1992-0407_HOLSTEN, TIM_Commercial LeaseAq&od/ay
COMMERCIAL LEASE
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the
premises hereinafter described on the terms and conditions set forth in this
Lease Agreement, hereinafter called "this Lease."
Basic Lease Provisions
The words and figures set forth in Paragraphs A to N, both inclusive, are part
of this Lease wherever reference is made thereto, unless they are expressly
modified elsewhere in this Lease.
A. Date of Execution:
As of April 7 1992
B. Landlord: San Juan Capistrano
Community Redevelopment Agency
C. Tenant:
Tim Holsten, a married
man
D. Tenant's Trade Name:
Vaquero West Mercantile
Company
E. Premises: The property
particularly described and
depicted on the Plot Plan marked
Exhibit A, located at:
26755 Verdugo Street
San Juan Capistrano, California
F. Premises: The area shown on
Exhibit A containing the follow-
ing approximate measurements:
Frontage; 62,20 feet
Depth: 62.75 feet
Floor Area: 4,000 square feet
G. Purpose (Use): The Premises
shall be used for the operation
of an Old West Outfitting,
Haberdashery and General
Mercantile store selling items
at retail. Merchandise which
may be sold, activities which
may be conducted and services
which may be performed in the
Premises generally include the
following: (i) general men's
and women's Western wear,
including shirts, blouses,
skirts, pants, boots, hats,
belts, Western wear clothing,
accessories and jewelry; (ii)
horseriding gear and
accessories; (iii) saddles,
tack and other leather goods;
(iv) Western arts and crafts;
(v) Western -oriented books;
(vi) Indian jewelry; (vii)
Western antiques, and (viii)
other merchandise in good taste
and quality, which relate to
Western culture and history,
provided if Landlord determines
in its reasonable business
judgment that such other
merchandise is inconsistent
with the items provided in (i)
through (vii), inclusive, then
Tenant shall discontinue the
sale of such item(s) within
fifteen (15) days after service
of Landlord's written notice
requiring that such item(s) be
removed from sale.
The second floor of the
Premises shall be used for
professional office space for
attorneys, accountants,
architects, insurance offices
and other similar uses,
provided that such office space
shall not be used for any
medical, dental or veterinary
use. The Premises shall be used
for the foregoing purposes and
for no other use or purpose.
(See Paragraph 14 of Lease.)
H. Term: 10 years, with one
10 -year option
I. Minimum Rent: $4,275.00 per
month
J. Security Deposit: None.
K. Landlord's Address for
Notices:
32400 Paseo Adelanto
San Juan Capistrano,
California 92675
L. Tenant's Business Address and
Phone Number for Notices:
26755 Verdugo Street
San Juan Capistrano, California
92675
M. Tenant's Resident Address and
Phone Number:
27569 Via Fortuna
San Juan Capistrano, California
92675
N. Tenant's Construction
Requirements are set forth on
Exhibit C.
EXHIBITS: (Check if attached—)
A - Site Plan X
B - Schedule X
C - Construction Obligations X
D - Guarantee of Lease X
LANDLORD: TENANT:
San Juan Capistrano Community Tim Holsten
Redevelopment Agency
LEASE AGREEMENT
1. PREMISES.
1.1 Location: Tenant's Premises shall be located as shown on
Exhibit A. The Premises shall include the planters adjacent to the Premises
and the outdoor patio located at the rear of the Premises.
1.2 Lease: References to "this Lease" include all exhibits and
matters incorporated by reference as part of this Lease, and the Basic Lease
Provisions appearing on the Face Page.
1.3 Master Lease: References to "the Master Lease" shall mean that
certain Ground Lease dated March 8, 1971 between National Producers Life
Insurance Company, as Lessor, and Provincial Properties, Inc., as Lessee.
1.4 "As -Is": The Premises is leased to Tenant on an "as -is" basis,
except that Landlord agrees at the time of delivery of possession of the
Premises to Tenant the Premises shall be in the following condition:
(a) The sewer lateral running from the Premises through the
branch line to the main sewer shall be clear and free of obstructions.
(b) Tenant hereby acknowledges that Landlord has advised it that
friable asbestos or asbestos -containing material (collectively, "ACM") is or
may be present in the Premises. Landlord shall have no obligation to remove
any ACM from the Premises.
2. BUSINESS RIGHTS AND RESTRICTIONS.
2.1 Purpose: The premises shall be used solely for the purposes set
forth in Paragraph G of the Basic Lease Provisions and Section 14 of the Lease
and for no other purpose whatsoever. Tenant shall operate the business in the
ground floor of the Premises under the trade name "Vaquero West Mercantile" or
such other trade name to which Landlord may consent, such consent not to be
unreasonably withheld. The subtenants in the office space on the second floor
of the Premises shall have the right to operate their businesses under their
own trade names, provided that Landlord has first consented thereto, such
consent not to be unreasonably withheld. Tenant (and the office subtenants)
shall have the right to place signage on the exterior and interior of the
Premises, provided that all such signage complies with the applicable
provisions of the San Juan Capistrano Municipal Code.
Landlord hereby agrees that it will not lease or license space to any
other tenant or occupant on property owned by Landlord within the one-half
(1/2) mile area measured from the front door of the Premises to any store
operating a business similar in nature and total concept to that of Tenant
(i.e., an Old West Outfitting, Haberdashery and General Mercantile Store
selling items at retail) ("Competing Use"). The foregoing shall not prohibit
Landlord from leasing or licensing space to a tenant operating a Competing Use
if (i) such tenant is a charity, museum or a non-profit organization or
(ii) such tenant leases or licenses such space and operates the Competing Use
as of the Date of Execution set forth in Paragraph A of the Basic Lease
Provisions. In addition to the foregoing, Landlord shall not be prohibited
from leasing or licensing space to a tenant operating a business comprised of
a portion of the Competing Use, so long as such tenant does not operate the
Competing Use in its entirety.
2.2 Restrictions: Tenant shall not, without Landlord's prior written
consent, (a) conduct any auction or bankruptcy sale, (b) conduct any fire sale
except as a result of a fire on the premises, (c) conduct a general close-out
sale, provided Tenant may periodically close out lines of merchandise from
time to time (provided that the same is not designated as a "fire sale,"
"bankruptcy sale," "going out of business sale" or similar appellation,
(d) sell any so-called "surplus," "Army and Navy," or "secondhand" goods, as
those terms are generally used at this time and from time to time hereafter,
on or from the premises (except that the same shall not prevent the sale of
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COMMERCIAL LEASE
Page
Title Number
ABANDONMENT ...........................................
20
ADDITIONAL PROVISIONS .................................
25
ASSIGNMENT AND SUBLETTING .............................
12
ATTORNEYS' FEES .......................................
19
BANKRUPTCY OR INSOLVENCY ..............................
18
BASIC LEASE PROVISIONS ................................
BUSINESS RIGHTS AND RESTRICTIONS ......................
1
COMMON AREA ...........................................
4
DAMAGE AND RESTORATION ................................
8
DEFAULT...............................................
15
DELAYING CAUSES .......................................
12
EFFECT OF CONVEYANCE ..................................
20
EMINENT DOMAIN ........................................
9
ENTRY BY LANDLORD .....................................
11
INTENTIONALLY OMITTED ..................................
9
GENERAL PROVISIONS ....................................
24
INDEMNITY: WAIVER .....................................
10
INSURANCE.............................................
6
INTERPRETATION ........................................
21
LANDLORD'S DEFAULT; NOTICE TO LENDER ..................
20
LATE CHARGES AND INTEREST .............................
22
LIENS.................................................
11
NOTICES...............................................
14
OFFSET STATEMENT ......................................
15
OPERATION OF BUSINESS .................................
10
REQUEST FOR ASSIGNMENT/RIGHT OF FIRST REFUSAL ..........
25
OPTION TO EXTEND ......................................
22
PREMISES ..............................................
1
PROHIBITION AGAINST RECORDING LEASE ...................
22
QUIET ENJOYMENT .......................................
14
REAL ESTATE BROKERS; FINDERS ..........................
21
REMEDIES CUMULATIVE ...................................
19
REMOVAL OF TENANT'S PROPERTY ..........................
20
RENT..................................................
3
REPAIRS, MAINTENANCE, ALTERATIONS .....................
6
REPRESENTATIONS .......................................
21
SAFETY AND HEALTH .....................................
22
SEVERABILITY ..........................................
22
SIGNS AND ADVERTISING .................................
11
SUBORDINATION .........................................
14
SUBTENANCIES ..........................................
20
SUCCESSORS ............................................
20
SURRENDER OF POSSESSION ...............................
14
TAXES.................................................
5
TERM..................................................
3
UTILITIES .............................................
5
WAIVER OF DEFAULT .....................................
19
-i-
consignment merchandise by Tenant, which may be used or secondhand), or
(e) violate any restrictive use covenants.
2.3 Covenants and Easements: Tenant's consent shall not be required
for the creation of any covenants, easements or rights of way which are
created by or reasonably required by the action of any governmental
authority. This Lease is subordinate and subject to all of the terms,
conditions, rights and restrictions of the Master Lease.
2.4 Limitations on Use: No activity, occurrence or use shall be
conducted or permitted on any part of the Premises which is obnoxious to, out
of harmony with, or objectionable to the development or operation of the
Premises and/or adjoining properties, including, without limitation, the
following prohibited activities, occurrences and uses: (i) except as
specifically provided below, no merchandise shall be displayed or sold outside
the enclosed building areas on the Premises; nor shall any use other than
parking and landscaping, be made of any outside areas; (ii) no solicitation of
any kind, distribution or handbills or other materials, shall be permitted
outside the enclosed building areas on the Premises; (iii) no loud speakers or
other sound which may be heard or experienced outside the enclosed building
areas on the Premises and no nuisance, incineration, fires on or adjacent to
the Premises, explosion, obnoxious odor or obnoxious noise shall be permitted;
(iv) no auction, fire, bankruptcy, going out of business or similar sale shall
be conducted or advertised; (v) nothing shall be done which shall be injurious
to the Premises or adjoining properties or unlawful or contrary to public
policy or to a law, ordinance, regulation or requirement of any public
authority, or would constitute an extra hazardous use, or would violate,
suspend or void any policy of insurance required to be carried on the Premises
or which would increase the rate of insurance thereon, and if the insurance
cost be increased by such an act, the increased cost of such insurance shall
also be paid by Lessee; (vi) no use shall be made of the sidewalk area on the
Premises other than pedestrian movement; (vii) there shall not be permitted
the use by the public, as such, of the Premises or any part thereof without
restriction or in such manner as might reasonably tend to impair Lessor's
title to the Premises or in such manner as might reasonably make possible a
claim or claims of adverse usage or adverse possession by the public, as such,
or of implied dedication of the Premises of any part thereof; (viii) no action
or omission of Lessee shall permit any lien or encumbrance of any kind
whatsoever to attach to the Premises; and (ix) no act or omission which would
constitute a breach, or event which with passage of time, notice of either or
them, would constitute a breach of any Reciprocal Easement Agreement.
Notwithstanding the foregoing, Tenant shall be permitted to (i) subject to
governmental regulations or laws, place a stationary wagon in the grass area
in front of the Premises and which wagon (subject to governmental regulation
or laws) may bear the trade name "Vaquero West Mercantile" and use said wagon,
at the discretion of Tenant, for the promotion of Tenant's merchandise, and
(ii) use the fenced outdoor patio adjacent to the rear of the patio for
display and sales of merchandise and all other uses permitted under the Lease.
2.5 Compliance with Laws: Tenant shall throughout the lease term, at
Tenant's sole cost and expense, promptly comply with all laws and ordinances
and notices, orders, rules, regulations and requirements of all federal, state
and municipal governments and appropriate departments, commissions, boards and
officers thereof, and notices, orders, rules and regulations of the National
Board of Fire Underwriters, or any other body now or hereafter constituted
exercising similar functions, relating to all or any part of the premises,
exterior as well as interior, foreseen or unforeseen, ordinary as well as
extraordinary, structural as well as non-structural, or to the use or manner
of use of the premises or to the sidewalks, curbs and access ways adjoining
the premises; if Tenant should at any time receive notice of non-compliance
with any of the foregoing it shall promptly give a copy of the same to
Landlord. Without limiting the generality of the foregoing, Tenant shall keep
in force at all times all licenses, consents and permits necessary for the
lawful use of the premises for the purposes herein provided and Tenant shall
pay all income taxes, license fees, and other taxes which are or may be
assessed, levied or imposed upon Tenant in connection with Tenant's operation
of its business upon the premises. The Tenant shall likewise observe and
comply with the requirements of all policies of public liability, fire and
other policies or insurance at any time in force with respect to the premises.
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Notwithstanding the foregoing, in the event structural changes are
required to be made as a result of changes in governmental regulations, such
changes (i) shall be made at Tenant's cost and expense if such changes are
required because of Tenant's retail use of the Premises and are at a cost of
less than Ten Thousand Dollars ($10,000.00), and (ii) in all other
circumstances, shall be made at Landlord's cost and expense, provided, in the
event Landlord is required to make such changes, Landlord shall have the right
to terminate this Lease upon written notice to Tenant in lieu of being
required to make such changes.
2.6 Certificate of Occupancy: In no event shall Tenant open for
business unless and until Tenant shall have obtained a Certificate of
Occupancy from the appropriate governmental authorities. In the event Tenant
or its agents have diligently applied for and pursued all required
governmental permits, licenses and approvals for Tenant's business in the
Premises, and have correctly, completely and timely made all required
submittals in connection therewith, then in the event the sole reason Tenant
has not obtained its Certificate of Occupancy by the specified date on the
schedule set forth as Exhibit B is because of processing delays by the City of
San Juan Capistrano, then such specified date shall be extended on a
day-to-day basis until such time as the Certificate of occupancy is issued.
The parties acknowledge any operation without a Certificate of occupancy shall
and is deemed to be a substantial material breach. Such action shall cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Accordingly, in addition to
all other remedies, Landlord may charge Tenant twice the minimum rent for the
period Tenant is open for business without a Certificate of Occupancy, which
the parties agree is a fair and reasonable estimate of the damage caused
Landlord by such action. Acceptance of such rent shall not constitute a
waiver of Tenant's default.
3. TERM.
3.1 Duration: The term of the Lease shall be for a period of ten (10)
years set forth in paragraph H commencing upon the date Tenant's Certificate
of Occupancy is issued (hereinafter called "Commencement Date").
3.2 Cancellation: If for any reason whatsoever the term of this Lease
has not commenced within one (1) year after the date of execution of this
Lease, this Lease shall be automatically deemed cancelled and shall have no
further force or effect.
4. RENT.
4.1 Amount: During the Lease Term, Tenant shall pay Landlord without
prior demand, deduction, set-off, counterclaim or offset, except as otherwise
specifically set forth in this Lease, the rent provided in this Lease in
accordance with its terms and conditions.
a. Fixed minimum rent will be at the monthly rate provided in
Paragraph 1 of the Basic Provisions, payable on the first day of each month
during the term. Fixed minimum rent shall commence upon the first day
following the expiration of the tenth and one-half (10th 1/2) month after the
Date of Execution of the Lease. The first month's rent shall be paid on the
first day following the expiration of ten and one-half (10 1/2) months after
the Date of Execution of the Lease.
b. After the expiration of tenth and one-half (10th 1/2) month
after the Date of Execution of the Lease, the fixed minimum rent payable by
Tenant for the next twenty-three and one-half (23 1/2) months, shall be
$3,875.00 per month rather than $4,275.00 per month. Commencing on the
expiration of the thirty-fourth (34th) month following the Date of Execution
of the Lease, fixed minimum rent shall be $4,275.00 per month for the
remainder of the term of the Lease.
4.2 First Partial Month: If fixed minimum rent shall commence on a
day other than the first day of a calendar month:
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a. Fixed minimum rent for the first partial month shall be
prorated on the basis which the number of days of the term of this Lease in
such month bears to thirty (30), and as so prorated shall be paid on the first
day of the following month.
4.3 Intentionally Omitted.
4.4 Definition of Rent: The term "rent", whenever used in this Lease,
shall mean fixed minimum rent.
4.5 Accord and Satisfaction: No payment by Tenant or receipt by
Landlord of a lesser amount of monthly rent or any other sum due hereunder,
shall be deemed to be other than a payment of the earliest due rent or
payment, nor shall any endorsement or statement on a check or any letter
accompanying any such check or payment 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 payment or pursue any other
remedy available in this lease, at law or in equity. Landlord may accept any
partial payment from Tenant without invalidation of any contractual notice
required to be given herein (to the extent such contractual notice is
required) and without invalidation of any notice given or required to be given
pursuant to applicable law.
4.6 Catalogue Sales. All of Tenant's (or Tenant's concessionaires')
sales from the Premises, and all of Tenant's sales from catalogues or by mail,
shall be reported by Tenant as originating from San Juan Capistrano,
California and San Juan Capistrano, California shall be deemed the "point of
sale" for the purpose of determining sales tax liability for such sales. If a
dispute arises regarding the point of sale of any item, the determination of
the State Board of Equalization shall be controlling. In no event shall
Tenant be required to pay the same sales tax on an item twice.
5. COMMON AREA.
5.1 Definition: The common area is that area adjacent to the rear of
the premises commonly known as the multi -model parking area and waiting
terminal ("common area"), which is not devoted permanently to the exclusive
use of a particular tenant.
5.2 Construction: Landlord shall have the right to make modifications
and improvements to the common area at its sole and absolute discretion.
5.3 Use. During the lease term Tenant, its subtenants,
concessionaires, licensees, invitees, customers, and employees shall have the
nonexclusive right to use the common area in common with Landlord, other
tenants, and their respective subtenants, concessionaires, licensees,
invitees, customers, and employees, subject to the provisions of this Lease.
5.4 Maintenance (Common Area): Landlord shall pay, and be responsible
for maintaining all improvements on the common area in good and sanitary
order, condition, and repair, including making replacements as Landlord deems
necessary or desirable, including without limitation, (1) managing,
(2) cleaning and removing rubbish and dirt, (3) labor, payroll taxes,
materials, and supplies, (4) all utility services utilized in connection
therewith, including sewer service fees, (5) maintaining, repairing, replacing
paved and unpaved surfaces, curbs, directional and other signs, landscaping,
lighting facilities, drainage, and other similar items, (6) all premiums on
compensation, casualty, public liability, property damage, and other insurance
on the common area, (7) rental cost for or straight-line depreciation on
tools, machinery, and equipment used in connection with the above, (8) all
real property and personal property taxes and assessments levied or assessed
against the common area, and (9) any regulatory fee or surcharge or similar
imposition imposed by governmental requirements based upon or measured by the
number of parking spaces or the areas devoted to parking in the common area,
(10) policing the parking areas (including costs of security guards, if
necessary), (11) replacements, alterations or additions made in compliance
with governmental requirements (the cost of such items to be depreciated or
amortized as part of common area costs instead of direct costs if appropriate
under generally accepted accounting principles), (12) Christmas decorations,
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holiday decorations, promotional and shopping center grand opening costs,
removal of hazardous or toxic materials. Notwithstanding any of the
foregoing, if Tenant causes additional costs by reason of its operation, such
as insurance, security or lighting for abnormal operating hours, Landlord may
in its discretion charge such costs directly to Tenant.
5.5 Intentionally Omitted.
5.6 Operation and Control: Landlord shall have general possession and
control of the entire common area and may from time to time adopt
non-discriminatory rules and regulations pertaining to the use thereof.
Landlord shall, except as otherwise provided herein, operate and maintain the
common area during the lease term. The manner in which the common area shall
be operated and maintained and the expenditures therefor shall be in the
Landlord's sole discretion. Landlord reserves the right to appoint a
substitute operator to carry out any or all of Landlord's rights and duties
with respect to the common area as provided in this Lease; and Landlord may
enter into a contract either by a separate document or in a lease agreement
with such operator on such terms and conditions and for such period as
Landlord shall deem proper.
5.7 Parking: Landlord may designate what part of the common area, if
any, or other area, shall be used for automobile parking by employees of
tenants, occupants, and licensees. No employee of any tenant, occupant, or
licensee shall use any part of the common area for parking except such area or
areas as may be so designated. As part of the Rules and Regulations Landlord
may require Tenants to supply lists of license plate numbers of employees, the
right to tow employee automobiles illegally parked without liability and/or
the right to impose fines or charges on Tenant for illegally parked employee
automobiles.
5.8 Obstructions: No fence, wall, structure, division, rail or
obstruction shall be placed, kept, permitted or maintained upon the common
area or any part thereof by Tenant; nor shall the sale, display, advertising,
promotion, or storage of merchandise or any business activities of any kind
whatsoever be conducted therein without Landlord's prior written consent; nor
shall Tenant permit any person to use the common area for solicitations,
demonstrations, or any other activities that would interfere with the conduct
of business in the shopping center or which might tend to create civil
disorder or commotion.
6. TAXES.
6.1 Personal Property Taxes: Tenant shall pay before delinquency all
license fees, public charges, property taxes and assessments on the furniture,
fixtures, equipment and other property of or being used by Tenant at any time
situated on or installed in the premises.
6.2 Real Property Taxes:
a. The cost of any real property taxes attributable to the
Premises shall be paid for by Landlord.
6.3 Business Taxes: Tenant shall pay all special taxes and
assessments or license fees levied, assessed or imposed by law or ordinance,
by reason of the use of the premises for the specific purposes set forth in
this Lease.
7. UTILITIES.
Commencing with the Date of Execution of the Lease by both parties,
Tenant shall pay before delinquency all charges for gas, electricity, power
and telephone, used on or serving the premises during the lease term.
Landlord shall pay for water and sewer service fees to the Premises. Nothing
contained in this Lease shall limit Landlord in any way from granting or using
easements on, across, over, and under the premises for the purpose of
providing utility services.
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8. REPAIRS. MAINTENANCE. ALTERATIONS.
8.1 Landlord's Repairs: Landlord shall keep in good condition and
repair (i) the major parking lot areas, and (ii) any sidewalks owned by the
City of San Juan Capistrano in the vicinity of the Premises. Notwithstanding
the foregoing, Landlord shall have no obligation to make any repairs to the
parking lot or sidewalks resulting from Tenant's (or Tenant's agents',
employees' or representatives') negligence or willful misconduct.
8.2 Tenant's Repairs: Except as expressly provided in Paragraph 8.1,
Tenant shall make all required repairs, replacements or additions of any kind
whatsoever upon the exterior or interior of the Premises (including plate
glass). Tenant will paint the exterior of the building and maintain in good
condition and repair the exterior and interior of the building comprising the
premises, including the roof. Any equipment, facilities or fixtures shall, at
Tenant's sole expense, be kept, repaired, maintained, and replaced, or added
to, at all times by Tenant to keep same in good order and in sanitary and safe
condition and repair and in accordance with all governmental requirements and
insurance requirements.
8.3 Alterations: Tenant shall not make any alterations, changes or
improvements (collectively called "improvements") in or to the interior or
exterior of the premises without the prior written consent of Landlord. All
improvements shall become part of realty upon installation thereof. Any
interior work which may cause penetration through the roof of the building
must receive Landlord's prior written consent and shall be accomplished at
Tenant's sole risk. Tenant shall be liable for any consequential damages as a
result of these improvements. Any contractor hired by Tenant shall be a
bondable, licensed contractor, possessing good labor relations, and capable of
performing quality workmanship.
8.4 Notice: Before the commencement of any alterations, Tenant, at
its cost, shall furnish to Landlord a Performance and Payment Bond issued by
an insurance company qualified to do business in California, in a sum equal to
the cost of the alterations (as determined by the construction contract
between Tenant and its contractor) guaranteeing the completion of the
alterations to be performed by anyone other than Tenant free and clear of all
liens and other charges, and in accordance with the plans and specifications.
Tenant may perform the following items of work, provided that it complies with
all governmental regulations or laws applicable to same, including, but not
limited to, the following: (i) demolition of existing improvements;
(ii) painting; (iii) finish work; (iv) minor electrical; and (v) carpentry.
Tenant acknowledges that Landlord has the right to post Notice of
Non -Responsibility in or on the Premises, as provided by law.
8.5 Status of Alterations: Any alterations made shall remain on and
be surrendered with the Premises on the expiration or termination of the term,
except that Landlord can elect within thirty (30) days before the expiration
of the term, or within thirty (30) days after termination of the term, to
require Tenant to remove any alterations that Tenant has made to the
Premises. Notwithstanding the foregoing, provided Tenant is not in default at
the expiration or earlier termination of the Term, Tenant shall be permitted
to remove the following fixtures from the Premises: (i) custom cabinetry,
(ii) pot-bellied stove and (iii) light fixtures. Tenant's right to remove
such items shall be subject to Tenant's obligation, at its sole cost and
expense, to repair any damage to the Premises caused by such removal. If
Landlord so elects, Tenant, at its cost, shall restore the Premises to the
condition specified in Paragraph 21.
8.6 As -Built Plans: On completion of any work of alteration, addition
or improvement by Tenant, or any subtenant, Tenant shall supply Landlord with
either (i) "as built" drawings or (ii) a copy of Tenant's final plans showing
all field changes, either option accurately reflecting all such work.
9. INSURANCE.
9.1 Liability Insurance:
a. From and after the date Tenant is given possession of the
Premises, Tenant shall maintain in full force a policy or policies of
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comprehensive liability insurance issued by one or more insurance carriers,
insuring against liability for injury to or death of persons and loss of or
damage to property occurring in or on the premises and any portion of the
common area which is subject to Tenant's exclusive control. Said liability
insurance shall be in an amount of not less than One Million Dollars
($1,000,000.00) combined single limit for bodily and personal injury and
property damage, which amount may be reasonably increased from time to time by
Landlord.
b. Landlord shall during the lease term maintain in full force a
policy or policies of comprehensive liability insurance issued by one or more
insurance carriers, or through its Joint Powers Insurance Authority, insuring
against liability for injury to or death of persons and loss of or damage to
property occurring in or on the common area, except any portion thereon
subject to Tenant's exclusive control. Said liability insurance shall be in
an amount of not less than One Million Dollars ($1,000,000.00) combined single
limit for bodily and personal injury and property damage.
9.2 Worker's Compensation Insurance: Tenant shall at all times
maintain Worker's Compensation insurance in compliance with California law
with limits of not less than One Hundred Thousand Dollars ($100,000.00).
9.3 Fire Insurance:
a. Tenant shall pay for and shall maintain in full force and
effect during the term of this Lease a standard form of extended coverage
endorsement and standard form of lender's loss payable endorsement issued to
the holder or holders of a mortgage or deed of trust secured by the premises,
if any, in an amount equal to the full replacement cost (without deduction for
depreciation) of the premises (including malicious mischief, special extended
coverage, earthquake, and sprinkler leakage coverage, and rental insurance
equal to fixed minimum rent for up to one (1) year.
b. In addition to the foregoing, Tenant shall pay for and shall
maintain in full force and effect during the term of this Lease a standard
form policy or policies of fire, extended coverage and vandalism, with
standard form of extended coverage endorsement covering all stock in trade,
trade fixtures, equipment, and other personal property located in the premises
and used by Tenant in connection with its business.
C. In the event of a casualty, all proceeds of the insurance
provided for in subparagraph a., above, shall be payable solely to Landlord.
9.4 Waiver of Subrogation: Each party ("insured") hereby waives its
entire right of recovery against the other party, the other party's officers,
directors, agents, representatives, employees, successors and assigns with
respect to any loss of damage, including consequential loss or damage, to the
insured's property caused or occasioned by any peril or perils (including
negligent acts) covered by any policy or policies carried by the insured.
9.5 General Requirements:
a. All policies of insurance to be carried hereunder by Tenant
shall be written by companies satisfactory to Landlord and licensed to do
business in California, and holding a Best's Policy Holding Rating of "A" and
a size category of "XIV" or better.
b. Each policy of public liability insurance required to be
carried under Paragraphs 9.1a and b shall be primary and non-contributing with
the insurance carried by the other party, except for automobile liability
insurance carried by the other party, and shall be excess over such automobile
liability insurance.
C. Each policy required under Paragraph 9.1 shall expressly
include, severally and not collectively, as named or additionally -named
insured thereunder, the other party and any person or firm designated by the
other party and having an insurable interest thereunder, hereinafter called
"additional insured," as their respective interests may appear.
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d. Said insurance shall not be subject to cancellation or
reduction in coverage except upon at least thirty (30) days prior written
notice to each additional insured. The policies of insurance or duly executed
certificates evidencing them, together with satisfactory evidence of the
payment of premiums thereon, shall be deposited with each additional insured
at the commencement of the term and not less than thirty (30) days prior to
the expiration of the term of such coverage. If the primary insured fails to
comply with this requirement, any additional insured may obtain such insurance
and keep it in effect, and the primary insured shall pay to the additional
insured the premium cost thereof upon demand with interest from date of
payment by the additional insured to the date of repayment by the primary
insured.
e. If Tenant fails to provide an appropriate certificate of
insurance at least five (5) days after the Date of Execution and five (5) days
prior to each anniversary of the Commencement Date thereof Landlord may
procure such insurance and add the cost thereof to the next monthly rent due
from Tenant with interest.
9.6 Blanket Insurance: Each party shall be entitled to fulfill its
insurance obligations hereunder by maintaining a so-called "blanket" policy or
policies of insurance in such form as to provide by specific endorsement
coverage not less than that which is required hereunder for the particular
property or interest referred to herein.
10. DAMAGE AND RESTORATION.
10.1 Duty to Restore: If the improvements on the premises are
partially or totally damaged by fire or other casualty so as to become
partially or totally untenantable, which damage is insured against under any
policy of fire or extended coverage insurance then covering the damage
improvements, this Lease shall not terminate and said improvements shall be
rebuilt by Landlord with due diligence at Landlord's expense unless Landlord
elects to terminate this Lease as provided in Paragraph 10.2.
10.2 Election to Terminate: If the improvements on the premises are
damaged by an insured casualty to the extent of at least twenty-five percent
(250) of their replacement cost (cost to repair or replace at the time of loss
without deduction for physical depreciation) during the term of this Lease
other than during the last three (3) lease years of said term, or to the
extent of at least ten percent (100) thereof during the last three (3) lease
years of said term or to any extent by an uninsured cause at any time during
the lease term, or by an insured or uninsured cause during any extension or
renewal of the lease term, Landlord shall, within not more than ninety (90)
days after such damage, notify Tenant of Landlord's election to terminate this
Lease or to restore the improvements on the premises and such portion of the
improvements in the balance of the shopping center as in Landlord's sole
discretion is necessary to create an economically feasible commercial unit.
If Landlord elects to repair or restore the damage improvements, then with
respect to the premises, Landlord and Tenant each shall restore them in the
same manner and to the same extent as work was done by each of them in the
original construction and fixturizing of the improvements. If Landlord elects
not to restore as aforesaid, this Lease shall terminate effective as of the
date of such damage upon the giving of notice of election by Landlord as
aforesaid. If Landlord elects to restore or fails to give notice of its
election as aforesaid, then this Lease shall remain in full force and effect.
10.3 Rent After Damage: If this Lease is not terminated as provided in
this Paragraph 10, then during the period of repair and restoration the fixed
minimum rent shall not be reduced or abated for the twelve (12) month -period
after the date of the casualty. In the event the Premises are not restored
within such twelve (12) -month period, then at the expiration of such twelve
(12) -month period, the minimum rent and the common area expense reimbursement
shall be proportionally reduced or abated in proportion to the portion of the
Premises rendered unusable unless Tenant determines, in its reasonable
business judgment, that the restored and/or undamaged portions of the Premises
are inadequate to conduct Tenant's business in the Premises, in which event
all minimum rent and common area expense reimbursement shall be abated until
such time as the restored Premises is delivered to Tenant.
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11. INTENTIONALLY OMITTED.
12. EMINENT DOMAIN.
12.1 Definition: If there is any taking of or damage to all or any
part of the premises or any interest therein because of the exercise of the
power of eminent domain or inverse condemnation, whether by condemnation
proceedings or otherwise, or any transfer of any part thereof or any interest
therein made in avoidance thereof (all of the foregoing being hereinafter
referred to as "taking") before or during the term hereof, the rights and
obligations of the parties with respect to such taking shall be as provided in
this Paragraph 12.
12.2 Total Condemnation: If there is a taking of all of the premises,
this Lease shall terminate as of the date of such taking.
12.3 Partial Condemnation: If twenty-five percent (250) or more of the
floor area of Tenant's premises shall be taken, either party shall be entitled
to terminate this Lease; and the terminating party shall give the other party
written notice of such election not later than thirty (30) days after the date
Landlord delivers notice to Tenant that possession or title to the portion of
the premises taken has vested in the condemnor. If neither party gives such
notice or less that twenty-five percent (250) of the floor area of Tenant's
premises shall be taken, this Lease shall remain in full force and effect and
rent shall be adjusted as provided in Paragraph 12.7.
12.4 Common Area: If twenty-five percent (250) or more of the common
area within a radius of four hundred (400) feet from the main entrance to the
premises shall be taken, either party shall be entitled to elect to cancel and
terminate this Lease and shall give the other party written notice of such
election not later than thirty (30) days after the date Landlord delivers
notice to Tenant that possession or title to said portion of the common area
taken has vested in the condemnor. If neither party gives such notice or more
than seventy-five percent (750) of said portion of the common area will be
available after such taking, this Lease shall remain in full force and
effect. In no event shall Tenant have the right to terminate this Lease if
Landlord provides additional common area which, when combined with the
remaining common area provides a common area which is at least seventy-five
percent (750) as large as said portion of the common area before the taking.
12.5 Termination Date: If this Lease is terminated in accordance with
the provisions of this Paragraph 12, such termination shall become effective
as of the date physical possession of the condemned portion is taken.
12.6 Repair and Restoration: If this Lease is not terminated as
provided in this Paragraph 12, Landlord shall at its sole expense restore with
due diligence the remainder of the improvements occupied by Tenant so far as
practicable to a complete unit of like quality, character, and condition as
that which existed immediately prior to the taking, provided that the scope of
the work shall not exceed the scope of the work to be done by Landlord
originally in constructing the premises, and further provided that Landlord
shall not be obligated to expend an amount greater than that which was awarded
to Landlord for such taking.
12.7 Rent Adjustment: If this Lease is not terminated as provided in
this Paragraph 12, the fixed minimum rent shall be reduced by that proportion
which the floor area taken from the premises bears to Tenant's total floor
area immediately before the taking. There shall be no other abatement.
12.8 Award: The entire award or compensation in such proceedings,
whether for a total or partial taking or for diminution in the value of the
leasehold or for the fee shall belong to and be the property of Landlord,
provided that Tenant shall be entitled to recover from the condemnor such
compensation as may be separately awarded by the condemnor to Tenant or
recoverable from the condemnor by Tenant in its own right for the taking of
trade fixtures and equipment owned by Tenant (meaning personal property,
whether or not attached to real property, which may be removed without injury
to the premises), for the expense of removing and relocating them, for loss of
goodwill to Tenant's business, and for no other cause.
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12.9 Condemnation by Landlord: Landlord hereby agrees that the rights
and obligations set forth above in Sections 12.1 through 12.9 inclusive shall
not apply in the event of a condemnation (or transfer in lieu thereof) by
Landlord or the City of San Juan Capistrano, and that Landlord shall not
discriminate against Tenant in electing to condemn the Premises and as of the
Date of Execution of Lease set forth in Paragraph A of the Basic Lease
Provisions, Landlord is not contemplating the commencement of any condemnation
proceedings against the Premises.
13. INDEMNITY: WAIVER.
13.1 Indemnity: Tenant shall indemnify and save Landlord harmless from
and against any and all liens, claims, demands, actions, causes of action,
obligations, penalties, charges, liability, damages, loss, cost or expense,
including reasonable attorneys' fees for the defense thereof, arising from or
connected with the conduct or management of the business conducted by Tenant
on the premises or any portion of the common area which is under the exclusive
control of Tenant (the premises and such portion of the common area which is
under the exclusive control of tenant being referred to as "Tenant's premises"
in Paragraphs 13.1 and 13.2), or the use or occupancy of Tenant's premises, or
from any breach or default on the part of Tenant in the performance of any
covenant or agreement on the part of Tenant to be performed pursuant to the
terms of this Lease, or from violations of or noncompliance with any
governmental requirements or insurance requirements, or from any acts or
omissions of Tenant or any person upon Tenant's premises by license or
invitation of Tenant or occupying Tenant's premises or any part thereof under
Tenant.
13.2 Waiver: All property kept, stored or maintained on Tenant's
premises shall be so kept, stored or maintained at the sole risk of Tenant;
and except in the case of Landlord's willful misconduct, Landlord shall not be
liable, and Tenant waives all claims against Landlord, for damages to persons
or property sustained by Tenant or by any other person or firm resulting from
the building in which the premises are located or any roof or by reason of the
Tenant's premises or any equipment located therein becoming out of repair, or
through the acts or omissions of any persons present in or occupying any
portion of the Premises, or for loss or damage resulting to Tenant or its
property from burst, stopped or leaking sewers, pipes, conduits, or plumbing
fixtures, or for interruption of any utility services, or from any failure or
defect in any electric line, circuit, or facility, or any other type of
improvement or service on or furnished to Tenant's premises or resulting from
any accident in, on, or about Tenant's premises or the building in which the
Tenant's premises are located. Landlord shall have no liability for conduct
of others upon the premises.
14. OPERATION OF BUSINESS.
Tenant shall continuously and uninterruptedly, subject only to Paragraph
18, during the entire lease term; (a) remain open for business at least
forty-eight (48) hours per week; (b) adequately staff its store with
sufficient employees to handle the maximum business and carry sufficient stock
of merchandise of such amount, character and quality to accomplish this
purpose; (c) keep the display windows and signs, if any, well lighted during
the hours from sundown to 12 midnight; (d) keep the premises and exterior and
interior portions of windows, doors and all other glass or plate glass
fixtures in a neat, clean, sanitary and safe condition; (e) warehouse, store
or stock only such merchandise as Tenant intends to offer for sale at retail;
(f) refrain from burning any papers or refuse of any kind; (g) store in the
area designated by Landlord all trash and garbage in neat and clean containers
so as not to be visible to members of the public and arrange for the regular
pickup and cartage of such trash or garbage at Tenant's expense or cooperate
in the employment of a trash removal contractor designated by Landlord if
Landlord deems it desirable to have all waste materials removed by one
contractor; (h) observe and promptly comply with all governmental requirements
and insurance requirements affecting the premises or any part of the common
area which is under Tenant's exclusive control and promulgated during the term
of this Lease; (i) not use or suffer or permit to be used the premises of any
part thereof in any manner that will constitute a nuisance or unreasonable
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annoyance to the public or to Landlord, or for any extra hazardous purpose, or
in any manner that will impair the structural strength of the building or
which the Premises are a part; (j) not sell any drug-related paraphernalia or
otherwise operate a business known as a "head shop"; and (k) operate the type
of business set forth in Paragraph G under the trade name set forth in
Paragraph D.
Notwithstanding the foregoing, in addition to the items set forth in
Paragraph G of the Basic Lease Provisions, the Premises may also be used for
(a) the demonstration, showcasing and highlighting of Western artisans and
craftsmen in displays and living exhibits of skills and activities such as
hatblocking, leather tooling, Western art and painting, silversmithing,
glassblowing, bootmaking, Western photography, poetry reading and related
activities of a similar nature; (b) the brokerage of Western excursions and
outings (provided Tenant shall not broker any services which a traditional
travel agency would offer); (c) the incidental sale of non-alcoholic beverages
(such as Sarsaparilla) and penny candy; and (d) storage and warehousing of
merchandise and supplies and office space specifically related to the
operation of Tenant's business in the Premises.
15. SIGNS AND ADVERTISING.
15.1 General: Sign rights and criteria are set forth in the San Juan
Capistrano Municipal Code Section 9-3.6032 and Paragraphs 15.2 and 15.3.
15.2 Interior: Tenant (and Tenant's office subtenants) may at their
own expense erect and maintain upon the interior sales areas of the premises
and the second floor all signs and advertising matter customary and
appropriate in the conduct of their businesses which comply with governmental
requirements or laws, subject to Landlord's right to remove any signs or
advertising matter which violate Paragraphs 14(j), 15.3, or other provisions
of this Lease.
15.3 Exterior: Tenant must, at his own expense, erect an exterior sign
complying with all governmental requirements. Each occupant of the Premises
shall be permitted to place at the entrance of each occupants' space a small
sticker or decal, indicating hours of business, emergency telephone numbers
and anything required by applicable regulatory agencies. Tenant shall at its
own expense maintain and keep in good repair all such installations, signs,
and advertising devices and shall pay all charges required to keep them in
good repair. Tenant's sign must be installed and operating concurrent with
its opening for business. Tenant's signs must be duly inspected and approved
by the appropriate governmental department or authority.
16. LIENS.
Tenant shall keep the premises free of any liens or claims of lien
arising from any work performed, material furnished, or obligations incurred
by Tenant in connection with the premises. If Tenant disputes the correctness
or validity of any claim of lien, Tenant shall within ten (10) days after
written request by Landlord record such bond as will release said property
from the lien claimed.
17. ENTRY BY LANDLORD.
Upon reasonable notice to Tenant (except in an emergency, in which event
no such notice need be given) Landlord reserves, and shall at any and all
times have, the right to enter the Premises during business hours (except in
the event of an emergency) to inspect the same, to submit said Premises to
prospective purchasers or tenants and to post notices of non -responsibility,
without abatement of rent, and further providing that the business of the
Tenant shall not be interfered with unreasonably. Tenant hereby waives any
claim for damages or for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises,
and any other loss occasioned thereby. Landlord shall have the right to use
any and all means which Landlord may deem proper in an emergency, to obtain
entry to the Premises without liability to Tenant except for any failure to
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exercise due care for Tenant's property and any entry to the Premises obtained
by Landlord by any of said means, or otherwise, shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into,
or a detainer of, the Premises, or an eviction of Tenant from the premises or
any portion thereof.
18. DELAYING CAUSES.
If either party is delayed in the performance of any covenant of this
Lease because of any of the following causes (referred to elsewhere in this
Lease as a "delaying cause"): acts of the other party, action of the elements,
war, riot, labor disputes, inability to procure or general shortage of labor
or materials in the normal channels of trade, delay in transportation, delay
in inspections, or any other cause beyond the reasonable control of the party
so obligated, whether similar or dissimilar to the foregoing, financial
inability excepted, then such performance shall be excused for the period of
the delay and the period for such performance shall be extended for a period
equivalent to the period of such delay, except that the foregoing shall in no
way affect Tenant's obligation to pay rent and other charges for the length of
the term of this Lease.
19. ASSIGNMENT AND SUBLETTING.
19.1(a) When Consent Is Required: For a period of five (5) years
from the Commencement Date, Tenant shall not directly or indirectly assign,
encumber, alienate, or otherwise transfer (including any transfer by operation
of law), or sell all or a majority of its interest under this Lease to any
third party, or in any manner relinquish management and control of the
premises to any other third party. After the expiration of this five (5) year
period, Tenant shall have the right to assign this lease, or sublease any
interest herein provided the prior written consent of Landlord is first
obtained, such consent not to be unreasonably withheld.
Notwithstanding the foregoing, the sale, assignment, transfer or
disposition, whether for value, by operation of law, gift, will or intestacy,
of (a) forty-nine percent (490) or less of the outstanding stock of Tenant if
Tenant is a corporation, or (b) forty-nine percent (490) or less of the
interest of any general partner, joint venturer, associates, or cotenant, if
Tenant is a partnership, joint venture, association, or cotenancy, shall not
at any time during the term be deemed an assignment or transfer which is
prohibited or for which Landlord's consent is required.
(b) Permitted Transfers. Notwithstanding (a) above, so long as Tenant
retains control over the ground floor area of the Premises at any time during
the term, Tenant may enter into agreements with other third parties in the
form of licenses, subleases, concession agreements, consignments or any other
appropriate marketing agreement which gives permission to a vendor or supplier
of merchandise to display and sell their products on the Premises, provided
such persons or entities conduct uses in conformance with Paragraph G of the
Basic Lease Provisions (collectively, "Permitted Transfers"). Tenant may
enter into or terminate such agreements for Permitted Transfers at will, in
Tenant's discretion, as required, desired or necessary for the success of
Tenant's business, and Landlord's consent shall not be required thereto and no
transfer fees or other fees shall be payable under this Lease to Landlord with
respect thereto.
(c) Except for any Permitted Transfer or Exempt Transfer (as defined
below) any request by Tenant to Landlord for Landlord's consent to any
assignment or sublease shall be accompanied by the following:
a. Complete financial information with respect to the proposed
assignee or sublessee.
b. Copies of all documents in connection with such sublease or
assignment including, where appropriate, copies of documents with respect to a
sale of Tenant's business.
C. A description of the business experience of the proposed
assignee or sublessee.
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d. Proof that all payments due Landlord and all reports due have
been delivered to Landlord.
A Seven Hundred Fifty Dollar ($750.00) payment, to cover
Landlord's handling charges for each such transaction it is requested to
approve.
(d) Exempt Transfer. Notwithstanding the foregoing, Landlord's prior
written consent shall not be required and the fee set forth above shall not be
payable in connection with (i) the assignment of the lease from Tim Holsten to
a business entity to be formed named Vaquero West Mercantile Company, a
California limited partnership, or San Juan Saloon Building, a California
limited partnership or some other name reasonably approved by Landlord,
whether such entity shall be a corporation, general partnership, limited
partnership, joint venture or other form of business entity ("Exempt
Transfer"), so long as (a) Tim Holsten shall not be relieved of any liability
under the Lease as a result of such assignment and shall remain personally
liable, (b) Tim Holsten executes a guarantee of the Lease in Landlord's
standard form and (c) such assignee executes an instrument in form and content
reasonably satisfactory to Landlord assuming all of Tenant's obligations under
the Lease, and (ii) in the event of such a transfer as described in (i),
above, Tim Holsten shall retain at least fifty-one percent (510) of any stock
or interest in the assignee.
19.2 General Conditions: In the event of any assignment of this Lease,
Tenant shall remain primarily liable on its covenants hereunder unless
released in writing by Landlord. In the event of any assignment or sublease
the assignee or sublessee shall agree in writing to perform and be bound by
all of the covenants of this Lease required to be performed by Tenant. After
any one assignment or subletting by Tenant of its interest in this Lease
pursuant to Paragraph 19.1, no further assignment or subletting shall be made
without Landlord's prior written consent.
19.3 Landlord's Rights with Respect to Tenant's Assignment or
Subletting: Any assignment or subletting without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, shall be voidable
at the election of Landlord, which election can be made at any time within two
(2) months after Landlord is given written notice thereof. In the event that
Tenant makes or suffers such assignment or subletting without Landlord's
written consent (including assignment or subletting by operation of law), then
such act or sufferance or assignment or subletting shall be deemed to grant an
option to Landlord to terminate this Lease, and the tenancy created hereby
(including subtenancies). Such option must be exercised by Landlord within
two (2) months of the date it receives the written notices described herein;
upon the exercise of said option by Landlord, Tenant shall have a reasonable
time, not exceeding the end of the succeeding calendar month within which to
vacate the entirety of the leased Premises, at which date the tenancy created
by this Lease shall be deemed to have terminated, and any further occupancy by
Tenant (and those holding under Tenant) shall constitute an unlawful
detention. Landlord's consent to any assignment or subletting shall not
relieve Tenant from each and all of Tenant's obligations hereunder and Tenant
shall continue to remain jointly and severally liable hereunder with said
assignee or subtenant. Landlord may exercise the rights granted in this
Paragraph 19.3 at any time prior to receiving written notice if Landlord has
actual notice of such assignment or subletting.
19.4 Termination of Subleases, Licenses and Concession Agreements:
Notwithstanding any term or provision of this Lease, Tenant agrees
that in the event of the expiration or earlier termination of this Lease, all
subleases, license agreements, concession agreements and any other agreement
pursuant to which anyone occupies all or any part of the Premises or operates
any business therein shall automatically cease and terminate, whether
Landlord's consent was required for such sublease, license agreement,
concession agreement, other agreement or not. Tenant agrees that any such
sublease, license agreement, concession agreement or other agreement shall
contain a provision providing for the above and an acknowledgement by all
parties thereto that such agreement shall at all times be subordinate to the
Lease.
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20. NOTICES.
Whenever under this Lease provision is made for notice, demand, or
request for consent, it shall be in writing and signed by or on behalf of the
party giving the notice or making the demand and served by registered or
certified mail, or by telegraph, or facsimile transmission (FAX). If served
by registered or certified mail, it shall be deposited in the United States
mail postage prepaid, with return receipt requested, addressed to the party to
whom such notice or demand is to be given at the address stated in Paragraphs
L or M as the case may be, and shall be conclusively deemed served on the date
indicated on the return receipt and if the receipt is not returned, then
forty-eight (48) hours after mailing. If served by telegraph or facsimile
transmission (FAX), service to the addressee shall be conclusively deemed made
as confirmed by the telegraphic agency making delivery. The address of either
party may be changed for the purpose of this Paragraph by notice to the other
party.
21. SURRENDER OF POSSESSION.
21.1 Surrender: At the expiration of the tenancy created hereunder,
whether by lapse of time or otherwise, Tenant shall remove all signs and
surrender the premises broom clean and in the same condition and repair as at
the commencement date of the Lease, ordinary wear and tear excepted, subject
to the provisions of Article 33.
21.2 Holding Over:
a. Other than (i) a holding over in accordance with Article 45
below or (ii) a holding over pending good faith negotiations between Landlord
and Tenant for an extension or renewal of the Lease, in no event to exceed
sixty (60) days, if Tenant holds the Premises after the expiration of the term
hereof, such holding over shall, in the absence of a written agreement on the
subject, be deemed to have created a tenancy from month to month, terminable
on thirty (30) days' written notice by either party to the other, at a minimum
monthly rental equal to 1.5 times the average monthly rental paid by Tenant to
Landlord during the immediately preceding year, and otherwise subject to all
terms of this Lease, including the payment of all other charges payable by
Tenant hereunder. Neither acceptance of rent nor of anything contained in
this subparagraph shall be construed as an express or implied consent to such
holding over, nor affect Landlord's right to recovery of possession as a
consequence of holding over.
b. If Tenant fails to surrender the demised premises upon the
termination of this Lease, Tenant shall indemnify and hold harmless Landlord
from loss or liability resulting from such failure, including, without
limiting the generality of the foregoing, any claims made by any succeeding
tenant arising out of such failure.
22. QUIET ENJOYMENT.
Subject to the provisions of this Lease and conditioned upon performance
of all of the provisions to be performed by Tenant hereunder, Landlord shall
secure to Tenant during the lease term the quiet and peaceful possession of
the premises and all rights and privileges appertaining thereto.
23. SUBORDINATION.
Tenant agrees that this Lease, at Landlord's option, shall be
subordinated to any mortgages, trust deeds or other real property security
interests that may hereafter be placed upon said premises and to any advances
to be made thereunder, any interest thereon, and all renewals, replacements
and extensions thereof, provided (i) that such mortgagees or beneficiaries
first request such subordination, and (ii) that Tenant shall not be obligated
to subordinate its rights pursuant to the Lease unless the mortgagees or
beneficiaries concurrently enter into a non -disturbance agreement with Tenant
in such mortgagee's or beneficiary's then standard form providing that
Tenant's possession of the Premises and its rights under this Lease will not
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be disturbed or affected (provided Tenant is not in default) by any actions
taken by such holder of an interest to which this Lease is subordinated.
Tenant shall execute and deliver, without cost to Landlord, whatever
instruments may be required to effect such subordination. Tenant shall at any
time, hereafter, on the request from Landlord execute any instruments, leases
or other documents that may be required to render Tenant's interest hereunder
prior to the lien of any Mortgage or Deed of Trust and the failure of Tenant
to execute any such instrument, lease or other document shall constitute a
default hereunder. However, should the demised premises be purchased or
otherwise acquired by any person in connection with any sale or other
proceeding under the terms of any mortgage or trust deed, this Lease shall, at
the option of such person, continue in full force and effect, and Tenant
hereby attorns and agrees to attorn to such person. Any breach of this
Paragraph by Tenant shall be and is deemed to be a substantial material breach.
24. OFFSET STATEMENT.
Tenant shall, at any time and from time to time within ten (10) days
after written request therefor by Landlord, deliver a certificate to Landlord
or to any proposed mortgagee, trust deed beneficiary, purchaser, or successor
in interest, certifying the commencement and expiration date of the lease
term, the security deposit held by Landlord, the date through which rental has
been paid, that this Lease is then in full force and effect and setting forth
the amount and nature of modifications, defenses, or offsets, if any, claimed
by Tenant. If Tenant fails to deliver such certificate within said ten
(10) -day period, Tenant hereby appoints Landlord as Tenant's attorney in fact
for the purpose of completing, executing and delivering the certificate to the
person or firm requesting it. Any breach of this Paragraph by Tenant shall be
and is deemed to be a substantial material breach. Tenant hereby acknowledges
that the failure to submit such certificate in a timely manner will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Accordingly, in addition to
all other remedies, Landlord may impose a charge equal to one month's minimum
rent for failure of Tenant to timely submit such certificate which the parties
agree represents a fair and reasonable estimate of the damage caused Landlord
by such failure. Acceptance of such charge shall not constitute a waiver of
Tenant's default.
25. DEFAULT.
25.1 Notice and Remedies: In the case of Tenant's failure to pay rent
or to perform any of Tenant's other obligations under this Lease, or any part
thereof, when due or called for hereunder, (such failure in each instance
being deemed to be a material breach) Tenant shall have a period of seven (7)
days after service of written notice by Landlord specifying the nature of
Tenant's default within which to cure such defaults provided that if the
nature of a non -monetary default is such that it cannot be fully cured within
said three (3) -day period, Tenant shall have such additional time as may be
reasonably necessary (not exceeding one hundred twenty (120) days) to cure
such default so long as Tenant begins promptly after service of Landlord's
notice and proceeds diligently at all times to complete said cure. If Tenant
fails to comply with the foregoing provisions, or if Tenant has breached its
obligations in a fashion which cannot be cured, such as the submission of
false financial statements of Tenant or a guarantor Tenant shall be deemed to
be in material breach of this Lease, and Landlord with or without notice or
demand of any kind shall have the following options:
a. Landlord shall have the right to terminate this Lease by
giving to Tenant written notice of such termination.
b. If Landlord elects to terminate this Lease as provided in
subparagraph (a) hereof, Landlord may then or at any time thereafter re-enter
the Premises, or any part thereof, and expel or remove therefrom Tenant any
other persons occupying the same, using such force as may be necessary so to
do, and again possess and enjoy the Premises, without prejudice to any other
remedies that Landlord may have by reason of Tenant's default or of such
termination.
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C. If Landlord elects to terminate this Lease, as provided in
subparagraph (a) hereof, Landlord shall have all of the rights and remedies of
a Landlord provided by Section 1951.2 of the California Civil Code. The
amount of damages which Landlord may recover in the event of such termination
shall include: (i) the worth at the time of award (computed by allowing
interest at the maximum rate permitted by law) of the unpaid rent and charges
equivalent to rent earned as of the date of termination hereof; (ii) the worth
at the time of the award (computed by allowing interest at the maximum rate
allowable by law) of the amount by which the unpaid rent and charges
equivalent to rent which would have been earned after the date of termination
hereof until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoid; (iii) the worth at the time of
award (computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award plus one percent (lo))
of the amount by which the unpaid rent and charges equivalent to rent for the
balance of the term hereof after the time of award exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided; (iv) any other
amount necessary to compensate Landlord for 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 (v) any
other amount which Landlord may by law hereafter be permitted to recover from
Tenant to compensate Landlord for the detriment caused by Tenant's default.
d. After terminating this Lease pursuant to subparagraph (a)
hereof, Landlord may, without any further demand or notice, remove any and all
personal property located on the Premises and place such property in a public
or private warehouse or elsewhere at the risk and sole cost and expense of
Tenant. In the event that Tenant shall not immediately pay the cost of
storage of such property after the same has been stored for a period of thirty
(30) days or more, Landlord may sell any or all thereof at a public or private
sale in such a manner and at such times and places as Landlord in its sole
discretion may deem proper, without notice to or demand upon Tenant. Tenant
waives all claims for damages that may be caused by Landlord's re-entering and
taking possession of the Premises or by removing or storing or selling the
property as herein provided, and Tenant shall indemnify and hold Landlord free
and harmless from and against any and all losses, costs and damages, including
without limitation all court costs and attorneys' fees of Landlord occasioned
thereby.
e. Landlord shall have the right to cause a receiver to be
appointed in any action against Tenant to take possession of the Premises
and/or to collect the rents or profits derived therefrom. Said receiver may,
if it is necessary or convenient in order to collect such rents or profits,
conduct the business and may use the same in conducting such business on the
Premises without compensation to Tenant for such use. Neither the application
for the appointment of such receiver nor the appointment of such receiver
shall constitute an election on the part of the Landlord to terminate this
Lease unless a written notice of such intention is given to Tenant.
f. Landlord may at Landlord's election re-enter the Premises,
and, without terminating this Lease, at any time and from time to time re -let
the Premises and improvements or any part or parts of them for the account and
in the name of Tenant or otherwise. Any re -letting may be for the remainder
of the Term or for a longer or shorter period. Landlord may execute any
leases made under this provision either in Landlord's name or in Tenant's name
and shall be entitled to all rents from the use, operation, or occupancy of
the Premises or improvements or both. Tenant shall nevertheless pay to
Landlord on the due dates specified in this Lease the equivalent of all sums
required of Tenant under this Lease, plus Landlord's expenses, less the avails
of any re -letting or attachment. No act by or on behalf of Landlord under
this provision shall constitute a termination of this Lease unless Landlord
gives Tenant notice of termination.
g. If Landlord elects to re-enter the Premises without
termination, as provided in subparagraph (f) hereof, Landlord may at
Landlord's election use Tenant's personal property and trade fixtures or any
of such property and fixtures without compensation and without liability for
use or damage, or store them for the account and at the cost of Tenant. The
election of one remedy for any one item shall not foreclosure an election of
any other remedy for another item or for the same item at a later time.
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h. Notwithstanding anything to the contrary set forth herein,
Landlord's re-entry to perform acts of maintenance of preservation of or in
connection with efforts to re -let the Premises or any portion thereof, or the
appointment of a receiver upon Landlord's initiative to protect Tenant's
interest under this Lease shall not terminate Tenant's right to possession of
the Premises or any portion thereof, and until Landlord does elect to
terminate this Lease by written notice to Tenant, this Lease shall continue in
full force and effect and Landlord may enforce all of Landlord's rights and
remedies hereunder including, without limitation, the right to recover from
Tenant as it becomes due hereunder all rent, additional rent and other charges
required to be paid by Tenant under the terms hereof. Any re -letting by
Landlord of the Premises and improvements, or any part or parts of them, shall
be for the account and in the name of Tenant or otherwise. Any re -letting may
be for the remainder of the term of this Lease or for a longer or shorter
period. Landlord may execute any leases made under this provision either in
Landlord's name or in Tenant's name and shall be entitled to all rents from
the use, operation, or occupancy of the Premises or improvements or both.
i. Nothing in this Article 25 shall be deemed to affect
Landlord's right to defense and indemnification for liability or liabilities
arising prior to the termination of this Lease for personal injuries or
property damage under the indemnification clause or clauses contained in this
Lease.
j. In addition to the other remedies provided in this Lease,
Landlord shall be entitled to injunctive relief in case of the violation, or
attempted or threatened violation, of any covenant, agreement, condition or
provisions of this Lease and to a decree compelling performance of any
covenant, agreement, condition or provision of this Lease and to any other
remedy allowed to Landlord at law or in equity.
25.2 Notice of Termination: No reentry or re -letting of the premises
shall be construed as an election by Landlord to terminate Tenant's right to
possession and this Lease unless a written notice of such intention is given
by Landlord to Tenant; and notwithstanding any such re -letting without such
termination, Landlord may at any time thereafter elect to terminate Tenant's
right to possession and this Lease in the event that at such time Tenant
remains in default hereunder.
25.3 Waiver of Notice; Performance by Landlord: Notwithstanding any
provision of this Paragraph 25, (a) if Tenant is required to comply with any
governmental requirement, Tenant shall not be entitled to notice of default
from Landlord and right to cure beyond the period within which such compliance
may be required by such requirement; or (b) ;if this Lease expressly provides
that this Lease may be terminated effective on service of notice, Tenant shall
be entitled to cure its default only if the right to cure is required by law;
or (c) if in Landlord's judgment the continuance of any default by Tenant for
the full period of notice provided for herein will jeopardize the premises or
the rights of Landlord, Landlord may, with or without notice, elect to perform
those acts in respect to which Tenant is in default for the account and at the
expense of Tenant. If by reason of such default by Tenant, Landlord is
compelled to pay or elects to pay any sum of money, including, but without
limitation, reasonable attorneys' fees, such sum or sums so paid by Landlord,
with interest thereon from the date of such payment at the rate provided in
this Lease, shall be due from Tenant to Landlord on the first day of the month
next following such payment by Landlord.
25.4 Interest: Any sum accruing to Landlord under the terms and
provisions of this Lease which shall not be paid when due shall bear interest
at the lower of eighteen percent (180) per annum or the highest rate permitted
under the then existing Usury Statutes for non -consumer obligations, from the
date the same becomes due and payable by the terms and provisions of this
Lease until paid, unless otherwise specifically provided in this Lease.
25.5 Other Remedies: Nothing contained in this Lease shall limit
Landlord to the remedies set forth in this Paragraph 25, and particularly
those which are set forth in Paragraph 25.1; and upon Tenant's default
Landlord shall be entitled to exercise any right or remedy then provided by
law, including, but without limitation, the right to obtain injunctive relief
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and the right to recover all damages caused by Tenant's default in the
performance of any of its obligations under this Lease.
25.6 Default: In the event that Tenant is in default under any
provision of this Lease more than four (4) times during any calendar year of
the term of this Lease or any extension, then in addition to any and all other
rights and remedies under this Lease or any applicable law, rent shall
automatically become due and payable quarterly in advance, rather than
monthly, notwithstanding Paragraph 4 or any other provision of this Lease to
the contrary.
26. BANKRUPTCY OR INSOLVENCY.
26.1 In the event that Tenant shall become Debtor under chapter 7 of
the Bankruptcy Code, and the Trustee or Tenant shall elect to assume this
Lease for the purpose of assigning the same or otherwise, such election and
assignment may only be made if all of the terms and conditions of this Lease
are satisfied. If such Trustee shall fail to elect or assume this Lease
within sixty (60) days after the filing of the Petition, this Lease shall be
deemed to have been rejected. Landlord shall be thereupon immediately
entitled to possession of the Premises without further obligation to Tenant or
Trustee, and ;this Lease shall be cancelled, but Landlord's right to be
compensated for damages in such liquidation proceeding shall survive.
26.2 In the event that a Petition for reorganization or adjustment of
debts is filed concerning Tenant under Chapters 11 or 13 of the Bankruptcy
Code, or a proceeding is filed under Chapter 7 of the Bankruptcy Code and is
transferred to Chapters 11 or 13, the Trustee or Tenant, as
Debtor -In -Possession, must elect to assume this Lease within seventy-five (75)
days from the date of the filing of the Petition under Chapters 11 or 13, or
the Trustee or Debtor -In -Possession shall be deemed to have rejected this
Lease. No election by the Trustee or Debtor -In -Possession to'assume this
lease, whether under Chapters 7, 11 or 13, shall be effective unless each of
the following conditions, which Landlord and Tenant acknowledge are
commercially reasonable in the context of a bankruptcy proceeding of Tenant,
have been satisfied, and Landlord has so acknowledged in writing:
a. The Trustee or the Debtor -In -Possession has cured, or has
provided Landlord adequate assurance that:
(1) Within ten (10) days from the date of such assumption
the Trustee will cure all monetary defaults under this Lease; and
(2) Within thirty (30) days from the date of such assumption
the Trustee will cure all non -monetary defaults under this Lease.
b. The Trustee or the Debtor -In -Possession has compensated, or
has provided to Landlord adequate assurance that within ten (10) days from the
date of assumption Landlord will be compensated for any pecuniary loss
incurred by Landlord arising from the default of Tenant, the Trustee, or the
Debtor -In -Possession as recited in Landlord's written statement of pecuniary
loss sent to the Trustee or Debtor -In -Possession.
C. The Trustee or the Debtor -In -Possession has provided Landlord
with adequate assurance of the future performance of each of Tenant's,
Trustee's or Debtor -In -Possession's obligations under this Lease; provided,
however, that:
(1) The Trustee or Debtor -In -Possession shall also deposit
with Landlord, as security for the timely payment of rent, an amount equal to
three (3) months' rent and other monetary charges accruing under this Lease;
and
(2) If not otherwise required by the terms of this Lease,
the Trustee or Debtor -In -Possession shall also pay in advance on the date
minimum rent is payable one -twelfth (1/12th) of Tenant's annual obligations
under this Lease for maintenance, insurance and similar charges.
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(3) From and after the date of the assumption of this Lease,
the Trustee or Debtor -In -Possession shall pay as minimum rent an amount equal
to the minimum rental otherwise payable hereunder, which amount shall be
payable in advance in equal monthly installments on the date minimum rent is
payable;
(4) The obligations imposed upon the Trustee or
Debtor -In -Possession shall continue with respect to Tenant or any assignee of
the Lease after the completion of bankruptcy proceedings.
26.3 In the event that this Lease is assumed by a Trustee appointed for
Tenant or by Tenant as Debtor -In -Possession under the provisions of Section
26.2 hereof and thereafter Tenant is liquidated or files a subsequent Petition
for reorganization or adjustment of debts under Chapters 11 or 13 of the
Bankruptcy Code, then, and in either of such events, Landlord may, at its
option, terminate this Lease and all rights of Tenant hereunder, by giving
Tenant written notice of its election to so terminate, by no later than thirty
(30) days after the occurrence of either of such events.
26.4 When, pursuant to the Bankruptcy Code, the Trustee or
Debtor -In -Possession shall be obligated to pay reasonable use and occupancy
charges for the use of the Premises or any portion thereof, such charges shall
not be less than the minimum annual rent as defined in this Lease and other
monetary obligations of Tenant for the payment of maintenance, insurance and
other charges payable by Tenant hereunder.
26.5 Neither Tenant's interest in the Lease, nor any lesser interest of
Tenant herein, nor any estate of Tenant hereby created, shall pass to any
trustee, receiver, assignee for the benefit of creditors, or any other person
or entity, or otherwise by operation of law under the laws of any state having
jurisdiction of the person or property of Tenant (hereinafter referred to as
the "state law") unless Landlord shall consent to such transfer in writing.
No acceptance by Landlord of rent or any other payments from any such trustee,
receiver, assignee, person or other entity shall be deemed to have waived, nor
shall it waive Landlord's right to terminate this Lease nor the need to obtain
Landlord's consent for any transfer of Tenant's interest under this Lease
without such consent.
27. REMEDIES CUMULATIVE.
The various rights, elections, and remedies of Landlord and Tenant
contained in this Lease shall be cumulative, and no one of them shall be
construed as exclusive of any of the others, or of any right, priority, or
remedy allowed or provided for by law.
28. ATTORNEYS' FEES.
If either party hereto shall file any action or bring any proceeding
against the other party arising out of this Lease or for the declaration of
any rights hereunder, the prevailing party therein shall be entitled to
recover from the other party, all costs and expenses, including reasonable
attorneys' fees, incurred by the prevailing party as determined by the court.
If either party ("secondary party") without its fault is made a party to
litigation instituted by or against the other party ("primary party"), the
primary party shall pay to the secondary party all costs and expenses,
including reasonable attorneys' fees, incurred by the secondary party in
connection therewith.
29. WAIVER OF DEFAULT.
The waiver by either party of any default in the performance by the other
of any covenant contained herein shall not be construed to be a waiver of any
preceding or subsequent default of the same or any other covenant contained
herein. The subsequent acceptance of rent or other sums hereunder by Landlord
shall not be deemed a waiver of any preceding default other than the failure
of Tenant to pay the particular rental or other sum or portion thereof so
accepted, regardless of Landlord's knowledge of such preceding default at the
time of acceptance of such rent or other sum.
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30. ABANDONMENT.
Lessee shall not vacate or abandon the premises at any time during the
term hereof; such act shall constitute a default. (The cessation of business
for a continuous period of fifteen (15) days or more except by legal
compulsion or force majeure not created by the act, omission or defalcation of
Tenant shall conclusively be deemed an abandonment.) If Tenant shall abandon,
vacate or surrender said premises or be dispossessed by process of law or
otherwise, in addition to all other remedies of Landlord, any improvements,
fixtures or personal property belonging to Tenant and left on the premises
shall be deemed abandoned, and at the option of Landlord become the property
of Landlord.
31. SUBTENANCIES.
The voluntary or other surrender of this Lease by Tenant or a mutual
cancellation of this Lease shall not effect a merger and shall, at Landlord's
option, terminate all existing subtenancies or operate as an assignment to
Landlord of any or all of such subtenancies.
32. SUCCESSORS.
Subject to the provisions of Paragraph 19, this Lease shall be binding
upon and shall inure to the benefit of the parties hereto and their
successors. The term "successors" is used herein in its broadest possible
meaning and includes, but is not limited to, every person succeeding to any
interest in this Lease or the premises, of Landlord or Tenant herein, whether
such succession results from the act or omission of such party. Every
covenant and condition of this Lease shall be binding upon all assignees,
subtenants, licensees, and concessionaires of Tenant.
33. REMOVAL OF TENANT'S PROPERTY.
Upon the expiration of the term of this Lease or upon any earlier
termination thereof, Tenant shall remove at its own expense all trade
fixtures, equipment, merchandise, and personal property (collectively called
"Tenant's property" in this Lease) which were installed by Tenant or any
subtenant, concessionaire of licensee in or upon the premises; but if Tenant
is in default, Tenant shall not remove Tenant's property unless notified by
Landlord so to do. In case of any injury or damage to the building or any
portion of the premises resulting from the removal of Tenant's property,
Tenant shall promptly pay to Landlord the cost of repairing such injury or
damage. Tenant shall complete such removal by the time provided in the first
sentence of this Paragraph 33 unless prevented from so doing by a delaying
cause, or Landlord may, at Landlord's option, retain any or all of Tenant's
property; and title thereto shall thereupon vest in Landlord without the
execution of documents of sale or conveyance by Tenant, or Landlord may remove
any or all items of Tenant's property from the premises and dispose of them in
any manner Landlord sees fit, and Tenant shall pay upon demand to Landlord the
actual expense of such removal and disposition together with interest from the
date of payment by Landlord until repayment by Tenant.
34. EFFECT OF CONVEYANCE.
If during the term of this Lease, Landlord conveys its interest in the
premises, or this Lease, then from and after the effective date of such
conveyance, and provided Landlord has given the transferee written notice of
this Lease, including the provisions of Article 45, below, Landlord shall be
released and discharged from any and all further obligations and
responsibilities under this Lease except those already accrued of which
Landlord has notice at the time of conveyance.
35. LANDLORD'S DEFAULT; NOTICE TO LENDER.
35.1 Landlord's Default: In the case of a monetary default, Landlord
shall have a period of ten (10) days after notice thereof from Tenant to cure
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such monetary default. In the case of a non -monetary default, Landlord shall
commence promptly to cure such default immediately after receipt of written
notice from Tenant specifying the nature of such default and shall complete
such cure within thirty (30) days thereafter, provided that if the nature of
the non -monetary default is such that it cannot be cured within said thirty
(30) -day period, Landlord shall have such additional time as may be reasonably
necessary to complete its performance so long as Landlord has proceeded with
diligence after receipt of Tenant's notice and is then proceeding with
diligence to cure such default. Tenant shall have no right to terminate this
Lease or to withhold or to deduct rent as a remedy for any Landlord default
hereunder, Tenants' only right shall be a claim for damages.
35.2 Notice to Lender: Whenever Tenant is required to serve notice on
Landlord of Landlord's default, written notice shall also be served at the
same time upon the mortgagee under any mortgage or beneficiary under any deed
of trust. Such mortgagee or beneficiary -shall have the periods of time within
which to cure Landlord's defaults as are provided in Paragraph 35.1, which
periods shall commence to run ten (10) days after the commencement of the
periods within which Landlord must cure its defaults under Paragraph 35.1. In
this connection any representative of the mortgagee or beneficiary shall have
the right to enter upon the premises for the purpose of curing the Landlord's
default. Such mortgagee or beneficiary shall notify Landlord and Tenant in
the manner provided by Paragraph 20 of the address of such mortgagee or
beneficiary to which such notice shall be sent, and the agreements of Tenant
hereunder are subject to prior receipt of such notice.
36. INTERPRETATION.
The captions by which the paragraphs of this Lease are identified are for
convenience only and shall not affect the interpretation of this Lease.
Wherever the context so requires, the singular number shall include the
plural, the plural shall refer to the singular, the neuter gender shall
include the masculine and feminine genders. If there is more than one
signatory hereto as Tenant, the liability of such signatories shall be joint
and several. If any provision of this Lease shall be held to be invalid by a
court, the remaining provisions shall remain in effect and shall in no way be
impaired thereby.
37. REPRESENTATIONS.
Tenant warrants and represents that there have been no representations or
statements of fact with respect to the Premises, the surrounding area or
otherwise whether by Landlord, its agents or representatives, any lease broker
or any other person, which representations or statements have in any way
induced Tenant to enter into this Lease or which have served as the basis in
any way for Tenant's decision to execute this Lease, except as contained in
this Lease. Tenant agrees and acknowledges that no lease broker, agent, or
other person has had or does have the authority to bind Landlord to any
statement, covenant, warranty or representation except as contained in this
Lease and that no person purporting to hold such authority shall bind Landlord
to any statement, covenant, warranty or representation except as contained in
this Lease and that it is not reasonable for Tenant to have assumed that any
person had or has such authority. Further, neither Landlord's execution of
this Lease nor any other of its acts shall be construed in any way to indicate
Landlord's ratification, consent to or approval of any act, statement or
representation of any person except as specifically set forth in this Lease.
38. REAL ESTATE BROKERS; FINDERS.
Each party represents that it has not had any dealings with any real
estate broker, finder, or other person, with respect to this Lease in any
manner. Each party shall hold harmless the other party from all damages
resulting from any claims that may be asserted against the other party by any
broker, finder or other person with whom the other party has or purportedly
has dealt, except said brokers. Landlord and Tenant acknowledge that Tenant's
legal counsel, Michael H. Udkovich ("Udkovich"), is a licensed California real
estate broker. Tenant hereby confirms that no commission is payable to
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Udkovich in connection with this transaction and Tenant hereby agrees to
indemnify and hold Landlord harmless from any claim for such a commission.
39. PROHIBITION AGAINST RECORDING LEASE.
Neither this Lease nor any memorandum thereof shall be recorded. The
recordation hereof by or on behalf of Tenant shall be deemed a material breach.
40. SEVERABILITY.
The unenforceability, invalidity, or illegally of any provision shall not
render the other provisions unenforceable, illegal or invalid.
41. LATE CHARGES AND INTEREST.
Tenant hereby acknowledges that late payment by Tenant to Landlord of
rent and other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to processing
and accounting charges, and late charges which may be imposed on Landlord by
the terms of any mortgage or trust deed covering the premises. Accordingly,
if any installment of rent or any other sum due from rent shall not be
received by Landlord or Landlord's designee within five (5) days after such
amount shall be due, Tenant shall pay to Landlord a late charge equal to ten
percent (100) of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payments by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with
respect to such overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies granted hereunder. In addition, Tenant shall
pay interest on all rentals and other charges not paid on the date when due at
an annual interest rate of eighteen percent (180) or the highest rate
permitted by law, whichever is lower.
42. SAFETY AND HEALTH.
Tenant covenants at all times during the term of this Lease to comply
with the requirements of the Occupational Safety and Health Act of 1970, 29
U.S.C. §651 et seq. and any analogous legislation in California (collectively
the "Act"), to the extent that the Act applies to the premises and any
activities thereon. Without limitation the generality of the foregoing.
Tenant covenants to maintain all working areas, all machinery, structures,
electrical facilities and the like upon the premises in a condition that fully
complies with the requirements of the Act, including such requirements as
would be applicable with respect to agents, employees or contractors of
Landlord who may from time to time be present upon the premises (except to the
extent that the particular activities of such agents, employees or contractors
of Landlord on the premises require safety precautions or alterations of the
conditions of the premises beyond the requirements of such Act otherwise
applicable to the premises, in which event Tenant shall not be obligated to
undertake or provide any such additional safety precautions or alterations of
conditions), and Tenant agrees to indemnify and hold Landlord harmless from
and against any liability, claim or damages, arising as a result of a breach
of the foregoing covenant and from all costs, expenses and charges arising
therefrom, including without limitation, reasonable attorneys' fees and court
costs incurred by Landlord in connection therewith, which indemnity shall
survive the expiration or termination of this Lease.
43. OPTION TO EXTEND
43.1 Option Term. Provided that Tenant is not in default of any
provisions of the Lease at the time of exercise of the option provided herein
or at any time thereafter prior to the commencement of the option term or no
event has occurred which, given the passage of time or the giving of notice or
both, could be declared a default, Tenant may extend the Term for an
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additional one hundred twenty (120) months (such period being referred to
herein as the "Option Term") only by giving Landlord written notice not more
than two hundred forty (240) nor less than one hundred eighty (180) days
before the expiration of the Term. All of the terms and conditions of the
Lease, except this right to extend the Term, shall apply to the Option Term so
far as applicable, and reference in the Lease to the "Term" shall be deemed to
include the Option Term. Failure of Tenant to exercise the option provided
herein shall cause the option to extend to immediately cease and terminate.
43.2 Confirming Memorandum. If the option provided herein is exercised
by Tenant, Landlord and Tenant shall execute, acknowledge and deliver an
amendment to the Lease acknowledging the fact that the option has been
exercised and confirming the commencement and termination dates of the option
term. In the event that Tenant shall fail to give Landlord notice of exercise
of its option to extend granted herein, as provided above, the option to
extend shall be terminated and, at Landlord's request, Tenant shall join with
Landlord in executing and acknowledging a termination instrument in form
suitable for recording in the public records of the County of Orange, to be
effective upon the termination date of the term.
43.3 Time of the Essence/Strict Compliance Required. Time is of the
essence of all of the foregoing provisions relating to Tenant's exercise of
the option to extend the Term. Tenant's failure to exactly comply with any of
the time or other requirements set forth herein shall cause the option to
automatically cease and terminate and, in such event, the Lease shall
terminate upon the expiration of the Term.
43.4 Nontransferable Option. The option to extend the Lease granted
herein is granted solely to Tenant, shall be exercisable only by the original
Tenant under the Lease, and shall not be assignable nor transferable. Any
attempt to assign or transfer the option shall cause the option to
automatically cease and terminate and, in such event, the Lease shall
terminate upon the expiration of the Term.
43.5 Rental Increase. In the event Tenant has the right and properly
exercises the option provided for above, then commencing on the first day of
the Option Term, the Minimum Rent payable under this Lease shall increase to
the then fair market rental value for the Premises, as agreed to by Landlord
and Tenant. If the parties cannot agree on the determination of the fair
market rental value for the Premises, then the same shall be determined in the
following manner:
Upon any objection to fair market rental properly and timely made,
appraisal procedures shall be commenced, as provided herein.
Within thirty (30) days following the receipt by Landlord of any notice
from Tenant that Tenant objects to Landlord's determination of fair market
rental, Landlord shall appoint a qualified MAI appraiser with at least ten
(10) years' experience to act as an arbitrator, giving written notice of the
appointment to Tenant. Within ten (10) days after Tenant's notification of
the appointment, Tenant may also appoint a qualified MAI appraiser with at
least ten (10) years' experience, and give written notice of same to
Landlord. If Tenant fails to make such an appointment, Landlord shall have
the right to cause its appointed arbitrator to proceed alone to determine fair
market rental. If two arbitrators are appointed, as provided above, they
shall select and appoint, in writing, a third arbitrator of similar
qualifications to their own and give written notice to Landlord and Tenant of
the appointment of same within ten (10) days after the appointment of the
second arbitrator. If the two (2) arbitrators shall fail to appoint a third
within the time period provided above, either party shall have the right to
make application to the Superior Court of Orange County to appoint a third
arbitrator. Landlord and Tenant shall each be entitled to be present at any
proceeding regarding appointment of a third arbitrator.
The appointed arbitrator(s) shall promptly fix a convenient time and place
in Orange County for hearing the matter to be determined and shall give
written notice of same to each party at least thirty (30) days prior to the
date so fixed. The arbitrators, with reasonable diligence, shall hear and
determine the matter and shall execute and acknowledge their determination, in
writing, and deliver a copy to each of the parties.
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The determination of a majority of the arbitrators (or if a majority
cannot agree, then the average of the two determinations nearest in amount)
shall determine the question and a judgment may be rendered by the Superior
Court confirming the determination, or the same may be vacated, modified or
corrected by the Court at the instance of either of the parties.
Tenant shall pay for the services of the arbitrators, if any, and all
other costs incurred in reaching a determination, provided, however, (i) each
party shall bear its own attorneys' fees, if any, and (ii) if the arbitrated
new Minimum Rent is ten percent (100) or more less than the Minimum Rent
initially determined by Landlord, Tenant and Landlord shall equally share the
costs of the services of the arbitrators.
Pending the determination of the new Minimum Rent Tenant shall pay to
Landlord the amount payable immediately prior to the commencement of the
Option Term. After determination of the new Minimum Rent, Tenant shall
either, within ten (10) days notice from Landlord, (i) pay any amount which
should have been payable from the commencement of the Option Term, or (ii)
elect not to so exercise the option provided for herein, in which event this
Lease shall terminate and Tenant shall vacate the Premises on or before the
expiration of the thirtieth (30th) day following Tenant's notice to Landlord
electing not to exercise the option. Tenant's failure to so notify Landlord
within such ten (10) -day period shall be deemed Tenant's acceptance of the new
Minimum Rent.
44. GENERAL PROVISIONS.
44.1 No Partnership: Landlord shall not in any way or for any purpose
be deemed a partner, joint venturer, or member of any joint enterprise with
Tenant.
44.2 Covenants and Conditions: Each provision of this Lease
performable by Tenant shall be deemed both a covenant and a condition.
44.3 Choice of Law: This Lease shall be governed by the laws of the
State of California; any action brought to enforce or nullify this Lease or
the provisions hereof must be brought in Orange County, State of California
and in no other forum. Each party that executes this Lease as a Tenant
specifically agrees and consents that service of legal process may be effected
by personal delivery, or registered or certified mail, postage prepaid, with
return receipt requested, mailed to the Tenant at the address specified in
Paragraph M of the Basic Lease Provisions. Service shall be deemed to be
completed as provided in Paragraph 20 (Notices) of this Lease.
44.4 Net, Net, Net Lease: Landlord and Tenant understand and agree
that this Lease is what is commonly known in the business as a "net, net, net
Lease." Tenant recognizes and acknowledges without limiting the generality of
any other terms or provisions of this Lease, that it is the intent of the
parties hereto that any and all rentals in this Lease provided to be paid by
Tenant to Landlord, shall be net to Landlord, and any and all expenses
incurred in connection with the premises or in connection with the operations
thereon, including any and all general or special license fees, insurance
premiums, public utility bills (except as provided in this Lease) and costs of
repair, maintenance and operation of the premises and all buildings,
structures, permanent fixtures and other improvements comprised therein,
together with the appurtenances thereto, shall be paid by Tenant, in addition
to the rentals herein provided for.
44.5 Financial Statements: If Landlord desires to finance, refinance,
sell, transfer or otherwise convey the Premises, or any part thereof, then
Tenant agrees to deliver to Landlord within ten (10) days after request,
Tenant's financial statements for the immediately preceding three fiscal years
of Tenant.
44.6 Time of Essence: Time is of the essence.
44.7 Incorporation of Prior Agreements; Amendments: This Lease
contains all agreements of the parties with respect to any matters mentioned
herein. No prior agreement or understanding pertaining to any matter shall be
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effective. This Lease may be modified in writing only, signed by the parties
in interest at the time of the modification.
44.8 Corporate Authority: If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf of said
corporation with the duly adopted resolution of the Board of Directors of said
corporation or in accordance with the bylaws of said corporation, and that
this Lease is binding upon said corporation in accordance with its terms.
Further, Tenant shall, within thirty (30) days after execution of this Lease,
deliver to Landlord a certified copy of a resolution of the Board of Directors
of said corporation authorizing of ratifying the execution of this Lease.
44.9 No Option: The submission of this Lease by Landlord, its agent or
representative for examination or execution by Tenant does not constitute an
option or offer to lease the Premises upon the terms and conditions contained
herein or a reservation of the Premises in favor of Tenant, it being intended
hereby that this Lease shall become binding upon Landlord only upon Landlord's
delivery to Tenant of a fully executed counterpart hereof.
45. ADDITIONAL PROVISIONS.
45.1 Premises Taken "As Is": The demised Premises are leased to Tenant
"as is", except as specifically provided in Section 1.4, without
representation or warranty by the Landlord, and Tenant accepts the Premises in
the condition existing as of the date of occupancy subject to all applicable
zoning, municipal, county and state laws, ordinances, rules, regulations,
orders, restrictions of record, and requirements in effect during the term or
any period of the term hereof, regulating the leased Premises. Tenant has
conducted its own inspections and has relied entirely thereupon and upon those
of its agents, representatives and consultants in evaluating the Premises.
45.2 Hazardous Waste: Except for cleaning supplies used in the normal
course of Tenant's business, Tenant shall not use, store or dispose of any
hazardous materials including, without limitation, asbestos, formaldehyde,
flammables or explosives on or about the premises without Landlord's prior
written approval. Tenant shall supply Landlord, by February 1, of each year,
a report of all hazardous materials used, stored or disposed of on or about
the premises. Prior to the expiration of the tenancy created hereunder Tenant
shall remove and within ten (10) days thereafter supply Landlord with a
certificate executed by a licensed inspector that all hazardous materials have
been removed from the premises.
46. REQUEST FOR ASSIGNMENT/RIGHT OF FIRST REFUSAL.
46.1 At any time during the term of the Lease, and provided Tenant is
not then in default, and has not during the term been in default beyond any
applicable cure period (and no event has occurred which, with the giving of
notice or the passage of time, or both, could be declared a default), then (i)
Tenant shall have the option to ask Landlord to assign the Lease to Tenant,
subject to all of the terms and provisions of the Master Lease, and (ii) in
the event Landlord elects to assign the Master Lease, Tenant shall have the
right of first refusal to purchase such leasehold interest, (i) and (ii) both
subject to the payment by Tenant to Landlord of the fair market value of the
Master Lease. In the event that Tenant chooses to exercise the foregoing
option (i) Tenant shall do so by giving written notice to Landlord of Tenant's
election to exercise said option. In the event that Landlord elects to sell
or assign the Master Lease, Landlord shall give Tenant written notice of same,
setting forth in such notice the terms and provisions pursuant to which
Landlord proposes to sell such Master Lease interest ("ROFR Offer"). Within
fifteen (15) days after Tenant's receipt of such notice, Tenant shall in
written notice to Landlord either (i) accept the ROFR Offer or (ii) reject the
ROFR Offer. If Tenant fails to accept or reject the ROFR offer within such
fifteen (15) -day period or proposes in any manner to vary the terms of the
ROFR Offer, the ROFR Offer shall be deemed rejected by Tenant and thereafter
Landlord shall be free to assign the Master Lease to any third party upon any
terms and conditions.
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If Tenant accepts the ROFR Offer as provided above, then within thirty
(30) days after Tenant's acceptance of the ROFR Offer, Landlord and Tenant
shall execute an Assignment Agreement incorporating the terms and provisions
set forth in the ROFR Offer.
In the event Tenant exercises its option pursuant to (i), above,
then the following terms shall apply: within fifteen (15) days of giving of
its notice, Tenant shall submit a written proposal for the fair market value
of the interest to be acquired ("Option Interest"). Landlord shall respond to
such proposal and if acceptable notify Tenant of such acceptance, and if not
submit a written counterproposal. Should Landlord and Tenant fail to agree on
a fair market value for the Option Interest within thirty (30) days of
Tenant's written proposal, then either party may demand in writing that the
fair market value of the Option Interest be determined by an appraisal, such
appraisal to be conducted by three (3) appraisers, each of whom is a member of
the American Institute of Real Estate Appraisers, qualified for the purpose of
appraising this type of property, with at least five (5) years experience
appraising property in the area in which the Premises are located. The
appraisal of the fair market value of the Option Interest by such appraiser(s)
shall be made in accordance with the then standard practices of the American
Institute of Real Estate Appraisers.
Within thirty (30) days after the service of written notice
demanding an appraisal of the fair market value of the option Interest, both
parties shall appoint in writing an appraiser and give written notice of such
selection to the other party. In case of failure of either party hereto so to
do within the time specified, then the appraiser duly appointed by the other
party shall proceed to determine the said fair market value of the Option
Interest as herein set forth, which appraisal shall be conclusive on the
parties hereto.
In the event both parties select an appraiser, the two (2)
appraisers so appointed shall agree on the appointment of a third (3rd)
appraiser, or if the two (2) appraisers cannot agree, the parties jointly, or
either party may make application to the presiding judge of the Superior Court
of orange County, State of California for the appointment of a third appraiser
who shall also be a member of the American Institute of Real Estate Appraisers
with similar qualifications as those provided above for the first two
appraisers.
The appraiser or three appraisers, as the case may be, shall
promptly fix a time for completion of the appraisal which time shall be no
later than sixty (60) days from the date of the appointment of the last
appraiser. The appraisers shall notify Landlord and Tenant as to the date
fixed for such completion and such appraisals shall be submitted to Landlord
and Tenant on such date.
Upon submission of the appraisals of the fair market value of the
Option Interest by each of the appraisers, the two of such appraisals of the
fair market value of the Option Interest which are nearer in amount shall be
retained, and the third appraisal of the fair market value of the option
Interest shall be discarded. The arithmetic average of the two retained
appraisals shall be the said fair market value of the Option Interest.
Each of the parties shall pay for the services of the appraiser
appointed by each of them respectively, and one-half (1/2) of the cost of the
services for the third (3rd) appraiser. If only one (1) appraiser is used,
the cost of the services of such appraiser shall be divided equally between
Landlord and Tenant.
In the event the American Institute of Real Estate Appraisers
shall cease to exist or cease to have local members, either party hereto may
apply to the Presiding Judge of the Superior Court of Orange County to
designate a class from which appraisers may be selected as provided above.
The option and right of first refusal granted herein is granted
solely to Tenant and is not assignable or transferable except with Landlord's
prior written consent. Any attempt to assign or transfer said option and
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right of first refusal without Landlord's prior written consent shall cause
the option and right of first refusal to automatically cease and terminate.
LANDLORD TENANT
SAN JUAN CAPISTRANO COMMUNITY TIM HOLSTEN, a married man
REDEVELOPMENT AGENCY
By:
DtS: hnirgn Kenneth F_ Friacc Tim Holsten
ts:
Stephen B. Mlian
Atte s i
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Agency Sec tary
(Seal)
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0787q/2299/000 -27-
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City of I
San Juan Capistrano
MASTER GROUND LEASE
SAN JUAN SALOON SITE
EXHIBIT "A"
EXHIBIT B
SCHEDULE OF PERFORMANCE
The Schedule of Performance is based on the date of execution of
the lease agreement. Nothing within this schedule shall prevent
the Lessee from completing any or all actions earlier than provided
for in this Schedule of Performance
Action
LEASE EXECUTION
Execution of the Lease
Delivery of Property to
Lessee
PLAN CHECK
Submittal of interior
improvement plans for Plan
Check Review
Return of interior improvement
plans with corrections by
Building Department
Submittal of interior
improvement plans with
corrections made
Notification of Lessee that
building permits can be issued
Lessee pulls building permits
MINOR EXTERIOR MODIFICATIONS
Submittal of minor exterior
modifications
Approval of minor exterior
modifications
4
Date
Upon approval of by the Board
of Directors of the San Juan
Capistrano Community
Redevelopment Agency
Within 5 days of execution of
lease
Within 15 days of execution of
lease
20 days after submittal
5 days after return
10 days after submittal
5 days after notification
Within 15 days of execution of
lease
Within 15 days of submittal -
Planning Director approval and
agendized on next Planning
Commission Consent Calendar
CONSTRUCTION
Commencement of construction
Completion of construction
Certificate of Occupancy
5 days after notification
90 days after Commencement of
construction
Within 10 days of final
inspection after all applicable
Department have signed off
Certificate of Occupancy
confirming all conditions have
been met, no later than 100
days after commencement of
construction
EXHIBIT C
CONSTRUCTION AND ACCEPTANCE OF PREMISES
1. PLANS AND SPECIFICATIONS.
After the execution of the Lease, Tenant shall cause an architect
selected by Tenant to prepare at Tenant's expense and within fifteen (15) days
to deliver to Landlord fully dimensioned 1/4 -inch scale plans indicating the
specific requirements of the interior space, showing clearly the store fronts,
interior partitions, trade fixture plans, lighting, electric outlets, floor
coverings, exterior signs, and other specific requirements of Tenant, all in
conformity with Tenant's Work under Paragraph 7 below. These plans shall be
subject to Landlord's approval. These Tenant plans, after being approved,
will be hereinafter called "approved final construction Tenant plan." If for
any reason whatsoever, a final construction Tenant plan is not approved
according to the City of San Juan Capistrano's review process for interior
improvements within 60 days after the date of this Lease, Landlord may
terminate this Lease by notice to that effect to Tenant or complete premises
typical to Landlord's specified requirements in which case Tenant will absorb
all costs relating to Tenant construction requirements. Tenant shall be
responsible for any and all fees and deposits associated with the planning and
engineering review process, at its sole cost and expense.
2. EXTERIOR IMPROVEMENTS.
Tenant has the right any time during the lease term to make application
to Landlord and the City of San Juan Capistrano (the "City") for exterior
improvements to the premises. Any and all exterior modifications must be
approved according to the City's review process. Tenant shall be responsible
for any and all fees and deposits associated with such review process, at its
sole cost and expense.
3. DELIVERY OF PREMISES.
Provided that the certificate of insurance provided for in Section 9.5,
above, has been received by Landlord, Landlord shall tender delivery of the
premises to Tenant for its fixturization and/or its tenant work within five
(5) days after the Date of Execution.
4. INSTALLATION OF TENANT'S WORK.
4.1 Tenant, upon delivery of possession, shall thereupon immediately
proceed with due diligence, at its own expense, to install therein Tenant's
property (meaning all items of Tenant's Work and Tenant's trade fixtures,
equipment and merchandise) without interference with other work, if any, and
in compliance with all reasonable rules which Landlord may make. Tenant shall
upon final completion of its work furnish Landlord with all certificates and
approvals relating to any work or installations done by Tenant that may be
required by any governmental or insurance requirements. Landlord shall have
no responsibility for any loss of or damage to any of Tenant's property so
installed or left on the premises. Tenant's entry prior to the commencement
of the term of this Lease shall be subject to all of the provisions of this
Lease other than the payment of rent and other charges to Landlord; and at all
times after such entry, Tenant shall maintain or cause to be maintained in
effect insurance complying with the provisions of this Lease, notwithstanding
the fact that the term of this Lease shall not then have commenced.
Landlord's Initials-
Tenant's Initials:
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0787q/2299/000 C-1
5. ACKNOWLEDGMENT OF CONDITION OF PREMISES.
Tenant agrees that it has accepted the premises in its "as -is"
condition, and Tenant hereby waives any right or claim against Landlord for
any cause, directly or indirectly, arising out of the condition of the
premises, appurtenances thereto, or the improvements, or equipment therein,
and Landlord shall not be liable for any latent or patent defects therein.
6. PAYMENT FOR CHANGES IN WORK.
No changes, modifications or alterations in the approved final
construction Tenant plan can be made without the written consent of Landlord.
Any additional charges, expenses or costs, including any increased fees which
Landlord may be required to pay for architectural, engineering and other
similar services arising by reason of any subsequent change, modification or
alteration in the approved final construction tenant plan made at the request
of Tenant, shall be at the sole cost and expense of Tenant and shall be paid
by Tenant to Landlord before the performance of the work requested by Tenant.
7. TENANT'S CONSTRUCTION.
No work is to be performed by Landlord. All items of work shall be
provided by Tenant at Tenant's expense, and is called "Tenant's Work."
Tenant's Work shall be in accordance with the schedule attached as Exhibit B
to the Lease.
LANDLORD
TENANT
SAN JUAN CAPISTRANO COMMUNITY TIM HOLSTEN, a married man
REDEVELOPMENT AGENCY
Atter
l
J
Agency Sec tary
(Seal)
Director
03/24/92
0787q/2299/000 C-2
Tim Holsten
Fxhi' " t D
GUARANTEE OF LEASE
THIS GUARANTEE OF LEASE (this "Guarantee") is entered into this 7th day
of April 192 by and between Tim Holsten
("Guarantor"), and SAN JUAN
CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY ("Agency").
I. RECITALS
A. A certain lease dated April 7. 1992 was executed by and between
Agency, therein referred to as "Landlord", and Tim Holsten, a married man,
therein and hereinafter referred to as "Tenant", covering certain premises in
the City of San Juan Capistrano, County of Orange, State of California
("Lease").
B. Tenant desires to assign the Lease to San Juan Saloon Building, a
California limited partnership ("Assignee").
C. Agency, as Landlord under the Lease, requires as a condition to its
consent to the assignment that the undersigned guarantee the full performance
of the obligations of Tenant or Assignee under the Lease.
C. Guarantor is desirous that Landlord consent to the assignment of the
Lease to Assignee.
NOW, THEREFORE, in consideration of the consent by Agency to the
assignment of the Lease to Assignee, Guarantor hereby unconditionally
guarantees the full performance of each and all of the terms, covenants and
conditions of the Lease to be kept and performed by Tenant or Assignee, as
hereinafter provided.
II. TERMS
A. GUARANTOR'S OBLIGATIONS:
1. GUARANTEE OF TENANT'S PERFORMANCE. Guarantor unconditionally
guarantees to Agency the full and complete performance of each and all of
the terms, covenants and conditions of the Lease and any amendments
thereto required to be performed by Tenant including, but not limited to,
the payment of all fixed minimum rent and and any and all other charges or
sums or any portion thereof to accrue or become due from Tenant or
Assignee to Agency pursuant to the terms of the Lease ("Monetary Sums").
In no event shall the Monetary Sums be greater than Assignee's liability
under the Lease, provided that no disability (including, but not limited
to, a bankruptcy) of Assignee shall reduce or excuse Guarantor's
obligations for payment of the Monetary Sums.
2. TENANT'S FAILURE TO PERFORM. If Tenant or Assignee fails to pay
any of the Monetary Sums when due under the Lease, then, within thirty
(30) days of written notice to Guarantor by Agency, Guarantor, by
certified or cashier's check, shall pay to Agency or Agency's designated
agent any such Monetary Sums as may be due and owing from Tenant or
Assignee to Agency's by reason of Tenant's or Assignee's failure to so
perform.
3. OTHER PROVISIONS. If Tenant or Assignee fails to perform any
covenants, terms or conditions of the Lease as required to be performed,
other than as provided for in Part II, Section A.2 of this Guarantee,
then, upon written notice to Guarantor by Agency, Guarantor shall commence
and complete performance of the conditions, covenants and terms within
five (5) business days after the date of Agency's written notice to
Guarantor of such failure by Tenant or Assignee to so perform; provided,
in the event the performance by Guarantor cannot be completed within five
(5) business days, Guarantor shall commence performance within that time
and diligently pursue same to completion within a reasonable period of
time.
4. ADDITIONAL DAMAGES AND INTEREST. In addition to the payment of
the Monetary Sums and the performance of any and all other provisions,
conditions and terms of the Lease which may be required of Guarantor by
reason of Tenant's or Assignee's failure to perform, Guarantor agrees to
pay to Agency any and all reasonable and necessary incidental damages and
expenses incurred by Agency as a direct and proximate result of Tenant's
failure to perform, which expenses shall include reasonable attorneys'
fees. Guarantor further agrees to pay to Agency interest on any and all
sums due and owing Agency by reason of Tenant's or Assignee's failure to
pay same at the highest rate allowed by law at the time of payment.
B. AGENCY'S RIGHTS:
1. ENFORCEMENT. Notwithstanding the provisions of Section A above,
Agency reserves the right, in the event of any failure of Tenant or
Assignee to pay the Monetary Sums, to proceed against Tenant, Assignee or
Guarantor, or both, and to enforce against Guarantor or Tenant or
Assignee, or all of them, any and all rights that Agency may have to the
Monetary Sums with thirty (30) days prior written notice to Guarantor
pursuant to a demand made on Guarantor. Guarantor understands and agrees
that its liability under this Guarantee shall be primary and that, in any
right of action which may accrue to Agency under the Lease or this
Guarantee, Agency, at its option, may proceed against Guarantor without
having taken any action or obtained any judgment against Tenant or
Assignee.
2. DELAY IN ENFORCEMENT. Guarantor understands and agrees that any
failure or delay of Agency to enforce any of its rights under the Lease or
this Guarantee shall in no way affect Guarantor's obligations under this
Guarantee.
C. GUARANTOR'S WAIVERS:
Guarantor hereby waives the following:
1. Any and all presentments and notices of nonpayment or
nonperformance;
2. All defenses based upon any disability of Tenant, Assignee,
release of Tenant's or Assignee's liability for any reason or any statute
of limitations controlling obligations accruing under the Lease or this
Guarantee;
3. Any and all rights it may have now or in the future to require
or demand that Agency pursue any right or remedy Agency may have against
Tenant, Assignee or any third party;
4. Any and all rights it may have to enforce any remedies available
to Agency against Tenant, or Assignee now or in the future;
5. Any and all right to participate in any security deposit held by
Agency under the Lease now or in the future;
6. The right to require Agency to proceed against Tenant or
Assignee, exhaust any security which Agency now holds or may hold in the
future from Tenant or Assignee or pursue any other right or remedy
available to Agency; and
7. The provisions of Sections 2809, 2810, 2819, 2845 and 2850 of
the California Civil Code.
D. EXTENSIONS, AMENDMENTS, ASSIGNMENT OR SUBLEASE:
Guarantor understands and agrees that its obligations under this Guarantee
shall not be affected in any way by any extension, amendment or assignment or
subletting of the Lease and in no way shall any such occurrence release or
discharge Guarantor from its obligations under this Guarantee.
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0787q/2299/000 -2-
E. TENANT'S OR ASSIGNEE'S INSOLVENCY:
1. ASSUMPTION OF LIABILITY. Guarantor understands and agrees that,
if Tenant or Assignee becomes insolvent or is adjudicated bankrupt,
whether by voluntary or involuntary petition, or if any bankruptcy action
involving Tenant or Assignee is commenced or filed, or if a petition for
reorganization, arrangement or similar relief is filed against Tenant or
Assignee, or if a receiver of any part of Tenant's or Assignee's property
or assets is appointed by any court, Guarantor will pay to Agency the
amount of all accrued, unpaid and accruing Monetary Sums to the date when
the trustee or administrator accepts the Lease and commences paying same;
provided, however, at such time as the trustee or administrator rejects
the Lease, Guarantor shall pay to Agency all accrued, unpaid and accruing
Monetary Sums under the Lease for the remainder of the Term.
2. AGENCY'S OPTION. Pursuant to the provisions of Part II,
Section E.1 above, at the option of Agency as to the amounts owing for the
unexpired term of the Lease if the Lease is rejected, Guarantor shall
either:
a. Pay to Agency an amount equal to the Monetary Sums which
would have been payable for the unexpired term of the Lease reduced
to its present day value; or
b. Execute and deliver to Agency a new lease for the balance of
the Term with the same terms and conditions as the Lease and with
Guarantor as tenant thereunder.
3. EFFECT OF OPERATION OF LAW. Any operation of any present or
future debtor's relief act or similar act or law or decision of any court
shall in no way affect the obligations of Guarantor, Tenant or Assignee to
perform any of the terms, covenants or conditions of the Lease or of this
Guarantee.
III. MISCELLANEOUS
A. NOTICES. Any and all notices required under this Guarantee shall be
made in writing and shall be mailed, first-class, certified mail, postage
prepaid, return receipt requested to the party who is designated to receive
the notice at the address set forth after its respective signature on this
Guarantee, or at such other place as may be designated by that party from time
to time upon written notice to the other party.
B. EXTENT OF OBLIGATIONS. Notwithstanding anything to the contrary in
this Guarantee, it is understood and agreed that this Guarantee shall extend
to any and all obligations of Tenant or Assignee to Agency under the Lease and
any amendments to the Lease.
C. SUBROGATION. Guarantor understands and agrees that it shall have no
right of subrogation against Tenant or Assignee until such time as all of
Tenant's or Assignee's obligations to Agency have been fully paid and
discharged.
D. ASSIGNABILITY. This Guarantee may be assigned in whole or in part by
Agency upon written notice to Guarantor.
E. SUCCESSORS AND ASSIGNS. The terms and provisions of this Guarantee
shall be binding upon and inure to the benefit of the successors and assigns
of the parties hereto.
F. MODIFICATION OF GUARANTEE. This Guarantee constitutes the full and
complete agreement between the parties hereto and it is understood and agreed
that the provisions hereof may only be modified by a writing executed by the
parties hereto.
G. NUMBER AND GENDER. As used herein, the singular shall include the
plural and, as used herein, the masculine shall include the feminine and
neuter genders.
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H. CAPTIONS/HEADINGS. Any captions or headings used in this Guarantee
are for reference purposes only and are in no way to be construed as part of
this Guarantee.
I. INVALIDITY. If any term, provision, covenant or condition of this
Guarantee is held to be void, invalid or unenforceable, the remainder of the
provisions hereof shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
J. JURISDICTION. The validity of this Guarantee and of any of its terms
or provisions, as well as the rights and duties of the parties hereunder,
shall be interpreted and construed pursuant to and in accordance with the laws
of the State of California.
K. ATTORNEYS' FEES. In the event it becomes necessary to judicially
enforce any of the terms and provisions of this Guarantee, the prevailing
party shall be entitled to its reasonable costs and expenses incurred with
respect thereto including, but not limited to, reasonable attorneys' fees and
such other costs and expenses as may be allowed by law.
L. GUARANTEE OF PAYMENT AND PERFORMANCE. It is understood and agreed
that this Guarantee is unconditional and continuing and is a guarantee of
payment and performance and not of collection.
M. JOINT AND SEVERAL OBLIGATION. If Guarantor is more than one (1)
person, the obligations of the persons comprising Guarantor shall be joint and
several and the unenforceability of this Guarantee or Landlord's election not
to enforce this Guarantee against one (1) or more of the persons comprising
Guarantor shall not affect the obligations of the remaining persons comprising
Guarantor or the enforceability of this Guarantee against such remaining
persons.
IN WITNESS WHEREOF, the undersigned have executed this Guarantee and made
it effective on the date first written above.
GUARANTOR
Address for notices:
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