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06 Staff Report.USPS Sub-Lease with attachments PREPARED BY: Katy Nomura Assistant Town Manager Reviewed by: Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 03/19/2024 DATE: March 7, 2024 TO: Mayor and Town Council FROM: Laurel Prevetti, Town Manager SUBJECT: Authorize the Town Manager to Negotiate and Execute a Sub-Lease with the United States Postal Service (USPS) for Parking Spaces Located at 15 Montebello Way RECOMMENDATION: Authorize the Town Manager to negotiate and execute a sub-lease with the United States Postal Service (USPS) for parking spaces located at 15 Montebello Way. BACKGROUND: In 2002, the Town entered into a 15-year lease agreement with Frontier California Inc. (formerly Verizon) for the use of the parking lot at 15 Montebello Way. On March 17, 2003, the parking lot lease was amended to allow for the sub-leasing of a portion of the lot to the United States Postal Service (USPS). The Frontier agreement was further amended in 2006, 2009, and 2018 with a final amendment in December 2023 to extend the lease through April 2029. Since the 2003 amendment, the Town has continued to sub-lease a portion of the parking spaces to the USPS concurrently with the lease agreement with Frontier California Inc. DISCUSSION: The current sublease with the USPS is scheduled to expire on April 30, 2024. Consistent with the five-year extension on the Frontier California Inc. agreement completed in December, staff negotiated a new five-year sub-lease (Attachment 1) with USPS through April 30, 2029. Similar to the prior sub-lease, the agreement covers approximately 10,800 square feet or 35 parking spaces. The table on the following page illustrates the terms of the prior agreement and the proposed agreement with the USPS. PAGE 2 OF 2 SUBJECT: USPS Sub-Lease DATE: March 7, 2024 DISCUSSION (continued): TERM ANNUAL LEASE MONTHLY LEASE Prior lease 5-year lease ending April 30, 2024 $32,400 $2,700 New 5-year lease ending April 30, 2029 $46,322 $3,860.17 The new sub-lease terms represent a 43% increase from the prior agreement to be more commensurate with the terms of the lease with Frontier California Inc. The sub-lease amount also includes a 4% commission for the USPS’ lease manager Jones Lang LaSalle (JLL). The USPS requires the Town to pay this fee to JLL as part of a Commission Agreement (Attachment 2). The proposed sub-lease takes into account this commission and ensures the Town recovers costs related to leasing this subset of parking spaces from Frontier. CONCLUSION: Authorization of the sub-lease with the USPS will continue the long-standing practice of subsidizing the lease with Frontier California Inc., providing additional parking to the USPS, and utilizing a fee structure more commensurate with the primary lease terms. COORDINATION: This report was coordinated with the Town Manager’s Office, the Town Attorney’s Office, and the Finance Department. FISCAL IMPACT: If executed, the sublease would provide annual revenue generation of $46,322. Attachments: 1. USPS Sub-Lease 2. Commission Agreement Sub - Ground Lease LOS GATOS - M.O. EMPLOYEE PARKING (054542-002) 15 MONTEBELLO WAY, LOS GATOS, CA 95030-9998 ATTACHMENT 1 Ground Lease Facility Name/Location In consideration of the mutual promises set forth and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties covenant and agree as follows: 1. The Landlord hereby leases to the Postal Service and the Postal Service leases from the Landlord the following premises, hereinafter legally described in paragraph 7, in accordance with the terms and conditions described herein and contained in the ‘General Conditions to USPS Ground Lease,’ attached hereto and made a part hereof: Total Site Area: Rent checks shall be payable to: 3. TO HAVE AND TO HOLD the said premises with their appurtenances for the following term: County: Santa Clara Lease: QU0000559704 1 FIXED TERM: The term becomes effective May 01, 2024 with an expiration date of April 30, 2029, for a total of 5 Years. 2. RENTAL: The Postal Service will pay the Landlord an annual rental of: $46,332.00 (Forty Six Thousand Three Hundred Thirty Two and 00/100 Dollars) payable in equal installments at the end of each calendar month. Rent for a part of a month will be prorated. LOS GATOS - M.O. EMPLOYEE PARKING (054542-002) 15 MONTEBELLO WAY, LOS GATOS, CA 95030-9998 TOWN OF LOS GATOS FINANCE DEPARTMENT P O BOX 697 LOS GATOS, CA 95031-0697 This Lease made and entered into by and between TOWN OF LOS GATOS hereinafter called the Landlord, and the United States Postal Service, hereinafter called the Postal Service: February 2004 10,800.00 Sq. Ft. Exclusive Use Parking Lot, approximately 35 parking spaces Ground Lease 4. 5. TERMINATION: 6.OTHER PROVISIONS: The following additional provisions, modifications, riders, layouts, and/or forms were agreed upon prior to execution and made a part hereof: 7. LEGAL DESCRIPTION: 2 The Postal Service may terminate this Lease at any time after year 2 by giving 180 days written notice to the Landlord. RENEWAL OPTIONS: None See Attached Addendum. February 2004 10,800 SQ FT identified on Exhibit A as United States Postal Service, 35 Parking Spaces (existing), a portion of the parking facility located at 15 Montebello Way, Los Gatos CA. See Attached Exhibit A. See Attached Exhibit A - Site Plan See Attached Exhibit B - Master Lease Agreement See Attached Exhibit C - LANDLORD CONSENT, RECOGNITION AND NON-DISTURBANCE AGREEMENT Addendum Facility Name/Location County: Santa ClaraLOS GATOS - M.O. EMPLOYEE PARKING (054542-002) 15 MONTEBELLO WAY, LOS GATOS, CA 95030-9998 February 2004 8.Landlord leases the Premises and the Property from Verizon California, Inc., a California corporation, now known as Frontier California Inc., a California corporation ("Master Landlord") under the terms of that certain Master Lease dated 5/28/2002, as amended by that certain First Amendment to Master Lease dated 3/17/2003, and as further amended by that certain Second Amendment to Master Lease dated 10/10/2006, and as further amended by that certain Third Amendment to Master Lease dated 11/13/2009, and as further amended by that certain Fourth Amendment to Master Lease dated 7/19/2018, and as further amended by that certain Fifth Amendment to Master Lease dated 01/16/2024, by and between Landlord and Master Landlord. With respect to the Master Lease, Landlord represents, warrants, and agrees as follows: a.The Premises described in the Master Lease includes the entire Premises described in this Leaseand Landlord has all of the rights to all appurtenances, easements and joint use or common areas shown onthe Exhibits of this Lease. b.The current term of the Master Lease terminates on 04/30/2029. c.The Master Lease permits the Premises to be used for any lawful purpose. d.If required by the Master Lease, Landlord has obtained the prior written consent of Master Landlordto this Lease in accordance with the terms of the Master Lease. e.If required by the Master Lease, Landlord has obtained the prior written consent of Master Landlord in accordance with the terms of the Master Lease prior to completing any alterations to the Premises in connection with this Lease. f.If Landlord has the right to terminate the Master Lease without cause, Landlord agrees that it will not exercise this right during the term of this Lease. g.Landlord will promptly provide the Postal Service with copies of all notices it sends to or receives from the Master Landlord under or with respect to the Master Lease, but in no event less than 5 business days following the sending or receipt of any such notice. h.The Postal Service acknowledges receipt of a copy of the Master Lease; however, the Postal Service will only be responsible to carry out Landlord’s obligations thereunder that are specifically transferred under this Lease to the Postal Service, but not for either (1) those obligations which must remain with Landlord, including but not limited to payment of rent to the Master Landlord, maintaining insurance, constructing the premises, etc., or (2) those obligations Landlord has agreed to keep under this Lease, including but not limited to its obligations under the Maintenance Rider of this Lease. 9.The Postal Service shall be responsible for maintenance of the parking lot. The Postal Service may perform such maintenance at such time and in such manner as it considers necessary. Landlord shall be responsible for all other maintenance not listed above that is necessary to keep the Premises is good and tenantable condition. 10.The parties agree that if the signature(s) of either Landlord or the Postal Service on this Lease or any amendments, addendums, assignments, or other records associated with this Lease is not an original but is an electronic signature, scanned signature or a digitally encrypted signature, then such electronic signature, scanned signature or digitally encrypted signature shall be as enforceable, valid and binding as, and the legal equivalent to, an authentic original wet signature penned manually by its signatory. Signatures required under this Lease, or any amendments, addendums, assignments, or other records associated therewith, may be transmitted by email or by fax and, once received by the party to whom such signatures were transmitted, shall be binding on the party transmitting its signatures as though they were an original signature of such party. Ground Lease EXECUTED BY LANDLORD this ________ day of _______________________, ______. GOVERNMENTAL ENTITY By executing this Lease, Landlord certifies that Landlord is not a USPS employee or contract employee (or an immediate family member of either), or a business organization substantially owned or controlled by a USPS employee or contract employee (or an immediate family member of either). Name of Governmental Entity: _____________________________________________________________ __________________________________ _____________________________________ __________________________________ _____________________________________ Landlord’s Address: ____________________________________________________________________________________ ____________________________________________________________________________________ Landlord’s Telephone Number(s): ___________________________ __________________________________ Federal Tax Identification No.:______________________________________ _________________________________________ _________________________________________ Witness Witness a.Where the Landlord is a governmental entity or other municipal entity, the Lease must be accompanied by documentary evidence affirming the authority of the signatory(ies) to execute the Lease to bind the governmental entity or municipal entity for which he (or they) purports to act. b.Any notice to Landlord provided under this Lease or under any law or regulation must be in writing and submitted to Landlord at the addressspecified above, or at an address that Landlord has otherwise appropriately directed in writing. Any notice to the Postal Service provided under this Lease or under any law or regulation must be in writing and submitted to “Contracting Officer, U.S. Postal Service” at the address specified below, or at an address that the Postal Service has otherwise directed in writing. ACCEPTANCE BY THE POSTAL SERVICE Date: _______________ __________________________________ ____________________________________ Contracting Officer Signature of Contracting Officer _______________________________________________________________________________ Address of Contracting Officer Signature Page Grdlease Gvt. Entity (April 2009) LOS GATOS, CA 95031-0697 XX-XXX1435 Name + Title: Name + Title: Name + Title: Name + Title: Western FSO 7500 E 53RD PL RM 1108, DENVER, CO 80266-9918 FINANCE DEPARTMENT P O BOX 697 Terrence P Brennan 3 Town of Los Gatos General Conditions to USPS Ground Lease groundgc (Oct 2009)GC-1 1. CHOICE OF LAW This Lease shall be governed by federal law. 2. RECORDING Not Required 3. MORTGAGEE'S AGREEMENT If there is now or will be a mortgage on the property which is or will be recorded prior to the recording of the Lease, the Landlord must notify the contracting officer of the facts concerning such mortgage and, unless in his sole discretion the contracting officer waives the requirement, the Landlord must furnish a Mortgagee's Agreement, which will consent to this Lease and shall provide that, in the event of foreclosure, mortgagee, successors, and assigns shall cause such foreclosures to be subject to the Lease. 4. ASSIGNMENTS a. The terms and provisions of this Lease and the conditions herein are binding on the Landlord and the Postal Service, and all heirs, executors, administrators, successors, and assigns. b. If this contract provides for payments aggregating $10,000 or more, claims for monies due or to become due from the Postal Service under it may be assigned to a bank, trust company, or other financing institution, including any federal lending agency, and may thereafter be further assigned and reassigned to any such institution. Any assignment or reassignment must cover all amounts payable and must not be made to more than one party, except that assignment or reassignment may be made to one party as agent or trustee for two or more parties participating in financing this contract. No assignment or reassignment will be recognized as valid and binding upon the Postal Service unless a written notice of the assignment or reassignment, together with a true copy of the instrument of assignment, is filed with: 1. the contracting officer; and 2. the surety or sureties upon any bond. c. Assignment of this contract or any interest in this contract other than in accordance with the provisions of this clause will be grounds for termination of the contract for default at the option of the Postal Service. d. Nothing contained herein shall be construed so as to prohibit transfer of ownership of the demised premises, provided that: 1. such transfer is subject to this Lease agreement; 2. both the original Landlord and the successor Landlord execute the standard Certificate of Transfer of Title to Leased Property and Lease Assignment and Assumption form to be provided by the USPS Contracting Officer. 5.APPLICABLE CODES AND ORDINANCES The Landlord, as part of the rental consideration, agrees to comply with all codes and ordinances applicable to the ownership and operation of the parcel on which the premises are situated and to obtain all necessary permits and related items at no cost to the Postal Service. When the Postal Service or one of its contractors (other than the Landlord) is performing work at the premises, the Postal Service will be responsible for obtaining all necessary and applicable permits, related items, and associated costs. 6.SUBLEASE The Postal Service may sublet all or any part of the premises or assign this lease but shall not be relieved from any obligation under this lease by reason of any subletting or assignment. 7.ALTERATIONS The Postal Service shall have the right to make alterations, attach fixtures and erect additions, structures or signs in or upon the premises hereby leased (provided such alterations, additions, structures, or signs shall not be detrimental to or inconsistent with the rights granted to other tenants on the property on which said premises are located); which fixtures, additions or structures so placed in, upon or attached to the said premises shall be and remain the property of the Postal Service and may be removed or otherwise disposed of by the Postal Service. 8.CLAIMS AND DISPUTES a. This contract is subject to the Contract Disputes Act of 1978 (41 U.S.C. 601-613) ("the Act"). b. Except as provided in the Act, all disputes arising under or relating to this contract must be resolved under this clause. c. "Claim," as used in this clause, means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract. However, a written demand or written assertion by the Landlord seeking the payment of money exceeding $100,000 is not a claim under the Act until certified as required by subparagraph d below. A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a General Conditions to USPS Ground Lease groundgc (Oct 2009)GC-2 claim under the Act. The submission may be converted to a claim under the Act by complying with the submission and certification requirements of this clause, if it is disputed either as to liability or amount or is not acted upon in a reasonable time. d.A claim by the Landlord must be made in writing and submitted to the contracting officer for a written decision. A claim by the Postal Service against the Landlord is subject to a written decision by the contracting officer. For Landlord claims exceeding $100,000, the Landlord must submit with the claim the following certification: “I certify that the claim is made in good faith, that the supporting data are accurate and complete to the best of my knowledge and belief, that the amount requested accurately reflects the contract adjustment for which the Landlord believes the Postal Service is liable, and that I am duly authorized to certify the claim on behalf of the Landlord.” The certification may be executed by any person duly authorized to bind the Landlord with respect to the claim. e.For Landlord claims of $100,000 or less, the contracting officer must, if requested in writing by the Landlord, render a decision within 60 days of the request. For Landlord-certified claims over $100,000, the contracting officer must, within 60 days, decide the claim or notify the Landlord of the date by which the decision will be made. f.The contracting officer's decision is final unless the Landlord appeals or files a suit as provided in the Act. g.When a claim is submitted by or against a Landlord, the parties by mutual consent may agree to use an alternative dispute resolution (ADR) process to assist in resolving the claim. A certification as described in subparagraph d of this clause must be provided for any claim, regardless of dollar amount, before ADR is used. h.The Postal Service will pay interest on the amount found due and unpaid from: 1.the date the contracting officer receives the claim (properly certified if required); or 2.the date payment otherwise would be due, if that date is later, until the date of payment. i.Simple interest on claims will be paid at a rate determined in accordance with the Act. j.The Landlord must proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract, and comply with any decision of the contracting officer. 9.HAZARDOUS/TOXIC CONDITIONS CLAUSE "Asbestos containing building material" (ACBM) means any material containing more than 1% asbestos as determined by using the method specified in 40 CFR Part 763, Subpart E, Appendix E. "Friable asbestos material" means any ACBM that when dry, can be crumbled, pulverized, or reduced to powder by hand pressure. The Landlord must identify and disclose the presence, location and quantity of all ACBM or presumed asbestos containing material (PACM) which includes all thermal system insulation, sprayed on and troweled on surfacing materials, and asphalt and vinyl flooring material unless such material has been tested and identified as non-ACBM. The Landlord agrees to disclose any information concerning the presence of lead-based paint, radon above 4 pCi/L, and lead piping or solder in drinking water systems in the building, to the Postal Service. Sites cannot have any contaminated soil or water above applicable federal, state or local action levels or undisclosed underground storage tanks. Unless due to the act or negligence of the Postal Service, if contaminated soil, water, underground storage tanks or piping or friable asbestos material or any other hazardous/toxic materials or substances as defined by applicable Local, State or Federal law are subsequently identified on the premises, the Landlord agrees to remove such materials or substances upon notification by the U. S. Postal Service at Landlord's sole cost and expense in accordance with EPA and/or State guidelines. If ACBM is subsequently found which reasonably should have been determined, identified, or known to the Landlord, the Landlord agrees to conduct, at Landlord’s sole expense, an asbestos survey pursuant to the standards of the Asbestos Hazard Emergency Response Act (AHERA), establish an Operations and Maintenance (O&M) plan for asbestos management, and provide the survey report and plan to the Postal Service. If the Landlord fails to remove any friable asbestos or hazardous/toxic materials or substances, or fails to complete an AHERA asbestos survey and O&M plan, the Postal Service has the right to accomplish the work and deduct the cost plus administrative costs, from future rent payments or recover these costs from Landlord by other means, or may, at its sole option, cancel this Lease. In addition, the Postal Service may proportionally abate the rent for any period the premises, or any part thereof, are determined by the Postal Service to have been rendered unavailable to it by reason of such condition. The Landlord hereby indemnifies and holds harmless the Postal Service and its officers, agents, representatives, and employees from all claims, loss, damage, actions, causes of action, expense, fees and/or liability resulting from, brought for, or on account of any violation of this clause. The remainder of this clause applies if this Lease is for premises not previously occupied by the Postal Service. By execution of this Lease the Landlord certifies: a.the property and improvements are free of all contamination from petroleum products or any hazardous/toxic or unhealthy materials or substances, including friable asbestos materials, as defined by applicable State or Federal law; Exhibits Page 1 of 1 August 2017 Exhibit A Site Plan Facility Name/Location County: Santa Clara Lease: QU0000559704 LOS GATOS - M.O. EMPLOYEE PARKING (054542-002) 15 MONTEBELLO WAY, LOS GATOS, CA 95030-9998 2/8/2024 Exhibit B: Master Lease EXHIBIT A -PGS 1 - 31 FOURTH AMENDMENT TO PARKING LOT LEASE This Fourth Amendment to Parking Lot Lease ("Amendment") dated for reference purposes only, November 13, 2009, is made by and between by Verizon California Inc., a California corporation, now known as Frontier California Inc .. a California corporation ("Landlord") and Town of Los Gatos, o municipal corporation ("Tenant"). RECITALS A.Landlord and Tenant entered into a Parking Lot Lease dated May 28, 2002, as amendedby that certain First Amendment to Parking Lot Lease dated March 17, 2003, and asfurther amended by that certain Second Amendment to Parking Lot Lease dated October10, 2006. and Third Amen�ment dated November 13, 2009 (as amended, the "Lease") fora portion of the property located at 15 MontebeHo Way, Los Gatos, California.NOW THEREFORE, in consideration of the mutual covenants herein expressed and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Tenant and Landlord agree as follows: I.Rent,. Commencing upon May 1, 2019, the Base Rent set forth in Paragraph 2(a) of theLease (as modified by Paragraph 2 of the 3rd Amendment) shall be amended to read asfollows: Period Montblv Base Rent 05/01/2019-04/30/2024 $5,700 2. Notices. Landlord>s notice address contained in Paragraph 15 of the Lease (as modifiedby 'Paragraph 3 of the 3rd Amendment) is hereby deleted in its entirety and replaced withthe following:Notice to Landlord: Frontier California Inc. 21 West Avenue Spencerport, NY 14559 Copies to: Jones Lang LaSalle Americas, Inc. c/o Frontier California Inc. 260 Forbes Ave., Suite 1300 Pittsburgh, PA 15222 And: Page I of5 Exhibit B: Master Lease Frontier Communications Corporation 805 Central Expres:sway South Allen, TX 75013 Attn: Director Real Estate Services 3. Patriot Act Compliance. Each party shall talce any actions that may be required to comply with the terms of the USA Patriot Act of 20()1. '1S amended, any regUlations promulgl!.ted under the foregoing law, Executive Order No. 13224 on Terrorist Financing, any sancti<.)ns program administered by the U.S. Department of Treasury's Office of foreign Asset Control or Fii1ancial Crim.es Enforcement Network, or any other Jaws, regulations, executfve orde~ or government programs designed to oombat terrorism or money laundering, or the effect of any of the foregoing laws, regulations, order of programs, if applicable. on thii; L~e. Each party represents and wammt.s to the othet party that it is not an entity named on the List of Specially Designated Nationals and Blocked Persons maint:ained by the U.S. Department ofTr~ury, as last updated prior to the date of this Lease. 4. ~ffectiveness of Leas~,_ All tenns and provisions of the Lease shall remain in full force and effec4 except as expressly amended or modified hereby, and are her~by ratified and reaffinned. In the event of any inccnsistency between the provisions of this Amendment and the provisions of t11e Lease, the ptovisfons of this Amendment shall control. 5. Count~s .. and_ Facsimile. This Amendment may be executed in one or more counterparts, each of which sl1all be deemed an original but all of which taken together shall constitute one and the same instrum~t. The parties acknowledge the validity of signatures by facsimile. Page 2 of 5 CLERK. DEPARTMENT AGR.!12.iZ (, :J. • IHH Ql:JT~J;[iQ ORD ____ --·-----·--- THIRD AMENDMENT TO PARKING LOT LEASE REC This Third A,menrlment to Parking Lot Lease ("Amendment") dated for~~-· -· -·-·----- purpose~ only. NQVt:mber ll. 2009. ls made by and betw'een by and between V~:l!On QJ.lifQrnia Inc., a Catlfomia corporation {"Landloid") and Thwn of Los ~s. a municipal coq>0ratio1' ("Tenant''). RECITALS A. Landlord and Tenant entered Into a Parking Lot Lease dal:ed May 28, 20021 as amend® ~Y that certain Finit Ameodm• ~. Parking Lot Lease dated Maroh.17. 2()0,, a.11d u further amende.d by that ocrtai.n Second Ammdment to J>arkJng Lot. uase-dated ~ber l O,. 2006 (u amended, the "~e") for a pomon of the property l~ at 15 Montebello Way, Los 01ltos, California. B. The parties are now cntcrhlg into tbis Atmlndment to ~uoe tbe number of parking spaces 1eBBC4 by Tenant fiom sixty-four (64) pming spaces to aixt)'-onc (61) pl)'king l!Pllces and to make ~rtain addition.al modifications 10 die Lease as set forth hereh.i. All capitalized terms not defined hexein rilmll have the 11amo meaning they ~ given in tho Lease. NOW. 'll-IERBF0Im, iil ~ol)si<Jeration of 'the mutual oovenants herein expreS!led and for other good and valuable consideration, the rc;eoipt and sufficien-cy ofwhi<;h are her~by acknowledged. Tenant and Landlord agree~ follows: l. J.dmdl2m's.P@rking: Am; Ptemf,ses. The parties-ac,knowledge ~ agrf.C tha:t effective ps of December 1, 2009, LamdlQtti'a ~ad:mg Arca shall bo modified to include three (3) additional parking spaces and ~ ru:imbct <ll'Tcimmf11 perking B~ contained in the P'.remiscs shalt be reduce<J by i~ (3) parJdng ~ whi® puking 8p&CCS_ sblill be-reserved for Landlord's cxclus:i~ ~. Ae<:0rdlngly. ~ of Deccmbet 1> 2009, (i) the number ofTet11ruWs parkinti ap~ Within th~ Premises sbe.ll bo t:eduoed .from sixty-fout (~)parking~~ tc;, si,cty-()nc (61) .PAtldns spaces. (ii) Bxhtbit"A" (Dcpial:ion ofhcmiscs) atte.¢h~d to 1}le Lem$e sball be replaced and superseded with Exhibit "A" attached to ~ Amendment. $11d {ill) Exhibit "Bu (Depfotion of Landlord's Parking~) ~c.bed io the Lease (a:i modified by Bxhibit ":Sn attached to the S~nd A,me,idment to Parldng Lot Ll!asc (the "'r Amendment")) shall be replaced and superseded with Exhibit "B" attached to this ,Amendment Tenant slwl not'm,ake any l\'l<xlifications to the Premises,, including, without limitation, striping of parking spll~. without Landlord's prior written con,.qe11t 2. &mt. Commencing upon December l. 2009, the Base Rent set forth in Paragraph 2(11) of the Loose (as modified by Paragraph 3 oft.he 2114 Amendment) shall bo amended to read as fol!\1ws: · \10140643.2 Peri<ld 12/0l/2009-04fJ0/2014 05/0112014-04/30/2019 Monthly Base Rent $4,293.81 $4,937.87 EXHJBlTE ~~~ ···---·---··-··----···--------·--------------------------· -· ·-·----. .... 3. ~s. Landlord's notice addreas contained in Paragraph lS of the Lease (as modified by Paragraph 4 of the tori A.mMdment) ls hereby deleted in its entitety and replaced with the following: · Jones Ltmg LaSalle Americas. Inc. do Verizon California ~c. 2200 West ~rlield Drive, Dock E Dallas/Fort Worth Airport. TX 75261 4. Patri9t A« QlmnJi-. Each party &hall take any actio~s that my be required to comply with the terms of the USA Patriot A.et of 2001, as·amended, any regulations promulgated under the foregoing law, Executive Order No. 13224 on Ter.rorist Finmcln& any sanctions program administrated by the U.S. D~em of 'In:asurts Office of Foreign Asset Control or Finlm<}ia[ Crimes Enforoement Networlc, or any 0th.or laws, regulations, execu1ive-orders or government programs designed to combat terrorism or monoy laundering, <>r the effect of any of the foregoing laws. regulations, otdc.rs or programs, if applicable, on this Leno. Bac;h party represents and warrants k> the of.bet party that it tu m~t an entity named on the Liat of Specially Designalcd National& and Blookcd P4'111Qn& maint.tdmsd by the U.S. Depm:tment of'freamry, as last updated prior to the dl11e of this Lease • . 5. Btfeet.ivencss of I,we. All terms and provisions of the Lease shall remain in full force and effect, except as expressly amended or modified hereby, and are hereby ratified and reaffirmed. In the event of any incoru1istency bmveen the provisiona of this Amendment and the provision,s of the Lease, the provisions of this Alnendroent shall control. 6. CQ.unterparts Md FAf§imllc. This Amendment may be executed in one ~r more counterparts. en.ch ofwhieh shall be deemed an original but all of which tak;en together shall conatitute one and the same instrutmmt. The parties acknowledge the validity of slgna~s by facsimile. [R.EMAJNDER. OF PAOE INTENTIONALLY LBFT BLANK.) \10140643.2 OFFICE Of THE ~'OWN CLERK AGR_ru, 032. llJH . . ORD ________ _ F!ltST AMEND~NT TO P~RKING LOT LEASEREC )( Rl!F:0.,2, /.l.3 Thls First Amendment to Parkiµg Lot Leas~ ("first Amendment") is .~ ... · ...,ip ... t.,_o..._th;;.;i .... s __,...,....... ____ 17th day of March, 2003 (the ''Effective Date .. } by and between Verizcn CaJ ifom1a Inc. · (''Landlord;') and Town of Los Gatos (''Tenanf'). · RECITALS A. Landlord and Tenant entered into a Parking Lot l;ease (the "Leese") dated May 28, 2002 fo1 the property lqcated at 15 MontebeUo Way, Los <Jatos. California (the "Premises"), as more spcoificatly shown on Bx:hibit "A'' atta~ed to the Lease. n. Th~ ~ie!l 1;1re now enterixm into this First Amendment ("First Amendment'') to tease to mQdify 1he base as set forth h~rein. All ~pitaiized terms not defined herein shall tiave the same meaning they are given in the Lease. NOW, THF.REFORE, in consideration of the mutual covenants herein expressed and for other good .nnd valuable ¢onsidetation, the receipt and sufficiency of which are hereby acknowledged, Te~ant e.nd Landlord agree as follows: l. Tenn. The fir!$( sentence c:,f Section 3(a) of the Lea."le is hereby Jetete~ end replaced with the following: ·"The term of this Lease (the "Term"}.shaU commence on the date that occurs sixty (60) days after notice from Tenant to Landlord that Tenant is prepsted to commence construction of the Tenant Improvements (as defined in P~graph ,4 below), but in no event shall the Lease Tenn co.mmence on a date later than December I, 2003 ('the "Commtncement Date'')." 2. Sublease. Notwithstanding Section 7 of1he Lease to the cont~ry. Tenant shall be pconitted to sublellSe the Premises with L.andloTd's prior written oonsent, which shall not be unreasonably withheld, ~nditioned or delayed. In the event of any sublease, whether or not with Landlord's consent, Tcnan.t shall not be released or dischatgcil from any liability, whether past, present or future. Tenant's liability shnll remain primary, and in the event of default by :any s1,1btenanl of Tenant in perfonnance or observance of any of the covenants or c.onditiom of the Lease, Landlord may proceed directly against Tenant wi~out the DCCC!ISily of ex.hausting remedi~ agflinst ~i(l $Ublen~t. 3. Landlord's r•arking Arca. Tenant is pem1ittcd to open the gate to and make use of Landlord's Parking A~a for special events, including the Sunday farmer's Market iUld Montebello Way road closures, without Landlord's consent; bowcv~. upon notice from Landlord tn Tenant to cease and desist use of Landlord's Parking Area. Tenant shall immediately ~ase and desist from using Landlord's Parking Aten. Landlord may iive 'l'enanl notice to cease and desist utilizing Landlor.d'1.1 Porking Area in Landlord's $Ole discretion. When Tenant is utilizing Landlord's Parking At~. Tenant shall~ responsible for J...nndlord's Parking Area as if such area where part of the Premi.ses. · 'I. Erreetlveneim or ~a:1e. All tenns and provisions of the Lease shnll r~mail\ in full foi.:e and effect, except as expre~sly amended or modified hereby, and are her~ ratified l.lnd 01101/0ISJ 7~53 J EXHIBITC ~~~Mr' reaffmned. In the event of any inconsistency between the provisions of this Amendment and the provisions of the Lease, the provisions of this Amendment shall control. 5. Counterparts and Facsimile. This Amendment may be CKecutcd in one or more counterparts, each of which shall be dee~d an original but all of which taken together shan constitute one and the same instrument. The parties acknowledge the validity of signatures by facsimile. 6. Exhibit C. Section l of the Lease entitled Minimwn Criteria for New Parking Improvements is hereby deleted and replaced with the following: "As sho'Wll on Exhibit A and Exhibit B, lhe Landloro's Parking Arca &hall e<>Jlllist of 1he area located within the bo12ndary of the Landlord's Parking Area as &hown on said Exhibits. The number of conforming parking spaces will be adjusted and constructed within the boundary based on specifica1ions and direction provided by 1he Landlord." [REMAINDER OF PAGE lNTENTIONAI.LY LEFT BLANK) Oll6Mlts3 7S953.3 ·--------·------·-·-·-.. -·-""'·' .<'· .mCE OF THE TOWN CI.ERK AGR.(2 g , t/3 nm _______ _ PARKING LOT LEASE ORD ______ _ . mto This Parking Lot Lease ("Lease") is entered into this 28th d9J.sif::'l(~Mi:o:r:-:::y:":"". "'20ffl"l"0:21""1("ftlli~e--- ''Effective Date,.) by and between Verizon California !De. ("Laudfffl"} a:ad % wu of Les Gates ('4Tenant"). 1. Lease: Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, for the term. at the rental, and upon all of the conditions set forth herein, the property located at 15 Montebello Way. Los Gatos. California (the "Premises11), 11S more speeifically shown on Exhibit" A" attached hereto. Notwithstanding anything contained herein to the contrary, Landlord reserves for its use and for the use of its assignees, the parking area shown on Exhibit "B" attached hereto and incorporated herein by thls reference (the "Landlord's Parking Area; and the Premises shall not include Landlord's Parking Area. Landlord shall have use of· and access to Landlord,s Parking Area twenty-four hours a day, seven days a week. The Premises and Landlord's Parking Area shall be collectively referred to herein as the "Property." 2. Rent. {a} Initial Term. On the :first day of each month, Tenant shall pay Landlord, as rent for the rights rtnd privileges granted in the Lease, the following amount ("Due Rent''): Lease Yeaxs 1 through 5: $4,345.84 per month Lell'.Se Years 6 through 10: $4,997.71 per month Lease Years 11 through 15: $5,747.36 per month. All costs and expenses which Tenant assmne~ agrees or is obligated to pay to Landlord under this Leare sbnll be deemed additional rent (which. together with the Base Rent is sometimes referred to as the "Rent''). Rent shfil1 be payable in Lawful money of the United States to Landlord at the address stated in the Paragraph 16 hereof, or to such other persons or at such other places as Landlord may designate in wri1i,ng. (b) . Administrative Fee. Upon mutual ex.ecution of this Lease. Tenant shall pay Landlord nn administrative reimbursement fee equal to Six Tho~d Dollars ($6,000.00). (c) Utilities. Throughout the Term, Tenant shall pay directly for all utilities and services supplied to the Premises, inc)uding but not limited to water, gas, electricity, telephone, security and cleaning C>f the Premises, together with any taxes thereon. (d) PayMent of Taxes. Toe real property taxes applicable to the PremiS<'..s shall be paid by Landlord to the trucing authority. Tenant shall pay prl.or to delinquency all taxes assessed against and levied upon Tenant's fixtures, furnishings and all persoruil property of Tenant contained on the Premises. (e) Lnte Pnyment Pcnaltir.s: If Tenant fails to make timely payment ofany sum it is obligated to pay to Landlord in acc.ordance with the terms and conditions of this Lease, Landlord, at its option and after fifteen (15) days' prior written notice to Tenant, may forthwith terminate this Lease and alJ rights of Tenant hereunder. Any late payment of the Rent will result OIIG71()lS3 60606.4 ---------·~----~·-·····-·-···· •---··-···-··-···-.. ········--·---·-·-··----.. ····-···-·""'--····--······--..... , ... --,..··--·-···--·-----·-·--·--····-.. ·-· .. ·········-···---'"--··--------····-·-········--··-·- <lem.ands, ti;>g~ with reasonable atto~iJ' f~s and costs. im.:utred by Landlord in negotiating. settling, defending, and otherwise protecting against such liens, claims. and demands. . (e) T~mpq~l"f Parking. At an ~e periods dµring the ~nstruction of th¢ new parking improvements on th.e Propmy, Tenant shall provide Landlord wi1h no less than eleven { 11) reserved patking spaces on the ·property in a lo~tion that is safe from construction debris and dama~e. · s. Compliance with Law. Tenant s~ at T~t's sole e,cpense, comply promptly with all f edeml, state and Joce.i statutes, ordinancest niles, regulati~, orders, and requirements, as well as all covenants 8.t)d ™1rlctions of record in effea during the term, including any rC$1rictions impQsed by any govemmenta.J 11gency hav.ingjuru;djction ove.r the Propcify and any recorded covenants. conditions, and restrictions or easements .regulating the use or occu~cy by Tena.nt. or any other party, of the Pr~mise,s or the Ttmant Im.provements. or the undertaki.rig of any Tenant hnprovcments (collectively, the "Laws"). 6. Condition of the Premises/Maintenance. The Premises are being delivered to Tenant in their~ "AS lS" condition without representation or ·warranty of any kind by ~lord or any agent or employee ofLandfor~t ';[bro1,1ghout the Tenn of 1}µ$ ~~. T~~ant shtUJ mainta.in the Premi$es, including every p~rt thereof. and all building systems servicing the Premises in good order, condition an.d repair and in compliance wi1h '1.11 Laws. 7. Rigb(s Non· Tr~naferabl~. This Lease and the rights granted herein arc personal to Tenant and Tenm:it shall not assign, convey. or otherwise tr~er ~d Lease or J.tQY Qf the rights granted ~rein in eny r.ttatwer whatsoever wit,h.out Landlord's prior written consent. Any attelp}rt by Tenant to do so shall be nun and void at.1d. l}.t Landlotd's ¢leetioll, ~~ c;:onstitute a materiij} defa:u}f hereunder, 8. Ten=-nt Ind~nUication. Bx~p1 to 1.be extent su~ claims arise out of Landlo.rd's gross negligence or :intentionai misconduct, T~t shall in~. defend and Jwld hw:ml¢iis LandJord and its parent. subsidumes~ affi1i$es and eiu:h of their respective directors. officers, agent$. servants and employees (the ''LaJtdJ()J'd Pan.lei) from and Qgainst any ~d !tll claims arising from or in comieetion with (a) the Premises or of any business therein or any work or ~ng wh~o¢ver done, or any conditic>n created m. on or about the Premises during the Tenn or during the period of time, if any, prior to the Commencement Date that Tenant may have been given access to the Premises; (b) lli1y act, ·omission or negligence of Tenant Pr ~Y of its agents, employees or invitees or its or their partners, joint ventuters, directors. officers,. agents, employees or co~fr~~; (e) any ~ident, injury or damage occumng in the P~nii~; and (d) any breach or default by l'ennnt in the full and prompt payment and performance of Tenant's obligatjons un(!~ thj~ L,cuse, Tenant's obligation fo indemnify sbaJJ also •~~lude all ¢<>$ts, expenses and liabilities incurred in or in connection with each such daim or actio.n or proceeding brought the~n. inclucling wit~out limitatioJJ., li!ll ~oqiey's fees, expert fees anq expenses, 1n case any action or proceeding is brought against the Landlord Parties or MY of th.em by reason of su¢h cl~m. Tenant up<m notice from Landlord sball ~ist ~ defend sµch action or proceeding by counsel reiwonably satisfactory to Landlord. OJ 10710l 53 60606.4 5 . _________ .. ,, __ .............................. . 9. Release. Except in the evwt of Landlord's gross negligence or intentional misconduct, Landlord and the Landlord Parties shall not be Jiable to or respot1S:1ole for~ and Tenant hereby releases Landlord and the Landlord Parties from all liability and responsibility to Tenant and any person claiming by, through or under Tennn~, by way of subrogation, for any iajury, loss or damag-e to ~y person or property in the Premises or to Tenant's business irrespective of the cause of sucli injury, Joss or damage. Nothing herein shall be construed to impose any other or greater liability upon Landlord than would have existed in the absence of this provision. 10. Hazardou1 Material!. (a) Reporiable Uses ~equire Consent. The term "Hazardous Material" as used in this Lease shall mean any :product. substance, chemical, ma:terlal or waste whose presence, nature. quantity or intensity of existence, use, manufactur~ disposal. transportation, spill, release or effect, either by itself or in combination with other materials present on or expected to be on the Premises, is: {i) potentially injurious to the public health; safety or welfare, the environment, or the Premises; (ii') reglllated or monitored by any governmental authority~ or (iii) a basis for potential liability of Landlord to any govemmcnttl agency or third party under any applicable statute or common law theory. Hazardous MatmiaJ shwl inciude, but not be limited to, hydrocarbonst petroleum, gasoline, asbestos, crude oil or any products or by-products thereof. (b) Environmental ludemnite~. Landlord agrees to indemnify, defend and hold Tenant harmless from and against any and all claims, judgments, dmnages, penaltiest fines, costs, liabilities or losses (including. without limitation, diminution in value of the Premises, and sums paid in settlement of claims, reasonable attorneys• fees, consultant fees and expert fees} (coJlectively, ''CJabns") that alise as a result of1he presence of any Hazardous Material in. on, under or about the Premises to the extent that such Claims result ftmn the pre$ence of any Hazardous Material that was introduced onto the Premises by Landlord. Tenant agrees to indemnify, defend and hold Landlord haunless from and against any and all Claims which arise as a resuit of the presence of any Hazardo\1$ Material in. on, or under or about the Premises to the extent that web Claims result from the presence of any }Iaza:rdaus Material that was introduced onto the Premises by Tenant or during the Term of this Lease. The pw:ties agree 1hat this Paragraph shall survive the termination of this Lease. J l. Insurance. (a) Liability Insurance. Tenant shall obtain and keep in force during the Term of this Lease a Commercial Gen,eral Liability policy of insurance protecting Tenant. Landlord and any Lender(s) whose names have been provided to Tenant in writing (as additional insmeds) against claims for bodily injury, personal injury and property damage based upon, involving or arising out of the ownership, use, occupancy or mo.intertance of the Premises and all areas appurtenant thereto. Such insurance shall be on an OCCWTence basis providing single limit covemge in an amount no1 less than $2,000,000 pet occurrence. The policy :4h.all not contain any intra~inSUI't,'<l exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "Insured Contract" for the performance of Tenant's indemnity obligations under this Lease. The limits of .said insurance required by this Lease or as 01107/0ISJ 60606..4 6 ---·-··--·-·---· carried by T~t !!hall not. however, Jimit the liability of Tenant nor relieve T~ant of any obligation hereundc:t. (b) Property Iniluranct. Tenant shall obtain and keep in force during the Term <:>fthis Lease~ policy or policies in the name ~f Tenw.it. wilh loss payable to Landlord, insuring ~gainst loss or d11:I.JU1ge to the structures, including, but not limited to, the TCQant Improv-em¢nts7 on the Property. Such insurance shall be for the full ~cement cost, as the same slm.11 exist from time to time. Tenant's policy or policies shall insure~ all risks of direct physicat loss or damage (except the perils of flood and earthquake unless mcluded in the Base Pretnillin), including coverage for any additional costs resulting from debris mno~l and reasonable ~ounts of cqverage for the enforcement of any ordinance or law regulating the reconstruction or replacement ()feny undamage.d sectic,ns of any structure reqµired to be de.moli!lbed or rem:()Ved by reason of the enforcement of any building, 20:ning~ safety or land use laws as the result of a covel'ed loss1 but not including plate glass insurance. Said _poljcy ot policies shall also contain an agreed va1uation prtmsion in lieu of any oo·insurance clause. waiver of subrogation. and inflation guard protection causing an increase in th~ 41n.nuaJ property insunmce eovctligo amount by a factor o.f riot less~µ, the adjusted U.S. Department of Labor ConBumet Price ~ex for All Urban Consumers for the city nea.reat to where the Premises are located. (c) Insurance PoJlties. Insurance .required hereunder shall be in companie..ct duly licensed to transact business in the state where the Premises are located, and maintaining during the poli<-"Y renn e "General Policyholders Rating" of at leut B+, V, as sci forth in the most current issue of 'Best·$ Insurance Guide.' Tez.wit shall not do or permit to be done anydnng which shall invalidate ·the insurance poJicics referred to in this Paragraph. Tenant shall cause to be delivered to Landlord, within thirty (30) ~ays after the! Comment:Mlent Date. certificates evidMcing the exiBtence tmd amounts of, the insurance required under P~agr1_1ph, No later than (30) days after the expiration of the policjcs, Teoa,nt ~all furrdsb Landlord with evidepce of renewalS; or Lan<llord may order ·such insurance and charge the cost theteo;f'to Tenant, which IUllOWlt shall be payable by Tenant to Landlord upop demand. Notwithstanding a.nytbing conta.iJted herein to 1},te conu-ary, Tenant shall be permitted to provide the insurance coverage reqwred in this Lease via a self.;insunQ1ce pool of municipalities (the "ABAG Planj so long as the ABAG Plan h.as a 11et worth equal to or greater than $10;000,000. ( d) Wsdvf.!r of' Subrogation. WitbouJ affecting any other ri_g~ts or remediei;.. Tenant and Landlord each h~y release and relieve the other. and waive their entire right to recover dam.ages (whether in contract or in ton) against 1he other, f~ 1QS$ or damage to their property arising out of or incid~t t(> the pe;rils requfred to be insured a2ainst under P.ar~h. The effect of suc;b re~ses and waivers of the right to recover dain!tges shall not be limite4 by the ~ount of insurance carried 01 required or by any deductibles applicable thereto. Laodlord and Tenant agr.ee to have their respective insurance companies i..q,'l\ljng p.!Qperly damage insurance waive any right to subrbg~oli that such companies may have against Landlonl or Tenant, as the~ may be, so long as the insurance js not invruidated thereby. 01107/0153 60606,4 7 12. lnterrup1ion of Use: Except in the event of Landlord's gross negligence or intentional misconduct, Landlord shall not be liable to Tenant for any interruption of Tenant's use of the rights granted hereunder resulting from any cause. 13. Default and Remedies. (a) Default. The occurrence of any one or more of the following events shall constitut.e a default and breach of 1his Lease by Tenant: (1) If Tenant abandons or vacates the Premises; or (2) If Tenant fails to pay ,my ~tor any other charges required to be paid by Tenant under this Lease and such failure continues for ten (10) days after such payment is due and payable; or (3) If Tenant fails to promptly and fully perform any other covenant. condition or agreement contained in this Lease and such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant; or ( 4) If a writ of attachment or execution is levied on this Lease or on any of Temmt's property; or (5) lf Tenant makes a general assignment for the benefit of creditors, or provides for an arrangement, composition, extension or ad)ustment with its creditors; or (6) If Tenant files a voluntary petition for relief or if a petition against Tenant in a proceeding under the federal bankruptcy laws or other in.-rolvency laws is filed and not withdrawn or dismissed within forty-five (45) dijys thereafter, or if under the provisions of any Jaw providing for reorganization or winding up of corporations, ~y court of competent jurisdiction assumes jurisdiction, custody or control of Tenant or any substantial part of its property and such jurisdiction, custody or c.ontrol remains in force unrelinquished, unstayed or unterminated fura period of forty-five {45) days; or (7) If in any proceeding or action in which Tenant is a party, a trustee, receiver, agent or c;ustodian is appointed to tnke charge of the Premises or Tenant's property (or has the authority to do so) for the pm:pose of enforcing a lien against the Premises or Tenant's property. Arty written notice of default 'based upon Tenant's failure to pay Rent or any other charges under the Lease which is given by Landlord pursuant to lhis Paragraph shall also oonstitute a notice to pay rent or quit pu~t to any applicable unlawful detainer statute, provided that such notice is served in accotdance with the provisions of any such statute. (b) Remedies, ln the event of Tenant's default hereunder, then in addition to any other rights Qr remedies Landlord mny have under any Jaw. Landlord shall have the right, at Landlon.J•s option. without further notice or demand of any kind to do the following: 01101/0153 60606.4 8 ·-·····--·--···--··---·---- (t) Terminate this Lease and Tenant's right to possession of the Premises and reentet the Premises snd t~ possession thereof, and Tenant shall have no fur-th.er claim to the P~ or µn~r this Leas~; or (2) Continue this Lease in effect, :reenter and. occupy the Premises for the-account of Tenant, and coUect ~y unpaid Rent or other charges which have or thereafter become due and payable; or · · (3) R~ter th.e.Pl'.CIIDSCS un•r the provisions of subparagraph 2, and thereafter electro termi~ this Lease and tenant'~ right to po$sessicn of the Premises. If Landlord reenters the Premis~ un~ the provisions of subparagtaphs 2 or 3 above, Landlord sball not be deemed to have ttrtninated this Lease or the obligation of Te.na,nt to pay any Rent or other charges thereafter accruing, µnle$$ LandJm:d notifies Tenant in writing of Landlord's ele.ction to termino.tc this Leue. In 'the event uf JllY rec,mtry or~ of posse$SI"on by Landlord, Landlord sllall have the right but not the dbligation. to remove all or any part of Tenant's property in the Premises and to place s.ucb property in i,torage at a public warc.boµse .at ) th~ expense and risk QfTenant. Jf Laodlord elects to relet tl1C ~ fQr the ~llnt of Tenant, the rent n;ceived by Landlord from sutb ~letting ~ be applied as follows: first. tQ th~ payment of any indebtedness other than Rent due hereunder .rrQtn Tenant tQ Landlord; second, to the payment of any costs of sucb teletting; third; .to the payment of the cost of any alterations or repairs to the Premises; fourth to the payment ofRCJ'.lt due 8,lld \lllpaid hereunder; and the halan~. if any, shall be held ~ Landlord and applied in payment of future Rent~ it becomes due. lf that portion of rent received from the ~~ which i$ 11-ppli~ against the llent due hereunder is less than the ~ount of the Rent due, Tenant shali also pay to Landlbrd, as w<m as determined. ~y costs and expenses inc'lUl'cd by J.,andlord 41 connf:Ction with such reletting or in ma.king alterations and repairs to 1he PJ'tmises. which are not covered by the rent received fr():in the reletting. Should Landlord elect to t.emiinate tbis 1,eaS,e under .the provisions of subparegraph l or 3 above, Landlord may recover as damages from Tenant Ul.e following: (1) Past Rent~ Theworth~tthe 1jme of the award of any unpaid Rent which had been~ at the time; oftennination; plus (2) Rent Prior to A ward. lne worth ai the time of the award of the amouni by which the unpaid Renl which would have. been earned after termination until 1}le tune ot award exceeds the amount of such r<mtal loss that Tenant pro~ cottld have been reasonably avoided; plus ('.3) Rent After Award. The worth at the time 9f th~ &ward of the amount by which the unpaid Rent for the fuihmee o:fthe Term after the tim~ of award exceeds the amount of the rental loss that Tenant proves could be reasonably ~void~ plus 01101/0153 60606.4 9 (4) Proximately Caused Damages. Any other amount necessary to compensate Landlord for all detriment proxbnately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be lilcdy to result therefrom, including. but not limited to, any costs or expenses (including attorneys' fees). incurred by Landlord in (a) retaking poss~sion of the Premises, (b) maintaining the Premises after Tenant•s default, (c) preparing the Premises for reletti.ng to a new tenant, including any repairs or alterations> and (d) reletting the Premises, including broker's commissions. "The worth at the time of the award" as used in subparagrapbs (1) and (2) above, is to be computed by allowing interest rrt the rate of ten percent {l 0%) ~r annum. "The worth at the time ofthe award" as used in subparagraph (3) above, is to be computed by discounting the . amount at the discount rate of the Federal Reservt Bank situated nearest to the Premises at the time of the a~d pl"!JS one percent (1%). The waiver by LandlQrd of nny breach of any term, cov~nant or condition of this Lease shall not be deemed a waiver of such term, covenant or condition or of any subsequent breech of the same or any other te~ covenant or condition. Acceptance of Rent by Landlord subsequent to any breach hereof shall not be deemed -a \YfflVer of any preceding breach other than the failure to pay the particular Rent so accepted, regardless of Landlord's knowledge of any breach at the time of such acceptance of Rent. Landlord shall not be deemed to have waived any term, covenant or condition unless Landlord gives Tenant written notice of such waiver. No remedy or election hereunder shnll be deemed exclusive but $ha11, wherever possible. be cumulative with all other remedies at law or in equity. 14. Signage. Tenant may insmll signage on the Premises, at its sole costs and expense, subject to Landlord's prior written approval (not to be unreasonably withheld) of the drawings, plans and specifications for such signage. Notwithstanding the foregoing to the contrary, Tenant shall only be entitled to install signage on the Premises tha:t complies with all Laws. 15. Real Estate Brokers. The folloWing brokerage relationship exists in this transaction and is approved by the parties: Cushman & Wakefield of California represents Landlord exclusively {''Landlord's Brok~r''). Upon complete execution of this Lease by the parties, 'Landlord shall pay Tenant's Broker a C9~ssion based upon a se~ agreement between Landlord1s Broker and Landloro for brokerage services rendered by Landlord's Broker in connection with this tmnsaction. Tenant and Landlord each represent and warn.mt to the other that it bas had no dealings with any person, firm, broker or finder other than the Landlord's Broker in connection vvitb the negotiation of this Lease and the consummation of the transaction contemplated hereby, and that no brokm' or other person, flan or entity other than the Landlord's Broker is entitled to any commission or finder's fee in connection with said transaction. Tenant and Landlord do each hereby agree to indemnify, protect,· defend and ho]d the other harmless from and against liability for compcruiatiop. or c1wges which may be claimed by any such unnamed broker, fmder or other similar party by reason of any dealings or actions of the indemnifying party, including any costs, expenses. and attorneys• fees reasonably incurred with respect thereto. 01101/0153 60006.~ 10 1 16, Notices. All n.oticcs ~uirccl or pennitted by this Agreement smul be~ writing and may be delivered in person (by band or by trt~~i' or courier service) or may be sent by regular, certified or registeted mail or U.S. PostaJ SClV;ice ~~s Ma:,l, witll po~ge prepaid, or by faesi.miJC' transmissiO.t) duting l)Oiillal ~e$S hours; and shall be deemed suflicicn~y givet1 u scr:ved in a. manner specified in thitl Paragraph. Tht: following ad!kess smill be lJlied for notices to Lan\'llotd: Verizon California Inc.~ r/o Corporate Real Estatt.112 Lakeview Canyo~ · Mailoode: CA500CW. Thousand Oaks, CA 913(;2. The following address shall be use4 for noti~ to Tenant: Town Manager. l 10 E. Main S~et, P.O.~ 9:49, Los Oatoa. CA 9S0.31. Any notict i!ent by regi8tered or ccrtifie4 mail. return receipt requested, shall bed~ given on 1he date of delivery shown on the recei,Pt ~a,(j, o.r if no ddivezy date is. shown, the postmark thereon. lf sem by regµ)ar nuut. the nouc~ shall be deemed given forty-eight ( ~) hom'B tifte.t the same is addressed as recp1ired herein and mailed with p<>stage prepaid:· Notices delivere,d by Unned States Expr~ Mail or overnight courier that guarantees next day delivery smill be · deemed given twenty-fOl;ll' (24) hotlt'S after delivery of the same to the United States Postal Service or courier. If eny notice is transmitted by facsimile ~ansmission ()t sinu'Tur means. the same shall be deemed served or delivered upon teleP.hone or fac:simile oo~on ()f receipt of the transmission thereo( provided a copy is also delivered vi8 delivery or mail. If notice is ~lved on a Saturday ot a Sunday or a legal holiday. it shall be d~eii received on the next l:nwnessday 17. No Right To Holdover. Tenant has no right to retain possession of the Premises or lln)' part thereof beyond the expiration ot earlier tenrunntion of this Lease llllless the parties are negotiating a new lease or lease extension i'n good faith. In the event that the parties are not in the process ofnegotiating a new lease or le~ extension in good fai~ Tenant. holds over in vfolation oftWs Paragraph 17 then the Base Rent the~ tn effe¢ payable from and eftet the time of the expiration or earlier tem:rination of this Least\ shall be inereased to two hund!'ed ~nt (200%) of the Base Rent applicable daring the month immediately preceding sueh expiration or earlier termination. 18. Attorneys' Fees .. If any party brings an action or proceeding to enfQrce the term$. hereof or dee!~ rights hereunder, the Prevailjng Party in any such .l)toeecdiug, ~on. or ·appeal thereon, shall be entitl~ to rei:isonablc att;c,neys' fees. Such fetS may be awarded in the same suit or recovered in a separate suit. whether qr 1wt $ucl:i action 91' J)i'Octeding fapUrsUed to decision or judgment. The term .. PrevaUing Party" shall include, without Hmits.tio~ a ~ who sllbstantially obtains or defeats the rtli~f$0ught, as 1he case may be, whether by oomprotnisc, settlement, jud~ent. or the abandonment by the other party of its claim or defense. The attorneys' f~ 11wurd sbail not be computed in accordance with any court fu(s schedule. but shall be such as to fully reimbUrSe all attorneys• fees reasonably incurred. J 9. PUC Approval. Notwithstanding anything to the contrary contained in the Leas~, the Lease shall not commence until and sbflU be 'contingent Upot) ob'qlining fmal approval of the Lease by the California Public Utilities Commission ('iPUC'') on tenns ~ptable to Landlord in Landlord's sole disa:etion ('-PUC Approval ... ). Until Sl!c.b time, if any, that the PUC Approval is obtained, tpe Lease sha,11 not be d~ed tQ gram, demise, transfer or otherwise convey to Tenant any righ1, title or interest whfJ~oever to any pbrtion of the Premises. 01107/0153 ~06.4 11 .k See attnehed. 01107/0IS3 6M06.4 ·-·-----··----· ·······························-------- EXIDBIT A THE PREMISES •. ~ ' See attached. OH07/0l53 60606.<I EXHIBITB DIAGRAM OF NEW.PARKING IMPROVEMENTS TO BE CONSTRUCfED BY TENANT .. .. . ·' . ., EXH1BITC MINIMUM CRJTERIA FOR NEW PARKING IMPROVEMENTS 1. As shown on Exhibit A, Landlord's Parking Area shalt, at a minimum, consist of the following: (a) two (2) fi:lleen foot oversized parking spaces; (b) one (l} ADA compliant parking spaoe; (c) eight (8) standard ten foot parking spaces; (d) a loading zone; and (e) an area for a trash dumpster. 2. Tenant shalI construct a six-foot (6') high fence enclosing Landlord's Par.king Area. 3. Tenant shall construct two gates to provide ingress/ egre.,s to Landlord's Parking Area, consisting of, at a minimum: · A. One 6-foot high "Roller Oate" and B. One motoriwd 6-foot high and 15-foot wide main gate on Montebello Way. 4. Tenant shall install a vehicle detector on OT near the interior portion of the main gate located on Montebello Way for exiting vehicles. 5. Tenant shall install a card reader on or near the exterior portion. of the main gate locnted on Montebello Wa.y to allow admission of vehicles entering the parking area. 6. , Tenant shall install (a) a 5 .. foot "Pedestrian Gate., will be installed on Montebello Way; nnd (b) a 24-foot "New Gate" f.o limit access to the Ramp to Lower Level. 7. Tenant shall relocate the existing Verizo1' telephon.e/c.ard reader currently located at the front entrance of the Verizon-owned butlding to an area near the Pedestrian Oate on Montebello way. 8. Tenant shall install and maintain, at Tenant's sole cost and expense, new landscaping and irrigation systems for the Premises. 9. Tenant shall install and maintaillt at Tenant's sole co.qt and expense, all necessary and required lighting associated with the Premises. 01107/0ISJ 60(.06.4 1 LANDLORD CONSENT, RECOGNITION AND NON-DISTURBANCE AGREEMENT This Landlord Consent, Recognition and Non-Disturbance Agreement is made by and among _______________________, a _______________, with an address of _____________________ (“Prime Landlord”), _________________, a _______________ (“Landlord”), and the United States Postal Service, an independent establishment of the Executive Branch of the government of the United States (“USPS”). WHEREAS, Prime Landlord, as lessor, and Landlord, as lessee, entered into that certain Lease dated March 28, 2002, a copy of which is attached hereto as Exhibit B (the “Prime Lease”) for the lease of 35 exclusive parking spaces located at 15 Montebello Way, as more particularly described therein (the “Premises”) owned by Prime Landlord. WHEREAS, Landlord desires to lease the Premises to USPS, and requests that Prime Landlord consent to and recognize such lease and provide non-disturbance protection to USPS. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Prime Landlord agrees as follows: 1.Recognition and Consent. Prime Landlord hereby consents to the lease between Landlord and USPS, a copy of which is attached hereto as Sub - Ground Lease and incorporated herein by this reference (the “USPS Lease”). Prime Landlord’s recognition of, and consent to, the USPS Lease shall not release Landlord of its obligations under the Prime Lease or alter the primary liability of Landlord to pay the rent and perform and comply with all of its other obligations under the Prime Lease. 2.Non-Disturbance. Notwithstanding anything to the contrary contained in the Prime Lease, in the event of (i) a termination or cancellation of the Prime Lease for any reason (including without limitation non-renewal of the Prime Lease for any reason during the term of the Prime Lease), (ii) the surrender of the Prime Lease, whether voluntary, involuntary or by operation of law, or (iii) the rejection of the Prime Lease in any bankruptcy action by Landlord prior to the expiration date of the Prime Lease, including any exercised extensions and renewals of the Prime Lease, then, Prime Landlord shall recognize and keep in effect the USPS Lease for the unexpired balance of the term of the USPS Lease and for any renewal term or terms exercised by the USPS under the USPS Lease pursuant to the USPS Lease, and shall assume all obligations of Landlord thereunder, so as to establish direct privity of estate and contract as between Prime Landlord and USPS with the same force and effect and relative priority in time and right as though the USPS Lease was originally made directly between Prime Landlord and USPS, and upon receipt of proper documentation from Prime Landlord, including, without limitation, an IRS Form W9, USPS will make the rent and other payments due under the USPS Lease thereafter directly to Prime Landlord as if Prime Landlord were Landlord thereunder, and USPS will make full and complete attornment to Prime Landlord for the balance of the remaining term under the USPS Lease. 3.Cross Default. A default by either Landlord or Prime Landlord under the Prime Lease or under this Agreement shall be considered a default by Landlord under the USPS Lease and a Exhibit C 2 default by Landlord under the USPS Lease shall be deemed to be a default by Landlord under the Prime Lease, and USPS shall have all of the rights and remedies with respect to such default available to USPS under the USPS Lease and such rights and remedies shall be exercisable against the Prime Landlord and Landlord, jointly or severally. Prime Landlord and Landlord agree to notify USPS in writing of any default that occurs under the Prime Lease and to permit USPS sufficient time to exercise its rights under the USPS Lease with respect to such default prior to terminating the Prime Lease due to such default. USPS shall have the right, but not the obligation, to cure defaults by Landlord or Prime Landlord under the Prime Lease. In the event that USPS exercises its right to perform any obligations of Landlord or Prime Landlord under the Prime Lease, Landlord and Prime Landlord each acknowledges and agrees that USPS may withhold the cost of such cure plus any administrative cost and/or interest, from rental payments due or to become due under the USPS Lease. In the event that USPS exercises its right to perform any obligations of Landlord under the USPS Lease, Prime Landlord acknowledges and agrees that USPS may withhold the cost of such cure plus any administrative cost and/or interest, from rental payments due or to become due under the USPS Lease which may ultimately have been payable to Prime Landlord under the terms of the Prime Lease. Nothing herein shall require USPS to cure any default of Landlord or Prime Landlord under the Prime Lease, the USPS Lease or under this Agreement. 4.Recourse of USPS. Without limiting the foregoing consent and recognition, PrimeLandlord expressly acknowledges and agrees that Prime Landlord has read or had an opportunity to read the USPS Lease attached hereto and understands that, at such time as Prime Landlord becomes the landlord under the USPS Lease with respect to the Premises, Prime Landlord shall bebound by the terms thereof, and shall be subject to the rights and remedies of USPS thereunder.By way of example, and not in limitation, Prime Landlord agrees and recognizes that in additionto any rights and remedies available under applicable law, USPS has (i) the right to proportionately abate the rent for any period the leased premises under the USPS Lease, or any part thereof, are determined by USPS to have been rendered untenantable, or unfit for use andoccupancy, by reason of a condition requiring maintenance, repair or replacement; (ii) the rightto perform any maintenance, repair or replacement that landlord fails to timely complete andwithhold the cost of performance plus any administrative cost and/or interest, from rental payments due or to become due under the USPS Lease; and (iii) the right to cancel the USPS Lease if the leased premises under the USPS Lease are determined to be untenantable or unfit foruse or occupancy. Prime Landlord further agrees that USPS shall have the right to seek recoursedirectly against Prime Landlord regarding any breach of the Prime Lease by Prime Landlordwhere such breach adversely effects the rights of USPS under the USPS Lease. 5.Certifications with respect to Prime Lease; Amendments to the Prime Lease. PrimeLandlord and Landlord hereby jointly represent and warrant as follows: (a) the copy of thePrime Lease attached hereto as Exhibit A is a true, correct and complete copy of the PrimeLease; and (b) neither Prime Landlord nor Landlord are in default under the Prime Lease nor does there exist any facts or circumstances which, with the passage of time or the giving of notice, would constitute a default under the Prime Lease. Prime Landlord and Landlord herebyagree that they will not amend or otherwise modify the terms of the Prime Lease without noticeto, and the prior written consent of USPS, which shall not be unreasonably withheld, conditionedor delayed. Any such amendment or modification must be provided to USPS not less than 120 days prior to the date such amendment or modification is to take effect. Prime Landlord will not 3 terminate the Prime Lease without prior written notice to USPS and no such termination will effect in any way the rights of USPS under the USPS Lease with respect to the portion of the leased premises that is included in the Prime Lease. 6.Term of the Prime Lease. In the event that the current term of the Prime Lease expiresbefore the end of the initial term of the USPS Lease, this Agreement shall constitute an exerciseof any renewal options available under the Prime Lease necessary to extend the expiration of the Prime Lease beyond the expiration of the initial term of the USPS Lease. Thereafter, Landlord covenants and agrees that, if USPS exercises any renewal option(s) set forth in Section 4 of theUSPS Lease, then Landlord will exercise any renewal option(s) set forth in the Prime Lease thatare necessary to extend the term of the Prime Lease beyond the expiration of such renewal termof the USPS Lease and Prime Landlord covenants and agrees that it will accept such exercise, whether or not it is made in accordance with the terms of the Prime Lease. 7.Notices. All notices or other written communications hereunder shall be deemed tohave been properly given if delivered in accordance with the delivery methods under the USPS Lease, addressed to USPS and Landlord at the addresses identified in the USPS Lease and addressed to Prime Landlord at the address first set forth above. 8. Successors and Assigns. This Agreement shall be binding upon and inure to the benefitof the respective heirs, personal representatives, successors and assigns of the parties hereto. 9. No Oral Modifications. This Agreement can be modified only in writing duly executedby all parties. 10.Severability. The invalidity of any provision of this Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof. 11.Waivers. No waiver by any party of any provision hereof shall be deemed a waiver of any other provision hereof and no waiver of any breach hereunder by any party shall be deemeda waiver of any subsequent breach by that party of the same or any other provision. A party’sconsent to or approval of any act shall not be deemed to render unnecessary obtaining suchparty’s consent to or approval of any subsequent act. No waiver shall be effective unless it is inwriting, executed on behalf of all parties. 12.Choice of Law; Claims and Disputes. This Agreement shall be governed andinterpreted in accordance with Federal law, however if there is no applicable Federal law thenthe law of the state where the leased premises are located shall be applied. The parties agree that Section 8 of the USPS Lease (Claims and Disputes) shall govern any disputes between the parties with respect to this Agreement. 13. Interpretation. Section headings are not a part hereof and shall not be used to interpret the meaning of this Agreement. This Agreement shall be interpreted in accordance with the fair meaning of its words and both parties certify they either have been or have had the opportunityto be represented by their own counsel and that they are familiar with the provisions of thisAgreement, which provisions have been fully negotiated, and agree that the provisions hereof arenot to be construed either for or against either party as the drafting party. 4 14. Duplicated Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. ThisAgreement may be executed in several counterparts, each of which counterparts shall be deemedan original instrument and all of which together shall constitute a single Agreement. The failureof any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder. 15.Conflict with Prime Lease. In the event of any conflict between the terms hereof andthe terms of the Prime Lease, this Agreement shall control. In the event of any conflict betweenthe Prime Lease and the USPS Lease, the USPS Lease shall control. [Signature Page Follows] 5 IN WITNESS WHEREOF, the parties have executed this Landlord Consent, Recognition and Non-Disturbance Agreement and it is effective as of the date set forth below the signature of USPS below. LANDLORD: _______________________, a ______________________ By: _______________________ Name: _____________________ Title: ______________________ Date: ______________________ PRIME LANDLORD: ____________________, a __________________ By: _______________________ Name: _____________________ Title: ______________________ Date: ______________________ USPS: United States Postal Service By: _______________________ Name: Terrence BrennanTitle: Contracting Officer Date: ______________________ This Page Intentionally Left Blank COMMISSION AGREEMENT January 03, 2024 This Agreement, made as of the last date written below, is between Town of Los Gatos (“Lessor”), and Jones Lang LaSalle Americas, Inc. (“Broker”) as co-broker to Jones Lang LaSalle Americas, Inc. (“Agreement”), and confirms the terms under which Lessor will pay a real estate brokerage commission to Broker for the lease (“Lease”) between Lessor and the United States Postal Service (“Tenant”) of that certain real property described as: Los Gatos M.O. Employee Parking, 15 Montebello Way, Los Gatos, CA USPS Property ID 054542-002 1.Lessor will pay Broker, and Broker will accept as its full and only compensation for services rendered in connection with theLease, an agreed upon rate that is in accordance with local business practices. The Lessor and Broker have agreed upon acommission equal to:Annual Rent Total Rent Commission Rate Amount Due $46,332.00 $231,660.00 4% $9,266.40 2.The commission will be earned 100% upon full execution of the Lease and will be paid within thirty (30) days of executionwithout further condition or contingency.3.The Aggregate Lease Value will include the initial rental to be paid by Tenant on all space leased by the Tenant and anyfixed annual or other periodic bumps and/or fixed annual other periodic rent escalations occurring during the initial term ofthe Lease. The Aggregate Lease Value will not include any rental abatement, operating expenses and/or real estate taxes,any additional amounts paid by Tenant for services over and above those furnished by Lessor as part of the Lease, andoption periods and/or lease terms beyond the initial term of the Lease. In no event shall the foregoing preclude Broker fromreceiving a commission for any extension, renewal, expansion or additional leasing in the event Tenant has engaged Brokerto represent it.4.Lessor agrees that it will not modify or in any way reduce the amount of Broker's commission hereunder. If either party institutes any action or proceeding against the other relating to the provisions of this Agreement, the unsuccessful party inthe action or proceeding will reimburse the prevailing party all reasonable expenses, attorneys’ fees, and disbursements.THE PARTIES HEREBY WAIVE TRIAL BY JURY.5.This Agreement will continue to be in effect until the first anniversary of its full execution. If on the firstanniversary the Lessor and Tenant are still negotiating for the Lease of the subject property, to the extent not prohibited bylaw, this Agreement will be automatically extended until such negotiations cease or a lease is fully executed.6.This Agreement constitutes the entire agreement between Lessor and Broker and supersedes all prior discussions,negotiations, and agreements, whether oral or written. No amendment, alteration, or withdrawal of this Agreement will bevalid or binding unless made in writing and signed by both Lessor and Broker. This Agreement will be binding upon thesuccessors and assignees of the parties.7.Lessor and Broker each represents and warrants to the other that, in connection with Tenant’s Lease of the subjectproperty, it has not employed or dealt with any broker, agent, or finder other than Broker. Lessor and Broker shall eachindemnify and hold the other harmless from and against any claims for brokerage fees or other commissions asserted by any broker, agent or finder employed by Lessor or Broker, respectively, or with whom Lessor or Broker, respectively, hasdealt.8.Lessor and Broker agree not to disclose confidential financial information on commission, or any other information having anadverse effect on the agreement and will refrain from using the information for any other purpose than that for which it wasfurnished. The parties agree that there may be a client fee share, if allowed by applicable law.9.Each party shall be responsible to the other party only for the reasonably foreseeable direct damages caused by its breachof this Agreement and in no event will either party be liable to the other for any loss of or damage to revenues, profits, orgoodwill or other special, incidental, indirect, or consequential damage of any kind resulting from its performance or failure toperform pursuant to the terms of this Agreement. In no event shall Broker’s liability for damages in connection with a claimmade hereunder, including any indemnification obligation arising hereunder, exceed the amount of any commission actuallyreceived by Broker under this Agreement.10.Each signatory to this Agreement represents and warrants that it has full authority to sign this Agreement on behalf of the party for whom it signs and that this Agreement binds such party. BROKER: Jones Lang LaSalle Americas, Inc. LESSOR: Town of Los Gatos By: _______________________________________________ Name and Title Dated: By: _______________________________________________ Name and Title Dated: ATTACHMENT 2