Agenda packet — Modesto City Council, October 8, 2024 (part 6 of 8)

However, exceptions to the formal bidding process are granted in MMC 8-3.204(d) “Where the Purchasing Manager, in her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality.” Therefore, staff recommends the Aircraft Maintenance Services of this agreement to Mather Aviation, LLC should be exempt from the formal bidding procedures in accordance with Modesto Municipal Code 8-3.204(d) since Mather Aviation, LLC is the only known provider for maintenance of the Gipps Aero GA8 aircraft and provides services on-site at the Modesto City-County Airport and is therefore the most logical and cost-effective choice for aircraft maintenance services.

FISCAL IMPACT:

The anticipated cost of $159,768 for the aircraft maintenance agreement will be absorbed within the current Modesto Police Department General Fund Operating budget in the Air Support Unit Cost Center (19322) in Account No. 52300 (Tool and Field Supplies) and 53100 (Repair and Maintenance Services). This is for a two-year agreement, in Fiscal Year 2024-2025, the total estimated cost is $87,072 and for Fiscal Year 2025-2026, the total estimated cost is $72,696.

The totals for each fiscal year are calculated as shown below:

YEAR 1:

Description Man-Hours Hourly rate Total Cost
5 cycles of Inspections – 48 man-hours each 240 $155 $37,200 Camera removal/install – 16 man-hours each
instance, est. 2 instances
32 $155 $4,960
FAA Safety Repairs 80 $155 $12,400
Engine Replacement (100 man-hours) 100 $155 $15,500
Spare Rims – est. 1 time n/a n/a $2,500
20% contingency for parts and labor n/a n/a $14,512
TOTAL FOR YEAR 1: $87,072
YEAR 2:

Description Man-Hours Hourly rate Total Cost
5 cycles of Inspections – 48 man-hours each 240 $165 $39,600 Camera removal/install – 16 man-hours each
instance, est. 2 instances
32 $165 $5,280
FAA Safety Repairs 80 $165 $13,200
Spare Rims – est. 1 time n/a n/a $2,500
20% contingency for parts and labor n/a n/a $12,116
TOTAL FOR YEAR 2: $72,696
COMMITTEE RECOMMENDATION:

This item was not presented to the Safety and Communities Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the Agreement with Mather Aviation, LLC, Mather, California for Aircraft Maintenance and Repair Services for a two-year Agreement, for an estimated annual amount of $87,072, and a total amount not to exceed $159,768 over two years; and authorizing the City Manager, or his designee, to execute the Agreement.
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City Council, October 8, 2024
Aircraft Maintenance and Repair Services Agreement

Page 4 of 4 ends

Approved by:

Brandon Gillespie, Chief of Police
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Agreement with Mather Aviation, LLC

3. Exhibit B – Price Schedule

4. Exhibit C – Scope of Work – Maintenance Breakdown

5. Financial Interest Disclosure Form

6. Executed Bid Waiver
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2024-___

RESOLUTION APPROVING THE AGREEMENT WITH MATHER AVIATION,

LLC, MATHER, CALIFORNIA, FOR AIRCRAFT MAINTENANCE AND

REPAIR SERVICES FOR A TWO-YEAR AGREEMENT, FOR AN ESTIMATED ANNUAL AMOUNT OF $87,072, AND A TOTAL AMOUNT NOT TO EXCEED $159,768 OVER TWO YEARS; AND AUTHORIZING THE CITY MANAGER,

OR HIS DESIGNEE, TO EXECUTE THE AGREEMENT
WHEREAS, on February 28, 2023, by Resolution No. 2023-87, Council approved the purchase of a Gipps Aero GA8 for use by the Modesto Police Department (MPD) to establish its Air Support Unit; and
WHERAS, the Gipps Aero GA8, now known as Sky 1, was delivered to the MPD on March 31, 2023; and
WHEREAS, aircraft maintenance is necessary to keep the aircraft in a state of airworthiness, for the safety of the crew and everyone in the service area; and WHEREAS, aircraft maintenance is a highly regulated field requiring both scheduled and preventative servicing, inspection, testing, repair and overhaul or modification activities by certified maintenance technicians; and WHEREAS, the Gipps Aero GA8 is a unique aircraft with only 250 units built and sold throughout the world; and
WHEREAS, this uniqueness also extends to the maintenance schedule for this aircraft which requires inspections in 50-hour increments within 200 hours of flight time; and
WHEREAS, Mather Aviation is the only service provider with trained personnel that have experience working on this aircraft in Northern California and has locations in both Modesto and Sacramento; and
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2 WHEREAS, the California Highway Patrol (CHP) also operates with the Gipps Aero GA8 platform and has contracted with Mather Aviation, LLC for their maintenance needs for the last three years; and
WHEREAS, any maintenance option outside of Modesto is not feasible, nor financially responsible, as it would require the department to fly the aircraft for services which would incur the cost of the service plus the cost of fuel and additional maintenance on the plan for flight hours on the engine; and
WHEREAS, Modesto Municipal Code (MMC) Section 8-203 generally requires all purchases in excess of $100,000 for material, equipment, or contractual services to follow formal bid procedures. However, exceptions to the formal bidding process are granted in MMC 8-204(d) “Where the Purchasing Manager, in her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality.” Therefore, staff recommends the Aircraft Maintenance Services of this agreement to Mather Aviation, LLC, should be exempt from the formal bidding procedures in accordance with Modesto Municipal Code Section 8-204(d) since Mather Aviation, LLC is the only known provider for maintenance of the Gipps Aero GA8 since Mather Aviation, LLC is the only known provider for maintenance of the Gipps Aero GA8 aircraft and provides services on-site at the Modesto City-County Airport and is therefore the most logical and cost-effective choice for aircraft maintenance services.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto approves the Agreement with Mather Aviation, LLC, Mather, California, for Aircraft #21..
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3 Maintenance and Repair Services for two years, for an estimated annual amount of $87,072, and a total amount not to exceed $159,768 over two years.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is authorized to execute the agreement, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 8th day of October, 2024, by Councilmember ________________, who moved its adoption, which motion being duly seconded by Councilmember ________________, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _______________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _____________________________________
JOSE M. SANCHEZ, City Attorney
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1 ANNUAL AGREEMENT – AIRCRAFT MAINTENANCE AND REPAIR SERVICES This agreement, hereinafter called AGREEMENT, made, and entered into in the City of Modesto, State of California, this ________ day of ____________, 2024, by and between the City of Modesto, a municipal corporation of the State of California, hereinafter called CITY, and Mather Aviation, LLC, a limited liability company (LLC), hereinafter called CONTRACTOR.

WITNESSETH:

WHEREAS, the Modesto City Council adopted Resolution No. 2024-________ authorizing the award of an agreement for the furnishing of AVIATION MAINTENANCE AND REPAIR SERVICES to CONTRACTOR, attached hereto as Exhibit “A” and made a part hereof, and WHEREAS, the CONTRACTOR provides a SERVICE that best meets the CITY needs, attached hereto as Exhibit “B”, and made a part hereof, and WHEREAS, the CITY and CONTRACTOR shall enter into an agreement for the furnishing of AVIATION MAINTENANCE AND REPAIR SERVICES as described in Scope of Work - Maintenance Breakdown attached hereto as Exhibit “C”.
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2 NOW, THEREFORE, the parties hereto mutually agree as follows:

1. THE WORK:
a) CONTRACTOR shall furnish all labor, materials, equipment, fuel, tools, licenses, bonds and insurance necessary to perform and complete the required work as specified in Exhibit “C”, and in strict accordance with the conditions of the complete AGREEMENT. b) CONTRACTOR shall do and perform the work contemplated hereby in a good workmanlike manner under the direction of and to the satisfaction of the CITY Representative. c) CONTRACTOR shall maintain proper insurance with the CITY for the duration of the AGREEMENT.
d) CONTRACTOR shall maintain a CITY business license for the duration of the AGREEMENT.
e) CONTRACTOR shall furnish said services at the following AGREEMENT rates for an estimated annual amount of $87,072. The total amount paid by the CITY to the CONTRACTOR over the full term of the AGREEMENT shall not exceed $159,768. Unless the services provided are for a lump sum or flat fee, fees for work performed by CONTRACTOR on an hourly basis shall not exceed the amounts shown on Price Schedule attached hereto as Exhibit B.

2. CITY AND CONTRACTOR REPRESENTATIVE:

CONTRACTOR Representative is:

Benjamin Gleason
Modesto Director of Maintenance
[email protected]
209-577-6831
CITY Representative is:

Lieutenant Kalani Souza
Modesto Police Department
[email protected]
209-527-9500
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3 The CITY Representative is not authorized to commit the CITY to changes in specifications, requirements, or scope of work, changes in price(s), period of performance or delivery date(s) or method of shipment. Changes of a contractual or business nature shall be effective only by written change to the AGREEMENT, issued by the City of Modesto, Purchasing Division.

3. TERM OF AGREEMENT:

The term of the AGREEMENT shall be for a period of two years.

Year 1: October 1, 2024, through September 30, 2025
Year 2: October 1, 2025, through September 30, 2026
Pricing as set forth in Section 1.e. above shall remain firm for the term of the AGREEMENT.

4. LIABILITY INSURANCE:

The CONTRACTOR shall provide, at its own expense, and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the CITY as may be required by the City Clerk of the CITY. The policies or certificates thereof shall provide that, at least 30 days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the CITY by registered mail, return receipt requested, for all of the following stated insurance policies.
a. General Liability - insurance with a minimum limit of liability per occurrence of $2,000,000 for bodily injury and property damage. The insurance shall indicate on the certificate of insurance the following coverage and indicate the policy aggregate limit applying to premises and operations; broad form contractual; independent contractors and subcontractors; products and completed operations; and/or professional liability. b. Automobile Liability – insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage and transportation related pollution liability. This insurance shall cover any automobile for bodily injury and property damage.
c. Workers' Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000 per accident for bodily injury or disease. #21..
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4 If at any time any of said policies shall be unsatisfactory to the CITY, as to form or substance or if a company issuing such policy shall be unsatisfactory to the CITY, the CONTRACTOR shall promptly obtain a new policy, submit the same to the CITY’s Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the CONTRACTOR to furnish, deliver or maintain such insurance and certificates as provided above, this AGREEMENT, at the election of the CITY, may be forthwith declared suspended, or terminated. Failure of the CONTRACTOR to obtain and/or maintain any required insurance shall not relieve the CONTRACTOR from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the CONTRACTOR concerning indemnification.

The CITY, its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation.

The Workers' Compensation insurer shall agree to waive all rights of subrogation against the CITY, its agents, officers, employees, and volunteers for losses arising from work performed by CONTRACTOR for the CITY.

The CONTRACTOR’s insurance policy(ices) shall include a provision that the coverage is primary as respects the CITY; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A: VII or with approval of the CITY’s Risk Manager.

For any claims related to this AGREEMENT, the CONTRACTOR’s insurance coverage shall be primary insurance as respects CITY, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the CITY, its officers, officials, employees, or volunteers shall be in excess of the CONTRACTOR’s insurance and shall not contribute with it.

5. PAYMENT:

CONTRACTOR shall invoice CITY upon completion of service based on the cost for services performed and reimbursable costs incurred prior to the invoice date. All invoices shall be paid in full the following payment terms within thirty days after completion and acceptance of the Services by the CITY, and #21..
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5 receipt of a properly prepared invoice, CITY will pay CONTRACTOR “Net 30 Days via EPay”. The CITY is exempt from payment of Federal Excise Tax, and all invoices shall be exclusive of such excise tax.

Invoice to: City of Modesto
Attn: Accounts Payable
P.O. Box 642
Modesto, CA 95353
Email to: [email protected]
At a minimum, invoices shall state the following:
 This AGREEMENT Number: 284496
 CITY department/division name and address
 Billing period
 Service hours worked day and week.
 Unit price, extended price, sales tax and total

6. INDEMNITY:

The CONTRACTOR shall hold the CITY, its agents, officials, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any negligent or intentional act or omission of CONTRACTOR, or its agents, officials, officers, employees, or volunteers relating to or during the performance of its obligations under this AGREEMENT. CONTRACTOR’s obligation to defend, indemnify, and hold the CITY, its agents, officials, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this AGREEMENT for CONTRACTOR to procure and maintain a policy of insurance.

7. VENUE & GOVERNING LAW:

Venue for any dispute or claim arising or related to this AGREEMENT its performance, breach, or interpretation (including issues about its validity or enforceability), shall be exclusively in the Superior Court of Stanislaus County or the United States District Court for the Eastern District of California #21..
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6 This AGREEMENT shall be deemed made in, governed by, performed in, and construed and enforced in accordance with the laws of the State of California, without giving effect to its conflicts of law’s provisions or principles.

8. ATTORNEYS’ FEES:

If a party to this AGREEMENT brings any action, including an action for declaratory relief, to enforce or interpret the provision of this AGREEMENT, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.

9. COMMENCEMENT AND COMPLETION OF THE WORK:

The work contemplated herein shall be commenced as immediately after the agreement administrator receives and has on file:

Proofs of insurance (approved by CITY Risk Manager); and Executed Agreement
a. Resolution No.2024-_______
b. Pricing Schedule
c. Scope of Work
d. Contractor’s City of Modesto business license

10. TERMINATION OF SERVICES:

Termination for Default: In the event either party fails to perform under this AGREEMENT or breaches any condition contained herein, the other party shall notify in writing the breaching party of the nonperformance. Within 10 days after receipt of notification, the breaching party shall correct any nonperformance to the reasonable satisfaction of the non-breaching party, or such other time as may be identified in the notice. Failure to correct any non-performance shall allow the non-breaching party to terminate this AGREEMENT for cause.
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7 Termination by City for Convenience: The City may also terminate this AGREEMENT the Contractor's performance under the Agreement, either in whole or in part, at its own discretion and without cause.

Post-Termination Procedure
Upon receipt of a written notice of termination pursuant to either of the foregoing paragraphs, the CONTRACTOR shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subcontractors, and agents are notified of such termination and act as specified in the notice of termination. b. Terminate all orders and subcontracts except as necessary to complete any portion of the SERVICES that are not terminated.
c. If directed in writing by the CITY to do so, assign all right, title and interest in subcontracts and materials in progress to CITY, in which case the CITY will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such, but in no event shall recovery by any CONTRACTOR or subcontractor include lost profits for portions of the SERVICES not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the CITY all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the CONTRACTOR in performing the SERVICES whether completed or in process.
e. Settle outstanding liabilities and claims, subject to the approval of CITY. f. Complete performance of such part of the SERVICES as has not been terminated. g. Take such other actions as may be necessary, or as may be directed by the CITY for the protection and preservation of the SERVICES and/or property related to the SERVICES.
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8 h. If CITY so requests, and at CITY's cost, CONTRACTOR shall provide sufficient oral or written status reports to make CITY reasonably aware of the status of CONTRACTOR’s work on the SERVICES.
i. CONTRACTOR understands and agrees that CITY may, in CITY’s sole discretion, refuse to pay CONTRACTOR for that portion of CONTRACTOR's SERVICES which were performed by CONTRACTOR on the project prior to the termination date and which remain unacceptable and/or not useful to CONTRACTOR as of the termination date.

CITY will pay CONTRACTOR for SERVICES actually completed prior to the receipt of the termination notice or otherwise completed in accordance with the notice of termination. The final payment to the CONTRACTOR after termination for convenience shall be limited to amounts due and owing under the AGREEMENT at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the SERVICES such as subcontractor agreements or contracts for materials. b. The AGREEMENT price allocable to the portion of the SERVICES properly performed or goods supplied to the work site by the CONTRACTOR as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the CONTRACTOR for such SERVICES.

11. COMPLIANCE WITH ALL LAWS:

CONTRACTOR hereby agrees that CONTRACTOR and its subcontractors, if any, in the performance of the SERVICES described herein, will comply with all federal, state, county and municipal laws, rules and regulations which may be applicable to the work herein contracted for, whether now in existence or hereafter adopted.

12. FAILURE TO PERFORM SATISFACTORY WORK:
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9 It is agreed and understood that if the CONTRACTOR fails to perform the SERVICES as specified herein, CITY's representative may:
a. Consent to accept such unsatisfactory service with an appropriate adjustment in contract price, based on established cost factors,
b. Have such required work done by CITY forces or otherwise, and charge the cost thereof to the CONTRACTOR, or
c. Recommend termination of the AGREEMENT between said CONTRACTOR and the City of Modesto.

Those discrepancies and deficiencies in the SERVICES that remain uncorrected after the date set for correction may be the necessary justification for a billing adjustment in the month following the occurrence.

Unless otherwise negotiated, billing adjustments for this incomplete or uncorrected work shall be permanent retention of 100% of the estimated monthly cost for the SERVICES not corrected or completed.

13. ASSIGNMENT OF RIGHTS:

The CONTRACTOR offers and agrees, and will require all subcontractors and suppliers to agree, to assign to the CITY all rights, title, and interest in and to all causes of action it and they may have under Section 4 of the Clayton Act (15 United States code, Section 15) or under the Cartwright Act (Business and Professions Code, Section 16700 et seq.), arising from the acquisition of goods, services, or materials pursuant to this AGREEMENT or any allowed subcontract. The assignment made by CONTRACTOR and all assignments made by subcontractors and suppliers shall be made and become effective at the time the CITY makes final payment to the CONTRACTOR, without further acknowledgment by the parties (Government Code, Sections 4550-4554).

14. CITY PROCESS/PROCEDURE APPROVALS:

CITY approval of any process or procedure shall not relieve CONTRACTOR of its responsibility to furnish the required SERVICES meeting all specifications contained herein.

15. CONTRACTOR'S RESPONSIBILITY FOR DAMAGES:
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10 If the CONTRACTOR damages any property belonging to the CITY or a third party, the CONTRACTOR will be required to make repairs immediately, at the CONTRACTOR’s sole cost and expense, to the satisfaction of the CITY. In the event that CONTRACTOR fails to perform the necessary repairs, the CITY may either retain from the money due to CONTRACTOR an amount sufficient to repair the damage or perform the repairs and send an invoice to the CONTRACTOR for such costs, which shall be paid within thirty (30) days.

16. NOTICES:

Any notice, payment or instrument required or permitted by this AGREEMENT to be given or delivered to either party shall be deemed to have been received when personally delivered, or one calendar. week following deposit of the same in any United States Post Office, registered or certified mail, postage prepaid, addressed as follows:

CONTRACTOR: Mather Aviation LLC
801 Airport Way
Modesto, CA 95345
CITY: City of Modesto
Purchasing Division
P.O. Box 642
Modesto, CA 95353
Each party may change its address for delivery of notice by delivering written notice of such change of address to the other party.

17. SIGNATORY(IES) FOR CONTRACTOR:

Each signatory for CONTRACTOR below warrants and represents that it is legally competent to, and has full authority to, execute the AGREEMENT.

18. QUANTITIES:

No minimum or maximum is guaranteed or implied.

19. FUNDING:
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11 All annual extensions are based upon continuous funding for that purpose by the City Council.

Failure to fund any annual extension shall result in an immediate termination of the AGREEMENT without redress.

20. OTHER GOVERNMENT/PUBLICLY FUNDED AGENCIES:

If mutually agreeable to all parties, the issuance of any resultant contract/purchase order referencing these specifications and modified by mutual agreement between all parties may be extended to other government or publicly funded agencies. It shall be understood that all terms and conditions as specified herein shall apply.

21. NON-DISCRIMINATION:
a. During the performance of this AGREEMENT, CONTRACTOR and any allowed subcontractors shall not unlawfully discriminate against any employee or applicant for employment because of race, color, ancestry, religion, sex, national origin, marital status, age, medical condition (cancer related), physical handicap (including AIDS), sexual orientation, or any other basis prohibited by Federal or California law. Equal employment opportunity extends, but is not limited to recruitment, compensation, benefits, layoff, termination, and all other conditions of employment. The CONTRACTOR and any allowed subcontractors shall ensure that the evaluation and treatment of their employees and applicants for employment are free of such discrimination. The CONTRACTOR and any allowed subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Administrative Code, Title 2, and Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900, set forth in Chapter 5 of Division 4 of Title 2 of the California Administrative Code are incorporated into this contract by reference and made a part hereof as if set forth in full. b. The CONTRACTOR and any allowed subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.
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12 c. The CONTRACTOR shall include the nondiscrimination and compliance provisions of this clause in any allowed subcontracts to perform SERVICES. d. The Contractor shall permit access by representatives of the Department of Fair Employment and Housing and the CITY upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours’ notice, to such of its books, records, accounts, other sources of information and its facilities as said Department or CITY shall require ascertaining compliance with this AGREEMENT. e. By executing this AGREEMENT, CONTRACTOR certifies that it shall follow and be in compliance with the Americans with Disabilities Act of 1990, the applicable administrative requirements promulgated in response thereto, and any other applicable Federal laws and regulations relating to handicap discrimination and participation and will continue to do so for at least the duration of the AGREEMENT and any extensions thereof.

22. CONTRACTOR LICENSES & PERMITS:

CONTRACTOR warrants and represents that it possesses and shall maintain all licenses, and shall secure and maintain all necessary permits, necessary to perform the SERVICES.

23. RECORDS:

All final versions of reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that CONTRACTOR prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the CITY. CONTRACTOR hereby agrees to deliver those documents to the CITY upon termination of the AGREEMENT, and the CITY may use, reuse, or otherwise dispose of the documents without CONTRACTOR’s permission. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this AGREEMENT are prepared specifically for the city and are not necessarily suitable for any future or other use.

24. FACILITIES AND EQUIPMENT:

Except as set forth herein, CONTRACTOR shall, at its sole cost and expense, provide all #21..
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13 facilities and equipment that may be necessary to perform the services required by this AGREEMENT. CITY shall make available to CONTRACTOR only the facilities and equipment listed in EXHIBIT “B” and “C”, and only under the terms and conditions set forth herein.

25. INDEPENDENT CONTRACTOR; NOT AGENT:

At all times during the term of this AGREEMENT, the CONTRACTOR shall be an independent contractor and shall not be an employee of the CITY. The CITY shall have the right to control CONTRACTOR only insofar as the results of CONTRACTOR’s services rendered pursuant to this AGREEMENT. Except as the CITY may specify in writing, CONTRACTOR shall have no authority, express or implied, to act on behalf of CITY in any capacity whatsoever as an agent. CONTRACTOR shall have no authority, express or implied, pursuant to this AGREEMENT to bind the CITY to any obligation whatsoever.

26. DRUG FREE WORKPLACE:

CONTRACTOR certifies that it is following and in compliance with Sections 8350 - 8355 of Chapter 5.5 of the Government Code, Drug Free Workplace Act whereby each person or organization awarded a contract/purchase order or grant for the procurement of any property or service from any state agency (city) shall certify to the contracting or granting agency that it will provide a drug free workplace.

27. ASSIGNMENT:

Neither this AGREEMENT nor any SERVICES hereunder shall be subcontracted or assigned by CONTRACTOR without the prior written consent of the CITY in each and every instance.

28. WAIVER:

The waiver by any party to this AGREEMENT of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.

29. HEADINGS NOT CONTROLLING:

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this AGREEMENT.
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14 30. MISCELLANEOUS:

Time is of the essence in the CONTRACTOR’s performance under each provision of this AGREEMENT.

31. ENTIRE AGREEMENT:

This Agreement and its exhibits contain the entire understanding between CONTRACTOR and CITY. Additional or new terms contained in this AGREEMENT which vary from CONTRACTOR’S pricing schedule are controlling and are deemed accepted by CONTRACTOR by performance of any SERVICES or other commencement of performance hereunder. The terms and conditions of the Scope of Work, attached hereto as Exhibit C, are incorporated herein. In the event of a conflict between the Scope of Work and this AGREEMENT, this AGREEMENT shall control. All previous bids, offers and communications relative to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement. No future waiver or exception to any of the terms, conditions, and provisions of this AGREEMENT shall be considered valid unless specifically agreed to in writing by the parties.

32. PARTIAL INVALIDITY:

If any provision in this AGREEMENT is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.
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15 IN WITNESS WHEREOF, the CITY OF MODESTO, a municipal corporation, has authorized the execution of this Agreement by its City Manager and attested by its City Clerk under authority of Resolution No. 2024-_______, adopted by the Council of the City of Modesto on the _____________ day of _____________________, 2024 and Mather Aviation, LLC has caused this Agreement to be duly executed. #21..
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EXHIBIT B #21..
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Scope of Work – Aircraft Maintenance

1. Contractor agrees to provide to the Modesto Police Department (MPD) all personnel, labor, materials, tools, supplies, equipment, permits and licenses necessary for airplane maintenance and repair for aircraft assigned to the Air Support Unit.

A. License/Certification Requirements:
i. Current factory authorized GippsAero Service Station OR a valid Federal Aviation Administration (FAA) approved repair station as prescribed in Part 145 of the Federal Aviation Regulations (FARS).
ii. All mechanics will be supervised by an FAA Airframe & Powerplant certified mechanic. iii. Contractor shall employ at least one FAA certified Inspection Authorization (IA).

All certificates, licenses and permits shall be current and in effect throughout the term of the agreement.

2. The services shall be performed at: Mather Aviation Modesto, 801 Airport Way Hangar 2 Modesto CA 95354

3. Detailed description of work to be performed:
a. Contractor shall provide all labor, personnel, equipment, supplies, materials, tools, transportation, licenses, and/or permits, and insurance necessary to maintain GippsAero GA8 aircraft owned and operated by MPD. The term “maintain” shall include service, repair, replace, troubleshoot and provide new items, for the aircraft airframe and power plant(engine). The Contractor shall be a current factory authorized GippsAero Service Station or a valid Federal Aviation Administration (FAA) approved repair station, as prescribed in Part 145 of the Federal Aviation Regulations. All certificates, licenses, and permits shall be current and in effect throughout the term of this agreement, and readily available for inspection by MPD.
b. The Contractor shall demonstrate adequate facilities, equipment, and personnel to perform airframe and engine maintenance and/or repair. Contractor’s regular place of business shall be available for inspection by MPD and access granted to MPD employees while MPD aircraft are being maintained or MPD parts or equipment are on-site. c. Contractor shall employ at least one FAA certified Inspection Authorization (IA) mechanic to perform maintenance and/or repairs. Certification(s) shall be current and in effect throughout the term of this agreement. Work experience shall be subject to verification by MPD.
d. The ASU Supervisor shall perform an airplane maintenance inspection concurrent with Contractor’s inspection. If unavailable, the ASU Supervisor shall delegate a suitable departmental delegate to conduct the inspection. The purpose of the inspection will be to ensure that the Contractor’s assigned mechanic(s) are performing services in compliance with FAA regulations, airworthiness directives, and manufacturer’s bulletins. Contractor shall ensure that aircraft and engine logbooks are complete and accurate entries are made, life-limited component use times are accurately recorded, and ensure any spare components are properly tagged (serviceable, non-serviceable, repairable) and identified.

If determined the Contractor is not in compliance as stated, both ASU and Contractor will agree on a “time-frame” to remedy and/or resolve the issue(s). If the issue(s) are not resolved within the agreed upon time-frame, the contract may be terminated.

EXHIBIT C
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e. It is the responsibility of Contractor to provide the tools which are necessary for routine maintenance or repair of the MPD aircraft. Should MPD request the use of tools or special equipment that is not required for normal maintenance, Contractor shall provide a written cost estimate and receive authorization from the ASU Supervisor prior to purchase or rental of these items. If approved, this cost shall be charged against the contract agreement.

Any purchase of special equipment required for normal maintenance against the contract agreement will be the property of the MPD.
f. Contractor shall have a formal tool inventory control system to ensure that all tools used during maintenance are removed from the aircraft and returned to their storage areas at the end of maintenance.
g. Contractor shall maintain the aircraft in accordance with all appropriate FAA, manufacturer and MPD requirements. Contractor will perform other services and repairs as necessary or as required by MPD. Contractor shall maintain all required navigation databases as required by the FAA. Authorization for providing service shall be at the direction of the ASU Supervisor, or designee.
h. To ensure compliance with FAA regulations, airworthiness directives, and manufacturer’s bulletins, service bulletins, and advisories, contractor shall comply with Federal Aviation Regulation (FAR) 43.9 as it relates to logbook/maintenance record entries. The MPD operates under FAR part 91 guidelines, but MPD requires logbook entries to comply with FAR 43.9. The logbook entry shall be made on adhesive label material and securely attached to the logbook page, or Contractor shall make a pen and ink entry. The attachment of any work order to the logbook and/or an entry to “see work order for details,” shall not be allowed.
i. Contractor shall utilize an aircraft maintenance management and tracking service system for all maintenance tracking/documentation and inventory control. j. Contractor shall be required to complete appropriate inspection checklists approved by the manufacturer, and/or FAA. This checklist shall be signed by the mechanic and made available to MPD pilot receiving the aircraft. The GippsAero GA8 Progressive Maintenance Program is the only accepted checklist for use on MPD GippsAero GA8 aircraft. k. Contractor agrees to use the Progressive Maintenance Program contained in the GippsAero recommended procedures and instructions for the ground handling, services, and maintaining of the GA8 Aircraft.
l. Contractor shall be required to research, maintain and comply with all mandatory manufacturers “Service Bulletins (SB)” pertaining thereof with airframe, power plant and propeller requirements. Contractor shall be required to comply with all manufacturers “Airworthiness Directives (AD)” issued by the FAA in accordance with 14 CFR part 39 to correct an unsafe condition in a product. Part 39 defines a product as an aircraft, engine, propeller or appliance.
m. For all work other than scheduled inspections, Contractor shall provide a written estimate of labor, parts, and time required to complete the specified maintenance and/or repairs.

No work shall be done or parts supplied in excess of, or different from the original written estimate without the separate oral or written approval of the ASU Supervisor. Should Contractor continue to work without the separate oral or written approval of the ASU Supervisor, MPD is released from all obligation to pay any amount over the original estimate.
#21..
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n. To ensure the origin of life limited components, Contractor shall provide an itemized manufacturer’s invoice for all life limited parts purchased from the manufacturer. The invoice shall be submitted with Contractor’s invoice.
o. Contractor shall provide a copy of the work order with the life limited component detailing the work performed for any component overhauled by or through Contractor. p. Airframe, Avionics or engine repair related discrepancies that are not capable of being corrected by Contractor shall not be subcontracted and notification shall be made to the ASU Supervisor. MPD will coordinate necessary repairs and reserves the right to utilize any available maintenance contract for such repairs or modifications. q. Technical advice may be obtained by Contractor from the appropriate manufacturer or other designated representatives.
r. When MPD critical parts or components are shipped, they shall be insured by Contractor for replacement value.
s. Any damage caused to the aircraft or its components through neglect or negligence by Contractor or its employees shall be the sole responsibility of Contractor. t. Should Contractor be required to travel to a location other than the specified MPD facility to maintain the aircraft, actual out-of-pocket expenses (current Federal General Services Agency GSA rate for meals, lodging, etc.) shall be reimbursed when supported by receipts.

Contractor shall be reimbursed for mileage at the current GSA rate. Expenses for such per diem and mileage shall be included on the invoice(s) for work performed. Expenses for such per diem and mileage shall only be authorized for travel incurred within the state.

Authorization for out-of-state travel must be obtained and approved by the ASU Supervisor prior to any expenses being incurred. Additionally, expenses for rental cars or airfare shall not be authorized.
#21..
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Hours Calculations
240 48x5=240; 240*155=37,200
32 32*155=4,960
80 80*155=12,400
100 100*155=15,500
452
72,560+100=725.6; 725.6x20=14,512
452
240 48x5=240;240*165=39,600
32 32*165=5,280
80 80*165=13,200
352
60,580+100=605.8; 605.8x20=12,116
352
Cost
$37,200
$4,960
$12,400
$15,500
$2,500
$72,560
$14,512
$87,072
$39,600
$5,280
$13,200
$2,500
$60,580
$12,116
$72,696
$159,768
Maintenance Breakdown
Mather Agreement
5 Cycles of Inspections at 48 man hours each
Camera Removal/lnstall-16 hour each occurrence 32 hours a year 64 total life of contract FAA Safety Repairs - 80 hours each year
Engine Replacement (100 hours) 1 time during contract
Spare Rims lx a year - $2,500 a year $5,000 total contract.

Total
20%
Year 1 Grand Total
5 Cycles of Inspections at 48 man hours each
Camera Removal/lnstall-16 hour each occurrence 32 hours a year 64 total life of contract FAA Safety Repairs - 80 hours each year
Spare Rims lx a year - $2,500 a year $5,000 total contract.

Total
20%
Year 2 Grand Total
Agreement Amount for both years
#21..
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FINANCIAL INTEREST DISCLOSURE (only required if agreement is over $100K) Any contract award to result from this IFB process and Bidder’s submission of a Bid therewith will require approval by a majority vote of the City of Modesto’s City Council. In order to have full transparency in any City of Modesto commercial actions, the City Council may not approve an agreement between the City and the Bidder until all persons with a direct or indirect financial interest of greater than $2,000 in the Bidder are identified by name.

Bidder must therefore complete this Financial Interest Disclosure, listing by name all parties that have a material financial interest in the agreement, contract or development right.

PLEASE NOTE, any Council action that requires a Financial Interest Disclosure cannot be considered by the City Council until the required reporting is made. That means that City Council agenda items without the disclosure will be removed from the Council agenda.

Financial Interest Disclosure to City of Modesto
Bidder shall identify any person with a financial interest in the Bidder by name, below.

For the purposes of this disclosure, a “Financial Interest” shall have the meaning contained in Modesto Municipal Code section 2-10.02.

Persons having an aggregate economic interest in the Bidder less than two thousand dollars ($2,000.00) at all times prior to final Council action of the proposed contract are not required to be listed on the Financial Interest Disclosure.

Notwithstanding the foregoing, a Financial Interest Disclosure is not required for a Bidder meeting the financial criteria for listing on the New York or the Pacific Stock exchanges unless it is reasonably foreseeable that a City Council decision will increase or decrease that entity's gross revenues or expenses by one million dollars ($1,000,000) or more and the requirements of Modesto Municipal Code Section 2-10.03(h) are satisfied.

It is the legal obligation of all applicants for approval of an agreement or of an application for development rights to verify in writing, under penalty of perjury, that the identity of each person having a material financial interest in the Bidder is true, correct and complete. By signing below, the applicant understands that this information is provided under penalty of perjury, and that intentionally supplying misinformation or deception may result in either invalidation of the agreement or application, or criminal prosecution for misdemeanor violation of the Modesto Municipal Code, or both. Negligent provision of misinformation shall be grounds for invalidation.

In accordance with the Modesto Municipal Code, each applicant has a continuing obligation to maintain the truth, accuracy and completeness of the financial interest disclosure information provided below until after final consideration by the City Council of any matter arising out of or relating to the agreement or application.
#21..
- 1207 -
Print Names of Persons Having a Financial Interest in Bidder Receiving this Agreement:

First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
First Name, Last Name
By signing this document, I agree to the information contained within.

Bidder Company Name:

Name of Bidder Signatory:

Signature of Bidder Representative:
#21..
- 1208 -
$159,768.00
#21..
- 1209 -
Mark Bolden (Jul 30, 2024 14:33 PDT) Mark Bolden
Mark Bolden Jul 30, 2024
Dianne Love (Jul 30, 2024 14:49 PDT)
Dianne Love Dianne
Love Jul 30, 2024 DeAnna
Christensen Jul 30, 2024
See attachment below. Mather Aviation is the only qualified mechanic at the Modesto Airportthat specializes inGipps Aero GA9 maintenance and carries parts in stock for repairs minimizing downtime. I approve of this Bid Waiver. #21..
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#21..
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#21..
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#21..
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#21..
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Bid Waiver - Mather
Final Audit Report 2024-07-30
Created: 2024-07-30
By: Juana Lynch ([email protected])
Status: Signed
Transaction ID: CBJCHBCAABAAc6CLzi6Yv9CvKORpADxOWKOwwApBSllM "Bid Waiver - Mather" History
Document created by Juana Lynch ([email protected]) 2024-07-30 - 7:55:47 PM GMT
Document emailed to Mark Bolden ([email protected]) for signature 2024-07-30 - 8:00:34 PM GMT
Email viewed by Mark Bolden ([email protected])
2024-07-30 - 9:17:43 PM GMT
Document e-signed by Mark Bolden ([email protected]) Signature Date: 2024-07-30 - 9:33:46 PM GMT - Time Source: server Document emailed to [email protected] for signature
2024-07-30 - 9:33:48 PM GMT
Email viewed by [email protected]
2024-07-30 - 9:48:45 PM GMT
Signer [email protected] entered name at signing as Dianne Love 2024-07-30 - 9:49:19 PM GMT
Document e-signed by Dianne Love ([email protected]) Signature Date: 2024-07-30 - 9:49:21 PM GMT - Time Source: server Document emailed to DeAnna Christensen ([email protected]) for signature 2024-07-30 - 9:49:23 PM GMT
Email viewed by DeAnna Christensen ([email protected]) 2024-07-30 - 9:55:32 PM GMT
Document e-signed by DeAnna Christensen ([email protected]) Signature Date: 2024-07-30 - 9:56:55 PM GMT - Time Source: server #21..
- 1215 -
Agreement completed.
2024-07-30 - 9:56:55 PM GMT
#21..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 8, 2024
Date: September 12, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Brandon Gillespie, Chief of Police
SUBJECT: Records Management System Annual Maintenance Renewal CONTACT: Jessica Smart, Police Administrator, [email protected], 209-572-9500 DESCRIPTION:

Consider approving the payment for Records Management Software Annual Maintenance to CentralSquare Technologies, Lake Mary, Florida, for a total amount not to exceed $100,408. (Funding Source: Supplemental Law Enforcement Services Fund) STRATEGIC PLAN ELEMENT:

The recommended action supports the City’s 2020-2025 Strategic Plan for Governance and Service Delivery by building community trust in City government through transparent and efficient service delivery.

BACKGROUND:

In May of 2017, by Resolution No. 2017-167, Council approved an agreement with TriTech Software Solutions to upgrade the Records Management System (RMS) at the Modesto Police Department (MPD). Part of this agreement included the annual software maintenance and licensing fees for the various modules and licenses. At the time of Council approval, the estimated annual software maintenance and licensing fees were $91,794. The MPD has continued to utilize this RMS in the subsequent years.

DISCUSSION:

In the years since the RMS was implemented, TriTech was procured by Tiburon and then CentralSquare Technologies. Additionally, as invoices for the annual software maintenance and licensing were received and processed, several modules that were being utilized by MPD were not being billed by CentralSquare. Out of ten existing modules being utilized, CentralSquare was only billing for five. This error was discovered in the Spring of 2024 by CentralSquare, and we came to mutual agreement that they would not bill us retroactively for these missed items, but instead, start billing for them with this upcoming renewal.

Each fiscal year, the Information Technology Department gathers information from City departments to capture all existing software maintenance support agreements and presents #22..
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City Council, October 8, 2024
Records Management System Annual Maintenance Renewal

Page 2 of 3 ends

them to the Council in a single action to authorize payment. The Fiscal Year 2024-2025 Software Maintenance Support Agreements payment authorization item was approved by Council on June 4, 2024, by Resolution No. 2024-177. As the MPD was not notified of Central Square’s billing error prior to the completion of the annual software maintenance item for the 2024-2025 Fiscal Year, the amount listed for this item on the Software Maintenance Support Agreements for Fiscal Year 2024-2025 was $35,000, which is what the MPD has traditionally budgeted and paid annually for the RMS annual software maintenance and licensing fees. This means that the amount authorized for payment is $65,408 short of the total bill of $100,408.

Therefore, the department is requesting approval to pay CentralSquare Technologies, Lake Mary, Florida, a total of $100,408.

Per Modesto Municipal Code (MMC) Section 8-3.204 (c), the Purchasing Manager, in his or her discretion, may determine that calling for bids on a competitive basis as set forth in MMC Section 8-3.203 is undesirable due to exigent circumstances. Additionally, MMC 8-3.204(d) states that where the Purchasing Manager, in his or her discretion, determines that a process other than the formal proposal procedure set forth in Section 8-3.203 will result in a procurement for the City at the lowest possible cost commensurate with the desired quality, the purchase may be exempt from the formal bid process. Under this scenario, all purchasing processes shall be met as only CentralSquare Technologies can provide the annual maintenance for the existing RMS system and the only alternative would be to change to another RMS solution which would be costly and time intensive to implement and there would still be a need to secure the annual software maintenance for the existing RMS solution in the interim.

FISCAL IMPACT:

The anticipated increase in cost of $65,408 will be funded through the department’s Supplemental Law Enforcement Services Fund and will be appropriately budgeted in the department operating budget annually starting with the 2025-2026 Fiscal Year. The appropriate annual maintenance cost will be included in the 2025-2026 Software Maintenance Support Agreement item for Council approval.

COMMITTEE RECOMMENDATION:

This item was not presented to the Safety and Communities Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the payment for Records Management Software Annual Maintenance to CentralSquare Technologies, Lake Mary, Florida, for a total amount not to exceed $100,408; and authorizing the Finance Director, or her designee, to execute the payment.

Approved by:

Brandon Gillespie, Chief of Police
Joseph P. Lopez, City Manager
#22..
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City Council, October 8, 2024
Records Management System Annual Maintenance Renewal

Page 3 of 3 ends

Attachments:

1. Resolution

2. Central Square Technologies Invoice

3. Executed Bid Waiver
#22..
- 1219 -
1 MODESTO CITY COUNCIL
RESOLUTION NO. 2024-___

RESOLUTION APPROVING THE PAYMENT FOR RECORDS MANAGEMENT

SOFTWARE ANNUAL MAINTENANCE TO CENTRALSQUARE

TECHNOLOGIES, LAKE MARY, FLORIDA, FOR A TOTAL AMOUNT NOT TO EXCEED $100,408; AND AUTHORIZING THE FINANCE DIRECTOR, OR

HER DESIGNEE, TO EXECUTE THE PAYMENT
WHEREAS, in May of 2017, by Resolution No. 2017-167, Council approved an agreement with TriTech Software Solutions to upgrade the Records Management System (RMS) at the Modesto Police Department (MPD); and
WHERAS, the MPD has continued to utilize this RMS in the subsequent years through TriTech’s acquisition by Tiburon and then CentralSquare Technologies; and WHEREAS, as invoices for the annual software maintenance and licensing were received and processed, several modules that were being utilized by MPD were not being billed by Central Square; and
WHEREAS, this error was discovered in the Spring of 2024 by CentralSquare and we came to the mutual agreement that they would not bill us retroactively for these missed items, but instead, start billing for them with this upcoming renewal; and WHEREAS, each year, the Information Technology Department gathers information from City departments to capture all existing software maintenance support agreements and presents them to Council in a single action to authorize payment; and WHEREAS, the Fiscal Year 2024-2025 Software Maintenance Support Agreements payment authorization item was approved by Council on June 4, 2024, by Resolution No. 2024-177; and
WHEREAS, as the MPD was not notified of CentralSquare’s billing error prior to the completion of the annual software maintenance item for the 2024-2025 Fiscal Year, #22..
- 1220 -
2 the amount listed was $35,000 which is what the MPD has traditionally budgeted and paid annual for the RMS annual software maintenance and licensing fees; and WHEREAS, the department is requesting approval to pay CentralSquare Technologies, Lake Mary, Florida, a total of $100,408; and WHEREAS, per Modesto Municipal Code (MMC) Section 8-204 (c), the Purchasing Manager, in his or her discretion, may determine that calling for bids on a competitive basis as set forth in MMC Section 8-3.203 is undesirable due to exigent circumstances. Additionally, MMC 8-3.204(d) states that where the Purchasing Manager, in his or her discretion, determines that a process other than the formal proposal procedure set forth in Section 8-3.203 will result in a procurement for the City at the lowest possible cost commensurate with the desired quality, the purchase may be exempt from the formal bid process. Under this scenario, all purchasing processes shall be met as only CentralSquare Technologies can provide the annual maintenance for the existing RMS system and the only alternative would be to change to another RMS solution which would be costly and time intensive to implement and there would still be a need to secure the annual software maintenance for the existing RMS solution in the interim.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto approves the payment for the Records Management Software Annual Maintenance to CentralSquare Technologies, Lake Mary, Florida, for a total amount not to exceed $100,408.

BE IT FURTHER RESOLVED that the Finance Director, or her designee, is authorized to execute the payment.
#22..
- 1221 -
3 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 8th day of October, 2024, by Councilmember ____________________, who moved its adoption, which motion being duly seconded by Councilmember _____________________, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _______________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _____________________________________
JOSE M. SANCHEZ, City Attorney
#22..
- 1222 -
Tritech Software Systems, a CentralSquare Company
1000 Business Center Drive
Lake Mary, FL 32746
Billing Inquiries: [email protected] Invoice
Invoice No (1 of 1) Date Page
411665 5/24/2024 1 of 2
Bill To
Modesto Police, CA
Accounts Payable
Michelle Belarmino
PO Box 642
Modesto CA 95353
United States
Ship To
Modesto Police, CA
Michelle Belarmino
600 10th Street
Modesto CA 95354
United States
Customer No Customer Name Customer PO # Currency Due Date 12691 Modesto Police, CA USD 7/25/2024
Description Units Rate Extended
Quote No. Q-175927
1 Records-eCitations (IN) Interface (Export) Annual Maintenanc - Annual Maintenance Fee
Records-eCitations (IN) Interface (Export) Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 3,361.74 3,361.74
2 Inform RMS Custom Maintenance Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS Custom Maintenance Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 0.00 0.00
3 Inform RMS GIS (Without CAD) Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS GIS (Without CAD) Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 4,082.12 4,082.12
4 Inform RMS Server Software Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS Server Software Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 26,195.40 26,195.40
5 Inform RMS Barcode Handheld Reader Software Annual
Maintenan - Annual Maintenance Fee
Inform RMS Barcode Handheld Reader Software Annual
Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 376.56 376.56
6 Inform FBR User Annual Maintenance Fee - Annual Maintenance Fee
Inform FBR User Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
100 240.12 24,012.45
7 Inform RMS Accident Annual Maintenance Fee - Annual
Maintenance Fee
Inform RMS Accident Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 2,852.68 2,852.68
#22..
- 1223 -
Tritech Software Systems, a CentralSquare Company
1000 Business Center Drive
Lake Mary, FL 32746
Billing Inquiries: [email protected] Invoice
Invoice No (1 of 1) Date Page
411665 5/24/2024 2 of 2
Bill To
Modesto Police, CA
Accounts Payable
Michelle Belarmino
PO Box 642
Modesto CA 95353
United States
Ship To
Modesto Police, CA
Michelle Belarmino
600 10th Street
Modesto CA 95354
United States
Customer No Customer Name Customer PO # Currency Due Date 12691 Modesto Police, CA USD 7/25/2024
Description Units Rate Extended
8 Inform RMS Evidence and Barcoding Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS Evidence and Barcoding Annual Maintenance Fee Maintenance: Start:7/26/2024, End: 7/25/2025
1 2,853.11 2,853.11
9 Inform RMS Test or Training System Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS Test or Training System Annual Maintenance Fee Maintenance: Start:7/26/2024, End: 7/25/2025
1 1,964.66 1,964.66
10 Inform RMS User Annual Maintenance Fee - Annual
Maintenance Fee
Inform RMS User Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
100 347.09 34,708.91
Please include invoice number(s) on your remittance advice.

ACH:

Sep 14, 2024 Sep 16, 2024 Sep 16, 2024
#22..
- 1226 -
#22..
- 1227 -
#22..
- 1228 -
#22..
- 1229 -
#22..
- 1230 -
#22..
- 1231 -
#22..
- 1232 -
Tritech Software Systems, a CentralSquare Company
1000 Business Center Drive
Lake Mary, FL 32746
Billing Inquiries: [email protected] Invoice
Invoice No (1 of 1) Date Page
411665 5/24/2024 1 of 2
Bill To
Modesto Police, CA
Accounts Payable
Michelle Belarmino
PO Box 642
Modesto CA 95353
United States
Ship To
Modesto Police, CA
Michelle Belarmino
600 10th Street
Modesto CA 95354
United States
Customer No Customer Name Customer PO # Currency Due Date 12691 Modesto Police, CA USD 7/25/2024
Description Units Rate Extended
Quote No. Q-175927
1 Records-eCitations (IN) Interface (Export) Annual Maintenanc - Annual Maintenance Fee
Records-eCitations (IN) Interface (Export) Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 3,361.74 3,361.74
2 Inform RMS Custom Maintenance Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS Custom Maintenance Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 0.00 0.00
3 Inform RMS GIS (Without CAD) Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS GIS (Without CAD) Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 4,082.12 4,082.12
4 Inform RMS Server Software Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS Server Software Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 26,195.40 26,195.40
5 Inform RMS Barcode Handheld Reader Software Annual
Maintenan - Annual Maintenance Fee
Inform RMS Barcode Handheld Reader Software Annual
Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 376.56 376.56
6 Inform FBR User Annual Maintenance Fee - Annual Maintenance Fee
Inform FBR User Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
100 240.12 24,012.45
7 Inform RMS Accident Annual Maintenance Fee - Annual
Maintenance Fee
Inform RMS Accident Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
1 2,852.68 2,852.68
xtorres , 5/28/2024, 12:17:30 PM
#22..
- 1233 -
Tritech Software Systems, a CentralSquare Company
1000 Business Center Drive
Lake Mary, FL 32746
Billing Inquiries: [email protected] Invoice
Invoice No (1 of 1) Date Page
411665 5/24/2024 2 of 2
Bill To
Modesto Police, CA
Accounts Payable
Michelle Belarmino
PO Box 642
Modesto CA 95353
United States
Ship To
Modesto Police, CA
Michelle Belarmino
600 10th Street
Modesto CA 95354
United States
Customer No Customer Name Customer PO # Currency Due Date 12691 Modesto Police, CA USD 7/25/2024
Description Units Rate Extended
8 Inform RMS Evidence and Barcoding Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS Evidence and Barcoding Annual Maintenance Fee Maintenance: Start:7/26/2024, End: 7/25/2025
1 2,853.11 2,853.11
9 Inform RMS Test or Training System Annual Maintenance Fee - Annual Maintenance Fee
Inform RMS Test or Training System Annual Maintenance Fee Maintenance: Start:7/26/2024, End: 7/25/2025
1 1,964.66 1,964.66
10 Inform RMS User Annual Maintenance Fee - Annual
Maintenance Fee
Inform RMS User Annual Maintenance Fee
Maintenance: Start:7/26/2024, End: 7/25/2025
100 347.09 34,708.91
Please include invoice number(s) on your remittance advice.

ACH:

Routing Number 121000358
Account Number 1416612641
E-mail payment details to: [email protected] Check:
12709 Collection Center Drive
Chicago, IL 60693
Subtotal 100,407.63
Tax 0.00
Invoice Total 100,407.63
Payments Applied 0.00
Balance Due USD 100,407.63
#22..
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Bid Waiver - Central Square Inform RMS
Final Audit Report 2024-09-16
Created: 2024-09-13
By: DeAnna Christensen ([email protected])
Status: Signed
Transaction ID: CBJCHBCAABAAAjJABMD1p8KuhtapmyhpFE_vojaZQWLQ "Bid Waiver - Central Square Inform RMS" History
Document created by DeAnna Christensen ([email protected]) 2024-09-13 - 11:45:12 PM GMT
Document emailed to Dameon Booker ([email protected]) for signature 2024-09-13 - 11:47:25 PM GMT
Email viewed by Dameon Booker ([email protected])
2024-09-14 - 8:47:04 PM GMT
Document e-signed by Dameon Booker ([email protected]) Signature Date: 2024-09-14 - 8:47:15 PM GMT - Time Source: server Document emailed to Celestia Dianne Love ([email protected]) for signature 2024-09-14 - 8:47:18 PM GMT
Email viewed by Celestia Dianne Love ([email protected]) 2024-09-14 - 8:48:03 PM GMT
Document e-signed by Celestia Dianne Love ([email protected]) Signature Date: 2024-09-16 - 3:04:51 PM GMT - Time Source: server Document emailed to DeAnna Christensen ([email protected]) for signature 2024-09-16 - 3:04:54 PM GMT
Email viewed by DeAnna Christensen ([email protected]) 2024-09-16 - 3:05:12 PM GMT
Document e-signed by DeAnna Christensen ([email protected]) Signature Date: 2024-09-16 - 4:50:30 PM GMT - Time Source: server Agreement completed.
2024-09-16 - 4:50:30 PM GMT
#22..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 8, 2024
Date: September 16, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Bill Sandhu, Director of Public Works
SUBJECT: First Amendment to the Agreement for Gallo Center for the Arts Lot 25 Discount Parking
CONTACT: Patrick Crowley, Senior Public Works Manager, [email protected], 209-402-6812
DESCRIPTION:

Consider approving the First Amendment with Gallo Center for the Arts, Modesto, CA for Lot 25 employee discounted parking increasing the Agreement amount by five dollars per parking permit per month, and extending the term of the Agreement from July 1, 2024 to June 30, 2025. (Funding Source: Parking Services Enterprise Fund)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City’s 2020-2025 Strategic Plan Area of Focus, Economic Vitality: “retain and attract residential, commercial, and industrial development to meet the community’s needs today and for the next generation”; Goal G: “make downtown Modesto a regional destination”.

BACKGROUND:

The Gallo Center for the Arts is in the downtown core of Modesto. The Gallo Center negotiated a sub-agreement with American Specialty Healthcare (ASH) to use 25 parking permits during day use and an additional five permits for evening use in the City Parking Lot #25 which is on the corner of 9th and I streets.

The ASH Parking Agreement, that was entered into on February 28, 2017, and executed on October 4, 2017, was terminated pursuant to Sections 8(c) and 8(d) of the Parking Agreement, which had anticipated 150 downtown jobs and associated parking needs. This resulted in the termination of the ASH sublease to Gallo Center and all parking spaces reverted to the City.

On July 12, 2022, by Resolution 2022-309, Council approved the agreement with Gallo Center for the Arts for a two-year term retroactive to July 1, 2022 through June 30, 2024, for discounted employee parking in Lot 25 with annual parking permits to be paid on a quarterly basis. #23..
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City Council, October 8, 2024
First Amendment to the Agreement for Gallo Center for the Arts Lot 25 Discount Parking

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DISCUSSION:

The City and Gallo Center management met on July 2, 2024 to revisit discussions regarding employee parking for the non-profit organization and continue the use of the City’s Lot 25 to accommodate up to 30 parking permits on a first come first serve basis. The agreement for the First Amendment includes the following requirements:

1. The duration will be one-year from date of execution.

2. Monthly Permits will be paid on a quarterly basis.

3. Monthly Parking Permits will be $55.00 per month, which is a discount of $25 per month off the Council-approved regular rate of $80.00 per month.

4. A maximum of 30 permits will be issued.

5. Parking spaces are not reserved or guaranteed.

Staff recommends an increase of five dollars per parking permit to offset the City’s increasing overhead and maintenance costs associated with our surface lots. Staff also proposes to extend the term of the Agreement from July 1, 2024 to June 30, 2025. Parking Services staff, in partnership with the City’s Finance Department, will manage the monthly permits quarterly billing.

FISCAL IMPACT:

Revenue generated through this First Amendment with Gallo Center for the Arts Lot 25 Discount Parking is anticipated to be $19,800 annually, which will be an increase from last fiscal year by $1,800 annually.

The annual parking permits, to be displayed on the dashboards of the employees’ vehicles are covered through the Parking Services Enterprise Fund 4000-53250-43702 which is consistent with monthly permit holders.

COMMITTEE RECOMMENDATION:

This item was presented to the Finance Committee on August 26, 2024, and was recommended to forward to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the First Amendment with Gallo Center for the Arts, Modesto, CA for Lot 25 employee discounted parking, increasing the Agreement amount by five dollars per parking permit per month, and extending the term of the Agreement from July 1, 2024 to June 30, 2025, and authorizing the City Manager, or his designee, to execute the Amendment. #23..
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City Council, October 8, 2024
First Amendment to the Agreement for Gallo Center for the Arts Lot 25 Discount Parking

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Approved by:

Bill Sandhu, Director of Public Works
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. First Amendment

3. Original Agreement

4. ASH Letter of Termination

5. Signed Council Resolution No. 2022-309
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MODESTO CITY COUNCIL
RESOLUTION NO. 2024-XX

RESOLUTION APPROVING THE FIRST AMENDMENT WITH GALLO
CENTER FOR THE ARTS, MODESTO, CA FOR LOT 25 EMPLOYEE

DISCOUNTED PARKING, INCREASING THE AGREEMENT AMOUNT BY

FIVE DOLLARS PER PARKING PERMIT PER MONTH, AND EXTENDING THE TERM OF THE AGREEMENT FROM JULY 1, 2024 TO JUNE 30, 2025,

AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO

EXECUTE THE AMENDMENT
WHEREAS, the Gallo Center for the Arts is located in the downtown core of Modesto. The Gallo Center for the Arts is operated by the non-profit organization Gallo Center. Gallo Center employs stagehands, customer service representatives, management and several others that keep the acquisition of performance shows, set-ups, and teardowns for public shows; and
WHEREAS, Gallo Center employees have previously had access to surface parking lot # 25 under a previous agreement with American Specialty Healthcare (ASH); and
WHEREAS, the Gallo Center for the Arts is in the downtown core of Modesto.

The Gallo Center negotiated a sub-agreement with ASH to use 25 parking permits during day use and an additional five permits for evening use in the City Parking Lot #25 which is on the corner of 9th and I streets. On July 12, 2022, by Resolution 2022-309, Council approved the agreement with Gallo Center for the Arts for a two-year term retroactive to July 1, 2022 through June 30, 2024, for discounted employee parking in Lot 25 with annual parking permits to be paid on a quarterly basis; and WHEREAS, the City and Gallo Center management met on July 2, 2024 to revisit discussions regarding employee parking for the non-profit organization and continue the use of the City’s Lot 25 to accommodate up to 30 parking permits on a first come first serve basis; and
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WHEREAS, staff recommends an increase of five dollars per parking permit to offset the City’s increasing overhead and maintenance costs associated with our surface lots. Staff also proposes to extend the term of the Agreement from July 1, 2024 to June 30, 2025; and
WHEREAS, this discount will provide parking for the non-profit employees. It will also further enhance the partnership between the City and Gallo Center for the Arts; and
WHEREAS, Parking Services staff, in partnership with the City’s Finance Department will manage the monthly permits quarterly billing. Gallo Center will pay for the parking permits on a quarterly basis.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the First Amendment with Gallo Center for the Arts, Modesto, CA for Lot 25 employee discounted parking increasing the Agreement amount by five dollars per parking permit per month and extending the term of the Agreement from July 1, 2024 to June 30, 2025.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to execute the First Amendment with Gallo Center for the Arts, in a form approved by the City Attorney.
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The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 8th day of October 2024, by Councilmember ________, who moved its adoption, which motion being duly seconded by Councilmember ______, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _____________________________
JOSE M. SANCHEZ, City Attorney
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FIRST AMENDMENT TO THE AGREEMENT FOR DISCOUNTED EMPLOYEE

PARKING

GALLO CENTER FOR THE ARTS
(Lot 25, corner of 9th and I Streets, Modesto, California) This AGREEMENT (“Agreement”), dated _______________ , 2024 for reference purposes, is by and between the City of Modesto, a municipal corporation, hereinafter referred to as “Modesto”, and the Gallo Center for the Arts, a 501(c)(3) non-profit organization, hereinafter referred to as “Gallo Center.” The Effective Date of this Agreement shall be retroactive to July 1, 2024.

Recitals
A. WHEREAS, Modesto manages public parking facilities commonly referred to as Parking Services; and
B. WHEREAS, Modesto owns the real property commonly referred to as Off-Street Parking Lot No. 25 (“Lot 25”) located on the corner of 9th and I Streets, Modesto, California 95354 and utilizes Parking Services Enterprise (“Parking Fund”) funds for operation and maintenance of the parking facilities; and
C. WHEREAS, Gallo Center and Modesto desire to enter into this Agreement whereby Gallo Center, requests to purchase discounted employee annual parking permits as set forth in this Agreement; and
D. WHEREAS, operation and maintenance of the off-street parking lot is funded in part by pay-by-space user fees; and
E. WHEREAS, Modesto and the Gallo Center have entered into a temporary use agreement, for the month of July, 2024 herewith, whereby Gallo Center will purchase discounted employee parking permits for Lot 25 from Modesto; and
F. WHEREAS, Modesto, as the lessor, will retain control over the property and the site will continue to be used for its authorized and intended purpose of an off-street parking lot; and
G. WHEREAS, Modesto and Gallo Center desire to enter into an agreement for discounted employee parking on the terms and conditions contained herein.

Agreement
NOW, THEREFORE, in consideration of the terms and conditions set forth herein, Modesto and the Gallo Center do hereby agree as follows:
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Section 1. Discounted Employee Parking Permits. Gallo Center shall purchase the discounted employee parking permits with the terms and conditions set forth in Exhibit “A” (“Use of Permits”).

Section 2. Term. The Term of this Agreement shall be for one (1) year commencing on July 1, 2024 (the “Commencement Date”) and expires on June 30, 2025 (the “Term”) unless this Agreement is sooner terminated as provided herein.

Section 3. Method of Payment.

3.1. Annual Permits. Each quarter, Gallo Center shall submit payment to Modesto Finance Department for the next quarter’s use of the off-street parking. Any and all Gallo Center funds received by Modesto for the use of the parking shall be deposited into the Parking Services Enterprise Fund to pay in-part for the operation and maintenance of the parking facilities.

3.2. Termination of Agreement. If this Agreement is terminated by either party, Gallo Center and Modesto shall mutually agree on when the parking lot shall return to pay-per-space by the employees. Once all Gallo Center paid time have been used, this Agreement shall terminate and Authority shall have no further liability or obligation to Modesto.

3.3. Invoices. Gallo Center shall make payment to Modesto within thirty-five (35) calendar days of receipt of an acceptable invoice. Payment shall be based on the monthly cost aggregated to a quarterly total. All invoices shall be submitted in duplicate; including the original and one copy of all invoices, not more than once a quarter, and shall be made in writing and delivered, mailed, or emailed to Gallo Center as follows:

Gallo Center for the Arts
1000 I Street
Modesto, CA 95354
Email: [email protected]
Attention: Al Poulus
Section 4. Termination.

4.1. Either party may terminate this Agreement in whole or in part at any time prior to completion of the use of permits specified in Exhibit “A” upon thirty (30) calendar days written notice to the other party. Upon receipt of written notice of such termination, the parties shall comply with the provisions of Section 3.3.

4.2. This Agreement shall terminate automatically upon the bankruptcy or insolvency of either party.
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Section 5. Joint Venture. It is mutually understood and agreed that nothing in this Agreement is intended or shall be construed as in any way creating or establishing the relationship of a joint venture, co-partner or co-venturer between the parties or as constituting Gallo Center as an agent or representative of Modesto.

Section 6. Indemnification.

6.1. Gallo Center’s Indemnification of Modesto. Gallo Center shall hold Modesto, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities and damages from every cause, including but not limited to injury to person or property or wrongful death, with the indemnity to include reasonable attorney’s fees, and all costs and expense, arising directly or indirectly out of any act or omission of Gallo Center, whether or not the act or omission arises from the negligence or other liability of Modesto, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under this Agreement.

Section 7. Assignment of Agreement. Gallo Center shall not assign this Agreement, or any part thereof, without prior written consent of Modesto.

Section 8. Laws and Regulations. Gallo Center shall comply with any and all laws, statutes, ordinances, rules, regulations, and procedural requirements of the Federal, State or local government, and any agency of such government which relate to or in any manner affect the performance of this Agreement.

Section 9. Notices. Any notice, communication, amendments, additions, or deletions to this Agreement including change of address of either party during the term of this Agreement which Modesto or Gallo Center shall be required or may desire to make, shall be in writing and may be personally served, mailed by prepaid, certified or registered mail or overnight courier, or transmitted by facsimile or electronic mail transmission, to the respective parties as follows:

To Modesto:

City of Modesto
1010 10th St
Modesto, CA 95354
Email: [email protected]
Attention: City Manager
To Gallo Center:

Gallo Center
1000 I Street
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Modesto, CA 95354
Email: [email protected]
Attention: Al Poulus
Any such notice or communication shall be deemed to have been given on (i) the day such notice or communication is personally delivered, (ii) three (3) days after such notice or communication is mailed by prepaid certified or registered mail, (iii) one (1) business day after such notice or communication is sent by overnight courier, or (iv) the day such notice or communication is faxed or sent electronically, provided that the sender has received a confirmation of such fax or electronic transmission.

Section 10. Force Majeure. The time for performance of an obligation other than the payment of compensation under this Agreement will be extended for the period during which a party is prevented from performing by acts of God, government actions, fire or other casualty, or other force or event beyond the reasonable control of that party including, but not limited to, governmental restrictions, laws, regulation, controls, requirements decrees, mandates or order requiring individuals to “shelter in place,” “stay at home” or otherwise quarantine, or requiring businesses to close or be limited in operations.

Section 11. Waiver. Waiver of any default by either party to this Agreement shall not be deemed a waiver of any subsequent default. Waiver or breach of any provision of this Agreement shall not be deemed to be a waiver of any other or subsequent breach and shall not be construed to be a modification of the terms of this Agreement unless modified pursuant to the terms of this Agreement.

Section 12. Severability. If any portion of this Agreement or application thereof to any person or circumstance shall be declared invalid by a court of competent jurisdiction or if it is found in contravention of any Federal, State, or local statutes, ordinances, or regulations the remaining provisions of this Agreement or the application thereof shall not be invalidated thereby and shall remain in full force and effect to the extent that the provisions of this Agreement are severable.

Section 13. Amendment. This Agreement, including any exhibits hereto, shall not be amended, except in writing signed by the parties. Any amendment or addendum to this Agreement shall expressly refer to this Agreement.

Section 14. Entire Agreement. This Agreement, with its exhibits, contains the sole and only agreement of the parties. Any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement are of no force and effect.

Section 15. Governing Law. This Agreement is entered into and shall be construed and interpreted in accordance with the laws of the State of California.

Section 16. Venue/Jurisdiction. Venue for any action brought by either party to this Agreement against the other to enforce the terms and conditions thereof shall be maintained in Stanislaus County, California, in the proper court having jurisdiction. Each party irrevocably consents to the jurisdiction of each such court.
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Section 17. No Third Party Benefit. This Agreement is a contract between Modesto and Gallo Center and nothing herein is intended to create any third party benefit.

Section 18. Number and Gender. All words used herein in the singular number shall include the plural and the present tense shall include the future and the masculine gender shall include the feminine and neutral.

Section 19. Construction. The language of each and all paragraphs, terms, and/or provisions of this Agreement shall, in all cases and for any and all purposes, be construed as a whole, according to its fair meaning, and not for or against any party hereto and with no regard whatsoever to the identity of status of any person or persons who drafted all or a portion of this Agreement.

Section 20. Counterparts and Electronic Signatures.

20.1. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument.

20.2. Each party agrees that this Agreement and any other documents to be delivered in connection herewith may be electronically signed, and that any electronic signatures appearing on this Agreement or such other documents are the same as handwritten signatures for the purposes of validity, enforceability, and admissibility. *** Signatures contained on next page ***
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EXHIBIT “A”

USE OF PERMITS
Gallo Center shall obtain Parking Permits from Modesto for use of parking facility located on the corner of 9th and I Streets, referenced as LOT #25.

I. Annual Parking Permit: Modesto shall make available for purchase 30 parking permits pressure wash the Transit Center and Amtrak Station and invoice Authority monthly as set forth in this section.

A. Fiscal Year 2024-2025 (01 July 2024 through 30 June 2025)

1. 30 permits numbered 1060 through 1089

2. Employees will need to display permits on dashboard of vehicle

3. Parking space is not reserved

4. Parking space is not guaranteed, first-come first-served

5. Parking is at the risk of the user, Modesto does not take responsibility of fire, theft, vehicle damage or any article therein
B. Financials

1. The permit is for a single vehicle per permit and costs are:
i. Discounted employee parking permit: $660/year or $55/month per permit; ii. October 2024 will be available from City of Modesto Finance, 1010 10th Street, Suite 2100, Modesto, CA 95354, $1,650 will be due upon pick-up for the initial month
iii. Quarterly payments will be invoiced to Gallo Center

1. July 2024 and August 2024 will be invoiced separately

2. Gallo Center employee discounted parking: $19,800/year, billed to Gallo Center quarterly at $4,950/quarter.
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Gallo Center for the Arts
1000 I Street.

Modesto, CA 95354
May 10, 2022
Re: Parking Agreement for Surface Lot 25 at 9th & I Street Dear Customer,
Effective October 6, 2021 the City of Modesto’s five (5) year agreement for parking with American Specialty Healthcare, Inc. (ASH) came to an end. This agreement provided employee parking permits for Lot 25 which is located at 9th and I Street. These permits were valid for use between the hours of 6:00 a.m. and 6:00 p.m., Monday through Friday.

After discussions with the Gallo Center for the Arts, the City has agreed to extend the deadline to purchase parking permits for this lot to May 24, 2022. After this date, the original hang tags will no longer be honored, and a monthly pass must be displayed or pay by the hour if choosing not to obtain a pass. If you are interested in purchasing the parking permits, please contact our office by calling (209) 571-5140, Monday through Friday, between the hours of 8:30 a.m. to 4:30 p.m.

We are committed to delivering excellent customer service and count on citizens like you to help us achieve that goal. If you have further questions or need additional information, please contact us at (209) 571-5140.

Sincerely,
City of Modesto
Citation Processing Division

FINANCE DEPARTMENT
Citation Processing Division
P.O. Box 3063
Modesto, California 95353
209.571-5140
Modestogov.com
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07/12/2022/PW/PCrowley/Item 16 1 2022-309

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-309

RESOLUTION APPROVING AN AGREEMENT WITH GALLO CENTER FOR THE ARTS FOR A TWO-YEAR TERM RETROACTIVE TO JULY 1, 2022 THROUGH JUNE 30, 2024 FOR DISCOUNTED EMPLOYEE PARKING IN LOT 25 WITH ANNUAL PARKING PERMITS TO BE PAID ON A QUARTERLY

BASIS, AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO

EXECUTE THE AGREEMENT
WHEREAS, the Gallo Center for the Arts is located in the downtown core of Modesto. The Gallo Center for the Arts is operated by the non-profit organization Gallo Center. Gallo Center employs stagehands, customer service representatives, management and several others that keep the acquisition of performance shows, set-ups and teardowns for public shows; and
WHEREAS, Gallo Center employees have previously had access to surface parking lot # 25 under a previous agreement with American Specialty Healthcare (ASH); and
WHEREAS, the agreement with ASH terminated on October 6, 2022; and WHEREAS, Gallo Center and City of Modesto discussed a direct agreement for discounted employee parking in surface Lot # 25; and
WHEREAS, there will be 35 permits issued covering July 1, 2022 through June 30, 2023; and
WHEREAS, there will be at least 35 permits issued covering July 1, 2023 through June 30, 2024, not to exceed 40 parking permits at a rate of $50, any new additions or substantive changes to amount of parking permits may be authorized by the City Manager or his designee; and
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07/12/2022/PW/PCrowley/Item 16 2 2022-309
WHEREAS, this discount will provide parking for the non-profit employees. It will also further enhance the partnership between the City and Gallo Center for the Arts; and
WHEREAS, Gallo Center will pay for the parking permits on a quarterly basis.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a $50 monthly rate for Gallo Center for the Arts, a 501 (c)(3) Non-Profit Organization to purchase annual parking lot passes for Lot # 25.

BE IT FURTHER RESOLVED that the discount will be limited to a two year agreement from July 1, 2022 through June 30, 2024, and will be specific to the Lot # 25 surface parking lot located on the corner of 9th and I streets, and shall not extend to other lots or parking garages; that to obtain the discounted annual pass, the Gallo Center must acquire the permits from City of Modesto Finance Department; that no more than 40 permits will be issued annually unless otherwise authorized by the City Manager; and that parking spaces will not be reserved or guaranteed.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to execute the Agreement, in a form approved by the City Attorney. #23..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 8, 2024
Date: September 11, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: First Amendment to Water Well Lease Agreements CONTACT: Manuel Martinez, Acting Water Division Manager, [email protected], 209-342-4592
DESCRIPTION:

Consider approving the First Amendment with Beard Land Improvement Company and Modesto and Empire Traction Company for the Water Well/Right of Way Lease Agreements, increasing the amount by $2,764,332 and extending the term of the Agreement from December 31, 2024 to December 31, 2034. (Funding Source: Water Fund)
STRATEGIC PLAN ELEMENT:

The recommended action supports the 2020-2025 City of Modesto Strategic Plan Initiatives, Goal D: Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

When the City of Modesto acquired the Del Este water system, the sale included well sites that were leased from Beard and M&ET. The wells at these sites are necessary for water supply and distribution within the Modesto regional water system.

On October 28, 2014, by Resolution 2014-430, Council approved a lease agreement with Beard Land Improvement Company (“Beard”) for the water well site on Spenker Avenue (Well 225) for a ten-year term at an annual cost of $30,000, increasing annually by the Consumer Price Index (CPI) for the San Francisco Bay Area.

On October 28, 2014, by Resolution 2014-431, Council approved a lease agreement with Beard for the water well site on Farrar Avenue (Well 279) for a ten-year term at an annual cost of $30,000, increasing annually by the Consumer Price Index (CPI) for the San Francisco Bay Area.

On October 28, 2014, by Resolution 2014-432, Council approved a lease agreement with Modesto and Empire Traction Company (“M&ET”) for the water well sites on Yosemite Boulevard #24..
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City Council Meeting, October 8, 2024
First Amendment to Water Well Lease Agreements

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(Wells 291 and 292) for a ten-year term at an annual cost of $30,000 per well, increasing annually by the Consumer Price Index (CPI) for the San Francisco Bay Area.

On October 28, 2014, by Resolution 2014-433, Council approved a lease agreement with Modesto and Empire Traction Company (“M&ET”) for the water well site on South McClure Road (Well 308) for a ten-year term at an annual cost of $30,000, increasing annually by the Consumer Price Index (CPI) for the San Francisco Bay Area.

On October 23, 2018, by Resolution 2018-482, Council approved an annual rate increase and property tax payments for M&ET Wells 291, 292, and 308 in the amount of $10,344 and a total not to exceed $720,145 through December 2024.

On October 23, 2018, by Resolution 2018-485, Council approved an annual rate increase and property tax payments for Beard Wells 225 and 279 in the amount of $14,098 and a total not to exceed $489,067 through December 2024.

DISCUSSION:

The Water Division currently leases five wells on four sites which are listed below, and staff recommends the continuation of these lease agreements:
 Well 225 on Spenker Avenue (referred to by Beard as Well 25 Budget Pack)  Well 279 on Farrar Avenue (referred to by Beard as Well 79 Farrar Pump Lot)  Wells 291 and 292 on Yosemite Boulevard (referred to by M&ET as Wells 91 and 92 – Mariposa E & W Pump Lot)
 Well 308 on S. McClure Road (referred to by M&ET as Well 1 S. McClure Pump Lot) FISCAL IMPACT:

The monthly rate for each well began in 2015 at $2,500 and increased annually to $3,352 in 2024, the final year of the lease. Expenditures for the water well lease agreements over the past ten years (2014 to 2024) are listed below:

Calendar Year BEARD M&ET Total
2015 $ 60,503 $ 90,000 $ 150,503
2016 $ 62,013 $ 92,304 $ 154,317
2017 $ 64,177 $ 93,816 $ 157,993
2018 $ 65,427 $ 96,336 $ 161,763
2019 $ 69,113 $ 98,424 $ 167,537
2020 $ 70,886 $ 100,152 $ 171,038
2021 $ 71,642 $ 101,304 $ 172,946
2022 $ 73,873 $ 110,780 $ 184,653
2023 $ 79,419 $ 117,427 $ 196,846
2024 (Jan to Jul) $ 46,926 $ 70,388 $ 117,314
Total Paid $ 663,979 $ 970,931 $ 1,634,910
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City Council Meeting, October 8, 2024
First Amendment to Water Well Lease Agreements

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Payments Remaining
(Aug-Dec 2024) $ 33,518 $ 50,277 $ 83,795
Grand Total,
2015-2024 $ 697,497 $ 1,021,208 $ 1,718,705
*includes property tax
The terms proposed by Beard and M&ET are listed below, with the new rate starting at $4,000 per well per month. This is a total increase of 19% from the current rate. After the first year, the rate will increase by 3% annually for the remainder of the lease. The Beard properties, Wells 225 and 279, will also have County property taxes assessed at a varying rate each year; this expense will be in addition to the lease amount.

Lease Terms Annual Amount
(Per Well)
January 1, 2025 – December 31, 2025 $48,000
January 1, 2026 – December 31, 2026 $49,440
January 1, 2027 – December 31, 2027 $50,923
January 1, 2028 – December 31, 2028 $52,451
January 1, 2029 – December 31, 2029 $54,024
January 1, 2030 – December 31, 2030 $55,645
January 1, 2031 – December 31, 2031 $57,315
January 1, 2032 – December 31, 2032 $59,034
January 1, 2033 – December 31, 2033 $60,805
January 1, 2034 – December 31, 2034 $62,629
Total Lease Cost (Per Well) Over Ten Years: $550,266
Property Tax (Beard Wells) Over Ten Years: $13,000
Total Over Ten Years (Beard), 2 Wells + Property Tax $1,113,533 Total Over Ten Years (M&ET), 3 Wells $1,650,799
GRAND TOTAL Over Ten Years, Combined (Beard and M&ET) $2,764,332 Funds are budgeted in the Water Fund account 4100-45050-53070, Rental of Real Property.

COMMITTEE RECOMMENDATION:

This item was considered by the Economic Development Committee at the September 9, 2024 meeting, where it was recommended that this item be forwarded to Council.

RECOMMENDED COUNCIL ACTION:

Staff Recommendation:

Resolution approving the First Amendment to the Water Well/Right of Way Lease Agreement with Beard Land Improvement Company for the water well site on Spenker Avenue for City Well 225 (Beard Well 25 Budget Pack) and well site on Farrar Avenue for City Well 279 (Beard Well Farrar Pump Lot), increasing the amount by $1,113,533 over ten years, and extending the term of the Agreement from December 31, 2024 to December 31, 2034; and authorizing the City Manager, or his designee to execute the Amendment.

Resolution approving the First Amendment to the Water Well/Right of Way Lease Agreement with Modesto and Empire Traction Company (M&ET) for the water well site on Yosemite Boulevard for City Wells 291 and 292 (M&ET Well 91 and 92 – Mariposa E. & W. Pump Lot) and water well #24..
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City Council Meeting, October 8, 2024
First Amendment to Water Well Lease Agreements

Page 4 of 4 ends

site on S. McClure Road for City Well 308 (M&ET Well 1 – S. McClure Pump Lot), increasing the amount by $1,650,799 over ten years, and extending the term of the Agreement from December 31, 2024 to December 31, 2034; and authorizing the City Manager, or his designee to execute the Amendment.

Approved by:

William Wong, Director of Utilities
Joseph P. Lopez, City Manager
Attachments:

1. Resolution – Beard Well Leases

2. Resolution – M&ET Well Leases

3. First Amendment to Well Leases, Beard (Well 225, Well 279)

4. First Amendment to Well Leases, M&ET (Well 308, Wells 291-292)

5. Original Beard Lease, Well 225

6. Original Beard Lease, Well 279

7. Original M&ET Lease, Well 308

8. Original M&ET Lease, Well 291-292
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XXX 1 2024-XXX

MODESTO CITY COUNCIL
RESOLUTION NO. 2024-XXX

RESOLUTION APPROVING THE FIRST AMENDMENT TO THE WATER

WELL/RIGHT OF WAY LEASE AGREEMENT WITH BEARD LAND

IMPROVEMENT COMPANY FOR THE WATER WELL SITE ON SPENKER
AVENUE FOR CITY WELL 225 (BEARD WELL 25 BUDGET PACK) AND WELL SITE ON FARRAR AVENUE FOR CITY WELL 279 (BEARD WELL FARRAR PUMP LOT), INCREASING THE AMOUNT BY $1,113,533 OVER TEN YEARS, AND EXTENDING THE TERM OF THE AGREEMENT FROM DECEMBER 31, 2024 TO DECEMBER 31, 2034 ; AND AUTHORIZING THE CITY MANAGER,

OR HIS DESIGNEE TO EXECUTE THE AMENDMENT
WHEREAS, in 1995 the City of Modesto acquired the former Del Este Water Company, and the sale included well sites that were leased from Beard Land Improvement Company and Modesto and Empire Traction Company, and
WHEREAS, the wells at these sites are necessary for water supply and distribution within the Modesto regional water system, and
WHEREAS, on October 28, 2014, by Resolution 2014-430, Council approved a lease agreement with Beard Land Improvement Company (“Beard”) for the water well site on Spenker Avenue (Well 225) for a ten-year term at an annual cost of $30,000, increasing annually by the Consumer Price Index (CPI) for the San Francisco Bay Area, and WHEREAS, on October 28, 2014, by Resolution 2014-431, Council approved a lease agreement with Beard for the water well site on Farrar Avenue (Well 279) for a tenyear term at an annual cost of $30,000, increasing annually by the Consumer Price Index (CPI) for the San Francisco Bay Area, and
WHEREAS, on October 23, 2018, by Resolution 2018-485, Council approved an annual rate increase and property tax payments for Beard Wells 225 and 279 in the amount of $14,098 and a total not to exceed $489,067 through December 2024, and #24..
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XXX 2 2024-XXX
WHEREAS, the City of Modesto Water Division is requesting a First Amendment to the lease agreements with Beard Land Improvement Company to extend the term another ten years, and
WHEREAS, the proposed amendment to the lease agreements have a starting rate of $4,000.00 per month per well, with an annual increase of 3% for the remainder of the lease, and not to exceed $1,113,533.00 over ten years for both well sites, and WHEREAS, in addition to the monthly lease payment, the City will also be responsible for paying the County property tax for Wells 225 and 279, which will be at a varying rate each year and not to exceed $13,000.00 over ten years for both well sites, and WHEREAS, the proposed amendment to the lease agreements will extend the term from December 31, 2024 to December 31, 2034, and
WHEREAS, funds are budgeted in the Water Fund account 4100-45050-53070, Rental of Real Property.

NOW, THEREFORE BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves the First Amendment to the Water Well/Right of Way Lease Agreement with Beard Land Improvement Company for the water well site on Spenker Avenue for City Well 225 (Beard Well 25 Budget Pack) and well site on Farrar Avenue for City Well 279 (Beard Well Farrar Pump Lot), increasing the amount by $1,113,533 over ten years, and extending the term of the Agreement from December 31, 2024 to December 31, 2034.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the lease agreement and any other related documents necessary to carry out the purpose and intent of this Resolution, in a form approved by the City Attorney. #24..
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XXX 3 2024-XXX
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 8th day of October, 2024, by Councilmember XXX who moved its adoption, which motion being duly seconded by Councilmember XXX, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: ______________________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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XXX 1 2024-XXX

MODESTO CITY COUNCIL
RESOLUTION NO. 2024-XXX

RESOLUTION APPROVING THE FIRST AMENDMENT TO THE WATER

WELL/RIGHT OF WAY LEASE AGREEMENT WITH MODESTO AND EMPIRE

TRACTION COMPANY (M&ET) FOR THE WATER WELL SITE ON
YOSEMITE BOULEVARD FOR CITY WELLS 291 AND 292 (M&ET WELL 91 AND 92 – MARIPOSA E. & W. PUMP LOT) AND WATER WELL SITE ON S.

MCCLURE ROAD FOR CITY WELL 308 (M&ET WELL 1 – S. MCCLURE PUMP LOT), INCREASING THE AMOUNT BY $1,650,799 OVER TEN YEARS, AND EXTENDING THE TERM OF THE AGREEMENT FROM DECEMBER 31, 2024 TO DECEMBER 31, 2034; AND AUTHORIZING THE CITY MANAGER, OR HIS

DESIGNEE TO EXECUTE THE AMENDMENT
WHEREAS, in 1995 the City of Modesto acquired the former Del Este Water Company, and the sale included well sites that were leased from Modesto and Empire Traction Company and Beard Land Improvement Company, and WHEREAS, the wells at these sites are necessary for water supply and distribution within the Modesto regional water system, and
WHEREAS, on October 28, 2014, by Resolution 2014-432, Council approved a lease agreement with Modesto and Empire Traction Company (“M&ET”) for the water well sites on Yosemite Boulevard (Wells 291 and 292) for a ten-year term at an annual cost of $30,000 per well, increasing annually by the Consumer Price Index (CPI) for the San Francisco Bay Area, and
WHEREAS, on October 28, 2014, by Resolution 2014-433, Council approved a lease agreement with Modesto and Empire Traction Company (“M&ET”) for the water well site on South McClure Road (Well 308) for a ten-year term at an annual cost of $30,000, increasing annually by the Consumer Price Index (CPI) for the San Francisco Bay Area, and
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XXX 2 2024-XXX
WHEREAS, on October 23, 2018, by Resolution 2018-482, Council approved an annual rate increase and property tax payments for M&ET Wells 291, 292, and 308 in the amount of $10,344 and a total not to exceed $720,145 through December 2024, and WHEREAS, the City of Modesto Water Division is requesting a First Amendment to the lease agreements with Modesto and Empire Traction Company for another ten-year term, and
WHEREAS, the proposed amendment to the lease agreements have a starting rate of $4,000.00 per month per well, with an annual increase of 3% for the remainder of the lease, and not to exceed $1,650,799.00 over ten years for all three well sites, and WHEREAS, the proposed amendment to the lease agreements will extend the term from December 31, 2024 to December 31, 2034, and
WHEREAS, funds are budgeted in the Water Fund account 4100-45050-53070, Rental of Real Property.

NOW, THEREFORE BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves the First Amendment to the Water Well/Right of Way Lease Agreement with Modesto and Empire Traction Company (M&ET) for the water well site on Yosemite Boulevard for City Wells 291 and 292 (M&ET Well 91 and 92 – Mariposa E. & W. Pump Lot) and water well site on S. McClure Road for City Well 308 (M&ET Well 1 – S. McClure Pump Lot), increasing the amount by $1,650,799 over ten years, and extending the term of the Agreement from December 31, 2024 to December 31, 2034.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the lease agreement and any other related documents necessary to carry out the purpose and intent of this Resolution, in a form approved by the City Attorney. #24..
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XXX 3 2024-XXX
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 8th day of October, 2024, by Councilmember XXX who moved its adoption, which motion being duly seconded by Councilmember XXX, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: ______________________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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1 42103585.1/516658.0001

FIRST AMENDMENT TO WATER WELL/RIGHT-OF-WAY LEASE

THIS FIRST AMENDMENT TO WATER WELL/RIGHT-OF-WAY LEASE
(“Amendment”) is made as of February 7, 2024 (the “Effective Date”) between BEARD LAND IMPROVEMENT COMPANY, a California corporation (“Lessor”), and the CITY OF MODESTO, a California municipal corporation (“Lessee”).

RECITALS
A. Lessor and Lessee entered into a Water Well/Right-of-Way Lease dated August 4, 2014 (the “Lease”) under which Lessor leases to Lessee and Lessee leases from Lessor approximately 10,507 square feet commonly known as the land comprising Well Site No. 25, Budget Pack Pump Lot, located at Spenker Avenue, Modesto, Stanislaus County, California 95354, as more particularly described in the Lease as the Premises.

B. Lessor and Lessee desire to amend the Lease to extend the term of the Lease on the terms and conditions set forth herein.

AMENDMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee do hereby agree as follows:

1. Definitions. All capitalized terms used, but not defined, in this Amendment shall have the meaning ascribed to them in the Lease.

2. Term. The term of the Lease is hereby extended for ten (10) years commencing on January 1, 2025, and ending on December 31, 2034 (the “Extended Term”). “Term,” as used in the Lease and this Amendment, shall include the Extended Term.

3. Monthly Rent. Lessee shall pay to Lessor, as monthly Rent for the Premises during the Extended Term, monthly payments in advance on the first day of each month as follows:

Period Monthly Rent
January 1, 2025 – December 31, 2025 $4,000.00
January 1, 2026 – December 31, 2026 $4,120.00
January 1, 2027 – December 31, 2027 $4,243.60
January 1, 2028 – December 31, 2028 $4,370.91
January 1, 2029 – December 31, 2029 $4,502.04
January 1, 2030 – December 31, 2030 $4,637.10
January 1, 2031 – December 31, 2031 $4,776.21
January 1, 2032 – December 31, 2032 $4,919.50
January 1, 2033 – December 31, 2033 $5,067.08
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January 1, 2034 – December 31, 2034 $5,219.09
The provisions in Section 5.4 of the Lease shall not be used to adjust monthly Rent during the Extended Term.

4. Additional Rent and Other Amounts Owed by Lessee. Nothing in this Amendment shall be interpreted to relieve, modify or defer Lessee’s obligation to pay any amounts owed by Lessee under the Lease, or otherwise owed by Lessee to Lessor, including but not limited to Real Property Tax or utilities applicable to the Premises.

5. Effect of Amendment. Except as expressly amended herein, all other terms and conditions of the Lease shall remain in full force and effect. The Lease, as amended hereby, constitutes the entire agreement of the parties and no further modification of the Lease shall be binding and effective unless evidenced by an agreement, in writing, signed by both Lessor and Lessee. In the case of any inconsistency between the provisions of the Lease and this Amendment, the provisions of this Amendment shall govern and control.

6. Brokers. Lessor and Lessee hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the extension of the term or the other terms and conditions set forth herein and that they know of no real estate broker or agent who is entitled to a commission in connection with this Amendment. Each party agrees to indemnify, protect and defend the other party against, and hold the other party harmless from, any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent occurring by, through, or under the indemnifying party.

7. Authority. Each signatory of this Amendment hereby represents that he or she has the authority to execute and deliver the same on behalf of the party for which such signatory is acting. Lessee represents that it has not made any assignment, sublease, transfer, conveyance of the Lease or any interest therein or in the Premises.

8. Miscellaneous. The Recitals are hereby incorporated into the terms of this Amendment. This Amendment may be executed in multiple counterparts each of which shall be deemed an original but which together shall constitute one agreement. This Amendment may be executed and/or delivered via email or other electronic means with the same force and effect, and if so executed and/or delivered shall be effective, as if an original of this Amendment was executed and delivered.
[signature page follows]
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IN WITNESS WHEREOF the parties hereto have executed this Amendment as of the date first set forth above.

LESSOR: LESSEE:

BEARD LAND IMPROVEMENT
COMPANY, a California corporation
CITY OF MODESTO, a California municipal
corporation
By:

Its:

Dated:

By:

Its:

Dated:

By:

Its:

Dated:

APPROVED AS TO FORM:

By:

Its:

Dated:
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1 42103830.1/516658.0001

FIRST AMENDMENT TO WATER WELL/RIGHT-OF-WAY LEASE

RECITALS
A. Lessor and Lessee entered into a Water Well/Right-of-Way Lease dated August 4, 2014 (the “Lease”) under which Lessor leases to Lessee and Lessee leases from Lessor approximately 21,344 square feet commonly known as the land comprising Well Site No. 79, Farrar Pump Lot, located at Farrar Avenue, Modesto, Stanislaus County, California 95354, as more particularly described in the Lease as the Premises.

B. Lessor and Lessee desire to amend the Lease to extend the term of the Lease on the terms and conditions set forth herein.

AMENDMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee do hereby agree as follows:

1. Definitions. All capitalized terms used, but not defined, in this Amendment shall have the meaning ascribed to them in the Lease.

3. Monthly Rent. Lessee shall pay to Lessor, as monthly Rent for the Premises during the Extended Term, monthly payments in advance on the first day of each month as follows:

Period Monthly Rent
January 1, 2025 – December 31, 2025 $4,000.00
January 1, 2026 – December 31, 2026 $4,120.00
January 1, 2027 – December 31, 2027 $4,243.60
January 1, 2028 – December 31, 2028 $4,370.91
January 1, 2029 – December 31, 2029 $4,502.04
January 1, 2030 – December 31, 2030 $4,637.10
January 1, 2031 – December 31, 2031 $4,776.21
January 1, 2032 – December 31, 2032 $4,919.50
January 1, 2033 – December 31, 2033 $5,067.08
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January 1, 2034 – December 31, 2034 $5,219.09
The provisions in Section 5.4 of the Lease shall not be used to adjust monthly Rent during the Extended Term.

8. Miscellaneous. The Recitals are hereby incorporated into the terms of this Amendment. This Amendment may be executed in multiple counterparts each of which shall be deemed an original but which together shall constitute one agreement. This Amendment may be executed and/or delivered via email or other electronic means with the same force and effect, and if so executed and/or delivered shall be effective, as if an original of this Amendment was executed and delivered.
[signature page follows]
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3 42103830.1/516658.0001
IN WITNESS WHEREOF the parties hereto have executed this Amendment as of the date first set forth above.

LESSOR: LESSEE:

BEARD LAND IMPROVEMENT
COMPANY, a California corporation
CITY OF MODESTO, a California municipal
corporation
By:

Its:

Dated:

By:

Its:

Dated:

By:

Its:

Dated:

APPROVED AS TO FORM:

By:

Its:

Dated:
#24..
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1 42103935.1/516658.0001

FIRST AMENDMENT TO WATER WELL/RIGHT-OF-WAY LEASE

THIS FIRST AMENDMENT TO WATER WELL/RIGHT-OF-WAY LEASE
(“Amendment”) is made as of February 7, 2024 (the “Effective Date”) between MODESTO AND EMPIRE TRACTION COMPANY, a California corporation (“Lessor”), and the CITY OF MODESTO, a California municipal corporation (“Lessee”).

McClure Pump Lot, located at McClure Road, Modesto, Stanislaus County, California 95357, as more particularly described in the Lease as the Premises.

B. Lessor and Lessee desire to amend the Lease to extend the term of the Lease on the terms and conditions set forth herein.

AMENDMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee do hereby agree as follows:

1. Definitions. All capitalized terms used, but not defined, in this Amendment shall have the meaning ascribed to them in the Lease.

3. Monthly Rent. Lessee shall pay to Lessor, as monthly Rent for the Premises during the Extended Term, monthly payments in advance on the first day of each month as follows:

Period Monthly Rent
January 1, 2025 – December 31, 2025 $4,000.00
January 1, 2026 – December 31, 2026 $4,120.00
January 1, 2027 – December 31, 2027 $4,243.60
January 1, 2028 – December 31, 2028 $4,370.91
January 1, 2029 – December 31, 2029 $4,502.04
January 1, 2030 – December 31, 2030 $4,637.10
January 1, 2031 – December 31, 2031 $4,776.21
January 1, 2032 – December 31, 2032 $4,919.50
January 1, 2033 – December 31, 2033 $5,067.08
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January 1, 2034 – December 31, 2034 $5,219.09
The provisions in Section 5.4 of the Lease shall not be used to adjust monthly Rent during the Extended Term.

8. Miscellaneous. The Recitals are hereby incorporated into the terms of this Amendment. This Amendment may be executed in multiple counterparts each of which shall be deemed an original but which together shall constitute one agreement. This Amendment may be executed and/or delivered via email or other electronic means with the same force and effect, and if so executed and/or delivered shall be effective, as if an original of this Amendment was executed and delivered.
[signature page follows]
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3 42103935.1/516658.0001
IN WITNESS WHEREOF the parties hereto have executed this Amendment as of the date first set forth above.

LESSOR: LESSEE:

MODESTO AND EMPIRE TRACTION
COMPANY, a California corporation
CITY OF MODESTO, a California municipal
corporation
By:

Its:

Dated:

By:

Its:

Dated:

By:

Its:

Dated:

APPROVED AS TO FORM:

By:

Its:

Dated:
#24..
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1 42103863.1/516658.0001

FIRST AMENDMENT TO WATER WELL/RIGHT-OF-WAY LEASE

RECITALS
A. Lessor and Lessee entered into a Water Well/Right-of-Way Lease dated August 4, 2014 (the “Lease”) under which Lessor leases to Lessee and Lessee leases from Lessor approximately 63,196.48 square feet commonly known as the land comprising Well Site No. 91 & 92, Mariposa East and West Pump Lot, located at Mariposa Road, Modesto, Stanislaus County, California 95354, as more particularly described in the Lease as the Premises.

B. Lessor and Lessee desire to amend the Lease to extend the term of the Lease on the terms and conditions set forth herein.

AMENDMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee do hereby agree as follows:

1. Definitions. All capitalized terms used, but not defined, in this Amendment shall have the meaning ascribed to them in the Lease.

3. Monthly Rent. Lessee shall pay to Lessor, as monthly Rent for the Premises during the Extended Term, monthly payments in advance on the first day of each month as follows:

Period Monthly Rent
January 1, 2025 – December 31, 2025 $8,000.00
January 1, 2026 – December 31, 2026 $8,240.00
January 1, 2027 – December 31, 2027 $8,487.20
January 1, 2028 – December 31, 2028 $8,741.82
January 1, 2029 – December 31, 2029 $9,004.07
January 1, 2030 – December 31, 2030 $9,274.19
January 1, 2031 – December 31, 2031 $9,552.42
January 1, 2032 – December 31, 2032 $9,838.99
January 1, 2033 – December 31, 2033 $10,134.16
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January 1, 2034 – December 31, 2034 $10,438.19
The provisions in Section 5.4 of the Lease shall not be used to adjust monthly Rent during the Extended Term.

8. Miscellaneous. The Recitals are hereby incorporated into the terms of this Amendment. This Amendment may be executed in multiple counterparts each of which shall be deemed an original but which together shall constitute one agreement. This Amendment may be executed and/or delivered via email or other electronic means with the same force and effect, and if so executed and/or delivered shall be effective, as if an original of this Amendment was executed and delivered.
[signature page follows]
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IN WITNESS WHEREOF the parties hereto have executed this Amendment as of the date first set forth above.

LESSOR: LESSEE:

MODESTO AND EMPIRE TRACTION
COMPANY, a California corporation
CITY OF MODESTO, a California municipal
corporation
By:

Its:

Dated:

By:

Its:

Dated:

By:

Its:

Dated:

APPROVED AS TO FORM:

By:

Its:

Dated:
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[Budget Pack Pump Lot]
Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 Section 1. Definitions ........................................................................................................... 1 Section 2. Premises. ............................................................................................................ 1 Section 3. Rules and Regulations. ....................................................................................... 1 Section 4. Term. .................................................................................................................. 1 Section 5. Rent. ................................................................................................................... 1 Section 6. Security Deposit. ............................................................................................... 2 Section 7. Use. .................................................................................................................... 2 Section 8. Maintenance, Repairs and Alterations. ............................................................... 3 Section 9. Insurance; Indemnity. .......................................................................................... 4 Section 10. Damage or Destruction. .................................................................................... 6 Section 11. Real Property Taxes. ........................................................................................ 6 Section 12. Utilities & Janitorial Services. ............................................................................ 7 Section 13. Assignment and Subletting. .............................................................................. 7 Section 14. Environmental Provisions.................................................................................. 8 Section 15. Defaults; Remedies. ........................................................................................ 10 Section 16. Condemnation. ............................................................................................... 12 Section 17. Estoppel Certificate. ........................................................................................ 13 Section 18. Lessor’s Liability.............................................................................................. 13 Section 19. Severability. .................................................................................................... 14 Section 20. Interest on Past-due Obligations. .................................................................... 14 Section 21. Time of Essence. ............................................................................................ 14 Section 22. Additional Rent................................................................................................ 14 Section 23. Incorporation of Prior Agreements; Amendments. .......................................... 14 Section 24. Notices. ........................................................................................................... 15 Section 25. Waivers. .......................................................................................................... 15 Section 26. Cumulative Remedies. .................................................................................... 15

WATER WELL/RIGHT-OF-WAY

LEASE-INDEX
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 ii
Section 27. Covenants and Conditions. ............................................................................. 15 Section 28. Binding Effect; Choice of Law. ........................................................................ 15 Section 29. Subordination. ................................................................................................. 15 Section 30. Attorneys’ Fees............................................................................................... 16 Section 31. Lessor’s Access.............................................................................................. 16 Section 32. Auctions. ......................................................................................................... 16 Section 33. Signs. .............................................................................................................. 16 Section 34. Merger. ........................................................................................................... 16 Section 35. Quiet Possession. ........................................................................................... 16 Section 36. Security Measures. ......................................................................................... 17 Section 37. Easements. ..................................................................................................... 17 Section 38. Performance Under Protest. ........................................................................... 17 Section 39. Authority. ......................................................................................................... 17 Section 40. Terms and Headings. ...................................................................................... 17 Section 41. Exhibits and Riders. ........................................................................................ 17 Section 42. Successors and Assigns. ................................................................................ 17 Section 43. Professional Fees. .......................................................................................... 18 Section 44. Nondisclosure of Lease Terms. ...................................................................... 18 Section 45. Joint and Several Liability. .............................................................................. 18 Section 46. Broker Indemnification. ................................................................................... 18 Section 47. Holding Over. .................................................................................................. 19 Section 48. Subdivision Map Act. ...................................................................................... 18 #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25

WATER WELL/RIGHT-OF-WAY LEASE
This Water Well/Right-of-Way Lease (this “Lease”) dated effective 4 August 2014 is made by and between BEARD LAND IMPROVEMENT COMPANY, a California corporation (“Lessor”), and CITY OF MODESTO, a California municipal corporation (“Lessee”).

Section 1. Definitions
In addition to any other terms defined in this Lease, the following terms shall have the following meanings:

1.1 Premises. Premises shall mean that certain real property situated in the County of Stanislaus, State of California, commonly known as the land comprising Well Site No. 25, Budget Pack Pump Lot, located at Spenker Avenue, Modesto, California 95354, consisting of approximately 10,507.00 square feet as shown on Exhibit A attached.

1.2 Commencement Date. Commencement Date shall mean the date the term of this Lease is to commence as stated in Section 4.1.

Section 2. Premises.

2.1 Lease of Premises.

Lessor hereby leases to Lessee and Lessee leases from Lessor the Premises for the term, at the rental, and upon all of the conditions set forth herein.

Section 3. Rules and Regulations.

Lessee shall abide by, keep and observe all reasonable rules and regulations which Lessor may make from time to time for the management, safety, care, and cleanliness of the grounds, the parking of vehicles and the preservation of good order of the Premises.

The violations of any such rules and regulations shall be deemed a material breach of this Lease by Lessee.

Section 4. Term.

4.1 Term. The initial term of this Lease shall be for ten (10) years commencing January 1, 2015, and ending on December 31, 2024, unless sooner terminated pursuant to any provision of this Lease. Lessee shall provide six (6) month prior written notice of its intent to vacate at end of term.

4.2 Interim Term. The term of the Lease had renewed on a month-to-month basis effective July 1, 2009.

Section 5. Rent.

5.1 Monthly Rent. Lessee shall pay to Lessor during the term of the Lease as rent for the Premises monthly payments in advance on the first day of each month in the sum of $2,500.00, as adjusted pursuant to Section 5.4. Rent shall be paid to Lessor at the address of Lessor as stated in this Lease, or at such other address as may be designated by Lessor from time to time, without deduction or offset. Rent payable under this Section 5.1 shall be in addition to any other sums payable by Lessee to Lessor under this Lease. Rent for any #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 2 period during the term which is for less than one (1) month shall be a pro rata portion of the monthly installment.

5.2 Lease Origination Fee. Not Applicable

5.3 Rent Payable on Execution. Not Applicable

5.4 Rental Adjustment. Beginning with January 1, 2016, and annually on each January 1 thereafter, the monthly rent shall be adjusted as follows:

The monthly rent in effect at the time will be adjusted upward, but not downward, in equal proportion to the increase for the most recent twelve (12) month period ending in October of the previous year in the Consumer Price Index for All Urban Consumers (CPI-U), All Items, San Francisco as published by the United States Department of Labor, Bureau of Labor Statistics, San Francisco, California (All Items, San Francisco, 1982-1984=100) (the "Index"). If the Index for San Francisco is discontinued or revised during the term, such other government index or computation with which it is replaced shall be used in order to reach substantially the same result as would have been reached if the Index had not been discontinued or revised. (For example, if the Index increased from 214.692 in October 2014 to 215.245 in October 2015, the monthly rental beginning January 1, 2016, would be $2,506.00 (i.e., $2,500.00 multiplied by 215.245 divided by 214.692).)
Notice of the CPI-U rental adjustments shall be given by Lessor. If Lessor fails to give Lessee written notice of the CPI-U rental adjustment, if any, prior to January 1, 2016, or each subsequent January 1, the monthly rent shall nonetheless be adjusted as of each January 1, but Lessee shall pay such adjusted monthly rent as follows: (a) Lessee shall pay the increase in the monthly rent for the period on and after the applicable January 1 to, but not including, the date on which the adjusted payment is due under the clause within thirty (30) days of receipt of such written notice; and (b) Lessee shall pay the adjusted monthly rent on the first day of the second (2nd) calendar month after the calendar month in which the written notice of the rental adjustment is given and on the first day of each subsequent month.

Section 6. Security Deposit. There is no security deposit.

Section 7. Use.

7.1 Use by Tenant. Lessee shall use the Premises only for the production and distribution of water for commercial, domestic and industrial purposes, unless some other use is approved in writing by Lessor (with no obligation to do so). Such use shall include the right to construct, operate and maintain water wells, pipelines and/or mains and appurtenances necessary thereto. Lessee shall not use, or permit any other person or entity to use, the Premises, or any part thereof for any purpose in violation of the use stated in this Section 7.1, in violation of any law or ordinance of any governmental authority, or in a manner which constitutes a nuisance or unreasonably interferes with other tenants of the properties commonly known as the Beard Industrial District. Lessee shall not store, use or distribute any Hazardous Material (defined herein) on or about the Premises; provided however, that use and storage of materials customarily used in the course of pumping water for human consumption in accordance with Section 14.3 is excepted. #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 3 7.2 Compliance with Law.
(a) Lessee, at Lessee’s expense, shall comply promptly with all applicable statutes, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the term or any part of the term hereof which apply to the Premises or the use by Lessee of the Premises (the “Applicable Requirements”). (b) Lessee shall not use nor permit the use of the Premises in any manner that will tend to create waste or a nuisance.

7.3 Condition of Premises.
(a) Lessee acknowledges receipt of possession of the Premises. (b) Lessee accepts the Premises “as is” and in the condition existing as of the Commencement Date or the date that Lessee takes possession of the Premises, and subject to all applicable zoning, municipal, county and state laws, ordinances and regulations governing and regulating the use of the Premises, and any covenants or restrictions of record. Lessee acknowledges that neither Lessor nor any agent of Lessor has made any representation or warranty with respect to the Premises or the parcel of which the Premises are a part or with respect to their suitability or fitness for the conduct of Lessee’s business or for any other purpose.

Section 8. Maintenance, Repairs and Alterations.

8.1 Lessor’s Obligations. Lessor has no obligation, in any manner whatsoever, to maintain, repair or replace the Premises, or the equipment therein, all of which obligations are intended to be that of Lessee. It is the intention of the parties that the terms of this Lease govern the respective obligations of the parties as to maintenance, repair and replacement of the Premises, and they expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

8.2 Lessee’s Obligations.
(a) Lessee shall, at Lessee's sole expense, keep the Premises and the Alterations and Additions(as hereinafter defined) in good order, condition and repair (whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises). Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. (b) If Lessee fails to perform Lessee’s obligations under this Section 8.2 or under any other Section of this Lease, Lessor may at Lessor’s option enter upon the Premises after ten (10) days’ prior written notice to Lessee (except in the case of emergency, in which case no notice shall be required) perform such obligations on Lessee’s behalf and put the Premises in good order, condition and repair. The cost thereof shall be due and payable as additional rent to Lessor with Lessee’s next rental installment and the amount due shall bear interest until paid as provided in Section 20.
(c) On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the same condition as received, ordinary wear and tear excepted, clean and free of debris, and unless Lessor otherwise directs, shall remove all fixtures and equipment (whatever water wells, machinery or pipes) installed by or for #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 4 Lessee on the Premises, Alterations and Additions installed by Lessee and shall close the well in accordance with all requirements of applicable law or of Lessor for such closure. At Lessor’s request, Lessee shall deliver to Lessor a quitclaim deed releasing any interest or rights of Lessee in the Premises.

8.3 Alterations and Additions.
(a) Except for routine and customary maintenance, Lessee shall not make any alterations, improvements, additions, replacements, changes, or installations (collectively “Alterations and Additions”) in, on or about the Premises without Lessor’s prior written consent (which consent shall not be unreasonably withheld). In connection with any such proposed Alterations and Additions, Lessor shall have the right to (i) approve, in its reasonable discretion, Lessee’s contractors; (ii) require Lessee to provide Lessor, at Lessee’s sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the estimated cost of such Alterations and Additions, to insure Lessor against any liability for mechanic’s and materialmen’s liens and to ensure completion of the work; and (iii) require removal of the Alterations and Additions upon termination of this Agreement. Should Lessee make any Alterations and Additions without the prior approval of Lessor, Lessor shall have the right to require that Lessee immediately remove any or all of such Alterations and Additions.
(b) Any proposed Alterations and Additions in or about the Premises that Lessee shall desire to make shall be presented to Lessor in written form, with proposed detailed plans. If Lessor shall give its consent, the consent shall be deemed conditioned upon Lessee acquiring all necessary permits and governmental approvals, the furnishing of a copy thereof to Lessor prior to the commencement of the work, and the compliance by Lessee with all Applicable Requirements and all conditions of said permits and approvals in a prompt and expeditious manner.
(c) Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee in connection with the Premises, which are or may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest therein. Lessee shall give Lessor not less than fifteen (15) days’ notice prior to the commencement of any work at the Premises which is expected to cost in excess of $10,000.00, and Lessor shall have the right to post notices of non-responsibility in or on the Premises as provided by law. If Lessee, in good faith, shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole cost and expense, defend itself and Lessor against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against Lessor or the Premises. On written request from Lessor, Lessee shall furnish a release bond as provided under California Civil Code Section 3143 or any successor statute, which shall release such lien from the Premises. In addition, Lessor may require Lessee to pay Lessor’s attorney’s fees and costs in participating in such action if Lessor shall decide it is in its best interest to do so.

Section 9. Insurance; Indemnity.

9.1 Liability Insurance - Lessee. Lessee, at Lessee’s expense, shall obtain and keep in force during the term of this Lease a policy of Combined Single Limit Bodily Injury and Property Damage Insurance naming Lessor as an additional insured and insuring Lessee and Lessor against any liability arising out of the use, occupancy or maintenance of the Premises and all other areas appurtenant thereto. Such insurance shall be in an #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 5 amount not less than $3,000,000 per occurrence naming Lessor as additional insured on such policy. Upon written notice from Lessor to Lessee, said policy amount shall be increased as reasonably required by Lessor during the term or any extensions. The policy shall provide for cross-liability coverage and insure performance by Lessee of the indemnity provisions of this Lease. The liability insurance of Lessee may include a self-insured retention of up to $1,000,000.00. The limits of the insurance, however, shall not limit the liability of Lessee hereunder.

9.2 Insurance Policies. Insurance required hereunder shall be in companies holding a “General Policyholders Rating” of at least B++, or such other rating as may be required by a lender having a lien on the Premises, as set forth in the most current issue of “Best’s Insurance Guide,” or in case of discontinuance of such publication, a comparable guide. Lessee shall deliver to Lessor certificates evidencing the existence and amounts of such insurance, and that Lessor is named additional insured. Furthermore, if requested by Lessor because of a claim being made against Lessor or for other good cause, Lessee shall deliver to Lessor copies of policies of liability insurance required under Section 9.1. No such policy shall be subject to cancellation or reduction of coverage or other modification except after at least thirty (30) days’ prior written notice to Lessor. At least thirty (30) days prior to the expiration of such policies, Lessee shall furnish Lessor with renewals or “binders” thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee upon demand.

9.3 Waiver of Subrogation. Lessee and Lessor shall cause the insurance company issuing their respective property insurance to waive any subrogation rights that those companies may have against Lessee or Lessor, respectively. Lessee shall also obtain a similar waiver with respect to any sublessees or other occupants of the Premises, provided that Lessee shall be bound to comply with the provisions of Section 13 relating to any such individuals or entities. Lessor and Lessee waive any right that either may have against the other on account of any loss or damage that is insured under their respective property insurance policies for the Premises.

9.4 Lessee’s Assumption of Risk and Waiver. Except to the extent such matter is not covered by the insurance required to be maintained by Lessee under this Lease and such matter is attributable to the negligence or willful misconduct of Lessor, Lessor shall not be liable to Lessee, Lessee’s employees, agents or invitees for: (i) any damage to property of Lessee, or of others, located in, on or about the Premises, (ii) the loss of or damage to any property of Lessee or of others by theft or otherwise, (iii) any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, rain or leaks from any part of the Premises or from the pipes, appliance of plumbing works or from the roof, street or subsurface or from any other places or by dampness or by any other cause of whatsoever nature, or (iv) any such damage caused by other persons in the Premises, occupants of adjacent property, or the public, or caused by operations in construction of any private, public or quasi-public work. Lessor shall in no event be liable for any consequential damages or loss of business or profits and Lessee hereby waives any and all claims for any such damages. All property of Lessee kept or stored on the Premises shall be so kept or stored at the sole risk of Lessee and Lessee shall hold Lessor harmless from any claims arising out of damage to the same, including subrogation claims by Lessee’s insurance carriers, unless such damage shall be caused by the negligence or willful misconduct of Lessor.
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 6 9.5 Lessee’s Indemnification of Lessor. Lessee shall be liable for, and shall indemnify, defend, protect and hold Lessor and Lessor’s partners, officers, directors, employees, agents, successors and assigns (collectively, “Lessor Indemnified Parties”) harmless from and against, any and all claims, damages, judgments, suits, causes of action, losses, liabilities and expenses, including attorneys, fees and court costs (collectively, “Indemnified Claims”), arising or resulting from (i) any act or omission of Lessee or any of Lessee’s agents, employees, contractors, sublessees, assignees, licensees or, with respect to acts or omissions within the Premises solely, Lessee’s invitees (collectively, “Lessee Parties”); (ii) the use of the Premises and conduct of Lessee’s business by Lessee or any Lessee Parties, or any other activity, work or thing done, permitted or suffered by Lessee or any Lessee Parties, in or about the Premises; and (iii) any default by Lessee of any obligations on Lessee’s part to be performed under the terms of this Lease. In case any action or proceeding is brought against Lessor or any Lessor Indemnified Parties by reason of any such Indemnified Claims, Lessee, upon notice from Lessor, shall defend the same at Lessee’s expense by counsel approved in writing by Lessor, which approval shall not be unreasonably withheld.

9.8 Survival; No Release of Insurers. Lessee’s covenants, agreements and indemnification in Sections 9.4 and 9.5 shall survive the expiration or earlier termination of this Lease and are not intended to and shall not relieve any insurance carrier of its obligations under policies required to be carried by Lessee pursuant to the provisions of this Lease.

Section 10. Damage or Destruction. There shall be no abatement of monthly rent or any amount payable by Lessee to Lessor by reason of any casualty to the Premise or any other damage or destruction of the Premises.

Section 11. Real Property Taxes.

11.1 Real Property Taxes. Lessee shall pay the real property tax, as defined in Section 11.3, applicable to the Premises. Such payment shall be made by Lessee within thirty (30) days after receipt of Lessor’s written statement setting forth the amount of such real property tax and the computation thereof. If the term of this Lease shall not expire concurrently with the expiration of the tax fiscal year, Lessee’s liability for real property taxes for the last partial lease year shall be prorated on an annual basis.

11.2 Additional Improvements. Lessee shall pay to Lessor upon demand the entirety of any increase in real property tax if assessed solely by reason of additional improvements placed upon the Premises by Lessee or at Lessee’s request.

11.3 Definition of “Real Property Tax”. As used herein, the term “real property tax” shall include any form of real estate tax or assessment, general, special, supplementary, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed on the Premises by any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Lessor in the Premises or in the real property of which the Premises are a part, as against Lessor’s right to rent or other income therefrom, and as against Lessor’s business of leasing the Premises. The term “real property tax” shall also include any tax, fee, levy assessment or charge (i) in substitution of, partially or totally, any tax, fee, levy assessment or charge hereinabove included within the definition of “real property tax,” or (ii) #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 7 the nature of which was previously included within the definition of “real property tax,” or (iii) which is imposed for a service or right not charged prior to June 1, 1978, or, if previously charged, has been increased since June 1, 1978, or (iv) which is imposed as a result of a transfer, either partial or total, of Lessor’s interest in the Premises or which is added to a tax or charge hereinbefore included within the definition of real property tax by reason of such transfer, or (v) which is imposed by reason of this Lease, any modifications or changes hereto, or any transfers hereof. Clause (iv) of this Section 11.3 does not include a transfer tax due on a sale by Lessor, but does include any additional, or any increase in, real property taxes arising from a sale by Lessor.

11.4 Joint Assessment. If the Premises are not separately assessed, Lessee’s liability shall be an equitable proportion of the real property taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be determined by Lessor from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available. Lessor’s reasonable determination thereof, in good faith, shall be conclusive.

11.5 Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Lessee contained in the Premises or elsewhere. When possible, Lessee shall cause trade fixtures, furnishings, equipment, Lessee Installations and all other personal property of Lessee to be assessed and billed separately from the real property of Lessor. (b) If any of Lessee’s personal property shall be assessed with Lessor’s real property, Lessee shall pay Lessor the taxes attributable to Lessee’s personal property within thirty (30) days after receipt of a written statement setting forth the taxes applicable to Lessee’s property.

Section 12. Utilities & Janitorial Services.

Lessee shall pay for all water, gas, heat, light, power, telephone, cable, communication and other utilities and services supplied to the Premises, together with any taxes thereon. If any such services are not separately metered to Lessee, Lessee shall pay a reasonable proportion to be determined by Lessor of all charges jointly metered. Lessee, at its expense, shall provide the necessary janitorial services to maintain the Premises in a good orderly manner at all times during the Lease term, or any extension thereof. Lessee shall pay the cost of any required governmental inspections of improvements to the Premises.

Section 13. Assignment and Subletting.

13.1 Lessor’s Consent Required. Subject to Section 13.2, Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee’s interest in this Lease or in the Premises, without Lessor’s prior written consent, which Lessor shall not unreasonably withhold. Lessor shall respond to Lessee’s request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be void, and shall constitute a breach of this Lease.
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 8 13.2 Governmental Entity. Lessee may assign or sublet the Premises, or any portion thereof, without Lessor’s consent, to any governmental entity that will provide the services to the public in the City of Modesto, California for the production and distribution of water provided by Lessee prior to such assignment or sublet (which may include an entity for purposes of obtaining financing or a water district), provided that such assignee or sublessee assumes, in full, the obligations of Lessee under this Lease. Any such assignment shall not, in any way, affect or limit the liability of Lessee under the terms of this Lease even if after such assignment or subletting the terms of this Lease are materially changed or altered without the consent of Lessee, the consent of whom shall not be necessary. Any assignee or sublessee shall assume and be bound by all of the terms and provisions of this Lease including, but not limited to, the provisions of Section 7 which limit the permissible uses of the Premises. Lessor’s consent to any subleasing or assignment shall not be construed as acquiescence to any other use (unless this Lease is amended to permit such other use) or as a waiver of any other provisions of this Lease.

13.3 No Release of Lessee. Regardless of Lessor’s consent, no subletting or assignment shall release Lessee of Lessee’s obligation or alter the primary liability of Lessee to pay the rent and to perform all other obligations to be performed by Lessee hereunder. The acceptance of rent by Lessor from any other person shall not be deemed to be a waiver by Lessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default by any assignee of Lessee or any successor of Lessee in the performance of any of the terms hereof, Lessor may proceed directly against Lessee without the necessity of exhausting remedies against such assignee. Lessor may consent to subsequent assignments or subletting of this Lease or amendments or modifications to this Lease with assignees of Lessee without notifying Lessee, or any successor of Lessee, and without obtaining its or their consent thereto and such action shall not relieve Lessee of liability under this Lease.

13.4 Payment of Additional Rent. If Lessee assigns its interest under this Lease or sublets all or any portion of the Premises, Lessee shall pay to Lessor monthly (in addition to the monthly rent and all other amounts payable by Lessee under this Lease) as additional rent, within thirty (30) days after receipt, 50% of all of the rents and other consideration payable by such assignee or subtenant in excess of (i) the rent otherwise payable by Lessee from time to time under this Lease, or (ii) the allocable portion thereof which is subject to assignment or subletting.

13.5 Attorney’s Fees. In the event Lessee shall assign or sublet the Premises or request the consent of Lessor to any assignment, subletting, or waiver of rights in any removable personal property to be placed on the Premises by Lessee, or if Lessee shall request the consent of Lessor for any act Lessee proposes to do, then Lessee shall pay Lessor’s reasonable attorney’s fees incurred in connection therewith.

Section 14. Environmental Provisions.

14.1 Defined Terms.
(a) Hazardous Materials. For purposes of this Lease, “Hazardous Materials” shall mean any substance which is or becomes at any time during the term: (i) defined under any Environmental Law (defined below) as a hazardous substance, hazardous waste, hazardous material, pollutant or contaminant; (ii) a petroleum hydrocarbon, including crude oil or any fraction thereof; (iii) a hazardous, toxic, corrosive, flammable, explosive, #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 9 infectious, radioactive, carcinogenic or a reproductive toxicant; or (iv) otherwise regulated under any Environmental Laws.
(b) Environmental Laws. For purposes of this Lease, “Environmental Laws” shall mean all present and future federal, state and local laws, statutes, ordinances, regulations, rules, judicial and administrative orders and decrees, permits, licenses, approvals, authorizations and similar requirements of all federal, state and local governmental agencies or other governmental entities with legal authority pertaining to the protection of human health and safety or the environment.
(c) Release. For purposes of this Lease, “Release” shall mean any accidental or intentional spilling, leaking, pumping, pouring, emitting, emptying, discharging, injection, escaping, leaching, migrating, dumping or disposing into the air, land, surface water, ground water or the environment (including without limitation the abandonment or discarding of receptacles containing any Hazardous Materials).

14.2 Compliance With Environmental Laws. Lessee shall at all times comply with all applicable Environmental Laws. Without limiting the generality of the foregoing, Lessee shall procure and maintain in effect at all times during the term and any holdover period any permits and licenses required by any Environmental Laws for Lessee’s operations on or about the Premises.

14.3 Releases. Lessee shall not cause or permit to occur during the term or any holdover period any Release of a Hazardous Material or any condition of pollution or nuisance on or about the Premises, whether affecting the surface water or ground water, air, the soil, the surface of the Property, or the subsurface environment. Prior to or upon the date Lessee ceases to occupy the Premises, Lessee shall have removed from the Premises all Hazardous Materials introduced onto or permitted on the Premises by Lessee. In the event any Release of a Hazardous Material to the environment, or any condition of pollution or nuisance, occurs on or about or beneath the Premises during the term or any holdover period as a result of any act or omission of Lessee or Lessee’s employees, agents, contractors, invitees or guests, Lessee shall promptly undertake remedial measures as required to clean up, abate or otherwise respond to the Release, pollution or nuisance in accordance with applicable Environmental Laws at Lessee’s sole cost. This Section 14.3 shall not preclude Lessee from treating water at the wellhead so long as the treatment is done in compliance with all applicable Environmental Laws and Lessee disposes of all Hazardous Materials used in connection with or generated by such treatment at a location off the Premises in accordance with all applicable Environmental Laws.

14.4 Environmental Indemnity. Lessee shall indemnify, defend, and hold all Indemnitees (as defined below) harmless from and against any and all claims, suits, causes of action, demands, losses, damages (including, without limitation, foreseeable and unforeseeable consequential damages and punitive damages), diminution of property value, liabilities, fines, penalties, costs, taxes, charges, administrative and judicial proceedings, orders, judgments, settlements, remedial actions and compliance requirements (including, without limitation, enforcement and clean-up actions), third-party claims (including, without limitation, tort, economic and property claims), natural resource damages, additional costs of ownership, maintenance and development of the Premises (over and above those incurred for the ownership, maintenance and development of the Premises as tendered to Lessee), expenses (including without limitation reasonable attorneys’ fees and expenses, costs of defense and costs and expenses of all experts and consultants) arising, directly or indirectly, out of: (a) any non-compliance by Lessee, or any of Lessee’s employees, #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 10 agents, contractors, invitees or guests, with any Environmental Laws; (b) any use, storage, generation, production, Release, disposal or transportation by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, of any Hazardous Materials at, on, in, about or under the Premises at any time during Lessee’s occupancy or possession of the Premises; or (c) the migration from the Premises, at any time, of any Hazardous Materials Released by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, at, on, in, about, or under the Premises at any time during Lessee’s occupancy and/or possession of the Premises. Lessee shall promptly assume its defense and indemnification obligations (with counsel reasonably acceptable to Lessor) upon written notice from any Indemnitee. Indemnitees may participate in, but not control, the defense of the claim at their own expense. At Lessee’s request, Indemnitees shall reasonably cooperate in the defense of a claim at their own expense. Lessee shall not settle any claim without Indemnitees’ agreement, which agreement shall not be unreasonably withheld. “Indemnitees” shall mean and include Lessor, any successor in interest to Lessor, and the respective officers, directors, trustees, employees, agents, successors, assigns, and insurers of Lessor or any successor of Lessor.

Section 15. Defaults; Remedies.

15.1 Defaults. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee. (a) The vacating or abandonment of the Premises by Lessee. (b) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of ten (10) days after written notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to Pay Rent or Quit shall also constitute the notice required by this subsection.
(c) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, other than described in Subsection (b) above, where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee’s default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. (d) (i) The making by Lessee of any general arrangement or assignment for the benefit of creditors; (ii) Lessee becomes a “debtor” as defined in 11 U.S.C. Section 101 or any similar or successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days. If any provision of this Subsection 15 (d) is contrary to any applicable law, such provision shall be of no force or effect. (e) The discovery by Lessor that any financial statement given to Lessor by Lessee, any assignee of Lessee, any sublessee of Lessee, any successor in interest of #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 11 Lessee or any guarantor of Lessee’s obligation hereunder, and any of them, was materially false.
(f) The occurrence of any Release or any condition in violation of Environmental Laws and Hazardous Materials provisions in Section 14. The failure of Lessee to comply with any applicable laws governing the Premises including but not limited to, occurrence of any Release or condition in violation of Environmental Laws and Hazardous Materials provisions in Section 14 and the failure to cure such noncompliance within the earlier of (i) thirty (30) days after delivery to Lessee from Lessor, or the applicable governmental authority, of written notice of such non-compliance, or (ii) any time required for compliance under applicable law.

15.2 Remedies. In the event of any such default or breach by Lessee, Lessor may at any time thereafter, with or without notice of demand and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or breach:
(a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises to Lessor. In such event Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee’s default including, but not limited to: (i) the cost of recovering possession of the Premises; (ii) expenses of reletting, including necessary renovation and alteration of the Premises; (iii) reasonable attorney’s fees and collection costs; (iv) any real estate commission actually paid; and (v) the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided.
(b) Maintain Lessee’s right to possession in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event Lessor shall be entitled to enforce all of Lessor’s rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder. (c) Pursue any other remedy now or hereafter available to Lessor under the law or at equity. Unpaid installments of rent and other unpaid monetary obligations of Lessee under the terms of this Lease shall bear interest as provided in Section 20.

15.4 Late Charges. Lessee acknowledges that late payment by Lessee to Lessor of rent and other sums due hereunder will cause Lessor 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, and late charges which may be imposed on Lessor by the terms of any mortgage or trust deed covering the #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 12 Premises. Accordingly, if any installment of rent or any other sum due from Lessee shall not be received by Lessor or Lessor’s designee within ten (10) days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor, on demand, a late charge equal to 6% of such overdue amount. The parties acknowledge that it is impractical to determine the amount of Lessor’s damages in such instances and such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s default with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) installments of rent within any twelve (12) month period, then rent shall automatically become due and payable quarterly in advance, rather than monthly, notwithstanding Section 5 or any other provisions of this Lease to the contrary.

15.5 Impounds. In the event that a late charge is payable hereunder, whether or not collected, for three (3) installments of rent within any twelve (12) month period, or for any other monetary obligation of Lessee under the terms of this Lease, Lessee shall pay to Lessor, if Lessor shall so request, in addition to any other payments required under this Lease, a monthly advance installment, payable at the same time as the monthly rent, as estimated by Lessor, for real property taxes on the Premises which are payable by Lessee under the terms of this Lease. A fund for such installments shall be established by Lessor to insure payment when due, before delinquency, of any or all such real property taxes. If the amounts paid to Lessor by Lessee under the provisions of this Section 15 are insufficient to discharge the obligations of Lessee to pay such real property taxes as the same become due, Lessee shall pay to Lessor, upon Lessor’s demand, such additional sums necessary to pay such obligations. All moneys paid to Lessor under this Section may be intermingled with other money of Lessor and shall not bear interest. In the event of a default in the obligations of Lessee to perform under this Lease, then any balance remaining from funds paid to Lessor under the provisions of this Section may, at the option of Lessor, be applied to the payment of any monetary default of Lessee in lieu of being applied to the payment of real property tax.

Section 16. Condemnation.

16.2 Partial Taking. In the event of a partial taking of the Premises which does not result in a termination of this Lease pursuant to Section 16.1, rent shall be abated, effective as of the date possession of the Premises is required to be surrendered, in proportion to the part of the Premises so made unusable by Lessee. No award of any taking which does not result in a termination of this Lease pursuant to Section 16.1 shall be apportioned and Lessee hereby assigns to Lessor any award which may be made in such taking or #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 13 condemnation, together with any and all rights of Lessee now or hereafter arising in or to the same or any part thereof; provided, however, Lessee shall be entitled to any award made to Lessee for the taking of personal property and fixtures belonging to Lessee or for Lessee’s relocation costs or business interruption compensation. Lessee, at Lessee’s expense, shall restore the portion of the Premises remaining usable to as near its former condition as reasonably possible.

16.3 Temporary Taking. No temporary taking of the Premises or of Lessee’s rights therein or under this Lease shall terminate this Lease or give Lessee any right to any abatement of rent hereunder. Any award made to Lessee by reason of any such temporary taking shall belong entirely to Lessee and Lessor shall not be entitled to share therein.

16.4 Sale. A sale by Lessor to any authority having the power of eminent domain, either under threat of condemnation or while condemnation proceedings are pending, shall be deemed a taking under the power of eminent domain for all purposes under this Section

16. Section 17. Estoppel Certificate.

17.1 Lessee shall at any time upon not less than ten (10) days’ prior written notice from Lessor execute, acknowledge and deliver to Lessor a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to Lessee’s knowledge, any uncured defaults on the part of Lessor hereunder, or specifying such defaults if any are claimed. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the Premises.

17.2 At Lessor’s option, Lessee’s failure to deliver such statement within such time shall be a material breach of this Lease or shall be conclusive upon Lessee (i) that this Lease is in full force and effect, without modification except as may be represented by Lessor, (ii) that there are no uncured defaults in Lessor’s performance, and (iii) that not more than one (1) month’s rent has been paid in advance.

17.3 If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee shall deliver to any lender or purchaser designated by Lessor, such financial statements of Lessee as are prepared in the ordinary course by Lessee as may be reasonably requested by such lender or purchaser. Such statements shall include the past three years financial statements of Lessee. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

Section 18. Lessor’s Liability.

18.1 Limitation on Liability. Notwithstanding anything contained in this Lease to the contrary, the obligations of Lessor under this Lease (including any actual or alleged breach or default by Lessor) do not constitute personal obligations of the, directors, officers or shareholders of Lessor or Lessor’s partners, and Lessee shall not seek recourse against the individual directors, officers or shareholders of Lessor, or any of their personal assets for satisfaction of any liability with respect to this Lease. In addition, the liability of Lessor for its obligations under this Lease (including any liability as a result of any or alleged #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 14 failure, breach of default by Lessor), shall be limited solely to, and Lessee’s and its successors’ and assigns’ sole and exclusive remedy shall be against, the Premises, and no other assets of Lessor.

18.2 Transfer of Lessor’s Interest. The term “Lessor” as used herein shall mean only the owner or owners at the time in question of the fee title or the leasehold under a ground lease of the Premises. In the event of any transfer of such title or interest, Lessor herein named (and in case of any subsequent transfers then the grantor) shall be relieved from and after the date of such transfer of all liability as respects Lessor’s obligations thereafter to be performed, provided that any funds in the hands of Lessor or the then grantor at the time of such transfer, in which Lessee has an interest, shall be delivered to the grantee. Subject to the foregoing limitations, the obligations contained in this Lease to be performed by Lessor shall be binding on Lessor’s successors and assigns, but only during their respective periods of ownership.

Section 19. Severability.

The invalidity of any provision of this Lease as determined by a court of competent jurisdiction shall in no way affect the validity of any other provision hereof.

Section 20. Interest on Past-due Obligations.

Except as expressly herein provided, any amount due to Lessor not paid when due shall bear interest at the rate equal to two percent (2%) in excess of the announced prime rate established by Wells Fargo Bank, N.A., in San Francisco, California, as of the date such sums are due but in no event in excess of the maximum rate allowable under law.

Payment of such interest shall not excuse or cure any default by Lessee under this Lease.

Section 21. Time of Essence.

Unless designated time periods are stated, time is of the essence in performance under each parties’ obligations under this Lease.

Section 22. Additional Rent.

Any and all monetary obligations of Lessee to Lessor under the terms of this Lease shall be deemed to be rent.

Section 23. Incorporation of Prior Agreements; Amendments.

This Lease contains all agreements of the parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writing only, signed by the parties in interest at the time of the modification. Except as otherwise stated in this Lease, Lessee hereby acknowledges that Lessor or any employees or agents has not made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of the Premises and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act, the legal use and adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the term of this Lease.
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 15 Section 24. Notices.

Any notice required or permitted to be given hereunder shall be in writing and may be given by personal delivery, or by established overnight courier (e.g. Federal Express) or by certified mail, return receipt requested, and if given personally or by courier or mail, shall be deemed sufficiently given if addressed to Lessee or to Lessor at the address noted with the signature of the respective parties, as the case may be. Either party may by notice to the other specify a different address for notice purposes. A copy of all notices required or permitted to be given to Lessor hereunder shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate by notice to Lessee.

Section 25. Waivers.

No waiver by Lessor of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Lessee of the same or any other provision.

Lessor’s consent to, or approval of any act, shall not be deemed to render unnecessary the obtaining of Lessor’s consent to or approval of any subsequent act by Lessee. The acceptance of rent by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular rent so accepted, but not any late fee or interest thereon, regardless of Lessor’s knowledge of such preceding breach at the time of acceptance of such rent.

Section 26. Cumulative Remedies.

No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

Section 27. Covenants and Conditions.

Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition.

Section 28. Binding Effect; Choice of Law.

Subject to any provisions hereof restricting assignment or subletting by Lessee and subject to the provisions of Section 13, this Lease shall bind the parties, their personal representatives, successors and assigns. This Lease shall be governed by the laws of the State of California.

Section 29. Subordination.

29.1 This Lease shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation or security now or hereafter placed upon the real property of which the Premises are a part and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof. If any mortgagee, trustee or ground lessor shall elect to have this Lease prior to the lien of its mortgage, deed of trust or ground lease, and shall give written notice thereof to Lessee, this Lease shall be deemed prior to such mortgage, deed of trust, or ground lease, whether this Lease is dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof.
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 16 29.2 Lessee shall execute any documents required to effectuate an attornment, a subordination or to make this Lease prior to the lien of any mortgage, deed of trust or ground lease, as the case may be. Lessee’s failure to execute such documents within ten (10) days after written demand shall constitute a material default by Lessee hereunder, or, at Lessor’s option, Lessor may execute such documents on behalf of Lessee as Lessee’s attorney-in-fact. Lessee does hereby make, constitute and irrevocably appoint Lessor as Lessee’s attorney-in-fact and in Lessee’s name, place and stead, to execute such documents in accordance with this Section.

Section 30. Attorneys’ Fees.

If either party named herein brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action, on trial or appeal, shall be entitled to his reasonable attorneys’ fees to be paid by the losing party as fixed by the court.

Section 31. Lessor’s Access.

Lessor and Lessor’s agents shall have the right to enter the Premises at reasonable times for the purpose of inspecting the same, showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs, improvements or additions to the Premises of which they are a part as Lessor may deem necessary or desirable. Lessor may at any time place on or about the Premises any ordinary “For Sale” signs and Lessor may at any time place on or about the Premises any ordinary “For Lease” signs, all without rebate of rent or liability to Lessee.

Section 32. Auctions.

Lessee shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the Premises without first having obtained Lessor’s prior written consent. Notwithstanding anything to the contrary in this Lease, Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to grant such consent.

Section 33. Signs.

Lessee shall not place any sign upon the Premises without Lessor’s prior written consent, except for any signage reasonably related to Lessee's use of the Premises.

Section 34. Merger.

The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, or a termination by Lessor, shall not work a merger, and shall, at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all of such subtenancies.

Section 35. Quiet Possession.

Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, and provisions on Lessee’s part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the term subject to all of the provisions of this Lease.
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 17 Section 36. Security Measures.

Lessee hereby acknowledges that the rental payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of Lessee, its agents and invitees from acts of third parties.

Section 37. Easements.

Lessor reserves to itself the right, from time to time, to grant such easements, rights and dedications that Lessor deems necessary or desirable, and to cause the recordation of subdivision maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee.

Lessee shall sign any of the aforementioned documents upon request of Lessor and failure to do so shall constitute a material breach of this Lease.

Section 38. Performance Under Protest.

If at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payment “under protest” and such payment shall not be regarded as voluntary payment, and there shall survive the right on the part of said party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease.

Section 39. Authority.

Lessee represents and warrants to Lessor that this Lease has been duly authorized, executed and delivered by Lessee.

Section 40. Terms and Headings.

The words “Lessor” and “Lessee” as used in this Lease shall include the plural as well as the singular. Words used in any gender include other genders. The Section headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of it. Any deletion of language from this Lease prior to its execution by Lessor and Lessee shall not be construed to raise any presumption, canon of construction or implication, including, without limitation, any implication that the parties intended thereby to state the converse of the deleted language.

Section 41. Exhibits and Riders.

All Exhibits and Riders attached to this Lease (which consist solely of Exhibit A) are hereby incorporated in this Lease for all purposes as though set forth at length herein.

Section 42. Successors and Assigns.

Subject to the provisions of Section 13, and except as otherwise provided in this Lease, all of the covenants, conditions and provisions of this Lease shall be binding upon, and shall inure to the benefit of, the parties and their respective heirs, personal #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 18 representatives and permitted successors and assigns; provided, however, no rights shall inure to the benefit of any Transferee of Lessee unless the Transfer to such Transferee is made in compliance with the provisions of Section 13, and no options or other rights which are expressly made personal to the original Lessee shall be assignable to or exercisable by anyone other than the original Lessee under this Lease.

Section 43. Professional Fees.

If either Lessor or Lessee brings suit against the other with respect to this Lease, including for unlawful detainer or any other relief against the other of them, or otherwise enforces this Lease, then all costs and expenses incurred by the prevailing party (including without limitation, its actual appraisers, accountants’, attorneys’ and other professional fees, expenses and court costs), shall be paid by the other party, on demand.

Section 44. Nondisclosure of Lease Terms.

The terms of this Lease are confidential and constitute proprietary information of Lessor. Disclosure of the terms could adversely affect the ability of Lessor to negotiate other leases and impair Lessor’s relationship with other lessees. Accordingly, Lessee and its partners, officers, directors, employees, agents and attorneys shall not intentionally and voluntarily disclose the terms and conditions of this Lease to any newspaper or other publication or any other lessee or apparent prospective lessee or real estate agent, either directly or indirectly, without the prior written consent of Lessor, provided, however, that Lessee may disclose the terms to prospective subtenants or assignees under this Lease.

This Section 44 shall not apply to any disclosure required by applicable law (including, without limitation, the Public Records Act).

Section 45. Joint and Several Liability.

If more than one person or entity executes this Lease as Lessee: (a) each of them is and shall be jointly and severally liable for the covenants, conditions, provisions and agreements of this Lease to be kept, observed and performed by Lessee; and (b) the act or signature of, or notice from or to, any one or more of them with respect to this Lease shall be binding upon each and all of the persons and entities executing this Lease as Lessee with the same force and effect as if each and all of them had so acted or signed or given or received such notice. The person(s) signing this Lease on behalf of Lessee shall have no personal liability under this Lease.

Section 46. Broker Indemnification.

Lessee shall indemnify, defend and hold Lessor harmless from and against any claims, demands, liabilities, damages or expenses (including attorneys' fees and costs incurred in defending against any claim or demand) for brokerage commissions, finder fees or related costs incurred by Lessee or arising from any commitments or agreements alleged to have been made by Lessee relating to this Lease. Lessor shall indemnify, defend and hold Lessee harmless from and against any claims, demands, liabilities, damages or expenses (including attorneys' fees and costs incurred in defending against any claim or demand) for brokerage commissions, finder fees or related costs incurred by Lessor or arising from any commitments or agreements alleged to have been made by Lessor relating to this Lease. This Section 46 shall survive the expiration or earlier termination of the term of this Lease.
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 19 Section 47. Holding Over.

If Lessee holds over after the expiration or earlier termination of the Term, Lessee shall become a tenant at sufferance only, upon the terms and conditions set forth in this Lease so far as applicable (including Lessee’s obligation to pay all other additional charges under this Lease), but at a Monthly Basic Rent equal to: (a) two hundred percent (200%) of the Monthly Basic Rent applicable to the Premises immediately prior to the date of such expiration or earlier termination. Acceptance by Landlord of rent after such expiration or earlier termination shall not constitute a consent to a hold over or result in an extension of this Lease. Lessee shall pay an entire month’s Monthly Basic Rent calculated in accordance with this Section 47 for any portion of a month it holds over and remains in possession of the Premises.

Section 48. Subdivision Map Act.

Lessee represents and warrants to Lessor that the Subdivision Map Act is not applicable to this Lease, the execution and delivery of this Lease by Lessor is not a violation of the Subdivision Map Act and that this Lease is enforceable against Lessee in accordance with its terms. Lessee covenants and agrees that neither Lessee nor any other governmental authority or person has any rights under the Subdivision Map Act with respect to the Lease. Lessee covenants and agrees to indemnify, defend, protect and hold Lessor and Lessor Indemnified Parties harmless from and against, any and all claims, damages, judgments, suits, causes of action, losses, liabilities and expenses, including attorneys' fees and court costs, arising or resulting from a breach of any representation, warranty or covenant by Lessee under this Section 48. In case any action or proceeding is brought against Lessor or any Lessor Indemnified Parties with respect to any such indemnified claim, Lessee, upon notice from Lessor, shall defend the same at Lessee’s expense by counsel approved in writing by Lessor, which approval shall not be unreasonably withheld.

Lessee shall pay to Lessor, within thirty (30) days of receipt of an invoice, any expenses incurred by Lessor arising from any breach of any representation, warranty or covenant by Lessee in this Section 48. If there is a claim, or Lessor determines, that this Lease is in violation of the Subdivision Map Act, upon the written request of Lessor, Lessor and Lessee will enter into a modification to this Lease as may be deemed reasonably necessary or appropriate by Lessor to comply with the Subdivision Map Act. Lessee shall pay all out-ofpocket expenses incurred by Lessor in connection with such modification within thirty (30) days of receipt of an invoice. The representations, warranties and covenants by Lessee under this Section 48 are being made by Lessee to Lessor to induce Lessor to enter into the Lease and are being relied upon by Lessor; but for such representations, warranties and covenants, Lessor would not enter into this Lease.
(Signatures on next page)
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 20 LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE

AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE

PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE

TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE

INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

Lessor and Lessee have executed this Lease at the place and on the date specified immediately adjacent to their respective signatures.
“LESSOR”
Executed at Modesto, California BEARD LAND IMPROVEMENT COMPANY on ___________________, 2014.

By:
(Signature)
Address: 530 Eleventh Street Name:

Modesto, CA 95354 Title:

Taxpayer I.D.: 94-1562141
By: __________________________________
(Signature)
Name:

Title:
“LESSEE”

CITY OF MODESTO
Executed at Modesto, California By:
on ___________________, 2014. (Signature)
Name:

Address: _______________________ Title:
_______________________
Taxpayer I.D. By:
(Signature)
Name:

Title:
608861.2
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 21 #24..
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Water Well/Right-Of-Way Lease – Budget Pack Pump Lot – Well #25 22 #24..
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[Farrar Pump Lot]
Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 Section 1. Definitions ........................................................................................................... 1 Section 2. Premises. ............................................................................................................ 1 Section 3. Rules and Regulations. ....................................................................................... 1 Section 4. Term. .................................................................................................................. 1 Section 5. Rent. ................................................................................................................... 1 Section 6. Security Deposit. ............................................................................................... 2 Section 7. Use. .................................................................................................................... 2 Section 8. Maintenance, Repairs and Alterations. ............................................................... 3 Section 9. Insurance; Indemnity. .......................................................................................... 4 Section 10. Damage or Destruction. .................................................................................... 6 Section 11. Real Property Taxes. ........................................................................................ 6 Section 12. Utilities & Janitorial Services. ............................................................................ 7 Section 13. Assignment and Subletting. .............................................................................. 7 Section 14. Environmental Provisions.................................................................................. 8 Section 15. Defaults; Remedies. ........................................................................................ 10 Section 16. Condemnation. ............................................................................................... 12 Section 17. Estoppel Certificate. ........................................................................................ 13 Section 18. Lessor’s Liability.............................................................................................. 13 Section 19. Severability. .................................................................................................... 14 Section 20. Interest on Past-due Obligations. .................................................................... 14 Section 21. Time of Essence. ............................................................................................ 14 Section 22. Additional Rent................................................................................................ 14 Section 23. Incorporation of Prior Agreements; Amendments. .......................................... 14 Section 24. Notices. ........................................................................................................... 15 Section 25. Waivers. .......................................................................................................... 15 Section 26. Cumulative Remedies. .................................................................................... 15

WATER WELL/RIGHT-OF-WAY

LEASE-INDEX
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 ii
Section 27. Covenants and Conditions. ............................................................................. 15 Section 28. Binding Effect; Choice of Law. ........................................................................ 15 Section 29. Subordination. ................................................................................................. 15 Section 30. Attorneys’ Fees............................................................................................... 16 Section 31. Lessor’s Access.............................................................................................. 16 Section 32. Auctions. ......................................................................................................... 16 Section 33. Signs. .............................................................................................................. 16 Section 34. Merger. ........................................................................................................... 16 Section 35. Quiet Possession. ........................................................................................... 16 Section 36. Security Measures. ......................................................................................... 17 Section 37. Easements. ..................................................................................................... 17 Section 38. Performance Under Protest. ........................................................................... 17 Section 39. Authority. ......................................................................................................... 17 Section 40. Terms and Headings. ...................................................................................... 17 Section 41. Exhibits and Riders. ........................................................................................ 17 Section 42. Successors and Assigns. ................................................................................ 17 Section 43. Professional Fees. .......................................................................................... 18 Section 44. Nondisclosure of Lease Terms. ...................................................................... 18 Section 45. Joint and Several Liability. .............................................................................. 18 Section 46. Broker Indemnification. ................................................................................... 18 Section 47. Holding Over. .................................................................................................. 19 Section 48. Subdivision Map Act. ...................................................................................... 18 #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79

Section 1. Definitions
In addition to any other terms defined in this Lease, the following terms shall have the following meanings:

1.1 Premises. Premises shall mean that certain real property situated in the County of Stanislaus, State of California, commonly known as the land comprising Well Site No. 79, Farrar Pump Lot, located at Farrar Avenue, Modesto, California 95354, consisting of approximately 21,344.40 square feet as shown on Exhibit A attached.

1.2 Commencement Date. Commencement Date shall mean the date the term of this Lease is to commence as stated in Section 4.1.

Section 2. Premises.

2.1 Lease of Premises.

Lessor hereby leases to Lessee and Lessee leases from Lessor the Premises for the term, at the rental, and upon all of the conditions set forth herein.

Section 3. Rules and Regulations.

The violations of any such rules and regulations shall be deemed a material breach of this Lease by Lessee.

Section 4. Term.

4.2 Interim Term. The term of the Lease had renewed on a month-to-month basis effective July 1, 2009.

Section 5. Rent.

5.1 Monthly Rent. Lessee shall pay to Lessor during the term of the Lease as rent for the Premises monthly payments in advance on the first day of each month in the sum of $2,500.00, as adjusted pursuant to Section 5.4. Rent shall be paid to Lessor at the address of Lessor as stated in this Lease, or at such other address as may be designated by Lessor from time to time, without deduction or offset. Rent payable under this Section 5.1 shall be in addition to any other sums payable by Lessee to Lessor under this Lease. Rent for any #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 2 period during the term which is for less than one (1) month shall be a pro rata portion of the monthly installment.

5.2 Lease Origination Fee. Not Applicable

5.3 Rent Payable on Execution. Not Applicable

5.4 Rental Adjustment. Beginning with January 1, 2016, and annually on each January 1 thereafter, the monthly rent shall be adjusted as follows:

Section 6. Security Deposit. There is no security deposit.

Section 7. Use.

7.1 Use by Tenant. Lessee shall use the Premises only for the production and distribution of water for commercial, domestic and industrial purposes, unless some other use is approved in writing by Lessor (with no obligation to do so). Such use shall include the right to construct, operate and maintain water wells, pipelines and/or mains and appurtenances necessary thereto. Lessee shall not use, or permit any other person or entity to use, the Premises, or any part thereof for any purpose in violation of the use stated in this Section 7.1, in violation of any law or ordinance of any governmental authority, or in a manner which constitutes a nuisance or unreasonably interferes with other tenants of the properties commonly known as the Beard Industrial District. Lessee shall not store, use or distribute any Hazardous Material (defined herein) on or about the Premises; provided however, that use and storage of materials customarily used in the course of pumping water for human consumption in accordance with Section 14.3 is excepted. #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 3 7.2 Compliance with Law.
(a) Lessee, at Lessee’s expense, shall comply promptly with all applicable statutes, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the term or any part of the term hereof which apply to the Premises or the use by Lessee of the Premises (the “Applicable Requirements”). (b) Lessee shall not use nor permit the use of the Premises in any manner that will tend to create waste or a nuisance.

Section 8. Maintenance, Repairs and Alterations.

8.2 Lessee’s Obligations.
(a) Lessee shall, at Lessee's sole expense, keep the Premises and the Alterations and Additions(as hereinafter defined) in good order, condition and repair (whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises). Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. (b) If Lessee fails to perform Lessee’s obligations under this Section 8.2 or under any other Section of this Lease, Lessor may at Lessor’s option enter upon the Premises after ten (10) days’ prior written notice to Lessee (except in the case of emergency, in which case no notice shall be required) perform such obligations on Lessee’s behalf and put the Premises in good order, condition and repair. The cost thereof shall be due and payable as additional rent to Lessor with Lessee’s next rental installment and the amount due shall bear interest until paid as provided in Section 20.
(c) On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the same condition as received, ordinary wear and tear excepted, clean and free of debris, and unless Lessor otherwise directs, shall remove all fixtures and equipment (whatever water wells, machinery or pipes) installed by or for #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 4 Lessee on the Premises, Alterations and Additions installed by Lessee and shall close the well in accordance with all requirements of applicable law or of Lessor for such closure. At Lessor’s request, Lessee shall deliver to Lessor a quitclaim deed releasing any interest or rights of Lessee in the Premises.

Section 9. Insurance; Indemnity.

9.1 Liability Insurance - Lessee. Lessee, at Lessee’s expense, shall obtain and keep in force during the term of this Lease a policy of Combined Single Limit Bodily Injury and Property Damage Insurance naming Lessor as an additional insured and insuring Lessee and Lessor against any liability arising out of the use, occupancy or maintenance of the Premises and all other areas appurtenant thereto. Such insurance shall be in an #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 5 amount not less than $3,000,000 per occurrence naming Lessor as additional insured on such policy. Upon written notice from Lessor to Lessee, said policy amount shall be increased as reasonably required by Lessor during the term or any extensions. The policy shall provide for cross-liability coverage and insure performance by Lessee of the indemnity provisions of this Lease. The liability insurance of Lessee may include a self-insured retention of up to $1,000,000.00. The limits of the insurance, however, shall not limit the liability of Lessee hereunder.

9.4 Lessee’s Assumption of Risk and Waiver. Except to the extent such matter is not covered by the insurance required to be maintained by Lessee under this Lease and such matter is attributable to the negligence or willful misconduct of Lessor, Lessor shall not be liable to Lessee, Lessee’s employees, agents or invitees for: (i) any damage to property of Lessee, or of others, located in, on or about the Premises, (ii) the loss of or damage to any property of Lessee or of others by theft or otherwise, (iii) any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, rain or leaks from any part of the Premises or from the pipes, appliance of plumbing works or from the roof, street or subsurface or from any other places or by dampness or by any other cause of whatsoever nature, or (iv) any such damage caused by other persons in the Premises, occupants of adjacent property, or the public, or caused by operations in construction of any private, public or quasi-public work. Lessor shall in no event be liable for any consequential damages or loss of business or profits and Lessee hereby waives any and all claims for any such damages. All property of Lessee kept or stored on the Premises shall be so kept or stored at the sole risk of Lessee and Lessee shall hold Lessor harmless from any claims arising out of damage to the same, including subrogation claims by Lessee’s insurance carriers, unless such damage shall be caused by the negligence or willful misconduct of Lessor.
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 6 9.5 Lessee’s Indemnification of Lessor. Lessee shall be liable for, and shall indemnify, defend, protect and hold Lessor and Lessor’s partners, officers, directors, employees, agents, successors and assigns (collectively, “Lessor Indemnified Parties”) harmless from and against, any and all claims, damages, judgments, suits, causes of action, losses, liabilities and expenses, including attorneys, fees and court costs (collectively, “Indemnified Claims”), arising or resulting from (i) any act or omission of Lessee or any of Lessee’s agents, employees, contractors, sublessees, assignees, licensees or, with respect to acts or omissions within the Premises solely, Lessee’s invitees (collectively, “Lessee Parties”); (ii) the use of the Premises and conduct of Lessee’s business by Lessee or any Lessee Parties, or any other activity, work or thing done, permitted or suffered by Lessee or any Lessee Parties, in or about the Premises; and (iii) any default by Lessee of any obligations on Lessee’s part to be performed under the terms of this Lease. In case any action or proceeding is brought against Lessor or any Lessor Indemnified Parties by reason of any such Indemnified Claims, Lessee, upon notice from Lessor, shall defend the same at Lessee’s expense by counsel approved in writing by Lessor, which approval shall not be unreasonably withheld.

Section 11. Real Property Taxes.

11.3 Definition of “Real Property Tax”. As used herein, the term “real property tax” shall include any form of real estate tax or assessment, general, special, supplementary, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed on the Premises by any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Lessor in the Premises or in the real property of which the Premises are a part, as against Lessor’s right to rent or other income therefrom, and as against Lessor’s business of leasing the Premises. The term “real property tax” shall also include any tax, fee, levy assessment or charge (i) in substitution of, partially or totally, any tax, fee, levy assessment or charge hereinabove included within the definition of “real property tax,” or (ii) #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 7 the nature of which was previously included within the definition of “real property tax,” or (iii) which is imposed for a service or right not charged prior to June 1, 1978, or, if previously charged, has been increased since June 1, 1978, or (iv) which is imposed as a result of a transfer, either partial or total, of Lessor’s interest in the Premises or which is added to a tax or charge hereinbefore included within the definition of real property tax by reason of such transfer, or (v) which is imposed by reason of this Lease, any modifications or changes hereto, or any transfers hereof. Clause (iv) of this Section 11.3 does not include a transfer tax due on a sale by Lessor, but does include any additional, or any increase in, real property taxes arising from a sale by Lessor.

Section 12. Utilities & Janitorial Services.

Section 13. Assignment and Subletting.

13.1 Lessor’s Consent Required. Subject to Section 13.2, Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee’s interest in this Lease or in the Premises, without Lessor’s prior written consent, which Lessor shall not unreasonably withhold. Lessor shall respond to Lessee’s request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be void, and shall constitute a breach of this Lease.
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 8 13.2 Governmental Entity. Lessee may assign or sublet the Premises, or any portion thereof, without Lessor’s consent, to any governmental entity that will provide the services to the public in the City of Modesto, California for the production and distribution of water provided by Lessee prior to such assignment or sublet (which may include an entity for purposes of obtaining financing or a water district), provided that such assignee or sublessee assumes, in full, the obligations of Lessee under this Lease. Any such assignment shall not, in any way, affect or limit the liability of Lessee under the terms of this Lease even if after such assignment or subletting the terms of this Lease are materially changed or altered without the consent of Lessee, the consent of whom shall not be necessary. Any assignee or sublessee shall assume and be bound by all of the terms and provisions of this Lease including, but not limited to, the provisions of Section 7 which limit the permissible uses of the Premises. Lessor’s consent to any subleasing or assignment shall not be construed as acquiescence to any other use (unless this Lease is amended to permit such other use) or as a waiver of any other provisions of this Lease.

Section 14. Environmental Provisions.

14.1 Defined Terms.
(a) Hazardous Materials. For purposes of this Lease, “Hazardous Materials” shall mean any substance which is or becomes at any time during the term: (i) defined under any Environmental Law (defined below) as a hazardous substance, hazardous waste, hazardous material, pollutant or contaminant; (ii) a petroleum hydrocarbon, including crude oil or any fraction thereof; (iii) a hazardous, toxic, corrosive, flammable, explosive, #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 9 infectious, radioactive, carcinogenic or a reproductive toxicant; or (iv) otherwise regulated under any Environmental Laws.
(b) Environmental Laws. For purposes of this Lease, “Environmental Laws” shall mean all present and future federal, state and local laws, statutes, ordinances, regulations, rules, judicial and administrative orders and decrees, permits, licenses, approvals, authorizations and similar requirements of all federal, state and local governmental agencies or other governmental entities with legal authority pertaining to the protection of human health and safety or the environment.
(c) Release. For purposes of this Lease, “Release” shall mean any accidental or intentional spilling, leaking, pumping, pouring, emitting, emptying, discharging, injection, escaping, leaching, migrating, dumping or disposing into the air, land, surface water, ground water or the environment (including without limitation the abandonment or discarding of receptacles containing any Hazardous Materials).

14.4 Environmental Indemnity. Lessee shall indemnify, defend, and hold all Indemnitees (as defined below) harmless from and against any and all claims, suits, causes of action, demands, losses, damages (including, without limitation, foreseeable and unforeseeable consequential damages and punitive damages), diminution of property value, liabilities, fines, penalties, costs, taxes, charges, administrative and judicial proceedings, orders, judgments, settlements, remedial actions and compliance requirements (including, without limitation, enforcement and clean-up actions), third-party claims (including, without limitation, tort, economic and property claims), natural resource damages, additional costs of ownership, maintenance and development of the Premises (over and above those incurred for the ownership, maintenance and development of the Premises as tendered to Lessee), expenses (including without limitation reasonable attorneys’ fees and expenses, costs of defense and costs and expenses of all experts and consultants) arising, directly or indirectly, out of: (a) any non-compliance by Lessee, or any of Lessee’s employees, #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 10 agents, contractors, invitees or guests, with any Environmental Laws; (b) any use, storage, generation, production, Release, disposal or transportation by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, of any Hazardous Materials at, on, in, about or under the Premises at any time during Lessee’s occupancy or possession of the Premises; or (c) the migration from the Premises, at any time, of any Hazardous Materials Released by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, at, on, in, about, or under the Premises at any time during Lessee’s occupancy and/or possession of the Premises. Lessee shall promptly assume its defense and indemnification obligations (with counsel reasonably acceptable to Lessor) upon written notice from any Indemnitee. Indemnitees may participate in, but not control, the defense of the claim at their own expense. At Lessee’s request, Indemnitees shall reasonably cooperate in the defense of a claim at their own expense. Lessee shall not settle any claim without Indemnitees’ agreement, which agreement shall not be unreasonably withheld. “Indemnitees” shall mean and include Lessor, any successor in interest to Lessor, and the respective officers, directors, trustees, employees, agents, successors, assigns, and insurers of Lessor or any successor of Lessor.

Section 15. Defaults; Remedies.

15.1 Defaults. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee. (a) The vacating or abandonment of the Premises by Lessee. (b) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of ten (10) days after written notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to Pay Rent or Quit shall also constitute the notice required by this subsection.
(c) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, other than described in Subsection (b) above, where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee’s default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. (d) (i) The making by Lessee of any general arrangement or assignment for the benefit of creditors; (ii) Lessee becomes a “debtor” as defined in 11 U.S.C. Section 101 or any similar or successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days. If any provision of this Subsection 15 (d) is contrary to any applicable law, such provision shall be of no force or effect. (e) The discovery by Lessor that any financial statement given to Lessor by Lessee, any assignee of Lessee, any sublessee of Lessee, any successor in interest of #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 11 Lessee or any guarantor of Lessee’s obligation hereunder, and any of them, was materially false.
(f) The occurrence of any Release or any condition in violation of Environmental Laws and Hazardous Materials provisions in Section 14. The failure of Lessee to comply with any applicable laws governing the Premises including but not limited to, occurrence of any Release or condition in violation of Environmental Laws and Hazardous Materials provisions in Section 14 and the failure to cure such noncompliance within the earlier of (i) thirty (30) days after delivery to Lessee from Lessor, or the applicable governmental authority, of written notice of such non-compliance, or (ii) any time required for compliance under applicable law.

15.4 Late Charges. Lessee acknowledges that late payment by Lessee to Lessor of rent and other sums due hereunder will cause Lessor 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, and late charges which may be imposed on Lessor by the terms of any mortgage or trust deed covering the #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 12 Premises. Accordingly, if any installment of rent or any other sum due from Lessee shall not be received by Lessor or Lessor’s designee within ten (10) days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor, on demand, a late charge equal to 6% of such overdue amount. The parties acknowledge that it is impractical to determine the amount of Lessor’s damages in such instances and such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s default with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) installments of rent within any twelve (12) month period, then rent shall automatically become due and payable quarterly in advance, rather than monthly, notwithstanding Section 5 or any other provisions of this Lease to the contrary.

Section 16. Condemnation.

16.2 Partial Taking. In the event of a partial taking of the Premises which does not result in a termination of this Lease pursuant to Section 16.1, rent shall be abated, effective as of the date possession of the Premises is required to be surrendered, in proportion to the part of the Premises so made unusable by Lessee. No award of any taking which does not result in a termination of this Lease pursuant to Section 16.1 shall be apportioned and Lessee hereby assigns to Lessor any award which may be made in such taking or #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 13 condemnation, together with any and all rights of Lessee now or hereafter arising in or to the same or any part thereof; provided, however, Lessee shall be entitled to any award made to Lessee for the taking of personal property and fixtures belonging to Lessee or for Lessee’s relocation costs or business interruption compensation. Lessee, at Lessee’s expense, shall restore the portion of the Premises remaining usable to as near its former condition as reasonably possible.

16. Section 17. Estoppel Certificate.

Section 18. Lessor’s Liability.

18.1 Limitation on Liability. Notwithstanding anything contained in this Lease to the contrary, the obligations of Lessor under this Lease (including any actual or alleged breach or default by Lessor) do not constitute personal obligations of the, directors, officers or shareholders of Lessor or Lessor’s partners, and Lessee shall not seek recourse against the individual directors, officers or shareholders of Lessor, or any of their personal assets for satisfaction of any liability with respect to this Lease. In addition, the liability of Lessor for its obligations under this Lease (including any liability as a result of any or alleged #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 14 failure, breach of default by Lessor), shall be limited solely to, and Lessee’s and its successors’ and assigns’ sole and exclusive remedy shall be against, the Premises, and no other assets of Lessor.

Section 19. Severability.

The invalidity of any provision of this Lease as determined by a court of competent jurisdiction shall in no way affect the validity of any other provision hereof.

Section 20. Interest on Past-due Obligations.

Payment of such interest shall not excuse or cure any default by Lessee under this Lease.

Section 21. Time of Essence.

Unless designated time periods are stated, time is of the essence in performance under each parties’ obligations under this Lease.

Section 22. Additional Rent.

Any and all monetary obligations of Lessee to Lessor under the terms of this Lease shall be deemed to be rent.

Section 23. Incorporation of Prior Agreements; Amendments.

This Lease contains all agreements of the parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writing only, signed by the parties in interest at the time of the modification. Except as otherwise stated in this Lease, Lessee hereby acknowledges that Lessor or any employees or agents has not made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of the Premises and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act, the legal use and adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the term of this Lease.
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 15 Section 24. Notices.

Section 25. Waivers.

No waiver by Lessor of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Lessee of the same or any other provision.

Section 26. Cumulative Remedies.

No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

Section 27. Covenants and Conditions.

Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition.

Section 28. Binding Effect; Choice of Law.

Section 29. Subordination.

29.1 This Lease shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation or security now or hereafter placed upon the real property of which the Premises are a part and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof. If any mortgagee, trustee or ground lessor shall elect to have this Lease prior to the lien of its mortgage, deed of trust or ground lease, and shall give written notice thereof to Lessee, this Lease shall be deemed prior to such mortgage, deed of trust, or ground lease, whether this Lease is dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof.
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 16 29.2 Lessee shall execute any documents required to effectuate an attornment, a subordination or to make this Lease prior to the lien of any mortgage, deed of trust or ground lease, as the case may be. Lessee’s failure to execute such documents within ten (10) days after written demand shall constitute a material default by Lessee hereunder, or, at Lessor’s option, Lessor may execute such documents on behalf of Lessee as Lessee’s attorney-in-fact. Lessee does hereby make, constitute and irrevocably appoint Lessor as Lessee’s attorney-in-fact and in Lessee’s name, place and stead, to execute such documents in accordance with this Section.

Section 30. Attorneys’ Fees.

Section 31. Lessor’s Access.

Section 32. Auctions.

Section 33. Signs.

Lessee shall not place any sign upon the Premises without Lessor’s prior written consent, except for any signage reasonably related to Lessee's use of the Premises.

Section 34. Merger.

Section 35. Quiet Possession.

Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, and provisions on Lessee’s part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the term subject to all of the provisions of this Lease.
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 17 Section 36. Security Measures.

Section 37. Easements.

Lessee shall sign any of the aforementioned documents upon request of Lessor and failure to do so shall constitute a material breach of this Lease.

Section 38. Performance Under Protest.

Section 39. Authority.

Lessee represents and warrants to Lessor that this Lease has been duly authorized, executed and delivered by Lessee.

Section 40. Terms and Headings.

Section 41. Exhibits and Riders.

All Exhibits and Riders attached to this Lease (which consist solely of Exhibit A) are hereby incorporated in this Lease for all purposes as though set forth at length herein.

Section 42. Successors and Assigns.

Subject to the provisions of Section 13, and except as otherwise provided in this Lease, all of the covenants, conditions and provisions of this Lease shall be binding upon, and shall inure to the benefit of, the parties and their respective heirs, personal #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 18 representatives and permitted successors and assigns; provided, however, no rights shall inure to the benefit of any Transferee of Lessee unless the Transfer to such Transferee is made in compliance with the provisions of Section 13, and no options or other rights which are expressly made personal to the original Lessee shall be assignable to or exercisable by anyone other than the original Lessee under this Lease.

Section 43. Professional Fees.

Section 44. Nondisclosure of Lease Terms.

This Section 44 shall not apply to any disclosure required by applicable law (including, without limitation, the Public Records Act).

Section 45. Joint and Several Liability.

Section 46. Broker Indemnification.

Lessee shall indemnify, defend and hold Lessor harmless from and against any claims, demands, liabilities, damages or expenses (including attorneys' fees and costs incurred in defending against any claim or demand) for brokerage commissions, finder fees or related costs incurred by Lessee or arising from any commitments or agreements alleged to have been made by Lessee relating to this Lease. Lessor shall indemnify, defend and hold Lessee harmless from and against any claims, demands, liabilities, damages or expenses (including attorneys' fees and costs incurred in defending against any claim or demand) for brokerage commissions, finder fees or related costs incurred by Lessor or arising from any commitments or agreements alleged to have been made by Lessor relating to this Lease. This Section 46 shall survive the expiration or earlier termination of the term of this Lease.
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 19 Section 47. Holding Over.

Section 48. Subdivision Map Act.

Lessee shall pay to Lessor, within thirty (30) days of receipt of an invoice, any expenses incurred by Lessor arising from any breach of any representation, warranty or covenant by Lessee in this Section 48. If there is a claim, or Lessor determines, that this Lease is in violation of the Subdivision Map Act, upon the written request of Lessor, Lessor and Lessee will enter into a modification to this Lease as may be deemed reasonably necessary or appropriate by Lessor to comply with the Subdivision Map Act. Lessee shall pay all out-ofpocket expenses incurred by Lessor in connection with such modification within thirty (30) days of receipt of an invoice. The representations, warranties and covenants by Lessee under this Section 48 are being made by Lessee to Lessor to induce Lessor to enter into the Lease and are being relied upon by Lessor; but for such representations, warranties and covenants, Lessor would not enter into this Lease.
(Signatures on next page)
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 20 LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE

AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE

PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE

TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE

INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

By:
(Signature)
Address: 530 Eleventh Street Name:

Modesto, CA 95354 Title:

Taxpayer I.D.: 94-1562141
By: __________________________________
(Signature)
Name:

Title:
“LESSEE”

CITY OF MODESTO
Executed at Modesto, California By:
on ___________________, 2014. (Signature)
Name:

Address: _______________________ Title:
_______________________
Taxpayer I.D. By:
(Signature)
Name:

Title:
608861.2
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 21 #24..
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Water Well/Right-Of-Way Lease – Farrar Pump Lot – Well #79 22 #24..
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[S. McClure Pump Lot]
Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 Section 1. Definitions ........................................................................................................... 1 Section 2. Premises. ............................................................................................................ 1 Section 3. Rules and Regulations. ....................................................................................... 1 Section 4. Term. .................................................................................................................. 1 Section 5. Rent. ................................................................................................................... 1 Section 6. Security Deposit. ............................................................................................... 2 Section 7. Use. .................................................................................................................... 2 Section 8. Maintenance, Repairs and Alterations. ............................................................... 3 Section 9. Insurance; Indemnity. .......................................................................................... 5 Section 10. Damage or Destruction. .................................................................................... 6 Section 11. Real Property Taxes. ........................................................................................ 6 Section 12. Utilities & Janitorial Services. ............................................................................ 7 Section 13. Assignment and Subletting. .............................................................................. 7 Section 14. Environmental Provisions.................................................................................. 8 Section 15. Defaults; Remedies. ........................................................................................ 10 Section 16. Condemnation. ............................................................................................... 12 Section 17. Estoppel Certificate. ........................................................................................ 13 Section 18. Lessor’s Liability.............................................................................................. 14 Section 19. Severability. .................................................................................................... 14 Section 20. Interest on Past-due Obligations. .................................................................... 14 Section 21. Time of Essence. ............................................................................................ 14 Section 22. Additional Rent................................................................................................ 14 Section 23. Incorporation of Prior Agreements; Amendments. .......................................... 14 Section 24. Notices. ........................................................................................................... 15 Section 25. Waivers. .......................................................................................................... 15 Section 26. Cumulative Remedies. .................................................................................... 15

WATER WELL/RIGHT-OF-WAY

LEASE-INDEX
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 ii
Section 27. Covenants and Conditions. ............................................................................. 15 Section 28. Binding Effect; Choice of Law. ........................................................................ 15 Section 29. Subordination. ................................................................................................. 15 Section 30. Attorneys’ Fees............................................................................................... 16 Section 31. Lessor’s Access.............................................................................................. 16 Section 32. Auctions. ......................................................................................................... 16 Section 33. Signs. .............................................................................................................. 16 Section 34. Merger. ........................................................................................................... 16 Section 35. Quiet Possession. ........................................................................................... 17 Section 36. Security Measures. ......................................................................................... 17 Section 37. Easements. ..................................................................................................... 17 Section 38. Performance Under Protest. ........................................................................... 17 Section 39. Authority. ......................................................................................................... 17 Section 40. Terms and Headings. ...................................................................................... 17 Section 41. Exhibits and Riders. ........................................................................................ 18 Section 42. Successors and Assigns. ................................................................................ 18 Section 43. Professional Fees. .......................................................................................... 18 Section 44. Nondisclosure of Lease Terms. ...................................................................... 18 Section 45. Joint and Several Liability. .............................................................................. 18 Section 46. Broker Indemnification. ................................................................................... 18 Section 47. Holding Over. .................................................................................................. 19 Section 48. Subdivision Map Act. ...................................................................................... 18 #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1

WATER WELL/RIGHT-OF-WAY LEASE
This Water Well/Right-of-Way Lease (this “Lease”) dated effective 4 August 2014 is made by and between MODESTO AND EMPIRE TRACTION COMPANY, a California corporation (“Lessor”), and CITY OF MODESTO, a California municipal corporation (“Lessee”).

Section 1. Definitions
In addition to any other terms defined in this Lease, the following terms shall have the following meanings:

1.1 Premises. Premises shall mean that certain real property situated in the County of Stanislaus, State of California, commonly known as the land comprising Well Site No. 1, S. McClure Pump Lot, located at McClure Road, Modesto, California 95357, consisting of approximately 10,000.00 square feet as shown on Exhibit A attached.

1.2 Commencement Date. Commencement Date shall mean the date the term of this Lease is to commence as stated in Section 4.1.

Section 2. Premises.

2.1 Lease of Premises.

Lessor hereby leases to Lessee and Lessee leases from Lessor the Premises for the term, at the rental, and upon all of the conditions set forth herein.

Section 3. Rules and Regulations.

The violations of any such rules and regulations shall be deemed a material breach of this Lease by Lessee.

Section 4. Term.

4.2 Interim Term. The term of the Lease had renewed on a month-to-month basis effective July 1, 2009.

Section 5. Rent.

5.1 Monthly Rent. Lessee shall pay to Lessor during the term of the Lease as rent for the Premises monthly payments in advance on the first day of each month in the sum of $2,500.00, as adjusted pursuant to Section 5.4. Rent shall be paid to Lessor at the address of Lessor as stated in this Lease, or at such other address as may be designated by Lessor from time to time, without deduction or offset. Rent payable under this Section 5.1 shall be #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 2 in addition to any other sums payable by Lessee to Lessor under this Lease. Rent for any period during the term which is for less than one (1) month shall be a pro rata portion of the monthly installment.

5.2 Lease Origination Fee. Not Applicable

5.3 Rent Payable on Execution. Not Applicable

5.4 Rental Adjustment. Beginning with January 1, 2016, and annually on each January 1 thereafter, the monthly rent shall be adjusted as follows:

Section 6. Security Deposit. There is no security deposit.

Section 7. Use.

7.2 Compliance with Law.
(a) Lessee, at Lessee’s expense, shall comply promptly with all applicable statutes, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the term or any part of the term hereof which apply to the Premises or the use by Lessee of the Premises (the “Applicable Requirements”). (b) Lessee shall not use nor permit the use of the Premises in any manner that will tend to create waste or a nuisance.

Section 8. Maintenance, Repairs and Alterations.

8.2 Lessee’s Obligations.
(a) Lessee shall, at Lessee's sole expense, keep the Premises and the Alterations and Additions(as hereinafter defined) in good order, condition and repair (whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises). Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. (b) If Lessee fails to perform Lessee’s obligations under this Section 8.2 or under any other Section of this Lease, Lessor may at Lessor’s option enter upon the Premises after ten (10) days’ prior written notice to Lessee (except in the case of emergency, in which case no notice shall be required) perform such obligations on Lessee’s behalf and put the Premises in good order, condition and repair. The cost thereof shall be due and payable as additional rent to Lessor with Lessee’s next rental installment and the amount due shall bear interest until paid as provided in Section 20.
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 4 (c) On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the same condition as received, ordinary wear and tear excepted, clean and free of debris, and unless Lessor otherwise directs, shall remove all fixtures and equipment (whatever water wells, machinery or pipes) installed by or for Lessee on the Premises, Alterations and Additions installed by Lessee and shall close the well in accordance with all requirements of applicable law or of Lessor for such closure. At Lessor’s request, Lessee shall deliver to Lessor a quitclaim deed releasing any interest or rights of Lessee in the Premises.

9.1 Liability Insurance - Lessee. Lessee, at Lessee’s expense, shall obtain and keep in force during the term of this Lease a policy of Combined Single Limit Bodily Injury and Property Damage Insurance naming Lessor as an additional insured and insuring Lessee and Lessor against any liability arising out of the use, occupancy or maintenance of the Premises and all other areas appurtenant thereto. Such insurance shall be in an amount not less than $3,000,000 per occurrence naming Lessor as additional insured on such policy. Upon written notice from Lessor to Lessee, said policy amount shall be increased as reasonably required by Lessor during the term or any extensions. The policy shall provide for cross-liability coverage and insure performance by Lessee of the indemnity provisions of this Lease. The liability insurance of Lessee may include a self-insured retention of up to $1,000,000.00. The limits of the insurance, however, shall not limit the liability of Lessee hereunder.

9.5 Lessee’s Indemnification of Lessor. Lessee shall be liable for, and shall indemnify, defend, protect and hold Lessor and Lessor’s partners, officers, directors, employees, agents, successors and assigns (collectively, “Lessor Indemnified Parties”) harmless from and against, any and all claims, damages, judgments, suits, causes of action, losses, liabilities and expenses, including attorneys, fees and court costs (collectively, “Indemnified Claims”), arising or resulting from (i) any act or omission of Lessee or any of Lessee’s agents, employees, contractors, sublessees, assignees, licensees or, with respect to acts or omissions within the Premises solely, Lessee’s invitees (collectively, “Lessee Parties”); (ii) the use of the Premises and conduct of Lessee’s business by Lessee or any Lessee Parties, or any other activity, work or thing done, permitted or suffered by Lessee or any Lessee Parties, in or about the Premises; and (iii) any default by Lessee of any obligations on Lessee’s part to be performed under the terms of this Lease. In case any action or proceeding is brought against Lessor or any Lessor Indemnified Parties by reason of any such Indemnified Claims, Lessee, upon notice from Lessor, shall defend the same at Lessee’s expense by counsel approved in writing by Lessor, which approval shall not be unreasonably withheld.

Section 11. Real Property Taxes.

11.3 Definition of “Real Property Tax”. As used herein, the term “real property tax” shall include any form of real estate tax or assessment, general, special, supplementary, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed on the Premises by any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 7 street, drainage or other improvement district thereof, as against any legal or equitable interest of Lessor in the Premises or in the real property of which the Premises are a part, as against Lessor’s right to rent or other income therefrom, and as against Lessor’s business of leasing the Premises. The term “real property tax” shall also include any tax, fee, levy assessment or charge (i) in substitution of, partially or totally, any tax, fee, levy assessment or charge hereinabove included within the definition of “real property tax,” or (ii) the nature of which was previously included within the definition of “real property tax,” or (iii) which is imposed for a service or right not charged prior to June 1, 1978, or, if previously charged, has been increased since June 1, 1978, or (iv) which is imposed as a result of a transfer, either partial or total, of Lessor’s interest in the Premises or which is added to a tax or charge hereinbefore included within the definition of real property tax by reason of such transfer, or (v) which is imposed by reason of this Lease, any modifications or changes hereto, or any transfers hereof. Clause (iv) of this Section 11.3 does not include a transfer tax due on a sale by Lessor, but does include any additional, or any increase in, real property taxes arising from a sale by Lessor.

Section 12. Utilities & Janitorial Services.

Section 13. Assignment and Subletting.

13.2 Governmental Entity. Lessee may assign or sublet the Premises, or any portion thereof, without Lessor’s consent, to any governmental entity that will provide the services to the public in the City of Modesto, California for the production and distribution of water provided by Lessee prior to such assignment or sublet (which may include an entity for purposes of obtaining financing or a water district), provided that such assignee or sublessee assumes, in full, the obligations of Lessee under this Lease. Any such assignment shall not, in any way, affect or limit the liability of Lessee under the terms of this Lease even if after such assignment or subletting the terms of this Lease are materially changed or altered without the consent of Lessee, the consent of whom shall not be necessary. Any assignee or sublessee shall assume and be bound by all of the terms and provisions of this Lease including, but not limited to, the provisions of Section 7 which limit the permissible uses of the Premises. Lessor’s consent to any subleasing or assignment shall not be construed as acquiescence to any other use (unless this Lease is amended to permit such other use) or as a waiver of any other provisions of this Lease.

Section 14. Environmental Provisions.

14.1 Defined Terms.
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 9 (a) Hazardous Materials. For purposes of this Lease, “Hazardous Materials” shall mean any substance which is or becomes at any time during the term: (i) defined under any Environmental Law (defined below) as a hazardous substance, hazardous waste, hazardous material, pollutant or contaminant; (ii) a petroleum hydrocarbon, including crude oil or any fraction thereof; (iii) a hazardous, toxic, corrosive, flammable, explosive, infectious, radioactive, carcinogenic or a reproductive toxicant; or (iv) otherwise regulated under any Environmental Laws.
(b) Environmental Laws. For purposes of this Lease, “Environmental Laws” shall mean all present and future federal, state and local laws, statutes, ordinances, regulations, rules, judicial and administrative orders and decrees, permits, licenses, approvals, authorizations and similar requirements of all federal, state and local governmental agencies or other governmental entities with legal authority pertaining to the protection of human health and safety or the environment.
(c) Release. For purposes of this Lease, “Release” shall mean any accidental or intentional spilling, leaking, pumping, pouring, emitting, emptying, discharging, injection, escaping, leaching, migrating, dumping or disposing into the air, land, surface water, ground water or the environment (including without limitation the abandonment or discarding of receptacles containing any Hazardous Materials).

14.4 Environmental Indemnity. Lessee shall indemnify, defend, and hold all Indemnitees (as defined below) harmless from and against any and all claims, suits, causes of action, demands, losses, damages (including, without limitation, foreseeable and unforeseeable consequential damages and punitive damages), diminution of property value, liabilities, fines, penalties, costs, taxes, charges, administrative and judicial proceedings, orders, judgments, settlements, remedial actions and compliance requirements (including, without limitation, enforcement and clean-up actions), third-party claims (including, without limitation, tort, economic and property claims), natural resource damages, additional costs #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 10 of ownership, maintenance and development of the Premises (over and above those incurred for the ownership, maintenance and development of the Premises as tendered to Lessee), expenses (including without limitation reasonable attorneys’ fees and expenses, costs of defense and costs and expenses of all experts and consultants) arising, directly or indirectly, out of: (a) any non-compliance by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, with any Environmental Laws; (b) any use, storage, generation, production, Release, disposal or transportation by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, of any Hazardous Materials at, on, in, about or under the Premises at any time during Lessee’s occupancy or possession of the Premises; or (c) the migration from the Premises, at any time, of any Hazardous Materials Released by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, at, on, in, about, or under the Premises at any time during Lessee’s occupancy and/or possession of the Premises. Lessee shall promptly assume its defense and indemnification obligations (with counsel reasonably acceptable to Lessor) upon written notice from any Indemnitee. Indemnitees may participate in, but not control, the defense of the claim at their own expense. At Lessee’s request, Indemnitees shall reasonably cooperate in the defense of a claim at their own expense. Lessee shall not settle any claim without Indemnitees’ agreement, which agreement shall not be unreasonably withheld. “Indemnitees” shall mean and include Lessor, any successor in interest to Lessor, and the respective officers, directors, trustees, employees, agents, successors, assigns, and insurers of Lessor or any successor of Lessor.

Section 15. Defaults; Remedies.

15.1 Defaults. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee. (a) The vacating or abandonment of the Premises by Lessee. (b) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of ten (10) days after written notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to Pay Rent or Quit shall also constitute the notice required by this subsection.
(c) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, other than described in Subsection (b) above, where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee’s default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. (d) (i) The making by Lessee of any general arrangement or assignment for the benefit of creditors; (ii) Lessee becomes a “debtor” as defined in 11 U.S.C. Section 101 or any similar or successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 11 seizure is not discharged within thirty (30) days. If any provision of this Subsection 15 (d) is contrary to any applicable law, such provision shall be of no force or effect. (e) The discovery by Lessor that any financial statement given to Lessor by Lessee, any assignee of Lessee, any sublessee of Lessee, any successor in interest of Lessee or any guarantor of Lessee’s obligation hereunder, and any of them, was materially false.
(f) The occurrence of any Release or any condition in violation of Environmental Laws and Hazardous Materials provisions in Section 14. The failure of Lessee to comply with any applicable laws governing the Premises including but not limited to, occurrence of any Release or condition in violation of Environmental Laws and Hazardous Materials provisions in Section 14 and the failure to cure such noncompliance within the earlier of (i) thirty (30) days after delivery to Lessee from Lessor, or the applicable governmental authority, of written notice of such non-compliance, or (ii) any time required for compliance under applicable law.

15.3 Default by Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor and to the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have theretofore been furnished to Lessee in writing, specifying wherein Lessor has failed to perform such obligation; provided, however, that if the nature of Lessor’s obligation is such that more than thirty (30) days are required for performance then Lessor shall not be in default if Lessor commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion.
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 12 15.4 Late Charges. Lessee acknowledges that late payment by Lessee to Lessor of rent and other sums due hereunder will cause Lessor 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, and late charges which may be imposed on Lessor by the terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of rent or any other sum due from Lessee shall not be received by Lessor or Lessor’s designee within ten (10) days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor, on demand, a late charge equal to 6% of such overdue amount. The parties acknowledge that it is impractical to determine the amount of Lessor’s damages in such instances and such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s default with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) installments of rent within any twelve (12) month period, then rent shall automatically become due and payable quarterly in advance, rather than monthly, notwithstanding Section 5 or any other provisions of this Lease to the contrary.

Section 16. Condemnation.

16.1 Total Taking. If the whole of the Premises or so much thereof as to render the balance unusable by Lessee shall be taken under power of eminent domain, this Lease shall automatically terminate as of the date of such condemnation, or as of the date possession is taken by the condemning authority, whichever is earlier. No award of any taking which results in a termination of this Lease pursuant to this Section 16.1 shall be apportioned and Lessee hereby assigns to Lessor any award which may be made in such taking or condemnation, together with any and all rights of Lessee now or hereafter arising in or to the same or any part thereof; provided, however, Lessee shall be entitled to any award made to Lessee for the taking of personal property and fixtures belonging to Lessee or for Lessee’s relocation costs or business interruption compensation. #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 13 16.2 Partial Taking. In the event of a partial taking of the Premises which does not result in a termination of this Lease pursuant to Section 16.1, rent shall be abated, effective as of the date possession of the Premises is required to be surrendered, in proportion to the part of the Premises so made unusable by Lessee. No award of any taking which does not result in a termination of this Lease pursuant to Section 16.1 shall be apportioned and Lessee hereby assigns to Lessor any award which may be made in such taking or condemnation, together with any and all rights of Lessee now or hereafter arising in or to the same or any part thereof; provided, however, Lessee shall be entitled to any award made to Lessee for the taking of personal property and fixtures belonging to Lessee or for Lessee’s relocation costs or business interruption compensation. Lessee, at Lessee’s expense, shall restore the portion of the Premises remaining usable to as near its former condition as reasonably possible.

16. Section 17. Estoppel Certificate.

18.1 Limitation on Liability. Notwithstanding anything contained in this Lease to the contrary, the obligations of Lessor under this Lease (including any actual or alleged breach or default by Lessor) do not constitute personal obligations of the, directors, officers or shareholders of Lessor or Lessor’s partners, and Lessee shall not seek recourse against the individual directors, officers or shareholders of Lessor, or any of their personal assets for satisfaction of any liability with respect to this Lease. In addition, the liability of Lessor for its obligations under this Lease (including any liability as a result of any or alleged failure, breach of default by Lessor), shall be limited solely to, and Lessee’s and its successors’ and assigns’ sole and exclusive remedy shall be against, the Premises, and no other assets of Lessor.

Section 19. Severability.

The invalidity of any provision of this Lease as determined by a court of competent jurisdiction shall in no way affect the validity of any other provision hereof.

Section 20. Interest on Past-due Obligations.

Payment of such interest shall not excuse or cure any default by Lessee under this Lease.

Section 21. Time of Essence.

Unless designated time periods are stated, time is of the essence in performance under each parties’ obligations under this Lease.

Section 22. Additional Rent.

Any and all monetary obligations of Lessee to Lessor under the terms of this Lease shall be deemed to be rent.

Section 23. Incorporation of Prior Agreements; Amendments.

This Lease contains all agreements of the parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writing only, signed by the parties in interest at #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 15 the time of the modification. Except as otherwise stated in this Lease, Lessee hereby acknowledges that Lessor or any employees or agents has not made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of the Premises and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act, the legal use and adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the term of this Lease.

Section 24. Notices.

Section 25. Waivers.

No waiver by Lessor of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Lessee of the same or any other provision.

Section 26. Cumulative Remedies.

No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

Section 27. Covenants and Conditions.

Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition.

Section 28. Binding Effect; Choice of Law.

Section 29. Subordination.

29.1 This Lease shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation or security now or hereafter placed upon the real property #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 16 of which the Premises are a part and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof. If any mortgagee, trustee or ground lessor shall elect to have this Lease prior to the lien of its mortgage, deed of trust or ground lease, and shall give written notice thereof to Lessee, this Lease shall be deemed prior to such mortgage, deed of trust, or ground lease, whether this Lease is dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof.

29.2 Lessee shall execute any documents required to effectuate an attornment, a subordination or to make this Lease prior to the lien of any mortgage, deed of trust or ground lease, as the case may be. Lessee’s failure to execute such documents within ten (10) days after written demand shall constitute a material default by Lessee hereunder, or, at Lessor’s option, Lessor may execute such documents on behalf of Lessee as Lessee’s attorney-in-fact. Lessee does hereby make, constitute and irrevocably appoint Lessor as Lessee’s attorney-in-fact and in Lessee’s name, place and stead, to execute such documents in accordance with this Section.

Section 30. Attorneys’ Fees.

Section 31. Lessor’s Access.

Section 32. Auctions.

Section 33. Signs.

Lessee shall not place any sign upon the Premises without Lessor’s prior written consent, except for any signage reasonably related to Lessee's use of the Premises.

Section 34. Merger.

Section 36. Security Measures.

Section 37. Easements.

Lessee shall sign any of the aforementioned documents upon request of Lessor and failure to do so shall constitute a material breach of this Lease.

Section 38. Performance Under Protest.

Section 39. Authority.

Lessee represents and warrants to Lessor that this Lease has been duly authorized, executed and delivered by Lessee.

Section 40. Terms and Headings.

All Exhibits and Riders attached to this Lease (which consist solely of Exhibit A) are hereby incorporated in this Lease for all purposes as though set forth at length herein.

Section 42. Successors and Assigns.

Subject to the provisions of Section 13, and except as otherwise provided in this Lease, all of the covenants, conditions and provisions of this Lease shall be binding upon, and shall inure to the benefit of, the parties and their respective heirs, personal representatives and permitted successors and assigns; provided, however, no rights shall inure to the benefit of any Transferee of Lessee unless the Transfer to such Transferee is made in compliance with the provisions of Section 13, and no options or other rights which are expressly made personal to the original Lessee shall be assignable to or exercisable by anyone other than the original Lessee under this Lease.

Section 43. Professional Fees.

Section 44. Nondisclosure of Lease Terms.

This Section 44 shall not apply to any disclosure required by applicable law (including, without limitation, the Public Records Act).

Section 45. Joint and Several Liability.

Section 46. Broker Indemnification.

Lessee shall indemnify, defend and hold Lessor harmless from and against any claims, demands, liabilities, damages or expenses (including attorneys' fees and costs #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 19 incurred in defending against any claim or demand) for brokerage commissions, finder fees or related costs incurred by Lessee or arising from any commitments or agreements alleged to have been made by Lessee relating to this Lease. Lessor shall indemnify, defend and hold Lessee harmless from and against any claims, demands, liabilities, damages or expenses (including attorneys' fees and costs incurred in defending against any claim or demand) for brokerage commissions, finder fees or related costs incurred by Lessor or arising from any commitments or agreements alleged to have been made by Lessor relating to this Lease. This Section 46 shall survive the expiration or earlier termination of the term of this Lease.

Section 47. Holding Over.

Section 48. Subdivision Map Act.

Lessee shall pay to Lessor, within thirty (30) days of receipt of an invoice, any expenses incurred by Lessor arising from any breach of any representation, warranty or covenant by Lessee in this Section 48. If there is a claim, or Lessor determines, that this Lease is in violation of the Subdivision Map Act, upon the written request of Lessor, Lessor and Lessee will enter into a modification to this Lease as may be deemed reasonably necessary or appropriate by Lessor to comply with the Subdivision Map Act. Lessee shall pay all out-ofpocket expenses incurred by Lessor in connection with such modification within thirty (30) days of receipt of an invoice. The representations, warranties and covenants by Lessee under this Section 48 are being made by Lessee to Lessor to induce Lessor to enter into the Lease and are being relied upon by Lessor; but for such representations, warranties and covenants, Lessor would not enter into this Lease.
(Signatures on next page)
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 20 LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE

AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE

PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE

TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE

INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

Lessor and Lessee have executed this Lease at the place and on the date specified immediately adjacent to their respective signatures.
“LESSOR”
Executed at Modesto, California MODESTO & EMPIRE TRACTION COMPANY on ___________________, 2014.

By:
(Signature)
Address: 530 Eleventh Street Name:

Modesto, CA 95354 Title:

Taxpayer I.D.: 94-1562141
By: __________________________________
(Signature)
Name:

Title:
“LESSEE”

CITY OF MODESTO
Executed at Modesto, California By:
on ___________________, 2014. (Signature)
Name:

Address: _______________________ Title:
_______________________
Taxpayer I.D. By:
(Signature)
Name:

Title:
608861.2
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 21 #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 22 #24..
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Water Well/Right-Of-Way Lease – S. McClure Pump Lot - Well #1 23 #24..
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[Mariposa E & W Pump Lot]
Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 Section 1. Definitions ........................................................................................................... 1 Section 2. Premises. ............................................................................................................ 1 Section 3. Rules and Regulations. ....................................................................................... 1 Section 4. Term. .................................................................................................................. 1 Section 5. Rent. ................................................................................................................... 2 Section 6. Security Deposit. ............................................................................................... 2 Section 7. Use. .................................................................................................................... 2 Section 8. Maintenance, Repairs and Alterations. ............................................................... 3 Section 9. Insurance; Indemnity. .......................................................................................... 5 Section 10. Damage or Destruction. .................................................................................... 6 Section 11. Real Property Taxes. ........................................................................................ 6 Section 12. Utilities & Janitorial Services. ............................................................................ 7 Section 13. Assignment and Subletting. .............................................................................. 7 Section 14. Environmental Provisions.................................................................................. 8 Section 15. Defaults; Remedies. ........................................................................................ 10 Section 16. Condemnation. ............................................................................................... 12 Section 17. Estoppel Certificate. ........................................................................................ 13 Section 18. Lessor’s Liability.............................................................................................. 13 Section 19. Severability. .................................................................................................... 14 Section 20. Interest on Past-due Obligations. .................................................................... 14 Section 21. Time of Essence. ............................................................................................ 14 Section 22. Additional Rent................................................................................................ 14 Section 23. Incorporation of Prior Agreements; Amendments. .......................................... 14 Section 24. Notices. ........................................................................................................... 15 Section 25. Waivers. .......................................................................................................... 15

WATER WELL/RIGHT-OF-WAY

LEASE-INDEX
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 ii
Section 26. Cumulative Remedies. .................................................................................... 15 Section 27. Covenants and Conditions. ............................................................................. 15 Section 28. Binding Effect; Choice of Law. ........................................................................ 15 Section 29. Subordination. ................................................................................................. 15 Section 30. Attorneys’ Fees............................................................................................... 16 Section 31. Lessor’s Access.............................................................................................. 16 Section 32. Auctions. ......................................................................................................... 16 Section 33. Signs. .............................................................................................................. 16 Section 34. Merger. ........................................................................................................... 16 Section 35. Quiet Possession. ........................................................................................... 16 Section 36. Security Measures. ......................................................................................... 17 Section 37. Easements. ..................................................................................................... 17 Section 38. Performance Under Protest. ........................................................................... 17 Section 39. Authority. ......................................................................................................... 17 Section 40. Terms and Headings. ...................................................................................... 17 Section 41. Exhibits and Riders. ........................................................................................ 17 Section 42. Successors and Assigns. ................................................................................ 17 Section 43. Professional Fees. .......................................................................................... 18 Section 44. Nondisclosure of Lease Terms. ...................................................................... 18 Section 45. Joint and Several Liability. .............................................................................. 18 Section 46. Broker Indemnification. ................................................................................... 18 Section 47. Holding Over. .................................................................................................. 19 Section 48. Subdivision Map Act. ...................................................................................... 18 #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92

Section 1. Definitions
In addition to any other terms defined in this Lease, the following terms shall have the following meanings:

1.1 Premises. Premises shall mean that certain real property situated in the County of Stanislaus, State of California, commonly known as the land comprising Well Site No. 91 & 92, Mariposa East and West Pump Lot, located at Mariposa Road, Modesto, California 95354, consisting of approximately 63,196.48 square feet as shown on Exhibit A attached.

1.2 Commencement Date. Commencement Date shall mean the date the term of this Lease is to commence as stated in Section 4.1.

Section 2. Premises.

2.1 Lease of Premises.

Lessor hereby leases to Lessee and Lessee leases from Lessor the Premises for the term, at the rental, and upon all of the conditions set forth herein.

Section 3. Rules and Regulations.

The violations of any such rules and regulations shall be deemed a material breach of this Lease by Lessee.

Section 4. Term.

4.2 Interim Term. The term of the Lease had renewed on a month-to-month basis effective July 1, 2009.
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 Section 5. Rent.

5.1 Monthly Rent. Lessee shall pay to Lessor during the term of the Lease as rent for the Premises monthly payments in advance on the first day of each month in the sum of $2,500.00, as adjusted pursuant to Section 5.4. Rent shall be paid to Lessor at the address of Lessor as stated in this Lease, or at such other address as may be designated by Lessor from time to time, without deduction or offset. Rent payable under this Section 5.1 shall be in addition to any other sums payable by Lessee to Lessor under this Lease. Rent for any period during the term which is for less than one (1) month shall be a pro rata portion of the monthly installment.

5.2 Lease Origination Fee. Not Applicable

5.3 Rent Payable on Execution. Not Applicable

5.4 Rental Adjustment. Beginning with January 1, 2016, and annually on each January 1 thereafter, the monthly rent shall be adjusted as follows:

Section 6. Security Deposit. There is no security deposit.

Section 7. Use.

7.1 Use by Tenant. Lessee shall use the Premises only for the production and distribution of water for commercial, domestic and industrial purposes, unless some other use is approved in writing by Lessor (with no obligation to do so). Such use shall include the right to construct, operate and maintain water wells, pipelines and/or mains and appurtenances necessary thereto. Lessee shall not use, or permit any other person or #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 entity to use, the Premises, or any part thereof for any purpose in violation of the use stated in this Section 7.1, in violation of any law or ordinance of any governmental authority, or in a manner which constitutes a nuisance or unreasonably interferes with other tenants of the properties commonly known as the Beard Industrial District. Lessee shall not store, use or distribute any Hazardous Material (defined herein) on or about the Premises; provided however, that use and storage of materials customarily used in the course of pumping water for human consumption in accordance with Section 14.3 is excepted.

Section 8. Maintenance, Repairs and Alterations.

8.2 Lessee’s Obligations.
(a) Lessee shall, at Lessee's sole expense, keep the Premises and the Alterations and Additions(as hereinafter defined) in good order, condition and repair (whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises). Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. (b) If Lessee fails to perform Lessee’s obligations under this Section 8.2 or under any other Section of this Lease, Lessor may at Lessor’s option enter upon the Premises after ten (10) days’ prior written notice to Lessee (except in the case of emergency, in which case no notice shall be required) perform such obligations on Lessee’s behalf and put the Premises in good order, condition and repair. The cost thereof shall be due and payable as #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 additional rent to Lessor with Lessee’s next rental installment and the amount due shall bear interest until paid as provided in Section 20.
(c) On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the same condition as received, ordinary wear and tear excepted, clean and free of debris, and unless Lessor otherwise directs, shall remove all fixtures and equipment (whatever water wells, machinery or pipes) installed by or for Lessee on the Premises, Alterations and Additions installed by Lessee and shall close the well in accordance with all requirements of applicable law or of Lessor for such closure. At Lessor’s request, Lessee shall deliver to Lessor a quitclaim deed releasing any interest or rights of Lessee in the Premises.

9.1 Liability Insurance - Lessee. Lessee, at Lessee’s expense, shall obtain and keep in force during the term of this Lease a policy of Combined Single Limit Bodily Injury and Property Damage Insurance naming Lessor as an additional insured and insuring Lessee and Lessor against any liability arising out of the use, occupancy or maintenance of the Premises and all other areas appurtenant thereto. Such insurance shall be in an amount not less than $3,000,000 per occurrence naming Lessor as additional insured on such policy. Upon written notice from Lessor to Lessee, said policy amount shall be increased as reasonably required by Lessor during the term or any extensions. The policy shall provide for cross-liability coverage and insure performance by Lessee of the indemnity provisions of this Lease. The liability insurance of Lessee may include a self-insured retention of up to $1,000,000.00. The limits of the insurance, however, shall not limit the liability of Lessee hereunder.

Section 11. Real Property Taxes.

11.3 Definition of “Real Property Tax”. As used herein, the term “real property tax” shall include any form of real estate tax or assessment, general, special, supplementary, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed on the Premises by any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Lessor in the Premises or in the real property of which the Premises are a part, #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 as against Lessor’s right to rent or other income therefrom, and as against Lessor’s business of leasing the Premises. The term “real property tax” shall also include any tax, fee, levy assessment or charge (i) in substitution of, partially or totally, any tax, fee, levy assessment or charge hereinabove included within the definition of “real property tax,” or (ii) the nature of which was previously included within the definition of “real property tax,” or (iii) which is imposed for a service or right not charged prior to June 1, 1978, or, if previously charged, has been increased since June 1, 1978, or (iv) which is imposed as a result of a transfer, either partial or total, of Lessor’s interest in the Premises or which is added to a tax or charge hereinbefore included within the definition of real property tax by reason of such transfer, or (v) which is imposed by reason of this Lease, any modifications or changes hereto, or any transfers hereof. Clause (iv) of this Section 11.3 does not include a transfer tax due on a sale by Lessor, but does include any additional, or any increase in, real property taxes arising from a sale by Lessor.

Section 12. Utilities & Janitorial Services.

Section 13. Assignment and Subletting.

Section 14. Environmental Provisions.

14.1 Defined Terms.
(a) Hazardous Materials. For purposes of this Lease, “Hazardous Materials” shall mean any substance which is or becomes at any time during the term: (i) defined under any Environmental Law (defined below) as a hazardous substance, hazardous waste, #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 hazardous material, pollutant or contaminant; (ii) a petroleum hydrocarbon, including crude oil or any fraction thereof; (iii) a hazardous, toxic, corrosive, flammable, explosive, infectious, radioactive, carcinogenic or a reproductive toxicant; or (iv) otherwise regulated under any Environmental Laws.
(b) Environmental Laws. For purposes of this Lease, “Environmental Laws” shall mean all present and future federal, state and local laws, statutes, ordinances, regulations, rules, judicial and administrative orders and decrees, permits, licenses, approvals, authorizations and similar requirements of all federal, state and local governmental agencies or other governmental entities with legal authority pertaining to the protection of human health and safety or the environment.
(c) Release. For purposes of this Lease, “Release” shall mean any accidental or intentional spilling, leaking, pumping, pouring, emitting, emptying, discharging, injection, escaping, leaching, migrating, dumping or disposing into the air, land, surface water, ground water or the environment (including without limitation the abandonment or discarding of receptacles containing any Hazardous Materials).

14.4 Environmental Indemnity. Lessee shall indemnify, defend, and hold all Indemnitees (as defined below) harmless from and against any and all claims, suits, causes of action, demands, losses, damages (including, without limitation, foreseeable and unforeseeable consequential damages and punitive damages), diminution of property value, liabilities, fines, penalties, costs, taxes, charges, administrative and judicial proceedings, orders, judgments, settlements, remedial actions and compliance requirements (including, without limitation, enforcement and clean-up actions), third-party claims (including, without limitation, tort, economic and property claims), natural resource damages, additional costs of ownership, maintenance and development of the Premises (over and above those incurred for the ownership, maintenance and development of the Premises as tendered to Lessee), expenses (including without limitation reasonable attorneys’ fees and expenses, #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 costs of defense and costs and expenses of all experts and consultants) arising, directly or indirectly, out of: (a) any non-compliance by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, with any Environmental Laws; (b) any use, storage, generation, production, Release, disposal or transportation by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, of any Hazardous Materials at, on, in, about or under the Premises at any time during Lessee’s occupancy or possession of the Premises; or (c) the migration from the Premises, at any time, of any Hazardous Materials Released by Lessee, or any of Lessee’s employees, agents, contractors, invitees or guests, at, on, in, about, or under the Premises at any time during Lessee’s occupancy and/or possession of the Premises. Lessee shall promptly assume its defense and indemnification obligations (with counsel reasonably acceptable to Lessor) upon written notice from any Indemnitee. Indemnitees may participate in, but not control, the defense of the claim at their own expense. At Lessee’s request, Indemnitees shall reasonably cooperate in the defense of a claim at their own expense. Lessee shall not settle any claim without Indemnitees’ agreement, which agreement shall not be unreasonably withheld. “Indemnitees” shall mean and include Lessor, any successor in interest to Lessor, and the respective officers, directors, trustees, employees, agents, successors, assigns, and insurers of Lessor or any successor of Lessor.

Section 15. Defaults; Remedies.

15.1 Defaults. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee. (a) The vacating or abandonment of the Premises by Lessee. (b) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of ten (10) days after written notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to Pay Rent or Quit shall also constitute the notice required by this subsection.
(c) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, other than described in Subsection (b) above, where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee’s default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. (d) (i) The making by Lessee of any general arrangement or assignment for the benefit of creditors; (ii) Lessee becomes a “debtor” as defined in 11 U.S.C. Section 101 or any similar or successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days. If any provision of this Subsection 15 (d) is contrary to any applicable law, such provision shall be of no force or effect. #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 (e) The discovery by Lessor that any financial statement given to Lessor by Lessee, any assignee of Lessee, any sublessee of Lessee, any successor in interest of Lessee or any guarantor of Lessee’s obligation hereunder, and any of them, was materially false.
(f) The occurrence of any Release or any condition in violation of Environmental Laws and Hazardous Materials provisions in Section 14. The failure of Lessee to comply with any applicable laws governing the Premises including but not limited to, occurrence of any Release or condition in violation of Environmental Laws and Hazardous Materials provisions in Section 14 and the failure to cure such noncompliance within the earlier of (i) thirty (30) days after delivery to Lessee from Lessor, or the applicable governmental authority, of written notice of such non-compliance, or (ii) any time required for compliance under applicable law.

15.4 Late Charges. Lessee acknowledges that late payment by Lessee to Lessor of rent and other sums due hereunder will cause Lessor 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, and late charges which #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 may be imposed on Lessor by the terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of rent or any other sum due from Lessee shall not be received by Lessor or Lessor’s designee within ten (10) days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor, on demand, a late charge equal to 6% of such overdue amount. The parties acknowledge that it is impractical to determine the amount of Lessor’s damages in such instances and such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s default with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) installments of rent within any twelve (12) month period, then rent shall automatically become due and payable quarterly in advance, rather than monthly, notwithstanding Section 5 or any other provisions of this Lease to the contrary.

Section 16. Condemnation.

16.2 Partial Taking. In the event of a partial taking of the Premises which does not result in a termination of this Lease pursuant to Section 16.1, rent shall be abated, effective as of the date possession of the Premises is required to be surrendered, in proportion to the part of the Premises so made unusable by Lessee. No award of any taking which does not result in a termination of this Lease pursuant to Section 16.1 shall be apportioned and Lessee hereby assigns to Lessor any award which may be made in such taking or #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 condemnation, together with any and all rights of Lessee now or hereafter arising in or to the same or any part thereof; provided, however, Lessee shall be entitled to any award made to Lessee for the taking of personal property and fixtures belonging to Lessee or for Lessee’s relocation costs or business interruption compensation. Lessee, at Lessee’s expense, shall restore the portion of the Premises remaining usable to as near its former condition as reasonably possible.

16. Section 17. Estoppel Certificate.

Section 18. Lessor’s Liability.

18.1 Limitation on Liability. Notwithstanding anything contained in this Lease to the contrary, the obligations of Lessor under this Lease (including any actual or alleged breach or default by Lessor) do not constitute personal obligations of the, directors, officers or shareholders of Lessor or Lessor’s partners, and Lessee shall not seek recourse against the individual directors, officers or shareholders of Lessor, or any of their personal assets for satisfaction of any liability with respect to this Lease. In addition, the liability of Lessor for its obligations under this Lease (including any liability as a result of any or alleged failure, breach of default by Lessor), shall be limited solely to, and Lessee’s and its #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 successors’ and assigns’ sole and exclusive remedy shall be against, the Premises, and no other assets of Lessor.

Section 19. Severability.

The invalidity of any provision of this Lease as determined by a court of competent jurisdiction shall in no way affect the validity of any other provision hereof.

Section 20. Interest on Past-due Obligations.

Payment of such interest shall not excuse or cure any default by Lessee under this Lease.

Section 21. Time of Essence.

Unless designated time periods are stated, time is of the essence in performance under each parties’ obligations under this Lease.

Section 22. Additional Rent.

Any and all monetary obligations of Lessee to Lessor under the terms of this Lease shall be deemed to be rent.

Section 23. Incorporation of Prior Agreements; Amendments.

This Lease contains all agreements of the parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writing only, signed by the parties in interest at the time of the modification. Except as otherwise stated in this Lease, Lessee hereby acknowledges that Lessor or any employees or agents has not made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of the Premises and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act, the legal use and adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the term of this Lease.
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 Section 24. Notices.

Section 25. Waivers.

No waiver by Lessor of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Lessee of the same or any other provision.

Section 26. Cumulative Remedies.

No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

Section 27. Covenants and Conditions.

Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition.

Section 28. Binding Effect; Choice of Law.

Section 29. Subordination.

Section 30. Attorneys’ Fees.

Section 31. Lessor’s Access.

Section 32. Auctions.

Section 33. Signs.

Lessee shall not place any sign upon the Premises without Lessor’s prior written consent, except for any signage reasonably related to Lessee's use of the Premises.

Section 34. Merger.

Section 35. Quiet Possession.

Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, and provisions on Lessee’s part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the term subject to all of the provisions of this Lease.
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 Section 36. Security Measures.

Section 37. Easements.

Lessee shall sign any of the aforementioned documents upon request of Lessor and failure to do so shall constitute a material breach of this Lease.

Section 38. Performance Under Protest.

Section 39. Authority.

Lessee represents and warrants to Lessor that this Lease has been duly authorized, executed and delivered by Lessee.

Section 40. Terms and Headings.

Section 41. Exhibits and Riders.

All Exhibits and Riders attached to this Lease (which consist solely of Exhibit A) are hereby incorporated in this Lease for all purposes as though set forth at length herein.

Section 42. Successors and Assigns.

Subject to the provisions of Section 13, and except as otherwise provided in this Lease, all of the covenants, conditions and provisions of this Lease shall be binding upon, and shall inure to the benefit of, the parties and their respective heirs, personal representatives and permitted successors and assigns; provided, however, no rights shall #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 inure to the benefit of any Transferee of Lessee unless the Transfer to such Transferee is made in compliance with the provisions of Section 13, and no options or other rights which are expressly made personal to the original Lessee shall be assignable to or exercisable by anyone other than the original Lessee under this Lease.

Section 43. Professional Fees.

Section 44. Nondisclosure of Lease Terms.

This Section 44 shall not apply to any disclosure required by applicable law (including, without limitation, the Public Records Act).

Section 45. Joint and Several Liability.

Section 46. Broker Indemnification.

Lessee shall indemnify, defend and hold Lessor harmless from and against any claims, demands, liabilities, damages or expenses (including attorneys' fees and costs incurred in defending against any claim or demand) for brokerage commissions, finder fees or related costs incurred by Lessee or arising from any commitments or agreements alleged to have been made by Lessee relating to this Lease. Lessor shall indemnify, defend and hold Lessee harmless from and against any claims, demands, liabilities, damages or expenses (including attorneys' fees and costs incurred in defending against any claim or demand) for brokerage commissions, finder fees or related costs incurred by Lessor or arising from any commitments or agreements alleged to have been made by Lessor relating to this Lease. This Section 46 shall survive the expiration or earlier termination of the term of this Lease.
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 Section 47. Holding Over.

Section 48. Subdivision Map Act.

Lessee shall pay to Lessor, within thirty (30) days of receipt of an invoice, any expenses incurred by Lessor arising from any breach of any representation, warranty or covenant by Lessee in this Section 48. If there is a claim, or Lessor determines, that this Lease is in violation of the Subdivision Map Act, upon the written request of Lessor, Lessor and Lessee will enter into a modification to this Lease as may be deemed reasonably necessary or appropriate by Lessor to comply with the Subdivision Map Act. Lessee shall pay all out-ofpocket expenses incurred by Lessor in connection with such modification within thirty (30) days of receipt of an invoice. The representations, warranties and covenants by Lessee under this Section 48 are being made by Lessee to Lessor to induce Lessor to enter into the Lease and are being relied upon by Lessor; but for such representations, warranties and covenants, Lessor would not enter into this Lease.
(Signatures on next page)
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE

AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE

PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE

TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE

INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

Lessor and Lessee have executed this Lease at the place and on the date specified immediately adjacent to their respective signatures.
“LESSOR”
Executed at Modesto, California MODESTO & EMPIRE TRACTION COMPANY on ___________________, 2014.

By:
(Signature)
Address: 530 Eleventh Street Name:

Modesto, CA 95354 Title:

Taxpayer I.D.: 94-1562141
By: __________________________________
(Signature)
Name:

Title:
“LESSEE”

CITY OF MODESTO
Executed at Modesto, California By:
on ___________________, 2014. (Signature)
Name:

Address: _______________________ Title:
_______________________
Taxpayer I.D. By:
(Signature)
Name:

Title:
608861.2
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 #24..
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Water Well/Right-Of-Way Lease – Mariposa E & W Pump Lot – Well #91 & 92 #24..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 8, 2024
Date: September 6, 2024
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Wiliam Wong, Director of Utilities
SUBJECT: Painting of Water Wells and Tank Sites
CONTACT: Manuel Martinez, Acting Water Division Manager, [email protected], 209-342-4592
DESCRIPTION:

Consider approving an Agreement for Painting of Water Wells and Tank Sites to HB Restoration Inc., of Rio Linda, CA for a total amount not to exceed $669,076 over five years. (Funding Source: Water Fund)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City’s 2020-2025 Strategic plan Initiatives Goal D:

Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

The City of Modesto, Water Services Division, operates and maintains 102 water well sites and 13 storage tank sites located in and around Modesto, Salida, Turlock, Grayson, Del Rio, Ceres, and Empire. The Water Division’s painting program identifies and prioritizes the painting of well and tank sites, estimating six (6) well sites and one (1) tank site for each contract year.

Tank sites are typically painted every five (5) to ten (10) years with an estimated annual cost of $82,000. Services could include painting tanks, control rooms, electrical cabinets, conduit, motors, water pipelines and appurtenances. All surfaces are pressure washed, paint scraped when needed, spot primed and painted.

On September 19, 2019, by Resolution No. 2019-458, Council approved an agreement with HB Restoration Inc. for the painting of water well and tank sites for a total amount not to exceed $423,500 over five years.

On October 20, 2023, a first amendment was approved to execute the Year 5 option by extending the Original Agreement with HB Restoration Inc., for the painting of water well and tank sites through September 23, 2024.
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City Council, October 8, 2024
Painting of Water Wells and Tank Sites

Page 2 of 3 ends

Modesto City CouncilOctober 8, 2024

Modesto City Council
October 8, 2024