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04-105 Coffee Society lease agrmtASSIGNMENT OF COMMERCIAL LEASE T}is Assignment of Lease (Assignment) is made and becomes effective o n ~Ov l':t . 2017 (Effective Date) by and between ________ _ T..Qe... ~ Le-e__ (the Assignor) and SAn J0 Lr~Vl ____________ (the Assignee). WHEREAS. City of Cupertino (Landlord) is the owner of certain real property commonly described as being located at 10800 Torre Avenue in the City of Cupertino. County of Santa Clara . California and more particularly described in Exhibit "A" attached hereto ("Landlord's Property"); WHEREAS . Landlord operates on Landlord's Propert y a public library, and entered into a Lea se with Assignor to operate a cafe on the Property ; WHEREAS. Assignor now desires to assign the lease to Assignee and Landlord agrees to the Assignment so long as all the terms and conditions of the lease remain the same for the duration of the Lease unless otherwise agreed in writing by the Parti es. NOW THEREFORE. in consideration of the promi ses and covenants contained her ein and for other good and valuable consideration. the Parties hereby agree as follows: 1. For value received. Assignor assigns and transfers to Assignee that Lease . Dated 1\/\u-r \ 1 Ml'/ , Executed by Assignor as Les see and by City of C upertino. a Municipal Corporation. as Owner and Lessor, of the following described premises: (Describe commercial property) 2. The property is more fully described in the original commercial City Lease. attached hereto as Attachment A and incorporated here by reference. 3. Assignor assigns the Lease. together with all the rights. title. and interest in a nd to the lease and premi s es. subject to all the conditions and terms contained in the leas e . to have and to hold from l-L!Hfu\1 until the present term of the lea se ex pires on o"l.. I 2f=b I 4 . 4 . Assignor covenants that Assignor is the lawful and so le owner of the interes t assigned hereunder ; that thi s int e re s t is fr ee from all encumbrances: a nd that Assigno r ha s performed ali duties and obl igat ions and made a ll payments required under th e t e rm s and con diti o n s o f th e Lease. 1 5. AS SIGNEE agree s to pay th e rent du e and required after the e ffe c ti ve d a te o f thi s assignment, and to assume and perform all duties and obligations required by the terms of th e Lease . 6. The Parties agree that this Assignment along with Attachment A is the entire agreement between them. By s igning this agreement the Parties hereto agree to be bound to it s terms and co nditions on behalf of themselves , their successo rs a nd agents. Executed as of the date Effective Date written above. Assignor: ~ee ~~ L...e.JL By 4~ Title {:)vJview-(_ l,e,ll-ev-} Assignee : Fun .fu LT~Y) By~ Title Netv OwMrYV (BuJ e,v ) CONSENT OF LANDLORD: Th e City of Cupertino, as Owner and Landlord of the s ubj ec t property, and named Le sso r in the original Lease dated ~/_\_/ _j!J__, consents to thi s Assignment. Land~ITj'.,Pf CU~RTINO B ~~ f/lll/2Tl SIIRl//1lSTIJVJ1 ) r D~vid Brandt \.&"'~ e/!Y 1/GJ:. / Cit y Manager APPROVE D AS TO FORM : ({(6)/ &JA v R~ndo lph Steve nson Hom Cit y Atto rn ey 2 ACORD0 CERTIFICATE OF LIA~ILITY INSURANCE I DATE (MM/DD/YYYY) ~ 11/17/2017 THIS CERTIFICATE IS ISSUED AS A MATIER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED , subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer riqhts to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT JAMES CHOi NAME: State Farm DEBBIE YANG STATE FARM J'~'tl'n c .... 408-261-1623 ! rt~ Nol : 408-261-1625 £ 3484 STEVENS CREEK BLVD STE A ~t't~~ss · james .choi.fws2@statefarm.com ,. SAN JOSE, CA 95117 INSURER(S) AFFORDING COVERAGE NAIC# INSURER A, State Farm Fire and Casualty Company i 25143 INSURED INSURER B : I LIM, EUNJU OBA C OFFEE SOCIETY INSURER C : 10800 TORRE AVE STE 100 INSURER D: CUPERTINO, CA 95014-3207 INSURER E: INSURER F : COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOT\MTHSTANDING ANY REQUIREMENT, TERM OR CONDITION 10F ANY CONTRACT OR OTHER DOCUMENT Vv1TH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS , EXCLUSIONS AND CONDITIONS OF SUCH POLICIES . LI MITS SHOVVN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADD LSUBR l POLICY EFF ,~STc\%~1 I TR TYPE OF INSURANCE lo.,o n ,mm POLICY NUMBER IMM/OD/YYYYI LIMITS X COMMERCIAL GENERAL LIABILITY t EACH OCC URRE NCE I s 1,000,000 D CLAJ MS -MA DE IZl O.CCUR i ..,,,,.l AGE TO REN I CLJ I s 1,000,000 PRE MISES IEa occurre ncel I I 5,000 I MED EXP (Any on e perscn) s -y y 97-CY-B451-7 i 11/20/2017 11/20/2018 I s 1,000.000 A i PERSON AL & ADV INJUR Y -I s -2 .000.000 GEN 'L AGG REG ATE LIMIT APPLIES PER: -' GENER AL AGGREGATE IZl POLI CY D )~ D LOC : PRODUCTS -COMP/OP AGG s 2 ,000,000 I I OTHER: : ' I I s AUTOMOBILE LIABILITY ' J CO MBINED SINGLE LIMIT I s /Ea acci den el c--i ANY AUTO ' I s I BODILY INJURY (Per person) -;-I OWN ED ---SCH EDULED I BODILY IN JUR Y (Per acdder.t) S -AUTOS ONLY -AUTOS -I HIRED NO N-O'ANED PROPERTY DAMAGE AUTOS ONLY AUTOS ONLY I 'Per M"Cide nt1 s - ' ! i s UMBRELLA UAB H OCCUR . ' I s I EACH OCC URREN CE f-;--i I c C Jl:S-MADE i EXCESS LIAS AGGREGATE s OED I I RETENTI ON s s WORKERS COMPENSATION I ~f~TUTE I I OTH-I AND EMPLOYERS' LIABILITY ER YIN I s ANY PROP RIETO R/P ARTNER/EXECUTIVE ~ NIA N E.L. EACH ACCIDENT OFFICER /M EMBER EXCLUDED? E.L. DISEA SE -EA EMPLOYE~ S (Mandator'j In NH) ~~i~~~8~ 'b'}?gPER AT IO NS be low E.L. DI SEASE -POLICY LIM IT I s DESCR IPTIO N OF OPERATIONS/LOCATIONS/ VEHICLES (ACORD 101, Add iti onal Remarks Schedul e, may b e attached if more space Is required) SELLING COFFE, TEA, & SNACKS CERTIFICATE HOLDER LISTED BELOW IS LISTED AS AN ADDITIONA L INSURED ON THE POLICY 97-CY-B451-7 . CERTIFICATE HOLDER C ITY OF C U P E RTIN O 10300 TORRE AVE CUPERTI NO , C A 9 50 14 ACORD 2 5 (201 6/03) CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS . _.--:7 ~ © 1988-2015 ACORD CORPORATION . All rights re se rved. Th e ACORD name and log ~egiste r e d marks of ACORD . 1001486 132 849.12 03-16-20 16 ., ,. LR Policy No . 97 -CYB4517 0167 -FBOC THIS ENDORSEMENT CHANGES THE POLICY . PLEASE READ IT CAREFULL Y. CMP-4788.1 ADDITIONAL INSURED -MANAGERS OR LESSORS OF PREMISES This endorsement modifies insurance provided under the follow ing : BUSINESSOWNERS COVERAGE FORM Policy Number: 97-CYB451 7 Named Insured: LIM , EUNJU OBA COFFEE SOCIETY 10800 TORRE AVE STE 100 CUPERTINO CA 95014 -320 7 SCHEDULE Name And Address Of Additional Insured Person Or Organization: CITY OF CUPERTINO 10300 TORRE AVE CUPERTIN O CA 95014 3255 Location Of Premises (Part Leased To You): 10800 TORRE AVE STE 100 , CUP ERTINO CA 95014-3207 CMP-4 788 .1 Pag e 1 of 1 1. SECTION II -WHO IS AN INSURED of SECTION II -LIABILITY is amended to include, as an additional insured, any person or organization shown in the Schedule, but only with respect to liability arising out of the ownership , maintenance or use of that part of the premises leased to you and shown in the Schedule. 2. With respect to the insurance afforded the additional insured , this insurance does not apply to: a . Any "oc currence" or offense which takes place after you cease to be a tenant in the premises shown in the Schedule . b. Stru ctural alterat ions , new construction or demolition operation s performed by or for that addi- tional insured. 3. Any insuran ce prov ided to the add itional insured sha ll only apply with respect to a cla im made or a "suit " brought for damages for which you are provid ed coverage . 4. Primary Insurance . This insurance is primary to and will not seek contribution from any other insur- ance available to an additional insured under your poli cy provid ed that the additional insured is a nam ed insured under su ch other insurance . All other policy prov isions apply . CMP-4788 .1 ©,Copyright .State Farm Mutual Automobil e In surance Company. 2013 Inclu des copyrighted material of In su rance Services Office , Inc., wit h it s permissi on. 1007035 148012 08-14-20 14 LR Polic y No . 97-CYB4517 0167-FBOC THIS ENDORSEMENT CHANGES THE POLICY . PLEASE READ IT CAREFULLY CMP-4787 WAIVER OF TRANSFER OF RIGHTS OR RECOVERY AGAINST OTHERS TO US This endorsement modifies insurance provided under the following : BUSINESSOWNERS COVERAGE FORM SCHEDULE Policy Number: 97-CYB4517 Named Insured: LIM , EUNJU DBA COFFEE SOCIETY 10800 TORRE AVE STE 100 CUPERTINO CA 95014-3207 Name And Address Of Person Or Organization: CITY OF CUPERTINO 10300 TORRE AVE CUPERTINO CA 95014 3255 CM P-4787 Page 1 of 1 The following is added to Paragraph' 1 O.b . of SECTION I AND SECTION II -COMMON POLICY CONDITIONS : -We waive any right 'of recovery we may have against the person or organization shown in the Schedule because of payments we make for injury or damage arising out of: a. Your ongoing operations ; or b. "Your work" done under contract with that person or organizat ion and included in the "products- completed operations hazard". This wa iver applies only to the person or organization shown in the Schedule . All other policy provis rons apply . CM P-47 87 1006225 1377 15.1 11-1 9-20 13 ©, Copyright, State Farm Mu tua l A utomo bile In s ura nce Compa ny, 2008 Includes copyrighted materia l of Insu rance Services Offi ce, In c., w ith its permissio n . LEASE AGREEMENT This Lease Agreement ("Lease") is entered into as of the 21 st day of June, 2004, by and between the City of Cupertino, a municipal corporation, 10300 Torre Avenue, Cupertino, CA 95014 ("Landlord"), and Coffee Society at the Cupertino Library, LLC, 21265 Stevens Creek Boulevard, CA 95014 ("Tenant"). WHEREAS, Landlord is the owner of certain real property commonly described as being located at 10300 Torre Avenue_ in the City of Cupertino, County of Santa Clara, California and more particularly described in Exhibit "A" attached hereto ("Landlord's Property"); and WHEREAS, Landlord operates on Landlord's Property a public library; and desires to have Tenant operate a cafe on the Property. WHEREAS, Tenant desires to lease from Landlord the cafe portion of Landlord's Property (the "Leased Premises") to operate an independently owned cafe business. NOW THEREFORE, in consideration of the promises and covenants contained herein and for other good and valuable consideration, the parties hereby agree as follows: 1. LEASE OF PREMISES. Landlord leases to Tenant and Tenant leases from Landlord the Leased Premises consIstmg of approximately 500 square feet of interior space within the public library along with the non-exclusive right to use exterior public plaza space and more particularly described in Exhibit B Leased Premises, attached hereto, together with the nonexclusive right to use the common and parking areas of Landlord's Property. 2. TERM AND OPTION. 2.1 Term. The term of this Lease shall be for a period of five (5) years commencing on approximately November 1, 2004 ("Commencement Date") and ending October 31, 2009. 2.2 Option. Tenant is granted the option to extend the initial term of this Lease for one (1) additional period of five (5) years provided Tenant is not in default ("Extended Term"). To exercise the option to extend, Tenant shall give written notice thereof to Landlord at least six (6) months prior to the expiration of the initial term. 3. RENT. 3.1 Base Rent. Tenant agrees to pay Landlord as rent for the Premises commencing upon the Commencement Date the sums shown below in lawful money of the United States payable on or before the first day of each calendar month to the Landlord at the address shown in Section 24. a. From November 1, 2004 to January 31, 2005 will be rent free. b. From February 1,2005 to October 31, 2005, the monthly sum of$1,125.00. b. From November 1,2005 to October 31,2006, the monthly sum of$1,153.l3. c. From November 1,2006 to October 31, 2007, the monthly sum of$1,181.95. d. From November 1,2007 to October 31,2008, the monthly sum of$I,2l1.50. e. From November 1,2008 to October 31, 2009, the monthly sum of$1,241.79. In the event the option term is exercised, the rent shall be as follows: a. From November 1, 2009 to October 31,2010 the monthly sum of$1,272.83. b. From November 1, 2010 to October 31, 2011, the monthly sum of$1,304.66. c. From November 1,2011 to October 31,2012, the monthly sum of$1,337.27. d. From November 1,2012 to October 31, 2013, the monthly sum of$1,370.70. e. From November 1,2013 to October 31,2014, the monthly sum of$1,404.97. 3.2 Late Charges. Any installment of rent or any other sum due by Tenant and not received by Landlord within five (5) days after such amount shall be due, without any requirement for notice to Tenant, shall be subject to a late charge equal to six percent (6%) of such overdue amount. 4. TAXES. 4.1 Real Estate Taxes. F or the term of this Lease, Landlord shall pay all real estate taxes and assessments levied upon Landlord's Property, if any. 4.2. Personal Property Taxes. During the term hereof, Tenant shall pay, prior to delinquency, all taxes assessed against and levied upon fixtures, furnishings, equipment and all other personal property of Tenant contained in the Leased Premises, and when possible Tenant shall cause said fixtures, furnishings, equipment and other personal property to be assessed and billed separately from the real property of Landlord. In the event any or all of the Tenant's fixtures, furnishings, equipment and other personal property shall be assessed and taxed with Landlord's real property, the Tenant shall pay to Landlord its share of such taxes within ten (10) days after delivery to Tenant by Landlord of a statement in writing setting forth the amount of the taxes applicable to the Tenant's property. 5. USE. 5.1 Tenant's Use. Tenant shall use the Premises to operate a cafe which intends to serve beverages, coffee, pastry, light lunch, dessert, and snack type items to the general public including City of Cupertino employees. Tenant shall not use the Leased Premises for any other purpose without the written consent of Landlord, which consent may be withheld in Landlord's sole and absolute discretion. Tenant, at Tenant's sole cost and expense, shall comply with all applicable municipal, state and federal statutes, ordinances, rules and regulations in effect during the term of this Lease regulating the use by Tenant of the Premises. 5.2. Uses Prohibited. Page 2 of 16 Tenant shall not use nor permit the use of the Leased Premises in any manner that will tend to create waste or nuisance or disturb other tenants and operators on Landlord's Property. No use shall be made or permitted to be made of said Premises, nor acts done, which will increase the existing rate of insurance upon the building in which said Premises may be located once said rate is established or cause a cancellation of any insurance policy covering said building or any part thereof, nor shall Tenant sell or permit to be kept, used or sold in or about said Premises, any article which may be prohibited by a standard form of fire insurance policies. Tenant shall, at his sole cost, comply with any and all requirements, pertaining to the use of said Premises, of any insurance organization or company necessary for the maintenance of reasonable fire and public liability insurance, covering said building and appurtenances. In the event Tenant's use of the Premises, for public cafe uses, results in a rate increase for the building of which the Premises are a part, Tenant shall pay a pro-rata share annually on the anniversary date of this Lease, as additional rent, a sum equal to that of the additional premium occasioned by said rate increase. 6. AL TERA TIONS AND FIXTURES; WORK LETTER. 6.1 Tenant's Rights. Tenant shall not make any alterations of the Leased Premises, or any part thereof, without the prior written consent of Landlord. Any additions to, or alterations of, said Premises, except movable furniture and trade fixtures, shall become at once a part of the realty and belong to Landlord. Any such alterations shall be in conformance with the requirements of all municipal, state and federal authorities. All fixtures, excluding trade fixtures, that are attached to the Premises shall become at once a part of the realty and belong to Landlord on expiration or sooner termination of this Lease. 6.2 Landlord's Rights. Landlord has the right, in its sole discretion to modify, reconfigure and renovate the public library of which the Leased Premises are part. Landlord agrees to build at its sole cost and expense, a partition wall to separate the cafe from the library. 6.3 Work Letter The design and construction of the Premises shall be done in compliance with provisions of Exhibit C Work Letter. 7. MAINTENANCE, REPAIRS AND ALTERATIONS. 7.1 Landlord's Obligations. Except for damage caused by any negligent or intentional act or omission of Tenant, Tenant's agents, employees, or invitees in which event Tenant shall repair the damage, Landlord, at Landlord's expense, shall keep in good order, condition and repair the foundations, exterior walls and the exterior roof of the Premises. Landlord shall not, however, be obligated to maintain the interior or exterior surface of exterior walls, windows, doors or plate glass. Landlord shall have no obligation to make repairs under this Section 7.1 until a reasonable time after receipt of written notice of the need for such repairs. Tenant expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford Tenant the right to make repairs at Landlord's expense or to terminate this Lease because of Landlord's failure to keep the Premises in good order, condition and repair. Page 3 of 16 7.2 Tenant's Obligations. a) Tenant, at Tenant's expense, shall keep in good order, condition and repair the Premises and every part thereof (whether or not the damaged portion of the Premises or the means of repairing the same are reasonably or readily accessible to Tenant) including, without limiting the generality of the foregoing, all plumbing, electrical and lighting facilities and equipment within the Premises, trade fixtures, interior walls and interior surface of exterior walls, ceilings, windows, doors, and glass, located within the Premises. Tenant agrees that it will manage its operation at the highest standards of cleanliness in order to deliver an image that will appropriately blend with Premises. Tenant agrees that it will only employ people who create a clean, well-groomed, friendly, and positive image of its business. Tenant further agrees that it will require its employees to wear a standard logo top and similar matching pants in order to present a uniform staff appearance. b) If Tenant fails to perform Tenant's obligations under this Section or under any other section of this Lease, Landlord may at Landlord's option enter upon the Premises after ten (10) days' prior written notice to Tenant (except in case of emergency, in which case no notice shall be required), perform such obligations on Tenant's behalf and put the Premises in good order, condition and repair, and the cost thereof together with interest thereon at the maximum rate then allowable by law shall be due and payable as additional rent to Landlord together with Tenant's next rental installment. c) On the last day of the term hereof, or on any sooner termination, Tenant shall surrender the Premises to Landlord in the same condition as received, ordinary wear and tear excepted, clean and free of debris including the removal of Tenant's trade fixtures. Tenant shall repair any damage to the Premises occasioned by the installation or removal of its trade fixtures, furnishings and equipment.. 8. INSURANCE. Landlord shall either self-insure or maintain fire and extended coverage insurance throughout the term of this Lease in an amount equal to at least ninety (90%) percent of the value of the building which includes the Premises, together with such other insurance, including not limited to, loss of rents, flood insurance, all liability insurance, and such other insurance as Landlord deems necessary or that may be required by any governmental agency. Tenant hereby waives any right of recovery from Landlord, its officers and employees, and Landlord hereby waives any right of recovery from Tenant, its officers or employees, for any loss or damage (including consequential loss) resulting from any of the perils insured against in the standard form fire insurance policy with extended coverage endorsement. Tenant shall maintain plate glass insurance with a provision requiring the insurer to give Landlord at least ten (10) days written notice before any decrease in coverage, cancellation, or other material change, is effective and naming Landlord as the additional insured, and shall provide Landlord with a copy of the policy or a Certificate ofInsurance within fifteen (15) days after the Commencement Date. If Tenant fails to deliver adequate proof that it has obtained and kept in force and effect the insurance required by this Section, Landlord shall have the right, at its option and after notice to Tenant, to effect such insurance and charge the cost of the premiums to Tenant's account. 9. INDEMNIFICATION OF LANDLORD - LIABILITY INSURANCE BY TENANT. 9.1 Indemnification. Page 4 of 16 Tenant, as a material part of the consideration to be rendered to Landlord under this Lease, hereby waives all claims against Landlord for damage to goods, wares and merchandise, in, upon or about said Premises and for injuries to persons in or about said Premises, from any cause resulting from Tenant's use and occupation on the Premise arising at any time; and Tenant will indemnify and hold Landlord and the property of Landlord exempt and harmless from any and all claims, liabilities, loss, expenses, damage or injury resulting from Tenant's use and occupation of the Premises, including, but not limited to, any claim, liability, loss, or damage arising by reason of death or injury of any person, the damage to or destruction of any property of any person, and any work performed on said Premises or materials furnished to said Premises at the instance or request of Tenant or its agents or employees. 9.2 Tenant's Insurance. During the entire term of this Lease, the Tenant shall, at the Tenant's sole cost and expense, but for the mutual benefit of Landlord and Tenant, maintain general public liability and property damage insurance including contractual liability insurance against claims for personal injury, death, or property damage occurring in, upon or about the Premises and on any sidewalks directly adjacent to the Premises. The limitation of liability of such insurance shall be not less than One Million dollars ($1,000,000.00) in respect to anyone occurrence, and to the limit of not less that One Million Dollars ($1,000,000.00) in respect to Property Damage. Landlord is to be named additional insured. All such policies of insurance shall be issued in the name of Tenant and Landlord and for the mutual and joint benefit and protection of the parties, and such policies of insurance shall include a provision requiring that the insurer give Landlord at least ten (10) days written notice before any cancellation, decrease in coverage or other material change is effective. Copies of the policy or a Certificate of Insurance thereof shall be delivered to the Landlord within fifteen (15) days after the Commencement Date stated. If Tenant fails to deliver adequate proof that it has obtained and kept in force and effect the insurance required by this Section, Landlord shall have the right, at its option and after notice to Tenant, to effect such insurance and charge the cost of the premiums to Tenant's account. 10. ABANDONMENT OF PERSONAL PROPERTY. Tenant shall not vacate or abandon the Premises at any time during the term of this Lease; and if Tenant shall abandon, vacate or surrender the Premises or be dispossessed by process of law, or otherwise, any personal property belonging to Tenant and left on the Premises shall be deemed to be abandoned, at the option of Landlord, except such property as may be mortgaged to Landlord. 11. UTILITIES. Tenant shall pay for telephone service, janitorial service including interior and exterior window washing and all other services used in, upon, or about the Premises by Tenant with the exception of water, sewer, trash removal from receptacles, electricity which Landlord shall pay. 12. ENTRY AND INSPECTION. Tenant shall permit Landlord and his agents to enter into and upon the Premises at all reasonable times after notice, except in case of an emergency, for the purpose of inspecting the same or for the purpose of maintaining the building in which said Premises are situated, or for the purpose of making repairs, alterations or additions to any other portion of said building, including the erection and maintenance of such scaffolding, canopy, fences and props as may be required, or for the purpose of posting notices of non-liability for alterations, additions or repairs. Landlord shall be permitted to do any of the above Page 5 of 16 without any rebate of rent and without any liability to Tenant for any loss of occupation or quiet enjoyment of the Premises thereby occasioned. Tenant shall permit Landlord, at any time within ninety 90) days prior to the expiration of this Lease, to place upon said Premises any usual or ordinary "For Lease" signs and during such ninety (90) day period Landlord or his agents may, during normal business hours, enter upon said Premises and exhibit same to prospective tenants. 13. DAMAGE AND DESTRUCTION OF PREMISES. In the event of (a) partial destruction of said Premises or the building containing same during the term of this Lease or any extensions thereof, which requires repairs to either said Premises or said building, or (b) said Premises or said building being declared unsafe or unfit for occupancy by any authorized public authority for any reason other than Tenant's act, use or occupation, which declaration requires repairs to either said Premises or said building, Landlord shall forthwith make said repairs provided Tenant gives to Landlord thirty (30) days written notice of the necessity therefore. No such partial destruction (including any destruction necessary in order to make repairs required by any declaration made by any public authority) shall in any way annul or void this Lease except that Tenant shall be entitled to a proportionate reduction of minimum guaranteed rent while such repairs are being made, such proportionate reduction to be based upon the extent to which the making of such repairs shall interfere with the business carried on by Tenant in said Premises. However, if during the last one year of the term of this Lease the building is damaged as a result of fire or any other insured casualty to an foundation), Landlord may, within thirty 30) days following the date such damage occurs, terminate this Lease by written notice to Tenant. If Landlord, however, elects to make said repairs, and provided Landlord uses due diligence in making said repairs, this Lease shall continue in full force and effect and the minimum guaranteed rent shall be proportionately reduced as provided above. If Landlord elects to terminate this Lease all rents shall be prorated between Landlord and Tenant as of the date of such destruction. The foregoing to the contrary notwithstanding, if the building is damaged or destroyed at any time during the term hereof to an extent of more than twenty-five (25%) percent of its then replacement cost (excluding foundation) as a result of a casualty not insured against, Landlord may within thirty (30) days following the date of such destruction terminate this Lease upon written notice to Tenant. If Landlord does not elect to so terminate because of said uninsured casualty, Landlord shall promptly rebuild and repair said Premises and Tenant's rental obligation shall be proportionately reduced as provided above. In respect to any partial destruction including any destruction necessary in order to make repairs required by any authorized public authority) which Landlord is obligated to repair and may elect to repair under the terms of this Article, Tenant waives any statutory right it may have to cancel this Lease as a result of such destruction. 14. ASSIGNMENT AND SUBLETTING. Tenant shall not, without Landlord's prior written consent, which consent may be withheld in Landlord's sole and absolute discretion, sublet the Premises or any part thereof or assign this Lease. 15. EMINENT DOMAIN. If all or any part of the Premises is taken for public or quasi-public use by a governmental authority under the power of eminent domain or is conveyed to a governmental authority in lieu of such taking, and if the taking or conveyance causes the remaining part of the Premises to be untenantable and inadequate for use by Tenant for the purpose for which they were leased, then Tenant, at its option and by giving notice within fifteen (15) days after the taking, may terminate this Lease as of the date Tenant is required to surrender possession of the Premises. If a part of the Premises is taken or conveyed but the remaining part is tenantable and adequate for Tenant's use, then this Lease shall be terminated as to the part taken or Page 6 of 16 conveyed as of the date Tenant surrenders possession; Landlord shall make such repairs, alterations and improvements as may be necessary to render the part not taken or conveyed tenantable; and the rent shall be reduced in proportion to the part of the Premises taken or conveyed. All compensation awarded for the taking or conveyance shall be the property of Landlord without any deduction therefrom for any estate of Tenant, and Tenant hereby assigns to Landlord all its right, title and interest in and to the award. Tenant shall have the right, however, to recover from the governmental authority, but not from Landlord, such compensation as may be awarded to Tenant on account of the interruption of Tenant's business, moving and relocation expenses and removal of Tenant's trade fixtures and personal property. 16. DEFAULT. If Tenant fails to make any payment required by the provisions of this Lease, after ten (10) days of the due date, or fails within fifteen (15) days after written notice thereof to correct any breach or default of the other covenants, terms or conditions of this Lease, or if Tenant breaches this Lease and abandons the property before the end of the term, such acts shall constitute a default under this Lease and Landlord shall have the right at any time thereafter to elect to terminate said Lease and Tenant's right to possession thereunder. Upon such termination, Landlord shall have the right to recover against Tenant: a) termination; The worth at the time of award of the unpaid rent, which had been earned at the time of b) The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Tenant proves could have been reasonably avoided; c) The worth at the time of ward of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Tenant proves could be reasonably avoided; and d) Any other amount necessary to compensate the Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under the Lease or which in the ordinary course of things would be likely to result therefore. The "worth at the time of award" of the amounts referred to in subsections a. and b. above shall be computed by allowing interest at ten (10%) percent per annum or the maximum rate permitted by law. The worth at the time of award of the amount referred to in subsection c. shall be computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one (1%) percent. Such efforts as Landlord may make to mitigate the damages caused by Tenant's breach of this Lease do not constitute a waiver of Landlord's right to recover damages against Tenant hereunder, nor shall anything contained herein affect Landlord's right to indemnification against Tenant for any liability arising prior to termination of this Lease for personal injuries or property damage, and Tenant hereby agrees to indemnify and hold Landlord harmless from any such injuries and damages, including all attorney's fees and costs incurred by Landlord in defending any action brought against Landlord for any recovery thereof, and in enforcing the terms and provisions of this indemnification provision against Tenant. Page 7 of 16 If Landlord elects to terminate this Lease and gives Tenant notice of such termination, upon the giving of such notice, the term of this Lease and the estate hereby granted shall expire and terminate on the effective date of the notice as fully and completely and with the same effect as if such date were the date herein fixed for the expiration of the term of this Lease and all rights of Tenant shall hereunder expire and terminate, but Tenant shall remain liable as here before provided. In the event Tenant abandons the Premises, this Lease shall terminate if the Landlord gives written notice of his belief of abandonment pursuant to Civil Code Sections 1951.2 and 1951.3. Notwithstanding any of the following, the breach of this Lease by Tenant, or an abandonment of the Premises by Tenant, shall not constitute a termination of this Lease, or of Tenant's right of possession hereunder, unless and until Landlord elects to do so, and until such time Landlord shall have the right to enforce all of its rights and remedies under this Lease, including the right to recover rent, and all other payments to be made by Tenant hereunder, as it becomes due; provided, however, that until such time as Landlord elects to terminate this Lease, and Tenant's right of possession hereunder, to collect said rents, issues and profits as the become due and payable. Upon any such breach or default, Landlord shall have the right at any time thereafter, without notice except as provided for above, either in person, by agent or by a receiver to be appointed by a court, to enter and take possession of said Premises and collect such rents, issues and profits, including those past due and unpaid, and apply the same less costs and expenses of operation and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Landlord may determine. The parties hereto agree that acts of maintenance or preservation or efforts to re-lease the Premises, or the appointment of a receiver upon the initiative of the Landlord to protect its interests under this Lease shall not constitute a termination of Tenant's right of possession for the purposes of this Article unless accompanied by a written notice from Landlord to Tenant of Landlord's election to so terminate. Nothing contained in this Article shall in any way diminish or be construed as waiving any of the Landlord's other remedies as provided elsewhere in this Lease or by law or in equity. 17. ATTORNEY'S FEES. If Landlord is involuntarily made a party defendant to any litigation concerning this Lease or the Premises by reason of any act or omission of Tenant, then, Tenant shall hold harmless Landlord from all liabilities by reason thereof, including reasonable attorneys' fees and all costs incurred by Landlord in such litigation. Landlord shall be entitled to recover all collection costs including reasonable attorney's fees incurred by it as a result of Tenant's default as herein provided. If either Landlord or Tenant shall commence any legal proceedings against the other with respect to any of the terms and conditions of this Lease, the non- prevailing party therein shall pay to the other all expenses of said litigation, including a reasonable attorneys' fees as may be fixed by the court having jurisdiction for litigation of any matters relating to this Lease and service mailed to the address of tenants set forth herein shall be adequate service for such litigation. 18. SECURITY DEPOSIT. Tenant contemporaneously with the execution of this Lease, has deposited with Landlord the sum of Five Thousand Dollars ($5,000,00), receipt of which is hereby acknowledged by Landlord, said deposit being given to secure the faithful performance by the Tenant of all of the terms, covenants, and conditions of Page 8 of 16 this Lease by the Tenant to be kept and performed during the term hereof. Tenant agrees that if the Tenant shall fail to pay the rent herein reserved promptly when due, said deposit may, at the option of the Landlord (but Landlord shall not be required to) be applied to any rent due and unpaid, and if the Tenant violates any of the other terms, covenants, and conditions of this Lease, said deposit shall be applied to any damages suffered by Landlord as a result of Tenant's default to the extent of the amount of the damages suffered. Landlord shall not be required to keep such deposit separate from its general accounts. Nothing contained in this Article shall in any way diminish or be construed as waiving any of the Landlord's other remedies as provided herein, or by law or in equity. Should the entire security deposit, or any portion thereof, be appropriated and applied by Landlord for the payment of overdue rent or other sums due and payable to Landlord by Tenant hereunder, then Tenant shall, on the written demand of Landlord, forthwith remit to Landlord a sufficient amount in cash to restore said security deposit to its original amount, and Tenant's failure to do so within fifteen (15) days after receipt of such demand, shall constitute a breach of this Lease. Should Tenant comply with all of the terms, covenants, and conditions of this Lease and promptly pay all of the rental herein provided for as it falls due, and all other sums payable by Tenant to Landlord hereunder, said security deposit shall be returned in full to Tenant at the end of the term of this Lease, or upon the earlier termination of this Lease, except in the event the Premises are sold as a result of the exercise of any power of sale under any mortgage or deed of trust, in which event this Lease shall be automatically amended to delete any reference to this Section, and Tenant shall be entitled to immediate reimbursement of its security deposit from the party then holding said deposit. This Lease does not create a trust relationship between Landlord and Tenant with respect to such security deposit, and Landlord shall be entitled to treat such security deposit as Landlord's own property. 19. HOLDING OVER. Any holding over after the expiration of the term of this Lease, with the consent of Landlord, shall be construed to be a tenancy from month to month, cancelable upon thirty (30) days written notice, and upon terms and conditions as existed during the last year of the term hereof except that the rent payable shall be one hundred and fifty percent (150%) of the rent payable immediately preceding the termination date of this Lease. 20. BINDING EFFECT. The provisions of this Lease shall, subject to Section 15 on assignment, apply to and bind the heirs, successors, executors, administrators and assigns of all the parties hereto. 21. NOTICE. All notices must be in writing and shall be delivered by hand, by nationally recognized overnight express delivery service or by U.S. registered or certified mail, to the addresses set forth below: TENANT:Ralph Flynn President Coffee Society at the Cupertino Library, LLC 21265 Stevens Creek Blvd. Cupertino, CA 95014 Phone: (408) 725-8091 Page 9 of 16 LANDLORD:Director of Public Works City of Cupertino 10300 Torre Avenue Cupertino, CA 95014-3255 Phone: (408)777-3354 22. PARTIAL INVALIDITY. If any term, covenant, condition or provision of this Lease is held by a court of competent jurisdiction to be invalid, void or enforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereof. 23. ENTIRE AGREEMENT. This Lease sets forth the entire agreement between the parties. No amendment or modification of this Lease shall be binding or valid except by written instrument and signed by the parties. Executed as of the date first written above. Landlord: CITY OF CUPERTINO ByjkJe::, Lily" c:."'L, J.A.,.. 7 "- Title Tenant: COFFEE SOCIETY AT THE CUPERTINO LIBRARY, LLC By ~/.4;~/ Title /?14qQ~PY f1?",P?&t"'Y Page 10 of 16 Exhibit B Leased Premises c ~ 1 t r: :;~i:B 1 Leased Premises r - Ti J r:EJ t f ) ~ ~ 1 l : ; ~ j I l ~ 1 i 1 J GIlOUPHtJOy ii:r CAFE om; J~ ~P1; &J c'}. i :-F BROWSING AREACHILDREN'S AREA i! j; ~l J ~) l a L r LOBBYREDWOODGROVl COUATYAAO i ~,'~.i,ri: t.: JL ~~I iit 1 -1 :-~ ..,~.L'<. ~.. :.' 1lr~;_'~LJ., the library i if :: 'i t 1 r,:: r r" i (-f r Page 12 of 16 Exhibit C Work Letter 1. Space Plan. a) Space Plan. Tenant has delivered to Landlord a space plan depicting improvements to be installed in the Premises, which plans were prepared by Tenant and dated March 22, 2004 (the "Space Plan"). The Space Plan is attached hereto as Exhibit C -1. 3. Working Drawings. a) Preparation and Delivery. On or before the date which is 30 days following the date on which this Lease is fully executed by both Landlord and Tenant, Tenant shall cause to be prepared final working drawings of all improvements to be installed in the Premises and deliver the same to Landlord for its review and approval (which approval shall not be unreasonably withheld, delayed or conditioned). b) Approval Process. Landlord shall notify Tenant whether it approves of the submitted working drawings within five business days after Tenant's submission thereof. If Landlord disapproves of such working drawings, then Landlord shall notify Tenant thereof specifying in reasonable detail the reasons for such disapproval, in which case Tenant shall, within five business days after such notice, revise such working drawings in accordance with Landlord's objections and submit the revised working drawings to Landlord for its review and approval. Landlord shall notify Tenant in writing whether it approves of the resubmitted working drawings within one business day after its receipt thereof. This process shall be repeated until the working drawings have been finally approved by Landlord and Tenant. If Landlord fails to notify Tenant that it disapproves of the initial working drawings within five business days (or, in the case of resubmitted working drawings, within one business day) after the submission thereof, then Landlord shall be deemed to have approved the working drawings in question. Any delay caused by Landlord's unreasonable withholding of its consent or delay in giving its written approval as to such working drawings shall constitute a Landlord Delay Day (defined below). If the working drawings are not fully approved (or deemed approved) by both Landlord and Tenant by the 15th business day after the delivery of the initial draft thereof to Landlord, then each day after such time period that such working drawings are not fully approved (or deemed approved) by both Landlord and Tenant shall constitute a Landlord Delay Day. c) Landlord's Approval; Performance of Work. If any of Tenant's proposed construction work will affect the Building's Structure or the Building's Systems, then the working drawings pertaining thereto must be approved by the Building's architect or engineer of record. Landlord's approval of such working drawings shall not be unreasonably withheld, provided that (1) they comply with all Laws, (2) the improvements depicted thereon do not adversely affect (in the reasonable discretion of Landlord) the Building's Structure or the Building's Systems, the exterior appearance of the Building, or the appearance of the Building's common areas, (3) such working drawings are sufficiently detailed to allow construction of the improvements in a good and workmanlike manner, and (4) the improvements depicted thereon conform to the rules and regulations promulgated from time to time by Landlord for the construction of tenant improvements. As used herein, "Working Drawings" shall mean the final working drawings approved by Landlord, as amended from time to time by any approved changes thereto, and "Work" shall mean all improvements to be constructed by Tenant in accordance with and as indicated on the Working Drawings. Landlord's approval of the Working Drawings shall not be a representation or warranty of Landlord that such drawings are adequate for any use or comply with any Law, but shall merely be the consent of Page 13 of 16 Landlord thereto. Tenant and Landlord shall each sign the Working Drawings to evidence their mutual review and approval thereof. After the Working Drawings have been approved, Tenant shall cause the Work to be performed in substantial accordance with the Working Drawings, using contractors and subcontractors approved by Landlord. 4. Change Orders. Tenant may initiate changes in the Work. Each such change must receive the prior written approval of Landlord, such approval not to be unreasonably withheld or delayed; however, (a) if such requested change would adversely affect (in the reasonable discretion of Landlord) (1) the Building's Structure or the Building's Systems, (2) the exterior appearance of the Building, or (3) the appearance of the Building's common areas, or (b) if any such requested change might delay the Commencement Date, Landlord may withhold its consent in its sole and absolute discretion. Tenant shall, upon completion of the Work, furnish Landlord with an accurate architectural "as-built" plan of the Work as constructed. 5. Definitions. As used herein, a "Landlord Delay Day" means each day of delay in the performance of the Work that occurs a) because of Landlord's failure to timely deliver or approve any required documentation such as the Working Drawings, b) because Landlord fails to attend any meeting with Tenant, the architect, any design professional, or any contractor, or their respective employees or representatives, as may be required or scheduled hereunder or otherwise necessary in connection with the preparation or completion of any construction documents, such as the Working Drawings, or in connection with the performance of the Work. Each Landlord Delay Day shall entitle Tenant to receive one additional day of abated rent. As used herein, a "Tenant Delay Day" means each day of delay in the performance of the Work that occurs i) because Tenant fails to timely furnish any information or deliver or approve any required documents such as the Working Drawings (whether preliminary, interim revisions or final), and the like, ii) because of any change by Tenant to the Space Plans or Working Drawings, iii) because Tenant fails to attend any meeting with Landlord, the architect, any design professional, or any contractor, or their respective employees or representatives, as may be required or scheduled hereunder or otherwise necessary in connection with the preparation or completion of any construction documents, such as the Working Drawings (whether preliminary, interim revisions or final), and the like, iv) because a Tenant otherwise delays completion of the Work. As used herein, " Substantial Completion," "Substantially Completed" and any derivations thereof mean the Work in the Premises is substantially completed (as reasonably determined by Landlord) in substantial accordance with the Working Drawings. Substantial Completion shall have occurred even though minor details of construction, fixturing, and mechanical adjustments remain to be completed by Tenant. Each Tenant Delay Day shall entitle Tenant to lose one additional day of abated rent. 6. Walk-Through; Punchlist. When Landlord considers the Work in the Premises to be Substantially Completed, Landlord will notify Tenant and within three business days thereafter, Landlord's representative and Tenant's representative shall conduct a walk-through of the Premises and identify any necessary touch-up work, repairs and minor completion items. Neither Landlord's representative nor Page 14 of 16 Tenant's representative shall unreasonably withhold his or her agreement on punchlist items. Tenant shall use reasonable efforts to cause the contractor performing the Work to complete all punchlist items within 30 days after agreement thereon; however, Tenant shall not be obligated to engage overtime labor in order to complete such items. 7. Costs. Tenant shall bear the entire cost of designing, permitting, and performing the Work depicted on the Working Drawings approved by Landlord. 8. Construction Representatives. Landlord's and Tenant's representatives for coordination of construction and approval of change orders will be as follows, provided that either party may change its representative upon written notice to the other: Landlord's Representative: Terry Greene City of Cupertino 10300 Torre Avenue Cupertino, CA 95014-3255 Phone: (408) 777-3354 Tenant's Representative: Ralph Flynn Coffee Society at the Cupertino Library, LLC 21265 Stevens Creek Blvd. Cupertino, CA 95014 408) 725-8091 9. Miscellaneous. To the extent not inconsistent with this Exhibit, Sections 8(a) and 21 of this Lease shall govern the performance of the Work and Landlord's and Tenant's respective rights and obligations regarding the improvements installed pursuant thereto. Page 15 of 16