HomeMy WebLinkAbout2019-07-09; City Council; Resolution 2019-114RESOLUTION NO. 2019-114
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT
WITH BAKER PARKING, LLC FOR THE PROPERTY LOCATED AT 2065
CAMINO VIDA ROBLE, COMMONLY KNOWN AS THE HAWTHORNE
PROPERTY
Exhibit 1
WHEREAS, on October 17, 2017, City Council approved the Real Estate Strategic Plan by
Resolution No. 2017-200, which recommended that the city pursue a short term lease agreement on
the Hawthorne Property that included a right of first offer to purchase the property; and
WHEREAS, on April 24, 2018, City Council authorized the release of a request for proposals to
lease the property located at 2065 Camino Vida Roble ("Property") by Resolution No. 2018-054; and
WHEREAS, the city received five proposals which were evaluated and scored by an internal
selection committee that recommended Baker Parking, LLC ("Bob Baker Auto Group") as the
prospective tenant of the Property; and
WHEREAS, on August 28, 2018, City Council authorized staff to enter into exclusive
negotiations with the Bob Baker Auto Group by Resolution No. 2018-162; and
WHEREAS, the Bob Baker Auto Group desires to enter into a lease agreement to operate an
auto repair facility and utilize the majority of the paved parking area for new vehicle storage located
at the Property; and
WHEREAS, the lease agreement is for a term of five-years and provides for two successive
three-year renewal options, and includes a right of first offer if and when the city initiates a sale of the
Property; and
WHEREAS, the city may initiate the sale of the property at any time during the initial terms or
during either three-year renewal option; and
WHEREAS, The Bob Baker Auto Group will initially pay the city rent of $156,000, to be
increased three percent annually over the term of the lease agreement. July 9, 2019 Item #2 Page 4 of 54
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct.
2. That the mayor is hereby authorized and directed to execute the lease agreement
(Attachment A), for the property located at 2065 Camino Vida Roble with Bob Baker
Auto Group.
3. That the city manager, or his designee, is hereby authorized to act on behalf of the City
of Carlsbad in all future decisions and actions necessary to implement the lease
agreement with Bob Baker Auto Group for the property located at 2065 Camino Vida
Roble, and to do so in full compliance with the terms and conditions expressed in the
aforementioned lease agreement and to the satisfaction of the city attorney.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City
of Carlsbad on the 9th day of July, 2019, by the following vote, to wit:
AYES: Hall, Blackburn, Bhat-Patel, Schumacher, Hamilton
NAYS: None.
ABSENT: None.
July 9, 2019 Item #2 Page 5 of 54
Attachment A
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is entered into as of _........,~A-:-_....,.~>->L...::...., 2019,
by and between CITY OF CARLSBAD, a California municipal corporation ("La ord") and BAKER
PARKING, LLC, a California limited liability company ("Tenant") and shall be effective and
binding upon the parties hereto as of the date of execution hereof by both parties.
RECITALS
WHEREAS, Landlord is the owner of certain real property and improvements thereon,
consisting of approximately 3.08 gross acres, designated as Assessor Parcel Number 213-061-
28-00, and more particularly described and/or depicted on Exhibit A attached hereto (the
"Parcel");
WHEREAS, Tenant's managing member and primary owner is also the primary owner
and operator of the Bob Baker Auto Group, which operates five automotive dealerships
exclusively within Car Country Carlsbad, including: Bob Baker VW Subaru, Bob Baker Chrysler
Jeep Dodge Fiat, Bob Baker Mazda, Bob Baker Maserati Alfa Romeo, and Bob Baker Hyundai
Genesis of Carlsbad; and
WHEREAS, Tenant desires to lease all portions of the Parcel other than those included in
the 0.61-acre upper parking lot area (collectively, the "Premises"), in order to provide a
location to relocate their existing customer and non-customer facing auto-repair services as
well as new vehicle staging and storage currently located on their Car Country Carlsbad
dealership properties; and
WHEREAS, Landlord is willing to lease the Premises to Tenant for the term and upon the
covenants, conditions and provisions hereinafter set forth.
AGREEMENT
NOW THEREFORE, in consideration of the covenants, conditions and provisions
contained herein, the parties hereto do mutually agree as follows:
ARTICLE 1
BASIC LEASE PROVISIONS
1.1 Trade Name. Bob Baker Auto Group ("Trade Name").
1.2 Premises. The Premises (defined above) are commonly known as 2065
Camino Vida Roble, Carlsbad, California, 92011, and consist of a freestanding 5,000 square foot
concrete block building comprised of 1,100 square feet of office space and 3,900 square feet for
truck bays and approximately 1.5 acres of fully paved concrete and asphalt exterior parking
space.
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Attachment A
1.3 Term and Rent Commencement. The term of this Lease shall be
approximately five (5) years, commencing upon the date when this Lease has been executed by
both parties (the "Term Commencement Date"), and expiring, unless sooner terminated in
accordance with this Lease, upon the date that is five (5) years after the Rent Commencement
Date (defined below) (the "Expiration Date"), subject to the extension options set forth in
Section 3.2 below. Tenant shall commence paying rent under this Lease either (i) on the date
tenant commences storage of vehicles on the Premises subject to obtaining a Minor
Conditional Use Permit, (ii) on the date tenant receives a Certificate of Occupancy following the
completion of Tenant's Work, or (ii) one-hundred and eighty (180) days after the Term
Commencement Date, whichever occurs first (collectively, the "Rent Commencement Date");
provided, however, that concurrently with the execution of this Lease, Tenant shall pay to
Landlord the Base Rent for the first (l5t) full month beginning on the Rent Commencement
Date. As used in this Lease, "Lease Year" means each twelve (12) month period (or portion
thereof) during the Term commencing with the Rent Commencement Date.
1.4 Base Rent.
Lease Vear Months* Base Rent Per Month Annual Base Rent
1 1-12 $13,000.00 $ 156,000.00
2 13-24 $13,390.00 $ 160,680.00
3 25-36 $13,791.70 $ 165,500.40
4 37-48 $14,205.45 $170,465.41
5 49-60 $14,631.61 $ 175,579.37
*From the Rent Commencement Date
1.5 Additional Consideration. Upon execution of the Lease, Tenant agrees
to make substantial improvements on Tenant's Car Country Carlsbad automotive dealership
lots as lease consideration under this Lease (hereinafter "Offsite Car Dealership
Improvements"). Tenant's Offsite Car Dealership Improvements shall include, but not be
limited to:
a) Best good-faith efforts to retain the Volkswagen franchise within Car Country,
including exploration of the development of a parking structure on the Volkswagen-Subaru
property; and
b) Best Good-Faith efforts to remodel Tenant's Mazda existing sales facility,
expansion of the Mazda repair facility, and construction of an additional showroom on the
northeastern side of the Mazda Property by the end of the initial term, including exploration of
the development of a parking structure and added vehicle service bays; and
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Attachment A
1.6 Use of Premises. The Premises shall be used only for the operation
of Bob Baker Auto Group's customer and non-customer facing auto-repair services as well as
new vehicle staging and storage subject to approval of a Minor Conditional Use Permit
("Permitted Use").
1.7 Tenant Improvement Allowance. None.
1.8 Security Deposit. $13,000.
1.9 Guarantor: Christopher R. Baker (individually and as Trustee of the
Christopher and Maria Baker Family Trust)
1.10 Broker(s): None.
1.11 Tenant's Address for Notices:
Baker Parking, LLC
Attn: Chris Baker
5365 Car Country Drive
Carlsbad, CA 92008
1.12 Landlord's Address for Notices:
City of Carlsbad
Real Estate Manager
1200 Carlsbad Village Drive
Carlsbad, CA 92008
With a copy to:
Procopio, Cory, Hargreaves & Savitch LLP
Attn: Michael E. Lyon
12544 High Bluff Drive, Suite 400
San Diego, CA 92130
Email: michael.lyon@procopio.com
1.13 Landlord's Address for Rent Payments:
DOCS 121163-000005/3437067.2
Finance Department
City of Carlsbad
1635 Faraday Avenue
Carlsbad, CA 92008
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July 9, 2019 Item #2 Page 8 of 54
Attachment A
This Article 1 is intended to supplement and/or summarize the provisions set forth in the
balance of this Lease. If there is any conflict between any provisions contained in this Article 1
and the balance of this Lease, the balance of this Lease shall control.
ARTICLE2
PREMISES
2.1 Lease of Premises. Landlord leases to Tenant and Tenant leases from
Landlord the Premises described in Article 1 for the Term (as defined in Article 3 below) and
pursuant to all of the terms, covenants and conditions contained herein. Any statement of
square footage set forth in this Lease, or that may have been used in calculating Base Rent, is
an approximation which Landlord and Tenant agree is reasonable and the Base Rent based
thereon is not subject to revision whether or not the actual square footage is more or less.
2.2 Condition of the Premises. Tenant acknowledges that except as
otherwise expressly provided herein it shall accept the Premises in its "AS IS" condition, without
representation, warranty or any improvements by Landlord. Landlord makes no
representations or warranties with respect to this Lease, the Premises or any property therein
or with respect to any matter related thereto, other than as expressly set forth in this Lease.
Tenant hereby acknowledges that it has had an opportunity to investigate and inspect the
condition of the Premises and the suitability of same for Tenant's purposes, and Tenant does
hereby (a) waive and disclaim any objection to, cause of action based upon, or claim that its
obligations hereunder should be reduced or limited because of the condition of the Premises or
the suitability of same for Tenant's purposes and (b) acknowledge that the Premises are in
good, clean and sanitary order and repair and by taking possession Tenant accepts the Premises
as it exists. Tenant acknowledges that neither Landlord nor any agent nor any employee of
Landlord has made any representations or warranty with respect to the Premises or with
respect to the suitability of either for the conduct of Tenant's business and Tenant expressly
warrants and represents that Tenant has relied solely on its own investigation and inspection of
the Premises in its decision to enter into this Lease and let the Premises in an "AS IS" condition
and is not relying on any statements, representations or warranties whatsoever made by or
enforceable . directly or indirectly against Landlord relating to the condition, operations,
dimensions, descriptions, soil condition, suitability, compliance or lack of compliance with any
state, federal, county or local law, ordinance, order, permit or regulation, or any other attribute
or matter of or relating to the Premises. No promise of Landlord to alter, remodel, repair or
improve the Premises, and no representation, express or implied, respecting any matter
relating to the Premises or this Lease (including, without limitation, the condition of the
Premises} has been made to Tenant by Landlord or any agent of Landlord other than as may be
contained herein.
2.3 Delivery of Possession. Tenant shall accept possession of the Premises
from Landlord on the Term Commencement Date; provided, however, that Tenant shall not be
entitled to possession of the Premises until Landlord has received from Tenant all of the
following: (i) the Security Deposit, the first monthly installment of Base Rent for the first (1st)
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Attachment A
full month after the Rent Commencement Date; and (ii) executed copies of policies of insurance
or certificates or binders thereof as required under Article 9 below. Tenant shall pay to
Landlord, upon its execution of this Lease, the sums specified in clause (i) above. If Tenant is
unable to obtain possession of the Premises because one (1) or more of the above items are
not received by Landlord, the Opening Date (as hereinafter defined), the Term Commencement
Date, Tenant's Completion Date (as hereinafter defined) and the Rent Commencement Date
shall not be affected or delayed thereby.
2.4 Easements. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications affecting all or any part of the Premises as
Landlord deems necessary or desirable, and to cause the recordation of parcel and subdivision
maps and restrictions affecting all or any part of the Premises, so long as such easements,
rights, dedications, maps and restrictions do not increase Tenant's obligations under this Lease
or unreasonably interfere with Tenant's use of the Premises. Tenant shall sign any of the
aforementioned documents upon Landlord's request and Tenant's failure to do so or breach of
this Section shall constitute a material default under this Lease. Tenant shall cooperate with
and not oppose or object to Landlord's construction, development, subdivision and
parcelization of all or any part of the Premises and any property adjacent to the Premises.
2.5 Existing Equipment. Landlord hereby grants Tenant the right to use any
and all existing furniture and equipment ("Existing Equipment"), if any, used by the prior tenant
of the Premises and located within the Premises on the Term Commencement Date. Tenant
acknowledges that it shall accept the Existing Equipment in its "AS IS" condition, without
representation or warranty by Landlord. Said right shall be coterminous with this Lease and
upon such termination, the Existing Equipment shall be deemed to constitute part of the
Premises and surrendered by Tenant to Landlord in good condition and repair, ordinary wear
and tear and damage from casualty excepted.
ARTICLE 3
TERM
3.1 Term. The Term of this Lease {"Term") shall commence on the Term
Commencement Date and shall expire, unless sooner terminated in accordance with this Lease,
on the Expiration Date. After the Rent Commencement Date, upon Landlord's request, Tenant
shall promptly execute a Memorandum of Term Commencement in the form attached hereto
as Exhibit B, which shall specify the Term Commencement Date, Rent Commencement Date
and the Expiration Date. If Tenant fails to execute a Memorandum of Term Commencement,
such failure shall not affect Tenant's obligation to commence paying rent upon the occurrence
of the Rent Commencement Date.
3.2 Extension Option. Tenant shall have two (2) options to request an
extension of the Term for three (3) years each {each an "Extension Term"), commencing upon
the expiration of the Term or prior Extension Term, as applicable, provided that the Tenant is
not in default or breach of any term, condition, covenant or provision of this Lease. In order to
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Attachment A
exercise this option, Tenant must give written notice of its election to extend the term to the
City Manager, or his/her designee, no later than one hundred and eighty (180) days prior to the
commencement of the applicable Extension Term, but not more than two hundred seventy
(270) days prior to the commencement of the applicable Extension Term (the "Extension
Request)". If Tenant is not in default or breach of any term, condition or covenant of this Lease,
the City Manager is authorized to confirm the Extension Term.
The City Manager or his/her designee will notify the Tenant not later than sixty (60) days after
receipt of such Extension Request whether such request will be granted. The City Manager, at
its sole discretion, may approve or deny the extension of the Term of this Lease. In the event
the City Manager is unable to consider the Extension Request in sufficient time as to provide
Tenant with notice at least thirty (30) days prior to the Expiration Date, then the Term shall be
automatically extended for a period not to exceed thirty (30) days, to allow additional time for
notification of such approval or denial.
Tenant understands and agrees that Landlord may sell the Premises prior to Tenant exercising
either Extension Term. Should Landlord sell the Premises to such a third-party, Tenant
understands and agrees that the Landlord's successors or assigns, in their sole discretion, may
approve or deny the extension of the Term of this Lease.
Base Rent for the first twelve (12) months of each Extension Term (if requested and approved
as set forth above) shall be one hundred three percent (103%) of the monthly Base Rent
applicable immediately prior to the commencement of such Extension Term, and Base Rent
shall increase every twelve (12) full calendar months thereafter by three percent (3%).
3.3 Sale of Premises. Notwithstanding any provisions of this Lease to the
contrary, Landlord may assign, in whole or in part, Landlords interest in this Lease and may sell
all or part of the real estate of which the Premises are a part (the Real Property) at any time
during the duration of this Lease. Upon the sale of the Premises, Landlord shall be released of
all its obligations under this Lease, to the extent such obligations are assumed by such
purchaser.
3.4 Right of First Offer to Purchase. If Landlord elects to sell the Premises,
pursuant to Section 3.3 above, then Tenant shall have a Right of First Offer to purchase the
Premises, including the western portion of the 0.61-acre upper parking lot area, subject to the
terms and conditions described in Exhibit D attached hereto.
3.5 Surrender of Premises. On the Exp iration Date or on the sooner
termination hereof, Tenant shall remove all of Tenant's Personal Property, such as a car wash
system, from the Premises and peaceably surrender the Premises in accordance with the terms
of this Section and in good order, condition and repair, broom clean and free of debris,
excepting only ordinary wear and tear, condemnation and any damage or destruction not
caused by Tenant or any or any officer, employee, agent or invitee of Tenant. "Ordinary wear
and tear" shall not include any damage or deterioration that would have been prevented by
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Attachment A
good maintenance practice. Notwithstanding any other provision hereof, Tenant shall not
remove (unless requested to by Landlord, in which case Tenant shall remove) all or any part of
Tenant's Work and the Tenant Improvements, or any fixtures or equipment which cannot be
removed without material damage to the Premises, unless said material damage can be
properly repaired to the satisfaction of Landlord. Unless otherwise elected by Landlord, such
items shall remain upon and be surrendered with the Premises as a part thereof, without
charge, at the expiration or termination of this Lease and shall then become the property of
Landlord. Tenant shall repair, to the reasonable satisfaction of Landlord, any damage to the
Premises caused by any removal, or by the use of the Premises or by any failure of Tenant to
comply with the terms of this Lease (including, without limitation, provisions relating to
Hazardous Substances). Tenant shall promptly surrender all keys for the Premises to Landlord
at the place then fixed for notices to Landlord and shall inform Landlord of the combinations on
any locks and safes on the Premises. The provisions of this Section shall survive termination of
this Lease.
3.6 Holding Over. Tenant has no right to retain possession of the Premises
or any part thereof beyond the expiration or termination of this Lease. The failure of Tenant to
timely surrender the Premises in the condition required by Section 3.4 above shall constitute a
holdover and shall not be considered a renewal of this Lease or an extension of the Term. In
the event of any such holdover Base Rent shall immediately be increased to an amount equal to
150% of the Base Rent applicable during the month immediately preceding the expiration or
termination. In addition to paying Landlord the increased Base Rent, Tenant shall defend,
indemnify, protect and hold Landlord harmless from and against all claims, liability, damages,
costs and expenses, including attorneys' fees and costs of defending the same, incurred by
Landlord and arising directly or indirectly from Tenant's holding over in the Premises without
Landlord's express written consent, including (a) any rent payable by or any loss, cost or
damages, including lost profits and loss of good will claimed by any prospective tenant of the
Premises, and (b) Landlord's damages as a result of such prospective tenant's rescinding or
refusing to enter into the prospective lease of the Premises as a direct or indirect result of
Tenant's holding over. No action by Landlord other than Landlord's express written consent
shall be construed as consent by Landlord to any holding over by Tenant.
3.7 Waiver of Relocation Benefits: Tenant waives any and all relocation
benefits defined in the California Relocation Assistance Law (Government Code, Section 7260,
et. seq.) in connection with this Lease.
ARTICLE 4
CONSTRUCTION AND OPENING DATE
4.1 Construction. Tenant, at its sole cost and expense, shall commence
construction of Tenant's Work as described in Exhibit C attached hereto and more particularly
described in the Final Plans for such work that have been approved by Landlord, including
(without limitation) pursuit of all necessary permits required for commencement of Tenant's
Work (collectively, the "Building Permits"), promptly upon delivery of possession of the
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Attachment A
premises to Tenant, and shall diligently prosecute the same in order to achieve completion of
Tenant's Work on or before the Opening Date, in accordance with all deadlines and
requirements stated in Exhibit C and in accordance with Article 12 below. Tenant is aware that
Tenant's improvements may require a Minor Conditional Use P~rmit.
4.2 Opening Date. Tenant shall open for business in the Premises within one
hundred twenty {120) days after Tenant receives the Building Permits (the "Opening Date11
) and
shall continuously operate Tenant's business in accordance with this Lease.
4.3 Certificates. Within ten {10) days after Tenant initially opens for business
in the Premises, Tenant shall: (i) execute and deliver to Landlord a valid notice of completion of
Tenant's Work in accordance with Section 3093 of the California Civil Code, as amended or
recodified from time to time ("Tenant's Certificate of Completion11
) in recordable form and (ii)
deliver to Landlord a valid certificate of occupancy for the Premises issued by the appropriate
governmental agency (the "Certificate of Occupancy11
). Landlord shall have the right to record
or cause Tenant to record Tenant's Certificate of Completion in the official records of the
County Recorder's Office of San Diego County.
ARTICLE 5
RENT
5.1 General Provisions. As used herein, "rent" shall mean Base Rent and
Additional Rent (defined below). Unless provided herein to the contrary, Tenant shall pay all
rent to Landlord at Landlord's Address for Rent Payments provided in Article 1 above. All rent
shall be paid to Landlord in lawful money of the United States of America without demand
therefor, and without deduction, offset or abatement of any kind, except as may be expressly
provided for in this Lease. Rent for any partial month shall be prorated on the basis of a thirty
{30) day month. Tenant assumes all risk of loss if payments are made by mail.
5.2 Payment of Base Rent. For each month or partial month of the Term
commencing on the Rent Commencement Date (except as otherwise expressly provided
herein), Tenant shall pay to Landlord the sum specified in Article 1 as Base Rent ("Base Rent")
in advance as set forth herein. Tenant shall pay the first installment of Base Rent to Landlord
concurrently with Tenant's execution of this Lease, and all subsequent installments of Base
Rent shall be payable in advance on or before the first day of each calendar month.
5.3 Additional Rent. Except for Base Rent, all amounts that Tenant is
required to pay to Landlord under this Lease shall be treated as "Additional Rent", and shall be
paid when due as provided in this Lease.
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ARTICLE 6
SECURITY DEPOSIT
Attachment A
6.1 Security Deposit. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with landlord the security deposit specified in Article 1 ("Security
Deposit"). landlord shall hold the Security Deposit as security for Tenant's faithful performance
of all the terms, covenants, and conditions of this lease. landlord shall not be required to keep
the Security Deposit separate from Landlord's general funds. Landlord shall have the right to
commingle the Security Deposit with Landlord's general funds and to retain any and all interest
and earnings on the Security Deposit. Tenant shall not be entitled to any interest on the
Security Deposit. Subject to Landlord's right hereunder to apply the Security Deposit in
accordance with this Section, the parties acknowledge that the Security Deposit does not cover
any rent hereunder. In the event of a sale of the Premises or assignment of this Lease by
Landlord to any person other than a mortgagee, Landlord shall have the right to transfer the
Security Deposit to its vendee or assignee, subject to Tenant's aforesaid rights upon
termination, and if landlord transfers the Security Deposit to the vendee or assignee for the
benefit of Tenant, or if such vendee or assignee assumes all liability with respect to such
Security Deposit, Landlord shall be considered released by Tenant from all liability for the
return of such Security Deposit, and Tenant agrees to look solely to the new landlord for the
return of the Security Deposit, and it is agreed that this Section 6.1 shall apply to every transfer
or assignment to a new Landlord.
6.2 Use of Security Deposit. If Tenant breaches or fails to perform any of
Tenant's obligations under this lease, Landlord shall have the right, but not the obligation, to
use or retain all or any part of the Security Deposit to cure the breach or failure of performance,
and to compensate Landlord for any damages sustained by landlord, including but not limited
to payment of: (i) delinquent rent; (ii) interest on delinquent rent; (iii) late charges on
delinquent rent; (iv) the cost of performing any of Tenant's obligations under this Lease; (v) the
cost of repairing damages to the Premises; (vi) the cost of cleaning, maintaining, repairing,
restoring or reletting the Premises; (vii) attorneys' and accountants' fees and disbursements
and court costs; (viii) brokerage commissions and finders' fees; and (ix) interest on any and all
of the above at the maximum lawful rate ("Remedy Rate") from the date due until paid;
provided, however, that retention of all or any part of the Security Deposit shall not affect
Tenant's obligations under this lease or Landlord's other rights and remedies provided at law,
in equity, or under this Lease; and provided, further, that in the event that Landlord elects to
apply the Security Deposit or any portion thereof as herein provided, such application and the
amounts applied to particular items of cure and/or compensation shall be determined by
landlord in Landlord's sole and absolute discretion. If any portion of the Security Deposit is
used as provided for in this Section, then within 10 days after written demand by Landlord,
Tenant shall deposit with Landlord sufficient cash to restore the Security Deposit to its original
amount. Tenant's failure to make this deposit shall be a default under this Lease.
6.3 Refund; Waiver of Statutes. If Tenant shall have fully and faithfully
performed all of Tenant's obligations under this Lease (or upon the earlier termination without
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Attachment A
Tenant's fault), has cleaned and repaired any damage, and has received invoices for such repair
or cleaning costs, if any, and after Landlord has inspected the Premises, then Landlord shall
return the Security Deposit or any balance thereof to Tenant. Tenant hereby waives (i)
California Civil Code Section 1950.7, as amended or recodified from time to time.
Notwithstanding anything to the contrary contained herein, the Security Deposit may be
retained and applied by Landlord (a) to offset rent which is unpaid either before or after the
termination of this Lease, and (b) subject to the provisions of Section 9.7 of this Lease, against
other damages suffered by Landlord before or after the termination of this Lease, whether
foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer,
employee, agent or invitee of Tenant.
ARTICLE 7
TAXES
7.1 Real Estate Taxes. Tenant shall pay directly prior to delinquency any and
all real estate taxes, assessments (whether general, special, ordinary or extraordinary),
possessory interest taxes, improvement bonds, license fees, commercial rental taxes, sewer
and water rents and other levies, fees and charges of every kind imposed by any authority
having the direct or indirect power to so tax, levy or assess, to the extent relating to the
Premises, to Landlord's gross receipts or revenues from the Premises, or to the business or
other activities of Tenant upon or in connection with the Premises (individually and collectively,
"Real Estate Taxes"). In particular, Tenant acknowledges that this Lease may result in a taxable
possessory interest. Tenant shall be solely responsible for the payment of Real Estate Taxes
associated with its occupancy of the Premises, if any apply. Tenant shall also pay any fees
imposed by law for licenses or permits for any business or activities of Tenant upon the
Premises or under this Lease.
7.2 Personal Property Taxes. Tenant shall pay directly prior to delinquency
any and all taxes and assessments levied or assessed during the Term upon or against
(i) Tenant's Property (as hereinafter defined), furniture, equipment, and any other personal
property installed or located in the Premises and (ii) all above-standard alterations, additions,
betterments, or improvements of whatever kind or nature made by Tenant to the Premises
that are separately assessed.
ARTICLE 8
UTILITIES
8.1 Payment of Utilities. Tenant shall pay, before delinquency, for all utilities
and services serving the Premises, including (without limitation) trash collection, water, gas and
electricity, and any and all utility hook-up fees, connection fees, including sewer connection
fees, and service and other charges for the availability of any such utilities and services,
supplied to or consumed in or upon the Premises from and after the Term Commencement
Date and continuously thereafter throughout the Term, directly to the supplier of such utilities
and services. Upon Landlord's request, Tenant shall deliver to Landlord copies of all bills for
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Attachment A
utilities supplied to the Premises for the past twelve (12) month period within thirty (30) days
after Landlord's request.
8.2 Interruption of Utilities. Landlord shall have the right (but not the
obligation), with reasonable prior notice to Tenant, or without notice in the case of an
emergency, to shut off water, gas, electricity and any all other utilities and services whenever
such discontinuance is necessary to make repairs or alterations or to protect the Premises. In
no event shall Landlord be liable for the quality, quantity, failure or interruption of any such
utilities or services to the Premises. In addition, any such failure, interruption or impairment
shall not be construed as an eviction of Tenant or a disturbance of Tenant's possession, and
Tenant shall not be entitled to any abatement of rent.
ARTICLE 9
INSURANCE
9.1 General. Tenant shall, at its expense, maintain in effect from and after
the Term Commencement Date and continuously thereafter until the termination or expiration
of this Lease, the policies of insurance required under this Article. All policies that Tenant is
required to obtain under this Article shall be issued by companies licensed to do business in
California with a general policyholder's rating of not less than "A-" and a financing rating of not
less than Class "VIII", as rated by the most current available "Best's" Insurance Reports and
shall be in a form (without any additions or deletions unless approved in writing by Landlord)
and underwritten by companies acceptable to Landlord. On or before the Term
Commencement Date, Tenant shall furnish Landlord with certificates and endorsements in a
form acceptable to Landlord evidencing that (i) the policies (or a binder thereof) required
pursuant to this Article are in effect and (ii) Landlord shall be notified in writing thirty {30) days
prior to cancellation, material change, or nonrenewal of such insurance (or if Tenant's
insurance carrier will not agree to provide notice of cancellation, material change, or
nonrenewal to any additional insured or other entity, then Tenant shall deliver such notice to
Landlord thirty {30) days prior to any cancellation, material change, or nonrenewal initiated by
Tenant, or twenty {20) days prior to such cancellation, material change or nonrenewal not
initiated by Tenant). The policies that Tenant is required to obtain pursuant to this Article shall
name Landlord, and any other parties requested by Landlord in accordance with commercially
reasonable practices, as additional insureds, or as loss payee (as applicable) for property in
which Landlord has an insurable interest and shall be primary policies, and shall not be
contributing with and shall be in excess of coverage which Landlord may have and shall be
unaffected by any insurance or self-insurance Landlord may have regardless of whether any
other insurance names Landlord as an insured or whether such insurance stands primary or
secondary. If Tenant carries any of the insurance required hereunder in the form of a blanket
policy, any certificate required hereunder shall make specific reference to the Premises. The
procuring of policies of insurance shall not be construed to limit Tenant's liability hereunder in
any way, nor to fulfill the indemnification provisions and requirements of this Lease. Tenant
agrees not to use the Premises in any manner, other than the Permitted Use generally, that will
result in the cancellation of any insurance Landlord may have on the Premises, or on adjacent
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Attachment A
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 cost and expense, comply with any and all requirements, in
regard to Premises, of any insurance organization necessary for maintaining fire and other
insurance coverage at reasonable cost.
9.2 Commercial General Liability Insurance. Tenant shall obtain and keep in
force a policy or policies of commercial general liability insurance covering the Premises and the
business operations thereon, including contractual liability, personal injury and property
liability coverage in amounts not less than a combined single limit of $2,000,000 per occurrence
for bodily injury, personal injury, death and property damage liability. If the submitted policies
contain aggregate limits, general aggregate limits will apply separately under this Lease or the
general aggregate will be twice the required per occurrence limits. Liability coverage for the
required limits may be obtained with a combination of commercial general liability insurance
and an umbrella policy. Such policy or policies shall include liquor liability coverage in the same
limits and under the same conditions as Tenant's general liability insurance, if the sale of
alcoholic beverages is permitted in the Premises.
9.3 Property and Extended Coverage Insurance. Tenant shall obtain and
keep in force a Causes of Loss -Special Form property insurance policy (formerly known as "all
risks"), including vandalism, malicious mischief, and sprinkler leakage coverage, covering one
hundred percent (100%) of the replacement cost of the Premises, all Tenant's Property and any
and all Tenant's Work and Tenant Improvements made in or upon the Premises, with an
inflation rider or endorsement attached thereto and twelve (12) months' business income
(business interruption) insurance rider or endorsement attached thereto. Tenant shall keep in
force a policy of plate glass insurance covering all plate glass in the Premises in an amount
equal to the full replacement cost thereof. The deductibles on such policies shall not exceed
$10,000.00 per occurrence. The proceeds from any such insurance shall be used by Tenant for
the replacement of the Premises, personal property and trade fixtures as well as alterations and
utility installations.
9.4 Business Interruption. Tenant shall obtain and keep in force loss of
income and extra expense insurance in amounts as will reimburse Tenant for at least twelve
(12) months' direct and indirect loss of earnings attributable to all perils commonly insured
against by prudent tenants in the business of Tenant or attributable to prevention of access to
the Premises as a result of such perils.
9.5 Workers' Compensation Insurance. Tenant shall obtain and keep in
force workers' compensation and employer's liability insurance covering all employees of
Tenant engaged on or with respect to the Premises, affording applicable statutory limits for
workers' compensation coverage and at least $1,000,000.00 in limits for employer's liability
coverage.
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Attachment A
9.6 Automobile Insurance. Tenant shall obtain and keep in force
comprehensive automobile liability insurance with a combined single limit of at least
$1,000,000 per occurrence for claims arising out of any owned, non-owned or hired
automobiles.
9.7 Waiver of Subrogation. Notwithstanding anything to the contrary
contained herein, Landlord and Tenant hereby waive any rights each may have against the
other on account of any loss or damage occasioned to Landlord or Tenant, their respective
property, the Premises or its contents, arising from any risk to the extent covered by the
insurance required hereunder. The foregoing waiver shall also apply to any deductible, as if the
same were a part of the insurance recovery. The parties each, on behalf of their respective
insurance companies insuring the property of either Landlord or Tenant against any such loss,
waive any right of subrogation that it may have against Landlord or Tenant, as the case may be.
Each party shall obtain any special endorsements, if required by its insurer, whereby the insurer
waives its rights of subrogation against the other party. The foregoing waivers of subrogation
shall be operative only so long as available without invalidating either Landlord's or Tenant's
policy of insurance.
9.8 Coverage Changes. Notwithstanding any of the foregoing, Landlord shall
retain the right at any time to review the coverage, form, and amount of the insurance required
under this Lease. If, in the opinion of Landlord, the insurance provisions in this Lease do not
provide adequate protection for Landlord and/or for members of the public using the Premises,
Landlord may require Tenant to obtain insurance sufficient in coverage, form and amount to
provide adequate protection. Landlord's requirements shall be reasonable but shall be
designed to assure protection from and against the kind and extent of risk which exists at the
time a change in insurance is required. Landlord shall notify Tenant in writing of changes in the
insurance requirements, and Tenant shall deposit certificates/endorsements evidencing
acceptable insurance policies with Landlord incorporating such changes within thirty (30) days
after receipt of such notice.
ARTICLE 10
USE OF PREMISES
10.1 Permitted Use and Continuous Operation. Tenant shall actively and
continuously use, operate and occupy the Premises solely for the Permitted Use. No other use
shall be permitted without the prior express written consent of Landlord. Tenant shall identify
itself to the public in connection with such business under the Trade Name specified in Article 1
above and under no other name without Landlord's prior express written consent, which shall
not be unreasonably withheld. Notwithstanding anything to the contrary contained in this
Lease, with prior written notice to Landlord (except in emergency situations, when notice shall
be given as soon as reasonably possible), the Premises may be closed to the extent reasonably
necessary due to Force Majeure.
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Attachment A
10.2 Conduct of Business. Tenant shall conduct its business at all times in a
professional and businesslike manner consistent with reputable business standards and
practices.
10.3 Compliance with Laws; Nuisance. Tenant shall, at its sole expense and at
all times, comply fully with (i) all federal, state and municipal laws, including without limitation
all zoning and land use laws and ordinances, conditional use permit rules and orders and the
Liquor Licenses, now in force or which may hereafter apply to the Premises or which impose
any duty on Landlord or Tenant relating to the use or occupancy of the Premises (including but
not limited to the obligation (a) to obtain a conditional use permit, (b) to alter, maintain, repair
or restore any portion of the Premises to the extent required as a result of Tenant's use of the
Premises, or (c) to alter, maintain, repair or restore the portion of the Premises which Tenant is
responsible to maintain, repair or restore pursuant to this Lease); (ii) any declaration of
covenants, conditions and restrictions and easements encumbering the Premises; (iii) any
commercially reasonably rules and regulations prescribed by Landlord for the Premises ("Rules
and Regulations"); and (iv) any and all requirements and recommendations of any insurance
organization or company necessary for the maintenance of reasonable fire and public liability
insurance covering the Premises. Tenant shall not store, use or sell any article in or about the
Premises, nor permit any act, which would cause the premiums for insurance to significantly
increase or cause a cancellation of any policy upon the Premises or any loss of coverage under
any such policy. Tenant shall not occupy, suffer or permit the Premises or any part thereof to
be used for any illegal, immoral or dangerous purpose, or in any other way contrary to the law
or the rules or regulations of any public authority. Tenant shall not commit, or suffer to be
committed, any waste upon the Premises, or any public or private nuisance, or any other act or
thing which may disturb the quiet enjoyment of neighbors of the Premises. Tenant shall not
conduct or permit to be conducted any sale by auction in, upon or on the Premises.
10.4 Environmental Compliance. Tenant represents, warrants and covenants
to Landlord that: (a) Tenant and its agents, employees, contractors, affiliates, sublessees and
invitees (collectively, "Tenant Parties") shall at no time use, or permit the Premises to be used,
in violation of any federal, state or local law, ordinance or regulation relating to the
environmental conditions on, under or about the Premises, including, but not limited to, air
quality, soil and surface and subsurface water conditions; and (b) the Tenant Parties shall not
cause or permit any Hazardous Substance to be used, stored, spilled or released in, on, under or
about the Premises (except for supplies typically used in the ordinary course of the Permitted
Use in commercially reasonable amounts and in strict compliance with law) and shall promptly,
at Tenant's sole expense, take all investigatory and/or remedial action reasonably
recommended, whether or not formally ordered or required, for the cleanup of any
contamination of, and for the maintenance, security and/or monitoring of the Premises and
neighboring properties, that was caused or materially contributed to by any Tenant Party, or
pertaining to or involving any Hazardous Substance brought onto the Premises during the term
of this Lease, by or for any Tenant Party, or any third party. Tenant shall assume sole and full
responsibility and cost to remedy any such violations by any Tenant Parties and shall protect,
indemnify, defend and hold harmless Landlord from all actions (including, without limitation,
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Attachment A
remedial or enforcement actions of any kind, and administrative or judicial proceedings and
orders or judgments), costs, claims, damages (including, without limitation, punitive damages),
expenses (including, without limitation, attorneys', consultants' and experts' fees, court costs)
amounts paid in settlement, fines, forfeitures or other civil, administrative or criminal penalties,
injunctive or other relief, liabilities or losses in any way arising or resulting from a breach of this
paragraph. Upon expiration or earlier termination of this Lease, Tenant shall cause any
Hazardous Substance arising out of or related to the use or occupancy of the Premises by any
Tenant Party to be removed from the Premises and the Parcel and properly transported for use,
storage or disposal in accordance with all applicable laws, regulations and ordinances. The
term "Hazardous Substance" as used in this Lease shall mean any product, substance, or waste
whose presence, use, manufacture, disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Premises, is either: (i) potentially
injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated
or monitored by any government authority, or (iii) a basis for potential liability of Landlord to
any governmental agency or third party under any applicable statute or common law theory.
Hazardous Substances shall include, but not be limited to, asbestos, asbestos containing
material, the group of organic compounds known as polychlorinated biphenyls, as well as
substances defined as "hazardous substances" or "toxic substances" under State, local or
federal laws or regulations, as they be enacted or promulgated from time to time.
10.5 Landlord's Right of Entry. Landlord, at reasonable times, may go into the
Premises without any liability for the purposes of: (i) inspecting the Premises; (ii) inspecting the
performance by Tenant of the terms and conditions hereof; {iii) showing the Premises to
prospective tenants, purchasers, partners, or mortgagees; and (iv) posting notices for the
protection of Landlord on the Premises. Except in the case of an emergency, Landlord shall give
Tenant reasonable notice of any and all intended entries or inspections pursuant to this
Section.
10.6 Prohibition Against Discrimination. Tenant shall not discriminate against
or segregate any person or class of persons by reason of sex, color, race, religion or national
origin. If the use provided for in this Lease allows Tenant to offer accommodations or services
to the public, such accommodations or services shall be offered by Tenant to the public on fair
and reasonable terms.
ARTICLE 11
MAINTENANCE AND REPAIR OF PREMISES
11.1 Tenant's Inspection. Tenant accepts the Premises in its "AS IS" condition
as further provided in Section 2.2 above, and Tenant expressly waives all implied warranties
including implied warranties of merchantability and fitness, if any. Tenant hereby waives all
rights under Sections 1941 and 1942 of the California Civil Code, as amended or recodified from
time to time, or any similar provision, permitting Tenant to make repairs at the expense of
Landlord. Tenant represents and warrants that it has inspected and conducted tests and
studies of the Premises, and that it is familiar with the condition of the Premises. Tenant
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Attachment A
understands and acknowledges that the Premises may be subject to earthquake, fire, floods,
erosion, high water table, dangerous underground soil and water conditions and similar
occurrences that may alter its condition or affect its suitability for any proposed use. Landlord
shall have no responsibility or liability with respect to any such occurrence.
11.2 Tenant's Obligations. Except for Landlord's obligations as set forth in
Section 11.3 below, from and after the Term Commencement Date and continuously thereafter
until the expiration or termination of this Lease, Tenant, at Tenant's sole expense, shall
maintain the Premises in a neat, clean and sanitary condition and repair, and make any
necessary repairs and replacements to any portion of the Premises, including full responsibility
for: (a) maintenance, repair and replacement of the interior and exterior of the building
(including, without limitation, (i) any structural portions of the Premises to the extent affected
by Tenant's Work or any Tenant Improvements, and (i) any painting, plumbing, fixtures,
windows and glass, HVAC systems, custodial, flooring and appliances) throughout the Term to
maintain and preserve the Premises in a good, safe, healthy and sanitary condition satisfactory
to Landlord and in compliance with all applicable laws; and (b) keeping the Premises free and
clear of trash, garbage and other fire hazards. The maintenance, repair and replacement
obligations set forth in this paragraph are a material part of the consideration for this Lease.
11.3 Landlord's Obligations. From and after the Term Commencement Date
and continuously thereafter until the expiration or termination of this Lease, Landlord, at
Landlord's sole expense, shall keep in good order, condition and repair the foundations,
exterior walls and roof of the Premises, except for (a) any damage thereto caused by any
negligent act or omission of Tenant or its agents, contractors, subcontractors, employees or
invitees, (b) any such portions of the Premises to the extent affected by Tenant's Work or any
Tenant Improvements, and (c) any damage or destruction covered by insurance required to be
maintained by Tenant. Additionally, Landlord shall provide for maintenance and repair of all
landscaping, grounds, tree trimming obligations. All repairs to be performed by Landlord shall
be commenced and completed as soon as reasonably necessary after written notice from
Tenant to Landlord. In cases of emergency, Tenant shall endeavor to give as much notice to
Landlord as is reasonable under the circumstances.
11.4 Landlord's Cure. Landlord shall have the right but not the duty, to enter,
view, inspect, determine the condition of and protect its interests in, the Premises. If at any
time Landlord determines that the Premises are not in the condition required by this Lease,
then Tenant shall perform the necessary maintenance, repair and/or replacement work within
ten (10) days after written notice from Landlord. If Tenant fails to perform the necessary
maintenance, repair and/or replacement work within ten (10) days after written notice from
Landlord, then Landlord may, but is not obligated to, perform such obligations without liability
to Tenant for any loss to Tenant's business that might arise by reason thereof. Tenant shall
reimburse Landlord on demand in an amount equal to the cost incurred by landlord in the
performance of such obligations plus an administrative fee equal to ten percent {10%) of the
cost incurred by Landlord. landlord's rights reserved in this section shall not create any
obligations or increase any obligations for Landlord elsewhere in this Lease.
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ARTICLE 12
ALTERATIONS AND ADDITIONS
Attachment A
12.1 Tenant Improvements. Tenant shall not commence Tenant's Work or
make (i) any alterations, improvements, additions or utility installations, including without limit,
carpeting, floor or window coverings, locks, air lines, power panels, electrical distribution
systems, lighting fixtures, space heaters, air conditioning and plumbing in, on, or about the
Premises or (ii) any change or alteration to the exterior of the Premises (collectively "Tenant
Improvements") without Landlord's prior written consent, which shall not be unreasonably
withheld, conditioned or delayed. If Tenant makes any Tenant Improvements or commences
Tenant's Work without the prior written approval of Landlord, Landlord shall have the right to
require that Tenant remove any or all of such Tenant Improvements or Tenant's Work and
repair and any restore damage to the Premises caused by such removal at Tenant's sole
expense and shall also have the right to declare Tenant in default and to terminate this Lease.
Tenant's Work and any Tenant Improvements shall at all times comply fully with all applicable
federal, state and municipal laws, ordinances, regulations, codes and other governmental
requirements now or hereafter in force and Tenant shall, at Tenant's sole cost and expense,
take all actions now or hereafter necessary to ensure such compliance.
Tenant shall provide Landlord with a written request for approval of Tenant's
Work or any Tenant Improvements that Tenant would like to make with proposed detailed
plans, if applicable in light of proposed work. Landlord shall have the right to condition
Landlord's prior written consent upon Tenant's: (i) obtaining a building permit (if necessary)
and complying with all building and planning laws and regulations for Tenant's Work or the
Tenant Improvements from appropriate governmental agencies; (ii) furnishing a copy of such
building permit and evidence of such compliance to Landlord prior to the commencement of
such work; (iii) complying with all the conditions of such building permit and such building and
planning laws and regulations; (iv) providing Landlord with plans and specifications for Tenant's
Work or the Tenant Improvements (if reasonable in light of the nature of the proposed work)
for Landlord's prior written approval; (v) providing Landlord with a copy of the construction
contract, construction schedule, trade payment breakdown and list of subcontractors and
suppliers for Landlord's prior written approval; (vi) obtaining a builder's "all risk" insurance
policy in an amount and issued by insurance company acceptable to Landlord, naming Landlord
as an additional insured and otherwise satisfying the requirements of Article 9 above; and/or
(vii) providing Landlord with at least ten (10) days written notice prior to commencing any such
work. In its capacity as a landlord (and not as the approving agency), Landlord's approval of the
plans, specifications and working drawings for Tenant's Work or any Tenant Improvements shall
create no responsibility or liability on the part of Landlord for their completeness, design
sufficiency, or compliance with all laws, rules and regulations of governmental agencies or
authorities. Landlord shall not be liable for any damage, loss, or prejudice suffered or claimed
by Tenant, its agents or any other person or entity on account of: (a) the approval or
disapproval of any plans, contracts, bonds, contractors, sureties or matters by Landlord in its
capacity as a landlord (and not as the approving agency); (b) the construction or performance
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Attachment A
of any work whether or not pursuant to approved plans; (c) the improvement of any portion of
the Premises or alteration or modification to any portion of the Premises; or (d) the
enforcement or failure to enforce any of the covenants, conditions and restrictions contained in
this Lease. Under no circumstances shall Tenant make any roof penetrations without the prior
written consent of Landlord. Any consent of Landlord shall be conditioned upon Landlord's
review and approval of plans satisfactory to Landlord for the repair of the roof. Any roof
penetrations may be inspected by Landlord's roofing contractor, and Tenant shall reimburse
Landlord for the cost of such inspection and any necessary repair work within ten (10) days
after Tenant's receipt of an invoice therefor.
12.2 Construction of Tenant Improvements; Liens. Tenant shall pay when
due all claims for labor or materials furnished or alleged to have been furnished to or for
Tenant at, on, or for use in the Premises, and shall defend, indemnify, protect and hold
harmless the Premises and Landlord against the same (including, without limitation, the costs
of defending against such claims, and reasonable attorney's fees incurred therein). Tenant shall
keep the Premises and any interest therein, free and clear of all mechanics' liens and all other
liens. Tenant shall give Landlord immediate written notice of any lien filed against the Premises
or any interest therein related to or arising from work performed by or for Tenant. Tenant shall
give Landlord not less than ten (10) days' prior written notice of the commencement of
Tenant's Work or any Tenant Improvements in the Premises, and Landlord shall have the right
to post notices of nonresponsibility in or upon the Premises as provided by law. If any lien or
levy of any nature whatsoever is filed against the Premises or Tenant's leasehold interest, then
upon Landlord's request, Tenant shall furnish to Landlord a corporate surety bond, satisfactory
to Landlord, in an amount equal to one and one-half (1 ½) times the amount of the claims upon
which such lien or levy has been filed. Such bond shall be acknowledged by Tenant as principal
and by a corporation, licensed by the Insurance Commissioner of the State of California to
transact the business of a fidelity and surety insurance company, as surety. Landlord shall have
the right to declare this Lease in default in the event the bond required by this paragraph has
not been deposited with Landlord within ten (10) days after written request has been delivered
to Tenant.
12.3 Title to Tenant Improvements. Subject to Section 13.1 below, upon the
expiration or earlier termination of this Lease, any and all Tenant's Work and Tenant
Improvements which may be made in or upon the Premises shall become the property of
Landlord and remain upon and be surrendered with the Premises at the expiration of the Term
without compensation to Tenant unless Landlord requires that Tenant remove the Tenant's
Work and/or the Tenant Improvements pursuant to Article 13 below.
12.4 Signs. Tenant shall be responsible for purchasing, installing and
maintaining, at Tenant's sole cost, exterior signage in accordance with the signage regulations
set forth by the City of Carlsbad and any other sign criteria provided by Landlord (collectively,
"Sign Criteria") and which has received Landlord's prior written consent. In accordance with
the Sign Criteria, Tenant shall maintain such signage in good condition and repair during the
entire Term of this Lease. Tenant shall repair, at its sole cost and expense, any damage to the
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Attachment A
Premises caused by the erection, maintenance or removal of any sign, marquee, banner,
awning, decoration or other attachment.
12.5 Compliance with Prevailing Wage Laws. Tenant acknowledges and
agrees that: (a) any construction, alteration, demolition, installation or repair work performed
under this Lease constitutes "public work" under California Prevailing Wage Law, including
Labor Code sections 1720 through 1815, et seq. (the "PWL"), and will obligate Tenant to cause
such work to be performed as a "public work," including, but not limited to, the payment of
applicable prevailing wages to the all persons or entities subject to the PWL; (b) Tenant shall
cause all persons and/ or entities performing "public work" under this Lease to comply with all
applicable provisions of the PWL; (c) in no event shall Landlord be responsible for Tenant's
failure to comply with any applicable provisions of the PWL; (d) Tenant's alleged or actual
violations of the PWL shall constitute an event of default under this Lease, and (e) Tenant shall
defend and indemnify Landlord and its officers, employees, council members and agents from
and against any and all claims, assessments, back-wages, penalties, change orders, suits,
liability, judgments, damages, proceedings, orders, directives and costs, including reasonable
attorneys' fees, arising from or relating to any actual or alleged violations of the PWL, or other
application of laws, ordinances or regulations, by any person or entity, including but not limited
to Tenant, performing construction, alteration, demolition, installation, repair and/ or any other
type of work contemplated under this Lease.
ARTICLE 13
TENANT'S PROPERTY
13.1 Tenant's Property. All trade fixtures, goods, inventory, merchandise,
stock, supplies, decorative light fixtures, and movable equipment owned by Tenant and
installed in the Premises at Tenant's sole cost and which may be removed without material
damage to the Premises ("Tenant's Property") shall remain the property of Tenant during the
Term. Except as provided to the contrary in Section 12.3 above, Tenant's Property shall be
removable from time to time and at the expiration of the Term or earlier termination thereof,
provided that: (i) Tenant shall not at such time be in default, or with notice or the passage of
time or both would be in default, under any term, covenant, condition or provision of this
Lease; (ii) Tenant shall repair to the satisfaction of Landlord, any damage to the Premises
caused by the removal of Tenant's Property; and (iii) Tenant immediately replaces any such
Tenant's Property with similar property of comparable or better quality to assure that the
Premises are suitable for conducting business during the Term in accordance with Articles 5 and
10 hereof.
13.2 Landlord's Lien. Subject to the rights of Tenant, if any, under
Section 9102(4) of the California Uniform Commercial Code, as amended or recodified from
time to time, Tenant hereby grants to Landlord a security interest in and lien upon Tenant's
Property and the proceeds thereof as security for Tenant's performance of all the terms,
covenants, conditions, provisions and obligations under this Lease. Upon Landlord's request,
Tenant shall execute a security agreement, UCC-1 financing statement, continuation statement
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Attachment A
and such other documents as Landlord may reasonably require to evidence, create, protect,
perfect and preserve the validity and priority of Landlord's lien upon and security interest in
Tenant's Property.
ARTICLE 14
DAMAGE AND DESTRUCTION
14.1 Repairs by Tenant. If the Premises are totally or partially damaged or
destroyed, Tenant shall, within ninety (90) days, commence and diligently pursue to completion
the repair, replacement or reconstruction of the Premises, and of all Tenant's Property,
Tenant's Work and Tenant Improvements to the extent necessary to permit full use and
occupancy of the Premises for the purposes provided in this Lease. Repair, replacement or
reconstruction of the Premises shall be accomplished in a manner and according to plans
approved by Landlord; provided, however, Tenant shall not be obligated to repair, reconstruct
or replace the improvements following their destruction in whole or substantial part except to
the extent the loss is covered by insurance required to be carried by Tenant pursuant to this
Lease (or would be covered whether or not such required insurance is actually in effect), and
except if Tenant is required to indemnify Landlord for such destruction pursuant to Section 16.
If Tenant is not obligated and elects not to restore, repair or reconstruct as herein provided,
then this Lease shall terminate and neither party shall have any further obligation to the other,
except for Tenant's obligation to pay rent and other charges which are accrued and unpaid as
of the termination date and other provisions that survive the termination of this Lease. Tenant
hereby waives California Civil Code Sections 1932 and 1933, as amended or recodified from
time to time.
14.2 Termination Right. If the destruction to the Premises occurs during the
last twelve (12) months of the Term and such destruction will require more than ninety (90)
days to repair, then Tenant may elect to terminate this Lease provided that: (i) Tenant provides
written notice to Landlord of such election to terminate within thirty (30) days after occurrence
of the destruction; (ii) at the time of delivery of the termination notice Tenant is not in default
under this Lease beyond any applicable notice and cure period; (iii) Tenant did not intentionally
cause such destruction; (iv) all insurance required of Tenant under this Lease was in effect as of
the date the destruction occurred and Tenant assigns to Landlord all claims rights and proceeds
relating to the applicable destruction.
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ARTICLE 15
EMINENT DOMAIN
Attachment A
15.1 Total or Substantial Taking. If all of the Premises are taken under the
power of eminent domain or such a substantial portion thereof is so taken that reasonable
restoration will not result in the Premises being reasonably suitable for the conduct of Tenant's
business, this Lease shall terminate on the date that Tenant is required to yield possession to
the condemning authority, or on the date that the possession of the Premises or part thereof is
taken, whichever is later. The term "eminent domain" shall include the exercise of any
governmental power of condemnation and any private sale or other transfer in lieu of or under
threat of condemnation.
15.2 Partial Taking. If there is a partial taking of the Premises, and after
restoration of any building or other improvements, the Premises would be reasonably suitable
for Tenant's continued occupancy and conduct of its business, then: (i) this Lease shall
terminate as to the part taken as of the date of transfer of possession; (ii) rent shall be
equitably reduced; and (iii) Landlord shall, at its own cost and expense, make all necessary
repairs or alterations to the Premises required to restore the Premises to useful condition.
During such repair or restoration, rent shall be equitably abated as set forth above.
Notwithstanding the foregoing, Landlord, at its sole option, may elect to terminate this Lease by
delivering written notice to Tenant within thirty (30) days after any such partial taking, in lieu of
restoring the Premises to useful condition as provided above, unless Tenant agrees to perform
all such restoration work at Tenant's sole cost. Tenant hereby waives any statutory rights of
termination that may arise by reason of any taking of the Premises under the power of eminent
domain.
15.3 Award. Tenant hereby renounces any interest in, and assigns to
Landlord, any award made in any condemnation proceeding for any such taking, provided that
Landlord shall have no interest in or be assigned any award made to Tenant for the taking of
Tenant's Property or for Tenant's relocation expenses. Tenant hereby specifically waives any
right it may have to any compensation award representing the excess of the market value,
immediately before the taking, of Tenant's leasehold interest in the portion of the Premises
taken over the rent attributable thereto under the terms of this Lease.
ARTICLE 16
INDEMNIFICATION
Tenant covenants and agrees to indemnify, protect, defend and hold harmless
Landlord and its agents, employees, officers, affiliates and representatives (collectively,
"Landlord Parties") from and against any and all losses, claims, demands, damages (but not
consequential damages unless awarded in favor of a third party), liabilities, actions, judgments,
costs and expenses (including, without limitation, reasonable attorneys' fees) arising out of or
resulting from (a) the negligent or willful acts or omissions of Tenant, its agents, contractors,
subcontractors or employees, (b) any breach of any obligation, covenant, representation or
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Attachment A
warranty of Tenant under this Lease; or (c) the use and operation of the Premises during the
Term. The foregoing shall not apply to any loss, claim, damage, liability, action, judgment, cost
or expense to the extent arising out of or resulting from any negligence or willful misconduct of
any Landlord Party. Tenant's obligations under this section shall survive the expiration or
termination of this Lease.
ARTICLE 17
DEFAULTS AND REMEDIES
17.1 Events of Default. The occurrence of any of the following events shall
constitute an event of default and a material breach of this Lease on the part of Tenant:
A. Abandonment or Failure to Continuously Operate. Tenant's
vacation or abandonment of the Premises or Tenant's failure to actively and continuously use,
operate and occupy the Premises.
B. Failure to Make Payment. Tenant's failure to pay any rent or
other sum due hereunder on the date when such payment is due, where such failure continues
for five (S) days after written notice of such failure from Landlord, or Tenant's failure on three
(3) occasions during any twelve (12) month period to timely pay rent on or before the due date
as provided for herein (even though subsequently cured).
C. Non-Permitted Use. Tenant's failure to comply with any
provision of this Lease relating to the Permitted Use, where such failure continues for ten (10)
days after written notice of such failure from Landlord.
D. Failure to Perform Other Covenants. Tenant's failure to perform
any of Tenant's other covenants, agreements or obligations hereunder, where such failure
continues for thirty (30) days after written notice of such failure from Landlord (provided,
however, if the nature of such default is such that the same cannot be reasonably cured within
a thirty (30) day period, Tenant shall not be deemed to be in default if Tenant diligently
commences such cure within such period and thereafter diligently proceeds to rectify and cure
said default), except if a different notice or cure period is specified in another provision of this
Lease.
E. Bankruptcy. The making of a general assignment for the benefit
of creditors by Tenant, or the filing of a voluntary or involuntary bankruptcy petition by or
against Tenant, or the appointment of a receiver to take possession of all or substantially all of
Tenant's assets or the Premises, or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets or the Premises, or in the event Tenant becomes insolvent or
fails to generally pay Tenant's debts as such debts become due.
F. Transfer without Consent. The occurrence of any Transfer
without Landlord's express prior written consent.
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Attachment A
17.2 Remedies. Upon the occurrence of an event of default by Tenant as set
forth in Section 17.1 above, Landlord shall have the following rights and remedies, in addition
to any and all other rights and remedies available to Landlord at law or in equity, including
without limit those provided under California Civil Code Sections 1951.2 and 1951.4, as
amended or recodified from time to time:
A. Terminate Lease. Landlord shall have the right to terminate this
Lease and all rights of Tenant hereunder by giving written notice to Tenant. If this Lease is so
terminated, then Landlord may recover from Tenant: (i} the worth at the time of award of any
unpaid rent that had been earned at the time of such termination; ~ (ii} the worth at the
time of award of the amount by which the unpaid rent which would have been earned from the
time of such termination until the time of award exceeds the amount of such rental loss Tenant
proves could have been reasonably avoided; ~ (iii} the worth at the time of award of the
amount by which the unpaid rent for the balance of the Term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably avoided; ~ (iv} any
other amount necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which in the ordinary course of
events would be likely to result therefrom, plus interest thereon at the Remedy Rate from the
date incurred by Landlord until reimbursed in full. As used in Subsections (A}(i} and (ii} above,
the "worth at the time of award" is computed by allowing interest at the Remedy Rate. As used
in Subsection (A}(iii} above, the "worth at the time of award" is computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%}. All amounts owing under this Subsection which are not paid when due
shall bear interest at the Remedy Rate from the date owing until paid and such interest shall be
compounded monthly.
B. Reenter Premises. Landlord shall also have the right, with or
without terminating this Lease, to reenter the Premises and to remove all persons and Tenant's
Property from the Premises and store the Tenant's Property in a public warehouse or
elsewhere at the cost of and for the account of Tenant.
C. Maintain Lease; Relet Premises. Landlord shall have the remedy
described in California Civil Code Section 1951.4 (lessor may continue lease in effect after
Tenant's breach and abandonment and recover rent as it becomes due, if Tenant has the right
to sublet or assign, subject only to reasonable limitations}. Unless Landlord elects to terminate
this Lease as provided in Section 17.2(A} above, Landlord may from time to time, without
terminating this Lease, either recover all rent as it becomes due or relet the Premises or any
part thereof for such term or terms and at such rental or rentals and upon such other terms
and conditions as Landlord in its sole discretion may deem advisable, with the right to clean and
to make alterations and repairs to the Premises at Tenant's sole expense.
If Landlord elects to relet as provided herein, then rent received by Landlord
from such reletting shall be applied at Landlord's option: first, to the payment of any
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Attachment A
indebtedness other than rent due hereunder from Tenant to Landlord; second, to the payment
of any cost of such reletting (including reasonable attorneys' fees, tenant improvements
customary to make the Premises ready to lease [including the removal of any specialized
improvements installed by Tenant], court costs and brokerage commissions); third, to the
payment of the cost of any cleaning, alterations and repairs to the Premises; fourth, to the
payment of rent due and unpaid hereunder; and the balance, if any, shall be applied in
payment of future rent as the same may become due and payable hereunder. If the portion of
such rentals received from such reletting during any month which is applied to the payment of
rent under the reletting lease is less than the rent payable during that month by Tenant
hereunder, then Tenant shall pay any such deficiency to Landlord immediately upon demand by
Landlord. Such deficiency shall be calculated monthly and Tenant shall pay such deficiency
monthly. Tenant shall also pay to Landlord, upon Landlord's demand, the costs and expenses
incurred by Landlord in such reletting, including reasonable attorneys' fees, court costs, tenant
improvements customary to make the Premises ready to lease (including the removal of any
specialized improvements installed by Tenant) and brokerage commissions and in making any
alterations and repairs to the Premises.
No reentry, acts of maintenance or preservation, efforts to relet, or taking
possession of the Premises by Landlord or the appointment of a receiver upon initiative of
Landlord to protect Landlord's interest under this Lease shall be construed as an election to
terminate this Lease unless an express written notice of such intention is delivered to Tenant or
unless the termination thereof is decreed by a court of competent jurisdiction.
Notwithstanding any reletting of the Premises without termination of this Lease by Landlord,
Landlord may at any time after such reletting elect to terminate this Lease, in which case,
Landlord shall have all the rights and remedies provided by law or equity or this Lease upon
termination.
D. Performance by Landlord. If Tenant breaches or fails to perform
any of Tenant's obligations under this Lease and the breach or failure continues for thirty (30)
days (or such shorter time period as may be specified otherwise in this Lease) after Landlord
gives Tenant written notice of the breach or failure, Landlord, without thereby waiving or
curing such may, but shall not be obligated to, perform any such obligation for the account and
at the expense of Tenant. Landlord also may, but shall not be obligated to, perform any such
obligation for the account and at the expense of Tenant without notice in case of an
emergency.
E. Receiver on Behalf of Landlord. If, at the instance of Landlord in
any action arising under this Lease, a receiver shall be appointed to take possession of the
Premises or to collect the rents derived therefrom, then the receiver may, if it shall be
necessary or convenient in order to collect such rents, conduct the business of Tenant then
being carried on in the Premises, and may take possession of any Tenant's Property and other
personal property and records used in Tenant's business and use the same in conducting such
business, without compensation to Tenant for such use. Neither application for, nor the
appointment of a receiver shall be construed as an election by Landlord to terminate this Lease,
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Attachment A
unless express written notice of such election is given to Tenant. The fees and expenses of such
receiver shall be charged to Tenant as Additional Rent.
17.3 Late Charges. Landlord and Tenant agree that the fixing of actual
damages for Tenant's breach of any of the provisions of this Lease, including but not limited to
the late payment by Tenant to Landlord of rent and other amounts due hereunder, would cause
Landlord to incur costs not contemplated by this Lease, the exact amount of which would be
extremely difficult or impracticable to ascertain. Such costs include but are not limited to
accounting, processing, administrative, legal and clerical charges and late charges which may be
imposed upon Landlord by the terms of any Mortgage covering the Premises. Accordingly, if
any installment of rent or any other sum due from Tenant hereunder has not been received by
Landlord or Landlord's agent within ten (10) days after such amount was due, Tenant shall pay
to Landlord a late charge equal to five percent (5%) of any such delinquent installment of rent
or any other delinquent sum due from Tenant. Tenant hereby agrees that said late charge
represents a fair and reasonable estimate of the cost Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall not constitute a waiver of
Tenant's default with respect to such overdue amount nor prevent Landlord from exercising
any other rights and remedies provided for in this Lease, at law or in equity. If a late charge is
payable by Tenant whether or not collected, for three (3) installments of rent during any twelve
(12) month period, then the Base Rent shall automatically become due and payable to Landlord
quarterly in advance, notwithstanding any other provision of this Lease to the contrary.
17.4 Interest on Past Due Obligations. Any and all amounts not paid to
Landlord when due, shall bear interest, compounded monthly from the date due until paid at
the rate of ten percent (10%) per annum. Payment of such interest shall not excuse or cure any
default by Tenant under this Lease and shall not affect any rights and remedies provided to
Landlord in this Lease or at law or in equity, all of which shall be cumulative. Notwithstanding
the foregoing, the City Manager of the City of Carlsbad shall have the right, in its sole discretion,
to waive for good cause any interest payment upon written application of Tenant for any such
delinquency period.
17.5 Waiver of Redemption. Tenant hereby expressly waives any and all
rights of redemption granted by or under any present or future laws in the event of Tenant
being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of
the Premises by reason of the violation by Tenant of any of the covenants and conditions of this
Lease or otherwise. The rights given to Landlord herein are in addition to any rights that may
be given to Landlord by any statute or otherwise.
17.6 Guaranty. Landlord's obligations under this Lease are conditioned upon
Landlord's receipt of a guaranty of Tenant's obligations under this Lease in the form attached
hereto as Exhibit E (the "Guaranty'') executed by the Guarantor identified in Article 1 above,
and if Guarantor is married, with the "Spousal Consent" executed by Guarantor's spouse.
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Attachment A
17.7 Landlord's Default. Landlord shall in no event be charged with default in
the performance of any of its obligations hereunder unless and until Landlord shall have failed
to perform such obligations and such failure continues for more than thirty (30) days (or such
additional time as is reasonably necessary to correct any such failure) after Landlord's receipt of
written notice of such failure from Tenant.
ARTICLE 18
SUBORDINATION AND ATTORNMENT
18.1 Subordination. This Lease is and shall be subordinate to any ground
lease, mortgage, deed of trust and/or any other hypothecation or security document and
advances and obligations thereunder now or hereafter placed upon the Premises, and any
renewals, modifications, consolidations, replacements and extensions thereof (collectively
"Mortgage"). Upon the request of Landlord, Tenant shall, from time to time, execute and
deliver any documents that may be required by Landlord or the mortgagee, beneficiary, ground
lessor or lender (each a "Landlord's Lender") under any such Mortgage, to effectuate any
subordination, provided that any such Landlord's Lender agrees not to disturb Tenant's right to
quiet possession under this Lease so long as Tenant is not in default (or with notice or passage
of time or both would not be in default) under this Lease. If Tenant fails to execute and deliver
any such document within ten (10) days after request, Tenant irrevocably constitutes and
appoints Landlord as Tenant's special attorney-in-fact, coupled with an interest, to execute and
deliver such document. Notwithstanding the foregoing, if Landlord's Lender elects to have this
Lease prior to the lien of its Mortgage, and gives written notice to Tenant of such election, this
Lease shall be deemed prior to such Mortgage regardless of the respective dates of execution,
delivery and recordation of this Lease and any such Mortgage.
18.2 Attornment. In the event that Landlord transfers title to the Premises to
a Landlord's Lender, or the Premises are acquired by a Landlord's Lender upon the foreclosure
or termination of a Mortgage to which this Lease is subordinated, Tenant shall attorn to and
recognize the Landlord's Lender as Tenant's landlord under this Lease and shall promptly
execute and deliver any documents that Landlord may require to evidence such attornment,
provided that Landlord's Lender agrees not to disturb Tenant's right to quiet possession under
this Lease so long as Tenant is not in default (or with notice or passage of time or both would
not be in default) under this Lease. If Tenant fails to execute and deliver any such document
within ten (10) days after request, Tenant irrevocably constitutes and appoints Landlord as
Tenant's special attorney-in-fact, coupled with an interest, to execute and deliver such
document.
18.3 Estoppel Certificate. Upon the request of Landlord, Tenant at any time
and from time to time shall execute, acknowledge, and deliver to Landlord, no later than ten
(10) business days after Landlord's request therefor, an estoppel certificate in any reasonable
form requested by Landlord ("Estoppel Certificate"). The Estoppel Certificate may be
conclusively relied upon by a prospective lender, purchaser, or encumbrancer of Landlord's
interest in the Premises. Failure to deliver the Estoppel Certificate within ten (10) days of such
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Attachment A
request shall be conclusive upon Tenant that: (i) this Lease is in full force and effect; (ii) there
are no uncured defaults in Landlord's or Tenant's performance; (iii) not more than one month's
Base Rent has been paid in advance; and (iv) the Security Deposit is in an amount equal to that
specified in Article 1 hereof. Tenant hereby irrevocably appoints Landlord as its attorney-in-
tact, which agency is coupled with an interest, to execute any such Estoppel Certificate upon
Tenant's failure to do so within such ten (10) day period.
18.4 Rights of Landlord's Lender and Landlord's Purchaser. If any Landlord's
Lender or any purchaser of Landlord's interest in the Premises ("Landlord's Purchaser")
requires a modification of this Lease at any time, Tenant shall, at Landlord's request, promptly
execute and deliver to Landlord instruments effecting the modifications that the Landlord's
Lender or Landlord's Purchaser reasonably requires, provided that such modifications do not
increase the rent, reduce the size of the Premises or otherwise adversely affect in any material
respect any of Tenant's rights under this Lease. If Landlord's Lender or Landlord's Purchaser
has given prior written notice to Tenant that it is the Landlord's Lender or Landlord's Purchaser
and such notice includes the address at which notices to such Landlord's Lender or Landlord's
Purchaser are to be sent, then Tenant shall give Landlord's Lender or Landlord's Purchaser, as
the case may be, written notice simultaneously with any notice given to Landlord to correct any
failure of Landlord to perform any of Landlord's obligations. Landlord's Lender and Landlord's
Purchaser shall have the right after receipt of said written notice to correct or remedy such
failure within a reasonable period of time. Any written notice of default given Landlord shall be
null and void unless simultaneous written notice has been given to Landlord's Lender and
Landlord's Purchaser.
18.5 Limitation of Liability. The covenants and agreements of Landlord under
this Lease shall not be binding upon any person at any time after the transfer of that person's
interest, as landlord, in the Premises. In the event of such a transfer, the covenants and
agreements of Landlord shall thereafter be binding upon the transferee of Landlord's interest.
ARTICLE 19
FORCE MAJEURE
If either party hereto shall be delayed in or prevented from the performance of
any act required hereunder by reason of acts of God, labor troubles, inability to procure
materials, restrictive governmental laws or regulations or other causes without fault and
beyond the control of the party obligated (financial inability excepted) (collectively, "Force
Majeure"), performance of such act shall be excused for the period of the delay and the period
for the performance of any such act shall be extended for a period equivalent to the period of
such delay; provided, however, nothing in this Section shall delay the Rent Commencement
Date or excuse Tenant from the prompt payment of any rent or other charge required of
Tenant hereunder, except as may be expressly provided elsewhere in this Lease.
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ARTICLE 20
ASSIGNMENT AND SUBLETTING
Attachment A
20.1 Landlord's Consent. Tenant shall not voluntarily, involuntarily or by
operation of law assign, mortgage, sublet, hypothecate or otherwise transfer or encumber all or
any part of Tenant's interest in this Lease or in the Premises, or contract for the management or
operation of the whole or any part of the Premises, or permit the occupancy of any part of the
Premises by any other person or business entity, or permit transfer of this Lease by merger,
consolidation or dissolution {collectively "Transfer"), without first obtaining Landlord's express
written consent. No consent to any Transfer shall constitute a waiver of the provisions of this
Section. If Tenant is a partnership or limited liability company, a withdrawal or change,
voluntary, involuntary, or by operation of law, of any general partner or managing member or
of twenty-five percent (25%} or more of the partnership or membership interest, or the
dissolution of the partnership or limited liability company, shall be deemed a Transfer requiring
Landlord's consent. If Tenant consists of more than one person or entity, a purported
assignment, voluntary, involuntary, or by operation of law, from one person to the other shall
be deemed a Transfer requiring Landlord's consent. If Tenant is a corporation, any dissolution,
merger, consolidation, or other reorganization of Tenant, or the sale or other transfer of
twenty-five percent (25%) or more of the capital stock of Tenant or the value of the assets of
Tenant, shall be deemed a Transfer requiring Landlord's consent. Landlord and Tenant agree
(by way of example and without limitation) that it shall be reasonable for Landlord to withhold
its consent to a Transfer if any of the following situations exist or may exist: {i) the proposed
Transferee's (as defined below) use of the Premises conflicts with or is different from the
Permitted Use; {ii) the proposed Transferee or its business is subject to compliance with
additional requirements of law beyond those requirements which are applicable to Tenant; {iii)
in Landlord's reasonable business judgment, the proposed Transferee lacks sufficient business
reputation or experience to operate a successful business of the type and quality permitted
under this Lease; (iv) Tenant is in default under this Lease; or {v) the then present net worth of
the proposed Transferee is less than the greater of Tenant's net worth as of the date of this
Lease or Tenant's net worth at the date of Tenant's request for consent.
Any attempted or purported Transfer without Landlord's prior written consent
shall be void and of no force or effect, and shall not confer any estate or benefit on anyone. A
consent to one Transfer by Landlord shall not be deemed to be a consent to any subsequent
Transfer to any other party.
20.2 Request for Transfer. Tenant shall give Landlord at least sixty (60) days'
prior written notice of any requested Transfer and of the proposed terms of such Transfer
("Transfer Notice"), including but not limited to: (i) the name and legal composition of the
proposed assignee, sublessee, encumbrancer or transferee ("Transferee"); (ii) a current
financial statement of the proposed Transferee prepared in accordance with generally accepted
accounting principles consistently applied; {iii) the portion of the Premises Tenant proposes to
Transfer (including square footage and location); and (iv) the nature of the proposed
Transferee's business to be carried on in the Premises. The foregoing terms shall be in
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Attachment A
sufficient detail to enable Landlord to evaluate the proposed Transfer and the prospective
Transferee. Within thirty (30) days after receipt of the Transfer Notice, Landlord shall either
approve or disapprove of such Transfer. Tenant shall immediately notify Landlord of any
modification to the proposed terms of such Transfer. Tenant shall also provide to Landlord
copies of the fully executed documents pertaining to the Transfer after the Transfer has
become effective. Whether or not Landlord consents to any proposed Transfer, Tenant shall
pay Landlord's review and processing fee in the amount of $500.00, as well as any reasonable
legal fees incurred by Landlord, within thirty (30) days after written request by Landlord.
20.3 Landlord's Rights. Upon receipt of a Transfer Notice pursuant to
Section 20.2 above, Landlord shall have the right to: (i) withhold its consent to such Transfer, as
permitted pursuant to Section 20.1 above; (ii) terminate this Lease as it relates to the portion of
the Premises described in the Transfer Notice and recapture such portion of the Premises,
effective automatically as of the date of dispatch of a notice of termination from Landlord to
Tenant, which notice may be sent at any time within thirty (30) days following Landlord's
refusal to consent to the Transfer; (iii) sublet or receive an assignment of all or a portion of the
Premises from Tenant at the lower of the rental specified in this Lease or in Tenant's Notice; or
(iv) impose any of the following as conditions to Landlord's consent: (a) that all rents paid by
the Transferee to Tenant in excess of the Base Rent be paid to Landlord; or (b) that an
acceptable guaranty of this Lease be provided to Landlord; or (c) that either Tenant or the
proposed Transferee cure, on or before the proposed effective date of such Transfer, any and
all uncured defaults hereunder; provided, however, in no event shall Landlord's failure to
condition its consent upon such cure be deemed to be a waiver of any such default or of
Landlord's rights and remedies under this Lease or under law or in equity in regard thereto. If
Landlord has elected to impose such a cure as a condition to its consent and such condition is
not satisfied by the effective date of the Transfer, then the Transfer shall be voidable at
Landlord's option. Landlord shall also have the right to condition Landlord's consent to any
Transfer upon Tenant's and the Transferee's executing a written assumption agreement, in a
form approved by Landlord. The assumption agreement shall require the Transferee to
expressly assume all obligations of Tenant under this Lease and shall require Tenant and
Transferee (but not the Guarantor if a replacement guaranty acceptable to Landlord is
obtained) to be and remain jointly and severally liable for the performance of all conditions,
covenants, and obligations under this Lease from the effective date of the Transfer of Tenant's
interest in this Lease. Regardless of Landlord's consent to any Transfer, no Transfer shall
release Tenant of Tenant's obligation or alter the primary liability of Tenant to pay rent and to
perform all other obligations to be performed by Tenant hereunder. The acceptance of rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of any
provision hereof. These rights are in addition to Landlord's right to withhold its consent to any
Transfer, and may be exercised by Landlord in its sole discretion without limiting Landlord in
the exercise of any other right or remedy at law or in equity which Landlord may have by
reason of such Transfer. In the event of default by any Transferee, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against said Transferee.
Tenant expressly agrees that the provisions of this Article are not unreasonable standards or
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Attachment A
conditions for purposes of Section 1951.4(b)(2) of the California Civil Code, as amended or
recodified from time to time.
ARTICLE 21
NOTICES
All notices given under this Lease shall be in writing and shall be given or served
either personally or by depositing the same by United States registered or certified mail
postage prepaid, return receipt requested, or by a nationally-recognized overnight delivery
courier, addressed to the applicable Address for Notices specified in Article 1. Notice shall be
deemed to have been given (a) on the delivery date indicated by the United States Postal
Service on the return receipt or by the courier or on the date such delivery is refused or
deemed "undeliverable," or (b) on the date of personal delivery. Either party may change its
address for notices by providing written notice as specified herein; provided, however, that all
addresses provided must be an actual street address located in the United States of America.
ARTICLE 22
AUTHORITY
If Tenant is a corporation, trust, general or limited partnership or limited liability
company, each individual executing this Lease on behalf of such entity represents and warrants
that he or she is duly authorized to execute and deliver this Lease on behalf of said entity. If
Tenant is a corporation, trust, partnership, or limited liability company, Tenant shall,
simultaneously with execution of this Lease, deliver to landlord written evidence of such
authority satisfactory to landlord.
ARTICLE 23
QUIET ENJOYMENT
Tenant, upon keeping, observing and performing all of the covenants and
agreements of this lease on its part to be kept, observed, and performed, shall lawfully and
quietly hold, occupy and enjoy the Premises during the Term of this lease.
ARTICLE 24
ATTORNEYS' FEES
Should either party commence an action or arbitration against the other to
enforce any obligation hereunder, the prevailing party shall be entitled to recover the costs
thereof and reasonable attorneys' fees actually incurred by such prevailing party (including the
fees and charges of legal assistants or other non-attorney personnel performing services under
the supervision of an attorney), whether or not such litigation is prosecuted to judgment.
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ARTICLE 25
WAIVER
Attachment A
Any waiver by either party of any breach by the other party of any one or more
of the covenants, conditions, or agreements of this Lease shall not be nor be construed to be a
waiver of any subsequent or other breach of the same or any other covenant, condition or
agreement of this Lease, nor shall any failure on the part of either party to require or exact full
and complete compliance by the other party with any of the covenants, conditions, or
agreements of this Lease be construed as in any manner changing the terms hereof or to
prevent Landlord from enforcing the full provisions hereof. Landlord's acceptance of any
payment which is less than that required to be paid by Tenant shall be deemed to have been
received only on account of the obligation for which it is paid and shall not be deemed an
accord and satisfaction, notwithstanding any provisions to the contrary asserted by Tenant,
written on any check or contained in any transmittal letter. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any term or covenant hereof, other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent. An express waiver must be in writing and signed by a person with the
power to contractually bind Tenant or Landlord. An express waiver shall affect only the default
specified in the waiver, and only for the time and to the extent expressly stated.
ARTICLE 26
LIMITATION ON CLAIMS
Any claim, demand, right or defense of any kind by Tenant, which is based upon,
arising in connection with or in any way related to this Lease or the negotiations prior to its
execution, shall be barred unless Tenant commences an action thereon, or interposes in a legal
proceeding a defense by reason thereof, within twelve (12) months after the date of the
inaction or omission or the date of the occurrence of the event or of the action to which the
claim, demand, right or defense relates, whichever applies.
ARTICLE 27
INTERPRETATION AND APPLICATION
27.1 Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute an offer, a reservation of, option for or option to lease,
and it is not effective as a lease or otherwise until execution and delivery by both Landlord and
Tenant.
27.2 Governing Law. This Lease shall be construed in accordance with and
governed by the statutes, decisions, and other laws of the State of California. Tenant expressly
agrees that any and all disputes arising out of or in connection with this Lease shall be litigated
only in the Superior Court of the State of California for San Diego County, and Tenant hereby
consents to the jurisdiction of said court.
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DOCS 121163-000005/3437067.2
July 9, 2019 Item #2 Page 36 of 54
Attachment A
27.3 Complete Agreement. This Lease contains all terms, covenants,
conditions, warranties and agreements of the parties relating in any manner to the rental, use
and occupancy of the Premises. No prior agreements or understanding pertaining to the same
shall be valid or of any force or effect.
27.4 Amendment. This Lease may not be amended, altered or modified in any
way except in writing signed by the parties hereto.
27.5 No Partnership. It is agreed that nothing contained in this Lease shall be
deemed or construed as creating a partnership or joint venture between Landlord and Tenant
or between Landlord and any other party, or cause Landlord to be responsible in any way for
the debts or obligations of Tenant or any other party.
27.6 No Merger. The voluntary or other surrender of this Lease by Tenant, or
a mutual cancellation thereof, shall not work as a merger, but shall, at the option of Landlord,
either terminate all or any existing subleases or subtenancies, or operate as an assignment to
Landlord of any or all such subleases or subtenancies.
27.7 Severability. If any provision of this Lease or application thereof to any
person or circumstances shall to any extent be invalid, the remainder of this Lease (including
the application of such provision to persons or circumstances other than those to which it is
held invalid) shall not be affected thereby, and each provision of this Lease shall be valid and
enforced to the fullest extent permitted by law.
27.8 Captions. The captions of the Articles and Sections hereof are for
convenience only and are not a part of this Lease and do not in any way limit or amplify the
terms and provisions of this Lease.
27.9 Words. The words "Landlord" and "Tenant", as used herein, shall include
the plural as well as the singular. Words used in the neuter gender include the masculine and
feminine.
27.10 Joint and Several Liability. If either party is comprised of more than one
individual or entity, the obligations imposed upon such party hereunder shall be joint and
several to all parties signing this Lease as such party.
27.11 Exhibits. All exhibits attached to this Lease are incorporated herein by
this reference and made a part hereof, and any reference in the body of this Lease or in the
exhibits to the "Lease" shall mean this Lease together with all exhibits.
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DOCS 121163-000005/3437067.2
July 9, 2019 Item #2 Page 37 of 54
ARTICLE 28
MISCELLANEOUS
Attachment A
28.1 Time is of the Essence. Time is of the essence of each and all of the
terms and provisions of this Lease.
28.2 Successors. Subject to the restrictions on Transfers contained in this
lease, all the terms, covenants and conditions hereof shall be binding upon and inure to the
benefit of the heirs, executors, administrators, successors and assigns of the parties hereto.
28.3 Recordation; Quitclaim. Tenant shall not record this Lease or any
memorandum hereof. Landlord has the right in its absolute discretion to record this Lease or a
memorandum hereof, and, upon landlord's request, Tenant shall execute and have
acknowledged the same for recordation. Upon termination of this Lease for any reason, Tenant
shall execute, acknowledge and deliver to landlord within thirty (30) days after receipt of
written demand therefor a good and sufficient deed whereby all right, title and interest of
Tenant in the Premises is quitclaimed to landlord. If Tenant fails to deliver the required deed to
Landlord, Landlord may prepare and record a notice reciting the failure of Tenant to execute,
acknowledge and deliver such deed and said notice shall be conclusive evidence of the
termination of this Lease and of all right of Tenant or those claiming under Tenant in and to the
Premises.
28.4 Limitation of Liability. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any applicable law
to the contrary, the liability of Landlord hereunder (including any successor landlord) and any
recourse by Tenant against Landlord shall be limited solely and exclusively to Landlord's
interest in the Premises, including the income and profits from the Premises, and neither
Landlord, nor any of its officers, employees, affiliates, managers or agents shall have any
personal liability therefor, and Tenant hereby expressly waives and releases such personal
liability on behalf of itself and all persons claiming by, through or under Tenant. The limitations
of liability provided in this Section are in addition to, and not in limitation of, any limitation on
liability applicable to landlord provided by law or in any other contract, agreement or
instrument. Under no circumstances shall landlord be liable for punitive or special damages,
indirect damages or other consequential damages, including without limitation, injury to
Tenant's business or for any loss of income or profit therefrom. In the event of any transfer of
Landlord's interest in this lease, the landlord herein named (and in case of any subsequent
transfer, the then transferor) shall be automatically freed and relieved from and after the date
of such transfer of all liability for the performance of any covenants or obligations on the part
of Landlord contained in this Lease thereafter to be performed; provided, however, that any
funds in the hands of Landlord or the then transferor at the time of such transfer, in which
Tenant has an interest shall be turned over to the transferee and any amount then due and
payable to Tenant by Landlord or the then transferor under any provision of this Lease shall be
paid to Tenant; and provided, further, that upon any such transfer, the transferee shall
expressly assume, subject to the limitations of this Section, all of the agreements, covenants
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DOCS 121 l63-000005/3437067.2 July 9, 2019 Item #2 Page 38 of 54
Attachment A
and conditions in this Lease to be performed on the part of Landlord, it being intended hereby
that the covenants and obligations contained in this Lease on the part of Landlord shall be
binding on each Landlord, its successors and assigns, only during its period of ownership.
28.5 Broker. Landlord and Tenant each represents and warrants to the other
that it has not retained the services of or had any dealings with any broker, finder or real estate
licensee and owes no person or entity any finder's or broker's fee, commission or payment of
any kind whatsoever. Landlord and Tenant each shall indemnify, protect, defend and hold
harmless the other from and against all liability for compensation or charges which may be
claimed by any such broker, finder or other similar party by reason of any dealings or actions of
the indemnifying party, including (without limitation) any costs, expenses or attorney's fees
reasonably incurred with respect thereto.
28.6 Counterparts. This Lease may be executed in any number of
counterparts each of which shall be deemed an original and all of which shall constitute one
and the same Lease with the same effect as if all parties had signed the same signature page.
[Signatures on Next Page]
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DOCS 121163-000005/3437067.2 July 9, 2019 Item #2 Page 39 of 54
ARTICLE 29
Signatures
Attachment A
The individuals executing this Lease represent and warrant that they have the right,
power, legal capacity and authority to enter into and to execute this lease on behalf of the
respective legal entities of Tenant and Landlord.
IN WITNESS WHEREOF, the parties hereto have executed this lease as of the date first
above written.
APPROVED AS TO FORM
By: QiM9i
Date: &:z6.< • 20J_ ~
DOCS 121163-000005/3437067.2
TENANT:
BAKER PARKING, LLC
a California limited liability company
./
By: a a-=----Christopher R. Baker, Manager
Note: Signature of Tenant must be
notarized c-I\ I ( _ I , \ ;;-co r-t'"ff 4G A -. G
CA A e,t iic-1 k9,..,, + N• 1'17
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July 9, 2019 Item #2 Page 40 of 54
CALIFORNIA ALL~PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189
A notary p,ubHc or other officer completing this certificate verifies only the identity of the individual who slgned the
document to which this certificate is attached, and not the truthfulness, accuracy; or validity of that ctocument.
State of Califapi}a I'\ , )
County of ~// :j1 f! II O )
On 7J /1 C :: I ~ /'1:Jefore.me, -'-"'--bi_._,J-=;i.u._"1 _W~, _'l_.r_o _/) ___ N_u-h_.c;-_f_,_Y_.-_l~r:1~· )_).....,.} 2~-__,
Date / Hefi, ln¥lf Name and Title oNhe Offker
8ersonally appeared _L_,Ji_r_1_s_-l-_o-+-f-~_~_r _ ___:~--~ __ D_£r_f-.._e_r _____________ _
Name"fi,J____ of Signer~
who-proved to me on the b.asis of satisfactory eviden~e to be the person~ whose .nam~(s) is~
subscribed to the within instrument and acknowledged· to me--that heJSbe~ executed th~ "same in
his~~ir-authorized capacity(i~ and that by his/h~r signatur~n'l:h~ msfnfment the person~
or the entity upon 'behalf of which the person~ acted, executed the instrument.
Place Notary Seal Above
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing paragraph
~true~doo~ct. ·
---,----------------OPTIONAL ----,--------------
-Though this section is optional, completing this information can deter alteration of the document Qr
fraudulent reattachment of this form to an unintended document.
Description of Attached Document · . ~/ I , 9
Title or Type of Document: lz,re,, f±tL({c.,('-,-+ Document Date:z '_./7° .
Number of Pages: 55 Signer(s) OtherTh~ Named J\bove: __ ------'----'-------
Capacity(ies) Claimed by Signer($)
Signer's Name: ____________ _ Signer's Name: ____________ _
□ Corporate Officer -Trtle(s): ______ _ □ Corporate Officer -Trtle(s): ______ _
□ Partner -:--□ Limited . □ General
□ Individual □ Attorney in.Fact'
□ Partner -□ Limited □ General
□ lndMdual □ Attorney in Fact
□ Trustee □ Guardian or Conservator-□ Trustee . □ Guardian or Conservator
□ Other: _____________ _ □.Other: ______________ _
Signer ls Representing:-~------~-Signer ls Representing: ---------=-~ ,.
Item-#5907
July 9, 2019 Item #2 Page 41 of 54
Attachment A
EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
LOT 4 OF CARLSBAD TRACT NO. 80-33, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 10061, RECORDED IN THE OFFICE OF
THE RECORDER OF SAN DIEGO COUNTY ON APRIL 15, 1981, AS INTRUMENT NO. 81-115129 OF
OFFICIAL RECORDS.
EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE CITY OF CARLSBAD BY DEED
RECORDED DECEMBER 5, 2000 AS INSTRUMENT NO. 2000-0661439 AND RECORDED JULY 16,
2003 AS INSTRUMENT NO. 2003-848484 OF OFFICIAL RECORDS.
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DOCS 121163-000005/3437067.2 July 9, 2019 Item #2 Page 42 of 54
EXHIBIT B
MEMORANDUM OF TERM COMMENCEMENT
This Memorandum of Term Commencement is made as of ____ _, 20_ by the
CITY OF CARLSBAD, a California municipal corporation ("Landlord"), and BAKER PARKING, LLC, a
California limited liability company ("Tenant"). Landlord and Tenant agree to and acknowledge
the following matters:
1. Landlord and Tenant have entered into that certain Lease Agreement dated
as of ______ _, 20_ (the "Lease"), covering the Premises located at 2065 Camino
Vida Roble, Carlsbad, California, 92011, as more particularly described in the Lease. All terms
defined in the Lease shall have the same meaning when used in this Memorandum of Term
Commencement.
2. The Term Commencement Date occurred on ________ _, 20__J
the Rent Commencement Date occurred on 20__J and the
Expiration Date of the Lease is----------~ 20_, subject to Tenant's options
to extend under Section 3.2 of the Lease.
4. Base Rent shall be paid by Tenant to Landlord in accordance with the
following schedule:
Lease Year
__/ __/20_ -__/ __/20_
__/ __/20_ -__/ __/20_
__/ __/20_ -__/ __/20_
__/ __/20_ -__/ __/20_
__/ __/20_ -__/ __/20_
Base Rent Per Month
$13,000.00
$13,390.00
$13,791.70
$14,205.45
$14,631.61
IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum of Term
Commencement as of the date first written above.
LANDLORD: TENANT:
CITY OF CARLSBAD, BAKER PARKING, LLC
a California municipal corporation a California limited liability company
By: By:
Name: _______ _ Christopher R. Baker, Manager
Title:
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DOCS 121163-000005/3437067.2 July 9, 2019 Item #2 Page 43 of 54
EXHIBITC
TENANT'S WORK
The initial improvements to the Premises shall be constructed by Tenant at Tenant's sole cost
and expense and are referred to in this Lease as "Tenant's Work". Tenant's Work shall be
subject to the following requirements:
Premises Improvements
Schedule: Tenant's Work shall be completed prior to the Opening Date and otherwise
pursuant to the following schedule:
(a)Tenant shall submit its plans and specifications to Landlord for approval on or before
the date that is 60-days after the Term Commencement Date (the "Submittal
Date").
(b) Tenant shall submit its plans and specifications to the City of Carlsbad Building
Department on or before the date that is 30-days after Landlord's approval of the
same.
(c) Tenant shall commence construction promptly upon receipt of the Building Permits
(the "Construction Commencement Date").
(d)Tenant shall obtain the Certificate of Occupancy and open for business to the public
in the Premises within 120 days after Tenant receives the Building Permits "Opening
Date").
Improvements: Tenant's Work shall include installation of a new car wash system, and
installation of new: vehicle repair lifts; compressor and associated compressor lines; oil
tanks (above ground, low capacity); vehicle lines and reels for the vehicle maintenance
and repair bays; replacement, renovation, or installation of the existing oil-water
separator (clarifier) depending on field conditions; roof repairs as needed; repair and
upgrade of electrical system and capacity for intended uses; renovation and upgrading
access and restrooms for ADA compliance and general use; interior office renovations as
required; renovation of exterior light poles as required; installation of new phone
system and internet fiber; exterior lot resurfacing and/or repairs as needed ; renovation
and repair of the exterior block wall on the east side of the building.
Utilities: Tenant has sole obligation for payment of all utility company use fees and
connection charges.
Roof Equipment: Tenant shall not make any roof penetration and/or modifications to
accommodate Tenant provided roof mounted equipment without Landlord's prior
written consent. Any roof-mounted equipment shall be reasonably screened from the
- 1 -July 9, 2019 Item #2 Page 44 of 54
Attachment A
view of the general public; however, Tenant shall not be required to raise the level of
any exterior wall or parapet in order to accomplish such screening. Final flashing and
patching of any roof penetrations shall be made at Tenant's sole cost and expense.
Tenant shall deliver a 5-year warranty to Landlord for labor and material for all roof
modifications.
Hazardous Substances: Tenant shall not introduce or cause to be introduced any
asbestos or other toxic or hazardous substances in any construction materials, fixtures
or equipment used in the Premises, except ordinary and customary materials reasonably
required in Tenant's Work so long as such use is in accordance with all applicable laws .
The use of floor finishes containing asbestos is expressly prohibited.
Construction Plans: Tenant shall obtain Landlord's prior written approval of Tenant's
plans and specifications, which shall be submitted to Landlord on or before the
Submittal Date. Upon Landlord's approval of Tenant's plans (the "Final Plans"}, Tenant
shall submit same to the appropriate governmental agencies for approval. Landlord's
approval of such Tenant plans and specifications, however, shall create no responsibility
or liability on the part of Landlord with respect to the completeness, design sufficiency,
or compliance of such plans and specifications with any applicable laws, rules,
ordinances, directions or regulations.
Documents Delivered to Landlord: Tenant shalr deliver to Landlord: (a) a copy of its final
Certificate of Occupancy by the Opening Date; (b) one set of reproducible "as built" or
"marked up" drawings within 45 days after completion of Tenant's Work; and (c) a copy
of the building permit for Tenant's Work within ten (10) days after receipt.
Construction Quality: Tenant's Work shall be performed in a good and workmanlike
manner in accordance with all applicable law, ordinances and codes. Tenant shall only
use new materials in performance of Tenant's Work.
Insurance: At all times after delivery of possession of the Premises to Tenant, Tenant
shall maintain in full for force and effect, in addition to all other insurance required to
be maintained by Tenant under the Lease, builder's risk during construction of Tenant's
Work and casualty insurance with limits of coverage not less than 100% of full
replacement cost of Tenant's leasehold improvements. Tenant shall name Landlord as
an additional insured as appropriate on all insurance policies. Tenant shall furnish
Landlord with certificates evidencing all insurance coverage at least ten (10) days prior
to commencement of Tenant's Work and may not commence construction without
having done so. Subject to the insurer's willingness to do so, the insurance shall contain
a clause providing that the insurer will not cancel such insurance without giving
Landlord ten (10) days prior written notice. If not provided by the insurer, such ten (10)
days prior written notice shall be provided to Landlord by Tenant.
-2 -July 9, 2019 Item #2 Page 45 of 54
Attachment A
Indemnity: Except to the extent of Landlord's gross negligence or willful misconduct,
Tenant assumes all risks of damages or injuries, including death, to any property or
person used or employed on or in connection with Tenant's Work, and all risks of
damages or injuries, including death, to any property or persons wherever located,
resulting from any action, omission or operation in connection with Tenant's Work.
Except to the extent of Landlord's gross negligence or willful misconduct, Tenant shall
indemnify, hold harmless and defend Landlord, its employees, agents, servants and
representatives from and against any and all losses, damages, expenses, claims, suits
and demands of whatever nature (including without limitations, reasonable attorneys'
fees and expenses incurred in the enforcement of this indemnity), resulting from
damages or injuries, including death, to any property or person, caused by or arising out
of any action, omission or operation in connection with or in any way related to the
Tenant's Work.
Commencement of Construction: Tenant shall not commence construction of Tenant's
Work until Tenant has: (1) received Landlord's written approval of Tenant's Final Plans;
(2) acquired all necessary governmental approvals; (3) notified Landlord in writing of
Tenant's intent to commence construction activities; (4) delivered to Landlord such
insurance coverages as specified within the Lease and this Exhibit; and (5) delivered to
Landlord CADD drawing files of the tenant improvements (tenant's construction
documents). Tenant shall satisfy such requirements and commence construction of
Tenant's Work on or before the Construction Commencement Date. Landlord shall have
the right to post and maintain and record on the Premises any notice of non-
responsibility provided for by the mechanic's lien laws.
- 3 -July 9, 2019 Item #2 Page 46 of 54
Attachment A
EXHIBITD
RIGHT OF FIRST OFFER TO PURCHASE
a. Subject to the provisions of this Exhibit D, if at any time during the Term of this Lease,
Landlord decides, in its sole and absolute discretion, that it is interested in selling the
Premises, Landlord shall notify Tenant in writing of such interest (the "First Offer Notice")
and Tenant shall have a right of first offer to purchase the Premises ("Right of First
Offer"). Landlord is not, however, under any obligation to sell the Premises.
b. If Landlord should send a First Offer Notice to Tenant and Tenant wishes to exercise
Tenant's Right of First Offer with respect to the Premises, then within fifteen (15) days of
delivery of the First Offer Notice to Tenant, Tenant shall deliver notice to Landlord of
Tenant's exercise of its Right of First Offer. Such notice shall be in the form of a binding (as
to Tenant) offer to purchase the Premises, and Tenant in making such offer shall use the
then most current "Standard Offer, Agreement and Escrow Instructions for Purchase of
Real Property" form published by AIR CRE (the "Offer").
c. If Tenant does not deliver to Landlord its Offer with respect to the Premises within the 15-
day period specified above or the 90-day period specified below, time being of the
essence, then Tenant's Right of First Offer shall terminate.
d. If Tenant delivers the required Offer in a timely fashion then Landlord shall review said
Offer and decide whether or not it wishes to sell the Premises on the terms contained
therein. If Landlord in its sole and absolute discretion determines that the Offer is
unacceptable, then Landlord has the right to issue a competitive Request for Proposals for
the purchase of the Premises If Landlord issues a Request for Proposals, Tenant will have
the option to re-submit a new Offer, or stand by the terms in the original Offer Tenant
agrees and understands that Landlord is in no way obligated to accept Tenant's Offer
during the First Offer Period or the Request for Proposal process, and that that Landlord
may issue a competitive Request for Proposals for the purchase of the Premises at any
time after receipt of Tenant's Offer.
e. The Right of First Offer is personal to the Tenant originally named in this Lease, and
cannot be assigned or exercised by anyone other than such original Tenant and only while
such original Tenant is in full possession of the Premises and, if requested by Landlord,
with Tenant certifying that Tenant has no intention of thereafter assigning or subletting.
Tenant shall have no right to exercise the Right of First Offer: (i) during the period
commencing with the giving of any notice of default and continuing until said default is
cured, (ii) during the period of time any rent is unpaid (without regard to whether notice
thereof is given Tenant), (iii) during the time Tenant is in breach of this Lease, or (iv) in the
event that Tenant has been given 3 or more notices of separate default, whether or not
the defaults are cured, during the 12-month period immediately preceding the exercise of
-4-July 9, 2019 Item #2 Page 47 of 54
Attachment A
the Right of First Offer. In the event of a sale or transfer of Landlord's interest in the
Parcel by Landlord, or if Tenant's right to possession of all or any portion of the Premises
shall terminate in any manner whatsoever, then the Right of First Offer herein granted
shall immediately terminate and become null and void and of no force or effect
whatsoever. Time is of the essence with regard to Tenant's Right of First Offer.
f . Tenant's Right of First Offer is intended to apply only to voluntary transfers involving third
party transferees and shall not apply in the event that the Premises or Parcel or any
portion of either is taken by eminent domain or sold under threat of condemnation, or to
transfers to an entity related to the Landlord.
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July 9, 2019 Item #2 Page 48 of 54
EXHIBIT E
FORM OF GUARANTY
[ATTACHED]
- 1 -
July 9, 2019 Item #2 Page 49 of 54
GUARANTY OF LEASE
This Guaranty of Lease ("Guaranty") is entered into as of S 14/'R, 'bJ , 20_(1; by
Christopher R. Baker, individually and as Trustee of the Christopher and Maria Baker Family
Trust ("Guarantor"), as a material inducement to and in consideration of the execution by the
CITY OF CARLSBAD, a California municipal corporation ("Landlord") of that certain Lease
Agreement dated 5'4 Q \D . 20ft (the "Lease") between Landlord and BAKER
PARKING, LLC, a Californ~ limited liability company ("Tenant"), which Lease relates to the
improved real property located at 2065 Camino Vida Roble, Carlsbad, California, 92011, as
more particularly described in the Lease (the "Premises"). Guarantor hereby agrees as follows:
1. Guarantor hereby unconditionally guarantees the performance of, and
unconditionally promises to perform, all of the obligations of Tenant under the Lease and any
and all extensions and modifications thereof, including, but not limited to, the obligation to pay
rent thereunder.
2. In such manner, upon such terms and at such times as Landlord shall deem best,
and without notice to or the consent of Guarantor, Landlord may alter, compromise, extend or
change the time or manner for the performance of any obligation hereby guaranteed,
substitute or add any one or more guarantors, accept additional or substituted security for the
performance of any such obligation, or release or subordinate any security therefor, any and all
of which may be accomplished without any effect on the obligations of Guarantor hereunder.
No exercise or non-exercise by Landlord of any right hereby given, no dealing by Landlord with
Tenant, any other guarantor or other person, and no change, impairment or suspension of any
right or remedy of Landlord shall in any way affect any of the obligations of Guarantor
hereunder or any security furnished by Guarantor or give Guarantor any recourse against
Landlord.
3. Guarantor hereby waives and agrees not to assert or take advantage of the
following:
3.1 Any right to require Landlord to proceed against Tenant or any other
person or to proceed or exhaust any security held by Landlord at any time or to pursue any
other remedy in Landlord's power before proceeding against Guarantor, including the
provisions of Sections 2845 and 2850 of the Civil Code of California;
3.2 Any defense based on the statute of limitations in any action hereunder
or in any action for the performance of any obligation hereby guaranteed; provided, however,
that nothing in this Section 3.2 shall prevent Guarantor from asserting the statute of limitations
as a defense to the performance of an obligation of Tenant under the Lease to the extent that
Tenant could assert such defense against Landlord;
3.3 Any defense that may arise by reason of the incapacity, lack of authority,
bankruptcy, death or disability of any other person or persons or the failure of Landlord to file
or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of
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DOCS 121163-000005/3437067.2
July 9, 2019 Item #2 Page 50 of 54
Attachment A
any other person or persons, including the provisions of Section 2810 of the Civil Code of
California;
3.4 Any right to receive demands, protests and notices of any kind including,
but not limited to, notice of the existence, creation or incurring of any new or additional
obligation or of any action or non-action on the part of Tenant, Landlord or any other person;
3.5 Any defense based on an election of remedies including, but not limited
to, any action by Landlord which shall destroy or otherwise impair any subrogation right of
Guarantor or the right of Guarantor to proceed against Tenant for reimbursement, or both;
3.6 Any duty on the part of Landlord to disclose to Guarantor any facts
Landlord may now or hereafter know about Tenant, regardless of whether Landlord has reason
to believe that such facts materially increase the risk beyond that which Guarantor intends to
assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable
opportunity to communicate such facts to Guarantor, it being understood and agreed that
Guarantor is fully responsible for being and keeping informed of the financial condition of
Tenant and of all circumstances bearing on the risk of nonperformance of any obligation hereby
guaranteed; and
3.7 Any right to receive notice of or to consent to any amendments that may
hereafter be made to the Lease, including the provisions of Section 2819 of the Civil Code of
California; and
3.8 Any defense based on the fact that Guarantor's obligations hereunder
are larger or more burdensome than that of Tenant's under the Lease, including the provisions
of Section 2809 of the Civil Code of California.
4. Until all obligations hereby guaranteed shall have been fully performed,
Guarantor shall have no right of subrogation and waives any right to enforce any remedy which
Landlord now has or may hereafter have against Tenant and any benefit of, and any right to
participate in, any security now or hereafter held by Landlord, including the provisions of
Sections 2847, 2848 and 2849 of the Civil Code of California. Guarantor agrees that nothing
contained herein shall prevent Landlord from suing on the Lease or from exercising any rights
available to Landlord thereunder and that the exercise of any of the aforesaid rights shall not
constitute a legal or equitable discharge of Guarantor. Guarantor expressly waives any and all
benefits under the second sentence of California Civil Code Section 2822(a). In addition,
Guarantor agrees that Landlord (and not Tenant) shall have the right to designate the portion
of Tenant's obligations under the Lease that is satisfied by a partial payment by Tenant.
5. All existing and future obligations of Tenant to Guarantor, or any person owned
in whole or in part by Guarantor, and the right of Guarantor to cause or permit itself or such
person to withdraw any capital invested in Tenant are hereby subordinated to all obligations
hereby guaranteed, and, without the prior written consent of Landlord, such obligations to
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Attachment A
Guarantor shall not be performed, and such capital shall not be withdrawn, in whole or in part,
while Tenant is in default under the Lease.
6. All rights, powers and remedies of Landlord hereunder and under any other
agreement now or at any time hereafter in force between Landlord and Guarantor shall be
cumulative and not alternative, and such rights, powers and remedies shall be in addition to all
rights, powers and remedies given to Landlord at law or in equity. This Guaranty is in addition
to and exclusive of the guarantee of any other guarantor of any obligation of Tenant to
Landlord.
7. The obligations of Guarantor hereunder are independent of the obligations of
Tenant under the Lease, and, in the event of any default hereunder or under the Lease, a
separate action or actions may be brought and prosecuted against Guarantor, whether or not
Tenant is joined therein or a separate action or actions are brought against Tenant. Landlord
may maintain successive actions for other defaults. Landlord's rights hereunder shall not be
exhausted by its exercise of any of its rights or remedies or by any such action or by any
number of successive actions until and unless all obligations hereby guaranteed shall have been
fully performed.
8. Guarantor shall pay to Landlord, without demand, reasonable attorneys' fees
and all costs and other expenses which Landlord shall expend or incur in collecting or
compromising any obligation hereby guaranteed or in enforcing this Guaranty against
Guarantor, whether or not suit is filed including, but not limited to, attorneys' fees, costs and
other expenses incurred by Landlord in connection with any insolvency, bankruptcy,
reorganization, arrangement or other similar proceeding involving Guarantor which in any way
affects the exercise by Landlord of its rights and remedies hereunder.
9. Should any one or more provisions of this Guaranty be determined to be illegal
or unenforceable, all other provisions shall nevertheless be effective.
10. This Guaranty shall inure to the benefit of Landlord and its successors and
assigns, and shall bind the heirs, executors, administrators, successors and assigns of
Guarantor. This Guaranty may be assigned by Landlord concurrently with the transfer of title to
property covered by the Lease, and, when so assigned, Guarantor shall be liable to the
assignees without in any manner affecting the liability of Guarantor hereunder.
11. Upon full performance of all obligations hereby guaranteed, this Guaranty shall
be of no further force or effect.
12. No provision of this Guaranty or right of Landlord hereunder can be waived or
modified, nor can Guarantor be released from Guarantor's obligations hereunder, except by a
writing duly executed by Landlord.
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July 9, 2019 Item #2 Page 52 of 54
Attachment A
13. When the context and construction so require, all words used in the singular
herein shall be deemed to have been used in the plural and the masculine shall include the
feminine and neuter and vice versa. The word "person" as used herein shall include any
individual, company, firm, association, partnership, corporation, trust or other legal entity of
any kind whatsoever.
14. If two (2) or more entities or persons are signing this Guaranty as Guarantor,
then all such entities and/or persons shall be jointly and severally liable for the obligations of
Guarantor hereunder.
15. This Guaranty shall be governed by and construed in accordance with the laws of
the State of California, without regard to principles of conflicts of law. In any action brought
under or arising out of this Guaranty, Guarantor hereby consents to the jurisdiction of any
competent court within the County of San Diego, California and hereby consents to service of
process by any means authorized by California law. This Guaranty shall constitute the entire
agreement of Guarantor with respect to the subject matter hereof, and no representation,
understanding, promise or condition concerning the subject matter hereof shall be binding
upon Landlord unless expressed herein.
Guarantor:
CHRISTOPHER R. BAKER
U,-4z:--· -----
Christopher R. Baker, Trustee of the
CHRISTOPHER AND MARIA BAKER FAMILY
TRUST
SPOUSAL CONSENT
As spouse of Christopher R. Baker, and as Co-Trustee of the Christopher and Maria
Baker Family Trust, I hereby: (i) acknowledge I have read and understand the terms of the
above Guaranty of Lease (the "Guaranty"), (ii) specifically consent to the terms and conditions
of the Guaranty, (iii) approve the execution of the Guaranty by my spouse, and (iv)
acknowledge that all community property belonging to my spouse and me and all property
belonging to our trust is liable for obligations of Guarantor under this Guaranty. I will take no
action at any time to impede enforcement of the Guaranty.
Effective as of _ ____.6..__.· l~I __ _,, 20.fl_
MARIA BAKER
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