HomeMy WebLinkAbout2018-07-24; City Council; Resolution 2018-136RESOLUTION NO. 2018-136
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA AUTHORIZING EXECUTION OF A RETAIL LEASE AGREEMENT
WITH HOUSE MARTEL, LLC TO OPERATE A CAFE AT 1775 DOVE LANE,
COMMONLY KNOWN AS THE DOVE LIBRARY CAFE
Exhibit 1
WHEREAS, on November 7, 2017, City Council authorized the release of a request for
proposals to lease the cafe space at 1775 Dove Lane ("Property") by Resolution No. 2017-209; and
WHEREAS, the city received four proposals which were evaluated and scored by an internal
selection committee that recommended Lisa Martel as the prospective tenant of the cafe space; and
WHEREAS, on February 13, 2018, City Council authorized staff to enter into exclusive
negotiations with Lisa Martel by Resolution No. 2018-015; and
WHEREAS, Lisa Martel created House Martel, LLC, a limited liability company in which she is
the sole member; and
WHEREAS, the city and House Martel, LLC desire to enter into a Lease Agreement for the use
and operation of the cafe space, for the purpose of operating a quick-serve cafe; and
WHEREAS, the Lease Agreement is for a term of five-years and provides for one five-year
renewal option; and
WHEREAS, the City Council authorized a city funded tenant improvement budget of up to
$80,000, of which the city will reimburse House Martel, LLC for tenant improvements to the cafe
space;and
WHEREAS, House Martel, LLC will pay an annual minimum rent of $14,796 in year one, to be
increased three percent annually over the term of the Lease Agreement; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
July 24, 2018 Item #1 Page 3 of 51
1. That the above recitations are true and correct.
2. The Mayor is hereby authorized and directed to execute the Lease Agreement, which is
attached hereto as Attachment A.
3. 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 House Martel, LLC for the property located at 1775 Dove Lane, and to
do so in full compliance with the terms and conditions expressed in the
aforementioned Lease Agreement and to the satisfaction of the City Attorney.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 24th day of :!l!!Y.,_2018, by the following vote, to wit:
AYES:
NOES:
ABSENT:
M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard.
None.
None.
(SEAL)
July 24, 2018 Item #1 Page 4 of 51
Attachment A
RETAIL LEASE AGREEMENT
THIS RETAIL LEASE AGREEMENT (this "Lease") is entered into as of
Q?{ '2::( \ ~ . 2018, by and between CITY OF CARLSBAD, a California municipal
corporation ("Landlord") and House Martel, LLC, a California Limited Liability Company
("Tenant"), and shall be effective and binding upon the parties hereto as of the date of
execution hereof by both parties.
RECITALS
WHEREAS, Landlord is the owner of certain real property and improvements thereon,
consisting of approximately 750 square feet, located at the Carlsbad City Library at 1775 Dove
Lane, and more particularly described and/or depicted on Exhibit A attached hereto (the
"Premises");
WHEREAS, Tenant desires to lease the Premises, in order to provide a permanent location for a
cafe and coffee shop; and
WHEREAS, Landlord is willing to lease the Premises to Tenant for the term and upon the
covenants, conditions and provisions hereinafter set forth.
AGREEMENT
NOW THEREFORE, in consideration of the covenants, conditions and provisions
contained herein, the parties hereto do mutually agree as follows:
ARTICLE 1
BASIC LEASE PROVISIONS
1.1 Trade Name. House Martel, LLC ("Trade Name").
1.2 Premises. The Premises (defined above) are commonly known as 1775
Dove Lane, Carlsbad, California, 92008, and consist of a commercial unit with approximately
750 square feet of indoor space and related improvements.
1.3 Term and Rent Commencement. Approximately five (5) years,
commencing upon the date when this Lease has been executed by both parties (the "Term
Commencement Date"), and expiring, unless sooner terminated in accordance with this Lease,
upon the date that is five (5) years after the Rent Commencement Date (defined below) (the
"Expiration Date"), subject to the extension options set forth in Section 3.2 below. Tenant shall
commence paying rent under this Lease on the date that is either (i) one hundred and eighty
(180) days after the Term Commencement Date, or (ii) the date tenant receives a certificate of
occupancy, whichever occurs first (the "Rent Commencement Date"); provided, however, that
concurrently with the execution of this Lease, Tenant shall pay to Landlord the Base Rent for
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the first (l5t) full month beginning on the Rent Commencement Date. As used in this Lease,
"Lease Year" means each twelve {12) month period (or portion thereof) during the Term
commencing with the Rent Commencement Date.
1.4 Base Rent.
Lease Year Months* Base Rent Per Month Annual Base Rent
1 1-12 $1,233.00 $14,769.00
2 13-24 $1,269.99 $15,239.88
3 25-36 $1,308.09 $15,697.08
4 37-48 $1,347.33 $16,167.99
5 49-60 $1,387.75 $16,653.03
*From the Rent Commencement Date
1.5 Percentage Rent. Flat or Percentage fee payments shall be due to
City and payable by Tenant in arrears on or before the tenth {10th} day of the month for which
the percentage fee is calculated. Tenant shall pay Landlord a minimum annual rent of Fourteen
Thousand Seven Hundred Ninety-six dollars and no cents ($14,796.00} payable monthly at the
rate of One Thousand Two Hundred Thirty Three dollars and no cents ($1,233.00}, or 3% of
gross income, whichever sum is greater. If the rent commencement date is not the first day of a
month, then that prorated portion of such rent which is attributable to the days in that month
from the rent commencement date until the end of that month shall be due to Landlord.
Tenant shall pay Percentage Rent on an annual basis and report Gross Sales on a monthly basis
as set forth in Article 5 below.
1.6 Use of Premises. The Premises shall be used only for the operation
of a cafe under the Trade Name ("Permitted Use"). The Premises shall be open for breakfast
and lunch, seven (7) days per week ("Tenant's Business Hours").
1.7 Tenant Improvement Allowance. $80,000.00.
1.8 Security Deposit. $1,500
1.9 Guarantor: Lisa Martel
1.10 Broker(s): NA
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1.11 Tenant's Address for Notices:
House Martel, LLC
Lisa Martel
6505 Camino del Parque
Carlsbad, CA 92011
Email: Lisa.martel313@gmail.com
{760) 331-9057
1.12 Landlord's Address for Notices:
City of Carlsbad
Real Estate Manager
1200 Carlsbad Village Drive
Carlsbad, CA 92008
With a copy to:
I
Procopio, Cory, Hargreaves & Savitch LLP
Attn: Michael E. Lyon
12544 High Bluff Drive, Suite 300
San Diego, CA 92130
Email: michael.lyon@procopio.com
1.13 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 hires 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 sta~ement of
square footage set forth in this Lease, or that may have been used in calculating Base Rent, is
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an approximation which Landlord and Tenant agree is reasonable and the Base Rent based
thereon is not subject to revision whether or not the actual square footage is more or less.
2.2 Condition of the Premises. Tenant acknowledges that except as
otherwise expressly provided herein it shall accept the Premises in its "AS IS" condition, without
representation, warranty or any improvements by Landlord. Landlord makes no
representations or warranties with respect to this Lease, the Premises or any property therein
or with respect to any matter related thereto, other than as expressly set forth in this Lease.
Tenant hereby acknowledges that it has had an opportunity to investigate and inspect the
condition of the Premises and the suitability of same for Tenant's purposes, and Tenant does
hereby (a) waive and disclaim any objection to, cause of action based upon, or claim that its
obligations hereunder should be reduced or limited because of the condition of the Premises or
the suitability of same for Tenant's purposes and (b) acknowledge that the Premises are in
good, clean and sanitary order and repair and by taking possession Tenant accepts the Premises
as it exists. Tenant acknowledges that neither Landlord nor any agent nor any employee of
Landlord has made any representations or warranty with respect to the Premises or with
respect to the suitability of either for the conduct of Tenant's business and Tenant expressly
warrants and represents that Tenant has relied solely on its own investigation and inspection of
the Premises in its decision to enter into this Lease and let the Premises in an "AS IS" condition
and is not relying on any statements, representations or warranties whatsoever made by or
enforceable directly or indirectly against Landlord relating to the condition, operations,
dimensions, descriptions, soil condition, suitability, compliance or lack of compliance with any
state, federal, county or local law, ordinance, order, permit or regulation, or any other attribute
or matter of or relating to the Premises. No promise of Landlord to alter, remodel, repair or
improve the Premises, and no representation, express or implied, respecting any matter
relating to the Premises or this Lease (including, without limitation, the condition of the
Premises) has been made to Tenant by Landlord or any agent of Landlord other than as may be
contained herein.
2.3 Delivery of Possession. Tenant shall accept possession of the Premises
from Landlord on the Term Commencement Date; provided, however, that Tenant shall not be
entitled to possession of the Premises until Landlord has received from Tenant all of the
following: (i) the Security Deposit, the first monthly installment of Base Rent for the first (1st)
full month after the Rent Commencement Date; and (ii) executed copies of policies of insurance
or certificates or binders thereof as required under Article 9 below. Tenant shall pay to
Landlord, upon its execution of this Lease, the sums specified in clause (i) above. If Tenant is
unable to obtain possession of the Premises because one (1) or more of the above items are
not received by Landlord, the Opening Date (as hereinafter defined}, the Term Commencement
Date, Tenant's Completion Date (as hereinafter defined) and the Rent Commencement Date
shall not be affected or delayed thereby.
2.4 Easements. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications affecting all or any part of the Premises as
Landlord deems necessary or desirable, and to cause the recordation of parcel and subdivision
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maps and restrictions affecting all or any part of the Premises, so long as such easements,
rights, dedications, maps and restrictions do not unreasonably interfere with Tenant's use of
the Premises. Tenant shall sign any of the aforementioned documents upon Landlord's request
and Tenant's failure to do so or breach of this Section shall constitute a material default under
this Lease. Tenant shall cooperate with and not oppose or object to Landlord's construction,
development, subdivision and parcelization of all or any part of the Premises and any property
adjacent to the Premises.
2.5 Existing Equipment. Landlord hereby grants Tenant the right to use any
and all existing furniture and equipment ("Existing Equipment"), if any, used by the prior tenant
of the Premises and located within the Premises on the Term Commencement Date. Tenant
acknowledges that it shall accept the Existing Equipment in its "AS IS" condition, without
representation or warranty by Landlord. Said right shall be coterminous with this Lease and
upon such termination, the Existing Equipment shall be deemed to constitute part of the
Premises and surrendered by Tenant to Landlord in good condition and repair, ordinary wear
and tear and damage from casualty excepted.
ARTICLE 3
TERM
3.1 Term. The Term of this Lease ("Term") shall commence on the Term
Commencement Date and shall expire, unless sooner terminated in accordance with this Lease,
on the Expiration Date. After the Rent Commencement Date, upon Landlord's request, Tenant
shall promptly execute a Memorandum of Term Commencement in the form attached hereto
as Exhibit B, which shall specify the Term Commencement Date, Rent Commencement Date
and the Expiration Date. If Tenant fails to execute a Memorandum of Term Commencement,
such failure shall not affect Tenant's obligation to commence paying rent upon the occurrence
of the Rent Commencement Date.
3.2 Extension Option. Landlord hereby grants to the Tenant originally
named in this Lease ("Original Tenant") one (1) options to extend the Term for a period of five
(5) years each (each an "Extension Term"), commencing upon the expiration of the Term or
prior Extension Term, as applicable. Each such option shall be exercisable only if Tenant is not
then in default under this Lease and no event has occurred which, with notice or the passage of
time or both, would constitute a default by Tenant under this Lease. Each such option shall be
exercisable by Original Tenant by delivery of written notice to Landlord ("Tenant's Extension
Notice") at least one hundred eighty (180) days prior to the commencement of the applicable
Extension Term, but not more than two hundred seventy (270)-days prior to the
commencement of the applicable Extension Term. The option is personal to the Original Tenant
and may only be exercised by the Original Tenant if it then occupies all of the Premises.
Notwithstanding the foregoing, Landlord shall have the right to disapprove such extension if
such extension would interfere with Landlord's future development plans involving the
Premises, provided that Landlord delivers notice of such disapproval ("Disapproval Notice") to
Tenant within thirty (30) days after receipt of Tenant's Extension Notice. If Tenant fails to
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deliver Tenant's Extension Notice as provided above or if Landlord delivers a Disapproval Notice
as provided above, then Tenant's options to extend as to the applicable Extension Term and
any future Extension Term shall forever terminate and be of no further force or effect. In the
event Tenant exercises an option to extend and Landlord does not deliver a Disapproval Notice,
the Term and all of the terms and conditions of this Lease shall continue in full force and effect
to the end of the applicable Extension Term, except that the Base Rent shall be adjusted as
follows:
(a) Base Rent for the first twelve (12) months of each Extension Term
shall be the greater of (a) the Fair Market Rental Value (defined below), or (b) one hundred
three percent (103%) of the monthly Base Rent applicable immediately prior to the
commencement of such Extension Term, and Base Rent shall increase every twelve (12) full
calendar months thereafter by three percent (3%). As used herein, "Fair Market Rental Value"
means the prevailing rent for premises comparable in size and use to the Premises, in a similar
location in Carlsbad, taking into consideration all allowances for tenant improvements, moving
expenses, landlord expenses, rent abatement, brokerage expenses, tenant benefits or any
other market concessions which may be commonly available at the commencement of such
Extension Term.
(b) Within sixty (60) days after receipt of Tenant's Extension Notice,
Landlord shall deliver notice to Tenant of Landlord's determination of the Fair Market Rental
Value for the applicable Extension Term. Tenant shall have twenty (20) days to either agree
with Landlord's determination, or notify Landlord that Tenant disagrees with Landlord's
determination of the Fair Market Rental Value ("Objection Notice"). If Tenant delivers an
Objection Notice, Landlord and Tenant shall work together in good faith to agree upon the Fair
Market Rental Value for the Extension Term. When Landlord and Tenant have agreed upon the
Fair Market Rental Value for the Premises, such agreement shall be reflected in a Lease
amendment reflecting the renewal and new Base Rent, with all of the other terms and
conditions remaining as provided in this Lease. Notwithstanding the foregoing, if Landlord and
Tenant are unable to agree upon the Fair Market Rental Value for the Extension Term within
thirty (30) days after the date of Tenant's Objection Notice (the "Agreement Deadline"), the
dispute resolution provisions below shall apply.
(c) Dispute Resolution Procedure:
(i) If Landlord and Tenant are unable to agree upon the Fair
Market Rental Value for the Extension Term by the Agreement Deadline, then within 5 days
thereafter Landlord and Tenant shall each simultaneously submit to the other, in a sealed
envelope, its good faith estimate of the Fair Market Rental Value for the Extension Term
(collectively, the "Estimates"). If the higher of such Estimates is not more than 105% of the
lower of such Estimates, the Fair Market Rental Value shall be deemed to be the average of the
two Estimates. Otherwise, within 7 days after the exchange of Estimates, Landlord and Tenant
shall each select an appraiser to determine which of the two Estimates most closely reflects the
Fair Market Rental Value for the Extension Term. As used herein, the term "appraiser" shall be
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mean a real estate broker licensed with the State of California who has had at least 10 years'
experience as a real estate broker working in San Diego County, with working knowledge of
current rental rates and leasing practices relating to premises similar to and within the location
of the Premises.
(ii) If each party selects an appraiser in accordance with
subsection (i) above, the parties shall cause their respective appraisers to work together in
good faith to agree upon which of the two Estimates most closely reflects the Fair Market
Rental Value for the Extension Term. The Estimate, if any, so agreed upon by such appraisers
shall be final and binding on both parties as the Fair Market Rental Value for the Extension
Term and may be entered in a court of competent jurisdiction. If the appraisers fail to reach
such agreement within 20 days after their selection, then, within 10 days after the expiration of
such 20-day period, the parties shall instruct the appraisers to select a third appraiser meeting
the above criteria (the "Final Appraiser") (and if the appraisers fail to agree upon such third
appraiser within 10 days after being so instructed, either party may cause a court of competent
jurisdiction to select such third appraiser). Notwithstanding the foregoing, if only one of the
parties had selected an appraiser within the 7-day period described above, then such appraiser
shall be the Final Appraiser. Promptly upon determination of the Final Appraiser, the parties
shall instruct the Final Appraiser to determine, as soon as practicable but in any case within 14
days after determination of the Final Appraiser, which of the two Estimates most closely
reflects the Fair Market Rental Value. Such determination by the Final Appraiser shall be final
and binding on both parties as the Fair Market Rental Value for the Extension Term and may be
entered in a court of competent jurisdiction. If the Final Appraiser believes that expert advice
would materially assist him or her, he or she may retain one or more qualified persons to
provide such expert advice. The parties shall share equally in the costs of the Final Appraiser
and of any experts retained by the Final Appraiser. Any fees of any other appraiser, counsel or
expert engaged by Landlord or Tenant shall be borne by the party retaining such appraiser,
counsel or expert.
(iii) If the Fair Market Rental Value has not been determined
by the commencement date of the Extension Term, Tenant shall pay Base Rent for the
Extension Term upon the terms and conditions in effect during the last month ending
immediately prior to the commencement of the Extension Term until such time as the Fair
Market Rental Value has been determined. Upon such determination, the Base Rent for the
Extension Term shall be retroactively adjusted. If such adjustment results in an underpayment
of Base Rent by Tenant, Tenant shall pay Landlord the amount of such underpayment with or
against the next Base Rent due under this Lease.
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. "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,
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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. If Landlord so elects, 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 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 3.3 above shall constitute a
holdover shall not be considered a renewal of this Lease or an extension of the Term. In the
event of any such holdover Base Rent shall immediately be increased to an amount equal to
150% of the Base Rent applicable during the month immediately preceding the expiration or
termination. In addition to paying Landlord the increased Base Rent, Tenant shall defend,
indemnify, protect and hold Landlord harmless from and against all claims, liability, damages,
costs and expenses, including attorneys' fees and costs of defending the same, incurred by
Landlord and arising directly or indirectly from Tenant's holding over in the Premises without
Landlord's express written consent, including (a) any rent payable by or any loss, cost or
damages, including lost profits and loss of good will claimed by any prospective tenant of the
Premises, and (b) Landlord's damages as a result of such prospective tenant's rescinding or
refusing to enter into the prospective lease of the Premises as a direct or indirect result of
Tenant's holding over. No action by Landlord other than Landlord's express written consent
shall be construed as consent by Landlord to any holding over by Tenant.
3.5 Waiver of Relocation Benefits: Tenant understands this Lease is entered
into for a specified period of time. Tenant therefore waives any and all relocation benefits
defined in the California Relocation Assistance Law (Government Code, Section 7260, et. seq.).
ARTICLE 4
CONSTRUCTION AND OPENING DATE
4.1 Construction. Tenant, at its sole cost and expense, shall commence
construction of Tenant's Work as described in Exhibit C and more particularly described in the
Final Plans for such work that have been approved by Landlord, promptly upon delivery of
possession of the Premises to Tenant, and shall diligently prosecute the same to completion on
or before the Opening Date in accordance with Article 12 below.
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4.2 Opening Date. Tenant shall open for business to the public in the
Premises on or before January 31, 2019 (the "Opening Date") and shall continuously operate
Tenant's business in accordance with this Lease.
4.3 Certificates. Within ten (10) days after Tenant initially opens for business
to the public in the Premises, Tenant shall: (i) execute and deliver to Landlord a valid notice of
completion of Tenant's Work in accordance with Section 3093 of the California Civil Code, as
amended or recodified from time to time ("Tenant's Certificate of Completion") in recordable
form and (ii) deliver to Landlord a valid Certificate of Occupancy for the Premises issued,by the
appropriate governmental agency. Landlord shall have the right to record or cause Tenant to
record Tenant's Certificate of Completion in the official records of the County Recorder's Office
of San Diego County.
ARTICLE 5
RENT
5.1 General Provisions. As used herein, "rent" shall mean Base Rent,
Percentage Rent and Additional Rent (defined below). Unless provided herein to the contrary,
Tenant shall pay all rent to Landlord at Landlord's Address for Rent Payments provided in
Article 1 above. All rent shall be paid to Landlord in lawful money of the United States of
America without demand therefor, and without deduction, offset or abatement of any kind,
except as may be expressly provided for in this Lease. Rent for any partial month shall be
prorated on the basis of a thirty (30) day month. Tenant assumes all risk of loss if payments are
made by mail.
5.2 Payment of Base Rent. For each month or partial month of the Term
commencing on the Rent Commencement Date (except as otherwise expressly provided
herein), Tenant shall pay to Landlord the sum specified in Article 1 as Base Rent ("Base Rent")
in advance as set forth herein. Tenant shall pay the first installment of Base Rent to Landlord
concurrently with Tenant's execution of this Lease, and all subsequent installments of Base
Rent shall be payable in advance on or before the monthly anniversary of the Rent
Commencement Date.
5.3 Payment of Percentage Rent. Within thirty (30) days after the end of
each Lease Year, Tenant shall: (i) pay to Landlord the Percentage Rent computed for such Lease
Year by multiplying the Gross Sales for such Lease Year in excess of the Rent Breakpoint by the
Percentage; and (ii) furnish to Landlord a Gross Sales Report (defined below) together with a
copy of the state sales tax returns for such Lease Year. Tenant shall require its licensees and
concessionaires, if any, to furnish similar statements. During any Lease Year in which Tenant
occupies the Leased Premises for less than twelve (12) months, the Rent Breakpoint will be
adjusted on a proportionate basis. All obligations hereunder shall survive the termination of the
Lease.
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5.4 Gross Sales Reports. Within thirty {30) days after the end of each month
of each Lease Year, Tenant shall provide to Landlord a written statement of Gross Sales for the
applicable month certified as correct by Tenant (a "Gross Sales Report"). The term "Gross
Sales" as used in this Lease shall mean the aggregate selling price of all food, beverages, goods,
merchandise and services sold or delivered from any part of the Premises by Tenant and
Tenant's occupants and shall include, without limitation, the following: (a) the entire amount of
the actual sales price, whether for cash, credit, charge or otherwise, charged or received by
Tenant from the sale of food, goods, beverages, services and other merchandise (including gift
and merchandise certificates) in and from the Premises, whether the order for food, goods,
beverages, services and other merchandise is placed at the Premises and whether filled at the
Premises or at another location; (b) the entire amount of fees received for services; and (c) all
other receipts, cash, credits and property of any kind or nature, any amount for which credit is
allowed by the seller to the purchaser (without any deduction therefrom on account of the cost
of the property sold, the cost of materials used, labor or service costs, interest paid or payable,
losses or any other expenses whatsoever), including, without limitation (1) sales through
vending machines or other devices including coin telephones, and audio and video games, (2)
sales to employees, (3) deposits not refunded to purchasers, (4) sales from solicitations,
regardless of where conducted, by personnel operating from, or reporting to any person at the
Premises, and (5) sales by any sublessee, concessionaire or licensee or otherwise in or from the
Premises. Gross Sales shall not include: (i) the amount of any tax imposed on or with respect to
retail sales whether imposed upon the retailer or upon the consumer and regardless of whether
or not the amount of tax is stated to customers as a separate charge, or any state, or local sales
or use tax required by law to be included in or added to the purchase price and collected from
the consumer or purchaser, or such part of the sales price of any property previously sold and
returned by the purchaser to the seller which is refunded by the seller by way of cash or credit
allowances given or taken as part of payment on any property so accepted for resale; (ii)
receipts from the sale or the trade-in value of any furniture, trade fixtures or equipment used
on the Premises, and owned by Tenant; (iii) the value of any merchandise, supplies or
equipment exchanged or transferred from or to other business locations of Tenant where such
exchanges or transfers are not made for the purpose of avoiding a sale by Tenant which would
otherwise be made from or at the Premises; (iv) receipts in the. form of refunds from or the
value of merchandise, supplies, or equipment returned to shippers, suppliers or manufacturers;
(v) the amount of any cash or quantity discounts received from sellers, suppliers, or
manufactures; (vi) the amounts of any discounts given to Tenant's employees; or (vii)
reasonable and verifiable purchases by employees or their immediate family members of
supplies and equipment for personal use.
5.5 Additional Rent. Except for Base Rent and Percentage Rent, all amounts
which Tenant is required to pay to Landlord under this Lease shall be treated as "Additional
Rent", and shall be paid when due as provided in this Lease.
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ARTICLE 6
SECURITY DEPOSIT
6.1 Security Deposit. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the security deposit specified in Article 1 ("Security
Deposit"). Landlord shall hold the Security Deposit as security for Tenant's faithful performance
of all the terms, covenants, and conditions of this Lease. Landlord shall not be required to keep
the Security Deposit separate from Landlord's general funds. Landlord shall have the right to
commingle the Security Deposit with Landlord's general funds and to retain any and all interest
and earnings on the Security Deposit. Tenant shall not be entitled to any interest on the
Security Deposit. Subject to Landlord's right hereunder to apply the Security Deposit in
accordance with this Section, the parties acknowledge that the Security Deposit does not cover
any rent hereunder. In the event of a sale of the Premises or assignment of this Lease by
Landlord to any person other than a mortgagee, Landlord shall have the right to transfer the
Security Deposit to its vendee or assignee, subject to Tenant's aforesaid rights upon
termination, and thereupon Landlord shall be released and relieved from any liability with
respect to the return of such Security Deposit to Tenant, such vendee or assignee to be solely
responsible to Tenant therefor.
6.2 Use of Security Deposit. If Tenant breaches or fails to perform any of
Tenant's obligations under this Lease, Landlord shall have the right, but not the obligation, to
use or retain all or any part of the Security Deposit to cure the breach or failure of performance,
and to compensate Landlord for any damages sustained by Landlord, including but not limited
to payment of: (i) delinquent rent; (ii) interest on delinquent rent; (iii) late charges on
delinquent rent; (iv) the cost of performing any of Tenant's obligations under this Lease; (v) the
cost of repairing damages to the Premises; (vi) the cost of cleaning, maintaining, repairing,
restoring or reletting the Premises; (vii) attorneys' and accountants' fees and disbursements
and court costs; (viii) brokerage commissions and finders' fees; and (ix) interest on any and all
of the above at the maximum lawful rate ("Remedy Rate") from the date due until paid;
provided, however, that retention of all or any part of the Security Deposit shall not affect
Tenant's obligations under this Lease or Landlord's other rights and remedies provided at law,
in equity, or under this Lease; and provided, further, that in the event that Landlord elects to
apply the Security Deposit or any portion thereof as herein provided, such application and the
amounts applied to particular items of cure and/or compensation shall be determined by
Landlord in Landlord's sole and absolute discretion. If any portion of the Security Deposit is
used as provided for in this Section, then within 10 days after written demand by Landlord,
Tenant shall deposit with Landlord sufficient cash to restore the Security Deposit to its original
amount. Tenant's failure to make this deposit shall be a default under this Lease.
6.3 Refund and Transfer; Waiver of Statutes. If Tenant shall have fully and
faithfully performed all of Tenant's obligations under this Lease (or upon the earlier termination
without Tenant's fault), has cleaned and repaired any damage, and has received invoices for
such repair or cleaning costs, if any, and after Landlord has inspected the Premises, then
Landlord shall return the Security Deposit or any balance thereof to Tenant. Landlord may
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transfer the Security Deposit, or that portion remaining after any deduction, to Landlord's
successor-in-interest and shall upon such transfer be discharged from any further liability with
respect to such Security Deposit. Tenant hereby waives (i) California Civil Code Section 1950.7,
as amended or recodified from time to time, and any and all other laws, rules and regulations,
now or hereafter in force, applicable to security deposits in the commercial context ("Security
Deposit Laws"), and (ii) any and all rights, duties and obligations Landlord may now or, in the
future, will have relating to or arising from the Security Deposit Laws. Notwithstanding
anything to the contrary contained herein, the Security Deposit may be retained and applied by
Landlord (a) to offset rent which is unpaid either before or after the termination of this Lease,
and (b) against other damages suffered by Landlord before or after the termination of this
Lease, whether foreseeable or unforeseeable, caused by the act or omission of Tenant or any
officer, employee, agent or invitee of Tenant.
ARTICLE 7
TAXES
7.1 Real Estate Taxes. Tenant shall pay directly prior to delinquency any and
all real estate taxes, assessments (whether general, special, ordinary or extraordinary),
possessory interest taxes, improvement bonds, license fees, commercial rental taxes, sewer
and water rents and other levies, fees and charges of every kind imposed by any authority
having the direct or indirect power to so tax, levy or assess, to the extent relating to the
Premises, to Landlord's gross receipts or revenues from the Premises, or to the business or
other activities of Tenant upon or in connection with the Premises. In particular, Tenant
acknowledges that this Lease may result in a taxable possessory interest. Tenant shall be solely
responsible for payment of property taxes associated with its occupancy of the Premises, if any
apply. Tenant shall also pay any fees imposed by law for licenses or permits for any business or
activities of Tenant upon the Premises or under this Lease.
7.2 Personal Property Taxes. Tenant shall pay directly prior to delinquency
any and all taxes and assessments levied or assessed during the Term upon or against
(i) Tenant's Property (as hereinafter defined), furniture, equipment, and any other personal
property installed or located in the Premises and (ii) all above-standard alterations, additions,
betterments, or improvements of whatever kind or nature made by Tenant to the Premises
that are separately assessed. Whenever possible.
ARTICLE 8
UTILITIES
8.1 Payment of Utilities. Landlord shall provide electric, water and sewer
utility services, landscape maintenance, and general maintenance to the Premises as part of the
overall Library maintenance. The City shall not be liable for any loss or damage caused by, or
resulting from, any variation, interruption, or failure of any utility services due to any cause.
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8.2 Interruption of Utilities. Landlord shall have the right (but not the
obligation), with notice to Tenant, or without notice in the case of an emergency, to shut off
water, gas, electricity and any all other utilities and services whenever such discontinuance is
necessary to make repairs or alterations or to protect the Premises. In no event shall Landlord
be liable for the quality, quantity, failure or interruption of any such utilities or services to the
Premises. In addition, any such failure, interruption or impairment shall not be construed as an
eviction of Tenant or a disturbance of Tenant's possession, and Tenant shall not be entitled to
any abatement of rent.
ARTICLE 9
INSURANCE
9.1 General. Tenant shall, at its expense, maintain in effect from and after
the Term Commencement Date and continuously thereafter until the termination or expiration
of this Lease, the policies of insurance required under this Article. All policies that Tenant is
required to obtain under this Article shall be issued by companies licensed to do business in
California with a general policyholder's rating of not less than "A-" and a financing rating of not
less than Class "VIII", as rated by the most current available "Best's" Insurance Reports and
shall be in a form (without any additions or deletions unless approved in writing by Landlord)
and underwritten by companies acceptable to Landlord. On or before the Term
Commencement Date, Tenant shall furnish Landlord with certificates and endorsements in a
form acceptable to Landlord evidencing that (i) the policies (or a binder thereof) required
pursuant to this Article are in effect and (ii) Landlord shall be notified in writing thirty {30) days
prior to cancellation, material change, or nonrenewal of such insurance. The policies that
Tenant is required to obtain pursuant to this Article shall name Landlord, and any other parties
requested by Landlord, as additional insureds, or as loss payee (as applicable) for property
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, even if use is for purposes stated herein, 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.
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9.2 Commercial General Liability Insurance. Tenant shall obtain and keep in
force a policy or policies of commercial general liability insurance covering the Premises and the
business operations thereon, including contractual liability, personal injury and property
liability coverage in amounts not less than a combined single limit of $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.
9.3 Property and Extended Coverage Insurance. Tenant shall obtain and
keep in force a Causes of Loss -Special Form property insurance policy (formerly known as "all
risks"), including vandalism, malicious mischief, earthquake and sprinkler leakage coverage,
covering one hundred percent (100%) of the replacement cost of all Tenant's Property, 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
$1,000.00 per occurrence. The proceeds from any such insurance shall be used by Tenant for
the replacement of personal property and trade fixtures as well as alterations and utility
installations.
9.4 Business Interruption. Tenant shall obtain and keep in force loss of
income and extra expense insurance in amounts as will reimburse Tenant for at least twelve
(12) months' direct and indirect loss of earnings attributable to all perils commonly insured
against by prudent tenants in the business of Tenant or attributable to prevention of access to
the Premises as a result of such perils.
9.5 Workers' Compensation Insurance. Tenant shall obtain and keep in
force workers' compensation and employer's liability insurance covering all employees of
Tenant engaged on or with respect to the Premises, affording applicable statutory limits for
workers' compensation coverage and at least $1,000,000.00 in limits for employer's liability
coverage.
9.6 Automobile Insurance. Tenant shall obtain and keep in force
comprehensive automobile liability insurance with a combined single limit of at least
$1,000,000 per occurrence for claims arising out of any owned, non-owned or hired
automobiles.
9.7 Waiver of Subrogation. Notwithstanding anything to the contrary
contained herein, Landlord and Tenant hereby waive any rights each may have against the
other on account of any loss or damage occasioned to Landlord or Tenant, their respective
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property, the Premises or its contents, arising from any risk to the extent covered by the
insurance required hereunder. The parties each, on behalf of their respective insurance
companies insuring the property of either Landlord or Tenant against any such loss, waive any
right of subrogation that it may have against Landlord or Tenant, as the case may be. Each
party shall obtain any special endorsements, if required by its insurer, whereby the insurer
waives its rights of subrogation against the other party. The foregoing waivers of subrogation
shall be operative only so long as available without invalidating either Landlord's or Tenant's
policy of insurance.
9.8 Coverage Changes. Notwithstanding any of the foregoing, Landlord shall
retain the right at any time to review the coverage, form, and amount of the insurance required
under this Lease. If, in the opinion of Landlord, the insurance provisions in this Lease do not
provide adequate protection for Landlord and/or for members of the public using the Premises,
Landlord may require Tenant to obtain insurance sufficient in coverage, form and amount to
provide adequate protection. Landlord's requirements shall be reasonable but shall be
designed to assure protection from and against the kind and extent of risk, which exist at the
time a change in insurance is required. Landlord shall notify Tenant in writing of changes in the
insurance requirements and, if Tenant does not deposit certificates/endorsements evidencing
acceptable insurance policies with Landlord incorporating such changes within thirty (30} days
of receipt of such notice, this Lease shall be in default without further notice to Tenant, and
Landlord shall be entitled to all legal remedies.
ARTICLE 10
USE OF PREMISES
10.1 Permitted Use and Continuous Operation. Tenant shall actively and
continuously use, operate and occupy the Premises solely for the Permitted Use, and shall be
open to the public during Tenant's Business Hours. 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 Tenant's Trade Name specified in Article 1 above and under no other
name without Landlord's prior express written consent. Notwithstanding anything to the
contrary contained in this Lease, with prior written notice to Landlord, the Premises may be
closed to the extent reasonably necessary due to Force Majeure.
Tenant and Landlord agree on a written annual Operational Guidelines regarding the general
parameters of Tenants use and occupation of the Premises, attached hereto as Exhibit D. The
Operational Guidelines may be amended annually by the Landlord within thirty {30) days after
December 31 of each calendar year.
10.2 Conduct of Business. Tenant shall conduct its business at all times in a
first-class, professional and businesslike manner consistent with reputable business standards
and pr'actices.
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10.3 Compliance with Laws; Nuisance. Tenant shall, at its sole expense and at
all times, comply fully with (i) all federal, state and municipal laws, including without limitation
all zoning and land use laws and ordinances, conditional use permit rules and orders and the
Liquor Licenses, now in force or which may hereafter apply to the Premises or which impose
any duty on Landlord or Tenant relating to the use or occupancy of the Premises, including but
not limited to the obligation to obtain a conditional use permit, alter, maintain, repair or
restore the Premises in compliance and conformity with all such laws, rules and orders, (ii) any
declaration of covenants, conditions and restrictions and easements encumbering the
Premises, (iii) any 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 neither store, use or sell any article in or about
the Premises, nor permit any act, that would cause the premiums for insurance to increase or
cause a cancellation of any policy upon the Premises. Tenant shall not occupy, suffer or permit
the Premises or any part thereof to be used for any illegal, immoral or dangerous purpose, or in
any other way contrary to the law or the rules or regulations of any public authority. Tenant
shall not commit, or suffer to be committed, any waste upon the Premises, or any public or
private nuisance, or any other act or thing which may disturb the quiet enjoyment of neighbors
of the Premises. Tenant shall not conduct or permit to be conducted any sale by auction in,
upon or on the Premises.
10.4 Restaurant Use. For so long as Tenant's permitted use includes the sale
of and/or preparation of food: (a) Tenant shall at all times maintain a health department rating
of "A" (or such other highest health department or similar rating as is available); and (b) in
connection with Tenant's obligations under this Lease, Tenant shall be responsible for any and
all construction, health, safety, liability and legal regulations and other matters related to
Tenant's grease trap(s) and any recycled oil drum system, including (without limitation)
contracting with a qualified service company for routine cleaning and maintenance of any
trap(s) and/or grease lines which serve the Premises. Tenant shall install grease trap(s) and any
recycled oil drum system as part of Tenant's Work and in accordance with the provisions
relating to Tenant's Work. Any recycled oil drum system shall be subject to Landlord's review
and approval of the system and Tenant's operational plan for the use of same. If the governing
agency approving Tenant's plans and specifications does not allow the use of the recycled oil
drum, Tenant shall accommodate within its plans and specifications and at its sole cost and
expense, whatever alternate system is required or permitted by the governing agency, if any.
All maintenance, repair and replacement associated with the grease trap(s) and any recycled oil
drum or alternative system, and the future replacement costs thereof, as well as all potential
loss associated with such equipment or any liability to persons or property associated therewith
shall be at the sole cost and liability of Tenant. Tenant shall perform any steam cleaning or pest
control services necessary to maintain first class cleanliness, health and safety standards
relating to such equipment and, upon written notice from Landlord, will provide Landlord with
a copy of a contract for such services, which services must be provided by a company or
companies reasonably approved by Landlord.
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10.5 Environmental Compliance. Tenant represents, warrants and co'venants
to Landlord that Tenant 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. Tenant shall assume sole and full responsibility and cost to
remedy any such violations. Tenant further represents, warrants and covenants to Landlord
that Tenant shall not cause or permit any Hazardous Substance to be spilled or released in, on,
under or about the Premises (except for supplies typically used in the ordinary course of
operating a restaurant in commercially reasonable amounts and in strict compliance with law)
and shall promptly, at Tenant's 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 or
neighboring properties, that was caused or materially contributed to by Tenant, or pertaining to
or involving any Hazardous Substance brought onto the Premises during the term of this Lease,
by or for Tenant, or any third party. The term "Hazardous Substance" as used in this Lease shall
mean any product, substance, or waste whose presence, use, manufacture, disposal,
transportation, or release, either by itself or in combination with other materials expected to be
on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any government authority, or (iii) a
basis for potential liability of Landlord to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substances shall include, but not be
limited to, asbestos, asbestos containing material, the group of organic compounds known as
polychlorinated biphenyls, as well as substances defined as "hazardous substances" or "toxic
substances" under State, local or federal laws or regulations, as they be enacted or
promulgated from time to time.
10.6 Landlord's Right of Entry. Landlord, at reasonable times, may go into the
Premises without any liability for the purposes of: (i) inspecting the Premises; (ii) inspecting the
performance by Tenant of the terms and conditions hereof; (iii) showing the Premises to
prospective tenants, purchasers, partners, or mortgagees; and (iv) posting notices for the
protection of Landlord on the Premises. Except in the case of an emergency, Landlord shall give
Tenant reasonable notice of any and all intended entries or inspections pursuant to this
Section.
10.7 Prohibition Against Discrimination. Tenant shall not discriminate against
or segregate any person or class of persons by reason of sex, color, race, religion or national
origin. If the use provided for in this Lease allows Tenant to offer accommodations or services
to the public, such accommodations or services shall be offered by Tenant to the public on fair
and reasonable terms.
ARTICLE 11
MAINTENANCE AND REPAIR OF PREMISES
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11.1 Tenant's Inspection. Tenant accepts the Premises in its "AS IS" condition
as further provided in Section 2.2 above, and Tenant expressly waives all implied warranties
including implied warranties of merchantability and fitness, if any. Tenant hereby waives all
rights under Sections 1941 and 1942 of the California Civil Code, as amended or recodified from
time to time, or any similar provision, permitting Tenant to make repairs at the expense of
Landlord. Tenant represents and warrants that it has inspected and conducted tests and
studies of the Premises, and that it is familiar with the condition of the Premises. Tenant
understands and acknowledges that the Premises may be subject to earthquake, fire, floods,
erosion, high water table, dangerous underground soil and water conditions and similar
occurrences that may alter its condition or affect its suitability for any proposed use. Landlord
shall have no responsibility or liability with respect to any such occurrence.
11.2 Tenant's Obligations. 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 first-class order and 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) the roof, foundation and
structural portions of the Premises, painting, plumbing, fixtures, windows and glass, HVAC
systems, custodial, flooring, and appliances throughout the Term to maintain and preserve the
Premises in a good, safe, healthy and sanitary condition satisfactory to Landlord and in
compliance with all applicable laws; and (b) the obligations set forth in Section 10.4 above
relating to grease trap(s) and any recycled oil drum or alternative system; and (c) keeping the
Premises free and clear of trash, garbage and other fire hazards. The maintenance, repair and
replacement obligations set forth in this paragraph are a material part of the consideration for
this Lease.
11.3 Landlord's Obligations. Landlord shall have no obligation at any time to
maintain, repair or replace any portion of the Premises or to make any improvements, repairs
or replacements whatsoever on or for the benefit of the Premises.
11.4 Landlord's Cure. Landlord shall have the right but not the duty, to enter,
view, inspect, determine the condition of and protect its interests in, the Premises. If at any
time Landlord determines that the Premises are not in the condition required by this Lease,
then (a) Tenant shall perform the necessary maintenance, repair and/or replacement work
within ten (10) days after written notice from Landlord, and (b) Landlord may require Tenant to
file and pay for a faithful performance bond, to assure prompt correction without additional
notice, in an amount that is adequate, in Landlord's opinion, to correct the unsatisfactory
condition. 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
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rights reserved in this section shall not create any obligations or increase any obligations for
Landlord elsewhere in this Lease.
ARTICLE 12
ALTERATIONS AND ADDITIONS
12.1 Tenant Improvements. Tenant shall not commence Tenant's Work or
make (i) any alterations, improvements, additions or utility installations, including without limit,
carpeting, floor or window coverings, locks, air lines, power panels, electrical distribution
systems, lighting fixtures, space heaters, air conditioning and plumbing in, on, or about the
Premises or (ii) any change or alteration to the exterior of the Premises (collectively "Tenant
Improvements") without Landlord's prior written consent. If Tenant makes any Tenant
Improvements or commences Tenant's Work without the prior written approval of Landlord,
Landlord shall have the right to require that Tenant remove any or all of such Tenant
Improvements or Tenant's Work and repair and any restore damage to the Premises caused by
such removal at Tenant's sole expense and shall also have the right to declare Tenant in default
and to terminate this Lease. Tenant's Work and any Tenant Improvements shall at all times
comply fully with all applicable federal, state and municipal laws, ordinances, regulations, codes
and other governmental requirements now or hereafter in force and Tenant shall, at Tenant's
sole cost and expense, take all actions now or hereafter necessary to ensure such compliance.
Tenant shall provide Landlord with a written request for approval of Tenant's
Work or any Tenant Improvements that Tenant would like to make with proposed detailed
plans. Landlord shall have the right to condition Landlord's prior written consent upon
Tenant's: (i) obtaining a building permit and complying with all building and planning laws and
regulations for Tenant's Work or the Tenant Improvements from appropriate governmental
agencies; (ii) furnishing a copy of such building permit and evidence of such compliance to
Landlord prior to the commencement of such work; (iii) complying with all the conditions of
such building permit and such building and planning laws and regulations; (iv) providing
Landlord with plans and specifications for Tenant's Work or the Tenant Improvements for
Landlord's prior written approval or the consent of any other tenant, if required by such other
tenant's lease; (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 ten (10) days written notice prior to commencing any such work. Landlord's approval of
the plans, specifications and working drawings for Tenant's Work or any Tenant Improvements
shall create no responsibility or liability on the part of Landlord for their completeness, design
sufficiency, or compliance with all laws, rules and regulations of governmental agencies or
authorities. Landlord shall not be liable for any damage, loss, or prejudice suffered or claimed
by Tenant, its agents or any other person or entity on account of: (a) the approval or
disapproval of any plans, contracts, bonds, contractors, sureties or matters; (b) the construction
or performance of any work whether or not pursuant to approved plans; (c) the improvement
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of any portion of the Premises or alteration or modification to any portion of the Premises; or
(d) the enforcement or failure to enforce any of the covenants, conditions and restrictions
contained in this Lease. Under no circumstances shall Tenant make any roof penetrations
without the prior written consent of Landlord. Any consent of Landlord shall be conditioned
upon Landlord's review and approval of plans satisfactory to Landlord for the repair of the roof.
Any roof penetrations may be inspected by Landlord's roofing contractor, and Tenant shall
reimburse Landlord for the cost of such inspection and any necessary repair work within ten
(10) days after Tenant's receipt of an invoice therefor.
12.2 Construction of Tenant Improvements; Liens. Tenant shall pay when
due all claims for labor or materials furnished or alleged to have been furnished to or for
Tenant at, on, or for use in the Premises, and shall defend, indemnify, protect and hold
harmless the Premises and Landlord against the same (including, without limitation, the costs
of defending against such claims, and reasonable attorney's fees incurred therein). Tenant shall
keep the Premises and any interest therein, free and clear of all mechanics' liens and all other
liens. Tenant shall give Landlord immediate written notice of any lien filed against the Premises
or any interest therein related to or arising from work performed by or for Tenant. Tenant shall
give Landlord not less than ten (10) days' prior written notice of the commencement of
Tenant's Work or any Tenant Improvements in the Premises, and Landlord shall have the right
to post notices of nonresponsibility in or upon the Premises as provided by law. If any lien or
levy of any nature whatsoever is filed against the Premises or Tenant's leasehold interest, then
upon Landlord's request, Tenant shall furnish to Landlord a corporate surety bond, satisfactory
to Landlord, in an amount equal to one and one-half (1 Yz) times the amount of the claims upon
which such lien or levy has been filed. Such bond shall be acknowledged by Tenant as principal
and by a corporation, licensed by the Insurance Commissioner of the State of California to
transact the business of a fidelity and surety insurance company, as surety. Landlord shall have
the right to declare this Lease in default in the event the bond required by this paragraph has
not been deposited with Landlord within ten {10) days after written request has been delivered
to Tenant.
12.3 Title to Tenant Improvements. Subject to Section 13.1 below, any and all
Tenant's Work and Tenant Improvements which may be made in or upon the Premises shall
become the property of Landlord and remain upon and be surrendered with the Premises at
the expiration of the Term without compensation to Tenant unless Landlord requires that
Tenant remove the Tenant's Work and/or the Tenant Improvements pursuant to Article 13
below.
12.4 Signs. Tenant shall be responsible for purchasing, installing and
maintaining, at Tenant's sole cost, exterior signage in accordance with the signage regulations
set forth by the City of Carlsbad and any other sign criteria provided by Landlord (collectively,
"Sign Criteria") and which has received Landlord's prior written consent. In accordance with
the Sign Criteria, Tenant shall maintain such signage in good condition and repair during the
entire Term of this Lease. Tenant shall repair, at its sole cost and expense, any damage to the
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Premises caused by the erection, maintenance or removal of any sign, marquee, banner,
awning, decoration or other attachment.
12.5 Compliance with Prevailing Wage Laws. Tenant acknowledges and
agrees that: (a) any construction, alteration, demolition, installation or repair work performed
under this Lease constitutes "public work" under California Prevailing Wage Law, including
Labor Code sections 1720 through 1815, et seq. (the "PWL"), and will obligate Tenant to cause
such work to be performed as a "public work," including, but not limited to, the payment of
applicable prevailing wages to the all persons or entities subject to the PWL; (b) Tenant shall
cause all persons and/ or entities performing "public work" under this Lease to comply with all
applicable provisions of the PWL; (c) Landlord is not responsible for Tenant's failure to comply
with any applicable provisions of the PWL; (d) Tenant's alleged or actual violations of the PWL
shall constitute an event of default under this Lease; and (e) Tenant shall defend and indemnify
Landlord and its officers, employees, council members and agents from and against any and all
claims, assessments, back-wages, penalties, change orders, suits, liability, judgments, damages,
proceedings, orders, directives, 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 Lessee, performing
construction, alteration, demolition, installation, repair and/ or any other type of work
contemplated under this Lease.
ARTICLE 13
TENANT'S PROPERTY
13.1 Tenant's Property. All trade fixtures, goods, inventory, merchandise,
stock, supplies, decorative light fixtures, and movable equipment owned by Tenant and
installed in the Premises at Tenant's sole cost and which may be removed without material
damage to the Premises {"Tenant's Property") shall remain the property of Tenant during the
Term. Except as provided to the contrary in Section 12.3 above, Tenant's Property shall be
removable from time to time and at the expiration of the Term or earlier termination thereof,
provided that: (i) Tenant shall not at such time be in default, or with notice or the passage of
time or both would be in default, under any term, covenant, condition or provision of this
Lease; (ii) Tenant shall repair to the satisfaction of Landlord, any damage to the Premises
caused by the removal of Tenant's Property; and (iii) Tenant immediately replaces any such
Tenant's Property with similar property of comparable or better quality to assure that the
Premises are suitable for conducting business in accordance with Articles 5 and 10 hereof.
13.2 Landlord's Lien. Subject to the rights of Tenant, if any, under
Section 9102{4) of the California Uniform Commercial Code, as amended or recodified from
time to time, Tenant hereby grants to Landlord a security interest in and lien upon Tenant's
Property and the proceeds thereof as security for Tenant's performance of all the terms,
covenants, conditions, provisions and obligations under this Lease. Upon Landlord's request,
Tenant shall execute a security agreement, UCC-1 financing statement, continuation statement
and such other documents as Landlord may reasonably require to evidence, create, protect,
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perfect and preserve the validity and priority of Landlord's lien upon and security interest in
Tenant's Property.
ARTICLE 14
DAMAGE AND DESTRUCTION
In the event of damage or destruction to the Premises by fire, the elements or
any other cause, Tenant shall, within ninety (90) days, commence and diligently pursue to
completion the repair, replacement or reconstruction of improvements 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). 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.
ARTICLE 15
EMINENT DOMAIN
15.1 Total or Substantial Taking. If all of the Premises are taken under the
power of eminent domain or such a substantial portion thereof is so taken that reasonable
restoration will not result in the Premises being reasonably suitable for the conduct of Tenant's
business, this Lease shall terminate on the date that Tenant is required to yield possession to
the condemning authority, or on the date that the possession of the Premises or part thereof is
taken, whichever is later. The term "eminent domain" shall include the exercise of any
governmental power of condemnation and any private sale or other transfer in lieu of or under
threat of condemnation.
15.2 Partial Taking. If there is a partial taking of the Premises, and after
restoration of any building or other improvements, the Premises would be reasonably suitable
for Tenant's continued occupancy and conduct of its business, Landlord, at its sole option, may
elect to terminate this Lease or affirm this Lease by delivering written notice to Tenant within
fifteen (15) days after any such partial taking. If Landlord fails to send any such written notice,
this Lease shall terminate on the later of the dates that possession is so taken or that Tenant or
Landlord is required to yield possession to the condemning authority. If Landlord elects to
affirm this Lease, then: (i) this Lease shall terminate as to the part taken as of the date of
transfer of possession; (ii) the rental shall be reduced in the same proportion as the square
footage of the portion of the Premises taken bears to the original square footage of the
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Premises; 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, rental shall be abated proportionately as set forth above. Tenant hereby
waives any statutory rights of termination which may arise by reason of any taking of the
Premises under the power of eminent domain.
15.3 Award. Tenant hereby renounces any interest in, and assigns to
Landlord, any award made in any condemnation proceeding for any such taking, provided that
Landlord shall have no interest in or be assigned any award made to Tenant for the taking of
Tenant's Property or for Tenant's relocation expenses. Tenant hereby specifically waives any
right it may have to any compensation award representing the excess of the market value,
immediately before the taking, of Tenant's leasehold interest in the portion of the Premises
taken over the rent attributable thereto under the terms of this Lease.
ARTICLE 16
INDEMNIFICATION
Tenant shall indemnify, protect, defend and hold harmless Landlord and its
agents, employees, officers, affiliates and representatives (collectively, "Landlord Parties")
from and against any and all losses, damages, liabilities, actions, causes of action (whether
legal, equitable or administrative), claims, judgments, costs, and expenses (including, without
limitation, reasonable attorneys' fees) arising as a direct or indirect consequence of any of the
following (except to the extent caused by the gross negligence or willful misconduct of Landlord
or any of Landlord Parties): (i) Tenant's failure to perform any of Tenant's obligations as and
when required by this Lease, or the failure at any time of any representation or warranty of
Tenant to be true and correct; (ii) the use and operation of the Premises during the Term; or
(iii) any act or omission by Tenant or any of Tenant's contractors, subcontractors or material
suppliers, engineers, architects, agents, employees, customers or invitees with respect to the
Premises. Tenant shall employ counsel satisfactory to Landlord, or at Landlord's option,
Landlord may retain its own counsel, at the expense of Tenant, to prosecute, negotiate and
defend any such claim, action or cause of action. Landlord shall have the right to compromise
or settle any such claim, action, or cause of action without admitting actual liability and without
Tenant's consent. Tenant shall pay any indebtedness arising under said indemnity to Landlord
immediately upon demand by Landlord together with interest thereon, at the Remedy Rate,
from the date such indebtedness arises until paid. Tenant's obligations under this section shall
survive the expiration or termination of this Lease.
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ARTICLE 17
DEFAULTS AND REMEDIES
17.1 Events of Default. The occurrence of any of the following events shall
constitute an event of default and a material breach of this Lease on the part of Tenant:
A. Abandonment or Failure to Continuously Operate. Tenant's
vacation or abandonment of the Premises or Tenant's failure to actively and continuously use,
operate and occupy the Premises.
B. Failure to Make Payment. Tenant's failure to pay any rent or
other sum due hereunder on the date when such payment is due, where such failure continues
for five (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 an.other provision of this
Lease.
E. Bankruptcy. The making of a general assignment for the benefit
of creditors by Tenant, or the filing of a voluntary or involuntary bankruptcy petition by or
against Tenant, or the appointment of a receiver to take possession of all or substantially all of
Tenant's assets or the Premises, or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets or the Premises, or in the event Tenant becomes insolvent or
fails to generally pay Tenant's debts as such debts become due.
F. Transfer without Consent. The occurrence of any Transfer
without Landlord's express prior written consent.
17.2 Remedies. Upon the occurrence of an event of default by Tenant as set
forth in Section 17.1 above, Landlord shall have the following rights and remedies, in addition
to any and all other rights and remedies available to Landlord at law or in equity, including
without limit those provided under California Civil Code Sections 1951.2 and 1951.4, as
amended or recodified from time to time:
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A. Terminate Lease. Landlord shall have the right to terminate this
Lease and all rights of Tenant hereunder by giving written notice to Tenant. If this Lease is so
terminated, then Landlord may recover from Tenant: (i) the worth at the time of award of any
unpaid rent that had been earned at the time of such termination; ~ (ii) the worth at the
time of award of the amount by which the unpaid rent which would have been earned from the
time of such termination until the time of award exceeds the amount of such rental loss Tenant
proves could have been reasonably avoided; ~ (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the Term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably avoided; ~ (iv) any
other amount necessary to compensate Landlord for all the actual and consequential damages
proximately caused by Tenant's failure to perform Tenant's obligations under this Lease or
which in the ordinary course of things would be likely to result therefrom; and (v) at Landlord's
election, such other amounts in addition to or in lieu of the foregoing as may be permitted from
time to time by applicable California law. 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 th.e Premises and store the Tenant's Property in a public warehouse or
elsewhere at.the cost of and for the account of Tenant.
C. Maintain Lease; Relet Premises. Landlord shall have the remedy
described in California Civil Code Section 1951.4 (lessor may continue lease in effect after
Tenant's breach and abandonment and recover rent as it becomes due, if Tenant has the right
to sublet or assign, subject only to reasonable limitations). Unless Landlord elects to terminate
this Lease as provided in Section 17.2(A) above, Landlord may from time to time, without
terminating this Lease, either recover all rent as it becomes due or relet the Premises or any
part thereof for such term or terms and at such rental or rentals and upon such other terms
and conditions as Landlord in its sole discretion may deem advisable, with the right to clean and
to make alterations and repairs to the Premises at Tenant's sole expense.
If Landlord elects to relet as provided herein, then rent received by Landlord
from such reletting shall be applied at Landlord's option: first, to the payment of any
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
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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 attorneys' fees, court costs, tenant
improvements customary to make the Premises ready to lease (including the removal of any
specialized improvements installed by Tenant) and brokerage commissions and in making any
alterations and repairs to the Premises.
No reentry, acts of maintenance or preservation, efforts to relet, or taking
possession of the Premises by Landlord or the appointment of a receiver upon initiative of
Landlord to protect Landlord's interest under this Lease shall be construed as an election to
terminate this Lease unless an express written notice of such intention is delivered to Tenant or
unless the termination thereof is decreed by a court of competent jurisdiction.
Notwithstanding any reletting of the Premises without termination of this Lease by Landlord,
Landlord may at any time after such reletting elect to terminate this Lease, in which case,
Landlord shall have all the rights and remedies provided by law or equity or this Lease upon
termination.
D. Performance by Landlord. If Tenant breaches or fails to perform
any of Tenant's obligations under this Lease and the breach or failure continues for thirty (30)
days (or· such shorter time period as may be specified otherwise in this Lease) after Landlord
gives Tenant written notice of the breach or failure, Landlord, without thereby waiving or
curing such may, but shall not be obligated to, perform any such obligation for the account and
at the expense of Tenant. Landlord may also so perform any such obligation without notice in
case of an emergency.
E. Receiver on Behalf of Landlord. If, at the instance of Landlord in
any action arising under this Lease, a receiver shall be appointed to take possession of the
Premises or to collect the rents derived therefrom, then the receiver may, if it shall be
necessary or convenient in order to collect such rents, conduct the business of Tenant then
being carried on in the Premises, and may take possession of any Tenant's Property and other
personal property and records used in Tenant's business and use the same in conducting such
business, without compensation to Tenant for such use. Neither application for, nor the
appointment of a receiver shall be construed as an election by Landlord to terminate this Lease,
unless express written notice of such election is given to Tenant. The fees and expenses of such
receiver shall be charged to Tenant as Additional Rent.
17.3 Late Charges. Landlord and Tenant agree that the fixing of actual
damages for Tenant's breach of any of the provisions of this Lease, including but not limited to
the late payment by Tenant to Landlord of rent and other amounts due hereunder, would cause
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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 Deed of Trust 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 ten percent (10%) 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 ofthis Lease to the contrary.
17.4 Interest on Past Due Obligations. Any and all amounts not paid to
Landlord when due, shall bear interest, compounded monthly from the date due until paid at
the rate of ten percent (10%). Payment of such interest shall not excuse or cure any default by
Tenant under this Lease and shall not affect any rights and remedies provided to Landlord in
this Lease or at law or in equity, all of which shall be cumulative. Notwithstanding the
foregoing, the City Manager of the City of Carlsbad shall have the right, in its sole discretion, to
waive for good cause any interest payment upon written application of Tenant for any such
delinquency period.
17.5 Waiver of Redemption. Tenant hereby expressly waives any and all
rights of redemption granted by or under any present or future laws in the event of Tenant
being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of
the Premises by reason of the violation by Tenant of any of the covenants and conditions of this
Lease or otherwise. The rights given to Landlord herein are in addition to any rights that may
be given to Landlord by any statute or otherwise.
17.6 Guaranty. NA
17.7 Landlord's Default. Landlord shall in no event be charged with default in
the performance of any of its obligations hereunder unless and until Landlord shall have failed
to perform such obligations and such failure continues for more than thirty (30) days (or such
additional time as is reasonably necessary to correct any such failure) after Landlord's receipt of
written notice of such failure from Tenant.
ARTICLE 18
SUBORDINATION AND ATTORNMENT
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18.1 Subordination. At Landlord's option, 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 "Deed of Trust"). Such subordination shall be effective upon notice from
Landlord to Tenant without any further act of Tenant. Upon the request of Landlord, Tenant
shall, from time to time, execute and deliver any documents or instruments that may be
required by Landlord or the mortgagee, beneficiary, ground lessor or lender ("Landlord's
Lender") under any such Deed of Trust, 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 the terms, covenants, conditions and provisions of this Lease. If Tenant fails to
execute and deliver any such documents or instruments, Tenant irrevocably constitutes and
appoints Landlord as Tenant's special attorney-in-fact, coupled with an interest, to execute and
deliver any such documents or instruments. If Landlord's Lender elects to have this Lease prior
to the lien of its Deed of Trust, and gives written notice to Tenant of such election, this Lease
shall be deemed prior to such Deed of Trust regardless of the respective dates of execution,
delivery and recordation of this Lease and any such Deed of Trust.
18.2 Attornment. Tenant hereby attorns to and shall recognize the Landlord's
Lender as Tenant's landlord under this Lease and shall promptly execute and deliver any
instrument that Landlord may require to evidence such attornment. Tenant hereby irrevocably
appoints Landlord as Tenant's attorney-in-fact, coupled with an interest, to execute,
acknowledge and deliver the instrument of att~rnment on behalf of Tenant.
18.3 Estoppel Certificate. Upon the request of Landlord, Tenant at any time
and from time to time shall execute, acknowledge, and deliver to Landlord, no later than ten
(10) business days after Landlord's request therefor, an estoppel certificate in any reasonable
form requested by Landlord ("Estoppel Certificate"). The Estoppel Certificate may be
conclusively relied upon by a prospective lender, purchaser, or encumbrancer of Landlord's
interest in the Premises. Failure to deliver the Estoppel Certificate within ten (10) days of such
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.
18.4 Rights of Landlord's Lender and Landlord's Purchaser. If any Landlord's
Lender or any purchaser of Landlord's interest in the Premises ("Landlord's Purchaser")
requires a modification of this Lease at any time, Tenant shall, at Landlord's request, promptly
execute and deliver to Landlord instruments effecting the modifications that the Landlord's
Lender or Landlord's Purchaser reasonably requires, provided that such modifications do not
increase the rent, reduce the size of the Premises or otherwise adversely affect in any material
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respect any of Tenant's rights under this Lease. If Landlord's Lender or Landlord's Purchaser
has given prior written notice to Tenant that it is the Landlord's Lender or Landlord's Purchaser
and such notice includes the address at which notices to such Landlord's Lender or Landlord's
Purchaser are to be sent, then Tenant shall give Landlord's Lender or Landlord's Purchaser, as
the case may be, written notice simultaneously with any notice given to Landlord to correct any
failure of Landlord to perform any of Landlord's obligations. Landlord's Lender and Landlord's
Purchaser shall have the right after receipt of said written notice to correct or remedy such
failure within a reasonable period of time. Any written notice of default given Landlord shall be
null and void unless simultaneous written notice has been given to Landlord's Lender and
Landlord's Purchaser.
18.5 Limitation of Liability. The covenants and agreements of Landlord under
this Lease shall not be binding upon any person at any time after the transfer of that person's
interest, as landlord, in the Premises. In the event of such a transfer, the covenants and
agreements of Landlord shall thereafter be binding upon the transferee of Landlord's interest.
ARTICLE 19
FORCE MAJEURE
If either party hereto shall be delayed in or prevented from the performance of
any act required hereunder by reason of acts of God, labor troubles, inability to procure
materials, restrictive governmental laws or regulations or other causes without fault and
beyond the control of the party obligated (financial inability excepted) (collectively, "Force
Majeure"), performance of such act shall be excused for the period of the delay and the period
for the performance of any such act shall be extended for a period equivalent to the period of
such delay; provided, however, nothing in this Section shall delay the Rent Commencement
Date or excuse Tenant from the prompt payment of any rent or other charge required of
Tenant hereunder, except as may be expressly provided elsewhere in this Lease.
ARTICLE 20
ASSIGNMENT AND SUBLETTING
20.1 Landlord's Consent. Tenant shall not voluntarily, involuntarily or by
operation of law assign, mortgage, sublet, hypothecate or otherwise transfer or encumber all or
any part of Tenant's interest in this Lease or in the Premises, or contract for the management or
operation of the whole or any part of the Premises, or permit the occupancy of any part of the
Premises by any other person or business entity, or permit transfer of this Lease by merger,
consolidation or dissolution (collectively "Transfer"), without first obtaining Landlord's express
written consent. No consent to any Transfer shall constitute a waiver of the provisions of this
Section. If Tenant is a partnership or limited liability company, a withdrawal or change,
voluntary, involuntary, or by operation of law, of any partner or member, 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
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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 present net worth of the
proposed Transferee is less than the greater of Tenant's net worth as of the date of this Lease
or Tenant's net worth at the date of Tenant's request for consent.
Any attempted or purported Transfer without Landlord's prior written consent
shall be void and of no force or effect, and shall not confer any estate or benefit on anyone. A
consent to one Transfer by Landlord shall not be deemed to be a consent to any subsequent
Transfer to any other party.
20.2 Request for Transfer. Tenant shall give Landlord at least sixty (60) days'
prior written notice of any requested Transfer and of the proposed terms of such Transfer
("Transfer Notice"), including but not limited to: (i) the name and legal composition of the
proposed assignee, sublessee, encumbrancer or transferee ("Transferee"); (ii) a current
financial statement of the proposed Transferee prepared in accordance with generally accepted
accounting principles consistently applied; (iii) the portion of the Premises Tenant proposes to
Transfer (including square footage and location); and (iv) the nature of the proposed
Transferee's business to be carried on in the Premises. The foregoing terms shall be in
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; provided, however, that Landlord shall be deemed to
have disapproved the Transfer Notice if Landlord has not sent Tenant written notice of
Landlord's approval within such thirty (30) day period. Tenant shall immediately notify
Landlord of any modification to the proposed terms of such Transfer. Tenant shall also provide
to Landlord copies of the fully executed documents pertaining to the Transfer after the Transfer
has become effective. Whether or not Landlord consents to any proposed Transfer, Tenant
shall pay Landlord's review and processing fee in the amount of $500.00, as well as any
reasonable legal fees incurred by Landlord, within thirty {30) days after written request by
Landlord.
20.3 Landlord's Rights. Upon receipt of a Transfer Notice pursuant to
Section 20.2 above, Landlord shall have the right to: (i) withhold its consent to such Transfer, as
permitted pursuant to Section 20.1 above; (ii) terminate this Lease as it relates to the portion of
the Premises described in the Transfer Notice and recapture such portion of the Premises,
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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 any
Guarantor of this Lease reaffirms its guaranty; 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 to be and
remain jointly and severally liable for the performance of all conditions, covenants, and
obligations under this Lease from the effective date of the Transfer of Tenant's interest in this
Lease. Regardless of Landlord's consent to any Transfer, no Transfer shall release Tenant of
Tenant's obligation or alter the primary liability of Tenant to pay rent and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of rent by Landlord from
any other person shall not be deemed to be a waiver by Landlord of any provision hereof.
These rights are in addition to Landlord's right to withhold its consent to any Transfer, and may
be exercised by Landlord in its sole discretion without limiting Landlord in the exercise of any
other right or remedy at law or in equity which Landlord may have by reason of such Transfer.
In the event of default by any Transferee, Landlord may proceed directly against Tenant
without the necessity of exhausting remedies against said Transfe~ee. Tenant expressly agrees
that the provisions of this Article are not unreasonable standards or conditions for purposes of
Section 1951.4(b}(2} ofthe California Civil Code, as amended or recodified from time to time.
ARTICLE 21
NOTICES
All notices given under this Lease shall be in writing and shall be given or served
either personally or by depositing the same by United States registered or certified mail
postage prepaid, return receipt requested, or by a nationally-recognized overnight delivery
courier, addressed to the applicable Address for Notices specified in Article 1. Notice shall be
deemed to have been given (a) on the delivery date indicated by the United States Postal
Service on the return receipt or by the courier or on the date such delivery is refused or
deemed "undeliverable," or (b) on the date of personal delivery. Either party may change its
address for notices by providing written notice as specified herein; provided, however, that all
addresses provided must be an actual street address located in the United States of America.
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ARTICLE 22
AUTHORITY
If Tenant is a corporation, trust, general or limited partnership or limited liability
company, each individual executing this Lease on behalf of such entity represents and warrants
that he or she is duly authorized to execute and deliver this Lease on behalf of said entity. If
Tenant is a corporation, trust, partnership, or limited liability company, Tenant shall,
simultaneously with execution of this Lease, deliver to Landlord written evidence of such
authority satisfactory to Landlord.
ARTICLE 23
QUIET ENJOYMENT
Tenant, upon keeping, observing and performing all of the covenants and
agreements of this Lease on its part to be kept, observed, and performed, shall lawfully and
quietly hold, occupy and enjoy the Premises during the Term of this Lease.
ARTICLE 24
ATTORNEYS' FEES
Should either party commence an action or arbitration against the other to
enforce any obligation hereunder, the prevailing party shall be entitled to recover the costs
thereof and reasonable attorneys' fees actually incurred by such prevailing party (including the
fees and charges of legal assistants or other non-attorney personnel performing services under
the supervision of an attorney), whether or not such litigation is prosecuted to judgment.
ARTICLE 25
WAIVER
Any waiver by Landlord of any breach by Tenant 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 Landlord to require or exact full and complete
compliance by Tenant 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
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Tenant or Landlord. An express waiver shall affect only the default specified in the waiver, and
only for the time and to the extent expressly stated.
ARTICLE 26
LIMITATION ON CLAIMS
Any claim, demand, right or defense of any kind by Tenant, which is based upon,
arising in connection with or in any way related to this Lease or the negotiations prior to its
execution, shall be barred unless Tenant commences an action thereon, or interposes in a legal
proceeding a defense by reason thereof, within twelve (12) months after the date of the
inaction or omission or the date of the occurrence of the event or of the action to which the
claim, demand, right or defense relates, whichever applies.
ARTICLE 27
INTERPRETATION AND APPLICATION
27.1 Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute an offer, a reservation of, option for or option to lease,
and it is not effective as a lease or otherwise until execution and delivery by both Landlord and
Tenant.
27.2 Governing Law. This Lease shall be construed in accordance with and
governed by the statutes, decisions, and other laws of the State of California. Tenant expressly
agrees that any and all disputes arising out of or in connection with this Lease shall be litigated
only in the Superior Court of the State of California for San Diego County, and Tenant hereby
consents to the jurisdiction of said court.
27.3 Complete Agreement. This Lease contains all terms, covenants,
conditions, warranties and agreements of the parties relating in any manner to the rental, use
and occupancy of the Premises. No prior agreements or understanding pertaining to the same
shall be valid or of any force or effect.
27.4 Amendment. This Lease may not be amended, altered or modified in any
way except in writing signed by the parties hereto.
27.5 No Partnership. It is agreed that nothing contained in this Lease shall be
deemed or construed as creating a partnership or joint venture between Landlord and Tenant
or between Landlord and any other party, or cause Landlord to be responsible in any way for
the debts or obligations of Tenant or any other party.
27.6 No Merger. The voluntary or other surrender of this Lease by Tenant, or
a mutual cancellation thereof, shall not work as a merger, but shall, at the option of Landlord,
either terminate all or any existing subleases or subtenancies, or operate as an assignment to
Landlord of any or all such subleases or subtenancies.
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27.7 Severability. If any provision of this Lease or application thereof to any
person or circumstances shall to any extent be invalid, the remainder of this Lease (including
the application of such provision to persons or circumstances other than those to which it is
held invalid) shall not be affected thereby, and each provision of this Lease shall be valid and
enforced to the fullest extent permitted by law.
27.8 Captions. The captions of the Articles and Sections hereof are for
convenience only and are not a part of this Lease and do not in any way limit or amplify the
terms and provisions of this Lease.
27.9 Words. The words "Landlord" and "Tenant", as used herein, shall include
the plural as well as the singular. Words used in the neuter gender include the masculine and
feminine.
27.10 Joint and Several Liability. If either party is comprised of more than one
individual or entity, the obligations imposed upon such party hereunder shall be joint and
several to all parties signing this Lease as such party.
27.11 Exhibits. All exhibits attached to this Lease are incorporated herein by
this reference and made a part hereof, and any reference in the body of this Lease or in the
exhibits to the "Lease" shall mean this Lease together with all exhibits.
ARTICLE 28
MISCELLANEOUS
28.1 Time is of the Essence. Time is of the essence of each and all of the
terms and provisions of this Lease.
28.2 Successors. Subject to the restrictions on Transfers contained in this
Lease, all the terms, covenants and conditions hereof shall be binding upon and inure ta the
benefit of the heirs, executors, administrators, successors and assigns of the parties hereto.
28.3 Recordation; Quitclaim. Tenant shall not record this Lease or any
memorandum hereof. Landlord has the right in its absolute discretion to record this Lease or a
memorandum hereof, and, upon Landlord's request, Tenant shall execute and have
acknowledged the same for recordation. Upon termination of this Lease for any reason, Tenant
shall execute, acknowledge and deliver to Landlord within thirty {30) days after receipt of
written demand therefor a good and sufficient deed whereby all right, title and interest of
Tenant in the Premises is quitclaimed to Landlord. If Tenant fails to deliver the required deed to
Landlord, Landlord may prepare and record a notice reciting the failure of Tenant to execute,
acknowledge and deliver such deed and said notice shall be conclusive evidence of the
termination of this Lease and of all right of Tenant or those claiming under Tenant in and to the
Premises.
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28.4 Limitation of Liability. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any applicable law
to the contrary, the liability of Landlord hereunder (including any successor landlord) and any
recourse by Tenant against Landlord shall be limited solely and exclusively to Landlord's
interest in the Premises, including the income and profits from the Premises, and neither
Landlord, nor any of its officers, employees, affiliates, managers or agents shall have any
personal liability therefor, and Tenant hereby expressly waives and releases such personal
liability on behalf of itself and all persons claiming by, through or under Tenant. The limitations
of liability provided in this Section are in addition to, and not in limitation of, any limitation on
liability applicable to Landlord provided by law or in any other contract, agreement or
instrument. Under no circumstances shall Landlord be liable for punitive or special damages,
indirect damages or other consequential damages, including without limitation, injury to
Tenant's business or for any loss of income or profit therefrom. In the event of any transfer of
Landlord's interest in this Lease, the Landlord herein named (and in case of any subsequent
transfer, the then transferor) shall be automatically freed and relieved from and after the date
of such transfer of all liability for the performance of any covenants or obligations on the part
of Landlord contained in this Lease thereafter to be performed; provided, however, that any
funds in the hands of Landlord or the then transferor at the time of such transfer, in which
Tenant has an interest shall be turned over to the transferee and any amount then due and
payable to Tenant by Landlord or the then transferor under any provision of this Lease shall be
paid to Tenant; and provided, further, that upon any such transfer, the transferee shall
expressly assume, subject to the limitations of this Section, all of the agreements, covenants
and conditions in this Lease to be performed on the part of Landlord, it being intended hereby
that the covenants and obligations contained in this Lease on the part of Landlord shall be
binding on each Landlord, its successors and assigns, only during its period of ownership.
28.5 Broker. Except for Landlord's Broker specified in Article 1 of this Lease,
to whom Landlord shall pay a commission pursuant to a separate written agreement between
Landlord and Landlord's 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 other broker, finder
or real estate licensee and owes no other 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 other broker, finder or other similar party by reason
of any dealings or actions of the indemnifying party, including (without limitation) any costs,
expenses or attorney's fees reasonably incurred with respect thereto.
28.6 Counterparts. This Lease may be executed in any number of
counterparts each of which shall be deemed an original and all of which shall constitute one
and the same Lease with the same effect as if all parties had signed the same signature page.
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ARTICLE 29
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.
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July 24, 2018 Item #1 Page 40 of 51
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first
above written.
LANDLORD:
CITY OF CARLSBAD,
nicipal corporation
By:
Name:
Title: City Manager
APPROVED AS TO FORM
By:
Celia A. Brewer, City Attorney
Date: :J vV1 'Pc I 2018
TENANT:
HOUSE MARTEL, LLC
By:L%.
Name: Lisa Martel
Title: Owner
Note: Signature of Tenant must be notarized
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EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
700 square foot cafe located inside the Carlsbad Dove Library located on:
Parcel 2 of Parcel Map No. 16044, in the City of Carlsbad, County of San Diego, State of
California, filed in the office of the County Recorder of San Diego County, April 5, 1990.
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EXHIBIT B
MEMORANDUM OF TERM COMMENCEMENT
This Memorandum of Term Commencement is made as of 2019 by the
CITY OF CARLSBAD, a California municipal corporation ("Landlord"),
and a California limited liability company ("Tenant"). Landlord and
Tenant agree to and acknowledge the following matters:
1. Landlord and Tenant have entered into that certain Retail Lease Agreement
dated as of , 2018 (the "Lease"), covering the Premises located at 1755
Dove Lane, Carlsbad, California, 92011, as more particularly described in the Lease. All terms
defined in the Lease shall have the same meaning when used in this Memorandum of Term
Commencement.
2. The Term Commencement Date occurred on _________ , 20_,
the Rent Commencement Date occurred on _________ , 20_, and the
Expiration Date of the Lease is ___________ , 20_, subject to Tenant's options
to extend under Section 3.2 of the Lease.
4. Base Rent shall be paid by Tenant to Landlord in accordance with the
following schedule:
Lease Year
__/ __/20_ -__/ __/20_
__/ __/20_ -__/ __/20_
__/ __/20_ -__/ __/20_
__/ __/20_ -__/ __/20_
__/ __/20_ -__/ __/20_
Base Rent Per Month
$1,233.00
$1,269.99
$1,308.09
$1,347.33
$1,387.75
5. In addition to Base Rent, Percentage Rent shall be paid by Tenant to Landlord
each Lease Year as provided in the Lease.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum of Term
Commencement as of the date first written above.
LANDLORD:
CITY OF CARLSBAD,
a California municipal corporation
By:
Name:~~~~~~~~
Title:
DOCS 121163-000007 /2625579 .2
TENANT:
a Sole Proprietor
By:
Name:
Title:
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July 24, 2018 Item #1 Page 45 of 51
EXHIBITC
TENANT'S WORK
The initial improvements to the Premises shall be constructed by Tenant at Tenant's sole cost
and expense and are referred to in this Lease as "Tenant's Work". Tenant's Work shall be
subject to the following requirements:
Roof Equipment: Tenant shall not make any roof penetration and/or modifications to
accommodate Tenant provided roof mounted equipment without Landlord's prior
written consent. Any roof-mounted equipment shall be located so as to be fully
concealed. Final flashing and patching of any roof penetrations shall be made by
Landlord's roofing contractor at Tenant's sole cost and expense. Tenant shall deliver a
5-year warranty to Landlord for labor and material for all roof modifications.
Hazardous Substances: Tenant shall not introduce or cause to be introduced any
asbestos or other toxic or hazardous substances in any construction materials, fixtures
or equipment used in the Premises. The use of floor finishes containing asbestos is
expressly prohibited.
Construction Plans: Tenant shall obtain Landlord's prior written approval of Tenant's
plans and specifications. Upon Landlord's approval of Tenant's plans (the "Final Plans"),
Tenant shall submit same to the appropriate governmental agencies for approval.
Landlord's approval of such Tenant plans and specifications, however, shall create no
responsibility or liability on the part of Landlord with respect to the completeness,
design sufficiency, or compliance of such plans and specifications with any applicable
laws, rules, ordinances, directions or regulations.
Documents Delivered to Landlord: Upon 45 days after completion of Tenant's Work,
Tenant shall deliver to Landlord the following: a) copy of its final Certificate of
Occupancy; b) one set of reproducible "as built" drawings; and c) a copy of the building
permit for Tenant's Work.
Construction Quality: Tenant's Work shall be performed in a good and workmanlike
manner in accordance with all applicable law, ordinances and codes. Tenant shall only
use new materials in performance of Tenant's Work.
Insurance: At all times after delivery of possession of the Premises to Tenant, Tenant
shall maintain in full for force and effect, in addition to all other insurance required to
be maintained by Tenant under the Lease, maintain builder's risk during construction of
Tenant's Work and casualty insurance with limits of coverage not less than 100% of full
replacement cost of Tenant's leasehold improvements. Tenant shall name Landlord as
an additional insured on all insurance policies. Tenant shall furnish Landlord with
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certificates evidencing all insurance coverage at least ten {10) days prior to
commencement of Tenant's Work and may not commence construction without having
done so. The insurance shall contain a clause providing that the insurer will not cancel
such insurance without giving Landlord ten {10) days prior written notice.
Tenant assumes all risks of damages or injuries, including death, to any property or
person used or employed on or in connection with Tenant's Work, and all risks of
damages or injuries, including death, to any property or persons wherever located,
resulting from any action, omission or operation in connection with Tenant's Work.
Tenant shall indemnify, hold harmless and defend Landlord, its employees, agents,
servants and representatives from and against any and all losses, damages, and
expenses. claims, suits and demands of whatever nature (including without limitations,
reasonable attorneys' fees and expenses incurred in the enforcement of this indemnity),
resulting from damages or injuries, including death, to any property or person, caused
by or arising out of any action, omission or operation in connection with or in any way
related to the Tenant's Work.
Commencement of Construction: Tenant shall not commence construction of Tenant's
Work until Tenant has: (1) received Landlord's written approval of Tenant's Final Plans;
(2) acquired all necessary governmental approvals; (3) notified Landlord in writing of
Tenant's intent to commence construction activities; (4) delivered to Landlord such
insurance coverages as specified within the Lease and this Exhibit; and (5) delivered to
Landlord CADD drawing files of the tenant improvements (tenant's construction
documents). Landlord shall have the right to. post and maintain and record on the
Premises any notice of non-responsibility provided for by the mechanic's lien laws.
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EXHIBIT D
Dove Library Cafe
Operational Guidelines
Drafted and Approved Jointly by Carlsbad City Library Administration
and lessee, Lisa Martel ("Chapters")
This is a working guide and is subject to discussion and modification as needed.
• Hours of Operation
o The Carlsbad City Library at 1775 Dove Lane currently operates year-round:
o Monday-Thursday, 9 a.m. to 9 p.m.
o Friday -Saturday, 9 a.m. to 5 p.m.
o Sunday, 1 to 5 p.m.
o Calendar showing closures for City holidays is published in the fall each year and will be
shared with cafe.
o Cafe's normal hours will be one hour prior to library open and close one hour prior to
library close. Hours can be modified hours as needed, in relation to library or cultural
arts programming.
o Catering opportunities may be both during and outside library hours
• Library Rules of Conduct
o Library Rules of Conduct will be provided to cafe.
o All of them, with the exception of #11 which refers to eating and drinking, are also
applicable in the cafe.
• Menu Profile
o Library friendly items include beverages with secure lids, personal servings of food in
sealed containers and items that are not messy, loud or unreasonably odorous. The cafe
menu will include a symbol indicating those items that are library friendly.
o Menu and menu changes will be shared with library administration, for the purpose of
consensus on what is library friendly.
• Cafe area
o Signage and Menu Boards -library administration will work with cafe to determine
design and placement of exterior signage and menu boards. No alterations to the
exterior of the building will be permitted.
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o Common area shared with library patrons -the courtyard and foyer are areas with a
high volume of traffic. It is important to keep areas clear and clean. Outdoor seating
may be used by library patrons and cafe patrons.
o Cafe staff will_bus outdoor tables used by cafe patrons
o Cafe staff will work in partnership with library staff to lock and unlock chairs and tables
as needed on a daily basis.
o No exterior storage of cafe furniture or supplies
• Restroom access
o The restrooms adjacent to the Schulman Auditorium will be made available for cafe
customers if the cafe is open outside open library hours. During open library hours
restrooms inside the library are also available.
o City staff will need to be present to lock/unlock restrooms.
• Advertising
o Advertising for the cafe in local publications is acceptable. Cafe advertising should not
reference library programs or events.
o The Carlsbad City Library will work in partnership with the cafe to help launch the
opening and will reference the presence of the cafe as a service on the web site and in
other printed materials.
• Employee Standards
o Employees of the cafe should be properly trained, in order to provide timely, attentive
and courteous service.
o Cafe employees should maintain a professional, tidy appearance.
• Deliveries
o Deliveries to the cafe should occur outside library operating hours whenever possible.
During library operating hours, delivery vehicles may not park at the yellow curb in front
of the building.
• Trash and recycling
o The cafe can deposit its trash and recycling in the library dumpsters on southwest side
of building.
o Library custodial staff will be consulted for the best method to move trash from the cafe
area to the dumpster.
• Security/alarm system/locks/access to library space
o The cafe space is part of building's inclusive security system.
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o Tenant will limit access to the library interior during hours in which Tenant is open and
the library is closed, subject to city code requirements ..
o the building is disarmed early in the morning, and armed an hour after the library
closes. This should be sufficient for the cafe. The use of the cafe door that leads to the
library foyer will need to be restricted somehow, before the library opens.
o The space will be keyed separately. Library administration will have a set of keys, to
access space for maintenance, repairs, inspection or in an emergency. Notification of
cafe prior to entry, with the exception of emergencies.
• Regular Meetings with Library Administration
o Library administration and cafe management will meet on a monthly basis for the first
year to discuss operations, share upcoming programming information, conduct any
necessary problem solving and make adjustments as needed for the mutual benefit of
the cafe and the library. After the first year, meetings will be quarterly.
o Primary Library Contact: Fiona Everett, 760-602-2014, Fiona.everett@carlsbadca.gov
o Secondary Library Contact: Diane Bednarski, 760-602-2010,
diane .bed na rski@ca rlsbadca .gov
• Opportunities for catering meetings and other events
o For Discussion -Cafe will have the opportunity to cater meetings and events. Library
Administration will provide cafe with an events calendar and discuss catering
opportunities.
o For Discussion -Cafe and library will explore opportunities for additional partnerships in
terms of food and/or cooking related programming.
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