Walton, Gary and Jean - Memorandum of Lease
DOCUMENT: 20710653
Pages:
32
~ UII U UIIII~ ~
Fees. . * No Fees
Taxes.
Copies.
AMT PAID
RECORDING REQUESTED BY
AND AFTER RECORDATION RETURN TO
City of Gilroy
7351 Rosanna St.
Gilroy, CA 95020
Attn: City Clerk
REGINA ALCOMENDRAS
SANTA CLARA COUNTY RECORDER
Recorded at the request of
City
RDE tI 005
5/13/2010
10:39 AM
APN: 841-04-013
This document is recorded for the benefit of the city of Gilroy and is entitled
to be recorded free of charge in accor ;lance with GC Section 6103 & 27383
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE ("Memorandum") is dated for reference purposes
March 1,2010 by and between GARY A. WALTON and JEAN M. WALTON ("Landlord"), and
THE CITY OF GILROY, a California municipal corporation ("Tenant").
RECITALS
Subject to the terms and conditions set forth in that certain unrecorded Lease
made effective October28, 2009 (the "Lease Effective Date"), by and between Landlord and
Tenant, as amended by Firs Amendment To Lease dated as of March 1,2010 (as amended, the
"Lease"), Landlord has leased to Tenant and Tenant has leased from Landlord the property
located at 7652 Monterey Road, Gilroy, California, Assessor's Parcel Number 841-04-013,
which property contains a building with approximately 26,572 rentable sq. feet, and associated
parking. Such real property is more particularly described in Exhibit A attached hereto and made
a part hereof.
The Term of the Lease began on February 14, 2010, and is scheduled to expire not later
than November 30, 2012. Pursuant to the Lease, Tenant has the right to extend the Lease Term
on a month to month basis in accordance with Section 1.13 of the Lease.
\ ,
The purpose of this Memorandum is to give notice of the existence of the Lease referred
to above, including, without limitation, the extension right granted to Tenant under the terms of
the Lease. This Amendment may be executed in counterparts, all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, this Memorandum has been executed by the parties hereto on
the dates set forth below.
TENANT:
LANDLORD:
CITY OF GILROY, a California
~
By:
Thomas 1. Hr.,ond, City Administrator
Dated: Lf zC:, 110
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Dated:
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APPROVED AS TO FORM:
~A') /lJ (~~
Jean M.. Walton
By: ~~ a ' ~?J{~
Linda A. Callan, City Attorney
Dated: L) / / (f /:JR- { 0
I
Dated:
'1IIJ-!/6
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EXHIBIT A
~
LEGAL DESCRlPnON
THE LAND REFERRED TO HEREIN BaOW IS SITUATED IN THE 01Y OF GILROY , COUNTY" OF SANTA
CLARA, STATE OF CAUFORNIA, AND IS DESCRIBED AS FOLLOWS:
Parcel One:
All of Lots 4,5,6, 7, 8, 9, 10 and 11, as shown upon that certain Map entftfed, Pfract No. 401 Me Alpine
Subdivision- t which Map was filed for record In the OffIce of the Recorder of the County of Santa Oal'il, State
of California, on June 16, 1947 In Book 13 of Maps, at page 28.
Excepting therefrom, the Southeasterly 5 inches of said Lot 11.
Parcel Two:
The SOutheasterlY 13.50 feet. front and rear measurements of lot 3, as shown upon that certain Map entitled,
"Tract No. 401 Me Alpine Subdivision., which Map was ftIed for record In the omce of the Recon:Ier of the
County of Santa Oara, State of CaIfomIa, on June 16, 1947 In Book 13 of Maps,.at Page 2B.
APN: 841-0+013
\ ,
STATE OF CALIFORNIA }
COUNTY OFSAimLt <2\ mf\
__ ss.
On M~ S.20 10 , before me, L. Con~ ' Notary
Public, personally appeared (? ,A l:' , who proved to me on the
basis of satisfactory evidence to be the erson(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in hislher/their
authorized capacity(ies), and that by hislher/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.
d official seal.
(Sig
(Seal)
1'........................................,.
5 .... L. CONLEY,!
~ ! COMM. NO. 1872412
s ~ NOTARY PUBLIC-CALIFORNIA ~
~ " COUNTV OF SANTA CLARA l
: · \' COMM. EXPIRES DEC. 26, 2013 :
...........................................
STATE OF CALIFORNIA }
COUNTY OF~C-l4?A
ss.
On 'AP ill \ 2. , 20 I 0 , before me, L. Co n ~ ' Notary
Public, personally appeared ::rC"~ M. llJAcron , ho 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 hislher/their
authorized capacity(ies), 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.
and and official seal.
(Seal)
1'..........................................
; it...:. L. CONLEY I
~ a COMM. NO.1872412~
~ .. NOTARY PUBLIC-CALIFORNIA g
.. COUNTYOFSANTAClARA ,
: 0"" ..., . COMM EXPIRES DEe. 26 2013 ::
........ ..II...aGII.....................
'I
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
~.
personally appeared
who proved to me on the basis o~atisfactory evidence to
be the person~ whose name~JJ9Vare-subscribed to the
within instrument and acknowledged to me that
~hey executed the same in~ir authorized
capacity(iE)$), and that by@/RerftI::leir signature~ on the
instrument the person(~, or the entity upon behalf of
which the personQO acted, executed the instrument.
I~------
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I Notary PublIc - CClltfomta I
Santa Clara County ~
1
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing paragraph is
true and correct.
WITNESS
Place Notary Seal Above
Signature
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached
LutSL
Title or Type of Docu
Document Date:
Number of Pages:
Signer(s) Other Than Named Above:
Capaclty(ies) Claimed by Signer(s)
Top of thumb here
Signer's Name:
D Individual
D Corporate Officer - Title(s):
D Partner - D Limited D General
D Attorney in Fact
D Trustee
D Guardian or Conservator
D Other:
Signer's Name:
D Individual
D Corporate Officer - Title(s):
D Partner - D Limited D General
D Attorney in Fact
D Trustee
D Guardian or Conservator
D Other:
RIGHT THUMBPRINT
OF SIGNER
RIGHT THUMBPRINT
OF SIGNER
Top of thumb here
Signer Is Representing:
Signer Is Representing:
~~~
@2007 National Notary Association. 9350 De Soto Ave.. PO. Box 2402 . Chatsworth, CA 91313-2402. www.NationaINotary.org Item #5907 Reorder: Call Toll-Free 1-800-876-6827
LEASE AGREEMENT BETWEEN THE CITY OF GILROY AND
GARY A. AND JEAN M. WALTON
RELATING TO 7652 MONTEREY ROAD
This Lease ("Lease") is made by and between Gary A. and Jean M. Walton
("Landlord") and the City of Gilroy, a California municipal corporation ("Tenant") and
is entered into as of the date(s) set forth below to be effective October 28,2009.
For valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as follows:
1. BASIC LEASE TERMS
Following is a description of certain basic terms ofthis Lease. Each reference in
this Lease to the "Basic Lease Terms" shall mean and refer to the following collective
terms, the application of which shall be governed by the provisions in the remaining
sections of this Lease.
1.1
Effective Date:
October 28, 2009
1.2 Addresses For Payments. Notices And Deliveries:
Landlord:
Gary A. and Jean M. Walton
P.O. Box 1265
Morgan Hill, CA 95038
Telephone: (408) 847-8197
Facsimile: (408) 408-847-4164
Tenant:
City of Gilroy, California
7351 Rosanna 8t.
Gilroy, California 95020
Attention: City Administrator
Telephone: (408) 846-0202
Facsimile: (408) 846-0500
1.3 Premises Location: The entire building known as 7652 Monterey Road in Gilroy
California as well as the adjacent parking lot.
1.4 Address of Building(s): 7652 Monterey Road Gilroy California
1.5 Rentable Area:
. Premises Rentable Square Feet: Approximately 26,572 sq. feet, which
includes the parking stalls as shown in the Parking Plan attached hereto as
Exhibit A.
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. Building(s) Rentable Square Feet: 9,476.5 sq. ft.
1.6 Building Plan: See Exhibit "A".
1.7 Parking: Landlord shall provide, as part of the Base Rent, exclusive use of all
parking areas on the north and a portion of the parking area on the east and north side of
the building , shown in Exhibit "B".
1.8 Permitted Use: (i) General, administrative, and related uses consistent with a
public library building, and (ii) any other legal use.
1.9 Term: The term of this Lease shall begin on the Rent Commencement Date.
Subject to early termination or extension of this Lease as provided herein, the term of this
Lease shall through 11 :59 p.m. on November 30, 2012 (the "Term").
1.10 Intentionally Omitted.
1.11 Rent Commencement Date: The "Rent Commencement Date" for this Lease is
December 15, 2009, contingent upon Landlord's substantial completion of Tenant
Improvements pursuant to Section 4. If the Tenant Improvements are not complete by
December 15, 2009, the Rent Commencement Date shall not occur on that date but,
instead, shall occur on such date as the Ten~t Improvements are complete and approved
by City. In the event of a delay in the Rent Commencement Date, Base Rent shall be
prorated in accordance with Section 4.3.
1.12 Expiration Date: Subject to early termination or extension of the Lease as
provided herein, the base Term of this Lease ends at 11 :59 p.m. on November 30,2012.
1.13 Holdover Tenancy: Option to Extend Lease Term: Tenant shall have the right to
extend the Lease on a month to month basis by giving the Landlord sixty (60) days
written notice that it intends to become a month to month tenant. Rent after expiration of
the Lease Term will be paid monthly at the rate set forth in Section 1. 14(b)(ii), subject to
any increases as set forth in Section 1. 14(b)(iii). Neither party may terminate said
holdover tenancy on fewer than sixty (60) days' notice, unless the other party is in breach
of this Lease.
1.14 Base Rent:
(a) Subject to reduction as set forth in Section 4.3, the Base Rent for the entire Term
of the Lease shall be three hundred thirty-six thousand eight hundred
seventy-four and 34/100 dollars ($336,874.34) payable as a lump sum on the
Rent Commencement Date.
(b) For purposes of any reductions, refunds or prorations in the Base Rent, the base
Rent shall be deemed to have been calculated as follows:
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(i) From the Rent Commencement Date through November 30, 2012, the
Base Rent shall be $1.00 per square foot of the building (9,476.5 square
feet), per month subject to section 1.11 above.
(ii) During any holdover period after November 30, 2012, Base Rent shall be
paid monthly at the rate of $1.093 per rentable square foot. Said Base Rent
shall be increased each December 1 st thereafter by three percent (3%).
1.15 Operating Expenses: All expenses related to the operation and exterior
maintenance, including landscaping and landscape maintenance of the Premises and all
insurance costs and repairs shall be paid by Landlord except Tenant will pay for all utility
costs and interior janitorial services. Landlord's insurance requirements shall be limited
to customary "Landlord Coverage" as described in Section 12. Landlord is not
responsible for Tenant's interior inventory, equipment, personal property and liability
coverage.
1.16 Real Estate Taxes: Tenant shall cooperate and assist Landlord in its efforts to
apply for and receive exemptions from taxes by providing space as a free public library
under Article XIII, Section 3( d) of the California Constitution, which provides an
exemption to free public libraries from the obligation to pay ad valorem property taxes.
Landlord agrees that Tenant will not be charged an ad valorem property tax share for the
first year of occupancy. Should the electorate amend the California Constitution to delete
the ad valorem tax exemption for free public libraries, Tenant shall thereafter be
obligated to pay its pro-rata share of such taxes.
1.17 Utilities: Tenant shall provide and pay for all reoccurring charges that are
separately metered including, but not limited to, gas, electric services, telephone service,
and garbage removal from the exterior bin.
1.18 Tenant Improvements: Landlord, at Landlord's sole expense and cost, shall
complete the construction of certain tenant improvements in accordance with Exhibit
"c" ("Tenant Improvements") by the R(;mt Commencement Date described in Section
1.11 of this Lease. Landlord must submit a complete plan submittal conforming to the
attached City of Gilroy Plan Submittal Requirements by October 28, 2009 to obtain all
required city permits by December 15, 2009. If Landlord does not submit a complete plan
submittal conforming to City of Gilroy submittal requirements by October 28,2009 or is
unable to complete construction of Tenant Improvements on or before January 15,2009
(the "Outside Completion Date"), Tenant may, at any time thereafter, terminate the
Lease and Landlord shall not be permitted to cure the breach as stated in Section 19.2
(Landlord Default). For purposes of this Lease, the Outside Completion Date may be
extended by one (1) day for each day that delay in construction is the result of Tenant
Delay orforce majeure, as those terms are defined in Section 4.2, herein.
1.19 Exhibits: The exhibits to this Lease, Exhibits "A" through "C," inclusive are
attached to this Lease and incorporated herein by this reference.
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1.20 Reimbursement of Permit Fees: Tenant shall reimburse Landlord for the
reasonable cost of the required drawings for submission to City for the required permits
and the cost of Ten ant Improvement permit fees required by Tenant under this Lease.
In the event of any conflict between a provision in this summary of Basic Lease Terms
and a provision in the balance of the Lease, the latter will control.
2. PREMISES
2.1 Premises. Landlord leases to Tenant, and Tenant hires from Landlord, the
premises ("Premises") identified in Section 1.3, which includes both the "Building" (as
defined in Section 2.2 below) and the Parking Lot (as defined in Section 2.3 below). The
Premises contain the rentable square feet identified in Section 1.5.
2.2 Building. The Premises contains the "Building", which is identified in Section
1.4 and more particularly described in the legal description set forth in Exhibit "B"
("Legal Description"). As used in this Lease, the term "Building" includes all of the land
on which the Building is located and all appurtenances thereto. Tenant shall have the
right to use the entrances, lobbies, corridors, stairs, elevators, walkways, hallways,
bathrooms and other common areas of the Building and adjacent Parking lot of which the
Building is a part ("Common Areas").
2.3 Parking. Landlord shall provide Tenant with exclusive use of all on-site parking
identified in Section 1.7 and Exhibit "B" (the "Parking Lot"). Upon notification by
Tenant that unauthorized use of the Parking Lot is occurring or is likely to occur,
Landlord at Landlord's sole cost and expense shall be responsible for enforcing the
exclusive use of the Parking Lot including, but not limited to, towing unauthorized cars.
3. USE OF PREMISES
The Premises shall be used for general, administrative, and related uses consistent with a
public library governed by the policies and rules adopted by the Santa Clara County
Library Joint Powers Authority, or any other legal use.
4. TERM AND DELIVERY OF POSSESSION
4.1 Commencement and Term. This Lease shall have the "Term" shown in Section
1.9, commencing on the "Rent Commencement Date" as defined in Section 1.11 and
expiring on the "Expiration Date" as defined in Section 1.12. The Rent
Commencement Date shall commence after the Landlord delivers possession of the
Premises together with access to the Building(s) and all appurtenances substantially
complete (as defined herein), in broom clean condition and Tenant accepts beneficial
occupancy thereof. Within thirty (30) calendar days after the Rent Commencement Date,
the parties shall execute an amendment to this Lease, which amendment shall specify the
Rent Commencement Date of the Lease. Failure to so document the Rent
Commencement Date shall not otherwise affect the parties' rights under this Lease. For
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purposes of this Lease, City's City Administrator is hereby delegated the authority to
execute the amendment referred to in this Section 4.1 without additional action of the
Gilroy City Council.
Once Landlord substantially completes the Tenant Improvements, Landlord shall provide
written notice to Tenant. Tenant shall promptly inspect the space together with Landlord.
The Premises shall be deemed accepted by Tenant on the date that Tenant agrees in
writing that the Tenant Improvements are substantially complete, which agreement shall
not be unreasonably withheld.
For purposes of this Lease, Tenant's agreement that the Tenant Improvements are
"substantially complete" or in a state of "substantial completion" means that the Tenant
Improvements, other areas of the Building, and all other matters necessary for the
Tenant's access to the Premises and its occupancy, possession, use and enjoyment
thereof, as provided in this Lease, have been completed or obtained, excepting only such
minor matters as do not materially interfere with, or diminish, such access, occupancy,
possession, use or enjoyment. Landlord shall complete any and all remaining punch list
items within fifteen (15) days after Tenant's acceptance of substantial completion.
4.2 Rent Commencement Date~ Delays. Landlord shall deliver possession of the
Premises with the Tenant Improvements substantially complete and free of any
Hazardous Materials (as defined in Section 15) by the Rent Commencement Date
specified in Section 1.11 of this Lease, subject to reasonable extensions of the Rent
Commencement Date as provided for herein. For purposes of this Lease, "free of
Hazardous Materials" means that the Premises and the Building are free of Hazardous
Materials in amounts or at levels that would trigger or authorize any governmental entity
with jurisdiction over the Building and/or Common Areas to require Landlord to
remediate, remove or obtain environmental permits for any such Hazardous Materials.
The Rent Commencement Date shall be extended by the same number of days that
Landlord's construction is delayed by force majeure (as defined herein) or design or
construction are delayed by "Tenant Delays" (as defined herein). For purposes of this
Lease, ''force majeure" means acts of God, war, civil unrest, fires, floods, earthquakes or
strikes or unforeseeable causes beyond the reasonable control and without the fault or
negligence of the Landlord or any Landlord contractor, subcontractor or supplier. For
purposes of this Lease, "Tenant Delays" means a delay caused by Tenant that affects the
critical path of the construction schedule for tenant improvements arising out of (1)
Tenant's request that work not be ongoing during normal working hours or (2)
unreasonable Tenant interference during construction. Within five (5) days after the
commencement of any such delay by force majeure or Tenant Delay, Landlord shall
provide notice to the Tenant of the causes of delay. The Tenant shall ascertain the facts
and the extent of the delay. If the facts warrant an extension, the Rent Commencement
Date shall be extended.
4.3 Delay in Delivery. Subject to the foregoing, if Landlord has not delivered
possession of the Premises to Tenant substantially complete by the December 15, 2009
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5
set forth in Section 1.11then rent shall be reduced to reflect that Tenant shall owe no rent
for each day that Landlord's delivery of possession of the Premises is delayed. Such rent
reduction shall be credited all at the commencement of the Term and deducted from the
lump sum Base Rent payment due on the Rent Commencement Date.
For purposes of this Section 4.3, any reduction in rent related to delay in delivery shall
reflect a monthly rent of one dollar ($1.00) per square foot, based on a thirty one (31) day
month.
4.4 Access to Premises. Tenant shall have access to Premises upon delivery of a fully
executed Lease for the purpose of installing data, telecommunications equipment and
trade fixtures. Tenant shall be responsible for constructing and installing, at Tenant's
expense, Tenant's trade fixtures and equipment (including, without limitation, data and
telecommunications equipment and shelving not provided by Landlord as part of the
Tenant Improvements). Tenant shall take reasonable precautions not to interfere with the
construction and installation by Landlord of the Tenant Improvements. Landlord shall
take reasonable precautions not to interfere with Tenants construction and installation.
4.5 Holding Over. Any holding over after the expiration of the Term or the extended
Term, if any, shall be deemed a tenancy from month-to-month, but otherwise on the same
terms, covenants and conditions as set forth in this Lease.
5. BASE RENT
Except as otherwise set forth herein, Tenant shall pay Landlord the Base Rent for the
entire Term of this Lease as a lump sum on the Rent Commencement Date.
6. OPERATING EXPENSES AND TAXES
Landlord, at Landlord's expense, shall pay for all operating expenses and taxes for the
Premises and Building, except to the extent, if at all, otherwise provided in Sections 1.15
and 1.16 of this Lease. The economic provisions of this Lease have been accepted by
Tenant with the understanding and agreement of Landlord that, except to the extent
otherwise provided in Sections 1.15 and 1.16, Tenant is not responsible for the payment
of operating expenses or additional rent of any kind and that all costs of taxes, operating
expenses, whether or not currently contemplated by the parties, are the sole responsibility
of Landlord at Landlord's expense. Routine rnaintenance ofHV AC and lighting fixtures
shall be the responsibility of Tenant.
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7. UTILITIES
Landlord shall provide utilities to the Premises and Building on a twenty-four hour,
seven-day per week basis during the entire Term of this Lease as well as any extension(s)
thereof. Tenant shall pay for such utilities to the Premises as provided in Section 1.17 of
this Lease.
8. TENANT IMPROVEMENTS
8.1 Tenant Improvements. Landlord shall construct the Tenant Improvements
described in Exhibit "C". Landlord shall be responsible for the cost of those Tenant
Improvements described as "Landlord's Work" in Exhibit "C". Tenant shall be
responsible for the cost of those Tenant Improvements described as "Tenant's Work" in
Exhibit C, unless otherwise specified in said Exhibit. All contractors utilized by
Landlord shall be paid prevailing wages. Landlord shall be responsible at its sole expense
for monitoring and maintaining all prevailing wage records and shall defend, indemnify
and hold harmless Tenant from any and all claims, demands, judgments, liabilities or
losses, costs and expenses (including attorneys' fees and costs, fees, penalties, fines and
punitive damages) arising out of or in connection with the any claims made with regard
to a failure to pay prevailing wage for such Tenant Improvements.
8.2 Condition of Premises and Building. In addition to the foregoing, it is understood
and agreed that it is Landlord's obligation to deliver the Premises to Tenant, as well as
the Building, with all building systems and Common Areas in good order, condition and
repair, suitable for their intended uses and in compliance with all applicable
governmental laws, regulations, codes and other legal requirements.
9. SIGNS
Landlord, at Landlord's sole cost and expense, will provide adequate signage in the
parking lot notifying the public that parking is for the exclusive use of Tenant. As long
as the City subleases the property to the Santa Clara County Library District Joint Powers
Authority Board ("Library lP A"), said sign shall specifically indicate that the parking lot
is for use of employees and patrons of the Gilroy Public Library. At the request of the
JP A, the Landlord will also provide signs indicating danger from the adjacent railroad
tracks. Additional costs of such signs (if any) shall be added to costs of the Tenant
Improvements, upon approval by the Tenant's City Administrator. If Tenant asks for any
other signage, or additional signage, then Tenant shall pay for such costs. So long as
Tenant obtains all governmental approvals required for such signs, Tenant may install
additional or replacement signage on the Premises and/or Building exterior.
10. ALTERATIONS
Tenant may make or authorize alterations or improvements to the Premises without the
consent of Landlord unless: 1) the alteration or improvement materially affects the
buildings mechanical, electrical, plumbing or life safety systems; 2) the alteration or
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improvement affects the structural components of the building, or 3) the cost of the
alternation or improvement exceeds five thousand dollars ($5,000.00). When Landlord's
consent is not required, Tenant shall provide Landlord with notice of said alteration and
will provide Landlord with a copy of any related plans/permits upon request. Tenant
shall have the right to construct any alternations and improvements with its own
contractors, architects, and engineers, subject to Landlord's reasonable approval. Tenant
may remove Tenant's trade fixtures at any time and from time to time without the
consent of, and without compensating, Landlord.
11. MAINTENANCE AND REPAIRS; WARRANTY; PREMISES DEFECT
11.1 Landlord Obligations. Landlord shall deliver and, at Landlord's expense,
maintain during the entire term of this Lease, the exterior and interior of the Building and
the Premises and all Building systems the structure and roof of the Building, in good
order, condition and repair, and in compliance with all governmental regulatory standards
for the intended use including, but not limited to: structural, plumbing, electrical, gas,
mechanical, HV AC, roof, life safety, building code, health code, fire safety and the
provisions of the Americans with Disabilities Act (ADA). In the event that it is
determined that this warranty and covenant have been violated, it shall be the obligation
of the Landlord, after written notice from Tenant, to promptly, at Landlord's expense,
rectify any such violation. Notwithstanding the above, Tenant shall be responsible for:
(i) maintaining and repairing the light fixtures, carpeting and other fixtures installed as
Tenant Improvements within the rentable square footage of the Premises (as long as any
repairs were not caused by any act or omission of Landlord in installing the same); (ii)
maintaining, and replacing, if necessary, the windows on the Premises; (iii) fixing minor
interior blockages to toilets and sinks (which blockages are not caused by Landlord or a
preexisting condition on the Premises); and (iv) providing routine maintenance and minor
repairs to the HV AC, not to exceed two thousand dollars ($2000) per year.
Without limiting the foregoing, Landlord shall, at its expense, maintain the structural
integrity of the Building and make all necessary repairs to, and replacements of, the
roof, roof covering, exterior walls and exterior doors of the Building; correct any
defects due to defective design or construction of the BuildingIPremises (including
Tenant Improvements) or faulty workmanship or defective materials in the
Building/Premises; remediate and remove Hazardous Materials (as defined herein)
prior to Tenant's possession of the Premises. In addition, Landlord shall maintain,
repair and replace all landscaping (if any), the Parking Lot and sidewalks appurtenant
to the Premises.
Landlord at its sole cost and expense shall also paint the exterior of the Building as
required to maintain a good appearance including, without limitation, any painting
required to remove graffiti; and provide and be responsible for fire extinguishers.
Tenant shall be responsible for pest and rodent control on the Premises.
Tenant shall notify Landlord when repairs to and/or repainting of the Premises are
required. All contractors utilized by Landlord shall be paid prevailing wages. Tenant
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may provide any maintenance that Landlord fails to provide (including graffiti removal),
after three (3).days notice, and deduct the cost from the rent.
11.2 Tenant Maintenance. Landlord acknowledges and agrees that Tenant may use its
own unlicensed forces (or those of its subtenant or the County of Santa Clara), as allowed
by state law, to perform routine maintenance duties, or construct improvements or
alterations as assigned or permitted pursuant to this Lease. Tenant's employees shall
receive wages as their sole compensation for this work. Such employees shall be
working in their official capacity as metpbers of the City's, subtenant's or County's
maintenance staff.
11.3 Premises Defect. If a Premises Defect, as defined below, occurs or is discovered,
then all rent payable by Tenant hereunder shall be abated or reduced, as appropriate, for
the period that Tenant is unable to fully utilize the Premises due to the Premises Defect.
The amount of the abatement or rent reduction shall be calculated by determining the
proportion of any interference with, or other adverse effect on, Tenant's use of the
Premises, as reasonably determined by Tenant. Upon discovery of a Premises Defect,
Tenant shall notify the Landlord and cooperate with efforts to remedy said defect. If any
Premises Defect is not corrected or the damage resulting therefrom repaired so that the
Premises shall be reasonably suitable for Tenant's intended use within sixty (60) calendar
days following Landlord's receipt of notice of such Premises Defect, then Tenant shall be
entitled to terminate this Lease by delivery of written notice to Landlord; Landlord shall
refund any prepaid rent, prorated from the date that Tenant noticed Landlord of the
Premises Defect. Such rent refund shall be made within ten (10) business days after the
Lease termination. Landlord shall not be responsible for the costs of abating a Premises
Defect to the extent such Premises Defect is caused by acts of Tenant, its subtenant or
any of their agents, employees or contractors.
For purposes of this Lease, a "Premises Defect" shall mean any event or condition that
prevents Tenant from accessing or using all or any portion of the Premises resulting from:
(a) any repair, maintenance or alteration performed by Landlord which unreasonably
interferes with Tenant's use of, or access to, the Premises, the Building and/or the
Parking (or any portion thereof); (b) any failure of Landlord to provide access to services
or utilities; (c) any failure of Landlord to provide access to the Building, the parking
facility (or any portion thereof); (d) presence of any Hazardous Materials in, on or about
the Premises; and/or (e) any other cause within the reasonable control or that is the legal
responsibility of Landlord.
12. INSURANCE
12.1 Tenant Liability Insurance. Throughout the term of this Lease, Tenant, at its
expense, shall maintain in full force and effect, either commercial general liability
insurance or self-insurance covering bodily injury (including death), personal injury and
property damage occurring in, on or about the Premises. Such insurance shall be written
on a commercial general liability form or on a comprehensive general liability form
covering the hazards of premises operations, products/completed operations, independent
contractors, advertising, contractual, broad form of property damage and personal injury.
IVPAPP\803205,2
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Notwithstanding the above, if at any time during the Term of this Agreement Tenant shall
elect to become self insured or carry deductible liability insurance, it is agreed that the
responsibility of Tenant under this paragraph shall be comparable to the responsibility of
a commercial insurance carrier providing public liability insurance. If Commercial
General Liability insurance is obtained, such insurance shall:
(a) Have limits in an amount of not less than one million dollars ($1,000,000) per
occurrence and two million dollars ($2,000,000) aggregate.
(b) Name Landlord, its officers, officials, agents, employees and volunteers
individually and collectively, as additional insureds.
(c) Apply for additional insureds as primary insurance and any other coverage
maintained by Landlord, its officers, agents and employees shall be excess only
and not contributing with the insurance required under this paragraph.
12.2 Landlord Liability Insurance. Throughout the term of this Lease, Landlord, at its
expense, shall maintain in full force and effect commercial general liability insurance
covering bodily injury (including death), personal injury and property damage (including,
without limitation, the roof and structure of the Building) occurring in, on or about the
Premises. Such insurance shall be written on a commercial general liability form or on a
comprehensive general liability form covering the hazards of premises operations,
products/completed operations, independent contractors, advertising, contractual, broad
form of property damage and personal injury. In addition, such insurance shall:
(a) Have limits in an amount of not less than one million dollars ($1,000,000) per
occurrence and two million dollars ($2,000,000) aggregate.
(b) Name Tenant, City of Gilroy, the Gilroy City Council, the Santa Clara County
Library District Joint Powers Authority Board (or other subtenant, as the case
may be) and any other of Tenant's officers, agents, and employees, individually
and collectively, as additional insureds.
(c) Apply for additional insureds as primary insurance and any other insurance
maintained by Tenant shall be excess only and not contributing with the insurance
required under this paragraph.
12.3 Tenant Property Insurance. Tenant shall procure and maintain, at Tenant's
expense, fire and property insurance, or self insurance, coverage for all office furniture,
trade fixtures, office equipment and other items of Tenant's property in, on, at or about
the Premises under a standard "all risk" policy, excluding earthquake and flood, or shall
otherwise be self-insured as to such property. If commercial insurance is used, then the
coverage shall be for not less than ninety (90) percent of the replacement value of such
property.
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12.4 Landlord Property Insurance. Landlord shall maintain, at Landlord's expense, a
policy or policies of fire and property insurance on all real property owned by Landlord
covered by this Lease including, without limitation, the Building/Premises and the Tenant
Improvements constructed by Landlord pursuant to this Lease under a standard "all risk"
policy. Such insurance shall cover at least the following perils: fire and extended
coverage, flood, smoke damage, vandalism, malicious mischief, and sprinkler leakage.
The contract shall insure for the full insurable replacement value of the
Building/Premises, including Tenant Improvements. Landlord may, but will not be
required to, maintain, earthquake and flood insurance.
12.5 Waiver of Subrogation. Except as may be specifically provided for elsewhere in
this Lease, Landlord and Tenant each release the other and waive all rights of recovery
against the other on account of any loss or damage to the property of Landlord or Tenant,
as the case may be, including the Premises or its contents, arising out of or incident to
perils which they have insured against or are required to insure against hereunder,
whether by self-insurance or a policy of insurance, which perils occur in, on or about the
Premises, whether due to the negligence of Landlord or Tenant or their agents, employees
contractors or invites, to the extent of such insurance (including any deductibles).
Subject to Tenant's right to self-insure, each party shall obtain any special endorsements,
if required by their insurer, to evidence compliance with the aforementioned waiver.
12.6 Insurance Companies and Certificates of Insurance. All commercial insurance
shall be obtained from financially sound and responsible carriers qualified to do business
in the State of California and having ratings of not less than "A or better" in Best's
Insurance Guide. Landlord shall deliver to the Tenant, at the time Landlord executes the
Lease, certificates of insurance required herein. All certificates shall expressly provide
that not less than thirty (30) days prior written notice shall be given to all insureds, and
additional insureds, in the event of material alteration to or cancellation or non-renewal of
the coverage evidenced by such certificates. All additional insureds shall be indicated on
the certificate. At the written request of Tenant, the Landlord shall deliver full and
accurate copies of all insurance policies.
12.7 Insurance Related To Construction On Premises. Landlord shall require the
construction contractor constructing Tenant Improvements on the Premises to carry all
appropriate insurance coverage at appropriate levels of coverage related to its
construction activities including, without limitation, general liability coverage in an
amount of not less than one million dollars ($1,000,000) per occurrence and two million
dollars ($2,000,000) in the aggregate, broad form statutory California Workers'
Compensation insurance with employer's liability coverage of not less than one million
dollars ($1,000,000) per occurrence and contractor's equipment insurance. Tenant and
Landlord shall be named as additional insureds as to such contractor insurance.
12.8 Entity Purchasing and/or Maintaining Insurance. For purposes of this Lease, any
insurance, or self insurance, required to be purchased and maintained by Tenant may be
purchased and maintained by subtenant instead as long as such insurance otherwise meets
the requirements set forth herein.
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13. DAMAGE TO PREMISES
13.1 Partial Damage or Destruction. If the Premises shall be partially damaged or
destroyed, Landlord shall promptly restore the Premises to their previous condition and
make the same safe for Tenant's use and occupancy. In such case, rent shall abate to the
extent of the interference with Tenant's use of the Premises until the Premises shall be so
restored; provided, however, that should the Premises and improvements not be so
restored within sixty (60) days of the date of such damage, Tenant may, at its option,
cancel and terminate this Lease. If so terminated, any rent paid in advance by Tenant
shall be refunded to it within ten (10) business days, and Tenant shall be allowed to
remove its trade fixtures and personal property (to the extent salvageable).
13.2 Total Damage or Destruction. If the Premises shall be completely damaged or
destroyed, this Lease shall terminate on the date of such damage or destruction. If so
terminated, any rent paid in advance by Tenant shall be refunded to it within ten (10)
business days and Tenant shall be allowed to remove its trade fixtures and personal
property (to the extent salvageable).
14. CONDEMNATION
14.1 Total Condemnation. If the whole of the Premises is acquired or condemned by
eminent domain, inverse condemnation or sold in lieu of condemnation for any public or
quasi-public use or purpose ("Condemned"), the term of the Lease shall terminate as of
the date title vests in the condemning authority and rent shall cease on the earlier of the
date title is so vested or the date the condemning authority othetwise obtains possession
of the Premises.
14.2 Partial Condemnation. If any part of the Premises, Building or Common Areas is
Condemned and such partial Condemnation renders the Premises unusable for the normal
business of Tenant, as reasonably determined by Tenant, then Tenant shall have the right
to terminate this Lease and rent shall be abated on the earlier of the date that title vests in
the condemning authority or the condemning authority otherwise obtains possession of
any portion of the Premises, Building or Common Areas that renders the Premises
unusable for Tenant's purposes. If such Condemnation is not sufficiently extensive to
render the Premises unusable for the normal business of Tenant, as reasonably
determined by Tenant, then Landlord shall restore the Premises to a condition
comparable to its condition immediately prior to such Condemnation, less the portion
thereof lost in such Condemnation, and this Lease shall continue in full force and effect
and the rent shall be reduced, as of the date title vests in the condemning authority, by an
amount proportionate to the degree of reduced utility of the Premises caused by the
Condemnation (as reasonably determined by Tenant).
14.3 Landlord's Award. If the Premises are wholly or partially condemned, except as
otherwise provided herein, Landlord shall be entitled to the entire award except as
follows. Tenant shall be entitled to claim and recover from the condemning authority the
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difference between the present market rental value of the comparable premises for the
remainder of the Lease Term and the rent payable for the remainder of the Lease Term
(commonly referred to as the "bonus value" of the Lease). In addition, Tenant shall have
the right to make a separate claim in the Condemnation proceeding for the taking of the
unamortized or undepreciated value of any tenant improvements owned by Tenant that
Tenant has the right to remove at the end of the Lease Term and that Tenant elects not to
remove, the reasonable removal and relocation costs for any tenant improvements that
Tenant has the right to remove and elects to remove, relocation costs under Government
Code Section 7262 or other applicable law, the claim for which Tenant may pursue by
separate action independent of this Lease and any other amount in addition to the
foregoing that does not reduce the amount of the award payable to Landlord. Tenant
shall have the right to negotiate directly with condemnor for the recovery of the portion
of the Condemnation award that Tenant is entitled to under this Section. Upon
Condemnation, any rent paid in advance by Tenant shall be refunded to it within ten (10)
business days.
15. HAZARDOUS MATERIALS
15.1 Compliance with Environmental Laws. Tenant, as to the Tenant's use and
occupancy of the Premises, and Landlord, as to Landlord's ownership and use of the
BuildinglPremises and performance under this Lease, shall comply with all federal, state
and local laws, ordinances, regulations, rules or requirements including, but not limited
to, those relating to worker safety, public health and the environment. Specifically, but
without limiting Tenant's and Landlord's obligations described above, Tenant and
Landlord shall establish and adhere to any hazardous material management plan required
by the County of Santa Clara, City of Gilroy or any other federal, state or local
governmental agency having jurisdiction. Notwithstanding the foregoing, Tenant may
use and store Hazardous Materials commonly used in its intended use for the Premises so
long as such use and storage complies with all applicable laws and regulations. The
parties agree that any liability, damage, loss, costs and obligations arising out of or
aggravated by exposure to asbestos or asbestos removal required under the law and this
Lease shall be the sole responsibility of the Landlord.
15.2 Notification of Release. Tenant and Landlord will immediately notify the other
orally (with a written notice to follow within five days) if it knows or has reasonable
cause to believe that a release of Hazardous Material has come, or will come to be,
located on, in about or beneath the Premises in violation of applicable laws, provided that
such notification obligation shall not in itself imply the existence of a remediation
obligation on the part of Ten ant or Landlord.
15.3 Tenant Indemnification. Tenant shall indemnify, defend and hold Landlord, its
shareholders, officers, agents, employees, successors and assigns harmless from any and
all claims, demands, judgments, damages, liabilities or losses, costs and expenses
(including attorney's fees and costs, consulting fees and expert fees), response and/or
removal cost (including costs associated with site restoration, monitoring, corrective
action, or closure), penalties, and fines arising out of or in connection with the handling,
IVPAPP\80J205.2
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storage, use, generation, treatment, manufacture, disposal, investigation, management or
release of any Hazardous Materials by Tenant unless such Hazardous Materials were
otherwise introduced onto the Premises by the Landlord or a third party under control of
the Landlord or were introduced onto the Premises or the Building by any third party
prior to the Rent Commencement Date.
15.4 Landlord Indemnification. Landlord shall indemnify, defend and hold Tenant, its
shareholders, officers, agents, employees, successors and assigns harmless from any and
all claims, demands, judgments, liabilities or losses, costs and expenses (including
attorneys' fees and costs, consulting fees and expert fees), response and/or removal cost
(including costs associated with site restoration, monitoring, corrective action, or
closure), penalties, fines and punitive damages arising out of or in connection with the
handling, storage, use, generation, treatment, manufacture, disposal, investigation,
management or release of any Hazardous Materials in or about the Premises, the Building
or Project of which the Building is a part caused by any person or entity other than
Tenant.
15.5 "Hazardous Materials." Hazardous Materials shall mean any hazardous or toxic
substance, material or waste at any concentration that is or becomes regulated by the
United States, the State of California or any other governmental authority having
jurisdiction over the Building/Premises. Hazardous Materials includes, without
limitation, any "hazardous substance," "hazardous waste," "hazardous material, "toxic
substance," "solid waste," or "pollutant or contaminant as defined in the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA), 42 USC Sections
9601, et. seq.; the Resource Conservation and Recovery Act (RCRA), 42 USC Section
6901, et. seq.; the Toxic Substances Control Act (TSCA), 15 USC Section 2601, et. seq.;
the Insecticide, Fungicide, Rodenticide Act, 7 USC Section 136, et. seq.; the
Occupational Safety and Health Act, 29 USC Section 655 and 657; the Clean Air Act, 42
USC Section 7401, et. seq.; the Clean Water Act, 33 USC Section 1251, et. seq.; the Safe
Drinking Water Act, 42 USC Section 300f, et. seq., the California Hazardous Substances
Account Act, Health and Safety Code Section 25,300 et. seq.; the California Hazardous
Waste Control Act, Health and Safety Code Section 25, 1090, et. seq.; the California Safe
Drinking Water and Toxic Enforcement Act, Health and Safety Code Section 24249.5, et.
seq., the Porter-Cologne Water Quality Act, Wat Code Section 13,000 et seq., together
with any amendments of or regulations promulgated under the statutes cited above any
other federal, state or local law, statute, ordinance or regulation now in effect or later
enacted that pertains to occupational health or industrial hygiene, or the regulation or
protection of the environment, including ambient air, soil, soil vapor, groundwater,
surface water or land use. This shall include, without limitation, any asbestos or PCBs.
16. ESTOPPEL
Each party (as "responding party") shall at any time upon not less than thirty (30) day's
prior written notice from the other party ("requesting party") execute, acknowledge and
deliver to the requesting party 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
IVPAPP\B03205.2
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modification and certifying that this Lease, as so modified, is in full force and effect) and
the date to which the rent and other charges are paid in advance, if any, and (b)
acknowledging that there are not, to the responding party's knowledge, any uncured
defaults on the part of the requesting party, or specifying such defaults if any are claimed.
For purposes of the City, the City Administrator or his/her designee shall have the
authority to execute such an estoppel.
17. SUBORDINATION
Landlord warrants and represents that it holds fee simple title to the Building/Premises.
On or before the execution of this Lease, the parties shall agree and Landlord shall
provide to Tenant a non-disturbance and attornment agreement ("SNDA") in a form
reasonably acceptable to Tenant signed by the holders of all notes or other obligations
secured by existing mortgages, deeds of trust or other security instruments affecting the
Building and Premises. Subject to the execution of such an SNDA by all such lenders
and other security holders, Tenant agrees, in consideration of the warranties and
conditions set forth in this section, that the Lease shall be subject to and subordinate to
any recorded mortgage, deed of trust, or any other hypothecation or security now or
hereafter placed upon the Premises. Notwithstanding such subordination, Tenant's right
to quiet possession of the Premises shall not be disturbed. Landlord will include in any
future mortgage, deed of trust or other security instrument to which this Lease becomes
subordinate, or in a separate SNDA, a provision to the foregoing effect. Within thirty (30)
business days next following the Tenant's receipt of a written demand, Tenant shall
execute such instruments as are reasonably acceptable to Tenant to evidence the
subordination of this Lease provided such instrument does not interfere with the full
enjoyment of any right granted to the Tenant under this Lease. No such subordination, to
either existing or future mortgages, deeds of trust or other security instrument shall
operate to affect adversely any right to the Tenant under this Lease so long as the Tenant
is not in default under this Lease.
In the event of any sale of the Premises or any portion thereof by foreclosure, or the
giving of a deed in lieu of foreclosure, the Tenant will be deemed to have attomed to any
purchaser or transferee of the Premises or any portion thereof or their successors and
assigns, and any such purchaser and transferee will be deemed to have assumed all
obligations of the Landlord under this Lease, so as to establish direct privity of estate and
contract between the Tenant and such purchasers or transferees, with the same force,
effect and relative priority in time and right as if the Lease had initially been entered into
between such purchaser or transferee and the Tenant; provided, further, that the Tenant
and such purchaser or transferee, with reasonable promptness following such sale or deed
delivery in lieu of foreclosure, shall execute such revisions to this Lease as shall be
necessary to document the foregoing relationship.
18. ASSIGNMENT AND SUBLETTING
Tenant shall have the right to assign or sublet the Premises, or any part thereof, provided
that written consent of Landlord has been first had and obtained. Landlord shall not
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unreasonably withhold or delay such consent. Tenant shall be entitled to any and all rent
paid to Tenant by sublessee.
Notwithstanding the preceding paragraph, Tenant may sublease the Premises to the Santa
Clara County Library District Joint Powers Authority, the County of Santa Clara or any
other entity charged with the operation of a public library on the Premises without
requirement of further consent of the Landlord.
19. BREACH AND REMEDIES
19.1 Tenant Default. Tenant shall be in breach ofthis Lease for:
(a) failure of Tenant to pay rent within thirty (30) days of the due date, where such
failure remains uncured for thirty (30) days after written notice thereof;
(b) failure of Tenant to perform any of the other terms, covenants and conditions of
this Lease to be performed by Tenant other than the payment of money, where
such failure remains uncured for thirty (30) days after written notice thereof;
provided, however, that if the nature of the default is such that it cannot
reasonably be cured within such thirty (30) days, Tenant shall not be deemed to
be in default if Tenant shall within such period commence such cure and
thereafter diligently prosecute the same to completion. Upon lapse of the
aforesaid cure periods, Landlord shall have all remedies available at law and in
equity and under this Lease.
19.2 Landlord Default. Except as otherwise provided in this Lease, Landlord shall
be in breach of this Lease for failure to perform any of the terms, covenants and
conditions of this Lease to be performed by Landlord, where such failure remains
uncured for ten (10) business days after written notice thereof; provided, however, that if
the nature of the default is such that it cannot reasonably be cured within such ten (10)
business days, Landlord shall not be deemed to be in default if Landlord shall within such
period commence such cure and thereafter diligently prosecute the same to completion.
Upon lapse of the aforesaid cure period, Tenant shall have all remedies available at law
and in equity and under this Lease.
19.3 Indemnification and Hold Harmless in the Event of Default. Each party shall
indemnifY, defend and hold the other party (including its shareholders, officers, agents,
employees, successors and assigns) harmless from any and all claims, demands,
judgments, damages, liabilities or losses, penalties, costs and expenses (including
attorney's fees and costs) (collectively "Damages"), to the extent such Damages are
caused by the indemnifying party's breach of any of its obligations under this Lease.
20. QUIET ENJOYMENT
Upon Tenant's conformance to all of the terms, covenants and conditions of this Lease,
Tenant shall have quiet enjoyment of the Premises. Landlord shall have the right to enter
IVP APP\803205.2
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onto the Premises on forty-eight (48) hours prior written notice to Tenant. It is
understood, however, that no notice shall be required in cases of emergency and where
Landlord must enter onto the Premises in order to fulfill its maintenance obligations
under this Lease. Landlord shall conduct its activities on the Premises in such a manner
as to cause the least amount of inconvenience or annoyance to Tenant.
21. COMPLIANCE WITH LAWS
21.1 Tenant's Obligations. Tenant shall, at Tenant's expense, comply with any
directive of any governmental authority that shall, by reason of the nature of Tenant's use
or occupancy of the Premises, impose any duty, condition, order, exaction or other
demand upon Tenant with respect to the operation of Tenant's business on the Premises.
Notwithstanding the foregoing, in no event shall Tenant have any obligation to pay for or
to make any physical alterations, improvements, removals or changes to the Premises to
comply with any law, regulation, code, ordinance or governmental approval for the
Premises ("Law").
21.2 Landlord's Obligations. Except for the obligations of Tenant specifically set out
in this Lease, Landlord shall be responsible, at Landlord's expense, to maintain and
operate the Premises, Building and Common Areas in full compliance with any Law
relating to same, whether enacted prior to, or after, the Rent Commencement Date.
22. WAIVER
The failure of Landlord or Tenant to insist upon strict performance of any of the terms,
covenants, or conditions of this Lease shall not be deemed a waiver of any right or
remedy that Landlord or Tenant may have, and shall not be deemed a waiver of their
right to require strict performance of all terms, covenants, and conditions thereafter, nor a
waiver of any remedy for the subsequent breach of any of the terms, covenants, or
conditions.
23. NOTICES
Any notices which are required to be given hereunder, or which either party may wish to
give to the other, shall be in writing and may be personally delivered or sent by rapid
courier or given by mailing same by registered, certified or regular mail, postage prepaid,
addressed as provided in Section 1.2, or to such other places as the parties, or either of
them, may designate in a written notice provided in accordance with the terms of this
Section and Section 1.2.
24. SURRENDER OF PREMISES
On the expiration or earlier termination of this Lease, Tenant shall surrender the Premises
to Landlord in good condition and repair, reasonable wear and tear and damage by
casualty or act of God excepted. Tenant shall not be responsible for restoration of the
Building to its original condition and will vacate the Premises leaving it in "as is" broom
IVPAPP\80320S.2
100909-04706141
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clean condition upon surrender. During the term of this Lease, and upon expiration or
sooner termination thereof, Tenant may remove at any time and from time to time any or
all of its trade fixtures, equipment and personal property. At Tenant's option, Tenant
may elect to abandon in place trade fixtures affixed to the Premises, cabling, wiring and
signs but shall remove all of its movable furniture, equipment and supplies.
25. MISCELLANEOUS
25.1 Time/Days. Time is of the essence with regard to all of the tenns,covenants and
conditions in this Lease, including Landlord's substantial completion of the tenant
improvements. All references to days in this Lease refer to calendar days. References to
business days refer to weekdays, exclusive of Federal, State and City holidays.
25.2 Liens. Tenant shall keep the Premises free and clear of all liens and
encumbrances.
25.3 Successors and Assigns. The provisions of this Lease shall be binding upon and
inure to the benefit of both parties and the heirs, administrators, successors and assigns of
each.
25.4 Governing Law. This Lease shall be governed by, and construed according to, the
laws of the State of California. In the event that suit is brought by either party, the parties
agree that trial of such action shall be exclusively vested in a state court in the County of
Santa Clara or, if federal jurisdiction is appropriate, in the United States District Court for
the Northern District of California, San Jose, California.
25.5 Construction. Both parties have been, or had the opportunity to be, represented
by counsel in connection with the preparation of this Lease, and both parties have
contributed to its content. This Lease shall not be construed as if it had been prepared by
one of the parties, but rather as if both parties have prepared it. The headings in this
Lease are for convenience of reference only and shall not in any way limit or be deemed
to construe or interpret this Lease's terms, covenants and conditions.
25.6 Illegality or Unenforceability of Portion of Lease. If any provision of this Lease,
or the application of it to any person or circumstances, shall to any extent be invalid or
unenforceable, the remainder of this Lease, or the application of this provision to any
person or circumstances other than those as to which it is invalid or unenforceable, shall
not be affected, and each provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
25.7 Exhibits. All exhibits referred to herein are incorporated herein by this reference
and made a part hereof.
25.8 Entire Agreement! Amendments. This Lease, along with any exhibits and
attachments, constitutes the entire agreement by and between Landlord and Tenant
relative to the lease of the Premises, and this Lease and the exhibits and attachments may
IVPAPP1803205.2
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be altered, amended, or revoked only by an instrument in writing signed by both parties.
All prior or contemporaneous oral or written agreements by and between the parties and
their agents or representatives relative to the lease of the Premises are revoked and
extinguished by this Lease.
25.9 Memorandum of Lease. Within a reasonable time following the execution of this
Lease, but no later than the Rent Commencement Date, Landlord and Tenant shall
execute an instrument recordable in form containing those provisions, including but not
limited to the Term, the commencement and expiration date, and such other information
as necessary to satisfy notice of lease statute of the state where the Demised Premises are
located. Tenant may record the same.
IN WITNESS WHEREOF, the parties hereto have executed this Lease effective as of the
date this Lease has been executed by all parties.
TENANT:
LANDLORD:
CITY OF GILROY, a California
uniCl I corporation
Gary A. and Jean M. Walton
B(Z~J
Printed Name:
Title: OuJ /Ill,;-
~~.Cu~
By: .:JeI1AJ M, WA L-7V,J
Printed Name:
Title: t>w '(\Q; \(
APPROVED AS TO FORM:
By: ~~d.~
Linda A. Callon, City Attorney
IVPAPP1803205.2
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19
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Exhibit"B"
LEGAL DESCRIPTION INCLUDING BUILDING AND PARKING LOT
V'.
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF GILROY , COUN1Y OF SANTA
CLARA, STATE OF CAUFORNIA, AND IS DESCRIBED AS FOllOWS:
Parcel One:
All of Lots 4, 5, 6, 7, 8, 9, 10 and 11, as shown upon that certain Map entitled, "Tract No. 401 Mc Alpine
Subdivision", which Map was filed for record in the Office of the Recorder ofthe County of Santa Clara, State
of California, on June 16, 1947 in Book 13 of Maps, at page 28.
Excepting therefrom, the Southeasterly 5 inches of said Lot 11.
Parcel Two:
The Southeasterly 13.50 feet, front and rear measurements of Lot 3, as shown upon that certain Map entitled,
"Tract No. 401 Mc Alpine Subdivision", which Map was filed for record in the Office of the Recorder of the
County of Santa Clara, State of California, on June 16, 1947 in Book 13 of Maps, at Page 28.
APN: 841-04-013
Exhibit "e"
TENANT IMPROVEMENTS.
LAN~ORD'S ~k
The landlOrd shall be responsible for the following items:
1. BUILDING SHEll
landlord shaU make repairs to existing poured concrete exterior walls necessary for the tenant's
proposed use includi~ necessary exit doors required by code. AU interiors of exterior wafts
shaff ~ insulilt~d a.nd finish~. with drywan. All exterior walls and ~rapets shall be painted in
. colors chosen by landlord.
2. CONCRETE ROOR
landlord shaU have concrete floors clean. and patched ready for carpet and vinyl installation.
3. STOREfRONTS AND DOORS
Landford shaU repair or replace the existing storefront ensurfrllJ that aU are operattng in good
working order and that the Ioddng cylinder, pusb/pull hardware, closers and tempered gfass are
to current code.
4. MECHANICAL
The landlord $hall $UPpIy and ;nstaU it complet~ heating, ventilating i,lnd air-conditioning system
with separate controls, aft necessary ducts and diffusers, etc. to provide equal cflStribution of
heated and cooled air to aU parts of the leased Premises. The capadty of the HVAC ~ witt
be sufficient to maintain a temperature in the leased Premises at 15 degrees F. dry bulb at 50%
reJat~ humidity when outsid~ a",bi~nt t~mperature., 90 <leg'.. F. ~ry bulb and 71 degreeS F.
wet bulb. The system desJcn is to take Jnto c:onsJdemfon the tJigJt heat foss resulttna from t~
frequent use of Tenant's entrance doors. landlord to provide mt!ChanicaI exltaust to aft
washrooms.
5. ELECTRICAL
4OOamp$res, 000 volt, S""Ph~ 4 wife $efViW. t.andlf;H'd $hall in$tall electrkal wnnection$ for all
exterior signage. Suppfy and install all eIectricaJ fight fixtures (including all tamps} f.e_ florescent
fixtures, ~mergencv Baht$,. exit fights.
6. SPRINKLERS
Sprink"r di$tributi<m .nd heads tQ bt! instaPed within ~ Premises by t8ndlord' 5 amtraqor as
required to maintain the overaJJ fire protection of the building according to fire department
standards and regulations appficable thereto.
7. PlU~81NG
Landford to install washrooms (incfuding handicapped facilities), painte6:and c;ompIet~.with
toilet, sink, mirror and paper holderS as well as door"dosers and anv.ather.equipment required. '.'f
bY t(x:al regulatory authoritH!5~ A 12. gallon hot watettank and 'slop'sink or laundry. tub shall also
be'lnstaned where shown on the Tenant's plans complete with it mixJns faucetand.hose
con~ The landlord ShaD install standard ADA apProVed plastic. laminated vanity top.and'
with sink and faucet.
8. CEIUNGS
Supply and in$tall all ceiliflg$ -as per refle(:t~ ceiling plan including dropped ceilings. Allow for a
white T-bar ceiling with white ceiling tiles. The ceiling height to be a mirUmum of 13'&- from
finished floor unIes$ otherwise noted.. n.. two new ~$trOOms will haw painted hard ceRlf18$.
9. 'PARKING LOT
LandlQrd win resum.ce the existing p~lrking fot with asphalt paving and stripe parking staJts
according to the approved parting plan which shall include provisions for handicapped parting
stalls. landlord shall also instal new lighting 5tandards in the parkins rot and other Iisf6c as
may be required so that the parking lot and path of travel Is adequately iUuminated.
10. fENCING
Landlord shaD extend new fencing afong the railroad right of way to Lewis Street that is equal or
similar to the existing steel fencing.
lL PU8tle SIDEWAlKS AND DRIVEWAYS
Landlord shall repla(9 the exi$ting (:urb, sidewalk and driveway approathes atong the frontqe
of the leased property according to city standards.. landlord shaD apply for City reimbursement
program.
TENANTS' WORK
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All Tenant work. undertaken by contractors other than landlord's shall be at the sole cost of the Tenant
and undertaken by competent workmen whose work shall be carried out.jf.1. a ~ood and workmanlike
manner and shan be subject to t:he reasonable regulations,. controls and i~ of the LandlOrd.
Tenant may arrange to visit the .premises at reaso~bfe times but shaH at a" ~ be accompanie# by a
representative of the landlord and a rept".esentative of the City of Gilroy. Tenant shaD not interfere or
issue any 9rder to any of l.andlord's subcontri:lctor's directly. All changes to the stOpe of work and
.specificatlons shall be in writing and executed by aU parties to this Agreement.
1. SIGNS
Signs on the storefront(st of the Premises and sign lettering shall conform to the design set by
the landlord. Any signs identifying the Preml~s, including the type, sile, location and color
thereof, shall be subject to landlord's prtorwritten approval.
2. DEMOlITION
All demolition of interior demising walls, electrical, plumbing and framing (including mezzanine)
to prepcJ~ the interior for Tenanrs fTaming work as shown on the approved interior building
layout.
3. CARPENTRY
Material and labor to install aD interior partitions excepting the restrooms whidl costs shall be
borne by landlord.
4. INTERIOR FINISHES
OrywaR on all interior WilDs taped and fini$hed ready for paint. FlQor ~ in al are~ to be
a(eording to landlords allowances. Sheet vinyl or vcr tile tn aU bathrooms 8.nd wet areas and
commercial grade carpet in aU other areas. Any window coverings will be the responsibility of
the Tenant.
5. ELECTRfCAl
AU distribution wiring ac;tOrding to the plan which ir1dtldes $be interior ~r ~ per plan.
6. PWMelNG
Branch pfumbing fines to any area outside of the two restrooms. Install one public drinking
fountain.
7. HEATING AND COOUNG
Any special ventifatiQn, c;ooIing Qr he~ required for compl,lter$ or o~ equipment iftduding
kjt~hen eqUipment.
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8. FIRE SPRINIQ;ERS
Fire main connection from the main and riser connection to the building including backflow
preventiort device.
9. TELEPHONE
Telephone wiring and c(Ji1nections to service provider and iff! pefSQnaf phone equipment.
10. COMPUTOR EQUIPMENT
AU Cat 5 cabling and hi speed internet connections.
11. SECURITY
All wiring, connections and alarms for security system to protect the premises from unlawful
entry.
12. STAFF KITCHEN/BREAKROOM
AU kit~hen cabJnets, countertops, p'umbl.ng and fdtchen equipment.
...,.......,.,.....-.r-~~~-~~-,.....,.,..~---.--,-~~-:~~---.~._~_.-
FIRST AMENDMENT TO LEASE AGREEMENT BETWEEN
THE CITY OF GILROY AND
GARY A. AND JEAN M. WALTON
RELATING TO 7652 MONTEREY ROAD
This First Amendment to Lease Agreement ("Amendment") between GARY A. AND
JEAN M. WALTON (collectively, "Landlord"), and THE CITY OF GILROY, a California
municipal corporation ("Tenant") is dated for reference purposes as of March 1,2010.
RECITALS
This Amendment is entered into upon the basis of the following facts and understandings of
the parties, which facts and understandings are acknowledged by the parties to be true and accurate:
A. Tenant and Landlord entered into the Lease effective as of October 28, 2009.
B. Pursuant to Section 4.1 of the Lease, within thirty (30) calendar days after the Rent
Commencement Date, the parties shall execute an amendment to the Lease, which amendment
shall specify the Rent Commencement Date of the Lease.
C. The Rent Commencement Date occurred on February 14,2010.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings of the
parties set forth below and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
1. Recitals. The foregoing recital of facts and understandings of the parties are
incorporated herein as the agreement of the parties.
2. Rent Commencement Date. Landlord and Tenant hereby acknowledge and agree
that the Rent Commencement Date occurred on February 14,2010.
3. Effective Date. This Amendment shall be effective upon execution of this
Amendment by Landlord and Tenant.
4. Effect of Amendment. Except as expressly provided in this Amendment, all terms
and conditions of the Lease shall be and remain unchanged and in full force and effect. In the event
of any inconsistency between the provisions of this Amendment and the Lease, the provisions of
this Amendment shall control.
5. Capitalized Terms. Capitalized terms used in this Amendment and not otherwise
defined shall have the meanings given to them in the Lease.
6. Governing Law; Counterparts. This Amendment shall be governed by and
construed in accordance with the laws of the State of California. This Amendment may be
executed in counterparts, all of which taken together shall constitute one and the same
IVPAPP1811045.2
032510-04706141
.
instrument. Signed copies of this Amendment transmitted by one party to the other by fax or
email shall be treated as originals thereof.
7. Successors and Assigns. This Amendment shall be binding on and inure to the
benefit of the successors and assigns of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day
and year first written above.
TENANT:
LANDLORD:
CITY OF GILROY, a California
m~
By:
Thomas J. Haglund, City Administrator
/~4i~~
G~ A. ton
I
APPROVED AS TO FORM:
~~ fY}-4f~~
Je M. Walton
,\,.~t.e~
By: L/
Linda A. Call on, City Attorney
IVPAPP1811045.2
032510-04706141