE AGREEMENT. The voluntary or other surrender of this lease agrement by Lessee, or a mutual cancellation thereof, shall not work a merger. 30. SALE OF PREMISES BY LANDLORD. In the event of any sale of the improved facility and appurtenances by City, City shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this lease agreement arising out of any act, occurrence or omission occurring after the consummation of such sale; and the purchaser, at such sale or any subsequent sale of the improved facility and appurtenances shall be deemed, without any further agreement between the parties or their successors in interest or between the parties and any such purchaser, to have assumed and agreed to carry out any and all of the covenants and obligations of the City under this lease agreement. 31. ATTORNEY'S FEES. If either City or Lessee shall commence any legal proceedings against the other with respect to any of the terms and conditions of this lease agreement, the nonprevailing party therein shall pay to the other all expenses of said litigation, including a reasonable attorney's fee as may be fixed by the court having jurisdiction over the matter. 32. NOTICES. Wherever in this lease agreement it shall be required or permitted that notice and demand be given or served by either party to this lease agreement to or on the other, such notice or demand shall be given or served and shall not be deemed to have been duly given or served unless in writing, addressed as follows: City: City of Chula Vista 276 Fourth Avenue Chula Vista, Ca. 92010 Attn: City Manager's Office ~~m -12- Jimmy's Jimmy's Family of Fine Restaurants, Inc. 1198 Third Avenue Chula Vista, Ca. 92011 Either party may change such address by written notice to the other. 33. SUCCESSORS IN INTEREST. The covenants herein contained shall, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of all the parties hereto; and all of the parties hereto shall be jointly and severally liable hereunder. 34. FORCE MAJEURE. If either party hereto shall be delayed or prevented from the performance of any act required hereunder by reason of acts of God, strikes, lockouts, labor troubles, inability to procure materials, restrictive governmental laws or regulations or other cause without fault and beyond the control of the party obligated (financial inability excepted), performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay; provided, however, nothing contained in this Article shall excuse Lessee from the prompt payment of rental or other charge required of Lessee hereunder except as may be expressly provided elsewhere in this lease agreement. 35. PARTIAL INVALIDITY. If any term, covenant, condition or provision of this lease agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. 36. MARGINAL CAPTIONS. The various headings and numbers herein and the grouping of the provisions of this lease agreement into separate articles and paragraphs are for purposes of convenience only and shall not be considered a part hereof. 37. TIME. Time is of the essence of this lease agreement. 38. CONDEMNATION. In the event of a condemnation, or a transfer in lieu thereof, fifteen percent (15%) or more of the improved facility and appurtenances is taken, or in the event as a result of such taking or transfer in lieu thereof City is unable to provide the parking required herein, City or Lessee may, upon written notice given within thirty (30) days after such taking or transfer in lieu thereof, terminate this lease agreement. Lessee shall not be entitled to share in any portion of the award. Lessee shall, however, have the right to claim and recover from the condemning authority or City any amounts necessary to reimburse Lessee for the unamortized value of equipment occasioned by such taking or transfer in lieu thereof. ~ffW -13- IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day and year first hereinabove set forth. LESSOR: THE CITY OF CHUIA VISTA Mayor of th City of Chu1a Vh~ ATTES . :?2~ City Clerk ~ Approved as to form by (}/\~) .' K-/'--:\:-;~~~c/ >~_;:- /' , t ,,:..---- c:7 11- / /J 73/ -14- LESSEE: JIMMY'S FINE RE INC.