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HomeMy WebLinkAbout08 - Amendment No. One to Lease Agreement With Lighthouse Cafe, LLCTO: FROM: CITY OF NEWPORT BEACH City Council Staff Report May 23, 2017 Agenda Item No. 8 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL Kimberly Brandt, Community Development Director - 949-644-3232, kbrandt@newportbeachca.gov PREPARED BY: Lauren Wooding Whitlinger, Real Property Administrator Seimone Jurjis, Assistant Community Development Director, CBO PHONE: 949-644-3236, Iwooding@newportbeachca.gov TITLE: Amendment No. One to Lease Agreement With Lighthouse Cafe, LLC, for the Restaurant Space at Marina Park Located at 1600 West Balboa Boulevard and a Waiver of City Council Policy B-13 ABSTRACT: In March 2015, the City Council entered into a lease agreement with Lighthouse Cafe, LLC (Lighthouse) at the Marina Park Community Center (Marina Park). Lighthouse offers breakfast, lunch, dinner, and catering services, and pursuant to the lease, alcoholic beverage sales are limited to beer and wine. Lighthouse requests the ability to sell spirits in conjunction with its food service. Since City Council Policy B-13 restricts alcoholic beverages to beer and wine at City facilities, this request also requires a policy waiver. Should the City Council approve these requests, the applicant will request the issuance of a Type 47 license from the California Department of Alcoholic Beverage Control (State). In addition, Lighthouse requests the ability to sell food and miscellaneous sundry items from a mobile cart at Marina Park. RECOMMENDATION: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; b) Approve a waiver of City Council Policy B-13 (Public Use of City Facilities) allowing Lighthouse Cafe, LLC to obtain a Type 47 On -Sale General for Bona Fide Public Eating Place license for the restaurant premises only, based on the findings contained in the staff report and in Amendment No. One to the Lease Agreement, which conclude that the requested license would not impact the City or public use of Marina Park; and c) Approve and authorize the Mayor and City Clerk to execute a lease amendment with Lighthouse Cafe, LLC, in a form substantially similar to the amendment attached to the staff report. WE Amendment No. One to Lease Agreement with Lighthouse Cafe, LLC May 23, 2017 Page 2 FUNDING REQUIREMENTS: The City deposits revenue from this lease agreement (Lease) into the Tidelands Fund — Marina Park Concession account (Account number 10050505-551150). The City will also deposit any additional revenue resulting from this Lease amendment into this account. DISCUSSION: Background Marina Park is located at 1600 West Balboa Boulevard on the Balboa Peninsula and includes a restaurant space, which the City currently leases to Lighthouse. The two-story restaurant is located in the sailing center building, and it has a first -floor kitchen, dry storage area, indoor dining room, and exterior patio dining area, as well as a second -floor exterior patio dining area. Approved by City Council in March 2015, the Lease allowed Lighthouse to obtain the necessary State licenses to sell beer and wine in the restaurant and to be the exclusive alcoholic beverage caterer (beer and wine only) for events held in the Marina Park community rooms (Attachment B). The State issued the required licenses to Lighthouse in May 2016. Lighthouse has indicated that restaurant sales in the first year of operation have not met expectations, and Lighthouse believes that a State license to sell spirits in addition to beer and wine at the restaurant would increase revenues to meet or exceed the original projections. City Council Policy B-13, Public Use of City Facilities Pursuant to City Council Policy B-13, Public Use of City Facilities, the Lease limits alcohol sales/service to beer and wine in the restaurant, as well as at events held in the community rooms (Attachment C). For these catered events, the renter and Lighthouse must comply with the various special event permit requirements outlined in Policy B-13 such as additional security, special insurance and State -specified serving restrictions. Staff supports the Policy B-13 waiver for the restaurant, so that Lighthouse may operate in a manner consistent with other local restaurants and better serve their customers. Staff believes this waiver will further assist both the City and Lighthouse's goal of creating a successful business at Marina Park. Lighthouse is not requesting any change in the Policy B-13 restriction as it applies to catered events in the community rooms. Additionally, Lighthouse is not requesting any change to the prohibition of serving beer and wine at catered events outside of the restaurant premises. Should the City Council approve these requests, Lighthouse will request issuance of a Type 47 license from the State. 8-2 Amendment No. One to Lease Agreement with Lighthouse Cafe, LLC May 23, 2017 Page 3 Mobile Food & Sundries Cart Lighthouse also requests the ability to operate a mobile food cart at Marina Park. Many visitors utilize the park's playground and the beach area, which are located to the west of the restaurant. In an effort to serve these visitors, Lighthouse proposes to operate a mobile cart near the playground. From this cart, Lighthouse will sell coffee, non-alcoholic beverages, pre - packed food items, and miscellaneous sundries such as sunscreen, beach towels, and sand toys. Lighthouse will operate the cart at its discretion, but the Lease amendment will limit cart service to no earlier than the restaurant hours, and no later than dusk, seven days a week. Summary of Proaosed Lease Amendment The Lease amendment's proposed terms are summarized below: Percentage Rent shall be charged for food sales from the mobile cart consistent with the existing terms of the Lease at the greater of base rent or percentage rent based on gross sales for the restaurant. Percentage Rent for sundry sales from the mobile cart shall be set at 15 percent. 2. The City Manager shall review and approve the location of the mobile cart, and Lighthouse must obtain all of the necessary health department permits and approvals prior to installation. 3. Exhibit B to the Lease, outlining conditions of operation related to the alcohol license, have been amended to allow Lighthouse to obtain a Type 47 License (On -Sale General for Bona Fide Public Eating Place). 4. Waiver of City Council Policy B-13, Public Use of City Facilities, to allow beer, wine, and spirit sales is limited to the restaurant premises only. The City Attorney's office has reviewed this Lease amendment and approved it as to form. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Amendment No. One to the Lease Agreement Attachment B — Lease Agreement Attachment C — City Council Policy B-13, Public Use of City Facilities 8-3 ATTACHMENT A AMENDMENT NO. ONE TO MARINA PARK LEASE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND LIGHTHOUSE CAFE, LLC This AMENDMENT NO. ONE TO MARINA PARK LEASE AGREEMENT ("Amendment") is made and entered into this _ day of May, 2017 ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City") and LIGHTHOUSE CAFE, LLC, a California limited liability company ("Tenant"). City and Tenant may be individually referred to herein as a "Party," and collectively referred to herein as the "Parties." RECITALS A. On March 27, 2015, City entered into that certain Marina Park Lease Agreement with Tenant, concerning the three thousand sixty-nine (3,069) square foot restaurant facility located at the Marina Park Community Center, with an address of 1600 East Balboa Boulevard, Newport Beach, California 92663, which is depicted on Exhibit "A" attached hereto and incorporated by reference ("Premises"), that was recorded on May 8, 2015 as Instrument No. 2015000239402 in the Official Records of Orange County ("Agreement"); and B. City and Tenant now desire to amend the Agreement to reflect the new terms and conditions provided below. 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: 1. Article 4.1.3 is hereby deleted and replaced in its entirety with the following: 4.1.3 Percentage Rent. "Percentage Rent" shall be determined each calendar month and shall be calculated by multiplying the percentage, as indicated by the table below, by the total Gross Sales (as defined in Section 4.4.1). For each calendar month that Percentage Rent of Gross Sales from onsite Premises sales and/or Beach Cart food and beverage sales in Column A exceeds Base Rent, Tenant shall pay to City the Percentage Rent from Column A less the Base Rent paid to the City for that month. The Percentage Rent in Column B shall be due each calendar month without any offset based upon the amount of Percentage Rent in Column A or the Base Rent paid to City. Column A Column B Percentage Rent of Gross Sales from Percentage Rent from catering and Beach (onsite) Premises sales and/or Beach Cart sales: Cart food and beverage sales: All Years, including Option Terms: I All Years, including Option Terms: Gross Revenues of $0 to $1,500,000 at 15% of Gross Sales for alcoholic beverage 6% sales related to catering. Gross Revenues of $1,500,001 to 15% of Gross Sales for miscellaneous $2,500,000 at 7% sundry sales from the Beach Cart. Gross Revenues of $2,500,001 or above (For food and non-alcoholic beverage at 8% sales attributable the Beach Cart, use the in Column A. 2. Section 5 is hereby amended to include the following subsection: 5.17 Beach Cart. Tenant may, at its own expense, install and operate a mobile coffee cart (Beach Cart) at the Property for the convenience of Marina Park visitors and guests. 5.17.1 Design, Permits and Approvals. Subject to compliance with all applicable laws, Tenant shall submit designs and specifications for the Beach Cart for review of plans and permitting, and construction, and shall be subject to the prior written approval of the City Manager or his/her designee. Tenant shall obtain, and be responsible for the costs for all building permits, health department permits and other required permits prior to installation of the Beach Cart. 5.17.2 Location. Location of the Beach Cart within the Property is subject to the approval of the City Manager, or City's designee and location may change at any time without prior notice to Tenant. 5.17.3 Sales. Tenant may sell food and beverage items and miscellaneous sundry items with the revenues counting towards the Percentage Rent calculated under Section 4 of this Lease. No alcohol sales shall be made from the Beach Cart. 5.17.4 Hours of Operation. Tenant shall operate the Beach Cart at its discretion, for the convenience of Marina Park visitors and guests, and shall not operate the Beach Cart any earlier than the restaurant hours, and no later than dusk. 3. Condition 28 of Exhibit B is hereby deleted and replaced in its entirety with the following: "28. The type of alcoholic beverage license issued by the California Board of Alcoholic Beverage Control shall be a Type 47 (On -Sale General for 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 the City Council." Amendment No. One to Marina Park Lease Agreement Page 2 W -I The City hereby specifically waives the regulations and restrictions regarding the use of alcohol, as delineated in City Council Policy B-13, with this Amendment No. One. 4. Condition 17 of Exhibit B shall be revised to read as follows: 17. The hours of operation for the interior of the restaurant shall be limited between 7:00 a.m. and 11:00 p.m., daily." 5. Except as expressly modified herein, all other provisions, terms, covenants and conditions of the Agreement shall remain unchanged and in full force and effect. [Signature page follows] Amendment No. One to Marina Park Lease Agreement Page 3 IN WITNESS HEREOF, the Parties hereto have executed this Amendment No. One as of the day and year first above written. CITY: CITY OF NEWPORT BEACH, a California municipal corporation By: Kevin Muldoon Mayor APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aron C. Harp }, City Attorney ATTEST: Leilani I. Brown City Clerk TENANT: LIGHTHOUSE CAFE, LLC, a California limited liability company la Doug Cavanaugh Managing Member [END OF SIGNATURES] Tenants must sign in the presence of notary public ATTACHMENT: Exhibit A — Premises Depiction Amendment No. One to Marina Park Lease Agreement Page 4 M 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) Amendment No. One to Marina Park Lease Agreement Page 5 EXHIBIT "A" PREMISES' DEPICTION Amendment No. One to Marina Park Lease Agreement Page A-1 Exhibit A ,� � M21M'.. xi P �iY �` G• I ` ���."'Sprt�-r,,r ' � ` SCJ pG�y ��� �• `�M+S��a+.�.`�,.�r�y�M1ry"r� ,�r � .� - ;� -f --�:. -". r r • •-+� a /fes y � �' .. �� •.(�/+���`�' � aT ltl, �y e0,8s 4�s sty }f G ri ` - �_ �`• ;�\' ♦ `- ''• ;t y�#+tom '. �`+, 4�. may. h1;raIHA 41 �;- i -."may �J. •., 'M�. Newport Beach Disclaimer: Every reasonable effort has been made to assure the accuracy of the data provided, however, The City of G I S Newport Beach and its employees and agents disclaim any and all responsibility from or relating to any results obtained in its use. 1,000 2,000 •"'l'', i$ Imagery: 2009-2013 photos provided by Eagle FOOT Imaging www.eagleaedal.com "�ercq n��r 8-10 L 'Nhthouse Cafe' Newport Beach Cafe L-A hiblr, ]a"uary 29, 2015 RaIDbnln/F- Plunar BU IKEL•Arcn.iscls .441F km= . . I1 .air LIGHTHOUSE RESTROOM GIRL SCOUT HOUSE n GATEWAY SIGN BALBOA BOULEVARD �Swl'��T, k ' Rabben/Herman .ILIF17lxBU{ NDY-FINKEL-ArcI, +' LIS -------------------"""------�---------- ENLARGED SITE PLANCOMMUNITY;, FgLNqG t CENTER li Ili I ----------------------------------------- I f I I I _1 TRASH VISITING VESSEL MARINA MONUMENT SIGN OVERALL SITE PLAN Cafe Note: Trash removal or deliveries are prohibited Trash haul out route — — — through the breezeway at all times. Delivery route — — — 2, 8-12 1 Outdoor Dining Area -+ i / Cate �. 1,270 sq. ft. �. i 0 UP ❑7 FIRST FLOOR PLAN le 1• ft• k area) rjolE All, p. GES SHC7,%TJ LS AN i MIST S'fi'Q![OV Ila Ct 4Y NLD L%y NOT ACCl.FATELY PEPRESENT D -E .ACTUAL, FT IAL FRDJEC:T DEff1GN. SEE D -f CErALED DP/,'.T CZ AND VIECMATKSIS FOR AMMOWL Pd'm.ATn- 3 mt^ :Z� TT- r'CnY4,F X#U TDESUA. U WALK-UP WINDOW U REQUIRED EXIT DOOR. �2 CAFE ENTRY EXPOSED METAL FRAMING - 3 LINE OF OPENING TO NO GYP. BD. 12 PLANTER AREA TOWER ABOVE ® STEEL COLUMN ® CONCRETE BENCH ® DUMBWAITER SHAFT (EQUIP. BY TENANT) OPERABLE WINDOW 1$ POTENTIAL SEATING (BY TENANT) ® LIMIT OF LOCATION FOR NON-EXCLUSIVE OUTDOOR SEATING 3 8-13 _9„ MULTI-H1RPQ% ir — sraUcE ; 1I � 1 SECOND FLOOR PIAN N6TE. ALL MAGES SF CW4 0 AN ARTISTS RENDERNG CF FLY AND MAY NOT ACCLPATELY REPRESENT Tl£ ACTFJAL MAL FRojECT DeSmGN. SEE TFFE DETALSD DRAMM AND SPECFTCATDONS FOR ADOMON.AL NFORMATION DESCRa'40 THE ACTUAL PPADJECT DESIGN. Iry iLm "`�' b1c, .,� ❑1 OPEN TO BELOW 11 BUILT-IN COUNTER ❑2 ALUMINUM GUARDRAIL 33 TRENCH DRAIN ® STEEL COLUMN [ EQUIPMENT VENT SHAFT TO ROOF DUMBWAITER SHAFT (EQUIP. BY TENANT) TOP OF STORAGE ROOM BELOW ® 4'-0" WIDE PATH OF TRAVEL TO BE MAINTAINED BY TENANT ® POTENTIAL SEATING (BY TENANT) Fol METAL TRELLIS ABOVE 4- 8-14 Attachment B Lease Agreement 8-15 MARINA PARK LEASE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND LIGHTHOUSE CAFE, LLC This Marina Park Lease Agreement ("Agreement") is made and entered into as of the - day of 074-1-61 2015 ("Effective Date"), by and between the City of Newport Beach, a California municipal corporation and charter city ("City"), and Lighthouse Cafe, LLC, a California limited liability company ("Tenant"). RECITALS A. City, by virtue of a 1978 legislative grant found in Chapter 74 of the Statutes of 1978, as amended ("Beacon Bay Bill"), acts on behalf of the State of California as the trustee of tidelands located within the City's limits. B. In 2012, the California Legislature amended the Beacon Bay Bill via State Senate Bill No. 1577 to include certain lands located in lower Newport Harbor between 15th Street and 18th Street on the Balboa Peninsula, commonly referred to as "Marina Park." C. On November 3, 1992, a majority of the electors in the City approved Measure M authorizing the City Council to lease tidelands and waterfront property consistent with the provisions of state law. D. The Beacon Bay Bill authorizes the City to lease tidelands for a period not exceeding fifty (50) years. E. At buildout, Marina Park ("Property"), will include a public marina, public park with restrooms, public parking lot, a community center with offices, a sailing center, and a restaurant, as depicted on Exhibit "A" and incorporated herein by this reference. The Property includes an approximately three thousand sixty-nine (3,069) square foot restaurant facility ( "Premises"), consisting of a first floor kitchen, dry storage area, indoor dining room, exterior patio area, and a second floor exterior patio deck hall, located within the sailing center building, which are also depicted on Exhibit "A". F. Pursuant to City Council Policy F-7, the City conducted an open bid process and issued a Request for Proposals (No. 14-31) for Marina Park Project Restaurant/Cafe Space Operation on February 11, 2014. After a careful evaluation process, the City selected Tenant to operate the food service business at the Premises. G. Pursuant to City Council Policy F-7, City conducted a review of recent appraisals for similar restaurant facilities; recent City approved concession agreements, and comparable spaces on the market for rent or lease to determine the fair market value rent for the Premises. H. Tenant and City desire to enter into this Agreement to allow Tenant to operate a food service business at the Premises intended to provide food, drink, alcohol catering, and non-exclusive food catering services to the Property's tenants, visitors, staff and the general public ("Concession"). AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants herein contained, City and Tenant hereby agree as follows: 1. DEFINITIONS 1.1 General Definitions. As used in this 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 Tenant, its employees, agents, and contractors including, but not limited to, fixtures and signage. B. Authorized City Representative — the City Manager or his/her designee. C. Common Area — the areas within the Property which are available for non-exclusive use by City, Tenant, the public, and other tenants and/or users. D. Delivery Date — the date the City provides Tenant access to the Premises prior to Rent Commencement, in order for Tenant to prepare the Premises for operation. E. 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. F. Good Condition — neat and broom -clean and in substantially the same condition as of the Effective Date (reasonable wear and tear excepted), and is equivalent to similar phrases referring to physical adequacy in appearance and for use. G. Law — any judicial decision, statute, constitution, ordinance, resolution, regulation, rule, administrative order, or other requirement of any municipal, county, state, federal, or other government agency or authority having jurisdiction over the parties hereto or the Premises. H. Maintenance or Maintain — repairs, replacement, maintenance, repainting, and cleaning. Lighthouse Cafe, LLC Page 2 8-17 I. Person — one (1) or more natural persons, or legal entities, including, without limitation, partnerships, corporations, trusts, estates, associations, or a combination of natural persons and legal entities. J. Provision — any term, covenant, condition, or clause in this Agreement that defines, establishes, or limits the performance required or permitted by either party. K. Rent — includes Base Rent, Percentage Rent, taxes, and other similar charges payable by Tenant under the provisions of this Agreement. L. Rent Commencement — the date Tenant begins paying Base Rent. M. Rent Commencement Date - the earlier of (i) the first day of operation of the Concession from the Premises, or (ii) one -hundred five (105) calendar days after the Delivery Date. N. Successor — assignee, transferee, personal representative, heir, or other Person succeeding lawfully, and pursuant to the provisions of this Agreement, to the rights or obligations of either party. O. Termination — the termination of this Agreement, for any reason, prior to Expiration. 1.2 Other Definitions. — The following additional terms are defined in the following sections of this Agreement: A. Base Rent §4.1.1 B. Claim or Claims § 11.1 C. Concession Recitals, §H D. Gross Sales §4.4.1 E. Hazardous Materials §17 F. Indemnified Parties §6.3 and §11.1 G. Option Term(s) §3.2 H. Percentage Rent §4.1.3 I. Property Recitals, §E J. Premises Recitals, §E K. Term §3.1 Lighthouse Cafe, LLC Page 3 ME 2. PREMISES 2.1 City finds it to be in the public interest and consistent with public facility uses to grant an exclusive right to operate a Concession at the Property. Therefore, pursuant to the terms and conditions set forth herein, City hereby grants to Tenant the exclusive right, privilege and concession to conduct a business at the Premises engaged in selling such items as those described in Section 5.1, Business Purposes. Tenant acknowledges, however, that Tenant's use of the first floor patio area shall be on a non-exclusive basis, pursuant to Section 5.5. Tenant agrees to accept the Premises with the improvements shown on Exhibit "E" having been completed by City, but otherwise in an "as is" condition. Tenant agrees that no representations with respect to the condition or improvements of the Premises have been made by City except as specifically set forth in this Agreement. Tenant expressly accepts the Premises in such condition and acknowledges that City has made no representations or warranties as to the suitability of the Premises or any construction or improvement. Tenant shall conduct all tests necessary to determine the suitability of the Premises for any proposed construction or improvement, including, without limitation, the amount and extent of any fill, and related factors. Tenant expressly acknowledges that City shall not be liable for any damage or loss resulting from any subsurface or soil condition in, on, or under the Premises or adjacent property. Tenant expressly acknowledges that the legislature of the State of California has placed public trust restrictions on use of the Premises pursuant to the Beacon Bay Bill as the Premises constitute filled tidelands. City has made no representation or warranty relative to the validity of the Beacon Bay Bill or the power of the legislature of the State of California to remove public trust restrictions on tidelands through legislation. 2.2 Tidelands Grant. The Premises are located on land that is the subject of a tidelands grant from the State of California to the City as trustee. Tenant shall not take any action that would cause the City to be in violation of any provisions of the Beacon Bay Bill. If the State of California terminates, or modifies the Beacon Bay Bill to prohibit the uses contemplated under this Agreement, this Agreement shall terminate as a result and the parties shall be released from all liabilities and obligations under this Agreement and City shall owe no compensation to Tenant. 3. TERM 3.1 Term of Agreement. The Initial Term of this Agreement shall be fifteen (15) years from the Effective Date unless terminated sooner as provided in Section 15 or extended as provided in Section 3.2. 3.2 Option to Extend. Provided Tenant is not then in default beyond applicable notice and cure periods, upon Tenant's request, and upon approval of the City, Tenant may extend the term of this Agreement for two (2) additional successive terms of five (5) years (the "Option Term" or "Option Terms") commencing on Expiration of the Initial Term or an Option Term, on the same terms and conditions as contained in this Agreement as it may be amended. Tenant must exercise each option by giving City Lighthouse Cafe, LLC Im • written notice of its intention to extend the Term at least six (6) months prior to Expiration of the Initial Term or the Expiration of the first Option Term, as the case may be. 3.3 Hold Over. Should Tenant, with City's consent, hold over and continue in possession of the Premises after Expiration of the Term or any Option Term, Tenant's continued occupancy of the Premises shall be considered a month-to-month tenancy subject to all the terms and conditions of this Agreement, except the provisions of Sections 3.1 and 3.2. 4. RENT 4.1 Restaurant Facility. Tenant shall pay the greater of Base Rent or Percentage Rent. 4.1.1 Base Rent. Tenant shall commence payment of Base Rent upon the Rent Commencement Date. Tenant shall open the Premises for operation of its Concession business concurrently with the City's opening of the entirety of the Property for business. After the Rent Commencement Date, if Tenant does not open the Premises for operation of its Concession business concurrently with the City's opening of the Property, Tenant shall pay liquidated damages in the amount of $400.00 to City for each calendar day Tenant is not open for business past the date of the City's opening of the Property (e.g.: grand opening, ribbon cutting, dedication ceremony). The Base Rent shall be established at Eighty Thousand Dollars and 00/100 Cents ($80,000.00) per year. Base Rent shall be paid, in advance, in equal monthly installments on the first day of each month (e.g., Six Thousand Six Hundred Sixty -Six Dollars and 67/100 Cents ($6,666.67) per month). Base Rent for any partial month shall be prorated in accordance with the actual number of days in that month and shall be due on the first day of that month that falls within the Term. 4.1.2 Rent Adiustments. Rent shall not be adjusted during the first three (3) Lease Years (the term "Lease Year' as used herein refers to successive twelve (12) month periods, commencing with the Rent Commencement Date of this Agreement). Rent may be adjusted on the 1St day of each Lease Year after the third Lease Year to reflect increases in the cost of living as indicated by the Consumer Price Index described below. Rent may be adjusted if the Consumer Price Index for the Los Angeles — Orange County - Riverside 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 Lighthouse Cafe, LLC Page 5 E Period Index" shall be the Index for the calendar month which is four (4) months prior to the month of the Rent Commencement Date's annual anniversary. The initial Base Period Index shall be compared with the Index for the same calendar month for each subsequent Lease 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 Rent adjustment calculation. If the Comparison Index is higher than the Base Period Index, then Rent for the next Lease Year shall be increased by the amount of such percentage change, subject to a maximum increase of four percent (4%) for the adjustments made in Lease Years four through fifteen (4-15), adjustments after year fifteen (15) of the Agreement not subject to maximum increase cap. 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. 4.1.3 Percentage Rent. "Percentage Rent" shall be determined each calendar month and shall be calculated by multiplying the percentage, as indicated by the table below, by the total Gross Sales (as defined in Section 4.4.1) made in, upon, or from the Premises and/or otherwise attributable to catering from the Premises for the calendar month. For each month that Percentage Rent exceeds Base Rent, Tenant shall pay to City the Percentage Rent less the Base Rent paid to the City for that month. Percentage Rent of Gross Sales I Percentage Rent from catering from (on-site) Premises sales: All Years, including Option Terms authorized under Section 5.6 All Years, including Option Terms: Gross Revenues of $0 to 15% of Gross Sales for alcoholic $1,500,000 — 6% beverage sales. Gross Revenues of $1,500,001 to $2,500,000 — 7% Gross Revenues of $2,500,001 or above — 8% Lighthouse Cafe, LLC Page 6 8-21 4.1.4 Accounting and Payment. Within twenty-five (25) calendar days after the end of each calendar month for the term hereof, as may be extended as provided herein, commencing with the twenty- fifth (25th) day of the month following the Rent Commencement Date, and ending with the twenty-fifth (25th) day of the month next succeeding the last month of the term, as may be extended as provided herein, Tenant shall furnish to City a statement in writing, certified by Tenant to be correct, showing the total Gross Sales made in, upon, or from and/or otherwise attributable to the Premises or any catering during the preceding calendar month (or fractional month at the beginning of the term if the Rent Commencement Date is other than the first day of a month). The Percentage Rent payment to City, less the Base Rent already paid to the City for that month, shall be due and payable with the next installment of Base Rent (for example, the Percentage Rent statement for the month of January is due on February 25th, and the Percentage Rent payment for the month of January is due on March 1 st) 4.2 Revenue from Premises Use in Film, Television, and/or Advertising. Tenant may allow the Premises to be used for commercial film, television production, advertising production, or other commercial media vehicle only upon written approval from the City, which approval shall not be unreasonably withheld, conditioned or delayed, and in compliance with the Newport Beach Municipal Code. Fifty percent (50%) of all monetary revenue received by Tenant as compensation or other payment for the use of the Premises in a film, television production, advertising production, or other commercial media vehicle shall be paid to City. The payment of revenue pursuant to this Section shall occur not less than thirty (30) calendar days after Tenant receives this compensation or other payment. 4.3 Payment Location. All payments of Rent shall be made in lawful money of the United States of America and shall be paid to City in person or by United States' mail, or overnight mail service, at the Cashier's Office located at 100 Civic Center Drive, P.O. Box 1768, Newport Beach, California, 92658, or to such other address as City may from time to time designate in writing to Tenant. If requested by City, Tenant shall make payments electronically (at www.newportbeachca.gov) or by wire transfer (at Tenant's cost). Tenant assumes all risk of loss and responsibility for late charges and delinquency rates if payments are not timely received by City regardless of the method of transmittal. 4.4 Gross Sales. 4.4.1 The term "Gross Sales" means 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 Tenant and/or any assignees, licensees, permittees or Tenants thereof, whether collected or accrued from any business, use or Lighthouse Cafe, LLC Page 7 8-22 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 4.4.2, 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 Tenant receives payment therefore. 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 purchasers; 4.4.1.1 Orders taken by Tenant in or from the Premises, even if the orders are filled elsewhere, and sales by any sub - Tenant in or from the Premises; 4.4.1.2 Gross receipts of all coin-operated devices that are placed on the Premises by Tenant 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 4.4.1.3 Rentals of any equipment, furniture, goods, wares or merchandise. 4.4.2 Exclusions from Gross Sales. Gross Sales shall not include, or if included here shall be deducted (but only to the extent they have been included), the following: 4.4.2.1 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, and separately stated on customer sales check or invoices; 4.4.2.2 The amount of returns to shippers or manufacturers; 4.4.2.3 The amount of any cash or credit refund made upon any sale where the merchandise sold or some portion is Lighthouse Cafe, LLC Page 8 8-23 returned by the purchaser. Each sale upon installment or credit shall be treated as a sale for the full price in the month during which such sale shall be made, irrespective of the time when Tenant shall receive payment (whether in full or partial) from its customers; 4.4.2.4 Sales of trade fixtures or personal property to be replaced by Tenant that are not considered stock in trade; 4.4.2.5 Sums and credits received in the settlement of claims for loss of or damage to merchandise; 4.4.2.6 Meals provided for officers or employees without charge; 4.4.2.7 Meals, goods or products provided for promotional or publicity purposes without charge; 4.4.2.8 Cash refunds made to customers in the ordinary course of business; 4.4.2.9 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; 4.4.2.10 Discounted sales to employees of Tenant, not to exceed two percent (2%) of the monthly Gross Sales; 4.4.2.11 Uncollectible credit accounts and other bad debts, not to exceed two percent (2%) of the monthly Gross Sales; and 4.4.2.12 Amounts paid to charge card or credit card issuers. 4.4.3 Annual Statements of Gross Sales. Within thirty (30) calendar days after the end of each calendar year during the Term hereof, as may be extended as provided herein, Tenant shall furnish to City a statement in writing, certified by Tenant 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 at the beginning of the term if the Effective Date is other than the first day of the year). 4.4.4 Sales and Charges. All sales and charges shall be recorded by means of cash registers that display the amount of the transaction certifying the amount recorded. The register shall be equipped with Lighthouse Cafe, LLC mm devices that log in daily sales totals, and record on tapes the transaction numbers and sales details, including a separate line item for daily sales tax. At the end of each day the tape will record the total sales for that day. 4.4.5 Production of Statement, Records and Audit. Tenant shall keep at the Premises (and shall require any permitted subtenant 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. Tenant 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. Tenant shall also make available, upon City's written request, all supporting records. Tenant shall also furnish City copies of its quarterly California sales and use tax returns filed with the State of California. Tenant 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, not more than once each calendar year, upon reasonable notice, during the Term and within one hundred eighty (180) calendar days after expiration or Termination of this Agreement to inspect and complete an audit of Tenant's books and records and to make transcripts to verify the Rent due to the City. The audit may be conducted at any reasonable time during normal business hours. Tenant 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 Tenant's regular business operations. If the audit concludes that there is a deficiency in the payment of any Rent, the deficiency shall become due and payable within twenty (20) calendar days and if there is an overpayment, City shall refund the amount of the overpayment within twenty (20) calendar days. City shall bear its costs of the audit unless the audit shows that Tenant understated Gross Sales by more than two percent (2%), in which case Tenant 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 required by law or court order. However, City may disclose the results of any audit in connection with any financing arrangements, pursuant to applicable law, 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. Lighthouse Cafe, LLC Page 10 8-25 4.4.6 Tenant's Gross Sales Audit. In the event of any audit by City in accordance with this Agreement, Tenant may contest the results of City's audit by performing a confirming audit, at Tenant's expense, within sixty (60) calendar days of receipt of City's audit results and supporting evidence, using an independent Certified Public Accountant reasonably acceptable to City. 4.4.7 Acceptance. The acceptance by City of any money paid to City by Tenant as Percentage Rent for the Premises, as shown by any statement furnished by Tenant, shall not be construed as an admission of the accuracy of said statement, or of the sufficiency of the amount of the Percentage Rent payment. 4.5 Late Payment. Tenant 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 payment of any sum to be paid by Tenant not paid within five (5) calendar days of its due date shall be subject to a ten percent (10%) late charge. City and Tenant 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 Tenant. 4.6 Interest on Unpaid Sums. Unpaid sums due to either City or Tenant 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. 4.7 Additional Rent. Any provision in this Agreement that requires Tenant to pay additional amounts classified as "Additional Rent" shall be paid within ten (10) calendar days of City's written demand therefore (unless a different time for payment is expressly provided in this Agreement). Additional Rent does not reduce or offset Tenant's obligations to pay Rent. 5. BUSINESS PURPOSES AND USE OF PREMISES 5.1 Business Purposes. The Premises are to be used by Tenant for the operation of a Concession. Alcoholic beverages may be sold/provided by Tenant in accordance with the necessary permits and licenses, subject to the conditions included on Exhibit "B" and incorporated herein by this reference. The Tenant shall be responsible for obtaining all required permits and licenses for the provision of alcoholic beverages, including, but not limited to, Alcoholic Beverage Control license(s). Alcoholic beverages may be sold/provided by Tenant at catered events held at the Property with the prior written consent of the Authorized City Representative. The Tenant shall be responsible for obtaining all required permits and licenses for the provision of alcoholic beverages, including, but not limited to, Alcoholic Beverage Control license(s). Lighthouse Cafe, LLC Page 11 WM 5.2 Operation of Premises. Tenant shall operate and manage the Premises in a manner comparable to other high quality businesses providing similar food and services. Deliveries shall be made and completed only between 7:00 a.m. and 6:00 p.m. on non -holiday weekdays. The loading zone designated for use by Tenant for deliveries, as shown on Exhibit "C" and incorporated herein by this reference, is shared with the community center and sailing center, and priority shall be given to deliveries for the community and sailing center. 5.3 Prohibited Uses. Tenant 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 unless in accordance with the necessary permits, approvals, applicable City Council policies and municipal code regulations. Vending machines, gaming machines or video or arcade games shall not be used or installed on the Premises unless expressly permitted by this Agreement. Tenant shall not use or permit the use of the Premises in any manner that: (a) creates a nuisance: or (b) violates any Law. Tenant shall not offer entertainment, including live music or dancing, or broadcast music or entertainment through exterior speakers or other form of transmission without the written approval of City. In this event, Tenant shall obtain all required City permits and approvals. 5.3.1. No smoking or vaping is permitted on the Property and Premises. 5.4 Food Packaging and Debris. Tenant 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 within the Premises, which shall be consistent with the design specifications of the Property when located outdoors. 5.5 Outdoor Dining. Tenant shall be permitted to place tables, chairs, and removable barriers to delineate seating area, and gas heaters on the paved area outside the dining area on the first floor adjacent to the Premises as identified and depicted on Exhibit "M and incorporated herein by this reference; use of this area by Tenant is on a non-exclusive basis, and shall be in accordance with City zoning codes and State requirements. Furniture, barriers, or heating units and associated equipment may not be placed more than ten (10) feet from the building, as measured from the glass windows on the exterior of the lighthouse structure, as depicted on Exhibit D. Use of the outside dining area on the first floor may be revoked for any reason, with twenty- four (24) hours' notice from the City. Tenant shall also be permitted to place tables, chairs, and gas heaters in the outside dining area on the second floor dining area of the Premises, as identified and depicted on Exhibit "D." The layout of the tables in both areas is subject to approval by the City. Tenant may not expand into the walkways, open areas or beach, or place any temporary furniture or objects in the public areas of the Property without prior written approval of the City. Lighthouse Cafe, LLC Page 12 8-27 5.6 Catering. Tenant shall be the exclusive alcoholic beverage provider for all catered events held at the Property, with the exception of: (1) City sponsored or co-sponsored events (e.g., receptions, festivals, etc.); and (2) deminimis staff expenditures of three hundred dollars ($300.00) or less. Concessionaire shall have first right of refusal for events as the exclusive alcohol caterer. If Tenant declines to cater the alcohol for an event or does not respond within the time provided by the City or a third -party, the City or the third -party may contract with a third -party for catering and alcohol services. 5.6.1 Competitive Pricing. Given the exclusive nature of the services provided under this Agreement, the City and Tenant have a mutual interest in providing competitive pricing for the food, beverages, and others items permitted to be sold under this Agreement. Therefore, Tenant shall from time -to -time survey the costs charged by other entities engaged in similar catering businesses and adjust its prices accordingly to remain competitive. The City may audit Tenant's pricing pursuant to Section 4.4.6. 5.7 Operation. Tenant shall keep the Premises in operation and open to the public for business on a daily basis, between the hours of 7:00 a.m. and 9:00 p.m., but no later than 11:00 p.m. 5.7.1 Tenant may only close on the following days: Thanksgiving Day and Christmas Day, and may close early on Thanksgiving Eve and Christmas Eve. 5.7.2 Tenant may close the Concession during periods of remodeling, reconstruction, inventory and/or emergencies or to comply with Laws with prior written approval from the City. 5.8 Food Preparation. Tenant shall, at Tenant's own expense, install any equipment required to prepare foods, which may be necessary to operate Tenant's business. Tenant shall ensure that equipment is installed properly pursuant to the manufacturer's specifications, does not exceed the electrical or other utility loads designated for the Premises, and is in compliance with all applicable local and state building codes and health department regulations. 5.9 Advertising Display. Tenant may, at its own expense, place signs in or upon the Premises subject to the prior written consent of the City as to the location, size, type, number, design and method of installation and in compliance with the City's sign code regulations and the deed restrictions applicable to the Premises, provided any illuminated signs placed on the Premises shall only be lit between the hours of 7:00 a.m. and 10:00 p.m. All signage placed by Tenant on, in or about the Premises shall remain the property of Tenant and shall be removed by Tenant upon termination or expiration of this Agreement at Tenant's expense; and any damage caused by removal shall be repaired at Tenant's expense. City shall be responsible for installing and maintaining limited directional or identifying signage in or upon the Property. Tenant Lighthouse Caf6, LLC Page 13 MIM signage shall be limited to advertising only for the Concessions provided at the Premises. 5.10 Personnel. Tenant shall be responsible for hiring the necessary personnel to conduct the daily operation of Concession. Tenant shall comply with all applicable federal, state, and local Laws related to minimum wage, social security, nondiscrimination, ADA, unemployment compensation, and workers' compensation. If required by the City, Tenant's employees shall wear a uniform and/or an identification badge. 5.11 Independent Contractor. It is understood that Tenant is an independent contractor and not an agent or employee of City. The manner and means of operating the Concession are under the control of Tenant, 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 Tenant's employees. Nothing in this Agreement shall be deemed to constitute approval for Tenant or any of Tenant's employees or agents, to be the agents or employees of City. Tenant shall have the responsibility for and control over the means of operating the Concession, provided that Tenant is in compliance with the terms of this Agreement. City acknowledges that is has no interest in the business of Tenant. 5.12 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 the City Manager or his/her designee. 5.13 Restroom Facilities. Tenant, its employees and customers shall have full use of restroom facilities located downstairs within the sailing center at the Property as depicted on Exhibit "C." Restroom facilities are shared with all employees and visitors to the Property, and are considered Common Area. Tenant shall be responsible for opening, closing, and securing the restroom facilities at the end of each day. 5.14 Parking for Employees. City grants Tenant a non-exclusive right to parking areas shown on Exhibit "C." City reserves the right to assign parking in the future, but agrees that any such assignment of parking shall not materially diminish access to the Premises. City shall provide a total of four (4) parking permits annually to Tenant for use of the Marina Park parking lot by employees. The permits issued by the City shall be designed to permit use by different employees from day to day. Tenant shall cause its employees to comply with the procedures and regulations established by the City from time -to -time to control parking. 5.15 Compliance with Marina Park Rules and Regulations. Tenant shall comply with the Marina Park Rules and Regulations which may be established at a future date, and shall be sent to Tenant pursuant to the Notice provisions in Section 20, and incorporated herein by reference. 5.16 Exclusive Use. City shall ensure that no portion of the Property other than the Premises is used as a Concession; with the exception of other pre -approved Lighthouse Cafe, LLC Page 14 • caterers (including Tenant) that may provide services for City sponsored events or events booked through the City's Recreation and Senior Services Department at the Property and in the community rooms in the sailing center as identified on Exhibit "C." City shall ensure that Tenant shall be the exclusive alcohol caterer in the community rooms. 6. TAXES, LICENSES AND OTHER OBLIGATIONS 6.1 _Payment of Taxes. Tenant shall pay directly to the appropriate taxing authorities all taxes applicable to this Agreement, fixtures and Tenant's personal property on the Premises, that are levied or assessed against Tenant during the Term. Taxes shall be paid before delinquency and before any fine, interest or penalty is due or imposed by operation of law. Tenant shall, upon request, promptly furnish to the City satisfactory evidence of payment. City hereby gives notice to Tenant, pursuant to Revenue and Tax Code Section 107.6 that this Agreement may create a possessory interest that is the subject of property taxes levied on such interest, the payment of which taxes shall be the sole obligation of Tenant. Tenant shall advise in writing any subtenant, licensee, concessionaire or third party using the Premises of the requirements of Section 107.6. Tenant shall pay, before delinquency all taxes, assessments, license fees and other charges ("Taxes") that are levied or assessed against Tenant's interest in the Premises or any personal property installed on the Premises. 6.2 Payment of Obligations. Tenant shall promptly pay, when due, any and all bills, debts, liabilities and obligations incurred by Tenant in connection with Tenant's occupation and use of the Premises. 6.3 Challenge to Taxes. Tenant 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, Tenant's personal property, or Tenant's occupation and use of the Premises, including the right to apply for reduction. If Tenant seeks a reduction or contests such taxes, Tenant's failure to pay the Taxes shall not constitute a default as long as Tenant complies with the provisions of this Section. City shall not be required to join in any proceeding or contest brought by Tenant unless the provisions of any Law require that the proceeding or contest be brought by or in the name of City. In that case, City shall join in the proceeding or contest or permit it to be brought in City's name as long as City is not required to bear any cost. If requested by Tenant, City shall execute any instrument or document necessary or advisable in connection with the proceeding or contest. Tenant, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered, together with all related costs, charges, interest and penalties. Tenant shall indemnify, defend and hold harmless the City, its council members, boards, commissions, committees, officers, employees, Authorized City Representatives, agents and volunteers ("Indemnified Parties") from and against any liability, claim, demand, penalty, cost or expense arising out of or in connection with any contest by Tenant pursuant to this Section. Lighthouse Cafe, LLC Page 15 6.4 No Rent Offset. Any payments under this Section 6 shall not reduce or offset Rent payments. City has no liability for such payments. 7. UTILITIES. 7.1 Tenant shall be responsible for payment of all utilities furnished to or used on the Premises exclusively by Tenant, or Tenant's pro rata share of all utilities furnished to or used by Tenant on the Property, including, without limitation, gas, electricity, sewer, water, refuse collection, telephone service, and cable TV. 7.2 Refuse collection shall occur between 7:00 a.m. and 6:00 p.m. on non -holiday weekdays. 7.3 Tenant shall be responsible for all costs associated with the cleaning and maintenance of the grease trap serving the Premises. Tenant to contract with a reputable local company to service and clean the grease interceptor each month, or as often as may be necessary to maintain the system in good working order consistent with the manufacturer's recommendations and warranty requirements, but not less than once every calendar year quarter. Should Tenant fail to maintain the equipment in good working order the City may, at its election, take over contracting for the service and charge the Tenant for the expense as additional rent, pursuant to the provisions in Section 10.1. 7.4 Tenant shall be responsible for the maintenance, repair and/or replacement of utility lines within and exclusively serving the Premises, or Tenant's pro rata share of utility lines serving Tenant on the Property, as depicted on Exhibit "A". 8. ALTERATIONS TO THE PREMISES. 8.1 Required Tenant Improvements. Tenant acknowledges that City shall deliver the Premises with the improvements shown on Exhibit "E." Subject to compliance with all applicable laws, Tenant shall make interior non-structural improvements including build -out of the kitchen, storage area, and installation of fixtures and furniture in the interior and exterior, first and second floor dining areas to the Premises in order to operate the Concession ("Tenant Improvements"), consistent with those shown on Exhibit "F," as may be revised or modified in order to obtain entitlements and/or building permits from the applicable local and state agencies. Subject to compliance with all applicable laws, all improvements by the Tenant must be submitted for review of improvement plans and permitting, and construction, and shall be subject to the prior written approval of the City Manager or his/her designee. City Manager or his/her designee's failure to provide written approval or disapproval of any such submittal by Tenant within thirty (30) calendar days shall be deemed approval thereof. City Manager's failure to provide such notice shall not relieve Tenant's responsibility to comply with all applicable laws. Tenant improvements shall be performed between 7:00 a.m. and 6:00 p.m. on non -holiday weekdays. Any contractors hired by Tenant shall be fully licensed and bonded. Tenant's contractors and any subcontractors shall obtain insurance in an amount and form to be approved by City's Lighthouse Cafe, LLC Page 16 8-31 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 and City's general contractor, KPRS Construction Services, Inc. shall be named as an additional insured on the contractor's and any subcontractor's policies. 8.1.1 Design Requirements. Tenant acknowledges that City has designed, and is constructing, maintaining, and operating the Property in accordance with energy and environmental design practices as recommended by the U.S. Green Building Council's Leadership in Energy & Environmental Design (LEED) guidelines. Tenant's required Tenant Improvements should follow the same design and construction guidelines, as specified by the City's design contractor and general contractor. Should the Tenant elect not to use the City's design contractor for design of the Premises the City may furnish such written design guidelines to Tenant. 8.2 Tenant's Architects and Contractors. All Tenant improvements to the Premises, 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 Tenant. 8.3 Costs of Construction. Tenant shall bear all costs and expenses associated with the design, construction and maintenance of the Premises, which costs and expenses include without limitation: (i) build -out of the kitchen, storage area, and installation of fixtures and furniture in the interior and exterior, first and second floor dining areas, as well as utility relocation in the kitchen, utility hook-up, and connection fees and all distribution facilities, conduits, pipelines and cables required in connection with the Tenant Improvements required for operation of the Concession; (ii) all design, engineering, financing and construction costs; and (iii) all necessary studies and appraisals, use permits or variances, and all grading, building and like permits required to construct and operate the Premises, including any fees assessed on the Premises by any governmental, or quasi -governmental agency or authority in connection with any regional transportation or other public improvements and school district taxes, development fees and assessments. 8.3.1 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 Tenant'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 Lighthouse Cafe, LLC Page 17 8-32 mechanic needed to execute the Tenant 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. Tenant's contractors and subcontractors are required to obtain the wage 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 Tenant'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. 8.4 Schedule for Required Improvements. Tenant shall submit plans, diligently pursue their approval, and begin construction of Required Improvements according to the following schedule: Design Coordination, Preparation of Upon execution of this Agreement Construction Documents, and Obtain Tenant shall coordinate with City's Building Permits design architects, construction project manager, and City's construction contractor to coordinate all kitchen and dining area designs, delivery conditions, and construction drawings. Tenant shall obtain building permits no later than August 1, 2015. Begin Construction Upon delivery of Premises from City. Complete Construction Within one hundred five (105) days of delivery of Premises from City. Open for Business Tenant shall be ready to open for business no later than December 5, 2015, though Tenant's actual opening date shall be consistent with the grand opening of the Marina Park project, schedule for early December 2015. 8.4.1. Construction Period/Early Occupancy. The period commencing the date on which the Tenant receives notice of from City and ending on the Commencement Date (the "Early Occupancy Period"), Tenant shall be permitted to enter the Premises for the sole purpose of installing furniture, fixtures and equipment (including data and telephone lines and equipment), furnishings and decorations therein, provided that (a) Tenant's early entry does not interfere with City's performance of City's Work; (b) prior to Tenant's entry in the Premises, Tenant shall furnish to City Lighthouse Cafe, LLC Page 18 8-33 certificates of insurance satisfactory to City evidencing Tenant's compliance with the requirements of Section 11.3, and a schedule, for City's approval, which shall detail the timing and purpose of Tenant's entry; and (c) Tenant's work in the Premises prior to the Commencement Date shall comply with the requirements of Section 8. Tenant's occupancy of the Premises during the Early Occupancy Period shall be subject to all of the terms, covenants and conditions of this Agreement, including, without limitation, Tenant's indemnity obligations set forth in Section 11.3, except that City agrees that Tenant's obligation to pay Base Rent and Percentage Rent (defined in Section 4) shall be waived. Tenant shall, however, pay the cost of all utilities and other services provided to the Premises prior to the Commencement Date that are required by reason of Tenant's early occupancy. 8.4.2. Early Access. Subject to the provisions of this Section, City shall allow Tenant access to the Premises prior to the Commencement Date for purposes of installing Tenant's furniture, fixtures, equipment, millwork and telephone/data cabling ("Tenant's Fixturing Work"). Tenant and Tenant's employees, agents, contractors, subcontractors, suppliers or any other person requiring access to the Premises in connection with the performance of Tenant Fixturing Work (each, "Tenant's Construction Representative" and collectively, "Tenant's Construction Representatives") shall be subject to reasonable approval by Landlord prior to the commencement of their work, and Tenant shall cause Tenant's Construction Representatives to engage only labor that is harmonious and compatible with other labor working on the Property. Tenant and Tenant's Construction Representatives shall work cooperatively with City to coordinate the scheduling and performance of Tenant's Fixturing Work so as not to delay the completion of construction of the Property or the Premises.. As a condition to entering the Property, each of Tenant's Construction Representatives shall provide City with satisfactory evidence of such commercially reasonable insurance as City may reasonably require. Tenant's Construction Representatives shall comply with City's current contractor rules and regulations, while in the Premises or elsewhere in the Project. Tenant's Construction Representatives shall not interfere with or delay the construction of the Tenant Improvements or any other work on the Property. If at any time any of Tenant's Construction Representatives hinders or delays construction of the Tenant Improvements or any other work on the Property or performs any work that impairs the quality, integrity or performance of the Tenant Improvements or other work in any portion of the Property, upon written notice from City, Tenant shall promptly cause such Tenant's Construction Representative to leave the Property and remove all of its tools, equipment and Lighthouse Cafe, LLC Page 19 WE materials. Tenant shall reimburse City for the cost of any repairs to the Premises or other portions of the Property or common areas to the extent necessitated by the acts or omissions of Tenant's Construction Representatives. All entries into the Premises by Tenant or Tenant's Construction Representatives prior to the Commencement Date shall be subject to all of the terms, covenants and conditions of this Agreement, including, but not limited to, Tenant's insurance obligations contained in Section 11.3 and Tenant's indemnity obligations contained in Section 11, excluding the obligation to pay Base Rent and Percentage Rent. 8.4.3 Construction Coordination. Tenant shall be responsible for coordinating with City's design and construction teams to ensure that Tenant's proposed scope of Tenant Improvements to the Premises complies with the energy and resource efficient requirements, design guidelines for the project, points of connection with the utilities, during the development of Tenant's design and construction drawings, and coordination of trades and access to the site during Tenant's construction of the Tenant Improvements at Tenant's sole cost. 8.5 Permits. Unless restricted by law, Tenant shall obtain, and be responsible for the costs for all building permits, health department permits and other required permits prior to commencement of Tenant improvements and operations. If applicable, Tenant shall be responsible, at its sole cost and expense, for compliance with the California Environmental Quality Act ("CEQA") and the California Coastal Act in connection with Tenant's operation and use of the Property. 8.6 Quality of Work Performed. All 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. Tenant shall pay all costs related to the construction of the improvements and any alterations by Tenant or its agents. 8.8 Liens Prohibited: Tenant shall not permit to be imposed, recorded or enforced against the Premises or Property, any portion thereof or any structure or Improvement thereon, any mechanics, materialmen's, contractors or other liens arising from, or any claims for damages growing out of, any work or repair, construction or alteration of improvements on the Premises. 8.8.1 Release/Removal of Liens: In the event any lien or stop notice is imposed or recorded on the Premises or Property, or an Improvement permanently affixed to the Premises or Property, during the Term Tenant shall pay or cause to be paid all such liens, claims or demands before any action is brought to enforce the Lighthouse Cafe, LLC Page 20 8-35 same against the Premises or Property or the Improvement. Notwithstanding the foregoing, if Tenant legitimately contests the validity of such lien, claim or demand, then Tenant shall, at its expense, defend against such lien, claim or demand provided that it provide City the indemnity in this Agreement and provided Tenant shall pay and satisfy any adverse judgment that may be rendered before any enforcement against City or the Premises or Property. 8.9 Disposition of Alterations at Expiration or Agreement Termination. Any alterations made to the Premises shall remain on, and be surrendered at no cost to City with, the Premises on expiration or termination of this Agreement (excluding Tenant's fixtures, equipment, furniture, and moveable decorations). Prior to expiration or within fifteen (15) calendar days after termination of this Agreement, Tenant may remove any moveable partitions, machinery, equipment, furniture, and trade fixtures previously installed by Tenant, provided that Tenant repairs any damage to the Premises caused by removal and restore the Premises to Good Condition. 9. BONDING 9.1 Tenant shall obtain, provide, and maintain at their own expense during the term of construction of the Tenant Improvements both of the following: (1) a Faithful Performance Bond in the amount of one hundred percent (100%) of the total amount to be paid to contractor as set forth in their respective contract with Tenant in the form attached as Exhibit I and incorporated herein by reference; and (2) a Labor and Materials Payment Bond in the amount of one hundred percent (100%) of the total amount to be paid to contractor as set forth in their respective contract with Tenant and in the form attached as Exhibit J and incorporated herein by reference. Said bonds are necessary for City to complete any incomplete Tenant Improvements in order to obtain a Certificate of Occupancy. 9.2 The Faithful Performance Bond and Labor and Materials Payment Bond shall be issued by an insurance organization or surety (1) currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, (2) listed as an acceptable surety in the latest revision of the Federal Register Circular 570, and (3) assigned a Policyholders' Rating A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide: Property -Casualty. 9.3 Tenant's contractors shall deliver to both Tenant and City, concurrently with execution of their respective contracts with Tenant prior to commencement of any work under the contract upon the Premises and Property, the Faithful Performance Bond and Labor and Materials Payment Bond, and a certified copy of the "Certificate of Authority" of the Insurer or Surety issued by the Insurance Commissioner, which authorizes the Insurer or Surety to transact surety insurance in the State of California. Lighthouse Cafe, LLC Page 21 WM 10. MAINTENANCE OF PREMISES 10.1 Maintenance and Repair by Tenant and City. Tenant agrees that it will keep the Premises in good condition. City may perform maintenance or repairs in the event Tenant fails to commence required maintenance or repairs within the time provided by City in the written notice requesting such maintenance or repair (which shall not be less than five (5) days unless and in case of emergency or urgent situation). The cost of any maintenance or repairs by the City pursuant to this Section shall be payable as Additional Rent. All furnishings, equipment, facilities, improvements, alterations, attachments and appurtenances provided by City or installed by Tenant, and required for Concession operations, including all kitchen equipment and interior furnishings, including items under warranty, shall be maintained in good condition and repair by Tenant at its cost. City may perform required cleaning and charge the costs to Tenant if the Tenant fails to perform said cleaning within the time provided by City in the written notice requesting the cleaning (which shall not be less than five (5) calendar days) and continue to maintain the area as required by this Agreement. 10.2 Entry by City. Upon twenty-four (24) hours prior written notice to Tenant, City and its authorized City representative(s) may enter upon and inspect the Premises during normal business hours for any lawful purpose. In case of emergency, City or its authorized City representative(s) may, without prior notice, enter the Premises by whatever force reasonably necessary if Tenant is not present to open and permit an entry. Any entry to the Premises by City under this Agreement shall not be construed as a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant from the Premises or any portion thereof. Any damage caused to the Premises pursuant to this Section 10.2 by the City shall be repaired or replaced by the City at the City's sole expense. 10.3 Maintenance by City. City shall keep and maintain in first class condition and repair or replace as necessary the Common Area, the roof of the Premises (including, but not limited to, the roof membrane, roof structure, and roof systems — e.g., gutters and downspouts), exterior walls, interior structural walls, structural parts and structural floor of the Premises, and all drainage and utility systems that are not an obligation of Tenant under this Agreement. 11. INDEMNITY AND EXCULPATION; INSURANCE 11.1 Hold -Harmless Clause. Tenant agrees to indemnify, defend and hold harmless the City, its City Council, Boards, Commissions, Committees, officers, agents, volunteers, and employees, as well as the State of California, its officers, employees and volunteers (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 Tenant's, Tenant's employees, contractor, subcontractor, Lighthouse Cafe, LLC Page 22 8-37 agents, guests, invitees, subtenant's possession, occupation or use of the Premises, specifically including, without limitation, any claim, liability, loss, or Damage arising by reason of: A. 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 Tenant or an agent, contractor, subcontractor, supplier, employee, servant, or sublessee of Tenant; B. Any work performed on the Premises or materials furnished to the Premises at the request of Tenant or any agent or employee of Tenant, with the exception of Maintenance performed by City; and/or C. Tenant'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. Tenant's obligations pursuant to this Subsection shall not extend to any Claim proximately caused by the 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. 11.2 Exculpation of City. Except as otherwise expressly provided in this Agreement, City shall not be liable to Tenant for any damage to Tenant or Tenant'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, Tenant 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 Tenant for any damage to the Premises, Tenant's property, Tenant's goodwill, or Tenant's business income, caused in whole or in part by acts of nature. 11.3 Insurance. Tenant shall maintain insurance in the types and amounts specified in Exhibit "G," attached hereto and incorporated herein by this reference. 12. DAMAGE OR DESTRUCTION OF PROPERTY/PREMISES 12.1 Destruction of Premises. If the Premises are totally or partially destroyed, rendering the Premises or any portion thereof totally or partially inaccessible or unusable, Tenant shall restore the Premises to substantially the same condition as immediately prior to such destruction (including all trade fixtures, personal property, improvements and Alterations as are installed by Tenant, which shall be replaced by Tenant at its expense). Alternatively, Tenant may elect to terminate this Agreement by giving written notice of such election to City within sixty (60) calendar 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 Tenant reasonably estimates that repairs of the Premises will Lighthouse Cafe, LLC Page 23 ME take more than six (6) months. Upon such termination, insurance proceeds applicable to reconstruction of the Premises (excluding Tenant's personal property therein) shall be paid to City and Tenant shall have no further liability or obligations under this Agreement. 12.2 Replacement of Tenant's Property. In the event of damage or destruction of improvements located on the Premises not giving rise to Tenant's option to terminate this Agreement, Tenant shall, at its own expense, replace and repair all Tenant's trade fixtures, equipment, machinery, furnishings, furniture and inventory as soon as reasonably possible to permit the prompt continuation of Tenant's business at the Premises. 12.3 Destruction of 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: A. Terminate this Agreement by giving to Tenant written notice (which notice shall be given, if at all, within thirty (30) calendar days following the date of the casualty), in which case this Agreement shall be terminated thirty (30) calendar days following the date of the casualty; or B. Give Tenant written notice of City's 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 13. Tenant may terminate this Agreement by giving City written notice at any time prior to the commencement of repairs if City agrees to repair the Property pursuant to this Section and fails to commence repairs within one hundred twenty (120) calendar days after giving Tenant written notice of its intention to repair. In such event, this Agreement shall terminate as of the date of notice from Tenant to City, and City shall have no liability under this Agreement. 13. ABATEMENT OF RENT General Rule. 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, Tenant shall continue to utilize the Premises for the operation of its business to the extent it may be practicable and commercially reasonable. Rent shall abate only in proportion to the area of the Premises that is rendered unusable. The abatement 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 and Tenant's re -opening of the Premises. Tenant's obligation to pay Taxes pursuant to this Lighthouse Cafe, LLC Page 24 • 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 Tenant or its employees, officers or agents. Tenant's right to abatement of Rent is contingent on payment of insurance proceeds, if any, equal to the amount of Rent pursuant to coverage required by Section 11.3. 14. PROHIBITION AGAINST VOLUNTARY ASSIGNMENT, SUBLETTING AND ENCUMBERING 14.1 Prohibition of Assignment. City and Tenant acknowledge that City is entering into this Agreement in reliance upon the experience and abilities of Tenant. Consequently, Tenant 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 to occupy or use all or any part of the Premises without the prior written consent of City, which shall not be unreasonably withheld. Any assignment or transfer made without the City's written consent is null and void. City's consent to any assignment or other transfer is subject to Tenant providing City with evidence reasonably satisfactory to City that the proposed transferee has financial strength and restaurant or food service experience comparable to Tenant 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 Tenant, or the sale or other transfer resulting in a transfer of a controlling percentage of the capital stock of Tenant, shall be deemed a voluntary assignment; provided, however, that the sale or transfer of a controlling percentage of the capital stock of Tenant pursuant to a public offering(s) of equity or debt instruments issued by Tenant, 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 Tenant'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 Tenant traded on a national exchange or over-the-counter markets. 14.2 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 Tenant. For purposes hereof, an "Affiliate", a "Subsidiary", and a "Successor" of Tenant are defined as follows: A. an "Affiliate" is any corporation or other entity which directly or indirectly controls or is controlled or is under common control with Tenant (for purposes of this Section, "control" shall mean the possession, directly or indirectly, of the 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); Lighthouse Cafe, LLC Page 25 M B. 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 Tenant and which is at least as creditworthy as Tenant; and C. a "Successor" shall mean a corporation or other entity in which or with which Tenant 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 Tenant. 14.3 Continuing Effect. City's consent to any assignment or encumbrance shall not relieve Tenant 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. 14.4 Estoppel Certificate. Within seven (7) calendar days of City's written request, Tenant shall execute and deliver to City, on City's form, a written statement, acknowledging that: A. Tenant currently occupies the Premises pursuant to a valid, written Lease; B. The date of the lease and the most recent renewal (collectively the "Lease"); C. The Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Agreement, as so modified, is in full force and effect); D. City is not in default of the Lease (or, specifying such defaults, if any are claimed); E. City has performed all duties required under the Lease; F. Tenant has no knowledge that City is in violation of any law (or, specifying such violations, if any are claimed); G. Tenant has no offsets or credits against rent due under the Lease, nor any legal claims or defenses arising from the Lease or Tenant's use and occupancy of the Premises (or, specifying such offsets, credits, claims and defenses, if any are claimed); and H. Any other matters that City or City's lender may reasonably require. Lighthouse Cafe, LLC Page 26 15. DEFAULT 15.1 Default by Tenant. The occurrence of any one (1) or more of the following events shall constitute a default and material breach of this Agreement by Tenant: A. The vacating or abandonment of the Premises by Tenant for a period of thirty (30) successive calendar days, without the prior permission of the Authorized City Representative, excluding closures during periods of casualty, condemnation or permitted closures set forth in this Agreement; B. The failure by Tenant 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) calendar days after written notice of default from City to Tenant; C. Except as specified in Subsection 15.1(8), the failure of Tenant to observe or perform any of the material covenants, conditions or provisions of this Agreement to be observed or performed by Tenant where such failure shall continue for a period of thirty (30) calendar days after written notice thereof from City to Tenant; provided, however, that if the nature of Tenant's default is such that more than thirty (30) calendar days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said thirty (30) calendar day period and thereafter diligently prosecutes such cure to completion; D. The making by Tenant of any general arrangement or assignment for the benefit of creditors; E. Tenant becomes a "debtor' as defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) calendar days); F. The appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Agreement, where such appointment is not discharged within sixty (60) calendar days; and G. The attachment, execution or the judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Agreement, where such seizure is not discharged within sixty (60) calendar days. 15.2 Remedies. Lighthouse Caf6, LLC Page 27 15.2.1 Cumulative Nature of Remedies. If any default by Tenant shall continue without cure beyond the time permitted under 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. 15.2.2 Re-entry without Termination. City may re-enter 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. Tenant shall nevertheless pay to City on the dates specified in this Agreement the equivalent of all sums required of Tenant 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 Tenant specific written notice of termination. City may terminate this Agreement by giving Tenant written notice of termination with a specified termination date. In the event City terminates this Agreement, City may recover possession of the Premises (which Tenant shall surrender and vacate upon demand) and remove all persons and property. City shall be entitled to recover the following as damages; A. The value of any unpaid Rent or other charges that are unpaid at the time of termination; B. The value of the Rent and other charges that would have accrued after termination less the amount of Rent and charges the City received or could have received through the exercise of reasonable diligence as of the date of the award, provided, however, that City shall use its best efforts to re- lease the Premises and upon the City's re-leasing the Premises Tenant shall be released from all further liability for Rent and other charges that would have accrued after termination; C. Any other amount necessary to reasonably compensate City for the detriment proximately caused by Tenant's failure to perform its obligations under this Agreement; and D. 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 Lighthouse Cafe, LLC Page 28 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 an act or omission of Tenant. 15.2.3 Use of Tenant's Personal Property. In the event Tenant is in default past applicable notice and cure periods, City may use Tenant's personal property and trade fixtures located on the Premises or any of such property and fixtures without compensation or liability to Tenant for use or damage. In the alternative City may store the property and fixtures at the cost of Tenant. City shall not operate the Concession in any manner tending to indicate that the Concession is affiliated with, part of or operated in conjunction with Tenant's business. City shall not operate, or allow any other person or entity to operate under the same or similar trade name as the Tenant. 15.3 City's Right to Cure Tenant's Default. Upon continuance of any material default beyond applicable notice and cure periods, City may, but is not obligated to, cure the default at Tenant's cost. If City pays any money or performs any act required of, but not paid or performed by, Tenant after notice, the payment and/or the reasonable cost of performance shall be due as additional Rent not later than ten (10) calendar days after service of a written demand accompanied by supporting documentation upon Tenant. 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. 16. WASTE OR NUISANCE Tenant shall not commit or permit the commission of any waste on the Premises. Tenant shall not maintain, commit, or permit any nuisance as defined in Section 3479 of the California Civil Code on the Premises. Tenant shall not use or permit the use of the Premises for any unlawful purpose, including, but not limited to, any use that violates the City's charter or Municipal Code 17. NO CONFLICTS OF USE, HAZARDOUS MATERIALS. From the Effective Date and throughout the Term, Tenant shall not use, occupy or permit any portion of the Premises or Property to be used or occupied in violation of any law. City represents and warrants that, to the best of City's knowledge, (i) Tenant's use of the Premises does not conflict with applicable Laws, and City knows of no reason why Tenant would be unable to obtain all required permits, licenses and approvals from the appropriate governmental authorities; (ii) the Premises is not in violation of any applicable Law, rules or regulations and Tenant's contemplated uses will not cause any Lighthouse Cafe, LLC Page 29 such violation; and (iii) the Premises 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 Tenant or its guests, invitees, contractors, agents, subcontractors is detected at the Premises at any time during the Term of this Agreement and any Option Term all remedial work shall be performed by City at City's expense. Tenant's obligation to open (or re -open, as the case may be) shall be delayed until the remedial work is completed if the remedial work is performed prior to Tenant opening for business. Tenant's obligation to pay Rent shall be abated pursuant to Section 13 to the extent Tenant is unable to conduct its business upon the Premises as a result of any remedial work that is performed subsequent to Tenant opening for business. Tenant shall have the right (but not the obligation) to terminate this Agreement, upon thirty (30) calendar days advance written notice to City in the event that Hazardous Materials are detected at the Premises and the presence or the remediation materially affects Tenant's ability to conduct its business at 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. CITY'S DEFAULTS/TENANT'S REMEDIES. 18.1 City shall be in default if it fails to perform, or commence performance if the obligation requires more than ten (10) calendar days to complete, any material obligation within ten (10) calendar days after receipt of written notice by Tenant to City specifying the nature of such default. City shall also be in default if it commences performance within ten (10) calendar days but fails to diligently complete performance. In the event of City's default, Tenant may: A. Upon thirty (30) calendar days written notice to City, cure any such default, and City shall reimburse Tenant the amount of all reasonable costs and expenses incurred by Tenant 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 Tenant's use of the Premises for its intended purpose and City fails to cure such default within thirty (30) calendar days after a second written demand by Tenant. 19. EVENT OF BANKRUPTCY 19.1 If this Agreement is assigned to any Person or entity pursuant to the provisions of the Bankruptcy Code, 11 U.S.C. Sections 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 Lighthouse Cafe, LLC Page 30 constitute property of Tenant or of the estate of Tenant 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. 19.2 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 and any Amendments on and after the date of such assignment, including the obligation to operate the business which Tenant is required to operate under this Agreement. 20. NOTICES. Any notice, demand, request, consent, approval or communication that either party desires or is required to give shall be in writing and shall be deemed given three (3) calendar days after deposit into the United States registered mail, postage prepaid, by registered or certified mail, return receipt requested. Unless notice of a different address has been given in accordance with this Section, all notices shall be addressed as follows: If to City, to: City of Newport Beach Attn: Real Property Administrator 100 Civic Center Drive P.O. Box 1768 Newport Beach, CA 92658 If to Tenant, to: Lighthouse Cafe, LLC Attn: Doug Cavanaugh 557 Wald Irvine, CA 92618 21. SURRENDER OF PREMISES At the expiration or earlier termination of this Agreement, Tenant shall surrender, at no cost, to City the possession of the Premises. Tenant shall leave the surrendered Premises, required personal property, equipment and fixtures, in good and broom -clean condition, reasonable wear and tear excepted. All property that Tenant is not required to surrender, but that Tenant does abandon shall, at City's election, become City's property at expiration or termination. City shall owe no compensation to Tenant for any personal property, equipment or fixtures left at the Premises by Tenant more than fifteen (15) calendar days after the expiration or termination of this Agreement. Lighthouse Cafe, LLC Page 31 22. COMPLIANCE WITH ALL LAWS Tenant 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. 23. 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, 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. 24. 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. 25. CONFLICT In case of conflict, the more specific provision of this Agreement shall control. 26. 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. 27. ENTIRE AGREEMENT; AMENDMENTS 27.1 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. 27.2 This Agreement shall supersede any and all prior agreements, oral or written, regarding the subject matter between Tenant and City. 27.3 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. Lighthouse Cafe, LLC Page 32 27.4 The terms and conditions of this Agreement shall not be altered or modified except by a written amendment to this Agreement signed by Tenant and the Authorized City Representative. 27.5 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. 27.6 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. 27.7 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 relevant to this transaction constitutes a waiver of any objection, contention, or claim that might have been based on such reading, inspection, or advice. 28. TIME IS OF THE ESSENCE Time is of the essence for this Agreement. 29. 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. 30. 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. 31. 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. 32. 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 Lighthouse Cafe, LLC Page 33 corporation, partnership, or other legal entity whenever the context requires. The singular number includes the plural whenever the context so requires. 33. 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. 34. CITY BUSINESS LICENSE Tenant shall obtain and maintain during the duration of this Agreement, a City business license as required by the Newport Beach Municipal Code 35. 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. 36. NONDISCRIMINATION Tenant, for itself and its successors, agrees that in the performance under this Agreement, Tenant shall not discriminate against any person because of the marital status, ancestry, gender, sexual orientation, etc. of that person or any characteristic listed or defined in Section 11135 of the Government Code. 37. MEMORANDUM OF LEASE AGREEMENT A Memorandum of Lease Agreement, in a form and content similar to that contained in Exhibit "H" shall be recorded by the parties promptly upon execution of this Agreement. Upon execution by both parties, the Memorandum of Lease Agreement shall be recorded against the Premises in the office of the Orange County Clerk -Recorder, as required by Government Code Section 37393. 38. NO THIRD PARTY BENEFICIARIES City (both as a lessor and as the City of Newport Beach) and Tenant 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. 39. LAWS It shall be the obligation of Tenant 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 the City shall not be liable for any violation by Tenant (or Tenant's agent, sublessee or any party affiliated with Tenant) thereof. Lighthouse Cafe, LLC Page 34 40. NO DAMAGES Tenant 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, Tenant 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 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 Tenant 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 Tenant's sole and exclusive judicial remedies. 41. GOVERNMENT CLAIMS ACT Tenant and City agree that in addition to any claims filing or notice requirements in this Agreement, Tenant shall file any claim that Tenant may have against City in strict conformance with the Government Claims Act (Government Code sections 900 et seq.), or any successor statute. 42. 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. [Signature page follows] Lighthouse Cafe, LLC Page 35 E IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates written below. APPROVED AS TO FORM: THE CITY ATTONEY'S OFFICE Date: -3 ICS I 5� By: Aaron C. arp City Attorney CArM cr3I10I1V ATTEST: Date: By: Q,�/C�-' Leilani I. Br&w6 City Clerk IIF0 ' «ri CITY OF NEWPORT BEACH, a California municipal corporation Date: oifME TENANT: LIGHTHOUSE CAFE, LLC, a California limited liability company Date: IS By: Doug Cavanaugh Managing Member Date: '',.;, — Z';� - IS By: t Tad Belshe Member [End of Signatures] Lighthouse Cafe, LLC Page 36 8-51 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 Califo la County of }ss. On Jam' �— 20before me, Notary Public, personally appeared who proved to me ori the basis of seftisfactory 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 paragra h is true and correct. RICK BARTLETT >� of TyF s` n COMM. # 2096208 20 WIT fficial sear NOTARY PUBLIC -CALIFORNIA X ORANGE COUNTY °Quita4 MY COMM. EXP. FEB 2, 2019 Signa re (se 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 C_J j�r,.,� of . } ss. On ` 20,/J' before me, e Notary Public, personally appeared <` who proved to me on the bas s 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. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. gy FrHFF RICK BARTLETT WITN al seal. s �� COMM. # 2096208 ;0 $NOTARY PUBLIC-CALIFORNA i r ORANGE COUNTY Signa a (sea=QL-I MY COM 9, EX?. FEB 2, 2D19 �� 8-52 EXHIBIT "A" Property & Premises Depiction Lighthouse Cafe Page A-1 8-53 EXHIBIT A - 1 8-54 CV H m_ _ X W LIGHTHOUSE RESTROOM GIRL SCOUT VISITING _...___..... VESSEL MARINA b n/Fier man BUNDY—FINKEL■Arc h,IaCls Note: Trash removal or deliveries are prohibited through the breezeway at all times. OVERALL SITE PLAN Cafe Trash haul out route — — — Delivery route ® — 8-55 HOUSE ' ENLARGED SITE PLAN ~SAILING f /COMMUNITY t' ? t 11 CENTER CENTER) � ---------------------------------------- _...r . 1 , GATEWAY MONUMENT SIGN i SIGN i I BALBOA BOULEVARD b n/Fier man BUNDY—FINKEL■Arc h,IaCls Note: Trash removal or deliveries are prohibited through the breezeway at all times. OVERALL SITE PLAN Cafe Trash haul out route — — — Delivery route ® — 8-55 NOTE. ALL IMAGES SHOWN IS AN ARTIST'S RENDERING 01 JLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN ,EE THE DETAILED DRAWINGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE �2 LUW 11 EXPOSED METAL FRAMING - UP OF OPENING TO NO GYP. BD. 12 PLANTER AREA TOWER ABOVE ® STEEL COLUMN Outdoor CONCRETE BENCH Dining Area —� Cafe ❑7 OPERABLE WINDOW r�, f ® POTENTIAL SEATING (BY TENANT) 1,270 sq. ft. OUTDOOR SEATING x ` r i # � 10 It 1 6 !� ° Tllllr� Storage 137 sq. ft. i 4z r7i7_12i f - 1f Kitchen 1 660 sq. ft. co ; Total Leasable Area. 3,069 sq. ft. /8 SJ >" (including tad floor deck area) W FIRST FLOOR PLAN F NOTE. ALL IMAGES SHOWN IS AN ARTIST'S RENDERING 01 JLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN ,EE THE DETAILED DRAWINGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE �2 CAFE ENTRY 11 EXPOSED METAL FRAMING - F3] OF OPENING TO NO GYP. BD. 12 PLANTER AREA TOWER ABOVE ® STEEL COLUMN CONCRETE BENCH © DUMBWAITER SHAFT (EQUIP. BY TENANT) ❑7 OPERABLE WINDOW ® POTENTIAL SEATING (BY TENANT) ❑9 LIMIT OF LOCATION FOR NON-EXCLUSIVE OUTDOOR SEATING 8-56 NOTE; ALL IMAGES SHOWN IS AN ARTIST'S RENDERING ONLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAWINGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. IN F1 OPEN TO BELOW 11 BUILT-IN COUNTER [2 ALUMINUM GUARDRAIL F3 TRENCH DRAIN ® STEEL COLUMN EQUIPMENT VENT SHAFT TO ROOF © DUMBWAITER SHAFT (EQUIP. BY TENANT) F7 TOP OF STORAGE ROOM BELOW ® 4'-0" WIDE PATH OF TRAVEL TO BE MAINTAINED BY TENANT F9 POTENTIAL SEATING (BY TENANT) 10 METAL TRELLIS ABOVE 8-57 EXHIBIT "B" Alcohol Conditions Lighthouse Cafe Page B-1 wo Exhibit "B" Conditions Related to Alcohol License 1. State Department of Alcoholic Beverage Control license types classified as "Public Premises" shall be prohibited. 2. If required by the State Department of Alcoholic Beverage Control, the applicant shall provide the Chief of Police a statement of facts showing why the issuance of alcohol licenses for the proposed project would serve public convenience or necessity. 3. Approval of this lease agreement does not permit the restaurants to operate as nightclub as defined by the Newport Beach Municipal Code, unless the Planning Commission first approves such permit. 4. Prior to occupancy and operation of the proposed restaurant and its ancillary uses, a comprehensive security plan shall be submitted to the Newport Beach Police Department for review and approval. 5. 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. 6. 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. 7. No games or contests requiring or involving the consumption of alcoholic beverages shall be permitted. 8. All persons selling alcoholic beverages shall be over the age of 21 and undergo and successfully complete a certified training program in responsible methods and skills for selling alcoholic beverages. The certified program must meet the standards of the California Coordinating Council on Responsible Beverage Service or other certifying/licensing body, which the State may designate. Records of each owner's, manager's and employee's successful completion of the required certified training program shall be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach. 9. The Tenant, as operator of the facility, shall be responsible for the control of noise generated by the subject facility 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 tenant space, 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. • 10. That no outdoor sound system, loudspeakers, or paging system shall be permitted in conjunction with the restaurant facility without the written approval of City, pursuant to Section 5.3 of this Agreement. Tenant shall obtain all required City permits and approvals. 11. The Tenant 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 restaurant, during business hours, if directly related to the patrons of the establishment. 12. No alcoholic beverages shall be consumed on any property adjacent to the licensed premises under the control of the licensee. 13. 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. 14. 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. 15. 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. 16. Tenant, as the operator of the establishment, 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. 17. The hours of operation for the interior of the restaurant shall be limited between 7:00 a.m. and 11:00 p.m., Sunday through Thursday, and 7:00 a.m. and 12:00 midnight, Friday through Saturday. 18. Service on the outdoor dining patio shall end by 10:00 p.m., daily. The outdoor dining patio shall be closed by 10:30 p.m., daily. 19. The exterior windows and doors of the facility shall be closed after 10:00 p.m. 20. The height of the boundary wall of the accessory outdoor first and second -floor dining areas shall be not less than forty-two (42) inches tail or consistent with the guardrail on the second - floor dining area, whichever is greater, and shall enclose the area where alcohol may be served. Fences, walls, or similar barriers shall serve only to define the outdoor dining area 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. i •I 21. Storage outside of the leased Premises or outside of the building in the front or at the rear of the Property shall be prohibited, with the exception of the required trash container enclosure. 22. All trash shall be stored within the Premises or within dumpsters stored in the trash enclosures for the Property, 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. 23. The Tenant 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). 24. 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. The City shall provide for daily removal of trash, litter debris and graffiti from the Property. Tenant shall immediately notify the City of any such issues at the premises. 25. 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 the City Manager. 26. The Tenant is required to take reasonable steps to discourage and correct objectionable conditions that constitute a nuisance within the Premises, adjacent properties, or surrounding public areas, sidewalks, or parking lots of the restaurant, during business hours, if directly related to the patrons of the establishment. 27. Tenant 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 the 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. 30. Food service from the regular menu shall be available to patrons up to thirty (30) minutes before the scheduled closing time. 31. No alcoholic beverages shall be consumed on any property adjacent to the licensed premises under the control of the licensee. 32. There shall be no live entertainment or dancing allowed on the Premises without the Tenant first obtaining a Special Event Permit from the City. 33. Strict adherence to maximum occupancy limits is required. 34. A Special Events Permit is required for any event or promotional activity outside the normal operational characteristics of the approved user, as conditioned, orthat 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. 35. Should the Property be sold or the Premises leased to a new tenant, subtenant, or otherwise come under new ownership, operation, or management, a new Operator License shall be required. 36. To the fullest extent permitted by law, Tenant shall 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 Tenant'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 Tenant, City, and/or the parties initiating or bringing such proceeding. The Tenant 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. The Tenant shall pay to the City upon demand any amount owed to the City pursuant to the indemnification requirements prescribed in this condition. Exhibit "C" Delivery/Loading Zone, Common Areas, Parking Lighthouse Cafe Page C-1 a ---- ---------ENLARGED U ,.�.� r- •/'COMMUNITYt SAILING) I } CENTER I1, F- CENTER 1; m_ rs; x -�_.,. k ..:..,.�,. _.:.gym.• t .. I ..... W i� _ .. .. T LIGHTHOUSE ,..TRASH RESTROOM GIRL SCOUT HOUSE V � • f u ,7%_1 W L1 VISITING _........ _------ VESSEL MARINA - ---------------- ----------------------- ENLARGED SITE PLAN ---- ---------ENLARGED ,.�.� r- •/'COMMUNITYt SAILING) I } CENTER I1, CENTER 1; rs; -�_.,. k ..:..,.�,. _.:.gym.• t .. I ..... i� _ .. .. T +J ,..TRASH b rman BUNDY—FINKEL- Architects OVERALL SITE PLAN Cafe Note: Trash removal or deliveries are prohibited Trash haul out route — — — through the breezeway at all times. Delivery route ® — • E F1 750 GALLON GREASE INTERCEPTOR (FOR TENANT'S EXCLUSIVE USE) ENLARGED SITE PLAN 2" COLD WATER & 3" GAS STUB Cafe R3 FUTURE 400 AMP PANEL SERVING KITCHEN & CAFE (BY TENANT) Trash haul out route R,0- , .rman ® 4" GREASE WASTE STUB Delivery route ElBREEZEWAY Note: Trash removal or deliveries are prohibited -�- — © 6" WASTE LINE through the breezeway at all times. BU1 NDY-FiNKEL•Arch facts F71 (4) - 4' EMPTY CONDUITS FOR TENANT'S FUTURE USE Exhibit "D" Outdoor Dining Areas (First & Second Floor) Lighthouse Cafe Page D-1 :.. © UP ' 1 Outdoor Dining Area —0 , o Cate 1,270 sq. ft. ' f ----` �/ O 1 ' S 6 2 _ o Storage 137 sq. ft. P " f r Kitchen 1 660 sq. ft. .., 1 H t Total Leasable ;I H — Area° 3,069 sq. ft. pa p 78 :�rS (including 2nd floor deck area) H 'i W j f t FIRST FLOOR PLAN NOTE. ALL IMAGES SHOWN IS AN ARTISTS RENDERING Of ILY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAWINGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. 8-67 ❑2 CAFE ENTRY 11 EXPOSED METAL FRAMING - 5g LINE OF OPENING TO GYP. 12 PPLL ANTER AREA TOWER ABOVE ® STEEL COLUMN CONCRETE BENCH © DUMBWAITER SHAFT (EQUIP. BY TENANT) F7 OPERABLE WINDOW ® POTENTIAL SEATING (BY TENANT) 9 ❑ LIMIT OF LOCATION FOR NON-EXCLUSIVE OUTDOOR SEATING 8-67 NOTE: ALL. IMAGES SHOWN IS AN ARTISTS RENDERING ONLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAWINGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. la F1 OPEN TO BELOW 11 BUILT-IN COUNTER F2 ALUMINUM GUARDRAIL TRENCH DRAIN ® STEEL COLUMN EQUIPMENT VENT SHAFT TO ROOF © DUMBWAITER SHAFT (EQUIP. BY TENANT) ❑7 TOP OF STORAGE ROOM BELOW ® 4'-0" WIDE PATH OF TRAVEL TO BE MAINTAINED BY TENANT PIPOTENTIAL SEATING (BY TENANT) 10 METAL TRELLIS ABOVE Exhibit "E" Delivery Condition Lighthouse Cafe Page E-1 :.• Rabbeln/Herman B1 UNOY—FiNKEL■ArcniIacts ❑1 750 GALLON GREASE INTERCEPTOR (FOR TENANT'S EXCLUSIVE USE) ENLARGED SITE PLAN ❑� 2" COLD WATER & 3" GAS STUB Cafe M FUTURE 400 AMP PANEL SERVING KITCHEN & CAFE (BY TENANT) Trash haul out route am on om ® 4" GREASE WASTE STUB Delivery route R5 BREEZEWAY Note: Trash removal or deliveries are prohibited © 6" WASTE LINE through the breezeway at all times. (4) - 4" EMPTY CONDUITS FOR TENANT'S FUTURE USE I . � 1 y � I =�� C 0 i ---------------o 0 0 1 Rabbeln/Herman B1 UNOY—FiNKEL■ArcniIacts ❑1 750 GALLON GREASE INTERCEPTOR (FOR TENANT'S EXCLUSIVE USE) ENLARGED SITE PLAN ❑� 2" COLD WATER & 3" GAS STUB Cafe M FUTURE 400 AMP PANEL SERVING KITCHEN & CAFE (BY TENANT) Trash haul out route am on om ® 4" GREASE WASTE STUB Delivery route R5 BREEZEWAY Note: Trash removal or deliveries are prohibited © 6" WASTE LINE through the breezeway at all times. (4) - 4" EMPTY CONDUITS FOR TENANT'S FUTURE USE I A GATEWAY PROJECT ID ON BUILDING SIGNS 1• - - ." ------------------------------------------------ ROOM ID'S RESTROOM DIRECTIONAL IC1AFE-...... RESTROOM ID &DOOR PLAQUE - - BUILDING ADDRESSES E BLADE MOUNTED PEDESTRIAN DIRECTIONAL • ;',H =� LEED SIGNS Fu]uRE NO SMOKING SIGNS KITCHEN u - FEATURE SIGNS BOAT BAY -t1 TENANT SIGNAGE 3eY i M PICNIC TABLE RESERVATION SIGNS N. SERVICE ANIMAL ONLY SIGNS HOURS OF OPERATION i Prm�RArmEo H4 R LEED PARKING SIGNAGE ACTOEe — ��Q � MAX OCCUPANCY j ° --• EVACS 8 EXIT SIGNAGE STAFF ID'S - MODIFIED ROOM ID'S -- --" HEARING IMPAIRED SIGNS '-------------------- I i - - - DEDICATION PLAQUE '; ENTRY , � MENS { 'Current estimated guess of signage needed. N — ' I r�sr. iz - w "• [_x H —ENe ` - O ENe W Advertising Display. Tenant may, at its own expense, place signs in or upon the Premises subject to the prior written consent of the City as to the location, size, type, number, design and method of installation and in compliance with the City's sign Hcode regulations and the deed restrictions applicable to the Premises, provided any illuminated signs placed on the Prem- ises shall only be lit between the hours of 7:00 a.m. and 10:00 p.m. All signage placed by Tenant on, in or about the Prem- ises shall remain the property of Tenant and shall be removed by Tenant upon termination or expiration of this Agreement at Tenant's expense; and any damage caused by removal shall be repaired at Tenant's expense. City shall be responsible for BUNDY»FrNKeL Arch I eco s installing and maintaining limited directional or identifying signage in or upon the Property. Tenant signage shall be limited to advertising only for the Concessions provided at the Premises. 8-71 f JOTE', THE IMAGE SHOWN IS AN ARTISTS RENDERING ONLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAW- INGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN, bben3S ari s Bl UNOY—FINKEL-Arch,1arts 8-72 WALL MOUNTEP L-1 & L-2 SIGNS OFTIO 11 A - 1 ;!4" A, LUM I N UMWITH LA40 LP L I ri-Al, cisr ju-r EWAKE FOPMED 10 9C) PE(,ll FOWDER-Golki-LL'.) PFoliLl 0 I -E _CTICIN VIEW CEILING MOUNIU) OF'T'10N - 1 "ALUMINUM6QUARETUM 1A13FJGAdlP INTO ARFOW, LEIl EKe0&lfH'lAD0 TO 13E.C,'90AILIMINUMW11'HL--AC,EL)LDGEel-[.A.-rL'U]'OLII R.OUI'EC) MEIA[..L-ANGLE�ANL�WICHL-:�LL-l'I'LF,.,,;. 1" 9 QUA(?L TU [3 L MO U NI'l N G B ?AC KEI CA FF ED Al'I 0 P & 13011*0M, A t�,ROM3 AN [) 13 RAG KLI­'� TO HAY E A VE RTIC/ GP,AiNi3RU6HL-L)ALUMiNUMFINIOHWII-HACLEAP,POWL)LPCOAI', F',IYL1'CAFOl'OPAIN-f'Er)I'OMA1'CH NOTE THE IMAGE SHOWN IS AN ARTIST'S 3 RENDERING ONLY Al' ID MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAW- INGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. R g � abben/merman .......... ........ f BUNDY—FINKEL -Arch, I acts CAFE SIGNAGE EXHIBIT 8-73 -TYPICAL FLOOR SLAB U.N.O.: 5" THICK CONCRETE SLAB—ON—GRADI w/ #3 ® 12" o/c EA. WAY o/ 2" SAND o/ 15 MIL. VAPOR RETARDER o/ 2" SAND o/ SUBRADE SEE it SD2 0 RAISED CON CURB/SLAB AT SHADED TYPICAL Ln I W H H p4 W LOWER FOOTINGS TO HAVE 36" MIN. SOIL ABOVE TYP. 14.1 r DY CIAll r( r — GRADE BEAM �I SD3 x r k. -1..L SD3 4 BF -8 BF -8 I I y I + T�YP. 5" THK. CONC SLAB w/ #3 0 12" o/c EA. WAY o/ 60 PSI RIGID INSULATION o/ 24" THK. MAT. SLAB FOUNDATION w/ #6 ® 18" o/c EA. WAY TOP & BOT. o/ 2" SAND o/ 15 MIL VAPOR RETARDER o/ 10 2" SAND o/ SUB GRADE SEE SD2 I STAIRS PER ARCH`L 1-I�AND SHEET S2.9 @4 V;1342g — --- - — `ii P54 -r ---Y-- I - - - - - 22 ---- €� a I I S5D3 TYP 28 52.7 S2.7 i 1 �- I - ----------- t— SD4COL D p 5.-0.11 IHZ-------------------- :t r24 V22\ TYP D2 SD2 .. , Is a NOTE: THE IMAGE SHOWN IS AN ARTIST'S RENDERING ONLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEETHE DETAILED DRAW- INGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. Rabben/Herman BUNDY-FINKEL•Architects CAFE FOUNDATION PLAN No slab Concrete foundation at 12" below finish floor 5" slab over 7" foam over concrete foundation 8-74 UP UA Outdoors_ Dining f11K Area —�Cafe 1,270 sq. ft. 0 40 L3 10 6 LE -7 K. Storage 137 sq. ft. t d Kitcher1 1 660 sq. ft. I r w - Total Leasable Area, 3,069 sq. ft. 18 S E . (including 2nd floor deck area) a r i i FIRST FLOOR PLAN NOTE: ALL IMAGES SHOWN IS AN ARTIST'S RENDERING ONLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN, SEE THE DETAILED DRAWINGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. �2 CAFE ENTRY 11 EXPOSED METAL FRAMING - F11 OF OPENING TO NO GYP. BD. 12 PLANTER AREA TOWER ABOVE ® STEEL COLUMN ❑S CONCRETE BENCH © DUMBWAITER SHAFT (EQUIP. BY TENANT) 17 OPERABLE WINDOW ® POTENTIAL SEATING (BY TENANT) P9 LIMIT OF LOCATION FOR NON-EXCLUSIVE OUTDOOR SEATING 8-75 NOTE, ALL IMAGES SHOWN IS AN ARTISTS RENDERING ONLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAWINGS AND SPECIFICA11ONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. 19 ❑1 OPEN TO BELOW 11 BUILT-IN COUNTER F2 ALUMINUM GUARDRAIL F3 TRENCH DRAIN ® STEEL COLUMN ❑5 EQUIPMENT VENT SHAFT TO ROOF © DUMBWAITER SHAFT (EQUIP. BY TENANT) F7 TOP OF STORAGE ROOM BELOW ® 4'-0" WIDE PATH OF TRAVEL TO BE MAINTAINED BY TENANT ❑9 POTENTIAL SEATING (BY TENANT) 10 METAL TRELLIS ABOVE NOTE: ALL IMAGES SHOWN LS AN ARTIST'S RENDERING 0[ ILY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAWWGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. _.._._... im Q1 FUTURE GREASE HOOD EXHAUST FAN V( BY TENANT) ❑� METAL OPEN TRELLIS ❑3 ROOF DRAIN & OVERFLOW ® ROOF ACCESS HATCH ❑5 CURB MOUNTED ROOF VENT © ROOFING WALKING TREAD R7 ACRYLIC PYRAMID SKYLIGHT ® TOWER LADDER ACCESSWAY E TUBULAR SKYLIGHT 10 LINE OF ROOF ABOVE 11 SLOPED STANDING SEAM METAL ROOFING DD TOWER LADDER ED FLAT SINGLE -PLY ROOFING DOMED ACRYLIC SKYLIGHT NOTE: ALL ROOFING PENETRATIONS ARE TO BE PER THE DETAILS AND MATERIALS APPROVED BY THE CITY AND THE ROOFING MANUFACTURER 8-77 DECK BELOW 5 000 00 00 I FF I I I I L ---------- -------L-- ' I I � I I I I I I I I I I I � I I I I I I I I I I I I I I I I I � � I I I - I I i I I I I - I I ' I I � � I j O I I \ I ' I I I I I I I I I I I I I I � I I I � I I I 2 IL_LE: I r--- J_lt It El I L_JI I I I I I I I - I I IL_JI I I I I I I I I I I I ' -J------------- r-- , I W I I I I I H � I I � I ' I � I ® O ® O 0 I I L - ----------- W --;o o' ROOF PLAN L NOTE', ALL IMAGES. SHOWN IS AN ARTIST'S RENDERING ONLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAWINGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. ❑1 METAL STANDING SEAM ROOFING Q2 FLAT SINGLE -PLY ROOFING F3 ROOF ACCESS HATCH ® METAL OPEN TRELLIS ❑5 SIGN "L-3" LOCATION NOTE: ALL ROOFING PENETRATIONS ARE TO BE PER THE DETAILS AND MATERIALS APPROVED BY THE CITY AND THE ROOFING MANUFACTURER 8-78 U R E FIRST FLOOR REFLECTED CEILING PLAN storage NOTE: ALL IMAGES SHOWN IS AN ARTIST'S RENDERING ONLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAWINGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. FIRECESSED CAN DOWNLIGHT SURFACE MOUNTED ACCENT LIGHT FIXTURE ❑3 GYP. BD. CEILING ® EXTERIOR PLASTER CEILING EXPOSED UNDERSIDE OF FLOOR ABOVE © DOMED ACRYLIC SKYLIGHT ABOVE ❑7 EXPOSED STEEL MOMENT FRAME ® EQUIPMENT VENT SHAFT ABOVE 8-79 NOTE. ALL IMAGES SHOWN IS AN ARTISTS RENDERING ONLY AND MAY NOT ACCURATELY REPRESENT THE ACTUAL FINAL PROJECT DESIGN. SEE THE DETAILED DRAWINGS AND SPECIFICATIONS FOR ADDITIONAL INFORMATION DESCRIBING THE ACTUAL PROJECT DESIGN. 19 ❑1 METAL SUNSHADE TRELLIS ❑2 DOMED ACRYLIC SKYLIGHT R3 TOWER LADDER ACCESSWAY ® GYP. BD. CEILING ❑5 EQUIPMENT VENT SHAFT TO ROOF - :I Exhibit "F" Tenant Improvements [To be attached upon City approval of Tenant's plans.] Lighthouse Cafe Page F-1 Exhibit "G" Insurance Without limiting Tenant's indemnification of City, Tenant will obtain, provide and maintain at its own expense during the Term of this Agreement, a policy or policies of insurance of the type, amounts and form acceptable to City. The policy or policies shall provide, at a minimum, those items described below. 1. Provision of Insurance. Without limiting Tenant's indemnification of City, and prior to commencement of work on Premises by Tenant or Tenant's agents, representatives, consultants, contractors and/or subcontractors, Tenant shall obtain, provide and maintain at its own expense during the term of this Agreement policies of insurance of the type and amounts described below and in a form satisfactory to City. Tenant agrees to provide insurance in accordance with requirements set forth here. If Tenant uses existing coverage to comply and that coverage does not meet these requirements, Tenant agrees to amend, supplement or endorse the existing coverage. 2. 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. 3. Coverage Requirements. A. Workers' Compensation Insurance. Tenant and Tenant's agents, representatives, consultants, contractors and/or subcontractors, shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Tenant and Tenant's agents, representatives, consultants, contractors and/or subcontractors, shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, agents, employees and volunteers. B. General Liability Insurance. Tenant and Tenant's agents, representatives, consultants, contractors and/or subcontractors, shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than two million dollars and 00/100 ($2,000,000) per occurrence, five million dollars and 00/100 ($5,000,000) Lighthouse Cafe Page G-1 general aggregate. The policy shall cover liability arising from premises, operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract. C. Products Liability Coverage. Tenant shall maintain products liability insurance covering bodily injury and property damage for all activities of the Tenant arising out of or in connection with products or services sold by the Tenant under this Agreement, in an amount not less than two million dollars and 00/100 ($2,000,000) combined single limit for each occurrence. D. Liquor Liability Coverage. Tenant 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. Tenant 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 Tenant's employees and patrons. E. Fire and Extended Coverage. Tenant shall maintain fire and extended coverage insurance, together with insurance against vandalism, theft and malicious mischief, on the improvements and fixtures, alterations, trade fixtures, signs, equipment, personal property and inventory on or upon the Premises from loss or damage in an amount not less than one million dollars and 00/100 ($1,000,000) per occurrence. F. Loss of Rent. Tenant 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. G. Professional Liability (Errors & Omissions) Insurance. Tenant shall require that Tenant'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 Tenant shall require that Tenant'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. Lighthouse Cafe Page G-2 H. Automobile Liability Insurance. Tenant and Tenant's consultants, contractors and/or subcontractors shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of Tenant or all activities of Tenant's consultants, contractors and/or subcontractors arising out of or in connection with work to be performed on the Premises, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than two million dollars and 00/100 ($2,000,000) combined single limit each accident. Builder's Risk Insurance. During construction, Tenant shall require that Tenant'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 Tenant and City. City shall be included as an insured on such policy, and Tenant shall provide City with a copy of the policy. J. Pollution Liability Insurance. Tenant shall require that Tenant'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 (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. Endorsements: Policies shall contain or be endorsed to contain the following provisions: Lighthouse Cafe Page G-3 ::- A. Additional Insured Status. City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as an additional insured under all general liability and pollution liability policies with respect to liability arising out of Tenant's activities related to this Agreement and with respect to use or occupancy of the Premises. City and City's general contractor, KPRS Construction Services, Inc. shall be named as an additional insured on any of Tenant's contractor's and subcontractor's policies. B. Primary and Non Contributory. Policies 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 Tenant's operations. 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. C. Liabilitv Insurance. Liability 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. D. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Tenant or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Tenant hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its consultants, contractors or subcontractors. E. 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. F. Notice of Cancellation. The insurance required by this Agreement shall not be suspended, voided, canceled, or reduced in coverage or in limits except after thirty (30) calendar days (ten (10) calendar days written notice of non-payment of premium) written notice has been received by City. It is Tenant's obligation to ensure that provisions for such notice have been established. G. Loss Payee. City shall be included a loss payee under the commercial property insurance. 5. Additional Requirements. A. In the event City determines that (i) the Tenant's activities on the Property creates an increased or decreased risk of loss to the City, (ii) greater Lighthouse Cafe Page G-4 insurance coverage is required due to the passage of time, or (iii) changes in the industry require different coverage be obtained, Tenant agrees that the minimum limits of any insurance policy required to be obtained by Tenant or Tenant'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 Tenant's then -existing insurance carrier, Tenant 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 Tenant's then- existing insurance carrier, Tenant shall deposit certificates evidencing acceptable insurance policies with City, incorporating such changes, within ninety (90) calendar days of receipt of such notice. B. Any deductibles applicable to the commercial property or insurance purchased in compliance with the requirements of this section shall be approved by City. C. Tenant and Tenant'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. Tenant shall verify that all consultants, contractors and/or subcontractors maintain insurance meeting all the requirements stated herein, and Tenant shall ensure that City is an additional insured on insurance required from contractors, consultants and/or subcontractors. D. 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. E. If Tenant maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits maintained by the tenant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. F. Tenant shall give City prompt and timely notice of any claim made or suit instituted arising out of or resulting from Tenant or Tenant's agents, representatives, consultants, contractors or subcontractors performance under this Agreement. G. Tenant 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. Lighthouse Cafe Page G-5 ::. H. All required insurance shall be in force on the Effective Date, and shall be maintained continuously in force throughout the term of this Agreement. In addition, the cost of all required insurance shall be borne by Tenant or by Tenant's consultants, contractors or subcontractors. If Tenant or Tenant's consultants, contractors or subcontractors fail or refuse to maintain insurance as required in this Agreement, or fail to provide proof of insurance, City has the right to declare this Agreement in default without further notice to Tenant, and City shall be entitled to exercise all available remedies. J. Tenant agrees not to use the Premises in any manner, even if use is for purposes stated herein, that will result in the cancellation of any insurance City may have on the Premises or on adjacent premises, or that will cause cancellation of any other insurance coverage for the Premises or adjoining premises. Tenant further agrees not to keep on the Premises or permit to be kept, used, or sold thereon, anything prohibited by any fire or other insurance policy covering the Premises. Tenant shall, at its sole expense, comply with all reasonable requirements for maintaining fire and other insurance coverage on the Premises. Lighthouse Cafe Page G-6 Exhibit "H" Memorandum of Lease Lighthouse Cafe Page H-1 ::: Exhibit "1" CITY OF NEWPORT BEACH BOND NO. FAITHFUL PERFORMANCE BOND The premium charges on this Bond is $ , being at the rate of $ thousand of the Contract price. WHEREAS, Tenant LIGHTHOUSE CAFE, LLC, as Tenant of the City of Newport Beach, State of California, has awarded to [Contractor] hereinafter designated as the "Principal," a contract for the work necessary for the completion of this contract consists of: It is CONTRACTOR's responsibility to verify all controlling field dimensions before ordering or fabricating any material in the City of Newport Beach, in strict conformity with the Contract on file with Tenant/LIGHTHOUSE CAFE, LLC and the office of the City Clerk of the City of Newport Beach, which is incorporated herein by this reference. WHEREAS, Principal has executed or is about to execute the Contract and the terms thereof require the furnishing of a Bond for the faithful performance of the Contract. NOW, THEREFORE, we, the Principal, and , duly authorized to transact business under the laws of the State of California as Surety (hereinafter "Surety"), are held and firmly bound unto the City of Newport Beach, in the sum of Dollars and _/100 ($ ) lawful money of the United States of America, said sum being equal to 100% of the estimated amount of the Contract, to be paid to the City of Newport Beach, its successors, and assigns; for which payment well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors, or assigns, jointly and severally, firmly by these present. THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal, or the Principal's heirs, executors, administrators, successors, or assigns, fail to abide by, and well and truly keep and perform any or all the Work, covenants, conditions, and agreements in the Contract and any alteration thereof made as therein provided on its part, to be kept and performed at the time and in the manner therein specified, and in all respects according to its true intent and meaning, or fails to indemnify, defend, and save harmless Tenant /LIGHTHOUSE CAFE, LLC, and the City of Newport Beach, its officers, employees and agents, as therein stipulated, then, Surety will faithfully perform the same, in an amount not exceeding the sum specified in this Bond; otherwise this obligation shall become null and void. Lighthouse Cafe Page 1-1 ::• As a part of the obligation secured hereby, and in addition to the face amount specified in this Performance Bond, there shall be included costs and reasonable expenses and fees, including reasonable attorneys fees, incurred by City, only in the event City is required to bring an action in law or equity against Surety to enforce the obligations of this Bond. Surety, for value received, stipulates and agrees that no change, extension of time, alterations or additions to the terms of the Contract or to the Work to be performed thereunder shall in any way affect its obligations on this Bond, and it does hereby waive notice of any such change, extension of time, alterations or additions of the Contract or to the Work or to the specifications. This Faithful Performance Bond shall be extended and maintained by the Principal in full force and effect for one (1) year following the date of formal acceptance of the Project by Tenant and City. In the event that the Principal executed this bond as an individual, it is agreed that the death of any such Principal shall not exonerate the Surety from its obligations under this Bond. IN WITNESS WHEREOF, this instrument has been duly executed by the Principal and Surety above named, on the day of ,20 Name of Contractor (Principal) Authorized Signature/Title Name of Surety Address of Surety Telephone Lighthouse Cafe Authorized Agent Signature Print Name and Title NOTARY ACKNOWLEDGMENTS OF CONTRACTOR AND SURETY MUST BE ATTACHED Page 1-2 M Exhibit "J" CITY OF NEWPORT BEACH BOND NO. LABOR AND MATERIALS PAYMENT BOND WHEREAS, Tenant /LIGHTHOUSE CAFE, LLC, as Tenant of the City of Newport Beach, State of California, has awarded to [Contractor] hereinafter designated as the "Principal," a contract for the work necessary for the completion of this contract consists of: It is CONTRACTOR's responsibility to verify all controlling field dimensions before ordering or fabricating any material in the City of Newport Beach, in strict conformity with the Contract on file with Tenant /LIGHTHOUSE CAFE, LLC and the office of the City Clerk of the City of Newport Beach, which is incorporated herein by this reference. WHEREAS, Principal has executed or is about to execute the Contract and the terms thereof require the furnishing of a bond, providing that if Principal or any of Principal's subcontractors, shall fail to pay for any materials, provisions, or other supplies used in, upon, for, or about the performance of the Work agreed to be done, or for any work or labor done thereon of any kind, the Surety on this bond will pay the same to the extent hereinafter set forth. NOW, THEREFORE, We the undersigned Principal, and, duly authorized to transact business under the laws of the State of California, as Surety, (referred to herein as "Surety") are held and firmly bound unto the City of Newport Beach, in the sum of Dollars and _/100 ($ ) lawful money of the United States of America, said sum being equal to 100% of the estimated amount payable by the Tenant /LIGHTHOUSE CAFE, LLC, of the City of Newport Beach under the terms of the Contract; for which payment well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors, or assigns, jointly and severally, firmly by these present. THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal or the Principal's subcontractors, fail to pay for any materials, provisions, or other supplies, implements or machinery used in, upon, for, or about the performance of the Work contracted to be done, or for any other work or labor thereon of any kind, or for amounts due under the Unemployment Insurance Code with respect to such work or labor, or for any amounts required to be deducted, withheld and paid over to the Employment Development Department from the wages of employees of the Principal and subcontractors pursuant to Section 13020 of the Unemployment Insurance Code with respect to such work and labor, then the Surety will pay for the same, in an amount not exceeding the sum specified in this Bond, and also, in case suit is brought to enforce Lighthouse Cafe Page J-1 the obligations of this Bond, a reasonable attorneys' fee, to be fixed by the Court as required by the provisions of Section 9554 of the Civil Code of the State of California. The Bond shall inure to the benefit of any and all persons, companies, and corporations entitled to file claims under Section 9100 of the California Civil Code so as to give a right of action to them or their assigns in any suit brought upon this Bond, as required by and in accordance with the provisions of Sections 9500 et seq. of the Civil Code of the State of California. And Surety, for value received, hereby stipulates and agrees that no change, extension of time, alterations or additions to the terms of the Contract or to the Work to be performed thereunder shall in any wise affect its obligations on this Bond, and it does hereby waive notice of any such change, extension of time, alterations or additions to the terms of the Contract or to the Work or to the specifications. In the event that any principal above named executed this Bond as an individual, it is agreed that the death of any such principal shall not exonerate the Surety from its obligations under this Bond. IN WITNESS WHEREOF, this instrument has been duly executed by the above named Principal and Surety, on the day of , 20 Name of Contractor (Principal) Name of Surety Address of Surety Telephone Authorized Signature/Title Authorized Agent Signature Print Name and Title NOTARY ACKNOWLEDGMENTS OF CONTRACTOR AND SURETY MUST BE ATTACHED Lighthouse Cafe Page J-2 M11 Attachment C City Council Policy B-13, Public Use of City Facilities 8-93 PUBLIC USE OF CITY FACILITIES 1its) H090�0, City of Newport Beach (City) facilities, which include parks, playing fields, gymnasiums, community rooms and swimming pools, are available to the public for civic, social, educational, athletic, cultural activities and limited commercial use. It is the intent of this Policy to provide use regulations and application and scheduling procedures to accommodate groups that wish to use City facilities. PROCEDURE A. Applications to use the City facilities must be made on forms provided by the Recreation and Senior Services Department (Department). Applicants must provide all information as may be required by the Department to assure compliance with the requirements and regulations of this Policy. B. Applicants will be required to pay a security deposit in an amount that will promote use of the Recreation and Senior Services facilities in an orderly manner without damage to the facilities. Security deposits will be refunded upon inspection of facilities and confirmation that no property damage has occurred or additional cleanup is required. C. Applicants will be required to acknowledge that neither the City nor the Department assumes any liability for injury or loss of personal property. Prior to the use of the facility, the application must have approval of the Recreation and Senior Services Director or designated representative. D. Approval or denial of a reservation request will be provided within five working days of receipt of a completed application. E. Reservations for use of Department facilities may be made up to six months in advance, but no later than ten working days before the event with the exception of park reservations which may be made no later than five working days before the event. F. The City is not liable for any and all accidental injury to any and all persons or loss or damage to group or individual property. When it is deemed to be in the best interest of the general public, the City will require the permittee to furnish a Certificate of Insurance naming the City of Newport Beach as an additional insured. The amount of the insurance shall not be less than $1,000,000 per occurrence of commercial general liability insurance. G. A contract shall not be transferred, assigned or sublet. All contracts will be issued for specific facilities and for specific hours, and the premises must be vacated as scheduled. H. The reservation request and rental agreement must be completed and signed by an adult age 21 and over who will attend, supervise and be responsible for the entire event or activities. Proof of residency is required at the time of application in order to receive the resident rate. Proof of non-profit status is required at the time of application in order to receive the non-profit rate. I. A Facility Use Agreement which authorizes the rental of facilities may be revoked for violation of any rental policies. REGULATIONS AND RESTRICTIONS All uses of Department facilities will be subject to the following regulations and restrictions: A. Use of Alcohol. 1. Alcoholic beverages are prohibited and shall not be permitted in or on any municipal facilities operated by the Department, except beer and wine may be served for special occasions at the OASIS Senior Center, Newport Theatre Arts Center (NTAC), Newport Coast Community Center (NCCC), Civic Center Community Room (CCCR), and Marina Park when done in compliance with State of California Department of Alcoholic Beverage Control (ABC) regulations and approved in writing by the Recreation and Senior Services Director. Approval to serve beer and wine shall not be deemed to approve service of alcohol in violation of Section 25604 of the Business and Professions Code. The Recreation and Senior Services Director will require the permittee to pay City costs to provide additional security when alcohol is served. 2. The use of alcoholic beverages is by written permission only and must be requested at the time the facility use request is submitted. The Department reserves the right to place restrictions on the use of alcoholic beverages in 8-95 accordance with State Law and these guidelines. "Alcohol use" means the presence of any beverage that contains any amount of alcohol. 3. Alcohol is not allowed when an event is designated for minors such as school age award programs, birthday parties and/or receptions. 4. When alcohol is served, there shall be a minimum of two security guards present at the facility at all times. The guards must arrive 30 minutes before guest arrival time and remain until the contract end time. One guard must be positioned at the entrance of the event and one guard positioned in the event area. The parking lot must be monitored every 30 minutes. The security guards shall have the authority to enforce all rules and regulations governing facility rentals. In the event that the Police are called, the cost of their services shall be deducted from the applicant's security deposit. The applicant will be billed for any costs exceeding the security deposit. 5. No alcoholic beverage shall be served to any person less than 21 years of age. Injuries caused to any person as a result of alcoholic beverages being served to or consumed by someone under the age of 21 while on the City's premises, shall be the sole responsibility of the organization or individual renting the facility. 6. The distribution or consumption of alcoholic beverages shall be in compliance with all applicable laws, including regulations of the ABC. Any organization using City facilities shall be solely responsible for obtaining all permits or licenses relating to the distribution and consumption of alcoholic beverages on the premises. 7. Alcohol may only be served by an adult 21 years of age or older. If evidence is found that alcohol is being served that was not authorized by the Department or to a minor the Police will be notified and the event will be terminated and all fees and deposits will be forfeited. 8. The City shall require the applicant to carry general liability insurance when alcohol is available, but not sold. The City shall require a full liquor liability premium in addition to general liability insurance when alcohol is sold in exchange for money. The cost of the required liability insurance shall be borne by the applicant. B. Smoking is prohibited in all City facilities including restrooms and within 100 feet of all entrances, windows, and playgrounds. C. For all indoor facility rentals involving youth, 17 years and under, there shall be at least one adult for every 20 minors, or increments thereof, in attendance, who shall remain in the facility for the duration of the activity. D. No group's activities shall interfere with the administration of the Department. E. Non-profit 501 (c) (3) groups may use the facility for fundraising activities and charge entrance fees and collect donations provided that a detailed plan of the event, including the expenses, marketing plan and procedure for collecting fees, is submitted with the rental application. F. Facilities and equipment are to be left in the same condition as they were prior to the rental. The permittee is responsible to pay for any damage to property or loss of property. A fee equal to total replacement cost will be charged. It shall be the responsibility of the permittee to see that unauthorized portions of the facility are not used. Continued or repeated use of City facilities will be contingent upon care of the facility, property and equipment, and observance of all approved rules and regulations. G. No gambling of any kind shall be conducted on, or in, City facilities, and the permittee shall insure that no disorderly or illegal conduct shall be allowed in any facility. H. The use of public address equipment will be limited to that provided by the facility, unless written approval has been secured by the Department through a Special Event Permit. I. Private groups wishing to collect fees, donations or admission charges, or those using the facility to market a product, give a presentation, or advertise their business, will be considered commercial users. J. The posted occupancy of City facilities shall not be exceeded. K. Storage space will not be granted at any time. L. Facilities are not available for reservations on the following holidays: Christmas Eve, Christmas Day, Easter, President's Day, Independence Day, Labor Day, 8-97 Martin Luther King Day, Memorial Day, New Year's Eve, New Year's Day, Thanksgiving and Veterans Day. M. All persons using the facilities shall observe and obey regulations of this policy, the rules of the Department and all applicable City, State and Federal laws, rules and regulations. N. Vehicles are not permitted on park grass or fields. Parking is permitted in designated spaces. Overnight parking is not allowed. O. Minors must remain in the rented facility room and shall not be allowed to roam unsupervised throughout the facility. P. When no alcohol is served but the group size is 200 or more, one security guard may be required, at the discretion of the Department Director. Q. Policies and guidelines regarding caterers shall be adhered to. R. All professional services utilized for events require a City of Newport Beach business license. S. Animals are not permitted within City Facilities with the exception of service animals. However, this provision shall not apply to activities or programs of the Recreation and Senior Services Department. FEE CLASSIFICATIONS - PRIORITIES OF USE Permission for use of City facilities shall be granted on a first come first served basis, subject to the following priorities: A. All official Department initiated and/or conducted activities, including those of the Friends of OASIS at the OASIS Senior Center, and exemptions noted in City Council Policies B-5 and B-10. B. All official City of Newport Beach activities. C. All official City co-sponsored groups and/or activities such as community groups and activities which are non-profit, self-governing, privately organized and of an educational nature which may be brought under the sponsorship of the Department. D. Official public agency sponsored programs and activities not included in A, B, and C above. E. Youth Sports Commission Member Organizations. F. Resident non-profit youth serving organizations with 50% or more of membership consisting of Newport Beach residents. G. Recreational, social or civic activities of groups which are resident promoted and sponsored by local non-profit* organizations which are open to the public and have 50% or more of memberships consisting of Newport Beach residents. H. Recreational or social activities of private Newport Beach residents which are not open to the public. (private parties) I. Recreational, social or civic activities and/or groups which are non-resident promoted and sponsored by non-profit organizations which are open to the public, but not qualifying under D above. J. Schools, colleges, hospitals and other similar civic groups not qualifying under the definition of non-profit. K. Others. * Non-profit status is defined as an organization that is so defined by the Internal Revenue Service, § 501(c) (3) and has a State of California Tax Identification Number. FEES, DEPOSITS AND CANCELLATION PROCEDURES Fees may be charged for the use of City facilities and shall be established and periodically adjusted and approved by the City Council. Fees are imposed to cover overhead, processing, deposits, maintenance and replacement costs for application and scheduling and maintenance of the facilities. A. A security deposit will be required for all room rentals. All or a portion of the deposit may be retained by the Department after inspection of the facility by the Recreation and Senior Services Director or a designated representative and a determination that the facility has not been left clean and/or in good repair. ;.. B. A separate additional cleaning fee may be charged for rental of the OASIS Event Center, Newport Coast Community Center, Community Youth Center, Civic Center Community Room, and Marina Park Community Center. C. No fee or deposit shall be charged for use of City facilities by the City of Newport Beach, or events co-sponsored by the City of Newport Beach or its departments, with the exception of direct costs. D. Cancellations for any facility other than the OASIS Event Center, Newport Coast Community Center, Community Youth Center, Civic Center Community Room, and Marina Park may occur seventy-two hours prior to the scheduled use of facilities without forfeiting fees collected by the City, with exception of a City service refund processing fee. Cancellations with less than seventy-two hours notice will be charged a cancellation fee established by resolution of the City Council. In the event of cancellation by the City, notice will be given as far in advance of the scheduled use as possible. E. Cancellation of rentals by users for the OASIS Event Center, Newport Coast Community Center, Community Youth Center, Civic Center Community Room, and Marina Park that occur less than thirty days prior to the scheduled use of the facility will be charged 25% of the rental fee. Cancellations with less than seventy-two hours notice will be charged the entire rental fee. Adopted - May 26,1998 Amended - May 8, 2001 Amended - April 23, 2002 Amended and Reassigned - April 8, 2003 Amended - July 22, 2003 Amended - September 13, 2005 Amended - October 10, 2006 Amended - August 11, 2009 Amended - May 14, 2013 Amended - May 12, 2015 Formerly I-25 M