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HomeMy WebLinkAboutRIVER VIEW GOLF COMPANY - CONCESSION 1974w i M E M O R A April 11, 1974 TO: The Honorable City s ~ , . '. 4.~ ~,,,s' ~ ~_ ... ~ ~ ~ D __ ___ __ _ - _ __._ _. s' Council ., _ 2 R F : >h S, ~ f a FROM: Office of the City At ~,__ ~ ;~.~ a-.~ ~ s ~,__._~...~ ~._,_.~.,_..._..w SUBJECT: CONCESSION AGREEMENT TO OPERATE RESTAURANT ON RIVER VIEW GOLF COURSE The City Council recently approved a Novation of Lease between the City and River View Golf (Novel James) con- cerning the City-owned property on which a portion of the course is located. Paragraph 12 of the Lease requires prior written consent of the Council before the golf course management may permit any concession on the premises. River View Golf and K. J. Enterprises wish to enter into a concession agreement (attached to this memo) to operate a restaurant and refreshment stand ("half-way house") on the golf course. We have reviewed the agreement and find no objection to it, providing the City's consent is conditioned as explained below. Part of the City's rent .f_rom the golf course operation is a percentage (2%) of the gross receipts from the sale of beer and wine, which will be sold from the concession restaurant. RECOMr1ENDATION: Approve the agreement by adoption of the following motion: Motion: That the Ciay Council authorizes the Mayor to give written cunt to t~e'`Cnn+cession Agreement between River View Golf arm K. J. t~r`ises, subject to the following conditions ~~.) C~nnt ~s nit ~lr t~ terms or conditions of the "tin of ~ ~~~ ~ and River View Golf, nor r~'l~ve River View Golf from any of its obligations thereunder. (2) ,manta Ana reserves the right to audit the records of the concse}naire from time to time to determine the amount of rent due frc~ tie sale of alcoholic beverages. (3) Consent does not relieve the parties to the con- cession agreement of their responsibility to seek and obtain all permits and licenses required by law for construction or alteration on the leased premises. ~:' J -1- • • (4) Assignment of_ rights or obligations under the Agreement without prior written consent of the City of Santa Ana voids this consent and makes the Agreement a violation of the terms of the Lease between River View Golf and the City. (5) This consent is revocable at any time that the foregoing conditions or any terms of the Novation of Lease are violated. Respectfully submitted, James A. [dithers, City Attorne~r~ BY '"' I Lj/ (~ Fran} J Fekete, Deputy, City Attorney JA[d ; FJF ; nr ''~ `; ~~ 11 t ~' April 18, 1974 Mr. Novel B. James Fresident, Riverview Golf Course 1.800 West 22nd Street Santa Ana, CA 9270b and Mr. Kenneth B. James K-J Enterprises 1800 nest 22nd Street Santa Ana, CA 9270b Gentlemen: At its Regular Meeting on April 15, the City Council of Santa Ana approved and authorized the Mayor to give written consent on behalf of the City to the Concession Agreement between River View Golf Course and K-J Enterprises, for operation of a restaurant on River View Golf Course, subject to the following conditions: (1) Consent does not alter the terms or conditions of the Novation of Lease between Santa Ana and River View Golf, nor relieve River View Golf from any of its obligations thereunder. (2) Santa Ana reserves the right to audit the records o£ the concessionaire from time to time to det®rmine the amount of rent due from the sale of alcoholic beverages. (3) Consent does not relieve the parties to the concession agreement of their responsibility to seek and obtain all permits and licenses required by law for construction or alteration on the leased premises. (4) Assignment of rights or obligations under the Agreement without grior written consent o€ the City of Santa Ana voids this consent and makes the Agreement a violation of the terms of the Lease between River View Gol£ and the City. (5) This consent is revocable at any time that the r ~J '^ ?4r. Novel F. James Page 2 April I8, 3974 and Mr. Kenneth R. James Foregoing conditions or any terra of the Novation of Lease are violated. In compliance with the above Council action, co~iseat is hereby granted. Sincerely, JERRY ~. PATT~Ra{~~r ~+iAY{~R ws ccs Gity Attorney Finance Director ~ ~' ~' -~ ~ G0~7CESSION AGREEI'~IENT THIS AGRr,EMENT made and e.r_tered this ~~~ day of April, 1974, by and between RIVER VIEW GOTr, a California corporation {hereinafter "RIVER VIEW"), and I~. J. ENTERPRISES, a limited partners~~ip, by and through KEN`1ETH B. Jt~•~ES, its general partner (hereinafter "CONCESSIONAIRE"). WHEREAS, RIVER VIEGd is the lessee of an 18-hole public golf course located on property generally described as 1800 West ?2nd Street, Santa Ana, California, and WHEREAS, the parties contemplate the immediate construction of a restaurant adjoining the golf shop presently situated on said golf course, and further contemplate the construction by r~?ay 1, 1975, of a snack shop or "half-way house" on said golf course at a site acceptable to RIVER VIEy9, and WHEREAS, the mutual desire of the parties hereto is that RIVER VIEW grant to CONCESSIONAIRE the exclusive right to ope- rate all facilities available for the sale and distribution of food and beverages on the golf course, IN COt~STDEF,ATION of the prornises, warranties and represen- tations hereinafter set forth and in accordance ~~rith the terms and conditions hereinafter contained, the parties agree as follows: 1. CONCESSION RIVER VIEW hereby grants to CONCESSIONAIRE the exclusive right to sell, serve and distribute food and beverages on the golf course, and in particular, but without limiting the generality of the foregoing, the right to operate the restaurant and bar faci- lities in the restaurant and the "half-way house" hereinafter more fully described, 2. TER,Ni The term of this Agreement shall be for a period of ten (1.0) yo.ars com:~nencing thz 1st c~av of. Mav; 1974, and terminating t~:e 31s ~ day of April, 1984 . -1- • ~ 3. OTHER AGREE'~iENTS The conditions of that certain golf course lease by and between FIVER VIEW and the Orange County Flood Control District dated September 2, 1959, and that certain Novation of Luse by and between RIVER VIEbV and the City of Sar_ta Ana, California, dated ~%tarch li, 1974, and each of said agreements, are incorporated by reference herein and Wade a part hereof, as ~caell as amendments thereto or any supplemental, ancilliary, or successor agreements thereto at any time during the term hereof or any extension of said term. It is the intent of the parties, and the promise, warranty and representation of CONCESSIONAIRE, that it will abide by and conform to each and all of the provisions of the aforesaid agree- ments to the extent they are applicable to the operations of CONCESSIONAIRE presently or at any time in the future, and shall conduct its operations in accordance with same, including without limitation any notifications issued pursuant to the terms of any or all such agreements. 4. PAYP~LNT CONCESSIONAIRE agrees to pay to RIVER VIE4~~, and RI~,''ER VIE;d agrees to accept as consideration for the exclusive conces- sior~ herein granted, each and all of the following: (a) A11 rents due or to become due and ocYing to the City of Santa Ana by reason of the business operations or other activities of CONCESSIONAIRE; (b) All rents due or to become due and a~~ring to the Orange County Flood Control District by reason of the business operations or other activities of CONCESSIONAIRE; (c) Five Percent (5 a} of the gross receipts of every kind and nature, excluding sales tax receipts, received by CONCESSIOZ~:AIRE from its operations, including without liritation from the sale of beverages, tobacco and sundry _~_ • • products during the first sixty (60) months of the term i.ereo.f, ar_d Eight Percent (8 0) of such gro~~ receipts, excluding sales tax recei?~~s, from and during the sixty-- first (61) through the one hundred twentieth (124) months of the term hereof. Said sums shall be payable to RIVER VIE6~J no Later thar: ten (10) days before the earliest date fixed by the City of Santa Ana or the Orange County Flood Control District for the payment of those sums due and owing to them and each of them, and with respect to those sums due and ocaing by CONCESSIONAIRE to RIVER VIEW alone, payment shall be made on or before the lOtri day of each month for sales and operations during the prior month. With respect to all payments of rents due and owing the City of Santa Ana and`or the Orange County Flood Control District, said payments shall be made, whether subject to dispute or not, and in the event of any dispute regarding the amounts of said sums due and owing, payment may be made under protest by RIVER VIEW on behalf of CONCESSIONAIRE, or by the protest of CONCESSIONAIRE, but C~RTCESSIONAIP.E shall take no Steps, including the refusal to make any payments, which will in any way jeopardize the relation- ship bet~,reen RIVER VIEG~7 and either the City of Santa Ana or the Orange County Flood Control District under the terms of the afore- said leases or other agreements incorporated by reference herein. The sums for rentals due and owing RIVER VIE6d alone, and only those sums, shall be off-set as provided in Paragraph 5 here- inafter as and for the reimbursement to CONCESSIONAIRE of its costs actually incurred for real property improvements, including real property fixtures. Said su~:~s as and for rentals due and owing RIVER VIEW alone may be paid by way of a credit memorandum satisfactory to RIVER VIEW, evidencing the application of said rental sums to the aforesaid improvements. -3- CONCESSIOP~AIRE agrees to keep co_nplete, full, and proper accounts of all sales, whether for cash or credit, made at the golf course. CONCESSIONAIRE agrees that it will adopt and maintain a fiscal year ending November 30th, which is the same as the fiscal year adopted by RIVER VIEW, in order to facilitate the year-end audit conducted by the City of Santa Ana andfor the Orange County Flood Control District, and that CONCESSIONAIRE will provide to RIVER VIEW timely audited year- end accounting reports satisfactory to RIVER VIEt+T, the City of Santa Ana, and/or the Orange County Flood Control District. CONCESSIONAIRE agrees that RIVER VIEW may, at any time, cause an inspection of CONCESSIONAIR.E's cash register and books of account to be conducted by RIVER VIEW's accountant or his appointed agent, or make and conduct an audit of the business of CONCESSIONAIRE as conducted on the golf course by an indepen- dent certified public accountant selected by RIVER VIEW.. If any statement of gross receipts previously made to RIVER VIEW by CONCESSIONAIRE is found to be 5° less than the amount shown by audit, CONCESSIONAIRE shall promptly pay RIVER VIEty the cost of such audit, as well as the additional amount shown to be payable by reason thereof. 5 . IMPROVEr~ENTS C0DICESSIONAIRE agrees that at its sole expense {which shall be reimbursed from rental payments due and owing RIVER VIEW as hereinabove set forth and as provided hereinbelow), it will expend the sum of $18,000.00 plus or minus 15% for real property improvements, including real property fixtures, but excluding trade fixtures and equipment for a restaurant facility adjacent to the golf shop presently situated on the golf course, to be com- pleted and operative by June 1, 1974 and as generally described in -4- • Exhi?~i t "A" attached izereto anc~ incorporated by reference herein. ,,,-,,, CO~v~.~,~SIOi~?AIi,E agrees to suppler appropriate contract doc~~-~ents, booker of account, and other records to RIVER VIE4v' to verify the cost and expanses incurred in connection with said ,.,corks of real property improvement. It is understood and agreed by the parties hereto that all right, title, and interest ir. and to the ownership of said real property improvements and fixtures shall, upon their completion and subject only to the teams of this Agreement, be- come vested in RIVER VIEW, and RIVER VIEti~1 shall thereafter be deemed the sole owner of said improvements. CONCESSIODTAIRE fur- then agrees that, at its sole expense, it shall install in said restaurant facility, trade fixtures and equipment as described in Exhibit "B" attached hereto and incorporated by reference herein. Subject to the provisions hereof, all right, title and interest in and to said trade fixtures and equipment shall remain vested in COr1CESSIONAIP.E subject to the terms of this Agreement and the security interest granted RIVER VIE:~T hereunder and as more fully described hereinafter. CONCESSIO"3AIRE agrees that at its sole expense (which shall be reimbursed from rental payments due ar_d owing RIVER VTE~~T as hexeinabove set forth and as provided hereinbelow), it will undertake to construct real property improvements, including real property fixtures, consisting of a "half-way .house" to be situated on the golf course as agreed to by both parties, to be completed and operatior_al on or bafore May 1, 1975. The plan, design, construction costs, and location of said "half-way house" shall be satisfactory to RIVER VIEb~T, and each and all of same shall require the written approval of RIVER VIE4~7 prior to the com- mencemer_t of construction. CONCESSIO^7ATRE agrees to supply appro- priate contract docu_ner_ts, books of account, and other records to -5- .. ! ~ RI~,IER VIEW to verify the cost and expenses incurred in connec- tion with said improvement. It is understood and agreed by the parties hereto that all right, title, interest in and to and the ownership of said real property improvements acid fixtures shall, upon their completion and subject only to the terms of this Agreement, become vested in RIVER VIEW, and RIVEP. VIEW shall thereafter be deemed the sole o~•~ner of said improvements, CONCESSIONAIRE further agrees that, at its sole expense, it shall install in said "°half-way house", trade fixtures and equipment satisfactory to RIVER VIEV~l. Sllbj2ct to the provisions hereof, all right, title and interest in and to said trade fixtures and equipment shall remain vested in CONCESSIONAIRE subject to the terms of this Agreement and the security interest granted RIVER VIEW hereunder and as more fully described hereinafter. RIVER VIEW agrees that expenditures made by CONCESSION- AIRE under the provisions of Paragraph 5 hereinabove as and for real property improvements, including real property fixtures, plus simple interest at the rate of l0v per rrar~um. on the declining unreimbursed balance of the cost of said improvements, shall be reimbursed to CONCESSIONAIRE in the amount of the monthly rental payments due and owing by CONCESSIONAIRE to RIVER VIEti^T alone, as provided in Paragraph 4{c) hereinabove, until such time as such e:~penditures have been fully reimbursed to CONCESSIOI`TAIRE. RIVER VIEW agrees, at its expense, to refurbish the rest- rooms adjoining the restaurant facility as more fully described in Exhibit "A" attached hereto and made a part hereof. 6, REPAIRS ACID ~~L~INTE1IATTCE RIVER VIEb9 agrees to maintain and repair the exterior of the restaurant, restrooms, and "half-way house", which maintenance and repairs shall ir~clude exterior painting and roof repair. All -6- • other maintenance, repair, janitorial services, housekeeping, cleanir_g, painting, plumbing, air-conditioning, and other equipment r~?aintenance and repair, including ceilings, floors, interior walls and windows, shall be at the cost of CO'~YCESSIO~~AIRE. CONCESSIONAIRE agrees to perform daily janitorial services, which shall include all services necessary to maintain the restau- rant and "half-way house" in a sanitary and attractive condition satisfactory to RIVER VIETr~. CO!~CESSIOiQATRE will provide adequate trash receptacles in the vicinity of the clubhouse, and, at CONCES- SIONAIRE's expense, pay for adequate commercial trash pickup by a City of Santa Ana contractor, all satisfactory to RIVER VIEW. 7. ALTERATIONS AND LIENS FOR IMPROVEP~IENTS CONCESSIONAIRE agrees not to make any alterations or im- provements to the restaurant or "half-way house" without the consent in writing of RIVER VIEW first obtained, which consent RIVER VIEGd agrees not to unreasonably withhold; said alterations or improve- ments to be at the sole cost ar_d expense of CONCESSIONAIRE, and are not reimbursable unless expressly agreed to by RIVER VIEW. In con- nection with the performances of any such alterations or improvements, CONCESSIONAIRE agrees to indemnify and save RIVER VIEW harmless from all liens, claims or demands arising out of same, and shall post app- ropriate disclaimers of RIVER VIEW's responsibility, and include app- roprzate provisions in any contract for ~~~orks of alterations or im- provements disclaimir_g any responsibility of P.IVER VIE;J therefor. It is the intent of the parties, and the. promise, warranty and representation of CONCESSIONAIRE, that all works of improvement undertaken by CONCESSIONAIRE on the real property herein described, including without limitation the restaurant and "half-way house", and the real property fixtures contained therein or appurtenant thereto, and any subsequent modifications or alterations to any or all said improvements, shall, upon their completion, be deemed and become the property of RIVER VIEW, and said property and improvements shall be unencu_'nbered and free and clear of all claims, charges, liens or demar_ds of any kind o.r nature whatsoever. _. ~ _ 8. L'SE OF P?.C`~ISES The restaurant and "half-way house" shall be used only for normal restaurant and bar purposes subject to the rules and regulations of the State o~- California. an c. any and all applicable acu-nini~trative agencies, including without limitation, Dzpar~~nent of Labor and Alcoholic Beverage Commission, and rules and regula- tions of the. County of Orange and the City of Santo Ana now in effect or ~•ahich may hereafter be amer_ded or adopted and become effectiT,re during the term, or any exter_sion hereof. Furthermore, CONCESSIONAIRE sha11 agree to comply with each and all of the following: (a) CONCESSIONAIRE shall employ competent persons to be in attencance on the premises used by CONCESSIONAIRE, and the persons so employed shall be of satisfactory moral character and demeanor. Persons so employed who do not meet such standards shall be discharged from employment by CON- CESSIONAIR.E, and all costs, liabilities and damages arising fram any such discharge shall be borne solely by COrdCESSION- AIRE, and CONCESSIOi11AIRE shall agree to save and hold harmless RIVER VIEW from any claims or demands arising out of any such discharge. lb) CONCESSIONAIRE shall comply with all laws and ordi- nances now in effect or which might later be put into effect to cover conduct of the type of business herein contemplated. CONCESSIONAIRE agrees to maintain all premises in a manner consistent with or demanded by duly authorized health officials and officials of the Alcoholic Beverage Cor~^.iission, and also that the premises will at all times be kept open for proper inspection by authorized RIVER VIE~d agents and any ocher municipal, State, County, or other goveri~.~nental agencies having jurisdiction. of the operations or co.r_duct of CONCES- SIOZdAIRE's business. -2- a . OPEP~ L IOidS C0~ICESSIO?dAI?ZE agrees to keep on hand at all times sufficient ir_ventories of merchar_dise, food and beverages, including beer, and to serve the public adequately according to generally accepted standards, ar_d to charge prices not in excess of prevailing prices made far the same kind and quality of services at competitive golf courses; CONCESSIO?`:AIRE agrees that the restaurant shall remain open for business at any time the golf course is open for play. 10. INDEMNIFICATION RIVER VIEW shall not be liable for, and CONCESSIONAIRE agrees to save and hold RIVER VIEW harmless, from any loss, damage, liability or expense incurred, suffered or claimed by any person or persons caused by reason of any negligence in the use or ope- ration of the restaurant or "half-way house", or arising from any defect in the condition of the -restaurant or "half-way house", including without limitatior_ the exterior or interior thereon, or arising from the services, food o:r beverages supplied by the restaurant or "half-way house". ll. liTILITIES RIVER VIEW shall provide without cost potable water to the restaurant facility alone. Electricity, gas, telephone, or other utilities furnished to the r_esta.urant or "half-way house" shall be furnished by CONCESSIO~'TAIRE, including the initial cost of installation thereof and all subsequent costs for the use and maintenance of dry such utilities. 12. TAXES P.IVER VIEW agrees to pay all taxes, if any, levied against the real property improvements, including real property fixtures, which are the subject of this Agreement. -9- CO?`1CESSIONAIRE agrees to pay any and all taxes levied against any personal property, including trade fixtures, equip- ment and inventories, wherever located, used, or acquired, in any connection with the operation of the restaurant and/or "half- way house". 13 , P.ENIOVAL OF FIXTURES CONCESSIONAIRE may not remove any trade fixtures or equipment installed by it in the restaurant or "half-way house" during the term of this Agreement without the consent of RIVER VIEW first obtained. RIVER VIEW may, at the expiration of the term of this Agreement or upon any sooner termination by written notice to CONCESSIONAIRE, require CONCESSIONAIRE to remove any such trade fixtures, and CONCESSIONAIRE agrees to remove same at its sole cost and expense. In the event of such removal, CON- CESSIONAIRE agrees to repair any damage caused to the restaurant or "half-way house" by reason thereof. In the event CONCESSION- AIRE does not remove any such trade fixtures, at the option of RIVER VIEW, they shall either become the property of P.IVER VIEW or RIVER VIEW may, if removal has been requested, remove and store the fixtures on behalf of CONCESSIONAIRE and at CO~TCESSIONAIRE's expense, 1~. SECURITY INTEREST CONCESSIONAIRE hereby grants to RIVER VIETr~~ a security interest in each and all the equipment and trade fixtures herein described or which are desirable or necessary in connection with the operations of CONCESSIONAIRE, whether initially acquired or thereafter acquired, and in any and all proceeds from the sale or transfer thereof, ar_d CONCESSIGIIAIR.E agrees to execute any and all financing statements deemed desirable or necessary by RIVER VIEs~ in order to protect the security interest herein granted. -10- • • In addition to all other remedies available to RIVE' VIE`vd upon the occurrence of any default hereunder, RIVER VIEI^7 shall have file right to exercise an_y ar_d all remedies available to it by lace, in equity, or pursuant to the provisions of the Uniform Commercial Code then in effect at any time during the term here- of, including without limitation those set forth in Ser_tions 9501 through 9507 thereof; provided, hoti,~ever, that nothing con- tained herein shall be deemed to impair any ownership or other right, title or interest of RIVER VIETYd in and to any of the real property improvements or fixtures described hereinabove, and the provisions or this Paragraph are to be deemed supplemental and additional to all other rights, privileges and remedies avail- able to RIVER VIEW under the terms of this Agreement. It is understood that CONCESSIONAIRE or CONCESSIONAIRE's general partr_er, or both of them, intend to finance all or part of the equipment and trade fixtures herein described, and to give a first security interest in connection with any such financing therein, and the security interest hereby granted to RIVER VIEW will constitute a security interest second only to t:ie purchase money security in- terest for said equipment and trade fixtures. 15, DEFAULT Each and all of the following shall constitute an evert of default by CONCESSIONAIRE: (a) Assignment or hypothecation. of this Agreement or any interest herein or any interest in anjT of the equipment or trade fixtures hereunder without the written consent of RIVEP, VIEti^J first obtained, including without limitation any assignment by operation of law. In the event of any such assignment by operation of law or otherwise, this Agreement shall, at the option of RIVER VIETr', be deemed terminated on the day immediately preceding the erfective date of any such assignment; -11- (b) The failure by COi3CESSIC%v'AIRE to comply with any of the terms or cor~dition:~ o.f this Agreem~`nt; (c) The obtaining b~u~ any person other than CONCESSION- HIRE of possession. of the restaurant or "half-way house", or an~~ part thereof, or .any of the proceeds derived from the operations thereof under any T~arit of Attachment or Execution or by reason. of any receivership or proceedings in bankruptcy or other operation of law in any mar_ner whatsoever for a period in eycess of five (5) days; (d) Failure by CONCESSIONAIRE to comply with any term or condition of this Agreement, or to satisfy any of its ob- ligations hereunder, including without limitation its obliga- tions to commence and complete construction, pay rentals, taxes, and insurance premiums when due; (e) The making of or consenting in or acquiesence to by CONCESSIONAIRE of any intentional misrepresentation re- specting the organization, existarce or operations of CON- CESSIONAIRE hereunder to RIVER VIEW7, any insurer, the City of Santa Ana, the Orange County Flood Control District, the Alcoholic Beverage Commission, or any other governmental or regulatory agencies having ar_y jurisdiction over the opera- tions of COD7CESSIONAI's2E, including without limitation, the Internal Revenue Service. 16. REPRESENTATIONS OF CONCESSIONAIRE CONCESSTO~TAIRE represents that it is a duly formed limited partnership, that its Articles of Limited Partnership have been appropriately executed and -piled pursuant to the laws of the State of California, and that it has taken all steps required to comply with the laws relating to publication of notice of doing business L~.nder a fictitious name. --12- • 1.7 . R,Ei~L~ DIES In the event of ar_y default by C01`uCESSIO°dAIRE, hereunder, RIVER VIEtid may, at its option, in addition to all other rights available to it at law or i.n equity or under the provisions of the Uniform Commercial Code, and without demanc'~ or notice of any kind wizatsoever, re-enter and take possession of the restaurant and "half-way house" facilities, and all equipment, trade fix- tunes and inventories attached thereto or contained therein, and remove all persons therefrom, all without due process of law, and may, at its option, thereafter operate the business of CONCESSION- AIRJ for its own account or on the account of CONCESSIONAIRE, or may terminate this Agreement, and in either event, may recover from CONCESSIONAIRE all damage caused by any breach .hereof by CONCESSIONAIRE, including all reasonable attorney's fees, which RIVER VIEW may be required to incur in recovering possession and conducting said operations ar_d in collecting ar~y such damages. 18. LEGAL PROCEEDIT7GS In the event of. an~• action at lava or in equity between RIVER VIEW and COi~?CESSIONAIRE to enforce any of the provisions or rights hereunder, the unsuccessful party to such litigation promises and agrees to pay to the successful party all costs and expenses, including reasonable attorney's fees incurred therein, by such successful party, and if such successful party shall re- cover judgment in any such action or proceedings, such costs, ex- penses and attorney's fees shall be included in and as part of such judgment. Should RIVER VIEZ], without fault on its part, be made a party to any litigation instituted by or against CONCESSIONAIRE, CONCESSIOrdATRE promises to pay RIVER VIEW all costs and expenses, including reasonable attorney's fees incurred by-RIVER VIEW in connection with such litigation. 19 . ~r~~A I T,IE R No waiver of any breach of any term or condition of this Ag)~'c P;a~rit .ii`lall lie c,on~t-~ aeu. ~`'..:] J~ ,s. ~n%a1'v'2r O ~ uni pr ~^d:.ng Or -13- • succeeding breach oz the sair~e or any other tern: or condition. Any sucr. waiver by RIVER VIrt~7 shall be required to be given or made inn writing. The language of all parts of this Agreement shall be in all cases construed simply according to their fair meaning, and not strictly for or against RIVER VIEPd or CONCESSIONAIRE. 20. LIENS CONCES5IONAIP.E expressly agrees to keep and hold said premises and RIVER VIEW free, clear and harmless of any mechanic's liens or liens or a similar nature that might or could arise by reason of any acts of CONCESSIONAIRE. 21. BANKRUPTCY In the event CONCESSIONAIRE is adjudged a bankrupt or files a voluntary petition in bankruptcy L?nder any of the provi- sions of the Federal Bankruptcy Act, or if an involuntary petition in bankruptcy is filed against CONCESSIONAIRE, which is not dis- missed within thirty (30) days from the date of the filing of said petition, or in the event CONCESSIONAIRE shall make an assigrslent for the benefit of creditors, RIVER VIEbr'~ shall, at its option, have the right to terminate this Agreement, and all rights, es- tate, title and privileges of CONCESSIOrd?~IRE shall thereupon terminate, and RIVER VIE6~1 shall be immediately entitled to pos- session of the premises. 22. DAMAGE OR DESTRUCTIOi1 In the event the restaurant or "half-way house", ar both of them, are damaged or destroyed, any such damage shall be re- paired or any such facility shall be reconstructed and operative within one hundred twanty (120) days following said damage or destruction, or, in the event of damage or destruction of or to the restaurant facility, no-t later than repair or reconstruction of the buildings adjacent thereto; provided, hovaever, that the commencement of any such repair or reconstruction shall occur not later +~han thirty (30) days following the occurence of any such _14_ • damage or destruction. During the period of any such repair or reconstruction, this Agreement shall remain in full force and effect subject to all the provisions contained herein, and CON- CESSTO?~IAIRE shall provide temporary facilities offering compar- able food, beverages, tobacco, and sundry products as were availabl? to the patrons of RIVER VIEtiti' immediately prior to the time of such damage or destruction, and satisfactory to RIVER VIEr~1. CONCESSIONAIRE shall, at its sole expense, promptly re- store, repair, or reconstruct said facilities as nearly as possible to their condition prior to any such damage or destruc-- Lion. All insurance proceeds received by RIVER VIEW pursuant to the provisions of this Agreement, less the cost of recovering ary such insurance proceeds, shall be held in trust and applied by RIVER VIEW to the payment of any such restoration as it pro- gresses, or be reimbursed to CONCESSIONAIRE for its costs in- curred in connection with such restoration. In the event CONCESSIONAIRE fails or refuses to commence restoration or repair of said premises within the time period provided herein, such failure or refusal shall constitute an event of default, and RIVER VIEW may, at its option, terminate this Agreement, If this Agreement so terminates, all insurance pro- ceeds shall belong to RIVER. VIEj^1, and if the proceeds of insurance are insufficient to pay the full cost of repair or restoration, CONCESSIONAIRE shall be liable for the difference, if any, and shall pay same immediately upon demand by RIVER VIEW. If the in- surance proceeds exceed such costs, the excess from said insurance proceeds shall be retained by RIVER VIEL•1, During such time as the restaurant andfor "half-way house" are wholly or partially unusable by reason of any such damage or destruction, tr_e pad=menu as and for rental herein pro- vided shall continue. RIVER VIE.^7 shall not be liable to -1~- :7 CC`;CESSIONAIP~~' for anv damages, including without limitation, loss Of prOfltS, overhead ea:penses, or increased Insurance premiums, Wh1Ch riay result from any damage to or destruction of the restau- rant facilities or "hall:-way house", 23. HO1.,DTx1G OVER In the event CONCESSIONAIRE holds over or remains in the possession or occupancy of the restaurant ar_d "half-way house" with or without the consent of RIVER VIEW after expiration of the term of this Agreement, or any extension or renewal thereof, such holding over or continued possession or occupancy shall not be deemed a renewal or extension of this Agreement, but shall, dur- ing any period of time in which CONCESSIONAIRE holds over or re- mains in possession or occupancy, be deemed a month-to -month agreement in accordance with the same terms and conditions as contained herein, except that the agreement may at any time be terminated by either RIVER VIEW or CONCESSIONAIRE in the event of any such holding over upon thirty (30) days written notice to the other of such intention to terminate. 24. CONDITIONS A11 the promises, ~•rarrar_ties and representations on the part of RIVER VIEtit) or CONCESSIONAIRE are hereby made conditions. 25. OPTION TO RENEW RILTER VIEGJ hereby grants to CO1`dCESSIONAIRE a first right of refusal to renew this Agreement following expiration of the term in accordance with the terms of any bona fide offer from a third party to succeed CONCESSIONAIRE as the operator of the res- taurant and "half-way house". CONCESSIONAIRE shall be required to exercise its right within ten (10) days following written demand by RIVER VIEW setting forth all of the terms and conditions contained in any such bona fide offer, An offer shall be deemed -16- .. ~ • bona fide for the purposes of this provision if it is made in t~riting to RIVER VIE'~~1, dated, signed, for an operatir_g period of not leis than five (5) ~~ears, and has a fixed and certain commencement date. 2 6 . INS U?~ ONCE CONCESSIONAIRE agrees to procure and maintain during the entire term of this Agreement public liability insurance, naming RIVER VIEW, the City of Santa Ana, and the Orange County Flood Control District as co-insureds, insuring them against any loss or damage arising out of CONCESSIONAIRE~s operations of the restaurant and/or "half-caay house" in the minimum amounts of $500,000.00 for any person, $1,000,000.00 for each occurrence, and $150,000.00 for property damage; provided, however, that should the City of Santa Ana and/or the Orange County Flood Con- trol District impose upon RIVER VIE6V public liability insurance limits higher than those herein described, then CONCESSIONAIRE agrees to procure and maintain insurance satisfying such higher limits, Should CONCE5SIOiJAIP.E fail to pay or maintain such in- surance, RIVER VIEW, at its option, may procure same, and any sums so paid by RIVER VIEW shall be repaid to it by CONCESSION- AIRE upon written demand therefor. CONCESSIO~;P.IRE shall procure and furnish to RIVER VIEW a certificate of insurance evidencing the issuance of said policies issued by the insuring company or companies. RIVER VTEG7 agrees to procure and maintain fire, casualty loss, and extended coverage insurance upor. the restaurant and "half-way house" real property improvements, including real pro- perty fixtures, for the full initial construction cost thereof, naming P.IVER VIEW and C0~7CESSIOv<~IRE as co-insureds as their in- terests may appear; provided, nothing contained herein shall pro- hibit the holder of the first security interest in any such -17- equ~plent o_r trad.e fi.Mures from tieing named a co-insured to the extent of the pug°chase rr.one_y obligation of COtiCESSIO?vAIRE. CONCLSS.IONAIt.E agrees to procure and maintain fire and ext•~nded coverage insurance, including casualty loss, upon the equipment and trade fixtures contanned in or used in connection ,with the operation of the restaurant and "half-way house" for the full acquisition cost thereof., and rasing RIVER VIES^7 and CONCES- SI0~IAIRE as co-insureds as their respective interests may appear. 27. ON-SITE BEER LICENSE CONCESSIONAIRE shall acquire and maintain an on-site beer license in accordance with all the regulations of the State of California and the Alcoholic Beverage Commission, and without limitation, subject to the requirements of Division 9 of the California Business and Professions Coda. 2$. SUCCESSORS-IN-INTEREST All provisions, rights, remedies, benefits and obliga- tions hereunder shall b2 deemed continued and binding upon RIVER VIELv or CONCESSIONAIRE'S personal representatives, successors or assigns during the term hereof. 29. WAIVER OF SUBROGATION RIVER VIEW expressly waives any and all claims against CONCESSIONAIRE and CONCESSIONAIRE expressly waives any and all claims against RIVER VIEW for loss or damage arising or resulting from the occupancy of the subject property or from any operations conducted therein or thereabouts caused by fire or other perils customarily insured under fire and extended coverage insurance policies, regardless of the r_ause thereof. 30. TERi1INATIOr1 Either party may terminate this Agreemer_t in the event of a default thereof by the other party if the default is not corrected within five (5) days after written notice of such default. -1$- ~J In the event that RIVER VIEW does not at all times during the term of this Agreement or any extended term thereof maintain and continuously operate a regulation 1S-hole golf course open to the public, CONCESSIONAIRE may terminate this P.greement; pro- vided, however, that Acts of God, including without limitation inclement weather, flooding, earthquake damage, winds, and other similar calamities, or acts of war cured within six (6) months after the occurrence thereof shall not constitute a failure by RIVER VIEW to so maintain or continuously operate. In the event of a cancellation or termination of this Agreement prior to the expiration of its term or any extended term thereof by reason of acts of CONCESSIGPIAIRE, or upon the ex- piration of its term or any extended term thereof, RIVER VIEW shall pay to CONCESSIONAIRE the unreimbursed balance with accrued interest, if any, as and for the real. property improvements and real property fixtures constituting the restaurant facility and "half-way house"; provided, however, that payment-shall be made out of the proceeds of the continuing operations of the restaurant and/or."half-way house" facilities only at the rates set forth in Paragraphs 4(c) and 5 hereinabove. In the event of a cancellation or termination of this Agreement prior to the expiration of its term or any extended term thereof by reason of the acts of RIVER VIEW, including its failure to maintain and continuously operate a regulation 18-hole golf course, or a termination by reason of a relocation of the starting point as more fully described hereinafter, RIVER VIEW shall then pay to CONCESSIONAIRE the unreimbursed balance with accrued interest, if any, as and for the real property- improve- meets and real property fixtures constituting the restaurant facility and/or "half-way house" within ninety (90) days after any such cancellation or termination, and ire addition, shall pay to CONCESSIONAIRE the fair market va3_ue of the trade fixtures, equipment, and inventories contained in said restaurant facility -19- ~ ~ and "half-Td,~ay hous`" upon the date of termination, and delivered by CO.vCESS:LONAIRE to and accepter? by I'.IVEF. VIEti~. Sai d fair mar- kat value to be mutually agreed upon by tiie parties in writing within thirty (30} days after notification of termination, or in the event the parties cannot agree, they shall, within said 30 day period, appoin-~ a third party satisfactory to each of them to determine a value, within 30 days after appointment, and said determination shall be conclusive; provided, ho=,aever, that if the parties cannot agree upon any such third party, they will then submit the matter of valuation to arbitration at Santa Ana, California, in accordance with the rules or the American Arbitra- tion Association then in effect, and the payment of the sums determined to be due and owing by RIVER VIEb~' to CONCESSIONAIRE shall be payable within. sixty (b 0) days after any such determi- nation. In the event of determination by a third party or by arbitration, the parties hereto shall equally bear the costs, fees, and expenses thereof, including attorney's fees. During the period required for any such determination, the su.~ns due and owing by RIVED. VIEtiV to CONCESSIONAIRE shall be non-interest bearing. 31. RELOCATI0~7 OF STAR"PING POI~'T The parties hereto contemplate that. the starting point for the golf course may be relocated, and in that connection, there may be constructed a ne~.~~ club house, including without limitation, professional shop, starters point, restaurant and/or snack shop facilities contained therein or a~fixed thereto. In the event of such relocation and the construction of such a club house with the contemplated facilities, RIVED, VIE,a agrees what it ,will use its best efforts in connection with anv negotiations conducted by it faith third parties to make available to COItiCESSIOi~YAIP,E a right of first refusal for the concession to -?v- food and beverage facilities as relocated, provided the failure by RIVER VIEt~T to obtain or provide such a right of first refusal shall not constitute a default or give rise to a termination hereunder. In the event of such relocation, CONCESSIONAIRE may continue its operations hereunder and is hereby given the following additional options, ail of which are mutually exclu- sive and cumulative, ar~d all or any of which must be exercised in writing within six (5) months prior to the date set for re- location. RIVER VIEti~T shall provide CONCESSIONAIRE with caritten notification of the date fixed for any such relocation nine (9) months prior to the time fixed therefor. (a) If CONCESSIONAIRE receives and exercises a right of first refusal as to the continued operation of all the food and beverage facilities as relocated, and does not exercise the option under sub-paragraph (c) hereof, CONCES- SIONAIRE may choose to terminate this Agreement, and in that event, the termination shall become effective upon the date fixed for relocation, and it shall be deemed a termination by reason of the acts of CONCESSIONAIRE; (b) Should CONCESSIONAIRE receive but not exercise a right of first refusal with respect to all or any of the food and beverage facilities as relocated, and does not exer- cise the option under sub-paragraph (c) hereof, CONCESSION- AIRS may continue to operate the existing restaurant facility and "half-way house" under the terms hereof; (c) CGNCESSIOiJAIR.E is hereby given an option by RIVER VIEbti' to sub-lease from RIVER VIEF7 (subject to approval by the City of Sar,ta Ana a.nd/or the Orange County Flood Control District as may be appropriate or required) for a period of not less than ten (I O) years from the date of the exercise of -21- • ~ this option anc! pursuance to the terms hereinafter described, RIVE_°. VIE,~~' s lease-hold ar_d i :lprovements located on that portion, of RIVER VIE;~7` s lease-ho7_d i1 l.czs~`rated on the sketch attacized as Enh:ibit °'C" herato and generally described with- out limitation as that portior_ of the lease-hold consisting of the parking lot, patting greens, professional shop, res- taurant facility, and dritJing range, all in conjunction with the continuing operation of the restaurant facility and "half- way house". The terms of said sub-lease shall be satisfactory to RIVER VIE6V and will provide for a rental payment of 8% of the gross receipts from operations net-net-net. Lessee to bear the cost of all improvements, taxes, insurance, utilities and the rental payments due and owing to the City of Santa Ana and/or the Orange County Flood Control District. Said sub-lease to incorporate by reference within the provisions thereof that certain golf course lease by and bet,~~een RISTER VIEW and the Orange County Flood Control District dated. September 2, 1969, and that certain Novation of Lease by and between RIVER VIEY~7 and the City of Santa Ana, California, dated ~~arch 11, 197. The. cost of new improvements, whether real or personal property and of whatsoever kind or nature, shall be borne solely by LQsseP, and shall not be reimbur- sable out of the rental pror_eeds due and payable to RIVER VIEW. Upon ex~iraticn of the least term or any extension thereat, or its sooner termination, at the sole option of RIVER VIEW, the title to said improvements sha11 become vested in RIVER VIET•1, subject only to liens or encumbrances of record. A written notice required for an effective exercise of this option shall require the submittal of a proposed sub- lease and a plar_ of improvements, development and operation, both satisfactory to and approved in vrriting by RI~~£P. VIE6~. -22- • Said. plan of development shall describe all uses for which the property is to be employed, a schedule of all wor;cs of improvement, the dates of their commencement and completion, a schedula of construe+_ior_ costs, cash flofr projections, engineering dra~,aings and architectural renderings, methods and amounts of financing, and addi- tional interested parties in said project or any portion thereof, if any. Said other recreational facilities or other uses may include without limitation the continued use of the existing driving range and the construction of tennis courts. As a condition to its approval of any such written plan of improvement, development and operations, RIVER VIE~+1 may require evidence satisfactory to it alone of sufficient financial resources to commence and complete said development, including commitment letters and sums placed in escrocv accounts . The schedule of the improvements as described in ary such plan of development and operation shall be approved by all re- quired agencies and work thereon-shall be commenced within one year following the date of notice of relocation; such deve- lopment shall be continued and conducted pursuant to said schedule and shall be completed ~~~ithin thirty-six (3~) months following the date of notice of relocation. (d) COAICESSIONAIRE may choose to to ~~inate this Agree- ment, and in that event, the termination shall become effec- tive upon the date fixed for relocation, and it shall be deemed a termination by reason of the acts of RIVER VIE6^7. 32. LIQUIDATED DAP~.AGES In the event of cancellation or termination o.f this Agreement by reason of CONCESSION'1IRE's default hereunder, each of the parties hereto acknowledges and agrees that it ti~~ould be difficult, if not in.possible, to fix the damages owed to RI~,IER _~-~_ • ~ VIE,^sT by reason thereof, and ror that reason, '_Ze~eby fix any such da~-r!ages in the e~~ent of said default at $5, 000 , 00, which amour:t may, at the option of RT~TER VIE4•?, be applied as an off-set to any remaining balance due and ot";ing by RIVER VIE6V to CONCESSIOz1AIRE as and "for the unpaid. balance _Eor ary improvements, equipment or trade futures. The remaining u.rpaid balance, if any, after the application of said off-set shall be paid as provided hereinabove. 33. SUBORDINATION This Agreement shall be subject to subordination at all times to the lien of existir:g or future leasehold mortgages, Deeds of Trust, or other charges upon the real property, the real property improvements, and the real property fixtures which are the subject of this Agreement. Although no instrument or act on the part of CONt'ESSTONAIRE shall be necessary to effect any such subordination, CONCESSIOi~3AIRE shall nevertheless execute and deliver such further instruments, subordinating this ?agreement to any such liens at the request of and as may be desired by RI~~R VIE6~7. C0~ICESSIONAIF,E hereby irrevocably appoints RIVE F. VIE;rd its attorney-in~fact to execute and deliver any such intruments of subordination for or on behalf of CONCESSIORIAIF,E. 34. CONDEi%NATION If the real property, real property improvements, or real property fixtures, or an_y part thereof which are the subject of this Agreement are taken by eminent do.7,ain, this ~~greement shall expire on the date when the possession of said property s~zall be so taken or surrendered, and the rents due and owing hereunder shall be apportioned to and including that date. That portion of any award arising from any such eminent domain proceeding required to reimburse CONCESSI0~IAIRE for any unreimbursed balance, including accrued interest, if any, arising from construction of the restau- rant facilities andfor "half-~~;ay house", shall belong to CO~~CES- SIONAIRE, and the balance of any such a;~:ard shall belong to ~4IVER _~q_ • • VIr'ti~;; provided, however, that nathing contained herein shall precluc?e CONCESSIO~;AIRE fron proceeding directly against any condemning authority fo.r its loss of business, depreciation or darnage,to, cost of removal of, or the value of inventories, trade fixtures, and other personal property of COI~:CESSIONAIRE; provided further that no such claim by CONCESSIONAIRE shall diminish or other-,wise adversely affect RIVET VIEW`s award or an_y security interest held by RIVER VIEW. In the event of con- demnation of all or any part of the real property, real property improvements, or real property fixtures which are the subject of this Agreement, should any continue operations following such condemnation be possible, then this Agreement shall remain in effect as to that portion of CO~?CESSIONAIRE's business so continuing. 35. RECORDING This Agreement shall be recorded in the official re- cords of the Orange County Recorder's Office if so required by RIVER VIEW, the City of Santa Ana, or the Orange Court~~~ noon Control District, and may be recorded by CONCESSIONAIRE upon the written approval first obtair_ by RIVER VIES^~, the City of Santa Ana, and the Orange County Flood Co.t_rol District. 36. CONDITION PREC%DENT The approval of this Agreement by the City of Santa Ana andJor the Orange County Flood Control District, as may be required, shall be a condition precedent to the effectiveness and enforceability of this Agreement. _~5_ . ~ ~•' • IPd T^1ITi~ESS t~1:zEREOF, the parties hereto have affixed their signatures on the day and year first above written. RIVER VIEW GOLF -~ ~ By : ~'~~~ NO L B. JAMES _._~ ,_ B ~= - -, Y~ ~ W K. 4 By: -26-