HomeMy WebLinkAbout2024-07-16; City Council; ; Lease agreement with the MAAC Project to operate a Head Start preschool program at 3368 Eureka PlaceMeeting Date July 16, 2024
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Curtis M. Jackson, Real Estate Manager
curtis.jackson@carlsbadca.gov, 442-339-2836
Subject Lease agreement with the MAAC Project to operate a Head Start
preschool program at 3368 Eureka Place
District: 1
Recommended Action
Adopt a resolution authorizing the execution of a lease agreement with Metropolitan Area
Advisory Committee on Anti-Poverty in San Diego County, Inc. dba MAAC Project to operate a
Head Start preschool program at the city-owned property located at 3368 Eureka Place.
Executive Summary
Since 2010, MAAC Project has operated the local Head Start preschool program in a building
behind at the Library Learning Center located at 368 Eureka Place. City staff recommends the
City Council authorize the execution of a three-year lease agreement with MAAC Project to
continue the program.
The Carlsbad Municipal Code does not authorize the City Manager to approve and execute
lease agreements. The City Council is being asked to approve a resolution authorizing the
Mayor to execute the lease agreement and grant authority to the City Manager to act on behalf
of the city in all future decisions and actions necessary to implement the lease agreement,
including lease extensions, so long as MAAC Project has performed its lease obligations, is
current on all lease payments and has provided adequate evidence of grant funding for the
lease extension. Authority is being transferred to the City Manager as the lease extension
approval is administrative in nature and would not be necessary but for the fact that MAAC
Project requested a three-year term based on Federal Grant funding; otherwise, the initial lease
term would have been five years, as is the proposed full term should all extension terms be
approved.
Explanation & Analysis
The city purchased the property located at 3368 Eureka Place in May 2004 for the purpose of
developing the Library Learning Center on the property. MAAC Project entered into a four-year
lease agreement to operate the Head Start program in September 2010 and has continuously
operated the program since that time.
MAAC Project now desires to enter into a new three-year lease agreement with two one-year
extension options to continue the operation of the Head Start preschool program.
July 16, 2024 Item #5 Page 1 of 38
Fiscal Analysis
MAAC Project will initially pay the city an annual lease payment of $130,418.39, or $10,868.20
per month, as well as all utilities associated with its lease and use of the property. The
minimum rent shall be adjusted 2% annually over the course of the lease.
Period
(years)
Minimum
annual rent
1 $130,418.39
2 $133,026.76
3 $135,687.29
MAAC Project will pay the city a total lease revenue of $399,132.44 over the initial three-year
term, as well as pay all utility and services fees associated with their use of the property. The
city will maintain liability over the roof, structure, foundation and heating, ventilation and air
conditioning maintenance responsibilities. In addition, rent payments will offset annual city
expenses of approximately $2,500 for landscaping and general site maintenance.
MAAC Project will also pay a one-time payment of $7,422.93 upon commencement of the new
lease agreement for inadvertent underpayments of lease payments during the previous lease
term.
MAAC Project shall commence paying rent of $10,868.20 per month to the city retroactive to
July 1, 2024, and carry out the terms of the lease agreement including the operation of a Head
Start preschool program on the property.
Environmental Evaluation
The proposed action is exempt from the California Environmental Quality Act under CEQA
Guidelines Section 15301 - Existing Facilities. Section 15301 exempts the leasing of property
involving negligible or no expansion of use beyond that that was existing at the time of the
agency’s decision to approve the lease.
Exhibits
1. City Council resolution
July 16, 2024 Item #5 Page 2 of 38
July 16, 2024 Item #5 Page 3 of 38
Exhibit 1
RESOLUTION NO. 2024-170
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT
WITH METROPOLITAN AREA ADVISORY COMMITTEE ON ANTI-POVERTY
IN SAN DIEGO COUNTY, INC. DBA MAAC PROJECT TO OPERATE A HEAD
START PRESCHOOL PROGRAM AT THE CITY-OWNED PROPERTY LOCATED
AT 3368 EUREKA PLACE
WHEREAS, on June 17, 2014, the city entered into a lease agreement with the Metropolitan
Area Advisory Committee on Anti-Poverty in San Diego County, Inc. dba MAAC Project ("MAAC
Project"), to lease and operate a Head Start preschool program at the Library Learning Center located
3368 Eureka Place ("Property") by Resolution No. 2014-141; and
WHEREAS, the parties entered into a three-year lease agreement with two one-year extension
options, dated June 26, 2019; and
WHEREAS, the lease agreement expired June 25, 2024; and
WHEREAS, MAAC Project desires to enter into a new lease agreement with the city at the
Property to continue operating its head start preschool program; and
WHEREAS, the new lease agreement is for a term of three years and provides for two
successive one-year extension options; and
WHEREAS, MAAC Project will initially pay the city annual rent of $130,418.39, which shall be
paid retroactive to July 1, 2024, and shall be increased two percent annually over the term of the
lease agreement; and
WHEREAS, MAAC Project will also pay a one-time payment of $7,422.93 upon commencement
of the new lease agreement for inadvertent underpayments of lease payments during the previous
lease term.
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 City Council approves the lease agreement between the City of Carlsbad and
the Metropolitan Area Advisory Committee on Anti-Poverty in San Diego County, Inc.
dba MAAC Project to operate a Head Start preschool program at the city-owned facility
located at 3368 Eureka Place (Attachment A).
July 16, 2024 Item #5 Page 4 of 38
3. That the Mayor is authorized to execute the lease agreement with the Metropolitan
Area Advisory Committee on Anti-Poverty in San Diego County, Inc. dba MAAC Project.
4. 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 MAAC Project for the property located at 3368 Eureka Place, including
lease extensions, and to do so in full compliance with the terms and conditions
expressed in the lease agreement, and subject to MAAC Project's full compliance with
its lease agreement obligations, including lease payments, and has provided adequate
evidence of grant funding for the lease extensions, and subject to the City Attorney's
approval of the lease extensions as to form.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 16th day of l!!!Y, 2024, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
BLACKBURN, BHAT-PATEL, ACOSTA, BURKHOLDER.
NONE.
NONE.
LUNA.
KEITH BLACKBURN, Mayor
SHERRY FREISINGER, City Clerk
(SEAL)
July 16, 2024 Item #5 Page 5 of 38
Attachment A
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is entered into as of 3v.,\i \ 1 . 2024,
by and between City of Carlsbad, . a California municipal corporatio ("Landlord") and
Metropolitan Area Advisory Committee on Anti-Poverty in San Diego County, Inc. dba "MAAC
Project," a non-profit corporation (''Tenant") (collectively "Parties"), for the property located
at 3368 Eureka Place. California, 92008, 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 two separate buildings/spaces including the building occupied by the Carlsbad
Learning Center at the front of the property and a 4,800 square foot preschool building at the
rear of the property, and more particularly described and/or depicted on Exhibit A attached
hereto (the "Premises");
WHEREAS, the Parties entered into that certain Lease Agreement, dated June 2, 2014
("Agreement"), for the Premises, which Lease was amended by First Amendment to Lease
Agreement dated December 5, 2017 ("First Amendment"), and amended again on April 18,
2018 ("Second Amendment"); and
WHEREAS, the parties entered into that new 5-year Lease Agreement, dated June 26,
2019 ("New Lease Agreement"); and
WHEREAS, the New Lease Agreement terminates on June 26, 2024; and
WHEREAS, Tenant operates a "Head Start" preschool program out of the Premises
within 4,800 square foot building and adjacent play yard ("Leased Premises"); and
WHEREAS, Tenant desires to continue to lease from Landlord the Leased Premises to
continue operating their "Head Start" program at the Premises; and
WHEREAS, Tenant's continued operation of the Premises as a civic resource on behalf of
the City of Carlsbad furthers the Tenant's mission and benefits Carlsbad and the community at
large; and
WHEREAS, Landlord is willing to lease the Premises to Tenant for the term and upon t he
covenants, conditions and provisions hereinafter set forth.
July 16, 2024 Item #5 Page 6 of 38
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. Metropolitan Area Advisory Committee on Anti-Poverty in
San Diego County, Inc. dba "MAAC Project ("Trade Name").
1.2 Premises. The Premises (defined above) are commonly known as 3368
Eureka Place, California, 92008, and consist of two separate buildings/spaces including the
building occupied by the Carlsbad Learning Center at the front of the property and a 4,800
square foot preschool building at the rear of the property used as a "Head Start" preschool.
1.3 Term and Rent Commencement. The term of this Lease shall be
approximately three (3) 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 three (3) years after the Rent Commencement
Date (defined below) (the "Expiration Date"). Tenant shall commence paying rent under this
Lease on the date the Parties fully execute this Lease (the "Rent Commencement Date");
provided, however, that concurrently with the execution of this Lease, Tenant shall pay to
Landlord the 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 Rent.
Lease Year
1
2
3
Months*
1-12
13-24
25-36
Rent Per Month
$ 10,868.20
$11,085.56
$11,307.27
*From the Rent Commencement Date
Annual Rent
$ 130,418.39
$ 133,027.76
$ 135,687.29
1.5 Use of Premises. It is expressly agreed that the Premises shall be
used by Tenant solely and exclusively for the purpose of a preschool program and for such
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July 16, 2024 Item #5 Page 7 of 38
other related or incidental purposes as may be first approved in writing by City, and for no
other purpose whatsoever.
Tenant covenants and agrees to use the Premises for the above specified purposes and to
diligently pursue said purposes throughout the term hereof. In the event that Tenant fails to
continuously use the Premises for said purposes, or uses the Premises for purposes not
expressly authorized herein, the Tenant shall be deemed in default under this Lease.
("Permitted Use").
1.6 Tenant Improvement Allowance. None.
1.7 Security Deposit. None.
1.8 Guarantor: None.
1.9 Broker(s): None.
1.10 Tenant's Address for Notices:
Metropolitan Area Advisory Committee on
Anti-Poverty in San Diego County, Inc.,
dba "MAAC Project"
Attn: Arnulfo Manriquez, President/CEO
800 Los Vallecitos Blvd. Suite J
San Marcos, CA 92069
1.11 Landlord's Address for Notices:
City of Carlsbad
Real Estate Manager
1200 Carlsbad Village Drive
Carlsbad, CA 92008
With a copy to:
City of Carlsbad
City Attorney's Office
1200 Carlsbad Village Drive
Carlsbad, CA 92008
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July 16, 2024 Item #5 Page 8 of 38
1.12 Landlord's Address for Rent Payments:
Finance Department
City of Carlsbad
1635 Faraday Avenue
Carlsbad, CA 92008
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.
ARTICLE 2
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
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July 16, 2024 Item #5 Page 9 of 38
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 first monthly installment of Base Rent for the first (1st) 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.
2.1 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.
2.2 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 that are
owned by the Landlord. 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.
3.2 Extension Option(s). Upon expiration of this Lease, Tenant may request
and Landlord may grant, at its sole discretion and option, two (2) one-year extension options
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July 16, 2024 Item #5 Page 10 of 38
(each an "Extension Term"). For purposes of the approval and execution of the two one-year
options to renew, the City Manager, or his designee, is hereby authorized to act on behalf of
the City of Carlsbad.
Rent for the first twelve (12) months of each Extension Term shall be one hundred two percent
(102%) of the monthly Rent applicable immediately prior to the commencement of such
Extension Term, and Rent shall increase every twelve (12) full calendar months thereafter by
two percent (2%).
3.3 Surrender of Premises. On the Expiration Date or on the sooner
termination hereof, Tenant shall remove all of Tenant's Property 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 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 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.
3.4 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
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July 16, 2024 Item #5 Page 11 of 38
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.
3.5 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 (including, without limitation, any termination as a result
of Landlord's delivery of a Disapproval Notice).
ARTICLE 4
RENT
4.1 General Provisions. 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.
4.2 Payment of 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 Rent ("Rent") in advance
as set forth herein. Tenant shall pay the first installment of Rent to Landlord concurrently with
Tenant's execution of this Lease, and all subsequent installments of Rent shall be payable in
advance on or before the first day of each calendar month.
4.3 Deferred Rent. Within sixty (60) days after the parties fully execute
this Lease, Tenant shall pay to the Landlord a deferred rent payment equal to Seven Thousand
Four Hundred Twenty-Two and 93/100 Dollars ($7,422.93) to cover deferred rent payments
under the previous lease with the Landlord.
ARTICLE 5
SECURITY DEPOSIT
5.1 Security Deposit. None.
ARTICLE 6
TAXES
6.1 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
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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.
6.2 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 7
UTILITIES
7.1 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
utilities supplied to the Premises for the past twelve (12) month period within thirty (30) days
after Landlord's request.
7.2 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 8
INSURANCE
8.1 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
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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
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.
8.2 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 $1,000,000 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.
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8.3 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, earthquake 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 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.
8.4 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.
8.5 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.
8.6 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 resp,ective
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.
8.7 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
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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 9
USE OF PREMISES
9.1 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.
9.2 Conduct of Business. Tenant shall conduct its business at all times in a
professional and businesslike manner consistent with reputable business standards and
practices.
9.3 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.
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9.4 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,
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.
9.5 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
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Tenant reasonable notice of any and all intended entries or inspections pursuant to this
Section.
9.6 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 10
MAINTENANCE AND REPAIR OF PREMISES
10.1 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
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.
10.2 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 Tenant Improvements, and {i) any painting, plumbing, fixtures, windows and glass,
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.
10.3 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, roof mounted HVAC System, 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
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affected by any Tenant Improvements, and (c} any damage or destruction covered by insurance
required to be maintained by Tenant. 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.
10.4 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.
ARTICLE 11
ALTERATIONS AND ADDITIONS
11.1 Tenant Improvements. Tenant shall not commence 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 without the prior written
approval of Landlord, Landlord shall have the right to require that Tenant remove any or all of
such Tenant Improvements, and repair and restore any 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 . Any and all 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 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 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
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such building permit and such building and planning laws and regulations; (iv) providing
Landlord with plans and specifications for any 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
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 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.
11.2 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 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
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deposited with Landlord within ten {10) days after written request has been delivered to
Tenant.
11.3 Title to Tenant Improvements. Subject to Section 12.1 below, upon the
expiration or earlier termination of this Lease, any and all 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 any Tenant Improvements pursuant to Article 13
below.
11.4 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
Premises caused by the erection, maintenance or removal of any sign, marquee, banner,
awning, decoration or other attachment.
11.5 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 PW; (c) in no event shall Landlord be responsible for Tenant's
failure to comply with any applicable provisions of the PWL. ; (d) Tenant's 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 12
TENANT'S PROPERTY
12.1 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
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Term. Except as provided to the contrary in Section 11.3 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.
12.2 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 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 13
DAMAGE AND DESTRUCTION
13.1 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 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.
13.2 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
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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.
ARTICLE 14
EMINENT DOMAIN
14.1 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.
14.2 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.
14.3 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 15
INDEMNIFICATION
15.1 Indemnification. Tenant covenants and agrees to indemnify,
protect, defend and hold harmless Landlord and its agents, employees, officers, affiliates and
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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 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 16
DEFAULTS AND REMEDIES
16.1 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 (5) 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
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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.
16.2 Remedies. Upon the occurrence of an event of default by Tenant as set
forth in Section 16.1 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 forty-five days (45) day 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
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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
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 to be .
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
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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,
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.
16.3 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.
16.4 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 four percent (4%) 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 .
16.5 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.
16.6 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
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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 17
SUBORDINATION AND ATTORNMENT
17.1 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.
17.2 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.
17.3 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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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-
fact, 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.
17.4 Rights of Landlord's Lender and Landlord's Purchaser. If any Landlord's
Lender or any pu rchaser 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 Pu rchaser 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 Land lord'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
fai lure 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.
17.5 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 18
FORCE MAJEURE
18.1 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 19
ASSIGNMENT AND SUBLETTING
19.1 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 as 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.
19.2 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
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("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
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.
19.3 Landlord's Rights. Upon receipt of a Transfer Notice pursuant to
Section 19.2 above, Landlord shall have the right to (i) withhold its consent to such Transfer, as
permitted pursuant to Section 19.1 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
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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
conditions for purposes of Section 1951.4(b)(2) of the California Civil Code, as amended or
recodified from time to time.
ARTICLE 20
NOTICES
20.1 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 21
AUTHORITY
21.1 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 22
QUIET ENJOYMENT
22.1 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 23
ATTORNEYS' FEES
23.1 Attorney's Fees. Should either party commence an action or arbitration
against the other to enforce any obligation hereunder, the prevailing party shall be entitled to
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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.
ARTICLE 24
WAIVER
24.1 Waiver. 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 25
LIMITATION ON CLAIMS
25.1 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 26
INTERPRETATION AND APPLICATION
26.1 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.
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26.2 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.
26.3 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.
26.4 Amendment. This Lease may not be amended, altered or modified in any
way except in writing signed by the parties hereto.
26 .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!
26.6 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 sub-tenancies.
26.7 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.
26.8 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.
26.9 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.
26.10 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.
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26.11 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.
ARTICLE 27
MISCELLANEOUS
27.1 Time is of the Essence. Time is of the essence of each and all of the
terms and provisions of this Lease.
27.2 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.
27.3 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.
27.4 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
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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 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.
27.5 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.
27.6 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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July 16, 2024 Item #5 Page 36 of 38
ARTICLE 28
Signatures
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.
LANDLORD:
City of Carlsbad, •
·a California municipal corporation
By:
Name: Scott -----------
Title: City Manager
APPROVED AS TO FORM
By: ~/". I-{~
Cindie McMahon, City Attorney
Date: ,_J ...... < ..... «-~"b,--"--'-IJ _ __,,2024
TENANT:
Metropolitan Area Advisory
Committee on
Anti-Poverty in San Diego County, Inc.,
dba "MAAC Project"
By:
Name: Arnulfo M r
Title: President/CEO
Note: Signature of Tenant must be
notarized
July 16, 2024 Item #5 Page 37 of 38
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California n
County of S O Y\ l .. neg o
On 1-\o~ 2131 '2o 2 <j before me, J l) \;o 0d Covv o.\ J\10--kM 3 (insert name and title of the officer)
personally appeared Q.rn I)\ f' () M O V)Y ( ~\)€ 2 So\ D l(Z.0.V>O , who proved to me on the basis of satisfactory evid nee to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal. JULIANA CORRAL
Notary Public • California : San OiejO County ~ Commission# 2447042
y Comm. Expires May 15, 2027
(Seal)
July 16, 2024 Item #5 Page 38 of 38
EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
APN NO: 205-112-37-00
Lots 9 and 10, of Optima Tract, in the City of Carlsbad, County of San Diego, State of California,
according to Map thereof No. 1805, filed in the office of the County recorder of San Diego
County September 4, 1924, as described in Certificate of Compliance recorded June 28, 1993, as
instrument No. 93 -0408315 of Official Records.
Also known as: 3368 Eureka Place, Carlsbad, CA 92008
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DOCS 121163-000007/2625579.8