COMMERCIAL LEASE AGREEMENT
THIS COMMERCIAL LEASE AGREEMENT (the “Lease”) is made and entered into by and between the CITY OF FONTANA, a California municipal corporation (“Landlord”) and La Tapatia arrow inc., a California corporation (“Tenant”), under the following terms and conditions:
Introduction. Landlord owns the commercial property located at 8572 Sierra Avenue, Fontana, California 92335, identified as Assessor Parcel Number 0191-274-33 (the “Property”). The Property is improved with a commercial structure used for restaurant purposes and other related improvements. As used herein, the term “Project” refers to the real property in the downtown area of Fontana owned or ground leased by Landlord.
Description of the Leased Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Property, consisting of approximately 10,158 rentable square feet, known as 8572 Sierra Avenue, referred to herein as the “Premises” and shown on Exhibit A.
Term and Renewal; Termination.
Term. The term of this Lease shall commence (the “Commencement Date”) upon the sooner of (i) the date the Tenant opens for business or (ii) 90 days after the Delivery Date (estimated to be July 1, 2027), and shall expire on the last day of the one hundred twentieth (120th) full calendar month beginning on the Commencement Date (the “Original Term”), unless sooner terminated pursuant to the terms of this Lease. Notwithstanding anything to the contrary in this Lease contained, the term “Term” whenever used in this Lease, shall be defined to include the Original Term and any Renewal Terms that are properly exercised. “Lease Year,” as used herein, means a period of twelve (12) consecutive months during the Lease Term, the first full Lease Year commencing on the Commencement Date and continuing through the twelfth (12th) full calendar month occurring on or after the Commencement Date. “Partial Lease Year” means that portion of the Lease Term prior to the first full Lease Year or following the last full Lease Year. Notwithstanding the foregoing, the estimated Delivery Date of July 1, 2027 is provided for planning purposes only and shall not be binding on Landlord. Any delay in delivery of possession of the Premises shall not constitute a default by Landlord, entitle Tenant to terminate this Lease or give rise to any claim by Tenant.
Option to Renew. Tenant shall have two (2) five (5) year options to renew (each, a “Renewal Term”), subject to the terms and conditions described in Section 24. In the event any such option is effectively exercised with respect to the renewal term, all terms and conditions of this Lease shall be applicable to such renewal term, except Base Rent shall be adjusted in accordance with Section 4(a)(3) below.
Rent. The monthly rent as of the Commencement Date shall be Five Thousand and 00/100 Dollars ($5,000.00) per month, subject to increase as provided in Section 4(a) below (“Base Rent”). Tenant shall, commencing on the Commencement Date and continuing thereafter on the first day of each calendar month, pay Landlord such monthly installments of Base Rent, without setoff, deduction or demand; provided, however, that the installments of Base Rent for the fourth (4th) full calendar month ($5,000.00) shall be paid upon the Commencement Date. Notwithstanding the foregoing, Base Rent shall be abated for the first three (3) full calendar months of the Term.
Except as otherwise provided herein, all rent shall be absolutely net to Landlord so that this Lease shall yield net to Landlord the rent to be paid each month during the Term of this Lease. Accordingly, and except as otherwise provided in this Lease, all costs, expenses and obligations of every kind or nature whatsoever relating to the Premises which may arise or become due during the Term of this Lease including, without limitation, all costs and expenses of maintenance and repairs, insurance and taxes, shall be paid by Tenant. Nothing herein contained shall be deemed to require Tenant to pay or discharge any liens or mortgages of any character whatsoever which may exist or hereafter be placed upon the Premises by an affirmative act or omission of Landlord, except as expressly required under this Lease.
Base Rent Adjustment.
Percentage of Gross Sales Rent. During the Original Term, Base Rent shall be calculated as follows: beginning on the first day of the second (2nd) Lease Year and continuing on the first day of every subsequent Lease Year during the Original Term (subject to Section 4(a)(2) below), Base Rent shall be adjusted annually as of the first day of each Lease Year to the greater of (a) the monthly Base Rent for the previous Lease Year, or (b) an amount equal to: (i) the Adjusted Gross Sales for the immediately preceding Lease Year, (ii) multiplied by five percent (5.0%), and (iii) divided by twelve (12) (rounded to nearest full cent). Tenant may, at Tenant's election, convert from this percentage-of-gross-sales rent calculation to a fixed rate per rentable square foot as provided in Section 4(a)(2) below. If Tenant does not elect to convert, Base Rent shall continue to be calculated pursuant to this Section 4(a)(1) for the remainder of the Original Term.
Fixed Rate Conversion Election. At any time after the first (1st) Lease Year, Tenant shall have the right, in Tenant's sole discretion, to elect to convert the calculation of Base Rent from the percentage-of-gross-sales method described in Section 4(a)(1) above to a fixed rate per rentable square foot of the Premises (the “Fixed Rate Conversion”). Tenant may exercise the Fixed Rate Conversion by delivering written notice to Landlord (the “Conversion Notice”) at least sixty (60) days prior to the first day of the Lease Year in which the fixed rate is to take effect (the “Conversion Date”). Upon the Conversion Date, Base Rent shall be calculated by multiplying the applicable per-square-foot rate set forth in Exhibit C attached hereto by the rentable square footage of the Premises (10,158 rentable square feet). If Tenant elects to convert to a fixed rate after the second (2nd) Lease Year, the applicable fixed rate shall be the rate shown on Exhibit C for the Lease Year in which the Conversion Date falls. Once Tenant has exercised the Fixed Rate Conversion, the conversion shall be irrevocable and Tenant may not revert to the percentage-of-gross-sales method for the remainder of the Term, including any Renewal Term.
Renewal Terms. The Base Rent to be paid for the first year of each applicable Renewal Term, if exercised, shall be equal to the “Fair Market Rental Rate” for the Premises, regardless of whether Tenant previously elected the Fixed Rate Conversion under Section 4(a)(2). The Fair Market Rental Rate shall be determined by Landlord and Tenant, based on base rent then being paid by tenants of restaurant spaces of equivalent size in comparable properties similar in size, location, amenities, tenant mix, condition, drawing ability and quality to the Property, provided that notwithstanding anything to the contrary set forth herein, in no event shall the Base Rent for the first Lease Year of the Renewal Term be less than one hundred three percent (103%) of the Base Rent in effect immediately prior to the Renewal Term. Beginning on the first anniversary of the Renewal Term and continuing on the first day of every subsequent Lease Year through the end of the Term, Base Rent shall increase by three percent (3.0%) (rounded to nearest full cent) of the amount of the Base Rent from the immediately preceding Lease Year. For the avoidance of doubt, during any Renewal Term, Base Rent shall be calculated on a fixed-rate basis only and shall not revert to or be calculated under the percentage-of-gross-sales method described in Section 4(a)(1). In the event Landlord and Tenant are unable to agree on a Base Rent applicable for the first Lease Year of any Renewal Term at least ninety (90) days prior to the commencement date of the applicable Renewal Term, the Base Rent shall be determined as follows: Landlord and Tenant shall each appoint an independent real estate appraiser with at least five (5) years commercial appraisal experience in the Fontana area, and having no financial interest, relationship, or affiliation with either party, or having any business dealings with either party for the previous five (5) years. Within thirty (30) days after their appointment, each appraiser shall provide a written appraisal of Base Rent for the first Lease Year of the applicable Renewal Term, based upon the above criteria. The Base Rent for the first Lease Year of such Renewal Term shall be the average of two (2) appraisals. However, if the appraisals differ by more than ten percent (10%), then a third similarly qualified appraiser shall be appointed by the first two (2) appraisers within ten (10) days thereafter, which third appraiser shall also provide a written appraisal of Base Rent. Base Rent shall then be the average of three (3) appraisals, except that any appraisal which differs by more than ten percent (10%) from both of the other appraisals shall be discarded and the Base Rent shall be the average of two (2) remaining appraisals. If no two (2) appraisals are within ten percent (10%) of each other, then the issue of Base Rent shall be submitted to a binding arbitration before the Judicial Arbitration Mediation Services in San Bernardino County, California, whose decision as to Base Rent shall be binding on the parties. Each party shall bear equally, the cost of the foregoing procedures. Tenant shall have no other right to extend the term beyond the Renewal Term(s).
Gross Sales and Adjusted Gross Sales Reporting. For all periods prior to the Fixed Rate Conversion, Tenant shall (i) not later than the fifth (5th) day after the close of each calendar month, deliver to Landlord a written statement certified under oath by Tenant or an officer of Tenant, showing Gross Sales and Adjusted Gross Sales made in such calendar month; and (ii) not later than thirty (30) days after the end of each Lease Year or Partial Lease Year, deliver to Landlord a statement of Gross Sales and Adjusted Gross Sales for such Lease Year or Partial Lease Year the correctness of which is certified to by Tenant or an officer of Tenant. If Tenant fails to prepare and deliver any statement of Gross Sales and Adjusted Gross Sales required hereunder, within the time or times specified above, then Landlord shall have the right, in addition to the other rights and remedies set forth in this Lease, (a) to collect from Tenant a sum which shall be $250.00 which shall be deemed liquidated damages for administrative and overhead expenses resulting from such failure, and (b) to estimate Tenant's Adjusted Gross Sales for any non-reported period.
In addition to the payment of Base Rent, Tenant covenants and agrees to pay to Landlord, without notice or demand, an amount, if any, equal to five percent (5%) (the “Percentage Rent Rate”) applied against that portion of Tenant's Adjusted Gross Sales during each Lease Year or Partial Lease Year in excess of One Million Two Hundred Thousand Dollars ($1,200,000.00) (the “Sales Breakpoint”) (hereinafter referred to as “Percentage Rent”). In the event of a Partial Lease Year, the Sales Breakpoint shall be determined by multiplying the Sales Breakpoint for the full Lease Year, by a fraction, the numerator of which shall be the number of days contained in such Partial Lease Year and the denominator of which shall be 365 days. Percentage Rent shall become due and payable in each Lease Year on the fifth (5th) day of the month immediately following the month during which Adjusted Gross Sales exceed the Sales Breakpoint for such Lease Year, and thereafter shall be paid monthly on all additional Adjusted Gross Sales made during the remainder of such Lease Year, such payments to be made concurrently with the submission by Tenant to Landlord of the written statement of monthly Adjusted Gross Sales as provided for herein.
Gross Sales and Adjusted Gross Sales Defined. As used herein, “Gross Sales” means the sale prices of all goods, wares and merchandise sold and the charges for all services performed by Tenant or any other person or entity in, at, or from the Premises for cash, credit or otherwise, without reserve or deduction for uncollected amounts, including but not limited to sales and services (i) where the orders originate in, at or from the Premises, regardless from whence delivery or performance is made, (ii) pursuant to mail, telephone, telegraph, catalogue, facsimile, internet, electronic, video and computer orders, and orders by means of other technology-based systems whether now existing or hereafter developed, and other orders received, placed or filled at the Premises, (iii) resulting from transactions originating in, at or from the Premises, and (iv) deposits not refunded to customers. Excluded from Gross Sales in order to determine “Adjusted Gross Sales” shall be: (i) exchanges of merchandise between Tenant's stores made only for the convenient operation of Tenant's business and not to consummate a sale made in, at or from the Premises, (ii) returns to manufacturers, (iii) refunds to customers (but only to the extent included in Gross Sales), (iv) sales of fixtures, machinery and equipment after use in Tenant's business in the Premises, (v) gratuities paid to staff, to the extent separately itemized on a receipt, and (vi) sales, excise or similar tax imposed by governmental authority and collected from customers and paid out by Tenant. No other taxes shall be deducted from Gross Sales. Notwithstanding anything to the contrary contained in this Lease, during any period of time (computed on a daily basis) when the Premises is not open for business to the public, then, Gross Sales for the period(s) of the immediately preceding Lease Year corresponding to the periods of closure of the Premises during the then current Lease Year (or in the case of a closing during the first year of the Term, Gross Sales for such year, or portion thereof, shall be increased proportionally to correspond to the periods of closure of the Premises) shall be added to the Gross Sales for such current Lease Year.
Audit. Tenant will preserve for at least three (3) years at Tenant's notice address all original books and records disclosing information pertaining to Gross Sales and Adjusted Gross Sales and such other information respecting Gross Sales and Adjusted Gross Sales as Landlord requires, including, but not limited to, cash register tapes, sales slips, sales checks, gross income and sales tax returns, bank deposit records, sales journals and other supporting data including itemized records of permitted exclusions. Landlord and its agents shall have the right during business hours to examine and audit such books and records preserved by Tenant. If such examination or audit discloses a discrepancy of three percent (3%) or more for any period, or if Tenant's Gross Sales and Adjusted Gross Sales cannot be verified due to the insufficiency or inadequacy of Tenant's records, or if Tenant shall have failed to furnish Landlord any monthly statement of Gross Sales and Adjusted Gross Sales during any Lease Year, Tenant shall promptly pay Landlord the cost of said audit. Tenant shall, in any event, pay to Landlord the amount of any deficiency in rents which is disclosed by such audit. Tenant's obligation to preserve all original books and records shall survive the expiration of the Lease Term or the earlier termination of this Lease.
Late Charge. Tenant acknowledges that late payment by Tenant to Landlord of rent will cause Landlord to incur costs not contemplated by this Lease. If any installment of rent due from Tenant is not received by Landlord within five (5) days after it becomes due, Tenant shall pay to Landlord an additional sum of five percent (5%) of the overdue rent as a late charge. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment by Tenant. Acceptance of any late charge shall not constitute a waiver of Tenant's default with respect to the overdue amount or prevent Landlord from exercising any of the other rights and remedies available to Landlord.
Interest on Unpaid Rent. Rent or other charges under this Lease not paid within five (5) days of the date due shall, in addition to any late charges under Section 4(c) above, bear interest at the lesser of the maximum legal rate or ten percent (10%) per annum from the date due until paid.
Place of Payment of Rent. Rent and all other sums which shall become due under this Lease, including but not limited to late charges and additional rent, shall be payable by hand delivery or mail at 16860 Valencia Ave, Fontana, California 92335, or at such other place as Landlord may designate from time to time in writing. Mailed payments must be received (not postmarked) by Landlord by the date due.
Security Deposit. Upon (i) execution of this Lease, Tenant shall deposit with Landlord the sum of Ten Thousand and 00/100 Dollars ($10,000.00), and (ii) on or before the Delivery Date, Tenant shall deposit with Landlord an additional sum of Ten Thousand and 00/100 Dollars ($10,000.00), for an aggregate amount of Twenty Thousand and 00/100 Dollars ($20,000.00) (collectively, the “Security Deposit”) as security for the full and faithful performance by Tenant of all the terms, covenants, and conditions of this Lease. The Security Deposit shall not be deemed an advance payment of rent or a measure of Landlord’s damages in the event of default by Tenant. Landlord may, but shall not be obligated to, apply all or any portion of the Security Deposit toward the cure of any default by Tenant under this Lease, in which case Tenant shall promptly replenish the Security Deposit within five (5) business days of written demand by Landlord. The Security Deposit, or any remaining balance thereof, shall be returned to Tenant within the time required by applicable law following the expiration or earlier termination of this Lease and surrender of the Premises in the condition required hereunder, provided that Tenant has fully performed its obligations hereunder.
In the event of a sale, conveyance, or transfer of Landlord’s interest in the Premises, Landlord shall transfer the Security Deposit (or any unapplied portion thereof) to the purchaser or transferee, and all obligations and rights of Landlord with respect to the Security Deposit under this Lease shall bind and inure to the benefit of such successor landlord.
Tenant may not use any portion of the Security Deposit to satisfy any of Tenant’s rental obligations hereunder, including the last month’s rental payment. Failure of Tenant to pay any Base Rent or other charges when due constitutes a material breach of this Lease for which Landlord may re-enter and take possession of the Premises in accordance with law, notwithstanding the fact that Landlord may have possession of a security deposit. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code and all other provisions of law, now or hereafter in effect, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim from the Security Deposit, in addition to all Base Rent or other sums owing under this Lease, all sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the acts or omissions of Tenant or any agent, representative, employee, contractor, invitee, guest or customer of Tenant.
Condition of, and Improvements to, Premises.
Improvements; Warm Shell Delivery. Prior to the Delivery Date, Landlord shall perform renovation work to the Premises to deliver the Premises in “Warm Shell Condition,” meaning a condition in which the following elements are substantially completed, as determined by Landlord in its sole discretion, generally in accordance with the Preliminary Construction Plans (as defined below): (i) all framing, (ii) drywall installation, (iii) paint, (iv) flooring, (v) heating, ventilation and air conditioning (“HVAC”) systems, (vi) electrical systems and fixtures, and (vii) plumbing (collectively, the “Landlord Work”). Landlord makes no representation or warranty that the Warm Shell Condition will be suitable for Tenant's particular use or that any building systems will have capacity sufficient for Tenant's intended operations. Following delivery in Warm Shell Condition, Tenant shall be solely responsible for all upgraded finishes, appliances, equipment, furniture, and any modifications or upgrades to building systems necessary for Tenant's intended use of the Premises, all at Tenant's sole cost and expense. Except for the Landlord Work, Landlord shall have no obligation or responsibility, actual or implied, to install, construct, accommodate, or make any improvements to the Premises prior to, or as a condition of, Tenant's occupation of the Premises. The “Delivery Date” shall mean the date Landlord delivers possession of the Premises with the Landlord Work substantially completed, as determined by Landlord in its sole discretion. A set of preliminary construction plans depicting the scope and specifications of the Landlord Work is attached hereto as Exhibit D (the “Preliminary Construction Plans”). Prior to the commencement of the Landlord Work, Landlord shall provide Tenant with updated final construction plans (the “Final Construction Plans”). If the Final Construction Plans contain material changes from the Preliminary Construction Plans, Tenant shall have the right to terminate this Lease by delivering written notice to Landlord within ten (10) business days after Tenant's receipt of the Final Construction Plans, which notice shall specifically identify the material changes that form the basis for Tenant's termination. In the event of such termination, Landlord shall retain the Security Deposit paid by Tenant pursuant to Section 6, and Tenant shall be relieved of all further obligations under this Lease. If Tenant does not deliver a termination notice within such ten (10) business day period, Tenant shall be deemed to have accepted the Final Construction Plans, which shall replace the Preliminary Construction Plans as Exhibit D for all purposes under this Lease. For purposes of this Section, “material changes” means changes that (i) reduce the rentable square footage of the Premises by more than five percent (5%), or (ii) eliminate one or more of the Warm Shell Condition elements listed in clauses (i) through (vii) above in their entirety. Minor variations in the quality or specifications of materials, finishes, equipment, or layout from those shown on the Preliminary Construction Plans shall not constitute material changes. Landlord shall have the right, in its sole discretion, to make modifications to the Preliminary Construction Plans that Landlord determines are necessary or desirable, provided that such modifications do not constitute material changes as defined herein. In no event shall Landlord be liable for consequential, incidental, or special damages arising out of any delay in the Landlord Work or the condition of the Premises upon delivery, and Tenant's sole remedy for any failure by Landlord to deliver the Premises in Warm Shell Condition shall be to require Landlord to use commercially reasonable efforts to correct such deficiency within a reasonable period of time.
As-Is Condition. Tenant warrants and agrees that Tenant has inspected the Premises. Tenant agrees to take possession of the Premises in an AS-IS condition (which exists on the Delivery Date, after completion of the Landlord Work) and Tenant further agrees that, if Tenant wishes to construct any improvement in the Premises, Tenant shall comply with all requirements in Exhibit B as well as Section 14 (Alterations and Liens) of this Lease. Landlord makes no representations regarding the condition, status, compliance with laws or suitability for a particular purpose for Tenant's use. Tenant hereby acknowledges and agrees that Tenant has inspected and investigated the Premises and Tenant further acknowledges and agrees that the Premises are in satisfactory condition. Tenant hereby accepts the Premises in their then-current condition, “AS-IS”, “WHERE-IS” and “WITH ALL FAULTS”. Notwithstanding anything in this Lease to the contrary, Tenant expressly acknowledges that neither Landlord nor its agents, employees, or representatives have made any representations or warranties as to the suitability of the Premises for Tenant’s intended use. Without limiting the foregoing, Landlord makes no representation or warranty regarding the Premises or the suitability of the existing utility services and systems for Tenant’s proposed use. It shall be the sole responsibility of Tenant to verify (i) all governmental requirements applicable to Tenant’s use of the Premises, including without limitation zoning, and (ii) the capacity of all mechanical systems and improvements within the Premises to satisfy Tenant’s intended use. Tenant hereby agrees and warrants that it has investigated and inspected the condition of the Premises and the suitability of same for Tenant’s purposes, and Tenant does hereby 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. The taking of possession of the Premises, or any portion thereof, by Tenant shall conclusively establish that the Premises were at such time in satisfactory condition. Tenant hereby waives Subsection 1 of Section 1932 and Sections 1941 and 1942 of the Civil Code of California or any successor provision of law. EXCEPT FOR ANY EXPRESS WARRANTIES SET FORTH IN THE LEASE, TENANT, FOR ITSELF, AND ITS OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES, AFFILIATES, SUCCESSORS AND ASSIGNS, EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY OF HABITABILITY, MERCHANTABILITY, OR FITNESS OF THE PREMISES FOR A PARTICULAR PURPOSE OR USE.
Condition Upon Surrender. Upon termination of this Lease, Tenant shall surrender the Premises to Landlord in as good condition as when originally received, ordinary wear and tear and damage by fire, earthquake, flood or act of God excepted, and including any repairs or improvements made by Tenant. If Tenant fails to maintain the Premises in good order and repair, after thirty (30) days' prior written notice, Landlord may, at its option, make such repairs, and Tenant shall pay the reasonable cost thereof as additional rent hereunder within ten (10) days after receipt of a written statement therefor. In the event the giving of thirty (30) days' prior notice may result in additional damage to the Premises, Landlord may make such repairs, at Tenant's expense, without thirty days' prior written notice.
Inspection by Certified Access Specialist. Landlord discloses that the Premises have not undergone inspection by a Certified Access Specialist as referenced in California Civil Code Section 1938 subsection (e) which provides: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” Pursuant to the foregoing Section 1938(e), Tenant acknowledges and agrees that, if Tenant wishes to have the Premises inspected by a CASp: (i) Tenant must notify Landlord on or before the date when Tenant executes this Lease pursuant to the election below; (ii) the inspection will be at Tenant's sole cost and expense; (iii) the inspection must be scheduled through Landlord and in coordination with the Landlord’s property manager; (iv) any repairs or modifications inside or outside of the Premises necessary to correct any violation of construction-related accessibility standards that is noted in the CASp report shall be Tenant’s responsibility; provided, however, that Landlord shall have the right to perform any such repairs or modifications at Tenant’s sole cost and expense, and Tenant shall reimburse Landlord within ten (10) days of written demand by Landlord; and (v) Tenant must provide a copy of the CASp report to Landlord on completion. By initialing below, Tenant represents that:
Tenant wishes to have a CASp inspection of the Premises Initials: ______________ Tenant hereby waives its right to have a CASp inspection of the Premises Initials: ____________ Use. The Premises shall be used only for the operation of a full-service family style restaurant and bar and related catering services and for no other purpose (“Permitted Use”). Tenant shall not use any portion of the Premises for purposes other than those specified without first obtaining the written consent of Landlord.
Uses Prohibited. In addition to uses prohibited pursuant to Section 8, Tenant shall not do or permit anything to be done in or about the Premises nor bring or keep anything therein which is not within the permitted use of the Premises which will in any way increase the existing rate of or affect any fire or other insurance upon the Property or any of its contents, or cause a cancellation of any insurance policy covering the Property or any part thereof or any of its contents. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Property or injure or annoy them or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose; nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or allow to be committed any waste in or upon the Premises. Under no circumstances shall the right herein granted to use the Premises be deemed to include the right to store any property, temporarily or permanently, outside of any building on the Premises. Any such storage shall be permitted only by the prior written consent of Landlord or Landlord's designated agent, which consent may be revoked at any time. In the event that any unauthorized storage shall occur then Landlord shall have the right, without notice, in addition to any other rights and remedies that it may have, to remove the property and charge the cost to Tenant, which cost shall be payable as additional rent immediately upon demand by Landlord.
Operating Covenants. Tenant covenants and agrees that it will continuously and uninterruptedly from and after the Commencement Date: (i) remain open for business to the public no fewer than six (6) days a week and ten (10) hours per day for such hours as are approved by Landlord in Landlord’s reasonable discretion; (ii) remain open and operating for the full term of the Lease, except while the Premises are untenantable by reason of casualty, renovation or force majeure, (iii) maintain within the Premises an adequate stock of merchandise together with sufficient personnel and personal property to service and supply the usual and ordinary requirements of its customers, (iv) keep the Premises in a neat, clean and orderly condition, (v) maintain and operate its business within the Premises in a first-class manner, and (vi) at all times during the Term, operate its business in compliance with all applicable laws, ordinances, codes, rules, regulations and the requirements of all governmental and quasi-governmental authorities having jurisdiction, and obtain and maintain in full force and effect all license, permits and approvals required for the operation of the Permitted Use at the Premises.
Compliance with Laws/Hazardous Materials.
Tenant, at Tenant's expense, shall comply with and cause all of Tenant's agents to comply with all applicable laws, ordinances, rules and regulations of governmental authorities applicable to the Premises or the use or occupancy thereof, including, without limitation, the law commonly known as the Americans With Disabilities Act and California Code of Regulations Title 8, Sections 3281 through 3299 (collectively, “Laws”).
Tenant shall not cause or permit any Hazardous Materials, as defined below, to be brought upon, kept, used, discharged, deposited or leaked in or about the Premises or the Property by Tenant or any of Tenant's agents or by anyone in the Premises (other than Landlord or its agents, employees or contractors), except to the extent such Hazardous Materials are de minimus quantities of cleaning or office supplies customarily kept or used in operation of a restaurant, provided, however all such Hazardous Materials shall be kept and used in accordance with all applicable laws. If Tenant breaches the obligations stated in the preceding sentence, or if the presence of any Hazardous Material on the Premises or the Property caused or suffered or permitted by Tenant or any of Tenant's agents or by anyone in the Premises (other than Landlord or its agents, employees or contractors) results in contamination of the Premises or the Property, or if contamination of the Premises or the Property by any Hazardous Material otherwise occurs for which Tenant is legally liable, then Tenant shall indemnify, defend and hold Landlord and Landlord Parties harmless from any and all claims, damages, costs, liabilities and expenses (including, without limitation, diminution in value or use of the Property, attorneys' fees, consultant fees and expert fees) which arise during or after the Term as a result of such contamination. This indemnification shall include, without limitation, costs incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work on or under the Premises. “Hazardous Material” means any hazardous or toxic substance, material or waste which is or becomes regulated by any local, state or federal governmental authority or by common law decisions, including without limitation (i) all chlorinated solvents, (ii) petroleum products or by-products, (iii) asbestos and (iv) polychlorinated biphenyls. Landlord, at Tenant’s sole cost and expense, shall have the right, but not the obligation, at reasonable times during normal business hours to inspect, investigate, sample and/or monitor the Premises, including any air, soil, water, groundwater or other sampling, and any other testing, digging, drilling or analyses, at any time and Tenant shall provide Landlord with access to all relevant facilities, records and personnel.
Waste; Nuisance; Quiet Enjoyment. Tenant shall not suffer or commit any waste or nuisance on the Premises, nor shall Tenant interfere with or obstruct the rights of or disturb the quiet enjoyment of any other tenant or occupant of the building or injure or annoy them. Tenant shall not use or allow the Premises to be used for any improper, immoral, or objectionable purposes, to be determined in Landlord's reasonable judgment. Landlord covenants and agrees with Tenant that, upon Tenant performing all of the covenants and provisions on Tenant’s part to be observed and performed under this Lease (including payment of rent hereunder), Tenant shall have the right to use and occupy the Premises in accordance with and subject to the terms and conditions of this Lease as against all persons lawfully claiming by, through or under Landlord. This covenant shall be binding upon Landlord and its successors only during its or their respective periods of ownership of the Property, and Landlord shall not be liable for acts of third parties or prior owners.
Repair and Maintenance.
Landlord’s Repair and Maintenance. Landlord shall repair and maintain the roof and the structural foundations in which the Premises are located unless the need for such repair shall be caused by the neglect, misuse, or misconduct of Tenant, its agents, employees or invitees, in which case Landlord shall promptly cause the repairs to be made at Tenant's sole expense. Upon receipt of a written notice that Landlord has made repairs that were caused by the neglect, misuse, or misconduct of Tenant, its agents, employees or invitees, Tenant shall promptly reimburse Landlord within thirty (30) days of invoice for the cost of all such repairs and maintenance. Landlord shall not be required to make any repairs to the roof or structural foundation unless and until Tenant has notified Landlord in writing of the need for such repairs and Landlord shall have had a reasonable period thereafter to commence.
Tenant’s Repair and Maintenance. Tenant shall, at Tenant's sole cost and expense, maintain the Premises except as noted under Section 13(a), above, in good condition and repair. Said maintenance shall include but not be limited to, the interior and exterior of the Premises, exterior doors and windows, all fixtures and equipment, including without limitation, heating and ventilation systems, plate glass, electrical wiring, plumbing fixtures, plumbing drains. Tenant hereby waives California Civil Code Sections 1932(1), 1941 and 1942 and any other applicable existing or future law, ordinance or governmental regulation permitting Tenant to make repairs at Landlord's expense.
Trade Fixtures And Equipment. Tenant at its own expense shall provide and maintain all trade fixtures and equipment reasonably required to enable it to conduct its business in the Premises in a business-like manner. Tenant shall keep all trade fixtures and equipment clean and in good repair. Kitchens or other food preparation facilities shall be steam cleaned annually. Landlord may inspect the Premises annually to ensure good maintenance practices and review the current condition of the Premises pursuant to Section 16. Restaurants and odor producing Tenants are required to provide an exhaust pollution control system (e.g. Scrubber system). Tenant shall include the pollution control unit with their design drawings. As a part of the Landlord Work, Landlord shall install a grease trap serving the Premises. Tenant shall, at Tenant’s sole cost and expense, contract for, in its own name, for a qualified service contractor to inspect, clean and repair such grease trap at such intervals as may be required by Tenant's use, but in no event less frequently than once a month. Tenant shall obtain, maintain and comply with all permits required in connection with the operation of the grease trap and Tenant shall be solely responsible for all fines, penalties and costs arising from any violation thereof. Tenant shall promptly furnish copies of all inspection and service reports, permits and any notices of violation, citation or non-compliance to Landlord. Such fixtures and equipment shall remain the property of Tenant, and Tenant may remove or if required to do so by Landlord, shall remove the same or any part thereof upon the termination of this Lease. Prior to lease expiration or earlier termination, Tenant shall repair at its own expense any damage to the Premises caused by its removal of said fixtures or equipment. All trade fixtures and equipment installed by Tenant pursuant thereto shall not be subject to, and shall be free of any lien for payment of rent by Tenant or for the performance of any other obligation of Tenant. Tenant shall keep Tenant's fixtures and equipment insured for full replacement value.
Utilities. Tenant shall pay, during the term hereof, all electric, water, gas, telephone, sewer, internet, cable, data, trash removal, recycling, and all other public utility charges in connection with its occupancy and use of the Premises, including all costs of operating and maintaining all equipment therein, and all business taxes and all taxes upon the property and fixtures of the Tenant. Landlord shall not be responsible for any interruptions or disturbance of service regardless of whether Tenant is paying directly for such services or if such services are being contracted for by Landlord, nor shall there be any abatement of rent resulting from any cessation or interruption of utility service or other service contemplated by this section. Tenant hereby waives the provisions of California Civil Code Section 1932(1) or any other applicable existing or future law, ordinance or governmental regulation permitting the termination of this Lease due to the interruption or failure of any services to be provided under this Lease.
Revenue & Taxation Code Section 107.6 Possessory Interest Tax. Tenant recognizes and understands that this Lease may create a possessory interest subject to property taxes and that, if a possessory interest is created, Tenant shall, in accordance with this Section 13(e) hereof, be responsible for payment of property taxes levied against such possessory interest.
Alterations and Liens. Tenant shall not make or cause to be made any alterations, additions, or improvements to or of the Premises or any part thereof without the prior written consent of Landlord. If any alterations require additional changes to comply with Laws which are triggered by Tenant's alterations, all such resulting requirements to comply with Laws shall be at Tenant's expense and any Landlord consent to such alterations shall be conditioned on Tenant's payment for same. Any alterations, additions, or improvements affixed to the Premises, except furnishings, equipment, and trade fixtures, shall, at Landlord's option, become part of the real property and belong to Landlord on expiration or termination of the term and any extension thereof. If Landlord consents to the making of any alteration, additions, or improvements to the Premises, they shall be made at Tenant's sole cost and expense. Tenant shall keep the Premises free and clear of any liens or encumbrances which may arise from such work. At Landlord's option, Tenant shall, at its sole cost and expense, remove all such additions, alterations, and improvements from the Premises at the end of the term hereof and repair any damage to the Premises occasioned by such removal. If Tenant shall fail to complete such removal and repair such damage within ten (10) days after such termination, Landlord may do so and Tenant shall pay the reasonable cost thereof as additional rent within ten (10) days after Landlord shall render to Tenant a written statement therefor. In the event Tenant makes any alterations to the Premises that trigger or give rise to a requirement that the Premises come into compliance with any governmental laws, ordinances, statutes, order and/or regulations (such as ADA requirements), Tenant shall be fully responsible for complying, at its sole cost and expense with same. Tenant shall file a Notice of Completion after completion of any alteration or improvement and provide Landlord with a copy thereof. Tenant shall provide Landlord with a copy of a set of “as built” drawings of any such work.
Assignment and Subletting. Tenant shall not either voluntarily, or by operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber this Lease or any interest therein, and shall not sublet the said Premises or any part thereof, or any right or privilege appurtenant thereto, or allow any other person (the employees, agents, servants, guests and invitees of Tenant excepted) to occupy or use the said Premises, or any portion thereof, without first obtaining the written consent of Landlord which shall not be unreasonably withheld. If an assignment or subletting involves a use other than that permitted in Section 8 above, Tenant must comply with said Section 8. Consent to one assignment, subletting, occupation or use by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by another person. Consent to any such assignment or subletting shall in no way relieve Tenant of any liability under this Lease. Any such assignment or subletting without such consent shall be void, and shall, at the option of the Landlord, constitute a default under the terms of this Lease. No sublease or assignment shall release Tenant from continuing liability hereunder. In the event that Landlord shall consent to a sublease or assignment hereunder, Tenant shall pay Landlord reasonable attorney fees and costs incurred in connection with the processing of documents necessary to giving of such consent. Any excess consideration above the rental rate provided in this Lease Tenant is entitled to as a result of any assignment or sublease shall be divided and paid 50% to Tenant and 50% to Landlord; provided, however, that if Tenant is in default under this Lease, Landlord shall be entitled to all such excess consideration.
Entry by Landlord. Except for emergencies such as fire, water intrusion and the like which may be at any time, Landlord and its agents shall have the right to enter the Premises at reasonable times to inspect and examine the same and to make such repairs to the Premises as the Landlord shall deem advisable, and to show the Premises to prospective tenants, buyers or lenders.
Indemnification.
Waiver of Claims. To the extent permitted by law, Tenant waives all claims against Landlord for damage to person or property arising for any reason. Tenant assumes all such risks for Tenant and any employees, licensees, invitees, agents, or contractors.
General Indemnity. Tenant shall indemnify, protect, defend (at Tenant's sole cost and with legal counsel acceptable to Landlord) and hold harmless, Landlord and Landlord Parties from and against any and all claims, judgments, causes of action, damages, penalties, costs, liabilities, and expenses, including all court costs and attorney fees, arising at any time during or after the Term, as a result (directly or indirectly) of or in connection with (i) default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease, or (ii) Tenant’s use of the Premises, the conduct of Tenant’s business or any activity, work or things done, permitted or suffered by Tenant or Tenant’s employees, agents, customers, visitors, guests, invitees, licensees, contractors, assignees or subtenants (individually, a “Tenant Party” and collectively “Tenant Parties”) in or about the Premises or the Property, or any portion thereof, except as provided by law or for claims caused solely by Landlord’s gross negligence or willful misconduct. Tenant’s indemnity is not intended to nor shall it relieve any insurance carrier of its obligations under policies required to be carried by Tenant pursuant to the provisions of this Lease to the extent such policies cover the results of negligent acts or omissions of Landlord, its employees, agents, volunteers, contractors, council members, board members and officers or the failure of Landlord to perform any of its obligations under this Lease. The obligations of Tenant under this Section 17(b) shall survive the termination or earlier expiration of this Lease. As used herein, “Landlord Parties” shall include Landlord, and Landlord’s affiliated entities, and each of their respective members, managers, partners, officers, employees, volunteers, board members, lenders, agents, representatives, contractors, consultants, the city manager, the city council and each member thereof, each member of a city commission or committee, and all of their respective successors and assigns.
Exemption of Landlord from Liability. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to the Premises, the Property and Tenant’s property including, but not limited to, Tenant's fixtures, equipment, furniture and alterations, or illness or injury to persons in, upon or about the Premises or the Property, arising from any cause, and Tenant hereby expressly releases Landlord and waives all claims in respect thereof against Landlord, except only such claims as are caused solely by Landlord's gross negligence or willful misconduct. Tenant hereby agrees that Landlord shall not be liable for injury to Tenant's business or any loss of income therefrom or for damage to the property of Tenant, or injury to or illness or death of Tenant or any Tenant Party or any other person in or about the Premises, whether such damage, illness or injury is caused by fire, steam, electricity, gas, water or rain, or from the breakage, leakage or other defects of sprinklers, wires, appliances, ventilation, plumbing, air conditioning or lighting fixtures, or from any other cause, and whether said damage, illness or injury results from conditions arising upon the Premises, upon other portions of the Property or from other sources or places, and regardless of whether the cause of such damage, illness or injury or the means of repairing the same is inaccessible to Tenant, except only damage, illness or injury caused solely by Landlord's gross negligence or willful misconduct.
Insurance. Tenant shall obtain and maintain at all times during the Term of this Lease insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Lease by the Tenant, its agents, representatives, employees, invitees, or subcontractors. Tenant shall obtain and furnish proof of coverage as to each type of insurance required.
Property Insurance. During the Lease Term, Tenant shall, at Tenant's expense, maintain, or cause to be maintained, “All risk” property insurance including boiler and machinery comprehensive form, if applicable, covering damage to or loss of any of Tenant's personal property, fixtures, equipment and alterations, including electronic data processing equipment (collectively, “Tenant's Property”) (and coverage for the full replacement cost thereof including business interruption of Tenant); Casualty Insurance. Tenant shall, at its sole cost and expense, obtain and maintain during the Term of the Lease, insurance against loss or damage to the Premises and Tenant’s Property by fire, lightning, explosion, vandalism, malicious mischief, and other casualties commonly insured against by tenants occupying similar commercial space (“Casualty Insurance”). Such coverage shall be written on a “special form” or “all risk” basis and shall insure for the full replacement value of the property insured (without deduction for depreciation), including any improvements or alterations made by or on behalf of Tenant. Landlord shall be named as a loss payee as its interest may appear. The proceeds of any such casualty insurance shall be used for the repair or replacement of the damaged or destroyed property, subject to the terms of this Lease; Liability Insurance. Commercial General Liability Insurance (Occurrence Form). A policy of commercial general liability insurance (occurrence form) having a combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence, Four Million Dollars ($4,000,000) in aggregate, providing coverage for, among other things, blanket contractual liability, Premises, products/completed operations with an “Additional Insured-Managers or Lessors of Premises Endorsement” and containing the “Amendment of the Pollution Exclusion Endorsement” for damage caused by heat, smoke or fumes from a hostile fire, and personal and advertising injury coverage, with deletion of (a) the exclusion for operations within fifty (50) feet of a railroad track (railroad protective liability), if applicable, and (b) the exclusion for explosion, collapse or underground hazard, if applicable. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, and shall include coverage for liability assumed under this Lease as an “Insured Contract” for the performance of Tenant's indemnity obligations under this Lease; Automobile Liability Insurance. Business automobile liability insurance having a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence and insuring Tenant against liability for claims arising out of ownership, maintenance, or use of any owned, hired or non-owned automobiles; Worker's Compensation. Workers' compensation insurance having limits not less than those required by state statute and federal statute, if applicable, and covering all persons employed by Tenant in the conduct of its operations on the Premises including coverage for all states and, if applicable, voluntary compensation, together with employer's liability insurance coverage in the amount of at least One Million Dollars ($1,000,000); Other Insurance. Any other form or forms of insurance as Landlord or mortgagees of Landlord may reasonably require from time to time in form, in amounts and for insurance risks against which a prudent tenant would protect itself; Business Interruption. Loss of income and extra expense insurance in amounts as will reimburse Tenant for direct or indirect loss of earnings attributable to all peril commonly insured against by prudent Tenants in the business of Tenant or to prevention of access to the Premises as a result of such perils; and Umbrella/Excess Liability Insurance. Umbrella or excess liability insurance may be used to satisfy the limits required in Section 18(a) and (b) above. The umbrella liability or excess liability policy shall be written on an “occurrence” form with a self-insured retention no greater than Ten Thousand Dollars ($10,000). Such policies shall name Landlord as an additional insured and shall be primary to any insurance maintained by Landlord.
Liquor. If Tenant shall sell beer, wine or other alcoholic liquors or beverages in the Premises as permitted by this Lease, then Tenant shall, at its sole expense, keep in force with an insurance company reasonably satisfactory to Landlord, so-called “Dram Shop” insurance in adequate and legally required amounts. In addition to Tenant, the policy shall also name Landlord and other persons identified by Landlord as additional insureds. Tenant shall continually provide Landlord with a certificate or other evidence of such insurance (the first of which shall be provided prior to the commencement of sale of such alcoholic beverages in the Premises), which shall provide that the insurer will give Landlord at least twenty (20) days’ notice prior to any cancellation of, lapse or material change in such insurance. If Tenant shall fail to procure such insurance as herein provided, then after notice to Tenant and Tenant’s continued failure to cure, Landlord may procure such insurance on behalf of Tenant and Tenant shall reimburse Landlord for the cost thereof within ten (10) days after demand therefor. If Landlord shall be unable to procure such insurance, then the sale of alcoholic beverages shall be suspended in the Premises until such date as such insurance is maintained by Tenant as herein provided.
Waiver of Subrogation. The parties release each other, and their respective authorized representatives, from any claims (for damage to any person or to the Premises and/or the building in which the Premises are located, and to the fixtures, personal property, Tenant's improvements, and alterations of either Landlord or Tenant in or on the Premises and/or the building in which the Premises are located) that are caused by or result from risks which are insured against under any insurance policies carried by the parties and in force at the time of any such damage and to the full extent of any proceeds paid under said policies.
Ratings, Certificates. All policies shall be taken out with insurers licensed to do business in California with a current Best Rating of (A, XIII) and in form satisfactory from time to time to Landlord. Certificates of insurance evidencing all such insurance and acceptable to the Landlord shall be filed with Landlord prior to occupancy of the Premises and at least ten (10) days prior to the expiration of the term of each policy thereafter. Such certificates of insurance must specifically show all the special policy conditions required in this Section, including “additional insured,” “waiver of subrogation,” “notice of cancellation,” and “primary insurance” wording applicable to each policy. Alternatively, a certified, true and complete copy of each properly endorsed policy may be submitted. All policies shall contain an undertaking by the insurers to notify Landlord and the mortgagees of Landlord in writing not less than thirty (30) days prior to any material change, reduction in coverage, cancellation, or other termination thereof. Tenant shall furnish Landlord with proof of renewal or binders for new insurance at least thirty (30) days before the expiration date of each policy. With respect to CGL Insurance, Tenant shall name Landlord, its employees, elected officials, board members, officers, agents and volunteers as additional insureds with respect to Tenant's negligence for any claims arising out of Tenant's operations in or upon the Premises. In addition, the CGL Insurance: (i) must be endorsed to be primary and non-contributory, rather than excess, with respect to each party's additional insured status; (ii) endorsed to provide cross-liability coverage if they do not contain a standard ISO separation of insureds provision; (iii) shall not contain any endorsement or provision that states the limits of the policy will not stack, pyramid or be in addition to any other limits provided by that insurer, and (iv) have no cross suits exclusion, or any similar exclusion that excludes coverage for claims brought by an additional insured under the policy against another insured under the policy. All insurance policies required by this Section 18 (i) must be issued by insurance companies having an “A” rating or better by Standard and Poor's, and if not rated by Standard & Poor's, then a rating of “A” by A.M. Best Company, and (ii) may be satisfied by a primary policy or combination of primary and umbrella policies. The insurance provisions set forth in this Section 18 set forth the minimum amounts and scopes of coverage to be maintained by Landlord and Tenant and are not to be construed in any way as a limitation on each party's liability under this Lease.
Destruction of Premises.
Destruction Due to Risk Covered by Insurance. If, during the Term of this Lease or any Renewal Term, the Premises or the Property (and other improvements in which the Premises are located) are totally or partially destroyed from a risk covered by insurance carried by either Tenant or Landlord, rendering the Premises totally or partially inaccessible or unusable, the following shall apply:
If the cost to repair the damage is estimated to be ten percent (10%) or less of the replacement value of the Premises or Property (as applicable), Landlord shall repair and restore the Premises and affected portions of the Property to substantially the same condition as existed immediately before the destruction, but expressly excluding Tenant Restoration Obligations (as such term is defined below), provided that such restoration can reasonably be completed within 270 days from the date of destruction.
If the cost to repair the damage is estimated to be more than ten percent (10%) of the replacement value of the Premises or Property, then Landlord may elect, in its sole discretion, either (i) to restore the Premises and the Property to substantially the same condition as they were immediately before the destruction, or (ii) to terminate this Lease by giving written notice to Tenant within fifteen (15) days after determining the scope and cost of restoration.
If existing laws or governmental regulations prohibit restoration, then either party may terminate this Lease immediately upon written notice to the other.
In the event Landlord elects to restore the Premises but the estimated time for restoration exceeds the lesser of 270 days or the remaining Term of the Lease (including any exercised Renewal Term), Landlord may also elect to terminate this Lease by written notice to Tenant delivered within fifteen (15) days after such determination.
Notwithstanding anything to the contrary in this Section, destruction or damage as described above shall not automatically terminate this Lease, except as expressly provided herein.
Destruction Due to Risk Not Covered by Insurance. If, during the term of this Lease and any renewal term, the Premises or the Property and other improvements in which the Premises are located are totally or partially destroyed by a risk not covered by the insurance, rendering the Premises totally or partially inaccessible or unusable, Landlord can elect to terminate this Lease by giving notice to Tenant within fifteen (15) days after determining the restoration cost and replacement value.
Tenant’s Obligations. In the event this Lease is not terminated pursuant to the terms of this Section 19, following any restoration work by Landlord, Tenant shall (at Tenant’s sole cost and expense and subject to the terms of Section 14) promptly restore any alterations, improvements, trade fixtures, equipment and personal property to substantially the same condition as existed prior to such casualty event (collectively, “Tenant Restoration Obligations”). Tenant shall use commercially reasonable efforts to reopen for business following completion of the any restoration work by Landlord under this Section 19.
Abatement or Reduction of Rent. In case of destruction, there shall be an abatement or reduction of rent between the date of destruction and the date of substantial completion of Landlord’s restoration obligations under this Section 19. For the avoidance of doubt, rent abatement shall cease upon substantial completion of Landlord’s restoration obligations under this Section 19, and no abatement shall apply during any period in which Tenant is completing Tenant Restoration Obligations.
Waiver of Civil Code Sections. Tenant waives the provisions of California Civil Code Section 1932(2) and California Civil Code Section 1933(4) with respect to any destruction of the Premises.
Default and Landlord's Remedies.
Default. The occurrence of any of the following shall constitute a default by Tenant:
Tenant shall fail to pay when due any rent or any other monetary sum payable under this Lease.
Tenant shall fail to observe, keep or perform any of the other terms, covenants, agreements or conditions contained in this Lease if such default continues for a period of ten (10) days after written notice by Landlord specifying the nature of the default with reasonable particularity, unless the nature of the default is such that more than ten (10) days is required to cure it and Tenant commences to cure it within such ten (10) day period and thereafter diligently pursues it to completion.
Tenant shall become bankrupt or insolvent or make a transfer in fraud of creditors, or make an assignment for the benefit of creditors, or take or have taken against Tenant any proceedings of any kind under any provision of the Federal Bankruptcy Act or under any other insolvency, bankruptcy or reorganization act and, in the event any such proceedings are involuntary, Tenant is not discharged from the same within thirty (30) days thereafter.
A receiver is appointed for a substantial part of the assets of Tenant, and such receivership is not released within thirty (30) days.
The abandonment of the Premises by Tenant, or the vacation (hereby defined to be thirty (30) or more consecutive days of continual absence from the Premises) of the Premises by Tenant.
This Lease or any estate of Tenant hereunder shall be levied upon by any attachment or execution and such levy is not released within thirty (30) days.
Notices given under this Section shall specify the alleged default and the applicable Lease provisions, and shall demand that Tenant perform the provisions of this Lease or pay the rent that is in arrears, as the case may be, within the applicable period of time, or quit the Premises.
Landlord's Remedies. If any default by Tenant shall occur, and following notice of default as required by this Lease (for the period applicable to the default under the applicable provision of this Lease), Landlord shall have the following remedies in addition to all other rights and remedies provided by law or equity, to which Landlord may resort cumulatively or in the alternative.
Landlord shall have the immediate option to terminate this Lease and all rights of Tenant hereunder by giving written notice of such intention to terminate. In the event that Landlord shall so elect to terminate this Lease, then Landlord may recover from Tenant:
The worth at the time of award of any unpaid rent which had been earned at the time of such termination; plus The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss Tenant proves could have been reasonably avoided; plus The worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; plus 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 things would be likely to result therefrom; and At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law.
As used in Subsections (a) and (b) above of this Section, the “worth at the time of award” is computed by allowing interest at the maximum rate an individual is permitted by law to charge. As used in subsection (c) 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%).
In the event of the vacation or abandonment of the Premises by Tenant, or in the event that Landlord shall elect to reenter as provided herein or shall take possession of the Premises pursuant to legal proceeding or pursuant to any notice provided by law, then Landlord shall have the remedy specified by Civil Code Section 1951.4, in which Landlord may from time to time recover all rental as it becomes due or relet the Premises or any part thereof for the account of Tenant on 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 make alterations and repairs to the Premises. In the event that Landlord shall elect so to relet, then rentals received by Landlord from such reletting shall be applied first, to the payment of any indebtedness, other than rent due hereunder, owed by Tenant to Landlord; second, to the payment of any cost (including commissions) of such reletting; third, to the payment of the cost of any alterations and repairs to the Premises; fourth, to the payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. Should that portion of such rentals received from such reletting during any month, which is applied to the payment of rent hereunder, be less than the rent payable during that month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord upon demand. Tenant shall also pay to Landlord, as soon as ascertained, any and all costs and expenses incurred by Landlord in such reletting or in making such alterations and repairs not covered by the rentals received from such reletting.
No reentry or taking possession of the Premises by Landlord pursuant to this Section shall be construed as an election to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction.
Signs. All signs and graphics of every kind visible in or from public view or corridors, or the exterior of the Premises, whether inside or outside the Premises, shall be subject to Landlord’s prior written approval and shall be subject to compliance with any applicable Laws, including local sign ordinances.
Estoppel Certificate. Tenant shall execute and deliver to Landlord within ten (10) days of request a commercially reasonable estoppel statement. Landlord and Tenant intend that any estoppel statement delivered pursuant to this Section may be relied upon by any mortgagee, beneficiary, purchaser or prospective purchaser of the building or any interest therein and failure to execute and return such estoppel shall be a material breach of the Lease.
Eminent Domain. In case the whole of the Premises, or such part thereof that substantially interferes with the reasonable use of the Premises as a restaurant, shall be taken for any public or quasi-public purpose by any lawful power or authority by exercise of the right of appropriation, condemnation or eminent domain, or sold to prevent such taking, either party shall have the right to terminate this Lease effective as of the date possession is required to be surrendered to said authority. Tenant shall not assert any claim against Landlord or the taking authority for any compensation because of such taking and Landlord shall be entitled to receive the entire amount of any award without deduction for any estate or interest of Tenant. In the event the amount of property or the type of estate taken shall not substantially interfere with the reasonable use of the Premises as a restaurant, Landlord shall be entitled to the entire amount of the award without deduction for any estate or interest of Tenant. If there is no substantial interference or if there is substantial interference, but neither party elects to terminate, Landlord shall promptly proceed to restore the Premises to substantially the same condition as the Premises existed prior to such partial taking, to the extent possible by application of the condemnation proceeds only, and a proportionate allowance shall be made to Tenant for the rent corresponding to the time during which, and to the part of the Premises of which Tenant shall be so deprived on account of such taking and restoration. Nothing contained in this Section shall be deemed to give Landlord any interest in any award made to Tenant for the taking of personal property and fixtures belonging to Tenant. Each party waives the provisions of California Code of Civil Procedure Section 1265.130 allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the premises.
Options to Renew.
Landlord hereby grants to Tenant two (2) options to renew this Lease as set forth in Section 3(b). Such options, with respect to the renewal term, shall only be exercised by Tenant by written notice to Landlord, by United States mail, postage prepaid, certified or registered, return receipt requested, notice of the exercise of each such option, not later than twelve (12) and not more than fifteen (15) full calendar months prior to the expiration of the then current term. No exercise of any option herein granted shall be effective if any default under or breach of this Lease (a) exists either at the time of exercise or on the expiration of the term during which it was exercised, or (b) occurs after the exercise and before the commencement of the renewal term.
In the event any such option is effectively exercised with respect to the renewal term, all terms and conditions of this Lease shall be applicable to such renewal term except the Base Rent during the renewal term shall be as set forth in Section 4(a)(3).
Inducements. Tenant acknowledges that Landlord has granted certain inducements to Tenant in consideration for Tenant’s commitment to perform for the entire Term of this Lease, which may include free or abated rent and certain allowances (the “Tenant Inducements”). Tenant Inducements expressly includes the abated rent described in Section 4 above. If Tenant defaults hereunder, in addition to all other remedies to which Landlord may be entitled under law or in equity, all Tenant Inducements shall be immediately due and payable to Landlord as additional rent.
Holding Over. This Lease shall terminate without further notice upon the expiration of the Term, and any holding over by Tenant after the expiration shall not constitute a renewal or extension of this Lease, or give Tenant any rights under this Lease, except when in writing signed by both parties. If Tenant holds over for any period after the expiration (or earlier termination) of the Term without the prior written consent of Landlord, such possession shall constitute a tenancy at sufferance only; such holding over with the prior written consent of Landlord shall constitute a month-to-month tenancy commencing on the first (1st) day following the termination of this Lease. In either of such events, possession shall be subject to all of the terms of this Lease, except that the monthly Base Rent shall be equal to one hundred fifty percent (150%) of the Base Rent for the month immediately preceding the date of termination. If Tenant fails to surrender the Premises upon the expiration of this Lease despite demand to do so by Landlord, Tenant shall indemnify and hold Landlord harmless from all loss or liability, including without limitation, any claims made by any succeeding tenant relating to such failure to surrender. Acceptance by Landlord of rent after the termination shall not constitute consent to a holdover or result in a renewal of this Lease. The foregoing provisions of this Section are in addition to and do not affect Landlord’s right of re-entry or any other rights of Landlord under this Lease or at law.
Attorneys' Fees. If either party commences an action against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to have and recover from the losing party reasonable attorney's fees and costs of suit.
Notices. Any notice required or permitted to be given hereunder may be given by personal delivery or by United States certified mail, postage prepaid, addressed to Tenant at the Premises and to Landlord at 16860 Valencia Ave, Fontana, California 92335, or at such other address as the Landlord shall designate in writing.
Waiver; Accord and Satisfaction. No delay or omission in the exercise of any right or remedy of Landlord on any default by Tenant shall impair such right or be construed as a waiver. The receipt and acceptance by Landlord of delinquent rent shall not constitute a waiver of any other default; it shall constitute only a waiver of timely payment for the particular rent payment involved. No payment by Tenant or receipt by Landlord of a lesser amount than the rent payment herein stipulated shall be deemed to be other than on account of the rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease.
Force Majeure. If either party hereto shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, inability to procure material, failure of power, restrictive governmental laws or regulations, riots, insurrection, war, environmental remediation work whether ordered by any governmental body or voluntarily initiated or other reason of a like nature not the fault of the party delayed in performing work or doing acts required under this Lease, the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. Notwithstanding the foregoing, the provisions of this Section 30 shall at no time operate to excuse Tenant from any obligations for payment of Base Rent, additional rent or any other payments required by the terms of this Lease when the same are due, and all such amounts shall be paid when due.
Time is of the Essence. Time is of the essence of this Lease as to the performance of all terms, covenants, and conditions stated herein.
Broker. Tenant represents that it has not had any dealings with any real estate broker, finder or intermediary with respect to this Lease. Tenant shall indemnify, protect, defend (by counsel reasonably approved in writing by Landlord) and hold Landlord harmless from and against any and all claims, judgments, suits, causes of action, damages, losses, liabilities and expenses (including attorneys’ fees and court costs) resulting from any breach by Tenant of the foregoing representation, including, without limitation, any claims that may be asserted against Landlord by any broker, agent or finder undisclosed by Tenant herein.
Subordination. Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising upon the Premises and to renewals, modifications, refinancings and extensions thereof (collectively referred to as a “Mortgage”). This clause shall be self-operative, but no later than five (5) business days after written request from Landlord or any holder of a Mortgage (a “Mortgagee(s)”), Tenant shall execute a commercially reasonable subordination agreement or SNDA. As an alternative, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease. No later than five (5) business days after written request by Landlord or any Mortgagee, Tenant shall, without charge, attorn to any successor to Landlord’s interest in this Lease. Tenant hereby waives its rights under any current or future Law which gives or purports to give Tenant any right to terminate or otherwise adversely affect this Lease and the obligations of Tenant hereunder in the event of any such foreclosure proceeding or sale. Should Tenant fail to sign and return any such documents within said five (5) business day period, Tenant shall be in default hereunder.
Right to Lease. Landlord reserves the absolute right to effect such other tenancies in the Project as Landlord in the exercise of its sole and absolute discretion shall determine. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or type or number of tenants shall, during the Term, occupy any space in the Project.
Submission of Lease. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or an option for lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant. Tenant expressly acknowledges and agrees that this Lease is contingent upon Landlord’s compliance with the California Surplus Land Act (Gov. Code, § 54220), and may not be executed by Landlord unless Landlord completes the compliance process thereunder. Landlord shall commence the Surplus Land Act process within fifteen (15) days after receiving a Tenant’s executed original of this Lease. Landlord may not execute this Lease until the Surplus Land Act process is complete. Tenant understands that the foregoing may result in conveyance of the premises to another party. In the event that the Surplus Land Act process results in disposal of the Premises to another party or for any reason Landlord elects not to execute this Lease, the Lease shall be of no force or effect without liability to Landlord.
OFAC Provisions. Tenant represents and warrants to Landlord that, as of the date hereof and at all times during the Lease Term, neither Tenant nor any individual, entity, or organization holding a significant ownership or controlling interest in Tenant, including any executive officer or director, is an individual, entity, or organization with whom any United States law, regulation, or executive order prohibits U.S. companies and individuals from dealing, including, without limitation, names appearing on the U.S. Department of Treasury’s Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List. In the event the foregoing representation is or later becomes untrue, it shall constitute a non-curable default by Tenant under this Lease and entitle landlord to immediately pursue its remedies under Section 20 above.
SB 1103. The parties acknowledge and agree that this Lease has been negotiated exclusively in English. The parties further acknowledge and agree that, at any time on or prior to the execution of the Lease, Tenant has not provided Landlord with any notice that Tenant is a “qualified commercial tenant” as defined in Section 827, 1632, 1946.1 or 1950.9 of the California Civil Code, as may be amended from time to time (a “QCT Notice”). If Tenant subsequently provides a QCT Notice to Landlord, then, notwithstanding anything to the contrary set forth in this Lease (including any Exhibit attached hereto), any renewal or extension option granted to Tenant that has not been exercised by Tenant before providing the QCT Notice to Landlord shall automatically terminate and be of no further force or effect. Without limiting the foregoing, in the event Tenant is or becomes a qualified commercial tenant, Landlord hereby notifies Tenant that it may inspect any supporting documentation of building operating costs upon written request pursuant to Section 1950.9(a)(4) of the California Civil Code, and Tenant hereby acknowledges receipt of such notice before the execution of the Lease.
Default by Landlord. Landlord shall not be in default under this Lease unless Landlord fails to perform obligations required of Landlord within thirty (30) days after written notice by Tenant to Landlord, specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are required for performance, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. If Tenant has been notified of the holder of any mortgage or deed of trust or the lessor of any ground lease or underlying lease affecting the Premises, such holder or lessor shall be given a reasonable opportunity to cure any default by Landlord prior to Tenant’s exercising any remedy available to Tenant. In no event shall Tenant have the right to terminate this Lease as a result of Landlord’s default, and Tenant’s remedies shall be limited to damages and/or an injunction. Further, Landlord shall in no event be liable to Tenant or any other person for any consequential damages, special or punitive damages, or for loss of business, revenue, income or profits and Tenant hereby waives any and all claims for any such damages. 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 and any recourse by Tenant against Landlord shall be limited solely and exclusively to an amount which is equal to the interest of Landlord in the Premises, and neither Landlord, nor any Landlord Parties 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.
Option to Purchase.
Provided that Tenant is not then and has not been in default under any of the terms or conditions of this Lease, and provided that original Tenant is then leasing and occupying the Premises, then Tenant shall have the one-time option (the “Purchase Option”) to purchase the entirety of the Premises in accordance with the terms and conditions of this Section 39. The purchase price for the Premises if acquired pursuant to the Purchase Option (the “Purchase Price”) shall be the fair market value of the Premises as of the date of the Purchase Option Exercise Notice, determined by an independent third-party real estate appraiser selected by Landlord in its sole discretion. Landlord shall cause the appraisal to be completed following the Purchase Option Exercise Notice. The appraised value shall be final and binding on the parties.
In order to exercise the Purchase Option, Tenant must deliver written notice to Landlord of Tenant’s intent to purchase the Premises (“Purchase Option Exercise Notice”) on or after the first day of the sixth (6th) Lease Year, and not later than the last day of the tenth (10th) Lease Year (“Purchase Option Deadline”), time being of the essence. If Tenant fails to timely deliver a Purchase Option Exercise Notice prior to the Purchase Option Deadline, then the Purchase Option shall be null and void and of no further force or effect (unless Landlord elects, in its sole discretion, to accept such Purchase Option Exercise Notice). The Purchase Option shall not be exercisable during any Renewal Term.
In the event Tenant timely delivers to Landlord a Purchase Option Exercise Notice, then Landlord and Tenant shall promptly negotiate in good faith and execute a purchase and sale agreement (the “Purchase Agreement”) on terms determined by Landlord in its reasonable discretion, which Purchase Agreement shall include, without limitation: (i) conveyance of the Premises to Tenant, subject to all matters of record, (ii) Tenant’s acceptance of the Premises in its then “AS-IS, WITH ALL FAULTS” condition, with no representations or warranties of any kind by Landlord, (iii) Tenant’s payment of all closing costs, including, without limitation, all title insurance premiums, escrow fees, recording fees, documentary transfer taxes, county and city transfer taxes, survey costs and any other fees, taxes or costs associated with the conveyance, and (iv) an express condition that the consummation of the sale shall be subject to the approvals described in Section 39(e) below.
Neither Tenant’s rent payments nor any other payments made by Tenant to Landlord pursuant to this Lease shall be applied against the Purchase Price, and Tenant shall be required to pay Base Rent and all other amounts due and payable under this Lease through and pro-rated as of the closing date (i.e., the date upon which the sale of the Premises to Tenant is consummated).
Notwithstanding anything to the contrary in this Section 39, Tenant acknowledges that Landlord is a governmental organization and that the consummation of the sale of the Premises pursuant to the Purchase Option is subject to all state and local laws, as the same may be amended from time to time, and the approval of state and local authorities, including, without limitation, the approval of the Fontana City Council. If the Fontana City Council or any other state and local authorities do not approve the sale or approves the sale on conditions that Landlord, in its sole discretion, does not accept, Landlord may terminate the Purchase Option upon written notice to Tenant, and neither party shall have any further liability under this Section 39, provided that this Lease shall remain in full force and effect in accordance with its terms.
The rights contained in this Section 39 shall be personal to original Tenant and may only be exercised by original Tenant.
Right of First Offer. At any time during the Term, Landlord may elect to sell the Premises to a third party; provided, however, that if Landlord elects to sell the Premises at any time on or after the first day of the sixth (6th) Lease Year and on or before the last day of the Original Term, and Tenant has not previously delivered a Purchase Option Exercise Notice, Landlord shall, prior to offering the Premises for sale to any third party, first deliver written notice to Tenant (the “ROFO Notice”) setting forth the purchase price at which Landlord is willing to sell the Premises and the other material terms and conditions of the proposed sale. Tenant shall have thirty (30) days after receipt of the ROFO Notice (the “ROFO Response Period”) to deliver written notice to Landlord accepting the purchase price and terms set forth in the ROFO Notice. If Tenant timely delivers such acceptance notice, Landlord and Tenant shall proceed to negotiate and execute a Purchase Agreement in accordance with Section 39(c), except that the purchase price shall be the price set forth in the ROFO Notice in lieu of the Purchase Price determined pursuant to Section 39(a). If Tenant fails to deliver an acceptance notice within the ROFO Response Period, or if Tenant delivers written notice declining to purchase the Premises, then Landlord shall be free to offer and sell the Premises to any third party without any further obligation to deliver a ROFO Notice or otherwise comply with this Section 40, the right of first offer granted hereby shall permanently terminate, and the Purchase Option shall terminate and be of no further force or effect. For the avoidance of doubt, (A) at any time prior to the first day of the sixth (6th) Lease Year and at any time after the last day of the Original Term (including during any Renewal Term), Landlord may sell the Premises to any third party without delivering a ROFO Notice or otherwise complying with this Section 40, and (B) any sale by Landlord to a third party shall remain subject to the governmental approvals described in Section 39(e).
Successors and Assigns. Except as otherwise provided herein, all of the terms and conditions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. In the event of any transfer, assignment or other conveyance or transfers of any such title or tenancy, Landlord herein named (and in case of any subsequent transfers or conveyances, the then grantor) shall be automatically freed and relieved from and after the date of such transfer. Landlord may transfer its interest in the Premises without the consent of Tenant and such transfer or subsequent transfer shall not be deemed a violation on Landlord's part of any of the terms and conditions of this Lease.
Titles and Definitions. The titles of sections herein are for identification only. They shall not be considered to be a part of this Lease and shall have no effect upon the construction or interpretation thereof. The words “Landlord” and “Tenant” as used in this Lease shall include both singular, plural, masculine, feminine, and neuter as the context shall require.
Entire Agreement/Amendment. This Lease contains the entire agreement of the parties and supersedes all prior negotiations, drafts, and other understandings which the parties may have concerning the subject matter hereof. This Lease may not be modified except by written instrument duly executed by the parties hereto or their successors in interest.
Choice of Laws; Interpretation. This Lease shall be governed by and construed pursuant to the laws of the State of California. The provisions of this Lease shall be construed in accordance with the fair meaning of the language used and shall not be strictly construed against either party.
Authority/Consents & Approvals. Each of the persons executing this Lease on behalf of Tenant warrants and represents that Tenant is a duly organized and validly existing entity, that Tenant has full right and authority to enter into this Lease and that the persons signing on behalf of Tenant are authorized to do so and have the power to bind Tenant to this Lease. Tenant shall provide Landlord upon request with evidence reasonably satisfactory to Landlord confirming the foregoing representations.
No Merger. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Landlord, operate as an assignment to it of any or all subleases or subtenancies.
Recordation. Tenant shall not record this Lease or a short form memorandum hereof without Landlord’s prior written approval.
No Third Party Benefit. This Lease is a contract between Landlord and Tenant and nothing herein is intended to create any third party benefit.
Severability. If, for any reason whatsoever, any of the provisions hereof shall be unenforceable or ineffective, all of the other provisions shall be and remain in full force and effect. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the day and year set forth below.
LANDLORD
CITY OF FONTANA, a California municipal corporation
TENANT
la tapatia arrow inc, a California corporation
By:
Name:
Its:
Dated:
By:
Name:
Its:
Dated:
EXHIBIT A
MAP OF PREMISES
[Attached]
First Floor
Second Floor
EXHIBIT B
REQUIREMENTS
[Attached]
EXHIBIT C
FIXED RATE CONVERSION SCHEDULE
The following schedule sets forth the per-square-foot monthly rental rate applicable to each Lease Year if Tenant elects the Fixed Rate Conversion pursuant to Section 4(a)(2) of this Lease. The monthly Base Rent shall be calculated by multiplying the applicable per-square-foot rate below by the rentable square footage of the Premises (10,158 rentable square feet).
Lease Year
Rate Per RSF/Month
Monthly Base Rent
2 $2.00
$20,316.00
3 $2.08
$21,128.64
4 $2.16
$21,941.28
5 $2.25
$22,855.50
6 $2.34
$23,769.72
7 $2.43
$24,683.94
8 $2.53
$25,699.74
9 $2.63
$26,715.54
10 $2.74
$27,832.92
EXHIBIT D
PRELIMINARY CONSTRUCTION PLANS
[Attached]
16 3185/035458-0022
27059155.2 a10/01/26
-1-
3185/035458-0022
27059155.2 a10/01/26