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13-0530_HAMILTON OAKS AT SAN JUAN, LLC._License AgreementLICENSE AGREEMENT THIS LICENSE AGREEMENT ("License") is entered into effective as of May 30, 2012 ("Effective Date"), between CITY OF SAN JUAN CAPISTRANO, a municipal corporation ("LICENSOR"), and HAMILTON OAKSAT SAN .YUAN, LLC, a California limited liability company ("LICENSEE"). RECITALS WHEREAS, LICENSOR is the owner of approximately 2.6 acres of property located at 29943 Camino Capistrano, in the City of San Juan Capistrano, County of Orange, generally described as Assessor's Parcel Number (APN) 121-050-03, and commonly known as the Roger Y. Williams House, otherwise referred to as the "Swanner House" which was acquired to be maintained as open space with a historic residence, depicted in the attached Exhibit A and hereinafter referred to as the "Premises"; and WHEREAS, LICENSEE desires to use the Premises for the operation of a demonstrational vineyard and wine tasting, including historic depictions and planting of Mission Grapes, educational programs, food and beverage services (including alcoholic beverages), and social events (including weddings and other celebratory gatherings). LICENSE NOW, THEREFORE, LICENSOR and LICENSEE do hereby mutually agree as follows; Section 1. Grant of License/Term. a. Grant of License. LICENSOR hereby grants to LICENSEE a license to establish and maintain a demonstrational vineyard and wine tasting, including historic depictions and planting of Mission Grapes, educational programs, food and beverage services (including alcoholic beverages), and social events (including weddings and other celebratory gatherings) on the Premises, as depicted on the site plan attached hereto as Exhibit II and incorporated herein by reference. LICENSEE shall provide the expertise, supervision and management over the operations, activities and uses authorized herein. Except as otherwise provided in this License, the Premises shall not be used for any other purpose. b. Term. 1. Original Term. The initial term of this Agreement shall commence on the Effective Date through and until June 30, 2017 (the "Original Term"), unless sooner terminated as provided for herein. 2. Renewal Term. The term of this Agreement shall automatically be extended for one additional five-year period beyond the Original Term provided that LICENSEE is not in breach and has satisfactorily complied with all the terms of this License, unless LICENSEE provides written notice of non -renewal to LICENSOR at least 180 days prior to the expiration of 857166.3 the Original Term. The additional five-year term shall be referred to herein as the "Renewal Term." Section 2. License Fee, LICENSOR shall receive from LICENSEE a license fee based on the following schedule: a. For the Original Term, the license fees shall be as follows. Year Monthly Annual 1 St Month May 30 -June 30, 2012, no charge $0 I St year $4,000 per month; first two months no charge $40,000 2nd year $4,000 per month for 12 months $48,000 3rd year $4,500 per month for 12 months $54,000 01 year $4,500 per month for 12 months $54,000 5`h year $5,000 per month for 12 months $60,000 In addition to the foregoing base monthly fee, LICENSEE shall pay three percent (3%) of its gross revenues in excess of $1,200,000 per year for all activities on the Premises commencing July 1, 20I2. b. For the Renewal Term, the license fees shall be as follows: Year Monthlv Fee Annual 6th year $5,500 per month for 12 months $66,000 7`" year $5,500 per month for 12 months $66,000 8th year $6,000 per month for 12 months $72,000 9th year $6,000 per month for 12 months $72,000 i oth year $6,000 per month for 12 months $72,000 In addition to the foregoing base monthly fee, LICENSEE shall pay three percent (3%) of its gross revenues in excess of $1,200,000 per year for all activities on the Premises. C. Security Deposit. LICENSEE shall deposit four thousand dollars ($4,000) with LICENSOR, prior to taking possession of the Premises pursuant to this License. The deposit shall serve as security for LICENSEE's faithful performance of its obligations under this 2 857166.3 License. If LICENSEE fails to pay Rent, or otherwise Defaults under this License, LICENSOR may use, apply or retain all or any portion of said deposit for the payment of any amount already due to LICENSOR, for License Fees which will be due in the future, and/or to reimburse or compensate LICENSOR for any liability, expense, loss or damage which LICENSOR may incur by reason thereof. If LICENSOR uses or applies all or any portion of the deposit, LICENSEE shall, within 10 days after written request from LICENSOR, deposit additional security with LICENSOR sufficient to restore said deposit to the full amount required by this License. LICENSOR may require an additional deposit up to double the current deposit amount (or $8,000) in the event LICENSOR determines that the original deposit amount is not sufficient to secure LICENSEE's faithful perforinance, should any liability, expense, loss or damage occur with respect to the Premises or LICENSEE's obligations under this License. The deposit shall not be required to be maintained separate from LICENSOR's general accounts. Within ninety (90) days after the expiration or termination of this License, LICENSOR shall return that portion of the deposit not used or applied by LICENSOR. LICENSEE shall not be entitled to any interest on the deposit. d. Pa meat of Gross Revenue Fees; Accounting. Payment of the gross revenue fee shall be due within thirty (30) days of the close of fiscal year of LICENSOR (July l through June 3oth) LICENSEE shall maintain detailed records of gross revenues for all activities on the Premises for the purpose of allowing LICENSOR review and audits of same. LICENSEE shall allow LICENSOR to review LICENSEE's records and/or LICENSEE shall submit to an audit at any time provided LICENSOR gives LICENSEE thirty (30) days advanced written notice of same. e. LICENSEE Improvements and Investment. The foregoing fees are not inclusive of improvements and investments made by LICENSEE to/for the use of the Premises, for which there shall be no credit or set off against the foregoing fees. A list of the estimated improvements and investments, which improvements are subject to review and approval by LICENSOR's Planning and Building Departments, is attached as Exhibit C. Section 3. Scope of License and Conditions, Requirements and Limitations Thereof. a. Permissible Uses. LICENSEE may use the Premises for maintaining a demonstrational vineyard and wine tasting, along with the educational and social gathering programs, food and beverage services (including alcoholic beverages), and events first described above. LICENSEE shall be responsible for the supervision and management of every aspect of its operations on the Premises. LICENSEE shall use and maintain the Premises and perform all operations in a competent manner, consistent with the standards of the industry and in accordance with all applicable Federal, State and local regulations, including the City of San Juan Capistrano Municipal Code. LICENSEE shall obtain, at its sole cost and expense, all governmental permits and authorizations of whatever nature required by any governmental agencies having jurisdiction over LICENSEE's use of the Premises. LICENSEE may install a sign on the water tower subject to review by the Design Review Committee and final approval by the City Council. LICENSEE shall further submit for LICENSOR's approval a parking management plan for events at the Premises. 3 857166.3 b. Condition of Premises. Subject to completion of those modifications to, or work on, the Premises to be performed by LICENSOR. listed in and attached as Exhibit D, LICENSEE accepts the Premises in its present condition, "as is", upon execution of this License. LICENSOR makes no warranty of the suitability of the Premises for LICENSEE's intended uses and expressly disclaims any warranty or representation with regard to the condition, safety, security or suitability for LICENSEE's intended use of the Premises. The duly authorized representative of LICENSOR may enter upon the Premises and all structures and buildings thereon, or any portion thereof, at any time, and from time to time. In the event that LICENSEE cannot obtain all necessary approvals to operate its business as intended by this License prior to August 31, 2012, LICENSEE may terminate this License without further liability by giving notice to LICENSOR that LICENSEE, provided that LICENSEE has diligently pursued the approvals and has not itself caused delays in the processing of same. c. Maintenance of Premises. LICENSEE may use the existing structures on the Premises for LICENSEE's use. LICENSEE shall maintain, at LICENSEE's expense, the Premises, including all existing structures and all equipment owned and furnished by LICENSEE, in a reasonable state of repair and working order. LICENSEE agrees, at LICENSEE's expense, to use reasonable care to control all weeds growing on the Premises; keep the Premises clean of trash, debris and rubbish; and to keep fences, ditches, landscaping and borders of the Premises in good condition and repair at all times, reasonable wear and tear excepted. d. Liens. LICENSEE will fully and promptly pay for all materials joined or affixed to the Premises under the authority or direction of LICENSEE, and fully and promptly pay all persons who perform labor upon said Premises. Licensee shall not suffer or permit to be filed or enforced against the Premises, or any part thereof, any mechanics', materialmen's, contractors', or subcontractors` liens or stop notices arising from, or any claim for darnage growing out of, any testing, investigation, maintenance or construction work, or out of any other claim or demand of any kind. LICENSEE shall pay or cause to be paid all such liens, claims or demands, including sums due with respect to stop notices, together with attorney's fees incurred by LICENSOR with respect thereto, within ten (10) business days after notice thereof and shall indemnify, hold harmless and defend LICENSOR from all obligations and claims made against LICENSOR for the above described work, including attorney's fees. LICENSEE shall furnish evidence of payment upon request of LICENSOR. LICENSEE may contest any lien, claim or demand by furnishing a statutory lien bond or equivalent with respect to stop notices to LICENSOR in compliance with applicable California law. If LICENSEE does not discharge any mechanic's liens or stop notice for works performed for Licensee, LICENSOR shall have the right to discharge same (including by paying the claimant), and LICENSEE shall reimburse LICENSOR for the cost of such discharge within ten (10) business days after billing. The provisions of this subsection shall survive the termination of this License. e. "Third Party Liability. LICENSEE shall be responsible and liable for all acts and omissions of all of LICENSEE's contractors, agents, employees, representatives and any other person or party entering upon the Premises under the authority or color of this License. f. Point of Sale Requirement. LICENSEE shall designate the Premises as the Point 4 857166.3 of Sale for sales tax purposes for all sales subject to the California Bradley -Burns Sales and Use Tax and events that occur on the Premises. Therefore, principal negotiations and all reservation processing for the Premises should take place within the City of San Juan Capistrano at a dedicated office on the Premises. g. Public Events Reserved to LICENSOR. In addition to the foregoing conditions, LICENSEE will provide LICENSOR with the option of reserving three (3) annual event dates to benefit the public, as determined in LICENSOR's sole discretion, without charging a rental fee for the Premises. However, LICENSOR will be responsible for any fees incurred for subcontract services required for LICENSOR's events, including but not limited to valet service, rental of portable restrooms, security services (if required), catering, and similar services. LICENSEE and LICENSOR will. mutually agree on the three annual event dates. LICENSOR shall be given priority in the selection of available event dates not more than 90 days from the date of request and LICENSEE shall be given priority in all other instances in order to allow LICENSEE to maximize the use of the Premises as provide for in this License. Section 4. Na Assignments. LICENSEE shall not voluntarily, involuntarily or by operation of law assign, sublet, transfer, mortgage or otherwise encumber all or any part of the Premises, or any interest therein, without the prior written consent of LICENSOR. Any attempted assignment, sublet or transfer made in violation of this provision shall be null and void. Notwithstanding the foregoing, LICENSEE may enter into an exclusive agreement to provide catering services on the Premises without violating this License. Section 5. Utilities. LICENSEE will be solely responsible for providing all water, sewer, electricity, telephone, Internet, refuse collection, gas, landscape maintenance, and other necessary utilities for the use and operation of the Premises. Section 6. Time of the Essence. Time is of the essence of each and every provision, covenant, and condition herein contained and on the part of LICENSEE and LICENSOR to be done and performed. Section 7. Site Modifications. Any modifications to the Premises, other than those specifically provided for in this License will require prior approval of the San Juan Capistrano City Council. Additionally, any site modifications approved in concept by the City Council will be subject to all applicable City of San Juan Capistrano design guidelines and permitting processes. Section 8. Default. a. If LICENSEE defaults in the payment of the license fee, or any additional 857166.3 applicable license payments, or defaults in the performance of any of the other covenants or conditions hereof, LICENSOR may give LICENSEE written notice of such default and if LICENSEE does not cure any such default within thirty (30) days, or such other time period as specified in the notice of default, after the giving of such notice, then LICENSOR may immediately terminate this License. The notice shall specify in reasonable detail the nature and extent of the default. If the nature of LICENSEE's obligation is such that more than thirty (30) days are required for performance, then LICENSEE shall not be deemed to be in default if it shall commence such performance within such thirty (30) day period and thereafter diligently prosecute the same to completion. If LICENSOR terminates the License pursuant to this Section, then, on the date specified in the notice of termination, the term of this License shall terminate, and LICENSEE shall then quit and surrender the Premises to LICENSOR, but LICENSEE shall remain liable as hereinafter provided. If this license shall have been so terminated by LICENSOR, LICENSOR may at any time thereafter resume possession of the Premises by any lawful means and remove LICENSEE or other occupants and their effects. b. If LICENSEE breaches any covenant or condition of this license, LICENSOR may, on reasonable notice to LICENSEE (except that no notice need be given in case of emergency), cure such breach at the expense of LICENSEE. The reasonable amount of all expenses, including attorney's fees, incurred by LICENSOR in so doing shall be deemed additional fees payable on demand. Section 9. Termination Due to Bankruptcy or Insolvency. In the event proceedings in bankruptcy are commenced by LICENSEE, or LICENSEE is found to be in a state of insolvency, then in such event, LICENSOR shall have the right to terminate this License and all further rights and obligations thereunder, by ten (10) days' notice in writing to LICENSEE, in which event, on the expiration of the ten (10) days from mailing of the notice, this License shall automatically terminate. Section 10. Compliance with Laws. LICENSEE's use of the Premises hereunder shall be conditioned upon LICENSEE, at its sole cost and expense: a. Maintaining all necessary licenses and/or permits from all appropriate public and/or governmental agencies with respect to such use (and LICENSEE shall provide copies of the same to LICENSOR upon any request therefor); b. Complying with each and every federal, state or local law (including the City of San Juan Capistrano Municipal Code), regulation, standard, decision of court, ordinance, rule, code, order, decree, directive, guideline, permit or permit condition, together with any declaration of covenants, conditions and restrictions which have been recorded in any official or public records with respect to the Premises or any portion thereof, each as currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to the Premises, 6 857166.3 Section 11, Notices. Any notice required to be given under this Agreement shall be in writing and shall be deemed to have been duly given and received if and when personally served, or forty-eight (48) hours after being deposited in the United States mail, first class, postage prepaid, addressed to the intended party at: LICENSOR: City of San Juan Capistrano Attn.: Karen P. Brust, City Manager 32400 Paseo Adelanto San duan Capistrano, CA 92675 LICENSEE: Hamilton Oaks at San Juan, LLC Attn.: Ron Tamez 31111 Hamilton Trail Trabuco Canyon, CA 92679 Section 12. Attorneys' Fees. In the event any legal action or proceeding is commenced to interpret or enforce the terms of, or obligations arising out of this License, or to recover damages for the breach thereof, the party prevailing in any such action or proceeding shall be entitled to recover from the non -prevailing party all reasonable attorney's fees, costs and expenses incurred by the prevailing party. Section 13. Surrender of Premises. LTCENSEE shall, at the termination of this License, vacate the Premises in as good condition as they are in at the time of entry thereon by LICENSEE. Upon vacating, LICENSEE shall leave Premises free and clear of all rubbish and debris. Nothing in this License shall require LICENSEE to remove any of the improvements listed on Exhibit C or approved by LICENSOR in accordance with the provisions of this License. Section 14. Insurance. LICENSEE shall maintain during the term of this License comprehensive general liability insurance, including automobile coverage and blanket contractual liability coverage, with respect to the Premises and the activities of or on behalf of LICENSEE, including personal injury and property damage for not less than Two Million Dollars ($2,000,000) combined single limit bodily injury, death and property damage liability per occurrence, or the current limit of liability carried, whichever is greater, and worker's compensation insurance to protect LICENSEE and LICENSOR from any claim made or action brought by any person or entity arising out of or related to LICENSEE's use of the Premises thereafter or arising out of or connected in any way 7 8571603 with the acts of LICENSEE undertaken pursuant to this License. LICENSEE shall provide that the policy or policies of insurance shall be primary and shall name LICENSOR (and all of their elected officials, officers, directors, agents, representatives, managers and employees) as an additional insured, with the provision that any other insurance carried by LICENSOR shall be noncontributing and shall waive all rights of subrogation. LICENSEE shall furnish LICENSOR with a Certificate of Insurance and Additional Insured Endorsement as evidence of such policy or policies. Section 15. Hazardous Substances. LICENSEE shall not use, store or transport any hazardous substances on or onto the Premises; and LICENSEE shall repair, remediate and/or restore any condition attributable to or arising from the same. Section 16. Indemnification. LICENSEE shall indemnify, defend and hold harmless LICENSOR (and all of their elected officials, officers, directors, agents, representatives, managers and employees) from and against all liabilities, claims, damages, losses and expenses of any nature whatsoever (including, but not limited to any costs or expenses for attorneys' fees and all incidental or consequential damages) arising out of I. ICENSEE's use of the Premises or otherwise arising out of the acts or omissions of LICENSEE hereunder. Section 17, Taxes. Pursuant to Revenue & Taxation Code §107,7, should a property interest be created herein, it may be subject to property taxation and LICENSEE may be subject to property taxes levied on such interest. In no event shall LICENSOR be liable for any taxes owed as a result of this License or LICENSEE's use of the Premises. Section 18. No Relocation Benefits. This License is not intended to convey a property interest but to permit LICENSEE to use the Premises as provided for herein. LICENSEE acknowledges the rights granted by State and/or Federal Relocation Assistance Laws and regulations and, notwithstanding any other provision of this License, expressly waives all such past, present and future rights,. if any, to which LICENSEE might otherwise be entitled from LICENSOR with regard to this License and the business operated on the Premises. LICENSEE shall not be entitled to relocation assistance, relocation benefits, or compensation for'loss of goodwill upon the termination of this License. Section 19. Entire Agreement. The terms in this License constitutes the entire understanding and agreement between the Parties and supersedes all previous negotiations between them pertaining to the subject matter thereof. 857166.3 Section 20. Miscellaneous. a. This License may be modified only by written instrument executed by both parties hereto. b. This License is entered into for the sole protection and benefit of LICENSOR and LICENSEE. C. Any failure by LICENSOR to insist upon a strict performance by LICENSEE of any of the terms and provisions hereof shall not be deemed to be a waiver of any of the terms and provisions hereof. d. This License shall be governed by the construed in accordance with the laws of the State of California. e. The parties executing this License warrant that they have authority to bind the respective parties thereto. [SIGNATURE PAGE FOLLOWS] 9 857166,3 IN WITNESS WHEREOF, LICENSOR and LICENSEE have caused this License Agreement to be executed on the date and year first written above. LICENSEE: HAMILTON OAKS AT SAN JUAN, LLC By: HAMILTON OAKS VINEYARD & WINERY, INC., Manager By: lay on Tamex, President LICENSOR: CITY OF SANT JUAN CAPISTRANO, A Califorr* municipal corporation , ATTEST l City Clerk APPROVED AS TO FORM&" 6AI OCIAL)_0 Omar Sand al, City Attorney Attachments: Exhibit A ----Description of the Premises Exhibit B ------Site Plan Exhibit C—Estimated Improvements 10 857166.3 R.Y. Williams House CityGIS 6,0 N Boundary Description COPWWA 0 20ali All RIDMVOS-tvedInes OftmNion cortmoo her ain 14 tho. prQrom wy propolyw I.h. e CQf4rWvr wpPfM'd uncle.1, licvm* Orth may not to elvprov6d ex—teo w kof)tnj by OFjdal MOP PIFWt4 _ HAMILTON OAKS VINEYARD PRELIMINARY SITE PLAN A7 ROGER Y. WILUAMSISWANNER HOUSE 2 i CAM NO C„PST ANN . SAN JUAN CAPIS i RANO, CA Estimated Im rovements to b2 Com2lejed by Licensee 1. in the event something would evolve that would put the tenant/owner of Hamilton Oaks In a position of setting the business, leaseliicense would be transferable to new owner. 2. A map was found (copy attached)stating the dimensions of the rectangle borderlines of the property, tenant has marked there for the City as specified on the reap; the house property line goes out Into the Open Space circular driveway approximately 17 feet from the Stop Sign, therefore, there is no marker on that comer. 3. Signage in town as discussed in meeting done by City at Tenants expense. 4. Signage on road as discussed in meeting. 5. Entrance gate to parking area to be agreed upon, per meeting. 6. It would be appreciated if City would accept a one month security deposit instead of the traditional two months since tenant is investing a fairly substantial amount of money In property improvements and it is highly unlikely the property will be in any position of deterioration when the cost of improvements are considered. 7. Clean up plants and trees. 8. Add the parking lot. 9, Comply with appropriate ALTA requirements. 10. Fix the gate in the front and fence. 11. Add the required electrical panel for separate electricity to be utilized for the partyftent area; special events venues would anticipate handling a crowd from about 50 (the cap on the house) to approximately 400. 12. Comply with adequate fire department requirements for Tenanrs specific use. 13. Comply with Health Department requirements. 14. Comply with Liquor License Board requirements. 15. List City as additional insured on $2,000,000 insurance policy. Modifications to be Com feted by Licensor 1. Verify the corners of the property marked by Tenant. 2. Clark the trees which need removal by tenant. • A tree survey has been completed; the trees have yet to be tagged.