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HomeMy WebLinkAboutAgreement - La Ofrenda Festival, LLC - Contract No. 25ADM0064 - Expires: 12/31/2025 4939-1269-3326v4 MTOSCANO\04706216 LEASE (Willey House) THIS LEASE, is made and entered into as of July ___, 2025, but made effective as of June 9, 2025 (“Effective Date”), by and between THE CITY OF GILROY, a California municipal corporation (“Landlord”), and LA OFRENDA FESTIVAL, LLC, a California limited liability company (“Tenant”). 1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby hires from Landlord that certain real property, consisting of the building commonly known as the Willey House (“Building”), and the land on which the Building is located (“Land”). The Building and the Land shall be collectively referred to hereinafter as the “Premises”. The Premises are located at 140 5th Street, in the City of Gilroy, County of Santa Clara, State of California. Tenant hereby accepts the Premises in its “AS IS” condition without representation or warranty of any kind, express or implied, and subject to all applicable laws. Upon taking possession of the Premises, Tenant shall be deemed to have accepted the Premises as being in good and sanitary order, condition and repair, and to have accepted the Premises in its existing condition, subject to all applicable laws, covenants, conditions, restrictions, easements and other matters of record. Landlord shall have no obligation to construct any improvements on or within the Premises for the benefit of Tenant. Neither Landlord nor Landlord’s agents, employees or other representatives 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. Tenant shall be solely responsible for installing or arranging for any security devices or services desired by Tenant for the Premises and the safety of persons or property upon the Premises, and Landlord shall have no obligation or liability with respect to the provision or lack of provision of such security devices or services. 2. LEASE TERM. The term of this Lease (“Term”) shall commence on the Effective Date (which shall sometimes also be referred to herein as the “Commencement Date”) and expire, unless sooner terminated in accordance with the terms and conditions of this Lease, on December 31, 2025. “Lease Termination” shall mean the expiration or sooner termination of this Lease. Landlord and Tenant hereby agree that Tenant shall have no right to renew or extend the Term of this Lease, it being the intent of the parties that Landlord has not granted Tenant any option(s) to extend the Term of this Lease, and the Term of this Lease shall expire on December 31, 2025, subject to the expiration or sooner termination of this Lease. 3. RENT; UTILITY SERVICES; SECURITY DEPOSIT. a. Rent. Tenant agrees to pay monthly base rent (“Base Rent”) to Landlord, on or before the first day of each month during the Term, commencing on the Commencement Date. The monthly Base Rent is set at Five Hundred Dollars ($500.00). Except for Tenant’s obligations under Section 3(b) below, Landlord and Tenant each acknowledge and agree that this Lease is an “absolute gross” Lease, and Tenant is not obligated to pay any operating expenses or taxes, insurance and/or other costs relating to the management, operation and/or ownership of the Premises (except for as expressly stated in Section 3(b) below), it being the intent of the parties that Tenant’s payment of Base Rent shall be Tenant’s sole monetary obligation under this Lease, except for as expressly stated in Section 3(b) below. b. Utility Services. Except for internet, telephone and cable, Landlord shall arrange and pay for water, sewer, gas, electric, janitorial services and any other utility services to the Premises; provided, however, Tenant shall reimburse Landlord within five (5) days of Tenant’s receipt of written demand therefor. Tenant shall contract directly with and pay the utility service provider(s) for internet, telephone and cable. Landlord shall not be liable in damages or otherwise for any failure or Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 26.00 4939-1269-3326v4 MTOSCANO\04706216 interruption of any utility or service being furnished to the Premises, and no such failure or interruption shall affect Tenant’s obligations under this Lease. Landlord shall be entitled to cooperate voluntarily and Tenant agrees to cooperate, with the efforts of governmental authorities or utility suppliers in reducing energy or other resource consumption. c. Security Deposit. Concurrently with Tenant’s execution of this Lease, Tenant shall deposit with Landlord the sum of Five Hundred Dollars ($500.00) as a security deposit (the “Security Deposit”). As security for the faithful performance of each and every term, covenant and condition of this Lease, Tenant has deposited with Landlord the Security Deposit. This sum is a Security Deposit only. The amount is not an attempt to liquidate damages, nor a limitation upon the amount of damages either party may be entitled to in the event of a breach by the other. Further, the Security Deposit does not constitute prepaid rent. Therefore, the Security Deposit shall not be applied to the last month’s rent due hereunder. If Tenant defaults with respect to any provision of this Lease, including, but not limited to, the provisions relating to the payment of rent, Landlord may (but shall not be required to), use, apply or retain all or any part of the Security Deposit for the payment of any rent or any other sum in default, or for the payment of any amount which Landlord may spend or become obligated to spend by reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant’s default, including, without limitation, to the following: legal fees; repair costs; late fees; and to current and future rental charges. Tenant hereby agrees that such Security Deposit may be applied against, among other things, delinquent rents accruing prior to termination of this Lease and future rent damages under California Civil Code Section 1951.2. If any portion of the Security Deposit is used or applied by Landlord under this Lease, Tenant shall, within five (5) business days after written demand by Landlord, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount, and Tenant’s failure to do so shall be a default under this Lease. Tenant hereby waives the provisions of California Civil Code § 1950.7, and all other provisions of law now or hereafter in force, that provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant, or to clean the Premises. Landlord shall not be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on the Security Deposit. If Tenant fully and faithfully performs every provision of this Lease to be performed by Tenant, the Security Deposit or any balance thereof shall be returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within sixty (60) days following the date that Landlord receives possession of the Premises from Tenant. In the event of termination of Landlord’s interest in this Lease, Landlord shall transfer the Security Deposit to Landlord’s successor-in-interest. 4. CONDUCT OF BUSINESS BY TENANT. a. Use of the Premises. Tenant shall use the Premises to host community arts and culture meetings and workshops, community arts programs, pop-up arts exhibitions, and for no other uses whatsoever. Notwithstanding the foregoing, Tenant may, without Landlord’s prior written consent, sub-lease the three (3) offices on the second floor as private studio spaces (“Permitted Subtenants”) so long as such Permitted Subtenants comply with all the terms and conditions of this Lease, including, without limitation, obtaining and maintaining the insurance set forth in Section 6(a) below. Tenant agrees that at least seventy-five percent (75%) of the programming provided must be free or low cost to residents and community members and the operating hours are not to exceed 8:00 AM to 9:00 PM, Sunday through Saturday. Subject to the Permitted Subtenants, Tenant shall have the exclusive use of the Building and outdoor patio space (i.e., the Premises). b. Compliance with Law. Tenant, at its expense, shall comply promptly with all applicable laws regulating the use by Tenant of the Premises and the conduct of its activities on the Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 Premises, including, without limitation, any permits that may be required in connection with outdoor events. Tenant shall not use or permit the use of the Premises in any manner that will tend to create a nuisance. Tenant shall place no loads upon the floors, walls or ceilings in excess of the maximum designed load determined by Landlord or which endanger the structure; nor place any harmful liquids in the drainage systems; nor dump or store waste materials or refuse or allow such to remain outside the Building, except in enclosed trash areas provided, if any. Tenant and Tenant’s agents, officers, directors, employees, contractors, representatives, servants, licensees or invitees (collectively “Tenant’s Agents”) shall not use, store or dispose, or allow the use, storage or disposal of, any Hazardous Materials on any portion of the Premises. As used in this paragraph, “Hazardous Materials” means any chemical, substance or material which has been or is hereafter determined by any federal, state or local governmental authority to be capable of posing risk of injury to health or safety, including, without limitation, petroleum, asbestos, polychlorinated biphenyls, radioactive materials and radon gas. 5. MAINTENANCE, REPAIR , AND ALTERATIONS. a. Maintenance and Repair. During the Term, Landlord, at its sole cost and expense, shall repair and replace all portions of the Premises—including the roof, structural elements, exterior walls, foundation, mechanical, electrical, plumbing, fire-life safety, and HVAC systems—in good order, condition, and repair consistent with buildings of similar age and quality in the vicinity. Notwithstanding the foregoing, during the Term, Tenant shall, at its sole cost (i) keep in broom clean, good order and condition, the entire Premises and (ii) be responsible for all routine, day-to-day maintenance and cleaning of the interior and exterior of the Premises. b. Preventive-Maintenance Contracts. Landlord shall, at its sole cost, maintain commercially reasonable preventive-maintenance agreements for the building roof, HVAC, and major building systems and shall provide Tenant copies on request. c. Tenant’s Limited Responsibility. Tenant shall reimburse Landlord only for the reasonable, out-of-pocket cost of repairing damage to the Premises to the extent (and only to the extent) such damage arises from Tenant’s or Tenant’s invitees’ acts, omissions, negligence or willful misconduct. Payment is due within thirty (30) days after Landlord delivers a reasonably detailed invoice and supporting documentation. d. No Other Pass-Throughs. Except as set forth in Section 3 regarding reimbursement of utilities and contracting directly with an internet service provider and Section 5(c) regarding repairing damage to the Premises, Tenant shall have no obligation to pay, reimburse, or otherwise compensate Landlord for (i) routine maintenance, (ii) preventive-maintenance contracts, or (iii) capital repairs or replacements to any portion of the Premises. e. Condition Upon Surrender. On Lease Termination, Tenant shall remove its personal property and trade fixtures from the Premises, and shall surrender the Premises to Landlord in substantially the condition as when received by Tenant under this Lease, ordinary wear and tear and casualty and condemnation excepted. f. Alterations. Tenant shall maintain the historical aesthetics of the Premises in a manner acceptable to Landlord and shall in no event take any action that would detract from the historic character of the Premises. Accordingly, Tenant shall not, without prior written consent of Landlord (which consent may be granted or withheld in Landlord’s sole and absolute discretion), make or install any alterations, improvements, or additions (collectively, “Alterations”) to the Premises, including, without limitation, any exterior landscaping, signage or outdoor facilities or improvements. Before commencing any Alterations, Tenant shall submit plans and specifications to Landlord for Landlord’s approval. At least Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 ten (10) days prior to undertaking construction or installation of any Alterations, Tenant shall give written notice to Landlord setting forth the date work is to commence. Notwithstanding the foregoing, Landlord and Tenant hereby agree that Tenant shall be permitted to paint an interior wall of the Building, subject to Tenant’s delivery of prior written notice to Landlord of the color and location of such interior wall at least ten (10) days prior to the commencement of said work. At Landlord’s option, Landlord shall have the right to require that Tenant remove any and all Alterations or artwork made by Tenant during the Term of this Lease and perform any necessary repairs caused by such removal to the condition that existed prior to the installation of such Alteration or artwork, all in accordance with applicable laws in effect as of the date of such repair. 6. INSURANCE AND INDEMNITY. a. Tenant’s Insurance. Tenant shall at all times during the Term, at Tenant’s sole cost and expense, maintain in effect the following insurance: i. Worker’s compensation insurance in not less than the minimum amounts required by law; ii. 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 Tenant’s activities thereon. The minimum limit of coverage of such policy shall be in the amount of not less than One Million Dollars ($1,000,000) per occurrence and annual aggregate, shall include an extended liability endorsement providing contractual liability coverage (which shall include without limitation 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); and iii. Business automobile liability insurance having a combined single limit of not less than One Million Dollars ($1,000,000) 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. b. General Requirements. No policy maintained by Tenant under Section 6(a) 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. The types of insurance and minimum limits specified above are the minimum required by Landlord, and Landlord may from time to time require changes and/or additions thereto to meet changed circumstances or as otherwise reasonably required by Landlord, including, without limitation, changes in the purchasing power of the dollar and changes consistent with the standards required by other landlords in Santa Clara County, California. Tenant’s obligations under this Lease shall not be limited to the amount of any insurance required of or carried by Tenant under Section 6(a) and Tenant is responsible for ensuring that the amount of insurance carried by Tenant is sufficient for Tenant’s purposes. All insurance required to be carried by Tenant hereunder shall Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 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, shall be delivered to Landlord by Tenant within ten (10) days of Tenant’s receipt of Landlord’s request therefor. A new certified policy shall be delivered to Landlord at least thirty (30) days before expiration of the old policy. The liability policies to be carried by Tenant under this Lease shall name Landlord and its agents, officers, representatives, employees and designated lenders as additional insureds and shall include a CG2026 specific endorsement (or other like/replacement form). All policies shall provide coverage on an occurrence basis and not on a claims made basis. c. Waiver of Liability. Landlord and Tenant each hereby waives any and all rights of recovery against the other or against the employees, representatives and agents of such other party for loss of or damage to such waiving party or its property or the property of others under its control, arising from any cause to the extent insured against under any insurance policy carried by such waiving party and to the extent such waiver is permitted under such insurance policy and does not prejudice 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. d. Tenant to Hold Landlord Harmless. Tenant hereby agrees to defend, indemnify and hold harmless Landlord and Landlord’s employees, representatives and agents from and against any and all claims, damages, losses, liabilities, judgments or expenses (including, without limitation, attorneys’ fees) due to any cause, including, without limitation, those relating to bodily injury, property damage or copyright infringement, which arises out of or is in any way attributable to the use or occupancy of the Premises or any part thereof including any community gardens on the Premises 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 gross negligence of Landlord. This paragraph and Tenant’s obligation hereunder shall survive Lease Termination. e. 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, steam, electricity, gas, water or rain which may leak or flow from or into any part of the Premises, or from the breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures of the same, or from any other cause, whether such damage or injury results from conditions arising upon the Premises or from other sources. 7. ASSIGNMENT AND SUBLETTING. Except as expressly provided in Section 4(a) above regarding Permitted Subtenants, 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 (which shall not be unreasonably withheld). If Tenant is a corporation, any dissolution, merger, consolidation or reorganization of Tenant, the transfer, assignment or hypothecation of any stock or interest in such corporation in the aggregate in excess of twenty-five percent (25%), or the sale (cumulatively) of fifty percent (50%) or more of the value of Tenant’s assets shall be deemed a Transfer. In the case of any other entity comprising Tenant, any transfer, assignment or hypothecation of any interest in such entity in the aggregate in excess of twenty-five percent (25%), or the sale (cumulatively) of fifty percent (50%) or more of the value of Tenant’s assets shall be deemed a Transfer. In no event shall Tenant hypothecate, mortgage, pledge or encumber Tenant’s interest in this Lease or in the Premises or otherwise use this Lease 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. Tenant expressly agrees that the provisions of this Article are not unreasonable Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 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. 8. DAMAGE & DESTRUCTION; EMINENT DOMAIN. a. No Obligation to Repair or Restore. Landlord shall have no obligation to rebuild, restore or repair all or any portion of the Premises in the event of any damage or destruction thereto from any cause. If at any time during the Term the Premises are damaged to the extent such damage interferes with Tenant’s continued use of the Premises, Tenant may terminate this Lease by giving written notice of termination to Landlord. b. Automatic Termination. If the entire Premises, or a portion thereof, shall be taken under the power of eminent domain as to make the Premises not reasonably adequate for the conduct of Tenant’s business, in Tenant’s reasonable judgment, this Lease shall automatically terminate as of the date on which the condemning authority takes possession. c. Rent Abatement. If a portion of the Premises is taken by power of eminent domain which does not result in a termination of this Lease, then this Lease shall continue in full force and effect as to the part of the Premises not so taken. There shall be no abatement of rent payable hereunder and Tenant shall have no claim against Landlord for any damage suffered by Tenant by reason of any taking of the Premises under the power of eminent domain other than by Landlord. d. Condemnation Award. Any award for any taking of all or any part of the Premises under the power of eminent domain other than by Landlord 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. In no event shall Landlord be obligated to make any repairs or perform any restoration or other work required as a result of a taking. Nothing contained herein, however, shall be deemed to preclude Tenant from obtaining, or to give Landlord any interest in, any award to Tenant for loss of or damage to Tenant’s trade fixtures and removal of personal property and Tenant’s moving expenses. e. 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. 9. DEFAULTS; REMEDIES. a. Defaults. The occurrence of any one or more of the following events shall constitute a default hereunder by Tenant: i. The failure by Tenant to make any payment required by this Lease within five (5) days after receiving written notice from Landlord that such payment is past due. ii. 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 within thirty (30) days after receipt of written notice from Landlord; provided, however, that if the nature of such default reasonably requires more than thirty (30) days to cure, Tenant shall be entitled to such additional time as may be reasonably necessary. Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 b. 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: i. 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 rent when due. No act by Landlord other than giving written notice to Tenant expressly indicating Landlord’s intention to terminate this Lease 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. ii. Landlord may terminate this Lease and Tenant’s right to possession of the Premises at any time (i) if such default is in the payment of rent and it is not cured within five (5) days after written notice from Landlord, or, (ii) with respect to the default referred to in Section 9(b)(ii) if 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. The parties agree that any notice given by Landlord to Tenant pursuant to this Section 9(b)(ii) 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 remove all of Tenant’s personal property, signs and trade fixtures and store the same at Tenant’s cost, and to recover from Tenant as damages: A. The worth at the time of award of unpaid rent and other sums due and payable which had been earned at the time of termination; plus B. The worth at the time of award of the amount by which the unpaid rent and other sums due and payable which would have been payable after termination until the time of award exceeds the amount of such rent loss that Tenant proves could have been reasonably avoided; plus C. The worth at the time of award of the amount by which the unpaid rent 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 D. 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; plus E. 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 9(b)(ii)(A) and 9(b)(ii)(B) is computed by allowing interest at the lesser of (i) eighteen percent (18%) per annum, or (ii) the maximum rate of interest permitted by law (“Stipulated Rate”). The ‘‘worth at the time of award” of the amount referred to in Sections 9(b)(ii)(C) 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%). iii. 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. Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 iv. Notwithstanding any other provision of this Lease, in no event shall Landlord be liable for consequential damages, or loss of or interference with Tenant’s business, including, without limitation, lost profits. c. 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. d. 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 attorneys’ fees, from the other party. 10. 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 to ascertain if they are in good repair, making repairs or installations which Landlord may be permitted to make hereunder, performing Landlord’s obligations under this Lease, protecting the Premises, posting notices of non-responsibility, and exhibiting the same to prospective purchasers, lenders or tenants. 11. MISCELLANEOUS. a. Time of Essence. Time is of the essence with respect to the performance of every provision of this Lease. b. Captions. The section and paragraph captions contained in this Lease are for convenience only and shall not be considered in the construction or interpretation of any provision hereof. c. 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 (including any prior agreements or leases (if applicable)) 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. d. Notice. Any notice required or permitted to be given hereunder shall be in writing and may be served personally (which includes without limitation delivery by overnight courier services) or by mail. All notices shall be sent to the following addresses: Landlord: City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 Attn: Landlord Administrator Tenant: La Ofrenda Festival, LLC 7653 Saint Francis Ct. Gilroy, CA 95020 Attn: Director Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 Any notice so given by mail shall be deemed effectively given three (3) days after being deposited in the United States mail, registered or certified, postage prepaid and addressed as specified herein. Either party may by written notice to the other specify a different address for notice purposes. Notwithstanding the foregoing, any legal notices required to be sent by one party to the other (including, without limitation, a notice pursuant to California Code of Civil Procedure Section 1161) shall be delivered in the manner required or allowed by law. e. Holdover. This Lease shall terminate without further notice at the expiration of the Term. Any holding over after Lease Termination by Tenant with the consent of Landlord shall be construed to be a tenancy from month to month, but otherwise on the same terms and conditions set forth in this Lease. If Tenant, any assignee or subtenant pursuant to a Transfer or a Permitted Subtenant remains in possession of the Premises after Lease Termination without Landlord’s consent or fails to surrender the Premises in the condition required by Sections 5(e) and 5(f), Tenant shall pay holdover monthly Base Rent during such holdover period in the amount of two hundred percent (200%) of the Base Rent in effect immediately before such holdover period, and Tenant shall indemnify, defend and hold Landlord and Landlord’s employees, representatives and agents harmless from and against any claims, losses, damages, judgments, expenses or liabilities (including, without limitation, attorneys’ fees) resulting from Tenant’s failure to surrender the Premises in the required condition, including, without limitation, any claims made by any succeeding tenant based upon delay in the availability of the Premises, which obligations shall survive Lease Termination. f. 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, indemnify and hold Landlord and Landlord’s employees, representatives and agents harmless from and against any and all claims, losses, damages, liabilities, judgments or expenses (including, without limitation, attorneys’ fees) arising out of or in connection with claims made by any broker or individual for commissions or fees resulting from Tenant’s execution of this Lease, which obligations shall survive Lease Termination. g. 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. h. Waiver. The waiver by either Party 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 rent 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 either party unless such waiver is in writing signed by that party. i. Separability. If one or more of the provisions contained herein, except for the payment of rent, 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. j. 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 Landlord and Landlord’s Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 employees, representatives and agents from and against any liens, demands, claims, judgments, losses, liabilities, damages, expenses or encumbrances (including all attorneys’ fees) 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. Tenant shall do all things necessary to prevent the filing of any mechanics’ or other liens against the Premises or any part thereof by reason of work, labor, services or materials supplied or claimed to have been supplied to Tenant, or anyone holding the Premises, or any part thereof, through or under Tenant. 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 of such lien by giving security or in such other manner as is, or may be, prescribed by law. Notwithstanding Section 3 of this Lease, Tenant shall repay to Landlord on demand all sums disbursed or deposited by Landlord pursuant to the foregoing provisions of this Section 11(j) 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 any other lien law. Tenant shall give Landlord adequate opportunity and Landlord shall have the right to post such notices of non-responsibility as are provided for in the mechanics’ lien laws of California. Tenant’s obligations pursuant to this paragraph shall survive Lease Termination. k. Encumbrances. 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. 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 within such ten (10)-day period, then in addition to such failure constituting a default by Tenant (without any notice under Section 8(a)), it shall be deemed that this Lease is so subordinated to such Encumbrance. 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 so long as this Lease remains in effect. l. 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 Landlord may deem desirable, and in connection therewith, pay expenses and employ counsel. Notwithstanding Section 3 of this Lease, 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 date of Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 payment by Landlord to the date of payment by Tenant to Landlord, plus collection costs and attorneys’ fees. If Tenant damages the Premises, Tenant shall have a reasonable opportunity to repair the damage and Landlord may not repair the damage and charge Tenant for the repair unless Landlord gives Tenant thirty (30) days’ written notice, except that if such repair would reasonably take more than thirty (30) days Landlord may not make the repair until such reasonable time has run. m. 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 its employees, representatives or agents, shall be personally liable for any deficiency. Neither Landlord’ s employees, agents, nor representatives, 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. Notwithstanding any other provision of this Lease, in no event shall Landlord be liable for consequential damages, or loss of or interference with Tenant’s business, including, without limitation, lost profits. n. Exhibits. All exhibits, amendments, riders and addenda attached hereto are hereby incorporated herein and made a part hereof. o. 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. p. 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. q. 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. This Lease shall be construed in accordance with the laws of the State of California. r. 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. s. Certified Access Specialist. For purposes of Section 1938 of the California Civil Code, Landlord hereby discloses to Tenant that, to Landlord’s actual knowledge, as of the Effective Date, the Premises have not undergone inspection by a Certified Access Specialist (“CASp”). Pursuant to California Civil Code Section 1938(e), Landlord hereby further discloses to Tenant the following: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” Notwithstanding the foregoing and/or anything to the contrary contained in this Lease, Landlord and Tenant hereby agree and acknowledge that, in the event Tenant desires to obtain a CASp inspection, then: Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 i. Tenant shall provide Landlord with no less than twenty (20) business days’ prior written notice and, upon receipt of such notice, Landlord shall have the right to, among other things, (A) select the date and time at which such inspection shall occur, and (B) have one (1) or more representatives present during such inspection. ii. Tenant hereby agrees and acknowledges that it shall (A) provide Landlord with a copy of any and all findings, reports and/or other materials (collectively, the “CASp Report”) provided by the CASp immediately following Tenant’s receipt thereof, (B) at all times maintain (and cause to be maintained) the CASp Report and its findings (and any and all other materials related thereto) confidential and (C) pay for the CASp inspection and CASp Report at Tenant’s sole cost and expense. If Tenant receives a disability access inspection certificate, as described in subdivision (e) of California Civil Code Section 55.53, in connection with or following any CASp inspection undertaken on behalf, or for the benefit, of Tenant, then Tenant shall cause such certificate to be provided immediately to Landlord. iii. If the CASp Report identifies any violation(s) of applicable construction-related accessibility standards (“CASp Violation(s)”), Tenant shall immediately provide written notice to Landlord of any and all such CASp Violation(s). In such event, Tenant shall, at Tenant’s sole cost and expense, perform, or cause to be performed, any repairs, modifications and/or other work necessary to correct such CASp Violation(s) (any such repairs, modifications and/or other work being collectively referred to herein as the “CASp Work”). Tenant shall commence (or cause the commencement of) such CASp Work no later than fifteen (15) business days after Landlord’s receipt of the CASp Report in accordance with the terms and conditions of this Lease. Tenant shall diligently prosecute (or cause to be diligently prosecuted) to completion all such CASp Work in a lien free, good and workmanlike manner, and, upon completion, obtain an updated CASp Report showing that the Premises then comply with all applicable construction-related accessibility standards. Any and all cost and expense associated with the CASp Work and/or the updated CASp Report (which Tenant shall provide to Landlord immediately upon Tenant’s receipt thereof) shall be at Tenant’s sole cost and expense. Without limiting the generality of the foregoing, Tenant hereby agrees and acknowledges that: (x) Tenant assumes all risk of, and agrees that Landlord shall not be liable for, any and all loss, cost, damage, expense and liability (including, without limitation, court costs and reasonable attorneys’ fees) sustained as a result of the Premises not having been inspected by a Certified Access Specialist (CASp); (y) Tenant’s indemnity obligations set forth in this Lease shall include any and all claims relating to or arising as a result of the Premises not having been inspected by a Certified Access Specialist (CASp); and (z) Landlord may require, as a condition to its consent to any alterations, additions or improvements, that the same be inspected and certified by a Certified Access Specialist (CASp) (following completion) as meeting all applicable construction-related accessibility standards pursuant to California Civil Code Section 55.53. t. Binding Effect. Subject to the provisions of this Lease regarding assignment and subletting, 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. u. Waiver of Statutory Provisions. Each party waives California Civil Code §§ 1932(2), 1933(4) and 1945. Tenant waives (a) any rights under (i) California Civil Code §§ 1932(1), 1941, 1942, 1950.7 or any similar or replacement section or law, or (ii) California Code of Civil Procedure §§ 1263.260 or 1265.130 or any similar or replacement section or law; and (b) any right to terminate this Lease under California Civil Code § 1995.310 or any similar or replacement section or law. Tenant further expressly waives California Civil Code Section 1479, and agrees that Landlord shall have the right to designate which portion of Tenant’s obligations under this Lease are satisfied by a partial payment or to Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 4939-1269-3326v4 MTOSCANO\04706216 allocate any payment by Tenant to outstanding obligations of Tenant in any order it desires (i.e., Landlord may allocate payments to the earliest amounts outstanding or the most recent, at its discretion). IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first stated above. LANDLORD: TENANT: CITY OF GILROY, a California municipal corporation LA OFRENDA FESTIVAL, LLC, a California limited liability company By: By: Its: Its: Date: Date: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Docusign Envelope ID: F3AD1418-81B0-4240-93D7-FB7609A89B69 7/18/2025 DirectorCity Administrator 7/18/2025