HomeMy WebLinkAboutReso 91-2017 (17-734) City of South San Francisco
400 Grand Avenue)
South San Francisco, CA
City Council
I FOR.`��
Resolution: RES 91-2017
File Number: 17-734 Enactment Number: RES 91-2017
RESOLUTION AUTHORIZING THE CITY MANAGER TO
EXECUTE AN AIRSPACE LEASE FOR THE SOUTH SAN
FRANCISCO CALTRANN STATION WITH THE STATE OF
CALIFORNIA DEPARTMENT OF TRANSPORTATION IN AN
AMOUNT NOT TO EXCEED $94,260 PER YEAR ESCALATED AT 3
PERCENT ANNUALLY FOR UP TO TEN YEARS TO ALLOW
PROJECT IMPROVEMENTS AND USE OF CALTRANS PROPERTY
WITHIN THE US-101 FREEWAY RIGHT-OF-WAY.
WHEREAS, on December 9, 2015, Peninsula Corridor Joint Powers Board ("PCJPB") and the City of
South San Francisco ("City") entered into a Cooperative Agreement, pursuant to which City contracted
with PCJPB to perform or contract for the performance of all design, project management, construction
management, construction engineering and reconstruction related to the South San Francisco Caltrain
Station("Project"); and
WHEREAS, PCJPB requires the execution of a construction and maintenance agreement ("C&M
Agreement") and evidence of a State of California Department of Transportation ("Caltrans") airspace
lease ("Airspace Lease")between Caltrans and City before awarding a contract to qualified lowest bidder
for the Project; and
WHEREAS, the Airspace Lease between Caltrans and City is required in order to permit Project
improvements within the Caltrans right-of-way; and
WHEREAS,Caltrans has a mandate to require fair market rate for leases of property beneath their freeway
facilities and therefore the City lease terms reflect the Caltrans standard agreement; and
WHEREAS,the proposed lease terms include a ten(10)year lease,with up to three(3)extended terms of
ten years, monthly rent of$7,855.00 with a fixed minimum 3 percent increase on the first day of the third
year and every year thereafter so that monthly rent beginning July 1, 2026 would be $9,945, and periodic
reevaluation of the fair market rate by Caltrans; and
WHEREAS, the Airspace Lease cost obligation by the City would be as high as $120,000 per year at the
conclusion of the ten year, renewable lease; and
City of South San Francisco Page 1
File Number: 17-734 Enactment Number: RES 91-2017
WHEREAS, the Airspace Lease contains a provision and reference to California Transportation
Commission ("CTC") Resolution G-03-03 that permits a 20 percent reduction in the fair market rate for
public mass transportation agencies to promote transit use; and
WHEREAS, Caltrans staff has reviewed the City application and believes the Project is justified in
requesting the CTC 20 percent reduction; and
WHEREAS,the City has requested an opportunity to attend an upcoming CTC public meeting to request a
greater than 20 percent reduction since the Project includes high quality site improvements, a nearly$10
million contribution to the Project by the City for hard costs and land acquisition, and a Project location
within a Priority Development Area adjacent to high density residential and employment centers that will
have a significant reduction in greenhouse gas emissions consistent with the State of California's AB 32
and SB 375 statewide climate goals; and
WHEREAS, the City will need to execute the Airspace Lease with Caltrans prior to PCJPB award of
contract scheduled for August 3, 2017 and then amend and revise the Airspace Lease if CTC awards a 20
percent reduction or higher as desired by City; and
WHEREAS,the funding for the initial first year of the Airspace Lease will be drawn from existing project
allocated funding but year two and each year thereafter will require operating budget allocation by the
City.
NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of South San Francisco that the
City Council hereby approves an Airspace Lease for the South San Francisco Caltrain Station with the
State of California Department of Transportation in an amount not to exceed$94,260 per year escalated at
three percent annually for up to ten years, attached hereto as Exhibit A.
BE IT FURTHER RESOLVED that the City Council of the City of South San Francisco authorizes the
Finance Department to establish an ongoing project budget to include the estimated costs consistent with
the information contained in the staff report and Exhibit A.
BE IT FURTHER RESOLVED that the City Council hereby authorizes the City Manager to execute this
Airspace Lease for the South San Francisco Caltrain Station with the State of California Department of
Transportation on behalf of the City in substantially the same form as attached hereto as Exhibit A; to
make any revisions, amendments, corrections and modifications, subject to the approval of the City
Attorney, deemed necessary to carry out the intent of this Resolution and which do not materially alter or
increase the City's obligations thereunder; and to take any related action reasonably necessary to carry out
the intent of this Resolution.
* * * * *
City of South San Francisco Page 2 Printed on 7/27/17
File Number: 17-734 Enactment Number: RES 91-2017
At a meeting of the City Council on 7/26/2017, a motion was made by Richard Garbarino, seconded by
Liza Normandy, that this Resolution be approved.The motion passed.
Yes: 4 Vice Mayor Normandy, Councilmember Garbarino, Councilmember
Matsumoto, and Mayor Gupta
No: 1 Councilmember Addiego
Attest
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City of South San Francisco Page 3
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(Lease Area No. 04-SM-101-01)
(Account No. 04-SMX-101-0001-02)
STATE OF CALIFORNIA
DEPARTMENT OF TRANSPORTATION
AIRSPACE LEASE
THIS LEASE, dated May 4, 2017 is by and between the STATE OF CALIFORNIA, acting by and
through its Department of Transportation, hereinafter called "Landlord," and
City of South San Francisco, hereinafter called "Tenant."
W I T N E S S E T H
For and in consideration of the rental and of the covenants and agreements hereinafter set forth
to be kept and performed by the Tenant, Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the Premises herein described for the term, at the rental and subject to and upon all of
the terms, covenants and agreements hereinafter set forth.
ARTICLE 1. SUMMARY OF LEASE PROVISIONS
Landlord: California Department of Transportation
Tenant: City of South San Francisco
Premises: State Freeway Lease Area (FLA) SM-101-01 located in the City of South San Francisco
County of San Mateo , State of California, and more particularly described in Article 2.
Lease Term Ten (10) years plus three 10-year options, initial term commencing October 1, 2017 and
expiring on September 30, 2027.
Monthly Rent: $ 7855.00 (Article 4)
Security Deposit: $ -0- (Article 18)
Use: Build and maintain Pedestrian undercrossing (Article 5)
Comprehensive General Liability Insurance: $5,000,000. (Article 10)
Insurance provider: .
Policy number: .
Business Automobile Liability Insurance: $1,000,000. (Article 10)
Insurance provider: .
Policy number: .
Garage Keeper's Legal Liability Insurance: $1,000,000. (Article 10)
Insurance provider: .
Policy number: .
Workers' Compensation Insurance: $1,000,000. (Article 10)
Insurance provider: .
Policy number: .
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Addresses for Notices: (Article 19)
To Landlord:
Department of Transportation
Right of Way Airspace Development MS 11
US Mail: PO Box 23440, Oakland, CA 94623-0440
Street Address: 111 Grand Avenue, 13th floor Oakland, CA 94612-3771
To Tenant: City of South San Francisco
315 Maple Avenue
South San Francisco, CA 94080
Richard Lee, Finance Director
Email: [email protected] Phone: (650) 877-8505
References in this Article 1 to the other Articles are for convenience and designate other
Articles where references to the particular item contained in the Summary of Lease Provisions appear.
Each reference in this Lease to the Summary of Lease Provisions contained in this Article 1 shall be
construed to incorporate all of the terms provided under the Summary of Lease Provisions. In the
event of any conflict between the Summary of Lease Provisions and the balance of the Lease, the latter
shall control.
ARTICLE 2. PREMISES
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, for the term, at the
rent, and upon the covenants and conditions hereinafter set forth, that certain Premises known as
Freeway Lease Area No. SM-101-01, situated in the City of South San Francisco and County
of San Mateo, said land or interest therein being shown on the map or plat marked "Exhibit A,"
attached hereto and by this reference made a part hereof.
EXCEPTING THEREFROM all those portions of the above-described Premises occupied by
the supports and foundations of the existing structure.
ALSO EXCEPTING THEREFROM all that portion of the Premises above a horizontal plane 5
feet below the underside of the superstructure of the existing structure, which plane extends to a line
10 feet, measured horizontally, beyond the outermost protrusion of the superstructure of the structure.
California Civil Code Section 1938 requires commercial landlords to disclose to tenants
whether the property being leased has undergone inspection by a Certified Access Specialist ("CASp")
to determine whether the property meets all applicable construction-related accessibility requirements.
Tenant is hereby advised that the Premises have NOT been inspected by a CASp.
ARTICLE 3. TERM
The term of this Lease shall be for Ten (10) Years, commencing October 1, 2017, and
expiring on September 30, 2027.
Tenant shall have the option to exercise three (3) extended terms of ten (10) years, which
extended term is to begin on the expiration of the initial term. The Tenant’s option of renewing this
lease shall be exercised in writing by mailing by certified or registered mail notice to the Landlord at
least one-hundred eighty (180) days prior to the commencement of this renewal period. In the event
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Tenant does not exercise his option of renewal, Landlord shall have the right to post the lease premises
with “For Lease” signs and show prospective tenants during any terminal six (6) month term of the
lease. The minimum monthly rent for the option term shall be determined via Article 4.
ARTICLE 4. RENT
4.1 Minimum Monthly Rent
Tenant shall pay to Landlord as minimum monthly rent, without deduction, setoff, prior notice,
or demand, the sum of $ 7855.00 per month, in advance on the first day of each month, commencing
on the Term commencement date and continuing during the term. Minimum monthly rent for the
second rent year and beyond shall be adjusted pursuant to section 4.2 below, and shall be subject to
reevaluation as provided for within this Article.
Minimum monthly rent for the first month or portion of it shall be paid on the Term
commencement date. Minimum monthly rent for any partial month shall be prorated at the rate of
1/30th of the minimum monthly rent per day. All rent checks shall have printed on their face the
following tenancy reference number 04-SMX-101-0001-02 and shall be paid to Landlord at the
following address: State of California, Department of Transportation, Attention: Cashier, P. O. Box
168019, Sacramento, CA 95816-8019.
4.2 Discount to Rent
In the case that the California Transportation Commission (CTC) approves a transportation
discount pursuant to CTC Resolution G-03-03 Section 2.2, rent shall be discounted by 20% (or greater
if so determined by CTC) of the fair market value lease rate of $ 7855.00 and adjustments made
accordingly as per Section 4.3 of this lease less the 20% discount. If approved, such discount shall be
memorialized via a written amendment to this Lease. 4.3 Adjustment to Rent
The minimum monthly rent provided for in Section 4.1 shall be subject to adjustment as of the
first day of the third year of the lease term and every year thereafter, either via a fixed minimum 3%
increase (rounded to closest $5) or via an amount derived from a reevaluation which may occur at
Landlord’s option per Section 4.4. Table 4.2.1 below provides the Tenant’s minimum rent obligation
for the 10 years of the term, unless a new fair market rent is derived via reevaluation per Section 4.4
which will supersede the pre-calculated amounts within Table 4.2.1. If a new rent determined via a
reevaluation does not take effect on the 6th, 11th and/or 16th year of the term, then the rent will continue
to adjust annually at the set 3% fixed amount until a reevaluation, if any, takes place. Landlord shall
not be required to provide any further notice to Tenant regarding annual rent adjustments during the
Lease term.
Table 4.3.1 Lease Year Period Rent
July 1, 2017 $ 7,855.00
July 1, 2019 $ 8,090.00
July 1, 2020 $ 8,330.00
July 1, 2021 $ 8,580.00
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July 1, 2022 $ 8,835.00
July 1, 2023 $ 9,100.00
July 1, 2024 $ 9,375.00
July 1, 2025 $ 9,655.00
July 1, 2026 $ 9,945.00
4.4 Landlord's Compensation upon Assignment, Transfer or Sublease of Tenant's Leasehold
(a) In the event that Tenant voluntarily assigns, transfers or subleases any of Tenant's rights in
the Premises, Tenant shall pay to Landlord compensation in connection with the transaction in an
amount equal to fifty percent (50%) of any and all consideration, whether in present payments or in
future payments, which Tenant receives from an assignee, transferee or subtenant in excess of the
amount of rent Tenant is obligated to pay to Landlord under this Lease.
(b) Payment by Tenant of the amount of compensation required under this Section 4.3 is a
condition to Landlord's giving its consent to any assignment, transfer or sublease under Section 16.1,
and Landlord may withhold its consent to any such assignment, transfer or sublease until this
compensation has been paid. In addition, before Landlord gives its consent to any such transaction,
Tenant shall deliver to the assignee, transferee or subtenant a written summary of all sums due and
owing to Landlord under this section and shall deliver to Landlord a written acknowledgement by the
assignee, transferee or subtenant that said person affirms that the sums are due and owing to Landlord
and that said person accepts responsibility for ensuring that such sums are paid directly to Landlord.
4.5 Reevaluation of Minimum Monthly Rent
Landlord, at its sole discretion, expressly reserves the right to reevaluate the minimum monthly
rent three times during the term of this Lease. During the fifth, tenth, and fifteenth years from the date
of the commencement of the initial term, or as soon thereafter as Landlord desires, a fair market lease
rate may be determined in the manner set forth below and shall be established as the minimum
monthly rent commencing on the start of the 6th, 11th, 16th years of the term or as soon thereafter upon
the running of the notice period as provided for below. Notwithstanding anything contained herein to
the contrary, any reevaluation of rent conducted pursuant to this Section 4.5 shall be discounted by the
percentage approved by the CTC pursuant to Section 4.2 above.
The minimum monthly rent established by this section shall continue to be subject to the 3%
annual adjustment beginning in the third year established in Section 4.2. Table 4.2.1 shall be amended
to reflect the new minimum monthly rent for the remaining Lease term pursuant to the reevaluation.
The term "fair market lease rate" means the highest lease rate estimated in terms of money
which the leased premises, excluding improvements constructed by Tenant thereon, would bring if
exposed for lease in the open market, with a reasonable time allowed to find a tenant, leasing with full
knowledge of the purpose and uses to which the leased premises is being put and the restrictions on use
contained in Article 5 of this lease.
The parties intend to establish the fair market lease rate through negotiation. At least 90 days
prior to implementation of a new reevaluated lease rate, Landlord shall notice Tenant of its intent to
reevaluate the rent, and shall propose to Tenant a new fair market lease rate. In an effort to encourage
productive negotiations, if Landlord and Tenant have not mutually agreed upon the fair market lease
rate for the Premises 60 days after the notice, then Landlord shall unilaterally set the fair market lease
rate based on data collected from a rent survey of reasonably comparable Caltrans and non-Caltrans
owned properties and shall use the highest per square foot rate paid by a tenant for a comparable
property with a comparable use within approximately a one mile radius of the subject Premises.
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If Landlord unilaterally sets the fair market lease rate, Tenant shall have the option to accept
the new lease rate or Tenant may object to the new lease rate and elect to terminate the Lease with no
penalty by providing to Landlord a 30 Day Notice of its intent to Quit. Such termination notice must
be provided by Tenant to Landlord in writing. Tenant’s election to Quit shall place the Tenant in the
same legal position as if the entire term of this Lease had run its course and expired. Tenant shall have
no further rights other than those expressed within this Lease relevant to the natural expiration of the
term of the Lease. In the case that Tenant does not provide notice of intent to terminate, the new fair
market lease rate established by Landlord shall become effective on the first day of the month
following Landlord’s 90 day notice of its intent to implement the new reevaluated lease rate. For
example, if Landlord provides notice to Tenant of its proposed new rent on February 1, 2021, the new
rent would take effect on May 1, 2021. If Tenant fails to pay the new fair market lease rate, Landlord
shall treat Tenant’s failure to pay the new lease rate as a material breach.
4.6 Reevaluation on Change in Use
Landlord expressly reserves the right to establish a new minimum monthly rent as a condition
to Landlord’s approval of any use of the Premises not specifically permitted by Section 5.1 and as a
condition to any amendment to or changes in the uses permitted by that section.
4.7 Reevaluation on Transfer
Landlord expressly reserves the right to establish a new minimum monthly rent as a condition
to Landlord’s specific approval of any transfer, or assignment of this Lease or any subletting of all or
any portion of the Premises; provided, however, that Tenant shall have the right from time to time,
upon notice to, but without the consent of Landlord, to transfer this Lease or use and occupancy of all
or any of the Premises to any person or entity that directly or indirectly controls, is controlled by or is
under common control with Tenant for any or all of the uses permitted under this Lease without any
such new minimum monthly rent and without obtaining Landlord’s consent.
ARTICLE 5. USE
5.1 Specified Use
The Premises shall be used and occupied by Tenant only and exclusively for the purpose of
open public plaza and pedestrian undercrossing and for no other purpose whatsoever without obtaining
prior written consent of Landlord and the concurrence of the Federal Highway Administration.
Landlord expressly reserves the right to establish a new minimum monthly rent as a condition to
Landlord’s approval of any use of the leased premises not specifically permitted by this section.
5.2 Condition of Premises
Tenant hereby accepts the Premises in the AS-IS condition existing as of the date of the
execution hereof, subject to all applicable zoning, municipal, county, state and federal laws, ordinances
and regulations governing and regulating the use of the Premises, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any exhibits attached hereto. Tenant acknowledges
that neither Landlord nor any agent of Landlord has made any representation or warranty with respect
to the condition of the Premises or the suitability thereof for the conduct of Tenant’s business, nor has
Landlord agreed to undertake any modification, alteration or improvement to the Premises except as
provided in this Lease.
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Except as may be otherwise expressly provided in this Lease, the taking of possession of the
Premises by Tenant shall in itself constitute acknowledgement that the Premises are in good and
Tenantable condition, and Tenant agrees to accept the Premises in its presently existing condition "as
is", and that the Landlord shall not be obligated to make any improvements or modifications thereto
except to the extent that may otherwise be expressly provided in this Lease.
Tenant represents and acknowledges that it has made a sufficient investigation of the conditions
of the Premises existing immediately prior to the execution of this Lease (including investigation of the
surface, subsurface and groundwater for contamination and hazardous materials) and is satisfied that
the Premises will safely support the type of improvements, if any, to be constructed and maintained by
Tenant upon the Premises, that the Premises is otherwise fully fit physically and lawfully for the uses
required and permitted by this Lease and that Tenant accepts all risks associated therewith.
Tenant acknowledges that (1) Landlord has informed Tenant prior to the commencement of the
term of this Lease that the Landlord does not know nor has reasonable cause to believe that any release
of any hazardous material has come to be located on or beneath the Premises; (2) prior to the
commencement of the term of this Lease, the Landlord has made available to Tenant, for review and
inspection, records in the possession or control of the Landlord which might reflect the potential
existence of hazardous materials on or beneath the Premises; (3) Landlord has provided Tenant access
to the Premises for a reasonable time and upon reasonable terms and conditions for purposes of
providing to Tenant the opportunity to investigate, sample and analyze the soil and groundwater on the
Premises for the presence of hazardous materials; (4) by signing this Lease Tenant represents to
Landlord that, except as otherwise may be stated on “Exhibit C” attached hereto and by this reference
incorporated herein, Tenant does not know nor has reasonable cause to believe that any release of
hazardous material has come to be located on or beneath the Premises and (5) with respect to any
hazardous material which Tenant knows or has reasonable cause to believe has come or will come to
be located on or beneath the Premises, Tenant has listed the hazardous material on attached “Exhibit
C” and agrees promptly to commence and complete the removal of or other appropriate remedial
action regarding the hazardous material at no cost or expense to Landlord and in full compliance with
all applicable laws, regulations, permits, approvals and authorizations. The phrase “hazardous
material,” as used herein, has the same meaning as that phrase has in Section 5.7 of this Lease.
Tenant agrees that, except as otherwise expressly provided in this Lease, Tenant is solely
responsible without any cost or expense to the Landlord to take all actions necessary, off as well as on
the Premises to improve and continuously use the Premises as required by this Lease and in
compliance with all applicable laws and regulations.
5.3 Compliance with Law
Tenant shall not use the Premises or permit anything to be done in or about the Premises which
will in any way conflict with any law, statute, zoning restriction, ordinance or governmental rule or
regulation or requirements of duly constituted public authorities now in force or which may hereafter
be in force, or with the requirements of the State Fire Marshal or other similar body now or hereafter
constituted, relating to or affecting the condition, use or occupancy of the Premises. The judgment of
any court of competent jurisdiction or the admission of Tenant in any action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any law, statute, ordinance or governmental
rule, regulation or requirement, shall be conclusive of that fact as between Landlord and Tenant.
Tenant shall not allow the Premises to be used for any unlawful purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises.
5.4 Compliance with Requirements of Lease Application
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By executing this Lease, Tenant certifies that all the statements made in the Lease Application
for this Lease are true and correct. If at any time during the term of this Lease Landlord discovers that
any statement Tenant made in the Airspace Lease Application is false, this Lease may be terminated
immediately by Landlord and be of no further force or effect.
5.5 Petroleum Products
Tenant shall not install facilities for, nor operate on the Premises, a gasoline or petroleum
supply station. Tenant shall not permit on the Premises any vehicles used or designed for the
transportation or storage of gasoline or petroleum products. Tenant shall also not permit on the
Premises any bulk storage of gasoline or petroleum products.
5.6 Explosives and Flammable Materials
The Premises shall not be used for the manufacture of flammable materials or explosives, or for
any storage of flammable materials, explosives or other materials or other purposes deemed by
Landlord to be a potential fire or other hazard to the transportation facility. The operation and
maintenance of the Premises shall be subject to regulations of Landlord so as to protect against fire or
other hazard impairing the use, safety and appearance of the transportation facility. The occupancy
and use of the Premises shall not be such as will permit hazardous or unreasonably objectionable
smoke, fumes, vapors or odors to rise above the surface of the traveled way of the transportation
facility.
5.7 Hazardous Materials
Tenant shall at all times and in all respects comply with all federal, state and local laws,
ordinances and regulations, including, but not limited to, the Federal Water Pollution Control Act (33
U.S.C. section 1251, et seq.), Resource Conservation and Recovery Act (42 U.S.C. section 6901, et
seq.), Safe Drinking Water Act (42 U.S.C. section 300f, et seq.), Toxic Substances Control Act (15
U.S.C. section 2601, et seq.), Clean Air Act (42 U.S.C. section 7401, et seq.), Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. section 9601, et seq.), Safe
Drinking Water and Toxic Enforcement Act (California Health and Safety Code section 25249.5, et
seq.), other applicable provisions of the California Health and Safety Code (section 25100, et seq., and
section 39000, et seq.), California Water Code (section 13000, et seq.), and other comparable state
laws, regulations and local ordinances relating to industrial hygiene, environmental protection or the
use, analysis, generation, manufacture, storage, disposal or transportation of any oil, flammable
explosives, asbestos, urea formaldehyde, radioactive materials or waste, or other hazardous, toxic,
contaminated or polluting materials, substances or wastes, including, without limitation, any
“hazardous substances” under any such laws, ordinances or regulations (collectively “Hazardous
Materials Laws”). As used in the provisions of this Lease, “hazardous materials” include any
“hazardous substance” as that term is defined in section 25316 of the California Health and Safety
Code and any other material or substance listed or regulated by any Hazardous Materials Law or
posing a hazard to health or the environment. Except as otherwise expressly permitted in this Lease,
Tenant shall not use, create, store or allow any hazardous materials on the premises. Fuel stored in a
motor vehicle for the exclusive use in such vehicle is excepted.
In no case shall Tenant cause or allow the deposit or disposal of any hazardous materials on the
Premises. Landlord, or its agents or contractors, shall at all times have the right to go upon and inspect
the Premises and the operations thereon to assure compliance with the requirements herein stated. This
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inspection may include taking samples of substances and materials present for testing, and/or the
testing of soils or underground tanks on the Premises.
In the event Tenant breaches any of the provisions of this Section, this Lease may be
terminated immediately by Landlord and be of no further force or effect. It is the intent of the parties
hereto that Tenant shall be responsible for and bear the entire cost of removal and disposal of
hazardous materials introduced to the Premises during Tenant’s period of use and possession as owner,
operator or Tenant of the Premises. Tenant shall also be responsible for any clean-up and
decontamination on or off the Premises necessitated by the introduction of such hazardous materials on
the Premises. Tenant shall not be responsible for or bear the cost of removal or disposal of hazardous
materials introduced to the Premises by any party other than Tenant during any period prior to
commencement of Tenant’s period of use and possession of the Premises as owner, operator or Tenant.
Tenant shall further hold Landlord, and its officers and employees, harmless from all
responsibility, liability and claim for damages resulting from the presence or use of hazardous
materials on the Premises during Tenant's period of use and possession of the Premises.
5.8 Signs
Not more than four (4) advertising signs of a size not greater than thirty (30) square feet of
surface area may be erected on the Premises. The wording on these signs shall be limited to Tenant's
name or trade name, the words "Parking," or "Auto Parking," a statement of rates, and a directional
arrow. The location of all these signs shall be subject to Landlord's prior approval. None of these
signs shall be attached to or painted on any bridge structure or building without the express written
consent of Landlord. All of these signs shall also comply with all applicable requirements of local
governmental entitles, including governmental approval and payment of any fees.
Except as set forth in the previous paragraph of this Section, Tenant shall not construct, erect,
maintain or permit any sign, banner or flag upon the Premises without the prior written approval of
Landlord. Tenant shall not place, construct or maintain upon the Premises any advertising media that
include moving or rotating parts, searchlights, flashing lights, loudspeakers, phonographs or other
similar visual or audio media. The term "sign" means any card, cloth, paper, metal, painted or wooden
sign of any character placed for any purpose on or to the ground or any tree, wall, bush, rock, fence,
building, structure, trailer or thing. Landlord may remove any unapproved sign, banner or flag existing
on the Premises, and Tenant shall be liable to and shall reimburse Landlord for the cost of such
removal plus interest as provided in Section 19.11 from the date of completion of such removal.
5.9 Landlord's Rules and Regulations
Tenant shall faithfully observe and comply with the rules and regulations that Landlord shall
from time to time promulgate for the protection of the transportation facility and the safety of the
traveling public. Landlord reserves the right from time to time to make reasonable modifications to
said rules and regulations. The additions and modifications to those rules and regulations shall be
binding upon Tenant upon delivery of a copy of them to Tenant.
5.10 Wrecked Vehicles
Tenant shall not park or store wrecked or inoperable vehicles of any kind on the Premises.
5.11 Vending
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No third party vending of any kind or character shall be conducted, permitted or allowed upon
the Premises without the prior express written consent of Landlord.
5.12 Water Pollution Control
Tenant shall comply with all applicable State and Federal water pollution control requirements
regarding storm water and non-storm water discharges from the tenant’s leasehold area and will be
responsible for all applicable permits including but not limited to the National Pollutant Discharge
Elimination System (NPDES) General Permit and Waste Discharge Requirements for Discharges of
Stormwater Associated with Industrial Activities (Excluding Construction), the NPDES General
Permit for Stormwater Discharges Associated with Construction and Land Disturbance Activities, and
the Caltrans Municipal Separate Storm Sewer System NPDES Permit, and permits and ordinances
issued to and promulgated by municipalities, counties, drainage districts, and other local agencies
regarding discharges of storm water and non-storm water to sewer systems, storm drain systems, or
any watercourses under the jurisdiction of the above agencies. Copies of the current storm water
related NPDES permits are available on the State Water Resources Control Board’s website at
http://www.swrcb.ca.gov/water_issues/programs/stormwater/.
Tenant understands the discharge of non-storm water into the storm sewer system is prohibited
unless specifically authorized by one of the permits or ordinances listed above. In order to prevent the
discharge of non-storm water into the storm sewer system, vehicle or equipment washing, fueling,
maintenance and repair on the Premises is prohibited.
In order to prevent the discharge of pollutants to storm water resulting from contact with
hazardous material, the storage or stockpile of hazardous material on Premises is strictly prohibited.
Tenant shall implement and maintain the Best Management Practices (BMPs) shown in the
attached Stormwater Pollution Prevention Fact Sheet(s) for: General Land Use and Parks and
Recreation marked “Exhibit B.” Tenant shall identify any other potential sources of storm water and
non-storm water pollution resulting from Tenant’s activities on the premises, which are not addressed
by the BMPs, contained in the attached Fact Sheet(s), and shall implement additional BMPs to prevent
pollution from those sources. Additional BMPs may be obtained from 2 other manuals:
(1) Right of Way Property Management and Airspace Storm Water Guidance Manual available
for review online at: www.dot.ca.gov/hq/row/rwstormwater, and
(2) Construction Site Best Management Practices Manual, available for review online at:
www.dot.ca.gov/hq/construc/stormwater/manuals.htm.
In the event of conflict between the attached fact sheet(s), the above-referenced manuals, and this
Lease, this Lease shall control.
Tenant shall provide Landlord with the Standard Industrial Classification (SIC) code applicable
to Lessee’s facilities and activities on the lease premises. A list of SIC codes regulated under the
General Industrial Permit SIC codes may be found at the State Water Resources Control Board
website: http://www.waterboards.ca.gov/water_issues/programs/stormwater/gen_indus.shtml. Other
SIC codes may be found at www.osha.gov/pls/imis/sicsearch.html.
Landlord, or its agents or contractors, shall at all times have the right to enter and inspect the
Premises and the operations thereon to assure compliance with the applicable permits, and ordinances
listed above. Inspection may include taking samples of substances and materials present for testing,
and/or the testing of storm sewer systems or watercourses on the Premises.
ARTICLE 6. IMPROVEMENTS
6.1 No Improvements Without Prior Written Consent of Landlord
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No improvements of any kind shall be placed in, on, or upon the Premises, and no alterations
shall be made in, on, or upon the Premises without the prior written consent of Landlord and the
concurrence of the Federal Highway Administration. Tenant may, at its sole expense, install and
maintain any additional fencing and entrances that may be required by its use of the Premises, subject
to the approval of the location by Landlord, the Federal Highway Administration and the City of South
San Francisco and County of San Mateo ; provided that Tenant shall at its sole expense construct
and maintain sidewalks and driveways at the locations where the additional entrances are installed. In
the event Tenant violates any of the provisions of this Article, this Lease may be terminated
immediately by Landlord and be of no further force or effect.
6.2 Encroachment Permit
Tenant, prior to construction or alteration of any improvements on or of the leased premises,
shall obtain an executed Encroachment Permit from Landlord.
Issuance by Landlord of an Encroachment Permit shall be contingent upon Tenant's providing,
at Landlord’s sole discretion, all or a combination of, the following, to the extent applicable:
(a) Final construction plans and detailed specifications. All such plans and specifications
submitted by Tenant to Landlord shall be subject to the review and approval of Landlord, the State Fire
Marshal and if on an interstate freeway the Federal Highway Administration.
(b) Evidence of coverage that assures Landlord that sufficient monies will be available to
complete the proposed construction or alteration. The amount of coverage shall be at least equal to the
total estimated construction cost. Such coverage shall take one of the following forms:
(1) Completion bond issued to Landlord as obligee.
(2) Performance bond and labor and material bond or performance bond containing the
provisions of the labor and material bond supplied by Tenant's contractor or contractors, provided said
bonds are issued jointly to Tenant and Landlord as obligees.
(3) Satisfactory evidence of availability of funds necessary for completion of the proposed
construction or alteration.
(4) Any combination of the above.
All bonds shall be issued by a company qualified to do business in the State of California and
acceptable to Landlord. All bonds be in a form acceptable to Landlord and shall ensure faithful and
full observance and performance by Tenant of all terms, conditions, covenants and agreements relating
to the construction of improvements within the leased premises.
(c) Liability insurance as provided in Article 10.
(d) A copy of a building permit issued by the appropriate local jurisdiction.
(e) A copy of Tenant's contract with the general contractor actually performing
construction.
(f) Note and Deed of Trust, if any.
(g) Loan escrow instructions, if any.
(h) Final landscaping and irrigation plans and detailed specifications including a
maintenance plan for litter removal, watering, fertilization and replacement of landscaping.
(i) Evidence of compliance with the applicable provisions of all federal, state and local
environmental statutes, laws, regulations and ordinances.
Tenant agrees to diligently apply for and meet all requirements for issuance of the
Encroachment Permit and Landlord agrees to not unreasonably withhold issuance of said
Encroachment Permit. Tenant is obligated to deliver to Landlord the documents described in
subdivisions (a) through (i) of this section regardless of whether an Encroachment Permit may have
been issued inadvertently before these documents have been provided to Landlord.
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6.3 Planning and Zoning
Tenant’s use and proposed improvements shall be subject to all applicable zoning, municipal,
county, state and federal laws, ordinances and regulations governing and regulating the use of the
Premises.
6.4 Standard of Construction
Tenant agrees that any improvements or construction upon the premises shall: (a) be consistent
with all fire safety requirements including State Fire Marshall approval, (b) be subject to the approval
of Landlord, and (c) in every respect comply with the laws, ordinances and regulations, federal, state,
municipal or otherwise, that may govern construction of the same. Tenant shall not construct or place
on the leased premises any improvements which impair Landlord's ability to maintain, operate, use,
repair or improve any part of the transportation facility situated on the leased premises or on adjoining
real property. Tenant shall save Landlord harmless of and from any loss or damage caused by reason of
the construction of said improvements.
6.5 Soil Testing
At Tenant's sole cost and expense, Tenant shall secure soil compaction tests and other tests as
necessary for construction of Tenant's improvements and for the support of the improvements on the
underlying land or structures thereon. Tenant shall notify Landlord of the location of all test borings,
which shall not interfere in any manner with the operation of the facility by Landlord. Tenant hereby
agrees that Landlord is making no representation regarding existing soil compaction or structural
capability of the land or any existing structure thereon. Responsibility for any loss or damage caused
by inadequate soil compaction or other structural capacity for Tenant's proposed improvements shall
be subject to the indemnification provisions of Section 10.1
6.6 Commencement of Construction
Tenant shall commence construction of the improvements described in Tenant's final
construction plans and detailed specifications within 365 calendar days of the date of execution of
this Lease. For the purposes of this Article, construction shall be deemed to have commenced upon the
issuance by Landlord of an encroachment permit under Section 7.1. In the event construction is not
commenced within the time set forth herein, this Lease may be terminated by Landlord and thereafter
be of no further force and effect.
6.7 Completion of Construction and Occupancy of Improvements
Construction of the improvements shall be completed consistent with the approved construction
plans within 1,095___ calendar days after the commencement of construction. Tenant shall not occupy
or use any of the improvements until Tenant has received final building approval and a Certificate of
Occupancy from the appropriate local agency and Landlord has issued to Tenant an executed
Encroachment Permit Completion Notice. In the event Tenant violates any of the provisions of this
section, this Lease may be terminated by Landlord and be of no further force and effect.
6.8 “As-Built" Plans
Within ninety (90) days after completion of construction of improvements or alterations,
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Tenant shall furnish Landlord, at Tenant's expense, one set of "As-Built" plans, according to a scale
and size designated by Landlord, showing said improvements as constructed in detail, including the
location of underground and aboveground utility lines.
6.9 Termination If Required Construction Proves Economically Infeasible
This Lease requires Tenant to submit plans for any proposed improvements and construction
activities conducted on the premises and to obtain an Encroachment Permit prior to beginning any
construction related activities on the premises. If Landlord’s Encroachment Permits office reviews
Tenant’s plans, and thereafter requires Tenant to construct certain improvements or to employ certain
construction methods as a condition of the Encroachment Permit, Tenant shall have the option to elect
not to proceed with the construction or to terminate this lease agreement if the required improvements
or construction methods prove economically infeasible to Tenant.
ARTICLE 7. SURRENDER OF PREMISES AT EXPIRATION OR TERMINATION OF LEASE
At the expiration or earlier termination of this Lease, Tenant shall peaceably and quietly leave,
surrender, and yield up to Landlord the Premises together with all appurtenances and fixtures in good
order, condition and repair, reasonable wear and tear excepted.
ARTICLE 8. OWNERSHIP AND REMOVAL OF IMPROVEMENTS AND PERSONAL
PROPERTY
8.1 Ownership of Improvements During Term
All improvements constructed on the premises by Tenant as permitted or required by this Lease
shall, during the term of this Lease, be and remain the property of Tenant; provided, however, that
Tenant's rights and powers with respect to the improvements are subject to the terms and limitations of
this Lease and Tenant's interest in such improvements shall terminate upon the expiration or earlier
termination of this Lease. Following completion of construction, Tenant shall not remove any
improvements from the premises nor waste, destroy or modify any improvements on the premises,
except as specifically permitted by this Lease. At the expiration or termination of this lease, all
improvements constructed on the premises by Tenant shall vest in Landlord. Tenant shall deliver said
improvements to Landlord in good condition and repair, reasonable wear and tear excepted, without
compensation to Tenant, any subtenant or third party, free and clear of all claims to or against them by
Tenant, any subtenant or third party, and Tenant shall defend and hold Landlord harmless from all
liability arising from such claims or from the exercise by Landlord of its rights under this section. In
the event said improvements are not delivered to Landlord in good condition and repair, reasonable
wear and tear excepted, Landlord shall make the necessary maintenance and repairs and Tenant shall
be liable to and shall reimburse Landlord for any such expenditures made, plus interest as provided in
Section 22.11 from the date of completion of work. Landlord and Tenant covenant for themselves and
all persons claiming under or through them that the improvements are real property.
8.2 Removal of Personal Property and Ownership at Termination
At the expiration or earlier termination of this Lease, Landlord may, at Landlord's sole election,
require the removal from the premises, at Tenant's sole cost and expense, of all personal property
(other than fixtures), or of certain personal property (other than fixtures), as specified in the notice
provided for below. A demand to take effect at the normal expiration of the term shall be effected by
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notice given at least thirty (30) days before the expiration date. A demand to take effect on any other
termination of the term of this Lease shall be effectuated by notice given concurrently with notice of
such termination or within ten (10) days after such termination. Tenant shall be liable to Landlord for
costs incurred by Landlord in effecting the removal of personal property which Tenant has failed to
remove after demand pursuant to this Section 8.2.
Tenant may remove any personal property from time to time within forty-five (45) days of the
expiration of the term. Tenant shall repair all damage (structural or otherwise) caused by any such
removal. Any personal property not removed by Tenant within forty-five (45) days following
expiration of the term shall be deemed to be abandoned by Tenant and shall, without compensation to
Tenant, become the Landlord's property, free and clear of all claims to or against them by Tenant or
any other person.
8.3 Removal of Improvements at Termination
Upon the expiration or earlier termination of this Lease, Landlord may, upon written notice,
require Tenant to remove, at the sole cost and expense of Tenant, and not later than ninety (90) days
after the expiration or earlier termination of this Lease, all structures, buildings and improvements of
any kind whatsoever placed or maintained on the premises, whether below, on or above the ground by
Tenant or others, including, but not limited to, foundations, structures, buildings, utility lines,
switchboards, transformer vaults and all other service facilities constructed or installed upon the
premises; and Tenant shall, upon the expiration or earlier termination of this Lease, immediately
restore, and quit and peacefully surrender possession of the premises to Landlord in at least as good
and usable condition, acceptable to Landlord, as the same was in at the time of first occupation thereof
by Tenant or others, ordinary wear and tear excepted, and shall, in any event, leave the surface of the
ground in a level, graded condition, with no excavations, holes, hollows, hills or humps. Should
Tenant fail to so remove said structures, buildings and improvements and restore the premises,
Landlord may sell, remove or demolish the same, and in the event of said sale, removal or demolition,
Tenant shall reimburse Landlord for any cost or expense thereof in excess of any consideration
received by Landlord as a result of such sale, removal or demolition.
8.4 Liens
(a) Exemption of Landlord from Liability
Tenant shall at all times indemnify and save Landlord harmless from all claims for labor or
materials in connection with construction, repair, alteration, or installation of structures, improvements,
equipment or facilities by Tenant or Tenant’s agents within the premises, and from the cost of
defending against such claims, including attorney fees.
(b) Tenant's Obligations
In the event a lien is imposed upon the premises as a result of such construction, repair,
alteration or installation by Tenant or Tenant’s agents, Tenant shall either:
(1) Record a valid Release of Lien, or
(2) Deposit sufficient cash with Landlord to cover the amount of the claim on the lien in
question and authorize payment to the extent of said deposit to any subsequent judgment holder that
may arise as a matter of public record from litigation with regard to a lienholder claim, or
(3) Procure and record a bond in accordance with Section 3143 of the California Civil
Code, which frees the premises from the claim of the lien and from any action brought to foreclose the
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lien.
Should Tenant fail to accomplish one of the three optional actions within 15 days after the
filing of such a lien, the Lease shall be in default and shall be subject to immediate termination.
ARTICLE 9. MAINTENANCE AND REPAIRS
9.1 Tenant's Obligations
Tenant, at its own cost and expense, shall maintain the Premises, and keep it free of all grass,
weeds, debris, and flammable materials of every description. Tenant shall ensure that the Premises is
at all times in an orderly, clean, safe, and sanitary condition. Landlord requires a high standard of
cleanliness, consistent with the location of the Premises as an adjunct of the California State Highway
System.
Tenant hereby expressly waives the right to make repairs at the expense of Landlord and
waives the benefit of the provisions of Sections 1941 and 1942 of the California Civil Code or any
successor thereto.
Tenant shall take all steps necessary to protect effectively the fences, guardrails, and the piers
and columns, if any, of the all structures from damage incident to Tenant's use of the Premises and any
improvements, all without expense to Landlord. Tenant shall, at its own cost and expense, repair in
accordance with Landlord's standards any damage to any property owned by Landlord, including, but
not limited to, all fences, guardrails, piers and columns, caused by Tenant, subtenants, invitees or other
third parties. At Tenant's request, Landlord will repair the damage to its property, and Tenant agrees to
reimburse Landlord promptly after demand for the amount Landlord has reasonably expended to
complete the repair work.
Tenant shall be responsible for the care, maintenance, and any required pruning of trees,
shrubs, or any other landscaping on the Premises. Tenant assumes the liability for any damage or
injury caused by any falling branches or other such materials from any tree or shrub whether the
branches fall due to lack of maintenance or act of god or any other natural or unnatural causes.
Tenant’s liability insurance required within Article 10 shall cover any damage caused by any falling
tree or shrub branches or other materials; and, furthermore, per the same Article 10, Tenant covenants
and agrees to indemnify and save harmless Landlord from all liability, loss, cost, and obligation on
account of any injuries or losses caused by any falling branches or material from any tree or shrub.
Tenant shall designate in writing to Landlord a representative who shall be responsible for the
day-to-day operation and level of maintenance, cleanliness and general order.
9.2 Landlord's Rights
In the event Tenant fails to perform Tenant's obligations under this Article, Landlord shall give
Tenant notice to do such acts as are reasonably required to so maintain the Premises. If within ten (10)
days after Landlord sends written notice to repair, Tenant fails to do the work and diligently proceed in
good faith to prosecute it to completion, Landlord shall have the right, but not the obligation, to do
such acts and expend such funds at the expense of Tenant as are reasonably required to perform such
work. Any amount so expended by Landlord shall be paid by Tenant promptly after demand plus
interest as provided in Section 19.11 from the date of completion of such work to date of payment.
Landlord shall have no liability to Tenant for any damage, inconvenience or interference with the use
of the Premises by Tenant as a result of performing any such work.
9.3 Retention of Existing Improvements
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Landlord may at its option retain existing State improvements including fencing, lighting and
irrigation facilities. If Landlord elects to retain any improvements, Tenant shall remove same and
deliver same to Landlord's nearest maintenance station at no cost to Landlord.
ARTICLE 10. INSURANCE
10.1 Exemption of Landlord from Liability
This Lease is made upon the express condition that Landlord is to be free from all liability and
claims for damages by reason of any injury to any person or persons, including Tenant, or property of
any kind whatsoever and to whomsoever belonging, including Tenant, from any cause or causes
resulting from the operation or use of the Premises by Tenant, its agents, customers or business
invitees. Tenant hereby covenants and agrees to indemnify and save harmless Landlord from all
liability, loss, cost and obligation on account of any such injuries or losses.
10.2 Commercial General Liability Insurance
Tenant shall at its own cost and expense procure and keep in force during the term of this Lease
comprehensive bodily injury liability and property damage liability insurance adequate to protect
Landlord, its officers, agents and employees, against any liability to the public resulting from injury or
death of any person or damage to property in connection with the area, operation or condition of the
Premises, including any and all liability of Landlord for damage to vehicles parked on the Premises.
Such insurance shall be in an amount of not less than $5,000,000 combined single limit for bodily
injury and property damage. The limits of such insurance shall not limit the liability of Tenant. All
insurance required hereunder shall be with companies to be approved by Landlord. All such policies
shall be written as primary policies, not contributing with and not in excess of coverage which
Landlord may carry. Said policies shall name the State as an additional insured and shall insure
against the contingent liabilities, if any, of Landlord and the officers, agents, and employees of
Landlord and shall obligate the insurance carriers to notify Landlord, in writing, not less than thirty
(30) days prior to the cancellation thereof, or any other change affecting the coverage of the policies.
If said policies contain any exclusion concerning property in the care, custody or control of the insured,
an endorsement shall be attached thereto stating that such exclusion shall not apply with regard to any
liability of the State of California, its officers, agents, or employees. Tenant shall furnish to Landlord a
Certificate of Insurance acceptable to Landlord within not more than ten (10) days after execution
thereof. Landlord shall retain the right at any time to review the coverage, form, and amount of the
insurance required hereby. If, in the opinion of Landlord, the insurance provisions in this Lease do not
provide adequate protection for Landlord and for members of the public using the Premises, Landlord
may require Tenant to obtain insurance sufficient in coverage, form and amount to provide adequate
protection. Landlord's requirements shall be reasonable but shall be designed to assure protection from
and against the kind and extent of the risks which exist at the time a change in insurance is required.
Landlord shall notify Tenant in writing of changes in the insurance requirements; and if Tenant does
not deposit copies of acceptable insurance policies with Landlord incorporating such changes within
sixty (60) days of receipt of such notice, this Lease may be terminated, at Landlord's option, without
further notice to Tenant, and be of no further force and effect.
10.3 Business Automobile Liability Insurance
Tenant shall obtain and keep in effect at all times during the term of this Lease business
automobile liability insurance in an amount not less than $1,000,000 for each occurrence combined
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single limit for bodily injury and property damage, including coverage for owned, non-owned and
hired automobiles, as applicable. Any deductible under such policy shall not exceed $10,000 each
occurrence.
10.4 Garage Keeper's Legal Liability Insurance
If Tenant’s use involves any auto repair or storage of customer vehicles, Tenant shall obtain
and keep in effect at all times during the term of this Lease garage keeper's legal liability insurance in
an amount not less than $1,000,000 for each occurrence combined single limit for loss and damage to
vehicles in Tenant's care, custody or control caused by fire, explosion, theft, riot, civil commotion,
malicious mischief, vandalism or collision, with any deductible not exceeding $1,000 for each
occurrence, and coverage for non-automobile property customarily left in the custody of a garage with
a limit of $5,000.
10.5 Workers' Compensation Insurance
Tenant shall obtain and keep in effect at all times during the term of this lease workers'
compensation insurance, including employers' liability, in an amount not less than $1,000,000 for each
accident, covering all employees employed in or about the Premises to provide statutory benefits as
required by the laws of the State of California. Said policy shall be endorsed to provide that the insurer
waives all rights of subrogation against Landlord.
10.6 Failure to Procure and Maintain Insurance
If Tenant fails to procure or maintain the insurance required by this Article in full force and
effect, this Lease may be terminated immediately by Landlord and be of no further force or effect. In
addition, if Tenant fails to procure or maintain the insurance required by this Article, Tenant shall
cease and desist from operating any business on the Premises and the improvements erected thereon
and shall prevent members of the public from gaining access to the Premises during any period in
which such insurance policies are not in full force and effect.
10.7 Waiver of Subrogation
Tenant hereby waives any and all rights of recovery against Landlord, or against the officers,
employees, agents and representatives of Landlord, for loss of or damage to Tenant or its property or
the property of others under its control to the extent that such loss or damage is insured against under
any insurance policy in force at the time of such loss or damages. Tenant shall give notice to its
insurance carrier or carriers that the foregoing waiver of subrogation is contained in the Lease.
10.8 Self-Insurance Coverage
Notwithstanding any other provision of this Agreement, the insurance required under Article 10
may include a self-insurance program, subject to Landlord’s prior express written consent and
approval. No such self-insurance program shall diminish the rights and privileges to which Landlord
would otherwise have been entitled to under the terms of this Agreement had there been a third-party
insurer.
Tenant’s self insurance shall include such coverage as would have been covered by
Commercial General Liability Insurance with respect to the Premises with limits of liability not less
than Five Million Dollars ($5,000,000) per occurrence with no aggregate limit. Tenant shall provide
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Landlord with a certificate of self-insurance specifying the extent of self-insurance coverage hereunder
and containing a waiver of subrogation provision reasonably satisfactory to Landlord. Tenant shall
notify Landlord in writing not less than thirty (30) days prior to the effective date of the termination of
its self-insurance coverage and shall obtain the insurance coverage required by this Article effective on
that termination date. Execution of this Lease Agreement shall be Tenant’s acknowledgment that
Tenant will be bound by all laws as if the Tenant were an insurer as defined under California Insurance
Code Section 22 (7-1.12B(5)).
ARTICLE 11. PAYMENT OF TAXES
Tenant agrees to pay and discharge, or cause to be paid and discharged when due, before the
same become delinquent, all taxes, assessments, impositions, levies and charges of every kind, nature
and description, whether general or special, ordinary or extraordinary, which may at any time or from
time to time during the term of this Lease, by or according to any law or governmental, legal, political,
or other authority whatsoever, directly or indirectly, be taxed, levied, charged, assessed or imposed
upon or against, or which shall be or may be or become a lien upon the Premises or any buildings,
improvements or structures at any time located thereon, or any estate, right, title or interest of Tenant
in and to the Premises, buildings, improvements or structures. Specifically, and without placing any
limitation on Tenant's obligations under the immediately preceding sentence, Tenant shall pay when
due, before delinquency, any and all possessory interest taxes, parking taxes, workers' compensation,
taxes payable to the California Franchise Tax Board, personal property taxes on fixtures, equipment
and facilities owned by Tenant, whether or not the same have become so fixed to the land as to
comprise a part of the real estate.
Tenant understands that any possessory interest of Tenant created in the Premises by this Lease
may be subject to property taxation and that Tenant may be liable for payment of any such tax levied
on such interest. Any obligation of Tenant under this Article, including possessory interest tax that the
city or county may impose upon Tenant's interest herein, shall not reduce any rent due Landlord
hereunder and any such obligation shall become the liability of and be paid by Tenant. In the event
Tenant defaults in the payment of any of the obligations set forth in this Article, this Lease may be
terminated immediately by Landlord and be of no further force or effect.
ARTICLE 12. RIGHT OF ENTRY
12.1 Inspection, Maintenance, Construction and Operation of Freeway Structures
Landlord, through its agents or representatives, and other city, county, state and federal
agencies, through their agents or representatives, shall have full right and authority to enter in and upon
the Premises and any building or improvements situated thereon at any and all reasonable times during
the term of this Lease for the purpose of inspecting the same without interference or hindrance by
Tenant, its agents or representatives.
Landlord further reserves the right of entry for the purpose of inspecting the Premises, or the
doing of any and all acts necessary or proper on said Premises in connection with the protection,
maintenance, reconstruction, and operation of the freeway structures and its appurtenances; provided,
further, that Landlord reserves the further right, at its discretion, to immediate possession of the same
in case of any national or other emergency, or for the purpose of preventing sabotage, and for the
protection of said freeway structures, in which event the term of this Lease shall be extended for a
period equal to the emergency occupancy by Landlord, and during said period Tenant shall be relieved,
to the degree of interference, from the performance of conditions or covenants specified herein.
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Landlord further reserves the right of entry by any authorized officer, engineer, employee, contractor
or agent of the Landlord for the purpose of performing any maintenance activities upon the property
which Tenant has failed to perform after the expiration of the applicable cure period specified in
Article 9.
12.2 Future Transportation Projects
(a) Landlord's Right to Possession of Premises.
Tenant understands and acknowledges that Landlord may, during the Term of this Lease,
construct an "Approved and Funded Transportation Project", which may require the temporary or
permanent use of all or a portion of the premises. An "Approved and Funded Transportation Project"
is defined as a proposed transportation facility to be constructed by Landlord where the funds
necessary to construct the facility are available to Landlord (regardless of the source of the funds) and
where the transportation facility can reasonable be expected to be constructed within a reasonable
period of time following termination of this Lease as provided in this Article.
In the event Landlord determines that the premises or any portion thereof will be affected by an
"Approved and Funded Transportation Project", Landlord shall immediately notify Tenant of its intent
to take possession of all or a portion of the premises and shall provide Tenant with at least ninety (90)
days written notice within which to vacate the required area. Landlord's notice to Tenant shall indicate
the area of the premises to be taken. If possession is to be a temporary use of all or part of the
premises, Landlord shall additionally state in such notice to Tenant Landlord's reasonable estimate of
the period of time of such temporary use by Landlord. If possession is to be permanent, Landlord shall
have the right to terminate the Lease. Upon the date Landlord is entitled to possession of the premises,
or portion thereof, Tenant shall peaceably surrender possession of the premises, or portion thereof, and
comply with the restriction as stated in the notice. The failure of Tenant to vacate the required area of
the premises shall constitute a material default and breach of this Lease entitling Landlord to exercise
its rights and remedies.
(b) Reduction of Monthly Rent if Lease Remains Effective
For the period during which Landlord has taken possession of the premises under this section,
and if this Lease remains effective, Tenant shall be entitled to receive a reduction in Monthly Rent for
the term of Landlord's use of the area of the premises used by Landlord. The rent will be reduced by
the same percentage as the useable square footage reduction as required by State’s project.
(c) Tenant's Sole Rights; Tenant's Waiver.
Landlord's taking of possession of the premises under this Section 12.2 does not constitute a
taking or damaging entitling Tenant to compensation under any Condemnation provisions. The
reduction in Monthly Rent as provided herein shall be Tenant's sole remedy against Landlord for
Tenant's inability to possess or use part or all of the area of the premises as a result of an "Approved
and Funded Transportation Project", and Tenant expressly agrees to hold Landlord harmless from any
and all liability for, and expressly waives any right it may have to recover against Landlord, damages
to the Premises, any improvements constructed on the premises or improvements thereon, and
damages to any other property, project or operations including any claim for loss of business goodwill
or resulting from Tenant's inability to use or possess all or any portion of the premises as a result of an
"Approved and Funded Transportation Project". In addition, Tenant expressly recognizes that it is not
entitled to receive benefits under the federal or state Uniform Relocation Assistance Act (United States
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Code, Section 7260, et seq.) as a result of Landlord's use or possession of any portion of the premises
an "Approved and Funded Transportation Project". Landlord agrees to instruct its authorized
representatives to minimize the effect of any required construction on Tenant's use of the premises,
both in the construction phase and in the permanent effect on the premises in connection with an
"Approved and Funded Transportation Project".
12.3 Maintenance Work and Retrofitting of Freeway Structures
Tenant understands and agrees that Landlord may be required to perform maintenance or
retrofit work on all or a part of the freeway structures that are situated on and above the premises.
Landlord shall have the right to impose such restrictions on Tenant's right to enter, occupy, and use the
premises and to maintain the existing improvements or construct improvements thereon as Landlord
deems are necessary to enable it to complete construction of all freeway maintenance or structural
retrofit work without interference from Tenant.
In the event Landlord determines that it needs to obtain possession of all or a portion of the
premises, or needs to place restrictions on Tenant's use of the premises, Landlord shall, if possible, at
least thirty (30) days prior to the effective date of the commencement of such possession or restrictions
notify Tenant in writing describing the extent of the possession or restrictions and the effective date of
their commencement. Upon the effective date of said notice, Tenant shall peaceably surrender
possession of the premises and comply with the restrictions as stated therein. The minimum monthly
rent stated in Section 4.1, as adjusted in Section 4.2, shall be reduced by an amount equal to the
proportion which the area of the portion of the premises which Tenant is restricted from using or which
has been surrendered to Landlord bears to the total area of the leased premises. This reduction in rent
shall be Tenant's sole remedy against Landlord for Tenant's inability to possess or use the entire area of
the premises, and Tenant expressly agrees to hold Landlord harmless from any and all liability for, and
expressly waives any right it may have to recover against Landlord, damages to the premises, any
improvements constructed on the premises, and waives its right to use or possess any portion of the
premises or improvements thereon, and damages to any other property, project or operation caused by
Landlord's possession, imposition of restrictions or Tenant's inability to use or possess all or any
portion of the premises. In addition, Tenant expressly recognizes that it is not entitled to receive
benefits under the federal or state Uniform Relocation Assistance Acts (United States Code, title 42,
Section 4601, et seq.; California Government Code, Section 7260, et seq.) as a result of Landlord's use
or possession of any portion of the premises.
Tenant shall conduct its operations on the premises in such a manner so as not to interfere with
Landlord's or its contractor's performance of any structural retrofit work done on or above the
premises. Tenant acknowledges that the performance of the structural retrofit work may cause damage
to paving or other improvements constructed by Tenant on the premises. Tenant expressly agrees to
hold Landlord harmless from all such damage to its improvements, except that at the conclusion of the
retrofit work, Landlord shall restore the premises to their preexisting condition at no cost to Tenant.
12.4 Reinstitution of Lease.
If Landlord takes possession of all or a portion of the Premises in accordance with the
preceding provisions of this Article 12, Landlord shall notify Tenant that Landlord has completed the
use or work requiring such repossession within thirty days after Landlord completes such use or work,
and if requested by Tenant in writing within ninety days thereafter, either (i) in the case of a partial
repossession by Landlord, Tenant shall be entitled to lease the entire Premises (i.e., the initial Premises
leased before Landlord’s repossession) and pay the corresponding minimum monthly rent for the
remainder of the Lease term and (ii) in the case of a total repossession by Landlord and termination of
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the Lease, Landlord shall enter into a new lease with Tenant with respect to the entire Premises with
substantially the same terms and conditions as set forth in this Lease (except that the expiration date of
the new lease shall be extended one day for each day between the date of Landlord’s repossession and
the commencement date of the new lease, which shall be Landlord’s only obligation to Tenant in the
case it repossesses all of the Premises).
ARTICLE 13. CONDEMNATION BY PUBLIC ENTITIES OTHER THAN LANDLORD
13.1 Definitions
(a) "Condemnation" means (1) the exercise of the power of eminent domain, whether by
legal proceedings or otherwise, by a public entity having that power, that is, a condemnor, and (2) a
voluntary sale or transfer to any condemnor, either under the threat of condemnation or while legal
proceedings in condemnation are pending.
(b) "Award" means all compensation, sums, or anything of value awarded, paid or received
upon a total or partial condemnation of the leased premises.
(c) "Substantial taking" means a taking of a portion of the leased premises by
condemnation which, assuming a reasonable amount of reconstruction on the remainder, substantially
impairs Tenant's ability to use the remainder for the purposes permitted under this Lease.
13.2 Termination of Lease as to Part Condemned
In the event the whole or any part of the premises is taken by condemnation by a public entity,
other than Landlord, in the lawful exercise of its power of eminent domain, this Lease shall cease as to
the whole or the part condemned upon the date possession of the whole or that part is taken by the
public entity.
13.3 Partial Taking
If a part of the leased premises is taken by condemnation but there is no substantial taking of
the premises, Tenant shall continue to be bound by the terms, covenants, and conditions of this Lease.
However, if the fair rental value of the remainder will be less than the rent required by this Lease, the
minimum monthly rent and adjusted minimum monthly rent shall be reduced to an amount equal to the
fair rental value as of the date possession of the part is taken by the public entity.
If the part taken by condemnation constitutes a substantial taking of the leased premises,
Tenant may elect to:
(a) Terminate this Lease and be absolved of obligations hereunder which have not accrued
at the date possession is taken by the public entity; or
(b) Continue to occupy the remainder of the premises and remain bound by the terms,
covenants and conditions of this Lease. If Tenant elects to continue to occupy the remainder, and if the
fair rental value of the remainder will be less than the rent required by this Lease, the minimum
monthly rent and adjusted minimum monthly rent shall be reduced to the fair rental value as of the date
possession of the part is taken by the public entity.
Tenant shall give notice in writing of its election to terminate this Lease hereunder within thirty
(30) days of the date possession of the part is taken by the public entity. If Tenant fails to give
Landlord its written notice of termination within the time specified, this Lease shall remain in full
force and effect except that the minimum monthly rental shall be reduced as provided in this section.
If it continues to occupy the remainder, Tenant, whether or not the award upon the taking by
condemnation is sufficient for the purpose, shall, at its expense, within a reasonable period of time,
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commence and complete restoration of the remainder of the leased premises as nearly as possible to its
value, condition and character immediately prior to such taking; provided, however, that in the case of
a taking for temporary use, Tenant shall not be required to effect restoration until such taking is
terminated. Tenant shall submit to Landlord its plans for the restoration of the remainder within ninety
(90) days of the date possession of the part is taken by the public entity.
13.4 Adjustment of Rent
Should a portion of the premises be condemned and the rent be reduced as provided above, the
reduced rent shall continue to be subject to adjustment and reevaluation in accordance with Article 4.
13.5 Compensation
Landlord shall be entitled to receive and shall receive all compensation for the condemnation of
all or any portion of the premises by exercise of eminent domain except as hereinafter provided.
Tenant shall be entitled to that portion of said compensation which represents the present worth as of
the date possession is taken by the public entity of the remaining use under the Lease of all
improvements constructed by Tenant on the leased premises located within the part taken by the public
entity. Tenant may also assert a claim for loss of business goodwill under the provisions of Section
1263.510 of the California Code of Civil Procedure. Tenant shall assert no claim for loss of bonus
value. For the purposes of this Article, "condemnation bonus value" means that value attributable to
the fact that the rental rate Tenant is obligated to pay under this Lease is less than the fair market lease
rate of the premises as defined in Article 4 above.
If all or a portion of the leased premises is condemned at a time when Tenant possesses an
interest in real property located outside the leased premises (hereinafter called "outside property"),
Tenant may claim entitlement to an award of damages accruing to the outside property by reason of the
severance therefrom of the condemned portion of the leased premises as provided in the Eminent
Domain Law (California Code of Civil Procedure Sections 1230.010 through 1273.050).
ARTICLE 14. UTILITIES
Tenant shall pay when due, and shall hold Landlord harmless from any liability for, all charges
for water, gas, heat, light, power, telephone, sewage, air conditioning and ventilating, scavenger,
janitorial and landscaping services and all other materials and utilities supplied to the Premises.
Landlord shall not be liable in damages or otherwise for any failure or interruption of any utility
service furnished to the Premises, and no such failure or interruption shall entitle Tenant to terminate
this Lease.
ARTICLE 15. DEFAULT
15.1 Default
The occurrence of any of the following shall constitute a material breach and default of this
Lease by Tenant.
(a) Any failure by Tenant to pay rent or any other monetary sums required to be paid
hereunder, where such failure continues for ten (10) days after written notice thereof has been given by
Landlord to Tenant.
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(b) The abandonment or vacation of the Premises by Tenant. Failure to occupy and operate the
Premises for thirty (30) consecutive days following the mailing of written notice from Landlord to
Tenant calling attention to the abandonment shall be deemed an abandonment or vacation.
(c) The making by Tenant of any general assignment or general arrangement for the benefit of
creditors; the filing by or against Tenant of a petition to have Tenant adjudged bankrupt or of a petition
for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant the same is dismissed within sixty (60) days); the appointment of a trustee
or receiver to take possession of substantially all of Tenant's assets, where possession is not restored to
Tenant within forty-five (45) days; or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets, where such seizure is not discharged within thirty (30) days.
(d) The failure by Tenant to comply with any provision of any law, statute, zoning restriction,
ordinance or governmental rule, regulation or requirement as set forth in Section 5.3 of this Lease.
(e) The failure by Tenant to comply with the requirements of the Lease Application.
(f) The failure by Tenant to comply with the requirements regarding hazardous materials as set
forth in Article 5 of this Lease.
(g) The construction by Tenant of any improvements on the Premises contrary to the
provisions of Article 6 of this Lease.
(h) The failure by Tenant to pay any tax, assessment, imposition, levy or charge of any kind as
set forth in Article 11 of this Lease.
(i) The failure by Tenant to observe and perform any other provision of this Lease to be
observed or performed by Tenant, where such failure continues for thirty (30) days after written notice
thereof by Landlord to Tenant; provided, however, that if the nature of such default is such that it
cannot be reasonably cured within such thirty (30) day period, Tenant shall not be deemed to be in
default if Tenant shall within such period commence such cure and thereafter diligently prosecute the
same to completion.
15.2 Landlord's Remedies
In the event of any material default or breach by Tenant, Landlord may at any time thereafter,
without limiting Landlord in the exercise of any right of remedy at law or in equity which Landlord
may have by reason of such default or breach, terminate Tenant's right to possession by any lawful
means, in which case this Lease shall immediately terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. In such event Landlord shall be entitled to recover from
Tenant all damages incurred by Landlord by reason of Tenant's default including, but not limited to,
the following:
(a) the worth at the time of award of any unpaid rent which had been earned at the time of such
termination; plus
(b) the worth at the time of award of the amount by which the unpaid rent which would have
been earned after termination until the time of award exceeds the amount of such rental loss that is
proved could have been reasonably avoided; plus
(c) the worth at the time of award of the amount by which the unpaid rent for the balance of
the term after the time of award exceeds the amount of such rental loss that is proved 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 its obligations under this Lease or which in the ordinary course
of events would be likely to result therefrom; plus
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(e) at Landlord's election, such other amounts in addition to or in lieu of the foregoing as may
be permitted from time to time by applicable State law. Upon any such re-entry Landlord shall have
the right to make any reasonable repairs, alterations or modifications to the premises, which Landlord
in its sole discretion deems reasonable and necessary. As used in subparagraphs (a) and (b), above, the
"worth at the time of award" is computed by including interest on the principal sum at a rate one
percent (1%) above the discount rate of the Federal Reserve Bank of San Francisco from the date of
default. As used in subparagraph (c), above, the "worth at the time of award" is computed by
discounting such amount at a rate one percent (1%) above the discount rate of the Federal Reserve
Bank of San Francisco at the time of award. The term "rent" as used in this Article shall be deemed to
be and to mean rent to be paid pursuant to Article 4 and all other monetary sums required to be paid by
Tenant pursuant to the terms of this Lease.
15.3 Late Charges
Tenant hereby acknowledges that late payment by Tenant to Landlord of rent and other sums
due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges. Accordingly, if any installment of rent or any other sum due from Tenant
shall not be received by Landlord or Landlord's designee within ten (10) days after such amount shall
be due, a late charge equal to one and one-half percent (1.5%) of the payment due and unpaid plus
$100.00 shall be added to the payment, and the total sum shall become immediately due and payable to
Landlord. An additional charge of one and one-half percent (1.5%) of such payment, excluding late
charges, shall be added for each additional month that such payment remains unpaid. Landlord shall
apply any monies received from Tenant first to any accrued delinquency charges and then to any other
payments due under the Lease. The parties hereby agree that such late charges represent a fair and
reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant. Acceptance
of such late charges by Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies
granted hereunder.
15.4 Landlord's Right to Cure Tenant's Default
At any time after Tenant is in default or material breach of this Lease, Landlord may cure such
default or breach at Tenant's cost. If Landlord at any time, by reason of such default or breach, pays
any sum or does any act that requires the payment of any sum, the sum paid by Landlord shall be due
immediately from Tenant to Landlord at the time the sum is paid, and if paid at a later date shall bear
interest as provided in Section 19.11 from the date the sum is paid by Landlord until Landlord is
reimbursed by Tenant. The sum, together with interest on it, shall be additional rent.
ARTICLE 16. ASSIGNMENTS, TRANSFERS, SUBLEASES AND ENCUMBRANCES
16.1 Prohibition on Assignments, Transfers and Subleases
Tenant shall not assign, transfer or sublease all or any part of its interest in this Lease or in the
Premises, and Landlord reserves the right to deny its consent to any assignment, transfer or sublease of
all or any part of this Lease or the Premises.
16.2 Voluntary Assignments and Subleases
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In addition, with respect to transactions not expressly prohibited under Section 16.1, Tenant
shall not voluntarily assign or transfer all or any part of its interest in this Lease or in the Premises, or
sublet all or any part of the Premises, or allow any other person or entity (except Tenant's authorized
representatives) to occupy or use all or any part of the Premises without first obtaining Landlord's
written consent and the concurrence of the Federal Highway Administration.
Landlord may, at its sole discretion, elect to consent to any such assignment, transfer or
sublease if all of the following express conditions are satisfied:
(a) Landlord receives compensation from Tenant upon the assignment, transfer, sale or sublease
of any of Tenant's rights in the Premises per the provisions of Article 4.3.
(b) The prospective assignee, transferee or subtenant completes a Lease Application and meets
all of the requirements for eligibility to lease from the State of California.
Tenant's failure to obtain Landlord's required written approval prior to any assignment, transfer
or sublease shall render such assignment, transfer or sublease void. Occupancy of the Premises by a
prospective transferee, subtenant or assignee before approval of the transfer, sublease or assignment by
Landlord shall constitute a breach of this Lease. Landlord's consent to any assignment, transfer or
sublease shall not constitute a waiver of any of the terms, covenants or conditions of this Lease. Such
terms, covenants and conditions shall apply to each and every assignment, sublease and transfer of
rights under this Lease and shall be severally binding upon each and every party thereto. Any
document to transfer, sublet, or assign the Premises or any part thereof shall incorporate directly or by
reference all the provisions of this Lease.
16.3 Change in Partnership or Limited Liability Partnership
If Tenant is a partnership or limited liability partnership, a withdrawal or change, voluntary,
involuntary or by operation of law, or the dissolution of the partnership, shall be deemed a voluntary
assignment subject to the provisions of Section 16.2.
16.4 Change in Tenants
If Tenant consists of more than one person, a purported assignment, voluntary, involuntary or
by operation of law, from one tenant to another shall be deemed a voluntary assignment subject to the
provisions of Section 16.2.
16.5 Change in Corporation or Limited Liability Company
If Tenant is a corporation or limited liability company, any dissolution, merger, consolidation,
or other reorganization of Tenant, or the sale or other transfer of a controlling percentage of the capital
stock of Tenant, or the sale of 51% of the value of the assets of Tenant, shall be deemed a voluntary
assignment subject to the provisions of Section 16.2. The phrase "controlling percentage" means the
ownership of, and the right to vote, stock possessing at least 51% of the total combined voting power
of all classes of Tenant's capital stock issued, outstanding, and entitled to vote for the election of
directors or a controlling interest in the LLC.
16.6 Assignment of Rent from Subtenants
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Tenant immediately and irrevocably assigns to Landlord, as security for Tenant's obligations
under this Lease, all rent from any subletting of all or a part of the Premises as permitted by this Lease,
and Landlord, as assignee and attorney-in-fact for Tenant, or a receiver for Tenant appointed on
Landlord's application, may collect such rent and apply it toward Tenant's obligations under this Lease;
except that, until the occurrence of an act of default by Tenant, Tenant shall have the right to collect
such rent.
16.7 Information to be Supplied to Landlord
Tenant shall supply Landlord with all information Landlord determines to be necessary on all
persons or firms to which Tenant proposes to sublet, transfer or assign any of its interest in the
Premises, or which might establish rights to enter, control, or otherwise encumber the Premises by
reason of any agreement made by Tenant. In addition, with respect to any proposed sublease, transfer
or assignment, Tenant shall provide Landlord with:
(a) a copy of all documents relating thereto,
(b) a statement of all terms and conditions of said transaction, including the consideration
therefor, and
(c) a copy of the financial statement of the prospective subtenant, transferee or assignee.
(d) a copy of all documents showing compliance by the prospective subtenant, transferee or
assignee with all of the bid eligibility requirements contained in the bid package.
16.8 Processing Fees for Assignments, Transfers and Subleases
(a) In addition to the sum specified in Section 4.3, a fee of one thousand five hundred dollars
($1,500) shall be paid to Landlord for processing each consent to assignment, transfer, or sublease to
Landlord as required by this Lease. This processing fee shall be deemed earned by Landlord when
paid and shall not be refundable.
(b) If a processing fee has been paid by Tenant for another phase of the same transaction, a
second fee will not be charged.
(c) The amounts specified above for processing fees shall be automatically adjusted at the end
of the first year of this Lease and every year thereafter in accordance with an annual fee schedule
adopted by Landlord. Landlord shall make said fee schedule available to Tenant upon receiving a
request therefor.
16.9 Encumbrances
Tenant shall not encumber the Premises in any manner whatsoever.
ARTICLE 17. NONDISCRIMINATION
Tenant, for itself, its personal representatives, successors in interest, and assigns, as a part of
the consideration hereof, does hereby covenant and agree as a covenant running with the land that: (1)
no person, on the ground of race, color, or national origin shall be excluded from participation in, be
denied the benefits of, or otherwise subjected to discrimination in the use of said facilities, (2) in
connection with the construction of any improvements on said land and the furnishing of services
thereon, no discrimination shall be practiced in the selection of employees and contractors, by
contractors in the selection and retention of first-tier subcontractors, and by first-tier subcontractors in
the selection and retention of second-tier subcontractors, (3) such discrimination shall not be practiced
against the public in its access to and use of the facilities and services provided for public
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accommodations (such as eating, sleeping, rest, recreation, and vehicle servicing) constructed or
operated on, over, or under the premises, and (4) Tenant shall use the land in compliance with all other
requirements imposed pursuant to Title 49, Code of Federal Regulations, Part 21 (49 C.F.R., Part 21)
and as said regulations may be amended. In the event of breach of any of the above nondiscrimination
covenants, the Landlord shall have the right to terminate this Lease, and to re-enter and repossess said
land and the facilities thereon, and hold the same as if said Lease had never been made or issued.
ARTICLE 18. SECURITY DEPOSIT
Concurrently with Tenant's execution of this Lease, Tenant shall deposit with Landlord the sum
of $ -0- as a Security Deposit. Said sum shall be held by Landlord as a Security Deposit for the
faithful performance by Tenant of all of the terms, covenants and conditions of this Lease to be kept
and performed by Tenant during the term hereof. If Tenant defaults with respect to any provision of
this Lease, including but not limited to the provisions relating to the payment of rent and any of the
monetary sums due herewith, Landlord may use, apply or retain all or any part of this Security Deposit
for the payment of any other amount which Landlord may spend by reason of Tenant's default or use it
to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said Deposit is so used or applied, Tenant shall within ten (10) days after
written demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount; Tenant's failure to do so shall be a material breach of this Lease.
Landlord shall not be required to keep this Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on such deposit. If Tenant shall fully and faithfully perform
every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall
be returned to Tenant at the expiration of the Lease term and after Tenant has vacated the premises.
ARTICLE 19. ADDITIONAL PROVISIONS
19.1 Quiet Enjoyment
Landlord covenants and agrees with Tenant that upon Tenant paying rent and other monetary
sums due under the Lease and performing its covenants and conditions, Tenant shall and may
peaceably and quietly have, hold and enjoy the Premises for the term.
19.2 Captions, Attachments, Defined Terms
The captions of the Articles of this Lease are for convenience only and shall not be deemed to
be relevant in resolving any question of interpretation or construction of any section of this Lease.
Exhibits attached hereto, and addenda and schedules initiated by the parties, are deemed by attachment
to constitute part of this Lease and are incorporated herein. The words "Landlord" and "Tenant," as
used herein, shall include the plural as well as the singular. Words used in neuter gender include the
masculine and feminine and words in the masculine or feminine gender include the neuter. If there be
more than one Landlord or Tenant, the obligations hereunder imposed upon Landlord or Tenant shall
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be joint and several. If the Tenants are husband and wife, the obligations shall extend individually to
their sole and separate property as well as to their community property.
19.3 Entire Agreement
This instrument along with any exhibits and attachments hereto constitutes the entire agreement
between Landlord and Tenant relative to the premises and this agreement and the exhibits and
attachments may be altered, amended or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant agree hereby that all prior or contemporaneous oral
agreements between and among themselves and their agents and representatives relative to the leasing
of the premises are merged in or revoked by this agreement.
19.4 Severability
If any terms or provision of this Lease shall, to any extent, be determined by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of this Lease shall not be affected
thereby, and each term and provision of this Lease shall be valid and be enforceable to the fullest
extent permitted by law.
19.5 Costs of Suit
If Tenant or Landlord shall bring any action for any relief against the other, declaratory or
otherwise, arising out of this Lease, including any suit by Landlord for the recovery of rent or
possession of the premises, the losing party shall pay the successful party a reasonable sum for
attorney's fees which shall be deemed to have accrued on the commencement of such action and shall
be paid whether or not such action is prosecuted to judgment. Should Landlord, without fault on
Landlord's part, be made a party to any litigation instituted by Tenant or by any third party against
Tenant, or by or against any person holding under or using the premises by license of Tenant, or for the
foreclosure of any lien for labor or materials furnished to or for Tenant or any such other person or
otherwise arising out of or resulting from any act or transaction of Tenant or of any such other person,
Tenant shall save and hold Landlord harmless from any judgment rendered against Landlord or the
premises or any part thereof, and all costs and expenses, including reasonable attorney's fees, incurred
by Landlord in connection with such litigation.
19.6 Time, Joint and Several Liability
Time is of the essence of this Lease and each and every provision hereof, except as to the
conditions relating to the delivery of possession of the premises to Tenant. All the terms, covenants
and conditions contained in this Lease to be performed by either party if such party shall consist of
more than one person or organization, shall be deemed to be joint and several, and all rights and
remedies of the parties shall be cumulative and non-exclusive of any other remedy at law or in equity.
19.7 Binding Effect; Choice of Law
The parties hereto agree that all the provisions hereof are to be construed as both covenants and
conditions as though the words importing such covenants and conditions were used in each separate
section hereof; and all of the provisions hereof shall bind and inure to the benefit of the parties hereto
and their respective heirs, legal representatives, successors and assigns. This Lease shall be governed
by the laws of the State of California.
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19.8 Waiver
No covenant, term or condition or the breach thereof shall be deemed waived, except by written
consent of the party against whom the waiver is claimed and any waiver or the breach of any covenant,
term or condition shall not be deemed to be a waiver of any preceding or succeeding breach of the
same or any other covenant, term or condition. Acceptance by Landlord of any performance by Tenant
after the time the same shall have become due shall not constitute a waiver by Landlord of the breach
or default of any covenant, term or condition. Acceptance by Landlord of any performance by Tenant
after the time the same shall have become due shall not constitute a waiver by Landlord of the breach
or default of any covenant, term or condition unless otherwise expressly agreed to by Landlord in
writing.
19.9 Surrender of Premises
The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall
not work a merger and shall, at the option of the Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to it of any or all such
subleases or subtenancies.
19.10 Holding Over
If Tenant remains in possession of all or any part of the premises after the expiration of the
term hereof, with or without the express or implied consent of Landlord, such tenancy shall be from
month to month only and not a renewal hereof or an extension for any further term, and in such case,
rent and other monetary sums due hereunder shall be payable at the time specified in this Lease and
such month-to-month tenancy shall be subject to every other term, covenant, condition and agreement
contained herein, except that the monthly rental rate set forth in Section 4.1 may be increased by
Landlord effective the first month of the holdover period, or upon 30 days notice any time thereafter.
19.11 Interest on Past Due Obligations
Except as expressly herein provided, any amount due to Landlord not paid when due shall bear
interest at a rate one percent (1%) above the discount rate of the Federal Reserve Bank of San
Francisco from the due date. Payment of such interest together with the amount due shall excuse or
cure any default by Tenant under this Lease.
19.12 Recording
Neither Landlord nor Tenant shall record this Lease.
19.13 Notices
All notices or demands of any kind required or desired to be given by Landlord or Tenant
hereunder shall be in writing and shall be deemed delivered forty-eight (48) hours after depositing the
notice or demand in the United States mail, certified or registered, postage prepaid, addressed to the
Landlord or Tenant respectively at the addresses set forth in Article 1.
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19.14 No Reservation
Submission of this instrument for examination or signature by Tenant does not constitute a
reservation of or option for lease; it is not effective as a lease or otherwise until execution and delivery
by both Landlord and Tenant.
19.15 Corporate Authority
If Tenant is a corporation, each individual executing this Lease on behalf of said corporation
represents and warrants that he/she is duly authorized to execute and deliver this Lease on behalf of
said corporation in accordance with a duly adopted resolution of the Board of Directors of said
corporation or in accordance with the Bylaws of said corporation, and that this Lease is binding upon
said corporation in accordance with its terms. If Tenant is a corporation, Tenant shall, within thirty
(30) days after execution of this Lease, deliver to Landlord a certified copy of resolution of the Board
of Directors of said corporation authorizing or ratifying the execution of this Lease.
19.16 Force Majeure
If either Landlord or Tenant shall be delayed or prevented from the performance of any act
required hereunder by reason of acts of God, governmental restrictions, regulations or controls (except
those reasonably foreseeable in connection with the uses contemplated by this Lease) or other cause
without fault and beyond the control of the party obligated (except financial inability), performance of
such act shall be excused for the period of the delay and the period for the performance of any such act
shall be extended for a period equivalent to the period of such delay. Nothing in this clause shall
excuse Tenant from prompt payment of any rent, taxes, insurance or any other charge required of
Tenant, except as may be expressly provided in this Lease.
In Witness Whereof Landlord and Tenant have executed this Lease as of the date first written
above.
LANDLORD: STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION
Dated: ________________ By: ____________________________________
LINDA EMADZADEH, Chief
R/W Airspace, LPA, and Excess Lands
TENANT: CITY OF SOUTH SAN FRANCISCO
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Dated: ________________ By: ____________________________________
MIKE FUTRELL, City Manager
EXHIBIT “A”
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FLA-SM-101-01
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EXHIBIT “B”
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