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HomeMy WebLinkAbout2022 CON TC Construction Co, Inc. - Lease 249 Highland Ave.LEASE (249 Highland Avenue) THIS LEASE ("Lease") is dated as of the 1st day of November, 2022, by and between The City of National City ("Landlord"), and TC Construction Co, Inc, ("Tenant"). 1. Definitions. "Commencement Date" means November 1, 2022. "Hazardous Material" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the State of California or the United State Government. Provided, however, the term "Hazardous Materials" shall not include substances typically used in the ordinary course of operating and maintaining construction storage facilities in California. "Landlord" means the City of National City. "Premises" means the real property generally located at 249 Highland Avenue, National City, California. "Tent" shall have that meaning ascribed to it in Section 4(a) of this Lease. "Tenant" means TC Construction Co, Inc., a California corporation. "Term" shall have that meaning ascribed to it in Section 3(a) of this Lease., 2. Lease of the Premises. Landlord leases to Tenant and Tenant leases from Landlord the Premises. Tenant hereby agrees and acknowledges es that Tenant is leasing the Premises "as -is" from Landlord. Without limiting the generality of the foregoing, Tenant shall be solely responsible for determining the condition of the Premises. Landlord shall have no obligation to improve the Premises. 3. Tern. (a) 'err. Unless sooner terminated pursuant to the terms of this Lease, the term of this Lease shall initially be for one (1) year beginning on the Commencement Date (Le., November 1, 2022) and terminating at midnight on October 31, 2023 ("Term"). (b) Extension Option. This Lease may be extended beyond its initial term upon approval by the City Council. 4. Rent. (a) Monthly Rent. Tenant agrees to pay Rent to the Landlord each and every calendar month during the Term. The first month's Rent shall be payable concurrently with the Tenant's execution and delivery of this Lease to the Landlord. The Rent shall be $3,000.00 per month, in advance on or before the first 1 st) day of each month. All Rent may be paid by check and delivered personally or by first class nail to Landlord at 1243 National City Boulevard, National City, California, 91950. (b) Delinquent Rent. (1) Interest. Any amount due from Tenant to Landlord which is not p aid when clue shall bear interest at ten percent (10%) per annum from the date such payment is due until paid. The interest required to be paid by Tenant pursuant to this Section (b)(1 shall constitute additional Rent under this Lease. (2) Late Charges. Tenant hereby acknowledges that in addition to lost interest, the -late payment by Tenant to Landlord of Rent or any other sums due hereunder will cause Landlord to incur other costs not contemplated in this Lease, the exact amount ofwhich will be extremely difficult and impracticable to ascertain. Such other costs include, but are not limited to, processing, administrative and accounting costs. Accordingly, if any installment of Rent or other sum due from Tenant to Landlord is not paid when due, Tenant shall pay to Landlord, immediately upon receipt of notice from Landlord, as additional Rent, a late charge equal to five percent (5%) of such overdue amount. The parties hereby agree that (i) such late charge represents a fair and reasonable estimate of the costs Landlord will incur in processing such delinquent payment by Tenant, (ii) such late charge shall be paid to Landlord as liquidated damages for each delinquent payment pursuant to California Civil Code Section 1671, and iii the payment of late charges and the payment of interest are distinct and separate from one another in that the payment of interest is to compensate Landlord for the use of Landlord's money by Tenant, while the payment of late charges is to compensate Landlord for the additional administrative expense incurred by Landlord in handling and processing delinquent payments. The late charge is not intended to compensate Landlord for the costs incurred by Landlord to handle NSF checks tendered by Tenant, and Landlord shall have the right to charge Tenant a NSF Fee. (3) No Waiver. Neither assessment nor acceptance of interest or late charges by Landlord shall constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of its other rights and remedies under this Lease. Nothing contained in this Section 4(b) shall be deemed to condone, authorize, sanction or grant to Tenant an option for the late payment of Rent or other sums due hereunder, and Tenant shall be deemed in default with regard to any such payments should the same not be made by the date on which they are due. . Alterations. (a) By Landlord. Landlord may make alterations or other changes to the Premises which Landlord determines in its sole and absolute discretion are necessary or desirable without notice to or consent of the Tenant so long as the same does not negatively impact the Premises or Premises or Tenant's use, occupancy and enjoyment thereof or Tenant's rights under this Lease. Tenant shall cooperate with Landlord if Landlord elects to make alterations or other changes to the Premises. (b) Tenant. Tenant shall not make any alterations to or install any fixtures on the Premises without Landlord's consent. Any alterations, improvements, fixtures or additions consented to by Landlord in writing as provided in this Section 5(b), shall be constructed without cost to Landlord in a first-class, good, workmanlike and defect -free manner by licensed contractors with experience in construction of the proposed alterations which is approved by Landlord, which approval may be withheld by Landlord in its reasonable discretion. Tenant shall obtain all necessary permits required for any such fixtures and shall comply with all applicable laws, regulations, ordinances, and codes. After receiving written consent .from the Landlord and prior to making any alterations, improvements, fixtures or additions, Tenant shall apply for and obtain, any and all permits or licenses required by applicable governmental authorities necessary or desirable for Tenant to construct and install the sane. Landlord shall be deemed to have rejected any subsequent improvement proposed by Tenant unless Landlord approves of Tenant's proposal in writing within thirty (30) days of receiving Tenant's proposal and request for consent. Tenant shall be solely responsible for the effect of any alterations made by Tenant on the Premises, regardless of Landlord's consent to such alterations. Notwithstanding anything to the contrary contained herein, in no event shall Landlord be responsible for repair of or liability to Tenant for any defects in any alterations, improvements, fixtures or additions to the Premises. Tenant shall give Landlord thirty days advance notice before beginning any work on alterations to allow Landlord to file a "Notice of Non -Responsibility" and take any other actions in anticipation of commencement of any alterations. Tenant shall deliver to Landlord fifteen 1 days in advance of commencement of any alterations, a performance and payment bond in a penal sum of one hundred twenty percent 120% of the cost estimate for the alterations. The performance and payment bond must be approved by the Landlord. Upon completion of the alterations, Tenant shall provide Landlord with a complete set of "as -built" plans. (c) Lien Free Construction. All alterations, improvements and additions shall be constructed free and clear of mechanics' and rnaterialmen' liens; provided that if any such lien is filed, Tenant shall remove and discharge the sane within ten (10) business days of written notice from the Landlord. Time is of the essence. Failure to timely remove the lien shall constitute a "Material Default" under .the terms of this Lease. Notwithstanding the foregoing, Tenant may contest the mechanics' and/or materialmens' liens in good faith, at Tenant's own expense, by appropriate proceedings, provided Tenant posts a bond and removes such lien or stays enforcement thereof. (c) Removal of Improvements. Tenant shall remove from the Premises all of Tenant's personal property, including without limitation furnishings, machinery, trade fixtures, equipment, and improvements on or before the expiration of the Term. Tenant shall repair any damage to the Premises caused by such removal, including without limitation patching and filling holes. 6. Use, (a) P rmitt _ s , Tenant represents and warrants to Landlord that Tenant shall use the Premises only for staging materials (pipe, Fittings, Rock and sand) as well as construction equipment (excavator, skid -steer, loaders etc.). Tenant shall operate the Premises in accordance with all applicable legal requirements applicable to Tenant's use and occupancy of the Premises. (b) Additional_Lise_Limitations. Tenant shall not or allow the Premises to used for any immoral or unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or permit to be committed any waste in or upon the Premises. (c) Compliance With Laws, Covenants and Rea uirerents. Tenant represents and warrants to Landlord, that Tenant, its agents, servants, employees, invitees and licensees, shall comply with, and shall not use the Premises in any way (or permit or suffer anything to be done in or about the Premises which will conflict with: 0 any law, statute, ordinance or governmental rule or regulation affecting the Premises, now in force or which may be hereafter promulgated, including, but not limited to, the provisions of any city or county zoning codes regulating the use of the Premises or any transportation management program established by any governmental or quasi -governmental entity that is either voluntarily or involuntarily made applicable to the Premises; (ii) any covenant, condition or restriction (whether or not of public record) affecting the Premises, now in force or which may hereafter be enacted or promulgated; iii the Americans With Disabilities Act, including, without limitation, the architectural barrier removal requirements of said Act; (iv) all requirements, now in force or which may hereafter be in force, of any board of fire underwriters or other similar body now or hereafter constituted relating to or affecting the condition, use or occupancy of the Premises; or any licensing requirements of any city, county, or other governmental or quasi -governmental entity regulating Tenant's use of the Premises (hereinafter collectively referred to as "Applicable Laws, Covenants and Requirements"). . Tenant shall promptly notify Landlord of and shall promptly provide Landlord with true, correct and legible copies of all orders, reports, notices and correspondence (including those which may be considered confidential) of or concerning the investigation, compliance, and corrective actions and all complaints, pleadings, and other legal documents filed against Tenant relating to Tenant's failure to comply with Applicable Laws, Covenants and Requirements. Tenant shall, at its sole cost and expense, promptly comply with all Applicable Laws, Covenants and Requirements in so far as they relate to the specific manner of Tenant's use and occupancy of the Premises. The judgment of any court of competent jurisdiction or the admission by Tenant in any action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any Applicable Laws, Covenants and Requirements, shall be conclusive of the fact as between Landlord and Tenant. (d) Hazardous Material. (1) Tenant hereby agrees that neither Tenant, nor Tenant' s agents, employees, contractors, invitees or licensees will engage in any activity in, on or about the Premises, nor permit others to engage in any such activity, which will result in the Premises containing any Hazardous Material. If at any time it is determined that Tenant or Tenant's agents, employees, contractors, invitees or licensees, have been responsible for the Premises containing any Hazardous Material, then Tenant shall be solely responsible for and shall pay for all costs incurred in connection with the removal of said Hazardous Materials. Tlie obligations on the part of Tenant set forth in this Section 6(d) shall survive the expiration of the Terrn of this Lease or the exercise by.Landlord of any of Landlord's remedies under this Lease. 1 (2) Tenant shall promptly comply with the requirements of Section 25359.7(b) of the California Health and Safety Code and/or any successor or similar statute to provide Landlord with written notice that any Hazardous Material has come or will come to be located on or beneath the Premises if Tenant discovers or has reasonable cause to believe of the presence of such materials. Should Tenant fail to so notify Landlord, Landlord shall have all rights and remedies provided for such a failure by such Section .b in addition to all other rights and rernedies which Landlord may have under this Lease or otherwise. Tenant shall not take any remedial action related to Hazardous Materials located in or about the Premises and shall not enter into a settlement, consent decree or compromise in response to any claim related to Hazardous Materials without the prior written consent of Landlord, which may be withheld by Landlord in its sole and absolute discretion. Tenant shall immediately notify Landlord in writing of: i any enforcement, clean-up, removal or other governmental action instituted, completed or threatened with regard to Hazardous Materials at the Premises ofwhich Tenant is directly notified; (ii) any claim made or threatened by any person against Tenant, Landlord or the Premises related to damage, contribution, cost recovery, compensation, loss or injury resulting from or claimed to result from any Hazardous Materials of which Tenant is directly notified; and(Hi) any reports made to any environmental agency arising out of or in connection with any Hazardous Materials at or removed from the Premises, including any complaints, notices, warnings or assertions ofany violation in connection therewith of which Tenant is directly notified. (3) In addition to any other indemnity contained in this Lease, Tenant shall defend, indemnify and hold Landlord harmless from and against .any and all losses, liabilities, general, special, consequential a cl or incidental damages, injuries costs, expenses, claims of. any and every kind whatsoever (including, without limitation, court costs, reasonable attorneys' fees, damages to any person, the Premises or loss of rents) which at any time or from time to time may be paid, incurred or suffered by or asserted against Landlord with respect to, or as a direct or indirect result of: (0 the breach by Tenant of any of the covenants set forth in this Section 6(d); or (ii)the presence on, under or the escape, seepage, leakage, spillage, discharge, emission, release from, onto or into the Premises of any Hazardous Material to the extent directly or indirectly caused or allowed by Tenant, or any agent, employee, contractor, invitee or licensee of Tenant. Tenant's liability under this Section 6(d) shall extend to any and all Hazardous Materials whether or not such substance was defined, recognized, or known or suspected of being hazardous, toxic, dangerous or wasteful at the time of any act or omission giving rise to Tenant's liability. Tenant's indemnification obligations under this Section (6)(d)(3) shall survive the expiration or earlier termination of this Lease. (e) Compliance With Americans With Disabilities Act and Other Disabilit Health and Safety Requirements. . Tenant shall comply with all requirements of the ADA, Title 24 and any other Applicable Laws, Covenants and Requirements relating to disabled access and facilities, upgraded fire safety equipment and seismic protection, and other disability and health and safety regulations (collectively, "Disability and Safety Laws") with respect to the Premises, including without limitation, any tenant improvement work performed by Tenant. Tenant hereby agrees to indemnify, defend and hold Landlord harmless from and against all liabilities, losses, demands, actions, expenses or claims, including attorneys' fees and court costs to the extent directly arising out of or in any manner connected with Tenant's failure to comply with Disability and Safety Laws, including without limitation, the costs of making any alterations, renovations or accommodations required by Disability and Safety Laws or any v i al enforcement agency, to the extent compliance is directly related to tenant improvement work performed by Tenant. Tenant's indemnification obligations under this Section 6(e) shall survive the expiration or earlier termination of this Lease. (f) Additional Prohibited Actions of Tenant. Tenant shall not commit or permit the commission of any acts on the Premises, nor use or permit the use of the Premises in any way that: (i) increases the existing rates for, or causes cancellation of, any fire, casualty, liability, or other insurance policy insuring the Premises; (ii) violates or conflicts with any law, statute, ordinance, or governmental rule or regulation, whether now in force or hereinafter enacted, governing the specific manner of Tenant's use of the Premises; or (iii) constitutes the commission of waste on the Premises or the commission or maintenance of a nuisance as defined by the laws of the State of California. (g) Inspection of Premises. Landlord shall have the right toenter upon the Premises at all reasonable times for the purpose of inspecting the condition of the Premises and to determine whether Tenant is complying with its obligations hereunder, to supply any service to be provided by Landlord to Tenant hereunder, to exhibit the Premises to prospective purchasers, mortgagees or tenants, to post notices of nonresponsibility, and to repair the Premises, without abatement of Rent. Tenant hereby waives any claim for damages 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. Any entry to the Premises or portions thereof by Landlord 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, actual or constructive, of Tenant from the Premises, or any portion thereof. Any such inspections shall be performed with as little disturbance and inconvenience to Tenant as reasonably possible. 7. Services and Utilities. Tenant shall be responsible for electrical, gas and water services to the Premises if any exist. Landlord shall not be liable for and Tenant shall not be entitled to any abatement or reduction. of Rent by reason of Landlord's failure to furnish any utilities and services. Landlord shall not be liable under any circumstances for loss or injury to property or business, however occurring, through or in connection with or incidental to Landlord's failure to furnish any of said service or utilities. 8. Taxes. Tenant shall be liable for and agrees to pay all taxes levied upon its personal property, leasehold improvements, additions, alterations and fixtures, including trade fixtures and inventory, located on the Premises or elsewhere. Tenant shall pay directly to the respective taxing authorities all •possessory interest tax, if any, levied against the Premises during the Term. Landlord shall not be required to pay any penalty, interest or cost resulting from Tenant's failure to pay non-exempt taxes with respect to Premises, Tenant's personal property, leasehold improvements, additions, alteration and fixtures and/or the delinquent payment of such taxes by Tenant. If a separate tax statement is not available for the Premises, the amount of non-exempt taxes, if any, for which Tenant shall be liable under this Lease shall be a percentage of the total amount of such taxes levied against the Premises, which percentage shall be determined by dividing the amount of square feet in the Premises by the total amount of square feet in the Premises subject to such taxes. Tenant shall pay and be liable for any tax or fee (now or hereafter imposed by any governmental entity) applicable to or measured by or on the Rents or any other charges payable by Tenant under this Lease, including, without limitation, any gross income tax, gross receipts tax or excise tax with respect to the receipt of such Rent or other charges on the possession, leasing, operation, use or occupancy of the Premises, and specifically including any commercial rental tax of the City of National nal City, if any, that may now or hereafter be unposed. Tenant acknowledges that Landlord is a public entity and that possessory interest taxes, if any, will be assessed against the Tenant for its space Tenant shall pay all such taxes. 9. Maintenance. (a) Tenant's Maintenance of the Premises. Tenant shall keep the Premises in a neat, clean and orderly condition at all times during the Tern, and shall not permit rubbish, waste or garbage, to accumulate at any time. Tennant shall control the dust generated from the use of the property from affecting neighboring properties. Tenant shall not commit or permit any waste of the Premises or any acts to be done in violation of any laws or ordinances. Tenant shall not use or permit the use of the Premises for any illegal purposes. (b) . ep_air _ of the Premises. Tenant shall make all repairs and replacements to the Premises, as and when necessary to preserve, maintain and repair (less normal wear and tear) the Premises and every part thereof. (c) Landlord's .Right to_ Malc Repairs,. If Tenant fails to maintain the Premises as required by this Lease or fails to comply with any applicable laws, regulations or requirements as required by this Lease, then thirty days following written notification to Tenant (except in the case of an emergency, in which case no prior notification shall be required), Landlord shall have the right, but not the obligation, to enter the Premises and to do such acts and expend such funds at the expense of Tenant as are required to place the Premises in the condition required by this Lease. Any amount so expended by Landlord shall be paid by Tenant within thirty days after demand. Landlord shall have no liability to Tenant for any reasonable inconvenience or interference with the use of the Premises by Tenant resulting from Landlord's performance of such maintenance or repair work. 10. Casualt r ar a e and Casualt Insurance. (a) Casualties. In the event the Premises, or any portion thereof, is damaged or destroyed by any casualty, then Landlord may, at its option, either 1 rebuild or restore the Premises, as the case may be, and repair the damaged portion thereof, or elect not to rebuild or restore and this Lease shall then terminate. To the extent that insurance proceeds must be paid to a mortgagee or beneficiary under, or must be applied to reduce any indebtedness secured by, a mortgage or deed of trust encumbering the Premises, such proceeds, for the purposes of this Section 10(a), shall be deemed not available to Landlord unless such mortgagee or beneficiary permits Landlord to use such proceeds for the rebuilding, restoration, and repair ofthe Premises. Notwithstanding the foregoing, Landlord shall have no obligation to repair any damage to, or to replace any of, Tenant's personal property, furnishings, fixtures, equipment or other such property or effects of Tenant. (b) Minor Casualties. If the Premises are not rendered substantially unfit for the occupancy or use herein contemplated as the result of any insured casualty, Landlord shall promptly and diligently restore the Premises at Landlord's expense to the condition existing prior to the occurrence of the casualty and the Rent shall not abate during such restoration period, provided the Landlord is prompt and diligent in connection with the restoration. (c) of Rent. Provided this Lease is not terminated as provided in Section 10(a), above, Tenant shall be entitled to an abatement of Rent by reason ofthe damage to destruction of the Premises, only to the extent that Tenant does not have reasonable access to the Premises, in which event the Rent shall abate in the proportion which the approximate area of the damaged or destroyed portion of the Premises bears to the total area of the Premises commencing upon the date of the damage to or destruction of the Premises has occurred until substantial completion of the repair of such damage or destruction. (d) Te.ant's Waiver of Civil Code Sections 1932 and 1933 . Tenant's right to terminate this Lease in the event of any damage or destruction to the Premises is governed by the terms of this Section 10 and therefore Tenant hereby expressly waives the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4, of the California Civil Code, and any and all laws, whether now or hereafter in force, whether created by ordinance, statute, judicial decision, administrative rules or regulations, or otherwise, that would cause this Lease to be terminated, or give Tenant a right to terminate this Lease, upon any damage to or destruction of the Premises that occurs. 11. Waiver of Subrogation. If either party sustains loss or damage to the Premises or the fixtures, goods, wares, merchandise or any other property located thereon, from which it is protected by an insurance policy, then, to the extent tliat such party is so protected, it waives any right of recovery from the other party. Bach party agrees immediately to give to each insurance company which has issued to it a policy of fire and extended coverage property insurance written notice of the terms of such mutual waivers, and to cause such insurance police' to be properly endorsed, if necessary, to prevent the invalidation of such insurance coverage by reason of such waivers. 12. Insurance. (a) Tenant Insurance Requirements, Tenant agrees, at Tenant's sole cost and expense, to maintain in force continuously throughout the Term: (1) Commercial general public liability and property damage insurance covering the Premises with limits of not less than 2,000,O00 per occurrence and $2,000,000.00 aggregate covering all bodily injury and property damage arising out of its operations, work, or performance under this Agreement. The policy shall name the Landlord and its officers, agents, employees, and volunteers as additional insureds, and a separate additional insured end rsernent shall be provided. The general aggregate limit must apply solely to this "project" or "location". The "project" or "location" should be noted with specificity on an endorsement that shall be incorporated into the policy. Upon receipt of written request therefor, Tenant shall furnish Landlord a certificate of liability insurance from the insurer evidencing such coverage as required by this Section 12 a 1 ; (2) Worker's compensation insurance in an amount sufficient to meet statutory requirements covering all of Tenant's employees and employers' liability insurance with limits of at least $1,000,000 per accident. In addition, the policy shall be endorsed with a waiver of subrogation in favor of the City. Said endorsement shall be provided prior to commencement of work under this Agreement; and (3) Fire, extended coverage, and vandalism and malicious mischief insurance, insuring the personal property, furniture, furnishings and fixtures belonging to Tenant located on the Premises, (b) Additional Insurance Requirements. Each insurance certificate for casualty insurance shall indicate that the insurer waives its rights of subrogation against the other party. In addition, all insurance policies obtained by Tenant shall be written as primary policies, non- contributing with or in excess of any coverage which Landlord may carry, with loss payable clauses in favor of Landlord and naming Landlord and any lender of Landlord as additional insureds. The liability limits of the above -described insurance policies shall in no way limit the liability of any .party under the terms of this Lease. If Tenant fails to maintain and secure the insurance coverage required under this Section 12, Landlordshall have, in addition to all other remedies provided herein and by law, the right, but not the obligation, to procure and maintain such insurance, the cost of which shall be due and payable to Landlord by Tenant on demand. No policy of insurance required pursuant to this Lease shall contain a deductible exceeding Ten Thousand Dollars 10,00 per occurrence. Tenant shall be solely responsible for the payment of any deductible. 13. Jndeninit. Tenant agrees to indemnify, defend and hold Landlord entirely harmless from and against all liabilities, losses, demands, actions, expenses or claims, including attorneys' fees, fees of experts and accountants and court costs, for injury to or death of any erso . or for damages to any property arising out of or in any manner connected with (i) the use, occupancy or enjoyment of t the Premises by Tenant and/or any sublessee and their agents, employees, invitees, licensees or contractors (the "Tenant's Agents") or any work, activity or other things allowed or suffered by Tenant or Tenant's Agents to be done in or about the Premises; li any breach or default in the performance of any obligation of Tenant under this Lease; and (iii) any act or failure to act, whether negligent or otherwise tortious, by Tenant or Tenant's Agents on or about the Premises; provided, however, that Tenant shall not be obligated to so indemnify Landlord to the extent any such matters arise from or are caused by the willful misconduct or gross negligence of Landlord, If Tenant is required to defend Landlord, then Landlord shall be entitled to select its own defense counsel, and Tenant shall pay on behalf of, or to, Landlord all defense expenses incurred by Landlord. Except to the extent such matters arise from or are caused by Landlord's gross negligence or willful misconduct, Tenant agrees that Landlord shall not be liable for injury to Tenant's business or loss of income therefrom. Tenant further agrees that Landlord shall not be liable in any event for injury to the person or property of Tenant or Tenant's Agents, whether such damage or injury is caused by or results from criminal acts, fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, heating, ventilation, air conditioning or lighting fixtures, or from any other cause, whether damage or injury results from conditions arising upon the Premises or from other sources or places appurtenant to the premises and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to Tenant. All property of Tenant kept or stored on the Premises shall be so kept or stored at the risk of Tenant only, and Tenant shall hold Landlord harmless from any claims arising out of damage to the same, including subrogation claims by Tenant's insurance carriers. The indemnifications contained herein shall survive the expiration or early termination of this Lease. 14. Assignment and. Sublease. Tenant shall not directly or indirectly, voluntarily or by operation of law, sublease, sell, assign, encumber, pledge or otherwise transfer or hypothecate all or any part of the Premises or this Lease, without the written consent of Landlord, which may be withheld by Landlord in its sole and absolute discretion. A change in the shareholders, partners or members of Tenant shall be considered a transfer of this Lease, requiring Landlord consent, as provided in this Section 14. Any assignment or sublease shall be subject to all of the terms, covenants and conditions of this Lease. Provided, however, that in no event shall any sublease, sale, assignment, encumbrances, pledge, transfer or hypothecation, relieve Tenant of its obligations hereunder. Tenant shall remain primarily liable for the terms, covenants and conditions to be complied with by Tenant hereunder whether this Lease is assigned, sublet and/or otherwise transferred, including without limitation the payment of Rent and the performance of the terms, covenants and conditions of this Lease. No withholding of consent by Landlord shall give rise to any claim by Tenant or any proposed assignee or entitle Tenant to terminate this Lease, to recover contract damages or to any abatement of Rent. In connection with any assignment or sublease of the Premises, as a condition to Landlord's consent, Tenant shall pay to Landlord as additional. Rent as and when received by Tenant an amount equal to all "Profit" (as hereinafter defined) derived from such assignment or sublease. "Profit" shall mean the difference between i the sum of any and all amounts payable by the proposed assignee or sublessee under the terms of the proposed assignment or sublease, and ii the sum of the Rent and other payment obligations payable to Landlord by Tenant under the terms of this Lease. For all purposes under this paragraph, a sub - sublease, assignment of sublease or any similar arrangement shall be considered a sublease. Tenant understands and acknowledges that the intent of the parties in negotiating this Lease was not to create any bonus value or allow Tenant to profit as a result of any favorable terms contained herein or any future changes in the market for the Premises. Tenant further acknowledges that any such value shall be paid to Landlord as set forth in this paragraph. Landlord reserves the right to review and approve financial statements for all prospective assignees and to approve the form of the assignment and/or sublease involved in each transaction, as a condition to the approval of any and all assignments and subletting. 15. Eminent Domain, (a) 'Total Taking. If all or substantially all of the Premises is condemned or taken in any manner for public or quasi -public use, including, but not limited to, a conveyance or assignment in lieu of the condemnation or taking, or if so much of the Premises is so taken or condemned so as to render the remaining portion of the Premises unusable by Tenant for parking purposes, as determined by the condemning authority, this Lease shall automatically terminate on the earlier of the date on which actu.al physical possession is taken by the condemnor or the date of dispossession of Tenant as a result ofsuch condemnation or other taking. (b) Partial Taking. If less than all or substantially all of the Premises is so condemned or taken, rendering the remaining portion of the Premises usable by Tenant for parking purposes, as determined by the condemning authority, this Lease shall automatically terminate only as to the portion of the Premises so taken as of the earlier of the date on which actual physical possession is taken by the condemnor or the date of dispossession of Tenant as a result of such condemnation or taking. If such portion of the Premises is condemned or otherwise taken so as to require, in the opinion of Landlord, a substantial alteration or reconstruction of the remaining portions thereof, this Lease may be terminated by Landlord, as of the date on which actual physical possession is taken by the condemnor or dispossession of Tenant as a result of such condemnation or taking, by written notice to Tenant within sixty days following notice to Landlord of the date on which such physical possession is taken or dispossession will occur. (c) Award. Landlord shall be entitled to the entire award in any condemnation proceeding or other proceeding for taking for public or quasi -public use, including, without limitation, any award ra.de for the value of the leasehold estate created by this Lease. No award for any partial or total taking shall be apportioned, and Tenant hereby assigns to Landlord any award that may be made in such condemnation or other taking, together with any and all rights of Tenant now or hereafter arising in or to the same or any part thereof. Although all damages in the event of any condemnation shall belong to Landlord whether such damages are awarded as compensation for diminution in value of the leasehold or to the fee of the Premises, Tenant shall have the right to claim and recover from the condemnor, but not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenant's own right on account of damages to Tenant's business by reason of the condemnation and for or on account of any cost or loss to which Tenant might incur to remove Tenant's merchandise, furniture and other personal property, fixtures, and equipment or for the interruption of or damage to Tenant' s business. (d) Rent Abatement. In the event of a partial condemnation or other taking that does not result in a termination of this Lease as to the entire Premises, the Rent and all other charges shall abate in proportion to the portion of the Premises taken by such condemnation or other taking. If this Lease is terminated, in whole or in part, pursuant to any of the provisions of this Section 15, all Rent and other charges payable by Tenant to Landlord hereunder and attributable to the Premises taken shall be paid up to the date upon which actual physical possession shall be taken by the condemnor. Landlord shall be entitled to retain the entire Security Deposit until such time as this Lease is terminated as to all of the Premises. (e) Temporary _Taking. If all or any portion of the Premises is condemned or -otherwise taken for public or quasi -public use for a limited period of time, this Lease shall remain in full force and effect and Tenant shall continue to perform all terms, conditions and covenants of this Lease; provided, however, the Rent and all other charges payable by Tenant to Landlord hereunder shall abate during such limited period in proportion to the portion of the Premises that is rendered unusable as a result of such condemnation or other taking. Landlord shall be entitled to receive the entire award made in connection with any such temporary condemnation or other taking. (f) Transfer of Landlord's Interest to .. Condemnor. Landlord may, without any obligation to Tenant, agree to sell and/or convey to the condemnor the Premises or any portion thereof, sought by the condemnor, subject to this Lease and the rights of Tenant . r and r, without first requiring that any action or proceeding be instituted or, if instituted, pursued to a judgment. 16. Attorneys' Fees. Tenant shall pay to Landlord all amounts for costs, including, but not limited to, attorneys' fees and amounts paid to any collection agency, incurred by Landlord in connection with any breach or default by Tenant under this Lease or incurred in order to enforce or interpret the terms or provisions of this Lease. Such amounts shall be payable upon demand. In addition, if any action shall be instituted by either Landlord or Tenant for the enforcement or interpretation of any of its rights or remedies in or under this Lease, the prevailing party shall be entitled to recover from the losing party all costs incurred by the prevailing party in said action and any appeal therefrom, including reasonable attorneys' fees and court. costs to be fixed by the court therein. 1 7. Default. (a) Tenant' s Default. The occurrence of any one or more of the following shall constitute a default hereunder by Tenant: (1) when due; Tenant fails to pay any Rent or other charges required to be paid by Tenant (2) Tenant fails to promptly and fully perform any other covenant, condition or agreement contained in this Lease and such failure continues for thirty days (or such shorter time provided herein) after written notice thereof from Landlord, provided, however, that if the term, condition, covenant or obligation to be performed by Tenant is of such nature that the same cannot reasonably be cured within thirty (30) days and if Tenant commences such performance within said thirty 0 day period and thereafter diligently undertakes to complete the same, then such failure shall not be a default hereunder. Such thirty day notice shall be in lieu of and not in addition to any notice required under California Code of Civil Procedure Section 1161; (3) A trustee, disbursing agent or receiver is appointed to take possession of all or substantially all of Tenant's assets or of Tenant's interest in this Lease and Tenant does not regain possession within sixty days after such appointment; Tenant makes an assignment for the benefit of creditors; or all or substantially all of Tenant's assets in, on or about the Premises or Tenant's interest in this Lease are attached or levied upon under execution (and Tenant does not discharge the same within sixty (60) days thereafter); (4) A petition in bankruptcy, insolvency or for reorganization or aiirangement is filed by or against Tenant pursuant to any federal or state statute and, with respect to any such petition filed against it, Tenant fails to secure a stay or discharge thereof within sixty days after the filing of the sane; (5) Immediately, in the event of any assignment, subletting or other transfer for which the prior written consent of the Landlord has not been obtained; (6) Immediately, in the event Tenant admits in writing its inability to pay its debts as they mature; or (7) Immediately, ediately, upon the suspension of Tenant's right to conduct its business, caused by the order, judgmerit, decree, decision or other act of any court or governmental agency. (b) Landlord's Remedies. Upon the occurrence of a default by Tenant that is not cured by Tenant within any applicable grace period, Landlord shall have the following rights and remedies in addition to all other rights and remedies available to Landlord at law or in equity: (1) The rights and remedies provided by California Civil Code Section 19 1, , which allows Landlord to continue this Lease in effect and to enforce all of its rights and remedies under this Lease, including the right to recover Rent and any other additional monetary charges as they become due, for as long as Landlord does not terminate Tenant's right to possession; provided, however, if Landlord elects to exercise its remedies described in this Section 17(b)(1) and Landlord does not terminate this Lease, and if Tenant requests Landlord's consent to an assignment of this Lease or a sublease of the Premises at such time as Tenant is in default, Landlord shall not unreasonably withhold its consent to such assignment or sublease. Acts of maintenance or preservation, efforts to relet the Premises or the appointment of a receiver upon Landlord's initiative to protect its interest under this Lease shall not constitute a termination of Tenant's right to possession; (2) The right to terminate this Lease by giving notice to Tenant in accordance with applicable law; (3) The right and power to enter the Premises and remove therefrom all persons and property, to store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant. Before retaking of any such property from storage, Tenant shall pay to Landlord, upon demand, all expenses incurred in such removal and all storage charges against such property. Any such property of Tenant not so retaken from storage by Tenant within thirty(30) days after such property is removed from the Premises shall be deemed abandoned and may be either disposed of by Landlord pursuant to Section 1988 of the California Civil Code or retained by Landlord as its own property. Landlord may from time to time sublet the Premises or any part thereof for such term or terms (which may extend beyond the Terra) and at such rent and such other terms as Landlord in its sole discretion may deem advisable, with the right to make alterations and repairs to the Premises. Upon each such subletting, Tenant shall be immediately liable for payment to Landlord of the cost of such subletting and such alterations and repairs incurred by Landlord, if any. Any amounts received by Landlord from such subletting shall be applied first toward the cost of any alterations or repairs made to the Premises in connection with such subletting; second, to payment of Rent and other monetary obligations due and unpaid hereunder, and the residue, if any, shall be held by Landlord and applied in payment of future Rent and other monetary obligations as the same become due hereunder. If Tenant has been credited with any rent to be received by such subletting and such rent shall not be promptly paid to Landlord by the subtenants, or if such rents received from such subletting during any month are less than those to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. No taking possession of the Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless written notice of such intention is given to Tenant. Notwithstanding any such subletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach; and (4) The right to have a receiver appointed for Tenant, upon application by Landlord, to take possession of the Premises and to apply any rental collected from the Premises and to exercise all other rights and remedies granted to Landlord for Tenant pursuant to this Section (c) Mitigation...of.Damages. Landlord and Tenant hereby agree that Landlord's obligation to mitigate damages after a default by Tenant under this Lease that results in Landlord regaining possession of all or part of the Premises shall be satisfied in full if Landlord undertakes to lease the Premises to another tenant (a "Substitute Tenant") in accordance with the following criteria: (1) Landlord shall have no obligation to solicit or entertain negotiations with any other prospective tenants for the Premises until Landlord obtains full and complete possession of the Premises including, without limitation, the final and unappealable legal right to relet the Premises free of any claim of Tenant; (2) Landlord shall not be obligated to lease the Premises to a substitute tenant for a. rent less than the .current fair market rent then prevailing for similar space in the same market area as the Premises; (3) Landlord shall not be obligated to enter into a new lease under terms and conditions that are unacceptable to Landlord; (4) Landlord shall not be obligated to enter into a lease with any proposed Substitute Tenant that does not have, in Landlord's reasonable opinion, sufficient financial resources or operating experience to operate the Premises; (5) Landlord shall not be required to accept any substitute tenant offered by Tenant or to observe any instructions given by Tenant regarding such reletting; (6) Landlord shall not be obligated to enter into a lease with any substitute tenant whose use would conflict with the uses allowed hereunder; and (7) Landlord shall not be required to expend any amount of money to alter, remodel, or otherwise make the remises suitable for use by a substitute tenant,,unless: (A) Tenant pays any such sum to Landlord in advance of Landlord's execution of a lease with such substitute tenant (which payment shall not be in lieu of any damages or other sums to which Landlord may be entitled to as a result ofTenant's default under this Lease); or (B) Landlord, in Landlord's sole and absolute discretion, determines that any such expenditure is financially justified in connection with entering into any lease with such substitute tenant. (d) Waiver by Tenant. Upon compliance with the criteria set forth in Section 1 c, above, regarding reletting of the Premises after a default by Tenant, Landlord shall be deemed to have fully satisfied Landlord's obligation to mitigate damages under this Lease; and Tenant waives, to the fullest extent legally permissible, any right to assert in any action by Landlord to enforce the terms of this Lease, any defense, counterclaim, or rights of setoff or recoupnent respecting the mitigation of damages by Landlord, unless and to the extent Landlord maliciously or in bad faith fails to act in accordance with the requirements of this clause. (e) No Waiver... of Indemnification. ation. Neither the termination of this Lease nor the exercise of any remedy under this Lease or otherwise available at law or in equity shall affect the right of Landlord to any right of indemnification set forth in this Lease or otherwise available at law or in equity for any act or omission of Tenant, and all rights to indemnification or other obligations of Tenant which are intended to be performed after termination of this Lease shall survive termination ofthis Lease and termination of Tenant's right to possession under this Lease. (f) Landlord's Default. (1) Default. It shall be a default and breach of this Lease by Landlord if Landlord materially fails to perform or observe any term, condition, covenant or obligation required to be performed or observed by it under this Lease for a period of thirty days after receipt of written notice thereof from Tenant; provided, however, that if the term, condition, covenant or obligation to be performed by Landlord is of such nature that the same cannot reasonably be performed within such thirty 0 day period, such default shall be deemed to have been cured if Landlord coninnences such perforrrnance within said thirty 0 day period and thereafter diligently undertakes to complete the same. (2) Tenant's Remedies. Tenant shall not have the right based upon a default of Landlord to terminate this Lease or to withhold, offset or abate Rent, Tenant's sole recourse for Landlord's default shall be an action for damages against Landlord for diminution in the rental value of the Premises for the period of Landlord's default, which is proximately caused by Landlord's default. Tenant shall not have the right to terminate this Lease or to withhold, offset or abate the payment of Rent based upon the unreasonable or arbitrary withholding by Landlord of its consent or approval of any matter requiring Landlord's consent or approval, including, but not limited to, any proposed assignment. or subletting; Tenant's remedies in such instance being limited to a declaratory relief action, specific performance, injunctive relief or an action for actual damages. Tenant shall not in any case be entitled to any consequential (including lost profits) or punitive damages based upon any Landlord default or withholding of consent or approval. (3) Non --Recourse. Notwithstanding anything to the contrary contained in this Lease, Tenant agrees and understands that Tenant shall look solely to the estate and property of Landlord in the Premises for the enforcement of any judgment (or other judicial decree) requiring the payment of money by Landlord to Tenant by reason of any default or breach by Landlord in the performance of its obligations under this. Lease, it being intndd hereby that no other assets of Landlord shall be subject to levy, execution, attachment or any other legal process for the enforcement or satisfaction of the remedies pursued by Tenant in the event of such default or breach. (4) Limitation of L i alp i l ity. In the event of a sale or transfer of the Premises by Landlord, the Landlord named herein or, in the case of a subsequent transfer, the transferor, shall, after the date of such transfer, be automatically released from all personal liability for the performance or observance of any term, condition, covenant or obligation required to be performed or observed after the date of such transfer by Landlord hereunder; and the transferee shall be deemed to have assumed all of such terms, conditions, covenants and obligations, it being intended hereby that such terms, conditions, covenants and obligations shall be binding upon Landlord, its successors and assigns only during and in respect of their successive periods of ownership during the Term. 18. Signage. Tenant, at its own expense, shall have the right to place signage on the exterior of the Premises as approved by the Landlord. The exact location, design and colors o f such signage shall be submitted by Tenant to Landlord and shall be subject to approval of theLandlord. The wiring and installation of such signage shall be done at Tenant's expense, subject to inspection and approval of Landlord.. Any and all signage shall be subject to applicable sign ordinances and regulations, and appropriate City of National City approvals regarding number, size, and color. 19, Quiet Enjoyment. Upon payment by Tenant of the Rent herein provided, and upon the observance and performance of all the covenants, terms and conditions on Tenant's part to be observed and performed, Tenant shall peaceably and quietly hold and enjoy the Premises for the term hereby demised without hindrance or interruption by Landlord or any other person or persons lawfully or equitably claiming by, through or, under Landlord, subject, nevertheless, to the terms and conditions of this Lease, and any mortgage and/or deed of trust to which this Lease is subordinate and subject to Landlord's right from time to time to make improvements to the Premises. provided that such work does not materially interfere with Tenant's use of the Premises. 20. Landlord Exclusive Control. Landlord shall have the right to make changes to the Premises so long as the same does not negatively impact the Tenant's use, occupancy and enjoyment thereof or Tenant's rights under this Lease. Landlord has the right, but not the obligation, to (i) restrain the use of the Premises by unauthorized persons, or (ii) temporarily close any portion of the Premises for repairs, improvements or alterations. 21. Subordination. Tenant agrees that its leasehold interest hereunder is subordinate to any mortgages now on, or hereafter to be placed on, the Premises. Tenant shall comply with requests of Landlord' s lenders, for execution o documentation to effect this subordination of its leasehold interest, including without limitation, subordination, nondisturbance and attor}nment agreements. Tenant shall obtain any and all non -disturbance agreements in favor of Tenant from the holders of all mortgages, deeds of trust and other encumbrances ("Encumbrances") against the Premises that Tenant in its sole discretion deems necessary. 22. Estoppel Certificates. Tenant, at any time and from time to time, upon not less than five days' prior written notice from Landlord, agrees to execute and deliver to Landlord a statement (on a form prepared by Landlord) (a) certifying that this Lease is unmodified and in full force and effect, or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect and the date to which the Rent and other charges are paid in advance, if any, and (b) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults if they are claimed evidencing the status of this Lease. Tenant's failure to deliver an estoppel certificate within such time shall be conclusive upon Tenant that i this Lease is in full force and effect without modification except as may be represented by Landlord, (ii) to Tenant's knowledge there are no uncured defaults in Landlord's performance, and (iii) no Rent has been paid in advance except as set forth in this Lease. 23. Financial Statements, Landlord has reviewed financial statements, if so requested of the Tenant, and has relied upon the truth and accuracy thereof with Tenant's knowledge and representations of the truth and accuracy ofsuch statements and that , said statements accurately and fairly depict the financial condition of Tenant as of the date of this Lease. Said financial statements are an inducing factor and consideration for the entering into of this Lease by Landlord with this particular Tenant. Tenant shall, at any time and from time to time upon not less than ten (10)days' prior written notice from Landlord, furnish Landlord with current financial statements, which accurately reflect Tenant's then financial condition. 24. Notices. All notices under this Lease shall be in writing and sent (a) certified or registered U.S. mail, return receipt requested, (b) overnight by a nationally recognized overnight courier such as UPS Overnight or FedEx, or (c) by personal delivery. All notices shall be effective upon receipt (or refusal to accept delivery). All notices shall be delivered to the following addresses or such other addresses as changed by any party from time to time by written notice to the other p arti e s hereto: Landlord: Tenant: City of National City 1243 National City Boulevard National City, CA 91950 Attention: City Manager TC Construction Co, Inc, 10540 Prospect Avenue Santee, CA 92071 25. Brokers. Landlord and Tenant each represents and warrants to one another that no broker has been involved in the negotiation or consummation of this Lease. Tenant and Landlord each agree to indemnify, defend (with an attorney of the indemnitee's choice) and hold the other harmless from and against all claims, demands, causes of action and liabilities, including without limitation attorneys' fees and costs, arising out of a claim for a commission by any other broker purporting to have acted on behalf of the indemnifying party. 26. Force Maj ur . Neither party shall be required to perform any tern, covenant or condition of this Lease so long as such performance is delayed or prevented by force m.ajeure, which shall mean any acts of God, material restriction by any governmental authority, civil riot, and any other cause not reasonably within the control of such party and which by the exercise of due diligence such party is unable, wholly or in part, to prevent or overcome. .7, General Conditions. (a) Count arts. This Lease may be executed in two or more counterparts, each of which shall be deemed an original, hut all of which together shall constitute one and the sane instrument. (b) Captions. The captions in this Lease are inserted for convenience of reference and in no way define, describe or limit the scope or intent of this Lease or any of the provisions of this Lease. (c) Partial Invalidity. Any provision ofthis Lease which is unenforceable, invalid, or the inclusion of which would adversely affect the validity, legality, or enforcement of this Lease shall have no effect, but all the remaining provisions of this Lease shall remain in full effect. (d) No Third -Party Rights. Nothing in this Lease, express or implied, is intended to confer upon ,any person, other than the parties to this Lease and their respective successors and assigns, any rights or remedies. (e) Time Of Essence. Time is of the essence in this Lease. 4) Relationship. Nothing contained in this Lease shall be deemed or construed by the parties or by any third person to create a relationship of principal and agent or partnership or a joint venture between Landlord and Tenant or between either or both of them and any third party. (g) Landlord Approval. Where this Lease refers to an action or approval of the Landlord, it shall mean the approval of the City Manager of the City of National City, or designee, unless otherwise provided. (h) Further Assurances. Landlord and Tenant agree to execute all such instruments and documents and to take all actions which are reasonably necessary to carry out this Lease or accomplish its intent. (i) Incorporation of Prior Agreements. This Lease contains all agreements of Landlord and Tenant with respect to any matter mentioned, or dealt with, herein. No prior agreement or understanding pertaining to any such utter shall be binding upon Landlord or Tenant. Amendment. This Lease may only be amended by written agreement signed by Landlord and by Tenant. • (k) No Waiver. No waiver by either party of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach of the same or any other provision. Landlord's consent to or approval ofan act shall not be deemed to render unnecessary obtaining such Landlord's consent to or approval of any subsequent act. No waiver by either party shall be effective unless it is in writing, executed on behalf of such part. (1) given, Consents. Ali consents to be given by _ either party shall be reasonably and timely (rn)No Leasehold Mortgages. Tenant shall not encumber its leasehold interest in the Premises, without the prior written approval of the Landlord. (n) Nondiscrimination. There shall be no discrimination against or segregation of any person or group of persons, on account of race, color. creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or enjoyment of the Premises, nor shall Tenant itself, or any person claiming under or through it, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises. (0) Signature Authority. All individuals signing this Lease for a party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the each other party hereto that they have the necessary capacity and authority to act for, sign and bind the respective entity or principal on whose behalf they are signing. IN WITNESS WHEREOF, the parties have executed this Lease. TENANT: TC Construction Co, Inc., a California corporation B: - Print Name: Its: ISIGNATURES CCONTINUED UE ON FOLLOWING PAGE] By LANDLORD: City of N at1o►nal Cit -temp Bra 4410 a ston, City Manager APPROVED AS TO FORM: ryJ r�;In e :erim City ttorr