WHEREAS, it is in the best interests of the City of Sunnyvale for there to be a center for job training located within Sunnyvale;

NOW, THEREFORE, in consideration of the exchange of covenants and upon all of the conditions set forth herein, Lessor hereby leases to Lessee and Lessee hires from Lessor 15,700 square feet of the Sunnyvale Office Center ("premises") located at 505 West Olive Avenue in the City of Sunnyvale, County of Santa Clara, State of California, for the purpose of providing services to the citizens of Sunnyvale. The premises are shown on the diagram attached as Exhibit "A" and made a part of this agreement.

SECTION 1. USE. Premises shall be used primarily for job training services provided by Lessee. In addition, Lessee may use the premises to conduct such other activities as are normally associated with the operation of a job training program.

SECTION 2. TERM. The term of this Lease shall be for three years and shall run from July 1, 2003, to December 31, 2005.

SECTION 3. RENT. In consideration of the lease of the premises by Lessor, Lessee shall pay as rent to Lessor the sum of Eighty Two Thousand Four Hundred Twenty-Five Dollars ($82,425.00) per quarter for the first year being the period commencing July 1, 2003, through June 30, 2004; Eighty Four Thousand Seven Hundred and Eighty Dollars ($84,780.00) per quarter for the period commencing July 1, 2004, through June 30, 2005; and Eighty Seven Thousand One Hundred Thirty-Five Dollars ($87,135.00) per quarter for the period commencing July 1, 2005 through December 31, 2005. The quarterly rent shall be payable to Lessor, in advance, on the first day of each and every quarter during the term of the Lease.

SECTION 4. LATE CHARGE. Lessee acknowledges that late payment of rent may cause Lessor to incur costs and expenses which may include, but are not limited to, lost interest earnings, processing and accounting expenses, costs for additional attempts to collect rent, and preparation of notices.

Therefore, if any installment of rent due from Lessee is not received by Lessor within ten (10) calendar days after the first day of each quarter (January 1^st, April 1^st, July 1^st, October 1^st) said late payment shall bear interest at the rate of 7% per annum from the date due and payable until the same shall have been fully paid. The Parties agree that this late charge represents a fair and reasonable estimate of the costs that Lessor may incur by reason of Lessee's late payments. Acceptance of any late charge shall not constitute a waiver of Lessee's default with respect to the past due amount, or prevent Lessor from exercising any other rights and remedies under this Lease, and as provided by law.

SECTION 5. PAYMENT. Payment may be made by check or money order made payable to: CITY OF SUNNYVALE, and delivered or mailed to:

City Property Administrator
Department of Public Works
P. O. Box 3707
456 W. Olive Avenue
Sunnyvale, CA 94088-3707

SECTION 6. UTILITIES. Lessor agrees to pay for all utilities and services based on occupancy of the premises. 

SECTION 7. ALTERATIONS; ASBESTOS.

A. Lessee shall not paint, wallpaper, add or change locks or make alterations to the premises without Lessor's prior written consent.

B. Lessee acknowledges receipt from Lessor of a copy of an inspection report of an inspection conducted of the premises by Al Clancy and Associates, pertaining to asbestos containing materials (ACMs), which report is incorporated in this document by reference. Lessee further acknowledges that Lessor has established an "Asbestos Management Program" which is on file at the City's Office of the Risk Manager, and is available for inspection by Lessee. Lessee shall take all steps necessary to comply with the terms, conditions and requirements set forth in that Plan, and will ensure that none of Lessee's operations or maintenance procedures permit the release of asbestos fibers.

In the event that Lessee causes any release of asbestos from the ACMs on the premises, Lessee shall, at its own expense, take appropriate remedial measures, including but not limited to issuing any legally required notification, and Lessee shall be fully responsible for all injuries or damages to persons or property resulting from such release of asbestos.  

SECTION 8. ENTRY.

A. Upon reasonable notice, Lessee shall make the premises available during normal business hours to Lessor, or its authorized agent or representative, for the purpose of entering to make necessary or agreed repairs, decorations, alterations or improvements or supply necessary or agreed services. In an emergency, Lessor, or its authorized agent or representative may enter the premises, at any time, without prior permission from Lessee.

B. In addition, Lessor and/or its agents or contractors shall have the right of access to the premises, upon reasonable notice, or without notice in emergency circumstances, in order to maintain and repair other publicly owned facilities on or adjacent to the site, including the bridge overpass structure, traffic signals, landscaping, and landscape irrigation, and lighting, or other public improvements on or adjacent to the premises.

SECTION 9. ASSIGNMENT. Lessee shall not let or sublet all or any part of the premises nor assign this Lease or any interest in it without prior permission from Lessor. However, Lessee shall have the right to contract with a commission agent to operate its business and such agent can occupy the premises.

SECTION 10. POSSESSION. If Lessee abandons or vacates the premises or fails to operate a bus station on the Premises for 30 days, Lessor may terminate this Lease and regain lawful possession.

SECTION 11. HOLD OVER. Any holding over at the expiration of this Lease shall create a month to month tenancy at a quarterly rent 125% of the amount referenced in Section 3. All other terms and conditions herein shall remain in full force and effect.

SECTION 12. WAIVER. The waiver of any breach shall not be construed to be a continuing waiver of any subsequent breach.

SECTION 13. INDEMNITY. This lease is made upon the express condition that Lessor is to be free from all liability and claims for damages by reason of any injury to any person or persons, including Lessee, or Lessee's employees, agents, customers, and invitees, or claims for damages to property of any kind whatsoever and to whomsoever belonging, including Lessee, and from any cause or causes resulting from the operation or use of the premises by Lessee, its employees, agents, customers, or business invitees. Lessee shall defend, indemnify, and hold harmless, the City of Sunnyvale, its officers, employees, and agents, from and against any and all such liability, claims, and damages, except for damage caused by Lessor’s sole negligence or willful misconduct.

A. Lessee shall at its own cost and expense procure and keep in force during the term of this Lease commercial general liability and property damage insurance adequate to protect Lessee, its officers, agents and employees, against any liability resulting from injury or death of any person or damage to any property arising out of or in connection with the Lessee's use or occupancy of the leased premises. Such insurance shall be in an amount of not less than five million dollars ($5,000,000) combined single limit. All such insurance shall insure performance by Lessee of the indemnity provisions of Section 13 herein. Lessor shall be named as additional insured, and the policy or policies shall contain cross-liability endorsements. The limits of such insurance shall not limit the liability of Lessee. All insurance required hereunder shall be with companies to be approved by Lessor and admitted to conduct insurance business in the State of California. All such policies shall be written as primary policies, not contributing with and not in excess of coverage which Lessor may carry. Said policies shall insure against the contingent liabilities, if any, of Lessor and the officers, agents, and employees of Lessor and shall obligate the insurance carriers to notify Lessor, in writing, not less than thirty (30) days prior to the cancellation thereof, of 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 Lessor, its officers, agents or employees. Lessee shall furnish to Lessor a Certificate of Insurance acceptable to the City upon execution of this lease. Lessor shall accept self-insurance by Lessee as satisfying the obligations under this Section, provided that appropriate certificates and other evidence of such self-insurance are provided to the satisfaction of the City.

Tenant represents to Landlord and Landlord acknowledges that Tenant self-insures in the ordinary course of its business. Notwithstanding any other provisions contained herein to the contrary, the insurance obligations of the Tenant may be satisfied by endorsements to existing excess /umbrella blanket policies written by companies of recognized standing showing a self-insurance retention of not more than $1.5 million by occurence for automobile liability and general liability insurance coverage; worker’s compensation insurance coverage is subject to a $1.0 million deductible per occurrence with a deductible of $100,000 per occurrence for property damage insurance coverage, to the extent required under this lease.

The repayment of those premiums, shall be the sole obligation of Lessee and shall be deemed to be additional rental and payable as such on the next day upon which rent becomes due hereunder. In addition, if Lessee fails to procure or maintain the insurance required by this section, Lessee 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.

C. Lessee shall have the sole responsibility of insuring (if Lessee so desires and at Lessee's own cost and expense) any furnishings, fixtures, equipment, merchandise or supplies which Lessee may elect to provide against loss or damage from fire, theft or other cause.

SECTION 15. TOTAL OR SUBSTANTIAL DESTRUCTION OF PREMISES. In the event that the premises be substantially or totally destroyed or damaged, or to the extent it is rendered uninhabitable, this Lease automatically shall be terminated and any rents paid in advance will be refunded to Lessee.

SECTION 16. REVOCATION. This Lease is revocable at any time Lessor determines a breach of any of the terms or conditions of this Lease has occurred. If Lessee shall breach or fail to comply with any of the terms or conditions herein contained, then this Lease shall be revoked upon Lessor giving notice in writing to Lessee of its intention to revoke, and Lessee's failure within ten (10) days of giving such notice to correct the breach or to comply with the terms or conditions, as the case may be, without the necessity of further action or procedures on the part of Lessor; provided, however, that if the nature of Lessee’s default is such that more than ten (10) days are reasonably required for its cure, the Lessee shall not be deemed in default if Lessee commences such cure within the ten (10) day period and thereafter diligently completes the cure, pursuant to a schedule agreed to by Lessor. Lessee shall be granted sixty (60) days to vacate after written notification.

SECTION 17. OPTION TO TERMINATE. If, at any time during the Original Term or any Extended Term, both the Lessee and Lessor mutually consent to end this Lease, the Lease shall be deemed mutually terminated.

SECTION 18. NO RELOCATION BENEFITS. Lessee acknowledges and understands that the Lessor is a public agency and acquired the property in which the Premises are located for a public use prior to leasing the Premises to Lessee. Consequently, Lessee understands and agrees that it will not be entitled to any benefits or compensation under the Relocation Law (California Government Code sections 7260 et seq.) when it relocates from the Premises at the end of the term of its tenancy in the Premises, or if the Lessor terminates the Lease pursuant to Section 17.

SECTION 19. NOTICES. All notices shall be in writing and delivered in person or transmitted by United States mail, postage prepaid, addressed as follows:

SECTION 20. TAXES, ASSESSMENTS AND CHARGES. Lessee shall:

A. Obtain and pay for any permit or license required by the Sunnyvale Municipal Code or any other ordinance, or law of the State of California or the United States of America;

B. This Lease may create a taxable possessory interest. Lessor shall pay any possessory interest tax which may be levied as a result of lessee’s possessory interest in this leasehold. Possessory interest means any interest described in Section 107 of the California Revenue and Taxation Code, or successor statute, and includes any interest described in Section 107.4 of the same Code, or its successor statute. This section is deemed to comply with Section 107.6 of the Code.

C. Lessee will keep the premises free from any liens arising out of work performed, materials furnished, or obligations incurred by Lessee. Lessee shall have no power to establish or permit the creation of any such lien against the premises.

SECTION 21. MAINTENANCE. Lessor shall maintain the premises in good condition, including plumbing, electrical fixtures, and windows.

B. Lessor shall maintain the leased premises in a clean and sanitary condition, including but not limited to performing the operations described in Attachment A.

SECTION 22. RIGHTS AND LIABILITIES. The rights and liabilities conferred hereunder shall accrue only to the parties hereto. Nothing herein shall be construed to confer beneficiary rights on any third party.

SECTION 23. LITIGATION COSTS. In the event that a suit is necessary to enforce any of the provisions herein contained, or to recover possession of the premises, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to costs and necessary disbursements.

SECTION 24. UPGRADING TO PROVIDE DISABLED ACCESS.

A. In the event that any federal, state, or local statute or regulation, requires the modification of the premises to provide increased or improved access for disabled persons, Lessee shall install any such required improvements for handicap access at its own cost and expense.

SECTION 25. VACATING THE PREMISES. Upon vacating the premises, Lessee agrees to leave same in as good condition as existed on the day possession was taken, allowing for ordinary and normal usage during occupancy; and to reimburse Lessor for any damage done to the premises caused by Lessee's occupation or tenancy other than that due to normal use. Lessee shall not leave or allow to remain on the premises any garbage, refuse, or debris. Any removal costs incurred by Lessor will be paid by Lessee. On the date the property is vacated, Lessee agrees to deliver the property keys to the City at 456 W. Olive Avenue, Sunnyvale, California, care of Administrative Services Manager, Public Works Department or to such other address that Lessor may hereafter designate in writing.

SECTION 26. AMENDMENT. The terms of this Lease may be amended or revised by written and signed amendment between Lessee and Lessor and such written amendment shall become a part of this original Lease and shall operate with the same force and effect as this original Lease.

SECTION 27. SECURITY DEPOSIT.

A. Lessee shall deposit with Lessor Twenty-Five Thousand Dollars ($25,000.00) as a guarantee for faithful performance of the conditions of this Lease. If Lessee fails to keep and perform all of the terms, covenants and conditions of this Lease, including the payment of rent and any late fees overdue and unpaid, the restoration, replacement or return of equipment, exclusive of ordinary wear and tear, casualty and condemnation. Lessor may appropriate and apply all or any portion of the security deposit to the payment of any loss or damage incurred by Lessor by reason of Lessee's default or breach. Upon termination of this Lease and Lessee's vacating the premises, Lessor shall return, with interest, the deposit or portion remaining, if any, after deductions for any amount equal to any unpaid rents, late fees, and/or loss and damage sustained by Lessor due to such breach or default by Lessee.

B. All deposits will be returned within thirty (30) days after Lessee vacates. Lessee shall be furnished with an itemized statement of the basis for the amount of any part of the deposit not being returned.

SECTION 28. SEVERABILITY. Should any part of this Lease be declared unconstitutional, invalid or beyond the authority of either party to enter into or carry out, by a final decision by a court or tribunal of competent jurisdiction, such decision shall not affect the validity of the remainder of this Lease, which shall continue in full force and effect, provided that the remainder of this Lease can, absent the unexercised portion, be reasonably interpreted to give effect to the intentions of the parties.

SECTION 29. HAZARDOUS MATERIALS.

A. Hazardous materials are those substances listed in Division 4, Chapter 30, Article 9 of Title 22, California Code of Regulations, or those which meet the toxicity, reactivity, corrosiveness or flammability criteria of Article 11 of the above Code, as well as any other substance which poses a hazard to health or environment.

B. Except as otherwise permitted in the Lease, Lessee shall not use, create, store or allow any such substances on the premises. Fuel stored in a motor vehicle for the exclusive use in such vehicle is excepted.

C. In no case shall Lessee cause or allow the deposit or disposal of any such substance on the premises.

D. However, household products necessary for routine cleaning and maintenance of the property may be kept on the premises in quantities reasonable for current needs.

E. Lessor, or its agents or contractors, shall at all times have the right to go upon and inspect the premises and the operations conducted thereon to assure compliance with the requirements herein stated. This inspection may include taking samples of substances and materials present for testing, and/or testing soils or underground tanks on the premises.

F. Breach of any of these covenants, terms and conditions shall give Lessor authority to immediately terminate this Lease.
It is the intent of the parties hereto that the Lessee shall be responsible for and bear the entire cost of removal and disposal of hazardous materials or waste introduced to the premises during the term of this Lease. The Lessee shall also be responsible for any cleanup and decontamination on or off the premises necessitated by such materials or waste.

G. Lessee shall further indemnify, defend, and hold Lessor and its officers or employees, harmless from any and all responsibility, loss, damage, liability and expenses (including reasonable attorneys’ fees) resulting from the presence or use of hazardous materials on the premises during the Lessee's periods of use and possession, except as set forth below in subparagraph "H."

H. Lessee shall comply with all environmental laws during the term of the Lease, but shall bear no liability whatsoever and shall not assume any conditions for any existing hazardous materials or wastes (as defined herein in Subsection "A") on the premises, except for improperly disturbing and/or causing a discharge of asbestos containing building materials presently existing on the premises as referred to in the Clancy report, and in Lessor’s "Asbestos Management Program." Except for any activities or actions by Lessee which disturb or cause a discharge of such asbestos containing materials, and notwithstanding Subsection "G" above, Lessor agrees to indemnify, defend and hold Lessee harmless from and against any and all loss, damage, liability and expenses (including reasonable attorneys’ fees) that Lessee may incur as a result of any claim, demand or action related to environmental conditions, hazardous materials or any other environmental laws and regulations not resulting from Lessee’s activities on the premises, or those of Lessee’s employees, agents, contractors and/or invitees.

I. Lessor hereby represents and warrants to Lessee that, as of the commencement date of this Lease, the premises do not contain any asbestos, except as other wise referred to herein, or other hazardous materials (as defined in Section 30 above and otherwise herein) which are known to Lessor.

SECTION 30. VIOLATIONS. Violation of any of the above covenants, terms, and conditions shall constitute a breach of this agreement and be grounds for termination of Lease as provided by law.

SECTION 31. SIGNAGE. Any exterior signage for the property shall be subject to the requirements of Title 19 of the Sunnyvale Municipal Code, including, but not limited to Chapter 19.92 "Signs."

SECTION 32. RECEIPT OF COPY. Each party hereto hereby acknowledges receipt of copy of this Lease.

IN WITNESS WHEREOF, Lessor has caused this Lease to be duly executed in its behalf and attested, and Lessee has caused this Lease to be executed by its authorized officers.

Return to RTC# 03-206