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2011 Lease - Alvarez, Donato and XochitlLEASE THIS LEASE for reference purposes only dated /A0 , 2011, is entered into by and between The City of Gilroy ( "Landlord ") and Donato It. Alvarez and Xochitl Alvarez ( "Tenant "). 1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby hires from Landlord that certain unimproved parcel of real property located at the corner of Obata Way and Southside Drive in the City of Gilroy, County of Santa Clara, State of California, more particularly described on Exhibit A attached hereto ( "Premises ") upon all of the conditions and agreements set forth herein. The Premises does not currently have a Santa Clara County Assessor's Parcel Number ( "APN') assigned to it. The Premises is located adjacent to and along the northerly boundaries of APNs 841 -79 -9, 841- 79 -10, 841 -79 -13 and 841 -79 -14 and adjacent to and along the southerly boundary of APN 841- 76 -14. 2. LEASE TERM. 2.1 Term. T e ter of this Lease ( "Term ") shall be for a period of sixty (60) months, commencing on !/ ?bII (the "Commencement Date "), and terminating at 'l 1:59 p.m. on d► Zo G► (the "Expiration Date"), subject to extension and sooner termination as provided in this Lease. Notwithstanding the foregoing, Landlord shall have the right, in Landlord's sole and absolute discretion, to terminate this Lease at any time prior to the Expiration Date or any extension thereof by giving Tenant not less than ninety (90) days prior written notice of termination. "Lease Termination" shall mean the expiration or sooner termination of this Lease. 2.2 Option to Extend. If this Lease has not terminated and Landlord has not delivered an early termination notice to Tenant prior to commencement of the Option Term (defined below), Landlord grants to Tenant one (1) option to extend the Term ("Option to Extend ") for an additional period of five (5) years (the "Option Term "), under the same terms and conditions set forth in this Lease except as set forth in this Section 2.2. The Option to Extend shall be personal to the original Tenant named in this Lease, and shall not be transferable or assignable. Commencing on the first day of the Option Term, Base Rent shall be an amount determined as described in this Section 2.2 below. Base Rent shall be increased annually on each anniversary of the Option Term to an amount equal to one hundred and three percent (103 1/o) of the Base Rent in effect immediately prior to such adjustment. Tenant shall exercise the Option to Extend, if at all, by written notice to Landlord not later than one hundred twenty (120) days nor earlier than one hundred eighty (180) days before the then scheduled expiration of the Term. Landlord and Tenant shall negotiate for a period of thirty (30) days after exercise of the Option to Extend to attempt to agree on the Base Rent for the first year of Option Term. If the parties are not able to agree on the Base Rent for the first year of the Option Term during this thirty (30) day period, then the Base Rent for the first year of the Option Term shall be one hundred ten percent (110 %) of the Base Rent in effect immediately before the start of the Option Term. Notwithstanding the foregoing, Tenant shall not have the right to exercise the Option to Extend (i) during any period of time commencing on the date Landlord gives Tenant written notice that Tenant is in default under this Lease and continuing until the default is cured; (ii) at 1KKS%35325.5 -1- 02071"4706084 any time after Tenant has defaulted three (3) or more times in the payment of any Rentals due under this Lease during any twenty four (24) month period; or (iii) after Lease Termination. The period of time within which the Option to Extend may be exercised shall not be extended or enlarged by reason of the Tenant's inability to exercise such Option to Extend because of the foregoing provisions. At Landlord's election, all rights of Tenant under the provisions of this Section 2.2 shall terminate and be of no further force or effect even after Tenant's due and timely exercise of an Option to Extend if, after such exercise, but prior to the commencement of the Option Term, Tenant is in default of any of Tenant's Lease obligations. In addition, notwithstanding Tenant's exercise of the Option to Extend, this Lease shall continue to thereafter be subject to earlier termination by Landlord in Landlord's sole and absolute discretion upon giving Tenant not less than ninety (90) days notice of termination. Once the Option to Extend has been timely exercised by Tenant, Tenant shall not have the right to withdraw such exercise. 3. DELIVERY OF POSSESSION, Tenant shall accept the Premises in its "AS IS AND WITH ALL FAULTS" condition upon the Commencement Date, without representation or warranty of any kind, express or implied, and subject to all applicable federal, state, county, city or other governmental laws, statutes, ordinances, codes, standards, rules, requirements, regulations, and orders now in force or hereafter enacted, promulgated, issued or in effect (collectively, "Laws "). Neither Landlord nor Landlord's officers, council members, employees, representatives or agents makes any representation or warranty as to the suitability of the Premises for the conduct of Tenant's business, the condition of the Premises, or the use or occupancy which may be made thereof and Tenant has independently investigated and is satisfied that the Premises are and will be suitable for Tenant's intended use. If Landlord is unable to deliver possession of the Premises to Tenant on the Commencement Date for any reason, Landlord shall not be subject to liability therefor, nor shall such failure affect the validity of this Lease or the obligations of Tenant hereunder; provided however that if Landlord has not delivered possession of the Premises within sixty (60) days after the Commencement Date Tenant may, at Tenant's option, terminate this Lease by delivering to Landlord written notice of termination, which notice must be delivered prior to the date that Landlord delivers possession of the Premises to Tenant in order for such notice to be effective. 4. RENT. 4.1 Base Rent. During each month of the first sixty (60) months of the Term (the "Initial Term "), Tenant shall pay to Landlord as Base Rent the amount set forth below: Month Base Rent Amount 1 -12 $1,276.77 13 -24 $1,315.07 25 -36 $1,354.52 37 -48 $1,395.16 49 -60 $1,437.01 US'1836325.5 -2- 020711-04706084 During each month of the Option Term, Tenant shall pay to Landlord as Base Rent the monthly amount determined as provided in Section 2.2. Base Rent shall be paid in advance on the first day of each calendar month throughout the Term without offset, deduction, prior notice or demand, except that a full month's Base Rent shall be paid upon the execution of this Lease by Tenant. Base Rent shall be prorated based on a thirty (30) day month for any partial calendar month of the Term, provided that if this Lease terminates due to Tenant's default, Tenant shall not be relieved of the obligation to pay future accruing rent, and the provisions of Section 13 shall control. If the Commencement Date is a day other than the first day of a calendar month, then for purposes of determining the Base Rent due under this Lease the first partial calendar month shall be considered Month 1 of the Lease Term and the sixtieth (60th) calendar month and the next partial calendar month included within the Lease Term shall be considered Month 60 of the Lease Tenn. 4.2 Late Charizes. If Base Rent is not paid within ten (10) days after the due date, Tenant shall pay a late charge of ten percent (10 %) of the amount overdue. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of the late payment by Tenant, excluding interest and attorneys fees and costs. In no event shall this provision for a late charge be deemed to grant to Tenant a grace period or extension of time within which to pay any installment of Base Rent or prevent Landlord from exercising any right or remedy available to Landlord upon Tenant's failure to pay such amounts when due, including, without limitation the right to terminate this Lease. Any installment of Base Rent not received by Landlord by the thirtieth (30th) day after its due date shall bear interest at the Stipulated Rate (as that term is defined in Section 18 below) commencing on the thirty-first (31st) day after the due date for such installment and continuing until such installment is paid in full. 4.3 Additional Rent. All amounts which Tenant is required to pay under this Lease, and all damages, costs and expenses which Landlord may incur by reason of any default by Tenant under this Lease shall be deemed to be additional rent hereunder ("Additional Rent "). Upon nonpayment of Additional Rent, Landlord shall have all of the rights and remedies with respect thereto as Landlord has for the non- payment of Base Rent. "Rentals" as used in this Lease shall mean Base Rent and all Additional Rent. All Rentals shall be paid in lawful money of the United States to Landlord at the address specified in this Lease for purposes of notice, or to such other persons or at such other places as may be designated in writing by Landlord from time to time. All Rentals shall be paid without deduction or offset and, except as otherwise expressly provided in this Lease, without prior notice or demand. 4.4 Security Deposit. Concurrently with Tenant's execution of this Lease, Tenant shall deposit with Landlord a security deposit ("Security Deposit ") in the amount of One Thousand Two Hundred Seventy Six Dollars and Seventy Seven Cents ($1,276.77), to be held by Landlord as security for the faithful performance by Tenant of each and every term, covenant, or condition of this Lease applicable to Tenant, and not as prepayment of Base Rent. If Tenant at any time fails to keep or perform any term, covenant or condition of this Lease applicable to Tenant, Landlord may, but shall not be obligated to, and without waiving or releasing Tenant from any obligation under this Lease, use, apply or retain the whole or any part of the Security Deposit reasonably necessary for the payment of any amount which Landlord may spend by reason of Tenant's default or as necessary to compensate Landlord for any loss or damage which u K035s2s.s -3- 020711 -04706084 Landlord may suffer by reason of Tenant's default, including without limitation loss of future rents due under this Lease upon termination of this Lease due to a default by Tenant and other damages recoverable under California Civil Code Section 1951.2. Tenant hereby waives California Civil Code Section 1950.7, or any similar law now or hereafter in effect which may have the effect of limiting the circumstances under which Landlord would be allowed to use or apply the Security Deposit or amount that could be so used or applied, or imposing a deadline for the return of the Security Deposit. If Landlord uses or applies any portion of the Security Deposit, Tenant shall, within five (5) days after written demand by Landlord, remit to Landlord sufficient funds to restore the Security Deposit to its original sum. Should Tenant comply with all of the terms, covenants and conditions of this Lease applicable to Tenant, any balance of the Security Deposit shall be returned to Tenant within thirty (30) days after Lease Termination and surrender of the Premises by Tenant in the condition required by this Lease. If any portion of the Security Deposit is to be applied to repair damages to the Premises caused by Tenant or Tenant's Agents, to clean the Premises, or to remove alterations and restore the Premises, or to compensate Landlord for any damages suffered by Landlord, then the balance of the Security Deposit not needed for such purposes shall be returned to Tenant no later than thirty (30) days after the amount needed for such purposes is determined by Landlord. In the event of the sale or transfer of Landlord's interest in the Premises, Landlord shall have the right to transfer the Security Deposit to the transferee of Landlord's interest, in which event Tenant shall look only to the new landlord for the return of the Security Deposit, and the transferring Landlord shall thereupon be released from all liability to Tenant for the return of the Security Deposit. Tenant hereby acknowledges that Tenant will not look to the holder of any mortgage or deed of trust encumbering any portion of the Project for return of the Security Deposit if such holder or its successors or assigns succeeds to the ownership of the Premises whether by foreclosure or deed in lieu or otherwise, except if and to the extent the Security Deposit is actually received by such holder. Landlord shall not be deemed a trustee of the Security Deposit or any other funds held by Landlord, and Landlord shall not be required to keep the Security Deposit or any such other funds separate from its general funds. The Security Deposit and such other funds shall not bear interest for the benefit of Tenant. 5. TAXES. 5.1 Real Property Taxes. Tenant shall pay, before the same become delinquent, all Real Property Taxes imposed against the Premises. As used in this Lease, the term "Real Property Taxes" means any form of assessment, license, fee, rent tax, levy, possessory interest or other tax (other than net income, estate, successor or inheritance taxes), now or hereafter imposed by any authority having the direct or indirect power to tax or by any city, county, state or federal government or any improvement or other district or division thereof, whether or not now customary or within the contemplation of the parties, ordinary or extraordinary, general or special, or resulting from increased rate or valuation, together with any taxes levied or assessed in lieu of, in substitution for, or in addition to existing taxes and assessments against the Premises. In accordance with California Revenue and Taxation code Section 107.6(a), Landlord advises Tenant that by entering into this Lease, a possessory interest subject to property taxes may be created. Tenant or any other party in whom the possessory interest is vested , may be subject to the payment of property taxes levied on such interest. V<KM835325.5 -4- 020711- 04706084 5.2 Tax on Leasehold or Personalty. Tenant shall be responsible for and shall pay before delinquency all municipal, county or state taxes, levies and fees of every kind and nature including, but not limited to, general or special assessments assessed during the Term against any leasehold interest or trade fixtures or personal property of any kind, owned or leased by or placed in, upon or about the Premises by Tenant. Tenant agrees to pay before delinquency the amount of all taxes levied upon or measured by the rent payable hereunder, whether as a so- called sales tax, transaction privilege tax, excise tax, or otherwise. If such taxes, levies or fees are assessed, levied, or imposed upon Landlord or any portion of the Premises, Landlord shall give Tenant a statement of the amount applicable to the Premises. If a separate assessment of the improvements is not available from the appropriate governmental authority, Landlord's good faith allocation shall be binding on Tenant. In such event, Tenant shall pay Landlord on demand for such taxes, levies and fees applicable to the Premises. CONDUCT OF BUSINESS BY TENANT. 6.1 Uses of the Premises. Tenant shall use the Premises solely for the following purposes, subject to Section 62 below, and for no other purposes without the prior written consent of Landlord which may be withheld in Landlord's sole discretion: (i) outdoor storage of raw construction materials, and (ii) parking of fully operational vehicles in good repair, provided that parking of any vehicles on the Premises and ingress and egress of vehicles to and from the Premises shall be restricted to those areas on the Premises that are improved by Tenant with concrete slab acceptable to Landlord. Without limiting the foregoing use restriction, in no event shall the Premises be used for the storage or parking of inoperable vehicles or vehicles in need of repair which pose a risk of contamination to the Premises, and in no event shall Tenant have the right to perform any vehicle repairs on the Premises. 6.2 Compliance with Law. Tenant at its expense shall comply promptly with all applicable Laws regulating the use by Tenant of the Premises. Tenant at its expense shall take all steps required to cause the Premises to be kept, maintained, used and occupied in compliance with the Americans With Disabilities Act of 1990, as the same may be amended from time to time, to the extent applicable to the Premises or any use thereof. Tenant shall not use or permit the use of the Premises in any manner that will tend to create a nuisance. Neither Tenant nor any subtenant of the Premises (of any tier in the chain of title) nor any of Tenant's or such subtenant's agents, employees, representatives, affiliates, architects, contractors (including without limitation subcontractors of all tiers), suppliers, vendors, licensees or invitees (collectively "Tenant's Agents ") shall use, store or dispose, or allow the use, storage or disposal of, any Hazardous Materials (defined below) on any portion of the Premises. Tenant shall indemnify, defend with counsel reasonably acceptable to Landlord, and hold Landlord and Landlord's officers, council members, employees, representatives, agents, successors and assigns (collectively "Landlord Related Parties'l harmless from and against any and all claims, liabilities, obligations, penalties, fines, actions, losses, damages, costs or expenses (including without limitation attorneys' fees) (collectively, "Claims and Liabilities ") arising in connection with the breach of the obligations described in this Section 6.2 above, which obligation shall survive Lease Termination. As used in this paragraph, Hazardous Materials means any and all substances, materials or wastes (whether liquid, solid or gaseous or other forms), which are a pollutant or contaminant, or which are hazardous, toxic, ignitable, reactive, corrosive, dangerous, harmful or injurious, or which present a risk to public health or the environment, or which are or 1KKS1835325.5 -5- 020711- 04706084 become regulated by or under the authority of any Laws, as defined below, including, without limitation, asbestos or asbestos containing materials, petroleum products, pesticides, polychlorinated biphenyls, flammable explosives, radioactive materials and urea formaldehyde. 7. MAINTENANCE REPAIRS AND ALTERATIONS. 7.1 Landlord's Responsibility. Landlord shall have no obligation to maintain, repair or improve the Premises under any circumstance. Tenant waives the provisions of California Civil Code Sections 1941 and 1942 and any similar Law now or hereafter. 7.2 Tenant's Responsibility. Tenant shall keep the Premises in good, clean, neat, sanitary and safe condition and state of repair at all times during the Term at Tenant's sole cost. Tenant shall neither commit nor permit any waste or nuisance on the Premises, and shall keep the walks and all areas free from waste or debris. 7.3 Condition Upon Surrender. On Lease Termination, Tenant shall remove all of its personal property and trade fixtures from the Premises, and shall surrender the Premises to Landlord in the same condition as when received except for those Alterations not required to be removed pursuant to Section 7.4 below. 7.4 Improvements by Tenant. Tenant shall not, without prior written consent of Landlord, which consent Landlord may withhold in its sole discretion, make any alterations, improvements, or additions (collectively, "Alterations ") to the Premises, except that (i) Tenant may erect a fence along the exterior boundaries of the Premises with Landlord's prior written consent not to be unreasonably withheld, and (ii) Tenant may install a concrete slab surface on the Premises with Landlord's prior consent not to be unreasonably withheld. At least ten (10) days prior to undertaking construction of any Alterations, Tenant shall give written notice to Landlord setting forth the date work is to commence and a detailed description of the proposed work sufficient for Landlord to evaluate the scope and quality of the work to be performed. Landlord shall have the right at all reasonable times to post and keep posted on the Premises such notices of non - responsibility as Landlord may deem necessary for the protection of Landlord and the Premises from mechanic's and materialman's liens. All Alterations shall be installed at Tenant's sole expense, in compliance with all applicable Laws, permit requirements and any covenants, conditions or restrictions of record, by a licensed contractor, shall be done in a good and workmanlike manner, and shall not diminish the value of the Premises. Prior to expiration or sooner termination of the Lease, Tenant shall remove all Alterations from the Premises and return the Premises to their condition as of the Commencement Date; provided, however that at Landlord's option, by written notice delivered to Tenant prior to Lease Termination, Landlord may elect to have all or any portion of such Alterations remain in place and surrendered to Landlord with the Premises at Lease Termination in which case such Alterations designated by Landlord to remain in place shall become the property of Landlord at Lease Termination. Notwithstanding any other provision of this Lease, Tenant shall be solely responsible for the maintenance and repair of any Alterations made by Tenant to the Premises. 1KKS1835325.5 -6- 020711-04706084 8. INSURANCE AND INDEMNITY. 8.1 Tenant to Maintain. Tenant shall at all times during the Tenn, at Tenant's cost and expense, maintain in effect workmen's compensation insurance in the minimum amounts required by law. In addition, Tenant shall maintain Commercial general liability insurance (at least as broad as the most commonly available ISO Commercial General Liability policy form CG 00 01), or such successor comparable form of coverage in the broadest form then available, for the mutual benefit of Landlord and Tenant, against any and all claims and liabilities arising out of the ownership, use, occupancy or maintenance of the Premises, or the business operations therein. The minimum limit of coverage of such policy shall be in the amount of not less than Five Million Dollars ($5,000,000.00) per occurrence and annual aggregate, shall include an extended liability endorsement providing contractual liability coverage (which shall include coverage for Tenant's indemnification, defense and hold harmless obligations in this Lease), and shall contain a severability of interest clause or a cross liability endorsement. Such insurance shall further insure Landlord and Tenant against liability for property damage of at least One Million Dollars ($1,000,000.00). If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. Tenant shall also maintain in effect at all times during the Term business automobile liability insurance having a combined single limit of not less than Five Million Dollars ($5,000,000) per occurrence and insuring Tenant against liability for claims for bodily injury, death, or property damage, arising out of ownership, maintenance, or use of any owned, hired or non -owned automobiles. Landlord may from time to time require reasonable increases in the limits of Tenant's insurance if Landlord believes that additional coverage is necessary or desirable. The limit of any insurance shall not limit the liability of Tenant hereunder. No policy maintained by Tenant under this Section 8.1 shall contain a deductible greater than Two Thousand Five Hundred Dollars ($2,500.00). No policy shall be cancelable or subject to reduction of coverage without thirty (30) days prior written notice to Landlord (except for nonpayment which shall require not less than ten (10) days notice). Such policies of insurance shall be issued as primary policies and not contributing with or in excess of coverage that Landlord may carry, by an insurance company authorized to do business in California for the issuance of such type of insurance coverage and having an AM Best financial strength rating or A+ or better. All deductibles shall be deemed self - insured with full waiver of subrogation. All Tenant policies shall contain an endorsement that the insurer waives its right to subrogation. Tenant is solely responsible for insuring that the amount of insurance carried by Tenant is sufficient for Tenant's purposes. 8.2 Landlord Approval. All insurance required to be carried by Tenant hereunder shall be in companies, on forms and with loss payable clauses satisfactory to Landlord and copies of policies of such insurance, certified by the insurer to be a true and correct copy of the insurance policies, evidencing such insurance shall be delivered to Landlord by Tenant prior to Tenant's entry on the Premises; a new certified policy shall be delivered to Landlord at least thirty (30) days before expiration of the old policy. No such policy shall be cancelable except after thirty (30) days' written notice to Landlord. All liability policies to be carried by Tenant under this Lease shall name Landlord and its officers, council members, employees, representatives, agents and designated lenders as additional insureds. Such insurance shall be the primary insurance as respects Landlord and shall contain a cross liability endorsement. Such WKS05325.5 -7- 020711- 04706084 policies shall provide coverage on an occurrence basis and not on a claims made basis. In no event shall the limits of such policies be considered as limiting the liability of Tenant under this Lease. 8.3 Waiver of Liability. Tenant hereby waives all rights of recovery against Landlord or against any of the Landlord Related Parties for loss of or damage to Tenant or Tenant's property or the property of others under its control to the extent permitted under such insurance policy without prejudice to coverage under such policy. Tenant shall obtain and furnish evidence to Landlord of the waiver by Tenant's insurance carriers of any right of subrogation against Landlord. 8.4 Tenant to Hold Landlord Harmless. Tenant hereby agrees to defend with counsel reasonably acceptable to Landlord, indemnify and hold harmless Landlord and the Landlord Related Parties from and against any and all Claims and Liabilities due to any cause including without limitation, bodily injury and property damage, which arises out of or is in any way attributable to the use or occupancy of the Premises or any part thereof by Tenant or Tenant's Agents, the acts or omissions of Tenant or Tenant's Agents or Tenant's breach of this Lease, except to the extent caused by the willful misconduct or sole negligence of Landlord. This Section shall survive Lease Termination. 8.5 Landlord's Disclaimer. Landlord shall not be liable for injury or damage which may be sustained by the person, goods, wares, merchandise or property of Tenant, its employees, invitees or customers or any other person in or about the Premises caused by or resulting from fire, electricity, gas, water or rain which may leak or flow from or into any part of the Premises, or from any other cause, whether such damage or injury results from conditions arising upon the Premises or from other sources. 9. CASUALTY. In no event shall Tenant have the right to terminate this Lease in connection with any damage or destruction to the Premises thereon. Tenant shall be responsible for repairing or restoring all damage or destruction to the Premises at Tenant's sole cost. In no event shall Tenant be entitled to any abatement or reduction of Rentals in the event of any damage or destruction to the Premises. In no event shall any damage, destruction, restoration or repair of any portion of the Premises result in an extension of the Expiration Date. Tenant waives the provisions of California Civil Code Sections 1932 and 1933(4) and any similar law now or hereafter in effect. 10. ASSIGNMENT AND SUBLETTING. 10.1 Landlord's Consent Required. Tenant shall not, either voluntarily, involuntarily or by operation of law (i) assign, sell or otherwise transfer all or any part of the Tenant's interest in this Lease or in the Premises, or (ii) permit any part of the Premises to be sublet, occupied or used by anyone other than Tenant or (iii) permit any person to succeed to any interest in this Lease or the Premises, (all of the foregoing being collectively referred to as a "Transfer"), without Landlord's prior written consent in each instance, which consent shall not be unreasonably withheld. Consent by Landlord to one or more Transfers shall not operate to exhaust Landlord's rights under this Article to receive consent to subsequent Transfers. The voluntary or other surrender of this Lease by Tenant or a mutual cancellation hereof shall not WK035325.5 -8- 020711- 04706084 work a merger and Landlord shall have the option of terminating all or any existing subtenancies or shall operate as an assignment to Landlord of all or any such subtenancies. If Tenant is a corporation, limited liability company, unincorporated association, partnership or other legal entity, the sale, assignment, cancellation, surrender, exchange, conversion or any other transfer or hypothecation of any stock, membership or other ownership interest in such entity (whether occurring at one time or over a period of time) in the aggregate of more than fifty percent (50 %) (determined cumulatively) shall be deemed an assignment of this Lease; in the case of a partnership, any withdrawal or substitution (whether occurring at one time or over a period of time) of any partners owning fifty percent (50 %) or more (cumulatively) of the partnership, or the dissolution of the partnership shall be deemed an assignment of this Lease; provided that, the foregoing provisions of this sentence shall not apply to a transfer of stock in a corporation whose stock is publicly traded on a public stock exchange. If Tenant is an entity, any sale of all or substantially all of its assets shall be deemed an assignment of this Lease. If Tenant is a corporation whose stock is not publicly traded on a public stock exchange, any dissolution, merger, consolidation or reorganization of Tenant shall be deemed a Transfer. Tenant agrees to reimburse Landlord for Landlord's reasonable costs and attorney's fees incurred in conjunction with the processing and documentation of any requested Transfer, whether or not consent is granted. In no event shall Tenant hypothecate, mortgage, pledge or encumber Tenant's interest in this Lease or in the Premises or otherwise use the Lease or Premises as a security device in any manner, nor shall Tenant transfer any right appurtenant to this Lease or the Premises separate from a permitted Transfer, without the consent of Landlord, which consent Landlord may withhold in its sole discretion. Tenant expressly agrees that the provisions of this Article are not unreasonable standards or conditions for purposes of Section 1951.4(b)(2) of the California Civil Code, as amended from time to time, under the federal Bankruptcy Code, or for any other purpose. 10.2 Notice to Landlord. If Tenant desires at any time to effect a Transfer, it shall first notify Landlord of its desire to do so and shall submit in writing to Landlord (a) the name of the proposed Transferee; (b) the nature of the proposed Transferee's business to be carried on in the Premises; (c) the terms and provisions of the proposed Transfer; (d) such reasonable financial information, including financial statements, and information regarding the Transferee's experience as Landlord may request concerning the proposed Transferee; and (e) such other information as Landlord may reasonably request to evaluate the Transfer and Transferee. 10.3 Bonus Rent. If for any proposed Transfer, Tenant receives rent or any other consideration, either initially or over the term of the Transfer in excess of the Rentals called for hereunder, or, in case of the sublease of a portion of the Premises, in excess of such Rentals fairly allocable to such portion, Tenant shall pay to Landlord as Additional Rent all of such excess of each such payment of rent or other consideration received by Tenant not later than ten (10) days after receipt. 10.4 Collection of Rentals. Tenant irrevocably assigns to Landlord, as security for Tenant's obligations under this Lease, all rent and other consideration payable by a Transferee and not otherwise payable to Landlord by reason of any Transfer. Landlord, as assignee of Tenant, or a receiver for Tenant appointed on Landlord's application, may collect such rent and other consideration and apply it toward Tenant's obligations under this Lease; W035325.5 -9- 020711-04706084 provided, however, that until the occurrence of any default by Tenant, Tenant shall have the right to collect such rent and other consideration. 10.5 Tenant Not Released. No Transfer, even with the consent of Landlord, shall relieve Tenant of its obligation to pay the Rentals and perform all of the other obligations to be performed by Tenant hereunder. The acceptance of Rentals by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any Transfer. 11. EMINENT DOMAIN. 11.1 Automatic Termination. If the entire Premises, or so much of either as to make the Premises not reasonably adequate for the conduct of Tenant's business in Landlord's reasonable judgment, shall be taken under the power of eminent domain, this Lease shall automatically terminate as of the date on which the condemning authority takes possession. 11.2 Rent Abatement. Upon any taking of any portion of the Premises under the power of eminent domain which does not result in a termination of this Lease, the Base Rent payable hereunder shall be reduced, effective as of the date on which the condemning authority takes possession, in the same proportion which the square footage of the Premises taken bears to the square footage of the entire Premises before such taking. 11.3 Condemnation Award. Any award for any taking of all or any part of the Premises under the power of eminent domain shall be the property of Landlord, whether such award shall be made as compensation for diminution in value of the leasehold or for taking of the fee. Nothing contained herein, however, shall be deemed to preclude Tenant from obtaining, or to give Landlord any interest in, any award to Tenant for removal of Tenant's personal property. 11.4 Sale Under Threat of Condemnation. A sale by Landlord to any authority having the power of eminent domain, either under threat of condemnation or while condemnation proceedings are pending, shall be deemed a taking under the power of eminent domain for all purposes under this Article. Each party waives the provisions of California Code of Civil Procedure Section 1265.130 allowing either party to petition the Superior Court to terminate this Lease in the event of a taking. 12. UTILITY SERVICES. Tenant shall not use or connect to any utilities to serve the Premises without Landlord's prior written consent (which consent may be withheld in Landlord's sole discretion). If Landlord consents to the use of or connection to any utilities to serve the Premises, Tenant shall be solely responsible for arranging for such use and connection, at Tenant's sole cost, for obtaining all City permits that may be required in connection with such use and connection, and for timely paying directly to the appropriate utility or service supplier all charges for any utilities or other services desired for the Premises during the Term of this Lease. Landlord shall not be liable in damages or otherwise for the lack of any utility or service to the Premises or any failure or interruption of any utility or service furnished to the Premises at any time during the Term of this Lease, and no such lack, failure or interruption shall entitle Tenant to terminate this Lease or shall otherwise affect Tenant's obligations under this Lease. VXSW35325.5 -10- 020711-04706084 13. DEFAULTS, REMEDIES. 13.1 Defaults. The occurrence of any one or more of the following events shall constitute a default hereunder by Tenant: 13.1.1 The abandonment of the Premises by Tenant. Abandonment is defined to include, but is not limited to, any absence by Tenant from the Premises for five (5) consecutive days or longer. 13.1.2 The failure by Tenant to make any payment of Base Rent or other Rentals as and when due. 13.1.3 The failure by Tenant to timely observe or perform any of the express or implied covenants or provisions of this Lease to be observed or performed by Tenant, other than as specified in Sections 13. 1.1 or 13.1.2 above. 13.1 A (a) The making by Tenant of any general assignment for the benefit of creditors; (b) the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days, or (c) the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where seizure is not discharged within thirty (30) days. 13.2 Remedies. Upon a default, Landlord shall have the following remedies, in addition to all other rights and remedies provided by law or otherwise provided in this Lease, to which Landlord may resort cumulatively or in the alternative: 13.2.1 Landlord may continue this Lease in full force and effect, and this Lease shall continue in full force and effect as long as Landlord does not terminate this Lease, and Landlord shall have the right to collect Rentals when due. No act by Landlord other than giving written notice to Tenant shall terminate this Lease. Acts of maintenance, efforts to relet the Premises or the appointment of a receiver on Landlord's initiative to protect Landlord's interest under this Lease shall not constitute a termination of Tenant's right to possession. 13.2.2 Landlord may terminate this Lease and Tenant's right to possession of the Premises at any time if (i) such default is in the payment of Rentals and it is not cured within three (3) days after written notice from Landlord, or, (ii) with respect to the defaults referred to in Sections 13.1.1, or 13.1.3 such default is not cured within thirty (30) days after written notice from Landlord; provided, however, that if the nature of Tenant's default is such that more than thirty (30) days are reasonably required for its cure, if Tenant does not commence to cure the default within the thirty (30) day period or does not diligently and in good faith prosecute the cure to completion within a reasonable time thereafter, or (iii) with respect to the default specified in Section 13.1.4, such default is not cured within the respective time specified in that Section. The parties agree that any notice given by Landlord to Tenant pursuant to this Section 13.2.2 shall be sufficient notice for purposes of California Code of Civil Procedure Section 1161 and Landlord shall not be required to give any additional notice in order to be entitled to commence an unlawful detainer proceeding. On termination, Landlord has the right to WXS1835325.5 -11- 020711- 04706084 remove all of Tenant's personal property, and trade fixtures and store same at Tenant's cost and to recover from Tenant as damages: 13.2.2.1 The worth at the time of award of unpaid Rentals and other sums due and payable which had been earned at the time of termination; plus 13.2.2.2 The worth at the time of award of the amount by which the unpaid Rentals and other sums due and payable which would have been payable after termination until the time of award exceeds the amount of such Rental loss that Tenant proves could have been reasonably avoided; plus 13.2.2.3 The worth at the time of award of the amount by which the unpaid Rentals and other sums due and payable for the balance of the Term after the time of award exceeds the amount of such Rental loss that Tenant proves could be reasonably avoided; plus 13.2.2.4 Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform Tenant's obligations under this Lease, or which, in the ordinary course of things, would be likely to result therefrom, including, without limitation, any costs or expenses incurred by Landlord: (a) in retaking possession of the Premises; (b) in maintaining, repairing, preserving, restoring, replacing, cleaning, altering or rehabilitating the Premises or any portion thereof, including such acts for reletting to a new tenant or tenants; (c) for leasing commissions; or (d) for any other costs necessary or appropriate to relet the Premises; plus 13.2.2.5 Such other amounts in addition to or in lieu of the foregoing as may be permitted from time -to -time by the laws of the State of California. The "worth at the time of award" of the amounts referred to in Sections 13.2.2.1 and 13.2.2.2 is computed by allowing interest at the Stipulated Rate. The "worth at the time of award" of the amount referred to in Section 13.2.2.3 is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1 %). 13.2.3 No delay or omission of Landlord to exercise any right or remedy shall be construed as a waiver of any such right or remedy or of any default by Tenant hereunder. 13.3 Default by Landlord. Landlord shall not be deemed to be in default in the performance of any obligation required to be performed by it hereunder unless and until it has failed to perform such obligation within thirty (30) days after written notice by Tenant to Landlord specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for its performance then Landlord shall not be deemed to be in default if it shall commence such performance within such thirty-day period and thereafter diligently prosecute the same to completion. Notwithstanding any other provision of this Lease, in no event shall Landlord be liable to Tenant for consequential damages, or loss of or interference with Tenant's business, including without limitation lost profits. WXS1835325.5 -12- 020711-04706084 13.4 Expenses of Prevailing Party. If either party incurs any expense, including reasonable attorneys' fees, in connection with any action or proceeding instituted by either party arising out of this Lease, the party prevailing in such action or proceeding shall be entitled to recover its reasonable expenses including reasonable attorneys' fees from the other party. 14. SIGNS. Tenant shall not, without Landlord's prior written consent (which consent may be withheld in Landlord's sole discretion), install or affix to any portion of the Premises any signs, lettering, placards or the like (collectively "Signs "). If Landlord consents to the erection of any Signs, such Signs shall comply with any sign criteria imposed by Landlord and all Laws. 15. TENANT ESTOPPEL STATEMENTS. Tenant shall at any time and from time to time upon not less than seven (7) days' prior written notice from Landlord execute, acknowledge and deliver to Landlord a statement in writing (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 dates to which the Base Rent and other charges are paid in advance, if any, (b) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, and (c) certifying and acknowledging such other facts as may be reasonably requested by Landlord. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the Premises. Tenant's failure to deliver such statement within such time shall, in addition to constituting a default under this Lease, be conclusive upon Tenant: (i) that this Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) that there are no uncured defaults in Landlord's performance, and (iii) that not more than one month's Base Rent has been paid in advance. 16. RIGHT OF ENTRY. Landlord and its agents shall have free access to the Premises during all reasonable hours for the purpose of examining the same, protecting the Premises, posting notices of non - responsibility, and exhibiting the same to prospective purchasers, lenders or tenants. 17. TRANSFER OF LANDLORD'S INTEREST. Upon any transfer or transfers of Landlord's interest in the Premises, the transferor shall be automatically relieved of any and all obligations and liabilities on the part of Landlord accruing from and after the date of such transfer, provided that the transferee is liable for any and all obligations and liabilities on the part of Landlord accruing from and after the date of such transfer. Tenant shall attorn to any transferee of Landlord's interest in the Premises. 18. INTEREST. Any amount due from Tenant to Landlord hereunder which is not paid when due (except for Base Rent, which shall be governed by Section 4.21 shall bear interest at the Stipulated Rate from the due date until paid. As used in the Lease the term "Stipulated Rate" is ten percent (10 %) per annum. Payment of such interest shall not excuse or cure any default by Tenant under this Lease. 1KKW35325.5 -13- 020711- 04706084 19. MISCELLANEOUS. 19.1 Time of Essence. Time is of the essence with respect to the performance of every provision of this Lease (except delivery of possession of the Premises to Tenant). 19.2 Captions. The article and section captions contained in this Lease are for convenience only and shall not be considered in the construction or interpretation of any provision hereof. 19.3 Entire Agreement and Amendments_. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no other agreement or understanding pertaining to any such matter shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in interest. 19.4 Notice. Any notice required or desired to be given under this Lease shall be in writing, and all notices shall be given by personal delivery (which includes without limitation delivery by overnight courier services) or mailing addressed to the parties as follows: If to Landlord: City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 Attn: City Administrator If to Tenant: Donato R. Alvarez and Xochitl Alvarez 180 Cox Ave. San Martin, CA 95046 Any party may designate by written notice to the other party such other persons or places in the United States of America as Landlord or Tenant may desire written notice to be delivered; provided, however, at no time shall either party be required to send more than an original and two (2) copies of any notices given pursuant to this Lease. Any notice not received because of the intended recipient's failure to provide a correct address or affirmative refusal to accept delivery shall be deemed given upon attempted delivery to the address provided by the intended recipient. 19.5 Holdover. This Lease shall terminate without further notice at the expiration of the Term. Any holding over after Lease Termination with the consent of Landlord shall be construed to be a tenancy from month to month, at one hundred twenty -five percent (125 %) of the Base Rent for the month immediately preceding Lease Termination in addition to all other Rentals payable hereunder, and shall otherwise be on the terms and conditions herein specified insofar as applicable. If Tenant remains in possession of the Premises after Lease Termination without Landlord's consent, or Tenant fails to surrender the Premises at Lease Termination in the condition required by this Lease, Tenant shall indemnify, defend with counsel reasonably acceptable to Tenant and hold Landlord and the Landlord Related Parties harmless from and against any and all Claims and Liabilities resulting from Tenant's failure to so surrender the Premises, including without limitation, any claims made by any succeeding tenant 1KKS1835325.5 -14- 020711. 04706084 based upon delay in the availability of the Premises, which obligation shall survive Lease Termination. 19.6 Brokers. Tenant warrants and represents that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease. Tenant agrees to defend with counsel reasonably acceptable to Landlord, indemnify and hold Landlord and the Landlord Related Parties harmless from and against any and all Claims and Liabilities arising out Tenant's breach of its representation and warranty in this Section 19.6, which obligation shall survive Lease Termination. 19.7 Acceptance. Delivery of this Lease, duly executed by Tenant, constitutes an offer to lease the Premises, and under no circumstances shall such delivery be deemed to create an option or reservation to lease the Premises for the benefit of Tenant. This Lease shall only become effective and binding upon full execution hereof by Landlord and delivery of a signed copy to Tenant. 19.8 Waiver. The waiver by Landlord of any breach of any term, condition or covenant of this Lease shall not be deemed to be a waiver of such provision or any subsequent breach of the same or any other term, condition or covenant of this Lease. The subsequent acceptance of Rentals hereunder by Landlord shall not be deemed to be a waiver of any preceding breach at the time of acceptance of such payment. No covenant, term or condition of this Lease shall be deemed to have been waived by Landlord unless such waiver is in writing signed by Landlord. 19.9 Separability. If one or more of the provisions contained herein, except for the payment of Rentals, is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Lease, but this Lease shall be construed as if such invalid, illegal or unenforceable provision had not been contained herein. 19.10 Liens. Tenant shall pay for all labor and services performed for, and all materials used by or furnished to Tenant or Tenant's Agents and keep the Premises free from any liens arising out of work performed, materials furnished, or obligations incurred by Tenant or Tenant's Agents with respect to the Premises. Tenant shall indemnify, hold harmless and defend with counsel reasonably acceptable to Landlord and hold Landlord and the Landlord Related Parties from and against any and all Claims and Liabilities arising out of any work or services performed for or materials used by or furnished to Tenant or Tenant's Agents with respect to the Premises, which obligation shall survive Lease Termination. If any such lien shall at any time be filed against the Premises, Tenant shall either cause the same to be discharged of record within ten (10) days after the date of filing of the same, or, if Tenant in Tenant's discretion and in good faith determines that such lien should be contested, Tenant shall furnish such security as may be necessary or required to (a) prevent any foreclosure proceedings against the Premises during the pendency of such contest, and (b) cause a mutually satisfactory title company to remove such lien as a matter affecting title to the Premises. If Tenant shall fail to discharge such lien within such period or fail to furnish such security, then, in addition to any other right or remedy of Landlord resulting from Tenant's said default, Landlord may, but shall not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge WX035325.5 -15- 020711 -04706084 of such lien by giving security or in such other manner as is, or may be, prescribed by law. Tenant shall repay to Landlord on demand all sums disbursed or deposited by Landlord pursuant to the foregoing provisions of this Section 19.10 including Landlord's costs, expenses and reasonable attorneys' fees incurred by Landlord in connection therewith, with interest thereon at the Stipulated Rate. Nothing contained herein shall imply any consent or agreement on the part of Landlord to subject Landlord's estate to liability under any mechanics' or the lien law. 19.11 Subordination. This Lease is subject and subordinate to ground and underlying leases, mortgages, deeds of trust and other monetary liens (collectively "Encumbrances ") which may now affect the Premises, to any covenants, conditions or restrictions of record, and to all renewals, modifications, consolidations, replacements and extensions thereof, provided, however, if the holder or holders of any such Encumbrance ( "Holder") shall require that this Lease be prior and superior thereto, within seven (7) days after written request of Landlord to Tenant, Tenant shall execute, have acknowledged and deliver any and all documents or instruments, in the form presented to Tenant, which Landlord or Holder deems necessary or desirable for such purposes. Landlord shall have the right to cause this Lease to be and become and remain subject and subordinate to any and all Encumbrances which are now or may hereafter be executed covering the Premises or any renewals, modifications, consolidations, replacements or extensions thereof, for the full amount of all advances made or to be made thereunder and without regard to the time or character of such advances, together with interest thereon and subject to all the terms and provisions thereof; provided only, that in the event of termination of any such lease or upon the foreclosure of any such mortgage or deed of trust, Holder agrees to recognize Tenant's rights under this Lease as long as Tenant is not then in default and continues to pay the Rentals and observe and perform all the provisions of this Lease to be observed and performed by Tenant. Within ten (10) days after Landlord's written request, Tenant shall execute any and all documents required by Landlord or the Holder to make this Lease subordinate to any lien of the Encumbrance. If Tenant fails to do so, then in addition to such failure constituting a default by Tenant, it shall be deemed that this Lease is so subordinated to such Encumbrance. Notwithstanding anything to the contrary set forth in this paragraph, Tenant hereby attorns and agrees to attorn to any entity purchasing or otherwise acquiring the Premises at any sale or other proceeding or pursuant to the exercise of any other rights, powers or remedies under such Encumbrance. 19.12 Recording. Concurrently with Tenant's execution and delivery of this Lease to Landlord, Tenant shall execute in recordable form and deliver to Landlord the Memorandum attached hereto as Exhibit B acknowledging the existence of this Lease, which may be recorded by Landlord in the Official Records of Santa Clara County, California upon execution of this Lease by Landlord. Following Lease Termination, Tenant shall, promptly following demand from Landlord, execute a quitclaim deed in favor of Landlord quitclaiming all of Tenant's right, title and interest under this Lease; provided, however, that Tenant's failure to deliver such quitclaim deed when requested shall not delay or prevent, or otherwise affect the expiration or termination of this Lease, which obligation shall survive Lease Termination. 19.13 Landlord's Right to Perform Tenant's Covenants. If Tenant fails to make any payment or perform any other act on its part to be made or performed under this Lease, Landlord may, but shall not be obligated to and without waiving or releasing Tenant from any obligation of Tenant under this Lease, make such payment or perform such other act to the extent 1KKS%35325.5 -16- 020711 -04706084 Landlord may deem desirable, and in connection therewith, pay expenses and employ counsel. All sums so paid by Landlord and all penalties, interest and costs in connection therewith shall be due and payable by Tenant immediately on demand, together with interest at the Stipulated Rate from the date of payment by Landlord to the date of payment by Tenant to Landlord, plus collection costs and attorneys' fees. 19.14 Tenant's Remedy. If, because of a default by Landlord under this Lease, Tenant recovers a money judgment against Landlord, such judgment shall be satisfied only out of the proceeds of sale received upon execution of such judgment and levied thereon against the right, title and interest of Landlord in the Premises and out of rent or other income from the Premises receivable by Landlord, and neither Landlord nor any of Landlords council members, officers, employees, representatives or agents shall be personally liable for any deficiency. Neither Landlord's officers, council members, representatives, employees nor agents, nor any other person or entity other than Landlord, nor any of their respective assets, shall be liable for Landlord's breach of this Lease. 19.15 Mortgagee Protection. If Landlord defaults under this Lease, Tenant will notify, by registered or certified mail, any beneficiary of a deed of trust, mortgagee of a mortgage or holder of any other monetary lien covering the Premises (`Beneficiary"), and offer such Beneficiary a reasonable opportunity to cure the default, including time to obtain possession of the Premises by power of sale or a judicial foreclosure, if such should prove necessary to effect a cure. If any Beneficiary shall require any modification to this Lease in connection with existing or future financing, Tenant shall enter into an amendment to this Lease so required by such Beneficiary as long as the same does not materially alter Tenant's rights and obligations hereunder. 19.16 Exhibits. All exhibits, amendments, riders and addenda attached hereto are hereby incorporated herein and made a part hereof. 19.17 Conditions. All agreements of Tenant contained in this Lease, whether expressed as conditions or covenants, shall be construed to be both conditions and covenants, conferring upon Landlord, in the event of a breach thereof, the right to terminate this Lease. 19.18 No Partnership or Joint Venture. Nothing in this Lease shall be construed as creating a partnership or joint venture between Landlord, Tenant, or any other party, or cause Landlord to be responsible for the debts or obligations of Tenant or any other party. 19.19 Construction. This Lease shall not be construed either for or against Tenant or Landlord, but shall be construed in accordance with the general tenor of the language. All agreements by Tenant contained in this Lease, whether expressed as covenants or conditions, shall be construed to be both covenants and conditions, conferring upon Landlord, in the event of a breach thereof, the right to terminate this Lease. This Lease shall be construed in accordance with the laws of the State of California. 19.20 Joint and Several Liability. If Tenant consists of more than one (1) person or entity, the obligations of each Tenant under this Lease shall be joint and several. 1KKS1835325.5 -17- 020711-04706084 19.21 Binding Effect. Subject to the provisions of Sections 9 and 17, all of the provisions hereof shall bind and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. 19.22 Counterparts. This Lease may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document. [Signatures appear on next page] WS1835325.5 -18- 02071"4106084 THIS LEASE is effective as of the date the last signatory necessary to execute the Lease shall have executed this Lease. TENANT: Donato R. Alvarez and Xochitl Alvarez Dated: By: RQ-;'( Title: LANDLORD: Dated: f I t I Dated: 13'(W Dated: 1KKS1835325.5 020711 - 04706084 Y O GILROY, a municipal corporation By: Title: - -S APPROVED AS TO FORM: a - &&�-� CITY ATTORNEY -19- EXIMIT A PREMISES LEGAL DESCRIPTION [To Be Attached] WB1835325.5 020711-04706084 EXHIBIT B MEMORANDUM RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Gilroy 7351 Rosanna Street Gilroy, California 95020 Attn: City Clerk RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTIONS 6103 AND 27383. I -,T, Iox[ti]: Ia7i1�I THIS MEMORANDUM is entered into as of , by and between the CITY OF GILROY, a municipal corporation ( "Landlord ") and Donato R. Alvarez and Xochitl Alvarez ( "Tenant"), with respect that certain Lease dated of even date herewith by and between Landlord and Tenant. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, certain real property located in the City of Gilroy, County of Santa Clara, State of California, as more particularly described in Exhibit A attached hereto ( "Premises "), upon the terms and conditions of the Lease. The term of the Lease shall be for sixty (60) months commencing on , 2011 and terminating on , subject to extension and sooner termination as set forth in the Lease. This Memorandum shall incorporate all of the provisions of the Lease as though fully set forth herein. This Memorandum is entered by the parties for purposes of recordation and shall not be deemed to modify, amend, alter, limit or otherwise change any of the provisions of the Lease. In the event of any conflict or ambiguity between the terms of this Memorandum and the terms of the Lease, the terms of the Lease shall prevail. IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Memorandum as of the date first set forth above. Attest: By: City Clerk Approved as to form: By: City Attorney CITY OF GILROY, a municipal corporation By: Its: Donato R. Alvarez and Xochitl Alvarez By: ('�) — — —' Its: 1KKS1835325.5 -1 020711- 04708084 STATE OF CALIFORNIA �&- ss. COUNTY OF (W4 auh4 to On � a VrIA 6 At i , before n1e, , Notary Public, personally appeared o proved to me on the basis of satisfactory evidence to be the person(s) 4bose name(s) ('Ware subscribed to the within instrument and acknowledged to me that t beVof hey executed the same in his/her /their authorized capacity(ies), and that er /their signatures) on the instrument the person(s), or the entity upon which the person(s) acted, executed the instrument. I certify tinder penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Si re U .a�� JULIE R. WHELAN ; COMM. # 1880899 (5 •o KOTARY PUBLIC - CALIFORNIA SANTA CLARA COUNTY 0 ,. COMM. EXPIRES MARCH 19 2014 j 1KKO35325.5 -2' 020711 - 04706084 CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the document. ❑ INDIVIDUAL ❑ CORPORATE OFFICERS(S) Tide(s) ❑ PARTNER(S) ❑ LIMITED ❑ GENERAL ❑ ATTORNEY -IN-FACT ❑ TRUSTEE(S) ❑ GUARDIAN /CONSERVATOR ❑ OTHER: SIGNER IS REPRESENTING: Name of Person(s) or Entity(ies) State of California ) County of Santa Clara ) On personally appeared before me, Notary Public (here insert name and title of the officer), who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capaWies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) (notary)(12 -07) ,- JULIE R. WHEN LAN U com # 1880899 (j NOTARY PUBLIC - CALIFORNIA n SANTA CLARA COUNTY . wr COMM, EXPIRES MARCH 19, 2014 (notary)(12 -07) F4vw 4T4v' 131 D►Y 1 EXHIBIT A PREMISES LEGAL DESCRIPTION All that certain real property located in the City of Gilroy, County of Santa Clara, California, being the real property designated on that certain Map of Tract No. 9342 filed for record in the Office of the Recorder of Santa Clara County, California on December 19, 2002 in Book 756 of Maps at Pages 23 and 24 as "2.76 + ACRES ROADWAY DEDICATED PER THIS MAP". —