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Home My WebLink About2019-06-25; City Council; Resolution 2019-105RESOLUTION NO. 2019-105 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT WITH METROPOLITAN AREA ADVISORY COMMITTEE ON ANTI-POVERTY IN SAN DIEGO COUNTY, INC. DBA MAAC PROJECT TO OPERATE A PRESCHOOL AT THE CITY-OWNED PROPERTY LOCATED AT 3368 EUREKA PLACE Exhibit 1 WHEREAS, on June 17, 2014, the city entered into a lease agreement with Metropolitan Area Advisory Committee on Anti-Poverty In San Diego County, Inc. ("MAAC Project"), to lease and operate a Head Start preschool facility located 3368 Eureka Place ("Premises") by Resolution No. 2014-141; and WHEREAS, the Lease Agreement expired June 30, 2019; and WHEREAS, MAAC Project is desirous of entering into a new lease agreement with the city at the Premises to continue their Head Start preschool programming; and WHEREAS, the lease agreement is for a term of three-years and provides for two successive one-year renewal options; and WHEREAS, MAAC Project will initially pay the city rent of $118,124, to be increased two 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: 1. That the above recitations are true and correct. 2. That the Mayor is hereby authorized and directed to execute the lease agreement (Attachment A), for the property located at 3368 Eureka Place to Metropolitan Area Advisory Committee on Anti-Poverty in San Diego County, Inc. dba MAAC Project. 3. That the City Manager, or his designee, is hereby authorized to act on behalf of the City of Carlsbad in all future decisions and actions necessary to implement the lease June 25, 2019 Item #8 Page 5 of 40 agreement with MAAC Project up for the property located at 3368 Eureka Place, 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 25th day of June, 2019, by the following vote to wit: AYES: NAYS: ABSENT: Hall, Blackburn, Bhat-Patel, Schumacher, Hamilton. None. None. ATTEST: \ i1maJUbf/4~ ~ARBARA ENGLESON, City Clerk ,,,,,,111111111111,,,,,,,, SEAL /<?.\;:~~ {tr~~ \ \~~/ ffff ~✓-"41·············..l,,.,,,.,:,:' ~,,,,,,, .. IFOf'°';,,,,~ 111111111111\\\\\\\ June 25, 2019 Item #8 Page 6 of 40 LEASE AGREEMENT THIS LEASE AGREEMENT (this "Lease") is entered into as of\:5u,;Je dl.e , 2019, by and between City of Carlsbad, a California municipal corporation ("Landlord") and Metropolitan Area Advisory Committee on Anti-Poverty in San Diego County, Inc. dba "MAAC Project," a non-profit corporation ("Tenant") (collectively "Parties"), for the property located at 3368 Eureka Place, California, 92008, and shall be effective and binding upon the parties hereto as of the date of execution hereof by both parties. RECITALS WHEREAS, Landlord is the owner of certain real property and improvements thereon, consisting of two separate buildings/spaces including the building occupied by the Carlsbad Learning Center at the front of the property and a 4,800 square foot preschool building at the rear of the property, and more particularly described and/or depicted on Exhibit A attached hereto (the "Premises"); WHEREAS, the Parties entered into that certain Lease Agreement, dated June 2, 2014 ("Agreement"), for the Premises, which Lease was amended by First Amendment to Lease Agreement dated December 5, 2017 ("First Amendment"), and amended again on April 18, 2018 ("Second Amendment"); and WHEREAS, Tenant operates a "Head Start" preschool program out of the Premises within 4,800 square foot building and adjacent play yard ("Leased Premises"); and WHEREAS, Tenant desires to continue to lease from Landlord the Leased Premises to continue operating their "Head Start" program at the Premises; and WHEREAS, Tenant's continued operation of the Premises as a civic resource on behalf of the City of Carlsbad furthers the Tenant's mission and benefits Carlsbad and the community at large; and WHEREAS, Landlord is willing to lease the Premises to Tenant for the term and upon the covenants, conditions and provisions hereinafter set forth. - 1 - June 25, 2019 Item #8 Page 7 of 40 AGREEMENT NOW THEREFORE, in consideration of the covenants, conditions and provisions contained herein, the parties hereto do mutually agree as follows: ARTICLE 1 BASIC LEASE PROVISIONS 1.1 Trade Name. Metropolitan Area Advisory Committee on Anti-Poverty in San Diego County, Inc. dba "MAAC Project ("Trade Name"). 1.2 Premises. The Premises (defined above) are commonly known as 3368 Eureka Place, California, 92008, and consist of two separate buildings/spaces including the building occupied by the Carlsbad Learning Center at the front of the property and a 4,800 square foot preschool building at the rear of the property used as a "Head Start" preschool. 1.3 Term and Rent Commencement. The term of this Lease shall be approximately three (3) years, commencing upon the date when this Lease has been executed by both parties (the "Term Commencement Date"), and expiring, unless sooner terminated in accordance with this Lease, upon the date that is three (3) years after the Rent Commencement Date (defined below) (the "Expiration Date"). Tenant shall commence paying rent under this Lease on the date the Parties fully execute this Lease {the "Rent Commencement Date"); provided, however, that concurrently with the execution of this Lease, Tenant shall pay to Landlord the Rent for the first {l5t) full month beginning on the Rent Commencement Date. As used in this Lease, "Lease Year" means each twelve {12) month period (or portion thereof) during the Term commencing with the Rent Commencement Date. 1.4 Rent. Lease Year 1 2 3 Months* 1-12 13-24 25-36 Rent Per Month $ 9,843.66 $10,040.54 $10,241.35 *From the Rent Commencement Date Annual Rent $ 118,123.96 $ 120,486.44 $ 122,896.16 1.5 Use of Premises. It is expressly agreed that the Premises shall be used by Tenant solely and exclusively for the purpose of a preschool program and for such other related or incidental purposes as may be first approved in writing by City, and for no other purpose whatsoever. Tenant covenants and agrees to use the Premises for the above specified purposes and to diligently pursue said purposes throughout'the term hereof. In the event that Tenant fails to continuously use the Premises for said purposes, or uses the Premises for purposes not - 2 - June 25, 2019 Item #8 Page 8 of 40 expressly authorized herein, the Tenant shall be deemed in default under this Lease. ("Permitted Use"). 1.6 Tenant Improvement Allowance. None. 1.7 Security Deposit. None. 1.8 Guarantor: None. 1.9 Broker(s): None. 1.10 Tenant's Address for Notices: Metropolitan Area Advisory Committee on Anti-Poverty in San Diego County, Inc., dba "MAAC Project" Attn: Arnulfo Manriquez, President/CEO 800 Los Vallecitos Blvd. Suite J San Marcos, CA 92069 1.11 Landlord's Address for Notices: City of Carlsbad Real Estate Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 With a copy to: City of Carlsbad City Attorney's Office 1200 Carlsbad Village Drive Carlsbad, CA 92008 1.12 Landlord's Address for Rent Payments: Finance Department City of Carlsbad 1635 Faraday Avenue Carlsbad, CA 92008 This Article 1 is intended to supplement and/or summarize the provisions set forth in the balance of this Lease. If there is any conflict between any provisions contained in this Article 1 and the balance of this Lease, the balance of this Lease shall control. -3 - June 25, 2019 Item #8 Page 9 of 40 ARTICLE 2 PREMISES 2.1 Lease of Premises. Landlord leases to Tenant and Tenant leases from Landlord the Premises described in Article 1 for the Term {as defined in Article 3 below) and pursuant to all of the terms, covenants and conditions contained herein. Any statement of square footage set forth in this Lease, or that may have been used in calculating Base Rent, is an approximation which Landlord and Tenant agree is reasonable and the Base Rent based thereon is not subject to revision whether or not the actual square footage is more or less. 2.2 Condition of the Premises. Tenant acknowledges that except as otherwise expressly provided herein it shall accept the Premises in its "AS IS" condition, without representation, warranty or any improvements by Landlord. Landlord makes no representations or warranties with respect to this Lease, the Premises or any property therein or with respect to any matter related thereto, other than as expressly set forth in this Lease. Tenant hereby acknowledges that it has had an opportunity to investigate and inspect the condition of the Premises and the suitability of same for Tenant's purposes, and Tenant does hereby {a) waive and disclaim any objection to, cause of action based upon, or claim that its obligations hereunder should be reduced or limited because of the condition of the Premises or the suitability of same for Tenant's purposes and {b) acknowledge that the Premises are in good, clean and sanitary order and repair and by taking possession Tenant accepts the Premises as it exists. Tenant acknowledges that neither Landlord nor any agent nor any employee of Landlord has made any representations or warranty with respect to the Premises or with respect to the suitability of either for the conduct of Tenant's business and Tenant expressly warrants and represents that Tenant has relied solely on its own investigation and inspection of the Premises in its decision to enter into this Lease and let the Premises in an "AS IS" condition and is not relying on any statements, representations or warranties whatsoever made by or enforceable directly or indirectly against Landlord relating to the condition, operations, dimensions, descriptions, soil condition, suitability, compliance or lack of compliance with any state, federal, county or local law, ordinance, order, permit or regulation, or any other attribute or matter of or relating to the Premises. No promise of Landlord to alter, remodel, repair or improve the Premises, and no representation, express or implied, respecting any matter relating to the Premises or this Lease {including, without limitation, the condition of the Premises) has been made to Tenant by Landlord or any agent of Landlord other than as may be contained herein. 2.3 Delivery of Possession. Tenant shall accept possession of the Premises from Landlord on the Term Commencement Date; provided, however, that Tenant shall not be entitled to possession of the Premises until Landlord has received from Tenant all of the following: {i) the first monthly installment of Base Rent for the first {l51) 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 - 4 - June 25, 2019 Item #8 Page 10 of 40 possession of the Premises because one (1) or more of the above items are not received by Landlord, the Opening Date (as hereinafter defined), the Term Commencement Date, Tenant's Completion Date (as hereinafter defined) and the Rent Commencement Date shall not be affected or delayed thereby. 2.1 Easements. Landlord reserves to itself the right, from time to time, to grant such easements, rights and dedications affecting all or any part of the Premises as Landlord deems necessary or desirable, and to cause the recordation of parcel and subdivision maps and restrictions affecting all or any part of the Premises, so long as such easements, rights, dedications, maps and restrictions do not increase Tenant's obligations under this Lease, or unreasonably interfere with Tenant's use of the Premises. Tenant shall sign any of the aforementioned documents upon Landlord's request and Tenant's failure to do so or breach of this Section shall constitute a material default under this Lease. Tenant shall cooperate with and not oppose or object to Landlord's construction, development, subdivision and parcelization of all or any part of the Premises and any property adjacent to the Premises. 2.2 Existing Equipment. Landlord hereby grants Tenant the right to use any and all existing furniture and equipment ("Existing Equipment"), if any, used by the prior tenant of the Premises and located within the Premises on the Term Commencement Date that are owned by the Landlord. Tenant acknowledges that it shall accept the Existing Equipment in its "AS IS" condition, without representation or warranty by Landlord. Said right shall be coterminous with this Lease and upon such termination, the Existing Equipment shall be deemed to constitute part of the Premises and surrendered by Tenant to Landlord in good condition and repair, ordinary wear and tear and damage from casualty excepted. ARTICLE 3 TERM 3.1 Term. The Term of this Lease ("Term") shall commence on the Term Commencement Date and shall expire, unless sooner terminated in accordance with this Lease, on the Expiration Date. 3.2 Extension Option(s). Upon expiration of this Lease, Tenant may request and Landlord may grant, at its sole discretion and option, two (2) one-year extension options. For purposes of the approval and execution of the two one-year options to renew, the City Manager, or his designee, is hereby authorized to act on behalf of the City of Carlsbad. 3.3 Surrender of Premises. On the Expiration Date or on the sooner termination hereof, Tenant shall remove all of Tenant's Property from the Premises and peaceably surrender the Premises in accordance with the terms of this Section and in good order, condition and repair, broom clean and free of debris, excepting only ordinary wear and tear, condemnation and any damage or destruction not caused by Tenant or any or any officer, employee, agent or invitee of Tenant. "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding - 5 - June 25, 2019 Item #8 Page 11 of 40 any other provision hereof, Tenant shall not remove (unless requested to by Landlord, in which case Tenant shall remove) all or any part of Tenant's Work and the Tenant Improvements, or any fixtures or equipment which cannot be removed without material damage to the Premises. Unless otherwise elected by Landlord, such items shall remain upon and be surrendered with the Premises as a part thereof, without charge, at the expiration or termination of this Lease and shall then become the property of Landlord. Tenant shall repair, to the reasonable satisfaction of Landlord, any damage to the Premises caused by any removal, or by the use of the Premises or by any failure of Tenant to comply with the terms of this Lease (including, without limitation, provisions relating to Hazardous Substances). Tenant shall promptly surrender all keys for the Premises to Landlord at the place then fixed for notices to Landlord and shall inform Landlord of the combinations on any locks and safes on the Premises. The provisions of this Section shall survive termination of this Lease. 3.4 Holding Over. Tenant has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. The failure of Tenant to timely surrender the Premises in the condition required by Section 3.4 above shall constitute a holdover and shall not be considered a renewal of this Lease or an extension of the Term. In the event of any such holdover Base Rent shall immediately be increased to an amount equal to 150% of the Base Rent applicable during the month immediately preceding the expiration or termination. In addition to paying Landlord the increased Base Rent, Tenant shall defend, indemnify, protect and hold Landlord harmless from and against all claims, liability, damages, costs and expenses, including attorneys' fees and costs of defending the same, incurred by Landlord and arising directly or indirectly from Tenant's holding over in the Premises without Landlord's express written consent, including (a) any rent payable by or any loss, cost or damages, including lost profits and loss of good will claimed by any prospective tenant of the Premises, and (b) Landlord's damages as a result of such prospective tenant's rescinding or refusing to enter into the prospective lease of the Premises as a direct or indirect result of Tenant's holding over. No action by Landlord other than Landlord's express written consent shall be construed as consent by Landlord to any holding over by Tenant. 3.5 Waiver of Relocation Benefits: Tenant waives any and all relocation benefits defined in the California Relocation Assistance Law (Government Code, Section 7260, et. seq.) in connection with this Lease (including, without limitation, any termination as a result of Landlord's delivery of a Disapproval Notice). ARTICLE 4 RENT 4.1 General Provisions. Unless provided herein to the contrary, Tenant shall pay all rent to Landlord at Landlord's Address for Rent Payments provided in Article 1 above. All rent shall be paid to Landlord in lawful money of the United States of America without demand therefor, and without deduction, offset or abatement of any kind, except as may be expressly provided for in this Lease. Rent for any partial month shall be prorated on the basis of a thirty (30) day month. Tenant assumes all risk of loss if payments are made by mail. - 6 - June 25, 2019 Item #8 Page 12 of 40 4.2 Payment of Rent. For each month or partial month of the Term commencing on the Rent Commencement Date (except as otherwise expressly provided herein), Tenant shall pay to Landlord the sum specified in Article 1 as Rent ("Rent") in advance as set forth herein. Tenant shall pay the first installment of Rent to Landlord concurrently with Tenant's execution of this Lease, and all subsequent installments of Rent shall be payable in advance on or before the first day of each calendar month. ARTICLE 5 SECURITY DEPOSIT 5.1 Security Deposit. None. ARTICLE 6 TAXES 6.1 Real Estate Taxes. Tenant shall pay directly prior to delinquency any and all real estate taxes, assessments {whether general, special, ordinary or extraordinary), possessory interest taxes, improvement bonds, license fees, commercial rental taxes, sewer and water rents and other levies, fees and charges of every kind imposed by any authority having the direct or indirect power to so tax, levy or assess, to the extent relating to the Premises, to Landlord's gross receipts or revenues from the Premises, or to the business or other activities of Tenant upon or in connection with the Premises (individually and collectively, "Real Estate Taxes"). In particular, Tenant acknowledges that this Lease may result in a taxable possessory interest. Tenant shall be solely responsible for the payment of Real Estate Taxes associated with its occupancy of the Premises, if any apply. Tenant shall also pay any fees imposed by law for licenses or permits for any business or activities of Tenant upon the Premises or under this Lease. 6.2 Personal Property Taxes. Tenant shall pay directly prior to delinquency any and all taxes and assessments levied or assessed during the Term upon or against (i) Tenant's Property (as hereinafter defined), furniture, equipment, and any other personal property installed or located in the Premises and (ii) all above-standard alterations, additions, betterments, or improvements of whatever kind or nature made by Tenant to the Premises that are separately assessed. ARTICLE 7 UTILITIES 7.1 Payment of Utilities. Tenant shall pay, before delinquency, for all utilities and services serving the Premises, including (without limitation) trash collection, water, gas and electricity, and any and all utility hook-up fees, connection fees, including sewer connection fees, and service and other charges for the availability of any such utilities and services, supplied to or consumed in or upon the Premises from and after the Term Commencement -7 - June 25, 2019 Item #8 Page 13 of 40 Date and continuously thereafter throughout the Term, directly to the supplier of such utilities and services. Upon Landlord's request, Tenant shall deliver to Landlord copies of all bills for utilities supplied to the Premises for the past twelve {12} month period within thirty (30} days after Landlord's request. 7.2 Interruption of Utilities. Landlord shall have the right (but not the obligation}, with reasonable prior notice to Tenant, or without notice in the case of an emergency, to shut off water, gas, electricity and any all other utilities and services whenever such discontinuance is necessary to make repairs or alterations or to protect the Premises. In no event shall Landlord be liable for the quality, quantity, failure or interruption of any such utilities or services to the Premises. In addition, any such failure, interruption or impairment shall not be construed as an eviction of Tenant or a disturbance of Tenant's possession, and Tenant shall not be entitled to any abatement of rent. ARTICLE 8 INSURANCE 8.1 General. Tenant shall, at its expense, maintain in effect from and after the Term Commencement Date and continuously thereafter until the termination or expiration of this Lease, the policies of insurance required under this Article. All policies that Tenant is required to obtain under this Article shall be issued by companies licensed to do business in California with a general policyholder's rating of not less than "A-" and a financing rating of not less than Class "VIII", as rated by the most current available "Best's" Insurance Reports and shall be in a form (without any additions or deletions unless approved in writing by Landlord} and underwritten by companies acceptable to Landlord. On or before the Term Commencement Date, Tenant shall furnish Landlord with certificates and endorsements in a form acceptable to Landlord evidencing that (i} the policies (or a binder thereof} required pursuant to this Article are in effect and (ii} Landlord shall be notified in writing thirty (30} days prior to cancellation, material change, or nonrenewal of such insurance (or if Tenant's insurance carrier will not agree to provide notice of cancellation, material change, or nonrenewal to any additional insured or other entity, then Tenant shall deliver such notice to Landlord thirty (30} days prior to any cancellation, material change, or nonrenewal initiated by Tenant, or twenty (20} days prior to such cancellation, material change or nonrenewal not initiated by Tenant}. The policies that Tenant is required to obtain pursuant to this Article shall name Landlord, and any other parties requested by Landlord in accordance with commercially reasonable practices, as additional insureds, or as loss payee (as applicable} for property in which Landlord has an insurable interest and shall be primary policies, and shall not be contributing with and shall be in excess of coverage which Landlord may have and shall be unaffected by any insurance or self-insurance Landlord may have regardless of whether any other insurance names Landlord as an insured or whether such insurance stands primary or secondary. If Tenant carries any of the insurance required hereunder in the form of a blanket policy, any certificate required hereunder shall make specific reference to the Premises. The procuring of policies of insurance shall not be construed to limit Tenant's liability hereunder in any way, nor to fulfill the indemnification provisions and requirements of this Lease. Tenant - 8 - June 25, 2019 Item #8 Page 14 of 40 agrees not to use the Premises in any manner, other than the Permitted Use generally, that will result in the cancellation of any insurance Landlord may have on the Premises, or on adjacent premises, or that will cause cancellation of any other insurance coverage for the Premises, or adjoining premises. Tenant further agrees not to keep on the Premises or permit to be kept, used, or sold thereon, anything prohibited by any fire or other insurance policy covering the Premises. Tenant shall, at its sole cost and expense, comply with any and all requirements, in regard to Premises, of any insurance organization necessary for maintaining fire and other insurance coverage at reasonable cost. 8.2 Commercial General Liability Insurance. Tenant shall obtain and keep in force a policy or policies of commercial general liability insurance covering the Premises and the business operations thereon, including contractual liability, personal injury and property liability coverage in amounts not less than a combined single limit of $1,000,000 per occurrence for bodily injury, personal injury, death and property damage liability. If the submitted policies contain aggregate limits, general aggregate limits will apply separately under this Lease or the general aggregate will be twice the required per occurrence limits. Liability coverage for the required limits may be obtained with a combination of commercial general liability insurance and an umbrella policy. Such policy or policies shall include liquor liability coverage in the same limits and under the same conditions as Tenant's general liability insurance, if the sale of alcoholic beverages is permitted in the Premises. 8.3 Property and Extended Coverage Insurance. Tenant shall obtain and keep in force a Causes of Loss -Special Form property insurance policy {formerly known as "all risks"), including vandalism, malicious mischief, earthquake and sprinkler leakage coverage, covering one hundred percent {100%) of the replacement cost of the Premises, all Tenant's Property and any and all Tenant Improvements made in or upon the Premises, with an inflation rider or endorsement attached thereto and twelve {12) months' business income {business interruption) insurance rider or endorsement attached thereto. Tenant shall keep in force a policy of plate glass insurance covering all plate glass in the Premises in an amount equal to the full replacement cost thereof. The deductibles on such policies shall not exceed $10,000.00 per occurrence. The proceeds from any such insurance shall be used by Tenant for the replacement of the Premises, personal property and trade fixtures as well as alterations and utility installations. 8.4 Business Interruption. Tenant shall obtain and keep in force loss of income and extra expense insurance in amounts as will reimburse Tenant for at least twelve {12) months' direct and indirect loss of earnings attributable to all perils commonly insured against by prudent tenants in the business of Tenant or attributable to prevention of access to the Premises as a result of such perils. 8.5 Workers' Compensation Insurance. Tenant shall obtain and keep in force workers' compensation and employer's liability insurance covering all employees of Tenant engaged on or with respect to the Premises, affording applicable statutory limits for - 9 - June 25, 2019 Item #8 Page 15 of 40 workers' compensation coverage and at least $1,000,000.00 in limits for employer's liability coverage. 8.6 Waiver of Subrogation. Notwithstanding anything to the contrary contained herein, Landlord and Tenant hereby waive any rights each may have against the other on account of any loss or damage occasioned to Landlord or Tenant, their respective property, the Premises or its contents, arising from any risk to the extent covered by the insurance required hereunder. The foregoing waiver shall also apply to any deductible, as if the same were a part of the insurance recovery. The parties each, on behalf of their respective insurance companies insuring the property of either Landlord or Tenant against any such loss, waive any right of subrogation that it may have against Landlord or Tenant, as the case may be. Each party shall obtain any special endorsements, if required by its insurer, whereby the insurer waives its rights of subrogation against the other party. The foregoing waivers of subrogation shall be operative only so long as available without invalidating either Landlord's or Tenant's policy of insurance. 8.7 Coverage Changes. Notwithstanding any of the foregoing, Landlord shall retain the right at any time to review the coverage, form, and amount of the insurance required under this Lease. If, in the opinion of Landlord, the insurance provisions in this Lease do not provide adequate protection for Landlord and/or for members of the public using the Premises, Landlord may require Tenant to obtain insurance sufficient in coverage, form and amount to provide adequate protection. Landlord's requirements shall be reasonable but shall be designed to assure protection from and against the kind and extent of risk which exists at the time a change in insurance is required. Landlord shall notify Tenant in writing of changes in the insurance requirements, and Tenant shall deposit certificates/endorsements evidencing acceptable insurance policies with Landlord incorporating such changes within thirty {30) days after receipt of such notice. ARTICLE 9 USE OF PREMISES 9.1 Permitted Use and Continuous Operation. Tenant shall actively and continuously use, operate and occupy the Premises solely for the Permitted Use. No other use shall be permitted without the prior express written consent of Landlord. Tenant shall identify itself to the public in connection with such business under the Trade Name specified in Article 1 above and under no other name without Landlord's prior express written consent, which shall not be unreasonably withheld. Notwithstanding anything to the contrary contained in this Lease, with prior written notice to Landlord {except in emergency situations, when notice shall be given as soon as reasonably possible), the Premises may be closed to the extent reasonably necessary due to Force Majeure. 9.2 Conduct of Business. Tenant shall conduct its business at all times in a professional and businesslike manner consistent with reputable business standards and practices. -10 - June 25, 2019 Item #8 Page 16 of 40 9.3 Compliance with Laws; Nuisance. Tenant shall, at its sole expense and at all times, comply fully with (i) all federal, state and municipal laws, including without limitation all zoning and land use laws and ordinances, conditional use permit rules and orders and the Liquor Licenses, now in force or which may hereafter apply to the Premises or which impose any duty on Landlord or Tenant relating to the use or occupancy of the Premises (including but not limited to the obligation (a) to obtain a conditional use permit, (b) to alter, maintain, repair or restore any portion of the Premises to the extent required as a result of Tenant's use of the Premises, or (c) to alter, maintain, repair or restore the portion of the Premises which Tenant is responsible to maintain, repair or restore pursuant to this Lease); (ii) any declaration of covenants, conditions and restrictions and easements encumbering the Premises; (iii) any commercially reasonably rules and regulations prescribed by Landlord for the Premises ("Rules and Regulations"); and (iv) any and all requirements and recommendations of any insurance organization or company necessary for the maintenance of reasonable fire and public liability insurance covering the Premises. Tenant shall not store, use or sell any article in or about the Premises, nor permit any act, which would cause the premiums for insurance to significantly increase or cause a cancellation of any policy upon the Premises or any loss of coverage under any such policy. Tenant shall not occupy, suffer or permit the Premises or any part thereof to be used for any illegal, immoral or dangerous purpose, or in any other way contrary to the law or the rules or regulations of any public authority. Tenant shall not commit, or suffer to be committed, any waste upon the Premises, or any public or private nuisance, or any other act or thing which may disturb the quiet enjoyment of neighbors of the Premises. Tenant shall not conduct or permit to be conducted any sale by auction in, upon or on the Premises. 9.4 Environmental Compliance. Tenant represents, warrants and covenants to Landlord that: (a) Tenant and its agents, employees, contractors, affiliates, sublessees and invitees (collectively, "Tenant Parties") shall at no time use, or permit the Premises to be used, in violation of any federal, state or local law, ordinance or regulation relating to the environmental conditions on, under or about the Premises, including, but not limited to, air quality, soil and surface and subsurface water conditions; and (b) the Tenant Parties shall not cause or permit any Hazardous Substance to be used, stored, spilled or released in, on, under or about the Premises (except for supplies typically used in the ordinary course of the Permitted Use in commercially reasonable amounts and in strict compliance with law) and shall promptly, at Tenant's sole expense, take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises and neighboring properties, that was caused or materially contributed to by any Tenant Party, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for any Tenant Party, or any third party. Tenant shall assume sole and full responsibility and cost to remedy any such violations by any Tenant Parties and shall protect, indemnify, defend and hold harmless Landlord from all actions (including, without limitation, remedial or enforcement actions of any kind, and administrative or judicial proceedings and orders or judgments), costs, claims, damages (including, without limitation, punitive damages), expenses (including, without limitation, attorneys', consultants' and experts' fees, court costs) -11 - June 25, 2019 Item #8 Page 17 of 40 amounts paid in settlement, fines, forfeitures or other civil, administrative or criminal penalties, injunctive or other relief, liabilities or losses in any way arising or resulting from a breach of this paragraph. Upon expiration or earlier termination of this Lease, Tenant shall cause any Hazardous Substance arising out of or related to the use or occupancy of the Premises by any Tenant Party to be removed from the Premises and the Parcel and properly transported for use, storage or disposal in accordance with all applicable laws, regulations and ordinances. The term "Hazardous Substance" as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any government authority, or (iii) a basis for potential liability of Landlord to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, asbestos, asbestos containing material, the group of organic compounds known as polychlorinated biphenyls, as well as substances defined as "hazardous substances" or "toxic substances" under State, local or federal laws or regulations, as they be enacted or promulgated from time to time. 9.5 Landlord's Right of Entry. Landlord, at reasonable times, may go into the Premises without any liability for the purposes of: (i) inspecting the Premises; (ii) inspecting the performance by Tenant of the terms and conditions hereof; (iii) showing the Premises to prospective tenants, purchasers, partners, or mortgagees; and (iv) posting notices for the protection of Landlord on the Premises. Except in the case of an emergency, Landlord shall give Tenant reasonable notice of any and all intended entries or inspections pursuant to this Section. 9.6 Prohibition Against Discrimination. Tenant shall not discriminate against or segregate any person or class of persons by reason of sex, color, race, religion or national origin. If the use provided for in this Lease allows Tenant to offer accommodations or services to the public, such accommodations or services shall be offered by Tenant to the public on fair and reasonable terms. ARTICLE 10 MAINTENANCE AND REPAIR OF PREMISES 10.1 Tenant's Inspection. Tenant accepts the Premises in its "AS IS" condition as further provided in Section 2.2 above, and Tenant expressly waives all implied warranties including implied warranties of merchantability and fitness, if any. Tenant hereby waives all rights under Sections 1941 and 1942 of the Calitornia Civil Code, as amended or recoditied 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 -12 - June 25, 2019 Item #8 Page 18 of 40 occurrences that may alter its condition or affect its suitability for any proposed use. Landlord shall have no responsibility or liability with respect to any such occurrence. 10.2 Tenant's Obligations. Except for Landlord's obligations as set forth in Section 11.3 below, from and after the Term Commencement Date and continuously thereafter until the expiration or termination of this Lease, Tenant, at Tenant's sole expense, shall maintain the Premises in a neat, clean and sanitary condition and repair, and make any necessary repairs and replacements to any portion of the Premises, including full responsibility for: (a) maintenance, repair and replacement of the interior and exterior of the building (including, without limitation, (i) any structural portions of the Premises to the extent affected by Tenant's Tenant Improvements, and (i) any painting, plumbing, fixtures, windows and glass, custodial, flooring and appliances) throughout the Term to maintain and preserve the Premises in a good, safe, healthy and sanitary condition satisfactory to Landlord and in compliance with all applicable laws; and (b) keeping the Premises free and clear of trash, garbage and other fire hazards. The maintenance, repair and replacement obligations set forth in this paragraph are a material part of the consideration for this Lease. 10.3 Landlord's Obligations. From and after the Term Commencement Date and continuously thereafter until the expiration or termination of this Lease, Landlord, at Landlord's sole expense, shall keep in good order, condition and repair the foundations, exterior walls, roof mounted HVAC System, and roof of the Premises, except for (a) any damage thereto caused by any negligent act or omission of Tenant or its agents, contractors, subcontractors, employees or invitees, (b) any such portions of the Premises to the extent affected by any Tenant Improvements, and (c) any damage or destruction covered by insurance required to be maintained by Tenant. All repairs to be performed by Landlord shall be commenced and completed as soon as reasonably necessary after written notice from Tenant to Landlord. In cases of emergency, Tenant shall endeavor to give as much notice to Landlord as is reasonable under the circumstances. 10.4 Landlord's Cure. Landlord shall have the right but not the duty, to enter, view, inspect, determine the condition of and protect its interests in, the Premises. If at any time Landlord determines that the Premises are not in the condition required by this Lease, then Tenant shall perform the necessary maintenance, repair and/or replacement work within ten (10) days after written notice from Landlord. If Tenant fails to perform the necessary maintenance, repair and/or replacement work within ten (10) days after written notice from Landlord, then Landlord may, but is not obligated to, perform such obligations without liability to Tenant for any loss to Tenant's business that might arise by reason thereof. Tenant shall reimburse Landlord on demand in an amount equal to the cost incurred by Landlord in the performance of such obligations plus an administrative fee equal to ten percent (10%) of the cost incurred by Landlord. Landlord's rights reserved in this section shall not create any obligations or increase any obligations for Landlord elsewhere in this Lease. -13 - June 25, 2019 Item #8 Page 19 of 40 ARTICLE 11 ALTERATIONS AND ADDITIONS 11.1 Tenant Improvements. Tenant shall not commence or make (i) any alterations, improvements, additions or utility installations, including without limit, carpeting, floor or window coverings, locks, air lines, power panels, electrical distribution systems, lighting fixtures, space heaters, air conditioning and plumbing in, on, or about the Premises or (ii) any change or alteration to the exterior of the Premises (collectively "Tenant Improvements") without Landlord's prior written consent, which shall not be unreasonably withheld, conditioned or delayed. If Tenant makes any Tenant Improvements without the prior written approval of Landlord, Landlord shall have the right to require that Tenant remove any or all of such Tenant Improvements, and repair and restore any damage to the Premises caused by such removal at Tenant's sole expense, and shall also have the right to declare Tenant in default and to terminate this Lease. Any and all Tenant Improvements shall at all times comply fully with all applicable federal, state and municipal laws, ordinances, regulations, codes and other governmental requirements now or hereafter in force and Tenant shall, at Tenant's sole cost and expense, take all actions now or hereafter necessary to ensure such compliance. Tenant shall provide Landlord with a written request for approval of any Tenant Improvements that Tenant would like to make with proposed detailed plans, if applicable in light of proposed work. Landlord shall have the right to condition Landlord's prior written consent upon Tenant's: (i) obtaining a building permit (if necessary) and complying with all building and planning laws and regulations for the Tenant Improvements from appropriate governmental agencies; (ii) furnishing a copy of such building permit and evidence of such compliance to Landlord prior to the commencement of such work; (iii) complying with all the conditions of such building permit and such building and planning laws and regulations; (iv) providing Landlord with plans and specifications for any Tenant Improvements (if reasonable in light of the nature of the proposed work) for Landlord's prior written approval; (v) providing Landlord with a copy of the construction contract, construction schedule, trade payment breakdown and list of subcontractors and suppliers for Landlord's prior written approval; (vi) obtaining a builder's "all risk" insurance policy in an amount and issued by insurance company acceptable to Landlord, naming Landlord as an additional insured and otherwise satisfying the requirements of Article 9 above; and/or (vii) providing Landlord with at least ten (10) days written notice prior to commencing any such work. In its capacity as a landlord (and not as the approving agency), Landlord's approval of the plans, specifications and working drawings for any Tenant Improvements shall create no responsibility or liability on the part of Landlord for their completeness, design sufficiency, or compliance with all laws, rules and regulations of governmental agencies or authorities. Landlord shall not be liable for any damage, loss, or prejudice suffered or claimed by Tenant, its agents or any other person or entity on account of: (a) the approval or disapproval of any plans, contracts, bonds, contractors, sureties or matters by Landlord in its capacity as a landlord (and not as the approving agency); (b) the construction or performance of any work whether or not pursuant to approved plans; (c) the improvement of any portion of the Premises or alteration or modification to any portion of the Premises; or (d) the enforcement or failure to enforce any of the covenants, conditions and restrictions -14 - June 25, 2019 Item #8 Page 20 of 40 contained in this Lease. Under no circumstances shall Tenant make any roof penetrations without the prior written consent of Landlord. Any consent of Landlord shall be conditioned upon Landlord's review and approval of plans satisfactory to Landlord for the repair of the roof. Any roof penetrations may be inspected by Landlord's roofing contractor, and Tenant shall reimburse Landlord for the cost of such inspection and any necessary repair work within ten (10) days after Tenant's receipt of an invoice therefor. 11.2 Construction of Tenant Improvements; Liens. Tenant shall pay when due all claims for labor or materials furnished or alleged to have been furnished to or for Tenant at, on, or for use in the Premises, and shall defend, indemnify, protect and hold harmless the Premises and Landlord against the same (including, without limitation, the costs of defending against such claims, and reasonable attorney's fees incurred therein). Tenant shall keep the Premises and any interest therein, free and clear of all mechanics' liens and all other liens. Tenant shall give Landlord immediate written notice of any lien filed against the Premises or any interest therein related to or arising from work performed by or for Tenant. Tenant shall give Landlord not less than ten (10) days' prior written notice of the commencement of any Tenant Improvements in the Premises, and Landlord shall have the right to post notices of nonresponsibility in or upon the Premises as provided by law. If any lien or levy of any nature whatsoever is filed against the Premises or Tenant's leasehold interest, then upon Landlord's request, Tenant shall furnish to Landlord a corporate surety bond, satisfactory to Landlord, in an amount equal to one and one-half (1 ½) times the amount of the claims upon which such lien or levy has been filed. Such bond shall be acknowledged by Tenant as principal and by a corporation, licensed by the Insurance Commissioner of the State of California to transact the business of a fidelity and surety insurance company, as surety. Landlord shall have the right to declare this Lease in default in the event the bond required by this paragraph has not been deposited with Landlord within ten (10) days after written request has been delivered to Tenant. 11.3 Title to Tenant Improvements. Subject to Section 12.1 below, upon the expiration or earlier termination of this Lease, any and all Tenant Improvements which may be made in or upon the Premises shall become the property of Landlord and remain upon and be surrendered with the Premises at the expiration of the Term without compensation to Tenant unless Landlord requires that Tenant remove any Tenant Improvements pursuant to Article 13 below. 11.4 Signs. Tenant shall be responsible for purchasing, installing and maintaining, at Tenant's sole cost, exterior signage in accordance with the signage regulations set torth by the City of Carlsbad and any other sign criteria provided by Landlord (collectively, "Sign Criteria") and which has received Landlord's prior written consent. In accordance with the Sign Criteria, Tenant shall maintain such signage in good condition and repair during the entire Term of this Lease. Tenant shall repair, at its sole cost and expense, any damage to the Premises caused by the erection, maintenance or removal of any sign, marquee, banner, awning, decoration or other attachment. -15 - June 25, 2019 Item #8 Page 21 of 40 11.5 Compliance with Prevailing Wage Laws. Tenant acknowledges and agrees that: (a) any construction, alteration, demolition, installation or repair work performed under this Lease constitutes "public work" under California Prevailing Wage Law, including Labor Code sections 1720 through 1815, et seq. (the "PWL"), and will obligate Tenant to cause such work to be performed as a "public work," including, but not limited to, the payment of applicable prevailing wages to the all persons or entities subject to the PWL; (b) Tenant shall cause all persons and/ or entities performing "public work" under this Lease to comply with all applicable provisions of the PW; (c) in no event shall Landlord be responsible for Tenant's failure to comply with any applicable provisions of the PWL.; (d) Tenant's violations of the PWL shall constitute an event of default under this Lease, and (e) Tenant shall defend and indemnify Landlord and its officers, employees, council members and agents from and against any and all claims, assessments, back-wages, penalties, change orders, suits, liability, judgments, damages, proceedings, orders, directives, and costs, including reasonable attorneys' fees, arising from or relating to any actual or alleged violations of the PWL, or other application of laws, ordinances or regulations, by any person or entity, including but not limited to Tenant, performing construction, alteration, demolition, installation, repair and/ or any other type of work contemplated under this Lease. ARTICLE 12 TENANT'S PROPERTY 12.1 Tenant's Property. All trade fixtures, goods, inventory, merchandise, stock, supplies, decorative light fixtures, and movable equipment owned by Tenant and installed in the Premises at Tenant's sole cost and which may be removed without material damage to the Premises ("Tenant's Property") shall remain the property of Tenant during the Term. Except as provided to the contrary in Section 11.3 above, Tenant's Property shall be removable from time to time and at the expiration of the Term or earlier termination thereof, provided that: (i) Tenant shall not at such time be in default, or with notice or the passage of time or both would be in default, under any term, covenant, condition or provision of this Lease; (ii) Tenant shall repair to the satisfaction of Landlord, any damage to the Premises caused by the removal of Tenant's Property; and (iii) Tenant immediately replaces any such Tenant's Property with similar property of comparable or better quality to assure that the Premises are suitable for conducting business during the Term in accordance with Articles 5 and 10 hereof. 12.2 Landlord's Lien. Subject to the rights of Tenant, if any, under Section 9102(4) of the California Uniform Commercial Code, as amended or recodified from time to time, Tenant hereby grants to Landlord a security interest in and lien upon Tenant's Property and the proceeds thereof as security for Tenant's performance of all the terms, covenants, conditions, provisions and obligations under this Lease. Upon Landlord's request, Tenant shall execute a security agreement, UCC-1 financing statement, continuation statement and such other documents as Landlord may reasonably require to evidence, create, protect, perfect and preserve the validity and priority of Landlord's lien upon and security interest in Tenant's Property. -16 - June 25, 2019 Item #8 Page 22 of 40 ARTICLE 13 DAMAGE AND DESTRUCTION 13.1 Repairs by Tenant. If the Premises are totally or partially damaged or destroyed, Tenant shall, within ninety (90) days, commence and diligently pursue to completion the repair, replacement or reconstruction of the Premises, and of all Tenant's Property and Tenant Improvements to the extent necessary to permit full use and occupancy of the Premises for the purposes provided in this Lease. Repair, replacement or reconstruction of the Premises shall be accomplished in a manner and according to plans approved by Landlord; provided, however, Tenant shall not be obligated to repair, reconstruct or replace the improvements following their destruction in whole or substantial part except to the extent the loss is covered by insurance required to be carried by Tenant pursuant to this Lease (or would be covered whether or not such required insurance is actually in effect), and except if Tenant is required to indemnify Landlord for such destruction pursuant to Section 16. If Tenant is not obligated and elects not to restore, repair or reconstruct as herein provided, then this Lease shall terminate and neither party shall have any further obligation to the other, except for Tenant's obligation to pay rent and other charges which are accrued and unpaid as of the termination date and other provisions that survive the termination of this Lease. Tenant hereby waives California Civil Code Sections 1932 and 1933, as amended or recodified from time to time. 13.2 Termination Right. If the destruction to the Premises occurs during the last twelve {12) months of the Term and such destruction will require more than ninety (90) days to repair, then Tenant may elect to terminate this Lease provided that: (i) Tenant provides written notice to Landlord of such election to terminate within thirty (30) days after occurrence of the destruction; (ii) at the time of delivery of the termination notice Tenant is not in default under this Lease beyond any applicable notice and cure period; (iii) Tenant did not intentionally cause such destruction; (iv) all insurance required of Tenant under this Lease was in effect as of the date the destruction occurred and Tenant assigns to Landlord all claims rights and proceeds relating to the applicable destruction. ARTICLE 14 EMINENT DOMAIN 14.1 Total or Substantial Taking. If all of the Premises are taken under the power of eminent domain or such a substantial portion thereof is so taken that reasonable restoration will not result in the Premises being reasonably suitable for the conduct of Tenant's business, this Lease shall terminate on the date that Tenant is required to yield possession to the condemning authority, or on the date that the possession of the Premises or part thereof is taken, whichever is later. The term "eminent domain" shall include the exercise of any governmental power of condemnation and any private sale or other transfer in lieu of or under threat of condemnation. 14.2 Partial Taking. If there is a partial taking of the Premises, and after restoration of any building or other improvements, the Premises would be reasonably suitable for Tenant's continued occupancy and conduct of its business, then: (i) this Lease shall -17 - June 25, 2019 Item #8 Page 23 of 40 terminate as to the part taken as of the date of transfer of possession; {ii) rent shall be equitably reduced; and {iii) Landlord shall, at its own cost and expense, make all necessary repairs or alterations to the Premises required to restore the Premises to useful condition. During such repair or restoration, rent shall be equitably abated as set forth above. Notwithstanding the foregoing, Landlord, at its sole option, may elect to terminate this Lease by delivering written notice to Tenant within thirty {30) days after any such partial taking, in lieu of restoring the Premises to useful condition as provided above, unless Tenant agrees to perform all such restoration work at Tenant's sole cost. Tenant hereby waives any statutory rights of termination that may arise by reason of any taking of the Premises under the power of eminent domain. 14.3 Award. Tenant hereby renounces any interest in, and assigns to Landlord, any award made in any condemnation proceeding for any such taking, provided that Landlord shall have no interest in or be assigned any award made to Tenant for the taking of Tenant's Property or for Tenant's relocation expenses. Tenant hereby specifically waives any right it may have to any compensation award representing the excess of the market value, immediately before the taking, of Tenant's leasehold interest in the portion of the Premises taken over the rent attributable thereto under the terms of this Lease. ARTICLE 15 INDEMNIFICATION 15.1 Indemnification. Tenant covenants and agrees to indemnify, protect, defend and hold harmless Landlord and its agents, employees, officers, affiliates and representatives (collectively, "Landlord Parties") from and against any and all losses, claims, demands, damages {but not consequential damages unless awarded in favor of a third party), liabilities, actions, judgments, costs and expenses {including, without limitation, reasonable attorneys' fees) arising out of or resulting from {a) the negligent or willful acts or omissions of Tenant, its agents, contractors, subcontractors or employees, {b) any breach of any obligation, covenant, representation or warranty of Tenant under this Lease; or {c) the use and operation of the Premises during the Term. The foregoing shall not apply to any loss, claim, damage, liability, action, judgment, cost or expense to the extent arising out of or resulting from any negligence or willful misconduct of any Landlord Party. Tenant's obligations under this section shall survive the expiration or termination of this Lease. ARTICLE 16 DEFAULTS AND REMEDIES 16.1 Events of Default. The occurrence of any of the following events shall constitute an event of default and a material breach of this Lease on the part of Tenant: A. Abandonment or Failure to Continuously Operate. Tenant's vacation or abandonment of the Premises or Tenant's failure to actively and continuously use, operate and occupy the Premises. -18 - June 25, 2019 Item #8 Page 24 of 40 B. Failure to Make Payment. Tenant's failure to pay any rent or other sum due hereunder on the date when such payment is due, where such failure continues for five (5) days after written notice of such failure from Landlord, or Tenant's failure on three {3) occasions during any twelve {12) month period to timely pay rent on or before the due date as provided for herein {even though subsequently cured). C. Non-Permitted Use. Tenant's failure to comply with any provision of this Lease relating to the Permitted Use, where such failure continues for ten {10) days after written notice of such failure from Landlord. D. Failure to Perform Other Covenants. Tenant's failure to perform any of Tenant's other covenants, agreements or obligations hereunder, where such failure continues for thirty {30) days after written notice of such failure from Landlord {provided, however, if the nature of such default is such that the same cannot be reasonably cured within a thirty {30) day period, Tenant shall not be deemed to be in default if Tenant diligently commences such cure within such period and thereafter diligently proceeds to rectify and cure said default), except if a different notice or cure period is specified in another provision of this Lease. E. Bankruptcy. The making of a general assignment for the benefit of creditors by Tenant, or the filing of a voluntary or involuntary bankruptcy petition by or against Tenant, or the appointment of a receiver to take possession of all or substantially all of Tenant's assets or the Premises, or the attachment, execution or other judicial seizure of substantially all of Tenant's assets or the Premises, or in the event Tenant becomes insolvent or fails to generally pay Tenant's debts as such debts become due. F. Transfer without Consent. The occurrence of any Transfer without Landlord's express prior written consent. 16.2 Remedies. Upon the occurrence of an event of default by Tenant as set forth in Section 16.1 above, Landlord shall have the following rights and remedies, in addition to any and all other rights and remedies available to Landlord at law or in equity, including without limit those provided under California Civil Code Sections 1951.2 and 1951.4, as amended or recodified from time to time: A. Terminate Lease. Landlord shall have the right to terminate this Lease and all rights of Tenant hereunder by giving forty-five days {45) day written notice to Tenant. If this Lease is so terminated, then Landlord may recover from Tenant: {i) the worth at the time of award of any unpaid rent that had been earned at the time of such termination; ~ {ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned from the time of such termination until the time of award exceeds the amount of such rental loss Tenant proves could have been reasonably avoided; ~ {iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rental loss that Tenant proves could be -19 - June 25, 2019 Item #8 Page 25 of 40 reasonably avoided;~ (iv} any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of events would be likely to result therefrom, plus interest thereon at the Remedy Rate from the date incurred by Landlord until reimbursed in full. As used in Subsections (A}(i} and (ii} above, the "worth at the time of award" is computed by allowing interest at the Remedy Rate. As used in Subsection (A}(iii} above, the "worth at the time of award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%}. All amounts owing under this Subsection which are not paid when due shall bear interest at the Remedy Rate from the date owing until paid and such interest shall be compounded monthly. B. Reenter Premises. Landlord shall also have the right, with or without terminating this Lease, to reenter the Premises and to remove all persons and Tenant's Property from the Premises and store the Tenant's Property in a public warehouse or elsewhere at the cost of and for the account of Tenant. C. Maintain Lease; Relet Premises. Landlord shall have the remedy described in California Civil Code Section 1951.4 {lessor may continue lease in effect after Tenant's breach and abandonment and recover rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations}. Unless Landlord elects to terminate this Lease as provided in Section 17.2(A} above, Landlord may from time to time, without terminating this Lease, either recover all rent as it becomes due or relet the Premises or any part thereof for such term or terms and at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may deem advisable, with the right to clean and to make alterations and repairs to the Premises at Tenant's sole expense. If Landlord elects to relet as provided herein, then rent received by Landlord from such reletting shall be applied at Landlord's option: first, to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord; second, to the payment of any cost of such reletting (including reasonable attorneys' fees, tenant improvements customary to make the Premises ready to lease [including the removal of any specialized improvements installed by Tenant], court costs and brokerage commissions}; third, to the payment of the cost of any cleaning, alterations and repairs to the Premises; fourth, to the payment of rent due and unpaid hereunder; and the balance, if any, shall be applied in payment of future rent as the same may become due and payable hereunder. If the portion of such rentals received from such reletting during any month which is applied to the payment of rent under the reletting lease is less than the rent payable during that month by Tenant hereunder, then Tenant shall pay any such deficiency to Landlord immediately upon demand by Landlord. Such deficiency shall be calculated monthly and Tenant shall pay such deficiency monthly. Tenant shall also pay to Landlord, upon Landlord's demand, the costs and expenses incurred by Landlord in such reletting, including reasonable attorneys' fees, court costs, tenant improvements customary to make the Premises ready to lease (including the removal of any specialized improvements installed by Tenant} and brokerage commissions and in making any alterations and repairs to the Premises to be. -20 - June 25, 2019 Item #8 Page 26 of 40 No reentry, acts of maintenance or preservation, efforts to relet, or taking possession of the Premises by Landlord or the appointment of a receiver upon initiative of Landlord to protect Landlord's interest under this Lease shall be construed as an election to terminate this Lease unless an express written notice of such intention is delivered to Tenant or unless the termination thereof is decreed by a court of competent jurisdiction. Notwithstanding any reletting of the Premises without termination of this Lease by Landlord, Landlord may at any time after such reletting elect to terminate this Lease, in which case, Landlord shall have all the rights and remedies provided by law or equity or this Lease upon termination. D. Performance by Landlord. If Tenant breaches or fails to perform any of Tenant's obligations under this Lease and the breach or failure continues for thirty (30) days (or such shorter time period as may be specified otherwise in this Lease) after Landlord gives Tenant written notice of the breach or failure, Landlord, without thereby waiving or curing such may, but shall not be obligated to, perform any such obligation for the account and at the expense of Tenant. Landlord also may, but shall not be obligated to, perform any such obligation for the account and at the expense of Tenant without notice in case of an emergency. E. Receiver on Behalf of Landlord. If, at the instance of Landlord in any action arising under this Lease, a receiver shall be appointed to take possession of the Premises or to collect the rents derived therefrom, then the receiver may, if it shall be necessary or convenient in order to collect such rents, conduct the business of Tenant then being carried on in the Premises, and may take possession of any Tenant's Property and other personal property and records used in Tenant's business and use the same in conducting such business, without compensation to Tenant for such use. Neither application for, nor the appointment of a receiver shall be construed as an election by Landlord to terminate this Lease, unless express written notice of such election is given to Tenant. The fees and expenses of such receiver shall be charged to Tenant as Additional Rent. 16.3 Late Charges. Landlord and Tenant agree that the fixing of actual damages for Tenant's breach of any of the provisions of this Lease, including but not limited to the late payment by Tenant to Landlord of rent and other amounts due hereunder, would cause Landlord to incur costs not contemplated by this Lease, the exact amount of which would be extremely difficult or impracticable to ascertain. Such costs include but are not limited to accounting, processing, administrative, legal and clerical charges and late charges which may be imposed upon Landlord by the terms of any Mortgage covering the Premises. Accordingly, if any installment of rent or any other sum due from Tenant hereunder has not been received by Landlord or Landlord's agent within ten (10) days after such amount was due, Tenant shall pay to Landlord a late charge equal to five percent (5%) of any such delinquent installment of rent or any other delinquent sum due from Tenant. Tenant hereby agrees that said late charge represents a fair and reasonable estimate of the cost Landlord will incur by reason of late payment by Tenant. Acceptance of such late charge by Landlord shall not constitute a waiver of Tenant's default with respect to such overdue amount nor prevent Landlord from exercising -21 - June 25, 2019 Item #8 Page 27 of 40 any other rights and remedies provided for in this Lease, at law or in equity. If a late charge is payable by Tenant whether or not collected, for three (3) installments of rent during any twelve (12) month period, then the Base Rent shall automatically become due and payable to Landlord quarterly in advance, notwithstanding any other provision of this Lease to the contrary. 16.4 Interest on Past Due Obligations. Any and all amounts not paid to Landlord when due, shall bear interest, compounded monthly from the date due until paid at the rate of four percent (4%) per annum. Payment of such interest shall not excuse or cure any default by Tenant under this Lease and shall not affect any rights and remedies provided to Landlord in this Lease or at law or in equity, all of which shall be cumulative. Notwithstanding the foregoing, the City Manager of the City of Carlsbad shall have the right, in its sole discretion, to waive for good cause any interest payment upon written application of Tenant for any such delinquency period. 16.5 Waiver of Redemption. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of the Premises by reason of the violation by Tenant of any of the covenants and conditions of this Lease or otherwise. The rights given to Landlord herein are in addition to any rights that may be given to Landlord by any statute or otherwise. 16.6 Landlord's Default. Landlord shall in no event be charged with default in the performance of any of its obligations hereunder unless and until Landlord shall have failed to perform such obligations and such failure continues for more than thirty (30) days (or such additional time as is reasonably necessary to correct any such failure) after Landlord's receipt of written notice of such failure from Tenant. ARTICLE 17 SUBORDINATION AND ATTORNMENT 17.1 Subordination. This Lease is and shall be subordinate to any ground lease, mortgage, deed of trust and/or any other hypothecation or security document and advances and obligations thereunder now or hereafter placed upon the Premises, and any renewals, modifications, consolidations, replacements and extensions thereof (collectively "Mortgage"). Upon the request of Landlord, Tenant shall, from time to time, execute and deliver any documents that may be required by Landlord or the mortgagee, beneficiary, ground lessor or lender (each a "Landlord's Lender") under any such Mortgage, to effectuate any subordination, provided that any such Landlord's Lender agrees not to disturb Tenant's right to quiet possession under this Lease so long as Tenant is not in default (or with notice or passage of time or both would not be in default) under this Lease. If Tenant fails to execute and deliver any such document within ten (10) days after request, Tenant irrevocably constitutes and appoints Landlord as Tenant's special attorney-in-fact, coupled with an interest, to execute and -22 - June 25, 2019 Item #8 Page 28 of 40 deliver such document. Notwithstanding the foregoing, if Landlord's Lender elects to have this Lease prior to the lien of its Mortgage, and gives written notice to Tenant of such election, this Lease shall be deemed prior to such Mortgage regardless of the respective dates of execution, delivery and recordation of this Lease and any such Mortgage. 17.2 Attornment. In the event that Landlord transfers title to the Premises to a Landlord's Lender, or the Premises are acquired by a Landlord's Lender upon the foreclosure or termination of a Mortgage to which this Lease is subordinated, Tenant shall attorn to and recognize the Landlord's Lender as Tenant's landlord under this Lease and shall promptly execute and deliver any documents that Landlord may require to evidence such attornment, provided that Landlord's Lender agrees not to disturb Tenant's right to quiet possession under this Lease so long as Tenant is not in default (or with notice or passage of time or both would not be in default) under this Lease. If Tenant fails to execute and deliver any such document within ten (10} days after request, Tenant irrevocably constitutes and appoints Landlord as Tenant's special attorney-in-fact, coupled with an interest, to execute and deliver such document. 17.3 Estoppel Certificate. Upon the request of Landlord, Tenant at any time and from time to time shall execute, acknowledge, and deliver to Landlord, no later than ten (10) business days after Landlord's request therefor, an estoppel certificate in any reasonable form requested by Landlord ("Estoppel Certificate"). The Estoppel Certificate may be conclusively relied upon by a prospective lender, purchaser, or encumbrancer of Landlord's interest in the Premises. Failure to deliver the Estoppel Certificate within ten (10} days of such request shall be conclusive upon Tenant that: (i) this Lease is in full force and effect; (ii) there are no uncured defaults in Landlord's or Tenant's performance; (iii) not more than one month's Base Rent has been paid in advance; and (iv) the Security Deposit is in an amount equal to that specified in Article 1 hereof. Tenant hereby irrevocably appoints Landlord as its attorney-in- fact, which agency is coupled with an interest, to execute any such Estoppel Certificate upon Tenant's failure to do so within such ten (10) day period. 17.4 Rights of Landlord's Lender and Landlord's Purchaser. If any Landlord's Lender or any purchaser of Landlord's interest in the Premises ("Landlord's Purchaser") requires a modification of this Lease at any time, Tenant shall, at Landlord's request, promptly execute and deliver to Landlord instruments effecting the modifications that the Landlord's Lender or Landlord's Purchaser reasonably requires, provided that such modifications do not increase the rent, reduce the size of the Premises or otherwise adversely affect in any material respect any of Tenant's rights under this Lease. If Landlord's Lender or Landlord's Purchaser has given prior written notice to Tenant that it is the Landlord's Lender or Landlord's Purchaser and such notice includes the address at which notices to such Landlord's Lender or Landlord's Purchaser are to be sent, then Tenant shall give Landlord's Lender or Landlord's Purchaser, as the case may be, written notice simultaneously with any notice given to Landlord to correct any failure of Landlord to perform any of Landlord's obligations. Landlord's Lender and Landlord's Purchaser shall have the right after receipt of said written notice to correct or remedy such failure within a reasonable period of time. Any written notice of default given Landlord shall be -23 - June 25, 2019 Item #8 Page 29 of 40 null and void unless simultaneous written notice has been given to Landlord's Lender and Landlord's Purchaser. 17.5 Limitation of Liability. The covenants and agreements of Landlord under this Lease shall not be binding upon any person at any time after the transfer of that person's interest, as landlord, in the Premises. In the event of such a transfer, the covenants and agreements of Landlord shall thereafter be binding upon the transferee of Landlord's interest. ARTICLE 18 FORCE MAJEURE 18.1 Force Majeure. If either party hereto shall be delayed in or prevented from the performance of any act required hereunder by reason of acts of God, labor troubles, inability to procure materials, restrictive governmental laws or regulations or other causes without fault and beyond the control of the party obligated {financial inability excepted) (collectively, "Force Majeure"), performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay; provided, however, nothing in this Section shall delay the Rent Commencement Date or excuse Tenant from the prompt payment of any rent or other charge required of Tenant hereunder, except as may be expressly provided elsewhere in this Lease. ARTICLE 19 ASSIGNMENT AND SUBLETTING 19.1 Landlord's Consent. Tenant shall not voluntarily, involuntarily or by operation of law assign, mortgage, sublet, hypothecate or otherwise transfer or encumber all or any part of Tenant's interest in this Lease or in the Premises, or contract for the management or operation of the whole or any part of the Premises, or permit the occupancy of any part of the Premises by any other person or business entity, or permit transfer of this Lease by merger, consolidation or dissolution (collectively "Transfer"), without first obtaining Landlord's express written consent. No consent to any Transfer shall constitute a waiver of the provisions of this Section. If Tenant is a partnership or limited liability company, a withdrawal or change, voluntary, involuntary, or by operation of law, of any general partner or managing member or of twenty-five percent (25%) or more of the partnership or membership interest, or the dissolution of the partnership or limited liability company, shall be deemed a Transfer requiring Landlord's consent. If Tenant consists of more than one person or entity, a purported assignment, voluntary, involuntary, or by operation ot law, from one person to the other shall be deemed a Transfer requiring Landlord's consent. If Tenant is a corporation, any dissolution, merger, consolidation, or other reorganization of Tenant, or the sale or other transfer of twenty-five percent (25%) or more of the capital stock of Tenant or the value of the assets of Tenant, shall be deemed a Transfer requiring Landlord's consent. Landlord and Tenant agree (by way of example and without limitation) that it shall be reasonable for Landlord to withhold its consent to a Transfer if any of the following situations exist or may exist: (i) the proposed -24 - June 25, 2019 Item #8 Page 30 of 40 Transferee's (as defined below) use of the Premises conflicts with or is different from the Permitted Use; (ii) the proposed Transferee or its business is subject to compliance with additional requirements of law beyond those requirements which are applicable to Tenant; (iii) in Landlord's reasonable business judgment, the proposed Transferee lacks sufficient business reputation or experience to operate a successful business of the type and quality permitted under this Lease; (iv) Tenant is in default under this Lease; or (v) the then present net worth of the proposed Transferee is less than the greater of Tenant's net worth as of the date of this Lease or Tenant's net worth as the date of Tenant's request for consent.. Any attempted or purported Transfer without Landlord's prior written consent shall be void and of no force or effect, and shall not confer any estate or benefit on anyone. A consent to one Transfer by Landlord shall not be deemed to be a consent to any subsequent Transfer to any other party. 19.2 Request for Transfer. Tenant shall give Landlord at least sixty (60) days' prior written notice of any requested Transfer and of the proposed terms of such Transfer ("Transfer Notice"), including but not limited to: (i) the name and legal composition of the proposed assignee, sublessee, encumbrancer or transferee ("Transferee"); (ii) a current financial statement of the proposed Transferee prepared in accordance with generally accepted accounting principles consistently applied; (iii) the portion of the Premises Tenant proposes to Transfer (including square footage and location); and (iv) the nature of the proposed Transferee's business to be carried on in the Premises. The foregoing terms shall be in sufficient detail to enable Landlord to evaluate the proposed Transfer and the prospective Transferee. Within thirty {30) days after receipt of the Transfer Notice, Landlord shall either approve or disapprove of such Transfer. Tenant shall immediately notify Landlord of any modification to the proposed terms of such Transfer. Tenant shall also provide to Landlord copies of the fully executed documents pertaining to the Transfer after the Transfer has become effective. Whether or not Landlord consents to any proposed Transfer, Tenant shall pay Landlord's review and processing fee in the amount of $500.00, as well as any reasonable legal fees incurred by Landlord, within thirty (30) days after written request by Landlord. 19.3 Landlord's Rights. Upon receipt of a Transfer Notice pursuant to Section 19.2 above, Landlord shall have the right to (i) withhold its consent to such Transfer, as permitted pursuant to Section 19.1 above; (ii) terminate this Lease as it relates to the portion of the Premises described in the Transfer Notice and recapture such portion of the Premises, effective automatically as of the date of dispatch of a notice of termination from Landlord to Tenant, which notice may be sent at any time within thirty (30) days following Landlord's refusal to consent to the Transfer; (iii) sublet or receive an assignment of all or a portion of the Premises from Tenant at the lower of the rental specified in this Lease or in Tenant's Notice; or (iv) impose any of the following as conditions to Landlord's consent: (a) that all rents paid by the Transferee to Tenant in excess of the Base Rent be paid to Landlord; or (b) that an acceptable guaranty of this Lease be provided to Landlord; or (c) that either Tenant or the proposed Transferee cure, on or before the proposed effective date of such Transfer, any and all uncured defaults hereunder; provided, however, in no event shall Landlord's failure to -25 - June 25, 2019 Item #8 Page 31 of 40 condition its consent upon such cure be deemed to be a waiver of any such default or of Landlord's rights and remedies under this Lease or under law or in equity in regard thereto. If Landlord has elected to impose such a cure as a condition to its consent and such condition is not satisfied by the effective date of the Transfer, then the Transfer shall be voidable at Landlord's option. Landlord shall also have the right to condition Landlord's consent to any Transfer upon Tenant's and the Transferee's executing a written assumption agreement, in a form approved by Landlord. The assumption agreement shall require the Transferee to expressly assume all obligations of Tenant under this Lease and shall require Tenant and Transferee (but not the Guarantor if a replacement guaranty acceptable to Landlord is obtained) to be and remain jointly and severally liable for the performance of all conditions, covenants, and obligations under this Lease from the effective date of the Transfer of Tenant's interest in this Lease. Regardless of Landlord's consent to any Transfer, no Transfer shall release Tenant of Tenant's obligation or alter the primary liability of Tenant to pay rent and to perform all other obligations to be performed by Tenant hereunder. The acceptance of rent by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision hereof. These rights are in addition to Landlord's right to withhold its consent to any Transfer, and may be exercised by Landlord in its sole discretion without limiting Landlord in the exercise of any other right or remedy at law or in equity which Landlord may have by reason of such Transfer. In the event of default by any Transferee, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against said Transferee. Tenant expressly agrees that the provisions of this Article are not unreasonable standards or conditions for purposes of Section 1951.4(b)(2) of the California Civil Code, as amended or recodified from time to time. ARTICLE 20 NOTICES 20.1 Notices. All notices given under this Lease shall be in writing and shall be given or served either personally or by depositing the same by United States registered or certified mail postage prepaid, return receipt requested, or by a nationally-recognized overnight delivery courier, addressed to the applicable Address for Notices specified in Article 1. Notice shall be deemed to have been given (a) on the delivery date indicated by the United States Postal Service on the return receipt or by the courier or on the date such delivery is refused or deemed "undeliverable," or (b) on the date of personal delivery. Either party may change its address for notices by providing written notice as specified herein; provided, however, that all addresses provided must be an actual street address located in the United States of America. ARTICLE 21 AUTHORITY 21.1 Authority. If Tenant is a corporation, trust, general or limited partnership or limited liability company, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on -26 - June 25, 2019 Item #8 Page 32 of 40 behalf of said entity. If Tenant is a corporation, trust, partnership, or limited liability company, Tenant shall, simultaneously with execution of this Lease, deliver to Landlord written evidence of such authority satisfactory to Landlord. ARTICLE 22 QUIET ENJOYMENT 22.1 Quiet Enjoyment. Tenant, upon keeping, observing and performing all of the covenants and agreements of this Lease on its part to be kept, observed, and performed, shall lawfully and quietly hold, occupy and enjoy the Premises during the Term of this Lease. ARTICLE 23 ATTORNEYS' FEES 23.1 Attorney's Fees. Should either party commence an action or arbitration against the other to enforce any obligation hereunder, the prevailing party shall be entitled to recover the costs thereof and reasonable attorneys' fees actually incurred by such prevailing party (including the fees and charges of legal assistants or other non-attorney personnel performing services under the supervision of an attorney}, whether or not such litigation is prosecuted to judgment. ARTICLE 24 WAIVER 24.1 Waiver. Any waiver by either party of any breach by the other party of any one or more of the covenants, conditions, or agreements of this Lease shall not be nor be construed to be a waiver of any subsequent or other breach of the same or any other covenant, condition or agreement of this Lease, nor shall any failure on the part of either party to require or exact full and complete compliance by the other party with any of the covenants, conditions, or agreements of this Lease be construed as in any manner changing the terms hereof or to prevent Landlord from enforcing the full provisions hereof. Landlord's acceptance of any payment which is less than that required to be paid by Tenant shall be deemed to have been received only on account of the obligation for which it is paid and shall not be deemed an accord and satisfaction, notwithstanding any provisions to the contrary asserted by Tenant, written on any check or contained in any transmittal letter. The subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term or covenant hereof, other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rent. An express waiver must be in writing and signed by a person with the power to contractually bind Tenant or Landlord. An express waiver shall affect only the default specified in the waiver, and only for the time and to the extent expressly stated. -27 - June 25, 2019 Item #8 Page 33 of 40 ARTICLE 25 LIMITATION ON CLAIMS 25.1 Limitation on Claims. Any claim, demand, right or defense of any kind by Tenant, which is based upon, arising in connection with or in any way related to this Lease or the negotiations prior to its execution, shall be barred unless Tenant commences an action thereon, or interposes in a legal proceeding a defense by reason thereof, within twelve {12) months after the date of the inaction or omission or the date of the occurrence of the event or of the action to which the claim, demand, right or defense relates, whichever applies. ARTICLE 26 INTERPRETATION AND APPLICATION 26.1 Submission of Lease. Submission of this instrument for examination or signature by Tenant does not constitute an offer, a reservation of, option for or option to lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant. 26.2 Governing Law. This Lease shall be construed in accordance with and governed by the statutes, decisions, and other laws of the State of California. Tenant expressly agrees that any and all disputes arising out of or in connection with this Lease shall be litigated only in the Superior Court of the State of California for San Diego County, and Tenant hereby consents to the jurisdiction of said court. 26.3 Complete Agreement. This Lease contains all terms, covenants, conditions, warranties and agreements of the parties relating in any manner to the rental, use and occupancy of the Premises. No prior agreements or understanding pertaining to the same shall be valid or of any force or effect. 26.4 Amendment. This Lease may not be amended, altered or modified in any way except in writing signed by the parties hereto. 26.5 No Partnership. It is agreed that nothing contained in this Lease shall be deemed or construed as creating a partnership or joint venture between Landlord and Tenant or between Landlord and any other party, or cause Landlord to be responsible in any way for the debts or obligations of Tenant or any other party.:. 26.6 No Merger. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work as a merger, but shall, at the option of Landlord, either terminate all or any existing subleases or subtenancies, or operate as an assignment to Landlord of any or all such subleases or sub-tenancies. 26.7 Severability. If any provision of this Lease or application thereof to any person or circumstances shall to any extent be invalid, the remainder of this Lease {including -28 - June 25, 2019 Item #8 Page 34 of 40 the application of such provision to persons or circumstances other than those to which it is held invalid} shall not be affected thereby, and each provision of this Lease shall be valid and enforced to the fullest extent permitted by law. 26.8 Captions. The captions of the Articles and Sections hereof are for convenience only and are not a part of this Lease and do not in any way limit or amplify the terms and provisions of this Lease. 26.9 Words. The words "Landlord" and ''Tenant", as used herein, shall include the plural as well as the singular. Words used in the neuter gender include the masculine and feminine. 26.10 Joint and Several Liability. If either party is comprised of more than one individual or entity, the obligations imposed upon such party hereunder shall be joint and several to all parties signing this Lease as such party. 26.11 Exhibits. All exhibits attached to this Lease are incorporated herein by this reference and made a part hereof, and any reference in the body of this Lease or in the exhibits to the "Lease" shall mean this Lease together with all exhibits. ARTICLE 27 MISCELLANEOUS 27.1 Time is of the Essence. Time is of the essence of each and all of the terms and provisions of this Lease. 27.2 Successors. Subject to the restrictions on Transfers contained in this Lease, all the terms, covenants and conditions hereof shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties hereto. -29 - June 25, 2019 Item #8 Page 35 of 40 27.3 Recordation; Quitclaim. Tenant shall not record this Lease or any memorandum hereof. Landlord has the right in its absolute discretion to record this Lease or a memorandum hereof, and, upon Landlord's request, Tenant shall execute and have acknowledged the same for recordation. Upon termination of this Lease for any reason, Tenant shall execute, acknowledge and deliver to Landlord within thirty {30) days after receipt of written demand therefor a good and sufficient deed whereby all right, title and interest of Tenant in the Premises is quitclaimed to Landlord. If Tenant fails to deliver the required deed to Landlord, Landlord may prepare and record a notice reciting the failure of Tenant to execute, acknowledge and deliver such deed and said notice shall be conclusive evidence of the termination of this Lease and of all right of Tenant or those claiming under Tenant in and to the Premises. 27.4 Limitation of Liability. It is expressly understood and agreed that notwithstanding anything in this Lease to the contrary, and notwithstanding any applicable law to the contrary, the liability of Landlord hereunder (including any successor landlord) and any recourse by Tenant against Landlord shall be limited solely and exclusively to Landlord's interest in the Premises, including the income and profits from the Premises, and neither Landlord, nor any of its officers, employees, affiliates, managers or agents shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. The limitations of liability provided in this Section are in addition to, and not in limitation of, any limitation on liability applicable to Landlord provided by law or in any other contract, agreement or instrument. Under no circumstances shall Landlord be liable for punitive or special damages, indirect damages or other consequential damages, including without limitation, injury to Tenant's business or for any loss of income or profit therefrom. In the event of any transfer of Landlord's interest in this Lease, the Landlord herein named (and in case of any subsequent transfer, the then transferor) shall be automatically freed and relieved from and after the date of such transfer of all liability for the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed; provided, however, that any funds in the hands of Landlord or the then 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. -30 - June 25, 2019 Item #8 Page 36 of 40 27.5 Broker. Landlord and Tenant each represents and warrants to the other that it has not retained the services of or had any dealings with any broker, finder or real estate licensee and owes no person or entity any finder's or broker's fee, commission or payment of any kind whatsoever. Landlord and Tenant each shall indemnify, protect, defend and hold harmless the other from and against all liability for compensation or charges which may be claimed by any such broker, finder or other similar party by reason of any dealings or actions of the indemnifying party, including {without limitation) any costs, expenses or attorney's fees reasonably incurred with respect thereto. 27.6 Counterparts. This Lease may be executed in any number of counterparts each of which shall be deemed an original and all of which shall constitute one and the same Lease with the same effect as if all parties had signed the same signature page. [Signatures on Next Page] -31 - June 25, 2019 Item #8 Page 37 of 40 ARTICLE 28 Signatures The individuals executing this Lease represent and warrant that they have the right, power, legal capacity and authority to enter into and to execute this Lease on behalf of the respective legal entities of Tenant and Landlord. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above written. LANDLORD: City of Carlsbad, a California municipal corporation By -:Jf/ di JUL Name: MatL Hall Title: ~Mayo_r _______ _ APPROVED AS TO FORM By: Date: Celia A. Brewer, City Attorney -~-l.)IU_re __ ~--~2019 TENANT: Metropolitan Area Advisory Committee on Anti-Poverty in San Diego County, Inc., dba "MAAC Project" Note: Signature of Tenant must be notarized -32 - June 25, 2019 Item #8 Page 38 of 40 EXHIBIT A LEGAL DESCRIPTION OF PREMISES APN NO: 205-112-37-00 Lots 9 and 10, of Optima Tract, in the City of Carlsbad, County of San Diego, State of California, according to Map thereof No. 1805, filed in the office of the County recorder of San Diego County September 4, 1924, as described in Certificate of Compliance recorded June 28, 1993, as instrument No. 93-0408315 of Official Records. Also known as: 3368 Eureka Place, Carlsbad, CA 92008 -1 - DOCS 12l 163-000007/2625579.8 June 25, 2019 Item #8 Page 39 of 40 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 • A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of ~ ~~ } On \s>\_~~ Date before me, ----~--1.."0'IP---''-"'~~=--'""'--~--=-=----------- Here Insert Name and Title of the Officer personally appeared --~___,.""""'ox::~~.i:,e___~---"--"~·"-"'-+'"""°-==.z""_=-------------------- '-Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence to be the perso~ whose nam~) is/~ subscribed, to the within instrument and acknowledged to me that he/~e/they executed the same in his/~~eir authorized capacity~), and that by his/her/their signatureW on the instrument the person~ or the entity upon behalf of which the perso~ acted, executed the instrument. APRIL DAW~ rox Mota')' Pub\K . C,1\iforma San 0,~o County . -nsos~& (ornrn1ss1on • " 20 22 [~pi,e'i Ju\ <>-My (orn:1' .. z , > Place Notary Seal and/or Stamp Above I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature -~---=-~-::.::....::,:..__:::,,..__.=----------- Signature of Notary Public OPTIONAL Completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: ____________________________ _ Document Date: ______________________ Number of Pages: ____ _ Signer(s) Other Than Named Above: ________________________ _ Capacity(ies) Claimed by Signer(s) Signer's Name: ____________ _ Signer's Name: ____________ _ □ Corporate Officer -Title(s): ______ _ □ Corporate Officer -Title(s): ______ _ □ Partner -□ Limited □ General □ Partner -□ Limited □ General □ Individual □ Attorney in Fact □ Individual □ Attorney in Fact □ Trustee □ Guardian of Conservator □ Trustee □ Guardian of Conservator □ Other: □ Other: Signer is Representing: _________ _ Signer is Representing: _________ _ ©2017 National Notary Association June 25, 2019 Item #8 Page 40 of 40